First Pacific Company Limited - Proxy Solicitation & Information Statement 2007

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 a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your securities in Sun Hung Kai & Co. Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee, or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims 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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(Incorporated in Hong Kong with limited liability) (Stock Code: 86)

CONNECTED TRANSACTION

CONDITIONAL SALE AND PURCHASE OF APPROXIMATELY 22.428% OF THE ISSUED SHARE CAPITAL OF YU MING INVESTMENTS LIMITED

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

A letter from the board of directors of Sun Hung Kai & Co. Limited is set out on pages 4 to 13 of this circular.

A letter from the independent board committee containing its recommendation to the independent shareholders of Sun Hung Kai & Co. Limited is set out on page 14 of this circular. A letter from KGI Capital Asia Limited, the independent financial adviser, containing its advice to the independent board committee and the independent shareholders of Sun Hung Kai & Co. Limited is set out on pages 15 to 23 of this circular.

A notice convening the extraordinary general meeting of Sun Hung Kai & Co. Limited to be held at Vinson Conference Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on Friday, 20th July, 2007 at 10:00 a.m. is set out on pages 33 and 34 of this circular. Whether or not you are able 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 share registrars of Sun Hung Kai & Co. Limited, Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, 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. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof if you so wish.

3rd July, 2007

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Information about AGL, APL, the Company, SHKVC,
Best Delta and Bright Clear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Information about Yu Ming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Summary of Financial Results of Yu Ming . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Reasons for and Benefits of the Sale and Purchase of the Sale Shares . . . . . . .	11
Financial Effect of the Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Listing Rules Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Procedures for Demanding a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Letter from KGI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
Notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33

– i –

DEFINITIONS

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

“AGL”	Allied Group Limited, a company incorporated in Hong
	Kong with limited liability, with its shares listed on the
	Main Board of the Stock Exchange and is the holding
	company of APL
“AGL Directors”	directors of AGL
“Agreement”	the sale and purchase agreement dated 7th June, 2007
	made between the Company, SHKVC, Best Delta, AGL
	and Bright Clear, relating to the sale and purchase of the
	Sale Shares
“APL”	Allied Properties (H.K.) Limited, a company
	incorporated in Hong Kong with limited liability, with its
	securities listed on the Main Board of the Stock Exchange
	and is the holding company of the Company
“APL Directors”	directors of APL
“associates”	having the meaning ascribed to it under the Listing Rules
“Best Delta”	Best Delta International Limited, a company incorporated
	in the B.V.I. with limited liability, and an indirect
	wholly-owned subsidiary of the Company
“Board”	board of Directors
“Bright Clear”	Bright Clear Limited, a company incorporated in the
	B.V.I. with limited liability, and an indirect wholly-
	owned subsidiary of AGL
“B.V.I.”	British Virgin Islands
“Company” or “SHK”	Sun Hung Kai & Co. Limited, a company incorporated in
	Hong Kong with limited liability, with its securities listed
	on the Main Board of the Stock Exchange, and a non
	wholly-owned subsidiary of APL
“connected person”	having the meaning ascribed to it under the Listing Rules
“Directors”	directors of the Company

– 1 –

DEFINITIONS

“EGM” an extraordinary general meeting of the Company to be convened at Vinson Conference Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on Friday, 20th July, 2007 at 10:00 a.m. for the purpose of considering and, if thought fit, approving, the Agreement and the transactions contemplated therein “Group” or “SHK Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” Hong Kong Special Administrative Region of the People’s Republic of China “Independent Board Committee” the committee comprising Mr. Carlisle Caldow Procter and Mr. Peter Wong Man Kong being the two independent non-executive Directors appointed by the Board under the Listing Rules to advise the Independent Shareholders in respect of the terms of the Agreement “Independent Shareholders” Shareholders (other than APL and its associates) who are not required under the Listing Rules to abstain from voting at the EGM to approve the Agreement “Joint Announcement” joint announcement of AGL, APL and the Company dated 11th June, 2007 in relation to the sale and purchase of the Sale Shares and the Agreement “KGI” KGI Capital Asia Limited, a licensed corporation under the SFO permitted to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the terms of the Agreement “Latest Practicable Date” 28th June, 2007, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular “Listing Rules” Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

– 2 –

	DEFINITIONS
“Sale Shares”	379,291,800 Yu Ming Shares
“SFC”	Securities and Futures Commission
“SFO”	Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“SHKVC”	Sun Hung Kai Venture Capital Limited, a company
	incorporated in Hong Kong with limited liability, and an
	indirect wholly-owned subsidiary of the Company
“Shareholders”	holders of the Shares
“Shares”	ordinary shares of nominal value of HK$0.20 each in the
	share capital of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“substantial shareholder”	having the meaning ascribed to it under the Listing Rules
“YMIM”	Yu Ming Investment Management Limited, a company
	incorporated in Hong Kong with limited liability, and the
	investment manager of Yu Ming
“Yu Ming”	Yu Ming Investments Limited, a company incorporated in
	Hong Kong with limited liability, with its shares listed on
	the Main Board of the Stock Exchange (Stock Code: 666)
“Yu Ming Group”	Yu Ming and its subsidiaries
“Yu Ming Shares”	ordinary shares of HK$0.10 each in the issued share
	capital of Yu Ming
“%”	per cent.

– 3 –

LETTER FROM THE BOARD

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(Incorporated in Hong Kong with limited liability) (Stock Code: 86)

Executive Directors: Lee Seng Huang (Chairman) Joseph Tong Tang

Non-executive Director:

Registered Office: Level 12 One Pacific Place 88 Queensway Hong Kong

Patrick Lee Seng Wei

Independent non-executive Directors:

David Craig Bartlett Alan Stephen Jones Carlisle Caldow Procter Peter Wong Man Kong

3rd July, 2007

To the Shareholders and, for information only, the holders of warrants of the Company

Dear Sir or Madam,

CONNECTED TRANSACTION

CONDITIONAL SALE AND PURCHASE OF APPROXIMATELY 22.428% OF THE ISSUED SHARE CAPITAL OF YU MING INVESTMENTS LIMITED

INTRODUCTION

Reference is made to the Joint Announcement in which AGL, APL and the Company jointly announced that, on 7th June, 2007, the Company, SHKVC (an indirect wholly-owned subsidiary of the Company), Best Delta (a direct wholly-owned subsidiary of SHKVC and hence an indirect wholly-owned subsidiary of the Company), AGL and Bright Clear (an indirect wholly-owned subsidiary of AGL) entered into the Agreement, pursuant to which the Company, SHKVC and Best Delta have conditionally agreed to sell the Sale Shares (being 379,291,800 Yu Ming Shares, representing approximately 22.428% of the issued share capital of Yu Ming), and Bright Clear has conditionally agreed to purchase the Sale Shares, at an aggregate consideration of HK$166,888,392 (being HK$0.44 per Yu Ming Share). AGL has agreed to guarantee the payment obligation of Bright Clear under the Agreement.

– 4 –

LETTER FROM THE BOARD

An initial deposit of HK$16,688,839.20 was paid by Bright Clear to the Company, SHKVC and Best Delta upon the signing of the Agreement. The balance of the aggregate consideration in the sum of HK$150,199,552.80 will be settled in cash on completion of the sale and purchase of the Sale Shares.

Completion of the sale and purchase of the Sale Shares is conditional upon fulfilment of a number of conditions.

The transactions contemplated in the Agreement constitute a connected transaction for the Company, on the basis that Bright Clear is an indirect wholly-owned subsidiary of AGL (which in turn, through its interests in APL, is a substantial shareholder of the Company) and hence a connected person of the Company and the calculation of the assets ratio for the Company is over 2.5%. Such transactions are therefore subject to the approval of the Independent Shareholders. APL and its associates will abstain from voting on the ordinary resolution at the EGM for approving the Agreement.

The Independent Board Committee has been constituted to consider the terms of the Agreement and make recommendation to the Independent Shareholders as to how to vote at the EGM on the ordinary resolution regarding the Agreement. Mr. David Craig Bartlett, an independent non-executive Director, is also an independent non-executive director of AGL. Mr. Alan Stephen Jones, another independent non-executive Director, is also an independent non-executive director of both AGL and APL. They were thus not appointed as members of the Independent Board Committee. Mr. Carlisle Caldow Procter and Mr. Peter Wong Man Kong, being the other two independent non-executive Directors, have been appointed by the Board to form the Independent Board Committee.

