G-Resources Group Limited — Capital/Financing Update 2012

Apr 27, 2012

THIS OFFERING CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Paladin Limited and are not a Qualifying Shareholder, you should at once hand the Open Offer Documents to the purchaser or the transferee or to the bank, licensed securities, dealer, registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Subject to the granting of listing of, and permission to deal in, the Open Offer Shares on the Stock Exchange, the Open Offer Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Open Offer Shares on the Stock Exchange or such other date as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Dealings in the securities of the Company may be settled through CCASS and you should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for details of the settlement arrangements and how such arrangements may affect your rights and interests.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of the Open Offer Documents, make no representation as to their 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 the Open Offer Documents.

PALADIN LIMITED

(Incorporated in Bermuda with limited liability) (Stock code: 495 and 642 (Preference Shares))

OPEN OFFER OF 214,860,596 ORDINARY SHARES OF HK$0.01 EACH IN THE PROPORTION OF TWO (2) OPEN OFFER SHARES FOR EVERY FIVE (5) ORDINARY SHARES HELD ON THE RECORD DATE AT A SUBSCRIPTION PRICE OF HK$0.155 PER OPEN OFFER SHARE

Financial adviser to the Company

==> picture [149 x 52] intentionally omitted <==

Terms used in this cover page have the same meanings as defined in this Open Offer offering circular.

The latest time for application and payment for the Open Offer Shares and excess Open Offer Shares is at 4:00 p.m. on Monday, 14 May, 2012. The procedures for application and payment for the Open Offer Shares and excess Open Offer Shares are set out on pages 12 to 13 of this Open Offer offering circular.

The Open Offer is conditional upon, inter alia, the fulfilment or waiver of the conditions set out in the paragraph headed “Conditions of the Underwriting Agreement” in this Open Offer offering circular.

Shareholders should note that the Shares have been dealt in on an ex-entitlement basis commencing from Tuesday, 24 April, 2012 and that dealings in the Shares may take place while the conditions to which the Underwriting Agreement is subject remain unfulfilled. Any Shareholder or other person dealing in the Shares up to the date on which all conditions of the Underwriting Agreement are fulfilled or waived, will accordingly bear the risk that the Open Offer may not become unconditional or may not proceed. Any Shareholder or other person contemplating dealings in Shares is recommended to consult their its professional advisers.

27 April, 2012

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
APPENDIX I – FINANCIAL INFORMATION OF THE GROUP. . . . . . . . . . . . . . . . . . 18
APPENDIX II – UNAUDITED PRO FORMA FINANCIAL
INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
APPENDIX III – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

DEFINITIONS

In this circular, unless the context requires otherwise, the following terms have the meanings set out below:

• “Announcement”

• the announcement of the Company dated 10 April, 2012 in relation to the Open Offer

• “Application Form(s)” the application form(s) for the Open Offer Shares being sent to the Qualifying Shareholders in connection with the Open Offer

• “Business Day” any day (excluding a Saturday, Sunday and any day on which a tropical cyclone warning signal no. 8 or above or a “black” rainstorm warning signal is hoisted or remains hoisted in Hong Kong at any time between 9:00 a.m. to 5:00 p.m.) on which banks generally are open for business in Hong Kong

• “CCASS”

• the Central Clearing and Settlement System established and operated by HKSCC

• “Company” or “Paladin”

• Paladin Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Stock Exchange

• “Excess Application Form(s)”

• the application form(s) for excess Open Offer Shares being sent to the Qualifying Shareholders in connection with the Open Offer

• “Five Star Investments” Five Star Investments Limited, a company incorporated in the British Virgin Islands, which is owned as to 67% by Madam Oung Chin Liang Fung and 33% of Ms. Lilian Oung and which holds 267,815,017 Ordinary Shares, representing 49.86% of the existing issued Ordinary Share capital

• “Gold Seal”

• Gold Seal Limited, a company incorporated in the British Virgin Islands, and which is owned as to 66.7% by Mr. Oung Da Ming and 33.3% by Ms. Uon Margaret

• “Goldenfield Equities” Goldenfield Equities Limited, a company incorporated in the British Virgin Islands, in which Mike Chen Te Kuang, an executive director of the Company and a member of the Oung Family, holds 40% of the issued shares

• “Group”

• Paladin, together with its subsidiaries

• “HKSCC”

• Hong Kong Securities Clearing Company Limited

• “Last Trading Date”

• 10 April, 2012 being the last date of trading in the Shares immediately before announcement of the Open Offer

1

DEFINITIONS

• “Latest Acceptance Time”

• 4:00 p.m. on Monday, 14 May, 2012 or such other time as may be agreed between the Company and the Underwriters, being the latest time for application for Open Offer Shares

• “Latest Practicable Date”

• 25 April, 2012 being the latest practicable date for ascertaining certain information for inclusion in this Open Offer offering circular

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

• “Non-Qualifying Shareholders” Ordinary Shareholders whose names appeared on the register of members of the Company as at the close of business on the Record Date and whose addresses as shown on such register are outside Hong Kong where the directors of the Company, based on opinions provided by its legal adviser, consider it necessary or expedient not to offer the Open Offer Shares to such Ordinary Shareholders on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place

• “Open Offer” the open offer of Ordinary Shares on the basis of two (2) Open Offer Shares for every five (5) Ordinary Shares held on the Record Date at a subscription price of respectively HK$0.155 per Open Offer Share effected by the Open Offer Agreement

• “Open Offer Documents” this Open Offer offering circular dated 27 April, 2012 and the related Application Form(s) and Excess Application Form(s)

• “Open Offer Share” 214,860,596 new Ordinary Shares to be issued by the Company pursuant to the Open Offer

• “Ordinary Share(s)” ordinary share(s) of HK$0.01 each in the capital of the Company

• “Ordinary Shareholder(s)” holder(s) of Ordinary Shares

• “Oung Family”

• comprise Five Star Investments, Goldenfield Equities, Sward Finance Limited, Ms. Lilian Oung, Madam Oung Chin Liang Fung (mother of Ms. Lilian Oung), Mr. Mike Chen Te Kuang (son of Ms. Lilian Oung), Mr. James Oung Shih Hua (nephew of Ms. Lilian Oung) Messrs. Oung Da Ming and Oung I Ming (brothers of Ms. Lilian Oung) and Ms. Uon Margaret (sister of Ms. Lilian Oung)

• “Preference Share(s)” convertible redeemable preference share(s) of HK$0.01 each in the capital of the Company

2

	DEFINITIONS
“Preference Shareholder(s)”	holder(s) of Preference Shares
“Qualifying Shareholders”	Ordinary Shareholders who are qualified to participate in the Open
	Offer
“Record Date”	Wednesday, 25 April, 2012
“SFO”	The Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	Ordinary Share(s) and Preference Share(s)
“Shareholder(s)”	holder(s) of Ordinary or Preference Shares, as the case may be
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Stock Exchange Business Day”	a day on which the Stock Exchange is open for business
“Undertaking Shareholders”	comprise Five Star Investments, Goldenfield Equities, Mr. Oung
	Da Ming, Mr. Mike Chen Te Kuang and Mr. James Oung Shi Hua,
	who are members of the Oung Family
“Underwriting Agreement”	the underwriting agreement dated 10 April, 2012 entered into
	between the Company and Gold Seal in respect of the Open Offer

3

EXPECTED TIMETABLE

Set out below is an indicative timetable for the implementation of the Open Offer

Latest time for application and payment for Open Offer Shares and excess Open Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Monday, 14 May, 2012

Latest time for Underwriting Agreement to become unconditional . . . . . . . . . . 4:00 p.m. on Wednesday, 16 May, 2012

Announcement of results of the Open Offer to be published . . . . . . . . . . . . . . . . .Tuesday, 22 May, 2012

Despatch of certificates for Open Offer Shares and refund cheques

on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 23 May, 2012 Expected first day of dealings in Open Offer Shares . . . . . . . . . . . . . . . . . . . . . . Thursday, 24 May, 2012

Dates or deadlines specified in this circular for events in the timetable for, or otherwise in relation to, the Open Offer are indicative only. Any changes to the expected timetable will be published by way of public announcement. All times and dates refer to Hong Kong local time.

