Notice of Meeting and Independent Report

22 November 2018


Dear Shareholder

Please find enclosed notice of the Southern Charter Financial Group Limited (Company) special meeting of shareholders
which will be held on Friday 7 December 2018 at Link Market Services Limited, Level 11, Deloitte Centre, 80 Queen
Street, starting at 13.30pm. Shareholder registration opens at 13.00 pm.

The Special Meeting has been called at the request of the Company’s largest shareholder to approve a transfer of shares
under the Takeovers Code. All third party costs associated with this transaction will be paid by the new proposed
shareholder.

The Company has not had day-to-day business operations since the major transaction in 2017 where Golden Tower NZ
Limited (GTNZ) became the Company’s majority shareholder. GTNZ has now decided to dispose of its shareholding in the
Company and focus on its operations in Hong Kong.

The ordinary resolutions being put forward at the meeting is intended to approve a transaction whereby Mr Chang Ku EE
(Mr EE) acquires the 86% holding in the Company currently held by GTNZ, being 442,809,270 ordinary shares (GTNZ
Shares), for consideration of $2,950,000 (Transaction).

The proposed Transaction is not a reserve listing or reverse takeover of a business. No assets are being acquired. Mr EE
wishes to acquire a significant interest in the Company and then investigate investment opportunities and use the
Company as a vehicle to acquire businesses either in New Zealand or offshore. No acquisitions are currently being
negotiated and shareholders should note that it is highly likely that future acquisitions will require shareholder approval.

If approved, the Board of the Company considers the Transaction to be of significant benefit for the Company as it will:

1. introduce a new majority shareholder that wishes to use the Company as a platform for new business
opportunities; and
2. allows its existing majority shareholder (that no longer has any interest in using the Company to pursue any
business activity) to exit.

If not approved, GTNZ will need to find another buyer for the GTNZ Shares and the Company will remain a shell company
until another buyer is found. Until then, the Company will need to continue to meet its ongoing compliance costs
associated with being a publicly listed company, which it expects to be able to do on the basis of its current financial
position. It is unlikely that Mr EE or any other buyer would make a full takeover offer for the Company given that the
Company is a listed shell.
Shareholders may submit specific questions to the Board at any time in advance of the meeting by emailing Joseph van
Wijk at josephvanwijk@xtra.co.nz.

The enclosed shareholder proxy form has detailed instructions on how shareholders may lodge their vote or appoint a
proxy to vote on their behalf if they are unable to attend.

I look forward to seeing you at the meeting.

Yours faithfully


John Cilliers
Independent Director

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

Notice is hereby given that a Special Meeting of shareholders of Southern Charter Financial Group Limited (Company)
will be held on Friday 7 December 2018 at Link Market Services Limited, Level 11, Deloitte Centre, 80 Queen Street
starting at 13.30pm. Shareholder registration opens at 13.00pm.
AGENDA
A. The Chairman’s introduction.
B. Presentation to shareholders.
C. Shareholder discussion.
D. Resolutions.
RESOLUTIONS
To consider and, if thought fit, to pass the following Ordinary Resolutions:
1. Share Acquisition: That under Rule 7(c) of the Takeovers Code, Mr Chang Ku EE (Mr EE) is authorised to acquire
the 86% holding in the Company currently held by Golden Tower NZ Limited (GTNZ), being 442,809,270 ordinary
shares (GTNZ Shares), at a price of approximately $0.0067 per share.
2. Director Appointment: That Mr EE in accordance with Listing Rule 3.2.4 and clause 5.1 of the Company’s
constitution, be appointed as a Director of the Company.
Interdependence of Resolutions

All of the Resolutions contained in this Notice of Meeting are interdependent and must all be passed by shareholders in
order for any one of those resolutions to be effective.
PROCEDURAL NOTES
Other Business
To consider any other matter that may properly be brought before the meeting.
Proxies

Any shareholder of the Company who is entitled to attend and vote at the meeting may appoint a proxy to attend and
vote on their behalf. A corporation which is a shareholder may appoint a representative to attend the meeting on its
behalf in the same manner as it could appoint a proxy. A proxy does not need to be a shareholder of the Company. A
Proxy Form can be returned by delivery, mail, email, fax, or online (as set out below).
The Chairman of the Meeting (Joseph van Wijk) can be appointed as a proxy. The Chairman intends to vote in favor of
the Resolutions where he is a discretionary proxy.
The current directors, Mr Kawo Chan and Mr Chong Hoi Sze, can only be appointed as proxies where shareholders have
directed the vote. For the avoidance of doubt Mr Chan and Mr Sze cannot be appointed as discretionary proxies.
To appoint a proxy you should complete and sign the enclosed Proxy Form and either return it by mail or fax to the share
registrar of the Company:
By delivery:
Southern Charter Financial Group Limited
C/- Link Market Services Limited
Level 11, Deloitte House
80 Queen Street
Auckland 1010
By mail:
Southern Charter Financial Group Limited
C/- Link Market Services Limited
PO Box 91976
Victoria Street West
Auckland 1142

By Fax: +64 9 375 5990
By Email: meetings@linkmarketservices.co.nz (please put “Southern Charter Financial Group
Limited Proxy Form” as the subject of the email for easy identification)

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Alternatively, to appoint your proxy and vote online please go to the Link Market Services website at
https://investorcentre.linkmarketservices.co.nz/voting/SNC and follow the instructions. You will be required to enter
your CSN/Holder Number and Authorisation Code (FIN) for security purposes. A shareholder will be taken to have signed
the Proxy Form by lodging it in accordance with the instructions on the website.
The completed Proxy Form must be received by no later than 48 hours before the meeting, being 13.30pm on 5
December 2018. Online proxy appointments must also be completed by this time. Registered shareholders at that time
will be the only persons entitled to vote at the meeting and only the shares registered in those holders’ names at that
time may be voted at the meeting.
Ordinary Resolution

Resolutions 1 and 2 in this Notice of Meeting are ordinary resolutions. An ordinary resolution is a resolution passed by a
simple majority of votes of those holders of securities of the Company which carry votes, are entitled to vote and are
voting on the resolution in person or by proxy.
Voting Restrictions