KGI has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the transactions contemplated in the Agreement in accordance with the Listing Rules.

The purpose of this circular is (i) to provide the Shareholders with details of the terms of the Agreement; (ii) to set out the advice of KGI and the recommendation of the Independent Board Committee in respect of the terms of the Agreement; and (iii) to give the Shareholders notice of the EGM and other information in accordance with the requirements of the Listing Rules.

THE AGREEMENT

Date

7th June, 2007

– 5 –

LETTER FROM THE BOARD

Parties

(1) the Company, SHKVC and Best Delta as vendors
(2) AGL as guarantor
(3) Bright Clear as purchaser

The Sale Shares

The Sale Shares (being 379,291,800 Yu Ming Shares) represented approximately 22.428% of the issued share capital of Yu Ming as at the Latest Practicable Date.

The Sale Shares will be acquired free from any encumbrance as of completion of the sale and purchase of the Sale Shares.

AGL has agreed to guarantee the payment of the consideration by Bright Clear.

Consideration

The aggregate consideration for the sale and purchase of the Sale Shares shall be HK$166,888,392 (being HK$0.44 per Yu Ming Share), comprising:

(i) HK$46,831,752 for the 106,435,800 Yu Ming Shares to be sold by the Company to Bright Clear pursuant to the Agreement;
(ii) HK$93,085,520 for the 211,558,000 Yu Ming Shares to be sold by SHKVC to Bright Clear pursuant to the Agreement; and
(iii) HK$26,971,120 for the 61,298,000 Yu Ming Shares to be sold by Best Delta to Bright Clear pursuant to the Agreement.

The consideration was arrived at after arm’s length negotiations between the Company, SHKVC, Best Delta and Bright Clear, having regard to the audited consolidated net asset value of Yu Ming as at 31st December, 2006 and represented:

(i) a discount of 12% to the closing price of HK$0.50 per Yu Ming Share as quoted on the Stock Exchange on the last trading day of the Yu Ming Shares immediately before the date of the Joint Announcement;
(ii) a discount of approximately 9.09% to the average closing price of HK$0.484 per Yu Ming Share as quoted on the Stock Exchange for the last five trading days of the Yu Ming Shares immediately before the date of the Joint Announcement;

– 6 –

LETTER FROM THE BOARD

(iii) a discount of approximately 7.56% to the average closing price of approximately HK$0.476 per Yu Ming Share as quoted on the Stock Exchange for the last ten trading days of the Yu Ming Shares immediately before the date of the Joint Announcement;
(iv) a discount of approximately 1.79% to the average closing price of approximately HK$0.448 per Yu Ming Share as quoted on the Stock Exchange for the last one month of the Yu Ming Shares immediately before the suspension of trading in the Yu Ming Shares prior to the issue of the Joint Announcement; and
(v) a premium of approximately 2.33% over the consolidated net asset value of HK$0.43 per Yu Ming Share as stated in the audited consolidated accounts of Yu Ming for the year ended 31st December, 2006.

Payment of the aggregate consideration for the sale and purchase of the Sale Shares will be funded by internal resources of AGL.

Conditions

Completion of the sale and purchase of the Sale Shares is conditional upon fulfilment of a number of conditions, in particular:

(i) the Sale Shares being free from any encumbrance as of completion of the sale and purchase of the Sale Shares;
(ii) the representations and warranties under the Agreement remaining true and accurate and not misleading in any material respect as given as of the date of the Agreement and as of completion of the sale and purchase of the Sale Shares, and as if given at all times between the date of the Agreement and completion of the sale and purchase of the Sale Shares;
(iii) the Company, SHKVC and Best Delta having complied in full with the obligations under the Agreement and otherwise having duly performed and observed all of the obligations, undertakings and covenants required to be performed and observed by them under the Agreement on or prior to completion of the sale and purchase of the Sale Shares;
(iv) all approval, authorisation, consent, licence, certificate, permit, concession, agreement or other permission of any kind of, from or by any governmental authority, regulatory body or any other third party necessary or desirable for the consummation of the transactions contemplated in the Agreement having been obtained by the Company, SHKVC, Best Delta and Yu Ming and remaining in full force and effect;

– 7 –

LETTER FROM THE BOARD

(v) no matter, event, circumstance or change having occurred which has caused, causes or is likely to cause any material adverse effect on:
(a) the business, operations, prospects or financial condition, or a material portion of the properties or assets, of Yu Ming or of its subsidiaries; or
(b) the ability of the Company, SHKVC and Best Delta to perform or observe any of their obligations, undertakings or covenants under the Agreement;
(vi) Yu Ming retaining its listed status, with the trading in its shares not having been suspended from listing, other than for suspensions of a routine nature, including (without limitation) any suspension relating to the transactions and matters contemplated referred to in the Agreement;
(vii) compliance by APL and the Company with all applicable disclosure and shareholders’ approval requirements under the Listing Rules; and
(viii)successful completion of the acquisition by Fine Era Limited (an indirect whollyowned subsidiary of AGL) of the entire interests in YMIM in accordance with the terms of the agreement governing such acquisition (in particular, without limitation, having obtained all necessary approvals from the SFC), and, where applicable, compliance by Yu Ming with all applicable disclosure and shareholders’ approval requirements under the Listing Rules. (The AGL Directors, the APL Directors and the Directors were advised that on 22nd June, 2007, (i) YMIM (as a connected person of Yu Ming) entered into a conditional investment management agreement (the “Management Agreement”) with Yu Ming in relation to the appointment of YMIM as the investment manager of Yu Ming for a period which shall commence from the earlier of 30th September, 2007, or the date on which the Management Agreement is approved by the independent shareholders of Yu Ming (the “Commencement Date”) and end on 31st December, 2009; and (ii) YMIM entered into an interim investment management agreement with Yu Ming, pursuant to which Yu Ming has appointed YMIM as its investment manager for the interim period from 1st July, 2007 (following the expiry of the last investment management agreement on 30th June, 2007) to the Commencement Date, pending the approval of the Management Agreement by the independent shareholders of Yu Ming. For further details, please refer to the announcement issued by Yu Ming on 26th June, 2007.)

The Company, SHKVC and Best Delta will use their best endeavours to procure the fulfilment of the above conditions. If any of the conditions is not fulfilled (or waived by Bright Clear, except for conditions (vi) and (vii) which cannot be waived) on or before 30th September, 2007 (or such later date as may be agreed by the Company, SHKVC, Best Delta and Bright Clear in writing), no party will be obliged to proceed to completion of the sale and purchase of the Sale Shares, and the Company, SHKVC, Best Delta shall each forthwith refund to Bright Clear the full amount of that part of the deposit previously received by it.

The sale and purchase of the Sale Shares is conditional and may or may not proceed. Accordingly, Shareholders and prospective investors are reminded to exercise extreme caution when trading in the securities of AGL, APL, the Company and Yu Ming.

– 8 –

LETTER FROM THE BOARD

Completion

Subject to fulfilment of the conditions set out in the Agreement, completion of the sale and purchase of the Sale Shares will take place on the fifth business day after the day on which the last of the conditions is fulfilled (or otherwise waived) (or such other date as may be agreed by the Company, SHKVC, Best Delta and Bright Clear in writing) at the office of the solicitors for Bright Clear in Hong Kong (or such other place as may be agreed by the Company, SHKVC, Best Delta and Bright Clear in writing).

On completion of the sale and purchase of the Sale Shares, the balance of the consideration in the total sum of HK$150,199,552.80 will be paid by Bright Clear to the Company, SHKVC and Best Delta, respectively.

INFORMATION ABOUT AGL, APL, THE COMPANY, SHKVC, BEST DELTA AND BRIGHT CLEAR

AGL

AGL is a company incorporated in Hong Kong with limited liability. Its shares are listed on the Main Board of the Stock Exchange.

The principal business activity of AGL is investment holding. The principal business activities of its major subsidiaries are property investment and development, hospitality related activities and the provision of financial services.

APL

APL is a company incorporated in Hong Kong with limited liability. Its securities are listed on the Main Board of the Stock Exchange.

The principal business activity of APL is investment holding. The principal business activities of its major subsidiaries are property investment and development, hospitality related activities and the provision of financial services.

As at the Latest Practicable Date, APL was beneficially owned as to approximately 74.93% by AGL.

The Company

The Company is a company incorporated in Hong Kong with limited liability. Its securities are listed on the Main Board of the Stock Exchange.

