Marine International Holdings Limited 遊艇國際控股有限公司 WARNING

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, 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 Application Proof.

Application Proof of

Marine International Holdings Limited 遊艇國際控股有限公司 (the ‘‘Company’’) (Incorporated in the Cayman Islands with limited liability)

WARNING

The publication of this Application Proof is required by The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) and the Securities and Futures Commission (the ‘‘SFC’’) solely for the purpose of providing information to the public in Hong Kong.

This Application Proof is in draft form. The information contained in it is incomplete and is subject to change which can be material. By viewing this document, you acknowledge, accept and agree with the Company, its affiliates, its sponsor, advisers or members of the underwriting syndicate that:

(a) this document is only for the purpose of providing information and facilitating equal dissemination of information of the Company to the public in Hong Kong and not for any other purposes. No investment decision should be based on the information contained in this document;

(b) the publication of this document or supplemental, revised or replacement pages on the Stock Exchange’s website does not give rise to any obligation of the Company, its affiliates, its sponsor, advisers or members of the underwriting syndicate to proceed with any offering in Hong Kong or any other jurisdiction. There is no assurance that the Company will proceed with the offering;

(c) the contents of this document or any supplemental, revised or replacement pages may or may not be replicated in full or in part in the actual final listing document;

(d) the Application Proof is not the final listing document and may be updated or revised by the Company from time to time in accordance with the Rules Governing the Listing of Securities on the GEM of the Stock Exchange;

(e) this document does not constitute a prospectus, offering circular, notice, circular, brochure or advertisement offering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to make offers to subscribe for or purchase any securities, nor is it calculated to invite or solicit offers by the public to subscribe for or purchase any securities;

(f) this document must not be regarded as an inducement to subscribe for or purchase any securities, and no such inducement is intended;

(g) neither the Company nor any of its affiliates, sponsor, advisers or underwriters is offering, or is soliciting offers to buy, any securities in any jurisdiction through the publication of this document;

(h) no application for the securities mentioned in this document should be made by any person nor would such application be accepted;

(i) the Company has not and will not register the securities referred to in this document under the United States Securities Act of 1933, as amended, or any state securities laws of the United States;

(j) as there may be legal restrictions on the distribution of this document or dissemination of any information contained in this document, you agree to inform yourself about and observe any such restrictions applicable to you; and

(k) the application to which this document relates has not been approved for listing and the Stock Exchange and the SFC may accept, return or reject the application for the subject public offering and/or listing.

If an offer or an invitation is made to the public in Hong Kong in due course, prospective investors are reminded to make their investment decisions solely based on the prospectus of the Company registered with the Registrar of Companies in Hong Kong, copies of which will be distributed to the public during the offer period. THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

IMPORTANT

IMPORTANT: If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

Marine International Holdings Limited 遊艇國際控股有限公司 (Incorporated in the Cayman Islands with limited liability)

[REDACTED]

Number of [REDACTED] : [REDACTED] Shares (subject to the [REDACTED]) Number of [REDACTED] : [REDACTED] Shares (subject to reallocation) Number of [REDACTED] : [REDACTED] Shares (subject to reallocation and the [REDACTED]) Maximum [REDACTED] : Not more than HK$[REDACTED] per (subject to a Downward [REDACTED], plus brokerage of 1%, SFC [REDACTED] Adjustment) transaction levy of 0.0027% and Stock Exchange trading fee of 0.005% (payable in full on application in Hong Kong dollars and subject to refund) (if the [REDACTED] is set at 10% below the bottom end of the indicative [REDACTED] Range after making a Downward [REDACTED] Adjustment, the [REDACTED] will be HK$[REDACTED] per [REDACTED]) Nominal Value : HK$0.01 per Share [REDACTED] : [REDACTED]

Sole Sponsor

Kingsway Capital Limited

[REDACTED] and [REDACTED] [REDACTED]

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this document, 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 document. A copy of this document, having attached thereto the documents specified in ‘‘Documents Delivered to the Registrar of Companies in Hong Kong and Available for Inspection’’ in Appendix V to this document, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this document or any of the other documents referred to above. The [REDACTED] is expected to be determined by the [REDACTED] between the [REDACTED] (for itself and on behalf of the [REDACTED]) and our Company on or about [REDACTED], [REDACTED] or such later date as may be agreed between the parties and in any event, not later than [REDACTED], [REDACTED]. If, for any reason, the [REDACTED] (for itself and on behalf of the [REDACTED]) and our Company are unable to reach an agreement on the [REDACTED] by that date or such later date as agreed by our Company and the [REDACTED] (for itself and on behalf of the [REDACTED]), the [REDACTED] will not become unconditional and will lapse. The [REDACTED] will not be more than HK$[REDACTED] per [REDACTED] and is expected to be not less than HK$[REDACTED] per [REDACTED], unless otherwise announced (subject to a Downward [REDACTED] Adjustment). The [REDACTED] (for itself and on behalf of the [REDACTED]) may, with the consent of our Company, reduce the above indicative [REDACTED] Range at any time prior to the [REDACTED]. In such a case, notice of the reduction in the indicative [REDACTED] Range will be available on the website of the Stock Exchange at www.hkexnews.hk and the website of our Company at www.marineinternationalholdings.com. Prospective investors of the [REDACTED] should note that the [REDACTED] (for itself and on behalf of the [REDACTED]) are entitled to terminate the [REDACTED] by giving a notice in writing to our Company if certain circumstances arise prior to [8: 00] a.m. (Hong Kong time) on the [REDACTED]. Such circumstances are set out in ‘‘[REDACTED] — [REDACTED] and expenses — [REDACTED] — Grounds for termination’’ in this document. It is important that you carefully read such section for further details. Prior to making an investment decision, prospective investors should carefully consider all the information set out in this document, including the risk factors set out in ‘‘Risk Factors’’ in this document. No action has been taken to permit an [REDACTED] of the [REDACTED] or the distribution of this document in any jurisdiction other than in Hong Kong. Accordingly, this document may not be used for the purpose of, and does not (and is not intended to) constitute, an offer or invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not authorised or to any person to whom it is unlawful to make such an offer or invitation. The distribution of this document and the [REDACTED] of the [REDACTED] in other jurisdictions may be restricted by law and therefore persons who possess this document should inform themselves about, and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities law.

ATTENTION We have adopted a fully electronic application process for the [REDACTED]. We will not provide printed copies of this document or printed copies of any [REDACTED] to the public in relation to the [REDACTED]. This Document is available at the websites of the Stock Exchange (www.hkexnews.hk) and our Company (www.marineinternationalholdings.com). If you require a printed copy of this document, you may download and print from the website addresses above.

[REDACTED] THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

IMPORTANT

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–i– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

IMPORTANT

[REDACTED]

–ii– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to higher market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspaper. Accordingly, prospective investors should note that they need to have access to the Stock Exchange’s website at www.hkexnews.hk in order to obtain up-to-date information on GEM-listed issuers.

– iii – THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

EXPECTED TIMETABLE

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–iv– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

EXPECTED TIMETABLE

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–v– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

EXPECTED TIMETABLE

[REDACTED]

–vi– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

EXPECTED TIMETABLE

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–vii– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

CONTENTS

IMPORTANT NOTICE TO INVESTORS

This document is issued by our Company solely in connection with the [REDACTED] and the [REDACTED] and does not constitute an offer to sell or a solicitation of an offer to buy any security other than the [REDACTED] [REDACTED] by this document pursuant to the [REDACTED]. This document may not be used for the purpose of, and does not constitute, an offer or invitation in any other jurisdiction or in any other circumstances. No action has been taken to permit a [REDACTED] of the [REDACTED] in any jurisdiction other than Hong Kong and no action has been taken to permit the distribution of this document in any jurisdiction other than Hong Kong. The distribution of this document and the [REDACTED] and [REDACTED] of the [REDACTED] in other jurisdictions are subject to restrictions, and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorisation by the relevant securities regulatory authorities or an exemption therefrom.

You should rely only on the information contained in this document to make your investment decision. We have not authorised anyone to provide you with information that is different from what is contained in this document. Any information or representation not made in this document must not be relied on by you as having been authorised by us, the Sole Sponsor, the [REDACTED],the[REDACTED],the[REDACTED], any of our or their affiliates or any of their respective directors, officers, employees or agents or any other person or party involved in the [REDACTED].

Page

CHARACTERISTICS OF GEM ...... [iii]

EXPECTED TIMETABLE ...... [iv]

CONTENTS ...... [viii]

SUMMARY ...... [1]

DEFINITIONS ...... [24]

GLOSSARY OF TECHNICAL TERMS ...... [32]

FORWARD-LOOKING STATEMENTS ...... [33]

RISK FACTORS ...... [35]

INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED] ...... [51]

DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] ...... [55]

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CONTENTS

Page

CORPORATE INFORMATION ...... [59]

INDUSTRY OVERVIEW ...... [61]

REGULATORY OVERVIEW ...... [87]

HISTORY, REORGANISATION AND GROUP STRUCTURE ...... [119]

OUR BUSINESS ...... [135]

DIRECTORS AND SENIOR MANAGEMENT ...... [199]

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS ...... [213]

CONNECTED TRANSACTIONS ...... [220]

SUBSTANTIAL SHAREHOLDERS AND SIGNIFICANT SHAREHOLDERS ...... [221]

SHARE CAPITAL ...... [222]

FINANCIAL INFORMATION ...... [225]

STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED] ...... [272]

[REDACTED] ...... [292]

STRUCTURE AND CONDITIONS OF THE [REDACTED] ...... [304]

HOW TO APPLY FOR [REDACTED] ...... [314]

APPENDIX I — ACCOUNTANT’S REPORT ...... I-1

APPENDIX II — UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... II-1

APPENDIX III — SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW ...... III-1

APPENDIX IV — STATUTORY AND GENERAL INFORMATION ...... IV-1

APPENDIX V — DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION ...... V-1

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SUMMARY

This summary aims to give you an overview of the information contained in this document. Since this is a summary, it does not contain all the information that may be important to you. You should read the whole document before you decide to invest in the [REDACTED]. There are risks associated with any investment. Some of the particular risks in investing in the [REDACTED] are set out in ‘‘Risk Factors’’ in this document. You should read that section carefully before you decide to invest in the [REDACTED].

OVERVIEW

We are a yacht dealership group headquartered in Hong Kong principally engaging in the sales of first-hand yachts of luxury and mid-to-high-end brands. We also engage in the sales of second-hand yachts and other ancillary accessories and offer a range of value-added services including maintenance and repair services. During the Track Record Period, substantially all of our yacht sales were made in Hong Kong and we expanded our sales network to Singapore, Taiwan and Shenzhen. We have a balanced portfolio with a wide variety of product offerings such as luxury motor yachts, sport boats and inflatable boats to capture a broad scope of customers. We have a sales office in Hong Kong to promote the latest models of yachts, to attract potential customers and to facilitate the sales of our yachts. Our customers are primarily individuals with high disposable income located in Hong Kong who are the end users of our products as well as a number of corporations. As a result of our strong operating capabilities and local market knowledge, we have established strong brand reputation and leading market position in Hong Kong. In addition, we have appointed a local sub-dealer in Taiwan with local market knowledge and network to strategically expand our customer base in Taiwan. In October 2019, we have also appointed a local sub-dealer in Shenzhen to strategically expand our customer base in Shenzhen. According to the Frost & Sullivan Report, our Group ranked third in terms of the revenue generated for the year ended 30 April 2019 among the yacht dealers in Hong Kong.

We began our yacht dealership in Hong Kong in 2014. Our dealerships in luxury motor yachts have been dedicated to Absolute and Azimut, which are amongst the few internationally renowned brands for luxury motor yachts, since 2014 and 2015, respectively. Our founder, one of our Controlling Shareholders and executive Directors, Mr. Thomas Woo, launched and introduced Absolute yachts in Hong Kong through establishing Absolute Marine and one of our Controlling Shareholders and executive Directors, Mr. Paul Grange had already established a long working relationship with Azimut during his tenure at Simpson Marine Limited, where he was the group’s sales manager of Azimut yachts. Our Directors believe that this was the foundation of our Group’s strong business relationship with Absolute and Azimut. With a view to provide more diversified products to our customers and to capture a wider customer base, we expanded our products offerings by penetrating into other types of boats, including inflatable boats and sport boats. We began our dealership with Zar Formenti to distribute inflatable boats in Hong Kong in 2015. Leveraged on our successful track record of our yacht dealerships for these brands, we also secured our appointment as the authorised dealer of Four Winns, which is a sports boat brand, in 2018.

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SUMMARY

As at the Latest Practicable Date, our brand portfolio included two luxury brands of Absolute and Azimut and two mid-to-high-end brands of Four Winns and Zar Formenti. We are:

. the exclusive authorised dealer of Absolute, an Italian luxury motor yacht manufacturer supplying luxury motor yachts and sports yachts ranging from 40 to 73 feet, in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam. The sales of first-hand Absolute luxury motor yachts amounted to HK$47.3 million, HK$32.7 million and HK$60.1 million and contributed towards approximately 19.2%, 12.9% and 13.0% of our revenue, for FY2019, FY2020 and FY2021, respectively;

. the authorised dealer of Four Winns, a USA yacht manufacturer supplying sport boats with various boat engine selection ranging from 18 to 37 feet, in Hong Kong. Our Group secured its appointment as the authorised dealer of Four Winns in 2018. The sales of Four Winns sport boats amounted to HK$2.8 million, nil and nil and contributed towards approximately 1.1%, nil and nil of our revenue, for FY2019, FY2020 and FY2021, respectively; and

. the authorised dealer of Zar Formenti, an Italian boat manufacturer supplying inflatable boats with computer numerical control features ranging from 10 to 33 feet, in Hong Kong. The sales of Zar Formenti inflatable boats amounted to HK$1.2 million, nil and HK$0.9 million and contributed towards approximately 0.5%, nil and 0.2% of our revenue, for FY2019, FY2020 and FY2021, respectively.

As at the Latest Practicable Date, we had been granted the right of dealership of yachts and other boats under four dealership agreements, covering Hong Kong, the PRC and selected locations in the Southeast Asia, namely, (a) long-term exclusive dealership agreements for a term of five years for distribution of Azimut yachts in Hong Kong, Taiwan, Guangdong Province in the PRC and Macau, and for a term of two years for distribution of Azimut yachts in Singapore; (b) a long-term exclusive dealership agreement for a term of five years for distribution of Absolute yachts in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam; (c) a dealership agreement for a term of one year for distribution of Four Winns sport boats in Hong Kong; and (d) a dealership agreement for a term of one year for distribution of Zar Formenti inflatable boats in Hong Kong.

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SUMMARY

During the Track Record Period, our revenue was derived from (i) the sale of yachts and related components and (ii) service income. For FY2019, FY2020 and FY2021, our revenue amounted to HK$246.7 million, HK$253.6 million and HK$461.2 million, respectively. During the same years, our gross profit amounted to HK$34.1 million, HK$39.0 million and HK$58.0 million, respectively.

By leveraging our strong and stable relationships with our existing yacht manufacturers, as well as our expertise in sales and services of luxury and mid-to-high- end yachts, we believe we will be able to further strengthen our leading market position in Hong Kong and replicate our success in other markets.

OUR PRODUCTS

We offer a wide variety of product offerings including luxury motor yachts, sport boats, and inflatable boats to capture a broad scope of customers looking for different types of boating experience. As at the Latest Practicable Date, our brand portfolio included two luxury brands of Absolute and Azimut and two mid-to-high-end brands of Four Winns and Zar Formenti. For details, please see ‘‘Business — Our products’’ in this document.

For the sale of first-hand yachts, the retail prices of our products are determined with reference to the yacht manufacturers’ retail pricing guidelines with recommended retail price range from HK$0.4 million to HK$150.0 million. We may occasionally offer our customers discounts of various percentages to promote the sales of certain new yachts. For the sale of second-hand yachts, the price of our products are generally determined on a cost- plus basis. For details, please see ‘‘Business — Sales and Marketing — Pricing policy and seasonality’’ in this document.

OUR CUSTOMERS

Our customers during the Track Record Period are primarily individuals with high disposable income located in Hong Kong who are the end users of our products as well as a number of corporations.

For FY2019, FY2020 and FY2021, sales to our top five customers amounted to approximately HK$163.3 million, HK$193.1 million and HK$222.2 million, representing 66.2%, 76.1% and 48.3% of our total revenue, respectively; and sales to our top customer for each of the relevant years amounted to HK$79.6 million, HK$62.6 million and HK$91.2 million, representing 32.3%, 24.7% and 19.8% of our total revenue, respectively.

During the Track Record Period, to the best knowledge and belief of our Directors, eight of our customers and/or their related companies in the same group were also our suppliers due to trade-in arrangements. For FY2019, FY2020 and FY2021, our sales of first-hand yachts to these customers accounted for approximately 23.8%, 31.0% and 12.3% of our total revenue, respectively. During the same years, our purchase of second-hand yachts from such customers and/or their related companies accounted for approximately 8.5%, 7.9% and 5.7%, respectively, of our total purchase. Gross profit for the sale of first- hand yachts to these customers for FY2019, FY2020 and FY2021 was approximately

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SUMMARY

HK$11.5 million, HK$4.8 million and HK$7.2 million, respectively, and the gross profit margin was 19.7%, 6.1% and 12.7%, respectively. For details, please see ‘‘Our Business — Overlapping of customer and supplier’’ in this document.

OUR SUPPLIERS

Suppliers of our Group are mainly yacht manufacturers and suppliers of spare parts and individual or corporate suppliers of second-hand luxury motor yachts. We have maintained stable relationships with our suppliers.

Our top suppliers are leading yacht manufacturing companies. Our two largest suppliers are headquartered in Italy and have a diverse yacht products portfolio. Our top five suppliers include yacht manufacturers and companies that supply spare parts for yacht repair in Hong Kong.

For FY2019, FY2020 and FY2021, our purchases from our top five suppliers amounted to HK$209.1 million, HK$200.4 million and HK$382.7 million, representing 91.7%, 91.0% and 94.6%, respectively, of our total purchases. Purchases from our single largest supplier amounted to HK$163.0 million, HK$141.0 million and HK$299.0 million, representing 71.5%, 64.0% and 73.9%, respectively, of our total purchases in the respective years. For details, please see ‘‘Our Business — Our suppliers’’ in this document.

Reliance on our two largest suppliers

For FY2019, FY2020 and FY2021, our luxury motor yacht product purchases from our two largest suppliers, Absolute and Azimut, amounted to HK$193.2 million, HK$177.2 million and HK$359.6 million, representing 84.7%, 80.5% and 88.9% of our total purchases, respectively. Despite the supplier concentration, our Directors are of the view and the Sole Sponsor concurs that we are capable of sustaining our business and sales in the future. We have an established business relationship with each of Absolute and Azimut and have been selling luxury motor yacht products supplied from Absolute and Azimut since 2014 and 2015, respectively. Absolute was our sole supplier of luxury motor yachts until April 2015 when we started selling luxury motor yachts supplied by Azimut. Our Group was the top dealer for Absolute in 2016 and 2017 and we were awarded the ‘‘Best Brand Presence in Asia’’ by Asia Boating Awards in 2017, 2018 and 2019 for Azimut. Hong Kong is the best market for Azimut in Asia and our Group was one of their top five dealers worldwide. Given our performance and stable working relationship and excellent track record with Absolute and Azimut, we have obtained authorisation from both Absolute and Azimut to distribute yachts for both brands and we were granted a five-year exclusive dealership by both Azimut and Absolute which is not a common industry practice.

With a view to provide more diversified products to our customers and to capture a wider customer base, we expanded our products offerings by penetrating into other types of boats, including inflatable boats and sport boats. We began our dealership with Zar Formenti to distribute inflatable boats in Hong Kong in 2015. Leveraged on our successful track record of our yacht dealerships for these brands, we also secured our appointment as

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SUMMARY the authorised dealer of Four Winns, which is a sports boat brand, in 2018. Our Group has obtained all necessary waivers and/or consents from Absolute and Azimut to deal with yachts of both brands as well as Zar Formenti and Four Winns.

In the unlikely event that business relationship between our Group and Absolute or Azimut is interrupted for any reason or is terminated, our Group will immediately negotiate with other luxury yacht suppliers for exclusive dealerships to maintain our competitiveness. We do not foresee substantial difficulty in sourcing supplies from alternative suppliers because there are a number of alternative suppliers of luxury yacht manufacturers. According to the Frost & Sullivan Report, in 2019 at least five well-known yacht manufacturers had not appointed authorised dealers for the sale of their yachts in Hong Kong and in other territories which our Group has secured yacht dealerships. During the Track Record Period, our Group had been approached by other yacht manufacturer offering comparable products to those provided by Absolute and Azimut to explore future business opportunities but our Group decided not to represent other yacht manufacturers at the moment. Given the difficulty, stringent selection criteria and the high threshold to secure exclusive dealership to represent even one world-class luxury motor yacht brand in one territory, our Group considers the existing exclusive dealership with both Absolute and Azimut in various territories in Asia to be exceptional and rare and it is our Group’s intention to reinforce the business relationship with both Absolute and Azimut so as to leverage on this exceptional opportunity to develop the business in the territories which we are granted yacht dealerships. Regardless, our Group will try to obtain consent from Absolute and Azimut to represent other yacht brands as and when determined by our management. Our Directors consider that our Group will have reasonable time to negotiate for dealership and arrange for supply from alternative luxury yacht suppliers to meet the demand of our customers.

It is our intention to gradually expand our supplier base by means of organic growth of our business, expansion into various product segments which Absolute and Azimut are not suppliers and through strategic cooperation with other boating companies and dealers. We have entered into one-year dealership agreements with Zar Formenti which had been renewed on an annual basis since 2015 to distribute inflatable boats in Hong Kong. In 2018, we have entered into a one-year dealership agreement with a new supplier, Four Winns, for the supply of sport boats in Hong Kong. As at the Latest Practicable Date we have completed the sale of five Zar Formenti boats with total contract sum of approximately HK$0.9 million for the financial year ended 2021. We have been expanding and will continue to expand our supplier base by exploring co-operation opportunities with new suppliers of products that do not compete with Absolute and Azimut such as sailing boats and fishing boats, introducing new product segments that we consider to have growth potential as well as increasing our sales of second-hand yachts. For risks associated with our supplier concentration, please see ‘‘Risk Factors — Risks Related to our Business — A significant portion of our turnover is derived from the sales of luxury motor yachts of our two major brands, Absolute and Azimut, and any weakening of such brands or our relationships with such brands could affect our operations and financial results’’ in this document.

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SUMMARY

OUR COMPETITIVE STRENGTHS

We believe that we have the following competitive strengths which enable us to further grow and differentiate ourselves from our competitors:

. Strong and stable relationships with leading yacht manufacturers, in particular, our strategic and exclusive five-year dealership agreement with each of Absolute and Azimut;

. Strategic network in Hong Kong and exclusive dealership rights in neighbouring regions with strong growth potential;

. Customer-oriented business philosophy supported by our target marketing and sales channels and efficient customer management;

. We provide a wide variety of product offerings and value-added services; and

. Experienced senior management team with a strong track record and are supported by a team of talented and well-trained professionals.

For further details, please see ‘‘Our Business — Our competitive strengths’’ in this document.

OUR STRATEGIES

Our objective is to further strengthen our position as a yacht dealer and expand our market share by pursuing the following strategies:

. Leverage on our strong dealership brands to further expand our market share in Hong Kong and extend our footprint into Singapore, and Guangdong Province andHainanProvinceinthePRCtocapturetherisingopportunities;

. Diversify our product offerings and invest in demonstration yachts to boost our sales; and

. Enhance our brand recognition through effective marketing strategies.

Forfurtherdetails,pleasesee‘‘OurBusiness—OurBusinessStrategies’’inthis document.

COMPETITIVE LANDSCAPE

According to the Frost & Sullivan Report, the yacht distribution market in Hong Kong was considered concentrated for the year ended 30 April 2019 in terms of revenue. The market was shared by more than 100 players with a limited number of sizable market players which took the leading market position. Leading players who have formed stable dealership with world-famous yacht brands display strong market presence in Hong Kong and benefit from the established reputation and recognition of their products.

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SUMMARY

For further details on the competitive landscape of the yacht distribution market, please see ‘‘Industry Overview’’ in this document.

OUR CONTROLLING AND SIGNIFICANT SHAREHOLDERS

So far as our Directors are aware, immediately following completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue, and the [REDACTED] (without taking into account any Shares which may be issued upon the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme), our Company will be owned as to [REDACTED]% by Bright Emerald, which is owned by Mr. Thomas Woo (our founder, Chairman of our Board and executive Director) and Mr. Paul Grange (our chief executive officer and executive Director) in equal shares, as to [REDACTED]% by Dragon United, which is wholly owned by Mr. Leslie Kong, and as to [REDACTED]% by Precious Wave, which is wholly owned by Mr. Joseph Tong. For the purposes of the GEM Listing Rules, Bright Emerald, Mr. Thomas Woo and Mr. Paul Grange are our Controlling Shareholders, and Dragon United, Precious Wave, Mr. Leslie Kong and Mr. Joseph Tong are our Significant Shareholders. See ‘‘Substantial Shareholders and Significant Shareholders’’ in this document for further details.

[REDACTED] INVESTMENT

On 14 June 2018, Absolute Marine, Marine Italia, Marinetec, Mr. Leslie Kong, Mr. Joseph Tong, Mr. Thomas Woo and Mr. Paul Grange entered into a subscription agreement in relation to the subscription of three (3) per cent. coupon convertible bonds in the aggregate principal amount of HK$8,000,000 to be issued by our Company. The subscription of the [REDACTED] Convertible Bonds pursuant to the [REDACTED] Convertible Bonds Subscription Agreement was completed on 1 November 2018, that the [REDACTED] Convertible Bonds were issued, as directed by Mr. Leslie Kong and Mr. Joseph Tong, to Dragon United and Precious Wave. See ‘‘History, Reorganisation and Group Structure — [REDACTED] Investment’’ in this document for further details of the [REDACTED] Investment.

SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme on [‧] under which certain selected classes of participants (including, among others, full-time employees and Directors) may be granted options to subscribe for our Shares. The principal terms of the Share Option Scheme are summarised in the paragraph headed ‘‘D. Share Option Scheme’’ in Appendix IV to this document.

KEY FINANCIAL INFORMATION AND OPERATING DATA

The following tables set forth a summary of our financial information for FY2019, FY2020 and FY2021, and should be read in conjunction with our financial information and the notes thereto included in the Accountant’s Report set out in Appendix I to this document. The summary financial information has been prepared in accordance with HKFRS. For more information, please see ‘‘Financial Information’’ in this document.

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SUMMARY

Selected consolidated results of operations

The table below set out the consolidated statements of profit or loss and other comprehensive income of our Group for the Track Record Period extracted from the Accountant’s Report set out in Appendix I to this document:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Revenue 246,710 253,575 461,237 Cost of sales (212,563) (214,602) (403,264)

Gross profit 34,147 38,973 57,973

Profit before income tax 522 7,640 32,909 Income tax expense (1,725) (2,407) (5,632)

(Loss)/Profit for the year (1,203) 5,233 27,277

Other comprehensive (loss)/income Items that may be subsequently reclassified to profit or loss Exchange differences on translation of financial statements of overseas subsidiaries (5) 80 (111)

Total comprehensive (loss)/income for the year (1,208) 5,313 27,166

(Loss)/Profit for the year attributable to: Owners of the Company (747) 5,520 27,345 Non-controlling interests (456) (287) (68)

(1,203) 5,233 27,277

Revenue

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SUMMARY

The following table sets forth the breakdown of sales volume and revenue during the Track Record Period:

Year ended 30 April 2019 2020 2021 Sales %oftotal Sales % of total Sales % of total volume revenue volume revenue Volume revenue (Number of (Number of (Number of yacht) HK$’000 % yacht) HK$’000 % yacht) HK$’000 %

Sale of yachts and related components — Sale of first-hand yachts 13(Note) 228,667 92.7 10 228,081 89.9 18 385,101 83.5 — Sale of second-hand yachts 1 4,026 1.6 3 9,868 3.9 8 49,089 10.6 — Sale of related components N/A 4,896 2.0 N/A 3,439 1.4 N/A 6,380 1.4

237,589 96.3 241,388 95.2 440,570 95.5

Service income 9,121 3.7 12,187 4.8 20,667 4.5

Total: 246,710 100.0 253,575 100.0 461,237 100.0

Note: It includes a sale of yacht in equal share to an Independent Third Party in the form of co- ownership. For further details, please refer to the paragraph headed ‘‘Financial Information — Description of Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income’’ in this document.

Gross profit and gross profit margin

For FY2019, FY2020 and FY2021, our overall gross profit margin was approximately 13.8%, 15.4% and 12.6%, respectively. Since majority of our gross profit was contributed by the sale of first hand yachts, the fluctuation of our overall gross profit margin during FY2019 and FY2020 was largely in line with the fluctuation of gross profit margin of sale of first-hand yachts and for FY2021, such drop was mainly due to the relatively low gross profit margin of sale of second-hand yachts and sale of a first hand super yacht for FY2021. As for service income, it generally entails higher gross profit margin as compared to that of the sale of yachts and related components, primarily because manpower and technical skills are required for repair and maintenance of yachts and thus our Group was able to charge a higher margin.

Loss/Profit for the year

Our Group recorded loss for FY2019 amounted to approximately HK$1.2 million and profit for the year of approximately HK$5.2 million and HK$27.3 million for FY2020 and FY2021, respectively. Net loss for FY2019 was primarily attributable to [REDACTED] of approximately HK$[REDACTED] being recorded for the same year. [REDACTED] included in the FY2020 and FY2021 amount to approximately HK$[REDACTED] and HK$[REDACTED].

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SUMMARY

Highlights of consolidated statements of financial position

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Non-current assets 6,237 5,783 3,377 Current assets 137,063 104,612 237,006 Current liabilities 112,148 94,076 197,068 Net current assets 24,915 10,536 39,938 Total equity/Net assets 23,318 15,631 42,797 Non-controlling interests (357) (616) (723)

Net assets decreased from approximately HK$23.3 million as at 30 April 2019 to approximately HK$15.6 million as at 30 April 2020, primarily attributable to (i) the interim dividend of HK$13.0 million which was fully settled by offsetting against the amounts due from directors; and (ii) increase in inventories of approximately HK$2.0 million. Net assets increased from approximately HK$15.6 million as at 30 April 2020 to approximately HK$42.8 million as at 30 April 2021, primary attributable to the combined effect of (i) increase in trade and other receivables of approximately HK$144.0 million; (ii) decrease in borrowings of approximately HK$34.2 million; (iii) decrease in inventories of approximately HK$34.9 million; and (iv) increase in trade and other payables of approximately HK$134.4 million.

Highlights of consolidated statements of cash flows

The following table summarises selected cash flows data from our consolidated statements of cash flows for the Track Record Period:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Operating profit before working capital changes 2,877 13,645 33,691 Changes in working capital 13,859 (1,470) 22,976 Income taxes paid (6,093) (3,352) (2,219) Net cash from operating activities 10,643 8,823 54,448 Net cash used in investing activities (17,252) (11,506) (2,246) Net cash from/(used in) financing activities 5,499 17,486 (36,730) Net (decrease)/increase in cash and cash equivalents (1,110) 14,803 15,472 Cash and cash equivalents at beginning of year 9,356 8,241 22,937 Effect for foreign exchange rate changes (5) (107) 1,305 Cash and cash equivalent at the end of year, represented by bank balances and cash 8,241 22,937 39,714

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SUMMARY

The cash and cash equivalents decreased by approximately HK$1.1 million, from approximately HK$9.4 million as at 30 April 2018 to approximately HK$8.2 million as at 30 April 2019, which was mainly attributable to combined effects of (i) net cash from operating activities of approximately HK$10.6 million; (ii) net cash from financing activities of approximately HK$5.5 million; (iii) operating profit before working capital changes of approximately HK$2.9 million; and (iv) net cash used in investing activities of approximately HK$17.3 million.

The cash and cash equivalents increased by approximately HK$14.8 million, from approximately HK$8.2 million as at 30 April 2019 to approximately HK$22.9 million as at 30 April 2020, which was mainly attributable to combined effects of (i) operating profit before working capital changes of approximately HK$13.6 million; (ii) net cash from financing activities of approximately HK$17.5 million; (iii) net cash from operating activities of approximately HK$8.8 million; and (iv) net cash used in investing activities of approximately HK$11.5 million.

The cash and cash equivalents increased by approximately HK$16.8 million, from approximately HK$22.9 million as at 30 April 2020 to approximately HK$39.7 million as at 30 April 2021, which was mainly attributable to combined effects of (i) net cash from operating activities of approximately HK$54.4 million; and (ii) net cash used in investing activities of approximately HK$2.2 million and net cash used in financing activities of approximately HK$36.7 million.

Highlights of key financial ratios

The following table sets forth certain major financial ratios of our Group during the Track Record Period/as at the dates indicated.

As at/For the year ended 30 April Notes 2019 2020 2021

Gross profit margin 1 13.8% 15.4% 12.6% Netprofitmargin 2 N/A 2.1% 5.9% Current ratio (times) 3 1.2 1.1 1.2 Quick ratio (times) 4 0.8 0.6 1.1 Gearing ratio 5 34.7% 300.9% 27.9% Net debt to equity 6 N/A 154.2% N/A Return on equity 7 N/A 33.5% 63.7% Return on total assets 8 N/A 4.7% 11.3% Interest coverage ratio (times) 9 1.9 10.4 21.7

Notes:

1. Gross profit margin equals gross profit for the year divided by revenue for the relevant year and multiplied by 100%.

2. Net profit margin equals net profit for the year divided by revenue for the relevant year and multiplied by 100%.

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SUMMARY

3. Current ratio is calculated by current assets over current liabilities as at the end of the respective year and multiplied by 100%.

4. Quick ratio is calculated by current assets less inventory over current liabilities as at the end of the respective year.

5. Gearing ratio is calculated by total borrowings over total equity as at the end of the respective year and multiplied by 100%. Total borrowings includes amounts due to Directors, convertible bonds, borrowings and lease liabilities. The increase in gearing ratio as at 30 April 2020 as compared to that of 2019 was primarily due to the increase in borrowings of approximately HK$36.5 million during the year.

6. Net debt to equity is calculated by net debt over total equity as at the end of the respective year/period and multiplied by 100%. Net debt includes amounts due to Directors, convertible bonds, borrowings and lease liabilities net of cash and cash equivalents. The net debt to equity ratio increased to approximately 154.2% as at 30 April 2020 was mainly driven by the increase in borrowing of approximately HK$36.5 million and decrease in equity as a result of dividend paid accounted for approximately HK$13.0 million during the year.

7. Return on equity is calculated by profit for the year over total equity as at the end of the respective year and multiplied by 100%.

8. Return on total assets is calculated by profit for the year over total assets at the end of the respective year and multiplied by 100%.

9. Interest coverage ratio is calculated by profit for the year before interest and tax over interest expense for the year.

Our Directors consider the high gearing ratio and net debt to equity as at 30 April 2020 was only temporary as our Group entered into such arrangements during FY2020 as bridging purpose. The high ratios were mainly attributable to the increase in certain borrowings for the purchase of yachts for FY2020 to support the growth of the business of our Group, which was proven by the financial performance of our Group for FY2020 and FY2021.

[REDACTED]

Our Group recorded [REDACTED] of approximately HK$[REDACTED], HK$[REDACTED] and HK$[REDACTED] for FY2019, FY2020 and FY2021, respectively. Our Group expects that the total [REDACTED], which is approximately [REDACTED]%ofthegross[REDACTED] from the [REDACTED] calculated based on the mid-point of the [REDACTED] range and assuming the [REDACTED] is not exercised, which is non-recurring in nature, will amount to approximately HK$[REDACTED],of which: (i) approximately HK$[REDACTED] is directly attributable to the issue of the [REDACTED] pursuant to the [REDACTED] and will be accounted for as a deduction from equity upon the [REDACTED]; and (ii) approximately HK$[REDACTED] is expected to be charged to the statement of profit or loss and other comprehensive income subsequent to the Track Record Period and upon [REDACTED].

Such [REDACTED] are current estimate for reference only. The actual amounts to be recognised to the profit and loss of our Group or to be capitalised are subject to adjustments based on audit and changes in variables and assumptions.

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SUMMARY

IMPACT OF THE OUTBREAK OF COVID-19 ON OUR GROUP

In December 2019, an outbreak caused by a new type of coronavirus, COVID-19, was first identified and have since escalated into a global pandemic affecting millions worldwide. In response to the outbreak, governments worldwide have take measures to combat the spread of COVID-19. Set out below are some recent government measures relevant to the Group’s business operations.

Government policies to combat COVID-19

(i) Hong Kong

In Hong Kong, the Hong Kong government has implemented enhanced containment measures to curb the spread of COVID-19. As at the Latest Practicable Date, all inbound travellers need to comply with quarantine measures. Among others, all persons arriving at Hong Kong (either via the airport or land boundary control points) who have stayed in places outside the PRC in the previous 21 days, have to undergo compulsory quarantine for 21 days in designation quarantine hotels. Meanwhile, inbound travellers who have not stayed in places outside the PRC or Macao in the previous 14 days are subject to 14-day compulsory quarantine at home, quarantine hotels or other accommodation. Following the end of compulsory quarantine, inbound travellers may be required to undergo self- monitoring in the subsequent 7 days and compulsory testing, depending on the place they have stayed during the relevant period, as well as whether they are fully vaccinated. Moreover, the Government announced on 2 June 2021 that compulsory quarantine and compulsory testing arrangement for persons arriving at Hong Kong from Taiwan and Singapore has been subject to tightened measures depending on their vaccination status, so as to minimise the chance of the virus entering the community.

(ii) Singapore

In March 2020, the Maritime and Port Authority of Singapore implemented restrictions, to prevent the spread of COVID-19 from abroad. All foreign tourists, regardless of nationality, were not allowed to enter or transit through Singapore and cruise ships were not allowed to dock. With the gradual recovery of economic activities, the Singapore Tourism Board announced that from November 2020, cruise ships docking at ports will be allowed to travel after strengthening security measures and obtaining the newly formulated health and safety certification. The restrictions on cargo ships which can be used to deliver yachts are also gradually being released since April 2020 in Singapore. As shipping is an important sector of Singapore’s economy, the ports of Singapore remain open, cargo operations and provide basic maritime services during the outbreak of the COVID-19, to ensure commerce by sea and global supply chains remain undisrupted. All sailors on the cargo ships will be allowed to enter Singapore after completion of the relevant quarantine and testing requirements by the Maritime and Port Authority of Singapore. Furthermore, the Maritime and Port Authority of Singapore, along with the Singapore Government, has rolled our various relief measures for the maritime sector, such as the MaritimeSG Together Package, effective 1 May 2020, and other broad-based measures provided under the Budget series to ensure minimum disruption to the shipping industry.

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SUMMARY

(iii) Italy

On 21 March 2020, the Prime Minister of Italy had announced that all Italian business must close until 3 April 2020 with the exception of those essential to maintaining the country’s supply chain, in order to control the spread of COVID-19. On 1 April 2020, Minister of Health Roberto Speranza announced the extension of the lockdown in Italy to be in effect until 13 April 2020. On 10 April 2020, the lockdown in Italy was further extended until 3 May 2020, with the exception of certain shops being allowed to open starting from 14 April 2020. Starting from 4 May 2020, the Italian government began to ease the lockdown measures including but not limited to allowing Italians to visit relatives, shops and cultural sites allowed to reopen starting 18 May 2020 and bars, restaurants and hairdressers to reopen starting 1 June 2020. It was further announced on 16 May 2020 that starting from 3 June 2020, travel to and from abroad was allowed. Based on the information from the World Health Organization, since October 2020, the number of single-day newly confirmed cases of COVID-19 in the world has repeatedly set the highest record since the outbreak. Many European countries, including Italy, has entered ‘‘the second wave’’ of the epidemic. However, under strict government control, since December 2020, the number of newly diagnosed cases in Italy began a steady decline. As of December 2020, there are no new border restrictions introduced. However, due to the spread of a variant of the virus that causes COVID-19 in Italy, it is expected that the third wave of COVID-19 cases will peak at the end of March 2021 in Italy. As a preventive and controlling measure to counter the variant of the virus that causes COVID-19, the Italian Prime Minister signed the latest epidemic prevention law which states that starting from 6 March 2021 to 6 April 2021, a curfew, mandatory mask order, cross-regional traffic ban, and other measures will continue in Italy. On 16 May 2021, a new ordinance of the Ministry of Health was published, allowing entry from certain surrounding countries without compulsory quarantine if a negative swab test is provided 48 hours prior to arrival in Italy. The Minister has also ordered the extension of trials of ‘‘Covid-tested’’ flights, which authorised travellers to enter Italy without having to comply with health surveillance and fiduciary isolation. The ordinance and current measures are effective from 16 May 2021 to 31 July 2021.

Temporary impact on our Group

(i) Temporary impact on our suppliers and supply chain

Our Directors believe that the impact on our Group’s supply chain was short-term. As confirmed by Azimut, Absolute and Four Winns, (i) there has been no negative impact to their productions or business operations, and (ii) as at the Latest Practicable Date, there was no material delay in delivery from our respective suppliers and our respective suppliers have discharged all of their obligations to our Group under the agreed schedules for our Group’s existing sales contracts. With respect to Zar Formenti, there was no negative impacts specific to the supply of boats to our Group and they have discharged all their obligations to our Group under the agreed schedules for our Group’s existing sales contracts. Our Directors further confirm that as at the Latest Practicable Date, our Group has not encountered or experienced any material difficulty/delay in completion/delivery of our yachts to our customers and/or cancellation due to the outbreak of COVID-19. In addition, pursuant to the sales contract between our Group and our customers, our Group

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SUMMARY shall not be liable for any failure or delay in the performance under the contract to the extent that the failures or delays are proximately caused by causes beyond that our Group’s reasonable control and occurring without its fault or negligence. Therefore, our Directors are of the view that our Group will not bear any additional liability arising from such incident.

(ii) Temporary impact on our sales

COVID-19, among others, had an impact on our Group’s ability to meet the minimum purchase commitment in terms of number of yachts under our exclusive dealership agreements with Azimut for (i) Taiwan, Guangdong Province in the PRC and Macau, and (ii) Singapore for the period from 1 September 2019 to 31 August 2020. Due to the outbreak of COVID-19, certain government policies in place at the relevant time had an indirect impact on our Group’s sales to Singapore, Taiwan, and the PRC.

(a) Singapore

Due to certain docking restrictions implemented by the Maritime and Port Authority of Singapore in March 2020, cruise ships were not allowed to dock and as a result, there was a temporary impact on the delivery of goods to Singapore. Despite our Group’s subsidiary in Singapore was receiving active enquiries and providing quotations to interested customers, it was not practical for them to take delivery at the relevant period.

(b) Taiwan

For our TW sub-dealer, normally our TW sub-dealer will request our Group to provide service to arrange the shipment of yachts from the agreed overseas ports to Hong Kong. Following which, our TW sub-dealer would travel to Hong Kong to pick up its yachts. Due to the COVID-19 containment measures in Hong Kong at the relevant time, those who were not Hong Kong residents were not allowed into Hong Kong and if they were allowed into Hong Kong, they were subject to the 14-day quarantine period in Hong Kong and a 14-day quarantine when they travelled back to Taiwan. The entire process to pick up the yacht would take up to one month which in the opinion of our Directors, is not practical. Despite our Group’s TW sub-dealer was receiving active enquiries and providing quotations to interested customers, it was not practical for them to take delivery of the yachts from our Group during the relevant period.

For the PRC, our Group’s PRC customers were unable to travel to Hong Kong without a 14-day mandatory quarantine to view the demonstration yachts and since neither our Group nor our Group’s SZ sub-dealer has a demonstration yacht available in the PRC, our potential customers were unable to physically engage in the yacht experience.

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SUMMARY

Despite the indirect impact of COVID-19 mentioned above, our Group has purchased from Azimut approximately EUR11.9 million for the period from 1 September 2019 to 31 August 2020 in Hong Kong, which has exceeded the total turnover target.

Notwithstanding the short term impact that COVID-19 is expected to bring to our Group’s operations and financial position, our Directors currently expect that COVID-19 would not have a material adverse impact to the sustainability of our Group’s business in the long foreseeable future based on the following:

(i) subsequent to the Track Record Period and up to the Latest Practicable Date, our Group had 10 secured contracts on hand (which comprise the sale of 9 yachts of approximately HK$288.3 million and business introduction for a super yacht by our Group of approximately HK$9.5 million) with a total contract sum of approximately HK$297.8 million, of which one contracts with contract sum of HK$79.2 million have been completed;

(ii) there was no cessation of our Group’s operations in Hong Kong subsequent to the Track Record Period and up to the Latest Practicable Date;

(iii) in mid-April 2020, Italy have begun easing certain economic restrictions. As of December 2020, there are no new economic restrictions published. Italy has gradually eased certain economic restrictions since mid-April 2020;

(iv) our suppliers, Absolute, Azimut, Four Winns and Zar Formenti, have all confirmed that as at the Latest Practicable Date, there has been no material negative impact to their productions or business operations as a result of COVID- 19 and have all resumed their operations; and

(v) our Group has not encountered any material supply chain disruption subsequent to the Track Record Period and up to the Latest Practicable Date.

Our Directors are of the view that although COVID-19 may bring a short term impact to our Group’s operations and financial position, it is feasible for our Group to follow its expansion plan in case of prolonged outbreak of COVID-19. Furthermore, according to Frost & Sullivan, members of the public are forced to isolate themselves at home as they are advised to keep a physical distance from one another to prevent the further spread of COVID-19. Given the extended quarantine period, people are keen to spend time outdoors, and under the current COVID-19 conditions, spending time on a yacht will provide the safe environment as well as minimising the need to go to public areas where the risk is higher. As such, the Directors consider there to be sufficient market demand to support our Group’s expansion plan despite the short term impact of COVID-19.

Measures adopted by our Group to minimise the impact of COVID-19

As a business contingency plan to help us maintain our sales and brand awareness during the outbreak of COVID-19, we have increased digital marketing activity and regular contact with our clients. Since the majority of our sales are from Hong Kong, we are still able to meet and work with our customers in Hong Kong. In addition, as part of our

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SUMMARY

Group’s marketing strategy, we intend to hold private boat shows in Hong Kong for individuals of small group and virtual boat shows to cater larger audience of interested customers. In FY2021, our Group carried out 120 private one-on-one boat shows to individual potential customers incurring approximately HK$1.7 millioninprivateboat show expense which includes, among others, boat show promotion costs, fuel, cleaning costs and captain fees. Subsequent to the Track Record Period and up to the Latest Practicable Date, we carried out 2 private one-on-one boat shows incurring approximately HK$0.1 million in private boat show expense which includes, among others, boat show promotion costs, fuel, cleaning costs and captain fees.

Further, in order to minimise the risk of infection and to ensure the health and safety of our employees, we have also adopted the following measures in response to the outbreak of COVID-19:

— providing surgical masks and sanitising products in the workplace and requiring our employees to wear face masks at all times in the workplace and to maintain regular handwashing, requiring body temperature check;

— keeping a clear staff sick leave record and monitoring sick leave records for employees to identify usual trends; and

— monitoring the updates of COVID-19 controlling and prevention measures formulated by the respective local authorities closely and informing all staff as to the updates promptly.

Future outlook

According to the Frost & Sullivan Report, the COVID-19 outbreak is considered a ‘‘black swan’’ event worldwide and such unprecedented event may bring about unpredictable challenges to the global economy, it is legitimate that individuals, including high net worth individuals, will take a more cautious attitude towards consumption and thus making the business environment difficult. With the introduction of the COVID-19 vaccine in many countries starting in the end of 2020, the global COVID- 19 pandemic situation is gradually improving. Economic activities are anticipated to recover gradually in the future and individuals’ yacht consumption will progressively return to the previous level as the business environment becomes better. Based on the above and the below considerations, our Directors are of the view that the outbreak of COVID-19 would not cause any material disruptions to our Group’s operations and supply chain as at the Latest Practicable Date and it is feasible for our Group to follow its expansion plan in case of prolonged outbreak of COVID-19 pandemic, in particular, it is unlikely for our Grouptousethenet[REDACTED] for other purposes other than for our Group’s expansion plans.

Directors’ view

As illustrated above, our Directors are of the view that the potential impact on our Group’s business operations and financial conditions caused by the outbreak of COVID-19 will only be temporary and short-term and even in the event if we experience a worst case

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SUMMARY scenario, which results in the suspension of our Group’s business. Solely for illustrative purposes, based on the result of the business assessment conducted, our Directors are of the view that our Group will have sufficient working capital for at least [36] months since 1 May2021intheworstcasescenariowherethere is a suspension of operation in the event that the outbreak of COVID-19 continues to escalate and our Group may cancel or delay the purchase orders planed with our suppliers for 3 yachts with the estimated contract sum in aggregate approximately of HK$67.6 million. Our key assumptions include:

(i) we had cash and cash equivalent of approximately HK$39.7 million as at 30 April 2021, on the basis that:

(a) our Group will only be able to complete contracts secured as at the Latest Practicable Date with expected net receipts from these contracts amounting to approximately HK$1.8 million and no further revenue or cost of sales will be incurred since 1 May 2021;

(b) we will only be liable for minimum operating cost of approximately HK$0.9 million per month (which comprised fixed salaries for our staff and fixed rental of approximately HK$0.8 million and HK$0.1 million, respectively);

(ii) collection of trade and other receivables (less prepayments and deferred [REDACTED] costs) of approximately HK$3.6 million and HK$0.5 million, respectively;

(iii) payment of trade payables of approximately HK$2.4 million;

(iv) payment of current tax payable of approximately HK$4.9 million and other payables of approximately HK$4.0 million;

(v) repayment of bank borrowings of approximately HK$2.3 million in accordance with the repayment terms, respectively;

(vi) all receivables and payables as at 30 April 2021 are recovered and paid when they fall due, having taking into account prudent estimates of settlement of trade receivables and trade payables based on historical settlement patterns; and

(vii) approximately [REDACTED]%, or HK$[REDACTED],ofournet[REDACTED] from the [REDACTED] allocated for general working capital.

Our Directors will continue to assess the impact of COVID-19 on our Group’s operation and financial performance and closely monitor our Group’s exposure to the risks and uncertainties in connection with the pandemic. We will take appropriate measures as necessary and inform our Shareholders and potential investors as and where necessary. Please refer to ‘‘Our Business — Our Business — Impact of the Outbreak of COVID-19 on our Group’’ in this document for further details.

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SUMMARY

RECENT DEVELOPMENT AND MATERIAL ADVERSE CHANGE

Subsequent to the Track Record Period and up to the Latest Practicable Date, our Directors confirmed that there had not been any material changes to our business model, revenue structure and cost structure. Prospective investors should be aware of the impact of these expenses on the financial performance of our Group for FY2021. Save as the aforesaid, our Directors confirm that, up to the Latest Practicable Date, there had been no material adverse change in the trading position, operations or prospects of our Group since 30 April 2021 (being the date to which our latest financial information as set out in the Accountants’ Report in Appendix I to this document) and there had been no event since 30 April 2021 which would materially affect the information shown in the Accountants’ Report set out in Appendix I to this document.

Directors’ Opinion on the Sufficiency of our Working Capital

Our Directors are of the opinion that, taking into consideration the factors disclosed in ‘‘Impact of the outbreak of COVID-19 on our Group’’ in this section, including but not limited to (i) our Group has not encountered or experienced any material difficulty/delay in completion/delivery of our yachts to our customers and/or cancellation or any supply chain disruptions due to the outbreak of COVID-19; (ii) our Group’s ability to secure new contracts and deliver yachts after the Track Record Period and up to the Latest Practicable Date; and (iii) there was no cessation of the Group’s operations in Hong Kong subsequent to the Track Record Period and up to the Latest Practicable Date, the financial resources available to us, including internally generated funds, available facilities, and the estimated net [REDACTED] from the [REDACTED] (after a possible [REDACTED] setting the final [REDACTED] up to [REDACTED]% below the bottom end of the indicative [REDACTED] Range), our Directors are of the opinion that we have sufficient working capital required for our operations at present and for at least the next 12 months from the date of the document.

[REDACTED] AND REASONS FOR [REDACTED]

[REDACTED]

Basedonthe[REDACTED] of HK$[REDACTED] per [REDACTED],beingthemid- point of the indicative [REDACTED] range of HK$[REDACTED] per [REDACTED] to HK$[REDACTED] per [REDACTED],thenet[REDACTED] from the [REDACTED] are estimated to be approximately HK$[REDACTED] after deducting the related [REDACTED] fees and estimated expenses in connection with the [REDACTED].Our Directors intend to apply to such net [REDACTED] as follows:

. Approximately [REDACTED]%, or HK$[REDACTED], will be used to further expand our market share in Hong Kong and extend our footprint into Singapore and Guangdong Province and Hainan Province in the PRC;

. Approximately [REDACTED]%, or HK$[REDACTED], will be used to diversify our product offerings and invest in demonstration yachts to boost our sales;

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SUMMARY

. Approximately [REDACTED]%, or HK$[REDACTED], will be used to enhance our brand recognition through effective marketing strategies; and

. Approximately [REDACTED]%, or HK$[REDACTED], will be used as general working capital.

Reasons for [REDACTED]

According to the Frost & Sullivan Report, our Group ranked third in terms of the revenue generated in the year ended 30 April 2019 among the yacht dealers in Hong Kong. The yacht distribution market in Hong Kong was considered concentrated for the year ended 30 April 2019 in terms of revenue with top five yacht dealers contributed towards approximately 41.2% of the entire market. Our Directors believe that our competitiveness relies on our ability to leverage on our strong dealership brands, and ramp up our scale of operations so as broaden our customer base and to solidity our market position in the territories where we are granted dealerships. To achieve this, we plan to expand our existing operating scale by utilising the [REDACTED] from the [REDACTED].

As at 30 April 2021, our bank balances and cash, which represent our immediately available working capital, amounted to approximately HK$39.7 million. Our Directors consider that the amount of our bank balances and cash fluctuates from time to time, depending largely on the timing of (i) payment from our customers; (ii) payment to our suppliers; and (iii) the level of inventories. Therefore, the amount of bank balances at a particular date may not fully reflect our general liquidity position.

The sole reliance on internal funding will, in the view of our Directors, impose constraints on our business strategies. Our Directors estimate that we will be capable to allocate approximately HK$21.9 million from our internal resources to fund our business strategies. If our Group proceeds with the [REDACTED], our Group will be able to fund our expansion plans with an addition of HK$[REDACTED] representing the net [REDACTED] from the [REDACTED]. Our Directors consider that it is of utmost importance for us to obtain sufficient funding to cope with our future expansion and further grow our business as follows:

. Expansion plan in strategically selected regionswithstronggrowthpotential.In view of the strong growth potential in the yacht distribution market in the regions wherewearegrantedwiththeexclusivedealership rights, our Directors envisage that there would be considerable business opportunities and growth drivers which justify our expansion plan in Singapore and Guangdong Province and Hainan Province in the PRC.

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SUMMARY

. The need to solidify our market position in the territories where we are granted dealerships in view of the competitive yacht distribution industry. To maintain our competitiveness in the market, we need to leverage on our strong dealership brands and solidify our market position in the territories where we are granted dealerships. Our Directors recognise the need for further capital to ramp up our scale of operations so as to broaden our customer base in these territories, which in turn will maintain our leading position in the yacht distribution market which is competitive and concentrated as we compete with dealerships that offer other international renowned and competing brands of luxury motor yachts.

. The importance of a demonstration yacht to promote sales. Our Directors consider that yacht demonstration is important in the sales of yachts, especially for the sales of luxury motor yachts including super yachts and new models are launched from time to time. Customers are more inclined to purchase a luxury motor yacht including a super yacht if they can physically inspect and gain access to the yachts rather than merely read through the product brochures.

. Higher profit margin in the sales of super yachts providing more options to our customers. As a super yacht is larger in size among all categories of luxury motor yacht, there are more variations and more tailor-made and add-on items such as electronic equipment, furniture and engineering devices can fit in a super yacht. With more available tailor-made and add-on items, the profit margin of a super yacht is typically higher than that of a luxury motor yacht. The sale of super yachts can also diversify our product offerings and meet our customers’ various demands.

[REDACTED] STATISTICS

Based on the Basedonthe [REDACTED] of [REDACTED] of HK$[REDACTED] HK$[REDACTED] per [REDACTED] per [REDACTED]

Market capitalisation of the Shares(1) HK$[REDACTED] HK$[REDACTED] Unaudited pro forma adjusted consolidated net tangible assets of our Group per Share(2) HK$[REDACTED] HK$[REDACTED]

Notes:

(1) The calculation of the market capitalisation of the Shares is based on [REDACTED] Sharesexpectedtobe in issue immediately after the conversion of the [REDACTED] Convertible Bonds, the completion of the Capitalisation Issue and the [REDACTED] (excluding Shares which may be issued pursuant to the [REDACTED] or any options which may be granted under the Share Option Scheme).

(2) For calculation of the unaudited pro forma adjusted consolidated net tangible assets per Share, please refer to the section headed ‘‘Unaudited pro forma financial information’’ in Appendix II to this document.

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SUMMARY

DIVIDEND

For FY2019 an interim dividend for a total of HK$9.0 million has been proposed and approved by our Board and was fully paid by offsetting against the amounts due from our Directors. For FY2020, an interim dividend for a total of HK$13.0 million has been proposed and approved by our Board and was fully paid by offsetting against the amounts due from our Directors.

As at the Latest Practicable Date, we have not adopted any dividend policy and we had no fixed dividend payout ratio. The dividend distribution record in the past may not be used as a reference or basis to determine the level of dividends that may be declared or paid by our Board in the future. Our Directors may recommend a payment of dividend in the future after taking into account our operations, earnings, financial condition, cash requirements and availability, capital expenditure and future development requirements and other factors as it may deem relevant at such time. Any declaration and payment as well as the amount of the dividend will be subject to our constitutional documents and the Companies Act, including the approval of our Shareholders. For further details, please refer to the paragraph headed ‘‘Financial Information — Dividends’’ in this document.

HIGHLIGHTS OF RISK FACTORS

Our business is subject to a number of risks and you should read the entire ‘‘Risk Factors’’ in this document carefully before you decide to invest in the [REDACTED].

Some relatively material risks relating to our Group include:

. The outbreak of any severe communicable disease, if uncontrolled, could adversely affect our results of operations;

. A significant portion of our turnover is derived from the sales of luxury motor yachts of our two major brands, Absolute and Azimut, and any weakening of such brands or our relationships with such brands could affect our operations and financial results;

. Our luxury motor yacht manufacturers impose restrictions on many different aspects of our business and operations and we rely on their support and cooperation for the successful operation of our business;

. Our business model is dependent to a large extent on our ability to sell luxury motor yachts; and

. Our continuing success depends on our ability to retain our senior management and key personnel.

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SUMMARY

REGULATORY COMPLIANCE

As confirmed by our Directors, based on, inter alia, the advice of our Legal Counsel in respect of Absolute Marine, Marine Italia and Marinetec from the perspective of Hong Kong laws and the advice of our Singapore Legal Advisers in respect of Marine Italia Singapore from the perspective of Singapore laws, during the Track Record Period and up to the Latest Practicable Date, we did not have any non-compliance incident which is either a material impact non-compliance or systemic non-compliance in accordance with the interpretation of the Stock Exchange’s guidance letter HKEx-GL63-13.

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DEFINITIONS

In this document, unless the context otherwise requires, the following expressions shall have the following meanings.

‘‘2BY2 Yachts Italia’’ 2BY2 Yachts Italia Pte. Ltd., a company incorporated in Singapore with limited liability on 14 June 2018 and wholly owned by Ms. Karen Kwee

‘‘Absolute’’ Absolute S.p.A., a luxury motor yacht manufacturing group headquarteredinItalyandanIndependentThirdParty

‘‘Absolute Marine’’ Absolute Marine Limited, a company incorporated in Hong Kong with limited liability on 20 January 2014 and an indirect wholly-owned subsidiary of our Company

‘‘Accountant’s Report’’ the accountant’s report of our Group set out in Appendix I to this document

‘‘Articles’’ or ‘‘Articles the amended and restated articles of association of the Company of Association’’ conditionally adopted on [‧] and effective on the [REDACTED], as amended or supplemented from time to time

‘‘Azimut’’ Azimut-Benetti S.p.A, a luxury motor yacht manufacturing group headquartered in Italy and an Independent Third Party

‘‘Board’’ or ‘‘Board of the board of directors of the Company Directors’’

‘‘Bright Emerald’’ Bright Emerald Enterprises Limited (翠皓企業有限公司), a company incorporated in the BVI with limited liability on 2 August 2018 and is owned by Mr. Paul Grange and Mr. Thomas Woo in equal shares, and a Controlling Shareholder

‘‘business day’’ or any day (other than a Saturday, Sunday or public holiday) on ‘‘Business Day’’ which banks in Hong Kong are generally open for normal banking business

‘‘BVI’’ the British Virgin Islands

‘‘Capitalisation Issue’’ the issue of [REDACTED] new Shares to be made upon capitalisation of certain sums standing to the credit of the share premium account of our Company referred to in the section headed ‘‘A. Further information about our Group — 3. Written resolutions of the sole Shareholder passed on [‧]’’ in Appendix IV to this document

‘‘Cayman Islands the Companies Act, Cap. 22 (Act 3 of 1961, as revised and Companies Act’’ or consolidated) of the Cayman Islands ‘‘Companies Act’’

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DEFINITIONS

‘‘CCASS’’ the Central Clearing and Settlement System established and operated by HKSCC

‘‘CCASS Clearing a person admitted to participate in CCASS as a direct clearing Participant’’ participant or general clearing participant

‘‘CCASS Custodian apersonadmittedtoparticipateinCCASSasacustodian Participant’’ participant

[REDACTED] [REDACTED]

‘‘CCASS Investor a person admitted to participate in CCASS as an investor Participant’’ participant who may be an individual or joint individuals or a corporation

‘‘CCASS Participant’’ a CCASS Clearing Participant, a CCASS Custodian Participant or a CCASS Investor Participant

‘‘Companies the Companies Ordinance (Chapter 622 of the Laws of Hong Ordinance’’ Kong), as amended or supplemented from time to time

‘‘Companies (WUMP) the Companies (Winding Up and Miscellaneous Provisions) Ordinance’’ Ordinance (Chapter 32 of the Laws of Hong Kong), as amended or supplemented from time to time

‘‘Company’’ or ‘‘our Marine International Holdings Limited (遊艇國際控股有限公司), Company’’ a company incorporated in the Cayman Islands as an exempted company with limited liability on 16 October 2018 under the Cayman Islands Companies Act and registered as a non-Hong Kong company under Part 16 of the Companies Ordinance on 27 November 2018

‘‘Controlling has the meaning ascribed to it under the GEM Listing Rules and, Shareholder(s)’’ unless the context requires otherwise, refers to each of Bright Emerald, Mr. Thomas Woo and Mr. Paul Grange

‘‘Deed of Indemnity’’ the deed of indemnity dated [‧] entered into by our Controlling Shareholders in favour of our Company (for ourselves and as trustee for each of our subsidiaries from time to time), regarding certain indemnities as more particularly set out in the section headed ‘‘E. Other Information — 1. Tax and other indemnities’’ in Appendix IV to this document

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DEFINITIONS

‘‘Deed of Non- the deed of non-competition dated [‧] entered into by our competition’’ Controlling Shareholders in favour of our Company (for ourselves and as trustee for each of our subsidiaries from time to time), regarding the non-competition undertakings as more particularly set out in the section headed ‘‘Relationship with the Controlling Shareholders — Non-competition undertaking and corporate governance measures to manage conflicts of interests’’ in this document

‘‘Directors’’ or ‘‘our the directors of our Company directors’’

‘‘Dragon United’’ Dragon United Ventures Limited (協龍創投有限公司), a company incorporated in the BVI with limited liability on 5 June 2018, which is wholly owned by Mr. Leslie Kong, and a Significant Shareholder and a public Shareholder

‘‘EUR’’ or ‘‘Euros’’ Euro, the lawful currency of the European Union

‘‘Extreme Conditions’’ extreme conditions caused by a super typhoon as announced by the government of Hong Kong

‘‘Four Winns’’ Rec Boat Holdings, LLC dba Four Winns, a sports yacht manufacturing group headquartered in the United States and an Independent Third Party

‘‘Frost & Sullivan’’ Frost & Sullivan Limited, an industry consultant engaged by our Company to prepare the Frost & Sullivan Report and an Independent Third Party

‘‘Frost & Sullivan an independent research report commissioned by our Company Report’’ and prepared by our industry consultant, Frost & Sullivan

‘‘FY or ‘‘financial year’’ financial year of our Company ended or ending 30 April

‘‘GEM’’ GEM operated by the Stock Exchange

‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM, as amended or supplemented from time to time

‘‘Government’’ the government of Hong Kong

‘‘Great Bay Area’’ links the cities of Guangzhou, Shenzhen, Huizhou, Dongguan, Zhongshan, Jiangmen, Zhaoqing, Foshan, Zhuhai, Hong Kong and Macau into an integrated economic and business hub

[REDACTED] [REDACTED]

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DEFINITIONS

‘‘Group’’, ‘‘we’’, ‘‘our’’ our Company and its subsidiaries at the relevant time or, where or ‘‘us’’ the context otherwise requires, in respect of the period prior to our Company becoming the holding company of its present subsidiaries, such subsidiaries as if they were subsidiaries of our Company at the relevant time

‘‘Halcyon Moment’’ Halcyon Moment Limited, a company incorporated in the BVI with limited liability on 26 July 2018 and a direct wholly-owned subsidiary of our Company

‘‘HK$’’, ‘‘HKD’’ or Hong Kong dollars, the lawful currency of Hong Kong ‘‘Hong Kong dollars’’

[REDACTED] [REDACTED]

‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a wholly- owned subsidiary of Hong Kong Exchanges and Clearing Limited

‘‘HKSCC Nominees’’ HKSCC Nominees Limited, a wholly-owned subsidiary of HKSCC

‘‘Hong Kong’’, the Hong Kong Special Administrative Region of the PRC ‘‘HKSAR’’ or ‘‘HK’’

‘‘Hong Kong Branch [REDACTED] Share Registrar’’

‘‘Independent Third a person who, as far as our Directors are aware after having Party(ies)’’ made all reasonable enquiries, is not a connected person of our Company

[REDACTED] [REDACTED]

‘‘Issue Mandate’’ the general unconditional mandate to issue Shares given to our Directors by our Shareholders, further details of which are set out in the paragraph headed ‘‘A. Further information about our Group — 3. Written resolutions of the sole Shareholder passed on [‧]’’ in Appendix IV to this document

‘‘Kingsway Capital’’ or Kingsway Capital Limited, a corporation licensed to engage in ‘‘Sole Sponsor’’ type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO, the sole sponsor of the [REDACTED]

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DEFINITIONS

‘‘Latest Practicable 15 June 2021, being the latest practicable date for the purpose of Date’’ ascertaining certain information contained in this document prior to its publication

‘‘Legal Counsel’’ Mr. Poon Billy C.K., barrister-at-law of Hong Kong

[REDACTED] [REDACTED]

‘‘Marine Department’’ the marine department of the Government

‘‘Marine Italia’’ Marine Italia Limited, a company incorporated in Hong Kong with limited liability on 12 May 2015 and an indirect wholly- owned subsidiary of our Company

‘‘Marine Italia Marine Italia Singapore Pte. Ltd., a company incorporated in Singapore’’ Singapore with limited liability on 16 July 2018 and an indirect non wholly-owned subsidiary of our Company

‘‘Marinetec’’ Marinetec Limited, a company incorporated in Hong Kong with limited liability on 5 September 2016 and an indirect wholly- owned subsidiary of our Company

‘‘Memorandum’’ or the memorandum of association of our Company conditionally ‘‘Memorandum of adoptedon[‧] and effective on the [REDACTED],asamended Association’’ or supplemented from time to time

‘‘Mr. Joseph Tong’’ Mr. Tong Tang Joseph (唐登), a [REDACTED] Investor, a Significant Shareholder and a public Shareholder (through Precious Wave)

‘‘Mr. Leslie Kong’’ Mr. Kong Chun Lam Leslie (江晉林), a [REDACTED] Investor, a Significant Shareholder and a public Shareholder (through Dragon United)

‘‘Mr. Paul Grange’’ Mr. Grange Paul Jonathan, an executive Director and a Controlling Shareholder

‘‘Mr. Thomas Woo’’ Mr. Woo Thomas (胡禮賢), an executive Director and a Controlling Shareholder

‘‘Ms. Karen Kwee’’ Ms. Kwee Hui Ling Karen, the sole shareholder and sole director of 2BY2 Yachts Italia (which owns 35% shares of Marine Italia Singapore), a director of Marine Italia Singapore and the business partner of Mr. Thomas Woo and Mr. Paul Grange in Singapore

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DEFINITIONS

[REDACTED] [REDACTED]

‘‘Pearl River Delta’’ Guangdong Province in the PRC, Hong Kong and Macau

[REDACTED] [REDACTED]

‘‘PRC’’ or ‘‘China’’ the People’s Republic of China, excluding for the purposes of this document only, Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan

‘‘PRC Legal Advisers’’ Beijing Dentons Law Offices, LLP (Shenzhen), our Company’s legal advisers as to PRC laws

‘‘[REDACTED] has the meaning ascribed to it under the paragraph headed Convertible Bonds’’ ‘‘History, Reorganisation and Group Structure — [REDACTED] Investment’’ in this document

‘‘[REDACTED] has the meaning ascribed to it under the paragraph headed Convertible Bonds ‘‘History, Reorganisation and Group Structure — [REDACTED] Subscription Investment’’ in this document Agreement’’

‘‘[REDACTED] the [REDACTED] investment in our Group by the [REDACTED] Investment’’ Investors, details of which are set out in ‘‘History, Reorganisation and Group Structure — [REDACTED] Investment’’ in this document

‘‘[REDACTED] Mr. Joseph Tong and Mr. Leslie Kong, each a ‘‘[REDACTED] Investors’’ Investor’’

‘‘Precious Wave’’ Precious Wave Enterprises Limited (寶濤企業有限公司), a company incorporated in the BVI with limited liability on 5 June 2007, which is wholly owned by Mr. Joseph Tong, and a Significant Shareholder and a public Shareholder

[REDACTED] [REDACTED]

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DEFINITIONS

[REDACTED] [REDACTED]

‘‘Regulation S’’ Regulation S under the U.S. Securities Act

‘‘Reorganisation’’ the reorganisation of our Group in preparation for the [REDACTED], details of which are set out in ‘‘History, Reorganisation and Group Structure — Reorganisation’’ in this document

‘‘Repurchase Mandate’’ the general unconditional mandate to repurchase Shares given to our Directors by our Shareholders, further details of which are set out in the paragraph headed ‘‘A. Further information about our Group — 3. Written resolutions of the sole Shareholder passed on [‧]’’ in Appendix IV to this document

‘‘RMB’’ Renminbi, the lawful currency of the PRC

‘‘SFC’’ the Securities and Futures Commission of Hong Kong

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended or supplemented from time to time

‘‘Share(s)’’ ordinary share(s) with a nominal value of HK$0.01 each in the share capital of the Company

‘‘Shareholder(s)’’ holder(s) of Shares

‘‘Shareholders’ the shareholders’ agreement dated 16 July 2018 entered into Agreement’’ between Marine Italia, 2BY2 Yachts Italia and Marine Italia Singapore, details of which are set forth under the paragraph headed ‘‘History, Reorganisation and Group Structure — Corporate and Business Development History — Our operating subsidiaries — Marine Italia Singapore (Singapore)’’ in this document

[REDACTED] [REDACTED]

‘‘Share Option Scheme’’ the share option scheme conditionally adopted by our Company, further details of which are described in the section headed ‘‘D. Share Option Scheme’’ in Appendix IV to this document

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DEFINITIONS

‘‘Significant has the meaning ascribed to it under the GEM Listing Rules and, Shareholder(s)’’ unless the context requires otherwise, means Dragon United, Precious Wave, Mr. Leslie Kong and Mr. Joseph Tong

‘‘Singapore Legal Altum Law Corporation, our Company’s legal advisers as to Advisers’’ Singapore laws

[REDACTED] [REDACTED]

‘‘sq.ft.’’ square feet

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘Takeovers Code’’ Hong Kong Code on Takeovers and Mergers issued by the SFC, as amended or supplemented from time to time

‘‘Track Record Period’’ FY2019, FY2020 and FY2021

[REDACTED] [REDACTED]

‘‘U.S.’’ or ‘‘USA’’ or the United States of America, its territories and possessions, any ‘‘United States’’ state of the United States and the District of Columbia

‘‘U.S. Securities Act’’ the United States Securities Act 1933, as amended or supplemented from time to time

‘‘US dollar’’, ‘‘US$’’ or United States dollars, the lawful currency of the United States ‘‘USD’’

‘‘Zar Formenti’’ Zar Formenti S.R.L., an inflatable boat manufacturing group headquarteredinItalyandanIndependentThirdParty

‘‘%’’ per cent

In this document, unless the context otherwise requires, the terms ‘‘associate’’, ‘‘close associate’’, ‘‘connected person’’, ‘‘connected transaction’’, ‘‘controlling shareholder’’, ‘‘core connected person’’, ‘‘subsidiary’’, ‘‘30%-controlled company’’ and ‘‘substantial shareholder’’ shall have the meanings given to such terms in the GEM Listing Rules, unless the context otherwise requires.

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GLOSSARY OF TECHNICAL TERMS

This glossary of technical terms contains explanations of certain terms used in this document as they relate to us and are used in this document in connection with our business or us. These terms and their given meanings may not correspond to standard industry definitions.

‘‘length built’’ based on the orders confirmed via paying a deposit in the previous year

‘‘luxury motor yacht(s)’’ (i) small-sized yachts with length less than 36 feet;

(ii) middle-sized yachts with length from 36 feet to 60 feet; and

(iii) large-sized yachts with length from 60 feet to 79 feet; and super yachts with length over 79 feet.

‘‘motor yacht(s)’’ yacht which is usually equipped with sufficient amenities to allow for living aboard for extended periods

‘‘sport boat(s)’’ sport boat refers to the high performance trailer sailer with length typically ranging from 5.5 metres to 8 metres

‘‘super yacht(s)’’ a kind of luxury motor yachts with length over 79 feet and designed with luxurious decorations

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FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements. When used in this document, the words ‘‘aim’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘going forward’’, ‘‘intend’’, ‘‘may’’, ‘‘might’’, ‘‘plan’’, ‘‘project’’, ‘‘propose’’, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’, ‘‘would’’ and the negative of these words and other similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These forward- looking statements include, without limitation, statements relating to:

. our business strategies and our operating and expansion plans;

. our objectives and expectations regarding our future operations, profitability, liquidity and capital resources;

. future events and developments, trends and conditions in the industry and marketsinwhichweoperateorplantooperate;

. our ability to control costs;

. our ability to identify and successfully take advantage of new business development opportunities; and

. our dividend policy.

Such statements reflect the current views of our management with respect to future events, operations, profitability, liquidity and capital resources, some of which may not materialize or may change. Actual results may differ materially from information, implied or expressed, in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set out in ‘‘Risk Factors’’ in this document and the following:

. changes in the laws, rules and regulations applicable to us;

. general economic, market and business conditions in Hong Kong and Asia, including the sustainability of the economic growth in Hong Kong and Asia;

. changes or volatility in interest rates, foreign exchange rates, equity prices or other rates or prices;

. business opportunities and expansion that we may pursue;

. our ability to identify, measure, monitor and control risks in our business, including our ability to improve our overall risk profile and risk management practices; and

. other factors beyond our control.

–33– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

FORWARD-LOOKING STATEMENTS

Subject to the requirements of applicable laws, rules and regulations, we do not have any obligation to update or otherwise revise the forward-looking statements in this document, whether as a result of new information, future events or otherwise. As a result of these and other risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this document might not occur in the way we expect, or at all. Accordingly, you should not place undue reliance on any forward-looking information. All forward-looking statements contained in this document are qualified by reference to the cautionary statements set forth in this section as well as the risk factors set out in ‘‘Risk Factors’’.

In this document, statements of or references to our intentions or those of any of our Directors are made as at the date of this document. Any such intentions may change in light of future developments.

–34– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

An investment in our Shares involves various risks. You should carefully consider all the information in this document and, in particular, the risks and uncertainties described below before making an investment in our Shares.

The occurrence of any of the following events could materially and adversely affect our business, financial condition, results of operations or prospects. If any of these events occur, the trading price of our Shares could decline and you may lose all or part of your investment. You should seek professional advice from your relevant advisers regarding your prospective investment in the context of your particular circumstances.

RISKS RELATING TO OUR BUSINESS

The outbreak of any severe communicable disease, if uncontrolled, could adversely affect our results of operations

The outbreak of any severe communicable disease (or the escalation and/or intensification of any outbreak of any severe communicable disease), including but not limited to COVID-19, Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS), H5N1 avian flu, Ebola virus, as well as influenza caused by H7N9 and H3N2 or the human swine flu (H1N1), also known as influenza A virus, in the PRC or Hong Kong, if uncontrolled, could have an adverse effect on our operations and the overall business sentiments and environment in Hong Kong and the PRC, which in turn could have an adverse impact on the domestic consumption and, possibly, the overall GDP growth of Hong Kong or the PRC.

In particular, the COVID-19 has significantly affected the normal business operations and social life in Hong Kong and the PRC. Local governments in Hong Kong and the PRC have taken various drastic measures to curb the spread of COVID-19, as at Latest Practicable Date, individuals who were not Hong Kong residents who have stayed in specified extremely high-risk places were not allowed into Hong Kong and if they were allowed into Hong Kong, they were subject to a 14-day or 21-day compulsory quarantine in Hong Kong. If any of our employees is affected by any severe communicable diseases outbreak, such as COVID-19, this could adversely affect or disrupt the operation of our sales office and adversely affect our results of operations as we may be required to suspend or close our sales office to prevent the spread of the disease.

In addition, the Italian government has also locked down at least ten towns in the northern state of Italy to contain the spread of COVID-19 in March which were subsequently eased starting from 4 May 2020. If the Hong Kong government and/or Italian government implements any further measures such as any restrictions on logistics companies, then the delivery of our yachts from our suppliers, which are located in Italy, may be delayed which could adversely affect our business operations. Any such disruptions to our Group, our Group’s employees, our markets, our customers, our suppliers and/or the logistics arrangements for delivery of yachts to our Group, could materially impact our Group’s sales and overall results of operations and financial conditions.

–35– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

As a whole, any such events may cause our Group’s business to suffer in ways that our Group cannot anticipate. Any outbreak of epidemics or occurrence of similar events in the futuremayleadtoseriousdisruptiontothepublicintheaffectedareas,andmayhavea material and adverse effect on our Group’s business, results of operations and financial performance.

A significant portion of our turnover is derived from the sales of luxury motor yachts of our two major brands, Absolute and Azimut, and any weakening of such brands or our relationships with such brands could affect our operations and financial results

A significant portion of our turnover is derived from the sales of luxury motor yachts of Absolute and Azimut. For FY2019, FY2020 and FY2021, the sales of first-hand Absolute luxury motor yachts contributed towards approximately 19.2%, 12.9% and 13.0%, respectively, of our turnover, while the sales of first-hand Azimut luxury motor yachts contributed towards approximately 73.5%, 77.0% and 70.5% of our turnover, respectively. The loss of or diminishment of any such brand could have a material adverse effect on our business, financial condition, results of operation and growth prospects.

Our dealership agreements with Absolute and Azimut are exclusive and have a term of five years (two years in the case of Singapore under the Azimut dealership arrangement), and may be renewed subject to discussion. Absolute and Azimut have the right to terminate our exclusive dealership agreements for various reasons, including failure to comply with the terms set out in the exclusive dealership agreements such as minimum purchase commitments. We had in the past failed to meet the minimum purchase requirements under our exclusive dealership agreements. There is no assurance that we will be able to meet the minimum purchase requirements or to maintain relationships with Absolute or Azimut in the future. They may reduce or terminate their business dealings with us, or decide not to renew the exclusive dealership agreements on commercially reasonable terms, or at all. Absolute and Azimut may also not renew our exclusive dealership agreements or enter into new exclusive dealership agreements with us for reasons unrelated to us, such as a change to their business strategies. Our inability to continue selling luxury motor yachts of these brands due to any termination of our relationships with these luxury motor yacht manufacturers would materially and adversely affect our business, financial condition, results of operation and growth prospects. Furthermore, factors that are beyond our control, such as product recalls, adverse changes in financial position of luxury motor yacht manufacturers and their failure to design, manufacture and market new luxury motor yachts may impose negative publicity on these two brands and make these brands less attractive to consumers leading to decreased sales. In such event, our business, financial condition, results of operation and growth prospects would be materially and adversely affected.

We cannot assure you that we will be able to respond to such termination by finding alternative suppliers on comparable commercialtermswithinashortperiodoftime,andas such, our customers may choose to source luxury motor yacht products from other luxury yacht dealers, causing a shortfall in our sales that could materially and adversely affect our business and financial results.

–36– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

Our luxury motor yacht manufacturers impose restrictions on many different aspects of our business and operations and we rely on their support and cooperation for the successful operation of our business

Under our exclusive dealership agreements with our luxury motor yacht manufacturers, such luxury motor yacht manufacturers may impose restrictions on our business and operations, including but not limited to geographical limitations on the location of our dealerships and our target market, recommending price guidelines for the retail sale of new luxury motor yachts and prohibition of operating dealerships for competing brands. These restrictions imposed by, and significant influence from, luxury motor yacht manufacturers on our business could impair our ability to respond to changes in business environment, which could in turn materially and adversely affect our financial condition, results of operations and growth prospects. Furthermore, we rely on support and cooperation from our luxury motor yacht manufacturers for the successful operation of our business. If our relationship with any of our luxury motor yacht manufacturers were to deteriorate, our business, financial condition, results of operations and growth prospects could be materially and adversely affected.

Product pricing. Our agreements contain recommended retail pricing guidelines set by our luxury motor yacht manufacturers. Successful pricing policies suggested by our luxury motor yacht manufacturers allow us to compete effectively for customers while maintaining profitability. If our luxury motor yacht manufacturers raise the recommended retail price, customers’ demand for their luxury motor yachts may be negatively affected, thus affecting our sales. In addition, any decrease in the recommended retail price may impair our profitability. Failure to comply with the pricing guidelines may negatively affect our relationship with such luxury motor yacht manufacturers.

Supply of luxury motor yachts and spare parts. We rely on our luxury motor yacht manufacturers to supply us with the luxury motor yachts and spare parts that we sell. In the event of any developments that may adversely affect their ability to manufacture and deliver their products to us, such as component shortages, labour unrests or natural disasters, we may be materially and adversely affected. Our luxury motor yacht manufacturers are also responsible for anticipating changes in market trends and consumer preference and demand to develop attractive luxury motor yacht models. If any luxury motor yacht model launched by any of our luxury motor yacht manufacturers is not well received by the market, or if the popularity of any of their existing luxury motor yacht models declines, our business, financial condition, results of operations and growth prospects may be materially and adversely affected.

Sales and marketing. Under our exclusive dealership agreements, we are required to obtain written approval from luxury motor yacht manufacturers before we launch any promotional activities for their luxury motor yacht products. If any luxury motor yacht manufacturer were to reduce the scale of its marketing efforts, or adopt an unsuccessful marketing strategy or campaign, our business, financial condition, results of operations and growth prospects may be materially and adversely affected.

–37– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

Our business model is dependent to a large extent on our ability to sell luxury motor yachts

Our business model depends to a large extent on our ability to sell luxury motor yachts. The proceeds of luxury motor yacht sales represent a significant part of our cash flow from operations, which we use to invest in new luxury motor yachts and other financial obligations.

Our ability to sell luxury motor yachts depends on the overall market condition, the level of demand for additional luxury motor yachts from our customers and the supply of luxury motor yachts available in the market for sale. In particular, the ability of potential buyers of our luxury motor yachts to access financing has a material impact on our ability to sell luxury motor yachts. If the conditions in the luxury motor yachts industry, general market or competitive conditions deteriorate, our ability to sell luxury motor yachts at all and/or at acceptable prices may be adversely affected.

There is no assurance that we will be able to continue to sell our luxury motor yachts at all times during the business cycle or that we will be able to continue to sell luxury motor yachts at prices that generate revenue or that do not result in a loss in sale. For further details, please see ‘‘Business — Our business’’ in this document.

Any adverse impact on our ability to sell luxury motor yachts at all and/or at acceptable prices could materially and adversely affect our business, financial condition and results of operations.

Our continuing success depends on our ability to retain our senior management and key personnel

Our success depends on the experience and skills of our current officers, management and key sales employees. In particular, our senior management has significant experience in the sale and dealership of luxury motor yachts. Our executive Directors, Mr. Thomas Woo and Mr. Paul Grange, are responsible for all key managerial functions and strategy of our Group and they have been fundamental to our achievements to date. The loss of any of these key personnel could adversely affect our ability to sustain and grow our business.

We cannot assure you that we will be able to hire additional qualified employees to strengthen our management team or integrate new management into our existing operations in order to keep pace with the proposed growth of our business. Furthermore, competitors may also seek to hire away our personnel, and we may not be able to attract or retain suitably qualified personnel. Our failure to attract and retain additional qualified personnel may hinder our ability to grow our business, which could materially and adversely affect our business, financial condition and results of operations.

–38– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

We face uncertainties as a result of our recent expansion and may not be able to successfully enhance and expand our dealership network in Hong Kong, Singapore, Guangdong Province and Hainan Province in the PRC

Our expansion brings uncertainties to our operation, including:

Intensive competition in other Asian cities. In order to increase our market recognition and complete our network deployment in Asia, and also as part of our plan to further develop our luxury motor yacht market and after-sales services, we recently expanded into Singapore where we consider there is a strong growth potential in the yacht distribution market. For more details, please see ‘‘Our Business — Our Strategies — Leverage on our strong dealership brands and expand our market share in Hong Kong and extend our footprint into Singapore, and Guangdong Province and Hainan Province in the PRC’’. We plan to solidify our competitiveness in these regional markets by leveraging our strong dealership brands and comprehensive experience and knowledge in the yacht distribution market in Hong Kong. However, competition in these markets are beyond our control. Competition with established players that have local relationships and changes to local laws and regulations in specific geographical areas where we seek to expand in, may significantly influence the results of our strategy to enhance and expand our dealership network in Hong Kong, Singapore, and Guangdong Province and Hainan Province in the PRC. We cannot assure you that we would be successful in implementing such strategy, or such strategy will generate desired results.

Sales offices without prior operating history. We intend to establish three new sales offices in Singapore, Shenzhen and Hainan Province in the PRC, which are expected to commence operation in May 2020, November 2020 and November 2020, respectively. There are significant risks involved in our expansion plan, including whether we will be able to: (a) access adequate financial resources; (b) negotiate the terms of new leases or land use rights successfully for sales offices in desired locations; (c) obtain appropriate licences, permits and approvals from relevant government authorities on a timely basis; (d) commence and ramp up the operations of new exclusive authorised dealerships with Absolute and Azimut and improve the performance to achieve our target profitability within expected timeframes; (e) hire, train and retain sufficient qualified staff; (f) efficiently operate and control our network; and (g) re-evaluate and revise our expansion plans as needed.

Any or all of these uncertainties could have material adverse impacts on our results of operations, financial conditions and prospect.

We may not be able to obtain necessary financing on commercially reasonable terms, or at all

–39– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS yacht purchases are generally financed internally from operating funds. During the Track Record Period, we had experienced cashflow mismatch in purchasing demonstration yachts from time to time where our operating funds were insufficient to complete the purchase of demonstration yachts and therefore our Directors had to source other financing methods. For details, please see ‘‘Financial Information — Key Factors Affecting Our Operating Results and Financial Condition — We may not be able to obtain necessary financing on commercially reasonable terms or at all’’ in this document. Our finance costs were HK$0.6 million, HK$0.8 million and HK$1.6 million for FY2019, FY2020 and FY2021, respectively. Our ability to obtain financing from commercial banks and other financiers on commercially reasonable terms depends on our historical performance and financial condition, as well as a number of factors that are beyond our control, such as macro- economic conditions, availability of capital liquidity, the interest rate environment and relevant government rules and regulations. If we are unable to obtain necessary financing at commercially reasonable terms or at all, our expansion and/or operations may be disrupted which will in turn adversely affect our results of operations and financial condition.

If we are unable to obtain financing from commercial banks and other financiers, we may need to issue additional equity or debt securities or obtain credit facilities through [REDACTED] or private placements in the future to meet our requirements for capital. The sale of additional equity securities or securities convertible to our equity securities would dilute our Shareholders’ interests. The additional debt would result in increased debt servicing obligations and may also result in covenants restricting our shareholding structure, business and/or operations.

We may not be able to obtain adequate financing for our business in the future

Our business requires significant working capital for our purchase of yachts and daily operations. In addition, we require capital investment to devote significant financial resources to purchase two demonstration yachts to support our business growth. On 14 June 2018, Absolute Marine, Marine Italia, Marinetec, Mr. Leslie Kong, Mr. Joseph Tong, Mr. Thomas Woo and Mr. Paul Grange entered into the [REDACTED] Convertible Bonds Subscription Agreement in relation to the subscription of three (3) per cent. Coupon convertible bonds in the aggregate principal amount of HK$8,000,000 to be issued by our Company. Please refer to the sub-section headed ‘‘[REDACTED] investments’’ in ‘‘History, Reorganisation and Group Structure’’ to this document for details. The subscription of the [REDACTED] Convertible Bonds was completed on 1 November 2018. During the Track Record Period, we utilised cash generated from our operations and facilities to maintain our cash flow and finance our capital expenditure. As at 30 April 2019, 2020 and 2021, our Group had bank borrowings of nil, HK$6.6 million and HK$2.3 million, respectively. Besides, we have also borrowed from two independent third parties of HK$10.3 million and HK$8.6 million with effective interest rates from 5.5% to 18.0% per annum for the purchase of demonstration yachts in FY2019 and obtained funds through Sales and Buyback Transactions/Sales Leaseback Transaction with a supplier/an Independent Third Party for the purchase of new yachts and for its general working capital needs in FY2020. See ‘‘Financial Information — Key factors affecting our operation results and financial conditions — We may not be able to obtain necessary financing on commercially reasonable terms, or at all’’ in this document for details. Our ability to raise additional capital will

–40– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS depend on our business performance, market conditions and overall economic environment. We are unable to assure you that we will be able to obtain bank borrowings and other external financing or resources on commercially acceptable terms or in a timely manner or at all in the future. If we are unable to obtain necessary financing or if we fail to obtain such financing on favourable terms due to factors beyond our control, we may be forced to curtail our expansion plans and our results of operations and financial condition may be materially and adversely affected.

We had high gearing ratio and net debt to equity as at 30 April 2021

Our gearing ratio increased from 34.7% as at 30 April 2019 to 300.9% as at 30 April 2020 and decreased to 27.9% as at 30 April 2021 while our net debt to equity was not applicable as at 30 April 2019 and 30 April 2021 and amounted to 154.2% as at 30 April 2020. Such increase for the year ended 30 April 2020 was primarily due to Sales and Buyback Transactions/Sales Leaseback Transaction with a supplier/an Independent Third Party for the purchase of new yachts and for its general working capital needs in FY2020. In addition, our Directors have advanced fund to our Group for the prepayments, deposits and expenses of our Group in FY2020. Please see the risk in related to adequate financing as disclosed in ‘‘We may not be able to obtain adequate financing for our business in the future’’ in this section and analysis of gearing ratio as disclosed in ‘‘Financial information — Summary of Key financial ratios’’. Despite we were in net current asset position as at 30 April 2019 and 2020, generated net cash from operating activities for FY2019 and FY2020 and our gearing ratio decreased to lower levels as at 30 April 2021 and net debt to equity ratio was not applicable to us as at 30 April 2021, we cannot assure you that we will not face working capital insufficiency in the future. Furthermore, if we fail to manage the liquidity risk arising from the high gearing ratio, or if our liquidity level deteriorates, we may curtail or defer our business expansion plans based on the availability of sufficient funds and our ability to make necessary capital expenditure or our development of business opportunities in the future may be limited. As a result, our business, financial condition and results of operations will be materially and adversely affected.

We are exposed to credit risks of our customers

As at 30 April 2019, 2020 and 2021, our Group’s trade receivables, net of loss allowance were approximately HK$23.8 million, HK$3.0 million and HK$3.6 million, respectively, representing approximately 17.4%, 2.9% and 1.5% of our Group’s total current assets as at the respective dates. There is no assurance that we will be able to collect all or any of our receivables in a timely manner, or at all. If any of our customers face unexpected adverse situations, including, but not limited to, financial difficulties, significant decrease in demand for their products and disruption in the business operation, we may not be able to receive full or any payment of uncollected sums or enforce any judgment debts against such customers. If our customers delay in or default on their payments, we may have to make additional provision for impairment, write off the relevant receivables and/or incur substantial legal costs to recover the outstanding balance, which may in turn have an adverse effect on our financial condition, results of operations

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RISK FACTORS and business prospects. We are therefore subject to credit risk of our customers and our profitability and cash flow are dependent on our receipt of timely payments from our customers.

If we fail to manage our inventories effectively, we may experience a higher risk of inventory obsolescence, a decline in inventory value and significant inventory write-downs or write-offs

During the Track Record Period, we recorded allowance for inventories of HK$0.1 million, HK$1.4 million and nil, respectively. The inventory turnover days of first-hand yachts decreased from approximately 52.6 days for FY2019 to approximately 47.8 days for FY2020 and 9.9 days for FY2021 while that for second-hand yachts was approximately 940.0 days, 979.0 days and 185.2 days for FY2019, FY2020 and FY2021, respectively. Please refer to the section headed ‘‘Financial Information — Description of selected components of consolidated statements of financial position — Inventories’’ in this document for further details. As at the Latest Practicable Date, none of our inventory balance as at 30 April 2021 were sold. If we fail to effectively manage the level of our inventories, we may experience a higher risk of inventory obsolescence, a decline in inventory value and significant inventory write-downs or write-offs. Any of the above circumstances may materially and adversely affect our financial condition and results of operations.

We are subject to risks associated with long inventory turnover days of second-hand yachts

Our inventories include first-hand yachts and second-hand yachts. For FY2019, FY2020 and FY2021, our Group recorded inventory turnover days for second-hand yachts of approximately 940.0 days, 979.0 days and 185.2 days, respectively. Our long inventory turnover days was mainly due to the relatively high inventory balances mainly driven by the trade-in of second-hand yachts during the respective year. For details, please refer to the section headed ‘‘Financial information — Description of Selected Components of Consolidated Statements of Financial Position — Inventories’’ in this document. We cannot assure you that our inventory control policy and measures will be implemented effectively. In addition, we cannot assure you that we will not experience any slow movement of inventory which may lead to increase in our costs in holding the inventory and the risk that we may have to write off our inventory. This can result in pressure on our operating cash flow and liquidity which may materially and adversely affect our business, results of operations and financial conditions.

Our business depends on the market recognition of our dealership brands our own brand, and we may fail to protect our dealership brands, our own brand, trademarks or other related intellectual property rights

We believe that our success depends on strong brand awareness. If we fail to maintain brand awareness and recognition among our target customers due to deterioration in service quality, dealership management or otherwise, or if any premium in value attributable to our dealership brands compared to that of our competitors declines, market perception and customer acceptance of our dealership brand may diminish. If that were to occur, we may not be able to effectively compete for customers or authorizations from our yacht manufacturers to expand our territories, and our business, financial

–42– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS condition, results of operations and growth prospects may be materially and adversely affected. In addition, any unauthorized use of our trademarks and trademarks of our dealership brands and other related intellectual property rights by others in their corporate names or product brands could harm our brand image, our competitive advantages and our business. As of the Latest Practicable Date, we had registered two trademarks in Hong Kong and one trademark in Singapore. We were also the registered owner of three domain names. If we fail to adequately protect our trademarks or other related intellectual property rights, our own brand and reputation may be negatively affected and as a result, our business and growth prospects may be materially and adversely affected.

Failure to manage our sub-dealer in Taiwan and Shenzhen may adversely affect our business and future growth in Taiwan and Shenzhen

We expanded into the yacht distribution market in Taiwan and Shenzhen by appointment of a local sub-dealer in March 2018 and October 2019, respectively. Due to the preferences of Taiwanese customers to deal with local dealers and for operational and strategic reasons, we expect to continue to rely on our Taiwan sub-dealer for the sales in the Taiwan market. As such, the performance of the sub-dealer, the maintenance of our relationship with the sub-dealer and the ability of the sub-dealer to distribute our products, uphold the brand and expand the sales network is crucial to the future growth of our business in Taiwan and Shenzhen. If the sub-dealer in Taiwan and Shenzhen is unable to secure orders from the customers or fail to meet their minimum purchase commitment under our sub-dealership contract, we may terminate the business relationship with them. Finding a replacement sub-dealer could be time-consuming and any delay may be disruptive to our business.

Our insurance coverage may be inadequate to protect us from certain types of losses

We carry insurance covering risks including losses to our fixed assets and inventories, and losses due to fire, flood and a broad range of other natural disasters excluding earthquakes and tsunami. However, we do not carry liability insurance that extends coverage to all potential liabilities that may arise in the ordinary course of our business, neither do we maintain any insurance coverage for business interruption due to the limited availability of business interruption insurance in Hong Kong. Significant uninsured damage to any of our properties, inventories or other assets, whether as a result of earthquakes, tsunami or other causes, and liabilities claims against us could have a material and adverse effect on our business, financial condition, results of operations and growth prospects.

We may not be able to implement our future plans successfully

Our future business plans are based on our Directors’ existing intentions. These business plans and intentions are based on assumptions as to the occurrence of certain future events, which may or may not materialise, and the real situation might differ materially. Furthermore, our future business plans may be hindered by other factors beyond our control, such as competition within the yacht distribution market and from other yacht dealerships. Therefore, there is no assurance that any of our future business

–43– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS plans will materialise, or result in the conclusion or execution of any agreement within the planned timeframe, or that our objectives will be fully or partially accomplished. For details of our future plans, see ‘‘Business — Our strategies’’ in this document.

Our Group’s revenue during the Track Record Period was derived from the operations in Hong Kong and any downturn in the Hong Kong market may adversely affect our results of operations, financial performance and future prospects

During the Track Record Period, the revenue of our Group was derived solely from our operations in Hong Kong and hence will be dependent on the economic condition of HongKong,inparticular,thegrowthintheyachtdistributionmarket.Anydownturnin the economy of Hong Kong, in particular the yacht distribution market, may have an adverse impact on our Group’s business and financial performance due to potential cancellation of yacht sales.

We are exposed to foreign currency exchange fluctuations

We incur our costs of purchases in Euro while we receive our revenue in Euro and Hong Kong dollars. As we occasionally purchase demonstration yachts from our yacht manufacturers before securing orders from our customers, there is a time difference between our purchase costs incurred and our revenue recognised. For FY2019, FY2020 and FY2021, we recorded net foreign exchange loss of HK$1.1 million, a loss of HK$3,000 and HK$2.3 million, respectively. Accordingly, fluctuations in foreign currency exchange rates can increase or decrease our profit margin and affects the results of our operations.

RISKS RELATING TO OUR INDUSTRY

Our performance and growth prospects may be adversely affected by the increasingly competitive nature of the Hong Kong yacht distribution market

The Hong Kong yacht distribution market is competitive. We compete with dealerships that offer competing brands of luxury motor yacht. We also compete with independent repair shops and yacht parts retail centres in after-sales services and spare part sales. We believe that the yacht dealerships in Hong Kong compete for customers on the level of customer services, inventory of luxury motor yachts, capabilities of sales personnel, management personnel, yacht engineers and technicians and on the prices of their yachts and services. Increased competition among yacht dealerships in Hong Kong could impact our market share and result in a decrease in our revenues and profits and adversely affect our growth prospects. Any changes in the regulation of the yacht distribution market could allow new market participants to enter the dealership business, which may intensify competition and adversely affect our business and results of operations.