Effect of bad weather on the latest time for application and payment for Open Offer Shares

The latest time for application and payment for the Open Offer Shares and excess Open Offer Shares will change if there is:

• a tropical cyclone warning signal number 8 or above, or

• a “black” rainstorm warning

in force in Hong Kong at any local time before 12:00 noon and no longer in force after 12:00 noon on Monday, 14 May, 2012. Instead the latest time for application and payment for the Open Offer Shares and excess Open Offer Shares will be extended to 5:00 p.m. on the same Business Day; or in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on Monday, 14 May, 2012. Instead the latest time for application and payment for the Open Offer Shares and excess Open Offer Shares will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warnings in force at any time between 9:00 a.m. and 4:00 p.m.

If the latest time for application and payment for the Open Offer Shares and excess Open Offer Shares does not take place on Monday, 14 May, 2012, the dates mentioned in the expected timetable above may be affected and an announcement will be made by Paladin in such event.

4

LETTER FROM THE BOARD

PALADIN LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 495 and 642 (Preference Shares))

Executive Directors Law Fong (Chairman) Chen Te Kuang Mike (Chief Executive Officer)

Non-executive Director Oung Shih Hua, James

Independent Non-executive Directors Zhu Pei Qing Lu Ti Fen Kwok Wai Chi

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head office and principal place of business: 45th Floor, Office Tower Convention Plaza 1 Harbour Road Wan Chai Hong Kong

27 April, 2012

To Shareholders

Dear Sir/Madam,

OPEN OFFER OF 214,860,596 ORDINARY SHARES OF HK$0.01 EACH IN THE PROPORTION OF TWO (2) OPEN OFFER SHARES FOR EVERY FIVE (5) ORDINARY SHARES HELD ON THE RECORD DATE AT A SUBSCRIPTION PRICE OF HK$0.155 PER OPEN OFFER SHARE

INTRODUCTION

As announced by the Company in the Announcement on 10 April, 2012, the Company proposes to raise approximately HK$33.3 million, before expenses, by way of the Open Offer of Ordinary Shares on the basis of assured allotments of two (2) Open Offer Share(s) for every five (5) Ordinary Shares held on the Record Date at a subscription price of HK$0.155 per Open Offer Share.

The Open Offer involves an issue of 214,860,596 Open Offer Shares at the Subscription Price of HK$0.155 per Open Offer Share. Based on the estimated net proceeds of approximately HK$30.3 million from the Open Offer, the net price received by the Company per Open Offer Share upon issue of the Open Offer Shares will be approximately HK$0.141.

5

LETTER FROM THE BOARD

The Open Offer is only available to the Qualifying Shareholders.

The purpose of this Open Offer offering circular is to provide you with, among other things, full information in relation to the Open Offer.

OPEN OFFER

On 10 April, 2012, after trading hours, the Company entered into the Underwriting Agreement with Gold Seal in respect of the Open Offer. Details of the Open Offer are set out below:

Issue Statistics

Basis of the Open Offer

Assured allotment of two (2) Open Offer Shares, for every five (5) Ordinary Shares held on the Record Date, at a subscription price of HK$0.155 per Open Offer Share

Number of existing Ordinary Shares 537,151,492 Ordinary Shares in issue at the Record Date

Number of Open Offer Shares

214,860,596 Open Offer Shares

Amount to be raised Approximately HK$33.3 million, before expenses Number of Open Offer Shares 119,540,006 Open Offer Shares undertaken to be applied and paid for by the Undertaking Shareholders

Number of Open Offer Shares underwritten by Gold Seal as the underwriter

95,320,590 Open Offer Shares, being the total number of Open Offer Shares excluding 119,540,006 Open Offer Shares to be applied for by the Undertaking Shareholders pursuant to their irrevocable undertaking

6

LETTER FROM THE BOARD

Subscription price

HK$0.155 per Open Offer Share payable in cash in full on application

The subscription price of HK$0.155 per Open Offer Share represents:

• (i) a premium of approximately 29.17% over the closing price of HK$0.12 per Ordinary Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) a premium of approximately 12.32% over the average closing price of approximately HK$0.138 per Ordinary Share for the five consecutive trading days up to and including the Last Trading Day;

• (iii) a premium of approximately 12.32% over the average closing price of approximately HK$0.138 per Ordinary Share for the ten consecutive trading days up to and including the Last Trading Day;

• (iv) a premium of approximately 9.93% over the theoretical exentitlement price of HK$0.141 per Ordinary Share after the Open Offer, based on the closing price of HK$0.136 per Ordinary Share as quoted on the Stock Exchange on the Last Trading Day; and

• (v) a premium of approximately 12.32% over the closing price of HK$0.138 per Ordinary Share as quoted on the Stock Exchange on the Latest Practicable Date.

The subscription price was determined by the directors of the Company with reference to the prevailing market price of the Shares prior to and including the Last Trading Day. Each Qualifying Shareholder will be assured of an allotment of Open Offer Shares applied for in proportion to his, her, its shareholding held on the Record Date on the basis set out above.

As at the Latest Practicable Date, the Company had 255,255,930 Preference Shares outstanding, convertible into 255,255,930 Ordinary Shares.

Save and except for the conversion rights attaching to the Preference Shares, the Company has no other outstanding derivatives, options, warrants and conversion rights or other similar rights which were convertible or exchangeable for Shares.

7

LETTER FROM THE BOARD

Effects on the shareholding structure

The table below shows the shareholding structure of Paladin as at the Latest Practicable Date:

Shareholders Five Star Investments Limited Goldenfield Equities Limited Oung Da Ming Chen Te Kuang Mike Oung Shih Hua, James Oung I Ming Sward Finance Limited Gold Seal Oung Family Public Total	Ordinary Shares held 267,815,017 21,035,000 – 5,000,000 5,000,000 1,200,000 200,000 – 300,250,017 236,901,475 537,151,492	% 49.86% 3.92% 0.00% 0.93% 0.93% 0.22% 0.04% 0% 55.90% 44.10% 100.00%	Preference Shares held 133,907,508 9,099,014 50,000,000 2,500,000 2,500,000 – – – 198,006,522 57,249,408 255,255,930	% 52.46% 3.56% 19.59% 0.98% 0.98% 0.00% 0.00% 0% 77.57% 22.43% 100.00%	Total no. of Shares held 401,722,525 30,134,014 50,000,000 7,500,000 7,500,000 1,200,000 200,000 – 498,256,539 294,150,883 792,407,422	% 50.70% 3.80% 6.31% 0.95% 0.95% 0.15% 0.03% 0%
						62.88% 37.12%
						100.00%

The table below shows the effects of the Open Offer on the shareholding structure of the Company assuming no Shares are issued before the close of the Open Offer:

Oung Family Public Total		Shareholding structure	Shareholding structure	% 62.9% 37.1% 100.0%	Assuming every Qualifying Shareholder applies for its entire assured allotment of Open Offer Shares Ordinary Preference Total no. Shares Shares of Shares % 420,355,757 198,006,522 618,362,279 61.4% 331,656,331 57,249,408 388,905,739 38.6% 752,012,088 255,255,930 1,007,268,018 100.0%	Assuming every Qualifying Shareholder applies for its entire assured allotment of Open Offer Shares Ordinary Preference Total no. Shares Shares of Shares % 420,355,757 198,006,522 618,362,279 61.4% 331,656,331 57,249,408 388,905,739 38.6% 752,012,088 255,255,930 1,007,268,018 100.0%	Assuming every Qualifying Shareholder applies for its entire assured allotment of Open Offer Shares Ordinary Preference Total no. Shares Shares of Shares % 420,355,757 198,006,522 618,362,279 61.4% 331,656,331 57,249,408 388,905,739 38.6% 752,012,088 255,255,930 1,007,268,018 100.0%	Assuming no public Shareholders apply in the Open Offer	Assuming no public Shareholders apply in the Open Offer	Assuming no public Shareholders apply in the Open Offer	Assuming no public Shareholders apply in the Open Offer
	Ordinary Shares 300,250,017 236,901,475 537,151,492	Preference Shares 198,006,522 57,249,408 255,255,930	Total no. of Shares 498,256,539 294,150,883 792,407,422		Ordinary Shares 420,355,757 331,656,331 752,012,088	Preference Shares 198,006,522 57,249,408 255,255,930	Total no. of Shares 618,362,279 388,905,739 1,007,268,018	Ordinary Shares 515,110,613 236,901,475 752,012,088	Preference Shares 198,006,522 57,249,408 255,255,930	Total no. of Shares 713,117,135 294,150,883 1,007,268,018	% 70.8% 29.2%
											100.0%

8

LETTER FROM THE BOARD

Effects on conversion rights

The Open Offer will not to lead to an adjustment to the conversion price of the Preference Shares.

Qualifying Shareholders

Paladin is sending this Open Offer offering circular and Application Forms to the Qualifying Shareholders of Paladin only. To qualify for the Open Offer, an Ordinary Shareholder was required to be registered as an Ordinary Shareholder at 4:30 p.m. on the Record Date, Wednesday, 25 April, 2012.

Having made enquiries as to whether the offer of Ordinary Shares to Shareholders whose addresses are not in Hong Kong on the Record Date may contravene the applicable securities legislation of the relevant overseas places or the requirements of any relevant regulatory body or stock exchange pursuant to Rule 13.36(2)(a) of the Listing Rules, the board of directors is of the opinion that it is necessary or expedient, on account either of the legal restrictions under the laws of the relevant place or of any requirement of the relevant regulatory body or stock exchange in that place, not to offer Ordinary Shares to Ordinary Shareholders whose addresses are in the United States of America, no offer of Ordinary Shares is being made to such Ordinary Shareholders.

9

LETTER FROM THE BOARD

Payment

The subscription price of HK$0.155 per Open Offer Share is payable in cash when a Qualifying Shareholder applies for Open Offer Shares.

Status of the Open Offer Shares

The Open Offer Shares, when allotted, issued and fully-paid, will rank pari passu with the then existing Ordinary Shares in issue on the date of allotment of the Open Offer Shares. Holders of such Open Offer Shares will be entitled to receive all future dividends and distributions which are declared, made or paid on or after the date of allotment and issue of the Open Offer Shares.

Fractions

Paladin will not issue fractions of Open Offer Shares. All fractions of Open Offer Shares will be aggregated and any Ordinary Shares resulting from the aggregation of fractions are available for excess application.

Share certificates for the Open Offer Shares and refund cheques

Certificates for all fully-paid Open Offer Shares are expected to be despatched by ordinary post on Wednesday, 23 May, 2012 to those Qualifying Shareholders who have applied and paid for Open Offer Shares, to the extent those applications are accepted, at their own risk.

Refund cheques in respect of wholly or partly unsuccessful applications for excess Open Offer Shares, or if the Open Offer is terminated, will be despatched by ordinary post on or before Wednesday, 23 May, 2012 to the applicants at their own risk.

10

LETTER FROM THE BOARD

Excess Application

The Open Offer Shares which represent assured allotments of the Non-Qualifying Shareholders and any Open Offer Shares in assured allotments that are not validly applied for by the relevant Qualifying Shareholders as well as Open Offer Shares arising on the aggregation of fractional shares in assured allotments will be available for application by the Qualifying Shareholders. Qualifying Shareholders have the right to apply for any Open Offer Shares in excess of their own assured allotments under the Application Forms but are not assured of being allocated any Open Offer Shares in excess of their assured allotments. The directors of the Company will allocate the excess Open Offer Shares at their absolute discretion on a fair and equitable basis on the following principles:

• preference will be given to topping up odd lots to whole board lots where it appears to the directors of the Company that such applications are made to round up odd-lot holdings to whole-board lot holdings and that such applications are not made with intention to abuse this mechanism; and

• subject to availability of excess Open Offer Shares after allocation under the principle set out above, the excess Open Offer Shares will be allotted to Qualifying Shareholders, who have applied for excess Open Offer Shares, on a pro rata basis based on the number of excess Open Offer Shares applied for by them, with allocations to be made in full board lots where practicable.

In applying the principles above, reference will only be made to the number of excess Open Offer Shares being applied for. No reference will be made to the Open Offer Shares in assured allotments or the existing number of Ordinary Shares held by Qualifying Shareholders.

Qualifying Shareholders should note that the number of Open Offer Shares which may be allocated to them may be different where they make applications by different means, such as making applications in their own names as against through nominees who also hold Shares for other investors. Qualifying Shareholders with their Ordinary Shares held by a nominee company should note that the board of directors of Paladin will regard the nominee company (including HKSCC Nominees Limited) as a single Ordinary Shareholder according to the register of members of the Company. Accordingly, Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Open Offer Shares will not be extended to beneficial owners individually.

Application for listing

Paladin has applied to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Ordinary Shares to be issued under the Open Offer.

Dealings in the Open Offer Shares on the Stock Exchange will be subject to the payment of stamp duty in Hong Kong, Stock Exchange trading fee, Securities and Futures Commission transaction levy and other applicable fees and charges in Hong Kong.

11

LETTER FROM THE BOARD

Subject to the granting of listing of, and permission to deal in, the Open Offer Shares on the Stock Exchange, the Open Offer Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Open Offer Shares on the Stock Exchange or such other date as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

PROCEDURES FOR APPLICATION AND PAYMENT

Application for Open Offer Shares

The Application Form enclosed with this Open Offer offering circular (which form is not being sent to Non-Qualifying Shareholders) entitles the Qualifying Shareholder to whom it is addressed to apply for the number of Open Offer Shares on an assured basis as shown therein subject to payment in full on the Latest Acceptance Time. Qualifying Shareholders should note that they may apply for any number of Open Offer Shares but are assured of an allotment only up to the number set out in the Application Forms.

If the Qualifying Shareholders wish to apply for all the Open Offer Shares offered to them as specified in the Application Forms or wish to apply for any number less than their assured entitlement under the Open Offer, they must complete, sign and lodge the Application Forms in accordance with the instructions printed thereon, together with remittance for the full amount payable in respect of such number of Open Offer Share they have applied with the Company’s Hong Kong Branch Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong by no later than 4:00 p.m. on Monday, 14 May, 2012. All remittance(s) must be made in Hong Kong dollars and cheques must be drawn on an account with, or banker’s cashier orders must be issued by, a licensed bank in Hong Kong and made payable to “ Paladin Limited – Open Offer Account ” and crossed “ Account Payee Only ”.