In relation to Resolution 1 and pursuant to Rule 17 of the Takeovers Code, GTNZ and its Associates are prohibited from
voting any shares that they hold.
Under the Takeovers Code, a person is an “Associate” of another person if:
(a) the persons are acting jointly or in concert;
(b) the first person acts, or is accustomed to act, in accordance with the wishes of the other person;
(c) the persons are related companies;
(d) the persons have a business relationship, personal relationship or an ownership relationship such that they
should, under the circumstances, be regarded as “Associates”; or
(e) the first person is an associate of a third person who is an associate of the other person and the relationships
between the first person, the third person and the other person (or any of them) is such that, under the
circumstances, the first person should be regarded as an “Associate” of the other person.
The Company is not aware of any persons that hold shares in the Company that is an Associate of GTNZ.
The Company will disregard any votes cast on Resolution 1 by any persons to whom the foregoing applies. Any
discretionary proxies given to persons disqualified from voting under the requirements set out above will not be valid.
Proxies that give express voting instructions to such persons will however be accepted.
Independent Report
Accompanying this Notice of Meeting is the Independent Report. The Independent Report has been prepared by
Simmons Corporate Finance Limited and is a report from an independent adviser for the purposes of the Takeovers
Code. Shareholders are urged to read the Independent Report in full.
Listing Rule References

In this Notice of Meeting, references to the Listing Rules are references to the listing rules of the NZX Alternative Market.

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EXPLANATORY NOTES
These Explanatory Notes applies to the Resolutions in this Notice of Meeting. Later in this Notice of Meeting specific
disclosures for each Resolution are included (where required by law).

Background

In 2017, Southern Charter Financial Group Limited (Company) disposed all of its assets and liabilities to a private
company, except for $2.615million of cash. As part of that transaction, the Company gained a new majority shareholder,
Golden Tower NZ Limited (GTNZ), and the Company also changed its essential nature to focus on developing new
operations in the financial services sector. Since that transaction, the Company has yet to implement any new operations
and remains a shell company with $2,492,095 of cash & cash equivalents as shown in the audited financial statements as
at 31 March 2018.

GTNZ has determined to focus on its operations in Hong Kong and dispose of its shareholding in the Company.

The Transaction

On 7 November 2018, GTNZ entered into an Agreement for Sale and Purchase of Shares (Sale and Purchase Agreement)
with Mr Chang Ku EE, of Kuala Lumpur, Malaysia (Mr EE), whereby GTNZ agreed to sell its entire shareholding in the
Company, being 442,809,270 ordinary shares and equivalent to an 86% shareholding in the Company (GTNZ Shares), to
Mr EE (Transaction).

The Transaction does not change the Company’s position as a shell company but does in the opinion of the Board better
position the Company to acquire new businesses in New Zealand or offshore and commence active trading.

Sale and Purchase Agreement

The material commercial terms of the Sale and Purchase Agreement are:

1. Mr EE will pay GTNZ a cash sum of $2,950,000 as consideration for the GTNZ Shares (Purchase Price) on
completion of the Sale and Purchase Agreement.

2. Completion of the Sale and Purchase Agreement is subject to the shareholders’ approval of the Resolution.

3. Contemporaneously with the payment of the Purchase Price and completion of the Sale and Purchase
Agreement:

a. two of the Company’s existing Directors, Chong Hoi Sze and Ka Wo Chan, who is also the Company’s
Chairperson, will resign; and

b. Mr EE will be appointed as a new Director and Chairperson of the Company.

4. Mr EE will pay the Company’s full third party costs associated with obtaining approval for the Transaction.

Purchase Price

The Purchase Price for the GTNZ Shares represents a price per share of approximately $0.0067. This represents a
discount of $334,250 from the purchase price of $3,284,250 that GTNZ paid for the GTNZ Shares.
The net tangible assets price per share based on the latest available audited financial statements as at 31 March 2018
was $0.0048. The Board believe that the net tangible assets per share at the time the Transaction was announced to
market would not be significantly different from the audited financial statements as at 31 March 2018.
Completion

The intended completion date for the Transaction is three business days following the shareholders meeting if the
Resolutions are passed (Completion).

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Shareholding on Completion
The updated shareholding of the Company on Completion is illustrated in the table below:
Shareholder No. of Shares Percentage (%)
Mr EE 442,809,270 86.00%
Other shareholders 72,085,230 14.00%


Board Composition on Completion

At Completion, it is intended that current Directors Chong Hoi Sze and Kawo Chan, who is also the Company’s current
Chairperson, will resign and Mr EE be appointed as a new Director and replace Kawo Chan as Chairperson. The
Company’s other current Directors John Cilliers and Joseph van Wijk will remain in office as Directors of the Company.

In accordance with the Listing Rules, Mr EE would retire and stand for re-election as a director of the Company at the
2019 annual shareholders meeting.

A profile of Mr EE is included and set out below.

Biography of Mr EE

Full Name: Chang Ku EE
Qualifications: Bachelor of Engineering from University Putra Malaysia
Biography: Mr EE is a successful entrepreneur and has been involved in establishing and operating a range
of companies.

Mr EE has ownership interests and currently holds senior executive and company director roles
in the following South East Asian based companies:

1. Elitesoft Asia Group – a company established in 2007 specialising in web development
for corporate clients.

2. OD Group of companies – this group focuses on hospitality and the automotive
industry. Its businesses include the Muzeum Restaurant and Bar, Royer Club Charter
Yachts, OD Racing, ODR Lubricants and the provision of automotive services under the
Touch Auto brand.

3. Youth Lite International – a company that develops and distributes natural health care
and skin care products.

Mr EE’s former directorships include Bionic Sciences and Big Spec Optometry.

Mr EE has been conferred a Dato’ Sri by the Sultan of Pahang. Dato’ Sri is the highest state title
conferred on individuals who have contributed greatly to the nation or state of Malaysia.

Reason for the Acquisition

On Completion, Mr EE intends to use the Company as a vehicle to acquire businesses in either New Zealand or offshore.
Mr EE positively views using a listed company as an acquisition vehicle. If the Transaction does not proceed, it is unlikely
that Mr EE would make a full takeover offer for the Company as a full takeover would result in the Company being
delisted.
The Company will likely need to revert to shareholders for the approval of any acquisitions under the Listing Rules. At
such time full details of any proposed acquisitions will be disclosed for shareholder consideration. The purpose of the
Transaction is to position Mr EE as the largest shareholder of the Company and appoint him to the Board.

