Galaxy Entertainment Group Limited — Proxy Solicitation & Information Statement 2007

May 18, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in New World Development Company Limited , you should at once hand this circular together with the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

This circular is not and does not constitute an offer of, nor is it intended to invite offers for, shares in or other securities of the Company.

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: 0017)

CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF SHARES IN TAIFOOK SECURITIES GROUP LIMITED AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

CIMB-GK Securities (HK) Limited

A letter from the Board is set out on pages 5 to 19 of this circular. A letter from the Independent Board Committee is set out on page 20 of this circular. A letter from CIMB-GK containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 21 to 28 of this circular.

A notice convening the EGM to be held at Meeting Room 301B (New Wing), Hong Kong Convention & Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Tuesday, 5 June 2007 at 12: 30 p.m. is set out on pages 42 and 43 of this circular. If you are not able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon and deposit it with the registered office of the Company at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

18 May 2007

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Letter from CIMB-GK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Appendix — General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42

– i –

DEFINITIONS

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

‘‘Acquisition’’	the acquisition of the Sale Shares by the Purchaser subject to
	the terms and upon the conditions of the Share Purchase
	Agreement
‘‘acting in concert’’	has the meaning ascribed thereto in the Takeovers Code
‘‘Aggregate Purchase Price’’	the aggregate purchase price for the Sale Shares, being
	HK$600,177,834.09
‘‘Announcement’’	the announcement dated 26 April 2007 jointly issued by the
	Company, NWS and Taifook in relation to, among other
	matters, the Share Purchase Agreement and the Offer
‘‘associates’’	has the meaning ascribed thereto in the Listing Rules
‘‘Board’’	the board of Directors
‘‘Business Day’’	a day (excluding Saturday and any day on which a tropical
	cyclone warning no. 8 or above is hoisted or remains hoisted
	between 9: 00 a.m. and 12: 00 noon and is not lowered at or
	before 12: 00 noon or on which a‘‘black’’rainstorm warning is
	hoisted or remains in effect between 9: 00 a.m. and 12: 00 noon
	and is not discontinued at or before 12: 00 noon) on which
	licensed banks in Hong Kong are generally open for business
‘‘CIMB-GK’’	CIMB-GK Securities (HK) Limited, the independent financial
	adviser appointed to advise the Independent Board Committee
	and the Independent Shareholders
‘‘Company’’	New World Development Company Limited, a company
	incorporated in Hong Kong with limited liability, the issued
	shares of which are listed on the Main Board of the Stock
	Exchange
‘‘Completion’’	completion of the Acquisition in accordance with the terms of
	the Share Purchase Agreement
‘‘Directors’’	the directors of the Company
‘‘EGM’’	the extraordinary general meeting of the Company to be
	convened and held at Meeting Room 301B (New Wing), Hong
	Kong Convention & Exhibition Centre, 1 Expo Drive,
	Wanchai, Hong Kong on Tuesday, 5 June 2007 at 12: 30 p.m.
	to approve, among other matters (if any), the transactions
	contemplated under the Share Purchase Agreement

– 1 –

DEFINITIONS

‘‘Group’’	the Company and its subsidiaries as at the Latest Practicable
	Date (including members of the NWS Group)
‘‘Hong Kong’’	the Hong Kong Special Administration Region of the People’s
	Republic of China
‘‘Independent Board Committee’’	the independent board committee of the Company, comprising
	Mr. Yeung Ping Leung, Howard, Dr. Cha Mou Sing, Payson
	(alternate director to Dr. Cha Mou Sing, Payson: Mr. Cha Mou
	Zing, Victor) and Mr. Lee Luen Wai, John, established to
	advise the Independent Shareholders in respect of the
	Acquisition
‘‘Independent Shareholders’’	shareholders of the Company other than the Vendors (and,
	where applicable, their ultimate beneficial owners), their
	respective associates and parties acting in concert with any
	of them
‘‘Last Trading Day’’	20 April 2007, being the last complete trading day prior to the
	suspension of the trading in Taifook Shares on 23 April 2007
‘‘Latest Practicable Date’’	14 May 2007, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock
	Exchange
‘‘Long Stop Date’’	5: 00 p.m. on 31 August 2007 or such other date as the Vendors
	and the Purchaser shall agree in writing
‘‘NWS’’	NWS Holdings Limited, a company incorporated in Bermuda
	with limited liability, the issued shares of which are listed on
	the Main Board of the Stock Exchange, and a non-wholly-
	owned subsidiary of the Company
‘‘NWS Group’’	NWS and its subsidiaries as at the Latest Practicable Date
‘‘NWS SGM’’	the special general meeting of NWS to be convened to approve,
	among other matters (if any), the transactions contemplated
	under the Share Purchase Agreement
‘‘Offer’’	collectively, the Share Offer and the Option Offer

– 2 –

DEFINITIONS

‘‘Option Offer’’	the mandatory unconditional cash offer for all outstanding
	Taifook Options not already owned or agreed to be acquired by
	the Purchaser or parties acting in concert with it at HK$1.49
	per Taifook Option (in respect of the Taifook Options having
	an exercise price of HK$0.94 per Taifook Share) and HK$1.23
	per Taifook Option (in respect of the Taifook Options having
	an exercise price of HK$1.20 per Taifook Share) to be made by
	Standard Chartered on behalf of the Purchaser in accordance
	with the Takeovers Code
‘‘PRC’’	the People’s Republic of China, which, for the purposes of this
	circular, excludes Hong Kong, the Macau Special
	Administrative Region of the People’s Republic of China and
	Taiwan
‘‘Purchase Price’’	the price of HK$2.43 per Sale Share payable by the Purchaser
	to the Vendors upon Completion
‘‘Purchaser’’	NWS Financial Management Services Limited, a company
	incorporated in the British Virgin Islands with limited liability
	and a subsidiary of the Company
‘‘Sale Shares’’	246,986,763 Taifook Shares, representing approximately
	41.0% of the issued share capital of Taifook as at the date of
	the Share Purchase Agreement agreed to be acquired by the
	Purchaser pursuant to the Share Purchase Agreement
‘‘SFC’’	the Securities and Futures Commission of Hong Kong
‘‘SFO’’	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
‘‘Share Offer’’	the mandatory unconditional cash offer for all the issued
	Taifook Shares not already owned or agreed to be acquired by
	the Purchaser or parties acting in concert with it at HK$2.43
	per Taifook Share to be made by Standard Chartered on behalf
	of the Purchaser in accordance with the Takeovers Code
‘‘Share Purchase Agreement’’	the conditional share purchase agreement dated 26 April 2007
	and entered into between the Vendors and the Purchaser in
	relation to the sale by the Vendors and the purchase by the
	Purchaser of the Sale Shares
‘‘Shareholder(s)’’	holder(s) of share(s) of HK$1.00 each in the issued share
	capital of the Company

– 3 –

DEFINITIONS

‘‘Standard Chartered’’ Standard Chartered Bank (Hong Kong) Limited, the financial adviser to NWS (being the holding company of the Purchaser). Standard Chartered is registered as a registered institution with the SFC to conduct type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities under the SFO and is a licensed bank under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘substantial shareholder’’ has the meaning ascribed to it in the Listing Rules ‘‘Taifook’’ Taifook Securities Group Limited, a company incorporated in Bermuda with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange ‘‘Taifook Group’’ Taifook and its subsidiaries from time to time ‘‘Taifook Option(s)’’ the option(s) issued by Taifook entitling the Taifook Optionholder(s) to subscribe for Taifook Shares at a subscription price of HK$0.94 or HK$1.20 per Taifook Share ‘‘Taifook Optionholder(s)’’ holder(s) of Taifook Option(s) ‘‘Taifook Share(s)’’ share(s) of HK$0.10 each in the share capital of Taifook ‘‘Taifook Shareholder(s)’’ holder(s) of Taifook Share(s) ‘‘Takeovers Code’’ The Code on Takeovers and Mergers of Hong Kong ‘‘Vendors’’ collectively, Chow Tai Fook Nominee Limited, Chow Tai Fook Enterprises Limited, Lo Lin Shing, Simon, Wellington Equities Inc., Grand Partners Group Limited and William Junior Guilherme Doo ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘US$’’ United States dollars, the lawful currency of the United States of America ‘‘%’’ per cent.

– 4 –

LETTER FROM THE BOARD

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(incorporated in Hong Kong with limited liability)

(stock code: 0017)

Executive directors:

Dato’ Dr. Cheng Yu Tung (Chairman)

Dr. Cheng Kar Shun, Henry (Managing Director) Dr. Sin Wai Kin, David

Mr. Liang Chong Hou, David

Registered office: 30th Floor New World Tower 18 Queen’s Road Central Hong Kong

Mr. Leung Chi Kin, Stewart

Mr. Cheng Chi Kong, Adrian

Non-executive directors:

Mr. Cheng Yue Pui

Mr. Cheng Kar Shing, Peter

Mr. Chow Kwai Cheung

Mr. Ho Hau Hay, Hamilton

Mr. Liang Cheung Biu, Thomas

Independent non-executive directors:

Lord Sandberg, Michael

Mr. Yeung Ping Leung, Howard

Dr. Cha Mou Sing, Payson, JP

(alternate director to Dr. Cha Mou Sing, Payson:

• Mr. Cha Mou Zing, Victor)

Mr. Lee Luen Wai, John, JP

18 May 2007

To the Shareholders and, for information purposes only,

the holders of the outstanding share options of the Company

Dear Sir or Madam

CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF SHARES IN TAIFOOK SECURITIES GROUP LIMITED

INTRODUCTION

On 26 April 2007, the Company, NWS and Taifook jointly announced that the Vendors and the Purchaser, being an indirect non-wholly-owned subsidiary of the Company, entered into the Share Purchase Agreement on 26 April 2007.

– 5 –

LETTER FROM THE BOARD

Pursuant to the Share Purchase Agreement, the Vendors have agreed to sell, and the Purchaser has agreed to purchase, the 246,986,763 Sale Shares, which represent approximately 41.0% of the issued share capital of Taifook as at the date of the Share Purchase Agreement, for a Purchase Price of HK$2.43 per Sale Share (the Aggregate Purchase Price being HK$600,177,834.09) subject to the terms and upon the conditions of the Share Purchase Agreement.

In view of the relationships between the Vendors and the Purchaser as more particularly set out in the paragraph headed ‘‘Relationships between the parties’’ below, the Acquisition constitutes a connected transaction for the Company pursuant to Rule 14A.13(1)(a) of the Listing Rules and is subject to the approval of Independent Shareholders at the EGM.

The purpose of this circular is to give you further information regarding, among others, the Share Purchase Agreement, the advice of the Independent Board Committee to the Independent Shareholders and the advice from CIMB-GK to the Independent Board Committee and the Independent Shareholders and to give you notice of the EGM.