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RISK FACTORS

Changes in restriction of import trade or export trade, availability of berths, berthing fee and fuel costs may materially affect our business and results of operations

Our suppliers are overseas and any changes in restriction of import trade and export trade of the country or region which we purchase our products from, such as regulatory restrictions, tariffs and taxes, could adversely affect our business, financial conditions and results of operations.

Yacht sales may also be affected by the availability of berths or berthing fee in the regions where we operate. The lack of sufficient berths or a high berthing fee may hinder potential customers from purchasing yachts and reduce their demand for yachts and our sales may be adversely affected.

Furthermore, our sales may be subject to the fuel costs, which will increase the costs of yacht ownership and reduce the demand for our products. In this event, our financial condition and results of operation could be materially and adversely affected.

Worldwide economic conditions may affect the yacht distribution market and materially impact our financial results

The demand for our products may be dependent on the global economic and market conditions. In times of economic uncertainty and contractions, our potential customers may have less discretionary income and to defer expenditures for luxury items, which may in turn decrease our sales. As most of our yachts are used for recreation, our customers’ limited discretionary income in terms of economic hardship may be diverted to other activities, which in turn result in the decline of our business and other financial performance, and our expansion strategy may also be adversely affected. We cannot assure you that there would be improvement in economic conditions in the global economy, and even if there is improvement, there is no assurance that the improvement would have a positive impact on our business, financial condition or results of operation.

Negative publicity may adversely impact us

Rumours, media coverage and public statements that suggest improper actions by us or relate to accidents or other issues involving the quality of our services, products and operations, whether or not accurate and whether or not applicable to us, may result in negative publicity, litigation or governmental investigations by regulators. Addressing negative publicity and any resulting litigation or investigations may distract management, increase costs and divert resources. Negative publicity may have an adverse impact on our reputation, our customer relationships and the morale of our employees, which could adversely affect our business, cash flows from operations, financial condition and results of operations.

–45– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

RISKS RELATING TO THE [REDACTED]

There is no existing public market for our Shares and their liquidity and market price may fluctuate

Prior to the [REDACTED], there has not been a public market for our Shares. We have applied for the [REDACTED] of and [REDACTED] in our Shares on the Stock Exchange. However, even if approved, we cannot assure youthatanactiveandliquid public trading market for our Shares will develop following the [REDACTED], or, if it does develop, it will be sustained. The financial market in Hong Kong and other countries have in the past experienced significant price and volume fluctuations. Volatility in the price of our Shares may be caused by factors outside our control and may be unrelated or disproportionate to our operating results. Accordingly, we cannot assure you that the liquidity and market price of our Shares will not fluctuate.

The [REDACTED] Range for our Shares was the result of, and the [REDACTED] will be the result of, negotiations among us and the [REDACTED] on behalf of the [REDACTED] and may not be indicative of prices that will prevail in the trading market after the [REDACTED]. Therefore, our Shareholders may not be able to sell their Shares at prices equal to or greater than the price paid for their Shares purchased in the [REDACTED].

Investors of our [REDACTED] will experience immediate dilution and may experience further dilution if we issue additional Shares in the future

One of the benefits to our Company upon [REDACTED] is the access to the capital market and our Group may raise additional funds to finance future expansion of our business, operations or acquisitions. Our Company will comply with Rule 17.29 of the GEM Listing Rules, which specifies that no further Shares or securities convertible into equity securities of our Company (subject to certain exceptions) may be issued or form the subject of any agreement to be issued within six months from the [REDACTED]. Upon expiry of such six-month period, our Group may raise additional funds by issuing new equity or equity-linked securities of our Company and such fund-raising exercises may not be conducted on a pro rata basis to our then existing Shareholders. As such, the shareholding of our then Shareholders may be reduced or diluted and subject to the terms of the issue of the new securities, the new securities may confer rights and privileges that have priority over those conferred by the issued Shares.

In addition, we may consider offering and issuing additional Shares in the future for expansion of our business or to the extent that our ordinary shares are issued upon the exercise of share options under the Share Option Scheme. In this regard, you may experience further dilution in the net tangible asset book value per Share if we issue additional Shares in the future at a price which is lower than the net tangible book value per Share.

–46– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

Possible setting of the [REDACTED] after making a Downward [REDACTED] Adjustment.

We have the flexibility to make a Downward [REDACTED] Adjustment to set the final [REDACTED] at up to 10% below the bottom end of the indicative [REDACTED] Range per [REDACTED]. It is therefore possible that the final [REDACTED] will be set at HK$[REDACTED] per [REDACTED] upon the making of a full Downward [REDACTED] Adjustment. In such a situation, the [REDACTED] will proceed and the Withdrawal Mechanism will not apply. If the final [REDACTED] issetatHK$[REDACTED] per [REDACTED], the net [REDACTED] we will receive from the [REDACTED] will be reduced to HK$[REDACTED] and such reduced [REDACTED] will be used as described in ‘‘Future Plans and [REDACTED] — [REDACTED]’’.

Since there will be a gap of several days between pricing and trading of the [REDACTED], holders of the [REDACTED] are subject to the risk that the price of the [REDACTED] could fall during the period before trading of the [REDACTED] begins

The [REDACTED] of our Shares is expected to be determined on the [REDACTED]. However, our Shares will not [REDACTED] trading on the Stock Exchange until they are delivered, which is expected to be about eight business days after the [REDACTED].Asa result, investors may not be able to sell or otherwise deal in Shares during that period. Accordingly, holders of Shares are subject to the risk that the price of their Shares could fall before trading begins as a result of adverse market conditions or other adverse developments that could occur between the time of sale and the time trading begins.

The interests of our Controlling Shareholders may not always coincide with the interests of our Group and those of our other Shareholders

Upon completion of the [REDACTED] (but not taking into account the allotment and issue of Shares upon exercise of the [REDACTED] and any Shares which may be issued pursuant to the exercise of options which may be granted under the Share Option Scheme), our Controlling Shareholders will own, in aggregate, approximately [REDACTED]%ofour Shares. Our Controlling Shareholders will therefore have significant influence over the operations and business strategies of our Group, and may have the ability to require our Group to effect corporate actions according to their own desires. The interests of our Controlling Shareholders may not always coincide with the best interests of other Shareholders. If the interests of any of our Controlling Shareholders conflict with the interests of other Shareholders, or if any of our Controlling Shareholders chooses to cause our Group’s business to pursue strategic objectives that conflict with the interests of other Shareholders, the interests of our Group or of those other Shareholders may be adversely affected as a result.

–47– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

There can be no assurance if and when we will pay dividends in the future

Distribution of dividends shall be formulated by our Board and will be subject to shareholders’ approval. A decision to declare or to pay any dividends and the amount of any dividends will depend on various factors, including but not limited to our results of operations, cash flows and financial condition, operating and capital expenditure requirements, distributable profits, our constitutional documents, market conditions, our strategic plans and prospects for business development, contractual limits and obligations, payment of dividends to us by our operating subsidiaries, taxation, relevant laws and regulations and any other factors determined by our Board from time to time to be relevant to the declaration or suspension of dividend payments. As a result, there can be no assurance whether, when and in what form we will pay dividends in the future or that we will pay dividends in accordance with our dividend policy. Please see ‘‘Financial Information — Dividends’’ for further details.

You may face difficulties in protecting your interests under Cayman Islands law

Our corporate affairs are governed by our Memorandum of Association and Articles of Association and by the Cayman Islands Companies Act and common law of the Cayman Islands. The laws of the Cayman Islands relating to protection of interests of minority shareholders, in some respects, may differ from those established under statutes or judicial precedent in existence in Hong Kong. Such differences may mean that the protection of the interests of our minority shareholders may be different from those they would have under the laws of Hong Kong. The rights of shareholders to take action against our Directors, the rights of minority shareholders to institute actions and the fiduciary responsibilities of our Directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.

A summary of the Cayman Islands company law is set out in Appendix III to this document.

Termination of the [REDACTED]

Prospective investors should note that the [REDACTED] are entitled to terminate their obligations under the [REDACTED] by the [REDACTED] (for itself and on behalf of the [REDACTED]) by giving written notice to our Company upon the occurrence of any of the events stated in the section headed ‘‘[REDACTED] — [REDACTED] and expenses — [REDACTED] — Grounds for termination’’ of this document at any time prior to 8: 00 a.m. (Hong Kong time) on the [REDACTED]. Such events include, without limitation, any act of God, acts of terrorism, declaration of a local, regional, national or international emergency, riot, public disorder, economic sanctions, outbreaks of diseases, pandemics or epidemics (including, without limitation, COVID-19, Severe Acute Respiratory Syndrome, avian influenza A (H5N1), Swine Flu (H1N1), Middle East Respiratory Syndrome or such related or mutated forms) or interruption or delay in transportation). Should the [REDACTED] (for itself and on behalf of the [REDACTED]) exercise their rights and terminate the [REDACTED],the[REDACTED] will not proceed and will lapse.

–48– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

RISKS RELATING TO STATEMENTS MADE IN THIS DOCUMENT

Prospective investors should not place undue reliance on industry and market overview and statistics derived from official government publications, third party market research reports or news sources contained in the document

Statistics, projected industry data and information relating to the economy and the industry contained in this document are derived from various publications and information provided by Frost & Sullivan. We cannot assure, or make any representation, as to the accuracy, completeness, quality or reliability of such information. Neither our Group nor any of our respective affiliates or advisers, nor the Sole Sponsor, the [REDACTED] and [REDACTED] or any of their respective directors, officers, employees, advisers or agents, has prepared or independently verified the accuracy or completeness of such information directly or indirectly derived from the third party market research reports. Due to possible flawed collection methods, discrepancies on published information, different market practices or other problems, the statistics, projected industry data and other information relating to the economy and the industry derived from the third party market research reports may be inaccurate or may not be comparable to or consistent with information available from other sources and should not be unduly relied upon. In all cases, prospective investors should give careful consideration as to how much weight or importance they should attach or place on such statistics, projected industry data and other information relating to the economy and the industry.

Forward-looking statements contained in this document are subject to risks and uncertainties

This document contains certain statements that are ‘‘forward-looking’’ and uses forward looking terminology such as ‘‘anticipate’’, ‘‘estimate’’, ‘‘believe’’, ‘‘expect’’, ‘‘may’’, ‘‘plan’’, ‘‘consider’’, ‘‘ought to’’, ‘‘should’’, ‘‘would’’ and ‘‘will’’. Those statements include, among others, the discussion of our growth strategy and the expectations of our future operation, liquidity and capital resources.

Prospective investors should be cautioned that reliance on any forward-looking statement involves risks and uncertainties and that, any or all of those assumptions could prove to be inaccurate and as a result, the forward-looking statements based on those assumptions could be incorrect. The uncertainties in this regard include those identified in the risk factors discussed above. In light of these and other uncertainties, the inclusion of forward-looking statements in this document should not be regarded as representations or warranties by us that our plans and objectives will be achieved and these forward-looking statements should be considered in light of various important factors, including those set forth in this section. We do not intend to update these forward-looking statements in addition to our on-going disclosure obligations pursuant to the GEM Listing Rules or other requirements of the Stock Exchange. Prospective investors should not place undue reliance on such forward-looking information. For more details, please see ‘‘Forward-Looking Statements’’ in this document.

–49– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RISK FACTORS

Our Group’s future results could differ materially from those expressed in or implied by the forward-looking statements

This document includes various forward-looking statements that are based on various assumptions. Our Group’s future results could differ materially from those expressed in or implied by such forward-looking statements. For details of these statements and the associated risks, please see ‘‘Forward-Looking Statements’’ in this document.

Prospective investors should read this document in detail

There may have been coverage in the media regarding the [REDACTED] and our operations. We do not accept any responsibility for the accuracy or completeness of the information and make no representation as to the appropriateness, accuracy, completeness or reliability of any information disseminated in the media. To the extent that any of the information in the media is inconsistent or conflicts with the information contained in this document, we disclaim it. Accordingly, prospective investors should not rely on any of the information in press articles or other media coverage.

–50– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

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INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

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INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

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INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED]

[REDACTED]

–54– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

DIRECTORS

Name Residential address Nationality

Executive Directors

Mr. Woo Thomas (胡禮賢) House 9 Chinese The Giverny Hebe Haven Sai Kung New Territories Hong Kong

Mr. Grange Paul Jonathan Flat A, 27/F British Tower 7 28 Bel-Air Avenue Residence Bel-Air Island South (Phase I) PokFuLam Hong Kong

Ms. Wu Siu Ling (胡小玲) Flat B, 17/F Chinese Tower 3, The Beaumount II 6ShekKokRoad Tseung Kwan O New Territories Hong Kong

Independent Non-executive Directors

Mr.YeungChiWai(楊志偉) Flat B, 7/F, Block 2 Chinese Elegant Terrace 36 Conduit Road Mid-levels Hong Kong

Mr.YipKiChiLuke(葉祺智) Flat A, 10th Floor Chinese No. 10 Broadway Mei Foo Sun Chuen Lai Chi Kok Hong Kong

Ms.YuShunYanVerda Room 9, 19/F Chinese (余舜茵) Lok Chung House Mei Chung Court Shatin New Territories Hong Kong

For further information regarding our Directors, please refer to the section headed ‘‘Directors and Senior Management’’ in this document.

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DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

PARTIES INVOLVED IN THE [REDACTED]

Party Name and address

Sole Sponsor Kingsway Capital Limited A corporation licensed under the SFO to carry on type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities 7/F, Tower One Lippo Centre 89 Queensway Hong Kong

[REDACTED] [REDACTED]

Legal advisors to the Company As to Hong Kong laws: DavidFong&Co. Solicitors, Hong Kong Unit A, 12/F China Overseas Building 139 Hennessy Road Wanchai Hong Kong

As to Italian laws: Avv. Ivan Mazzoleni Viale Vittorio Emanuele II, 41 I-24121 Bergamo Italy

As to Cayman Islands laws: Conyers Dill & Pearman Cayman Islands attorneys-at-law 29/F One Exchange Square 8 Connaught Place Central Hong Kong

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DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

Party Name and address

As to Singapore laws: Altum Law Corporation 160 Robinson Road #26-06 SFB Center Singapore 068914

As to PRC laws: Beijing Dentons Law Offices, LLP (Shenzhen) PRC attorneys-at-law 3F & 4F, Block A Shenzhen International Innovation Center No. 1006, Shennan Boulevard Futian District Shenzhen China

Legal advisors to the Sole Sponsor and [REDACTED] the [REDACTED]

Auditor and reporting accountant Grant Thornton Hong Kong Limited Certified Public Accountants Level 12 28 Hennessy Road Wanchai Hong Kong

Internal control consultant RSM Consulting (Hong Kong) Limited 29/F, Lee Garden Two 28 Yun Ping Road Causeway Bay Hong Kong

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DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED]

Party Name and address

Industry Consultant Frost & Sullivan Limited 1706, One Exchange Square 8 Connaught Place Central, Hong Kong

Compliance adviser Kingsway Capital Limited A corporation licensed under the SFO to carry on type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities 7/F, Tower One Lippo Centre 89 Queensway Hong Kong

[REDACTED] [REDACTED]

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CORPORATE INFORMATION

Registered office in the Cayman Islands Cricket Square, Hutchins Drive PO Box 2681, Grand Cayman KY1-1111, Cayman Islands

Head office and principal place of Portion B of Shop No. 6 on Ground Floor business in Hong Kong (registered South Wave Court under Part 16 of the Companies No. 3 Shum Wan Road Ordinance) Hong Kong

Company secretary Mr.YipHoiTo(葉海濤) Certified Public Accountant Flat ND, 28/F, Tower 3 North Court Festival City Phase 2, Sha Tin New Territories Hong Kong

Compliance officer Mr. Grange Paul Jonathan Flat A, 27/F, Tower 7 28 Bel-Air Avenue Residence Bel-Air Island South (Phase 1) PokFuLam Hong Kong

Authorised representatives Mr. Woo Thomas (胡禮賢) House 9 The Giverny Hebe Haven Sai Kung New Territories Hong Kong

Mr.YipHoiTo(葉海濤) Flat ND, 28/F, Tower 3 North Court Festival City Phase 2, Sha Tin New Territories Hong Kong

Audit committee Mr.YeungChiWai(楊志偉) (Chairperson) Ms.YuShunYanVerda(余舜茵) Mr. Yip Ki Chi Luke (葉祺智)

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CORPORATE INFORMATION

Remuneration committee Ms.YuShunYanVerda(余舜茵) (Chairperson) Mr. Grange Paul Jonathan Mr. Yip Ki Chi Luke (葉祺智)

Nomination committee Mr. Woo Thomas (胡禮賢) (Chairperson) Mr.YeungChiWai(楊志偉) Mr. Yip Ki Chi Luke (葉祺智)

Principal share registrar and transfer [REDACTED] office in the Cayman Islands

Hong Kong branch share registrar and [REDACTED] transfer office

Principal bankers The Hongkong and Shanghai Banking Corporation Limited 1/F, Tower 2, HSBC Center, 1 Sham Mong Road Kowloon, Hong Kong

Company’s website www.marineinternationalholdings.com (information of this website does not form part of this document)

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INDUSTRY OVERVIEW

This section contains information which is derived from official government publications and industry sources as well as a commissioned report from Frost & Sullivan. We believe that the information has been derived from appropriate sources and we have taken reasonable care in extracting and reproducing the information. We have no reason to believe that the information is false or misleading in any material respect or that any fact has been omitted that would render the information false or misleading. The information has not been independently verified by us, the Sole Sponsor, the [REDACTED],the [REDACTED],the[REDACTED], or any of their affiliates or advisers, nor any other party involved in the [REDACTED] (which, for the purpose of this paragraph, excludes Frost & Sullivan) and no representation is given as to its accuracy. Our Directors believe after taking reasonable care, that there have been no material adverse changes in the market information since the date of issue of the Frost and Sullivan Report which maybe qualify, contradict or have an impact on the information in this section.

SOURCE OF INFORMATION We commissioned Frost & Sullivan, an independent market research and consulting company, to conduct an analysis of, and to prepare a report on, the Hong Kong yacht distribution market and global yacht market for the period from 2015 to 2024. We paid Frost & Sullivan a fee of HK$930,000, which we believe reflects market rates for reports of this type. Founded in 1961, Frost & Sullivan has 49 offices with more than 2,000 industry consultants, market research analysts, technology analysts and economists globally. Frost & Sullivan’s services include technology research, independent market research, economic research, corporate best practices advising, training, client research, competitive intelligence and corporate strategy. Frost & Sullivan has been covering the Chinese market since the 1990s. Frost & Sullivan has four offices in the PRC and direct access to the knowledgeable experts and market participants in the construction market and its industry consultants, on average, have more than three years of experience. We have included certain information from the Frost & Sullivan Report in this document because we believe this information facilitates an understanding of the yacht distribution market in Hong Kong and global yacht market for the prospective investors. Frost & Sullivan’s independent research consists of both primary and secondary research obtained from various sources in respect of the yacht distribution market in Hong Kong. Primary research involved in-depth interviews with leading industry participants and industry experts. Secondary research involved reviewing company reports, independent research reports and data based on Frost & Sullivan’s own research database. In compiling and preparing the research, Frost & Sullivan assumed that the social, economic and political environments in the relevant markets are likely to remain stable in the forecast period from 2020 to 2024. In addition, Frost & Sullivan has developed its forecast on the bases and assumptions that (i) the global economy and economy in Hong Kong and are likely to maintain stable growth in the next decade; (ii) the country and regions’ social, economic and political environment are likely to remain stable in the forecast period; and (iii) the yacht distribution market in Hong Kong is expected to grow based on the key industry drivers including geographical advantage, increasing demand for diversified leisure activities and stronger consumption capability. DIRECTOR’S CONFIRMATION Our Directors have confirmed that after taking reasonable investigation, there has been no adverse change in the market information since the date of the Frost & Sullivan Report up to the Latest Practicable Date, which may qualify, contradict or have an impact in any material respect on the information in this section.

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INDUSTRY OVERVIEW

OVERVIEW OF THE YACHT DISTRIBUTION MARKET IN HONG KONG Introduction of yachts Yachts or cruisers (terms can be used interchangeably), a category of premium durable consumer goods, are generally used for leisure and recreation in the water. Yacht activities are set as a way of entertainment for owners and guests in some scenery destinations or parks as yachts can integrate multiple functions, such as navigation, sports, entertainment, leisure and so forth, so as to meet individuals’, families’ or businesses’ needs for relaxation. Unlike a boat which can be propelled by manpower, a motor yacht needs larger engine in size that can produce more power to run longer distances at faster speeds. Based on internationally accepted standards, yachts can be classified into the following categories based on different sizes: (i) small-sized yachts refer to yachts with length less than 36 feet; (ii) middle-sized yachts refer to yachts with length from 36 feet to 60 feet; (iii) large & super yachts refer to yachts with length larger than 60 feet; large yachts with length over 79 feet are known as super yachts. A super yacht is usually equipped with sufficient amenities to allow for living aboard for extended periods meanwhile a super yacht is designed with luxurious decorations. Industry value chain analysis . Upstream manufacturers The upstream yachts manufacturing market is fragmented in terms of geographical coverage but is concentrated in terms of the distribution of sizable yachts suppliers. Major yachts design and manufacturing yacht companies are located mainly in Europe, such as Italy, France and Netherlands. Other major sites include the United States, Japan, the United Kingdom and Taiwan. The yachts manufacturing market in Mainland China and Hong Kong is still growing with most of players being branches set by foreign companies. . Dealers Yachts dealers in Hong Kong generally offer a wide range of yachts with different sizes and functions. Internationally renowned yachts brands usually have their exclusive dealers in Hong Kong. Some large dealers who have extensive business networks have become the exclusive dealers of certain yachts brands. It is an industry norm to sell first-hand yachts through a local dealers in Hong Kong, which is mainly due to but not limited to the reasons as listed below: (i) yachts are supposed to receive regular maintenance which may not be fulfilled by overseas yacht manufacturers at any time due to geographic limitations. Thus, local dealers are required to provide fully integrated services; (ii) to lower the operating costs, international suppliers are reluctant to open showrooms with few displays. The purchasing process of yachts follows booking-basis that only few yachts are available for display in stores. Moreover, most of the yachts are sold via boat shows, which can be more easily organised by the local dealers; (iii) demand for yachts is dispersedly distributed around the world and it is costly to open standalone stores even in top tier cities such as Hong Kong; and (iv) local dealers are more familiar with the needs and preferences of the region where they operate towards yachts. . Downstream customers Downstream customers may include individuals and corporations. They source yachts from distributors for various purposes, such as for sports, entertainment or for business purposes. Generally, customers in Hong Kong includes locals, Mainland Chinese, and expatriates who are mainly high net worth businessmen and middle-class people. The table below sets forth the characteristics of downstream customers.

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INDUSTRY OVERVIEW

Origins of Characteristics of Locations of key Customer appeals customers major customers suppliers

Major customers • Such customers purchase yachts in Hong Kong mainly for business purposes, such as business banquets. Europe such as the Mainland from Mainland China • Hence, super yachts, motor yachts and yachts with United Kingdom, China are high net worth flybridge are target products, which are well designed Italy and France businessmen. with luxury decoration.

The middle class • The composition of main clients from Hong Kong and including but not limited Southeast Asian countries are alike. to lawyers, doctors and • Such customers purchase yachts mainly for recreation Europe (the United captains comprise the purposes, i.e. motor yachts. Kingdom, Italy and • Hence, 30-80 feet-length yachts, sailing yachts and majority of customers in France) , USA Hong Kong sport yachts are their preferred product types, which and Taiwan Hong Kong and are considered more economical and allow individuals and Southeast Southeast Asia. to enjoy the pleasure of sailing. Asia • Such customers purchase yachts mainly for business High net worth and recreation purposes. Europe such as the businessmen from • Therefore, super yachts, motor yachts and yachts with United Kingdom, Hong Kong. flybridge are target products, which are well designed Italy and France with luxury decoration.

Note: High net worth individuals refers to individuals with investible assets (excluding the primary residence) of more than RMB10 million. Source: Frost & Sullivan Market size analysis . Market size of the yacht distribution market in Hong Kong The yacht distribution market in Hong Kong experienced fluctuations over the period from 2015 to 2019 with revenue generated from the yacht distribution market in Hong Kong peaking at HK$5,628.5 million in 2016 and decreased to HK$2,946.0 million in 2020. Changes in the global macro-economic condition have slight impact on the yacht distribution market as yachts are luxury consumer goods, for mainly wealthy people. Going forward, as with the rapid development in the economy and tourism industry in the nearby regions such as Southeast Asian countries, there is great demand for yachts in the near future. Enjoying the advantages brought by free-trade port, the yacht distribution market in Hong Kong is estimated to reach approximately HK$4,518.5 million in 2024. It is expected that the forecast CAGR will not be affected and the yacht distribution market will continue to grow since the consumption behaviour of potential consumers of yacht products, who are high net worth individuals, tends not to be changed easily as they have cultivated habits of decentralised management of their wealth and their pursuit of luxury products and customised experience is a long-established habit that is not easy to change. The estimated growth of the yacht distribution market in Hong Kong is also expected to be mainly benefited from the expected development of the yacht industry in the Great Bay Area in the foreseeable future. For example, in 2018 the Guangzhou Yacht Association was established, marking a milestone for the yacht industry in the Great Bay Area, with the purpose of establishing a sound and mature mechanism for the yacht industry development. According to the Guangzhou Yacht Association, a series of supportive policies regarding infrastructure construction including the establishment of mooring space, tax benefits, guidance on sales prices of yachts and professional industry training will be issued in the foreseeable future. Moreover, cooperation among regions in the Great Bay Area is also expected, where other provinces could learn from Hong Kong, which has a rich experience in the yacht industry, and Hong Kong can take the advantage of the mooring space in those provinces. The business environment has become difficult due to the recent outbreak of COVID-19 in Hong Kong since January 2020. If such adverse event continues, it may, to some extent, result in the contraction in various industries including the yacht industry in Hong Kong.

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INDUSTRY OVERVIEW

Market size of the yacht distribution market in Hong Kong, 2015–2024E

2015-2019 2020-2024E

CAGR -7.9% 11.3%

HK$ million 6,000.0 5,628.5

5,000.0 4,557.1 4,518.5 4,107.7 3,734.3 4,000.0 3,496.6 3,280.0 3,394.8 3,050.0 2,946.0 3,000.0

2,000.0

1,000.0

0.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: Frost & Sullivan . Number of licensed yachts in Hong Kong According to data from Marine Department, the number of licensed yachts in Hong Kong rose continuously from 9,456 units in 2015 to 10,296 units in 2020, representing a CAGR of 2.0%. However, there has been insufficient hold capacity for yachts in Hong Kong due to limited number of marinas. Upon the public’s call for more berthing space for yachts, the Hong Kong Government has constructed new mooring area. Also, yachts are allowed to stop at shelters at a lower berthing fee. Such supportive policies tend to benefit the yacht distribution market in Hong Kong. It is expected that the number of licensed yachts in Hong Kong will keep stable growth from 2020 to 2024 and reach approximately 10,980 in 2024. Number of licensed yachts in Hong Kong, 2015–2024E

2015–2019 2020–2024E

CAGR 2.2% 1.3%

Unit 12,000 10,296.0 10,427.0 10,565.0 10,702.0 10,842.0 10,980.0 9,456.0 9,748.0 9,948.0 10,160.0 10,000 8,000 6,000 4,000 2,000 0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: HKSAR Marine Department, Frost & Sullivan Import & export of yachts in Hong Kong . Import of yachts to Hong Kong As the yacht manufacturing industry is not mature in Hong Kong, Hong Kong has been relying on the import of yachts from yacht manufacturers all over the world to cater for the demand. According to UN comtrade, the import value of yachts experienced fluctuations over the period from 2015 to 2020, reaching USD283.6 million in 2016 and then fell to USD131.6 million in 2018 and rose to USD292.2 million in 2020. The decrease in 2018 was mainly attributable to the decreasing demand, which was resulted from the fatigued economy in Hong Kong in 2016 influenced by the soft trading activities and the housing bubble. According to Frost & Sullivan, with the expected rising nominal GDP in Hong Kong, import of yachts to Hong Kong is likely to gradually pick up in the near future at a CAGR of 8.7% from 2020 to 2024.

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INDUSTRY OVERVIEW

. Export of yachts from Hong Kong to Mainland China Export value of yachts from Hong Kong to Mainland China fluctuated during 2015 and 2019. However, restrained by the high import tax of luxury goods, there tends to be continuous demand for people from Mainland China to purchase yachts from Hong Kong. Backed by the exponential growth in economic links and exchanges between Mainland China and Hong Kong to implement the ‘‘Road and Belt’’ Initiative, the yacht market including the yacht distribution market in Hong Kong is fast-emerging as one of the beneficiaries. The export of yachts from Hong Kong to Mainland China is estimated to grow at a CAGR of 16.8% from 2020 to 2024. Export of yachts from Hong Kong to Mainland China, 2015–2024E

2015–2019 2020–2024E

CAGR –51.6% 16.8%

USD thousand 18,000.0 16,000.0 15,419.0 14,000.0 12,000.0 10,000.0 8,000.0 5,992.0 6,000.0 3,707.0 4,000.0 2,619.0 1,214.1 1,274.8 1,338.6 2,000.0 842.7 719.7 1,156.3 0.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: UN Comtrade, Frost & Sullivan Competitive landscape analysis of the yacht distribution market in Hong Kong Ranking of the yacht distribution market in Hong Kong

According to Frost & Sullivan, in 2020, the market size of the yacht distribution market in Hong Kong in terms of revenue was approximately HK$2,946.0 million. The yacht distribution market in Hong Kong was considered concentrated for the year ended 30 April 2020 in terms of revenue. The market was shared by more than 100 players with a limited number of sizable market players which took the leading market position. Leading players who have formed stable dealership with world-famous yacht brands display strong market presence in Hong Kong and benefit from the established reputation and recognition of their products. Furthermore, their attentive services ranging from pre-sale recommendation, customised design consultancy services to after-sales repair and maintenance services have strengthened their competitiveness. According to Frost & Sullivan, for the year ended 30 April 2020, the top five yacht dealers in Hong Kong generated an aggregate revenue of approximately HK$1,084.1 million, contributing to 36.8% of the entire market.

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INDUSTRY OVERVIEW

Our Group ranked third in terms of revenue generated and took up a share of 6.3% for the year ended 30 April 2020.

Total revenue in the year ended Market share in the year ended Ranking Company name Brief introduction 30 April 2020 (HK$ million) 30 April 2020

The company is a distributor of a well-known yacht manufacturer with its headquarter in 1 Company A 332.9 11.3% the United Kingdom, who has over 50 years in yacht manufacturing.

Founded in 1984, the company sells first-hand and second-hand yachts and providing pre-delivery and after-sales services 2 Company B 241.6 8.2% such as maintenance and others. It partners with world leading yachts brands such as Sanlorenzo, Beneteau and so forth.

Major business of or Group covers sale of first-hand luxury yachts, second-hand luxury yachts and provision of value-added services 3 The Group 186.6 6.3% such as maintenance and repair services, sale of special parts and accessories and yacht licensing services.

Established in 2003, the company is the exclusive dealer of a renowned England yacht 4 Company C brand in Hong Kong, selling luxury yachts 167.9 5.7% and offering after-sales support to customers, etc.

Main business of the company includes sales of first-hand yachts and provision of services 5 Company D 155.1 5.3% covering yacht management, brokerage, etc. It represents world-class boating brands.

Top 5 1,084.1 36.8%

Total Revenue 2,946.0 100.0%

Source: Frost & Sullivan Key drivers for the yacht distribution market in Hong Kong . Geographical advantage Comprised of the Hong Kong Island, Lantau Island, Kowloon peninsula and the New Territories including 262 outlying islands, Hong Kong is undoubtedly an ideal place for sailing enthusiasts. Also, as an old fishing village, Hong Kong is steeped in boating and sailing history, and it has established facilities and typhoon protections in place with years of historic development, giving it an advantage in terms of geographical location and infrastructure for yacht distribution market. . Increasing demand for diversified leisure activities With the improving economic condition, people in Hong Kong have demonstrated unprecedented surge in demand for a variety of leisure and entertainment activities. In addition to traditional sports and entertainment activities such as fitness, watching movies, and mobile devices and internet-based activities such as gaming, people especially those with comparatively higher disposable income tend to pursue activities that are more proactive and unique. Thus, such growing need for enjoying diversified entertainment lifestyle styles is likely to spur the yacht distribution market. . Stronger consumption capability According to Hong Kong Census and Statistics Department, benefiting from the resurgence of industries such as the real estate market in Hong Kong, the number of high net worth individuals in Hong Kong has reached a new level with a year-over-year growth rate of approximately 15.2% during 2019 and 2020. Meanwhile, according to the Wealth Report published by Knight Frank, Hong Kong also surpassed New York as home of the largest cluster of ultra high net worth individuals (who are defined as individuals with wealth worth USD30 million or more) since 2018. As high net worth individuals who have been pursuing high quality lifestyle and have usually formed habits of consuming luxury

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INDUSTRY OVERVIEW goods are considered the target yacht consumers in the yacht distribution market, the increase in the number of high net worth individuals indicates the strong consumption capability therefore promotes the yacht distribution market in Hong Kong. Future trends for the yacht distribution market in Hong Kong . Provision of chartered services The increasing efforts of yacht dealers to provide more luxurious features and memorable experience for customers pave the way for yacht charter services. The charter services are expected to become the trend of the yacht distribution market in Hong Kong as sustained by rising affluence and inclination towards luxurious lifestyle globally. For yachts owners, they could maximise the use of their yachts during periods when they do not use the yachts via the charter services and receive rental fee. For people who lack the capability to afford a yacht or who would like to use yacht temporarily for specific use, charter services can fulfil their diversified demands at affordable prices. . More emphasis on brand marketing Effective brand marketing is considered significant way for yacht dealers to promote a yacht brand to reach as more customers as possible in a short time especially for customers who have limited knowledge of yachts. Additionally, successful marketing of yacht brands, to a great extent, determines the sales of yachts in Hong Kong, the performance of which is closely related with whether a yacht brand would continue a dealership with dealers. Therefore, in order to secure the existing relationship with yacht brands and to improve the sales performance in the long run, yacht dealers in Hong Kong will pay growing attention to the marketing of yachts by establishing systematic marketing strategies. In addition to attending boat shows periodically, they will also liaise with related magazines and websites, publish their own publications and launch yacht events. Opportunities for the yacht distribution market in Hong Kong . Free yacht travel between Mainland China and Hong Kong In December 2017, two Hong Kong registered yachts made their debut in Shenzhen waters, marking a milestone for the free yacht travel scheme between Mainland China and Hong Kong. The cross-boundary travel was a trial under the pilot programme of the Guangdong Pilot Free Trade Zone, which encourages more interaction and communication between Hong Kong and Mainland China via multiple ways. Moreover, in February 2019, the government of the Guangdong Province in the PRC issued measures regarding improvement in business environment to facilitate cross-border trade, which highlight the simplifying clearance procedures of yachts and improving yacht entry and exit guarantee between Guangdong Province and Hong Kong and Macau. It is expected that the scheme along with the measures to promote and realise the free travel between Hong Kong and Mainland China will create more opportunities in the yachts market including the distribution segment in Hong Kong by offering alternative sailing routes. . Growing high net worth individuals from Mainland China Being a free-trade port, Hong Kong becomes the first place for customers from Mainland China to purchase luxury goods that are of high value such as yacht and customers from Mainland China also comprise major customer groups of yacht distribution market in Hong Kong. According to Hurun Wealth Report 2020, Benefiting from the advancement of high-tech industries such as AI (Artificial Intelligence) and rapid development of Internet, the number of high net worth individuals in Mainland China exceeded 4.0 million in 2020, representing a CAGR of approximately 18.9% from 2014. This creates great market potential for the yacht distribution market in Hong Kong. . Better development environment for yacht distribution business According to the Chief Executive’s 2020 Policy Address, Invigorating Island South Plan (躍動港島南計畫) will be implemented. The key projects of the plan include using Ocean Park as the core to develop maritime tourism routes and connect other regions and islands; expanding the Aberdeen Typhoon Shelter; increasing the boat berthing area, and providing more landing facilities along the coast. These projects will provide a better

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INDUSTRY OVERVIEW development environment for the yacht distribution market in Hong Kong. It is expected that the Hong Kong yacht tourism industry will be stimulated by more maritime routes, thus driving the purchase demand of yacht tour and rental companies. As customers including yacht tour and rental companies usually purchase yachts through yacht distributors instead of directly purchasing from yacht manufacturers, this will create further market opportunities for yacht distributors. In addition, due to the shortage of berths in Hong Kong, the difficulty of yacht berthing has become one of the main concerns for customers to purchase yachts. Thus, the government’s plan to increase ship/yacht berthing areas and more convenient landing facilities will help to remove consumers’ concerns of berthing difficulty which will also drive yacht purchasing demand and provide more potential customers for yacht distributors. Threats for the yacht distribution market in Hong Kong . High operating cost The yacht dealers in Hong Kong confront with high operating cost as a result of the expenses spent on machinery to maintain and repair yachts and on staff training. Engines and related parts and accessories that are used to assemble a yacht generally require professional staff with technology know-how to conduct periodical maintenance and repair. In order to keep yachts operating with good function, specialized curing agents that specifically cater for certain types of accessories should be adopted with proper works conducted by technicians. Any inappropriate practices may impair the engines or other parts of yachts, which leads to loss for yacht owners. . Lack of mooring space During recent years, there is an increase in the number of yachts in Hong Kong. The number of licensed vessels for Class IV, which are generally referred to as pleasure vessels, grew from 9,456 in 2015 to 10,880 in 2020, representing a CAGR of 2.2%. However, berthing spaces for yachts are in short supply and the berthing charges are high. According to data from Marine Department, the number of moorings in Hong Kong showed slight fluctuation from 2015 and 2020, increasing from 1,905.0 in 2015 to 1,909 in 2016 and then slightly decreased to 1,903 in 2019. The slight decrease between 2016 and 2017 was mainly due to the decrease of moorings in New Yau Ma Tei Typhoon Shelter area. Number of private moorings in Hong Kong, 2015–2024E

2015-2019 2020-2024E

CAGR 0% 0.7%

unit 2,100.0 2,053.0 2,055.0 2,060.0 2,060.0 2,050.0 2,000.0 2,000.0

1,950.0 1,909.0 1,905.0 1,900.0 1,892.0 1,903.0 1,900.0

1,850.0

1,800.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: HKSAR Marine Department, Frost & Sullivan Currently, there are less than 5,000 moorings and dry berths in Hong Kong with the latest marina built in 1991. The insufficient mooring space for yachts, however, may hold back the sustainable development of yacht distribution market in Hong Kong as more and more customers are desired for more private space to berth their yachts. The berthing fee in generally depends on the location of marina and the length of the yacht and there is no downward or upward trend in the historical and forecasted berthing fee in Hong Kong. The Hong Kong Government has actively planned to add 1,200 private moorings by expanding three existing mooring sites in Tso Wo Hang, Shuen Wan Hoi and Tai Mei Tuk to help relieve the current insufficiency of mooring space in Hong Kong. The Marine Department is considering to set up temporary private moorings in typhoon shelters to ease the territory-

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INDUSTRY OVERVIEW wide shortage in berthing spaces. The supply of shelter for recreational vessels including yachts will increase to 230.9 hectares in 2030, mainly attributable to the inclusion of sheltered space available in Shuen Wan Hoi, Cheung Sha Lan and Nim Shue Wan and a proposed marina facility in Tung Chung. Besides, the new Lantau Yacht Club (LYC) Marina which was under redeveloped and targeted to open in late 2020 and will provide around 150 berths and it will be the first marina in Hong Kong catering for super yachts up to 100 m in length. Despite the recent protests in Hong Kong and the economic restructuring in the PRC, their impact on the customers’ consumption of yachts may be insignificant as yacht customers are usually high net worth individuals, and therefore the deployment of mooring expansion in Hong Kong initiated by the Hong Kong Government is still expected to be on the agenda. . Uncertainty of the fuel cost The oil price is related to a series of factors such as international economic conditions and political changes and may fluctuate accordingly.

Price of regular unleaded gasoline experienced a downtrend from 2015 and 2016 with the price decreasing from HK$7.7 per litre to HK$7.1 per litre and then recovered afterwards and reached HK$10.0 per litre in 2020, representing a CAGR of 5.4% from 2015 to 2019. The decrease was primarily due to the over-supply of the oil globally. Historical price analysis of fuel in Hong Kong, 2015–2020

2015–2020

CAGR 5.4%

HK$ per litre 12.0 9.7 10.0 10.0 9.3 7.7 7.8 8.0 7.1 6.0 4.0 2.0 0.0 2015 2016 2017 20182019 2020 Source: Hong Kong Consumer Council, Frost & Sullivan Entry barriers for the yacht distribution market in Hong Kong . Brand reputation Internationally renowned yacht brands usually have already accumulated certain fan base due to their high quality, fashion design style and luxury products. Therefore, yacht dealers in Hong Kong who have been selling world-leading yacht brands tend to attract and acquire new customers in a more efficient way whereas for new entrants who fail to become the dealers of top yacht brands may have to spend more time exploring customer channels and may find it hard to compete with those large dealers. Besides, it is difficult for a yacht dealer to secure dealerships especially an exclusive dealership with popular and world- renowned brands such as Absolute and Azimut. To be nominated as a regional exclusive distributor, the yacht manufacturers require a distributor to have outstanding sales performance, established reputation for service quality, market insight and knowledge of customers’ needs and consider cannibalisationintermsofterritoryoverlap. . Flexible financing capability Yacht, which is positioned as luxury consumer goods, requires huge financial investment in its repair and ongoing maintenance aside from its high cost of construction. In order to offer professional technical support and customer services, yacht dealers have to allocate substantial investment in staff training, equipment and machinery sourcing, which poses great cost pressure on yacht dealers. For yacht distributors who would like to expand their business network to new regions or introduce a new series of products, a considerable amount of money would be invested in purchasing a

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INDUSTRY OVERVIEW demonstration yacht, which is considered an effective way to attract more potential customers as seeing a real yacht personally tends to enhance customers’ purchasing willingness. Thus, the lack in capability to afford such high operation cost or lacking strong financing capability may impinge the competitiveness of new entrants or dealers who are in small scale. . Industry experience Industry experience is considered as another barrier for new comers to enter the yacht dealers market in Hong Kong. In order to offer professional services to customers who are expecting attentive and meticulous services, dealers have to be acquainted with updated industry information, product information and related technical parameters and specifications from the perspective of engine power, tank capacity, cruising speed, consumption of fuel per mile so that they could well address the specific demands and requirements from customers. Moreover, staff with rich experience have better knowledge of maintaining while expanding customer channels and to maintain reputation in the yacht distribution market. Competitive landscape analysis of global yacht market Overview of market competition

There are around 250 yacht manufacturers including key and niche players in the world mainly from Asia, Europe and USA, while Asian players are new entrants and in progress to make more contribution to the yacht manufacturing industry. European brands are popular across the world due to the fashion design, fancy appearance and high quality of their yacht products. Compared with manufacturers in Europe, most of the suppliers in USA and Asia concentrate on recreational and sporty product lines, offering comparatively entry or mid-lux and small to mid-sized products. The supplier of our Group ranked first among all yacht manufacturers worldwide in terms of length built from 2014 to 2019. Impact of global economic condition on yacht distribution market

Changes in the macro-economic condition have slight impact on the consumption behaviour of luxury motor yachts consumers as these customers are high net worth individuals who tend to cultivate habits of decentralised management of their wealth and their pursuit for luxury products and customised experience is a long-established habit that is not easy to change. For example, according to International Monetary Fund, the global GDP per capita witnessed a period of fluctuation from 2014 to 2019, decreasing from USD11,064.6 in 2014 to USD10,828.3 in 2017 and then recovered in 2019 at USD11,428.6. However, according to Frost & Sullivan, during the same period, the market size of global yacht industry in terms of revenue increased at a six year CAGR of 10.6%, which indicates that the slight impact of global economic condition on the consumption behaviour of yacht consumers. This is also in line with the consumption behaviour of other luxury goods where the macro-economic condition has slight impact on the consumption behaviour of these consumers. Take premium passage vehicles as an example, according to Ferrari’s annual report, the sales of Ferrari cars were up 20.3% in the PRC, Hong Kong and Taiwan in 2019, higher than the year-over-year growth rate of nominal GDP in the three regions which was approximately 7.8%, 1.1% and 3.0% provided by the National Bureau of Statistics, respectively, in 2019 and the sales of Ferrari cars in other Asian regions increased by 12.9% in 2019. Porsche, another luxury car brand, also embraced a growth of 12% in terms of units sold in the PRC market. As for other luxury goods such as jewellery and watches, the segment of jewellery and watches of LVMH, one of the largest luxury groups worldwide, witnessed a year-over-year growth rate of approximately 3% in terms of global sales revenue while its total sales in Asia experienced a 13.7% growth between 2018 and 2019 based on LVMH’s annual report However, the stock indices in these Asian regions recorded great volatility during the same periods. Stock index in the PRC, Hong Kong and Taiwan increased by 22.4%, 9.1% and 21.6% respectively, in 2019 while they decreased by 24.5%, 13.6% and 7.2%, respectively, in 2019. All the aforementioned examples demonstrate that the turbulent macroeconomic condition exerts a weak influence on the high-end luxury product market including the yacht market.

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INDUSTRY OVERVIEW

Market size of global yacht industry The total revenue generated from global yacht industry experienced an uptrend from 2015 to 2019, growing from EUR16.7 billion in 2015 to EUR25.0 billion in 2019, representing a CAGR of approximately 10.6%. Over the forecast period, global yacht industry is likely to capture new opportunities in the emerging markets in Southeast Asian countries because of their growing consumption capability. Negatively dragged down by the occurrence of COVID-19 in 2020, the market size of the global yacht industry is projected to slow down in 2020, representing a CAGR of approximately 3.0% over the period from 2020 to 2024. Market share of Absolute and Azimut is approximately 0.3% and 3.6% in 2019 respectively. Market size of global yacht market, by revenue, 2015–2024E

2015–2019 2020–2024E

CAGR 10.6% 3.0%

EUR billion 35.0 27.8 28.6 30.0 26.2 26.9 25.0 25.5 25.0 22.5 23.4 19.8 20.0 16.7 15.0 10.0 5.0 0.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: Frost & Sullivan Introduction of major players in the global yacht market

Market share in 2020, Supplier Name Establishment Year Headquarter Brief introduction by length built

Established in 1969 and headquartered in Azimut 1969 Italy Italy, Azimut mainly sales luxury 10.6% superyachts and motor yachts worldwide.

As an Italian yacht brand, Sanlorenzo has Sanlorenzo 1958 Italy been building high-quality motor yachts 9.3% since 1958.

Based in the Netherlands, Feadship has Feadship 1949 The Netherlands become the renowned superyacht builder 3.5% worldwide.

The UK builder focuses on manufacturing Sunseeker 1979 UK 3.1% motor yachts

Based in Germany, Lürssen is one of the Lürssen 1875 Germany leading shipyards for large luxury yacht 3.1% building.

The COVID-19 pandemic has taken the world largely by surprise, the outbreak of which also exerted negative impact on the yacht sectors globally. Due to COVID-19, major yacht manufacturers have taken various measures. For instance, Sunseeker cut pay and hours to avoid compulsory redundancies. Sanlorenzo closed its facilities since the last week of March for approximately one month. However, an Italian investment bank has signed a €10 million financing contract with the Sanlorenzo Group for the period 2020–2022 to safeguard jobs and guarantee the operations of the yacht production sector, supply chain and related businesses.

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INDUSTRY OVERVIEW

Yacht industry in the ‘‘Great Bay Area’’ The ‘‘Great Bay Area’’ links the cities of Guangzhou, Shenzhen, Huizhou, Dongguan, Zhongshan, Jiangmen, Zhaoqing, Foshan, Zhuhai, Hong Kong and Macau into an integrated economic and business hub, where the yacht industry is empowered to develop fast under supportive policies especially in pilotfreetradezones(PFTZs)andfreetrade zones (FTZs). The China (Guangdong) PFTZ (Pilot Free Trade Zones), Hong Kong and Macau Yacht Free Navigation Plan is a plan for yachts registered in Hong Kong and Macau to gradually allow yachts to sail and moor in China’s Pearl River Delta with simplified procedures. Holding quantity of yacht in the ‘‘Great Bay Area’’, 2015–2024E

2015-2019 2020-2024E

CAGR 33.5% 3.7%

unit 80,000.0 66,980 70,000.0 62,802 65,142 57,880 60,275 60,000.0 52,834 55,396 47,200 50,000.0 40,000.0 30,000.0 25,048 17,456 20,000.0 10,000.0 0.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: Yacht Industry Development Association of Fujian, Frost & Sullivan The holding quantity of yacht in the ‘‘Great Bay Area’’ gradually increased from 17,456 units in 2015 to 25,048 units in 2016 and surged to 55,396 units in 2019, representing a CAGR of 33.5% over the period from 2015 to 2019. In 2018, the Central Committee of the PRC government has made clear on the strategic position of the Great Bay Area, where MacauistargetedtobeestablishedasaworldleisurecentrewhileHongKongandother cities will jointly work together to develop into a centre of technology and science innovation and finance, which contributes to the economic development of the Great Bay Area. It is also expected that the number of potential customers who could afford luxury motor yachts in the Great Bay Area will increase at a CAGR of approximately 3.7% from 2020 to 2024. Currently, there was limited number of sizable yacht manufacturing companies in Guangdong Province, and for other regions in the Great Bay Area such as Macau, as it has not formed mature yacht market, it takes the advantage of the yacht distribution in Hong Kong to cater for its demands. 1. Yacht industry Overview in Guangdong Province

1.1 Market Overview

In 2018, the Central Committee of the PRC government has made clear on the strategic position of the Great Bay Area, which links the cities of Guangzhou, Shenzhen, Huizhou, Dongguan, Zhongshan, Jiangmen, Zhaoqing, Foshan, Zhuhai, Hong Kong and Macau into an integrated economic and business hub. Guangdong contains nine cities in Great Bay Area. Therefore, Guangdong has benefited a lot from the establishment of the Great Bay Area in economic development. Due to the economic development of Guangdong Province, which is one of the most developed provinces in the PRC, people’s demand for high-end leisure and entertainment has increased. Guangdong Province is one of the most developed provinces in yacht and yacht distribution industry in comparison with other provinces in the PRC.

According to the statistics of China Communications Association Cruise and Yacht Branch, the total number of yachts in the PRC was more than 4,000 in 2020, including over 1,000 in Guangdong, which means the number of yachts in Guangdong accounted for approximately 25% of the total number of yachts in the PRC in 2020. The number of berths in Guangdong was approximately 1,500 in 2020, taking up a share of approximately 15% of the total number of berths in the PRC in 2020.

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INDUSTRY OVERVIEW

The further development of yacht industry as well as yacht distribution industry in Guangdong Province would be continuously driven by the following perspectives, including the development of tourism, the large high-net-worth group, the establishment of related association, and related policy support:

. Development of tourism

According to Guangdong Provincial Bureau of Statistics, the number of tourists in Guangdong province has grown at a CAGR of 10.8% from 2015 to 2019. Due to the impact of COVID-19, both domestic and international passenger flows are subject to strict restrictions and as a result, the number of tourists is estimated to drop significantly in 2020 by approximately 16%. However, the tourism industry is expected to recover as the COVID-19 pandemic gradually stabilises and the overall economy gradually recovers in the PRC, which is evidenced by the national GDP growth rate improving from -6.8% in first quarter of 2020 to 3.2% in second quarter and 4.9% in third quarter of 2020. The total number of tourists in Guangdong Province is anticipated to reach 623.4 million in 2024 at a CAGR of approximately 10.3% from the year of 2020 to 2024. Number of tourists in Guangdong Province (2015–2024E)

Million 2015–2019 2020–2024E CAGR10.8% 10.3% 700.0 591.2 623.4 531.4 532.3 560.2 600.0 488.1 443.9 500.0 397.8 421.9 400.0 352.3 300.0 200.0 100.0 0.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: Guangdong Provincial Bureau of Statistics, Frost & Sullivan

In line with the growth in the total number of tourists in Guangdong Province, as an important part of Guangdong’s tourism industry, the yacht tourism is anticipated to embrace more growth potential. In particular, Guangdong-Hong Kong-Macao Greater Bay Area Planning Outline《 ( 粵港澳大灣區發展規劃綱要》) issued in 2019 has clearly mentioned therein better coordination of sea and shore, which will lead to better development of new islands and creation of yacht tourism destinations and increase in the total number of yacht sightseeing tourists accordingly. Currently, there are a large number of undeveloped islands outside of Hong Kong, the Pearl River Estuary and Daya Bay, which are major destinations in yacht tourism. This will create more opportunities for yacht tourism in Guangdong province as well as the whole Great Bay Area. Yacht sightseeing tourism as a popular form of tourism in coastal cities will also be further developed. As such, demand for yacht purchase by individuals as well as companies engaged in yacht leasing would be increased accordingly. Due to complicated procedures and processes to purchase yachts directly from the manufacturers, the majority of individual end-users as well as the yacht charter companies would choose to purchase yachts from the yacht dealers rather than the manufacturers, thus promoting the development and market demand of yacht distribution industry.

. Large high-net-worth group

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INDUSTRY OVERVIEW

According to China Merchants Bank, the number of high-net-worth individuals in the PRC whose investable assets were above RMB10 million was more than 2 million in 2019. In particular, Guangdong Province ranked top three among34provincesinthePRCinthetotalnumber of high-net-worth individuals. Therefore, Guangdong Province, with a large potential consumer group, is a key development area to support the growth of the yacht industry in the PRC.

. The establishment of related association

In 2018, the Guangzhou Yacht Association was established, marking a milestone for the yacht industry in Guangdong Province, with the purpose of establishing a sound and mature mechanism for industry development. According to the Guangzhou Yacht Association, a series of supportive actions including, but not limited to, infrastructure construction including the establishment of mooring space, tax benefits, guidance on sales price of yachts and professional industry training will be issued in the foreseeable future. The establishment of a mature industry development mechanism in the yacht industry will help to standardise the industry with unified rules, which will help create a favorable environment for all the players in the yacht industry in Guangdong Province.

. Policy support from the government

The government in Guangdong Province have issued a number of policies aimed at creating a supportive and positive environment for the further development of the yacht industry as a whole, which in turn, will benefit yacht distributors’ future operation in Guangdong province.

1) Policy to remove the main concern of berthing difficulty

One of the biggest hindrances for the increase in total yacht demand is the difficulty of berthing yachts in the PRC which entails complicated procedures of renting berths at yacht marinas. As most marinas in the PRC belong to yacht clubs which are usually membership-based, joining a club is a prerequisite for mooring yachts, membership fees is usually in the millions of yuan and as a result, annual parking fee will, be as high as millions of yuan.

Given the berthing difficulty mentioned above, the PRC government is compiling the Implementation Plan for Promoting the Cruise Economy and Development of Maritime Tourism in the Guangdong-Hong Kong-Macao Greater Bay Area (2019–2022)《 ( 深圳市促進郵輪經濟及粵港澳大灣區海上旅游發展實施方案（2019–2022年）》) which proposes, among others, to strengthen the infrastructure construction of an international yacht tourism free port and to concentrate on the construction of a public yacht marina, which will be a public facility owned and priced by the PRC government. The construction of a public yacht marina will relieve the issues of berthing to a certain extent and remove the hindrances for owning a yacht, which will stimulate the demand for yachts in Guangdong. As demand increases, and given the complicated procedures the purchased yachts directly from manufacturers, demand for yacht dealers such as the Group will also increase providing a good market opportunity for the Group.

2) Policy to further simplify the immigration procedures

In July 2017, the China (Guangdong) Pilot Free Trade Zones, Hong Kong and Macau Yacht Free Navigation Plan《 ( 中國（廣東）自由貿易試驗區粵港澳游艇自由行實施方案》) was implemented which allowed yachts registered in Hong Kong and Macau to enter and exit freely at specific ports in Guangdong. However, the effect of the implementation of this policy

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INDUSTRY OVERVIEW

did not meet the expectations to increase yacht traffic in the Greater Bay Area due to problems such as complicated customs clearance procedures, long customs clearance time, heavy tax and security deposit burden, and limited open ports. As a result, the free travel of yachts in Guangdong, Hong Kong and Macau was not active.

In response and to further stimulate the yacht industry, the Guangdong Province’s Measures to Optimise Port Business Environment and Promote Cross-border Trade Facilitation《 ( 廣東省優化口岸營商環境促進跨境貿易便利化措施》) was officially released in 2019 to, among others, research and explore innovative yacht supervision models, further improve yacht entry and exit management mechanisms and simplify yacht customs clearance procedures between Hong Kong and Macau. This policy will improve the shortcomings of the previous policy and promote the free exchange of yachts in the Greater Bay Area, providing more waterways and ports. The supportive policy environment will therefore, drive the development of the yacht industry in this area in the future. As immigration procedures simplify, it is expected that the free travel of yachts in Guangdong, Hong Kong and Macau to be active driving the demand of yacht.

1.2 Competitive Landscape

The yacht distribution market in Guangdong Province was concentrated, dominated by limited sizable distributors. In 2020, according to China Communications Association Cruise and Yacht Branch, the total number of yacht distributors in Guangdong Province was around ten. All of them are authorised dealers for foreign yacht brands. Based on the revenue, Company E, the top player, generated approximately RMB90.4 million from yacht distribution in 2020. The following table demonstrates the top five yacht distributors in Guangdong Province in 2020:

Size of Rank Company Name Background Revenue in 2019 Major Brands of Yachts Type of Yachts Sold Yachts Sold (RMB Million) (Feet)

1 Company E Founded in 1993 and headquartered in 90.4 Ferretti Yachts, Jeanneau, Superyachts, sailing 15–120 Shenzhen. Company E is an influential Regal, Custom Line, yachts, luxury yachts, imported luxury boat agency sales Riva, Pershing, Itama pontoon boats service provider. It has sales and service centers in many cities across the PRC.

2 Company F Founded in 1984. Company F is a 83.7 Sanlorenzo, Bluegame, Superyachts, luxury 18.5–210 regional subsidiary of a Hong Kong Fairline Yachts, yachts, yachts, sailing yacht distribution company. It is Beneteau, Lagoon, yachts, fishing boats headquartered in Shenzhen whose Aquila Power business mainly covers mainland China. Catamaran & CNB

3 Company G Founded in 2008. Company G is a 42.1 Formula,Rinker, Lazzara, Luxury yachts, sailing 12–140 professional yacht sale and ancillary Hunter, Sweetwater, catamarans, fishing service company. Its headquarter is Luhrs, Sessa, Galeon, yachts and speedboats located in Shenzhen and has Marquis subsidiaries in Hong Kong, Guangzhou, Sanya, Dalian, and Shanghai.

4 Company H Founded in 2015. Company H is a boat 18.6 Bavaria, Monterey Sailing yachts, sports 18–60 andyachtagentlocatedinShenzhen yachts and provides sailing yacht related products and services.

5 The Group’s SZ The Group’s SZ sub-dealer is founded in 15.1 Novadi, Azimut Luxury yachts 50–78 sub-dealer 2017 and is a luxury yacht agent in the PRC, and it is the Group’s sub-dealer in Shenzhen.

Source: Frost & Sullivan

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INDUSTRY OVERVIEW

2. Yacht industry Overview in Hainan Province

2.1 Market Overview Hainan Province, as China’s only province in the tropics and surrounded by the sea, has a superior geographical advantage in developing the yacht industry. Since 2009 when the Trial for Hainan Yacht Management《 ( 海南省遊艇管理試行辦法》)and Hainan Yacht Club Registration Record Management Measures《 ( 海南省遊艇俱樂部（遊艇會）審核註冊登記備案管理辦法》) were launched, Hainan Province embraced a breakthrough in its development of yacht industry. The yacht tour and rental industry in Hainan Province which have high demand for purchasing yachts become more mature, thus promoting the yacht distribution market to some extent. With more than ten years of development, the yacht industry in Hainan Province has demonstrated considerate growth in the past years. According to China Communications Association Cruise and Yacht Branch, the total number of yachts in Hainan Province was around 1,200, which accounted for approximately 30% of the total number of yachts in the PRC in 2020. The number of berths was approximately 2,200 in 2020, occupying a share of over 20% in the total number of berths in the PRC in 2020. Yacht tourism is an important component of Hainan’s tourism industry. In line with the development of Hainan’s tourism industry, the number of tourists in Hainan continuously increased and the demand for yacht trips by tourists increased accordingly, promoting the total yacht sailing times in Hainan Province. According to the data from China Maritime Safety Administration, the total yacht sailing times in Hainan Province increased from 27,354 times in 2015 to 91,243 times in 2019, representing a CAGR of 35.1%.

Driven by the numerous favorable policies from the government issued in Hainan Province, such as the establishment of FTA (Free Trade Area), it is expected that the total yacht sailing times in Hainan Province would continue growing at a CAGR of 15.0% during the period from 2020 to 2024. Total yacht sailing times in Hainan Province, 2015–2024E

Times 2015−2019 2020−2024E 250,000 GAGR 35.1% 15.0% 193,954 200,000 171,217 149,901 150,000 131,162 111,035 91,243 100,000 60,594 43,107 50,000 27,354 31,788

- 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E

Source: China Maritime Safety Administration (MSA), Frost & Sullivan

In addition, to promote the growth of the local yacht industry, the Hainan Provincial Coast Defence and Port Office issued the Proposals for Promoting the Construction of Yacht Characteristic Towns（《推進遊艇特色小鎮建設建議》）in 2018, which proposed the development of eight distinctive and interconnected yacht towns thereby increasing the number of yacht clubs by 2025. To facilitate the development of yacht resort town, the PRC government has issued guidance which outlined the simplification of yachts entry and free yacht tour between Hainan Province, Macau and Hong Kong. The yacht resort town will promote the yacht industry from yacht designing, manufacturing, repair and maintenance as well as to yacht tourism. In addition, the development of the yacht industry as well as yacht distribution industry in Hainan Province would be further stimulated by the development of tourism, the development of yacht leasing business, and related policy support.

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. Developmentoftourism

Since 2010 when Several Opinions on Promoting the Construction and Development of Hainan International Tourism Island《 ( 關於推進海南國際旅游島建設發展的若干意見》) was launched, building Hainan as an international tourist island has become a national strategy. Therefore, an enhanced policy, namely the Implementation Plan for Hainan Province to Build an International Tourism Consumption Center《 ( 海南省建設國際旅游消費中心的實施方案》) was launched in December 2018, whereby the government repositioned Hainan as an ‘‘international tourism consumption center’’. From the Implementation Plan, Hainan will be built into a global duty-free shopping center by implementing a more open and convenient duty-free policy on outlying islands, enriching and enhancing the supply of international tourism products, and further developing cruise and yacht tourism. These policies will provide impetus for the sustainable development of Hainan’s tourism industry, which is expected to attract more tourists.

According to Haikou Tourism Culture & Radio & TV Sports Bureau, the number of tourists in Hainan Province grew at a CAGR of 11.0% from 2015 to 2019. Although the number of tourists is estimated to drop significantly in 2020 by around 16.0% due to the impact of COVID-19, the tourism industryisexpectedtorecoverastheCOVID- 19 pandemic is gradually under control in the PRC. This is supported by the national GDP growth rate improving from -6.8% in the first quarter of 2020 to 3.2% in the second quarter and 4.9% in the third quarter of 2020, which serves as a signal for the resumption of the overall economy. The total number of tourists in Hainan Province is anticipated to reach 88.4 million in 2024 at a CAGR of approximately 8.0% from the year of 2020 to 2024. Number of tourists in Hainan Province (2015–2024E)

2015–2019 2020–2024E Million CAGR11.0% 8.0% 88.4 90.0 82.1 76.8 80.0 68.2 71.2 70.0 63.3 65.0 55.9 60.0 49.8 50.0 44.9 40.0 30.0 20.0 10.0 - 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: Haikou Tourism Culture & Radio & TV Sports Bureau & Frost & Sullivan

As yacht sightseeing tourism is one of the most popular forms of tourism in Hainan Province due to its unique geographical location, the demand for yacht purchase by both individuals and yacht charter companies is expected to increase to cater to the growing number of tourists. Due to complicated procedures and processes to purchase yachts directly from yacht manufactures, individual end-users as well as yacht charter companies will usually purchase yachts from yacht distributors instead, which will promote the development of yacht distribution business and drive the demand for yacht dealers such as the Group.

. Development of yacht leasing business

Hainan is the only province in the PRC where yacht leasing is permitted by the government. The Management Measures for Yacht Leasing in Hainan Province (Trial) 《( 海南省游艇租賃管理辦法（試行）》) promulgated by the government has been officially implemented on 1 January 2020, which aims to regulate yacht leasing behavior, safeguard the legal rights of both yacht leasing business operators and charterers, and ensure water traffic safety, promoting the healthy and orderly development of the yacht leasing industry in Hainan Province. The promulgation of

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INDUSTRY OVERVIEW

the policy will further regulate the yacht leasing market in Hainan. The standardisation of the yacht leasing market is conducive to the further development of the yacht market, thereby further driving the demand for yacht leasing. As a result, the demand for yacht purchases by the yacht leasing business operators will also increase accordingly, which provides new market opportunities for the Group’s future business expansion in Hainan.

. Policy support from the government

1) Policy to reduce the tax on yacht imports

According to the Customs Import and Export Tariff of the People’s Republic of China, imported goods are subject to (i) tariffs; (ii) import value-added tax; and (iii) consumption tax in Hainan, and the three compound calculations are approximately 43%. The Overall Plan for the Construction of Hainan Free Trade Port《 ( 海南自由貿易港建設總體方案》) was released by the State Council Information Office in June 2020, which provides for the ‘‘zero tariff’’ policy allowing all three types of taxes to be exempted.

Accordingly, the tax cost of importing yachts could be reduced by around 38% in the future and the total cost of yacht imports will be reduced by a significant amount. This tax reduction is expected to directly drive the growth of the yacht industry as consumers can purchase imported yachts at lower prices, which can further stimulate the demand for imported yachts in Hainan. Due to complicated procedures and processes of purchasing yachts directly from the manufacturer, individual end-users as well as yacht charter or leasing companies will usually purchase yachts from yacht dealers rather than the manufacturers, thus promoting the development and market demand of yacht dealers such as the Group in the yacht distribution industry.

2) Policy to create supportive environment for players in the yacht industry

In 2019, the Notice on the EstablishmentoftheLeadingGroupofHainan Province to Promote the Development of the Cruise Yacht Industry《 ( 關於成立海南省推進郵輪游艇產業發展領導小組的通知》) was officially released and the Leading Group of Hainan Province to Promote the Development of the Cruise Yacht Industry was formally established by the end of 2019. The policy highlights the importance of the yacht industry in Hainan and indicated that Hainan would be gradually built into an international tourism consumption center for cruise shipsandyachts.Thispolicyisexpectedto stimulate the development of the yacht industry through yacht tourism and further integrate the yacht industry chain in Hainan Province, including yacht design, manufacturing, consumption, maintenance and training. As yacht consumption increases, the demand of yachts in Hainan Province will also increase. A yacht distributor, the Group will play a part in feeding the demand.

In addition, in April 2020, the Hainan government issued the Key Points in Developing Cruise and Yacht Industry in Hainan Province in 2020《 ( 2020年海南省郵輪游艇產業發展要點》) which emphasis on optimizing the planning and layout of the cruise and yacht industry in Hainan Province in April 2020, which includes the compilation of Yacht Industry Development Plan in Hainan Province 《( 海南省游艇產業發展規劃》) which will guide the high-quality development of the cruise and yacht industry, Yacht Marina Layout Plan in Hainan Province《 ( 海南省游艇碼頭布局規劃》) which will promote the integration of port resources and improve the layout of cruise ports and yacht docks, Sanya International Yacht Port Planning《三亞國際游艇港規劃》and Yacht Management Regulations in Hainan Province《 ( 海南省游艇管理條例》) which provide planning basis for cruise and yacht project construction. These are an aimed at optimising the yacht industrial planning and layout of the province and guiding the high-quality

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INDUSTRY OVERVIEW

development of the yacht industry in the province. This will create a good and supportive environment for all players along the industrial value chain of yacht industry, including distributors, like the Group.

2.2 Competitive Landscape

According to Hainan Cruise & Yacht Association, compared with Guangdong Province, Hainan Province has fewer yacht dealers, with less than ten in 2020. All of them are authorised dealers for foreign yacht brands. In terms of the revenue generated from yacht distribution in 2020, Company J generated a revenue of RMB12.3 million while Company K followed closely with a revenue of RMB9.5 million. The following table sets out the top five yacht distributors in Hainan Province in 2020:

Size of Rank Company Name Background Revenue in 2020 Major Brands of Yachts Type of Yachts Sold Yachts Sold (RMB Million) (Feet)

1 Company J Founded in 2012 and headquartered in 12.3 Fourwinns, Wellcraft, Speed boats, sports 25–70 Sanya. Company J’s main business Nautitech, Bavaria, yachts, sailing yachts, includes the distribution of first-hand Yamaha, Seadoo, motor boats, luxury yachts and provision of services Kawasaki, Nautitech yachts covering yacht leasing, yacht maintenance, etc.

2 Company K Founded in 2009 and headquartered in 9.5 Stingray, Nidelv 590 sport, Speed boats, yachts 15–55 Haikou. Company K is a comprehensive Nidelv N39 FLY, yacht enterprise integrating production, Nautique, Scarab sales, training, etc.

3 Company L Founded in 2005 and headquartered in 6.5 Searay, Beneteau Sail, Sailing yachts, luxury 25–90 Sanya. Company L engages in yacht Beneteau Power, yachts leasing, yacht sales, yacht club Lagoon, Monte Carlo operation, sailing cultural event Yachts operations, etc.

4 Company M Founded in 1996 and headquartered in 3.2 Searay, Bayliner, Boston, Yachts, sailing yachts, 20–60 Sanya. Company M mainly distributes Whaler, Meridian, luxury yachts, fishing yachts and fishing boats. Maxum, Trophy boats, speed boats

5 Company N Founded in 2007, headquartered in 2.2 Monterey, Meridian Speed boats, sailing 25–55 Haikou. Company N engages in yacht yachts, yachts sales, yacht leasing, yacht maintenance, driving training, etc.

Source: Frost & Sullivan 3. Yacht industry Overview in Singapore

3.1 Market Overview

As a business center in Southeast Asia and a global wealth center, Singapore has world-class luxury yacht marinas and is the undisputed yacht center in Southeast Asia and an ideal place to purchase and sell yachts. The total number of yachts in Singapore was around 1,200 and the number of berths was approximately 1,090 in 2019. The import value of the yacht industry in Singapore was USD21.6 million in 2019 and is expected to grow at a CAGR of 5.1% from 2020 to 2024. The further development of the yacht industry as well as yacht distribution industry in Singapore would be continuously driven by the following perspectives, including the development of tourism, the large high-net-worth group, related policy support, and long history of events.

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. Development of tourism in Singapore

According to the Singapore Tourism Board (STB), tourism has always been one of Singapore’s economic pillars, and the government attaches great importance to the developmentoftourism.

According to the data from Singapore Department of Statistics (DOS), the number of tourists visiting Singapore increased at a CAGR of 5.8% over the period from 2015 to 2019. Although COVID-19 has restricted global tourists’ movement and has greatly impacted the Singapore tourism industry, the tourism market is expected to recover in the future with the stabilisation of the COVID-19 pandemic. On 11 August 2020, Singapore’s Ministry of Transport began to relax border controls and gradually open travel to those countries with low risk as the number of new cases per day dropped sharply to less than 100 cases per day. Since September 2020, Singapore’s epidemic has been well controlled with less than 40 new confirmed cases per day. As of 5 March 2021, there are only 121 confirmed cases in Singapore, and the number of new confirmed cases per day is gradually decreasing. Under such circumstance, the total number of tourists in Singapore is projected to reach 16.6 million in 2024, at a CAGR of 57.4% over the period from 2020 to 2024. Number of tourists in Singapore (2015–2024E)

2015–2019 2020–2024E Million CAGR5.9% 57.4% 25.0 19.1 20.0 18.5 16.4 17.4 16.4 16.6 15.2 15.6 16.0 15.0

10.0

5.0 2.7

0.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: Singapore Department of Statistics, Frost & Sullivan

According to Frost & Sullivan, yacht tourism is a major tourist activity and form of entertainment in coastal areas and island countries such as Singapore, Malaysia and Indonesia. Many tourists who travel to Singapore may either rent yachts from local yacht rental companies for leisure trips or participate in yacht tours with yacht tour companies. As a result, there are many yacht tourism companies and local yacht rental companies in Singapore that provide these services to tourists. Based on the above, an increase in the number of tourists in Singapore, which is projected at a CAGR of 57.4% between 2020 and 2024, will in turn drive the total demand for yachts used in tourism in Singapore accordingly.

Further, Singapore has a number of world-class luxury yacht marinas, along with services and supporting facilities essential for yachts, including replenishment of fuel, providing supplies, and maintenance of yachts. These marinas and supporting facilities support the development of yacht-related business such as yacht tour companies and yacht rental companies. Singapore’s yacht tourism mainly sail around the waters of Sentosa, and may also cruise to surrounding countries such as Indonesia, Malaysia, and Thailand, therefore, potential demand from these neighboring countries will also contribute to the expected growing demand for yachts in Singapore.

As a yacht trading center in Southeast Asia, Singapore has always been active in yacht trading, where many high-quality yacht products and dealers are gathered, thus attracting customers from neighboring countries to purchase yachts in Singapore. In addition, neighboring countries such as Indonesia impose higher taxes on luxury goods such as yachts, which makes consumers choose to buy yachts in Singapore instead.

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Further, the development of Malaysia and Indonesia’s tourism will drive the demand for yachts from Singapore thereby driving the yacht industry. The tourism industry has been one of the major developments for both Malaysia and Indonesia, and has also become a focal point each government pays close attention to. For example, the Malaysian government has launched Integrated Promotion Plan for Malaysian Tourism while the Indonesian Tourism Ministry has targeted a revenue growth of approximately 9.9% from the tourism industry from 2018 to 2019. As mentioned above, yacht tourism is a popular tourist activity for coastal island countries such as Malaysia and Indonesia, therefore yacht sightseeing tours have developed as an important part of the tourism industry. Tourists’ demand for sightseeing on yachts is constantly increasing, generating good market prospects for the yacht charter industry in Malaysia and Indonesia. Since the Group’s customers are not only high-net-worth individuals, but also commercial entities, including companies engaged in yacht charter segment, the increase of yacht charter demand in neighbouring regions such as Malaysia and Indonesia will stimulate the purchase demand of yacht charter companies for yachts in Singapore, the yacht trading center, which in turn, is expected to provide the Group with more potential purchasers.

. Large high-net-worth group and high purchasing power

Despite the slowdown in economic growth in the last few years, income per capita in Singapore is still ranked ninth globally at USD5,783 per year in 2020 which is indicative of high purchasing power.

High-net-worth businessmen as well as part of the middle class including but not limited to lawyers, doctors and captains are the main target customers for medium and large yachts as they use yachts for business banquets or to satisfy their personal high- end leisure and entertainment. According to the Wealth Report published by Knight Frank in 2020, the number of ultra-high net worth individuals worth over USD30 million in Singapore, reached more than 3,000, which indicates that Singapore has a large high-net-worth population, providing a large potential customer base. Under such circumstance, the demand for yachts in Singapore is expected to expand in the future.

. Policy support from the government

Policy to exempt the tax of yacht imports

Tax reduction tends to offer a comparatively more direct influence on the growth of the yacht industry. According to Inland Revenue Authority of Singapore, Singapore is a free port with visitor-friendly regulations, where more than 99% of all imports into Singapore enter the country duty-free, and tax is only imposed on limited groups of products such as spirits and tobacco. Yachts purchased in Singapore will be cheaper compared with other non-free-port neighboring countries such as Indonesia, where the tax on luxury products such as yachts, is quite high being approximately 75%. The tax reduction provides an incentive for neighboring countries to purchase yachts from Singapore and the demand from these neighboring countries will drive the increase in Singapore’s yacht demand.

. Long history of influential events

Established in 2011, the Singapore Yacht Show (SYS) is Asia’s premier yacht and boat leisure and entertainment luxury exhibition. It is known as the top yacht festival in Asia and has the full support of the yacht industry in the Asia-Pacific region and the Singapore Tourism Board. The Singapore Yacht Show accumulates Asia’s high-net- worth individuals, world’s best yacht builders, yacht brokers as well as luxury brands to deliver a world-class yacht show, which rapidly gains the popularity as the foremost yachting showcase in the APAC and enlarges the downstream customer pool.

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3.2 Competitive Landscape

According to Frost & Sullivan, Singapore does not have many yacht dealers, with even less than ten in 2020. All of them are authorised dealers for foreign yacht brands. The following table demonstrates the top five yacht distributors in Singapore in 2020:

Size of Rank Company Name Background Revenue in 2020 Major Brands Type of Yachts Sold Yachts Sold (SGD Million) (ft)

1 Company O Founded in 1984. Company O is a 21.0 Sanlorenzo, Bluegame, Superyachts, luxury 18.5–210 regional subsidiary of a Hong Kong Fairline Yachts, yachts, yachts, sailing yacht distributor in Singapore which is Beneteau, Lagoon, yachts, fishing boats recognized as a leading new yacht sales, Aquila Power Catamaran brokerage, and service company. &CNB

2 Company P Founded in 1995. Company P is one of 19.2 Princess, Burgess, SACS, Superyachts, luxury 34–95 Asia’s largest and most reputable yacht Jeanneau Yachts yachts, yachts importation, distribution, and after- sales service organizations.

3 Company Q Founded in 2008. Company Q is a luxury 10.3 Ferretti, Riva, Pershing, Superyachts, luxury 20–120 marine retailer. It distributes marine Custom line, Boston yachts, yachts, fishing and automotive materials. Whaler boats

4 The Group’s The Group’s Singapore Subsidiary is 7.2 Azimut Yachts, luxury yachts, 34–114 Singapore founded in 2018 and is a regional motor yachts subsidiary subsidiary of the Company. Its major business covers sales of first-hand luxury yachts, second-hand luxury yachts, and provision of value-added services such as maintenance and repair services, sales of special parts and accessories, and yacht licensing services.

5 Company S Founded in 2013. Company S has been in 6.5 Moana Yachts, Tethys Speed boats, yachts, 25–55 the yacht brokerage business for 25 Yachts, Jet Capsule, luxury yachts years. OXE Diesel, Gulf Craft, Bavaria, Jet Capsules and Moana Yachts

Source: Frost & Sullivan 4. Yacht industry in Taiwan

4.1 Market Overview

The yacht industry in Taiwan is known for its yacht building and manufacturing. The yacht manufacturing industry in Taiwan could be traced back to the 1960s when the industry was developed in a small scale as an extension of the established fishing boat construction industry. With more than 40 years of development, the yacht manufacturing market in Taiwan has been featured with its product craftsmanship and quality, and flexible capability of order customisation. Currently, Taiwan’s yacht manufacturing industry is mainly located in Kaohsiung, the largest city in Southern Taiwan. According to Frost & Sullivan, the United States is currently the largest market for yacht industry in Taiwan and the market size of yacht industry in Taiwan is expected to maintain a stable growth in the foreseeable future, increasing at a CAGR of approximately 5.0% from 2021 to 2024, which is upheld by the expected stable demand and the government’s initiative to promote the yacht industry by enlarging bay area in Taiwan.

4.2 Competitive Landscape

The yacht distribution market in Taiwan was concentrated and mainly controlled by a few sizable distributors. According to Yacht Industry Development Association of Fujian, there were no more than ten yacht distributors in Taiwan in the year of 2019. All of them are authorized dealers for foreign yacht brands. Based on their revenue,

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Company T generated a revenue of approximately NT$39.3 million from yacht distribution in 2020. The following table demonstrates the top five yacht distributors in Taiwan in 2020:

Size of Rank Company Name Background Revenue in 2020 Major Brands Type of Yachts Sold Yachts Sold (NT$ Million) (ft)

1 Company T Established in 1984 and headquartered in 39.3 Sanlorenzo, Bluegame, Luxury yachts, 18.5-210 Taipei. Company T is a regional Fairline, Lagoon, CNB, superyachts, sport subsidiaryofaHongKongyacht Beneteau, Aquila yachts, sailing yachts distributor.

2 The holding The holding company of the Group’s TW 26.6 Azimut, Rise, Dehler, Yachts, sailing yachts 11–80 company of sub-dealer is established in 2004. Swan, Moody, Bavaria, the Group’s Company U is a luxury yacht Hanse, TW sub-dealer corporation, which has offices in Taipei and Taichung. It engages in yacht berth leasing, yacht sales, etc.

3 Company V Established in 1965. Company V is the 8.2 Princess Yachts Luxury yachts, 40–132 exclusive agent of British Princess superyachts Yachts under the LVMH Group in the Taiwan region.

4 Company W Established in 2018 and headquartered in 4.1 Nimbus Yachts Motor yachts 32–35 Kaohsiung. Company W is a yacht manufacturer, and also engages in yacht distribution.

5 Company X Established in 2002 and headquartered in 2.8 Sunseeker, Searay, Sport yachts, luxury 18–62 Kaoishung. Company S is a yacht dear Astondoa, Sessa Yachts, yachts, yachts for many western yacht brands in the Rodman Polyships, Taiwan region. Parker Boat, Wellcraft Boat

Source: Frost & Sullivan 5. Analysis on the Competitive Advantages of the Group

. Good reputation

The Group is the exclusive authorised dealer of Azimut, the No.1 yacht brand worldwide as measured by length built since 2014. Azimut, as one of the world-leading yacht brands, is featured with its products’ stylish design, innovation and quality and represents the luxury yacht image globally. Being the exclusive distributor of the world No.1 yacht brand in, among others, Guangdong and Singapore has rendered the Group’s competitive strengths in terms of suppliers, which has helped the Group to sustain continuous attractiveness to its potential customers. In the future, multiple office link between Hong Kong, Guangdong Province, Hainan and Singapore can further improve the Group’s reputation and brand image since the Group can easily meet the demand and needs of its clients in different locations.

. Strong relationship with suppliers and customers

The Group has developed stable cooperation relationship with both its suppliers and customers. For suppliers, the Group has become the exclusive authorised dealer of Azimut, an Italian luxury motor yacht manufacturer, in Hong Kong, Taiwan, Guangdong Province in the PRC, Macau and Singapore. Besides, the Group has also been the exclusive authorised dealer of Absolute, an Italian luxury motor yacht manufacturer supplying luxury motor yachts and sports yachts, in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam. Such dealerships will be extended in the future by virtue of the good performance displayed by the Group since their cooperation, including its sales performance, marketing promotion, after- sales service provision, relationship maintenance and so forth. Additionally, the Group

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INDUSTRY OVERVIEW

provides considerate services to its customers in terms of product recommendation, individualised customer experiences and others, which helps the Group to establish stable and good relationship with its downstream customers.

. Experienced team

The management team consists of experienced personnel with extensive experience and knowledge in the yacht industry. The in-depth industry knowledge of the management team has enabled the Group to effectively formulate and implement sound business strategies, carefully evaluate and manage risks, accurately anticipate changes and identify customer demands in the industry and capture market opportunities timely. Meanwhile, the Group has professional teams who take respective responsibilities in sales and marketing, technical support and after-sales services to create luxury and customised experience for customers who expect excellence and value individuality. Additionally, the Group has already built up a sales office in Singapore with 2BY2 Yachts Italia to gain market share and exposure in Singapore. The Group will also establish a sales office in Guangdong Province and Hainan Province, which can help the Group to understand deeply the demands of local customers and develop knowledge of local market that may help the yacht brand owners to conduct brand and product promotions more effectively.

. Localisation

The Group has established a sales office in Singapore with 2BY2 Yachts Italia and will also establish a local sales office in Hainan and Guangdong with a local showroom in each area. In line with the establishment of the sales office and local showroom, a professional local sales and marketing team in each area will gradually be formed. A professional local sales and marketing team in each area can bring excellent and comprehensive service experience to the potential customers by demonstrating the yachts in the local showroom, so customer can physically try the yachts and relevant facilities instead of only reading catalogues and seeing figures, which improves the purchasing experience of potential customers, thus attracting customers to buy yachts from the Group. For the existing yacht owners, local service teams can provide professional and prompt technical services to them, which will further contribute to build the Group’s brand image and improve the sales in the local area. Impact of COVID-19 on the Yacht Industry

The outbreak of COVID-19 affects the consumption patterns of consumers as they are more cautious on expenditure during such period due to the uncertainties of market economy in the future and unexpected health event. This change in consumers’ purchasing habits is considered temporary. On the other hand, due to the outbreak of COVID-19, The Singapore Yacht Show, which was initially set to take place on 19 to 22 March 2020, was postponed to April 2021. The Taiwan International Boat Show, which was originally scheduled to be held during 5 to 8 March, has been postponed to 2022. As such, there was an impact of COVID-19 on yacht sales as yachts demonstration is important in the sales of yachts and customers are more inclined to purchase a yacht if they could physically access to the yacht rather than merely reading through the product brochure.

Besides, in order to prevent the further spread of COVID-19, members of the public are highly recommended to isolate themselves at home as they are advised to keep a physical distance from one another. Given the extended quarantine periods, people are keen to spend time outdoors. Under the current COVID-19 conditions spending personal time alone on a yacht will provide the safe environment as well as minimising the need to go to public areas where the risk is higher. In addition, logistics and transportation related business have been put to a temporary halt, which delayed the delivery of goods throughout the world including yachts and related components and further lead to the delays in yacht

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INDUSTRY OVERVIEW production as well. As such, the yacht industry is likely, to some extent, deteriorate in 2020 due to the occurrence of COVID-19 globally, including the yacht market in Taiwan, Singapore, Hong Kong and the PRC.

BasedonthelatestinformationfromtheWorldHealthOrganization(the‘‘WHO’’), since October 2020, the number of newly confirmed cases of COVID-19 in a single day in the world has repeatedly set the highest record since the outbreak. However, due to the strict prevention and control measures introduced by governments around the world, the world epidemic has been gradually brought under control. And with the introduction and vaccination of the COVID-19 vaccine in many countries since the end of 2020, the number of new confirmed cases and deaths in the world continues to decline, and the overall epidemic situation is obviously improving. In the future, as people around the world are vaccinated, the spread of the virus is anticipated eventually to be controlled. The demand for yachts is expected to rebound once COVID-19 is under more control. Supply analysis Azimut, Ferretti Group, Sanlorenzo, Feadship and Lu¨rssen have ranked the top 5 positions in the global yacht market in terms of the total length built since 2014. According to the Global Order Book (GOB) which is the superyacht industry’s trusted annual health check, in 2019, these top 5 yacht manufacturers are projected to produce yachts with total length 9,880 of 3,535, 3,061, 1,216, 1,037 and 1,031 meters, respectively. Azimut successively ranked first from 2014 to 2019. According to Azimut’s annual report, in 2019, Azimut achieved sales revenue of more than EUR900 million. Founded in 1969 and officially introduced to Hong Kong in 1987, Azimut has been globally recognised as one of the foremost builders of yachts and super yachts and was awarded the ‘‘Best Brand Presence in Asia’’ for the Boating Awards in 2017, 2018 and 2019. In addition, several awards honoured to Azimut, including ‘‘Shipyard of the Year’’, ‘‘Best Interior Design in the Category’’ and ‘‘Best Innovative Project’’, in the 2018 World Yacht Trophies in Cannes. Azimut provides 5 product lines, namely Flybridge Collection, S Collection, Magellano Collection, Atlantis Collection and Grande Collection with broad functionalities from sports, recreation to business. Azimut’s products are known for being stylish, innovative and high-quality. Absolute is a renowned Italian luxury motor yacht manufacturer and was introduced to Hong Kong in 2014. Its products are featured with high quality and innovation, operation efficiency and attractive appearance. Several creditable international awards were honoured to Absolute from 2010 to 2019 including design awards, interior layout and innovation and ‘‘Best European Motor Yacht of the Year’’ in 2017. Meanwhile in 2019, Absolute achieved sales revenue of more than EUR70 million based on Absolute’s annual report. Introduction of yacht manufacturing market in Italy

Market size of yacht manufacturing market in Italy

The major suppliers for yacht dealers in Hong Kong are headquartered in Italy. The yacht manufacturing market in Italy has experienced continuous growth over the past five years from 2015 to 2019, rising from EUR1,810.0 million in 2015 to EUR3,008.0 million in 2019, representing a CAGR of 13.5%. As the largest yacht manufacturing country worldwide, the Italian yacht manufacturing market is featured with its advanced production technology, trendy design and elaborately-manufactured products with high quality.

The prominence of the Italian yacht industry has attracted a significant number of buyers and traders from all over the world. The majority of Italian yachts were exported to foreign countries, ranging from nearby regions such as France, Malta and other Asian regions such as Hong Kong. With the rapid economic development in some developing countries along with the expected growing number of high net worth people, the Italian yacht manufacturing market is expected to exhibit growth over the next several years.

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INDUSTRY OVERVIEW

Market size of the yacht distribution market in Italy, 2015–2024E

2015–2019 2020–2024E

CAGR 13.5% 8.1% EUR million 5,000.0 4,316.0 4,500.0 4,026.0 3,736.0 4,000.0 3,446.0 3,500.0 3,008.0 3,156.0 3,000.0 2,549.2 2,500.0 2,146.7 2,250.4 1,810.0 2,000.0 1,500.0 1,000.0 500.0 0.0 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E Source: Frost & Sullivan Key drivers for yacht manufacturing market in Italy . Continuous demand for yachts As the leading producer of yachts worldwide, Italy holds strong market position in the yachts manufacturing chain globally, with an approximately 12.8% market share in terms of export value. Unites States remained the largest importer of yachts from Italy over the past five years from 2014 to 2018, the demands from which has been supporting the yachts manufacturing market in Italy. Such sustained demands for yachts are closely related to the stable macroeconomic development in the United States whose nominal GDP and household disposable income have maintained consistent growth respectively in the past five years, and the United States is home to a large number of high net worth individuals, enjoying the largest market for millionaires in 2018. . Sound and robust yacht system Having a long history of development, the yacht distribution market in Italy has already formed a comparatively mature system where related manufacturers, associations and official departments are well linked with each other. For instance, the Italian Marine Industry Association has been promoting the yacht sector in Italy by maintaining active relationships with official departments to obtain supportive initiatives such as the reform of the Italian Nautical Code (Codice della Nautica). It aims to simplify the procedures in registering a boat or a yacht in Italy by organizing international boat show that is dedicated to expanding the Italian yacht brands’ influence and appeal, thereby further extending the sales network globally. Future trends for yacht manufacturing market in Italy . Product innovation To cater for diversified demands from various customer groups across the world, Italian yacht manufacturers are expected to keep focusing on product innovation and yacht design. For instance, as for the interior layout, customer groups from Asia may desire for extra rooms that could accommodate a series of entertainment facilities such as karaoke system, projection screen and so forth. Additionally, wider glazing and well-designed fly deck are expected to enjoy the sunlight and sea views. Moreover, yacht manufacturers in Italy will also spare no efforts on research and development on engine efficiency to reduce fuel consumption which is one of the most attentive appeals to customers. . Super yacht becoming the new growing point The increasing demand for a family tour that is away from crowd and noisy confusion of life are calling for a yacht with greater space that could accommodate a tribe of members for family gathering simultaneously. Also, a super yacht that is large enough to host business banquets or parties is also requested by downstream customers. The aforementioned potential demands for super yachts is mainly driven by the notable growth in the number of high net worth individuals whose population has realized a year- over-year growth of nearly 6.6% during 2018 and 2019 globally. As Italian yacht brands have already achieved popularity worldwide, it is expected that more Italian manufacturers will focus on the development of super yachts to satisfy unmet demands, which may invigorate the entire yacht distribution market in Italy.

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REGULATORY OVERVIEW

HONG KONG LAWS AND REGULATIONS

This section sets forth a summary of the laws and regulations applicable to our business in Hong Kong. As this is a summary, it does not contain detailed analysis of the Hong Kong laws which are relevant to the business of our Group.

Merchant Shipping (Local Vessels) Ordinance (Chapter 548 of the laws of Hong Kong) (the ‘‘Merchant Shipping (Local Vessels) Ordinance’’)

Merchant Shipping (Local Vessels) Ordinance is to provide for the regulation and control of local vessels (本地船隻) in Hong Kong or in the waters of Hong Kong and for other matters affecting local vessels, including their navigation and safety at sea (whether within or beyond the waters of Hong Kong).

Section 11 of the Merchant Shipping (Local Vessels) Ordinance requires that every local vessel shall be certificated, failing which the owner of the local vessel, his agent and the coxswain of the vessel commit an offence and each of them is liable on conviction to a fine at HK$25,000 and to imprisonment for one year.

Section 12 of the Merchant Shipping (Local Vessels) Ordinance requires that the owner of a local vessel shall be (a) an individual who holds a valid identity card and who is ordinarily resident in Hong Kong; or (b) a company or registered non-Hong Kong company as defined by section 2(1) of the Companies Ordinance.

Section 13 of the Merchant Shipping (Local Vessels) Ordinance requires that every certificated local vessel shall be licensed, failing which the owner of the local vessel, his agentandthecoxswaincommitanoffenceandeachofthemisliableonconvictiontoafine at HK$25,000 and to imprisonment for one year.

Pursuant to section 14 of the Merchant Shipping (Local Vessels) Ordinance (a) no unlicensed local vessel shall carry any passenger; (b) no licensed vessel shall carry any passenger unless the conditions of its Operating Licence (to be defined below) permit the carriage of passenger; and (c) no licensed vessel shall carry more passengers and crew than may lawfully be carried under the conditions of its Operating Licence (to be defined below).

Pursuant to section 16 of the Merchant Shipping (Local Vessels) Ordinance, the Marine Department shall cause examinations to be conducted for the grant of local certificates of competency required to be held by persons employed as coxswains, engine operators or pleasure vessel operators on vessels, and shall appoint examiners for that purpose.

Sections 23C and 23D of the Merchant Shipping (Local Vessels) Ordinance are about the compulsory third party risks insurance of a local vessel.

Section 23C of the Merchant Shipping (Local Vessels) Ordinance requires that no owner, charterer or coxswain of a local vessel may use, or cause or permit any other person to use, the vessel in the waters of Hong Kong unless there is in force in relation to the use of the vessel by such owner, charterer or coxswain or that other person, as the case may be,

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REGULATORY OVERVIEW such policy of insurance as complies with section 23D of the Merchant Shipping (Local Vessels) Ordinance which sets out the requirements in respect of such policy of insurance, including but not limited to (a) such policy is issued by an authorised insurer; (b) such policy is governed by the laws of Hong Kong; and (c) such policy insures such person(s) as specified in such policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of local vessels in the waters of Hong Kong.

Sections 47 and 51 of the Merchant Shipping (Local Vessels) Ordinance are about the pollution control of a local vessel.

Pursuant to section 47 of the Merchant Shipping (Local Vessels) Ordinance, if any oil or mixture containing oil is discharged into the waters of Hong Kong, then (a) the person by whom the oil or mixture containing oil is so discharged or caused to be discharged; and (b) if the discharge is from a local vessel, the owner and the coxswain of the vessel (subject to certain defences such as for the purpose of securing the safety of the vessel or saving life, or such discharge is caused by the act or omission of other person(s) under certain circumstances), commit an offence and is liable on conviction to a fine of HK$200,000.

Section 51 of the Merchant Shipping (Local Vessels) Ordinance requires that no local vessel in the waters of Hong Kong shall emit dark smoke for three minutes or more continuously at any one time (unless the emission of dark smoke in circumstances affecting the safety of life or of the vessel), failing which the owner of the local vessel, his agent and the coxswain of the vessel each commits an offence and is liable (a) to a fine at HK$10,000, if the person has never committed the offence in relation to the vessel; or (b) to a fine at HK$25,000, if the person has previously committed the offence in relation to the vessel.

Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation (Chapter 548D of the laws of Hong Kong) (the ‘‘Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation’’)

The certificate of ownership (the ‘‘Certificate of Ownership’’) and operating licence (the ‘‘Operating Licence’’) both issued by the Marine Department shall be obtained prior to operating a vessel in the waters of Hong Kong.

Pursuant to section 11(2) of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation, the Certificate of Ownership issued by the Marine Department in respect of a local vessel to the owner of the vessel shall specify the class and type of that vessel.

Pursuant to Schedule 1 of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation, there are four classes of local vessels and for each class, there are a number of types of local vessels:

(a) Class I has six types of local vessels such as ferry vessel, floating restaurant and launch;

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REGULATORY OVERVIEW

(b) Class II has 22 types of local vessels such as crane barge, dangerous goods carrier and dredger;

(d) Class IV has three types of local vessels which are auxiliary powered yacht, cruiser andopencruiser.

During the Track Record Period and up to the Latest Practicable Date, all the yachts sold by us belongs to Class IV local vessels under the types of cruiser and open cruiser.

Section 6 of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation requires that a Class IV vessel shall not be used otherwise than by the owner exclusively for pleasure purposes, or if it has been let to any person, by that person exclusively for pleasure purposes, failing which and if without reasonable excuse, the owner of the vessel, his agent and the coxswain each commits an offence and is liable on conviction to a fine at HK$10,000.

Pursuant to section 15 of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation, the Marine Department may on application, and subject to certain considerations including but not limited to the condition of the vessel so far as it is relevant to seaworthiness or to any risk of pollution, and the safety, health and welfare of persons employed or engaged in any capacity on board the vessel, issue the Operating Licence.

Pursuant to sections 16 and 17 of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation, the licensing period of the Operating Licence shall be at the maximum of 12 months and is renewable.

Pursuant to section 18 of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation, the Marine Department may attach to the Operating Licence in respect of a local vessel any conditions (e.g. crew requirement and passenger carrying capacity) or any restrictions that the vessel concerned may only ply within certain specified sheltered waters, typhoon shelters or other areas.

Pursuant to section 47 of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation, a Class IV vessel or an ancillary vessel of a Class IV vessel that is more than three metres in length overall or is fitted with engines of more than three kilowatts total propulsion power shall not be underway unless there is on board a person in charge of the vessel who is the holder of a local certificate of competency as a pleasure vessel operator, or any equivalent certificate as specified in the Merchant Shipping (Local Vessels) (Local Certificates of Competency) Rules issued by the Marine Department.

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REGULATORY OVERVIEW

Merchant Shipping (Local Vessels) (Safety and Survey) Regulation (Chapter 548G of the laws of Hong Kong) (the ‘‘Merchant Shipping (Local Vessels) (Safety and Survey) Regulation’’)

Pursuant to sections 15 and 16 of the Merchant Shipping (Local Vessels) (Safety and Survey) Regulation, a Class IV local vessel shall not be operated unless it is in force:

(a) a certificate of inspection (the ‘‘Certificate of Inspection’’) (for vessels (i) licensed to carry not more than 60 passengers but is let for hire or reward; or (ii) of not less than 24 metres in length, of not more than 150 gross tonnage and licensed for the first time on or after 1 August 2020); or

(b) a certificate of survey (the ‘‘Certificate of Survey’’) (for vessels (i) licensed to carry more than 60 passengers; (ii) of not less than 24 metres in length, of more than 150 gross tonnage and licensed for the first time on or after 1 August 2020; (iii) of more than 150 gross tonnage and licensed before 1 August 2020; or (iv) of novel construction), failing which and without reasonable excuse, the owner of the Class IV local vessel concerned, his agent and the coxswain each commits an offence and is liable on conviction to a fine at HK$10,000 and to imprisonment for six months.

