Galaxy Entertainment Group Limited - Proxy Solicitation & Information Statement 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in New World Development Company Limited (新世界發展有限公司), you should at once hand this circular and the accompanying form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(incorporated in Hong Kong with limited liability)

(Stock Code: 0017)

MAJOR TRANSACTION IN RELATION TO VOLUNTARY CONDITIONAL CASH OFFERS TO ACQUIRE ALL THE OFFER SHARES AND TO CANCEL ALL THE OUTSTANDING NWCL OPTIONS IN RELATION TO NEW WORLD CHINA LAND LIMITED AND NOTICE OF EGM

Financial Adviser to the Company and the Offeror

Independent Financial Adviser to the Board and the Offeror Board

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ‘‘Definitions’’ in this circular.

A letter from the Board is set out on pages 7 to 29 of this circular. A letter from Quam Capital to the Board and the Offeror Board is set out on pages 30 to 73 of this circular.

A notice convening the EGM to be held at Meeting Room S421 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Friday, 18 March 2016 at 11:15 a.m. (or any adjournment thereof) is set out on pages 361 to 363 of this circular. A form of proxy is also enclosed. Whether or not you are able to attend the EGM or any adjourned 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 Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

29 February 2016

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Letter from Quam Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Appendix I — Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	74
Appendix II — Unaudited Pro Forma Financial Information of the Group . . . . . . . .	81
Appendix III — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
Appendix IV — Composite Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	104
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	361

– i –

DEFINITIONS

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

‘‘acting in concert’’

has the meaning ascribed to it in the Takeovers Code

‘‘Adjusted NAV’’
adjusted unaudited consolidated net asset value of the NWCL Group as at 31 December 2015 as set out in the section headed ‘‘V. Property Interests and Adjusted Net Asset Value’’ of ‘‘Appendix II — Financial Information of the NWCL Group’’ to the Composite Document
‘‘Announcement Date’’
Wednesday, 6 January 2016, being the date of the Joint Announcement
‘‘Applicable Percentage Ratios’’
the percentage ratios (all as defined in Rule 14.04(9) of the Listing Rules) applicable to the Offers in accordance with Chapters 14 and 14A of the Listing Rules
‘‘associates’’
has the meaning ascribed to it in the Listing Rules
‘‘Board’’
the board of Directors
‘‘Business Day’’
a day on which the Stock Exchange is open for the transaction of business
‘‘Cayman Islands Companies Law’’
the Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands
‘‘close associate’’
has the meaning ascribed to it in the Listing Rules
‘‘Closing Date’’
Monday, 21 March 2016, being the first closing date of the Share Offer or any subsequent closing date as may be announced by the Company and the Offeror and approved by the Executive
‘‘Company’’

New World Development Company Limited (新世界發展有限公司), a company incorporated in Hong Kong with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 0017), and the parent company of NWCL

– 1 –

DEFINITIONS

‘‘Composite Document’’
the composite offer and response document dated 27 February 2016 in respect of the Offers jointly issued by the Company, the Offeror and NWCL in accordance with the Takeovers Code, as may be revised or supplemented as appropriate, a copy of which is attached in Appendix IV to this circular for information only
‘‘Condition(s)’’
the condition(s) of the Offers, as set out under the section headed ‘‘Conditions of the Offers’’ in the ‘‘Letter from the Board’’ in this circular
‘‘Deed of Undertaking’’
a deed of undertaking executed between an NWCL Optionholder and NWCL as referred to in the section headed ‘‘Shareholding Structure of NWCL and the Offers — Option Offer’’ in the ‘‘Letter from the Board’’ in this circular
‘‘Director(s)’’ the director(s) of the Company
‘‘Disinterested NWCL Shares’’
NWCL Shares other than those which are owned by the Offeror or the Offeror Concert Parties
‘‘Disposal(s)’’
the disposal(s) of certain subsidiaries and joint ventures by NWDCL to Shengyu for an aggregate consideration of approximately RMB20,800 million (subject to adjustments), further details of which are set out in the joint announcement of the Company and NWCL dated 2 December 2015, the circular of NWCL dated 23 December 2015, the joint announcement of the Company and NWCL dated 29 December 2015 and the circulars of each of the Company and NWCL dated 19 January 2016
‘‘EGM’’
the extraordinary general meeting of the Company to be held at Meeting Room S421 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Friday, 18 March 2016 at 11:15 a.m. (or any adjournment thereof), the notice of which is set out on pages 361 to 363 of this circular
‘‘Evergrande’’
Evergrande Real Estate Group Limited (stock code: 3333), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange, being the ultimate holding company of Shengyu

– 2 –

DEFINITIONS

‘‘Executive’’
the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
‘‘Great Worth’’ Great Worth Holdings Limited, a non-wholly owned subsidiary of the Company
‘‘Group’’ collectively the Company and its subsidiaries
‘‘High Earnings’’ High Earnings Holdings Limited, a wholly owned subsidiary of NWS
‘‘HK$’’ Hong Kong dollar(s), the lawful currency of Hong Kong
‘‘Hong Kong’’
the Hong Kong Special Administrative Region of the PRC
‘‘HSBC’’
The Hongkong and Shanghai Banking Corporation Limited, being the financial adviser to the Company and the Offeror in relation to the Offers, a registered institution under the SFO, registered to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO and a licensed bank under the Banking Ordinance (Chapter 155 of the laws of Hong Kong)
‘‘Independent NWCL Shareholders’’
NWCL Shareholders excluding the Offeror, the Company and the Offeror Concert Parties. For the avoidance of doubt, the Independent NWCL Shareholders include any member of the HSBC group in respect of NWCL Shares of its nondiscretionary investment clients where such client (a) has control over whether to tender acceptances to the Share Offer in respect of those NWCL Shares, (b) if acceptances of the Share Offer in respect of those NWCL Shares are to be tendered, gives instructions to tender them, and (c) is not the Offeror or any of the Offeror Concert Parties
‘‘Joint Announcement’’
the announcement dated 6 January 2016 jointly made by the Company, the Offeror and NWCL in relation to the Offers
‘‘Knight Frank’’
Knight Frank Petty Limited, the independent property valuer appointed by NWCL
‘‘Last Trading Day’’
Thursday, 31 December 2015, being the last trading day of NWCL Shares prior to the issue of the Joint Announcement

– 3 –

DEFINITIONS

‘‘Latest Practicable Date’’

Wednesday, 24 February 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular

‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange
‘‘NWCL’’
New World China Land Limited, a company incorporated in the Cayman Islands with limited liability and a non-wholly owned subsidiary of the Company, the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 0917)
‘‘NWCL Board’’ the board of directors of NWCL
‘‘NWCL Group’’ collectively NWCL and its subsidiaries
‘‘NWCL Independent Board Committee’’
the independent board committee of NWCL, comprising Dr. Cheng Wai-Chee, Christopher, Hon. Tien Pei-Chun, James and Mr. Ip Yuk-Keung, Albert, established by the NWCL Board to make a recommendation to the Independent NWCL Shareholders and the NWCL Optionholders in respect of the Offers
‘‘NWCL Offer Shareholders’’ registered holders for the time being of the Offer Shares
‘‘NWCL Option(s)’’
the outstanding, vested and unvested, share option(s), relating to NWCL Share(s), granted under the NWCL Share Option Schemes from time to time
‘‘NWCL Optionholder(s)’’

the holder(s) of the NWCL Option(s)

‘‘NWCL Share Option Schemes’’
the share option schemes adopted by NWCL on 26 November 2002 and 22 November 2011, respectively
‘‘NWCL Shareholder(s)’’

registered holder(s) for the time being of the NWCL Share(s)

‘‘NWCL Shares’’
ordinary shares of HK$0.10 each in the issued share capital of NWCL
‘‘NWDCL’’

New World Development (China) Limited, a company incorporated in Hong Kong with limited liability, a wholly owned subsidiary of NWCL and the vendor in relation to the Disposals

– 4 –

DEFINITIONS

‘‘NWDS’’ New World Department Store China Limited, a non-wholly owned subsidiary of the Company and the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 0825)
‘‘NWS’’
NWS Holdings Limited, a non-wholly owned subsidiary of the Company and the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 0659)
‘‘Offer Shares’’ NWCL Shares, other than those already held by the Offeror and the Company
‘‘Offeror’’ Easywin Enterprises Corporation Limited (義榮企業有限公司), a company incorporated in Hong Kong with limited liability, being a wholly owned subsidiary of the Company
‘‘Offeror Board’’ the board of directors of the Offeror
‘‘Offeror Concert Parties’’ parties acting in concert with the Offeror in relation to NWCL (except for members of the HSBC group which are exempt principal traders and/or exempt fund managers, in each case recognised by the Executive as such for the purposes of the Takeovers Code) under the Takeovers Code, and ‘‘Offeror Concert Party’’ shall mean any one of them
‘‘Offers’’ the Share Offer and the Option Offer
‘‘Option Offer’’ the voluntary conditional cash offer by HSBC on behalf of the Offeror to the NWCL Optionholders in compliance with Rule 13 of the Takeovers Code to cancel all the outstanding NWCL Options held by the NWCL Optionholders in accordance with the terms and conditions set out in the Composite Document and the Form of Option Offer Acceptance (as defined in the Composite Document), and any subsequent revision or extension of such offer
‘‘Option Offer Price’’ the price at which the Option Offer is made, which is the ‘‘seethrough’’ price being the Share Offer Price minus the relevant exercise price of the NWCL Option for the cancellation of each NWCL Option held by the NWCL Optionholders
‘‘PRC’’
the People’s Republic of China (for the purpose of this circular, excluding Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan)

– 5 –

DEFINITIONS

‘‘Previous Proposal’’ a scheme of arrangement used in the Offeror’s privatisation proposal for NWCL which lapsed in June 2014 ‘‘Quam Capital’’ Quam Capital Limited, a licensed corporation permitted to carry out type 6 (advising on corporate finance) regulated activities under the SFO, acting as the independent financial adviser to the Board and the Offeror Board pursuant to Rule 2.4 of the Takeovers Code in relation to the Offers ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘SFC’’ the Securities and Futures Commission of Hong Kong ‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)

‘‘Share Offer’’ the voluntary conditional cash offer by HSBC on behalf of the Offeror to acquire all of the Offer Shares in accordance with the terms and conditions set out in the Composite Document and the Form of Share Offer Acceptance (as defined in the Composite Document), and any subsequent revision or extension of such offer
‘‘Share Offer Price’’ the price at which the Share Offer is made, being HK$7.80 per Offer Share
‘‘Shareholders’’ the shareholders of the Company ‘‘Shares’’ ordinary shares of the Company ‘‘Shengyu’’ Shengyu (BVI) Limited, a company incorporated in the British Virgin Islands with limited liability, which is an indirect wholly owned subsidiary of Evergrande and the purchaser in relation to the Disposals
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘subsidiaries’’ has the meaning ascribed to it in the Listing Rules ‘‘Takeovers Code’’ the Code on Takeovers and Mergers published by the SFC and administered by the Executive
‘‘US$’’ United States dollars, the lawful currency of the United States of America
‘‘%’’ per cent

– 6 –

LETTER FROM THE BOARD

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(incorporated in Hong Kong with limited liability)

(Stock Code: 0017)

Executive Directors:

Dr. Cheng Kar-Shun, Henry GBS (Chairman)
Dr. Cheng Chi-Kong, Adrian
(Executive Vice-chairman and Joint General Manager)

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

Mr. Chen Guanzhan (Joint General Manager)
Ms. Ki Man-Fung, Leonie SBS JP
Mr. Cheng Chi-Heng
Ms. Cheng Chi-Man, Sonia
Mr. Au Tak-Cheong

Non-executive Directors:

Mr. Doo Wai-Hoi, William JP (Non-executive Vice-chairman)

Mr. Cheng Kar-Shing, Peter

Independent Non-executive Directors:

Mr. Yeung Ping-Leung, Howard
Mr. Cha Mou-Sing, Payson JP
(Alternate director to Mr. Cha Mou-Sing, Payson:
Mr. Cha Mou-Zing, Victor)
Mr. Ho Hau-Hay, Hamilton
Mr. Lee Luen-Wai, John BBS JP
Mr. Liang Cheung-Biu, Thomas

29 February 2016

To the Shareholders and, for information purpose only, the holders of the outstanding share options of the Company

Dear Sir or Madam,

MAJOR TRANSACTION

IN RELATION TO VOLUNTARY CONDITIONAL CASH OFFERS TO ACQUIRE ALL THE OFFER SHARES AND

TO CANCEL ALL THE OUTSTANDING NWCL OPTIONS IN RELATION TO NEW WORLD CHINA LAND LIMITED

– 7 –

LETTER FROM THE BOARD

INTRODUCTION

Reference is made to the Joint Announcement whereby the Offeror Board, the Board and the NWCL Board jointly announced that HSBC, on behalf of the Offeror, a wholly owned subsidiary of the Company, intended to make a voluntary conditional cash offer to acquire all of the Offer Shares, and pursuant to Rule 13 of the Takeovers Code, extend an appropriate offer to cancel all the outstanding NWCL Options.

The Offeror is making the Share Offer by way of a general offer, rather than a scheme of arrangement as used in the Previous Proposal. This is because the Cayman Islands, unlike Hong Kong, still requires all schemes of arrangement to be approved by a majority in number of shareholders present and voting in person or by proxy at the relevant shareholders’ meeting to consider a proposed scheme of arrangement (a so-called ‘‘head count’’ test). The Offeror believes that it is more equitable to the Independent NWCL Shareholders if the outcome of the Share Offer is determined solely on the basis of the level of acceptances of the Share Offer in terms of NWCL Shares, and in this regard notes that in the Previous Proposal 99.84% of the votes cast at the relevant shareholders’ meeting were in favour of the Previous Proposal but that the Previous Proposal did not proceed due solely to the ‘‘head count’’ test. The Offeror believes that the outcome of the Previous Proposal did not reflect the preference of the majority of the Independent NWCL Shareholders by reference to the value of NWCL Shares held.

The purpose of this circular is to provide you with, among other things, (a) further information with regard to the Offers; (b) a letter from Quam Capital in relation to the Offers; (c) a notice of the EGM; and (d) other information required by the Listing Rules for the Shareholders to consider and, if thought fit, approve the Offers at the EGM.

If you are also a NWCL Offer Shareholder or a NWCL Optionholder, this circular is not, and should not be construed to be, a solicitation or request for acceptances in respect of the securities of the Offers, and you should have received the Composite Document dated 27 February 2016 for such purposes.

THE OFFERS

The Offers are made by HSBC on behalf of the Offeror in compliance with the Takeovers Code on the basis set out below.

Share Offer:

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$7.80 in cash

The Share Offer Price will not be increased, and the Offeror does not reserve the right to do so.

The Share Offer is extended to all NWCL Offer Shareholders (including certain Offeror Concert Parties).

– 8 –

LETTER FROM THE BOARD

Option Offer:

For cancellation of each NWCL Option . . . . . . . . . . . . . . the Option Offer Price in cash

The relevant exercise price applicable to each NWCL Option ranges from HK$2.45 to HK$5.42 and, accordingly, the Option Offer Price ranges from HK$2.38 to HK$5.35 per NWCL Option.

The Option Offer Price will not be increased, and the Offeror does not reserve the right to do so.

The Option Offer is extended to all NWCL Optionholders in accordance with the Takeovers Code.

Comparisons of value

Closing prices of NWCL Shares

The Share Offer Price of HK$7.80 represents:

(i) a premium of approximately 25.6% over the closing price of HK$6.21 per NWCL Share as quoted on the Stock Exchange on the Last Trading Day;
(ii) a premium of approximately 28.5% over the average closing price of approximately HK$6.07 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 5 trading days immediately prior to and including the Last Trading Day;
(iii) a premium of approximately 29.4% over the average closing price of approximately HK$6.03 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 10 trading days immediately prior to and including the Last Trading Day;
(iv) a premium of approximately 40.8% over the average closing price of approximately HK$5.54 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 30 trading days immediately prior to and including the Last Trading Day;
(v) a premium of approximately 45.8% over the average closing price of approximately HK$5.35 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 60 trading days immediately prior to and including the Last Trading Day;
(vi) a premium of approximately 56.9% over the average closing price of approximately HK$4.97 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Day; and
(vii) a premium of approximately 4.4% over the closing price of HK$7.47 per NWCL Share as quoted on the Stock Exchange on the Latest Practicable Date.

– 9 –

LETTER FROM THE BOARD

Net asset value per NWCL Share

The Share Offer Price of HK$7.80 represents:

(i) a premium of approximately 11.5% over the audited consolidated net asset value per NWCL Share of approximately HK$6.995 as at 30 June 2015, based on the total number of issued NWCL Shares as at 30 June 2015;
(ii) a premium of approximately 14.6% over the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015, based on the total number of issued NWCL Shares as at 31 December 2015; and
(iii) a discount of approximately 29.4% to the Adjusted NAV per NWCL Share of approximately HK$11.05 as at 31 December 2015, based on the total number of issued NWCL Shares as at the Latest Practicable Date.

As shown in NWCL’s audited consolidated financial statements as at 30 June 2015 and unaudited condensed consolidated financial statements as at 31 December 2015, a significant portion of NWCL’s assets consisted of investment properties, land use rights, properties held for development, properties under development and completed properties held for sale. The value of these assets as stated in such consolidated financial statements may or may not reflect the current market value of these assets. Furthermore, as at the Latest Practicable Date, while most of the Disposals jointly announced by the Company and NWCL had been completed, one of the Disposals has yet to be completed. The outstanding Disposal is expected to be completed before the end of March 2016, pending the completion of certain procedural matters relating to the changes in the board composition of the relevant target company arising from the Disposal. The consideration payable for the outstanding Disposal amounts to RMB2,000 million (subject to adjustments), and accounts for approximately 9.6% of the total consideration of approximately RMB20,800 million (subject to adjustments) for all the Disposals. The Disposals are accretive to NWCL’s consolidated net asset value but the impact of the Disposals has not been reflected in NWCL’s audited consolidated financial statements as at 30 June 2015 and unaudited condensed consolidated financial statements as at 31 December 2015, though they are reflected in the Adjusted NAV set out under the section headed ‘‘Property Interests and Adjusted Net Asset Value’’ in ‘‘Appendix II — Financial Information of the NWCL Group’’ to the Composite Document. Please refer to the joint announcement of the Company and NWCL dated 2 December 2015, the circular of NWCL dated 23 December 2015, the joint announcement of the Company and NWCL dated 29 December 2015 and the circulars of each of the Company and NWCL dated 19 January 2016 for details of the Disposals.

Your attention is drawn to the summary of the property valuation as set out in ‘‘Appendix III — Summary of Property Valuation of the NWCL Group’’ to the Composite Document, which in turn is set out in Appendix IV to this circular, from Knight Frank pursuant to Rule 11 of the Takeovers Code providing an updated valuation of NWCL’s properties as at 31 December 2015. Your attention is also drawn to the section headed ‘‘Property Interests and Adjusted Net Asset Value’’ as set out in ‘‘Appendix II — Financial Information of the NWCL Group’’ to the Composite Document which provides details of the Adjusted NAV, which takes into account, among other things, the impact of the Disposals, the revaluation surplus arising from valuation of the property interests and deferred taxes payable on the attributable revaluation surplus.

– 10 –

LETTER FROM THE BOARD

Value of the Offers

As at the Latest Practicable Date, there were (i) 8,701,671,754 NWCL Shares in issue, of which 5,977,019,371 NWCL Shares were held by the Offeror and the Company; and (ii) 25,544,661 outstanding NWCL Options granted under the NWCL Share Option Schemes (including 18,240,200 NWCL Options which had not been vested on the Latest Practicable Date), entitling the NWCL Optionholders to subscribe for an aggregate of 25,544,661 NWCL Shares at exercise prices ranging from HK$2.45 to HK$5.42 per NWCL Option.

Based on the Share Offer Price of HK$7.80 per Offer Share, the entire issued share capital of NWCL as at the Latest Practicable Date was valued at approximately HK$67,873.0 million.

On the assumption that no new NWCL Shares are allotted and issued pursuant to any exercise of NWCL Options prior to the close of the Offers and that the Share Offer is accepted in full by the holders of the Offer Shares and accordingly on the basis that there will be 2,724,652,383 Offer Shares, the value of the Share Offer is approximately HK$21,252.3 million and the total amount required to satisfy the cancellation of all the outstanding NWCL Options is approximately HK$89.7 million. In aggregate, the Offers are valued at approximately HK$21,342.0 million.

If all of the outstanding NWCL Options are exercised in full by the NWCL Optionholders prior to the close of the Offers, NWCL will have to issue 25,544,661 new NWCL Shares, representing approximately 0.29% of the enlarged issued share capital of NWCL. On the assumption that 25,544,661 NWCL Shares are allotted and issued pursuant to the exercise in full of all the outstanding NWCL Options prior to the close of the Offers and that the Share Offer is accepted in full by the holders of the Offer Shares and accordingly on the basis that there will be 2,750,197,044 Offer Shares (including 25,544,661 NWCL Shares allotted and issued as a result of the exercise of all the outstanding NWCL Options prior to the close of the Offers), the value of the Share Offer is approximately HK$21,451.5 million. In that case, no amount will be payable by the Offeror under the Option Offer.

Confirmation of Financial Resources

The Offeror intends to finance the cash required for the Offers from its (or the Company’s) own cash reserves. In addition, HSBC (in its capacity as lender) has granted a credit facility of HK$21,467.0 million to the Offeror which may be used to finance the cash required for the Offers in full.

HSBC, being the financial adviser to the Company and the Offeror in respect of the Offers, has stated in the Composite Document that it is satisfied that sufficient financial resources are available to the Offeror to satisfy full acceptance of the Offers in accordance with their respective terms.

– 11 –

LETTER FROM THE BOARD

Settlement of Consideration

Settlement of the consideration payable by the Offeror in respect of acceptances of each of the Offers will be made as soon as possible but in any event within seven (7) Business Days following the later of (i) the date on which the Offers become or are declared unconditional in all respects and (ii) the date of receipt of a duly completed and signed acceptance in respect of the Share Offer and Option Offer (as applicable).

No fraction of a cent will be payable and the amount of cash consideration payable to a NWCL Offer Shareholder or a NWCL Optionholder (as the case may be) who accepts the Share Offer or Option Offer (as applicable) will be rounded up to the nearest cent.

CONDITIONS OF THE OFFERS

The Share Offer is subject to the following Conditions:

(i) the Shareholders having passed an ordinary resolution at the EGM to approve the Offers;
(ii) valid acceptances of the Share Offer having been received (and not, where permitted, withdrawn) by 4:00 p.m. on the Closing Date (or such later time or date as the Offeror may, subject to the rules of the Takeovers Code, decide) in respect of such number of NWCL Shares which would result in the Offeror holding at least 90% of the Offer Shares with the further proviso that, within that holding, the Offeror would also hold at least 90% of the Disinterested NWCL Shares;
(iii) no event having occurred which would make any of the Offers or the acquisition of any of the Offer Shares under the Share Offer or the cancellation of the NWCL Options under the Option Offer void, unenforceable or illegal or prohibit implementation of any of the Offers or would impose any additional material conditions or obligations with respect to any of the Offers or any part thereof;
(iv) all necessary consents (including consents from the relevant lenders) in connection with the Offers and in connection with the withdrawal of listing of the NWCL Shares from the Stock Exchange which may be required under any existing contractual obligations of NWCL being obtained and remaining in effect;
(v) no relevant government, governmental, quasi-government, statutory or regulatory body, court or agency in Hong Kong, the Cayman Islands or any other jurisdictions having taken or instituted any action, proceeding, suit, investigation or enquiry (or enacted, made or proposed, and there not continuing to be outstanding, any statute, regulation, demand or order) that would make any of the Offers or its implementation in accordance with its terms void, unenforceable, illegal or impracticable (or which would impose any material and adverse conditions or obligations with respect to any of the Offers or its implementation in accordance with its terms); and

– 12 –

LETTER FROM THE BOARD

(vi) since the Announcement Date, there having been no material adverse change in the business, assets, financial or trading positions or prospects or conditions (whether operational, legal or otherwise) of the NWCL Group (to an extent which is material in the context of the NWCL Group taken as a whole).

The Offeror reserves the right to waive, in whole or in part, all or any of the Conditions set out above (other than Conditions (i) and (ii)).

As at the Latest Practicable Date, none of the Conditions had been fulfilled.

The Option Offer is subject to and conditional upon the Share Offer becoming or being declared unconditional in all respects.

Pursuant to Note 2 to Rule 30.1 of the Takeovers Code, the Offeror should not invoke any or all of the Conditions so as to cause the Offers to lapse unless the circumstances which give rise to the right to invoke any such Condition are of material significance to the Offeror in the context of the Offers.

In accordance with Rule 15.3 of the Takeovers Code, the Offeror must publish an announcement when the Share Offer becomes unconditional as to acceptances and when the Offers become unconditional in all respects. The Offers must also remain open for acceptance for at least fourteen (14) days after the Offers become or are declared unconditional in all respects. The NWCL Offer Shareholders and the NWCL Optionholders are reminded that the Offeror does not have any obligation to keep the Offers open for acceptance beyond this 14-day period.

WARNING: Shareholders, holders of options and securities and potential investors of the Company should be aware that the Offers are subject to the satisfaction and/or waiver (where applicable) of the Conditions. Accordingly, the Offers may or may not become unconditional. Shareholders, holders of options and securities and potential investors of the Company should therefore exercise caution when dealing in the securities of the Company. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor or other professional adviser.

PUBLIC FLOAT

According to the Listing Rules, if, upon the close of the Offers, less than 25% of the issued NWCL Shares are held by the public, or if the Stock Exchange believes that a false market exists or may exist in the trading of the NWCL Shares or there are insufficient NWCL Shares in public hands to maintain an orderly market, then the Stock Exchange will consider exercising its discretion to suspend dealings in the NWCL Shares.

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LETTER FROM THE BOARD

POSSIBLE COMPULSORY ACQUISITION AND WITHDRAWAL OF LISTING

Subject to compliance with the relevant requirements under section 88 of the Cayman Islands Companies Law, if the Offeror, within four (4) months of the posting of the Composite Document, has received valid acceptances in respect of not less than 90% of the Offer Shares and not less than 90% of the Disinterested NWCL Shares, the Offeror intends to privatise NWCL by exercising its rights to compulsorily acquire those Offer Shares not acquired by the Offeror under the Share Offer. If the Offeror does decide to exercise such rights and completes the compulsory acquisition, NWCL will become an indirect wholly owned subsidiary of the Company and an application will be made for the withdrawal of the listing of the NWCL Shares from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules.

Pursuant to Rule 15.6 of the Takeovers Code, as the Offeror has stated in the Composite Document its intention to avail itself of its powers of compulsory acquisition, the Offers may not remain open for acceptance for more than four (4) months from the date of the Composite Document, unless the Offeror has, by that time, become entitled to exercise such powers of compulsory acquisition, in which event it must do so without delay.

If the level of acceptances of the Share Offer reaches the prescribed level under the Cayman Islands Companies Law required for compulsory acquisition and the requirements of Rule 2.11 of the Takeovers Code are satisfied, dealings in the NWCL Shares will be suspended from the Closing Date up to the withdrawal of listing of the NWCL Shares from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules.

Whilst it is the intention of the Offeror to privatise NWCL, the Offeror’s ability to exercise rights of compulsory acquisition in respect of the Offer Shares is dependent on the level of acceptances of the Share Offer reaching the prescribed level under the Cayman Islands Companies Law and on the requirements of Rule 2.11 of the Takeovers Code being satisfied.

If the Offer Shares validly tendered for acceptance under the Share Offer are less than 90% of the Offer Shares or less than 90% of the Disinterested NWCL Shares, the Offers will not become unconditional and will lapse and NWCL will remain listed on the Stock Exchange.

SHAREHOLDING STRUCTURE OF NWCL AND THE OFFERS

As at the Latest Practicable Date, the authorised share capital of NWCL was HK$3,000,000,000.00 divided into 30,000,000,000 NWCL Shares, and the issued share capital of NWCL was HK$870,167,175.40 divided into 8,701,671,754 NWCL Shares. There were no preference shares of NWCL in issue.

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LETTER FROM THE BOARD

Share Offer

On the assumption that no NWCL Options are exercised before the close of the Offers and there is no other change in the shareholding of NWCL before the completion of the Offers, the table below sets out the shareholding structure of NWCL as at the Latest Practicable Date and immediately upon the completion of the Offers, assuming that the holders of at least 90% of the Offer Shares and at least 90% of the Disinterested NWCL Shares tender their acceptances of the Share Offer and the remaining Offer Shares (if any) are compulsorily acquired by the Offeror:

As at the Latest Practicable Date Number of NWCL Shares % 255,041,727 2.93 5,721,977,644 65.76 5,977,019,371 68.69 93,073,738 1.07 22,508,064 0.26 22 0.00 2,077,922 0.02 1,587,130 0.02 935,066 0.01 699,136 0.01 2,571,663 0.03 517,500 0.01 45,000 0.00 124,015,241 1.43 5,845,992,885 67.19 6,101,034,612 70.12 2,600,637,142 29.88 8,701,671,754 100.00 2,724,652,383 31.31	Immediately upon the completion of the Offers (assuming that no NWCL Options are exercised and there is no other change in the shareholding of NWCL)	Immediately upon the completion of the Offers (assuming that no NWCL Options are exercised and there is no other change in the shareholding of NWCL)
Number of NWCL Shares 255,041,727 5,721,977,644 5,977,019,371 93,073,738 22,508,064 22 2,077,922 1,587,130 935,066 699,136 2,571,663 517,500 45,000 124,015,241 5,845,992,885 6,101,034,612 2,600,637,142 8,701,671,754 2,724,652,383	Number of NWCL Shares 2,979,694,110 5,721,977,644 8,701,671,754 — — — — — — — — — — — 5,721,977,644 8,701,671,754 — 8,701,671,754 —	% 34.24 65.76
		100.00
		— — — — — — — — — —
		—
		65.76
		100.00
		—
		100.00
		—

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LETTER FROM THE BOARD

Notes:

The Offeror is wholly owned by the Company, which is acting in concert with the Offeror in relation to NWCL. NWCL Shares held by the Company will not form part of the Offer Shares and will not be acquired by the Offeror under the Share Offer.
High Earnings is wholly owned by NWS. NWS is a non-wholly owned subsidiary of the Company. The shares of NWS are listed on the Stock Exchange with the stock code 0659. High Earnings is acting in concert with the Offeror in relation to NWCL.
Great Worth is a non-wholly owned subsidiary of the Company and is acting in concert with the Offeror in relation to NWCL.
HSBC is the financial adviser to the Company and the Offeror in respect of the Offers. Accordingly, HSBC and relevant members of the HSBC group which hold NWCL Shares are presumed to be acting in concert with the Offeror in relation to NWCL in accordance with class 5 of the definition of ‘‘acting in concert’’ under the Takeovers Code (except in respect of NWCL Shares held by exempt principal traders or exempt fund managers, in each case recognised by the Executive as such for the purpose of the Takeovers Code and also excluding NWCL Shares held on behalf of non-discretionary investment clients of the HSBC group).
Dr. Cheng Kar-Shun, Henry, who is a director of the Offeror, an executive Director and an executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Mr. Cheng Kar-Shing, Peter, who is a non-executive Director and an executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Dr. Cheng Chi-Kong, Adrian, who is an executive Director and an executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Mr. Lee Luen-Wai, John, who is an independent non-executive Director and an independent non-executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Mr. Doo Wai-Hoi, William, who is a non-executive Director, is acting in concert with the Offeror in relation to NWCL.
Mr. William Junior Guilherme Doo, who is the son of Mr. Doo Wai-Hoi, William, a non-executive Director, and his spouse are acting in concert with the Offeror in relation to NWCL.
Ms. Ki Man-Fung, Leonie, who is an executive Director, is acting in concert with the Offeror in relation to NWCL.
The total number of NWCL Shares (assuming that no NWCL Options are exercised before the close of the Offers and that there is no other change in the shareholding of NWCL before the completion of the Offers) minus the aggregate number of NWCL Shares held by the Offeror and the Company equals the total number of Offer Shares (on the same assumptions).
All percentages in the above table are approximations.

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LETTER FROM THE BOARD

On the assumption that new NWCL Shares are allotted and issued pursuant to the exercise in full of all NWCL Options before the close of the Offers and that there is no other change in the shareholding of NWCL before the completion of the Offers, the table below sets out the shareholding structure of NWCL before the completion of the Offers and immediately upon the completion of the Offers, assuming that the holders of at least 90% of the Offer Shares and at least 90% of the Disinterested NWCL Shares tender their acceptances of the Share Offer and the remaining Offer Shares (if any) are compulsorily acquired by the Offeror:

Before the completion of the Offers (assuming that new NWCL Shares are allotted and issued pursuant to the exercise in full of all NWCL Options before the close of the Offers and there is no other change in the shareholding of NWCL before the completion of the Offers) Number of NWCL Shares % 255,041,727 2.92 5,721,977,644 65.56 5,977,019,371 68.48 93,073,738 1.07 22,508,064 0.26 22 0.00 2,077,922 0.02 1,587,130 0.02 935,066 0.01 699,136 0.01 2,571,663 0.03 517,500 0.01 45,000 0.00 124,015,241 1.43 5,845,992,885 66.99 6,101,034,612 69.91 2,626,181,803 30.09 8,727,216,415 100.00 2,750,197,044 31.51	Immediately upon the completion of the Offers	Immediately upon the completion of the Offers
Number of NWCL Shares 255,041,727 5,721,977,644 5,977,019,371 93,073,738 22,508,064 22 2,077,922 1,587,130 935,066 699,136 2,571,663 517,500 45,000 124,015,241 5,845,992,885 6,101,034,612 2,626,181,803 8,727,216,415 2,750,197,044	Number of NWCL Shares 3,005,238,771 5,721,977,644 8,727,216,415 — — — — — — — — — — — 5,721,977,644 8,727,216,415 — 8,727,216,415 —	% 34.44 65.56
		100.00
		— — — — — — — — — —
		—
		65.56
		100.00
		—
		100.00
		—

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LETTER FROM THE BOARD

Notes:

The Offeror is wholly owned by the Company, which is acting in concert with the Company in relation to NWCL. NWCL Shares held by the Company will not form part of the Offer Shares and will not be acquired by the Offeror under the Share Offer.
High Earnings is wholly owned by NWS. NWS is a non-wholly owned subsidiary of the Company. The shares of NWS are listed on the Stock Exchange with the stock code 0659. High Earnings is acting in concert with the Offeror in relation to NWCL.
Great Worth is a non-wholly owned subsidiary of the Company and is acting in concert with the Offeror in relation to NWCL.
HSBC is the financial adviser to the Company and the Offeror in respect of the Offers. Accordingly, HSBC and relevant members of the HSBC group which hold NWCL Shares are presumed to be acting in concert with the Offeror in relation to NWCL in accordance with class 5 of the definition of ‘‘acting in concert’’ under the Takeovers Code (except in respect of NWCL Shares held by exempt principal traders or exempt fund managers, in each case recognised by the Executive as such for the purpose of the Takeovers Code and also excluding NWCL Shares held on behalf of non-discretionary investment clients of the HSBC group).
Dr. Cheng Kar-Shun, Henry, who is a director of the Offeror, an executive Director and an executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Mr. Cheng Kar-Shing, Peter, who is a non-executive Director and an executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Dr. Cheng Chi-Kong, Adrian, who is an executive Director and an executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Mr. Lee Luen-Wai, John, who is an independent non-executive Director and an independent non-executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
Mr. Doo Wai-Hoi, William, who is a non-executive Director, is acting in concert with the Offeror in relation to NWCL.
Mr. William Junior Guilherme Doo, who is the son of Mr. Doo Wai-Hoi, William, a non-executive Director, and his spouse are acting in concert with the Offeror in relation to NWCL.
Ms. Ki Man-Fung, Leonie, who is an executive Director, is acting in concert with the Offeror in relation to NWCL.
The total number of NWCL Shares (assuming that new NWCL Shares are allotted and issued pursuant to the exercise in full of all NWCL Options before the close of the Offers and that there is no other change in the shareholding of NWCL before the completion of the Offers) minus the aggregate number of NWCL Shares held by the Offeror and the Company equals the total number of Offer Shares (on the same assumptions).
All percentages in the above table are approximations.

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LETTER FROM THE BOARD

Option Offer

As at the Latest Practicable Date, there were 25,544,661 NWCL Options granted under the NWCL Share Option Schemes (including 18,240,200 NWCL Options which had not been vested on the Latest Practicable Date), each giving the NWCL Optionholder the right to subscribe for one new NWCL Share. The exercise of such NWCL Options in full would result in the issue of 25,544,661 new NWCL Shares, representing approximately 0.29% of the issued share capital of NWCL as at the Latest Practicable Date and approximately 0.29% of the issued share capital of NWCL as enlarged by the issue of such new NWCL Shares.

HSBC, on behalf of the Offeror, is making the Option Offer to the NWCL Optionholders for the cancellation of every vested and unvested NWCL Option in accordance with Rule 13 of the Takeovers Code. The Option Offer is conditional upon the Share Offer becoming or being declared unconditional in all respects. Under the Option Offer, the Offeror is offering the NWCL Optionholders the Option Offer Price in cash for the cancellation of each NWCL Option that they hold and surrender in acceptance of the Option Offer.

The relevant exercise price applicable to each NWCL Option, which is set out in the tables below, ranges from HK$2.45 to HK$5.42.

NWCL Options under the share option scheme of NWCL adopted on 26 November 2002

NWCL Option exercise price Option Offer Price Total outstanding NWCL Options (HK$) (HK$) (vested and unvested) 3.036 4.764 311,688 2.705 5.095 225,400

NWCL Options under the share option scheme of NWCL adopted on 22 November 2011

NWCL Option exercise price Option Offer Price (HK$) (HK$) 2.45 5.35 3.37 4.43 3.88 3.92 3.35 4.45 2.762 5.038 4.01 3.79 3.97 3.83 4.72 3.08 4.42 3.38 4.968 2.832 5.42 2.38 4.504 3.296	1,866,760 121,500 2,301,920 1,501,990 644,000 859,100 2,720,223 686,000 481,200 9,958,480 832,000 3,034,400
	25,544,661

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LETTER FROM THE BOARD

If any NWCL Option is vested and is exercised in accordance with the terms of the NWCL Share Option Schemes prior to the Closing Date, any NWCL Shares issued as a result of the exercise of those NWCL Options prior to the Closing Date will be subject to and eligible to participate in the Share Offer.

Pursuant to the terms of the NWCL Share Option Schemes, if the Share Offer becomes or is declared unconditional in all respects, the NWCL Optionholders shall be entitled to exercise the NWCL Options in full (to the extent not already exercised) at any time within 14 days after the date on which the Share Offer becomes or is declared unconditional in all respects. The NWCL Options not exercised at the expiry of such 14-day period shall lapse.

As any exercise of the NWCL Options without accepting the corresponding Share Offer (in respect of the relevant NWCL Shares allotted to the NWCL Optionholders) after the Share Offer has been declared unconditional as to acceptances may result in the Offeror receiving less than the required percentage of acceptance (as stated in Condition (ii)) for it to exercise the rights of compulsory acquisition and thus affecting the ability of the Offeror to privatise NWCL, the Company, the Offeror and NWCL have jointly requested each of the NWCL Optionholders to sign and return a deed of undertaking (the ‘‘Deed of Undertaking’’) pursuant to which such NWCL Optionholder undertakes not to exercise any of the NWCL Options (whether vested or unvested) held by him/her from the date on which the Offeror has received valid acceptances of the Share Offer in respect of such number of NWCL Shares which would result in the Offeror holding at least 90% of the Offer Shares with the proviso that, within that holding, the Offeror would hold at least 90% of the Disinterested NWCL Shares, until such time as the Share Offer shall have lapsed. As at the Latest Practicable Date, 99 NWCL Optionholders holding a total of 6,206,781 vested NWCL Options and 16,140,360 unvested NWCL Options had executed the Deed of Undertaking. The execution of the Deed of Undertaking shall not affect or prejudice the NWCL Optionholder’s rights to accept the Option Offer in respect of the outstanding NWCL Options held by him/her in accordance with the terms of the Option Offer set out in the Composite Document and the Form of Option Offer Acceptance (as defined in the Composite Document).

Interests of the Offeror and the Offeror Concert Parties in NWCL Shares and NWCL Options

As at the Latest Practicable Date, the Offeror and the Offeror Concert Parties held 6,101,034,612 NWCL Shares in aggregate, representing approximately 70.12% of the total issued share capital of NWCL.

Save as aforesaid, as at the Latest Practicable Date, the Offeror and the Offeror Concert Parties did not hold, control or have direction over any other NWCL Shares or hold any convertible securities, warrants, options or derivatives in respect of the NWCL Shares, including NWCL Options.

TAXATION AND INDEPENDENT ADVICE

As stated in the Joint Announcement and in the Composite Document, the NWCL Offer Shareholders and the NWCL Optionholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting the Share Offer or the Option Offer. It is emphasised that none of the Offeror, the Company, NWCL or HSBC, nor any of

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LETTER FROM THE BOARD

their respective directors, officers or associates or any other person involved in the Share Offer or the Option Offer accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Share Offer or the Option Offer.

FURTHER TERMS OF THE OFFERS

Acceptance of the Share Offer

Acceptance of the Share Offer by any person will constitute a representation and warranty by such person or persons to the Company, the Offeror, NWCL and HSBC that the Offer Shares sold by such person or persons to the Offeror are free from all rights of pre-emption, options, liens, claims, equities, charges, encumbrances and any other third party rights of any nature and together with all rights attached to them as at the Closing Date or subsequently becoming attached to them, including the right to receive in full all dividends and other distributions, if any, declared, made or paid on or after the Closing Date.

Acceptance of the Option Offer

Acceptance of the Option Offer by a NWCL Optionholder will, subject to the Offers becoming or being declared unconditional in all respects, result in the cancellation of those relevant NWCL Options, together with all rights attaching thereto.

Hong Kong stamp duty

Seller’s ad valorem stamp duty at a rate of 0.1% of the market value of the Offer Shares or consideration payable by the Offeror in respect of the relevant acceptances of the Share Offer, whichever is higher (rounded up to the nearest HK$1.00), will be deducted from the amount payable to the relevant NWCL Offer Shareholders on acceptance of the Share Offer. The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the accepting NWCL Offer Shareholders in connection with the acceptance of the Share Offer and the transfer of the Offer Shares.

No stamp duty is payable in connection with the acceptance of the Option Offer and the cancellation of the NWCL Options.

Close of the Offers

The Offers are subject to the Conditions. If Conditions (i) and/or (ii) are not satisfied on or before the Closing Date, the Offers will lapse. If any other Conditions are not satisfied on or before the Closing Date, the Offers may lapse. The Offeror will issue an announcement stating whether the Offers have been revised or extended, have expired or have become or been declared unconditional (and, in such case, whether as to acceptances or in all respects), by 7:00 p.m. on the Closing Date in accordance with the Takeovers Code. The latest time on which the Offeror can declare the Share Offer unconditional as to acceptances is 7:00 p.m. on the 60th day after the posting of the Composite Document (or such later date to which the Executive may consent).

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LETTER FROM THE BOARD

If all the Conditions are satisfied (or waived, as applicable), the NWCL Offer Shareholders and the NWCL Optionholders will be notified by way of an announcement in accordance with the Takeovers Code and the Listing Rules as soon as practicable thereafter.

INTENTIONS OF THE COMPANY REGARDING THE NWCL GROUP

The Company intends to continue with the existing business of the NWCL Group upon the completion of the Offers and, subject to market conditions, may explore various opportunities to further develop the existing business of the NWCL Group. The Company may also from time to time consider the need to fund such further development by debt and/or equity financing by NWCL, subject to the NWCL Group’s business needs and prevailing market conditions. The Company does not currently intend to introduce major changes to the business of NWCL (including any redeployment of the fixed assets of NWCL) save for those changes which the Company may from time to time implement following the review of its strategic options relating to the business, structure and/or direction of the NWCL Group. It is also the current intention of the Company that the employment of the existing employees of the NWCL Group and the directorship of the existing directors of the NWCL Group should be continued following completion of the Offers except for changes which may occur in the ordinary course of business.

REASONS FOR, AND BENEFITS OF, THE OFFERS

The Board and the Offeror Board believe that the Offers provide the following benefits to (i) the Independent NWCL Shareholders, (ii) NWCL and (iii) the Company and the Shareholders.

For the Independent NWCL Shareholders

(a) Share Offer Price represents an attractive exit premium

The Share Offer Price, being HK$7.80 per Offer Share, which will not be increased, and the Offeror does not reserve the right to do so, is higher than the prevailing market price of NWCL Shares before the Announcement Date, representing a premium of approximately 25.6% over the closing price per NWCL Share of HK$6.21 as quoted by the Stock Exchange on the Last Trading Day (since which date the Hong Kong Hang Seng Index had fallen by approximately 12.4% as of the Latest Practicable Date). It also represents a premium of approximately 40.8% and 56.9% over the average closing price of approximately HK$5.54 and approximately HK$4.97 per NWCL Share on the Stock Exchange for 30 and 180 consecutive trading days up to and including the Last Trading Day, respectively. Also, the Share Offer Price represents a premium of approximately 14.7% over the cancellation price of HK$6.80 under the Previous Proposal.

During the one-year period ended on and including the Last Trading Day, the lowest and highest closing prices per NWCL Share on the Stock Exchange were HK$3.89 and HK$6.23, respectively, with a simple average closing price of approximately HK$4.95. The Share Offer Price represents a premium of approximately 57.6% over the simple average closing price and a premium of approximately 25.2% over the highest closing price in the above period.

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LETTER FROM THE BOARD

In addition, the Share Offer Price implies an attractive valuation in comparison to the consolidated net asset value per NWCL Share, as NWCL Shares have habitually traded at a larger discount. The Share Offer Price represents a premium of approximately 11.5% over the audited consolidated net asset value per NWCL Share of approximately HK$6.995 as at 30 June 2015, based on the total number of issued NWCL Shares as at 30 June 2015. The Share Offer Price was determined after taking into account, among other things, the trading prices of NWCL Shares, the trading multiples of comparable companies and with reference to other privatisation transactions in Hong Kong in recent years.

The Share Offer Price represents a premium of approximately 14.6% over the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015, based on the total number of issued NWCL Shares as at 31 December 2015. The Share Offer Price also represents a discount of approximately 29.4% to the Adjusted NAV per NWCL Share of approximately HK$11.05 as at 31 December 2015, based on the total number of issued NWCL Shares as at the Latest Practicable Date whereas the cancellation price of HK$6.80 under the Previous Proposal represented a discount of 32.5% to the adjusted unaudited consolidated net asset value of the NWCL Group as at 31 December 2013 per NWCL Share of approximately HK$10.07, based on the total number of issued NWCL Shares as at 14 May 2014.

(b) An opportunity for Independent NWCL Shareholders to monetise NWCL Shares

The Share Offer provides an opportunity for the holders of the Offer Shares to dispose of their NWCL Shares and receive cash at a price significantly above the prevailing market price. In light of the low liquidity of NWCL Shares, it is difficult for the holders of the Offer Shares to realise their Offer Shares in the stock market without adversely affecting the market price of NWCL Shares. The Share Offer also affords the holders of the Offer Shares the opportunity, if they so wish, to realise their investments in NWCL and invest the monies received in alternative investments or use them for other purposes.

NWCL is an integral part of the Group and the Company has maintained majority voting control in NWCL since NWCL’s initial public offering in 1999. It is highly unlikely that another third party will seek to acquire the Offer Shares at a price comparable to or better than the Share Offer.

For NWCL

NWCL will require substantial funding for its future developments. Without being subject to the requirements relevant to being run as a standalone listed public company, NWCL will be able to fund larger property development projects through leveraging the Company’s greater financial strength, including the latter’s access to more competitive financing terms for raising bank borrowings. Additionally, upon becoming an unlisted wholly owned subsidiary of the Company, the provision of intra-group funding from the Company to NWCL will be facilitated. Due to the low

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LETTER FROM THE BOARD

liquidity of the NWCL Shares and the discount to the net asset value per NWCL Share of its trading price on the Stock Exchange, the public equity capital market does not provide NWCL a viable funding alternative.

For the Company and the Shareholders

(a) Reinforcing the strategic positioning of the PRC property business within the Group by removing the non-compete undertaking with NWCL

The privatisation of NWCL will allow the Company to invest directly into the PRC property business.

The PRC property market is a core geographical focus of the Group but one in which the Company itself can currently only invest in indirectly via NWCL as the Company gave a noncompete undertaking to NWCL at the time of NWCL’s spin-off listing on the Stock Exchange in 1999. Pursuant to the undertaking, NWCL’s business is separate and distinct from the Company’s business such that the Company focuses on the Hong Kong property market while NWCL focuses on the PRC property market. The undertaking provides that the Company shall not compete with the PRC property development and investment activities of NWCL, nor shall the Company acquire or hold any land or real estate properties in the PRC, except for certain circumstances carved out in the undertaking. The privatisation of NWCL will remove the above undertaking and allow the Company to invest directly.

Having NWCL as a wholly owned subsidiary would provide the Company with the ability to formulate more holistic investment strategies for the Group as a whole and allow the Company to deploy its resources directly across Hong Kong and the PRC in suitable opportunities and in a more flexible manner. This would facilitate the Company to accelerate the development of the Group’s land bank in the PRC. It would also better position the Group to take on large-scale development projects in the PRC which typically require substantial funding. With a larger balance sheet, and its expertise in property and other sectors, the Company can be beneficial in securing new investments for the Group in the PRC property market, including by way of land acquisitions and collaboration with business partners in the PRC.

(b) More advantageous financing and coordinated internal treasury management

Given the larger asset size and equity base of the Company compared to NWCL, the Company expects it can secure financing on more favourable terms than NWCL. If NWCL becomes a wholly owned unlisted subsidiary of the Company, this will provide enhanced flexibility for the central management of the Group’s treasury functions and thereby the ability to secure the lowest possible funding costs across the Group’s property businesses including those in the PRC.

A streamlined management structure for the Group’s property businesses in Hong Kong and the PRC can be achieved after privatising NWCL, which will help enhance corporate efficiency and create synergies. Better functional coordination and the sharing of expertise can be facilitated internally, including design and architecture, sales and marketing, as well as property leasing and management. This has become of greater value than was historically the case as the PRC property

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LETTER FROM THE BOARD

market has matured, and will help accelerate the replication between the PRC and Hong Kong markets of successful concepts such as the K11 art mall and further strengthen the ‘‘New World’’ brand image in the two core markets.

INFORMATION ON NWCL

NWCL is a company incorporated in the Cayman Islands with limited liability, the shares of which have been listed on the Main Board of the Stock Exchange since July 1999 with the stock code 0917.

NWCL is the flagship property arm of the Company in the PRC and is one of the large-scale national developers in the PRC with unaudited consolidated total assets of approximately HK$140,773.3 million as at 31 December 2015 and audited consolidated total assets of approximately HK$134,427.5 million as at 30 June 2015. The unaudited consolidated net profit before taxation from continuing operations and net profit after taxation of NWCL for the six months ended 31 December 2015 were approximately HK$545.6 million and HK$437.6 million (including gain on disposal of discontinued operation of approximately HK$768.9 million and loss for the period from discontinued operation of approximately HK$19.6 million), respectively. The audited consolidated net profit before taxation from continuing operations and net profit after taxation of NWCL for the year ended 30 June 2015 were approximately HK$6,422.4 million and approximately HK$3,470.0 million (including loss for the year from discontinued operation of approximately HK$34.0 million), respectively and the audited consolidated net profit before taxation from continuing operations and net profit after taxation of NWCL for the year ended 30 June 2014 were approximately HK$9,107.1 million and approximately HK$4,799.3 million (including loss for the year from discontinued operation of approximately HK$140.7 million), respectively. As at the Latest Practicable Date, assuming all the Disposals had been completed, the NWCL Group’s development portfolio comprised 23 major projects spanning over 13 large cities or major transportation hubs.

The NWCL Group develops property projects for sale, develops and manages investment properties for rental purposes, and operates resort and hotel projects. Its property projects encompass residential estates, serviced apartments, villas, offices, shopping centres, mixed use comprehensive buildings, hotels and resorts. The NWCL Group has undertaken urban redevelopment projects in the old city centre of Beijing and Tianjin, and is the developer of landmark commercial complexes in Beijing, Shanghai, Wuhan, Tianjin and Dalian and large-scale residential communities in Shenyang, Wuhan, Guangzhou and Changsha.

INFORMATION ON THE OFFEROR AND THE COMPANY

The Offeror is a wholly owned subsidiary of the Company. The Company is the parent company of NWCL and a company incorporated in Hong Kong with limited liability, the shares of which have been listed on the Main Board of the Stock Exchange since 1972 with the stock code 0017. It is a constituent stock of the Hong Kong Hang Seng Index with a total unaudited consolidated net asset value attributable to Shareholders of approximately HK$178,190.9 million as at 31 December 2015 and a total audited consolidated net asset value attributable to Shareholders of approximately HK$178,918.6 million as at 30 June 2015.

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LETTER FROM THE BOARD

The Group is a leading property development company based in Hong Kong. The Company was founded in 1970 and for more than four decades the Group has expanded its business portfolio from a single focus on the property business to five core areas, comprising property, infrastructure, services, hotel and department store in Hong Kong and the PRC.

The Group is also involved in direct investment and an array of other businesses.

The aggregate remuneration payable to and benefits in kind receivable by the directors of the Offeror will not be varied in consequence of the Offers.

COMPOSITE DOCUMENT

A copy of the Composite Document is set out in Appendix IV to this circular and contains, among other things, further details of the Offers, the expected timetable, information regarding NWCL, a summary of property valuation of NWCL Group’s properties, recommendations from the NWCL Independent Board Committee with respect to the Offers, and the advice of the independent financial adviser to the NWCL Independent Board Committee in connection with the Offers.

A letter containing the details of the Option Offer has been despatched to the NWCL Optionholders on 27 February 2016.

The aggregate percentage holding in NWCL Shares of the Offeror and the Offeror Concert Parties is disclosed in the Composite Document, together with information on their dealings for value in NWCL Shares (if any) during the period commencing six months prior to the Announcement Date and ending with the latest practicable date for ascertaining information in the Composite Document.

Any acceptance or other response to the Share Offer or the Option Offer should be made only on the basis of information in the Composite Document or any other document by which the Share Offer or the Option Offer is made.

LISTING RULES IMPLICATION FOR THE COMPANY

Major Transaction

As one of the Applicable Percentage Ratios in respect of the Offers exceeds 25% and all of those Applicable Percentage Ratios are less than 100%, the implementation of the Offers constitutes a major transaction for the Company under Chapter 14 of the Listing Rules which is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The Shareholders who have a material interest in the Offers and their close associates will be required to abstain from voting on the resolution approving the Offers at the EGM.

– 26 –

LETTER FROM THE BOARD

Each of Dr. Cheng Kar-Shun, Henry, Mr. Cheng Kar-Shing, Peter, Mr. Doo Wai-Hoi, William and Ms. Ki Man-Fung, Leonie, being Directors, and/or their respective close associates who own Shares, and are interested in NWCL Shares (details of which are disclosed in the paragraph headed ‘‘2. Interests of Directors’’ in Appendix III to this circular), will abstain from voting on the relevant resolution(s) approving the Offers at the EGM.

Chow Tai Fook Enterprises Limited and its subsidiaries, which hold an aggregate of 4,065,083,926 Shares as at the Latest Practicable Date, representing approximately 43.87% of the total issued Shares as at the Latest Practicable Date, will be entitled to vote on the relevant resolution(s) approving the Offers at the EGM. Chow Tai Fook Enterprises Limited intends to, and procure its subsidiaries to, vote all their Shares for such resolution(s).

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries of NWCL Shareholders, save for certain directors of certain members of the Group and/or their respective associates who are interested in NWCL Shares and/or NWCL Options, the NWCL Offer Shareholders and the NWCL Optionholders are third parties independent of the Company and its connected persons.

FINANCIAL EFFECTS OF THE OFFERS

Following the completion of the Offers (assuming that all the Offer Shares are acquired, whether under the Offers or subsequently by way of the compulsory acquisition), NWCL will be accounted for as a wholly owned subsidiary of the Company.

Profit attributable to the Shareholders for the year ended 30 June 2015 would be increased by approximately HK$771.1 million, from approximately HK$19,112.0 million to approximately HK$19,883.1 million, assuming completion of the Offers had taken place on 1 July 2014.

As set out in Appendix II to this circular, the unaudited pro forma total assets of the Group would decrease to approximately HK$389,242.3 million and total liabilities of the Group would increase to approximately HK$192,464.7 million, assuming completion of the Offers had taken place on 31 December 2015.

Your attention is drawn to the unaudited pro forma financial information of the Group as set out in Appendix II to this circular.

EGM AND BOOK CLOSURE

The notice convening the EGM to be held at Meeting Room S421 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Friday, 18 March 2016 at 11:15 a.m. (or any adjournment thereof) is set out on pages 361 to 363 of this circular. At the EGM, the Shareholders will be requested to consider and, if thought fit, pass the ordinary resolution to approve the Offers. Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders at a general meeting must be taken by poll. Therefore, the resolution put to the vote at the EGM will be taken by way of poll. In accordance with Rule 13.39(4) of the Listing

– 27 –

LETTER FROM THE BOARD

Rules, the chairman of the EGM will direct that the proposed resolution set out in the notice convening the EGM be voted on by way of a poll, except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. After the conclusion of the EGM, the poll results will be published on the respective websites of the Stock Exchange and the Company.

A form of proxy for use at the EGM is also enclosed. Whether or not you intend to attend the meeting (and any adjournment thereof) 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 Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude Shareholders from attending and voting in person at the EGM or any adjournment thereof if they so wish.

For the purpose of determining the entitlement of the Shareholders to attend and to vote at the EGM (or any adjournment thereof), the register of members of the Company will be closed from Tuesday, 15 March 2016 to Friday, 18 March 2016 (both days inclusive), during which no transfer of Shares will be effected. In order to be entitled to attend and to vote at the EGM (or any adjournment thereof), all transfers accompanied by the relevant share certificates must be lodged with the Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Monday, 14 March 2016.

RECOMMENDATION

Quam Capital is acting as the independent financial adviser to the Board and the Offeror Board pursuant to Rule 2.4 of the Takeovers Code in relation to the Offers. Quam Capital has advised that having taken into account, among others, the Share Offer Price and the Option Offer Price, the benefits of implementation of the Offers from the perspective of the Company and the Shareholders (as set out in the section headed ‘‘Reasons for, and benefits of, the Offers’’ above) and the financial impacts of the Offers on the Company and the Offeror, it considers that the Share Offer and the Option Offer are in the interests of the respective shareholders of the Company and the Offeror. Your attention is drawn to the letter from Quam Capital set out on pages 30 to 73 of this circular which contains its full advice to the Board and the Offeror Board in relation to the Offers.

The Board is of the opinion that the terms of the Offers are fair and reasonable and in the interests of the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolution in relation to the Offers to be proposed at the EGM.

– 28 –

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the Appendices I to IV to this circular.

Yours faithfully,

For and on behalf of

New World Development Company Limited (新世界發展有限公司) Dr. Cheng Kar-Shun, Henry Chairman

– 29 –

LETTER FROM QUAM CAPITAL

The following is the full text of the letter from Quam Capital setting out its advice to the Board and the Offeror Board in respect of the Offers, which has been prepared for the purpose of inclusion in this circular.

==> picture [167 x 35] intentionally omitted <==

29 February 2016

To the Board and the Offeror Board

Dear Sir or Madam,

MAJOR TRANSACTION IN RELATION TO VOLUNTARY CONDITIONAL CASH OFFERS TO ACQUIRE ALL THE OFFER SHARES AND TO CANCEL ALL THE OUTSTANDING NWCL OPTIONS IN RELATION TO NEW WORLD CHINA LAND LIMITED

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Board and the Offeror Board in respect of the Offers pursuant to Rule 2.4 of the Takeovers Code. Details of the Offers are set out in the ‘‘Letter from the Board’’ (the ‘‘Letter from the Board’’) contained in the circular dated 29 February 2016 (the ‘‘Circular’’) issued by the Company to the Shareholders, of which this letter forms part. Terms used in this letter shall have the same meaning as defined in the Circular unless the context otherwise requires.

Quam Capital is not associated with the Company, the Offeror, NWCL or any of their respective substantial shareholders, or any party acting, or presumed to be acting, in concert with any of them. Apart from normal professional fees payable to us in connection with this engagement, no other arrangement exists whereby we will receive any fees or benefits from the Company, the Offeror, NWCL, or any of their respective substantial shareholders, or any party acting, or presumed to be acting, in concert with any of them. We have acted as the independent financial adviser to the Board and the Offeror Board in relation to the Previous Proposal. In the past two years and up to the Latest Practicable Date, a fellow subsidiary of Quam Capital had provided delayed stock quote data feed, investment calculator and historical stock price look up services and advertising and editorial services to the Company. As the aggregate contract value of the services provided by our fellow subsidiary is immaterial, we do not consider the aforesaid relationship will affect the objectivity of our advice. Accordingly, we are considered eligible to give an independent advice to the Board and the Offeror Board.

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LETTER FROM QUAM CAPITAL

BASIS OF OUR OPINION

In formulating our recommendation, we have relied on (i) the information and facts contained or referred to in the Circular; (ii) the information supplied by the Company and its advisers; (iii) the opinions expressed by and the representations of the Directors and management of the Group; and (iv) the relevant public information. We have assumed that all the information provided and representations and opinions expressed to us or contained or referred to in the Circular were true, accurate and complete in all respects as at the date thereof and may be relied upon. The Shareholders will be informed by the Company and us as soon as practicable if there is any material change to the information disclosed in the Circular throughout the period of the Offers, in which case we will consider whether it is necessary to revise our opinion and inform the Board and the Offeror Board accordingly. We have no reason to doubt the truth, accuracy and completeness of such information and representations provided to us by the management of the Group, the directors and the advisers of the Company.

We consider that we have reviewed sufficient information currently available to reach an informed view and to justify our reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis for our recommendation. We have not, however, carried out any independent verification of the information, nor have we conducted any form of in-depth investigation into the business, affairs, operations, financial position or future prospects of the Company, NWCL or any of their respective subsidiaries and associates.

PRINCIPAL TERMS OF THE OFFERS

The Offers

The Offers are made by HSBC on behalf of the Offeror in compliance with the Takeovers Code on the basis set out below.

The Share Offer:

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$7.80 in cash

The Share Offer Price will not be increased and the Offeror does not reserve the right to do so. The Share Offer is extended to all NWCL Offer Shareholders (including certain Offeror Concert Parties).

The Option Offer:

For cancellation of each NWCL Option . . . . . . . . . . . . . . . . the Option Offer Price in cash

The relevant exercise price applicable to each NWCL Option ranges from HK$2.45 to HK$5.42 and accordingly, the Option Offer Price ranges from HK$2.38 to HK$5.35 per NWCL Option. The Option Offer Price will not be increased and the Offeror does not reserve the right to do so.

– 31 –

LETTER FROM QUAM CAPITAL

The Option Offer is extended to all NWCL Optionholders in accordance with the Takeovers Code.

Conditions of the Offers

The Share Offer is subject to the following Conditions:

(i) the Shareholders having passed an ordinary resolution at the EGM to approve the Offers;
(ii) valid acceptances of the Share Offer having been received (and not, where permitted, withdrawn) by 4:00 p.m. on the Closing Date (or such later time or date as the Offeror may, subject to the rules of the Takeovers Code, decide) in respect of such number of NWCL Shares which would result in the Offeror holding at least 90% of the Offer Shares with the further proviso that, within that holding, the Offeror would also hold at least 90% of the Disinterested NWCL Shares;
(iii) no event having occurred which would make any of the Offers or the acquisition of any of the Offer Shares under the Share Offer or the cancellation of the NWCL Options under the Option Offer void, unenforceable or illegal or prohibit implementation of any of the Offers or would impose any additional material conditions or obligations with respect to any of the Offers or any part thereof;
(iv) all necessary consents (including consents from the relevant lenders) in connection with the Offers and in connection with the withdrawal of listing of the NWCL Shares from the Stock Exchange which may be required under any existing contractual obligations of NWCL being obtained and remaining in effect;
(v) no relevant government, governmental, quasi-government, statutory or regulatory body, court or agency in Hong Kong, the Cayman Islands or any other jurisdictions having taken or instituted any action, proceeding, suit, investigation or enquiry (or enacted, made or proposed, and there not continuing to be outstanding, any statute, regulation, demand or order) that would make any of the Offers or its implementation in accordance with its terms void, unenforceable, illegal or impracticable (or which would impose any material and adverse conditions or obligations with respect to any of the Offers or its implementation in accordance with its terms); and
(vi) since the Announcement Date, there having been no material adverse change in the business, assets, financial or trading positions or prospects or conditions (whether operational, legal or otherwise) of the NWCL Group (to an extent which is material in the context of the NWCL Group taken as a whole).

The Offeror reserves the right to waive, in whole or in part, all or any of the Conditions set out above (other than Conditions (i) and (ii)).

As at the Latest Practicable Date, none of the Conditions had been fulfilled.

– 32 –

LETTER FROM QUAM CAPITAL

The Option Offer is subject to and conditional upon the Share Offer becoming or being declared unconditional in all respects.

Possible compulsory acquisition and withdrawal of listing

Further details of the terms of the Offers are set out in the Letter from the Board.

MAJOR TRANSACTION

The Shareholders who have a material interest in the Offers and their close associates will be required to abstain from voting on the resolution approving the Offers at the EGM.

– 33 –

LETTER FROM QUAM CAPITAL

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation, we have taken into consideration the following principal factors and reasons:

1. Background of the Group

1.1 Business

The Group is principally engaged in the following businesses:

(i) Property development and property investment

The PRC property business is operated through NWCL (Stock code: 0917), a 69.5%-owned subsidiary of the Company as at the Latest Practicable Date, whereas the Hong Kong property business is carried out by certain subsidiaries of the Company (other than the NWCL Group).

The property business is the major profit contributor of the Group. For the year ended 30 June 2015, the property business accounted for approximately 76.7% of the segment results of the Group.

(ii) Infrastructure and services

NWS (Stock code: 0659), a 61.3%-owned subsidiary of the Company as at the Latest Practicable Date, is principally engaged in investments in infrastructure projects across Hong Kong, the PRC and Macau Special Administrative Region and operating vital utility services and infrastructure facilities.

(iii) Department stores

NWDS (Stock code: 0825), a 72.3%-owned subsidiary of the Company as at the Latest Practicable Date, is principally engaged in operating department stores in the PRC.

(iv) Hotel operations

The Group’s hotel portfolio comprises a range of deluxe and lifestyle hotel properties across Hong Kong, the PRC and Southeast Asia.

– 34 –

LETTER FROM QUAM CAPITAL

1.2 Historical financial performance

The following tables set out certain selected financial information of the Group for each of the years ended 30 June 2014 and 2015 (‘‘FY2014’’ and ‘‘FY2015’’, respectively) as extracted from the respective annual reports of the Company (the ‘‘NWD Annual Report(s)’’) and for each of the six months ended 31 December 2014 and 2015 (‘‘HY2015’’ and ‘‘HY2016’’, respectively) as extracted from the respective interim results announcements of the Company (the ‘‘NWD Interim Results’’).

	Six months ended	Six months ended
	31 December		Year ended	30 June
	2015	2014	2015	2014
	(Unaudited)	(Unaudited)	(Audited)	(Audited)
	HK$ million	HK$ million	HK$ million	HK$ million
Revenue	33,778.2	26,986.3	55,245.0	56,501.1
Gross profit	10,069.3	9,755.8	19,306.0	21,553.5
Profit before taxation	6,244.0	9,165.6	31,136.5	19,076.0
Profit for the year/period	4,491.6	7,224.5	26,872.1	13,337.8
Attributable to
— the Shareholders	3,300.0	5,854.6	19,112.0	9,725.4
— non-controlling
interests	1,191.6	1,369.9	7,760.1	3,612.4
Dividend	1,204.7	1,067.2	3,766.3	3,372.7
Earnings per Share (HK$)
— Basic	0.37	0.68	2.17	1.37
— Diluted	0.37	0.68	2.17	1.37
Gross profit margin(Note 1)	29.8%	36.2%	34.9%	38.1%
Net profit margin(Note 2)	9.8%	21.7%	34.6%	17.2%

Notes:

Gross profit margin of each of the financial year/period is calculated as gross profit for the respective financial year/period divided by revenue for the corresponding year/period.

– 35 –

LETTER FROM QUAM CAPITAL

Net profit margin of each of the financial year/period is calculated as net profit for the respective financial year/period attributable to the Shareholders divided by revenue for the corresponding year/period.

Total assets Total liabilities Shareholders’ funds Non-controlling interests Total equity Gearing ratio(Note)	As at 31 December 2015 (Unaudited) HK$ million 409,682.8 192,330.4 178,190.9 39,161.5 217,352.4 31.4%	As at 30 June 2015 2014 (Audited) (Audited) HK$ million HK$ million 397,930.7 369,227.4 175,572.7 168,950.9 178,918.6 159,808.3 43,439.4 40,468.2 222,358.0 200,276.5 24.1% 27.3%	As at 30 June 2015 2014 (Audited) (Audited) HK$ million HK$ million 397,930.7 369,227.4 175,572.7 168,950.9 178,918.6 159,808.3 43,439.4 40,468.2 222,358.0 200,276.5 24.1% 27.3%
			200,276.5
			27.3%

Note: The gearing ratios are calculated on the basis of net debts over total equity of the Group as disclosed in the NWD Annual Reports and the NWD Interim Results.

(i) Historical financial results of the Group

As disclosed in the NWD Annual Reports and the NWD Interim Results, revenue of the Group for FY2014, FY2015 and HY2016 was generated from property development, property investment, service, infrastructure, hotel operations, department stores and other operations. From FY2014 to HY2016, property development was the largest business segment of the Group which contributed segment revenue of approximately HK$29,329.2 million, HK$25,681.9 million and HK$17,820.5 million for FY2014, FY2015 and HY2016 respectively, representing approximately 51.9%, 46.5% and 52.8% of the Group’s total revenue for the corresponding years/period. This segment also contributed to approximately 55.7%, 56.6% and 55.4% of the Group’s segment results (including share of results of joint ventures and associated companies) for FY2014, FY2015 and HY2016 respectively. Shareholders should note that, out of the revenue generated by the Group’s property development segment, approximately HK$19,800.6 million, HK$15,293.0 million and HK$6,369.4 million was attributable to the revenue generated from property sales of the NWCL Group for FY2014, FY2015 and HY2016, respectively, which was consolidated into the Group’s financial results, representing approximately 67.5%, 59.5% and 35.7% of revenue generated by the Group’s property development segment for the corresponding years/period.

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LETTER FROM QUAM CAPITAL

For FY2015, the Group’s revenue decreased by approximately HK$1,256.1 million, or approximately 2.2%, to approximately HK$55,245.0 million from approximately HK$56,501.1 million for FY2014. This was mainly due to the decrease in property sales in the PRC which was mitigated by the significant revenue growth of the service segment. As mentioned in the NWD Annual Report for FY2015, although several residential projects in Hong Kong, namely ‘‘The Austin’’ and ‘‘Grand Austin’’ in Southwest Kowloon, ‘‘Park Signature’’ and ‘‘The Reach’’ in Yuen Long, together with ‘‘Double Cove’’ and ‘‘Double Cove Starview’’ in Ma On Shan, provided major contributions to the results of the Group, the overall recorded property sales volume of NWCL in the PRC decreased by approximately 39.5% for FY2015 as compared to FY2014. The decrease in contribution from property sales in the PRC was mainly resulted from the decrease in volume of completed projects in terms of gross floor area (the ‘‘GFA’’) by approximately 30% during FY2015. Despite the slight decrease in revenue, the Group’s net profit attributable to the Shareholders for FY2015 recorded a significant increase by approximately HK$9,386.6 million, or approximately 96.5%, to approximately HK$19,112.0 million for FY2015. This was primarily attributable to the gain on partial disposal of the Group’s interests in three hotels in Hong Kong in April 2015, before taxation and share of non-controlling interests of approximately HK$15.0 billion for FY2015. This also contributed to the increase in earnings per Share and net profit margin for FY2015 as compared to those of FY2014.

For HY2016, the Group’s revenue increased by approximately HK$6,791.9 million, or approximately 25.2%, to approximately HK$33,778.2 million from approximately HK$26,986.3 million for HY2015. This was mainly due to the increase in revenue contributed by the property development segment by approximately HK$5,959.1 million for HY2016 as compared to that of HY2015. As mentioned in the NWD Interim Results for HY2016, together with the revenue from the joint-development projects, the Group’s revenue generated from property development business in Hong Kong during HY2016 amounted to approximately HK$11,450.8 million, representing an increase of approximately 146% year-onyear. The contributions from property sales were mainly attributable to the sales of residential units completed and recognised during HY2016, including ‘‘THE PAVILIA HILL’’ in North Point, ‘‘THE PARKHILL’’ in Yuen Long and ‘‘Double Cove Starview Prime’’ in Ma On Shan, together with the sales of residential projects completed in previous financial years. Despite the increase in revenue, the Group’s net profit attributable to the Shareholders for HY2016 recorded a significant decrease by approximately HK$2,554.6 million, or approximately 43.6%, to approximately HK$3,300.0 million for HY2016. This was primarily attributable to the impact from currency exchange as a result of RMB devaluation, and lesser amount of revaluation gains on investment properties recorded during HY2016. This also contributed to the decrease in earnings per Share and net profit margin for HY2016 as compared to those of HY2015.

– 37 –

LETTER FROM QUAM CAPITAL

For details of the historical financial performance of the Group’s property development business in the PRC, please refer to section 2.2(i) below.

(ii) Historical financial position of the Group

As set out in the above table, the asset base of the Group was on an increasing trend from 30 June 2014 to 31 December 2015. Total assets of the Group reached approximately HK$409,682.8 million as at 31 December 2015. Property interests, including investment properties, properties for development, properties under development and properties held for sale, were the major assets of the Group which amounted to approximately HK$177,225.6 million as at 31 December 2015 and accounted for approximately 43.3% of the Group’s total assets as at 31 December 2015. Cash and bank balances of the Group were approximately HK$64,550.0 million as at 31 December 2015.