THE SHARE PURCHASE AGREEMENT

Date: 26 April 2007

• Parties: (1) The Vendors, each selling as beneficial owner of the Sale Shares held by him/it:

• (a) Chow Tai Fook Nominee Limited (‘‘CTF Nominee’’), a company incorporated in Hong Kong with limited liability and wholly-owned by Dato’ Dr. Cheng Yu Tung;

• (b) Chow Tai Fook Enterprises Limited (‘‘CTF Enterprises’’), a company incorporated in Hong Kong with limited liability and a substantial shareholder of the Company. CTF Enterprises is ultimately owned as to 51% by Cheng Yu Tung Family (Holdings) Limited which is controlled by the family members of Dato’ Dr. Cheng Yu Tung;

• (c) Lo Lin Shing, Simon (‘‘Mr. Lo’’), one of the deputy chairmen and an executive director of Taifook;

• (d) Wellington Equities Inc. (‘‘Wellington’’), a company incorporated in the Republic of Panama with limited liability and wholly-owned by Mr. Lo;

• (e) Grand Partners Group Limited (‘‘GPGL’’), a company incorporated in the British Virgin Islands and wholly-owned by Doo Wai Hoi, William (‘‘Mr. Doo’’), who is the deputy chairman and an executive director of NWS and one of the deputy chairmen and an executive director of Taifook, and the father of Mr. Doo Jr (as defined below); and

• (f) William Junior Guilherme Doo (‘‘Mr. Doo Jr’’), an executive director of NWS and the son of Mr. Doo.

– 6 –

LETTER FROM THE BOARD

• (2) NWS Financial Management Services Limited, a company incorporated in the British Virgin Islands with limited liability, a wholly-owned subsidiary of NWS and also a non-wholly-owned subsidiary of the Company, as Purchaser.

Interests to be acquired:

246,986,763 Sale Shares, representing approximately 41.0% of the issued share capital of Taifook as at the date of the Share Purchase Agreement, which are held by the Vendors as follows:

Vendors CTF Nominee CTF Enterprises Mr. Lo Wellington GPGL Mr. Doo Jr Total:	Number of Sale Shares and approximate percentage of issued share capital of Taifook as at the date of the Share Purchase Agreement 107,140,540 (17.8%) 30,977,916 (5.1%) 9,500,000 (1.6%) 70,616,222 (11.7%) 4,346,000 (0.7%) 24,406,085 (4.1%) 246,986,763 (41.0%)	Total purchase price payable to the Vendor HK$260,351,512.20 HK$75,276,335.88 HK$23,085,000.00 HK$171,597,419.46 HK$10,560,780.00 HK$59,306,786.55
		HK$600,177,834.09

Upon Completion, none of the Vendors will hold any Taifook Shares.

The original purchase cost per Sale Share to each of the Vendors are set out below:

	Average original
	purchase cost
Vendors	per Sale Share
CTF Nominee	(Note)
CTF Enterprises	(Note)
Mr. Lo	HK$0.95
Wellington	(Note)
GPGL	HK$1.06
Mr. Doo Jr	HK$1.83

Note: Such Vendors were original shareholders of Taifook at the time of its listing in 1996 and the Sale Shares held by such Vendors were not acquired after the listing where the purchase price per Sale Share may be ascertained.

Status of the Sale Shares to be acquired

The Sale Shares are to be purchased together with all rights attaching thereto as at Completion, excluding the right to the final dividend of HK$0.07 per Sale Share for the year ended 31 December 2006 payable to holders of Taifook Shares whose names appear on the register of members of Taifook on

– 7 –

LETTER FROM THE BOARD

5 June 2007, which will be retained by the holders of the Sale Shares. Such final dividend, if approved by the shareholders of Taifook at its forthcoming annual general meeting, is expected to be paid to such eligible shareholders on or around 12 June 2007.

Consideration

Purchase Price of HK$2.43 per Sale Share, the Aggregate Purchase Price being HK$600,177,834.09, payable by the Purchaser to the Vendors at Completion.

The Purchase Price was determined following arm’s length negotiation between the Vendors and the Purchaser with reference to the prevailing market price of the Taifook Shares.

The Purchase Price represents:

• (a) a premium of approximately 13.6% over the closing price of HK$2.14 per Taifook Share as quoted on the Main Board of the Stock Exchange on the Last Trading Day;

• (b) a premium of approximately 20.3% over the average closing price of HK$2.02 per Taifook Share as quoted on the Main Board of the Stock Exchange for the last 10 consecutive complete trading days up to and including the Last Trading Day;

• (c) a premium of approximately 24.0% over the audited consolidated net asset value per Taifook Share of approximately HK$1.96 based on Taifook’s audited consolidated financial statements for the year ended 31 December 2006 and 603,139,699 Taifook Shares in issue as at the date of the Announcement;

• (d) a discount of approximately 10.3% to the closing price of HK$2.71 per Taifook Share as quoted on the Main Board of the Stock Exchange on the Latest Practicable Date; and

• (e) a premium of approximately 24.0% over the audited consolidated net asset value per Taifook Share of approximately HK$1.96 based on Taifook’s audited consolidated financial statements for the year ended 31 December 2006 and 605,439,699 Taifook Shares in issue as at the Latest Practicable Date.

The Aggregate Purchase Price will be satisfied by the Purchaser by bank borrowings of the NWS Group.

– 8 –

LETTER FROM THE BOARD

Conditions of the Share Purchase Agreement

Completion of the Share Purchase Agreement is conditional upon the following conditions being fulfilled on or before the Long Stop Date:

• (i) the Acquisition and other transactions as contemplated under the Share Purchase Agreement having been approved by the shareholders of NWS (who are not required to abstain their voting rights in such respect under the Listing Rules or the Takeovers Code or otherwise) at the NWS SGM in accordance with the Listing Rules;

• (ii) the Acquisition and other transactions as contemplated under the Share Purchase Agreement having been approved by the Shareholders (who are not required to abstain their voting rights in such respect under the Listing Rules or the Takeovers Code or otherwise) at the EGM in accordance with the Listing Rules;

• (iii) in respect of any permits or licences granted by the SFC or other relevant governmental or regulatory authorities to any members of Taifook Group in connection with the business operations of such member, the approval from the SFC or such or other relevant governmental or regulatory authorities required for the change of shareholding of Taifook arising from the Acquisition as contemplated under the Share Purchase Agreement having been obtained, and if any such approval is subject to conditions, the terms of such conditions are reasonably acceptable to the Purchaser; and

• (iv) all authorisations, consents, waivers, approvals or licences (which are required on the part of any of the Vendors, the Purchaser or any member of Taifook Group) from any other person required pursuant to any applicable law, rules or regulations, or pursuant to any contract binding on any of the Vendors, the Purchaser or any member of Taifook Group or to which any member of Taifook Group or its assets are subject or bound, for or in connection with the Acquisition as contemplated under the Share Purchase Agreement having been obtained and remaining in full force and effect at Completion, and if any such authorisations, consents, waivers, approvals or licences is subject to conditions, the terms of such conditions are reasonably acceptable to the Purchaser.

The Purchaser may at its absolute discretion at any time waive in writing, as far as it relates to the Vendors or any member of Taifook Group, any of items (iii) and (iv).

If the conditions contained in items (i) to (iv) above shall not have been fulfilled or waived (as the case may be) on or before the Long Stop Date, the obligations of the parties to the Share Purchase Agreement to proceed with and complete the Acquisition (including, in particular, the payment obligations of the Purchaser) shall cease and terminate and no party to the Share Purchase Agreement shall have any claim against or liability to the other parties with respect to any matter referred to in the Share Purchase Agreement save for any antecedent breaches of the Share Purchase Agreement.

– 9 –

LETTER FROM THE BOARD

Completion

Completion will take place on the third Business Day immediately following the day on which the conditions referred to above are fulfilled in full or such other date as the parties to the Share Purchase Agreement may agree in writing. Based on the estimation of the parties to the Share Purchase Agreement, the Completion will take place after 5 June 2007, which is the record date for the final dividend of Taifook for the year ended 31 December 2006.

Upon Completion, Taifook and other members of the Taifook Group will become subsidiaries of both the Company and NWS.

Listing Rules implications

By virtue of the relationships between the parties as more particularly described under the paragraphs headed ‘‘Relationships between the parties’’ below, the Acquisition constitutes a connected transaction for the Company.

The EGM will be convened for the purposes of considering, and if thought fit, approving, among other matters (if any), the Share Purchase Agreement and the transactions contemplated thereunder. The Vendors (and, where applicable, their ultimate beneficial owners) and their respective associates and parties acting in concert with any of them are required to abstain from voting at the EGM in accordance with Rule 14A.18 of the Listing Rules.

The Independent Board Committee has been established to advise the Independent Shareholders on, among other things, the fairness and reasonableness of the Share Purchase Agreement and the Acquisition pursuant to the terms thereunder. CIMB-GK has been appointed by the Company as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the fairness and reasonableness of the Acquisition under the terms of the Share Purchase Agreement.

REASONS FOR THE ACQUISITION

The Directors consider that Taifook is a well-established brokerage firm in Hong Kong with an enviable reputation for providing fully integrated financial services. It has been very active in the equity underwriting business and has enjoyed strong financial performance during the past years. With a strong financial position, NWS Group is currently looking for potential investments that can enhance its longterm profitability with a balanced diversification strategy. In view of Taifook’s satisfactory growth history, the acquisition of interests in Taifook aligns with NWS Group’s investment strategy. It is expected that NWS Group’s sustainable growth in the financial services business will be enhanced through the Acquisition.

The Directors (including the independent non-executive Directors) believe that the terms of the Share Purchase Agreement and the Acquisition pursuant to the terms thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 10 –

LETTER FROM THE BOARD

FINANCIAL INFORMATION OF TAIFOOK GROUP

As at 31 December 2006, the value of the audited consolidated total assets of Taifook Group amounted to approximately HK$4,405.1 million and approximately HK$2,600.5 million (after excluding the balance of cash held on behalf of customers of Taifook Group). On the basis of 605,439,699 Taifook Shares in issue as at the Latest Practicable Date, the value of the audited consolidated total assets of Taifook Group as at 31 December 2006 per Taifook Share is approximately HK$7.3 and approximately HK$4.3 (based on the adjusted audited consolidated total assets of HK$2,600.5 million as mentioned above).

The audited consolidated profits of the Taifook Group (before taxation and extraordinary items) for the two years ended 31 December 2005 and 31 December 2006 amounted to approximately HK$69.0 million and approximately HK$197.9 million respectively and the audited consolidated net profits of Taifook Group (after taxation and extraordinary items) for the two years ended 31 December 2005 and 31 December 2006 amounted to approximately HK$63.0 million and approximately HK$175.0 million respectively. The audited basic earnings per Taifook Share for the two years ended 31 December 2005 and 31 December 2006 were approximately HK$0.1080 and HK$0.2971 respectively. The audited fully diluted earnings per Taifook Share for the year ended 31 December 2006 was approximately HK$0.2953 and no audited fully diluted earnings per Taifook Share for the year ended 31 December 2005 was disclosed as no diluting events existed during that year.

