China Resources Building Materials Technology Holdings Limited - Proxy Solicitation & Information Statement 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Landing International Development Limited, you should at once hand this circular and the accompanying forms of proxy to the purchaser(s) or the transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong 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 circular. The circular is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

Landing International Development Limited 藍鼎國際發展有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock code: 582)

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TEN ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL;

(3) PROPOSED RIGHTS ISSUE ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE;

(4) APPLICATION FOR WHITEWASH WAIVER; AND (5) CONNECTED TRANSACTION IN RELATION TO PAYMENT OF UNDERWRITING COMMISSION

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 12 to 37 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 38 to 39 of this circular. A letter of advice from Gram Capital to the Independent Board Committee and the Independent Shareholders is set out on pages 40 to 54 of this circular.

To qualify for the Rights Issue, the Shareholder must be registered as a member of the Company on the Record Date, which is currently expected to be Thursday, 25 June 2015. In order to be registered as a member of the Company on the Record Date, the Shareholders must lodge any transfers of Shares (together with the relevant share certificate(s)) with the Share Registrar by 4:30 p.m. on Friday, 19 June 2015. The last day of dealings in Consolidated Shares on a cum-rights basis is therefore expected to be Wednesday, 17 June 2015. The Consolidated Shares will be dealt with on an ex-rights basis from Thursday, 18 June 2015. A notice convening the SGM to be held at 1804A, 18/F., Tower 1, Admiralty Centre, 8 Harcourt Road, Admiralty, Hong Kong at 10:00 a.m. on Monday, 15 June 2015 is set out on pages SGM–1 to SGM–3 of this circular. If a Shareholder is not able to attend the SGM in person, such Shareholder is requested to complete and return the enclosed form of proxy in accordancethe office ofwiththe Sharethe instructionsRegistrar atprintedLevelthereon22, HopewelltogetherCentre,with any183powerQueenof’s RoadattorneyEast,or Hongother Kongauthorityas soon(if any)as possibleunder whichand init anyis signedevent notor alesscertifiedthan 48copyhoursof suchbeforepowerthe timeof attorneyappointedto Sharefor holdingRegistrarthe SGM.is TricorCompletionStandard andLtd. returnat Levelof 22,the Hopewellform of proxyCentre,will183notQueenpreclude’s Roada ShareholderEast, HongfromKong.attending and voting in person at the SGM should the Shareholder so desire. The Theand theRights‘‘UnderwritingIssue is conditionalAgreementupon’’ ofthethefulfillment‘‘Letter fromof thetheconditionsBoard’’ in(or,thisincircular.respect of certain conditions, waiver thereof) as set out in the section headed ‘‘Conditions of the Rights Issue’’ The Underwriters may terminate the arrangements set out in the Underwriting Agreement by notice in writing given to the Company at any time prior to 4:00 p.m. on Thursday, 16 July 2015, if: (i) in the absolute opinion of any Underwriter, the success of the Rights Issue would be materially and adversely affected by: (a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the absolute opinion of any Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Rights Issue; or (b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date hereof) of a political, military, financial, economic or other nature (whether or not ejusdem generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the absolute opinion of any Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or materially and adversely prejudice the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; (ii) any adverse change in market conditions (including without limitation, any change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or material restriction or trading in securities) occurs which in the absolute opinion of any Underwriter is likely to materially or adversely affect the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; (iii) any change in the circumstances of the Company or any member of the Group occurs which in the absolute opinion of any Underwriter will adversely affect the prospects of the Company, including without limiting the generality of the foregoing, the presentation of a petition or the passing of a resolution for the liquidation or winding up or similar event occurring in respect of any of member of the Group or the destruction of any material asset of the Group; (iv) any event of force majeure occurs, including without limiting the generality thereof, any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out; (v) any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole occurs, whether or not ejusdem generis with any of the foregoing; (vi) any matter occurs which, had it arisen or been discovered immediately before the date of the Prospectus and not having beentradingdisclosedof securitiesin thegenerallyProspectus,or thewouldCompanyhave constituted,’s securitiesinonthetheabsoluteStock Exchangeopinion offoranya Underwriter,period of morea materialthan 10 omissionconsecutivein thebusinesscontextdaysof theoccurs,RightsexcludingIssue; (vii)any anyhaltsuspensionor suspensionin thein connection with the clearance of the Announcement or the Prospectus Documents or other announcements or circulars in connection with the Rights Issue; and (viii) any moratorium, suspension or material restriction on trading of the Shares on the Stock Exchange occurs due to exceptional financial circumstances or otherwise. Upon the giving of such notice, all obligations of the Underwriters under the Underwriting Agreement shall cease and determine (save for any antecedent breaches thereof) and no party to the Underwriting Agreement shall have any claim against any other party in respect of any matter or thing arising out of or in connection with the Underwriting Agreement. If the Underwriters exercise such right, the Rights Issue will not proceed. A further announcement will be made by the Company if the Underwriting Agreement is terminated by the Underwriters.

The Consolidated Shares are expected to be dealt in on an ex-rights basis from Thursday, 18 June 2015. Dealings in the Rights Shares in the nil-paid form will take place from Thursday, 2 July 2015 to Thursday, 9 July 2015. If the conditions of the Rights Issue are not fulfilled on or before 4:00 p.m. on Thursday, 16 July 2015 (or such later time and/or date as the Company and the Underwriters may determine), or the Underwriting Agreement is terminated by the Underwriters, the Rights Issue will not proceed. Any persons contemplating buying or selling Shares from the date of the Announcement up to the date on which all the conditions of the Rights Issue are fulfilled, and any dealings in the Rights Shares in their nil-paid form between Thursday, 2 July 2015 to Thursday, 9 July 2015, (both days inclusive), bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholders or other persons contemplating dealing in the Shares or nil-paid Rights Shares are recommended to consult their own professional advisers.

29 May 2015

		Pages
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Summary of	the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
Letter from	Gram Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	40
Appendix I	— Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II	— Unaudited Pro Forma Financial Information of the Group . . . . .	II-1
Appendix III — Property Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		III-1
Appendix IV — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		IV-1
Notice of SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		SGM-1

– i –

DEFINITIONS

‘‘Aircraft’’ A Bombardier Global 6000 aircraft with engine model Rolls-Royce BR710A2–20 which is the principal asset of the company purchased pursuant to the sale and purchase agreement dated 9 February 2014 (details of which were set out in the circular of the Company dated 12 March 2014);

‘‘Anhui Landing’’ Anhui Landing Holding Group Co., Ltd[#] (安徽藍鼎控股集團有限公司), a company of which Mr. Yang is the controlling shareholder, which is principally engaged in real estate development business in the PRC;

‘‘Announcement’’ the announcement made by the Company dated 22 April 2015;
‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules;
‘‘Board’’ the board of Directors;
‘‘business day’’ a day on which the Stock Exchange is open for the transaction of business;
‘‘BVI’’ British Virgin Islands;
‘‘CCASS’’
the Central Clearing and Settlement System established and operated by HKSCC;
‘‘Company’’ Landing International Development Limited, a company incorporated in the Cayman Islands and continues in Bermuda with limited liability, the Shares of which are listed on the main board of the Stock Exchange;
‘‘Concert Party Group’’
LIL, Mr. Yang Zhihui, Ms. Xu Ning and parties acting in concert with any of them;
‘‘connected person’’
has the meaning ascribed thereto under the Listing Rules;
‘‘Connected Transaction’’
the payment of the underwriting commission by the Company to LIL under the Underwriting Agreement;
‘‘Consolidated Share(s)’’
ordinary share(s) of HK$0.10 each in the issued and unissued share capital of the Company upon the Share Consolidation becoming effective;
‘‘controlling shareholder’’

has the meaning ascribed thereto under the Listing Rules;

‘‘Director(s)’’
director(s) of the Company;

– 1 –

DEFINITIONS

‘‘EAF(s)’’ the form of application for use by the Qualifying Shareholders who wish to apply for excess Rights Shares, being in such usual form as may be agreed between the Company and the Underwriters;
‘‘Executive’’
the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director;
‘‘Existing Share(s)’’
ordinary share(s) of HK$0.01 each in the existing share capital of the Company, before the Share Consolidation becoming effective;
‘‘Genting Singapore’’ Genting Singapore PLC, a public limited company established under the laws of the Isle of Man and the shares of which are listed on the main board of the Singapore Exchange Securities Trading Limited;
‘‘Genting Singapore Group’’
Genting Singapore and its subsidiaries;
‘‘Gram Capital’’ or ‘‘IFA’’
Gram Capital Limited, a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver, and the Connected Transaction;
‘‘Group’’ the Company and its subsidiaries;
‘‘HBL’’
Happy Bay Pte. Ltd., a corporation duly organized and validly existing under the laws of Singapore and an indirect wholly-owned subsidiary of Genting Singapore;
‘‘HK$’’
Hong Kong dollar, the lawful currency of Hong Kong;
‘‘HKSCC’’
Hong Kong Securities Clearing Company Limited;
‘‘Hong Kong’’
the Hong Kong Special Administrative Region of the People’s Republic of China;
‘‘Independent Board Committee’’
an independent board committee of the Company comprising the independent non-executive Directors which has been established to advise the Independent Shareholders on the terms of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver, and the Connected Transaction;

– 2 –

DEFINITIONS

‘‘Independent Shareholders’’
Shareholders other than LIL, Mr. Yang Zhihui, Ms. Xu Ning and parties acting in concert with any of them and any Shareholders who are involved or interested in the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and/or the Connected Transaction and the transactions contemplated thereunder;
‘‘Independent Third Party(ies)’’
independent third party(ies) who is not connected with the Company and its connected persons;
‘‘Irrevocable Undertaking’’
an irrevocable undertaking dated 16 April 2015 given by LIL in favour of the Company;
‘‘JDC’’ Jeju Free International City Development Center, a government-sponsored development organization established exclusively for the national scale support for Jeju, Korea;
‘‘Jeju Project’’
the Myth-History Park project on the Land comprising certain real estate development and an integrated resort;
‘‘Kingston Securities’’
Kingston Securities Limited, a licensed corporation to carry on business in type 1 regulated activity (dealing in securities) under the SFO;
‘‘Korea’’ the Republic of Korea;
‘‘KRW’’ Korean Won, the lawful currency of Korea;
‘‘Land’’
the parcels of land of approximately 2,319,613 square meters located at Seogwangril in Andeog-myeon, Seoguipo City, Jeju, Korea;
‘‘Landing Jeju’’
Landing Jeju Development Co., Ltd., a former direct wholly owned subsidiary of the Company incorporated in Korea, which is now a direct non-wholly owned subsidiary of the Company;
‘‘Last Trading Day’’ 15 April 2015, being the date of the Underwriting Agreement and the last trading day for the Existing Shares on the Stock Exchange prior to the release of the Announcement;
‘‘Latest Practicable Date’’ 26 May 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information for the purpose of inclusion in this circular;

– 3 –

DEFINITIONS

‘‘Latest Time for Termination’’
the latest time that the Underwriters can terminate the Underwriting Agreement, being the second business day after the latest time for acceptance of, and payment for, the Rights Shares as described in the Prospectus Documents or such later time or date as may be agreed between the Underwriters and the Company in writing;
‘‘LIL’’
Landing International Limited, a company incorporated in the BVI and wholly owned by Mr. Yang Zhihui, an executive Director and controlling shareholder of the Company;
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange;
‘‘Magical Gains’’
Magical Gains Holdings Limited, a former direct whollyowned subsidiary of the Company incorporated in the BVI, which is now a joint venture of the Company with 50% interest being held by the Company;
‘‘Mr. Yang’’ or ‘‘Yang Zhihui’’
Mr. Yang Zhihui, the chairman and an executive Director and controlling shareholder of the Company;
‘‘Ms. Xu’’ or ‘‘Xu Ning’’

an executive Director and the spouse of Mr. Yang;

‘‘Non-Qualifying Shareholders’’
those Overseas Shareholders whom the Directors, based on legal opinions provided by the Company’s legal advisers, consider it necessary or expedient not to offer the Rights Shares to such Shareholders on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place;
‘‘Overseas Shareholder(s)’’
Shareholder(s) whose name(s) appears on the register of members of the Company at the close of business on the Record Date and whose address(es) as shown on such register is (are) outside Hong Kong;
‘‘PAL(s)’’
the renounceable provisional allotment letter(s) proposed to be issued to the Qualifying Shareholders in connection with the Rights Issue;
‘‘Pearl Concept’’
Pearl Concept Enterprises Limited, a company incorporated in the BVI, which is an indirect wholly-owned subsidiary of Genting Hong Kong Limited;

– 4 –

DEFINITIONS

‘‘Posting Date’’ Monday, 29 June 2015 or such other date as the Underwriters may agree in writing with the Company, as the date of despatch of the Prospectus Documents to the Qualifying Shareholders or the Prospectus for information only to the Non-Qualifying Shareholders (as the case may be);

‘‘PRC’’

People’s Republic of China;

‘‘Prospectus’’ the prospectus to be despatched to Shareholders containing details of the Rights Issue;
‘‘Prospectus Documents’’ the Prospectus, PAL and EAF;
‘‘Qualifying Shareholders’’ Shareholders, other than the Non-Qualifying Shareholders;
‘‘Record Date’’
Thursday, 25 June 2015 (or such other date as the Underwriters may agree in writing with the Company), as the date by reference to which entitlements to the Rights Issue are expected to be determined;
‘‘Registrar’’
the branch share registrar of the Company in Hong Kong, being Tricor Standard Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong;
‘‘Relevant Period’’ the period commencing 6 months before the date of the Announcement and ending on the Latest Practicable Date;
‘‘Rights Issue’’
the proposed issue by way of rights on the basis of ten Rights Shares for every one Consolidated Share in issue and held on the Record Date at the Subscription Price on the terms and subject to the conditions set out in the Underwriting Agreement and the Prospectus Documents;
‘‘Rights Share(s)’’
18,696,253,870 new Consolidated Shares to be issued and allotted under the Rights Issue;
‘‘SFC’’
the Securities and Futures Commission of Hong Kong;
‘‘SFO’’
Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong);
‘‘SGM’’
a special general meeting of the Company to be convened to approve, among other things, the Share Consolidation, the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction;

– 5 –

DEFINITIONS

‘‘Share(s)’’
the Existing Share(s) or Consolidated Share(s) (as the case may be);
‘‘Share Consolidation’’ the proposed consolidation of every ten (10) issued and unissued Existing Shares into one Consolidated Share;
‘‘Shareholder(s)’’ holder(s) of Shares;
‘‘Specified Event’’ an event occurring or matter arising on or after the date of the Underwriting Agreement and prior to the Latest Time for Termination which if it had occurred or arisen before the date of the Underwriting Agreement would have rendered any of the warranties contained in the Underwriting Agreement untrue or incorrect in any material respect;
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited;
‘‘Subscription Price’’ HK$0.35 per Rights Share;
‘‘Takeovers Code’’ the Hong Kong Code on Takeovers and Mergers;
‘‘Underwriters’’ LIL and Kingston Securities;
‘‘Underwriting Agreement’’
the underwriting agreement dated 15 April 2015 entered into between the Company and the Underwriters in relation to the underwriting arrangement in respect of the Rights Issue, as varied and supplemented by an amended and restated underwriting agreement dated 16 April 2015 made by the same parties;
‘‘Underwritten Shares’’
8,762,700,169 Rights Shares underwritten by LIL pursuant to the terms of the Underwriting Agreement;
‘‘US$’’
United States dollar, the lawful currency of the United States;
‘‘Whitewash Waiver’’
a waiver of the obligation of LIL to make a mandatory general offer as a result of the underwriting of the Rights Issue for all the Shares not already owned, controlled or agreed to be acquired by it or any member of the Concert Party Group pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code by the Executive;
‘‘Yueyang Company’’ Yueyang Nanhu Meishu Properties Limited[#] (岳陽南湖美墅置業有限公司), an indirect wholly-owned subsidiary of the Company;

– 6 –

DEFINITIONS

‘‘Yueyang Residential the residential development on the land held by the Properties’’ Yueyang Company and situated at the western shore of Nanhu Lake[#] (南湖), Yueyang, Hunan Province, the PRC; and
‘‘%’’ or ‘‘per cent’’ per cent.
The English translation of Chinese names or words in this circular, where indicated, are included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words.

– 7 –

SUMMARY OF THE RIGHTS ISSUE

The following information is derived from, and should be read in conjunction with, the full text of this circular:

Basis of the Rights Issue : ten Rights Share for every one Consolidated Share held on the Record Date Number of Existing Shares in : 18,696,253,872 Existing Shares (or 1,869,625,387 issue as at the Latest Consolidated Shares upon the Share Consolidation Practicable Date becoming effective) Number of Rights Shares : 18,696,253,870 Rights Shares (assuming no change in the number of issued Shares on or before the Record Date) Subscription Price : HK$0.35 per Rights Share with nominal value of HK$0.10 each

As at the Latest Practicable Date, the Company has no outstanding share options, convertible securities, options or warrants in issue which confer any right to subscribe for, convert or exchange into Shares.

– 8 –

EXPECTED TIMETABLE

2015

Latest time for lodging forms of proxy for the purpose of the SGM . . . . . . . . . . . . 10:00 a.m. on Saturday, 13 June SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Monday, 15 June Announcement of poll results of SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 15 June Effective date of the Share Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 16 June Dealing in the Consolidated Shares commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 16 June Original counter for trading in Existing Shares in board lots of 5,000 Existing Shares (in the form of existing share certificates) temporarily closes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 16 June Temporary counter for trading in Consolidated Shares in board lots of 500 Consolidated Shares (in the form of existing share certificates) opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 16 June First day for free exchange of existing share certificates for new share certificates for the Consolidated Shares commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 16 June Last day of dealings in Consolidated Shares on a cum-rights basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 17 June First day of dealings in Consolidated Shares on an ex-rights basis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 18 June Latest time for the Shareholders to lodging transfer of Consolidated Shares in order to qualify for the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Friday, 19 June Closure of register of members of the Company (both dates inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 22 June to Thursday, 25 June Record Date and time for determining entitlements to the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 25 June Register of members of the Company re-opens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 26 June

– 9 –

EXPECTED TIMETABLE

2015

Despatch of Prospectus Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 29 June Original counter for trading in Consolidated Shares in board lots of 5,000 Consolidated Shares (in the form of new share certificates) re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 30 June Parallel trading in Consolidated Shares (in the form of new and existing share certificates) commences . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 30 June Designated broker starts to stand in the market to provide matching services for the sale and purchase of odd lots of Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 30 June First day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 2 July Latest time for splitting nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Monday, 6 July Last day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Thursday, 9 July Latest time for acceptance of, and payment for, the Rights Shares and the applications for excess Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday, 14 July Latest time to terminate the Underwriting Agreement and for the Rights Issue to become unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Thursday, 16 July Announcement of results of the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 17 July Refund cheques to be despatched in relation to wholly or partially unsuccessful applications for excess Rights Shares on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 20 July Certificates for fully paid Rights Shares to be despatched on or before . . . . . . . Monday, 20 July Commencement of dealings in fully-paid Rights Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 21 July

– 10 –

EXPECTED TIMETABLE

2015

Temporary counter for trading in Consolidated Shares in board lots of 500 Consolidated Shares (in the form of existing share certificates) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday, 21 July Parallel trading in Consolidated Shares (in the form of new and existing share certificates) ends. . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday, 21 July Designated broker ceases to stand in the market to provide matching services for the sale and purchase of odd lots of Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday, 21 July Latest time for free exchange of existing share certificates for the new share certificates for the Consolidated Shares. . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Thursday, 23 July

Note:

All times in this circular refer to Hong Kong time.

The Company will make further announcement if there is any change to the above timetable. Dates or deadlines specified in this circular for events in the above timetable for (or otherwise in relation to) the Rights Issue are indicative only and may be extended or varied by the Company. Any changes to the anticipated timetable for the Rights Issue, if required, will be published or notified to the Shareholders and the Stock Exchange as and when appropriate.

– 11 –

LETTER FROM THE BOARD

Landing International Development Limited 藍鼎國際發展有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock code: 582)

Board of Directors:

Executive Directors:

Mr. Yang Zhihui (Chairman) Mr. Ng Kwok Fai (Deputy Chairman) Ms. Zhou Xueyun Ms. Xu Ning

Independent non-executive Directors: Mr. Fok Ho Yin, Thomas Mr. Chen Lei Ms. Zhang Xiaolan

Registered office:

Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place of business in Hong Kong:

Suites 5801-5804, 58/F. Two International Finance Centre No. 8 Finance Street, Central Hong Kong

29 May 2015

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TEN ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (3) PROPOSED RIGHTS ISSUE ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE;

(4) APPLICATION FOR WHITEWASH WAIVER; AND (5) CONNECTED TRANSACTION IN RELATION TO PAYMENT OF UNDERWRITING COMMISSION

INTRODUCTION

It was announced on 22 April 2015 that, among others, the Company proposed to (i) consolidate every ten issued and unissued Existing Shares into one Consolidated Share; (ii) increase the authorised share capital of the Company from HK$500,000,000 to HK$10,000,000,000 by the creation of 95,000,000,000 new Consolidated Shares, which will rank pari passu when issued with all Consolidated Shares in issue upon the Share

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Consolidation becoming effective; (iii) subject to the Share Consolidation becoming effective, to implement the Rights Issue on the basis of ten Rights Shares for every one Consolidated Share held on the Record Date at the Subscription Price of HK$0.35 per Rights Share. The Company will raise proceeds of approximately HK$6,544 million before expenses (assuming that there is no change in the number of issued Shares on or before the Record Date) by way of the issue of 18,696,253,870 Rights Shares; and (iv) apply for a Whitewash Waiver so that LIL can subscribe for the Underwritten Shares in full pursuant to its obligations under the Underwriting Agreement.

The purpose of this circular is to provide you with, amongst others, (i) further information on the Share Consolidation, the increase in authorised share capital, the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction, (ii) a letter of recommendation of the Independent Board Committee to the Independent Shareholders, (iii) a letter of advice from Gram Capital in respect of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction, (iv) additional information as required under the Takeovers Code and the Listing Rules; and (v) a notice of the SGM.

The Independent Board Committee comprising all the independent non-executive Directors, namely, Mr. Fok Ho Yin, Thomas, Mr. Chen Lei and Ms. Zhang Xiaolan, has been established in connection with the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction.

Gram Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction and the appointment of which has been approved by the Independent Board Committee.

A notice of the SGM is set out on pages SGM–1 to SGM–3 of this circular. The letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 38 to 39 of this circular. The letter from Gram Capital containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 40 to 54 of this circular.

PROPOSED SHARE CONSOLIDATION

The Board proposes to consolidate every ten issued and unissued Existing Shares into one Consolidated Share.

As at the Latest Practicable Date, the authorised share capital of the Company was HK$500,000,000 comprising 18,696,253,872 issued Existing Shares and 31,303,746,128 unissued Existing Shares. Upon the Share Consolidation becoming effective and assuming that there is no change in the number of issued Shares prior to the SGM, the authorised share capital of the Company will remain HK$500,000,000 comprising 1,869,625,387 issued Consolidated Shares and 3,130,374,613 unissued Consolidated Shares. The Consolidated Shares will rank pari passu in all respects with each other and there will be no change in the relative rights of the Shareholders. The Share Consolidation is subject to (i) the approval by the Shareholders at the SGM and (ii) the Listing Committee of the Stock Exchange granting

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the listing of, and permission to deal in, the Consolidated Shares. As none of the Shareholders has any material interest in the Share Consolidation, no Shareholder is required to abstain from voting for such resolution at the SGM.

The Company has applied to the Stock Exchange for the listing of, and permission to deal in, the Consolidated Shares.

Reasons for Share Consolidation

The Directors believe that the Share Consolidation could increase the trading price of the Consolidated Shares and reduce the number of board lots in the market and, as a result, the transaction costs incurred by the Shareholders based on the number of the board lots of the Consolidated Shares would be lower. Accordingly, the Share Consolidation is in the interests of the Company and the Shareholders as a whole.

The Share Consolidation will not, of itself, alter the underlying assets, business operations, management or financial position of the Company and its subsidiaries except for the payment of related expenses.

Trading arrangement

In order to alleviate the difficulties in the trading of odd lots of the Consolidated Shares arising from the Share Consolidation, the Company has appointed One China Securities Limited as the agent to provide matching service to those Shareholders who wish to top-up or sell their shareholdings of odd lots of the Consolidated Shares on a best effort basis during the period from 9:00 a.m. on 30 June 2015 to 4:00 p.m. on 21 July 2015.

Holders of the Consolidated Shares in odd lots who wish to take advantage of this facility either to dispose of their odd lots of the Consolidated Shares or to top-up their odd lots to a full new board lot may directly or through their broker contact Mr. Marco Ko of One China Securities Limited at 2/F Cheong K. Building, 86 Des Voeux Road Central, Central, Hong Kong (Telephone number: (852) 3188 9878) during the aforesaid period. Holders of the Consolidated Shares in odd lots should note that the matching of the sale and purchase of odd lots of the Consolidated Shares is on a best effort basis and successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed. Shareholders are recommended to consult their professional advisers if they are in doubt about the above facility.

Shareholders should note that successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed.

Exchange of share certificates

The expected timetable for the Share Consolidation is set out on pages 9 to 11 of this circular.

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Upon the Share Consolidation becoming effective, Shareholders may submit existing share certificates in exchange for the new share certificates for the Consolidated Shares free of charge to the office of the Registrar, Tricor Standard Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, during the business hours of Tricor Standard Limited from Tuesday, 16 June 2015 to 4:00 p.m. on Thursday, 23 July 2015. Thereafter, certificates for the Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 or such higher amount as from time to time be determined for each new share certificate issued or each existing share certificate submitted, whichever number of share certificate involved is higher.

PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL

To facilitate the Rights Issue, the Board proposes to increase the authorised share capital of the Company from HK$500,000,000 to HK$10,000,000,000 by the creation of 95,000,000,000 new Consolidated Shares, which will rank pari passu when issued with all Consolidated Shares in issue upon the Share Consolidation becoming effective.

The proposed increase in authorised share capital of the Company will be subject to the approval of the Shareholders at the SGM. As none of the Shareholders has any material interest in the increase in authorised share capital, no Shareholder is required to abstain from voting for such resolution at the SGM.

PROPOSED RIGHTS ISSUE

Subject to the Share Consolidation and the increase in the authorised share capital of the Company becoming effective, the Board proposes the Rights Issue, details of which are summarised below:

Issue statistics

Basis of the Rights Issue : ten Rights Shares for every one Consolidated Share held on the Record Date

Number of Existing Shares in : 18,696,253,872 Existing Shares (or 1,869,625,387 issue as at the Latest Consolidated Shares upon the Share Consolidation Practicable Date becoming effective) Number of Rights Shares : 18,696,253,870 Rights Shares (assuming no change in the number of issued Shares on or before the Record Date) Subscription Price : HK$0.35 per Rights Share

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Qualifying Shareholders

The Company will send the Prospectus Documents to Qualifying Shareholders only. To qualify for the Rights Issue, a Shareholder must:

be registered as a member of the Company at the close of business on the Record Date; and
be a Qualifying Shareholder.

In order to be registered as members of the Company at the close of business on the Record Date, owners of Shares must lodge any transfers of Shares (together with the relevant share certificates) with the Registrar, Tricor Standard Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Friday, 19 June 2015.

Closure of register of members

The register of members of the Company will be closed from Monday, 22 June 2015 to Thursday, 25 June 2015, both days inclusive for determining the entitlements to the Rights Issue. No transfer of Consolidated Shares will be registered during this period.

Rights of Overseas Shareholders

The Prospectus Documents are not intended to be registered under the applicable securities legislation of any jurisdiction other than Hong Kong.

According to the register of members of the Company as at the Latest Practicable Date, there were four Shareholders with registered addresses in four jurisdictions outside Hong Kong shown on such register, namely, the BVI, Isle of Man, Korea and Singapore.

Based on the advice provided by the legal advisers on the laws of the BVI, the offering of the Rights Shares by the Company to its Shareholder with registered address in the BVI pursuant to the Rights Issue is not subject to any registration or other legal requirements or any governmental or regulatory or procedures under the laws of the BVI. It would be lawful for the Company to offer the Rights Shares to its Shareholder with registered address in the BVI, if the Rights Issue is made and/or the Prospectus Documents is sent to the BVI Shareholders solely by reason that they are existing Shareholders or beneficial owners of Shares of the Company.

Based on the advice provided by the legal advisers on the laws of Isle of Man, there is no regulatory prohibition on the Rights Issue being extended to the Shareholder with a registered address in the Isle of Man, since the Company will be party to the Rights Issue and therefore the Rights Issue benefits from the exclusion for being treated as a regulated activity.

Based on the advice provided by the legal advisers on the laws of Singapore, the Company has to comply with the prospectus requirements under the Securities and Futures Act (Chapter 289) of Singapore (the ‘‘SFA’’) if the Rights Issue is extended to Singapore

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Shareholders. The SFA requires that the Prospectus in the required form be circulated to the Singapore Shareholder and registered with the Monetary Authority of Singapore (the ‘‘Authority’’). Accordingly, no offer of securities can be made unless the offer is made in or accompanied by a prospectus or a profile statement which must comply with the information and other requirements of SFA and must be lodged and registered with the Authority in accordance with the conditions of, the relevant provisions under the SFA in respect of offers for securities in Singapore, including, but not limited to, any exemption(s) under any provision of Subdivision (4) of Division 1 of Part XIII of the SFA.

Based on the advice provided by the legal advisers on the laws of Korea, there is no legal restrictions of the laws of Korea in the proposed Rights Issue to the Korean Shareholders, except that registration of a Prospectus containing the terms of the Rights Issue with the Financial Services Commission in Korea must be made prior to the Rights Issue, which can be exempted, provided that any one of the following requirements is satisfied:

(i) a condition that the Rights Shares shall not be transferred to any other residents in Korea within one year from the issuance date is stated on the face of the Rights Shares (applicable only when physical instrument is issued), a subscription agreement, underwriting agreement or a written invitation to subscription; the Company or underwriter receives written confirmation of the condition from the Korean Shareholder; or
(ii) the Korean Shareholder deposits the Rights Shares immediately after the issuance in an officially recognized depository in Hong Kong; a depository contract is made with a condition that the Rights Shares shall not be withdrawn or transferred to any other residents in Korea within one year from the date of deposit.

In view of the foregoing legal advice obtained from overseas legal advisers and having regard the likely costs and time involved if overseas compliance were to be observed, the Directors have decided to extend the Rights Issue to such Overseas Shareholders with registered addresses located in the BVI and the Isle of Man as shown on the register of members of the Company as at the Record Date.

The Rights Issue will not be extended to the Shareholder with registered address in Singapore and Korea as the Company is not required to make an offer of the Rights Shares if such offer requires registration of the Prospectus Documents under the relevant laws and regulations pursuant to the terms under the Underwriting Agreement or it would be necessary or expedient for the Company to do so.

Arrangements will be made for Rights Shares which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders to be sold in the market in their nilpaid form as soon as practicable after dealings in the nil-paid Rights Shares commence, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses, of more than HK$100 will be paid pro rata to the Non-Qualifying Shareholders. The Company will retain individual amounts of HK$100 or less for the benefit of the Company. Any unsold entitlement of Non-Qualifying Shareholders, together with any Rights Shares provisionally allotted but not accepted, will be made available for excess application on EAFs by Qualifying Shareholders.

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The Company will continue to ascertain whether there are any other Overseas Shareholders on the Record Date and will, if necessary, make further enquiries with legal adviser(s) in other overseas jurisdiction(s) regarding the feasibility of extending the Rights Issue to such other Overseas Shareholders on the Record Date and make relevant disclosures in the Prospectus. Further information in this connection will be set out in the Prospectus Documents containing, among other things, details of the Rights Issue, to be despatched to the Qualifying Shareholders on the Posting Date. The Company will send copies of the Prospectus to the Non-Qualifying Shareholders for their information only, but will not send any PAL and EAF to them on the Posting Date.

Subscription Price

The Subscription Price for the Rights Shares is HK$0.35 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares and, where applicable, application for excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(a) a discount of approximately 75.86% to the adjusted closing price of HK$1.45 per Consolidated Share, based on the closing price of HK$0.145 per Existing Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation;
(b) a discount of approximately 73.84% to the adjusted average closing price of approximately HK$1.338 per Consolidated Share, based on the average closing price of HK$0.1338 per Existing Share for the five consecutive trading days ended on the Last Trading Day and adjusted for the effect of the Share Consolidation;
(c) a discount of approximately 22.22% to the adjusted theoretical ex-rights price of approximately HK$0.45 per Consolidated Share, based on the closing price of HK$0.145 per Existing Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation;
(d) a discount of approximately 77.85% to the adjusted closing price of HK$1.58 per Consolidated Share, based on the closing price of HK$0.158 per Existing Share as quoted on the Stock Exchange on the Latest Practicable Date and adjusted for the effect of the Share Consolidation; and
(e) a discount of approximately 85.49% to the net asset value of the Company per Consolidated Share of approximately HK$2.413 as at 31 December 2014 and adjusted for the effect of the Share Consolidation.

The Subscription Price was determined after arm’s length negotiations between the Company and the Underwriters having regard to (a) the market price of the Existing Shares prior to the Last Trading Day, which was in general in a decreasing trend; (b) the loss making position of the Group in the past two financial years; and (c) the prevailing market conditions of the capital market in Hong Kong. The Directors consider that (a) it is not uncommon for listed issuers in Hong Kong to set the subscription price at a discount to the closing prices in

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order to increase attractiveness of the rights issue; (b) the scale of the Rights Issue is large and it is necessary to offer a relatively deep discount under the Rights Issue in order to encourage the existing Shareholders to participate in the Rights Issue by taking up their respective entitlements and to maintain their shareholdings in the Company and participate in the potential growth of the Group; (c) each Qualifying Shareholder is entitled to subscribe for the Rights Shares at the Subscription Price in proportion to his/her/its shareholding in the Company held on the Record Date and hence the interest of the Qualifying Shareholders will not be prejudiced by the discount of the Subscription Price as they are offered with an equal opportunity to participate in the Rights Issue. Rather, the deep discount and high ratio of Rights Shares will allow each Qualifying Shareholder to have greater flexibility in determining the extent of his/her/its participation in the Rights Issue that is best suited his/her/its own financial condition and/or investment strategy.

In view of the above and after taking into consideration the reasons for the Rights Issue as stated in the section headed ‘‘Reasons for the Rights Issue and Use of Proceeds’’ in this letter, the Directors (including the independent non-executive Directors whose opinion on the matter is set forth in the letter from the Independent Board Committee set out on pages 38 to 39 of this circular) consider the Subscription Price and the discount to the relative values as indicated above, to be fair and reasonable and in the interests of the Company and the Shareholders as a whole. The net price per Rights Share upon full acceptance of the relevant provisional allotment of Rights Shares will be approximately HK$0.34.

Basis of provisional allotment

The basis of the provisional allotment shall be ten Rights Shares for every one Consolidated Share in issue and held on the Record Date, being 18,696,253,870 Rights Shares (assuming there is no change to the number of issued Shares on or before the Record Date), at a price of HK$0.35 per Rights Share. Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing the PAL and lodging the same with a remittance for the Rights Shares being applied for.

Fractional Consolidated Shares

Fractional Consolidated Shares will be disregarded and will not be issued to the Shareholders but all such fractional Consolidated Shares will be aggregated, sold and retained for the benefit of the Company, if possible and applicable. Fractional Consolidated Shares will only arise in respect of the entire shareholding of a Shareholder regardless of the number of share certificates held by such Shareholder.

Status of the Rights Shares

The Rights Shares, when allotted and fully paid, will rank pari passu in all respects with the Consolidated Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the Rights Shares in their fully-paid form.

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Application for excess Rights Shares

Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements of the Non-Qualifying Shareholders and for any Rights Shares provisionally allotted but not accepted. Applications for excess Rights Shares may be made by completing the EAFs for application for excess Rights Shares and lodging the same with a separate remittance for the excess Rights Shares being applied for. The Directors will allocate the excess Rights Shares at their discretion on a pro rata basis in proportion to the number of excess Rights Shares being applied for under each application. No reference will be made to the Rights Shares comprised in applications by PAL or the number of Consolidated Shares held by the Qualifying Shareholders. No preference will be given to topping up odd lots to whole board lots.