It should be noted that unless the duly completed and signed Application Forms, together with the appropriate remittance, have been lodged with the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, by no later than 4:00 p.m. on Monday, 14 May, 2012 the assured entitlement under the Open Offer and all rights in relation thereto shall be deemed to have been declined and will be cancelled.

Application for Excess Open Offer Shares

Qualifying Shareholders have the right to apply for any Open Offer Shares in excess of their own assured allotments under the Excess Application Forms but are not assured of being allocated any Shares in excess of those in their assured allotments.

12

LETTER FROM THE BOARD

Application for excess Open Offer Shares should be made by completing the Excess Application Forms enclosed with this Open Offer offering circular and lodging the same in accordance with the instructions printed thereon, together with remittance (which form is not being sent to Non-Qualifying Shareholders) for the full amount payable in respect of such number of excess Open Offer Shares they have applied with the Company’s Hong Kong Branch Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong by no later than 4:00 p.m. on Monday, 14 May, 2012. All remittance(s) must be made in Hong Kong dollars and cheques must be drawn on an account with, or banker’s cashier orders must be issued by, a licensed bank in Hong Kong and made payable to “ Paladin Limited – Excess Application Account ” and crossed “ Account Payee Only ”. The Company’s Hong Kong Branch Share Registrar will notify the Qualifying Shareholders of any allotment of the excess Open Offer Shares made to them.

It should be noted that unless a duly completed and signed Excess Application Form, together with the appropriate remittance, has been lodged with the Company’s Hong Kong Branch Share Registrar, Computershare Hong Kong Investor Services Limited, by no later than 4:00 p.m. on Monday, 14 May, 2012, or Excess Application Form is liable to be rejected.

All cheques or cashier orders will be presented for payment immediately following receipt and all interest earned on such application monies will be retained for the benefit of the Company. Any Application Form or Excess Application Form in respect of which the cheque or cashier order is dishonoured on first presentation is liable to be rejected, and in that event the relevant entitlements of the Qualifying Shareholders or the application for excess Open Offer Shares (as the case may be) under the Open Offer will be deemed to have been declined and will be cancelled.

The Directors will allocate the excess Open Offer Shares in accordance with the measures as set out in the paragraphs titled “ Excess Application ” of this Open Offer offering circular.

The Qualifying Shareholders are recommended to consult their professional advisers if they are in any doubt as to the taxation implications of applying for, holding, disposing of or dealing in the Open Offer Shares. None of the Company, the Directors or any other parties involved in the Open Offer accepts responsibility of any tax effects or liabilities of holders of the Open Offer Shares resulting from the application for, holding, disposal of, or dealing in the Open Offer Shares.

Both the Application Form and the Excess Application Form are for the use by the person(s) named therein only and are not transferable. No receipt will be issued in respect of any application monies received.

13

LETTER FROM THE BOARD

UNDERWRITING AGREEMENT

Underwriting agreement

Date : 10 April, 2012 Number of Open Offer Shares : 95,320,590 Open Offer Shares, being the total underwritten number of Open Offer Shares excluding 119,540,006 Open Offer Shares to be applied for by the Undertaking Shareholders pursuant to their irrevocable undertaking Commission : a commission of 2% of the amount underwritten is payable to Gold Seal. The underwriting commission was determined with reference to market practice. The directors of Paladin (including the independent non-executive directors) consider the underwriting commission to be in line with the market rate. All the legal costs incurred in the preparation of the Underwriting Agreement will be borne by Paladin

Irrevocable undertakings by the Undertaking Shareholders

As at the Latest Practicable Date, the Oung Family was beneficially interested in an aggregate of 300,250,017 Ordinary Shares and 198,006,522 Preference Shares, representing approximately 62.9% of the existing total issued share capital of Paladin. The Undertaking Shareholders have irrevocably undertaken to Paladin that (i) they will apply for their entire assured allotment under the Open Offer in full; and (ii) they will not sell any Shares during the period until the Open Offer has either been completed or terminated.

14

LETTER FROM THE BOARD

Conditions of the Underwriting Agreement

The Underwriting Agreement is conditional upon, amongst other things, the Listing Committee of the Stock Exchange granting, and not having revoked or withdrawn, the listing of, and the permission to deal in, the Open Offer Shares to be issued under the Open Offer, on or before the posting date of this Open Offer offering circular and Application Forms and not having withdrawn or revoked such listing and permission.

Termination of the Underwriting Agreement

Gold Seal may terminate the arrangements set out in the Underwriting Agreement, by notice in writing to Paladin at any time prior to 4:00 p.m. on the second Business Day following the latest day for applications in the Open Offer if there occurs, amongst other things:

• any material change in existing law or regulation or other occurrence of any nature of any local, national or international event or any change of a political, military, financial, economic, currency or other nature affecting local securities market or the occurrence of any combination of circumstances which may, in the opinion of Gold Seal, adversely affect the business or the financial or trading position or prospects of the Group or adversely prejudice the success of the Open Offer, making it inexpedient or inadvisable for Paladin or Gold Seal to proceed with the Open Offer; or

• any change in market conditions in Hong Kong (including without limitation suspension or material restriction or trading in securities) which may affect the success of the Open Offer or otherwise in the opinion of Gold Seal makes it inexpedient or inadvisable or inappropriate for Paladin or the underwriter to proceed with the Open Offer; or

• any change in the circumstances of Paladin or any members of the Group which may, in the opinion of Gold Seal, adversely affect the prospects of Paladin.

Upon giving notice of termination, all obligations of Gold Seal under the Underwriting Agreement shall cease and terminate and neither party shall have any claim against the other in respect of any matter or thing arising out of or in connection with the Underwriting Agreement except for, inter alia, the payment by Paladin of any fees incidental to the Open Offer.

Gold Seal is an investment holding company and its ordinary course of business does not include any underwriting activities.

15

LETTER FROM THE BOARD

Conditions of the Open Offer

The Open Offer is conditional upon the obligations of Gold Seal under the Underwriting Agreement becoming unconditional and the Underwriting Agreement not being terminated.

REASONS FOR THE OPEN OFFER AND USE OF PROCEEDS

The principal activities of the Group are the re-development of a property project at Nos. 8, 10 and 12 Peak Road, technology investment and general trading.

The gross proceeds of the Open Offer will be approximately HK$33.3 million. The estimated amount of expenses relating to the Open Offer of approximately HK$3.0 million will be borne by Paladin. The net proceeds of approximately HK$30.3 million will be used to repay indebtedness owed by Paladin to Uon Margaret, a director of a number of of the Company’s major subsidiaries. As at 31 December, 2011, the Group recorded an amount owed to Uon Margaret, of approximately HK$189.5 million.

The Open Offer represents a first step in an endeavour to improve the Company’s financial structure and provide it with the resources to expand its business base. In this regard, consideration is being given to further fund raising by way of the issue of equity shares, as well as the sale of the Group’s office premises on the 45th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong, the proceeds from which are intended to be used to reduce the Group’s borrowings further. No agreement has been entered into with respect to further fund raising or the sale of this property and, in the event any such agreement is entered into, an appropriate announcement will be made and, if required under the Listing Rules, any fund raising or sale will be conditional upon the requisite approvals being obtained in compliance with the Listing Rules.