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Effect of the Transaction

The effect of the Transaction is that following the completion of the Transaction, Mr EE will become the majority
shareholder of the Company. The Company’s existing shareholders will each retain their current shares in the Company
in the same proportions with the result that there will be no dilutive effect on any shares. Mr EE will have the power
(except where any voting restrictions apply) to pass or block any ordinary resolution or special resolution of
shareholders. This includes the ability to control the composition of the Company’s Board of directors.

If the Transaction does not proceed, GTNZ will need to find another buyer for the GTNZ Shares and the Company will
remain a shell company until GTNZ finds another buyer to acquire the GTNZ Shares and commence active trading. Until
then, the Company will need to continue to meet its ongoing compliance costs associated with being a publicly listed
company but will have no business operations.

As set out above, Mr EE is unlikely to make a full takeover offer for the Company and any other buyer that GTNZ may find
is also highly unlikely to make a full takeover for the Company given the Company is a listed shell. As at the date of this
Notice of Meeting, the Company has not received any indication that another party is interested in making a full takeover
offer.

INDEPENDENT REPORT

This Notice of Meeting should be read in conjunction with the Independent Report, which assesses the fairness of the
Transaction.

RESOLUTION 1 - TAKEOVERS CODE

The Company is a "Code Company" under the Takeovers Code meaning that there are restrictions on persons together
with their associates acquiring voting rights (or the control of voting rights) above a 20% threshold. A permitted
procedure under the Takeovers Code is that the Company's non-associated shareholders approve an acquisition of voting
rights above this threshold. Resolution 1 seeks such approval.

The Transaction will allow Mr EE to acquire the GTNZ Shares, which will result in Mr EE holding over 20% of the shares in
the Company

The table below sets out the specific disclosures required by Rule 15 of the Takeovers Code for the share acquisition
being authorised by Resolution 1:

Rule 15, Takeovers Code Compliance Information
(a)
the identity of the following:
(i) the person acquiring the voting securities; and
Mr Chang Ku EE
(ii) (if different from the person described in paragraph (i)),
any person who will become a controller of an
increased percentage of voting securities in the code
company as a result of the acquisition; and
N/A
(iii) the person disposing of the voting securities. Golden Tower NZ Limited
(b)
particulars of the voting securities to be acquired, including:
(i) the number being acquired; and
442,809,270 shares
(ii) the percentage of all voting securities that that number
represents; and
86.00%
(iii) the percentage of all voting securities that will be held
or controlled by the person acquiring the voting
securities after completion of the acquisition; and
86.00%

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Rule 15, Takeovers Code Compliance Information
(iv) the aggregate of the percentages of all voting securities
that will be held or controlled by the person
acquiring the voting securities and by that person’s
associates after completion of the acquisition; and
86.00%
(c) Not applicable
(d)
the consideration for the acquisition or the manner in which the
consideration will be determined and when the consideration is
payable; and
$0.0067 per share is the consideration
negotiated between GTNZ and Mr EE and is
payable on Completion.
(e) the reasons for the transaction; and
The reasons for the Transaction is set out on
page 5 under heading ‘Reason for the
Acquisition’.
(f)
a statement to the effect that the acquisition, if approved, will
be permitted under rule 7(c) of the Takeovers Code as an
exception to rule 6 of the Takeovers Code; and
The acquisition of ordinary shares under the
Sale and Purchase Agreement, if approved, will
be permitted under rule 7(c) of the Takeovers
Code as an exception to rule 6 of the Takeovers
Code.
(g)
a statement by the person acquiring the voting securities setting
out particulars of any agreement or arrangement (whether or
not legally enforceable) that has been, or is intended to be,
entered into between the person and any other person (other
than between that person and the person disposing of the
voting securities in respect of the matters referred to in
paragraphs (a) to (e)) relating to the acquisition, holding, or
control of the voting securities to be acquired, or to the exercise
of voting rights in the code company; and
There is no agreement or arrangement
(whether or not legally enforceable) that has
been, or is intended to be, entered into
between the person acquiring the voting
securities and any other person relating to the
acquisition, holding, or control of the voting
securities to be acquired, or to the exercise of
voting rights in the Company.

(h)
the report from an independent adviser that complies with rule
18; and
The Independent Report from Simmons
Corporate Finance Limited accompanies this
notice of meeting.
(i)
the statement by the directors of the Code company referred to
in rule 19.
The directors of the Company unanimously
recommend approval of the Resolutions for the
reasons set out in the section entitled “Directors
Recommendation” below.


Directors’ Recommendation – Rule 19 of the Takeovers Code

The non-interested Directors of the Company, being John Cilliers and Joseph van Wijk, recommend that shareholders
vote in favour of Resolution 1 for the purposes of the Takeovers Code.

The grounds supporting this recommendation are:

1. The Company is a listed shell with no business operations. The Transaction will be the first step to acquiring a
business and commencing trading.

2. The existing majority shareholder no longer wishes to pursue any business operations using the Company. The
Transaction introduces a new cornerstone shareholder that intends to utilise the Company as a vehicle for
acquiring businesses.

The Company’s two other Directors, Kawo Chan and Chong Hoi Sze, are not making a recommendation to shareholders
as they are both interested in the Transaction. Mr Chan is an interested Director as he is the sole shareholder of GTNZ
and Mr Sze is an interested Director as he is an Associate of GTNZ.

---

www.simmonscf.co.nz



Southern Charter Financial Group
Limited

Independent Adviser’s Report

In Respect of the Proposed Acquisition of
Shares by Chang Ku EE from Golden
Tower NZ Limited

November 2018

Statement of Independence
Simmons Corporate Finance Limited confirms that it:
• has no conflict of interest that could affect its ability to provide an unbiased report; and
• has no direct or indirect pecuniary or other interest in the proposed transaction considered in the report,
including any success or contingency fee or remuneration, other than to receive the cash fee for providing
this report.
Simmons Corporate Finance Limited has satisfied the Takeovers Panel, on the basis of the material provided to the
Panel, that it is independent under the Takeovers Code for the purposes of preparing this report.