Investors with their Shares held by a nominee company (or which are held in CCASS) should note that the Board will regard the nominee company (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Accordingly, the Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to beneficial owners individually. Investors with their Shares held by a nominee company are advised to consider whether they would like to arrange for the registration of the relevant Shares in the name of the beneficial owner(s) prior to the Record Date.

Investors whose Shares are held by their nominee(s) and who would like to have their names registered on the register of members of the Company, must lodge all necessary documents with the Registrar for completion of the relevant registration by 4:30 p.m. on Friday, 19 June 2015.

Share certificates and refund cheques for Rights Issue

Subject to the fulfillment of the conditions of the Rights Issue, certificates for all fullypaid Rights Shares are expected to be posted to those entitled thereto by ordinary post at their own risk on or before Monday, 20 July 2015. Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares (if any) are expected to be posted on or before Monday, 20 July 2015 by ordinary post to the applicants at their own risk.

Application for listing

The Company has applied to the Stock Exchange for the listing of and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms to be issued and allotted pursuant to the Rights Issue.

No part of the equity or debt securities of the Company is listed or dealt in on which listing or permission to deal in is being or is proposed to be sought in other stock exchanges other than the Stock Exchange.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange, the Rights Shares in both their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit,

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clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Both nil-paid Rights Shares and fully-paid Rights Shares will be traded in board lots of 5,000 Shares.

Dealings in the Rights Shares in both their nil-paid and fully-paid forms, which are registered in the register of members of the Company in Hong Kong will be subject to the payment of stamp duty and other applicable fees and charges in Hong Kong.

Conditions

The Rights Issue is conditional upon:

(i) the passing of the necessary resolution by the Shareholders (or, where applicable, the Independent Shareholders) at the SGM approving and confirming: (a) the Share Consolidation and the increase in authorised share capital of the Company, (b) the Rights Issue and the transactions contemplated thereunder (including the Underwriting Agreement) and authorizing the Directors to allot and issue the Rights Shares (in their nil-paid and fully-paid forms), and (c) the Whitewash Waiver, each in accordance with the bye-laws of the Company, the Listing Rules and the Takeovers Code;
(ii) the delivery to the Stock Exchange for authorisation and the registration with the Registrar of Companies in Hong Kong respectively one copy of each of the Prospectus Documents duly signed by two Directors (or by their agents duly authorised in writing) in accordance with section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance as having been approved by resolutions of the Directors (and all other documents required to be attached thereto) and otherwise in compliance with the Listing Rules, the Companies Ordinance and the Companies (Winding Up and Miscellaneous Provisions) Ordinance not later than the Prospectus Posting Date;
(iii) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus to the Non-Qualifying Shareholders, if any, for information purposes only, on or before the Prospectus Posting Date;
(iv) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked the listing of, and the permission to deal in, the Rights Shares (in their nil-paid and fully-paid forms) by no later than the first day of their dealings;
(v) the Underwriting Agreement not being terminated by any of the Underwriters pursuant to the terms hereof prior to the Latest Time for Termination;

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(vi) the Executive having granted to LIL, Mr. Yang Zhihui and parties acting in concert with them the Whitewash Waiver and the satisfaction of all conditions (if any) attached thereto and such other necessary waiver or consent as may be required to be obtained from the Executive for the transactions contemplated under the Rights Issue;
(vii) the Share Consolidation and the increase in authorised share capital of the Company having become effective;
(viii) the compliance with and performance by the Company of all the undertakings and obligations under the terms of the Underwriting Agreement;
(ix) the compliance with and performance of all the undertakings and obligations of LIL, or any of its respective associates, under the Irrevocable Undertaking to take up its entitled Rights Shares under the Rights Issue;
(x) if necessary, the obtaining of the consent or permission from the Bermuda Monetary Authority in respect of the issue of the Rights Shares; and
(xi) there being no Specified Event occurring prior to the Latest Time for Termination.

The conditions above are incapable of being waived. If the conditions are not satisfied in whole by the Latest Time for Termination or such other time and/or date as the Company and the Underwriters may agree in writing, the Underwriting Agreement will terminate and cease to be of further effect and no party may claim against the other party for costs, damages, compensation or otherwise, save for any antecedent breaches.

Approval of the Rights Issue

As the proposed Rights Issue will increase the issued share capital or the market capitalisation of the Company by more than 50%, the Rights Issue is subject to the approval of the Independent Shareholders at the SGM by way of poll.

The Underwriting Agreement

Date

15 April 2015, as varied and supplemented by an amended and restated underwriting agreement dated 16 April 2015.

Underwriters

Kingston Securities, which underwrites securities in its ordinary course of business. As at the Latest Practicable Date, Kingston Securities and its associates do not hold any Existing Shares.

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LIL is an investment holding company wholly owned by Mr. Yang Zhihui, an executive Director and the controlling Shareholder. As at the Latest Practicable Date, LIL is interested in 6,056,099,340 Existing Shares, representing approximately 32.39% of the issued share capital of the Company. LIL does not underwrite securities in its ordinary course of business.

The underwritten shares

All underwritten shares (excluding the 6,056,099,340 Rights Shares to be provisionally allotted to LIL pursuant to the Irrevocable Undertaking), being 12,640,154,530 Rights Shares, subject to the terms and conditions of the Underwriting Agreement. Pursuant to the Underwriting Agreement, LIL has (in addition to its obligations under the Irrevocable Undertaking) conditionally agreed to underwrite 8,762,700,169 Rights Shares, whereas Kingston Securities has conditionally agreed to underwrite 3,877,454,361 Rights Shares.

In accordance with the terms of the Underwriting Agreement, Kingston Securities will, at or before the Latest Time for Termination, notify the Company and LIL in writing for such number of untaken Rights Shares that LIL would need to subscribe for pursuant to its underwriting commitment under the Underwriting Agreement. Kingston Securities will subscribe for the remaining untaken Rights Shares not covered by LIL.

Commission

2.5% of the aggregate Subscription Price in respect of the maximum number of underwritten shares underwritten by Kingston Securities is payable to Kingston Securities, while 2.0% of the aggregate Subscription Price in respect of the Underwritten Shares underwritten by LIL in the amount approximately HK$61,339,000 is payable to LIL (the ‘‘Underwriting Commission’’).

The Board (including the independent non-executive Directors whose opinion on this matter is set forth in the letter from the Independent Board Committee set out on pages 38 to 39 of this circular) considers that the terms of the Underwriting Agreement, including the underwriting commission rate, are in line with market practice and are fair and reasonable so far as the Company and the Shareholders are concerned.

Termination of the Underwriting Agreement

If, prior to the Latest Time for Termination:

(i) in the absolute opinion of any Underwriter, the success of the Rights Issue would be materially and adversely affected by:
(a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the absolute opinion of any Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Rights Issue; or

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(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date hereof) of a political, military, financial, economic or other nature (whether or not ejusdem generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the absolute opinion of any Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or materially and adversely prejudice the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; or
(ii) any adverse change in market conditions (including without limitation, any change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or material restriction or trading in securities) occurs which in the absolute opinion of any Underwriter is likely to materially or adversely affect the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; or
(iii) any change in the circumstances of the Company or any member of the Group occurs which in the absolute opinion of any Underwriter will adversely affect the prospects of the Company, including without limiting the generality of the foregoing, the presentation of a petition or the passing of a resolution for the liquidation or winding up or similar event occurring in respect of any of member of the Group or the destruction of any material asset of the Group; or
(iv) any event of force majeure occurs, including without limiting the generality thereof, any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out; or
(v) any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole occurs, whether or not ejusdem generis with any of the foregoing; or
(vi) any matter occurs which, had it arisen or been discovered immediately before the date of the Prospectus and not having been disclosed in the Prospectus, would have constituted, in the absolute opinion of any Underwriter, a material omission in the context of the Rights Issue; or
(vii) any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole occurs, whether or not ejusdem generis with any of the foregoing; or
(viii) any matter occurs which, had it arisen or been discovered immediately before the date of the Prospectus and not having been disclosed in the Prospectus, would have constituted, in the absolute opinion of any Underwriter, a material omission in the context of the Rights Issue; or

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(ix) any suspension in the trading of securities generally or the Company’s securities on the Stock Exchange for a period of more than 10 consecutive business days occurs, excluding any halt or suspension in connection with the clearance of the Announcement or the Prospectus Documents or other announcements or circulars in connection with the Rights Issue; or
(x) any moratorium, suspension or material restriction on trading of the Shares on the Stock Exchange occurs due to exceptional financial circumstances or otherwise, any Underwriter shall be entitled by notice in writing to the Company and the other Underwriter, served prior to the Latest Time for Termination, to terminate this Agreement. Each Underwriter will also be entitled by notice in writing to rescind the Underwriting Agreement if, prior to the Latest Time for Termination:
(a) any material breach of any of the representations, warranties or undertakings contained in the Underwriting Agreement comes to the knowledge of such Underwriter; or
(b) any Specified Event comes to the knowledge of such Underwriter.

Irrevocable Undertaking and the Underwriting Agreement

As at the Latest Practicable Date, LIL holds 6,056,099,340 Existing Shares (or 605,609,934 Consolidated Shares upon the Share Consolidation becoming effective), representing approximately 32.39% of the existing issued share capital of the Company. Pursuant to the Irrevocable Undertaking, LIL has unconditionally and irrevocably undertaken to the Company and Kingston Securities, that it will remain as the beneficial owner of such Shares until and including the Record Date and will accept a total of 6,056,099,340 Rights Shares, being its full entitlement under the Rights Issue.

WARNING OF THE RISKS OF DEALING IN SHARES AND RIGHTS SHARES

The Rights Issue is conditional, inter alia, upon the fulfilment of the conditions set out under the section headed ‘‘Conditions of the Rights Issue’’ of this Letter. Accordingly, the Rights Issue may or may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares and/or nil-paid Rights Shares up to the date when the conditions of the Rights Issue are fulfilled will bear the risk that the Rights Issue could not become unconditional and may not proceed. Shareholders and the public are reminded to exercise caution when dealing in the securities of the Company.

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

The Company is principally engaged in the design, manufacturing and sales of lightemitting diode (‘‘LED’’) (‘‘Lighting Business’’), property development (‘‘Property Development’’), development and operation of integrated resort (‘‘Integrated Resort Development’’), and casino business (the ‘‘Casino Business’’).

After the close of the financial year 2014, the Board has conducted a business and financial review of the Group’s various businesses and investments and the major financing needs for the upcoming period are identified as follows:

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LETTER FROM THE BOARD

(i) Jeju Project

As disclosed by the Company in its announcement dated 1 February 2015, Landing Jeju, a 50% non-wholly owned subsidiary of the Group, has obtained the building permits granted by the Jeju government for zones A and R of the Land forming part of the Jeju Project, for developing and constructing thereon (i) an integrated resort with a total gross floor area (‘‘GFA’’) of approximately 306,763 square meters comprising premium hotels and villa hotel and other conferencing and exhibition facilities, a theme park, a gaming facility and shopping and other entertainment and tourism facilities and (ii) condominiums, villas, bungalows and other accommodation facilities with a GFA of approximately 132,265 square meters. The earthwork of the integrated resort has been started and the construction works for the accommodation facilities and the hotels and theme park are expected to commence in mid-2015 and early 2016 respectively. Landing Jeju is now inviting tenders for the construction works.

Accordingly, it is expected that Landing Jeju will have to further invest in the Jeju Project by stages from 2015 onwards for completing the construction and other preopening works of the Jeju Project. As Landing Jeju is a start-up and lacks fund raising ability, it is expected that such further capital requirements for the Jeju Project will have to be equally shared and supported by further capital injections and/or shareholders loans from the Company and the Genting Singapore Group. Based upon the cash flow projection prepared by the Company for the Jeju Project for the period up to 30 June 2017, the Group itself will have to raise and get ready extra capital (on top of the Group’s share of bank and cash balance of approximately HK$555 million (instead of HK$588 million as disclosed in the Announcement) held by Landing Jeju and approximately HK$370 million raised in the share subscriptions approved by the shareholders at the special general meeting held on 28 March 2014 exclusively for the Jeju Project) in order to satisfy its projected share of capital/loan contributions to the Jeju Project, of which approximately HK$3,936 million, HK$667 million, HK$235 million and HK$586 million will be spent on (i) earthworks and construction, (ii) furniture, fixtures and equipment, (iii) professional fee and (iv) pre-opening expenses and other administrative expenses, respectively. Accordingly, the Company plans to raise and get ready approximately HK$4,460 million in order to meet the further capital requirements of the Jeju Project.

(ii) Property development

The development of the Yueyang Residential Properties comprises two phases. As of the Latest Practicable Date, the construction of the first phase was near to complete such that the structure and the interior construction of the properties, except for the facilities in the public areas, such as roads and landscape architecture, have been completed. For the second phase, as of the Latest Practicable Date, the structure of the properties had been completed, and the interior constructions, such as mechanical piping, ductwork, and electrical wiring, have just been started. According to current development plan, the construction works of Yueyang Residential Properties are expected to complete by or around the third quarter of 2016 and a total of approximately HK$608 million is estimated to be further required for its construction works.

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LETTER FROM THE BOARD

Based on the current construction progress and contracts which have been entered, and taking into account the cash and bank balance of the Yueyang Company and the funds expected to be available from pre-sale during 2015, the Group will require approximately HK$244 million for settling the construction costs of approximately HK$344 million to be due in or before March 2016. It is the Group’s current plan to fund the remaining construction costs of approximately HK$264 million to be due in 2016 and thereafter by the proceeds of pre-sale. However, given that the government policies in relation to the property and financial markets may change, which may affect the sentiment and performance of the property market, it is uncertain if the market responses to the presale and the sale price of the Yueyang Residential Properties are as good as planned. If the result of the pre-sale is below what is planned, further fund raising may be required to finance the outstanding construction costs of the Yueyang Residential Properties.

As disclosed in the Company’s announcement dated 24 November 2014, the Company had been approached by a potential buyer who had expressed interests in acquiring the property development business of the Group. The said negotiation did not result in any concrete agreement. Yet, the Board considers that any possible sale of the Yueyang Company will allow the Group to realize its investment in the Yueyang Company in an expedient manner, thereby minimizing the Group’s exposure to the market risks resulted from any downturn in the property market and the frequent changes in the property control policies in China. It will also allow the Group to redeploy its resources to its existing and other potential investments in Korea in line with the Group’s long term business strategy. Hence, if the Company is approached again by any other potential buyer who is interested in acquiring this property development business segment of the Group, the Company may consider the possibility to dispose of it if such disposal or relevant terms are in the interests of the Company and its Shareholders as a whole.

(iii) Establishment of a training centre

To complement the Group’s investment in Jeju, Korea, the Group has decided to build and establish a training centre in Jeju, Korea to provide trainings for locals on different areas, including but not limited to, property development and gaming business.

The training centre is located on the freehold lands owned by the Group in Jeju, Korea with a GFA of approximately 3,948 square metres. As of the Latest Practicable Date, the earth work of the training centre had been completed, and the construction of the structure of the building has just been commenced. Based on the construction, building, design and fixture/furniture contracts which have been entered into as of the Latest Practicable Date, an aggregate of approximately HK$227 million will be required to complete the relevant construction and such construction is expected to be completed in the fourth quarter of 2015.

(iv) Repayment of debts

As of the Latest Practicable Date, the Group’s major indebtedness comprises (i) a finance lease with an Independent Third Party in relation to the Aircraft to be due in 2019, with an outstanding principal amount of approximately HK$255 million and accrued interest up to July 2015 of approximately HK$13 million and (ii) a senior note

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LETTER FROM THE BOARD

issued to another Independent Third Party (the ‘‘Noteholder’’) to be due in early 2016 (the ‘‘Senior Note’’), with an outstanding principal amount of US$100 million and accrued interest up to July 2015 of approximately HK$24 million and a top-up fee of HK$24 million payable to the Noteholder by July 2015 if the Senior Note is redeemed after the 180th day of its issuance date, i.e. 27 July 2015 (the ‘‘Top-up Fee’’).

The Senior Note, with a term of one year, was issued on 27 January 2015 for financing long term investments opportunities from time to time identified by the Company. Pursuant to the terms of the Senior Note, the Company had paid HK$30 million as the arrangement fee to the Noteholder (the ‘‘Arrangement Fee’’), and is required to pay (a) interest at the annual rate of 6% over the principal amount of the Senior Note and (b) the Top-up Fee. The terms of the Senior Note were reached after arm’s length negotiation between the Company and the Noteholder. Taking into account the payment of the Arrangement Fee and the Top-up Fee in addition to the interest payments, the effective rate of the Senior Note is approximately 13% and the Company, with reference to the prevailing market rates, considered that the terms of the Senior Note were fair and reasonable.

The proceeds of the Senior Note have been allocated and used for the following long term investments:

(a) An aggregate sum of approximately HK$469 million has been invested in the marketable securities of two companies listed on the Main Board of the Stock Exchange, which were considered by the Company with good growth potentials in business, and henceforth their stock prices. As at the Latest Practicable Date, the Company recorded an aggregated unrealised gain of approximately HK$258 million from these two investments.
(b) A sum of HK$210 million has been paid to a potential vendor, who is an Independent Third Party, on 5 February 2015 as deposit for a potential acquisition of a target group which owns 75% interest in a golf club in the PRC. The deposit will be applied as part payment of the consideration of such potential acquisition if the transaction materializes, otherwise it will be refunded to the Company (without interest). As security for the payment of this deposit, the ultimate beneficial owner of the potential vendor has provided a personal guarantee, and the potential vendor has executed a share charge over the entire issued share capital of the target company, both in favour of the Company. In exchange for the payment of the deposit, the Company was given a six-month exclusivity period to conduct due diligence on the target group and to negotiate with the potential vendor on the terms of this potential acquisition. As at the Latest Practicable Date, the Company was still undergoing the due diligence process (including valuation) of the target group and no definitive agreement had been reached by the parties on this potential acquisition.
(c) Approximately HK$45 million has been injected to Yueyang Company for the construction of Yueyang Residential Properties, among which, approximately HK$30 million has been utilized.

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LETTER FROM THE BOARD

(d) A sum of HK$50 million has been utilized for payment to an appointed agent assisting the Group in exploring business and investment opportunities in Korea for costs on account of its professional fees and deposits that may be paid by it on behalf of the Group in any suitable investment opportunities that it may identify for the Group.

The Board intends to early repay the abovementioned debts in full in order to save the aggregate finance costs (net of any early repayment charge and other expenses) of approximately HK$44 million. With the assumption that repayments will be made by end of July 2015, it is expected that an aggregate sum of approximately HK$1,111 million will be required for the full repayments of the aforesaid debts (plus any accrued interests and early repayment charges and expenses).

As stated in the annual report of the Company for the year ended 31 December 2014, the Group had cash and bank balances of approximately HK$1,656 million as at 31 December 2014, which had been reserved and allocated for the following uses: (a) approximately HK$1,480 million (including the cash and balances held by Landing Jeju and the Group’s own reserve of HK$370 million mentioned above) has been reserved for the Jeju Project and (b) approximately HK$176 million for the working capital of the Group (except Landing Jeju). During the year 2015 and up to the Latest Practicable Date, Landing Jeju has utilized approximately HK$138 million for the Jeju Project and other administrative and operating expenses; and the Group has utilised (a) approximately HK$59 million for the construction of the training centre and (b) approximately HK$117 million for the professional fees and working capital of the Group (except Landing Jeju). Accordingly, as at the Latest Practicable Date, the Group had a total of approximately HK$1,342 million which has all been reserved for the Jeju Project. According to the current budget of the Group for the next 12 months up to 30 April 2016, the Group is expected to have approximately HK$4,468 million total net cash outflow (excluding the expected net proceeds from the Rights Issue and the expected further capital injection from the non-controlling interest of Landing Jeju and net of the expected net cash inflow of approximately HK$16 million from the Lighting Business and approximately HK$101 million from the pre-sale of the Yueyang Residential Properties), comprising (a) approximately HK$2,715 million for the construction, furniture, fixtures and equipment, professional fee and other pre-opening and other administrative expenses of the Jeju Project; (b) approximately HK$243 million for the construction, sales and other administrative expenses; (c) approximately HK$227 million for completing the construction of the training centre; (d) approximately HK$1,111 million for the full repayments of the debts of the Group as mentioned above; and (e) approximately HK$188 million for the working capital of the Group.

Taking into account of the capital requirements of the business plans and the cash position of the Group as mentioned above, the Rights Issue is required to provide the Group with the additional capital required to finance and implement the business plans. Accordingly, the Board considers that the Rights Issue is fair and reasonable and in the interests of the Company and its Shareholders as a whole.

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LETTER FROM THE BOARD

Intended use of proceeds

The gross proceeds from the Rights Issue will be not less than approximately HK$6,544 million before expenses. The estimated expenses in relation to the Rights Issue, including the financial, legal, and other professional advisory fees, underwriting commission, printing and translation expenses will be borne by the Company. The estimated net proceeds of the Rights Issue will be not less than approximately HK$6,446 million. Based on the Group’s future financing needs as explained above, the Company intends to apply the net proceeds from the Rights Issue as to (i) not more than HK$4,460 million for the Jeju Project; (ii) approximately HK$244 million on the property development of the Yueyang Residential Properties; (iii) approximately HK$227 million for the construction and establishment of a training centre in Jeju, Korea; (iv) approximately HK$1,111 million for the repayment of debts of the Group; and (v) the remaining proceeds of not less than approximately HK$404 million for the working capital of the Group (including the budgeted expenses for operating the Aircraft). The net proceeds from the Rights Issue will be used as intended and the Company will comply with the Listing Rules (including Shareholders’ approval requirement), where applicable, for any change in the use of proceeds.

The abovementioned are the funding needs of the Group in the next 12 months, except for (i) approximately HK$1,778 million allocated for the Jeju Project, which is expected to be required in the third quarter of 2016 under the current development plan of the Jeju Project and (ii) approximately HK$200 million allocated to working capital of the Group for May 2016 onwards.

Fund raising methods comparison

In view of the financing needs as aforementioned, the Board has considered and discussed with financial institutions regarding various fund raising methods available to the Group.

Among different fund raising methods, the Directors have focused on evaluating the possibilities of carrying out fund raising through rights issue and open offer as they are relatively larger in scale as compared to placing of new shares under a general mandate. In respect of debt financing, the Board will not consider debt financing at this stage as the expected finance costs for such large sum of fund are high and additional borrowings will deteriorate the gearing position of the Group.

In comparison, the Rights Issue is pre-emptive in nature, allowing Qualifying Shareholders to maintain their respective pro-rata shareholding through their participation into the Rights Issue. The Rights Issue allows the Qualifying Shareholders who participate to (a) increase its interests in the shareholding of the Company by (i) acquiring additional rights entitlement in the open market (subject to the availability); and/or (ii) applying through excess applications for Rights Shares or (b) decreasing its interests in the shareholding of the Company by disposing their rights entitlements in the open market (subject to availability). As an open offer does not allow the trading of rights entitlements and accordingly, the Rights Issue is preferred.

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LETTER FROM THE BOARD

For the purpose of the Rights Issue, the Company has contacted six financial institutions (including Kingston Securities). Yet due to the scale and size of the proposed fund raising, no concrete terms of offer had been received by the Company from any of them except Kingston Securities and the Company was only able to reach an agreement with the Underwriters under the present terms and structure of the Rights Issue. The Board considers that the Rights Issue will provide the Qualifying Shareholders the opportunity to maintain their respective pro-rata shareholdings in the Company and thus a chance to share the potential growth of the Group, while the Group will be able to strengthen its financial position and to fund its various business plans without incurring additional finance costs under debt financing. The Board is aware of (a) the accumulated dilution effect of 41.68% on the equity fund raisings conducted by the Company in the past 24 months (including the (i) issue of rights shares completed on 4 February 2014 on the basis of one rights share for every two shares held on the record date of 8 January 2014 at HK$0.3 per rights share; (ii) issue of 810,000,000 subscription shares at the price of HK$0.3 per subscription share and issue of 560,000,000 subscription shares at the price of HK$0.4 per subscription share completed on 1 April 2014; (iii) issue of 500,000,000 subscription shares at the price of HK$0.4 per subscription share completed on 11 April 2014; (iv) issue of 700,000,000 subscription shares at the price of HK$0.5 per subscription share completed on 17 June 2014; and (v) issue of 500,000,000 subscription shares at the price of HK$0.5 per subscription share completed on 8 July 2014); and (b) the potential dilution effect of the Rights Issue of a maximum of 90.92% on the Shareholders’ shareholdings in the Company if they do not subscribe for their pro-rata Rights Shares. The Board also notes that the theoretical ex-rights price of approximately HK$0.45 per Consolidated Share after the Rights Issue represents a discount of approximately 68.97% to the adjusted closing price of HK$1.45 per Consolidated Share on the Last Trading Day (based on the closing price of HK$0.145 per Existing Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation).

Nonetheless, the Board considers that the interests of the Shareholders can be safeguarded by the following:

Independent Shareholders are offered a chance to express their views on the terms of the Rights Issue, the Underwriting Agreement and the transactions contemplated thereunder through their votes at the SGM;
Qualifying Shareholders are offered to subscribe for their pro-rata Rights Shares for the purpose of maintaining their respective shareholdings in the Company at a relatively low price as compared to the historical and prevailing market price of the Shares;
those Qualifying Shareholders who choose to accept the Rights Shares in full can maintain their respective shareholdings in the Company after the Rights Issue;
offering relatively deep discount on the Subscription Price would encourage Qualifying Shareholders to participate in the Rights Issue and accordingly maintain their shareholdings in the Company and it is not an uncommon practice in rights issue arrangement on the Stock Exchange;

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LETTER FROM THE BOARD

Qualifying Shareholders have the opportunity to realise their nil-paid Rights Shares in the market; and
the entire potential dilution effect on the shareholding of the Shareholders will only happen when all the Qualifying Shareholders do not subscribe for their pro-rata Rights Shares, which will be an extreme situation.

Having considered all the factors above, the Board considers that the potential dilution effect on the shareholding interests of the Qualifying Shareholders, which may only happen when the Qualifying Shareholders do not subscribe for their pro-rata Rights Shares, to be acceptable, and hence the fund raising through the Rights Issue is in the interests of the Company and the Shareholders as a whole.

Future fund raising exercises

As at the Latest Practicable Date, save for the Rights Issue, the Company has not identified any other concrete fund raising plan with any financial institutions and has not contemplated any further fund raising exercise in the next 12 months. However, the proceeds from the Rights Issue may not satisfy the upcoming financing needs in full if there is any change of the Group’s current circumstances and business plans or if there shall arise any other potential investment opportunities.

Hence, the Board does not rule out the possibility that the Company will conduct further debt and/or equity fund raising exercises when suitable fund raising opportunities arise in order to support future developments of the Group. The Company will make further announcement in this regard in accordance with the Listing Rules as and when appropriate.

FUND RAISING EXERCISE OF THE COMPANY IN THE PAST 12 MONTHS

		Net proceeds
Date of	Fund raising	raised	Proposed use of
announcement	activity	(approximately)	the net proceeds	Actual use of the net proceeds
8 June 2014	Subscription of	HK$600 million	For investment	Used as intended with
	1,200,000,000		and/or general	approximately HK$120
	new shares at		working capital	million utilized for repaying
	HK$0.50 per		of the Company	the entrusted loan of the
	Share.			Group and the remaining
				balance utilized for the
				general working capital of
				the Group including those
				incurred for the casino
				business and the property
				development business

Save as abovementioned, the Company had not conducted any other fund raising exercise in the past 12 months immediately preceding the Latest Practicable Date.

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LETTER FROM THE BOARD

APPLICATION FOR WHITEWASH WAIVER

LIL is solely and beneficially owned by Mr. Yang Zhihui, an executive Director and a controlling shareholder of the Company, Ms. Xu Ning, an executive Director, is the spouse of Mr. Yang Zhihui. As at the Latest Practicable Date, LIL holds 6,056,099,340 Existing Shares, representing approximately 32.39% of the issued share capital of the Company. In the event that LIL is called upon to subscribe for the Underwritten Shares in full pursuant to its obligations under the Underwriting Agreement, the interest of LIL, Mr. Yang Zhihui, Ms. Xu Ning and parties acting in concert with any of them will increase by more than 2% to approximately 75% (assuming that there is no change in the number of issued Shares on or before the Record Date). Accordingly, the underwriting by LIL of the Underwritten Shares under the Rights Issue will trigger an obligation to make a mandatory general offer under Rule 26 of the Takeovers Code for all the securities of the Company not already owned or agreed to be acquired by LIL, Mr. Yang Zhihui, Ms. Xu Ning and parties acting in concert with any of them, unless a waiver is granted by the Executive.

The Company does not have any outstanding derivatives, warrants or other convertible securities, and there are (a) no arrangements (whether by way of option, indemnity or otherwise) in relation to the shares of LIL or the Company and which might be material to the Rights Issue, the Underwriting Agreement and/or the Whitewash Waiver; (b) no agreements or arrangements to which LIL is a party which relate to the circumstances in which LIL may or may not invoke or seek to invoke a precondition or a condition to the Rights Issue, the Underwriting Agreement and/or the Whitewash Waiver; and (c) no borrowing or lending of any relevant securities (as defined in note 4 of Rule 22 of the Takeovers Code) of the Company by LIL, Mr. Yang Zhihui, Ms. Xu Ning and the parties acting in concert with any of them as at the Latest Practicable Date.

Application has been made to the Executive by LIL for the Whitewash Waiver pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code, to waive the obligations of LIL to make such a mandatory general offer. Pursuant to the Takeovers Code, the Whitewash Waiver will be conditional on, among other things, the approval of the Independent Shareholders at the SGM by way of poll in accordance with the requirements of the Takeovers Code.

LIL, Mr. Yang Zhihui, Ms. Xu Ning and the parties acting in concert with any of them and those who are involved or interested in the transactions regarding the Rights Issue, the Underwriting Agreement and/or the Whitewash Waiver will not be entitled to vote at the SGM.

The Executive has agreed, among other matters, subject to the approval of the Independent Shareholder at the SGM, to grant the Whitewash Waiver. If the Whitewash Waiver is approved by the Independent Shareholders, then the obligation by LIL to make a mandatory general offer under Rule 26 of the Takeover Code will be waived.

If the Whitewash Waiver is approved by the Independent Shareholders, the shareholding of the Concert Party Group will exceed 50%. The Concert Party Group may further increase its shareholding in the Company without incurring any further obligations under Rule 26 of the Takeovers Code to make a general offer.

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LETTER FROM THE BOARD

None of LIL, Mr. Yang Zhihui, Ms. Xu Ning or parties acting in concert with any of them has any dealings in any securities of the Company (as defined in Note 4 to Rule 22 of the Takeovers Code) in the six-month period preceding the date of the Announcement.

Save for the Irrevocable Undertaking given by LIL which provides for irrevocable commitments to accept its entitlement of the Rights Shares, the Company has not received any irrevocable commitments to accept or reject the Rights Shares or to vote in favour of or against the Rights Issue, the Underwriting Agreement and/or the Whitewash Waiver.

SHAREHOLDING STRUCTURE OF THE COMPANY

The following table shows the shareholding structures of the Company as at the Latest Practicable Date and immediately after completion of the Rights Issue.

Shareholders LIL, Mr. Yang Zhihui, Ms. Xu Ning and parties acting in concert with any of them (Note 1) Kingston Securities (Note 2) Public Total	As at the Latest Practicable Date Number of Shares % 6,056,099,340 32.39 — — 12,640,154,532 67.61 18,696,253,872 100.00	Immediately upon the Share Consolidation becoming effective but before completion of the Rights Issue Number of Shares % 605,609,934 32.39 — — 1,264,015,453 67.61 1,869,625,387 100.00	Immediately after completion of the Rights Issue assuming all the Qualifying Shareholders have taken up their respective entitlements of Rights Shares in full Number of Shares % 6,661,709,274 32.39 — — 13,904,169,983 67.61 20,565,879,257 100.00	Immediately after completion of the Rights Issue assuming no Qualifying Shareholders (with the exception of LIL) have taken up any of the Rights Shares and the Underwriters have take up the Rights Shares to the maximum extent Number of Shares % 15,424,409,443 75.00 3,877,454,361 18.85 1,264,051,453 6.15 20,565,879,257 100.00	Immediately after completion of the Rights Issue assuming no Qualifying Shareholders (with the exception of LIL) have taken up any of the Rights Shares and the Underwriters have take up the Rights Shares to the maximum extent Number of Shares % 15,424,409,443 75.00 3,877,454,361 18.85 1,264,051,453 6.15 20,565,879,257 100.00
					100.00

Notes:

All of the 6,056,099,340 Existing Shares are held by LIL, which is solely and beneficially owned by Mr. Yang Zhihui, an executive Director. Ms. Xu Ning, an executive Director, is the spouse of Mr. Yang Zhihui. Save for LIL, the Company has no other substantial shareholder and no Director (except Mr. Yang Zhihui and Ms. Xu Ning) is directly interested in any Shares.
As at the Latest Practicable Date, Kingston Securities does not have any sub-underwriting arrangements in place. As and when any subscribers for Rights Shares and/or sub-underwriters are procured by Kingston Securities, Kingston Securities will use its best endeavours to ensure that (i) such subscribers and/or sub-underwriters are Independent Third Parties, and (ii) such sub-underwriters will not hold more than 10.0% of the equity interest in the Company upon completion of the Rights Issue.

IMPLICATION UNDER THE TAKEOVERS CODE

The Rights Issue will trigger a mandatory general offer required to be made by LIL under Rule 26 of the Takeovers Code, for all the Shares other than those already owned by the Concert Party Group. LIL has made an application to the Executive to apply for the Whitewash

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LETTER FROM THE BOARD

Waiver. The Executive has indicated that it will grant the Whitewash Waiver subject to the approval by the Independent Shareholders on votes taken by way of poll. The Concert Party Group and their respective associates will abstain from voting at the SGM in this respect. Should the Whitewash Waiver be granted, LIL will not be required to make a general offer upon completion of the Rights Issue.

IMPLICATION UNDER THE LISTING RULES

As the Rights Issue will increase the issued share capital of the Company by more than 50%, the Rights Issue is subject to the approval of the Shareholders at the SGM by way of poll. Pursuant to Rule 7.19(6) of the Listing Rules, the Rights Issue must be made conditional upon approval by the Shareholders in general meeting by a resolution on which any controlling shareholders and their associates or, where there are no controlling shareholders, the Directors (excluding the independent non-executive Directors) and the chief executive of the Company and their respective associates will abstain from voting.

As at the Latest Practicable Date, LIL, a company wholly owned by Mr. Yang Zhihui, an executive Director, holds 6,056,099,340 Existing Shares, representing approximately 32.39% of the issued share capital of the Company. Accordingly, LIL and Mr. Yang Zhihui and their respective associates, together with parties acting in concert with either of them, will abstain from voting at the SGM to approve the Rights Issue.

CONNECTED TRANSACTIONS

LIL is wholly owned by Mr. Yang Zhihui, an executive Director and controlling shareholder of the Company, and is therefore a connected person of the Company. Accordingly, the transaction contemplated under the Underwriting Agreement constitutes a connected transaction under Chapter 14A of the Listing Rules. Pursuant to Rule 14A.92(2) of the Listing Rules, provided that Rule 7.21(2) of the Listing Rules has been complied with, the allotment and issue of the Underwritten Shares to LIL pursuant to the Underwriting Agreement will be exempted from the reporting, announcement and Independent Shareholders’ approval requirements of Chapter 14A of the Listing Rules. As the Company has made arrangement to apply for the Rights Shares by the Qualifying Shareholders in excess of their entitlements under the Rights Issue as referred to in Rule 7.21(1) of the Listing Rules, Rule 7.21(2) of the Listing Rules has been complied with and the allotment and issue of the Underwritten Shares to LIL pursuant to the Underwriting Agreement will be exempted from the reporting, announcement and Independent Shareholder’s approval requirements under Chapter 14A of the Listing Rules.