For a Class IV vessel exclusively for pleasure purpose and is not let for hire or reward, and is not vessel (i) carries more than 60 passengers; (ii) of more than 150 gross tonnage; and (iii) of novel construction, the hull, machinery and electrical installations should refer to the standards in Chapter III of the Code of Practice for Safety Standards for Class IV Vessels issued by the Marine Department, but is not required approval of plan, survey and issuance of Certificate of Survey or Certificate of Inspection.

Pursuant to section 18 of the Merchant Shipping (Local Vessels) (Safety and Survey) Regulation, a Certificate of Inspection or Certificate of Survey shall only be issued in respect of a local vessel if the vessel is fit for the service intended and in good condition.

Pursuant to sections 19, 24 and 27 of the Merchant Shipping (Local Vessels) (Safety and Survey) Regulation, the Certificate of Inspection (to be issued by the Marine Department or a competent surveyor (e.g. Hong Kong Marine Department authorised surveyor)) or the Certificate of Survey (to be issued by the Marine Department) are (subject to circumstances stated under section 27 thereof) in general valid for 12 months.

Merchant Shipping (Local Vessels) (General) Regulation (Chapter 548F of the laws of Hong Kong) (the ‘‘Merchant Shipping (Local Vessels) (General) Regulation’’)

Section 9 and Schedule 2 of the Merchant Shipping (Local Vessels) (General) Regulation are about the maximum permitted speed of a local vessel when underway in the waters of Hong Kong.

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REGULATORY OVERVIEW

Pursuant to section 84 of the Merchant Shipping (Local Vessels) (General) Regulation, except with the written permission of the Marine Department, no drag, grappling or other device shall be used by any person on a local vessel for the purpose of lifting any article or thing other than fish or shellfish from the seabed.

Pursuant to section 87 of the Merchant Shipping (Local Vessels) (General) Regulation, except with the permission of the Marine Department, no person may hold or organise in the waters of Hong Kong a specified racing event (e.g. boat race) which interferes with, or is likely to interfere with, the navigation of any vessel or the safety of any person in those waters.

Merchant Shipping Ordinance (Chapter 281 of the laws of Hong Kong) (the ‘‘Merchant Shipping Ordinance’’)

Pursuant to section 3 of the Merchant Shipping Ordinance, every ship trading outwards from Hong Kong or trading or being used for any commercial purpose in the waters of Hong Kong must be provided with (a) a certificate of registry or certificate of provisional registry granted under the Merchant Shipping (Registration) Ordinance; (b) a certificate of registry or other document granted in a place outside Hong Kong and similar or equivalent in effect to a certificate referred to in subparagraph (a); or (c) a Certificate of Ownership.

Section 108 of the Merchant Shipping Ordinance provides that where under the Merchant Shipping Ordinance it is enacted that, under certain conditions, a ship shall not leave the waters of or any port of Hong Kong, the Marine Department may under such conditions detain the ship until it is satisfied that the provisions of the law have been fulfilled.

Merchant Shipping (Registration) Ordinance (Chapter 415 of the laws of Hong Kong) (the ‘‘Merchant Shipping (Registration) Ordinance’’)

Section 7 of the Merchant Shipping (Registration) Ordinance provides that the registrar of ships shall keep a register of ships registered or provisionally registered under the Merchant Shipping (Registration) Ordinance. It also provides that the register of ships shall contain such particulars in respect of ships, owners and their respective interests in ships, demise charterers, mortgagees and representative persons as are prescribed.

Section 11 of the Merchant Shipping (Registration) Ordinance provides that a ship is registrable if, among others, a majority interest in the ship is owned by one or more qualified persons (e.g. an individual who holds a valid identity card and who is ordinarily resident in Hong Kong; or a body corporate incorporated in Hong Kong) and a representative person (e.g. a qualified person who is also the owner of the ship) is appointed in relation to the ship.

Section 24 of the Merchant Shipping (Registration) Ordinance provides that upon the registration of a ship, the registrar of ships shall grant a certificate of registry, in the specified form, containing the particulars relating to the ship entered in the register of ships.

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REGULATORY OVERVIEW

The registration of a ship on the Hong Kong register of ships is entirely on a voluntary basis. Once a ship is registered in Hong Kong (a) the ship can enjoy the benefits in connection with flying Hong Kong flag; (b) the Government will exercise its jurisdiction over the ship; and (c) the ship’s title and mortgage registered on the Hong Kong register of ships are binding under the Merchant Shipping (Registration) Ordinance.

Section 45 of the Merchant Shipping (Registration) Ordinance provides that where two or more mortgages are registered in respect of the same ship, priority among the mortgagees shall be in accordance with the order of registration of the mortgages, irrespective of the date upon which they were made or executed, and notwithstanding any express, implied or constructive notice.

Merchant Shipping (Local Vessels) (Amount of Insurance Cover) Notice (Chapter 548K of the laws of Hong Kong) (the ‘‘Merchant Shipping (Local Vessels) (Amount of Insurance Cover) Notice’’)

Section 4 of the Merchant Shipping (Local Vessels) (Amount of Insurance Cover) Notice sets forth the minimum amounts for liability cover for the compulsory third party risks insurance of local vessels. For Class IV vessels, such minimum amount is:

(a) HK$10,000,000 for a certificated local vessel that is permitted to carry more than 12 passengers under the conditions of its Operating Licence (other than the Class IV vessel not let for hire or reward); and

(b) HK$5,000,000 for (i) a certificated local vessel that is permitted to carry 12 or less than 12 passengers under the conditions of its Operating Licence; or (ii) a Class IV vessel not let for hire or reward.

Merchant Shipping (Collision Damage Liability and Salvage) Ordinance (Chapter 508 of the laws of Hong Kong) (the ‘‘Merchant Shipping (Collision Damage Liability and Salvage) Ordinance’’)

Section 9 of the Merchant Shipping (Collision Damage Liability and Salvage) Ordinance incorporates the International Convention on Salvage 1989 as a part of the Hong Kong laws.

Pursuant to section 3 of the Merchant Shipping (Collision Damage Liability and Salvage) Ordinance, where by the fault of two or more vessels, damage or loss is caused to one or more of those vessels, to their cargoes or freight, or to any property on board, the liability to make good the damage or loss shall be in proportion to the degree in which each vessel was in fault.

Pursuant to section 4 of the Merchant Shipping (Collision Damage Liability and Salvage) Ordinance, where loss of life or personal injuries are suffered by a person on board a vessel owing to the fault of that vessel and of any other vessel or vessels, the liability of the owners of the vessels shall be joint and several.

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REGULATORY OVERVIEW

Sale of Goods Ordinance (Chapter 26 of the laws of Hong Kong) (the ‘‘Sale of Goods Ordinance’’)

The Sale of Goods Ordinance governs, among other things, the scope of certain implied terms or conditions and warranties generally relating to the safety and suitability of goods supplied under a contract for the sale of goods in Hong Kong. Warranties relating to the safety and suitability of goods supplied include that goods for sale must be of merchantable quality and as such are, among other things, free from defects, safe and durable. A breach of warranty by the seller under the Sale of Goods Ordinance may entitle the buyer to reject the goods, set up against the seller a diminution or extinction of the price or maintain an action against the seller for damages.

Factories and Industrial Undertakings Ordinance (Chapter 59 of the laws of Hong Kong) (the ‘‘Factories and Industrial Undertakings Ordinance’’)

The Factories and Industrial Undertakings Ordinance provides for the safety and health protection to workers in an industrial undertaking. Under the Factories and Industrial Undertakings Ordinance, it is the duty of a proprietor (including person for the time being having the management or control of the business carried on in such industrial undertaking and also the occupier of any industrial undertaking) of an industrial undertaking to take care of, so far as is reasonably practicable, the health and safety at work of all persons employed by him at the industrial undertaking. The duties of a proprietor extend to include:

— providing and maintaining plant and work systems that do not endanger safety or health;

— making arrangement for ensuring safety and health in connection with the use, handling, storage and transport of articles and substances;

— providing all necessary information, instruction, training, and supervision for ensuring safety and health;

— providing and maintaining safe access to and egress from the workplaces; and

— providing and maintaining a safe and healthy work environment.

A proprietor of an industrial undertaking who contravenes these duties commits an offence and is liable to a fine of HK$500,000. A proprietor who contravenes these duties willfully and without reasonable excuse commits an offence and is liable to a fine of HK$500,000 and to imprisonment for six months.

Occupational Safety and Health Ordinance (Chapter 509 of the laws of Hong Kong) (the ‘‘Occupational Safety and Health Ordinance’’)

The Occupational Safety and Health Ordinance provides for the safety and health protection to employees in workplaces, both industrial and non-industrial.

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REGULATORY OVERVIEW

Employers must as far as reasonably practicable ensure the safety and health in their workplaces by:

— providing and maintaining plant and work systems that do not endanger safety or health;

— making arrangement for ensuring safety and health in connection with the use, handling, storage or transport of plant or substances;

— providing all necessary information, instruction, training, and supervision for ensuring safety and health;

— providing and maintaining safe access to and egress from the workplaces; and

— providing and maintaining a safe and healthy work environment.

Failure to comply with the above requirements constitutes an offence and the employer is liable on conviction to a fine of HK$200,000. An employer who fails to do so intentionally, knowingly or recklessly commits an offence and is liable on conviction to a fine of HK$200,000 and to imprisonment for six months.

The Commissioner for Labour may also issue improvement notices against non- compliance of the Occupational Safety and Health Ordinance or the Factories and Industrial Undertakings Ordinance (Chapter 59 of the laws of Hong Kong) or suspension notice against activity of workplace which may create imminent hazard to the employees. Failure to comply with such notices constitutes an offence punishable by a fine of HK$200,000 and HK$500,000 respectively and imprisonment of up to 12 months.

Employees’ Compensation Ordinance (Chapter 282 of the laws of Hong Kong) (the ‘‘Employees’ Compensation Ordinance’’)

The Employees’ Compensation Ordinance establishes a no-fault and non-contributory employee compensation system for work injuries and lays down the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases.

Under the Employees’ Compensation Ordinance, if an employee sustains an injury or dies as a result of an accident arising out of and in the course of his employment, his employer is in general liable to pay compensation even if the employee might have committed acts of faults or negligence when the accident occurred. Similarly, an employee who suffers incapacity or dies arising from an occupational disease is entitled to receive the same compensation as that payable to employees injured in occupational accidents.

According to section 15(1A) of the Employees’ Compensation Ordinance, employer shall report work injuries of its employee to the Commissioner for Labour not later than 14 days after the accident.

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REGULATORY OVERVIEW

According to section 40 of the Employees’ Compensation Ordinance, all employers (including contractors and subcontractors) are required to take out insurance policies to cover their liabilities both under the Employees’ Compensation Ordinance and at common law for injuries at work in respect of all their employees (including full-time and part-time employees). Under Section 40(1B) of the Employees’ Compensation Ordinance, where a main contractor has undertaken to perform any construction work, it may take out an insurance policy for an amount not less than HK$200 million per event to cover his liability and that of its subcontractor(s) under the Employees’ Compensation Ordinance and at common law. Where a main contractor has taken out a policy of insurance under Section 40(1B) of the Employees’ Compensation Ordinance, the main contractor and a subcontractor insured under the policy shall be regarded as having complied with Section 40(1) of the Employees’ Compensation Ordinance.

An employer who fails to comply with the Employees’ Compensation Ordinance to secure an insurance cover commits an offence and is liable on conviction upon indictment to a fine of HK$100,000 and to imprisonment for two years and on a summary conviction to a fine of HK$100,000 and to imprisonment for one year.

Employment Ordinance (Chapter 57 of the laws of Hong Kong) (the ‘‘Employment Ordinance’’)

The Employment Ordinance provides for various employment-related benefits and entitlements to employees. All employees covered by the Employment Ordinance, irrespective of their hours of work, are entitled to basic protection under the Employment Ordinance including, among others, payment of wages (which is defined under the Employment Ordinance to include, among others, remuneration and overtime pay), restrictions on wages deductions and granting of statutory holidays. Employees who are employed under a continuous contract are further entitled to such benefits as rest days, paid annual leave, sickness allowance, severance payment and long service payment.

Occupiers Liability Ordinance (Chapter 314 of the laws of Hong Kong) (the ‘‘Occupiers Liability Ordinance’’)

The Occupiers Liability Ordinance regulates the obligations of a person occupying or having control of premises on injury resulting to persons or damage caused to goods or other property lawfully on the land.

The Occupiers Liability Ordinance imposes a common duty of care on an occupier of premises to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.

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REGULATORY OVERVIEW

Immigration Ordinance (Chapter 115 of the laws of Hong Kong) (the ‘‘Immigration Ordinance’’)

Under the Immigration Ordinance, a person requires a visa/entry permit to work in Hong Kong unless the person has the right of abode or right to land in Hong Kong. Section 17I of the Immigration Ordinance provides that any person who is the employer of an employee who is not lawfully employable commits an offence and is liable to a fine of $350,000 and to imprisonment for three years.

Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the laws of Hong Kong) (the ‘‘Mandatory Provident Fund Schemes Ordinance’’)

Under the Mandatory Provident Fund Schemes Ordinance, employers are required to enroll their regular employees (except for certain exempt persons) aged between at least 18 but under 65 years of age and employed for 60 days or more in a Mandatory Provident Fund (‘‘MPF’’) scheme within the first 60 days of employment.

For both employees and employers, it is mandatory to make regular contributions into a MPF scheme. For an employee, subject to the maximum and minimum levels of income (HK$25,000 and HK$7,100 per month, respectively before 1 June 2014 or HK$30,000 and HK$7,100permonth,respectivelyonorafter1June 2014), an employer will deduct 5% of the relevant income on behalf of an employee as mandatory contributions to a registered MPF scheme with a ceiling of HK$1,250 before 1 June 2014 or HK$1,500 on or after 1 June 2014. Employer will also be required to contribute an amount equivalent to 5% of an employee’s relevant income to the MPF scheme, subject only to the maximum level of income (HK$25,000 per month before 1 June 2014 or HK$30,000 on or after 1 June 2014).

Minimum Wage Ordinance (Chapter 608 of the laws of Hong Kong) (the ‘‘Minimum Wage Ordinance’’)

The Minimum Wage Ordinance provides for a prescribed minimum hourly wage rate (currently set at HK$37.5 per hour) during the wage period for every employee engaged under a contract of employment under the Employment Ordinance (Chapter 57 of the laws of Hong Kong). Any provision of the employment contract which purports to extinguish or reduce the right, benefit or protection conferred on the employee by the Minimum Wage Ordinance is void.

Competition Ordinance (Chapter 619 of the laws of Hong Kong) (the ‘‘Competition Ordinance’’)

The Competition Ordinance, which was entered into force on 14 December 2015 (i) prohibits conduct that prevents, restricts or distorts competition in Hong Kong; (ii) prohibits mergers that substantially lessen competition in Hong Kong; and (iii) provides for incidental and connected matters.

The Competition Ordinance includes the First Conduct Rule which provides that an undertaking shall not make or give effect to an agreement, engage in a concerted practice, or, as a member of an association of undertakings, make or give effect to a decision of the

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REGULATORY OVERVIEW association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong, and the Second Conduct Rule, which prohibits anti-competitive conduct by a party with substantial market power and provides that an undertaking that has a substantial degree of market power in a market must not abuse that power by engaging in conduct that has as its object or effect the prevention, restriction, or distortion of competition in Hong Kong.

The Competition Tribunal may impose pecuniary penalty, director disqualifications, and prohibition, damage and other orders. Pursuant to section 93 of the Competition Ordinance, the Competition Tribunal may award a penalty of up to 10% of the turnover of the undertakings concerned for up to three years in which the contravention occurs.

Compliance with the relevant requirements

Our Directors confirmed that, so far as the Hong Kong laws are concerned, our Group has obtained all relevant permits, registrations and licences for its existing operations in Hong Kong as at the Latest Practicable Date.

SINGAPORE LAWS AND REGULATIONS

This section sets forth a summary of the laws and regulations applicable to our business in Singapore. As this is a summary, it does not contain detailed analysis of the Singapore laws which are relevant to the business of our Group.

Overview

Marine Italia Singapore was established to facilitate the expansion of our sales network to Singapore, in particular by selling yachts which we carry under our exclusive dealership with Azimut to customers in Singapore. For details of our expansion plan, please refer to the section headed ‘‘Statement of Business Objectives and [REDACTED]’’ in this document.

All yachts which we sell have to be registered in a country and sailed under the flag of the country which that vessel is registered under (the ‘‘Flag State’’). Once registered, the vessel will be bound and subject to the laws of the Flag State in relation to, inter alia,safety, inspection, certification and pollution prevention.

The maritime legislation of Singapore includes Acts of Parliament in Singapore that affect the port of Singapore and ships registered under Singapore as the Flag State and is mainly regulated by the Maritime and Port Authority of Singapore (‘‘MPA’’). The MPA is established under the Maritime and Port Authority of Singapore Act and takes on the roles of port authority, regulator, planner and representative in connection with the various maritime laws and regulations in Singapore.

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REGULATORY OVERVIEW

Registration

Merchant Shipping Act (Chapter 179) (the ‘‘MSA’’)

The MSA is an Act of Parliament in Singapore that regulates various aspects of shipping including the following:

— registration of ships;

— manning and certification of qualified persons;

— crew matters;

— survey and safety of ships;

— inquiries and investigations of ship officers and shipping causalities;

— delivery of goods;

— liability of shipowners;

— wreck and salvage of ships; and

— legal proceedings governing ships subject to the MSA.

The MSA prescribes certain liability on the part of ship owners, inter alia,inrelation to claims by passengers, as well as relevant limitations on such liability. The MSA also defines a ‘‘passenger ship’’ as being any ship which carries more than 12 passengers.

Pursuant to Section 99 of the MSA, no ship shall go to sea unless the certificates as to the surveys or inspections have been issued by the Director of Marine, as appointed under the MSA, to the ship owner. If any ship goes or attempts to go to sea in contravention of this section, (a) in the case of a passenger ship, the owner of the ship shall be guilty of an offence and shall be liable on conviction to a fine not exceeding S$500 for every passenger on board the ship; or (b) in the case of any other ship, the owner of the ship shall be guilty of an offence and shall be liable on conviction to a fine not exceeding S$1,000.

The provisions in the MSA in relation to the manning and certification of qualified persons and crew matters do not apply to pleasure craft (as defined below).

We may buy inventory or carry stock of yacht(s) to sail in Singapore waters as part of our sales and marketing and promotion outreach in Singapore, and such yachts will have to be registered under a Flag State, either in Singapore or elsewhere. If we choose to register in Singapore, the Merchant Shipping (Registrations of Ships) Regulations and the Merchant Shipping (Tonnage) Regulations will also be applicable.

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REGULATORY OVERVIEW

Merchant Shipping (Registration of Ships) Regulations (the ‘‘MSRSR’’)

Registration of a pleasure craft under the MSRSR accords the pleasure craft a Singapore nationality. Under the MSRSR, a ‘‘pleasure craft’’ refers to any ship that is: (a) used exclusively for the owner’s pleasure; (b) not offered or used for hire or reward; and (c) wholly owned by a person who is ordinarily resident in Singapore. A pleasure craft that is registered under the MSRSR must not be registered in any country outside Singapore. The registry of a pleasure craft is valid for one year and may be renewed annually thereafter.

Where there is a change in ownership of a pleasure craft or any change in the particulars recorded in the register or certificate of registry, the registered owner of the craft shall, not later than 30 days after the change occurs, notify the Registrar in writing and produce the certificate of registry accordingly.

The registered owner of the pleasure craft must ensure that, within one month of the date on which the pleasure craft is registered: (a) the name of the craft is clearly painted or affixed to the bows and stern of the craft; and (b) the word ‘‘Singapore’’ is clearly painted or affixed to the stern immediately below the name of the pleasure craft thereat; and such marking is effectively maintained and renewed when necessary during the period of the registry of the craft.

Licensing

Maritime and Port Authority of Singapore (Pleasure Craft) Regulations (the ‘‘MPASPCR’’)

All pleasure craft to be used in Singapore port must be licensed and pursuant to the MPASPCR, no person shall use a pleasure craft or cause or permit a pleasure craft to be used within the port without a licence.

Pursuant to the MPASPCR, a ‘‘pleasure craft’’ means any craft which is intended for use (whether such use is for private use or commercial use) within the port exclusively for sport or pleasure purposes, but does not include any craft which is used to carry passengers on sightseeing tours within the port for which each such passenger is charged a separate and distinct fare.

Pursuant to regulation 5 of MPASPCR, a pleasure craft may be licensed in the name of one or more individuals or in the name of a body corporate for the purpose of private use or for commercial use.

Pursuant to regulation 8 of MPASPCR, upon the grant of a licence, the Port Master shall assign a licence number to the pleasure craft. Pleasure craft licensed with the MPA shall be prefixed with the following letters:

— SZ—inthecaseofapleasurecraftforprivateuse;and

— SZH — in the case of a pleasure craft for commercial use.

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REGULATORY OVERVIEW

A pleasure craft that is licensed for private use shall not be offered for or engaged in any commercial use. ‘‘Commercial use’’ in relation to a pleasure craft means the offer of the pleasure craft by the owner thereof to any person for hire or charter for that person’s use for sport or pleasure purposes within the port and in the case of a pleasure craft owned by a business entity (i) include the offer of the pleasure craft to members of the public for use for sport or pleasure purposes within the port for a fee or any other form of consideration; but (ii) does not include the offer of the pleasure craft to only the officers and employees of the business entity and their accompanying guests for use for sport or pleasure purposes within the port, provided that no fee or other form of consideration is payable by any such accompanying guest.

Pursuant to regulation 13 of the MPASPCR, the owner, master or person-in-charge of every licensed pleasure craft shall cause the licence to be put up conspicuously on the pleasure craft and, where this is not possible, shall produce the licence to the Port Master as appointed under the MPA or any police officer who demands it.

Pursuant to regulation 12 of the MPASPCR, on a change of ownership of a pleasure craft, the previous owner and the new owner shall both within 7 days of the change of ownership submit to the Port Master documentary or other evidence of the change of the ownership of the pleasure craft and any licence granted to the previous owner in respect of the pleasure craft. Where the Port Master is satisfied that ownership of the pleasure craft has been transferred to the new owner, the licence granted to the previous owner shall be transferred to the new owner and is valid for the remainder of the period for which it was granted.

Operational requirements

MPASPCR

Pursuant to regulation 26B of the MPASPCR, drivers of powered pleasure craft must possess a valid powered pleasure craft driving licence (‘‘PPCDL’’) or an advance powered pleasure craft driving licence (‘‘APPCDL’’) issued by the Port Master:

Length < 24 metres ≥24 metres

Class of pleasure craft driving PPCDL APPCDL licence required

Pursuant to regulation 18 of the MPASPCR, no owner, master or person-in charge of a pleasure craft shall cause or permit the pleasure craft to carry a greater number of persons than the number allowed by and shown on the licence granted for the use of the pleasure craft.

Pursuant to regulation 23 of the MPASPCR, the owner, master or person-in-charge of a pleasure craft which is licensed for commercial use and (i) which has a carrying capacity of less than 60 persons shall ensure the pleasure craft satisfies the safety requirements set out

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REGULATORY OVERVIEW in the Second Schedule of the MPASPCR; and (ii) which has a carrying capacity of 60 persons or more shall ensure the pleasure craft satisfies the safety requirements set out in Parts II to V of the Merchant Shipping (Special Limits Passenger Ships) Safety Regulations.

Pursuant to regulation 24 of the MPASPCR, the owner, master or person-in-charge of a pleasure craft which is licensed for private use and (i) which has a carrying capacity of less than 60 persons shall ensure the pleasure craft satisfies the safety requirements set out in the Fourth Schedule of the MPASPCR; and (ii) which has a carrying capacity of 60 persons or more shall ensure the pleasure craft satisfies such safety requirements as the Port Master may specify from time to time.

Maritime and Port Authority of Singapore (Port) Regulations (‘‘MPASPR’’)

The MPASPR regulates the behaviour of ships in the port of Singapore as regards, inter alia, anchoring, fire prevention, firefighting, mooring, port signals, sea navigation, river navigation, equipment of vessels, restrictions and prohibitions, towing operations and port security.

Pursuant to regulation 3(1) of the MPASPR, the owner, agent, master or person-in- charge of a vessel entering or leaving the port must, prior to the arrival or departure of the vessel, or if the vessel is within the port, prior to any movement of the vessel, inform the Port Master or the MPA, in the manner determined by the Port Master or the MPA (as the case may be), of the particulars of the vessel, including its type, draught, length, beam, height and manoeuvring characteristics, the peculiarities of the vessel and any abnormal circumstances of the vessel which may affect its safe navigation. In this regard, a port is defined as any place in Singapore and any navigable river or channel leading into such place as declared to be a port under Section 3 of the Maritime and Port Authority of Singapore Act. Any owner, agent, master or person-in-charge of a vessel who contravenes regulation 3(1) of the MPASPR is guilty of an offence and shall be liable on conviction to a fine not exceeding S$10,000.

In addition, regulation 3(3) of the MPASPR requires the owner, agent, master or person-in-charge of a vessel to inform the Port Master of the estimated time of arrival or departure of the vessel, and while the vessel is in the port, of the position of the vessel. The Port Master or the MPA must also be provided with all information that the Port Master or the MPA may reasonably require relating to the cargo on board, to be loaded on, or to be discharged from, the vessel. Any owner, agent, master or person-in-charge of a vessel who contravenes regulation 3(3) is guilty of an offence and shall be liable on conviction to a fine not exceeding S$5,000.

A power-driven vessel that is within the port and not under tow must, at all times, have installed and maintained in operation on board a transponder of a type and specification: (a) that complies with the requirements of an automatic identification system (AIS) in Regulation 19(b)(iv)(5) of Chapter V of the Safety Convention Regulations, which sets out the requirements in Chapter V of the International Convention for the Safety of Life at Sea 1974 as amended from time to time; or (b) that is approved for use within the port by the MPA or the Port Master. Any person who contravenes or fails to comply with the foregoing

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REGULATORY OVERVIEW will be guilty of an offence and shall be liable on conviction to a fine not exceeding S$20,000 and, in the case of a continuing offence, to a further fine not exceeding S$2,000 for every day or part thereof during which the offence continues after conviction.

Pursuant to regulation 4(1) of the MPASPR, the owner or agent of a vessel who informs or represents to the Port Master or the MPA that the person is the owner or agent of the vessel must inform the Port Master or the MPA, as the case may be, immediately of any change of ownership or agency that occurs while the vessel is still in the port.

Pollution

MPASPR

Pursuanttosection65oftheMPASPR,itisanoffenceforaperson,withoutthe permission of the MPA, to:

(a) throw, discharge or deposit; or

(b) cause to be thrown, discharged or deposited, any ashes, solid ballast, sludge or any other matter into the waters of the port. Any person who contravenes section 65 of the MPASPR shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and, in the case of a continuing offence, to a further fine not exceeding $1,000 for every day or part of the day during which the offence continues after conviction.

Prevention of Pollution of the Sea Act (Chapter 243) (the ‘‘PPSA’’)

The PPSA aims (a) to prevent sea pollution, whether originating from land or from ships and is the codification in Singapore law of the International Convention for the Prevention of Pollution from Ships 1973 as modified and added to by the Protocol of 1978, the International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004, and to other international agreements relating to the protection of the marine environment and to the prevention, reduction and control of pollution of the sea and pollution from ships; and (b) to make provisions generally for the protection of the marine environment and for the prevention, reduction and control of pollution of the sea and pollution from ships, and for matters related thereto.

Pursuant to the PPSA, vessels are to keep record of discharges of, inter alia, ballast water, bilge water, oil and oily mixtures and to report, inter alia, any discharge of harmful substances. In the event of such a discharge in Singapore waters, the owners would be liable to pay the costs as prescribed by the MPA to remove or reduce the contamination caused.

The PPSA also gives MPA the power to take preventive measures to prevent pollution, including denying entry or detaining ships.

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REGULATORY OVERVIEW

Pursuant to section 6 of the PPSA, the discharge of refuse, garbage, wastes, effluents, plastics and dangerous pollutants from ships into Singapore waters is prohibited and the master, the owner and the agent of the ship shall each be guilty of an offence and shall be liable on conviction to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding two years or both.

Merchant Shipping (Civil Liability and Compensation for Bunker Oil Pollution) Act (Cap. 179A) (‘‘BOPA’’)

The BOPA was enacted to give effect to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001. The BOPA covers the liability of ships that cause bunker oil pollution in Singapore.

Pursuant to section 3(1) of the BOPA, where as a result of any occurrence, any bunker oil is discharged or escapes from a ship, the owner of the ship shall, except as otherwise provided in Part II of the BOPA, be liable: (a) for any damage caused outside the ship in Singapore by contamination resulting from the discharge or escape; (b) for the cost of any measures reasonably taken after the discharge or escape for the purpose of preventing or minimising any damage so caused in Singapore by contamination resulting from the discharge or escape; and (c) for any damage caused in the territory of Singapore by any measures so taken.

Pursuant to section 3(2) of the BOPA, where as a result of any occurrence, there arises a grave and imminent threat of damage being caused outside a ship by the contamination that might result if there were a discharge or an escape of bunker oil from the ship, the owner of the ship shall, except as otherwise provided in Part II of BOPA, be liable: (a) for the cost of any measures reasonably taken to prevent or minimise any such damage in Singapore; and (b) for any damage caused outside the ship in Singapore by any measures so taken.

ApersonwhoseclaimfallsundertheremitoftheBOPAhasarightofdirectaction against the ship’s insurers.

Port Marine Circular No.4 of 2010

The International Convention on the Control of Harmful Anti-fouling Systems on Ships (the ‘‘AFS Convention’’) was effected on 31 March 2010.

With effect from 31 March 2010, all ships including all harbour craft and pleasure craft are prohibited from applying or using harmful anti-fouling systems e.g. tributyltin, on their shipsorcraft.

A ship to which the AFS Convention applies may be inspected by the relevant port state control officers for the purpose of determining whether the vessel is in compliance with the AFS Convention.

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REGULATORY OVERVIEW

Ships or craft may, depending on their flag state, gross tonnage and length, be required to carry a duly signed International AFS Certificate, a duly signed Singapore AFS Declaration or be subject to inspections carried out by Port State Control in accordance with the International Maritime Organization’s Guidelines for Inspection of AFS on Ships set out in MEPC 49/22/Add.1 Annex 10.

Employment

Employment Act (Chapter 91) (‘‘Employment Act’’)

The Employment Act is the main legislation governing employment in Singapore. The Employment Act covers every person who is under a contract of service with an employer, including a workman, but does not include, inter alia, any seafarer or domestic worker.

A workman is defined under the Employment Act as including, inter alia, (a) any person, skilled or unskilled, who has entered into a contract of service with an employer in pursuance of which he is engaged in manual labour, including any apprentice; and (b) any person employed partly for manual labour and partly for the purpose of supervising in person any workman in and throughout the performance of his work.

Part IV of the Employment Act, which contains provisions relating to, inter alia,rest days, work hours, overtime, payment of retrenchment benefit, priority of retirement benefit, annual wage supplement and other conditions of work or service, apply to (a) workmen earning basic monthly salaries of not more than S$4,500; and (b) employees (excluding workmen or a person employed in a managerial or an executive position) earning basic monthly salaries of not more than S$2,600.

All employees are statutorily entitled to receive, inter alia, annual leave, paid public holidays, sick leave, maternity/childcare leave and the right to pay the salary in lieu of notice in order to terminate employment, regardless of whether Part IV of the Employment Act applies to such employee. Such entitlement would comprise a maximum of 14 days of paid annual leave and 14 days paid sick leave, if no hospitalisation is necessary, and if hospitalisation is necessary, the lesser of (i) 60 days in each year, or (ii) the aggregate of 14 days plus the number of days on which such employee is hospitalised.

All employers must issue key employment terms (‘‘KETs’’) in writing to employees covered under the Employment Act. Such employees include employees who (a) enter into a contract of service with the employer on or after 1 April 2016; (b) are covered by the Employment Act; and (c) are employed for 14 days or more in relation to the length of contract (does not apply to number of days of work).

KETs include full name of employer and employee, job title, duties, responsibilities, start date of employment, duration of employment, basic salary, fixed allowances, fixed deductions, overtime pay, leave, medical benefits, probation period and notice period. KETs which are not applicable to specific employees may be excluded from their contracts.

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REGULATORY OVERVIEW

Central Provident Fund Act (Chapter 36) (‘‘CPF Act’’)

The CPF is a mandatory social security savings scheme funded by contributions from employers and employees.

Pursuant to the CPF Act, an employer is obliged to make CPF contributions for all employees who are Singapore citizens or permanent residents who are employed in Singapore under a contract of service (save for employees who are employed as a master, a seaman or an apprentice in any vessel, subject to an exception for non-exempted owners). CPF contributions are not applicable for foreigners who hold employment passes, S Passes or work permits.

CPF contributions are required for both ordinary wages and additional wages (subject to a yearly additional wage ceiling) of employees at the applicable prescribed rates which is dependent on, inter alia, the amount of monthly wages and the age of the employee. An employer must pay both the employer’s and employee’s share of the monthly CPF contribution. However, an employer can recover the employee’s share of CPF contributions by deducting it from their wages when the contribution are paid for that month.

CPF contributions are due at the end of the month and employers are given a grace period of 14 days after the end of the month to pay CPF contributions. For example, contributions for December 2020 must be paid by 14 January 2021, and if the 14th falls on a weekend or public holiday, CPF contributions must be paid by the next working day.

Wage Credit Scheme

The Wage Credit Scheme was introduced in Budget 2013 by the Singapore Government to co-fund wage increases that are given to Singapore citizen employees earning a gross monthly wage of S$4,000 and below.

In Budget 2021, it was announced that the Wage Credit Scheme would be extended to 2021 with the government co-funding ratio and the qualifying gross wage ceiling being 15% and S$5,000 respectively.

Gross monthly wage increases (at least S$50) given in 2019 and 2020 by the same employer will continue to be co-funded if they are sustained in 2020 and 2021.

Only employers are eligible for co-funding. Employers do not need to apply for wage credit. Wage credits are automatically paid to eligible employees annually, based on the CPF contributions that employers make for their employees.

Parental leave benefits

The Children Development Co-Savings Act (Chapter 38A) (‘‘CDCSA’’) provides that every female employee is entitled to 16 weeks of paid maternity leave regardless of her occupation if: (1) her child is a Singapore citizen; and (2) she has served the company for at least three continuous months before the birth of her child. During such period of leave, the female employee shall be entitled to receive payment from her employer at her gross rate of pay, which is thereafter reimbursed by the government to the employer.

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REGULATORY OVERVIEW

The CDCSA provides that an eligible working father may apply to share up to four weeks of his wife’s 16 weeks of government-paid maternity leave, subject to his wife’s agreement if: (1) his child is a Singapore citizen; (2) the child’s mother qualifies for government-paid maternity leave; and (3) he is lawfully married to the child’s mother.

Eligible working fathers, including those who are self-employed, are entitled to two weeks of government-paid paternity leave funded by the Singapore Government if: (1) his child is a Singapore citizen; (2) he is or had been lawfully married to the child’s mother between conception and birth (not applicable for adoptive fathers whose formal intent to adopt is on or after 1 January 2017); and (3) he has served his employer for a continuous period of at least 3 months before the birth of his child.

Payment for each week of shared paternity leave and government-paid paternity leave is capped at $2,500, including CPF contributions.

Workplace safety and health

Workplace Safety and Health Act (Chapter 354A) (‘‘WSHA’’)

Under the WSHA, every employer has the duty to take, so far as is reasonably practicable, such measures as are necessary to ensure the safety and health of his employees at work. These measures include:

(a) providing and maintaining for those persons a work environment which is safe, without risk to health, and adequate as regards facilities and arrangements for their welfare at work;

(b) ensuring that adequate safety measures are taken in respect of any machinery, equipment, plant, article or process used by those persons;

(c) ensuring that those persons are not exposed to hazards arising out of the arrangement, disposal, manipulation, organisation, processing, storage, transport, working or use of things (i) in their workplace; or (ii) near their workplace and under the control of the employer;

(d) developing and implementing procedures for dealing with emergencies that may arise while those persons are at work; and

(e) ensuring that those persons at work have adequate instruction, information, training and supervision as is necessary for them to perform their work.

Additional specific duties imposed by the Ministry of Manpower on employers are laid out in the various regulations subsidiary to the WSHA, including without limitation, the Workplace Safety and Health (Construction) Regulations 2007 and Workplace Safety and Health (General Provisions) Regulations.

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REGULATORY OVERVIEW

The Workplace Safety and Health (Construction) Regulations 2007 sets out specific duties relating to, inter alia, the appointment of a workplace safety and health co-ordinator in respect of every worksite to assist in identifying any unsafe condition in the worksite or unsafe work practice which is carried out in the worksite and recommend and assist in the implementation of reasonably practicable measures to remedy the unsafe condition or unsafe work practice.

More specific duties imposed on employers are laid out in the Workplace Safety and Health (General Provisions) Regulations. Some of these duties include taking effective measures to protect persons at work from the harmful effects of any exposure to any biohazardous material which may constitute a risk to their health.

Under the WSHA, inspectors appointed by the Commissioner for Workplace Safety and Health (‘‘Commissioner’’) may, among others, enter, inspect and examine any workplace, to inspect and examine any machinery, equipment, plant, installation or article at any workplace, to make such examination and inquiry as may be necessary to ascertain whether the provisions of the WSHA are complied with, to take samples of any material or substance found in a workplace or being discharged from any workplace for the purpose of analysis or test, to assess the levels of noise, illumination, heat or harmful or hazardous substances in any workplace and the exposure levels of persons at work therein and to take into custody any article in the workplace which is relevant to an investigation or inquiry under the WSHA.

Workplace Safety and Health (Incident Reporting) Regulations

Pursuant to the Workplace Safety and Health (Incident Reporting) Regulations, where an employee meets with an accident at a workplace, the employer of an employee is required to lodge the relevant incident report to the Commissioner of the accident:

(a) in the case where the employee is granted more than 3 days of sick leave (consecutive or otherwise) by a registered medical practitioner on account of that accident, not later than 10 days after the 3rd day of the sick leave; and

(b) in the case where the employee is admitted in a hospital for at least 24 hours for observation or treatment on account of that accident, not later than 10 days after thedateoftheaccident.

Under the Workplace Safety and Health (Incident Reporting) Regulations, an employer who fails to report a work-related accident as required is liable to be (i) fined up to S$5,000 for a first-time offence; or (ii) fined up to S$10,000 and/or jailed up to six months for subsequent offences.

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REGULATORY OVERVIEW

Work Injury Compensation Act 2019 (‘‘WICA’’)

The WICA, which is regulated by the Ministry of Manpower, applies to employees who are engaged under a contract of service or apprenticeship, regardless of their level of earnings. The WICA does not cover self-employed persons, independent contractors, domestic workers or uniformed personnel. The WICA lets employees make claims for work- related injuries or diseases without having to file a civil suit under common law. It is a low- cost and quicker alternative to the common law for settling of compensation claims.

The WICA provides for certain quantum of compensation and medical expenses depending on the type of personal injury by accident arising out of and in the course of employment, of which, with effect from 1 January 2020, has been increased.

Under the WICA, every employer is required to insure and maintain insurance under approved policies with an insurer against all liabilities which he may incur under the provisions of the WICA in respect of all employees employed by him, unless specifically exempted.

Employers are required to maintain work injury compensation insurance for two categories of employees engaged under contracts of service (unless exempted) — firstly, all employees of (whether foreign or local) doing manual work and secondly, non-manual work employees (whether foreign or local) earning S$2,600 or less a month. Failure to do so is an offence punishable by a maximum fine of S$10,000 and/or imprisonment of up to 12 months.

Privacy

PersonalDataProtectionAct2019(‘‘PDPA’’)

Under the PDPA, personal data is defined as data, whether true or not, about an individual (whether living or deceased) who can be identified (i) from that data; or (ii) from that data and other information to which the organisation has, or is likely to have access. An organisation is required to comply with, amongst others, the following obligations prescribed by the PDPA:

(a) an organisation must obtain the consent of the individual before collecting, using or disclosing his personal data, for purposes that a reasonable person would consider appropriate in the circumstances, and fresh consent must be obtained if the individual’s personal data is to be used for a different purpose;

(b) an organisation must notify the individual of the purposes of collecting, using or disclosing his personal data and use it only for purposes consented to by him, and must put in place mechanisms for individuals to withdraw their consent;

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REGULATORY OVERVIEW

(c) an organisation must take reasonable efforts to ensure that personal data collected is accurate and complete if the personal data is likely to be used to make a decision that affects the individual, or is likely to be disclosed to another organisation, and must correct any error or omission thereof when requested unless there are reasonable grounds to refuse to do so;

(d) on request, an organisation must provide an individual with his personal data in its possession and control, as well as information about the ways in which it was used or disclosed in the past year;

(e) an organisation must protect personal data by making reasonable security arrangements to prevent unauthorised access, collection, use, disclosure, copying, modification, disposal or similar risks;

(f) an organisation must cease to retain personal data as long as it is reasonable to assume that the purpose for which it was collected is no longer being served by retaining it, and retention is no longer necessary for business or legal purposes;

(g) an organisation must not transfer any personal data out of Singapore except in accordance with the requirements of the PDPA;

(h) an organisation must assess data breaches that have occurred affecting personal data in their possession or under their control, and are required to notify the Personal Data Protection Commission, as well as any affected individuals, of the occurrence of data breaches which are likely to result in significant harm or to be of a significant scale; and

(i) an organisation must implement policies and practices in order to meet its obligations under the PDPA and make information about the same available on request.

The Personal Data Protection Commission is empowered to issue remedial directions to organisations determined to be in non-compliance with the PDPA, including directions requiring the organisation to:

(a) stop collecting, using or disclosing personal data in contravention of the PDPA;

(b) destroy personal data collected in contravention of the PDPA;

(d) pay a financial penalty of up to 10% of the organisation’s annual turnover in Singapore, or S$1.0 million, whichever is higher.

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REGULATORY OVERVIEW

Infectious diseases

Infectious Diseases Act (Chapter 137)

The IDA is the principal piece of legislation that deals with the prevention and control of infectious diseases in Singapore. This legislation is jointly administered by the Ministry of Health of Singapore (‘‘MOH’’) and the National Environment Agency. For the control of infectious diseases in Singapore, the IDA provides for the notification of specified infectious diseases. It empowers the Director of Medical Services (‘‘DMS’’) to make certain orders to control the outbreak or spread of infectious diseases.

Under the IDA, if the DMS has reason to believe that there exist on any premises conditions that are likely to lead to the outbreak or spread of any infectious disease, he may, amongst others, by written notice order the closure of the premises for a period not exceeding 14 days, and require the owner or occupier of the premises to cleanse or disinfect the premises in the manner and within the time specified in the notice or carry out such additional measures as the DMS may require in the manner and within the time specified in the notice. Such notice directing the owner or the occupier of the premises to close the premises may be renewed by the DMS from time to time for such period, not exceeding 14 days, as the DMS may, by written notice, specify.

The DMS may also direct any person carrying on any occupation, trade or business in a manner as is likely to cause the spread of infectious disease to take preventative action that the DMS reasonably believes is necessary to prevent the possible outbreak or prevent or reduce the spread of the infectious disease. Under the IDA, ‘‘preventative action’’ in the case of such direction, includes, amongst others, requiring the person to stop carrying on, or not carry on, the occupation, trade or business during a period of time specified in the direction. The Director may also, by written notice, require the owner or occupier of any premises to cleanse or disinfect it in the manner and within the time specified in the notice.

For the prevention of the introduction of infectious diseases into Singapore, the IDA allows the Minister to declare an area (whether in Singapore or elsewhere) to be an infected area if there is reason to believe that a dangerous infectious disease may be introduced into Singapore through or from that area. The Director-General Public Health is empowered to stipulate the necessary measures to be taken to prevent the introduction or importation of infectious diseases into Singapore through its ports of entry.

In addition, the DMS may order any person who is, or is suspected to be, a case or carrier or contact of an infectious disease to be detained and isolated in a hospital or other place for such period of time and subject to such conditions as the DMS may determine (‘‘Quarantine Order’’).

A Quarantine Order is issued to quarantine or isolate an individual who is, or is suspected to be, carrier of an infectious disease or a contact of a person confirmed to have an infectious disease. This is with the aim of limiting the spread of the virus in the community. Quarantine usually occurs in thehomebutcanalsobeservedindedicated Government Quarantine Facilities or hospitals, should the individual not have suitable accommodation in Singapore. Persons under quarantine are required to monitor their

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REGULATORY OVERVIEW temperature and report their health status at least three time a day, inform the Quarantine Order Agent if he/she feels unwell or needs any assistance and will be monitored by video calls at least three times a day. Spot checks will be carried out to ensure that they strictly adhere to the conditions under the Quarantine Order during the period specified. If they are found to be non-compliant, the DMS may require them to wear an electronic tag or order that they be detained and isolated in a hospital or in any other suitable place. It is an offence if they do not comply with the conditions listed in accordance with the Quarantine Order.

Employees who are served a Quarantine Order will be deemed to be on paid sick leave. Under the Quarantine Order Allowance Scheme, which was set up to mitigate financial impact for those who have been served Quarantine Orders under the IDA, claims of S$100 per day can be made by: (i) a self-employed persons, who is a Singapore Citizen or Permanent Resident, able to show proof of employment and must not break the Quarantine Order; or (ii) an employer who has employees issued with Quarantine Orders, who is a registered company in Singapore, such employees must be Singapore Citizens, Permanent Residents or work pass holders, able to show proof of payment to employees when they are under quarantine and such employees must not break the Quarantine Order. This allowance will not apply if the affected S Pass or Work Permit holders began their Quarantine Order on or after 1 April 2020, regardless of when the Quarantine Order ends. This is in view of the levy rebate and waiver of March 2020’s levies (payable in April 2020).

Any person who, without reasonable excuse, fails to comply with any requirement of such notice or direction given to that person by the DMS shall be guilty of an offence. While there are no specific penalties for such office, any person guilty of an offence under the IDA for which no penalty is expressly provided shall (i) in the case of a first offence, be liable on conviction to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 6 months or to both; and (ii) in the case of a second or subsequent offence, be liable on conviction to a fine not exceeding S$20,000 or to imprisonment for a term not exceeding 12 months or to both.

On 26 March 2020, the MOH promulgated the Infectious Diseases (COVID-19 — Stay Orders) Regulations 2020 (the ‘‘SHN Regulations’’) under the Infectious Diseases Act to provide enhanced enforcement for breaches of the Stay-Home Notice (‘‘SHN’’).

Under the SHN Regulations, (a) anyone issued an SHN must not leave their place of accommodation for the duration of the SHN; and (b) any individual who is issued a medical certificate by a medical practitioner certifying that he/she has acute respiratory symptoms must not, without reasonable excuse, leave the individual’s place of accommodation for five days starting on the day the medical certificate is issued. The penalty for an offence under the SHN Regulations is a fine of up to S$10,000 or imprisonment of up to six months or both.

Our Directors confirm that as at the Latest Practicable Date, none of our employees have been issued SHNs and/or are subject to the SHN Regulations.

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REGULATORY OVERVIEW

COVID-19 (Temporary Measures) Act 2020 (‘‘COVID-19 Act’’)

On 3 April 2020, the Singapore Multi-Ministry Taskforce announced that an elevated set of safe distancing measures will be implemented to curb the spread of COVID-19 (‘‘Circuit Breaker Measures’’). To give legal effect to the Circuit Breaker Measures, the COVID-19 Act was passed by the Singapore Parliament on 7 April 2020. Under Section 34(1) of the COVID-19 Act, the Minister for Health may make temporary control orders for the purpose of preventing, protecting against, delaying or otherwise controlling the incidence or transmission of COVID-19 in Singapore if the Minister for Health is satisfied that the incidence and transmission of COVID-19 in the community in Singapore constitutes a serious threat to public health, and a control order is necessary or expedient to supplement the Infectious Diseases Act and any other written law.

COVID-19 (Temporary Measures) (Control Order) Regulations 2020 (‘‘Control Order Regulations’’)

The Control Order Regulations were issued under the COVID-19 Act to implement a temporary control order that has been in force since 7 April 2020.

The Control Order Regulations sets out the restrictions on movement of people and the restrictions in relation to premises and businesses. These include (i) restrictions on leaving or entering place of residence, such that every individual must stay at or in, and not leave, his or her ordinary place of residence in Singapore only to the extent necessary for any of the prescribed purposes; (ii) prohibitions on social gatherings, such that a person must not meet another individual not living in the same place of residence for any social purposes unless otherwise permitted under the Control Order Regulations; and (iii) closure of premises, such that an owner or occupier of any premises other than residential premises must ensure that the premises are closed to entry by any individual, save as otherwise provided under the Control Order Regulations.

Subsequently, the Minister of Health issued several amendments to the Control Order Regulations to introduce additional obligations and requirements on individuals, businesses, premises, essential service providers and essential service workers. These additional obligation and requirements include, but are not limited to, implementing a baseline restriction that masks must be worn when outside, implementing certain safe distancing measures at permitted premises, directing essential service workers to work from their place of residence as much as practicable, providing facilities to essential services workers necessary for them to work from their place of residence, and essential service providers must not require or permit an essential service worker subject to a movement control measure to enter permitted premises.

Contravention of any control order under the COVID-19 Act and Control Order Regulations without reasonable excuse carries a fine of up to S$10,000 or imprisonment of up to six months or both for a first-time offender. In the case of a second or subsequent offence, an offender is liable to a fine up to S$20,000 or to imprisonment up to 12 months or to both. Offences may be compounded up to a sum of S$2,000, following which no further action shall be taken against the offender.

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REGULATORY OVERVIEW

Tax

Income Tax Act (Chapter 134)

Pursuant to Section 10 of the Income Tax Act, corporate taxpayers (whether Singapore tax resident or non-Singapore tax-resident) are generally subject to Singapore income tax on income accruing in or derived from Singapore, and on foreign-sourced income received or deemed to be received in Singapore (unless specified conditions for exemptions are satisfied). Foreign income in the form of dividends, branch profits and service fee income received or deemed to be received in Singapore by a Singapore tax resident corporate taxpayer may however be exempt from Singapore tax if specified conditions are met.

The prevailing corporate income tax rate is 17.0% with partial tax exemption for normal chargeable income of up to S$200,000 as follows:

(a) 75.0% exemption of up to the first S$10,000 of normal chargeable income; and

(b) 50.0% exemption of up to the next S$190,000 of normal chargeable income.

A company is regarded as a tax resident in Singapore if the control and management of its business is exercised in Singapore. Generally, control and management of a company is vested in its board of directors and its tax residency is generally where its board of directors meet to make strategic business decisions of the company.

Singapore adopts the one-tier corporate tax system. Pursuant to Section 13(1)(za) of the Income Tax Act, the dividends paid by the Singapore tax resident company on or after 1 July 2008 is exempt from Singapore income tax.

Goods and Services Tax Act (Chapter 117A) (‘‘GSTA’’)

The GSTA provides for the imposition of a goods and services tax (‘‘GST’’) on the supply of certain goods.

Section 8 of the GSTA provides that tax shall be chargeable on any supply of goods or services made in Singapore where it is a taxable supply by a taxable person in the course or furtherance of any business carried on by him. Pursuant to Section 16 of the GSTA, with effect from 1 July 2007, tax shall be charged at the rate of 7.0% on the supply of goods or services and the importation of goods by reference to the value of the supply or goods (as the case may be) as determined under the GSTA.

Under the First Schedule of the GSTA, a person is liable to be registered if his taxable supplies made during the immediately preceding four quarters has exceeded S$1 million.

Generally, supply for GST purposes cover all forms of supply of goods and services in return for consideration. A taxable supply may either be standard rated or zero-rated. The standard rate of 7.0% for any taxable supply would apply unless prescribed as zero-rated or exempt.

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REGULATORY OVERVIEW

Compliance with the relevant requirements

Our Directors confirmed that, so far as the Singapore laws are concerned, our Group has obtained or procured all relevant permits, registrations and licences for its operations in Singapore.

PRC LAWS AND REGULATIONS

Laws and regulations on establishment and operation of foreign invested enterprises

The latest version of Special Administrative Measures for Foreign Investment Access (Negative List) 2020 Edition《 ( 外商投資准入特別管理措施（負面清單）》2020版) (the ‘‘Negative List’’) promulgated by the National Development and Reform Committee (the ‘‘NDRC’’) on 23 June 2021 uniformly set out special administrative measures for foreign investment access regarding equity requirements and requirements for senior management. Sectors not covered in the Negative List shall be subject to administration in accordance with the principle of equal treatment for domestic and foreign investments. Yacht Industry is not included in the Negative List.

The Special Administrative Measures for Foreign Investment Access to Hainan Free Trade Port (Negative List) 2020 Edition《 ( 海南自由貿易港外商投資准入特別管理措施（負面清單）》2020版) (the‘‘FTP Negative List’’) promulgated by the NDRC on 31 December 2020 uniformly set out special administrative measures for foreign investment access regarding equity requirements and requirements for senior management, and shall apply to the entire Hainan Island. Sectors not covered in the FTP Negative List shall be subject to administration in accordance with the principle of equal treatment for domestic and foreign investments. Yacht Industry is not included in the FTP Negative List.

The Foreign Investment Law of the People’s Republic of China《 ( 中華人民共和國外商投資法》) (the ‘‘Foreign Investment Law’’) was promulgated by the Standing Committee of the National People’s Congress (the ‘‘SCNPC’’) on 15 March 2019 and became effective on 1 January 2020. According to the Foreign Investment Law, foreign investors shall not invest in the fields in which foreign investment is prohibited by the Negative List. For foreign investment in sectors restricted by the Negative List, the foreign investor shall satisfy the criteria stipulated in the Negative List. Foreign investments in sectors outside the negative list shall be subject to administration pursuant to the principle of consistent treatment for domestic and foreign investments. Foreign investors or foreign investment enterprises shall submit investment information to the commerce authorities through the enterprise registration system and enterprise creditworthiness information announcement system. The foreign investment information that can be obtained through sharing of departmental information shall not be required any more. The provisions of the Company Law of the People’s Republic of China, the Partnership Enterprise Law of the People’s Republic of China and other laws shall apply to the form, structure and code of conduct of foreign investment enterprises.

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REGULATORY OVERVIEW

Laws and regulations relating to foreign exchange control

Due to the foreign exchange control policy of the PRC, cross border money transactions of Company PRC Subsidiaries in their business activities and dividend distribution to the foreign investors of the PRC Subsidiaries shall comply with various administration of foreign exchange in the PRC. The principal regulation governing foreign exchange in the PRC are the Foreign Exchange Administration Rules of the PRC《 ( 中華人民共和國外匯管理條例》), which was promulgated by the State Council on 29 January 1996 and subsequently amended on 14 January 1997 and on 1 August 2008. These Regulations are formulated for the purposes of strengthening foreign exchange control, promoting balance of international receipts and payments, and promoting sound development of national economy. Under these rules, the current account incomes of foreign exchanges can be retained or sold to financial institution which manage exchange settlement and sale and purchase of foreign exchange. Foreign exchange receipts and payments under current account items shall be based on true and legitimate transactions. Financial institutions engaging in conversion and sale of foreign currencies shall, pursuant to the provisions of the foreign exchange control department of the State Council, carry out reasonable examination of the veracity of transaction documents and the consistency of the transaction documents and the foreign exchange receipts and payments. The foreign exchange control authorities shall have the right to carry out supervision and inspection of matters. Overseas organizations and overseas individuals making direct investments in China shall, upon approval by the relevant authorities in charge, process registration formalities with the foreign exchange control authorities. Overseas organizations and overseas individuals engaging in issuance and trading of quoted securities or derivatives in China shall comply with the market entry provisions of the State and process registration formalities pursuant to the provisions of the foreign exchange control department of the State Council.

Under the Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment《 ( 國家外匯管理局關於進一步簡化和改進直接投資外匯管理政策的通知》) (‘‘Circular 13’’) promulgated by the State Administration of Foreign Exchange (the ‘‘SAFE’’) on 13 February 2015 and amended on 30 December 2019, to improve the efficiency on foreign exchange management, the SAFE (i) has cancelled Approval of foreign exchange registration under domestic direct investment and approval of foreign exchange registration under overseas direct investment; (ii) has replaced confirmation and registration of monetary contribution by foreign investors with entry registration of monetary contribution under domestic direct investment. In the event that a foreign investor makes contribution in the monetary form (including cross-border foreign exchange remittance and RMB), the deposit bank shall, upon receipt of the relevant capital funds, carry out entry and registration of monetary contribution of domestic direct investment via the SAFE Capital Account Information System directly before the capital funds can be used.

According to the Notice of the State Administration of Foreign Exchange on Reforming the Management Mode of Foreign Exchange Capital Settlement of Foreign Investment Enterprises《 ( 國家外匯管理局關於改革外商投資企業外匯資本金結匯管理方式的通知》)(‘‘Circular 19’’) promulgated on 30 March 2015 and amended on 30 December 2019, (i) the system of willingness-based foreign exchange settlement is adopted for the

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REGULATORY OVERVIEW foreign exchange capital of foreign-invested enterprises. The willingness-based settlement of foreign exchange capital of foreign-invested enterprises refers to that the foreign exchange capital, for which the monetary contribution has been confirmed by the foreign exchange authorities (or for which the monetary contribution has been registered for account entry) in the capital account of a foreign-invested enterprise may be settled at a bank as required by the enterprise’s actual management needs. The proportion of willingness-based foreign exchange settlement of capital for a foreign-invested enterprise is temporarily set at 100%; (ii) The RMB funds obtained by a foreign-invested enterprise from its willingness-based exchange settlement of capital shall be included into the foreign exchange settlement accounts for pending payment; (iii) A foreign-invested enterprise shall use capital under the authentic and self-use principles within its business scope. Foreign-invested enterprises are prohibited to use capital and the foreign exchange capital settled in RMB (a) for any direct or indirect expenditures beyond the business scope of the foreign-invested enterprises or forbidden by laws and regulations; (b) for direct or indirect securities investment, unless otherwise provided by any law or regulation; (c) to provide entrusted loans or repay loans between enterprises; (d) to purchase real estate’s not for self-use purposes (save for real estate enterprises).

Laws and regulations related to import and export of good

Pursuant to the Foreign Trade Law of the PRC (中華人民共和國對外貿易法) (the ‘‘Foreign Trade Law’’), which was promulgated by the SCNPC on 12 May 1994 and became effective on 1 July 1994, and as last amended on 7 November 2016, a foreign trade operator engaged in import and export of goods or technologies shall make registration for record with the department in charge of foreign trade under the State Council or institutions entrusted by it; but those that are exempted from registration for record by laws, administrative rules and rules of the department in charge of foreign trade under the State Council shall be excluded.

The Circular of the Ministry of Commerce on Relevant Issues Concerning the Record Keeping and Registration of the Right to Foreign Trade by Foreign-invested Enterprises (商務部關於外商投資企業外貿權備案登記有關問題的通知), which was promulgated by the MOFCOM and implemented on 17 August 2004, further stipulates that any foreign-funded enterprise lawfully established after 1 July 2004 that undertakes import/export of self-use or self-produced goods and technologies of this enterprise need not complete the formalities of record-keeping and registration by foreign trade operators.

According to the Administrative Provisions of the Customs of the PRC on the Registration of Customs Declaration Entities (中華人民共和國海關報關單位註冊登記管理規定), which was promulgated by the General Administration of Customs on 13 March 2014 and last amended on 29 May 2018, consignors and consignees of imported and exported goods shall go through customs declaration entity registration formalities with their local Customs in accordance with the applicable provisions. A consignor or consignee of imported or exported goods shall appoint its own customs declaration officer to complete customs formalities on its behalf or shall entrust a customs declaration enterprise that has registered with the Customs to appoint a customs declaration officer to complete customs formalities on its behalf.

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REGULATORY OVERVIEW

According to Public Announcement on Reinforcing Management of Importing Yacht (關於加強進口遊艇管理的公告) promulgated by the Ministry of Transport of the PRC and became effect on 15 September 2011, the yacht aging over 1 year is prohibited from importing. Enterprise that importing yachts shall register with the Ministry of Transport of the PRC.

According to Measures for Administration of the Import of Mechanical and Electronic Products (機電產品進口管理辦法) promulgated by Ministry of Commerce, General Administration of Customs and the former General Administration of Quality Supervision, Inspection and Quarantine on 7 April, 2008 and amended on 9 November 2018, the mechanical and electronic products include mechanical equipment, electric equipment, means of transportation, electronic products, electric appliances, instruments and meters, metal products as well as their components and parts. The Ministry of Commerce of the PRC is responsible for national administration of the import of mechanical and electronic products. The state implements classified administration for mechanical and electronic products, namely, three classes of forbidden import, restrictive import and free import. For the need of import supervision, some mechanical and electronic products under free import category are subject to automatic import license. The relevant authorities may promulgate the Catalogue of Mechanical and Electronic Products under Forbidden Import Category, the Catalogue of Mechanical and Electronic Products under Restrictive Import Category and the Catalogue of Automatic Import License of Mechanical and Electronic Products from time to time. Enterprise shall not import mechanical and electronic products under the Catalogue of Mechanical and Electronic Products under Forbidden Import Category, and shall apply for relevant license if they import products under the Catalogue of Mechanical and Electronic Products under Restrictive Import Category and the Catalogue of Automatic Import License of Mechanical and Electronic Products.

According to the Circular on ‘‘Zero-tariff Policy’’ for Vehicles and Yachts in Hainan Free Trade Port《 ( 海南自由貿易港交通工具及遊艇‘‘零關稅’’政策海關實施辦法（試行）》) promulgated by General Administration of Customs on 5 January 2021, before the whole island of Hainan enters into independent customs operations, operational vehicles and yachts including vessels, aircrafts and cars that are imported by enterprises registered in Hainan Free Trade Port as independent legal personality and engaged in transportation and tourism (in case of aviation enterprises, Hainan Free Trade Port shall be their main operation base) for transportation and tourism purpose will be exempted from import duties, import value-added tax and consumption tax.

Regulations on Yachts Management

According to the Regulations on Yacht Safety Management (遊艇安全管理規定) promulgated by the Ministry of Transport of the PRC and became effect on 1 January 2009, the yacht refers to the mechanical powering ship used for private touring and entertaining purposes. The sailing safety of the yacht in water area of the PRC is governed by the National Maritime Safety Administration of the PRC. The sailing safety affairs in local water area is governed by the local offices of the National Maritime Safety Administration. The yacht shall be inspected by the yacht inspection agency who shall follow the regulations

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REGULATORY OVERVIEW and standards promulgated by the Ministry of Transport of the PRC, and shall only be used with yacht inspection certificate. The yacht sailing or parking in the territorial water of the PRC should possess the nationality certificate. The owner of yacht who applies for nationality certificate shall possess inspection certificate and ownership certificate. The nationality certificate will be issued by the Maritime Safety Administration. The yacht’s owner is responsible for the yacht’s safety and the daily maintenance of yacht, which refers to the well-running technical conditions, and ensuring the safety of sailing or parking and the safety of the people on board.

According to the Administrative Measures for Hainan Province Entry-Exit Yacht Quarantine《 ( 海南出入境遊艇檢疫管理辦法》) which was promulgated by the General Administration of Customs on 29 May 2018 and became effective on 1 July 2018, yachts entering Hainan Province must be quarantined at the first port of arrival. If the entry yacht passes the quarantine inspection, the customs shall issue the certificate of entry quarantine and other certificates. Pursuant to Measures for the Administration of Yachts in Hainan Province《 ( 海南省遊艇管理辦法》) promulgated by Hainan Municipal People’s Government on 5 February 2016 and Provisional Measures for the Yachts Safety Management in Hainan Province《 ( 海南省遊艇安全管理暫行辦法》) promulgated by Hainai Maritime Bureau on 29 December 2010, yachts sailing in the waters of Hainan Province shall hold a valid ship nationality certificate, ship inspection certificate, or other seaworthiness certification documents recognized by the state. The Yacht operator shall hold a valid certificate of competency as a yacht operator before driving a yacht in the waters of Hainan Province. Before arriving at the port, an inbound yacht shall, according to law, report to the maritime administrative agency and other port inspection authorities of the arrival port for archival purposes, clarify the time of arrival, dock and berth, and declare the information of the ship, crew and carried goods. According to the Implementing Proposals for Free Yachting of Hainan, Hong Kong and Macao Yachts in the China (Hainan) Free Trade Pilot Zone 《( 中國（海南）自由貿易試驗區瓊港澳遊艇自由行實施方案》) promulgated by the General Office of the People’s Government of Hainan Province on 18 June 2019, inbound yachts from Hong Kong and Macao shall report their navigation plans as required by the port inspection authorities prior to their voyages.

According to the Implementing Maritime Rules for Free Yachting of Guangdong- Macao Yachts in the China (Guangdong) Free Trade Pilot Zone《 ( 中國（廣東）自由貿易試驗區粵澳遊艇自由行海事實施細則》) promulgated by the Guangdong Maritime Bureau on 12 August 2019, yachts that participate in free yachting of Guangdong-Macao yachts must meet the yacht inspection requirements of the ports of registry. Under the Circular of the Shenzhen Municipal People’s Government on the Several Measures for Speeding up the Development of Cruise and Yacht Industry《 ( 深圳市加快郵輪遊艇產業發展若干措施的通知》), which was promulgated by the Shenzhen Municipal People’s Government on 17 March 2009, the inspection and quarantine authorities shall adopt, with reference to the relevant provisions, the quarantine registration and record-filing systems for yachts coming from and going to Hong Kong and Macao, establish the ship sanitation archives, and shall process the simple quarantine procedures.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

OVERVIEW

In 2006, Mr. Thomas Woo established ‘‘Marine Italia’’ (an unlimited liability entity) and engaged in yacht trading business as a sole proprietor. Around 2007, Mr. Thomas Woo got acquainted with Azimut through a business occasion and began to build and develop a solid business relationship with Azimut as an independent yacht broker via ‘‘Marine Italia’’.

In 2013, in a cooperation occasion with Simpson Marine Limited Hong Kong (‘‘Simpson Marine’’), Mr. Thomas Woo got acquainted with Mr. Paul Grange, who was then the group’s sales manager of Simpson Marine.

Around 2013, Mr. Thomas Woo got acquainted with Absolute in a boat show held in Cannes, France. Leveraging on his yacht brokerage experience in Hong Kong, Absolute invited Mr. Thomas Woo to be its exclusive dealer in Hong Kong and certain other regions in Asia-Pacific.

In light of the exclusive dealership from Absolute, Mr. Thomas Woo, our founder, one of our Controlling Shareholders and executive Directors, with his personal resources, being principally the earnings from his previous businesses, set up Absolute Marine in January 2014 to facilitate the sales of first-hand Absolute yachts and to limit his liabilities, leading to the establishment of our Group and the beginning of our Group’s business of sales of first-hand Absolute yachts in Hong Kong. Absolute Marine was then wholly-owned by Mr. Thomas Woo. In May 2014, Absolute Marine was appointed as the exclusive dealer of first- hand Absolute yachts in Hong Kong. ‘‘Marine Italia’’ became inactive in 2013 and was subsequently sold to an Independent Third Party in 2018. Our Group secured our first sale of first-hand Absolute yacht, which was approximately HK$6.0 million, in May 2014.

Since the grant of the exclusive dealership from Absolute, our Group has been working closely with Absolute in promoting and marketing first-hand Absolute yachts. During the Track Record Period, our Group participated in different marketing events organised by Absolute, and Absolute also participated in events that our Group organised in Hong Kong.Insomeoccasions,AbsolutewouldalsohelpourGrouptopromotemarketing events organised by our Group on its website and provide the necessary supports when our Group participates in boat shows organised by other organisers. From time to time, our Directors would have dealers’ meetings and telephone conversations with Absolute’s management to discuss the industry prospect and marketing strategy for the sale of Absolute yachts.

In early 2015, Azimut invited Mr. Thomas Woo to be its exclusive dealer in Hong Kong considering their past successful business co-operations and Mr. Thomas Woo’s experience in yachts distribution in Hong Kong.

In May 2015, Mr. Thomas Woo established Marine Italia (a limited liability company) to facilitate the sales of first-hand Azimut yachts in Hong Kong for the same reasons above. In April 2015, Marine Italia was appointed as the exclusive dealer of first-hand Azimut yachts in Hong Kong. Our Group secured our first sale of first-hand Azimut yacht, which was approximately HK$9.0 million, in August 2015.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

Similar to Absolute, since the grant of the exclusive dealership from Azimut, our Group has been working closely with Azimut in promoting and marketing first-hand Azimut yachts. During the Track Record Period,ourGroupparticipatedindifferentlocal and international marketing events organised by Azimut, including boat shows, cocktail parties, open days and gatherings, in Hong Kong, Macau, Hainan Province in the PRC and Italy. From time to time, Azimut would invite our Group’s input for its marketing events. Our Directors would also be invited to dealers’ meetings and telephone calls with Azimut’s management from time to time to discuss the marketing events, industry prospect and marketing strategy for the sale of Azimut yachts.

In December 2015, one of our Controlling Shareholders and executive Directors, Mr. Paul Grange, with his personal resources, being principally the salaries from his previous employment, invested in and joined our Group. Absolute Marine and Marine Italia were then owned by Mr. Thomas Woo and Mr. Paul Grange in equal shares.

In September 2016, Marinetec was established to facilitate the business development and operation of our Group, and was owned by Mr. Thomas Woo and Mr. Paul Grange in equal shares.

In July 2018, Marine Italia Singapore was established to facilitate the expansion of our salesnetworkoffirst-handAzimutyachtstoSingapore,andwasownedasto65%by Marine Italia and as to 35% by 2BY2 Yachts Italia (being the investment holding company wholly-owned by Ms. Karen Kwee, who was the business partner of Mr. Thomas Woo and Mr.PaulGrangeinSingapore).

Our Group operates our business through Absolute Marine, Marine Italia, Marinetec and Marine Italia Singapore, which are all subsidiaries of our Company. Over the years, we have built up our reputation as a yacht dealership group in Hong Kong principally engaging in the sales of first-hand yachts of luxury and mid-to-high-end brands.

BUSINESS MILESTONES

The following table outlines the key milestones and achievements in the history of our Group:

Year Event

2014 Absolute Marine was incorporated in Hong Kong with limited liability to engage in the sales of first-hand yachts of the brand of Absolute in Hong Kong.

We were firstly appointed as the exclusive dealer of first-hand yachts of the brand of Absolute in Hong Kong.

2015 We began our dealership with Zar Formenti to distribute inflatable boats in Hong Kong.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

Year Event

Marine Italia was incorporated in Hong Kong with limited liability to engage in the sales of first-hand yachts of the brand of Azimut in Hong Kong.

We were firstly appointed as the exclusive dealer of first-hand yachts of the brand of Azimut in Hong Kong.

2016 Marinetec was incorporated in Hong Kong with limited liability to facilitate the business development and operation of our Group.

We were awarded as the ‘‘Number One Absolute Dealer Worldwide’’ out of over 30 dealers, by Absolute in 2016/2017.

WewereoneofthetopfiveAzimutdealersoutofover100dealersinthe world in 2016/2017.

2017 We were awarded as the ‘‘Number One Absolute Dealer Worldwide’’ out of over 30 dealers, by Absolute in 2017/2018.

WewereoneofthetopfiveAzimutdealersoutofover100dealersinthe world in 2017/2018.

2018 Marine Italia Singapore was incorporated in Singapore with limited liability to facilitate the expansion of our sales network of first-hand yachts of the brand of Azimut to Singapore.

Absolute and Azimut made an exception and renewed our exclusive distribution agreements for a further five years in July 2018 and August 2018, respectively, because (i) the Hong Kong market makes a sizable contribution to their global sales (ii) our Group’s proven track record and (iii) our Group is the exclusive dealer in the Hong Kong market. Both Absolute and Azimut have confirmed that it is their normal practice to grant exclusive dealerships for one year only, and the five- year exclusive dealership granted to our Group is a special business cooperative strategy.

We were also appointed as the exclusive dealer of first-hand yachts of the brand of Azimut in Singapore for two years.

We were also appointed as the non-exclusive dealer of first-hand sport boats of the brand of Four Winns in Hong Kong.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

Year Event

Our revenue for the year ended 30 April 2018 reached HK$241 million and we ranked fourth in terms of the market share of the industry revenue for the year ended 30 April 2018.

2019 We ranked third in terms of the market share of the industry revenue for the year ended 30 April 2019.

We have secured our first luxury yacht sale transactions outside of Hong Kong market, including PRC, Singapore and Taiwan.

CORPORATE AND BUSINESS DEVELOPMENT HISTORY

Please refer to the sub-section headed ‘‘Our Group Structure’’ in this section below for the diagram sets forth the corporate structure of our Group as at 1 May 2018, the commencement date of the Track Record Period. The following sets forth the shareholding and corporate structure, place of incorporation and principal business activities of each member of our Group as at Latest Practicable Date.

Our Company

Our Company was incorporated in the Cayman Islands under the Companies Act as an exempted company with limited liability on 16 October 2018, with an authorised share capital of HK$380,000 divided into 38,000,000 ordinary shares of HK$0.01 each, of which, one Share was subscribed by its initial subscriber, an Independent Third Party, who, on the same date, transferred to Bright Emerald the said one issued Share, which represented the entire issued share capital of our Company. As a result of the Reorganisation, our Company has become the holding company of our Group, details of which are set out in the paragraph headed ‘‘Reorganisation’’ in this section.

On [‧], our Company allotted and issued 49 Shares credited as fully paid to Bright Emerald.

On [‧], Bright Emerald, being the sole Shareholder, resolved to increase the authorised share capital of our Company from HK$380,000 divided into 38,000,000 Shares to HK$100,000,000 divided into 10,000,000,000 Shares by the creation of an additional of 9,962,000,000 Shares, each ranking pari passu with our Shares then in issue in all respects.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

Our intermediate holding subsidiary

Halcyon Moment (BVI)

Halcyon Moment was incorporated in the BVI with limited liability on 26 July 2018 and is authorised to issue a maximum of 50,000 shares of a single class each with a par value of US$1.00. As at the Latest Practicable Date, Halcyon Moment had two shares in issue. Halcyon Moment is an investment holding company.

On 24 October 2018, Halcyon Moment allotted and issued one share to our Company at par. Immediately after the aforesaid allotment and issue of share, Halcyon Moment became a direct wholly-owned subsidiary of our Company.

On 29 October 2018, as part of the Reorganisation, Halcyon Moment further allotted and issued one share credited as fully paid to our Company, details of which are set out in the paragraph headed ‘‘Reorganisation — Stage (2) — Acquisition of Absolute Marine, Marine Italia and Marinetec by our Company from Mr. Thomas Woo and Mr. Paul Grange’’ in this section.

Our operating subsidiaries

Absolute Marine (Hong Kong)

Absolute Marine is a private company incorporated in Hong Kong with limited liability on 20 January 2014. Absolute Marine is principally engaged in the sale of yachts and related components in Hong Kong.

As at 1 May 2018, being the commencement date of the Track Record Period, Absolute Marine had one share in issue, and was jointly owned by Mr. Thomas Woo and Mr. Paul Grange. There had been no change in the shareholding in Absolute Marine since 1 May 2018 until immediately before the Reorganisation.

As a result of the Reorganisation, Absolute Marine became an indirect wholly-owned subsidiary of our Company, details of which are set out in the paragraph headed ‘‘Reorganisation’’ in this section.

Marine Italia (Hong Kong)

Marine Italia is a private company incorporated in Hong Kong with limited liability on 12 May 2015. Marine Italia is principally engaged in the sale of yachts and related components in Hong Kong.

As at 1 May 2018, being the commencement date of the Track Record Period, Marine Italia had 10,000 shares in issue, and was owned as to 5,000 shares by Mr. Thomas Woo and 5,000 shares by Mr. Paul Grange, respectively. There had been no change in the shareholding in Marine Italia since 1 May 2018 until immediately before the Reorganisation.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

As a result of the Reorganisation, Marine Italia became an indirect wholly-owned subsidiary of our Company, details of which are set out in the paragraph headed ‘‘Reorganisation’’ in this section.

Marinetec (Hong Kong)

Marinetec is a private company incorporated in Hong Kong with limited liability on 5 September 2016. Marinetec is principally engaged in the provision of yacht repair and maintenance services in Hong Kong.

As at 1 May 2018, being the commencement date of the Track Record Period, Marinetec had 10,000 shares in issue, and was owned as to 5,000 shares by Mr. Thomas Woo and 5,000 shares by Mr. Paul Grange, respectively. There had been no change in the shareholding in Marinetec since 1 May 2018 until immediately before the Reorganisation.

As a result of the Reorganisation, Marinetec became an indirect wholly-owned subsidiary of our Company, details of which are set out in the paragraph headed ‘‘Reorganisation’’ in this section.

Marine Italia Singapore (Singapore)

Marine Italia Singapore is a private company incorporated in Singapore with limited liability on 16 July 2018. Marine Italia Singapore is principally engaged in the sale of yachts and related components in Singapore.

On the date of its incorporation, Marine Italia Singapore had 50,000 shares in issue, and was owned as to 32,500 shares by Marine Italia and 17,500 shares by 2BY2 Yachts Italia, respectively. There had been no change in the shareholding in Marine Italia Singapore since its incorporation.

As a result of the Reorganisation, Marine Italia Singapore became an indirect non wholly-owned subsidiary of our Company, details of which are set out in the paragraph headed ‘‘Reorganisation’’ in this section.

On 16 July 2018, Marine Italia, 2BY2 Yachts Italia and Marine Italia Singapore, entered into a shareholders’ agreement that governs the relationships among them as shareholders of Marine Italia Singapore (the ‘‘Shareholders’ Agreement’’).

Under the Shareholders’ Agreement

— reserved matters as stated under the Shareholders’ Agreement, including but not limited to:

(a) appointment or removal or amendment to the terms of employment of the managing director or chief executive officer of Marine Italia Singapore;

(b) appointment or removal of the auditor of Marine Italia Singapore;

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HISTORY, REORGANISATION AND GROUP STRUCTURE

(c) Marine Italia Singapore ceasing the business of retailing and maintenance of Azimut brand pleasure craft in the territory of Singapore; and

(d) Marine Italia Singapore carrying on any business, other than the business of retailing and maintenance of Azimut brand pleasure craft in the territory of Singapore,

shall require the approval of at least one director appointed by Marine Italia and the 2BY2 Yachts Italia nominee director, in addition to any shareholder approvals that may be required in respect of such matters by Singapore law or the constitution of Marine Italia Singapore;

— the directors of Marine Italia Singapore shall comprise three directors, with Marine Italia being entitled to appoint two nominees directors to the board so long as Marine Italia continues to hold at least sixty percent of the equity of the Marine Italia Singapore and 2BY2 Yachts Italia being entitled to appoint one nominee director to the board so long as 2BY2 Yachts Italia continues to hold at least thirty percent of the equity of Marine Italia Singapore;

— except as otherwise provided in the Shareholders’ Agreement, none of the shareholders shall, except with the written consent of all the other shareholders assign, create or permit to subsist any encumbrances over any of the shares of Marine Italia Singapore held by him/her/it;

— if a shareholder of Marine Italia Singapore wishes to transfer, indirectly or directly, any or all of his/her/its shares of Marine Italia Singapore, he/she/it shall first offer the sale of such shares to the other shareholder(s) in nearly as may be in proportion to the shares being held by each of the other shareholder(s);

— if any shareholder of Marine Italia Singapore intends to transfer all or any part of his/her/its shares of Marine Italia Singapore to a third party, each of the other shareholders shall be entitled to participate in the sale by selling all (but not part of) his/her/its shares of Marine Italia Singapore on the same terms and conditions; and

— the non-defaulting shareholder of Marine Italia Singapore has the right to purchase all of the shares of Marine Italia Singapore of the defaulting shareholder of Marine Italia Singapore at fair value if, among other:

(a) the defaulting shareholder of Marine Italia Singapore is in breach of his/her/ its obligations under the Shareholders’ Agreement or the constitution of Marine Italia Singapore, where the breach is capable of remedy, has failed to remedy the breach within the prescribed time; or

(b) anyorderismadeorresolutionispassedoranapplicationisfiledforthe bankruptcy or winding-up of the defaulting shareholder otherwise than for the purpose of a reconstruction, amalgamation or reorganisation.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

[REDACTED] INVESTMENT

Overview

On 14 June 2018, Absolute Marine, Marine Italia, Marinetec, Mr. Leslie Kong, Mr. Joseph Tong, Mr. Thomas Woo and Mr. Paul Grange entered into a subscription agreement (the ‘‘[REDACTED] Convertible Bonds Subscription Agreement’’)inrelationtothe subscription of three (3) per cent. coupon convertible bonds in the aggregate principal amount of HK$8,000,000 to be issued by our Company (the ‘‘[REDACTED] Convertible Bonds’’).

The subscription of the [REDACTED] Convertible Bonds pursuant to the [REDACTED] Convertible Bonds Subscription Agreement was completed on 1 November 2018, that the [REDACTED] Convertible Bonds were issued, as directed by Mr. Leslie Kong and Mr. Joseph Tong, in the following manner:

(i) Mr. Leslie Kong will hold the three (3) per cent. coupon convertible bonds of a principal amount of HK$4,000,000 issued by our Company in denomination of HK$4,000,000 through Dragon United; and

(ii) Mr. Joseph Tong will hold the three (3) per cent. coupon convertible bonds of a principal amount of HK$4,000,000 issued by our Company in denomination of HK$4,000,000 through Precious Wave.

The following table sets forth the details of the [REDACTED] Investment:

Name of investors: Mr. Leslie Kong and Mr. Joseph Tong

Holders of the Dragon United and Precious Wave [REDACTED] Convertible Bonds:

Aggregate principal amount In total HK$8,000,000 that Mr. Leslie Kong and Mr. of the [REDACTED] Joseph Tong each paid (i) HK$1,000,000 upon the Convertible Bonds: signing of the [REDACTED] Convertible Bonds Subscription Agreement on 14 June 2018; and (ii) HK$3,000,000 upon the completion on 1 November 2018, respectively

Number and percentage of Dragon United: [REDACTED] Shares shareholding upon ([REDACTED]% of the entire issued share capital of [REDACTED]: our Company) (Note) Precious Wave: [REDACTED] Share ([REDACTED]% of the entire issued share capital or our Company) (Note)

Approximate cost of HK$[REDACTED] investment per Share:

Approximate percentage of [REDACTED]% discount to the mid-point [REDACTED]:

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HISTORY, REORGANISATION AND GROUP STRUCTURE

Strategic benefits of the The [REDACTED] Investment enhanced our Group’s [REDACTED] Investment cash flow position in preparation of the [REDACTED]. brought to our Company: The [REDACTED] Investors’ investments and commitment in our Group demonstrated their confidence in the yacht industry in Hong Kong and our business prospects. Our Directors believe that we would benefit from the [REDACTED] Investors’ business networks, as well as their knowledge and experience in management, operations and development of business strategy. In particular, as Mr. Joseph Tong has extensive experience in holding directorship in various private and listed companies, our Directors believe that our Group will be able to benefit from the advice for business development and strategic planning of our Group from Mr. Joseph Tong. Also, as Mr. Leslie Kong has extensive experience in the trading industry, our Directors are of the view that our Group will be able to benefit from the advice on business operations and development of our Group from Mr. Leslie Kong.

Note: Such percentage of [REDACTED]% is calculated without taking into account of any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme. If any new Shares are to be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme, such percentage of [REDACTED]% shall be reduced on a pro rata basis.

Interest

The [REDACTED] Convertible Bonds bear interest on its outstanding principal amount from the date of issue of the [REDACTED] Convertible Bonds to and including the maturity date at the rate of 3% per annum on simple basis.

Maturity date

The maturity date of the [REDACTED] Convertible Bonds shall be the date falling the expiry of two years from the date of issue of the [REDACTED] Convertible Bonds, which may be extended, at the discretion of Dragon United or Precious Wave (as the case may be), by service of Dragon United or Precious Wave (as the case maybe) to our Company of not less than seven (7) days’ written notice in advance.

By written notices from Dragon United and from Precious Wave dated 23 October 2020, respectively, the maturity date was extended for a further six months (i.e. up to and including 30 April 2021).

By further written notices from Dragon United and from Precious Wave dated 23 April 2021, respectively, the maturity date was extended for a further three months (i.e. up to and including31July2021).

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HISTORY, REORGANISATION AND GROUP STRUCTURE

Redemption

Our Company shall not be permitted to redeem the entire of or part of the outstanding amount under the [REDACTED] Convertible Bonds before the maturity date, save as pursuant to the events of default set out in the [REDACTED] Convertible Bonds.

Mandatory conversion

Immediately after receiving the approval of [REDACTED] and permission to deal in the Shares on GEM issued by the Stock Exchange but in any event no later than one business day before the [REDACTED],the[REDACTED] Convertible Bonds shall be mandatorily and automatically converted into 10 new Shares in respect of which our Company shall allot and issue five Shares to Dragon United and five Shares to Precious Wave, as the bondholders, credited as fully paid, and rank pari passu with the Shares in issue on the conversion, respectively and in particular, in the following manner:

(i) after the completion of the Reorganisation and before the conversion of the [REDACTED] Convertible Bonds, our Company shall be owned as to 62 Shares by Bright Emerald, being the entire issued share capital of our Company; and

(ii) our Company shall allot and issue to each of Dragon United and Precious Wave, credited as fully paid, five new Shares and five new Shares respectively, such that immediately before the Capitalisation Issue and the [REDACTED],ourCompany shall be owned as to 62 Shares by Bright Emerald (which shall represent approximately 86.12% of the issued share capital of our Company), as to five Shares by Dragon United (which shall represent approximately 6.94% of the issued share capital of our Company) and as to five Shares by Precious Wave (which shall represent approximately 6.94% of the issued share capital of our Company).

Consideration and [REDACTED]

The consideration of the aforesaid subscription of the [REDACTED] Convertible Bonds was arrived at arm’s length negotiation between the parties with reference to the price-earnings ratio and discount percentage to [REDACTED] price of recent [REDACTED] investments in GEM companies. The proceeds from the aforesaid subscription had been fully utilised and principally used for the professional expenses incurred by our Group for the preparation of [REDACTED] as at the Latest Practicable Date.

Guarantees

Mr. Thomas Woo and Mr. Paul Grange are the guarantors pursuant to the [REDACTED] Convertible Bonds Subscription Agreement who have, among others, undertaken to procure the due and punctual performance of the obligations of our Company under the [REDACTED] Convertible Bonds Subscription Agreement.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

Voting rights

The [REDACTED] Convertible Bonds shall not confer Dragon United and Precious Wave the right to vote at a general meeting of our Company.

Lock-up arrangement and public float

The Shares to be converted from the [REDACTED] Convertible Bonds and to be held by Dragon United are not subject to any lock-up after [REDACTED], and are considered as part of the public float for the purpose of Rule 11.23 of the GEM Listing Rules after [REDACTED] since Mr. Leslie Kong is an Independent Third Party.

The Shares to be converted from the [REDACTED] Convertible Bonds and to be held by Precious Wave are not subject to any lock-up after [REDACTED], and are considered as part of the public float for the purpose of Rule 11.23 of the GEM Listing Rules after [REDACTED] since Mr. Joseph Tong is an Independent Third Party.

Information on the [REDACTED] Investors and other information

Dragon United is an investment holding company incorporated in the BVI with limited liability on 5 June 2018 and is wholly-owned by Mr. Leslie Kong. Mr. Leslie Kong is a private investor with more than 17 years of experience in the trading industry. He founded Miracle Global Company Limited and served as its director since May 2001. He also founded Wings Finance Limited and served as its director since October 2013. He obtained a special degree of bachelor of science with honours in accounting from the University of Hull in July 1993.

Precious Wave is an investment holding company incorporated in the BVI with limited liability on 5 June 2007 and is wholly-owned by Mr. Joseph Tong. Mr. Joseph Tong is a private investor. He is currently an executive director of Tree Holdings Limited (stock code: 8395),thesharesofwhicharelistedonGEMofthe Stock Exchange, which engages in the sale and distribution of furniture and home accessories. He is responsible for advising on strategic planning of Tree Holdings Limited. Mr. Joseph Tong has more than 30 years of experience in the financial services industry. He was an executive director of Sun Hung Kai &Co.Limited(stockcode:86),acompanylistedontheMainBoardoftheStock Exchange, from December 2003 to January 2016. He also held various senior positions at Sun Hung Kai & Co. Limited from December 2004 to January 2016 such as the chief executive officer of its wealth management, brokerage and capital market division and the chief executive officer of its capital markets and institutional brokerage division. Mr. Joseph Tang was also a director of Bali International Finance Limited (currently known as Sun Hung Kai Structured Finance Limited) from March 2004 to January 2016. From July 2013 to July 2016, he was an independent non-executive director of Carry Wealth Holdings Limited (stock code: 643), a company listed on the Main Board of the Stock Exchange. From April 2016 to January 2017, he was a non-executive director of Mason Financial Holdings Limited (stock code: 273) (currently known as Mason Group Holdings Limited), a company listed on the Main Board of the Stock Exchange. Between 2009 and June 2019,

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HISTORY, REORGANISATION AND GROUP STRUCTURE he was an independent non-executive director of Jih Sun Financial Holdings Company Limited(stockcode:5820),thesharesofwhicharelistedontheTaipeiExchangein Taiwan.

Mr. Joseph Tong obtained a degree of bachelor of social sciences (honours) from the University of Hong Kong in November 1982 and a degree of master of business administration from The Chinese University of Hong Kong in October 1988. He was admitted as a member of the Association of Chartered Certified Accountants in November 2000 and advanced to fellowship status in November 2005.

Our Group acquainted with Mr. Leslie Kong and Mr. Joseph Tong through professional network in the past.

During the Track Record Period, both Mr. Leslie Kong and Mr. Joseph Tong (and/or through Dragon United and Precious Wave) have not been involved in any investment or dealings with our Group and/or any connected persons of our Company save for the aforesaid subscription of the [REDACTED] Convertible Bonds. They invested in us because they were attracted by our growth potential and prospects as a whole.

Mr. Leslie Kong, Mr. Joseph Tong, Dragon United and Precious Wave are our Significant Shareholders.

Mr. Leslie Kong, Mr. Joseph Tong, Dragon United and Precious Wave will not have any special rights or privileges in connection with their subscription of the [REDACTED] Convertible Bonds in our Company which are not generally available to other Shareholders upon [REDACTED].

Mr. Leslie Kong and Mr. Joseph Tong confirm that their source of funding to subscribe for the [REDACTED] Convertible Bonds was from their personal financial resources and not financed directly or indirectly by any other connected persons of our Company.

Save as disclosed in this subsection, to the best knowledge of our Directors, (a) as at the Latest Practicable Date, no shareholder agreement has been entered into amongst Mr. Thomas Woo, Mr. Paul Grange, Mr. Joseph Tong, Mr. Leslie Kong, Bright Emerald, Dragon United and/or Precious Wave; and (b) Mr. Leslie Kong, Mr. Joseph Tong, Dragon United and Precious Wave were Independent Third Parties before the [REDACTED] Investment was made.

Sole Sponsor’s confirmation

In view of the aforesaid in this subsection and since the subscription of the [REDACTED] Convertible Bonds pursuant to the [REDACTED] Convertible Bonds Subscription Agreement was completed on 1 November 2018 (i.e. more than 28 clear days before the date of the first submission of the [REDACTED] form in respect of the [REDACTED]), the Sole Sponsor confirms that the [REDACTED] Investment was in compliance with the letters of interim guidance on [REDACTED] investments (HKEx-

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HISTORY, REORGANISATION AND GROUP STRUCTURE

GL29-12), guidance on [REDACTED] investments (HKEx-GL43-12) and guidance on [REDACTED] investments in convertible instruments (HKEx-GL44-12), issued by the Stock Exchange.

REORGANISATION

For the purpose of the [REDACTED], we underwent the Reorganisation as a result of which our Company became the holding company of our Group.

The Reorganisation involved the following steps:

Stage (1) — Incorporation of Bright Emerald, our Company and Halcyon Moment

Bright Emerald was incorporated in the BVI with limited liability on 2 August 2018 and is authorised to issue a maximum of 50,000 shares of a single class each with a par value of US$1.00. On 11 October 2018, Bright Emerald allotted and issued one share to Mr. Thomas Woo and one share to Mr. Paul Grange at par respectively.

For details of the incorporation of our Company and Halcyon Moment, please refer to the paragraph headed ‘‘Corporate and Business Development History’’ in this section.

Stage (2) — Acquisition of Absolute Marine, Marine Italia and Marinetec by our Company from Mr. Thomas Woo and Mr. Paul Grange

As part of the Reorganisation and pursuant to the Sale and Purchase Agreement dated 29 October 2018:

— Mr. Thomas Woo and Mr. Paul Grange transferred their legal and beneficial interests of their jointly owned one share in Absolute Marine (representing the entire issued share capital of Absolute Marine);

— Mr. Thomas Woo transferred his legal and beneficial interests of 5,000 shares in Marine Italia and Mr. Paul Grange transferred his legal and beneficial interests of 5,000 shares in Marine Italia (collectively representing the entire issued share capital of Marine Italia); and

— Mr. Thomas Woo transferred his legal and beneficial interests of 5,000 shares in Marinetec and Mr. Paul Grange transferred his legal and beneficial interests of 5,000 shares in Marinetec (collectively representing the entire issued share capital of Marinetec),

to our Company (all to be held through our Company’s wholly-owned subsidiary, Halcyon Moment), and as consideration thereof, 12 Shares were allotted and issued, credited as fully paid, to Bright Emerald as directed by Mr. Thomas Woo and Mr. Paul Grange, respectively.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

In the consideration of our Company assigning the entire issued share capital of Absolute Marine, Marine Italia and Marinetec to Halcyon Moment, Halcyon Moment allotted and issued one share credited as fully paid to our Company.

Immediately after the aforesaid transfer of shares, Absolute Marine, Marine Italia and Marinetec became indirect wholly-owned subsidiaries of our Company and Marine Italia Singapore became an indirect non wholly-owned subsidiary of our Company.

THECAPITALISATIONISSUEANDTHE[REDACTED]

We will [REDACTED] the [REDACTED] for [REDACTED] at the [REDACTED]. Conditional upon the crediting of our Company’s share premium account as a result of the allotment and issue of the [REDACTED] pursuant to the [REDACTED], our Directors are authorised to capitalise an amount of HK$[REDACTED] standing to the credit of the share premium account of our Company by applying such sum towards the paying up in full at par of [REDACTED], [REDACTED] and [REDACTED] Shares for allotment and issue to Bright Emerald, Dragon United and Precious Wave, respectively.

OUR GROUP STRUCTURE

The following diagram sets forth the corporate structure of our Group as at 1 May 2018, being the commencement date of the Track Record Period:

Mr. Paul Grange Mr. Thomas Woo

50% 50%

Marinetec Marine Italia Absolute Marine (HK) (HK) (HK)

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HISTORY, REORGANISATION AND GROUP STRUCTURE

The following diagram sets forth the corporate structure of our Group immediately after completion of the Reorganisation:

Mr. Paul Grange Mr. Thomas Woo

50% 50%

Bright Emerald (BVI)

100%

Our Company (Cayman Islands)

100%

Halcyon Moment (BVI)

100% 100% 100%

Marinetec Marine Italia Absolute Marine (HK) (HK) (HK)

65%

Marine Italia Singapore (Singapore) (Note)

Note: Marine Italia Singapore is owned as to 65% by Marine Italia and 35% by 2BY2 Yachts Italia which is wholly-owned by Ms. Karen Kwee.

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HISTORY, REORGANISATION AND GROUP STRUCTURE

The following diagram sets forth the corporate structure of our Group immediately after the conversion of the [REDACTED] Convertible Bonds, the completion of the Capitalisation Issue and the [REDACTED] (without taking into account any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme):

Public Mr. Paul Grange Mr. Thomas Woo Mr. Leslie Kong Mr. Joseph Tong Shareholders

50% 50%

100% 100%

Bright Emerald Dragon United Precious Wave (BVI) (BVI) (BVI)

[REDACTED]% [REDACTED]% [REDACTED]%

Our Company Other public Shareholders (Cayman Islands) [REDACTED]% 100%

Halcyon Moment (BVI)

100% 100% 100%

Marinetec Marine Italia Absolute Marine (HK) (HK) (HK)

65%

Marine Italia Singapore (Singapore) (Note)

Note: Marine Italia Singapore is owned as to 65% by Marine Italia and 35% by 2BY2 Yachts Italia which is wholly-owned by Ms. Karen Kwee.

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OUR BUSINESS

OVERVIEW

We are a yacht dealership group in Hong Kong principally engaging in the sales of first-hand yachts of luxury and mid-to-high-end brands. We also engage in the sales of second-hand yachts and other ancillary accessories and offer a range of value-added services including maintenance and repair services. During the Track Record Period, substantially all of our yacht sales were made in Hong Kong and we expanded our sales network to Singapore, Taiwan and Shenzhen. We have a balanced portfolio with a wide variety of product offerings such as luxury motor yachts, sport boats and inflatable boats to capture a broad scope of customers. We have a sales office in Hong Kong to promote the latest models of yachts, to attract potential customers and to facilitate the sales of our yachts. Our customers are primarily individuals with high disposable income located in Hong Kong who are the end users of our products as well as a number of corporations. As a result of our strong operating capabilities and local market knowledge, we have established strong brand reputation and leading market position in Hong Kong. In addition, we have appointed a local sub-dealer in Taiwan with local market knowledge and network to strategically expand our customer base in Taiwan. In October 2019, we have also appointed a local sub-dealer in Shenzhen to strategically expand our customer base in Shenzhen. According to the Frost & Sullivan Report, our Group ranked third in terms of the revenue generated for the year ended 30 April 2019 among the yacht dealers in Hong Kong.

We began our yacht dealership in Hong Kong in 2014. Our dealerships in luxury motor yachts have been dedicated to Absolute and Azimut, which are amongst the few internationally renowned brands for luxury motor yachts, since 2014 and 2015, respectively. With a view to provide more diversified products to our customers and to capture a wider customer base, we expanded our product offerings by penetrating into other types of boats, including inflatable boats and sport boats. We began our dealership with Zar Formenti to distribute inflatable boats in Hong Kong in 2015. Leveraging on our successful track record of our yacht dealerships for these brands, we further expanded our products by entering into a dealership agreement with Four Winns, which is a sports boat brand, in 2018.

As at the Latest Practicable Date, our brand portfolio included two luxury brands of Absolute and Azimut and two mid-to-high-end brands of Four Winns and Zar Formenti. We are:

. the exclusive authorised dealer of Absolute, an Italian luxury motor yacht manufacturer supplying luxury motor yachts and sports yachts ranging from 40 to 73 feet, in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam. Absolute was honoured in several creditable international awards from 2010 to 2019, e.g. design awards, interior layout and innovation and ‘‘Best European Motor Yacht of the Year’’ in 2017. The sales of first-hand Absolute luxury motor yachts amounted to HK$47.3 million, HK$32.7 million and HK$60.1 million and contributed towards approximately 19.2%, 12.9% and 13.0% of our revenue, for FY2019, FY2020 and FY2021, respectively;

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OUR BUSINESS

. the exclusive authorised dealer of Azimut, an Italian luxury motor yacht manufacturer supplying luxury motor yachts ranging from 34 to 114 feet with broad functionalities from sports, recreation to business, in Hong Kong, Taiwan, Guangdong Province in the PRC, Macau and Singapore. According to the Frost & Sullivan Report, Azimut is one of the world-leading yacht manufacturers having the longest history in Hong Kong. Azimut has ranked first among all yacht manufacturers worldwide in terms of length built since 2014. Founded in 1969, Azimut has been globally recognised and was awarded the ‘‘Best Brand Presence in Asia’’ by the Asia Boating Awards in 2017, 2018, 2019. The sales of first-hand Azimut luxury motor yachts amounted to HK$181.4 million, HK$195.4 million and HK$325.0 million and contributed towards approximately 73.5%, 77.1% and 70.5% of our revenue, for FY2019, FY2020 and FY2021, respectively;

As at the Latest Practicable Date, we had been granted the right of dealership of yachts and other boats under four dealership agreements, covering Hong Kong, PRC and selected locations in the Southeast Asia, namely, (a) long-term exclusive dealership agreements for a term of five years for distribution of Azimut yachts in Hong Kong, Taiwan, Guangdong Province in the PRC and Macau, and for a term of two years for distribution of Azimut yachts in Singapore; (b) a long-term exclusive dealership agreement for a term of five years for distribution of Absolute yachts in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam; (c) a dealership agreement for a term of one year for distribution of Four Winns sport boats in Hong Kong; and (d) a dealership agreement for a term of one year for distribution of Zar Formenti inflatable boats in Hong Kong.