IMPLICATIONS UNDER THE LISTING RULES

The entering into of the Underwriting Agreement between the Company and the Gold Seal is a connected transaction under the Listing Rules. Under Rule 14A.31(3)(c) of the Listing Rules, provided that Rule 7.26A(2) of the Listing Rules has been complied with, the Underwriting Agreement will be exempted from the reporting, announcement and Independent Shareholders’ approval requirements. As the Company has made arrangements to dispose of Open Offer Shares not validly applied for by Qualifying Shareholders in excess of their assured allotments under the Open Offer, Rule 7.26A(1) of the Listing Rules has been complied with and the Underwriting Agreement is exempt from the reporting, announcement and independent Shareholders’ approval requirements. As the Open Offer will increase the issued share capital and the market capitalisation of the Company by less than 50%, the Open Offer is not required to be subject to Shareholders’ approval in accordance with Rule 7.24(5) of the Listing Rules.

FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS

Paladin has not conducted any fund raising exercise during the last twelve months, save for loans borrowed from third parties and, or, related parties.

16

LETTER FROM THE BOARD

GENERAL

If the Underwriting Agreement is terminated, or the conditions of the Open Offer are not fulfilled, the Open Offer will not proceed. Any dealings in the Ordinary Shares, from now up to the date on which all conditions to which the Open Offer is subject are fulfilled will accordingly bear the risk that the Open Offer may not become unconditional. Investors may wish to seek professional advice regarding dealings in the Shares during this period.

The directors of the Company are confident that the returns from its re-development of a property project at Nos. 8, 10 and 12 Peak Road will significantly improve the Group’s financial position and generate income for the Group. In view of the trading prospects of the Group and the current undervaluation of the Shares by the market, the directors of the Company consider the subscription price to be fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

Your attention is drawn to the information contained in appendices to this Open Offer offering circular.

Yours faithfully, For and on behalf of the Board Law Fong Chairman

17

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

SUMMARY OF THE FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for the past three years has been published in the annual reports referred to below:

• (i) the financial information of the Group for the year ended 30 June, 2011 is disclosed from pages 19 to 85 in the annual report of the Company for the year ended 30 June, 2011 published on 26 September, 2011;

• (ii) the financial information of the Group for the year ended 30 June, 2010 is disclosed from pages 20 to 85 in the annual report of the Company for the year ended 30 June, 2010 published on 25 October, 2010; and

• (iii) the financial information of the Group for the year ended 30 June, 2009 is disclosed from pages 20 to 81 in the annual report of the Company for the year ended 30 June, 2009 published on 23 October, 2009.

all of which are available on the website of the Stock Exchange at www.hkex.com.hk.

WORKING CAPITAL

After taking into account the internal financial resources available to the Group, including cash and bank balances as well as the available banking facilities, the directors of the Company are of the opinion that the Group has sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of this Open Offer offering circular.

INDEBTEDNESS

Borrowings

At the close of business on 29 February, 2012, being the latest practicable date for the purpose of ascertaining the indebtedness of the Group prior to the printing of this Open Offer offering circular, the Group had in aggregate outstanding borrowings of approximately HK$1,264.6 million of which approximately HK$946.8 million were guaranteed by the Company and secured by a charge on a property of the Group, which is located at 45th Floor of Office Tower of Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong and certain properties of the Group at Nos. 8, 10 and 12 Peak Road, Hong Kong (the “Peak Road Project”), and the remaining balance was unguaranteed and unsecured.

The borrowings of the Company comprised (i) secured bank borrowings of approximately HK$946.8 million; (ii) unsecured other loans of approximately HK$291.4 million owed to Mr. Oung Da Ming and Madam. Uon Margaret, directors of certain subsidiaries of the Company and (iii) bank overdrafts of approximately HK$26.4 million.

18

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Contingent Liabilities

As at 29 February, 2012, being the latest practicable date for the purpose of ascertaining indebtedness of the Group prior to the printing of this Open Offer offering circular, the Group is the defendant of the following legal cases, in which the Directors are of the opinion that the estimated contingent liabilities arising from the litigations cannot be reasonably ascertained.

• (a) On 17 May, 2006, Chinese Regency Limited (of which the beneficial owners are independent third parties) issued a writ of summons against Holyrood Limited (“Holyrood”), a subsidiary of the Company, claiming damages for breach of an agreement for the sale and purchase of Flat B on the 5th Floor of Block A1 and the car parking space No. 5 of the Peak Road Project. The pleading stage is completed and the litigation is still ongoing. As the amount of damages and claims are to be assessed, no such details are available. Chinese Regency Limited has filed a notice of intention to proceed on 3 March, 2012.

• (b) On 1 June, 2007, Gateway International Development Limited (“Gateway”) (of which the beneficial owners are independent third parties) issued a writ of summons against Holyrood for a total sum of amount not less than HK$5,048,000, claiming, amongst others, damages for breach of an agreement for the sale and purchase of Flat A on the 6th Floor of Block A2 and the car parking space No. 51 of the Peak Road Project, breach of the Deed of Mutual Covenant and nuisance on the development. The judgment was handed down on 1 March, 2012 against Holyrood. The Company was ordered to pay Gateway the sum of HK$4,967,000 plus interest. The judge has also made a costs order nisi that Holyrood shall pay the costs of Gateway on an indemnity basis, which is approximately HK$4,000,000. The Company has taken up an application on 14 March, 2012 to vary the costs order nisi and substantive hearing will take place on 19 June, 2012. The Company has filed a notice of appeal dated 28 March, 2012 against the judgment.

• (c) On 1 June, 2007, Sun Crown Trading Limited (“Sun Crown”) (of which the beneficial owners are independent third parties) issued a writ of summons against Holyrood for a total sum of amount not less than HK$5,154,000, claiming, amongst others, damages for breach of an agreement for the sale and purchase of Flat B on the 6th Floor of Block A2 and the car parking spaces Nos. 47 and 48 of the Peak Road Project, breach of the Deed of Mutual Covenant and nuisance on the development. The judgment was handed down on 1 March, 2012 against Holyrood. The Company was ordered to pay Sun Crown the sum of HK$4,953,000 plus interest. The judge has also made a costs order nisi that Holyrood shall pay the costs of Sun Crown on an indemnity basis, which is approximately HK$4,000,000. The Company has taken up an application on 14 March, 2012 to vary the costs order nisi and substantive hearing will take place on 19 June, 2012. The Company has filed a notice of appeal dated 28 March, 2012 against the judgment.

Mortgages and Charges

As at 29 February, 2012, certain assets of the Group including the properties held for sale, investment properties, leasehold properties and bank deposits of HK$50.2 million were pledged to certain banks to secure borrowing facilities granted to the Group.

19

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Preference Shares (liability component)

As at 29 February, 2012, the liability component of the Group’s outstanding Preference Shares amounted to HK$33.4 million.

Save as aforesaid and apart from intra-group liabilities and normal trade payables, the Group did not, at the close of business on 29 February, 2012, have any outstanding mortgages, charges, debentures or other loan capital, bank overdrafts, loans, debt securities or other similar indebtedness, liabilities under acceptances or acceptances credits, finance leases or hire purchase commitments, guarantees or other material contingent liabilities.

Subsequent changes of indebtedness

The Directors confirm that there has been no material change in the indebtedness and contingent liabilities of the Group since 29 February, 2012 up to the Latest Practicable Date.

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 30 June, 2011, the date to which the latest published audited consolidated financial statements of the Group were made up.

FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The principal activities of the Group are re-development of a property project at Nos. 8, 10 and 12 Peak Road (the “Peak Road Project”), property investment and indent trading.

Property Development

The Peak Road Project located at Nos. 8, 10 and 12 Peak Road, Hong Kong consists of 34 apartment units and a 3-storey private house and the gross floor area is approximately 119,000 square feet. 15 apartment units have been sold in previous years. No apartment was sold for the six months ended 31 December, 2011.