Southern Charter Financial Group Limited Independent Adviser’s Report
Index

Section Page

1. Introduction ..................................................................................................................... 1
2. Evaluation of the Merits of the Share Acquisition ............................................................ 5
3. Sources of Information, Reliance on Information, Disclaimer and Indemnity ................. 14
4. Qualifications and Expertise, Independence, Declarations and Consents ..................... 16

Southern Charter Financial Group Limited Page 1 Independent Adviser’s Report
1. Introduction
1.1 Background
Southern Charter Financial Group Limited (Southern Charter or the Company) is a
listed shell company that is seeking to grow by making acquisitions, preferably in the
financial services sector.
Southern Charter’s shares are listed on the alternative market (the NZAX) operated
by NZX Limited (NZX).
The Company’s market capitalisation was $0.5 million as at 19 November 2018 and
its audited total equity was $2.5 million as at 31 March 2018.
The Company was incorporated on 10 December 2013 as Elizabeth Listco Limited.
It changed its name to Lateral Corporation Limited on 27 March 2014 and to Southern
Charter Financial Group Limited on 22 December 2017.
On 31 March 2014, Southern Charter acquired all of the shares in Lateral Profiles
Limited (Profiles) from Robert McAuley and Roger Grice for $4.275 million.
Consideration was in the form of the issue of 17,100,000 fully paid ordinary shares
at an issue price of $0.25 per share. Profiles developed an e-commerce business
based on the sale of digital products and services charged directly to the customer’s
mobile phone account.
Southern Charter undertook a compliance listing and quotation of its shares on the
NZAX on 18 August 2014.
On 31 August 2017, the Company transferred all of its assets (except for $2,615,000
of cash) and liabilities to Profiles, disposed of 100% of the shares in Profiles by way
of an in specie distribution to its existing shareholders and issued 463,405,050 new
fully paid ordinary shares at $0.0071 (rounded) per share to Golden Tower NZ
Limited (Golden Tower), raising $3,284,250 (before costs) (the Golden Tower
Allotment). 20,595,780 of the Golden Tower Allotment shares were issued to
Tasman Capital Limited (Tasman) as a nominee of Golden Tower.
Golden Tower is currently Southern Charter’s largest shareholder, holding
442,809,270 ordinary shares. This represents 86.00% of the Company’s total shares
on issue.
1.2 Proposed Acquisition of Shares
Agreement for Sale and Purchase of Shares
On 7 November 2018, Golden Tower and Chang Ku EE entered into an Agreement
for Sale and Purchase of Shares (the ASPS) whereby Golden Tower will sell to Mr EE
its 442,809,270 ordinary shares in Southern Charter for $2,950,000 (representing a
price of $0.0067 (rounded) per share) (the Share Acquisition).

Southern Charter Financial Group Limited Page 2 Independent Adviser’s Report
The key terms of the ASPS are:
• Golden Tower will sell 442,809,270 ordinary shares in the Company to Chang
Ku EE
• the purchase price is $2,950,000 (equating to $0.0067 (rounded) per share),
payable in cash
• Mr EE will pay the Company’s full third party costs associated with obtaining
shareholder approval of the Share Acquisition
• upon completion of the Share Acquisition, Kawo (Karl) Chan and Chong Hoi
Sze will resign as directors of the Company and Chang Ku EE will be appointed
as a director of the Company and assume the role of chairperson.
Completion of the Share Acquisition is conditional upon the Company’s shareholders
not associated with Golden Tower (the Non-associated Shareholders) approving
the Share Acquisition by way of an ordinary resolution.
Completion of the Share Acquisition is expected to take place by 10 December 2018.
Golden Tower
Golden Tower is a company incorporated in New Zealand on 13 May 2016. It is
wholly owned by Kawo (Karl) Chan. Hongwen Song is the sole director of the
Company. Mr Song was a shareholder in Golden Tower until 22 November 2016.
We are advised that Golden Tower has interests in businesses operating in the
financial services sector and the property investment sector.
Chang Ku EE
Mr EE is a Malaysian national. We are advised by the Company’s board of directors
(the Board) that Mr EE is a successful entrepreneur who has been involved in
establishing and operating a range of South East Asian based companies including
Elitesoft Asia Group, OD Group of companies and Youth Lite International.
A biography of Mr EE is set out in the notice of special meeting which this report
accompanies.
1.3 Impact of the Share Acquisition on Shareholding Levels
The Share Acquisition will result in the Company’s 86.00% cornerstone shareholder
changing from Golden Tower to Mr EE, who currently does not hold any shares in
the Company.
The Non-associated Shareholders’ shareholdings in the Company will not change.
They will collectively hold 14.00% of the shares in the Company before and after the
Share Acquisition.

Impact of the Share Acquisition on Shareholding Levels


Current
Share
Acquisition
Post the Share
Acquisition
No. of
Shares
% No. of
Shares
No. of
Shares
%

Golden Tower 442,809,270 86.00% (442,809,270) - -

Chang Ku EE - - 442,809,270 442,809,270 86.00%

Non-associated Shareholders 72,085,230 14.00% - 72,085,230 14.00%


514,894,500 100.00% - 514,894,500 100.00%

Southern Charter Financial Group Limited Page 3 Independent Adviser’s Report
1.4 Special Meeting
Southern Charter is holding a special meeting of shareholders on 7 December 2018
where the Company will seek shareholder approval of:
• the Share Acquisition (resolution 1 – the Share Acquisition Resolution)
• the appointment of Chang Ku EE as a director of the Company (resolution 2 –
the Director Resolution).
The resolutions are ordinary resolutions (which are passed by a simple majority of
the votes cast).
The 2 resolutions are interdependent and must both be passed in order for either one
of the resolutions to be effective.
Golden Tower and its associates are not permitted to vote on the Share Acquisition
Resolution.
All shareholders are permitted to vote on the Director Resolution.
1.5 Regulatory Requirements
Southern Charter is a code company as defined by the Takeovers Code (the Code)
and is subject to the provisions of the Code.
Rule 6 of the Code prohibits:
• a person and that person’s associates who hold or control no voting rights or
less than 20% of the voting rights in a code company from increasing their
holding or control of voting rights beyond 20%
• a person and that person’s associates holding or controlling 20% or more of
the voting rights in a code company from increasing their holding or control of
voting rights
unless the person and that person’s associates comply with exceptions to this
fundamental rule.
One of the exceptions, set out in Rule 7(c) of the Code, enables a person and its
associates to increase their holding or control of voting rights by an acquisition of
shares if the acquisition is approved by an ordinary resolution of the code company.
The Share Acquisition will result in Mr EE increasing his control of the voting rights
in Southern Charter from nil to 86.00%.
Accordingly, the Non-associated Shareholders will vote at the Company’s special
meeting on the Share Acquisition Resolution.
Rule 18 of the Code requires the directors of a code company to obtain an
Independent Adviser’s Report on the merits of an acquisition under Rule 7(c).
This Independent Adviser’s Report is to be included in, or accompany, the notice of
meeting pursuant to Rule 15(h).