– 9 –

LETTER FROM THE BOARD

The principal business activity of the Company is investment holding. The principal business activities of its major subsidiaries are wealth management and brokerage, asset management, corporate finance, consumer finance as well as principal investments.

As at the Latest Practicable Date, the Company was beneficially owned as to approximately 65.16% by APL.

SHKVC

SHKVC is a company incorporated in Hong Kong with limited liability. It is an indirect wholly-owned subsidiary of the Company.

The principal business activity of SHKVC is investment holding.

Best Delta

Best Delta is a company incorporated in the B.V.I. with limited liability. It is an indirect wholly-owned subsidiary of the Company.

The principal business activity of Best Delta is investment holding.

Bright Clear

Bright Clear is a company incorporated in the B.V.I. with limited liability. It is an indirect wholly-owned subsidiary of AGL.

The principal business activity of Bright Clear is investment holding.

INFORMATION ABOUT YU MING

Yu Ming is a company incorporated in Hong Kong with limited liability. Its shares are listed on the Main Board of the Stock Exchange.

The principal business activity of Yu Ming and its subsidiaries includes investment in listed and unlisted securities and properties.

As at the Latest Practicable Date, Yu Ming was beneficially owned as to approximately 22.428% by the Company.

– 10 –

LETTER FROM THE BOARD

SUMMARY OF FINANCIAL RESULTS OF YU MING

A summary of the audited results of Yu Ming for the two years ended 31st December, 2005 and 31st December, 2006 are as follows:

	Year ended 31st December,	Year ended 31st December,
	2006	2005
	HK$’000	HK$’000
Revenue	158,036	35,473
(Loss) profit before tax	(113,097)	149,929
(Loss) profit after tax	(115,596)	146,705
(Loss) profit attributable to
the equity holders of Yu Ming	(155,693)	144,662

The audited consolidated net asset value of Yu Ming as at 31st December, 2006 was approximately HK$732,331,000.

REASONS FOR AND BENEFITS OF THE SALE AND PURCHASE OF THE SALE SHARES

The principal business activity of Yu Ming and its subsidiaries is strategic investment in listed and unlisted securities and properties. A plan has been formulated to effect an overall reorganisation of the strategic investment businesses of the Allied group of companies. This involves the sale and purchase of the Sale Shares (currently held by the Group as one of its principal investments), which is intended to consolidate the strategic investment businesses of the Allied group of companies into AGL. It is expected to achieve ongoing operational economies and other benefits.

The Group will continue to focus on its core business activities of wealth management and brokerage, asset management, corporate finance and consumer finance. The disposal of the Sale Shares will realise the capital investment of the Group in Yu Ming. The sale of the Sale Shares will generate net sale proceeds (before expenses) of HK$166,888,392 for the Company. The proceeds will be applied by the Company to reduce its overall corporate indebtedness and for general working capital purposes.

Following completion of the sale and purchase of the Sale Shares, strategic investments will form part of the core business activities of AGL.

Having regard to the nature of and the benefits resulting from such reorganisation, the Directors believe that the terms of the sale and purchase of the Sale Shares are fair and reasonable and in the interests of the Independent Shareholders as a whole.

– 11 –

LETTER FROM THE BOARD

Audited consolidated net profits (losses) attributable to the Sale Shares (before minority interests) for the two financial years ended 31st December, 2006 were:

(i) a profit of approximately HK$33,626,000 (before taxation) or a profit of approximately HK$32,903,000 (after taxation) for the financial year ended 31st December, 2005; and
(ii) a loss of approximately HK$25,365,000 (before taxation) or a loss of approximately HK$25,926,000 (after taxation) for the financial year ended 31st December, 2006.

As at 31st December, 2006, the audited consolidated net book value of the Sale Shares was approximately HK$164,247,000.

Immediately following completion of the sale and purchase of the Sale Shares, the Company, SHKVC and Best Delta will each cease to hold any interests in Yu Ming.

FINANCIAL EFFECT OF THE TRANSACTION

The Group would recognise a gain on the disposal of the Sale Shares of approximately HK$7,200,000 upon completion of the disposal of the Sale Shares and the consolidated net asset value of the Group would also be increased by such approximate amount as a result. The disposal of the Sale Shares would have no impact on the liabilities of the Group.

LISTING RULES IMPLICATIONS

The transactions contemplated in the Agreement do not constitute any notifiable transaction under Chapter 14 of the Listing Rules for the Company, on the basis that none of the calculation of the relevant ratios for the Company exceeds 5%.

EGM

A notice convening the EGM is set out on pages 33 and 34 of this circular. Ordinary resolution in respect of the Agreement will be proposed at the EGM.

A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the share registrars of the Company, Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

– 12 –

LETTER FROM THE BOARD

PROCEDURES FOR DEMANDING A POLL

Pursuant to Article 73 of the Articles of Association of the Company, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands) a poll is demanded:

(i) by the chairman of the meeting; or
(ii) by at least three registered Shareholders present in person or by proxy for the time being entitled to vote at the meeting; or
(iii) by any registered Shareholder or Shareholders present in person or by proxy and representing not less than one-tenth of the total voting rights of all the Shareholders having the right to vote at the meeting; or
(iv) by any registered Shareholder or Shareholders present in person or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

Under the Listing Rules, the ordinary resolution to be proposed at the EGM to approve the Agreement is required to be voted on by poll. APL and its associates will abstain from voting on the resolution at the EGM.

RECOMMENDATION

The Directors consider that the Agreement is in the interests of the Company and the Shareholders as a whole and the terms of which are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, the Directors recommend all the Independent Shareholders to vote in favour of the ordinary resolution set out in the notice of the EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the letter from the Independent Board Committee, the letter from KGI and the additional information set out in the Appendix to this circular.

Yours faithfully, On behalf of the Board Sun Hung Kai & Co. Limited Joseph Tong Tang Executive Director

– 13 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee to the Independent Shareholders in connection with the Agreement for inclusion in this circular.

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(Incorporated in Hong Kong with limited liability) (Stock Code: 86)

3rd July, 2007

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION

CONDITIONAL SALE AND PURCHASE OF APPROXIMATELY 22.428% OF THE ISSUED SHARE CAPITAL OF YU MING INVESTMENTS LIMITED

We have been appointed to form this Independent Board Committee to consider and advise you on the terms of the Agreement, details of which are set out in the circular issued by the Company to the Shareholders dated 3rd July, 2007 (the “Circular”), of which this letter forms part. Terms defined in the Circular will have the same meanings when used herein unless the context otherwise requires.

We wish to draw your attention to the letter from the Board and letter of advice from KGI set out on pages 4 to 13 and pages 15 to 23 of the Circular respectively.

Having taken into account the principal factors and reasons considered by KGI, its conclusion and advice, we concur with the view of KGI and consider that the terms of the Agreement are fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

Accordingly, we recommend you to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Agreement and the transactions contemplated in it.

Yours faithfully,

For and on behalf of the Independent Board Committee

Carlisle Caldow Procter Peter Wong Man Kong non-executive Director Independent non-executive Director

Independent non-executive Director

– 14 –

LETTER FROM KGI

Set out below is the text of the letter of advice from KGI Capital Asia Limited, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, prepared for inclusion in this circular.

27/F ICBC Tower Citibank Plaza 3 Garden Road Central Hong Kong

Tel: 2878 6888 Fax: 2970 0080

3rd July, 2007

To the Independent Board Committee and the Independent Shareholders Sun Hung Kai & Co. Limited Level 12 One Pacific Place 88 Queensway Hong Kong

Dear Sirs,

CONNECTED TRANSACTION

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 connected transaction regarding the Agreement, particulars of which are set out in the “Letter from the Board” (the “Letter”) contained in the circular to the Shareholders dated 3rd July, 2007 (the “Circular”) and in which this letter is reproduced. Unless the context requires otherwise, terms used in this letter shall have the same meanings as given to them under the definitions section of the Circular.

On 7th June, 2007, SHK, SHKVC (an indirect wholly-owned subsidiary of SHK), Best Delta (a direct wholly-owned subsidiary of SHKVC and hence an indirect wholly-owned subsidiary of SHK), AGL and Bright Clear (an indirect wholly-owned subsidiary of AGL) entered into the Agreement, pursuant to which SHK, SHKVC and Best Delta have conditionally agreed to sell the Sale Shares (being 379,291,800 Yu Ming Shares, representing approximately 22.428% of the issued share capital of Yu Ming), and Bright Clear has conditionally agreed to purchase the Sale Shares, at an aggregate consideration of HK$166,888,392 (being HK$0.44 per Yu Ming Share). AGL has agreed to guarantee the payment obligation of Bright Clear under the Agreement.