20

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Research and development

Sensors Integration Technology Limited, a wholly-owned subsidiary of Paladin, plans to conduct research and development of digital camera, camcorder, surveillance, video capturing and processing technology. The plan is at an early stage and has yet to generate revenue for Paladin as at the Latest Practicable Date.

During the past few years, the management of the Company adopted a strategy to focus on completion of the Peak Road Project. As a result, the Company did not generate significant income from its business activities during the past few years. Going forward, the management of the Company is confident that the returns from the Peak Road Project will significantly improve the Group’s financial position and generate income for the Group.

RISK FACTORS

Risk relating to the business performance of the Group

The principal business activities of the Group include the development and marketing of the Peak Road Project. During the year ended 30 June, 2010 and the six months ended 31 December, 2011 the Group did not sell any property. The management of the Company will take into account, amongst other factors, the prevailing market conditions and market demand for the Group’s properties in determining suitable marketing and business strategies in relation to the Peak Road Project. If the Company is unable to successfully determine and implement such business strategies, this may significantly affect the operational and financial performance of the Group.

Risk relating to the Group’s high technology investment

The Company plans to conduct research and development of digital camera, camcorder, surveillance video capturing and processing technology through Sensors Integration Technology Limited, a wholly-owned subsidiary of the Company. The plan is at an early stage and Sensors Integration Technology Limited has not contributed any revenue to the Group since inception and has incurred losses. The Company may not be able to successfully develop its business in the high technology sector and this may adversely affect the business operations and financial performance of the Group.

Risk relating to the financial condition of the Group

The Group had unaudited net current liabilities of approximately of HK$452.7 million and an unaudited net deficit of approximately HK$68.1 million as at 31 December, 2011. The total borrowings of the Group, including both current and non-current borrowings, as at 29 February, 2012 totalled approximately HK$1,264.6 million. Further details about the indebtedness of the Group are set out in the section headed “Indebtedness” in Appendix I of this Open Offer offering circular.

21

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The ability of the Group to repay the principal and interest on its borrowings depends substantially on its cash flows and results of operations of the Group, which are dependent not only on market conditions and customer demands, but also on the general economic and political conditions in Hong Kong and other factors, some of which are beyond the Group’s control. There is no assurance that the Group will have sufficient cash flow to service its borrowings or repay its indebtedness when it falls due. If the Group is unable to service and repay its borrowings or if the Group’s working capital and net deficit position continue to deteriorate, its business, financial condition and results of operations as well as the ability of the Group to obtain future borrowings may be materially and adversely affected.

Risk relating to the litigation of the Group

As disclosed in the paragraph headed “Litigation” in Appendix III (General Information), the Group is currently involved in several legal proceedings relating to, amongst other things, alleged breaches of sale and purchase agreements. The Group’s involvement in such proceedings may result in damage to its reputation, additional costs and a diversion of resources and management attention from the Group’s core business activities.

22

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE LIABILITIES OF THE GROUP

The following is the unaudited pro forma statement of adjusted consolidated net tangible liabilities of the Group which has been prepared to illustrate the effect of the Open Offer on the net tangible liabilities of the Group as if the Open Offer had been completed on 31 December, 2011. As it is prepared for illustrative purposes only, and because of its nature, it may not give a true picture of the financial position of the Group upon completion of the Open Offer.

The unaudited pro forma statement of adjusted consolidated net tangible liabilities of the Group is prepared based on the net tangible liabilities of the Group as at 31 December, 2011 as extracted from the published unaudited interim report of the Group for the six months ended 31 December, 2011 and is adjusted for the effect of the Open Offer.

			Unaudited pro
		Unaudited pro	forma adjusted
		forma adjusted	consolidated
Unaudited		consolidated	net tangible
consolidated		net tangible	liabilities
net tangible		liabilities	of the Group
liabilities of	Estimated	of the Group	as adjusted
the Group as at	net proceeds	as adjusted	for the
31 December,	from the	for the	Open Offer
2011	Open Offer	Open Offer	per Share
(Note 1)	(Note 2)		(Note 3)
HK$’000	HK$’000	HK$’000	HK$
(100,754)	30,300	(70,454)	(0.09)

Notes:

1. The unaudited consolidated net tangible liabilities of the Group as at 31 December, 2011 is based on the net liabilities of the Group amounting to HK$100,754,000 extracted from the published interim report of the Group for the six months ended 31 December, 2011.

2. The estimated net proceeds from the Open Offer are based on 214,860,596 Open Offer Shares of HK$0.01 each at HK$0.155 per Open Offer Share amounting to HK$33.3 million in aggregate, after deducting the estimated underwriting fees and other related expenses of approximately HK$3.0 million to be incurred by the Company.

3. Assuming no Ordinary Shares are allocated and issued pursuant to any exercise of the conversion right of the Preference Shares after the date of this Open Offer offering circular and on or before the Record Date, the number of shares used for the calculation of this amount is 752,012,088 which will be the total number of Shares expected to be in issue after the Open Offer, comprising the existing 537,151,492 Ordinary Shares in issue as at the Latest Practicable Date and 214,860,596 Open Offer Shares.

4. No adjustments have been made to reflect any trading results or other transactions of the Group entered into subsequent to 31 December, 2011.

23

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

ACCOUNTANT’S REPORT TO THE BOARD OF DIRECTORS ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report, prepared for the sole purpose of inclusion in this Open Offer offering circular, received from the independent reporting accountants, Deloitte Touche Tohmatsu, in respect of the unaudited pro forma financial information of the Group.

==> picture [120 x 55] intentionally omitted <==

ACCOUNTANTS’ REPORT ON THE UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE LIABILITIES

TO THE DIRECTORS OF PALADIN LIMITED

We report on the unaudited pro forma statement of adjusted consolidated net tangible liabilities of Paladin Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), which has been prepared by the directors of the Company for illustrative purposes only, to provide information about how the open offer of 214,860,596 ordinary shares of HK$0.01 each in the proportion of 2 open offer shares for every 5 ordinary shares held on the Record Date at a subscription price of HK$0.155 per open offer share might have affected the consolidated net tangible liabilities of the Group presented, for inclusion in Appendix II to the open offer offering circular of the Company dated 27 April, 2012 (the “Open Offer Offering Circular”). The basis of preparation of the unaudited pro forma statement of adjusted consolidated net tangible liabilities is set out in Appendix II to the Open Offer Offering Circular.

Respective responsibilities of directors of the Company and reporting accountants

It is the responsibility solely of the directors of the Company to prepare the unaudited pro forma statement of adjusted consolidated net tangible liabilities in accordance with paragraph 29 of Chapter 4 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants.

It is our responsibility to form an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the unaudited pro forma statement of adjusted consolidated net tangible liabilities and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited pro forma statement of adjusted consolidated net tangible liabilities beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

24

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Basis of opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants. Our work consisted primarily of comparing the unadjusted financial information with source documents, considering the evidence supporting the adjustments and discussing the unaudited pro forma statement of adjusted consolidated net tangible liabilities with the directors of the Company. This engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the unaudited pro forma statement of adjusted consolidated net tangible liabilities has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the unaudited pro forma statement of adjusted consolidated net tangible liabilities as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

The unaudited pro forma statement of adjusted consolidated net tangible liabilities is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Group as at 31 December, 2011 or any future date.