Southern Charter Financial Group Limited Page 4 Independent Adviser’s Report
1.6 Purpose of the Report
The Southern Charter directors not associated with Golden Tower, being
John Cilliers and Joseph van Wijk (the Non-associated Directors) have engaged
Simmons Corporate Finance Limited (Simmons Corporate Finance) to prepare an
Independent Adviser’s Report on the merits of the Share Acquisition in accordance
with Rule 18 of the Code.
Simmons Corporate Finance was approved by the Takeovers Panel on 6 November

2018 to prepare this Independent Adviser’s Report.
Simmons Corporate Finance issues this Independent Adviser’s Report to the
Non-associated Directors for the benefit of the Non-associated Shareholders to
assist them in forming their own opinion on whether to vote for or against the Share
Acquisition Resolution.
We note that each shareholder’s circumstances and objectives are unique.
Accordingly, it is not possible to report on the merits of the Share Acquisition in
relation to each shareholder. This report on the merits of the Share Acquisition is
therefore necessarily general in nature.
This Independent Adviser’s Report is not to be used for any other purpose without
our prior written consent.

Southern Charter Financial Group Limited Page 5 Independent Adviser’s Report
2. Evaluation of the Merits of the Share Acquisition
2.1 Basis of Evaluation
Rule 18 of the Code requires an evaluation of the merits of the Share Acquisition
having regard to the interests of the Non-associated Shareholders.
There is no legal definition of the term merits in either the Code or in any statute
dealing with securities or commercial law in New Zealand.
In the absence of an explicit definition of merits, guidance can be taken from:
• the Takeovers Panel Guidance Note on Independent Advisers and the
Takeovers Code dated 1 March 2018
• definitions designed to address similar issues within New Zealand regulations
which are relevant to the proposed transaction
• overseas precedents
• the ordinary meaning of the term merits.
We are of the view that an assessment of the merits of the Share Acquisition should
focus on:
• the rationale for the Share Acquisition
• the terms and conditions of the Share Acquisition
• the impact of the Share Acquisition on the control of Southern Charter
• the impact of the Share Acquisition on Southern Charter’s share price
• other issues associated with the Share Acquisition
• the implications if the Share Acquisition Resolution is not approved.
Our opinion should be considered as a whole. Selecting portions of the evaluation
without considering all the factors and analyses together could create a misleading
view of the process underlying the opinion.
2.2 Summary of the Evaluation of the Merits of the Share Acquisition
The Share Acquisition involves the sale of 86.00% of the shares in the Company by
Golden Tower to Chang Ku EE, resulting in a change in the Company’s cornerstone
shareholder and a change in the composition of the Board.
The Non-associated Shareholders have 3 alternatives with regard to their voting on
the Share Acquisition Resolution:
• vote in favour of the resolution, in which case the Share Acquisition will proceed
(assuming the Director Resolution is also approved), resulting in the
Company’s 86.00% cornerstone shareholder changing from Golden Tower to
Mr EE and Golden Tower’s 2 appointees resigning from the Board and Mr EE
being appointed to the Board and assuming the role of chairperson, or

Southern Charter Financial Group Limited Page 6 Independent Adviser’s Report
• vote against the resolution. In the event that the resolution is not passed, then
the Share Acquisition will not proceed and Golden Tower will retain its 86.00%
shareholding and 2 Board positions, or
• abstain from voting, in which case the voting of the other Non-associated
Shareholders will determine the outcome.
In our opinion, if the Share Acquisition was to proceed, it would have no
material negative aspects from the perspective of the Non-associated
Shareholders.
The Share Acquisition may place the Company (and hence the Non-associated
Shareholders) in a more advantageous position if Mr EE undertakes a
proactive role in the governance of Southern Charter and its investment
activities.
Our evaluation of the merits of the Share Acquisition is set out in detail in sections 2.3
to 2.8. In summary, the key factors leading to our opinion are:
• the rationale for the Share Acquisition is sound. The Share Acquisition is a
transaction between Golden Tower and Mr EE whereby Mr EE will acquire
Golden Tower’s shareholding in the Company. It does not represent a
backdoor listing transaction nor will it impact on the Company’s capital structure
or financial position
• the terms and conditions of the Share Acquisition are reasonable. The
acquisition price for the 442,809,270 shares is $0.0067 (rounded) per share,
which is:
− marginally lower than the issue price of $0.0071 (rounded) paid by Golden
Tower for the shares in August 2017
− higher than the Company’s net tangible assets (NTA) of $0.0048 per share
as at 31 March 2018
− significantly higher than the $0.001 to $0.002 volume weighted average
share prices (VWAP) at which the shares have traded on the NZAX over
the past 3 to 12 months (albeit on very small volumes)
• Mr EE will fully fund the Company’s third party costs associated with seeking
shareholder approval of the Share Acquisition
• the Share Acquisition will have no impact on the level of control over
shareholder voting from the perspective of the Non-associated Shareholders.
Mr EE will simply assume the level of control that Golden Tower currently holds
• the Share Acquisition will impact the composition of the Board. Golden Tower’s
2 representatives will resign from the Board and Mr EE will be appointed to the
Board and assume the role of chairperson
• the Share Acquisition may have a positive impact on the Company’s operations
if Mr EE undertakes a proactive role in seeking and executing investment
transactions
• the Share Acquisition may have a positive impact on Southern Charter’s share
price. However, the extremely limited trading in the Company’s shares may
restrict any significant uplift in the Company’s share price
• the Share Acquisition will have no impact on the liquidity of Southern Charter’s
shares