– 11 –

LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE OF TAIFOOK AS AT THE LATEST PRACTICABLE DATE AND IMMEDIATELY AFTER COMPLETION

The following table sets out the shareholding structure of Taifook as at the Latest Practicable Date and immediately after Completion (assuming that there are no changes other than those contemplated in the Share Purchase Agreement and that none of the Taifook Options outstanding as at the Latest Practicable Date will be exercised on or before Completion):

	As at the Latest Practicable Date	As at the Latest Practicable Date	Immediately after Completion	Immediately after Completion
	No. of Taifook	Approximate	No. of Taifook	Approximate
	Shares	%	Shares	%
The Purchaser (Note 2)	129,628,340	21.4	376,615,103	62.2
	----------------	-------------	----------------	-------------
The Vendors
CTF Nominee	107,140,540	17.7	—	—
CTF Enterprises	30,977,916	5.1	—	—
Mr. Lo	9,500,000	1.6	—	—
Wellington	70,616,222	11.7	—	—
GPGL (Note 3)	4,346,000	0.7	—	—
Mr. Doo Jr	24,406,085	4.0	—	—
	246,986,763	40.8	—	—
	----------------	-------------	----------------	-------------
The directors of Taifook
(Note 4)
Mr. Wong Shiu Hoi,
Peter	12,000,000	2.0	12,000,000	2.0
Mr. Lee Yiu Wing,
William	700,000	0.1	700,000	0.1
Mr. Chan Chi On,
Derek	562,000	0.1	562,000	0.1
	13,262,000	2.2	13,262,000	2.2
	----------------	-------------	----------------	-------------
Public	215,562,596	35.6	215,562,596	35.6
	~~----------------~~	~~-------------~~	~~----------------~~	~~-------------~~
Total	605,439,699	100.0	605,439,699	100.0

Notes:

1. The above table only reflects the relevant party’s interests in the issued share capital of Taifook. Derivative interests in Taifook Shares are disregarded for the purposes of compiling the information above.

2. The Purchaser is an indirect wholly-owned subsidiary of NWS and an indirect subsidiary of the Company. Both the Company and NWS are holding Taifook Shares through the Purchaser.

3. GPGL is wholly-owned by Mr. Doo, who is one of the deputy chairmen and an executive director of Taifook.

4. The interests of two of the directors of Taifook, namely Mr. Lo and Mr. Doo, are excluded.

– 12 –

LETTER FROM THE BOARD

As confirmed by Mr. Wong Shiu Hoi, Peter, Mr. Lee Yiu Wing, William and Mr. Chan Chi On, Derek, each being an executive director of Taifook, none of them has any shareholding in the Company or NWS nor is any of them accustomed to act in accordance with the instructions of the Purchaser and/or Dr. Cheng Kar Shun, Henry. None of such directors of Taifook is a party acting in concert with the Purchaser. Save for the co-directorship with Dr. Cheng Kar Shun, Henry in Taifook and being an employee of Taifook, none of Mr. Wong Shiu Hoi, Peter, Mr. Lee Yiu Wing, William and Mr. Chan Chi On, Derek has any other relationship (financial or otherwise) with the Company, NWS, Dr. Cheng Kar Shun, Henry and parties acting in concert with any of them.

INFORMATION ON TAIFOOK GROUP

Taifook is a company incorporated in Bermuda with limited liability whose shares have been listed and traded on the Main Board of the Stock Exchange since 1996. The principal activities of Taifook Group comprise securities and futures contracts broking and trading, the provision of margin and other financing, the provision of corporate advisory, placing and underwriting services, bullion contracts dealing and trading, leveraged foreign exchange trading, the provision of nominee and custodian services, fund management and the provision of financial planning services.

Set out below is the simplified shareholding chart of Taifook as at the Latest Practicable Date:

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– 13 –

LETTER FROM THE BOARD

Set out below is the simplified shareholding chart of Taifook immediately after Completion:

==> picture [245 x 383] intentionally omitted <==

----- Start of picture text -----

Family members of
Dato’ Dr. Cheng Yu
Tung
Cheng Yu Tung Family
(Holdings) Limited
51%
CTF Enterprises
36.53%
2.99% The Company
Mr. Doo Jr
55.84%
0.01%
NWS 0.10%
Mr. Doo
0.46%
100%
100%
Purchaser
GPGL
Directors of Taifook
(excluding Mr. Lo Public
and Mr. Doo)
62.2% 2.2% 35.6%
Taifook
----- End of picture text -----

RELATIONSHIPS BETWEEN THE PARTIES

The Group is principally engaged in investments in the areas of property, infrastructure, services, department store operation, hotel operation and telecommunications and technology. The Company is the holding company of NWS, holding approximately 55.84% of the issued share capital of NWS as at the Latest Practicable Date.

The principal activities of the NWS Group include (i) the investment in and/or operation of facilities, contracting and transport; and (ii) the development, investment, operation and/or management of power plants, water treatment and waste management plants, roads as well as container terminals.

The Purchaser is an indirect wholly-owned subsidiary of NWS, whose principal activity is investment holding.

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LETTER FROM THE BOARD

CTF Nominee is a company incorporated in Hong Kong, whose principal activity is nominee business. CTF Nominee is wholly-owned by Dato’ Dr. Cheng Yu Tung, who, together with his family members, is in control of the Company and NWS.

CTF Enterprises is a substantial shareholder of the Company holding, as at the Latest Practicable Date, approximately 36.53% of the issued share capital of the Company and ultimately owned as to 51% by Cheng Yu Tung Family (Holdings) Limited which is controlled by the family members of Dato’ Dr. Cheng Yu Tung. The principal activity of CTF Enterprises is investment holding.

GPGL is a company incorporated in the British Virgin Islands and wholly-owned by Mr. Doo, who is the deputy chairman and an executive director of NWS and one of the deputy chairmen and an executive director of Taifook, and the father of Mr. Doo Jr. The principal activity of GPGL is investment holding. Mr. Doo Jr is an executive director of NWS.

Mr. Lo is one of the deputy chairmen and an executive director of Taifook and the sole beneficial owner of Wellington. The principal activity of Wellington is investment holding.

The interests in shares of the Company and NWS of the Vendors (and, where applicable, their ultimate beneficial owners) and their respective associates as at the Latest Practicable Date were set out below:

		Approximate		Approximate	Approximate
		percentage			percentage
	No. of	in the issued	No. of	in the issued
	shares in the	share capital	shares in	share capital
Vendors	Company held	of the Company	NWS held		of NWS
CTF Nominee	—	—	—		—
CTF Enterprises(Note 1)	1,348,865,983	36.53	59,831,893		2.99
Mr. Lo	—	—	—		—
Wellington	—	—	—		—
GPGL (Note 2)	—	—	9,130,000		0.46
Mr. Doo Jr (Note 3)	—	—	165,566		0.01

Notes:

1. Apart from the 59,831,893 shares in NWS directly held by it, CTF Enterprises is deemed to have an interest in 1,116,904,912 shares in NWS (representing approximately 55.84% of the issued share capital of NWS as at the Latest Practicable Date) through the Company.

2. Mr. Doo, the sole shareholder of GPGL, is personally interested in 2,006,566 shares in NWS, representing approximately 0.1% of the issued share capital of NWS as at the Latest Practicable Date.

3. Mr. Doo Jr is holding 165,566 shares in NWS, representing approximately 0.01% of the issued share capital of NWS as at the Latest Practicable Date, through a company wholly-owned by him.

Save as disclosed above, none of the Vendors (and, where applicable, their ultimate beneficial owners) and their respective associates held any interests in shares of the Company and NWS as at the Latest Practicable Date.

– 15 –

LETTER FROM THE BOARD

POSSIBLE MANDATORY UNCONDITIONAL CASH OFFERS

As at the Latest Practicable Date, the Purchaser owned 129,628,340 Taifook Shares, representing approximately 21.4% of the issued share capital of Taifook, and the Vendors, in aggregate, owned 246,986,763 Taifook Shares, representing approximately 40.8% of the issued share capital of Taifook.

Upon Completion, the Purchaser and parties acting in concert with it will own in aggregate 376,615,103 Taifook Shares, representing approximately 62.2% of the issued share capital of Taifook as at the Latest Practicable Date, and will be required under Rule 26.1 and Rule 13 of the Takeovers Code to make mandatory unconditional cash offers to acquire all the issued Taifook Shares and to cancel all outstanding Taifook Options not already owned or agreed to be acquired by the Purchaser and parties acting in concert with it.

As at the Latest Practicable Date, Taifook had 605,439,699 Taifook Shares in issue and outstanding Taifook Options entitling the Taifook Optionholders to subscribe for up to an aggregate of 12,710,000 Taifook Shares as to 10,250,000 Taifook Options which may be exercised at an exercise price of HK$0.94 and as to 2,460,000 Taifook Options which may be exercised at an exercise price of HK$1.20 per Taifook Share.

Accordingly, apart from the 246,986,763 Taifook Shares which will be acquired by the Purchaser and the Taifook Shares which are currently owned by the Purchaser,

• (i) 228,824,596 Taifook Shares (assuming the outstanding Taifook Options granted are not exercised prior to the close of the Offer) will be subject to the Share Offer, and 12,710,000 outstanding Taifook Options (if not exercised in the meantime) will be subject to the Option Offer; or

• (ii) 241,534,596 Taifook Shares (assuming 12,710,000 outstanding Taifook Options have been fully exercised prior to the close of the Offer) will be subject to the Share Offer.

Save for the outstanding Taifook Options disclosed above, there were no outstanding warrants, options or securities convertible into Taifook Shares as at the Latest Practicable Date.

Principal terms of the Offer

Upon Completion, Standard Chartered, on behalf of the Purchaser, will make mandatory unconditional cash offers to acquire all the issued Taifook Shares and to cancel all the outstanding Taifook Options (other than those already owned or agreed to be acquired by the Purchaser or by parties acting in concert with it) on the following basis:

The Share Offer

For each Taifook Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$2.43 in cash

The Purchaser is also required under the Takeovers Code to make a comparable offer for all the outstanding Taifook Options as part of the Offer. The Purchaser will offer to pay the Taifook Optionholders in cash on the basis set out below in respect of every Taifook Option in consideration of the cancellation by the Taifook Optionholders of all their rights in respect of such Taifook Options.

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LETTER FROM THE BOARD

The Option Offer

For each Taifook Option having an exercise price of HK$0.94 per Taifook Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$1.49 in cash For each Taifook Option having an exercise price of HK$1.20 per Taifook Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$1.23 in cash

Offer

The Offer will only be made after Completion, which is conditional upon the fulfillment of the conditions more particularly described in the paragraph headed ‘‘Conditions of the Share Purchase Agreement’’ above.

Total consideration

Assuming that there is no change in the issued share capital of Taifook prior to the making of the Offer, at the price of HK$2.43 per Taifook Share, the entire issued share capital of Taifook is valued at approximately HK$1,471.2 million under the Share Offer, and all of the Taifook Shares subject to the Share Offer are valued at approximately HK$556.0 million. Assuming that all the 12,710,000 outstanding Taifook Options are tendered at a price of HK$1.49 for each Taifook Option having an exercise price of HK$0.94 per Taifook Share and HK$1.23 for each Taifook Option having an exercise price of HK$1.20 per Taifook Share under the Option Offer, the total consideration payable by the Purchaser under the Option Offer is HK$18,298,300.