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OUR BUSINESS

According to the Frost & Sullivan Report, it is a market norm for yacht manufacturers to renew the contract with their exclusive yacht dealer on an annual basis based on the sales performance of the yacht dealer. To obtain exclusive yacht dealership in a territory, a yacht dealer is required to give a non-competition undertaking to the yacht manufacturer that it will not engage in the dealership of other yacht brands which may compete with the yacht manufacturer unless authorisation or waiver from the yacht manufacturer is obtained. With our proven track record, operating capabilities and local market knowledge, we have established a strong brand reputation and leading market position in Hong Kong. We are:

. one of the top five dealers out of approximately 100 yacht dealers of Azimut yachts in the world in 2016 and 2017;

. the first dealer to sell Absolute yachts in Hong Kong. According to the Frost & Sullivan Report, our Group was awarded one of the top Absolute dealers in 2016 and 2017 in recognition of our sales achievements and marketing efforts; and

. well-positioned and have obtained authorisations and consents from both AbsoluteandAzimuttodealwithyachtsofbothbrandsaswellasFourWinns and Zar Formenti. The exceptional long-term exclusive dealership agreement for a term of five years and authorisation granted to our Group to deal with more than one yacht brand by Absolute and Azimut indicates our mutual beneficial and strategic cooperation relationships.

We have a customer-oriented business philosophy and strive to provide professional services through the entire yacht-relating spending cycle. We have maintained our customer data base to collect and analyse customer information such as their profiles and preferences as well as purchase records, which in turn enables us to effectively allocate our resources, tailor our sales efforts and utilise our sales networks. Our management and marketing team normally promotes and solicits customers through traditional sales channels such as boat shows and other marketing channels such as industry and non-industry magazines, online sales platforms and social media tools. We also cooperate with third-party marina operators and luxury car clubs in Hong Kong to organise promotional activities and attract our potential customers with high spending power. In addition to our marketing activities, our Directors believe that we are also made known to our customers from word-of-mouth referrals.

To facilitate the sales of first-hand yachts, we also engage in the trade-in and sales of second-hand yachts. We believe that the acquisition of used yachts from our existing customers and new customers provides us with opportunities to cultivate new customers or strengthen our relationship with the existing customers and potentially generate additional sales from them. We also offer a range of value-added services, such as maintenance and repair services, sales of spare parts and accessories and yacht licensing services at a service charge. To provide better luxury and customised experience for our customers, we also offer complimentary services such as yacht provisioning and equipping services and captain and crew sourcing services. We also have been continuously improving our after-sales capabilities. Our customers who purchased yachts from us also sought for our

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OUR BUSINESS maintenance and repair services during the Track Record Period. We believe that our broad range of products and services allows us to provide a one-stop service to our customers and generate a variety of profit streams from our customers.

The following table sets out the breakdown of sales volume and revenue during the Track Record Period:

Year ended 30 April 2019 2020 2021 Sales % of total Sales % of total Sales % of total volume revenue volume revenue volume revenue (Number (Number (Number of yacht) HK$’000 % of yacht) HK$’000 % of yacht) HK$’000 %

237,589 96.3 241,388 95.2 440,570 95.5

Service income 9,121 3.7 12,187 4.8 20,667 4.5

Total: 246,710 100.0 253,575 100.0 461,237 100.0

As a result of the COVID-19 outbreak, it is expected that there will be a short-term impact on the Group’s operation as the outbreak of COVID-19 in Hong Kong since January 2020 is considered a ‘‘black swan’’ event worldwide and such unprecedented event may bring about unpredictable challenges to the global economy, it is legitimate that individuals, including high net worth individuals, will take a more cautious attitude towards consumption and thus making, the business environment difficult. Accordingly, the outbreak of COVID-19 has certain financial and operational impact on our Group. For details, see ‘‘Business — Our Business — Impact of the outbreak of COVID-19 on our Group’’ in this section.

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OUR BUSINESS

OUR COMPETITIVE STRENGTHS

We believe that we have the following competitive strengths which enable us to further grow and differentiate ourselves from our competitors:

Strong and stable relationships with leading yacht manufacturers, in particular, our strategic and exclusive five-year dealership agreement with each of Absolute and Azimut

We have established a strong and stable strategic cooperation with Absolute and Azimut since 2014 and 2015, respectively. Our founder, one of our Controlling Shareholders and executive Directors, Mr. Thomas Woo, launched and introduced Absolute yachts in Hong Kong through establishing Absolute Marine and one of our Controlling Shareholders and executive Directors, Mr. Paul Grange has already established a long working relationship with Azimut during his tenure at Simpson Marine Limited, where he was the group’s sales manager of Azimut yachts. Our Directors believe that this was the foundation of our Group’s strong business relationship with Absolute and Azimut. In addition to our strong business relationship, we also have a proven track record with Absolute and Azimut. As such, we have been appointed the exclusive dealer of (i) Azimut in Hong Kong, Taiwan, Guangdong Province in the PRC and Macau for a term of five years (which is a special business cooperative strategy between Azimut and us as it is Azimut’s normal practice to appoint executive dealership on a year to year basis), and Singapore for a term of two years and of (ii) Absolute in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam for a term of five years (which is a special business cooperative strategy between Absolute and us as it is Absolute’s normal practice to appoint executive dealership on a year to year basis), as at the Latest Practicable Date. As yacht manufacturers impose strict criteria when selecting their dealers and due to the high entry barrier of the yacht distribution market, our proven ability to generate sales and to grow new markets for our yacht manufacturers helps strengthen our ongoing relationships with them and provides us credibility to attract new yacht manufacturers and apply for dealerships when such expansion is strategically desirable. We are the first dealer to sell Absolute yachts in Hong Kong. Our Group was awarded one of the top Absolute dealers in 2016 and 2017 in recognition of our sales achievements and marketing efforts. On the other hand, Azimut is one of the world-leading yacht manufacturers having the longest history in Hong Kong. Azimut has ranked first among all yacht manufacturers worldwide in terms of length built since 2014. Our Group was also one of the top five dealers out of approximately 100 yacht dealers of Azimut yachts in the world in 2016 and 2017. Being the exclusive dealer of the world’s leading yacht brands in the regions which we operate enables our Group to sustain continuous attractiveness to our customers.

We have been invited by the yacht manufacturers to participate in their high-profile marketing events. According to the Frost & Sullivan Report, it is a market norm for the yacht manufacturers to renew the contract with their exclusive yacht dealer on an annual basis based on the sales performance of the yacht dealer. Given our stable working relationship and excellent track record with Absolute and Azimut, we were granted a five- year exclusive dealership by both Absolute and Azimut which are not a common industry practice.

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OUR BUSINESS

We believe that our operational capabilities and expertise have assisted yacht manufacturerstogainmarketshareandwincustomerloyalty,whichinturnhave contributed to our long-term relationships with them. We believe that we are well placed to further strengthen our market position, enter into new markets and capture growth.

Strategic network in Hong Kong and exclusive dealership rights in neighbouring regions with strong growth potential

We have established strategic network and accumulated customer pool in Hong Kong. According to the Frost & Sullivan Report, our Group ranked third in terms of the revenue generated in the year ended 30 April 2019 among the yacht dealers in Hong Kong. Other than being the exclusive dealer of Azimut and Absolute yachts in Hong Kong, we are also the exclusive dealer of Azimut in Taiwan, Guangdong Province in the PRC, Macau and Singapore and of Absolute in Guangdong Province in the PRC, Macau, Thailand and Vietnam, respectively. Leveraging on our experience and market positioning in the yacht distribution market in Hong Kong, we believe we are able to capture the upcoming opportunities in the yacht distribution market in the neighbouring regions.

Our Group has established strategic sales network in capturing the markets in the neighbouring regions. To penetrate into the Taiwan market, we have established strategic relationship with a local Taiwanese sub-dealer with local market knowledge and network in Taiwan for the sale of Azimut yachts. During the Track Record Period, our TW sub-dealer completed the sales of three Azimut luxury motor yachts. See ‘‘Sub-dealership Arrangement’’ in this section. Our Group also incorporated Marine Italia Singapore together with 2BY2 Yachts Italia in July 2018 to gain market share and exposure in Singapore as well as its surrounding territories. See ‘‘History, Reorganisation and Group Structure’’ in this document. During the Track Record Period, we completed the sale of four Azimut luxury motor yachts in Singapore. In October 2019, we further expanded our sales network to Shenzhen by appointing a local Chinese sub-dealer. According to the Frost & Sullivan Report, our SZ sub-dealer is ranked the one of the top five players in Guangdong Province generating a revenue of approximately RMB17.4 million in 2019. During the Track Record Period, our SZ sub-dealer has completed the sales of one Azimut luxury motor yachts and there is one secured sale of an Azimut luxury motor yacht as at the Latest Practicable Date.

By leveraging our strong dealership brands, established foothold and comprehensive experience and knowledge in the yacht distribution market in Hong Kong, we believe our solid foundation enables us to further strengthen our leading market position in our existing regions and replicate our success in the neighbouring regions.

Customer-oriented business philosophy supported by our target marketing and sales channels and efficient customer management

Our customer-oriented business philosophy enables us to better understand and anticipate customer needs and to provide professional services throughout the entire yacht- related spending cycle. To provide better luxury and customised experience for our

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OUR BUSINESS customers, we offer complimentary services such as yacht provisioning and equipping services and captain and crew sourcing services to strengthen our relationship with these customers.

We have maintained our customer data base to collect and analyse customer information such as their profiles and preferences as well as purchase records. Our management and marketing team normally promote and solicit customers through traditional sales channels such as boat shows and other marketing channels such as industry and non-industry magazines, online sales platforms and social media tools, which allow us to incur lower advertisement and marketing expenses compared with traditional marketing channels. We also cooperate with third-party marina operators and luxury car clubs in Hong Kong to organise promotional activities and attract our potential customers with higher spending power. In addition to our marketing activities, our Directors believe that we are also made known to our customers from word-of-mouth referrals.

Through our customer data base analysis and regular communication with our customers, we are able to effectively allocate our sales resources to meet the market demand and develop a loyal customer base over time.

We provide a wide variety of product offerings and value-added services

We believe that our product offerings have been a key factor to our success, particularly in the luxury motor yacht market, in which customers generally are less price- sensitive and place more value on comprehensive and high quality products and services.

We have a balanced portfolio of yacht brands with a wide variety of offerings such as luxury motor yachts, sport boats and inflatable boats to capture a broad scope of customers looking for different types of boating experience. We also engage in the sales of second- hand yachts and are able to secure supplies of second-hand yachts from our existing customers. The acquisition of used yachts from our existing customers and new customers provides us with opportunities to cultivate new customers or strengthen our relationship with the existing customers and potentially generate additional sales from them.

Our value-added services encompass not only conventional services such as repair and maintenance services and sales of spare parts and accessories, but also include services such as yacht licensing services. We believe this has enabled us, and will continue to enable us, to enjoy a steady flow of revenue and profit from both sales of yachts and provision of value- added services.

Leveraging our high-quality products and broad range of value-added services, our customers who purchased yachts from us also sought for our maintenance and repair services during the Track Record Period. We believe that our high-quality value-added services and expertise have enabled us to develop long-term and stable relationships with our customers, which in turn has helped us to enlarge our customer base, expand our revenue source and improve our results of operations.

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OUR BUSINESS

Experienced senior management team with a strong track record and are supported by a team of talented and well-trained professionals

Our executive Directors and senior management team comprise a group of highly experienced professionals in various fields of the yacht distribution market. Mr. Thomas Woo, our founder, one of our Controlling Shareholders and executive Directors, was the sole proprietor engaging in a yacht trading business under the name of ‘‘Marine Italia’’ from 2006 to 2013 and founded our Group in 2014. Mr. Paul Grange, one of our Controlling Shareholders and executive Directors, has more than 25 years of experience in the yacht distribution market and worked in various yacht dealership groups prior to joining our Group. In order to offer professional services to our customers who expect attentive and meticulous services, our management team members are equipped with industry updates, product information and related technical parameters and specifications to address the specific demands of the customers. For more details of the industry experience of our senior management, please see ‘‘Directors and Senior Management’’ in this document. Our executive Directors and senior management team are committed to understand our customers’ needs and market dynamics. We believe that our management team possesses in- depth knowledge critical to success in the yacht distribution market and is capable of seizing market opportunities, formulating sound business strategies, assessing and managing risks, implementing management schemes and increasing our overall profit to maximise our shareholder value.

Our management team is supported by a team of talented and well-trained professionals. We recognise that our employees are key to maintaining the success of our business. As a result, we focus on identifying, recruiting and training talented individuals. Based on our experience and the training programmes of our yacht manufacturers, we have developed standardised processes for the training of our employees and continuous upgrading of their skills and know-how. We believe that the continuous development of our employees provides us with a solid foundation for the continued success of our business.

OUR STRATEGIES

Our objective is to further strengthen our position as a yacht dealer and expand our market share by pursuing the following strategies:

Leverage on our strong dealership brands to further expand our market share in Hong Kong and extend our footprint into Singapore, and Guangdong Province and Hainan Province in the PRC to capture the rising opportunities

Based on our established competitive strengths in the yacht distribution market in Hong Kong, we target to continue consolidating our prominent position in Hong Kong and expand our market share. With the market potentials and surging purchasing power of the Singapore and the PRC markets, we also plan to penetrate into these markets by enhancing our market presence in these locations.

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OUR BUSINESS

Hong Kong

Leveraging on our strong dealership brands and reputation, as well as our relationships with our yacht manufacturers and customers, we intend to continue to strengthen our operation in Hong Kong. According to the Frost & Sullivan Report, as the major customers of yachts are usually high net worth individuals, changes in the macro- economic condition, save for unexpected events such as COVID-19, which may lead to a worldwide economic disruption and downturn, the consumption behaviour of these consumers, as they tend to cultivate habits of decentralised management of their wealth and their pursuit for luxury products and customised experience, is a long-established habit that is not easy to change. As the outbreak of COVID-19 in Hong Kong since January 2020 is considered a ‘‘black swan’’ event worldwide and such unprecedented event may bring about unpredictable challenges to the global economy, it is legitimate that individuals, including high net worth individuals, will take a more cautious attitude towards consumption, and thus, making the business environment difficult. However, this is considered to be short-term and the overall economic environment is expected to rebound once COVID-19 is under control. Therefore, the outbreak of COVID-19 is considered to be a temporary issue. According to the Frost & Sullivan Report, the growth in the revenue generated in the yacht distribution market in Hong Kong is forecasted to be relatively stable at a CAGR of approximately 11.3%, from approximately HK$3,395.0 million in 2021 to approximately HK$4,518.5 million in 2025, and there are a number of market drivers that will continue to support the growth of the yacht distribution market in Hong Kong. There are approximately 10 yacht and boat clubs in Hong Kong which provide various services and trainings to yacht owners lay a solid foundation for the development of yacht industry in Hong Kong. The Hong Kong Government has also implemented supportive policies such as construction of berths and yachts are allowed to stop at shelters at a lower berthing fee. According to the Frost & Sullivan Report, there will be an expected increase in the number of private moorings at a CAGR of approximately 0.7% from 2021 to 2025 as (i) there will be an increase of 1,200 private moorings in Hong Kong by expanding three existing mooring sites in Tso Wo Hang, Shuen Wan Hoi and Tai Mei Tuk; and (ii) the Marine Department is considering to set up temporary private moorings in typhoon shelters to ease the territory-wide shortage in berthing spaces. The supply of shelter for recreational vessels including yachts will increase to 230.9 hectares in 2030, mainly attributable to the inclusion of sheltered space available in Shuen Wan Hoi, Cheung Sha Lan and Nim Shue Wan and a proposed marina facility in Tung Chung. Besides, the new Lantau Yacht Club (LYC) Marina which was under redeveloped and targeted to open in late 2020 and will provide around 150 berths and it will be the first marina in Hong Kong catering for super yachts up to 100 meters in length. It is expected that the number of licensed yachts in Hong Kong will keep stable growth from approximately 10,400 units in 2020 and reach approximately 11,000 units in 2024. Apart from targeting at first-time customers which purchase new luxury motor yachts, we also aim to expand our sales to existing luxury motor yacht owners which seek to trade-in their second-hand luxury motor yachts and purchase first-hand luxury motor yachts from us. In addition, we intend to expand our product offerings by obtaining the exclusive distribution rights of a new yacht brand that does not compete with Absolute and Azimut.

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OUR BUSINESS

To achieve this, we plan to hire two additional sales manager in our Hong Kong sales office responsible for handling sales orders in Hong Kong and diversifying the products. Our Directors could also devote more time and resources for our expansion in other territories.

Our Group intends to utilise approximately HK$[REDACTED] or [REDACTED]%of the net [REDACTED] from the [REDACTED] for the expansion plan in Hong Kong.

Singapore

To further capture the market opportunities to expand our sales in Singapore, we intend to set up a new sales office in Singapore. Our Group incorporated Marine Italia Singapore together with 2BY2 Yachts Italia in July 2018 to gain market share and exposure in Singapore and its surrounding territories for distributing yachts in Singapore. Our Group considers that there is a strong growth potential in the yacht distribution market in Singapore as (i) it is more economical for consumers in the neighbouring regions to purchase yachts in Singapore, which is a free port with visitor-friendly regulations than other non-free port countries. The expected increase in the number of high-net-worth individuals in the neighbouring countries such as Malaysia and Indonesia also suggests that there is a growing demand for yachts and super yachts in Singapore; and (ii) the income per capita in Singapore ranked ninth globally in 2020, which indicates the high purchasing power of the consumers in Singapore. According to the Frost & Sullivan Report, it is expected that the number of high net worth individuals who could afford luxury motor yachts in Singapore will increase at a CAGR of approximately 4.2% from 2021 to 2024; and (iv) the largest boat show in Asia is held annually in Singapore. Accumulated with Asia’s high net worth individuals, leading yacht manufacturers and yacht dealers, boat shows help to boost yacht sales and enlarge the downstream customer pool in Singapore.

During the Track Record Period, we completed the sale of three Azimut luxury motor yachts in Singapore. To capture the business opportunities and strong growth in the yacht distribution market in Singapore and avoid losing the time efforts and investment spent by our Group during the Track Record Period, we intend to lease an office near ONE°15 Marina Sentosa Cove in around March 2021 with an estimated area of approximately 979 sq.ft.. Our Group plans to establish the sales office in landmark location in Singapore with proximity to the berth which display our demonstration yacht. As at the Latest Practicable Date, we had not yet identified any specific target premises. We intend to hire two staff comprising one senior sales manager and one administrative and accounting staff to support our Singapore sales office and manage relationships with our customers.

Our Group intends to utilise approximately HK$[REDACTED] or [REDACTED]%of the net [REDACTED] from the [REDACTED] fortheexpansionplaninSingapore.

Guangdong Province, the PRC

According to the Frost & Sullivan Report, the holding quantity of yacht in the Great Bay Area gradually increased from 17,456 units in 2015 to 55,396 in 2020, representing a CAGR of 33.5%. In addition, the PRC government has announced several supportive policies in recent years which are favourable to the market players in the yacht distribution

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OUR BUSINESS market in the PRC. For instance, the PRC government announced ‘‘China (Guangdong) Pilot Free Trade Zones, Hong Kong and Macau Yacht Free Navigation Plan’’ in 2017, whichallowsyachtsregisteredinHongKongandMacautosailandmoorinthePearlRiver Delta with simplified procedures. In response to the favourable policies introduced by the PRC government in the Great Bay Area, it is expected that the holding quantity of yachts in the Great Bay Area in the PRC will increase at a CAGR of 3.8% from 2020 to 2024 and drive the demand of yachts. According to the Frost & Sullivan Report, there were only a limited number of sizeable yacht manufacturing companies in Guangdong Province in the PRC by the end of 2019. Moreover, in February 2019, the government of the Guangdong Province in the PRC issued measures regarding improvement in business environment to facilitate cross-border trade, which highlight the simplifying clearance procedures of yachts and improving yacht entry and exit guarantee between Guangdong Province and Hong Kong and Macau. It is expected that the scheme along with the measures to promote and realise the free travel between Hong Kong and Mainland China will create more opportunities in the yachts market including the distribution segment in Hong Kong by offering alternative sailing routes. In addition, a yacht exhibition which was held in Shenzhen in October 2019 and which our Group participated in, is expected to attract more people to participate in such yacht activities through the provision of yacht experiences, to develop consumer concept of yachts and different attitudes towards leisure activities and lifestyle, which in turn, is expected to stimulate the yacht industry. As such, our Directors believe that there is a great demand for imported yachts in Guangdong Province in the PRC, and that a new service hub in Guangdong Province in the PRC will extend our Group’s service coverage and attract consumers who are looking to sail new routes in the Great Bay Area. Combining with the existing dealership office and shipyard in Hong Kong, the expansions create a network of shared service hub enjoyed by both our Group’s existing Hong Kong customers and potential PRC customers.

As we are granted the exclusive dealership rights from Absolute and Azimut to sell their products in Guangdong Province in the PRC, we intend to increase our penetration in Guangdong Province in the PRC where we believe there is ample room for growth. We plan to set up a sales office in Nanshan in Shenzhen as our foothold in Guangdong Province in the PRC in around September 2021. The target new office in Shenzhen is expected to have an area of approximately 2,672 sq.ft.. As the yacht and boat clubs in Shenzhen are far away from the city centres, we plan to set up the sales office in downtown area to serve as a promotion platform and we will guide our potential customers through the specification process in the sales office. According to the Frost & Sullivan Report, yachts are supposed to receive regular maintenance which may not be fulfilled by overseas manufacturers at any time due to geographic limitations, and therefore local dealers are required to provide fully integrated services. Our Directors consider that a local sales office in Guangdong Province in the PRC is important for us to penetrate into the local market as we can handle customers’ enquires, maintain relationship with our customers and provide services in a prompt manner. As at the Latest Practicable Date, we had not yet identified any specific target premise. We intend to hire two staff comprising of one sales manager and one administrative staff to support our Shenzhen sales office for the sales and marketing operations in the Guangdong Province in the PRC.

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OUR BUSINESS

Our Group intends to utilise approximately HK$[REDACTED] or [REDACTED]%of the net [REDACTED] from the [REDACTED] for the expansion in Guangdong Province in the PRC.

Hainan Province, the PRC

In addition to the Great Bay Area, our Group believes that there is also a strong growth potential in Hainan Province in the PRC which is featured with its long coastline providing sufficient berths for yachts. The region has comprehensive related infrastructure such as marinas, berth spaces and training institutions. According to the Frost & Sullivan Report, the yacht industry in Hainan Province in the PRC has experienced breakthrough since 2009, there were around 30 yacht clubs in 2019 in Hainan Province in the PRC, and the number of yacht clubs in Hainan Province in the PRC is expected to increase in the future with supportive government policies. The PRC government has issued guidance which outlined the simplification of yachts entry to facilitate free yacht tour between Hainan Province in the PRC, Macau and Hong Kong and the construction of yacht resort town to promote the yacht industry from yacht designing, manufacturing, repair and maintenance as well as tourism. It is estimated that the holding quantity of yachts in Hainan Province in the PRC will embrace an upward trend from 2020 to 2024, at a CAGR of approximately 12.7%, which can drive the further development of yacht distribution market. Similar to the yacht industry in Guangdong Province in the PRC, according to the Frost & Sullivan Report, there were only a limited number of sizeable yacht manufacturing companiesinHainanProvinceinthePRCbytheend of 2019. As such, we believe that there isagreatdemandforimportedyachtsinHainanProvinceinthePRC.

To take advantage of the PRC government policies in Hainan Province in the PRC, we plan to set up a sales office in Sanya in Hainan Province in the PRC in around September 2021 to expand our sales coverage to the population in the vicinity. The target new office in Hainan Province in the PRC is expected to have an area of approximately 2,780 sq.ft. with proximity to the berth which display our demonstration yacht. As at the Latest Practicable Date, we had not yet identified any specific target premises. We intend to hire two staff comprising one senior sales manager and one administrative and accounting staff to support our sales office in Hainan Province in the PRC.

Our Group intends to utilise approximately HK$[REDACTED] or [REDACTED]%of the net [REDACTED] from the [REDACTED] fortheexpansioninHainanProvinceinthe PRC.

Having considered the strong growth potential in Hainan Province, our Group has negotiated with Azimut to expand our exclusive dealership rights to deal with their products to Hainan Province in the PRC. Given our stable relationship with Azimut and our proven track record, Azimut has been supportive and agreed to grant exclusive dealership right to us to sell their products in Hainan Province in the PRC subject to the [REDACTED] and the opening of the sales office in Sanya in Hainan Province in the PRC, ordering of a demonstration yacht for sales and conducting marketing activities in the region. It is expected that the new sales office in Hainan Province in the PRC would (i) strengthen our relationship with our customers by giving timely responses to our customers’ enquiries,

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OUR BUSINESS providing prompt services in the region and supply yachts that suit the local preferences; and (ii) strengthen our brand presence by proactively reaching potential customers and look for new opportunities.

The following table sets forth the details of our expansion plan in relation to the establishment of new sales offices in Singapore, Shenzhen and Hainan Province in the PRC:

Location Approximate Estimated total costs expected Estimated and expenditure Current status opening date area Breakeven period Investment payback period for 24 months (sq.ft.) (Notes 1 and 3) (Notes 2 and 3)

Singapore Location selection First quarter of 979 Eight months from 14 months from Approximately stage 2022 commencement of commencement of HK$3.3 million operation operations

Shenzhen Location selection Third quarter of 2,672 12 months from 17 months from Approximately stage 2022 commencement of commencement of HK$1.7 million operation operation

Hainan Province, Location selection Third quarter of 2,780 17 months from 17 months from Approximately the PRC stage 2022 commencement of commencement of HK$0.8 million operation operation

Notes:

(1) Breakeven period refers to the period of time required to recover for a sales office to generate sales equal to its operating cost for the first time. Operating costs include marketing and promotion costs in digital magazines, rent of office, costs in participating in yacht shows, wages of employees and berth rental. We estimate that the sales office to breakeven when we complete the sale of the first yacht in the respective offices’.

(2) Investment payback period refers to the period of time required to recover the initial setup costs and accumulated operating costs since start-up. The initial setup costs includes the operating costs as well as investment costs such as costs for leasehold improvement and rental deposit of the sales office. We estimate the sales office to achieve investment payback when we complete the sale of the second yacht in Singapore and Shenzhen, and when we complete the sale of the first yacht in Hainan Province in the PRC. The shorter payback period for the sales office in Hainan Province in the PRC (‘‘Hainan Sales Offices’’) can be attributed to the lower marketing cost budgeted by the management of our Group.

The breakeven period and investment payback period for the Hainan Sales Office are expected to be of the same length because of (i) the low month-over-month operating cost; and (ii) the Company’s established brand awareness.

There will be a low month-over-month operating cost as the Hainan Sales Office will be our Group’s second sales office in the PRC. It is projected to experience less cashflow outlay for operating cost since major marketing expenses such as yacht shows and digital magazines are incurred and shared with our Group’s first sales office in Guangdong Province in the PRC. Our Directors believe that economies of scale can be achieved with an estimated lower monthly operating cost of approximately HK$85,000.

In addition, as the Hainan Sales Office will be our Group’s third sales office after establishing a sales office in Singapore and Guangdong Province in the PRC, our Directors believe that our Group will establish its brand awareness and are confident that the first yacht sale would be an Azimut 25M (or similar size and price range) which yields a relatively sizeable cash inflow of approximately HK$4.8 million being the gross profit margin of the transaction.

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OUR BUSINESS

Based on the above, it is expected that the Hainan Sales Office will breakeven on its first sale as the gross profit from the yacht will exceed the monthly operating cost. Payback on the investment would also be achieved as the accumulated operating cost plus setup fee up to the first sale would not exceed the cashflow return of HK$4.8 million.

(3) The time to breakeven period and achieve investment payback depends on (i) the gross profit margin of the yachts expected to be sold; (ii) the delivery schedule which affect the time of revenue recognition; (iii) whether demonstration yacht of that particular yacht model is available in stock and whether modification work is required by the customers which might affect the delivery schedule; (iv) the marketing and promotion activities invested by us in that particular sales office.

Our Group intends to utilise approximately HK$[REDACTED] ([REDACTED]%of the net [REDACTED] of the [REDACTED]) to implement this strategy.

Diversify our product offerings and invest in demonstration yachts to boost our sales

We have been expanding and will continue to expand our supplier base by exploring cooperation opportunities with new suppliers of products that do not compete with Absolute and Azimut such as sailing boats and fishing boats and introducing new product segments that we consider to have growth potential. We plan to invest and expand our sales in super yacht, which is capital intensive with suggested retail price of more than HK$35.0 million.

According to the Frost & Sullivan Report, similar to the sales of other luxury goods where customers tend to inspect or experience the products in showrooms or outlets, yacht demonstration is important in the sales of yachts, especially for the sales of luxury motor yachts including super yachts. Customers are more inclined to purchase a luxury motor yacht including super yacht if they can physically inspect and get access to the yacht rather than merely read through the product brochures. This also coheres with our previous experience in the sales of luxury motor yachts in Hong Kong where we managed to sell a new yacht with the purchase of a demonstration yacht of the same model to showcase to our customers.

Hong Kong

We plan to purchase a demonstration super yacht, Azimut Grande 25M, of approximately 87.4 feet in length, to be showcased in Hong Kong, multiple Great Bay Area locations as well as Hainan Province in the PRC. According to Frost & Sullivan Report, Azimut is well-known for its super yachts and was awarded the ‘‘World Super Yacht Award’’ in 2018 and ‘‘Asia Pacific Boating Award’’ in 2019. There is also a growing demand for super yachts as driven by the notable growth in the number high net worth individuals at a year-to-year growth of approximately 6.6%, during 2019 and 2020 globally. There is also a demand in the downstream customers for super yachts which are large enough to hold business banquets or parties.

Our Group intends to utilise approximately HK$[REDACTED] or [REDACTED]%of the net [REDACTED] from the [REDACTED] as 50% deposit for purchasing the demonstration super yacht to be showcased in Hong Kong, multiple Great Bay Area locationsaswellasHainanProvinceinthePRC.

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OUR BUSINESS

Singapore

We plan to purchase a demonstration luxury motor yacht to be showcased in Singapore to create market awareness. Our Directors believe that the demonstration yacht will provide a sales platform for us to promote our brand and reach out new customers. Unlike Hong Kong where we can borrow yachts from our customers for display to our potential customers, we do not have an established customer base in Singapore to borrow yachts for showcase to our potential customers. According to the Frost & Sullivan Report, it is common for yacht dealers to purchase demonstration yachts to push sales especially when entering into a new market with no existing customers or introducing new product lines. Yacht demonstration provides a sales platform for the yacht dealers to carry out their marketing initiatives where the potential customers are attracted and gathered. Similar to the sales of most of the high-end luxury products such as motor vehicles and jewelleries with showrooms to display the products, yacht demonstration also promotes yacht sales as customers can visualise and experience the high-tech appliances and luxurious decorations of yachts personally.

Our Group intends to utilise approximately HK$[REDACTED] or [REDACTED]%as 50% deposit for purchasing the demonstration luxury motor yacht to be showcased in Singapore.

Enhance our brand recognition through effective marketing strategies

Our Directors believe that the awareness and recognition of our brand is crucial to our success, as well as to differentiate ourselves from our competitors. As part of our sales and marketing efforts, we participate in local and international boat shows at boating locations, conventions or marinas. We cooperate with third parties such as local marina operators and luxury car clubs to organise promotional events, place advertisements in industry and non- industry magazines and online platform. For FY2019, FY2020 and FY2021, our selling and marketing expenses amounted to approximately HK$3.5 million, HK$6.1 million and HK$3.8 million, accounting for approximately 1.4%, 2.4% and 0.8% of our total revenue, respectively. For further details of our sales and marketing activities, please see ‘‘Sales and Marketing — Marketing and promotion’’ in this section.

To support our expansion plan in Hong Kong, Singapore and the PRC, in addition to our existing sales and marketing effort, we intend to intensify our sales and marketing efforts in Singapore and the PRC by placing advertisements in digital industry magazines and participating in additional boat shows in Hong Kong, Singapore and the PRC to actively solicit new business opportunities.

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OUR BUSINESS

Our Group intends to utilise HK$[REDACTED] (or [REDACTED]% of the net [REDACTED] from the [REDACTED]) to implement this strategy, of which (i) approximately HK$[REDACTED] or [REDACTED]% for placing advertisements in digital industry magazines in Singapore; (ii) approximately HK$[REDACTED] or [REDACTED]% for placing advertisements in digital industry magazines in Guangdong Province in the PRC; (iii) approximately HK$[REDACTED] or [REDACTED]%for participating in additional boat shows in Hong Kong; (iv) approximately HK$[REDACTED] or [REDACTED]% for participating in additional boat shows in Singapore; and (v) approximately HK$[REDACTED] or [REDACTED]% for participating in additional boat shows in the PRC.

As advised by our Singapore Legal Advisers, save that certain laws and regulations and/or licenses, permits and regulations shall apply and/or be required to be obtained or procured by our Group as disclosed in the paragraph headed ‘‘Regulatory Overview — Singapore Laws and Regulations’’ in this document should our Group buy inventory or carry stock of yacht(s) or otherwise own any yacht(s) (whether for demonstration or sale or otherwise) and/or sail, use, operate or control any yachts in Singapore waters, our Group is not required to obtain any special licences or permits to conduct the business of sales of yachts in Singapore under Singapore laws and regulations. As advised by our PRC Legal Advisers, save for completion of the filing procedures at the relevant PRC authorities, the obtaining the relevant import licence as the case may be upon import of the yachts, and certain laws and regulations and/or licenses, permits and regulations which shall apply and/ or be required to be obtained or procured by our Group as disclosed in the paragraph headed ‘‘Regulatory Overview — PRC Laws and Regulations’’ in this document, our Group is not required to obtain any special licences or permits to conduct the business of sales of yachts in Guangdong Province and Hainan Province in the PRC under the PRC laws and regulations.

OUR BUSINESS

We are a yacht dealership group in Hong Kong principally engaging in the sales of first-hand yachts of luxury and mid-to-high-end brands. During the Track Record Period, substantially all of our yacht sales were made in Hong Kong and we expanded our sales network to Singapore, Taiwan and Shenzhen. To capture a wider customer base, we expanded our product offerings by penetrating into other types of boats, including inflatable boats and sport boats.

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OUR BUSINESS

The map below sets forth the territories of our existing dealerships as at the Latest Practicable Date:

Guangdong Province, the PRC Taiwan

Hong Kong

Macau Thailand Vietnam

Singapore

Absolute Absolute and Azimut

Azimut Absolute, Azimut, Four Winns and Zar Formenti

We derived a majority of our revenue from the sale of first-hand yachts. Apart from sales of first-hand yachts, we also engage in the sales of second-hand yachts and spare parts and accessories and derived service income from our value-added services, such as maintenance and repair services and yacht licensing services.

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OUR BUSINESS

The following table sets out the breakdown of sale volume and revenue during the Track Record Period:

237,589 96.3 241,388 95.2 440,570 95.5

Service income 9,121 3.7 12,187 4.8 20,667 4.5

Total: 246,710 100.0 253,575 100.0 461,237 100.0

Impact of the outbreak of COVID-19 on our Group

Starting from December 2019, an outbreak of respiratory illness caused by COVID-19, has spread worldwide affecting tens of million people globally. As such, governments of various countries have been taking drastic measures to curb the spread of COVID-19, such as border controls and quarantine measures. On 21 March 2020, the Prime Minister of Italy, Giuseppe Conte, had announced that all Italian business must close until 3 April 2020 with the exception of those essential to maintaining the country’s supply chain, in order to control the spread of COVID-19. On 1 April 2020, Minister of Health Roberto Speranza announced the extension of the lockdown in Italy to be in effect until 13 April 2020. On 10 April 2020, the lockdown in Italy was further extended until 3 May 2020, with the exception of certain shops being allowed to open starting from 14 April 2020. Starting from 4 May 2020, the Italian government began to ease the lockdown measures including but not limited to allowing Italians to visit relatives, shops and cultural sites allowed to reopen starting 18 May 2020 and bars, restaurants and hairdressers to reopen starting 1 June 2020. It was further announced on 16 May 2020 that starting from 3 June 2020, travel to and from abroad will be allowed. However, due to the spread of a variant of the virus that causes COVID-19 in Italy, it is expected that the third wave of COVID-19 cases will peak at the end of March 2021 in Italy. As a preventive and controlling measure to counter the variant of the virus that causes COVID-19, the Italian Prime Minister signed the latest epidemic prevention law which states that starting from 6 March 2021 to 6 April 2021, a curfew, mandatory mask order, cross-regional traffic ban, and other measures will continue in Italy. On 16 May 2021, a new Ordinance of the Ministry of Health was published, allowing entry from certain surrounding countries without compulsory quarantine if a negative swab test is provided 48 hours prior to arrival in Italy. The Minister has also ordered the extension of

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OUR BUSINESS trials of ‘‘Covid-tested’’ flights, which authorised travellers to enter Italy without having to comply with health surveillance and fiduciary isolation. The ordinance and current measures are effective from 16 May 2021 to 31 July 2021.

In March 2020, the Maritime and Port Authority of Singapore implemented restrictions to prevent the spread of COVID-19 from abroad. All foreign tourists, regardless of nationality, were not allowed to enter or transit through Singapore and cruise ships were not allowed to dock. With the gradual recovery of economic activities, the Singapore Tourism Board announced that from November 2020, cruise ships docking at ports will be allowed to travel after strengthening security measures and obtaining the newly formulated health and safety certification. The restrictions on cargo ships which can be used to deliver yachts are also gradually being released since April 2020 in Singapore. As shipping is an important sector of Singapore’s economy, the ports of Singapore remain open and provide basic maritime services during the outbreak of the COVID-19. All sailors on the cargo ships will be allowed to enter Singapore after completion of the relevant quarantine and testing requirements by the Maritime and Port Authority of Singapore. Furthermore, the Maritime and Port Authority of Singapore, along with the Singapore Government, has rolled our various relief measures for the maritime sector, such as the MaritimeSG Together Package, effective 1 May 2020, and other broad-based measures provided under the Budget series to ensure minimum disruption to the shipping industry.

As a result of the COVID-19 outbreak, it is expected that there will be a short-term impact on the Group’s operation as the outbreak of COVID-19 since January 2020 is considered a ‘‘black swan’’ event worldwide and such unprecedented event may bring about unpredictable challenges to the global economy, as such it is legitimate that individuals, including high net worth individuals, will take a more cautious attitude towards consumption and thus making, the business environment difficult. Accordingly, the outbreak of COVID-19 has certain financial and operational impact on our Group.

Supply chain impact

Our Directors confirm that as at the Latest Practicable Date, (i) there is no material delay in delivery from our Group’s suppliers, and (ii) our Group has not encountered or experienced any material difficulty/delay in completion/delivery of our yachts to our customers and/or cancellation or any supply chain disruptions due to the outbreak of COVID-19. In addition, we have received confirmations from our major suppliers that (i) as a result of COVID-19, there was a period of full or partial closure of the manufacturing activities of the supplier, however no sales were materially affected by such closure and as at

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OUR BUSINESS the Latest Practicable Date and there has been no negative impact to their productions or business operations; (ii) since May 2020 they have resumed full operation and production, and (iii) as at the Latest Practicable Date that they have discharged all obligations to our Group under any agreed schedules for our Group’s existing contracts (taking into account all transportation and logistics for the delivery or yachts/boats).

Pursuant to the sales contract between our Group and our customers for the sale of luxury motor yachts in Hong Kong, our Group shall not be liable for any failure or delay in the performance under the contract to the extent that the failures or delays are proximately caused by causes beyond that our Group’s reasonable control and occurring without its fault or negligence. Therefore, our Directors are of the view that our Group will not bear any additional liability arising from such incident.

Financial impact

COVID-19, among others, had an impact on our Group’s ability to meet the minimum purchase commitment under our exclusive dealership agreements with Azimut for Taiwan, Guangdong Province in the PRC and Macau, and Singapore for the period from 1 September 2019 to 31 August 2020. Due to the outbreak of COVID-19, certain government policies in place at the relevant time had an indirect impact on our Group’s sales to Taiwan, Singapore and the PRC.

(a) Singapore

(b) Taiwan

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OUR BUSINESS

Despite the indirect impact of COVID-19 mentioned above, our Group has purchased from Azimut approximately EUR11.9 million for the same period in Hong Kong, which has exceeded the total turnover target. In addition, subsequent to the Track Record Period and up to the Latest Practicable Date, our Group had 10 secured contracts on hand (which comprise the sale of 9 yachts of approximately HK$288.3 million and business introduction for a super yacht by our Group of approximately HK$9.5 million) with a total contract sum of approximately HK$297.8 million, of which one contracts with contract sum of HK$79.2 million have been completed;

Operational Impact

Since the outbreak of the COVID-19 and up to the Latest Practicable Date, our sales office have remained normal operations without shortening the opening hours or days. Since the outbreak of the COVID-19 and up to the Latest Practicable Date, none of our employees had been confirmed with COVID-19 and none of them had failed to report to duty as a result thereof.

In order to minimise the risk of infection and to ensure the health and safety of our employees, we have also adopted the following measures in response to the outbreak of COVID-19:

— keeping a clear staff sick leave record and monitoring sick leave records for employees to identify usual trends; and

— monitoring the updates of COVID-19 controlling and prevention measures formulated by the respective local authorities closely and informing all staff as to the updates promptly.

Based on the above, our Directors are of the view that the outbreak of COVID-19 would not cause any material disruption to our Group’s operations. Please refer to ‘‘Summary — Impact on the Outbreak of COVID-19 on our Group’’ in this document for further details.

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OUR BUSINESS

OUR PRODUCTS

We offer a wide variety of product offerings including luxury motor yachts, sport boats, and inflatable boats to capture a broad scope of customers. As at the Latest Practicable Date, our brand portfolio included two luxury brands of Absolute and Azimut and two mid-to-high-end brands of Four Winns and Zar Formenti. Set below are the major collection/series of our products as at the Latest Practicable Date:

Luxury Motor Yachts

Brand Collection Overall length Photos

Azimut Flybridge 52.9 feet to collection 82.8 feet

Grande 87.4 feet to Collection 114.10 feet

Atlantis 33.8 feet to Collection 53.1 feet

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OUR BUSINESS

Brand Collection Overall length Photos

Magellano 43.10 feet to Collection 80.1 feet

S Collection 59.1 feet to 94.2 feet

Absolute STL 39.1 feet Collection

Fly 46.5 feet to Collection 70.5 feet

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OUR BUSINESS

Brand Collection Overall length Photos

Navetta 48.11 feet Collection to 73.5 feet

Sport Boats

Brand Overall length Photos

Four Winns 18.0 feet to 37.1 feet

Inflatable Boats

Brand Overall length Photos

Zar Formenti 10.0 feet to 15.0 feet

Product Life cycle

According the Frost & Sullivan Report, the life cycle of yachts generally ranges from 20 to 30 years based on several factors such as maintenance of accessories and engines and weather condition where the yacht is sheltered.

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OUR BUSINESS

OUR OPERATIONAL FLOW

Demonstration yachts Delivery of yachts to our customers Marketing and Securing (one month) purchase of orders from demonstration our customers yachts Shipment of yachts

New yachts Placing of new yacht orders at our yacht manufacturers and construction of new yachts (two to 18 months)

Marketing and purchase of demonstration yachts

We offer our customers a balanced portfolio of luxury motor yacht, sport boat and inflatable boat brands, consisting of Azimut, Absolute, Four Winns and Zar Formenti. Our management and marketing team is responsible for conducting marketing activities and soliciting new customers. For potential customers, our management team is responsible for liaising with them when they make product enquiries.

Occasionally, we also purchase demonstration yachts from our yacht manufacturers before securing orders from our customers for certain latest models. According to Frost & Sullivan Report, yacht demonstration is important in the sales of yachts. Customers are more inclined to purchase a yacht if they can physically inspect and gain access to the yacht rather than merely read through the product brochure. In case where the demonstration yachts are not available at the yacht manufacturer, we occasionally borrow yachts from our customers which purchased the same model of yachts from us for displaying to our potential customers. The demonstration or borrowed yachts are displayed at local marinas whichservesasamarketingplatformthroughwhich our potential customers can view and access the yachts.

Securing of orders from our customers

In addition to arranging physical visits to the local marinas where we display the demonstration or borrowed yachts, we also provide our customers with product brochures, which are supplied to us by the yacht manufacturers, to learn about the models and the specifications of the yachts. Leveraging on our in-depth knowledge of yachts, we assist our customers in making selections from the product brochures by explaining the different features and specifications of the yachts. Our customers can either choose to purchase the demonstration yachts which are readily available and can be delivered within one month or place order for new yachts. If our customer chooses to purchase demonstration yachts, we provide modifications they request. If our customer chooses to place order for new yachts, we guide them through the specification process and we liaise and check with the yacht manufacturers on the delivery schedules, which in general takes approximately two to 18 months from placing the order to the delivery of yachts.

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OUR BUSINESS

We provide quotation to our customers for their consideration. The retail prices of our new yachts are determined with reference to the yacht manufacturers’ retail pricing guidelines. We may occasionally offer our customers discounts which decision may depend on a variety of factors, including yacht brand and model, market demand, inventory supply and the length of relationship with our customers.

Ourmanagementconfirmswithourcustomers on the relevant specifications of the yachts and prepare a sale and purchase agreement, which specifies, among others, the model, layout, engine and build type, price and any discount offered, payment schedule and estimated delivery date.

We usually require our customers to pay a deposit, generally 10% to 30% of the purchase price depending on the availability, time of construction and the price of the yachts when placing their orders, and to settle the remaining balance in one to three instalments before the yacht is arranged to be delivered to our customers. As we require our customers to pay the relevant deposit and instalmentsinadvancebeforewearerequiredto pay the corresponding payments to the yacht manufacturers, we did not experience any mismatch in cash flow receiving customer orders and settlement with yacht manufacturers during the Track Record Period. We typically do not offer any credit to our customers for yacht purchases.

Placing new yacht orders at our yacht manufacturers and construction of the new yachts

For customers which choose to place order for new yachts, we enter into a sales and purchase agreement with the yacht manufacturers which contains specifications such as the yacht model and engine type. The yacht manufacturers usually require us to pay a deposit ranging from 5% to 30% of the purchase price when entering into a legally binding sale and purchase agreement, and settle the remaining balance before the delivery of the yacht. The yacht manufacturers begin to construct the yacht upon receipt of the deposit and notify us in advance when the yachts are ready for delivery. We shall pay the balance of the purchase price to the yacht manufacturers before the delivery date.

Shipment and delivery of yachts to our customers

For new yachts ordered from the yacht manufacturers, we normally engage overseas surveyors to check the yachts at the manufacturers’ shipyard before shipment. Upon satisfactory inspection by the surveyors, we communicate with the yacht manufacturers about the timing for the collection of the yachts by the shipping agent engaged by us at the agreed overseas ports. In general, the yacht manufacturers and the shipping agent are responsible for transporting the yachts to the agreed overseas port and the yacht manufacturers are responsible for insuring the yachts prior to the time of delivery. In general, our Group provided service to arrange shipment of the yachts from the agreed overseas ports to the location designated by the customers in the sales contract during the Track Record Period. Pursuant to our sales contracts with our customers, our customers are responsible for ensuring that adequate insurance for the yachts is in place at all times after the delivery of the yachts by the yacht manufacturers but we will assist our customers in arranging shipping insurance, obtaining the requisite licences as well as port or customs clearance at the costs of our customers. In general, it takes approximately four to six weeks

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OUR BUSINESS for the shipment of yachts from the agreed overseas port to the location designated by the customer. After the ordered yacht is unloaded at the location designated by the customer, we conduct a pre-delivery inspection on the conditions and functions of the yacht, carry out cleaning and minor fitting works and install accessories such as electronics and entertainment systems on the yacht prior to the handover of the yacht to our customer. Upon the delivery and acceptance of the yachts by our customers, a warranty certificate would be issued, which would be signed by our customer or their authorised representative. Handover of the yachts normally takes place after shipment and delivery at an location designated by the customer.

We are required by the yacht manufacturers to provide to each of our customers a copy of the service booklet, owners’ manual and all other documentation relevant to the operations of the yachts. On the date of delivery of the yacht, we shall inform our customers about the content and limits of the warranty contained in the warranty certificate. We do not accept return of yachts or provide any express warranties except that we will use our reasonable endeavours to transfer to our customers the benefits of all warranties or guarantees provided by the yacht manufacturer and administer the provision of such warranties to our customers. We did not experience any return of yachts during the Track Record Period.

During the Track Record Period, except for sales to our sub-dealers, there were two yachts which delivery and acceptance of the yachts took place at the agreed overseas port upon the request of the customers for usage overseas. Upon delivery and acceptance of the yachts by our customers, a warranty certificate would be issued, which would be signed by our customer or their authorised representative. Our Group will subsequently provide service to arrange shipment of the yachts from the agreed overseas ports to the location designated by the customer according to a mutually agreed schedule.

For sales to our sub-dealers, we are responsible for engaging overseas surveyors for inspection of the yachts as requested and on behalf of our sub-dealers at the manufacturer’s shipyard. Delivery and acceptance of the yachts took place at the agreed overseas ports and we do not provide warranty or further installation options to our sub-dealers. Instead, upon delivery and acceptance of the yachts by our sub-dealers, a protocol of acceptance would be signed by our sub-dealers at the agreed overseas ports. Following the handover of the yacht at the agreed overseas ports, upon the request of the sub-dealers, our Group also provided service to arrange shipment of the yachts from the agreed overseas ports to the location designated by the sub-dealer through third party agents.

Pursuant to the Warranty Certificate, the Customer declares that the yacht is compliant or conforms to the sales agreement upon signing of the same which indicates their acceptance of the yacht. Pursuant to the Protocol of Acceptance, the Sub-dealer acknowledges that the yacht is compliant with the sales contract upon signing of the same which indicates their acceptance of the yacht. Accordingly, the Directors are of the view that the Warranty Certificate or Protocol of Acceptance served as a handover certificate indicating the delivery and acceptance of the yacht by our customers and Sub-dealer,

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OUR BUSINESS respectively. Our revenue from the sale of yacht is recognised baesd on the date of the aforementioned warranty certificate or the protocol of acceptance which indicates the date of delivery and acceptance of the yacht by our customer and sub-dealer, respectively.

OUR VALUE-ADDED SERVICES

We offer value-added services to our customers, including maintenance and repair services, sale of spare parts and accessories and yacht licensing services at a service charge. Our customers of our value-added services include customers who purchase new yachts from us or from other yacht dealerships. During the Track Record Period, a majority of our customers who purchased yachts from us returned to us for maintenance and repair services. To provide better luxury and customised experience for our customers, we also offer complimentary services such as yacht provisioning and equipping services and captain and crew sourcing services.

Maintenance and repair services

Our maintenance and repair services are generally charged based on the manpower and level of skills required for the particular job. We may offer credit term for the maintenance and repair services which is determined on a case by case basis.

During the Track Record Period, we entered into an independent contractor agreement with an independent contractor for a term of five years with a further term of an additional three years, pursuant to which the contractor shall provide our Group with consulting and technical support services and the use of the premises at 21 Tam Kung Temple Road, Shau Kei Wan as our service centre, where we provide the maintenance and repair services to our customers.

Maintenance

Yachts require periodic maintenance, and recurring yacht maintenance is an ongoing revenue stream for us. A typical maintenance service check is generally conducted annually and generally includes a routine yacht inspection, and may include working such as polishing, cleaning of propellers and hull, the replacement of consumables and sacrificial partsaswellasotheradjustmentsandcalibrations.

Repairs

We perform a full range of in-warranty repair and out-of-warranty repair services including repair of damage, replacement of parts as well as upgrades and refurbishment of yachts.

Repairs under warranty

In-warranty repair represents coverage for certain types of repairs offered by the yacht manufacturers when a customer purchases a new yacht, such as repairs from defects in parts or workmanship. The warranty terms are predetermined by the relevant yacht manufacturer. The warranty period for each yacht typically begins on the date when the

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OUR BUSINESS yacht is handovered to our customers. In general, the warranty period for Azimut yachts is (i) 12 months for any defects in material or workmanship; and (ii) five years for structural defects to the hull. The warranty period for Absoluteyachtsisgenerallytwoyearsforthe engines, one to one and a half year for the generator, one year for all equipment on-board and five years for the hull.

During the warranty period, we will, pending approval from the yacht manufacturers, repair or replace any defects or defective parts arising from faulty design, materials or workmanship which is proven to our and the yacht manufacturer’s satisfaction to be defective under normal use and service according to the warranties of the yacht manufacturer. Our claims for in-warranty repair services are submitted to the relevant yacht manufacturers by submitting requests to the yacht manufacturers by email or through their information systems. The request shall specify (i) the cause of the defects; (ii) the operations necessary for the repair or replacement; (iii) the quotation for the repair or replacement work; and (iv) the necessary materials to be procured.

Upon receiving our request, the yacht manufacturer shall, at its options, (i) send a written notice to us authorising us to make the necessary repairs under warranty and the reimbursement of our expenses as determined and quantified by it, or reasons for its refusal for the disbursement; (ii) have a right to let the yacht be examined by its representative; or (iii) make the necessary repairs itself or through a third party of its choice.

To reimburse the repair expenses, we are required to send an invoice to the yacht manufacturer specifying the model, hull number and works performed on the yacht within the specified period after performance of therepairworks.Wehavebeenreimbursedbythe relevant yacht manufacturers for all of such approved costs during the Track Record Period.

Out-of-warranty repairs

We provide out-of-warranty repair services to our customers, such as replacement of parts due to wear and tear or repair of damage, which is generally not covered by the yacht manufacturers or upon the expiry of the original warranty period.

The payment for the out-of-warranty services we provide are usually collected from our customers immediately following the completion of our services and prior to delivery of the repaired yacht to the customer.

Sales of related components

We sell inflatable boats, sport boats and spare parts provided by the original yacht manufacturers as well as third party suppliers to our customers. We also provide accessories such as electronics and entertainment systems for the convenience of the yacht owners.

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OUR BUSINESS

Yacht licensing services

We assist our customers in applying for new yacht licences with the Marine Department at a service fee as part of our efforts to improve customer satisfaction and to establish and strengthen the long-term relationships with our customers.

Introductory services

For the year ended 30 April 2021, our Group recognised finder’s fee income from Azimut for introductory services provided by our Group for Azimut’s sale of one first-hand yacht. Upon request of the customer and to facilitate the customer’s arrangement of letter of credit in relation to the purchase of the yacht, sales and purchase contract of the aforementioned yacht was entered into between our Group, the customer and Azimut, whereas Azimut is the seller and the Group is the authorised service provider for the transaction. Pursuant to the finder’s fee agreement, Azimut engaged our Group to explore existing opportunities for the sale of the Azimut yacht to the customer. As confirmed by our Directors, the fee was negotiated between our Directors and Azimut based on the price spread between our Group’s general selling price and inventory cost of our Group for distributing similar class of yacht during the Track Record Period. Save for the sales and purchase contract being entered into between our Group, the customer and Azimut, which Azimut was the seller, our Group was responsible for providing ancillary services such as follow-up on minor defects and maintenance service when the yacht arrived Hong Kong, issued a warranty certificate, which was signed by the customer, upon the delivery and acceptance of the yacht by the customer and assisted our customer in applying for relevant license for the new yacht.

TRADE-IN AND SALES OF SECOND-HAND YACHTS

We allow our existing or new customers to trade-in their second-hand yachts to facilitate their purchase of our first-hand yachts. We also purchase second-hand yachts from our suppliers which did not purchase the yachts from us. We accept trade-in or purchase of second-hand yachts of brands other than Absolute and Azimut.

Before we accept any trade-in or purchase any second-hand yachts from our suppliers, we will request our suppliers to provide the original ownership certificates and operating licences for inspection. Our technician will examine the conditions, functionality and the features of the yachts. We may also engage third-party engineering company with authorised surveyor of the Marine Department to conduct an intensive condition survey to examine the structural condition of the yachts. In determining the purchase price of second-hand yacht, we take into account the market price, overall conditions, popularity and demand of the model of the second-hand yachts, the report of the authorised surveyor and the repairing costs to be incurred, if any. We determine the resell price of the second- hand yachts on a cost-plus basis. In case of trade-in of second-hand yachts, the purchase price of the second-hand yacht is deducted from the sale price of the first-hand yacht with the outstanding balance to be paid in cheque or telegraphic transfers.

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OUR BUSINESS

If the offer is agreeable to the supplier, we will enter into a sale and purchase agreement with the supplier for the trade-in or purchase of second-hand yachts, which contain terms such as the specification of the subject yacht, purchase price and payment schedule. The supplier will warrant that he/it is the legal and beneficial owner of the yacht free from any encumbrances.

OTHER COMPLEMENTARY SERVICES

Yacht provisioning and equipping services

We advise our customers on the personalised modification works which do not affect the safety or performance of the yachts. We also assist our customers in internal design and decoration and installation of luxury trimmings on the yachts.

Captain and yacht crew sourcing services

We provide captain and yacht crew sourcing services to our customers as it does not require material capital expenditures or costs and we provide such services to our customers free of charge. We offer these services as part of our efforts to improve customer satisfaction and to establish and strengthen the long-term relationships with our customers. We assist our customers to find captains and crew possessing the relevant sailing experience and expertise with our network in the industry.

SUB-DEALERSHIP ARRANGEMENT

Taiwan Sub-dealer

Due to the preferences of Taiwanese customers to deal with local dealers and for operating and strategic reasons, we believe it is better to penetrate the Taiwanese market by appointing a local sub-dealer with local market knowledge and network, which provides an immediate link to established local customer base.

Since March 2018, we have appointed a yacht dealer in Taiwan which is an Independent Third Party as our exclusive sub-dealer (the ‘‘TW sub-dealer’’) in Taiwan. TW sub-dealer has engaged in the yacht dealership business in Taiwan since 2014. We select TW sub-dealer based on stringent criteria, including its industry experience, sales network, marketing presence and technical skills. Before the engagement, we carried out on-site inspection, including visiting its sales office and discussing with its management team members. Our selection and appointment of TW sub-dealer as our sub-dealer in Taiwan was and has been expressly approved by Azimut.

Since 2018, we have entered into one-year sub-dealership agreement with TW sub- dealer, which sets forth terms such as payment terms, sales conditions, advertising activities and delivery of the yachts. TW sub-dealer shall distribute the Azimut motor yachts and related components on an exclusive basis in Taiwan during the term of the sub-dealership agreement. We set out below the principal terms of the existing sub-dealership agreement with our TW sub-dealer:

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OUR BUSINESS

Term From 1 September 2020 to 31 August 2021

Area of distribution Taiwan; to include Penghu islands

Discounts A discount is granted to the TW sub-dealer on Azimut’s price list

Minimum purchase A minimum purchase/commitment target was stated in the commitment/target sub-dealership agreement

Restriction on selling No restriction on selling price, a recommended retail price is price provided

Payment and credit 15% to 25% upon signature of the order contract and terms balance before delivery

Termination/Renewal The parties shall discuss the terms and conditions of a possible new sub-dealership agreement.

The sub-dealership agreement is terminable by our Group upon the occurrence of the following events:

(a) the TW sub-dealer fails to comply with our contractual obligations or injures by any means, the goodwill, public image or commercial reputation of Azimut;

(b) the TW sub-dealer has become or been declared insolvent, or placed in liquidation or submitted to a bankruptcy procedure; and

(c) Violation by the TW sub-dealer of their contractual obligations, amongst others, to advertise and promote and sell the products, to adequately cover the area of distribution, to display Azimut’s products in the most visible manner, sales conditions, advertising activity.

To manage our TW sub-dealer, we provide detailed guidelines to them which include standards governing publication of advertising materials and we also hold regular meetings with our TW sub-dealer. At the beginning of each year, we set our TW sub-dealer’s overall annual targets based on the discussion with our TW sub-dealer. We review the annual targets and timely adjust these targets in response to market changes. During the Track Record Period, we completed the sales of three Azimut luxury motor yachts and generated revenue of approximately HK$33.3 million from our TW sub-dealer.

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OUR BUSINESS

Shenzhen Sub-dealer

Due to the preferences of Chinese customers to deal with local dealers and for operating and strategic reasons, we believe it is better to penetrate the Chinese market by appointing a local sub-dealer in Shenzhen with local market knowledge and network, which provides an immediate link to established local customer base.

Since October 2019, we have appointed a yacht dealer in Shenzhen which is an Independent Third Party as our exclusive sub-dealer (the ‘‘SZ sub-dealer’’) in Shenzhen. The ultimate beneficial owner of the SZ sub-dealer was also one of our customers in FY2020. The SZ sub-dealer has engaged in the yacht dealership business in Shenzhen since 2017. According to the Frost & Sullivan Report, our SZ sub-dealer is ranked the one of the top five players in Guangdong Province generating a revenue of approximately RMB17.4 million in 2020. We select the SZ sub-dealer based on stringent criteria, including its industry experience, sales network, marketing presence and technical skills. Before the engagement, we carried out on-site inspection, including visiting its sales office and discussing with its management team members. Our selection and appointment of the SZ sub-dealer as our sub-dealer in Shenzhen was and has been expressly approved by Azimut.

Since 2019, we have entered into one-year sub-dealership agreement with the SZ sub- dealer, which sets forth terms such as payment terms, sales conditions, advertising activities and delivery of the yachts. The SZ sub-dealer shall distribute the Azimut motor yachts and related components on an exclusive basis in Shenzhen during the term of the sub-dealership agreement. We set out below the principal terms of the existing sub-dealership agreement with our SZ sub-dealer:

Term From 3 September 2020 to 31 August 2021

Area of distribution Shenzhen, China

Discounts A discount is granted to the SZ sub-dealer on Azimut’s price list

Minimum purchase A minimum purchase/commitment target was stated in commitment/target the sub-dealership agreement

Restriction on selling No restriction on selling price, a recommended retail price price is provided

Payment and credit terms 15% to 25% upon signature of the order contract and balance before delivery

Termination/Renewal The parties shall discuss the terms and conditions of a possible new sub-dealership agreement.

The sub-dealership agreement is terminable by our Group upon the occurrence of the following events:

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OUR BUSINESS

(a) the SZ sub-dealer fails to comply with our contractual obligations or injures by any means, the goodwill, public image or commercial reputation of Azimut;

(b) the SZ sub-dealer has become or been declared insolvent, or placed in liquidation or submitted to a bankruptcy procedure; and

(c) violation by the SZ sub-dealer of their contractual obligations, amongst others, to advertise and promote and sell the products, to adequately cover the area of distribution, to display Azimut’s products in the most visible manner, sales conditions, advertising activity.

To manage our SZ sub-dealer, we provide detailed guidelines to them which include standards governing publication of advertising materials and we also hold regular meetings with our SZ sub-dealer. At the beginning of each term, we set our SZ sub-dealer’s overall annual targets based on the discussion with our SZ sub-dealer. We review the annual targets and timely adjust these targets in response to market changes. During the Track Record Period, our SZ sub-dealer has completed the sales of one Azimut luxury motor yachts. Subsequent to the Track Record Period and up to the Latest Practicable Date, our SZ sub- dealer has secured the sales of one Azimut luxury motor yacht in Shenzhen.

OUR CUSTOMERS

Our customers during the Track Record Period are primarily individuals with high disposable income located in Hong Kong which are the end users of our products as well as a number of corporations. We generally do not offer any credit term for yacht purchases. Each customer is required to pay the purchase price in full by cheque or telegraphic transfers before we arrange shipment and delivery of the yacht. The payments made to us were primarily in EUR and HK$. For FY2019, FY2020 and FY2021, sales to our five largest customers amounted to approximately HK$163.3 million, HK$193.1 million and HK$222.2 million and accounted for 66.2%, 76.1% and 48.3% of our total revenue, respectively. Sales to our largest customer were HK$79.6 million, HK$62.6 million and HK$91.2 million and accounted for 32.3%, 24.7% and 19.8% of our total revenue, respectively.

During the Track Record Period, we did not receive any complaint from our customers which had a material impact on our business and operation.

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OUR BUSINESS

The table below sets out information on our top five customers during the Track Record Period:

FY2019:

Year(s) of Percentage of Type of products/ business our total Background and principal services purchased relationship Customer (Note 1) Sales revenue business from us with us (HK$ million)

Customer A 79.6 32.3% Individual retail user First-hand yacht 3

Customer B (Note 2) 27.6 11.2% Private company First-hand yacht 3

Customer C (Note 3) 25.5 10.3% Private company First-hand yacht 3

Customer D 16.4 6.6% Individual retail user First-hand yacht 2

Customer E (Note 4) 14.2 5.8% Private company First-hand yacht 2

Total: 163.3 66.2%

Note 1: Our top five customers for FY2019 are all Independent Third Parties and unrelated to each other.

Note 2: Customer B is also one of our top five suppliers, Supplier A, for FY2019.

Note 3: Customer C is 50% owned by Customer H.

Note 4: Customer E is our TW sub-dealer.

FY2020:

Year(s) of Percentage of Type of products/ business our total Background and principal service purchased relationship Customer (Note 1) Sales revenue business from us with us (HK$ million)

Customer F 62.6 24.7% Private company First-hand yacht 3

Radiant Global Limited 43.0 17.0% Private company First-hand yacht 5 (Note 2)

Customer G (Note 3) 36.2 14.3% Individual retail user First-hand yacht 1

Customer H (Note 4) 29.0 11.4% Individual retail user First-hand yacht 2

Customer I (Note 5) 22.4 8.8% Private company First-hand yacht 2

Total 193.1 76.1%

Note 1: Our top five customers for FY2020 are all Independent Third Parties and unrelated to each other.

Note 2: Radiant Global Limited is also one of our top five suppliers for FY2020.

Note 3: Customer G is also one of our top five suppliers, supplier D, for FY2020.

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OUR BUSINESS

Note 4: Customer H owns 50% customer C.

Note 5: Customer I is also one of our top five suppliers, supplier C, for FY2019.

FY2021:

Year(s) of Percentage of Type of products/ business our total Background and principal service purchased relationship Customer (Note 1) Sales revenue business from us with us (HK$ million)

Company J 91.2 19.8% Private company First-hand yacht 1

Company H 40.8 8.9% Individual user First-hand yacht 3

Company K 32.7 7.1% Individual user First-hand yacht 1

Company L 30.3 6.6% Private company First-hand yacht 1

Company M 27.2 5.9% Individual user First-hand yacht 1

Total 222.2 48.3%

Note 1: Our top five customers for FY2021 are all Independent Third Parties and unrelated to each other.

To the best of our Directors’ knowledge, none of our Directors or their respective close associates or any person who, to the knowledge of our Directors, owns more than 5% of our issued share capital or of any of our subsidiaries, had any interest in any of our five largest customers during the Track Record Period.

OVERLAPPING OF CUSTOMER AND SUPPLIER

During the Track Record Period, to the best knowledge and belief of our Directors, eight of our customers and/or their related companies in the same group were also our suppliers due to trade-in arrangements. For FY2019, FY2020 and FY2021, our sale of first- hand yachts to these customers accounted for approximately 23.8%, 31.0% and 12.3% of our total revenue, respectively. During the same years, our purchase of second-hand yachts from such customers and/or their related companies accounted for approximately 8.5%, 7.9% and 5.7% of our total purchase, respectively. Gross profit for the sale of first-hand yachts to these customers for FY2019, FY2020 and FY2021 was approximately HK$11.5 million, HK$4.8 million and HK$7.2 million, respectively, and the gross profit margin was 19.7%, 6.1% and 12.7%, respectively.

To the best knowledge and belief of our Directors, these entities and their ultimate beneficial owners are Independent Third Parties. The products sold and purchased from these customers were luxury motor yachts in nature but our Group did not buy and sell the same luxury motor yachts. We purchase second-hand luxury motor yachts from these customers with a view of facilitating our sales of first-hand luxury motor yachts.

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Negotiations of the terms of our sales to and purchases from these customers and/or their related group companies were conducted on individual basis and the sales and purchases were neither inter-connected nor inter-conditional with each other. The terms of transactions with these customers are in line with the market and similar to those transactions with our other customers and suppliers.

SALES AND MARKETING

Pricing policy and seasonality

The retail prices of our first-hand products are determined with reference to the yacht manufacturers’ retail pricing guidelines. The recommended retail price range of our first- hand products ranges from HK$0.4 million to HK$150 million. We may occasionally offer our customers discounts of various percentages to promote the sales of certain new yachts, which are influenced by a variety of factors, including yacht brand and model, market demand, inventory supply and the length of relationship with our customers. For the sale of second-hand yachts, the price of our products are generally determined on a cost-plus basis.

We understand that the suggested retail prices are primarily determined by the cost of the product, the price of a competitive product, brand image and market demand. The yacht manufacturers generally review their pricing models at the very beginning of the development of a new model and revisit the pricing when the development is complete as well as before the formal launch of the model and annually thereafter. Please refer to the paragraph headed ‘‘Regulatory Compliance — Compliance with the Competition Ordinance’’ in this section for further details.

Our principal business activity generally is not subject to any significant seasonal fluctuation. We do not foresee any material fluctuation in prices of our products.

Marketing and promotion

For FY2019, FY2020 and FY2021, our selling and marketing expenses amounted to approximately HK$3.5 million, HK$6.1 million and HK$3.8 million, accounting for approximately 1.4%, 2.4% and 0.8% of our total revenue, respectively. As part of our sales and marketing efforts, we participate in local and international boat shows at boating locations, conventions or marinas, typically held in Hong Kong, Singapore, Macau, Guangdong Province and Hainan Province in the PRC and Europe. Our Group also cooperates with third parties such as local marina operators and luxury car clubs to organise promotional events and attract our potential customers with high spending power. Boat shows and other offsite promotions are important venue for generating sales orders. The boat shows also generate a significant amount of interest in our products resulting in boatsalesaftertheshow.

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In order to increase brand awareness in the geographical regions served by us, we also engage public relations companies to handle amongst others, press release for our events and place monthly advertisements in industry and non-industry magazines and online platforms. We also utilise the social media tools to promote ourselves and organise sales and marketing initiatives. In addition to our own sales and marketing campaigns, certain of our dealership agreements stipulate that we have to participate in the official advertising campaign of the yacht manufacturers. We also seek to cooperate with other luxury brands to reach wider customer base which are individuals with high disposable income.

All of our marketing efforts must comply with the promotional and marketing guidelines set out by the yacht manufacturers.

SUPPLIERS AND PROCUREMENT

Our suppliers

Our major suppliers

For FY2019, FY2020 and FY2021, our purchases from our five largest suppliers amounted to HK$209.1 million, HK$200.4 million and HK$382.7 million and represented 91.7%, 91.0% and 94.6% of our total purchases, respectively. Purchases from our single largest supplier amounted to HK$163.0 million, HK$141.0 million and HK$299.0 million, accounting for 71.5%, 64.0% and 73.9% of our total purchases in the respective years.

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The table below sets out information on our top five suppliers during the Track Record Period:

FY2019:

Years of Percentage Products sold/ business of our total Background and principal services provided relationship Supplier (Note 1) Purchase purchase business to us with us (HK$ million)

Azimut 163.0 71.5% A leading luxury yacht Azimut branded 5 manufacturer established yachts in 1969 and headquartered in Italy

Absolute 30.2 13.3% A leading luxury yacht Absolute branded 6 manufacturer established yachts in 2002 and headquartered in Italy

Supplier A (Note 2) 8.4 3.7% Private company Second-hand yacht 3

Supplier B 4.0 1.8% Private company Second-hand yacht 2

Supplier C (Note 3) 3.5 1.5% Private company Second-hand yacht 2

Total: 209.1 91.7%

Note 1: Our top five suppliers for FY2019 are all Independent Third Parties and unrelated to each other.

Note 2: Supplier A is also one of our top five customers, customer B, for FY2019.

Note 3: Supplier C is also one of our top five customers, customer I, for FY2020.

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FY2020:

Year(s) of Percentage Products sold/ business of our total Background and principal services provided relationship Supplier (Note 1) Purchase purchase business to us with us (HK$ million)

Azimut 141.0 64.0% A leading luxury yacht Azimut branded 5 manufacturer established yachts in 1969 and headquartered in Italy

Absolute 36.2 16.5% A leading luxury yacht Absolute branded 6 manufacturer established yachts in 2002 and headquartered in Italy

Supplier D (Note 2) 8.7 4.0% Individual retail user Second hand yacht 1

Radiant Global Limited 8.7 4.0% Private company Second hand yacht 5 (Note 3)

Supplier E 5.7 2.6% A yacht transport and Yacht 5 integrated logistics transportation company established in services 1985 and headquartered in Italy

Total 200.4 91.0%

Note 1: Our top five suppliers for FY2020 are all Independent Third Parties and unrelated to each other.

Note 2: Supplier D is also one of our top five customers, customer G, for FY2020.

Note 3: Radiant Global Limited is also one of our top five customers for FY2020.

FY2021:

Year(s) of Percentage Type of products/ business of our total service purchased relationship Supplier (Note 1) Purchase purchase Background and principal business from us with us (HK$ million)

Azimut 299.0 73.9 A leading luxury yacht Azimut branded 5 manufacturer established in 1969 yachts andheadquarteredinItaly

Absolute 60.6 15.0 A leading luxury yacht Absolute branded 6 manufacturer established in 2002 yachts andheadquarteredinItaly

Supplier F 9.9 2.4 Private company Second hand yacht 1

Supplier G 6.7 1.7 Individual user Second hand yacht 2

Supplier H 6.5 1.6 Private company Second hand yacht 2

Total 382.7 94.6

Note 1: Our top five suppliers for FY2021 are all Independent Third Parties and unrelated to each other.

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To the best of our Director’s knowledge, none of our Directors or their respective close associates or any person who owns more than 5% of our issued share capital or of any of our subsidiaries, had any interest in any of our five largest suppliers during the Track Record Period.

RELIANCE ON OUR TWO LARGEST SUPPLIERS

For FY2019, FY2020 and FY2021, our luxury motor yacht product purchases from our two largest suppliers, Absolute and Azimut, accounted for HK$193.2 million, HK$177.2 million and HK$359.6 million, representing 84.7%, 80.5% and 88.9% of our total purchases, respectively. Despite the supplier concentration, our Directors are of the view and the Sole Sponsor concurs that we are capable of sustaining our business and sales in the future. We have a long and established business relationship with Absolute and Azimut and have been selling luxury motor yacht products supplied from Absolute and Azimut since 2014 and 2015, respectively. Absolute was our sole supplier of luxury motor yacht products until April 2015 when we started selling luxury motor yachts supplied by Azimut.

Background of Absolute and Azimut

Absolute

Absolute was founded in 2002 and headquartered in Italy. They principally manufacture and supply motor yachts and sport yachts ranging from 40 to 73 feet. According to Absolute, Absolute has been a dramatic growth in terms of revenue from approximately EUR32.5 million in 2015 to approximately EUR75.0 million in 2020, representing a CAGR of 36.3%. In addition, Absolute was honoured in several creditable international awards from 2010 to 2019, e.g. design awards, interior layout and innovation and ‘‘Best European Motor Yacht of the Year’’ in 2017. According to Frost & Sullivan Report, Absolute is a relatively newer brand in comparison with Azimut. Our Group is the first and the exclusive authorised dealer of Absolute yachts in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam.

Azimut

Azimut principally supplies luxury motor yachts ranging from 34 to 114 feet. It was founded in 1969 and headquartered in Italy. According to the Frost & Sullivan Report, Azimut is one of the world-leading yacht brand as well as the yacht brand having the longest history in Hong Kong. Azimut officially launched in the Hong Kong market in 1987. From 2015 to 2019, Azimut successively ranked first in the global yacht market in terms of the total length built. Azimut has been globally recognised and was awarded the ‘‘Best Brand Presence in Asia’’ for the Asia Boating Awards in 2017, 2018 and 2019. In addition, several awards honoured to Azimut, including ‘‘Shipyard of the Year’’, ‘‘Best Interior Design in the Category’’ and ‘‘Best Innovative Project’’, in the 2018 World Yacht Trophies in Cannes. From 2015 to 2020, the global sales revenue of Azimut experienced a stable growth from EUR682.0 million to EUR900.0 million and Azimut took up a market share of 3.6% in 2020 in terms of global sales revenue.

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As at the Latest Practicable Date, our Group has been appointed as the exclusive dealer of Azimut in Hong Kong, Taiwan, Guangdong Province in the PRC, Macau and Singapore.

Industry norm to enter into exclusive dealership agreements

According to the Frost & Sullivan Report, it is the industry norm for some players like our Group to focus on several brands only and have entered exclusive distributorship agreements with renowned brands. Including our Group, four out of the top five yacht distributors in Hong Kong have been appointed dealerships for one to three brands only. It is also customary in the industry for an authorised distributor of a luxury yacht manufacturer to refrain from cooperating with, and distributing similar products for, the luxury yacht manufacturer’s competitors during the term of the dealership and for leading yacht dealers to form stable dealership with the yacht brands to maximise its bargaining power.

Exclusive and Growing Business Relationship with Absolute and Azimut

Absolute

We have been the exclusive authorised dealer of Absolute in Hong Kong, Guangdong Province in the PRC and Macau since 2014. In 2017, we also became the exclusive authorised dealer of Absolute in Thailand and Vietnam. We were the top dealer and best networking partner in 2016 and the top dealer with the largest and most complete inventory programme in 2017 among Absolute’s dealers worldwide.

Our business relationship with Absolute commenced when Absolute came to know about our Group at the time Mr. Thomas Woo, our founder, one of our Controlling Shareholders and executive Directors, purchased an Absolute yacht in his personal capacity. Mr. Thomas Woo, launched and introduced Absolute yachts in Hong Kong through establishing Absolute Marine and we have entered into one-year exclusive dealership agreements on an annual basis with Absolute since 2014. Given our strong business relationship and proven track record, in 2018, we entered into a five-year exclusive dealership agreement with Absolute, which is a special business cooperative strategy as normal market practice is only one year. Our solid business relationship has been established through over four years of strategic cooperation and the transaction amount has been in an overall increasing trend.

Azimut

We have been the exclusive authorised dealer of Azimut in Hong Kong, Taiwan, Guangdong Province in the PRC and Macau since 2015. Since July 2018, we are also the exclusive authorised dealer of Azimut in Singapore for a period of two years. Hong Kong is the best market in Asia for Azimut and we are one of Azimut’s top five dealers worldwide in 2016 and 2017.

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Our business relationship with Azimut commenced when Azimut ended their Hong Kong exclusive dealership arrangement with their previous dealer due to diverging business strategies between them. In 2015, Azimut sought for a new dealer in Hong Kong, Taiwan, Guangdong Province in the PRC and Macau market with the relevant experience and expertise. As Mr. Paul Grange, one of our Controlling Shareholders and executive Directors, possesses the experience and requisite expertise, and had prior working relationship with Azimut during his tenure at Simpson Marine Limited where he was the group’s sales manager of Azimut yachts, our Group had entered into one-year exclusive dealership agreements with Azimut since 2015. Given our strong business relationship and proven track record, in 2018, we entered into a five-year exclusive dealership agreement with Azimut, which is a special business cooperative strategy as normal market practice is only one year. Our solid business relationship has been established through over three years of strategic cooperation and the amount of transaction has been in an overall increasing trend.

Mutually Beneficial and Complementary Relationship

Absolute

We are the exclusive dealer of Absolute in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam. Our Director, Mr. Thomas Woo, established Absolute Marine for the sole purpose of distributing Absolute yachts in Hong Kong. We were the top dealer for Absolute in 2016 and 2017. According to the Frost & Sullivan Report, it is a market norm for the yacht manufacturer to renew the contract with their exclusive yacht dealer on an annual basis based on the sales performance of the yacht dealer. Given our stable working relationship and excellent track record with Absolute, we were granted a five-year exclusive dealership agreement by Absolute which is not a common industry practice.

Our established procurement arrangements and close business relationship with Absolute enables us to provide our customers a stable and reliable source of supply of yachts. In return, our ability to analyse and consolidate market information based on our understanding of the luxury motor yacht market in Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam and our customers’ procurement needs, allows us to facilitate Absolute to expand its sales and market in these regions.

According to the Frost & Sullivan Report and based on market practice, to secure exclusive yacht dealership in a territory, a yacht dealer is required to give a non-competition undertaking to the yacht manufacturer that it will not engage in the dealership of other yacht brands which may compete with the yacht manufacturer unless authorisation or waiver is obtained. With our proven track record, long working relationship, operating capabilities and local market knowledge, we have obtained authorisations from both Absolute and Azimut to distribute yachts of both brands.

Based on the above, our Directors consider that our relationship with Absolute and Azimut to be mutually beneficial and complementary and that we are capable of maintaining our revenue in future despite our reliance on it.

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Azimut

We are the exclusive dealer of Azimut in Hong Kong, Taiwan, Guangdong Province in thePRC,MacauandSingapore.OurDirectors,Mr.PaulGrangeandMr.ThomasWoo, both have long working relationships with Azimut prior to founding our Group. During Mr. Paul Grange’s tenure at Simpson Marine Limited, he was the group’s sales manager of Azimut yachts. Our Directors believe that their relationship with Azimut is both mutually beneficial and complementary, given their long working history.

In addition, Hong Kong is the best market for Azimut in Asia and our Group was one of their top five dealers worldwide. We were awarded the ‘‘Best Brand Presence in Asia’’ by Asia Boating Awards in 2017, 2018 and 2019 for Azimut. Given our performance and stable working relationship and excellent track record with Azimut, we were granted a five-year exclusive dealership by Azimut which is not a common industry practice. According to the Frost & Sullivan Report, the duration of the dealership agreements entered into between dealers and yacht manufacturers is generally one year.

Our established procurement arrangements and close business relationship with Azimut enables us to provide our customers a stable and reliable source of supply of yachts. In return, our sales performance, our ability to analyse and consolidate market information based on our understanding of the luxury motor yacht market in Hong Kong, Taiwan, Guangdong Province in the PRC, Macau and Singapore and our customers’ procurement needs, facilitates Azimut to expand its sales and market in these regions.

Dealership agreement with Absolute

On 22 August 2018, we entered into an exclusive dealership agreement (‘‘Absolute Dealership Agreement’’) with Absolute for a term of five years, pursuant to which Absolute agreed to supply and we agreed to distribute its luxury motor yachts. We set out below some principal terms of the Absolute Dealership Agreement:

Term Five years from 1 August 2018 to 31 July 2023

Area of distribution Hong Kong, Guangdong Province in the PRC, Macau, Thailand and Vietnam

Minimum purchase A minimum purchase commitment/target was stated in the commitment/target Absolute Dealership Agreement

Restriction on selling No restriction on selling price, a recommended retail price is price provided

Payment and credit Generally payable in four instalments: terms (i) a specified percentage of the total consideration in the agreement will be payable upon placing the order;

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(ii) a specified percentage of the total consideration in the agreement will be payable upon commencement of manufacture of the yacht;

(iii) a specified percentage of the total consideration in the agreement will be payable upon laminating the hull; and

(iv) the balance to be paid before the yacht leaves the shipyard.

Delivery Assoonastheyachtisreadyfor delivery, Absolute will send to our Group a notification that the yacht is ready to be delivered.

After 10 (ten) days from the notification, all the risks related to the yacht, including deterioration, damages and theft will pass to our Group.

Termination/Renewal There is no explicit clause for renewal.

The Absolute Dealership Agreement is terminable by Absolute among other things, upon the occurrence of the following events:

(a) if our Group violates any provision of the Absolute Dealership Agreement, provided that if the violation can be rectified, our Group has been advised in writing of the violation and has not taken the necessary actions to resolve the breach within 30 days from the receipt of such a notification;

(b) if our Group fails to comply with the terms of the minimum purchase commitment/target indicated in the Absolute Dealership Agreement;

(c) if our Group fails to pay, entirely or partially, the yachts ordered and/or any other amount due to the obligations deriving from the Absolute Dealership Agreement; or

(d) if bankruptcy or insolvency proceedings been have startedagainstourGrouporifplacedinreceivership or if our Group goes out of business for a period of 30 consecutive days.

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There were no material changes in the major terms of the Absolute Dealership Agreement when it was renewed on 21 August 2018 and as confirmed by Absolute, there was no material breach in our exclusive dealership agreement with Absolute by either our Group or by Absolute. On the bases that (i) we have developed a strong business relationship with Absolute for over four years with a general increasing trend of sales over the years; (ii) the business relationship between Absolute and us is mutually beneficial and complementary, as set out above; and (iii) we have entered into the Absolute Dealership Agreement with Absolute, our Directors consider that it is unlikely, barring any significant and unforeseeable changes in circumstances, that Absolute will terminate the distribution arrangement or its business relationship with us.

Dealership Agreement with Azimut

On 16 July 2018, we entered into two new exclusive dealership agreements with Azimut for a term of five (‘‘Azimut Dealership Agreement 1’’) and two (‘‘Azimut Dealership Agreement 2’’) years, respectively. Pursuant to the two new agreements, Azimut agreed to supply and we agreed to distribute its luxury motor yachts. We set out below some principal terms of the Azimut Dealership Agreement 1 and Azimut Dealership Agreement 2:

Azimut Dealership Agreement 1 Azimut Dealership Agreement 2

Term Five years from 16 July 2018 to 31 Two years from 1 September 2020 to August 2023 31 August 2022

Area of distribution Hong Kong, Taiwan, Guangdong Singapore Province in the PRC and Macau

Minimum purchase A minimum purchase/commitment A minimum purchase/commitment commitment/target target was stated in the Azimut target was stated in the Azimut Dealership Agreement 1 Dealership Agreement 2

Restriction on selling No restriction on selling price, a No restriction on selling price, a price recommended retail price is provided recommended retail price is provided

Payment and credit Generally payable in two instalments: Generally payable intwoinstalments: terms (i) a specified percentage of the total (i) a specified percentage of the total consideration in the agreement consideration in the agreement will be payable upon signing the will be payable upon signing the order contract; order contract;

(ii) the balance to be paid at least (ii) the balance to be paid at least two weeks before scheduled two weeks before scheduled shipment. shipment.

Delivery Until delivery, Azimut will keep the Until delivery, Azimut will keep the yacht insured with reputable yacht insured with reputable [REDACTED] against all risks [REDACTED] against all risks customarily insured against in the customarily insured against in the Italian yacht building industry Italian yacht building industry

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Azimut Dealership Agreement 1 Azimut Dealership Agreement 2 Termination/Renewal The Azimut Dealership Agreement 1 The Azimut Dealership Agreement 2 will be automatically renewed each will be automatically renewed each year until 31 August 2023 subject to year until 31 August 2022 subject to the complete fulfillment of the the complete fulfillment of the minimum purchase commitment/ minimum purchase commitment/ target. target.

The parties shall discuss the terms and The parties shall discuss the terms and conditions of a possible new exclusive conditions of a possible new exclusive dealership agreement. dealership agreement.

The Azimut Dealership Agreement 1 The Azimut Dealership Agreement 2 is terminable by Azimut upon the is terminable by Azimut upon the occurrence of the following events: occurrence of the following events:

(a) Our Group fails to comply with (a) Our Group fails to comply with our contractual obligations or our contractual obligations or injures by any means, the injures by any means, the goodwill, public image or goodwill, public image or commercial reputation of commercial reputation of Azimut; Azimut;

(b) Our Group has become or been (b) Our Group has become or been declared insolvent, or placed in declared insolvent, or placed in liquidation or submitted to a liquidation or submitted to a bankruptcy procedure; bankruptcy procedure;

(c) Violation by our Group of our (c) Violation by our Group of our contractual obligations, contractual obligations, amongst others, to advertise amongst others, to advertise and promote and sell the and promote and sell the products, to adequately cover products, to adequately cover Hong Kong, Taiwan, Singapore, to display Azimut’s Guangdong Province in the products in the most visible PRC and Macau, to display manner, sales conditions, Azimut’s products in the most advertising activity. visible manner, sales conditions, advertising activity.

During the Track Record Period, there were instances where we failed to meet the minimum purchase requirement under our exclusive dealership agreement with Azimut. Our Group was required to sell a certain number of yachts in designated territories. For the period from 1 September 2017 to 31 August 2018, being the term of the relevant minimum purchase commitment season in the exclusive dealership agreement, there was a shortfall of two yachts in Taiwan and two yachts in Guangdong Province in the PRC and Macau in relation to the minimum purchase requirement. The Shortfall was mainly due to our insufficient resources as our Directors were occupied with our Group’s sales in Hong Kong. In addition, our Group had limited business presence in Taiwan, Guangdong Province in the PRC and Macau and was unable to find a suitable local sub-dealer at that time. Due to the preferences of the local customers, the local customers prefer to deal with local dealers instead. For the period from 1 September 2019 to 31 August 2020, being the term of the

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OUR BUSINESS relevant minimum purchase commitment season in the exclusive dealership agreement, there was a shortfall of four yachts in Singapore. The shortfall was due to the outbreak of COVID-19, among others, where certain government policies had an indirect impact on our Group’s sales to Singapore. Due to the docking restrictions implemented by the Maritime and Port Authority of Singapore as mentioned, there was an impact on the delivery of goods to Singapore. Please refer to ‘‘Summary — Impact of the Outbreak of COVID-19 on our Group’’ in this document for further details. As at the Latest Practicable Date, our the term of the relevant exclusive dealership agreement is still ongoing. According to the agreement, if we fail to meet the minimum purchase commitment, Azimut has the right to terminate the exclusive dealership agreementwithourGroup.Wedidnotmeetthe minimum purchase target for the above-mentioned territories, however, in terms of the number of yachts we sold in Hong Kong, it was more than the minimum purchase commitment. Given (i) our stable and mutually beneficial relationship with Azimut; (ii) our Group is Azimut’s exclusive dealer for Hong Kong, Taiwan, Guangdong Province in the PRC and Macau and Azimut relies entirely on our Group for its yacht sales in those territories; (iii) the number of yachts purchased or procured to be purchased by our Group in Hong Kong has exceeded the minimum purchase commitment for the Hong Kong territory; (iv) Azimut’s assessment of the yacht distribution market in Taiwan, Guangdong Province in the PRC and Macau from 2016 to 2018, Azimut was of the view that those markets were in temporary poor market conditions; and (v) having considered that Hong Kong is the best market for Azimut in Asia and our Group was one of their top five dealers worldwide, we received a letter from Azimut in July 2018 confirming that they will renew and have renewed their agreement with us.

There were no material changes in the major terms of the exclusive dealership agreements with Azimut when it was renewed on 16 July 2018 and as confirmed by Azimut, save for the above-mentioned shortfall in relation to the minimum purchase requirements, there was no material breach in our exclusive dealership agreements with Azimut by either our Group or by Azimut. On the basis that (i) we have developed a strong business relationship with our two largest suppliers foroverthepastthreetofouryearswitha general increasing trend of sales over the Track Record Period; (ii) we are one of Azimut’s top five dealers worldwide and Hong Kong is Azimut’s best market in Asia; (iii) we were award the ‘‘Best Brand Presence in Asia’’ by Asia Boating Awards in 2017, 2018 and 2019 for Azimut; (iv) the business relationship between Azimut and us is mutually beneficial and complementary, as set out above; (v) we have entered into a new five-year Azimut Dealership Agreement 1 and a two-year Azimut Dealership Agreement 2 with Azimut, our Directors consider that it is unlikely, barring any significant and unforeseeable changes in circumstances, that Azimut will terminate the distribution arrangement or its business relationship with us.

Availability of alternative supplier

Based on the reasons set out above, we consider that it is unlikely, barring any significant and unforeseeable changes in circumstances, that Absolute and/or Azimut will terminate their dealership agreements or its business relationship with us. Nevertheless, our

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Group will continue to monitor the market to identify alternative and additional suppliers to cooperate with us in the unlikely event that the business relationship between our Group and Absolute and Azimut is terminated.

We do not foresee substantial difficulty in sourcing supplies from alternative suppliers because there are a number of alternative suppliers of luxury yacht manufacturers. According to the Frost & Sullivan Report, it is an industry norm to sell first-hand yachts through a local distributor and in 2019, at least five well-known yacht manufacturers had not appointed authorised dealers for the sale of their yachts in Hong Kong and in other territories which our Group has secured yacht dealerships. During the Track Record Period, our Group had been approached by one other luxury yacht manufacturer headquartered in United Arab Emirates offering yachts ranging form 48 to 175 feet in length which are comparable products to those provided by Absolute and Azimut to explore future business opportunities but our Group decided not to represent other yacht manufacturers at the moment. According to the Frost & Sullivan Report, it is very difficult to be appointed as an exclusive dealer in a territory under exclusive dealership agreement with world-class luxury motor yacht manufacturers, in particular for Azimut which has ranked first among all yacht manufacturers worldwide in terms of length built since 2014. It is an honour and an industry recognition that a yacht dealer is nominated as an exclusive distributor of a world-class yacht brand in a territory. To be nominated as an exclusive distributor, the yacht manufacturers will consider a number of factors such as the sales performance, reputation for service quality, market insight and knowledge of customers’ needs of the yacht dealer as well as cannibalisation in terms of territory overlap. Given the difficulty, stringent selection criteria and the high threshold to secure exclusive dealership to represent even one world-class luxury motor yacht brand in one territory, our Group considers the existing exclusive dealership with both Absolute and Azimut in various territories in Asia to be exceptional and rare and it is our Group’s intention to reinforce the business relationship with both Absolute and Azimut so as to leverage on this exceptional opportunity to develop the business in the territories which we are granted yacht dealerships. Regardless, our Group will try to obtain consent from Absolute and Azimut to represent other yacht brands as and when determined by our management.

Based on our Directors’ experience, yacht manufacturers generally set the yacht sales price with reference to the relevant specifications such as the model, layout, engine and build type and delivery schedule of the yachts. We do not expect a material increase in costs in sourcing new brands or increasing purchases of existing products from other suppliers

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OUR BUSINESS compared to Absolute and Azimut because according to the Frost & Sullivan Report, comparable products are priced similarly and most yacht manufacturers with similar brand recognition as Azimut generally offer similar margins of approximately 15.0% to 50.0% to maintain their competitiveness in the yacht manufacturing market. In the unlikely event that the business relationship with either of Absolute or Azimut is disrupted, our Group will source brands of similar grade with similar product offerings as that supplier. As the yacht products will be similar, the target customers will also be the same. As such, our Directors believe that there will not be a material increase in costs in sourcing new brands. Our Directors consider that our Group will have reasonable time to negotiate for dealership and arrange for supply from alternative luxury yacht suppliers to meet the demand of our customers.

We will continue to gather business information of alternative luxury yacht manufacturers with products types and prices comparable to those of Absolute or Azimut, and maintain our relationship with other authorised dealers. We believe that with our proven sales record, strong after-sales services to provide technical support to our customers, as well as deep experience in luxury yacht industry in Hong Kong, our Group is in a position to negotiate and obtain authorised dealership from alternative suppliers, including brand-name luxury yacht companies, in the market in the unlikely event that the business relationship between our Group and Absolute or Azimut is terminated. We believe that customer services and after-sales services play an important role when customers consider purchasing a new yacht. We provide periodic trainings to our staff to keep them abreast of the latest market information and our sales and marketing strategies. Our customer-oriented business philosophy is a value-added service that our Group provides to our customers and can be applied to suppliers of other brands as the sales procedures will be similar. In the occurrence of such event, our Group will work with other established brands as introducers or sub-dealers and sell second-hand yachts.

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Based on the above, we believe that we will be able to procure products we require from alternative suppliers without any significant difficulty, but there may be material interruptions to our operations and business before we can secure supply from alternative suppliers and it may take time for us to negotiate for and/or finalise procurement terms with alternative suppliers. In this respect, pursuant to the Absolute Dealership Agreement, Absolute cannot terminate the dealership agreement with our Group unless our Group fails to comply with or violates our contractual obligations. Pursuant to the Azimut Dealership Agreement 1 and Azimut Dealership Agreement 2, Azimut cannot terminate the dealership agreement with our Group unless our Group fails to comply with or violates our contractual obligations.

For risks associated with our supplier concentration, please see the paragraph headed ‘‘Risk Factors — Risks Related to our Business — A significant portion of our turnover is derived from the sales of luxury motor yachts of our two major brands, Absolute and Azimut, and any weakening of such brands or our relationships with such brands could affect our operations and financial results’’ in this document.

Reduction in level of reliance on Absolute and Azimut and expansion of our supplier base

It is our intention to gradually expand our supplier base by means such as organic growth of our business, expansion into various product segments which Absolute and Azimut are not suppliers and through strategic cooperation with boating companies and dealers. Our business relationship with Zar Formenti commenced when our Director, Mr. Thomas Woo, commenced discussions with their international sales manager about representing them in Hong Kong following an international boat show event. We have entered into one-year dealership agreements with Zar Formenti which had been renewed each year since 2015 to distribute inflatable boats in Hong Kong. Set out below are the principal terms of our existing dealership agreement with Zar Formenti:

Term One year from 1 October 2020 to 30 September 2021

Area of distribution Hong Kong

Minimum purchase A minimum purchase commitment/target was stated in commitment/target the agreement

Restriction on selling price No restriction on selling price and a price list is provided

Payment and credit terms No specific terms set out in the agreement

Delivery No specific terms set out in the agreement

Termination/Renewal The agreement may be cancelled by either party at the end of the term.

Renewal of the agreement is not automatic and must be renewed every year by both parties.

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During the Track Record Period, there were instances where we failed to meet the minimum purchase commitment under our dealership agreement with Zar Formenti. Our Group was required to sell a certain number of boats in Hong Kong. For the period from 1 October 2017 to 30 September 2018, being the term of the relevant dealership agreement, there was no shortfall in relation to the minimum purchase commitment. For the period from 1 October 2018 to 30 September 2019, being the term of the relevant dealership agreement, there was a shortfall of five boats in relation to the minimum purchase commitment. For the period from 1 October 2019 to 30 September 2020, being the relevant term of the dealership agreement, there was noshortfallinrelationtotheminimum purchase commitment. As at the Latest Practicable Date, the term of our current dealership agreement with Zar Formenti is still ongoing. There are no explicit penalties stated under our dealership with Zar Formenti for failing to meet the minimum purchase commitment. Despite failing to meet the minimum purchase commitment, Zar Formenti has continued to renew their agreement with us each year.

Since 2018, we have entered into a one-year dealership agreement with a new supplier, Four Winns, for the supply of sport boats in Hong Kong after our Director, Mr. Paul Grange, met the management members of Four Winns at a boat show in Sanya in Hainan Province in the PRC in 2016. Set out below are the principal terms of our existing dealership agreement with Four Winns:

Term One year from 1 July 2020 to 30 June 2021

Area of distribution Hong Kong

Minimum purchase A minimum purchase commitment/target is stated commitment/target

Restriction on selling price No restriction on selling price and a recommended retail price is provided

Payment and credit terms Payment shall be made in accordance with the terms and conditions stated in the invoice

Delivery All shipment terms will be indicated on the invoice and are subject to Four Winn’s then current terms and conditions of sale

Termination/Renewal The agreement may be terminated at any time upon the occurrence of the following events:

(a) by mutual written consent of the parties;

(b) by either party for any reason upon ninety days’ written notice to the other;

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(d) by either party upon written notice to the other if (i) a party is a corporation and such corporation ceases to exist or goes under voluntary liquidation; (ii) if either party becomes insolvent; (iii) if either party makes a general assignment for the benefit of creditors; (iv) if either party applies to a court for the appointment of a receiver for any assets or properties; or (v) fraudulent misrepresentation.