Southern Charter Financial Group Limited Page 7 Independent Adviser’s Report
• the Share Acquisition will have no dilutionary impact on the Non-associated
Shareholders’ voting rights
• the Share Acquisition will have no impact on the attraction of Southern Charter
as a takeover target
• the implications of the Share Acquisition Resolution not being approved by the
Non-associated Shareholders are that the Share Acquisition cannot proceed.
The Company will continue to operate as it currently does with Golden Tower
holding 86.00% of the Company’s shares and having 2 appointees to the
Board. We would expect that Golden Tower would seek an alternate buyer of
its shares, in which case, shareholder approval of the transaction would once
again be required.
2.3 Rationale for the Share Acquisition
The Golden Tower Allotment was approved by the Company’s shareholders on
7 August 2017. At the time, Golden Tower and the Company stated that Southern
Charter would focus on developing new business interests in the financial services
sector.
We are advised by the Board that Golden Tower has now decided to focus on its
operations in Hong Kong and therefore wishes to dispose of its shareholding in the
Company.
The Share Acquisition simply represents the sale of Golden Tower’s 86.00%
shareholding in the Company to Mr EE. It will introduce a new cornerstone
shareholder into the Company (Mr EE) and enable Golden Tower to exit its
investment.
The Board understands that Mr EE intends to use Southern Charter as a vehicle to
acquire businesses in either New Zealand or overseas.
The Share Acquisition does not represent a backdoor listing transaction or the
acquisition or divestment of any assets by the Company.
The Share Acquisition will not have any direct impact on the Company’s capital
structure or on its financial position.
We note that if and when the Company does make an acquisition, it will likely need
to revert to shareholders for the approval of the transaction. Depending on the size
of the transaction, the Company may need to raise additional capital, which may be
in the form of debt and / or fresh equity.

Southern Charter Financial Group Limited Page 8 Independent Adviser’s Report
2.4 Impact on Control
Shareholding Voting
Southern Charter currently has 514,894,500 fully paid ordinary shares on issue held
by 488 shareholders.
The names, number of shares and percentage holding of the 10 largest shareholders
as at 15 November 2018 are set out below.

10 Largest Shareholders

Shareholder No. of Shares %

Golden Tower 442,809,270 86.00%
Trinity Portfolio Limited (Trinity) 12,395,630 2.41%
Robert McAuley 7,464,312 1.45%
Roger Grice 7,459,505 1.45%
Dene Biddlecombe and Peter Hine 5,273,406 1.02%
Russell Maloney 5,015,092 0.97%
Tasman 5,000,000 0.97%
John Philpott 4,938,425 0.96%
Lei Pei 4,000,000 0.78%
Global Paradigm 2,785,714 0.54%

Subtotal
497,141,354 96.55%
Others (478 shareholders) 17,753,146 3.45%

Total
514,894,500 100.00%

Source: NZX Company Research

The Share Acquisition will result in Mr EE replacing Golden Tower as the holder of
86.00% of the voting rights in the Company.
From the Non-associated Shareholders’ perspective, there will be no change in the
level of control over shareholder voting as Mr EE will simply assume the level of
control that Golden Tower currently holds.
Mr EE will be able to singlehandedly determine the outcome of any special
resolutions (which require the approval of 75% of the votes cast by shareholders)
and the outcome of any ordinary resolutions (which require the approval of more than
50% of the votes cast by shareholders), subject always to applicable voting
restrictions under the NZAX Listing Rules and the Companies Act 1993 (the Act).
Following the Share Acquisition, Mr EE will not be able to further increase his
shareholding in Southern Charter unless he complies with the provisions of the Code.
Mr EE will only be able to acquire more shares in Southern Charter if:
• he makes a full or partial takeover offer or
• a share acquisition is approved by way of an ordinary resolution of
shareholders or
• the Company makes an allotment of shares which is approved by way of an
ordinary resolution of shareholders
• the Company undertakes a share buyback that is approved by the Company’s
shareholders and Mr EE does not accept the offer of the buyback
• Mr EE utilises the creep provisions under Rule 7(e) of the Code. The creep
provisions enable entities that hold more than 50% but less than 90% of the
voting securities in a code company to acquire up to a further 5% of the code
company’s shares per annum. The creep provisions will become available to
be utilised 12 months after the completion of the Share Acquisition.

Southern Charter Financial Group Limited Page 9 Independent Adviser’s Report
We note that under Rule 50 of the Code, if Mr EE holds or controls 90% or more of
the voting rights in the Company, he will be classed as a dominant owner of Southern
Charter. Accordingly, he would have the right under Rule 52 of the Code to acquire
all outstanding shares in the Company and the Non-associated Shareholders would
have the right under Rule 53 of the Code to sell their shares to Mr EE.
Board of Directors
The directors of Southern Charter are:
• Kawo (Karl) Chan, chairperson and non-executive director, associated with
Golden Tower
• John Cilliers, independent non-executive director
• Chong Hoi Sze, non-executive director, associated with Golden Tower
• Joseph van Wijk, non-executive director, associated with Trinity and Tasman.
Under the terms of the ASPS, Mr Chan and Mr Sze will resign from the Board and
Mr EE will be appointed as a director of the Company and will assume the role of
chairperson of the Board.
NZAX listed companies must have a minimum of 3 directors, but there is no
requirement for independent directors.
Operations
The Company has not undertaken any acquisitions since the Golden Tower Allotment
in August 2017. It has remained as a listed shell company with approximately
$2.5 million of cash on hand.
The Board is of the view that Mr EE’s presence as a cornerstone shareholder and
chairperson may be beneficial to the Company as it may place Southern Charter in
a better position to acquire new businesses in New Zealand or overseas and
commence active trading.
Protection for Minority Shareholders
While Mr EE will have significant control over Southern Charter, he cannot act in an
oppressive manner against minority shareholders. The Act provides a level of
protection to minority shareholders. Furthermore, any transactions between
Southern Charter and any shareholder holding 10% or more of the Company’s shares
will need to satisfy the requirements of the NZAX Listing Rules with respect to
transactions with related parties.