In addition, the payment of the Underwriting Commission to LIL constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. As the maximum Underwriting Commission to be received by the Underwriter pursuant to the Underwriting Agreement is approximately HK$61,339,000 and one of the applicable percentage ratios (other than the profits ratio) as defined in the Listing Rules is more than 5%, it is therefore subject to reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

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LETTER FROM THE BOARD

The Board considers that the Company will benefit from the entering into of the Underwriting Agreement and the payment of the Underwriting Commission given LIL has agreed to underwrite the Underwritten Shares, which is not a small volume, and the underwriting commission rate (i.e. 2.0% of the aggregate Subscription Price in respect of the Underwritten Shares) is relatively lower than the other Independent Third Parties.

In respect of the entering into of the Underwriting Agreement, given LIL is a connected person of the Company, Mr. Yang Zhihui, who is the sole shareholder of LIL and an executive Director of the Company, and Ms. Xu Ning, who is spouse of Mr. Yang Zhihui and an executive Director of the Company, have abstained from voting for the board resolution approving the Underwriting Agreement and the transactions contemplated thereunder.

In respect of the payment of the Underwriting Commission by the Company to LIL, given LIL is a connected person of the Company, LIL (which holds 6,056,099,340 Shares of the Company, representing approximately 32.39% of the issued share capital of the Company as at the Latest Practicable Date) and its associates are required to abstain from voting approving the relevant resolution in the SGM.

In respect of the payment of the Underwriting Commission by the Company to LIL, Mr. Yang Zhihui and Ms. Xu Ning are required to abstain from voting the relevant board resolution.

FUTURE INTENTIONS

The Concert Party Group is optimistic about the future businesses of the Group. Following the grant and approval of the Whitewash Waiver and completion of the Rights Issue, LIL will continue to be a controlling shareholder of the Company under the Listing Rules. LIL intends to continue the existing businesses of the Group without any major changes after the Rights Issue.

INFORMATION OF THE GROUP

The Company, through its subsidiaries, is principally engaged in the Lighting Business; Property Development; the Integrated Resort Development and the Casino Business. The consolidated financial information of the Company for the three financial years ended 31 December 2012, 2013 and 2014 are summarised as follows:

	Year ended	Year ended	Year ended
	31 December	31 December	31 December
	2014	2013	2012
	(Audited)	(Audited)	(Audited)
	HK$’000	HK$’000	HK$’000
Revenue	223,318	181,075	156,265
Loss before taxation	(344,155)	(138,626)	(240,674)
Loss after taxation	(342,656)	(142,197)	(322,712)
Net assets at year end	4,511,086	841,506	332,096

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LETTER FROM THE BOARD

SGM

A notice convening the SGM is set out on pages SGM-1 to SGM-3 of this circular. At the SGM, ordinary resolutions will be proposed to the Shareholders and the Independent Shareholders (as the case may be) to consider and, if thought fit, approve the Share Consolidation, the increase in authorised share capital, the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction, where votes of the Independent Shareholders will be taken on a poll.

The result of voting taken on a poll at the SGM will be announced by the Company in accordance with the Listing Rules.

Whether or not you intend to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Registrar, Tricor Standard Limited at Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong as soon as practicable and in any event, not less than 48 hours before the time appointed for the holding of the SGM. Delivery of a form of proxy will not preclude you from attending and voting in person at the SGM or any adjourned meeting (as the case may be) should you so desire.

RECOMMENDATION

The Directors (including the independent non-executive Directors whose opinion on this matter is set out in the letter from the Independent Board Committee set out on pages 38 to 39 of this circular) consider that the Share Consolidation, the increase in authorised share capital, the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors whose opinion on this matter is set out in the letter from the Independent Board Committee set out on pages 38 to 39 of this circular) recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the SGM to approve the Share Consolidation, the increase in authorised share capital, the Rights Issue, the Underwriting Agreement and the Whitewash Waiver and the transactions contemplated thereunder. You are advised to read the letter from the Independent Board Committee and the letter from Gram Capital mentioned above before deciding how to vote on the resolutions to be proposed at the SGM.

Yours faithfully, By order of the Board Landing International Development Limited Yang Zhihui

Chairman and executive Director

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction:

Landing International Development Limited 藍鼎國際發展有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock code: 582)

29 May 2015

To Independent Shareholders

Dear Sir or Madam,

(1) PROPOSED RIGHTS ISSUE ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE;

(2) APPLICATION FOR WHITEWASH WAIVER; AND (3) CONNECTED TRANSACTION IN RELATION TO PAYMENT OF UNDERWRITING COMMISSION

We refer to the circular of the Company dated 29 May 2015 (the ‘‘Circular’’), of which this letter forms part. Terms used herein have the same meanings as those defined in the Circular unless otherwise specified.

We have been appointed by the Board to form the Independent Board Committee to advise the Independent Shareholders as to whether the terms of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction are fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole, and to recommend how the Independent Shareholders should vote regarding the relevant proposed resolutions pursuant to the Takeovers Code at the SGM.

Gram Capital has been appointed as the IFA to advise us and the Independent Shareholders as to whether the terms of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole, and to recommend how the Independent Shareholders should vote regarding the relevant proposed resolutions at the SGM. Details of the advice of Gram Capital, together with the principal factors taken into consideration in arriving at such advice, are set

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

out on pages 40 to 54 of the Circular. Your attention is also drawn to the letter from the Board set out on pages 12 to 37 to the Circular and the additional information set out in the appendices to the Circular.

Having taken into account the advice of Gram Capital, we consider that the terms of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction are fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favor of the relevant proposed resolutions to approve the terms of the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction contemplated under the at the SGM.

Yours faithfully,

For and on behalf of the Independent Board Committee Mr. Fok Ho Yin, Thomas Mr. Chen Lei Ms. Zhang Xiaolan Independent non-executive Independent non-executive Independent non-executive Director Director Director

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LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue, the Connected Transaction and the Whitewash Waiver for the purpose of inclusion in this circular.

==> picture [169 x 32] intentionally omitted <==

Room 1209, 12/F. Nan Fung Tower 88 Connaught Road Central/ 173 Des Voeux Road Central Hong Kong

29 May 2015

To: The independent board committee and the independent shareholders of Landing International Development Limited

Dear Sirs,

(1) PROPOSED RIGHTS ISSUE ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE;

(2) APPLICATION FOR WHITEWASH WAIVER; AND (3) CONNECTED TRANSACTION IN RELATION TO PAYMENT OF UNDERWRITING COMMISSION

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue, the Connected Transaction and the Whitewash Waiver, details of which are set out in the letter from the Board (the ‘‘Board Letter’’) contained in the circular dated 29 May 2015 issued by the Company to the Shareholders (the ‘‘Circular’’), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

It was announced on 22 April 2015 that, amongst others, the Company proposed to (i) conduct the Share Consolidation; (ii) increase the authorised share capital of the Company from HK$500,000,000 to HK$10,000,000,000 by the creation of 95,000,000,000 new Consolidated Shares of HK$0.10 each; and (iii) subject to the Share Consolidation becoming effective, implement the Rights Issue on the basis of ten Rights Shares for every one Consolidated Share held on the Record Date at the Subscription Price of HK$0.35 per Rights Share. The Company will raise proceeds of approximately HK$6,544 million before expenses (assuming that there is no change in the number of issued Shares on or before the Record Date) by way of the issue of 18,696,253,870 Rights Shares.

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LETTER FROM GRAM CAPITAL

According to the Board Letter, since the Rights Issue will increase the issued share capital of the Company by more than 50%, the Rights Issue is subject to approval of the Shareholders at the SGM by way of poll. In addition, given that LIL is a connected person of the Company, the entering into of the Underwriting Agreement by the Company and payment of the underwriting commission by the Company to LIL constitute connected transactions for the Company under the Listing Rules. As the total amount of underwriting commission payable by the Company is more than 5% of the applicable ratios under Chapter 14A of the Listing Rules, payment of the underwriting commission to LIL pursuant to the Underwriting Agreement will be subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

According also to the Board Letter, the underwriting by LIL of the Underwritten Shares under the Rights Issue will trigger an obligation of the Concert Party Group to make a mandatory general offer under Rule 26 of the Takeovers Code for all the securities of the Company not already owned or agreed to be acquired by the Concert Party Group, unless a waiver is granted by the Executive. An application has been made by LIL for the Whitewash Waiver to the Executive pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code, to waive the obligations of the Concert Party Group to make such a mandatory general offer. Pursuant to the Takeovers Code, the Whitewash Waiver will be conditional on, among other things, the approval of the Independent Shareholders at the SGM by way of poll in accordance with the requirements of the Takeovers Code.

The Independent Board Committee comprising all the independent non-executive Directors, namely Mr. Fok Ho Yin, Thomas, Mr. Chen Lei and Ms. Zhang Xiaolan, has been established to advise the Independent Shareholders on (i) whether the terms of the Rights Issue and the Underwriting Agreement (including the Connected Transaction) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the Rights Issue is in the interests of the Company and the Shareholders as a whole and is conducted in the ordinary and usual course of business of the Group; (iii) whether the Whitewash Waiver is in the interests of the Company and the Shareholders as a whole; and (iv) how the Independent Shareholders should vote in respect of the resolutions to approve the Rights Issue, the Connected Transaction and the Whitewash Waiver at the SGM. We, Gram Capital Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date, and should there be any material changes to our opinion after the Latest Practicable Date, Shareholders would be notified as soon as possible. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were

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LETTER FROM GRAM CAPITAL

reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors’ representation and confirmation that there are no undisclosed private agreements/arrangements or implied understanding with anyone concerning the Rights Issue, the Connected Transaction and the Whitewash Waiver. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules and Rule 2 of the Takeovers Code.

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Circular (other than the information relating to the Concert Party Group) is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement in the Circular (other than the information relating to the Concert Party Group) or the Circular misleading.

The Circular includes particulars given in compliance with the Takeovers Code. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular (other than those relating to the Concert Party Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular (other than those expressed by the Concert Party Group) have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

The directors of LIL jointly and severally accept full responsibility for the accuracy of the information contained in the Circular (other than those relating to the Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular (other than those expressed by the Group) have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, the Concert Party Group, or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Rights Issue and/or the Connected Transaction. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

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LETTER FROM GRAM CAPITAL

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly and fairly extracted, reproduced or presented from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Rights Issue, the Connected Transaction and the Whitewash Waiver, we have taken into consideration the following principal factors and reasons:

(I) THE RIGHTS ISSUE AND THE CONNECTED TRANSACTION

Background of and reasons for the Rights Issue

Business and financial overview of the Group

The Company is principally engaged in the design, manufacturing and sales of light-emitting diode (‘‘LED’’), property development, development and operation of integrated resort, and casino business.

Set out below are the audited consolidated financial results of the Group for the two years ended 31 December 2014 as extracted from the Company’s annual report for the year ended 31 December 2014 (the ‘‘Annual Report’’):

	For the	For the
	year ended	year ended	Year on
	31 December	31 December	year
	2014	2013	change
	HK$’000	HK$’000	%
Revenue	223,318	181,075	23.33
— Lighting business	201,951	181,075	11.53
— Property development	—	—	N/A
— Integrated resort	—	—	N/A
development		(Note)
— Casino business	21,367	—	N/A
		(Note)
Gross profit	12,019	37,704	(68.12)
Loss for the year	(342,656)	(142,197)	140.97

Note: The Group did not have the segments of integrated resort development and casino business for the year ended 31 December 2013.

As illustrated by the above table, the Group recorded an increase in revenue for the year ended 31 December 2014 (‘‘FY2014’’) as compared to the year ended 31 December 2013 (‘‘FY2013’’). Nevertheless, the gross profit of the Group decreased

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LETTER FROM GRAM CAPITAL

and the net loss of the Group increased for FY2014 as compared to FY2013. According to the Annual Report, the increase in loss was mainly attributable to (i) administrative expenses in connection with the newly acquired casino business; (ii) pre-construction administrative expenses for the integrated resort development; (iii) increase in other operating and administrative expenses due to the Group’s expansion; and (iv) an impairment of goodwill recognised during FY2014.

With reference to the Annual Report, despite the expansion in revenue, the performance of the lighting business and its transaction volume in FY2014 did not have any notable improvement as compared to FY2013. The gross profit margin of the lighting business also decreased in FY2014 as compared to FY2013. The LED products are facing price pressure as the lighting business has been continuously and adversely affected by keen competition within the industry.

On 7 June 2013, in order to diversify the income source for its continuous development, the Group completed the acquisition of the entire issued share capital of Double Earn Holdings Limited (‘‘Double Earn’’) at a consideration of HK$550 million. Double Earn, through its indirect wholly-owned subsidiary, namely, the Yueyang Company, is principally engaged in the development and operation of a parcel of land situated on the western shore of 南湖 (Nanhu Lake*), Yueyang, Hunan Province, the PRC, which is under development into high-end residential buildings with club houses and parking lots. The construction work was commenced in July 2013 and the first stage of pre-sale has begun in January 2014.

In respect of the integrated resort development, on 14 August 2013, the Company and JDC entered into a memorandum of agreement with respect to the intended investment on the Land for the development, management and operation of the Jeju Project. On 7 February 2014, the Company joined force with Genting Singapore Group by entering into a shareholders agreement among the Company, Landing Jeju and HBL, an indirect wholly-owned subsidiary of Genting Singapore, to form a strategic partnership to develop, manage and operate the Jeju Project. With reference to the Annual Report and as advised by the Directors, the Jeju Project is expected to be one of South Korea’s largest integrated resorts, spanning across a land area of approximately 2.5 million square metres. Slated to open progressively from 2017, under the current development plan, the Jeju Project will house Jeju’s largest family theme park offering more than 20 rides and attractions in seven different zones under the themes of myths and legends from all over the world, Jeju’s largest adventure waterpark and one of South Korea’s most exciting themed retail and food complexes. Its premium hotels will have more than 2,000 rooms, boasting luxury villas, Jeju’s first 6-star hotel and a destination spa. The hotels will be equipped with full meeting and conference facilities that are suitable for hosting regional and international meetings, conventions and events. In addition, the hotels will provide cultural facilities, leisure and entertainment amenities, as well as around 1,500 luxury serviced apartments and residential villas. The entire development is expected to be completed by 2019.

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LETTER FROM GRAM CAPITAL

As further advised by the Directors, the operation of the casino at Hyatt Regency Jeju Hotel (the ‘‘Jeju Casino’’) through Magical Gains (a former direct wholly-owned subsidiary of the Company incorporated in the BVI, which is now a joint venture of the Company with 50% interest being held by the Company) represents the casino business of the Group. As extracted from the Annual Report, the segment revenue from the Group’s casino business was approximately HK$21,367,000 during FY2014. However, a segment loss of approximately HK$20,261,000 was recorded in FY2014 mainly due to the suspension of business during the renovation period of the Jeju Casino since October 2014. On 18 January 2015, the grand opening of the Jeju Casino was held to publicise and celebrate its reopening after the transfer of the 50% ownership of Magical Gains and the renovation. The Jeju Casino is now operated under the tradename of ‘‘Genting Jeju’’, and currently has 26 Baccarat tables, one Blackjack table, one Tai Sai table, one Roulette table and 16 slot machines.

Reasons for the Rights Issue and intended use of proceeds

As referred to in the Board Letter, the estimated gross proceeds from the Rights Issue will be not less than approximately HK$6,544 million before expenses and the estimated net proceeds from the Rights Issue will be approximately HK$6,446 million. Based on the Group’s future financing needs as explained above, the Company intends to apply the net proceeds from the Rights Issue as to (i) not more than HK$4,460 million for the Jeju Project; (ii) approximately HK$244 million on property development of the Yueyang Residential Properties (for settling the construction costs to be due in or before March 2016, taking into account the cash and bank balance of the Yueyang Company and the funds expected to be available from pre-sale of the Yueyang Residential Properties during 2015); (iii) approximately HK$227 million for construction and establishment of a training centre in Jeju; (iv) approximately HK$1,111 million for repayment of debts of the Group; and (v) the remaining proceeds of not less than approximately HK$404 million for working capital of the Group (including the budgeted expenses for operating the Aircraft). In relation to the above, it is the Group’s current plan to fund the remaining construction costs of the Yueyang Residential Properties to be due in 2016 and thereafter by the pre-sale proceeds. However, the property market sentiment and performance and the financial market may change which may affect the market response to the pre-sale and the sale price of the Yueyang Residential Properties. If the result of the pre-sale is below expectation, further fund raising may be required to finance the outstanding construction costs of the Yueyang Residential Properties.

Details of the funding needs for the Jeju Project, the property development of the Yueyang Residential Properties, the construction and establishment of the training centre in Jeju and the repayment of debts of the Group are set out under the section headed ‘‘Reasons for the Rights Issue and use of proceeds’’ in the Board Letter. For our due diligence purpose, we have requested and obtained the breakdown of the funding needs for the Jeju Project, the property development of the Yueyang Residential Properties, the construction and establishment of the

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LETTER FROM GRAM CAPITAL

training centre in Jeju and the repayment of debts of the Group. We have also discussed with the management of the Company for the purpose of understanding the aforesaid funding needs.

After discussion with the management of the Company regarding the aforesaid funding needs of the Group and the intended use of proceeds from the Rights Issue, we understand that the intended use of proceeds from the Rights Issue is in line with the Group’s development strategy. As such, we consider that the reasons for the Rights Issue are justifiable.

With reference to the Board Letter, as at the Latest Practicable Date, save for the Rights Issue, the Company had not identified any other concrete fund raising plan with any financial institutions and had not contemplated any further fund raising exercise in the next 12 months. The proceeds from the Rights Issue may not satisfy the upcoming financing needs in full if there is any change of the Group’s current circumstances and business plans or if there shall arise any other potential investment opportunities. Hence, the Board does not rule out the possibility that the Company will conduct further debt and/or equity fund raising exercises when suitable fund raising opportunities arise in order to support the future development of the Group. As further confirmed by the Directors, the Company will comply with the relevant Listing Rules’ requirements (including but not limited to shareholders’ approval requirement, if applicable) should the Company conduct further fund raising exercises in the future. Accordingly, we consider that the Shareholders’ interest can be protected in this regard.

Other financing alternatives available to the Group

With reference to the Board Letter, the Board has considered and discussed with financial institutions regarding various fund raising methods available to the Group. Among different fund raising methods, the Directors have focused on evaluating the possibilities of carrying out fund raising through rights issue and open offer as they are relatively larger in scale as compared to placing of the Consolidated Shares under a general mandate. In respect of debt financing, the Board would not consider debt financing at this stage as the expected finance costs for such large sum of fund are high and the gearing position of the Group will be deteriorated due to additional borrowings. In comparison, the Rights Issue is pre-emptive in nature, allowing Qualifying Shareholders to maintain their respective pro-rata shareholdings through their participation in the Rights Issue. The Rights Issue allows the Qualifying Shareholders who participate to (a) increase their interests in the shareholding of the Company by (i) acquiring additional rights entitlement in the open market (subject to availability); and/or (ii) applying through excess applications for Rights Shares or (b) decrease their interests in the shareholding of the Company by disposing of their rights entitlements in the open market (subject to availability). As an open offer does not allow the trading of rights entitlements, the Rights Issue is preferred.

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LETTER FROM GRAM CAPITAL

Having taken into account the possible benefits of the Rights Issue as compared with other financing alternatives, we concur with the Directors that the Rights Issue is in the interests of the Company and the Shareholders as a whole although it is not conducted in the ordinary and usual course of business of the Group.

2. Principal terms of the Rights Issue

The following table summarises the major terms of the Rights Issue:

Basis of the Rights Issue: ten Rights Shares for every one Consolidated Share held on the Record Date Number of Existing Shares 18,696,253,872 Existing Shares (or 1,869,625,387 in issue as at the Latest Consolidated Shares upon the Share Consolidation Practicable Date: becoming effective) Number of Rights Shares: 18,696,253,870 Rights Shares (assuming no change in the number of issued Shares on or before the Record Date)

Subscription Price: HK$0.35 per Rights Share with nominal value of HK$0.10 each

The Subscription Price represents:

(a) a discount of approximately 77.85% to the adjusted closing price of HK$1.58 per Consolidated Share, based on the closing price of HK$0.158 per Existing Share as quoted on the Stock Exchange on the Latest Practicable Date and adjusted for the effect of the Share Consolidation;
(b) a discount of approximately 75.86% to the adjusted closing price of HK$1.45 per Consolidated Share, based on the closing price of HK$0.145 per Existing Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation;
(c) a discount of approximately 73.84% to the adjusted average closing price of HK$1.338 per Consolidated Share, based on the average closing price of HK$0.1338 per Existing Share for the five consecutive trading days up to and including the Last Trading Day and adjusted for the effect of the Share Consolidation;
(d) a discount of approximately 24.24% to the adjusted theoretical ex-rights price of approximately HK$0.462 per Consolidated Share, based on the closing price of HK$0.158 per Existing Share as quoted on the Stock Exchange on the Latest Practicable Date and adjusted for the effect of the Share Consolidation; and

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LETTER FROM GRAM CAPITAL

(e) a discount of approximately 22.22% to the adjusted theoretical ex-rights price of approximately HK$0.45 per Consolidated Share, based on the closing price of HK$0.145 per Existing Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation.

As confirmed by the Directors, the Subscription Price was determined after arm’s length negotiations among the Company and the Underwriters having regard to (a) the market price of the Existing Shares prior to the Last Trading Day; (b) the loss making position of the Group in the past two financial years; and (c) the prevailing market conditions of the capital market in Hong Kong. The Directors consider the terms of the Rights Issue, including the Subscription Price which has been set as a discount to the recent closing prices of the Existing Shares with an objective to encourage existing Shareholders to take up their entitlements so as to participate in the potential growth of the Company, to be fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

3. Analysis on the Subscription Price

In order to assess the fairness and reasonableness of the Subscription Price, we set out the following informative analysis for illustrative purpose:

Comparison with other rights issue exercises

We have searched for rights issue exercises which were announced from 1 February 2015 up to the Latest Practicable Date (being the approximate four-month period prior to and including the Latest Practicable Date) by companies listed on the Stock Exchange so as to reflect the general trend of rights issue exercises in the market. To the best of our knowledge and as far as we are aware of, there were 18 such rights issue exercises (the ‘‘Comparables’’). Shareholders should note that the businesses, operations and prospects of the Company are not the same as the Comparables. We have not conducted any independent investigation with regard to the businesses and operations of the Comparables which shall not affect our analysis as we are comparing the general trend of rights issue exercises in the market with the Rights Issue.

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LETTER FROM GRAM CAPITAL

Summarised below is our relevant finding:

				Discount of the
				subscription price to the
			Discount of the	theoretical ex-rights price
			subscription price to the	(‘‘TERP’’) per share based
			closing price per share	on the closing price per
			on the last trading	share on the last trading
			day prior to/on	days prior to/on the date
			the date of	of the announcements in
			the announcements	relation
			in relation	to the respective		Involved connected
	Stock	Date of	to the respective	rights issue	Underwriting	person(s) as	Basis of
Company name	code	announcement	rights issue	(Note 1)	commission	underwriter(s)	allotment
			%	%	%
Easyknit Enterprises	616	2 February 2015	(85.56)	(21.68)	1	No	20 for 1
Holdings Limited
Shanghai Tonva	1103	17 February 2015	(6.02)	(4.29)	1	No	4.5 for 10
Petrochemical
Company Limited
Get Nice Holdings	64	17 February 2015	(21.13)	(15.15)	1	No	1 for 2
Limited						(Note 2)
GET Holdings	8100	24 February 2015	(59.80)	(27.10)	3.5	No	3 for 1
Limited
Joy City Property	207	27 February 2015	(5.60)	(3.60)	N/A	N/A	1 for 2
Limited					(Note 3)	(Note 3)
Larry Jewelry	8351	11 March 2015	(84.71)	(35.64)	2.5	No	9 for 1
International
Company Limited
Haitong International	665	18 March 2015	(33.71)	(20.27)	1	Yes	1 for 1
Securities Group
Limited
Wai Yuen Tong	897	26 March 2015	(31.65)	(23.40)	2.5	No	1 for 2
Medicine
Holdings Limited
Emperor Capital	717	26 March 2015	(32.40)	(24.20)	3	Yes	1 for 2
Group Limited
Hanny Holdings	275	9 April 2015	(74.19)	(29.11)	Nil and 3	Yes	6 for 1
Limited					(Note 4)
Capital Environment	3989	21 April 2015	(25.00)	(15.10)	Nil	Yes	1 for 1
Holdings Limited
Hong Kong Education	1082	24 April 2015	(69.97)	(24.98)	3.5	No	4 for 1 (with 1
(Int’l)			(Note 5)	(Note 5)			bonus share for
Investments							every 2 rights shares
Limited							taken up)
South China Financial	619	30 April 2015	(42.53)	(32.89)	1.00	No	1 for 2
Holdings Limited
Shihua Development	485	4 May 2015	(85.24)	(49.08)	2.5	Yes	2 for 1 (with 3
Company Limited			(Note 5)	(Note 5)			bonus shares for
							every 2 rights shares
							taken up)
Capital Estate Limited	193	14 May 2015	(34.50)	(26.11)	2	No	1 for 2
Eternity Investment	764	15 May 2015	(4.11)	(2.10)	2.5	No	1 for 1
Limited
China Strategic	235	20 May 2015	(49.15)	(39.27)	2.5	No	1 for 2
Holdings Limited
Universe International	1046	26 May 2015	(74.75)	(49.66)	3.5	No	2 for 1
Holdings Limited
Median			(38.52)	(24.59)	2.50
Mean			(45.56)	(24.65)	1.91
Range of discounts			(4.11) to	(2.10) to	Nil to
and			(85.56)	(49.66)	3.50
underwriting
commissions
The Company	582	22 April 2015	(75.86)	(22.22)	2.5 for	Yes	10 for 1
					Kingston Securities;
					and 2 for LIL

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LETTER FROM GRAM CAPITAL

Source: the relevant announcements posted on the Stock Exchange web-site (www.hkex.com.hk) Notes:

In accordance with the supplementary guidance on Rule 17.03(13) of the Listing Rules dated 5 September 2005 and the note immediately after the rule, TERP should be calculated based on the below formula:

(Theoretical Ex-entitlementTEEP Price) = CUM1++(MM x R)

CUM = Closing price as shown in the daily quotation sheet of the Stock Exchange on the last day of trading before going ex-entitlement

M = Entitlement per existing share

R = Subscription price

The TERPs as shown in the above table are based on information contained in the respective announcements of the Comparables and we have not examined the accuracy of their calculation.

Shareholders should also note that the discounts as represented by the subscription prices of the Comparables to the TERPs were affected by various factors including but not limited to the closing prices of the respective shares, basis of allotment and subscription prices of the respective rights issue exercises. Accordingly, such information is contained herein for reference only.

The underwriter was a wholly-owned subsidiary of the issuer.
The rights issue was conducted on a non-underwritten basis.
Nil to the connected underwriter and 3% to the independent third party underwriter.
The effect of bonus issue associated with the rights issue has been taken into account.

As shown by the above table, the subscription prices of all Comparables represented discounts to the respective closing prices of their shares on the last trading day prior to/on the date of the respective rights issue announcements. The discounts as represented by the subscription prices of the Comparables to the respective closing prices of their shares on the last trading day prior to/on the date of the respective rights issue announcements ranged from approximately 4.11% to 85.56% (the ‘‘LTD Market Range’’) with a median and mean of approximately 38.52% and 45.56% respectively (the ‘‘LTD Market Median/Mean’’). The discount of approximately 75.86% to the adjusted closing price per Consolidated Share on the Last Trading Day as represented by the Subscription Price (the ‘‘LTD Discount’’) hence falls within the LTD Market Range and is deeper than the LTD Market Median/Mean.

Conclusion

In view of that (i) all Qualifying Shareholders are entitled to subscribe for the Rights Shares in the same proportion to their existing shareholdings in the Company held on the Record Date; (ii) the Subscription Price being set at discount to the

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LETTER FROM GRAM CAPITAL

recent closing prices of the Existing Shares could encourage the existing Shareholders to take up their entitlements so as to participate in the potential growth of the Company; (iii) although the LTD Discount is deeper than the LTD Market Median/Mean, the LTD Discount is within the LTD Market Range; and (iv) the deep discount and a high ratio of Rights Shares will allow each Qualifying Shareholder to have greater flexibility in determining the extent of his/her/its participation in the Rights Issue that is most suitable for his/her/its own financial condition and/or investment strategy, we are of the opinion that the Subscription Price is fair and reasonable so far as the Independent Shareholders are concerned.

4. Underwriting arrangement and the Connected Transaction

Pursuant to the Underwriting Agreement, LIL has (in addition to his obligations under the Irrevocably Undertaking) conditionally agreed to underwrite 8,762,700,169 Rights Shares; whereas Kingston Securities has conditionally agreed to underwrite 3,877,454,361 Rights Shares. In accordance with the terms of the Underwriting Agreement, Kingston Securities will, at or before the Latest Time for Termination, notify the Company and LIL in writing for such number of untaken Rights Shares that LIL would need to subscribe for pursuant to its underwriting commitment under the Underwriting Agreement. Kingston Securities will subscribe for the remaining untaken Rights Shares not covered by LIL.

Pursuant to the Underwriting Agreement, 2.5% of the aggregate Subscription Price in respect of the maximum number of Underwritten Shares underwritten by Kingston Securities (the ‘‘Kingston Commission’’) is payable to Kingston Securities; while 2.0% of the aggregate Subscription Price in respect of the Underwritten Shares underwritten by LIL (the ‘‘LIL Commission’’) is payable to LIL. As aforementioned, payment of the underwriting commission by the Company to LIL constitutes a connected transaction for the Company.

From the table under the sub-section headed ‘‘Comparison with other rights issue exercises’’ of this letter, we noted that both of the Kingston Commission and the LIL Commission fall within (i) the range of commissions of nil to 3.5% received by underwriters in other rights issue exercises; and (ii) the range of commissions of nil to 3% received by underwriters in other rights issue exercises which involved connected person(s) as underwriter(s). Accordingly, we are of the opinion that the Kingston Commission and the LIL Commission are in line with market practice.

5. Application for excess Rights Shares

With reference to the Board Letter, Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements of the Non-Qualifying Shareholders and for any Rights Shares provisionally allotted but not accepted. Applications for excess Rights Shares may be made by completing the EAFs for application for excess Rights Shares and lodging the same with a separate remittance for the excess Rights Shares being applied for. The Directors will allocate the excess Rights Shares at their discretion on a pro-rata basis in proportion to the number of excess Rights Shares being applied for under

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LETTER FROM GRAM CAPITAL

each application. No reference will be made to the Rights Shares comprised in applications by PALs or the number of Consolidated Shares held by the Qualifying Shareholders. No preference will be given to topping up odd lots to whole board lots.

Taking into account the above principal terms of the Rights Issue and the Underwriting Agreement, we consider that the terms of the Rights Issue and the Underwriting Agreement (including the Connected Transaction) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

6. Possible dilution of the shareholding interests of the existing public Shareholders

All Qualifying Shareholders are entitled to subscribe for the Rights Shares. For those Qualifying Shareholders who take up their entitlements in full under the Rights Issue, their shareholding interests in the Company will remain unchanged after the Rights Issue.

As in all other cases of rights issues and open offers, dilution on the shareholdings of those Qualifying Shareholders who do not take up in full their assured entitlements under the Rights Issue is inevitable. Nonetheless, Qualifying Shareholders who do not accept the Rights Issue can, subject to the then prevailing market conditions, consider selling their nil-paid rights to subscribe for the Rights Shares in the market. In such case, where all Qualifying Shareholders do not accept the Rights Issue and hence the Underwriters are obligated to take up the unsubscribed Rights Shares, the shareholding interests of the Qualifying Shareholders in the Company will be diluted by a maximum of approximately 61.46 percent point. Details of such dilution effect are presented in the table under the section headed ‘‘Shareholding structure of the Company’’ in the Board Letter.

We are aware of the potential dilution effects as just mentioned. Nonetheless, we consider that the foregoing should be balanced against by the following factors:

. Independent Shareholders are given the chances to express their views on the terms of the Rights Issue and the Underwriting Agreement through their votes at the SGM;
. Qualifying Shareholders have their choices of whether to accept the Rights Issue or not;
. Qualifying Shareholders have the opportunity to realise their nil-paid rights to subscribe for the Rights Shares in the market;
. the Rights Issue offers the Qualifying Shareholders a chance to subscribe for their pro-rata Rights Shares for the purpose of maintaining their respective existing shareholding interests in the Company at a relatively low price as compared to the historical and prevailing market prices of the Existing Shares; and
. those Qualifying Shareholders who choose to accept the Rights Issue in full can maintain their respective existing shareholding interests in the Company after the Rights Issue.

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LETTER FROM GRAM CAPITAL

In light of the above, we concur with the Directors that the potential dilution to the shareholding interests of the existing public Shareholders in the Company, which may only happen when the Qualifying Shareholders do not subscribe for their pro-rata Rights Shares, is acceptable.

7. Possible financial effects of the Rights Issue

Effect on net tangible assets

An unaudited pro forma statement of adjusted consolidated net tangible asset value (‘‘NTAV’’) of the Group as if the Rights Issue had taken place on 31 December 2014 is set out in Appendix II to the Circular (the ‘‘Statement’’).

Based on the Statement, the audited consolidated NTAV of the Group was approximately HK$3,837,821,000 and approximately HK$0.21 per Share prior to the Share Consolidation and the Rights Issue as at 31 December 2014. Upon implementation of the Share Consolidation and completion of the Rights Issue, the unaudited pro forma consolidated NTAV of the Group would become approximately HK$10,283,823,000 and approximately HK$0.50 per Consolidated Share based on the Statement.

Effect on working capital

As advised by the Directors, as part of the net proceeds from the Rights Issue will be used as working capital of the Group, the working capital position of the Group would be improved upon completion of the Rights Issue.

It should be noted that the aforementioned analyses are for illustrative purpose only and do not purport to represent how the financial position of the Group will be upon completion of the Rights Issue.

RECOMMENDATION ON THE RIGHTS ISSUE AND THE CONNECTED TRANSACTION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Rights Issue and the Underwriting Agreement (including the Connected Transaction) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the Rights Issue is in the interests of the Company and the Shareholders as a whole although it is not conducted in the ordinary and usual course of business of the Group. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the SGM to approve the Rights Issue and the Underwriting Agreement (including the Connected Transaction) and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

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LETTER FROM GRAM CAPITAL

(II) THE WHITEWASH WAIVER

According to the Board Letter, the underwriting by LIL of the Underwritten Shares under Rights Issue will trigger an obligation of the Concert Party Group to make a mandatory general offer under Rule 26 of the Takeovers Code for all the securities of the Company not already owned or agreed to be acquired by the Concert Party Group, unless a waiver is granted by the Executive.

In this regard, application has been made by LIL for the Whitewash Waiver to the Executive pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code, to waive the obligations of the Concert Party Group to make such a mandatory general offer. Pursuant to the Takeovers Code, the Whitewash Waiver will be conditional on, among other things, the approval of the Independent Shareholders at the SGM by way of poll in accordance with the requirements of the Takeovers Code. If the Whitewash Waiver is not granted by the Executive or if the conditions (if any) imposed thereon are not fulfilled, the Rights Issue will not proceed.

If the Whitewash Waiver is approved by the Independent Shareholders, the shareholding of the Concert Party Group will exceed 50%. The Concert Party Group may further increase its shareholdings in the Company without incurring any further obligations under Rule 26 of the Takeovers Code to make a general offer.

In light of (i) the reasons for the Rights Issue and the intended use of the net proceeds therefrom; and (ii) the terms of the Rights Issue and the Underwriting Agreement being fair and reasonable so far as the Independent Shareholders are concerned, we are of the opinion that the approval for the Whitewash Waiver, which is a condition for completion of the Rights Issue, is in the interests of the Company and the Shareholders as a whole and is fair and reasonable for the purpose of proceeding with the Rights Issue.