During the Track Record Period, there were instances where we failed to meet the minimum purchase commitment under our dealership agreement with Four Winns. Our Group was required to sell a certain aggregate value of boats within specified periods. For the period from 1 July 2018 to 30 June 2019 and 1 July 2019 to 30 June 2020, being the terms of the relevant dealership agreements, there was a shortfall of approximately US$0.2 million and US$0.2 million, respectively, in relation to the minimum purchase commitment. Despite our Group not meeting the minimum purchase commitment for the period 1 July 2018 to 30 June 2019, in terms of the overall purchase amount, it was approximately the same minimum purchase commitment. As at the Latest Practicable Date, our current dealership with Four Winns is still ongoing. According to the agreement, if we fail to meet the minimum purchase commitment, Four Winns has the right to terminate the dealership agreement with our Group. Despite failing to meet the minimum purchase commitment for the periods from 1 July 2018 to 30 June 2019 and 1 July 2019 to 30 June 2020, Four Winns has continued to renew their agreement with us.

Our dealership agreements with Zar Formenti and Four Winns specify the products to be supplied by the relevant supplier, the territory our Group is authorised to sell the products, the duration of the agreement and the grounds of termination. In FY2019, our Group sold five Zar Formenti inflatable boats. The sales of Zar Formenti inflatable boats contributed towards approximately 0.5%, nil and 0.2% of our Group’s revenue for FY2019, FY2020 and FY2021, respectively. Our Group also secured our appointment as the authorised dealer of Four Winns in 2018 and sold four, nil and nil Four Winns sport boats in FY2019, FY2020 and FY2021 which contributed towards 1.1%, nil and nil of our Group’s revenue in FY2019, FY2020 and FY2021, respectively. As at the Latest Practicable Date we have completed the sale of five Zar Formenti boats with total contract sum of approximately HK$0.9 million for the financial year ended 2021. Our Group has obtained all necessary waivers and/or consents from Absolute and Azimut to deal with yachts of both brands as well as Zar Formenti and Four Winns.

As the price of sport boats and inflatable boats are significantly less than that of luxury motor yachts and as sport boats and inflatable boats are catered to different clientele with different entertainment purpose, our Directors are of the view that the sales of sport boats and inflatable boats do not cannibalise with yacht sales. Instead it enables our Group to provide a wider and more comprehensive product range to our customers and add a new type of revenue stream for our Group to supplement our yacht sales. According to the Frost & Sullivan Report, customers purchasing sport boats or inflatable boats are mostly yacht owners who disassemble and store the sport boats or inflatable boats on the luxury motor yachts and use them as luxury motor yacht tenders. Our Directors believe that by offering

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OUR BUSINESS sport boats and inflatable boats, our Group would be able to attract new customers who are luxury motor yacht owners who look for sport boats and inflatable boats to be stored on their luxury motor yachts. This helps us to reach more potential customers and creates synergy by promoting our Absolute and Azimut yachts to them.

During the Track Record Period, our Group had actively marketed Four Winns sport boats and Zar Formenti inflatable boats through digital media as well as social events.

According to the Frost & Sullivan Report, one of the restraints in the yacht industry in Hong Kong is the lack of mooring spaces but this would have a minimal impact over the sales and demand of sport boats and inflatable boats as there are alternative storing solutions:

(1) sport boats and inflatable boats differ from yachts in terms of size and functions, with the normal length below 23 feet. Due to the insufficient berths available to boat and yacht owners, prices of berths increase dramatically in Hong Kong leading to different designated mooring spaces based on the type of the vessels for economic purposes instead of sharing of yachts;

(2) certain inflatable boats are introduced as luxury motor yacht tenders, which can be used for the purpose of transporting suppliers and entertainment purposes for the yachts’ passengers; and

(3) some residential complex in Hong Kong such as Marina Cove, allow sport boats to be stored in the front area of their dwellings. Due to the favourable geographical location with proximity to the sea, there is a yacht club in Marina Cove, providing shelter for sport boats.

Furthermore, selling sport boats and inflatable boats will generate service income for our Group’s shipyard through repair and maintenance services. Our Group’s shipyard creates a fixed month-over-month cost such as staff salaries, utilities and overhead. By servicing sport boats and inflatable boats, additional income will be generated to leverage these fixed operating cost.

As our Group targets to build up a portfolio of quality yachts and boats, it is imperative to clarify the details of the agreements, including the product specifications, minimum purchase requirements, the timeline for launching the boats, before the Group commit to sourcing inventory from such suppliers.

[REDACTED]

We have been expanding and will continue to expand our supplier base by exploring co-operation opportunities with new suppliers of products that do not compete with Absolute and Azimut such as sailing boats and fishing boats, introducing new product segments that we consider to have growth potential as well as increasing our sales of second-hand yachts. There are no terms in the Absolute Dealership Agreement, Azimut Dealership Agreement 1 and Azimut Dealership Agreement 2 that prevent our Group from selling yachts supplied by another brand if our respective agreements are terminated. It is

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OUR BUSINESS our Group’s strategy to continue to remain as the exclusive dealer and strengthen the long- term business relationship with both Absolute and Azimut, which are amongst the few internationally renowned brands for luxury motor yachts. Our Group will only seek alternative suppliers when (a) authorisation or waiver is obtained from the two major suppliers; and (b) in the unlikely event that business relationship with Absolute and/or Azimut is interrupted or terminated. We have implemented guidelines for selecting and introducing new suppliers and/or new products to our offering.

Based on the above, our Directors are of the view, and the Sole Sponsor agrees, that there is a realistic expectation that the level of our reliance on Absolute and Azimut will gradually decline over the coming years.

Supply during the Track Record Period

We have not experienced any shortage or material delay of supply which have any material impact on our business operation.

We have not been subject to significant price increases by our suppliers during the Track Record Period and our Directors believe that the annual adjustments to the price lists are in line with industry norms.

Product selection and procurement process

Our Directors are invited to products and new yacht model launches by our suppliers and we are responsible for promoting new yacht models to be introduced to our product offering based on market demand, customer feedback and information from our suppliers about their new products. We intend to further expand our product offering.

Credit and payment terms

There are generally no credit period granted by our major suppliers. During the Track Record Period and up to the Latest Practicable Date, our Group did not experience any cancellation of orders by our customers after we make full or partial payments to the yacht manufacturers. During the Track Record Period, most of our purchases were settled by telegraphic transfer in EUR.

Hedging

During the Track Record Period and up to the Latest Practicable Date, our Group did not engage in any hedging activity.

INVENTORY MANAGEMENT

The purchase of yachts is arranged based on (i) the purchase information of yacht model, facility description and special requirement, payment terms and expected delivery date received from our Directors; and (ii) minimum purchasing target that needs to be met based on dealership agreement signed with suppliers. For yachts that are produced but not yet delivered to customer will be treated as inventory by our Group. To manage our

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Group’s second hand yachts inventory, including those with long inventory turnover days, our Group will advertise second hand yachts on international websites to cover a broader scope of the Asia market as well as advertise in other locations in Asia which in the view of our Directors, have demand for second hand yachts.

AWARDS AND RECOGNITIONS

The table below sets out some of our major awards and recognitions our Group received from during the Track Record Period:

Awarding organisation/ Year Award/Recognition Authority/Business partner

2018 Best Marketing Event MEA-APAC Azimut

2018 Best Brand Presence in Asia Asia Boating Awards

2018 Best Exhibitor Award The 8th China Macau International Yacht Import and Export Fair

2019 Best Brand Presence in Asia Asia Boating Awards

2019 Best After Sales Support EMEA- Azimut APAC

2019 Best Media Award Macau Yacht Show

RESEARCH AND DEVELOPMENT

During the Track Record Period and as at the Latest Practicable Date, we did not engage in any research and development activity.

INFORMATION TECHNOLOGY

We have maintained our customer data base to collect and analyse customer information such as their profiles and preferences as well as purchase records, which in turn enables us to effectively allocate our resources, tailor our sales efforts and utilise our sales networks. We provide this information to our customer facing staff to provide them with a clear snapshot of the purchase history of our customers and to improve our customer service.

MARKET AND COMPETITION

The yacht distribution market in Hong Kong was considered concentrated for the year ended 30 April 2020 in terms of revenue. According to the Frost & Sullivan Report, the market was shared by more than 100 yacht dealers, and in the year ended with 30 April 2019, the top five yacht dealers in Hong Kong generated an aggregate revenue of

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OUR BUSINESS approximately HK$1,273.5 million, contributing to 41.8% of the entire market. We compete with other yacht dealers who sell yachts and boats as well as providing after-sales support, yacht managing and brokerage services to our customers. We also compete with other dealers who sell second-hand yachts at discounts in the second-hand market. Our business is also affected by competition among yacht manufacturers and their brands in terms of quality, design and price.

Analysis on the Competitive Advantage of our Group

According to the highly-reputed Global Order book released by Boat International, Azimut has leading order volume and enjoys a high brand awareness worldwide, which has been ranked as the world’s top builder of mega yachts for 19 years running from 2000 to 2019, far exceeding the other players. If there is a need to purchase yachts in Hainan Province, Guangdong Province, Singapore, Hong Kong, etc., Azimut is usually the first choice for the selection. In the past few years, Azimut has achieved good sales records in Guangdong Province, Hainan Province, Hong Kong, and Singapore. Ten years ago, the yacht industry in the PRC is still in the initial stage, people’s consumption level is still at a relatively low level and purchasing yachts is not common. At that time, the Azimut has already entered the yacht market in Hainan Province and Guangdong Province and achieved good sales results that an average of 7 yachts can be sold each year, and even 12 yachts were sold in 2011. Likewise, Azimut has a good sales record in Hong Kong and can sell an average of 7 yachts. Azimut’s sales condition in Singapore is also stable, with an average annual sale of approximately 5 yachts. As Azimut has entered the yacht market in these regions earlier and accumulated good sales records, it has accumulated a considerable reputation and credibility.

Alternatively, Absolute is a worldwide icon of creative independence, with bold Italian character and passion for yachting. Absolute yachts currently use Inboard Performance System (IPS) extensively which has changed the traditional complicated driving style and made driving easier, greatly reducing the yacht owner’s daily maintenance costs. This system is also a real green environmental protection system that can increase power while reducing fuel consumption. Thus, due to the diverse demand for yachts and the growing environmental awareness, Absolute has its specific market and good prospects for the future. The Group has Azimut’s exclusive dealership in Hong Kong, Guangdong Province, Taiwan, Macau and Singapore, and Absolute’s exclusive dealership in Hong Kong, Guangdong Province, Macau, Thailand and Vietnam, thus there is great potential for the business expansion for the Group when compared with other distributors in these regions which act as agent for the sale of other brands.

EMPLOYEES

We believe that our employees are an essential component of our continued success. We are committed to recruiting, training and promoting skilled personnel at all levels of our organisation.

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As at the Latest Practicable Date, we had a total of 25 employees in Hong Kong. The number of our employees classified by function is as follows:

Number of Function employees

Directors 3 Senior management 2 Captain and boat boy 9 Finance and accounting 1 Technician and boat engineer 8 Service manager 1 Shipyard manager 1

Total 25

Relationship with staff

Our Directors consider that our Group has maintained a good relationship with its employees. Our Directors confirm that our Group has complied with all applicable labour laws and regulations in Hong Kong.

During the Track Record Period and up to the Latest Practicable Date, our Group did not have any labour unions. Our Directors confirm that our Group did not experience any significant problems with its employees or disruption to its operations due to labour disputes nor has our Group experienced any difficulties in the retention of experienced staff or skilled personnel during the Track Record Period.

Training and recruitment policies

Our Directors believe that the quality of our staff plays an important role in maintaining our Group’s operation and production efficiency, as well as the consistency of our Group’s customer service quality. Our Group intends to use its best effort to attract and retain appropriate and suitable personnel to serve our Group. Our Group assesses the available human resources on a continuous basis and will determine whether additional personnel are required to cope with our Group’s business development. We primarily rely on referral for our Hong Kong office. Our Group provides an employee handbook concerning matters such as operational safety to its employees and we also provide on-the-job training.

Remuneration policy

Our Group entered into separate employment contracts with each of our Group’s employees in accordance with the applicable employment laws in Hong Kong and in Singapore. We participated in the mandatory provident fund prescribed by the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong). Our Directors confirm that there is no non-compliance in accordance with the aforesaid law as at the Latest Practicable Date.

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HEALTH, WORK SAFETY, SOCIAL AND ENVIRONMENTAL MATTERS

We are not subject to any significant health, safety or environmental risks. We do not operate any production facilities or transportation, as we engage third parties to transport our yachts. Our Directors are responsible for keeping abreast of the latest labour law and tax regulations and ensure compliance.

In order to provide a safe working environment and protect our employees from occupational hazards, we have also implemented workplace measures to ensure all risk- bearing activities are supervised. Our liability to our employees is covered by insurance, which we are required by law to have.

During the Track Record Period and up to the Latest Practicable Date, we had not been subject to any fines or other penalties due to non-compliance with health, safety or environmental regulations.

INTELLECTUAL PROPERTY RIGHTS

Under our dealership agreements, we are typically entitled to use the trade names, trademarks and other branding materials in a manner consistent with the standards set by yacht manufacturers to promote the yachts we sell in our dealerships.

As at the Latest Practicable Date, we had registered two trademarks in Hong Kong and one trademark in Singapore. We were also the registered owner of three domain names. Our Directors confirm that we have not knowingly infringed any other third parties’ intellectual property rights during the Track Record Period that would have a material adverse impact to our operation and financial position. As at the Latest Practicable Date, we did not have any pending or threatened claims against us or any of our subsidiaries relating to the infringement of any intellectual property rights owned by third parties.

For information about the intellectual property rights related to our Group, please see the section headed ‘‘Statutory and general information — B. Further information about our business — 2. Intellectual property rights of our Group’’ in Appendix IV to this document.

PROPERTIES

As at the Latest Practicable Date, we leased one property at Portion B of Shop No. 6 on Ground Floor, South Wave Court, No. 3 Shum Wan Road, Hong Kong which we use as our current office premises and our principal place of business with a lease term of three years commencing from 16 November 2018.

As at the Latest Practicable Date, our Group had no single property with carrying amount of 15% or more of our Group’s total assets, and on this basis, our Group is not required by Rule 8.01A of the GEM Listing Rules to include in this document any valuation report. Pursuant to section 6(2) of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong), this document is exempted from compliance with the requirements of section

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342(1)(b) of the Companies (WUMP) Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (WUMP) Ordinance, which requires a valuation report with respect to all of the our Group’s interests in land or buildings.

INSURANCE

As at the Latest Practicable Date, our insurance coverage included a third-party liability insurance and employees’ compensation insurance against employer’s liability arising from the Employee’s Compensation Ordinance (Chapter 282 of the Laws of Hong Kong).

Our Directors consider that our Group’s insurance coverage is sufficient for our operations and in line with the general industry practice in Hong Kong. Our Group does not maintain any product liability insurance as our Directors believe that it is not the general industry practice in Hong Kong to take out such insurance. For risk related to product liability, please see ‘‘Risk Factors — Our insurance coverage may be inadequate to protect us from certain types of losses’’ in this document. Our Directors confirm that during the Track Record Period, we did not receive any material claim from our customers relating to any liability in relation to our products. Our Directors will review the insurance policies and insurance coverage from time to time to ensure the insurance coverage remains adequate in light of our business growth.

LITIGATION AND CLAIMS

During the Track Record Period and up to the Latest Practicable Date, we were not engaged in any litigation, arbitration or claim of material importance, and no litigation, arbitration or claim is known to our Directors to be pending or threatened by or against us, that would have a material adverse effect on our results of operations or financial condition.

REGULATORY COMPLIANCE

As our operations take place in Hong Kong and Singapore, we shall comply with the relevant laws and regulations in Hong Kong and Singapore, if applicable. A summary of the relevant laws and regulations applicable to our operation in Hong Kong and Singapore are set out in the section headed ‘‘Regulatory overview’’ of this document. As confirmed by our Directors, based on, inter alia, the advice of our Legal Counsel in respect of Absolute Marine, Marine Italia and Marinetec from the perspective of Hong Kong laws and the advice of our Singapore Legal Advisers in respect of Marine Italia Singapore from the perspective of Singapore laws, during the Track Record Period and up to the Latest Practicable Date, we did not have any non-compliance incident which is either a material impact non-compliance or systemic non-compliance in accordance with the interpretation of the Stock Exchange’s guidance letter HKEx-GL63-13.

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Compliance with the Competition Ordinance

The Competition Ordinance (Chapter 619 of the Laws of Hong Kong), entered into force on 14 December 2015, prohibits conduct that prevents, restricts or distorts competition in Hong Kong. For details, please see ‘‘Regulatory Overview — Competition Ordinance (Chapter 619 of the laws of Hong Kong)’’ in this document.

Our exclusive dealership agreements with our suppliers contain recommended retail pricing guidelines set by our luxury motor yacht manufacturers but no restriction is imposed on the selling price. Our Directors are aware of the prohibition under the Competition Ordinance and are of the view that our business operations are not in breach of any of the applicable prohibitions set forth in the Competition Ordinance. We are not aware of any enquiry, investigation, or notification relating to us under the Competition Ordinance.

In particular, as one of the market leaders in the yacht industry, our management shall not conduct our business in any way that will constitute an abuse of our market power, if any, by engaging in conduct that has as its object or effect the prevention, restriction, or distortion of competition in Hong Kong.

In respect of the compliance with the Second Conduct Rule, the following factors are taken into consideration based on the Guideline on the Second Conduct Rule (‘‘Second Guideline’’) published by the Competition Commission:

Lack of substantial degree of market power

(i) Market share and market concentration: We do not consider that we possess substantial market power, which means the ability to charge prices above competitive levels, or to restrict output or quality below competitive levels, for a sustained period of time according to the Second Guideline. Despite our ranking third in terms of revenue generated in the year ended 30 April 2019 among yacht dealers in Hong Kong, our market share was only 7.5% in the year ended 30 April 2019, as the market was shared by more than 100 players according to the Frost & Sullivan Report. Please see ‘‘Industry Overview — Competitive landscape analysis of yacht distribution market in Hong Kong’’ of this document.

(ii) Countervailing buyer power: According to the Second Guideline, the strength of buyers and the structure of the buyers’ side of the market may prevent a supplier from having a substantial degree of market power; buyer power is not so much a matter of the size of the buyer but more a matter of bargaining strength and whether buyers have a choice between alternative suppliers. In the yacht industry, the customers are generally retail users whom may also choose to purchase luxury motor yachts from alternative suppliers.

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No abuse of substantial market power

(iii) No anti-competitive conduct: Our Directors confirmed that we have not engaged and is not engaging in predatory pricing, anti-competitive tying and bundling, margin squeeze or refusal to deal, which are examples of conduct that may constitute an abuse of substantial market power that has as its object or effect the prevention, restriction or distortion of competition according to the Second Guideline.

(iv) Exclusive dealing not abusive: We have not entered into any exclusive cooperation agreements with our customers.

In light of the prohibitions under the Competition Ordinance, we will from time to time seek compliance advices on our business operations.

As confirmed by our Directors, as at the Latest Practicable Date, save as disclosed above, our Group did not receive any notices for any fines or penalties for any non- compliance that is material and systemic in nature.

LICENCES AND PERMITS

During the Track Record Period and up to the Latest Practicable Date, we had obtained all material licences and permits necessary for the operation of our business in Hong Kong and Singapore and such licences and permits were still valid and in force. We have not experienced any refusal of the renewal information on the material licences and permits necessary for the operation of our business. Please see ‘‘Regulatory Overview’’ in the document for further details.

INTERNAL CONTROL

To assess and identify weakness in our internal control procedures, systems and controls, we engaged and independent internal control consultant (‘‘Internal Control Consultant’’) in October 2018 to review the adequacy and effectiveness of our internal control procedures, systems and controls. Through an initial review conducted in October 2018, our Internal Control Consultant identified some weakness and deficiencies in our internal control system, such as the procedures to prevent unauthorised payment and cash management system, and recommended certain measures to be implemented. Following this review, we have taken some remedial measures to improve our internal control system.

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Internal control measure to improve corporate governance

In order to continuously improve our Group’s corporate governance in the future, our Group has adopted or will adopt the following measures recommended by the Internal Control Consultant:

1. On 26 November 2018 and 19 July 2019, our Directors attended training sessions conducted by our Company’s legal adviser as to Hong Kong laws on the ongoing obligations and duties of a director of a company whose shares are listed on the Stock Exchange.

2. We have appointed Kingsway Capital Limited as our compliance adviser upon [REDACTED] to adviser us on regulatory compliance with the GEM Listing Rules.

3. Our Group has appointed Mr. Yip Hoi To, as the company secretary, to handle the secretarial matters and day-to-day compliance matters of our Group. He is also responsible for the timing and procedures for convening annual general meetings, including the time for sending notice of meeting and laying the respective financial statements.

4. On [‧], we established the Audit Committee which will implement formal and transparent arrangements to apply financial reporting and internal control principles in accounting and financial matters to ensure compliance with the GEM Listing Rules and all relevant laws and regulations, including timely preparation and laying of accounts. It will also periodically review our compliance status with the Hong Kong laws after [REDACTED]. The Audit Committee will exercise its oversight by:

(i) reviewing our internal control and legal compliance;

(ii) discussing the internal control systems with the management of our Group to ensure that the management has performed its duty to have an effective internal control system; and

(iii) considering the major investigation findings on internal control matters as delegated by the Board.

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OUR BUSINESS

5. In order to improve the internal control procedures on fund transfer with significant amount, the Group has established an updated Cash Management and Treasury policy which includes the approval process on fund transfer and all the relevant supporting documents for the transfer will be properly maintained. Further, the Group has established a formal authority matrix for fund transfer, including the approving limits and respective authority. In addition, per the signed written resolution dated 30 April 2021, it is noted that when the fund transfer with amount over HK$3 million, joint approval by two Directors will be required. When the fund transfer with amount over HK$10 million, approval by the board of directors will be required and such approval will be properly documented. Besides, the maximum daily limits for fund transfer to registered accounts and non-registered accounts in the banking online system have been set at HK$3 million and HK$0.5 million, respectively. Also, approval limit of two Directors in the bank accounts is HK$10 million.

6. Our Group will seek professional advice and assistance from independent internal control consultants, external legal advisers and/or other appropriate independent professional advisors with respect to matters related to our internal controls and compliance when necessary and appropriate.

View of our Directors

Based on the Internal Control Consultant’s review and recommendations, our Group has duly adopted the measures and policies in order to improve our internal control systems and to ensure our compliance with the GEM Listing Rules and relevant Hong Kong laws. Furthermore, after the Internal Control Consultant had performed their follow-up review from 30 November 2018 to 30 April 2021, they did not identify any further issues and made no further recommendations in the respective areas covered in their reviews. Based on the results of the internal control reviews, our Directors are of the view, and the Sole Sponsor concurs, to the adequate and effective internal control procedure and policies have been put in place by our Group.

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DIRECTORS AND SENIOR MANAGEMENT

BOARD OF DIRECTORS

Our Board consists of six Directors, including three executive Directors and three independent non-executive Directors. The table below sets forth the information regarding our Board:

Relationship with other Directors, members of our senior management Responsibilities Date of joining Date of appointment and Substantial Name Age Position in our Group our Group as Director Shareholders

Mr. WOO [57] Chairman of our Formulating our Group’s 20 January 2014 16 October 2018 N/A Thomas Board, executive business strategic (胡禮賢) Director and planning and the overall chairperson of our management of our nomination Group, with specific committee focus on sales, manufacturers relationships and client management

Mr. GRANGE [51] Chief executive Formulating our Group’s 1 December 2015 16 October 2018 N/A Paul Jonathan officer, executive business strategic Director and planning and overseeing member of our the overall management remuneration of our Group, with committee specific focus on manufacturers’ relationships, contracting and human resources

Ms. Wu Siu Ling [34] Executive Director Overseeing daily office 14 September 2015 9 July 2019 N/A (胡小玲) management and administrative works

[Mr. Yeung Chi [60] Independent non- Providing independent [‧][‧]N/A Wai (楊志偉)] executive Director, judgment to our Board, chairperson of our audit committee and audit committee nomination committee and member of our nomination committee

[Mr. Yip Ki Chi [55] Independent non- Providing independent [‧][‧]N/A Luke (葉祺智)] executive Director judgment to our Board, and member of remuneration committee, our remuneration audit committee and committee, audit nomination committee committee and nomination committee

Ms. Yu Shun Yan [39] Independent non- Providing independent [‧][‧]N/A Verda executive Director, judgment to our Board, (余舜茵) chairperson of our remuneration committee remuneration and audit committee committee and member of our audit committee

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DIRECTORS AND SENIOR MANAGEMENT

Executive Directors

Mr. WOO Thomas (胡禮賢), aged [57], is our executive Director, our founder, one of our Controlling Shareholders, the chairman of our Board and chairperson of our nomination committee. He is also a director of each of the operating subsidiaries of our Group. He is primarily responsible for formulating our Group’s business strategic planning and the overall management of our Group, with specific focus on sales, manufacturers’ relationships and client management.

Mr. Thomas Woo has more than 11 years of experience in the yacht distribution market. Prior to joining our Group, he worked as a programmer at Computasia Limited from 1986 to 1987. He has served as a director in various companies within the TAC Group from 1987 to 1993. Subsequently, he served as a director at Depromax Limited from 1993 to 1999, during which he concurrently served as a marketing director at Advanced Avionics Limitedfrom1993to1997.HethenservedasadirectoratWaterWorldLimitedfrom2001 to 2006. From 2006 to 2013, he was engaged in a yacht trading business as a sole proprietor under the name of ‘‘Marine Italia’’. In January 2014, Mr. Woo founded our Group.

Mr. Thomas Woo obtained a bachelor’s degree in computer science from the University of San Francisco in December 1985.

Mr. Thomas Woo was a director of the following companies, which were dissolved, with details as follows:

Nature of Place of Nature of business before Name of company incorporation Date of dissolution proceeding dissolution

TAC Limited Hong Kong 9 February 2001 Deregistration Provision of car (Note 1) repair services

TAC International Hong Kong 9 May 2003 Striking Off Investment (Holdings) Limited (Notes 3 and 4) holding

Depromax Limited Hong Kong 5 May 2004 Compulsory Manufacture of (廸寶龍有限公司) Winding Up car security (Note 2) and alarm system

China Capital Hong Kong 28 May 2004 Striking Off Inactive Technology Limited (Notes 3 and 4) (華基科技有限公司)

Coupon7.com Limited Hong Kong 9 July 2004 Deregistration Inactive (Note 1)

Water World Limited Hong Kong 15 April 2005 Deregistration Provision of boat (海之樂有限公司) (Note 1) rental services

TAC Development Hong Kong 21 October 2005 Striking Off Trading of car Limited (Notes 3 and 4) security and alarm system

Kingfisher Limited Hong Kong 10 March 2006 Striking Off Development of (Notes 3 and 4) car security and alarm system

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DIRECTORS AND SENIOR MANAGEMENT

Notes:

1. Under section 291AA of the Predecessor Companies Ordinance, an application for deregistration can only be made if (a) all members of such company agree to such deregistration; (b) such company has never commenced business or operation, or has ceased to carry on business or ceased operation for more than three months immediately before the application; and (c) such company has no outstanding liabilities.

2. Depromax Limited was incorporated in Hong Kong on 22 July 1993 with limited liability and was principally engaged in the business of manufacturing car security and alarm system. According to the petition for compulsory winding up of Depromax Limited filed on 17 September 1999 by the Director of Legal Aid acting for and on behalf of the petitioner, a previous employee of Depromax Limited and an independent third party, Depromax Limited was indebted to the petitioner in a sum of HK$108,779, being arrears of wages, wages in lieu of notice of dismissal, annual leave pay, severance pay and pro-rate double pay. As confirmed by Mr. Thomas Woo, Depromax Limited’s products of car security and alarm system became outdated since the international vehicles manufacturers had developed their own built-in car security and alarm system. Given the loss of market demand of its products, Depromax Limited had tried to change its business focus in order to survive but regrettably failed at the end. Since Depromax Limited was insolvent and unable to pay such debts because of financial difficulty, Depromax Limited was ordered to be wound up by the court on 1 December 1999. Based on the documents filed with the court available for inspection, to the best of our Directors’ knowledge, information and belief having made reasonable enquiry, there was no judgment or findings of fraud, dishonesty, any misconduct or wrongful act on the part of Thomas Woo’s involvement in the dissolution of Depromax Limited.

3. Since the company had been inactive, the director(s) overlooked inadvertently and failed to file Annual Return(s) as required under the Predecessor Companies Ordinance and therefore the company was struck off by the Registrar of Companies under section 291 of the Predecessor Companies Ordinance.

4. Under section 291 of the Predecessor Companies Ordinance, the Registrar of Companies may strike off the name of a company from the register of companies where the Registrar of Companies has reasonable cause to believe that a company is not carrying on business or in operation.

Save for Depromax Limited, Mr. Thomas Woo confirmed that the above-mentioned companies had remained solvent and had no outstanding liabilities on or before their dissolutions. Save as disclosed above, Mr. Thomas Woo further confirmed that the above- mentioned companies have not been involved in any material non-compliance incidents, claims, litigations or legal proceedings and there were no claims against himself in relation to the above-mentioned companies. Mr. Thomas Woo further confirmed that there was no wrongful act on his part leading to the dissolutions of the above-mentioned companies.

Mr. GRANGE Paul Jonathan, aged [51], is our executive Director, the chief executive officer, one of our Controlling Shareholders and a member of our remuneration committee. He is also a director of each of the operating subsidiaries of our Group. Mr. Paul Grange is primarily responsible for formulating our Group’s business strategic planning and overseeing the overall management of our Group, with specific focus on manufacturers relationships, contracting and human resources.

Mr. Paul Grange has more than 25 years of experience in the yacht distribution market. Prior to joining our Group, he worked as a yacht broker at Cobbs Quay Boat Sales from July 1993 to July 1995. From July 1995 to May 1999, he worked as a sales manager at

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DIRECTORS AND SENIOR MANAGEMENT

Sunseeker Sales (UK) Limited. Mr. Paul Grange subsequently founded Grange International Limited in June 1999 and served as its managing director from June 2000 to August 2012, during which he concurrently served as a group sales and brokerage director at Sunseeker Sales Group UK Limited from August 2005 to October 2009 and as a managing director at Sunseeker East Africa Limited from September 2010 to August 2012. From September 2012 to July 2015, Mr. Paul Grange worked as a group sales manager at Simpson Marine Limited Hong Kong. In December 2015, Mr. Paul Grange joined our Group.

Mr. Paul Grange obtained a higher national diploma in leisure studies from the Southampton Institute of Higher Education (currently known as Solent University) in July 1993.

Mr. Paul Grange was a director of the following companies, which were dissolved, with details as follows:

Place of Nature of business Name of company incorporation Date of dissolution Nature of proceeding before dissolution

Sunseeker Sales United Kingdom 3 March 2009 Voluntary Strike-off Yacht brokerage Brokerage Limited (Notes 1 and 2) business

Sunseeker Sales UK United Kingdom 3 March 2009 Voluntary Strike-off Yacht brokerage Brokerage Limited (Notes 1 and 2) business

Sunseeker Yacht United Kingdom 3 March 2009 Voluntary Strike-off Yacht brokerage Brokerage Limited (Notes 1 and 2) business

Shoo 372 Limited United Kingdom 10 March 2009 Voluntary Strike-off No business (Notes 1 and 3) operation

Sunseeker Brokerage United Kingdom 10 March 2009 Voluntary Strike-off Yacht brokerage UK Limited (Notes 1 and 2) business

Grange International United Kingdom 14 July 2009 Voluntary Strike-off Yacht brokerage (South West) (Notes 1 and 2) business Limited

F&G Brokerage United Kingdom 22 February 2011 Voluntary Strike-off Yacht brokerage Limited (Notes 1 and 2) business

F&G Sales Group United Kingdom 22 February 2011 Voluntary Strike-off Yacht brokerage Brokerage Limited (Notes 1 and 2) business

Sunseeker East Africa United Kingdom 3 September 2013 Struck off the register Boat sales Ltd and dissolved by the UK Companies House (Notes 5 and 6)

Grange International United Kingdom 25 November 2014 Voluntary Strike-off Yacht brokerage Limited (Notes 1 and 4) business

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DIRECTORS AND SENIOR MANAGEMENT

Notes:

1. This company was voluntarily struck off due to amicable ending of the commercial arrangement between Mr. Paul Grange and the other director(s) of the company.

2. Under section 1003 of the Companies Act 2006 of the United Kingdom (the ‘‘Companies Act 2006’’), subject to sections 1004 and 1005, a director, secretary of a company or an adviser to the company may apply for voluntary striking off of the company from the register.

3. This company was voluntarily struck off due to no business operation since its incorporation.

4. This company was voluntarily struck off because Mr. Paul Grange decided to focus his career in Hong Kong.

5. This company was struck off due to lack of trade. It was not insolvent.

6. Under section 1000 of the Companies Act 2006, the registrar may strike off a company if he has reasonable cause to believe that the company is not carrying on business or in operation.

Mr. Paul Grange confirmed that the above-mentioned companies had remained solvent and had no outstanding liabilities on or before their dissolutions, and have not been involved in any material non-compliance incidents, claims, litigations or legal proceedings and there were no claims against himself in relation to the above-mentioned companies. Mr. Paul Grange further confirmed that there was no wrongful act on his part leading to the dissolutions of the above-mentioned companies.

Ms. WU Siu Ling (胡小玲), aged [34], is our executive Director. She is primarily responsible for overseeing daily office management and administrative works.

Ms. Wu has more than 11 years of experience in the yacht brokerage industry. Prior to joining our Group, she worked at Simpson Marine Limited from September 2007 to September 2015, with her last position as Azimut Yachts sales support. Ms. Wu joined our Group as an office manager on 14 September 2015, and was subsequently promoted to executive Director on 9 July 2019.

Ms. Wu completed her secondary school education at Aberdeen Baptist Lui Ming Choi College in June 2007.

Independent non-executive Directors

Mr.YeungChiWai(楊志偉), aged [60], is our independent non-executive Director, the chairperson of our audit committee, and a member of our nomination committee. He is responsible for providing independent judgment to our Board, audit committee and nomination committee.

Mr. Yeung has more than 28 years of experience in accounting, finance and audit. Prior to joining our Group, Mr. Yeung founded Edwin Yeung & Company (CPA) Limited in 2008 and he has served as its director since then. He has also served as a director at Accounting Development Foundation Limited since 2012. In [‧], Mr. Yeung joined our Company as an independent non-executive Director.

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DIRECTORS AND SENIOR MANAGEMENT

Mr. Yeung was a president of the Society of Chinese Accountants and Auditors in 2008 and he has been a council member of the said society since 2012. He was a member of the 11th and 12th Shandong Committee of the Chinese People’s Political Consultative Conference. He is currently a member of the disciplinary panel of the Hong Kong Institute of Certified Public Accountants, the Home Purchase Allowance Appeals Committee of the Development Bureau and the Appeal Board Panel (Town Planning) of the Development Bureau. He was awarded the Medal of Honour by the Government of Hong Kong in 2010.

Mr. Yeung was admitted as an associate member and a fellow member of the Chartered Association of Certified Accountants in September 1988 and September 1993, respectively. Hewasalsoadmittedasanassociatemember and a fellow member of the Hong Kong Institute of Certified Public Accountants in January 1989 and February 1996, respectively. Subsequently, He was admitted as an associate member and a fellow member of the Institute of Chartered Accountants in England and Wales in February 2005 and February 2016, respectively. He was also admitted as a fellow member of CPA Australia in September 2010.

Mr. Yeung has served as an independent non-executive director at China Outfitters Holdings Limited (stock code: 1146), Wah Sun Handbags International Holdings Limited (stock code: 2683) and Golden Century International Holdings Group Limited (stock code: 00091), the shares of which are all listed on the Main Board of the Stock Exchange, since June 2011, January 2018 and April 2020, respectively.

Mr. Yeung was a director of the following company, which was dissolved, with details as follows:

Place of Nature of Nature of business Name of company incorporation Date of dissolution proceeding before dissolution

China Bio-Pharm Hong Kong 30 January 2003 Deregistration No business Development (Note) operation Company Limited (中華新藥業開發有限公司)

Note: Under section 291AA of the Predecessor Companies Ordinance, an application for deregistration can only be made if (a) all members of such company agree to such deregistration; (b) such company has never commenced business or operation, or has ceased to carry on business or ceased operation for more than three months immediately before the application; and (c) such company has no outstanding liabilities.

Mr. Yeung confirmed that the above-mentioned company had remained solvent and had no outstanding liabilities on or before its dissolution, and has not been involved in any material non-compliance incidents, claims, litigations or legal proceedings and there were no claims against himself in relation to the above-mentioned company.

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DIRECTORS AND SENIOR MANAGEMENT

Mr.YipKiChiLuke(葉祺智), aged [55], is our independent non-executive Director, a member of our audit committee, remuneration committee and nomination committee. Mr. Yip is responsible for providing independent judgment to our Board, audit committee, remuneration committee and nomination committee.

Mr. Yip has more than 26 years of experience in the legal profession. Prior to joining our Group, Mr. Yip worked as a trainee solicitor and subsequently a solicitor at Messrs. P.C. Woo & Co. from May 1992 to September 1996. He worked as a solicitor at Messrs. Siao, Wen & Leung from October 1996 to February 1997. Then, Mr. Yip became a partner and subsequently a consultant at Messrs. Wong & Yip from March 1997 to September 1999. He has been a partner of Messrs. Cheung & Yip since February 1999. He was a director of Sheen Profit International Limited from April 2019 to April 2020. In [‧], Mr. Yip joined our Company as an independent non-executive Director.

Mr. Yip obtained a bachelor of laws degree from the University of London in August 1991 and a postgraduate certificate in laws from The University of Hong Kong in June 1992. He was admitted as a solicitor of the High Court of Hong Kong in April 1994. He has been admitted as a member of the Hong Kong Society of Notary Public since 2006. He was recognised as an accredited general mediator by the Law Society of Hong Kong in December 2010. He has been appointed as an attesting officer of the Association of China- Appointed Attesting Officers Limited since December 2015. He was appointed as a civil celebrant in May 2016.

Mr. Yip has served as an independent non-executive director at Indigo Star Holdings Limited (stock code: 8373) and at Top Standard Corporation (stock code: 8510), the shares of which are all listed on GEM of the Stock Exchange, since October 2017 and September 2020, respectively.

Ms. Yu Shun Yan Verda (余舜茵), aged [39], is our independent non-executive Director, the chairperson of our remuneration committee and a member of our audit committee. She is responsible for providing independent judgment to our Board, audit committee and remuneration committee.

Ms. Yu has more than 12 years of experience in various industries, including business promotion, corporate communication and relationship management. Prior to joining our Group, Ms Yu worked in different business sectors including public relation company and financial institutes. Also, she has been working as a deputy head of wealth management at Gransing Wealth Management Limited and as an account executive at Gransing Securities Co., Limited since April 2017 and April 2018, respectively. Ms. Yu is currently a licensed representative permitted to carry out type 1 (dealing in securities) regulated activities under the SFO at Gransing Securities Co., Limited. In [‧], Ms. Yu joined our Company as an independent non-executive Director.

Ms. Yu obtained a bachelor of education (honours) (secondary) from The Hong Kong Institute of Education (currently known as The Education University of Hong Kong) in 2004. Ms. Yu has been a licensed representative permitted to carry out type 1 (dealing in securities) regulated activities under the SFO since April 2018. Ms. Yu is currently also a licensed technical representative (broker) under the Insurance Ordinance (Cap. 41).

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DIRECTORS AND SENIOR MANAGEMENT

Ms. Yu served as an independent non-executive director at China 33 Media Group Limited (stock code: 8087), the shares of which are listed on GEM of the Stock Exchange, from 5 March 2015 to 23 November 2020.

Other disclosure pursuant to Rule 17.50(2) of the GEM Listing Rules

Save as disclosed above and elsewhere in this document (if any), each of our Directors confirmed with respect to himself or herself that: (i) he or she is independent from and had no other relationships with any Directors, members of our senior management, Substantial Shareholders or Controlling Shareholders as at the Latest Practicable Date; (ii) apart from our Company, in the last three years leading up to and as at the Latest Practicable Date, he or she is not holding, nor had he or she held directorships in any other public company the securities of which are listed on any securities market in Hong Kong and/or overseas; (iii) he or she did not hold other positions in our Company or other members of our Group as at the Latest Practicable Date; (iv) he or she does not have any interests in our Shares within the meaning of Part XV of the SFO, save as disclosed in the paragraph headed ‘‘C. Further information about Substantial Shareholders, Directors and experts — 1. Disclosure of interests — (a) Interests and short positions of Directors and chief executive in Shares, underlying Shares and debentures of our Company and its associated corporations’’ in Appendix IV to this document; (v) he or she does not have any interests in any business which competes or may compete, directly or indirectly, with us, which is disclosable under the GEM Listing Rules, save as disclosed in the section headed ‘‘Relationship with our Controlling Shareholders’’ of this document; and (vi) to the best of the knowledge, information and belief of our Directors having made all reasonable enquiries, there is no additional information relating to our Directors or senior management that is required to be disclosed pursuant to Rule 17.50(2) of the GEM Listing Rules and no other matters with respect to their appointments that need to be brought to the attention of our Shareholders as at the Latest Practicable Date.

SENIOR MANAGEMENT

The table below sets forth information regarding our senior management:

Relationship with other Directors, members of our senior management Responsibilities Date of joining and Substantial Name Age Position in our Group our Group Shareholders

Ms. LAU Oi Yee [29] Office manager and Overseeing the daily October 2016 N/A (劉靄儀) coordinator office management and coordinating the daily operation of our office

Ms. QIAN Jing [39] Marketing manager Overseeing the July 2018 N/A (錢晶) marketing of our Group

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DIRECTORS AND SENIOR MANAGEMENT

Ms. LAU Oi Yee (劉靄儀), aged [29], is our office manager and coordinator. She is primarily responsible for overseeing the daily office management and coordinating the daily operation of our office.

Ms. Lau has more than seven years of experience in sales and marketing. Prior to joining our Group, she worked as a sales at CNI Bullion Limited from August 2012 to January 2014. Subsequently, she worked as an administrative assistant at Twipower International Limited from February 2014 to September 2016. In October 2016, Ms. Lau joined our Group.

Ms. Lau was awarded the Yi Jin Programme — Certificate in Life Skills from the Lingnan Institute of Further Education in November 2009. Subsequently, she obtained a Diploma in Applied Psychology from the Community College at Lingnan University in 2011.

Ms. QIAN Jing (錢晶), aged [39], is our marketing manager. She is primarily responsible for overseeing the marketing of our Group.

Ms. Qian has more than 10 years of experience in the sales and marketing industry. Prior to joining our Group, she worked as a visual merchandiser at Prada China office from March 2008 to October 2008. She worked as a marketing assistant manager and visual merchandiser at Shanghai Bi Chu Trading Limited* (上海碧儲貿易有限公司) from October 2008 to May 2010. Subsequently, She worked as a marketing executive at Officine Panerai China office from May 2010 to June 2012. From October 2012 to March 2016, she worked as a marketing manager at Azimut. She then worked as a freelance consultant from August 2016 to June 2018. In July 2018, Ms. Qian joined our Group as a marketing manager.

Ms. Qian obtained a bachelor’s degree in foreign administration from the Shanghai Bangde College in July 2003. She also obtained a degree of master in public administration from the Roskilde University in February 2008.

Save as disclosed above and elsewhere in this document (if any), each of the members of our senior management confirmed with respect to himself and herself that: (i) as at the Latest Practicable Date, he or she had no interests in our Shares within the meaning of Part XV of the SFO; (ii) he or she did not have any relationships with any Directors, members of our senior management, Substantial Shareholders or Controlling Shareholders as at the Latest Practicable Date; and (iii) he or she did not hold any directorships in any other public company the securities of which were listed on any securities market in Hong Kong and/or overseas in the last three years prior to the Latest Practicable Date.

COMPANY SECRETARY

Mr.YipHoiTo(葉海濤), aged [47], is our company secretary. He is primarily responsible for the company secretarial matters of the Company.

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DIRECTORS AND SENIOR MANAGEMENT

Mr. Yip has more than 20 years of experience in the auditing and advisory field. Prior to joining our Group, he worked at K.P. Cheng & Co. from August 1997 to June 2016, with his last position as a senior manager. He was a principal at AE Majoris CPA & Co. from July 2016 to June 2019. He has been a principal at AE Majoris CPA Limited since July 2019. In 10 December 2018, Mr. Yip joined our Company as the company secretary.

Mr. Yip obtained a degree of bachelor of commerce in accounting from the University of Canberra in May 1996. He has been a fellow member of the Hong Kong Institute of Certified Public Accountants since September 2009.

COMPLIANCE OFFICER

Mr. Paul Grange is the compliance officer of our Company. Details of his qualifications and experience have been disclosed in the paragraph headed ‘‘Executive Directors’’ above in this section.

AUTHORISED REPRESENTATIVES

Mr. Thomas Woo and Mr. Yip Hoi To are our authorised representatives under Rule 5.24 of the GEM Listing Rules.

COMPLIANCE ADVISER

In accordance with Rule 6A.19 of the GEM Listing Rules, our Company has appointed Kingsway Capital Limited to be our compliance adviser. Pursuant to Rule 6A.23 of the GEM Listing Rules, our compliance adviser will advise us in the following circumstances:

(1) before the publication of any regulatory announcement, circular of financial report;

(2) where a transaction, which might be a notifiable or connected transaction, is contemplated including share issues and share repurchases;

(3) where we propose to use the [REDACTED] of the [REDACTED] in a manner different from that detailed in this document or where our business activities, developments or results of operations deviate from any information in this document; and

(4) where the Stock Exchange makes an inquiry of us regarding unusual movements in the price or trading volume of our Shares or any other matters under Rule 17.11 of the GEM Listing Rules.

The term of the engagement will commence on the [REDACTED] and end on the date on which we distribute our annual report as required under Rule 18.03 of the GEM Listing Rules for the second full financial year commencing after the [REDACTED],orwhenthe appointment of Kingsway Capital Limited is terminated, whichever is earlier. Such appointment may be subject to extension by mutual agreement.

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DIRECTORS AND SENIOR MANAGEMENT

BOARD PRACTICES

In the absence of extraordinary events, it is the practice of our Board to meet at least four times a year. At such meetings, our Directors conduct, among other things, an operational review of our business.

BOARD COMMITTEES

Audit Committee

Our Company established an audit committee on [‧] with written terms of reference in compliance with Rules 5.28 to 5.33 of the GEM Listing Rules, and paragraph C.3 of the Corporate Governance Code. The members of the audit committee comprise Mr. Yeung ChiWai,Ms.YuShunYanVerdaandMr.YipKiChiLuke.Thechairpersonoftheaudit committee is Mr. Yeung Chi Wai. The primary duties of the audit committee are mainly to make recommendations to our Board on the appointment and removal of the external auditor, review the financial statements and related materials and provide advice in respect of the financial reporting process and oversee the internal control procedures of our Group.

Remuneration Committee

Our Company established a remuneration committee on [‧] with written terms of reference in compliance with Rule 5.34 of the GEM Listing Rules, and paragraph B.1 of the Corporate Governance Code. The members of the remuneration committee comprise Ms. Yu Shun Yan Verda, Mr. Paul Grange and Mr. Yip Ki Chi Luke. The chairperson of the remuneration committee is Ms. Yu Shun Yan Verda. The primary duties of the remuneration committee are mainly to make recommendations to our Board on the overall remuneration policy and structure relating to our Directors and senior management of our Group, review and evaluate performance in order to make recommendations on the remuneration package of each of our Directors and senior management personnel as well as other employee benefit arrangements.

Nomination Committee

Our Company established a nomination committee on [‧]withwrittentermsof reference in compliance with paragraph A.5 of the Corporate Governance Code. The members of the nomination committee comprise Mr. Thomas Woo, Mr. Yeung Chi Wai and Mr. Yip Ki Chi Luke. The chairperson of the nomination committee is Mr. Thomas Woo. The nomination committee is mainly responsible for making recommendations to our Board on the appointment of Directors and the management of our Board succession.

BOARD DIVERSITY POLICY

In order to enhance the effectiveness of our Board and to maintain the high standard of corporate governance, we have adopted the board diversity policy which sets out the objective and approach to achieve and maintain diversity of our Board. Pursuant to the board diversity policy, selection of Board candidates will be based on a number of perspectives, including but not limited to gender, age, cultural and educational background,

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DIRECTORS AND SENIOR MANAGEMENT industry experience, technical and professional skills and/or qualifications, knowledge, length of services, personal integrity and time commitments. The ultimate decision will be based on merit and contribution that the selected candidates will bring to our Board.

Our Directors have a balanced mix of knowledge and skills, including business strategic planning and overall management, human resources, business relationship management, legal, accounting, finance and auditing. We have three independent non- executive Directors with different industry backgrounds, representing more than one-third of the members of our Board. Mr. Yeung Chi Wai is a member of the Hong Kong Institute of Certified Public Accountants and an awardee of the Medal of Honour by the Government of Hong Kong, and possesses over 28 years of experience in accounting, finance and auditing. Mr. Yip Ki Chi Luke is a solicitor in Hong Kong and has more than 26 years of experience in the legal profession. Ms. Yu Shun Yan Verda has more than 12 years of experience in business promotion, corporate communication and relationship management. Furthermore, our Board has a wide range of age, ranging from [34] years old to [60] years old. Our executive Director,Mr.PaulGrange,isaBritishandhasbeen providing valuable advice to our Board from a foreigner’s perspective. After due consideration, our Board believes that based on our existing business model and specific needs, and meritocracy of our Directors, the composition of our Board satisfies the board diversity policy.

Our nomination committee is responsible for ensuring the diversity of our Board members. After the [REDACTED], our nomination committee will review the board diversity policy from time to time to ensure its continued effectiveness and we will disclose in our corporate governance report about the implementation of the board diversity policy on an annual basis.

REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT

Service contract/Letter of appointment with Directors

Each of our executive Directors has entered into a service contract with our Company for a term of three years commencing from [‧] (subject to termination in certain circumstances as stipulated in the relevant service contract). Each of our executive Directors is entitled to their respective basic salaries and may be entitled to a discretionary bonus. The current basic annual remuneration (including basic salaries and allowances, but excluding discretionary bonuses and retirement benefit scheme contributions) of our executive Directors for their respective executive and management roles in our Group are as follows:

Approximate annual Name remuneration (HK$’000)

Mr. Paul Grange 1,914 Mr. Thomas Woo 1,914 Ms. Wu Siu Ling 603

–210– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

DIRECTORS AND SENIOR MANAGEMENT

Each of our independent non-executive Directors has entered into a letter of appointment with our Company for a period of three years commencing from [‧] (subject to termination in certain circumstances as stipulated in the relevant letter of appointment). The appointments are subject to the provisions of the Articles of Association with regard to vacation of office of Directors and removal and retirement by rotation of Directors. For the remuneration of each of the independent non-executive Directors, please refer to the paragraph headed ‘‘3. Remuneration of Directors’’ in Appendix IV to this document. Save for our directors’ fee, none of our independent non-executive Directors is expected to receive any other remuneration for holding their office as an independent non- executive Director and a member of any board committees of our Company.

Save as disclosed above, no Director has entered into any service agreement with any member of our Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

Emoluments paid during the Track Record Period

For each of FY2019, FY2020 and FY2021, the aggregate amount of remuneration (including basic salaries and allowances, discretionary bonuses and retirement benefit scheme contributions) paid by our Group to our Directors amounted to approximately HK$3.3 million, HK$4.3 million and HK$4.5 million, respectively. Under the arrangement currently in force, it is estimated that an aggregate remuneration (including basic salaries and allowances, but excluding discretionary bonuses and retirement benefit scheme contributions) of approximately HK$4.8 million is payable by our Group to our Directors for the year ending 30 April 2022.

For each of FY2019, FY2020 and FY2021, the aggregate remuneration (including basic salaries and allowances, discretionary bonuses and retirement benefit scheme contributions) paid by our Group to the five highest paid individuals, excluding our Directors, were approximately HK$1.3 million, HK$1.0 million and HK$1.1 million, respectively. For details of the emoluments of our Directors and the five highest paid individuals of our Group during the Track Record Period, please refer to Note 13 in Appendix I to this document.

During the Track Record Period, there wasnoamountpaidtoorreceivablebyanyof the aforementioned five highest paid individuals or any of our Directors as inducement to join or upon joining our Group, and there was no compensation paid to or receivable by any of the aforementioned five highest paid individuals or any of our Directors or past directors for the loss of office as a director of any member of our Group or of any other office in connection with the management of the affairs of any member of our Group. There was no arrangement under which any of our Directors waived or agreed to waive any remuneration during the Track Record Period. Save as disclosed in this document, no other emoluments have been paid, or are payable, by us to our Directors in respect of each of FY2019, FY2020 and FY2021.

–211– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

DIRECTORS AND SENIOR MANAGEMENT

Subject to the review by and the recommendations of our remuneration committee, the remuneration policy we intend to adopt after the [REDACTED] for our Directors and senior management members will be based on comparable market levels and their performance and qualifications.

EMPLOYEES

As at the Latest Practicable Date, our Group had 25 full-time employees who were directly employed by us. For details about our employees and staff policy, please see ‘‘Business — Employees’’ in this document.

Our total staff cost (including salaries, bonus and allowances and retirement benefit scheme contributions) for each of FY2019, FY2020 and FY2021 amounted to approximately HK$8.5 million, HK$10.0 million and HK$11.4 million, respectively.

In Hong Kong, we operate a defined contribution retirement benefits scheme (the ‘‘MPF Scheme’’) under the Mandatory Provident Fund Scheme Ordinance (Chapter 485) of the Laws of Hong Kong for all of our employees in Hong Kong who joined us after the commencement of this ordinance. Contributions are made based on a percentage of the employees’ basic salaries. We contribute the lower of HK$1,500 or 5% of the relevant monthly salary to the MPF Scheme, a contribution to be matched by our employees.

Share Option Scheme

–212– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

OUR CONTROLLING SHAREHOLDERS

On 1 September 2020, in preparation of the [REDACTED], Mr. Thomas Woo and Mr. Paul Grange executed a confirmatory deed in relation to parties acting in concert (the ‘‘Acting-in-concert Confirmatory Deed’’). Pursuant to the confirmation, Mr. Thomas Woo and Mr. Paul Grange acknowledged and confirmed, among others, that they had been acting in concert by actively cooperating to obtain and consolidate control of our Group since December 2015. Mr. Thomas Woo and Mr. Paul Grange further acknowledged, confirmed and agreed that, provided that they remain as the key management members (including directors) of our Group and/or remain interested (either directly or indirectly, or otherwise) in the share capital of any member of our Group, they shall:

— act in concert and collectively for all material management affairs and the arrival and/or execution of all commercial decisions, including but not limited to financial and operational matters, of our Group;

— give unanimous consent, approval or rejection on any other material issues and decisions in relation to the business of our Group;

— cast unanimous vote collectively for or against all resolutions in all meetings and discussions of our Group; and

— cooperate with each another to obtain and maintain control and management of our Group.

Shareholding percentage Number of Shares in our Company immediately following immediately following completion of the completion of the conversion of the conversion of the [REDACTED] [REDACTED] Convertible Bonds, the Convertible Bonds, the Capitalisation Issue and Capitalisation Issue and Name the [REDACTED] the [REDACTED]

Bright Emerald (Note) [REDACTED] [REDACTED]% Mr. Thomas Woo (Note) [REDACTED] [REDACTED]% Mr. Paul Grange (Note) [REDACTED] [REDACTED]%

Note: Bright Emerald is owned by Mr. Thomas Woo and Mr. Paul Grange in equal shares. Further, Mr. Thomas Woo and Mr. Paul Grange have confirmed that they are parties acting in concert.

–213– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

Our Controlling Shareholders comprise of Mr. Thomas Woo, Mr. Paul Grange and Bright Emerald. Bright Emerald is owned by Mr. Thomas Woo and Mr. Paul Grange in equal shares. Bright Emerald is an investment holding company and holds [REDACTED]% of the number of issued Shares immediately following completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue, and the [REDACTED] (without taking into account any Shares which may be issued upon the exercise of the [REDACTED] or any options, which may be granted under the Share Option Scheme). As such, Mr. Thomas Woo, Mr. Paul Grange and Bright Emerald are the Controlling Shareholders for the purpose of the GEM Listing Rules.

Our Directors do not expect that there will be any significant transactions between our Group and our Controlling Shareholders immediately following the [REDACTED].Saveas disclosed in the section headed ‘‘Connected Transaction’’ in this document, to the best knowledge of our Directors, there will not be any other continuing connected transactions upon [REDACTED].

Having taken into consideration the following factors, our Directors are of the view that we are capable of carrying on our business independently from, and do not place undue reliance on our Controlling Shareholders and his/her/its respective close associates after the [REDACTED]:

Management independence

Board

Our Board consists of six Directors, among which three are executive Directors and three are independent non-executive Directors.

Each of our Directors is aware of his/her fiduciary duties as a Director which require, among other things, that he/she acts for the benefit and in the best interests of our Company and not to allow any conflict between the interests of our Company and his/her personal interests. In the event that a potential conflict of interests arises out of any transaction to be entered into between us and our Directors or their respective close associates, the interested Director(s) is/are to abstain from voting at the relevant Board meetings in respect of such transactions and not to be counted in the quorum.

Committees

We have established an audit committee, a remuneration committee and a nomination committee. Each committee consists of a majority of independent non- executive Directors.

–214– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

The audit committee is responsible for reviewing and supervising our financial reporting process and internal control system whereas the remuneration committee’s role is to ensure that our Directors are properly remunerated without being influenced by our Controlling Shareholders. The nomination committee is mainly responsible for making recommendations to our Board on appointment of Directors and succession planning for our Directors.

Our Directors are of the view that we are capable of managing our business independently of our Controlling Shareholders after the [REDACTED].

Operational independence

Our operations are independent from and not connected with our Controlling Shareholders.

Our Group does not rely on our Controlling Shareholders for our operating licences, and has sufficient capital, equipment and employees we require to operate the business independently from our Controlling Shareholders. Our Board is responsible for determining the strategic development and management of our Group. Reporting to our Board is a management team employed by us who is responsible for all essential operational functions, including business development, sales and marketing and sourcing and who makes operational decisions within the authorisation and parameters set by our Board only. Our Company has also established a set of internal controls to facilitate the effective operation of our business.

Financial independence

Our Company will be financially independent from our Controlling Shareholders upon the [REDACTED]. All outstanding loans and non-trade payables owed to and from our Controlling Shareholders and his/her/its respective close associates, if any, will be settled before the [REDACTED].

Our Directors are of the view that our Group will be able to obtain further financing such as bank loans, if necessary, upon market terms and conditions without relying on financial assistance from our Controlling Shareholders and his/her/its respective close associates after the [REDACTED].

UNDERTAKINGS

Our Controlling Shareholders have jointly and severally given certain undertakings in respect of our Shares (including those as set out in Rules 13.16A (1) and 13.19 of the GEM Listing Rules) to our Company, the [REDACTED],the[REDACTED] and the [REDACTED], details of which are set out in the section headed ‘‘[REDACTED] — Undertakings’’ in this document.

–215– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

DISCLOSURE PURSUANT TO RULE 11.04 OF THE GEM LISTING RULES

None of our Directors, Controlling Shareholders, Substantial Shareholders and his/ her/its respective close associates engages in the sales of first-hand yachts of luxury and mid-to-high-end brands or any interest that competes or may compete with the business of our Group which shall be disclosed in this document pursuant to Rule 11.04 of the GEM Listing Rules.

NON-COMPETITION UNDERTAKING AND CORPORATE GOVERNANCE MEASURES TO MANAGE CONFLICTS OF INTERESTS

Undertakings

In order to maintain a clear delineation of the businesses between us and our Controlling Shareholders, our Controlling Shareholders, (together the ‘‘Covenantors’’) have entered into the Deed of Non-competition in favour of our Company (for itself and as trustee for each of our subsidiaries from time to time).

Each of the Covenantors has undertaken to our Company that each of the Covenantors will not and will procure that neither the Covenantors nor his/her/its close associates (other than members of our Group) will on its own account or with each other or in conjunction with or on behalf of any person, firm or company:

(i) carry on or be engaged in, concerned with or interested in, directly or indirectly, whether as a shareholder (other than being a director or a shareholder of members of our Group or their associated companies), director, employee, partner, agent or otherwise any business that compete or may compete, directly or indirectly or through nominee, joint venture, alliance, cooperation, partnership or otherwise with the business of our Group from time to time (currently being the sales of first-hand yachts of luxury and mid-to-high-end brands) (the ‘‘Restricted Activity’’) in territories in which any member of our Group carries on or is engaged or invests in the Restricted Activity from time to time (the ‘‘Restricted Territories’’), nor provide support in any form to persons other than our Group to engage in business that constitute or may constitute direct or indirect competition with the businesses that our Group is currently and from time to time carrying on in the Restricted Territories unless the prior written consent of our Company has been obtained (based on an affirmative vote of a majority of the independent non- executive Directors, who do not have, and are not deemed to have, a material interest in the relevant matter);

(ii) solicit or procure any of the suppliers and/or the customers of our Group from time to time to terminate their business relationships or otherwise reduce the amount of business with our Group;

(iii) solicit or procure any of our directors, senior management or other employees of our Group from time to time to resign or otherwise cease providing services to our Group;

–216– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

(iv) take any action that may be harmful to the reputation of any member of our Group or which may lead any person to reduce their level of business with any member of our Group; and

(v) make use of any confidential information pertaining to the business of our Group which may have come to his/her/its knowledge in his/her/its capacity as a shareholder of our Company or director of any member of our Group for the purpose of competing with the business of our Group.

Each of the Covenantors has undertaken to our Company that in the event the Covenantors or any of their close associates (other than members of our Group) are given any business opportunity that is or may involve direct or indirect competition with the Restricted Activity in any of the Restricted Territories (the ‘‘Business’’), the Covenantors shall, and shall procure their close associates (other than members of our Group) to, refer the Business Opportunity to our Group and to assist our Group in obtaining such Business Opportunity on terms no less favourable than those offered to the relevant Covenantors or their close associates (the ‘‘First Right of Refusal’’), and that none of the Covenantors and their respective close associates will pursue the Restricted Activity and/or the Business Opportunity until our Company decides not to pursue the Restricted Business and/or the Business Opportunity and provides such decision in writing to the Covenantors. Any decision of our Company in respect of the First Right of Refusal will have to be approved by the independent non-executive Directors taking into consideration, inter alia,our Group’s prevailing business and financial resources.

Both undertakings above do not apply to the following situations:

(i) the holding by the Covenantors and their close associates of interests in shares or other securities that represents (or upon conversion will represent) less than 10% voting rights in any company the shares of which are listed on a recognised stock exchange and which conducts or is engaged in any Restricted Activity; or

(ii) the holding by the Covenantors and their close associates of interests in shares or other securities that represents (or upon conversion will represent) less than 5% voting rights in any non-listed company which conducts or is engaged in any Restricted Activity, provided that the Covenantors and/or their close associates are not entitled to appoint a majority of the directors or management of that company.

The above undertakings are conditional upon our Shares being [REDACTED] and quoted on GEM; and the Covenantors’ obligations under the Deed of Non-competition will remain in effect until:

(i) the date upon which our Shares cease to be [REDACTED] on the Stock Exchange; or

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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

(ii) the date upon which the Covenantors and their close associates, individually or collectively, cease to own 30% or more of the then issued share capital of our Company directly or indirectly, or otherwise cease to be regarded as controlling shareholder(s) under the GEM Listing Rules, whichever occurs first.

Pursuant to the Deed of Non-Competition, each of our Covenantors has severally undertaken:

(i) to provide our Company (including our independent non-executive Directors) with all information necessary for their annual review and the enforcement of all undertakings, representations and warranties contained in the Deed of Non- Competition;

(ii) to make an annual declaration of compliance with such undertakings, representations and warranties for disclosure in our Company’s annual reports; and

(iii) to abstain from voting at any general meeting of our Company if there is any actual or potential conflict of interests.

The declaration and disclosure regarding compliance with and enforcement of the Deed of Non-Competition shall be consistent with the principles of making voluntary disclosures in the Corporate Governance Report of our Company to be issued in accordance with Appendix 15 to the GEM Listing Rules.

Corporate governance measures to manage conflict of interests

We will adopt the following corporate governance measures to manage any potential conflicts of interest arising from any future potential competing business and to safeguard the interests of our Shareholders:

(i) our independent non-executive Directors will review, at least on an annual basis, the compliance with and enforcement of the terms of the Deed of Non- Competition by our Covenantors;

(ii) our Company will disclose decisions with basis on matters reviewed by the independent non-executive Directors relating to non-compliance and enforcement of the Deed of Non-Competition (including why business opportunities referred to it by our Controlling Shareholder(s) were not taken up) either through annual report, or by way of announcement and/or other documents issued or published by our Company as required under the GEM Listing Rules;

(iii) our Controlling Shareholder(s) have undertaken to provide all information necessary to our Company for the annual review by our independent non- executive Directors and the enforcement of the Deed of Non-Competition;

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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

(iv) we will disclose in the corporate governance report of our annual report whether the terms of the Deed of Non-Competition have been complied with and enforced;

(v) inadditiontoeachDirectorbeingawareof his/her fiduciary duties as a Director, which require, among other things, that he/she acts for the benefit of our Company and the Shareholders as a whole and does not allow any conflict of interests between his/her duties as a Director and his/her personal interests, our Articles of Association require each Director to declare to our Board any potential conflict of interest with our Group at Board meetings. Our Articles of Association provide that a Director shall not vote (nor be counted in the quorum) on any resolution of our Board approving any contract or arrangement or other proposal in which he/she or any of his/her close associates is materially interested unless otherwise permitted by the Articles. Our Board (including our independent non-executive Directors) will monitor the potential conflict of interest of Directors and our Directors have to submit confirmations to the Board disclosing details of any interests in competing businesses in any interim or annual reports to be issued by our Company. If potential conflict of interest arises, the interested Director(s) will bring the matter to our independent non- executiveDirectorsandshallabstainfromvotingonsuchproposedresolution;

(vi) our Company has engaged Kingsway Capital Limited as our compliance adviser who shall ensure that our Company is properly guided and advised as to compliance with the GEM Listing Rules and any other applicable laws and regulations; and

(vii) our independent non-executive Directors may engage independent professional advisers in appropriate circumstances at our Company’s costs.

Our Directors consider that the above corporate governance measures are sufficient to manage any potential conflict of interests between our Covenantors and our Group and to protect the interests of our Shareholders, in particular, our minority Shareholders.

ONE-OFF CONNECTED TRANSACTION

In August 2018, our Group entered into an one-off transaction with Mr. Thomas Woo and Mr. Paul Grange that an Azimut luxury motor yacht, being an inventory with carrying amount of HK$9,680,000, was transferred to them for their personal use, for a corresponding increase in amounts due from Directors. Our Directors confirmed that the aforesaid amounts due from Directors had already been settled and we did not have any other transactions of yachts to any connected person of our Company up to the Latest Practicable Date.

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CONNECTED TRANSACTIONS

Following the [REDACTED], the following transactions between our Group and the relevant connected person(s) (as defined in the GEM Listing Rules) will continue, and will constitute continuing connected transactions under the GEM Listing Rules.

FULLY EXEMPT CONTINUING CONNECTED TRANSACTIONS

Pursuant to Chapter 20 of the GEM Listing Rules, the continuing connected transactions of our Group as set out below are exempt from compliance with the requirements of reporting, annual review, announcement and approval by the independent Shareholders under Chapter 20 of the GEM Listing Rules.

Master Service Agreement of 2BY2 Singapore Pte. Ltd.

Halcyon Moment (for itself and as agent for the benefit of its subsidiaries from time to time) (as customer) entered into a master service agreement (the ‘‘Master Service Agreement of 2BY2 Singapore Pte. Ltd.’’) dated [‧] with 2BY2 Singapore Pte. Ltd. (as service provider) for a term of three years commencing from 1 May 2019 and ending on 30 April 2022 (both days inclusive), pursuant to which 2BY2 Singapore Pte. Ltd. agreed to provide certain yacht sales, marketing and licensing services in Singapore to Halcyon Moment and its subsidiaries at cost basis and on terms no less favourable than that offered by Independent Third Parties.

In FY2019, FY2020 and FY2021, our total cost for the aforesaid services from 2BY2 Singapore Pte. Ltd. was approximately S$82,000, S$167,940 and S$67,631 (assuming the exchange rate of S$1.00 to HK$5.67, equivalent to approximately HK$465,000, HK$952,220 and HK$393,547), respectively. Based on our cost for the aforesaid services from 2BY2 Singapore Pte. Ltd. during the Track Record Period, it is expected that the relevant percentage ratios calculated for the aggregate annual transaction amounts under the Master Service Agreement of 2BY2 Singapore Pte. Ltd. in FY2021 and FY2022 will not exceed 5% and the annual consideration will be less than HK$3,000,000.

2BY2 Singapore Pte. Ltd. is a limited company incorporated in Singapore and is owned and controlled by Ms. Karen Kwee and her spouse in equal shares. As such, 2BY2 Singapore Pte. Ltd. is an associate of 2BY2 Yachts Italia and hence a connected person of our Company for the purposes of the GEM Listing Rules and the transactions under the Master Service Agreement of 2BY2 Singapore Pte. Ltd. will constitute exempt continuing connected transactions of our Group after the [REDACTED].

–220– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

SUBSTANTIAL SHAREHOLDERS AND SIGNIFICANT SHAREHOLDERS

Our Substantial Shareholders and Significant Shareholders for the purposes of the GEM Listing Rules are set forth below:

Interests in our Company

Shareholding percentage in our Number of Shares Company immediately immediately following following the Number of Shares Shareholding percentage the conversion of the conversion of the immediately following in our Company [REDACTED] [REDACTED] the conversion of the immediately following the Shareholding Convertible Bonds but Convertible Bonds but [REDACTED] conversion of the percentage in our before the before the Convertible Bonds, the [REDACTED] Number of Shares Company as at the Capitalisation Issue Capitalisation Issue Capitalisation Issue Convertible Bonds, the as at the Latest Latest Practicable and the and the and the Capitalisation Issue and Name Practicable Date Date [REDACTED] [REDACTED] [REDACTED](Note 4) the [REDACTED](Note 4)

Bright Emerald (Note 1) 13 100% 62 86.12% [REDACTED] [REDACTED]% Dragon United (Note 2) —— 56.94%[REDACTED] [REDACTED]% Precious Wave (Note 3) —— 56.94%[REDACTED] [REDACTED]% Mr. Thomas Woo (Note 1) 13 100% 62 86.12% [REDACTED] [REDACTED]% Mr.PaulGrange(Note 1) 13 100% 62 86.12% [REDACTED] [REDACTED]% Mr. Leslie Kong (Note 2) —— 56.94%[REDACTED] [REDACTED]% Mr. Joseph Tong (Note 3) —— 56.94%[REDACTED] [REDACTED]%

Notes:

1. Bright Emerald is owned by Mr. Thomas Woo and Mr. Paul Grange in equal shares. Further, Mr. Thomas Woo and Mr. Paul Grange have confirmed that they are parties acting in concert.

2. Dragon United is wholly-owned by Mr. Leslie Kong.

3. Precious Wave is wholly-owned by Mr. Joseph Tong.

4. Such percentages are calculated without taking into account of any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme. If any new Shares are to be allotted and issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme, such percentages shall be reduced on a pro rata basis.

Interests in our Group member other than our Company

Shareholding percentage in Number the relevant Name Name of Group member of shares Group member

2BY2 Yachts Italia (Note) Marine Italia Singapore 17,500 35% Ms. Karen Kwee (Note) Marine Italia Singapore 17,500 35%

Note: 2BY2 Yachts Italia is wholly-owned by Ms. Karen Kwee.

–221– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

SHARE CAPITAL

SHARE CAPITAL OF OUR COMPANY

The authorised and issued share capital of our Company are as follows:

Number of Shares comprised in the authorised share capital immediately after the Capitalisation Issue and the [REDACTED]:

Authorised share capital: HK$

10,000,000,000 Shares of par value of HK$0.01 each 100,000,000

Assuming the [REDACTED] and any options which may be granted under the Share Option Scheme are not exercised, the share capital of our Company immediately following the completion of the Capitalisation Issue and the [REDACTED] will be as follows:

Shares issued and to be issued, fully paid or credited as fully paid, upon completion of the conversion of the [REDACTED] Convertible Bonds, Capitalisation Issue and the [REDACTED]:

HK$

62 Shares in issue as at the date of this document 0.62 10 Shares to be issued pursuant to the conversion 0.10 of the [REDACTED] Convertible Bonds [REDACTED] Shares to be issued pursuant to the [REDACTED] Capitalisation Issue [REDACTED] Shares to be issued pursuant to the [REDACTED] [REDACTED]

[REDACTED] Shares in total [REDACTED]

ASSUMPTIONS

The above tables assume that the [REDACTED] becomes unconditional and does not take into account any Shares to be allotted and issued pursuant to the exercise of the [REDACTED] or any options to be granted under the Share Option Scheme, or any Shares which may be allotted and issued or repurchased by our Company pursuant to the Issue Mandate and Repurchase Mandate as described below or otherwise.

MINIMUM PUBLIC FLOAT

Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of the [REDACTED] and at all times thereafter, our Company must maintain the minimum prescribed percentage of 25% of the issued share capital of our Company in the hands of the public (as defined in the GEM Listing Rules).

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SHARE CAPITAL

RANKING

The [REDACTED], including our Shares which will be issued pursuant to the exercise of the [REDACTED] or any options to be granted under the Share Option Scheme, will rank pari passu inallrespectswithallotherSharesinissueortobeissuedasmentionedin this document, and in particular, will rank in full for all dividends and other distributions declared, paid or made on our Shares in respect of a record date which falls after the date of this document save for any entitlement under the Capitalisation Issue.

SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme, the principal terms of which are set out in the paragraph headed ‘‘D. Share Option Scheme’’ in Appendix IV to this document.

GENERAL MANDATE TO ISSUE SHARES

(i) 20% of the aggregate number of Shares in issue immediately following the completion of the Capitalisation Issue and the [REDACTED];and

(ii) the aggregate number of Shares repurchased by our Company (if any) pursuant to the Repurchase Mandate.

Our Directors may, in addition to our Shares which they are authorised to issue under this mandate, allot, issue and deal with our Shares pursuant to (a) a rights issue; (b) the exercise of rights of subscription, exchange or conversion under the terms of any warrants or convertible securities issued by our Company or any securities which are exchangeable into Shares; (c) the exercise of the subscription rights under options granted under the Share Option Scheme or any other similar arrangement of our Company from time to time adoptedforthegrantorissuetoofficersand/oremployeesand/orconsultantsand/or advisers of our Company and/or any of its subsidiaries and/or other persons of Shares or rights to acquire Shares; or (d) any scrip dividend or similar arrangement providing for allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Articles of Association.

The Issue Mandate will expire:

— at the conclusion of our Company’s next annual general meeting;

— upon the expiration of the period within which our Company is required by applicable laws or the Articles or the Companies Act to hold its next annual general meeting; or

— when varied or revoked by an ordinary resolution of the Shareholders in general meeting, whichever occurs first.

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SHARE CAPITAL

Please see ‘‘Statutory And General Information — A. Further information about our Group — 3. Written resolutions of the sole Shareholder passed on [‧]’’ for further details of the Issue Mandate.

GENERAL MANDATE TO REPURCHASE SHARES

Conditional on the conditions stated in the section headed ‘‘Structure and conditions of the [REDACTED] — Conditions of the [REDACTED]’’ in this document, our Directors have been granted a general unconditional mandate to exercise all the powers of our Company to repurchase not more than 10% of the total number of Shares in issue immediately following the completion of the Capitalisation Issue and the [REDACTED], exclusive of any Shares which may be issued pursuant to the exercise of the [REDACTED] or any options that may be granted under the Share Option Scheme.

The Repurchase Mandate relates only to repurchases made on GEM and/or on any other stock exchange on which our Shares are [REDACTED] (and which is recognised by the SFC and the Stock Exchange for this purpose), and which are made in accordance with all applicable laws and requirements of the GEM Listing Rules. A summary of the relevant GEM Listing Rules is set out in the paragraph headed ‘‘A. Further information about our Group — 6. Repurchase of our Shares by our Company’’ in Appendix IV to this document.

The Repurchase Mandate will expire:

— at the conclusion of our Company’s next annual general meeting;

— upon the expiration of the period within which our Company is required by applicable laws or the Articles or the Companies Act to hold its next annual general meeting; or

— when varied or revoked by an ordinary resolution of the Shareholders in general meeting, whichever occurs first.

Please see ‘‘Statutory And General Information — A. Further information about our Group — 3. Written resolutions of the sole Shareholder passed on [‧]’’ for further information about the Repurchase Mandate.

CIRCUMSTANCES WHERE GENERAL MEETINGS AND CLASS MEETINGS ARE REQUIRED

Our Company has only a single class of Shares, namely ordinary Shares, with each Share ranking pari passu with the other shares.

The circumstances under which general meeting and class meeting are required are provided in the Articles. See ‘‘Summary of the Constitution of our Company and Cayman Islands Company Law’’ in Appendix III to this document for further details.

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FINANCIAL INFORMATION

You should read the following discussion and analysis in conjunction with the Accountant’s Report of our Group for FY2019, FY2020 and FY2021, including notes thereto, as set forth in Appendix I to this document, all of which have been prepared in accordance with Hong Kong Financial Reporting Standards (‘‘HKFRSs’’). Potential investors should read the whole of the Accountant’s Report as set out in Appendix I to this document and not reply merely on the information contained in this section.

The following discussion and analysis contains forward-looking statements concerning events that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under ‘‘Forward-looking statements’’ ‘‘Risk factors’’ and elsewhere in this document. We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this document, except as required by applicable law.

OVERVIEW

We are a yacht dealership group in Hong Kong principally engaging in the sale of first- hand yachts of luxury and mid-to-high-end brands. We also engage in the sale of second- hand yachts and offer a range of value-added services. During the Track Record Period, substantially all of our yacht sales were made in Hong Kong and we expanded our sales network to Singapore, Taiwan and Shenzhen. We have a balanced portfolio with a wide variety of offerings such as luxury motor yachts, sport boats and inflatable boats to capture a broad scope of customers. We have one sales office in Hong Kong to promote the latest models of yachts to attract potential customers and to facilitate the sale of our yachts. Our customers are primarily individuals with high disposable income located in Hong Kong which are the end users of our products as well as a number of corporations. As a result of our strong operating capabilities and local market knowledge, we have established strong brand reputation and leading market position in Hong Kong. We have appointed a local sub-dealer in Taiwan with local market knowledge and network to strategically expand our customer base in Taiwan. In October 2019, we have also appointed a local sub-dealer in Shenzhen to strategically expand our customer base in Shenzhen. According to the Frost & Sullivan Report, our Group ranked third in terms of the revenue generated for the year ended 30 April 2019 among the yacht dealers in Hong Kong.

During the Track Record Period, our Group recorded revenue of approximately HK$246.7 million, HK$253.6 million and HK$461.2 million for FY2019, FY2020 and FY2021, respectively. For FY2019, revenue of approximately HK$16.4 million was conducted through our Singapore subsidiary, Marine Italia Singapore for the sale of first-hand yachts while for FY2020, revenue in aggregate of approximately HK$42.0 million was conducted through Marine Italia Singapore for the sale of first-hand yachts and service income of approximately HK$41.5 million and HK$0.5 million, respectively. For FY2021, revenue of approximately HK$27.2 million was conducted through Marine Italia Singapore for the sale of a first-hand yacht.

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FINANCIAL INFORMATION

BASIS OF PRESENTATION

Our Company was incorporated in the Cayman Islands under the Companies Act of the Cayman Islands on 16 October 2018. Immediately prior to and after the Reorganisation, the business is jointly held by the Controlling Shareholders and is conducted through the operating subsidiaries. The financial information has been prepared and presented as a continuation of the financial statements of the operating subsidiaries, with the assets and liabilities of our Group recognised and measured at the carrying amounts of the [REDACTED] business under the financial statements of the operating subsidiaries for all periods presented. Intercompany transactions, balances and unrealised gains/losses on transactions between group companies are eliminated on consolidation.

KEY FACTORS AFFECTING OUR OPERATING RESULTS AND FINANCIAL CONDITION

A significant portion of our turnover is derived from the sale of luxury motor yachts of our two major brands, Absolute and Azimut, and any weakening of such brands or our relationships with such brands could affect our operations and financial results

A significant portion of our turnover is derived from the sale of luxury motor yachts of Absolute and Azimut. For FY2019, FY2020 and FY2021, sale of first-hand Absolute luxury motor yachts contributed towards approximately 19.2%, 12.9% and 13.0%, respectively, of our turnover while sales of first-hand Azimut luxury motor yachts contributed towards approximately 73.5%, 77.1% and 70.5%, respectively, of our turnover. The loss of or diminishment of any such brand could have a material adverse effect on our business, financial condition, results of operation and growth prospects.

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FINANCIAL INFORMATION attractive to consumers leading to decreased sales. In such event, our business, financial condition, results of operation and growth prospects would be materially and adversely affected.

We may not be able to obtain necessary financing on commercially reasonable terms, or at all

Our business is capital intensive. We need to purchase demonstration yachts, spare parts and other accessory products from manufacturers and construction of new sales offices require significant capital. According to the Frost & Sullivan Report, it is common for yacht dealers to purchase demonstration yachts to push sales especially when entering into a new market with no existing customers or introducing new product lines. Based on the past experience and negotiations with banks and financial institutions in Hong Kong, our Group is unable to obtain secured borrowings collateralised by our yachts for sales unless they have physically arrived in Hong Kong. As such, our demonstration yacht purchases are in generally financed internally from operating funds. During the Track Record Period, we had experienced cashflow mismatch in purchasing demonstration yachts from time to time where our operating funds were insufficient to complete the purchase of demonstration yachts, and therefore our Directors had to source other financing methods.

During FY2019, our Group entered into agreements with Independent Third Parties, which Lender A and Lender B agreed to arrange financing in the amount of HK$10.3 million and HK$8.6 million for the acquisitions of certain demonstration yachts for a period ranged from 2 to 6 months with effective interest rates ranging from approximately 5.5% to 18.0% per annum. The amount of HK$10.3 million and HK$8.6 million have been fully repaid in FY2019. For the higher end of the interest rate range on the financing from Independent Third Parties, it was mainly attributable to a borrowing with principal amount of approximately HK$4.3 million from Lender A, which had a higher interest rate of 18% per annum. The higher interest rate was mainly attributable to the nature of the loan, which was unsecured and with relatively short maturity term of approximately two months.

As at 30 April 2020, our Group had unsecured bank borrowings of approximately HK$6.6 million, comprising loan balances of HK$3.6 million, HK$1.8 million and HK$1.2 million, namely Bank Loan A, Bank Loan B and Bank Loan C, with effective interest rates of approximately 4.0%, 11.2% and 4.0% per annum for a period range of 2 and 3 years, respectively, for facilitating our general working capital needs. As at 30 April 2021, our Group had unsecured bank borrowings of approximately HK$2.3 million, comprising Bank Loan A, Bank Loan B and Bank Loan C of approximately HK$0.5 million, HK$1.2 million and HK$0.6 million, respectively.

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FINANCIAL INFORMATION repurchase of the aforesaid yachts from the supplier at the same considerations on or before 31 July 2020 and 31 December 2020, respectively (collectively, the ‘‘Sale and Buyback Transactions’’). The Directors considered the Sale and Buyback Transactions as other borrowings of EUR3.3 million (equivalent to approximately HK$28.2 million) secured by the aforementioned three yachts included in the Group’s inventories with carrying amount of approximately HK$23.9 million and are interest-free. During FY2021, such balances were fully repaid.

As at 30 April 2020, our Group had secured other borrowings of HK$5.0 million from an Independent Third Party. During FY2020, our Group entered into an agreement with an Independent Third Party for (i) sale of a second-hand yacht at a consideration of HK$5.0 million; and (ii) leaseback of the aforesaid yacht at a fixed monthly rental amount, which our Group has the option to purchase the yacht at the same consideration on or before 24 March 2021 (the ‘‘Sale and Leaseback Transaction’’).TheSaleandLeasebackTransaction bears service charge rate of 7.0% per annum with term of one year. The Directors considered the Sale and Leaseback Transaction as other borrowings of HK$5.0 million secured by the aforementioned yacht included in our Group’s inventories with carrying amount of approximately HK$7.5 million and with effective interest rate of 7.0% per annum, which the borrowing is repayable on 24 March 2021.

During FY2021, our Group entered into an agreement with an Independent Third Party for (i) sale of a second-hand yacht at a consideration of HK$10.0 million; and (ii) leaseback of the aforesaid yacht at a fixed monthly rental, which our Group has the option to purchase the yacht at the same consideration on or before 16 June 2021 (the ‘‘Sale and Leaseback Transaction 2’’) (the Sale and Leaseback Transaction and the Sale and Leaseback Transaction 2, collectively, the ‘‘Sale and Leaseback Transactions’’). The Sale and Leaseback Transaction 2 bears service charge rate of 7.0% per annum with term of one year. The Directors considered the Sale and Leaseback Transaction 2 as other borrowings of HK$10.0 million secured by the aforementioned yacht included in our Group’s inventories with carrying amount of approximately HK$15.0 million with effective interest rate of 7.0% per annum, which the borrowing is repayable on 16 June 2021. During FY2021, such balance was fully repaid.

The Sales and Leaseback Transactions was guaranteed by joint personal guarantee provided by Mr. Woo and Mr. Grange, which the guarantee will be released upon [REDACTED].

For the aforementioned Sales and Buyback Transactions and Sales and Leaseback Transactions, according to the Frost & Sullivan Report, it is not uncommon for the arrangements of sales and buyback/leaseback transaction. According to the information available from the public domain, similar arrangements for borrowings secured by the borrower’s assets were entered into between (i) companies principally engaged in operating cruise travel and providing civil aviation services for the purchase of assets which required capital intensive investment such as cruise ships/aircraft; and (ii) financial leasing companies such as aviation leasing companies, provides various financial leasing services for facilitating the general working capital needs of companies in aviation industry.

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FINANCIAL INFORMATION

For further details, please refer to the paragraph headed ‘‘Borrowings’’ under this section and Note 24 to the Accountant’s Report set out in Appendix I to this document.

Our finance costs were approximately HK$0.6 million, HK$0.8 million and HK$1.6 million for FY2019, FY2020 and FY2021, respectively. Our ability to obtain financing from commercial banks and other financiers on commercially reasonable terms depends on our historical performance and financial condition, as well as a number of factors that are beyond our control, such as macro-economic conditions, availability of capital liquidity, the interest rate environment and relevant government rules and regulations. If we are unable to obtain necessary financing at commercially reasonable terms or at all, our expansion and/or operations may be disrupted which will in turn adversely affect our results of operations and financial condition.

We are exposed to foreign currency exchange fluctuations

We incur our costs of purchases in Euro while we receive our revenue in Euro and Hong Kong dollars. As we occasionally purchase demonstration yacht from our yacht manufacturers before securing orders from our customers, there is a time difference between our purchase costs incurred and our revenue recognised. For FY2019, FY2020 and FY2021, we recorded net foreign exchange loss of approximately HK$1.1 million, HK$3,000 and HK$2.3 million, respectively. Accordingly, fluctuations in foreign currency exchange rates can increase or decrease our profit margin and affects the results of our operations.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGEMENTS

The financial information has been prepared in accordance with Hong Kong Financial Reporting Standards (‘‘HKFRSs’’) which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (‘‘HKASs’’) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’) and the accounting principles generally accepted in Hong Kong. The financial information has been prepared on the historical cost basis.

All new standards, amendments to standards and interpretations which are mandatory for the financial year beginning on or before 1 May 2019 are consistently applied to our Group for the Track Record Period except for HKFRS 16 ‘‘Leases’’ which has been initially applied on 1 May 2019. Please refer to Note 2.2 to the Accountant’s Report as set out in Appendix I to this document. We consider that the adoption of HKFRS 9 and HKFRS 15 has no significant impact on the Group’s financial position and performance compared to that of HKAS 39 and HKAS 18. The application of HKFRS 16 compared to that of HKAS 17 has no significant impact on our Group’s financial performance and the impact on our

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FINANCIAL INFORMATION

Group’s financial position is set out in Note 2.2 to the Accountant’s report as set out in Appendix I of this Document. It should be noted that accounting estimates and assumptions are used in preparation of the financial information. Although these estimates are based on the management’s best knowledge and judgment of current events and actions, actual results may ultimately differ from those estimates. For further details regarding significant accounting policies, assumptions, estimates and judgements, please refer to Notes 2 and 3 to the Accountant’s Report as set out in Appendix I to this document.

Below are certain accounting policies, estimates and judgements that are important to the presentation of the financial statements.

Revenue recognition

Revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which our Group expects to be entitled in exchange for those goods or services. Revenue is recognised as below:

Sale of goods

Revenuefromsaleofyachtsincludethesaleofyachtsandthespecifiedservice provided by our Group to the customer for which the customer has contracted. Revenue is recognised when the customer takes possession of and accepts the goods. For sale of related components, revenue is recognised when control of the goods has transferred, being when the goods have been delivered to the customer.

Service income

Our Group provides yacht delivery arrangement, yacht repair and maintenance services and introductory services. Revenue from yacht delivery arrangement, repair and maintenance services and introductory services is recognised when the services are rendered.

Commission income

Our Group provides sales referral services. Commission income from sales referral services is recognised when the service are rendered.

Allowance for inventories

Net realisable value of inventories is the actual or estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. These estimates are based on current market condition, physical condition of the yachts and historical experience of selling products of similar nature. It could change significantly as a result of competitor actions in response to changes in market condition. Management reassesses these estimations at the end of each reporting period.

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FINANCIAL INFORMATION

Provision for impairment of trade receivables

Our Group determines the provision for impairment of trade receivables based on assumption about risk of default and expected loss rates. This estimate is based on the credit history of the customers, the current market condition and forward looking elements. Management reassesses the adequacy of provision on a regular basis by reviewing the individual account based on past credit history and any prior knowledge of debtor insolvency or other credit risk which might not be easily accessible public information and market volatility might bear a significant impact which might not be easily ascertained.

CONSOLIDATED RESULTS OF OPERATIONS

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Revenue 246,710 253,575 461,237 Cost of sales (212,563) (214,602) (403,264)

Gross profit 34,147 38,973 57,973 Other income 280 810 2,262 Other net (loss)/gain (1,078) 397 2,168 Selling and marketing expenses (3,538) (6,096) (3,763) Administrative expenses (18,329) (19,228) (21,630) [REDACTED] [REDACTED] [REDACTED] [REDACTED] Finance costs (614) (817) (1,591)

Profit before income tax 522 7,640 32,909 Income tax expense (1,725) (2,407) (5,632)

(Loss)/Profit for the year (1,203) 5,233 27,277

Other comprehensive (loss)/income Items that may be subsequently reclassified to profit or loss Exchange differences on translation of financial statements of overseas subsidiaries (5) 80 (111)

Total comprehensive (loss)/income for the year (1,208) 5,313 27,166

(Loss)/Profit for the year attributable to: Owners of the Company (747) 5,520 27,345 Non-controlling interests (456) (287) (68)

(1,203) 5,233 27,277

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FINANCIAL INFORMATION

DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Revenue

During the Track Record Period, our total revenue was generated from (i) sale of yachts and related components; and (ii) service income, mainly provision of yacht repair and maintenance services. Our Group’s total revenue was approximately HK$246.7 million, HK$253.6 million and HK$461.2 million for FY2019, FY2020 and FY2021, respectively. For FY2019, revenue of approximately HK$16.4 million was conducted through our Singapore subsidiary, Marine Italia Singapore for the sale of first-hand yachts while for FY2020, revenue in aggregate of approximately HK$42.0 million was conducted through Marine Italia Singapore for the sale of first-hand yachts and service income of approximately HK$41.5 million and HK$0.5 million, respectively. For FY2021, revenue of approximately HK$27.2 million was conducted through Marine Italia Singapore for the sale of a first-hand yacht.

For FY2020, our overall revenue increased by approximately HK$6.9 million or 2.8% from approximately HK$246.7 million for FY2019 to approximately HK$253.6 million for FY2020. The overall increase was mainly driven by the increase in sales from second-hand yachts from approximately HK$4.0 million to approximately HK$9.9 million and increase in service income of approximately HK$3.1 million from approximately HK$9.1 million for FY2019 to HK$12.2 million for FY2020. Such increase was mainly due to increase in sales volume of sale of second-hand yachts during FY2020 and higher service income generated for the provision of maintenance services to a super yacht that we have sold in FY2019 and increase in number of sizable yacht that we have provided anti-fouling services in FY2020 as compared to FY2019. For FY2021, our revenue increased by approximately HK$207.7 million or 81.9% from approximately HK$253.6 million for FY2020 to approximately HK$461.2 million for FY2021. Such increase was mainly due to the increasing sales volume of first-hand yachts and second-hand yachts during the period from 10 for FY2020 to 18 for FY2021 and from 3 for FY2020 to 8 for FY2021 for first-hand yachts and second-hand yachts, respectively.

The following table sets forth the breakdown of our sales volume and revenue during the Track Record Period:

Year ended 30 April 2019 2020 2021 Sales %oftotal Sales %oftotal Sales %oftotal volume revenue volume revenue volume revenue (Number of (Number of (Number of yacht) HK$’000 % yacht) HK$’000 % yacht) HK$’000 % Sale of yachts and related components — Sale of first-hand yachts 13(Note) 228,667 92.7 10 228,081 89.9 18 385,101 83.5 — Sale of second-hand yachts 1 4,026 1.6 3 9,868 3.9 8 49,089 10.6 — Sale of related components N/A 4,896 2.0 N/A 3,439 1.4 N/A 6,380 1.4

237,589 96.3 241,388 95.2 440,570 95.5

Service income 9,121 3.7 12,187 4.8 20,667 4.5

Total: 246,710 100.0 253,575 100.0 461,237 100.0

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FINANCIAL INFORMATION

Note: It includes a sale of a yacht in equal share to an Independent Third Party in the form of co- ownership. In July 2018, the Group entered into a sales contract with an Independent Third Party to sell a first-hand yacht, namely Absolute 58 Fly with 50% ownership at a consideration of HK$6.0 million. The business rationale for establishing such arrangement was because the Group intended to use the yacht as a demonstration yacht for corporate marketing activities while the Independent Third Party could also enjoy the usage of the yacht with relatively lower cost.

Under the co-ownership arrangement, each of the Group and the Independent Third Party owns 50% ownership of the yacht while the expenses such as registration and licensing fee, regulatory inspection fee and insurance fee shall be borne by each party in equal share and the usage expenses such as fuel cost shall be borne by the party who incurs the cost.

The delivery was taken place in October 2018 and the carrying amount of the co-owned yacht under ‘‘motor vehicles, boats and yachts’’ of the Group’s property, plant and equipment was approximately HK$3.9 million and HK$2.3 million as at 30 April 2019 and 2020, respectively. During FY2021, the co-owned yacht was disposed to an independent third party. For further details, please refer to Note 14 to the Accountant’s Report set out in Appendix I to this document.

For FY2019, FY2020 and FY2021, majority of our total revenue generated from sale of yachts and related components, which accounted for approximately 96.3%, 95.2% and 95.5% of our total revenue, respectively. Our remaining revenue was solely attributable to service income, which accounted for approximately 3.7%, 4.8% and 4.5% for FY2019, FY2020 and FY2021 of our total revenue, respectively.

(i) Sale of yachts and related components

For FY2019, FY2020 and FY2021, our revenue from the sale of yachts and related components consisted of (i) sale of first-hand yachts; (ii) sale of second-hand yachts; and (iii) sale of related components, amounted to approximately HK$237.6 million, HK$241.4 million and HK$440.6 million, respectively, or approximately 96.3%, 95.2% and 95.5% of our total revenue for the respective year.

Sale of first-hand yachts

For FY2019, FY2020 and FY2021, our revenue from sale of first-hand yachts was approximately HK$228.7 million, HK$228.1 million and HK$385.1 million, respectively; whilst the number of first-hand yachts we sold was 13, 10 and 18, respectively. Revenue from sale of first-hand yachts were relatively stable as compared to FY2019 which was mainly due to the net impact of (i) decrease in sales volume of first-hand yachts during FY2020; and (ii) the increase in average selling price of the sale of first-hand yachts, which was mainly attributable to the sales of four super yachts, which contributed an aggregate of revenue of approximately HK$169.8 million for FY2020. Revenue from sale of first-hand yachts for FY2021 increased significantly from approximately HK$228.1 million for FY2020 to approximately HK$385.1 million, representing an increase of approximately 68.8%. Such increase was mainly due to the increase of sales volume of first-hand yachts from 10 for FY2020 to 18 for FY2021.

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FINANCIAL INFORMATION

Sale of second-hand yachts

For FY2019, FY2020 and FY2021, our revenue from sale of second-hand yachts was approximately HK$4.0 million, HK$9.9 million and HK$49.1 million, respectively, whilst the number of second-hand yachts we sold was 1, 3 and 8, respectively. The increase in revenue for FY2020 as compared to that of FY2019 was mainly due to increase in sales volume of second-hand yachts we sold from 1 to 3. The increase in revenue for FY2021 as compared to that of FY2020 was mainly due to increase in sales volume of second-hand yachts we sold from 3 for FY2020 to 8 for FY2021.

Sale of related components

For FY2019, FY2020 and FY2021, the sale of related components mainly consisted of spare parts and accessories. Our revenue from sale of related components was approximately HK$4.9 million, HK$3.4 million and HK$6.4 million for FY2019, FY2020 and FY2021, respectively. Our revenue from sale of related components was comparatively higher for FY2019, which is mainly in related to the sale of Four Winns sport boats amounted to HK$2.8 million for FY2019, since we became the authorised dealer of Four Winns in July 2018. The revenue from sale of related components decreased by approximately HK$1.5 million from approximately HK$4.9 million for FY2019 to approximately HK$3.4 million for FY2020. Such decrease was mainly attributable to decrease in number of Four Winns Sport Boat we sold from 3 to nil. Our revenue from sale of related components increased by approximately 85.5% from approximately HK$3.4 million for FY2020 to approximately HK$6.4 million for FY2021. Such increase was mainly due to increase in sales volume of sports boat sold from nil for FY2020 to 5 for FY2021.

(ii) Service income

For FY2019, FY2020 and FY2021, our revenue from service income amounted to approximately HK$9.1 million, HK$12.2 million and HK$20.7 million, respectively, representing approximately 3.7%, 4.8% and 4.5% of the total revenue for the respective year. Our revenue from service income increased by approximately HK$3.1 million from approximately HK$9.1 million for FY2019 to approximately HK$12.2 million for FY2020, representing a growth of approximately 33.6%. Such increase was mainly attributable to the higher service income generated for the provision of services to a super yacht during FY2020 that we have sold in FY2019 and increase in number of yacht that we have provided anti-fouling services in FY2020 as compare to FY2019. The increasing trend of service income was mainly due to new and repeated customers who purchased yachts from us returned to us for repair and maintenance services. Our revenue from service income increased by approximately 69.6% from approximately HK$12.2 million for FY2020 to approximately HK$20.7 million for FY2021. Such increase was mainly due to finder’s fee of approximately HK$3.1 million that our Group received from our supplier for introductory services provided for the sale of one first-hand yacht during FY2021 and increase in service income generated for the year as a result of increase in sales volume of yachts we sold during the year. During FY2021, upon request of the customer and to facilitate the

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FINANCIAL INFORMATION customer’s arrangement of letter of credit in relation to the purchase of the yacht, sales and purchase contract of the aforementioned yacht was entered into between our Group, the customer and our supplier, whereas our supplierwasthesellerandtheGroupwasthe authorised service provider for the transaction. Pursuant to the finder’s fee agreement, our supplier engaged our Group to explore existing opportunities for the sale of the yacht to the customer. As confirmed by our Directors, the fee was negotiated between our Directors and our supplier based on the price spread between our Group’s general selling price and inventory cost estimated to incur of our Group for distributing of similar class of yacht during the Track Record Period.

