DINGYI GROUP INVESTMENT LIMITED — Proxy Solicitation & Information Statement 2012

Aug 17, 2012

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 to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Winfair Investment Company Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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.

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WINFAIR INVESTMENT COMPANY LIMITED 永發置業有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 287)

MAJOR TRANSACTION DISPOSAL OF PROPERTIES

20 August 2012

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The provisional sale and purchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Information of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Reason for the disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Financial effect on the disposals and use of proceeds . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Financial and trading prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Written shareholders’ approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Property valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix I – Property valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix II – Financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix III – Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18

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DEFINITIONS

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

• “Announcement” the announcement published on 27 June 2012 in respect of, among other things, the Disposal of Properties

• “Board” the board of Directors

• “Companies Ordinance” the Companies Ordinance (Chapter 32 of the Laws of Hong Kong)

• “Company”

• Winfair Investment Company Limited, a company incorporated in Hong Kong with limited liability whose shares are listed on the main board of the Stock Exchange

• “Consideration” the selling price of HK$25,000,000 for disposal of Property A; and

• the selling price of HK$50,000,000 for disposal of Property B

• “Deed of Mutual Covenant” in respect of a multi-ownership building in Hong Kong, the legal documents registered in the Land Registry of Hong Kong which sets out the rights, interests and obligations of the owners, occupiers, tenants and property management agents in respect of the control, administration, maintenance and management of private properties, common parts and facilities of the building

• “Director(s)” the director(s) of the Company

• “Disposal(s)” the disposal of the Property A under the Provisional A; and

• the disposal of the Property B under the Provisional B

“Formal Agreement(s)”

• the formal sale and purchase agreement dated 9 July 2012 entered into between the Vendor and the Purchaser A in relation to the sale and purchase of the Property A (the “Formal Agreement A”); and

the formal sale and purchase agreement dated 9 July 2012 entered into between the Vendor and the Purchaser B in relation to the sale and purchase of the Property B (the “Formal Agreement B”)

• “Gearing ratio” bank borrowings/shareholders’ fund

• “Group” the Company and its subsidiaries

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

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DEFINITIONS

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Independent Third Party/Parties” independent third party who is not connected person (as defined in the Listing Rules) of the Company and is independent of and not connected with the Company and its connected person (as defined in the Listing Rules)

• “Latest Practicable Date” 16 August 2012, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Properties” Ground floor on No. 19 of Nam Kok Road, Kowloon (the “Property A”) and Ground floor on Nos. 21 and 23 of Nam Kok Road, Kowloon (the “Property B”)

• “Purchaser(s)” Purchaser of Property A (the “Purchaser A”):

Main Cosmos Limited, an Independent Third Party and not a connected person (as defined in the Listing Rules) of the Company and is independent of and not connected with the Company and its connected person (as defined in the Listing Rules); and Purchaser of Property B (the “Purchaser B”): Famous Well Limited, an Independent Third Party and not a connected person (as defined in the Listing Rules) of the Company and is independent of and not connected with the Company and its connected person (as defined in the Listing Rules) “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Shareholder(s)” holder(s) of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Provisional Agreement(s)” The Provisional A and the Provisional B both dated 25 June 2012 entered into between the Vendor and two Purchasers in relation to the sale of the Properties

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	DEFINITIONS
“The Provisional A”	the Provisional Sale and Purchase Agreement dated 25 June 2012
	entered into between the Vendor and the Purchaser A in relation to
	the sale of the Property A
“The Provisional B”	the Provisional Sale and Purchase Agreement dated 25 June 2012
	entered into between the Vendor and the Purchaser B in relation to
	the sale of the Property B
“Vendor”	YLH Limited, a wholly-owned subsidiary of the Company

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LETTER FROM THE BOARD

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WINFAIR INVESTMENT COMPANY LIMITED 永發置業有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 287)

Board of Directors

Registered Office

Executive directors: Mr. NG See Wah (Chairman) Mr. NG Tai Wai Mr. NG Tai Yin Victor

501-2, Lee Kiu Building 51 Jordan Road Kowloon

Non-executive directors:

Mr. SO Kwok Leung Mr. SO Kwok Wai Benjamin

Independent non-executive directors:

Mr. LOKE Yu alias LOKE Hoi Lam Mr. NG Chi Yeung, Simon Ms. CHAN Suit Fei, Esther

Alternate director:

Ms NG Kwok Fun (alternate to Mr. NG See Wah)

20 August 2012

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION DISPOSAL OF PROPERTIES

INTRODUCTION

By the announcement dated 27 June 2012, the Board announced that on 25 June 2012, YLH Limited, a wholly-owned subsidiary of the Company, entered into two Provisional Sale and Purchase Agreements (the “Provisional Agreements”) with two Purchasers, Independent Third Parties, in relation to the disposal of the Properties at an aggregated selling price of HK$75,000,000. The Disposals shall be valid only when two properties are sold and purchased at the same time.