RECOMMENDATION ON THE WHITEWASH WAIVER

Having taken into consideration the reasons for and possible benefits of the Rights Issue and that the Rights Issue is conditional upon the grant of the Whitewash Waiver, we consider that the Whitewash Waiver is fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the SGM to approve the Whitewash Waiver and we recommend the Independent Shareholders to vote in favour of the resolution in this regard.

Yours faithfully, For and on behalf of Gram Capital Limited Doris Sing Director

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. SUMMARY OF FINANCIAL INFORMATION

The following is the summary of the consolidated financial information of the Group for the three financial years ended 31 December 2012, 2013 and 2014 which were extracted from the Company’s 2012, 2013 and 2014 annual reports respectively. The financial information of the Group (i) for the year ended 31 December 2012 has been disclosed on pages 32 to 112 of the annual report of the Company for the year ended 31 December 2012 published on 19 April 2013; (ii) for the year ended 31 December 2013 has been disclosed on pages 52 to 144 of the annual report of the Company for the year ended 31 December 2013 published on 28 April 2014; and (iii) for the year ended 31 December 2014 has been disclosed on pages 61 to 162 of the annual report of the Company for the year ended 31 December 2014 published on 28 April 2015. All the above reports of the Company have been published on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (http://www.582.com.hk).

RESULTS Continuing operations Revenue Loss before tax Income tax credit (expense) Loss for the year from discontinued operation Loss for the year attributable to: Owners of the Company Non-controlling interest Loss per share — basic — diluted Dividends Dividends per share	Year 2012 HK$’000 156,265 (240,674) 1,924 (83,962) (303,948) (18,764) (322,712) HK(19.0) cents HK(19.0) cents — —	ended 31 December 2013 2014 HK$’000 HK$’000 181,075 223,318 (138,626) (344,155) (3,571) 1,499 — — (137,147) (293,677) (5,050) (48,979) (142,197) (342,656) (Restated) HK(2.89) cents HK(1.76) cents HK(2.89) cents HK(1.76) cents — — — —

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

ASSETS AND LIABILITIES Total assets Total liabilities Net assets Equity attributable to owners of the Company Non-controlling interests Total equity	At 31 December 2012 2013 2014 HK$’000 HK$’000 HK$’000 492,870 1,572,258 5,893,237 (160,774) (730,752) (1,382,151) 332,096 841,506 4,511,086 254,018 768,484 3,911,132 78,078 73,022 599,954 332,096 841,506 4,511,086

The consolidated financial statements of the Company for the years ended 31 December 2012, 2013 and 2014 were audited by Zenith CPA Limited. No qualification was made by the auditors of the Company in respect of the audited consolidated financial statements of the Company for the years ended 31 December 2012, 2013 and 2014.

The Group did not have any items which are exceptional because of size, nature or incidence for each of the years ended 31 December 2012, 2013 and 2014.

2. AUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is the full text of the audited consolidated financial statements of the Group for the year ended 31 December 2014 as extracted from the annual report of the Company for the year ended 31 December 2014:

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Statement of Profit or Loss Year ended 31 December 2014

Notes REVENUE 5 Cost of sales Gross profit Other income and gains 6 Gains on deemed disposal of subsidiaries 7 Distribution and selling expenses Administrative expenses Impairment of goodwill 18 Impairment of trade and other receivables, net Non-cash share option expenses Finance costs 8 Share of profits and losses of: Joint ventures Associate LOSS BEFORE TAX 9 Income tax credit/(expense) 12 LOSS FOR THE YEAR Attributable to: Equity holders of the Company 13 Non-controlling interests LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY 15 For loss for the year — Basic and diluted	2014 HK$’000 223,318 (211,299) 12,019 40,486 20,422 (12,572) (312,854) (59,000) (8,313) (3,974) (20,369) — — (344,155) 1,499 (342,656) (293,677) (48,979) (342,656) HK(1.76) cents	2013 HK$’000 (Re-presented) 181,075 (143,371) 37,704 4,595 — (7,745) (77,126) — (525) — (95,529) — — (138,626) (3,571) (142,197) (137,147) (5,050) (142,197) (Restated) HK(2.89) cents

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Statement of Comprehensive Income Year ended 31 December 2014

Notes LOSS FOR THE YEAR OTHER COMPREHENSIVE (LOSS)/INCOME Other comprehensive (loss)/income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations Deconsolidation of subsidiaries Share of other comprehensive income of: Joint ventures Associate Net other comprehensive (loss)/income to be reclassified to profit or loss in subsequent periods and other comprehensive (loss)/income for the year, net of tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR Attributable to: Equity holders of the Company 13 Non-controlling interests	2014 HK$’000 (342,656) (121,052) 74,277 — — (46,775) (389,431) (326,167) (63,264) (389,431)	2013 HK$’000 (142,197) 14,910 — — — 14,910 (127,287) (122,231) (5,056) (127,287)

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Statement of Financial Position

31 December 2014

Notes NON-CURRENT ASSETS Property, plant and equipment 16 Prepaid lease payments 17 Goodwill 18 Intangible assets 19 Interests in joint ventures 20 Investment in an associate 21 Deposit paid for acquisition of land 22 Total non-current assets CURRENT ASSETS Inventories 23 Properties under development 24 Trade and other receivables 25 Tax recoverable Restricted cash 26 Cash and bank balances 26 Total current assets CURRENT LIABILITIES Trade and other payables 27 Deferred revenue 28 Interest-bearing bank and other borrowings 30 Due to the ultimate holding company 31 Due to a related company 32 Finance lease payables 34 Tax payables Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES	2014 HK$’000 1,192,028 15,494 16,135 57,176 876,132 — — 2,156,965 61,631 1,578,803 427,229 2,284 10,658 1,655,667 3,736,272 389,614 84 89,676 — — 66,091 — 545,465 3,190,807 5,347,772	2013 HK$’000 187,568 15,975 75,135 66,431 — — 99,880
		444,989
		65,423 658,434 137,456 — — 265,956
		1,127,269
		128,475 256 97,222 370,009 123,273 — 3,236
		722,471
		404,798
		849,787

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Due to a non-controlling interest 33 Deferred tax liabilities 36 Finance lease payables 34 Total non-current liabilities Net assets EQUITY Share capital 37 Reserves Equity attributable to owners of the Company Non-controlling interests Total equity	2014 HK$’000 5,347,772 598,826 6,280 231,580 836,686 4,511,086 186,963 3,724,169 3,911,132 599,954 4,511,086	2013 HK$’000 849,787
		— 8,281 —
		8,281
		841,506
		94,443 674,041
		768,484 73,022
		841,506

– I-6 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Statement of Changes in Equity Year ended 31 December 2014

			Attributable to own	Attributable to own	ers of the Company	ers of the Company				Non- controlling interests HK$’000 78,078 (5,050) (6)	Total equity HK$’000 332,096 (142,197 14,910
Issued capital HK$’000 191,002 — —	Share premium HK$’000 88,679 — —	Contributed surplus HK$’000 (note a) — — —	Convertible bond equity reserve HK$’000 — — —	Translation reserve HK$’000 11,029 — 14,916	Non-cash share option reserve HK$’000 — — —	Non- distributable reserve HK$’000 (note b) 2,552 — —	Other reserve HK$’000 (note c) — — —	Accumulated losses HK$’000 (39,244) (137,147) —	Total HK$’000 254,018 (137,147) 14,916
— — 75,343 (171,902)	— — 561,354 —	— — — 171,902	— 86,697 (86,697) —	14,916 — — —	— — — —	— — — —	— — — —	(137,147) — — —	(122,231) 86,697 550,000 —	(5,056) — — —	(127,287 86,697 550,000 —
94,443 — — —										73,022 (48,979) (14,285) —	841,506 (342,656 (121,052 74,277
— — 47,221 — 30,700 14,599 —	— — 1,369,419 (14,374) 1,236,300 773,723 —	— — — — — — —	— — — — — — —	(32,490) — — — — — —	— — — — — — 3,974	— — — — — — —	— 7,253 — — — — —	(293,677) — — — — — —	(326,167) 7,253 1,416,640 (14,374) 1,267,000 788,322 3,974	(63,264) 590,196 — — — — —	(389,431 597,449 1,416,640 (14,374 1,267,000 788,322 3,974
186,963										599,954	4,511,086

These reserve amounts comprise the consolidated reserves of approximately HK$3,724,169,000 (2013: HK$674,041,000) in the consolidated statement of financial position.

– I-7 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes:

(a) Contributed surplus of the Group was arisen from the Company’s capital reorganisation on 19 April 2013.
(b) The non-distributable reserve of the Group mainly represents statutory reserve requirement that the foreign investment enterprises appropriated 10% of the profit after taxation of the subsidiaries of the Company registered in the People’s Republic of China (the ‘‘PRC’’) other than Hong Kong to the nondistributable reserve under the PRC laws and regulations until the transferred amount equals to 50% of the registered capital of these PRC subsidiaries.
(c) The other reserve in an amount of approximately HK$7,253,000 recognised during the year, represents the difference between the fair value of the consideration received from share subscription of Landing Jeju Development Co., Ltd. and the carrying amount of the net assets attributable to the partial disposal of 50% of its equity interest.

– I-8 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Statement of Cash Flows

Year ended 31 December 2014

Notes CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments for: Fair value gain on financial asset and liabilities at fair value through profit and loss, net 6 Interest income 6 Gain on deemed disposal of subsidiaries 7 Gain on disposal of subsidiaries 6 Impairment of goodwill Impairment of trade and other receivables, net 9 Finance costs 8 Amortisation of prepaid lease payments 9 Amortisation of intangible assets 9 Depreciation of property, plant and equipment 9 Loss on disposal of property, plant and equipment 9 Non-cash share option expenses 9 Decrease/(increase) in inventories Increase in properties under development Decrease/(increase) in trade and other receivables Increase in trade and other payables Increase in restricted cash Decrease in deferred revenue Cash used in operations Interest received Interest paid PRC profits tax paid Net cash flows used in operating activities	2014 HK$’000 (344,155) (25,645) (11,478) (20,422) — 59,000 8,313 20,369 398 8,333 34,864 1,113 3,974 (265,336) 2,243 (910,067) 222,364 215,394 (10,658) (172) (746,232) 11,478 (30,671) (6,079) (771,504)	2013 HK$’000 (138,626) — (198) — (75) — 525 95,529 403 8,423 12,335 147 — (21,537) (5,415) (65,120) (60,132) 9,207 — (541) (143,538) 198 (5,484) (840) (149,664)

– I-9 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes CASH FLOWS FROM INVESTING ACTIVITIES Purchase of items of property, plant and equipment (note) Proceeds from disposal of items of property, plant and equipment Deposit paid for acquisition of land Net cash (outflow)/inflow from acquisition of assets and liabilities 39 Cash inflow from disposal of subsidiaries Cash outflow from deemed disposal of subsidiaries 40 Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceed from issue of share capital 37 Loan from the ultimate holding company Repayment of finance lease payables Repayment of loan from ultimate holding company Loan from non-controlling interests Capital injection from non-controlling interests Repayment from joint ventures Share issue expenses Loan (repayment to)/from a related company Repayment to loan from government New bank and other borrowings Repayment of bank and other borrowings Net cash flows from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of the year Effect of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF THE YEAR AND REPRESENTED BY CASH AND BANK BALANCES	2014 HK$’000 (936,914) 292 — (226,329) — (50,599) (1,213,550) 2,683,640 223,991 (33,046) (594,000) 552,149 597,449 125,000 (14,374) (123,273) — 102,251 (108,591) 3,411,196 1,426,142 265,956 (36,431) 1,655,667	2013 HK$’000 (53,555) 1,256 (99,880) 151 99 — (151,929) — 370,009 — — — — — — 123,273 (7,056) 110,030 (89,656) 506,600 205,007 49,259 11,690 265,956

Note: During the year, the Group entered into finance lease arrangements in respect of property, plant and equipment with a total capital value at the inception of the lease of approximately HK$41,496,000 (2013: Nil).

– I-10 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. CORPORATE INFORMATION

Landing International Development Limited (the ‘‘Company’’) is a limited liability company incorporated in the Cayman Islands and continued in Bermuda, and its shares of which are listed on The Main Board of Stock Exchange of Hong Kong. The registered office of the Company is located at Suites 5801–04, 58th Floor, Two International Finance Centre, No. 8 Finance Street, Central, Hong Kong.

During the year, the Company and its subsidiaries (together, the ‘‘Group’’) was principally engaged in design, manufacturing and sales of the light-emitting diode (‘‘LED’’) (the ‘‘Lighting Business’’); property development (the ‘‘Property Development’’); development and operation of the integrated resort (the ‘‘Integrated Resort Development’’); and casino business carried under a casino license (the ‘‘Casino Business’’).

2. BASIS OF PRESENTATION

In the preparation of the Group’s financial statements for the year ended 31 December 2014, the directors of the Company have given careful consideration to the future liquidity of the Group in light of (i) the Group incurred a loss attributable to equity holders of the Company of approximately HK$293,677,000 for the year ended 31 December 2014; and (ii) as at 31 December 2014, the Group has capital commitments of approximately HK$655,887,000, interest-bearing bank and other borrowings of approximately HK$89,676,000, amount due to a non-controlling interest of approximately HK$598,826,000 and finance lease payables of approximately HK$297,671,000. Based on the cash flow projections prepared by the management with reference to the current business and financing plans of the Group, the directors consider the Group will be able to finance its future working capital and fulfill its financial obligations as and when they fall due in the foreseeable future.

Accordingly, the consolidated financial statements have been prepared on the going concern basis.

3.1 BASIS OF PREPARATION

These financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (‘‘HKFRSs’’) (which include all 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 accounting principles generally accepted in Hong Kong. These financial statements also comply with the applicable disclosure requirements of the Hong Kong Companies Ordinance relating to the preparation of financial statements, which for this financial year and the comparative period continue to be those of the predecessor Companies Ordinance (Cap. 32), in accordance with transitional and saving arrangements for Part 9 of the Hong Kong Companies Ordinance (Cap. 622), ‘‘Accounts and Audit’’, which are set out in sections 76 to 87 of Schedule 11 to that Ordinance. These financial statements have been prepared under the historical cost convention, except for certain of financial instruments, which have been measured at fair value. These financial statements are presented in Hong Kong dollars (‘‘HK$’’) and all values are rounded to the nearest thousand except when otherwise indicated.

Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year ended 31 December 2014. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the Company and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

– I-11 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control described in the accounting policy for subsidiaries below. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

3.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group has adopted the following revised standards and a new interpretation for the first time for the current year’s financial statements.

Amendments to HKFRS 10, HKFRS 12	Investment Entities
and HKAS 27 (2011)
Amendments to HKAS 32	Offsetting Financial Assets and Financial Liabilities
Amendments to HKAS 39	Novation of Derivatives and Continuation of Hedge
	Accounting
HK(IFRIC)-Int 21	Levies
Amendment to HKFRS 2 included in	Definition of Vesting Condition1
Annual Improvements 2010–2012 Cycle
Amendment to HKFRS 3 included in	Accounting for Contingent Consideration in a Business
Annual Improvements 2010–2012 Cycle	Combination1
Amendment to HKFRS 13 included in	Short-term Receivables and Payables
Annual Improvements 2010–2012 Cycle
Amendment to HKFRS 1 included in	Meaning of Effective HKFRSs
Annual improvements 2011–2013 Cycle

1 Effective from 1 July 2014

Except for the amendment to HKFRS 1 which is only relevant to an entity’s first HKFRS financial statements, the nature and the impact of each amendment and interpretation is described below:

(a) Amendments to HKFRS 10 include a definition of an investment entity and provide an exception to the consolidation requirement for entities that meet the definition of an investment entity. Investment entities are required to account for subsidiaries at fair value through profit or loss rather than consolidated them. Consequential amendments were made to HKFRS 12 and HKAS 27 (2011). The amendments to HKFRS 12 also set out the disclosure requirements for investment entities. The amendments have had no impact on the Group as the Company does not qualify as an investment entity as defined in HKFRS 10.
(b) The HKAS 32 Amendments clarify the meaning of ‘‘currently has a legally enforceable right to set off’’ for offsetting financial assets and financial liabilities. The amendments also clarify the application of the offsetting criteria in HKAS 32 to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The amendments have had no impact on the Group as the Group does not have any offsetting arrangement.
(c) The HKAS 39 Amendments provide an exception to the requirement of discontinuing hedge accounting in situations where over-the-counter derivatives designated in hedging relationships are directly or indirectly, novated to a central counterparty as a consequence of laws or regulations, or the introduction of laws or regulations. For continuance of hedge accounting under this exception, all of the following criteria must be met: (i) the novations must arise as a consequence of laws or regulations, or the introduction of laws or regulations; (ii) the parties to

– I-12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

the hedging instrument agree that one or more clearing counterparties replace their original counterparty to become the new counterparty to each of the parties; and (iii) the novations do not result in changes to the terms of the original derivative other than changes directly attributable to the change in counterparty to achieve clearing. The amendments have had no impact on the Group as the Group has not novated any derivatives during the current and prior years.

(d) HK(IFRIC)-Int 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment, as identified by the relevant legislation, occurs. The interpretation also clarifies that a levy liability is accrued progressively only if the activity that triggers payment occurs over a period of time, in accordance with the relevant legislation. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be recognised before the specified minimum threshold is reached. The interpretation has had no impact on the Group as the Group applied, in prior years, the recognition principles under HKAS 37 Provisions, Contingent Liabilities and Contingent Assets which for the levies incurred by the Group are consistent with the requirements of HK(IFRIC)-Int 21.
(e) The HKFRS 2 Amendment clarifies various issues relating to the definitions of performance and service conditions which are vesting conditions, including (i) a performance condition must contain a service condition, (ii) a performance target must be met while the counterparty is rendering service; (iii) a performance target may relate to the operations or activities of an entity, or to those of another entity in the same group; (iv) a performance condition may be a market or non-market condition; and (v) if the counterparty, regardless of the reason, ceases to provide service during the vesting period, the service condition is not satisfied. The amendment has had no impact on the Group.
(f) The HKFRS 3 Amendment clarifies that contingent consideration arrangements arising from a business combination that are not classified as equity should be subsequently measured at fair value through profit or loss whether or not they fall within the scope of HKFRS 9 or HKAS 39. The amendment has had no impact on the Group.
(g) The HKFRS 13 Amendment clarifies that short-term receivables and payables with no stated interest rates can be measured at invoice amounts when the effect of discounting is immaterial. The amendment has had no impact on the Group.

3.3 NEW AND REVISED HKFRSS AND NEW DISCLOSURE REQUIREMENTS UNDER THE HONG KONG COMPANIES ORDINANCE NOT YET ADOPTED

The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these financial statements.

Amendments to HKAS 1 Disclosure Initiative[2] HKFRS 9 Financial Instruments[4] Amendments to HKFRS 10 and Sale or Contribution of Assets between an Investor and its HKAS 28 (2011) Associate or Joint Venture[2] Amendments to HKFRS 10, HKFRS 12 Investment Entities: Applying the Consolidation and HKAS 28 (2011) Exception[2] Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint Operations[2] HKFRS 14 Regulatory Deferral Accounts[5] HKFRS 15 Revenue from Contracts with Customers[3] Amendments to HKAS 16 and HKAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation[2] Amendments to HKAS 16 and HKAS 41 Agriculture: Bearer Plants[2] Amendments to HKAS 19 Defined Benefit Plans: Employee Contributions[1] Amendments to HKAS 27 (2011) Equity Method in Separate Financial Statements[2] Annual Improvements 2010–2012 Cycle Amendments to a number of HKFRSs[1] Annual Improvements 2011–2013 Cycle Amendments to a number of HKFRSs[1] Annual Improvements 2012–2014 Cycle Amendments to a number of HKFRSs[2]

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1 Effective for annual periods beginning on or after 1 July 2014
2 Effective for annual periods beginning on or after 1 January 2016 3 Effective for annual periods beginning on or after 1 January 2017
4 Effective for annual periods beginning on or after 1 January 2018
5 Effective for an entity that first adopts HKFRSs for its annual financial statements beginning on or after 1 January 2016 and therefore is not applicable to the Group

In addition, the Hong Kong Companies Ordinance (Cap. 622) will affect the presentation and disclosure of certain information in the consolidated financial statements for the year ending 31 December 2015. The Group is in the process of making an assessment of the impact of these changes.

Further information about those HKFRSs that are expected to be applicable to the Group is as follows:

The amendments to HKAS 1 are designed to further encourage companies to apply professional judgement in determining what information to disclose in their financial statements. For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that companies should use professional judgement in determining where and in what order information is presented in the financial disclosures.

In September 2014, the HKICPA issued the final version of HKFRS 9, bringing together all phases of the financial instruments project to replace HKAS 39 and all previous versions of HKFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge accounting. The Group expects to adopt HKFRS 9 from 1 January 2018. The Group expects that the adoption of HKFRS 9 will have an impact on the classification and measurement of the Group’s financial assets. Further information about the impact will be available nearer the implementation date of the standard.

The amendments to HKFRS 10 and HKAS 28 (2011) address an inconsistency between the requirements in HKFRS 10 and in HKAS 28 (2011) in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require a full recognition of a gain or loss when the sale or contribution of assets between an investor and its associate or joint venture constitutes a business. For a transaction involving assets that do not constitute a business, a gain or loss resulting from the transaction is recognised in the investor’s profit or loss only to the extent of the unrelated investor’s interest in that associate or joint venture. The amendments are to be applied prospectively. The Group expects to adopt the amendments from 1 January 2016.

The narrow-scope amendments to HKFRS 10, HKFRS 12 and HKAS 28 (2011) introduce clarifications to the requirements when accounting for investment entities. The amendments also provide relief in particular circumstances, which will reduce the costs of applying the standards.

The amendments to HKFRS 11 require that an acquirer of an interest in a joint operation in which the activity of the joint operation constitutes a business must apply the relevant principles for business combinations in HKFRS 3. The amendments also clarify that a previously held interest in a joint operation is not remeasured on the acquisition of an additional interest in the same joint operation while joint control is retained. In addition, a scope exclusion has been added to HKFRS 11 to specify that the amendments do not apply when the parties sharing joint control, including the reporting entity, are under common control of the same ultimate controlling party. The amendments apply to both the acquisition of the initial interest in a joint operation and the acquisition of any additional interests in the same joint operation. The amendments are not expected to have any impact on the financial position or performance of the Group upon adoption on 1 January 2016.

HKFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. Under HKFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in HKFRS 15 provide a more structured approach for measuring and recognising revenue. The standard also introduces extensive qualitative and quantitative disclosure requirements, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

between periods and key judgements and estimates. The standard will supersede all current revenue recognition requirements under HKFRSs. The Group expects to adopt HKFRS 15 on 1 January 2017 and is currently assessing the impact of HKFRS 15 upon adoption.

Amendments to HKAS 16 and HKAS 38 clarify the principle in HKAS 16 and HKAS 38 that revenue reflects a pattern of economic benefits that are generated from operating business (of which the asset is part) rather than the economic benefits that are consumed through the use of the asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets. The amendments are to be applied prospectively. The amendments are not expected to have any impact on the financial position or performance of the Group upon adoption on 1 January 2016 as the Group has not used a revenue-based method for the calculation of depreciation of its noncurrent assets.

The Annual Improvements to HKFRSs 2010–2012 Cycle issued in January 2014 sets out amendments to a number of HKFRSs. Except for those described in note 3.2, the Group expects to adopt the amendments from 1 January 2015. None of the amendments are expected to have a significant financial impact on the Group. Details of the amendment most applicable to the Group are as follows:

HKFRS 8 Operating Segments: Clarifies that an entity must disclose the judgements made by management in applying the aggregation criteria in HKFRS 8, including a brief description of operating segments that have been aggregated and the economic characteristics used to assess whether the segments are similar. The amendments also clarify that a reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reported to the chief operating decision maker.

HKAS 24 Related Party Disclosures: Clarifies that a management entity (i.e., an entity that provides key management personnel services) is a related party subject to related party disclosure requirements. In addition, an entity that uses a management entity is required to disclose the expenses incurred for management services.

The Annual Improvements to HKFRSs 2011–2013 Cycle issued in January 2014 sets out amendments to a number of HKFRSs. The Group expects to adopt the amendments from 1 January 2015. None of the amendments are expected to have a significant financial impact on the Group. Details of the amendments are as follows:

HKFRS 3 Business Combinations: Clarifies that joint arrangements but not joint ventures are outside the scope of HKFRS 3 and the scope exception applies only to the accounting in the financial statements of the joint arrangement itself. The amendment is to be applied prospectively.

HKFRS 13 Fair Value Measurement: Clarifies that the portfolio exception in HKFRS 13 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of HKFRS 9 or HKAS 39 as applicable. The amendment is to be applied prospectively from the beginning of the annual period in which HKFRS 13 was initially applied.

The Annual Improvements to HKFRSs 2012–2014 Cycle issued in October 2014 sets out amendments to a number of HKFRSs. The Group expects to adopt the amendments from 1 January 2016. None of the amendments are expected to have a significant financial impact on the Group. Details of the amendments are as follows:

HKAS 34 Interim Financial Reporting: Clarifies that the required interim disclosures must either be in the interim financial statements or incorporated by cross reference between the interim financial statements and wherever they are included within the interim financial report. The amendments also specify that the information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Subsidiaries

A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).

When the Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.

The results of subsidiaries are included in the Company’s statement of profit or loss to the extent of dividends received and receivable. The Company’s investments in subsidiaries are stated at cost less any impairment losses.

Investments in Associate and Joint Ventures

An associate is an entity in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

The Group’s investments in associate and joint ventures are stated in the consolidated statement of financial position at the Group’s share of net assets under the equity method of accounting, less any impairment losses.

Adjustments are made to bring into line any dissimilar accounting policies that may exist.

The Group’s share of the post-acquisition results and other comprehensive income of associate and joint ventures is included in the consolidated statement of profit or loss and consolidated other comprehensive income, respectively. In addition, when there has been a change recognised directly in the equity of the associate or joint venture, the Group recognises its share of any changes, when applicable, in the consolidated statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and its associate or joint ventures are eliminated to the extent of the Group’s investments in the associate or joint ventures, except where unrealised losses provide evidence of an impairment of the asset transferred. Goodwill arising from the acquisition of associate or joint ventures is included as part of the Group’s investments in associate or joint ventures.

The results of associate and joint ventures are included in the Company’s statement of profit or loss to the extent of dividends received and receivable. The Company’s investments in associate and joint ventures are treated as non-current assets and are stated at cost less any impairment losses.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of net assets in the event of liquidation at fair value or at the proportionate share of the acquiree’s identifiable net assets. All other components of non-controlling interests are measured at fair value. Acquisition-related costs are expensed as incurred.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of HKAS 39 is measured at fair value with changes in fair value either recognised in profit or loss or as a change to other comprehensive income. If the contingent consideration is not within the scope of HKAS 39, it is measured in accordance with the appropriate HKFRS. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any fair value of the Group’s previously held equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the fair value of the net assets acquired, the difference is, after reassessment, recognised in profit or loss as a gain on bargain purchase.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cashgenerating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on the disposal. Goodwill disposed of in these circumstances is measured based on the relative value of the operation disposed of and the portion of the cash-generating unit retained.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Fair Value Measurement

The Group measures its derivative financial instruments at fair value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, either directly or indirectly Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Impairment of Non-Financial Assets

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, properties under development, financial assets and goodwill), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cashgenerating unit to which the asset belongs.

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. 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 assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to the statement of profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset.

An assessment is made at the end of each reporting period as to whether there is an indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in the period in which it arises.

Related Parties

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 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 where 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 of a parent, subsidiary or fellow subsidiary of the other entity);
(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); and
(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).

Property, Plant and Equipment and Depreciation

Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the statement of profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly.

– I-19 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:

Freehold land Not depreciated Buildings Over the shorter of the lease terms or 50 years Leasehold improvements 4.5% to 20% Furnitures, fixtures and office equipment 18% to 20% Motor vehicles 10% to 25% Aircraft 5% Plant, machinery and equipment 4% to 18% Gaming equipment and accessories 20% Structure 33%

Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

An item of property, plant and equipment including any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in the statement of profit or loss in the year the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.

Construction in progress represents buildings or assets under construction which are stated at cost less any impairment losses, and are not depreciated. Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

Intangible Assets (other than Goodwill)

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value on the date of acquisition. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

Patents and licences

Purchased patents and licences with finite lives are stated at cost less any impairment losses and are amortised on the straight-line basis over their estimated useful lives of 8 to 18 years.

Leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases.

Assets acquired through hire purchase contracts of a financing nature are accounted for as finance leases, but are depreciated over their estimated useful lives.

Where the Group is the lessee, rentals payable under operating leases net of any incentives received from the lessor are charged to the statement of profit or loss on the straight-line basis over the lease terms.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Prepaid land lease payments under operating leases are initially stated at cost and subsequently recognised on the straight-line basis over the lease terms.

Properties under Development

Properties under development are intended to be held for sale after completion.

Properties under development are stated at the lower of cost and net realisable value and comprise land costs, construction costs, borrowing costs, professional fees and other costs directly attributable to such properties incurred during the development period.

Properties under development are classified as current assets unless the construction period of the relevant property development project is expected to complete beyond the normal operating cycle. On completion, the properties are transferred to completed properties held for sale.

Investments and Other Financial Assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as loans and receivables. When financial assets are recognised initially, they are measured at fair value plus transaction costs that are attributable to the acquisition of the financial assets, except in the case of financial assets recorded at fair value through profit or loss.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at fair value through profit or loss (‘‘FVTPL’’)

Financial assets at FVTPL include financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of sale in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments as defined by HKAS 39.

Financial assets at FVTPL are carried in the statement of financial position at fair value with positive net changes in fair value presented as other income and gains and negative net changes in fair value presented as finance costs in the statement of profit or loss. These net fair value changes do not include any dividends or interest earned on these financial assets. Financial assets designated upon initial recognition as at fair value through profit or loss are designated at the date of initial recognition and only if the criteria in HKAS 39 are satisfied.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated as at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in the statement of profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are subsequently measured at amortised cost using the effective interest rate method less any allowance for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and includes fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in other income and gains in the statement of profit or loss. The loss arising from impairment is recognised in the statement of profit or loss.

Derecognition of Financial Assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:

. the rights to receive cash flows from the asset have expired; or
. the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘‘pass-through’’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Impairment of Financial Assets

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that occurred after the initial recognition of the asset and that loss event have an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition).

The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group.

If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to other expenses in the statement of profit or loss.

Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowing, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, amounts due to the ultimate holding company, a related company and non-controlling interests, obligations under finance lease and interest-bearing bank and other borrowings.

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of repurchasing in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by HKAS 39. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss. The net fair value gain or loss recognised in the statement of profit or loss does not include any interest charged on these financial liabilities.

Financial liabilities designated upon initial recognition as at fair value through profit or loss are designated at the date of initial recognition and only if the criteria in HKAS 39 are satisfied.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in the statement of profit or loss.

Convertible bonds

The component of convertible bonds that exhibits characteristics of a liability is recognised as a liability in the statement of financial position, net of transaction costs. On issuance of convertible bonds, the fair value of the liability component is determined using a market rate for an equivalent nonconvertible bond; and this amount is carried as a long term liability on the amortised cost basis until extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in shareholders’ equity, net of transaction costs. The carrying amount of the conversion option is not remeasured in subsequent years. Transaction costs are apportioned between the liability and equity components of the convertible bonds based on the allocation of proceeds to the liability and equity components when the instruments are first recognised.

Derecognition of Financial Liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in the statement of profit or loss.

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average method and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

Cash and Cash Equivalents

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Group’s cash management.

– I-24 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, which are not restricted as to use.

Provisions

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in the statement of profit or loss.

Income Tax

Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

. when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
. in respect of taxable temporary differences associated with investments in subsidiaries, associate and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, the carryforward of unused tax credits and unused tax losses can be utilised, except:

. when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
. in respect of deductible temporary differences associated with investments in subsidiaries, associate and joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

– I-25 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Government Grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed.

Revenue Recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenue can be measured reliably, on the following bases:

(a) from the sale of goods, when the significant risks and rewards of ownership have been transferred to the buyer, provided that the Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold;
(b) interest income, on an accrual basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset; and
(c) casino revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognised for funds deposited by customers before gaming play occurs and for chips in customers’ possession.

Share-based Payments

The Company operates a share option scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations. Employees (including directors) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (‘‘equity-settled transactions’’).

The cost of equity-settled transactions with employees for grants is measured by reference to the fair value on the date at which they are granted.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period.

– I-26 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

Other Employee Benefits

Pension scheme

The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the ‘‘MPF Scheme’’) under the Mandatory Provident Fund Schemes Ordinance for all of its employees. Contributions are made based on a percentage of the employees’ basic salaries and are charged to the statement of profit or loss as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an independently administered fund. The Group’s employer contributions vest fully with the employees when contributed into the MPF Scheme.

The employees of the Group’s subsidiaries which operates in the PRC are required to participate in a central pension scheme operated by the local municipal government. These subsidiaries are required to contribute certain of its payroll costs to the central pension scheme. The contributions are charged to the statement of profit or loss as they become payable in accordance with the rules of the central pension scheme.

The employees of the Group’s subsidiaries which operates in South Korea are required to participate in a defined contribution is a pension plan under which the South Korea subsidiaries pays fixed contributions into a separate entity. The contributions are recognised as employee benefit expense when a employee has rendered service.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

– I-27 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Foreign Currencies

These financial statements are presented in Hong Kong dollars, which is the Company’s functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective functional currency rates prevailing on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rates of exchange ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items are recognised in the statement of profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates on the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates on the date when the fair value was measured. The gain or loss arising on translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation difference on the item whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss, respectively).

The functional currencies of certain overseas subsidiaries are currencies other than the Hong Kong dollar. As at the end of the reporting period, the assets and liabilities of these entities are translated into the presentation currency of the Company at the exchange rates prevailing at the end of the reporting period and their statements of profit or loss are translated into Hong Kong dollars at the weighted average exchange rates for the year.

The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the statement of profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

The major judgements, estimates and assumptions that have the most significant effect on the amounts recognised in the consolidated financial statements and have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below:

Recognition and Allocation of Construction Cost on Properties under Development

Development costs of properties are recorded as properties under development during the construction stage and will be transferred to completed properties held for sale upon completion. Apportionment of these costs will be recognised in the statement of profit or loss upon the recognition of the sale of the properties. Before the final settlement of the development costs and other costs relating to the sale of the properties, these costs are accrued by the Group based on management’s best estimate.

– I-28 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

When developing properties, the Group may divide the development projects into phases. Specific costs directly related to the development of a phase are recorded as the cost of such phase. Costs that are common to phases are allocated to individual phases based on the estimated saleable area of the entire project.

Where the final settlement of costs and the related cost allocation is different from the initial estimates, any increase or decrease in the development costs and other costs would affect the profit or loss in future years.

Impairment of Goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Impairment of Non-Financial Assets (other than Goodwill)

The Group assesses whether there are any indicators of impairment for all non-financial assets at the end of each reporting period. Indefinite life intangible assets are tested for impairment annually and at other times when such an indicator exists. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value of an asset or a cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The calculation of the fair value less costs to sell of disposal is based on available data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental costs for disposing of the asset. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

Net Realisable Value of Inventories

The Group reviews the carrying amounts of the inventories at the end of each reporting period to determine whether the inventories are carried at the lower of cost and net realisable value in accordance with the accounting policy as set out in note 3.4. Management estimates the net realisable value based on current market situation and historical experience of manufacturing and selling products of similar nature. Any change in the assumptions would increase or decrease the amount of inventories write down or the related reversals of write down made in prior years and affect the Group’s net asset value.

Impairment of Trade and Other Receivables

The Group makes impairment of trade and other receivables based on an assessment of the recoverability of the receivables. This assessment is based on the credit history of the customers and other debtors and the current market condition. The directors of the Company reassess the impairment at the end of each reporting period.

5. OPERATING SEGMENT INFORMATION

For management purpose, the Group currently has four reportable operating segments that operate different business activities. They are managed separately and providing different products or services which require different marketing strategies.