Opinion

In our opinion:

• (a) the unaudited pro forma statement of adjusted consolidated net tangible liabilities has been properly compiled by the directors of the Company on the basis stated;

• (b) such basis is consistent with the accounting policies of the Group; and

• (c) the adjustments are appropriate for the purposes of the unaudited pro forma statement of adjusted consolidated net tangible liabilities as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

Deloitte Touche Tohmatsu

Certified Public Accountants Hong Kong 27 April, 2012

25

GENERAL INFORMATION

APPENDIX III

RESPONSIBILITY STATEMENT

This Open Offer offering circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this Open Offer offering 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 in this Open Offer offering circular misleading.

SHARE CAPITAL

Ordinary Shares

The authorised and issued share capital of the Company as at the Latest Practicable Date was and upon completion of the Open Offer will be as follows:

Authorised 50,000,000,000 Ordinary Shares of HK$0.01 each Issued and Fully Paid 537,151,492 Ordinary Shares as at the Latest Practicable Date of HK$0.01 each 214,860,596 Open Offer Shares of HK$0.01 each 752,012,088 Ordinary Shares upon completion of Open Offer of HK$0.01 each	HK$ 500,000,000
	5,371,515 2,148,606
	7,520,121

All Open Offer Shares to be issued will rank pari passu in all respects with each other and with all the Ordinary Shares in issue as at the date of allotment and issue of the Open Offer Shares, including as to dividends, voting rights and capital. Subject to the grant of listing of and permission to deal in the Open Offer Shares by the Listing Committee, the Open Offer Shares to be issued will be listed on the Stock Exchange.

No part of the share capital or any other securities of the Company is listed or dealt in on any securities exchange other than the Stock Exchange and no application is being made or currently proposed or sought for the Shares, the Open Offer Shares or any other securities of the Company to be listed or dealt in on any other securities exchange.

As at the Latest Practicable Date, there was no arrangement under which future dividends are waived or agreed to be waived.

26

GENERAL INFORMATION

APPENDIX III

Preference Shares

HK$

Authorised

1,270,000,000 Preference Shares of HK$0.01 each 12,700,000

Issued and Fully Paid

Issued and Fully Paid
255,255,930 Preference Shares as at the Latest Practicable Date
of HK$0.01 each	2,552,559

No Preference Shares will be issued by the Open Offer

As at the Latest Practicable Date, there were 255,255,930 Preference Shares outstanding convertible into 255,255,930 Ordinary Shares.

As at the Latest Practicable Date, save for the Preference Shares, the Company had no outstanding derivatives, options, warrants or conversion rights or similar rights or securities in issue which are convertible or exchangeable into Shares:

As at the Latest Practicable Date, save for the Preference Shares, no share or loan capital of the Company or any members of the Group has been put under option or agreed conditionally or unconditionally to be put under option and no warrant or conversion right affecting the Shares has been issued or granted or agreed conditionally, or unconditionally to be issued or granted.

DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the following directors of the Company were interested, or were deemed to be interested in the following long and short positions in the Shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors adopted by the Company to be notified to the Company and the Stock Exchange.

27

GENERAL INFORMATION

APPENDIX III

Ordinary shares of HK$0.01 each of the Company (long position):

Name of director Capacity Chen Te Kuang Mike Beneficial owner Held by a controlled corporation_(Note)_ Oung Shih Hua, James Beneficial owner	Number of issued ordinary shares held 5,000,000 21,035,000 26,035,000 5,000,000	Percentage of the issued share capital of the Company 0.93% 3.92%
		4.85% 0.93%

Convertible redeemable preference shares of HK$0.01 each of the Company (long position):

		Number of	Percentage of
		issued convertible	issued convertible
		redeemable	redeemable
		preference	preference
Name of director	Capacity	shares held	shares held
Chen Te Kuang Mike	Beneficial owner	2,500,000	0.98%
	Held by a controlled
	corporation_(Note)_	9,099,014	3.56%
		11,599,014	4.54%
Oung Shih Hua, James	Beneficial owner	2,500,000	0.98%

Note: These shares are held by Goldenfield Equities Limited, a company in which Mr. Chen Te Kuang Mike has beneficial interest.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors were interested, or were deemed to be interested in the long and short positions in the Shares, underlying shares and debentures of the Company or any associated corporation under the provisions of Divisions 2 and 3 of Part XV of the SFO.

28

GENERAL INFORMATION

APPENDIX III

SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as the directors of the Company were aware, the following persons (other than a director or chief executive of the Company) who had an interest or short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

Long position

			Percentage of
		Number of	the issued
		issued ordinary	share capital
Name of shareholder	Capacity	shares held	of the Company
Five Star Investments Limited	Beneficial owner	267,815,017	49.86%
		Number of	Percentage of
		issued convertible	issued convertible
		redeemable	redeemable
		preference	preference
Name of shareholder	Capacity	shares held	shares held
Five Star Investments Limited	Beneficial owner	133,907,508	52.46%
Oung Da Ming	Beneficial owner	50,000,000	19.59%

Note: Five Star Investments Limited is owned as to 67% by Oung Chin Liang Fung, grandmother of Oung Shih Hua, James, and 33% by Lilian Oung, mother of Chen Te Kuang Mike.

Save as disclosed above, the Directors were not aware of any other persons (other than a director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO and were interested in 10% or more of the nominal value of any class of the share capital of the Company.

DIRECTOR’S SERVICE CONTRACTS

As at the Latest Practicable Date, no director of the Company had any existing or proposed service contract with the Company or any member of the Group which is not determinable within one year without payment of compensation other than statutory compensation.

29

GENERAL INFORMATION

APPENDIX III

MATERIAL CONTRACTS

The following contract has been entered into by the Group (not being contracts entered into in the ordinary course of business) within the two years preceding the date of this Open Offer offering circular and is or may be material:

• The Underwriting Agreement

LITIGATION

As at the Latest Practicable Date, save for the matters set out below, no litigation, arbitration or claim of material importance is known to the directors of the Company to be pending or threatened against the Group.

• (a) On 17 May, 2006, Chinese Regency Limited (of which the beneficial owners are independent third parties) issued a writ of summons against Holyrood Limited (“Holyrood”), a subsidiary of the Company, claiming damages for breach of an agreement for sale and purchase of Flat B on the 5th Floor of Block A1 and the car parking space No. 5 of the Peak Road Project. The pleading stage is completed and the litigation is still ongoing. As the amount of damages and claims are to be assessed, no such details are available. The Plaintiff has filed a Notice of Intention to Proceed on 3 March, 2012.

• (b) On 1 June, 2007, Gateway International Development Limited (“Gateway”) (of which the beneficial owners are independent third parties) issued a writ of summons against Holyrood for a total sum of not less than HK$5,048,000, claiming, among others, damages for breach of an agreement for sale and purchase of Flat A on the 6th Floor of Block A2 and the car parking space No. 51 of the Peak Road Project, breach of the Deed of Mutual Covenant and nuisance on the development. The judgment was handed down on 1 March, 2012 against Holyrood. The Company was ordered to pay Gateway the sum of HK$4,967,000 plus interest. The judge has also made a costs order nisi that Holyrood shall pay the costs of Gateway on an indemnity basis, which are approximately HK$4,000,000. The Company has taken up an application on 14 March, 2012 to vary the costs order nisi and substantive hearing will take place on 19 June, 2012. The Company has filed a notice of appeal dated 28 March, 2012 against the judgment.