Assuming that the outstanding Taifook Options comprising 12,710,000 Taifook Shares (not being Taifook Options owned or agreed to be acquired by the Purchaser or parties acting in concert with it) are fully exercised prior to the making of the Offer, there will be 618,149,699 Taifook Shares in issue and the entire issued share capital of Taifook would be valued at approximately HK$1,502.1 million under the Share Offer, and all of the Taifook Shares subject to the Share Offer would be valued at approximately HK$586.9 million.

Intention of the Purchaser regarding Taifook

Although the Company and NWS propose to expand their operations to include the businesses of Taifook Group by means of the Acquisition, NWS intends to retain the majority of the senior management of Taifook Group after the Acquisition. It is believed that the experience and expertise of the existing senior management of Taifook Group are the main drive to the continued success of the Taifook Group. By retaining the majority of the senior management of Taifook Group, it is also believed that the flourishing overall operation and results of the Taifook Group can be maintained which in turn will be in the interests of the Shareholders as a whole. The Purchaser intends to continue the existing businesses of the Taifook Group and has no present plan of injecting any additional assets into or redeployment of the assets of the Taifook Group other than in its ordinary course of business.

– 17 –

LETTER FROM THE BOARD

Board composition of Taifook

NWS will review the composition of the board of Taifook following the despatch of this circular and such composition may or may not be changed before or after the Completion and/or upon the close of the Offer. Any such change will only be effected in accordance with the Takeovers Code and the Listing Rules. In the event of any change in the composition of the board of Taifook, Taifook will comply with the publication requirement under the Listing Rules to inform the public accordingly.

The listing status of Taifook

The Purchaser intends that Taifook will remain listed on the Main Board of the Stock Exchange after the close of the Offer and does not intend to exercise any rights to compulsorily acquire all the Taifook Shares. The directors of the Purchaser will jointly and severally undertake to the Stock Exchange to take appropriate steps following the close of the Offer to ensure that sufficient public float exists in the Taifook Shares.

EGM

The Company will convene the EGM at Meeting Room 301B (New Wing), Hong Kong Convention & Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Tuesday, 5 June 2007 at 12: 30 p.m. for the purpose of considering, and if thought fit, approving, among other matters (if any), the Share Purchase Agreement and the transactions contemplated thereunder. A notice of the EGM is set out on pages 42 and 43 of this circular. The Vendors (and, where applicable, their ultimate beneficial owners) and their respective associates and parties acting in concert with any of them are required to abstain from voting at the EGM in accordance with Rule 14A.18 of the Listing Rules.

A form of proxy for use at the EGM is also enclosed. If you are not able to attend the meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit it with the registered office of the Company at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

POLL PROCEDURE

Pursuant to article 74 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 a poll is taken as may from time to time be required under the Listing Rules or any other applicable laws, rules or regulations or unless a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) demanded:

• (a) by the chairman of the meeting; or

• (b) by at least three Shareholders present in person or by proxy for the time being entitled to vote at the meeting; or

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LETTER FROM THE BOARD

• (c) by any Shareholder or Shareholders present in person (or in the case of a corporation, by its duly authorised representative) 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

• (d) by a Shareholder or Shareholders present in person (or in the case of a corporation, by its duly authorised representative) or by proxy and holding Shares 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.

Pursuant to Rule 13.39(4) of the Listing Rules, the vote of the Independent Shareholders taken at the EGM will be taken by poll, the results of which will be announced on the next Business Day after the EGM.

RECOMMENDATION

The Independent Board Committee comprising Mr. Yeung Ping Leung, Howard, Dr. Cha Mou Sing, Payson (alternate director to Dr. Cha Mou Sing, Payson: Mr. Cha Mou Zing, Victor), and Mr. Lee Luen Wai, John has been established to advise the Independent Shareholders on, among other things, the fairness and reasonableness of the Share Purchase Agreement and the Acquisition pursuant to the terms thereunder. Your attention is drawn to the advice of the Independent Board Committee set out in its letter set out on page 20 of this circular. CIMB-GK has been appointed by the Company as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the fairness and reasonableness of the Acquisition under the terms of the Share Purchase Agreement. Your attention is also drawn to the letter of advice from CIMB-GK to the Independent Board Committee and the Independent Shareholders in respect of the terms of the Share Purchase Agreement set out from pages 21 to 28 of this circular.

The Independent Board Committee, having taken into account the advice of CIMB-GK, considers that the Share Purchase Agreement and the Acquisition pursuant to the terms thereunder are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution approving the Share Purchase Agreement and the transactions contemplated thereunder at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to the information set out in the appendix to this circular.

Yours faithfully, For and on behalf of New World Development Company Limited Dr. Cheng Kar Shun, Henry Managing Director

– 19 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is a full text of the letter from the Independent Board Committee prepared for the purpose of inclusion in this circular:

==> picture [231 x 41] intentionally omitted <==

(incorporated in Hong Kong with limited liability)

(stock code: 0017)

18 May 2007

To the Independent Shareholders

Dear Sir or Madam

CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF SHARES IN TAIFOOK SECURITIES GROUP LIMITED

We refer to the circular issued by the Company to its shareholders and dated 18 May 2007 (‘‘Circular’’) of which this letter forms part. Terms defined in the Circular have the same meanings when used in this letter unless the context otherwise requires.

Under the Listing Rules, the Acquisition will constitute a connected transaction for the Company and is thus subject to the approval of the Independent Shareholders at the EGM.

We have been appointed by the Board to consider the Share Purchase Agreement and the Acquisition pursuant to the terms thereunder and to advise the Independent Shareholders in connection therewith and as to whether, in our opinion, such terms are fair and reasonable so far as the Independent Shareholders are concerned. CIMB-GK has been appointed as the independent financial adviser to advise us in this respect.

We wish to draw your attention to the letter from the Board and the letter from CIMB-GK as set out in the Circular. Having considered the principal factors and reasons considered by, and the advice of, CIMB-GK as set out in its letter of advice, we consider that the Share Purchase Agreement and the Acquisition pursuant to the terms thereunder are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and are in the interests of the Company and its shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution approving the Share Purchase Agreement and the transactions contemplated thereunder at the EGM.

Yours faithfully, For and on behalf of

Independent Board Committee Mr. Yeung Ping Leung, Howard Dr. Cha Mou Sing, Payson Mr. Lee Luen Wai, John

– 20 –

LETTER FROM CIMB-GK

The following is the full text of a letter of advice prepared by CIMB-GK to the Independent Board Committee and the Independent Shareholders for the purpose of inclusion in this circular:

CIMB-GK Securities (HK) Limited

25/F., Central Tower 28 Queen’s Road Central Hong Kong

18 May 2007

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONNECTED TRANSACTION

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Acquisition. Details of the terms of the Share Purchase Agreement are set out in the letter from the Board as contained in the circular of the Company to the Shareholders dated 18 May 2007 (the ‘‘Circular’’), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

The Purchaser, a wholly-owned subsidiary of NWS, which in turn is a non-wholly-owned subsidiary of the Company, has conditionally entered into the Share Purchase Agreement on 26 April 2007 with the Vendors to acquire from them an approximately 41.0% interest in the issued share capital of Taifook as at the date of Share Purchase Agreement for a cash Aggregate Purchase Price of approximately HK$600.18 million. By virtue of the relationships between the parties as more particularly described under the paragraphs headed ‘‘Relationship between the parties’’ of this Circular and, given, in particular, that CTF Enterprises is a substantial shareholder of the Company, that CTF Nominee is a company wholly-owned by Dato’ Dr. Cheng Yu Tung, an executive director of the Company, and that Mr. Doo (the sole shareholder of GPGL) and Mr. Doo Jr are executive directors of NWS, the Acquisition also constitutes a connected transaction for the Company under the Listing Rules and is subject to the reporting and announcement requirements and the approval of the Independent Shareholders by way of poll at the EGM, the Vendors (and, where applicable, their ultimate beneficial owners) and their respective associates and parties acting in concert with any of them will abstain from voting at the EGM. The Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Acquisition.

BASIS OF ADVICE

In formulating our recommendation, we consider that we have reviewed sufficient and relevant information and documents and have taken reasonable steps as required under Rule 13.80, including the notes thereto of the Listing Rules to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have relied on the information and facts contained or referred to in the Circular as well as the representations made or provided by the Directors and senior management of the Company. The

– 21 –

LETTER FROM CIMB-GK

Directors have declared in a responsibility statement set out in the Appendix to the Circular that they jointly and severally accept full responsibility for the accuracy of the information contained and representations made in the Circular. We have also assumed that the information and the Directors’ representations contained or referred to in the Circular were true and accurate at the time they were made and continue to be so at the date of the despatch of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Company. We have also been advised by the Directors and believe that no material facts have been omitted from the Circular.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained and the Directors’ representations made in the Circular and to provide a reasonable basis for our recommendation. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or the prospects of the Company or Taifook Group or any of their respective subsidiaries or associates.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion for the Acquisition, we have considered the following principal factors and reasons:

Background and reasons

The Group is principally engaged in investments in the areas of property, infrastructure, services, department store operation, hotel operation and telecommunications and technology. NWS is a non-wholly-owned subsidiary of the Company and NWS Group’s principal activities are investment in infrastructure projects, operation of facilities rental and investment in service industries including financial related services.

NWS through the Purchaser is currently the single largest shareholder of Taifook holding approximately 21.5% in Taifook’s issued share capital as at the date of the Share Purchase Agreement. The principal activities of the Taifook Group comprise securities and futures contracts broking and trading, the provision of margin and other financing, the provision of corporate advisory, placing and underwriting services, bullion contracts dealing and trading, leveraged foreign exchange trading, the provision of nominee and custodian services, fund management and the provision of financial planning services. The Taifook Shares are listed on the Main Board of the Stock Exchange. Set out below is the audited financial results of the Taifook Group for the two years ended 31 December 2005 and 2006:

	2005	2006
	HK$’000	HK$’000
Revenue	390,781	726,913
Profit before tax	68,998	197,941
Profit attributable to shareholders of Taifook	62,958	172,325

Source: Taifook’s 2006 annual report.

– 22 –

LETTER FROM CIMB-GK

The Taifook Group recorded an increase in revenue of approximately 86.0% and an increase in profit attributable to shareholders of approximately 173.7% for the year ended 31 December 2006 as compared to 2005. The increase was mainly attributable to the record trading volume of the Stock Exchange (average daily trading volume increased from approximately HK$18.3 billion (2005) to approximately HK$33.9 billion (2006)) whereby Taifook was able to benefit therefrom and achieved an increase in its core business revenues including revenue from brokerage activities, provisions of margin financing and corporate advisory services. The audited consolidated net asset value (‘‘NAV’’) of the Taifook Group amounted to approximately HK$1,183.7 million (before adjustment for the proposed final dividend of HK$41.6 million) as at 31 December 2006.