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LETTER FROM KGI

The transactions contemplated in the Agreement constitute a connected transaction for SHK, on the basis that Bright Clear is an indirect wholly-owned subsidiary of AGL (which in turn, through its interests in APL, is a substantial shareholder of SHK) and hence a connected person of SHK and the calculation of the assets ratio for SHK is over 2.5%. Such transactions are therefore subject to the approval of the Independent Shareholders. APL and its associates will abstain from voting on the ordinary resolution at the EGM for approving the Agreement. As at the Latest Practicable Date, SHK is beneficially owned as to approximately 65.16% by APL.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee has been constituted to consider the terms of the Agreement and make recommendation to the Independent Shareholders as to how to vote at the EGM on the ordinary resolution regarding the Agreement. Mr David Craig Bartlett, an independent non-executive Director, is also an independent non-executive director of AGL. Mr. Alan Stephen Jones, another independent non-executive Director, is also an independent non-executive director of both AGL and APL. They were thus not appointed as members of the Independent Board Committee. Mr. Carlisle Caldow Procter and Mr. Peter Wong Man Kong, being the other two independent non-executive Directors, have been appointed by the Board to form the Independent Board Committee.

KGI has been appointed to advise the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the transactions contemplated in the Agreement and whether it is in the interests of SHK and the Independent Shareholders as a whole.

KGI Asia Limited, a fellow subsidiary of KGI whose principal business is securities broking, maintains securities accounts with Excalibur Securities Limited, Shun Loong Securities Company Limited and Sun Hung Kai Investment Services Limited, which are subsidiaries of SHK. Global Treasure Investments Limited, a fellow subsidiary of KGI, maintains securities account with Sun Hung Kai Investment Services Limited. The percentage of the total commission expenses paid by KGI Asia Limited to Excalibur Securities Limited, Shun Loong Securities Company Limited and Sun Hung Kai Investment Services Limited over total commission expenses paid by KGI Asia Limited for the period from 1st June, 2005 to 31st May, 2007 was not more than 0.50%. In addition, no commission expense was paid to Sun Hung Kai Investment Services Limited by Global Treasure Investments Limited for the period from 1st June, 2005 to 31st May, 2007.

Sun Hung Kai Investment Services Limited maintains securities account with KGI Asia Limited. Sun Hung Kai International Commodities Limited and Sun Hung Kai Commodities Limited, which are subsidiaries of SHK, maintain futures and options accounts with KGI Futures (Hong Kong) Limited, a fellow subsidiary of KGI. Poly (Hong Kong) Investments Limited, HSBC International Trustee Limited and Argyle Street Management Limited, which are shareholders holding more than 5% of the issued share capital of Yu Ming (based on the disclosure in the annual report of Yu Ming for the year ended 31st December, 2006), maintain

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LETTER FROM KGI

securities accounts with KGI Asia Limited. HSBC International Trustee Limited and Argyle Street Management Limited maintain futures and options accounts with KGI Futures (Hong Kong) Limited. The percentage of the total commission income earned from Sun Hung Kai Investment Services Limited, Poly (Hong Kong) Investments Limited, HSBC International Trustee Limited and Argyle Street Management Limited over total commission income earned by KGI Asia Limited for the period from 1st June, 2005 to 31st May, 2007 was not more than 0.01%. In addition, the percentage of the total commission income earned from Sun Hung Kai International Commodities Limited and Sun Hung Kai Commodities Limited, HSBC International Trustee Limited and Argyle Street Management Limited over total commission income earned by KGI Futures (Hong Kong) Limited for the period from 1st June, 2005 to 31st May, 2007 was not more than 0.01%.

In view of the immaterial percentages as shown above, it is considered that such relationships as mentioned above would not affect the independence of KGI in performing its duties as the independent financial adviser under the Listing Rules.

BASIS OF OUR OPINION

In formulating our opinion and recommendation, we have relied on the accuracy of the information and facts supplied, and the opinions and representations expressed to us by SHK, the Directors and management of SHK. We have also assumed that all statements of belief, opinion and intention made by the Directors in the Circular were reasonably made after due and careful enquiry and are based on honestly-held opinions. We have no reason to doubt the truth, accuracy and completeness of the information and representations referred to in the Circular and provided to us by SHK, the Directors and management of SHK. We have been advised by the Directors that no material facts have been omitted from the information provided to us and referred to in the Circular. We have also assumed that all statement of intention of SHK, the Directors and management of SHK as set out in the Circular will be implemented. We have assumed that all information and representations made or referred to in the Circular and provided to us by SHK, the Directors and management of SHK, for which they were solely and wholly responsible, were true, complete and accurate at the time they were made and shall continue to be true, complete and accurate at the date of the EGM.

In formulating our opinion, we have obtained and reviewed relevant information and documents provided by SHK and the Directors and management of SHK in connection with the transactions and discussed with the management of SHK so as to assess the fairness and reasonableness of the terms of the Agreement. Relevant information and documents included, among other things, the Agreement, the annual reports of SHK, APL and Yu Ming for the year ended 31st December, 2006. We believe that we have reviewed sufficient information to enable us to reach an informed view, to justify our reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our opinion regarding the terms of the Agreement. We have not, however, carried out any independent verification of the information and representations provided to us by the management of SHK and the Directors nor have we conducted any form of independent investigation into the businesses and affairs, financial position or the future prospects of SHK or APL or AGL or Yu Ming or their respective subsidiaries or associated companies. We have not studied, investigated nor verified the validity of all the legal aspects of, and procedural aspects for, the transactions contemplated in the Agreement.

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LETTER FROM KGI

Our opinion is necessarily based upon the financial, economic, market, regulatory and other conditions as they existed on, and the facts, information, representations and opinions made available to us as of, the Latest Practicable Date. Our opinion does not in any manner address SHK’s own decision to proceed with the entering into the Agreement. We disclaim any undertaking or obligation to advise any person of any change in any fact or matter affecting the opinion expressed herein, which may come or be brought to our attention after the Latest Practicable Date. Except for its inclusion in the Circular, this letter is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purpose, without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation to the Independent Board Committee and the Independent Shareholders, we have taken the following principal factors and reasons into consideration:

1. Background of the Agreement

2. Reasons for, and benefits of entering into the Agreement

Business review of the SHK Group

SHK is a company incorporated in Hong Kong with limited liability. Its securities are listed on the Main Board of the Stock Exchange. The principal business activity of SHK is investment holding. The principal business activities of its major subsidiaries are wealth management and brokerage, asset management, corporate finance, consumer finance as well as principal investments.

The Sale Shares and the business review of Yu Ming

The Sale Shares (being 379,291,800 Yu Ming Shares) represent approximately 22.428% of the issued share capital of Yu Ming as at the Latest Practicable Date.

Yu Ming is a company incorporated in Hong Kong with limited liability. Its shares are listed on the Main Board of the Stock Exchange. The principal business activity of Yu Ming and its subsidiaries includes investment in listed and unlisted securities and

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LETTER FROM KGI

properties. According to SHK and the annual report of Yu Ming for the year ended 31st December, 2006, the principal investments held by the Yu Ming Group as at 31st December, 2006 were interests in Asia World-Expo (an exhibition facility in Hong Kong), retail shops in Mongkok and Causeway Bay, Grand China Air Company Limited (a holding company of airlines in Hong Kong and China) and a portfolio of debt securities and equities investments.

A summary of the audited results of the Yu Ming Group for the two years ended 31st December, 2005 and 31st December, 2006 are as follows:

	Year ended 31st	December
	2006	2005
	HK$’000	HK$’000
Revenue	158,036	35,473
(Loss) profit before tax	(113,097)	149,929
(Loss) profit after tax	(115,596)	146,705
(Loss) profit attributable to the equity
holders of Yu Ming	(155,693)	144,662

According to the annual report of Yu Ming for the year ended 31st December, 2006, the loss attributable to the equity holders of Yu Ming for the year ended 31st December, 2006 of approximately HK$155.7 million was primarily due to the derecognition of its investment in CR Airways Limited (a passenger airline in Hong Kong) as well as receivables originally held in an aggregate amount of approximately HK$190.2 million.