The principal activities of each reportable segment are as follows:

(a) Lighting Business;
(b) Property Development;

– I-29 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(d) Casino Business

Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment loss, which is a measure of adjusted loss before tax. The adjusted loss before tax is measured consistently with the Group’s loss before tax except that interest income, finance costs, gains on deemed disposal of subsidiaries, share of profits and losses of joint ventures and associate as well as head office and corporate income and expenses are excluded from such measurement.

Segment assets exclude cash and bank balances, tax recoverable, interests in joint ventures, investment in an associate and other unallocated head office and corporate assets as these assets are managed on a group basis.

Segment liabilities exclude tax payable, obligations under finance lease, interest-bearing bank and other borrowings, amounts due to the ultimate holding company, non-controlling interest and related company, deferred tax liabilities and other unallocated head office and corporate liabilities as these liabilities are managed on a group basis.

Year ended 31 December 2014

Segment revenue: Sales to external customers Segment results Interest income Gains on deemed disposal of subsidiaries Corporate and other unallocated expenses, net Finance costs Share of profits and losses of: Joint ventures Associate Loss before tax Income tax credit Loss for the year Segment assets Reconciliation: Corporate and other unallocated assets Total assets Segment liabilities Reconciliation: Corporate and other unallocated liabilities Total liabilities	Lighting Business HK$’000 201,951 (76,441) 393,637 92,614	Property Development HK$’000 — (8,369) 924,573 147,954	Integrated Resort Development HK$’000 — (94,972) 1,277,592 126,629	Casino Business HK$’000 21,367 (20,261) — —	Total HK$’000 223,318 (200,043) 11,478 20,422 (155,643) (20,369) — — (344,155) 1,499 (342,656) 2,595,802 3,297,435 5,893,237 367,197 1,014,954 1,382,151

– I-30 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Other segment information: Depreciation and amortisation Write-down of inventories to net realisable value Impairment of trade and other receivables, net Capital expenditure* Year ended 31 December 2013	Lighting Business HK$’000 12,178 10,805 8,313 13,294	Property Development HK$’000 254 — — 344	Integrated Resort Development HK$’000 6,180 — — 575,787	Casino Business HK$’000 192 — — 61,571	Total HK$’000 18,804 10,805 8,313 650,996

Segment revenue: Sales to external customers Segment results Interest income Corporate and other unallocated expenses, net Finance costs Loss before tax Income tax expense Loss for the year Segment assets Reconciliation: Corporate and other unallocated assets Total assets Segment liabilities Reconciliation: Corporate and other unallocated liabilities Total liabilities Other segment information: Depreciation and amortisation Write-down of inventories to net realisable value Impairment of trade and other receivables, net Capital expenditure*	Lighting Business HK$’000 181,075 (7,604) 453,113 76,501 10,522 7,110 286 3,927	Property Development HK$’000 — (12,526) 842,459 42,210 1,426 — 239 632,767	Total HK$’000 181,075
			(20,130 198 (23,165 (95,529
			(138,626 (3,571
			(142,197
			1,295,572 276,686
			1,572,258
			118,711 612,041
			730,752
			11,948 7,110 525 636,694

Capital expenditure consists of additions to property, plant and equipment and prepaid land lease payments and including assets from the acquisition of assets and liabilities.

– I-31 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Geographical Information

(a) Revenue from external customers

Mainland China Other countries	2014 HK$’000 115,602 107,716 223,318	2013 HK$’000 101,885 79,190
		181,075

The revenue information above is based on the locations of the customers.

(b) Non-current assets

Hong Kong Mainland China South Korea	2014 HK$’000 439,157 154,194 614,171 1,207,522	2013 HK$’000 5,939 155,716 41,888
		203,543

The non-current assets information above is based on the locations of the assets and excludes goodwill, intangible assets, interests in joint ventures, investment in an associate and deposit paid for acquisition of land.

Information about Major Customers

During the years ended 31 December 2014, one of the external customer who each contributed over 10% of the Group’s total revenue (2013: None). The total revenue earned from the customer amounted to approximately HK$24,108,000 (2013: Nil).

6. OTHER INCOME AND GAINS

An analysis of the Group’s other income and gains is as follows:

Bank interest income Gain on disposal of subsidiaries Government grant (note) Fair value gain on financial liabilities at FVTPL, net Others	2014 HK$’000 11,478 — 1,159 25,645 2,204 40,486	2013 HK$’000 198 75 2,106 — 2,216
		4,595

Note: There are no unfulfilled conditions or contingencies relating to government grant.

7. GAINS ON DEEMED DISPOSAL OF SUBSIDIARIES

The gains on deemed disposal of interests in subsidiaries during the year of approximately HK$20,422,000 arose from the dilution of the Group’s effective equity interest in Magical Gains Holdings Limited (‘‘Magical Gains’’) and its subsidiaries (together, the ‘‘Magical Gains Group’’) from 100% to 50% following the issuance of 100 new ordinary shares of Magical Gains to a subscriber on 23 December 2014.

– I-32 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Therefore, Magical Gains Group ceased to be subsidiaries and became joint ventures of the Group. Further details of the deconsolidation of subsidiaries are set out in note 40 to the consolidated financial statements.

8. FINANCE COSTS

Interests on: Bank and other borrowings Less: Interest capitalised Loan from government Finance lease payables Imputed interest on convertible bonds LOSS BEFORE TAX Notes The Group’s loss before tax is arrived at after charging/ (crediting): Auditor’s remuneration Cost of inventories sold Depreciation 16 Foreign exchange differences, net Amortisation of prepaid lease payments 17 Amortisation of intangible assets 19 Minimum lease payments under operating leases of land and buildings Impairment of trade and other receivables, net Write-down of inventories to net realisable value Loss on disposal of property, plant and equipment Research and development costs* Employee benefits expenses (excluding directors’ remuneration): Wages and salaries Pension scheme contributions Non-cash share option expenses Less: Amount capitalised	2014 HK$’000 63,066 (56,979) 6,087 — 14,282 — 20,369 2014 HK$’000 1,506 114,553 34,864 4,945 398 8,333 14,796 8,313 10,805 1,113 13,564 83,683 10,146 3,974 (28,353) 69,450	2013 HK$’000 11,619 (3,228) 8,391 441 — 86,697 95,529 2013 HK$’000 658 136,261 12,335 994 403 8,423 6,030 525 7,110 147 10,410 37,168 6,863 — — 44,031

LOSS BEFORE TAX
Included in ‘‘cost of sales’’ on the face of the consolidated statement of profit or loss.
** Included in ‘‘administrative expenses’’ on the face of the consolidated statement of profit or loss.

– I-33 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

10. DIRECTORS’ REMUNERATION

Directors’ remuneration for the year, disclosed pursuant to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the ‘‘SEHK’’) and section 78 of Schedule 11 to the Hong Kong Companies Ordinance (Cap. 622), with reference to section 161 of the predecessor Hong Kong Companies Ordinance (Cap. 32), is as follows:

2014 Executive directors: Yang Zhihui (‘‘Mr. Yang’’) Kong Fanbo (‘‘Mr. Kong’’) (note i) Zhou Xueyu (‘‘Ms. Zhou’’) Xu Ning (‘‘Ms Xu’’) Ren Shunying (‘‘Mr. Ren’’) (note ii) Lee Siu Woo (notes iii and iv) Ng Kwok Fai (‘‘Mr. Ng’’) (note v) Non-executive directors: Fok Ho Yin, Thomas (‘‘Mr. Fok’’) Chen Lei (‘‘Mr. Chen’’) Zhang Xiaolan (‘‘Ms. Zhang’’)	Fees HK$’000 7,467 172 1,573 1,573 62 327 4,150 15,324 153 180 180 513 15,837	Salaries, allowances and benefit in kind, pension scheme contribution HK$’000 9,352 — 198 497 16 — 14,200 24,263 — — — — 24,263	Total HK$’000 16,819 172 1,771 2,070 78 327 18,350
			39,587 153 180 180
			513
			40,100

– I-34 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2013 Executive directors: Hu Jun (note vi) Zhang Ying (note vi) Li Li (note vii) Zhang Yang (note vi) Jiang Zhiqian (note vi) Mr. Yang (note viii) Mr. Kong (note ix) Ms. Zhou (note ix) Mr. Xu (note x) Mr. Ren (note x) Non-executive directors: Mr. Fok Ng Hoi Yue (note vii) Chiang Chi Kin, Stephen (note vii) Mr. Chen (note x) Ms. Zhang (note x)	Fees HK$’000 145 145 181 145 — 1,084 285 285 178 178 2,626 100 75 75 45 45 340 2,966	Salaries, allowances and benefit in kind, pension scheme contribution HK$’000 — — — — — 2,414 908 — — — 3,322 — — — — — — 3,322	Total HK$’000 145 145 181 145 — 3,498 1,193 285 178 178
			5,948 100 75 75 45 45
			340
			6,288

Notes:

(i) Resigned on 27 March 2014
(ii) Resigned on 27 January 2014
(iii) Appointed on 20 January 2014
(iv) Resigned on 4 July 2014
(v) Appointed on 22 April 2014
(vi) Resigned on 9 August 2013
(vii) Resigned on 2 October 2013
(viii) Appointed on 19 July 2013
(ix) Appointed on 9 August 2013
(x) Appointed on 2 October 2013

– I-35 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

There was no arrangement under which a director waived or agreed to waive any remuneration during the years ended 31 December 2014 and 2013.

11. FIVE HIGHEST PAID EMPLOYEES

The five highest paid employees during the year included 4 directors (2013: 4 directors), details of whose remuneration are set out in note 10 above. Details of the remuneration for the year of the remaining 1 (2013: 1) highest paid employee who is neither a director nor chief executive of the Company are as follows:

Salaries, allowances and benefits in kind Pension scheme contributions	2014 HK$’000 3,333 11 3,344	2013 HK$’000 1,534 15
		1,549

The number of non-director highest paid employees whose remuneration fell within the following bands is as follows:

HK$1,500,001 to HK$2,000,000 HK$3,000,001 to HK$3,500,000	Number of employees 2014 2013 — 1 1 — 1 1	Number of employees 2014 2013 — 1 1 — 1 1
		1

12. INCOME TAX

No provision for Hong Kong profits tax had been made during the year ended 31 December 2014 as the Group did not generate any assessable profits arising in Hong Kong during that year (2013: Nil). Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates.

PRC Enterprise Income Tax — Current — Underprovision in prior years Deferred (note 36) Total tax (credit)/charge for the year	2014 HK$’000 559 — 559 (2,058) (1,499)	2013 HK$’000 943 303
		1,246 2,325
		3,571

– I-36 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

A reconciliation of the tax (credit)/expense applicable to loss before tax at the statutory rates of Hong Kong, where the Company is headquartered, is as follows:

Loss before tax Tax at Hong Kong profits tax rate of 16.5% Difference in tax rates of subsidiaries operating in other jurisdictions Expenses not deductible for tax Income not subject to tax Tax losses not recognised Underprovision in respect of prior years Others Income tax (credit)/expense	2014 HK$’000 (344,155) (56,785) (6,203) 62,072 (15,703) 17,285 — (2,165) (1,499)	2013 HK$’000 (138,626
		(22,873 (1,603 23,237 — 2,958 303 1,549
		3,571

13. LOSS ATTRIBUTABLE TO OWNERS OF THE COMPANY

The consolidated loss attributable to equity holders of the Company for the year ended 31 December 2014 included a loss of approximately HK$77,313,000 (2013: HK$108,687,000) which has been dealt with in the financial statements of the Company (note 46).

14. DIVIDEND

No dividend was paid or proposed for the years ended 31 December 2014 and 2013.

15. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY

The calculations of basic and diluted loss per share are based on:

Loss Loss attributable to ordinary equity holders of the Company, used in the basic and diluted loss per share calculation Number of shares Weighted average number of ordinary shares in issue during the year used in the basic and diluted loss per share calculation as adjusted for rights issue which was completed on 4 February 2014 (2013: as adjusted for the rights issue which was completed on 4 February 2014)	2014 2013 HK$’000 HK$’000 293,677 137,147 Number of shares 2014 2013 ’000 ’000 (Restated) 16,714,397 4,744,371	2013 HK$’000 137,147

In respect of the diluted loss per share amounts presented, no adjustment has been made to the basic loss per share amounts presented for the year ended 31 December 2014 as the impact of the share options outstanding during the year had either no dilutive effect or an anti-dilutive effect on the basic loss per share amounts presented.

– I-37 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

16. PROPERTY, PLANT AND EQUIPMENT

Freehold land HK$’000 23,020 —	Buildings HK$’000 92,520 (5,240)	Leasehold improvements HK$’000 4,784 (333)	Furniture, fixtures and office equipment HK$’000 6,144 (1,953)	Motor vehicles HK$’000 4,759 (1,919)	Aircraft HK$’000 — —	Plant, machinery and equipment HK$’000 87,294 (21,508)	Gaming equipment and accessories HK$’000 — —	Structure HK$’000 — —	Construction in progress HK$’000 — —	Total HK$’000 218,521 (30,953
23,020	87,280	4,451	4,191	2,840	—	65,786	—	—	—	187,568
23,020 420,844 — — — — — (16,243)	87,280 — — — — (4,276) 18,156 (2,220)	4,451 445 — (296) — (1,529) — —	4,191 20,789 2,083 (140) (7,912) (2,468) 2,707 (2,135)	2,840 19,846 — (252) — (3,479) — (176)	— 426,531 — — — (12,440) — —	65,786 12,170 — — — (9,848) — (817)	— 37,901 — (717) (35,739) (137) — (1,308)	— 8,349 — — — (687) — (282)	— 178,092 — — (13,182) — (20,863) (6,307)	187,568 1,124,967 2,083 (1,405 (56,833 (34,864 — (29,488
427,621	98,940	3,071	17,115	18,779	414,091	67,291	—	7,380	137,740	1,192,028
427,621 —	108,159 (9,219)	4,762 (1,691)	21,402 (4,287)	23,766 (4,986)	426,531 (12,440)	97,746 (30,455)	— —	8,041 (661)	137,739 —	1,255,767 (63,739
427,621	98,940	3,071	17,115	18,780	414,091	67,291	—	7,380	137,739	1,192,028
— —	74,589 (4,132)	76 (29)	2,539 (1,362)	2,400 (468)	— —	83,361 (13,301)	— —	— —	183 —	163,148 (19,292
—	70,457	47	1,177	1,932	—	70,060	—	—	183	143,856
— 23,020 — — — — —	70,457 17,690 — — (2,459) 40 1,552	47 4,784 — (47) (333) — —	1,177 3,387 502 (149) (724) — (2)	1,932 3,209 309 (1,207) (1,026) — (377)	— — — — — — —	70,060 1,465 — — (7,793) 143 1,911	— — — — — — —	— — — — — — —	183 — — — — (183) —	143,856 53,555 811 (1,403 (12,335 — 3,084
23,020	87,280	4,451	4,191	2,840	—	65,786	—	—	—	187,568
23,020 —	92,520 (5,240)	4,784 (333)	6,144 (1,953)	4,759 (1,919)	— —	87,294 (21,508)	— —	— —	— —	218,521 (30,953
23,020	87,280	4,451	4,191	2,840	—	65,786	—	—	—	187,568

– I-38 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The net carrying amounts of the Group’s fixed assets held under finance lease included in the amount of aircraft at 31 December 2014 amounted to approximately HK$414,090,000 (2013: Nil).

As at 31 December 2014, certain property, plant and equipment with a net carrying amount of the Group’s of approximately HK$116,292,000 (2013: HK$26,711,000) were pledged to secure general banking facilities granted to the Group (note 30).

17. PREPAID LEASE PAYMENTS

Carrying amount at 1 January Acquisition of assets and liabilities (note 39) Transfer to properties under development Amortisation during the year (note 9) Exchange realignment Carrying amount at 31 December Current portion included in trade and other receivables Non-current portion	2014 HK$’000 15,975 — — (398) 296 15,873 (379) 15,494	2013 HK$’000 16,343 590,086 (590,086) (403) 182 16,122 (147) 15,975

The leasehold land is situated in Mainland China and is held under a long term lease.

As at 31 December 2014, the Group’s prepaid lease payments with a net carrying amount of approximately HK$15,873,000 (2013: HK$16,122,000) were pledged to secure general banking facilities granted to the Group (note 30).

– I-39 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

18. GOODWILL

Goodwill of approximately HK$203,392,000 was related to the acquisition of Ace Winner Holdings Limited (‘‘Ace Winner’’) and its subsidiaries. Ace Winner is an investment holding company with an indirect 69.44% equity interest, held through its wholly-owned subsidiary, China Opto Investments Limited, in the issued share capital of Jiangsu Wenrun Optoelectronic Co., Ltd (‘‘Jiangsu Wenrun’’). Jiangsu Wenrun is principally engaged in the Lighting Business. Goodwill of approximately HK$203,392,000 was allocated to the cash-generating unit (the ‘‘CGU’’) for the Lighting Business.

At 1 January 2013:
Cost
Accumulated impairment
Net carrying amount
Cost at 1 January and 31 December 2013, net of accumulated impairment
At 31 December 2013:
Cost
Accumulated impairment
Net carrying amount
Cost at 1 January 2014, net of accumulated impairment
Impairment during the year
Cost and net carrying amount at 31 December 2014
At 31 December 2014:
Cost
Accumulated impairment
Net carrying amount

HK$’000
203,392
(128,257)
75,135
75,135
203,392
(128,257)
75,135
75,135
(59,000)
16,135
203,392
(187,257)
16,135

Impairment Testing of Goodwill

Goodwill acquired through business combinations is allocated to the lighting products CGU for the purpose of impairment testing.

The recoverable amount of the lighting products CGU has been determined based on a value in use calculation using cash flow projections based on financial budgets covering a five-year period approved by senior management. The key assumptions used in the cash flow projections are as follows:

Average gross margins of 23% (2013: 28%) and average revenue growth rate of 10% (2013: 14%) to reflect the deterioration of the Lighting Business with reference to the average performance in the previous years and the expected returns within the relevant industry;
Discount rate of 10.46% (2013: 12.55%) is used with reference to the current market data for the relevant industry and comparable companies; and
Terminal growth rate of 3.20% (2013: 3.22%) is used with reference to Mainland China’s average inflation rate in the past five years.

– I-40 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

19. INTANGIBLE ASSETS

31 December 2014 Cost at 1 January 2014, net of accumulated amortisation Acquisition of assets and liabilities (note 39) Deconsolidation of subsidiaries (note 40) Amortisation provided during the year (note 9) Exchange realignment At 31 December 2014 At 31 December 2014: Cost Accumulated amortisation Net carrying amount 31 December 2013 At 1 January 2013: Cost Accumulated amortisation Net carrying amount Cost at 1 January 2013, net of accumulated amortisation Amortisation provided during the year (note 9) Exchange realignment At 31 December 2013 At 31 December 2013: Cost Accumulated amortisation Net carrying amount	Patents HK$’000 37,008 — — (2,806) (514) 33,688 44,213 (10,525) 33,688 43,540 (4,838) 38,702 38,702 (2,837) 1,143 37,008 44,835 (7,827) 37,008	Trademarks HK$’000 29,423 — — (5,527) (408) 23,488 44,213 (20,725) 23,488 43,540 (9,522) 34,018 34,018 (5,586) 991 29,423 44,835 (15,412) 29,423	Casino license HK$’000 — 872,299 (815,696) — (56,603) — — — — — — — — — — — — — —	Total HK$’000 66,431 872,299 (815,696) (8,333) (57,525) 57,176 88,426 (31,250) 57,176 87,080 (14,360) 72,720 72,720 (8,423) 2,134 66,431 89,670 (23,239) 66,431

As at 31 December 2014, the Group’s patents with a net carrying amount of approximately HK$33,688,000 (2013: HK$37,008,000) were pledged to secure general banking facilities granted to the Group (note 30).

– I-41 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

20. INTERESTS IN JOINT VENTURES

2014 HK$’000

Share of net assets Loan to joint ventures	— 876,132
	876,132

The loan to joint ventures is unsecured, interest-free and has no fixed terms of repayment. In the opinion of the directors, this loan is considered as part of the Company’s net investments in joint ventures.

Particulars of the Group’s joint ventures are as follows:

		Place of		Percentage of	Percentage of
	Particulars of	registration and	Ownership		Voting	Profit	Principal
Name	issued shares	business	interest		power	sharing	activities
			Direct	Indirect
Magical Gains*	200 ordinary	British Virgin	50	—	50	50	Investment
	shares	Island (‘‘BVI’’)/					holding
		Hong Kong
Ultra Matrix	50,000	BVI/Hong Kong	—	50	50	50	Investment
International	ordinary shares						holding
Limited*
Grand Express	1 ordinary	Hong Kong/	—	50	50	50	Investment
Holdings Limited	share	Hong Kong					holding
Grand Express Korea	1,685,379	South Korea/	—	50	50	50	Casino
Company Limited*	ordinary shares	South Korea					business

Not audited by Zenith CPA Limited

Magical Gains is directly held by the Company and all other joint ventures as disclosed above are wholly-owned by Magical Gains.

Magical Gains Group carried Casino Business in South Korea, which is considered a material joint venture of the Group, and is accounted for using the equity method.

– I-42 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The following table illustrates the summarised financial information of Magical Gains Group adjusted for any differences in accounting policies and recorded to the carrying amount in the consolidated financial statements.

Cash and cash equivalents
Other current assets
Current assets
Non-current assets
Financial liabilities excluding trade and other payables
Other current liabilities
Current liabilities
Non-current financial liabilities, excluding trade and other payables and provisions
Non-current liabilities
Net liabilities
Reconciliation to the Group’s interest in the joint ventures:
Proportion of the Group’s ownership
Group’s share of net assets and carrying amount of the joint ventures
Revenue
Interest income
Depreciation and amortisation
Interest expenses
Tax
Profit and total comprehensive income for the year

2014
HK$’000
843,001
70,523
913,524
879,326
(1,838,808)
—
(1,838,808)
(7,251)
(7,251)
(53,209)
50
—
—
—
—
—
—
—

21. INVESTMENT IN AN ASSOCIATE

2014 HK$’000

Share of net assets

—

– I-43 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Particulars of the Group’s associate are as follows:

			Percentage of	Percentage of
		Place of	Indirect
	Particulars of	registration and	Ownership	Voting	Profit	Principal
Name	issued shares	business	interest	power	sharing	activity
Autumnglow PTE	2 ordinary	Singapore/	50	50	50	Inactive
Limited*	shares	Singapore
(‘‘Autumnglow’’)

Not audited by Zenith CPA Limited

The Group’s shareholding in the associate is held through a wholly-owned subsidiary of the Company.

Autumnglow is inactive and is accounted for using the equity method.

The following table illustrates the summarised financial information of Autumnglow adjusted for any differences in accounting policies and recorded to the carrying amount in the consolidated financial statements.

Current and net liabilities Reconciliation to the Group’s interest in an associate: Proportion of the Group’s ownership Group’s share of net assets and carrying amount of an associate Revenue Profit and total comprehensive income for the year	2014 HK$’000 (7
	50 —
	— —

22. DEPOSIT PAID FOR ACQUISITION OF LAND

During the year ended 31 December 2013, the Group entered into an agreement with a third party for the acquisition of the said land for an aggregate cash consideration of KRW136,000,000,000 (equivalent to approximately HK$998,803,000). The deposit of KRW13,600,000,000 (equivalent to approximately HK$99,880,000) were paid upon signing the agreement. The land would be used for the intended investment for the development, management and operation of certain real estate, entertainment and hotel and hospitality project. During the year, the acquisition was completed and the deposit was transferred to property, plant and equipment and properties under development.

23. INVENTORIES

Raw materials Work in progress Finished goods	2014 HK$’000 9,076 10,897 41,658 61,631	2013 HK$’000 13,935 11,926 39,562
		65,423

– I-44 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

24. PROPERTIES UNDER DEVELOPMENT

Properties under development, at cost	2014 HK$’000 1,578,803	2013 HK$’000 658,434

The analysis of carrying value of land included in properties for or under development is as follows:

South Korea Freehold land Mainland China Long-term lease — leases of over 50 years	2014 HK$’000 403,078 90,094 493,172	2013 HK$’000 — 84,540
		84,540

The amount of properties under development expected to be completed and recovered after more than one year is approximately HK$404,071,000 (2013: HK$84,540,000).

At 31 December 2013, the Group’s properties under development with a net carrying value of approximately HK$513,141,000 was pledged to secure the amount due to a related company (note 32).

Further particulars of the Group’s major properties under development are set out on page 161 of the annual report.

25. TRADE AND OTHER RECEIVABLES

Trade receivables due from third parties Impairment Other receivables Prepayments Deposits Total trade and other receivables	2014 HK$’000 125,265 (33,223) 92,042 26,512 9,283 299,392 335,187 427,229	2013 HK$’000 100,729 (28,536
		72,193
		12,864 2,607 49,792
		65,263
		137,456

The Group’s trading terms with its customers are mainly on credit, except for new customers, where payment in advance is normally required. The credit period is generally one month, extending up to three months for major customers. Each customer has a maximum credit limit. The Group seeks to maintain strict control over its outstanding receivables to minimise credit risk and overdue balances are reviewed regularly by senior management.

In view of the aforementioned and the fact that the Group’s trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non-interestbearing.

– I-45 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

An aged analysis of the trade receivables as at the end of the reporting period, based on the invoice date and net of provisions, is as follows:

Within 30 days 31 to 60 days 61 to 90 days Over 90 days	2014 HK$’000 24,035 16,746 14,707 36,554 92,042	2013 HK$’000 19,060 12,177 8,723 32,233
		72,193

The movements in provision for impairment of trade receivables are as follows:

At 1 January Impairment losses recognised Impairment losses reversed Exchange realignment At 31 December	2014 HK$’000 28,536 5,082 — (395) 33,223	2013 HK$’000 27,728 — (289 1,097
		28,536

Included in the above provision for impairment of trade receivables is a provision for individually impaired trade receivables of approximately HK$33,223,000 (2013: HK$28,536,000) with a carrying amount before provision of approximately HK$40,486,000 (2013: HK$30,513,000).

The individually impaired trade receivables relate to customers that were in financial difficulties or were in default in both interest and/or principal payments and only a portion of receivables is expected to be recovered.

The aged analysis of the trade receivables that are not individually nor collectively considered to be impaired is as follows:

Neither past due nor impaired Less than 1 month past due 1 to 3 months past due Over 3 months past due	2014 HK$’000 25,283 8,240 6,169 52,350 92,042	2013 HK$’000 19,025 16,538 7,351 29,279
		72,193

Receivables that were neither past due nor impaired relate to a large number of diversified customers for whom there was no recent history of default.

Receivables that were past due but not impaired relate to a number of independent customers that have a good track record with the Group. Based on past experience, the directors of the Company are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable.

None of the other receivables, prepayments and deposits is either past due or impaired. The financial assets included in the above balances relate to receivables for which there was no history of default.

– I-46 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

26. CASH AND CASH EQUIVALENTS

At the end of the reporting period, the Group had bank balances and cash of approximately HK$1,655,667,000, with approximately HK$27,444,000 and HK$1,139,328,000 held in RMB and Korean Won respectively and the remaining held in Hong Kong dollar (2013: HK$265,956,000, with approximately HK$75,419,000 and HK$187,486,000 held in RMB and Korean Won respectively). The RMB is not freely convertible into other currencies, however, under Mainland China’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank balances are deposited with creditworthy banks with no recent history of default.

Pursuant to relevant regulations in the PRC, the Group are required to place in designated bank accounts certain amounts of pre-sale proceeds of properties as guarantee deposits for the construction of the related properties. The deposits can only be used for purchases of construction materials and payments of the construction fees of the relevant property projects when approval from relevant local government authorities is obtained. At 31 December 2014, such guarantee deposits amounted to approximately HK$10,658,000 (2013: Nil).

27. TRADE AND OTHER PAYABLES

Trade payables due to third parties Accruals Deposits received Other payables	2014 HK$’000 110,973 118,329 142,027 18,285 278,641 389,614	2013 HK$’000 83,693
		10,924 5,119 28,739
		44,782
		128,475

An aged analysis of the trade payables as at the end of the reporting period, based on the invoice date, is as follows:

Within 30 days 31 to 60 days 61 to 90 days Over 90 days	2014 HK$’000 71,313 12,460 9,393 17,807 110,973	2013 HK$’000 19,415 10,723 6,180 47,375
		83,693

The trade payables are non-interest-bearing and are normally settled with credit periods ranging from 30 to 90 days.

28. DEFERRED REVENUE

The deferred revenue arises as a result of the benefit received from a government loan bearing interest of 0.3% (2013: 0.3%) per annum during the years ended 31 December 2014 and 2013.

– I-47 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

29. LOAN FROM GOVERNMENT

On 10 December 2010, Jiangsu Wenrun received a loan with 0.3% interest-bearing of RMB6,000,000 (equivalent to approximately HK$7,122,000) from the PRC local government to finance the research and development of technology of LED equipment over a three-year period. The loan is repayable in full at the end of that three-year period. Using market interest rates for an equivalent loan of 6.88%, the fair value of the loan is estimated at approximately HK$5,853,000 on initial recognition. The difference of approximately HK$1,269,000 between the gross proceeds and the fair value of the loan is the benefit derived from the loan with low interest and is recognised as deferred revenue (note 28).

30. INTEREST-BEARING BANK AND OTHER BORROWINGS

Bank loans, secured Loans from licensed money lender, unsecured Bank and other borrowings repayable on demand or within one year	2014 HK$’000 89,676 — 89,676	2013 HK$’000 87,095 10,127
		97,222

Notes:

(a) As at 31 December 2014 and 2013, the carrying amounts of the Group’s bank and other borrowings approximate to their fair value.
(b) Bank loans are secured by the Group’s certain of property, plant and equipment, prepaid lease payments and intangible assets. The effective interest rates ranging from 5.75% to 6.90% (2013: 6.00% to 7.13%) per annum. All bank loans are denominated in RMB.
(c) For the year ended 31 December 2013, the Group had entered into loan agreements with a licensed money lender which were unsecured, bore interest at fixed rates of 12% per annum and have been fully settled during the year.

31. DUE TO THE ULTIMATE HOLDING COMPANY

The amount due to the ultimate holding company was unsecured, interest-free and repayable on demand and was fully repaid during the year.

32. DUE TO A RELATED COMPANY

The amount due to a related company, Anhui Landing Holding Group Limited, which was controlled by Mr. Yang Zhihui, the chairman and an executive director of the Company.

The amount was secured by the Group’s properties under development with a carrying amount of approximately HK$513,141,000 (note 24), bore interest at fixed rate of 13% per annum and was fully repaid during the year.

33. DUE TO A NON-CONTROLLING INTEREST

The amount due to a non-controlling interest is unsecured, carrying interest at 5% per annum and repayable in 2019.

– I-48 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

34. FINANCE LEASE PAYABLES

Within one year More than one year Total minimum lease payment Future finance charge Total net finance lease payables Portion classified as current liabilities Non-current portion	2014 Minimum lease payment Present value of minimum lease payment HKD HKD 82,740 66,091 259,032 231,580 341,772 297,671 (44,101) 297,671 (66,091) 231,580	2014 Minimum lease payment Present value of minimum lease payment HKD HKD 82,740 66,091 259,032 231,580 341,772 297,671 (44,101) 297,671 (66,091) 231,580
		297,671

35. CONVERTIBLE BONDS

On 7 June 2013, the Company issued the three-year zero coupon convertible bonds (the ‘‘2013 Convertible Bonds’’) at par with a nominal value of HK$550,000,000 to Hong Han Limited (‘‘Hong Han’’), the controlling shareholder of the Company as at the acquisition date, in relation to the acquisition of 100% equity interests of Double Earn Holdings Limited and its subsidiaries (collectively, ‘‘Double Earn Group’’). The acquisition was completed on 7 June 2013 and details of the acquisition were disclosed in the circular of the Company dated 25 March 2013. The 2013 Convertible Bonds are denominated in Hong Kong dollars. The 2013 Convertible Bonds entitle the holder to convert them into ordinary shares of the Company at any time before their maturity at a conversion price of HK$0.073 per ordinary share. If the bonds had not been converted, they would be redeemed on maturity date at par.

The Company had right to redeem, in whole or in part, the 2013 Convertible Bonds, at any time commencing from the issue date to maturity date, by giving the bondholder at least seven business days’ prior notice at the redemption amount, which was 100% of the principal amount of the outstanding 2013 Convertible Bonds. The bondholder may, at any time during the period commencing from the issue date, and expiring on the maturity date, convert the bonds into ordinary shares of the Company.

The fair value of the liability component was estimated at the issuance date using an equivalent market interest rate for a similar bond without a conversion options. The residual amount is assigned as the equity component and is included in shareholders’ equity.

During the year ended 31 December 2013, the 2013 Convertible Bonds with a nominal value of HK$550,000,000 were fully converted into 7,534,247,000 ordinary shares by the exercise of conversion rights attached to the 2013 Convertible Bonds.

The summarised information of the 2013 Convertible Bonds are set out as follows:

	2013 Convertible
	Bonds
Issuance date	7 June 2013
Maturity date	5 June 2016
Principal amount	HK$550,000,000
Coupon rate	Zero
Conversion price per ordinary share (HK$)	HK$0.073

– I-49 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The 2013 Convertible Bonds was bifurcated into a liability component (including the amount of closelyrelated early redemption option held by the Company) and an equity component for accounting purpose. The following table summaries the measurements in the principal amounts, liability and equity components of the Group’s 2013 Convertible Bonds during the year ended 31 December 2013:

			Equity
			component
			(included in
	Principal		the convertible
	outstanding	Liability	bond equity
	amount	component	reserve)	Total
	HK$’000	HK$’000	HK$’000	HK$’000
Issuance of 2013 Convertible Bonds	550,000	463,303	86,697	550,000
Interest expense (note 8)	—	86,697	—	86,697
Transfer to share capital and share premium
accounts upon conversion of ordinary shares
(note 37(b))	(550,000)	(550,000)	(86,697)	(636,697)
At 31 December 2013	—	—	—	—

36. DEFERRED TAX LIABILITIES

The movements in deferred tax liabilities during the year are as follows:

At January 2013 Charged/(credited) to statement of profit or loss (note 12) Exchange realignment At 31 December 2013 and at 1 January 2014 (Credited)/charged to statement of profit or loss (note 12) Exchange realignment At 31 December 2014	Depreciation allowance in excess of related depreciation HK$’000 (413) 413 — — — — —	Fair value adjustments on acquisition HK$’000 8,852 (1,977) (23) 6,852 (2,083) (1) 4,768	Others HK$’000 (2,445) 3,889 (15) 1,429 25 58 1,512	Total HK$’000 5,994 2,325 (38
				8,281 (2,058) 57
				6,280

The Group has tax losses of approximately HK$104,760,000 (2013: HK$703,000) that are available for offsetting against future profits of the companies in which the losses arose, subject to certain tax rules of the countries in which the Group operates. Deferred tax asset has not been recognised in respect of these losses as the utilisation of which is uncertain.