As noted from the interim report of NWS for the six months ended 31 December 2006, NWS intends to continue investing in infrastructure projects and services industries with good prospects and returns. We note that Taifook is an established brokerage firm in Hong Kong with over 30 years of history providing a full range of integrated financial services. In addition to Taifook’s financial performance in recent years, we also noted from Taifook’s 2006 annual report that it will continue to leverage on its brand name and niche to expand its core business in Hong Kong and China markets, as evidenced by its acquisitions of a local fund management company in Hong Kong announced in January 2007 and an investment into a futures company in the PRC announced in February 2007.

Upon Completion, the Purchaser will own in aggregate 376,615,103 Taifook Shares, representing approximately 62.2% of the issued share capital of Taifook as at the Latest Practicable Date, and will be required under Rule 26.1 and Rule 13 of the Takeovers Code to make mandatory unconditional cash offers to acquire all the issued Taifook Shares and to cancel all outstanding Taifook Options not already owned or agreed to be acquired by the Purchaser and parties acting in concert with it. As noted from the Announcement, the financial adviser to NWS, is satisfied that there are sufficient financial resources available to the Purchaser to meet its obligation to pay the Aggregate Purchase Price and to implement the Offer in case of full acceptance of the Offer.

Having considered the above, and with the improving local economy, the growth of the PRC economy as noted in the continued growth in the gross domestic product of the PRC in recent years and the gradual open-up of the capital markets in the PRC, which are favourable market conditions for the business of Taifook Group, we concur with the views of the Directors and consider that the Acquisition, which is in line with the NWS Group’s stated business direction, will enable NWS to increase its existing stake in Taifook to a controlling position, and is in the interests of the Company (through its interests in NWS) and the Shareholders as a whole.

The Aggregate Purchase Price

Basis

The Aggregate Purchase Price, which will be payable in cash, was determined following arm’s length negotiation between the Purchaser and the Vendors with reference to the prevailing market price of Taifook Shares as at the Last Trading Day. The Aggregate Purchase Price represents:

• (i) a premium of approximately 13.6% over the closing price of HK$2.14 per Taifook Share as quoted on the Main Board of the Stock Exchange on the Last Trading Day;

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LETTER FROM CIMB-GK

• (ii) a historic price-earning ratio (‘‘PER’’) of approximately 8.51 times of the audited profit attributable to shareholders of Taifook for the year ended 31 December 2006 of approximately HK$172.3 million on the basis of 603,139,699 Taifook Shares in issue as at the date of the Share Purchase Agreement; and

• (iii) a price to net asset value (‘‘PNAV’’) of approximately 1.24 times of the audited consolidated NAV of Taifook Group as at 31 December 2006 of approximately HK$1,183.7 million (before adjustment for the proposed final dividend of HK$41.6 million) on the basis of 603,139,699 Taifook Shares in issue as at the date of the Share Purchase Agreement.

Share price performance

We have reviewed the closing price of the Taifook Shares as quoted on the Main Board of the Stock Exchange during the last twelve months preceding the Last Trading Day (the ‘‘Review Period’’) and comparing it with the performance of the Heng Sang Index during the same period as follows:

==> picture [205 x 10] intentionally omitted <==

----- Start of picture text -----

Performance of Taifook and Hang Seng Index
----- End of picture text -----

==> picture [394 x 285] intentionally omitted <==

----- Start of picture text -----

2.2 21,000
20,000
2.0
Hang Seng Index
19,000
1.8
18,000
1.6
17,000
1.4
16,000
Taifook
1.2
15,000
1.0 14,000
Closing price (HK$)
Hang Seng Index
April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 Last Trading Day
----- End of picture text -----

As shown in the above chart, during the Review Period, the highest and lowest closing prices of the Taifook Shares were HK$2.18 per Share recorded on 17 April 2007, and HK$1.20 per Taifook Share recorded on 24 April 2006, respectively. The Purchase Price represents a premium of (i) approximately 11.47% to such highest closing price of HK$2.18 per Taifook Share; and (ii) approximately 102.50% to such lowest closing price of HK$1.20 per Taifook Share during the Review Period. During the Review Period, the Taifook Shares generally traded in line with the

– 24 –

LETTER FROM CIMB-GK

Hang Seng Index with the closing price ranged from HK$1.20 to HK$1.44 per Taifook Share from June 2006 to October 2006. Taifook Shares began to undergo an upward surge in November 2006, when the Hang Seng Index also experienced such an increase. The Taifook Shares outperformed the Hang Seng Index in January 2007 to reach the highest closing price of HK$2.18 in April 2007. As noted from the overall market performance and public information, we believe that the increase in Taifook’s share price since late 2006 may have been attributable to the market expectation of Taifook’s performance in light of the record trading volume of the Stock Exchange as well as Taifook’s proposed acquisition of a local fund management company announced in January 2007.

PER and PNAV

In assessing the fairness of the Aggregate Purchase Price, we have further reviewed, to our best efforts, the PER and PNAVof 15 comparable companies listed on the Main Board of the Stock Exchange whose principal business is engaged in similar business as those of the Taifook Group (the ‘‘Comparable Companies’’). Given the record trading volume of the Stock Exchange in 2006, particularly in the second half of 2006, in order to ensure a fair comparison whereby the Comparable Companies’ results, hence their respective share prices would have reflected their business performance in 2006 so as those of the Taifook Group, for the purposes of PER analysis, we have excluded those Comparable Companies whose latest audited annual results only reported up to 30 June 2006 or earlier or made loss in the latest financial period to arrive at eight Comparable Companies (the ‘‘PER Comparable Companies’’). Details of the comparison of the PER Comparable Companies for the purposes of PER analysis and the Acquisition are as follows:

Name of PER Comparable Companies Date of financial year end CASH Financial Services Group Limited 31 December 2006 Celestial Asia Securities Holdings Limited 31 December 2006 E2-Capital (Holdings) Limited 31 December 2006 First Shanghai Investments Limited 31 December 2006 Hantec Investment Holdings Limited 31 December 2006 Shenyin Wanguo (H.K.) Limited 31 December 2006 South China Financial Holdings Limited 31 December 2006 Sun Hung Kai & Co. Limited 31 December 2006 Average: Adjusted average (note 2): The Acquisition

PER (note 1) (times) 12.28 8.80 7.42 5.36 5.39 11.28 26.90 22.10

12.44 8.42 8.51

Source: Bloomberg, www.hkex.com.hk (the ‘‘Stock Exchange’s Website’’), the latest annual report and annual results announcement of the PER Comparable Companies

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LETTER FROM CIMB-GK

Notes:

1. Based on the closing share prices per share of the PER Comparable Companies as quoted on Bloomberg on the Last Trading Day divided by the respective earnings per share (being the net profit attributable to the shareholders per the latest published annual financial results of the PER Comparable Companies available on 26 April 2007, being the date of the Share Purchase Agreement, divided by the number of shares reported on the Stock Exchange’s Website on 31 March 2007).

2. Excluded the PER of South China Financial Holdings Limited and Sun Hung Kai & Co. Limited, which are outliers.

The PER of the PER Comparable Companies ranged from 5.36 times to 26.90 times, with an average of approximately 12.44 times. The implied PER under the Aggregate Purchase Price is within such range and is lower than the average PER of the PER Comparable Companies.

The adjusted PER of the PER Comparable Companies ranged from 5.36 times to 12.28 times, with an average of approximately 8.42 times. The implied PER under the Aggregate Purchase Price is within such range and is comparable with the adjusted average PER of the PER Comparable Companies.

The comparison of the PNAV of Taifook Shares as implied under the Aggregate Purchase Price and those of the Comparable Companies (including all the 15 Comparable Companies based on their latest published audited or unaudited NAV) are summarised below:

Name of Comparable Companies Date of latest published NAV CASH Financial Services Group Limited 31 December 2006 Celestial Asia Securities Holdings Limited 31 December 2006 E2-Capital (Holdings) Limited 31 December 2006 Emperor Capital Group Limited 31 December 2006 First Shanghai Investments Limited 31 December 2006 Get Nice Holdings Limited 30 September 2006 Hantec Investment Holdings Limited 31 December 2006 Quam Limited 30 September 2006 Shenyin Wanguo (H.K.) Limited 31 December 2006 South China Financial Holdings Limited 31 December 2006 Sun Hung Kai & Co. Limited 31 December 2006 SW Kingsway Capital Holdings Limited 31 December 2006 Tanrich Financial Holdings Limited 31 December 2006 Upbest Group Limited 30 September 2006 VXL Capital Limited 31 December 2006 Average: Adjusted average (note 3) The Acquisition

PNAV (note 1) (times) 1.01 0.50 0.70 0.54 (note 2) 0.75 1.04 0.79 1.99 1.84 1.85 1.17 1.08 0.66 5.28 3.06

1.48 1.21 1.24

The Acquisition

Source: Bloomberg, the Stock Exchange’s Website, the latest annual report, interim report and annual results announcement of the Comparable Companies

– 26 –

LETTER FROM CIMB-GK

Notes:

1. Based on the closing share prices per share of the Comparable Companies as quoted on Bloomberg on the Last Trading Day divided by the NAV per share (being the NAV per the latest published audited or unaudited financial statements of the Comparable Companies available on 26 April 2007, being the date of the Share Purchase Agreement, divided by the number of shares reported on the Stock Exchange’s Website on 31 March 2007).

2. Based on the initial public offer price of HK$0.38 per share as listing of shares were after the Last Trading Day.

3. Excluded the PNAV of Upbest Group Limited, which is an outlier.

The PNAV of the Comparable Companies ranged from approximately 0.50 times to 5.28 times, with an average of approximately 1.48 times. The implied PNAV under the Aggregate Purchase Price is within the range and is lower than the average PNAV of the Comparable Companies.

The adjusted PNAVof the Comparable Companies ranged from approximately 0.50 times to 3.06 times, with an average of approximately 1.21 times. The implied PNAV under the Aggregate Purchase Price is within the range and is comparable with the adjusted average PNAV of the Comparable Companies.

Views

Having taken into account the above, we consider that the Aggregate Purchase Price is fair and reasonable so far as the Company and the Independent Shareholders are concerned.

Possible financial impact

Earnings

Upon Completion, Taifook will become a non-wholly-owned subsidiary of NWS and its results of operations will be consolidated into the financial statements of NWS Group, which in turn will be consolidated into the Group. Based on the performance of the Taifook Group in recent years, the Acquisition is expected to have a positive impact on the earnings base of the NWS Group, and hence the Group.

NAV

Based on the Aggregate Purchase Price and NWS Group’s 62.2% attributable interest in the audited consolidated NAV of the Taifook Group as at 31 December 2006 of approximately HK$1,183.7 million (before adjustment for the proposed final dividend of HK$41.6 million) immediately upon Completion, the Acquisition would not have a material adverse impact on the net asset base of the NWS Group, and hence the Group.