The audited consolidated net asset value of Yu Ming as at 31st December, 2006 was approximately HK$732,331,000, representing approximately HK$0.43 per Yu Ming Share. The latest announced unaudited consolidated net asset value per Yu Ming Share as at 31st May, 2007 was HK$0.45.

Reasons for, and benefits of entering into the Agreement

According to the Letter, a plan has been formulated to effect an overall reorganisation of the strategic investment businesses of the Allied group of companies. This involves the sale and purchase of the Sale Shares (currently held by the SHK Group), which is intended to consolidate the strategic investment businesses of the Allied group of companies into AGL. It is expected to achieve ongoing operational economies and other benefits.

According to the Letter, the SHK Group will continue to focus on its core business activities of wealth management and brokerage, asset management, corporate finance and consumer finance. The disposal of the Sale Shares will realize the capital investment of the SHK Group in Yu Ming. The sale of the Sale Shares will generate sale proceeds (before expenses) of approximately HK$166.9 million for SHK. The net sale proceeds will be applied by the SHK Group to reduce its overall corporate indebtedness and for general working capital purposes.

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LETTER FROM KGI

The Directors confirmed that the book value of the Sale Shares in the accounts of the SHK Group as at 31st December, 2006 was approximately HK$164.2 million. By referencing to the consolidated audited net assets of approximately HK$8,113.2 million of SHK as at 31st December 2006, the net book value of the Sale Shares represents a relatively insignificant portion (approximately 2%) to the consolidated net assets of the SHK Group. Having been enquired with the Directors, due to the relatively insignificant amount, we are of the view that the disposal of the Sale Shares would not have a significant impact to the existing businesses and asset mix of the SHK Group.

Conclusively, we are of the view that the disposal of the Sale Shares will realize the investment in Yu Ming by the SHK Group and the sale of the Sale Shares will generate net sale proceeds for the SHK Group. As mentioned above, we are of the view that the disposal of the Sale Shares would not have a significant impact to the existing businesses and asset mix of the SHK Group. According to the Directors, the net sale proceeds from the disposal of the Sale Shares would be applied to reduce the overall corporate indebtedness of the SHK Group and for general working capital purposes. As referred to our analysis in the section headed “Financial effects of the disposal of the Sale Shares” below, the gearing of the SHK Group would be decreased while the working capital of the SHK Group would be improved upon the completion of the disposal of the Sale Shares.

3. Principal terms of the Agreement

Pursuant to the Agreement, SHK, SHKVC and Best Delta have conditionally agreed to sell the Sale Shares (being 379,291,800 Yu Ming Shares, representing approximately 22.428% of the issued share capital of Yu Ming), and Bright Clear has conditionally agreed to purchase the Sale Shares, at an aggregate consideration of HK$166,888,392 (being HK$0.44 per Yu Ming Share), comprising:

(i) HK$46,831,752 for the 106,435,800 Yu Ming Shares to be sold by SHK to Bright Clear pursuant to the Agreement;
(ii) HK$93,085,520 for the 211,558,000 Yu Ming Shares to be sold by SHKVC to Bright Clear pursuant to the Agreement; and
(iii) HK$26,971,120 for the 61,298,000 Yu Ming Shares to be sold by Best Delta to Bright Clear pursuant to the Agreement.

Basis of the consideration

As referred to the Letter, the Directors confirmed that the consideration of HK$0.44 per Yu Ming Share was arrived at after arm’s length negotiations between SHK, SHKVC, Best Delta and Bright Clear, having regard to the audited consolidated net asset value of Yu Ming as at 31st December, 2006 and represents:

(i) a discount of 12% to the closing price of HK$0.50 per Yu Ming Share as quoted on the Stock Exchange on the last trading day of the Yu Ming Shares immediately before the date of the Joint Announcement;

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LETTER FROM KGI

(ii) a discount of approximately 9.09% to the average closing price of HK$0.484 per Yu Ming Share as quoted on the Stock Exchange for the last five trading days of the Yu Ming Shares immediately before the date of the Joint Announcement;
(iii) a discount of approximately 7.56% to the average closing price of approximately HK$0.476 per Yu Ming Share as quoted on the Stock Exchange for the last ten trading days of the Yu Ming Shares immediately before the date of the Joint Announcement;
(iv) a discount of approximately 1.79% to the average closing price of approximately HK$0.448 per Yu Ming Share as quoted on the Stock Exchange for the last one month of the Yu Ming Shares immediately before the suspension of trading in the Yu Ming Shares prior to the issue of the Joint Announcement; and
(v) a premium of approximately 2.33% over the consolidated net asset value of approximately HK$0.43 per Yu Ming Share as stated in the audited consolidated accounts of Yu Ming for the year ended 31st December, 2006.

Set out below is the graph showing the historical closing prices of the Yu Ming Shares as quoted on the Stock Exchange during the last 6 months prior to the date of the Joint Announcement (the “Review Period”).

Stock price of Yu Ming Shares for the 6-month period immediately before the date of the Joint Announcement

==> picture [35 x 152] intentionally omitted <==

Source: HKEx website

As set out in the chart above, the Yu Ming Shares were trading generally in the range of HK$0.34 to HK$0.40 from January 2007 up to early April 2007 and in the range of HK$0.40 to HK$0.52 thereafter up to the date of the Joint Announcement. During the Review Period, the highest and lowest closing prices per Yu Ming Share were HK$0.52 (recorded on 31st May, 2007) and HK$0.34 (recorded on 26th January, 2007),

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LETTER FROM KGI

respectively. Based on the foregoing, during the Review Period, we note that the consideration of HK$0.44 per Yu Ming Share was generally higher than the market prices of the Yu Ming Shares traded before early-April 2007, largely in-line with the average market trading prices of the Yu Ming Shares over the last one month immediately before the date of the Joint Announcement, and generally below the trading prices of the Yu Ming Shares over the last 10 days immediately before the date of the Joint Announcement. The consideration of HK$0.44 per Yu Ming Share represents a discount of approximately 15.4% to the highest closing price per Yu Ming Share of HK$0.52 during the Review Period.

However, we noted that the average daily trading volume of the Yu Ming Shares for the 6-month period immediately before the date of the Joint Announcement was approximately 3 million shares, or approximately 0.18% of the number of total issued shares of Yu Ming. Therefore, we are of the view that the trading of the Yu Ming Shares were generally thin and may limit the indicative nature of the market trading price to the underlying fair value of Yu Ming.

One of the most commonly used references for valuing an entity is the price/earnings multiple. It provides a meaningful comparison among listed companies in respect of valuation provided that earnings of these companies are positive and derived from a relatively more stable business(es) such as trading and manufacturing companies. However, due to the fact that (i) the Yu Ming Group has recorded audited consolidated net losses for the year ended 31st December, 2006; and (ii) the revenue and profits of the Yu Ming Group is mainly in the form of the sales proceeds from the disposal of investments and dividends, interest income and rental income from the investments, and therefore, Yu Ming’s performance is largely dependent upon the ever-changing stock market conditions and investment environment from time to time which is beyond the control of the Yu Ming Group, we consider that the price/earnings multiple is not appropriate for valuing Yu Ming in this case.

Given that the Yu Ming Group’s investments are mainly properties and listed and unlisted securities, coupled with the extremely low liquidity of the Yu Ming Shares as discussed above, we are of the view that the use of the net asset value is a better indication of the value of Yu Ming.

The consideration of HK$0.44 per Yu Ming Share represents a premium of approximately 2.33% over the consolidated net asset value of approximately HK$0.43 per Yu Ming Share as stated in the audited consolidated accounts of Yu Ming for the year ended 31st December, 2006 and represents a discount of approximately 2.22% to the latest announced unaudited consolidated net asset value of HK$0.45 per Yu Ming Share as at 31st May, 2007.

In view of the consideration of HK$0.44 per Yu Ming Share are generally in line with the latest audited consolidated net asset value per Yu Ming Share as at 31st December, 2006 and the latest announced unaudited consolidated net asset value per Yu Ming Share as at 31st May, 2007, we are of the view that the consideration of HK$0.44 per Yu Ming Share is fair and reasonable in so far as SHK and the Independent Shareholders as a whole are concerned.

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LETTER FROM KGI

4. Financial effects of the disposal of the Sale Shares

Effect on net asset value

The audited consolidated net asset value of the SHK Group as at 31st December, 2006 was approximately HK$8,113.2 million. As discussed under the sub-section “Effect on earnings” below, the SHK Group would recognize a gain on disposal of the Sale Shares of approximately HK$7.2 million upon completion of the disposal of the Sale Shares and the consolidated net asset value of the SHK Group would also be increased by such approximate amount as a result.