As at 31 December 2015, the Group had long-term borrowings and short-term borrowings of approximately HK$135,525.8 million, representing approximately 70.5% of the Group’s total liabilities, which comprised secured and unsecured bank loans, other loans and fixed rate bonds and notes payable and unsecured loans from non-controlling shareholders. Gearing ratio of the Group, being net debts (excluding loans from non-controlling shareholders) divided by total equity, was approximately 31.4% as at 31 December 2015.

2. Background of the NWCL Group

2.1 Business

NWCL is the flagship property arm of the Group in the PRC. The NWCL Group develops property projects for sale, develops and manages investment properties for rental purposes, and operates resort and hotel projects. Since the listing of NWCL Shares on the Main Board of the Stock Exchange in July 1999, the Company has undertaken not to compete with the PRC property development and investment activities of NWCL or acquire or hold any land or real estate properties in the PRC, except for certain circumstances carved out in the undertaking.

The NWCL Group’s property projects encompass residential communities, serviced apartments, villas, offices, shopping centres, mixed use comprehensive buildings, hotels and resorts in major cities or transportation hubs. At present, the NWCL Group has a comprehensive property development and investment portfolio, mature operating teams in first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, and a competitive property development portfolio in high-growth cities. Assuming all the Disposals had been completed as at the Latest Practicable Date, NWCL would have landbank of approximately 11.1 million square metres (‘‘sq. m.’’) GFA which was sufficient for five years of development, as set out in the paragraph headed ‘‘Financial and Trading Prospects of the Group’’ in Appendix I to the Circular.

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LETTER FROM QUAM CAPITAL

2.2 Historical financial performance

(i) Historical financial results of the NWCL Group

The following table sets out certain selected financial information of the NWCL Group for FY2014 and FY2015 as extracted from the respective annual reports of NWCL (the ‘‘NWCL Annual Report(s)’’) and the unaudited consolidated income statement of the NWCL Group for HY2015 and HY2016 as extracted from the respective interim results announcements of NWCL (the ‘‘NWCL Interim Results’’).

– 39 –

LETTER FROM QUAM CAPITAL

Six months ended
31 December
2015
2014
(Unaudited)
(Unaudited)
HK$’000
HK$’000
Revenue
7,300,446
8,434,173
Cost of sales
(4,931,422)
(5,407,620)
Gross profit
2,369,024
3,026,553
Profit before taxation
545,640
2,880,352
(Loss)/profit for the year/
period from continuing
operations
(311,687)
1,573,657
Profit/(loss) for the year/period
from discontinued operation
749,291
(94,103)
Profit for the year/period
437,604
1,479,554
Attributable to the NWCL
Shareholders
From continuing operations
(207,084)
1,609,328
From discontinued operation
749,291
(94,103)
542,207
1,515,225
— Non-controlling interests
(104,603)
(35,671)
437,604
1,479,554
Dividends
—
—
Earnings per NWCL Share (HK$)
Basic
From continuing operations
(0.0238)
0.1853
From discontinued operation
0.0862
(0.0108)
0.0624
0.1745
Diluted
From continuing operations
(0.0238)
0.1851
From discontinued operation
0.0861
(0.0108)
0.0623
0.1743
Gross profit margin(Note 1)
32.5%
35.9%
Net profit margin(Note 2)
N/A
19.1%

Year ended 30 June
2015
2014
(Audited)
(Audited)
HK$’000
HK$’000
17,459,237
21,850,106
(10,621,455) (12,770,039)
6,837,782
9,080,067
6,422,415
9,107,119
3,504,080
4,939,963
(34,033)
(140,698)
3,470,047
4,799,265
3,347,164
4,779,389
(34,033)
(140,698)
3,313,131
4,638,691
156,916
160,574
3,470,047
4,799,265
260,681
607,713
0.3853
0.5511
(0.0039)
(0.0162)
0.3814
0.5349
0.3851
0.5507
(0.0039)
(0.0162)
0.3812
0.5345
39.2%
41.6%
19.2%
21.9%

– 40 –

LETTER FROM QUAM CAPITAL

Notes:

Gross profit margin of each of the financial years/period is calculated as gross profit for the respective financial year/period divided by revenue for the corresponding year/period.
Net profit margin of each of the financial year/period is calculated as profit for the respective financial year/period attributable from continuing operations to the NWCL Shareholders divided by revenue for the corresponding year/period.

(1) Revenue

As set out in the NWCL Annual Reports and the NWCL Interim Results, revenue of the NWCL Group for FY2014, FY2015 and HY2016 was generated from (i) property sales; (ii) rental operation; (iii) hotel operation; (iv) property management services; (v) hotel management services; and (vi) other operations. Among these business segments, the property sales segment remained the largest revenue contributor of the NWCL Group, revenue generated from which amounted to approximately HK$19,800.6 million, HK$15,293.0 million and HK$6,369.4 million for FY2014, FY2015 and HY2016, respectively, representing approximately 90.6%, 87.6% and 87.2% of the NWCL Group’s total revenue from continuing operations for the corresponding years/period.

The NWCL Group recorded a decrease in revenue from continuing operations in FY2015 by approximately HK$4,390.9 million, or approximately 20.1%, from approximately HK$21,850.1 million for FY2014 to approximately HK$17,459.2 million for FY2015. As disclosed in the NWCL Annual Report for FY2015, such decrease was mainly contributed by the drop in revenue generated from the property sales segment of the NWCL Group for FY2015 by approximately HK$4,507.6 million, or approximately 22.8%, from approximately HK$19,800.6 million for FY2014 to approximately HK$15,293.0 million for FY2015, which was mainly attributable to (i) the lower overall recorded property sales volume of the NWCL Group in GFA of 855,414 sq. m. for FY2015, representing a decrease of approximately 39.5% from 1,414,886 sq. m. for FY2014; (ii) the decrease in completed property projects in GFA from 1,553,567 sq. m. in FY2014 to 1,089,163 sq. m. in FY2015; and (iii) the planned deferral in launching the sale of high-end villas in Shenzhen New World Signature Hill and high-rise residential units in Shenzhen New World Yi Shan Garden until after completion instead of preselling at construction stage in order to maximise their returns and benefits from tapping the rising trend of property prices in the region and executing pricing strategy with more flexibility for sales of completed units.

For HY2016, revenue of the NWCL Group from continuing operations amounted to approximately HK$7,300.4 million, representing a decrease of approximately HK$1,133.8 million or approximately 13.4%, as compared to

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that of approximately HK$8,434.2 million for HY2015. As disclosed in the NWCL Interim Results for HY2016, such decrease was mainly contributed by the drop in revenue generated from the property sales segment of the NWCL Group for HY2015 by approximately HK$840.7 million, or approximately 11.7%, from approximately HK$7,210.1 million for HY2015 to approximately HK$6,369.4 million for HY2016, which was mainly attributable to the decrease in the overall recorded property sales of the NWCL Group in volume by approximately 11.1% to 443,016 sq. m. for HY2016 as compared to that of HY2015 resulting from (i) the cyclical decrease in volume of completed property projects in HY2016; and (ii) the planned deferral in launching the sale of high-end villas in Shenzhen New World Signature Hill and high-rise residential units in Shenzhen New World Yi Shan Garden to maximise their returns and benefits from tapping the rising trend of property prices in the region.

(2) Gross profit and gross profit margin

The NWCL Group recorded a decrease in gross profit from continuing operations from approximately HK$9,080.1 million for FY2014 to approximately HK$6,837.8 million for FY2015, representing a decrease of approximately 24.7%, mainly due to the decrease in revenue for FY2015 as discussed above. The NWCL Group’s gross profit margin from continuing operations decreased from approximately 41.6% for FY2014 to approximately 39.2% for FY2015 mainly due to the difference in recorded sales mix. The recorded property sales for FY2015 were mainly from Tianjin Glorious Palace, Foshan Canton First Estate, Langfang New World Centre and Dalian New World Tower, which had lower gross profit margins than those of the property projects sold for FY2014, including Guangzhou Park Paradise, Shenyang New World Garden, Beijing Xin Yi Garden office units, Guangzhou New World Oriental Garden and Guangzhou Covent Garden.

The NWCL Group recorded a decrease in gross profit from continuing operations from approximately HK$3,026.6 million for HY2015 to approximately HK$2,369.0 million for HY2016, representing a decrease of approximately 21.7%, mainly due to the decrease in revenue for HY2016 as discussed above. The NWCL Group’s gross profit margin from continuing operations decreased from approximately 35.9% for HY2015 to approximately 32.5% for HY2016 mainly due to the difference in recorded sales mix. Around half of the recorded property sales for HY2016 were from projects located in second and third-tier cities, which had an average profit margin of below 25%. The recorded sales from these projects constituted approximately 34% of the total recorded sales of HY2015.

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(3) Net profit and net profit margin

Net profit of the NWCL Group decreased from approximately HK$4,799.3 million for FY2014 to approximately HK$3,470.0 million for FY2015, which was in line with the decrease in revenue and gross profit of the Group during the same period. The net profit of the NWCL Group decreased from approximately HK$1,479.6 million for HY2015 to approximately HK$437.6 million for HY2016.

The NWCL Group’s net profit margin from continuing operations decreased from approximately 21.9% for FY2014 to approximately 19.2% for FY2015 mainly as a result of the decrease in gross profit margin as discussed above. For HY2016, the NWCL Group recorded a net loss from continuing operations mainly as a result of the significant net foreign exchange losses during the period.

In December 2015, NWCL announced to dispose of seven projects in five cities in the PRC, namely Wuhan Changqing Garden, Wuhan Changqing Nanyuan and Wuhan Xinhua Garden in Wuhan, the Palm Island Resort project in Huiyang, the Haikou New World ‧ Meilisha project in Haidian Island, the Guiyang Jinyang Sunny Town project in Guiyang and the Chengdu New World Riverside project (the ‘‘Chengdu Project’’) in Chengdu, to a wholly owned subsidiary of Evergrande for a total consideration of RMB20,800 million (equivalent to approximately HK$24,910.2 million). Further details of the Disposals are set out in the joint announcements of the Company and NWCL dated 2 December 2015 and 29 December 2015, the circular of NWCL dated 23 December 2015 and the circulars of each of NWD and NWCL dated 19 January 2016. Save for the Chengdu Project, all other transactions under the Disposals had been completed as at the Latest Practicable Date. As part of the strategy of the Group and the NWCL Group of optimising the project development and investment portfolio, the Disposals served to scale down and unlock its investment in second and third-tier cities and projects with lower gross profit margins and prolonged development cycles while focusing more resources in first and 1.5-tier cities and other high-growth cities where the Group’s brand has already been well recognised and established. Such strategy is expected to improve the average gross profit margin of projects and assets churn in the PRC.

We consider that the NWCL Group is strategically important to the Group by being the flagship property arm of the Group in the PRC. As a wholly owned subsidiary of the Company following the privatisation, NWCL is expected to take on larger and better quality development projects in the higher tiered cities in the PRC with better profitability by leveraging on the financial strength and brand image of the Group.

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(ii) Historical financial position of the NWCL Group

The following table sets out the audited consolidated statement of financial position of the NWCL Group as at 30 June 2014 and 30 June 2015 as extracted from the NWCL Annual Reports and the unaudited consolidated statement of financial position of the NWCL Group as at 31 December 2015 as extracted from the NWCL Interim Results for HY2016.

ASSETS Non-current assets Property, plant and equipment Investment properties Land use rights Intangible assets Properties held for development Associated companies and joint ventures Available-for-sale financial assets Current assets Properties under development Completed properties held for sale Hotel inventories, at cost Prepayments, debtors and other receivables Amounts due from related companies Cash and bank balances Assets of disposal group classified as held for sale Non-current assets reclassified as held for sale Total assets	As at 31 December 2015 (Unaudited) HK$’000 5,241,850 22,677,651 577,501 123,417 13,751,920 14,700,228 4,004,215 61,076,782 16,387,630 14,408,004 3,915 6,948,748 212,227 18,130,524 56,091,048 22,343,211 1,262,217 79,696,476 140,773,258	As at 30 June 2015 2014 (Audited) (Audited) HK$’000 HK$’000 5,831,924 4,763,887 24,684,353 21,971,592 720,144 703,901 91,030 1,895,952 19,741,250 18,182,575 15,598,108 14,309,144 735,860 85,147 67,402,669 61,912,198 17,671,570 21,091,110 19,885,358 8,977,146 4,102 4,002 11,275,453 10,881,917 301,943 577,025 15,773,665 17,351,595 64,912,091 58,882,795 2,112,780 — — 131,138 67,024,871 59,013,933 134,427,540 120,926,131	As at 30 June 2015 2014 (Audited) (Audited) HK$’000 HK$’000 5,831,924 4,763,887 24,684,353 21,971,592 720,144 703,901 91,030 1,895,952 19,741,250 18,182,575 15,598,108 14,309,144 735,860 85,147 67,402,669 61,912,198 17,671,570 21,091,110 19,885,358 8,977,146 4,102 4,002 11,275,453 10,881,917 301,943 577,025 15,773,665 17,351,595 64,912,091 58,882,795 2,112,780 — — 131,138 67,024,871 59,013,933 134,427,540 120,926,131
			61,912,198
			21,091,110 8,977,146 4,002 10,881,917 577,025 17,351,595
			58,882,795 — 131,138
			59,013,933
			120,926,131

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EQUITY Capital and reserves attributable to NWCL’s equity holders Share capital Reserves Proposed final dividend Non-controlling interests Total equity LIABILITIES Non-current liabilities Long term borrowings Deferred tax liabilities Current liabilities Creditors and accruals Deposits received on sale of properties Amounts due to related companies Short term loans Current portion of long term borrowings Amounts due to non-controlling interests Taxes payable Liabilities of disposal group classified as held for sale Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities Gearing ratio(Note)	As at 31 December 2015 (Unaudited) HK$’000 869,360 58,300,325 — 59,169,685 3,794,445 62,964,130 42,192,270 3,157,875 45,350,145 7,985,189 6,243,425 942,691 — 6,553,940 101,313 4,381,837 26,208,395 6,250,588 32,458,983 77,809,128 140,773,258 47,237,493 108,314,275 48.6%	As at 30 June 2015 2014 (Audited) (Audited) HK$’000 HK$’000 868,877 868,335 59,652,293 56,623,635 260,681 260,547 60,781,851 57,752,517 3,836,900 3,566,137 64,618,751 61,318,654 34,388,409 25,226,035 3,522,327 3,252,232 37,910,736 28,478,267 8,890,122 6,950,199 6,045,122 4,716,405 723,334 507,848 1,001,250 — 9,775,255 14,197,174 102,756 102,756 4,432,361 4,654,828 30,970,200 31,129,210 927,853 — 31,898,053 31,129,210 69,808,789 59,607,477 134,427,540 120,926,131 35,126,818 27,884,723 102,529,487 89,796,921 45.5% 36.0%	As at 30 June 2015 2014 (Audited) (Audited) HK$’000 HK$’000 868,877 868,335 59,652,293 56,623,635 260,681 260,547 60,781,851 57,752,517 3,836,900 3,566,137 64,618,751 61,318,654 34,388,409 25,226,035 3,522,327 3,252,232 37,910,736 28,478,267 8,890,122 6,950,199 6,045,122 4,716,405 723,334 507,848 1,001,250 — 9,775,255 14,197,174 102,756 102,756 4,432,361 4,654,828 30,970,200 31,129,210 927,853 — 31,898,053 31,129,210 69,808,789 59,607,477 134,427,540 120,926,131 35,126,818 27,884,723 102,529,487 89,796,921 45.5% 36.0%
			57,752,517 3,566,137
			61,318,654
			25,226,035 3,252,232
			28,478,267
			6,950,199 4,716,405 507,848 — 14,197,174 102,756 4,654,828
			31,129,210 —
			31,129,210
			59,607,477
			120,926,131
			27,884,723
			89,796,921
			36.0%

Note: Gearing ratios are calculated on the basis of net debts over total equity of the NWCL Group as disclosed in the NWCL Annual Reports and the NWCL Interim Results.

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A significant portion of the NWCL Group’s assets consist of investment properties, properties held for/under development and completed properties held for sale. The aggregate amount of the aforesaid assets was approximately HK$67,225.2 million, representing approximately 47.8% of the NWCL Group’s total assets as at 31 December 2015.

(1) Investment properties

Investment properties of the NWCL Group mainly comprised completed investment properties which are located in a number of cities in the PRC, such as Beijing, Tianjin, Shenyang, Dalian, Shanghai, Wuhan and Guangzhou as well as investment properties under development. Investment properties of the NWCL Group are measured initially at cost, including related transaction costs, and carried at fair value after initial recognition.

As at 30 June 2014, 30 June 2015 and 31 December 2015, investment properties accounted for approximately 18.2%, 18.4% and 16.1% of the NWCL Group’s total assets, respectively. As noted from the NWCL Annual Report for FY2015, total GFA of the NWCL Group’s completed investment properties (including those held by associated companies and joint ventures) as at 30 June 2015 reached approximately 2,452,703 sq. m. (30 June 2014: 2,458,136 sq. m.). Carrying value of the NWCL Group’s investment properties increased from approximately HK$21,971.6 million as at 30 June 2014 to approximately HK$22,677.7 million as at 31 December 2015. Such increase was mainly attributable to the additions, transfer-in from properties under development and completed properties held for sale, as well as the increase in fair value of investment properties during the financial years/period under review.

(2) Properties held for/under development

Properties held for/under development of the NWCL Group comprised payments for land use rights, development expenditures and borrowing costs capitalised, and are carried at the lower of cost and net realisable value. As at 30 June 2014, 30 June 2015 and 31 December 2015, properties held for/under development accounted for approximately 32.5%, 27.8% and 21.4% of the NWCL Group’s total assets, respectively.

(3) Completed properties held for sale

Completed properties held for sale are reclassified from properties under development upon completion of the relevant development projects and are initially measured at the carrying amount of the properties at the date of reclassification from properties under development. Completed properties held for sale are carried at the lower of cost and net realisable value. As at 30 June

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2014, 30 June 2015 and 31 December 2015, completed properties held for sale represented approximately 7.4%, 14.8% and 10.2% of the NWCL Group’s total assets, respectively.

Completed properties held for sale increased significantly from approximately HK$8,977.1 million as at 30 June 2014 to approximately HK$14,408.0 million as at 31 December 2015, mainly attributable to, among other things, the excess of development projects completion over sales volume. As disclosed in the NWCL Annual Reports, the NWCL Group completed 14 property development projects with total GFA of 1,089,163 sq. m. in FY2015 whereas the NWCL Group completed 15 property development projects with total GFA of 1,553,567 sq. m. in FY2014. For HY2016, three property development projects with total GFA of 237,535 sq. m. were completed. The percentage of sales volume to projects completed (in terms of GFA) for FY2014, FY2015 and HY2016 was approximately 91.1%, 78.5% and 186.5%, respectively.

(4) Cash and bank balances

The NWCL Group maintains an ample amount of cash reserves. As at 30 June 2014, 30 June 2015 and 31 December 2015, cash and bank balances represented approximately 14.3%, 11.7% and 12.9% of the NWCL Group’s total assets, respectively. The cash and bank balances of the NWCL Group decreased from approximately HK$17,351.6 million as at 30 June 2014 to approximately HK$15,773.7 million as at 30 June 2015. Such decrease was mainly attributable to the additions of property, plant and equipment, land use rights and investment properties, and the increase in investments in associated companies and joint ventures. As at 31 December 2015, cash and bank balances of the NWCL Group increased to approximately HK$18,130.5 million.

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(5) Long term borrowings (current and non-current portions)

As set out in the NWCL Annual Reports, long term borrowings of the NWCL Group mainly included secured and unsecured bank loans, fixed rate bonds and notes payable, loans from fellow subsidiaries and non-controlling interests, advances from participating interests and other secured and unsecured loans from other financial institutions. Long term borrowings were one of the important sources of funds of the NWCL Group, which represented approximately 66.1%, 63.3% and 62.6% of the NWCL Group’s total liabilities as at 30 June 2014, 30 June 2015 and 31 December 2015, respectively.

As disclosed in the NWCL Annual Reports, on 6 November 2014, NWCL issued notes in the aggregate principal amount of US$900 million (equivalent to approximately HK$6,993 million) with maturity date on 6 November 2019. On 28 January 2015 and 30 March 2015, NWCL issued notes in the aggregate principal amount of HK$800 million and HK$271 million with maturity dates on 28 January 2022 and 30 March 2022, respectively. Primarily as a result of the aforesaid issue of notes and the net increase in bank loans, long term borrowings of the NWCL Group increased from approximately HK$39,423.2 million as at 30 June 2014 to approximately HK$44,163.7 million as at 30 June 2015. The balance increased to approximately HK$48,746.2 million as at 31 December 2015.

According to the NWCL Interim Results for HY2016, as at 31 December 2015, the NWCL Group’s property, plant and equipment, investment properties, land use rights, properties held for development and properties under development of approximately HK$4,189.5 million, HK$8,170.8 million, HK$234.7 million, HK$384.6 million and HK$7,001.3 million, respectively, were pledged as securities for long-term bank borrowings of the NWCL Group.

(6) Gearing ratio

As disclosed in the NWCL Annual Reports and the NWCL Interim Results, gearing ratios (calculated on the basis of net debts over total equity) of the NWCL Group were approximately 36.0%, 45.5% and 48.6% as at 30 June 2014, 30 June 2015 and 31 December 2015, respectively. Gearing ratio of the NWCL Group is expected to improve following the stage receipt of proceeds from the Disposals within 24 months following completion of the Disposals.

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(iii) Market value of property interests of the NWCL Group

As reported in the valuation report (the ‘‘Valuation Report’’) prepared by Knight Frank as set out in Appendix III to the Composite Document which is contained in Appendix IV to the Circular, the market value of the property interests in existing state attributable to the NWCL Group in aggregate (excluding the property interests under the Disposals) was approximately RMB104,623.3 million (equivalent to approximately HK$125,297.3 million) as at 31 December 2015.

Set out below is a summary on the market value of property interests extracted from the Valuation Report:

Completed investment properties Investment properties under development Hotel properties Completed properties held for sale/ properties under and held for development Land and buildings Assets under construction Contracted properties held Total	Market value attributable to the NWCL Group as at 31 December 2015 RMB’000 20,565,957 4,911,200 3,308,050 63,397,363 574,412 3,173,000 8,693,300 104,623,282	Proportion of property interests % 19.7 4.7 3.2 60.6 0.5 3.0 8.3
		100.0

The Adjusted NAV per NWCL Share analysis is set out in section 5.2 below.

We have discussed the valuation basis and methodologies with Knight Frank. We consider that the valuation techniques used in valuing the different properties interests of the NWCL Group to be appropriate.

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3. Reasons for and benefits of the Offers

As stated in the Letter from the Board, the Board is of the opinion that the terms of the Offers are fair and reasonable and are in the interests of the Shareholders as a whole, for the reasons summarised below:

(i) the privatisation of NWCL will allow the Company to invest directly into the PRC property business. While the privatisation of NWCL allows the Company to deploy its resources directly across Hong Kong and the PRC in suitable opportunities and in a more flexible manner, the consolidation of the operations of the Group and the NWCL Group is expected to result in acceleration of the development of the Group’s land bank in the PRC and better utilisation of resources for the Group and the NWCL Group, allowing the Group as a whole to take on large-scale development projects in the PRC which typically require substantial funding;
(ii) the Company expects that it can secure financing on more favourable terms than NWCL with larger asset size and equity base as compared to NWCL. If NWCL becomes a wholly owned unlisted subsidiary of the Company, this will provide enhanced flexibility for the central management of the Group’s treasury functions and thereby the ability to secure the lowest possible funding costs across the Group’s property businesses including those in the PRC; and
(iii) the privatisation of NWCL will streamline the management structure for the Group’s property businesses in Hong Kong and the PRC, facilitating sharing of expertise internally and better coordination among different functions including design and architecture, sales and marketing as well as property leasing and management, hence accelerating the replication between the PRC and Hong Kong markets of successful concepts and further strengthening the ‘‘New World’’ brand image in the two core markets.

The Group has been taking initiatives in optimising its business resources, including the disposal of the hotel management business in July 2015 and, through the NWCL Group, the disposal of non-core lower tiered city projects in December 2015. Total assets value of the NWCL Group has been boosted over the past few years from approximately HK$120,926.1 million as at 30 June 2014 to approximately HK$140,773.3 million as at 31 December 2015, as set out in section 2.2(ii) above. Particularly, substantial value has been unlocked by the sale of projects with long development cycles to Evergrande in December 2015. On the other hand, given the current slower property market in Hong Kong, the growth of property sales of the Group in Hong Kong is uncertain. We consider that the integration of NWCL is strategically justifiable given that (i) the Group can engage in the PRC property business directly without the constraint under the non-competing clause provided by the Company to NWCL at the time of listing of NWCL; (ii) NWCL, as a wholly owned subsidiary of the Company, will have better financial capabilities to take on large scale projects in the PRC and also its funding costs may be lowered by leveraging on the Company’s financial strength; and (iii) the

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privatisation will streamline the Group’s management structure that may lead to improved resources integration and allocation as well as more centralised management. As such, we consider that the Offers are in the interests of the Company and the Shareholders as a whole.

4. Industry overview of the PRC property development market

4.1 Macro-economic environment in the PRC

The PRC economy has grown significantly since the adoption of the reform and opening-up policy by the PRC government in 1978. Such growth was further accelerated by the PRC’s accession to the World Trade Organisation in 2001. From 2001 to 2007, the PRC’s nominal gross domestic product (‘‘GDP’’) increased at a compound annual growth rate (‘‘CAGR’’) of approximately 15.9%. Due to the global financial crisis in late 2008 as well as the subsequent liquidity squeeze and credit crunch which caused a world economic slowdown, the PRC’s GDP growth rate slowed down in 2008 and 2009. In response to the crisis, the PRC government introduced a RMB4 trillion stimulus package in 2008 to finance programs in 10 major areas over 2009 and 2010 in an effort to increase liquidity available to the market. The PRC government also introduced a number of economic stimulus measures, alongside the RMB4 trillion stimulus package, effectively boosting short-term growth of the PRC economy in 2010. Since 2010, global economic growth has slowed on fears that the sovereign debt crisis of certain eurozone countries would deepen. In March 2012, the PRC government announced its GDP growth target of 7.5% for 2012, giving rise to further concerns about the sustainability of PRC economic growth. The PRC’s whole year real GDP growth rate reached 7.7% in 2012, which was slightly higher than the government target of 7.5%. Despite a downward trend since 2013, the PRC’s real GDP maintained stable and moderate growth at 7.3% and 6.9% for 2014 and 2015, respectively. As estimated by the People’s Bank of China (‘‘PBOC’’) based on its latest benchmark forecast published in December 2015, the real GDP growth rate in the PRC will be 6.8% for 2016.

Following the credit crunch and slowdown of the world economy in 2008, the PRC’s nominal GDP increased from approximately RMB31,675 billion in 2008 to approximately RMB67,671 billion in 2015 at a CAGR of approximately 11.5% while the PRC’s GDP per capita increased from approximately RMB23,912 in 2008 to approximately RMB49,229 in 2015 at a CAGR of approximately 10.9%. Over the same period, the PRC’s disposable income of urban households per capita increased at a CAGR of approximately 10.2% from approximately RMB15,781 in 2008 to approximately RMB31,195 in 2015, demonstrating a significant increase in purchasing power of the PRC population.

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The stable and sound economic growth of the PRC and the increasing per capital disposable income of urban households provide a favourable economic environment for the development of the PRC real estate market.

	2008	2009	2010	2011	2012	2013	2014	2015
Nominal GDP (RMB billion)	31,675	34,563	40,890	48,412	53,412	58,802	63,591	67,671
Real GDP growth rate (%)	9.6	9.2	10.6	9.5	7.7	7.7	7.3	6.9
Per capita GDP (RMB)	23,912	25,963	30,567	36,018	39,544	43,320	46,629	49,229
Per capita disposable income of	15,781	17,175	19,109	21,810	24,565	26,467	28,844	31,195
urban households (RMB)

Source: National Bureau of Statistics of the People’s Republic of China (‘‘NBS’’)

4.2 Overview of the PRC property market

The favourable economic environment in the PRC has fuelled the growth of the PRC property market. The investment in real estate industry increased from approximately RMB3,120 billion in 2008 to approximately RMB9,598 billion in 2015, representing a CAGR of approximately 17.4%. According to NBS, approximately 1,306 million sq.m. of GFA of commodity properties were sold in the PRC in 2013, representing a substantial increase as compared to approximately 660 million sq.m. of GFA sold in 2008. Encountering the decelerating economic growth and property purchasers’ waning confidence in the property market, the PRC’s property market cooled down in 2014 and sales in the property market have been declining for 15 consecutive months. According to NBS, approximately 1,206 million sq.m. of GFA of commodity properties were sold in 2014, representing a decrease of approximately 7.7% as compared to those in 2013. As mentioned in the NWCL Annual Report for FY2015 and the NWCL Interim Results for HY2016, in view of the downward pressure faced by the PRC economy, central and local governments of the PRC and PBOC have been taking steps to stimulate the real estate market since the second quarter of 2014. After a series of interest rate cuts, reductions in reserve requirement ratio and easing policies of the real estate market, such as loosening of approval conditions and lowering of the minimum down-payment requirement for first-time home buyers and second home mortgages, have been implemented, the PRC real estate market gradually returned to the upward path in the second half of 2015. The measures to restrain home purchases by foreign institutions and persons also came to its official end in 2015. The PRC’s property market slowly recovered with GFA of commodity properties sold of approximately 1,285 million sq.m. in 2015, representing an increase of approximately 6.6% as compared to that in 2014. From 2008 to 2015, the commodity properties sold comprised mainly residential properties. Total GFA of residential properties sold increased from approximately 593 million sq.m. in 2008 to approximately 1,124 million sq.m. in 2015.

According to NBS, from 2008 to 2015, the average price of commodity properties (including residential properties, office buildings, houses for business use and others) increased at a CAGR of approximately 8.7% and the average price of residential

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properties increased at a CAGR of approximately 8.8% as demand for real estate increased. The upward trend of the PRC property industry was also evidenced by the growth in revenue from the sales of commodity properties, with total real estate sales revenue increasing significantly from approximately RMB2,507 billion in 2008 to approximately RMB8,143 billion in 2013 at a CAGR of approximately 26.6%. As mentioned above, the PRC’s property market cooled down in 2014 and began to recover in 2015. Total real estate sales revenue decreased by approximately 6.3% to approximately RMB7,629 billion in 2014 and increased by approximately 14.4% to approximately RMB8,728 billion in 2015. Sales revenue of residential properties exhibited the same trend as that of commodity properties during the same period.

	2008	2009	2010	2011	2012	2013	2014	2015
Investment
Real estate investment (RMB	3,120	3,624	4,826	6,180	7,180	8,601	9,504	9,598
billion)
Investment in residential property	2,244	2,561	3,403	4,432	4,937	5,895	6,435	6,460
development (RMB billion)
Total GFA
Total GFA of commodity	660	948	1,048	1,094	1,113	1,306	1,206	1,285
properties sold (million sq.m.)
Total GFA of residential properties	593	862	934	965	985	1,157	1,052	1,124
sold (million sq.m.)
Price and revenue
Average price of commodity	3,800	4,681	5,032	5,357	5,791	6,237	6,324	6,793
properties (RMB per sq.m.)
Average price of residential	3,576	4,459	4,725	4,993	5,430	5,850	5,933	6,473
properties (RMB per sq.m.)
Sales revenue of commodity	2,507	4,436	5,272	5,859	6,446	8,143	7,629	8,728
properties (RMB billion)
Sales revenue of residential	2,120	3,843	4,412	4,820	5,347	6,769	6,241	7,275
properties (RMB billion)

Source: NBS

4.3 Urbanisation

In addition to the ongoing housing reform and the stable growth of the PRC economy which has resulted in rising disposable income among the population in the PRC, the rapid pace of urbanisation also contributes to the growth of the real estate market in the PRC.

In recent years, the rate of urbanisation in the PRC has been remarkable. The urban population increased from approximately 624 million in 2008 to approximately 771 million in 2015 with urbanisation rate increasing from approximately 47.0% in 2008 to

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approximately 56.1% in 2015. The urban disposable income per capita also increased from approximately RMB15,781 in 2008 to approximately RMB31,195 in 2015, representing a CAGR of approximately 10.2% over the period.

The table below sets out selective economic statistics relating to urbanisation trends in the PRC for the years indicated:

	2008	2009	2010	2011	2012	2013	2014	2015
Urban population (million)	624	645	670	691	712	731	749	771
Urbanisation rate (%)	47.0	48.3	50.0	51.3	52.6	53.7	54.8	56.1
Per capita disposable income of	15,781	17,175	19,109	21,810	24,565	26,467	28,844	31,195
urban households (RMB)

Source: NBS

In view of the strong price growth of residential properties, the PRC government has imposed measures to regulate the real estate market in recent years. As downward pressure continues to drag down the PRC economy, local governments have begun to relax curbing policies towards the real estate market since 2014. The PRC government aims to support demand for housing for personal use and of improvement nature, and promote the stable and sound development of the PRC real estate market. Based on the above, the fundamental factors affecting the PRC real estate market are still strong. Despite the downward pressure faced by the PRC economy, the PRC economic growth remains relatively strong in the context of the global economy, leading to an increase in disposable income of households and urbanisation. Strong growth in disposable income of households and continued urbanisation in the PRC will in turn provide some support to property prices. Given the PRC government’s dedication to stabilising the economic growth through encouraging consumption and investment in fixed assets, the balance of evidence suggests that the outlook for the PRC real estate market as a fundamental part of the PRC economy will be positive in the long run.

5. Evaluation of the Share Offer Price

5.1 Historical price performance of NWCL Shares

Closing prices of NWCL Shares

The Share Offer Price of HK$7.80 represents:

(i) a premium of approximately 25.6% over the closing price of HK$6.21 per NWCL Share as quoted on the Stock Exchange on the Last Trading Day;

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(ii) a premium of approximately 28.5% over the average closing price of approximately HK$6.07 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 5 trading days immediately prior to and including the Last Trading Day;
(iii) a premium of approximately 29.4% over the average closing price of approximately HK$6.03 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 10 trading days immediately prior to and including the Last Trading Day;
(iv) a premium of approximately 40.8% over the average closing price of approximately HK$5.54 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 30 trading days immediately prior to and including the Last Trading Day;
(v) a premium of approximately 45.8% over the average closing price of approximately HK$5.35 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 60 trading days immediately prior to and including the Last Trading Day;
(vi) a premium of approximately 56.9% over the average closing price of approximately HK$4.97 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Day; and
(vii) a premium of approximately 4.4% over the closing price of HK$7.47 per NWCL Share as quoted on the Stock Exchange on the Latest Practicable Date.

Net asset value per NWCL Share

The Share Offer Price of HK$7.80 represents:

(i) a premium of approximately 11.5% over the audited consolidated net asset value per NWCL Share of approximately HK$6.995 as at 30 June 2015, based on the total number of issued NWCL Shares as at 30 June 2015;
(ii) a premium of approximately 14.6% over the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015, based on the total number of issued NWCL Shares as at 31 December 2015; and
(iii) a discount of approximately 29.4% to the Adjusted NAV per NWCL Share of approximately HK$11.05 as at 31 December 2015, based on the total number of issued NWCL Shares as at the Latest Practicable Date.

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For assessment of the reasonableness of the Share Offer Price, we have analysed the recent share price performance and trading volume of NWCL Shares during the Review Period (as defined below). Set out in the chart below are the closing prices of NWCL Shares as quoted on the Stock Exchange (i) from 2 January 2015, being approximately one year before the Last Trading Day, to 31 December 2015, being the Last Trading Day (the ‘‘Pre-announcement Period’’); and (ii) from 6 January 2016, being the Announcement Date, up to and including the Latest Practicable Date (the ‘‘Post-announcement Period’’, together with the Preannouncement Period, the ‘‘Review Period’’):

Closing prices of NWCL Shares during the Review Period

Source: Website of the Stock Exchange

As illustrated in the chart above, the closing price of NWCL Shares was HK$4.73 per NWCL Share on 2 January 2015. After reaching the lowest point of HK$3.89 per NWCL Share on 8 July 2015, the closing prices of NWCL Shares were generally in an upward trend. The lowest and highest closing prices of NWCL Shares were HK$3.89 on 8 July 2015 and HK$6.23 on 30 December 2015 during the Pre-announcement Period. The Share Offer Price of HK$7.80 per Offer Share represents a premium of approximately 100.5% to the lowest closing price and approximately 25.2% to the highest closing price of NWCL Shares during the Preannouncement Period. It is noted that the closing prices of NWCL Shares were below the Share Offer Price at all times during the Pre-announcement Period. The NWCL Shares closed at HK$6.21 per NWCL Share on the Last Trading Day and surged to HK$7.49 on 6 January 2016, being the Announcement Date. The closing prices of NWCL Shares were in a range of HK$7.47 to HK$7.66 per NWCL Share during the Post-announcement Period.

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The historical price performance of NWCL Shares was further analysed by comparing with the Hong Kong stock market trend during the Review Period. The following chart shows the closing price performance of NWCL Shares against the Hang Seng Index and the Hang Seng Properties Index during the Review Period:

Performance of NWCL Shares against the Hang Seng Index and the Hang Seng Properties Index during the Review Period

==> picture [324 x 159] intentionally omitted <==

Source: Bloomberg

As illustrated in the chart above, during the Review Period, the Hang Seng Index remained relatively stable, with the lowest closing point of 18,319.58 on 12 February 2016 and the highest point of 28,442.75 on 28 April 2015. The relative closing prices of the Hang Seng Index fluctuated in a range between approximately 76.8% and 119.2% as compared to the Hang Seng Index as at 2 January 2015. Similarly, the Hang Seng Properties Index remained relatively stable during the Review Period, with the lowest closing point of 24,569.01 on 21 January 2016 and the highest point of 37,389.86 on 3 June 2015. The relative closing prices of the Hang Seng Properties Index fluctuated in a range between approximately 78.8% and 119.9% as compared to the Hang Seng Properties Index as at 2 January 2015. The performance of NWCL Shares oscillated notably with the relative closing prices in a range between approximately 82.2% and 161.9% as compared to its closing price as at 2 January 2015. For the period from January 2015 to May 2015, the performance of NWCL Shares was closely aligned with the Hang Seng Index and the Hang Seng Properties Index. After that, NWCL Share prices underperformed the Hang Seng Index and the Hang Seng Properties Index until July 2015. Since then, the performance of NWCL Shares has outperformed the Hang Seng Index and the Hang Seng Properties Index. The NWCL Shares surged significantly after the publication of the Joint Announcement and remained close to the Share Offer Price. It should be noted that the closing price of HK$6.21 per NWCL Share on the Last Trading Day represented an increase of approximately 31.3% as compared to its

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closing price of HK$4.73 as at 2 January 2015, while the Hang Seng Index and the Hang Seng Properties Index decreased by approximately 8.1% and approximately 4.1% as compared to 2 January 2015, respectively. We also note that the Share Offer Price represents a premium of approximately 64.9% as compared to the closing price of NWCL Shares as at 2 January 2015.

Trading volume of NWCL Shares

The following table sets out the trading volume of NWCL Shares during the Review Period:

			Percentage of
			average daily
	Average daily	Percentage of	trading volume
	trading volume	average daily	to total number
	for the month/	trading volume	of Offer Shares
	period of	to total issued	as at the Latest
	NWCL Shares	NWCL Shares	Practicable Date
Month/period	(Note 1)	(Note 2)	(Note 3)
2015
January	1,281,682	0.015%	0.047%
February	958,297	0.011%	0.035%
March	1,025,600	0.012%	0.038%
April	2,134,042	0.025%	0.078%
May	1,618,245	0.019%	0.059%
June	1,380,644	0.016%	0.051%
July	1,498,320	0.017%	0.055%
August	1,032,702	0.012%	0.038%
September	1,340,516	0.015%	0.049%
October	1,165,874	0.013%	0.043%
November	1,133,582	0.013%	0.042%
December	2,774,359	0.032%	0.102%
2016
January	3,980,318	0.046%	0.146%
February (up to the Latest
Practicable Date)	1,844,406	0.021%	0.068%

Source: Website of the Stock Exchange

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Notes:

Average daily trading volume is calculated by dividing the total trading volume for the month/period by the number of trading days during the month/period excluding any trading day on which trading of NWCL Shares on the Stock Exchange was suspended for the whole trading day.
Based on the total number of issued NWCL Shares at the end of the respective month/the Latest Practicable Date (where applicable).
Based on 2,724,652,383 Offer Shares held by the NWCL Shareholders other than those already held by the Offeror and the Company as at the Latest Practicable Date.

As illustrated in the above table, the monthly average daily trading volume of NWCL Shares during the Pre-announcement Period ranged from approximately 958,297 NWCL Shares to approximately 2,774,359 NWCL Shares, representing approximately 0.011% to 0.032% of the total number of NWCL Shares in issue for the respective month, and approximately 0.035% to 0.102% of the total number of Offer Shares held by the NWCL Shareholders other than those already held by the Offeror and the Company as at the Latest Practicable Date.

During the Post-announcement Period, the total trading volume surged to 12,439,085 NWCL Shares on 6 January 2016 (being first trading day after the publication of the Joint Announcement) with period average daily trading volume 1,844,406 NWCL Shares up to the Latest Practicable Date. We consider that the relatively high trading volume during the Post-announcement Period was mainly stimulated by the publication of the Joint Announcement. In view of the above, we consider that, save for the Post-announcement Period, the overall liquidity of the NWCL Shares was in general relatively low in normal circumstances. Given the low liquidity of NWCL Shares, we consider that it is difficult for NWCL to raise funds from the equity market.

5.2 Adjusted NAV

It is noted that the carrying value of property interests as stated in the financial statements of NWCL may or may not reflect current market value, details of which are discussed in section 2.2(ii) above. A summary of market value of property interests held by the NWCL Group is stated in section 2.2(iii) above.

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In the context of our advice on the Offers, we have reassessed the unaudited consolidated net asset value of the NWCL Group as at 31 December 2015 and adjustments as set out below. The Adjusted NAV calculation is with reference to Appendix II to the Composite Document. Given a significant portion of the NWCL Group’s assets consists of investment properties, land use rights, properties held for/ under development and completed properties held for sale, we consider that the Adjusted NAV better reflects the underlying net asset value of the NWCL Group.

Unaudited consolidated net asset value attributable to the equity holders of NWCL as at 31 December 2015 Adjustments: Revaluation surplus arising from valuation of the property interests attributable to the NWCL Group as at 31 December 2015(Note 1) Deferred taxes on attributable revaluation surplus, net of tax indemnity(Note 2) Estimated pro forma gain on the Disposals (Note 3) Adjusted NAV Adjusted NAV per NWCL Share (Note 4)	HK$’000 59,169,685 39,704,564 (9,866,224)
	89,008,025 7,115,983
	96,124,008
	HK$11.05

Notes:

The revaluation surplus represents the excess of market value of the property interests held by the NWCL Group as at 31 December 2015 as set out in the Valuation Report over their corresponding book values as at 31 December 2015 (after adjusting for the relevant interests not attributable to the NWCL Group) based on the unaudited financial statements of the NWCL Group as at 31 December 2015.
Relevant PRC taxes on property interests included corporate income tax and land appreciation tax. Deferred taxes on revaluation surplus is estimated on the basis that surplus on all categories of property interests shall be subject to corporate income tax and estimation of land appreciation taxes was only determined for the surplus of completed properties for sale and properties held for and under development. In July 1999, a deed of tax indemnity was entered into between the Company and NWCL whereby the Company has undertaken to indemnify the NWCL Group in respect of relevant corporate income tax and land appreciation tax payable in consequence of sales of certain properties held by the NWCL Group as at 31 March 1999. The outstanding tax indemnity payable by the Company as at 31 December 2015 of approximately HK$4,330.0 million is included to derive the net deferred taxes on revaluation surplus of property interests. Set out below is the reconciliation of the amount of deferred taxes on attributable revaluation surplus, net of tax indemnity.

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Unaudited deferred taxes on attributable revaluation surplus of the NWCL Group as at 31 December 2015 Less: Outstanding tax indemnity payable by the Company as at 31 December 2015 Deferred taxes on attributable revaluation surplus, net of tax indemnity	HK$ million 14,196.2 (4,330.0) 9,866.2

The estimated pro forma gain on the Disposals is arrived at based on the considerations (being adjusted for certain estimated contingent costs in accordance with the terms of the sales and purchase agreements) of the Disposals after deducting the estimated attributable consolidated net asset values of the disposed companies under the Disposals (the ‘‘Disposal Groups’’) as at the corresponding completion dates and after taking into account the estimated tax payable, being calculated at a rate of 10% on the difference between the relevant considerations and the costs of investment of the Disposal Groups in accordance with the relevant tax laws in the PRC.
The Adjusted NAV per NWCL Share is arrived at based on 8,701,671,754 NWCL Shares in issue as at the Latest Practicable Date.

The calculation of the Adjusted NAV above has been prepared by NWCL solely with reference to, among other things, the latest published unaudited consolidated net asset value of NWCL as at 31 December 2015, the estimated net gain arising from the Disposals and the revaluation surplus arising from the change in fair value of the property interests held by the NWCL Group as set out in the Valuation Report. Shareholders should note that the calculation has not taken into account any revenue recognised from the sales of property interests and relevant costs/expenses incurred thereof by the NWCL Group since 1 January 2016 and up to the Latest Practicable Date and that the actual net gain on the Disposals can only be ascertained when the attributable consolidated net asset values of the Disposal Groups and the incidental transaction costs are determined after completion of the Disposals.

The Adjusted NAV per NWCL Share of approximately HK$11.05 is substantially higher than the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015. The Share Offer Price of HK$7.80 per Offer Share represents a discount of approximately 29.4% to the Adjusted NAV. As such, we consider that the Share Offer Price is fair and reasonable to the Offeror and the Company in this regard.

5.3 Comparable companies

In assessing whether the Share Offer Price is fair and reasonable, we have analysed the price-to-earnings ratio(s) (the ‘‘P/E Ratio(s)’’) and price-to-net asset value ratio(s) (the ‘‘P/NAV Ratio(s)’’), the two most commonly used valuation benchmarks, as implied by the Share Offer Price of HK$7.80 per Offer Share under the Share Offer with the P/E Ratios and P/NAV Ratios of the comparable companies. We consider that the NWCL Group is categorised as a property developer in the PRC. Therefore, we have reviewed all property companies listed on the Stock Exchange (the ‘‘Peer Comparables’’), which

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are principally engaged in property development in the PRC as shown in their latest published annual reports, and which had market capitalisation of more than HK$30,000 million and less than HK$100,000 million as at the Last Trading Day. On this basis, we have, on our best knowledge and efforts, identified the following six Peer Comparables, which represent an exhaustive list of peer comparables identified on the Stock Exchange’s website based on the above criteria, and set them out in the table below.

			Audited
		consolidated			Consolidated
	Market		profit		net asset value
	capitalisation	attributable to		Historical	attributable to		Historical
	as at the Last	equity	holders	P/E Ratio	equity	holders	P/NAV	Ratio
Peer Comparables	Trading Day		(Note 1)	(Note 1)		(Note 2)		(Note 2)
	HK$ million	HK$ million		Times	HK$	million		Times
Country Garden
Holdings Company
Limited
(stock code: 2007)	71,830		12,275	5.85		75,896		0.95
Evergrande
(stock code: 3333)	95,385		15,125	6.31		69,656		1.37
Guangzhou
R&F Properties
Company Limited
(stock code: 2777)	30,774		6,265	4.91		44,445		0.69
Longfor Properties
Company Limited
(stock code: 0960)	67,441		10,024	6.73		59,944		1.13
Shimao Property
Holdings Limited
(stock code: 0813)	47,852		9,725	4.92		58,528		0.82
Sino-Ocean Land
Holdings Limited
(stock code: 3377)	37,343		5,517	6.77		53,172		0.70
High	95,385		15,125	6.77		75,896		1.37
Low	30,774		5,517	4.91		44,445		0.69
Mean	58,438		9,822	5.91		60,274		0.94
NWCL (as implied by
the Share Offer
Price under the
Share Offer)	67,810(Note 3)		3,313	20.47(Note 4)		59,170(Note 5)		1.15(Note 6)

Source: Website of the Stock Exchange

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Notes:

The historical P/E Ratio of each of the Peer Comparables is calculated based on its latest audited consolidated profit attributable to equity holders and its closing market capitalisation as at the Last Trading Day, or the last closing market capitalisation before suspension of the relevant shares on the Last Trading Day, where applicable.
The historical P/NAV Ratio of each of the Peer Comparables is calculated based on its latest published consolidated net asset value attributable to equity holders and its closing market capitalisation as at the Last Trading Day, or the last closing market capitalisation before suspension of the relevant shares on the Last Trading Day, where applicable.
We have taken the Share Offer Price of HK$7.80 per Offer Share for the purpose of determining the market capitalisation of NWCL as at the Last Trading Day.
The historical P/E Ratio of NWCL is calculated based on its latest audited consolidated profit attributable to equity holders and its market capitalisation represented by the Share Offer Price.
The unaudited consolidated net asset value attributable to equity holders of NWCL as at 31 December 2015 is extracted from the NWCL Interim Results for HY2016.
The historical P/NAV Ratio is calculated based on the market capitalisation represented by the Share Offer Price as at the Last Trading Day over the unaudited consolidated net asset value attributable to equity holders of NWCL as at 31 December 2015.
The amounts denominated in RMB in the annual/interim reports of the Peer Comparables have been converted into HK$ at an exchange rate of RMB1.00:HK$1.20 for the purpose of illustration only.

(i) P/E Ratios

The historical P/E Ratios of the Peer Comparables range from approximately 4.91 times to approximately 6.77 times, with a mean of approximately 5.91 times. Based on the Share Offer Price of HK$7.80 per Offer Share, the P/E Ratio as implied by the Share Offer Price is approximately 20.47 times. This P/E Ratio represents a significant premium over the P/E Ratios of the Peer Comparables. We note that NWCL Shares were traded at a P/E Ratio of approximately 16.3 times based on the closing price of HK$6.21 on the Last Trading Day which was also higher than those of the Peer Comparables. Furthermore, share offer prices under privatisation proposals are normally higher than the then prevailing share prices. Our analysis on recent privatisation cases is set out in section 5.4 below.

(ii) P/NAV Ratios

P/NAV Ratio is one of the most commonly used metrics for judging valuations of companies engaged in property development. The historical P/NAV Ratios of the Peer Comparables range from approximately 0.69 time to approximately 1.37 times, with a mean of approximately 0.94 time.

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The P/NAV Ratio, as implied by the Share Offer Price and based on the unaudited consolidated net asset value attributable to equity holders of NWCL as at 31 December 2015, is approximately 1.15 times, which falls within the range of the P/NAV Ratios of the Peer Comparables.

5.4 Privatisation precedents

We have, on our best knowledge and efforts, identified and reviewed a list of successful privatisation precedents of listed companies on the Stock Exchange of which the consideration was settled by cash and was first announced between 2 January 2011 and the Latest Practicable Date (the ‘‘Privatisation Precedents’’), which represents an exhaustive list of successful privatisation precedents identified on the Stock Exchange’s website based on the above criteria. The table below illustrates the premium/discount of the cash consideration offered by the Privatisation Precedents over/to the prevailing share prices prior to announcement of the offer/cancellation prices and net asset values of the shares of the Privatisation Precedents.

				Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium/
				the share price of the		relevant	company		(discount) of
				prior to initial announcement				of	offer/cancellation
				the	privatisation proposal				price over/(to)
				Closing					the consolidated
				price of					net asset value
			Offer/	last	Last 30	Last 90	Last 180		attributable to
Date of initial	Privatisation		cancellation	trading	trading	trading		trading	equity holders
announcement	Precedents	Principal activities	price	day	days	days		days	per share
			HK$						Approximate %
October 2015	Wumart Stores, Inc.	Operation of superstores and minimarts in	6.22	90.2%	68.8%	31.8%		15.4%	65.7%
	(stock code: 1025)	the PRC
August 2015	Jingwei Textile	Manufacturing and sale of textile	12.00	8.1%	18.9%	6.6%		18.3%	25.9%
	Machinery Company	machinery and provision of trust and
	Limited	fiduciary services in the PRC
	(stock code: 0350)
May 2015	Dorsett Hospitality	Hotel development, ownership and	1.80	32.4%	41.7%	42.4%		34.3%	(6.7)%
	International Limited	operation
	(stock code: 2266)
February 2015	econtext Asia Limited	Online payment services, advertising	4.09	41.0%	59.9%	51.3%		43.2%	37.1%
	(stock code: 1390)	related services and other
		e-commerce solutions
December 2014	Hunan Nonferrous	Integrated producer of nonferrous metals,	4.20	68.7%	55.6%	58.4%		70.0%	243.9 %
	Metals Corporation	excluding aluminium,
	Limited	in the PRC
	(stock code: 2626)
May 2014	Regent Manner	Provision of integrated surface-mount	1.80	32.4%	37.5%	38.5%		35.3%	19.8%
	International	technology production solutions
	Holdings Limited
	(stock code: 1997)
April 2014	Wing Hang Bank,	Banking and related financial services	125.00	1.6%	11.6%	11.8%		22.3%	74.1%
	Limited
	(stock code: 0302)
December 2013	Great Wall Technology	Development, manufacture, sale and	3.20	42.9%	74.9%	95.9%		100.0%	(25.5)%
	Company Limited	research of personal computers and
	(stock code: 0074)	information terminal products, storage
		products, power supply products,
		monitoring terminals, liquid crystal
		display television products and
		electronics manufacturing services
		business
August 2013	Magic Holdings	Research and development, manufacture,	6.30	24.8%	25.7%	42.3%		66.7%	313.3%
	International Limited	sale and marketing of facial masks and
	(stock code: 1633)	skincare products

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				Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium of offer/cancellation price over	Premium/
				the share price of the		relevant	company		(discount) of
				prior to initial announcement				of	offer/cancellation
				the	privatisation proposal				price over/(to)
				Closing					the consolidated
				price of					net asset value
			Offer/	last	Last 30	Last 90	Last 180		attributable to
Date of initial	Privatisation		cancellation	trading	trading	trading		trading	equity holders
announcement	Precedents	Principal activities	price	day	days	days		days	per share
			HK$						Approximate %
January 2013	PCD Store (Group)	Operation and management of high-end	1.20	10.1%	20.7%	45.5%		59.4%	75.4%
	Limited	department stores and outlet malls in
	(stock code: 0331)	the PRC
January 2013	Trauson Holdings	Design, manufacture and sale of various	7.50	66.7%	81.7%	96.4%		121.0%	379.5%
	Company Limited	trauma and spine orthopaedic implants
	(stock code: 0325)	and related surgical tools
February 2012	Alibaba.com Limited	E-commerce for small businesses	13.50	45.9%	58.8%	59.3%		42.0%	658.6%
	(stock code: 1688)
January 2012	Samling Global Limited	Sale of timber logs from concession and	0.76	102.7%	102.7%	80.5%		21.6%	(32.9)%
	(stock code: 3938)	tree plantation areas, manufacturing
		and sale of plywood and veneer,
		provision of upstream support, and
		manufacturing and sale of timber
		related products
December 2011	Hang Ten Group	Design, marketing, retail and wholesale of	2.70	58.8%	54.3%	60.4%		40.4%	177.5%
	Holdings Limited	apparel and accessories under various
	(stock code: 0448)	brand names including ‘‘Hang Ten’’
		and licensing of its proprietary
		trademark ‘‘Hang Ten’’ and associated
		trademarks
October 2011	Zhengzhou China	Sale and distribution of gas fuel and	14.73	45.8%	38.4%	22.8%		10.9%	37.4%
	Resources Gas	related products and gas connection
	Company Limited	operations in the PRC
	(stock code: 3928)
August 2011	HannStar Board	Manufacture of printed circuit boards for	1.25	47.1%	51.8%	48.0%		23.8%	(42.9)%
	International	the notebook computer industry
	Holdings Limited	worldwide
	(stock code: 0667)
July 2011	China Resources	Open foundry operations as well as	0.48	43.3%	29.7%	21.9%		27.5%	16.2%
	Microelectronics	integrated circuit (IC) design, discrete
	Limited	devices and IC testing and packaging
	(stock code: 0597)
July 2011	International Mining	Design, manufacture and sale of	8.50	29.8%	15.8%	16.3%		23.8%	226.0%
	Machinery Holdings	underground longwall coal mining
	Limited (stock code:	equipment in the PRC
	1683)
July 2011	Cosway Corporation	Direct selling of consumer products	1.10	34.1%	45.1%	32.9%		23.8%	472.5%
	Limited (stock code:	including health and nutrition,
	0288)	slimming, personal care, skin care,
		cosmetics, perfumes, household and
		car care, food and beverage, water
		filtration systems, kitchenware, body
		shaping lingerie, etc. through network
		marketing and property investment
May 2011	Little Sheep Group	Operation of a full service restaurant	6.50	30.0%	29.5%	32.3%		30.8%	383.9%
	Limited	chain, provision of catering services
	(stock code: 0968)	and sale of related food products
January 2011	Shanghai Forte Land	Development and sale of high quality	3.50	25.4%	34.3%	43.0%		52.4%	2.8%
	Company Limited	commercial and residential properties
	(stock code: 2337)	in the PRC
January 2011	Fubon Bank (Hong	Provision of financial services	5.20	37.6%	43.3%	39.4%		45.9%	47.7%
	Kong) Limited	encompassing wealth management,
	(stock code: 0636)	consumer and wholesale banking,
		financial markets, securities brokerage
		and investment services
	High			102.7%	102.7%	96.4%		121.0%	658.6%
	Low			1.6%	11.6%	6.6%		10.9%	(42.9)%
	Mean			41.8%	45.5%	44.4%		42.2%	143.1%
January 2016	NWCL		7.80	25.6%	40.8%	54.0%		56.9%	14.6% (Note 1)

Source: Bloomberg and published circulars/documents or announcements relating to the above proposals

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LETTER FROM QUAM CAPITAL

Notes:

Based on the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015.
The amounts denominated in RMB and US$ in the Privatisation Precedents have been converted into HK$ at an exchange rate of RMB1.00:HK$1.20 and US$1.00:HK$7.78, respectively, for the purpose of illustration only.

As illustrated in the table above, all the offer/cancellation prices of the Privatisation Precedents represent premiums over the then prevailing market prices of the relevant shares prior to initial announcement of the privatisation over the periods indicated. The premiums as represented by the offer/cancellation prices over the closing prices or average closing prices of the Privatisation Precedents for (i) the last trading days prior to initial announcement of the privatisation proposals ranged from approximately 1.6% to 102.7% with an average of approximately 41.8%; (ii) 30 trading days prior to initial announcement of the privatisation proposals ranged from approximately 11.6% to 102.7% with an average of approximately 45.5%; (iii) 90 trading days prior to initial announcement of the privatisation proposals ranged from approximately 6.6% to 96.4% with an average of approximately 44.4%; and (iv) 180 trading days prior to initial announcement of the privatisation proposals ranged from approximately 10.9% to 121.0% with an average of approximately 42.2%. The premiums as represented by the Share Offer Price over the closing price or average closing prices of NWCL Shares of approximately 25.6%, 40.8%, 54.0% and 56.9% over (i) the closing price on the Last Trading Day; and (ii) the average closing prices for the periods of 30, 90 and 180 trading days up to and including the Last Trading Day, respectively, are within the ranges of those of the Privatisation Precedents.

The Share Offer Price of HK$7.80 represents a premium of approximately 14.6% over the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015, based on the total number of issued NWCL Shares as at 31 December 2015. This is significantly lower than the mean of those of the Privatisation Precedents of a premium of approximately 143.1%. Given that the Privatisation Precedents comprise companies principally engaged in various industries which by nature have a wide range of premiums over/discounts to net asset value, we have supplemented our analysis above by considering those privatisation precedents involving companies principally engaged in the real estate sector as set out below.

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5.5 Privatisation precedents in the real estate sector

In addition to the analysis on the Privatisation Precedents, we have on our best knowledge and efforts, identified and reviewed all successful privatisation precedents involving companies principally engaged in property development listed on the Stock Exchange announced between 1 January 2005 and the Latest Practicable Date (the ‘‘RE Privatisation Comparables’’), which represent an exhaustive list of successful privatisation precedents identified on the Stock Exchange’s website based on the above criteria. The table below illustrates the premiums over prevailing market prices at which the RE Privatisation Comparables have been priced. The below table also illustrates a comparison to the level of premiums over/discounts to the respective net asset values and adjusted net asset values of the RE Privatisation Comparables.

						Premium/	Discount of
				Premium of offer/cancellation		(discount) of	offer/
				price	over	offer/	cancellation
					the average	cancellation	price to the
					closing price of	price over/(to)	consolidated
					the last 30	the consolidated	adjusted net
				the last closing	trading days	net asset value	asset value
			Offer/	price prior to	prior to	attributable to	attributable to
Date of initial	RE Privatisation		cancellation	announcement	announcement	equity holders	equity holders
announcement	Comparables	Principal activities	price	of privatisation	of privatisation	per share	per share
			(HK$)			(Approximate %)	(Approximate %)
January 2011	Shanghai Forte Land	Development and sale of	3.50	25.4%	31.9%	7.4%	(26.2)%
	Co. Ltd.	high quality
	(stock code: 2337)	commercial and
		residential properties
		in the PRC
April 2010	Wheelock Properties	Ownership of properties	13.00	143.9%	162.1%	(3.3)%	(12.1)%
	Limited	for development and
	(stock code: 49)	letting, and
		investment holding
April 2007	Shimao International	Property development	1.05	50.0%	45.6%	38.2%	(19.7)%
	Holdings Limited	and investment
	(stock code: 649)
May 2005	Henderson China	Property development	8.00	66.7%	64.3%	(42.7)%	(36.1)%
	Holdings Limited	and investment,
	(stock code: 246)	project management,
		property management,
		finance and
		investment holding
	High			143.9%	162.1%	38.2%	(12.1)%
	Low			25.4%	31.9%	(42.7)%	(36.1)%
	Mean			71.5%	76.0%	(0.1)%	(23.5)%
January 2016	NWCL		7.80	25.6%	40.8%	14.6% (Note 1)	(29.4)% (Note 2)

Source: Bloomberg and published circulars/documents or announcements related to the above proposals

Notes:

Based on the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015.
Based on the Adjusted NAV.

Based on the above table, the average premiums as represented by the offer/ cancellation prices offered by the RE Privatisaton Comparables over the last closing prices and the average closing prices of the last 30 trading days prior to announcement of the privatisation proposals were approximately 71.5% and 76.0%, respectively. The

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LETTER FROM QUAM CAPITAL

premiums as implied by the Share Offer Price for the corresponding periods are approximately 25.6% and 40.8%, respectively, which are much lower than the average premiums offered by the RE Privatisation Precedents, respectively, on which basis we consider the pricing is fair and reasonable to the Offeror and the Company.

In addition, the offer/cancellation prices offered by the RE Privatisation Comparables ranged from a discount of approximately 42.7% to the net asset value per share to a premium of approximately 38.2% over the net asset value per share of the respective companies, with a mean of a discount of approximately 0.1%. The premium as implied by the Share Offer Price over the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015 is approximately 14.6%, which is within the range of those of the RE Privatisation Precedents. The offer/ cancellation prices offered by the RE Privatisation Comparables ranged from a discount of approximately 12.1% to approximately 36.1% to the adjusted net asset value per share of the respective companies, with a mean of approximately 23.5%. The discount as implied by the Share Offer Price to the Adjusted NAV per NWCL Share of approximately HK$11.05 as at 31 December 2015 is approximately 29.4% which is higher than the average of those of the RE Privatisation Comparables.

Taking into account our analysis above, in particular that (i) the premiums as represented by the Share Offer Price over (a) the closing price on the Last Trading Day; and (b) the average closing prices for the periods of 30, 90 and 180 trading days up to and including the Last Trading Day, are within the ranges of those of the Privatisation Precedents; and (ii) the premium over the unaudited consolidated net asset value per NWCL Share as at 31 December 2015 and the discount to the Adjusted NAV per NWCL Share, as represented by the Share Offer Price, are within the ranges of those of the Privatisation Precedents and the RE Privatisation Comparables, we consider that the Share Offer Price is fair and reasonable to the Offeror and the Company.

6. Analysis on the Option Offer

As summarised under the paragraph headed ‘‘Option Offer’’ in the Letter from the Board, there were 25,544,661 NWCL Options outstanding as at the Latest Practicable Date, which when exercised in full, will entitle the holders to subscribe for 25,544,661 new NWCL Shares.

HSBC, on behalf of the Offeror, is making the Option Offer to the NWCL Optionholders for the cancellation of every vested and unvested NWCL Option in accordance with Rule 13 of the Takeovers Code. The Option Offer is conditional upon the Share Offer becoming or being declared unconditional in all respects. The table below sets out the relevant exercise prices of the NWCL Options under the NWCL Share Option Schemes and the relevant Option Offer Prices.

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LETTER FROM QUAM CAPITAL

NWCL	Options under the share option scheme of NWCL adopted on 26 November 2002	Options under the share option scheme of NWCL adopted on 26 November 2002
	NWCL Option exercise price	Option Offer Price
	HK$	HK$
	3.036	4.764
	2.705	5.095

NWCL Options under the share option scheme of NWCL adopted on 22 November 2011

NWCL	Option exercise price	Option Offer Price
	HK$	HK$
	2.45	5.35
	3.37	4.43
	3.88	3.92
	3.35	4.45
	2.762	5.038
	4.01	3.79
	3.97	3.83
	4.72	3.08
	4.42	3.38
	4.968	2.832
	5.42	2.38
	4.504	3.296

The Option Offer Price is calculated based on a ‘‘see-through’’ basis and the Share Offer Price of HK$7.80. Such ‘‘see-through’’ basis is normally adopted in Hong Kong for privatisation proposals and general offers of a similar nature. On the basis that (i) all NWCL Options are in-the-money (i.e. exercise prices being below the Share Offer Price); (ii) the Option Offer Prices are based on the ‘‘see-through’’ basis; and (iii) any NWCL Options granted under the NWCL Share Option Schemes that are not exercised or cancelled pursuant to the acceptance of the Option Offer will lapse automatically 14 days after the date on which the Share Offer becomes or is declared unconditional in all respects in accordance with the terms of the NWCL Share Option Schemes, we consider the Option Offer Prices to be fair and reasonable.

We note that if any NWCL Option is vested and is exercised in accordance with the terms of the NWCL Share Option Schemes prior to the Closing Date, any NWCL Shares issued as a result of the exercise of those NWCL Options prior to the Closing Date will be subject to and eligible to participate in the Share Offer.

7. Financial effects of the Offers on the Group

Following completion of the Offers (assuming that all the Offer Shares are acquired, whether under the Offers or subsequently by way of the compulsory acquisition), NWCL will become an indirect wholly owned subsidiary of the Company.

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LETTER FROM QUAM CAPITAL

The unaudited pro forma consolidated statement of adjusted assets and liabilities of the Group (the ‘‘Unaudited Pro Forma Financial Position’’) is set out in Appendix II to the Circular for illustrative purpose. The Unaudited Pro Forma Financial Position was prepared based on the unaudited pro forma consolidated statement of adjusted assets and liabilities of the Group as at 31 December 2015 as if the Offers had been completed on 31 December 2015 (the ‘‘Completion Scenario’’).

7.1 Earnings

As NWCL is a non-wholly owned subsidiary of the Company, part of its earnings are attributable to the non-controlling interests of the Company. Following completion of the privatisation of NWCL, NWCL will become a wholly owned subsidiary of the Company and accordingly, the financial results of the NWCL Group will be fully consolidated into that of the Company and fully attributable to the Shareholders.

As stated in the Letter from the Board, profit attributable to the Shareholders for the year ended 30 June 2015 would increase by approximately HK$771.1 million from approximately HK$19,112.0 million to approximately HK$19,883.1 million, assuming completion of the Offers had taken place on 1 July 2014.

Having considered the above and (i) the profitable track record of the NWCL Group with net profits of approximately HK$4,799.3 million, HK$3,470.0 million and HK$437.6 million for FY2014, FY2015 and HY2016, respectively, as discussed in section 2.2 above; (ii) the one-off nature of the expenses in relation to the Offers; and (iii) the possible cost savings, profit attributable to the Shareholders are expected to be enhanced after privatisation of NWCL.

7.2 Net asset value

As at 31 December 2015, the unaudited consolidated net asset value of the Group was approximately HK$217,352.4 million, representing net asset value of approximately HK$23.45 per Share based on 9,266,935,984 Shares in issue as at the Latest Practicable Date. As illustrated in the Unaudited Pro Forma Financial Position, the unaudited pro forma net asset value of the Group as at 31 December 2015 would be approximately HK$196,777.6 million under the Completion Scenario, representing unaudited pro forma net asset value of approximately HK$21.23 per Share based on 9,266,935,984 Shares in issue as at the Latest Practicable Date. Given that the reduction on the pro forma net asset value per Share as compared to the net asset value per Share as at 31 December 2015 is not significant, we consider that the Offers are not expected to have material adverse effect on the Group’s net asset value.

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LETTER FROM QUAM CAPITAL

7.3 Working capital position

As stated in the Letter from the Board, on the assumption that no new NWCL Shares are allotted and issued pursuant to any exercise of the NWCL Options prior to the close of the Offers and that the Share Offer is accepted in full by holders of the Offer Shares and accordingly on the basis that there will be 2,724,652,383 Offer Shares, the value of the Share Offer would be approximately HK$21,252.3 million and the total amount required to satisfy the cancellation of all the outstanding NWCL Options is approximately HK$89.7 million. In aggregate, the Offers are valued at approximately HK$21,342.0 million.

On the assumption that 25,544,661 NWCL Shares are allotted and issued upon the exercise in full of all the outstanding NWCL Options prior to the close of the Offers and that the Share Offer is accepted in full by the holders of the Offer Shares and accordingly on the basis that there will be 2,750,197,044 Offer Shares (including 25,544,661 NWCL Shares allotted and issued as a result of the exercise of all the outstanding NWCL Options prior to the close of the Offers), the value of the Share Offer would be approximately HK$21,451.5 million. In that case, no amount will be payable by the Offeror under the Option Offer.

As set out in the Unaudited Pro Forma Financial Position, the unaudited pro forma cash and bank balances of the Group as at 31 December 2015 under the Completion Scenario would decrease to approximately HK$44,109.5 million, as compared to the unaudited cash and bank balances of the Group of approximately HK$64,550.0 million as at 31 December 2015 as a result of the cash outlays for the Offers of approximately HK$20,440.5 million (excluding estimated cash to acquire the NWCL Shares held by the non-wholly owned subsidiaries of the Company) from the Group’s internal resources. As stated in the joint announcements of the Company and NWCL dated 2 December 2015 and 29 December 2015, the circular of NWCL dated 23 December 2015 and the circulars of each of NWD and NWCL dated 19 January 2016, the proceeds from the Disposals will also be applied towards the working capital and investment requirements of the Group and the NWCL Group as appropriate.

As disclosed in Appendix I to the Circular, the Directors are of the opinion that, taking into consideration the effect of the Offers and the financial resources available to the Group, including internally generated funds and external borrowings, the Group will have sufficient working capital for its present requirements, that is for at least the next twelve months from the date of the Circular.

Based on the foregoing, we consider that Offers will not have any material adverse impact on the working capital position of the Group.

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LETTER FROM QUAM CAPITAL

7.4 Gearing

As disclosed in the Letter from the Board, the Offeror intends to finance the cash required for the Offers from the its (or the Company’s) own cash reserves. This would result in a near-term hike in the Group’s gearing ratio, being the aggregate of borrowings less cash and bank balances divided by total equity, should the privatisation of NWCL go through.

As set out in the NWD Interim Results for HY2016, the gearing ratio of the Group as at 31 December 2015 was approximately 31.4%, which is calculated based on the net debts (being the aggregate of borrowings excluding loans from non-controlling shareholders less cash and bank balances) divided by total equity.

Based on the respective pro forma amounts of net debts and total equity as set out in the Unaudited Pro Forma Financial Position, we noted that the pro forma gearing ratio of the Group as at 31 December 2015 would be approximately 45.0% under the Completion Scenario, representing an increase of approximately 14 percentage points as compared to the actual gearing ratio of the Group as at 31 December 2015 of approximately 31.4% as disclosed in the NWD Interim Results for HY2016. We consider that the gearing ratio of the Group is still at comfortable level upon completion of the privatisation of NWCL. It is noted that the total cash consideration of the Disposals was RMB20,800 million (equivalent to approximately HK$24,910.2 million). The net cash proceeds from the Disposals, which have not been taken into account in the abovementioned pro forma gearing ratio, are expected to reduce the Group’s gearing ratio.

In view of the foregoing, we are of the opinion that the Offers are not expected to have any material adverse financial effect on the Group.

RECOMMENDATION

In arriving at our recommendation in respect of the Offers, we have considered the principal factors and reasons as discussed above and in particular the following (which should be read in conjunction with and interpreted in the full context of this letter):

. the NWCL Group is strategically important to the Group;
. the privatisation of NWCL is expected to result in immediate earnings accretion;
. a significant portion of the NWCL Group’s assets consist of investment properties, land use rights, properties held for development, properties under development and completed properties held for sale in the PRC;
. reasons for and benefits of the Offers;

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LETTER FROM QUAM CAPITAL

. evaluation of the Share Offer Price:
(i) the Share Offer Price of HK$7.80 represents a discount of approximately 29.4% to the Adjusted NAV per NWCL Share of approximately HK$11.05 per NWCL Share;
(ii) the P/NAV ratio of NWCL as implied by the Share Offer Price and based on the unaudited consolidated net asset value attributable to equity holders of NWCL as at 31 December 2015 is within the range of the P/NAV Ratios of the Peer Comparables;
(iii) the premiums as represented by the Share Offer Price over (a) the closing price on the Last Trading Day; and (b) the average closing prices for the periods of 30, 90 and 180 trading days up to and including the Last Trading Day, are within the ranges of those of the Privatisation Precedents; and
(iv) the premium over the unaudited consolidated net asset value per NWCL Share as at 31 December 2015 and the discount to the Adjusted NAV per NWCL Share, as represented by the Share Offer Price, are within the ranges of those of the Privatisation Precedents and the RE Privatisation Comparables;
. the Option Offer Prices are based on the ‘‘see-through’’ basis; and
. the Offers are not expected to have any material adverse financial impact on the Group.