Southern Charter Financial Group Limited Page 10 Independent Adviser’s Report
2.5 Impact on Share Price and Liquidity
Set out below is a summary of Southern Charter’s daily closing share price and
monthly volumes traded from 5 January 2016 to 19 November 2018.

Source: NZX Company Research
During the period, Southern Charter’s shares traded between $0.001 (on 21 August
2018) and $0.140 (on 5 January 2016) at a VWAP of $0.024.
$0.001 is the lowest price that a share can trade at on the NZAX.
Share Price May be Positively Impacted
The Share Acquisition price of $0.0067 (rounded) per share:
• is marginally below the issue price of the shares to Golden Tower in August
2017 of $0.0071 (rounded) per share
• is higher than the Company’s NTA of $0.0048 per share as at 31 March 2018
• is significantly higher than the $0.001 to $0.002 VWAP at which the Company’s
shares have traded over the past 3 to 12 months (albeit on very small volumes).
In our view, the Share Acquisition may have a positive impact on Southern Charter’s
share price as it is at a price that is significantly higher than the Company’s current
share price. However, the extremely limited trading in the Company’s shares may
restrict any significant uplift in the Company’s share price.

Southern Charter Financial Group Limited Page 11 Independent Adviser’s Report
Liquidity of Southern Charter Shares Unlikely to Change
Trading in the Company’s shares is extremely thin, reflecting that the top 10
shareholders collectively hold 96.55% of the shares.
An analysis of VWAP, traded volumes and liquidity (measured as traded volumes as
a percentage of shares outstanding) up to 19 November 2018 is set out below.

Share Trading up to 19 November 2018

Period Low

($)
High

($)
VWAP

($)
Volume
Traded
(000)
Liquidity

1 month n/a n/a n/a n/a n/a

3 months 0.001 0.001 0.001 294 0.1%

6 months 0.001 0.005 0.001 301 0.1%

12 months 0.001 0.020 0.002 320 0.1%

n/a: Not applicable as the shares did not trade

Source: NZX Company Research

The shares traded on only 6 days in the year to 19 November 2018.
The number of shares held by the Non-associated Shareholders will not change
under the Share Acquisition. Therefore the liquidity of the Southern Charter shares
is unlikely to change.
2.6 Other Issues
Impact of Mr EE as the Company’s Cornerstone Shareholder
The Share Acquisition offers Mr EE an effective and efficient means to achieve a
controlling shareholding in a New Zealand listed shell company with approximately
$2.5 million of cash on hand and total equity as at 31 March 2018.
The Share Acquisition will provide a number of benefits to Mr EE:
• an enhancement of Mr EE’s profile in the New Zealand market place
• the ability to raise equity capital more easily
• the ability to use scrip for acquisitions.
Mr EE to Pay the Company’s Third Party Shareholder Approval Costs
Under the terms of the ASPS, Mr EE will pay an initial amount of $100,000 to
Southern Charter to be applied by the Company towards third party costs associated
with obtaining shareholder approval of the Share Acquisition. These costs include
legal expenses and costs associated with the special meeting (including fees for this
report, NZX fees and Takeovers Panel fees).
The payment of $100,000 was received by the Company on 25 October 2018.

Southern Charter Financial Group Limited Page 12 Independent Adviser’s Report
In the event that the Company’s actual costs are:
• greater than $100,000, Mr EE will pay to the Company the additional amount
• less than $100,000, the Company will refund the balance to Mr EE within 30
business days of the completion of the Share Acquisition.
No Dilutionary Impact
As the Share Acquisition is a transfer of existing shares between Golden Tower and
Mr EE, it will have no dilutionary impact on the Non-associated Shareholders. No
new shares are being issued by the Company.
No Change to the Attraction of Southern Charter as a Takeover Target
In our view, the Share Acquisition is unlikely to have any impact on the attraction of
Southern Charter as a takeover target.
Any bidder looking to make a takeover offer for the Company would need to ensure
that the Company’s 86.00% cornerstone shareholder would accept its offer,
irrespective of whether that is Golden Tower or Mr EE.
Non-associated Shareholder Approval is Required
Pursuant to Rule 7(c) of the Code, the Non-associated Shareholders must approve
by ordinary resolution the Share Acquisition.
The Share Acquisition will not proceed unless the Non-associated Shareholders
approve the Share Acquisition Resolution (and the Director Resolution is also
approved).
No Impact on Financial Position
As the Share Acquisition is a transfer of existing shares and does not alter the
Company’s capital structure, it will have no direct impact on Southern Charter’s
financial position.
No Change in Business Risk
Similarly, the Share Acquisition will have no immediate impact on the business risks
faced by the Company.
2.7 Likelihood of the Share Acquisition Resolution Being Approved
The Share Acquisition Resolution and the Director Resolution are ordinary
resolutions and are interdependent. Golden Tower and its associates cannot vote
on the Share Acquisition Resolution but all shareholders can vote on the Director
Resolution.
The Non-associated Shareholders collectively hold 14.00% of the Company’s
shares. Accordingly, their votes will determine the outcome of whether the Share
Acquisition Resolution will be approved. If all of the Non-associated Shareholders’
shares are voted, then over 7.00% of the shares must be voted in favour of the
resolution for it to pass.
The 2 Non-associated Directors collectively control 3.39% of the voting rights in the
Company. The Non-associated Directors have stated in the notice of special meeting
that they recommend voting in favour of the Share Acquisition Resolution.

Southern Charter Financial Group Limited Page 13 Independent Adviser’s Report
Golden Tower is permitted to vote on the Director Resolution. If Golden Tower votes
in favour of the Director Resolution, it is certain to be passed.
2.8 Implications if the Share Acquisition Resolution is not Approved
If either the Share Acquisition Resolution or the Director Resolution is not approved,
the Share Acquisition cannot proceed. Golden Tower will retain its 86.00%
shareholding, the Board composition will remain the same and the Company will
continue to operate as it has since Golden Tower acquired its shareholding in August
2017. The Company will need to continue to meet its ongoing compliance costs
associated with being a listed company, which it expects to be able to do so on the
basis of its current financial position.
We would expect that Golden Tower would seek to find another buyer for its shares.
It is does so, shareholder approval of the transaction will be required.
We consider it highly unlikely that Golden Tower (or another bidder) would make a
full takeover offer for Southern Charter given that the Company is a listed shell
company whose main asset is cash.
Similarly, given the nature of the Company, we consider it highly unlikely that the
Board would decide to wind up Southern Charter.
2.9 Voting For or Against the Share Acquisition Resolution
Voting for or against the Share Acquisition Resolution is a matter for individual
shareholders based on their own views as to value and future market conditions, risk
profile and other factors. Non-associated Shareholders will need to consider these
consequences and consult their own professional adviser if appropriate.