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LETTER FROM THE BOARD

The Disposals constitute a Major Transaction for the Company under Chapter 14 of the Listing Rules. The purpose of this circular is to provide the Shareholders of the Company with further information on the Disposals and other information in compliance with the requirements of the Listing Rules.

THE PROVISIONAL SALE AND PURCHASE AGREEMENTS

The Provisional Agreement A (the “Provisional A”)

Date: 25 June 2012

Purchaser:

Main Cosmos Limited (the “Purchaser A”). To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, the Purchaser A and its ultimate beneficial owner are Independent Third Parties not connected with the Company and its connected persons (as defined in the Listing Rules). Its principal business activity is property investment.

Seller: YLH Limited, a wholly-owned subsidiary of the Company. Property: Ground floor, No. 19 Nam Kok Road, Kowloon, with gross

Ground floor, No. 19 Nam Kok Road, Kowloon, with gross floor area of approximately 1,100 square feet (the “Property A”).

Sale and purchase:

The Provisional A is a binding contract. The sale and purchase of Property A shall be valid on the condition that Property B is sold and purchased under the Provisional B at the same time. Upon the completion, Property A will be sold with existing tenancy.

Consideration: HK$25,000,000.

The selling price was determined based on the current market price of the properties in the same area after arm’s length negotiation between the Vendor and the Purchaser A, an Independent Third Party.

Terms of payment:

• (a) an initial deposit of HK$500,000 was paid by the Purchaser A to the Vendor’s solicitor upon the signing of the Provisional A;

• (b) a further deposit of HK$2,000,000 was paid by the Purchaser A to the Vendor’s solicitor upon the signing of the Formal Agreement on 9 July 2012; and

• (c) the balance of the selling price of HK$22,500,000 will be paid by the Purchaser A to the Vendor’s solicitor on or before completion of the Disposal.

Completion date:

on or before 28 September 2012.

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LETTER FROM THE BOARD

The Provisional Agreement B (the “Provisional B”)

Date: 25 June 2012

Purchaser: Famous Well Limited (the “Purchaser B”). To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, the Purchaser B and its ultimate beneficial owner are Independent Third Parties not connected with the Company and its connected persons (as defined in the Listing Rules). Its principal business activity is property investment.

Seller: YLH Limited, a wholly-owned subsidiary of the Company.

Property:

Ground floor, Nos. 21 and 23 Nam Kok Road, Kowloon, with gross floor area of approximately 2,200 square feet (the “Property B”).

Sale and purchase:

The Provisional B is a binding contract. The sale and purchase of Property B shall be valid on the condition that Property A is sold and purchased under the Provisional A at the same time. Upon the completion, Property B will be sold with existing tenancy.

Consideration: HK$50,000,000.

The selling price was determined based on the current market price of the properties in the same area after arm’s length negotiation between the Vendor and the Purchaser B, an Independent Third Party.

Terms of payment:

• (a) an initial deposit of HK$1,000,000 was paid by the Purchaser B to the Vendor’s solicitor upon the signing of the Provisional B;

• (b) a further deposit of HK$4,000,000 was paid by the Purchaser B to the Vendor’s solicitor upon the signing of the Formal Agreement on 9 July 2012; and

• (c) the balance of the selling price of HK$45,000,000 will be paid by the Purchaser B to the Vendor’s solicitor on or before completion of the Disposal.

Completion date:

on or before 28 September 2012.