Based on the above, we consider that the Offers are in the interests of the Shareholders and the shareholder of the Offeror.

Yours faithfully,

For and on behalf of Quam Capital Limited Noelle Hung Managing Director

Ms. Noelle Hung is a licensed person and a responsible officer of Quam Capital registered with the SFC to carry out type 6 (advising on corporate finance) regulated activities under the SFO. She has over 15 years of experience in corporate finance.

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FINANCIAL INFORMATION

APPENDIX I

(A) FINANCIAL INFORMATION OF THE GROUP

1. Financial Reports

The audited consolidated financial statements of the Group for the three financial years ended 30 June 2013, 2014 and 2015 are disclosed in the annual reports of the Company for each of such three financial years respectively, and the unaudited condensed consolidated financial statements of the Group for the six months ended 31 December 2015 are disclosed in the interim results announcement of the Company dated 23 February 2016. All of the above financial statements have been published on the website of the Company (www.nwd.com.hk) and the website of the Stock Exchange (www.hkexnews.hk) and can be accessed by the direct hyperlinks below:

(i) in respect of the annual report of the Company for the year ended 30 June 2013:

http://cdn.nwd.com.hk/sites/default/files/ar2013e.pdf

(ii) in respect of the annual report of the Company for the year ended 30 June 2014:

http://cdn.nwd.com.hk/sites/default/files/ar2014e.pdf

(iii) in respect of the annual report of the Company for the year ended 30 June 2015:

http://cdn.nwd.com.hk/sites/default/files/ar2015e.pdf

(iv) in respect of the interim results announcement of the Company for the six months ended 31 December 2015:

http://cms.nwd.com.hk/downloadIR/642/E_NWD%20Announcement%20English% 20Dec%2015_0.pdf

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FINANCIAL INFORMATION

APPENDIX I

2. Indebtedness

Borrowings

At the close of business on 31 December 2015, being the most recent practicable date for the purpose of this statement of indebtedness, the Group had outstanding borrowings of approximately HK$137,057.7 million, details of which are set out as follows:

Borrowings Bank loans Secured Unsecured Other loans Secured Unsecured Fixed rate bonds and notes payable Loans from non-controlling shareholders, unsecured Liabilities directly associated with non-current assets classified as assets held for sale Bank loans Secured Unsecured Total	HK$ million 22,095.2 67,078.4 1,365.3 1,681.8 40,640.5 2,664.6
	135,525.8
	883.4 648.5
	1,531.9
	137,057.7

Bank loans and other loans of approximately HK$22,978.6 million and HK$1,365.3 million respectively, were secured by certain of the Group’s investment properties, property, plant and equipment, land use rights, intangible concession rights, properties under development, properties for development and bank deposits.

Financial guarantee and contingent liabilities

At the close of business on 31 December 2015, the Group’s financial guarantee contracts were as follows:

Mortgage facilities for certain purchasers of properties (Note a) Guarantees for credit facilities granted to — Joint ventures and associated companies (Note b) — A related company Indemnity to non-wholly owned subsidiaries for Mainland China tax liabilities (Note c) Total	HK$ million 2,595.8 5,361.0 44.7 1,318.0
	9,319.5

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FINANCIAL INFORMATION

APPENDIX I

Notes:

(a) At the close of business on 31 December 2015, the Group had provided guarantees in respect of mortgage facilities granted by certain banks relating to the mortgage loans arranged for certain purchasers of properties developed by certain subsidiaries of the Group. The outstanding mortgage loans under these guarantees amounted to approximately HK$2,595.8 million. Pursuant to the terms of the guarantees, upon default in mortgage payments by these purchasers, the Group is responsible to repay the outstanding mortgage principals together with accrued interest owed by the defaulted purchasers to the banks and the Group is entitled to take over the legal title and possession of the related properties.
(b) At the close of business on 31 December 2015, the Group had financial guarantee and contingent liabilities of approximately HK$5,361.0 million relating to corporate guarantees given in respect of bank loan facilities extended to certain joint ventures and associated companies. As at 31 December 2015, the Group’s attributable portion of the outstanding amount under these bank loan facilities granted to the joint ventures and associated companies was approximately HK$3,576.7 million.
(c) In July 1999, a deed of tax indemnity was entered into between the Company and NWCL, whereby the Company has undertaken to indemnify certain subsidiaries of NWCL in respect of, among others, certain PRC corporate income tax and land appreciation tax payable in consequence of the disposal of certain properties held by NWCL as at 31 March 1999. At the close of business on 31 December 2015, the Company’s share of such obligation to NWCL for Mainland China tax liabilities was approximately HK$1,318.0 million.

Save as aforesaid and apart from intra-group liabilities, as at the close of business on 31 December 2015, the Group did not have any material debt securities issued and outstanding, and authorised or otherwise created but unissued, or term loans or other borrowings or indebtedness in the nature of borrowing of the Group including bank overdrafts and liabilities under acceptances (other than normal trade bills) or acceptance credits or hire purchase commitments, or outstanding mortgages and charges, or contingent liabilities or guarantees.

Since 31 December 2015, there has been no material increase in the indebtedness of the Group. As stated in the section headed ‘‘Confirmation of Financial Resources’’ in the ‘‘Letter from the Board’’ of this circular, the Offeror intends to finance the cash required for the Offers from its (or the Company’s) own cash reserves. In addition, HSBC (in its capacity as lender) has granted a credit facility of HK$21,467.0 million to the Offeror which may be used in to finance the cash required for the Offers in full.

3. Working Capital

The Directors are of the opinion that, taking into consideration the effect of the Offers and the financial resources available to the Group, including internally generated funds and external borrowings, the Group will have sufficient working capital for its present requirements, that is for at least the next twelve months from the date of this circular.

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FINANCIAL INFORMATION

APPENDIX I

4. Financial and Trading Prospects of the Group

The Group continues to adopt prudent and cautious financial management policies and enhances its cash flow management capability through realisation of the Group’s developing assets. By striving to achieve a well-balanced leverage, the Group endeavours to monitor and maintain a healthy financial position.

The Group will continue enhancing its cash flow capability so as to better position itself to grasp market opportunities for the long term benefits of the Shareholders.

For property development in Hong Kong, following the launch of a series of finelydesigned projects which received overwhelming market responses, and leveraging the sound performance in property sales in the fiscal year ended 30 June 2015, the Group will work hard on the preparations for new launches.

In July 2015, the Group launched ‘‘SKYPARK’’ in Mong Kok, which offers a total of 439 residential units. Strategically located at the core district of Kowloon, the project enjoys geographical advantage. Meanwhile, ‘‘Double Cove Grandview’’, phase 4 under the ‘‘Double Cove’’ series in Ma On Shan, was launched in August 2015, offering a total of 474 residential units.

Leveraging New World brand equity in Yuen Long where a number of new projects with outstanding sales performance had been launched in recent years, the Group rolled out ‘‘THE PARKHILL’’ which offers a total of 141 residential units in October 2015. The ultra-luxury project ‘‘55 Conduit Road’’ in Mid-levels west, was launched in December 2015 with good market responses.

Apart from the aforesaid projects, the Group also plans to launch its ‘‘BOHEMIAN HOUSE’’ in Western District, ‘‘MOUNT PAVILIA’’ in Clear Water Bay Road, ‘‘FLEUR PAVILIA’’ in North Point, ‘‘Double Cove Summit’’ in Ma On Shan, and the remaining special units of ‘‘The Masterpiece’’ in Tsim Sha Tsui.

The Group has made use of multiple channels to replenish its Hong Kong landbank so as to maintain a stable supply of land resources to the Group for property development as well as strategic planning in the long run. For sustaining a quality landbank in Hong Kong, the Group will carefully identify and select development opportunities to expand its landbank in Hong Kong with reference to future market supply and consumption preference of home buyers. Taking into account the flexibility provided for under the development conditions of the respective projects, the Group will strive to secure unique land resources of premium quality to support the Group’s sustainable development. The Group will continue to enhance its development resources through public auction and tender, old building redevelopment and agricultural land conversion.

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FINANCIAL INFORMATION

APPENDIX I

In January 2016, the Group won the development contract of Urban Renewal Authority’s Kowloon City Road/Sheung Heung Road project in Ma Tau Kok. Located alongside the Kowloon section of the Shatin to Central Link of the Mass Transit Railway under construction, the project has a site area of approximately 15,000 square feet. Upon completion, the project is expected to provide residential gross floor area of approximately 110,000 square feet (about 216 residential units).

For property rental business in Hong Kong, in response to the changing structure and consumption patterns of local consumers and those from Mainland China, the Group pioneered in creating the original brand K11 in 2009, offering new shopping experience to the highspending middle class. In recent years, the Group has further introduced the refinements and quality enhancement programs to its investment projects, D[.] Park Shopping Centre is now undergoing the final stages of overhaul. Efforts have been made to upgrade the tenant mix and improve the physical facilities, for bringing fresh and comfortable shopping experiences to its consumers upon completion.

For office buildings, New World Tower and Manning House, both being Grade A office buildings under the Group investment properties portfolio located in the traditional prime commercial area on Queen’s Road Central in Central, achieved satisfactory performance in terms of occupancy and rental rates. New World Tower is undergoing an asset enhancement programme to meet the new market leasing demand. Its office lobbies and other major facilities will be gradually upgraded, in particular, the enhancement works of the lobby on ground floor were completed.

The redevelopment of New World Centre, located at the core area of Tsim Sha Tsui promenade, the construction is being carried out as scheduled. Upon completion, the project is expected to become a key landmark in Hong Kong.

NWS, NWCL and NWDS, the listed subsidiaries of the Group, are expected to be benefited from the stable and healthy development of China’s economy in the medium-to-long term under its structural optimisation, enhancement and alteration. Meanwhile, the Group will also strive to collaborate closely with its listed subsidiaries to effectively utilise and leverage the brand equity and synergy of the New World Group, bringing forth positive effects to operations.

The Company and NWCL have disposed/are disposing of certain subsidiaries and joint ventures to Shengyu, an indirect wholly owned subsidiary of Evergrande. After the completion of the Disposals, the Group will receive net proceeds from these disposals amounting to approximately HK$24.9 billion. These Disposals signify that the NWCL Group’s strategy of optimising its property development and investment portfolio in the PRC has been firmly realised. The strategy calls for focusing resources in first and 1.5-tier cities and high-growth cities, while reducing investment in some projects with prolonged development cycle. The move matches with the NWCL Group’s ongoing development strategy in choosing high-end high-quality projects with better gross profit margin, increasing assets churn, and developing

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FINANCIAL INFORMATION

APPENDIX I

more mid-sized property projects in the PRC. The net proceeds from the Disposals will provide NWCL with ample cash reserves for potential investments in the near future, while improving the overall operating cash flow.

At present the NWCL Group has a comprehensive property development and investment portfolio, mature operating teams in first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, and a competitive property development portfolio in high-growth cities. The net proceeds from the Disposals could strengthen the NWCL Group’s resources and support the NWCL Group in penetrating the markets in first and 1.5-tier cities and other high-growth cities in which the brand has already been well recognised and established, strengthening its brand positioning, presenting a clearer portfolio strategy, and improving the average project gross profit margin and assets churn in the PRC.

As at the Latest Practicable Date, assuming all the Disposals had been completed, NWCL had landbank of approximately 11.1 million square metres gross floor area which was sufficient for five years of development.

Uplifting the competitiveness of its core property business and its brand equity is the clear and unified goals of the Group. Going forward, the Group will remain its pursuit of ongoing innovation and excellence, attend to every detail of customers’ needs, and maximise interests of its shareholders.

5. Material Adverse Change

Save as disclosed in the section headed ‘‘Unaudited Pro Forma Financial Information of the Group’’ contained in Appendix II to this circular, in particular, the decrease in the unaudited pro forma total assets of the Group to approximately HK$389,242.3 million and the increase in the unaudited pro forma total liabilities of the Group to approximately HK$192,464.7 million, assuming completion of the Offers had taken place on 31 December 2015 and having taken into account the pro forma adjustments as outlined in the said section and save as disclosed in the unaudited condensed consolidated financial statements of the Group for the six months ended 31 December 2015, in particular, the recorded exchange losses owing to the depreciation of the RMB, and except for the possible further exchange gains/losses arising from currency fluctuations since 31 December 2015 as well as possible fluctuation of the changes in fair value of investment properties, the Directors are not aware of any material adverse changes in the financial or trading position of the Group since 30 June 2015, being the date to which the latest published audited consolidated financial statements of the Group were made up.

(B) FINANCIAL INFORMATION OF THE NWCL GROUP

1. Financial Reports

The audited consolidated financial statements of the NWCL Group for the three financial years ended 30 June 2013, 2014 and 2015 are disclosed in the annual reports of NWCL for each of such three financial years respectively, and the unaudited condensed consolidated financial statements of the NWCL Group for the six months ended 31 December 2015 are

– 79 –

FINANCIAL INFORMATION

APPENDIX I

disclosed in the interim results announcement of NWCL dated 23 February 2016. All of the above financial statements have been published on the website of the NWCL (www.nwcl.com.hk) and the website of the Stock Exchange (www.hkexnews.hk).

2. Management Discussion and Analysis on the NWCL Group

The management discussion and analysis of the NWCL Group’s business and performance for the three financial years ended 30 June 2013, 2014 and 2015 are disclosed in the annual reports of NWCL for each of the three financial years ended 30 June 2013 (on pages 70 to 79), 30 June 2014 (on pages 76 to 85) and 30 June 2015 (on pages 88 to 98) respectively and a review of the NWCL Group’s business and performance for the six months ended 31 December 2015 is disclosed in the interim results announcement of NWCL dated 23 February 2016 (on pages 20 to 29).

– 80 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

For illustrative purposes, the financial information prepared in accordance with rule 4.29 of the Listing Rules is set out here to provide prospective investors with further information about how the financial information of the Group might be affected by the completion of the Offers as if the Offers had been completed on 31 December 2015. The statements have been prepared for illustrative purposes only and because of their nature, they may not give a true picture of the Group’s financial position on the completion of the Offers.

(A) UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The following is illustrative and unaudited pro forma financial information of the Group (‘‘Unaudited Pro Forma Financial Information’’), including the unaudited pro forma consolidated statement of adjusted assets and liabilities of the Group, which has been prepared on the basis of the notes set out below for the purpose of illustrating the effect of the Offers as if they had taken place on 31 December 2015.

The Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the financial position of the Group had the Offers been completed as at 31 December 2015 or at any future date.

– 81 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Unaudited Pro Forma Consolidated Statement of Adjusted Assets and Liabilities of the Group

Assets Non-current assets Investment properties Property, plant and equipment Land use rights Intangible concession rights Intangible assets Interests in joint ventures Interests in associated companies Available-for-sale financial assets Held-to-maturity investments Financial assets at fair value through profit or loss Derivative financial instruments Properties for development Deferred tax assets Other non-current assets Current assets Properties under development Properties held for sale Inventories Debtors and prepayments Financial assets at fair value through profit or loss Derivative financial instruments Restricted bank balances Cash and bank balances Non-current assets classified as assets held for sale Total assets	Unaudited consolidated statement of assets and liabilities of the Group as at 31 December 2015 HK$’m Note (1) 89,903.3 21,436.4 2,129.6 13,633.4 2,805.0 48,971.8 18,263.2 12,660.9 42.1 706.2 39.5 21,220.0 664.0 1,727.1 234,202.5 43,877.4 22,224.9 843.6 20,209.1 0.2 21.2 148.5 64,550.0 151,874.9 23,605.4 175,480.3 409,682.8	Pro forma adjustments HK$’m HK$’m Note (2) Note (3) (20,440.5)	Unaudited pro forma consolidated statement of adjusted assets and liabilities of the Group
			HK$’m 89,903.3 21,436.4 2,129.6 13,633.4 2,805.0 48,971.8 18,263.2 12,660.9 42.1 706.2 39.5 21,220.0 664.0 1,727.1
			234,202.5
			43,877.4 22,224.9 843.6 20,209.1 0.2 21.2 148.5 44,109.5
			131,434.4 23,605.4
			155,039.8
			389,242.3

– 82 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Liabilities Non-current liabilities Long-term borrowings Deferred tax liabilities Derivative financial instruments Other non-current liabilities Current liabilities Creditors and accrued charges Current portion of long-term borrowings Short-term borrowings Current tax payable Liabilities directly associated with non-current assets classified as assets held for sale Total liabilities Net current assets Total assets less current liabilities Net assets	Unaudited consolidated statement of assets and liabilities of the Group as at 31 December 2015 HK$’m Note (1) 108,671.3 8,652.5 791.6 611.1 118,726.5 35,572.4 22,211.8 4,642.7 5,733.1 68,160.0 5,443.9 73,603.9 192,330.4 101,876.4 336,078.9 217,352.4	Pro forma adjustments HK$’m HK$’m Note (2) Note (3) 134.3	Unaudited pro forma consolidated statement of adjusted assets and liabilities of the Group
			HK$’m 108,671.3 8,652.5 791.6 611.1
			118,726.5
			35,706.7 22,211.8 4,642.7 5,733.1
			68,294.3 5,443.9
			73,738.2
			192,464.7
			81,301.6
			315,504.1
			196,777.6

Notes:

(1) The balances are extracted from the unaudited condensed consolidated statement of financial position of the Group as at 31 December 2015 set out in the Company’s published interim results announcement for the six months ended 31 December 2015.
(2) The adjustment represents the estimated cash required to acquire all of the Offer Shares at HK$7.80 per Offer Share of approximately HK$21,252.3 million, excluding the estimated cash of approximately HK$901.5 million to acquire 93,073,738 NWCL Shares and 22,508,064 NWCL Shares held by High Earnings and Great Worth respectively, both of which are non-wholly owned subsidiaries of the Company, and the estimated cash required to cancel all the outstanding NWCL Options of approximately HK$89.7 million, on the assumption that no NWCL Option is exercised after the Latest Practicable Date and before the Closing Date.
(3) The adjustment represents the estimated transaction costs of approximately HK$134.3 million which are mainly professional fees payable by the Group in connection with the Offers.
(4) No adjustments have been made to reflect any trading results or other transactions of the Group entered into subsequent to 31 December 2015.

– 83 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

(B) REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report received from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [78 x 56] intentionally omitted <==

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

TO THE DIRECTORS OF NEW WORLD DEVELOPMENT COMPANY LIMITED

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of New World Development Company Limited (the ‘‘Company’’) and its subsidiaries (collectively the ‘‘Group’’) by the directors for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma consolidated statement of adjusted assets and liabilities of the Group as at 31 December 2015, and related notes (the ‘‘Unaudited Pro Forma Financial Information’’) as set out on pages 81 to 83 of the Company’s circular dated 29 February 2016, in connection with the voluntary conditional cash offers to acquire all the offer shares of New World China Land Limited and to cancel all the outstanding share options in relation to the shares of New World China Land Limited by Easywin Enterprises Corporation Limited, a wholly owned subsidiary of the Company (the ‘‘Proposed Transaction’’). The applicable criteria on the basis of which the directors have compiled the Unaudited Pro Forma Financial Information are described on pages 81 to 83.

The Unaudited Pro Forma Financial Information has been compiled by the directors to illustrate the impact of the Proposed Transaction on the Group’s financial position as at 31 December 2015 as if the Proposed Transaction had taken place at 31 December 2015. As part of this process, information about the Group’s financial position has been extracted by the directors from the Group’s interim financial information for the period ended 31 December 2015, on which no audit or review report has been published.

– 84 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Directors’ responsibility for the Unaudited Pro Forma Financial Information

The directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ (‘‘AG 7’’) issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’).

Our independence and quality control

We have complied with the independence and other ethical requirement of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting accountant’s responsibilities

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

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

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

The purpose of unaudited pro forma financial information included in a circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Proposed Transaction at 31 December 2015 would have been as presented.

– 85 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

. The related pro forma adjustments give appropriate effect to those criteria; and
. The unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the company, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

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

PricewaterhouseCoopers

Certified Public Accountants

Hong Kong, 29 February 2016

– 86 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

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

The issue of this circular has been approved by the Directors, who jointly and severally 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, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts not contained in this circular, the omission of which would make any statement in this circular misleading.

2. INTERESTS OF DIRECTORS

(A) Interests in shares, underlying shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors in the shares or underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions, if any which they were taken or deemed to have under such provisions of the SFO); or (b) to be entered in the register kept by the Company under Section 352 of the SFO; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the ‘‘Model Code’’) of the Listing Rules were as follows:

(aa) Long position in shares

The Company (ordinary shares) Dr. Cheng Kar-Shun, Henry Mr. Doo Wai-Hoi, William Mr. Cheng Kar-Shing, Peter Mr. Ho Hau-Hay, Hamilton Mr. Liang Cheung-Biu, Thomas Ms. Ki Man-Fung, Leonie	Number of shares Approximate % of shareholding Personal interests Family interests Corporate interests Total — 600,000 — 600,000 0.01 — — 37,955,000(1) 37,955,000 0.41 — 506,545 — 506,545 0.01 — — 878,353(2) 878,353 0.01 10,429 — — 10,429 0.00 90,000 — — 90,000 0.00

– 87 –

GENERAL INFORMATION

APPENDIX III

NWCL
(ordinary shares of HK$0.10 each)
Dr. Cheng Kar-Shun, Henry
Mr. Doo Wai-Hoi, William
Dr. Cheng Chi-Kong Adrian
Mr. Cheng Kar-Shing, Peter
Mr. Lee Luen-Wai, John
Ms. Ki Man-Fung, Leonie
NWDS
(ordinary shares HK$0.10 each)
Ms. Ki Man-Fung, Leonie
Ms. Cheng Chi-Man, Sonia
NWS
(ordinary shares HK$1.00 each)
Dr. Cheng Kar-Shun, Henry
Mr. Doo Wai-Hoi, William
Mr. Cheng Kar-Shing, Peter
Ms. Ki Man-Fung, Leonie
Sun Legend Investments Limited
(ordinary shares)
Mr. Cheng Kar-Shing, Peter

Number of shares
Approximate
% of
shareholding
Personal
interests
Family
interests
Corporate
interests
Total
2,077,922
—
—
2,077,922
0.02
1,254,663
—
1,317,000(3)
2,571,663
0.03
935,066
—
—
935,066
0.01
1,587,130
—
—
1,587,130
0.02
699,136
—
—
699,136
0.01
45,000
—
—
45,000
0.00
20,000
—
—
20,000
0.00
92,000
—
—
92,000
0.01
18,349,571
—
12,000,000(4)
30,349,571
0.80
1,939,834
—
8,330,782(3)
10,270,616
0.27
295,838
—
5,973,374(5)
6,269,212
0.16
15,000
—
—
15,000
0.00
—
—
500(6)
500
50.00

Notes:

(1) These shares are beneficially owned by companies which are wholly owned by Mr. Doo WaiHoi, William.
(2) These shares are beneficially owned by a company in which Mr. Ho Hau-Hay, Hamilton owns 40.0% of its issued share capital.
(3) These shares are beneficially owned by a company which is wholly owned by Mr. Doo Wai-Hoi, William.
(4) These shares are beneficially owned by a company which is wholly owned by Dr. Cheng KarShun, Henry.
(5) These shares are beneficially owned by a company which is wholly owned by Mr. Cheng KarShing, Peter.
(6) These shares are beneficially owned by a controlled corporation of Mr. Cheng Kar-Shing, Peter.

– 88 –

GENERAL INFORMATION

APPENDIX III

(bb) Long position in underlying shares — share options

(i) The Company

Name of Director
Date of grant
Exercisable
period
(Note)
Dr. Cheng Kar-Shun, Henry
19 March 2012
(1)
Mr. Doo Wai-Hoi, William
22 January 2014
(2)
Dr. Cheng Chi-Kong, Adrian
19 March 2012
(1)
Mr. Chen Guanzhan
19 March 2012
(1)
Mr. Yeung Ping-Leung, Howard
19 March 2012
(1)
Mr. Cha Mou-Sing, Payson
19 March 2012
(1)
Mr. Cheng Kar-Shing, Peter
19 March 2012
(1)
Mr. Ho Hau-Hay, Hamilton
19 March 2012
(1)
Mr. Lee Luen-Wai, John
19 March 2012
(1)
Mr. Liang Cheung-Biu, Thomas
19 March 2012
(1)
Ms. Ki Man-Fung, Leonie
19 March 2012
(1)
Mr. Cheng Chi-Heng
19 March 2012
(1)
Ms. Cheng Chi-Man, Sonia
19 March 2012
(1)
Mr. Au Tak-Cheong
19 March 2012
(3)
22 January 2014
(2)

Number of
share
options
Exercise
price per
share
(HK$)
10,675,637
9.152
532,982
9.756
3,736,471
9.152
3,736,471
9.152
533,779
9.152
533,779
9.152
533,779
9.152
533,779
9.152
533,779
9.152
533,779
9.152
3,202,688
9.152
533,779
9.152
3,202,688
9.152
1,346,693
9.152
532,982
9.756
30,703,065

Notes:

(1) Divided into 4 tranches exercisable from 19 March 2012, 19 March 2013, 19 March 2014 and 19 March 2015 respectively to 18 March 2016.
(2) Divided into 4 tranches exercisable from 22 January 2014, 22 January 2015, 22 January 2016 and 22 January 2017 respectively to 21 January 2018.
(3) Divided into 3 tranches, exercisable from 19 March 2013, 19 March 2014 and 19 March 2015 respectively to 18 March 2016.
(4) The cash consideration paid by each Director for the grant of share options is HK$10.0.

– 89 –

GENERAL INFORMATION

APPENDIX III

(ii) NWS

			Number of	Exercise
		Exercisable	share	price per
Name of Director	Date of grant	period	options	share
		(Note)		(HK$)
Dr. Cheng Kar-Shun, Henry	9 March 2015	(1)	7,407,925	14.145

Notes:

(1) 60.0% of the share options are exercisable from 9 May 2015 to 8 March 2020 while the remaining 40.0% of the share options are divided into 2 tranches exercisable from 9 March 2016 and 9 March 2017 respectively to 8 March 2020.
(2) The cash consideration paid by the above Director for the grant of share options is HK$10.0.

(cc) Long position in underlying shares — debentures

(i) Fita International Limited (‘‘Fita’’)

Name of Director Mr. Doo Wai-Hoi, William Mr. Lee Luen-Wai, John	Amount of debentures in US$ issued by Fita Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total US$ US$ US$ US$ — 2,900,000 12,890,000(1) 15,790,000 2.11 1,000,000 1,000,000 — 2,000,000 0.27 1,000,000 3,900,000 12,890,000 17,790,000	Amount of debentures in US$ issued by Fita Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total US$ US$ US$ US$ — 2,900,000 12,890,000(1) 15,790,000 2.11 1,000,000 1,000,000 — 2,000,000 0.27 1,000,000 3,900,000 12,890,000 17,790,000	Amount of debentures in US$ issued by Fita Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total US$ US$ US$ US$ — 2,900,000 12,890,000(1) 15,790,000 2.11 1,000,000 1,000,000 — 2,000,000 0.27 1,000,000 3,900,000 12,890,000 17,790,000
	Personal interests US$ — 1,000,000 1,000,000	Family interests US$ 2,900,000 1,000,000 3,900,000	Corporate interests US$ 12,890,000(1) — 12,890,000

Note:

(1) These debentures are beneficially owned by companies which are wholly owned by Mr. Doo Wai-Hoi, William.

– 90 –

GENERAL INFORMATION

APPENDIX III

(ii) NWCL

Name of Director Mr. Doo Wai-Hoi, William Mr. Cheng Kar-Shing, Peter	Amount of debentures issued by NWCL Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total RMB RMB RMB RMB — 65,896,000(1) 1,142,041,200(2) 1,207,937,200 12.89 — 12,256,000(3) 16,000,000(4) 28,256,000 0.30 — 78,152,000 1,158,041,200 1,236,193,200	Amount of debentures issued by NWCL Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total RMB RMB RMB RMB — 65,896,000(1) 1,142,041,200(2) 1,207,937,200 12.89 — 12,256,000(3) 16,000,000(4) 28,256,000 0.30 — 78,152,000 1,158,041,200 1,236,193,200	Amount of debentures issued by NWCL Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total RMB RMB RMB RMB — 65,896,000(1) 1,142,041,200(2) 1,207,937,200 12.89 — 12,256,000(3) 16,000,000(4) 28,256,000 0.30 — 78,152,000 1,158,041,200 1,236,193,200
	Personal interests RMB — — —	Family interests RMB 65,896,000(1) 12,256,000(3) 78,152,000	Corporate interests RMB 1,142,041,200(2) 16,000,000(4) 1,158,041,200

Notes:

(1) These debentures are held by the spouse of Mr. Doo Wai-Hoi, William, of which RMB42,896,000 debentures were issued in US$ and had been translated into RMB using the rate of US$1.0 = RMB6.128.
(2) These debentures are held by companies which are wholly owned by Mr. Doo Wai-Hoi, William, of which RMB584,611,200 debentures were issued in US$ and had been translated into RMB using the rate of US$1.0 = RMB6.128 and RMB118,800,000 were issued in HK$ and had been translated into RMB using the rate of HK$1.0 = RMB0.8.
(3) These debentures are jointly-held by Mr. Cheng Kar-Shing, Peter and his spouse, all of which were issued in US$ and had been translated into RMB using the rate of US$1.0 = RMB6.128.
(4) These debentures are beneficially owned by a company which is wholly owned by Mr. Cheng Kar-Shing, Peter.

– 91 –

GENERAL INFORMATION

APPENDIX III

(iii) NWD (MTN) Limited

Name of Director Mr. Doo Wai-Hoi, William Ms. Ki Man-Fung, Leonie	Amount of debentures issued by NWD (MTN) Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total HK$ HK$ HK$ HK$ — 23,400,000(1) 156,000,000(2) 179,400,000 0.96 11,800,000(3) — — 11,800,000 0.06 11,800,000 23,400,000 156,000,000 191,200,000	Amount of debentures issued by NWD (MTN) Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total HK$ HK$ HK$ HK$ — 23,400,000(1) 156,000,000(2) 179,400,000 0.96 11,800,000(3) — — 11,800,000 0.06 11,800,000 23,400,000 156,000,000 191,200,000	Amount of debentures issued by NWD (MTN) Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total HK$ HK$ HK$ HK$ — 23,400,000(1) 156,000,000(2) 179,400,000 0.96 11,800,000(3) — — 11,800,000 0.06 11,800,000 23,400,000 156,000,000 191,200,000
	Personal interests HK$ — 11,800,000(3) 11,800,000	Family interests HK$ 23,400,000(1) — 23,400,000	Corporate interests HK$ 156,000,000(2) — 156,000,000

Notes:

(1) These debentures were issued in US$ and had been translated into HK$ using the rate of US$1.0 = HK$7.8.
(2) These debentures are beneficially owned by a company which is wholly owned by Mr. Doo Wai-Hoi, William and were issued in US$ and had been translated into HK$ using the rate of US$1.0 = HK$7.8.
(3) HK$7,800,000 debentures were issued in US$ and had been translated into HK$ using the rate of US$1.0 = HK$7.8.

(iv) Rosy Unicorn Limited

Name of Director Mr. Doo Wai-Hoi, William	Amount of debentures in US$ issued by Rosy Unicorn Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total US$ US$ US$ US$ — 51,500,000 24,790,000(1) 76,290,000 15.26	Amount of debentures in US$ issued by Rosy Unicorn Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total US$ US$ US$ US$ — 51,500,000 24,790,000(1) 76,290,000 15.26	Amount of debentures in US$ issued by Rosy Unicorn Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total US$ US$ US$ US$ — 51,500,000 24,790,000(1) 76,290,000 15.26
	Personal interests US$ —	Family interests US$ 51,500,000	Corporate interests US$ 24,790,000(1)

Note:

(1) These debentures are beneficially owned by companies which are wholly owned by Mr. Doo Wai-Hoi, William.

– 92 –

GENERAL INFORMATION

APPENDIX III

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had or deemed to have any interest or short positions in the shares, underlying shares and debentures of the Company or any of 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 the interests and short positions in which they were 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 contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

(B) Interests in assets of the Group

(a) On 24 August 2015, an agreement (the ‘‘Dragon Merchant Agreement’’) was entered into between Catchy Investments Limited (‘‘Catchy’’, a wholly owned subsidiary of the Company) and FSE Management Company Limited (‘‘FSE’’, a majority-controlled company (as defined in the Listing Rules) of Mr. Doo Wai-Hoi, William) pursuant to which Catchy agreed to sell and assign, and FSE agreed to purchase and accept the assignment of, the entire issued share capital of Dragon Merchant Limited (‘‘Dragon Merchant’’) and the entire amount of the unsecured and non-interest bearing shareholder’s loan owing from Dragon Merchant to Catchy as at the date of completion of the Dragon Merchant Agreement (the ‘‘Dragon Merchant Completion’’) at an aggregate cash consideration of HK$258.0 million (subject to adjustment). The main asset of Dragon Merchant and its subsidiary is the property situate at 8th Floor, Chevalier Commercial Centre, 8 Wang Hoi Road, Kowloon Bay, Kowloon, Hong Kong. Details of the Dragon Merchant Agreement were set out in the announcement of the Company dated 24 August 2015. The Dragon Merchant Completion took place upon signing of the Dragon Merchant Agreement and thereafter, Dragon Merchant and its subsidiary ceased to be subsidiaries of the Company. The consideration was adjusted to approximately HK$255.3 million.

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(b) Dr. Cheng Kar-Shun, Henry, Mr. Doo Wai-Hoi, William, Dr. Cheng Chi-Kong, Adrian, Mr. Cheng Kar-Shing, Peter, Mr. Cheng Chi-Heng and Ms. Cheng ChiMan, Sonia are members of the Cheng’s family which holds interest in Cheng Yu Tung Family (Holdings) Limited and Cheng Yu Tung Family (Holdings II) Limited which in turn indirectly control Chow Tai Fook Enterprises Limited (‘‘CTF’’), the controlling shareholder of the Company within the meaning of the Listing Rules. The Group had entered into the following transactions with CTF and/or its subsidiaries since 30 June 2015:
(i) on 3 July 2015, NWDCL entered into a sale and purchase agreement with CTF pursuant to which NWDCL agreed to sell and CTF agreed to acquire the entire issued share capital of, and the outstanding shareholder’s loans owing to NWDCL from, New World Hotel Management (BVI) Limited (‘‘NWHM’’) for a cash consideration of HK$1,963 million (the ‘‘NWHM Disposal’’). NWHM is the holding company of certain companies which are principally engaged in the provision of hotel management services. The NWHM Disposal was completed on 29 December 2015;
(ii) on 20 November 2015, the Company entered into a sale and purchase agreement with CTF pursuant to which CTF agreed to sell and assign, and the Company agreed to purchase and accept the assignment of 36% of the issued shares of Beames Holdings Limited (‘‘Beames’’) and the entire amount of unsecured and non-interest bearing shareholder’s loan owing from Beames to CTF for a total adjusted consideration of approximately HK$3,592.8 million (the ‘‘Beames Acquisition’’). The Beames Acquisition was completed on 23 November 2015; and
(iii) there are lease agreements regarding rental of properties between members of CTF group and members of the Group. The aggregate amount of such transactions are covered under the master services agreement dated 11 April 2014 made between the Company and CTF as disclosed in the Company’s 2015 annual report.
(c) On 4 February 2016, each of New World Hotels Corporation Limited (an indirect wholly owned subsidiary of the Company) and Goland Developments Limited (‘‘Goland’’, an indirect subsidiary of the Company) as purchasers entered into an agreement with Way West Investments Limited (‘‘Way West’’) as vendor regarding the acquisition of 47.50% interest in Goland and 6.67% interest in Realform Developments Limited respectively at an aggregate cash consideration of HK$90.07 million (the ‘‘Acquisitions’’). Both transactions were completed on 4 February 2016, and through the Acquisitions, the Company’s attributable interests in New World Makati Hotel, Manila, Philippines increased from 49.005% to 62.007%. Way West is wholly owned by the brother of Mr. Ho Hau-Hay, Hamilton.

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GENERAL INFORMATION

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As at the Latest Practicable Date, save as set out above, none of the Directors had any direct or indirect interests in any assets which had been acquired or disposed of by, or leased to, or which were proposed to be acquired or disposed of by, or leased to, any member of the Group since 30 June 2015, being the date to which the latest published audited accounts of the Group were made up.

(C) Competing interests

As at the Latest Practicable Date, the following Directors had interests in the following businesses which are considered to compete or are 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:

Name of Director Dr. Cheng Kar-Shun, Henry Mr. Doo Wai-Hoi, William	Business which are considered to compete or likely to compete with the businesses of the Group Name of entity Description of businesses CTF group of companies Property investment and development, hotel operations, transport and aircraft leasing FSE Holdings Limited group of companies Property and carpark management and landscaping International Entertainment Corporation group of companies Hotel operations Supreme Harvest Development Limited group of companies Property investment and development Silver City International Limited group of companies Property investment and food and beverage operations Sunshine Dragon Group Limited group of companies Property investment Amelia Gold Limited group of companies Property investment Fortune Success Limited group of companies Property investment FSE Holdings Limited group of companies Property and carpark management and landscaping Fung Seng Enterprises Investment Company Limited group of companies Property investment Fung Seng Enterprises Limited group of companies Property investment and management	Nature of interest of the Director in the entity
		Director Director and shareholder Director Director Director Director Director and shareholder Director and shareholder Shareholder Director and shareholder Director and shareholder

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APPENDIX III

Name of Director Dr. Cheng Chi-Kong, Adrian Mr. Cheng Kar-Shing, Peter Mr. Cha Mou-Sing, Payson Mr. Cha Mou-Zing, Victor	Business which are considered to compete or likely to compete with the businesses of the Group Name of entity Description of businesses Golden Wealth Investment Limited group of companies Property investment and development Lifestyle International Holdings Limited group of companies Department stores operations and property investment Silver City International Limited group of companies Property investment and food and beverage operations Silver Success Company Limited group of companies Hotel operations Sunshine Dragon Group Limited group of companies Property investment Cheung Hung Development (Holdings) Limited Property investment and development CTF group of companies Property investment and development, hotel operations, transport and aircraft leasing Grandhope Properties Limited Property investment International Entertainment Corporation group of companies Hotel operations CTF group of companies Property investment and development, hotel operations, transport and aircraft leasing Long Vocation Investments Limited group of companies Property investment HKR International Limited group of companies Property investment and development and property management Hanison Construction Holdings Limited group of companies Construction, property investment and development HKR International Limited group of companies Property investment and development and property management Hanison Construction Holdings Limited group of companies Construction, property investment and development	Nature of interest of the Director in the entity
		Director and shareholder Director Director and shareholder Director and shareholder Director and shareholder Director Director Director and shareholder Director Director Director and shareholder Director and shareholder Director and shareholder Director and shareholder Shareholder

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Name of Director Mr. Ho Hau-Hay, Hamilton Mr. Lee Luen-Wai, John Mr. Liang Cheung-Biu, Thomas Mr. Cheng Chi-Heng	Business which are considered to compete or likely to compete with the businesses of the Group Name of entity Description of businesses Honorway Investments Limited Property investment and development Tak Hung (Holding) Company Limited Property investment and development Lippo Limited Property investment, development and management Lippo China Resources Limited Property investment, development and management Hongkong Chinese Limited Property investment, development and management Bermuda Investments Limited Property investment Bonaventure Properties Limited Property investment Greenwich Investors Limited Property investment Lambda Enterprises Limited Property management Wideland Investors Limited Property investment CTF group of companies Property investment and development, hotel operations, transport and aircraft leasing	Nature of interest of the Director in the entity
		Director and shareholder Director and shareholder Director Director Director Director Spouse interest (director and shareholder) Director Director Spouse interest (director and shareholder) Director

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

As the Board is independent of the boards of the above-mentioned entities and none of the above Directors can control the Board, the Group is therefore capable of carrying on its business independently of, and at arm’s length from the business of these entities.

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(D) Interests in contracts or arrangements

Save for contracts amongst members of the Group and save for the Offers, as at the Latest Practicable Date, none of the Directors was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which is significant in relation to the business of the Group.

(E) Common directors

The following is a list of Directors who, as at the Latest Practicable Date, were also directors of the companies which had interests or short positions in the shares or 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: Name of Common Director Name of Company

Dr. Cheng Kar-Shun, Henry Cheng Yu Tung Family (Holdings) Limited Mr. Cheng Kar-Shing, Peter Dr. Cheng Kar-Shun, Henry Cheng Yu Tung Family (Holdings II) Limited Mr. Cheng Kar-Shing, Peter Dr. Cheng Kar-Shun, Henry Chow Tai Fook Capital Limited Mr. Cheng Kar-Shing, Peter Dr. Cheng Kar-Shun, Henry Chow Tai Fook (Holding) Limited Dr. Cheng Chi-Kong, Adrian Mr. Cheng Kar-Shing, Peter Mr. Cheng Chi-Heng Dr. Cheng Kar-Shun, Henry CTF Dr. Cheng Chi-Kong, Adrian Mr. Cheng Kar-Shing, Peter Mr. Cheng Chi-Heng

3. DIRECTORS’ SERVICE AGREEMENTS

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

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4. MATERIAL CONTRACTS

The following contracts (being contracts entered into outside the ordinary course of business carried on by the Group) have been entered into by members of the Group within the two years immediately preceding the date of this circular and are, or may be, material:

(a) a conditional underwriting agreement dated 13 March 2014 entered into between the Company, HSBC and CTF in relation to the issue, by way of rights, of one new Share for every three Shares held on 31 March 2014 at a subscription price of HK$6.20 each (the ‘‘Rights Issue’’), details of which are disclosed in the announcement of the Company dated 13 March 2014 and the prospectus of the Company dated 3 April 2014;
(b) an amended and restated underwriting agreement dated 27 March 2014 entered into between the Company, HSBC, Standard Chartered Securities (Hong Kong) Limited and CTF in relation to the Rights Issue, details of which are disclosed in the announcement of the Company dated 27 March 2014;
(c) a share purchase agreement dated 15 May 2014 entered into between a third party and Sino-French Holdings (Hong Kong) Limited (‘‘SFH’’, a 50.0% owned joint venture of NWS) and pursuant to which SFH agreed to sell 90.0% of the issued share capital in Sino-French Energy Development Company Limited (‘‘SFED’’) together with the assignment of the shareholder loans owed by SFED to SFH at an aggregate cash consideration of US$612.0 million. SFED owns approximately 42.2% interest in Companhia de Electricidade de Macau — CEM, S.A.;
(d) a share purchase agreement dated 30 January 2015 entered into between Natal Global Limited, (‘‘Natal Global’’, an indirect wholly owned subsidiary of NWS), Zion Sky Holdings Limited (‘‘Zion Sky’’, a wholly owned subsidiary of CTF), Investec Bank plc (‘‘Investec’’) and Goshawk Aviation Limited (‘‘Goshawk’’ a company engaged in commercial aircraft leasing) in relation to the purchase by Natal Global of (i) 144,810,506 preference shares of Goshawk held by Zion Sky, representing 40% of the total issued share capital of Goshawk and (ii) the loan notes in the outstanding principal amount of approximately US$60.9 million issued by GAL Dutch Finance B.V. under the senior notes deed dated 12 May 2014 and entered into between GAL Dutch Finance B.V. as issuer and, among others, Zion Sky and Investec as noteholders from Zion Sky at a total cash consideration of approximately US$222.5 million;
(e) agreements dated 29 April 2015 entered into between the Company and/or its subsidiaries, namely Beames, Park New Astor Hotel Limited and Great TST Limited, and HIP Company Limited (‘‘HIP’’) in relation to the establishment of a new joint venture company (the ‘‘JVC’’) in which Beames and HIP will each (directly or indirectly) hold 50.0% of the issued share capital and into which the entire ownership of three hotels, namely, Grand Hyatt Hong Kong, Renaissance Harbour View Hotel, Hong Kong and Hyatt Regency Hong Kong, Tsim Sha Tsui will be injected with effect from

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APPENDIX III

the completion of the agreements at the total consideration of HK$18.5 billion (subject to customary closing adjustments), details of which are disclosed in the announcements of the Company dated 30 April 2015 and 15 June 2015;

(f) a sale and purchase agreement dated 3 July 2015 entered into between NWDCL and CTF whereby NWDCL conditionally agreed to sell and CTF conditionally agreed to acquire the entire issued share capital of, and the outstanding shareholder’s loans owing from, NWHM for a consideration of HK$1,963 million;
(g) a sale and purchase agreement dated 20 November 2015 entered into between the Company as purchaser and CTF as vendor in relation to the acquisition of shares in the issued share capital of, and shareholder’s loan owing by, Beames for a total adjusted consideration of approximately HK$3,592.8 million, details of which are disclosed in the announcement of the Company dated 20 November 2015;
(h) a sale and purchase agreement dated 2 December 2015 entered into between Shengyu, an indirect wholly owned subsidiary of Evergrande, as purchaser and NWDCL as vendor in relation to the disposal of NWCL Group’s interests in the property project in Haikou, the PRC for a total consideration of RMB8,600 million, details of which are set out in the joint announcement of the Company and NWCL dated 2 December 2015 and the circular of NWCL dated 23 December 2015;
(i) a sale and purchase agreement dated 2 December 2015 entered into between Shengyu as purchaser and NWDCL as vendor in relation to the disposal of NWCL Group’s interests in the property projects in Huiyang, the PRC for a total consideration of RMB1,100 million, details of which are set out in the joint announcement of the Company and NWCL dated 2 December 2015 and the circular of NWCL dated 23 December 2015;
(j) a sale and purchase agreement dated 2 December 2015 entered into between Shengyu as purchaser and NWDCL as vendor in relation to the disposal of NWCL Group’s interests in the property projects in Hankou, Wuhan city, Hubei province, the PRC for a total consideration of RMB3,800 million, details of which are set out in the joint announcement of the Company and NWCL dated 2 December 2015 and the circular of NWCL dated 23 December 2015;
(k) a subscription agreement dated 23 December 2015 entered into between (i) Sherson Limited, a wholly owned subsidiary of the Company, and Vivid China Investment Limited, a wholly owned subsidiary of NWCL, as purchasers and (ii) Evergrande as issuer, pursuant to which Sherson Limited and Vivid China Investment Limited agreed to subscribe for the perpetual securities issued by Evergrande in an aggregate principal amount of US$900 million, for a consideration of US$450 million and US$450 million, respectively, details of which are disclosed in the joint announcements of the Company and NWCL dated 23 December 2015 and 29 December 2015;

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(l) a sale and purchase agreement dated 29 December 2015 entered into between Shengyu as purchaser and NWDCL as vendor in relation to the disposal of NWDCL’s interests in the property project in Jinyang New District, Guiyang, the PRC for a total consideration of RMB5,300 million, details of which are disclosed in the joint announcement of the Company and NWCL dated 29 December 2015 and the circulars of each of the Company and NWCL dated 19 January 2016; and
(m) a sale and purchase agreement dated 29 December 2015 entered into between Shengyu as purchaser and NWDCL as vendor in relation to the disposal of NWDCL’s interests in the property project in Shuangliu County, Chengdu, the PRC for a total consideration of RMB2,000 million, details of which are disclosed in the joint announcement of the Company and NWCL dated 29 December 2015 and the circulars of each of the Company and NWCL dated 19 January 2016.

Save as disclosed above, as at the Latest Practicable Date, no contracts (not being contracts entered into in the ordinary course of business) had been entered into by the Company or its subsidiaries within the two years immediately preceding the issue of this circular which are, or may be, material to the Group.

5. LITIGATION

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

6. EXPERT’S CONSENT AND QUALIFICATIONS

The following are the names and qualification of the experts who have given an opinion or advice which is contained in this circular:

Name Qualifications PricewaterhouseCoopers Certified Public Accountants Quam Capital Limited A licensed corporation permitted to carry out type 6 (advising on corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, none of PricewaterhouseCoopers and Quam Capital was interested in any securities of any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, and none of PricewaterhouseCoopers and Quam Capital had any direct or indirect interest in any

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APPENDIX III

assets which had been, since 30 June 2015 (being the date to which the latest published audited accounts of the Group were made up), acquired or disposed of by, or leased to, or were proposed to be acquired or disposed of by, or leased to, any member of the Group.

Each of PricewaterhouseCoopers and Quam Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its report and/or letter of advice and references to its name in the form and context in which they respectively appear.

7. GENERAL

(a) The registered office of the Company is situated at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong.
(b) The Company’s share registrar and transfer office is Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) The company secretary of the Company is Mr. Wong Man-Hoi, a member of the Law Society of Hong Kong and has been a qualified solicitor in Hong Kong since 1994. Mr. Wong obtained his Bachelor of Science (Engineering) degree from the University of Hong Kong in 1981, Bachelor of Laws degree from the University of London in 1990 and passed the Solicitors’ Final Examination of the Law Society of England and Wales in 1992.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of the Company at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong from 9:30 a.m. to 5:30 p.m., Monday to Friday (other than public holidays) from the date of this circular up to and including 18 March 2016:

(a) the articles of association of the Company;
(b) the material contracts referred to in the paragraph headed ‘‘4. Material Contracts’’ in this Appendix III;
(c) the letter from Quam Capital, the text of which is set out in ‘‘Letter from Quam Capital’’ of this circular;
(d) the report on the unaudited pro forma financial information of the Group from PricewaterhouseCoopers, the text of which is set out in ‘‘Appendix II — Unaudited Pro Forma Financial Information of the Group’’ to this circular;
(e) the Composite Document, the text of which is set out in ‘‘Appendix IV — Composite Document’’ to this circular;

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GENERAL INFORMATION

APPENDIX III

(f) the annual reports of the Company for each of the two financial years ended 30 June 2014 and 2015;
(g) the consent letters of each of PricewaterhouseCoopers and Quam Capital referred to in the paragraph headed ‘‘6. Expert’s Consent and Qualifications’’ in this Appendix III;
(h) the circular of the Company dated 19 January 2016; and
(i) this circular.

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COMPOSITE DOCUMENT

APPENDIX IV

The following is the full text of the Compsite Document jointly issued by NWCL, the Offeror and the Company dated 27 February 2016 containing details of the Offers, which is set out in this Appendix for information only.

==> picture [364 x 553] intentionally omitted <==

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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of the Offers, this Composite Document and/or the accompanying Form(s) of Acceptance or as to the action to be taken, you should
consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or otherwise transferred all your securities in New World China Land Limited, you should at once hand this Composite Document and the accompanying
Form(s) of Acceptance to the purchaser(s) or transferee(s), licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer
was effected for transmission to the purchaser(s) or transferee(s).
This Composite Document should be read in conjunction with the accompanying Form(s) of Acceptance, the contents of which form part of the terms and conditions of the
Offers. This Composite Document is not for release, publication or distribution in or into any jurisdiction where to do so would constitute a violation of the relevant laws of
such jurisdiction.
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the
contents of this Composite Document and the accompanying Form(s) of Acceptance, make no representation as to their accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Composite Document and the accompanying Form(s)
of Acceptance.
The Offers are being made for the securities of a Cayman Islands company and while the Offers are subject to Hong Kong disclosure and procedural requirements, investors
should be aware that these requirements are different from those of the US. The financial statements included herein have been prepared in accordance with Hong Kong
Financial Reporting Standards and thus may not be comparable to financial statements of US companies.
(Incorporated in Hong Kong with limited liability) (Incorporated in the Cayman Islands with limited liability)
(Stock Code: 0017) (Stock Code: 0917)
Easywin Enterprises Corporation Limited
（義榮企業有限公司）
(Incorporated in Hong Kong with limited liability)
COMPOSITE OFFER AND RESPONSE DOCUMENT
VOLUNTARY CONDITIONAL CASH OFFERS
BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
ON BEHALF OF THE OFFEROR,
A WHOLLY OWNED SUBSIDIARY OF
NEW WORLD DEVELOPMENT COMPANY LIMITED,
TO ACQUIRE ALL THE ISSUED SHARES OF NEW WORLD CHINA LAND LIMITED
(OTHER THAN THOSE ALREADY HELD BY THE OFFEROR AND
NEW WORLD DEVELOPMENT COMPANY LIMITED)
AND TO CANCEL ALL THE OUTSTANDING OPTIONS OF
NEW WORLD CHINA LAND LIMITED
Financial Adviser to NWD and the Offeror
Financial Adviser to NWCL
Independent Financial Adviser to the NWCL Independent Board Committee
Unlessheaded the‘‘Definitionscontext otherwise’’ in this Compositerequires, capitalisedDocument.terms used in this Composite Document (including this cover page) have the same meanings as those defined in the section
A ‘‘Letter from HSBC’’ containing, among other things, the details of the terms and conditions of the Offers are set out on pages 13 to 34 of this Composite Document.
A ‘‘Letter from the NWCL Board’’ is set out on pages 35 to 39 of this Composite Document.
A ‘‘Letter from the NWCL Independent Board Committee’’ containing its recommendations to the Independent NWCL Shareholders and the NWCL Optionholders in respect
of the Offers is set out on pages 40 and 41 of this Composite Document.
A ‘‘Letter from the NWCL Independent Financial Adviser’’ containing its advice and recommendations to the NWCL Independent Board Committee in respect of the Offers is
set out on pages 42 to 78 of this Composite Document.
The procedures for acceptance and settlement of the Offers are set out in ‘‘Appendix I — Further Terms of the Offers’’ to this Composite Document and in the accompanying
Form(s) of Acceptance. Acceptance of the Share Offer should be received by the Registrar and acceptance of the Option Offer should be received by the company secretary of
NWCL by no later than 4:00 p.m. on Monday, 21 March 2016 or such later time(s) and/or date(s) as the Offeror may determine and announce, in accordance with the
Takeovers Code.
TheNoticesNWCL’’ on Offerpages Shareholders4 and 5 of thisandCompositethe NWCLDocument.Optionholders should inform themselves of and observe any applicable legal, tax or regulatory requirements. See ‘‘Important
ShareholdersForm(s)Any personsof Acceptanceincluding,and NWCLwithouttoOptionholdersany jurisdictionlimitation,’’ incustodians,outsidethe ‘‘Letterof HongnomineesfromKongHSBCandshould’’trustees,in thisreadwhoCompositethewould,detailsDocumentorinotherwisethis regardbeforeintendwhichtakingto,areforwardanycontainedaction.this CompositeItin isthethesectionresponsibilityDocumentheadedand/or‘‘ofOverseasanytheoverseasaccompanyingNWCLNWCLOffer
Offer Shareholders and overseas NWCL Optionholders wishing to take any action in relation to the Share Offer and the Option Offer, respectively, to satisfy themselves as to
the full observance of the laws and regulations of the relevant jurisdictions in connection therewith, including obtaining all governmental, exchange control or other consents
which may be required and the compliance with all necessary formalities or legal requirements and the payment of any issue, transfer or other taxes payable by such overseas
NWCL Offer Shareholders or overseas NWCL Optionholders in respect of the acceptance of the Offers (as applicable) in such jurisdiction. The overseas NWCL Offer
Shareholders and the overseas NWCL Optionholders are advised to seek professional advice on deciding whether to accept the Offers (as applicable).
This Composite Document is issued jointly by NWD, the Offeror and NWCL.
The English texts of this Composite Document and the accompanying Form(s) of Acceptance shall prevail over their respective Chinese texts for the purpose of
interpretation.
Scheme DocumentFor Information Only
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27 February 2016
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COMPOSITE DOCUMENT

APPENDIX IV

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Page
Important Notices to all NWCL Offer Shareholders and NWCL Optionholders . . . . . . . . 1
Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Important Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Letter from HSBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Letter from the NWCL Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Letter from the NWCL Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Letter from the NWCL Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Appendix I — Further Terms of the Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Appendix II — Financial Information of the NWCL Group . . . . . . . . . . . . . . . . . . . . . II-1
Appendix III — Summary of Property Valuation of the NWCL Group . . . . . . . . . . . III-1
Appendix IV — General Information of NWD and the Offeror . . . . . . . . . . . . . . . . . . . IV-1
Appendix V — General Information of NWCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
Appendix VI — Form of Option Offer Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
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COMPOSITE DOCUMENT

APPENDIX IV

IMPORTANT NOTICES TO ALL NWCL OFFER SHAREHOLDERS AND NWCL OPTIONHOLDERS

The following information is important for all NWCL Offer Shareholders and NWCL Optionholders.

You are urged to read this entire Composite Document, including the appendices, and the Form(s) of Acceptance carefully.

. Share Offer Price: HK$7.80 in cash per Offer Share. The Share Offer Price will not be increased and the Offeror does not reserve the right to do so.
. Option Offer Price: Please refer to the section headed ‘‘Option Offer’’ in the ‘‘Letter from HSBC’’ in this Composite Document. The Option Offer Price will not be increased and the Offeror does not reserve the right to do so.
. How to accept the Offers: Please return the duly completed and signed WHITE Form of Share Offer Acceptance and the relevant documents to the Registrar (for the Share Offer) and/or the PINK Form of Option Offer Acceptance and the relevant documents to the company secretary of NWCL (for the Option Offer).
. Deadline for acceptance: The Offers will close for acceptances at 4:00 p.m. on Monday, 21 March 2016 (the first Closing Date), unless otherwise revised or extended.

For details, please refer to ‘‘Appendix I — Further Terms of the Offers’’ to this Composite Document.

. Settlement: Payments in cash will be made within seven (7) Business Days following the later of: (i) the date on which the Offers become or are declared unconditional in all respects, and (ii) the date of receipt of your valid acceptance.
. Your prompt action is critical: The Offers will lapse if valid acceptances from the NWCL Offer Shareholders in respect of less than 90% of the Offer Shares or less than 90% of the Disinterested NWCL Shares are received by 4:00 p.m. on Monday, 21 March 2016 (being the first Closing Date), unless otherwise revised or extended. You should therefore act promptly.

NEED HELP?

Please call the customer service hotline of the Registrar, Tricor Standard Limited, at +852 2980 1333 between 9:00 a.m. and 5:00 p.m. on Mondays to Fridays, excluding Hong Kong public holidays, if you have any enquiries concerning administrative matters, such as dates, documentation and procedures relating to the Share Offer.

The hotline cannot and will not provide advice on the merits of the Offers or give financial or legal advice. If you are in any doubt as to any aspect of this Composite Document or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional adviser.

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COMPOSITE DOCUMENT

APPENDIX IV

EXPECTED TIMETABLE

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The timetable set out below is indicative only and may be subject to changes. Further
announcement(s) will be made in the event that there is any change to the following timetable.
Event Hong Kong Time
Despatch date of this Composite Document and
the accompanying Form(s) of Acceptance . . . . . . . . . . . . . . . . . . . . . . . . Saturday, 27 February 2016
Opening date of the Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Saturday, 27 February 2016
NWD EGM at which the Offers will be subject to
approval by the NWD Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:15 a.m. on Friday,
18 March 2016
First Closing Date (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 21 March 2016
Latest time for acceptance of the Offers on the first
Closing Date (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Monday,
21 March 2016
Announcement of the results of the Offers as at the first
Closing Date, on the website of the Stock Exchange. . . . . . . . . . . . . . . . . no later than 7:00 p.m. on
Monday, 21 March 2016
Latest date for despatch of cheques for payment of the amounts
due under the Offers in respect of valid acceptances
received by the first Closing Date, assuming that the
Offers become or are declared unconditional on the
first Closing Date (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 1 April 2016
Latest time and date for acceptance of the Offers
assuming that the Offers become or are declared
unconditional in all respects on the first Closing Date
(Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday,
5 April 2016
Latest time and date by which the Offers can become or
be declared unconditional as to acceptances (Note 5) . . . . . . . . . . . . . . . . 7:00 p.m. on Wednesday,
27 April 2016
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EXPECTED TIMETABLE
Notes:
(1) The Offers will close for acceptances at 4:00 p.m. on Monday, 21 March 2016 unless the Offeror revises or extends
the Offers in accordance with the Takeovers Code. The Offeror has the right under the Takeovers Code to extend the
Offers until such date as it may determine subject to compliance with the Takeovers Code (or as permitted by the
Executive in accordance with the Takeovers Code). In the event that the Offers have not become unconditional on
the first Closing Date, the Offeror will issue an announcement stating whether the Offers have lapsed or have been
revised or extended to another Closing Date or until further notice. In the latter case, at least fourteen (14) days’
notice in writing must be given, before the Offers are closed, to the NWCL Offer Shareholders and the NWCL
Optionholders who have not accepted the relevant Offers.
(2) If you wish to accept the Offers, you should ensure your duly completed and signed Form(s) of Acceptance and the
relevant documents arrive at the Registrar (for the Share Offer) or the company secretary of NWCL (for the Option
Offer) by no later than the prescribed time. If you choose to deliver the documents by post, you should consider the
timing requirements for postage.
Beneficial owners of the Offer Shares who hold their Offer Shares in CCASS directly as an investor participant or
indirectly via a broker or custodian participant should note the timing requirements for causing instructions to be
made to CCASS in accordance with the General Rules of CCASS and CCASS Operational Procedures.
All acceptances, instructions, authorisations and undertakings given by the NWCL Offer Shareholders in the
WHITE Form of Share Offer Acceptance and by the NWCL Optionholders in the PINK Form of Option Offer
Acceptance shall be irrevocable except as permitted under the Takeovers Code.
(3) Payment of the consideration (after deducting the seller’s ad valorem stamp duty) for the Offer Shares tendered for
acceptance under the Share Offer will be posted by ordinary post to the NWCL Offer Shareholders who accept the
Share Offer at their own risk, and payment of the consideration for the NWCL Options surrendered for cancellation
under the Option Offer will be delivered to the office of NWCL in Hong Kong at 9/F., New World Tower 1, 18
Queen’s Road Central, Hong Kong for collection by the NWCL Optionholders. Payment will be made as soon as
possible, but in any event within seven (7) Business Days following the later of (i) the date on which the Offers
become or are declared unconditional in all respects; and (ii) the date of receipt by the Registrar (in respect of the
Share Offer) or the company secretary of NWCL (in respect of the Option Offer) of all the relevant documents to
render each acceptance under the relevant Offers complete and valid in accordance with the Takeovers Code, this
Composite Document and the relevant accompanying Form(s) of Acceptance.
(4) Pursuant to Rule 15.3 of the Takeovers Code, the final Closing Date should be no less than fourteen (14) days after
the date on which the Offers become or are declared unconditional in all respects.
(5) In accordance with the Takeovers Code, except with the consent of the Executive, the Share Offer may not become
or be declared unconditional as to acceptances after 7:00 p.m. on the 60th day after the day this Composite
Document is posted. Accordingly, unless the Share Offer has previously become or been declared unconditional as
to acceptances or has been extended with the consent of the Executive, the Offers will lapse at 7:00 p.m. on
Wednesday, 27 April 2016.
Effect of bad weather on the latest time for acceptance of the Offers and/or the latest date for despatch of cheques
If there is a tropical cyclone warning signal number 8 or above, or a black rainstorm warning in force in Hong Kong:
(a) at any time before 12:00 noon but no longer in force at or after 12:00 noon on the latest date for acceptance of the
Offers and/or the latest date for despatch of cheques for the amounts due under the Offers in respect of valid
acceptances (as the case may be), the latest time for acceptance of the Offers will remain at 4:00 p.m. on the same
Business Day and/or the latest date for despatch of cheques will remain on the same Business Day; or
(b) at any time between 12:00 noon and 4:00 p.m. on the latest date for acceptance of the Offers and/or the latest date
for despatch of cheques for the amounts due under the Offers in respect of valid acceptances (as the case may be),
the latest time for acceptance of the Offers will be rescheduled to 4:00 p.m. on the following Business Day and/or
the latest date for despatch of cheques will be rescheduled to the following Business Day.
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COMPOSITE DOCUMENT

APPENDIX IV

IMPORTANT NOTICES

NOTICE TO US INVESTORS

The Offers are being made for the securities of a Cayman Islands company and are subject to Hong Kong disclosure and procedural requirements, which are different from those of the US. The financial information included in this Composite Document has been prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. The Offers will be made in the US pursuant to exemptions from some of the applicable US tender offer rules and otherwise in accordance with the requirements of the SFO. Accordingly, the Offers will be subject to disclosure and other procedural requirements of Hong Kong, including with respect to withdrawal rights, the timetable of the Offers, settlement procedures and the timing of payments that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the Offers by a US holder of the Offer Shares or the NWCL Options pursuant to the Offers may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each holder of the Offer Shares or NWCL Options is urged to consult his/her independent professional adviser immediately regarding the applicable tax consequences of the Offers.

It may be difficult for US holders of Offer Shares or NWCL Options to enforce their rights and claims arising out of the US federal securities laws, since NWD, the Offeror and NWCL are located in a country other than the US, and some or all of their officers and directors may be residents of a country other than the US. US holders of the Offer Shares or NWCL Options may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s judgment.

You should be aware that in accordance with the Takeovers Code, the Offeror, its affiliates and its advisers may bid for or purchase NWCL Shares. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be reported to the SFC and, to the extent made public by the SFC, will be available on the website of the SFC at http://www.sfc.hk/.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Composite Document includes certain ‘‘forward-looking statements’’. These statements are based on the current expectations of the management of the Offeror, NWD and/or NWCL (as the case may be) and are naturally subject to uncertainty and changes in circumstances.

Forward-looking statements include, without limitation, statements typically containing words such as ‘‘intends’’, ‘‘expects’’, ‘‘anticipates’’, ‘‘targets’’, ‘‘estimates’’, ‘‘envisages’’ and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed

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COMPOSITE DOCUMENT

APPENDIX IV

IMPORTANT NOTICES

or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction of the Conditions, as well as additional factors, such as general, social, economic and political conditions in the countries in which the NWD Group and/or the NWCL Group operate or other countries which have an impact on the NWD Group and/or the NWCL Group’s business activities or investments, interest rates, the monetary and interest rate policies of the countries in which the NWD Group and/or the NWCL Group operate, inflation or deflation, foreign exchange rates, the performance of the financial markets in the countries in which the NWD Group and/or the NWCL Group operate and globally, changes in domestic and foreign laws, regulations and taxes, changes in competition and the pricing environments in the countries in which the NWD Group and/or the NWCL Group operate and regional or general changes in asset valuations. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.

All written and oral forward-looking statements attributable to the Offeror, NWD, NWCL or persons acting on behalf of any of them are expressly qualified in their entirety by the cautionary statements above. The forward-looking statements included herein are made only as of the Latest Practicable Date. Subject to the requirement of applicable laws, rules and regulations, including the Takeovers Code, none of NWD, NWCL or the Offeror assumes any obligation to correct or update the forward-looking statements or opinions contained in this Composite Document.

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COMPOSITE DOCUMENT

APPENDIX IV

DEFINITIONS

In this Composite Document, the following expressions have the meanings set out below unless the context requires otherwise.

‘‘acting in concert’’

has the meaning ascribed to it in the Takeovers Code

‘‘Adjusted NAV’’

adjusted unaudited consolidated net asset value of the NWCL Group as at 31 December 2015 as set out in the section headed ‘‘V. Property Interests and Adjusted Net Asset Value’’ of ‘‘Appendix II — Financial Information of the NWCL Group’’ to this Composite Document

‘‘Announcement Date’’

Wednesday, 6 January 2016, being the date of the Joint Announcement

‘‘associate’’

has the meaning ascribed to it in the Takeovers Code

‘‘Business Day’’

a day on which the Stock Exchange is open for the transaction of business

‘‘Cayman Islands Companies Law’’

the Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands

‘‘CCASS’’

the Central Clearing and Settlement System established and operated by HKSCC

‘‘Closing Date’’

Monday, 21 March 2016, being the first closing date of the Share Offer or any subsequent closing date as may be announced by NWD and the Offeror and approved by the Executive

‘‘Composite Document’’

this composite offer and response document dated 27 February 2016 in respect of the Offers jointly issued by NWD, the Offeror and NWCL in accordance with the Takeovers Code, as may be revised or supplemented as appropriate

‘‘Condition(s)’’

the condition(s) of the Offers, as set out under the section headed ‘‘Conditions of the Offers’’ in the ‘‘Letter from HSBC’’ in this Composite Document

‘‘Deed of Undertaking’’

a deed of undertaking executed between an NWCL Optionholder and NWCL as referred to in the section headed ‘‘Shareholding Structure of NWCL and the Offers — Option Offer’’ in the ‘‘Letter from HSBC’’ in this Composite Document

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COMPOSITE DOCUMENT

APPENDIX IV

DEFINITIONS

‘‘Disinterested NWCL Shares’’	NWCL Shares other than those which are owned by the
	Offeror or the Offeror Concert Parties
‘‘Disposal(s)’’	the disposal(s) of certain subsidiaries and joint ventures by
	NWDCL to Shengyu for an aggregate consideration of
	approximately RMB20,800 million (subject to adjustments),
	further details of which are set out in the joint announcement
	of NWD and NWCL dated 2 December 2015, the circular of
	NWCL dated 23 December 2015, the joint announcement of
	NWD and NWCL dated 29 December 2015 and the circulars
	of each of NWD and NWCL dated 19 January 2016
‘‘EGM’’	the extraordinary general meeting of NWD to be held at
	Meeting Room S421 (Harbour Road Entrance), Hong Kong
	Convention and Exhibition Centre, 1 Expo Drive, Wanchai,
	Hong Kong on Friday, 18 March 2016 at 11:15 a.m. (or any
	adjournment thereof)
‘‘Evergrande’’	Evergrande Real Estate Group Limited (Stock Code: 3333), a
	company incorporated in the Cayman Islands with limited
	liability, the shares of which are listed on the Main Board of
	the Stock Exchange, being the ultimate holding company of
	Shengyu
‘‘Executive’’	the Executive Director of the Corporate Finance Division of
	the SFC or any delegate of the Executive Director
‘‘Form of Option Offer	the PINK form of acceptance and cancellation in respect of
Acceptance’’	the Option Offer accompanying this Composite Document
‘‘Form of Share Offer	the WHITE form of acceptance and transfer in respect of the
Acceptance’’	Share Offer accompanying this Composite Document
‘‘Forms of Acceptance’’	collectively, the Form of Share Offer Acceptance and the Form
	of Option Offer Acceptance, and ‘‘Form of Acceptance’’ shall
	mean either one of them
‘‘Great Worth’’	Great Worth Holdings Limited, a non-wholly owned subsidiary
	of NWD
‘‘High Earnings’’	High Earnings Holdings Limited, a wholly owned subsidiary
	of NWS
‘‘HK$’’	Hong Kong dollar(s), the lawful currency of Hong Kong
‘‘HKSCC’’	Hong Kong Securities Clearing Company Limited
‘‘Hong Kong’’	the Hong Kong Special Administrative Region of the PRC

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COMPOSITE DOCUMENT

APPENDIX IV

DEFINITIONS

‘‘HSBC’’	The Hongkong and Shanghai Banking Corporation Limited,
	being the financial adviser to NWD and the Offeror in relation
	to the Offers, a registered institution under the SFO, registered
	to carry on Type 1 (dealing in securities), Type 2 (dealing in
	futures contracts), Type 4 (advising on securities), Type 5
	(advising on futures contracts), Type 6 (advising on corporate
	finance) and Type 9 (asset management) regulated activities
	under the SFO and a licensed bank under the Banking
	Ordinance (Chapter 155 of the laws of Hong Kong)
‘‘Independent NWCL	NWCL Shareholders excluding the Offeror, NWD and the
Shareholders’’	Offeror Concert Parties. For the avoidance of doubt, the
	Independent NWCL Shareholders include any member of the
	HSBC group in respect of NWCL Shares of its non-
	discretionary investment clients where such client (a) has
	control over whether to tender acceptances to the Share Offer
	in respect of those NWCL Shares, (b) if acceptances of the
	Share Offer in respect of those NWCL Shares are to be
	tendered, gives instructions to tender them, and (c) is not the
	Offeror or any of the Offeror Concert Parties
‘‘Joint Announcement’’	the announcement dated 6 January 2016 jointly made by
	NWD, the Offeror and NWCL in relation to the Offers
‘‘Knight Frank’’	Knight Frank Petty Limited, the independent property valuer
	appointed by NWCL
‘‘Last Trading Day’’	Thursday, 31 December 2015, being the last trading day of
	NWCL Shares prior to the issue of the Joint Announcement
‘‘Latest Practicable Date’’	Wednesday, 24 February 2016, being the latest practicable
	date prior to the printing of this Composite Document for
	ascertaining certain information for inclusion in this
	Composite Document
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock
	Exchange
‘‘MLAP’’	Merrill Lynch (Asia Pacific) Limited, being the financial
	adviser to NWCL in relation to the Offers, a licensed
	corporation which is permitted to carry on Type 1 (dealing in
	securities), Type 4 (advising on securities) and Type 6
	(advising on corporate finance) regulated activities under the
	SFO

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COMPOSITE DOCUMENT

APPENDIX IV

DEFINITIONS

‘‘NWCL’’ New World China Land Limited, a company incorporated in the Cayman Islands with limited liability and a non-wholly owned subsidiary of NWD, the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 0917) ‘‘NWCL Board’’ the board of directors of NWCL ‘‘NWCL Directors’’ the directors of NWCL ‘‘NWCL Group’’ collectively NWCL and its subsidiaries ‘‘NWCL Independent Board the independent board committee of NWCL, comprising Dr. Committee’’ Cheng Wai-Chee, Christopher, Hon. Tien Pei-Chun, James and Mr. Ip Yuk-Keung, Albert, established by the NWCL Board to make a recommendation to the Independent NWCL Shareholders and the NWCL Optionholders in respect of the Offers ‘‘NWCL Independent Financial Somerley Capital Limited, the independent financial adviser to Adviser’’ or ‘‘Somerley’’ the NWCL Independent Board Committee in connection with the Offers and a licensed corporation which is permitted to carry on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO ‘‘NWCL Offer Shareholders’’ registered holders for the time being of the Offer Shares ‘‘NWCL Option(s)’’ the outstanding, vested and unvested, share option(s), relating to NWCL Share(s), granted under the NWCL Share Option Schemes from time to time ‘‘NWCL Optionholder(s)’’ the holder(s) of the NWCL Option(s) ‘‘NWCL Share Option Schemes’’ the share option schemes adopted by NWCL on 26 November 2002 and 22 November 2011, respectively ‘‘NWCL Shareholder(s)’’ registered holder(s) for the time being of the NWCL Share(s) ‘‘NWCL Shares’’ ordinary shares of HK$0.10 each in the issued share capital of NWCL ‘‘NWD’’ New World Development Company Limited (新世界發展有限公司), a company incorporated in Hong Kong with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 0017), and the parent company of NWCL ‘‘NWD Board’’ the board of directors of NWD ‘‘NWD Group’’ collectively NWD and its subsidiaries

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COMPOSITE DOCUMENT

APPENDIX IV

DEFINITIONS

‘‘NWD Shareholders’’	the shareholders of NWD
‘‘NWD Shares’’	ordinary shares of NWD
‘‘NWDCL’’	New World Development (China) Limited, a company
	incorporated in Hong Kong with limited liability, a wholly
	owned subsidiary of NWCL and the vendor in relation to the
	Disposals
‘‘NWS’’	NWS Holdings Limited, a non-wholly owned subsidiary of
	NWD and the issued shares of which are listed on the Main
	Board of the Stock Exchange (stock code: 0659)
‘‘Offer Period’’	has the meaning ascribed to it in the Takeovers Code and
	which commenced on 6 January 2016, being the
	Announcement Date, and ending on the later of (i) the date
	when the Offers close for acceptances; and (ii) the date when
	the Offers lapse
‘‘Offer Shares’’	NWCL Shares, other than those already held by the Offeror
	and NWD
‘‘Offeror’’	Easywin Enterprises Corporation Limited (義榮企業有限公司),
	a company incorporated in Hong Kong with limited liability,
	being a wholly owned subsidiary of NWD
‘‘Offeror Board’’	the board of directors of the Offeror
‘‘Offeror Concert Parties’’	parties acting in concert with the Offeror in relation to NWCL
	(except for members of the HSBC group which are exempt
	principal traders and/or exempt fund managers, in each case
	recognised by the Executive as such for the purposes of the
	Takeovers Code) under the Takeovers Code, and ‘‘Offeror
	Concert Party’’shall mean any one of them
‘‘Offers’’	the Share Offer and the Option Offer
‘‘Option Offer’’	the voluntary conditional cash offer by HSBC on behalf of the
	Offeror to the NWCL Optionholders in compliance with Rule
	13 of the Takeovers Code to cancel all the outstanding NWCL
	Options held by the NWCL Optionholders in accordance with
	the terms and conditions set out in this Composite Document
	and the Form of Option Offer Acceptance, and any subsequent
	revision or extension of such offer
‘‘Option Offer Price’’	the price at which the Option Offer is made, which is the ‘‘see-
	through’’ price being the Share Offer Price minus the relevant
	exercise price of the NWCL Option for the cancellation of
	each NWCL Option held by the NWCL Optionholders

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APPENDIX IV

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DEFINITIONS
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	DEFINITIONS
‘‘PRC’’	the People’s Republic of China (for the purpose of this
	Composite Document, excluding Hong Kong, the Macau
	Special Administrative Region of the People’s Republic of
	China and Taiwan)
‘‘Previous Proposal’’	a scheme of arrangement used in the Offeror’s privatisation
	proposal for NWCL which lapsed in June 2014
‘‘Registrar’’	Tricor Standard Limited at Level 22, Hopewell Centre, 183
	Queen’s Road East, Hong Kong, the Hong Kong branch share
	registrar of the NWCL Shares
‘‘Relevant Period’’	the period from 6 July 2015, being the date six months before
	the Announcement Date, up to and including the Latest
	Practicable Date
‘‘RMB’’	Renminbi, the lawful currency of the PRC
‘‘SFC’’	the Securities and Futures Commission of Hong Kong
‘‘SFO’’	the Securities and Futures Ordinance (Chapter 571 of the laws
	of Hong Kong)
‘‘Share Offer’’	the voluntary conditional cash offer by HSBC on behalf of the
	Offeror to acquire all of the Offer Shares in accordance with
	the terms and conditions set out in this Composite Document
	and the Form of Share Offer Acceptance, and any subsequent
	revision or extension of such offer
‘‘Share Offer Price’’	the price at which the Share Offer is made, being HK$7.80 per
	Offer Share
‘‘Shengyu’’	Shengyu (BVI) Limited, a company incorporated in the British
	Virgin Islands with limited liability, which is an indirect
	wholly owned subsidiary of Evergrande and the purchaser in
	relation to the Disposals
‘‘sq m’’ or ‘‘sqm’’	square metres
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited
‘‘subsidiaries’’	has the meaning ascribed to it in the Listing Rules
‘‘Takeovers Code’’	the Code on Takeovers and Mergers published by the SFC and
	administered by the Executive
‘‘US’’	the United States of America
‘‘US$’’	the United States dollars, the lawful currency of the US
‘‘%’’	per cent
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APPENDIX IV

DEFINITIONS

Except as otherwise specified, all times and dates contained in this Composite Document and the accompanying Form(s) of Acceptance refer to Hong Kong times and dates.
Certain amounts and percentage figures in this Composite Document have been subject to rounding adjustments.
Certain English translations of Chinese names or words or Chinese translations of English names or words in this Composite Document are included for information and identification purposes only and should not be regarded as the official English translation of such Chinese names or words or Chinese translation of such English names or words, respectively.
The singular includes the plural and vice versa, unless the context otherwise requires.
References to any appendix, paragraph and sub-paragraph are references to the appendices to, and paragraphs of, this Composite Document and any sub-paragraphs of them, respectively.
References to any statute or statutory provision include a statute or statutory provision which amends, consolidates or replaces the same whether before or after the date of this Composite Document.
Reference to one gender is a reference to all or any genders.
The English texts of this Composite Document and the accompanying Form(s) of Acceptance shall prevail over their respective Chinese texts for the purpose of interpretation.
In ‘‘Appendix II — Financial Information of the NWCL Group’’ to this Composite Document, the translation of RMB amounts into Hong Kong dollars has been made:
(a) at the rate of RMB0.79 to HK$1.00 in respect of the consolidated income statement of NWCL for the year ended 30 June 2014;
(b) at the rate of RMB0.80 to HK$1.00 in respect of the consolidated financial position of NWCL as at 30 June 2014;
(c) at the rate of RMB0.80 to HK$1.00 in respect of the consolidated income statement of NWCL for the year ended 30 June 2015;
(d) at the rate of RMB0.80 to HK$1.00 in respect of the consolidated financial position of NWCL as at 30 June 2015;
(e) at the rate of RMB0.82 to HK$1.00 in respect of the consolidated income statement of NWCL for the six months ended 31 December 2015;
(f) at the rate of RMB0.835 to HK$1.00 in respect of the consolidated financial position of NWCL as at 31 December 2015; and
(g) at the rate of RMB0.835 to HK$1.00 in respect of the market value of property interests attributable to the NWCL Group as at 31 December 2015.