– I-50 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

37. SHARE CAPITAL

Authorised: At 1 January 2013 Share subdivision (note a) At 31 December 2013, 1 January 2014 and 31 December 2014 Issued and fully paid At 1 January 2013 Transfer of credit arising from the capital reduction in relation to the capital reorganisation (note a) Issue of new shares upon conversion of 2013 Convertible Notes (note b) At 31 December 2013 and 1 January 2014 Issue of ordinary shares by rights issue (note c) Issue of ordinary shares by share subscriptions (note d) Issue of ordinary shares in relation to acquisition of a subsidiary (note e) At 31 December 2014	Number of shares ’000 5,000,000 45,000,000 50,000,000 1,910,020 — 7,534,247 9,444,267 4,722,133 3,070,000 1,459,854 18,696,254	Total value HK$’000 500,000 —
		500,000
		191,002 (171,902 75,343
		94,443 47,221 30,700 14,599
		186,963

A summary of the movements in the company’s issued share capital during the years ended 31 December 2013 and 2014 is as follows:

Issued and fully paid At 1 January 2013 Transfer of credit arising from the capital reduction in relation to the capital reorganisation (note a) Issue of new shares upon conversion of the convertible bonds (note b) At 31 December 2013 and 1 January 2014 Issue of ordinary shares by rights issue (note c) Direct expenses in relation to rights issue Issue of ordinary shares by share subscriptions (note d) Issue of ordinary shares in relation to acquisition of a subsidiary (note e) At 31 December 2014	Number of shares in issue ’000 1,910,020 — 7,534,247 9,444,267 4,722,133 — 3,070,000 1,459,854 18,696,254	Issued capital HK$’000 191,002 (171,902) 75,343 94,443 47,221 — 30,700 14,599 186,963	Share premium HK$’000 88,679 — 561,354 650,033 1,369,419 (14,374) 1,236,300 773,723 4,015,101	Total HK$’000 279,681 (171,902) 636,697
				744,476 1,416,640 (14,374) 1,267,000 788,322
				4,202,064

– I-51 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes:

(a) Pursuant to a special resolution passed at a special general meeting of the Company held on 18 April 2013, a capital reorganisation was implemented by the Company which involved:
(i) the reduction in the issued share capital of the Company by cancellation of paid-up capital to the extent of HK$0.09 on each issued share so that the par value of each issued share has been reduced from HK$0.1 to HK$0.01;
(ii) the subdivision of each authorised but unissued existing share into ten shares of HK$0.01 each; and
(iii) the transfer of the credit arising from the capital reduction of approximately HK$171,902,000 to the contributed surplus of the Company.

Further details of which are set out in the Company’s circular dated 25 March 2013.

(b) On 28 June 2013, the Company allotted and issued 1,794,520,547 shares of HK$0.01 each upon the exercise of the conversion rights attached to convertible notes in the aggregate principal amount of approximately HK$131,000,000.

On 21 October 2013, the Company allotted and issued 5,253,425,656 shares of HK$0.01 each upon the exercise of the conversion rights attached to convertible notes in the aggregate principal amount of approximately HK$383,500,000.

On 23 October 2013, the Company allotted and issued 465,753,424 shares of HK$0.01 each upon the exercise of the conversion rights attached to convertible notes in the aggregate principal amount of approximately HK$34,000,000.

On 24 October 2013, the Company allotted and issued 20,547,945 shares of HK$0.01 each upon the exercise of the conversion rights attached to convertible notes in the aggregate principal amount of approximately HK$1,500,000.

(c) On 4 February 2014, the Company completed the rights issue on the basis of one rights share for every two shares held on the record date. 4,722,133,286 shares were issued at a subscription price of HK$0.30 per rights share with gross proceeds of approximately HK$1,416,640,000, of which approximately HK$47,221,000 was credited to share capital and approximately HK$1,369,419,000 was debited to the share premium account. Details of which were set out in the Company’s announcements dated 20 December 2013, 23 December 2013 and 30 January 2014 and the Company’s prospectus dated 9 January 2014.
(d) On 1 April 2014, the Company completed the subscription of 810,000,000 ordinary shares of the Company at the price of HK$0.30 per subscription share to a subscriber. On the same date, the Company completed the subscriptions of 160,000,000 and 400,000,000 ordinary shares of the Company at the price of HK$0.40 per subscription share to another two subscribers respectively. Details of which were set out in the Company’s announcement dated 1 April 2014.

On 11 April 2014, the Company completed the subscription of 500,000,000 ordinary shares of the Company at the price of HK$0.40 per subscription share to a subscriber. Details of which were set out in the Company’s announcement dated 11 April 2014.

On 17 June 2014, the Company completed the subscription of 700,000,000 ordinary shares of the Company at the price of HK$0.50 per subscription share to a subscriber. Details of which were set out in the Company’s announcement dated 17 June 2014.

On 8 July 2014, the Company completed the subscription of 500,000,000 ordinary shares of the Company at the price of HK$0.50 per subscription share to a subscriber. Details of which were set out in the Company’s announcement dated 8 July 2014.

– I-52 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(e) On 16 June 2014, the completion of the acquisition of the entire equity interest of Ultra Matrix International Limited and together with its subsidiaries (‘‘Ultra Matrix Group’’) with an aggregate consideration of approximately HK$875,913,000 was taken place. Upon such completion, 1,459,854,014 ordinary shares of the Company with par value of HK$0.01 each were issued as the full payment of the consideration for the acquisition. The fair value of the 1,459,854,014 ordinary shares of the Company, determined using the closing market price of HK$0.54 per share at the date of completion on 16 June 2014, amounted to approximately HK$788,322,000. Details of which were disclosed in the announcements of the Company dated 23 March 2014, 3 April 2014 and 16 June 2014 (note 39).

These shares rank pari passu with the existing ordinary shares of the Company in all respects.

38. SHARE OPTION SCHEME

The Company operates a share option scheme (the ‘‘Scheme’’) for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations.

Under the Scheme adopted 11 June 2010 (the ‘‘Share Option Scheme’’), the directors of the Company may grant options to eligible participants, including the Company’s directors, other employees of the Group, suppliers of goods or services to the Group, customers of the Group, and any non-controlling interests in the Company’s subsidiaries. The Share Option Scheme will, unless otherwise cancelled or amended, remain in force for 10 years from the date of adoption.

The maximum number of shares in respect of which options may be granted under the Share Option Scheme and any other share option scheme of the Company must not exceed 10% of the shares of the Company in issue at any time.

Share options granted to a director, chief executive or substantial shareholder of the Company, or to any of their associates, are subject to approval in advance by the independent non-executive directors of the Company.

In addition, any share options granted to a substantial shareholder or an independent non-executive director of the Company, or to any of their associates, in excess of 0.1% of the shares of the Company in issue at any time or with an aggregate value (based on the price of the Company’s shares at the date of grant) in excess of HK$5 million, within any 12-month period, are subject to shareholders’ approval in advance in a general meeting.

The offer of a grant of share options may be accepted within 21 days from the date of offer, upon payment of a nominal consideration of HK$1 in total by the grantee. The exercise period of the share options granted is determinable by the directors of the Company, and commences after a certain vesting period and ends on a date which is not later than 10 years from the date of offer of the share options.

The subscription price of the share options is determinable by the directors of the Company, but must be at least the higher of (i) the SEHK closing price of the Company’s shares on the date of offer of the share options which must be a business day; and (ii) the average SEHK closing price of the Company’s shares as stated in the SEHK’s daily quotations sheets for the five trading days immediately preceding the date of offer. At the end of the reporting period, the Company had no share options outstanding under the Scheme and no share options were granted to the eligible participants.

Share options do not confer rights on the holders to dividends or to vote at shareholders’ meetings.

On 15 December 2014, the Company granted share options (the ‘‘Options’’) under the share option scheme to certain eligible grantees (the ‘‘Grantees’’), which, subject to acceptance by the Grantees, would enable the Grantees to subscribe for an aggregate of 869,375,807 ordinary shares of the Company of HK$0.01 each in the share capital of the Company at the exercise price of HK$0.225 per new share. The Options granted are exercisable commencing from 15 December 2014 to 14 December 2024 (both dates inclusive) (the ‘‘Option Period’’). No Options will be exercisable after the expiry of the Option Period. 65,436,889 Options (the ‘‘Accepted Options’’) were accepted by the Grantees during the year ended 31 December 2014.

– I-53 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The following Accepted Options were outstanding under the scheme during the year.

At 1 January Accepted during year At 31 December	2014 Weighted average exercise price Number of options HK$ per share ’000 — — 0.225 65,437 0.225 65,437	2014 Weighted average exercise price Number of options HK$ per share ’000 — — 0.225 65,437 0.225 65,437
		65,437

No Accepted Options were exercised during the year.

The exercise prices and exercise periods of the Accepted Options outstanding as at the end of the reporting period are as follows:

2014
Number of
Accepted Options	Exercise price	Exercise period
’000	HK$ per share
65,437	0.225	15 December 2014 to 14 December 2024

The exercise price of the Options is subject to adjustment in the case of rights or bonus issues, or other similar changes in the Company’s share capital.

The fair value of the Accepted Options during the year was approximately HK$3,974,000 (HK$0.06 each), of which the Group recognised a share option expense of approximately HK$3,974,000 during the year ended 31 December 2014.

The fair value of Accepted Options during the year was estimated as at the date of grant, using a binomial model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used:

	15 December
	2014
Dividend yield (%)	0.00
Expected volatility (%)	36.61
Risk-free interest rate (%)	1.70
Expected life of options (year)	10.00
Weight average share price (HK$ per share)	0.225

The expected life used in the model has been adjusted based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

No other feature of Accepted Options was incorporated into the measurement of fair value.

– I-54 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

At the end of the reporting period, the Company had 65,437,000 Accepted Options outstanding under the Share Option Scheme. The exercise in full of the outstanding Accepted Options would, under the present capital structure of the Company, result in the issue of 65,437,000 additional ordinary shares of the Company and additional share capital of approximately HK$654,000 (before issue expenses).

Subsequently on 8 January 2015, as approved by the board of directors of the Company (the ‘‘Board’’) and consented by each of the Grantees, the Company and the Grantees have agreed that the grant of Options to be cancelled in its entirety. No Grantee has exercised the said Options prior to such cancellation.

At the date of approval of these financial statements, the Company did not have any Options outstanding under the Share Option Scheme.

39. ACQUISITION OF ASSETS AND LIABILITIES

2013

On 7 June 2013, the Group acquired 100% equity interest in Double Earn Group from Hong Han Double Earn Group are engaged in Property Development in Mainland China.

At the time of acquisition, Double Earn Group had not actively engaged in any business and accordingly, in the opinion of the directors, the acquisition of the Double Earn Group does not constitute a business combination but an acquisition of assets and liabilities. Details of which are set out in the circular issued by the Company dated 25 March 2013.

For accounting purpose, the cost of acquisitions of HK$550,000,000 has been allocated to the following identifiable assets and liabilities of the Double Earn Group as at the date of acquisition as follows:

Notes
Net asset acquired:
Property, plant and equipment
16
Prepaid lease payments
17
Other receivables
Cash and bank balances
Other payables
Total identifiable net assets acquired
Satisfied by:
Issuance of 2013 Convertible Bonds
35
Analysis of cash flows in respect of Double Earn Group is as follows:
Bank balances and cash acquired with the subsidiaries
Cash paid
Net inflow of cash and cash equivalents included in cash flows used in
investing activities

HK$’000
811
590,086
2,177
151
(43,225)
550,000
550,000
151
—
151

2014

On 9 February 2014 and 21 February 2014, the Company entered into a sale and purchase agreement and supplemental agreement, respectively, with Ms. Xu, the executive director of the Company, for the acquisition of the entire issued shares of Win Rich Group Limited (‘‘Win Rich’’), which is beneficially owned by Ms. Xu at the total consideration of approximately HK$141,491,000. Win Rich was incorporated for the purpose of entering into a purchase agreement and the leasing agreements with respect to an aircraft.

– I-55 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

At the time of acquisition, Win Rich did not actively engage in any business, accordingly, in the opinion of the directors, the acquisition of the Win Rich does not constitute a business combination but an acquisition of assets and liabilities.

Details of which were disclosed in the announcements of the Company dated 9 February 2014, 21 February 2014 and 7 April 2014 and the circular of the Company dated 12 March 2014.

On 2 April 2014, the Company entered into a sale and purchase agreement with a vendor (the ‘‘Vendor’’), an independent third party, for the acquisition of the entire issued shares of Ultra Matrix Group at a consideration of KRW120,000,000,000 by issuing 1,459,854,014 ordinary shares of the Company at HK$0.6 per share. The fair value of the said consideration as at the date of the such acquisition is approximately HK$788,322,000. Ultra Matrix Group was incorporated for the purpose of holding a casino license in Jeju, South Korea under the Tourism Promotion Act.

At the time of acquisition, the major assets held by the Ultra Matrix Group consisted of casino license and certain assets; and accordingly, in the opinion of the directors, the acquisition of the Ultra Matrix Group does not constitute a business combination but an acquisition of assets and liabilities.

Details of which were disclosed in the announcements of the Company dated 23 March 2014, 3 April 2014 and 16 June 2014.

For accounting purpose, the cost of acquisitions of approximately HK$1,017,404,000 (comprising cash, share consideration transferred and transaction costs) have been allocated to the following identifiable assets and liabilities of Win Rich and the Ultra Matrix Group as at the date of acquisition as follows:

Notes Net asset acquired: Property, plant and equipment 16 Intangible assets 19 Prepayments, deposits and other receivable Cash and bank balances Other payables and accruals Obligations under finance lease Total identifiable net assets acquired Satisfied by: Issuance of ordinary shares 37(e) Cash Analysis of cash flows in respect of the acquisitions is as follows: Cash and bank balances acquired Cash consideration paid for the acquisitions Net outflow of cash and cash equivalents included in cash flows used in investing activities	Ultra Matrix Group HK$’000 2,083 872,299 111,245 1,820 (111,534) — 875,913 788,322 87,591 875,913 1,820 (87,591) (85,771)	2014 Win Rich HK$’000 — — 441,589 933 (11,810) (289,221) 141,491 — 141,491 141,491 933 (141,491) (140,558)	Total HK$’000 (Unaudited) 2,083 872,299 552,834 2,753 (123,344 (289,221
			1,017,404
			788,322 229,082
			1,017,404
			2,753 (229,082
			(226,329

– I-56 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

40. DECONSOLIDATION OF SUBSIDIARIES

Owing to the dilution of the Group’s effective equity interest in Magical Gains from 100% to 50% upon issuance of 100 new ordinary shares of Magical Gains to a subscriber on 23 December 2014, Magical Gains Group 7ceased to be subsidiaries of the Group and became joint ventures of the Group during the year (note 7). Accordingly, Magical Gains Group were deconsolidated during the year ended 31 December 2014.

An analysis of the net assets deconsolidated in respect of which is as follows:

Notes Assets/(liabilities) deconsolidated: Property, plant and equipment 16 Intangible assets 19 Long-term deposit Inventories Other receivables Financial assets at FVTPL Cash and bank balances Other payables Amount due to a shareholder Reclassification to interests in joint ventures from interests in subsidiaries	HK$’000 56,833 815,696 6,798 1,549 25,585 43,388 50,599 (94,015) (1,001,132) (94,699)

An analysis of the net outflow of cash and cash equivalents in respect of the deconsolidation of Magical Gains Group is as follows:

Cash and bank balances deconsolidated and the net outflow of cash and cash equivalents in respect of the deconsolidation of subsidiaries	HK$’000 (50,599)

41. DEEMED DISPOSAL OF PARTIAL INTEREST IN A SUBSIDIARY

A shareholders agreement dated 7 February 2014, entered into between the Company, Landing Jeju Development Co., Ltd. (‘‘Landing Jeju’’), and Happy Bay Pte. Ltd. (‘‘HBL’’, an indirect wholly-owned subsidiary of Genting Singapore PLC, as subscriber), pursuant to which the Company and HBL have conditionally agreed to pay KRW32,469,000,000 (equivalent to approximately HK$235,000,000) and KRW82,500,000,000 (equivalent to approximately HK$598,000,000) respectively to the Landing Jeju for subscription of its shares such that the Landing Jeju will be owned as to 50% by the Company and 50% by HBL.

The completion of the shareholders agreement took place on 27 March 2014. Upon the said completion with the increase in the share capital of the Landing Jeju, the Landing Jeju is owned as to 50% by each of the Company and HBL, and has become a non-wholly owned subsidiary of the Company, the financial results of which will continue to be consolidated into the Group’s financial statements.

Such dilution of shareholding of the Landing Jeju held by the Company from 100% to 50% was constituted a deemed disposal of the Group’s equity interest in Landing Jeju, and the difference of approximately HK$7,253,000 between the fair value of the consideration received from share subscription of the Landing Jeju and 50% carrying amount of the net assets attributable to the deemed disposal of was recognised directly in equity as other reserve during the period ended 30 June 2014. Details of which were set out in announcements of the Company dated 9 February 2014 and 27 March 2014.

– I-57 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

42. OPERATING LEASE COMMITMENTS

The Group leases certain of its office properties and factory premises are negotiated for terms of two to three years. As at 31 December 2014, the Group had total future minimum lease payments under noncancellable operating leases falling due as follows:

Within one year In the second to fifth year inclusive	2014 HK$’000 49,613 17,268 66,881	2013 HK$’000 11,607 17,915
		29,522

43. PLEDGE OF ASSETS

As at 31 December 2014, the Group pledged its property, plant and equipment, prepaid lease payments, intangible assets and properties under development of approximately HK$530,382,000 (2013: HK$26,711,000), approximately HK$15,494,000 (2013: HK$16,122,000), approximately HK$33,668,000 (2013: HK$37,008,000) and Nil (2013: HK$513,141,000), respectively, to secure the Group’s borrowing facilities and finance lease payables (notes 30 and 34).

44. COMMITMENTS

In addition to the operating lease commitments detailed in note 42 above, the Group had the following capital commitments at the end of the reporting period:

Contracted, but not provided for: Property, plant and equipment Properties being developed by the Group for sale Land use rights	2014 HK$’000 289,587 366,300 — 655,887	2013 HK$’000 3,615 484,984 1,069,799
		1,558,398

45. RELATED PARTY TRANSACTIONS

(a) On 9 February 2014 and 21 February 2014, the Company entered into a sale and purchase agreement and a supplemental agreement respectively with Ms. Xu for the acquisition of the entire issued shares of Win Rich, which is beneficially owned by Ms. Xu at the total consideration of approximately HK$141,491,000. Win Rich was incorporated for the purpose of entering into a purchase agreement and the leasing agreements with respect to an aircraft. The relevant resolution has been passed in a special general meeting of the Company held on 28 March 2014 by way of poll. The completion of such acquisition has taken place on 7 April 2014. Details of which have been disclosed in the announcements of the Company dated 9 February 2014, 21 February 2014 and 7 April 2014 and the circular of the Company dated 12 March 2014.
(b) During the year ended 31 December 2014, Landing Jeju was granted a shareholder loan of approximately Singapore Dollar (‘‘SGD’’) 97,529,000 (equivalent to approximately HK$614,557,000) from HBL. The shareholder loan charged interest rate at 5% per annum. Approximately HK$22,001,000 of interest expense was capitalised into the property, plant and equipment during the year ended 31 December 2014.
(c) During the year ended 31 December 2013, the Group acquired Double Earn Group from Hong Han and details of which are set out in note 39 to the consolidated financial statements and the Company’s shareholders’ circular dated 24 March 2013.

– I-58 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(d) During the year ended 31 December 2013, the Group was granted a loan of RMB100,000,000 (equivalent to approximately HK$123,273,000) from Anhui Landing Holding Group Co., Ltd[#] (安徽藍鼎控股集團有限公司) (‘‘Anhui Landing’’), a related company of the Group. The loan bore an interest at the rate of 13% per annum. Approximately HK$9,717,000 (2013: HK$3,228,000) of interest expense was charged by Anhui Landing during the year. The loan and its accrued interest have been fully settled during the year ended 31 December 2014.
(e) The remuneration of directors and other members of key management of the Company during the reporting period, which is determined by the remuneration committee having regard to the performance of individuals and market trends, is as follows:

		2014	2013
		HK$’000	HK$’000
Short-term	benefits	43,444	7,837

46. STATEMENT OF FINANCIAL POSITION AND RESERVES OF THE COMPANY

Information about the statement of financial position and reserves of the Company as at the reporting date are as follows:

NON-CURRENT ASSETS Property, plant and equipment Due from a subsidiary Investments in subsidiaries Interests in joint ventures Total non-current assets CURRENT ASSETS Due from subsidiaries Deposits and prepayments Cash and bank balances Total current assets CURRENT LIABILITIES Accruals and other payables Due to subsidiaries Due to the ultimate holding company Other borrowings Total current liabilities NET CURRENT ASSETS/(LIABILITIES) Net assets EQUITY Issued capital Reserves (note) Total equity	2014 HK$’000 11,841 624,808 1,319,460 876,132 2,832,241 669,383 248,047 480,518 1,397,948 6,473 120,269 — — 126,742 1,271,206 4,103,447 186,963 3,916,484 4,103,447	2013 HK$’000 5,547 — 1,084,503 —
		1,090,050
		5,692 6,432 8,983
		21,107
		4,405 372,432 4,995 10,127
		391,959
		(370,852
		719,198
		94,443 624,755
		719,198

– I-59 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Note:

Notes At 1 January 2013 Loss and total comprehensive loss for the year Issue of convertible bond Issue of new shares upon conversion of the convertible bonds 37(b) Transfer of credit arising from the capital reduction in relation to capital organisation 37(a) At 31 December 2013 and 1 January 2014 Loss and total comprehensive loss for the year Issue of ordinary shares by rights issue 37(c) Direct expenses in relation of rights issue Issue of ordinary shares by share subscriptions 37(d) Issue of ordinary shares in relation to acquisition of a subsidiary 37(e) Equity-settled share option arrangements At 31 December 2014	Share premium HK$’000 88,679 — — 561,354 — 650,033 — 1,369,419 (14,374) 1,236,300 773,723 — 4,015,101	Contributed surplus HK$’000 — — — — 171,902 171,902 — — — — — — 171,902	Convertible bond equity reserve HK$’000 — — 86,697 (86,697) — — — — — — — — —	Share-based payment reserve HK$’000 — — — — — — — — — — — 3,974 3,974	Accumulated losses HK$’000 (88,493) (108,687) — — — (197,180) (77,313) — — — — — (274,493)	Total HK$’000 186 (108,687 86,697 474,657 171,902
						624,755
						(77,313 1,369,419 (14,374 1,236,300 773,723 3,974
						3,916,484

47. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows:

2014

Financial assets

Loan to joint ventures Trade and other receivables Restricted cash Cash and bank balances	2014 Loans and receivables HK$’000 876,132 427,229 10,658 1,655,667 2,969,686	2013 Loans and receivables HK$’000 — 134,849 — 265,956
		400,805

– I-60 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Financial liabilities

Trade and other payables Interest-bearing bank and other borrowings Due to the ultimate holding company Due to a related company Finance lease payables Due to a non-controlling interest	2014 Financial liabilities at amortised cost HK$’000 386,153 89,676 — — 297,671 598,826 1,372,326	2013 Financial liabilities at amortised cost HK$’000 117,551 97,222 370,009 123,273 — —
		708,055

48. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

Management has assessed the fair value of cash and bank balances, trade and other receivables, trade and other payables, interest-bearing bank and other borrowings, amounts due to the ultimate holding company and a related company approximate to their carrying amounts largely due to the short term maturities of these instruments. The directors are responsible for determining the policies and procedures for the fair value measurement of financial instruments.

49. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Capital Risk Management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged.

The capital structure of the Group consists of debt balance and equity balance. Debt balance consists of bank and other borrowings, loan from government and amounts due to the ultimate holding company and a related company. Equity balance consists of equity attributable to owners of the Company, comprising issued share capital and reserves.

The directors of the Company review the capital structure on an on-going annual basis. As part of this review, the directors consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the directors, the Group will balance its overall capital structure through the payment of dividends, new share issues and share repurchase as well as the issue of new debt.

The Group’s major financial instruments include trade and other receivables, cash and bank balances, trade and other payables, bank and other borrowings, loan from government and amounts due to the ultimate holding company and a related company.

– I-61 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group does not have any written risk management policies and guidelines. The Board reviews and agrees policies for managing each of these risks and they are summarised below:

Interest rate risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s interest-bearing bank borrowings with a floating interest rate. The Group policy is to manage its interest cost using a mix of fixed and variable rate debts. The directors do not expect there will be a significant interest rate adjustment in relation to the Group’s bank borrowings, hence no sensitivity analysis is prepared at the end of the reporting period.

Foreign current risk

Certain PRC subsidiaries of the Group’s sales and purchases that are denominated in United States dollars (‘‘US$’’), which expose the Group to foreign currency risk. The following table demonstrates the sensitivity at the end of the reporting period to a reasonably possible change in the US$ exchange rate, with all other variables held constant, the Group’s loss before tax and the Group’s equity.

Sensitivity analysis

The following table indicates the approximate change in the Group’s loss after tax (and accumulated losses) in response to reasonably possible changes in the foreign exchange rates to which the Group has significant exposure at the end of the reporting period.

	Increase/	Increase/
	(decrease)	(decrease)	Increase/
	in RMB	in loss	(decrease)
	rate	before tax	in equity
	%	HK$’000	HK$’000
2014
If the RMB weakens against the US$	(5)	877	(877)
If the RMB strengthens against the US$	5	(877)	877
2013
If the RMB weakens against the US$	(5)	1,697	(1,697)
If the RMB strengthens against the US$	5	(1,697)	1,697

Credit risk

The maximum exposure to credit risk by the Group which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties is arising from the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position.

In order to manage its credit risk, management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Credit sales of products are only made to customers with good repayment history. In addition, the Group reviews the recoverable amount of individual debt on an ongoing basis to ensure that adequate impairment losses are made for irrecoverable amounts.

The credit risk on liquid funds of the Group is limited because the counterparties are banks with good reputation.

– I-62 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Liquidity risk

In management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and mitigates the effects of fluctuations in cash flows.

The following table details the Group’s remaining contractual maturity for its financial liabilities based on the undiscounted cash flows of the financial liabilities as well as the earliest date on which the Group can be required to pay.

2014 Trade and other payables Interest-bearing bank and other borrowings Due to a non-controlling interest Obligations under finance lease 2013 Trade and other payables Interest-bearing bank and other borrowings Due to the ultimate holding company Due to a related company	On Demand HK$’000 305,233 31,121 — — 336,354 — — 370,009 123,273 493,282	Less than 1 month HK$’000 — — — — — 98,337 10,266 — — 108,603	1 to 3 months HK$’000 84,381 — — — 84,381 30,138 23,347 — — 53,485	3 months to 1 year HK$’000 — 67,301 — 82,740 150,041 — 66,592 — — 66,592	Over 1 year HK$’000 — — 749,130 259,032 1,008,162 — — — — —	Total undiscounted cash flow HK$’000 389,614 98,422 749,130 341,772
						1,578,938
						128,475 100,205 370,009 123,273
						721,962

As explained in note 2 to the consolidated financial statements, the directors have adopted or plan to adopt certain measure in order to improve the Group’s financial and cash flow positions and to maintain the Group as a going concern.

50. EVENTS AFTER THE REPORTING PERIOD

(a) Subsequently on 8 January 2015, as approved by the Board and consented by each of the Grantees, the Company and the Grantees have agreed that the grant of Options to be cancelled in its entirety. No Grantee has exercised the said Options prior to such cancellation.
(b) On 15 December 2014, the Company as the purchaser, entered into a sale and purchase agreement (‘‘Gangwon Sale and Purchase Agreement’’) with Jumbo Prize Limited (‘‘Jumbo Prize’’) pursuant to which Jumbo Prize had conditionally agreed to sell and transfer, and the Company had conditionally agreed to acquire, among others, the entire issued share capital of Wealth Seed Group Limited (the ‘‘Target Company’’) at the consideration of approximately HK$868,659,000. The Target Company, through its indirect subsidiary, owns and operates casino business now carried under the trade name of Alpensia Casino at Holiday Inn Resort in Pyeongchang, Gangwon-do Province, South Korea pursuant to the casino license under the Tourism Promotion Act. A refundable deposit of HK$210,000,000 had been paid pursuant to the Gangwon Sale and Purchase Agreement. However, some of the conditions set out in the Gangwon Sale and Purchase Agreement had not been satisfied or waived and no extension of the long stop date had been agreed; hence, Gangwon Sale and Purchase Agreement lapsed on 28 February 2015 subsequently. Details of which have been disclosed in the announcements of the Company dated 15 December 2014 and 27 February 2015.

– I-63 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

51. PRINCIPAL SUBSIDIARIES

Details of the Company’s principal subsidiaries at 31 December 2014 are as follows:

	Place of	Nominal value of
	incorporation or	issued share capital/	Attributable equity
	establishment/	paid up registered	interest held by the
Name of subsidiary	operations	capital	Company			Principal activities
			Directly	Indirectly
			2014		2014
Upflow Limited	Hong Kong	HK$1 Ordinary share	100%		—	Provision of management
						services
Smart Million Limited	BVI/Hong Kong	US$1 Ordinary share	100%		—	Investment holding
Pine Fame Limited	Hong Kong	HK$1 Ordinary share	—		100%	Investment holding
Ace Winner Holdings Limited	BVI/Hong Kong	US$100 Ordinary	100%		—	Investment holding
		share
China Opto Investment Limited	Hong Kong	HK$10,000 Ordinary	—		100%	Investment holding
		share
Jiangsu Wenrun Optoelectronic	PRC	RMB135,000,000	—	69.44%		Design, manufacturing and
Co Ltd* (note i)		Paid-up registered				sale of LED and semi-
		capital				conductor lighting
						related products
Jiangsu Wenrun Optoelectronic	PRC	RMB40,000,000	—	69.44%		Design, manufacturing and
Technology Co Ltd*		Paid-up registered				sale of LED and semi-
		capital				conductor lighting
						related products
Zhejiang Wenrun Optoelectronic	PRC	RMB2,000,000 Paid-	—	69.44%		Design, manufacturing and
Semi-conductor Technology		up registered capital				sale of LED and semi-
Co Ltd*						conductor lighting
						related products
Shanghai Yuji Electronic Limited*	PRC	RMB1,000,000 Paid-	—	69.44%		Sale of LED and semi-
		up registered capital				conductor lighting
						related products
Lian Yun Gang Bo Yu Information	PRC	HK$780,000 Paid-up	—		100%	Investment holding
Consultancy Services Company		registered capital
Limited* (note iv)
Keenmount Limited	BVI	US$1 Ordinary share	100%		—	Investment holding
Double Earn Holdings Limited	BVI	US$100 Ordinary	100%		—	Investment holding
		share

– I-64 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

	Place of	Nominal value of
	incorporation or	issued share capital/	Attributable equity
	establishment/	paid up registered	interest held by the
Name of subsidiary	operations	capital	Company			Principal activities
			Directly	Indirectly
			2014		2014
Mass Spring (Hong Kong) Limited	Hong Kong	HK$10,000 Ordinary	—		100%	Investment holding
		share
Yueyang Nanhu Meishu Properties	PRC	RMB270,000,000	—		100%	Property development
Limited* (note iv)		Paid-up registered
		capital
Landing Jeju Development	South Korea	KRW165,000,000,000	50%		—	Construction, management,
Co., Limited		Ordinary share				operation and rental of
						facilities for tourism,
						commerce,
						accommodation and
						recreation
Win Rich (note ii)	BVI	US$50,000 Ordinary	100%		—	Aircraft
		share
Landing Singapore Limited	BVI	US$100 Ordinary	100%		—	Investment holding
(note iii)		share
Landing Singapore Dev. PTE Ltd.	Singapore	SGD100 Ordinary	—		100%	Investment holding
(note iii)		share
Gold Rise Management Limited	Hong Kong	HK$1 Ordinary share	100%		—	Inactive
(note iii)
Rainbow Source Developments	BVI	US$100 Ordinary	100%		—	Motor vehicles
Limited (note iii)		share
Stepwide Developments Limited	BVI	US$1 Ordinary share	100%		—	Investment holding
(note iii)
Jumbo Step Limited (note iii)	Hong Kong	HK$1 Ordinary share	—		100%	Investment holding
Landing Korea Co., Ltd (note iii)	South Korea	KRW7,355,240,000	—		100%	Establishment of training
		Ordinary share				centre
Sino Superior Limited (note iii)	BVI	US$1 Ordinary share	100%		—	Investment holding
Gold Smart Finance Limited	Hong Kong	HK$1 Ordinary share	—		100%	Inactive
(note iii)
Empire Fame Limited	BVI	US$1 Ordinary share	100%		—	Tenancy agreements
(note iii)

– I-65 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes:

(i) The company is registered in form of sino-foreign equity joint venture.
(ii) The company was acquired by the Group during the year.
(iii) The company was incorporated during the year.
(iv) The company is registered in form of wholly foreign owned enterprise.
For identification purposes only.

52. COMPARATIVE AMOUNTS

Contain comparative amounts have been reclassified to confirm to the presentation of current year.

53. APPROVAL OF CONSOLIDATION FINANCIAL STATEMENTS

This consolidated financial statements were approved and authorised for issue by the Board on 27 March 2015.

3. BUSINESS TREND AND FINANCIAL AND TRADING PROSPECT

Business trend

The Company is principally engaged in the Lighting Business, Property Development, Integrated Resort Development, and Casino Business. As disclosed in the annual report of the Company for the year ended 31 December 2014, the Group’s consolidated turnover was approximately HK$223,318,000 (2013: HK$181,075,000), among which, approximately HK$201,951,000 was generated by the Lighting Business and approximately HK$21,367,000 was generated by the Casino Business. A loss attributable to equity holders of the Company of approximately HK$293,677,000 (2013: loss of HK$137,147,000) was recorded. The increase in loss for the year 2014 compared to the year 2013 was mainly attributable to (i) the administrative expenses in connection with the newly acquired Casino Business; (ii) pre-construction administrative expenses for the Integrated Resort Development; (iii) increase in other operating and administrative expenses due to the Group’s expansion; and (iv) an impairment of goodwill recognized during the year 2014.

Lighting Business

The management of the Company will continue to monitor and review both the operations and financial performance of the Lighting Business to formulate long-term business strategy for the Group in the coming year, which may include restructuring or downsizing the Lighting Business, if the unfavorable operating environment continues.

– I-66 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Property Development

Those contracted residential property units are planned for delivery to customers and will be recognised as turnover in coming years. Considered the property market in the PRC and the changes of relevant government policy in relation to the real estate market from time to time, the Group will closely monitor the market condition for the sale of the Yueyang Residential Properties.

Integrated Resort Development

The Jeju Project is expected to be one of South Korea’s largest integrated resorts, spanning across a land area of approximately 2.5 million square metres. Slated to open progressively from 2017, under the current development plan, the Jeju Project will house Jeju’s largest family theme park offering more than 20 rides and attractions in 7 different zones under the themes of myths and legends from all over the world; Jeju’s largest adventure waterpark and one of South Korea’s most exciting themed retail and food complexes. Its premium hotels will comprise more than 2,000 rooms, boasting luxury villas, Jeju Island’s first 6-star hotel and a destination spa. The hotels will be equipped with full meeting and conference facilities that are suitable for hosting regional and international meetings, incentives, conventions and events. In addition, the hotels will provide cultural facilities, leisure and entertainment amenities, as well as approximately 1,500 luxury serviced apartments and residential villas. The entire development is expected to be completed by 2019.

Casino Business

The casino which is owned and operated by a joint venture of the Company, located in Jeju, Korea, is now operated under the tradename of ‘‘Genting Jeju’’, and currently has 26 Baccarat tables, 1 Blackjack table, 1 Tai Sai table, 1 Roulette table and 16 slot machines.

With over 40 year’s history, Korea is one of the largest gaming market in Asia with USD2.4 billion in revenue in year 2013. With the commencement of coming world-class integrated resorts in Jeju and the recent uncertainty in Macau gaming market, the Group believes Korea gaming market will have a significant growth in the coming years.

Prospects

The Company will continue to pay close attention to the performance of the existing businesses of the Group and strive to foster its business development and enhance financial and operating performances. To pursue in this direction, save for the business development mentioned herein and detailed under the paragraphs headed ‘‘Reasons for the Rights Issue and Use of Proceeds’’ in the Letter from the Board of this circular, the management of the Company will proactively seek for any investment opportunity in other businesses with promising prospect and/or companies with profitability track record such that the income base of the Group could be broadened and diversified.