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LETTER FROM THE BOARD

INFORMATION OF PROPERTIES

The Property A and the Property B were purchased in March 2005 at a cost of approximately HK$4,638,908 and HK$11,718,910 respectively. The total gross area of the Property A and the Property B are approximately 1,100 square feet and 2,200 square feet respectively and have been rented to two restaurants since the date of acquisition. Rental income and net profits (excluding valuation gain) attributable to the Property A and the Property B for the years ended 31 March 2012 and 2011 were as follows:

For the year ended 31 March 2012

	Property A	Property B	Total
	HK$	HK$	HK$
Rental income	336,000	696,000	1,032,000
Net profits (excluding valuation gain)
– before taxation	324,640	672,200	996,840
– after taxation	272,484	564,890	837,374
For the year ended 31 March 2011
	Property A	Property B	Total
	HK$	HK$	HK$
Rental income	325,548	635,200	960,748
Net profits (excluding valuation gain)
– before taxation	316,348	616,080	932,428
– after taxation	265,561	518,030	783,591

REASON FOR THE DISPOSALS

The principal activities of the Group are property and share investments, property development and securities dealing.

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LETTER FROM THE BOARD

The Board believes that the sale and purchase of the two properties which are adjacent to each other at the same time can strengthen the bargaining power of the Company to ask for a higher selling price for the Properties and maximize the profit in the Disposals which is in the best interest to the Group. The Disposals would allow the Group to redeploy its resources to other investment opportunities that will offer a better and more attractive return. The Board (including independent non-executive directors) believes that the terms of the Disposals are on normal commercial terms and are fair and reasonable and in the interest of the Company and its shareholders as a whole.

FINANCIAL EFFECT ON THE DISPOSALS AND USE OF PROCEEDS

The net book value of the Properties as of 31 March 2012, which was revalued by the independent valuer, was HK$47,000,000 and classified as “Investment Properties”. The Disposals of Properties will inevitably reduce the rental income as well as the earnings of the Group but the reduction is expected to be recovered by the increment of the rent of the other investment properties held by the Group in the year ending 31 March 2013.

The expected gain before and after taxation from the Disposals are approximately HK$27,150,000 and HK$27,100,000 which will be recorded in the accounting year ending 31 March 2013. The expected gain on disposal is calculated by deducting the carrying amount as of 31 March 2012 and other incidental cost regarding the Disposals. The Disposals will result in an increase in the Group’s assets by the amount of estimated gain of HK$27,100,000 and no effect on liabilities. The net proceeds of approximately HK$74,150,000 will be retained as the Company’s working capital with about 20% for repayment of loan obligation and the balance for future potential investment such as acquisition of properties with high rental return. As at the Latest Practicable Date, the Company does not have any potential investment.

FINANCIAL AND TRADING PROSPECTS

The Group will continue to engage in property and share investments, property development and securities dealing.

In June 2012, apart from the disposal of the Properties, the Group completed the acquisition of the property located at ground floor including mezzanine floor on No. 76 Waterloo Road, Kowloon at the consideration of HK$34,500,000, which would attribute HK$54,000 rental income per month. Following the recent strategic adjustment on the Group’s property portfolio by acquiring and holding properties with higher yield on rental income, the Group believes that the rental income for the coming financial year may increase slightly. The expected gearing ratio, which is taken as bank borrowing to total shareholders’ equity, will increase to 3.5%. The Group will continue to look for good investment opportunities to enhance the quality of the Group’s property portfolio. With recent high volatility of share price of listed shares in Hong Kong which is due to the uncertainty of worldwide market condition, the Group shall consistently adopt conservative policy not to involve in securities investment and dealing in business with high risk, and keep its current business plan strategy in looking for high yield property investment so as to in balancing its exposure to risk and returns for each investment decision.

After the completion of the Disposals, the management is confident that the Group has sufficient fund to meet its future operating and capital expenditure, and loan repayment obligations.

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LETTER FROM THE BOARD

WRITTEN SHAREHOLDERS’ APPROVAL

The Disposals constitute a Major Transaction for the Company under Chapter 14 of the Listing Rules and require shareholders’ approval pursuant to Rule 14.40 of the Listing Rules. Written approvals have been obtained from a closely allied group of shareholders who together hold 21,172,077 shares, i.e. 52.93% in nominal value of the shares of the Company. The closely allied group of shareholders includes 3 directors of the Company and of its subsidiaries, namely Mr. Ng See Wah holding 7,941,423 shares (19.85%), Mr. So Kwok Leung holding 5,961,077 shares (14.90%), Mr. Ng Tai Wai holding 3,899,077 shares (9.75%), and Rheingold Holdings Limited holding 3,370,500 shares (8.42%). Mr. Ng See Wah, a founder of the Company, is the father of Mr. Ng Tai Wai, and Rheingold Holdings Limited is beneficially owned by Mr. Ng See Wah and Mr. Ng Tai Wai. Mr. So Kwok Leung is the son of the late Mr. Soo Cho Ling who was one of the two founders of the Company. As no shareholder is required to abstain from voting if the Company is to convene a general meeting to approve the Disposals, written approvals in lieu of holding a general meeting of the Company to approve the Disposals are accepted under Rule 14.44 of the Listing Rules.