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COMPOSITE DOCUMENT

APPENDIX IV

LETTER FROM HSBC

27 February 2016

To the NWCL Offer Shareholders and the NWCL Optionholders

Dear Sir or Madam,

VOLUNTARY CONDITIONAL CASH OFFERS BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED ON BEHALF OF THE OFFEROR, A WHOLLY OWNED SUBSIDIARY OF NEW WORLD DEVELOPMENT COMPANY LIMITED, TO ACQUIRE ALL THE ISSUED SHARES OF NEW WORLD CHINA LAND LIMITED (OTHER THAN THOSE ALREADY HELD BY THE OFFEROR AND NEW WORLD DEVELOPMENT COMPANY LIMITED) AND TO CANCEL ALL THE OUTSTANDING OPTIONS OF NEW WORLD CHINA LAND LIMITED

1. INTRODUCTION

Reference is made to the Joint Announcement whereby the Offeror Board, the NWD Board and the NWCL Board jointly announced that HSBC, on behalf of the Offeror, a wholly owned subsidiary of NWD, intended to make a voluntary conditional cash offer to acquire all of the Offer Shares, and pursuant to Rule 13 of the Takeovers Code, extend an appropriate offer to cancel all the outstanding NWCL Options.

This letter sets out, among other things, details of the terms of the Offers, the reasons for and benefits of the Offers, the intention of NWD regarding the NWCL Group and information on the Offeror and NWD. Further details of the terms of the Offers are set out in ‘‘Appendix I — Further Terms of the Offers’’ to the Composite Document of which this letter forms part, and in the accompanying Form(s) of Acceptance. Terms used in this letter shall have the same meanings as those defined in the Composite Document unless the context otherwise requires.

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COMPOSITE DOCUMENT

APPENDIX IV

LETTER FROM HSBC

The NWCL Offer Shareholders and the NWCL Optionholders are strongly advised to consider carefully the information contained in the ‘‘Letter from the NWCL Board’’ on pages 35 to 39, the ‘‘Letter from the NWCL Independent Board Committee’’ on pages 40 and 41 and the ‘‘Letter from the NWCL Independent Financial Adviser’’ on pages 42 to 78, the option offer letter, the form of which is set out in the ‘‘Form of Option Offer Letter’’ on pages VI-1 to VI-6, the accompanying Form(s) of Acceptance and the appendices which form part of the Composite Document.

THE OFFERS The Offers are made by HSBC on behalf of the Offeror in compliance with the Takeovers Code on the basis set out below.

Share Offer:

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$7.80 in cash

The Share Offer Price will not be increased, and the Offeror does not reserve the right to do so.

The Share Offer is extended to all NWCL Offer Shareholders (including certain Offeror Concert Parties).

Option Offer:

For cancellation of each NWCL Option . . . . . . . . . . the Option Offer Price in cash

The relevant exercise price applicable to each NWCL Option ranges from HK$2.45 to HK$5.42 and, accordingly, the Option Offer Price ranges from HK$2.38 to HK$5.35 per NWCL Option.

The Option Offer Price will not be increased, and the Offeror does not reserve the right to do so.

The Option Offer is extended to all NWCL Optionholders in accordance with the Takeovers Code.

Comparisons of value

Closing prices of NWCL Shares

The Share Offer Price of HK$7.80 represents:

(i) a premium of approximately 25.6% over the closing price of HK$6.21 per NWCL Share as quoted on the Stock Exchange on the Last Trading Day;
(ii) a premium of approximately 28.5% over the average closing price of approximately HK$6.07 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 5 trading days immediately prior to and including the Last Trading Day;

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(iii) a premium of approximately 29.4% over the average closing price of approximately HK$6.03 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 10 trading days immediately prior to and including the Last Trading Day;
(iv) a premium of approximately 40.8% over the average closing price of approximately HK$5.54 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 30 trading days immediately prior to and including the Last Trading Day;
(v) a premium of approximately 45.8% over the average closing price of approximately HK$5.35 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 60 trading days immediately prior to and including the Last Trading Day;
(vi) a premium of approximately 56.9% over the average closing price of approximately HK$4.97 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Day; and
(vii) a premium of approximately 4.4% over the closing price of HK$7.47 per NWCL Share as quoted on the Stock Exchange on the Latest Practicable Date.

Net asset value per NWCL Share

The Share Offer Price of HK$7.80 represents:

(i) a premium of approximately 11.5% over the audited consolidated net asset value per NWCL Share of approximately HK$6.995 as at 30 June 2015, based on the total number of issued NWCL Shares as at 30 June 2015;
(ii) a premium of approximately 14.6% over the unaudited consolidated net asset value per NWCL Share of approximately HK$6.806 as at 31 December 2015, based on the total number of issued NWCL Shares as at 31 December 2015; and
(iii) a discount of approximately 29.4% to the Adjusted NAV per NWCL Share of approximately HK$11.05 as at 31 December 2015, based on the total number of issued NWCL Shares as at the Latest Practicable Date.

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before the end of March 2016, pending the completion of certain procedural matters relating to the changes in the board composition of the relevant target company arising from the Disposal. The consideration payable for the outstanding Disposal amounts to RMB2,000 million (subject to adjustments), and accounts for approximately 9.6% of the total consideration of approximately RMB20,800 million (subject to adjustments) for all the Disposals. The Disposals are accretive to NWCL’s consolidated net asset value but the impact of the Disposals has not been reflected in NWCL’s audited consolidated financial statements as at 30 June 2015 and unaudited condensed consolidated financial statements as at 31 December 2015, though they are reflected in the Adjusted NAV set out under the section headed ‘‘Property Interests and Adjusted Net Asset Value’’ in ‘‘Appendix II — Financial Information of the NWCL Group’’ to the Composite Document. Please refer to the joint announcement of NWD and NWCL dated 2 December 2015, the circular of NWCL dated 23 December 2015, the joint announcement of NWD and NWCL dated 29 December 2015 and the circulars of each of NWD and NWCL dated 19 January 2016 for details of the Disposals.

Your attention is drawn to the summary of the property valuation as set out in ‘‘Appendix III — Summary of Property Valuation of the NWCL Group’’ to the Composite Document from Knight Frank pursuant to Rule 11 of the Takeovers Code providing an updated valuation of NWCL’s properties as at 31 December 2015. Your attention is also drawn to the section headed ‘‘Property Interests and Adjusted Net Asset Value’’ as set out in ‘‘Appendix II — Financial Information of the NWCL Group’’ to the Composite Document which provides details of the Adjusted NAV, which takes into account, among other things, the impact of the Disposals, the revaluation surplus arising from valuation of the property interests and deferred taxes payable on the attributable revaluation surplus.

Value of the Offers

As at the Latest Practicable Date, there were (i) 8,701,671,754 NWCL Shares in issue, of which 5,977,019,371 NWCL Shares were held by the Offeror and NWD; and (ii) 25,544,661 outstanding NWCL Options granted under the NWCL Share Option Schemes (including 18,240,200 NWCL Options which had not been vested on the Latest Practicable Date), entitling the NWCL Optionholders to subscribe for an aggregate of 25,544,661 NWCL Shares at exercise prices ranging from HK$2.45 to HK$5.42 per NWCL Option.

Based on the Share Offer Price of HK$7.80 per Offer Share, the entire issued share capital of NWCL as at the Latest Practicable Date was valued at approximately HK$67,873.0 million.

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Confirmation of Financial Resources

The Offeror intends to finance the cash required for the Offers from its (or NWD’s) own cash reserves. In addition, HSBC (in its capacity as lender) has granted a credit facility of HK$21,467.0 million to the Offeror which may be used to finance the cash required for the Offers in full.

HSBC, being the financial adviser to NWD and the Offeror in respect of the Offers, is satisfied that sufficient financial resources are available to the Offeror to satisfy full acceptance of the Offers in accordance with their respective terms.

Settlement of Consideration

3. CONDITIONS OF THE OFFERS

The Share Offer is subject to the following Conditions:

(i) the NWD Shareholders having passed an ordinary resolution at the EGM to approve the Offers;
(ii) valid acceptances of the Share Offer having been received (and not, where permitted, withdrawn) by 4:00 p.m. on the Closing Date (or such later time or date as the Offeror may, subject to the rules of the Takeovers Code, decide) in respect of such number of

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NWCL Shares which would result in the Offeror holding at least 90% of the Offer Shares with the further proviso that, within that holding, the Offeror would also hold at least 90% of the Disinterested NWCL Shares;

(iii) no event having occurred which would make any of the Offers or the acquisition of any of the Offer Shares under the Share Offer or the cancellation of the NWCL Options under the Option Offer void, unenforceable or illegal or prohibit implementation of any of the Offers or would impose any additional material conditions or obligations with respect to any of the Offers or any part thereof;
(iv) all necessary consents (including consents from the relevant lenders) in connection with the Offers and in connection with the withdrawal of listing of the NWCL Shares from the Stock Exchange which may be required under any existing contractual obligations of NWCL being obtained and remaining in effect;
(v) no relevant government, governmental, quasi-government, statutory or regulatory body, court or agency in Hong Kong, the Cayman Islands or any other jurisdictions having taken or instituted any action, proceeding, suit, investigation or enquiry (or enacted, made or proposed, and there not continuing to be outstanding, any statute, regulation, demand or order) that would make any of the Offers or its implementation in accordance with its terms void, unenforceable, illegal or impracticable (or which would impose any material and adverse conditions or obligations with respect to any of the Offers or its implementation in accordance with its terms); and
(vi) since the Announcement Date, there having been no material adverse change in the business, assets, financial or trading positions or prospects or conditions (whether operational, legal or otherwise) of the NWCL Group (to an extent which is material in the context of the NWCL Group taken as a whole).

The Offeror reserves the right to waive, in whole or in part, all or any of the Conditions set out above (other than Conditions (i) and (ii)).

As at the Latest Practicable Date, none of the Conditions had been fulfilled.

The Option Offer is subject to and conditional upon the Share Offer becoming or being declared unconditional in all respects.

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fourteen (14) days after the Offers become or are declared unconditional in all respects. The NWCL Offer Shareholders and the NWCL Optionholders are reminded that the Offeror does not have any obligation to keep the Offers open for acceptance beyond this 14-day period.

WARNING: Shareholders, holders of options and securities and potential investors of NWCL should be aware that the Offers are subject to the satisfaction and/or waiver (where applicable) of the Conditions. Accordingly, the Offers may or may not become unconditional. Shareholders, holders of options and securities and potential investors of NWCL should therefore exercise caution when dealing in the securities of NWCL. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor or other professional adviser.

4. PUBLIC FLOAT

5. POSSIBLE COMPULSORY ACQUISITION AND WITHDRAWAL OF LISTING

Subject to compliance with the relevant requirements under section 88 of the Cayman Islands Companies Law, if the Offeror, within four (4) months of the posting of the Composite Document, has received valid acceptances in respect of not less than 90% of the Offer Shares and not less than 90% of the Disinterested NWCL Shares, the Offeror intends to privatise NWCL by exercising its rights to compulsorily acquire those Offer Shares not acquired by the Offeror under the Share Offer. If the Offeror does decide to exercise such rights and completes the compulsory acquisition, NWCL will become an indirect wholly owned subsidiary of NWD and an application will be made for the withdrawal of the listing of the NWCL Shares from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules.

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6. SHAREHOLDING STRUCTURE OF NWCL AND THE OFFERS

Share Offer

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Immediately upon the
completion of the Offers
(assuming that no NWCL
Options are exercised and
there is no other change in
As at the shareholding of
NWCL Shareholders the Latest Practicable Date NWCL)
Number of Number of
NWCL Shares % NWCL Shares %
Other Offeror Concert Parties
NWCL Shares held subject to the Share Offer
but not forming part of the Disinterested
NWCL Shares:
— High Earnings (Note 2) 93,073,738 1.07 — —
— Great Worth (Note 3) 22,508,064 0.26 — —
— HSBC (Note 4) 22 0.00 — —
— Dr. Cheng Kar-Shun, Henry (Note 5) 2,077,922 0.02 — —
— Mr. Cheng Kar-Shing, Peter (Note 6) 1,587,130 0.02 — —
— Dr. Cheng Chi-Kong, Adrian (Note 7) 935,066 0.01 — —
— Mr. Lee Luen-Wai, John (Note 8) 699,136 0.01 — —
— Mr. Doo Wai-Hoi, William (Note 9) 2,571,663 0.03 — —
— Mr. William Junior Guilherme Doo and
his spouse (Note 10) 517,500 0.01 — —
— Ms. Ki Man-Fung, Leonie (Note 11) 45,000 0.00 — —
124,015,241 1.43 — —
Aggregate number of NWCL Shares held
by the Offeror Concert Parties 5,845,992,885 67.19 5,721,977,644 65.76
Aggregate number of NWCL Shares held
by the Offeror and the Offeror Concert Parties 6,101,034,612 70.12 8,701,671,754 100.00
Independent NWCL Shareholders 2,600,637,142 29.88 — —
Total number of NWCL Shares in issue 8,701,671,754 100.00 8,701,671,754 100.00
Total number of Offer Shares (Note 12) 2,724,652,383 31.31 — —
Notes:
1. The Offeror is wholly owned by NWD, which is acting in concert with the Offeror in relation to NWCL.
NWCL Shares held by NWD will not form part of the Offer Shares and will not be acquired by the Offeror
under the Share Offer.
2. High Earnings is wholly owned by NWS. NWS is a non-wholly owned subsidiary of NWD. The shares of
NWS are listed on the Stock Exchange with the stock code 0659. High Earnings is acting in concert with the
Offeror in relation to NWCL.
3. Great Worth is a non-wholly owned subsidiary of NWD and is acting in concert with the Offeror in relation to
NWCL.
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LETTER FROM HSBC
4. HSBC is the financial adviser to NWD and the Offeror in respect of the Offers. Accordingly, HSBC and
relevant members of the HSBC group which hold NWCL Shares are presumed to be acting in concert with the
Offeror in relation to NWCL in accordance with class 5 of the definition of ‘‘acting in concert’’ under the
Takeovers Code (except in respect of NWCL Shares held by exempt principal traders or exempt fund
managers, in each case recognised by the Executive as such for the purpose of the Takeovers Code and also
excluding NWCL Shares held on behalf of non-discretionary investment clients of the HSBC group).
5. Dr. Cheng Kar-Shun, Henry, who is a director of the Offeror, an executive director of NWD and an executive
director of NWCL, is acting in concert with the Offeror in relation to NWCL.
6. Mr. Cheng Kar-Shing, Peter, who is a non-executive director of NWD and an executive director of NWCL, is
acting in concert with the Offeror in relation to NWCL.
7. Dr. Cheng Chi-Kong, Adrian, who is an executive director of NWD and an executive director of NWCL, is
acting in concert with the Offeror in relation to NWCL.
8. Mr. Lee Luen-Wai, John, who is an independent non-executive director of NWD and an independent non-
executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
9. Mr. Doo Wai-Hoi, William, who is a non-executive director of NWD, is acting in concert with the Offeror in
relation to NWCL.
10. Mr. William Junior Guilherme Doo, who is the son of Mr. Doo Wai-Hoi, William, a non-executive director of
NWD, and his spouse are acting in concert with the Offeror in relation to NWCL.
11. Ms. Ki Man-Fung, Leonie, who is an executive director of NWD, is acting in concert with the Offeror in
relation to NWCL.
12. The total number of NWCL Shares (assuming that no NWCL Options are exercised before the close of the
Offers and that there is no other change in the shareholding of NWCL before the completion of the Offers)
minus the aggregate number of NWCL Shares held by the Offeror and NWD equals the total number of Offer
Shares (on the same assumptions).
13. All percentages in the above table are approximations.
On the assumption that new NWCL Shares are allotted and issued pursuant to the exercise in
full of all NWCL Options before the close of the Offers and that there is no other change in the
shareholding of NWCL before the completion of the Offers, the table below sets out the
shareholding structure of NWCL before the completion of the Offers and immediately upon the
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completion of the Offers, assuming that the holders of at least 90% of the Offer Shares and at least 90% of the Disinterested NWCL Shares tender their acceptances of the Share Offer and the remaining Offer Shares (if any) are compulsorily acquired by the Offeror:

NWCL Shareholders	Before the completion of the Offers (assuming that new NWCL Shares are allotted and issued pursuant to the exercise in full of all NWCL Options before the close of the Offers and there is no other change in the shareholding of NWCL before the completion of the Offers)	Before the completion of the Offers (assuming that new NWCL Shares are allotted and issued pursuant to the exercise in full of all NWCL Options before the close of the Offers and there is no other change in the shareholding of NWCL before the completion of the Offers)	Immediately upon the completion of the Offers
Offeror Offeror Concert Parties NWCL Shares held not subject to the Share Offer: — NWD (Note 1) Other Offeror Concert Parties NWCL Shares held subject to the Share Offer but not forming part of the Disinterested NWCL Shares: — High Earnings (Note 2) — Great Worth (Note 3) — HSBC (Note 4) — Dr. Cheng Kar-Shun, Henry (Note 5) — Mr. Cheng Kar-Shing, Peter (Note 6) — Dr. Cheng Chi-Kong, Adrian (Note 7) — Mr. Lee Luen-Wai, John (Note 8) — Mr. Doo Wai-Hoi, William (Note 9) — Mr. William Junior Guilherme Doo and his spouse (Note 10) — Ms. Ki Man-Fung, Leonie (Note 11) Aggregate number of NWCL Shares held by the Offeror Concert Parties Aggregate number of NWCL Shares held by the Offeror and the Offeror Concert Parties Independent NWCL Shareholders Total number of NWCL Shares in issue Total number of Offer Shares (Note 12)	Number of NWCL Shares 255,041,727 5,721,977,644	% 2.92 65.56	Number of NWCL Shares % 3,005,238,771 34.44 5,721,977,644 65.56 8,727,216,415 100.00 — — — — — — — — — — — — — — — — — — — — — — 5,721,977,644 65.56 8,727,216,415 100.00 — — 8,727,216,415 100.00 — —
	5,977,019,371	68.48
	93,073,738 22,508,064 22 2,077,922 1,587,130 935,066 699,136 2,571,663 517,500 45,000	1.07 0.26 0.00 0.02 0.02 0.01 0.01 0.03 0.01 0.00
	124,015,241	1.43
	5,845,992,885	66.99
	6,101,034,612	69.91
	2,626,181,803	30.09
	8,727,216,415	100.00
	2,750,197,044	31.51

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LETTER FROM HSBC
Notes:
1. The Offeror is wholly owned by NWD, which is acting in concert with NWD in relation to NWCL. NWCL
Shares held by NWD will not form part of the Offer Shares and will not be acquired by the Offeror under the
Share Offer.
2. High Earnings is wholly owned by NWS. NWS is a non-wholly owned subsidiary of NWD. The shares of
NWS are listed on the Stock Exchange with the stock code 0659. High Earnings is acting in concert with the
Offeror in relation to NWCL.
3. Great Worth is a non-wholly owned subsidiary of NWD and is acting in concert with the Offeror in relation to
NWCL.
4. HSBC is the financial adviser to NWD and the Offeror in respect of the Offers. Accordingly, HSBC and
relevant members of the HSBC group which hold NWCL Shares are presumed to be acting in concert with the
Offeror in relation to NWCL in accordance with class 5 of the definition of ‘‘acting in concert’’ under the
Takeovers Code (except in respect of NWCL Shares held by exempt principal traders or exempt fund
managers, in each case recognised by the Executive as such for the purpose of the Takeovers Code and also
excluding NWCL Shares held on behalf of non-discretionary investment clients of the HSBC group).
5. Dr. Cheng Kar-Shun, Henry, who is a director of the Offeror, an executive director of NWD and an executive
director of NWCL, is acting in concert with the Offeror in relation to NWCL.
6. Mr. Cheng Kar-Shing, Peter, who is a non-executive director of NWD and an executive director of NWCL, is
acting in concert with the Offeror in relation to NWCL.
7. Dr. Cheng Chi-Kong, Adrian, who is an executive director of NWD and an executive director of NWCL, is
acting in concert with the Offeror in relation to NWCL.
8. Mr. Lee Luen-Wai, John, who is an independent non-executive director of NWD and an independent non-
executive director of NWCL, is acting in concert with the Offeror in relation to NWCL.
9. Mr. Doo Wai-Hoi, William, who is a non-executive director of NWD, is acting in concert with the Offeror in
relation to NWCL.
10. Mr. William Junior Guilherme Doo, who is the son of Mr. Doo Wai-Hoi, William, a non-executive director of
NWD, and his spouse are acting in concert with the Offeror in relation to NWCL.
11. Ms. Ki Man-Fung, Leonie, who is an executive director of NWD, is acting in concert with the Offeror in
relation to NWCL.
12. The total number of NWCL Shares (assuming that new NWCL Shares are allotted and issued pursuant to the
exercise in full of all NWCL Options before the close of the Offers and that there is no other change in the
shareholding of NWCL before the completion of the Offers) minus the aggregate number of NWCL Shares
held by the Offeror and NWD equals the total number of Offer Shares (on the same assumptions).
13. All percentages in the above table are approximations.
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The relevant exercise price applicable to each NWCL Option, which is set out in the tables below, ranges from HK$2.45 to HK$5.42.

NWCL Options under the share option scheme of NWCL adopted on 26 November 2002

NWCL Option exercise price Option Offer Price Total outstanding NWCL Options (HK$) (HK$) (vested and unvested) 3.036 4.764 311,688 2.705 5.095 225,400

NWCL Options under the share option scheme of NWCL adopted on 22 November 2011

NWCL Option exercise price Option Offer Price

price Option Offer Price
(HK$) (HK$) 2.45 5.35 3.37 4.43 3.88 3.92 3.35 4.45 2.762 5.038 4.01 3.79 3.97 3.83 4.72 3.08 4.42 3.38 4.968 2.832 5.42 2.38 4.504 3.296	1,866,760 121,500 2,301,920 1,501,990 644,000 859,100 2,720,223 686,000 481,200 9,958,480 832,000 3,034,400
	25,544,661

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As any exercise of the NWCL Options without accepting the corresponding Share Offer (in respect of the relevant NWCL Shares allotted to the NWCL Optionholders) after the Share Offer has been declared unconditional as to acceptances may result in the Offeror receiving less than the required percentage of acceptance (as stated in Condition (ii)) for it to exercise the rights of compulsory acquisition and thus affecting the ability of the Offeror to privatise NWCL, NWD, the Offeror and NWCL have jointly requested each of the NWCL Optionholders to sign and return a deed of undertaking (the ‘‘Deed of Undertaking’’) pursuant to which such NWCL Optionholder undertakes not to exercise any of the NWCL Options (whether vested or unvested) held by him/her from the date on which the Offeror has received valid acceptances of the Share Offer in respect of such number of NWCL Shares which would result in the Offeror holding at least 90% of the Offer Shares with the proviso that, within that holding, the Offeror would hold at least 90% of the Disinterested NWCL Shares, until such time as the Share Offer shall have lapsed. As at the Latest Practicable Date, 99 NWCL Optionholders holding a total of 6,206,781 vested NWCL Options and 16,140,360 unvested NWCL Options had executed the Deed of Undertaking. The execution of the Deed of Undertaking shall not affect or prejudice the NWCL Optionholder’s rights to accept the Option Offer in respect of the outstanding NWCL Options held by him/her in accordance with the terms of the Option Offer set out in the Composite Document and the Form of Option Offer Acceptance.

Interests of the Offeror and the Offeror Concert Parties in NWCL Shares and NWCL Options

7. OVERSEAS NWCL OFFER SHAREHOLDERS AND NWCL OPTIONHOLDERS

As at the Latest Practicable Date, based on the record in NWCL’s register of members and NWCL’s internal record, outside of Hong Kong, NWCL had one overseas NWCL Offer Shareholder in Australia and one overseas NWCL Optionholder in the US. NWCL had been advised by the local counsels in these jurisdictions that the Composite Document and the accompanying Form(s) of Acceptance may be forwarded to such overseas NWCL Shareholder and overseas NWCL Optionholder and will do so accordingly. The making of (i) the Share Offer to the overseas NWCL Offer Shareholders; and (ii) the Option Offer to the overseas NWCL Optionholders, who are

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citizens, residents or nationals of jurisdictions outside Hong Kong, may be subject to the laws of the relevant jurisdictions. Such overseas NWCL Offer Shareholders and overseas NWCL Optionholders should inform themselves about and observe all applicable legal, tax or regulatory requirements. It is the responsibility of any overseas NWCL Offer Shareholders and overseas NWCL Optionholders wishing to take any action in relation to the Share Offer and the Option Offer, respectively, to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection therewith, including obtaining all governmental, exchange control or other consents which may be required and the compliance with all necessary formalities and regulatory or legal requirements and the payment of any issue, transfer or other taxes payable by such overseas NWCL Offer Shareholders or overseas NWCL Optionholders in respect of the acceptance of the Offer (as applicable) in such jurisdiction. Any acceptance by such overseas NWCL Offer Shareholders or overseas NWCL Optionholders will be deemed to constitute a representation and warranty from such persons to NWCL, NWD, the Offeror, and their respective advisers, including HSBC, the financial adviser to NWD and the Offeror in respect of the Offers, that those relevant laws and regulatory requirements in those jurisdictions have been complied with. The overseas NWCL Offer Shareholders and the overseas NWCL Optionholders are recommended to consult their own professional advisers if they are in any doubt as to their respective positions.

8. TAXATION AND INDEPENDENT ADVICE

As stated in the Joint Announcement, the NWCL Offer Shareholders and the NWCL Optionholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting the Share Offer or the Option Offer. It is emphasised that none of the Offeror, NWD, NWCL or HSBC, nor any of their respective directors, officers or associates or any other person involved in the Share Offer or the Option Offer accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Share Offer or the Option Offer.

9. FURTHER TERMS OF THE OFFERS

Acceptance of the Share Offer

Acceptance of the Share Offer by any person will constitute a representation and warranty by such person or persons to NWD, the Offeror, NWCL and HSBC that the Offer Shares sold by such person or persons to the Offeror are free from all rights of pre-emption, options, liens, claims, equities, charges, encumbrances and any other third party rights of any nature and together with all rights attached to them as at the Closing Date or subsequently becoming attached to them, including the right to receive in full all dividends and other distributions, if any, declared, made or paid on or after the Closing Date.

Acceptance of the Option Offer

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Hong Kong stamp duty

No stamp duty is payable in connection with the acceptance of the Option Offer and the cancellation of the NWCL Options.

Close of the Offers

Further terms of the Offers, including, among others, the procedures for acceptance and settlement, the acceptance period and taxation matters are set out in ‘‘Appendix I — Further Terms of the Offers’’ to the Composite Document and the accompanying Form(s) of Acceptance.

A letter containing the details of the Option Offer has been despatched to the NWCL Optionholders on 27 February 2016.

10. INTENTIONS OF NWD REGARDING THE NWCL GROUP

NWD intends to continue with the existing business of the NWCL Group upon the completion of the Offers and, subject to market conditions, may explore various opportunities to further develop the existing business of the NWCL Group. NWD may also from time to time consider the need to fund such further development by debt and/or equity financing by NWCL, subject to the NWCL Group’s business needs and prevailing market conditions. NWD does not currently intend to introduce major changes to the business of NWCL (including any redeployment of the fixed assets

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of NWCL) save for those changes which NWD may from time to time implement following the review of its strategic options relating to the business, structure and/or direction of the NWCL Group. It is also the current intention of NWD that the employment of the existing employees of the NWCL Group and the directorship of the existing directors of the NWCL Group should be continued following completion of the Offers except for changes which may occur in the ordinary course of business.

11. REASONS FOR, AND BENEFITS OF, THE OFFERS

The NWD Board and the Offeror Board believe that the Offers provide the following benefits to (i) the Independent NWCL Shareholders, (ii) NWCL and (iii) NWD and the NWD Shareholders.

For the Independent NWCL Shareholders

(a) Share Offer Price represents an attractive exit premium

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(b) An opportunity for Independent NWCL Shareholders to monetise NWCL Shares

NWCL is an integral part of the NWD Group and NWD has maintained majority voting control in NWCL since NWCL’s initial public offering in 1999. It is highly unlikely that another third party will seek to acquire the Offer Shares at a price comparable to or better than the Share Offer.

For NWCL

NWCL will require substantial funding for its future developments. Without being subject to the requirements relevant to being run as a standalone listed public company, NWCL will be able to fund larger property development projects through leveraging NWD’s greater financial strength, including the latter’s access to more competitive financing terms for raising bank borrowings. Additionally, upon becoming an unlisted wholly owned subsidiary of NWD, the provision of intra-group funding from NWD to NWCL will be facilitated. Due to the low liquidity of the NWCL Shares and the discount to the net asset value per NWCL Share of its trading price on the Stock Exchange, the public equity capital market does not provide NWCL a viable funding alternative.

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LETTER FROM HSBC

For NWD and the NWD Shareholders

(a) Reinforcing the strategic positioning of the PRC property business within the NWD Group by removing the non-compete undertaking with NWCL
The privatisation of NWCL will allow NWD to invest directly into the PRC property
business.

The PRC property market is a core geographical focus of the NWD Group but one in which NWD itself can currently only invest in indirectly via NWCL as NWD gave a noncompete undertaking to NWCL at the time of NWCL’s spin-off listing on the Stock Exchange in 1999. Pursuant to the undertaking, NWCL’s business is separate and distinct from NWD’s business such that NWD focuses on the Hong Kong property market while NWCL focuses on the PRC property market. The undertaking provides that NWD shall not compete with the PRC property development and investment activities of NWCL, nor shall NWD acquire or hold any land or real estate properties in the PRC, except for certain circumstances carved out in the undertaking. The privatisation of NWCL will remove the above undertaking and allow NWD to invest directly.

Having NWCL as a wholly owned subsidiary would provide NWD with the ability to formulate more holistic investment strategies for the NWD Group as a whole and allow NWD to deploy its resources directly across Hong Kong and the PRC in suitable opportunities and in a more flexible manner. This would facilitate NWD to accelerate the development of the NWD Group’s land bank in the PRC. It would also better position the NWD Group to take on large-scale development projects in the PRC which typically require substantial funding. With a larger balance sheet, and its expertise in property and other sectors, NWD can be beneficial in securing new investments for the NWD Group in the PRC property market, including by way of land acquisitions and collaboration with business partners in the PRC.

(b) More advantageous financing and coordinated internal treasury management

Given the larger asset size and equity base of NWD compared to NWCL, NWD expects it can secure financing on more favourable terms than NWCL. If NWCL becomes a wholly owned unlisted subsidiary of NWD, this will provide enhanced flexibility for the central management of the NWD Group’s treasury functions and thereby the ability to secure the lowest possible funding costs across the NWD Group’s property businesses including those in the PRC.

A streamlined management structure for the NWD Group’s property businesses in Hong Kong and the PRC can be achieved after privatising NWCL, which will help enhance corporate efficiency and create synergies. Better functional coordination and the sharing of expertise can be facilitated internally, including design and architecture, sales and marketing, as well as property leasing and management. This has become of greater value than was

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historically the case as the PRC property market has matured, and will help accelerate the replication between the PRC and Hong Kong markets of successful concepts such as the K11 art mall and further strengthen the ‘‘New World’’ brand image in the two core markets.

12. INFORMATION ON NWCL

NWCL is a company incorporated in the Cayman Islands with limited liability, the shares of which have been listed on the Main Board of the Stock Exchange since July 1999 with the stock code 0917.

NWCL is the flagship property arm of NWD in the PRC and is one of the large-scale national developers in the PRC with unaudited consolidated total assets of approximately HK$140,773.3 million as at 31 December 2015 and audited consolidated total assets of approximately HK$134,427.5 million as at 30 June 2015. The unaudited consolidated net profit before taxation from continuing operations and net profit after taxation of NWCL for the six months ended 31 December 2015 were approximately HK$545.6 million and HK$437.6 million (including gain on disposal of discontinued operation of approximately HK$768.9 million and loss for the period from discontinued operation of approximately HK$19.6 million), respectively. The audited consolidated net profit before taxation from continuing operations and net profit after taxation of NWCL for the year ended 30 June 2015 were approximately HK$6,422.4 million and approximately HK$3,470.0 million (including loss for the year from discontinued operation of approximately HK$34.0 million), respectively and the audited consolidated net profit before taxation from continuing operations and net profit after taxation of NWCL for the year ended 30 June 2014 were approximately HK$9,107.1 million and approximately HK$4,799.3 million (including loss for the year from discontinued operation of approximately HK$140.7 million), respectively. As at the Latest Practicable Date, assuming all the Disposals had been completed, the NWCL Group’s development portfolio comprised 23 major projects spanning over 13 large cities or major transportation hubs and NWCL had landbank of approximately 11.1 million square meters gross floor area which was sufficient for five years of development.

After the completion of the Disposals, the NWCL Group will receive net proceeds from these disposals amounting to approximately HK$24.9 billion. These Disposals signify that the NWCL Group’s strategy of optimising its property development and investment portfolio in the PRC has been firmly realised. The strategy calls for focusing resources in first and 1.5-tier cities and highgrowth cities, while reducing investment in some projects with prolonged development cycle. The

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move matches with the NWCL Group’s ongoing development strategy in choosing high-end highquality projects with better gross profit margin, increasing assets churn, and developing more midsized property projects in the PRC. The net proceeds from the Disposals will provide NWCL with ample cash reserves for potential investments in the near future, while improving the overall operating cash flow.

13. INFORMATION ON THE OFFEROR AND NWD

The Offeror is a wholly owned subsidiary of NWD. NWD is the parent company of NWCL and a company incorporated in Hong Kong with limited liability, the shares of which have been listed on the Main Board of the Stock Exchange since 1972 with the stock code 0017. It is a constituent stock of the Hong Kong Hang Seng Index with a total unaudited consolidated net asset value attributable to NWD Shareholders of approximately HK$178,190.9 million as at 31 December 2015 and a total audited consolidated net asset value attributable to NWD Shareholders of approximately HK$178,918.6 million as at 30 June 2015.

The NWD Group is a leading property development company based in Hong Kong. NWD was founded in 1970 and for more than four decades the NWD Group has expanded its business portfolio from a single focus on the property business to five core areas, comprising property, infrastructure, services, hotel and department store in Hong Kong and the PRC.

The NWD Group is also involved in direct investment and an array of other businesses.

14. GENERAL

To ensure equality of treatment of all NWCL Offer Shareholders, those NWCL Offer Shareholders who hold the Offer Shares as nominees for more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. In order for the beneficial owners of the Offer Shares whose investments are registered in nominee names to accept the Share Offer, it is essential that they provide instructions of their intentions with regard to the Offers to their nominees.

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LETTER FROM HSBC All documents and cheques for payment to the NWCL Offer Shareholders will be sent to them by ordinary post at their own risk to their addresses as they appear in the register of members of NWCL or, in the case of joint NWCL Offer Shareholders, to the NWCL Offer Shareholder whose name appears first in the register of members of NWCL, as applicable. All documents to the NWCL Optionholders and cheques for payment in respect of the NWCL Options surrendered for cancellation will be delivered to the office of NWCL in Hong Kong at 9/F., New World Tower 1, 18 Queen’s Road Central, Hong Kong for collection by the NWCL Optionholders. None of the Offeror, NWD, NWCL, HSBC nor any of their respective directors or any other person involved in the Offers will be responsible for any loss or delay in transmission or any other liabilities that may arise as a result thereof. 15. ADDITIONAL INFORMATION

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Your attention is drawn to the ‘‘Letter from the NWCL Board’’, the ‘‘Letter from the NWCL
Independent Board Committee, the ‘‘Letter from NWCL Independent Financial Adviser’’, the
accompanying Form(s) of Acceptance and the additional information set out in the appendices
which form part of the Composite Document.
Yours faithfully,
For and on behalf of
The Hongkong and Shanghai Banking Corporation Limited
Che Ning Liu
Co-head of Banking, Asia-Pacific
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LETTER FROM THE NWCL BOARD
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 0917)
Executive directors: Registered office:
Dr. Cheng Kar-Shun, Henry GBS P.O. Box 309
(Chairman and Managing Director) Ugland House
Mr. Cheng Kar-Shing, Peter Grand Cayman KY1-1104
Dr. Cheng Chi-Kong, Adrian Cayman Islands
Ms. Cheng Chi-Man, Sonia
Mr. Cheng Chi-Him, Conrad Head Office and principal place of
Mr. Fong Shing-Kwong, Michael business in Hong Kong:
Ms. Ngan Man-Ying, Lynda 9/F., New World Tower 1
18 Queen’s Road Central
Independent non-executive directors: Hong Kong
Dr. Cheng Wai-Chee, Christopher GBS OBE JP
Hon. Tien Pei-Chun, James GBS JP
Mr. Lee Luen-Wai, John BBS JP
Mr. Ip Yuk-Keung, Albert
27 February 2016
To the NWCL Offer Shareholders and the NWCL Optionholders
Dear Sir or Madam,
VOLUNTARY CONDITIONAL CASH OFFERS
BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
ON BEHALF OF THE OFFEROR,
A WHOLLY OWNED SUBSIDIARY OF
NEW WORLD DEVELOPMENT COMPANY LIMITED,
TO ACQUIRE ALL THE ISSUED SHARES OF NEW WORLD CHINA LAND LIMITED
(OTHER THAN THOSE ALREADY HELD BY THE OFFEROR AND
NEW WORLD DEVELOPMENT COMPANY LIMITED)
AND TO CANCEL ALL THE OUTSTANDING OPTIONS OF
NEW WORLD CHINA LAND LIMITED
1. INTRODUCTION
Reference is made to the Joint Announcement whereby the Offeror Board, the NWD Board
and the NWCL Board jointly announced on 6 January 2016 that HSBC, on behalf of the Offeror, a
wholly owned subsidiary of NWD, intended to make a voluntary conditional cash offer to acquire
all of the Offer Shares and pursuant to Rule 13 of the Takeovers Code, extend an appropriate offer
to cancel all the outstanding NWCL Options.
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LETTER FROM THE NWCL BOARD

The purpose of the Composite Document (of which this letter forms part) is to provide you with, among other things: (i) information relating to the NWCL Group, NWD, the Offeror and the Offers; (ii) a letter from HSBC containing, among other things, details of the Offers; (iii) a letter from the NWCL Independent Board Committee containing its recommendations to the Independent NWCL Shareholders and the NWCL Optionholders in relation to the Offers; and (iv) a letter from the NWCL Independent Financial Adviser containing its advice and recommendations to the NWCL Independent Board Committee in relation to the Offers.

2. NWCL INDEPENDENT BOARD COMMITTEE AND NWCL INDEPENDENT FINANCIAL ADVISER

The NWCL Board has established the NWCL Independent Board Committee, comprising three independent non-executive directors of NWCL, being Dr. Cheng Wai-Chee, Christopher, Hon. Tien Pei-Chun, James and Mr. Ip Yuk-Keung, Albert, to make a recommendation to the Independent NWCL Shareholders and the NWCL Optionholders as to whether the Offers are, or are not, fair and reasonable and as to acceptances of the Offers.

The remaining independent non-executive director of NWCL, namely, Mr. Lee Luen-Wai, John, is also an independent non-executive director of NWD. In order to avoid any perceived conflict of interests, Mr. Lee Luen-Wai, John does not form part of the NWCL Independent Board Committee.

Pursuant to Rule 2.8 of the Takeovers Code, members of the NWCL Independent Board Committee are all independent non-executive directors who have no direct or indirect interest in the Offers other than as NWCL Offer Shareholders.

Somerley, with the approval of the NWCL Independent Board Committee, has been appointed as the NWCL Independent Financial Adviser to advise the NWCL Independent Board Committee in connection with the Offers.

3. THE OFFERS

As disclosed in the ‘‘Letter from HSBC’’ in the Composite Document, HSBC, on behalf of the Offeror, is making the Offers on the following basis:

Share Offer:

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$7.80 in cash

The Share Offer Price will not be increased and the Offeror does not reserve the right to do so.

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Option Offer:

For cancellation of each NWCL Option . . . . . . . . . . the Option Offer Price in cash

The relevant exercise price applicable to each NWCL Option ranges from HK$2.45 to HK$5.42 and accordingly, the Option Offer Price ranges from HK$2.38 to HK$5.35 per NWCL Option.

The Option Offer Price will not be increased and the Offeror does not reserve the right to do so.

Further details of the Offers can be found in the ‘‘Letter from HSBC’’ and ‘‘Appendix I — Further Terms of the Offers’’ to the Composite Document and the accompanying Form(s) of Acceptance, which together set out the terms and conditions of the Offers and certain related information.

VALUE OF THE OFFERS

Your attention is drawn to the section headed ‘‘Value of the Offers’’ in the ‘‘Letter from HSBC’’ in the Composite Document which sets out the value of the Offers.

CONDITIONS OF THE OFFERS

Your attention is drawn to the section headed ‘‘Conditions of the Offers’’ in the ‘‘Letter from HSBC’’ in the Composite Document which sets out the Conditions of the Offers.

REASONS FOR, AND BENEFITS OF, THE OFFERS

Your attention is drawn to the section headed ‘‘Reasons for, and Benefits of, the Offers’’ in the ‘‘Letter from HSBC’’ in the Composite Document which sets out the reasons for, and benefits of the Offers to the Independent NWCL Shareholders, NWCL, NWD and the NWD Shareholders.

INTENTIONS OF NWD REGARDING THE NWCL GROUP

Your attention is drawn to the section headed ‘‘Intentions of NWD regarding the NWCL Group’’ in the ‘‘Letter from HSBC’’ in the Composite Document which sets out the intentions of NWD regarding the NWCL Group.

INFORMATION ON THE OFFEROR AND NWD
Your attention is drawn to the sections headed ‘‘Information on the Offeror and NWD’’ in the
‘‘Letter from HSBC’’ in the Composite Document for information on the Offeror and NWD.

9. INFORMATION ON NWCL

Your attention is drawn to the section headed ‘‘Information on NWCL’’ in the ‘‘Letter from HSBC’’in the Composite Document for information on NWCL.

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LETTER FROM THE NWCL BOARD

Your attention is also drawn to the financial information of the NWCL Group set out in ‘‘Appendix II — Financial Information of the NWCL Group’’, the summary of property valuations of the NWCL Group set out in ‘‘Appendix III — Summary of Property Valuation of the NWCL Group’’ and general information of NWCL set out in ‘‘Appendix V — General Information of NWCL’’ to the Composite Document.

10. POSSIBLE COMPULSORY ACQUISITION AND WITHDRAWAL OF LISTING

The NWCL Board notes that, subject to compliance with the relevant requirements under section 88 of the Cayman Islands Companies Law, if the Offeror, within four (4) months of the posting of the Composite Document, has received valid acceptances in respect of not less than 90% of the Offer Shares and not less than 90% of the Disinterested NWCL Shares, the Offeror intends to privatise NWCL by exercising its rights to compulsorily acquire those Offer Shares not acquired by the Offeror under the Share Offer. If the Offeror does decide to exercise such rights and completes the compulsory acquisition, NWCL will become an indirect wholly owned subsidiary of NWD and an application will be made for the withdrawal of the listing of the NWCL Shares from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules.

Pursuant to Rule 15.6 of the Takeovers Code, as the Offeror has stated in the Composite Document its intention to avail itself of its powers of compulsory acquisition, the Offers may not remain open for acceptance for more than four months from the date of the Composite Document, unless the Offeror has, by that time, become entitled to exercise such powers of compulsory acquisition, in which event it must do so without delay.

11. ADDITIONAL INFORMATION

You are advised to read the ‘‘Letter from HSBC’’, ‘‘Appendix I — Further Terms of the Offers’’ to the Composite Document and the accompanying Form(s) of Acceptance for information relating to the Offers, the acceptance and settlement procedures of the Offers, the making of the

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Offers to the overseas NWCL Offer Shareholders and the overseas NWCL Optionholders and taxation. Your attention is also drawn to the additional information contained in the appendices to the Composite Document.

12. RECOMMENDATIONS

The executive directors of NWCL believe that the terms of the Offers are fair and reasonable and in the interests of the NWCL Offer Shareholders and the NWCL Optionholders as a whole.

The NWCL Independent Financial Adviser has advised the NWCL Independent Board Committee that it considers the terms of the Offers to be fair and reasonable so far as the Independent NWCL Shareholders and the NWCL Optionholders are concerned, and accordingly, it recommends the NWCL Independent Board Committee to recommend the Independent NWCL Shareholders and the NWCL Optionholders to accept the Offers, as applicable.

The NWCL Independent Board Committee, having been so advised, considers the terms of the Offers to be fair and reasonable so far as the Independent NWCL Shareholders and the NWCL Optionholders are concerned, and accordingly, recommends the Independent NWCL Shareholders and the NWCL Optionholders to accept the Offers, as applicable.

The full text of the letter from the NWCL Independent Board Committee addressed to the Independent NWCL Shareholders and the NWCL Optionholders is set out on pages 40 and 41 of the Composite Document. The full text of the letter from the NWCL Independent Financial Adviser addressed to the NWCL Independent Board Committee is set out on pages 42 to 78 of the Composite Document. You are advised to read both letters and the other information contained in the Composite Document carefully before taking any action in respect of the Offers.

The NWCL Offer Shareholders and the NWCL Optionholders are recommended to consult their own professional advisers as to the tax implications that may arise from accepting the Offers.

By order of the Board of New World China Land Limited Dr. Cheng Kar-Shun, Henry Chairman and Managing Director

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LETTER FROM THE NWCL INDEPENDENT BOARD COMMITTEE (Incorporated in the Cayman Islands with limited liability) (Stock Code: 0917) 27 February 2016 To the Independent NWCL Shareholders and the NWCL Optionholders Dear Sir or Madam, VOLUNTARY CONDITIONAL CASH OFFERS BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED ON BEHALF OF THE OFFEROR, A WHOLLY OWNED SUBSIDIARY OF NEW WORLD DEVELOPMENT COMPANY LIMITED, TO ACQUIRE ALL THE ISSUED SHARES OF NEW WORLD CHINA LAND LIMITED (OTHER THAN THOSE ALREADY HELD BY THE OFFEROR AND NEW WORLD DEVELOPMENT COMPANY LIMITED) AND TO CANCEL ALL THE OUTSTANDING OPTIONS OF NEW WORLD CHINA LAND LIMITED INTRODUCTION We refer to the Composite Document dated 27 February 2016 issued jointly by NWD, the Offeror and NWCL of which this letter forms part. Unless the context requires otherwise, terms used in this letter shall have the same meaning as those defined in the Composite Document. We have been appointed by the NWCL Board to form the NWCL Independent Board Committee to make recommendations to you as to whether, in our opinion, the terms of the Offers are fair and reasonable so far as the Independent NWCL Shareholders and the NWCL Optionholders are concerned and as to acceptances of the Offers. We, being the members of the NWCL Independent Board Committee, have declared that we are independent and do not have any conflict of interest in respect of the Offers and are therefore able to consider the terms of the Offers and to make recommendations to the Independent NWCL Shareholders and the NWCL Optionholders. Mr. Lee Luen-Wai, John, an independent nonexecutive director of NWCL, is also an independent non-executive director of NWD. In order to avoid any perceived conflict of interests, Mr. Lee Luen-Wai, John is not part of the NWCL Independent Board Committee.

Somerley has been appointed, with our approval, as the NWCL Independent Financial Adviser to advise and make recommendations to us as to the terms and conditions of the Offers and as to acceptances of the Offers. The details of its advice and recommendations and the principal factors taken into consideration in arriving at its recommendations are set out in the ‘‘Letter from the NWCL Independent Financial Adviser’’ set out in the Composite Document. – 40 –

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LETTER FROM THE NWCL INDEPENDENT BOARD COMMITTEE

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We also wish to draw your attention to the ‘‘Letter from HSBC’’, the ‘‘Letter from the NWCL
Board’’ and the additional information set out in the Composite Document, including the
appendices to the Composite Document and the accompanying Form(s) of Acceptance.
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RECOMMENDATIONS

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Having taken into account the advice and recommendations of the NWCL Independent
Financial Adviser, in particular the factors, reasons and recommendations as set out in the ‘‘Letter
from the NWCL Independent Financial Adviser’’, we concur with the view of the NWCL
Independent Financial Adviser and consider that:
(a) the terms of the Share Offer are fair and reasonable so far as the Independent NWCL
Shareholders are concerned, and recommend the Independent NWCL Shareholders to
accept the Share Offer; and
(b) the terms of the Option Offer are fair and reasonable so far as the NWCL Optionholders
are concerned, and recommend the NWCL Optionholders to accept the Option Offer.
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Notwithstanding our recommendations, the Independent NWCL Shareholders and the NWCL
Optionholders are strongly advised that their decision to realise or to hold their investment in
NWCL depends on their own individual circumstances and investment objectives. If in any doubt,
the Independent NWCL Shareholders and the NWCL Optionholders should consult their own
professional advisers for professional advice.
Yours faithfully,
The Independent Board Committee
New World China Land Limited
Dr. Cheng Wai-Chee, Hon. Tien Pei-Chun, Mr. Ip Yuk-Keung,
Christopher James Albert
Independent Non-executive Directors
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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

The following is the letter of advice from the independent financial adviser, Somerley Capital Limited, to the NWCL Independent Board Committee, which has been prepared for the purpose of inclusion in this document.

SOMERLEY CAPITAL LIMITED

20th Floor

China Building 29 Queen’s Road Central Hong Kong

27 February 2016

To: the NWCL Independent Board Committee

Dear Sirs,

VOLUNTARY CONDITIONAL CASH OFFERS

BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED ON BEHALF OF THE OFFEROR, A WHOLLY OWNED SUBSIDIARY OF NEW WORLD DEVELOPMENT COMPANY LIMITED, TO ACQUIRE ALL THE ISSUED SHARES OF NEW WORLD CHINA LAND LIMITED

(OTHER THAN THOSE ALREADY HELD BY THE OFFEROR AND NEW WORLD DEVELOPMENT COMPANY LIMITED) AND TO CANCEL ALL THE OUTSTANDING OPTIONS OF NEW WORLD CHINA LAND LIMITED

INTRODUCTION

We refer to our appointment as independent financial adviser to advise the NWCL Independent Board Committee in connection with the voluntary conditional cash offers by HSBC on behalf of the Offeror, a wholly owned subsidiary of NWD, to acquire all the issued shares of NWCL (other than those already held by the Offeror and NWD) and to cancel all the outstanding options of NWCL. Details of the Offers are contained in the letter from HSBC in the Composite Document dated 27 February 2016, of which this letter forms part. Terms defined in the Composite Document shall have the same meanings in this letter unless the context otherwise requires.

The NWCL Board has established the NWCL Independent Board Committee, comprising three independent non-executive directors of NWCL, being Dr. Cheng Wai-Chee, Christopher, Hon. Tien Pei-Chun, James and Mr. Ip Yuk-Keung, Albert, to advise the Independent NWCL Shareholders and the NWCL Optionholders in respect of the Offers. The remaining independent non-executive director of NWCL, namely, Mr. Lee Luen-Wai, John, does not form part of the NWCL Independent Board Committee, in order to avoid any perceived conflict of interest, as he is also an independent

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non-executive director of NWD. With the approval of the NWCL Independent Board Committee, we have been appointed as independent financial adviser to advise the NWCL Independent Board Committee in connection with the Offers.

During the past two years, Somerley has acted as an independent financial adviser to NWCL and its associated companies on two occasions, namely (i) to NWCL (see scheme document dated 17 May 2014) and (ii) to Greenheart Group Limited (see composite document dated 14 May 2015), a company controlled by Chow Tai Fook Enterprises Limited, which is the controlling shareholder of NWD. The past engagements were limited to providing independent advisory services to the relevant entities pursuant to the Listing Rules or the Takeovers Code, for which Somerley received normal professional fees. Accordingly, we do not consider the past engagements give rise to any conflict of interest for Somerley in acting as the NWCL Independent Financial Adviser in this case.

Somerley is not associated with NWCL, the Offeror or their respective substantial shareholders or any party acting, or presumed to be acting, in concert with any of them and, accordingly, is considered eligible to give independent advice on the Offers. Apart from normal professional fees payable to us in connection with this appointment, and except as disclosed above, no arrangement exists whereby we will receive any fees or benefits from NWCL or the Offeror or their respective substantial shareholders or any party acting, or presumed to be acting, in concert with any of them.

In formulating our advice and recommendation, we have relied on the information and facts supplied, and the opinions expressed, by the executive NWCL Directors and management of NWCL, which we have assumed to be true, accurate and complete. We have reviewed published information on NWCL, including its audited financial statements for the years ended 30 June 2014 and 2015, and the unaudited financial statements for the six-month period ended 31 December 2015. We have discussed with Knight Frank, the independent property valuer appointed by NWCL, the bases and assumptions for their valuation as at 31 December 2015 of NWCL’s property interests, including property interests held under or held through joint ventures of the NWCL Group, which are contained in Appendix III to the Composite Document, and have performed site visits to over 70% of the property interests by market value attributable to the NWCL Group as at 31 December 2015. We have also reviewed the trading performance of NWCL Shares on the Stock Exchange. We have sought and received confirmation from the directors of NWCL that no material facts have been omitted from the information supplied and opinions expressed by them. We consider that the information which we have received is sufficient for us to reach our opinion and advice as set out in this letter and to justify our reliance on such information. We have no reason to doubt the truth and accuracy of the information provided to us or to believe that any material facts have been omitted or withheld. We have, however, not conducted any independent investigation into the business and affairs of the NWCL Group or the NWD Group, or their respective associated companies or joint ventures. We have also assumed that all representations contained or referred to in the Composite Document were true at the time they were made and at the date of the Composite Document and will continue to be true until the end of the Offer Period. NWCL Shareholders will be informed as soon as reasonably practicable if we become aware of any material change to the above.

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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

We have not considered the tax and regulatory implications on NWCL Shareholders and NWCL Optionholders of acceptance or non-acceptance of the Offers since these depend on their individual circumstances. In particular, NWCL Shareholders and NWCL Optionholders who are resident overseas or subject to overseas taxes or Hong Kong taxation on securities dealings should consider their own tax position and, if in any doubt, consult their own professional advisers.

PRINCIPAL TERMS OF THE OFFERS

Share Offer:

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$7.80 in cash

The Share Offer is being extended to all eligible NWCL Shareholders (including certain Offeror Concert Parties), except the Offeror and NWD. As at the Latest Practicable Date, there were 8,701,671,754 NWCL Shares in issue, of which 5,977,019,371 NWCL Shares were held by the Offeror and NWD.

As stated in the letter from HSBC in the Composite Document, acceptance of the Share Offer by any person will constitute a representation and warranty by such person or persons to the Offeror that the Offer Shares sold by such person or persons to the Offeror are free from all rights of pre-emption, options, liens, claims, equities, charges, encumbrances and any other third party rights of any nature and together with all rights attached to them as at the Closing Date or subsequently becoming attached to them, including the right to receive in full all dividends and other distributions, if any, declared, made or paid on or after the Closing Date. No interim dividend has been declared or paid for the six-month period ended 31 December 2015.

Independent Shareholders should note that as stated in the letter from HSBC in the Composite Document, the Share Offer Price will not be increased and the Offeror does not reserve the right to do so.

Option Offer:

For cancellation of each NWCL Option . . . . . . . . . . . . . . the Option Offer Price in cash

As at the Latest Practicable Date, there were 25,544,661 outstanding NWCL Options granted under the NWCL Share Option Schemes (including 18,240,200 NWCL Options which had not vested as at the Latest Practicable Date), each giving the NWCL Optionholder the right to subscribe for one new NWCL Share. The relevant exercise price applicable to each NWCL Option ranges from HK$2.45 to HK$5.42 and accordingly, on the ‘‘see-through’’ principle, the Option Offer Price ranges from HK$2.38 to HK$5.35 per NWCL Option. For further details, please see the section headed ‘‘The Option Offer’’. The Option Offer is being extended to all NWCL Optionholders in accordance with the Takeovers Code.

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As stated in the letter from HSBC in the Composite Document, acceptance of the Option Offer by an NWCL Optionholder will, subject to the Offers becoming or being declared unconditional in all respects, result in the cancellation of those relevant NWCL Options, together with all rights attaching thereto.

NWCL Optionholders should note that as stated in the letter from HSBC in the Composite Document, the Option Offer Price will not be increased and the Offeror does not reserve the right to do so.

Conditions of the Offers

The Share Offer is subject to the following Conditions:

(i) the NWD shareholders having passed an ordinary resolution at the EGM to approve the Offers;
(ii) valid acceptances of the Share Offer having been received (and not, where permitted, withdrawn) by 4:00 p.m. on the Closing Date (or such later time or date as the Offeror may, subject to the rules of the Takeovers Code, decide) in respect of such number of NWCL Shares which would result in the Offeror holding at least 90% of the Offer Shares with the further proviso that, within that holding, the Offeror would also hold at least 90% of the Disinterested NWCL Shares;
(iii) no event having occurred which would make any of the Offers or the acquisition of any of the Offer Shares under the Share Offer or the cancellation of the NWCL Options under the Option Offer void, unenforceable or illegal or prohibit implementation of any of the Offers or would impose any additional material conditions or obligations with respect to any of the Offers or any part thereof;
(iv) all necessary consents (including consents from the relevant lenders) in connection with the Offers and in connection with the withdrawal of listing of the NWCL Shares from the Stock Exchange which may be required under any existing contractual obligations of NWCL being obtained and remaining in effect;
(v) no relevant government, governmental, quasi-government, statutory or regulatory body, court or agency in Hong Kong, the Cayman Islands or any other jurisdictions having taken or instituted any action, proceeding, suit, investigation or enquiry (or enacted, made or proposed, and there not continuing to be outstanding, any statute, regulation, demand or order) that would make any of the Offers or its implementation in accordance with its terms void, unenforceable, illegal or impracticable (or which would impose any material and adverse conditions or obligations with respect to any of the Offers or its implementation in accordance with its terms); and

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(vi) since the Announcement Date, there having been no material adverse change in the business, assets, financial or trading positions or prospects or conditions (whether operational, legal or otherwise) of the NWCL Group (to an extent which is material in the context of the NWCL Group taken as a whole).

The Offeror reserves the right to waive, in whole or in part, all or any of the Conditions set out above (other than Conditions (i) and (ii)). As at the Latest Practicable Date, none of the Conditions had been fulfilled.

The Option Offer is subject to and conditional upon the Share Offer becoming or being declared unconditional in all respects.

Further details of the terms of the Offers are contained in the letter from HSBC and Appendix I to the Composite Document. The Independent NWCL Shareholders and the NWCL Optionholders are urged to read the relevant sections in the Composite Document in full.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation with regard to the Offers, we have taken into account the following principal factors and reasons:

Background to and reasons for the Offers

The NWCL Group is principally engaged in investment and development of property projects in the PRC. It is the PRC property arm of its controlling shareholder, NWD. Shares of both NWCL and NWD are listed on the Main Board of the Stock Exchange.

In March 2014, a joint announcement was issued by NWCL, NWD and the Offeror, regarding a proposed privatisation of NWCL by way of a scheme of arrangement (the Previous Proposal). The Previous Proposal was not approved by the requisite majority in number of the then independent shareholders of NWCL present and voting in person or by proxy at the relevant shareholders’ meeting to consider the proposed scheme of arrangement (the ‘‘head count’’ test), although approximately 99.8% of the votes by number of shares held by the then independent shareholders of NWCL were cast in favour of the Previous Proposal. NWCL, being incorporated in the Cayman Islands, is bound by the ‘‘head count’’ test for a privatisation under a scheme of arrangement, as required by the relevant provisions of the Cayman Islands Companies Law. This is different from companies incorporated in Hong Kong, where the relevant ‘‘head count’’ test is no longer applicable since the new Companies Ordinance (Chapter 622 of the laws of Hong Kong) became effective in March 2014.

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On 6 January 2016, the Offeror Board, the NWD Board and the NWCL Board jointly announced the Offers. It is stated in the Composite Document that the Offeror believes the making of the Share Offer by way of a general offer, rather than a scheme of arrangement as used in the Previous Proposal, is more equitable to the Independent NWCL Shareholders because the outcome of the Share Offer will be determined solely on the basis of the level of acceptances of the Share Offer in terms of NWCL Shares. The Offeror believes that the outcome of the Previous Proposal did not reflect the preference of the majority of the Independent NWCL Shareholders by reference to the value of NWCL Shares held. The overall effect of the Offers (which involves a voluntary general offer under the Takeovers Code), after having been declared unconditional in all respects, is similar to that of the Previous Proposal (which involves a scheme of arrangement), in that NWCL would be privatised and become a wholly owned subsidiary of NWD.

Premium of the Share Offer Price over historical market prices

The Share Offer Price, which will not be increased, represents an opportunity for the Independent NWCL Shareholders to realise their investment in NWCL for a cash price of HK$7.80 per Offer Share, which represents a premium of approximately 58.5% over the simple average closing price of HK$4.92 per NWCL Share during the six-month period from 2 July 2015 to 31 December 2015, being the Last Trading Day. The Share Offer Price represents a premium of approximately 25.6% over the closing price of HK$6.21 per NWCL Share on the Last Trading Day, which is considerably lower. However, we consider the longer-term average to be more representative of the price performance of the NWCL Shares, given the significant fluctuation of the price per NWCL Share between HK$3.89 and HK$6.23 during the above six-month period. For reference, the Share Offer Price represents a premium of approximately 14.7%, or HK$1.00, over the cancellation price of HK$6.80 per scheme share under the Previous Proposal. As set out in this letter below, it also represents a premium of approximately 14.6% over the unaudited consolidated net asset value (‘‘NAV’’) per NWCL Share as at 31 December 2015. It represents an approximately 29.4% discount to the Adjusted NAV, as set out in the section headed ‘‘Adjusted NAV’’.

As stated in the Composite Document, NWCL is an integral part of the NWD Group and NWD has maintained majority voting control in NWCL since NWCL’s initial public offering in 1999. In these circumstances, it is highly unlikely that another third party could in practice seek to acquire the Offer Shares at a price comparable to or better than the Share Offer.

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The Offeror has stated its intention to exercise its compulsory acquisition right under the Cayman Islands Companies Law to privatise NWCL if it has received valid acceptances in respect of not less than 90% of the Offer Shares and not less than 90% of the Disinterested NWCL Shares within 4 months of the posting of the Composite Document. Independent NWCL Shareholders should note that the above percentage thresholds to privatise NWCL are one of the conditions to the Share Offer. In other words, if the above percentage thresholds are not reached, the Share Offer will not become unconditional and none of the Independent NWCL Shareholders will receive the consideration payable under the Share Offer.

2. Information on the NWCL Group

NWCL is a company incorporated in the Cayman Islands with limited liability. It mainly develops property projects for sale, develops and manages investment properties for rental purposes, and operates resort and hotel projects. Its property projects cover residential estates, serviced apartments, villas, offices, shopping centres, mixed use comprehensive buildings, hotels and resorts. As one of the leading large-scale national developers in the PRC, the NWCL Group’s property development portfolio comprises 23 major projects spanning over 13 large cities or major transportation hubs as at the Latest Practicable Date, assuming all the Disposals had been completed.

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(a) Financial performance
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The following table sets out the consolidated income statement of the NWCL Group for the six-month period ended 31 December 2014 and 2015, and for the years ended 30 June 2014 and 2015, as extracted and summarised from Appendix II to the Composite Document:

Continuing operations Revenue Property development Rental operation Others (principally property management services and hotel operations) Total revenue Cost of sales Gross profit Gross profit margin Profit before taxation Taxation charge (Loss)/profit for the period/year from continuing operations Discontinued operation Gain on disposal of discontinued operation Loss for the period/year from discontinued operation Profit for the period/ year Profit attributable to NWCL Shareholders Earnings per NWCL Share Basic (HK cents) Diluted (HK cents) Dividends for the period/year Per NWCL Share	For the six-month period ended 31 December 2015 2014 HK$’000 HK$’000 (Unaudited) (Unaudited) 6,310,673 7,136,245 428,181 414,830 561,592 883,098 7,300,446 8,434,173 (4,931,422) (5,407,620) 2,369,024 3,026,553 32.5% 35.9% 545,640 2,880,352 (857,327) (1,306,695) (311,687) 1,573,657 768,894 — (19,603) (94,103) 437,604 1,479,554 542,207 1,515,225 6.24 17.45 6.23 17.43 — — — —	For the year ended 30 June 2015 2014 HK$’000 HK$’000 (Audited) (Audited) 15,172,392 19,706,194 828,864 792,868 1,457,981 1,351,044 17,459,237 21,850,106 (10,621,455) (12,770,039 6,837,782 9,080,067 39.2% 41.6% 6,422,415 9,107,119 (2,918,335) (4,167,156 3,504,080 4,939,963 — — (34,033) (140,698 3,470,047 4,799,265 3,313,131 4,638,691 38.14 53.49 38.12 53.45 260,681 607,713 HK$0.03 HK$0.07

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(i) Revenue

The revenues of the NWCL Group are mainly derived from (a) property development; (b) rental operation; and (c) other business segments including property management services, hotel operations and other operations. Set out below is a brief review of the NWCL Group’s segmental performance during the above period.

(a) Property development

Revenue from the property development segment, which represents gross proceeds from sale of properties, is the largest business segment of the NWCL Group in terms of revenue contribution. It accounted for approximately 90.2% and 86.9% of total revenues for the years ended 30 June 2014 and 2015 respectively. Revenue from property development decreased by approximately 23.0% from the year ended 30 June 2014 to 30 June 2015, from approximately HK$19,706.2 million to approximately HK$15,172.4 million, mainly due to decreases in the number of properties completed and planned deferrals in launching the sale of certain properties during the relevant year. For the sixmonth period ended 31 December 2015, the NWCL Group recorded revenue from property development of approximately HK$6,310.7 million, equivalent to approximately 88.4% of the corresponding revenue in same period last year. The decrease in revenue from property development in the current period is mainly due to the decrease in the number of property projects completed and the planned deferral of launching the sale of Shenzhen New World Signature Hill and Shenzhen Yi Shan Garden to maximise their returns by benefiting from the trend of rising property prices in the region.

(b) Rental operation

The rental operation segment accounted for approximately 3.6% and 4.7% of the total revenue of the NWCL Group for the year ended 30 June 2014 and 2015, respectively, with segment revenue rising from approximately HK$792.9 million to approximately HK$828.9 million. The increase was primarily driven by higher rental contributions from office premises and commercial properties in cities such as Shanghai and Wuhan. For the sixmonth period ended 31 December 2015, the NWCL Group recorded revenue from rental operations of approximately HK$428.2 million, representing a slight increase of approximately 3.2% compared to the same period last year. Fluctuations in rental revenue were relatively moderate compared to other business segments, and were directly associated with occupancy rates and unit rental rates of commercial properties held by the NWCL Group.

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(c) Others

Other revenue of the NWCL Group for the year ended 30 June 2015 mainly consisted of revenue generated from property management services and hotel operations, which amounted to approximately HK$507.8 million and HK$389.0 million, respectively. The revenue from the property management segment increased by approximately 19.5% for the year ended 30 June 2015 over the previous year, mainly due to an increase in property management services provided to property projects completed during the year. Compared to the previous year, revenue from hotel operations for the year ended 30 June 2015 increased by approximately 10.3%, mainly due to the opening of New World Guiyang Hotel in September 2014 and the general improvement in overall occupancy rate of the other hotels of the NWCL Group. Other revenue decreased to approximately HK$561.6 million for the six-month period ended 31 December 2015, representing a decrease of 36.4% as compared to the last corresponding period. The decrease was primarily due to reduced contracting services income during the period.

(ii) Gross profit

Gross profit of the NWCL Group for the year ended 30 June 2015 amounted to approximately HK$6,837.8 million, a decrease by approximately 24.7% as compared to the same period in 2014. This was mainly due to a decrease in the gross profit of property sales. The overall gross profit margin decreased from approximately 41.6% to 39.2%, primarily due to differences in the recorded property sales mix. For the year ended 30 June 2015, a higher proportion of property sales were from property projects in Tianjin, Foshan, Langfang and Dalian in the PRC, which had relatively lower gross profit margins given their status as second and third-tier cities. The overall gross profit margin decreased further to approximately 32.5% for the six-month period ended 31 December 2015 due to differences in the sales mix in both periods, with more recorded property sales during the period being from second and third-tier cities such as Anshan, Foshan, Chengdu, Guiyang and Jinan in the PRC, leading to lower gross profit margins as compared to the property projects sold in the same period last year.

