Page 149 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

1. Offshore Premium Department Store Businesses

The Company has not included such department store businesses under Central Retail as such businesses have
certain limitations in terms of contractual obligations and/or results of operations. Moreover, the customer base of
such department stores is geographically located in their regions and Central Retail currently does not operate any
department store in such regions. To prevent conflicts of interest in the future, HCDS has agreed to enter into an
agreement to grant the right to purchase such department store businesses to Central Retail before other buyers
at the price and on conditions not favor than what HCDS received from outside parties, and grant the right to
purchase such department store businesses to Central Retail at the price and on the conditions which the parties
will agree in good faith. The granting of such rights shall be in accordance with certain conditions as described in
the relevant agreements.

2. JD Central Business

The Company has not included such businesses under Central Retail as the nature of the business of JD Central
which is an online marketplace is different from Central Retail’s omni-channel format, and that the operation of
such company is mostly undertaken by JD.com. Moreover, JD.com has certain limitations in terms of its results of
operations. To prevent conflicts of interest in the future, HCDS has granted the right to Central Retail to purchase JD
Central before other buyers in the case that HCDS wishes to sell such business to other buyers at the same price and
on the same conditions. The granting of such rights will be in accordance with certain conditions as described in the
relevant agreements. The nature of the business of JD Central which focuses on pure-play e-commerce is different
from the omni-channel format of Central Retail since JD Central operate business through online marketplace
where stores are allowed to sell products through the website without the need to possess physical stores whereas
the omni-channel strategy of Central Retail is the combination of many selling channels for modern retailing,
including through physical stores, online stores, mobile phone, information media and social media, to create
seamless purchasing experience and respond to popular trends in line with the changing behavior of customers.

Annual Report 2021 (Form 56-1 One-Report) 149