PROPERTY VALUATION

As practicable as possible, the Properties were valued at HK$62,800,000 as at 25 June 2012 by RHL Appraisal Ltd., an independent professional property valuer. The valuation report is included in Appendix I to this circular.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information contained in the Appendices to this circular.

Yours faithfully, For and on behalf of the Board Winfair Investment Company Limited Ng See Wah Chairman

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PROPERTY VALUATION REPORT

APPENDIX I

The following is the text of a letter, summary of values and valuation certificates, prepared for the purpose of inclusion in this circular received from RHL Appraisal Limited, an independent valuer, in connection with its valuation as at 25 June 2012 of the property interests held by Winfair Investment Company Limited and its subsidiaries

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10 July 2012

The Board of Directors

Winfair Investment Company Limited

5th Floor Lee Kiu Building 51 Jordan Road Kowloon

Dear Sirs,

Re: Valuation of various property interests located in Hong Kong

1. INSTRUCTION

We refer to your instructions for us to value the property interests (the “Properties”) held by Winfair Investment Company Limited (the “Company”) and its subsidiaries (together referred as the “Group”) in Hong Kong, we confirm that we have carried out inspection of the Properties, 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 25 June 2012 (the “Valuation Date”).

This letter which forms part of our valuation report explains the basis and methodologies of valuation, and clarifies assumptions and limiting conditions of this valuation.

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PROPERTY VALUATION REPORT

APPENDIX I

2. BASIS OF VALUATION

Our valuation of each of the Properties is our opinion of its market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation 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”.

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures, management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market values of the Properties are also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

3. VALUATION METHODOLOGY

In valuing the Properties, Direct Comparison Method is adopted where comparison based on price information of comparable properties is made. Comparable properties of similar size, character and location are analysed and carefully weighted against all the respective advantages and disadvantages of each property in order to arrive at a fair comparison of market values.

4. VALUATION CONSIDERATIONS

In valuing the Property, we have complied with all the requirements contained in Chapter 5 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards on Properties (First Edition 2005) published by The Hong Kong Institute of Surveyors effective from 1st January 2005.

5. ASSUMPTIONS

Our valuation has been made on the assumption that the owner sells the Properties in the market in their existing state without the benefit of deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements which would serve to affect the value of the Properties.

Unless stated as otherwise, we have assumed that the Properties have been constructed, occupied and used in full compliance with, and without contravention of all Ordinances. We have further assumed that, for any use of the Properties upon which this report is based, all required licenses, permit, certificate, and authorizations have been obtained.

Other special assumptions of the Properties, if any, have been stated in the footnote of the valuation certificates of the Properties.

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PROPERTY VALUATION REPORT

APPENDIX I

6. TITLE INVESTIGATION

We have caused searches to be made at the Land Registry for the Properties located in Hong Kong. However, we have not verified ownership of the Properties or to verify the existence of any amendments which do not appear on the copies handed to us.

7. LIMITING CONDITIONS

We have inspected the exterior and, wherever possible, the interior of the Properties. During the course of our inspection, we did not note any serious defects. However, no structural survey has been made and we are therefore unable to report whether the Properties are free from rot infestation or any other defects. No tests were carried out on any of the services.

We have not carried out detailed on-site measurements to verify the correctness of the areas in respect of the Properties but have assumed that the areas shown on the documents are correct. All documents have been used as reference only and all dimensions, measurements and areas are approximations. No on-site measurement has been taken.

Both area and building completion year are approximate. We have quoted the source of saleable area in the report. However, we accept no liability if the quoted area departed from any other sources. We follow the definition of saleable area under the “Code of Measuring Practice” and the “Supplement to the Code of Measuring Practice” published by the Hong Kong Institute Surveyors in March 1999 and March 2010 respectively. All usual main services are assumed to be available to the Properties.

We have relied to a considerable extent on information provided from the Company and have accepted advice given to us on such matters, in particular, but not limited to, the tenure, statutory notices, easements, particulars of occupancy, site and floor areas and all other relevant matters in the identification of the Properties.