(iii) Gain on disposal of discontinued operation

As set out in the joint announcement of NWD and NWCL dated 3 July 2015, the NWCL Group announced the disposal of its business segment engaged in the provision of worldwide hotel management services. The respective consolidated results of the hotel management services segment are presented and restated as discontinued operation accordingly over the periods presented above. The above disposal was completed on 29 December 2015 for an aggregate consideration of

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HK$2,753.0 million, with a gain on disposal of approximately HK$768.9 million, which was recorded by the NWCL Group as a one-off gain for the six-month period ended 31 December 2015.

(iv) Profit attributable to NWCL Shareholders

Profit attributable to NWCL Shareholders decreased by approximately 28.6% from approximately HK$4,638.7 million for the year ended 30 June 2014 to approximately HK$3,313.1 million for the year ended 30 June 2015. This decrease was primarily due to an overall decrease in core profit from property sales as a result of a decrease in the number of property projects completed during the year. The NWCL Group recorded a profit attributable to NWCL Shareholders of approximately HK$542.2 million for the six-month period ended 31 December 2015, equivalent to approximately 35.8% of that in the corresponding period last year, principally as a result of (i) a decrease in property sales volume and gross profit margin as explained above, and (ii) net foreign exchange losses of approximately HK$1,294.5 million, arising from the devaluation of the Renminbi against the Hong Kong dollar during the six-month period ended 31 December 2015 (as stated on the website of the People’s Bank of China, the HK$/RMB exchange rate increased from 0.7886 on 30 June 2015 to 0.8378 on 31 December 2015). This had a major effect on the NWCL Group given its functional currency is the Renminbi while the reporting currency is the Hong Kong Dollar. Any further weakening of the Renminbi against the Hong Kong Dollar will affect the results of the NWCL Group.

(v) Dividend paid to NWCL Shareholders

The total dividend paid to NWCL Shareholders decreased from HK$0.07 per NWCL Share for the year ended 30 June 2014 to HK$0.03 per NWCL Share for the year ended 30 June 2015. The dividend yield, as represented by the Share Offer Price of HK$7.80 per NWCL Share, is less than 1.0% for each of the years ended 30 June 2014 and 2015. No interim dividend has been declared or paid by the NWCL Group for the six-month period ended 31 December 2015.

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(b) Financial position

The following table sets out the consolidated statement of financial position of NWCL as at 31 December 2015, 30 June 2015 and 2014 as extracted and summarised from Appendix II to the Composite Document:

Non-current assets Property, plant and equipment Investment properties Land use rights Intangible assets Properties held for development Associated company and joint ventures Available for sale financial assets Total non-current assets Current assets Properties under development Completed properties held for sale Hotel inventories, at cost Prepayments, debtors and other receivables Amounts due from related companies Cash and bank balances, unrestricted Assets of disposal groups classified as held for sale Non-current assets reclassified as held for sale Total current assets	As at 31 December 2015 HK$’000 (Unaudited) 5,241,850 22,677,651 577,501 123,417 13,751,920 14,700,228 4,004,215 61,076,782 16,387,630 14,408,004 3,915 6,948,748 212,227 18,130,524 22,343,211 1,262,217 79,696,476	As at 30 June 2015 2014 HK$’000 HK$’000 (Audited) (Audited) 5,831,924 4,763,887 24,684,353 21,971,592 720,144 703,901 91,030 1,895,952 19,741,250 18,182,575 15,598,108 14,309,144 735,860 85,147 67,402,669 61,912,198 17,671,570 21,091,110 19,885,358 8,977,146 4,102 4,002 11,275,453 10,881,917 301,943 577,025 15,773,665 17,351,595 2,112,780 — — 131,138 67,024,871 59,013,933

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Current liabilities Creditors and accruals Deposits received on sale of properties Amounts due to related companies Short term loans Current portion of long term borrowings Amount due to non-controlling interests Taxes payable Liabilities of disposal groups classified as held for sale Total current liabilities Non-current liabilities Long term borrowings Deferred tax liabilities Total non-current liabilities Equity attributable to NWCL Shareholders Non-controlling interests Total equity NAV attributable to NWCL Shareholders per NWCL Share – 54 –	As at 31 December 2015 HK$’000 (Unaudited) 7,985,189 6,243,425 942,691 — 6,553,940 101,313 4,381,837 6,250,588 32,458,983 42,192,270 3,157,875 45,350,145 59,169,685 3,794,445 62,964,130 6.806	As at 30 June 2015 2014 HK$’000 HK$’000 (Audited) (Audited) 8,890,122 6,950,199 6,045,122 4,716,405 723,334 507,848 1,001,250 — 9,775,255 14,197,174 102,756 102,756 4,432,361 4,654,828 927,853 — 31,898,053 31,129,210 34,388,409 25,226,035 3,522,327 3,252,232 37,910,736 28,478,267 60,781,851 57,752,517 3,836,900 3,566,137 64,618,751 61,318,654 6.995 6.651

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(i) Property, plant and equipment

Property, plant and equipment of the NWCL Group principally includes assets under construction (amongst others, hotel properties under construction), completed hotels and properties for the NWCL Group’s own use.

(ii) Investment properties

The NWCL Group’s accounting policies state that investment properties, which include completed investment properties and investment properties under development are carried at fair values in the consolidated statement of financial position. Completed investment properties, with a carrying value of approximately HK$16,796.0 million as at 31 December 2015, include office premises, commercial properties, serviced apartments, car parking portions of certain completed properties and other ancillary properties. Investment properties under development, with a carrying value of approximately HK$5,881.7 million as at 31 December 2015, comprise mainly commercial properties and car parking portions of certain developments. Major investment properties as at 31 December 2015 include the commercial podiums of Shanghai Ramada Plaza, Shenyang New World Garden, Wuhan New World International Trade Tower I and II and Shenyang K11 Art Mall.

(iii) Land use rights

The NWCL Group’s interests in land use rights primarily represent the land portion of the NWCL Group’s hotel properties and other properties held for NWCL’s own use under property, plant and equipment.

(iv) Properties held for development

Major properties held for development as at 31 December 2015 include the remaining phases of Shenyang New World Garden, a residential project, and the remaining phases of Foshan Canton First Estate, a residential and hotel development project.

(v) Properties under development

Major properties under development as at 31 December 2015 include remaining phases of Guangzhou Covent Garden, a residential development project, Wuhan New World Times, a residential and office development project, and the residential and office portion of Shenyang New World Convention Centre.

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(vi) Completed properties held for sale

Completed properties held for sale as at 31 December 2015 represent mainly commercial, office and residential developments, which include Shenzhen New World Yi Shan Garden, Shenzhen New World Signature Hill, Beijing Yuzhang Project, Foshan Canton First Estate and Guangzhou Park Paradise.

(vii) Assets/liabilities of disposal groups classified as held for sale

In December 2015 the NWCL Group announced the Disposals, being the sale of five property projects in Wuhan, Huiyang, Haikou, Chengdu and Guiyang in the PRC, for an aggregate consideration of approximately RMB20.8 billion (or approximately HK$24.9 billion). The consideration due to the NWCL Group from the disposal of the property projects in Wuhan, Huiyang and Haikou is payable in tranches within 24 months after completion. Further details of the Disposals are set out in the joint announcements of NWD and NWCL dated 2 December 2015 and 29 December 2015, and the circulars of NWCL dated 23 December 2015 and 19 January 2016. The property projects that are subject of the Disposals have been reclassified as assets/liabilities of disposal groups classified as held for sale as at 31 December 2015. The disposals of the property projects in Wuhan, Huiyang, Haikou and Guiyang had been completed as at the Latest Practicable Date. The property projects under the Disposals do not form part of the property valuation contained in Appendix III to the Composite Document, as explained in the section headed ‘‘V. Property interests and adjusted net asset value’’ in Appendix II to the Composite Document. The impact of the Disposals has been included in the calculation of the Adjusted NAV, details of which are set out in the section headed ‘‘Adjusted NAV’’.

(viii) Borrowings and indebtedness position

As at 31 December 2015, the NWCL Group had total borrowings, excluding those that are subject to the Disposals, of approximately HK$48,746.2 million (representing an increase of approximately 7.9% compared to 30 June 2015), and a gearing ratio (defined as net debt, being the aggregate of borrowings, net of cash and bank balances, divided by total equity) as at 31 December 2015 of approximately 48.6%. However, this is before the receipt of the proceeds from the Disposals equivalent to approximately HK$24.9 billion. As at 31 December 2015, the NWCL Group’s committed unutilised bank loan facilities amounted to approximately HK$9,407.0 million.

(c) Comments on the NWCL Group’s financials

Revenues of the NWCL Group are to a large extent driven by its property development business, which has been the NWCL Group’s largest business segment by revenue. During the six-month period ended 31 December 2015, the decrease in revenue was attributable to a decrease in completed projects and the planned deferral of certain

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sales of completed properties. The gross profit margin decreased mainly due to a difference in sales mix in both periods with a higher proportion of sales coming from projects in second and third-tier cities, which carry relatively lower profit margins. It follows that the NWCL Group’s profits fluctuate with the property development sales cycle. The NWCL Group’s financial position is primarily determined by investment properties, properties held for or under development and completed properties held for sale, which constitute a significant portion of total assets as at 31 December 2015. For this reason, we place particular emphasis on the property valuation and its effect on the adjusted NAV of the NWCL Group as at 31 December 2015. Please make reference to the section headed ‘‘Adjusted NAV’’ for further details.

(d) Prospects of the NWCL Group

As stated on the website of the National Bureau of Statistics of the PRC, commodity housing sales in the PRC grew by approximately 14.4% and 6.5% by sales amount and by floor area respectively in 2015 compared to 2014, while the growth rate of investment in PRC property development has been declining during the year, from approximately 10.5% in 2014 to approximately 1.0% in 2015. As set out in NWCL’s interim results announcement for the six-month period ended 31 December 2015, NWCL sees a number of PRC government policies that have contributed to rising demand in the PRC property market in 2015, including mortgage borrowing rates for personal housing being at a five-year low and measures that restrain home purchases by foreign institutions and persons gradually coming to an end. NWCL considers that in 2016 the turnover in the real estate market will gradually increase, and that the NWCL Group will appropriately augment its investment in the PRC in the future.

As set out in NWCL’s announcements in relation to the Disposals dated 2 December 2015 and 29 December 2015, the Disposals signify the NWCL Group’s strategy of optimising its project development and investment portfolio by scaling down investment in second and third-tier cities and projects with lower gross profit margin and by focusing more resources in first-tier and 1.5-tier cities and mid-sized property projects. For the second half of the financial year ending 30 June 2016, NWCL expects that the number of completed properties will rise, with plans to complete 8 property projects for sale, comprising residential and commercial properties.

The NWCL Directors expect the PRC government will continue its principles of ‘‘classification guidance, localisation implementation’’ to implement real estate policies that have targeted objectives and are differentiated on the basis of actual circumstances of various cities, and consider that the domestic urbanisation strategy and increasing salary levels in the PRC are favourable to the healthy development of the domestic real estate market in the long run.

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We concur with the NWCL Directors’ view and further consider the general outlook for PRC property remains mixed, with 2015 commodity housing sales growth not necessarily being sustained and certain macroeconomic indicators for the PRC economy exhibiting a downward trend.

3. Intentions of NWD regarding the NWCL Group

As stated in the letter from HSBC in the Composite Document, if the Offeror has received valid acceptances in respect of not less than 90% of the Offer Shares and not less than 90% of the Disinterested NWCL Shares, the Offeror intends to privatise NWCL by exercising its right to compulsorily acquire those Offer Shares not acquired by the Offeror under the Share Offer, subject to the relevant requirements and laws. Accordingly, NWCL will become an indirect wholly owned subsidiary of NWD and an application will be made for the withdrawal of the listing of the NWCL Shares from the Stock Exchange.

As stated in the letter from HSBC in the Composite Document, NWD intends to continue the existing business of the NWCL Group upon the completion of the Offers, and subject to market conditions, may explore various opportunities to develop it further. NWD does not currently intend to introduce major changes to the business of NWCL (including any redeployment of the fixed assets of NWCL), save for those changes which NWD may from time to time implement following the review of its strategic options relating to the business, structure and/or direction of the NWCL Group. It is also the current intention of NWD that the employment of the existing employees of the NWCL Group and the directorships of the existing directors of the NWCL Group should be continued following completion of the Offers except for changes which may occur in the ordinary course of business.

The Independent NWCL Shareholders should refer to the sections headed ‘‘Information on the Offeror and NWD’’ and ‘‘Intentions of NWD regarding the NWCL Group’’ in the letter from HSBC in the Composite Document for further details.

Assets and Adjusted NAV
(i) Property interests

The unaudited consolidated financial statements of the NWCL Group as at 31 December 2015 are set out in Appendix II to the Composite Document and summarised above in this letter. The net assets attributable to equity shareholders as at 31 December 2015 based on book value were approximately HK$59,169.7 million (or approximately HK$6.806 per NWCL Share).

The valuations of the NWCL Group’s property interests (together with the property interests held under or held through joint ventures of the NWCL Group) as at 31 December 2015 conducted by Knight Frank are set out in Appendix III to the Composite Document. This is a summary for convenience of readers of the Composite Document; a copy of the full property valuation report is available for inspection at the office of

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NWCL and on the websites of NWCL and the SFC. Please see the section headed ‘‘Documents Available for Inspection’’ in Appendix V to the Composite Document for further details.

The market value of the property interests in existing state attributable to the NWCL Group may be analysed as follows:

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Market value of
the property
interests in
existing state
attributable to
the NWCL Proportion of
Group total
(Note 1)
RMB million
Completed investment properties 20,566.0 19.7%
Investment properties under development 4,911.2 4.7%
Hotels 3,308.0 3.2%
Completed properties held for sale,
properties held for/under development 63,397.4 60.6%
Land and buildings 574.4 0.5%
Assets under construction 3,173.0 3.0%
Contracted property (Note 2) 8,693.3 8.3%
Total property interests 104,623.3 100.0%
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Notes:

Including those property interests held under or held through joint ventures of the NWCL Group.
The NWCL Group has entered into a land grant contract in respect of Beijing Xin Yu Garden for which the real estate title deed is to be obtained after completing relevant procedures before the end of 2019.

The completed investment properties as set out above comprise commercial properties, including both retail and office developments, serviced apartment properties, commercial podiums of both residential and commercial properties, car parking portions of certain developments, and other ancillary properties. This includes Shanghai Hong Kong New World Tower, a 58-storey office building with an attributable value of RMB2,759.0 million, and various portions of Beijing New World Centre Phase I, a multi-purpose complex with an attributable value of approximately RMB1,782.9 million.

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Investment properties under development comprise commercial properties and car parking portions of certain developments, including Shenyang K11 Art Mall, a largescale commercial complex which is expected to be completed in 2016, with an attributable value of RMB2,990.0 million.

Hotel properties comprise a total of 7 completed properties in Beijing, Dalian, Shanghai, Shunde and Wuhan.

Properties held for sale, properties held for/under development include completed properties and residential and commercial property projects where construction is in progress. Major projects include:

Guangzhou Covent Garden, a residential/commercial composite development with a total gross floor area (‘‘GFA’’) of approximately 800,416 sqm and an attributable value of RMB8,121.0 million;
The remaining phase of Shenyang New World Garden, a residential development with a total GFA of approximately 1,509,466 sqm and an attributable value of RMB5,183.0 million;
Foshan Canton First Estate, a residential and hotel composite development project, with a total GFA of approximately 1,403,025 sqm and an attributable value of approximately RMB4,373.1 million;
Shenzhen New World Yi Shan Garden, a residential development project, with a total GFA of approximately 94,988 sqm and an attributable value of RMB4,215.0 million; and
Wuhan New World Times, a residential/commercial composite development with a total GFA of approximately 669,446 sqm and an attributable value of RMB3,906.0 million.

Land and buildings comprise the Foshan Canton First Estate golf course, commercial properties and car park portions of property projects, and various office premises that are for the NWCL Group’s own use.

Assets under construction includes three hotels under construction, and the Shenyang New World Centre convention centre under development with a total GFA of approximately 119,475 sqm.

Contracted property represents Beijing Xin Yu Garden, a residential and commercial composite development with a total GFA of approximately 799,987 sqm and an attributable value of approximately RMB8,693.3 million.

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The market value of the property interests in existing state attributable to the NWCL Group as at 31 December 2015 of approximately RMB104.6 billion represents an increase of approximately 2.7% over the property valuation for the Previous Proposal as at 28 February 2014. When assessing the property valuation as at 31 December 2015 we note that changes in property prices in the past approximately two years in certain localities of the PRC, for example the general increases in the property prices of residential property in Shenzhen, have been taken into account by the property valuer.

The main purpose of such valuations is to use them as a basis for arriving at the Adjusted NAV shown in sub-section (ii) below, one of the main factors against which the Share Offer Price is assessed. For this purpose, we have discussed the property valuation with Knight Frank, including specifics on (i) bases and assumptions used, which included comparable transactions in the vicinity (for both properties and bare land) and valuation approaches employed, (ii) the property valuer’s due diligence work, and (iii) major differences to the property valuation prepared by Knight Frank under the Previous Proposal. Knight Frank confirmed that it has performed site visits to each of the properties covered by the property valuation report. We note that the property valuer has used various valuation methodologies for arriving at valuations for the properties. They include the income approach, pursuant to which properties are principally valued on the basis of capitalisation of net income, and the direct comparison approach, where properties are valued with reference to market comparable sales evidence available in the market and taking into account construction costs, where applicable. We have discussed the overall approach to the property valuation and queried the selection of relevant valuation methodologies for major properties. We concur with the valuation approaches the property valuer has taken in valuing the different types of properties.

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(ii) Adjusted NAV
We consider that the NWCL Group is an asset-based group, and therefore emphasis
should be placed on evaluating the Share Offer Price against the net asset backing of the
NWCL Group. For this purpose we have reviewed the adjusted unaudited consolidated
net assets (the Adjusted NAV) of the NWCL Group, based on the unaudited consolidated
financial statements of NWCL as at 31 December 2015 and the adjustments as set out in
the table below, which include the revaluation surplus arising from property valuations
and the effect of the Disposals, in both cases net of estimated tax:
HK$ million
Unaudited consolidated NAV of the NWCL Group attributable to
equity holders as at 31 December 2015 59,169.7
Adjustments:
— Revaluation surplus arising from the valuation of property
interests attributable to the NWCL Group as at 31 December
2015 (Note 1) 39,704.5
— Net deferred tax on attributable revaluation surplus (Note 2) (9,866.2)
— Estimated pro forma gain from the Disposals (Note 3) 7,116.0
Adjusted NAV 96,124.0
Adjusted NAV per NWCL Share (Note 4) HK$11.05
Share Offer Price per Offer Share HK$7.80
— Discount to Adjusted NAV 29.4%
Notes:
1. This represents the revaluation surplus arising from the excess of the market value of the
property interests held by the NWCL Group (including joint ventures) as valued by Knight Frank
as at 31 December 2015 over their corresponding book values as at 31 December 2015, after
adjusting for relevant interests not attributable to the NWCL Group.
2. This represents the potential PRC corporate income tax (‘‘CIT’’) attributable to the revaluation
surplus on all categories of property interests, and land appreciation tax (‘‘LAT’’) attributable
to the revaluation surplus of properties with an intention of future sale (which excludes
investment properties, self-use properties and hotel properties in relation to LAT), amounted to
approximately HK$14,196.2 million, that would be crystalised for the NWCL Group (including
joint ventures) upon disposal of these properties at the valuation price (as set out in the
summary of property valuation of the NWCL Group contained in Appendix III to the Composite
Document), less attributable tax indemnity from NWD of approximately HK$4,330.0 million. A
deed of tax indemnity was entered into between NWD and NWCL in July 1999 when NWCL was
first listed on the Stock Exchange, whereby NWD has undertaken to indemnify the NWCL Group
in respect of relevant PRC CIT and LAT in consequence of the disposal of certain properties (the
‘‘Indemnified Properties’’) held by the NWCL Group as at 31 March 1999. The above amount of
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approximately HK$4,330.0 million represents the amount to be received from NWD, pursuant to
the tax indemnity, if those Indemnified Properties still currently owned by the NWCL Group are
disposed of at the valuation price.
3. This figure is arrived at based on the consideration under the Disposals after deducting the
estimated attributable consolidated net asset values of the group of companies disposed as at the
corresponding completion dates, after taking into account the estimated tax payable, being
calculated at a rate of 10% on the difference between the relevant considerations (being adjusted
for certain estimated contingent costs in accordance with terms of the sale and purchase
agreement) and the relevant cost of investment in accordance with the relevant tax laws in the
PRC.
4. Based on 8,701,671,754 NWCL Shares in issue as at the Latest Practicable Date.
As set out in the above table, the Share Offer Price of HK$7.80 per NWCL Share
represents a discount of approximately 29.4% to the Adjusted NAV of approximately
HK$11.05 per NWCL Share.
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5. NWCL Share price and trading volume
The other main factor against which we have evaluated the Share Offer is the past market
prices of NWCL Shares.
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(i) NWCL Share prices
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The share price chart below illustrates the daily closing price per NWCL Share quoted on the Stock Exchange from 1 January 2014 up to the Latest Practicable Date (the ‘‘Review Period’’):

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Source: Bloomberg
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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

The share price chart above illustrates that the NWCL Shares have been trading consistently substantially below the Share Offer Price of HK$7.80 during the Review Period up to the Joint Announcement. After the Joint Announcement, the market price of NWCL Shares has, in our opinion, been based principally on the Share Offer Price.

In 2014, for an approximately three-month period between 14 March 2014 and 13 June 2014, the price of NWCL Shares traded between HK$6.33 and HK$6.63, during the offer period of the Previous Proposal. The price of NWCL Shares fell back after the Previous Proposal lapsed (for further information on the Previous Proposal, please see the section headed ‘‘Background to and reasons for the Offers’’). For the rest of 2014, NWCL Shares traded at between HK$4.16 and HK$5.30, and generally tracked the Hang Seng Composite Industry Index — Property and Construction (the ‘‘Industry Index’’), which has been included in the above share price chart for reference purposes.

The market price of NWCL Shares remained fairly stable during the first quarter of 2015, and then moved upwards during April and May, following the trend of the Industry Index. A high of HK$5.59 was recorded on 4 May 2015, but then the price declined, reaching a low of HK$3.89 on 8 July 2015. This drop was in general mirrored in the Industry Index. Following a second dip to HK$3.95 on 26 August 2015, the price gradually recovered during the rest of the year 2015, and traded at around HK$6.00 towards the end of December 2015, during which month NWCL announced the Disposals. Conversely, the Industry Index was in a general decline after a high on 26 October 2015.

Following the Joint Announcement, the price of NWCL Shares had been trading at a slight discount between 1.8% and 4.2% to the Share Offer Price of HK$7.80 per Offer Share, before closing at HK$7.47 on the Latest Practicable Date. During the same period, the Industry Index dropped substantially compared to its previous level before the publication of the Joint Announcement, from 2,796.95 points on 5 January 2016 (the trading day before the publication of the Joint Announcement) to 2,491.65 points as at the Latest Practicable Date.

The Share Offer Price of HK$7.80 represents a premium over the historical closing price of NWCL Shares during the Review Period. In particular, it represents:

. a premium of approximately 25.6% over the closing price of HK$6.21 per NWCL Share as quoted on the Stock Exchange on the Last Trading Day;
. a premium of approximately 40.8% over the average closing price of approximately HK$5.54 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 30 trading days immediately prior to and including the Last Trading Day;

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. a premium of approximately 45.8% over the average closing price of approximately HK$5.35 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 60 trading days immediately prior to and including the Last Trading Day;
. a premium of approximately 58.5% over the average closing price of the NWCL Shares of approximately HK$4.92 as quoted by the Stock Exchange for the six-month period up to and including the Last Trading Day; and
. a premium of approximately 56.9% over the average closing price of approximately HK$4.97 per NWCL Share based on the daily closing prices as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Day.

As set out in the explanatory paragraph above in regard to NWCL Share price movement, the NWCL Share price since 6 January 2016 has increased sharply, which was notably in contrast to the decline in the Industry Index during that period. Consequently, we consider that for the purposes of comparison it is more appropriate to take a sufficiently long period, for example six months or 180 trading days, to smooth out the effect of the short-term out-performance of the NWCL Shares over the Industry Index. On this basis, the premium of the Share Offer price over the market price is in the range of approximately 56.9 to 58.5%, as set out above.

The Share Offer represents a premium of approximately 4.4% over the closing price of HK$7.47 per NWCL Share as quoted on the Stock Exchange as at the Latest Practicable Date. The Independent NWCL Shareholders should also note that the current NWCL Share price level may not be sustained if the Offers do not close.

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(ii) Turnover

The table below sets out the total number of NWCL Shares traded per month, the percentage of the monthly trading volume to the issued share capital of NWCL and the percentage of the monthly trading volume to NWCL Shares held by the public respectively during the Review Period:

Total monthly
trading volume
of NWCL Shares
(Note)
2014
January
37,458,928
February
130,148,315
March
183,729,761
April
58,746,718
May
42,093,333
June
208,342,868
July
59,840,702
August
49,742,806
September
41,483,979
October
183,368,056
November
30,091,183
December
23,990,969
2014 average
2015
January
26,915,319
February
17,249,341
March
22,563,200
April
40,546,789
May
30,746,664
June
30,374,157
July
32,963,041
August
21,686,749
September
26,810,329
October
23,317,471
November
23,805,213
December
61,033,896
2015 average
2016
January
71,645,719
From 1 February
up to the Latest
Practicable Date
27,666,084

Approximate %
of total monthly
trading volume
to the total issued
NWCL Shares
Approximate %
of total monthly
trading volume
to the public float
0.4
1.5
1.5
5.4
2.1
7.6
0.7
2.4
0.5
1.7
2.4
8.6
0.7
2.5
0.6
2.0
0.5
1.7
2.1
7.1
0.3
1.2
0.3
0.9
1.0
3.6
0.3
1.0
0.2
0.7
0.3
0.9
0.5
1.6
0.4
1.2
0.3
1.2
0.4
1.3
0.2
0.8
0.3
1.0
0.3
0.9
0.3
0.9
0.7
2.3
0.4
1.1
0.8
2.8
0.3
1.1

Note: Sourced from Bloomberg and NWCL

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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

As illustrated in the above table, the monthly trading volumes of NWCL Shares during the Review Period represented approximately 0.2% to 2.4% of the total issued NWCL Shares, equivalent to approximately 0.7% to 8.6% of the issued NWCL Shares constituting the public float of NWCL. Except for the relatively higher monthly trading volumes (i) at the time of the Previous Proposal, in particular the commencement and lapse of the Previous Proposal in March and June 2014 respectively, and (ii) in October 2014, when Dr Cheng Kar-shun, Henry, Chairman and Managing Director of NWCL sold 151,983,526 NWCL Shares, both of which are included in the above trading volume figures, we do not consider that the trading of NWCL Shares was active during the Review Period. It follows that if NWCL Shareholders wish to sell a significant number of NWCL Shares in the market, some downward pressure on the market price of NWCL Shares is likely to result. The Share Offer represents an opportunity for Independent NWCL Shareholders to exit at a fixed cash price (i.e. the Share Offer Price) substantially above market price before the Joint Announcement and without affecting the market price. This opportunity may be particularly valuable in times of high market volatility, as recently experienced.

Comparisons (i) Privatisation precedents

We have compared the Share Offer to other privatisation proposals involving property companies listed on the Stock Exchange announced since 1 January 2006, approximately ten years before the Announcement Date, and up to the Latest Practicable Date (the ‘‘Privatisation Precedents’’). In our view, the Privatisation Precedents represent a complete list of privatisation proposals involving property companies we were able to identify from the Stock Exchange’s website in this time frame. Apart from the privatisation of Shanghai Forte Land Company Limited which was made by way of a voluntary general offer, the other Privatisation Precedents were made by way of schemes of arrangement. The table below illustrates the premiums over the relevant six-month

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average share prices at which such privatisation proposals have been priced, and the discounts to adjusted consolidated net assets at which the Privatisation Precedents were made:

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Premium of
offer/cancellation Discount of offer/
price over the cancellation price
six-month average to adjusted
Offer/ share price prior consolidated NAV
Date of initial cancellation to announcement per share
announcement Company Principal activities price of privatisation (Note 1) Result
HK$
March 2014 NWCL Investment and development 6.8 66.2% (32.5)% Not approved under
of property projects in the ‘‘head count’’ test
PRC (Note 2)
November 2013 Glorious Property Property development and 1.80 51.3% (40.1)% Not approved under
Holdings Limited investment ‘‘head count’’ test
(stock code: 845) (Note 3)
May 2012 Frasers Property Property investment, 0.28 75.0% (46.7)% Not approved under
(China) Ltd. development and ‘‘head count’’ test
(stock code: 535) management of residential, and by requisite
commercial and business number of scheme
park projects shares (Note 4)
January 2011 Shanghai Forte Land Property development and 3.50 45.8% (26.2)% Successful
Company Limited investment
(stock code: 2337)
April 2010 Wheelock Properties Ownership of properties for 13.00 156.4% (12.1)% Successful
Limited development and letting,
(stock code: 49) and investment holding
February 2008 Pacific Century Premium Development and management 2.85 15.4% (12.3)% Not approved under
Developments of property and ‘‘head count’’ test
Limited infrastructure projects, and and by requisite
(stock code: 432) investment in premium- number of scheme
grade buildings in the shares (Note 5)
Asia-Pacific region
April 2007 Shimao International Property development and 1.05 41.9% (19.8)% Successful
Holdings Limited investment
(stock code: 649)
Highest premium/highest discount 156.4% (46.7)%
Lowest premium/lowest discount 15.4% (12.1)%
Mean 64.6% (27.1)%
Median 51.3% (26.2)%
6 January 2016 The Share Offer 7.80 58.5% (29.4)%
Source: Published scheme documents, composite document, circulars or announcements relating to the
above proposals
Notes:
1. The consolidated adjusted NAV per share for each of the Privatisation Precedents has been
arrived at by making adjustments to the consolidated NAV, principally covering (i) revaluation
surplus arising from the valuation of respective property interests; and (ii) relevant tax effects.
2. Approximately 99.8% of the votes by number of scheme shares cast by scheme shareholders at
the court meeting were in favour of the Previous Proposal. However, approximately 66.0% of the
number of scheme shareholders voted against the Previous Proposal in the court meeting.
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Approximately 96.9% of the votes by number of scheme shares cast by scheme shareholders at the court meeting were in favour of the privatisation scheme of Glorious Property Holdings Ltd. However, approximately 51.7% of the number of scheme shareholders voted against the privatisation scheme in the court meeting.
Approximately 30.8% of the total number of shares held by independent shareholders, and approximately 58.6% of the number of independent shareholders at the court meeting, voted against the privatisation scheme of Frasers Property (China) Ltd.
Approximately 44.1% of the total number of shares held by independent shareholders, and approximately 71.0% of the number of independent shareholders at the court meeting, voted against the privatisation scheme of Pacific Century Premium Developments Limited.

As illustrated in the above table, the mean and median of premiums over 6-month average closing prices for the Privatisation Precedents were approximately 64.6% and 51.3% respectively. The premium for the Share Offer for the same period of approximately 58.5% is higher than the median, but lower than the mean of the Privatisation Precedents, principally due, in mathematical terms, to the exceptionally high premium of approximately 156.4% offered under the proposed privatisation of Wheelock Properties Limited, leading to a higher mean of the Privatisation Precedents.

As shown above, the cancellation or offer prices under the Privatisation Precedents represented discounts ranging from approximately 12.1% to approximately 46.7% to the respective consolidated adjusted NAV per share, with mean and median discounts of approximately 27.1% and 26.2%. As set out in the section headed ‘‘Adjusted NAV’’ and above, the Share Offer Price of HK$7.80 per NWCL Share represents a discount of approximately 29.4% to the Adjusted NAV of HK$11.05 per NWCL Share, which is towards the mid-range but slightly higher than the mean and median discounts presented above.

We have included both successful and unsuccessful cases in the above analysis. While the two most recent cases failed, including one involving NWCL under the Previous Proposal, they would have succeeded by an overwhelming margin apart from the “head count” test, which does not apply in this case. The proposed privatisations of Frasers Property (China) Ltd. and Pacific Century Premium Developments Limited were not approved both under the “head count” test and by requisite number of scheme shares. Had such two failed precedent cases been excluded from our analysis, the mean and median discounts to consolidated adjusted NAV of the other precedent cases would be approximately 26.1% and 26.2% respectively, similar to the abovementioned mean and median discounts of all Privatisation Precedents.

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(ii) Comparable companies

We have also analysed the following companies listed on the Stock Exchange that we consider to have a business and be of a size similar to NWCL, based on (i) over 50.0% of revenue being derived from property development and from the PRC based on their latest published annual results, and (ii) having a market capitalisation between HK$25.0 billion to HK$100.0 billion as at the Latest Practicable Date (the ‘‘Comparable Companies’’). We have identified 6 Comparable Companies based on the said criteria above. In our view, the Comparable Companies set out below represent a full list of companies we were able to identify from the Stock Exchange’s website which satisfied the above selection criteria. The table below illustrates the premium/(discounts) to NAV attributable to equity shareholders per share of the Comparable Companies based on their respective NAV per share as derived from the respective latest published financial information of the Comparable Companies, and the closing share prices of the Comparable Companies as at the Latest Practicable Date:

		Premium/(discount) to
		NAV attributable to
		equity shareholders
Company		per share
Evergrande Real Estate Group Limited (stock code: 3333)		3.2%
Country Garden Holdings Company Limited (stock code:
2007) (‘‘Country Garden’’)		(11.7)%
Longfor Properties Co., Ltd. (stock code: 960) (‘‘Longfor
Properties’’)		(6.3)%
Shimao Property Holdings Limited (stock code: 813)
(‘‘Shimao Property’’)		(38.7)%
Sino-Ocean Land Holdings Limited (stock code: 3377)
(‘‘Sino-Ocean Land’’)		(48.2)%
Guangzhou R&F Properties Co., Ltd.
(stock code: 2777) (‘‘Guangzhou R&F Properties’’)		(33.0)%
	Mean	(22.5)%
	Median	(22.3)%

The Share Offer Price represents a premium of approximately 14.6% over the unaudited consolidated NAV per NWCL Share as at 31 December 2015. This is in contrast to the Comparable Companies, which traded at the mean and median discount of approximately 22.5% and 22.3% respectively. NWCL Shareholders should note that the above analysis is based on the NWCL Group’s book NAV, and not the Adjusted NAV. Please refer to the beginning of the section headed ‘‘Privatisation precedents’’ for a comparison and analysis of the Adjusted NAV in the context of similar privatisation precedent cases.

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(iii) Dividend yield

For the years ended 30 June 2014 and 2015, the per share dividends paid to NWCL Shareholders were HK$0.07 and HK$0.03 respectively. No interim dividend has been declared by NWCL for the six-month period ended 31 December 2015. Based on the Share Offer Price of HK$7.80 for each Offer Share, the dividend yields of NWCL were approximately 0.9% and 0.4% for the years ended 30 June 2014 and 2015 respectively. We have compared the above dividend yields to those of the Comparable Companies (see note), as illustrated below:

		Dividend
Comparable Companies		yields
Evergrande		10.5%
Country Garden		6.3%
Longfor Properties		3.8%
Shimao Property		8.8%
Sino-Ocean Land		6.6%
Guangzhou R&F Properties		0.0%
	Mean	6.0%
	Median	6.5%

Note: The above dividend yields of the Comparable Companies are calculated based on the dividend per share payable per the respective latest published full-year financial information of the Comparable Companies, and the closing share prices of the Comparable Companies as at the Latest Practicable Date.

The Comparable Companies’ dividend yields are in the range of nil to approximately 10.5%, with a mean and median of approximately 6.0% and 6.5% respectively. The yield of NWCL as represented by the Share Offer Price is less than 1.0%. This means that the Independent NWCL Shareholders who place a high priority on income would have ready opportunities to re-invest the proceeds from the Share Offer Price in similar companies producing a higher yield.

(iv) Historical discount of market price to NAV

We have compared the closing price of NWCL Shares against the then latest consolidated NAV attributable to equity shareholders per NWCL Share, which we have assumed was generally available to the market from the date of publication of the relevant full year or interim results announcements, and that the respective NWCL Share price has reflected such information.

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Published
consolidated
NAV attributable Discount to
to equity Closing price NAV attributable to
shareholders per per NWCL Share equity shareholders per
Period (Note 1) NWCL Share (Note 3) NWCL Share
(Note 2) High Low Lowest Highest
Approximate Approximate
HK$ HK$ HK$ % %
25/9/2013 – 24/2/2014 6.27 4.62 3.69 26.3 41.1
25/2/2014 – 22/9/2014 6.69 6.63 4.49 0.9 32.9
23/9/2014 – 25/2/2015 6.65 5.36 4.16 19.4 37.4
26/2/2015 – 22/9/2015 6.88 5.59 3.89 18.8 43.5
23/9/2015 – Last Trading
Day 7.00 6.23 4.39 11.0 37.3
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Notes:

Date when NWCL released its full year or interim results announcements.
NAV attributable to equity shareholders are extracted from NWCL’s annual or interim results announcements.
NWCL Share prices as extracted from Bloomberg.

As shown above, NWCL Shares have typically been trading at a discount to the underlying NAV attributable to equity shareholders for the period from 25 September 2013 to the Last Trading Day, with discounts ranging from approximately 0.9% to 43.5%. We note that the low end of the range of approximately 0.9% (which was recorded in the period from 25 February 2014 to 22 September 2014), reflected the elevated share price during the offer period relating to the Previous Proposal. The Independent NWCL Shareholders should note that the above table does not account for adjusted NAV figures. For reference only, the approximately 14.6% premium of the Share Offer Price to the unaudited consolidated NAV per NWCL Share of HK$6.806 compares favourably to the historical discount of the market price to NAV attributable to equity shareholders as set out above, and as shown in the case of the Comparable Companies set out in sub-paragraph (ii) above.

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7. The Option Offer

HSBC, on behalf of the Offeror, is making the Option Offer to the NWCL Optionholders for the cancellation of every vested and unvested NWCL Option in accordance with Rule 13 of the Takeovers Code. The Option Offer is conditional upon the Share Offer becoming or being declared unconditional in all respects. Under the Option Offer, the Offeror will offer the NWCL Optionholders the Option Offer Price in cash for cancellation of each NWCL Option that they hold and surrender in acceptance of the Option Offer.

The Option Offer Price is calculated on a ‘‘see-through’’ basis, pursuant to which each NWCL Optionholder is entitled to receive a sum for each NWCL Option calculated by deducting the exercise price per NWCL Share payable on exercise of the relevant NWCL Option from the Share Offer Price. For example, a holder of a NWCL Option with an exercise price of HK$3.036 will receive HK$4.77 (i.e. HK$7.80 minus HK$3.036, rounded up to the nearest cent). We note that the adoption of a ‘‘see-through’’ basis is normal in such circumstances in Hong Kong.

As at the Latest Practicable Date, details of the NWCL Options, pursuant to the NWCL Share Option Schemes adopted on 26 November 2002 and 22 November 2011, were as follows:

NWCL Option
exercise price (HK$)
‘‘See
through’’
price (HK$)
Share option scheme of NWCL adopted on
3.036
4.764
2.705
5.095
Share option scheme of NWCL adopted on
2.45
5.350
3.37
4.430
3.88
3.920
3.35
4.450
2.762
5.038
4.01
3.790
3.97
3.830
4.72
3.080
4.42
3.380
4.968
2.832
5.42
2.380
4.504
3.296
Total

Outstanding
options
(vested)
Outstanding
options
(unvested)
Total
outstanding
options
26 November 2002
311,688
—
311,688
225,400
—
225,400
22 November 2011
665,640
1,201,120
1,866,760
32,300
89,200
121,500
1,537,680
764,240
2,301,920
646,790
855,200
1,501,990
297,600
346,400
644,000
222,300
636,800
859,100
1,148,103
1,572,120
2,720,223
141,200
544,800
686,000
—
481,200
481,200
1,505,360
8,453,120
9,958,480
100,800
731,200
832,000
469,600
2,564,800
3,034,400
7,304,461
18,240,200
25,544,661

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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

If any NWCL Option is vested and is exercised in accordance with the terms of the NWCL Share Option Schemes prior to the Closing Date, any NWCL Shares issued as a result of the exercise of NWCL Options prior to the Closing Date will be subject to and eligible to participate in the Share Offer.

As set out in the letter from HSBC in the Composite Document, as any exercise of the NWCL Options without accepting the corresponding Share Offer (in respect of the relevant NWCL Shares allotted to the NWCL Optionholders) after the Share Offer has been declared unconditional as to acceptances may result in the Offeror receiving less than the required percentage of acceptance for it to exercise the rights of compulsory acquisition and thus affecting the ability of the Offeror to privatise NWCL, NWD, the Offeror and NWCL had jointly requested each of the NWCL Optionholders to sign and return the Deed of Undertaking pursuant to which such NWCL Optionholder undertakes not to exercise any of the NWCL Options held by him/her from the date on which the Offeror has received valid acceptances of the Share Offer in respect of such number of NWCL Shares which would result in the Offeror holding at least 90% of the Offer Shares with the proviso that, within that holding, the Offeror would hold at least 90% of the Disinterested NWCL Shares (the ‘‘Acceptance Condition’’), until such time as the Share Offer shall have lapsed. As at the Latest Practicable Date, 99 NWCL Optionholders holding a total of 6,206,781 vested NWCL Options and 16,140,360 unvested NWCL Options had executed the Deed of Undertaking. The execution of the Deed of Undertaking shall not affect or prejudice the NWCL Optionholder’s rights to accept the Option Offer in respect of the outstanding NWCL Options held by him/her in accordance with the terms of the Option Offer. NWCL Optionholders who have signed and returned the Deed of Undertaking should note that it precludes them from exercising any of their NWCL Options from the date on which the Acceptance Condition has been fulfilled, until such time as the Share Offer shall have lapsed.

NWCL Optionholders should also note that, as stated in the section headed ‘‘Possible compulsory acquisition and withdrawal of listing of NWCL’’, dealings in the NWCL Shares will be suspended from the Closing Date, i.e. the first closing date of the Share Offer or any subsequent closing date as may be announced by NWD and the Offeror and approved by the Executive. It follows that NWCL Optionholders would not, upon exercising any of their NWCL Options, be able to sell the resultant NWCL Shares in the market from the Closing Date.

NWCL Optionholders who have not signed and returned the Deed of Undertaking shall be, pursuant to the terms of the NWCL Share Option Schemes, if the Share Offer becomes or is declared unconditional in all respects, entitled to exercise the NWCL Options in full (to the extent not already exercised) at any time within 14 days after the date on which the Share Offer becomes or is declared unconditional in all respects. The NWCL Options not exercised at the expiry of such 14-day period shall lapse.

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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

8. Possible compulsory acquisition and withdrawal of listing of NWCL

It is the intention of the Offeror to privatise NWCL. Subject to compliance with the relevant requirements under section 88 of the Cayman Islands Companies Law, if the Offeror, within four months of the posting of the Composite Document, has received valid acceptances in respect of not less than 90% of the Offer Shares and not less than 90% of the Disinterested NWCL Shares, the Offeror intends to privatise NWCL by exercising its rights to compulsorily acquire those Offer Shares not acquired by the Offeror under the Share Offer. If the Offeror does decide to exercise such rights and completes the compulsory acquisition, NWCL will become an indirect wholly owned subsidiary of NWD and an application will be made for the withdrawal of the listing of the NWCL Shares from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules.

Pursuant to Rule 15.6 of the Takeovers Code, where the Offeror has stated in the Composite Document its intention to avail itself of its powers of compulsory acquisition, the Offers may not remain open for acceptance for more than four months from the date of the Composite Document, unless the Offeror has, by that time, become entitled to exercise such powers of compulsory acquisition, in which event it must do so without delay.

If the Offer Shares validly tendered for acceptance under the Share Offer are less than 90% of the Offer Shares or less than 90% of the Disinterested NWCL Shares, the Offers will not become unconditional and will lapse. In such case, no Independent NWCL Shareholder will sell their NWCL Shares under the Share Offer and NWCL will remain listed on the Stock Exchange.

DISCUSSION

NWCL is a major property developer in the PRC and has been listed in Hong Kong since 1999. In 2014, the Offeror requested the NWCL Board to put forward a privatisation proposal, being the Previous Proposal, which however did not proceed due to the ‘‘head count’’ test, despite over 99% of the relevant NWCL Shares being voted in favour. In these circumstances, the Offeror believes that it is more equitable to the Independent NWCL Shareholders if the outcome of the Share Offer is determined on the basis of the number of NWCL Shares in respect of which the

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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

Share Offer is accepted. Under the Share Offer, the ‘‘head count’’ test is not applicable. The Share Offer price of HK$7.80 is HK$1.00 per NWCL Share higher than the cancellation price offered under the Previous Proposal.

NWCL expects to focus its resources on developing property projects with relatively higher profit margins in first-tier and 1.5-tier cities in the PRC. We consider the property market in the PRC remains mixed and the growth of sales even in first-tier and some 1.5-tier cities may not necessarily be sustained in the future, given macro-economic uncertainties. We also note that the Industry Index has recently been trending downwards and showing volatility.

We consider that the Share Offer Price of HK$7.80 per Offer Share should be assessed principally against the market prices of NWCL Shares before the Joint Announcement as well as the net asset backing of the NWCL Group. It follows that we have not relied on earnings-based analyses, given the typical volatility in profitability of a property developer. We have also considered dividend yield and the trading liquidity of NWCL Shares.

The Share Offer Price of HK$7.80, which will not be increased, represents a substantial premium over recent market prices. On a six-month basis prior to the Last Trading Day, which we consider a representative period for the purpose of comparison, the premium is approximately 58.5%. While being lower than the mean premium of approximately 64.6% under the Privatisation Precedents (due in part to an outlier), it is above the relevant median premium of approximately 51.3%. We therefore consider the premium has been set at an appropriate level for this kind of proposal. In addition, since the liquidity of NWCL Shares has been generally low, we consider the opportunity for the Independent NWCL Shareholders, as a body, to sell their NWCL Shares at a fixed cash price is a valuable one, particularly in volatile market conditions.

The Share Offer Price represents a premium of approximately 14.6% over the unaudited consolidated NAV per NWCL Share of HK$6.806 per NWCL Share as at 31 December 2015, which is relevant for comparison with other listed property developers where a full property valuation is not available. However, in the context of the Offers, a full property valuation of the NWCL Group has been carried out and is summarised in Appendix III to the Composite Document, to which Independent NWCL Shareholders’ attention is drawn. The Share Offer Price represents a discount of approximately 29.4% to the Adjusted NAV of approximately HK$11.05 per NWCL Share, which takes into account the property valuation as at 31 December 2015 and the Disposals, after allowing for taxation.

The discount to Adjusted NAV is towards the mid-range, though slightly higher than the mean and median discounts of past similar privatisation proposals of approximately 27.1% and 26.2% respectively. It should also be borne in mind, however, that NWCL has traded consistently at discounts to book NAV (i.e. before revaluation surplus) ranging between approximately 0.9% and 43.5% over the last approximately two years. The Comparable Companies traded at a mean and median discount of approximately 22.5% and 22.3% respectively to their book NAV as at the Latest Practicable Date. This compares to the premium of approximately 14.6% which the Share Offer Price represents over the NWCL Group’s book NAV per NWCL Share as at 31 December 2015.

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LETTER FROM THE NWCL INDEPENDENT FINANCIAL ADVISER

The dividend yield of NWCL at the Share Offer Price is less than 1%, while the mean and median of the Comparable Companies’ dividend yields are approximately 6.0% and 6.5% respectively. On this basis, the Independent NWCL Shareholders accepting the Share Offer have the opportunity to increase their income by reinvesting in similar companies paying a higher dividend yield.

The consideration under the Option Offer is set on a ‘‘see-through’’ basis, which is normal in such circumstances in Hong Kong. The Option Offer Price will not be increased. NWCL Optionholders who have signed and returned the Deed of Undertaking should note that it precludes them from exercising any of their NWCL Options from the date on which the Acceptance Condition has been fulfilled until such time as the Share Offer shall have lapsed. NWCL Options not exercised at the expiry of a 14-day period after the date on which the Share Offer becomes or is declared unconditional in all respects shall lapse.

OPINION AND ADVICE

Based on the above principal factors and reasons, we consider that the terms of the Share Offer are fair and reasonable so far as the Independent NWCL Shareholders are concerned and accordingly advise the NWCL Independent Board Committee to recommend the Independent NWCL Shareholders to accept the Share Offer. We also consider that the terms of the Option Offer are fair and reasonable so far as the NWCL Optionholders are concerned and accordingly advise the NWCL Independent Board Committee to recommend the NWCL Optionholders to accept the Option Offer.

NWCL Shares have consistently traded slightly below the Share Offer Price since trading resumed after the Joint Announcement, closing at HK$7.47 as at the Latest Practicable Date. However, the Independent NWCL Shareholders should monitor the Share price closely; if the Independent NWCL Shareholders decide to accept the Share Offer but the proceeds of selling in the market (net of costs) would be higher than the net proceeds receivable under the Share Offer, they should sell in the market instead. They should also keep in mind that, if applicable, dealings in the NWCL Shares will be suspended from the Closing Date up to the withdrawal of listing of the NWCL Shares from the Stock Exchange.

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NWCL Optionholders should likewise consider exercising their NWCL Options in accordance with the NWCL Share Option Schemes and selling in the market the NWCL Shares issued to them, if the proceeds (net of costs) would be higher than the net proceeds receivable under the Option Offer. NWCL Optionholders should note that all NWCL Options (to the extent not exercised) will lapse automatically 14 days after the date on which the Share Offer becomes, or is declared, unconditional in all respects. NWCL Optionholders who have signed and returned the Deed of Undertaking should also note that it precludes them from exercising any of their NWCL Options from the date on which the Acceptance Condition has been fulfilled until such time as the Share Offer shall have lapsed.

Yours faithfully, for and on behalf of SOMERLEY CAPITAL LIMITED M. N. Sabine John Wong Chairman Director

Mr. M. N. Sabine is a licensed person registered with the SFC and a responsible officer of Somerley, which is licensed under the SFO to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. He has over thirty years of experience in the corporate finance industry.

Mr. John Wong is a licensed person registered with the SFC and a responsible officer of Somerley, which is licensed under the SFO to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. He has over seven years of experience in the corporate finance industry.

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APPENDIX I

FURTHER TERMS OF THE OFFERS

1. PROCEDURES FOR ACCEPTANCE

To accept any of the Offers, you should duly complete and sign the relevant accompanying Form(s) of Acceptance in accordance with the instructions printed thereon, which instructions form part of the terms of the relevant Offer.

1.1 The Share Offer

(a) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares is/are in your name, and you wish to accept the Share Offer in respect of your Offer Shares (whether in full or in part), you must deliver the duly completed and signed WHITE Form of Share Offer Acceptance together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the number of Offer Shares for which you intend to accept the Share Offer, by post or by hand, to the Registrar, Tricor Standard Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong marked ‘‘New World China Land Limited — Share Offer’’ on the envelope so as to reach the Registrar as soon as possible but in any event by no later than 4:00 p.m. on the Closing Date or such later time(s) and/or date(s) as the Offeror may determine and announce in accordance with the Takeovers Code.
(b) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares is/are in the name of a nominee company or a name other than your own, and you wish to accept the Share Offer in respect of your Offer Shares (whether in full or in part), you must either: (i) lodge your share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the number of Offer Shares for which you intend to accept the Share Offer with the nominee company, or other nominee, and with instructions authorising it to accept the Share Offer on your behalf and requesting it to deliver the WHITE Form of Share Offer Acceptance duly completed and signed together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares to the Registrar; or
(ii) arrange for the Offer Shares to be registered in your name by NWCL through the Registrar, and deliver the duly completed and signed WHITE Form of Share Offer Acceptance together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any

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satisfactory indemnity or indemnities required in respect thereof) in respect of the number of Offer Shares for which you intend to accept the Share Offer to the Registrar; or

(iii) if your Offer Shares have been lodged with your licensed securities dealer/ registered institution in securities/custodian bank through CCASS, instruct your licensed securities dealer/registered institution in securities/custodian bank to authorise HKSCC Nominees Limited to accept the Share Offer on your behalf on or before the deadline set by HKSCC Nominees Limited. In order to meet the deadline set by HKSCC Nominees Limited, you should check with your licensed securities dealer/registered institution in securities/ custodian bank for the timing on the processing of your instruction, and submit your instruction to your licensed securities dealer/registered institution in securities/custodian bank as required by them; or (iv) if your Offer Shares have been lodged with your investor participant’s account maintained with CCASS, give your instruction via the CCASS Phone System or the CCASS Internet System on or before the deadline set by HKSCC Nominees Limited. (c) If you have lodged a transfer of any of your Offer Shares for registration in your name or if you have exercised your NWCL Options and have not yet received your share certificate(s), and you wish to accept the Share Offer in respect of those Offer Shares, you should nevertheless duly complete and sign the WHITE Form of Share Offer Acceptance and deliver it to the Registrar together with the transfer receipt(s), if any, duly signed by yourself and/or other document(s) of title or entitlement in respect of the NWCL Options (as the case may be). Such action will constitute an irrevocable authority to the Offeror and/or HSBC and/or their respective agent(s) to collect from NWCL or the Registrar on your behalf the relevant share certificate(s) when issued and to deliver such share certificate(s) to the Registrar on your behalf and to authorise and instruct the Registrar to hold such share certificate(s), subject to the terms and conditions of the Share Offer, as if it was/they were delivered to the Registrar with the WHITE Form of Share Offer Acceptance.

(d) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares is/are not readily available and/or is/are lost, as the case may be, and you wish to accept the Share Offer in respect of any of your Offer Shares, the WHITE Form of Share Offer Acceptance should nevertheless be duly completed and delivered to the Registrar together with a letter stating that you have lost one or more of your share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares or that it is/they are not readily available. If you find such document(s) or if it/they become(s) available, the

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relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares should be forwarded to the Registrar as soon as possible thereafter. If you have lost the share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares, you should also write to the Registrar for a form of letter of indemnity which, when completed and signed in accordance with the instructions given, should be provided to the Registrar. (e) Acceptance of the Share Offer will be treated as valid only if the duly completed and signed WHITE Form of Share Offer Acceptance is received by the Registrar on or before the latest time for acceptance of the Share Offer and the Registrar has recorded that the acceptance and any relevant documents required by Note 1 to Rule 30.2 of the Takeovers Code have been so received, and is: (i) accompanied by the relevant share certificate(s) and/or transfer receipt(s) and/ or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the number of Offer Shares for which you intend to accept the Share Offer and, if that/those share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) is/are not in your name, such other document(s) (e.g. a duly stamped transfer of the relevant NWCL Share(s) in blank or in favour of the acceptor executed by the registered holder) in order to establish your right to become the registered holder of the relevant Offer Shares; or

(ii) from a registered NWCL Offer Shareholder or his/her personal representative (but only up to the amount of the registered holding and only to the extent that the acceptance relates to the Offer Shares which are not taken into account under another sub-paragraph of this paragraph (e)); or
(iii) certified by the Registrar or the Stock Exchange.
(f) If the WHITE Form of Share Offer Acceptance is executed by a person other than the registered NWCL Offer Shareholder, appropriate documentary evidence of authority (e.g. grant of probate or certified copy of a power of attorney) to the satisfaction of the Registrar must be produced.
(g) Seller’s ad valorem stamp duty payable by the NWCL Offer Shareholders who accept the Share Offer and calculated at a rate of 0.1% of the market value of the Offer Shares or consideration payable by the Offeror in respect of the relevant acceptances of the Share Offer, whichever is the higher (rounded up to the nearest of HK$1.00), will be deducted from the amount payable by the Offeror to the relevant NWCL Offer Shareholders on acceptance of the Share Offer. The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the

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NWCL Offer Shareholders who accept the Share Offer and will pay the buyer’s ad valorem stamp duty in connection with the acceptance of the Share Offer and the transfer of the Offer Shares.

(h) If the Share Offer is invalid, withdrawn or lapses, the Offeror shall, as soon as possible but in any event within ten (10) days thereof, return by ordinary post at your own risk the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the Offer Shares tendered for acceptance together with the duly cancelled WHITE Form of Share Offer Acceptance to the relevant NWCL Offer Shareholder(s).

(i) No acknowledgement of receipt of any WHITE Form of Share Offer Acceptance and/or share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Offer Shares tendered for acceptance will be given.

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1.2 The Option Offer
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(a) If you are a NWCL Optionholder and you wish to accept the Option Offer in respect of your NWCL Options, you must deliver the duly completed and signed PINK Form of Option Offer Acceptance together with the relevant certificate(s), document(s) of title or entitlement in respect of the NWCL Options and/or any other document(s) (if applicable) evidencing the grant of the NWCL Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) for your holding of the NWCL Options or if applicable, for not less than the number of the NWCL Options in respect of which you intend to accept the Option Offer, by post or by hand, to the company secretary of NWCL at 9/F., New World Tower 1, 18 Queen’s Road Central, Hong Kong marked ‘‘New World China Land Limited — Option Offer’’ on the envelope so as to reach the company secretary of NWCL as soon as possible but in any event by no later than 4:00 p.m. on the Closing Date or such later time(s) and/or date(s) as the Offeror may determine and announce in accordance with the Takeovers Code.

(b) If the PINK Form of Option Offer Acceptance is executed by a person other than the registered NWCL Optionholder, appropriate documentary evidence of authority (e.g. grant of probate or certified copy of a power of attorney) to the satisfaction of the company secretary of NWCL must be produced.
(c) No stamp duty will be deducted from the amount paid or payable to the NWCL Optionholder(s) who accept(s) the Option Offer.
(d) If the Option Offer is invalid, withdrawn or lapses, the Offeror shall, as soon as possible but in any event within ten (10) days thereof, return by delivering the relevant certificate(s), document(s) of title or entitlement in respect of the NWCL

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APPENDIX I

FURTHER TERMS OF THE OFFERS

Options, and/or any other document(s) (if applicable) evidencing the grant of the NWCL Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) together with the duly cancelled PINK Form of Option Offer Acceptance to the office of NWCL in Hong Kong for collection by the relevant NWCL Optionholders.

(e) No acknowledgement of receipt of any PINK Form of Option Offer Acceptance and/or the relevant certificate(s), document(s) of title or entitlement in respect of your NWCL Options and/or any other document(s) (if applicable) evidencing the grant of the NWCL Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) will be given.

2 SETTLEMENT UNDER THE OFFERS

2.1 The Share Offer

Subject to the Offers becoming or being declared unconditional in all respects and provided that a duly completed WHITE Form of Share Offer Acceptance and the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the relevant Offer Shares as required by Note 1 to Rule 30.2 of the Takeovers Code are complete and in good order in all respects and have been received by the Registrar before the close of the Share Offer, a cheque for the amount due to each of the NWCL Offer Shareholders who accepts the Share Offer less seller’s ad valorem stamp duty in respect of the Offer Shares tendered by him under the Share Offer will be despatched to such NWCL Offer Shareholder by ordinary post at his own risk as soon as possible but in any event within seven (7) Business Days following the later of (i) the date on which the Offers become or are declared unconditional in all respects; and (ii) the date of receipt of a duly completed WHITE Form of Share Offer Acceptance together with all of the relevant document(s) by the Registrar to render such acceptance under the Share Offer valid.

Settlement of the consideration to which any NWCL Offer Shareholder is entitled to under the Share Offer will be implemented in full in accordance with its terms (save in respect of the payment of the seller’s ad valorem stamp duty) without regard to any lien, right of setoff, counterclaim or other analogous right to which the Offeror may otherwise be, or claim to be, entitled against such NWCL Offer Shareholder.

No fraction of a cent will be payable and the amount of cash consideration payable to a NWCL Offer Shareholder who accepts the Share Offer will be rounded up to the nearest cent.

2.2 The Option Offer

Subject to the Offers becoming or being declared unconditional in all respects and provided that a duly completed and signed PINK Form of Option Offer Acceptance and the relevant certificate(s), document(s) of title or entitlement in respect of the NWCL Options and/

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FURTHER TERMS OF THE OFFERS

or any other document(s) (if applicable) evidencing the grant of the NWCL Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) are complete and in good order in all respects and have been received by the company secretary of NWCL before the close of the Option Offer, a cheque for the amount due to each of the NWCL Optionholders who accepts the Option Offer in respect of the NWCL Options surrendered by him in acceptance of the Option Offer will be available for collection at the office of NWCL in Hong Kong at 9/F., New World Tower 1, 18 Queen’s Road Central, Hong Kong within seven (7) Business Days following the later of (i) the date on which the Offers become or are declared unconditional in all respects; and (ii) the date of receipt of a duly completed PINK Form of Option Offer Acceptance together with all the relevant document(s) by the company secretary of NWCL to render such acceptance, surrender and cancellation under the Option Offer valid.

Settlement of the consideration to which any NWCL Optionholder is entitled to under the Option Offer will be implemented in full in accordance with its terms, without regard to any lien, right of set-off, counterclaim or other analogous right to which the Offeror may otherwise be, or claim to be, entitled against such NWCL Optionholder.

No fraction of a cent will be payable and the amount of cash consideration payable to a NWCL Optionholder who accepts the Option Offer will be rounded up to the nearest cent.

3 ACCEPTANCE PERIOD AND REVISIONS

Unless the Offers are revised or extended with the consent of the Executive in accordance with the Takeovers Code, to be valid, the WHITE Form of Share Offer Acceptance must be received by the Registrar and the PINK Form of Option Offer Acceptance must be received by the company secretary of NWCL, in each case, in accordance with the instructions printed thereon and in this Composite Document by 4:00 p.m. on the Closing Date.

If the Offers are revised or extended, the Offeror will issue an announcement in relation to any revision or extension of the Offers, which announcement will state either the next Closing Date or, a statement that the Offers will remain open until further notice. In the latter case, at least fourteen (14) days’ notice in writing must be given, before the Offers are closed, to those NWCL Offer Shareholders and NWCL Optionholders who have not accepted the relevant Offers. If, in the course of the Offers, the Offeror revises the terms of the Offers, all the NWCL Offer Shareholders and the NWCL Optionholders, whether or not they have already accepted the Offers, will be entitled to accept the revised Offers under the revised terms. A revised offer must be kept open for at least fourteen (14) days following the date on which the revised offer document is posted.

If the Closing Date is extended, any reference in this Composite Document and in the Forms of Acceptance to the Closing Date shall, except where the context otherwise requires, be deemed to refer to the subsequent Closing Date.

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APPENDIX I FURTHER TERMS OF THE OFFERS

4 NOMINEE REGISTRATION

To ensure equality of treatment of all the NWCL Offer Shareholders, those NWCL Offer Shareholders who hold Offer Shares as nominee on behalf of more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. It is essential for the beneficial owners of the Offer Shares whose investments are registered in the names of nominees to provide instructions to their nominees of their intentions with regard to the Offers.

5 ANNOUNCEMENTS

By 6:00 p.m. on the Closing Date (or such later time(s) and/or date(s) as the Executive may in exceptional circumstances permit), the Offeror must inform the Executive and the Stock Exchange of its decision in relation to the revision, extension, expiry or unconditionality of the Offers. The Offeror must publish an announcement in accordance with the Listing Rules on the Stock Exchange’s website by 7:00 p.m. on the Closing Date stating the results of the Offers and whether the Offers have been revised, extended, expired or have become or been declared unconditional (whether as to acceptances or in all respects). The announcement will state the following:

(a) the total number of Offer Shares and NWCL Options for which acceptances of the Offers have been received;
(b) the total number of Offer Shares and NWCL Options held, controlled or directed by the Offeror and the Offeror Concert Parties before the Offer Period;

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(c) the total number of Offer Shares and NWCL Options acquired or agreed to be acquired
during the Offer Period by the Offeror and the Offeror Concert Parties; and
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(d) details of any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code)
in NWCL which the Offeror and any of the Offeror Concert Parties have borrowed or
lent, save for any borrowed Offer Shares which have been either on-lent or sold.
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The announcement will specify the percentages of the relevant classes of issued share capital, and the percentages of voting rights, represented by these numbers of Offer Shares.

In computing the total number of Offer Shares and NWCL Options represented by acceptances, only valid acceptances that are complete, in good order and fulfil the conditions set out in this Appendix I, and which have been received by the Registrar or the company secretary of NWCL (as the case may be) by no later than 4:00 p.m. on the Closing Date, being the latest time and date for acceptance of the Offers, shall be included.

As required under the Takeovers Code, all announcements in relation to the Offers will be made in accordance with the requirements of the Takeovers Code and the Listing Rules.

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APPENDIX I

FURTHER TERMS OF THE OFFERS

6 RIGHT OF WITHDRAWAL

The Share Offer is conditional upon the fulfilment of the Conditions set out in the ‘‘Letter from HSBC’’ in this Composite Document and the Option Offer is conditional upon the Share Offer becoming or being declared unconditional in all respects. Acceptances of the Offers tendered by the NWCL Offer Shareholders and the NWCL Optionholders, respectively, shall be irrevocable and cannot be withdrawn, except in the circumstances set out in this paragraph and the paragraph below. Note that Rule 17 of the Takeovers Code provides that an acceptor of any of the Offers shall be entitled to withdraw his acceptance after twenty-one (21) days from the first Closing Date (being Monday, 21 March 2016) if the Share Offer has not by then become unconditional as to acceptances and up to the earlier of such time as the Share Offer becomes or is declared unconditional as to acceptances and 4:00 p.m. on the 60th day from the date of despatch of this Composite Document (being Wednesday, 27 April 2016 (or the date beyond which the Offeror has stated that the Offers will not be extended, if applicable)).

Under Rule 19.2 of the Takeovers Code, if the Offeror is unable to comply with the requirements set out in the section headed ‘‘Announcements’’ above, the Executive may require that the holders of Offer Shares and NWCL Options who have tendered acceptances to the relevant Offers be granted a right of withdrawal on terms that are acceptable to the Executive until the requirements set out in that section are met.

7 HONG KONG STAMP DUTY

Seller’s ad valorem stamp duty at a rate of 0.1% of the market value of the Offer Shares or consideration payable by the Offeror in respect of the relevant acceptances of the Share Offer, whichever is higher (rounded up to the nearest HK$1.00), will be deducted from the amount payable to the relevant NWCL Offer Shareholder on acceptance of the Share Offer. The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the accepting NWCL Offer Shareholders in connection with the acceptance of the Share Offer and the transfer of the Offer Shares.

No stamp duty is payable in connection with the acceptances of the Option Offer and the cancellation of the NWCL Options.

8 GENERAL

(a) All communications, notices, Form(s) of Acceptance, the relevant share certificate(s), transfer receipt(s), document(s) of title or entitlement in respect of the NWCL Options and/or documentary evidence of authority (and/or any satisfactory indemnity or indemnities required in respect thereof) if delivered by or sent to or from the NWCL Offer Shareholders or the NWCL Optionholders or their designated agents by post, shall be posted at their own risk, and none of NWD, the Offeror, NWCL, HSBC and any of their respective directors, the Registrar and other parties involved in the Offers and any of their respective agents accepts any liability for any loss or delay in postage or any other liabilities that may arise as a result thereof.

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(b) The provisions set out in the Form(s) of Acceptance form part of the terms and conditions of the Offers.
(c) The accidental omission to despatch this Composite Document and/or Form(s) of Acceptance or any of them to any person to whom the Offers are made will not invalidate the Offers in any way.
(d) The Offers are, and all acceptances will be, governed by and construed in accordance with the laws of Hong Kong.
(e) Due execution of the Form(s) of Acceptance will constitute an authority to the Offeror, HSBC or such person or persons as the Offeror may direct to complete, amend and execute any document on behalf of the person or persons accepting the Offers and to do any other act that may be necessary or expedient for the purposes of vesting in the Offeror, or such person or persons as it may direct, the Offer Shares and/or cancelling the NWCL Options in respect of which such person or persons has/have accepted the Offers.
(f) Subject to the Offers becoming or being declared unconditional in all respects, acceptance of the Offers by any person will be deemed to constitute a representation and warranty by such person or persons to:
(i) NWD, the Offeror, NWCL and HSBC, that the Offer Shares sold by such person or persons to the Offeror are free from all rights of pre-emption, options, liens, claims, equities, charges, encumbrances and any other third party rights of any nature and together with all rights attached to them as at the Closing Date or subsequently becoming attached to them, including the right to receive in full all dividends and other distributions, if any, declared, made or paid on or after the Closing Date; and
(ii) NWD, the Offeror, NWCL and their respective advisers, including HSBC, the financial adviser to NWD and the Offeror in respect of the Offers, that if such NWCL Offer Shareholder/NWCL Optionholder accepting the Share Offer/Option Offer is a citizen, resident or national of a jurisdiction outside Hong Kong, he/she has observed and is permitted under all applicable laws and regulations to which such overseas NWCL Offer Shareholder/NWCL Optionholder is subject to receive and accept the Share Offer/Option Offer and any revision thereof, and that he/she has obtained all requisite governmental, exchange control or other consents and made all registrations or filings required in compliance with all necessary formalities and regulatory or legal requirements, and has paid all issue, transfer or other taxes or other required payments payable by him/her in connection with such acceptance, surrender and/or cancellation in any jurisdiction, and that he/she has not taken or omitted to take any action which will or may result in NWD, the Offeror, NWCL or their respective advisers, including HSBC, the financial adviser to NWD and the Offeror, or any other person acting in breach of the legal or regulatory

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APPENDIX I

FURTHER TERMS OF THE OFFERS

requirements of any jurisdiction in connection with the Offers or his/her acceptance thereof and such acceptance, surrender and/or cancellation shall be valid and binding in accordance with all applicable laws and regulations.

(g) Under the terms of the Share Offer, the NWCL Offer Shares will be acquired with all rights attached thereto as at the Closing Date or which subsequently become attached thereto, including the right to receive in full all dividends and other distributions, if any, declared, made or paid, on or after the Closing Date and free from all rights of preemption, options, liens, claims, equities, charges, encumbrances and any other third party rights.
(h) Subject to the Share Offer becoming or being declared unconditional in all respects, the acceptance of the Option Offer by an NWCL Optionholder will result in the cancellation of those relevant NWCL Option, together with all rights attaching thereto.
(i) Reference to any of the Offers in this Composite Document and in the Form(s) of Acceptance shall include any extension and/or revision thereof.
(j) In making their decisions with regard to the Offers, the NWCL Offer Shareholders and the NWCL Optionholders should rely on their own examination of NWD, the Offeror, the NWCL Group and the terms of the Offers, including the merits and risks involved. The contents of this Composite Document, including any general advice or recommendation contained herein, together with the Form(s) of Acceptance shall not be construed as any legal or business advice on the part of NWCL, NWD, the Offeror and/ or HSBC. The NWCL Offer Shareholders and the NWCL Optionholders should consult their own professional advisers for professional advice.

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP

I. FINANCIAL SUMMARY

The following summary financial information for each of the three financial years ended 30 June 2013, 2014, 2015 and for the six months ended 31 December 2015 is extracted from the respective published audited consolidated financial statements of the NWCL Group as set forth in the annual reports for the years ended 30 June 2013, 2014, 2015 dated 25 September 2013 (pages 146 to 237), 23 September 2014 (pages 140 to 226) and 23 September 2015 (pages 154 to 246), respectively, and the unaudited interim results announcement dated 23 February 2016 of the NWCL Group.

The auditors of the Company did not issue any qualified opinion on the financial statements of the NWCL Group for any of the three years ended 30 June 2013, 2014 and 2015. There are no exceptional items because of size, nature or incidence of the NWCL Group for each of the three years ended 30 June 2013, 2014 and 2015.

In this appendix, references to ‘‘the Company’’ and ‘‘the Group’’ shall mean NWCL and the NWCL Group respectively.