– I-67 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. MATERIAL CHANGE

The Directors confirm that, save and except for the below, there was no material change in the financial or trading position or outlook of the Group since 31 December 2014, being the date to which the latest audited consolidated financial statements of the Group were made up, up to the Latest Practicable Date:

(i) the Group recorded an increase in revenue and costs for the three months ended 31 March 2015 as compared to the corresponding period in 2014 due to the increase in sales of the Lighting Business;
(ii) the Group recorded an exchange rate gain as a result of appreciation of KRW and such gain has been booked as ‘‘other income’’ of the Group for the three months ended 31 March 2015;
(iii) the Group recorded an increase in distribution and selling expenses for the three months ended 31 March 2015 as compared to the corresponding period in 2014 mainly due to increase in advertising expenses incurred for the promotion of the Jeju Project and the Lighting Business;
(iv) the Group recorded an increase in administrative expenses for the three months ended 31 March 2015 as compared to the corresponding period in 2014 mainly due to (a) the administrative expenses incurred for the Aircraft; (b) the development of the Jeju Project; (c) the security trading costs (please refer to (vii) below); and (d) the overall expansion of the Group’s business and operation which required additional administrative expenses such as legal and professional expenses, and directors’ and staff’s salary;
(v) the Group recorded an increase in finance costs for the three months ended 31 March 2015 as compared to the corresponding period in 2014. The newly incurred finance costs were related to (a) the additional bank borrowings of the Group totaling approximately HK$27,720,000 which had been drawn down from 1 January 2015 to 31 March 2015; (b) the Senior Note; and (c) the finance lease regarding the Aircraft. As disclosed in the section headed ‘‘Statement of Indebtedness’’ in the Letter from the Board, the Group’s total outstanding indebtedness as at 30 April 2015 comprised (a) bank borrowings of HK$88,525,000; (b) the Senior Note which was issued on 27 January 2015 with an outstanding principal amount of HK$774,000,000; (c) finance lease payables of HK$297,671,000; and (d) amount due to a non-controlling interest of HK$600,923,000;

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(vi) the Group invested approximately HK$469 million for the purchase of marketable securities of two companies listed on the Main Board of the Stock Exchange during the three months ended 31 March 2015. The aforesaid investment was booked as available for sale financial assets of the Group as at 31 March 2015;
(vii) the Group recorded an increase in trade and other receivables as at 31 March 2015 as compared to 31 December 2014 which was mainly due to (i) the payment of deposit of HK$210 million on 5 February 2015 to a potential vendor, who is an Independent Third Party, for a potential acquisition of a target group which owns 75% interest in a golf club in the PRC; and (ii) the payment of HK$50 million to an appointed agent assisting the Group in exploring business and investment opportunities in Korea for costs on account of its professional fees and deposits that may be paid by it on behalf of the Group in any suitable investment opportunities that it may identify for the Group;
(viii) the Group recorded a decrease in cash and bank balances as at 31 March 2015 as compared to 31 December 2014 which was mainly due to (a) payment for construction of Yueyang Project; (b) payment for construction of the training centre in Jeju, Korea; (c) payment for construction of the Jeju Project and other administrative and operating expense; and (d) other general working capital used during the three months ended 31 March 2015. Subsequently on 16 April 2015, a deposit of approximately HK$5,187 million was received from LIL to fortify its obligation under the Underwriting Agreement and the Irrevocable Undertaking and such deposit was booked under payables as temporary receipt from LIL;
(ix) the Group’s 50% owned casino in Jeju has been opened on 18 January 2015. The Directors consider that the grand opening of this casino opens a new phase of the Group’s presence and participation in the Korean casino industry; and
(x) the Group held a groundbreaking ceremony on 12 February 2015 in Jeju which marked the official start of the construction work of the Jeju Project.

5. WORKING CAPITAL

Taking into account the net proceeds from the rights issue, its presently available financial resources, including internally generated funds from operation and available financial facilities of the Group, the Directors after due and careful enquiry are of the opinion that Group has sufficient working capital for its present requirements, that is for a least the next 12 months from the date of publication of this circular, in the absence of unforeseeable circumstances.

6. FOREIGN EXCHANGE

As at the Latest Practicable Date, there was no restriction affecting the remittance of profits or repatriation of capital of the Company into Hong Kong from outside of Hong Kong.

7. STATEMENT OF INDEBTEDNESS

At the close of business on 30 April 2015, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this Circular, the Group had the following indebtedness:

– I-69 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Borrowings

The table below sets forth the Group’s total outstanding indebtedness as at 30 April 2015:

Notes Bank borrowings (1) Senior notes (2) Finance lease payables (3) Amount due to a non-controlling interest (4)	Total HK$’000 88,525 774,000 297,671 600,923
	1,761,119

Notes:

(1) Bank borrowings were secured by the Group’s certain of property, plant and equipment, intangible assets and prepaid lease payment with carrying amounts of approximately HK$60,885,000, HK$32,794,000 and HK$15,368,000 respectively as at 30 April 2015.
(2) The Group’s senior notes were secured by pledged shares of a wholly-owned subsidiary of the Company.
(3) The Group’s finance lease payables with an aggregate amount of approximately HK$297,671,000 were secured by mortgaged over certain of the Group’s property, plant and equipment with carrying amount of approximately HK$406,982,000 as at 30 April 2015.
(4) The amount due to a non-controlling interest is unsecured, carrying interest at 5% per annum and repayable in 2019.

Contingent liabilities

As at the close of business on 30 April 2015, the Group did not have any contingent liabilities.

Disclaimer

Save as disclosed above, and apart from normal trade payable and intra-group liabilities, the Group did not, as at the close of business on 30 April 2015, have any outstanding mortgages, charges or debentures, loan capital issued, or bank overdrafts and loans, debt securities or other similar indebtedness, liabilities under acceptances (other than normal trade bills) or acceptable credits or any hire purchase commitments, finance lease commitments, guarantees or other material contingent liabilities.

– I-70 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

(A) STATEMENT OF UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS

The following is an illustrative and unaudited pro forma statement of adjusted consolidated net tangible assets of the Group has been prepared on the basis of the notes set out below, for the purpose of illustrating the effect of the Rights Issue as if it had taken place on 31 December 2014. This unaudited pro forma statement of adjusted consolidated net tangible assets has been prepared for illustrative purposes only, and because of its hypothetical nature, it may not give a true picture of the financial position of the Group had the Rights Issue been completed as at 31 December 2014 or at any future date. Unless otherwise defined, terms and herein shall have the same meanings as those defined in the Circular.

							Unaudited pro
						Unaudited	forma adjusted
						consolidated	consolidated
		Less:				net tangible	net tangible
		Audited			Unaudited	assets per	assets per
		consolidated		Add:	pro forma	share prior	share after
	Audited	intangible	Audited	Estimated	consolidated	to the Share	implementation
	consolidated	assets and	consolidated	proceeds less	net tangible	Consolidation	of the Share
	net assets	goodwill	net tangible	related	assets after	and Rights	Consolidation
	as at	as at	assets as at	expenses	completion of	Issue as at	and completion
	31 December	31 December	31 December	from the	the Rights	31 December	of the Rights
	2014	2014	2014	Rights Issue	Issue	2014	Issue
	(Note i)	(Note ii)		(Note iii)		(Note iv)	(Note v)
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$	HK$
Rights Issue of
18,696,253,870
Rights Shares	3,911,132	(73,311)	3,837,821	6,446,002	10,283,823	0.21	0.50

Notes:

(i) Reference is made to the published annual report of the Company for the year ended 31 December 2014 (the ‘‘Annual Report’’).
(ii) The audited consolidated intangible assets and goodwill of the Group as at 31 December 2014 of HK$57,176,000 and HK$16,135,000, respectively, as extracted from the Annual Report.
(iii) The estimated proceeds less related expenses from the Rights Issue is calculated based on 18,696,253,870 Rights Shares to be issued at the subscription price of HK$0.35 per Rights Share. The estimated net proceeds are arrived at based on the gross proceeds from the Rights Issue of approximately HK$6,543,689,000 less the estimated related expenses of approximately HK$97,687,000.
(iv) Based on 18,696,253,872 shares in issue as at 31 December 2014 before implementation of the Share Consolidation and before completion of the Rights Issue.
(v) Based on 20,565,879,257 shares, comprising (i) 1,869,625,387 Consolidated Shares in issue and (ii) 18,696,253,870 Rights Shares to be issued, assuming that the Share Consolidation and Rights Issue had been completed on 31 December 2014.
(vi) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the Group to reflect any trading results or other transactions of the Group entered into subsequent to 31 December 2014.

– II-1 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

(B) ACCOUNTANT’S REPORT ON THE UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

The following in the full text of a report received from the reporting accountants, Zenith CPA Limited, Certified Public Accountants, Hong Kong, for the purpose of incorporation in the Circular:

==> picture [58 x 55] intentionally omitted <==

ZENITH CPA LIMITED 誠豐會計師事務所有限公司 10/F., China Hong Kong Tower, 8-12 Hennessy Road, Wanchai, Hong Kong

香港灣仔軒尼詩道8-12號中港大廈10樓

The Board of Directors Landing International Development Limited Suites 5801-5804, 58th Floors Two International Finance Centre 8 Finance Street Central Hong Kong

Dear Sirs,

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Landing International Development Limited (the ‘‘Company’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group’’) by the directors of the Company (the ‘‘Directors’’) for illustrative purposes only. The unaudited pro forma financial information consists of the statement of unaudited pro forma adjusted consolidated net tangible assets as at 31 December 2014, and related notes (the ‘‘Unaudited Pro Forma Financial Information’’) as set out on Section A of Appendix II to circular issued by the Company dated 29 May 2015 (the ‘‘Circular’’). The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described in Section A of Appendix II to the Circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the proposed rights issue on the basis of ten rights shares for every one Consolidated Share (as defined in the Circular) held on the Record Date (the ‘‘Rights Issue’’) of the Company. As part of this process, information about the Group’s audited consolidated net assets has been extracted by the Directors from the Group’s financial statements for the year ended 31 December 2014, on which an audit report has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with

– II-2 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ (‘‘AG 7’’) issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’).

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 ‘‘Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus’’, issued by the HKICPA. This standard requires that the reporting accountant comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the Directors have complied the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For the purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of Unaudited Pro Forma Financial Information included in the Circular is solely to illustrate the impact of a significant events or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction at 31 December 2014 would have been as presented.

A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial Information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

. The related unaudited pro forma adjustments give appropriate effect to those criteria; and
. The Unaudited Pro Forma Financial Information reflects the proper application on those adjustments to the unadjusted financial information.

– II-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

The procedures selected depend on the reporting accountant’s judgement, having regard to the reporting accountant’s understanding of the nature of the Group, the event or transaction in respect of which the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma 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:

(a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully,

Zenith CPA Limited

Certified Public Accountants Cheng Po Yuen Practising Certificate Number: P04887 Hong Kong

29 May 2015

– II-4 –

PROPERTY VALUATION REPORT

APPENDIX III

==> picture [90 x 52] intentionally omitted <==

Unit 3806, 38/F, China Resources Building 26 Harbour Road, Wan Chai, Hong Kong Tel (852) 2529 6878 Fax (852) 2529 6806 E-mail [email protected] http://www.romagroup.com

29 May 2015

Landing International Development Limited

Suites 5801–5804, 58/F., Two International Finance Centre, No. 8 Finance Street, Central, Hong Kong

Dear Sir/Madam,

Re: Various Properties in the People’s Republic of China and the Republic of Korea

In accordance with your instructions for us to value the properties held by Landing International Development Limited (the ‘‘Company’’) and/or its subsidiaries (together with the Company referred to as the ‘‘Group’’) in the People’s Republic of China (the ‘‘PRC’’) and the Republic of Korea, we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market values of the properties as at 30 April 2015 (the ‘‘Date of Valuation’’) for the purpose of incorporation in the Circular of the Company dated 29 May 2015.

1. BASIS OF VALUATION

Our valuations of the properties are our opinion of the market values of the concerned properties which we would define as intended to mean ‘‘the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion’’.

Market value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes.

2. PROPERTY CATEGORIZATION

In the course of our valuations, the properties owned by the Group are categorized into the following groups:

. Group I (Property held by the Group under construction in the PRC);
. Group II (Property held by the Group for owner-occupation in the PRC); and

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PROPERTY VALUATION REPORT

APPENDIX III

. Group III (Properties held by the Group under construction in the Republic of Korea).

3. VALUATION METHODOLOGIES

In valuing the properties in Groups I and III which are currently under development as at the Date of Valuation, we have assumed that they will be developed and completed in accordance with the latest development proposals provided to us by the Group. In arriving at our opinion of values, we have taken into account the construction cost and professional fees relevant to the stage of construction as at the Date of Valuation and the remainder of the cost and fees to be expended to complete the respective developments.

For the property No. 2, due to the specific purpose for which most of the buildings and structures of the property have been constructed, there are no readily identifiable market comparables. Thus the buildings and structures have been valued on the basis of its depreciated replacement costs instead of direct comparison method. The depreciated replacement cost approach (‘‘DRC’’) is based on an estimate of the Market Value for the existing use of the land, plus the current cost of replacement of the existing structures less deductions for physical deterioration and all relevant forms of obsolescence and optimization. In practice, Depreciated Replacement Cost approach may be used as a substitute for the Market Value of specialized property only, due to the lack of market comparables available. Our valuation does not necessarily represent the amount that might be realized from the disposition of the property and the DRC is subject to adequate profitability of the concerned business.

4. TITLE INVESTIGATION

For the properties in the PRC and the Republic of Korea, we have been provided with extracts of various documents and have been advised by the Group that no further relevant documents have been produced. However, we have not examined the original documents to verify the existing titles to the properties or any amendment, which may not appear on the copies handed to us. We do not accept a liability for any interpretation which we have placed on such information which is more properly the sphere of your legal adviser. In the course of our valuation of the properties in the PRC, we have relied to a very considerable extent on the information given by the Group and the Group’s PRC legal advisor, Jian Da Law Firm (景達律師事務所) regarding the title to the properties in the PRC. All documents have been used for reference only.

We have also relied on the advice given by the Group that the Group has valid and enforceable titles to the properties which is freely transferable, and has free and uninterrupted right to use the same, for the whole of the unexpired term granted subject to the payment of annual government rent/land use fees and all requisite land premium/purchase consideration payable have been fully settled.

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PROPERTY VALUATION REPORT

APPENDIX III

5. VALUATION ASSUMPTIONS

Our valuations have been made on the assumption that the owners sell the properties in the market in their existing states without the benefit of deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements which would serve to affect the values of such properties. In addition, no account has been taken of any option or right of pre-emption concerning or affecting the sale of the properties and no allowance has been made for the properties to be sold in one lot or to a single purchaser.

6. SOURCE OF INFORMATION

In the course of our valuations, we have relied to a very considerable extent on the information provided by the Group and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, identification of properties, particulars of occupation, site/floor areas, ages of buildings and all other relevant matters which can affect the values of the properties. All documents have been used for reference only.

We have no reason to doubt the truth and accuracy of the information provided to us. We have also been advised that no material facts have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and have no reason to suspect that any material information has been withheld.

7. VALUATION CONSIDERATION

We have inspected the exterior and, where possible, the interior of certain properties. No structural survey has been made in respect of the properties. However, in the course of our inspections, we did not note any serious defects. We are not, however, able to report that the properties are free from rot, infestation or any other structural defects. No tests were carried out on any of the building services.

We have not carried out on-site measurement to verify the site/floor areas of the properties under consideration but we have assumed that the site/floor areas shown on the documents handed to us are correct. Except as otherwise stated, all dimensions, measurements and areas included in the valuation certificates are based on information contained in the documents provided to us by the Group and are therefore approximations.

No allowance has been made in our valuations for any charges, mortgages or amounts owing on the properties nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

Our valuations are prepared in compliance with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Hong Kong Code on Takeovers and Mergers, and in accordance with the HKIS Valuation Standards (2012 Edition) published by The Hong Kong Institute of Surveyors.

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PROPERTY VALUATION REPORT

APPENDIX III

For the purpose of compliance with Rule 11.3 of the Code on Takeovers and Mergers and as advised by the Group, the potential tax liabilities which may arise from the sale of the properties in the PRC include: (i) PRC business tax (equivalent to 5% of sales revenue); (ii) PRC land appreciation tax (equivalent to 30%-60% of the net appreciation amount); and (iii) PRC corporate income tax (25%). For the property No. 1 of Group I and No. 2 of Group II, the likelihood of the potential tax liability being crystallized is remote as the Company has no intention to dispose of its property interest.

As advised by the Group, the potential tax liabilities which would arise on the disposal of the property interests held by the Group in the Republic of Korea, there is a comprehensive real estate holding tax (equivalent to 0.75%-2% of the net appreciation amount). For the property Nos. 3 and 4 of Group III, the likelihood of the potential tax liability being crystallized is remote as the Company has no intention to dispose of its property interest.

8. REMARKS

Unless otherwise stated, all monetary amounts stated in our valuations are in Renminbi (‘‘RMB’’) and South Korean Won (‘‘KRW’’).

Our Summary of Values and Valuation Certificates are attached.

Yours faithfully,

For and on behalf of Roma Appraisals Limited

Dr. Alan W K Lee

BCom(Property) MFin PhD(BA) MHKIS RPS(GP) AAPI CPV CPV(Business) Associate Director

Note: Dr. Alan W K Lee is a Registered Professional Surveyor (General Practice), a member of Hong Kong Institute of Surveyors and an Associate of Australian Property Institute. He has over 11 years’ valuation experience in Hong Kong, Macau, the PRC, the Asia Pacific Region including the Republic of Korea and European countries.

– III-4 –

PROPERTY VALUATION REPORT

APPENDIX III

SUMMARY OF VALUES

Group I — Property held by the Group under construction in the PRC

Market Value in Existing State as at No. Property 30 April 2015 1. A residential development named Tang Xi Ren Jia RMB852,000,000 situated in Nan Hu Feng Jing District, Yueyang City, Hunan Province, The PRC 中國湖南省岳陽市南湖風景區的一個住宅項目名為棠溪人家

Total: RMB852,000,000

Group II — Property held by the Group for owner-occupation in the PRC

No. Property 2. An industrial development situated at the No. 88 Wei First Road, Dingmao, Xin District, Zhenjiang City, Jiangsu Province, The PRC 中國江蘇省鎮江市新區丁卯緯一路88號的一個工業項目 Total:	Market Value in Existing State as at 30 April 2015 RMB75,400,000
	RMB75,400,000

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PROPERTY VALUATION REPORT

APPENDIX III

Group III — Properties held by the Group for under construction in the Republic of Korea

No. Property 3. The Headquarter, Areas A, H and R in the Myths-History Park at Mt. 24 Seogwang-ri, Andeok-myeon, Seoguipo-si, Jeju City, The Republic of Korea No. Property 4. 6 parcels of land in Saekdal-dong, Seogwipo-City, Jeju City, The Republic of Korea Total:	Market Value in Existing State as at 30 April 2015 KRW151,160,000,000 Market Value in Existing State as at 30 April 2015 KRW5,400,000,000
	KRW156,560,000,000

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PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Group I — Property held by the Group under construction in the PRC

No. Market Value in Particulars of Existing State as at Property Description and Tenure Occupancy 30 April 2015 1. A residential The property comprises a parcel As advised by the RMB852,000,000 development named of land with a site area of about group, the Tang Xi Ren Jia 156,403 sq.m. (or about property is under situated in Nan Hu Feng 1,683,522 sq.ft.) and 113 construction. Jing District, Yueyang residential blocks in a mass lowCity, Hunan Province, rise residential development, The PRC known as Tang Xi Ren Jia (棠溪人家), scheduled to be completed 中國湖南省岳陽市南湖 in 2017. 風景區的一個住宅項目名為棠溪人家 The property is planned to be developed into a high-end residential development with a total planned gross floor area (‘‘GFA’’) of approximately 109,471 sq.m.. Details of which are as follows:

Portion Residential Commercial Club House Total	GFA (sq.m.) 88,111.0 15,089.5 6,270.5
	109,471.0

The land use rights of the property have been granted for a term expiring on 20 April 2079 for residential use.

Notes:

Pursuant to a State-owned Construction Land Use Rights Grant Contract No. XC (1)013526 dated 24 March 2009 (the ‘‘Land Contract’’), the construction land use rights of the property with a site area of 156,403 sq.m. have been contracted to be granted to Yueyang Nanhu Meishu Properties Limited (岳陽南湖美墅置業有限公司) for a term of 70 years expiring on 20 April 2079 for residential use. Details of the development constraints are as follows:

a.	Land No.	:	YTP2007–4
b.	Maximum Plot Ratio	:	0.71
c.	Maximum Site Coverage	:	20.6%
d.	Maximum height	:	10m (Northern Part of the Property)
			19m (Southern Part of the Property)
e.	Minimum open space area	:	41.2%
f.	Consideration	:	RMB58,200,000

Pursuant to a Stated-owned Land Use Rights Certificate, Yue Zi Guo Yong 2010 Di No. 00349 (岳字國用2010第00349號), issued by Yueyang City Land and Resources Bureau (岳陽市國土資源局) dated 9 February 2010, the property with a site area of 156,403 sq.m. is have been granted to Yueyang Nanhu Meishu Properties Limited (岳陽南湖美墅置業有限公司) for a term expiring on 20 April 2079 for residential use.

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PROPERTY VALUATION REPORT

APPENDIX III

Pursuant to a Construction Land Planning Permit Yue Gui (Nan Yong) 2010-1 Di Zi No. 5 dated 29 July 2010, the land of the property with a site area of 176,471 sq.m. was permitted to be developed.
Pursuant to Construction Works Planning Permit Jian Zi Di Yue Gui (Gong) No. 2012040 (建字第岳規(工)2012040號) issued by Yuyang City Planning Bureau dated 27 August 2012, Yueyang Nanhu Meishu Properties Limited (岳陽南湖美墅置業有限公司) was permitted to develop the clubhouse of the property with a GFA of 6,270.5 sq.m..
Pursuant to Construction Works Planning Permit Jian Zi Di Yue Gui (Gong) No.2013011 (建字第岳規(工)2013011號) issued by Yuyang City Planning Bureau dated 10 May 2013, Yueyang Nanhu Meishu Properties Limited (岳陽南湖美墅置業有限公司) was permitted to develop the residential portion of the property with a GFA of 88,111 sq.m..
Pursuant to Construction Works Planning Permit, Jian Zi Di Yue Gui (Gong) No.2015008 (建字第岳規 (工) 2015008號) issued by Yuyang City Planning Bureau dated 30 March 2015, the construction of the commercial portion of the property has granted to the Yueyang Nanhu Meishu Properties Limited (岳陽南湖美墅置業有限公司) with a GFA of 15,089.5 sq.m..
Pursuant to 55 Commodity Housing Pre-Sale Permits, a total GFA of approximately 31,018.26 sq.m. of the property were allowed for pre-sale.
As advised by the Group, Phase 2 of residential portion with 36,242 sq.m. will be scheduled for sale in December 2015.

For the commercial and clubhouse portion, they will be for sale in September 2015 and August 2015 respectively.

The status of title in accordance with the information provided by the Group is as follows:

State-owned Land Use Rights Grant Contract	Yes
Land Use Rights Certificate	Yes
Construction Land Planning Permit	Yes
Construction Works Planning Permit	Yes
Commodity Housing Pre-Sale Permits	Yes

The gross development value of the property as at the Date of Valuation is RMB1,788,000,000.
As advised by the Company, the expended construction cost as at the Date of Valuation was approximately RMB362,000,000. We are also advised that the total estimated construction cost by the Group is approximately RMB641,000,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alia, the following information:
a. the Land Contract is legally valid;
b. Yueyang Nanhu Meishu Properties Limited has legally obtained the land use rights of the property and is entitled to transfer, lease, mortgage and/or dispose of by other means the land use rights of the property;
c. Yueyang Nanhu Meishu Properties Limited has acquired the relevant Pre-Sale Permits and approvals for the property.
Yueyang Nanhu Meishu Properties Limited (岳陽南湖美墅置業有限公司) is a wholly-owned subsidiary of the Company.
Our inspection was performed by Ms. Vinci Q.J. Hou M.Sc., with about 1-year property valuation experience, in May 2015.

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PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Group II — Property held by the Group for owner-occupation in the PRC

No. Market Value in Particulars of Existing State as at Property Description and Tenure Occupancy 30 April 2015 2. An industrial The property comprises a parcel The property is RMB75,400,000 development situated at of land with a site area of about occupied by the the No. 88 Wei Yi 39,997.80 sq.m. and various Group for (Please see Note 3 Road, Dingmao, buildings and ancillary structures industrial use. for details) Xin District, erected thereon, which were Zhenjiang City, completed in about 2007 and Jiangsu Province, 2008. The PRC The property comprises nine 中國江蘇省鎮江市新區 single to 5-storey of buildings for 丁卯緯一路88號 workshops, office, dormitories, 的一個工業項目 warehouse and other ancillary uses with a total gross floor area (‘‘GFA’’) of approximately 24,200.18 sq.m. (260,491 sq.ft.).

The property also comprises five buildings without relevant title certificates.

The land use rights of the property have been granted for a term expiring on 22 March 2055 for industrial use.

Notes:

Pursuant to a State-owned Land Use Rights Certificate, Zhen Guo Yong 2005 Di No. 1156378 (鎮國用 2005第1156378號), issued by Zhenjiang City People’s Government (鎮江市人民政府), the land use rights of the property with a site area of 39,997.8 sq.m. have been granted to Jiangsu Wenrun Optoelectronic Technology Company Limited (江蘇穩潤光電科技有限公司) for a term expiring on 22 March 2055 for industrial use.
Pursuant to 7 Building Ownership Certificates, Zhen Fang Quan Zheng Ding Zi Di Nos. 70000803, 70000804, 70000805, 70000806, 70000807, 70000809 and 70000810 (鎮房權証丁字第70000803, 70000804, 70000805, 70000806, 70000807, 70000809及 70000810號), issued by Zhenjiang City Real Estate Management Bureau (鎮江市房產管理局) dated 22 January 2007, the property with a total GFA of 24,200.18 sq.m. is legally owned by Jiangsu Wenrun Optoelectronic Technology Company Limited (江蘇穩潤光電科技有限公司).
As advised by the Group, there are five buildings of the property with a total GFA of approximately 1,768.5 sq.m. without title documents. Such buildings are used as workshop, bathroom, dangerous goods warehouse and garages and we have attributed no commercial value to them.
We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alia, the following information:
a. Jiangsu Wenrun Optoelectronic Technology Company Limited has legally obtained the land use rights of a parcel of land with a site area of 39,997.80 sq.m. and the building ownership of 9 buildings with a total gross floor area of 24,200.18 sq.m.; and

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PROPERTY VALUATION REPORT

APPENDIX III

b. Jiangsu Wenrun Optoelectronic Technology Company Limited is entitled to transfer, lease, mortgage and/or by other means dispose of the land use rights and the buildings of the property with relevant title certificate.
As advised by the Group, the property is effectively owned as to 69.44% by the Group.
Pursuant to a Maximum Amount Mortgage Contract, the mortgage in favour of Zhenjiang Ding Mao Branch of Bank of China Corporation Limited (中國銀行股份有限公司鎮江丁卯橋支行) with maximum mortgage of RMB59,443,600 vide contract No.150271913E14110501–3 dated 14 January 2015.
Our inspection was performed by Ms. Vinci Q.J. Hou M.Sc., with about 1-year property valuation experience, in May 2015.

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PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Group III — Properties held by the Group under construction in the Republic of Korea

No. Property

Description and Tenure

Market Value in Particulars of Existing State as at Occupancy 30 April 2015

The Headquarter, Areas A, H and R in the Myths-History Park at Mt. 24 Seogwang-ri, Andeok-myeon, Seoguipo-si, Jeju City, The Republic of Korea

The property comprises totally 4 parcels of land namely Headquarter, Area A, Area H and Area R with total site area of approximately 2,338,125 sq.m. Detail of which are as follows:

The property is KRW151,160,000,000 currently under construction.

Headquarter Area A Area H Area R Total	Site Area (sq.m.) 18,512.0 769,261.9 597,928.3 952,422.8
	2,338,125

The Headquarter of the property comprise a 2-storey building with a total gross floor area (‘‘GFA’’) of approximately 1,913.53 sq.m. for office use.

Area A, Area H and Area R of the property have a total planned useable area of approximately 1,171,977.9 sq.m., scheduled to be completed by 2019. Detail of which are as follows:

Area A Area H Area R Total	Useable Area (sq.m.) 542,970.0 342,978.4 286,029.5
	1,171,977.9

The Property is held under freehold land.

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PROPERTY VALUATION REPORT

APPENDIX III

Notes:

Pursuant to the Land Acquisition Agreement entered into between Jeju Free International City Development Center (‘‘JDC’’) and Landing Jeju Development Co., Ltd. (‘‘SPC’’), a direct wholly-owned subsidiary of the Company, on 25 October 2013, SPC has agreed to acquire and JDC has agreed to sell Areas A, R and H of the property with a total site area of 2,319,613 sq.m. at a consideration of KRW136 billion.

According to the said Land Acquisition Agreement, the designated and approved land use of the three parcels of land is set out below:

Area A — Visual theme park, aquatic park, recreational facilities with accommodation

Area R — Commercial and residential facilities

Area H — Theme park in relation to world food culture

As per Group’s Korean legal opinion, the property is legally held by SPC.

Pursuant to the Real Estate Sale and Purchase Agreement dated 11 December 2013, Lee Won Ju has agreed to sell the headquarter portion of the property with a GFA of 1,913.53 sq.m. with a consideration of KRW5,000,000,000.
As advised by the Group, for the Areas A, R and H of the property, the expended construction cost as at the Date of Valuation was approximately KRW500,000,000. We are also advised that the total estimated construction cost of the property by the Group is approximately KRW1,451,000,000,000.
Our inspection was performed by Ms. Joanna T.Y. Cheung B.Sc., with over 2-year property valuation experience in May 2015.
The gross development value upon completion is KRW1,970,000,000,000.

– III-12 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

No. Property Description and Tenure

Market Value in Particulars of Existing State as at Occupancy 30 April 2015

6 parcels of land in Saekdal-dong, Seogwipo-City, Jeju City, The Republic of Korea
The property comprises a 5 storey training center with a total planned gross floor area (‘‘GFA’’) of approximately 3,947.67 sq.m on 6 parcels of land with a total site area of 9,935 sq.m. (or about 106,940 sq.ft), scheduled to be completed in 2015 to 2016.

The property is KRW5,400,000,000. currently under construction.

The property is held under freehold land.

Notes:

Pursuant to various Land Certificates, the property with a total site area of 9,935 sq.m. is owned by Landing Korea Development Co., Ltd. Details of which are as follows:

Land No. Certificate No. 1412–1 2241–2001–003259 1412–5 2241–2008–006526 1412–6 2241–2008–006527 1412 2241–1996–250979 1418 2241–2003–002529 1418–1 2241–2002–005620 Total	Site Area (sq.m.) Effective Date of Ownership 1,523 19 August 2014 426 19 August 2014 3,395 19 August 2014 1,589 29 August 2014 2,278 11 February 2015 724 13 February 2015 9,935

Pursuant to various contracts, the property was transferred to Landing Korea Development Co., Ltd. with a total consideration of KRW5,390,000,000.
As advised by the Group, the expended construction cost as at the Date of Valuation was approximately KRW1,396,000,000. We are also advised that the total estimated construction cost by the Group is approximately KRW10,187,000,000.
Our inspection was performed by Ms. Joanna T.Y. Cheung B.Sc., with over 2-year property valuation experience in May 2015.
The gross development value upon completion is KRW14,200,000,000.

– III-13 –

PROPERTY VALUATION REPORT

APPENDIX III

PROPERTY, PROPERTY VALUATION AND RECONCILIATION OF APPRAISED PROPERTY VALUES WITH NET BOOK VALUES (RULE 5.07)

Roma Appraisals Limited, an independent valuer, has valued the lands, buildings and structures erected on the properties held by the Group at 31 March 2015 and is of the opinion that the market value of the lands and buildings and structures erected on the properties was amount about HK$2,268,954,000 as at 31 March 2015.

Set forth below is the reconciliation of the valuation figure of the Group’s properties with the figures included in the consolidated financial statement of the Group:

Net book value as at 31 December 2014 per the Group’s accountants’
report in Appendix III
— Properties under development (Yueyang)
— Properties under development (Landing Jeju)
— Prepaid lease payment (Wenren)
— Freehold land included in property, plant and equipment
(Landing Jeju)
— Freehold land included in property, plant and
equipment (Landing Korea)
— Building included in property, plant and equipment
(Landing Jeju)
— Building included in property, plant and equipment (Wenren)
Valuation surplus (unaudited)
Valuation of the lands and buildings and Structures as at 31 March
2015 as set out in the Valuation report in Appendix III

Total
HK$’000
896,654
682,149
15,873
403,076
24,545
30,609
68,331
2,121,237
147,717*
2,268,954
(Refer to
Notes 1 below)

Note: The exchange rates of HK$ & RMB and HK$ & KWR are adopted as follows:—

For 31 December 2014: HK$: RMB0.79174 HK$: KWR140.66 For 31 March 2015: HK$: RMB0.79074 HK$: KWR142.83

The surplus includes the increment of cost of properties under development and freehold land included in property, plant and equipment of about HK$58,174,000 and HK$13,249,000, respectively, from 31 December 2014 to 31 March 2015.

– III-14 –

GENERAL INFORMATION

APPENDIX IV

1. RESPONSIBILITY STATEMENTS

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular (other than the information relating to the Concert Party Group) is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein (other than the information relating to the Concert Party Group) or this circular misleading.

This circular includes particulars given in compliance with the Takeovers Code. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this circular (other than those relating to the Concert Party Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this circular (other than those expressed by the Concert Party Group) have been arrived at after due and careful consideration and there are no other facts not contained in this circular, the omission of which would make any statement in this circular misleading.

The directors of LIL jointly and severally accept full responsibility for the accuracy of the information contained in this circular (other than those relating to the Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this circular (other than those expressed by the Group) have been arrived at after due and careful consideration and there are no other facts not contained in this circular, the omission of which would make any statement in this circular misleading.

– IV-1 –

GENERAL INFORMATION

APPENDIX IV

2. SHARE CAPITAL

The authorised and issued share capital of the Company (i) as at the Latest Practicable Date; (ii) Upon completion of the Share Consolidation; (iii) Upon the completion of Share Consolidation and after the increase in authorised share capital; and (iv) immediately after completion of the Rights Issue is set out as follows:

(1) Assuming no new Shares being issued or repurchased by the Company on or before the Record Date:
(i) As at the Latest Practicable Date

Authorised: 50,000,000,000 Existing Shares Issued and fully paid: 18,696,253,872 Existing Shares Upon the completion of Share Consolidation Authorised: 5,000,000,000 Consolidated Shares Issued and fully paid: 1,869,625,387 Consolidated Shares	HK$ 500,000,000.00
	186,962,538.72
	HK$ 500,000,000.00
	186,962,538.72

(ii) Upon the completion of Share Consolidation
(iii) Upon the completion of Share Consolidation and after the increase in authorised share capital

Authorised: 100,000,000,000 Consolidated Shares Issued and fully paid: 1,869,625,387 Consolidated Shares	HK$ 10,000,000,000.00
	186,962,538.72

(iv) Immediately after completion of the Rights Issue

Authorised: 100,000,000,000 Consolidated Shares Issued and fully paid: 1,869,625,387 Consolidated Shares 18,696,253,870 Rights Shares 20,565,879,257 Total	HK$ 10,000,000,000.00
	186,962,538.72 1,869,625,387.00
	2,056,587,925.72

– IV-2 –

GENERAL INFORMATION

APPENDIX IV

The Rights Shares, when allotted and fully paid, will rank pari passu in all respects, including the rights to dividends, voting and return of capitals with the Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the Rights Shares in their fully-paid form.

No Shares have been issued since 31 December 2014, being the date on which the latest audited financial statements of the Group were made up.

Save as disclosed, the Company has no other outstanding options, warrants, derivatives or other convertible securities in issue which are convertible or exchangeable into Shares as at the Latest Practicable Date.

3. DISCLOSURE OF INTERESTS

(a) Director’s interest and short positions in shares, debentures or underlying shares of the Company and its associated corporations

As at the Latest Practicable Date, save as disclosed below, none of the Directors or the chief executive of the Company and their respective associates had or was deemed to have any interests in the long or short positions in the Shares, underlying shares and debentures or relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company or any associated corporation (within the meaning of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules (the ‘‘Model Code’’) adopted by the Company, to be notified to the Company and the Stock Exchange.