Working capital

The NWS Group will satisfy the Aggregate Purchase Price by bank borrowings. We note that the financial adviser to NWS is satisfied that there are sufficient financial resources available to the Purchaser to meet its obligation to pay the Aggregate Purchase Price and to implement the

– 27 –

LETTER FROM CIMB-GK

Offer in case of full acceptance of the Offer. Based on existing financial position of the NWS Group and the Group, the Directors consider that the Acquisition, and hence the Offer assuming acceptance in full, will not have a material adverse impact on the working capital position of the NWS Group, and hence the Group.

RECOMMENDATION

Having taken into consideration the principal factors and reasons referred to above, we are of the opinion that the Share Purchase Agreement is entered into on normal and commercial terms and is in the interests of the Company and the Shareholders as a whole and that the terms thereof are fair and reasonable so far as the Company and the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote for the ordinary resolution to be proposed at the EGM to approve the Share Purchase Agreement.

Yours faithfully, For and on behalf of

CIMB-GK Securities (HK) Limited Alex Lau Flavia Hung Executive Vice President Senior Vice President

– 28 –

GENERAL INFORMATION

APPENDIX

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, there are no other facts the omission of which would make any statement herein misleading.

2. DIRECTORS’ INTERESTS

• (a) As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the shares or underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which 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 in which he was deemed or taken to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

(I) Long position in shares

		Number	of shares
			Interests	of		Approximate
	Beneficial	Interests	controlled			% of
	interests	of spouse	corporation		Total	shareholding
the Company
(ordinary shares of HK$1.00	each)
Dr. Cheng Kar Shun, Henry	—	300,000		—	300,000	0.01
Dr. Sin Wai Kin, David	4,708,708	47,098		—	4,755,806	0.13
Mr. Leung Chi Kin, Stewart	32,974	—		—	32,974	negligible
Mr. Chow Kwai Cheung	44,527	—		—	44,527	negligible
Mr. Ho Hau Hay, Hamilton	—	—	439,177		439,177	0.01
			(Note	1)
Mr. Liang Cheung Biu,	5,215	—		—	5,215	negligible
Thomas
Dragon Fortune Limited
(ordinary shares of US$1.00	each)
Mr. Cheng Kar Shing, Peter	—	—	15,869		15,869	27.41
			(Note	2)
HH Holdings Corporation
(ordinary shares of HK$1.00	each)
Dr. Sin Wai Kin, David	42,000	—		—	42,000	7.00

– 29 –

GENERAL INFORMATION

APPENDIX

		Number	of shares
			Interests of		Approximate
	Beneficial	Interests	controlled		% of
	interests	of spouse	corporation	Total	shareholding
Master Services Limited
(ordinary shares of US$0.01 each)
Mr. Leung Chi Kin, Stewart	16,335	—	—	16,335	1.63
Mr. Chow Kwai Cheung	16,335	—	—	16,335	1.63
Mega Choice Holdings Limited
(ordinary shares of HK$1.00 each)
Dr. Cheng Kar Shun, Henry	—	—	3,710	3,710	34.61
			(Note 3)
New World China Land Limited
(ordinary shares of HK$0.10 each)
Dr. Cheng Kar Shun, Henry	12,500,000	—	52,271,200	64,771,200	1.69
			(Note 3)
Mr. Leung Chi Kin, Stewart	500,000	—	—	500,000	0.01
Mr. Chow Kwai Cheung	650,126	—	—	650,126	0.02
NWS
(ordinary shares of HK$1.00 each)
Dr. Cheng Kar Shun, Henry	9,179,199	587,000	8,000,000	17,766,199	0.89
			(Note 3)
Dr. Sin Wai Kin, David	3,281	31	16,995,745	16,999,057	0.85
			(Note 4)
Mr. Cheng Kar Shing, Peter	182,206	—	2,689,699	2,871,905	0.14
			(Note 5)
Mr. Liang Chong Hou, David	163	—	—	163	negligible
Mr. Leung Chi Kin, Stewart	3,358,851	—	—	3,358,851	0.17
Mr. Chow Kwai Cheung	207,000	—	—	207,000	0.01
Sun City Holdings Limited
(ordinary shares of HK$1.00 each)
Mr. Cheng Kar Shing, Peter	—	80,000	3,570,000	3,650,000	45.63
			(Note 6)
Sun Legend Investments Limited
(ordinary shares of HK$1.00 each)
Mr. Cheng Kar Shing, Peter	—	—	500	500	50.00
			(Note 7)
YE Holdings Corporation
(ordinary shares of HK$1.00 each)
Mr. Leung Chi Kin, Stewart	37,500	—	—	37,500	1.50

– 30 –

GENERAL INFORMATION

APPENDIX

Notes:

1. These shares are beneficially-owned by a company in which Mr. Ho Hau Hay, Hamilton owns 40.0% of its issued share capital.

2. 4,102 shares are held by a company wholly-owned by Mr. Cheng Kar Shing, Peter and 11,767 shares are held by Sun City Holdings Limited (‘‘Sun City’’), of which Mr. Cheng Kar Shing, Peter is deemed to be interested in 45.63% of its issued share capital.

3. These shares are beneficially-owned by companies which are wholly-owned by Dr. Cheng Kar Shun, Henry.

4. These shares are beneficially-owned by a company which is jointly-owned by Dr. Sin Wai Kin, David and his spouse.

5. These shares are beneficially-owned by a company which is wholly-owned by Mr. Cheng Kar Shing, Peter.

6. These shares are held by a company of which Mr. Cheng Kar Shing, Peter has an indirect interest of 49.58%.

7. Mr. Cheng Kar Shing, Peter is deemed to be interested in the shares of Sun Legend Investments Limited by virtue of his interests in Sun City.

(II) Long position in underlying shares — share options

• (i) the Company

Name of Director Grant date Dato Dr. Cheng Yu Tung 19 March 2007 Dr. Cheng Kar Shun, Henry 19 March 2007 Dr. Sin Wai Kin, David 19 March 2007 Mr. Liang Chong Hou, David 19 March 2007 Mr. Leung Chi Kin, Stewart 19 March 2007 Mr. Cheng Chi Kong, Adrian 19 March 2007 Mr. Cheng Yue Pui 19 March 2007 Mr. Cheng Kar Shing, Peter 19 March 2007 Mr. Chow Kwai Cheung 19 March 2007 Mr. Ho Hau Hay, Hamilton 19 March 2007 Mr. Liang Cheung Biu, Thomas 19 March 2007 Lord Sandberg Michael 19 March 2007 Dr. Cha Mou Sing, Payson 19 March 2007 Mr. Yeung Ping Leung, Howard 19 March 2007 Mr. Lee Luen Wai, John 19 March 2007

Number of share options outstanding as at the Latest Practicable Date with exercise price per share of HK$17.756

with exercisable period with exercisable period Total (Note 1) (Note 2) 36,500,000 — 36,500,000 36,500,000 — 36,500,000 300,000 — 300,000 300,000 — 300,000 36,500,000 — 36,500,000 — 500,000 500,000 200,000 — 200,000 200,000 1,200,000 1,400,000 200,000 1,200,000 1,400,000 200,000 — 200,000 200,000 — 200,000 300,000 — 300,000 300,000 — 300,000 300,000 — 300,000 300,000 — 300,000

– 31 –

GENERAL INFORMATION

APPENDIX

Notes:

1. From 19 March 2007 to 18 March 2012.

2. Divided into 5 tranches exercisable from 19 March 2007, 19 March 2008, 19 March 2009, 19 March 2010 respectively to 18 March 2012.

3. The cash consideration paid by the directors for the grant of the share options was HK$10.

(ii) New World China Land Limited

			Number of	Exercise
			share	price per
Name	Date of grant	Exercisable period	options	share
				HK$
Mr. Cheng Chi	25 July 2006	26 August 2006 to	552,400	2.865
Kong, Adrian		25 August 2011

Notes:

1. The share options are exercisable within five years commencing from one month after the date of grant, provided that the maximum number of share options that can be exercised during each anniversary year is 20% of the total share options granted together with any unexercised share options carried forward from the previous anniversary year(s).

2. The cash consideration paid for the grant of the share options was HK$10.00.

(iii) NWS

			Number of	Exercise
			share	price per
Name	Date of grant	Exercisable period	options	share
				HK$
Mr. Leung Chi Kin,	21 July 2003	(Note 1)	68,820	3.711
Stewart
Notes:

1. Divided into 2 tranches exercisable from 21 July 2004 and 21 July 2005 respectively to 20 July 2008, both dates inclusive.

2. The cash consideration paid for the grant of the share options was HK$10.00.

3. (b) Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest and short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XVof the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XVof the SFO (including the interests and short positions in which they were deemed or taken to have under such provisions of the SFO), or which are required, pursuant to section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

– 32 –

GENERAL INFORMATION

APPENDIX

• (c) On 14 February 2007, the Company entered into an agreement with Lightsource Holdings Limited (‘‘Lightsource’’), a company wholly-owned by Dr. Cheng Kar Shun, Henry, regarding the disposal of the entire equity interests held by the Company in Surely Limited (‘‘Surely’’) to Lightsource at a total consideration of approximately HK$121 million. The sole asset of Surely was 1,110 shares in Mega Choice Holdings Limited (‘‘Mega Choice’’) representing approximately 10.35% of the issued share capital of Mega Choice. As at the date of the said agreement, Dr. Cheng Kar Shun, Henry, through a wholly-owned company, has approximately 24.25% interest in Mega Choice.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any asset which have since 30 June 2006, being the date to which the latest published audited financial statements of the Company 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.

• (d) Save for the Share Purchase Agreement, as at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group since 30 June 2006, being the date to which the latest published audited financial statements of the Company were made up, and which was significant in relation to the business of the Group.

• (a) As at the Latest Practicable Date, so far as is known to the Directors, the interests of substantial shareholders (as defined in the Listing Rules) in the shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XVof the SFO as recorded in the register required to be kept under Section 336 of the SFO were as follows:

Cheng Yu Tung Family (Holdings) Limited (‘‘CYTFH’’) (Note 1) Centennial Success Limited (‘‘Centennial’’) (Note 2) CTF Enterprises (already defined) (Note 3) Notes:	Number of shares held Approximate % of shareholding Beneficial interests Interests of controlled corporation Total — 1,348,865,983 1,348,865,983 36.53 — 1,348,865,983 1,348,865,983 36.53 1,215,127,469 133,738,514 1,348,865,983 36.53

1. CYTFH holds 51% direct interest in Centennial and is accordingly deemed to have an interest in the shares deemed to be interested by Centennial. Each of Dato’ Dr. Cheng Yu Tung, Dr. Cheng Kar Shun, Henry and Mr. Cheng Kar Shing, Peter is also a director of CYTFH.

2. Centennial holds 100% direct interest in CTF Enterprises and is accordingly deemed to have an interest in the shares interested by or deemed to be interested by CTF Enterprises. Each of Dato’ Dr. Cheng Yu Tung, Dr. Cheng Kar Shun, Henry, Mr. Cheng Yue Pui, Mr. Cheng Kar Shing, Peter and Mr. Cheng Chi Kong, Adrian is also a director of Centennial.