Save for the sales and purchase contract being entered into between our Group, the customer and our supplier, our Group was responsible for providing ancillary services such as follow-up on minor defects and maintenance service when the yacht arrived Hong Kong, issued a warranty certificate, which was signed by the customer, upon the delivery and acceptance of the yacht by the customer and assisted our customer in applying for relevant license for the new yacht.

Cost of sales

During the Track Record Period, our cost of sales primarily consisted of cost of yachts from Italy manufacturers and related components and cost of services, which mainly comprised of cost of materials and labour. The total cost of sales for FY2019, FY2020 and FY2021, was approximately HK$212.6 million, HK$214.6 million and HK$403.3 million, respectively. The following table sets forth the breakdown of our cost of sales during the Track Record Period:

Year ended 30 April 2019 2020 2021 % of total % of total % of total Sales cost of Sales cost of Sales cost of volume sales volume sales volume sales (Number (Number (Number of yacht) HK$’000 % of yacht) HK$’000 % of yacht) HK$’000 %

Cost of sales relating to: Sale of yachts and related components — Sale of first-hand yachts 13(Note) 198,191 93.2 10 194,621 90.7 18 339,260 84.1 — Sale of second-hand yachts 1 3,522 1.7 3 9,250 4.3 8 48,240 12.0 — Sale of related components N/A 4,665 2.2 N/A 3,099 1.4 N/A 3,803 0.9

206,378 97.1 206,970 96.4 391,303 97.0

Service income 6,185 2.9 7,632 3.6 11,961 3.0

Total: 212,563 100.0 214,602 100.0 403,264 100.0

Note: It includes a sale of a yacht in equal share to an Independent Third Party in the form of co- ownership. Please refer to the sub-section headed ‘‘Revenue’’ in ‘‘Financial Information’’ to this document for details.

For FY2019, FY2020 and FY2021, majority of costs of sales consisted of cost of first- hand and second-hand yachts which amounted for approximately HK$201.7 million, HK$203.9 million and HK$387.5 million, respectively or approximately 94.9%, 95.0% and 96.1%, of the total cost of sales.

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FINANCIAL INFORMATION

The cost of sales for FY2020 was approximately HK$214.6 million, which was relatively stable as compared to approximately HK$212.6 million for FY2019.

The cost of sales for FY2021 increased by approximately HK$188.7 million from approximately HK$214.6 million for FY2020 to approximately HK$403.3 million for FY2021. Such increase was mainly due to the increase number of first and second-hand yachts we sold from 13 for FY2020 to 26 for FY2021.

Gross profit and gross profit margin

During the Track Record Period, gross profit and gross profit margin by sources of revenue of our Group are summarised below:

Year ended 30 April 2019 2020 2021 Gross Gross Gross Sales Gross profit Sales Gross profit Sales Gross profit volume profit margin volume profit margin volume profit margin (Number (Number (Number of yacht) HK$’000 % of yacht) HK$’000 % of yacht) HK$’000 %

Sale of yachts and related components — Sale of first-hand yachts 13(Note) 30,476 13.3 10 33,460 14.7 18 45,841 11.9 — Sale of second-hand yachts 1 504 12.5 3 618 6.3 8 849 1.7 — Sale of related components N/A 231 4.7 N/A 340 9.9 N/A 2,577 40.4

31,211 13.1 34,418 14.3 49,267 11.2

Service income 2,936 32.2 4,555 37.4 8,706 42.1

Total: 34,147 13.8 38,973 15.4 57,973 12.6

Gross profit is calculated based on our revenue for the year minus cost of sales for the relevant year. Gross profit margin is calculated based on the gross profit for the year divided by our revenue for the relevant year and multiplied by 100%.

Our overall gross profit margin for FY2020 improved to approximately 15.4%, which was mainly driven by increase in gross profit margin for the sale of first-hand yachts. The increase in our gross profit margin for sale of first-hand yachts for FY2020 as compared to that of FY2019 was primarily due to (i) the relatively low profit margin for the sale of a super yacht sold in FY2019, which accounted for approximately HK$79.6 million or 32.3% of our revenue from sale of first-hand yachts during FY2019. Such super yacht was sold at a relatively lower gross profit margin since our Group aimed to become a pioneer in the larger sized yacht market by establishing itself as thefirsttocompletethesaleofoneofthelargest Azimut yachts in Hong Kong (with an overall length exceeding 100 ft), deepen our market

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FINANCIAL INFORMATION presence and after taken into account the contract sum of the yacht, and to attract and introduce potential customers into the larger sized yacht market; and (ii) the sale of a super yacht with relatively high gross profit margin, which accounted for approximately HK$62.3 million or 27.3% of our revenue from sale of first-hand yachts during FY2020. Such super yacht was sold at a relatively higher gross profit margin since the customer requested more customised modification to the yacht which require more sophisticated work from our Group and we were able to charge for a higher margin.

Our overall gross profit margin for FY2021 decreased from approximately 15.4% for FY2020 to approximately 12.6% for FY2021. Such decrease was driven by the combined effect of (i) decrease in gross profit margin for sale of first-hand yachts; and (ii) the relatively low gross profit margin for the sale of second-hand yachts for FY2021. The gross profit margin for sale of first-hand yachts slightly decreased from approximately 14.7% for FY2020 to approximately 11.9% for FY2021. Such decrease was mainly due to the sale of a first-hand yacht with relatively lower gross profit margin for FY2021, with revenue contribution of approximately HK$91.0 million, or approximately 23.6% of our revenue from sale of first-hand yachts during FY2021, our Directors charged a relatively lower mark-up for the yacht so as to promote the new flagship of Azimut, which the contract sum was relatively large (i.e. over HK$90 million). The relatively low gross profit margin for the sale of second-hand yachts for FY2021 was mainly attributable to the sale of two second hand yachts with relatively lower gross profit margin with revenue contribution of approximately HK$16.9 million, or approximately 34.3% of our revenue from the sale of second-hand yachts during the year, which our Group was approached by customers for sourcing two second-hand yachts with designated models available in the market. Having considered our Group would retain such yachts as inventory for a relatively short period of time as compared to other trade-in second-hand yachts given there were already existing customers and suppliers in the market available to our Group, our Directors have offered a more competitive price so as to complete such transactions in a shorter time frame.

As for service income, it generally entails higher gross profit margin as compared to that of the sale of yachts and related components, primarily because manpower and technical skills are required for repair and maintenance of yachts and thus our Group was able to charge a higher margin.

(i) Sale of yachts and related components

Sale of first-hand yachts

Our gross profit margin for sale of first-hand yachts was approximately 13.3%, 14.7% and 11.9%, for FY2019, FY2020 and FY2021, respectively.

During FY2019, with an aim to allow the Group to be a pioneer in the larger sized yacht market by establishing itself as the first to complete the sale of one of the largest Azimut yacht in Hong Kong (with an overall length exceeding 100 ft), deepen our market presence and after taken into account the contract sum of the yacht, the Group has charged a relatively lower margin for the sale of Azimut 32M so as to attract and introduce potential customers into the larger sized yacht market.

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FINANCIAL INFORMATION

During FY2020, the gross profit margin for sale of first-hand yachts increased from approximately 13.3% for FY2019 to 14.7% for FY2020. The improvement in gross profit margin was mainly due to the sale of a super yacht which more sophisticated work was required for the customised modification as requested by the customer.

Gross profit margin for sale of first-hand yachts decreased from approximately 14.7% for FY2020 to approximately 11.9% for FY2021. The relatively low gross profit margin for FY2021 was mainly attributable to the sale of a super yacht with relatively low gross profit margin during FY2021, which accounted for revenue contribution of approximately HK$91.0 million, or approximately 23.6% of our revenue from sale of first-hand yachts during FY2021, our Directors charged a relatively lower mark-up for the yacht so as to promote the new flagship of Azimut, which the contract sum was relatively large (i.e. over HK$90 million).

Sale of second-hand yachts

Our gross profit margin for the sale of second-hand yachts was approximately 12.5%, 6.3% and 1.7% for FY2019, FY2020 and FY2021, respectively. The decrease in our gross profit margin from sale of second-hand yachts for FY2020 as compared to FY2019 was primarily due to a yacht being offered to a customer with relatively low selling price since the Directors considered in to be less popular having taking into account the latest physical condition of the yacht, such yacht accounted for HK$3.5 million or 35.5% of total sale of second-hand yachts for FY2020. The relatively low gross profit margin for the sale of second-hand yachts for FY2021 was mainly attributable to the sale of two second hand yachts with relatively lower gross profit margin with revenue contribution of approximately HK$16.9 million, or approximately 34.3% of our revenue from the sale of second-hand yachts during FY2021, which our Group was approached by customers for sourcing two second- hand yachts with designated models available in the market. Having considered our Group would retain such yachts as inventory for a relatively short period of time as compared to other trade-in second-hand yachts given there were already existing customers and suppliers in the market available to our Group, our Directors have offered a more competitive price so as to complete such transactions in a shorter time frame.

Sale of related components

Our gross profit margin for the sale of related components was approximately 4.7%, 9.9% and 40.4%, for FY2019, FY2020 and FY2021, respectively. The increase in gross profit margin for FY2020 as compared to FY2019 was mainly due to increase in sales of spare parts and accessories with relatively high gross profit margin during the year. Our gross profit margin for the sale of related components increased from approximately 9.9% for FY2020 to approximately 40.4% for FY2021. The relatively high gross profit margin for FY2021 was mainly attributable to the increase in sales volume of the sale of sports boat from nil for FY2020 to 5 for FY2021 which have relatively higher gross profit margin.

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FINANCIAL INFORMATION

(ii) Service income

Our gross profit margin for service income was approximately 32.2%, 37.4% and 42.1%, for FY2019, FY2020 and FY2021, respectively. Our Group could charge relatively higher gross margin by providing full professional yacht maintenance services which are tailored for the customers. The relatively higher gross profit margin for FY2020 was mainly due to the tasks involved in providing the maintenance services were relatively more sophisticated for certain sizable yachts during the year. Our gross profit margin for service income increased from approximately 37.4% for FY2020 to approximately 42.1% for FY2021, such increase was mainly contributed by the finder’s fee for introductory services provided to Azimut for a super yacht that our Group was able to charge with a higher gross profit margin.

Other income

The other income mainly related to the sale of souvenir and demonstration models and credit note received from our suppliers amounted to approximately HK$0.3 million, HK$0.8 million and HK$2.3 million for FY2019, FY2020 and FY2021, respectively. The increase in other income for FY2020 was mainly due to more income was generated in relation to the sale of souvenir and demonstration models and credit note received from our suppliers. Our other income increased from approximately HK$0.8 million for FY2020 to approximately HK$2.3 million for FY2021. Such increased was mainly due to government grants received under Anti-Epidemic Fund to retain employment and combat COVID-19 during FY2021.

Other net loss/gain

The other net loss/gain consisted of (i) net foreign exchange loss; (ii) loss/gain on disposal of property, plant and equipment; and (iii) gain on disposal of intangible assets and amounted to net loss of approximately HK$1.1 million, net gain of approximately HK$0.4 million and net gain of approximately HK$2.2 million for FY2019, FY2020 and FY2021, respectively. Our Group experienced net foreign exchange loss for FY2019, FY2020 and FY2021, was mainly due to the decreasing trend of exchange rate of translations of Euros into Hong Kong dollars from average exchange rate of EUR1.00 to HK$9.0 in FY2019 to the average exchange rate of EUR1.00 to HK$8.6 in FY2020. For FY2020, our Group also recorded gain on disposal of intangible assets of approximately HK$0.4 million, which was arising from disposal of private mooring during FY2020. For FY2021, our Group recorded other net gain of approximately HK$2.2 million, which was mainly due to (i) gain on disposal of property, plant and equipment of approximately HK$4.3 million as a result of the disposal of the co-owned yacht which was classified as our Group’s property, plant and equipment — motor vehicles, boats and yachts’ during FY2021, for further details, please refer to Note 14 to the Accountant’s Report set out in Appendix I to this document; and (ii) net foreign exchange losses of approximately HK$2.3 million as a result of the settlement of other borrowings which were dominated in EUR dollors whereas EUR dollars appreciated against Hong Kong dollars during FY2021.

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FINANCIAL INFORMATION

Selling and marketing expenses

The following table sets out the selling and marketing expenses by nature during the Track Record Period:

Year ended 30 April 2019 2020 2021 % of total % of total % of total selling and selling and selling and marketing marketing marketing expenses expenses expenses HK$’000 % HK$’000 % HK$’000 %

Commission expenses 333 9.4 2,752 45.1 910 24.2 Marketing expenses 2,605 73.6 2,399 39.4 1,911 50.8 Staff costs 435 12.3 627 10.3 606 16.1 Rental expenses 165 4.7 — — — — Depreciation of property, plant and equipment — right-of-use assets — — 318 5.2 336 8.9

Total 3,538 100.0 6,096 100.0 3,763 100.0

The selling and marketing expenses consisted of (i) commission expenses, being the referral fees paid upon completion of referred sales; (ii) marketing expenses; (iii) staff costs; (iv) rental expenses; and (v) depreciation of property, plant and equipment for FY2019, FY2020 and FY2021, and amounted to approximately HK$3.5 million, HK$6.1 million and HK$3.8 million, respectively. The selling and marketing expenses increased from approximately HK$3.5 million for FY2019 to HK$6.1 million for FY2020, which was mainly attributable to the increase in commission expenses during FY2020 which was mainly attributable to increase in number of referred sales for FY2020. Our overall selling and marketing expenses for FY2021 decreased by approximately 38.3% from approximately HK$6.1 million for FY2020 to HK$3.8 million for FY2021, which was mainly due to decrease in marketing expenses and commission expenses incurred for FY2021 as a result of the outbreak of COVID-19 that our Group was not able to attend sizeable boat shows and less sales referral during FY2021.

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FINANCIAL INFORMATION

Administrative expenses

The following table sets out the administrative expenses by nature during the Track Record Period:

Year ended 30 April 2019 2020 2021 % of total % of total % of total administrative administrative administrative expenses expenses expenses HK$’000 % HK$’000 % HK$’000 %

Staff costs 5,753 31.4 6,760 35.2 8,015 37.1 Boating expenses 4,123 22.5 4,248 22.1 6,723 31.1 Independent contractor fees 1,200 6.5 — — — — Depreciation of property, plant and equipment — owned assets 1,519 8.3 2,401 12.5 1,751 8.1 Depreciation of property, plant and equipment — right-of-use assets — — 1,086 5.6 1,308 6.0 Legal and professional expenses 3,950 21.6 1,044 5.4 275 1.3 Other expenses 1,784 9.7 3,689 19.2 3,558 16.4

Total 18,329 100.0 19,228 100.0 21,630 100.0

The administrative expenses mainly consisted of staff costs, boating expenses, contractor fees, depreciation, legal and professional fees and other expenses and amounted to approximately HK$18.3 million, HK$19.2 million and HK$21.6 million, for FY2019, FY2020 and FY2021, respectively.

Staff costs

Our staff costs mainly represented salaries and allowances for our Directors and administrative and general staff and other staff benefits. Staff costs represented the largest component of our administrative expenses for FY2019, FY2020 and FY2021. During FY2019, FY2020 and FY2021, we recorded staff costs of approximately HK$5.8 million, HK$6.8 million and HK$8.0 million, respectively. The increasing trend of staff costs during the Track Record Period was mainly due to increase in average salary and average headcount of our administrative staff compared to that of FY2020.

Boating expenses

Our boating expenses mainly consisted of mooring fees and fuel cost. During FY2019, FY2020 and FY2021, we recorded boating expenses of approximately HK$4.1 million, HK$4.2 million and HK$6.7 million, respectively. The boating expenses remained relatively stable between FY2019 and FY2020.

Our boating expenses increased from approximately HK$4.2 million for FY2020 to approximately HK$6.7 million for FY2021, such increase was mainly due to the yachts we sold and retained in the inventories were relatively larger in size for FY2021 as compared to that for FY2020 and thus, required higher mooring fees and fuel cost.

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FINANCIAL INFORMATION

Independent contractor fees

Independent contractor fees primarily represented the service fee for usage, maintenance and repair of equipment and service center premises. During FY2019, FY2020 and FY2021, we recorded independent contractor fees of approximately HK$1.2 million, nil and nil, respectively. Under HKFRS 16, such fees had been classified under depreciation of property, plant and equipment — right-of-use assets during FY2020 and FY2021. Taking into account the depreciation, such fees remained relatively stable as compared to that for the corresponding period last year.

Depreciation

Depreciation of property, plant and equipment — owned assets

The increase in depreciation in FY2020 was mainly due to a variety of property, plant and equipment purchased in the later part of FY2019 was in use and thus, depreciation was charged for the entire period while the decrease in depreciation in FY2021 was mainly due to the disposal of the co-owned yacht duringFY2021andthus,lessdepreciationwas charged for FY2021.

Depreciation of property, plant and equipment — right-of-use assets

Our Group has adopted HKFRS 16 in relation to the lease liabilities retrospectively from 1 May 2019. On initial recognition, lease is recognised as a right-of-use asset and a corresponding liability at the date of initial application which the leased asset is available for use by our Group. The lease payments are discounted using the interest rate implicit in the lease. For details, please refer to note 2.2 to the Accountants’ Report in Appendix I to this document. Such right-of-use asset is subsequently depreciated using the straight-line method from the date of initial application over the shorter of the remaining lease term or the useful life of the underlying asset. Accordingly, right-of-use assets of approximately HK$3.6 million was recognise as at 1 May 2019 and we recorded depreciation of right-of- use assets of approximately HK$1.1 million and HK$1.3 million for FY2020 and FY2021, respectively.

Legal and professional expenses

Legal and professional expenses pertain to a variety of professional services provided to our Company such as legal, financial and internal control advisory services, accountancy and company secretarial services. Expense incurred for FY2019 of approximately HK$4.0 million mainly represented financial and internal control advisory services provided in improving and standardising financial reporting, corporate governance and internal control procedures in light of anticipated rapid expansions of our Group, which was considered one-off in nature. Legal and professional expenses decreased by approximately HK$2.9 million from approximately HK$4.0 million for FY2019 to HK$1.0 million for FY2020 since our Group did not incur such financial and internal control services in FY2020. Our legal and professional expenses decreased by approximately HK$0.8 million from approximately HK$1.0 million for FY2020 to approximately HK$0.3 million for FY2021

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FINANCIAL INFORMATION because expense incurred for FY2020 included professional fee for financial and internal control advisory services, which was considered one-off in nature while our Group did not incur such expenses during FY2021.

Other expenses

Other expenses pertain to a number of insignificant items of mixed administrative nature such as shipping and postage, utilities, computer and telephone, repair and maintenance. Other expense amounted to approximately HK$1.8 million, HK$3.7 million and HK$3.6 million for FY2019, FY2020 and FY2021, respectively. The increase in other expenses in FY2020 as compared to that of FY2019 was mainly due to increase in miscellaneous office expenses incurred for FY2020 for our Singapore office which was newly set up during FY2019. Our other expenses for FY2021 remained relatively stable as compared to that of FY2020.

Finance costs

Our Group recorded finance costs of approximately HK$0.6 million, HK$0.8 million and HK$1.6 million, respectively, for FY2019, FY2020 and FY2021. During FY2019, our Group entered into agreements with Independent Third Parties, which Lender A and Lender B agreed to arrange financing in the amount of HK$10.3 million and HK$8.6 million for the acquisitions of certain demonstration yachts for a period ranged from 2 to 6 months with effective interest rates ranging from approximately 5.5% to 18.0% per annum. The amounts had been fully repaid in FY2019. Our Group’s finance costs increased from approximately HK$0.6 million for FY2019 to HK$0.8 million for FY2020, primarily attributable to the net effect of increase in effective interest expense on convertible bonds of HK$0.2 million and increase in finance charges on lease liabilities upon application of HKFRS 16 of HK$0.1 million, partially offset by decrease in interest expenses on borrowings of approximately HK$0.1 million. For the Sale and Leaseback Transaction entered by the Group in FY2020, as the borrowing was arranged in April 2020, no significant finance cost was incurred for FY2020. Our finance costs increased from approximately HK$0.8 million for FY2020 to approximately HK$1.6 million for FY2021. Such increase was mainly due to increase in interest expenses incurred for Sale and Leaseback Transaction (i.e. 11 months interest incurred for FY2021; approximately 1 month for FY2020). For details of adoption of HKFRS 16, please refer to note 2.2 to the Accountants’ Report in Appendix I to this document.

Income tax expense

(a) Cayman Islands income tax

Our Company was incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Act of the Cayman Islands and accordingly, is exempted from Cayman Islands income tax.

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FINANCIAL INFORMATION

(b) Hong Kong profits tax

Income tax expense payable by us has been provided under the two-tiered profits tax rates regime as detailed below during the Track Record Period.

Under the two-tiered profits tax rates regime, the first HK$2,000,000 of profits of qualifying corporations will be taxed at 8.25% and profits above HK$2,000,000 will be taxed at 16.5%. For the annual reporting periods ending on or after 1 April 2018, Hong Kong profits tax of the qualified entity is calculated in accordance with the two-tiered profits tax regime. The profits of other group entities in Hong Kong not qualifying for the two-tiered profits tax regime will continue to be taxed at the flat rate of 16.5%.

Our Group’s effective tax rate, calculated as our income tax expense for the corresponding year divided by our profit before income tax for the year without taking into account of non-deductible [REDACTED], was approximately 15.9%, 17.1% and 15.9% for FY2019, FY2020 and FY2021, respectively. The higher effective tax rate without taking into account of non-deductible [REDACTED] for FY2020 was mainly due to the tax effect of unrecognised tax losses arising from our Singapore subsidiary since no assessable profits was generated in Singapore. Our effective tax rate without taking into account of non-deductible [REDACTED] for FY2021 was mainly due to non taxable government grant received during FY2021.

Our Group obtained confirmations from the IRD that no records of complaint, investigation, warning or concerns have been found regarding the tax position of our Group’s operating subsidiaries since their establishment.

No provision for Singapore corporate income tax has been made as our Group did not generate any assessable profits arising from operation in Singapore during the Track Record Period.

Loss/profit for the year

Our Group recorded loss for FY2019 amounted to approximately HK$1.2 million, profit for the year of approximately HK$5.2 million for FY2020 and profit for the year of approximately HK$27.3 million for FY2021.

Our profit increased by approximately HK$6.4 million from loss of approximately HK$1.2 million for FY2019 to profit of approximately HK$5.2 million for FY2020. Such increase was mainly attributable to the combined effect of (i) increase of gross profit of approximately HK$4.8 million from approximately HK$34.1 million for FY2019 to approximately HK$39.0 million for FY2020; (ii) decrease in [REDACTED] of approximately HK$[REDACTED] from HK$[REDACTED] for FY2019 as compared to HK$[REDACTED] for FY2020; and (iii) increase in selling expenses of approximately HK$2.6 million from approximately HK$3.5 million for FY2019 to HK$6.1 million for FY2020.

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FINANCIAL INFORMATION

Our profit for the year increased by approximately HK$22.0 million from approximately HK$5.2 million for FY2020 to approximately HK$27.3 million for FY2021. Such increase was mainly due to (i) increase of gross profit generated for the year from approximately HK$38.9 million for FY2020 to approximately HK$58.0 million for FY2021 as a result of increase in number of sale of first-hand and second-hand yachts; (ii) increase in other income as a result of the disposal of a co-owned yacht; and (iii) decrease in [REDACTED] incurred during FY2021.

NET CURRENT ASSETS

The following table sets forth the breakdown of our Group’s current assets and liabilities as at 30 April 2019, 2020 and 2021:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Current assets Inventories 49,183 51,150 16,222 Trade and other receivables 61,633 23,859 167,907 Amounts due from Directors 2,589 5,929 12,426 Amount due from a non-controlling Shareholder 15,417 737 737 Bank balances and cash 8,241 22,937 39,714

Total current assets 137,063 104,612 237,006

Current liabilities Trade and other payables 109,978 45,459 179,889 Lease liabilities — 1,499 902 Amount due to a Director 253 111 117 Amount due to a non-controlling Shareholder — 744 848 Current tax liabilities 1,917 1,520 4,923 Borrowings — 36,484 2,316 Convertible bonds — 8,259 8,073

Total current liabilities 112,148 94,076 197,068

Net current assets 24,915 10,536 39,938

Our current assets primarily consisted of inventories, trade and other receivables, amounts due from Directors and non-controlling Shareholder and bank balances and cash. Our current liabilities primarily consisted of trade and other payables, amount due to a Director and non-controlling Shareholder, current tax liabilities, borrowings and convertible bonds. Our net current assets, being the difference between total current assets and total current liabilities, remained positive during the Track Record Period.

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FINANCIAL INFORMATION

Our net current assets position decreased by approximately HK$14.4 million, from approximately HK$24.9 million as at 30 April 2019 to approximately HK$10.5 million as at 30 April 2020. Such decrease was mainly due the combined effect of (i) decrease in trade and other payables of approximately HK$64.5 million; (ii) increase in borrowings in the amount of approximately HK$6.6 million from a banking institution and HK$29.9 million from other borrowings; (iii) decrease in trade and other receivables of approximately HK$37.8 million; and (iv) decrease in net amount due from a non-controlling Shareholder of approximately HK$15.4 million.

Our net current assets position increased by approximately HK$29.4 million, representing an increase of approximately 279.1% from approximately HK$10.5 million as at 30 April 2020 to HK$39.9 million as at 30 April 2021. Such increase was mainly due to (i) increase in trade and other receivables of approximately HK$144.0 million from approximately HK$23.9 million as at 30 April 2020 to approximately HK$167.9 million as at 30 April 2021 as a result of increase in prepayments for ordering yachts; (ii) decrease in borrowings of approximately HK$34.2 million; and (iii) increase in trade and other payables from approximately HK$45.5 million as at 30 April 2020 to approximately HK$179.9 million as at 30 April 2021 as a result of increase in receipts in advance from customers.

DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Property, plant and equipment (excluding right-of-use assets)

Our Group’s property, plant and equipment mainly comprised leasehold improvements, furniture and fixtures and equipment and motor vehicles and yachts. The carrying amount of property, plant and equipment amounted to approximately HK$5.4 million, HK$3.0 million and HK$1.4 million as at 30 April 2019, 2020 and 2021, respectively. Furniture and fixtures and equipment and motor vehicles, boats and yachts represented approximately 93.5%, 92.7% and 93.1% of the total property, plant and equipment as at 30 April 2019, 2020 and 2021, respectively.

Right-of-use assets

Our right-of-use assets represent leases of offices and motor vehicle. We had right-of- use assets of nil and approximately HK$2.1 million and HK$1.4 million as at 30 April 2019, 2020 and 2021, respectively. Our right-of-use assets increased from nil as at 30 April 2019 to approximately HK$2.1 million as at 30 April 2020 primarily due to the adoption of HKFRS 16 for FY2020. Our right-of-use assets decreased from approximately HK$2.1 million as at 30 April 2020 to approximately HK$1.4 million as at 30 April 2021, which was mainly due to the addition of a motor vehicle during FY2021 offset by the depreciation of right-of-use asset for FY2021. Under HKFRS 16, all leases except for those with short-term leases or of low value must be recognised in the form of right-of-use assets and leases liabilities in consolidated statements of financial position.

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FINANCIAL INFORMATION

Intangible assets

Our intangible assets solely consisted of private mooring for our Group’s yachts. The intangible asset as at 30 April 2019, 2020 and 2021 was approximately HK$0.8 million, nil and nil, respectively. Decrease in balance in FY2020 was because the private mooring was disposed of during the year.

Inventories

The following table sets forth the breakdown of our inventory balance in terms of number of first-hand yachts and second-hand yachts and amount as at the dates indicated:

As at 30 April 2019 2020 2021 Number of Number of Number of Number of Number of Number of first-hand second-hand first-hand second-hand first-hand second-hand yachts HK$’000 yachts HK$’000 yachts HK$’000 yachts HK$’000 yachts HK$’000 yachts HK$’000

Finished goods 1 32,442 4 16,741 2 18,406 5 32,744 — — 2 16,222

Our inventory balance consists of finished goods including first-hand yachts for demonstration purpose and second-hand yachts. Our inventories balance remained relatively stable as at 30 April 2019 and 2020 and amounted to approximately HK$49.2 million and HK$51.2 million as at 30 April 2019 and 2020, respectively. Our inventory balance decreased to approximately HK$16.2 million as at 30 April 2021, which was mainly due to the decrease in number of yachts retained as our Group’s inventory. Our demonstration yachts are classified as inventories, as our Group holds the demonstration yachts for display and sale in the ordinary course of business. Inventories are measured at lower of cost and net realisable value, which management’s assessment of the net realisable value is based on current market condition, physical condition of the yachts and historical experience of selling products of similar nature with reference to, where applicable, valuations from independent professional valuers, quoted market prices from public sources and/or net proceeds from subsequent sales. Under the circumstance when net realisable value is lower than the cost, inventories are written down to net realisable value. Our Directors confirm that none of the yachts which comprised the inventories as at 30 April 2019, 2020 and 2021 represented re-acquired yacht due to any cancelled order.

As for first-hand yachts, our inventory balance amounted to approximately HK$32.4 million, HK$18.4 million and nil as at 30 April 2019, 2020 and 2021, respectively. The decrease in our inventory balance as at 30 April 2020 as compared to that of 30 April 2019 was mainly attributable to the inclusion of a first-hand super yacht with relatively large carrying amount of approximately HK$32.4 million as at 30 April 2019, which was sold during FY2020. Our inventory balance for first-hand yachts decreased to nil as at 30 April 2021 from approximately HK$18.4 million, which was mainly due to the decreased in number of first-hand yachts retained as our inventory from 2 yachts as at 30 April 2020 to nil yacht as at 30 April 2021.

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FINANCIAL INFORMATION

As for second-hand yachts, our inventory balance amounted to approximately HK$16.7 million, HK$32.7 million and HK$16.2 million as at 30 April 2019, 2020 and 2021, respectively. The increase in our inventory balance as at 30 April 2020 as compared to that of 30 April 2019 was mainly attributable to the increase in the number of second-hand yachts that we had as at 30 April 2020. Our inventory balance as at 30 April 2021 decreased as a result of decreasing number of yacht from 5 yachts as at 30 April 2020 to 2 yachts as at 30 April 2021.

As at 30 April 2019 and 2020, inventories with carrying amounts of nil and approximately HK$31.4 million were pledged for our Group’s other borrowings of approximately HK$29.9 million.

As at 30 April 2021, none of inventories was pledged for our Group’s other borrowings since all of our other borrowings was settled as at 30 April 2021.

The following table is an aging analysis of inventories based on the recognition date at the dates indicated:

As at 30 April 2019 2020 2021 Second- Second- Second- First-hand hand First-hand hand First-hand hand yachts yachts yachts yachts yachts yachts HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

1–180 days 32,442 7,055 — 15,222 — — 181–365 days — 8,386 18,406 8,722 — — Over 1 year — 1,300 — 8,800 — 16,222

32,442 16,741 18,406 32,744 — 16,222

As at 30 April 2019, 2020 and 2021, approximately 97.4%, 82.8% and none of our inventories balance was with aging less than 1 year and our inventories balance with aging over 1 year amounted to approximately HK$1.3 million, HK$8.8 million and HK$16.2 million, respectively, which was an one-off purchase of a second-hand yacht for trade-in purpose. Our inventories are stated at the lower of cost and net realisable value. As at 30 April 2019, 2020 and 2021, accumulated provision of impairment of approximately HK$0.4 million, HK$1.3 million and HK$0.9 million, respectively, was made for our inventories with aging over 1 year.

Despite certain of our inventories aged over 1 year as at 30 April 2019, 2020 and 2021, since(i)thereisanactivemarketevidencedbycustomer inquiries for quotation; (ii) the balances of such yachts are benchmarked with reference to latest quoted market price from public sources, our Directors consider that there is no recoverability issue and no further provision is required.

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FINANCIAL INFORMATION

The following table sets forth our average inventory turnover days for the years indicated:

Year ended 30 April 2019 2020 2021 First-hand Second- First-hand Second- First-hand Second- yachts hand yachts yachts hand yachts yachts hand yachts Days Days Days Days Days Days

Inventory turnover days (Note 1) 52.6 940.0(Note 2) 47.8 979.0 9.9 185.2

Note 1: Inventory turnover days equals average balance of inventory divided by their respective cost of sales for the relevant year multiplied by the number of days in the relevant year. Average balance is calculated as the sum of the beginning balance and ending balance for the relevant year divided by two.

Note 2: Inventories with carrying amount of approximately HK$9.7 million being transferred to our Directors during FY2019 is excluded in opening inventory.

As for first-hand yachts, our inventory turnover days was approximately 52.6 days, 47.8 days and 9.9 days for FY2019, FY2020 and FY2021, respectively. The inventory turnover days decreased from approximately 52.6 days for FY2019 to approximately 47.8 days for FY2020, which was mainly due to decrease in average inventory balance over FY2020 as compared to that of FY2019. The inventory turnover days decreased from approximately 47.8 days for FY2020 to approximately 9.9 days for FY2021, which was mainly due to the decrease in average inventory balance over FY2021 as compared to that of FY2020 since we did not have any first-hand yacht retained as inventory as at 30 April 2021.

As for second-hand yachts, the inventory turnover days would be generally higher than that of first-hand yachts as our Group typically focuses on promoting our core brands of first-hand yachts and only offer second-hand yachts when potential customers show explicit interests.

The inventory turnover days of second-hand yachts was approximately 940.0 days, 979.0 days and 185.2 days for FY2019, FY2020 and FY2021, respectively. According to the Frost & Sullivan Report, it is an industry norm for certain yacht dealers to have high inventory turnover days for second-hand yachts since such days may be affected by the size and condition of the yacht which require additional time for supplier and demand parties to perfectly match their needs. The high inventory turnover days for FY2019 and FY2020 was mainly due to the relatively high inventory balances mainly driven by (i) the trade-in of second-hand yachts during the year; and (ii) two of the second-hand yachts of approximately HK$8.8 million in aggregate that were manufactured in 2012 and 2008, respectively were retained as our inventory for over 1 year as at 30 April 2020. For FY2019 and FY2020, the purchase cost for second-hand yachts acquired was approximately HK$15.4 million and HK$26.2 million, respectively, while the cost of sales for sale of second-hand yachts was approximately HK$3.5 million and HK$9.3 million, respectively.

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FINANCIAL INFORMATION

The relatively high inventory balances for second-hand yachts as of the respective reporting dates were mainly attributable to the combined effect of (i) the relatively large number of second-hand yachts we acquired during FY2019 and FY2020 (FY2019: 3; FY2020: 4) as compared to the number of second-hand yachts we sold during the respective year (FY2019: 1; FY2020: 3); and (ii) the increase in average purchase cost of the second-hand yachts acquired from approximately HK$5.1 million per yacht for FY2019 to HK$6.5 million per yacht for FY2020 mainly due to increase in size of yachts acquired.

The inventory turnover days for second-hand yachts decreased from approximately 979.0 days for FY2020 to approximately 185.2 days for FY2021. Such decrease was mainly due to the increase in cost of sales for the second-hand yachts sold from approximately HK$9.3 million for FY2020 to approximately HK$48.2 million for FY2021 as a result of increase in sales volume during FY2021.

As at the Latest Practicable Date, none of our inventory balance as at 30 April 2021 were sold. Our Group recorded allowance for inventories amounting to approximately HK$0.1 million, HK$1.4 million and nil to write down the carrying amounts of 1, 2 and nil second-hand yachts to their estimated net realisable values for FY2019, FY2020 and FY2021, respectively.

Trade and other receivables

The following table set out below is the composition of trade and other receivables as at the dates indicated:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Trade receivables From third parties 23,909 3,546 4,437 Less: expected credit losses (‘‘ECL’’) allowance (118) (515) (790)

23,791 3,031 3,647

Other receivables — Prepayments to suppliers 30,803 13,987 151,934 — Deposits and other receivables 568 548 508 — Prepaid/Deferred [REDACTED] costs [REDACTED] [REDACTED] [REDACTED]

37,842 20,828 164,260

61,633 23,859 167,907

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FINANCIAL INFORMATION

The decrease in balance as at 30 April 2020 as compared to that of 30 April 2019 was mainly attributable to (i) decrease in trade receivables of approximately HK$20.8 million as a result of the receipt of outstanding payment from customers; and (ii) decrease in prepayments to suppliers of approximately HK$16.8 million during FY2020.

The increase in balance as at 30 April 2021 as compared to that of 30 April 2020 was mainly due to increase in prepayments to suppliers of approximately HK$137.9 million.

Trade Receivables

The following table is an aging analysis of trade receivables based on recognition date and due date, before ECL allowance, as at the dates indicated:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

1–90 days 22,784 2,011 2,813 91–180 days 543 181 332 181–365 days 283 832 502 Over 1 year 299 522 790

23,909 3,546 4,437

There were no credit terms granted to the customers. The trade receivables balance (net of ECL allowance) amounted to approximately HK$23.8 million, HK$3.0 million and HK$3.6 million as at 30 April 2019, 2020 and 2021, respectively. We recorded over 1 year balance principally related to delayed payments from customers for our maintenance service as longer time is required for ordering specific parts in order to complete the maintenance services and hence our Group extended the credit period for the customer.

Our directors of our Group considered that the fair value of trade and other receivables are not materially different from their carrying amounts because these amounts have short maturity periods on their inception.

As at the Latest Practicable Date, approximately HK$1.4 million or 31.1% of our trade receivables as at 30 April 2021 were subsequently settled.

The following table sets forth our average trade receivables turnover days for the years indicated:

Year ended 30 April 2019 2020 2021 Days Days Days

Trade receivables turnover days (Note) 26.5 19.4 2.6

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FINANCIAL INFORMATION

Note: Our average trade receivables turnover days, calculated as the average trade receivables balance divided by sales of the relevant year and multiplied by the number of days in the relevant year. Average balance is calculated as the sum of the beginning balance and ending balance for the relevant year divided by two.

Our trade receivables turnover days were 26.5 days for FY2019, 19.4 days for FY2020 and 2.6 days for FY2021.

The decrease in trade receivables turnover days for FY2020 as compared to that of FY2019 was mainly due to the decrease in average trade receivables balance in FY2020 as compared to that of FY2019. The decrease in trade receivables turnover days for FY2021 as compared to that of FY2020 was mainly due to the decrease in average trade receivables balance in FY2021 as compared to that of FY2020, which was mainly attributable to the relatively high trade receivables balance as at 30 April 2019 of approximately HK$23.9 million.

Our Group applies simplified approach to estimate ECL prescribed in HKFRS 9 as disclosed in Note 31.2 of the Accountants’ Report as set out in Appendix I to this document. Movements in ECL allowance of trade receivables were as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

As at 1 May — 118 515 ECL allowance recognised 118 397 680 ECL allowance reversed — — (405)

As at 30 April 118 515 790

The Group assessed the ECL allowance for trade receivables on an individual basis. As at 30 April 2019, 2020 and 2021, ECL allowance for trade receivables of approximately HK$0.1 million, HK$0.5 million and HK$0.8 million was recognised for trade receivables aged over 18 months at ECL rate of 100%, respectively, while ECL allowance for trade receivables was not material for trade receivables aged within 18 months. The Directors considered the ECL allowance is adequate and there is no recoverability issue for the trade receivables balance as at 30 April 2021.

Other Receivables

Our other receivables represent (i) prepayments to suppliers; (ii) prepaid/deferred [REDACTED] costs and (iii) other miscellaneous deposits and other receivables.

The other receivables as at 30 April 2019, 2020 and 2021 was approximately HK$37.8 million, HK$20.8 million and HK$164.3 million, respectively.

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FINANCIAL INFORMATION

Thedecreaseinotherreceivablesasat30 April 2020 as compared to that of 30 April 2019 was mainly attributable by the decrease in prepayments to suppliers of approximately HK$16.8 million from HK$30.8 million as at 30 April 2019 to approximately HK$14.0 million. Such decrease was mainly due to (i) decrease in prepayments to suppliers for 10 yachts as at 30 April 2019 to 5 yachts as at 30 April 2020; and (ii) balance included as at 30 April 2019 represented prepayments for ordering several super yachts which contributed larger amounts.

The increase in other receivables as at 30 April 2021 as compared to that of 30 April 2020 was mainly attributable to the increase in prepayments to suppliers of approximately HK$137.9 million from approximately HK$14.0 million as at 30 April 2020 to approximately HK$151.9 million as at 30 April 2021. Such increase was mainly due to increase in number of underlying yachts from 5 as at 30 April 2020 to 25 as at 30 April 2021. As at 30 April 2021, our prepayments to suppliers were mainly attributable to purchase of 25 yachts, which our Group has secured 9 relevant sales contracts with corresponding balance of prepayments to suppliers of approximately HK$117.2 million, or 77.1%, of our prepayments to suppliers as at 30 April 2021. As at 30 April 2021, the outstanding estimated contract sum payable to suppliers was approximately HK$256.3 million. Based on the expected delivery schedule, out of the total outstanding estimated contract sum payable of approximately HK$256.3 million, approximately HK$249.4 million is expected to be settled during the year ending 30 April 2022 and approximately HK$7.0 million is expected to be settled during the year ending 30 April 2023 or thereafter. Our Group intends to finance the funding need for making the payments by our internally generated funds from operation.

As at the Latest Practicable Date, approximately HK$76.5 million or 50.3% of our balance of prepayments to suppliers as at 30 April 2021 were subsequently utilised.

Amounts due from Directors

The amounts due from Directors, being the Controlling Shareholders, was approximately HK$2.6 million, HK$5.9 million and HK$12.4 million as at 30 April 2019, 2020 and 2021, respectively.

During the Track Record Period, to allow greater financial flexibility to the Group, there were circumstances whereas our Directors advanced fund to the Group as well as making payment on behalf of (i) prepayments and deposits for ordering certain new yachts from our suppliers; (ii) service fee for 2BY2 Singapore Pte. Ltd for service rendered to our Group pursuant to the Master Service Agreement; and (iii) berth and mooring costs incurred for our yachts on behalf of the Group, which the amounts would be recharged to our Group.

The gross amounts of prepayments and expenses paid by our Directors on behalf of the Group amounted to approximately HK$5.2 million, HK$1.5 million and HK$60,649 for FY2019, FY2020 and FY2021, respectively.

For the maximum outstanding balance of amounts due from our Directors during FY2020, it was mainly attributable to the assignment of the Group’s receivable balance due from a non-controlling Shareholder to due from Mr. Thomas Woo of approximately

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FINANCIAL INFORMATION

HK$23.2 million, which was a non-cash transaction. Such balance decreased significantly as at 30 April 2020, which was mainly due to (i) the offset of interim dividend of approximately HK$13.0 million; and (ii) fund injection from a Director of approximately HK$11.0 million. For further details, please refer to the paragraph headed ‘‘Amount due from/(to) a non-controlling Shareholder’’ under this section and Note 30 to the Accountant’s Report set out in Appendix I to this document. The Directors confirmed that no costs or expenses related to the Group’s operations paid on behalf our Directors werenotrechargedtotheGroupduringtheTrackRecordPeriodanduptotheLatest Practicable Date.

The outstanding amount is unsecured, interest-free, and repayable on demand. These balances will be settled before [REDACTED].

Amount due from/to a non-controlling Shareholder

As at 30 April 2019, the balance mainly represented amount due from 2BY2 Yachts Italia, a non-controlling shareholder of Marine Italia Singapore, of approximately HK$15.4 million.

As per the Directors, at the start-up stage of the Group’s subsidiary in Singapore in July 2018, being Marine Italia Singapore, our management intended that the procurement of yachts would be directly made by Marine Italia Singapore from our supplier. The Group established Marine Italia Singapore with 2BY2 Yachts Italia, which is a non-controlling shareholder of Marine Italia Singapore. As part of the Group’s marketing strategies, it was expected that the Group would be benefited from the ‘‘2BY2’’ brand which had sound history and network in the local yacht industry of Singapore, as well as the experience in negotiation with local customers. Also, given the Group’s Directors were not ordinary resident in Singapore, to enhance the operating efficiency and flexibility, it was the Directors’ intention and mutually agreed with Ms. Karen Kwee, the Group’s business partner in Singapore, that 2BY2 Yachts Italia, being one of the shareholders of Marine Italia Singapore, would manage and arrange payment for the yacht procurement needs and other operating cost on behalf of Marine Italia Singapore.

Accordingly, fund transfer of approximately HK$15.4 million from the Group to 2BY2 Yachts Italia was made in FY2019 for corresponding funding needs. As per the Directors, such amount was determined with reference to (i) historical procurement cost of a first- hand yacht which was procured from our supplier by our Group’s subsidiary in Hong Kong and being supplied to Marine Italia Singapore for a sales order received in late of FY2019, which the Directors considered such amount of fund transfer would fulfill the Group’s procurement needs in Singapore for similar class/size in near future; and (ii) other daily operating costs, such as berth and mooring costs for additional yachts and yacht maintenance costs.

As at 30 April 2020, the balance mainly represented amount due from 2BY2 Yachts Italia, a non-controlling shareholder of Marine Italia Singapore, of approximately HK$0.8 million. The net decrease in the balance was mainly attributable to the effect of (i) fund transfer of approximately HK$8.5 million from the Group to 2BY2 Yachts Italia; which is

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FINANCIAL INFORMATION set off by (ii) assignment of the balance of approximately HK$23.2 million as amount due from Mr. Thomas Woo, which is a non-cash transaction, leading to the significant decrease in the balance as compared to 30 April 2019.

During FY2020, to diversify the Group’s product offering as well as invest in demonstration yacht to promote the Group’s products in the Singapore market, it was the Directors’ intention to seek for procurement opportunity for one second-hand yacht with range from 80 feet to 90 feet available in the Singapore local market by that time. Given the sound local network of 2BY2 Yachts Italia in the yacht industry in Singapore, to capture the opportunities available in the market, the Directors intended the solicitation for the potential procurement activities to be led by 2BY2 Yachts Italia on behalf of Marine Italia Singapore. Accordingly, during FY2020, additional fund transfer of approximately HK$7.8 million was made from the Group to 2BY2 Yachts Italia for the potential procurement, which increased the aggregate fund transfer amount from approximately HK$15.4 million as at 30 April 2019 to approximately HK$23.2 million during FY2020.

Nevertheless, after ongoing review as well as from the experience of our Group’s first sale of first-hand yacht in Singapore in FY2019, for better coordination purposes, our Directors considered the yacht procurement and corresponding payment shall be centralised and processed in Hong Kong. In addition, the Azimut Dealership Agreement 2, for the sale of Azimut yachts in Singapore, was entered into between Azimut and Marine Italia and pursuant to the Azimut Dealership Agreement 2, Marine Italia is entitled to purchase and sell Azimut yachts in its own name and for its own account, as such, only Marine Italia is the exclusive dealer in Singapore. As Marine Italia is the exclusive dealer in Singapore, Marine Italia entered into an exclusive distribution agreement with Marine Italia Singapore for the sale of Azimut yachts in Singapore whereby Marine Italia is the distributor and Marine Italia Singapore is the dealer and pursuant to this agreement, Marine Italia Singapore purchased yachts from Marine Italia during the Track Record Period. Accordingly, our Group discussed with Azimut for the proposed change of procurement arrangement (i.e. purchase directly from Azimut through Marine Italia Singapore), such that the procurement and the corresponding payment shall be centrally handled by Marine Italia, was mutually agreed between our Group and Azimut, and thus, during the Track Record Period, Marine Italia Singapore purchased yachts from Marine Italia instead of directly purchase from yachts suppliers. Going forward, our Group intends to follow such procurement arrangement for better coordination purpose. Also, the Group successfully solicited a second-hand yacht in Singapore in FY2020 in form of trade-in yacht associated with the sale of a first-hand yacht. Considering the above, the Directors considered the accumulated transferred balance from the Group to 2BY2 Yachts Italia of approximately HK$23.2 million was no longer necessary for the originally intended purpose, and the balance would be settled by 2BY2 Yachts Italia to the Group accordingly.

During FY2020, a mutual agreement was entered by the Group, 2BY2 Yachts Italia and Mr. Thomas Woo, which the outstanding receivable balance of the Group of approximately HK$23.2 million due from 2BY2 Yachts Italia was assigned as amount due from Mr. Thomas Woo, which was a non-cash transaction, leading to the significant decrease in amount due from a non-controlling Shareholder as at 30 April 2020. As per the Directors, the assignment was taken into consideration of (i) personal funding needs by Mr.

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FINANCIAL INFORMATION

Thomas Woo in Singapore, which Thomas Woo entrusted his business partner, Ms. Karen Kwee, being the sole shareholder of 2BY2 Yachts Italia with local business network and knowledge, to seek for investment opportunity in Singapore to capture opportunity raised in rapid manner in local market on behalf of him; and (ii) it is considered that the retention of the retained fund in 2BY2 Yachts Italia would minimise the potential transaction cost such as bank charges and exchange difference since 2BY2 Yachts Italia would repay Mr. Thomas Woo in Singapore dollar directly.

As a result of the foregoing, immaterial balance of approximately HK$0.8 million was recorded for amount due to a non-controlling Shareholder as at 30 April 2021.

The amount due from a non-controlling Shareholder is non-trade in nature, unsecured, interest-free and repayable on demand.

The amount due to a non-controlling Shareholder is trade in nature, unsecured, interest-free and repayable on demand.

The outstanding amount is unsecured, interest-free, and repayable on demand. These balances will be settled before [REDACTED].

Trade and other payables

The followings set forth our Group’s trade and other payables as at the dates indicated:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Trade payables 28,477 14,613 2,364

Other payables Accrued [REDACTED] costs [REDACTED] [REDACTED] [REDACTED] Accrued charges and other payables 3,457 3,552 3,994 Deposits receipt in advance 70,417 16,870 158,523

81,501 30,846 177,525

109,978 45,459 179,889

Our balance of other payables decreased from approximately HK$81.5 million as at 30 April 2019 to approximately HK$30.8 million as at 30 April 2020. Such decrease was mainly due to (i) decrease in deposits received from customers from 5 yachts as at 30 April 2019 to 3 yachts as at 30 April 2020; and (ii) balance included as at 30 April 2019 represented deposits of approximately HK$42.2 million for sale of a super yacht which the yacht was delivered to the customer in FY2020, which was partially offset by increase in accrued charges and other payables for legal and professional fee in connection to the [REDACTED] application of our Group.

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FINANCIAL INFORMATION

Our balance of other payables increased from approximately HK$30.8 million as at 30 April 2020 to approximately HK$177.5 million as at 30 April 2021. Such increase was mainly due to increase in number of underlying yachts for deposits received from customers from 3 yachts as at 30 April 2020 to 9 yachts as at 30 April 2021, with corresponding sales contract sum of approximately HK$288.3 million. As per the Directors, based on the sales contracts and expected delivery schedule, revenue of approximately HK$265.7 million and HK$22.6 million are expected to be recognised for the year ending 30 April 2022 and 2023, respectively.

There were generally no credit periods granted by the major suppliers of our Group. The aging analysis of the trade payables based on the recognition date is as follows:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

0–30 days 27,036 8,781 834 31–90 days 170 624 394 Over 90 days 1,271 5,208 1,136

28,477 14,613 2,364

As at the Latest Practicable Date, we had subsequently settled approximately HK$1.0 million, or 43.5% of our outstanding trade payables as at 30 April 2021.

The following table sets forth our average trade payables turnover days for the years indicated:

Year ended 30 April 2019 2020 2021 Days Days Days

Trade payables turnover days (Note) 25.3 36.7 7.7

Note: Our trade payables turnover days, calculated as the average of trade payables balance divided by the cost of sales for the relevant year and multiplied by the number of days in the relevant year. Average balance is calculated as the sum of the beginning balance and ending balance for the relevant year divided by two.

The turnover days increased from approximately 25.3 days to approximately 36.7 days for FY2019 and FY2020. Such increase was mainly due to the increase in average trade payables balance for FY2020 was in greater extent as compared to the increase in cost of sales for FY2020. The increase in average trade payable balance was attributable to the relatively low trade payable balance as at 30 April 2018 as a result of timing difference of settlement. Our trade payables turnover days decreased from approximately 36.7 days for FY2020 to approximately 7.7 days for FY2021. Such decrease was mainly due to the decrease in average trade payables balance for FY2021 as compared to FY2020 as a result of timing difference in settlement.

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FINANCIAL INFORMATION

[REDACTED] Convertible Bonds

Absolute Marine, Marine Italia, Marinetec, Mr. Leslie Kong, Mr. Joseph Tong, Mr. Thomas Woo and Mr. Paul Grange entered into the [REDACTED] Convertible Bonds Subscription Agreement in relation to the subscription of the [REDACTED] Convertible Bonds, Mr. Leslie Kong and Mr. Joseph Tong each paid (i) HK$1,000,000 upon the signing of the [REDACTED] Convertible Bonds Subscription Agreement on 14 June 2018; and (ii) HK$3,000,000 upon the completion on 1 November 2018, respectively. For details, please refer to ‘‘History, Reorganisation and Group Structure — [REDACTED] Investment’’ in this document.

Amount due to a Director

The amount due to a Director, being a Controlling Shareholder, was approximately HK$0.3 million, HK$0.1 million and HK$0.1 million as at 30 April 2019, 2020 and 2021, respectively. The outstanding amount is unsecured, interest-free, and repayable on demand. These balances will be settled before [REDACTED].

INDEBTEDNESS

As at 30 April 2019, 2020 and 2021, our Group had outstanding indebtedness of approximately HK$8.1 million, HK$47.0 million and HK$11.9 million, respectively.

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FINANCIAL INFORMATION

The following table sets out the amounts of our indebtedness as at the dates indicated:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Current Lease liabilities — 1,499 902 Amount due to a Director 253 111 117 Borrowings — 36,484 2,316 Convertible bonds — 8,259 8,073

253 46,353 11,408

Non-current Lease liabilities — 688 518 Convertible bonds 7,834 — —

7,834 688 518

8,087 47,041 11,926

As at 30 April 2019, 2020 and 2021, our lease liabilities amounted to approximately nil, HK$2.2 million and HK$1.4 million respectively; our amount due to a Director amounted to approximately HK$0.3 million, HK$0.1 million and HK$0.1 million, respectively; we recorded borrowings of approximately nil, HK$36.5 million and HK$2.3 million, respectively; we recorded convertible bonds of approximately HK$7.8 million, HK$8.3 million and HK$8.1 million, respectively.

Lease liabilities

Our Group has adopted HKFRS 16 for the accounting period beginning on or after 1 May 2019 as stated in Note 2.2 to the Accountant’s Report of our Company set out in Appendix I to this document. As such, we recognised the right-of-use assets and lease liabilities in our Group’s consolidated statement of financial position as at the date of initial application, being 1 May 2019. As at 30 April 2020, our Group had current and non-current lease liabilities amounted to approximately HK$1.5 million and HK$0.7 million, respectively. As at 30 April 2021, our Group had current and non-current lease liabilities amounted to approximately HK$0.9 million and HK$0.5 million, respectively.

During FY2021, our Group entered into an agreement with an Independent Third Party, a company principally engaged in the provision of financial services including hire purchases and leasing financial services, for leasing a motor vehicle with terms of 48 months and effective interest rate of approximately 4.3% per annum and guaranteed personally by Mr. Paul Grange. The Group has an option to purchase the motor vehicle at the end of the lease term.

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FINANCIAL INFORMATION

Borrowings

As at 30 April 2020 and 2021, our Group’s borrowings comprised other borrowings of approximately HK$29.9 million and nil respectively and bank borrowings of approximately HK$6.6 million and HK$2.3 million respectively.

Our Group’s borrowings increased significantly from nil as at 30 April 2019 to approximately HK$36.5 million as at 30 April 2020. Such increase was mainly due to our Group obtained financing from various parties for facilitating our general working capital needs. Our Group’s borrowings decreased from approximately HK$36.5 million as at 30 April 2020 to approximately HK2.3 million as at 30 April 2021, which was mainly due to the repayment of other borrowings under the Sales and Buyback Transactions and Sales and Leaseback Transactions. Set forth below are the details of our Group’s bank borrowings and other borrowings.

Bank borrowings

As at 30 April 2020, our Group had unsecured bank borrowings of approximately HK$6.6 million, comprising individual loan balance of HK$3.6 million, HK$1.8 million and HK$1.2 million, namely Bank Loan A, Bank Loan B and Bank Loan C, with effective interest rates of approximately 4.0%, 11.2% and 4.0% per annum for a period range of 2 and 3 years, respectively, for facilitating our general working capital needs. The increase in bank borrowings as at 30 April 2020 as compared to that of 30 April 2019 was mainly because our Group obtained such loans for the preparation of settling final tax for 2018/19 and provisional tax for 2019/20 and our general working capital. Bank Loan A was secured by the joint personal guarantees provided by Mr. Woo and Mr. Grange and Bank Loan B and Bank Loan C were secured by the personal guarantee provided by Mr. Woo, which the guarantees will be released upon [REDACTED]. Our bank borrowings decreased from approximately HK$6.6 million as at 30 April 2020 to approximately HK$2.3 million as at 30 April 2021, such decrease was mainly due to the repayment of partial principle of the aforementioned bank borrowings in accordance with the repayment schedule. As at 30 April 2021, our Group had total unsecured bank borrowings of approximately HK$2.3 million, comprising Bank Loan A, Bank Loan B and Bank Loan C of approximately HK$0.5 million, HK$1.2 million and HK$0.6 million, respectively.

Other borrowings

As at 30 April 2020, our Group had secured other borrowings of EUR3.0 million (equivalent to approximately HK$24.9 million) from a supplier. During FY2020, to obtain fund for purchasing and provision of one of the latest yacht models launched by one of the Group’s major suppliers in second quarter of 2019 and certain best selling model, as offered by the supplier, the Group entered into agreements with the supplier for (i) sales of two second-hand yachts to the supplier at a total consideration of EUR2.5 million, which comprised of two individual loan balance of EUR1.5 million (‘‘Other Loan A’’) and EUR1.0 million (‘‘Other Loan B’’) respectively (equivalent to approximately HK$12.9 million and HK$8.6 million, respectively) and sale of one second-hand yacht to the supplier at a consideration of EUR0.8 million (‘‘Other Loan C’’) (equivalent to approximately HK$6.7 million); and (ii) repurchase of the aforesaid yachts from the supplier at the same considerations on or before 31 July 2020 and 31 December 2020, respectively (collectively,

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FINANCIAL INFORMATION the Sale and Buyback Transactions). The Directors considered the Sale and Buyback Transactions as other borrowings of EUR3.3 million (equivalent to approximately HK$28.2 million) secured by the aforementioned three yachts included in the Group’s inventories with carrying amount of approximately HK$23.9 million and are interest-free. As at 30 April 2020, the aggregated balance of Other Loan A and Other Loan B amounts of EUR2.2 million (equivalent to approximately HK$18.5 million) and the balance of Other Loan C amounts of EUR0.8 million (equivalent to approximately HK$6.4 million) are repayable on 31 July 2020 and 31 December 2020, respectively. Under the Sale and Buyback Transactions, the Group retained the right of use of the aforementioned second-hand yachts for purpose of demonstration until 31 July 2020 and 31 December 2020, respectively, for sourcing of potential buyers. Also, the Sale and Buyback Transactions could be early terminated at any time before 31 July 2020 or 31 December 2020 upon mutual agreement between both parties. As such, the Directors considered the Sale and Buyback Transactions provided financial flexibility for introducing latest yacht model to the market. As at 30 April 2021, the Other Loan A, Other Loan B and Other Loan C have been fully settled and thus, leading to the significant decrease of the balance of borrowings as at 30 April 2021 as compared to that of 30 April 2020.

As at 30 April 2020 and 30 April 2021, our Group had secured other borrowings of approximately HK$5.0 million and nil respectively from an Independent Third Party. During FY2020 and FY2021, our Group entered into agreements with an Independent Third Party for (i) sale of two second-hand yachts at a consideration of HK$5.0 million and HK$10.0 million respectively; and (ii) leaseback of the aforesaid yachts at a fixed monthly rental amount, which our Group has the option to purchase the yachts at the same consideration on or before 24 March 2021 or 16 June 2021 (the Sale and Leaseback Transactions). The Sale and Leaseback Transactions bear service charge rate of 7.0% per annum with term of one year. Under the Sale and Leaseback Transactions, the Group retained the right of use of the aforementioned second-hand yacht for purpose of demonstration which the Directors consider the transfer of yacht does not satisfy requirements as a sale in accordance with HKFRS 15 since the control of the yacht is still retained in our Group. The Directors considered the Sale and Leaseback Transactions as other borrowings in aggregate of HK$5.0 million secured by the aforementioned yachts included in our Group’s inventories with carrying amount of approximately HK$7.5 million as at 30 April 2020 and with effective interest rates of 7.0% per annum, which the borrowing is repayable on 24 March 2021. The Directors considered the borrowings provided extra funds for our general working capital and use the yachts as demonstration yachts for sourcing potential buyers. All of the other borrowings have been fully settled as at 30 April 2021, which led to the decrease in balance of other borrowings as at 30 April 2021 as compared to that as at 30 April 2020.

The Sales and Leaseback Transactions were guaranteed by joint personal guarantee provided by Mr. Woo and Mr. Grange which the guarantee will be released upon [REDACTED].

For details of the borrowings, please refer to Note 24 to the Accountant’s Report set out in Appendix I to this document.

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FINANCIAL INFORMATION

Convertible bonds

On 14 June 2018, Absolute Marine, Marine Italia, Marinetec, Mr. Leslie Kong, Mr. Joseph Tong, Mr. Thomas Woo and Mr. Paul Grange entered into the [REDACTED] Convertible Bonds Subscription Agreement in relation to the subscription of three (3) per cent. coupon convertible bonds in the aggregate principal amount of HK$8,000,000 to be issued by our Company. Please refer to the sub-section headed ‘‘[REDACTED] investments’’ in ‘‘History, Reorganisation and Group Structure’’ to this document for details. The subscription of the [REDACTED] Convertible Bonds was completed on 1 November 2018.

Save as disclosed in the paragraph headed ‘‘Indebtedness’’ above, our Directors confirm that our Group did not have any outstanding mortgages, charges, debentures, loan capital, bank overdrafts, loans, debt securities or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptances or acceptance credits or any guarantees or other material contingent liabilities outstanding as at 30 April 2021.

Our Directors further confirm that during the Track Record Period, our Group did not experience any default, delay, withdrawal or request for repayment on demand of borrowings nor did we breach any major finance covenants and that there has not been any material change in our indebtedness and contingent liabilities outstanding as at 30 April 2021, being the latest practicable date for this indebtedness statement.

CONTINGENT LIABILITIES

Our Directors confirmed that our Group did not have material contingent liabilities and was not involved in any material legal proceedings during the Track Record Period and up to the Latest Practicable Date.

LIQUIDITY AND CAPITAL RESOURCES

Overview

During the Track Record Period and up to the Latest Practicable Date, we have funded our liquidity and working capital requirements primarily by cash generated operating activities and facilities. We intend to finance our future operations, capital expenditures and other working capital requirements with the cash generated from operating activities, cash and bank balances available, facilities and the net [REDACTED] from the [REDACTED].

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FINANCIAL INFORMATION

CASH FLOWS

The following table summarises selected cash flows data from our consolidated statements of cash flows for the Track Record Period:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

— Operating profit before working capital changes 2,877 13,645 33,691 — Changes in working capital 13,859 (1,470) 22,976 — Income tax paid (6,093) (3,352) (2,219) Net cash from operating activities 10,643 8,823 54,448 Net cash used in investing activities (17,252) (11,506) (2,246) Net cash from/(used in) financing activities 5,499 17,486 (36,730) Net (decrease)/increase in cash and cash equivalents (1,110) 14,803 15,472 Cash and cash equivalents at beginning of year 9,356 8,241 22,937 Effect for foreign exchange rate changes (5) (107) 1,305 Cash and cash equivalent at the end of year 8,241 22,937 39,714

The cash and cash equivalents increased by approximately HK$16.8 million from approximately HK$22.9 million as at 30 April 2020 to approximately HK$39.7 million as at 30 April 2021, which was mainly attributable to combined effects of (i) net cash from operating activities of approximately HK$54.4 million; and (ii) net cash used in investing activities of approximately HK$2.2 million and net cash used in financing activities of approximately HK$36.7 million.

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FINANCIAL INFORMATION

Operating activities

For FY2019, our net cash from operating activities was approximately HK$10.6 million, primarily as a result of the combined effects of operating profit before working capital changes of approximately HK$2.9 million, changes in working capital of approximately HK$13.9 million and payment of income tax of approximately HK6.1 million. Changes in working capital primarily reflected (i) the decrease of inventories of approximately HK$24.2 million; (ii) the increase in trade and other receivables of approximately HK$7.6 million; and (iii) the decrease in trade and other payables of approximately HK$2.8 million.

For FY2020, our net cash from operating activities was approximately HK$8.8 million, primarily as a result of the combined effects of operating profit before working capital changes of approximately HK$13.6 million, changes in working capital of approximately HK$1.5 million and payment of income tax of approximately HK$3.4 million. Changes in working capital primarily reflected (i) the decrease of inventories of approximately HK$14.3 million; (ii) the decrease in trade and other receivables of approximately HK$56.4 million; (iii) the decrease in trade and other payables of approximately HK$72.9 million; and (iv) the increase in amount due to a non-controlling Shareholder of approximately HK$0.7 million.

For FY2021, our net cash from operating activities was approximately HK$54.4 million, primarily as a result of the combined effects of operating profit before working capital changes of approximately HK$33.7 million and changes in working capital of approximately HK$23.0 million. Changes in working capital primarily reflected (i) the increase in trade and other receivables of approximately HK$136.3 million; (ii) the increase of trade and other payables of approximately HK$109.3 million; and (iii) decrease in inventories of approximately HK$49.9 million.

Investing activities

For FY2019, our net cash used in investing activities was approximately HK$17.3 million, primarily as a result of the combined effects of (i) the increase in amount due from a non-controlling Shareholder of approximately HK$15.4 million; (ii) the increase in amounts due from Directors of approximately HK$1.3 million; and (iii) purchase of property, plant and equipment of approximately HK$0.5 million.

For FY2020, our net cash used in investing activities was approximately HK$11.5 million, primarily as a result of the combined effects of (i) the increase in amount due from a non-controlling Shareholder of approximately HK$8.5 million; (ii) purchase of property, plant and equipment of approximately HK$72,000; (iii) the increase in amounts due from Directors of approximately HK$4.1 million; and (iv) proceeds from disposal of private mooring space of approximately HK$1.2 million.

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FINANCIAL INFORMATION

For FY2021, our net cash used in investing activities was approximately HK$2.2 million, primarily as a result of the combined effects of (i) the increase in amounts due from Directors of approximately HK$6.5 million; (ii) proceeds from disposal of property, plant and equipment of approximately HK$5.5 million; and (iii) purchase of property, plant and equipment of approximately HK$1.3 million.

Financing activities

For FY2019, our net cash from financing activities was approximately HK$5.5 million and mainly attributable to the combined effects of (i) the capital contribution from a non- controlling shareholder of approximately HK$0.1 million; (ii) the proceeds from issue of convertible bonds of approximately HK$8.0 million; (iii) the proceeds from bank borrowings of approximately HK$18.9 million; (iv) the repayment for bank borrowings of approximately HK$18.9 million; (v) the interest paid of approximately HK$0.4 million; (vi) the increase in amounts due to Directors of approximately HK$52,000; and (vii) the payment for deferred [REDACTED] cost of approximately HK$[REDACTED].

For FY2020, our net cash from financing activities was approximately HK$17.5 million and mainly attributable to the combined effects of (i) the proceeds from borrowings of approximately HK$14.3 million; (ii) the increase in amount due to a Director of approximately HK$10.8 million; (iii) the repayment for borrowings of approximately HK$5.3 million; (iv) the interest paid of approximately HK$0.3 million; and (v) the payment of lease liabilities of approximately HK$1.5 million.

For FY2021, our net cash used in financing activities was approximately HK$36.7 million and mainly attributable to the combined effects of (i) the repayment for borrowings of approximately HK$42.2 million; and (ii) the proceeds from borrowings of approximately HK$10.0 million.

DIRECTORS’ OPINION ON THE SUFFICIENCY OF OUR WORKING CAPITAL

Our Directors are of the opinion that, taking into consideration the factors disclosed in the section headed ‘‘Summary — Impact of the outbreak of COVID-19 on our Group’’ of this document, including but not limited to (i) our Group has not encountered or experienced any material difficulty/delay in completion/delivery of our yachts to our customers and/or cancellation or any supply chain disruptions due to the outbreak of COVID-19; (ii) our Group’s ability to secure new contracts and deliver yachts after the TrackRecordPeriodanduptotheLatestPracticableDate;and(iii)therewasnocessation of the Group’s operations in Hong Kong subsequent to the Track Record Period and up to the Latest Practicable Date, the financial resources available to us, including internally generated funds, available facilities, and the estimated net [REDACTED] from the [REDACTED] (after a possible Downward [REDACTED] Adjustment setting the final [REDACTED] up to 10% below the bottom end of the indicative [REDACTED] Range), our Directors are of the opinion that we have sufficient working capital required for our operations at present and for at least the next 12 months from the date of the document.

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FINANCIAL INFORMATION

SUMMARY OF KEY FINANCIAL RATIOS

As at/For the year ended30April Notes 2019 2020 2021

Notes:

1. Gross profit margin equals gross profit for the year divided by revenue for the relevant year and multiplied by 100%.

2. Net profit margin equals net profit for the year/period divided by revenue for the relevant year and multiplied by 100%.

3. Current ratio is calculated by current assets over current liabilities as at the end of the respective year and multiplied by 100%.

4. Quick ratio is calculated by current assets less inventory over current liabilities as at the end of the respective year.

5. Gearing ratio is calculated by total borrowings over total equity as at the end of the respective year and multiplied by 100%. Total borrowings includes amount due to a Director, convertible bonds, borrowings and lease liabilities.

6. Net debt to equity is calculated by net debt over total equity as at the end of the respective year and multiplied by 100%. Net debt includes amount due to a Director, convertible bonds, borrowings and lease liabilities net of cash and cash equivalents.

7. Return on equity is calculated by profit for the year over total equity as at the end of the respective year and multiplied by 100%.

8. Return on total assets is calculated by profit for the year over total assets at the end of the respective year and multiplied by 100%.

9. Interest coverage ratio is calculated by profit for the year before interest and tax over interest expense for the year.

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FINANCIAL INFORMATION

Gross profit margin

Our gross profit margin were approximately 13.8%, 15.4% and 12.6% for FY2019, FY2020 and FY2021, respectively. For further information in relation to our gross profit margin, please refer to the paragraph headed ‘‘Gross profit and gross profit margin’’ in this section.

Netprofitmargin

Net profit margin was not applicable for FY2019 as the Group was loss-making for FY2019 while the net profit margin was approximately 2.1% and 5.9% for FY2020 and FY2021, respectively. For FY2020, the increase in net profit margin was primarily due to the improvement of our Group’s gross profit and other income from disposal of private mooring space. For FY2021, the increase in net profit margin was primarily as a result of relatively low [REDACTED] incurred by our Group.

Current ratio and quick ratio

The current ratio maintained at a relatively stable level at 1.2 times, 1.1 times and 1.2 times as at 30 April 2019, 2020 and 2021, respectively. The quick ratio remained relatively stable at approximately 0.8 times, 0.6 times and 1.1 times as at 30 April 2019, 2020 and 2021, respectively.

Gearing ratio

The gearing ratio was approximately 34.7%, 300.9% and 27.9% as at 30 April 2019, 2020 and 2021, respectively. The increase in gearing ratio as at 30 April 2020 as compared to that of 2019 was primarily due to the increase in other borrowings of approximately HK$36.5 million during the year which were mainly attributable to the Sale and Buyback Transactions and the Sale and Leaseback Transaction arranged during the year. The decrease in gearing ratio as at 30 April 2021 as compared to that of 30 April 2020 was primarily due to the decrease in other borrowings attributable to the Sale and Buyback Transactions, which were fully settled during the period. For details of other borrowings, please refer to the sub-section headed ‘‘Borrowings’ in ‘‘Financial Information’’ to this document.

Net debt to equity

The net debt to equity ratio was not applicable as at 30 April 2019 and 30 April 2021 as our bank balances and cash exceeds that of total borrowings as at 30 April 2019 and 30 April 2021 while the net debt to equity ratio was approximately 154.2% as at 30 April 2020, As at 30 April 2020, the net debt to equity ratio was mainly driven by the increase in other borrowing of approximately HK$36.5 million which were mainly attributable to the Sale and Buyback Transactions and the Sale and Leaseback Transaction arranged during the year and decrease in equity as a result of dividend paid accounted for approximately HK$13.0 million during the year. For details of other borrowings, please refer to the sub- section headed ‘‘Borrowings’ in ‘‘Financial Information’’ to this document.

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FINANCIAL INFORMATION

Return on equity

The return on equity was not applicable for FY2019 as our Group experienced net loss for the year. For FY2020, our return on equity was approximately 33.5%, which was mainly due to improvement of our Group’s net profit for FY2020. For FY2021, our return on equity was approximately 63.7%, which the increase was mainly due to improvement of our net profit for the year.

Return on total assets

Our return on total assets was not applicable for FY2019 as our Group experienced net loss for the year. For FY2020, our return on total assets was approximately 4.7% as a result of improvement of our Group’s net profit for FY2020. For FY2021, our return on total assets was approximately 11.3%, which the increase was mainly due to improvement of our netprofitfortheyear.

Interest coverage ratio

The interest coverage ratio was approximately 1.9 times, 10.4 times and 21.7 times for FY2019, FY2020 and FY2021, respectively.

The increase was mainly due to the profit before tax and interest increased at a greater extent than the increase in interest expenses for the year FY2020 and FY2021.

For details, please see the paragraphs headed ’’Finance costs’’ and ‘‘Indebtedness’’ in this section.

CAPITAL EXPENDITURES

Our capital expenditures were approximately HK$5.1 million, HK$72,000 and HK$1.4 million for FY2019, FY2020 and FY2021, respectively. Our capital expenditures were used primarily for acquisition of property, plant and equipment and intangible assets and were financed by cash generated from operations.

We expect to fund our contractual commitments and capital expenditures principally though the net [REDACTED] we receive from the [REDACTED], cash generated from our operating activities and proceeds from borrowings. We believe that these sources of funding will be sufficient to finance our contractual commitments and capital expenditure needs for the next 12 months.

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FINANCIAL INFORMATION

COMMITMENTS

Lease commitments

At 30 April 2020 and 30 April 2021, our Group has no lease commitments. At 30 April 2019, the total future minimum lease payments payable by our Group under non- cancellable operating leases are as follows:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Within one year 1,560 — — In the second to fifth years 2,255 — —

3,815 — —

CAPITAL COMMITMENTS

Our Group did not have significant capital commitments as at 30 April 2019, 2020 and 30 April 2021.

OFF-BALANCE-SHEET COMMITMENTS AND ARRANGEMENTS

As at the Latest Practicable Date, our Group had not entered into any material off- balance-sheet commitments and arrangements.

CAPITAL MANAGEMENT

Our Group actively and regularly reviews its capital structure and makes adjustments in light of changes in economic conditions. Our Group monitors its capital structure on the basis of the gearing ratio. The gearing ratio is calculated based on total borrowings divided by the total equity at each reporting date. In order to maintain or adjust the ratio, our Group may adjust the amount of dividends paid to shareholders, issue new shares, raise new debt financing or sell assets to reduce debt.

FINANCIAL RISK MANAGEMENT

Our Group is exposed to financial risks through its use of financial instruments in its ordinary course of operations. The financial risks include credit risk, liquidity risk and market risk (including interest rate risk and foreign currency risk). Our Group’s overall risk management strategy seeks to minimise potential adverse effects on our Group’s financial performance. Risk management is carried out by the senior management of our Group and approved by the board of directors. Please refer to Note 31 to the Accountant’s Report as set out in Appendix I to this document for further details.

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FINANCIAL INFORMATION

[REDACTED]

Our Group recorded [REDACTED] of approximately HK$[REDACTED] and HK$[REDACTED] and HK$[REDACTED] for FY2019, FY2020 and FY2021, respectively. Our Group expects that the total [REDACTED] which is approximately [REDACTED]%ofthegross[REDACTED] from the [REDACTED] calculated based on the mid-point of the [REDACTED] range and assuming the [REDACTED] is not exercised, which is non-recurring in nature, will amount to approximately HK$[REDACTED],of which: (i) approximately HK$[REDACTED] is directly attributable to the issue of the [REDACTED] pursuant to the [REDACTED] and will be accounted for as a deduction from equity upon the [REDACTED]; and (ii) approximately HK$[REDACTED] is expected to be charged to the statement of profit or loss and other comprehensive income subsequent to the Track Record Period and upon [REDACTED].

SUBSEQUENT EVENTS

For significant events that took place subsequent to 30 April 2021, please refer to Note 33 to the Accountant’s Report as set out in Appendix I to this document.

DIVIDEND

For FY2019, an interim dividend for a total of HK$9.0 million has been proposed and approved by our Board and was fully paid by offsetting against the amounts due from our Directors.

For FY2020, an interim dividend of HK$13.0 million has been proposed and approved by our Board and was fully paid by offsetting against the amounts due from directors.

For FY2021, no dividend was recommended.

DISTRIBUTABLE RESERVES

Our Company was incorporated in the Cayman Islands and is an investment holding company. Under the Companies Act, we may pay dividends out of our profits or our share premium account in accordance with the Article of Association.

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FINANCIAL INFORMATION

UNAUDITED PRO FORMA CONSOLIDATED NET TANGIBLE ASSETS

The unaudited pro forma consolidated net tangible assets of our Group has been prepared, for the purpose of illustrating the effect of the [REDACTED] as if it had taken place on 30 April 2021. Please see ‘‘Appendix II — Unaudited pro forma financial information’’ in this document for details.

RELATED PARTY TRANSACTIONS

With respect to the related parties transactions set out in Note 29 to the Accountant’s Report in Appendix I to this document, our Directors believe that such transactions were conducted on normal commercial terms and such terms were no less favourable to our Group than terms available to Independent Third Parties and were fair and reasonable and in the interests of our Shareholders as a whole.

PROPERTY INTERESTS AND PROPERTY VALUATION

Our Directors confirm that, as at 30 September 2020, there were no circumstances that would give rise to a disclosure requirement under Rules 8.01 to 8.36 of the GEM Listing Rules. As at 30 April 2021, our property interests do not form part of our property activities and no single property interest that forms part of our non-property activities has a carrying amount of 15% or more of our total assets.

MATERIAL ADVERSE CHANGE

Save as disclosed in the section headed ‘‘Summary — Recent Development and Material Adverse Change’’ in this document regarding the outbreak of COVID-19, and as far as we are aware, there had not been material changes in the overall economic and market conditions that would otherwise have material and adverse effect on our business operations or financial conditions. Our Directors confirmed that, up to the date of this document and save as the disclosed above, there has been no material adverse change in our financial or trading position or would materially affect the information in our consolidated financial statements set forth in Appendix I to this document.

NO DISCLOSURE REQUIRED UNDER THE GEM LISTING RULES

Our Directors have confirmed that as at the Latest Practicable Date, there were no circumstances which, had our Group been required to comply with Rules 17.15 to 17.21 of the GEM Listing Rules, would have given rise to a disclosure requirement under Rules 17.15 to 17.21 of the GEM Listing Rules.

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

BUSINESS OBJECTIVES AND STRATEGIES

Please see ‘‘Our Business — Our strategies’’ in this document for our business objectives and strategies.

[REDACTED]

Basedonthe[REDACTED] of HK$[REDACTED] per [REDACTED],beingthemid- point of the indicative [REDACTED] range of HK$[REDACTED] to HK$[REDACTED] per [REDACTED], the net [REDACTED] from the [REDACTED] are estimated to be approximately HK$[REDACTED] after deducting the related [REDACTED] fees and estimated expenses in connection with the [REDACTED]. Our Directors intend to apply to such net [REDACTED] as follows:

Hong Kong Estimated cost (HK$’000)

Hiring of two sales managers in the Hong Kong sales office to handle the sales orders and diversify our product offerings for 24 months [REDACTED]

Total: [REDACTED]

The amount allocated to the hiring of a sales manager in the Hong Kong sales officeisbasedonmarketdataoftheaverage salary for a similar role with similar level of experience in Hong Kong.

Singapore Estimated cost (HK$’000)

(1) Rent and decoration of a new sales office — Rental costs of an office with GFA not exceeding 1,600 sq.m for the first 24 months [REDACTED] — Leasehold improvements, furniture and office equipment [REDACTED] — Rental and utilities deposit [REDACTED] (2) Hiring of two staff comprising of one senior sales manager and one administrative and accounting staff — One senior sales manager for 24 months [REDACTED] — One administrative and accounting staff for 24 months [REDACTED] (3) Rent of berth for yacht demonstration for 24 months [REDACTED]

Total: [REDACTED]

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

The amount allocated to rent and decoration of a new sales office is based on the average monthly rental for several rental properties in Singapore which our Group has obtained quotation from. The allocation of two staff in the Singapore office is based on market data of the average salary a similar role with similar level of experience in Singapore. For berth rental, our Group has obtained quotations from marinas/yacht clubs in Singapore.

Guangdong Province, the PRC Estimated cost (HK$’000)

(1) Rent and decoration of a new sales office in Shenzhen — Rental costs of an office with GFA not exceeding 300 sq.m for the first 18 months [REDACTED] — Leasehold improvements, furniture and office equipment [REDACTED] — Rental and utilities deposit [REDACTED] (2) Hiring of one sales manager and one administrative staff — Onesalesmanagerfor18months [REDACTED] — One administrative staff for 18 months [REDACTED] (3) Rent of berth for yacht demonstration for 12 months [REDACTED]

Total: [REDACTED]

The amount allocated to rent and decoration of a new sales office is based on the average monthly rental for several rental properties in Shenzhen, the PRC which our Group has obtained quotation from. The allocation of two staff in the office in Shenzhen, PRC, is based on market data of the average salary a similar role with similar level of experience in Shenzhen, the PRC. For berth rental, our Group has obtained quotations from marinas/yacht clubs in Guangdong Province in the PRC.

Hainan Province, the PRC Estimated cost (HK$’000)

(1) Rent and decoration of a new sales office — Rental costs of an office with GFA not exceeding 300 sq.m for the first 18 months [REDACTED] — Rental and utilities deposit [REDACTED] (2) Hiring of two staff comprising of one senior sales manager and one administrative and accounting staff — One senior sales manager for 18 months [REDACTED] — One administrative and accounting staff for 18 months [REDACTED] (3) Rent of berth for yacht demonstration for 12 months [REDACTED]

Total: [REDACTED]

–273– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

The amount allocated to rent and decoration of a new sales office is based on the average monthly rental for several rental properties in Hainan Province in the PRC which our Group has obtained quotation from. The allocation for two staff in the office in Hainan Province in the PRC, is based on market data of the average salary a similar role with similar level of experience in Hainan Province in the PRC. For berth rental, our Group has obtained quotations from marinas/ yacht clubs in Hainan Province in the PRC.

. Approximately [REDACTED]%, or HK$[REDACTED], will be used to diversify our product offerings and invest in demonstration yachts to boost our sale;

Purchase of demonstration yachts Estimated cost (HK$’000)

(1) Approximately 50% deposit for purchase of a demonstration luxury motor yacht to be showcased in Singapore [REDACTED] (2) Approximately 50% deposit for purchase of a demonstration super yacht to be showcased in Hong Kong, multiple Great Bay Area locations as well as Hainan Province in the PRC [REDACTED]

[REDACTED]

The amount allocated to the deposit for purchasing a demonstration luxury motor yacht and a demonstration super yacht is based on the price list provided by our Group’s suppliers.

–274– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

. Approximately [REDACTED]%, or HK$[REDACTED], will be used to enhance our brand recognition through effective marketing strategies:

Marketing strategies Estimated cost (HK$’000)

(1) Participating in two additional boat shows in Hong Kong, one per year for two years [REDACTED] (2) Marketing and advertising through digital industry magazines in Singapore for 24 months [REDACTED] (3) Participating in two additional boat shows in Singapore, one per year for two years [REDACTED] (4) Marketing and advertising through digital industry magazines in Guangdong Province in the PRC for 24 months [REDACTED] (5) Participating in three additional boat shows in Guangdong Province in the PRC, one and two in the first and second year, respectively [REDACTED]

Total: [REDACTED]

. Approximately [REDACTED]%, or HK$[REDACTED], will be used as general working capital

The amount allocated to our Group’s marketing strategies is based on historical marketing carried out by our Group as well as estimated budget plans prepared by our marketing staff.

IMPLEMENTATION PLAN

In order to achieve the aforementioned business objectives, we set forth below our implementation plans for each of the six-month periods from 1 September 2021 to 31 August 2023. Investors should note that our implementation plans are formulated on the basesandassumptionsreferredtointheparagraphunder‘‘Basesandassumptions’’inthis section below.

These bases and assumptions are inherently subject to many uncertainties and unpredictable factors, in particular the risk factors as set out in the section headed ‘‘Risk factors’’ in this document. Therefore, there is no assurance that our Group’s business plans will materialise in accordance with the estimated time frame and that our Group’s future plans will be accomplished at all.

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

(a) From 1 September 2021 to 28 February 2022

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

Further expand our Hong Kong [REDACTED] market share in Hong Kong and extend our — Hiring two sales managers in footprint into Hong Kong sales office to handle Singapore and the sales orders and diversify our Guangdong Province product offerings andHainanProvince in the PRC Singapore [REDACTED]

— Rent and decoration of a new sales office and payment of utilities deposit

— Hiring of two staff comprising of one senior sales manager and one administrative and accounting staff

— Rentofberthforyacht demonstration

Diversify our product — Approximately 50% deposit for [REDACTED] offerings and invest purchase of a demonstration in demonstration luxury motor yacht to be yachts to boost our showcased in Singapore sales

Enhance our brand — Marketing and advertising [REDACTED] recognition through through digital industry effective marketing magazines in Singapore strategies — Marketing and advertising through digital industry magazine in Guangdong Province, the PRC

— Participating in a boat show in Guangdong Province, the PRC

General working [REDACTED] capital

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

(b) From 1 March 2022 to 31 August 2022

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

Further expand our Hong Kong [REDACTED] market share in Hong Kong and extend our — Salaries for two sales managers in footprint into Hong Kong sales office Singapore and Guangdong Province Singapore [REDACTED] andHainanProvince in the PRC — Rentofanewsalesoffice

— Salaries for two staff comprising of one senior sales manager and one administrative and accounting staff

— Rentofberthforyacht demonstration

Guangdong Province, the PRC [REDACTED]

— Rent and decoration of a new sales office in Shenzhen and payment of utilities deposit

— Hiring of one sales manager and one administrative staff

— Rentofberthforyacht demonstration

— Purchase of property, plant and equipment

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

Hainan Province, the PRC [REDACTED]

— Rent and decoration of a new sales office and payment of utilities deposit

— Hiring of two staff comprising of one senior sales manager and one administrative and accounting staff

— Rentofberthforyacht demonstration

Diversify our product — Approximately 25% deposit for [REDACTED] offerings and invest purchase of a demonstration in demonstration super yacht to be showcased in yachts to boost our Hong Kong and multiple Great sales BayArealocationaswellas Hainan Province, the PRC

— Hiring of a sales manager in Hong [REDACTED] Kong sales office to handle the sales orders and diversify our product offerings

–278– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

Enhance our brand — Marketing and advertising [REDACTED] recognition through through digital industry effective marketing magazines in Singapore strategies — Participating in a boat show in Singapore

— Marketing and advertising through digital industry magazine in Guangdong Province, the PRC

— Participating in a boat show in Guangdong Province, the PRC

— Participating in a boat show in Hong Kong

General working [REDACTED] capital

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

— Salaries for two staff comprising of one senior sales manager and one administrative and accounting staff

— Rentofberthforyacht demonstration

Guangdong Province, the PRC [REDACTED]

— Rentofanewsalesofficein Shenzhen

— Salaries for one sales manager and one administrative staff

— Rent of yacht for yacht demonstration

Hainan Province, the PRC [REDACTED]

— Rentofanewsalesoffice

— Salaries for two staff comprising of one senior sales manager and one administrative and accounting staff

— Rental of berth for yacht demonstration

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

— Participating in a boat show in Guangdong Province in the PRC

General working [REDACTED] capital

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

(d) From 1 March 2023 to 31 August 2023

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

— Salaries for two staff comprising of one senior sales manager and one administrative and accounting staff

— Rentofberthforyacht demonstration Guangdong Province, the PRC [REDACTED]

— Rentofanewsalesofficein Shenzhen

— Salaries for one sales manager and one administrative staff

Hainan Province, the PRC [REDACTED]

— Rent and decoration of a new sales office

— Salaries for two staff comprising of one senior sales manager and one administrative and accounting staff

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

Net [REDACTED] from the Business Strategies Implementation activities [REDACTED] HK$’000

— Marketing and advertising through digital industry magazine in Guangdong Province, the PRC

— Participating in a boat show in Guangdong Province, the PRC

— Participating in a boat show in Hong Kong

General working [REDACTED] capital

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

From the period from the 1 September 2021 to 31 August 2023, our Group’s net [REDACTED] from the [REDACTED] will be used as follows:

1September For the six For the six For the six Approximate 2021 to months ending months ending months ending percentage of 28 February 31 August 28 February 31 August net 2022 2022 2023 2023 Total [REDACTED] HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 %

Further expand our market share in Hong Kong and extend our footprint into Singapore and Guangdong Province and Hainan Province in the PRC [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] (i) Hong Kong [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] (ii) Singapore [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] (iii) Guangdong Province, the PRC [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] (iv) Hainan Province, the PRC [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED]

Diversify our product offerings and invest in demonstration yachts to boost our sales [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED]

Enhance our brand recognition through effective marketing strategies [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] General working capital [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED]

Total [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED]

Note: The figures and percentages above have been subject to rounding adjustments and approximations.

REASONS FOR [REDACTED]

According to the Frost & Sullivan Report, our Group ranked the third in terms of the revenue generated in the year ended 30 April 2019 among the yacht dealers in Hong Kong. The yacht distribution market in Hong Kong was considered concentrated for the year ended 30 April 2019 in terms of revenue with top five yacht dealers contributed towards approximately 41.2% of the entire market. Our Directors believe that our competitiveness relies on our ability to leverage on our strong dealership brands, and ramp up our scale of operations so as broaden our customer base and to solidify our market position in the territories where we are granted dealerships. To achieve this, we plan to expand our existing operating scale by utilising the [REDACTED] from the [REDACTED].

Expansion plan in strategically selected regions with strong growth potential

During the Track Record Period, substantially all of our yacht sales were made in Hong Kong and we expanded our sales network to Singapore, Taiwan and Shenzhen. In view of the strong growth potential in the yacht distribution market in the regions where we are granted with the exclusive dealership rights, our Directors envisage that there would be considerable business opportunities and growth drivers which justify our expansion plan. Our Directors consider that the investments together with the marketing efforts to be critical to our Group’s ability to fully capitalise its competitive advantage of being an exclusive dealer of Absolute and Azimut over other dealers. According to the Frost &

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

Sullivan Report, yachts are supposed to receive regular maintenance which may not be fulfilled by overseas yacht manufacturers at any time due to geographic limitations and therefore local dealers are required to provide fully integrated services. Based on our Directors’ past experience, customer confidence is extensively built with the presence of a fully integrated service hub operated by the yacht manufacturers’ exclusive local dealer in the region.

Singapore

(i) Industry outlook and demand in the yacht distribution market in Singapore

Our Group considers that there is a strong growth potential in the yacht distribution market in Singapore as (i) it is more economical for consumers in the neighbouring regions to purchase yachts in Singapore, which is a free port with visitor-friendly regulations than other non-free port countries. The expected increase in the number of high net worth individuals in the neighbouring countries such as Malaysia and Indonesia also suggests that there is a growing demand for yachts and super yachts in Singapore; (ii) The Malaysian and Indonesian government have been proactive in promoting the tourism industry in the countries. The Malaysian government has launched Integrated Promotion Plan for Malaysian Tourism while the Indonesia government has implemented visa-free policy for travelers from more than 100 countries around the world to promote further development of tourism industry. The expected booming in tourism industry in Malaysia and Indonesia indicates great potential for the yacht charter services, which in turn promotes the yacht distribution market in Singapore; (iii) the income per capita in Singapore ranked ninth globally in 2019, which indicates the high purchasing power of the consumers in Singapore. According to the Frost & Sullivan Report, it is expected that the number of high net worth individuals who could afford luxury motor yachts in Singapore will increase at a CAGR of approximately 4.2% from 2020 to 2024; (iv) the largest boat show in Asia is held annually in Singapore. Accumulated with Asia’s high net worth individuals, leading yacht manufacturers and yacht dealers, boat shows help to boost yacht sales and enlarge the downstream customer pool in Singapore.

(ii) Investment and efforts already spent by our Group

Our Group incorporated Marine Italia Singapore together with 2BY2 Yachts Italia in July 2018. The establishment of Marine Italia Singapore represents an excellent opportunity for our Group to gain market share and exposure in Singapore as well as its surrounding territories. During the Track Record Period, we completed the sale of three Azimut luxury motor yachts in Singapore. Our Directors believe that initiatives planned for expansion in Singapore must be executed immediately to avoid losing time efforts and investment spent during the Track Record Period.

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

Guangdong Province, the PRC

(i) Industry outlook and demand in the yacht distribution market in Guangdong Province in the PRC

According to the Frost & Sullivan Report, the holding quantity of yacht in the Great Bay Area gradually increased from 17,456 units in 2015 and surged to 55,396 in 2019, representing a CAGR of 33.5%. In addition, the PRC government has announced several supportive policies in recent years which are favourable to the market players in the yacht distribution market in the PRC. For instance, the PRC government announced ‘‘China (Guangdong) Pilot Free Trade Zones, Hong Kong and Macau Yacht Free Navigation Plan’’ in 2017, which allows yachts registered in Hong Kong and Macau to sail and moor in the Pearl River Delta with simplified procedures. In response to the favourable policies introduced by the PRC government in the Great Bay Area, it is expected that the holding quantity of yachts in the Great Bay Area will increase at a CAGR of 3.8% from 2020 to 2024 and drive the demand of yachts. According to the Frost & Sullivan Report, the yacht industry in Guangdong Province in the PRC and there were only a limited number of sizeable yacht manufacturing companies in Guangdong Province by the end of 2019. Our Directors consider that a local sales office in Guangdong Province in the PRC is important for us to penetrate into the local market as we can handle customers’ enquires, maintain relationship with our customers and provide services in a prompt manner. As such, our Directors believe that there is a great demand for imported yachts in Guangdong Province in the PRC, and that a new service hub in Guangdong Province in the PRC will extend our Group’s service coverage and attract customers who are looking to sail new routes in the Great Bay Area. Combining with the existing dealership office and shipyard in Hong Kong, the expansions create a network of shared service hub enjoyed by both our Group’s existing Hong Kong customers and potential PRC customers. (ii) Efforts already spent by our Group

In October 2019, we have appointed the SZ sub-dealer in Shenzhen with local market knowledge and network to better penetrate the Chinese market. During the Track Record Period, our SZ sub-dealer has completed the sales of one Azimut luxury motor yachts.

Hainan Province, the PRC

(i) Industry outlook and Demand in the yacht distribution market in Hainan Province in the PRC According to the Frost & Sullivan Report, while there were around 10 yacht clubs in Hong Kong in 2019, there were around 30 yacht clubs in 2019 in Hainan Province in the PRC. The yacht industry in Hainan Province in the PRC has experienced breakthrough since2009.Theregionhascomprehensiverelated infrastructure such as marinas, berth spaces and training institutions, and the number of yacht clubs in Hainan Province in the PRC is expected to increase in the future with supportive government policies. The PRC government has issued guidance which outlined the simplification of yachts entry to facilitate free yacht tour between Hainan Province in the PRC, Macau and Hong Kong and the construction of yacht resort town to promote the yacht industry from yacht designing, manufacturing, repair and maintenance as well as tourism. It is estimated that the holding

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED] quantity of yachts in Hainan Province in the PRC will embrace an upward trend from 2021 to 2025, at a CAGR of approximately 12.7%, which can drive the further development of yacht distribution market. Similar to the yacht industry in Guangdong Province in the PRC, according to the Frost & Sullivan Report, there are only a limited number of sizeable yacht manufacturing companies in Hainan Province in the PRC by the end of 2019. As such, we believe that there is a great demand for imported yachts in Hainan Province in the PRC. (ii) Support from Azimut in the expansion plan in Hainan Province in the PRC Having considered the strong growth potential in Hainan Province in the PRC, our Group has negotiated with Azimut to expand our exclusive dealership rights to deal with their products to Hainan Province in the PRC. Given our stable relationship with Azimut and our proven track record, Azimut has been supportive and agreed to grant exclusive dealership right to us to sell their products in Hainan Province in the PRC subject to the [REDACTED] and the opening of the sales office in Sanya in Hainan Province in the PRC, ordering of a demonstration yacht for sales and conducting marketing activities in the region. Our Directors consider that our Group is presented with an excellent business opportunity to penetrate into the yacht distribution market in Hainan Province in the PRC which is only viable upon achieving the [REDACTED] status. Funding needs for implementing our business plan to capture more market share in the industry

(i) The need to solidify our market position in the territories where we are granted dealerships in view of the competitive yacht distribution industry

Our Group has maintained stable relationships with our suppliers. This is demonstrated by the granting of authorisation to deal with yachts of both Absolute and Azimut and the exceptional five-year exclusive dealership agreement entered into with our Group, as opposed to the market norm for the yacht manufacturers to renew the contract with their exclusive yacht dealer on an annualbasisbasedonthesalesperformanceofthe yacht dealer.

To maintain our competitiveness in the market, we need to leverage on our strong dealership brands and solidify our market position in the territories where we are granted dealerships. Our Directors recognise the need for further capital to ramp up our scale of operations so as to broaden our customer base in these territories, which in turn will maintain our leading position in the yacht distribution market which is competitive and concentrated as we compete with dealerships that offer other international renowned and competing brands of luxury motor yachts. The [REDACTED] status will demonstrate to our suppliers our future financial capability and ability to attract talents, which is beneficial for us to renew our existing five-year exclusive dealership agreements with them upon the expiry of the agreements and to obtain exclusive dealership rights in more territories. We will also be placed in a better position to expand our supplier base and negotiate with other yacht manufacturers and boating companies which do not compete with our existing brands. As suppliers are more willing to establish business relationship with listed companies, [REDACTED] is an effective way to improve our bargaining power.

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

(ii) The importance of a demonstration yacht to promote sales

Our Directors consider that yacht demonstration is important in the sales of yachts, especially for the sales of luxury motor yachts including super yachts and new models are launched from time to time. Customers are more inclined to purchase a luxury motor yacht including super yacht if they can physically inspect and get access to the yachts rather than merely read through the product brochures. This also coheres with our previous experience in the sales of luxury motor yachts in Hong Kong where we managed to sell a new yacht with the purchase of a demonstration yacht of the same model to showcase to our customers. Unlike Hong Kong where we can borrow yachts from our customers for displaying to our potential customers, we do not have an established customer base in Singapore. Our Directors consider that the demonstration yacht is crucial for us to further expand our sales of yachts in Singapore.