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FINANCIAL INFORMATION OF THE NWCL GROUP

Summary Consolidated Income Statement

Continuing operations Revenues Cost of sales Gross profit Other income Other gains/(losses), net Changes in fair value of investment properties Selling expenses Administrative and other operating expenses Operating profit before finance costs Finance costs Share of results of associated companies and joint ventures Profit before taxation Taxation charge Profit/(loss) for the year/period from continuing operations Discontinued operation Gain on disposal of discontinued operation Loss for the year/period from discontinued operation Profit for the year/period	2013 (Note) HK$’000 16,153,872 (9,395,433)	Year ended 30 June Six months ended 31 December 2015 2014 2015 HK$’000 HK$’000 HK$’000 21,850,106 17,459,237 7,300,446 (12,770,039) (10,621,455) (4,931,422 9,080,067 6,837,782 2,369,024 1,359,585 733,019 234,641 (111,898) 68,973 (1,228,867 616,122 899,117 588,454 (737,786) (799,553) (451,795 (1,249,934) (1,400,936) (795,533 8,956,156 6,338,402 715,924 (311,314) (302,140) (145,777 462,277 386,153 (24,507 9,107,119 6,422,415 545,640 (4,167,156) (2,918,335) (857,327 4,939,963 3,504,080 (311,687 — — 768,894 (140,698) (34,033) (19,603 (140,698) (34,033) 749,291 4,799,265 3,470,047 437,604
	6,758,439 1,031,293 840,955 623,795 (550,200) (1,347,765)	9,080,067 1,359,585 (111,898) 616,122 (737,786) (1,249,934)
	7,356,517 (414,256) 964,636	8,956,156 (311,314) 462,277
	7,906,897 (3,051,541)	9,107,119 (4,167,156)
	4,855,356 — —	4,939,963 — (140,698)
	—	(140,698)
	4,855,356	4,799,265
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Six months
ended
Year ended 30 June 31 December
2013 2014 2015 2015
(Note)
HK$’000 HK$’000 HK$’000 HK$’000
Profit attributable to:
Equity holders of the Company
From continuing operations 4,616,314 4,779,389 3,347,164 (207,084)
From discontinued operation — (140,698) (34,033) 749,291
4,616,314 4,638,691 3,313,131 542,207
Non-controlling interests 239,042 160,574 156,916 (104,603)
4,855,356 4,799,265 3,470,047 437,604
Earnings per share
Basic earnings/(loss) per share
From continuing operations 53.32 cents 55.11 cents 38.53 cents (2.38) cents
From discontinued operation — (1.62) cents (0.39) cents 8.62 cents
53.32 cents 53.49 cents 38.14 cents 6.24 cents
Diluted earnings/(loss) per share
From continuing operations 53.29 cents 55.07 cents 38.51 cents (2.38) cents
From discontinued operation — (1.62) cents (0.39) cents 8.61 cents
53.29 cents 53.45 cents 38.12 cents 6.23 cents
Dividends 606,589 607,713 260,681 —
Dividends per share 7 cents 7 cents 3 cents —
Note: 2013 figures are not re-presented for discontinued operation.
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP

Summary Consolidated Statement of Financial Position

ASSETS Non-current assets Property, plant and equipment Investment properties Land use rights Intangible assets Properties held for development Associated companies and joint ventures Available-for-sale financial assets Current assets Properties under development Completed properties held for sale Hotel inventories, at cost Prepayments, debtors and other receivables Amounts due from related companies Cash and bank balances, unrestricted Assets of disposal groups classified as held for sale Non-current assets reclassified as held for sale Total assets	2013 HK$’000 3,430,117 19,928,241 621,096 1,940,241 17,350,847 12,914,943 108,457	As at 30 June As at 31 December 2015 2014 2015 HK$’000 HK$’000 HK$’000 4,763,887 5,831,924 5,241,850 21,971,592 24,684,353 22,677,651 703,901 720,144 577,501 1,895,952 91,030 123,417 18,182,575 19,741,250 13,751,920 14,309,144 15,598,108 14,700,228 85,147 735,860 4,004,215 61,912,198 67,402,669 61,076,782 21,091,110 17,671,570 16,387,630 8,977,146 19,885,358 14,408,004 4,002 4,102 3,915 10,881,917 11,275,453 6,948,748 577,025 301,943 212,227 17,351,595 15,773,665 18,130,524 58,882,795 64,912,091 56,091,048 — 2,112,780 22,343,211 131,138 — 1,262,217 59,013,933 67,024,871 79,696,476 120,926,131 134,427,540 140,773,258
	56,293,942	61,912,198
	20,449,013 7,093,274 4,551 13,817,090 851,225 19,337,202	21,091,110 8,977,146 4,002 10,881,917 577,025 17,351,595
	61,552,355 — —	58,882,795 — 131,138
	61,552,355	59,013,933
	117,846,297	120,926,131
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APPENDIX II

FINANCIAL INFORMATION OF THE NWCL GROUP

EQUITY Capital and reserves attributable to the Company’s equity holders Share capital Reserves Proposed final dividend Non-controlling interests Total equity LIABILITIES Non-current liabilities Long term borrowings Deferred tax liabilities Current liabilities Creditors and accruals Deposits received on sale of properties Amounts due to related companies Short term loans Current portion of long term borrowings Amounts due to non-controlling interests Taxes payable Liabilities of disposal groups classified as held for sale	2013 HK$’000 866,360 53,135,700 346,686	As at 30 June As at 31 December 2015 2014 2015 HK$’000 HK$’000 HK$’000 868,335 868,877 869,360 56,623,635 59,652,293 58,300,325 260,547 260,681 — 57,752,517 60,781,851 59,169,685 3,566,137 3,836,900 3,794,445 61,318,654 64,618,751 62,964,130 25,226,035 34,388,409 42,192,270 3,252,232 3,522,327 3,157,875 28,478,267 37,910,736 45,350,145 6,950,199 8,890,122 7,985,189 4,716,405 6,045,122 6,243,425 507,848 723,334 942,691 — 1,001,250 — 14,197,174 9,775,255 6,553,940 102,756 102,756 101,313 4,654,828 4,432,361 4,381,837 31,129,210 30,970,200 26,208,395 — 927,853 6,250,588 31,129,210 31,898,053 32,458,983
	54,348,746 3,354,883	57,752,517 3,566,137
	57,703,629	61,318,654
	30,957,581 2,839,705	25,226,035 3,252,232
	33,797,286	28,478,267
	6,819,852 9,041,851 838,710 543,038 5,501,711 103,192 3,497,028	6,950,199 4,716,405 507,848 — 14,197,174 102,756 4,654,828
	26,345,382 —	31,129,210 —
	26,345,382	31,129,210

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As at
As at 30 June 31 December
2013 2014 2015 2015
HK$’000 HK$’000 HK$’000 HK$’000
Total liabilities 60,142,668 59,607,477 69,808,789 77,809,128
Total equity and liabilities 117,846,297 120,926,131 134,427,540 140,773,258
Net current assets 35,206,973 27,884,723 35,126,818 47,237,493
Total assets less current liabilities 91,500,915 89,796,921 102,529,487 108,314,275
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APPENDIX II

FINANCIAL INFORMATION OF THE NWCL GROUP

II. (A) AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Set out below is financial information of the Group as extracted from the published audited financial statements of the Group for the year ended 30 June 2015.

Consolidated Income Statement

For the year ended 30 June 2015

Note
Continuing operations
Revenues
6
Cost of sales
Gross profit
Other income
7
Other gains/(losses), net
8
Changes in fair value of investment properties
17
Selling expenses
Administrative and other operating expenses
Operating profit before finance costs
9
Finance costs
10
Share of results of associated company and
joint ventures
Profit before taxation
Taxation charge
13
Profit for the year from continuing operations
Discontinued operation
Loss for the year from discontinued operation
24
Profit for the year
Profit attributable to:
Equity holders of the Company
From continuing operations
From discontinued operation
Non-controlling interests

2015
2014
HK$’000
HK$’000
17,459,237
21,850,106
(10,621,455)
(12,770,039
6,837,782
9,080,067
733,019
1,359,585
68,973
(111,898
899,117
616,122
(799,553)
(737,786
(1,400,936)
(1,249,934
6,338,402
8,956,156
(302,140)
(311,314
386,153
462,277
6,422,415
9,107,119
(2,918,335)
(4,167,156
3,504,080
4,939,963
(34,033)
(140,698
3,470,047
4,799,265
3,347,164
4,779,389
(34,033)
(140,698
3,313,131
4,638,691
156,916
160,574
3,470,047
4,799,265

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
2015 2014
Note HK$’000 HK$’000
Earnings per share 14
Basic
From continuing operations 38.53 cents 55.11 cents
From discontinued operation (0.39) cents (1.62) cents
38.14 cents 53.49 cents
Diluted
From continuing operations 38.51 cents 55.07 cents
From discontinued operation (0.39) cents (1.62) cents
38.12 cents 53.45 cents
Dividends 15 260,681 607,713
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2015
2015 2014
HK$’000 HK$’000
Profit for the year 3,470,047 4,799,265
Other comprehensive income:
Items that may be reclassified to profit or loss:
Translation differences (61,676) (564,599)
Share of other comprehensive income of
associated company and joint ventures 1,978 (83,077)
Other comprehensive income for the year (59,698) (647,676)
Total comprehensive income for the year 3,410,349 4,151,589
Total comprehensive income attributable to:
Equity holders of the Company 3,258,178 3,999,840
Non-controlling interests 152,171 151,749
3,410,349 4,151,589
Total comprehensive income attributable to equity
holders of the Company arising from:
Continuing operations 3,293,173 4,140,207
Discontinued operation (34,995) (140,367)
3,258,178 3,999,840
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APPENDIX II

FINANCIAL INFORMATION OF THE NWCL GROUP

Consolidated Statement of Financial Position As at 30 June 2015

Note
ASSETS
Non-current assets
Property, plant and equipment
16
Investment properties
17
Land use rights
18
Intangible assets
19
Properties held for development
21
Associated company and joint ventures
22
Available-for-sale financial assets
25
Current assets
Properties under development
27
Completed properties held for sale
28
Hotel inventories, at cost
Prepayments, debtors and other receivables
29
Amounts due from related companies
30
Cash and bank balances, unrestricted
26
Assets of disposal group classified as held for sale
24
Non-current assets reclassified as held for sale
23
Total assets
EQUITY
Capital and reserves attributable to the
Company’s equity holders
Share capital
31
Reserves
32
Proposed final dividend
32
Non-controlling interests
Total equity
– II-10 –

2015
2014
HK$’000
HK$’000
5,831,924
4,763,887
24,684,353
21,971,592
720,144
703,901
91,030
1,895,952
19,741,250
18,182,575
15,598,108
14,309,144
735,860
85,147
67,402,669
61,912,198
17,671,570
21,091,110
19,885,358
8,977,146
4,102
4,002
11,275,453
10,881,917
301,943
577,025
15,773,665
17,351,595
64,912,091
58,882,795
2,112,780
—
—
131,138
67,024,871
59,013,933
134,427,540
120,926,131
868,877
868,335
59,652,293
56,623,635
260,681
260,547
60,781,851
57,752,517
3,836,900
3,566,137
64,618,751
61,318,654

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
2015 2014
Note HK$’000 HK$’000
LIABILITIES
Non-current liabilities
Long term borrowings 33 34,388,409 25,226,035
Deferred tax liabilities 34 3,522,327 3,252,232
37,910,736 28,478,267
Current liabilities
Creditors and accruals 35 8,890,122 6,950,199
Deposits received on sale of properties 6,045,122 4,716,405
Amounts due to related companies 30 723,334 507,848
Short term loans 36 1,001,250 —
Current portion of long term borrowings 33 9,775,255 14,197,174
Amounts due to non-controlling interests 37 102,756 102,756
Taxes payable 38 4,432,361 4,654,828
30,970,200 31,129,210
Liabilities of disposal group classified
as held for sale 24 927,853 —
31,898,053 31,129,210
Total liabilities 69,808,789 59,607,477
Total equity and liabilities 134,427,540 120,926,131
Net current assets 35,126,818 27,884,723
Total assets less current liabilities 102,529,487 89,796,921
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Statement of Financial Position
As at 30 June 2015
2015 2014
Note HK$’000 HK$’000
ASSETS
Non-current asset
Subsidiaries 20 46,336,267 40,751,213
Current assets
Prepayments, debtors and other receivables 29 13,021 16,489
Amounts due from related companies 30 202,799 435,602
Cash and bank balances, unrestricted 26 4,148,864 5,241,629
4,364,684 5,693,720
Total assets 50,700,951 46,444,933
EQUITY
Capital and reserves attributable to the
Company’s equity holders
Share capital 31 868,877 868,335
Reserves 32 27,341,449 27,382,861
Proposed final dividend 32 260,681 260,547
Total equity 28,471,007 28,511,743
LIABILITIES
Non-current liability
Long term borrowings 33 20,261,349 10,860,351
Current liabilities
Creditors and accruals 35 177,881 188,222
Amounts due to related companies 30 — 27
Current portion of long term borrowings 33 1,727,678 6,823,029
Taxes payable 38 63,036 61,561
1,968,595 7,072,839
Total liabilities 22,229,944 17,933,190
Total equity and liabilities 50,700,951 46,444,933
Net current assets/(liabilities) 2,396,089 (1,379,119)
Total assets less current liabilities 48,732,356 39,372,094
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FINANCIAL INFORMATION OF THE NWCL GROUP

Consolidated Cash Flow Statement

For the year ended 30 June 2015

Note
Operating activities
Net cash generated from operations
41(a)
Tax paid
Net cash (used in)/from operating activities
Investing activities
Interest received
Dividend income from an available-for-sale
financial asset
Dividend income from joint ventures
Additions to property, plant and equipment,
land use rights and investment properties
Additions to available-for-sale financial assets
Increase in investments in associated company
and joint ventures
Decrease in investments in associated company
and joint ventures
Acquisition of subsidiaries
41(b)
Acquisition of additional interests in subsidiaries
Disposal of associated companies
Disposal of available-for-sale financial assets
Disposal of property, plant and equipment and
investment properties
Net cash used in investing activities
Financing activities
Interest paid
Increase in long term borrowings
Issue of notes
Repayment of long term borrowings
Repayment of bonds
Capital contribution from non-controlling interests
Issue of shares
Increase/(decrease) in short term loans
Repayment on advance from participating interest
Dividends paid
Dividends paid to non-controlling interests
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange differences on cash and cash equivalents
Cash and cash equivalents at end of the year
Analysis of cash and cash equivalents
Unrestricted cash and bank balances
26
Unrestricted cash and bank balances attributable to a
discontinued operation
24

2015
2014
HK$’000
HK$’000
762,133
3,733,208
(2,532,620)
(2,487,383
(1,770,487)
1,245,825
284,541
244,074
—
1,738
65,368
30,526
(3,111,936)
(2,569,492
(650,713)
—
(1,420,961)
(2,465,781
762,841
549,018
—
(364,223
—
(90,280
—
93,934
—
23,310
455,024
500,892
(3,615,836)
(4,046,284
(2,432,825)
(1,060,961
8,697,886
9,006,059
7,907,299
—
(5,618,961)
(5,543,262
(5,308,642)
—
—
132,758
17,284
59,320
1,001,250
(253,846
—
(523,611
(260,554)
(694,027
(232)
(23,560
4,002,505
1,098,870
(1,383,818)
(1,701,589
17,351,595
19,337,202
(29,091)
(284,018
15,938,686
17,351,595
15,773,665
17,351,595
165,021
—
15,938,686
17,351,595

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APPENDIX II

FINANCIAL INFORMATION OF THE NWCL GROUP

Consolidated Statement of Changes in Equity For the year ended 30 June 2015

Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company
Share capital HK$’000 868,335	Reserves HK$’000 56,884,182	Shareholders’ funds HK$’000 57,752,517
— —	(56,931) 1,978	(56,931) 1,978
— —	(54,953) 3,313,131	(54,953) 3,313,131
—	3,258,178	3,258,178
542 — — —	16,742 — 14,426 (260,554)	17,284 — 14,426 (260,554)
542
868,877	59,912,974	60,781,851

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FINANCIAL INFORMATION OF THE NWCL GROUP

Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company
Share capital HK$’000 866,360	Reserves HK$’000 53,482,386	Shareholders’ funds HK$’000 54,348,746
— —	(555,774) (83,077)	(555,774) (83,077)
— —	(638,851) 4,638,691	(638,851) 4,638,691
—	3,999,840	3,999,840
1,975 — — —	57,345 — 12,920 (694,027)	59,320 — 12,920 (694,027)
1,975 — —	(623,762) 25,718 —	(621,787) 25,718 —
1,975	(598,044)	(596,069)
868,335	56,884,182	57,752,517

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
New World China Land Limited (the ‘‘Company’’) and its subsidiaries (together the ‘‘Group’’) are principally
engaged in investment and development of property projects in the People’s Republic of China (the ‘‘PRC’’).
The Company is a limited liability company incorporated in the Cayman Islands. The address of its registered office
is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The address of its principal place of
business in Hong Kong is 9/F., New World Tower 1, 18 Queen’s Road Central, Hong Kong.
The Company’s shares are listed on The Stock Exchange of Hong Kong Limited.
The immediate and ultimate holding company is New World Development Company Limited (‘‘NWD’’), a company
incorporated and listed in Hong Kong.
On 3 July 2015, the Company announced that the Group had entered into the sale and purchase agreement with
Chow Tai Fook Enterprises Limited, the substantial shareholder of NWD, to sell its entire interest in New World
Hotel Management (BVI) Limited, its subsidiaries and a joint venture (collectively referred to as the ‘‘Disposal
Group’’) and the assignment and transfer of the shareholder’s loan for an aggregate consideration of
HK$1,963,000,000, receivable in cash (the ‘‘Disposal’’).
Analysis of the results, cash flows, assets and liabilities of the Disposal Group is presented in note 24.
These financial statements have been approved for issue by the Board of Directors on 23 September 2015.
2. BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting
Standards (‘‘HKFRS’’) issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’) and the
applicable requirements of the predecessor Hong Kong Companies Ordinance (Cap. 32). The consolidated financial
statements have been prepared under the historical cost convention, as modified by the revaluation of investment
properties and available-for-sale financial assets which have been measured at fair value.
The preparation of consolidated financial statements in conformity with HKFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the consolidated financial statements, are disclosed in note 5 below.
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(a) Adoption of revised standards, amendments to standards and interpretation

The Group has adopted the following revised standards, amendments to standards and interpretation which are relevant to the Group’s operations and are mandatory for the financial year ended 30 June 2015:

Amendments to HKAS 19 (Revised 2011) Employee Benefits: Defined Benefit Plans — Employee Contributions HKAS 32 (Amendment) Financial Instruments: Presentation — Offsetting Financial Assets and Financial Liabilities HKAS 36 (Amendment) Recoverable Amount Disclosures for Non-Financial Assets HKAS 39 (Amendment) Novation of Derivatives and Continuation of Hedge Accounting HK (IFRIC)-Int 21 Levies Amendments to HKFRS 10, HKFRS 12 Investment Entities and HKAS 27 (Revised 2011) Annual Improvements Project Annual Improvements 2010–2012 Cycle Annual Improvements Project Annual Improvements 2011–2013 Cycle

The adoption of the revised standards, amendments to standards and interpretation does not have a significant impact on the results and financial position of the Group.

(b) Standards and amendments to standards which are not yet effective

The following new or revised standards and amendments to standards are mandatory for the accounting periods beginning on or after 1 July 2015 or later periods but which the Group has not early adopted:

Effective for the year ending 30 June 2016:

HKFRS 14 Regulatory Deferral Accounts Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint Operations Amendments to HKFRS 10, HKFRS 12 Investment Entities: Applying the Consolidation Exception and HKAS 28 (Revised 2011) Amendments to HKFRS 10 and HKAS 28 Sales or Contribution of Assets between an Investor and its Associate or Joint Venture Amendments to HKAS 1 Disclosure initiative Amendments to HKAS 16 and HKAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation Amendments to HKAS 27 Equity Method in Separate Financial Statements Annual Improvements Project Annual Improvements 2012–2014 Cycle Effective for the year ending 30 June 2017 or after: HKFRS 9 (2014) Financial Instruments HKFRS 15 Revenue from Contracts with Customers

The Group has already commenced an assessment of the impact of these new or revised standards and amendments to standards, certain of which may be relevant to the Group’s operation and may give rise to changes in accounting policies, changes in disclosures and remeasurement of certain items in the financial statements.

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
3. PRINCIPAL ACCOUNTING POLICIES
The principal accounting policies adopted for the preparation of these financial statements, which have been
consistently applied to all the years presented, unless otherwise stated, are set out below:
(a) Consolidation
The consolidated financial statements incorporate the financial statements of the Company and all of its
subsidiaries made up to 30 June.
(i) Subsidiaries
A subsidiary is an entity (including a structured entity) over which the Group has control. The Group
controls an entity when the Group has power over an entity, is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect these returns through its power
over the entity. Subsidiaries are consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred,
the liabilities incurred to the former owner of the acquiree and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. On the acquisition by acquisition basis, the Group
recognises a non-controlling interest in the acquiree either at fair value or at the non-controlling
interest’s proportionate share of the acquiree’s net assets. If the business combination is achieved in
stages, the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the
acquisition date through profit or loss.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree
and the fair value of any previous equity interest in the acquiree at the date of acquisition over the fair
value of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of
the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised
directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value
at the date when control is lost, with the change in carrying amount recognised in profit or loss. The
fair value is the carrying amount for the purposes of subsequently accounting for the retained interest
as associated companies, joint ventures or financial assets. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
The Company’s investments in subsidiaries are stated at cost less provision for impairment losses. The
results of subsidiaries are accounted for by the Company on the basis of dividend received and
receivable.
– II-18 –
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
(ii) Joint ventures
Investments in joint arrangements are classified either as joint operations or joint ventures, depending
on the contractual rights and obligations each investor has rather than the legal structure of the joint
arrangement. The Group has assessed the nature of its joint arrangements and determined them to be
joint ventures. Joint ventures are accounted for using the equity method.
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and
adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and
movements in other comprehensive income based on the relevant profit sharing ratios which vary
according to the nature of the joint ventures set out as follows:
Equity joint ventures/joint ventures in wholly foreign owned enterprises
Equity joint ventures/joint ventures in wholly foreign owned enterprises are joint ventures in respect of
which the capital contribution ratios of the venturers are defined in the joint venture contracts and the
profit sharing ratios and share of net assets of the venturers are in proportion to the capital contribution
ratios.
Co-operative joint ventures
Co-operative joint ventures are joint ventures in respect of which the profit sharing ratios of the
venturers and share of net assets upon the expiration of the joint venture periods are not in proportion
to their capital contribution ratios but are as defined in the joint venture contracts.
Joint venture companies limited by shares
Joint venture companies limited by shares are limited liability companies in respect of which each
shareholder’s beneficial interests therein is in accordance with the amount of the voting share capital
held thereby.
The Group’s investments in joint ventures include goodwill identified on acquisition. Upon the
acquisition of the ownership interest in a joint venture, any difference between the cost of the joint
venture and the group’s share of the net fair value of the joint venture’s identifiable assets and liabilities
is accounted for as goodwill.
The Group’s investment in joint venture include the loans and advances to the joint venture which, in
substance, form part of the Group’s investment in the joint venture. The loans and advances to the joint
venture are a form of commercial arrangement between the parties to the joint venture to finance the
development of projects and viewed as a means by which the Group invests in the relevant projects.
These loans and advances have no fixed repayment terms and will be repaid when the relevant joint
venture has surplus cash flow.
When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint ventures
(which includes any long-term interests that, in substance, form part of the Group’s investment in the
joint ventures), the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the joint ventures.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent
of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures
have been changed where necessary to ensure consistency with the policies adopted by the Group.
– II-19 –
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
(iii) Associated companies
An associated company is a company other than a subsidiary and a joint venture, in which the Group
has significant influence, but not control, through representatives on the board of directors.
Investments in associated companies are accounted for by the equity method of accounting and are
initially recognised at cost. The Group’s investments in associated companies include goodwill (net of
any accumulated impairment loss) identified on acquisition. The interests in associated companies also
include long term interest that, in substance, form part of the Group’s investment in associated
companies.
The share of post-acquisition profits or losses of associated companies is recognised in the consolidated
income statement, and the share of post-acquisition movements in other comprehensive income is
recognised in the consolidated statement of comprehensive income with a corresponding adjustment to
the carrying amount of the investment. When the share of losses in an associated company equals or
exceeds its interest in the associated company, including any other unsecured receivables, the Group
does not recognise further losses, unless it has incurred legal and constructive obligations or made
payments on behalf of the associated company.
Unrealised gains on transactions between the Group and its associated companies are eliminated to the
extent of the Group’s interest in the associated companies. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the asset transferred. For equity accounting
purpose, accounting policies of associated companies have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(iv) Transactions with non-controlling interests
Non-controlling interests is the equity in a subsidiary which is not attributable, directly or indirectly, to
a parent. The Group treats transactions with non-controlling interests (namely, acquisitions of additional
interests and disposals of partial interests in subsidiaries that do not result in a loss of control) as
transactions with equity owners of the Group, instead of transactions with parties not within the Group.
For purchases of additional interests in subsidiaries from non-controlling shareholders, the difference
between any consideration paid and the relevant share acquired of the carrying value of net assets of
the subsidiary is recorded in equity. Gains or losses on disposals of partial interests to non-controlling
interests are also recorded in equity.
(b) Intangible assets
(i) Goodwill
Goodwill arising on acquisition of subsidiaries is included in intangible assets. Goodwill represents the
excess of the cost of an acquisition over the fair value of the attributable share of the net identifiable
assets of the acquired subsidiaries, associated companies or joint ventures and fair value of the non-
controlling interest in the acquiree. Goodwill on acquisitions of joint ventures and associated companies
is included in interests in joint ventures and associated companies. Goodwill is tested annually for
impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are
not reversed. Gains and losses on the disposal of all or part of an entity include the carrying amount of
goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of testing for impairment. The allocation
is made to those cash-generating units or groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose.
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
(ii) Trademarks
Separately acquired trademarks are shown at historical cost. Trademarks acquired in a business
combination are recognised at fair value at the date of acquisition. Trademarks with indefinite life are
carried at cost less impairment and are not amortised.
(iii) Hotel management contracts
Separately acquired hotel management contracts are shown at historical cost. Hotel management
contracts acquired in a business combination are recognised at fair value at the date of acquisition.
Hotel management contracts have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line method to allocate the cost of hotel
management contracts over their estimated useful lives of 20 years.
(iv) Customer relationships
Customer relationships acquired in a business combination are recognised at fair value at the date of
acquisition. Customer relationships have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line method to allocate the cost of customer
relationships over their estimated useful lives of 20 years.
(v) Process, technology and know-how
Process, technology and know-how acquired in a business combination are recognised at fair value at
the date of acquisition. Process, technology and know-how have a finite useful life and are carried at
cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate
the cost of process, technology and know-how over their estimated useful lives of 10 years.
(c) Non-current assets or disposal groups reclassified as held for sale and discontinued operation
Non-current assets or disposal groups are reclassified as held for sale when their carrying amount is to be
recovered principally through a sale transaction and a sale is considered highly probable. They are stated at
the lower of carrying amount and fair value less costs to sell if their carrying amount is to be recovered
principally through a sale transaction rather than through continuing use. Investment properties classified as
non-current assets held for sale are stated at fair value at the end of the reporting period.
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can
be clearly distinguished from the rest of the Group and which represents a separate major line of business.
When an operation is classified as discontinued, a single amount is presented in the income statement, which
comprises the post-tax profit or loss of the discontinued operation and the post-tax gain or loss recognised on
the measurement to fair value less costs to sell, or on the disposal, of the assets or disposal groups
constituting the discontinued operation.
(d) Assets under leases
(i) Finance leases
Leases that transfer to the Group substantially all the risks and rewards of ownership of assets are
accounted for as finance leases. Finance leases are capitalised at the lease’s commencement date at the
lower of the fair value of the leased assets and the present value of the minimum lease payments. Each
lease payment is allocated between the liability and finance charges so as to achieve a constant rate on
the finance balance outstanding. The corresponding rental obligations, net of finance charges, are
– II-21 –
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
included in liabilities. The finance charges are charged to the income statement over the lease periods
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
Assets held under finance leases are depreciated on the basis described in note 3(g)(ii) below.
(ii) Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor
are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor), are charged to the income statement on a straight-line basis over the period of the
lease.
(e) Land use rights
The upfront prepayments made for the land use rights held under operating lease are expensed in the income
statement on a straight-line basis over the period of the lease or when there is impairment, the impairment is
expensed in the income statement.
(f) Investment properties
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by
the companies in the Group, is classified as investment property.
Investment property also includes property that is being constructed or developed for future use as investment
property.
Investment property comprises land held under operating leases and buildings held under finance leases. Land
held under operating leases are classified and accounted for as investment property when the rest of the
definition of investment property is met. The operating lease is accounted for as if it was a finance lease.
Investment property is measured initially at its cost, including related transaction costs. After initial
recognition, investment property is carried at fair value. Fair value is determined by professional qualified
valuers on an open market value basis at the end of each reporting period. Changes in fair value are
recognised in the income statement.
Subsequent expenditure is included in the carrying amount of the asset only when it is probable that future
economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured
reliably. All other repairs and maintenance costs are expensed in the consolidated income statement during the
financial period in which they are incurred.
Where fair value of property that is being constructed or developed as investment property is not reliably
determinable, it is measured at cost until either its fair value becomes reliably determinable or construction is
completed (whichever is earlier).
If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, and its
fair value at the date of reclassification becomes its cost for accounting purposes.
If a property becomes an investment property because its use has changed, any difference resulting between
the carrying amount and the fair value of this property at the date of transfer is recognised in equity as a
revaluation of property, plant and equipment. However, if the fair value of the property at the date of transfer
which results in a reversal of the previous impairment loss, the write-back is recognised in the consolidated
income statement.
– II-22 –
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
(g) Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of assets. Subsequent
costs are included in the carrying amount of the assets or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the asset will flow to the Group and the cost
of the asset can be measured reliably. The carrying amount of the replaced part is derecognised. All other
repair and maintenance costs are charged to the income statement during the financial period in which they
are incurred. The carrying amount of an asset is written down immediately to its recoverable amount if the
carrying value of an asset is greater than its estimated recoverable amount.
(i) Assets under construction
All direct costs relating to the construction of property, plant and equipment, including borrowing costs
during the construction period are capitalised as the costs of the assets.
(ii) Depreciation
No depreciation is provided on assets under construction until such time when the relevant assets are
completed and available for intended use.
Depreciation of other property, plant and equipment is calculated to allocate their cost to their
estimated residual values over their estimated useful lives using the straight-line method. Estimated
useful lives are summarised as follows:
Other properties 20–40 years
Leasehold improvements 5–10 years or over the relevant lease period
Furniture, fixtures and equipment 5–8 years
Motor vehicles 3 years
The residual values and useful lives of the assets are reviewed, and adjusted if appropriate, at the end
of each reporting period.
(iii) Gain or loss on disposal
The gain or loss on disposal of property, plant and equipment is determined by comparing the
difference between the net sales proceeds and the carrying amount of the relevant asset, and is
recognised in the income statement.
(h) Impairment of investments in subsidiaries, joint ventures, associated companies and non-financial assets
Non-financial assets that have an indefinite useful life, for example goodwill, or have not yet been available
for use are not subject to amortisation and are tested annually for impairment. Assets are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. The carrying amount of an asset is written down immediately to its recoverable amount if the
carrying amount of the asset is greater than its estimated recoverable amount. An impairment loss is
recognised in the income statement for the amount by which the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the higher of its fair value less costs of disposal and value in
use. For the purpose of assessing impairment, assets are grouped as cash-generating units for which there are
separately identifiable cash flows. Non-financial assets other than goodwill that suffered impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
– II-23 –
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Impairment testing of the investments in subsidiaries, joint ventures or associated companies is required upon
receiving dividends from these investments if the dividend exceeds the total comprehensive income of the
subsidiary, joint venture or associated company in the period the dividend is declared or if the carrying
amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated
financial statements of the investee’s net assets including goodwill.
(i) Investments
The Group classifies its investments in the categories of financial assets at fair value through profit or loss,
loans and receivables, held-to-maturity investments, and available-for-sale financial assets. Management
determines the classification of its investments at initial recognition depending on the purpose for which the
investments are acquired.
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading and those
designated as at fair value through profit or loss at inception under certain circumstances. A financial
asset is classified in this category if acquired principally for the purpose of selling in the short-term or
if so designated by management. Assets in the category are classified as current assets are expected to
be settled within 12 months; otherwise, they are classified as non-current.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They arise when the Group provides money, goods or services directly
to a debtor with no intention of trading the receivable and are included in current assets, except for
those with maturities of more than twelve months after the end of the reporting period, which are
classified as non-current assets.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturities that management has the positive intention and ability to hold to maturity. Held-to-
maturity financial assets are included in non-current assets, except for those with maturities of less than
twelve months from the end of the reporting period, which are classified as current assets.
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless management
intends to dispose of the investment within twelve months from the end of the reporting period.
Regular way purchases and sales of financial assets are recognised on trade-date, which is the date on which
the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus
transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried
at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in
the income statement. Financial assets are derecognised when the rights to receive cash flows from the
investments have expired or have been transferred and the Group has transferred substantially all risks and
rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently
carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost
using the effective interest method.
– II-24 –
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Gains and losses arising from changes in the fair value of the financial assets at fair value through profit or
loss are included in the income statement in the financial period in which they arise. Changes in the fair value
of available-for-sale financial assets are recognised in other comprehensive income. When available-for-sale
financial assets are sold, the accumulated fair value adjustments are included in the income statement as gains
or losses from financial assets. Changes in the fair value of monetary financial assets denominated in a
foreign currency and classified as available-for-sale are analysed between translation differences resulting
from changes in amortised cost of the financial asset and other changes in the carrying amount of the financial
asset. The translation differences on monetary financial assets are recognised in the income statement;
translation differences on non-monetary financial assets are recognised in other comprehensive income.
The fair values of quoted investment are based on current bid prices. If the market for a financial asset is not
active and for unlisted financial assets, the Group establishes fair value by using valuation techniques. These
include the use of recent arm’s length transactions, reference to other instruments that are substantially the
same, discounted cash flow analysis and option pricing models, making maximum use of market inputs and
relying as little as possible on entity-specific inputs.
(j) Impairment of financial assets
The Group assesses at the end of each reporting period whether there is objective evidence that a financial
asset or a group of financial assets is impaired. In the case of equity instruments classified as available-for-
sale financial assets, a significant or prolonged decline in the fair value of the asset below its cost is
considered in determining whether the assets are impaired. In case of debt instruments, objective evidence of
impairment includes significant financial difficulty of the issuer or counterparty; default or delinquency in
interest or principal payments; or it becoming probable that the borrower will enter bankruptcy or financial re-
organisation.
If any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the
difference between the acquisition cost and the current fair value, less any impairment loss on that financial
asset previously recognised in the income statement, is removed from equity and recognised in the income
statement. Impairment losses recognised in the income statement on equity instruments classified as available-
for-sale are not reversed through the income statement.
(k) Properties held for/under development
Properties held for/under development comprise prepayments for land use rights, development expenditure and
borrowing costs capitalised, and are carried at the lower of cost and net realisable value. Properties under
development included in the current assets are expected to be realised in, or is intended for sale in the Group’s
normal operating cycle.
(l) Completed properties held for sale
Completed properties held for sale are initially measured at the carrying amount of the property at the date of
reclassification from properties under development. Completed properties held for sale are carried at the lower
of cost and net realisable value. Net realisable value is determined by reference to management estimates
based on prevailing market conditions.
(m) Hotel inventories
Hotel inventories primarily comprise food, beverages and operating supplies and are stated at the lower of
cost and net realisable value. Cost is calculated on the weighted average basis. Net realisable value is
determined on the basis of anticipated sales proceeds less estimated selling expenses.
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(n) Contracts in progress
Contracts in progress comprise contract cost incurred, plus recognised profits (less recognised losses) less
progress billing. Cost comprises materials, direct labour and overheads attributable to bringing the work in
progress to its present condition.
Variations in contract work, claims and incentive payments are included in contract revenue to the extent that
may have been agreed with the customer and are capable of being reliably measured.
The Group uses the ‘‘percentage-of-completion method’’ to determine the appropriate amount to recognise in a
given period. The stage of completion is measured by reference to the contract costs incurred up to the end of
the reporting period as a percentage of total estimated costs for each contract. Costs incurred in the year in
connection with future activity on a contract are excluded from contract costs in determining the stage of
completion.
(o) Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment, which is established when there is objective
evidence that the Group will not be able to collect all amounts due according to the original terms of
receivable. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and
default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount
of the provision is the difference between the carrying amount of the assets and the present value of estimated
future cash flows, discounted at the original effective interest rate. The carrying amount of the assets is
reduced through the use of an allowance account, and the amount of the provision is recognised in the income
statement. When a receivable is uncollectible, it is written off against the allowance account for receivables.
Subsequent recoveries of amounts previously written off are credited in the income statement.
(p) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are
shown within borrowings under current liabilities in the statement of financial position.
(q) Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(r) Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are classified as current liabilities if payment is due within one year
or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current
liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
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(s) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has
been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a whole. A provision is recognised even if the
likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest
expense.
(t) Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events and whose existence will only be
confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the Group. It can also be a present obligation arising from past events that is not recognised
because it is not probable that outflow of economic resources will be required or the amount of obligation
cannot be measured reliably.
A contingent liability, other than that assumed in a business combination, is not recognised but is disclosed in
the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
probable, it will then be recognised as a provision.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the
Group.
A contingent asset is not recognised but is disclosed in the notes to the financial statements when an inflow of
economic benefits is probable. When inflow is virtually certain, an asset is recognised.
(u) Current and deferred taxation
The current taxation is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the Group, joint ventures and associated companies operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation and establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred taxation is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill, the
deferred taxation is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred taxation is determined using tax rates and laws that have been enacted or
substantively enacted by the end of the reporting period and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
Deferred taxation assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
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Deferred taxation is provided on temporary differences arising on investments in subsidiaries, joint ventures
and associated companies, except where the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred taxes assets and liabilities relate to income taxes
levied by the same taxation authority on either the taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
(v) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the consolidated income statement over the period of the borrowings using
the effective interest method or capitalised on the basis set out in note 3(w), where appropriate.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least twelve months after the end of the reporting period.
(w) Borrowing costs
Borrowing costs incurred for the construction of any qualifying assets are capitalised during the period of
time that is required to complete and prepare the asset for its intended use. Investment income earned on the
temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation. Other borrowing costs are expensed as incurred.
(x) Employee benefits
(i) Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is
made for the estimated liability for annual leave as a result of services rendered by employees up to the
end of the reporting period. Employee entitlements to sick leave and maternity leave are not recognised
until the time of leave.
(ii) Bonus plans
Provision for bonus plans are recognised when the Group has a present legal or constructive obligation
as a result of services rendered by employees and a reliable estimate of the obligation can be made.
(iii) Defined contribution plans
The Group’s contributions to defined contribution retirement plans, including the Mandatory Provident
Fund Scheme and employee pension schemes established by municipal government in the PRC are
expensed as incurred. Contributions are reduced by contributions forfeited by those employees who
leave the schemes prior to vesting fully in the contributions, where applicable.
(iv) Equity-settled share-based compensation
The fair value of the employee services received in exchange for the grant of the options is recognised
as an expense. The total amount to be expensed over the vesting period is determined by reference to
the fair value of the options granted at the date of grant, excluding the impact of any non-market
vesting conditions. At the end of each reporting period, the Group revises its estimates of the number
of options that are expected to vest. It recognises the impact of the revision of original estimates, if
any, in the income statement, with a corresponding adjustment to equity.
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The proceeds received net of any directly attributable transaction costs are credited to share capital
(nominal value) and share premium when the options are exercised.
On lapse of share option according to the plan, corresponding amount recognised in share option
reserve is transferred to retained profits.
The grant by the Company of options over its equity instruments to the employees of subsidiary
undertakings in the Group is treated as a capital contribution. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an
increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent
entity accounts.
(y) Foreign currencies
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the ‘‘functional currency’’).
The Company’s functional currency is Renminbi. The consolidated financial statements are presented in
Hong Kong dollars to facilitate analysis of financial information by the holding company.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation of monetary assets and liabilities denominated
in foreign currencies at the exchange rates ruling at the end of the reporting period are recognised in
the income statement.
Translation differences on financial assets held at fair value through profit or loss is reported as part of
the fair value gain or loss. Translation differences on non-monetary available-for-sale financial assets
are included in equity.
(iii) Group companies
The results and financial position of all the Group’s entities that have a functional currency different
from the presentation currency are translated into the presentation currency as follows:
(1) assets and liabilities for each statement of financial position presented are translated at the
closing rate at the date of the end of that reporting period;
(2) income and expenses for each income statement are translated at average exchange rates; and
(3) all resulting exchange differences are recognised as a separate component of equity.
On the disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of
control over a subsidiary that includes a foreign operation, all of the exchange differences accumulated
in equity in respect of that operation attributable to the equity holders of the Company are reclassified
to profit or loss.
In the case of a partial disposal that does not result in the Group losing control over a subsidiary that
includes a foreign operation, the proportionate share of accumulated exchange differences are
reattributed to non-controlling interests and are not recognised in profit or loss. For all other partial
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disposals (that is, reductions in the Group’s ownership interest in associated companies or joint ventures
that do not result in the Group losing significant influence or joint control) the proportionate share of
the accumulated exchange difference is reclassified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets
and liabilities of the foreign entity and translated at the exchange rate ruling at the end of reporting
period.
(z) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the executive committee that makes
strategic decisions.
(aa) Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services
rendered in the ordinary course of the Group’s activities. Revenue is shown net of returns, rebates and
discounts, allowances for credit and other revenue reducing factors.
Revenue is recognised when the amount can be reliably measured, it is probable that future economic benefits
will flow to the Group and specific criteria for each of the activities have been met. Estimates are based on
historical results, taking into consideration the type of customers, the type of transactions and the specifics of
each arrangement.
(i) Property sales
Revenue from sale of properties is recognised when the risks and rewards of the properties are passed
to the purchasers. Deposits and instalments received on properties sold prior to their completion are
included under current liabilities.
(ii) Rental income
Rental income from properties leased out under an operating lease is recognised in the income
statement on a straight-line basis over the lease term.
Contingent rents, such as turnover rents, rent reviews and indexation, are recorded as income in the
periods in which they are earned. Rent reviews are recognised when such reviews have been agreed
with tenants.
(iii) Hotel operation income
Hotel operation income is recognised when services are rendered.
(iv) Property management services fee income
Property management services fee income is recognised when services are rendered.
(v) Project management fee income
Project management fee income is recognised when services are rendered.
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(vi) Hotel management services fee income
Hotel management services fee income is recognised when services are rendered.
(vii) Interest income
Interest income is recognised on a time proportion basis using the effective interest method to the
extent that interest income can be reliably measured and it is probable that future economic benefit will
flow to the Group.
(viii) Construction income
Revenue from construction service contracts is recognised using the percentage of completion method
when the contracts have progressed to a stage where an outcome can be estimated reliably. Revenue
from construction service contracts is measured by reference to the proportion of costs incurred for
work performed to the end of the reporting period as compared to the estimated total costs to
completion. Anticipated losses on contracts are fully provided when it is probable that total contract
costs will exceed total contract revenue. When the outcome of construction service contract cannot be
estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are
likely to be recoverable.
(ix) Trademark fee income
Trademark fee income is recognised on an accrual basis in accordance with the relevant agreements.
(x) Dividend income
Dividend income is recognised when the right to receive payment is established.
(ab) Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial statements in
the period in which the dividends are approved by the Company’s shareholders/directors.
(ac) Insurance contracts
The Group assesses at the end of each reporting period the liabilities under its insurance contracts using
current estimates of future cash flows. If the carrying amount of the relevant insurance liabilities is less than
the best estimate of the expenditure required to settle the relevant insurance liabilities at the end of the
reporting period, the Group recognises the entire difference in the income statement. These estimates are
recognised only when the outflow is probable and the estimates can be reliably measured.
The Group regards its financial guarantee contracts in respect of mortgage facilities provided to certain
property purchasers and guarantees provided to its related parties as insurance contracts.
4. FINANCIAL RISK MANAGEMENT AND FAIR VALUE ESTIMATION
The Group conducts its operation in the PRC and accordingly is subject to special consideration and risk exposure
under a unique political, economic and legal environment. The Group’s activities expose it to a variety of financial
risks and the Group’s overall risk management policy seeks to minimise potential adverse effects on the Group’s
financial performance. The Group continues to control financial risk in a conservative approach to safeguard the
interest of shareholders.
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(a) Market risk
(i) Foreign exchange risk
The Group’s operations are mainly conducted in the PRC. Entities within the Group are exposed to
foreign exchange risk from future commercial transactions and monetary assets and liabilities that are
denominated in a currency that is not the entity’s functional currency.
The Group currently does not have a foreign currency hedging policy. It manages its foreign currency
risk by closely monitoring the movement of the foreign currency rates and will consider to enter into
forward foreign exchange contracts to reduce the exposure should the need arises.
At 30 June 2015, the Group’s entities with functional currency of Renminbi had net monetary liabilities
denominated in Hong Kong dollar of HK$15,728,850,000 (2014: HK$13,412,391,000) and net
monetary liabilities denominated in United States dollar of HK$7,244,443,000 (2014: net monetary
assets HK$1,028,871,000) respectively. If Hong Kong dollar and United States dollar had strengthened/
weakened by 5% against Renminbi respectively with all other variables unchanged, the Group’s profit
before taxation would have been HK$1,148,665,000 (2014: HK$619,176,000) lower/higher
respectively.
This sensitivity analysis ignores any offsetting foreign exchange factors and has been determined
assuming that the change in foreign exchange rates had occurred at the end of the reporting period. The
stated change represents management’s assessment of reasonably possible changes in foreign exchange
rates at the end of the reporting period. Currency risks as defined by HKFRS 7 arise on account of
monetary assets and liabilities being denominated in a currency that is not the functional currency;
differences resulting from the translation of financial statements into the Group’s presentation currency
are not taken into consideration.
(ii) Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing
liabilities and assets. Cash flow interest rate risk is the risk that changes in market interest rates will
impact cash flows arising from variable rate financial instruments. The Group’s interest bearing assets
mainly include bank deposits. The Group’s floating rate borrowings will be affected by fluctuation of
prevailing market interest rates and will expose the Group to cash flow interest rate risk. Fair value
interest rate risk is the risk that the value of a financial asset or liability will fluctuate because of
changes in market interest rates. The Group’s borrowings issued at fixed rates expose the Group to fair
value interest rate risk.
To mitigate the risk, the Group has maintained fixed and floating rate debts. The level of fixed rate
debt for the Group is decided after taking into consideration the potential impact of higher interest rates
on profit or loss, interest cover and the cash flow cycles of the Group’s businesses and investments.
If interest rates had been 100 basis points higher/lower with all other variables held constant, the
Group’s profit before taxation would have been HK$2,672,000 (2014: HK$8,262,000) higher/lower.
The sensitivity analysis has been determined assuming that the change in interest rates had occurred
throughout the year and had been applied to the exposure to interest rate risk for financial instruments
in existence at the end of the reporting period. The 100 basis point increase or decrease represents
management’s assessment of a reasonably possible change in those interest rates which have the most
impact on the Group at the end of the reporting period. Changes in market interest rates affect the
interest income or expense of non-derivative variable-interest financial instruments. As a consequence,
they are included in the calculation of profit before taxation sensitivities.
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(b) Credit risk
The credit risk of the Group and the Company mainly arises from deposits with bank, trade and other
receivables and balances receivable from related companies. The exposures to these credit risks are closely
monitored on an ongoing basis by established credit policies in each of its core businesses.
Deposits are mainly placed with high-credit-quality financial institutions. Trade receivables and amounts due
from related companies mainly include receivables from sale and lease of properties, property and project
management services and other services. The Group and the Company carry out regular review and follow-up
action on any overdue amounts to minimise exposures to credit risk. There is no concentration of credit risk
with respect to trade receivables from third party customers as there are a large number of customers.
In addition, the Group and the Company monitor the exposure to credit risk in respect of the financial
assistance provided to subsidiaries, associated company and joint ventures through exercising control or
influence over their financial and operating policy decisions and reviewing their financial positions on a
regular basis.
The Group provides guarantees to banks in connection with certain property purchasers’ mortgage loans for
financing their purchase of the properties until the issuance of the official property title transfer certificates by
the relevant authority in the PRC. If a purchaser defaults on the payment of its mortgage during the term of
the guarantee, the bank holding the mortgage may demand the Group to repay the outstanding amount of the
loan and any accrued interest thereon. Under such circumstances, the Group is able to retain the purchasers’
deposits and sell the properties to recover any amounts paid by the Group to the bank. Therefore the Group’s
credit risk is significantly reduced. Nevertheless, the net realisable values of the relevant properties are subject
to the fluctuation of the property market in general, the Group assesses at the end of each reporting period the
potential liabilities based on the current estimates of future cash flows. As at 30 June 2015, no provision has
been made in the financial statements (2014: Nil).
(c) Liquidity risk
Prudent liquidity risk management includes managing the profile of debt maturities and funding sources,
maintaining sufficient cash, and ensuring the availability of funding from an adequate amount of committed
credit facilities. It is the policy of the Group and the Company to regularly monitor current and expected
liquidity requirements and to ensure that adequate funding is available for operating, investing and financing
activities. The Group and the Company also maintain undrawn committed credit facilities to further reduce
liquidity risk in meeting funding requirements. At 30 June 2015, the Group’s unutilised committed bank loan
facilities amounted to HK$8,162 million (2014: HK$3,002 million).
The table below analyses the Group’s and the Company’s financial liabilities into relevant maturity groupings
based on the remaining period at the end of the reporting period to the contractual maturity dates. The
amounts disclosed in the table are the contractual undiscounted cashflow.
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FINANCIAL INFORMATION OF THE NWCL GROUP

Group At 30 June 2015 Creditors and accruals Amounts due to associated company and joint ventures Amounts due to group companies Amounts due to companies owned by a director Amounts due to non- controlling interests Short term loans Long term borrowings At 30 June 2014 Creditors and accruals Amounts due to associated company and joint ventures Amounts due to group companies Amounts due to companies owned by a director Amounts due to non- controlling interests Long term borrowings	Carrying amount HK$’000 8,708,785 601,960 121,197 2,834 102,756 1,001,250 44,163,664	Total contractual undiscounted cashflow HK$’000 8,708,785 601,960 121,197 2,834 102,756 1,064,347 50,871,659	Within 1 year HK$’000 7,907,162 601,960 121,197 2,834 102,756 1,064,347 12,889,326	Over 1 year but within 5 years After 5 years HK$’000 HK$’000 780,694 20,929 — — — — — — — — — — 34,186,248 3,796,085 819,326 9,197 — — — — — — — — 24,780,550 3,291,663
	6,682,667 371,919 135,962 2,669 102,756 39,423,209	6,682,667 371,919 135,962 2,669 102,756 44,700,675	5,854,144 371,919 135,962 2,669 102,756 16,628,462

Company

At 30 June 2015 Creditors and accruals Long term borrowings At 30 June 2014 Creditors and accruals Long term borrowings	Carrying amount HK$’000 177,881 21,989,027	Total contractual undiscounted cashflow HK$’000 177,881 25,115,322	Within 1 year HK$’000 177,881 3,431,167	Over 1 year but within 5 years After 5 years HK$’000 HK$’000 — — 16,668,944 5,015,211 — — 7,361,800 4,085,746
	188,222 17,683,380	188,222 19,063,179	188,222 7,615,633

(d) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

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FINANCIAL INFORMATION OF THE NWCL GROUP

The Group generally obtains long term financing to on-lend or contribute as equity to its subsidiaries, joint ventures and associated company to meet their funding needs in order to provide more cost-efficient financing. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue or repurchase shares, raise new debt financing or sell assets to reduce debt.

The Group monitors capital on the basis of the Group’s gearing ratio. The gearing ratio is calculated as net debt divided by total equity. Net debt is calculated as total borrowings less cash and bank balances.

The gearing ratios at 30 June 2015 and 2014 were as follows:

Consolidated total borrowings Less: cash and bank balances Consolidated net debt Total equity Gearing ratio	2015 2014 HK$’000 HK$’000 45,164,914 39,423,209 (15,773,665) (17,351,595 29,391,249 22,071,614 64,618,751 61,318,654 45.5% 36.0%

The increase in gearing ratio at 30 June 2015 was primarily due to increase in net debt for funding the capital expenditure for investment properties under development, property, plant and equipment under construction and properties under development.

(e) Fair value estimation

Financial instruments that are measured in the statement of financial position at fair value are disclosed by level of the following fair value measurement hierarchy:

. Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
. Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
. Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. None of the instruments is included in level 1 as at 30 June 2015 and 30 June 2014.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. None of the instrument is included in level 2 as at 30 June 2015 and 30 June 2014.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

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The unobservable inputs were used to determine the fair value of the available-for-sale financial assets included in level 3 including development costs and developer’s profit of the proposed property development project assuming completed as at the date of valuation.

The following table presents the Group’s financial instruments that are measured at fair value at 30 June 2015 and 2014:

At 30 June 2015 Unlisted investment classified as available-for-sale financial assets At 30 June 2014 Unlisted investment classified as available-for-sale financial assets	Level 1 HK$’000 — —	Level 2 HK$’000 — —	Level 3 Total HK$’000 HK$’000 735,860 735,860 85,147 85,147

The following table presents the changes in level 3 instruments for the year ended 30 June 2015 and 2014:

At beginning of the year Additions Disposals At end of the year	Available-for-sale financial assets 2015 2014 HK$’000 HK$’000 85,147 108,457 650,713 — — (23,310 735,860 85,147

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant effect on carrying amounts of assets and liabilities are as follows:

(a) Valuation of completed investment properties and investment properties under development

The fair value of each investment property is individually determined at the end of each reporting period by independent valuers based on a market value assessment. The valuers have relied on the discounted cash flow analysis and the capitalisation of income approach as their primary methods, supported by the direct comparison method. These methodologies are based upon estimates of future results and a set of assumptions specific to each property to reflect its tenancy and cashflow profile. The fair value of each investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the property.

In the case of investment properties under development, their face value reflects the expectations of market participants of the value of the properties when they are completed, less deductions for the costs required to complete the projects and appropriate adjustments for profit and risk. The valuation and all key assumptions used in the valuation should reflect market conditions at the end of each reporting period. The key

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
assumptions include the value of completed properties, period of development, outstanding construction costs,
finance costs, other professional costs, risk associated with completing the projects and generating income
after completion and investors’ return as a percentage of value or costs. The fair value is made by reference to
independent valuation.
(b) Provision for properties held for/under development and for sale
The Group assesses the carrying amounts of properties held for/under development and for sale according to
their estimated net realisable value based on the realisability of these properties, taking into account costs to
completion based on past experience and net sales value based on prevailing market conditions. Provision is
made when events or changes in circumstances indicate that the carrying amounts may not be realised. The
assessment requires the use of judgement and estimates.
(c) Income taxes
The Group is subject to corporate income tax, land appreciation tax, withholding tax and other taxes in the
PRC. Significant judgement is required in determining the provision for taxes. There are transactions and
calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The
Group recognises taxes based on estimates of the likely outcome with reference to current tax laws and
practices. Where the final tax outcome is different from the amounts that were initially recorded, such
differences will impact the provision for income and other taxes and deferred tax in the period in which such
determination is made.
Recognition of deferred tax assets, which principally relate to tax losses, depends on the management’s
expectation of future taxable profit that will be available against which tax losses can be utilised. The
outcome of their actual utilisation may be different.
(d) Estimated useful lives and impairment of property, plant and equipment
Property, plant and equipment are long-lived but may be subject to technical obsolescence. The annual
depreciation charges are affected by the estimated useful lives that the Group allocates to each type of
property, plant and equipment. Management performs annual reviews to assess the appropriateness of the
estimated useful lives. Such reviews take into account the technological changes, prospective economic
utilisation and physical condition of the assets concerned.
Management also regularly reviews whether there are any indications of impairment and will recognise an
impairment loss if the carrying amount of an asset is higher than its recoverable amount which is the greater
of its net selling price or its value in use. In determining the value in use, management assesses the present
value of the estimated future cash flows expected to arise from the continuing use of the asset and from its
disposal at the end of its useful life. Estimates and judgements are applied in determining these future cash
flows and the discount rate. Management estimates the future cash flows based on certain assumptions, such
as market competition and development and the expected growth in business.
(e) Recoverability of prepayments, debtors and other receivables
The Group assesses whether there is objective evidence as stated in notes 3(h) and 3(o) that prepayments,
debtors and other receivables are impaired. It recognises impairment based on estimates of the extent and
timing of future cash flows using applicable discount rates. The final outcome of the recoverability and cash
flows of these prepayments, debtors and other receivables will impact the amount of impairment required.
(f) Financial guarantees
The Group assesses at the end of each reporting period the liabilities under insurance contracts, using current
estimates of future cash flows.
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In respect of the financial guarantee contracts provided to property purchasers, the Group considers the net realisable value of the relevant properties against the outstanding mortgage principal and interest.

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6. REVENUES AND SEGMENT INFORMATION
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(a) The Group is principally engaged in investment in and development of property projects in the PRC. Revenues comprise turnover which include gross proceeds from sale of properties, revenue from rental and hotel operation, property management services fee income, project management fee income and contracting services income.

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2015 2014
HK$’000 HK$’000
Sale of properties 15,172,392 19,706,194
Rental income 828,864 792,868
Income from hotel operation 388,987 352,538
Property management services fee income 507,799 424,999
Project management fee income 120,607 94,405
Contracting services income 440,588 479,102
17,459,237 21,850,106
(b) The chief operating decision-maker has been identified as the executive committee. This committee reviews
the Group’s internal reporting in order to assess performance and allocate resources. Management has
determined the operating segments based on these reports.
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The committee considers the business from the perspective of the services and products. The management assesses the performance of property sales, rental operation, hotel operation, property management services operations and hotel management services operations. Other operations include contracting services and ancillary services in property projects.

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The executive committee assesses the performance of the operating segments based on a measure of
attributable operating profit (‘‘AOP’’) before finance costs and after taxation charge. This measurement basis
excludes the effects of changes in fair value of investment properties, gains and losses from changes in group
structure, net foreign exchange gains/(losses), amortisation and impairment of intangible assets acquired from
business combinations, income and expenses at corporate office and deferred tax charge on undistributed
profits. Interest income is included in the result of each operating segment that is reviewed by the executive
committee.
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Sales between segments are carried out in accordance with terms agreed by the parties involved. The revenue from external parties reported to the executive committee is measured in a manner consistent with that in the consolidated income statement.

Segment assets consist primarily of property, plant and equipment, investment properties, land use rights, properties held for/under development, intangible assets, prepayments, debtors and other receivables, amounts due from related companies and completed properties held for sale. They exclude cash and bank balances, available-for-sale financial assets and prepayment for proposed development projects held and managed at corporate office. These are part of the reconciliation to total assets on the consolidated statement of financial position.

Segment liabilities comprise mainly creditors and accruals, deposits received on sale of properties and amounts due to related companies. They exclude bank and other borrowings, deferred tax liabilities, taxes payable, other creditors and accruals at corporate office. These are part of the reconciliation to total liabilities on the consolidated statement of financial position.

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During the year ended 30 June 2015, the consolidated results of the hotel management services are presented as discontinued operation in accordance with HKFRS 5 ‘‘Non-current Assets Held for Sales and Discontinued Operations’’. Prior year comparative segment information has been restated to conform with the current year presentation accordingly.

The majority of the assets and operations of the Group are located in the PRC. Revenues are mainly derived from the PRC. Non-current assets other than financial instruments are mainly located in the PRC.

(c) For the years ended 30 June 2014 and 30 June 2015, there was no revenue derived from a single external customer exceeding 10% of total revenue.

		Continuing operations	Continuing operations			Discontinued operation Hotel management services Total HK$’000 HK$’000 696,921 18,467,641 ) (23,741) (335,224
Property sales HK$’000 15,429,949 (136,950	Rental operation HK$’000 871,109 ) (42,245	Hotel operation HK$’000 388,987 ) —	Property management services HK$’000 637,629 (129,830	Other operations HK$’000 443,046 ) (2,458	Sub-total HK$’000 17,770,720 ) (311,483
15,292,999 1,167,664	828,864 468,954	388,987 171,254	507,799 105,255	440,588 —	17,459,237 1,913,127	673,180 18,132,417 — 1,913,127
16,460,663	1,297,818	560,241	613,054	440,588	19,372,364	673,180 20,045,544
113,534	12,614	671	1,988	826	129,633	823 130,456
2,653,053 283,480	336,965 222,118	(130,481) (113,659) (8,066) 2,737,812 (132,517) (11,643) 11,151 372,589				106,689 2,844,501 — 372,589
2,936,533	559,083	(262,998	) (125,302	) 3,085	3,110,401	106,689 3,217,090
5,202,434 90,092 — 138,152	2,072,906 5,860 — 401,003	535,854 207,193 — (145,359	6,214 4,293 — ) (11,643	431,049 1,307 — ) 4,000	8,248,457 308,745 — 386,153	5,081 8,253,538 60,625 369,370 56,375 56,375 — 386,153

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Property
Property Rental Hotel management Other
As at 30 June 2015 sales operation operation services operations Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment assets 79,064,918 26,638,864 3,974,571 333,206 1,493,800 111,505,359
Associated company and joint ventures 6,516,546 9,006,784 156,800 (84,424) 2,402 15,598,108
Available-for-sale financial assets 735,860
Property, plant and equipment at
corporate office 8,868
Prepayments, debtors and other receivables
at corporate office 13,708
Amounts due from related companies at
corporate office 202,793
Cash and bank balances at corporate office 4,250,064
Assets of disposal group classified as
held for sale 2,112,780
Total assets 134,427,540
Segment liabilities 14,944,497 298,539 105,387 298,141 91,789 15,738,353
Creditors and accruals at corporate
office 212,814
Taxes payable 4,242,528
Borrowings 45,164,914
Deferred tax liabilities 3,522,327
Liabilities of disposal group classified as
held for sale 927,853
Total liabilities 69,808,789
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Discontinued
Continuing operations operation
Property Hotel
Property Rental Hotel management Other management
Year ended 30 June 2014 sales operation operation services operations Sub-total services Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment revenues
Company and subsidiaries
Total revenues 19,800,599 819,576 352,538 546,971 482,409 22,002,093 553,578 22,555,671
Inter-segment
revenues — (26,708) — (121,972) (3,307) (151,987) (23,829) (175,816)
External revenues 19,800,599 792,868 352,538 424,999 479,102 21,850,106 529,749 22,379,855
Associated company and
joint ventures —
attributable to the
Group 2,216,784 469,967 137,708 99,909 — 2,924,368 — 2,924,368
22,017,383 1,262,835 490,246 524,908 479,102 24,774,474 529,749 25,304,223
Segment bank and other
interest income 100,013 36,263 560 2,213 1,165 140,214 4,138 144,352
AOP before finance costs
and after taxation charge
Company and
subsidiaries 4,341,404 351,091 (87,039) (110,568) (79,290) 4,415,598 36,280 4,451,878
Associated company
and joint ventures 660,859 192,015 (151,291) (9,749) 8,457 700,291 — 700,291
5,002,263 543,106 (238,330) (120,317) (70,833) 5,115,889 36,280 5,152,169
Additions to non-current
assets other than financial
instruments 5,079,625 1,236,445 1,008,981 4,612 242,037 7,571,700 144,779 7,716,479
Depreciation and
amortisation 62,607 4,613 148,885 3,022 952 220,079 59,781 279,860
Impairment of intangible
assets — — — — — — 125,892 125,892
Share of results of associated
company and joint
ventures 232,397 401,612 (162,623) (9,627) 518 462,277 — 462,277
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Property Hotel
Property Rental Hotel management management Other
As at 30 June 2014 sales operation operation services services operations Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment assets 69,317,012 24,167,715 3,582,728 298,750 2,088,058 1,017,234 100,471,497
Associated company and
joint ventures 5,486,368 8,573,634 266,144 (22,170) 2,992 2,176 14,309,144
Available-for-sale financial
assets 85,147
Property, plant and
equipment at corporate
office 5,587
Prepayments, debtors and
other receivables at
corporate office 124,398
Amounts due from related
companies at corporate
office 435,172
Cash and bank balances at
corporate office 5,495,186
Total assets 120,926,131
Segment liabilities 11,265,371 355,067 108,774 294,371 86,176 170,707 12,280,466
Creditors and accruals at
corporate office 227,184
Taxes payable 4,424,386
Borrowings 39,423,209
Deferred tax liabilities 3,252,232
Total liabilities 59,607,477
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Reconciliations of reportable segment revenues to revenues of the Group and reportable AOP before finance costs and after taxation charge to profit before taxation:

(i)
Revenues
Total segment revenues
Less:
Revenues of associated company and joint ventures, attributable to
the Group
Revenues as presented in consolidated income statement
(ii)
Profit before taxation
Total AOP before finance costs and after taxation charge
AOP from discontinued operation
AOP before finance costs and after taxation charge
Bank and other interest income — corporate
Deferred tax charge on undistributed profits
Corporate administrative expenses
Finance costs
AOP after corporate items
Changes in fair value of investment properties, net of deferred taxation
Gain on remeasuring previously held equity interests of joint ventures at
fair value upon further acquisition as subsidiaries
Loss on disposal of associated companies
Net foreign exchange gains/(losses)
Profit attributable to equity holders of the Company
Taxation charge
Profit attributable to non-controlling interests
Profit before taxation
7.
OTHER INCOME
Tax indemnity from the ultimate holding company (note 13)
Bank and other interest income
Interest income from joint ventures, net of withholding tax (note)

2015
2014
HK$’000
HK$’000
19,372,364
24,774,474
(1,913,127)
(2,924,368
17,459,237
21,850,106
3,217,090
5,152,169
(106,689)
(36,280
3,110,401
5,115,889
123,910
129,400
(63,000)
(175,622
(270,276)
(266,263
(355,017)
(341,584
2,546,018
4,461,820
766,555
598,045
—
67,257
—
(2,486
34,591
(345,247
801,146
317,569
3,347,164
4,779,389
2,918,335
4,167,156
156,916
160,574
6,422,415
9,107,119
2015
2014
HK$’000
HK$’000
359,152
1,075,306
295,162
242,432
78,705
41,847
733,019
1,359,585

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Note: The property projects of the Group’s joint ventures have been partly financed by the Group in the form of equity capital and unsecured shareholder’s advances. The interest income from joint ventures is recognised when the payment of interest has been approved by the Group’s joint ventures. The Group’s attributable share of shareholders’ loan interest expenses of joint ventures is included in the share of results of joint ventures as follows:

		2015	2014
		HK$’000	HK$’000
	Share of shareholders’ loan interest expenses of joint ventures	(59,200)	(50,129)
8.	OTHER GAINS/(LOSSES), NET
		2015	2014
		HK$’000	HK$’000
	Net foreign exchange gains/(losses)	33,745	(281,743)
	Loss on disposal of associated companies	—	(2,486)
	Gain on remeasuring previously held equity interests of joint ventures at fair value
	upon further acquisition as subsidiaries	—	67,257
	Gain on disposal of investment properties	35,228	105,074
		68,973	(111,898)
9.	OPERATING PROFIT BEFORE FINANCE COSTS
		2015	2014
		HK$’000	HK$’000
	Operating profit before finance costs is arrived at after crediting:
	Gross rental income from investment properties	784,623	745,152
	Gain on disposal of property, plant and equipment and land use rights	—	12,543
	Gain on disposal of investment properties	35,228	105,074
	and after charging:
	Cost of properties sold	8,889,377	11,107,940
	Staff costs (note 11)	585,772	514,880
	Depreciation of property, plant and equipment	284,173	199,926
	Outgoings in respect of investment properties	350,096	305,662
	Rental for leased premises	49,046	40,084
	Loss on disposal of property, plant and equipment	969	—
	Amortisation of land use rights	24,572	20,153
	Auditors’ remuneration	14,512	13,980
	Contingent rent included in revenue amounted to HK$32,042,000 (2014: HK$30,393,000) for the year.
		2015	2014
		HK$’000	HK$’000
	The future minimum rental receivable under non-cancellable operating
	leases are as follows:
	Within one year	482,014	535,590
	Between two and five years	907,896	791,607
	Beyond five years	753,074	687,440
		2,142,984	2,014,637

Generally the Group’s operating leases are for terms of two to five years except for 61 (2014: 48) long term leases which are beyond five years.

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10. FINANCE COSTS

Interest on bank borrowings and loans from other financial institutions
— wholly repayable within five years
— not wholly repayable within five years
Interest on loans from fellow subsidiaries wholly repayable within five years
Interest on loans from non-controlling interests not wholly repayable within five
years
Interest on fixed rate bonds and notes payable
— wholly repayable within five years
— not wholly repayable within five years
Interest on short term loans
Interest on advances from participating interest
Amounts capitalised in property, plant and equipment, investment properties and
properties held for/under development

2015
2014
HK$’000
HK$’000
1,218,992
1,195,406
187,318
108,137
8,615
8,550
19,830
1,898
808,409
651,598
21,586
—
15,164
20,300
99,144
110,988
2,379,058
2,096,877
(2,076,918)
(1,785,563
302,140
311,314

Note: To the extent funds are borrowed generally and used for the purpose of financing certain property, plant and equipment, investment properties and properties held for/under development, the capitalisation rate used to determine the amounts of borrowing costs eligible for the capitalisation is 4.70% (2014: 4.28%) for the year.

11. STAFF COSTS

Wages, salaries and other benefits Pension costs defined contribution plans (note) Share-based payments	2015 2014 HK$’000 HK$’000 561,162 492,124 10,184 9,836 14,426 12,920 585,772 514,880

Note: The Group has established a defined contribution retirement scheme under the Occupational Retirement Scheme Ordinance for all employees in Hong Kong since September 1999. The contributions to the scheme are based on a percentage of the employees’ salaries ranging from 5% to 10%, depending upon the length of service of the employees. The Group’s contributions to the scheme are expensed as incurred.

With the implementation of the Mandatory Provident Fund (‘‘MPF’’) Scheme Ordinance on 1 December 2000, the Group established a new MPF Scheme. Except for employees who commenced employment after 1 October 2000, all the existing employees were given an option to select between the existing defined contribution retirement scheme and the MPF Scheme. The employees who commenced employment after 1 October 2000 are required to join the MPF Scheme. The Group’s contributions to the MPF scheme are based on fixed percentages of members’ salaries, ranging from 5% of MPF relevant income to 10% of the basic salary. Members’ mandatory contributions are fixed at 5% of MPF relevant income.

The Group also contributes to retirement plans for its employees in the PRC at a percentage in compliance with the requirements of the respective municipal governments in the PRC.

The assets of all retirement schemes are held separately from those of the Group in independently administered funds. The total pension costs charged to the consolidated income statement for the year amounted to HK$ 10,184,000 (2014: HK$9,836,000).

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12. DIRECTORS’ AND SENIOR MANAGEMENT REMUNERATION

(i) Details of the directors’ emoluments are as follows:

Fees HK$’000 212 212 212 212 212 212 212 339 297 297 297	Other emoluments HK$’000 — 1,350 2,582 4,522 1,532 2,065 7,445 — — — —	Retirement benefits HK$’000 — 90 167 216 80 — 580 — — — —
2,714	19,496	1,133
200 200 200 200 200 200 200 320 280 280 280	— — 2,436 4,203 1,446 1,948 7,023 — — — —	— — 157 164 62 — 547 — — — —
2,560	17,056	930

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(ii) The five individuals whose emoluments were the highest in the Group for the year include one (2014: one) director whose emoluments are reflected in the analysis presented above. The emoluments payable to the remaining four (2014: four) individuals during the year are as follows:

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2015 2014
HK$’000 HK$’000
Salaries, discretionary bonus, other allowances and other benefits
in kind 33,669 26,343
Share option benefits 444 596
Contribution to retirement benefit scheme 1,270 1,429
35,383 28,368
The emoluments fall within the following bands:
Number of individuals
2015 2014
HK$5,000,001–HK$5,500,000 1 1
HK$6,000,001–HK$6,500,000 1 1
HK$7,000,001–HK$7,500,000 — 1
HK$7,500,001–HK$8,000,000 1 —
HK$9,000,001–HK$9,500,000 — 1
HK$16,000,001–HK$16,500,000 1 —
4 4
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(iii) Other than the emoluments of directors and five highest paid individuals disclosed in note 12(i) and 12(ii), the
remuneration payable to the senior management during the year fall within the following bands:
Number of individuals
2015 2014
HK$1,500,001–HK$2,000,000 — 1
HK$2,000,001–HK$2,500,000 1 1
HK$2,500,001–HK$3,000,000 2 4
HK$3,000,001–HK$3,500,000 2 2
HK$3,500,001–HK$4,000,000 1 —
HK$4,000,001–HK$4,500,000 — 1
HK$4,500,001–HK$5,000,000 1 —
7 9
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13. TAXATION CHARGE

Current taxation PRC corporate income tax and withholding tax PRC land appreciation tax Deferred taxation	2015 2014 HK$’000 HK$’000 1,010,518 1,383,531 1,667,492 2,449,000 240,325 334,625 2,918,335 4,167,156

Share of taxation of associated company and joint ventures for the year ended 30 June 2015 of HK$379,673,000 (2014: HK$584,779,000) is included in the consolidated income statement as share of results of associated company and joint ventures.

The taxation on the Group’s profit before taxation differs from the theoretical amount that would arise using the rate of taxation prevailing in the PRC in which the Group operates as follows:

Profit before taxation
Share of results of associated company and joint ventures
Calculated at a taxation rate of 25% (2014: 25%)
Income not subject to taxation
Expenses not deductible for taxation purposes
Tax losses not recognised
Deduction from PRC land appreciation tax
Utilisation of previously unrecognised tax losses
Temporary differences not recognised
Recognition of temporary differences
Deferred taxation on undistributed profits
PRC land appreciation tax

2015
2014
HK$’000
HK$’000
6,422,415
9,107,119
(386,153)
(462,277
6,036,262
8,644,842
1,509,066
2,161,211
(358,850)
(532,539
335,766
414,949
142,919
123,386
(416,873)
(612,250
(40,953)
(28,690
8,551
3,342
6,601
14,177
64,616
174,570
1,250,843
1,718,156
1,667,492
2,449,000
2,918,335
4,167,156

No provision for Hong Kong profit tax has been made as the Group has no estimated assessable profits in Hong Kong for the year (2014: Nil). PRC corporate income tax (‘‘CIT’’) has been provided on the estimated assessable profits of subsidiaries, associated company and joint ventures operating in the PRC at 25% (2014: 25%). PRC land appreciation tax (‘‘LAT’’) is provided at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sale of properties less deductible expenditures including costs of land use rights and property development expenditures.

In July 1999, a deed of tax indemnity was entered into between NWD, the ultimate holding company, and the Company whereby the ultimate holding company undertakes to indemnify the Group in respect of, inter alia, certain PRC CIT and LAT payable in consequence of the disposal of certain properties held by the Group as at 31 March 1999. During the year, tax indemnity amounting to HK$359,152,000 (2014: HK$1,075,306,000) was effected (note 7).

