# INDEBTEDNESS

The following table sets forth our other borrowings as at the dates indicated:

<table><tr><td rowspan="4"></td><td colspan="2">As at
31 December</td><td rowspan="2">As at
30 April
2017</td></tr><tr><td>2015</td><td>2016</td></tr><tr><td>HK$(’000)</td><td> HK$(’000)</td><td> HK$(’000)</td></tr><tr><td></td><td></td><td>(Unaudited)</td></tr><tr><td>Non-current</td><td></td><td></td><td></td></tr><tr><td>Other liability ...........................</td><td>11,282</td><td> –</td><td> –</td></tr></table>

Other liability of approximately HK\$11.3 million represented the fair value of the Pre-IPO Investment recognised as at 31 December 2015. As at 31 December 2016 and 30 April 2017, such other liability was transferred to our Group’s equity because the put option granted to our pre-IPO investor, namely Top Champ, to require our Company to repurchase the Shares held by Top Champ was removed under the Supplemental Deed. For details of the Supplemental Deed and the Pre-IPO Investment, please refer to the paragraphs headed “History, Reorganisation and corporate structure — Pre-IPO Investment” in this prospectus.

At the close of business on 30 April 2017, being the latest practicable date for the purpose of this indebtedness statement, we had aggregate bank facilities of HK\$8.0 million and which were unutilised. The bank facilities were guaranteed by Shui On (Shun On) and Mr. TC Yik and such guarantees provided will be fully released before Listing.

During the Track Record Period and up to the Latest Practicable Date, we did not experience any delay or default in payment of trade and non-trade payables or bank borrowing or any defaults in material financial covenants and finance costs of other liability, or any difficulties in obtaining banking facilities with terms that are commercially acceptable to us. As of the date of this prospectus, we did not have any plan for material external debt financing.

# Contingent liabilities

As at 30 April 2017, being the latest practicable date for the purpose of the indebtedness statement, we did not have any material contingent liabilities or guarantees.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, as at the Latest Practicable Date, our Group did not have outstanding loan, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances trade receivables or acceptable credits, authorised debentures, mortgages, charges, finance leases or hire purchase commitments, guarantees, material covenants, or other material contingent liabilities. As at the Latest Practicable Date, our Group did not have any external financing plans.

# OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENT

As at the Latest Practicable Date, we had not entered into any material off-balance sheet arrangement.

# RELATED PARTY TRANSACTIONS

For details of related party transactions, see note 32 to the Accountants’ Report in Appendix I to this prospectus. Our Directors confirm that these transactions were conducted in the ordinary and usual course of business and on normal commercial terms. Our Directors are of the view that the related party transactions did not cause any distortion of our results of operations or make our historical results non-reflective in the Track Record Period.

# KEY FINANCIAL RATIOS

The following table sets forth our key financial ratios as at each of the dates indicated:

<table><tr><td rowspan="2"></td><td colspan="2">For the year ended 31 December</td></tr><tr><td>2015</td><td>2016</td></tr><tr><td>Profitability ratios</td><td></td><td></td></tr><tr><td>(1)Net Profit Marign (%) ................................</td><td>91.2</td><td>12.9</td></tr><tr><td>(2)Return on equity (%) .................................</td><td>238.0</td><td>10.7</td></tr><tr><td>(3)Return on total assets (%) .............................</td><td>112.0</td><td>8.7</td></tr></table>

<table><tr><td rowspan="2"></td><td colspan="2">As at/year ended 31 December</td></tr><tr><td>2015</td><td>2016</td></tr><tr><td>Liquidity ratio</td><td></td><td></td></tr><tr><td>(4)Current ratio (times) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>5.5</td><td>2.5</td></tr><tr><td>Cailpta sufficiency ratio</td><td></td><td></td></tr><tr><td>(5)Interest coverage (times) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td> N/A</td><td>23.1</td></tr><tr><td>(6)Gearing ratio (%) ...................................</td><td>71.3</td><td> –</td></tr><tr><td>(7)Net debt to equity ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td> Net cash</td><td> Net cash</td></tr></table>

Notes:

1. Net profit margin was calculated by dividing profit for the year by revenue and multiplying the resulting value by 100%. Please refer to the paragraphs headed “Review of historical results of operations” above in this section for more details on the fluctuations of our net profit margin.

2. Return on equity equals profit for the year divided by the equity attributable to owners of the parent at the end of relevant year and multiplied the resulting value by 100%.

3. Return on total assets equals profit for the year divided by the total assets at the end of the relevant year and multiplied the resulting value by 100%.

4. Current ratio is calculated based on the total current assets at the end of the year divided by the total current liabilities at the end of the year.

5. Interest coverage equals profit before finance costs and tax divided by finance costs in the relevant year. Finance costs incurred for the year ended 31 December 2016 arose due to the imputed interest charged for the Pre-IPO Investment. Please see the paragraph headed “Financial information – Indebtedness” in this prospectus for further details of the Pre-IPO Investment as other liabilities.

6. Gearing ratio is calculated as the total debt at the end of the year divided by total equity at the end of the respective year and multiplied by 100%. Total debts includes payables incurred not in ordinary course of business (being other liabilities).

7. Net debt to equity ratio is calculated as total debts (other liabilities) net of cash and cash equivalents and restricted cash, and at the end of the year divided by total equity at the end of the respective year and multiplied by 100%.