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

No allowance has been made in our valuation for any charges, mortgages or amount owing on any Properties nor for any expense or taxation which may be incurred in effecting a sale. We have assumed that the Properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their value.

Liability in connection with this valuation report is limited to the Company to whom this report is addressed and for the purpose for which it is carried out only. We will accept no liability to any other parties or any other purposes. Neither the whole nor any part of this report can be published, disclosed or referred to in any public document without our written consent.

We have conducted on-site inspection to the Properties on 30 June 2012 by Ms. Shirley H.T. Wong (BSc)(Surveying).

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PROPERTY VALUATION REPORT

APPENDIX I

8. REMARKS

The Properties have been valued in Hong Kong Dollars (HKD).

We enclose herewith the summary of values and the valuation certificates.

Yours sincerely, For and on behalf of RHL Appraisal Ltd.

Serena S. W. Lau

FHKIS, AAPI, MRICS, RPS(GP), MBA(HKU) Managing Director

Lawrence Y. S. Li MHKIS, RPS (GP), MBA Director

Ms. Serena S. W. Lau is a Registered Professional Surveyor (GP) with over 19 years’ experience in valuation of properties in Hong Kong, Macau, the PRC and the Asia Pacific Region. Ms. Lau is a Professional Member of The Royal Institution of Chartered Surveyors, an Associate of Australian Property Institute, a Fellow of The Hong Kong Institute of Surveyors as well as a registered real estate appraiser in the PRC.

Mr. Lawrence Y. S. Li is a Registered Professional Surveyor (GP) with over 18 years’ post qualification experience from both private and public sectors. Mr. Li has extensive experience in handling property valuation for properties located in Hong Kong for various purposes including mortgages, accountings and disposals. Besides, he has possessed solid knowledge and faceted experience in land administration, premium assessment and land grant applications with particular experience in negotiation with Government departments.

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APPENDIX I

PROPERTY VALUATION REPORT

SUMMARY OF VALUES

Properties held by the Group for investment in Hong Kong

Property 1. Ground Floor of No.19 Nam Kok Road, Kowloon. 2. Ground Floor of No. 21 Nam Kok Road and Ground Floor of No. 23 Nam Kok Road, Kowloon. Total	Market Value in its existing state as at 25 June 2012 HKD 20,700,000- 42,100,000-
	62,800,000-

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PROPERTY VALUATION REPORT

APPENDIX I

VALUATION CERTIFICATE

				Market value in its
			Particulars of	existing state as at
Property		Description and tenure	occupancy	25 June 2012
				HKD
1.	Ground Floor of	The property comprises a	The property is	20,700,000-
	No. 19 Nam	shop on ground floor of a 6-	tenanted for a monthly
	Kok Road,	storey composite building.	rental of HKD28,000
	Kowloon	The property was completed	commencing from 16
		in 1973.	July 2010 and
	2/31 shares of		expiring on 15 July
	and in the	The property has a saleable	2013 exclusive of
	Remaining	area of approximately 824	rates and management
	Portions of New	square feet and a yard of	fee but inclusive of
	Kowloon Inland	approximately 81 square feet.	government rent.
	Lot Nos. 2394,
	2395 & 2678.	The property is held under
		Government Leases for a
		term of 75 years renewable
		for 24 years commencing on
		1 July 1898. In our valuation,
		we take into account that
		such lease is extended
		without premium until 30
		June 2047 and that a rent of
		three percent of the rateable
		value of the property is
		charged from the date of
		extension.

Notes:

1. The registered owner of the property is YLH Limited via an assignment dated 23 March 2005 vide memorial no. 05041901620084 for a part of a consideration of HKD49,000,000.