Effect on earnings

According to the annual report of Yu Ming for the year ended 31st December, 2006, the loss attributable to equity holders of Yu Ming for the year ended 31st December, 2006 amounted to approximately HK$155.7 million. Immediately before the disposal of the Sale Shares, the SHK Group is interested in approximately 22.428% equity interests in Yu Ming and the results of the Yu Ming Group are equity-accounted for in the financial statements of the SHK Group. Upon completion of the disposal of the Sale Shares, the SHK Group would cease to hold any equity interest in Yu Ming and the results of the Yu Ming Group will not be accounted for in the accounts of the SHK Group. Accordingly, future possible earnings or losses of the Yu Ming Group would have no impact on the SHK Group.

The Directors confirmed that the SHK Group would recognize a gain of disposal of the Sale Shares of approximately HK$7.2 million upon completion of the disposal.

Effect on gearing and working capital

According to the Directors, the net proceeds from the disposal of the Sale Shares would be applied to reduce the overall corporate indebtedness of the SHK Group and for general working capital purposes. As a result, the gearing of the SHK Group would be decreased while the working capital of the SHK Group would be improved upon the completion of the disposal of the Sale Shares.

RECOMMENDATION

Having considered the above principal factors and reasons, we consider that the terms of the Agreement are fair and reasonable and in the interests of SHK and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders, and recommend the Independent Shareholders, to vote in favour of the ordinary resolution to approve the Agreement which will be proposed at the EGM.

Yours faithfully, For and on behalf of

Yours faithfully, For and on behalf of	Yours faithfully, For and on behalf of
KGI Capital Asia Limited
Laurent Leung	Jimmy Chan
Director	Senior Vice President

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APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts the omission of which would make any statement in this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests

Save as disclosed below, as at the Latest Practicable Date, none of the Directors and the chief executive of the Company had any interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV 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 (including interests and short positions, if any, which they were taken or deemed to have under such provisions of the SFO); (ii) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to in such provisions of the SFO; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules to be notified to the Company and the Stock Exchange:

(i) Interests in the Shares and underlying Shares

	Number of	Approximate
	Shares and	percentage of the
	underlying	issued share	Nature of
Name of Director	Shares	capital	interests
Lee Seng Huang	1,164,425,725	77.92%	Other interests
	(Note 1)		(Note 2)

Notes:

These include (i) an interest in 973,772,892 Shares; and (ii) an interest in listed physically settled warrants of the Company in an amount of HK$1,121,038,658.04, giving rise to an interest in 190,652,833 underlying Shares. The warrants of the Company entitle the holders thereof to subscribe at any time during the period from 1st June, 2006 to 31st May, 2009 (both days inclusive) for the fully paid Shares at an initial subscription price of HK$6 per Share which was adjusted to HK$5.88 per Share (subject to further adjustments) effective on 20th September, 2006 (the “2009 Warrants”).
Mr. Lee Seng Huang is one of the trustees of the Lee and Lee Trust, being a discretionary trust which indirectly owned approximately 42.10% interest in the issued share capital of AGL and was therefore deemed to have interests in the Shares and underlying Shares in which AGL was interested.
The interests stated above represent long positions.

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APPENDIX

GENERAL INFORMATION

(ii) Interests in the shares, underlying shares and debentures of associated corporations

			Approximate
		Number of	percentage of
	Name of	shares and	the relevant
Name of	associated	underlying	issued share	Amount of
Director	corporations	shares	capital	debentures	Nature of interests
Lee Seng	AGL	102,933,692	42.10%		Interests of controlled
Huang					corporation (Note 2)
(Note 1)
	APL	508,097,789	94.56%	HK$249,397,270	Interests of controlled
		(Note 4)		(Note 5)	corporation (Note 3)
	Tian An China	447,045,603	39.58%		Interests of controlled
	Investments				corporation (Note 6)
	Company
	Limited
	Shanghai Allied	464,485,640	63.68%		Interests of controlled
	Cement				corporation (Note 6)
	Limited
	Yu Ming	379,291,800	22.42%		Interests of controlled
					corporation (Note 6)
	Quality	122,213,776	51.14%		Interests of controlled
	HealthCare				corporation (Note 6)
	Asia Limited
	Swan Islands			HK$2,800,000,000	Interests of controlled
	Limited			(Note 7)	corporation (Note 7)
Patrick Lee	AGL	550,000	0.22%		Personal interests
Seng Wei		(Note 8)			(held as beneficial
					owner)
	APL	337,500	0.06%	HK$135,000	Personal interests
		(Note 9)		(Note 9)	(held as beneficial
					owner)

Notes:

Mr. Lee Seng Huang, by virtue of his interests in AGL, APL and the Company, is deemed to be interested in the shares and underlying shares of certain associated corporations of the Company under the SFO. A waiver application was submitted to the Stock Exchange for exemption from disclosure of his deemed interests in the shares and underlying shares of such associated corporations of the Company (except for the companies listed on the Stock Exchange, i.e. Tian An China Investments Company Limited, Shanghai Allied Cement Limited, Yu Ming and Quality HealthCare Asia Limited) in this circular, and a waiver was granted by the Stock Exchange on 29th June, 2007.
Mr. Lee Seng Huang is one of the trustees of the Lee and Lee Trust, being a discretionary trust which indirectly owned approximately 42.10% interest in the issued share capital of AGL.

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APPENDIX

GENERAL INFORMATION

These refer to the same interests held directly or indirectly by AGL in APL.
These include (i) an interest in 402,650,059 shares of APL; (ii) an interest in listed physically settled warrants of APL in an amount of HK$805,080,060, giving rise to an interest in 80,508,006 underlying shares of APL; and (iii) an interest in unlisted convertible bonds of APL in an amount of HK$249,397,270, giving rise to an interest in 24,939,724 underlying shares of APL, held by AGL. The warrants of APL entitle the holders thereof to subscribe at any time during the period from 7th June, 2006 to 6th June, 2009 (both days inclusive) for fully paid shares of APL at an initial subscription price of HK$10 per share (subject to adjustments) (the “APL Warrants”). The convertible bonds of APL entitle the holders thereof to convert all or any of the convertible bonds into fully paid shares of APL at any time during the period from 1st July, 2009 and ending on the business day falling ten business days immediately preceding 9th November, 2011 at an initial conversion price of HK$10 per convertible bond (subject to adjustments) (the “APL’s Convertible Bonds”).
These are the APL’s Convertible Bonds held directly or indirectly by AGL.
These refer to the same interests held directly or indirectly by the Company in its listed associated corporations.
These are the bonds issued by Swan Islands Limited, a direct wholly-owned subsidiary of the Company, to AG Capital Holding Limited, a direct wholly-owned subsidiary of AGL, to partially settle the consideration for the acquisition of UAF Holdings Limited as disclosed in the circular of the Company dated 30th June, 2006.
This represents an interest in 550,000 shares of AGL.
These include (i) an interest in 270,000 shares of APL; (ii) an interest in the APL Warrants in an amount of HK$540,000, giving rise to an interest in 54,000 underlying shares of APL; and (iii) an interest in the APL’s Convertible Bonds in an amount of HK$135,000, giving rise to an interest in 13,500 underlying shares of APL.
All interests stated above represent long positions.

(b) Substantial shareholders’ and other persons’ interests

Save as disclosed below, so far as was known to the Directors, there was no other person who, as at the Latest Practicable Date, had an interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would fall to be disclosed under provisions of Divisions 2 and 3 of Part XV of the SFO, or who, as at the Latest Practicable Date, was directly and indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Group.