– 33 –

GENERAL INFORMATION

APPENDIX

1. CTF Enterprises together with its subsidiaries. Each of Dato’ Dr. Cheng Yu Tung, Dr. Cheng Kar Shun, Henry, Mr. Cheng Yue Pui, Mr. Cheng Kar Shing, Peter and Mr. Cheng Chi Kong, Adrian is also a director of CTF Enterprises.

2. (b) As at the Latest Practicable Date, so far as is known to the Directors, the interests of persons (other than a Director, chief executive of the Company or substantial shareholders (as defined in the Listing Rules)) in the shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XVof the SFO as recorded in the register required to be kept under Section 336 of the SFO were as follows:

						Approximate
					Number of	% of
Name				Capacity	shares held	shareholding
Marathon	Asset	Management	Ltd	Investment manager	208,191,948	5.64

• (c) As at the Latest Practicable Date, so far as is known to the Directors and save as disclosed in this circular, the following entities, other than a Director or chief executive of the Company or a member of the Group, were directly or 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 other members of the Group:

		Approximate
		percentage of
Name of entity	Name of member of the Group	interest held
Aldburg Assets Limited	Coral Business Inc.	12.50%
Architectural Precast Limited (in court	Architectural Precast GRC Limited	35.00%
compulsory liquidation)
Asean Giant Limited	Gold Return Resources Ltd.	10.00%
Asian East Worldwide Limited	Guangzhou Northring Freeway Company	24.30%
	Limited
Beijing Zirancao Advertising Co., Ltd.	Beijing Xintong Sinologue Media &	25.00%
	Advertising Co., Ltd.
Bioforte (Hong Kong) Environmental	BioEnviroLink Technologies Limited	30.00%
Engineering And Technology
Company Ltd
Bolo Ltd	Bright Moon Company Limited	25.00%
Changzhi City Changda Highway	Shanxi Xinda Highways Limited	40.00%
Development Company
Changzhi City Changda Highway	Shanxi Xinhuang Highways Limited	40.00%
Development Company
Chow Tai Fook Enterprises Limited	Advance Planner Limited	40.00%
Chow Tai Fook Enterprises Limited	Beames Holdings Limited	36.00%
Chow Tai Fook Enterprises Limited	Crimson Company Limited	37.00%
Chow Tai Fook Enterprises Limited	Front Post Limited	15.00%
Chow Tai Fook Enterprises Limited	HH Holdings Corporation	12.00%
Cinagro Pte Limited	Cinabel (Singapore) Pte Limited	20.00%
Dalian Commercial Network Construction	Dalian New World Plaza International Co.,	12.00%
and Development Company	Ltd.
Dr. Ren Keyong	NoveMed Group Ltd.	20.00%
Easin Technology Co., Ltd.	Shanxi Xintongda Culture Propagation Co.,	40.00%
	Ltd.
Ever Global Investment Limited	Autowin Limited	30.00%
Fast Choice Investments Limited	Winner World Group Limited	20.00%

– 34 –

GENERAL INFORMATION

APPENDIX

		Approximate
		percentage of
Name of entity	Name of member of the Group	interest held
Foshan City Gaoming District	Foshan Gaoming Xinming Bridge	49.00%
Transportation Infrastructure Co. Ltd.	Company Limited
Fung Seng Diamond Co Ltd	Silver Bloom Company Limited	10.00%
Fung Seng Diamond Co Ltd	Ultra Force Limited	20.00%
Gaintek Development Limited	Better Rich Development Limited	30.00%
Golden Sphere Investments Ltd	New Hope Limited	15.00%
Grand Business Development Limited	北京新世界威邁特高新技術有限公司	45.00%
Grand Choice Profits Limited	Gold Return Resources Ltd.	10.00%
Guangxi Beiliu Gaote Co. Ltd.	Guangxi Beiliu Xinbei Highways limited	40.00%
Guangxi Cangwu County Electric Power	Guangxi Cangwu Xincang Highways	30.00%
Co. Ltd.	Limited
Guangxi Rongxian Road & Bridge	Guangxi Rongxian Xinrong Highways	30.00%
Construction Co. Ltd.	Limited
Guangxi Wuzhou Heng Tong	Wuzhou Xinwu Highways Limited	40.00%
Development Ltd.
Guangxi Yulin City Heng Tong Ltd.	Guangxi Yulin Xinye Highways Limited	40.00%
Guangxi Yulin Yu Shieh Ltd.	Guangxi Yulin Xinyu Highways Limited	40.00%
Guangzhou Yongtong Freeway Company	Guangzhou Northring Freeway Company	10.41%
Ltd.	Limited
Gujiao Highway-Bridge Development &	Taiyuan Xinyuan Expressway Company	40.00%
Construction Company	Limited
Hainan Zhonghong Investments Company	Changsha Xiangxianghai Housing	20.00%
Limited	Development Co., Ltd.
Hainan Zhonghong Investments Company	Hunan Success New Century Investment	10.00%
Limited	Company Limited
Hing Pang Petroleum Chemicals (H.K.)	Chengdu Xinyi Real Estate Development	20.00%
Limited	Co., Ltd.
Honor Fidelity Ltd	Dominion 2000 Limited	30.00%
Hotspring Ltd	Easlin Corporation	20.00%
Huamei Wealth (Beijing) International	Beijing Dongfang Huamei Real Estate	25.00%
Property Investment Co., Ltd.	Development Co., Ltd.
Huasheng Audio & Video Publishing	Beijing Jingdun Xintong Movie and TV	25.00%
House	Culture Co., Ltd.
Huasheng Audio & Video Publishing	Nanjing Xintong Huihai Movie and TV	17.50%
House	Culture Co., Ltd.
Infinity Regent Inc.	Milestone Overseas Limited	16.67%
Info Trade Investment Limited	Teddy Bear Kingdom Holdings Limited	22.06%
Intex Shanghai Company Limited	Hong Kong-Shanghai Venue Management	30.00%
	(Zhengzhou) Limited
Kawick Enterprises Ltd	Pearls Limited	40.00%
Kly (Nominees) Ltd	Super Value Development Limited	20.00%
Kly (Nominees) Ltd	Top Flash Investments Limited	20.00%
Lai Sun Development Company Limited	Easlin Corporation	20.00%
Leader Civil Engineering Corporation	Hip Hing - Leader JV Limited	33.33%
Limited
LifeTech International Limited	New World LifeTech limited	20.00%
Longreach Shipping Limited	Mass Profits Limited	20.00%
Magic Pioneer Limited	Two-Way Communications Limited	10.00%
Melbourne Enterprises Limited	Billion Park Investment Limited	14.29%
Merino Holdings Limited	New World ZGM Limited	20.00%
Mr. Huang Xiaogang	Shanxi Xintongda Culture Propagation Co.,	20.00%
	Ltd.
Mr. Li Chau-Ming, Peter	Apex-Pro Systems Limited	14.90%
Mr. Philip Yuen	Henry Bon Enterprises Company Limited	10.00%

– 35 –

GENERAL INFORMATION

APPENDIX

		Approximate
		percentage of
Name of entity	Name of member of the Group	interest held
Mr. Tian Tao	Beijing Xintong Media & Cultural	29.90%
	Development Co. Ltd.
Mr. Wang Jiquan	Beijing Xindu Fengfan Advertising Co.,	10.00%
	Ltd.
Ms. Carmen Leung	Henry Bon Enterprises Company Limited	10.00%
Ms. Yao Baozhen	Beijing Xindu Fengfan Advertising Co.,	20.00%
	Ltd.
Ms. Yao Baozhen	Beijing Xintong New Vision Media &	20.00%
	Advertising Co., Ltd.
Ms. Yao Baozhen	Beijing Xintong Sinologue Media &	25.10%
	Advertising Co., Ltd.
Nanjing Port Authority	Nanjing Huining Wharfs Co., Ltd.	45.00%
Nice Touch Investments Limited	New World Hotel Management (BVI)	29.50%
	Limited
Open Door Investments Ltd	Realistic Reward Limited	30.00%
Panion Holdings Ltd.	NoveMed Group Ltd.	15.00%
Polarway Investment Ltd	Highness Land Investment Company	40.00%
	Limited
Shenyang Zhengju Enterprises Ltd.	New World (Shenyang) Property	10.00% (Note)
	Development Limited
Shenyang Zhengju Enterprises Ltd.	New World (Shenyang) Property	10.00% (Note)
	Development No. 2 Limited
Shenyang Zhengju Enterprises Ltd.	New World (Shenyang) Property	10.00% (Note)
	Development No. 3 Limited
Shenyang Zhengju Enterprises Ltd.	New World (Shenyang) Property	10.00% (Note)
	Development No. 4 Limited
Shenyang Zhengju Enterprises Ltd.	New World (Shenyang) Property	10.00% (Note)
	Development No. 5 Limited
Shenyang Zhengju Enterprises Ltd.	New World (Shenyang) Property	10.00% (Note)
	Development No. 6 Limited
Shine Vision International Limited	Carpark Solution Enterprise Limited	35.00%
Sidney Consultants Limited	auto22.com Holdings Limited	15.70%
Space Enterprises Limited	Mega Choice Holdings Limited	24.25%
Sparkle Spirit Limited	Milestone Overseas Limited	16.67%
Stanford Ocean Limited	Two-Way Communications Limited	10.00%
Stanley Enterprises Limited	Ramada Property Ltd.	25.00%
Surely Limited	Mega Choice Holdings Limited	10.36%
Tacko Hotel (Zhanjiang) Ltd	New World Tacko (Xian) Limited	30.00%
Taiyuan Tongtai Industry & Commerce	Taiyuan Xintai Highways Limited	40.00%
General Company
Tenswin Limited	Boxwin Limited	16.58%
Tianjin Expressway Investment &	Tianjin Xindi Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinlong Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinlu Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinming Expressway Company	33.38%
Construction Development	Limited
Corporation