		Number of
		Share/	Approximately
		underlying	% of the issued
Name of Director	Capacity	shares held	share capital
Mr. Yang	Held by controlled	6,306,099,340 (Long)	33.73%
	corporations	(Notes 1 & 3)
	Held by controlled	6,056,099,340 (Short)	32.39%
	corporations	(Notes 1 & 3)
Ms. Xu	Interest of spouse	6,306,099,340 (Long)	33.73%
		(Notes 2 & 3)
	Interest of spouse	6,056,099,340 (Short)	32.39%
		(Notes 2 & 3)

– IV-3 –

GENERAL INFORMATION

APPENDIX IV

Notes:

(1) 6,056,099,340 ordinary shares are held by LIL whose entire issued share capital is held by Mr. Yang. Mr. Yang is one of the directors of Landing International Limited. On top of the 6,056,099,340 shares, Mr. Yang is deemed to be interested in 250,000,000 shares which were pledged to Magical Gains.
(2) Ms. Xu is the spouse of Mr. Yang. Under the SFO, Ms. Xu is deemed to be interested in the same number of Shares in which Mr. Yang is interested.
(3) LIL has pledged its entire shares of the Company to Xinrong Fund Limited. Therefore, Mr. Yang and Ms. Xu are interested in the Shares of a long position and short position.

(b) Substantial shareholders and other person’s interests in Shares and underlying Shares

As at the Latest Practicable Date, other than the interests disclosed above in respect of certain directors and chief executive of the Company, the interests and short positions of persons in the shares and underlying shares of the Company as recorded in the register required to be kept by the Company under Section 336 of the SFO, or who were, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital or relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company or any member of the Group:

		Number of	Approximately	Approximately
		Share/	%	of the issued
		underlying	share capital of
Name	Capacity	shares held		the Company
LIL (Note 1)	Beneficial owner	6,306,099,340 (Long)		33.73%
	Beneficial owner	6,056,099,340 (Short)		32.39%
Wing Lung Asset	Held by controlled	6,056,099,340	(Long)	32.39%
Management	corporation
Limited
(‘‘Wing Lung’’)
(Note 2)
Xinrong Fund Limited	Beneficial owner	6,056,099,340 (Long)		32.39%
(‘‘Xinrong’’)
(Note 2)

Notes:

LIL is wholly and beneficially owned by Mr. Yang as to 100%. LIL has pledged its entire shares of the Company to Xingrong. Therefore, LIL, Mr. Yang and Ms. Xu are interested in the shares of the Company of a long position and short position. On top of the 6,056,099,340 shares, LIL is deemed to be interested in 250,000,000 shares which were pledged to Magical Gains.
Xingrong is interested in 6,056,099,340 shares of the Company of a long position in which 6,056,099,340 shares of the Company are pledged by LIL as mentioned in note 1. Xingrong is wholly-owned by Wing Lung. Therefore, Wing Lung is deemed to be interested in the relevant Shares.

– IV-4 –

GENERAL INFORMATION

APPENDIX IV

4. ADDITIONAL DISCLOSURE OF INTEREST AND DEALING IN SHARES

As at the Latest Practicable Date,

(a) save for the Underwriting Agreement, there was no agreement, arrangement or understanding (including any compensation arrangement) between the Concert Party Group and other persons in relation to the transfer, charge or pledge of the Shares that may be issued and allotted to any parties acting in concert with any of them under the agreement;
(b) save as disclosed in the section headed ‘‘Shareholding structure of the Company’’ in the letter from the Board of this circular, none of the parties to the Underwriting Agreement or any parties acting in concert with any of them held, owned or controlled any other Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company. In addition, save for the disposal of 23,865,000 Shares made by Mrs. Chu Yuet Wah, an associate of Kingston Securities on 23 April 2015, none of the parties to the Underwriting Agreement and parties acting in concert with any of them had dealt for value in any Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company during the Relevant Period;
(c) save as disclosed in paragraph headed ‘‘3. DISCLOSURE OF INTERESTS’’ in this appendix, none of the directors of LIL was interested in any Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company or similar rights which are convertible or exchangeable into any Shares. In addition, none of the directors of LIL had dealt in any Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company during the Relevant Period;
(d) no person had irrevocably committed themselves to vote for or against the resolution(s) to be proposed at the SGM to approve the Rights Issue, the Underwriting Agreement, the Whitewash Waiver and the Connected Transaction;
(e) the Concert Party Group did not have any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with any other persons;
(f) none of the Directors had borrowed or lent any Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company or similar rights which are convertible or exchangeable into Shares to any person;
(g) save as disclosed in the paragraph headed ‘‘3. DISCLOSURE OF INTERESTS’’ in this appendix, none of the Directors was interested in any Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company or similar rights which are convertible or exchangeable into any Shares. In addition, none of the Directors had dealt for value in any Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company during the Relevant Period;

– IV-5 –

GENERAL INFORMATION

APPENDIX IV

(h) none of the Company and the Directors held any shares, convertible securities, warrants, options or derivatives of LIL or similar rights which are convertible or exchangeable into shares of the companies in the Concert Party Group. None of them had dealt for value in any shares, convertible securities, warrants, options or derivatives of LIL during the Relevant Period;
(i) save for the disposal of 23,865,000 Shares made by Mrs. Chu Yuet Wah, an associate of Kingston Securities on 23 April 2015, none of (i) the subsidiaries of the Company, (ii) the pension fund of the Company or of any of its subsidiaries, nor (iii) any advisers to the Company as specified in class of the definition of ‘‘associate’’ under the Takeovers Code (other than persons enjoying exempt principal trader status under the Takeovers Code), had any interest in the Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company and none of them had dealt for value in any securities of the Company during the Relevant Period;
(j) save for the disposal of 23,865,000 Shares made by Mrs. Chu Yuet Wah, an associate of Kingston Securities on 23 April 2015, no person had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Company or any person who is an associate of the Company by virtue of classes (1), (2), (3) and (4) of the definition of associate in the Takeovers Code and none of them had dealt for value in any securities of the Company as at the Latest Practicable Date;
(k) no Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company were managed on a discretionary basis by fund managers (other than exempt fund managers) connected with the Company and none of them had dealt for value in any securities of the Company during the Relevant Period;
(l) none of the Company nor any Directors had borrowed or lent any Shares, convertible preference shares, convertible securities, warrants, options or derivatives of the Company or similar rights which are convertible or exchangeable into Shares;
(m) there was no benefit to be given to any Directors as compensation for loss of office in any member of the Group or otherwise in connection with Share Consolidation, the Rights Issue, the Underwriting Agreement and the Whitewash Waiver;
(n) save for the Underwriting Agreement, there was no agreement, arrangement or understanding (including any compensation arrangement) (i) between LIL, the Concert Party Group and any of the Directors, recent Directors, Shareholders or recent Shareholders having any connection with or dependence upon the Share Consolidation, the Rights Issue, the Underwriting Agreement and the Whitewash Waiver; and (ii) between any Directors and any other persons having any connection with or dependence upon the Share Consolidation, the Rights Issue, the Underwriting Agreement and the Whitewash Waiver; and

– IV-6 –

GENERAL INFORMATION

APPENDIX IV

(o) there was no material contract entered into by the holders of the convertible preference shares or any parties acting in concert with any of them in which any Directors has a material personal interest.

5. MARKET PRICES

The table below shows the closing prices of the Shares on the Stock Exchange (i) at the end of each of the six calendar months immediately preceding the Latest Practicable Date and ending on the Latest Practicable Date, (ii) on the Latest Practicable Date prior to publication of the offer document, (iii) on the last business day immediately preceding the date of the initial announcement dated 22 April 2015, (iv) on 22 May 2015 (being the last trading day immediately preceding the Latest Practicable Date) and (v) on the Latest Practicable Date:

	Closing price
	per Share
	HK$
29 August 2014	0.475
30 September 2014	0.425
31 October 2014	0.415
28 November 2014	0.37
31 December 2014	0.3
30 January 2015	0.28
27 February 2015	0.249
31 March 2015	0.144
15 April 2015	0.145
30 April 2015	0.189
22 May 2015 (being the last trading day immediately preceding the
Latest Practicable Date)	0.151
Latest Practicable Date	0.158

The lowest and highest closing market prices of the Shares recorded on the Stock Exchange during the Relevant Period were HK$0.10 on 24 April 2015 and HK$0.36 on 12 January 2015 respectively.

– IV-7 –

GENERAL INFORMATION

APPENDIX IV

6. MATERIAL CONTRACTS

The following contracts (not being contracts entered into under the ordinary course of business of the Group) have been entered into by the Company within the two years immediately preceding the date of the Announcement and up to the Latest Practicable Date and are or may be material:

the memorandum of agreement dated 14 August 2013 entered into between the Company and JDC, an independent third party, in relation to the intended investment on the Land for the development, management and operation of certain real estate, entertainment and hotel and hospitality project and setting up of an indirectly wholly-owned subsidiary of the Company, Landing Jeju, with an initial paid-up capital of not less than KRW50,000,000,000 (equivalent to approximately HK$346,404,323.13), funded by a shareholder’s loan provided by LIL on 6 September 2013. Such shareholder’s loan provided by LIL is for the Company’s benefit and on normal commercial terms (or better to the Company) where no security over the Company’s assets will be granted in respect of such loan;
the project agreement dated 30 September 2013 entered into among the Company, SPC, Landing Jeju and JDC, an independent third party, in relation to the rights and obligations of the parties in respect of the intended investment on the Land;
the financial assistance agreement dated 15 October 2013 entered into between Anhui Landing, a company of which Mr. Yang is the controlling shareholder, as lender and the Yueyang Company, an indirectly wholly-owned subsidiary of the Company, as borrower in relation to the entrusted loan through the Bank of JiuJiang Co., Ltd (九江銀行股份有限公司) (‘‘Bank of JiuJiang’’) in the principal amount of RMB100 million, with an interest rate of 13% per annum for 24 months;
the entrusted loan agreement dated 15 October 2013 entered into among Anhui Landing, a company of which Mr. Yang is the controlling shareholder, as lender and the Yueyang Company, an indirectly wholly-owned subsidiary of the Company, as borrower and the Bank of JiuJiang, as bank in relation to the loan in the principal amount of RMB100 million, with an interest rate of 13% per annum for 24 months;
the land acquisition agreement dated 25 October 2013 entered into among JDC, an independent third party, as vendor, Landing Jeju, as purchaser and the Company, as guarantor in relation to the sale and acquisition of the Land at a consideration of KRW136 billion (equivalent to approximately HK$992.70 million);
the underwriting agreement dated 20 December 2013 entered between LIL, as underwriter and the Company in relation to the 2,196,068,698 rights Shares underwritten by LIL pursuant to the terms of such underwriting agreement at a commission rate at 1.18% payable by the Company;
the shareholders agreement dated 7 February 2014 entered into among the Company and HBL, an independent third party, as subscribers and Landing Jeju, as issuer in relation to the allotment and subscription of the shares of Landing Jeju at a

– IV-8 –

GENERAL INFORMATION

APPENDIX IV

consideration at KRW32,468.54 million (equivalent to approximately HK$235 million) and KRW82,500 million (equivalent to approximately HK$598 million) payable by the Company and HBL respectively to the effect that Landing Jeju would be owned as to 50% by the Company and 50% by HBL;

the subscription agreement dated 7 February 2014 entered into between the Company, as issuer and Dynamic Sales Investments Limited, an independent third party, as subscriber, in relation to the allotment and subscription of 810,000,000 new Shares at the subscription price of HK$0.3 per Share;
the subscription agreement dated 7 February 2014 entered into between the Company and Indus Properties Limited, an independent third party, as subscriber in relation to the subscription of 160,000,000 Shares at the subscription price of HK$0.4 per Share;
the subscription agreement dated 7 February 2014 entered into between the Company and Mr. Huang Youlong, an independent third party, as subscriber in relation to the subscription of 500,000,000 Shares at the subscription price of HK$0.4 per Share;
the subscription agreement dated 7 February 2014 entered into between the Company and Fantastic World Investments Limited, an independent third party, as subscriber in relation to the subscription of 400,000,000 Shares at the subscription price of HK$0.4 per Share;
the sale and purchase agreement dated 9 February 2014, as supplemented by the supplemental agreement dated 21 February 2014, entered into between the Company, as purchaser and Ms. Xu Ning, an executive Director and the spouse of Mr. Yang, who is the beneficial owner of Win Rich Group Limited (‘‘Win Rich’’), as vendor, in relation to the acquisition of the entire issued shares of Win Rich and the interest free loans due to Ms. Xu Ning by Win Rich at the total consideration of HK$141.5 million;
the memorandum of understanding dated 22 March 2014 entered into between the Company, as purchaser and Strategic Dragon Global Limited (‘‘Strategic Dragon’’), an independent third party, as vendor in relation to the acquisition of the entire issued share capital of Ultra Matrix International Limited (‘‘Ultra Matrix’’) at the issue price or conversion price (as the case may be) be referenced to the average closing price of approximately HK$0.6025 per Share as quoted on the Stock Exchange for the last twenty consecutive trading days up to and including 14 March 2014 and fixed at HK$0.60 per Share, if the proposed acquisition materialises;
the sale and purchase agreement dated 2 April 2014, as supplemented by a supplemental agreement dated 16 June 2014, entered into between Magical Gains, a directly wholly-owned subsidiary of the Company, as purchaser and Strategic Dragon, as vendor, and Mr. Lei Wai Un, an independent third party, the sole shareholder of the vendor, as guarantor, in relation to the acquisition of the entire issued share capital of Ultra Matrix at a consideration of KRW120,000,000,000 (equivalent to approximately HK$875,912,409);

– IV-9 –

GENERAL INFORMATION

APPENDIX IV

the subscription agreements dated 8 June 2014 entered into between (i) the Company, as issuer and China Winon Investment Limited, an independent third party, as subscriber in relation to the subscription of 700,000,000 Shares; and between (ii) the Company, as issuer and Mr. Zeng Kaifeng, an independent third party, as subscriber in relation to the subscription of 500,000,000 Shares, at the subscription price at HK$0.5;
the subscription and loan agreement dated 18 November 2014 entered into between Magical Gains, a directly wholly-owned subsidiary of the Company, as issuer, the Company and Pearl Concept, an independent third party, as subscriber in relation to the subscription of shares of Magical Gains so that each of the Company and Pearl Concept would own 50% of the issued capital of Magical Gains at an aggregate of HK$917,402,059, being the subscription price and the loan to Magical Gains from Pearl Concept;
the shareholder’s agreement dated 23 December 2014 entered into among the Company, Pearl Concept and Magical Gains to regulate their respective rights in Magical Gains;
the sale and purchase agreement dated 15 December 2014 entered between the Company as the purchaser, and Jumbo Prize Limited, an independent third party, as vendor in relation to the acquisition of, among other things, the entire issued share capital of Wealth Seed Group Limited at a consideration of HK$868,659,000; and
the Underwriting Agreement.

7. SERVICE CONTRACTS

As at the Latest Practicable Date:

(a) none of the Directors had entered or proposed to enter into a service contract with the Company or any of its subsidiaries or associated companies which is not determinable by the Company within one year without payment of compensation, other than statutory compensation;
(b) none of the Directors had entered into or amended any service contracts (including both continuous and fixed term contracts) with the Company or any of its subsidiaries or any of its associated companies within six months before the Latest Practicable Date;
(c) none of the Directors had any continuous service contracts with the Company or any of its subsidiaries or associated companies with a notice period of 12 months or more; and
(d) none of the Directors had any fixed term service contracts with the Company or any of its subsidiaries or associated companies with more than 12 months to run irrespective of the notice period.

– IV-10 –

GENERAL INFORMATION

APPENDIX IV

8. LITIGATION

As at the Latest Practicable Date, no member of the Group is engaged in any litigation or arbitration of material importance and there is no litigation or claims of material importance known to the Directors to be pending or threatened by or against any member of the Group.

9. QUALIFICATION OF EXPERTS

The following are the qualifications of the experts who have given opinions or advice which are contained in this circular:

Name Qualification Gram Capital Limited A licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO Zenith CPA Limited Certified Public Accountants Roma Appraisals Independent Property Valuer Limited

10. CONSENT OF EXPERTS

As at the Latest Practicable Date, each of Gram Capital, Zenith CPA Limited and Roma Appraisals Limited was not beneficially interested in the share capital of any member of the Group nor did it have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any Shares, convertible securities, warrants, options or derivatives which carry voting rights in any member of the Group nor did it have any interest, either direct or indirect, in any assets which have been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2014, being the date to which the latest published audited financial statements of the Group were made up.

Each of Gram Capital, Zenith CPA Limited and Roma Appraisals Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or references to its name in the form and context in which it respectively appears.

11. COMPETING INTERESTS

Save for Mr. Yang and Ms. Xu, being respectively the controlling shareholder and a shareholder of Anhui Landing, which is a company principally engaged in property development business in the PRC which competes or is likely to compete, either directly or indirectly, with the Group’s property development business in Yueyang, the PRC, none of the Directors or their respective close associates was interested in any business apart from the Group’s businesses which competes or is likely to compete, either directly or indirectly, with the Group’s business as at the Latest Practicable Date.

– IV-11 –

GENERAL INFORMATION

APPENDIX IV

12. DIRECTOR’S INTEREST IN CONTRACTS AND ASSETS

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to any business of the Group. As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been since 31 December 2014 (being the date to which the latest published audited financial statements of the Group were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

13. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial position or trading position of the Group since 31 December 2014, being the date to which the latest published audited financial statements of the Group were made up.

14. EXPENSES

The expenses in connection with the Rights Issue, including underwriting commission, financial advisory fees, printing, registration, translation, legal and accountancy charges are estimated to be approximately HK$98 million, which are payable by the Company.

15. CORPORATE INFORMATION

Registered office Clarendon House 2 Church Street Hamilton HM 11 Bermuda Principal place of business Suites 5801–5804 in Hong Kong 58/F. Two International Finance Centre No. 8 Finance Street, Central Hong Kong Authorised representatives Ms. Zhou Xueyun Suites 5801–5804 58/F. Two International Finance Centre No. 8 Finance Street, Central Hong Kong Ms. Lam Pui Sea Suites 5801–5804 58/F. Two International Finance Centre No. 8 Finance Street, Central Hong Kong

– IV-12 –

GENERAL INFORMATION

APPENDIX IV

Company secretary

Company secretary Ms. Lam Pui Sea Fellow member of the Hong Kong Institute of Certified Public Accountants Legal advisers to the Company As to Hong Kong law: Sidley Austin Level 39, Two International Finance Centre 8 Finance Street Central, Hong Kong As to Bermuda law: Conyers Dill & Pearman 2901 One Exchange Square 8 Connaught Place Central, Hong Kong Auditors and reporting Zenith CPA Limited accountants Certified Public Accountants 10/F, China Hong Kong Tower 8–12 Hennessy Road Wanchai Hong Kong Underwriter Kingston Securities Limited Suite 2801, 28th Floor One International Finance Centre 1 Harbour View Street Hong Kong Landing International Limited 263 Main Street, Road Town, Tortola, British Virgin Islands Principal share registrar in MUFG Fund Services (Bermuda) Limited Bermuda The Belvedere Building 69 Pitts Bay Road Pembroke HM08 Bermuda Branch share registrar in Tricor Standard Limited Hong Kong Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong

– IV-13 –

GENERAL INFORMATION

APPENDIX IV

Principal bankers DBS Bank (Hong Kong) Limited 73/F., The Center 99 Queen’s Road Central Central, Hong Kong China Minsheng Banking Corporation Limited 36/F., Bank of American Tower 12 Harcourt Road Central, Hong Kong Financial adviser to the Kingston Corporate Finance Limited Company Suite 2801, 28th Floor One International Finance Centre 1 Harbour View Street Hong Kong Independent financial adviser Gram Capital Limited to the Independent Board Room 1209, 12/F., Nan Fung Tower Committee and the 173 Des Voeux Road Central Independent Shareholders Central, Hong Kong

16. PARTICULARS OF DIRECTORS AND SENIOR MANAGEMENT

(a) Name and address

Name Correspondence Address Executive Directors Mr. Yang Zhihui Suites 5801–5804, 58/F. Two International Finance Centre No. 8 Finance Street Central, Hong Kong Mr. Ng Kwok Fai Suites 5801–5804, 58/F. Two International Finance Centre No. 8 Finance Street Central, Hong Kong Ms. Zhou Xueyun Suites 5801–5804, 58/F. Two International Finance Centre No. 8 Finance Street Central, Hong Kong

– IV-14 –

GENERAL INFORMATION

APPENDIX IV

Ms. Xu Ning Suites 5801–5804, 58/F. Two International Finance Centre No. 8 Finance Street Central, Hong Kong Independent non-executive Directors Mr. Fok Ho Yin, Thomas Suites 5801–5804, 58/F. Two International Finance Centre No. 8 Finance Street Central, Hong Kong Mr. Chen Lei Suites 5801–5804, 58/F. Two International Finance Centre No. 8 Finance Street Central, Hong Kong Ms. Zhang Xiaolan Suites 5801–5804, 58/F. Two International Finance Centre No. 8 Finance Street Central, Hong Kong

(b) Qualification and position held

Executive Directors

Mr. Yang Zhihui, aged 43, is the chairman and an executive Director of the Company since 19 July 2013. Mr. Yang is responsible for the leadership and effective running of the Board. He is the sole shareholder and the director of the Landing International Limited, the controlling shareholder of the Company. He is also the founder and chairman of board of directors of Anhui Landing, which is principally engaged in real estate development business in the PRC. He had been a director of Hubei Landing Holding Co., Ltd. (shares of which are listed on Shenzhen Stock Exchange, stock code: 000971) (‘‘Hubei Landing’’) until December 2014. Mr. Yang has over 11 years of experience in property development in the PRC.

Mr. Ng Kwok Fai, aged 42, is the deputy chairman and the executive Director of the Company since 22 April 2014. He has extensive experience in the financial markets and investment banking businesses and is mainly responsible for corporate management and optimizing the capital structure of the companies. He is a member of the American Institute of Certified Public Accountants, a member of the Hong Kong Institute of Certified Public Accountants and an associate member of both The Institute of Chartered Secretaries and Administrators in the United Kingdom and The Hong Kong Institute of Chartered Secretaries. Mr. Ng had been the chairman and executive director of Pacific Plywood Holdings Limited, a company whose shares are listed on the main board of the Stock Exchange (stock code: 767) from 24 November 2011 to 16 July 2013. He was also an independent non-executive director of China

– IV-15 –

GENERAL INFORMATION

APPENDIX IV

Information Technology Development Limited from 13 May 2011 to 24 April 2015, a company whose shares are listed on the Growth Enterprise Market of the Stock Exchange (stock code: 8178).

Ms. Zhou Xueyun, aged 58, is an executive Director since 9 August 2013. Ms. Zhou is currently the vice president of Anhui Landing. She was a director of Hubei Landing from August 2012 to August 2013 and a director of Landing Industrial (Hubei) Co., Ltd. from June 2012 to December 2014. Ms. Zhou served as the general manager of asset operation of Anhui Tourism Group Co., Ltd. and the manager of Anxing United Corporation of Zhuhai Special Economic Zone[#] (珠海經濟特區安興聯合總公司) during the period from 2002 to 2012.

Ms. Xu Ning, aged 35, is an executive Director since 2 October 2013. She worked in Hainan Airlines from 1998 to 2001. She was a director of Anhui Landing during the period from 2007 to 2012. Ms. Xu is the spouse of Mr. Yang.

Independent non-executive Directors

Mr. Fok Ho Yin, Thomas, aged 43, is an independent non-executive Director. Mr. Fok joined the Company since 11 June 2010. He had worked in the Listing Division of the Stock Exchange and has over 17 years of experience in the field of corporate finance and, in particular, in equity financing and financial restructuring. Mr. Fok is a member of Hong Kong Institute of Certified Public Accountants and CPA Australia, and also a Chartered Financial Analyst. Mr. Fok is currently an executive director and chief financial officer of Jian ePayment Systems Limited (shares of which are listed on the growth enterprise market of the Stock Exchange, stock code: 8165) and an independent non-executive director of China Smarter Energy Group Holdings Limited (formerly known as Rising Development Holdings Limited) (shares of which are listed on the main board of the Stock Exchange, stock code: 1004).

Mr. Chen Lei, aged 36, is an independent non-executive Director since 2 October 2013. Mr. Chen currently acts as an advisor of Nomura International (Hong Kong) Limited, before which he has served as an executive director of Nomura International (Hong Kong) Limited, and as analyst, associate and vice president of several investment banks. He obtained a bachelor’s degree from the University of Western Ontario.

Ms. Zhang Xiaolan, aged 38, is an independent non-executive Director since 2 October 2013. Ms. Zhang is currently the general manager of Financial Market Department in Hua Xia Bank, Hefei Branch and the Chief Risk Officer of SME Credit Department in Hua Xia Bank, Hefei Division. From 2010 to 2012, she was the general manager of Corporate Business Department in Hua Xia Bank, Hefei Branch. Ms. Zhang was the branch president of Bank of China, Hefei, Anhui Province Tongcheng Road Branch from 2006 to 2008 and a sales officer of Corporate Business Department in Bank of China, Hefei, Anhui Province Branch from 2009.

– IV-16 –

GENERAL INFORMATION

APPENDIX IV

17. MISCELLANEOUS

The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and its head office and principal place of business is Suites 5801–5804, 58/F, Two International Finance Centre, No. 8 Finance Street, Central, Hong Kong.
The directors of LIL are Mr. Yang Zhihui, Mr. Duan Chuanhong and Mr. Ng Wang To.
The registered office of LIL is at 263 Main Street, Road Town, Tortola, British Virgin Islands.
The secretary of the Company is Ms. Lam Pui Sea, a certified public accountant of the Hong Kong Institute of Certified Public Accountants.
The auditor of the Company is Zenith CPA Limited, 10/F, China Hong Kong Tower, 8-12 Hennessy Road, Wanchai, Hong Kong.
The branch share registrar of the Company is Tricor Standard Limited at Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong.
The executive Directors of the Company are Mr. Yang Zhihui (Chairman), Mr. Ng Kwok Fai (deputy chairman), Ms. Zhou Xueyun and Ms. Xu Ning. The independent non-executive Directors are Mr. Fok Ho Yin, Thomas, Mr. Chen Lei and Ms. Zhang Xiaolan.
As at the Latest Practicable Date, the Company has not been informed and was not aware of any person who has committed to vote for or against the Rights Issue, the Underwriting Agreement and the Whitewash Waiver.
The English text of this circular shall prevail over the Chinese text in the case of any inconsistency.

18. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the registered office of the Company at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and its head office and principal place of business at Suites 5801–5804, 58/F, Two International Finance Centre, No. 8 Finance Street, Central, Hong Kong during normal business hours from 9:30 a.m. to 5:30 p.m. on any weekday, except public holidays, and on the websites of the Company (www.582.com.hk) and the SFC (www.sfc.hk) between the period from the date of this circular up to and including the date of the SGM.

(a) This circular.
(b) The bye-laws of the Company.

– IV-17 –

GENERAL INFORMATION

APPENDIX IV

(c) The memorandum and articles of association or equivalent documents of the Company.
(d) The articles of association of LIL.
(e) The material contracts referred to in the section headed ‘‘Material Contracts’’ in this appendix.
(f) The annual reports of the Group for each of the two years ended 31 December 2013 and 31 December 2014.
(g) The interim reports of the Group for the six months ended 30 June 2013 and 30 June 2014.
(h) The letter from the Board, the text of which is set out on pages 12 to 37 of this circular.
(i) The letter from the Independent Board Committee, the text of which is set out on pages 38 to 39 of this circular.
(j) The letter from Gram Capital, the text of which is set out on pages 40 to 54 of this circular.
(k) The accountant’s report on the unaudited pro forma financial information of the Group from Zenith CPA Limited, the text of which as set out in appendix II of this circular.
(l) The property valuation report, the text of which as set out in appendix III of this circular.
(m) The written consents referred to in the paragraph headed ‘‘Consent of Experts’’ in this appendix.
(n) A copy of each circular issued pursuant to the requirements set out in Chapter 14 and/or Chapter 14A which has been issued since 31 December 2014.

– IV-18 –

NOTICE OF SGM

Landing International Development Limited 藍鼎國際發展有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability) (Stock code: 582)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Landing International Development Limited (the ‘‘Company’’) will be held at 1804A, 18/F., Tower 1, Admiralty Centre, 8 Harcourt Road, Admiralty, Hong Kong on Monday, 15 June 2015 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

‘‘THAT subject to the passing of ordinary resolutions number 2 to 4 and satisfaction of the conditions set out in the letter from the board under the heading ‘‘Conditions for the Rights Issue’’ included in the circular to shareholders of the Company dated 29 May 2015 (the ‘‘Circular’’):
(a) the Rights Issue (as defined in the Circular) and the transactions contemplated thereunder (including the Underwriting Agreement) (as defined in the Circular) be and are hereby approved; and
(b) any one of the directors of the Company (the ‘‘Directors’’) be and is/are hereby authorised to do all such acts and things, to sign and execute all such further documents and to take such steps as he/she may in his/her absolute discretion consider necessary, appropriate, desirable or expedient to carry out or to give effect to or in connection with the Rights Issue and the transactions contemplated thereunder (including the Underwriting Agreement).’’
‘‘THAT:
(a) every ten existing issued and unissued ordinary shares of nominal value of HK$0.01 each be consolidated into one ordinary share of nominal value of HK$0.10 each (the ‘‘Consolidated Share’’) in the capital of the Company (the ‘‘Share Consolidation’’); and
(b) any one of the Directors be and is/are hereby authorised to do all such acts and things, to sign and execute all such further documents and to take such steps as he/she may in his/her absolute discretion consider necessary, appropriate, desirable or expedient to carry out or to give effect to or in connection with the Share Consolidation or any transactions contemplated thereunder, including

– SGM-1 –

NOTICE OF SGM

without limitation, to aggregate fractional Consolidated Shares and sell them for the benefit of the Company or otherwise deal with them in such manner permitted under the bye-laws of the Company.’’

‘‘THAT subject to and following the Share Consolidation, the authorised share capital of the Company be and is hereby increased from HK$500,000,000 to HK$10,000,000,000 by the creation of 95,000,000,000 new Consolidated Shares of HK$0.1 each.’’
‘‘THAT:
(a) subject to the granting of the Whitewash Waiver (as defined below) by the Executive Director of the Corporate Finance Division of the Securities and Futures Commission of Hong Kong (or any delegate of the Executive Director) (the ‘‘Executive’’), the waiver of the obligation on the part of Landing International Limited to make a mandatory general offer to shareholders of Company for all the issued shares of the Company not already owned or agreed to be acquired by the Concert Party Group (as defined in the Circular) upon the Rights Issue pursuant to Note 1 on Dispensations from Rule 26 of the Hong Kong Code on Takeovers and Mergers (the ‘‘Whitewash Waiver’’) be and is hereby approved;
(b) conditional upon the grant of the Whitewash Waiver by the Executive, the terms of the Rights Issue be and are hereby approved; and
(c) any Director be and is hereby authorised for and on behalf of the Company to sign, seal, execute and deliver all such documents and deeds, and do all such acts, matters and things as they may in their discretion consider necessary or desirable to implement and/or effect the Share Consolidation, the increase in the authorised share capital, the Rights Issue, the Underwriting Agreement and the Whitewash Waiver.’’
‘‘THAT the underwriting commission of an amount equal to approximately HK$61,339,000 to be payable by the Company to Landing International Limited be and is hereby approved.’’

Yours faithfully,

By order of the Board

Landing International Development Limited Yang Zhihui Chairman and executive Director

Hong Kong, 29 May 2015

– SGM-2 –

NOTICE OF SGM

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda.

Head office and principal place of business in Hong Kong: Suites 5801–5804, 58/F Two International Finance Centre No. 8 Finance Street, Central Hong Kong

Notes:

Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.
A form of proxy for use at the meeting is enclosed. To be valid, the form of proxy, together with the notarially certified power of attorney or other authority (if any) under which it is signed must be lodged at the Company’s share registrars, Tricor Standard Limited, at Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong as soon as possible and in any event, not less than 48 hours before the time appointed for holding of the meeting or any adjournment thereof.
Where there are joint holders of any share, any one of such holders may vote at the meeting, either in person or by proxy, in respect of such shares as if he were solely entitled to vote, but if more than one of such joint holders be present at the meeting in person or by proxy, the person so present whose name stands first in the register of member of the Company in respect of such share shall alone be entitled to vote in respect of it.
Completion and return of the form of proxy will not preclude a member from attending the meeting and voting in person at the meeting or any adjourned meeting if he so desires. If a member attends the meeting after having deposited the form of proxy, his form of proxy will be deemed to have been revoked.
The votes to be taken at the meeting for the resolution will be by way of a poll.

– SGM-3 –

AI assistant

China Resources Building Materials Technology Holdings Limited — Proxy Solicitation & Information Statement 2015

49843_rns_2015-05-29_02151fe5-8ddd-456a-9b5f-5be80e6716d0.pdf

Landing International Development Limited 藍 鼎 國 際 發 展 有 限 公 司

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

The English translation of Chinese names or words in this circular, where indicated, are included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words.

SUMMARY OF THE RIGHTS ISSUE

Landing International Development Limited 藍 鼎 國 際 發 展 有 限 公 司

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TEN ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(4) APPLICATION FOR WHITEWASH WAIVER; AND (5) CONNECTED TRANSACTION IN RELATION TO PAYMENT OF UNDERWRITING COMMISSION

INTRODUCTION

LETTER FROM THE BOARD

PROPOSED SHARE CONSOLIDATION

Reasons for Share Consolidation

Trading arrangement

Exchange of share certificates

LETTER FROM THE BOARD

PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL

PROPOSED RIGHTS ISSUE

Issue statistics

Qualifying Shareholders

Closure of register of members

Rights of Overseas Shareholders

Subscription Price

LETTER FROM THE BOARD

Basis of provisional allotment

Fractional Consolidated Shares

Status of the Rights Shares

Application for excess Rights Shares

Share certificates and refund cheques for Rights Issue

Application for listing

Conditions

Approval of the Rights Issue

The Underwriting Agreement

Date

Underwriters

The underwritten shares

Commission

Termination of the Underwriting Agreement

Irrevocable Undertaking and the Underwriting Agreement

WARNING OF THE RISKS OF DEALING IN SHARES AND RIGHTS SHARES

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

(i) Jeju Project

(ii) Property development

LETTER FROM THE BOARD

(iii) Establishment of a training centre

(iv) Repayment of debts

Intended use of proceeds

Fund raising methods comparison

LETTER FROM THE BOARD

Future fund raising exercises

FUND RAISING EXERCISE OF THE COMPANY IN THE PAST 12 MONTHS

APPLICATION FOR WHITEWASH WAIVER

SHAREHOLDING STRUCTURE OF THE COMPANY

IMPLICATION UNDER THE TAKEOVERS CODE

IMPLICATION UNDER THE LISTING RULES

CONNECTED TRANSACTIONS

LETTER FROM THE BOARD

FUTURE INTENTIONS

INFORMATION OF THE GROUP

SGM

RECOMMENDATION

Landing International Development Limited 藍 鼎 國 際 發 展 有 限 公 司

(1) PROPOSED RIGHTS ISSUE ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE;

(2) APPLICATION FOR WHITEWASH WAIVER; AND (3) CONNECTED TRANSACTION IN RELATION TO PAYMENT OF UNDERWRITING COMMISSION

Yours faithfully,

(1) PROPOSED RIGHTS ISSUE ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE;

(2) APPLICATION FOR WHITEWASH WAIVER; AND (3) CONNECTED TRANSACTION IN RELATION TO PAYMENT OF UNDERWRITING COMMISSION

INTRODUCTION

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

(I) THE RIGHTS ISSUE AND THE CONNECTED TRANSACTION

Reasons for the Rights Issue and intended use of proceeds

Other financing alternatives available to the Group

2. Principal terms of the Rights Issue

3. Analysis on the Subscription Price

China Resources Building Materials Technology Holdings Limited Proxy Solicitation & Information Statement 2015

Landing International Development Limited 藍鼎國際發展有限公司

Landing International Development Limited 藍鼎國際發展有限公司

Landing International Development Limited 藍鼎國際發展有限公司