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APPENDIX

GENERAL INFORMATION

(i) Interest in the Shares and the underlying Shares as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO

	Number of	Approximate
	Shares and	percentage of
Name of	underlying	the issued
Shareholder	Shares	share capital	Nature of Interests
APL	1,164,425,725	77.92%	Interests of controlled
	(Note 1)		corporation (Note 2)
AGL	1,164,425,725	77.92%	Interests of controlled
	(Note 3)		corporation (Note 4)
Lee and Lee Trust	1,164,425,725	77.92%	Interests of controlled
	(Note 3)		corporation (Note 5)
Penta Investment	164,593,964	11.02%	Investment manager
Advisers Limited	(Note 6)
(“Penta”)
John Zwaanstra	164,593,964	11.02%	Interests of controlled
	(Note 7)		corporation (Note 8)
Penta Japan Fund,	88,669,092	5.94%	Interests of controlled
Ltd. (“Penta	(Note 9)		corporation (Note 10)
Japan”)
Todd Zwaanstra	88,669,092	5.94%	Trustee (other than a
	(Note 9)		bare trustee) (Note 10)
Mercurius GP LLC	88,669,092	5.94%	Founder of a
(“Mercurius”)	(Note 9)		discretionary trust
			(Note 11)
COL Capital	110,110,469	7.37%	Interests of controlled
Limited (“COL”)	(Note 12)		corporation (Note 13)
Vigor Online	110,110,469	7.37%	Interests of controlled
Offshore Limited	(Note 14)		corporation (Note 15)
(“Vigor Online”)
China Spirit	110,110,469	7.37%	Interests of controlled
Limited	(Note 14)		corporation (Note 16)
(“China Spirit”)
Chong Sok Un	110,110,469	7.37%	Interests of controlled
	(Note 14)		corporation (Note 17)

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APPENDIX

GENERAL INFORMATION

Notes:

These include (i) an interest in 973,772,892 Shares; and (ii) an interest in the 2009 Warrants in an amount of HK$1,121,038,658.04, giving rise to an interest in 190,652,833 underlying Shares (at the adjusted subscription price of the 2009 Warrants of HK$5.88 per Share).
The interests were held by AP Emerald Limited (“APE”), a wholly-owned subsidiary of AP Jade Limited which in turn was a wholly-owned subsidiary of APL. APL was therefore deemed to have interests in the Shares and underlying Shares in which APE was interested.
These refer to the same interests in 973,772,892 Shares and 190,652,833 underlying Shares held by APE.
AGL owned approximately 74.93% interest in the issued share capital of APL and was therefore deemed to have interests in the Shares and underlying Shares in which APL was interested.
Mr. Lee Seng Hui, Ms. Lee Su Hwei and Mr. Lee Seng Huang, a Director, are the trustees of the Lee and Lee Trust, being a discretionary trust. They together owned approximately 42.11% interest in the issued share capital of AGL and were therefore deemed to have interests in the Shares and underlying Shares in which AGL was interested.
These include (i) an interest in 143,414,000 Shares; (ii) an interest in the 2009 Warrants, giving rise to an interest in 5,750,964 underlying Shares; and (iii) an interest in unlisted cash settled derivatives of the Company, giving rise to an interest in 15,429,000 underlying Shares.
These refer to the same interests in 143,414,000 Shares and a total of 21,179,964 underlying Shares held by Penta.
Mr. John Zwaanstra was deemed to have interests in the Shares and underlying Shares through his 100% interest in Penta. Mr. John Zwaanstra was also deemed to have interests in the Shares and underlying Shares in which Penta Japan and Mercurius were interested through his control of more than one-third of the voting power of Penta Japan and Mercurius.
These duplicated parts of the interests of Penta and Mr. John Zwaanstra, and include (i) an interest in 69,734,000 Shares; (ii) an interest in the 2009 Warrants, giving rise to an interest in 4,105,092 underlying Shares; and (iii) an interest in unlisted cash settled derivatives of the Company, giving rise to an interest in 14,830,000 underlying Shares.
The interests were held by Penta Master Fund, Ltd. (“Penta Master”), a wholly-owned subsidiary of Penta Japan. Mr. Todd Zwaanstra was deemed to have interests in the Shares and underlying Shares in which Penta Master was interested pursuant to his control of more than one-third of the voting power of Penta Japan as trustee of the Mercurius Partners Trust (“Mercurius Trust”), being a discretionary trust.
Mercurius was the founder of the Mercurius Trust and was therefore deemed to have interests in the Shares and underlying Shares in which Mr. Todd Zwaanstra and Mercurius Trust were interested.
These include (i) an interest in 97,437,000 Shares; and (ii) an interest in the 2009 Warrants in an amount of HK$74,520,000, giving rise to an interest in 12,673,469 underlying Shares (at the adjusted subscription price of the 2009 Warrants of HK$5.88 per Share).
The interests were held by Honest Opportunity Limited (“Honest Opportunity”), Sparkling Summer Limited (“Sparkling Summer”) and Gold Chopsticks Limited (“Gold Chopsticks”). Honest Opportunity and Sparkling Summer were wholly-owned subsidiaries of Classic Fortune Limited (“Classic Fortune”) while Gold Chopsticks was a wholly-owned subsidiary of Besford International Limited (“Besford”). Classic Fortune and Besford were in turn wholly-owned subsidiaries of COL. COL was therefore deemed to have interests in the Shares and underlying Shares in which Honest Opportunity, Sparkling Summer and Gold Chopsticks were interested.
These refer to the same interests in 97,437,000 Shares and 12,673,469 underlying Shares held by Honest Opportunity, Sparkling Summer and Gold Chopsticks.

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APPENDIX

GENERAL INFORMATION

Vigor Online owned approximately 37.77% interest in the issued share capital of COL and was therefore deemed to have interests in the Shares and underlying Shares in which COL was interested.
China Spirit owned 100% interest in the issued share capital of Vigor Online and was therefore deemed to have interests in the Shares and underlying Shares in which Vigor Online was interested.
Ms. Chong Sok Un was deemed to have interests in the Shares and underlying Shares through her 100% interest in China Spirit.
All interests stated above represents long positions. As at the Latest Practicable Date, no short positions were recorded in the register required to be kept under Section 336 of the SFO.

(ii) Interests in the shares of other members of the Group

Name of non			Approximate
wholly-owned			percentage
subsidiaries of the	Name of	Number of	of the relevant
Company	shareholder	shares held	issued share capital
Best Decision	Christophe	17,500	35.00%
Investments	Lee Kin
Limited	Ping
GFIA – SHK	LOTE	49	49.00%
Managers Limited	Limited		(Note)
(“GFIA”)	(“LOTE”)
SHK Financial Data	Unison	49	49.00%
Limited	Information
	Limited
United Asia Finance	ITOCHU	25,625,000	18.64%
Limited	Hong Kong
	Limited

Note: Although the Group holds 51% interest in GFIA, it is jointly controlled by the Group and LOTE. Its profit and loss are split 50/50 between the Group and LOTE.

3. SERVICE CONTRACTS OF THE DIRECTORS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which does not expire or is not terminable by such member of the Group within one year without payment of compensation (other than statutory compensation).

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GENERAL INFORMATION

APPENDIX

4. DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

Save as disclosed below, as at the Latest Practicable Date, none of the Directors (not being the independent non-executive Directors) nor their respective associates were considered to have interests in the businesses which compete or are likely to compete with the businesses of the Group pursuant to the Listing Rules:

(a) Mr. Lee Seng Huang is one of the trustees of the Lee and Lee Trust which is a deemed substantial shareholder of each of AGL, APL and Tian An China Investments Company Limited (“Tian An”) which, through their subsidiaries, are partly engaged in the businesses as follows:
AGL, through certain of its subsidiaries, is partly engaged in the business of money lending, provision of financial services and property investment;
APL, through certain of its subsidiaries, is partly engaged in the businesses of money lending and property investment; and
Tian An, through a subsidiary, is partly engaged in the business of money lending.
(b) Mr. Patrick Lee Seng Wei is a director of APL and Tian An. APL, through certain of its subsidiaries, is partly engaged in the businesses of money lending and property investment; and Tian An, through a subsidiary, is partly engaged in the business of money lending.

As the Board is independent from the boards of the abovementioned companies and none of the above Directors can control the Board, the Group is capable of carrying on its businesses independently of, and at arm’s length from, the businesses of such companies.

5. LITIGATION

Save as disclosed below, as at the Latest Practicable Date, no member of the Group was engaged in any litigation or claims of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened against any member of the Group:

(a) On 10th July, 2006, the Court of Final Appeal upheld the judgment (as amended by the Court of Appeal) of the Hong Kong Court of First Instance of 1st April, 2004, that Sun Hung Kai Securities Limited (“SHKS”), a wholly-owned subsidiary of the Company, holds a 12.5% interest in a 50/50 joint venture entered into between New World Development Company Limited (“NWDC”) and IGB Corporation Berhad to purchase land and build two international hotels plus a 200-unit service apartment in Kuala Lumpur, Malaysia (the “Joint Venture”), and that accordingly SHKS was liable to pay to NWDC the sums which NWDC had advanced to the joint venture

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APPENDIX

GENERAL INFORMATION

company Great Union Properties Sdn. Bhd (“GUP”) on behalf of SHKS, together with interest on such monies (the “Judgment Sum”) and costs of the First Instance hearing and of the two appeals. SHKS has duly paid the Judgment Sum. The final amount of NWDC’s costs and disbursements that SHKS is liable to pay has yet to be determined. SHKS received further claims from NWDC for amounts advanced to GUP on behalf of SHKS with respect to the Joint Venture and these claims have been paid.