– 36 –

APPENDIX

GENERAL INFORMATION

		Approximate
		percentage of
Name of entity	Name of member of the Group	interest held
Tianjin Expressway Investment &	Tianjin Xinqing Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinquan Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinsen Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinshi Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinsi Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xintong Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xintuo Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinxiang Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinyan Expressway Company	33.38%
Construction Development	Limited
Corporation
Tianjin Expressway Investment &	Tianjin Xinzhan Expressway Company	33.38%
Construction Development	Limited
Corporation
Wah Tai Company Limited	Silver Bloom Company Limited	20.00%
Wellington Equities Inc.	New World ZGM Limited	15.00%
Wellington Equities Inc.	Keenwise Technology Limited	15.00%
Winteam Holdings Limited	China Step Limited	30.00%
Wiseful Engineering Group Limited	Kentfull Engineering Company Limited	40.00%
Wuhan Airport Road Industrial	Wuhan Airport Road Development Ltd.	33.33%
Development Co. Ltd.
Xiamen COSCO International Container	Xiamen Xinyuan Container Terminal Co.,	30.00%
Freight Station & Transportation Co.,	Ltd.
Ltd.
上海豐收投資有限公司	濟南匯泉新世界置業有限公司	30.00%
云南葯材有限公司	云南新云三七產業有限公司	14.00%
北京市萬勝全物業管理中心	Beijing Kiu Lok Property Management	40.00%
	Services Co., Ltd.
北京商建房地產開發有限公司	北京新世界商建房地產開發有限公司	10.00%
北京勵升豪廷房地產顧問	北京新世界商建房地產開發有限公司	15.00%
有限公司
成都深港石化有限公司	Chengdu Xinyi Real Estate Development	20.00%
	Co., Ltd.
佛山市祥褔房地產開發有限公司	Foshan Country Club Real Estate	10.00% (Note)
	Development Limited
武漢市國營漢口魚場	Wuhan Xinhan Development Co., Limited	30.00% (Note)
武漢武建鼎安安裝工程有限公司	Trihan Engineering (Wuhan) Company	49.00%
	Limited
珠海市萬泉河科技發展有限公司	深圳香島園花卉有限公司	20.00%

– 37 –

GENERAL INFORMATION

APPENDIX

		Approximate
		percentage of
Name of entity	Name of member of the Group	interest held
珠海國際經濟技術合作公司	珠海市景福工程有限公司	20.00%
	(In members’ voluntary liquidation)
深圳市高戍達機械電子有限公司	襄樊高戍達停車場管理有限公司	35.00%
深圳瑋鵬實業有限公司	Shenzhen Topping Real Estate	10.00%
	Development Co., Limited
順德市誠業建築集團公司	佛山市順德區協興建築工程有限公司	15.00%
溫州港務集團有限公司	Wenzhou Zhuangyuan Ao New World	45.00%
	International Terminals Company
	Limited
廣州市機電安裝公司	Triguang Engineering (Guang Zhou)	49.00%
	Company Limited
濟南陽光置業有限公司	Jinan New World Sunshine Development	27.00%
	Co., Ltd.

Note: referred to as profit sharing ratio as set out in the relevant co-operative joint venture contract

• (d) Save as disclosed above, so far as is 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 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, or, had a direct or indirect interests amounting to 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any members of the Group.

4. DIRECTORS’ SERVICE CONTRACTS

None of the Directors has a service contract with any member of the Group which is not determinable by the relevant member of the Group within one year without payment of compensation other than statutory compensation.

5. MATERIAL ADVERSE CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 30 June 2006, being the date to which the latest published audited financial statements of the Company were made up.

– 38 –

GENERAL INFORMATION

APPENDIX

6. COMPETING INTEREST

As at the Latest Practicable Date, the following Directors had interests in the following businesses which were considered to compete or were likely to compete, either directly or indirectly, with the businesses of the Group other than those businesses where the Directors were appointed as Directors to represent the interests of the Company and/or the Group pursuant to the Listing Rules:

	Businesses which	were considered
	to compete or likely to compete with
	the businesses	of the Group	Nature of interest of the
Name of Director	Name of entity	Description of businesses	Director in the entity
Dato’ Dr. Cheng Yu Tung	Shun Tak Holdings Limited	Property investment and	Director
	(‘‘Shun Tak’’) group of	development, ferry
	companies	services and hotel related
		services
	CTF Enterprises group of	Property investment and	Director
	companies	development and
		transport
	Melbourne Enterprises	Property investment	Director
	Limited (‘‘Melbourne’’)
	group of companies
	Lifestyle International	Department stores operations	Director
	Holdings Ltd.	and property investment
	(‘‘Lifestyle’’) group of
	companies
Dr. Cheng Kar Shun, Henry	Shun Tak group of	Property investment and	Director
	companies	development, ferry
		services and hotel related
		services
	CTF Enterprises group of	Property investment and	Director
	companies	development and
		transport
	HKR International Limited	Property investment and	Director
	(‘‘HKR’’) group of	development and property
	companies	management
	Lifestyle group of companies	Department stores operations	Director
		and property investment
Dr. Sin Wai Kin, David	Miramar Hotel & Investment	Property investment and	Director
	Company Limited	hotel operation
	(‘‘Miramar’’) group of
	companies
Mr. Cheng Chi Kong, Adrian	Grandhope Properties	Property investment	Director and shareholder
	Limited
	Cheung Hung Development	Property investment and	Director
	(Holdings) Limited	development

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APPENDIX

GENERAL INFORMATION

	Businesses which	were considered
	to compete or likely to compete with
	the businesses	of the Group	Nature of interest of the
Name of Director	Name of entity	Description of businesses	Director in the entity
Mr. Cheng Yue Pui	CTF Enterprises group of	Property investment and	Director
	companies	development and
		transport
	Melbourne group of	Property investment	Director
	companies
Mr. Cheng Kar Shing, Peter	CTF Enterprises group of	Property investment and	Director
	companies	development and
		transport
	Long Vocation Investments	Property investment	Director and shareholder
	Limited group of
	companies
Mr. Chow Kwai Cheung	Flying Dragon Properties	Property investment	Director and shareholder
	Limited
	Global Agents Ltd.	Investment holding	Director and shareholder
Mr. Ho Hau Hay, Hamilton	CITIC Pacific Limited	Property development and	Director
		investment,
		telecommunications and
		operation of power station
		and tunnel and financial
		services
	Honorway Investments	Property development and	Director and shareholder
	Limited	investment
	Tak Hung (Holding)	Property development and	Director and shareholder
	Company Limited	investment
Mr. Liang Cheung Biu,	Bermuda Investments	Property investment	Director
Thomas	Limited
	Greenwich Investors Limited	Property investment	Director
	Lambda Enterprises Limited	Property management	Director
	Miramar group of companies	Property investment and	Director
		hotel operation
	Notting Hill Development	Property investment	Director
	Limited
	Ramadon Company Limited	Property investment	Director
	Roundtree Property	Property investment	Director
	Company Limited

– 40 –

GENERAL INFORMATION

APPENDIX

	Businesses which	were considered
	to compete or likely to compete with
	the businesses	of the Group	Nature of interest of the
Name of Director	Name of entity	Description of businesses	Director in the entity
Dr. Cha Mou Sing, Payson	HKR group of companies	Property investment and	Director and shareholder
		development, and
		property management
	Hanison Construction	Construction, property	Director and shareholder
	Holdings Limited group	investment and
	of companies	development
Mr. Yeung Ping Leung,	Miramar group of companies	Property investment and	Director
Howard		hotel operation
Mr. Lee Luen Wai, John	Lippo Limited	Property investment,	Director
		development and
		management
	Lippo China Resources	Property investment,	Director
	Limited	development and
		management
	Hongkong Chinese Limited	Property investment,	Director
		development and
		management

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and their respective associates was considered to have interest in any business apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with that of the Group.

7. QUALIFICATION AND CONSENT OF EXPERT

CIMB-GK is a corporation licensed to carry on type 1 (dealings in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities under the SFO.

CIMB-GK has given and has not withdrawn its written consent to the issue of this circular with the reference to its name and its letter in the form and context in which they respectively appear.

As at the Latest Practicable Date, CIMB-GK did not have any shareholding, directly or indirectly, in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for shares in any member of the Group.

As at the Latest Practicable Date, CIMB-GK did not have any interest, direct or indirect, in any assets which since 30 June 2006, the date to which the latest published audited financial statements of the Company were made up, have 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.

8. DOCUMENT AVAILABLE FOR INSPECTION

A copy of the Share Purchase Agreement will be available for inspection at the office of the Company in Hong Kong at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong during normal business hours from the date of this circular up to and including 5 June 2007 and at the EGM.

– 41 –

NOTICE OF EGM

==> picture [231 x 41] intentionally omitted <==

(incorporated in Hong Kong with limited liability)

(stock code: 0017)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of New World Development Company Limited (the ‘‘Company’’) will be held at Meeting Room 301B (New Wing), Hong Kong Convention & Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Tuesday, 5 June 2007 at 12: 30 p.m. for the purpose of considering and, if thought fit, with or without amendments, passing the following resolution as an ordinary resolution:

ORDINARY RESOLUTION

‘‘THAT

• (a) the acquisition by NWS Financial Management Services Limited, an indirect non-whollyowned subsidiary of the Company, of 246,986,763 shares in Taifook Securities Group Limited pursuant to the terms and conditions of the Share Purchase Agreement (as defined in the circular of the Company dated 18 May 2007 despatched to the shareholders of the Company), a copy of which has been produced to the meeting and marked ‘‘A’’ and initialled by the chairman of the meeting for the purpose of identification, together with other transactions contemplated under the Share Purchase Agreement be and are hereby approved;

• (b) the directors of the Company (the ‘‘Directors’’) be and are hereby authorised, for and on behalf of the Company, to take all steps necessary or expedient in their opinion to implement and/or give effect to the terms of the Share Purchase Agreement and all transactions contemplated thereunder and all other matters incidental thereto or in connection therewith; and

• (c) the Directors be and are hereby authorised, for and on behalf of the Company, to execute all such other documents, instruments and agreements and to do all such acts or things deemed by them to be incidental to, ancillary to or in connection with the matters contemplated under the Share Purchase Agreement and to make such variation, amendment and waiver of any matters relating thereto or in connection therewith which in the opinion of the Directors is not of a material nature and is in the interests of the Company.’’

Yours faithfully, By order of the Board Leung Chi Kin, Stewart Company Secretary

Hong Kong, 18 May 2007

– 42 –

NOTICE OF EGM

Registered office: 30th Floor New World Tower 18 Queen’s Road Central Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more than one proxy to attend and, on a poll, vote in his stead. A proxy need not be a member of the Company.

2. To be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof, must be deposited at the registered office of the Company at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong not later than 48 hours before the time appointed for the meeting or any adjournment thereof (as the case may be).

3. Delivery of an instrument appointing a proxy should not preclude member from attending and voting in person at the above meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.

4. In the case of joint holders of a share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she/it were solely entitled thereto to. If more than one of such joint holders are present at the above meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

5. Voting on the above resolution will be taken by poll.

6. As at the date of this notice: (a) the executive directors of the Company are Dato’ Dr. Cheng Yu Tung, Dr. Cheng Kar Shun, Henry, Dr. Sin Wai Kin, David, Mr. Liang Chong Hou, David, Mr. Leung Chi Kin, Stewart and Mr. Cheng Chi Kong, Adrian; (b) the non-executive directors of the Company are Mr. Cheng Yue Pui, Mr. Cheng Kar Shing, Peter, Mr. Chow Kwai Cheung, Mr. Ho Hau Hay, Hamilton and Mr. Liang Cheung Biu, Thomas; and (c) the independent non-executive directors of the Company are Lord Sandberg, Michael, Mr. Yeung Ping Leung, Howard, Dr. Cha Mou Sing, Payson (alternate director to Dr. Cha Mou Sing, Payson: Mr. Cha Mou Zing, Victor) and Mr. Lee Luen Wai, John.

– 43 –