Golden Resources Development International : DISCLOSEABLE TRANSACTION - SHARE BUY-BACK BY SUPREME DEVELOPMENT COMPANY LIMITED

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GOLDEN RESOURCES DEVELOPMENT INTERNATIONAL LIMITED 金源米業國際有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 677)

DISCLOSEABLE TRANSACTION

SHARE BUY-BACK BY

SUPREME DEVELOPMENT COMPANY LIMITED

On 26 March 2021, Supreme Development, a company beneficially owned as to appropriately 41.16% by the Company, entered into the Share Buy-back Agreement with SJHK and SPNC, pursuant to which Supreme Development conditionally agreed to buy back 3,501,350 SD Shares and 1,500,150 SD Shares (representing approximately 23.34% and 10% of the total number of issued shares of Supreme Development respectively) from SJHK and SPNC respectively at a total consideration of HK$27,505,500.

The increase in the Group's percentage shareholding in Supreme Development to 61.75% (and resulting in Supreme Development becoming a subsidiary of the Company) pursuant to the Share Buy-back is deemed to be an acquisition by the Company for the purposes of Chapter 14 of the Listing Rules. As the highest of the applicable percentage ratios in respect of the deemed acquisition exceeds 5% but is less than 25%, the deemed acquisition constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

SHARE BUY-BACK AGREEMENT

On 26 March 2021, Supreme Development, a company beneficially owned as to appropriately 41.16% by the Company, entered into the Share Buy-back Agreement with SJHK and SPNC, pursuant to which Supreme Development conditionally agreed to buy back 3,501,350 SD Shares and 1,500,150 SD Shares (representing approximately 23.34% and 10% of the total number of issued shares of Supreme Development respectively) from SJHK and SPNC respectively.

Conditions Precedent

Completion is conditional upon fulfillment of the following conditions precedent by Supreme Development:

(a)the board of directors of Supreme Development having passed resolutions approving the Share Buy-back Agreement and payment of the consideration from the distributable profits of the Company;

• (b) the shareholders of Supreme Development having passed resolutions authorizing the Share Buy-back;

• (c) Supreme Development having delivered certified true copies of the resolutions passed by the board of directors of Supreme Development (as referred to in (a) above) to Sojitz; and

• (d) Supreme Development having paid the consideration for the Share Buy-back to Sojitz's bank accounts.

As at the date of this announcement, the conditions precedent referred to (a) and (b) above have been fulfilled.

Consideration

The total consideration for the Sale Shares is HK$27,505,500, payable in cash by Supreme Development to SJHK and SPNC as to HK$19,255,500 and HK$8,250,000 respectively. Stamp duty payable on the buy-back of the Sale Shares will be borne by Supreme Development and Sojitz in equal shares. The consideration was determined with reference to the consolidated net assets of the Supreme Development Group. The agreed value of Supreme Development for the purpose of the Share Buy-back was HK$82,500,000, representing a discount of approximately 28.6% to the consolidated net assets of the Supreme Development Group of HK$115,508,081 as at 31 March 2020. As the Sale Shares represent approximately 33.34% of the total number of issued shares of Supreme Development, the total consideration for the Sale Shares was agreed to be HK$27,505,500.

Completion

Subject to fulfilment of the conditions precedent, Completion shall take place on 15 April 2021 (or such other date as may be agreed between the parties).

After Completion, the Supreme Development Group will become subsidiaries of the Company, and their financial results will be consolidated into that of the Group. Set out below are the simplified shareholding structures of Supreme Development as at the date of this announcement and after Completion respectively:

Upon Completion, Sojitz will cease to be parties to the existing shareholders' agreement between the existing shareholders of Supreme Development (other than GCT). Any sale or pledging of the SD Shares held by any party to the shareholders' agreement (including the Company and BBL) will continue to be subject to pre-emptive rights of the other parties under the shareholders' agreement.

INFORMATION ON SUPREME DEVELOPMENT

The Supreme Development Group is principally engaged in the business of manufacturing and sale of tubular and plastic bags.

Set out below is certain consolidated financial information of the Supreme Development Group (prepared in accordance with the Hong Kong Financial Reporting Standards) for the two financial years ended 31 March 2019 and 31 March 2020 and as at 31 March 2020:

For the year endedFor the year ended

31 March 2019

31 March 2020

HK$

HK$

(audited)

(audited)

Net profit/(loss) before taxation Net profit/(loss) after taxation

4,357,589 (10,162,567)

1,029,300 (15,356,720)

As at

31 March 2020

HK$

(audited)

Net assets

115,508,081

REASONS FOR AND BENEFITS OF THE SHARE BUY-BACK

As the negative effects of the COVID-19 pandemic on the business of the Supreme Development Group are showing signs of abatement, the Company believes it is likely that the business of the Supreme Development Group will start to improve in the second half of 2021. As the consideration for the Share Buy-back represents an approximately 28.6% discount to the consolidated net assets of the Supreme Development Group as referred to above, the Company considers that it provides the Group with a good opportunity to increase its percentage equity interest in the Supreme Development Group to enable the Group to benefit from such likely improvement in the business of the Supreme Development Group.

The Directors believe that the terms of the Share Buy-back are fair and reasonable and in the interests of the Company and its shareholders as a whole.

INFORMATION ON THE GROUP

The Group is principally engaged in the business of sourcing, importing, wholesaling, processing, packaging, marketing and distribution of rice, operation of convenience stores, securities investment, property investment and investment holding.

INFORMATION ON SOJITZ AND GCT

The principal business activity of SJHK is trading and indent sales of chemicals, electronics, foodstuff, general commodities, lumber and plastic products.

The principal business activity of SPNC is domestic and overseas trading of plastics materials for electronics, home appliances, automotive, home products and packaging market.

SJHK and SPNC are both wholly-owned subsidiaries of Sojitz Corporation, a corporation incorporated in Japan and whose shares are listed on the Tokyo Stock Exchange.

The principal business activity of GCT is trading. The ultimate controlling shareholder of GCT is Mr. CHANG Ur Way Lowell Godwin.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of Sojitz and GCT and its ultimate beneficial owner, Mr. LAU Shiu Yin and Mr. LAU Chi Leung are third parties independent of the Company and connected persons of the Company.

LISTING RULES IMPLICATIONS

The increase in the Group's percentage shareholding in Supreme Development to 61.75% (and resulting in Supreme Development becoming a subsidiary of the Company) pursuant to the Share Buy-back is deemed to be an acquisition by the Company for the purposes of Chapter 14 of the Listing Rules. As the highest of the applicable percentage ratios in respect of the deemed acquisition exceeds 5% but is less than 25%, the deemed acquisition constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

"%"

per cent

By Order of the Board

Golden Resources Development International Limited

Laurent LAM Kwing Chee

Chairman

Hong Kong, 26 March 2021

As at the date of this announcement, the executive Directors are Mr. Laurent LAM Kwing Chee (Chairman), Mr. Anthony LAM Sai Ho (Vice Chairman and Chief Executive Officer), Madam LAM Sai Mann, Ms. Morna YUEN Mai-tong and Mr. TSANG Siu Hung. The non-executive

Director is Mr. Dennis LAM Saihong. The independent non-executive Directors are Mr. Joseph LAM Yuen To, Mr. Michael YU Tat Chi and Mr. Ronald YAN Mou Keung.