(b) In June 2006, the Company received notice of a 2001 order made by the Hubei Province Higher Peoples Court in China freezing US$3 million (or assets of equivalent value) of SHKS’s funds pursuant to which SHKS’s shares in Chang Zhou Power Development Company Limited in China (the “ Chang Zhou Shares”) (worth US$3 million) were frozen. SHKS had sold the Chang Zhou Shares in 1998. The Company continues to investigate the matter.

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31st December, 2006, the date to which the latest published audited financial statements of the Company were made up.

7. EXPERT AND CONSENT

The following is the qualification of the expert who has given opinion or advice which is contained in this circular:

Name Qualification

KGI

a corporation licensed to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, KGI did not have:

(a) any direct or indirect interest in any assets which have since 31st December, 2006, being the date to which the latest published audited financial statements of the Group were made up) been 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; and
(b) 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.

KGI has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and reference to its name in the form and context in which it appears.

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APPENDIX

GENERAL INFORMATION

8. DIRECTORS’ INTERESTS IN CONTRACT AND ASSETS

As at the Latest Practicable Date, Mr. Lee Seng Huang, being a Director and one of the trustees of the Lee and Lee Trust, a discretionary trust which indirectly owned approximately 42.10% interest in the issued share capital of AGL which in turn owned 100% interest in Bright Clear, was considered to be materially interested in the Agreement.

Save as disclosed above, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to the business of the Group.

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31st December, 2006 (being the date to which the latest published audited financial statements of the Company were made up), (i) acquired or disposed of by; or (ii) leased to; or (iii) proposed to be acquired or disposed of by; or (iv) proposed to be leased to, any member of the Group.

9. GENERAL

(a) The registered office of the Company is Level 12, One Pacific Place, 88 Queensway, Hong Kong.
(b) The company secretary of the Company is Ms. Hester Wong Lam Chun. She is a fellow member of the Institute of Chartered Secretaries and Administrators and the Hong Kong Institute of Chartered Secretaries.
(c) The qualified accountant of the Company is Mr. Patrick Poon Mo Yiu. He is a fellow member of the Association of Chartered Certified Accountants and Fellow of the Hong Kong Institute of Certified Public Accountants.
(d) The share registrars of the Company are Secretaries Limited of 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(e) This circular is prepared in both English and Chinese. In the event of inconsistency, the English text shall prevail.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of following documents will be available for inspection at the office of P. C. Woo & Co. at 12th Floor, Prince’s Building, 10 Chater Road, Central, Hong Kong during normal business hours on any business day from the date of this circular up to and including the date of the EGM:

(a) the Agreement;
(b) the letter from KGI, the text of which is set out in this circular; and
(c) the written consent referred to under section headed “Expert and Consent” in this Appendix.

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NOTICE OF THE EGM

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(Incorporated in Hong Kong with limited liability) (Stock Code: 86)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “Meeting”) of Sun Hung Kai & Co. Limited (the “Company”) will be held at Vinson Conference Room, Pacific Place Conference Centre, Level 5, One Pacific Place, 88 Queensway, Hong Kong on Friday, 20th July, 2007 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without modifications, the following resolution as an ordinary resolution:

ORDINARY RESOLUTION

“ THAT (i) the sale and purchase agreement (the “Agreement”) dated 7th June, 2007 made between (i) the Company, Sun Hung Kai Venture Capital Limited (an indirect wholly-owned subsidiary of the Company) and Best Delta International Limited (an indirect wholly-owned subsidiary of the Company) as vendors; (ii) Allied Group Limited (“AGL”) as guarantor; and (iii) Bright Clear Limited (an indirect wholly-owned subsidiary of AGL) as purchaser, relating to the sale and purchase of a total of 379,291,800 shares of Yu Ming Investments Limited (“Yu Ming”), representing approximately 22.428% of the issued share capital of Yu Ming, at an aggregate consideration of HK$166,888,932, a copy of which has been produced at the Meeting marked “A” and signed by the chairman of the Meeting for identification purpose, be and is hereby approved, confirmed and ratified; the transactions contemplated in the Agreement be and are hereby approved; and the directors of the Company be and are hereby authorised to do such acts and execute such other documents as they may consider necessary, desirable or expedient to carry out or give effect to or otherwise in connection with or in relation to the Agreement.”

By order of the Board Sun Hung Kai & Co. Limited Hester Wong Lam Chun Company Secretary

Hong Kong, 3rd July, 2007

Registered Office:

Level 12 One Pacific Place 88 Queensway Hong Kong

– 33 –

NOTICE OF THE EGM

Notes:

A member entitled to attend and vote at the Meeting may appoint one or more proxies to attend and, on a poll, to vote in his stead. A proxy need not be a member of the Company but must be present in person to represent the member.
Where there are joint registered holders of any shares, any one of such persons may attend and vote at the Meeting, either personally or by proxy, in respect of such shares as if he were solely entitled thereto; but if more than one of such joint holders be present at the Meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such shares shall alone be entitled to vote in respect thereof.
In order to be valid, the form of proxy duly completed and signed in accordance with the instructions printed on it together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of it must be deposited at the office of the Company’s share registrars, Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding of the Meeting or any adjournment thereof. The completion and delivery of the form of proxy will not preclude you from attending and voting in person at the Meeting or any adjournment thereof if you so wish.

– 34 –

AI assistant

First Pacific Company Limited — Proxy Solicitation & Information Statement 2007

48980_rns_2007-07-02_d069decd-ac42-4bd1-99a2-b170006b4da9.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

CONNECTED TRANSACTION

CONDITIONAL SALE AND PURCHASE OF APPROXIMATELY 22.428% OF THE ISSUED SHARE CAPITAL OF YU MING INVESTMENTS LIMITED

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

CONTENTS

DEFINITIONS

DEFINITIONS

LETTER FROM THE BOARD

CONNECTED TRANSACTION

INTRODUCTION

LETTER FROM THE BOARD

THE AGREEMENT

Date

LETTER FROM THE BOARD

Parties

The Sale Shares

Consideration

LETTER FROM THE BOARD

Conditions

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Completion

INFORMATION ABOUT AGL, APL, THE COMPANY, SHKVC, BEST DELTA AND BRIGHT CLEAR

AGL

APL

The Company

LETTER FROM THE BOARD

SHKVC

Best Delta

Bright Clear

INFORMATION ABOUT YU MING

SUMMARY OF FINANCIAL RESULTS OF YU MING

REASONS FOR AND BENEFITS OF THE SALE AND PURCHASE OF THE SALE SHARES

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE TRANSACTION

LISTING RULES IMPLICATIONS

EGM

LETTER FROM THE BOARD

PROCEDURES FOR DEMANDING A POLL

RECOMMENDATION

ADDITIONAL INFORMATION

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

CONNECTED TRANSACTION

CONDITIONAL SALE AND PURCHASE OF APPROXIMATELY 22.428% OF THE ISSUED SHARE CAPITAL OF YU MING INVESTMENTS LIMITED

Yours faithfully,

For and on behalf of the Independent Board Committee

LETTER FROM KGI

CONNECTED TRANSACTION

INTRODUCTION

LETTER FROM KGI

THE INDEPENDENT BOARD COMMITTEE

LETTER FROM KGI

BASIS OF OUR OPINION

LETTER FROM KGI

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of the Agreement

2. Reasons for, and benefits of entering into the Agreement

The Sale Shares and the business review of Yu Ming

LETTER FROM KGI

Reasons for, and benefits of entering into the Agreement

LETTER FROM KGI

3. Principal terms of the Agreement

Basis of the consideration

LETTER FROM KGI

Stock price of Yu Ming Shares for the 6-month period immediately before the date of the Joint Announcement

Source: HKEx website

LETTER FROM KGI

LETTER FROM KGI

4. Financial effects of the disposal of the Sale Shares

Effect on earnings

RECOMMENDATION

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests

GENERAL INFORMATION

GENERAL INFORMATION

First Pacific Company Limited Proxy Solicitation & Information Statement 2007