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
14. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share for the year is based on the following:
2015 2014
HK$’000 HK$’000
Profit attributable to equity holders of the Company arising from:
Continuing operations 3,347,164 4,779,389
Discontinued operation (34,033) (140,698)
3,313,131 4,638,691
Number of shares
2015 2014
Weighted average number of shares for calculating basic earnings
per share 8,685,806,399 8,672,612,430
Effect of dilutive potential shares:
Share options 6,544,197 6,721,368
Weighted average number of shares for calculating diluted
earnings per share 8,692,350,596 8,679,333,798
15. DIVIDENDS
2015 2014
HK$’000 HK$’000
Interim dividend paid of nil (2014: HK$0.04) per share — 347,166
Final dividend proposed of HK$0.03 (2014: HK$0.03) per share 260,681 260,547
260,681 607,713
At a meeting held on 23 September 2015, the directors recommended a final dividend of HK$0.03 per share. This
proposed dividend is not reflected as a dividend payable in these financial statements, but will be reflected as an
appropriation of contributed surplus for the year ending 30 June 2016.
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16. PROPERTY, PLANT AND EQUIPMENT

Other properties HK$’000 2,804,783 20,872 8,113 — — (5,587	Leasehold improvements Furniture, fixtures and equipment Motor vehicles HK$’000 HK$’000 HK$’000 848,389 925,034 94,252 37,163 59,426 4,427 — — — — — — (12,784) (22,376) — ) (240) (19,978) (8,755	Leasehold improvements Furniture, fixtures and equipment Motor vehicles HK$’000 HK$’000 HK$’000 848,389 925,034 94,252 37,163 59,426 4,427 — — — — — — (12,784) (22,376) — ) (240) (19,978) (8,755	Leasehold improvements Furniture, fixtures and equipment Motor vehicles HK$’000 HK$’000 HK$’000 848,389 925,034 94,252 37,163 59,426 4,427 — — — — — — (12,784) (22,376) — ) (240) (19,978) (8,755	Assets under construction Total HK$’000 HK$’000 1,807,526 6,479,984 897,137 1,019,025 — 8,113 346,697 346,697 — (35,160 ) — (34,560
2,828,181	872,528	942,106	89,924	3,051,360 7,784,099
807,581 129,425 — (4,774	349,731 493,706 65,079 82,695 68,466 9,520 (7,103) (14,328) — ) (240) (19,647) (7,936			— 1,716,097 — 290,106 — (21,431 ) — (32,597
932,232	425,083	528,197	66,663	— 1,952,175
1,895,949	447,445	413,909	23,261	3,051,360 5,831,924

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Other properties Leasehold improvements Furniture, fixtures and equipment Motor vehicles Assets under construction Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 2,120,671 346,095 658,656 87,834 1,769,080 4,982,336 (26,078) (4,075) (8,447) (602) (21,086) (60,288 145,563 7,050 19,701 1,586 — 173,900 19,962 233,914 63,238 8,550 1,012,253 1,337,917 363,980 276,206 198,904 — (839,090) — 3,558 — — — (86,250) (82,692 — — — — (27,381) (27,381 11,424 — — — — 11,424 173,469 — — — — 173,469 (7,766) (10,801) (7,018) (3,116) — (28,701	Other properties Leasehold improvements Furniture, fixtures and equipment Motor vehicles Assets under construction Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 2,120,671 346,095 658,656 87,834 1,769,080 4,982,336 (26,078) (4,075) (8,447) (602) (21,086) (60,288 145,563 7,050 19,701 1,586 — 173,900 19,962 233,914 63,238 8,550 1,012,253 1,337,917 363,980 276,206 198,904 — (839,090) — 3,558 — — — (86,250) (82,692 — — — — (27,381) (27,381 11,424 — — — — 11,424 173,469 — — — — 173,469 (7,766) (10,801) (7,018) (3,116) — (28,701	Other properties Leasehold improvements Furniture, fixtures and equipment Motor vehicles Assets under construction Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 2,120,671 346,095 658,656 87,834 1,769,080 4,982,336 (26,078) (4,075) (8,447) (602) (21,086) (60,288 145,563 7,050 19,701 1,586 — 173,900 19,962 233,914 63,238 8,550 1,012,253 1,337,917 363,980 276,206 198,904 — (839,090) — 3,558 — — — (86,250) (82,692 — — — — (27,381) (27,381 11,424 — — — — 11,424 173,469 — — — — 173,469 (7,766) (10,801) (7,018) (3,116) — (28,701	Other properties Leasehold improvements Furniture, fixtures and equipment Motor vehicles Assets under construction Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 2,120,671 346,095 658,656 87,834 1,769,080 4,982,336 (26,078) (4,075) (8,447) (602) (21,086) (60,288 145,563 7,050 19,701 1,586 — 173,900 19,962 233,914 63,238 8,550 1,012,253 1,337,917 363,980 276,206 198,904 — (839,090) — 3,558 — — — (86,250) (82,692 — — — — (27,381) (27,381 11,424 — — — — 11,424 173,469 — — — — 173,469 (7,766) (10,801) (7,018) (3,116) — (28,701	Other properties Leasehold improvements Furniture, fixtures and equipment Motor vehicles Assets under construction Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 2,120,671 346,095 658,656 87,834 1,769,080 4,982,336 (26,078) (4,075) (8,447) (602) (21,086) (60,288 145,563 7,050 19,701 1,586 — 173,900 19,962 233,914 63,238 8,550 1,012,253 1,337,917 363,980 276,206 198,904 — (839,090) — 3,558 — — — (86,250) (82,692 — — — — (27,381) (27,381 11,424 — — — — 11,424 173,469 — — — — 173,469 (7,766) (10,801) (7,018) (3,116) — (28,701
2,804,783	848,389	925,034	94,252	1,807,526 6,479,984
695,569 331,500 466,431 58,719 — 1,552,219 (10,238) (4,223) (7,748) (874) — (23,083 123,731 33,255 38,264 10,030 — 205,280 (1,481) (10,801) (3,241) (2,796) — (18,319
807,581	349,731	493,706	65,079	— 1,716,097
1,997,202	498,658	431,328	29,173	1,807,526 4,763,887

As at 30 June 2015, certain other properties and furniture, fixtures and equipment with carrying amount of HK$1,316,473,000 (2014: HK$1,382,166,000) were pledged as securities for the Group’s long term borrowings.

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
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17. INVESTMENT PROPERTIES Completed investment properties Investment properties under development At 1 July 2014 Additions Transfer from properties under development Transfer to completed properties held for sale Transfer from completed properties held for sale Disposals Changes in fair value Reclassified from assets held for sale Reclassification At 30 June 2015 At 1 July 2013 Translation differences Additions Transfer from property, plant and equipment Transfer to land use rights Transfer from properties under development Transfer from completed properties held for sale Disposals Changes in fair value Reclassified as assets held for sale Reclassification At 30 June 2014	Completed investment properties HK$’000 18,452,717 243,658 — (1,412,742) 506,569 (418,803) 478,244 131,138 1,095,322 19,076,103 16,771,879 (217,850) 190,438 82,692 (986) — 530,413 (373,286) 665,732 (131,138) 934,823 18,452,717	Group 2015 2014 HK$’000 HK$’000 19,076,103 18,452,717 5,608,250 3,518,875 24,684,353 21,971,592 Investment properties under development Total HK$’000 HK$’000 3,518,875 21,971,592 1,809,494 2,053,152 954,330 954,330 — (1,412,742 — 506,569 — (418,803 420,873 899,117 — 131,138 (1,095,322) — 5,608,250 24,684,353 3,156,362 19,928,241 (38,834) (256,684 1,044,696 1,235,134 — 82,692 — (986 341,084 341,084 — 530,413 — (373,286 (49,610) 616,122 — (131,138 (934,823) — 3,518,875 21,971,592

Valuation processes of the Group

The Group measures its investment properties at fair value. The investment properties were revalued by Knight Frank Petty Limited, independent qualified valuer, who holds a recognised relevant professional qualification and have recent experience in the locations and segments of the investment properties valued, at 30 June 2015 on an open market value basis. For all investment properties, their current use equates to the highest and best use.

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The Group’s finance department includes a team that reviews the valuation performed by the independent valuer for financial reporting purposes. This team reports directly to the senior management and the Audit Committee. Discussions of valuation processes and results are held between the management and valuer at least once every six months, in line with the Group’s interim and annual reporting dates.

At each financial year end, the finance department verifies all major inputs to the independent valuation report; assesses property valuation movements when compared to the prior year valuation report; and holds discussions with the independent valuer.

Valuation techniques

Fair value of completed commercial and residential properties in the PRC is generally derived using the income capitalisation method and wherever appropriate, by direct comparison method. Income capitalisation method is based on the capitalisation of the net income and reversionary income potential by adopting appropriate capitalisation rates, which are derived from analysis of sale transactions and valuers’ interpretation of prevailing investor requirements or expectations. The prevailing market rents adopted in the valuation referenced to recent lettings of the subject properties and other comparable properties.

Direct comparison method is based on comparing the property to be valued directly with other comparable properties, which have recently transacted. However, given the heterogeneous nature of real estate properties, appropriate adjustments are usually required to allow for any qualitative differences that may affect the price likely to be achieved by the property under consideration.

Fair value of commercial and residential properties under development in the PRC is generally derived using the residual method. This valuation method is essentially a means of valuing the completed properties by reference to its development potential by deducting development costs together with developer’s profit and risk from the estimated capital value of the proposed development assuming completed as at the date of valuation.

As at 30 June 2015, all investment properties are included in level 3 fair value hierarchy.

There were no changes to the valuation techniques during the year and there were no transfers between fair value hierarchy during the year.

The investment properties are held in the PRC under the following leases:

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2015 2014
HK$’000 HK$’000
Leases of over 50 years 1,351,400 1,071,403
Leases of between 10 and 50 years 23,332,953 20,900,189
24,684,353 21,971,592
As at 30 June 2015, certain investment properties with carrying value of HK$5,425,703,000 (2014:
HK$5,448,689,000) were pledged as securities for the Group’s long term borrowings.
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Information about fair value measurements using significant unobservable inputs:
Range of significant unobservable inputs
2015 Valuation Prevailing market rents Capitalisation
Fair value technique per month rate
HK$’000 HK$ %
Completed properties
Residential 2,914,065 Income HK$11 — HK$208 4%–15%
capitalisation per square metre
Commercial 8,735,398 Income HK$29 — HK$286 3%–8.5%
capitalisation per square metre
Office 2,259,750 Income HK$55 — HK$128 6%–8%
capitalisation per square metre
Carparks 5,166,890 Direct comparison HK$81,000 — HK$481,000
per carpark space
Total 19,076,103
Range of significant unobservable inputs
Estimated
developer’s
2015 Valuation Prevailing market rents per Estimated costs to profit and risk
Fair value technique month completion margins
HK$’000 HK$ HK$ %
Properties under
development
Residential 83,750 Residual HK$14,400 HK$106,000,000 7%
per square metre
Commercial 4,201,250 Residual HK$17,500–HK$46,300 per HK$60,000,000– 5%–25%
square metre HK$2,397,000,000
Carparks 1,323,250 Residual HK$125,000–HK$262,500 HK$18,000,000– 0.3%–5%
per carpark space HK$673,000,000
Total 5,608,250
Range of significant unobservable inputs
2014 Valuation Prevailing market rents per Capitalisation
Fair value technique month rate
HK$’000 HK$ %
Completed properties
Residential 2,655,189 Income HK$14 — HK$202 per 4%–15%
capitalisation square metre
Commercial 7,896,463 Income HK$23 — HK$267 per 4%–8.75%
capitalisation square metre
Office 3,341,979 Income HK$51 — HK$118 per 6%–8.25%
capitalisation square metre
Carparks 4,559,086 Direct comparison HK$81,000 — HK$437,000
per carpark space
Total 18,452,717
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				Range of significant unobservable inputs	Range of significant unobservable inputs	Range of significant unobservable inputs
						Estimated
						developer’s
		2014	Valuation	Prevailing market rents	Estimated costs to	profit and risk
		Fair value	technique	per month	completion	margins
		HK$’000		HK$	HK$	%
	Properties under
	development
	Residential	79,625	Residual	HK$16,300	HK$130,600,000	11%
				per square metre
	Commercial	2,465,000	Residual	HK$10,400–HK$27,000	HK$20,100,000–	2%–5%
				per square metre	HK$2,982,000,000
	Carparks	974,250	Residual	HK$125,000–HK$238,000	HK$400,000–	2%–5%
				per carpark space	HK$223,100,000
	Total	3,518,875
18.	LAND USE RIGHTS
					Group
					2015	2014
					HK$’000	HK$’000
	At beginning of the	year			703,901	621,096
	Translation differences				—	(7,472)
	Acquisition of subsidiaries				—	64,437
	Transfer from properties under development				—	17,626
	Transfer from property, plant and equipment				—	27,381
	Transfer from investment properties				—	986
	Additions				40,815	—
	Amortisation				(24,572)	(20,153)
	At end of the year				720,144	703,901

The Group’s interests in land use rights represent prepaid operating lease payments and are held in the PRC under the following leases:

Leases of over 50 years Leases of between 10 and 50 years	2015 2014 HK$’000 HK$’000 1,279 1,322 718,865 702,579 720,144 703,901

As at 30 June 2015, land use rights with carrying amount of HK$248,728,000 (2014: HK$256,165,000) were pledged as securities for the Group’s long term borrowings and short term loans.

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S Goodwill HK$’000 559,227 — (212,589)	Trademarks HK$’000 614,865 — —	Hotel management contracts HK$’000 428,063 (41,023) —	Process, technology and know-how HK$’000 38,916 (7,459) —	Customer relationships HK$’000 544,817 (52,212) —
346,638	614,865	387,040	31,457	492,605
346,638 11,903 — (90,000)	614,865 63,603 — —	387,040 60,524 (23,294) (35,892)	31,457 — (3,892) —	492,605 — (27,241) —
268,541	678,468	388,378	27,565	465,364
571,130 — (302,589)	678,468 — —	488,587 (64,317) (35,892)	38,916 (11,351) —	544,817 (79,453) —
268,541	678,468	388,378	27,565	465,364
268,541 — — (245,147)	678,468 — — (678,468)	388,378 (23,559) (56,375) (308,444)	27,565 (3,892) — (23,673)	465,364 (27,241) — (438,123)
23,394	—	—	—	—
235,983 (212,589)	— —	— —	— —	— —
23,394	—	—	—	—

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Goodwill is allocated to the Group’s cash generating units identified according to business segment. As at 30 June
2015, goodwill of HK$14,227,000 (2014: HK$14,227,000), HK$9,167,000 (2014: HK$9,167,000) and
HK$245,147,000 (2014: HK$245,147,000) is allocated to the segments of property sales, hotel operation and hotel
management services respectively. Amortisation of intangible assets of HK$54,692,000 (2014: HK$54,427,000) is
included in the loss for the year from discontinued operation in the consolidated income statement.
For the purpose of impairment test, the recoverable amount of the business unit is determined based on value-in-use
calculations, which use cash flow projections based on financial budgets and a pre-tax discount rate.
For the segments of property sales and hotel operation, the key assumptions adopted on growth rates and discount
rates used in the value-in-use calculations are based on management best estimates. Growth rates with 3.5% (2014:
3.5%) are determined by considering both internal and external factors relating to the relevant segments. Discount
rates used also reflect specific risks relating to the relevant segments, which range from 3.4% to 7.5% (2014: 5.1%
to 7.5%).
For the segment of hotel management services in 2014, the key assumptions adopted on growth rates and discount
rates used in the value-in-use calculations were based on management best estimates. A financial budget of five-year
with growth rate ranging from 23% to 83% were determined by considering both internal and external factors
relating to the relevant segment and the hotel management contracts in pipeline. Cash flows beyond the five-year
period were extrapolated using the estimated growth rates of 3%. Discount rate used also reflected specific risks
relating to the relevant segment, which was 18.2%.
20. SUBSIDIARIES
Company
2015 2014
HK$’000 HK$’000
Unlisted shares, at cost of HK$4 (2014: HK$4) — —
Amounts due by subsidiaries, net of provision 46,336,267 40,751,213
46,336,267 40,751,213
The amounts receivable are unsecured, interest free and have no fixed terms of repayment. The amounts receivable
form part of the Group’s investment in subsidiaries.
There is no non-controlling interest that is individually significant to the Group.
Details of principal subsidiaries are given in note 44.
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21. PROPERTIES HELD FOR DEVELOPMENT
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Group
2015 2014
HK$’000 HK$’000
Land use rights 8,880,578 9,022,435
Development and incidental costs 9,187,673 8,215,005
Interest capitalised 1,672,999 945,135
19,741,250 18,182,575
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The analysis of the carrying value of land use rights held in the PRC included in the properties held for development
is as follows:
2015 2014
HK$’000 HK$’000
Leases of over 50 years 6,785,165 7,146,424
Leases of between 10 and 50 years 2,095,413 1,876,011
8,880,578 9,022,435
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As at 30 June 2015, the aggregate carrying value of properties held for development pledged as securities for long term borrowings amounted to HK$1,051,715,000 (2014: HK$923,335,000).

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22. ASSOCIATED COMPANY AND JOINT VENTURES

Associated company
Group’s share of net assets
Amounts due to associated company
Non-interest bearing
Aggregate carrying amount of the Group’s interests in associated company
Equity joint ventures/joint ventures in wholly foreign owned enterprises
Group’s share of net assets
Amounts due by joint ventures
Interest bearing (note ii)
Non-interest bearing (note i)
Co-operative joint ventures
Cost of investments
Goodwill
Share of undistributed post-acquisition results and reserves
Amounts due by joint ventures, net of provision
Interest bearing (note iii)
Non-interest bearing (note i)
Joint venture companies limited by shares
Group’s share of net assets
Amounts due by joint ventures, net of provision
Interest bearing (note ii)
Non-interest bearing (note i)
Deposit for proposed joint venture
Aggregate carrying amount of the Group’s interests in joint ventures

Group
2015
2014
HK$’000
HK$’000
(668)
(645
(2,657)
(2,702
(3,325)
(3,347
2,568,920
2,291,200
30,310
30,310
2,285,462
2,193,359
4,884,692
4,514,869
4,376,624
3,979,009
12,704
12,704
1,833,106
2,001,193
6,222,434
5,992,906
2,949,496
2,035,089
1,083,393
701,450
10,255,323
8,729,445
(67,995)
121,603
88,818
88,818
440,595
237,131
461,418
447,552
—
620,625
15,601,433
14,312,491
15,598,108
14,309,144

Notes:

(i) The amounts receivable are unsecured and interest free. The amounts receivable form part of the Group’s investment in joint ventures.

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(ii) The amount receivable is unsecured and carries interest at 10% (2014: 10%) per annum. The amounts
receivable form part of the Group’s investment in joint ventures.
(iii) The amounts receivable are unsecured and carry interest ranging from Hong Kong prime rate to 8.5% (2014:
Hong Kong prime rate to 8.5%) per annum. The amounts receivable form part of the Group’s investment in
joint ventures.
(iv) There is no associated company or joint venture that is individually significant to the Group. The Group’s
share of results of the associated company and joint ventures are as follows:
2015 2014
HK$’000 HK$’000
Profit for the year 386,153 462,277
Other comprehensive income for the year 1,978 (83,077)
Total comprehensive income for the year 388,131 379,200
(v) Details of principal joint ventures are given in note 44.
23. NON-CURRENT ASSETS RECLASSIFIED AS HELD FOR SALE
The Group entered into agreements in November 2013 to sell a portion of the investment properties in Tianjin Xin
An New World Plaza to a third party at a consideration of RMB112,492,000 (equivalent to HK$142,395,000) and
accordingly, the respective portion of the investment properties are classified as held for sale. The transactions were
subsequently cancelled and the Group had forfeited the deposit received from the third party during the year ended
30 June 2015. The non-current assets classified as held for sale were reclassified to investment properties.
24. DISCONTINUED OPERATION
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New World Hotel Management (BVI) Limited, its subsidiaries and a joint venture are engaged in the provision of worldwide hotel management services, which is not the core business of the Group. The Board of Directors of the Company believes that the Disposal will enable the Group to realise its investment in non-core business and focus its resources on the operation of its existing core businesses of property development and investment in the PRC. The negotiation for the Disposal was in final stage in June 2015 and the Company announced the Disposal on 3 July 2015.

As at 30 June 2015, the assets and liabilities related to the Disposal Group have been presented as held for sales and the consolidated results of the Disposal Group are presented as discontinued operation in accordance with HKFRS 5 ‘‘Non-current Assets Held for Sale and Discontinued Operations’’.

The consolidated statement of comprehensive income and consolidated cash flow statement distinguish the discontinued operation from continuing operations. Comparative figures have been restated.

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An analysis of the results, cash flows and assets and liabilities of the Disposal Group is as follows:

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(a) Results of discontinued operation
2015 2014
HK$’000 HK$’000
Revenue 673,180 529,749
Cost of sales (364,431) (327,583)
Gross profit 308,749 202,166
Other income 822 4,137
Other losses, net (57,926) (125,940)
Administrative and other operating expenses (240,710) (212,367)
Operating profit/(loss) before finance costs 10,935 (132,004)
Finance costs (28,104) (30,611)
Loss before taxation (17,169) (162,615)
Taxation charge (16,864) 21,917
Loss for the year from discontinued operation (34,033) (140,698)
(b) Assets of the disposal group classified as held for sales
2015
HK$’000
Property, plant and equipment 13,729
Intangible assets 1,693,855
Prepayments, debtors and other receivables 149,925
Cash and bank balances 165,021
Deferred tax assets 34,000
Other assets 56,250
2,112,780
(c) Liabilities of the disposal group classified as held for sales
2015
HK$’000
Long term borrowings 818,072
Creditors and accruals 92,846
Taxes payables 16,935
927,853
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(d) Cash flows
2015 2014
HK$’000 HK$’000
Operating cash flows 108,212 5,173
Investing cash flows (4,253) (143,498)
Financing cash flows (84,237) (85,822)
Net cash from/(used in) discontinued operation 19,722 (224,147)
25. AVAILABLE-FOR-SALE FINANCIAL ASSETS
Group
2015 2014
HK$’000 HK$’000
Unlisted investments, at fair value 735,860 85,147
The available-for-sale financial assets are denominated in Renminbi.
26. CASH AND BANK BALANCES
Group Company
2015 2014 2015 2014
HK$’000 HK$’000 HK$’000 HK$’000
Unrestricted balances 15,773,665 17,351,595 4,148,864 5,241,629
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The effective interest rate on short term bank deposits was ranging from 0.001% to 3.59% (2014: 0.001% to 3.6%). These deposits have maturity date ranging from 2 to 93 days (2014: 2 to 92 days).

The carrying amounts of the cash and bank balances of the Group are denominated in the following currencies:

Hong Kong dollar Renminbi United States dollar Others	Group 2015 2014 HK$’000 HK$’000 2,176,300 2,450,850 13,194,019 13,730,931 403,346 1,166,750 — 3,064 15,773,665 17,351,595	Company 2015 2014 HK$’000 HK$’000 1,549,118 2,172,631 2,596,353 3,067,340 3,393 1,658 — — 4,148,864 5,241,629

The conversion of Renminbi denominated balances into foreign currencies and the remittance of such foreign currencies denominated bank balances and cash out of the PRC are subject to relevant rules and regulations of foreign exchange control promulgated by the PRC government.

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27. PROPERTIES UNDER DEVELOPMENT

Land use rights Development and incidental costs Interest capitalised	Group 2015 2014 HK$’000 HK$’000 4,656,545 5,731,282 11,379,053 13,751,847 1,635,972 1,607,981 17,671,570 21,091,110

The analysis of the carrying value of land use rights held in the PRC included is as follows: Leases of over 50 years Leases of between 10 and 50 years	in the properties under development 2015 2014 HK$’000 HK$’000 2,561,789 3,284,728 2,094,756 2,446,554 4,656,545 5,731,282

Properties under development with an aggregate carrying value of HK$6,234,373,000 (2014: HK$4,377,720,000) were pledged as securities for the Group’s long term borrowings.

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2015 2014
HK$’000 HK$’000
Properties under development for sale:
Expected to be completed and available for sale after more than 12 months 9,601,038 9,195,582
Expected to be completed and available for sale within 12 months 8,070,532 11,895,528
17,671,570 21,091,110
28. COMPLETED PROPERTIES HELD FOR SALE
Group
2015 2014
HK$’000 HK$’000
Land use rights 2,462,701 795,190
Development costs 16,282,933 7,762,144
Interest capitalised 1,139,724 419,812
19,885,358 8,977,146
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The analysis of the carrying value of land use rights held in the PRC included in the completed properties held for sale is as follows:

Leases of over 50 years Leases of between 10 and 50 years	2015 2014 HK$’000 HK$’000 1,786,854 498,700 675,847 296,490 2,462,701 795,190

PREPAYMENTS, DEBTORS AND OTHER RECEIVABLES

Trade debtors (note a) Prepaid land preparatory cost (note b) Deposits for purchase of land (note b) Prepayment for proposed development projects (note b) Prepaid taxes (note b) Other prepayments, deposits and receivables (note b)	Group 2015 2014 HK$’000 HK$’000 2,634,329 2,923,518 2,227,043 2,019,803 3,111,177 2,999,245 214,272 187,375 1,677,003 1,266,578 1,411,629 1,485,398 11,275,453 10,881,917	Company 2015 2014 HK$’000 HK$’000 — — — — — — — — — — 13,021 16,489 13,021 16,489

Notes:

(a) Trade debtors mainly include sales proceed receivables, rental receivables and property management fee receivables. Sales proceed receivables in respect of sale of properties are settled in accordance with the instalment schedules as stipulated in the sales and purchase agreements. Monthly rental in respect of rental properties are payable in advance by tenants in accordance with the lease agreements. Monthly property management fees are payable in advance in accordance with the agreements. The ageing analysis of trade debtors based on invoice date is as follows:

0 to 30 days 31 to 60 days 61 to 90 days Over 90 days	Group 2015 2014 HK$’000 HK$’000 723,946 763,495 541,948 377,676 285,012 351,363 1,083,423 1,430,984 2,634,329 2,923,518

The carrying amounts of the trade debtors of the Group are mainly denominated in Renminbi.

(b) The carrying amounts of the Group and the Company are mainly denominated in Renminbi and Hong Kong dollar respectively.

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(c) At 30 June 2015, trade debtors of HK$1,540,687,000 (2014: HK2,236,695,000) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

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Group
2015 2014
HK$’000 HK$’000
0 to 30 days 685,335 1,161,860
31 to 60 days 24,116 134,878
61 to 90 days 24,140 164,840
Over 90 days 807,096 775,117
1,540,687 2,236,695
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(d) During the year, impairment loss on trade debtors of HK$4,276,000 (2014: HK$4,918,000) was recognised in the consolidated income statement.
(e) The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.
AMOUNTS DUE FROM/(TO) RELATED COMPANIES

Related companies include group companies, joint ventures of the Group and companies owned by a director.

Amounts due from group companies (note a) Amounts due from joint ventures (note b) Amounts due to group companies (note c) Amounts due to joint ventures (note d) Amounts due to companies owned by a director (note e)	Group 2015 2014 HK$’000 HK$’000 252,442 527,381 49,501 49,644 301,943 577,025 (121,197) (135,962) (599,303) (369,217) (2,834) (2,669) (723,334) (507,848) (421,391) 69,177	Company 2015 2014 HK$’000 HK$’000 202,799 435,602 — — 202,799 435,602 — — — (27 — — — (27 202,799 435,575

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Notes:

(a) The amounts due from group companies are unsecured, interest free and repayable on demand.

The carrying amounts of amounts due from group companies are denominated in the following currencies:

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Group Company
2015 2014 2015 2014
HK$’000 HK$’000 HK$’000 HK$’000
Hong Kong dollar 203,745 484,628 202,799 435,602
Renminbi 48,697 42,753 — —
252,442 527,381 202,799 435,602
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(b) For interest free amounts due from joint ventures of HK$19,191,000 (2014: HK$19,334,000), they are unsecured and repayable on demand. For interest bearing amounts due from a joint venture of HK$30,310,000 (2014: HK$30,310,000), they are unsecured, carry interest at 10% (2014: 10%) per annum and repayable on demand. The carrying amounts of amounts due from joint ventures are denominated in United States dollar.
(c) The amounts due to group companies are unsecured, interest free and repayable on demand. The carrying amounts of amounts due to group companies are denominated in Renminbi.
(d) The amounts payable are unsecured, interest free and repayable on demand. The amounts payable are mainly denominated in Renminbi.
(e) The amounts due to companies owned by a director are unsecured, interest free and repayable on demand. The carrying amounts of amounts due to companies owned by a director are denominated in Renminbi.

31. SHARE CAPITAL

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Company
2015 2014
HK$’000 HK$’000
Authorised:
30,000,000,000 shares of HK$0.1 each 3,000,000 3,000,000
Issued and fully paid:
8,688,769,557 (2014: 8,683,350,475) shares of HK$0.1 each 868,877 868,335
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Details of the movement in the issued and fully paid share capital of the Company are summarised as follows:

At 1 July 2013 Exercise of share options (note) At 30 June 2014 Exercise of share options (note) At 30 June 2015	Number of shares of HK$0.1 each HK$’000 8,663,596,817 866,360 19,753,658 1,975 8,683,350,475 868,335 5,419,082 542 8,688,769,557 868,877

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Note:	Pursuant to the share option scheme	Pursuant to the share option scheme	adopted on 26	November 2002 (‘‘2002 Share Option Scheme’’) and the	November 2002 (‘‘2002 Share Option Scheme’’) and the	November 2002 (‘‘2002 Share Option Scheme’’) and the	November 2002 (‘‘2002 Share Option Scheme’’) and the
	share option scheme adopted on 22 November 2011			(‘‘2011 Share Option Scheme’’), the Company may grant
	options to directors and	employees	of the Company or its subsidiaries to subscribe for				shares in the
	Company. The movements in the		number of share options granted during			the year and the balance
	outstanding at 30 June 2015 are as follows:
(a)	Movement of share options	under the	2002 Share Option Scheme
							Number of
							share options
				Number of share options			exercisable
		Exercise	At	Exercised	Lapsed	At	At
		price per	1 July	during	during	30 June	30 June
	Date of offer to grant	share	2014	the year	the year	2015	2015
		HK$
	26 June 2009	3.9131	512,551	(504,529)	(8,022)	—	—
	19 November 2009	2.9531	3,013	(1,533)	(1,480)	—	—
	12 January 2010	2.8781	61,481	(58,338)	(3,143)	—	—
	18 May 2010	2.2621	121,740	(121,740)	—	—	—
	31 May 2010	2.3491	209,480	(170,000)	—	39,480	39,480
	10 November 2010	3.0131	693,137	(99,859)	—	593,278	593,278
	18 January 2011	3.0361	9,825,966	(1,570,803)	(166,233)	8,088,930	8,088,930
	26 July 2011	2.7051	733,242	(216,000)	—	517,242	190,512
			12,160,610	(2,742,802)	(178,878)	9,238,930	8,912,200
	Weighted average
	exercise price of each
	category (HK$)		3.031	3.090	3.072	3.013	3.024
(b)	Movement of share options	under the	2011 Share Option Scheme

	Num	ber of share options Number of share options exercisable Exercised during the year Lapsed during the year At 30 June 2015 At 30 June 2015 (1,073,280) (200,000) 2,798,400 1,477,280 (139,200) (110,400) 199,100 20,700 (632,580) (452,960) 2,738,560 1,164,040 (104,800) (37,200) 1,791,990 936,790 (110,400) (165,600) 892,400 224,000 (44,800) (230,000) 1,475,100 519,900 (355,620) (12,800) 3,371,020 742,780 (105,600) (286,400) 874,000 147,600 (66,000) (264,000) 802,000 160,400 (44,000) — 10,852,400 2,135,280 — — 914,000 182,800 (2,676,280) (1,759,360) 26,708,970 7,711,570 3.292 3.804 4.211 3.890	ber of share options Number of share options exercisable Exercised during the year Lapsed during the year At 30 June 2015 At 30 June 2015 (1,073,280) (200,000) 2,798,400 1,477,280 (139,200) (110,400) 199,100 20,700 (632,580) (452,960) 2,738,560 1,164,040 (104,800) (37,200) 1,791,990 936,790 (110,400) (165,600) 892,400 224,000 (44,800) (230,000) 1,475,100 519,900 (355,620) (12,800) 3,371,020 742,780 (105,600) (286,400) 874,000 147,600 (66,000) (264,000) 802,000 160,400 (44,000) — 10,852,400 2,135,280 — — 914,000 182,800 (2,676,280) (1,759,360) 26,708,970 7,711,570 3.292 3.804 4.211 3.890
	Granted during the year — — — — — — — 1,266,000 1,132,000 10,896,400 914,000
16,936,210	14,208,400	(2,676,280)	(1,759,360)
3.418	4.931	3.292	3.804

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Notes:
(1) On dates of grant, the share options are divided into 5 tranches and exercisable within a period of 5
years commencing on the expiry of one month after the dates on which the options were accepted.
(2) Fair value of options and assumptions
The fair value of options granted during the year was determined using the Binomial Model amounting
to HK$21,750,200 (2014: HK$9,031,524). The significant inputs to the model was share price ranging
from HK$4.42 to HK$5.36 (2014: HK$3.97 to HK$4.01) at the grant dates, exercise prices ranging
from HK$4.42 to HK$5.42 (2014: HK$3.97 to HK$4.01), volatility of the share ranging from 37.94%
to 40.52% (2014: 44.49% to 51.49%), expected life of options of 5 years (2014: 5 years), expected
dividend yield ranging from 0.57% to 1.68% (2014: 1.24% to 1.89%), risk-free interest rate ranging
from 1.17% to 1.4% (2014: 1.19% to 1.51%) and suboptimal exercise factor ranging from 1.9 to 1.91
times (2014: 1.91 to 1.93 times) of the exercise prices (which accounts for the early exercise behaviour
of the option holders). The volatility measured at the standard deviation of expected share price returns
is based on statistical analysis of daily share prices of the Company over the past 5 years.
(3) For the year ended 30 June 2015, the weighted average share price at the time of exercise was
HK$4.931 per share (2014: HK$4.707 per share) and HK$5.166 per share (2014: HK$5.356) under the
2002 Share Option Scheme and 2011 Share Option Scheme respectively.
32. RESERVES
Group
Other Share
Contributed Share reserve option Exchange Retained
surplus premium (note) reserve reserve profits Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
As at 1 July 2014 11,207,539 16,304,097 227,955 37,925 5,145,410 23,961,256 56,884,182
Profit for the year — — — — — 3,313,131 3,313,131
Premium on issue of
shares — 16,742 — — — — 16,742
Share-based payments — — — 14,426 — — 14,426
Transfer of reserve upon
exercise and lapse of
share options — 5,401 — (6,889) — 1,488 —
Dividends (260,554) — — — — — (260,554)
Translation differences
Subsidiaries — — — — (56,931) — (56,931)
Associated company
and joint ventures — — — — 1,978 — 1,978
As at 30 June 2015
before proposed final
dividend 10,946,985 16,326,240 227,955 45,462 5,090,457 27,275,875 59,912,974
Representing:
As at 30 June 2015
after proposed
final dividend 10,686,304 16,326,240 227,955 45,462 5,090,457 27,275,875 59,652,293
2015 proposed final
dividend 260,681 — — — — — 260,681
10,946,985 16,326,240 227,955 45,462 5,090,457 27,275,875 59,912,974
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Other Share
Contributed Share reserve option Exchange Retained
surplus premium (note) reserve reserve profits Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
As at 1 July 2013 11,901,566 16,224,647 202,237 49,630 5,784,261 19,320,045 53,482,386
Profit for the year — — — — — 4,638,691 4,638,691
Premium on issue of
shares — 57,345 — — — — 57,345
Share-based payments — — — 12,920 — — 12,920
Transfer of reserve upon
exercise and lapse of
share options — 22,105 — (24,625) — 2,520 —
Acquisition of additional
interest in a
subsidiary — — 25,718 — — — 25,718
Dividends (694,027) — — — — — (694,027)
Translation differences
Subsidiaries — — — — (555,774) — (555,774)
Associated company
and joint ventures — — — — (83,077) — (83,077)
As at 30 June 2014
before proposed final
dividend 11,207,539 16,304,097 227,955 37,925 5,145,410 23,961,256 56,884,182
Representing:
As at 30 June 2014
after proposed
final dividend 10,946,992 16,304,097 227,955 37,925 5,145,410 23,961,256 56,623,635
2014 proposed final
dividend 260,547 — — — — — 260,547
11,207,539 16,304,097 227,955 37,925 5,145,410 23,961,256 56,884,182
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Note: Other reserve relates to fair value changes arising from business combination, the difference between the consideration paid and the related share of net assets acquired from the acquisition of additional interests in subsidiaries.

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Contributed surplus HK$’000 11,227,700 — — — — — (260,554)	Share premium HK$’000 16,304,097 16,742 — — 5,401 — —	Exchange reserve HK$’000 6,705,552 — — — — 288 —	Share option reserve HK$’000 37,925 — — 14,426 (6,889) — —
10,967,146	16,326,240	6,705,840	45,462
10,706,465 260,681	16,326,240 —	6,705,840 —	45,462 —
10,967,146	16,326,240	6,705,840	45,462
11,921,727 — — — — — (694,027)	16,224,647 57,345 — — 22,105 — —	7,077,674 — — — — (372,122) —	49,630 — — 12,920 (24,625) — —
11,227,700	16,304,097	6,705,552	37,925
10,967,153 260,547	16,304,097 —	6,705,552 —	37,925 —
11,227,700	16,304,097	6,705,552	37,925

The contributed surplus of the Company represents the excess of the consolidated net asset value of the subsidiaries acquired over the nominal value of the share capital of the Company issued in exchange thereof as a result of a reorganisation that took place in 1999, less distributions in subsequent years.

The loss attributable to equity holders of the Company is dealt with in the financial statements of the Company to the extent of the profit of HK$187,820,000 (2014: HK$917,660,000).

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33. LONG TERM BORROWINGS
Group Company
2015 2014 2015 2014
HK$’000 HK$’000 HK$’000 HK$’000
Bank loans (note i)
Secured 8,294,212 9,041,936 — —
Unsecured 18,356,558 16,324,119 4,760,382 3,157,694
Loans from fellow subsidiaries
(note ii) 2,646,438 2,637,823 — —
Loans from non-controlling interests
(note iii) 238,894 247,789 — —
Advances from participating interest
(note iv) 1,896,704 1,967,617 5,560,287 5,516,761
Fixed rate bonds and notes payable
(note v) 11,668,358 9,008,925 11,668,358 9,008,925
Loans from other financial institutions
(note i)
Secured — 70,000 — —
Unsecured 1,062,500 125,000 — —
44,163,664 39,423,209 21,989,027 17,683,380
Current portion included in current
liabilities (9,775,255) (14,197,174) (1,727,678) (6,823,029)
34,388,409 25,226,035 20,261,349 10,860,351
Notes:
(i) The loans from banks and other financial institutions are repayable as follows:
Group Company
Secured Unsecured Total Unsecured
2015 2014 2015 2014 2015 2014 2015 2014
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Within one year 2,535,759 2,826,491 7,239,496 6,075,777 9,775,255 8,902,268 1,727,678 1,496,979
Between one and
two years 2,291,554 2,536,297 3,446,545 5,871,229 5,738,099 8,407,526 90,000 1,660,715
Between two and
five years 2,185,499 2,347,910 8,733,017 4,326,488 10,918,516 6,674,398 2,942,704 —
After five years 1,281,400 1,401,238 — 175,625 1,281,400 1,576,863 — —
8,294,212 9,111,936 19,419,058 16,449,119 27,713,270 25,561,055 4,760,382 3,157,694
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(ii) The loans from fellow subsidiaries are repayable between one and two years (2014: one and two years), unsecured and bear interest at three months Hong Kong Interbank Offered Rate (‘‘HIBOR’’) (2014: three months HIBOR) per annum.
(iii) The loans from non-controlling interests are unsecured, have repayment terms as specified in the loan agreement and carry interest at 6.15% (2014: ranging from 5% to 6.15%) per annum except for HK$52,449,000 (2014: Nil) which is interest free.

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(iv) The advances from participating interest of certain property projects are unsecured, interest free and repayable
in accordance with the terms as specified in the agreements entered into between the Company and the
participating interest.
(v) On 29 March 2012 and 12 April 2012, the Company issued 8.5% bonds in the aggregate amounts of
RMB2,800 million and RMB1,500 million (equivalent to approximately HK$3,500 million and HK$1,875
million) respectively.
RMB2,800 million of the bonds were issued at a price of 100 per cent of the principal amount. RMB1,500
million of the bonds were issued at a price of 100.972% of the principal amount, resulting in a premium on
issue of RMB14.6 million (equivalent to approximately HK$18.3 million).
These bonds bore interest with a coupon rate of 8.5% per annum, payable semi-annually in arrears on 11
April and 11 October each year. These bonds were listed on The Stock Exchange of Hong Kong Limited. The
bonds were redeemed on the maturity date on 11 April 2015 at the principal amount.
On 6 February 2013, the Company issued 5.5% bonds in the aggregate amounts of RMB3,000 million
(equivalent to approximately HK$3,750 million). The bonds were issued at a price of 100 per cent of the
principal amount, bear interest at a coupon rate of 5.5% per annum, payable semi-annually in areas on the 6
February and 6 August each year. The bonds are listed on The Stock Exchange of Hong Kong Limited. The
bonds will be redeemed on the maturity date on 6 February 2018 at the principal amount.
As at 30 June 2015, the fair value of the bonds amounted to RMB3,100.4 million (equivalent to
approximately HK$3,875.5 million) (2014: RMB7,528.3 million (equivalent to approximately HK$9,410.4
million)).
On 6 November 2014, the Company issued 5.375% notes in the aggregation amounts of USD900 million
(equivalent to approximately HK$6,993 million). The notes were issued at a price of 99.676 per cent of the
principal amount, bear interest at a coupon rate of 5.375% per annum, payable semi-annually in arrears on 6
November and 6 May each year. The notes are listed on The Stock Exchange of Hong Kong Limited. The
notes will be redeemed on the maturity date on 6 November 2019 at the principal amount.
As at 30 June 2015, the fair value of the notes amounted to USD941.7 million (equivalent to approximately
HK$7,298.4 million).
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On 28 January 2015, the Company issued 5% notes in the aggregation amounts of HK$800 million. The notes were issued at a price of 100 per cent of the principal amount, bear interest at a coupon rate of 5% per annum, payable semi-annually in arrears on 28 January and 28 July each year. The notes will be redeemed on the maturity date on 28 January 2022 at the principal amount.

As at 30 June 2015, the fair value of the notes amounted to HK$837.1 million.

On 30 March 2015, the Company issued 4.75% notes in the aggregation amounts of HK$271 million. The notes were issued at a price of 98.839 per cent of the principal amount, bear interest at a coupon rate of 4.75% per annum, payable annually in arrears on 30 March each year. The notes will be redeemed on the maturity date on 30 March 2022 at the principal amount.

As at 30 June 2015, the fair value of the notes amounted to HK$283.6 million.

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(vi) The effective interest rates of borrowings are as follows:
2015 2014
Hong Kong United States Hong Kong United States
dollar Renminbi dollar dollar Renminbi dollar
Bank loans 2.60% 6.52% 1.89% 2.75% 6.47% 2.88%
Loans from fellow
subsidiaries 0.39% — 0.39% 0.38% — 0.38%
Loans from non-controlling
interests 2.50% 6.15% — 5.00% 6.15% —
Advances from
participating interest 5.23% — — 5.64% — —
Fixed rate bonds and notes
payable 4.94% 5.50% 5.38% — 7.19% —
Loans from other financial
institutions — 7.63% — — 6.47% —
(vii) The fair value of bank loans, loans from fellow subsidiaries, loans from non-controlling interests, advances
from participating interest and loans from other financial institutions are based on cash flows discounted using
cash flows discounted using the incremental borrowing rates and are within level 2 of the fair value hierarchy.
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(viii) The carrying amounts of the borrowings are denominated in the following currencies:

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Group Company
2015 2014 2015 2014
HK$’000 HK$’000 HK$’000 HK$’000
Hong Kong dollar 18,254,207 16,319,506 11,376,826 8,674,455
Renminbi 18,321,032 22,652,238 3,729,375 9,008,925
United States dollar 7,588,425 451,465 6,882,826 —
44,163,664 39,423,209 21,989,027 17,683,380
(ix) For the interest-bearing borrowings, except for the loans from non-controlling interests of HK$52,449,000
(2014: HK$51,477,000) which reprice in more than five years, the rest of the borrowings reprice or mature
(whichever is earlier) in one year or less.
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
34. DEFERRED TAX LIABILITIES
Deferred taxation is provided in full, using the liability method, on temporary differences using the prevailing rate of
taxation in which the Group operates.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred tax assets and liabilities relate to income taxed levied by the
same taxation authority on the taxable entity.
The movement in deferred tax assets and liabilities (prior to offsetting of balances within the same taxation
jurisdiction) during the year is as follows:
Group
Deferred tax assets/(liabilities)
Undistributed
Fair value profits of
Recognition adjustment subsidiaries,
Accelerated Revaluation of income of properties associated
tax of from sale of arising from company and
depreciation properties properties acquisition Tax losses joint venture Provisions Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 July 2013 (414,995) (1,063,211) (8,446) (1,082,222) 156,105 (452,855) 25,919 (2,839,705)
Exchange differences 5,293 15,033 106 13,417 (1,635) 7,954 (324) 39,844
Credited/(charged) to consolidated
income statement 8,557 (139,576) — 13,505 (5,728) (174,570) (2,813) (300,625)
Transfer — — — — — 27,250 — 27,250
Acquisition of subsidiaries — — — (178,996) — — — (178,996)
At 30 June 2014 (401,145) (1,187,754) (8,340) (1,234,296) 148,742 (592,221) 22,782 (3,252,232)
(Charged)/credited to consolidated
income statement (56,079) (176,581) — 39,427 21,275 (64,616) (3,751) (240,325)
Transfer — — — — — 4,230 — 4,230
Transfer to disposal group classified
as held for sale (24,081) — — — (9,919) — — (34,000)
At 30 June 2015 (481,305) (1,364,335) (8,340) (1,194,869) 160,098 (652,607) 19,031 (3,522,327)
Deferred tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax
benefit through future taxable profits is probable. The Group did not recognise deferred tax assets of
HK$513,638,000 (2014: HK$498,393,000) in respect of losses amounting to HK$2,054,550,000 (2014:
HK$1,993,572,000) to carry forward against future taxable income. These tax losses will expire at various dates up
to and including 2020 (2014: 2019).
As at 30 June 2015, the aggregate amount of temporary differences associated with investments in subsidiaries and
joint ventures for which deferred tax liabilities have not been recognised amounting to approximately
HK$8,753,369,000 (2014: HK$7,040,966,000), as the directors consider that the timing of reversal of the related
temporary differences can be controlled and the temporary differences will not be reversed in the foreseeable future.
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35. CREDITORS AND ACCRUALS

Trade creditors (note i) Other creditors and accruals (note ii)	Group 2015 2014 HK$’000 HK$’000 7,519,797 5,495,755 1,370,325 1,454,444 8,890,122 6,950,199	Company 2015 2014 HK$’000 HK$’000 — — 177,881 188,222 177,881 188,222

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Notes:
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(i) The ageing analysis of trade creditors is as follows:

0 to 30 days 31 to 60 days 61 to 90 days Over 90 days	Group 2015 2014 HK$’000 HK$’000 6,582,749 5,033,097 14,445 17,787 70,172 78,323 852,431 366,548 7,519,797 5,495,755

The carrying amounts of the trade creditors of the Group are mainly denominated in Renminbi as at 30 June 2015 and 2014.

(ii) Other creditors and accruals included retention payables of construction costs, other payables and various accruals. The carrying amounts of other creditors and accruals of the Group and the Company are mainly denominated in Renminbi and Hong Kong dollar respectively.

36. SHORT TERM LOANS

Loans from banks and other financial institutions Secured Unsecured	Group 2015 2014 HK$’000 HK$’000 625,000 — 376,250 — 1,001,250 —

As at 30 June 2015, the effective interest rates of the short term loans range from 8.3% to 10.05%. Their carrying amounts approximate their fair values.

The carrying amounts of short term loans are denominated in Renminbi.

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37. AMOUNTS DUE TO NON-CONTROLLING INTERESTS

The amounts due to non-controlling interests are unsecured, interest free and repayable on demand. The carrying amounts of the balances are mainly denominated in Hong Kong dollar as at 30 June 2015 and 2014 and approximate their fair values.

38. TAXES PAYABLE

Corporate income tax payable Withholding tax payable Land appreciation tax payable Other PRC taxes payable	Group 2015 2014 HK$’000 HK$’000 430,741 382,919 110,869 116,501 3,748,751 3,979,906 142,000 175,502 4,432,361 4,654,828	Company 2015 2014 HK$’000 HK$’000 — — 63,036 61,561 — — — — 63,036 61,561

39. GUARANTEES

(i) Corporate guarantees for banking facilities

Group

The Group has corporate guarantees of approximately HK$3,202,816,000 (2014: HK$2,734,066,000) given in respect of bank loan facilities extended to certain joint ventures. As at 30 June 2015, the Group’s attributable portion of the outstanding amount under these bank loan facilities granted to the joint ventures was approximately HK$2,683,191,000 (2014: HK$2,350,941,000).

Company

The Company has corporate guarantees given in respect of bank loan facilities extended to certain subsidiaries and joint ventures of approximately HK$21,027,226,000 (2014: HK$16,878,727,000) and HK$3,202,816,000 (2014: HK$2,734,066,000) respectively.

(ii) Guarantees in respect of mortgage facilities

As at 30 June 2015, the Group had provided guarantees in respect of mortgage facilities granted by certain banks relating to the mortgage loans arranged for certain purchasers of properties developed by certain subsidiaries of the Group and the Group’s attributable portion of outstanding mortgage loans under these guarantees amounted to HK$2,239,958,000 (2014: HK$2,034,561,000). Pursuant to the terms of the guarantees, upon default in mortgage payments by these purchasers, the Group is responsible to repay the outstanding mortgage principals together with accrued interest owed by the defaulted purchasers to the banks and the Group is entitled to take over the legal title and possession of the related properties.

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
40. COMMITMENTS
(i) Capital expenditure commitments
The capital expenditure commitments of the Group are as follows:
Group
2015 2014
HK$’000 HK$’000
Authorised but not contracted for
Purchase consideration for proposed development projects — 108,000
Property, plant and equipment 107,366 150,938
107,366 258,938
Contracted but not provided for
Property, plant and equipment 1,436,170 1,571,271
Investment properties 3,174,963 1,629,585
4,611,133 3,200,856
4,718,499 3,459,794
(ii) Lease commitments
Group Company
2015 2014 2015 2014
HK$’000 HK$’000 HK$’000 HK$’000
As at 30 June 2015, future
aggregate minimum lease
payments under non-
cancellable operating leases
in respect of land and
buildings are as follows:
Within one year 46,818 39,050 18,526 16,703
Between two and five
years 86,572 63,260 31,303 9,320
Beyond five years 66,149 47,807 — —
199,539 150,117 49,829 26,023
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41. NOTES TO CONSOLIDATED CASH FLOW STATEMENT

(a) Reconciliation of operating profit before finance costs to net cash generated from operations

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2015 2014
HK$’000 HK$’000
Operating profit before finance costs including discontinued operation 6,349,337 8,824,152
Interest income (374,689) (286,678)
Depreciation and amortisation 369,370 279,860
Share-based payments 14,426 12,920
Dividend income from an available-for-sale financial asset — (1,738)
Gain on disposal/write off of property, plant and equipment and
investment properties (34,257) (117,617)
Tax indemnity from the ultimate holding company (359,152) (1,075,306)
Loss on disposal of associated companies — 2,486
Gain on remeasuring previously held equity interests of joint ventures
at fair value upon further acquisition as subsidiaries — (67,257)
Impairment of intangible assets 56,375 125,892
Changes in fair value of investment properties (899,117) (616,122)
Net foreign exchange (gains)/losses (32,194) 281,791
Operating profit before working capital changes 5,090,099 7,362,383
Increase in properties held for/under development and completed
properties held for sale (5,338,383) (302,480)
(Increase)/decrease in prepayments, debtors and other receivables (2,881,177) 463,371
Changes in balances with related companies 514,219 1,436,726
Increase/(decrease) in deposits received on sale of properties 1,328,717 (4,442,495)
Increase/(decrease) in creditors and accruals 2,048,658 (784,297)
Net cash generated from operations 762,133 3,733,208
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(b) Analysis of net outflow of cash and cash equivalents in respect of acquisition of subsidiaries
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The Group acquired subsidiaries for the year ended 30 June 2014 and the identified assets acquired and liabilities assumed as at the date of acquisition are as follows:

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2014
HK$’000
Property, plant and equipment 173,900
Land use rights 64,437
Properties held for development 562,500
Intangible assets 124,127
Completed properties held for sale 141,420
Prepayments, debtors and other receivables 154,150
Cash and bank balances 10,612
Deposits received on sale of properties (1,128)
Creditors and accruals (102,817)
Taxes payable (81,342)
Long terms borrowings (101,000)
Amount due to a joint venture (62,500)
Deferred tax liabilities (178,996)
Non-controlling interests (296)
Net assets acquired 703,067
Interest originally held by the Group as joint ventures (257,878)
445,189
Goodwill 11,903
Gain on remeasuring previously held equity interests of joint ventures
at fair value upon further acquisition as subsidiaries (67,257)
389,835
2014
HK$’000
Cash consideration paid 389,835
Consideration to be paid (15,000)
Cash and bank balances acquired (10,612)
364,223
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42. RELATED PARTY TRANSACTIONS
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(i) Transactions with related parties
The following is a summary of significant related party transactions carried out by the Group during the year in the normal course of its business:

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2015 2014
Note HK$’000 HK$’000
Interest expenses on loans from fellow subsidiaries (a) 8,615 8,550
Rental expense for leased premises to fellow subsidiaries (b) 26,246 19,857
Property agency fee paid to fellow subsidiaries (c) 6,403 13,162
Purchase of goods from fellow subsidiaries and a related
company (d) 83,574 110,813
Interest income from joint ventures (e) 87,927 73,005
Property management services fee income from fellow
subsidiaries, joint ventures and related companies (f) 40,410 48,466
Rental income from fellow subsidiaries, a joint venture
and a related company (g) 98,196 124,431
Hotel management services fee income from fellow
subsidiaries, joint ventures and related companies (h) 126,649 97,964
Project management fee income from joint ventures and
related companies (i) 64,367 35,582
Contracting service income from related companies (j) 186,997 428,466
Sales of properties to a fellow subsidiary and a related
company (k) — 46,450
Notes:
(a) Interest is charged at rates as specified in note 33(ii) on the outstanding balances due to certain fellow
subsidiaries.
(b) The rental is charged at fixed monthly fees in accordance with the terms of the tenancy agreements.
(c) The property agency fee is charged by the fellow subsidiaries in accordance with the terms of the
property agency agreements.
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(d) This represents purchases of goods by means of presenting various cash equivalent gift coupons, gift cards and stored value shopping cards to the stores operated by the fellow subsidiaries and a related company. Such fee is charged in accordance with the terms of the agreements.
(e) This represents interest income in respect of loan financing provided to joint ventures. These loans are unsecured and carry interest at rates as specified in note 22.
(f) The property management services fees are charged at fixed amounts to fellow subsidiaries, certain joint ventures and related companies as specified in the management contracts.
(g) The rental income is charged at fixed monthly fees in accordance with the terms of the tenancy agreements.
(h) The hotel management services fee income is charged in accordance with the terms of the management service agreement.
(i) The project management fee income is charged in accordance with the terms of the agreement.

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(j) The contracting services income is charged in accordance with the terms of the agreement. (k) During the year ended 30 June 2014, a joint venture of the Group sold certain properties to Aerospace New World (China) Technology Limited and Shenzhen Sunlong Communication Co., Ltd., a related company and a fellow subsidiary of the Group, respectively, for a consideration of RMB17,088,000 (equivalent to HK$21,630,000) and RMB19,608,000 (equivalent to HK$24,820,000) respectively.
(l) Total fees for the provision of project management, construction and engineering consultancy services in respect of certain of the Group’s property projects paid and payable to certain fellow subsidiaries and related companies for the year amounted to HK$439,999,000 (2014: HK$255,414,000). Such fees are charged at fixed amounts in accordance with the terms of the respective contracts.
(m) A deed of tax indemnity was entered into between the ultimate holding company and the Company whereby the ultimate holding company undertakes to indemnify the Group in respect of CIT and LAT payable in consequence of the disposal of certain properties held by the Group as at 31 March 1999. During the year, tax indemnity amounting to HK$359,152,000 (2014: HK$1,075,306,000) was effected (note 13).
(n) In November 2014, the Group entered into a termination agreement with Hubei New World Department Store Co., Ltd. (‘‘NWDS Hubei’’), a fellow subsidiary of the Group, to early terminate the lease agreement at a consideration of RMB51,128,000 (equivalent to HK$63,910,000) (subject to adjustment). The consideration was subsequently adjusted to RMB40,331,000 (equivalent to HK$50,414,000) and an amount of RMB21,128,000 (equivalent to HK$26,410,000) has been paid to NWDS Hubei during the year ended 30 June 2015.
(o) During the year ended 30 June 2014, the Group acquired a hotel management company from CTF Holdings Limited, a related company of the Group at the consideration of €13,536,000 (equivalent to approximately HK$144,835,000).
(p) During the year ended 30 June 2014, the Group has acquired remaining interests in Dragon Fortune Limited from other shareholders, of which Sun City Holdings Limited and Potassium Corp. are associates of Mr Peter Cheng and that Brinkley Holdings Ltd is beneficially owned by Mr Stewart Cheng, for a consideration of HK$245,000,000. Upon completion, Dragon Fortune Limited became an indirect wholly owned subsidiary of the Group.

(ii) Key management compensation

Salaries and other short-term employee benefits Pension costs Share option benefits	2015 2014 HK$’000 HK$’000 135,216 120,375 5,188 5,100 1,786 3,056 142,190 128,531

Key management includes executive directors, financial controller, company secretary, regional executives and senior executives of hotel management team.

(iii) Balances with related parties

Balances with associated company, joint ventures, group companies and companies owned by a director are disclosed in notes 22 and 30.

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
43. EVENT AFTER REPORTING PERIOD
On 3 July 2015, New World Development (China) Limited (‘‘NWDC’’), a wholly owned subsidiary of the Group,
entered into the sales and purchase agreement with Chow Tai Fook Enterprises Limited to sell its entire equity
interest in New World Hotel Management (BVI) Limited (‘‘NWHM’’) together with related outstanding shareholder’s
loan and accrued interest due and owing by NWHM to NWDC for an aggregate cash consideration of
HK$1,963,000,000. Subject to fulfillment of several conditions precedent, the disposal is expected to be completed
on or before 31 December 2015 at a gain of approximately HK$844,000,000.
44. PARTICULARS OF PRINCIPAL SUBSIDIARIES, ASSOCIATED COMPANY AND JOINT VENTURES
Details of the principal subsidiaries, associated company and joint ventures which materially affect the results for the
year and/or assets of the Group as at 30 June 2015 are set out below:
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
Subsidiaries
Incorporated and operating in Hong Kong
Able Kingdom Limited HK$1 — — 100% 100% Investment holding
1 ordinary share
Best Goal International Limited HK$1 — — 100% — Investment holding
1 ordinary share
Billion Huge (International) HK$950,001 — — 100% 100% Investment holding
Limited 950,001 ordinary shares
Billion Park Investment Limited HK$1,000,000 — — 78.6% 78.6% Investment holding
1,000,000 ordinary shares
China Joy International Limited HK$2 — — 100% 100% Investment holding
2 ordinary shares
Dragon Joy (China) Limited HK$1 — — 100% 100% Investment holding
1 ordinary share
Global Hero Holdings Limited HK$1 — — 100% 100% Investment holding
1 ordinary share
Lingal Limited HK$2,000 — — 100% 100% Investment holding
1,800 ordinary shares
200 non-voting
deferred shares
Max Charm Investment Limited HK$2 — — 100% 100% Investment holding
2 ordinary shares
New World China Estate Agents HK$1 — — 100% — Estate agency
Limited 1 ordinary share
New World China Property HK$2 100% 100% 100% 100% Investment holding
Limited 2 ordinary shares
New World Development (China) HK$4 100% 100% 100% 100% Investment holding
Limited 2 ordinary shares
2 non-voting
deferred shares
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
New World Hotel Management HK$1 — — 100% 100% Hotel management
Limited 1 ordinary share
Pacific Great Investment Limited HK$50,000,000 — — 100% 100% Investment holding
50,000,000 ordinary
shares
Penta Hotels (Asia Pacific) HK$1 — — 100% 100% Hotel management
Limited 1 ordinary share
Rosewood Hotels and Resorts HK$1 — — 100% 100% Hotel management
(Asia Pacific) Limited 1 ordinary share
Silver World H.K. Development HK$1 — — 100% 100% Investment holding
Limited 1 ordinary share
Spread Glory Investments Limited HK$1 — — 100% 100% Investment holding
1 ordinary share
Sunny Trend Development HK$2 — — 100% 100% Investment holding
Limited 2 ordinary shares
Super Gain Limited HK$1 — — 100% — Investment holding
1 ordinary share
Wing Shan International Country HK$1,000,000 — — 89.2% 89.2% Investment holding
Club Co. Limited 1,000,000 ordinary shares
Incorporated in the British Virgin Islands
Art Bridge Development Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Art Shadow Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Banyan Developments Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Brilliant Alpha Investment US$1 — — 100% 100% Investment holding
Limited 1 share of US$1
Conful Enterprises Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Dragon Fortune Limited US$57,895 — — 100% 100% Investment holding
57,895 shares of US$1
each
Esteemed Sino Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Ever Brisk Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Fortune Star Worldwide Limited US$100 — — 100% 100% Investment holding
100 shares of
US$1 each
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
Flighting Unicorn Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Fu Hong Investments Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Goodtrade Enterprises Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Hinto Developments Limited US$1 — — 100% 100% Investment holding
1 share of US$1
K Fai Investments Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Keep Bright Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Lucky Win Development Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Magic Chance Limited US$1 — — 100% 100% Investment holding
1 share of US$1
New World Anderson US$100 — — 100% 100% Investment holding
Development Company 100 shares of
Limited US$1 each
New World China Finance (BVI) US$1 — — 100% 100% Financing
Limited 1 share of US$1
New World Hotel Management US$1,000 — — 100% 100% Investment holding
(BVI) Limited 1,000 shares of
US$1 each
Penta Hotel Holdings Limited US$1,000 — — 100% 100% Investment holding
1,000 shares of
US$1 each
Radiant Glow Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Ramada Property Ltd. US$1,000 — — 100% 100% Investment holding
1,000 shares of
US$1 each
Rise Eagle Worldwide Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Rosewood Hotels and Resorts US$1 — — 100% 100% Investment holding
Holdings Limited 1 share of US$1
Sparkling Rainbow Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Stand Fame Enterprises Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Superb Wealthy Group Limited US$1 — — 100% 100% Financing
1 share of US$1
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
Sweet Prospects Enterprises US$1 — — 100% 100% Investment holding
Limited 1 share of US$1
Triumph Hero International US$10,000 — — 100% 100% Investment holding
Limited 10,000 shares of US$1
each
True Blue Developments Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Twin Glory Investments Limited US$1 — — 100% 100% Investment holding
1 share of US$1
Incorporated and operating in the Philippines
NWH Management Philippines, Peso 9,492,000 — — 100% 100% Hotel management
Incorporated 94,920 shares of
Peso 100 each
Incorporated and operating in the US
Rosewood Hotels and Resorts, US$260,623,748 — — 100% 100% Hotel management
L.L.C.
Incorporated and operating in Germany
Penta Hotels Germany GmbH Euro25,000 — — 100% 100% Hotel management
Incorporated and operating in the PRC
Beijing Dongfang Huamei Real RMB200,000,000 — — 75% 75% Land development
Estate Development Co., Ltd. (note 2)
Beijing Lingal Real Estates US$13,000,000 — — 100% 100% Property sales
Development Co., Ltd.
Beijing New World Huamei Real RMB748,000,000 — — 75% 75% Property development
Estate Development Co., Ltd.
Chengdu Flighting Unicorn RMB5,000,000 — — 100% 100% Management services
Management Services Co., Ltd.
Chengdu Xinyi Real Estate US$99,500,000 — — 60% 60% Property development
Development Co., Ltd. (note 2)
Dalian New World Plaza RMB58,000,000 — — 88% 88% Property investment and
International Co., Ltd. development
Dalian New World US$197,324,700 — — 100% 100% Property investment,
Tower Co., Ltd. development and hotel
operation
Fengshi Trading (Shanghai) US$2,170,000 — — 100% — Property investment
Co., Ltd.
Fortune Leader Overseas Chinese US$16,950,000 — — 100% 100% Golf club and resort
(Daiyawan) Investment Co. operation
Ltd.
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
Fortune Leader Overseas Chinese US$20,820,000 — — 100% 100% Property development
(Daiyawan) Real Estate
Development Co. Ltd.
Foshan Country Club Co., Ltd. US$52,923,600 — — 84.8% 84.8% Golf club operation
Foshan Country Real Estate RMB638,030,000 — — 84.8% 84.8% Property development
Development Co., Ltd.
Foshan Da Hao Hu Real Estate RMB1,278,558,000 — — 84.8% 84.8% Property development
Development Co., Ltd.
Guangzhou Fong Chuen — RMB330,000,000 — — 100% 100% Property development
New World Property
Development Ltd.
Guangzhou Jixian Zhuang New US$24,000,000 — — 100% 100% Property development
World City Garden
Development Limited
Guangzhou Xin Hua Chen Real RMB200,000,000 — — 100% 100% Property development
Estate Co., Ltd.
Guangzhou Xin Hua Jian Real RMB244,000,000 — — 100% 100% Property development
Estate Co., Ltd.
Guangzhou Xin Sui Tourism HK$180,000,000 — — 100% 100% Property development
Centre Ltd.
Guangzhou Xin Yi Development HK$286,000,000 — — 90.5% 90.5% Property investment and
Limited development
Guangzhou Yibo Real Estate RMB392,500,000 — — 100% 100% Property development
Development Co., Ltd.
Guiyang New World Real Estate US$301,350,000 — — 100% 100% Property development and
Co., Ltd. (note 2) hotel operation
Haikou New World Housing US$8,000,000 — — 100% 100% Property development
Development Ltd.
Huamei Wealth (Beijing) RMB640,000,000 — — 100% 100% Property investment
Technology Co., Ltd.
Hunan Fortune Lake Property RMB205,265,854 — — 100% 100% Property development
Development Co., Ltd.
Hunan Success New Century RMB680,000,000 — — 95% 95% Property development
Investment Company Limited (note 2)
Jinan New World Sunshine US$69,980,000 — — 100% 100% Property development
Development Limited
Langfang New World Properties US$145,300,000 — — 100% 100% Property development
Development Co., Ltd.
Langfang Xin Zhong Properties US$68,200,000 — — 100% 100% Property development
Development Co., Ltd.
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
Nanjing New World Real Estate US$45,339,518 — — 100% 100% Property investment
Co., Ltd.
New World Anderson (Tianjin) US$5,500,000 — — 100% 100% Property investment
Development Co., Ltd.
New World (Anshan) Landscape RMB10,000,000 — — 100% 100% Landscape engineering
Engineering Limited
New World (Anshan) Property RMB1,420,000,000 — — 100% 100% Property development
Development Co., Ltd.
New World China Land (Haikou) US$600,000,000 — — 100% 100% Property investment and
Limited development
New World China Land US$80,000,000 100% 100% 100% 100% Investment holding
Investments Company Limited
New World Development US$112,000,000 — — 100% 100% Property investment and
(Wuhan) Co., Ltd. development
New World Development US$1,800,000 — — 100% 100% Landscape engineering
(Wuhan) Landscape
Engineering Limited
New World Enterprises (Wuhan) US$16,000,000 — — 100% 100% Property development
Ltd.
New World Goodtrade (Wuhan) US$188,000,000 — — 100% 100% Property investment and
Limited development
New World New Land Real US$269,810,000 — — 100% — Property development
Estate (Wuhan) Co., Ltd.
New World (Shenyang) Property RMB5,647,800,000 — — 100% 100% Property investment and
Development Limited development
Rosewood Hotels & Resorts RMB500,000 — — 100% 100% Hotel management
(Shanghai) Limited consultancy services
Shanghai Ramada Plaza Ltd. US$42,000,000 — — 100% 100% Property investment and
hotel operation
Shanghai Trio Property US$81,000,000 — — 100% 100% Property investment
Development Co., Ltd.
Shenyang New World Xin Hui RMB501,520,000 — — 100% 100% Property development
Properties Co., Ltd.
Shenzhen Top One Real Estate HK$150,000,000 — — 100% 100% Property development
Development Co., Ltd.
Shenzhen Topping Real Estate HK$294,000,000 — — 100% 100% Property development
Development Co., Ltd.
Taiding Trading (Shanghai) Co., US$7,800,000 — — 100% 100% Property investment
Ltd.
Tang Shan New World Property US$117,000,000 — — 100% 100% Property development
Development Co., Ltd.
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
Tianjin New World Housing RMB80,000,000 — — 100% 100% Property development
Development Co., Ltd.
Tianjin New World Properties US$91,000,000 — — 100% 100% Property development
Development Co., Ltd.
Tianjin Xin Guang Development US$4,500,000 — — 100% 100% Property investment
Co., Ltd.
Wuhan New Eagle Enterprises US$2,830,000 — — 100% 100% Property investment
Co., Limited
Wuhan Xinhan Development Co., US$16,000,000 — — 100% 100% Property development
Ltd. (note 3)
Zhaoqing New World Property US$16,500,000 — — 100% 100% Property development
Development Limited
Zhuhai New World Housing US$8,000,000 — — 100% 100% Property development
Development Limited
Associated company
Incorporated and operating in Hong Kong
Sun Legend Investments Limited HK$1,000 — — 50% 50% Investment holding
1,000 ordinary shares
Joint ventures
Incorporated and operating in Hong Kong
Eminent Elite Limited HK$1 — — 49% 49% Investment holding
1 ordinary share
Fergurson Hotel Management HK$2 — — 50% 50% Hotel management
Limited 2 ordinary shares
Global Perfect Development HK$1,000,000 — — 50% 50% Investment holding
Limited 1,000,000 ordinary shares
Incorporated in the British Virgin Islands
Concord Properties Holding US$10 — — 40% 40% Investment holding
(Guangzhou) Limited 10 ordinary shares of
US$1 each
Silvery Yield Development US$100 — — 49% 49% Investment holding
Limited 100 ordinary shares of
US$1 each
Incorporated and operating in the PRC
(i) Co-operative joint ventures
Beijing Chong Wen — US$225,400,000 — — 70% 70% Property investment and
New World Properties (note 4) development and hotel
Development Co., Ltd. operation
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Issued and fully paid up Attributable interest held (note 1)
share capital/paid up By the Company By the Group
Company name registered capital 2015 2014 2015 2014 Principal activities
Beijing Chong Yu Real US$171,840,000 — — 70% 70% Property investment and
Estate Development Co., (note 4) development
Ltd.
Beijing Xin Kang Real Estate US$12,000,000 — — 70% 70% Property investment and
Development Co., Ltd. (note 4) development
Beijing Xin Lian Hotel Co., US$12,000,000 — — 55% 55% Hotel operation
Ltd. (note 4)
China New World Electronics US$57,200,000 — — 70% 70% Property Investment and
Ltd. (note 4) development
Huizhou New World Housing RMB80,000,000 — — 62.5% 62.5% Property development
Development Limited (note 4)
Wuhan New World Housing RMB96,000,000 — — 60% 60% Property development
Development Limited (note 4)
Wuhan Wuxin Hotel Co. Ltd. US$49,750,000 — — 60% 60% Hotel operation
(note 4)
(ii) Wholly foreign owned enterprises
Guangzhou Bosson Real RMB50,003,000 — — 62.5% 62.5% Property development
Estate Co., Ltd. (note 4)
Guangzhou Hemsell Real RMB79,597,000 — — 62.5% 62.5% Property development
Estate Development Co., (note 4)
Ltd.
Ningbo Gong Tai Properties RMB235,000,000 — — 49% — Property development
Co., Ltd.
Ningbo Xin Li Real Estate US$802,335,000 — — 49% 49% Property development
Co. Ltd.
Shanghai New World Huai US$108,500,000 — — 50% 50% Property investment
Hai Property Development
Co., Ltd.
Wuhan New World Hotel RMB83,507,110 — — 60% 60% Property investment
Properties Co., Ltd. (note 4)
Notes:
1. Represent equity interest in case of companies incorporated outside the PRC or the percentage of equity
interest in case of equity joint ventures or profit sharing ratio in accordance with the joint venture contracts in
case of co-operative joint ventures in the PRC.
2. Represent equity interest of the Group in these companies. Pursuant to the participation agreement dated 11
September 2006 entered into between the Company and Solar Leader Limited (‘‘Solar Leader’’), a wholly
owned subsidiary of NWD, Solar Leader has a participating interest, representing 50% of the total interest of
the Group in certain property projects undertaken by these companies.
3. Represent profit sharing ratio of the Group in accordance with the contractual arrangement between the
shareholders.
4. The Group does not control these companies even though the attributable interest held by the Group is more
than 50% as the decisions about the relevant activities require the unanimous consent of the parties sharing
the control in accordance with the contractual arrangement.
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APPENDIX II

FINANCIAL INFORMATION OF THE NWCL GROUP

(B) UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Condensed Consolidated Income Statement

For the six months ended 31 December 2015

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Unaudited
6 months ended 31 December
2015 2014
Note HK$’000 HK$’000
Continuing operations
Revenues 2 7,300,446 8,434,173
Cost of sales (4,931,422) (5,407,620)
Gross profit 2,369,024 3,026,553
Other income 3 234,641 366,447
Other losses, net 4 (1,228,867) (123)
Changes in fair value of investment properties 588,454 630,439
Selling expenses (451,795) (419,463)
Administrative and other operating expenses (795,533) (754,928)
Operating profit before finance costs 5 715,924 2,848,925
Finance costs (145,777) (147,800)
Share of results of associated company and
joint ventures (24,507) 179,227
Profit before taxation 545,640 2,880,352
Taxation charge 6 (857,327) (1,306,695)
(Loss)/profit for the period from
continuing operations (311,687) 1,573,657
Discontinued operation
Gain on disposal of discontinued operation 768,894 —
Loss for the period from discontinued
operation 12 (19,603) (94,103)
749,291 (94,103)
Profit for the period 437,604 1,479,554
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Unaudited
6 months ended 31 December
2015 2014
Note HK$’000 HK$’000
Profit attributable to:
Equity holders of the Company
From continuing operations (207,084) 1,609,328
From discontinued operation 749,291 (94,103)
542,207 1,515,225
Non-controlling interests (104,603) (35,671)
437,604 1,479,554
Earnings per share 7
Basic (loss)/earnings per share
From continuing operations (2.38) cents 18.53 cents
From discontinued operation 8.62 cents (1.08) cents
6.24 cents 17.45 cents
Diluted (loss)/earnings per share
From continuing operations (2.38) cents 18.51 cents
From discontinued operation 8.61 cents (1.08) cents
6.23 cents 17.43 cents
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Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2015
Unaudited
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Profit for the period 437,604 1,479,554
Other comprehensive income:
Items that may be reclassified to profit or loss:
Translation differences (1,757,278) 740,647
Share of other comprehensive income of
associated company and joint ventures (184,846) 22,039
Release of reserves upon disposal of subsidiaries (6,110) —
Other comprehensive income for the period (1,948,234) 762,686
Total comprehensive income for the period (1,510,630) 2,242,240
Total comprehensive income attributable to:
Equity holders of the Company (1,374,891) 2,280,610
Non-controlling interests (135,739) (38,370)
(1,510,630) 2,242,240
Total comprehensive income attributable to equity
holders of the Company arising from:
Continuing operations (2,134,006) 2,376,940
Discontinued operation 759,115 (96,330)
(1,374,891) 2,280,610
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Condensed Consolidated Statement of Financial Position
As at 31 December 2015
Unaudited Audited
As at As at
31 December 30 June
2015 2015
Note HK$’000 HK$’000
ASSETS
Non-current assets
Property, plant and equipment 9 5,241,850 5,831,924
Investment properties 9 22,677,651 24,684,353
Land use rights 9 577,501 720,144
Intangible assets 123,417 91,030
Properties held for development 13,751,920 19,741,250
Associated company and joint ventures 14,700,228 15,598,108
Available-for-sale financial assets 10 4,004,215 735,860
61,076,782 67,402,669
Current assets
Properties under development 16,387,630 17,671,570
Completed properties held for sale 14,408,004 19,885,358
Hotel inventories, at cost 3,915 4,102
Prepayments, debtors and other receivables 11 6,948,748 11,275,453
Amounts due from related companies 212,227 301,943
Cash and bank balances, unrestricted 18,130,524 15,773,665
56,091,048 64,912,091
Assets of disposal groups classified as
held for sale 12(a) 22,343,211 2,112,780
Non-current assets reclassified as
held for sale 12(b) 1,262,217 —
79,696,476 67,024,871
Total assets 140,773,258 134,427,540
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP

Note
EQUITY
Capital and reserves attributable to
the Company’s equity holders
Share capital
13
Reserves
Proposed final dividend
Non-controlling interests
Total equity
LIABILITIES
Non-current liabilities
Long term borrowings
14
Deferred tax liabilities
Current liabilities
Creditors and accruals
15
Deposits received on sale of properties
Amounts due to related companies
Short term loans
Current portion of long term borrowings
14
Amounts due to non-controlling interests
16
Taxes payable
Liabilities of disposal groups classified as
held for sale
12(a)
Total liabilities
Total equity and liabilities
– II-94 –

Unaudited
Audited
As at
31 December
2015
As at
30 June
2015
HK$’000
HK$’000
869,360
868,877
58,300,325
59,652,293
—
260,681
59,169,685
60,781,851
3,794,445
3,836,900
62,964,130
64,618,751
42,192,270
34,388,409
3,157,875
3,522,327
45,350,145
37,910,736
7,985,189
8,890,122
6,243,425
6,045,122
942,691
723,334
—
1,001,250
6,553,940
9,775,255
101,313
102,756
4,381,837
4,432,361
26,208,395
30,970,200
6,250,588
927,853
32,458,983
31,898,053
77,809,128
69,808,789
140,773,258
134,427,540

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APPENDIX II

FINANCIAL INFORMATION OF THE NWCL GROUP

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Condensed Consolidated Cash Flow Statement
For the six months ended 31 December 2015
Unaudited
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Net cash from/(used in) operating activities 1,671,504 (2,007,913)
Net cash used in investing activities
— Additions to property, plant and equipment,
land use rights and investment properties (2,486,562) (1,525,165)
— Additions to an available-for-sale financial asset (3,496,500) —
— Net increase in investments in associated company
and joint ventures (180,667) (790,079)
— Proceed from disposal of subsidiaries,
net of cash and cash equivalents disposed of 2,613,431 —
— Others 568,561 250,694
(2,981,737) (2,064,550)
Net cash from financing activities
— Net increase of borrowings 5,801,102 8,256,260
— Dividend paid (260,702) (260,554)
— Finance costs and others (1,060,035) (1,018,978)
4,480,365 6,976,728
Net increase in cash and cash equivalents 3,170,132 2,904,265
Cash and cash equivalents at beginning of the period 15,938,686 17,351,595
Exchange differences on cash and cash equivalents (130,185) 210,649
Cash and cash equivalents at end of the period 18,978,633 20,466,509
Analysis of cash and cash equivalents:
Unrestricted cash and bank balances 18,130,524 20,466,509
Unrestricted cash and bank balances attributable to
disposal groups classified as held for sale 848,109 —
18,978,633 20,466,509
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FINANCIAL INFORMATION OF THE NWCL GROUP

Condensed Consolidated Statement of Changes in Equity For the six months ended 31 December 2015

Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company
Share capital HK$’000 868,877	Reserves HK$’000 59,912,974	Shareholders’ funds HK$’000 60,781,851
— — —	(1,726,142) (184,846) (6,110)	(1,726,142) (184,846) (6,110)
— —	(1,917,098) 542,207	(1,917,098) 542,207
—	(1,374,891)	(1,374,891)
483 — — —	16,037 — 6,907 (260,702)	16,520 — 6,907 (260,702)
483
869,360	58,300,325	59,169,685

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FINANCIAL INFORMATION OF THE NWCL GROUP

Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company
Share capital HK$’000 868,335	Reserves HK$’000 56,884,182	Shareholders’ funds HK$’000 57,752,517
— —	743,346 22,039	743,346 22,039
— —	765,385 1,515,225	765,385 1,515,225
—	2,280,610	2,280,610
185 — — —	5,616 — 4,623 (260,554)	5,801 — 4,623 (260,554)
185
868,520	58,914,477	59,782,997

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NOTES TO THE INTERIM FINANCIAL STATEMENTS
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1. BASIS OF PREPARATION
These unaudited condensed consolidated interim financial statements (the ‘‘interim financial statements’’) for
the six months ended 31 December 2015 have been prepared in accordance with Hong Kong Accounting
Standard 34 ‘‘Interim Financial Reporting’’ issued by the Hong Kong Institute of Certified Public Accountants
and Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the ‘‘Listing Rules’’). The interim financial statements should be read in conjunction with the annual
financial statements for the year ended 30 June 2015, which have been prepared in accordance with Hong
Kong Financial Reporting Standards (‘‘HKFRS’’).
The accounting policies applied in the preparation of these interim financial statements are consistent with
those set out in the annual financial statements for the year ended 30 June 2015 as there are no new or revised
accounting standards effective for the year ending 30 June 2016.
The following new or revised standards and amendments to standards are mandatory for the accounting
periods beginning on or after 1 July 2016 or later periods but which the Group has not early adopted:
Effective for the year ending 30 June 2017
HKFRS 14 Regulatory Deferral Accounts
Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint Operations
Amendments to HKFRS 10, HKFRS 12 Investment Entities: Applying the Consolidation Exception
and HKAS 28 (Revised 2011)
Amendments to HKFRS 10 and HKAS 28 Sales or Contribution of Assets between an Investor and
its Associate or Joint Venture
Amendments to HKAS 1 Disclosure initiative
Amendments to HKAS 16 and HKAS 38 Clarification of Acceptable Methods of Depreciation and
Amortisation
Amendments to HKAS 27 Equity Method in Separate Financial Statements
Annual Improvements Project Annual Improvements 2012–2014 Cycle
Effective for the year ending 30 June 2019 or after
HKFRS 9 (2014) Financial Instruments
HKFRS 15 Revenue from Contracts with Customers
The Group has already commenced an assessment of the impact of these new or revised standards and
amendments to standards, certain of which may be relevant to the Group’s operation and may give rise to
changes in accounting policies, changes in disclosures and remeasurement of certain items in the financial
statements.
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2. REVENUES AND SEGMENT INFORMATION

(a) The Group is principally engaged in investment in and development of property projects in the People’s Republic of China (the ‘‘PRC’’). Revenues comprise turnover which include gross proceeds from sale of properties, revenue from rental and hotel operation, property management services fee income, project management fee income and contracting services income.