2. The property is subject to Deed of Mutual Covenant vide memorial no. UB1008291 dated 20 June 1973.

3. As advised by the Company, YLH Limited is a wholly-owned subsidiary of the Company.

4. 15 -

PROPERTY VALUATION REPORT

APPENDIX I

VALUATION CERTIFICATE

				Market value in its
			Particulars of	existing state as at
Property		Description and tenure	occupancy	25 June 2012
				HKD
2.	Ground Floor of	The property comprises two	The property is	42,100,000-
	No. 21 Nam	shop units on ground floor of	tenanted for a monthly
	Kok Road and	a 6-storey composite	rental of HKD58,000
	Ground Floor of	building. The property was	commencing from 1
	No. 23 Nam	completed in 1973.	December 2010 and
	Kok Road,		expiring on 30
	Kowloon	Nos. 21 and 23 Nam Kok	November 2012
		Road have a saleable area of	exclusive of rates but
	4/31 shares of	approximately 912 square feet	inclusive of
	and in the	and 741 square feet	government rent.
	Remaining	respectively together with a
	Portions of New	yard area of approximately
	Kowloon Inland	157 square feet and 135
	Lot Nos. 2394,	square feet respectively.
	2395 and 2678.
		The property is held under
		Government Leases for a
		term of 75 years renewable
		for 24 years commencing on
		1 July 1898. In our valuation,
		we take into account that
		such lease is extended
		without premium until 30th
		June 2047 and that a rent of
		three percent of the rateable
		value of the property is
		charged from the date of
		extension

Notes:

1. The registered owner of the property is YLH Limited via an assignment dated 23 March 2005 vide memorial no. 05041901620084 for a part of a consideration of HKD49,000,000.

2. The property is subject to Deed of Mutual Covenant vide memorial no. UB1008291 dated 20 June 1973.

3. As advised by the Company, YLH Limited is a wholly-owned subsidiary of the Company.

4. 16 -

FINANCIAL INFORMATION

APPENDIX II

1. INDEBTEDNESS

As at the Latest Practicable Date, the Group’s investment properties with an aggregate carrying value of approximately HK$36,166,418 were pledged to a bank to secure general banking facilities granted to the Group. As at the Latest Practicable Date, the Group had outstanding secured bank loans of HK$17,154,200.

Save as aforesaid and apart from the inter-group liabilities and guarantees, the Group did not have, as at the Latest Practicable Date, any debt securities issued and outstanding, and authorized or otherwise created but unissued, and term loans, bank overdrafts and liabilities under acceptances or acceptance credits or hire purchase commitments, mortgages, charges, unsecured borrowings and debts, guarantees or other material contingent liabilities.

2. WORKING CAPITAL

After due and careful enquiry and taking into account the internal resources and available banking facilities of the Group, the Directors are of opinion that the Group has sufficient working capital to meet its future operating and project development expenditure, and loan repayment obligations for the next twelve (12) months from the date of this circular in the absence of unforeseen circumstance.

3. MATERIAL ADVERSE CHANGE

The Directors are not aware, as at the Latest Practicable Date, of any material adverse change in the financial and trading position of the Group since 31 March 2012, the date to which the latest published audited financial statements of the Company were made up.

• 17 -

ADDITIONAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the directors of the Company 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 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 misleading.

2. DISCLOSURE OF DIRECTORS’ INTERESTS

As at the Latest Practicable Date, the interests and short positions of the Directors of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which the directors had taken or deemed to have under the provisions of the SFO) or which were recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by the Directors of Listed Issuers were as follows:

		**Number of **	shares held
	Personal	Family	Corporate	Other
	interests	interests	interests	interests	Total
Executive directors:
Ng See Wah	7,941,423	910,000	3,370,500*	–	12,221,923
Ng Tai Wai	3,899,077	–	3,370,500*	–	7,269,577
Ng Tai Yin Victor	1,886,000	–	–	–	1,886,000
Non-executive directors:
So Kwok Leung	5,961,077	–	–	–	5,961,077
So Kwok Wai Benjamin	1,081,500	36,000	–	–	1,117,500
Independent non-executive
directors:
Loke Yu alias Loke Hoi Lam	–	–	–	–	–
Ng Chi Yeung, Simon	–	–	–	–	–
Chan Suit Fei, Esther	–	–	–	–	–
Alternate director:
Ng Kwok Fun	105,000	–	–	–	105,000

• 3,370,500 shares attributable to Mr. Ng See Wah and Mr. Ng Tai Wai were held by Rheingold Holdings Limited, a company beneficially owned by Mr. Ng See Wah and Mr. Ng Tai Wai.

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ADDITIONAL INFORMATION

APPENDIX III

Save as disclosed above and other than certain nominee shares in subsidiaries held by the Directors in trust for the Company, none of the Directors or their associates had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations.

None of the Directors, their spouses or their children under the age of 18 had any right to subscribe for the shares of the Company.