(iii) Higher profit margin in the sales of super yachts providing more options to our customers

As a super yacht is larger in size among all categories of luxury motor yacht, there are more variations and more tailor-made and add-on items such as electronic equipment, furniture and engineering devices can fit in a super yacht. For instance, the demonstration super yacht Azimut Grande 25M which our Group intends to purchase offers a more comprehensive range of add-on items for our customers’ selection with an aggregate value of approximately HK$14 million, whereas a smaller luxury motor yacht offers fewer add-on items for our customers’ selection with an aggregate value of approximately HK$8.5 million. With more available tailor-made and add-on items, the profit margin of a super yacht is typically higher than that of a luxury motor yacht. The sale of super yachts can also diversify our product offerings and meet our customers’ various demands.

Need for [REDACTED] from the [REDACTED] and internal resources of our Group to fund our business strategies

(i) Our current available cash resources

As at 30 April 2021, our bank balances and cash, which represent our immediately available working capital, amounted to approximately HK$39.7 million. Our Directors consider that the amount of our bank balances and cash fluctuates from time to time, depending largely on the timing of (i) payment from our customers; (ii) payment to our suppliers; (iii) the level of inventories. Therefore, the amount of bank balances as at a particular date may not fully reflect our general liquidity position.

From a prudent financial management perspective, our Directors consider that our Group should constantly maintain a sufficient amount of immediately available cash resources for our daily operations and our liquidity needs in case of unforeseen circumstances.

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

(ii) Our current facilities

Our Directors confirm that based on the past experience and negotiations with banks and financial institutions in Hong Kong, our Group is unable to obtain secured borrowings collateralised by our yachts for sales unless they have physically arrived in Hong Kong. As such, our demonstration yacht purchases are generally financed internally from operating funds. Our Group has in the past, obtained loan borrowings to finance yacht purchases from other sources where the interest rate offered is much higher than secured loans extended by financial institutions.

As our Group operates in a capital intensive industry, there is a genuine funding need to support our expansion plan through the [REDACTED]. The sole reliance on internal funding will, in the view of our Directors, impose constraints to implement our business strategies. Our Directors estimate that we will be capable to allocate approximately HK$[21.9] million from our internal resources to fund our business strategies. If our Group proceeds with the [REDACTED], our Group will be able to fund our expansion plans with an addition of HK$[REDACTED] representing the net [REDACTED] from the [REDACTED]. Our Directors consider that it is of utmost importance for us to obtain sufficient funding to cope with our future expansion and further grow our business.

In case where our future plans are only funded with internal sources without the [REDACTED], our Group will not be able to fulfill Azimut’s conditions in granting the exclusive dealership rights of Azimut yachts in Hainan Province in the PRC and will need to abandon our plans to expand in Hainan Province in the PRC. Our Group will not have sufficient funds to purchase the demonstration super yacht Azimut Grande 25M which suggested retail price is more than HK$35.0 million. Our expansion plan in Guangdong Province in the PRC will also be in a much-reduced scale due to limited source of funds from our operations.

Our Directors believe that executing all expansion plans simultaneously is critical to our Group’s success. Losing the above opportunities will also be heavily detrimental to our Group’s potential long-term growth, operating results and profits but more importantly our Group’s position against competitors in other Asian regions.

Other reasons for [REDACTED]

In addition to the above, our Directors believe that further commercial rationale for [REDACTED] includes:

. Strengthen our Group’s corporate profile, credibility and competitiveness: We believe that both our customers and suppliers prefer working with business partners which are listed companies given their reputation, corporate governance and listing status. By way of [REDACTED], we can elevate our corporate image and status and strengthen confidence of our customers and suppliers, which in turn provides a more level playing field when we explore new business opportunities with our customers and suppliers. Moreover, the additional financial resources from the [REDACTED] will enable us to further consolidate

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

our financial strength and enhance our capacity and efficiency in serving customers. Our Directors believe that this can fuel our business growth in a much faster pace and improve our market competitiveness;

. Gain access to capital market: The [REDACTED] will broaden our shareholder base and enhance our access to capital for future growth with opportunities to raise funds. Our Directors confirm that based on past experience and negotiations with financial institutions in Hong Kong, our Group is unable to obtain secured borrowings collateralised by our luxury yachts for sale unless they have physically arrived in Hong Kong. Our luxury yacht purchases are therefore financed internally from operating funds or client deposits in general. Therefore, our Directors are of the view that fund-raising through [REDACTED] will reduce our financing costs and increase our financial strength;

. Enhance our operational efficiency and corporate governance: We believe that our operational efficiency and corporate governance will be improved through compliance with rigorous disclosure standards which would further enhance our internal control and risk management; and

. Enhance employee incentive and commitment: Human resources and talents are vital to our business. The status of being a listed company can help us strengthen our manpower and attract, recruit and retain our valued management personnel and skilled employees and provide additional incentive.

BASIS AND KEY ASSUMPTIONS

Potential investors should note that the attainability of our Group’s business objectives and strategies depends on a number of assumptions, in particular:

. there will be no material changes in the existing political, legal, fiscal, social or economic conditions in Hong Kong, the PRC or in any other places in which any member of our Group carries on its business or will carry on its business;

. our Group will have sufficient financial resources to meet the planned capital expenditure and business development requirements during the period to which the business objectives relate;

. there will be no material changes in the bases or rates of taxation in Hong Kong, the PRC or in any other places in which any member of our Group operates or will operate;

. there will be no material changes in legislation or regulations whether in Hong Kong or elsewhere materially affecting the business carried on by our Group;

. there will be no significant changes in our Group’s business relationship with our existing strategic and business partners;

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STATEMENT OF BUSINESS OBJECTIVES AND [REDACTED]

. there will be no significant changes in our Group’s business relationship with our major customers;

. there will be no material changes in the funding required for each of the scheduled achievements as outlined under the paragraph headed ‘‘Implementation plans’’ in this section; and

. our Group will not be materially affected by the risk factors as set out in the sectionheaded‘‘Riskfactors’’inthisdocument.

If the final [REDACTED] is set at the highest point of the indicative [REDACTED] range, the net [REDACTED] from the [REDACTED] of new Shares under the [REDACTED] to be received by us is estimated to increase to approximately HK$[REDACTED]. We intend to apply such additional net [REDACTED] to the above proposed usage items in the same proportions as disclosed above. If the [REDACTED] is determined at the lowest point of the indicative [REDACTED] range, the net [REDACTED] from the issue of new Shares under the [REDACTED] to be received by us is estimated to decrease to approximately HK$[REDACTED].Insuchacase,weintendtoreducethe allocation of such net [REDACTED] for the above purposes in the same proportions as disclosed above.

The use of our [REDACTED] outlined above may change in light of our evolving business needs, conditions and management requirements as well as prevailing market circumstances. In the event of any material modification to the [REDACTED] as described above, we will issue an announcement and make disclosure in our annual report for the relevant year as required under the GEM Listing Rules.

To the extent that the net [REDACTED] from the issue of new Shares under the [REDACTED] are not immediately required for or applied to the above purposes, it is the present intention of our Directors that such [REDACTED] will be placed in short-term interest bearing deposits held with authorised financial institutions in Hong Kong.

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

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[REDACTED]

[REDACTED] interests in our Group

Save for their respective obligations under the [REDACTED] and the [REDACTED] or as otherwise disclosed in this document, as of the Latest Practicable Date, none of the [REDACTED] was interested directly or indirectly in any of our Shares or securities or any shares or securities of any other member of our Group or had any right or option (whether legally enforceable or not) to subscribe for, or to nominate persons to subscribe for, any of our Shares or securities or any shares or securities of any other member of our Group.

Following the completion of the [REDACTED],the[REDACTED] and their affiliated companies may hold a certain portion of our Shares as a result of fulfilling their respective obligations under the [REDACTED] and [REDACTED].

The Sole Sponsor’s Independence

The Sole Sponsor satisfies the independence criteria applicable to sponsors set out in Rule 6A.07 of the GEM Listing Rules.

[REDACTED]

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[REDACTED]

Total Commission and Expenses

We will pay the [REDACTED] (for itself and on behalf of the other [REDACTED])an [REDACTED] commission of [REDACTED]% of the aggregate [REDACTED] of the [REDACTED] initially [REDACTED] under the [REDACTED] (excluding any [REDACTED] reallocated to the [REDACTED] and any [REDACTED] reallocatedtothe [REDACTED]),outofwhichthe[REDACTED] will pay all [REDACTED] commission, if any. For unsubscribed [REDACTED] reallocatedtothe[REDACTED], we will pay an [REDACTED] commission at the rate applicable to the [REDACTED] and such commission will be paid to the [REDACTED] and the relevant [REDACTED], but not the [REDACTED]. In addition, we may, at our discretion, pay to the [REDACTED] an additional incentive fee of up to [REDACTED]% of the aggregate [REDACTED] of the [REDACTED] from the [REDACTED], including [REDACTED] from the exercise of the [REDACTED].

Assuming the [REDACTED] is not exercised and based on an [REDACTED] of HK$[REDACTED] (being the mid-point of the stated range of the [REDACTED] between HK$[REDACTED] and HK$[REDACTED]), the aggregate commissions and estimated expenses, together with the Stock Exchange [REDACTED] fee, SFC transaction levy, Stock Exchange trading fee, legal and other professional fees, printing and other fees and expenses relating to the [REDACTED], are estimated to amount in aggregate to HK$[REDACTED] in total and are payable by us.

[REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

[REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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STRUCTURE AND CONDITIONS OF THE [REDACTED]

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HOW TO APPLY FOR [REDACTED]

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HOW TO APPLY FOR [REDACTED]

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HOW TO APPLY FOR [REDACTED]

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HOW TO APPLY FOR [REDACTED]

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HOW TO APPLY FOR [REDACTED]

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HOW TO APPLY FOR [REDACTED]

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APPENDIX I ACCOUNTANT’S REPORT

The following is the text of a report set out on pages [I-1] to [I-3], received from the Company’s reporting accountant, Grant Thornton Hong Kong Limited, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this document. It is prepared and addressed to the directors of the Company and to the Sole Sponsor pursuant to the requirements of HKSIR 200 ‘‘Accountants’ Reports on Historical Financial Information in Investment Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants.

ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORSOFMARINEINTERNATIONAL HOLDINGS LIMITED AND KINGSWAY CAPITAL LIMITED

Introduction

We report on the historical financial information of Marine International Holdings Limited (the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’) set out on pages [I-4] to [I-63], which comprises the consolidated statements of financial position as at 30 April 2019, 2020 and 2021, the statements of financial position of the Company as at 30 April 2019, 2020 and 2021, and the consolidated statements of profit or loss and other comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows for each of the years ended 30 April 2019, 2020 and 2021 (the ‘‘Track Record Period’’) and a summary of significant accounting policies and other explanatory information (together, the ‘‘Historical Financial Information’’). The Historical Financial Information set out on pages [I-4] to [I-63] forms an integral part of this report, which has been prepared for inclusion in the document of the Company dated [date] (the ‘‘Document’’) in connection with the initial [REDACTED] of shares of the Company on GEM of The Stock Exchange of Hong Kong Limited.

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of the Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information, and for such internal control as the directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 ‘‘Accountants’ Reports on Historical Financial Information in Investment Circulars’’ issued by the Hong Kong

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APPENDIX I ACCOUNTANT’S REPORT

Institute of Certified Public Accountants (‘‘HKICPA’’). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountant’s judgment, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountant considers internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

[In our opinion, the Historical Financial Information gives, for the purpose of the accountant’s report, a true and fair view of the financial position of the Company as at 30 April 2019, 2020 and 2021 and the consolidated financial position of the Group as at 30 April 2019, 2020 and 2021 and of its consolidated financial performance and cash flows for the Track Record Period in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.]

REPORT ON MATTERS UNDER THE RULES GOVERNING THE LISTING OF SECURITIES ON GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE ‘‘LISTING RULES’’) AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page [I-4] have been made.

Dividends

We refer to Note 11 to the Historical Financial Information which contains information about the dividends paid by the Company in respect of the Track Record Period.

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APPENDIX I ACCOUNTANT’S REPORT

No statutory financial statements for the Company

No statutory financial statements have been prepared for the Company since its date of incorporation.

Grant Thornton Hong Kong Limited Certified Public Accountants Level 12 28 Hennessy Road Wanchai Hong Kong

[Date]

[Name of signing partner] [Practising Certificate No.: [‧]]

I. HISTORICAL FINANCIAL INFORMATION

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountant’s report.

The consolidated financial statements of the Group for the Track Record Period, on which the Historical Financial Information is based, were audited by Grant Thornton Hong Kong Limited in accordance with Hong Kong Standards on Auditing issued by the HKICPA (‘‘Underlying Financial Statements’’).

The Historical Financial Information is presented in Hong Kong dollars (‘‘HK$’’) and all values are rounded to the nearest thousand (HK$’000) except when otherwise indicated.

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APPENDIX I ACCOUNTANT’S REPORT

(A) CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Year ended 30 April 2019 2020 2021 Notes HK$’000 HK$’000 HK$’000

Revenue 4 246,710 253,575 461,237 Cost of sales (212,563) (214,602) (403,264)

Gross profit 34,147 38,973 57,973 Other income 5 280 810 2,262 Other net (loss)/gain 6 (1,078) 397 2,168 Selling and marketing expenses (3,538) (6,096) (3,763) Administrative expenses (18,329) (19,228) (21,630) [REDACTED] [REDACTED] [REDACTED] [REDACTED] Finance costs 7 (614) (817) (1,591)

Profit before income tax 8 522 7,640 32,909 Income tax expense 10 (1,725) (2,407) (5,632)

(Loss)/Profit for the year (1,203) 5,233 27,277

Other comprehensive (loss)/income Items that may be subsequently reclassified to profit or loss Exchange differences on translation of financial statements of overseas subsidiaries (5) 80 (111)

Total comprehensive (loss)/income for the year (1,208) 5,313 27,166

(Loss)/Profit for the year attributable to: Owners of the Company (747) 5,520 27,345 Non-controlling interests (456) (287) (68)

(1,203) 5,233 27,277 Total comprehensive (loss)/income for the year attributable to: Owners of the Company (750) 5,572 27,273 Non-controlling interests (458) (259) (107)

(1,208) 5,313 27,166

(Loss)/Earnings per share attributable to owners of the Company: (Expressed in HK cents per share) Basic and diluted 12 N/A N/A N/A

The Group initially applied HKFRS 16 at 1 May 2019, using the modified retrospective approach. Under this approach, comparative information is not restated. SeeNote2.2.

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APPENDIX I ACCOUNTANT’S REPORT

(B) CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at 30 April 2019 2020 2021 Notes HK$’000 HK$’000 HK$’000 ASSETS AND LIABILITIES Non-current assets Property, plant and equipment 14 5,378 5,190 2,781 Intangible assets 16 800 — — Deferred tax assets 26 59 593 596 6,237 5,783 3,377 Current assets Inventories 17 49,183 51,150 16,222 Trade and other receivables 18 61,633 23,859 167,907 Amounts due from directors 19 2,589 5,929 12,426 Amount due from a non-controlling shareholder 20 15,417 737 737 Bank balances and cash 21 8,241 22,937 39,714 137,063 104,612 237,006 Current liabilities Trade and other payables 22 109,978 45,459 179,889 Lease liabilities 23 — 1,499 902 Amount due to a director 19 253 111 117 Amount due to a non-controlling shareholder 20 — 744 848 Current tax liabilities 1,917 1,520 4,923 Borrowings 24 — 36,484 2,316 Convertible bonds 25 — 8,259 8,073 112,148 94,076 197,068 Net current assets 24,915 10,536 39,938 Total assets less current liabilities 31,152 16,319 43,315 Non-current liabilities Convertible bonds 25 7,834 — — Lease liabilities 23 — 688 518 7,834 688 518 Net assets 23,318 15,631 42,797 EQUITY Share capital 27 —* —* —* Reserves 27 23,675 16,247 43,520 Equity attributable to owners of the Company 23,675 16,247 43,520 Non-controlling interests (357) (616) (723) Total equity 23,318 15,631 42,797

* Less than HK$1,000.

The Group initially applied HKFRS 16 at 1 May 2019, using the modified retrospective approach. Under this approach, comparative information is not restated. SeeNote2.2.

–I-5– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

As at 30 April 2019 2020 2021 Notes HK$’000 HK$’000 HK$’000

ASSETS AND LIABILITIES Non-current assets Investment in subsidiaries 15 31,607 21,104 31,607

Current assets Other receivables 18 21,471 34,293 39,818

Current liabilities Other payables 22 12,286 31,507 40,113 Convertible bonds 25 — 8,259 8,073

12,286 39,766 48,186

Net current assets/(liabilities) 9,185 (5,473) (8,368)

Total assets less current liabilities 40,792 15,631 23,239

Non-current liabilities Convertible bonds 25 7,834 — —

Net assets 32,958 15,631 23,239

EQUITY Share capital 27 —* —* —* Reserves 27 32,958 15,631 23,239

Total equity 32,958 15,631 23,239

* Less than HK$1,000.

The Group initially applied HKFRS 16 at 1 May 2019, using the modified retrospective approach. Under this approach, comparative information is not restated. SeeNote2.2.

–I-6– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

(D) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Attributable to owners of the Company Non- Share Capital Translation Convertible Retained controlling Total capital reserve reserve bonds reserve earnings Total interests equity HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Note 27(a)) (Note 27(b)) (Note 27(b)) (Note 27(b))

Balance at 1 May 2018 20 — — — 33,035 33,055 — 33,055

Total comprehensive loss for the year —Lossfortheyear ————(747)(747) (456) (1,203) — Other comprehensive loss for the year Exchange differences on translation of financial statements of overseas subsidiaries — — (3) — — (3) (2) (5)

Total comprehensive loss — — (3) — (747) (750) (458) (1,208)

Transactions with owners — Capital contribution from a non-controllingshareholder——————101101 — Effect on equity arising from Reorganisation (Note 27(b)) (20)20— ————— — Issue of convertible bonds (Note 25) — — — 370 — 370 — 370 —Dividendpaid(Note 11) ————(9,000)(9,000)—(9,000)

Total transactions with owners (20) 20 — 370 (9,000) (8,630) 101 (8,529)

Balance at 30 April 2019 and 1 May 2019 —* 20 (3) 370 23,288 23,675 (357) 23,318

Total comprehensive income/(loss) for the year —Profit/(Loss)fortheyear————5,5205,520(287)5,233 — Other comprehensive income for the year Exchange differences on translation of financial statements of overseas subsidiaries — — 52 — — 52 28 80

Total comprehensive income/(loss) — — 52 — 5,520 5,572 (259) 5,313

Transactions with owners —Dividendpaid(Note 11) ————(13,000)(13,000)—(13,000)

Totaltransactionswithowners ————(13,000)(13,000)—(13,000)

Balance at 30 April 2020 —* 20 49 370 15,808 16,247 (616) 15,631

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APPENDIX I ACCOUNTANT’S REPORT

Balance at 1 May 2020 —* 20 49 370 15,808 16,247 (616) 15,631

Total comprehensive income/(loss) for the year — Profit/(Loss) for the year — — — — 27,345 27,345 (68) 27,277 — Other comprehensive loss for the year Exchange differences on translation of financial statements of overseas subsidiaries — — (72) — — (72) (39) (111)

Total comprehensive (loss)/income — — (72) — 27,345 27,273 (107) 27,166

Balance at 30 April 2021 —* 20 (23) 370 43,153 43,520 (723) 42,797

* Less than HK$1,000.

The Group initially applied HKFRS 16 at 1 May 2019, using the modified retrospective approach. Under this approach, comparative information is not restated. SeeNote2.2.

–I-8– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

(E) CONSOLIDATED STATEMENTS OF CASH FLOWS

Yearended30April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Cash flows from operating activities Profit before income tax 522 7,640 32,909 Adjustments for: Depreciation of property, plant and equipment — owned assets 1,519 2,401 1,751 — right-of-use assets — 1,404 1,644 Loss/(Gain) on disposal of property, plant and equipment 4 — (4,341) Gain on disposal of intangible assets — (400) — Gain on modification of convertible bonds — — (138) Allowance for inventories 100 1,386 — ECL allowance recognised, net 118 397 275 Interest expenses 614 817 1,591

Operating profit before working capital changes 2,877 13,645 33,691 Decrease in inventories 24,223 14,252 49,928 (Increase)/Decrease in trade and other receivables (7,564) 56,415 (136,310) (Decrease)/Increase in trade and other payables (2,800) (72,881) 109,254 Increase in amount due to a non-controlling shareholder — 744 104

Cash generated from operations 16,736 12,175 56,667 Income taxes paid (6,093) (3,352) (2,219)

Net cash from operating activities 10,643 8,823 54,448

Cash flows from investing activities Purchase of property, plant and equipment (513) (72) (1,251) Proceeds from disposal of property, plant and equipment 4 — 5,502 Proceeds from disposal of intangible assets — 1,200 — Increase in amounts due from directors (1,326) (4,133) (6,497) Increase in amount due from a non- controlling shareholder (15,417) (8,501) —

Netcashusedininvestingactivities (17,252) (11,506) (2,246)

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APPENDIX I ACCOUNTANT’S REPORT

Yearended30April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Cash flows from financing activities Capital contribution from the owners and a non-controlling shareholder 101 — — Proceeds from issue of convertible bonds 8,000 — — Proceeds from borrowings 18,900 14,300 10,000 Repayment of borrowings (18,900) (5,278) (42,230) Payment of lease liabilities — (1,486) (1,742) Interest paid (410) (272) (1,552) Increase in amount due to a director 52 10,832 6 Payment for deferred [REDACTED] cost [REDACTED] [REDACTED] [REDACTED]

Net cash from/(used in) financing activities 5,499 17,486 (36,730)

Net (decrease)/increase in cash and cash equivalents (1,110) 14,803 15,472 Cash and cash equivalents at beginning of year 9,356 8,241 22,937 Effect for foreign exchange rate changes (5) (107) 1,305

Cash and cash equivalents at end of year, represented by bank balances and cash 8,241 22,937 39,714

The Group initially applied HKFRS 16 at 1 May 2019, using the modified retrospective approach. Under this approach, comparative information is not restated. SeeNote2.2.

–I-10– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. GENERAL INFORMATION, REORGANISATION AND BASIS OF PRESENTATION

1.1 General information

Marine International Holdings Limited (the ‘‘Company’’) was incorporated in the Cayman Islands on 16 October 2018 as an exempted company with limited liability under the Companies Act, Cap. 22 (Act 3 of 1961 as consolidated and revised) of the Cayman Islands. The address of the Company’s registered office is Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

The Company is an investment holding company and its subsidiaries (collectively, the ‘‘Group’’) are principally engaged in the sale of luxury yachts and related components and the provision of yacht delivery arrangement, repair and maintenance and introductory services (the ‘‘[REDACTED] Business’’).

1.2 Reorganisation

Prior to the incorporation of the Company, the [REDACTED] Business was carried out by Marine Italia Limited (‘‘MIL’’), Absolute Marine Limited (‘‘AML’’) and Marinetec Limited (‘‘MTL’’) (collectively, the ‘‘Operating Companies’’). The Operating Companies were jointly held by and under the common control of Mr. Paul Jonathan Grange (‘‘Mr. Grange’’) and Mr. Thomas Woo (‘‘Mr. Woo’’) (collectively, the ‘‘Controlling Shareholders’’) throughout the Track Record Period.

In preparation for the [REDACTED] of the Company’s share on GEM of The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’), the Group underwent a group reorganisation (the ‘‘Reorganisation’’) pursuant to which the companies engaged in the [REDACTED] Business were transferred to the Company. The Reorganisation involved the followings:

(a) Bright Emerald Enterprises Limited (‘‘Bright Emerald’’), the holding vehicle of Mr. Grange and Mr. Woo, was incorporated in the British Virgin Islands (‘‘BVI’’) with limited liability on 2 August 2018. One fully paid ordinary share was issued and allotted to each of Mr. Woo and Mr. Grange at par respectively on 11 October 2018. After the aforesaid allotment and issue of shares, the entire issued share capital of Bright Emerald was owned by Mr. Grange and Mr. Woo in equal shares.

(b) The Company was incorporated on 16 October 2018 in the Cayman Islands with an authorised share capital of HK$380,000 divided into 38,000,000 shares of HK$0.01 each. At the date of incorporation, one fully paid share was allotted and issued credited as fully paid to the subscriber of the Company, which was later transferred to Bright Emerald on the same date. After the aforesaid transfer of share, the entire issued share capital of the Company was wholly-owned by Bright Emerald.

(c) Halcyon Moment Limited (‘‘Halcyon Moment’’) was incorporated on 26 July 2018 in the BVI with limited liability and is authorised to issue a maximum of 50,000 shares with a par value of US$1.00 each. One fully paid share was allotted and issued to the Company on 24 October 2018. After the aforesaid allotment and issue of share, the entire issued share capital of Halcyon Moment was wholly-owned by the Company.

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APPENDIX I ACCOUNTANT’S REPORT

(d) On 29 October 2018, Mr. Woo and Mr. Grange, as vendors, the Company, as purchaser, and Halcyon Moment, entered into a sale and purchase agreement, pursuant to which, the Company acquired (to be held through Halcyon Moment):

(i) 5,000 shares and 5,000 shares of MIL (in aggregate representing the entire issued share capital of MIL) from Mr. Woo and Mr. Grange respectively, in consideration thereof, the Company issued and allotted two shares and two shares, credited as fully paid, to Bright Emerald as directed by Mr. Woo and Mr. Grange, respectively;

(ii) 5,000 shares and 5,000 shares of MTL (in aggregate representing the entire issued share capital of MTL) from Mr. Woo and Mr. Grange respectively, in consideration thereof, the Company issued and allotted two shares and two shares, credited as fully paid, to Bright Emerald as directed by Mr. Woo and Mr. Grange, respectively; and

(iii) one share of AML (jointly owned by Mr. Woo and Mr. Grange, representing the entire issued share capital of AML) from Mr. Woo and Mr. Grange, in consideration thereof, the Company issued and allotted two shares and two shares, credited as fully paid, to Bright Emerald as directed by Mr. Woo and Mr. Grange, respectively.

In consideration of the Company assigning the 10,000 shares of MIL, 10,000 shares of MTL and one share of AML (representing the entire issued share capital of MIL, MTL and AML, respectively) to Halcyon Moment, Halcyon Moment has allotted and issued one share, credited as fully paid, to the Company.

Upon completion of the aforesaid share transfers, the Company became the holding company of the subsidiaries now comprising the Group.

Upon completion of the Reorganisation on 29 October 2018 and as at the date of this report, the Company had direct or indirect interests in the following subsidiaries:

Country/ place and date of Issued and Name of company incorporation paid-up capital Effective interest held Principal activities Note As at the As at 30 April date of 2019 2020 2021 this report

Directly held by the Company Halcyon Moment BVI/ 2 United States 100% 100% 100% 100% Investment holding (i) 26 July 2018 dollars (‘‘USD’’)

Indirectly held by the Company MIL Hong Kong/ HK$10,000 100% 100% 100% 100% Sale of yachts and related (ii) 12 May 2015 components AML Hong Kong/ HK$1 100% 100% 100% 100% Sale of yachts and related (ii) 20 January 2014 components MTL Hong Kong/ HK$10,000 100% 100% 100% 100% Provision of yacht repair (ii) 5 September 2016 and maintenance services Marine Italia Singapore Pte. Limited Singapore/ 50,000 Singapore 65% 65% 65% 65% Sale of yachts and related (iii) (‘‘MIL Singapore’’) 16 July 2018 dollars (‘‘SGD’’) components

Notes:

(i) No audited financial statements have been prepared for this entity as it is not required to issue audited financial statements under the statutory requirements of its place of incorporation.

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APPENDIX I ACCOUNTANT’S REPORT

(ii) The statutory financial statements for the year ended 30 April 2019 and 2020 were audited by Ken T.W. Ng CPA Limited. The statutory financial statements for the year ended 30 April 2021 have not yet been prepared.

(iii) The statutory financial statements of MIL Singapore for the period from 16 July 2018 (date of incorporation) to 30 April 2019 were audited by JR Chan Company. The statutory financial statements for the years ended 30 April 2020 and 2021 have not yet been prepared. Pursuant to the resolution passed on 28 October 2018, MIL Singapore has resolved to change its financial year ended from 31 December to 30 April.

All companies comprising the Group have adopted 30 April as their financial year end date.

1.3 Basis of presentation

Immediately prior to and after the Reorganisation, the [REDACTED] Business is jointly held by and under the common control of the Controlling Shareholders and is conducted through the Operating Companies. Pursuant to the Reorganisation, the [REDACTED] Business are transferred to and held by the Company. The Company has not been involved in any other business prior to the Reorganisation and do not meet the definition of a business. The Reorganisation is merely a reorganisation of the [REDACTED] Business and does not result in any changes in business substance nor in any management or the ultimate owners of the [REDACTED] Business before and after the Reorganisation. Accordingly, the Group resulting from the Reorganisation is regarded as a continuation of the [REDACTED] Business and, for the purpose of this report, the Historical Financial Information has been prepared and presented as a continuation of the financial statements of the Operating Companies, with the assets and liabilities of the Group recognised and measured at the carrying amounts of the [REDACTED] Business under the financial statements of the Operating Companies for all years presented.

Intercompany transactions, balances and unrealised gains/losses on transactions between group companies are eliminated on consolidation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the Historical Financial Information are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The Historical Financial Information has been prepared in accordance with Hong Kong Financial Reporting Standards (‘‘HKFRSs’’) which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (‘‘HKASs’’) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’) and the accounting principles generally accepted in Hong Kong. The Historical Financial Information has been prepared on the historical cost basis.

All new standards, amendments to standards and interpretations which are mandatory for the financial year beginning on or before 1 May 2020 are consistently applied to the Group throughout the Track Record Period including HKFRS 9 and HKFRS 15 and the related amendments, except for HKFRS 16 which has been initially applied on 1 May 2019. The adoption of HKFRS 9 and HKFRS 15 does not have significant impacts on the Group’s Historical Financial Information. Details of the changes in accounting policies for HKFRS 16 are discussed in Note 2.2.

–I-13– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

It should be noted that accounting estimates and assumptions are used in preparation of the Historical Financial Information. Although these estimates are based on the management’s best knowledge and judgment of current events and actions, actual results may ultimately differ from those estimates. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 3 below.

2.2 Impact of application of new and revised HKFRSs during the Track Record Period

HKFRS 16 ‘‘Leases’’

HKFRS 16 ‘‘Leases’’ replaces HKAS 17 ‘‘Leases’’ along with three Interpretations (HK(IFRIC)-Int 4 ‘‘Determining whether an Arrangement contains a Lease’’, HK(SIC)-Int 15 ‘‘Operating Leases-Incentives’’ and HK(SIC)-Int 27 ‘‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’’). HKFRS 16 has been applied using the modified retrospective approach, with the cumulative effect of adopting HKFRS 16 being recognised in equity as an adjustment to the opening balance of retained profits for the current period. Prior periods have not been restated.

For contracts in place at the date of initial application, the Group has elected to apply the definition of a lease from HKAS 17 and HK(IFRIC)-Int 4 and has not applied HKFRS 16 to arrangements that were previously not identified as lease under HKAS 17 and HK(IFRIC)-Int 4.

As a Lessee

The Group has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence at the date of initial application of HKFRS 16, being 1 May 2019. At this date, the Group has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of transition.

Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Group has relied on its historic assessment as to whether leases were onerous immediately before the date of initial application of HKFRS 16.

The weighted average incremental borrowing rate applied to lease liabilities recognised under HKFRS 16 was 4.1%.

The following is a reconciliation of total operating lease commitments at 30 April 2019 to the lease liabilities recognised at 1 May 2019:

HK$’000

Total operating lease commitments disclosed at 30 April 2019 and operating leases liabilities before discounting 3,815 Discounting using incremental borrowing rate as at 1 May 2019 (262)

Total lease liabilities recognised under HKFRS 16 at 1 May 2019 3,553

Lease liabilities classified as: — Current 1,414 — Non-current 2,139

3,553

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APPENDIX I ACCOUNTANT’S REPORT

Total impact arising from transition to HKFRS 16

The following table summarises the impact of transition to HKFRS 16 on the Group’s consolidated statement of financial position at 1 May 2019:

HK$’000

Increase in right-of-use assets presented in property, plant and equipment 3,553 Increase in lease liabilities 3,553

2.3 Issued but not effective HKFRSs

The following new standards and amendments to HKFRSs and interpretations are effective for annual periods beginning after 1 May 2020, and have not been applied in preparing the Historical Financial Information:

Amendments to HKFRS 16 Covid-19-Related Rent Concessions1 Amendments to HKFRS 9, Interest Rate Benchmark Reform — Phase 22 HKAS 39, HKFRS 7, HKFRS 4 and HKFRS 16 Amendments to HKAS 16 Property, Plant and Equipment — Proceeds before Intended Use3 Amendments to HKAS 37 Onerous Contracts — Cost of Fulfilling a Contract3 Amendments to HKFRS 3 Reference to the Conceptual Framework6 Amendments to HKFRSs Annual Improvements to HKFRS Standards 2018–20203 HKFRS 17 Insurance Contracts and related amendments4 Amendments to HKAS 1 Classification of Liabilities as Current or Non-current and related amendments to Hong Kong Interpretation 5 (2020)4 Amendments to HKAS 1 and Disclosure of Accounting Policies4 HKFRS Practice Statement 2 Amendments to HKAS 8 Definition of Accounting Estimates4 Amendments to HKFRS 10 and Sale or Contribution of Assets between an Investor and its HKAS 28 Associate or Joint Venture5 Accounting Guideline 5 (Revised) Merger Accounting for Common Control Combination6 Amendments to HKFRS 16 Covid-19-Related Rent Concessions beyond 30 June 20217

1 Effective for annual periods beginning on or after 1 June 2020 2 Effective for annual periods beginning on or after 1 January 2021 3 Effective for annual periods beginning on or after 1 January 2022 4 Effective for annual periods beginning on or after 1 January 2023 5 Effective date to be determined 6 Effective for business combination/common control combination for which the acquisition/ combination date is on or after the beginning of the first annual period beginning on or after 1 January 2022 7 Effective for annual periods beginning on or after 1 April 2021

The Group has already commenced an assessment of the impact of these new or revised standards, interpretation and amendments, certain of which are relevant to the Group’s operations. According to the preliminary assessment made by the directors of the Company, no significant impact on the financial performance and position of the Group is expected when they become effective.

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APPENDIX I ACCOUNTANT’S REPORT

2.4 Consolidation

(a) Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether the Group has power over the entity, only substantive rights relating to the entity (held by the Group and others) are considered.

The Group includes the income and expenses of a subsidiary in the Historical Financial Information from the date it gains control until the date when the Group ceases to control the subsidiary.

Intra-group transactions, balances and unrealised gains and losses on transactions between group companies are eliminated. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Non-controlling interests are presented in the consolidated statements of financial position within equity, separately from the equity attributable to the owners of the Company. Non- controlling interests in the results of the Group are presented on the face of the consolidated statements of profit or loss and other comprehensive income as an allocation of the total profit or loss and total comprehensive income for the period between non-controlling interests and the owners of the Company.

(b) Separate financial statements

In the Company’s statement of financial position, subsidiaries are carried at cost less any impairment loss. Cost also includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividends received and receivable at the reporting date. All dividends whether received out of the investee’s pre or post-acquisition profits are recognised in the Company’s profit or loss.

2.5 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘‘functional currency’’). The Historical Financial Information is presented in HK$, which is the functional currency of the Company and the presentation currency of the Group.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

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APPENDIX I ACCOUNTANT’S REPORT

The results and financial position of all foreign operations (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

. assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

. income and expenses for each statement of profit or loss and other comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

. all resulting currency translation differences are recognised in other comprehensive income.

2.6 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The cost of an item of property, plant and equipment (other than cost of right-of-use assets as described in Note 2.11) comprises its purchase price and any directly attributable costs of bringing the assets to its working condition and location for its intended use. Depreciation of assets commences when the assets ready for intended use.

Depreciation on property, plant and equipment is provided to write off the cost less their residual values (if any) over their estimated useful lives, using the straight-line method, at the following rates per annum:

Leasehold improvements Over the lease terms Furniture and fixtures and equipment 20%–33.3% Motor vehicles, boats and yachts 33.3%

Upon the adoption of HKFRS 16, accounting policy for depreciation of right-of-use assets is set out in Note 2.11.

The assets’ residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

The gain or loss arising on retirement or disposal is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other costs, such as repairs and maintenance, are charged to profit or loss during the financial period in which they are incurred.

2.7 Intangible assets

Acquired intangible assets are recognised initially at cost. After initial recognition, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses.

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APPENDIX I ACCOUNTANT’S REPORT

Intangible assets with indefinite useful lives are tested for impairment as described below in Note 2.15.

2.8 Financial instruments

Financial assets and financial liabilities are recognised in the consolidated statement of financial position when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.

(i) Classification and measurement of financial assets

The Group classifies its financial assets in the following measurement categories:

. those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

. those to be measured at amortised cost.

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:

. Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is recognised on a time proportion basis using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss together with foreign exchange gains and losses. Impairment losses are recognised in profit or loss.

. Fair value through other comprehensive income: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the

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APPENDIX I ACCOUNTANT’S REPORT

cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss. Interest income from these financial assets is recognised on a time proportion basis using the effective interest rate method. Foreign exchange gains and losses and impairment expenses are recognised in profit or loss.

. Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss in the period in which it arises.

Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss when the Group’s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognised profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at fair value through other comprehensive income are not reported separately from other changes in fair value.

(ii) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognised on its consolidated statements of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In such cases, the transferred assets are not derecognised.

(iii) Impairment of financial assets

The Group assesses on a forward-looking basis the expected credit losses (‘‘ECL’’) associated with its debt instruments carried at amortised cost and at fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by HKFRS 9, which requires ECLs to be recognised from initial recognition of the receivables.

Impairment on other receivables, amounts due from directors, amount due from a non-controlling shareholder and bank balances and cash are measured as either 12-month expected credit losses or lifetime expected credit loss, depending on whether there has been a significant increase in credit risk since initial recognition. If a significant increase in credit risk of a receivable has occurred since initial recognition, then impairment is measured as lifetime ECLs.

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Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECL that results from default events on a financial instrument that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

In all cases, the maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

In assessing whether the credit risk has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial assets at the reporting date with the risk of default occurring on the financial assets at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

In particular, the following information is taken into account when assessing whether credit risk has increased significantly:

. an actual or expected significant deterioration in the financial instrument’s external (if available) or internal credit rating;

. significant deterioration in external market indicators of credit risk, e.g. a significant increase in the credit spread, the credit default swap prices for the debtor;

. existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor’s ability to meet its debt obligations;

. an actual or expected significant deterioration in the operating results of the debtor;

. an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor’s ability to meet its debt obligations.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

Credit-impaired financial assets

At each reporting date, the Group assesses on a forward-looking basis whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘‘credit-impaired’’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

. significant financial difficulty of the borrower or issuer;

. a breach of contract such as a default or past due event;

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APPENDIX I ACCOUNTANT’S REPORT

. the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;

. it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

. the disappearance of an active market for a security because of financial difficulties.

Presentation of allowance for ECL in the consolidated statements of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

(iv) Classification and measurement of financial liabilities

Financial liabilities (other than lease liabilities) are classified and measured at amortised cost or at fair value through profit or loss. A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at fair value through profit or loss are measured at fair value and net gains and losses, including any interest expense, are recognised in the profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the profit or loss. Any gain or loss on derecognition is also recognised in the profit or loss.

Accounting policies of lease liabilities are set out in note 2.11.

Trade and other payables, amount due to a director and amount due to a non-controlling shareholder

Trade and other payable and amount due to a director are recognised initially at their fair value and subsequently measured at amortised cost, using the effective interest method.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

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Convertible bonds

Convertible bonds that can be converted to equity share capital at the option of the holder, where the number of shares that would be issued on conversion and the value of the consideration that would be received at that time do not vary, are accounted for as compound financial instruments which contain both a liability component and an equity component.

Convertible bonds issued by the Group that contain both financial liability and equity components are classified separately into respective liability and equity components on initial recognition. On initial recognition, the fair value of the liability component is determined using the prevailing market interest rate for similar non-convertible debts. The difference between the proceeds of the issue of the convertible bond and the fair value assigned to the liability component, representing the call option for conversion of the bond into equity, is included in equity as convertible bonds reserve.

The liability component is subsequently carried at amortised cost using the effective interest method. The equity component will remain in equity until conversion or redemption of the bond.

When the bond is converted, the equity component of convertible bond and the carrying value of the liability component at the time of conversion are transferred to share capital as consideration for the shares issued. If the bond is redeemed, the convertible bond reserve is released directly to retained profits.

(v) Derecognition of financial liabilities

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability.

In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in the profit or loss. Any costs or fees incurred are recognised as part of the gain or loss on the extinguishment.

For non-substantial modifications of financial liabilities that do not result in derecognition, the carrying amount of the relevant financial liabilities will be calculated at the present value of the modified contractual cash flows discounted at the financial liabilities’ original effective interest rate. Transaction costs or fees incurred are adjusted to the carrying amount of the modified financial liabilities and are amortised over the remaining term. Any adjustment to the carrying amount of the financial liability is recognised in profit or loss at the date of modification.

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(vi) Offsetting financial instrument

Financial assets and financial liabilities are offset and the net amount presented in the consolidated statements of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Income and expenses are presented on a net basis only when permitted under HKFRSs, or for gains and losses arising from a group of similar transactions.

2.9 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises expenditures that are directly attributable to the acquisition of the items. Net realisable value is the estimated selling price in the ordinary course of business less applicable variable selling expenses.

2.10 Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand.

2.11 Leases

Policy applicable from 1 May 2019

Definition of a lease

For any new contracts entered into on or after 1 May 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as ‘‘a contract, or part of a contract, that conveys the right to use an identified asset (the underlying asset) for a period of time in exchange for consideration’’. To apply this definition, the Group assesses whether the contract meets three key evaluations which are whether:

. the contracts contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group;

. the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and

. the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.

For contracts that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices.

Measurement and recognition of leases as a lessee

At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the consolidated statements of financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the

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APPENDIX I ACCOUNTANT’S REPORT

Group, an estimate of any costs to dismantle and remove the underlying asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any lease incentives received).

The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term unless the Group is reasonably certain to obtain ownership at the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicator exists.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable payments based on an index or rate, and amounts expected to be payable under a residual value guarantee. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payment of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate.

Subsequent to initial measurement, the liability will be reduced for lease payments made and increased for interest cost on the lease liability. It is remeasured to reflect any reassessment or lease modification, or if there are changes in in-substance fixed payments. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.

When the lease is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.

The Group has elected to account for short-term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these leases are recognised as an expense in profit or loss on a straight-line basis over the lease term. Short-term leases are leases with a lease term of 12 months or less.

On the consolidated statements of financial position, right-of-use assets that do not meet the definition of investment property have been included in property, plant and equipment, and present in a separate line item as ‘‘right-of-use assets’’.

Refundable rental deposits paid are accounted for under HKFRS 9 and initially measured at fair value. Adjustments to fair value at initial recognition are considered as additional lease payments and included in the cost of right-of-use assets.

Sale and leaseback transactions as a seller-lessee

For a transfer that does not satisfy requirements as a sale in accordance with HKFRS 15, the Group as a seller-lessee accounts for the proceeds received as ‘‘borrowings’’ within the scope of HKFRS 9.

For a transfer that satisfies the requirements as a sale in accordance with HKFRS 15, the Group as a seller-lessee measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset and recognises any gain or loss that relates to the rights transferred to the buyer-lessor only.

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APPENDIX I ACCOUNTANT’S REPORT

Policy applicable before 1 May 2019

An arrangement, comprising a transaction or a series of transactions, is or contains a lease if the Group determines that the arrangement conveys a right to use a specific asset or assets for an agreed period of time in return for a payment or a series of payments. Such a determination is made based on an evaluation of the substance of the arrangement and is regardless of whether the arrangement takes the legal form of a lease.

(i) Classification of assets leased to the Group

Assets that are held by the Group under leases which transfer to the Group substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the Group are classified as operating leases.

(ii) Operating lease charges as the lessee

When the Group has the right to use of assets held under operating leases, payments made under the leases are charged to profit or loss on a straight-line basis over the lease terms except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives received are recognised in profit or loss as an integral part of the aggregate net lease payments made. Contingent rental, if any, are charged to profit or loss in the accounting period in which they are incurred.

2.12 Share capital

Ordinary shares are classified as equity. Share capital is determined using the nominal value of shares that have been issued. Any transaction costs associated with the issuing of shares are deducted from share premium (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction.

2.13 Revenue recognition

Revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. Specifically, the Group uses a 5-step approach to revenue recognition:

1. Identifying the contract(s) with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the performance obligations

5. Recognising revenue when (or as) performance obligation(s) are satisfied.

The Group recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘‘control’’ of the goods or services underlying the particular performance obligation is transferred to customers.

Control of the asset may be transferred over time or at a point in time. Control of the asset is transferred over time if:

(i) the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs;

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APPENDIX I ACCOUNTANT’S REPORT

(ii) the Group’s performance creates or enhances an asset (for example work in progress) that the customer controls as the asset is created or enhanced; or

(iii) the Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment or performance completed to date.

The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as ‘‘deposits receipt in advance’’ under trade and other payables in the consolidated statements of financial position.

The Group takes advantage of the practical expedient in paragraph 63 of HKFRS 15 and does not adjust the consideration for any effects of a significant financing component if the period of financing is 12 months or less.

Sale of goods

Revenue from sale of yachts includes the sale of yachts and the specified service provided by the Group to the customer for which the customer has contracted. Revenue is recognised when the customer takes possession of and accepts the goods. For sale of related components, revenue is recognised when control of the goods has transferred, being when the goods have been delivered to the customer.

Service income

The Group provides yacht delivery arrangement, repair and maintenance and introductory services. Revenue from yacht delivery arrangement, repair and maintenance and introductory services are recognised when the services are rendered.

Commission income

Commission income is recognised when the services are rendered.

Interest income

Interest income is recognised on a time proportion basis using the effective interest method.

2.14 Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants are deferred and recognised in profit or loss over the period necessary to match them with the costs that the grants are intended to compensate.

Government grants relating to income is presented in gross under “other income” in the consolidated statement of profit or loss and other comprehensive income.

2.15 Impairment of non-financial assets

Property, plant and equipment (including right-of-use assets), intangible assets and the Company’s investment in subsidiaries are subject to impairment testing. Property, plant and equipment and the Company’s investment in subsidiaries are tested for impairment whenever there are indications that the asset’s carrying amount may not be recoverable. Intangible asset with an indefinite useful life are tested for impairment annually irrespective of whether there is any indications that the asset’s carrying amount may not be recoverable.

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APPENDIX I ACCOUNTANT’S REPORT

An impairment loss is recognised as an expense immediately for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of fair value, reflecting market conditions less costs of disposal, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of time value of money and the risk specific to the asset.

For the purposes of assessing impairment, where an asset does not generate cash inflows largely independent from those from other assets, the recoverable amount is determined for the smallest group of assets that generate cash inflows independently (i.e. a cash-generating unit). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.

Impairment losses recognised for cash generating unit is charged pro rata to the assets in the cash generating unit, except that the carrying value of an asset will not be reduced below its individual fair value less cost of disposal, or value in use, if determinable.

An impairment loss is reversed if there has been a favourable change in the estimates used to determine the asset’s recoverable amount and only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

2.16 Employee benefits

Retirement benefit

Retirement benefits to employees are provided through defined contribution plans.

The Group operates a defined contribution retirement benefit plan (the ‘‘MPF Scheme’’) under the Mandatory Provident Fund Schemes Ordinance, for all of its employees who are eligible to participate in the MPF Scheme. Contributions are made based on a percentage of the employees’ basic salaries.

Contributions are recognised as an expense in profit or loss as employees render services during the year. The Group’s obligations under these plans are limited to the fixed percentage contributions payable.

Short-term employee benefits

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the reporting date.

Non-accumulative compensated absences such as sick leave and maternity leave are not recognised until the time of leave.

2.17 Borrowing costs

Borrowing costs incurred, net of any investment income earned on the temporary investment of the specific borrowings, for the acquisition, construction or production of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use. A qualifying asset is an asset which necessarily takes a substantial period of time to get ready for its intended use or sale. Other borrowing costs are expensed when incurred.

2.18 Accounting for income tax

Income tax comprises current tax and deferred tax.

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APPENDIX I ACCOUNTANT’S REPORT

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting period, that are unpaid at the reporting date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the year. All changes to current tax assets or liabilities are recognised as a component of tax expense in profit or loss.

Deferred tax is calculated using the liability method on temporary differences at the reporting date between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, tax losses available to be carried forward as well as other unused tax credits, to the extent that it is probable that taxable profit, including existing taxable temporary differences, will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are not recognised if the temporary difference arises from initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither taxable nor accounting profit or loss.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax is calculated, without discounting, at tax rates that are expected to apply in the period the liability is settled or the asset realised, provided they are enacted or substantively enacted at the reporting date.

Changes in deferred tax assets or liabilities are recognised in profit or loss, or in other comprehensive income or directly in equity if they relate to items that are charged or credited to other comprehensive income or directly in equity.

When different tax rates apply to different levels of taxable income, deferred tax assets and liabilities are measured using the average tax rates that are expected to apply to the taxable income of the periods in which the temporary differences are expected to reverse.

The determination of the average tax rates requires an estimation of (i) when the existing temporary differences will reverse and (ii) the amount of future taxable profit in those years. The estimate of future taxable profit includes:

— income or loss excluding reversals of temporary differences; and

— reversals of existing temporary differences.

Current tax assets and current tax liabilities are presented in net if, and only if,

(a) the Group has the legally enforceable right to set off the recognised amounts; and

(b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

The Group presents deferred tax assets and deferred tax liabilities in net if, and only if,

(a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

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APPENDIX I ACCOUNTANT’S REPORT

(b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

2.19 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers, who are responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive directors that make strategic decisions.

2.20 Related parties

For the purpose of the Historical Financial Information, a party is considered to be related to the Group if:

(a) the party is a person or a close member of that person’s family and if that person:

(i) has control or joint control over the Group;

(ii) has significant influence over the Group; or

(iii) is a member of the key management personnel of the Group or of a parent of the Group.

(b) the party is an entity and if any of the following conditions applies:

(i) the entity and the Group are members of the same group.

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) the entity and the Group are joint ventures of the same third party.

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.

(vi) the entity is controlled or jointly controlled by a person identified in (a).

(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

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APPENDIX I ACCOUNTANT’S REPORT

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Allowance for inventories

Net realisable value of inventories (Note 17) is the actual or estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. These estimates are based on the current market condition, physical condition of the yachts and the historical experience of selling products of similar nature. It could change significantly as a result of competitor actions in response to changes in market condition. Management reassesses these estimations at the end of each reporting period. As at 30 April 2019, 2020 and 2021, the carrying amounts of inventories are approximately HK$49,183,000, HK$51,150,000 and HK$16,222,000, respectively.

Provision for impairment of trade receivables

The Group determines the provision for impairment of trade receivables based on assumption about risk of default and expected loss rates. This estimate is based on the credit history of the customers, the current market condition and forward-looking elements. Management reassesses the adequacy of provision on a regular basis by reviewing the individual account based on past credit history and any prior knowledge of debtor insolvency or other credit risk which might not be easily accessible public information and market volatility might bear a significant impact which might not be easily ascertained. Details of the trade receivables are disclosed in Note 18.

4. REVENUE AND SEGMENT INFORMATION

The Group’s operating activities are attributable to a single reportable and operating segment focusing primarily on the sale of yachts and related components and the provision of yacht repair and maintenance services. This operating segment has been identified on the basis of internal management reports reviewed by the chief operating decision-makers (the ‘‘CODM’’), being the executive directors of the Group. The CODM reviews the operating results of the business as one segment to make decisions about resources allocation. Accordingly, no segment information is presented. An analysis of the Group’s revenue recognised at a point in time is as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Sale of yachts and related components 237,589 241,388 440,570 Service income 9,121 12,187 20,667

246,710 253,575 461,237

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APPENDIX I ACCOUNTANT’S REPORT

Revenue from customers which individually contributed over 10% of the Group’s revenue is as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Customer A 79,611 N/A* N/A* Customer B 27,566 N/A* N/A* Customer C 25,512 N/A* N/A* Customer D N/A* 62,576 N/A* Customer E N/A* 42,984 N/A* Customer F N/A* 36,158 N/A* Customer G N/A* 28,965 N/A* Customer H N/A* N/A* 91,197

* The corresponding revenue does not contribute over 10% of total revenue of the Group.

The following table sets out information about the geographical location of the Group’s non-current assets (other than financial instruments and deferred tax assets). The geographical location of the specified non- current assets is based on the physical location of the asset in the case of property, plant and equipment, the location of the operations to which they are allocated in the case of the intangible assets. Specified non-current assets by geographical location as at 30 April 2019, 2020 and 2021 were as follows:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Hong Kong 5,997 5,059 2,686 Singapore 181 131 95

6,178 5,190 2,781

Revenue by geographical location of the customers during the Track Record Period were as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Hong Kong 216,197 173,493 396,780 Singapore 16,391 64,349 27,189 Taiwan 14,122 4,695 14,502 The People’s Republic of China (the ‘‘PRC’’) — 11,038 4,698 Australia — — 7,283 New Zealand — — 10,785

246,710 253,575 461,237

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APPENDIX I ACCOUNTANT’S REPORT

The following table includes deposits receipt in advance expected to be recognised as revenue in the future at 30 April 2019, 2020 and 2021.

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Within one year 70,417 16,870 153,751 Over one year but within two years — — 4,772

70,417 16,870 158,523

As permitted by HKFRS 15, the transaction price allocated to unsatisfied contracts for periods of one year or less is not disclosed. The transaction price allocated to the unsatisfied contracts that are expected to be satisfied after one year but within two years as at 30 April 2019, 2020 and 2021 are nil, nil and HK$23,862,000, respectively.

The Group receives payments from customers based on billing schedules as established in the sale contracts. Payments are usually received in advance of the performance under the contract which are mainly from the sale of yachts and related components. The significant decrease of deposits receipt in advance as at 30 April 2020 is mainly due to the decrease in number of unsatisfied contracts. The significant increase of deposits receipt in advance as at 30 April 2021 is mainly due to the increase in number of unsatisfied contracts.

The following table shows the revenue recognised during the year that was included in the contract liability balances at the beginning of the year:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Revenue recognised that was included in the contract liability balance at the beginning of the year Sale of yachts and related components 62,728 70,417 16,870

5. OTHER INCOME

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Government grants (Note) — — 1,014 Commission income — — 359 ECL allowance reversed — — 405 Sundry income 280 810 484

280 810 2,262

Note: The amount represents salaries and wage subsidies granted under Anti-Epidemic Fund by the Government of the Hong Kong to retain employment and combat COVID-19. As at 30 April 2021, there were no unfulfilled conditions or contingencies relating to these grants.

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APPENDIX I ACCOUNTANT’S REPORT

6. OTHER NET (LOSS)/GAIN

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

(Loss)/Gain on disposal of property, plant and equipment, net (4) — 4,341 Gain on disposal of intangible assets — 400 — Gain on modification of convertible bonds (Note 25) — — 138 Net foreign exchange loss (1,074) (3) (2,311)

(1,078) 397 2,168

7. FINANCE COSTS

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Effective interest expense on convertible bonds 204 425 432 Interest expenses on borrowings 410 272 1,072 Finance charges on lease liabilities — 120 87

614 817 1,591

During the year ended 30 April 2019, borrowings of HK$8,600,000 were secured by the Group’s inventories and guaranteed by Mr. Woo and Mr. Grange up to a limit of HK$12,000,000, with terms of six months and bear interest at floating rate. Such borrowings were fully repaid in January 2019.

8. PROFIT BEFORE INCOME TAX

Profit before income tax has been arrived at after charging:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Auditor’s remuneration 131 92 85 Cost of inventories recognised as expense, including: 200,077 198,462 381,919 — Allowance for inventories 100 1,386 — ECL allowance recognised, net 118 397 275 Depreciation of property, plant and equipment — owned assets 1,519 2,401 1,751 — right-of-use assets — 1,404 1,644 Operating lease charges on premises 1,365 — —

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APPENDIX I ACCOUNTANT’S REPORT

9. EMPLOYEE BENEFIT EXPENSE (INCLUDING DIRECTORS’ EMOLUMENTS)

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Salaries, bonus and allowances 8,247 9,741 11,032 Retirement benefit scheme contributions 244 301 319

8,491 10,042 11,351

10. INCOME TAX EXPENSE

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Current tax — Hong Kong profits tax Current year 1,798 2,955 5,622

Deferred tax Origination and reversal of temporary differences (Note 26) (73) (548) 10

Income tax expense 1,725 2,407 5,632

Reconciliation between income tax expense and accounting profit at applicable tax rates:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Profit before income tax 522 7,640 32,909

Tax on profit before income tax, calculated at the statutory rates applicable in the tax jurisdiction concerned 905 2,422 6,013 Tax effect of non-taxable revenue — (65) (274) Tax effect of non-deductible expenses 985 66 22 Tax effect of tax losses not recognised — 149 36 Effect of two-tiered profits tax rates regime (165) (165) (165)

Income tax expense 1,725 2,407 5,632

(a) Cayman Islands income tax

The Company is incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Act of the Cayman Islands and accordingly, is exempted from Cayman Islands income tax.

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APPENDIX I ACCOUNTANT’S REPORT

(b) Hong Kong profits tax

For the years ended 30 April 2019, 2020 and 2021, Hong Kong profits tax has been provided as detailed below.

Hong Kong profits tax of the qualified entity is calculated in accordance with the two-tiered profits tax regime. Under the two-tiered profits tax rates regime, the first HK$2,000,000 of assessable profits of qualifying corporations will be taxed at 8.25%, and assessable profits above HK$2,000,000 will be taxed at 16.5%. The profits of other group entities in Hong Kong not qualifying for the two-tiered profits tax regime will be taxed at the flat rate of 16.5%.

Singapore corporate income tax rate is 17% for the years ended 30 April 2019, 2020 and 2021. During the years ended 30 April 2019, 2020 and 2021, no provision for Singapore corporate income tax has been made as the Group did not generate any assessable profits arising in Singapore.

11. DIVIDENDS

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Dividend declared and paid by the Company 9,000 13,000 —

During the year ended 30 April 2019, an interim dividend of HK$692,307.7 per share amounting to HK$9,000,000 for the year ended 30 April 2019 has been proposed and approved by the board of directors of the Company and was fully paid by offsetting against the amounts due from directors.

During the year ended 30 April 2020, an interim dividend of HK$1,000,000 per share amounting to HK$13,000,000 for the year ended 30 April 2020 has been proposed and approved by the board of directors of the Company and was fully paid by offsetting against the amounts due from directors.

12. (LOSS)/EARNINGS PER SHARE

(Loss)/Earnings per share information is not presented as its inclusion, for the purpose of this report, is not considered meaningful as the number of ordinary shares as at each reporting date during the Track Record Period was different from the number of ordinary shares immediately after the completion of [REDACTED] of the Group.

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APPENDIX I ACCOUNTANT’S REPORT

13. DIRECTORS’ AND CHIEF EXECUTIVE’S AND EMPLOYEES’ EMOLUMENTS

(a) Directors’ and chief executive’s emoluments

The emoluments of the individual directors of the CompanyduringtheTrackRecordPeriodwhich were included in the employee benefit expenses are set out below:

Retirement Basic benefit Name of directors and salaries and Discretionary scheme chief executive Notes Fees allowances bonuses contributions Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Year ended 30 April 2019 Executive directors: Mr. Grange (i) — 1,620 — 18 1,638 Mr. Woo (i) — 1,620 — 18 1,638

Non-executive director: Mr. Kong Chun Lam Leslie (ii) — — — — —

— 3,240 — 36 3,276

Year ended 30 April 2020 Executive directors: Mr. Grange (i) — 1,908 — 18 1,926 Mr. Woo (i) — 1,908 — 18 1,926 Ms. Wu Siu Ling (iii) — 432 50 15 497

Non-executive director: Mr. Kong Chun Lam Leslie (ii) — — — — —

— 4,248 50 51 4,349

Year ended 30 April 2021 Executive directors: Mr. Grange (i) — 1,914 — 18 1,932 Mr. Woo (i) — 1,914 — 18 1,932 Ms. Wu Siu Ling (iii) — 603 — 18 621

— 4,431 — 54 4,485

Notes:

(i) Mr. Woo and Mr. Grange were appointed on 16 October 2018. The remuneration shown above represents remuneration received from the Group by these directors in their capacity as employees of the companies comprising the Group during the Track Record Period. Mr. Grange is also the chief executive officer of the Company.

(ii) Appointed on 1 November 2018 and resigned on 1 November 2019.

(iii) Appointed on 9 July 2019.

Discretionary bonus is determined with reference to the Group’s operating results and individual performance.

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APPENDIX I ACCOUNTANT’S REPORT

No emoluments were paid by the Group to any directors as an inducement to join or upon joining the Group or as compensation for loss of office during the Track Record Period.

There were no arrangements under which a director of the Company waived or agreed to waive any remuneration during the Track Record Period.

(b) Five highest paid individuals

For the years ended 30 April 2019, 2020 and 2021, the five individuals whose emoluments were the highest in the Group include 2, 3 and 3 director(s), respectively, whose emoluments are reflected in the analysis presented above. The emoluments paid to the remaining 3, 2 and 2 individuals are as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Basic salaries and allowances 1,256 925 1,014 Discretionary bonuses 10 30 — Retirement benefit scheme contributions 70 30 36

1,336 985 1,050

Discretionary bonus is determined with reference to the Group’s operating results and individual performance.

The emoluments fell within the following bands:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Emolument bands Nil–HK$1,000,000 3 2 2

No emoluments were paid by the Group to the five highest paid individuals as an inducement to join or upon joining the Group or as compensation for loss of office during the Track Record Period.

14. PROPERTY, PLANT AND EQUIPMENT

Furniture and Motor Right-of-use Right-of-use Leasehold fixtures and vehicles, boats assets — assets — improvements equipment and yachts premises motor vehicle Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 1 May 2018 Cost 215 1,169 1,234 — — 2,618 Accumulated depreciation (53) (384) (424) — — (861)

Net book amount 162 785 810 — — 1,757

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APPENDIX I ACCOUNTANT’S REPORT

Year ended 30 April 2019 Opening net book amount 162 785 810 — — 1,757 Additions 250 224 4,674 — — 5,148 Disposal — — (8) — — (8) Depreciation (64) (286) (1,169) — — (1,519)

Closing net book amount 348 723 4,307 — — 5,378

At 30 April 2019 Cost 465 1,393 5,895 — — 7,753 Accumulated depreciation (117) (670) (1,588) — — (2,375)

Net book amount 348 723 4,307 — — 5,378 Adjustment from the adoption of HKFRS 16 (Note 2.2) — — — 3,553 — 3,553

Net book amount, restated 348 723 4,307 3,553 — 8,931

Year ended 30 April 2020 Opening net book amount, restated 348 723 4,307 3,553 — 8,931 Additions — 72 — — — 72 Depreciation (126) (309) (1,966) (1,404) — (3,805) Exchange differences — (8) — — — (8)

Closing net book amount 222 478 2,341 2,149 — 5,190

At 30 April 2020 Cost 465 1,454 5,895 3,553 — 11,367 Accumulated depreciation (243) (976) (3,554) (1,404) — (6,177)

Net book amount 222 478 2,341 2,149 — 5,190

Year ended 30 April 2021 Opening net book amount 222 478 2,341 2,149 — 5,190 Additions — 27 1,224 — 888 2,139 Depreciation (126) (273) (1,352) (1,477) (167) (3,395) Disposal — — (1,161) — — (1,161) Exchange differences — 8 — — — 8

Closing net book amount 96 240 1,052 672 721 2,781

At 30 April 2021 Cost 465 1,494 1,446 3,553 888 7,846 Accumulated depreciation (369) (1,254) (394) (2,881) (167) (5,065)

Net book amount 96 240 1,052 672 721 2,781

–I-38– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

During the years ended 30 April 2019 and 2020, the Group owned a yacht (the ‘‘Co-owned Yacht’’) in equal share with an independent third party in the form of co-ownership. As at 30 April 2019 and 2020 the carrying amount of the Co-owned Yacht under ‘‘motor vehicles, boats and yachts’’ was approximately HK$3,862,000 and HK$2,317,000, respectively. During the year ended 30 April 2021, the Group disposed the co-owned yacht to an independent third party at a consideration of HK$5,000,000 and recognised a gain on disposal of HK$3,841,000 and included in other net (loss)/gain.

15. INVESTMENT IN SUBSIDIARIES

Company

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Unlisted shares, at cost 31,607 31,607 31,607 Less: Provision for impairment — (10,503) —

31,607 21,104 31,607

Note: Details of the principal subsidiaries are stated in Note 1.2.

16. INTANGIBLE ASSETS

Private mooring HK$’000

At 1 May 2018, 30 April 2019 and 1 May 2019 Cost 800

Year ended 30 April 2020 Opening net book amount 800 Disposal (800)

Closing net book amount —

At 30 April 2020 and 30 April 2021 Cost —

In respect of the private mooring which was allocated to MIL acquired in prior years, it has no foreseeable limit to the period over which the Group can use to generate net cash flows. The directors consider the private mooring as having indefinite useful life because it is expected to contribute to net cash inflows indefinitely. The private mooring will not be amortised until its useful life is determined to be finite.

As at 30 April 2019, the Group reviewed the recoverable amount of the private mooring that is fair value less costs of disposal based on market approach. No impairment loss has been recognised during the year ended 30 April 2019.

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APPENDIX I ACCOUNTANT’S REPORT

17. INVENTORIES

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Finished goods 49,183 51,150 16,222 Goods in transit — — —

49,183 51,150 16,222

As at 30 April 2020, inventories with carrying amounts of HK$31,444,000 were pledged for the Group’s other borrowings of HK$29,866,000 (Note 24(b)).

18. TRADE AND OTHER RECEIVABLES

Group

As at 30 April 2019 2020 2021 Notes HK$’000 HK$’000 HK$’000

Trade receivables (a) From third parties 23,909 3,546 4,437 Less: ECL allowance (118) (515) (790)

23,791 3,031 3,647

Other receivables (b) Prepayments to suppliers (c) 30,803 13,987 151,934 Deposits and other receivables 568 548 508 Prepaid/Deferred [REDACTED] costs [REDACTED] [REDACTED] [REDACTED]

37,842 20,828 164,260

61,633 23,859 167,907

The directors of the Group considered that the fair value of trade and other receivables are not materially different from their carrying amounts because these amounts have short maturity periods on their inception.

(a) Trade receivables

There were no credit terms granted to the customers. As at 30 April 2019, 2020 and 2021, the ageing analysis based on recognition date and due date of the trade receivables, before ECL allowance, is as follows:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

1–90 days 22,784 2,011 2,813 91–180 days 543 181 332 181–365 days 283 832 502 Over 1 year 299 522 790

23,909 3,546 4,437

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APPENDIX I ACCOUNTANT’S REPORT

The Group applies simplified approach to estimate ECL prescribed in HKFRS 9 as disclosed in Note 31.2. Movements in ECL allowance of trade receivables were as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

At 1 May — 118 515 ECL allowance recognised 118 397 680 ECL allowance reversed — — (405)

At 30 April 118 515 790

(b) Other receivables

As at 30 April 2019, 2020 and 2021, none of the amounts included in other receivables were either past due or impaired.

As at 30 April 2019, 2020 and 2021, the amounts represent payments to suppliers pursuant to the respective purchase contracts.

Company

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Other receivables Prepaid/Deferred [REDACTED] costs [REDACTED] [REDACTED] [REDACTED] Amount due from a subsidiary (Note) 15,000 28,000 28,000

21,471 34,293 39,818

Note: The amount due is non-trade in nature, unsecured, interest-free and repayable on demand.

19. AMOUNTS DUE FROM/TO DIRECTORS

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Amounts due from directors Mr. Grange 1,590 2,497 3,427 Mr. Woo 999 3,432 8,999

2,589 5,929 12,426

Amount due to a director Mr. Woo 253 111 117

The amounts due from/to directors are non-trade in nature, unsecured, interest-free, repayable on demand and will be settled prior to [REDACTED].

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APPENDIX I ACCOUNTANT’S REPORT

The maximum outstanding of amounts due from directors during the Track Record Period is as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Mr. Grange 4,452 2,511 3,427 Mr. Woo 3,711 27,478 9,042

20. AMOUNT DUE FROM/TO A NON-CONTROLLING SHAREHOLDER

The amount due from a non-controlling shareholder is non-trade in nature, unsecured, interest-free, repayable on demand and will be settled prior to [REDACTED].

The amount due to a non-controlling shareholder is trade in nature, unsecured, interest free, repayable on demand and will be settled prior to [REDACTED].

21. BANK BALANCES AND CASH

Bank balances earn interest at floating rates based on daily bank deposit rates.

22. TRADE AND OTHER PAYABLES

Group

As at 30 April 2019 2020 2021 Note HK$’000 HK$’000 HK$’000

Trade payables To third parties (a) 28,477 14,613 2,364

Other payables Accrued [REDACTED] costs [REDACTED] [REDACTED] [REDACTED] Accrued charges and other payables 3,457 3,552 3,994 Deposits receipt in advance 70,417 16,870 158,523

81,501 30,846 177,525

109,978 45,459 179,889

(a) Trade payables

All amounts are short-term and hence the carrying values of the Group’s trade and other payables as at 30 April 2019, 2020 and 2021 were considered to be a reasonable approximation of their fair values.

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APPENDIX I ACCOUNTANT’S REPORT

There were no credit periods granted by the suppliers of the Group. The ageing analysis of trade payables based on recognition date is as follows:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

0–30 days 27,036 8,781 834 31–90 days 170 624 394 Over 90 days 1,271 5,208 1,136

28,477 14,613 2,364

Company

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Other payables Accrued [REDACTED] costs [REDACTED] [REDACTED] [REDACTED] Amounts due to subsidiaries (Note) 4,659 21,083 25,105

12,286 31,507 40,113

Note: The amounts due are non-trade in nature, unsecured, interest-free and repayable on demand.

23. LEASE LIABILITIES

The following table shows the remaining contractual maturities of the Group’s lease liabilities:

As at 30 April 2020 2021 HK$’000 HK$’000

Total minimum lease payments: Due within one year 1,560 937 Due in the second to fifth years 695 544

2,255 1,481 Future finance charges on lease liabilities (68) (61)

Present value of lease liabilities 2,187 1,420

Present value of minimum lease payments: Due within one year 1,499 902 Due in the second to fifth years 688 518

2,187 1,420 Less: Portion due within one year included under current liabilities (1,499) (902)

Portion due after one year included under non-current liabilities 688 518

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APPENDIX I ACCOUNTANT’S REPORT

Note:

The Group has initially applied HKFRS 16 using the modified retrospective approach and adjusted the opening balances at 1 May 2019 to recognise lease liabilities relating to leases which were previously classified as operating leases under HKAS 17. Comparative information as at 30 April 2019 has not been restated. Details for transitions to HKFRS 16 are set out in Note 2.2.

During the year ended 30 April 2020 and 2021, the total cash outflows for the leases are HK$1,486,000 and HK$1,742,000, respectively.

As at 30 April 2020 and 2021, the Group has entered into two and two leases, respectively, for premises with remaining lease terms of one to two years, respectively. These leases only subject to monthly fixed rental payment.

As at 30 April 2021, the Group has entered into a lease for a motor vehicle with remaining lease terms of 3.3 years. The lease only subjects to monthly fixed rental payment. The contract contains an option to purchase the motor vehicle at the end of the lease term.

As at 30 April 2021, lease liabilities amounting to HK$733,000 are effectively secured by the related underlying asset as the rights to the leased asset would be reverted to the lessor in the event of default by repayment by the Group.

24. BORROWINGS

As at 30 April 2019 2020 2021 Notes HK$’000 HK$’000 HK$’000

Bank borrowings, unsecured (a) — 6,618 2,316 Other borrowings, secured (b) — 29,866 —

— 36,484 2,316

(a) Bank borrowings, unsecured

As at 30 April 2020 and 2021, bank borrowings of HK$3,559,000 and HK$515,000, respectively, are unsecured, denominated in HK$, with terms of 2 years, carried interest at floating rate and jointly guaranteed by Mr. Woo and Mr. Grange up to a limit of HK$6,000,000 plus interest, fees and other amounts. The effective interest rate was 4.0% and 4.0% per annum, respectively, as at 30 April 2020 and 2021. The joint guarantee will be released upon [REDACTED].

As at 30 April 2020 and 2021, bank borrowings of HK$1,811,000 and HK$1,194,000, respectively, are unsecured, denominated in HK$, with terms of 3 years, carried interest at fixed rate and guaranteed by Mr. Woo up to a limit of HK$2,000,000 plus interest, fees and other amounts. The effective interest rate was 11.2% and 11.2% per annum, respectively, as at 30 April 2020 and 2021. The bank borrowings will be settled prior to [REDACTED].

As at 30 April 2020 and 2021, bank borrowings of HK$1,248,000 and HK$607,000, respectively, are unsecured, denominated in HK$, with terms of 2 years, carried interest at floating rate and guaranteed by Mr. Woo up to a limit of HK$1,300,000 plus interest, fees and other amounts. The effective interest rate was 4.0% and 4.0% per annum, respectively, as at 30 April 2020 and 2021. The guarantee will be released upon [REDACTED].

As at 30 April 2020 and 2021, all of the Group’s bank borrowings contain a repayable on demand clause which can be exercised at the banks’ sole discretion and are classified as current liabilities.

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APPENDIX I ACCOUNTANT’S REPORT

(b) Other borrowings, secured

During the year ended 30 April 2020, the Group entered into (i) agreements with a supplier for the sale of three yachts at a total consideration of EUR3,275,000 (equivalent to approximately HK$28,172,000); and (ii) agreements to repurchase the aforesaid yachts at the same price on or before 31 July 2020 or 31 December 2020. The directors of the Company considered the sale and buyback transaction as other borrowings secured by the three yachts included in the Group’s inventories with carrying amount of HK$23,944,000 and reclassified the trade payables to that supplier of EUR3,275,000 (equivalent to approximately HK$28,172,000) to other borrowings. As at 30 April 2020, other borrowings of HK$18,513,000 and HK$6,353,000 are interest-free and repayable on or before 31 July 2020 and 31 December 2020, respectively. Such borrowings were fully repaid during the year ended 30 April 2021.

During the year ended 30 April 2020, the Group entered into an agreement with an independent third party for (i) the sale of a yacht at a total consideration of HK$5,000,000 and (ii) the lease of the aforesaid yacht at a fixed monthly rental amount which the Group has the option to purchase the yacht at the same price on or before 24 March 2021.

During the year ended 30 April 2021, the Group entered into an agreement with an independent third party for (i) the sale of a yacht at a total consideration of HK$10,000,000 and (ii) the lease of the aforesaid yacht at a fixed monthly rental amount which the Group has the option to purchase the yacht at the same price on or before 16 June 2021.

The directors of the Company considered the sale and leaseback transactions as other borrowings as the transfers of yachts do not satisfy requirements as a sale in accordance with HKFRS 15.

As at 30 April 2020, other borrowings of HK$5,000,000 are secured by the yachts included in the Group’s inventories with carrying amount of HK$7,500,000, with term of one year and bear interest at fixed rate. The other borrowings were denominated in HK$, with effective interest rate of 7.0% per annum and were guaranteed by Mr. Woo and Mr. Grange up to a limit of HK$5,000,000.

Other borrowings of HK$15,000,000 has been fully repaid during the year ended 30 April 2021.

As at 30 April 2020, other borrowings of HK$29,866,000 are secured by inventories with aggregate carrying amounts of HK$31,444,000 (Note 17).

25. CONVERTIBLE BONDS

Group and Company

On 14 June 2018, the Group entered into a subscription agreement (the ‘‘Subscription Agreement’’) with the two investors (the ‘‘Investors’’) in relation to the subscription of the 3% coupon convertible bonds of the Company (the ‘‘Convertible Bonds’’) at an aggregate principal amount of HK$8,000,000 due on the date falling the expiry of two years from the date of issue (the ‘‘Maturity Date’’). The Company is not permitted to redeem the entire or part of the outstanding amount under the Convertible Bonds before the Maturity Date, save as pursuant to the provisions set out in Subscription Agreement. The Convertible Bonds are guaranteed by Mr. Woo and Mr. Grange and were issued by the Company on 1 November 2018.

The Convertible Bonds can be converted into fully paid ordinary shares of HK$0.01 each of the Company at a conversion price of HK$4,000,000 per share. All Convertible Bonds will mandatorily and automatically be converted into ordinary shares immediately after receiving the approval of the [REDACTED] of the Company’s shares on GEM (the ‘‘[REDACTED]’’) and permission to deal in the shares of the Company on GEM issued by the Stock Exchange but in any event no later than one business day before the [REDACTED].

–I-45– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

On initial recognition, the fair value of the liability component, included in the convertible bonds, was calculated using a market interest rate of 5.4% for an equivalent non-convertible bond. The residual amount of the fair value of the proceeds received, representing the value of the equity conversion component, is included in equity heading ‘‘Convertible bonds reserve’’.

During the year ended 30 April 2021, the Company entered into agreements with the Investors that the maturity date of the Convertible Bonds was extended to 30 April 2021 and further to 31 July 2021. The conversion price of the Convertible Bonds was amended from HK$4,000,000 per share to HK$800,000 per share. The modification resulted in a gain on modification of HK$138,000 and included in other net (loss)/ gain.

The movement of the liability component of the Convertible Bonds during the Track Record Period is as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

At 1 May — 7,834 8,259 Issue of convertible bonds 7,630 — — Imputed interest expense (Note 7) 204 425 432 Gain on modification — — (138) Repayment of interest — — (480)

At 30 April 7,834 8,259 8,073

Imputed interest expense of the Convertible Bonds is calculated using the effective interest method by applying effective interest rate of 5.4% per annum to the liability component.

26. DEFERRED TAXATION

The movement in the deferred tax liabilities/(assets) during the Track Record Period is as follows:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

At beginning of year 14 (59) (593) Recognised in profit or loss (Note 10) (73) (548) 10 Exchange differences — 14 (13)

At end of year (59) (593) (596)

–I-46– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

The movement in the deferred tax assets and liabilities (prior to offsetting of balances within the same taxation jurisdiction) during the Track Record Period is as follows:

Deferred tax assets

Allowance for inventories and ECL allowance Tax losses Other Total HK$’000 HK$’000 HK$’000 HK$’000

At 1 May 2018 52 — — 52 Recognised in profit or loss 37 341 45 423

At 30 April 2019 and 1 May 2019 89 341 45 475 Recognised in profit or loss 211 71 81 363 Exchange differences — (14) — (14)

At 30 April 2020 and 1 May 2020 300 398 126 824 Recognised in profit or loss (45) — (43) (88) Exchange differences — 13 — 13

At 30 April 2021 255 411 83 749

Deferred tax liabilities

Accelerated tax depreciation HK$’000

At 1 May 2018 66 Recognised in profit or loss 350

At 30 April 2019 and 1 May 2019 416 Recognised in profit or loss (185)

At 30 April 2020 and 1 May 2020 231 Recognised in profit or loss (78)

At 30 April 2021 153

As at 30 April 2019, 2020 and 2021, the Group has unrecognised tax losses of nil, HK$847,000 and HK$1,063,000 respectively, to carry forward against future taxable income. These tax losses do not expire under current legislation.

–I-47– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

27. CAPITAL AND RESERVES

(a) Share capital

Group

For the purpose of the preparation of the consolidated statements of financial position, the balance of share capital at 1 May 2018 represents the aggregate of the paid up share capital of the Operating Companies comprising the Group prior to the Reorganisation.

With the completion of the Reorganisation on 29 October 2018, the Company became the holding company of the Group and the share capital as at 30 April 2019, 2020 and 2021 represents the issued share capital of the Company comprising 13 ordinary shares of HK$0.01 each. Details of the movements in the share capital of the Company since its date of incorporation to 30 April 2019, 2020 and 2021 are detailed below.

Company

Number Nominal value Notes of shares of shares HK$’000

Authorised: Ordinary shares of HK$0.01 each Ordinary shares upon incorporation (i) 38,000,000 380

At 30 April 2019, 30 April 2020 and 30 April 2021 38,000,000 380

Issued and fully paid: Ordinary shares of HK$0.01 each Issued upon incorporation (i) 1 —* Allotment of shares (ii) 12 —*

At 30 April 2019, 30 April 2020 and 30 April 2021 13 —*

* Less than HK$1,000.

Notes:

(i) The Company was incorporated on 16 October 2018 with an authorised share capital of HK$380,000, comprising 38,000,000 ordinary shares of HK$0.01 each. On incorporation, one fully paid share was allotted and issued credited as fully paid.

(ii) On 29 October 2018, all the issued share capital of the Operating Companies was transferred from Mr. Woo and Mr. Grange to the Group at the consideration of six ordinary shares of HK$0.01 each allotted and issued by the Company to each of Mr. Woo and Mr. Grange. These shares rank pari passu with the existing shares in all respects.

–I-48– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

(b) Reserves

Group

(i) Capital reserve

The capital reserve represents the reclassification of share capital of the Operating Companies upon the completion of the Reorganisation.

(ii) Translation reserve

The translation reserve comprises all foreign currency translation differences arising from the translation of the financial statements of operations outside Hong Kong. The reserve is dealt with in accordance with the accounting policy set out in Note 2.5(c).

(iii) Convertible bonds reserve

Convertible bonds reserve represents the equity component of convertible bonds issued and remained unexercised at the reporting dates.

Company

Retained earnings/ Share Convertible (Accumulated Total premium bonds reserve losses) reserves HK$’000 HK$’000 HK$’000 HK$’000

At date of incorporation — — — — Profit for the period — — 9,981 9,981 Reorganisation (Note) 31,607 — — 31,607 Issue of Convertible Bonds (Note 25) — 370 — 370 Dividend paid (Note 11) — — (9,000) (9,000)

At 30 April 2019 31,607 370 981 32,958 Loss for the year — — (4,327) (4,327) Dividend paid (Note 11) — — (13,000) (13,000)

At 30 April 2020 and 1 May 2020 31,607 370 (16,346) 15,631 Profit for the year — — 7,608 7,608

At 30 April 2021 31,607 370 (8,738) 23,239

Note:

Share premium of HK$31,607,000 represents the difference between the carrying value of the Operating Companies acquired on 29 October 2018 pursuant to the Reorganisation over the nominal value of the share capital of the Company issued in exchange thereof. For details, please refer to Note 1.2.

–I-49– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

28. LEASE COMMITMENTS

As Lessee

At 30 April 2020 and 2021, the Group has no lease commitments. At 30 April 2019, the total future minimum lease payments payable by the Group under non-cancellable operating leases are as follows:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Within one year 1,560 — — In the second to fifth years 2,255 — —

3,815 — —

29. RELATED PARTY TRANSACTIONS

In addition to the balances and transactions detailed elsewhere in the Historical Financial Information, the Group had the following related party transactions during the Track Record Period:

(a) Key management personnel remuneration

Key management of the Group are members of the board of directors and senior management. Included in employee benefit expenses are key management personnel remuneration which includes the following expenses:

Year ended 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Basic salaries and allowances and discretionary bonuses 4,395 5,240 5,349 Retirement benefit scheme contributions 67 80 87

4,462 5,320 5,436

30. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS

(a) Significant non-cash transactions

(i) During the years ended 30 April 2019, 2020 and 2021, the increase in inventories of HK$7,000,000, nil and nil, respectively, were in respect of non-cash considerations paid by customers for settling trade receivables of yacht sales.

–I-50– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

(ii) During the years ended 30 April 2019, 2020 and 2021, the increase in inventories of HK$12,590,000, HK$17,605,000 and HK$15,000,000, respectively, were in respect of non-cash considerations received from customers for settling sales deposits of yacht sales.

(iii) During the year ended 30 April 2019, the directors assigned their amounts due from AML and MTL, respectively, to MIL. Accordingly, the amounts due from directors of HK$3,128,000 were offset against the amount due to a director.

During the year ended 30 April 2020, a director assigned his amount due from AML and amounts due to MTL and MIL Singapore, respectively, to MIL. Accordingly, the amount due from a director of HK$10,974,000 were offset against the amount due to a director.

(iv) During the year ended 30 April 2019, the Group transferred inventories of HK$4,635,000 to property, plant and equipment.

(v) During the year ended 30 April 2019, inventories with carrying amount of HK$9,680,000 were transferred to the directors for a corresponding increase in amounts due from directors.

(vi) During the year ended 30 April 2019, an interim dividend for a total of HK$9,000,000 for the period ended 31 January 2019 has been proposed and approved by the board of directors of the Company and was fully paid by offsetting against the amounts due from directors.

During the year ended 30 April 2020, an interim dividend for a total of HK$13,000,000, for the year ended 30 April 2020 has been proposed and approved by the board of directors of the Company and was fully paid by offsetting against the amounts due from directors.

(vii) During the year ended 30 April 2019, a customer has paid HK$42,157,000 directly to a supplier, of which HK$32,442,000, HK$847,000 and HK$8,868,000 were used for the purchase of the Groups’ inventories, prepayments to a supplier and settling the Group’s trade payables, respectively.

During the year ended 30 April 2020, a customer has paid HK$18,185,000 directly to a supplier for prepayments to a supplier.

During the year ended 30 April 2021, a customer has paid HK$15,993,000 directly to a supplier, for prepayments of HK$14,055,000 to a supplier and settling the Group’s other borrowings of HK$1,938,000, respectively.

(viii) During the year ended 30 April 2020, the Group assigned an amount due from a non- controlling shareholder of HK$23,181,000 to a director, resulting in a decrease in amount due from a non-controlling shareholder of HK$23,181,000 with a corresponding increase in amounts due from directors.

(ix) During the year ended 30 April 2021, the Group assigned trade receivables from customers of HK$7,696,000 for settling the Group’s trade payables.

–I-51– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

(b) Reconciliation of liabilities arising from financing activities

The table below set out the reconciliation of liabilities arising from financing activities during the Track Record Period.

Amount due Convertible Lease to a director Borrowings bonds liabilities Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 1 May 2018 3,329 — — — 3,329

Cashflows: Net increase in amount due to a director 52 — — — 52 Proceed from issue of Convertible Bonds — — 8,000 — 8,000 Proceeds from borrowings — 18,900 — — 18,900 Repayments of borrowings — (18,900) — — (18,900) Interests paid — (410) — — (410)

Non-cash transactions: Assignments of current accounts (Note 30(a)(iii)) (3,128) — — — (3,128) Equity component of Convertible Bonds — — (370) — (370) Interest accrued — 410 204 — 614

At 30 April 2019 and 1 May 2019 253 — 7,834 — 8,087 Adjustment from the adoption of HKFRS 16 (Note 2.2) — — — 3,553 3,553

At 1 May 2019 (adjusted) 253 — 7,834 3,553 11,640

Cashflows: Net increase in amount due to a director 10,832 — — — 10,832 Proceeds from borrowings — 14,300 — — 14,300 Repayment of borrowings — (5,278) — — (5,278) Capital element of lease rentals paid — — — (1,366) (1,366) Interest element of lease rentals paid — — — (120) (120) Interests paid — (272) — — (272)

Non-cash transactions: Interest accrued — 272 425 120 817 Increase in other borrowings (Note 24(b)) — 28,172 — — 28,172 Assignment of current accounts (Note 30(a)(iii)) (10,974) — — — (10,974) Exchange adjustments — (710) — — (710)

At 30 April 2020 and 1 May 2020 111 36,484 8,259 2,187 47,041

Cashflows: Net increase in amount due to a director 6 — — — 6 Proceeds from borrowings — 10,000 — — 10,000 Repayment of borrowings — (42,230) — — (42,230) Capital element of lease rentals paid — — — (1,655) (1,655) Interest element of lease rentals paid — — — (87) (87) Interests paid — (1,072) (480) — (1,552)

Non-cash transactions: Entering into new lease — — — 888 888 Interest accrued — 1,072 432 87 1,591 Gain on modification — — (138) — (138) Decrease in other borrowings (Note 30(a)(vii)) — (1,938) — — (1,938)

At 30 April 2021 117 2,316 8,073 1,420 11,926

–I-52– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

31. FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS

The Group is exposed to financial risks through its use of financial instruments in its ordinary course of operations. The financial risks include credit risk, liquidity risk and market risk (including interest rate risk and foreign currency risk). The Group’s overall risk management strategy seeks to minimise potential adverse effects on the Group’s financial performance. Risk management is carried out by the senior management of the Group and approved by the board of directors.

31.1 Categories of financial assets and liabilities

The carrying amounts presented in the consolidated statements of financial position relate to the following categories of financial assets and financial liabilities:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Financial assets Trade and other receivables 24,359 3,579 4,155 Amounts due from directors 2,589 5,929 12,426 Amount due from a non-controlling shareholder 15,417 737 737 Bank balances and cash 8,241 22,937 39,714

50,606 33,182 57,032

Financial liabilities Trade and other payables 39,561 28,589 21,366 Lease liabilities — 2,187 1,420 Amount due to a director 253 111 117 Amount due to a non-controlling shareholder — 744 848 Borrowings — 36,484 2,316 Convertible bonds 7,834 8,259 8,073

47,648 76,374 34,140

31.2 Credit risk

Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge its obligation under the terms of the financial instrument and cause a financial loss to the Group. The Group’s maximum exposure to credit risk on recognised financial assets is limited to the carrying amount at end of each reporting period as summarised in Note 31.1.

In respect of trade receivables and amounts due from directors and a non-controlling shareholder, individual credit evaluations are performed on all customers and counterparties. These evaluations focus on the counterparty’s financial position, past history of making payments and take into account information specific to the counterparty as well as pertaining to the economic environment in which the counterparty operates. In addition, in respect of sale of yachts, deposits and full payments are required before delivery of the yacht. Monitoring procedures have been implemented to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade receivable balance and amounts due from directors and a non-controlling shareholder at the end of each reporting period to ensure adequate impairment losses are made for irrecoverable amounts.

–I-53– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information. Internal credit rating, actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower’s ability to meet its obligations, actual or expected significant changes in the operating results of the borrower and significant changes in the expected performance and behavior of the borrower including changes in the payment status of borrowers in the Group are indicators to be incorporated.

The Group accounts for its credit risk by appropriately providing for ECL on a timely basis. In calculating the ECL rates, the Group considers historical elements and forward-looking elements.

Trade receivables

The Group applies the simplified approach to providing for ECL prescribed by HKFRS 9, which permits the use of the lifetime ECL provision for all trade receivables.

The Group assesses ECL allowance for trade receivables on an individual basis. As at 30 April 2019 and 2020, ECL allowance for trade receivables of HK$118,000 and HK$515,000, respectively, were recognised for trade receivables aged over 18 months at ECL rate of 100%, while ECL allowance for trade receivables is not material for trade receivables aged within 18 months. As at 30 April 2021, ECL allowance for trade receivables of HK$790,000 were recognised for trade receivables aged over 12 months at ECL rate of 100%, while ECL allowance for trade receivables is not material for trade receivables aged within 12 months.

Other receivables, amounts due from directors and amount due from a non-controlling shareholder

As at 30 April 2019, 2020 and 2021, the Group assesses the ECL for other receivables, amounts due from directors and amount due from a non-controlling shareholder using the 12 months expected losses method as there has not been a significant increase in credit risk in these receivables since initial recognition. The Group considered the credit risk associated with these receivables to be low, thus no loss allowance provision was recognised during the Track Record Period.

Bank balances

The credit risk for bank balances is considered negligible as the counterparties are reputable banks in Hong Kong or Singapore with high credit ratings.

31.3 Liquidity risk

Liquidity risk relates to the risk that the Group will not be able to meet its obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group is exposed to liquidity risk in respect of settlement of trade and other payables, lease liabilities, amounts due to a director and a non-controlling shareholder, borrowings and Convertible Bonds, and also in respect of its cash flow management. The Group’s objective is to maintain an appropriate level of liquid assets and committed lines of funding to meet its liquidity requirements in the short and longer term.

–I-54– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

As at 30 April 2019, except for Convertible Bonds, the Group’s remaining contractual maturities for its financial liabilities will be either on demand or within one year. As at 30 April 2020 and 2021, except for lease liabilities with remaining contractual maturity over 1 year but within 5 years, the Group’s remaining contractual maturities for its financial liabilities (including borrowings that contain a repayment on demand clause which can be exercised at the lender’s sole discretion) will be either on demand or within one year. The carrying amounts of its financial liabilities approximate their contractual undiscounted cash flows.

Analysed below is the Group’s remaining contractual maturities, based on the undiscounted cash flows, for its lease liabilities, borrowings and Convertible Bonds as at 30 April 2019, 2020 and 2021.

Over 1 year Within 1 year but within Carrying or on demand 5years Total amount HK$’000 HK$’000 HK$’000 HK$’000

At 30 April 2019 Convertible bonds — 8,480 8,480 7,834

At 30 April 2020 Lease liabilities 1,560 695 2,255 2,187 Borrowings 34,773 2,446 37,219 36,484 Convertible bonds 8,480 — 8,480 8,259

44,813 3,141 47,954 46,930

At 30 April 2021 Lease liabilities 937 544 1,481 1,420 Borrowings 1,925 521 2,446 2,316 Convertible bonds 8,144 — 8,144 8,073

11,006 1,065 12,071 11,809

31.4 Interest rate risk

Interest rate risk relates to the risk that the fair value or cash flows of a financial instrument will fluctuate because of changes in the market interest rates. The Group’s interest rate risk arises primarily from bank borrowings. Bank borrowings bearing variable rates expose the Group to cash flow interest rate risk. The exposure to interest rates for the Group’s bank balances is considered immaterial.

As at 30 April 2019 2020 2021 Effective Effective Effective interest interest interest rate HK$’000 rate HK$’000 rate HK$’000

Variable rate borrowings — — 4.0% 4,807 4.0% 1,122

As at 30 April 2020 and 2021, it is estimated that a general increase/decrease of 100 basis points in interest rates, with all other variables held constant, would decrease/increase the Group’s profit after tax and retained earnings by approximately HK$40,000 and HK$9,000, respectively. Other components of equity would not change in response to the general increase/decrease in interest rates.

–I-55– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

The assumed changes in interest rates are considered to be reasonably possible based on observation of current market conditions and represents management’s assessment of a reasonably possible change in interest rate over the next 12-month period.

The calculations are based on a change in average market interest rates for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant. The sensitivity analysis included in the Historical Financial Information for the years ended 30 April 2019, 2020 and 2021 has been prepared on the same basis.

31.5 Foreign currency risk

The Group operates mainly in Hong Kong and Singapore and majority of the transactions are denominated and settled in the functional currency of the Group’s respective entities, except for certain yacht purchases and sales and bank balances which are denominated in European dollars (‘‘EUR’’).

Foreign currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. The Group has not entered into any financial instruments for hedging purpose during the Track Record Period.

The following tables detail the Group’s material exposure at the reporting dates to foreign currency risk arising from recognised monetary assets and liabilities denominated in currencies other than the functional currency of respective entities within the Group:

EUR As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Trade and other receivables 18,645 689 185 Bank balances 5,049 3,709 30,771 Trade and other payables (28,230) (1,055) (787) Borrowings — (24,866) —

Overall net exposure (4,536) (21,523) 30,169

As at 30 April 2019, if EUR weakened/strengthened by 10% against HK$ with all other variables held constant, post-tax loss for the year would have been HK$379,000 lower/higher and retained earnings would have been HK$379,000 higher/lower mainly as a result of foreign exchange gains/losses on translation of EUR denominated assets and liabilities stated above.

As at 30 April 2020, if EUR weakened/strengthened by 10% against HK$ with all other variables held constant, post-tax profit and retained earnings for the year would have been HK$1,797,000 higher/ lower mainly as a result of foreign exchange gains/losses on translation of EUR denominated assets and liabilities stated above.

As at 30 April 2021, if EUR weakened/strengthened by 10% against HK$ with all other variables held constant, post-tax profit for the year and retained earnings would have been HK$2,519,000 lower/ higher mainly as a result of foreign exchange losses/gains on translation of EUR denominated assets and liabilities stated above.

31.6 Fair value measurements

The carrying amounts of the Group’s financial assets and liabilities are not materially different from their fair values at the end of each of the Track Record Period due to their short maturities.

–I-56– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

32. CAPITAL MANAGEMENT

The objectives of the Group when managing capital are to safeguard the ability of the Group in continuing as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to enhance shareholders’ value in the long term.

The Group actively and regularly reviews its capital structure and makes adjustments in light of changes in economic conditions. The Group monitors its capital structure on the basis of the gearing ratio. The gearing ratio is calculated based on total borrowings divided by the total equity at each reporting date. In order to maintain or adjust the ratio, the Group may adjust the amount of dividends paid to shareholders, issue new shares, raise new debt financing or sell assets to reduce debt.

The gearing ratio at each reporting date was:

As at 30 April 2019 2020 2021 HK$’000 HK$’000 HK$’000

Lease liabilities — 2,187 1,420 Amount due to a director 253 111 117 Borrowings — 36,484 2,316 Convertible bonds 7,834 8,259 8,073

Total borrowings 8,087 47,041 11,926

Total equity 23,318 15,631 42,797

Gross gearing ratio (%) 34.7% 300.9% 27.9%

33. SUBSEQUENT EVENTS

Save as disclosed elsewhere in this report, the following significant events took place subsequent to 30 April 2021:

(i) After the outbreak of the Novel Coronavirus, or known as the COVID-19, in early 2020, a series of precautionary and control measures have been and will continue to be implemented across the offices in Hong Kong and Singapore. The directors of the Company have closely monitored the development of the outbreak of COVID-19 and kept regular communications with its customers and suppliers to understand whether there would be any significant impacts on the Group’s business.

Based on the currently available information, the directors of the Company consider that the COVID-19 event would not have a material financial impact to the Group. However, given the inherent unpredictable nature and rapid development relating to COVID-19, the directors of the Company will continue to closely monitor in this regard.

(ii) On [‧], the Company allotted and issued [49] shares of HK$0.01 each to Bright Emerald.

(iii) On [‧], the Company allotted and issued [five] shares of HK$0.01 each to each of the Investors for the conversion of Convertible Bonds pursuant to the Subscription Agreement. Therefore, after the capitalisation issue as set out at point (v) below (the ‘‘Capitalisation Issue’’), the Investors will each be interested in [five] shares immediately before the completion of the Capitalisation Issue or [REDACTED] shares (representing [REDACTED] times of [five] shares) immediately after the completion of the Capitalisation Issue, in proportion to their respective shareholdings before the Capitalisation Issue.

–I-57– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX I ACCOUNTANT’S REPORT

(iv) Pursuant to a shareholder resolution dated [‧] and subject to the share premium account of the Company being credited as a result of the allotment and issue of the new shares under the [REDACTED],uptoHK$[REDACTED] standing to the credit of the share premium account of the Company shall be capitalised and applied to pay up in full at par the allotment and issue of an additional [REDACTED] shares to the shareholders whose names appear on the register of members of the Company on the business day immediately preceding the [REDACTED], each ranking pari passu in all respects with the then existing issued shares in proportion as nearly as may be to their respective shareholding in the Company without involving fractions were approved.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company or any of the companies now comprising the Group in respect of any period subsequent to 30 April 2021 and up to the date of this report. No dividend or distribution has been declared or paid by the Company or any of the companies now comprising of the Group in respect of any period subsequent to 30 April 2021.

–I-58– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following information does not form part of the Accountant’s Report from the Company’s reporting accountant, Grant Thornton Hong Kong Limited, Certified Public Accountants, Hong Kong, as set out in Appendix I to this document, and is included herein for information purposes only. The unaudited pro forma financial information should be read in conjunction with the section headed ‘‘Financial Information’’ of this document and the Accountant’s Report set out in Appendix I to this document.