Southern Charter Financial Group Limited Page 14 Independent Adviser’s Report
3. Sources of Information, Reliance on Information, Disclaimer
and Indemnity
3.1 Sources of Information
The statements and opinions expressed in this report are based on the following main
sources of information:
• the draft notice of special meeting
• the ASPS dated 6 November 2018
• the Southern Charter annual reports for the years ended 31 March, 2015 to
2018
• data in respect of Southern Charter from NZX Company Research and S&P
Capital IQ
• information provided by Chang Ku EE to the Non-associated Directors.
During the course of preparing this report, we have had discussions with and / or
received information from the Non-associated Directors.
The Non-associated Directors have confirmed that we have been provided for the
purpose of this Independent Adviser’s Report with all information relevant to the
Share Acquisition that is known to them and that all the information is true and
accurate in all material aspects and is not misleading by reason of omission or
otherwise.
Including this confirmation, we have obtained all the information that we believe is
desirable for the purpose of preparing this Independent Adviser’s Report.
In our opinion, the information to be provided by Southern Charter to the
Non-associated Shareholders is sufficient to enable the Non-associated Directors
and the Non-associated Shareholders to understand all the relevant factors and to
make an informed decision in respect of the Share Acquisition.

3.2 Reliance on Information
In preparing this report we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was available from
public sources and all information that was furnished to us by Southern Charter and
its advisers.
We have evaluated that information through analysis, enquiry and examination for
the purposes of preparing this report but we have not verified the accuracy or
completeness of any such information or conducted an appraisal of any assets. We
have not carried out any form of due diligence or audit on the accounting or other
records of Southern Charter. We do not warrant that our enquiries would reveal any
matter which an audit, due diligence review or extensive examination might disclose.

Southern Charter Financial Group Limited Page 15 Independent Adviser’s Report
3.3 Disclaimer
We have prepared this report with care and diligence and the statements in the report
are given in good faith and in the belief, on reasonable grounds, that such statements
are not false or misleading. However, in no way do we guarantee or otherwise
warrant that any forecasts of future profits, cash flows or financial position of Southern
Charter will be achieved. Forecasts are inherently uncertain. They are predictions
of future events that cannot be assured. They are based upon assumptions, many
of which are beyond the control of Southern Charter and its directors and
management. Actual results will vary from the forecasts and these variations may be
significantly more or less favourable.
We assume no responsibility arising in any way whatsoever for errors or omissions
(including responsibility to any person for negligence) for the preparation of the report
to the extent that such errors or omissions result from our reasonable reliance on
information provided by others or assumptions disclosed in the report or assumptions
reasonably taken as implicit, provided that this shall not absolve Simmons Corporate
Finance from liability arising from an opinion expressed recklessly or in bad faith.
Our evaluation has been arrived at based on economic, exchange rate, market and
other conditions prevailing at the date of this report. Such conditions may change
significantly over relatively short periods of time. We have no obligation or
undertaking to advise any person of any change in circumstances which comes to
our attention after the date of this report or to review, revise or update this report.
We have had no involvement in the preparation of the notice of special meeting
issued by Southern Charter and have not verified or approved the contents of the
notice of special meeting. We do not accept any responsibility for the contents of the
notice of special meeting except for this report.
3.4 Indemnity
Southern Charter has agreed that, to the extent permitted by law, it will indemnify
Simmons Corporate Finance and its directors and employees in respect of any
liability suffered or incurred as a result of or in connection with the preparation of the
report. This indemnity does not apply in respect of any negligence, wilful misconduct
or breach of law. Southern Charter has also agreed to indemnify Simmons Corporate
Finance and its directors and employees for time incurred and any costs in relation
to any inquiry or proceeding initiated by any person. Where Simmons Corporate
Finance or its directors and employees are found liable for or guilty of negligence,
wilful misconduct or breach of law or term of reference, Simmons Corporate Finance
shall reimburse such costs.

Southern Charter Financial Group Limited Page 16 Independent Adviser’s Report
4. Qualifications and Expertise, Independence, Declarations and
Consents
4.1 Qualifications and Expertise
Simmons Corporate Finance is a New Zealand owned specialist corporate finance
advisory practice. It advises on mergers and acquisitions, prepares independent
expert's reports and provides valuation advice.
The person in the company responsible for issuing this report is Peter Simmons,
B.Com, DipBus (Finance), INFINZ (Cert).
Simmons Corporate Finance and Mr Simmons have significant experience in the
independent investigation of transactions and issuing opinions on the merits and
fairness of the terms and financial conditions of the transactions.
4.2 Independence
Simmons Corporate Finance does not have at the date of this report, and has not
had, any shareholding in or other relationship with Southern Charter, Golden Tower
or Mr EE or any conflicts of interest that could affect our ability to provide an unbiased
opinion in relation to the Share Acquisition.
Simmons Corporate Finance has not had any part in the formulation of the Share
Acquisition or any aspects thereof. Our sole involvement has been the preparation
of this report.
Simmons Corporate Finance will receive a fixed fee for the preparation of this report.
This fee is not contingent on the conclusions of this report or the outcome of the
voting in respect of the Share Acquisition Resolution. We will receive no other benefit
from the preparation of this report.
4.3 Declarations
An advance draft of this report was provided to the Non-associated Directors for their
comments as to the factual accuracy of the contents of the report. Changes made to
the report as a result of the circulation of the draft have not changed the methodology
or our conclusions.
Our terms of reference for this engagement did not contain any term which materially
restricted the scope of the report.
4.4 Consents
We consent to the issuing of this report in the form and context in which it is to be
included in the notice of special meeting to be sent to the Non-associated
Shareholders. Neither the whole nor any part of this report, nor any reference thereto
may be included in any other document without our prior written consent as to the
form and context in which it appears.


Peter Simmons
Director
Simmons Corporate Finance Limited
20 November 2018