• (c) On 1 June, 2007, Sun Crown Trading Limited (“Sun Crown”) (of which the beneficial owners are independent third parties) issued a writ of summons against Holyrood for a total sum of not less than HK$5,154,000, claiming, among others, damages for breach of an agreement for sale and purchase of Flat B on the 6th Floor of Block A2 and the car parking spaces Nos. 47 and 48 of the Peak Road Project, breach of the Deed of Mutual Covenant and nuisance on the development. The judgment was handed down on 1 March, 2012 against Holyrood. The Company was ordered to pay Sun Crown the sum of HK$4,953,000 plus interest. The judge has also made a costs order nisi that Holyrood shall pay the costs of Sun Crown on an indemnity basis, which are approximately HK$4,000,000. The Company has taken up an application on 14 March, 2012 to vary the cost order nisi and the substantive hearing will take place on 19 June, 2012. The Company has filed a notice of appeal dated 28 March, 2012 against the judgment.

30

GENERAL INFORMATION

APPENDIX III

COMPETING INTERESTS

So far as the directors of the Company were aware, as at the Latest Practicable Date, none of the directors of the Company or their respective associates had any interest in any business which competed or was likely to compete with the business of the Group.

INTERESTS IN ASSETS/CONTRACTS OF THE GROUP

So far as the directors of the Company were aware, as at the Latest Practicable Date, none of the directors of the Company had any interest, either direct or indirect, in any assets which had been since 30 June 2011 (being the date to which the latest published audited accounts of the Group were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

So far as the directors of the Company were aware, none of the directors of the Company was materially interested in any contract or arrangement subsisting at the Latest Practicable Date and which was significant in relation to the business of the Group.

EXPERT AND CONSENT

The following is the qualification of the expert who had given opinion contained in this Open Offer offering circular:

Name	Qualification
Deloitte Touche Tohmatsu	Certified Public Accountants

Deloitte Touche Tohmatsu has given and has not withdrawn its written consents to the issue of this Open Offer offering circular with the inclusion herein of its letter or references to its name in the form and context in which they appear.

As at the Latest Practicable Date Deloitte Touche Tohmatsu did 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.

As at the Latest Practicable Date, Deloitte Touche Tohmatsu did not have any direct or indirect interests in any assets which have been, since 30 June, 2011 (being the date to which the latest published audited accounts of the Group were made up), acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group.

EXPENSES

The expenses in connection with the Open Offer, including legal and accountants’ charges, underwriting fee, registration, translation, printing and other related expenses are estimated to be approximately HK$3 million and are payable by the Company.

31

GENERAL INFORMATION

APPENDIX III

PARTIES INVOLVED IN THE OPEN OFFER AND CORPORATE INFORMATION

Registered office	Canon’s Court
	22 Victoria Street
	Hamilton HM12
	Bermuda
Principal place of business	45th Floor, Office Tower
in Hong Kong	Convention Plaza
	1 Harbour Road
	Wanchai
	Hong Kong
Authorised representative	Mr. Chan Chi Ho
	Mr. Law Fong
Company Secretary	Mr. Chan Chi Ho (FCCA, FCPA)
	Flat 4, 32/F, Block C,
	Pearl City Mansion,
	22 Paterson Street,
	Causeway Bay, Hong Kong
Auditors and reporting accountants	Deloitte Touche Tohmatsu
	Certified Public Accountants
	35th Floor, One Pacific Place
	88 Queensway
	Hong Kong
Underwriter	Gold Seal
	PO Box 957, Offshore Incorporations Centre
	Road Town, Tortola
	British Virgin Islands
Legal Advisers	On Hong Kong Law:
	David Norman & Co.
	22B Man On Commercial Building
	12-13 Jubilee Street
	Central, Hong Kong
	On Bermuda Law:
	Appleby
	2206-19 Jardine House
	Connaught Place
	Central, Hong Kong

32

GENERAL INFORMATION

APPENDIX III

Principal Bankers Wing Lung Bank Limited 45 Des Voeux Road Central Hong Kong CITIC Bank International Limited 232 Des Voeux Road Central Hong Kong Hang Seng Bank Limited 83 Des Voeux Road Central Hong Kong Share registrar and transfer office Appleby Management (Bermuda) Limited of the Company in Bermuda Argyle House 41A Cedar Avenue Hamilton HM12 Bermuda Share registrar and transfer office of Computershare Hong Kong Investor Services Limited the Company in Hong Kong Shops 1712-16, 17th Floor, Hopewell Centre 183 Queen’s Road East Hong Kong

PARTICULARS OF THE DIRECTORS AND SENIOR MANAGEMENT

Name and Address of Directors and Senior Management

Name Address Executive Directors Law Fong (Chairman) Flat D, 18/F, Block 35, Broadway Mei Foo Sun Chuen, Kowloon, Hong Kong Mike Chen Te Kuang Rm 211, 3/F, 216 Hong Qi Street Dong Bu Ban Jong Qu, Nan Kai Qu Tianjin, China Non-executive director James Oung Shih Hua 12/F, No. 661 Bannan Road Zhonghe City, Taipei 235 Taiwan

33

GENERAL INFORMATION

APPENDIX III

Independent non-executive director

Zhu Pei Qing Rm 301, 6 Unit, No. 2 House Xi Yi Jia Yuan, Xi Shi Jie Chong Men Wat, Beijing, China Lu Ti Fen No. 1 Lane 11, Yishou 2nd Street Tao Yuan City 330, Taiwan Kwok Wai Chi Rm 3518, Man Yue House Tsz Man Estate, Tsz Wan Shan Kowloon, Hong Kong

Biographical Details of Directors

Executive Directors

Mr. Law Fong (Chairman), aged 86, joined the Group in 1994. He has over 26 years of experience in the textile industry and 11 years of experience in property development. He retired from his textile and property development businesses in 1985.

Mr. Chen Te Kuang, Mike (Chief Executive Officer), aged 33, joined the Group in 2004. He has more than 9 years’ management and production experience in the electronics industry. Mr. Chen is the cousin of Mr. Oung Shih Hua, James, the non-executive director of Paladin.

Non-executive director

Mr. Oung Shih Hua, James , aged 36, joined the Group in 1995. He holds a bachelor’s degree in Science from New York University. He is engaging in textile trading and the electronics business. He is currently a president of a private electronic company. Mr. Oung is the cousin of Mr. Chen Te Kuang, Mike, an executive director of Paladin.

Independent non-executive director

Mr. Zhu Pei Qing , aged 74, joined the Group in 2000. He previously worked for the Ministry of Foreign Affairs of the People’s Republic of China, and was the ambassador of Lebanon for the People’s Republic of China before his retirement.

Ms. Lu Ti Fen , aged 50, joined the Group in 2003. She graduated from Mining Chuan University in Taiwan with a bachelor’s degree in management and has over 21 years of experience in manufacturing, accounting and financial management.

Mr. Kwok Wai Chi , aged 34, joined the Group in 2004. He holds a bachelor’s degree in Business Administration from the Hong Kong University of Science and Technology and is an associate member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. He is currently a principal of a wealth management and financial planning company.

None of the directors of the Company had directorships in other listed public companies in the last three years.

34

GENERAL INFORMATION

APPENDIX III

MISCELLANEOUS

In the event of inconsistency, the English text of the Open Offer Documents shall prevail over the Chinese text.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the principal place of business of the Company in Hong Kong at 45th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong up to and including Monday, 21 May, 2012:

• (a) the Open Offer Documents;

• (b) the Bye-Laws of the Company;

• (c) annual reports of the Group for the three years ended 30 June, 2009, 2010 and 2011;

• (d) interim report of the Group for the six months ended 31 December, 2011;

• (e) the material contract referred to under the section headed “Material Contracts” in this appendix;

• (f) the letter from Deloitte Touche Tohmatsu on the unaudited pro forma financial information of the Group, the text of which is set out in Appendix II to this Open Offer offering circular; and

• (g) the letter of consent referred to in the section headed “Expert and Consent” in this appendix.

35