A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS

The following unaudited pro forma statement of adjusted net tangible assets of the Group prepared in accordance with Rule 7.31 of the GEM Listing Rules and with reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants is to illustrate the effect of the [REDACTED] on the net tangible assets of the Group attributable to owners of the Company as at 30 April 2021 as if the [REDACTED] had taken place on that date.

The unaudited pro forma statement of adjusted net tangible assets of the Group has been prepared for illustrative purposes only and, because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of the Group as at 30 April 2021 or at any future date. The unaudited pro forma statement of adjusted net tangible assets of the Group is prepared based on the audited consolidated net tangible assets of the Group attributable to owners of the Company as at 30 April 2021 as set out in the Accountant’s Report of the Company, the text of which is set out in Appendix I to this document, and adjusted as described below. The unaudited pro forma statement of adjusted net tangible assets does not form part of the Accountant’s Report.

Audited consolidated Unaudited pro net tangible Estimated forma adjusted assets of the impact of the net tangible Group conversion of assets of the Unaudited pro attributable to Estimated net the Group forma adjusted owners of the [REDACTED] [REDACTED] attributable to net tangible Company as at from the Convertible owners of the assets per 30 April 2021 [REDACTED] Bonds Company Share HK$’000 HK$’000 HK$’000 HK$’000 HK$ (Note 1) (Note 2) (Note 3) (Note 4)

Basedonthe[REDACTED] of HK$[REDACTED] per Share [43,520] [REDACTED] [REDACTED] [REDACTED] [REDACTED]

–II-1– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

Notes:

(1) The audited consolidated net tangible assets of the Group attributable to owners of the Company as at 30 April 2021 is extracted from the Accountant’s Report of the Company as set out in Appendix I to this document, which is based on the audited consolidated net assets of the Group attributable to owners of the Company as at 30 April 2021 of HK$43,520,000.

(2) The estimated net [REDACTED] from the [REDACTED] are based on [REDACTED] [REDACTED] at the [REDACTED] of HK$[REDACTED] and HK$[REDACTED] per Share after deduction of the estimated [REDACTED] fees and other estimated [REDACTED] expected to be incurred by the Group subsequent to 30 April 2021. The calculation of such estimated net [REDACTED] does not take into account of [any Shares which may be allotted and issued upon the exercise of the [REDACTED] or any options that may be granted under the Share Option Scheme or] any Shares which may be allotted and issued or repurchased by the Company under the general mandates granted to the Directors.

(3) Immediately after receiving the approval of [REDACTED] andpermissiontodealintheShareson the GEM issued by the Stock Exchange but in any event no later than one business day before the [REDACTED],the[REDACTED] Convertible Bonds shall be mandatorily and automatically converted into ten new Shares. The [REDACTED] Convertible Bonds will be re-designated from liabilities to equity. Accordingly, for the purpose of the unaudited pro forma financial information, the unaudited pro forma adjusted net tangible assets of the Group attributable to the owners of the Company will be increased by approximately HK$[REDACTED].

(4) The unaudited pro forma adjusted net tangible assets per Share is arrived at after the adjustments referred to in the preceding paragraphs and on the basis of [REDACTED] Shares (being the number of ordinary shares expected to be in issue immediately after the issue of [REDACTED] Shares to Bright Emerald Enterprises Limited, the conversion of the [REDACTED] Convertible Bonds, the completion of the Capitalisation Issue and the [REDACTED]). No account has been taken of any Shares which may be [allotted and issued upon the exercise of the [REDACTED] or any options that may be granted under the Share Option Scheme or] allotted and issued or repurchased by the Company under the general mandates granted to the Directors.

(5) No adjustment has been made to reflect any trading result or other transactions of the Group entered into subsequent to 30 April 2021.

–II-2– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

[REDACTED]

–II-3– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

[REDACTED]

–II-4– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

[REDACTED]

–II-5– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Set out below is a summary of certain provisions of the Memorandum and Articles of Association of the Company and of certain aspects of Cayman company law.

The Company was incorporated in the Cayman Islands as an exempted company with limited liability on 16 October 2018 under the Companies Act, Cap 22 (Act 3 of 1961, as consolidated and revised) of the Cayman Islands (the ‘‘Companies Act’’). The Company’s constitutional documents consist of its Memorandum of Association (the ‘‘Memorandum’’) and its Articles of Association (the ‘‘Articles’’).

1. MEMORANDUM OF ASSOCIATION

(a) The Memorandum states, inter alia, that the liability of members of the Company is limited to the amount, if any, for the time being unpaid on the shares respectively held by them and that the objects for which the Company is established are unrestricted (including acting as an investment company), and that the Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided in section 27(2) of the Companies Act and in view of the fact that the Company is an exempted company that the Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands.

(b) The Company may by special resolution alter its Memorandum with respect to any objects, powers or other matters specified therein.

2. ARTICLES OF ASSOCIATION

The Articles were conditionally adopted on [‧] with effect from the [REDACTED]. The following is a summary of certain provisions of the Articles:

(a) Shares

(i) Classes of shares

The share capital of the Company consists of ordinary shares.

(ii) Variation of rights of existing shares or classes of shares

Subject to the Companies Act, if at any time the share capital of the Company is divided into different classes of shares, all or any of the special rights attached to the shares or any classofsharesmay(unlessotherwise provided for by the terms of issue of that class) be varied, modified or abrogated either with the consent in writing of the holders of not less than three fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting the provisions of the Articles relating to general meetings will mutatis mutandis

–III-1– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

apply, but so that the necessary quorum (other than at an adjourned meeting) shall be two persons holding or representing by proxy not less than one third in nominal value of the issued shares of that class and at any adjourned meeting two holders present in person or by proxy (whatever the number of shares held by them) shall be a quorum. Every holder of shares of the class shall be entitled to one vote for every such share held by him.

Any special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

(iii) Alteration of capital

The Company may by ordinary resolution of its members:

(i) increase its share capital by the creation of new shares;

(ii) consolidate all or any of its capital into shares of larger amount than its existing shares;

(iii) divide its shares into several classes and attach to such shares any preferential, deferred, qualified or special rights, privileges, conditions or restrictions as the Company in general meeting or as the directors may determine;

(iv) subdivide its shares or any of them into shares of smaller amount than is fixed by the Memorandum; or

(v) cancel any shares which, at the date of passing of the resolution, have not been taken and diminish the amount of its capital by the amount of the shares so cancelled.

The Company may reduce its share capital or any capital redemption reserve or other undistributable reserve in any way by special resolution.

(iv) Transfer of shares

All transfers of shares may be effected by an instrument of transfer in the usual or common form or in a form prescribed by The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) or in such other form as the board may approve and which may be under hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the board may approve from time to time.

–III-2– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Notwithstanding the foregoing, for so long as any shares are [REDACTED] on the Stock Exchange, titles to such [REDACTED] shares may be evidenced and transferred in accordance with the laws applicable to and the rules and regulations of the Stock Exchange that are or shall be applicable to such [REDACTED] shares. The register of members in respect of its [REDACTED] shares (whether the principal register or a branch register) may be kept by recording the particulars required by Section 40 of the Companies Act in a form otherwise than legible if such recording otherwise complies with the laws applicable to and the rules and regulations of the Stock Exchange that are or shall be applicable to such [REDACTED] shares.

The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that the board may dispense with the execution of the instrument of transfer by the transferee. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect of that share.

The board may, in its absolute discretion, at any time transfer any share upon the principal register to any branch register or any share on any branch register to the principal register or any other branch register.

The board may decline to recognise any instrument of transfer unless a fee (not exceeding the maximum sum as the Stock Exchange may determine to be payable) determined by the Directors is paid to the Company, the instrument of transfer is properly stamped (if applicable), it is in respect of only one class of share and is lodged at the relevant registration office or registered office or such other place at which the principal register is kept accompanied by the relevant share certificate(s) and such other evidence as the board may reasonably require to show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do).

The registration of transfers may be suspended and the register closed on giving notice by advertisement in any newspaper or by any other means in accordance with the requirements of the Stock Exchange, at such times and for such periods as the board may determine. The register of members must not be closed for periods exceeding in the whole thirty (30) days in any year.

Subject to the above, fully paid shares are free from any restriction on transfer and free of all liens in favour of the Company.

(v) Power of the Company to purchase its own shares

The Company is empowered by the Companies Act and the Articles to purchase its own shares subject to certain restrictions and the board may only exercise this power on behalf of the Company subject to any applicable requirements imposed from time to time by the Stock Exchange.

–III-3– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Where the Company purchases for redemption a redeemable share, purchases not made through the market or by tender must be limited to a maximum price determined by the Company in general meeting. If purchases are by tender, tenders must be made available to all members alike.

The board may accept the surrender for no consideration of any fully paid share.

(vi) Power of any subsidiary of the Company to own shares in the Company

There are no provisions in the Articles relating to ownership of shares in the Company by a subsidiary.

(vii)Calls on shares and forfeiture of shares

The board may from time to time make such calls upon the members in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium). A call may be made payable either in one lump sum or by installments. If the sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof, the person or persons from whom the sum is due shall pay interest on the same at such rate not exceeding twenty per cent. (20%) per annum as the board may agree to accept from the day appointed for the payment thereof to the time of actual payment, but the board may waive payment of such interest wholly or in part. The board may, if it thinks fit, receive from any member willing to advance the same, either in money or money’s worth, all or any part of the monies uncalled and unpaid or installments payable upon any shares held by him, and upon all or any of the monies so advanced the Company may pay interest at such rate (if any) as the board may decide.

If a member fails to pay any call on the day appointed for payment thereof, the board may serve not less than fourteen (14) clear days’ notice on him requiring paymentofsomuchofthecallasisunpaid, together with any interest which may have accrued and which may still accrue up to the date of actual payment and stating that, in the event of non payment at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the board to that effect. Such forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.

–III-4– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares but shall, notwithstanding, remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him to the Company in respect of the shares, together with (if the board shall in its discretion so require) interest thereon from the date of forfeiture until the date of actual payment at such rate not exceeding twenty per cent. (20%) per annum as the board determines.

(b) Directors

(i) Appointment, retirement and removal

At each annual general meeting, one third of the Directors for the time being (or if their number is not a multiple of three, then the number nearest to but not less than one third) shall retire from office by rotation provided that every Director shall be subject to retirement at an annual general meeting at least once every three years. The Directors to retire by rotation shall include any Director who wishes to retire and not offer himself for re-election. Any further Directors so to retire shall be those who have been longest in office since their last re election or appointment but as between persons who became or were last re elected Directors on the same day those to retire will (unless they otherwise agree among themselves) be determined by lot.

Neither a Director nor an alternate Director is required to hold any shares in the Company by way of qualification. Further, there are no provisions in the Articles relating to retirement of Directors upon reaching any age limit.

The Directors have the power to appoint any person as a Director either to fill a casual vacancy on the board or as an addition to the existing board. Any Director appointed to fill a casual vacancy shall hold office until the first general meeting of members after his appointment and be subject to re-election at such meeting and any Director appointed as an addition to the existing board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election.

A Director may be removed by an ordinary resolution of the Company before the expiration of his period of office (but without prejudice to any claim which such Director may have for damages for any breach of any contract between him and the Company) and members of the Company may by ordinary resolution appoint another in his place. Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two. There is no maximum number of Directors.

–III-5– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Theofficeofdirectorshallbevacatedif:

(aa) he resigns by notice in writing delivered to the Company;

(bb) he becomes of unsound mind or dies;

(cc) without special leave, he is absent from meetings of the board for six (6) consecutive months, and the board resolves that his office is vacated;

(dd) he becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;

(ee) he is prohibited from being a director by law; or

(ff) he ceases to be a director by virtue of any provision of law or is removed from office pursuant to the Articles.

The board may appoint one or more of its body to be managing director, joint managing director, or deputy managing director or to hold any other employment or executive office with the Company for such period and upon such terms as the board may determine and the board may revoke or terminate any of such appointments. The board may delegate any of its powers, authorities and discretions to committees consisting of such Director or Directors and other persons as the board thinks fit, and it may from time to time revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes, but every committee so formed must, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations that may from time to time be imposed upon it by the board.

(ii) Power to allot and issue shares and warrants

Subject to the provisions of the Companies Act and the Memorandum and Articles and to any special rights conferred on the holders of any shares or class of shares, any share may be issued (a) with or have attached thereto such rights, or such restrictions, whether with regard to dividend, voting, return of capital, or otherwise, as the Directors may determine, or (b) on terms that, at the option of the Company or the holder thereof, it is liable to be redeemed.

The board may issue warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for any class of shares or securities in the capital of the Company on such terms as it may determine.

–III-6– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Subject to the provisions of the Companies Act and the Articles and, where applicable, the rules of the Stock Exchange and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, all unissued shares in the Company are at the disposal of the board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times, for such consideration and on such terms and conditions as it in its absolute discretion thinks fit, but so that no shares shall be issued at a discount to their nominal value.

Neither the Company nor the board is obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to members or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate class of members for any purpose whatsoever.

(iii) Power to dispose of the assets of the Company or any of its subsidiaries

There are no specific provisions in the Articles relating to the disposal of the assets of the Company or any of its subsidiaries. The Directors may, however, exercise all powers and do all acts and things which may be exercised or done or approved by the Company and which are not required by the Articles or the Companies Act to be exercised or done by the Company in general meeting.

(iv) Borrowing powers

TheboardmayexerciseallthepowersoftheCompanytoraiseorborrow money, to mortgage or charge all or any part of the undertaking, property and assets and uncalled capital of the Company and, subject to the Companies Act, to issue debentures, bonds and other securities of the Company, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

(v) Remuneration

The ordinary remuneration of the Directors is to be determined by the Company in general meeting, such sum (unless otherwise directed by the resolution by which it is voted) to be divided amongst the Directors in such proportions and in such manner as the board may agree or, failing agreement, equally, except that any Director holding office for part only of the period in respect of which the remuneration is payable shall only rank in such division in proportion to the time during such period for which he held office. The Directors are also entitled to be prepaid or repaid all travelling, hotel and incidental expenses reasonably expected to be incurred or incurred by them in attending any

–III-7– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

board meetings, committee meetings or general meetings or separate meetings of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties as Directors.

Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the board go beyond the ordinary duties of a Director may be paid such extra remuneration as the board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration as a Director. An executive Director appointed to be a managing director, joint managing director, deputy managing director or other executive officer shall receive such remuneration and such other benefits and allowances as the board may from time to time decide. Such remuneration may be either in addition to or in lieu of his remuneration as a Director.

The board may establish or concur or join with other companies (being subsidiary companies of the Company or companies with which it is associated in business) in establishing and making contributions out of the Company’s monies to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or past Director who may hold or have held any executive office or any office of profit with the Company or any of its subsidiaries) and ex employees of the Company and their dependents or any class or classes of such persons.

The board may pay, enter into agreements to pay or make grants of revocable or irrevocable, and either subject or not subject to any terms or conditions, pensions or other benefits to employees and ex employees and their dependents, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex-employees or their dependents are or may become entitled under any such scheme or fund as is mentioned in the previous paragraph. Any such pension or benefit may, as the board considers desirable, be granted to an employee either before and in anticipation of, or upon or at any time after, his actual retirement.

The board may resolve to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund (including a share premium account and the profit and loss account) whether or not the same is available for distribution by applying such sum in paying up unissued shares to be allotted to (i) employees (including directors) of the Company and/or its affiliates (meaning any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the Company) upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such

–III-8– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

persons that has been adopted or approved by the members in general meeting, or (ii) any trustee of any trust to whom shares are to be allotted and issued by the Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the members in general meeting.

(vi) Compensation or payments for loss of office

Pursuant to the Articles, payments to any Director or past Director of any sum by way of compensation for loss of office or as consideration for or in connection with his retirement from office (not being a payment to which the Director is contractually entitled) must be approved by the Company in general meeting.

(vii)Loans and provision of security for loans to Directors

The Company must not make any loan, directly or indirectly, to a Director or his close associate(s) if and to the extent it would be prohibited by the Companies Ordinance (Chapter 622 of the laws of Hong Kong) as if the Company were a company incorporated in Hong Kong.

(viii)Disclosure of interests in contracts with the Company or any of its subsidiaries

A Director may hold any other office or place of profit with the Company (except that of the auditor of the Company) in conjunction with his office of Director for such period and upon such terms as the board may determine, and may be paid such extra remuneration therefor in addition to any remuneration provided for by or pursuant to the Articles. A Director may be or become a director or other officer of, or otherwise interested in, any company promoted by the Company or any other company in which the Company may be interested, and shall not be liable to account to the Company or the members for any remuneration, profits or other benefits received by him as a director, officer or member of, or from his interest in, such other company. The board may also cause the voting power conferred by the shares in any other company held or owned by the Company to be exercised in such manner in all respects as it thinks fit, including the exercise thereof in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company, or voting or providing for the payment of remuneration to the directors or officers of such other company.

No Director or proposed or intended Director shall be disqualified by his office from contracting with the Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company or the members for any remuneration, profit or other benefits realised by any such

–III-9– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

contract or arrangement by reason of such Director holding that office or the fiduciary relationship thereby established. A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company must declare the nature of his interest at the meeting of the board at which the question of entering into the contract or arrangement is first taken into consideration, if he knows his interest then exists, or in any other case, at the first meeting of the board after he knows that he is or has become so interested.

A Director shall not vote (nor be counted in the quorum) on any resolution of the board approving any contract or arrangement or other proposal in which he or any of his close associates is materially interested, but this prohibition does not apply to any of the following matters, namely:

(aa) any contract or arrangement for giving to such Director or his close associate(s) any security or indemnity in respect of money lent by him or any of his close associates or obligations incurred or undertaken by him or any of his close associates at the request of or for the benefit of the Company or any of its subsidiaries;

(bb) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his close associate(s) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

(cc) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his close associate(s) is/are or is/are to be interested as a participant in the underwriting or sub underwriting of the offer;

(dd) any contract or arrangement in which the Director or his close associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company; or

(ee) any proposal or arrangement concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death, or disability benefits scheme or other arrangement which relates both to Directors, his close associates and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director, or his close associate(s), as such any privilege or advantage not accorded generally to the class of persons to which such scheme or fund relates.

–III-10– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

The board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it considers appropriate. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman of the meeting shall have an additional or casting vote.

(d) Alterations to constitutional documents and the Company’s name

The Articles may be rescinded, altered or amended by the Company in general meeting by special resolution. The Articles state that a special resolution shall be required to alter the provisions of the Memorandum, to amend the Articles or to change the name of the Company.

(e) Meetings of members

(i) Special and ordinary resolutions

A special resolution of the Company must be passed by a majority of not less than three fourths of the votes cast by such members as, being entitled so to do, vote in person or, in the case of such members as are corporations, by their duly authorised representatives or, where proxies are allowed, by proxy at a general meeting of which notice has been duly given in accordance with the Articles.

Under the Companies Act, a copy of any special resolution must be forwarded to the Registrar of Companies in the Cayman Islands within fifteen (15) days of being passed.

An ordinary resolution is defined in the Articles to mean a resolution passed by a simple majority of the votes of such members of the Company as, being entitled to do so, vote in person or, in the case of corporations, by their duly authorised representatives or, where proxies are allowed, by proxy at a general meeting of which notice has been duly given in accordance with the Articles.

(ii) Voting rights and right to demand a poll

Subject to any special rights or restrictions as to voting for the time being attached to any shares, at any general meeting on a poll every member present in person or by proxy or, in the case of a member being a corporation, by its duly authorised representative shall have one vote for every fully paid share of which heistheholderbutsothatnoamountpaiduporcreditedaspaiduponasharein advance of calls or installments is treated for the foregoing purposes as paid up on the share. A member entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

–III-11– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

At any general meeting a resolution put to the vote of the meeting is to be decided by way of a poll save that the chairman of the meeting may in good faith, allow a resolution which relates purely to a procedural or administrative matter to bevotedonbyashowofhandsinwhichcaseeverymemberpresentinperson(or being a corporation, is present by a duly authorised representative), or by proxy(ies) shall have one vote provided that where more than one proxy is appointed by a member which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands.

If a recognised clearing house (or its nominee(s)) is a member of the Company it may authorise such person or persons as it thinks fit to act as its representative(s) at any meeting of the Company or at any meeting of any class of members of the Company provided that, if more than one person is so authorised, the authorisation shall specify the number and class of shares in respect of which each such person is so authorised. A person authorised pursuant to this provision shall be deemed to have been duly authorised without further evidence of the facts andbeentitledtoexercisethesamepowers on behalf of the recognised clearing house (or its nominee(s)) as if such person was the registered holder of the shares of the Company held by that clearing house (or its nominee(s)) including, where a show of hands is allowed, the right to vote individually on a show of hands.

Where the Company has any knowledge that any shareholder is, under the rules of the Stock Exchange, required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against any particular resolution of the Company, any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted.

(iii) Annual general meetings and extraordinary general meetings

The Company must hold an annual general meeting of the Company every year within a period of not more than fifteen (15) months after the holding of the last preceding annual general meeting or a period of not more than eighteen (18) months from the date of adoption of the Articles, unless a longer period would not infringe the rules of the Stock Exchange.

Extraordinary general meetings may be convened on the requisition of one or more shareholders holding, at the date of deposit of the requisition, not less than one-tenth of the paid up capital of the Company having the right of voting at general meetings. Such requisition shall be made in writing to the board or the secretary for the purpose of requiring an extraordinary general meeting to be called by the board for the transaction of any business specified in such requisition. Such meeting shall be held within 2 months after the deposit of such requisition. If within 21 days of such deposit, the board fails to proceed to convene such meeting, the requisitionist(s) himself/herself (themselves) may do so

–III-12– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

in the same manner, and all reasonable expenses incurred by the requisitionist(s) as a result of the failure of the board shall be reimbursed to the requisitionist(s) by the Company.

(iv) Notices of meetings and business to be conducted

An annual general meeting must be called by notice of not less than twenty- one (21) clear days and not less than twenty (20) clear business days. All other general meetings must be called by notice of at least fourteen (14) clear days and not less than ten (10) clear business days. The notice is exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and must specify the time and place of the meeting and particulars of resolutions to be considered at the meeting and, in the case of special business, the general nature of that business.

In addition, notice of every general meeting must be given to all members of the Company other than to such members as, under the provisions of the Articles or the terms of issue of the shares they hold, are not entitled to receive such notices from the Company, and also to, among others, the auditors for the time being of the Company.

Any notice to be given to or by any person pursuant to the Articles may be served on or delivered to any member of the Company personally, by post to such member’s registered address or by advertisement in newspapers in accordance with the requirements of the Stock Exchange. Subject to compliance with Cayman Islands law and the rules of the Stock Exchange, notice may also be served or delivered by the Company to any member by electronic means.

All business that is transacted at an extraordinary general meeting and at an annual general meeting is deemed special, save that in the case of an annual general meeting, each of the following business is deemed an ordinary business:

(aa) the declaration and sanctioning of dividends;

(bb) the consideration and adoption of the accounts and balance sheet and the reports of the directors and the auditors;

(cc) the election of directors in place of those retiring;

(dd) the appointment of auditors and other officers; and

(ee) the fixing of the remuneration of the directors and of the auditors.

–III-13– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

(v) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment of a chairman.

The quorum for a general meeting shall be two members present in person (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy and entitled to vote. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights the necessary quorum shall be two persons holding or representing by proxy not less than one third in nominal value of the issued shares of that class.

(vi) Proxies

Any member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company and is entitled to exercise the same powers on behalf of a member who is an individual and for whom he acts as proxy as such member could exercise. In addition, a proxy is entitled to exercise the same powers on behalf of a member which is a corporation and for which he acts as proxy as such member could exercise as if it were an individual member. Votes may be given either personally (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy.

(f) Accounts and audit

The board shall cause true accounts to be kept of the sums of money received and expended by the Company, and the matters in respect of which such receipt and expenditure take place, and of the property, assets, credits and liabilities of the Company and of all other matters required by the Companies Act or necessary to give a true and fair view of the Company’s affairs and to explain its transactions.

The accounting records must be kept at the registered office or at such other place or places as the board decides and shall always be open to inspection by any Director. No member (other than a Director) shall have any right to inspect any accounting record or book or document of the Company except as conferred by law or authorised by the board or the Company in general meeting. However, an exempted company must make available at its registered office in electronic form or any other medium, copies of its books of account or parts thereof as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands.

–III-14– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

A copy of every balance sheet and profit and loss account (including every document required by law to be annexed thereto) which is to be laid before the Company at its general meeting, together with a printed copy of the Directors’ report and a copy of the auditors’ report, shall not less than twenty-one (21) days before the date of the meeting and at the same time as the notice of annual general meeting be sent to every person entitled to receive notices of general meetings of the Company under the provisions of the Articles; however, subject to compliance with all applicable laws, including the rules of the Stock Exchange, the Company may send to such persons summarised financial statements derived from the Company’s annual accounts and the directors’ report instead provided that any such person may by notice in writing served on the Company, demand that the Company sends to him, in addition to summarised financial statements, a complete printed copy of the Company’s annual financial statement and the directors’ report thereon.

At the annual general meeting or at a subsequent extraordinary general meeting in each year, the members shall appoint an auditor to audit the accounts of the Company and such auditor shall hold office until the next annual general meeting. Moreover, the members may, at any general meeting, by special resolution remove the auditor at any time before the expiration of his terms of office and shall by ordinary resolution at that meeting appoint another auditor for the remainder of his term. The remuneration of the auditors shall be fixed by the Company in general meeting or in such manner as the members may determine.

The financial statements of the Company shall be audited by the auditor in accordance with generally accepted auditing standards which may be those of a country or jurisdiction other than the Cayman Islands. The auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the auditor must be submitted to the members in general meeting.

(g) Dividends and other methods of distribution

The Company in general meeting may declare dividends in any currency to be paid to the members but no dividend shall be declared in excess of the amount recommended by the board.

The Articles provide dividends may be declared and paid out of the profits of the Company, realised or unrealised, or from any reserve set aside from profits which the directors determine is no longer needed. With the sanction of an ordinary resolution dividends may also be declared and paid out of share premium account or any other fund or account which can be authorised for this purpose in accordance with the Companies Act.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide, (i) all dividends shall be declared and paid according to the amounts paid up on the shares in respect whereof the dividend is paid but no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share and (ii) all dividends shall be apportioned and paid pro rata according to the amount paid

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APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

up on the shares during any portion or portions of the period in respect of which the dividend is paid. The Directors may deduct from any dividend or other monies payable to any member or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

Whenever the board or the Company in general meeting has resolved that a dividend be paid or declared on the share capital of the Company, the board may further resolve either (a) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the shareholders entitled thereto will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment, or (b) that shareholders entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the board may think fit.

The Company may also upon the recommendation of the board by an ordinary resolution resolve in respect of any one particular dividend of the Company that it may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his registered address, or in the case of joint holders, addressed to the holder whose name stands first in the register of the Company in respect of the shares at his address as appearing in the register or addressed to such person and at such addresses as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable or property distributable in respect of the shares held by such joint holders.

Whenever the board or the Company in general meeting has resolved that a dividend be paid or declared the board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.

All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by the board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years after having been declared may be forfeited by the board and shall revert to the Company.

No dividend or other monies payable by the Company on or in respect of any share shall bear interest against the Company.

–III-16– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

(h) Inspection of corporate records

Pursuant to the Articles, the register and branch register of members shall be open to inspection for at least two (2) hours during business hours by members without charge, or by any other person upon a maximum payment of HK$2.50 or such lesser sum specified by the board, at the registered office or such other place at which the register is kept in accordance with the Companies Act or, upon a maximum payment of HK$1.00 or such lesser sum specified by the board, at the office where the branch register of members is kept, unless the register is closed in accordance with the Articles.

(i) Rights of minorities in relation to fraud or oppression

There are no provisions in the Articles relating to rights of minority shareholders in relation to fraud or oppression. However, certain remedies are available to shareholders of the Company under Cayman Islands law, as summarised in paragraph 3(f) of this Appendix.

(j) Procedures on liquidation

A resolution that the Company be wound up by the court or be wound up voluntarily shall be a special resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares:

(i) if the Company is wound up and the assets available for distribution amongst the members of the Company shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed pari passu amongst such members in proportion to the amount paid up on the shares held by them respectively; and

(ii) if the Company is wound up and the assets available for distribution amongst the members as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively.

If the Company is wound up (whether the liquidation is voluntary or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Companies Act divide among the members in specie or kind the whole or any part of the assets of the Company whether the assets shall consist of property of one kind or shall consist of properties of different kinds and the liquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. The liquidator

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APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority, shall think fit, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

(k) Subscription rights reserve

The Articles provide that to the extent that it is not prohibited by and is in compliance with the Companies Act, if warrants to subscribe for shares have been issued by the Company and the Company does any act or engages in any transaction which would result in the subscription price of such warrants being reduced below the par value of a share, a subscription rights reserve shall be established and applied in paying up the difference between the subscription price and the par value of a share on any exercise of the warrants.

3. CAYMAN ISLANDS COMPANY LAW

The Company is incorporated in the Cayman Islands subject to the Companies Act and, therefore, operates subject to Cayman Islands law. Set out below is a summary of certain provisions of Cayman company law, although this does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of Cayman company law and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar:

(a) Company operations

As an exempted company, the Company’s operations must be conducted mainly outside the Cayman Islands. The Company is required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorised share capital.

(b) Share capital

The Companies Act provides that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the value of the premiums on those shares shall be transferred to an account, to be called the ‘‘share premium account’’. At the option of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any other company and issued at a premium.

The Companies Act provides that the share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association in (a) paying distributions or dividends to members; (b) paying up unissued shares of the company to be issued to members as fully paid bonus shares; (c) the redemption and repurchase of shares (subject to the provisions of section 37 of the

–III-18– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Companies Act); (d) writing-off the preliminary expenses of the company; and (e) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unless immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course of business.

The Companies Act provides that, subject to confirmation by the Grand Court of the Cayman Islands (the ‘‘Court’’), a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles of association, by special resolution reduce its share capital in any way.

There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company to another person for the purchase of, or subscription for, its own or its holding company’s shares. Accordingly, a company may provide financial assistance if the directors of the company consider, in discharging their duties of care and acting in good faith, for a proper purpose and in the interests of the company, that such assistance can properly be given. Such assistance should be on an arm’s-length basis.

(d) Purchase of shares and warrants by a company and its subsidiaries

A company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a shareholder and the Companies Act expressly provides that it shall be lawful for the rights attaching to any shares to be varied, subject to the provisions of the company’s articles of association, so as to provide that such shares are to be or are liable to be so redeemed. In addition, such a company may, if authorised to do so by its articles of association, purchase its own shares, including any redeemable shares. However, if the articles of association do not authorise the manner and terms of purchase, a company cannot purchase any of its own shares unless the manner and terms of purchase have first been authorised by an ordinary resolution of the company. At no time may a company redeem or purchase its shares unless they are fully paid. A company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any issued shares of the company other than shares held as treasury shares. A payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

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APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Shares purchased by a company is to be treated as cancelled unless, subject to the memorandum and articles of association of the company, the directors of the company resolve to hold such shares in the name of the company as treasury shares prior to the purchase. Where shares of a company are held as treasury shares, the company shall be entered in the register of members as holding those shares, however, notwithstanding the foregoing, the company is not be treated as a member for any purpose and must not exercise any right in respect of the treasury shares, and any purported exercise of such a right shall be void, and a treasury share must not be voted, directly or indirectly, at any meeting of the company and must not be counted in determining the total number of issued shares at any given time, whether for the purposes of the company’s articles of association or the Companies Act.

A company is not prohibited from purchasing and may purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. There is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases and the directors of a company may rely upon the general power contained in its memorandum of association to buy and sell and deal in personal property of all kinds.

Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares.

(e) Dividends and distributions

The Companies Act permits, subject to a solvency test and the provisions, if any, of the company’s memorandum and articles of association, the payment of dividends and distributions out of the share premium account. With the exception of the foregoing, there are no statutory provisions relating to the payment of dividends. Based upon English case law, which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of profits.

No dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made to the company, in respect of a treasury share.

(f) Protection of minorities and shareholders’ suits

The Courts ordinarily would be expected to follow English case law precedents which permit a minority shareholder to commence a representative action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company, and (c) an irregularity in the passing of a resolution which requires a qualified (or special) majority.

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APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

In the case of a company (not being a bank) having a share capital divided into shares, the Court may, on the application of members holding not less than one fifth of the shares of the company in issue, appoint an inspector to examine into the affairs of the company and to report thereon in such manner as the Court shall direct.

Any shareholder of a company may petition the Court which may make a winding up order if the Court is of the opinion that it is just and equitable that the company should be wound up or, as an alternative to a winding up order, (a) an order regulating the conduct of the company’s affairs in the future, (b) an order requiring the company to refrain from doing or continuing an act complained of by the shareholder petitioner or to do an act which the shareholder petitioner has complained it has omitted to do, (c) an order authorising civil proceedings to be brought in the name and on behalf of the company by the shareholder petitioner on such terms as the Court may direct, or (d) an order providing for the purchase of the shares of any shareholders of the company by other shareholders or by the company itself and, in the case of a purchase by the company itself, a reduction of the company’s capital accordingly.

Generally claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the company’s memorandum and articles of association.

(g) Disposal of assets

The Companies Act contains no specific restrictions on the power of directors to dispose of assets of a company. However, as a matter of general law, every officer of a company, which includes a director, managing director and secretary, in exercising his powers and discharging his duties must do so honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(h) Accounting and auditing requirements

A company must cause proper books of account to be kept with respect to (i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (ii) all sales and purchases of goods by the company; and (iii) the assets and liabilities of the company.

Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.

An exempted company must make available at its registered office in electronic form or any other medium, copies of its books of account or parts thereof as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands.

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(i) Exchange control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

(j) Taxation

Pursuant to the Tax Concessions Act of the Cayman Islands, the Company has obtained an undertaking:

(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciation shall apply to the Company or its operations; and

(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on or in respectoftheshares,debenturesorother obligations of the Company.

The undertaking for the Company is for a period of twenty years from 24 October 2018.

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments executed in or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are a party to a double tax treaty entered into with the United Kingdom in 2010 but otherwise is not party to any double tax treaties.

(k) Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

(l) Loans to directors

There is no express provision in the Companies Act prohibiting the making of loans by a company to any of its directors.

(m) Inspection of corporate records

The notice of registered office is a matter of public record. A list of the names of the current directors and alternate directors (if applicable) is made available by the Registrar of Companies for inspection by any person on payment of a fee. The register of mortgages is open to inspection by creditors and members.

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APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

Members of the Company have no general right under the Companies Act to inspect or obtain copies of the register of members or corporate records of the Company. They will, however, have such rights as may be set out in the Company’s Articles.

(n) Register of members

An exempted company may maintain its principal register of members and any branch registers at such locations, whether within or without the Cayman Islands, as the directors may, from time to time, think fit. The register of members shall contain such particulars as required by Section 40 of the Companies Act. A branch register must be kept in the same manner in which a principal register is by the Companies Act required or permitted to be kept. The company shall cause to be kept at the place where the company’s principal register is kept a duplicate of any branch register duly enteredupfromtimetotime.

There is no requirement under the Companies Act for an exempted company to make any returns of members to the Registrar of Companies of the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other medium, such register of members, including any branch register of members, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands.

(o) Register of Directors and Officers

The Company is required to maintain at its registered office a register of directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies in the Cayman Islands and any change must be notified to the Registrar within thirty (30) days of any change in such directors or officers.

(p) Beneficial Ownership Register

An exempted company is required to maintain a beneficial ownership register at its registered office that records details of the persons who ultimately own or control, directly or indirectly, 25% or more of the equity interests or voting rights of the company or have rights to appoint or remove a majority of the directors of the company. The beneficial ownership register is not a public document and is only accessible by a designated competent authority of the Cayman Islands. Such requirement does not, however, apply to an exempted company with its shares listed on an approved stock exchange, which includes the Stock Exchange. Accordingly, for so long as the shares of the Company are listed on the Stock Exchange, the Company is not required to maintain a beneficial ownership register.

–III-23– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

(q) Winding up

A company may be wound up (a) compulsorily by order of the Court, (b) voluntarily, or (c) under the supervision of the Court.

The Court has authority to order winding up in a number of specified circumstances including where the members of the company have passed a special resolution requiring the company to be wound up by the Court, or where the company is unable to pay its debts, or where it is, in the opinion of the Court, just and equitable to do so. Where a petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the Court has the jurisdiction to make certain other orders as an alternative to a winding- up order, such as making an order regulating the conduct of the company’s affairs in the future, making an order authorising civil proceedings to be brought in the name and on behalf of the company by the petitioner on such terms as the Court may direct, or making an order providing for the purchase of the shares of any of the members of the company by other members or by the company itself.

A company (save with respect to a limited duration company) may be wound up voluntarily when the company so resolves by special resolution or when the company in general meeting resolves by ordinary resolution that it be wound up voluntarily because it is unable to pay its debts as they fall due. In the case of a voluntary winding up, such company is obliged to cease to carry onitsbusiness(exceptsofarasitmaybe beneficial for its winding up) from the time of passing the resolution for voluntary winding up or upon the expiry of the period or the occurrence of the event referred to above.

For the purpose of conducting the proceedings in winding up a company and assisting the Court therein, there may be appointed an official liquidator or official liquidators; and the court may appoint to such office such person, either provisionally or otherwise, as it thinks fit, and if more persons than one are appointed to such office, the Court must declare whether any act required or authorised to be done by the official liquidator is to be done by all or any one or more of such persons. The Court may also determine whether any and what security is to be given by an official liquidator on his appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the Court.

As soon as the affairs of the company are fully wound up, the liquidator must make a report and an account of the winding up, showing how the winding up has been conducted and how the property of the company has been disposed of, and thereupon call a general meeting of the company for the purposes of laying before it the account and giving an explanation thereof. This final general meeting must be called by at least 21 days’ notice to each contributory in any manner authorised by the company’s articles of association and published in the Gazette.

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APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

(r) Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved by a majority in number representing seventy-five per cent. (75%) in value of shareholders or class of shareholders or creditors, as the case may be, as are present at a meeting called for such purpose and thereafter sanctioned by the Court. Whilst a dissenting shareholder would have the right to express to the Court his view that the transaction for which approval is sought would not provide the shareholders with a fair value for their shares, the Court is unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management.

(s) Take-overs

Where an offer is made by a company for the shares of another company and, within four (4) months of the offer, the holders of not less than ninety per cent. (90%) of the shares which are the subject of the offer accept, the offeror may at any time within two (2) months after the expiration of the said four (4) months, by notice in the prescribed manner require the dissenting shareholders to transfer their shares on the terms of the offer. A dissenting shareholder may apply to the Court within one (1) month of the notice objecting to the transfer. The burden is on the dissenting shareholder to show that the Court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority shareholders.

(t) Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Court to be contrary to public policy (e.g. for purporting to provide indemnification against the consequences of committing a crime).

(u) Economic Substance Requirements

Pursuant to the International Tax Cooperation (Economic Substance) Act, 2018 of the Cayman Islands (‘‘ES Act’’) that came into force on 1 January 2019, a ‘‘relevant entity’’ is required to satisfy the economic substance test set out in the ES Act. A ‘‘relevant entity’’ includes an exempted company incorporated in the Cayman Islands as is the Company; however, it does not include an entity that is tax resident outside the Cayman Islands. Accordingly, for so long as the Company is a tax resident outside the Cayman Islands, including in Hong Kong, it is not required to satisfy the economic substance test set out in the ES Act.

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APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANY LAW

4. GENERAL

Conyers Dill & Pearman, the Company’s special legal counsel on Cayman Islands law, have sent to the Company a letter of advice summarising certain aspects of Cayman Islands company law. This letter, together with a copy of the Companies Act, is available for inspection as referred to in the paragraph headed ‘‘Documents available for inspection’’ in Appendix V to this document. Any person wishing to have a detailed summary of Cayman Islands company law or advice on the differences between it and the laws of any jurisdiction with which he is more familiar is recommended to seek independent legal advice.

–III-26– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

A. FURTHER INFORMATION ABOUT OUR GROUP

1. Incorporation

Our Company was incorporated in the Cayman Islands under the Cayman Companies Act as an exempted company with limited liability on 16 October 2018. Our Company has established a principal place of business at Portion B of Shop No. 6 on Ground Floor, South Wave Court, No. 3 Shum Wan Road, Hong Kong and was registered as a non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance on 27 November 2018. We have appointed Mr. Thomas Woo and Mr. Yip Hoi To as the authorised representatives of our Company for the acceptance of service of process and notices on behalf of our Company in Hong Kong.

As our Company is incorporated in the Cayman Islands, it is subject to the Cayman Islands law and its constitution, which comprises the Memorandum and the Articles. A summary of various provisions of its constitution of the Company and the relevant aspects of the Companies Act is set out in Appendix III to this document.

2. Changes in share capital of our Company

(a) As at the date of incorporation, our Company had an authorised share capital of HK$380,000 divided into 38,000,000 Shares of HK$0.01 each. On the same day, one Share was issued, allotted and credited as fully paid to our Company’s initial subscriber, which was subsequently transferred to Bright Emerald.

(b) On 29 October 2018, as part of the Reorganisation, our Company allotted and issued in aggregate 12 Shares credited as fully paid to Bright Emerald in consideration of (i) Mr. Thomas Woo transferring his 5,000 shares and Mr. Paul Grange transferring his 5,000 shares in Marine Italia (in aggregate representing the entire issued share capital of Marine Italia); (ii) Mr. Thomas Woo transferring his 5,000 shares and Mr. Paul Grange transferring his 5,000 shares in Marinetec (in aggregate representing the entire issued share capital of Marinetec); and (iii) Mr. Thomas Woo and Mr. Paul Grange transferring one share in Absolute Marine (jointly owned by Mr. Thomas Woo and Mr. Paul Grange, and representing the entire issued share capital of Absolute Marine), to our wholly-owned subsidiary, namely Halcyon Moment.

(d) On [‧], Bright Emerald as the sole shareholder of our Company resolved to increase the authorised share capital of our Company from HK$380,000 to HK$100,000,000 by the creation of an additional 9,962,000,000 Shares, each carrying the same rights as our Share(s) then in issue in all respects.

–IV-1– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(e) Immediately following completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue and the [REDACTED],and taking no account of the [REDACTED] or any Share which may be issued pursuant to the exercise of the [REDACTED] or the options which may be granted under the Share Option Scheme, [REDACTED] Shares will be issued fully paid or credited as fully paid, and [REDACTED] Shares will remain unissued.

(f) Other than pursuant to the general mandate to issue Shares referred to the paragraph headed ‘‘A. Further information about our Group — 3. Written resolutions of the sole Shareholder passed on [‧]’’ in this appendix and the Share Option Scheme, our Company does not have any present intention to issue any of the authorised but unissued share capital of our Company and, without prior approval of our Shareholders in general meeting, we will not issue any Shares which would effectively alter the control of our Company.

(g) Save as disclosed in this document, there has been no alteration in our Company’s share capital since its incorporation.

3. Written resolutions of the sole Shareholder passed on [‧]

Pursuant to the written resolution passed by the sole Shareholder on [‧], among other things:

(a) our Company approved and adopted the Memorandum of Association with immediate effect and conditionally approved and adopted the Articles of Association with effect from the [REDACTED];

(b) the authorised share capital of our Company was increased from HK$380,000 divided into 38,000,000 Shares to HK$100,000,000 divided into 10,000,000,000 Shares by the creation of additional 9,962,000,000 new Shares which shall, when issued and paid, rank pari passu in all respects with the existing issued Shares;

(c) conditional upon the conditions stated in the paragraph headed ‘‘Structure and Conditions of the [REDACTED] — Conditions of the [REDACTED]’’ in this document being fulfilled or waived (as the case may be):

(i) the [REDACTED] was approved and our Directors were authorised to allot and issue the [REDACTED] pursuant to the [REDACTED] on and subject to the terms stated in this document;

(ii) subject to the share premium account of our Company being credited as aresultoftheallotmentandissueofthe[REDACTED] under the [REDACTED],uptoHK$[REDACTED] standing to the credit of the share premium account of our Company shall be capitalised and applied to pay up in full at par the allotment and issue of an additional [REDACTED] Shares to our Shareholders whose names appear on the

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APPENDIX IV STATUTORY AND GENERAL INFORMATION

register of members of our Company on the Business Day immediately preceding the [REDACTED], each ranking pari passu in all respects with the then existing issued Shares (the ‘‘Capitalisation Issue’’) in proportion as nearly as may be to their respective shareholding in our Company without involving fractions were approved;

(iii) the rules of the Share Option Scheme (the principal terms of which are set out in the sub-section headed ‘‘D. Share Option Scheme’’ of this appendix, which are subject to such amendments as may be approved by our Directors or any committee thereof) were approved and adopted and our Directors were authorised, at their absolute discretion, to grant options to subscribe for the Shares thereunder and to allot, issue and deal with the Shares pursuant to the exercise of options granted under the Share Option Scheme and to do such acts and things as it may consider necessary or expedient to give effect to the transactions contemplated under and to implement the Share Option Scheme;

(iv) a general unconditional mandate (the ‘‘Issue Mandate’’) was given to our Directors to allot, issue and deal with, whether pursuant to an option or otherwise, additional Shares, including the power to make or grant offers, agreements and options which would or might require the exercise of such power, (otherwise than pursuant to (1) a rights issue; (2) the exercise of rights of subscription, exchange or conversion under the terms of any warrants or convertible securities issued by our Company or any securities which are exchangeable into Shares; (3) the exercise of the subscription rights under options granted under the Share Option Scheme or any other similar arrangement of our Company from time to time adopted for the grant or issue to officers and/or employees and/or consultants and/or advisers of our Company and/or any of its subsidiaries and/or other persons of Shares or rights to acquire Shares; or (4) any scrip dividend or similar arrangement providing for allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Articles) unissued Shares and securities carrying rights to subscribe for, exchange or convert into Shares (whether the exercise of such rights may take place during or after the period which such mandate remains in effect) with an aggregate number of not exceeding the sum of 20% of the total number of Shares of our Company in issue immediately following the conversion of the [REDACTED] Convertible Bonds, the completion of the Capitalisation Issue and the [REDACTED], but excluding any Shares which may be issued pursuant to the exercise of the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme, and such mandate to remain in effect from the date of [REDACTED] until whichever is the earliest of: (I) the conclusion of the next annual general meeting of our Company; (II) the expiration of the period within which the next annual general meeting of our Company is required to be held by the Articles of Association or any other

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APPENDIX IV STATUTORY AND GENERAL INFORMATION

applicable laws of the Cayman Islands; or (III) the date of the passing of an ordinary resolution of the Shareholders in general meeting revoking or varying such mandate;

(v) a general unconditional mandate (the ‘‘Repurchase Mandate’’) was given to our Directors authorising them to exercise all powers for and on our behalf to repurchase Shares on GEM or other stock exchange on which Shares may be listed and recognised by the SFC and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the GEM Listing Rules or of any other stock exchange as amended from time to time, such number of Shares not exceeding 10% of the aggregate number of issued Shares of our Company immediately following the completion of the [REDACTED] (excluding any Shares which may be issued pursuant to the exercise of theexerciseofthe[REDACTED] or any options which may be granted under the Share Option Scheme), the conversion of the [REDACTED] Convertible Bonds and the Capitalisation Issue, such mandate to remain in effect until whichever is the earliest of (I) the conclusion of the next annual general meeting of our Company; (II) the expiration of the period within which the next annual general meeting of our Company is required to be held by the Articles or any other applicable laws of the Cayman Islands; or (III) the date of passing of an ordinary resolution of our Shareholders in general meeting revoking or varying such mandate; and

(vi) the Issue Mandate was extended by the addition to the aggregate number of Shares which may be allotted or agreed to be allotted by our Directors pursuant to such general mandate of an amount representing the aggregate number of Shares repurchased by our Company pursuant to the Repurchase Mandate, provided that such extended amount shall not exceed 10% of the total number of the issued Shares of our Company immediately following completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue and the [REDACTED].

4. Corporate Reorganisation

In preparing for the [REDACTED], the companies comprising our Group underwent the Reorganisation to rationalise the corporate structure of our Group and our Company became the holding company of our Group. Please refer to the paragraph headed ‘‘History, Reorganisation and Group Structure — Reorganisation’’ in this document for further details.

5. Changes in share capital of subsidiaries

The subsidiaries of our Company are listed in the Accountant’s Report of our Company, the text of which is set out in Appendix I to this document.

–IV-4– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

Save as disclosed in the paragraph headed ‘‘4. Corporate Reorganisation’’ in this appendix and in the paragraph headed ‘‘History, Reorganisation and Group Structure — Reorganisation’’ in this document, there has been no alteration in the share capital of any of the subsidiaries of our Company within the two years immediately preceding the date of this document.

6. Repurchase of our Shares by our Company

This section contains information required by the Stock Exchange to be included in this document concerning the repurchase of the Shares by our Company.

(a) Provisions of the GEM Listing Rules

The GEM Listing Rules permit companies whose primary listing is on GEM to repurchase their securities on GEM subject to certain restrictions, a summary of which is set out below:

(i) Shareholders’ approval

The GEM Listing Rules provide that all proposed repurchases of shares, which must be fully paid up in the case of shares, by a company with a primary [REDACTED] on GEM must be approved in advance by an ordinary resolution of the shareholders, either by way of general mandate or by specific approval of a particular transaction.

Note: Pursuant to the written resolutions passed by the sole Shareholder on [‧], a general unconditional mandate (the ‘‘Repurchase Mandate’’) was granted to our Directors authorising them to exercise all powers of our Company to repurchase on GEM or on any other stock exchange on which the Shares may be listed and which is recognised by the SFC and the Stock Exchange for this purpose, such number of Shares as will represent up to 10% of the aggregate number of Shares of our Company in issue immediately following completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue and the [REDACTED] but excluding any Shares which may be issued pursuant to the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme and the Repurchase Mandate shall remain in effect until whichever is the earliest of the conclusion of the next annual general meeting of our Company, or the expiration of the period within which the next annual general meeting of our Company is required by the Articles or the Companies Act or any other applicable laws of the Cayman Islands to be held, or the time when the Repurchase Mandate is revoked or varied by an ordinary resolution of the Shareholders in a general meeting.

(ii) Source of Funds

Any repurchase by our Company must be funded out of funds legally available for the purpose in accordance with the Memorandum, the Articles, the applicable laws of the Cayman Islands and the GEM Listing Rules. Our

–IV-5– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

Company may not repurchase its own Shares on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

Any repurchases by our Company may be made out of profits or share premium or out of the proceeds of a fresh issue of Shares made for the purpose of the repurchase and, in the case of any premium payable on the repurchase, out of profits of our Company or out of our Company’s share premium account. Subject to the satisfaction of the solvency test prescribed by the Companies Act, a repurchase may also be made out of capital of our Company.

(iii) Connected parties

The GEM Listing Rules prohibit our Company from knowingly repurchasing the Shares on GEM from a ‘‘core connected person’’, which includes a director, chief executive or substantial shareholder of our Company or any of its subsidiaries and a core connected person shall not knowingly sell Shares to our Company on GEM.

(b) Exercise of the Repurchase Mandate

On the basis of [REDACTED] Shares in issue immediately after completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue and the [REDACTED], our Directors would be authorised under the Repurchase Mandate to repurchase up to [REDACTED] Shares during the period in which the Repurchase Mandate remains in force. Any Shares repurchased pursuant to the Repurchase Mandate must be fully paid up.

Our Directors believe that it is in the best interests of our Company and its Shareholders for our Directors to have a general authority from the Shareholders to enable our Company to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of our Company’s net asset value and/or earnings per Share and will only be made when our Directors believe that such repurchases will benefit our Company and our Shareholders.

(d) Funding of repurchases

In repurchasing our Shares, our Company may only apply funds legally available for such purpose in accordance with the Memorandum, the Articles, the GEM Listing Rules and the applicable laws and regulations of the Cayman Islands.

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APPENDIX IV STATUTORY AND GENERAL INFORMATION

Our Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of our Company or the gearing levels which in the opinion of our Directors are from time to time appropriate for our Company.

(e) General

None of our Directors or to the best of their knowledge, having made all reasonable enquiries, any of their close associates, has any present intention to sell any Shares to our Company if the Repurchase Mandate is exercised.

Our Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules, the Articles and the applicable laws and regulations from time to in force in the Cayman Islands.

If, as a result of a repurchase of Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interests in the voting rights of our Company increases, such increase will be treated as an acquisition for the purpose of the Takeovers Code. In certain circumstances, a Shareholder or a group of Shareholders acting in concert (as defined in the Takeovers Code) depending on the level of increase of the Shareholders’ interests, could obtain or consolidate control of our Company and may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code as a result of any such increase.

Save as disclosed above, our Directors are not aware of any consequences which may arise under the Takeovers Code as a consequence of any repurchase of Shares if made immediately after the [REDACTED] pursuant to the Repurchase Mandate. At present, so far as is known to our Directors, no Shareholder may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code in the event that our Directors exercise the power in full to repurchase the Shares pursuant to the Repurchase Mandate.

Our Directors will not exercise the Repurchase Mandate if the repurchase would result in the number of Shares which are in the hands of the public falling below [REDACTED]% of the total number of Shares in issue (or such other percentage as may be prescribed as the minimum public shareholding under the GEM Listing Rules). No core connected person of our Company has notified our Company that he/she/it has a present intention to sell Shares to our Company, or has undertaken not to do so, if the Repurchase Mandate is exercised.

–IV-7– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

B. FURTHER INFORMATION ABOUT OUR BUSINESS

1. Summary of material contracts

We have entered into the following contracts (not being contracts entered into in the ordinary course of business) within the two years preceding the date of this document, which are or may be material in relation to the business of our Group taken as a whole:

(a) the [REDACTED] Convertible Bonds Subscription Agreement dated 14 June 2018, entered in between, among others, Marine Italia, Marinetec, Absolute Marine, Mr. Leslie Kong, Mr. Joseph Tong, Mr. Thomas Woo and Mr. Paul Grange in relation to the subscription of three (3) per cent. coupon convertible bonds in the aggregate principal amount of HK$8,000,000 to be issued by our Company;

(b) the Shareholders’ Agreement entered into between Marine Italia, 2BY2 Yachts Italia and Marine Italia Singapore which governs the relationship between them as shareholders of Marine Italia Singapore and dated 16 July 2018;

(c) the Sale and Purchase Agreement dated 29 October 2018 entered into between, among others, Mr. Thomas Woo, Mr. Paul Grange and our Company, pursuant to which (i) Mr. Thomas Woo transferred his 5,000 shares and Mr. Paul Grange transferred his 5,000 shares in Marine Italia (in aggregate representing the entire issued share capital of Marine Italia); (ii) Mr. Thomas Woo transferred his 5,000 shares and Mr. Paul Grange transferred his 5,000 shares in Marinetec (in aggregate representing the entire issued share capital of Marinetec); and (iii) Mr. Thomas Woo and Mr. Paul Grange transferring one share in Absolute Marine (jointly owned by Mr. Thomas Woo and Mr. Paul Grange and representing the entire issued share capital of Absolute Marine), to our Company (to be held through our wholly-owned subsidiary, namely Halcyon Moment), and as consideration thereof, our Company allotted and issued in aggregate 12 Shares, credited as fully paid, to Bright Emerald; and in consideration of our Company assigning the entire issued share capital of Marine Italia, Marinetec and Absolute Marine to Halcyon Moment, Halcyon Moment allotted and issued one share credited as fully paid to our Company;

(d) the instrument constituting HK$4,000,000 of three (3) per cent. coupon convertible bonds issued by our Company to Dragon United dated 1 November 2018;

(e) the instrument constituting HK$4,000,000 of three (3) per cent. coupon convertible bonds issued by our Company to Precious Wave dated 1 November 2018;

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APPENDIX IV STATUTORY AND GENERAL INFORMATION

(f) the Supplemental Deed dated [‧] entered into between our Company and Dragon United;

(g) the Supplemental Deed dated [‧] entered into between our Company and Precious Wave;

(h) the Deed of Non-competition dated [‧] given by our Controlling Shareholders in favour of our Company regarding non-competition undertaking, details of which are set out in the section headed ‘‘Relationship with our Controlling Shareholders — Non-competition undertaking and corporate governance measures to manage conflicts of interests’’ in this document;

(i) the Deed of Indemnity dated [‧] given by our Controlling Shareholders in favour of our Company regarding indemnities, details of which are set out in the paragraph headed ‘‘E. Other information — 1. Tax and other indemnities’’ in this appendix; and

(j) the [REDACTED] dated [‧]relatingtothe[REDACTED] and entered into by, among other, our Company, our executive Directors, our Controlling Shareholders, the Sole Sponsor, the [REDACTED],the[REDACTED] and the [REDACTED], particulars of which are summarised in the section headed ‘‘[REDACTED]’’ in this document.

2. Intellectual property rights of our Group

(a) Trademarks

As at the Latest Practicable Date, our Group had registered the following trademarks which are material to the business of our Group:

Place of Duration of Trademark registration Registrant Class(es) Registration no. validity

Hong Kong Marine Italia 35, 39 304619089 From 1 August 2018 to 31 July 2028

Hong Kong Marinetec 37 304619061 From 1 August 2018 to 31 July 2028

Singapore Marine Italia 35, 39 40201815138W From 2 August 2018 to 2 August 2028

–IV-9– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(b) Patents

As at the Latest Practicable Date, our Group has not registered any patent which we consider to be or may be material to the business of our Group.

As at the Latest Practicable Date, our Group was the owner of the following domain names which are material to the business of our Group:

Domain Name Registered Owner Expiry Date

marineinternationalholdings.com Marine Italia 30 November 2021 marineitalia.asia Marine Italia 1 September 2021 absolute-marine.com Marine Italia 2 July 2022

Note: Information contained in the website does not form part of this document.

Save as disclosed herein, there are no other trade or service marks, patents and other intellectual property rights which are or may be material to the business of our Group.

C. FURTHER INFORMATION ABOUT SUBSTANTIAL SHAREHOLDERS, DIRECTORS AND EXPERTS

1. Disclosure of Interests

(a) Interests and short positions of Directors and chief executive in Shares, underlying Shares and debentures of our Company and its associated corporations

So far as our Directors are aware, immediately following the completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue and the [REDACTED], but taking no account of any Shares which may be issued upon the exercise of the [REDACTED] or any options which may be granted under the Share Option Scheme or repurchased by our Company pursuant to the mandatesasreferredtointheparagraphheaded‘‘A.Furtherinformationabout our Group’’ in this appendix, the interests and short positions of our Directors or chief executive of our Company in the Shares, underlying Shares and debentures of our Company or any of the associated corporations (within the meaning of Part XV of the SFO) which, once the Shares are [REDACTED] on GEM, will have to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interests or short positions which they are taken or deemed to have under such provisions of the SFO) or will be required, pursuant to section 352 of the SFO, to be entered in the register referred to

–IV-10– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

therein, or will be required, pursuant to the Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by our Directors, to be notified to our Company and the Stock Exchange, will be as follows:

(i) Long position in the Shares

Name of Directors Number and class of Percentage of Capacity/Nature Shares held shareholding

Mr. Thomas Woo Interest of controlled [REDACTED] [REDACTED]% corporation (Note) Mr. Paul Grange Interest of controlled [REDACTED] [REDACTED]% corporation (Note)

Note: [REDACTED] Shares are registered in the name of Bright Emerald, the entire issued share capital of which is legally and beneficially owned by Mr. Thomas Woo and Mr. Paul Grange in equal shares. Further, Mr. Thomas Woo and Mr. Paul Grange have confirmed that they are parties acting in concert.

(ii) Long position in the ordinary shares of associated corporations

Name of Number associated Capacity/ of shares Percentage of Name of Directors corporation Nature held shareholding

Mr. Thomas Woo Bright Emerald Beneficial one 50% owner Mr. Paul Grange Bright Emerald Beneficial one 50% owner

(b) Interests of Substantial Shareholders and other shareholders in our Shares and underlying Shares

So far as is known to our Directors or chief executive and taking no account of any Shares which may be taken up under the [REDACTED],andSharestobe issued under the [REDACTED] or pursuant to options which may be granted under the Share Option Scheme, the following persons (not being a Director or chief executive of our Company) will, immediately following the completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue and the [REDACTED], have interests or short positions in Shares or underlying Shares which would fall to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2

–IV-11– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

and 3 of Part XV of the SFO or, who are, directly or indirectly, interested in 10% or more of the issued voting shares of any member of our Group:

(i) Interests in our Company

Name Number of Percentage of Capacity/Nature Shares held shareholding

Bright Emerald Beneficial owner (Note 1) [REDACTED] [REDACTED]% Precious Wave Beneficial owner (Note 2) [REDACTED] [REDACTED]% Dragon United Beneficial owner (Note 3) [REDACTED] [REDACTED]% Ms. Parazzi Amanda Interest of spouse [REDACTED] [REDACTED]% Linda (Note 4) Mr. Joseph Tong Interest of controlled [REDACTED] [REDACTED]% corporation (Note 2) Mr. Leslie Kong Interest of controlled [REDACTED] [REDACTED]% corporation (Note 3) Ms.ShumYuetWah Interest of spouse [REDACTED] [REDACTED]% Anna (Note 5) Ms. Chang Claudine Interest of spouse [REDACTED] [REDACTED]% (Note 6)

Notes:

1. The entire issued share capital of Bright Emerald is legally and beneficially owned by Mr. Thomas Woo and Mr. Paul Grange in equal shares. Further, Mr. Thomas Woo and Mr. Paul Grange have confirmed that they are parties acting in concert.

2. [REDACTED] Shares are registered in the name of Precious Wave, the entire issued share capital of which is legally and beneficially owned by Mr. Joseph Tong

3. [REDACTED] Shares are registered in the name of Dragon United, the entire issued share capital of which is legally and beneficially owned by Mr. Leslie Kong.

4. Ms. Parazzi Amanda Linda is the spouse of Mr. Paul Grange. She is deemed to be interested in the Shares in which Mr. Paul Grange is interested under the SFO.

5. Ms. Shum Yuet Wah Anna is the spouse of Mr. Joseph Tong. She is deemed to be interested in the Shares in which Mr. Joseph Tong is interested under the SFO.

6. Ms. Chang Claudine is the spouse of Mr. Leslie Kong. She is deemed to be interested in the Shares in which Mr. Leslie Kong is interested under the SFO.

–IV-12– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(ii) Interests in other members of our Group

Name of subsidiary of Capacity/Nature Number of Percentage of Name our Company of interest shares held shareholding

2BY2 Yachts Italia Marine Italia Beneficial owner 17,500 35% (Note) Singapore Ms. Karen Kwee (Note) Marine Italia Interest of 17,500 35% Singapore controlled corporation

Note: 2BY2 Yachts Italia is wholly-owned by Ms. Karen Kwee.

2. Particulars of service contracts

NoneofourDirectorshasorisproposedtohaveanyserviceagreementwiththe Company or any of its subsidiaries other than contracts expiring or determinable by the relevant member of our Group within one year without payment of compensation (other than statutory compensation).

3. Remuneration of Directors

(a) The aggregate remuneration and benefits in kind paid by our Group to our Directors in respect of each of FY2019, FY2020 and FY2021 were approximately HK$3.3 million, HK$4.3 million and HK$4.5 million, respectively.

(b) Under the arrangements currently in force, it is estimated that an aggregate remuneration (including basic salaries and allowances, but excluding discretionary bonuses and retirement benefit scheme contributions) of approximately HK$4.8 million is payable by our Group to our Directors for the year ending 30 April 2022.

(c) Under the arrangements currently proposed, conditional upon the [REDACTED], the basic annual remuneration (including basic salaries and allowances, but excluding discretionary bonuses and retirement benefit scheme contributions) payable by our Group to each of our Directors will be as follows:

Executive Directors HK$’000 Mr. Thomas Woo 1,914 Mr.PaulGrange 1,914 Ms. Wu Siu Ling 603

Independent non-executive Directors HK$’000 Mr. Yeung Chi Wai 180 Mr.YipKiChiLuke 180 Ms. Yu Shun Yan Verda 180

–IV-13– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(d) Each of our executive Directors has entered into a service contract with our Company and each of our independent non-executive Directors has entered into a letter of appointment with our Company, in all cases for a term of three years commencing on the [REDACTED], which may be terminated by not less than three months’ notice served by either party on the other, and is subject to termination provisions therein and provisions on retirement by rotation of Directors as set out in the Memorandum and Articles.

4. Agency fees or commissions received

Save as disclosed in the paragraph headed ‘‘[REDACTED] — Total Commission and Expenses’’ in this document, none of our Directors or the experts named in the paragraph headed ‘‘Consents of experts’’ in this appendix had received any commissions, discounts, brokerages or other special terms granted as set out in paragraph 13 of Appendix 1A of the GEM Listing Rules within the two years immediately preceding the date of this document in connection with the issue or sale of any capital of any member of our Group.

5. Related party transactions

Details of the related party transactions are set out under Note 29 to the Accountant’s Report of our Company set out in Appendix I to this document.

6. Disclaimers

Save as disclosed in this document:

(a) taking no account of any Shares which may be issued under the [REDACTED] or upon the exercise of options which may be granted under the Share Option Scheme or repurchased by our Company pursuant to the mandates as referred to in the paragraph headed ‘‘A. Further information about our Group’’ in this appendix, our Directors are not aware of any person (not being a Director or chief executive of our Company) who will, immediately following the completion of the conversion of the [REDACTED] Convertible Bonds, the Capitalisation Issue and the [REDACTED], have an interest or short position in the Shares or underlying Shares which will fall to be disclosed to our Company and the Stock Exchange pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or who will be, directly or indirectly, interested in 10% or more of the issued voting shares of any other member of our Group;

–IV-14– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(b) none of our Directors or chief executive of our Company has any interest or short position in the Shares, underlying Shares or debentures of our Company or any of its associated corporations (within the meaning of Part XV of the SFO) which will have to be notified to our Company and the Stock Exchange under Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is taken or deemed to have under such provisions of the SFO) or will be required,pursuanttosection352ofthe SFO, to be entered in the register referred to therein, or will be required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by our Directors, to be notified to our Company and the Stock Exchange, in each case once the Shares are [REDACTED] on GEM;

(c) none of our Directors or the experts named in the paragraph headed ‘‘Qualifications of experts’’ in this appendix is interested in the promotion of, or in any assets which have been, within the two years immediately preceding the issue of this document, acquired or disposed of by or leased to any member of our Group, or are proposed to be acquired or disposed of by or leased to any member of our Group;

(d) none of our Directors or the experts named in the paragraph headed ‘‘Qualifications of experts’’ in this appendix is materially interested in any contract or arrangement subsisting at the date of this document which is significant in relation to the business of our Group taken as a whole;

(e) none of our Directors or the experts named in the paragraph headed ‘‘Qualifications of experts’’ in this appendix has any shareholding in any member of our Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of our Group;

(f) so far as is known to our Directors, none of our Directors, their respective close associates or Shareholders who are interested in more than 5% of the total number of issued Shares has any interests in the five largest customers or the five largest suppliers of our Group;

(g) none of our Directors has any existing or proposed service contracts with any member of our Group other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation); and

(h) no remuneration or other benefits in kind had been paid by any member of our Group to any Director since the date of incorporation of our Company, nor are any remuneration or benefits in kind payable by any member of our Group to any Director in respect of the current financial year under any arrangement in force as at the Latest Practicable Date.

–IV-15– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

D. SHARE OPTION SCHEME

1. Share Option Scheme

The following is a summary of the principal terms of the Share Option Scheme conditionally approved by the sole Shareholder on [‧].

For the purpose of this section, unless context otherwise requires:

‘‘Adoption Date’’ means [‧], the date which the Share Option Scheme is conditionally adopted by our Company by the written resolutions of the sole Shareholder

‘‘Board’’ means the Board or a duly authorised committee thereof

‘‘Eligible Employees’’ means any employee (whether full time or part time employee, including any executive Directors) of our Company, any of its Subsidiaries and any Invested Entity

‘‘Grantee’’ means any Participant who accepts the offer of the grant of any Option in accordance with the terms of the Share Option Scheme or (where the context so permits) a person entitled to any such Option in consequence of the death of the original Grantee or the legal representative of such person

‘‘Group’’ means our Company and its Subsidiaries from time to time and ‘‘member(s) of our Group’’ shall be construed accordingly

‘‘Invested Entity’’ means any entity in which our Group holds any equity interest

‘‘Option’’ means an option to subscribe for Shares granted pursuant to the Share Option Scheme and for the time being subsisting

‘‘Option Period’’ means in respect of any particular Option, such period as the Board may in its absolute discretion determine, save that such period shall not be more than ten years fromthedateuponwhichtheOptionisdeemedtobe granted and accepted in accordance with the Share Option Scheme and that the Board may at its discretion determine the minimum period for which the Option has to be held before the exercise of the Option

–IV-16– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

‘‘Participant’’ means any person belonging to any of the following classes of participants:

(a) any Eligible Employee;

(b) any non-executive director (including independent non-executive directors) of our Company, any of itsSubsidiariesoranyInvestedEntity;

(d) any customer of our Group or any Invested Entity;

(e) any person or entity that provides research, development or other technological support to our Group or any Invested Entity;

(f) any shareholder of any member of our Group or any Invested Entity or any holder of any securities issued by any member of our Group or any Invested Entity;

(g) any adviser (professional or otherwise) or consultant to any area of business or business development of our Group or any Invested Entity; and

(h) any other group or classes of participants who have contributed or may contribute, by way of joint venture, business alliance, other business arrangement or otherwise, to the development and growth of our Group,

and for the purposes of this Scheme, the Options may be granted to any company wholly-owned by one or more persons belonging to any of the above classes of Participants or any discretionary object of a Participant which is a discretionary trust

‘‘Scheme Period’’ means a period commencing on the Adoption Date and ending on the tenth anniversary of the Adoption Date (both dates inclusive)

–IV-17– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(a) Purpose of Share Option Scheme

The purpose of the Share Option Scheme is to provide incentives or rewards to Participants for their contribution to our Group and/or to enable our Group to recruit and retain high-calibre employees and attract human resources that are valuable to our Group and any Invested Entity.

(b) Who may join

Subject to the Share Option Scheme and the GEM Listing Rules, the Board shall be entitled but shall not be bound at any time and from time to time within the Scheme Period to offer to grant to any Participant as the Board may in its absolute discretion select, and subject to such conditions as the Board may think fit, an Option to subscribe for such number of Shares as the Board may determine at a price calculated in accordance with sub-paragraph (d) below.

Upon acceptance of the Option, the Participant shall pay HK$1.00 to our Company by way of consideration for the grant. The Option will be offered for acceptance for a period of twenty one days from the date on which the Option is granted.

No offer of grant of Options shall be made where inside information has come to our Company’s knowledge until an announcement of such inside information has been published in accordance with the GEM Listing Rules. In particular, during the period commencing one month immediately preceding the earlier of (i) the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with the GEM Listing Rule) for approval of the results of our Company for any year, half-year or quarter-year period (if applicable) or any other interim period (whether or not required under the GEM Listing Rules); and (ii) the deadline for our Company to publish an announcement of the results for any year, half-year or quarterly (if applicable) or any other interim period (whether or not required under the GEM Listing Rules), and ending on the date of the announcement of the results, no Option may be granted. The period during which no Option may be granted will cover any period of delay in the publication of a results announcement. The Board may not grant any option to a Participant who is a Director during the periods or times in which such Directors are prohibited from dealing in the Shares prescribed by Rules 5.48 to 5.67 of the GEM Listing Rules or any corresponding codes or securities dealing restrictions adopted by our Company.

–IV-18– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

No Participant shall be granted Options if exercised in full would result in the total number of Shares already issued under all the Options granted to him which have been exercised and issuable under all the Options granted to him which are for the time being subsisting and unexercised in any 12-month period would exceed 1% of the total number of Shares in issue, provided that if approved by Shareholders in general meeting with such Participant and his close associates (or his associates if such Participant is a connected person) abstaining from voting, our Company may make further grant of Options to such Participant (the ‘‘Further Grant’’) notwithstanding that the Further Grant would result in the total number of Shares already issued under all the Options granted to such Participant which have been exercised and issuable under all the Options granted to him which are for the time being subsisting and unexercised in any 12-month period exceed 1% of the total number of Shares in issue. We must send a circular to the Shareholders and the circular must disclose the identity of the Participant, the number and terms of the Options to be granted and Options previously granted to such Participant and all the information required under the GEM Listing Rules. The number and terms (including the subscription price) of the Options to be granted to such Participant must be fixed before the Shareholders’ approval and the date of the meeting of the Board for proposing such further grant of Option should be taken as the date of grant for the purpose of calculating the relevant subscription price.

Unless the Board otherwise determined and stated in the offer of the grant of options to a participant, a grantee is not required to achieve any performance targets before any options granted under the Share Option Scheme can be exercised.

(d) Price of Shares

The subscription price in respect of Share under any particular Option shall be such price as determined by the Board in its absolute discretion at the time of the grant of the relevant Option but in any case the relevant subscription price shall not be less than the highest of (i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date of the grant of the Option, which must be a trading day; (ii) the average closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet for the five trading days immediately preceding the date of the grant of the Option; and (iii) the nominal value of a Share.

For the purpose of determining the relevant subscription price where the Shares have been [REDACTED] on the Stock Exchange for less than five trading days preceding the date of the grant of the Option, the issue price of the Shares shall be deemed to be the closing price of the Shares for any trading day falling within the five trading days period after the [REDACTED].

–IV-19– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(e) Maximum amount of Shares

(i) The total number of Shares which may be issued upon exercise of all Options (excluding for this purpose Options which have lapsed in accordance with the terms of the Share Option Scheme and any other schemes) to be granted under the Share Option Scheme and other schemes must not, in aggregate, exceed 10% of the Shares in issue on the [REDACTED]. On the basis of [REDACTED] Shares in issue on the [REDACTED], the limit will be equivalent to [REDACTED] Shares, representing 10% of the Shares in issue as at the [REDACTED].

(ii) Our Company may refresh the 10% limit by seeking prior approval from Shareholders in a general meeting. The total number of Shares which may be issued upon exercise of all Options after the limit as refreshed, in aggregate, must not exceed 10% of the Shares in issue at the date of such Shareholders’ approval from the Shareholders. Options previously granted under the Share Option Scheme or any other schemes (including Options outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme or any other share option scheme) will not be counted for the purpose of calculating the refreshed limit.

(iii) Our Company may also grant Options beyond the 10% limit by seeking Shareholder approval in a general meeting, provided that the Grantee(s) of such Option(s) must be specifically identified before such approval is sought.InrelationtotheShareholder’sapprovalreferredtointhis paragraph (iii), our Company shall send a circular to its Shareholders containing a generic description of the specified Grantees who may be granted such Options, the number and terms of the Options to be granted, the purpose of granting Options, an explanation as to how the terms of the Options serve such purpose and the information required by the GEM Listing Rules.

(iv) Notwithstanding the foregoing, our Company must not grant any Options if the number of Shares, which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the Share Option Scheme and other schemes, exceeds 30% of the Shares in issue from time to time.

(f) Time of Exercise of Option

An Option may be exercised in accordance with the terms of the Share Option Scheme at any time during a period to be determined by the Board absolutely, provided that such period shall not be more than ten years from the date upon which the Option is deemed to be granted and accepted in accordance with the Share Option Scheme. The Board may, at its discretion, determine the minimum period for which the Option has to be held before the Option can be exercised.

–IV-20– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(g) Rights are personal to grantee

An Option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option. Any breach of the foregoing by the Grantee shall entitle us to cancel any outstanding Option or part thereof granted to such Grantee (to the extent no already exercised) without incurring any liability on our Company.

(h) Rights on death

If a Grantee ceases to be a Participant by reason of death before exercising the Options in full, his legal personal representative(s) may exercise the Options in whole or in part (to the extent that it has become exercisable and not already exercised prior to such date of death) within a period of twelve months from the date of death, failing which such Option will lapse.

(i) Changes in capital structure

In any event of any alteration in the capital structure of our Company whilst any Option remains exercisable, whether by way of capitalisation of profits or reserves, rights issue or other similar offer of securities to holders of Shares, consolidation, subdivision or reduction or similar reorganisation of the share capital of our Company (other than an issue of Shares as consideration in respect of a transaction to which our Company is a party), such corresponding alterations (if any) shall be made in:

(i) the number or nominal amount of Shares subject to the Option so far as unexercised; and/or

(ii) the subscription price; and/or

(iii) the method of exercise of the Option; and/or

(iv) the maximum number of Shares referred in sub-paragraph (e) above and the Further Grant referred in sub-paragraph (c) above,

our Company’s independent financial adviser or auditors shall certify in writing to the Board to be in their opinion fair and reasonable, provided that any alteration shall be made on the basis that the proportion of the issued share capital of our Company to which a Grantee is entitled after such alteration shall remain the same as that to which he was entitled to before such alteration and that the aggregate subscription price payable by a Grantee on the full exercise of any Option shall remain as close as possible (but shall not be greater than) as it was before such event. No such alteration shall be made the effect of which would be to enable any Share to be issued at less than its nominal value and no such adjustment will be required in circumstances where there is an issue of Shares or othersecuritiesofourGroupforcashorasconsiderationinatransaction.

–IV-21– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

The capacity of our Company’s auditors and independent financial advisers is that of experts and not of arbitrations and their certification, in the absence of manifest error, shall be final and binding on our Company and the Participants. The cost of our independent financial advisers of the auditors shall be borne by us.

(j) Rights on take-over

In the event of a general or partial offer, whether by way of take-over, share repurchase offer, or scheme of arrangement or otherwise in like manner is made to all Shareholders, or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in concert (for the purposes of the Takeovers Code) with the offeror, we shall use all reasonable endeavours to procure that such offer is extended to all the Grantees on the same terms, mutatis mutandis, and assuming that they will become, by the exercise in full of the Options granted to them, Shareholders. If such offer becomes or is declared unconditional, a Grantee shall be entitled to exercise his Option (to the extent not already exercised) to its full extent or to the extent specified in the Grantee’s noticetousinexerciseofhisOptionatanytimebeforethecloseofsuchoffer(or any revised offer) or the record date for entitlements under such scheme of arrangement, as the case may be.

(k) Rights on a compromise or arrangement

(i) In the event a notice is given by our Company to the Shareholders to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily wind-up our Company, we shall on the same date as or soon after it despatches such notice to each Shareholder give notice thereof to all Grantees and thereupon, each Grantee, subject to the provisions of all applicable laws (or where permitted under subparagraph (h) above, his legal personal representative(s)) shall be entitled to exercise all or any of his Options (to the extent which has become exercisable and not already exercised) at any time not later than two (2) Business Days prior to the proposed general meeting of our Company by giving notice in writing to us, accompanied by a remittance for the full amount of the aggregate subscription price for the Shares in respect of which the notice is given whereupon we shall as soon as possible and, in any event, no later than the Business Day immediately prior to the date of the proposed general meeting referred to above, allot the relevant Shares to the Grantee credited as fully paid, which Shares shall rank pari passu with all other Shares in issue on the date prior to the passing of the resolution to wind- up our Company to participate in the distribution of assets of our Company available in liquidation.

–IV-22– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(ii) In the event of a compromise or arrangement between our Company and its creditors (or any class of them) or between our Company and its members (or any class of them), in connection with a scheme for the reconstruction or amalgamation of our Company, we shall give notice thereof to all Grantees on the same day as it gives notice of the meeting to its members or creditors to consider such a scheme or arrangement, and thereupon any Grantee (or where permitted under sub-paragraph (h) above his legal personal representative(s)) may forthwith and until the expiry of the period commencing with such date and ending with the earlier of the date falling two calendar months thereafter and the date on which such compromise or arrangement is sanctioned by the Court be entitled to exercise his Option (to the extent which has become exercisable and not already exercised), but the exercise of the Option shall be conditional upon such compromise or arrangement being sanctioned by the Court and becoming effective. Our Company may thereafter require such Grantee to transfer or otherwise deal with the Shares issued as a result of such exercise of his Option so as to place the Grantee in the same position as nearly as would have been the case had such Shares been subject to such compromise or arrangement.

(l) Rights of Grantee ceasing to be a Participant

In the event of the Grantee ceasing to be a Participant for any reason other than his death or termination of his employment on one or more of the grounds specified in the sub-paragraph (n)(iv) below, the Grantee may exercise the Option in accordance with the Share Option Scheme, up to his entitlement at the date of cessation in whole or in part (to the extent which has become exercisable and not already exercised) which date shall be the last actual working day with our Company or the relevant Subsidiary or the relevant Invested Entity whether salary is paid in lieu of notice or not, or such longer period following the date of cessation as the Board may determine.

(m) Lapse on option

An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:

(i) the expiry of the Option Period (subject to the provisions of the Share Option Scheme);

(ii) the expiry of any periods referred to in paragraphs (h) and (l);

(iii) the date on which the offer (or the case may be, revised offer) referred to in sub-paragraph (j) above closes;

(iv) subject to sub-paragraph (k)(i) above, the date of the commencement of the winding-up of our Company;

–IV-23– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(v) the date on which the Grantee ceases to be a Participant by reason of the termination of his employment on any one or more of the grounds that he has been guilty of misconduct, or has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his creditors generally, or has been convicted of any criminal offence involving his integrity or honesty or (if so determined by the Board) on any other ground on which an employer would be entitled to terminate his employment summarily at common law or pursuant to any applicable laws or under the Grantee’s service contract with our Company or the relevant Subsidiary or the relevant Invested Entity. A resolution of the Board or the board of directors of the relevant Subsidiary or the board of directors of the relevant Invested Entity to the effect that employment of a Grantee has or has not been terminated on one or more of the grounds specified in this paragraph shall be conclusive and binding on the Grantee;

(vi) subject to sub-paragraph (k)(ii) above, the date when the proposed compromise or arrangement becomes effective;

(vii) the date on which the Grantee commits a breach of sub-paragraph (g) above; or

(viii) if our Directors at their absolute discretion determine that the Grantee (other than an Eligible Employee) or his close associate (or his associates if such Grantee is a connected person) has committed any breach of any contract entered into between the Grantee or his close associate (or his associates if such Grantee is a connected person) on the one part and our Group or any Invested Entity on the other part or that the Grantee has committed any act of bankruptcy or has become insolvent or is subject to any winding up, liquidation or analogous proceedings or has made any arrangement or composition with his creditors generally, our Directors shall determine that the outstanding Options granted to the Grantee (whether exercisable or not) shall lapse. In such event, his Options will lapse automatically and will not in any event be exercisable on or after the date on which our Directors have so determined.

–IV-24– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(n) Ranking of Shares

Shares allotted and issued upon exercise of an Option will be subject to all provisions of our Company’s articles of associations amended from time to time and will rank pari passu in all respects with the existing fully paid Shares in issue asfromthedaywhenthenameoftheGranteeisregisteredontheregisterof members of our Company and accordingly will entitle the holder to participate in all dividends or other distributions paid or made on or after the date when the name of the Grantee is registered on the register of members of our Company other than any dividend or other distribution previously declared or recommended or resolved to be paid or made with respect to a record date which shall be before the date when the name of the Grantee is registered on the register of members of our Company, provided always that when the date of exercise of the Option falls on a day upon which the register of members of our Company is closed then the exercise of the Option shall become effective on the first Business Day in Hong Kong on which the register of members of our Company is re-opened. A Share allotted upon exercise of an Option shall not carry any voting right until the completion of the registration of the Grantee as the holder thereof.

(o) Cancellation of Options granted

Any cancellation of Options granted in accordance with the Share Option Scheme but not exercised must be subject to the prior written consent of the relevant Grantee and approval of our Directors.

Where our Company elects to cancel Options and issue new ones to the same Grantee, the issue of such new Options may only be made under a scheme with available unissued Options (excluding cancelled Options) within the limit approved by the Shareholders.

(p)TheSchemePeriod

Subject to the termination of the Share Option Scheme, the Share Option Scheme will be valid and effective for the Scheme Period, after which period no further Options may be granted but the provisions of the Share Option Scheme shall remain in full force and effect in all other respects. Options granted during the Scheme Period and remain unexercised immediately prior to the end of the Scheme Period shall continue to be exercisable in accordance with their terms of grant, notwithstanding the expiry of the Share Option Scheme.

–IV-25– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(q) Alteration and termination of Share Option Scheme

The terms and conditions of the Share Options Scheme relating to the matters set out in Rule 23.03 of the GEM Listing Rules shall not be altered to the advantage of participants except with the approval of the Shareholders in general meeting, except where such alterations take effect automatically under the existing terms of the Share Option Scheme.

Any alterations to the terms and conditions of the Share Option Scheme which are of a material nature or any change to the terms of options granted must be approved by the Shareholders in general meeting, except where the alterations take effect automatically under the existing terms of the Share Option Scheme.

Any change to the authority of the Board in relation to any alteration to the term of the Share Option Scheme shall be approved by the Shareholders in general meeting except where the alteration take effect automatically under the existing terms of the Share Option Scheme.

The amended terms of the Share Option Scheme or the options must still comply with the relevant requirements of Chapter 23 of the GEM Listing Rules andnosuchalterationshalloperatetoaffect adversely the terms of issue of any option granted or agreed to be granted prior to such alteration except with the consent or sanction in writing of such number of grantees as shall together hold options in respect of not less than three-fourths in nominal value of all Shares then subject to options granted under the Share Option Scheme and provided further that any alterations to the terms and conditions of the Share Option Scheme which are of a material nature shall first be approved by the Stock Exchange.

Our Company must provide to all grantees all details relating to changes in the terms of the Share Option Scheme during the life of the Share Option Scheme immediately upon such changes taking effect.

Our Company, by ordinary resolution in general meeting, or the Board may at any time terminate the operation of the Share Option Scheme and in such event no further Options will be offered. On termination, the provision of the Share Option Scheme shall remain in full force and effect to the extent necessary to give effect to the exercise of the Options (to the extent not already exercised) granted prior to the termination or otherwise as may be required in accordance with the provision of the Share Option Scheme. Options (to the extent not already exercised) granted prior to such termination shall continue to be valid and exercisable in accordance with the Share Option Scheme.

–IV-26– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(r) Granting of option to a Director, chief executive of our Company or substantial Shareholder or any of their close associates

Where Options are proposed to be granted to a Director, chief executive of our Company or substantial Shareholder, or any of their respective close associates, the proposed grant must comply with the requirements of the GEM Listing Rules and be approved by all independent non-executive Directors (excluding any independent non-executive Director who is the grantee of the Options).

If a grant of Options to a substantial shareholder or an independent non- executive Director or their respective close associates will result in the Shares issuedandtobeissueduponexerciseofallOptionsgrantedandtobegranted (including both exercised and outstanding Options) to such a person in the 12-monthperioduptoandincludingthedateofsuchgrant:

(i) representing in aggregate over 0.1% of the relevant class of Shares in issue; and

(ii) having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of HK$5 million,

such a further grant of Options must be approved by Shareholders in a general meeting. All connected persons of our Company must abstain from voting at such general meeting, except that any connected person may vote against the resolution provided that his or her intention to do so has been stated in the circular. The circular must contain the information required under the GEM Listing Rules.

In addition, any change in the terms of the Option granted to a substantial Shareholder or an independent non-executive Director, or any of their respective close associates must also be approved by the Shareholders in a general meeting. The circular must contain the following:

(i) details of the number and terms of the Options (including the Option period, performance targets (if any), basis of determination of exercise price and the rights attached to the Shares or the Option) to be granted to each substantial Shareholder or independent non-executive Director, or any of their respective close associations, which must be fixed before the Shareholders’ meeting, and the date of the Board meeting for proposing such further grant should be taken as the date of grant for the purpose of calculating the subscription price;

(ii) a recommendation from the independent non-executive Directors (excluding any independent non-executive Director who is a Grantee of the Options) to the independent Shareholders as to voting; and

(iii) all other information as required by the GEM Listing Rules.

–IV-27– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

The requirements for the grant of an Option to a Director or chief executive of our Company set out in Rules 23.04(1), (2) and (3) shall not apply where the proposed grantee is only a proposed Director or chief executive of our Company.

(s) Conditions of Share Option Scheme

The Share Option Scheme is conditional upon on (i) the passing of resolutions by the Shareholders to adopt the Share Option Scheme and to authorise the Board to grant Options under the Share Option Scheme and to allot and issue Shares pursuant to the exercise of the Share Option Scheme; (ii) the Stock Exchange granting approval of the [REDACTED] of and permission to deal in the Shares which fall to be issued upon exercise of the Options granted (subject to an initial limit of 10% of the aggregate number of Shares in issue on the [REDACTED]); and (iii) the commencement of dealings in the Shares on GEM.

As at the Latest Practicable Date, no options had been granted or agreed to be granted by our Company under the Share Option Scheme.

Application has been made to the Stock Exchange for the approval of the Share Option Scheme, the subsequent granting of Options under Share Option Scheme and [REDACTED] of and permission to deal in the Shares which fall to be issued pursuant to the exercise of Options granted under the Share Option Scheme.

E. OTHER INFORMATION

1. Tax and other indemnities

Mr. Thomas Woo, Mr. Paul Grange and Bright Emerald (collectively, the ‘‘Indemnifiers’’) have entered into a deed of indemnity with and in favour of our Company (for itself and as trustee for each member of our Group), being a contract referredtointheparagraphheaded‘‘B.Furtherinformationaboutourbusiness—1. Summary of material contracts’’ in this appendix, to provide indemnities on a joint and several basis in respect of, among other things:

(a) taxation falling on any member of our Group resulting from or by reference to any revenue, income, profits or gains granted, earned, accrued, received or made (or deemed to be so granted, earned, accrued, received or made) on or beforethedateonwhichthe[REDACTED] becomes unconditional and dealings in shares of our Company first [REDACTED] on the Stock Exchange (the ‘‘Effective Date’’) or any transactions, matters, things, event, act or omission occurring or deemed to occur on or before such date, whether alone or in conjunction with any other transaction, matter, thing, event, act, omission or circumstance whenever occurring, and whether or not such taxation is chargeable against or attributable to any other person, firm, company or corporation and including any and all taxation resulting from the receipt by any member of our Group on or prior to the Effective Date of any amounts payable hereunder; and

–IV-28– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(b) all costs (including all legal costs), expenses, interests, penalties, fines, charges or other liabilities which any member of our Group may properly incur in connection with:

(i) the investigation, assessment, the contesting of any claim under (a) above;

(ii) the settlement of any claim under (a) above;

(iii) any disputes, arbitrations or legal proceedings in which any member of our Group claims under or in respect of (a) above, and in which judgment is given for any member of our Group; or

(iv) the enforcement of any such settlement or judgments, falling on any member of our Group which might be payable by our Company in respect of any incomes, profits or gains earned, accrued, received or entered into (or deemed to be so earned, accrued, received or entered into).

The Indemnifiers have also, under the deed of indemnity abovementioned, agreed and undertaken to each of the members of our Group and at all times keep the same indemnified on demand from and against any costs, expenses, losses, damages, claims or penalties that our Group may suffer or incur, as a result of or in connection with, among others, our Group’s non-compliance matters as such matters subsist on or prior to the Effective Date.

The Indemnifiers will, however, not be liable under the deed of indemnity for taxation, among other:

(a) to the extent that provision has been made for such taxation in the audited consolidated accounts of our Group or the audited accounts of any member of our Group for an accounting period ended on or before 30 April 2021;

(b) falling on any member of our Group as a result of any transaction entered into by any member of our Group on or after the Effective Date in the ordinary course of business, or in the ordinary course of acquiring or disposing of capital assets;

(c) to the extent that such taxation arises or is incurred as a consequence of any change in the law, rules or regulations, or the interpretation or practice thereof by the Inland Revenue Department or any other statutory or governmental authority in any part of the world having retrospective effect coming into force after the Effective Date or to the extent that such taxation arises or is increased by an increase in rates of taxation after the Effective Date with retrospective effect (except the

–IV-29– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

imposition of or an increase in the rate of Hong Kong profits tax or any tax of any part of the world on the profits of companies for the current or any earlier financial period);

(d) to the extent that such taxation is discharged by another person who is not a member of our Group and that none of the members of our Group is required to reimburse such person in respect of the discharge of the taxation; or

(e) to the extent of any provision or reserve made for taxation in the audited accountsreferredtoinsub-paragraph(a)abovewhichisfinally established to be an overprovision or an excessive reserve, provided that the amount of any such provision or reserve applied to reduce the liability of the Indemnifiers or any of them in respect of taxation shall not be available in respect of any such liability arising thereafter.

Our Directors have been advised that no material liability for estate duty is likely to fall upon any member of our Group.

2. Litigation

Save as disclosed in this document, our Directors confirm that as at the Latest Practicable Date, our Group was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is pending or threatened by or against any member of our Group.

3. The Sole Sponsor

The Sole Sponsor has made an application on behalf of our Company to the Stock Exchange for [REDACTED] of and permission to deal in our Shares in issue and to be issued as mentioned herein and any Shares which may fall to be issued pursuant to the exercise of the [REDACTED] or options which may be granted under the Share Option Scheme.

The Sole Sponsor satisfies the independence criteria applicable to sponsors as set out in Rule 6A.07 of the GEM Listing Rules.

TheSoleSponsorhasreceivedorwillreceiveafeeofapproximatelyHK$4.9 million to act as the Sole Sponsor to our Company in relation to the [REDACTED].

4. Preliminary expenses

The preliminary expenses relating to the incorporation of our Company are approximately HK$44,000 and are payable by our Company.

5. Promoter

Our Company has no promoter for the purpose of the GEM Listing Rules.

–IV-30– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

6. Qualifications of experts

The following are the respective qualifications of the experts who have given their opinion or advice which is contained in this document:

Name Qualification

Kingsway Capital Limited A corporation licensed under the SFO to carry on type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities

Grant Thornton Hong Kong Certified Public Accountants Limited

Frost & Sullivan Limited Industry Consultant

Mr. Poon Billy C.K. Barrister-at-law in Hong Kong

Conyers Dill & Pearman Cayman Islands attorneys-at-law

Altum Law Corporation Legal advisers of our Company as to Singapore laws

Beijing Dentons Law Legal advisers of our Company as to PRC laws Offices, LLP (Shenzhen)

7. Consents of experts

Each of the experts whose names are set out in the sub-section headed ‘‘E. Other information — 6. Qualifications of experts’’ in this appendix has given and has not withdrawn its written consents to the issue of this document, with the inclusion of its letters and/or reports and/or opinions and/or summary thereof (as the case may be) and/or reference to its name included herein in the form and context in which they respectively appear.

8. Binding effect

This document shall have the effect, if an application is made in pursuance hereof, of rendering all persons concerned bound by all of the provisions (other than the penal provisions) of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as applicable.

–IV-31– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

9. Registration procedures

[REDACTED] will maintain the principal register of members of our Company in the Cayman Islands and [REDACTED] will maintain a branch register of members of our Company in Hong Kong. Save where our Directors otherwise agree, all transfers and other documents of title to Shares must be lodged for registration with, and registered by, our Company’s branch share registrar in Hong Kong and may not be lodged in the Cayman Islands. We have made all necessary arrangements to enable the Shares to be admitted into CCASS.

10. Material adverse change

Our Directors confirm that there had been no material adverse change in the financial or trading position or prospects of our Company or its subsidiaries since 30 April 2021 (being the date to which the latest audited financial statements of our Group were made up) and up to the date of this document, save as disclosed in the paragraph headed ‘‘Summary — Recent Development’’ in this document.

11. Taxation of holders of Shares

(a) Hong Kong

Dealings in Shares registered on our Company’s Hong Kong branch register of members will be subject to Hong Kong stamp duty.

Profits from dealings in Shares arising in or derived from Hong Kong may also be subject to Hong Kong profits tax.

(b) Cayman Islands

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

We recommend intending holders of the Shares to consult their professional advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing, holding or disposing of or dealing in the Shares. It is emphasised that none of our Company, our Directors or parties involved in the [REDACTED] accepts responsibility for any tax effect on, or liabilities of holders of Shares resulting from their subscription for, purchase, holding or disposal of or dealing in Shares.

–IV-32– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

12. Miscellaneous

(a) Save as disclosed in this document:

(i) Within the two years immediately preceding the date of this document:

(aa) no share or loan capital of our Company or any of our subsidiaries has been issued, agreed to be issued or is proposed to be issued fully or partly paid up either for cash or for a consideration otherwise than in cash;

(bb) no commissions, discounts, brokerages or other special terms have been granted or agreed to be granted in connection with the issue or sale of any share or loan capital of any member of our Group and no commission has been paid or is payable in connection with the issue or sale of any share or loan capital of any member of our Group;

(cc) no commission has been paid or payable (except to [REDACTED]) for subscribing or agreeing to subscribe, procuring or agreeing to procure subscriptions, for any share or loan capital of any member of our Group;

(dd) no founder, management or deferred shares or any debentures of our Company have been issued or agreed to be issued; and

(ee) no share or loan capital of any member of our Group is under option or agreed conditionally or unconditionally to be put under option;

(ii) there has not been any interruption in the business of our Group which may have or have had a significant effect on the financial position of our Group in the 24 months immediately preceding the date of this document;

(iii) none of the parties listed in the paragraph headed ‘‘E. Other information — 6. Qualifications of experts’’ in this document:

(aa) is interested beneficially or non-beneficially in any securities in any member of our Group, including the Shares; or

(bb) has any right or option (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any securities in any member of our Group, including the Shares;

–IV-33– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

(iv) our Company and its subsidiaries did not have any debt securities issued or outstanding, or authorised or otherwise created but unissued, or any term loans whether guaranteed or secured as at the Latest Practicable Date;

(v) our Directors have been advised that, under Cayman Islands law, the use of a Chinese name by our Company in conjunction with the English name does not contravene Cayman Islands law;

(vi) no company within our Group is presently listed on any stock exchange or traded on any trading system;

(vii) our Group has no outstanding convertible debt securities;

(viii) the English text of this document shall prevail over the Chinese text; and

(ix) there are no arrangements in existence under which future dividends are waived or agreed to be waived.

13. Bilingual document

The English language and Chinese language versions of this document are being publishedseparatelyinrelianceupontheexemptionprovidedinsection4ofthe Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong).

–IV-34– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION

DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG

The documents attached to the copy of this document delivered to the Registrar of Companies in Hong Kong for registration were (i) a copy of the [REDACTED]; (ii) copies of the written consents referred to in the paragraph headed ‘‘E. Other information — 7. Consents of experts’’ in Appendix IV to this document; and (iii) copies of the material contracts referred to in the paragraph headed ‘‘B. Further information about our business — 1. Summary of material contracts’’ in Appendix IV to this document.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of David Fong & Co., at Unit A, 12/F, China Overseas Building, 139 Hennessy Road, Wanchai, Hong Kong during normal business hours up to and including the date which is 14 days from the date of this document:

(a) the Memorandum of Association and Articles of Association;

(b) the Accountant’s Report of our Group for each of FY2019, FY2020 and FY2021, the text of which is set out in Appendix I to this document;

(d) the independent reporting accountants’ assurance report on the compilation of the unaudited pro forma financial information, the text of which is set out in Appendix II to this document;

(e) the rules of the Share Option Scheme referred to in the paragraph headed ‘‘D. Share Option Scheme’’ in Appendix IV to this document;

(f) the letter of advice prepared by Conyers Dill & Pearman summarising certain aspects of the company law of the Cayman Islands referred to in Appendix III to this document;

(g) the legal opinion issued by our Legal Counsel;

(h) the Companies Act;

(i)thematerialcontractsreferredtointheparagraphheaded‘‘B.Further information about our business — 1. Summary of material contracts’’ in Appendix IV to this document;

(j) the consents of experts referred to in the paragraph headed ‘‘E. Other information — 7. Consents of experts’’ in Appendix IV to this document;

–V-1– THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED IN IT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.

APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION

(k) the Industry Report;

(l) the legal opinion issued by our Singapore Legal Advisers; and

(m) the legal opinion issued by our PRC Legal Advisers.

–V-2–