3. SUBSTANTIAL SHAREHOLDERS

As at Latest Practicable Date, the following person (other than certain directors of the company) had interest or short positions in the shares or underlying shares of the company which have rights to exercise or control the exercise of 5% or more of the voting power at any general meetings of the company, as recorded in the register required to be kept by the company pursuant to section 336 of the SFO:

				**Number **	of shares held
				Personal	Family		% of total
				interests	interests	Total	issued share
Soo	Cho	Ling	(deceased)	3,908,423	250,000	4,158,423	10.40%

Save as disclosed above, according to the register kept by the company under section 336 of the SFO and so far as was known to the company, there was no other person who, as at Latest Practicable Date, had an interest or short position in the shares or underlying shares of the company.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with the Group.

5. DIRECTOR’S INTERESTS IN CONTRACTS

As at the Latest Practicable Date, none of the Directors was interested in any contract or arrangement subsisting which is significant in relation to the business of the Group.

6. DIRECTORS’ AND EXPERTS’ INTERESTS IN GROUP ASSETS

As at the Latest Practicable Date, none of the Directors or the experts (as named in this circular) has any interests in any assets which have been, since the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

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ADDITIONAL INFORMATION

APPENDIX III

7. COMPETING INTERESTS

As at the Latest Practicable Date, interests of directors or their respective associates in the businesses which are considered to compete or are likely to compete, either directly or indirectly, with the businesses of the Group are required to be disclosed pursuant to the Rule 8.10 of the Listing Rules were as follows:

Mr. Ng See Wah has controlling interest in certain private companies (the “Private Companies”), which are engaging in property development and investment in Hong Kong through an independent building management team. As at the Latest Practicable Date, the turnover of the Private Companies comprised lease income from properties and capital gain on disposals of long-term investment properties. For protection of family interests, Mr. Ng See Wah, Mr. Ng Tai Wai and Mr. Ng Tai Yin Victor are directors of the Private Companies. As the Group and the Private Companies are involved in the development and/or investment of properties in different locations in Hong Kong, the Private Companies may compete directly or indirectly, with certain aspects of the Group’s business. The Group has been operating independently of, and at arm’s length from, business of the Private Companies.

Other than as disclosed above, as at the Latest Practicable Date, none of directors or their respective associates is interested in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

8. QUALIFICATION OF EXPERT

The qualification of the expert who has given opinion which is contained in this circular is as follows:

Name Qualification

RHL Appraisal Ltd.

Professional property valuer

As at the Latest Practicable Date, RHL Appraisal Ltd. does not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

RHL Appraisal Ltd. has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter or report and references to its name in the form and context in which it appears.

9. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or claim of material importance and, so far as the Directors are aware, no litigation or claim of material importance is pending or threatened by or against the Company or any of its subsidiaries.

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ADDITIONAL INFORMATION

APPENDIX III

10. MATERIAL CONTRACTS

The following are the material contracts (not being contracts entered into in the ordinary course of business) entered into by any member of the Group within the two years preceding the Latest Practicable Date:

• (a) the Provisional Agreements and the Formal Agreements;

• (b) the agreement dated 24 April 2012, entered into between Konchoy Limited, a wholly-owned subsidiary of the Company, and Yuk Chiu Company Limited, in relation to the acquisition of the property located at ground floor including mezzanine floor of No. 76 Waterloo Road, Kowloon at a consideration of HK$34,500,000; and a bank mortgage loan of HK$17,250,000 from the Hongkong and Shanghai Banking Corporation Limited for the purpose of this acquisition; and

• (c) the agreement for sale and purchase dated 28 September 2010, entered into between Hing Full Far East Development Limited, a wholly-owned subsidiary of the Company, and Mr. Lai Shiu Hay, in relation to the acquisition of the property located at No. 64 Ma Tau Chung Road, To Kwa Wan, Kowloon at a consideration of HK$23,000,000.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at 501-2 Lee Kiu Building, 51 Jordan Road, Kowloon during the normal business hours on any weekday, except public holidays, for a period of 14 days commencing from the date of this circular:

• (a) the memorandum and articles of association of the Company;

• (b) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;

• (c) the annual reports of the Company for the two years ended 31 March 2011 and 2012;

• (d) the property valuation report and certificates set out in Appendix I to this circular; and

• (e) the letter of consent from RHL Appraisal Ltd. referred to this Appendix.

12. MISCELLANEOUS

• (a) The company secretary of the Company is Ms. Mimoona Ma. She is a fellow member of the Association of Chartered Certified Accountants and a certified public accountant of the Hong Kong Institute of Certified Public Accountants.

• (b) The share registrar of the Company is Computershare Hong Kong Investor Services Limited of 17/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (c) The English text of this circular shall prevail over the Chinese text.

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