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6 months ended 31 December
2015 2014
HK$’000 HK$’000
Sale of properties 6,310,673 7,136,245
Rental income 428,181 414,830
Income from hotel operation 211,790 205,892
Property management services fee income 264,842 261,863
Project management fee income 58,701 73,873
Contracting services income 26,259 341,470
7,300,446 8,434,173
(b) The chief operating decision-maker has been identified as the executive committee. This committee
reviews the Group’s internal reporting in order to assess performance and allocate resources.
Management has determined the operating segments based on these reports.
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The executive committee assesses the performance of the operating segments based on a measure of attributable operating profit (‘‘AOP’’) before finance costs and after taxation charge. This measurement basis excludes the effects of changes in fair value of investment properties, net foreign exchange (losses)/gains, amortisation and impairment of intangible assets acquired from business combinations, income and expenses at corporate office and deferred tax charge on undistributed profits. Interest income is included in the result of each operating segment that is reviewed by the executive committee.

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FINANCIAL INFORMATION OF THE NWCL GROUP

During the period ended 31 December 2015, the condensed consolidated results of the hotel management services are presented as discontinued operation in accordance with HKFRS 5 ‘‘Noncurrent Assets Held for Sale and Discontinued Operations’’. Prior period comparative segment information has been re-presented to conform with the current period presentation accordingly.

		Continuing operations	Continuing operations
Property sales HK$’000 6,369,374 —	Rental operation HK$’000 447,309 (19,128)	Hotel operation HK$’000 211,790 —	Property management services HK$’000 320,003 (55,161)	Other operations HK$’000 28,657 (2,398)	Sub-total HK$’000 7,377,133 (76,687)
6,369,374 226,865	428,181 238,641	211,790 94,107	264,842 56,291	26,259 —	7,300,446 615,904
6,596,239	666,822	305,897	321,133	26,259	7,916,350
34,282	6,907	664	909	244	43,006
815,849 (13,937)	171,875 111,932	(54,836) (62,299)	(67,608) (673)	(13,927) 6,569	851,353 41,592
801,912	283,807	(117,135)	(68,281)	(7,358)	892,945
6,208,577 42,233 (134,073)	1,552,338 3,654 176,221	490,631 106,774 (67,626)	1,582 1,849 (673)	412,133 767 1,644	8,665,261 155,277 (24,507)

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Property
Property Rental Hotel management Other
As at 31 December 2015 sales operation operation services operations Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment assets 62,527,036 25,583,152 3,305,014 320,183 1,874,577 93,609,962
Associated company and
joint ventures 5,871,811 8,735,895 115,993 (26,540) 3,069 14,700,228
Available-for-sale financial assets 4,004,215
Property, plant and equipment at
corporate office 9,618
Prepayments, debtors, and
other receivables at
corporate office 17,420
Cash and bank balances at
corporate office 4,826,387
Assets of disposal groups
classified as held for sale 22,343,211
Non-current assets reclassified as
held for sale 1,262,217
Total assets 140,773,258
Segment liabilities 13,727,510 906,657 85,925 303,188 80,402 15,103,682
Creditors and accruals at
corporate office 256,379
Amounts due to related companies
at corporate office 51,787
Taxes payable 4,242,607
Borrowings 48,746,210
Deferred tax liabilities 3,157,875
Liabilities of disposal groups
classified as held for sale 6,250,588
Total liabilities 77,809,128
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FINANCIAL INFORMATION OF THE NWCL GROUP

		Continuing operations	Continuing operations
Property sales HK$’000 7,210,118 —	Rental operation HK$’000 439,480 (24,650)	Hotel operation HK$’000 205,892 —	Property management services HK$’000 313,289 (51,426)	Other operations HK$’000 343,370 (1,900)	Sub-total HK$’000 8,512,149 (77,976)
7,210,118 794,836	414,830 252,146	205,892 91,837	261,863 58,454	341,470 —	8,434,173 1,197,273
8,004,954	666,976	297,729	320,317	341,470	9,631,446
38,070	10,722	511	1,037	411	50,751
1,107,767 189,585	188,226 117,445	(61,233) (63,153)	(60,455) (751)	(11,307) 6,781	1,162,998 249,907
1,297,352	305,671	(124,386)	(61,206)	(4,526)	1,412,905
2,205,270 43,624 — 89,369	951,221 2,785 — 158,078	319,527 104,893 — (69,929)	3,116 2,295 — (751)	232,732 646 — 2,460	3,711,866 154,243 — 179,227

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Property
Property Rental Hotel management Other
As at 30 June 2015 sales operation operation services operations Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment assets 79,064,918 26,638,864 3,974,571 333,206 1,493,800 111,505,359
Associated company and joint
ventures 6,516,546 9,006,784 156,800 (84,424) 2,402 15,598,108
Available-for-sale financial assets 735,860
Property, plant and equipment at
corporate office 8,868
Prepayments, debtors and other
receivables at corporate office 13,708
Amounts due from related companies
at corporate office 202,793
Cash and bank balances at corporate
office 4,250,064
Assets of disposal groups classified
as held for sale 2,112,780
Total assets 134,427,540
Segment liabilities 14,944,497 298,539 105,387 298,141 91,789 15,738,353
Creditors and accruals at corporate
office 212,814
Taxes payable 4,242,528
Borrowings 45,164,914
Deferred tax liabilities 3,522,327
Liabilities of disposal groups
classified as held for sale 927,853
Total liabilities 69,808,789
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Reconciliations of reportable segment revenues to revenues of the Group and reportable AOP before
finance costs and after taxation charge to profit before taxation:
6 months ended 31 December
2015 2014
HK$’000 HK$’000
(i) Revenues
Total segment revenues 7,916,350 9,631,446
Less:
Revenues of associated company and joint ventures,
attributable to the Group (615,904) (1,197,273)
Revenues as presented in condensed consolidated income
statement 7,300,446 8,434,173
(ii) Profit before taxation
Total AOP before finance costs and after taxation charge 1,655,567 1,418,522
AOP from discontinued operation (762,622) (5,617)
AOP before finance costs and after taxation charge 892,945 1,412,905
Bank and other interest income — corporate 81,758 61,570
Deferred tax charge on undistributed profits (35,754) (10,280)
Corporate administrative expenses (153,051) (141,598)
Finance costs (152,086) (193,999)
AOP after corporate items 633,812 1,128,598
Changes in fair value of investment properties,
net of deferred taxation 453,653 470,341
Net foreign exchange (losses)/gains (1,294,549) 10,389
(840,896) 480,730
(Loss)/profit attributable to equity holders of the Company (207,084) 1,609,328
Taxation charge 857,327 1,306,695
Loss attributable to non-controlling interests (104,603) (35,671)
Profit before taxation 545,640 2,880,352
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
3. OTHER INCOME
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Tax indemnity from the ultimate holding company (note 6) 112,868 223,759
Bank and other interest income 86,489 110,301
Interest income from joint ventures, net of withholding tax (note) 319 32,387
Others 34,965 —
234,641 366,447
Note: The property projects of the Group’s joint ventures have been partly financed by the Group in the form
of equity capital and unsecured shareholder’s advances. The interest income from joint ventures is
recognised when the payment of interest has been approved by the Group’s joint ventures. The Group’s
attributable share of shareholders’ loan interest expenses of joint ventures is included in the share of
results of joint ventures as follows:
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Share of shareholders’ loan interest expenses of joint ventures (248) (25,589)
4. OTHER LOSSES, NET
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Net foreign exchange (losses)/gains (1,246,574) 6,433
Gain/(loss) on disposal of investment properties 25,688 (6,556)
Loss on remeasuring previously held equity interests of
a joint venture at fair value upon further acquisition as a subsidiary (7,981) —
(1,228,867) (123)
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5. OPERATING PROFIT BEFORE FINANCE COSTS
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Operating profit before finance costs is arrived at after crediting:
Gross rental income from investment properties 401,762 395,703
and after charging:
Cost of properties sold 4,198,884 4,405,813
Staff costs 340,693 300,198
Outgoings in respect of investment properties 179,600 168,668
Depreciation of property, plant and equipment 143,190 141,905
Rental for leased premises 19,564 21,991
Amortisation of land use rights 12,087 12,338
Loss on disposal of property, plant and equipment 4,088 11
6. TAXATION CHARGE
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Current taxation
PRC corporate income tax and withholding tax 527,598 421,668
PRC land appreciation tax 213,158 698,728
Deferred taxation 116,571 186,299
857,327 1,306,695
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Share of taxation of associated company and joint ventures for the six months ended 31 December 2015 of HK$113,726,000 (2014: HK$264,236,000) is included in the condensed consolidated income statement as share of results of associated company and joint ventures.

No provision for Hong Kong profits tax has been made as the Group has no estimated assessable profits in Hong Kong for the period (2014: Nil). PRC corporate income tax (‘‘CIT’’) has been provided on the estimated assessable profits of subsidiaries, associated company and joint ventures operating in the PRC at 25% (2014: 25%). PRC land appreciation tax (‘‘LAT’’) is provided at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sale of properties less deductible expenditures including costs of land use rights and property development expenditures.

In July 1999, a deed of tax indemnity was entered into between New World Development Company Limited, the ultimate holding company, and the Company whereby the ultimate holding company undertakes to indemnify the Group in respect of, inter alia, certain PRC CIT and LAT payable in consequence of the disposal of certain properties held by the Group as at 31 March 1999. During the period, tax indemnity amounting to HK$112,868,000 (2014: HK$223,759,000) was effected (note 3).

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7. EARNINGS PER SHARE
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The calculation of basic and diluted (loss)/earnings per share for the period is based on the following:
6 months ended 31 December
2015 2014
HK$’000 HK$’000
(Loss)/profit attributable to equity holders of
the Company arising from:
Continuing operations (207,084) 1,609,328
Discontinued operation 749,291 (94,103)
542,207 1,515,225
Number of shares
6 months ended 31 December
2015 2014
Weighted average number of shares for
calculating basic earnings per share 8,689,885,752 8,684,803,683
Effect of dilutive potential shares:
Share options 8,962,348 6,596,148
Weighted average number of shares for
calculating diluted earnings per share 8,698,848,100 8,691,399,831
8. INTERIM DIVIDEND
The directors have resolved not to declare an interim dividend for the six months ended 31 December 2015
(2014: Nil).
9. CAPITAL EXPENDITURE
For the six months ended 31 December 2015, the Group’s additions to property, plant and equipment,
investment properties and land use rights amounted to HK$2,487,207,000 (2014: HK$1,525,908,000).
10. AVAILABLE-FOR-SALE FINANCIAL ASSETS
As at 31 December 2015, the balance included perpetual equity securities in the principal amount of
US$450 million.
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11. PREPAYMENTS, DEBTORS AND OTHER RECEIVABLES

Trade debtors (note) Prepaid land preparatory cost Deposits for purchase of land Prepayment for proposed development projects Prepaid taxes Other prepayments, deposits and receivables	As at 31 December 2015 As at 30 June 2015 HK$’000 HK$’000 1,866,702 2,634,329 2,295,084 2,227,043 237,991 3,111,177 214,272 214,272 1,115,659 1,677,003 1,219,040 1,411,629 6,948,748 11,275,453

Note: Trade debtors mainly include sales proceed receivables, rental receivables and property management fee receivables. Sales proceed receivables in respect of sale of properties are settled in accordance with the instalment schedules as stipulated in the sales and purchase agreements. Monthly rental in respect of rental properties are payable in advance by tenants in accordance with the lease agreements. Monthly property management fees are payable in advance in accordance with the agreements. The ageing analysis of trade debtors based on invoice date is as follows:

0 to 30 days 31 to 60 days 61 to 90 days Over 90 days	As at 31 December 2015 As at 30 June 2015 HK$’000 HK$’000 728,631 723,946 30,595 541,948 63,695 285,012 1,043,781 1,083,423 1,866,702 2,634,329

(a) Discontinued operation and disposal groups classified as held for sale

On 3 July 2015, the Group entered into the sales and purchase agreement with Chow Tai Fook Enterprises Limited, the substantial shareholder of New World Development Company Limited, the immediate and ultimate holding company of the Group, to sell its entire interest in New World Hotel Management (BVI) Limited, its subsidiaries and a joint venture (collectively referred to as the ‘‘Disposal Hotel Group’’) and to assign and transfer of the shareholder’s loan. The Disposal Hotel Group is engaged in the provision of worldwide hotel management services, which is not the core business of the Group. The disposal of Disposal Hotel Group was completed on 29 December 2015 for an aggregate consideration of HK$2,753,000,000 with a gain on disposal of HK$768,894,000.

The Group entered into sales and purchase agreements with a wholly owned subsidiary of Evergrande Real Estate Group Limited, a company listed on the Main Board of The Stock Exchange of Hong Kong Limited, on 2 December 2015 and 29 December 2015, to sell its entire interest in Hinto Developments Limited, Dragon Joy (China) Limited, White Heron Limited, Superb Capital Enterprises Limited, Best Wealth Investments Limited, Triumph Hero International Limited, Rise Eagle Worldwide Limited and their subsidiaries and joint ventures (collectively referred to as the ‘‘Disposal Property Group’’) and to

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assign and transfer of the shareholders’ loan for an aggregate consideration of RMB20,800,000,000 (equivalent to HK$24,910,180,000). The Disposal Property Group is engaged in the provision of property sale and investment in Wuhan, Huiyang, Haikou, Guiyang and Chengdu.

As at 31 December 2015, the assets and liabilities related to the Disposal Property Group have been presented as held for sale and the condensed consolidated results of the Disposal Hotel Group for the six months then ended are presented as discontinued operation in accordance with HKFRS 5 ‘‘Noncurrent Assets Held for Sale and Discontinued Operations’’.

The condensed consolidated income statement and condensed consolidated statement of comprehensive income and condensed consolidated cash flow statement distinguish the discontinued operation from continuing operations. Comparative figures have been re-presented.

An analysis of the results, cash flows and assets and liabilities of the Disposal Hotel Group and Disposal Property Group is as follows:

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(i) Results of Disposal Hotel Group
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Unaudited
6 months ended 31 December
2015 2014
HK$’000 HK$’000
Revenue 317,936 264,620
Cost of sales (187,911) (169,023)
Gross profit 130,025 95,597
Other income 42 757
Other gains/(losses), net 96 (56,983)
Administrative and other operating expenses (115,301) (100,041)
Operating profit/(loss) before finance costs 14,862 (60,670)
Finance costs (13,426) (14,768)
Profit/(loss) before taxation 1,436 (75,348)
Taxation charge (21,039) (18,665)
Loss for the period from discontinued operation (19,603) (94,103)
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(ii)	Assets of Disposal Hotel Group and Disposal Property Group classified as held for sale	Assets of Disposal Hotel Group and Disposal Property Group classified as held for sale	Assets of Disposal Hotel Group and Disposal Property Group classified as held for sale
		As at		As at
		31 December		30 June
		2015		2015
		HK$’000	HK$’000
	Property, plant and equipment	1,333,225		13,729
	Investment properties	2,694,135		—
	Land use rights	100,780		—
	Intangible assets	—	1,693,855
	Properties held for development	10,080,707		—
	Associated company and joint ventures	1,049,727		—
	Properties under development	4,255,189		—
	Completed properties held for sale	1,352,011		—
	Hotel inventories, at cost	3,025		—
	Prepayments, debtors and other receivables	626,303		149,925
	Cash and bank balances	848,109		165,021
	Deferred tax assets	—		34,000
	Other assets	—		56,250
		22,343,211	2,112,780
(iii)	Liabilities of Disposal Hotel Group and Disposal Property Group classified as held for			sale
		As at		As at
		31 December		30 June
		2015		2015
		HK$’000	HK$’000
	Long term borrowings	2,338,525		818,072
	Creditors and accruals	936,976		92,846
	Deposits received on sale of properties	2,489,405		—
	Amounts due to related companies	22,358		—
	Taxes payables	100,181		16,935
	Deferred tax liabilities	363,143		—
		6,250,588		927,853

(iv) Cumulative (income)/loss recognised in other comprehensive inc Group and Disposal Property Group classified as held for sale Translation differences	ome relating to Disposal Hotel As at 31 December 2015 As at 30 June 2015 HK$’000 HK$’000 (953,410) 3,714

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(v) Cash flows of Disposal Hotel Group

Operating cash flows Investing cash flows Financing cash flows Net cash used in discontinued operation	Unaudited 6 months ended 31 December 2015 2014 HK$’000 HK$’000 11,657 84,469 (6,022) (1,830 (831,497) (42,577 (825,862) (40,062

(b) Non-current assets reclassified as held for sale

The Group entered into an agreement in October 2015 to sell a portion of the investment properties to a third party at a consideration of RMB1,200,028,000 (equivalent to HK$1,437,159,000) and accordingly, the respective portion of the investment properties are classified as held for sale.

13. SHARE CAPITAL

Authorised: 30,000,000,000 shares of HK$0.10 each Issued and fully paid: 8,693,601,081 (30 June 2015: 8,688,769,557) shares of HK$0.10 each	As at 31 December 2015 As at 30 June 2015 HK$’000 HK$’000 3,000,000 3,000,000 869,360 868,877

Details of the movement in the issued and fully paid share capital of the Company are summarised as follows:

At 1 July 2014 Exercise of share options (note) At 30 June 2015 Exercise of share options (note) At 31 December 2015	Number of shares of HK$0.10 each HK$’000 8,683,350,475 868,335 5,419,082 542 8,688,769,557 868,877 4,831,524 483 8,693,601,081 869,360

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Note:

Pursuant to the share option scheme adopted on 26 November 2002 (‘‘2002 Share Option Scheme’’) and the share option scheme adopted on 22 November 2011 (‘‘2011 Share Option Scheme’’), the Company may grant options to directors and employees of the Company or its subsidiaries to subscribe for shares in the Company. The movements in the number of share options granted during the period and the balance outstanding at 31 December 2015 are as follows:

(a) Movement of share options under the 2002 Share Option Scheme

Date of offer to grant Exercise price per share HK$ 31 May 2010 2.3491 10 November 2010 3.0131 18 January 2011 3.0361 26 July 2011 2.7051		Number of	share options	Number of share options exercisable At 31 December 2015 At 31 December 2015 — — — — 7,035,681 7,035,681 226,880 226,880 7,262,561 7,282,561
	At 1 July 2015 39,480 593,278 8,088,930 517,242	Exercised during the period (39,480) (581,936) (1,053,249) (290,362)	Lapsed during the period — (11,342) — —
	9,238,930	(1,965,027)	(11,342)

(b) Movement of share options under the 2011 Share Option Scheme

Date of offer to grant Exercise price per share HK$ 3 May 2012 2.4501 22 October 2012 3.3701 7 January 2013 3.8801 2 April 2013 3.3501 24 June 2013 2.7621 15 October 2013 4.0101 9 January 2014 3.9701 10 July 2014 4.7201 23 October 2014 4.4201 11 March 2015 4.9681 8 May 2015 5.4201 23 July 2015 4.5041		Num	ber of share options	ber of share options	Number of share options exercisable At 31 December 2015 At 31 December 2015 2,068,760 867,640 121,500 32,300 2,512,980 938,460 1,683,990 828,790 644,000 297,600 859,100 222,300 3,001,743 546,303 840,000 295,200 481,200 — 10,360,800 1,781,280 914,000 182,800 3,134,400 569,600 26,622,473 6,562,273
	At 1 July 2015 2,798,400 199,100 2,738,560 1,791,990 892,400 1,475,100 3,371,020 874,000 802,000 10,852,400 914,000 —	Granted during the period — — — — — — — — — — — 3,206,000	Exercised during the period (609,640) (77,600) (225,580) (108,000) (149,200) (616,000) (334,477) (34,000) (320,800) (319,600) — (71,600)	Lapsed during the period (120,000) — — — (99,200) — (34,800) — — (172,000) — —
	26,708,970	3,206,000	(2,866,497)	(426,000)

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On dates of grant, the share options are divided into five tranches and exercisable within a period of five years commencing on the expiry of one month after the dates on which the options were accepted.
The weighted average share price under the 2002 Share Option Scheme and the 2011 Share Option Scheme at the time of exercise during the six months ended 31 December 2015 was HK$5.296 per share (year ended 30 June 2015: HK$4.931 per share) and HK$5.578 per share (year ended 30 June 2015: HK$5.166 per share), respectively.
LONG TERM BORROWINGS

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As at As at
31 December 30 June
2015 2015
HK$’000 HK$’000
Bank loans (note i)
Secured 6,357,879 8,294,212
Unsecured 23,988,861 18,356,558
Loans from fellow subsidiaries (note ii) 2,650,886 2,646,438
Loans from non-controlling interests (note iii) 52,449 238,894
Advances from participating interest (note iv) 958,002 1,896,704
Fixed rate bonds and notes payable (note v) 11,696,217 11,668,358
Loans from other financial institutions (note i)
Secured 1,365,269 —
Unsecured 1,676,647 1,062,500
48,746,210 44,163,664
Current portion included in current liabilities (6,553,940) (9,775,255)
42,192,270 34,388,409
Notes:
(i) The loans from banks and other financial institutions are repayable as follows:
Secured Unsecured Total
As at As at As at As at As at As at
31 December 30 June 31 December 30 June 31 December 30 June
2015 2015 2015 2015 2015 2015
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Within one year 1,611,470 2,535,759 4,942,470 7,239,496 6,553,940 9,775,255
Between one and
two years 1,966,640 2,291,554 5,079,110 3,446,545 7,045,750 5,738,099
Between two and
five years 3,533,876 2,185,499 15,643,928 8,733,017 19,177,804 10,918,516
After five years 611,162 1,281,400 — — 611,162 1,281,400
7,723,148 8,294,212 25,665,508 19,419,058 33,388,656 27,713,270
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(ii) The loans from fellow subsidiaries are repayable between one and two years (30 June 2015: one and two years). The loans from fellow subsidiaries are unsecured and bear interest at three months Hong Kong Interbank Offered Rate (‘‘HIBOR’’) (30 June 2015: three months HIBOR) per annum.
(iii) The loans from non-controlling interests are unsecured, have repayment terms as specified in the loan agreement and interest free (30 June 2015: interest free except for HK$186,445,000 which bears interest at 6.15% per annum).
(iv) The advances from participating interest of certain property projects are unsecured, interest free and repayable in accordance with the terms as specified in the agreements entered into between the Group and the participating interest.
(v) On 6 February 2013, the Company issued 5.5% bonds in the aggregate amounts of RMB3,000 million (equivalent to approximately HK$3,797 million). The bonds were issued at a price of 100 per cent of the principal amount, bear interest at a coupon rate of 5.5% per annum, payable semi-annually in arrears on 6 February and 6 August each year. The bonds are listed on The Stock Exchange of Hong Kong Limited. The bonds will be redeemed on the maturity date on 6 February 2018 at the principal amount.

On 6 November 2014, the Company issued 5.375% notes in the aggregation amounts of USD900 million (equivalent to approximately HK$6,993 million). The notes were issued at a price of 99.676 per cent of the principal amount, bear interest at a coupon rate of 5.375% per annum, payable semiannually in arrears on 6 November and 6 May each year. The notes are listed on The Stock Exchange of Hong Kong Limited. The notes will be redeemed on the maturity date on 6 November 2019 at the principal amount.

15. CREDITORS AND ACCRUALS

Trade creditors (note i) Other creditors and accruals (note ii)	As at 31 December 2015 As at 30 June 2015 HK$’000 HK$’000 5,879,560 7,519,797 2,105,629 1,370,325 7,985,189 8,890,122

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Notes:
(i) The ageing analysis of trade creditors is as follows:
As at As at
31 December 30 June
2015 2015
HK$’000 HK$’000
0 to 30 days 5,229,473 6,582,749
31 to 60 days 11,562 14,445
61 to 90 days 19,127 70,172
Over 90 days 619,398 852,431
5,879,560 7,519,797
(ii) Other creditors and accruals include retention payables of construction costs, other payables and
various accruals.
16. AMOUNTS DUE TO NON-CONTROLLING INTERESTS
The amounts due to non-controlling interests are unsecured, interest free and repayable on demand.
17. GUARANTEES
(i) Corporate guarantees for banking facilities
The Group has corporate guarantees of approximately HK$2,990,525,000 (30 June 2015:
HK$3,202,816,000) given in respect of bank loan facilities extended to certain joint ventures. As at 31
December 2015, the Group’s attributable portion of the outstanding amount under these bank loan
facilities granted to the joint ventures was approximately HK$2,536,800,000 (30 June 2015:
HK$2,683,191,000).
(ii) Guarantees in respect of mortgage facilities
As at 31 December 2015, the Group had provided guarantees in respect of mortgage facilities granted
by certain banks relating to the mortgage loans arranged for certain purchasers of properties developed
by certain subsidiaries of the Group and the Group’s attributable portion of outstanding mortgage loans
under these guarantees amounted to HK$2,595,758,000 (30 June 2015: HK$2,239,958,000). Pursuant to
the terms of the guarantees, upon default in mortgage payments by these purchasers, the Group is
responsible to repay the outstanding mortgage principals together with accrued interest owed by the
defaulted purchasers to the banks and the Group is entitled to take over the legal title and possession of
the related properties.
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18. COMMITMENTS
Capital expenditure commitments
The capital expenditure commitments of the Group are as follows:
As at As at
31 December 30 June
2015 2015
HK$’000 HK$’000
Contracted but not provided for
Property, plant and equipment 1,038,195 1,436,170
Investment properties 2,696,396 3,174,963
3,734,591 4,611,133
19. RELATED PARTY TRANSACTIONS
(i) Transactions with related parties
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The following is a summary of significant related party transactions carried out by the Group during the period in the normal course of its business:

Interest expense on loans from fellow subsidiaries
Rental expense for leased premises to fellow subsidiaries
Property agency fee paid to fellow subsidiaries
Purchase of goods from fellow subsidiaries and a related company
Interest income from joint ventures
Property management services fee income from fellow subsidiaries,
joint ventures and related companies
Rental income from fellow subsidiaries and a related company
Hotel management services fee income from fellow subsidiaries,
joint ventures and related companies
Project management fee income from joint ventures and
related companies
Contracting service income from related companies

6 months ended 31 December
2015
2014
HK$’000
HK$’000
4,448
4,278
14,251
11,808
906
3,526
18,079
59,554
354
37,324
22,947
19,801
105,702
57,378
67,388
47,602
26,864
52,932
8,611
203,229

These related party transactions were in accordance with the terms as disclosed in the 2015 annual financial statements.

(ii) Total fees for the provision of project management, construction and engineering consultancy services in respect of certain of the Group’s property projects and payable to certain fellow subsidiaries and related companies for the period amounted to HK$170,439,000 (2014: HK$306,980,000). Such fees are charged at fixed amounts in accordance with the terms of the respective contracts.

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
(iii) A deed of tax indemnity was entered into between the ultimate holding company and the Company
whereby the ultimate holding company undertakes to indemnify the Group in respect of CIT and LAT
payable in consequence of the disposal of certain properties held by the Group as at 31 March 1999.
During the period, tax indemnity amounting to HK$112,868,000 (2014: HK$223,759,000) was effected
(note 6).
(iv) During the period ended 31 December 2014, the Group paid a sum of RMB21,128,000 (equivalent to
HK$26,744,000) to Hubei New World Department Store Co., Ltd., a fellow subsidiary of the Group, as
compensation for the early termination of the lease agreement.
(v) During the period ended 31 December 2015, the Group paid a sum of RMB 25,000,000 (equivalent to
HK$29,940,000) to Beijing Shishang New World Department Store Co., Ltd., a fellow subsidiary of the
Group, as compensation for the early termination of the lease agreement.
(vi) On 3 July 2015, New World Development (China) Limited (‘‘NWDC’’), a wholly owned subsidiary of
the Group, entered into the sales and purchase agreement with Chow Tai Fook Enterprises Limited to
sell its entire equity interest in New World Hotel Management (BVI) Limited (‘‘NWHM’’) together
with related outstanding shareholder’s loan and accrued interest due and owing by NWHM to NWDC.
The disposal was completed on 29 December 2015 for an aggregate cash consideration of
HK$2,753,000,000 (note 12(a)).
20. EVENT AFTER REPORTING PERIOD
On 2 December 2015 and 29 December 2015, the Group entered into sales and purchase agreements with a
wholly owned subsidiary of Evergrande Real Estate Group Limited, a company listed on the Main Board of
The Stock Exchange of Hong Kong Limited, to sell the Disposal Property Group, together with related
outstanding shareholders’ loans for an aggregate cash consideration of RMB20,800,000,000 (equivalent to
HK$24,910,180,000) (note 12(a)). The completion of disposal of most of the Disposal Property Group has
been duly executed as at the date of this report.
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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
Ill. INDEBTEDNESS, CONTINGENCIES AND COMMITMENTS
Borrowings
As at the close of business on 31 December 2015, being the latest practicable date for
this indebtedness statement, the details of the NWCL Group’s outstanding borrowings were as
follows:
HK$’000
Long term bank loans
Secured 6,357,879
Unsecured 23,988,861
Loans from fellow subsidiaries, unsecured 2,650,886
Loans from non-controlling interests, unsecured 52,449
Advances from participating interest, unsecured 958,002
Fixed rate bonds and notes payable, unsecured 11,696,217
Loans from other financial institutions
Secured 1,365,269
Unsecured 1,676,647
48,746,210
Liabilities of disposal groups classified as held for sale
Long term bank loans
Secured 883,353
Unsecured 648,503
Advances from participating interest, unsecured 806,669
2,338,525
Total 51,084,735
As at the close of business on 31 December 2015, the NWCL Group’s bank borrowings
and loans from other financial institutions of approximately HK$8,606,501,000 was secured
by the pledges of certain investment properties, property, plant and equipment, land use rights,
properties under development and properties held for development.
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Contingent liabilities

(i) Corporate guarantees for banking facilities

As at the close of business on 31 December 2015, the NWCL Group has corporate guarantees of approximately HK$2,990.5 million given in respect of bank loan facilities extended to certain joint ventures. As at 31 December 2015, the NWCL Group’s attributable portion of the outstanding amount under these bank loan facilities granted to the joint ventures was approximately HK$2,536.8 million.

(ii) Guarantees in respect of mortgage facilities

As at the close of business on 31 December 2015, the NWCL Group had provided guarantees in respect of mortgage facilities granted by certain banks relating to the mortgage loans arranged for certain purchasers of properties developed by certain subsidiaries of the NWCL Group and the NWCL Group’s attributable portion of outstanding mortgage loans under these guarantees amounted to HK$2,595.8 million. Pursuant to the terms of the guarantees, upon default in mortgage payments by these purchasers, the NWCL Group is responsible to repay the outstanding mortgage principals together with accrued interest owed by the defaulted purchasers to the banks and the NWCL Group is entitled to take over the legal title and possession of the related properties.

Save as aforesaid and apart from intra-group liabilities, the NWCL Group on a consolidated basis did not have any material debt securities issued and outstanding, and authorised or otherwise created but unissued, or term loans or other borrowings or indebtedness in the nature of borrowing or acceptances or hire purchase commitments, or outstanding mortgages and charges, or contingent liabilities or guarantees.

Saved as disclosed above, as at 31 December 2015, the NWCL Group did not have any bank overdrafts or loans, or other similar indebtedness, mortgages, charges, or guarantees or other material contingent liabilities.

IV. MATERIAL CHANGES

The NWCL Directors confirm that, save as disclosed in the interim results announcement of the NWCL Group for the six months ended 31 December 2015, in particular, the decrease in completion of properties, the increase in contracted sales and the recorded exchange losses owing to the depreciation of the Renminbi, and except for the anticipated recording of gains on the disposals as disclosed in Note 4 of the next section of this Appendix II headed ‘‘Property Interests and Adjusted Net Asset Value’’, as well as possible further exchange gains/losses arising from currency fluctuations since 31 December 2015, as at the Latest Practicable Date, there had been no material change to the financial and trading position or outlook of the NWCL Group since 30 June 2015, the date on which the latest published audited consolidated financial statements of the NWCL Group were made up.

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FINANCIAL INFORMATION OF THE NWCL GROUP

V. PROPERTY INTERESTS AND ADJUSTED NET ASSET VALUE

The valuation of property interests of the NWCL Group as at 31 December 2015 (excluding property interests held by the Disposed Groups (as defined in Note 4 of this section), the disposal of most of which had been duly completed as at the Latest Practicable Date) have been conducted by Knight Frank, the independent professional valuer appointed by NWCL. The market value of the aforesaid property interests attributable to the NWCL Group as at 31 December 2015 was approximately HK$125,297,344,000 (RMB104,623,282,000) in respect of the following categories of property interests:

Completed investment properties Investment properties under development Hotel properties Completed properties for sale/properties under and held for development Land and buildings Assets under construction Contracted properties held	HK$’000 RMB’000 24,629,889 20,565,957 5,881,677 4,911,200 3,961,736 3,308,050 75,924,986 63,397,363 687,918 574,412 3,800,000 3,173,000 10,411,138 8,693,300 125,297,344 104,623,282

Further details of the aforementioned property interests and the corresponding summary of valuation report prepared by Knight Frank are set out in ‘‘Appendix III — Summary of Property Valuation of the NWCL Group’’ to this Composite Document.

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APPENDIX II FINANCIAL INFORMATION OF THE NWCL GROUP
By taking into account the effect of revaluation surplus arising from the valuation of all the
above properties interests, set out below is the calculation of the adjusted unaudited consolidated
net asset value (‘‘Adjusted NAV’’) of the NWCL Group as at 31 December 2015:
HK$’000
Unaudited consolidated NAV of the NWCL Group as at
31 December 2015 (Note 1 ) 59,169,685
Adjustments:
— Revaluation surplus arising from valuation of the property interests
attributable to the NWCL Group as at 31 December 2015 (Note 2) 39,704,564
— Deferred taxes on attributable revaluation surplus, net of tax indemnity
(Notes 3 and 5) (9,866,224)
89,008,025
Estimated pro forma gain on disposal of subsidiaries and joint venture
(Note 4) 7,115,983
Adjusted NAV 96,124,008
Adjusted NAV per NWCL Share (Note 5) HK$11.05
Notes:
1. The amount is extracted from the unaudited condensed consolidated statement of financial position as at 31
December 2015 of section II of this Appendix II to this Composite Document.
2. The revaluation surplus represents the excess of market value of the property interests as at 31 December
2015 over their corresponding book values as at 31 December 2015 (after adjusting for the relevant interest
not attributable to the NWCL Group).
3. Relevant PRC taxes on property interests included corporate income tax and land appreciation tax. Deferred
taxes on revaluation surplus is estimated on the basis that surplus on all categories of property interests shall
be subject to corporate income tax (‘‘CIT’’) and estimation of land appreciation taxes (‘‘LAT’’) was only
determined for the surplus of completed properties for sales and property held for and under development. In
July 1999, a deed of tax indemnity was entered into between NWD and the NWCL whereby NWD undertakes
to keep indemnified the NWCL Group in respect of relevant CIT and LAT payable in consequence of sales of
certain properties held by the NWCL Group as at 31 March 1999. The outstanding tax indemnity payable by
NWD as at 31 December 2015 was approximately HK$4,330.0 million which is included to deduct from the
deferred tax on attributable revaluation surplus as at that date amounting to HK$14,196.2 million to arrive at
the net deferred tax on revaluation surplus of property interests of HK$9,866.2 million.
4. As disclosed in the joint announcements dated 2 December 2015 and 29 December 2015 issued by NWD and
NWCL, the circulars of NWCL dated 23 December 2015 and 19 January 2016, the NWCL Group entered into
agreements to dispose of certain subsidiaries and joint ventures (the ‘‘Disposed Groups’’), the disposal of most
of which had been duly completed as at the Latest Practicable Date. The aforementioned property interests
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and their corresponding valuation report prepared by Knight Frank have not included the relevant property interests held by the Disposed Groups since these property interests have been classified as assets held for sale in the interim financial statement as at 31 December 2015. For the purposes of calculation of the Adjusted NAV as at 31 December 2015, the impact from the gain on these disposals has to be incorporated in the calculation to duly reflect the effect of revaluation surplus of these disposed property interests. The estimated pro forma gain on these disposals is arrived at based on the consideration (being adjusted for certain estimated contingent costs in accordance with terms of the sales and purchase agreements) of these disposals after deducting the estimated attributable consolidated net assets values of the Disposed Group as at the corresponding completion dates and after taking into account the estimated tax payable, being calculated at a rate of 10% on the difference between the relevant considerations and the cost of investment of the Disposed Groups in accordance with the relevant tax laws in the PRC.

The Adjusted NAV per NWCL Share is arrived at on the basis of 8,701,671,754 Shares in issue as at the Latest Practicable Date.

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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP

The following is a text of the letter and summary of values prepared for the purpose of incorporation into this Composite Document received from Knight Frank Petty Limited, an independent valuer, in connection with the valuation as at 31 December 2015 of the market values of the property interests of the NWCL Group. The property interests of NWCL Group, as confirmed by the Company, are all located in the PRC.

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Knight Frank Petty Ltd 4/F Shui On Centre 6–8 Harbour Road Wanchai Hong Kong Tel: 2840 1177 Fax: 2840 0600

Board of Directors of New World China Land Limited (新世界中國地產有限公司) 9th Floor New World Tower 1 18 Queen’s Road Central Hong Kong

Board of Directors of New World Development Company Limited (新世界發展有限公司) 30th Floor

New World Tower 18 Queen’s Road Central Hong Kong

27 February 2016

Dear Sirs

VALUATION OF VARIOUS PROPERTIES IN THE PEOPLE’S REPUBLIC OF CHINA

In accordance with your instructions for us to value various property interests held by New World China Land Limited (新世界中國地產有限公司) (the ‘‘Company’’), its subsidiaries, its associated company and its joint ventures (hereinafter together referred to as the ‘‘Group’’) in the People’s Republic of China (the ‘‘PRC’’), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market values of these property interests as at 31 December 2015 (excluding the property interests held by certain subsidiaries and joint ventures of the Group which the Group had entered into agreements to dispose of in December 2015 (see the announcements dated 2 December 2015 and 29 December 2015, and circulars dated 23 December

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2015 and 19 January 2016 issued by the Company) and the disposal of most of which had been completed as at 24 February 2016) for the purpose of incorporation into the composite document issued by the Group.

BASIS OF VALUATION

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

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

VALUATION METHODOLOGY

In valuing properties nos. 1 to 47, commercial portion of no. 48, 49 to 85 of Group I and no. 147 of Group V, we have valued the properties with reference to sales evidence as available in the market and where appropriate, on the basis of capitalization of the net income shown on the documents handed to us. We have allowed for outgoings and, in appropriate cases, made provisions for reversionary income potential.

In valuing the car parking portion of property no. 48 of Group I, we have valued the property with reference to its lease term interest and its rights in sub-letting and/or transferring the lease term interests of the property.

In valuing properties of Group II, IV, VI and VII, we have valued each of these property interests on the basis that these properties will be developed and completed in accordance with the Group’s latest development proposals provided to us. We have assumed that approvals for the proposals will be granted without onerous conditions. In arriving at our opinion of value, we have adopted the Direct Comparison Approach by making reference to comparable transactions in the locality and have also taken into account the construction costs that will be expended to complete the development to reflect the quality of the completed development.

In valuing properties of Group III, we have valued each of these property interests on a going concern basis, and we have adopted the income approach by making reference to its historical performance over the past years. During the course of the valuation, we have relied on the gross operating profit generated from the hotel operation during corresponding periods and made reference to the required rate of return of similar forms of investment.

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In valuing property no. 146 of Group V, due to the specific purpose for which the buildings have been constructed, market transactions of comparable properties cannot be readily identified in the market. We have therefore adopted the Depreciated Replacement Cost approach in valuing the property. The Depreciated Replacement Cost is the current cost of replacement (reproduction) of a property less deduction for physical deterioration and all relevant forms of obsolescence and optimization. It is based on an estimate of the market value for the existing use of the land, plus the current cost of replacement (reproduction) of the improvements less deductions for physical deterioration and all relevant forms of obsolescence and optimization. We must state that cessation of the existing business (if any) would have significant impact on the market value of the property as derived by the Depreciated Replacement Cost approach. In valuing properties nos. 148 to 155 of Group V, we have adopted the Direct Comparison Approach with reference to market comparable sales evidence available in the market. Set out below are the key assumptions used in our valuation:

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Market unit price for
(i) Residential: RMB15,214 to RMB35,623 per sq.m. on GFA basis
(ii) Office: RMB4,435 to RMB51,950 per sq.m. on GFA basis
(iii) Commercial: RMB3,700 to RMB40,750 per sq.m. on GFA basis
(iv) Carpark: RMB65,000 to RMB385,000 per lot
(v) Land: RMB803 to RMB46,057 per sq.m. (accommodation value)
Market monthly unit rent for
(i) Residential: RMB110 to RMB161 per sq.m. on GFA basis
(ii) Office: RMB48 to RMB271 per sq.m. on GFA basis
(iii) Commercial: RMB7 to RMB550 per sq.m. on GFA basis
Capitalisation rate for
(i) Residential: 5% to 6.5%
(ii) Office: 5.5% to 8%
(iii) Commercial: 3% to 9.25%
Discount rate for
(i) Hotel: 6% to 7.5%
Terminal capitalisation rate for
(i) Hotel: 2.5% to 4%
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As advised by the Company, the potential tax liabilities which would arise on the direct disposal of the property interests held by the Company at the amounts valued by us mainly comprise the following:

. Business tax at 5% on the transaction amount (which will be replaced by value added tax in the future with detailed rules and regulations to be promulgated)
. Enterprise income tax at 25% on the gain
. Land appreciation tax at progressive rates from 30% to 60% on the appreciation of property value
. Stamp duty at 0.05% on the transaction amount
. Withholding tax at 10% if the net proceeds (minus taxes and statutory contributions) are repatriated outside the PRC as dividends (reduced to 5% if the Hong Kong-PRC double tax arrangement applies)
. Other surcharge at approximately 11% of business tax

In respect of the properties held by the Company for investment and owner-occupation/ operation, the likelihood of the relevant tax liabilities crystallising is remote as the Company has no plans for the disposal of such properties yet. In respect of the completed properties held for sale and the properties under development, it is likely that the relevant tax liabilities will crystallise upon sale.

TITLE DOCUMENTS AND ENCUMBRANCES

We have been provided with extracts of documents in relation to the titles to the property interests. However, we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us. We have relied on the information provided by the Group and its PRC legal advisor, Jun He Law Office, regarding the title of the properties.

No allowance has been made in our report for any charges, mortgages or amounts owing on any property interests nor for any expenses or taxation which may be incurred in affecting a sale.

SOURCE OF INFORMATION

We have relied to a very considerable extent on the information given by the Group and the legal opinion of the Group’s PRC legal advisors. We have no reason to doubt the truth and the accuracy of the information provided by the Group which is material to the valuation. We have accepted advice given by the Group on such matters as planning approvals or statutory notices, easements, tenure, completion date of the buildings, particulars of occupancy, joint-venture agreements/contracts, development schemes, construction costs and development costs expended, estimated development costs and site and floor areas. Dimension, measurements and areas included in the attached summary of valuation report are based on the information provided to us and are

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therefore only approximations. We have not been able to carry out detailed on-site measurements to verify the site and floor areas of the properties and we have assumed that the areas shown on the documents handed to us are correct. We were also advised by the Group that no material facts have been omitted from the information provided.

We have inspected the exteriors and, where possible, the interiors of the properties valued from July 2015 to February 2016. However, we have not carried out site investigations to determine the suitability of ground conditions and services, etc. Our valuation is prepared on the assumption that these aspects are satisfactory. Moreover, no structural survey has been made, but in the course of our inspection, we did not note any serious defects, we are not, however, able to report that the properties are free from rot, infestation or any other structural defects. No tests were carried out on any of the services.

REMARKS

In preparing our valuation report, we have complied with the requirements contained within relevant provisions of Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards 2012 Edition published by the Hong Kong Institute of Surveyors.

CURRENCY

All sums stated in our valuation are in Renminbi.

Our summary of valuations is attached.

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Yours faithfully
For and on behalf of
Knight Frank Petty Limited
Clement W M Leung
MFin MCIREA MHKIS MRICS RPS (GP)
Executive Director
Head of China Valuation
Remarks: Clement W M Leung, MFin MCIREA, MHKIS, MRICS, RPS (GP), has been a qualified valuer and has about
22 years’ experience in the valuation of properties in Hong Kong, Macau and Asia Pacific Region and has 19
years’ experience in the valuation of properties in the People’s Republic of China.
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SUMMARY OF VALUATIONS

Property Group
(Group I — Group VII)
No. of
properties
Group I — Investment properties
held by the Group in the PRC
85
Group II — Investment properties
held by the Group under
development in the PRC
8
Group III — Hotels held by the
Group in the PRC
7
Group IV — Completed properties
held for sale, Properties held for/
under development by the Group
in the PRC
45
Group V — Land and Buildings
held by the Group for
owner-occupation/operation in
the PRC
10
Group VI — Assets Under
Construction held by the Group
for owner-occupation/operation in
the PRC
4
Group VII — Contracted property
held by the Group in the PRC
1
Total
160
Notes:
1.
The market values stated are approximations.

Market value(1) in
existing state as at
the
31 December 2015
Market value(1)
in existing state
attributable to the
Group as at the
31 December 2015
(RMB)
(RMB)
25,517,040,000
20,565,956,500
4,911,200,000
4,911,200,000
4,182,000,000
3,308,050,000
70,321,990,000
63,397,363,000
702,400,000
574,412,000
3,173,000,000
3,173,000,000
12,419,000,000
8,693,300,000
121,226,630,000
104,623,281,500

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The valuation summary and all material information of the major parameters in quantifying the valuation of each property from the full	valuation report are listed below. In the course of our valuation, we have relied on the information provided by the Group and its PRC legal	advisers regarding the title to the properties and, based on the information provided by the Group and its PRC legal advisers, properties with	assigned commercial values in this Appendix III have proper legal title.	Group I — Investment properties held by the Group in the PRC	Valuation Summary as at 31 December 2015	Valuation Summary as at 31 December 2015	Market	Value(3) in	Market Value(3) in Existing State Attributable to	No. of Existing Interest the Group	Car Existing Monthly State As At Attributable As At	Property No. Property Name Holding Entity City District Land Use Expiry Date of Land Use Term Type of Property GFA(1)(2) Completion Date Parking Spaces Occupancy Rate Passing Rent 31 December 2015 to the Group 31 December 2015	(sq m) (RMB (RMB (RMB	million) million) million)	1 Commercial Podium and Car Parking Portions of Shunde New World Centre Foshan Shunde Shunxing Real Estate Company Limited Shunde Daliang Commercial Aug 2066 Commercial, Carpark 48,517 1998 288 97% 3.32 529.00 42.20% 223.24	2 Various Portions of Tianjin Xin An New World Plaza New World Anderson Development Company Limited, Tianjin Xin Guang Development Co., Ltd. Tianjin Nankai Commercial 20 Jul 2045 Commercial, Office, Carpark 108,701 1997 192 92% 3.36 993.00 100.00% 993.00 3 Car Parking Portion of Tianjin New World Tianjin New World Housing Tianjin Heping Residential, Unspecified Carpark 7,395 2004 125 N/A — 16.30 100.00% 16.30	Garden Development Co., Ltd. Commercial	4 Retail Portion of Tianjin Glorious Place Tianjin New World Properties Tianjin Heping Residential, 17 Dec 2046 to Commercial 25,647 2014 — 34% 1.06 338.00 100.00% 338.00	Development Co., Ltd. Commercial, 17 Dec 2076	Serviced	Apartment	5 Office Portion of Wuhan New World New World Development (Wuhan) Wuhan Jianghan Commercial 9 Jan 2044 Office 100,314 2006 — 86% 9.80 1,553.30 100.00% 1,553.30	International Trade Tower I Co., Ltd.	6 Car Parking Portion of Wuhan New World New World Development (Wuhan) Wuhan Jianghan Mixed Residential 9 Jan 2044 Carpark 17,272 2006 422 N/A — 67.50 100.00% 67.50	International Trade Tower I Co., Ltd.	7 Office Portion of Wuhan New World Wuhan New Eagle Enterprises Co., Wuhan Jianghan Commercial 6 Nov 2042 Office 10,005 1994 — 92% 1.10 143.10 100.00% 143.10	International Trade Tower II Ltd.	8 Retail Portion of Wuhan New World Centre New World Development (Wuhan) Wuhan Hankou Residential, 18 Jul 2041 to Commercial 39,600 2007 — 12% 0.32 481.40 100.00% 481.40	Co., Ltd. Commercial 18 Jul 2071	9 Retail Portion — Pedestrian Street New World Development (Wuhan) Wuhan Hankou Residential, 18 Jul 2041 to Commercial 3,392 2007 — 100% 0.60 139.00 100.00% 139.00	Wuhan New World Centre Co., Ltd. Commercial 18 Jul 2071	10 Car Parking Portion of Wuhan New World New World Development (Wuhan) Wuhan Hankou Residential, 18 Jul 2041 to Carpark 27,894 2007 453 N/A — 79.30 100.00% 79.30	Centre Co., Ltd. Commercial 18 Jul 2071	11 Office Portion of Wuhan New World Centre New World Development (Wuhan) Wuhan Hankou Residential, 18 Jul 2041 to Office 2,504 2007 — 83% 0.24 38.80 100.00% 38.80	Co., Ltd. Commercial 18 Jul 2071	12 Office Unit C on Level 6 and Car Parking New World Development (Wuhan) Wuhan Hankou Residential, 18 Jul 2041 to Office, Carpark 5,883 2007 100 0% — 25.70 60.00% 15.42	Portion of Wuhan New World Centre Co., Ltd. Commercial 18 Jul 2071	13 Ancillary Portion of Wuhan New World New World Development (Wuhan) Wuhan Hankou Residential, 18 Jul 2041 to Ancillary Facilities 2,774 2007 — 0% — 13.30 100.00% 13.30	Centre Co., Ltd. Commercial 18 Jul 2071	14 Retail and Car Parking Portions of Wuhan New World Development (Wuhan) Wuhan Hankou Commercial 2 May 2053 Commercial, 20,946 2010 184 94% 0.59 192.00 100.00% 192.00	K11 Gourmet Tower Co., Ltd. Carpark	15 A Retail Unit of Wuhan Guanggu New New World Goodtrade (Wuhan) Wuhan Hongshan Residential, 19 Apr 2060 to Commercial 362 2012 — 100% 0.03 7.10 100.00% 7.10	World Limited Commercial, 19 Apr 2080	Finance	16 Various Portions of Beijing New World China New World Electronics Co., Beijing Dongcheng Composite 31 Mar 2044 Commercial, 103,440 1997 502 100% 10.14 2,547.00 70.00% 1,782.90	Centre Phase I Ltd., Beijing Chong Wen-New Ancillary	World Properties Development Facilities,	Co., Ltd. Carpark
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Existing State	Existing State	the Group	As At	31 December	2015	(RMB	million)	836.50				28.35				72.10				13.37				82.81		15.61		6.72		8.12			41.93		29.12			20.58			49.56			39.13			23.17			33.46
		Interest	Attributable	to the	Group			70.00%				70.00%				70.00%				70.00%				70.00%		70.00%		70.00%		70.00%			70.00%		70.00%			70.00%			70.00%			70.00%			70.00%			70.00%
Market	Value(3) in	Existing	State As At	31 December	2015	(RMB	million)	1,195.00				40.50				103.00				19.10				118.30		22.30		9.60		11.60			59.90		41.60			29.40			70.80			55.90			33.10			47.80
			Monthly	Passing	Rent	(RMB	million)	2.68				—				—				—				—		—		0.06		0.07			0.30		—			—			—			—			0.14			—
			Existing	Occupancy	Rate			100%				N/A				N/A				N/A				N/A		N/A		100%		69%			100%		N/A			N/A			N/A			N/A			100%			N/A
		No. of	Car	Parking	Spaces			529				162				412				83				696		131		0		0			0		189			147			354			254			0			208
				Completion	Date			2000				2001				2001				2002				2003		2006		2006		2001			2006		2001			2007			2007			2004			2007			2005
				GFA(1)(2)		(sq m)		75,326				9,438				25,106				3,439				22,597		5,588		2,594		1,881			7,536		7,279			4,119			10,005			11,192			3,603			8,051
					Type of Property			Commercial,	Ancillary	Facilities,	Carpark	Carpark				Carpark				Carpark				Carpark		Carpark		Commercial		Commercial,	Ancillary	Facilities	Commercial		Carpark			Carpark			Carpark			Carpark			Carpark			Carpark
				Expiry Date of	Land Use Term			8 Nov 2033 to	8 Nov 2063			9 Apr 2038 to	9 Apr 2068			9 Apr 2038 to	9 Apr 2068			9 Apr 2038 to	9 Apr 2068			29 Apr 2069		29 Apr 2069		29 Apr 2069		29 Apr 2069			29 Apr 2069		29 Dec 2037 to	29 Dec 2067		27 Aug 2044 to	27 Aug 2074		20 Jun 2043 to	20 Jun 2073		24 Jul 2051 to	24 Jul 2071		20 Jun 2043 to	20 Jun 2073		9 Mar 2038 to	9 Mar 2068
					Land Use			Residential,	Commercial,	Office		Residential,	Commercial,	Office, Storage,	Carpark	Residential,	Commercial,	Office, Storage,	Carpark	Residential,	Commercial,	Office, Storage,	Carpark	Residential		Residential		Residential		Residential			Residential		Residential,	Commercial,	Carpark	Residential, Ancillary	Facilities		Residential,	Commercial,	Office, Carpark	Residential,	Commercial,	Office, Carpark	Residential,	Commercial,	Office, Carpark	Residential,	Commercial,	Office, Ancillary	Facilities, Storage,	Carpark
					District			Dongcheng				Dongcheng				Dongcheng				Dongcheng				Daxing		Daxing		Daxing		Daxing			Daxing		Dongcheng			Dongcheng			Dongcheng			Dongcheng			Dongcheng			Dongcheng
					City			Beijing				Beijing				Beijing				Beijing				Beijing		Beijing		Beijing		Beijing			Beijing		Beijing			Beijing			Beijing			Beijing			Beijing			Beijing
					Holding Entity			Beijing Chong Yu Real Estate	Development Co., Ltd.			Beijing Chong Yu Real Estate	Development Co., Ltd.			Beijing Chong Yu Real Estate	Development Co., Ltd.			Beijing Chong Yu Real Estate	Development Co., Ltd.			Beijing Xin Kang Real Estate	Development Co., Ltd.	Beijing Xin Kang Real Estate	Development Co., Ltd.	Beijing Xin Kang Real Estate	Development Co., Ltd.	Beijing Xin Kang Real Estate	Development Co., Ltd.		Beijing Xin Kang Real Estate	Development Co., Ltd.	Beijing Chong Wen-New World	Properties Development Co.,	Ltd.	Beijing Chong Wen-New World	Properties Development Co.,	Ltd.	Beijing Chong Wen-New World	Properties Development Co.,	Ltd.	Beijing Chong Wen-New World	Properties Development Co.,	Ltd.	Beijing Chong Wen-New World	Properties Development Co.,	Ltd.	Beijing Chong Yu Real Estate	Development Co., Ltd.
					Property Name			Various Portions of Beijing New World	Centre Phase II			Car Parking Portion of Beijing New World	Garden Phase I			Car Parking Portion of Beijing New World	Garden Phase II			Car Parking Portion of Xin Yang	Commercial Building			Residential Car Parking Portion of Beijing	Xin Kang Garden Phase III	Commercial Car Parking Portion of Beijing	Xin Kang Garden Phase III	Ancillary Commercial Podium of Beijing Xin	Kang Garden Phase III	Portion of Commercial Annex Building of	Beijing Xin Kang Garden Phase II		Portion of Annex Building of Beijing Xin	Kang Garden Phase III	Car Parking Portion of Beijing New View	Garden Phase I		Car Parking Portion of Beijing New View	Garden Phase III #7		Car Parking Portion of Beijing Xin Yu	Garden Liangguang Road #2		Car Parking Portion of Beijing Xin Yu	Garden Liangguang Road #3 and #4		Complex Building of Beijing Xin Yu Garden	Liangguang Road #2		Car Parking Portion of Beijing Xin Cheng	Cultural Building
				Property	No.			17				18				19				20				21		22		23		24			25		26			27			28			29			30			31
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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
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Existing State	Existing State	the Group	As At	31 December	2015	(RMB	million)	61.81					149.24				17.36				111.00			18.70		48.80		104.00			34.50		629.00		401.00		13.87		1,066.00	682.00		2,759.00		88.50			529.76	432.00(4)	432.00(4)			447.98					962.92					561.64					248.00
		Interest	Attributable	to the	Group			70.00%					70.00%				70.00%				100.00%			100.00%		100.00%		100.00%			100.00%		100.00%		100.00%		100.00%		100.00%	100.00%		50.00%		100.00%			88.00%		100.00%			90.50%					90.50%					90.50%					100.00%
Market	Value(3) in	Existing	State As At	31 December	2015	(RMB	million)	88.30					213.20				24.80				111.00			18.70		48.80		104.00			34.50		629.00		401.00		13.87		1,066.00	682.00		5,518.00		88.50			602.00	432.00(4)				495.00					1,064.00					620.60					248.00
			Monthly	Passing	Rent	(RMB	million)	—					—				—				0.29			—		—		0.16			0.14		—		—		—		3.58	1.95		29.46		0.27			1.64		1.24			2.35					3.61					—					1.24
			Existing	Occupancy	Rate			N/A					N/A				N/A				88%			N/A		N/A		100%			100%		N/A		N/A		N/A		78%	100%		87%		80%			99%		57%			53%					75%					N/A					100%
		No. of	Car	Parking	Spaces			384					1,066				99				0			117		305		480			0		3,496		2,225		73		0	260		286		248			391		444			0					0					1,612					0
				Completion	Date			2002					2005-2008				2013				2013			2000		2004		2008			2010		2010		2013		2012		2002	2003		2002		2008-2014			2002		2009			2006					2006					2004-2012					2004
				GFA(1)(2)		(sq m)		16,415					43,708				8,651				6,450			5,500		10,372		28,202			4,912		161,312		90,458		8,710		35,961	33,582		126,680		23,033			69,196		48,982			17,408					29,869					19,911					17,937
					Type of Property			Carpark					Carpark				Carpark				Commercial			Carpark		Carpark		Commercial,	Kindergarten,	Carpark	Commercial,	Kindergarten	Carpark		Carpark		Carpark		Residential	Commercial		Commercial, Office		Commercial,	Carpark		Commercial, Office,	Carpark	Commercial,	Carpark		Commercial					Residential					Carpark					Commercial
				Expiry Date of	Land Use Term			9 Mar 2038 to	9 Mar 2068				13 Jul 2044 to	13 Jul 2074			13 Jul 2044 to	13 Jul 2074			27 Oct 2050 to	27 Oct 2080		8 Jun 2048		8 Jun 2048		8 Jun 2048			8 Jun 2048		8 Jun 2048		8 Jun 2048		29 Jun 2049 to	29 Jun 2053	20 Apr 2048	20 Apr 2048		1 Dec 2044		6 Jun 2041 to	6 Jun 2071		28 Jul 2044		15 Sep 2048 to	25 Mar 2064		7 Jun 2039 to	7 Jun 2069				7 Jun 2039 to	7 Jun 2069				7 Jun 2039 to	7 Jun 2069				1 Jun 2039 to	1 Jun 2069
					Land Use			Residential,	Commercial,	Office, Ancillary	Facilities, Storage,	Carpark	Residential,	Commercial,	Office, Ancillary	Facilities, Carpark	Residential,	Commercial,	Office, Ancillary	Facilities, Carpark	Residential,	Commercial,	Financial	Composite		Composite		Composite			Composite		Composite		Composite		Commercial		Composite	Composite		Composite		Residential, Ancillary	Facilities		Commercial		Residential, Catering			Residential,	Commercial,	Tourism,	Entertainment,	Others	Residential,	Commercial,	Tourism,	Entertainment,	Others	Residential,	Commercial,	Tourism,	Entertainment,	Others	Residential,	Commercial, Other
					District			Dongcheng					Dongcheng				Dongcheng				Guangyang			Heping		Heping		Heping			Heping		Heping		Heping		Heping		Changning	Changning		Huangpu		Huaiyin			Zhongshan		Zhongshan			Tianhe					Tianhe					Tianhe					Tianhe
					City			Beijing					Beijing				Beijing				Langfang			Shenyang		Shenyang		Shenyang			Shenyang		Shenyang		Shenyang		Shenyang		Shanghai	Shanghai		Shanghai		Jinan			Dalian		Dalian			Guangzhou					Guangzhou					Guangzhou					Guangzhou
					Holding Entity			Beijing Chong Yu Real Estate	Development Co., Ltd.				Beijing Chong Wen-New World	Properties Development Co.,	Ltd.		Beijing Chong Wen-New World	Properties Development Co.,	Ltd.		Lang Fang New World Properties	Development Co., Ltd.		New World (Shenyang) Property	Development Limited	New World (Shenyang) Property	Development Limited	New World (Shenyang) Property	Development Limited		New World (Shenyang) Property	Development Limited	New World (Shenyang) Property	Development Limited	New World (Shenyang) Property	Development Limited	Shenyang New World Xin Hui	Properties Co., Ltd.	Shanghai Ramada Plaza Ltd.	Shanghai Ramada Plaza Ltd.		Shanghai New World Huai Hai	Property Development Co., Ltd.	Jinan New World Sunshine	Development Ltd.		Dalian New World Plaza	International Co., Ltd.	Dalian New World Tower Co., Ltd.			Guangzhou Xin Yi Development	Limited				Guangzhou Xin Yi Development	Limited				Guangzhou Xin Yi Development	Limited				Guangzhou Xin Hua Jian Real Estate	Co., Ltd.
					Property Name			Car Parking Portion of Zhengren Commercial	Building				Car Parking Portion of Beijing Xin Yi	Garden Phases I to V			Car Parking Portion of Beijing Xin Yi	Garden West Ancillary Portion			Retail Portion of Langfang New World	Centre District B1		Car Parking Portion of Shenyang New World	Garden Phases 1A and 1B	Car Parking Portion of Shenyang New World	Garden Phase 1D	Retail, Kindergarten and Car Parking	Portions of Shenyang New World	Garden Phase 1E	Retail and Kindergarten Portions of	Shenyang New World Garden Phase 2A	Car Parking Portion of Shenyang New World	Garden, Phase 2A	Car Parking Portion of Shenyang	New World Garden Phase 2B	Car Parking Portion of Shenyang New World	Commercial Centre Phase I	Shanghai Belvedere Service Apartment	Commercial and Car Parking Portions of	Shanghai Ramada Plaza	Shanghai Hong Kong New World Tower		Ancillary Building No. 4 and Block Nos. 22,	27 and 33 and Car Parking Portions of	Jinan Sunshine Garden	Retail and Car Parking Portions of Dalian	New World Plaza	Commercial Portion and Lease Term Interests	of Car Parking Portion of Dalian New	World Tower	Retail Portion of Guangzhou Central Park-	view				Residential Portion of Guangzhou Central	Park-view				Car Parking Portion of Guangzhou Central	Park-view				Retail Portion of Guangzhou New World	Oriental Garden Phase I
				Property	No.			32					33				34				35			36		37		38			39		40		41		42		43	44		45		46			47		48			49					50					51					52
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APPENDIX IV

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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
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Existing State	Existing State	the Group	As At	31 December	2015	(RMB	million)	38.30			244.50			9.70			5.44		31.88		23.69		76.58		7.00		22.69		148.50					79.70					10.00					14.30					97.90					11.70					19.60					355.70
		Interest	Attributable	to the	Group			100.00%			100.00%			100.00%			62.50%		62.50%		62.50%		62.50%		62.50%		62.50%		100.00%					100.00%					100.00%					100.00%					100.00%					100.00%					100.00%					100.00%
Market	Value(3) in	Existing	State As At	31 December	2015	(RMB	million)	38.30			244.50			9.70			8.70		51.00		37.90		122.52		11.20		36.30		148.50					79.70					10.00					14.30					97.90					11.70					19.60					355.70
			Monthly	Passing	Rent	(RMB	million)	0.15			—			0.06			0.05		—		—		—		0.02		0.09		—					0.51					0.03					0.17					0.37					0.04					0.13					—
			Existing	Occupancy	Rate			40%			N/A			69%			100%		0%		N/A		N/A		100%		24%		N/A					100%					57%					100%					60%					87%					100%					N/A
		No. of	Car	Parking	Spaces			0			661			0			0		0		265		860		0		0		450					0					0					0					0					0					0					1,824
				Completion	Date			2004			2004-2013			2010			2005		2008		2009		2011		2010		2010		2002-2007					2002					2007					2002					2006					2007					2009					2012
				GFA(1)(2)		(sq m)		3,615			8,207			660			3,099		10,955		9,180		42,838		2,161		6,637		5,395					7,443					778					1,641					4,995					1,346					1,218					22,536
					Type of Property			Commercial,	Ancillary	Facilities	Carpark			Commercial,	Ancillary	Facilities	Kindergarten		Commercial		Carpark		Carpark		Commercial		Commercial		Carpark					Commercial					Commercial					Commercial,	Ancillary	Facilities			Commercial					Commercial					Commercial					Carpark
				Expiry Date of	Land Use Term			1 Jun 2039 to	1 Jun 2069		1 Jun 2039 to	1 Jun 2069		1 Jun 2039 to	1 Jun 2069		9 Apr 2063 to	29 Dec 2074	9 Apr 2063 to	29 Dec 2074	9 Apr 2063 to	29 Dec 2074	9 Apr 2063 to	29 Dec 2074	9 Apr 2063 to	29 Dec 2074	9 Apr 2063 to	29 Dec 2074	31 Oct 2035 to	29 May 2068				31 Oct 2035 to	31 Oct 2065				29 May 2038 to	29 May 2068				22 Jun 2039 to	22 Jun 2069				22 Jun 2039 to	22 Jun 2069				22 Jun 2039 to	22 Jun 2069				22 Jun 2039 to	22 Jun 2069				22 Jun 2039 to	22 Jun 2069
					Land Use			Residential,	Commercial, Other		Residential,	Commercial, Other		Residential,	Commercial, Other		Residential,	Commercial	Residential,	Commercial	Residential,	Commercial	Residential,	Commercial	Residential,	Commercial	Residential,	Commercial	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Other
					District			Tianhe			Tianhe			Tianhe			Zengcheng		Zengcheng		Zengcheng		Zengcheng		Zengcheng		Zengcheng		Tianhe					Tianhe					Tianhe					Baiyun					Baiyun					Baiyun					Baiyun					Baiyun
					City			Guangzhou			Guangzhou			Guangzhou			Guangzhou		Guangzhou		Guangzhou		Guangzhou		Guangzhou		Guangzhou		Guangzhou					Guangzhou					Guangzhou					Guangzhou					Guangzhou					Guangzhou					Guangzhou					Guangzhou
					Holding Entity			Guangzhou Xin Hua Jian Real Estate	Co., Ltd.		Guangzhou Xin Hua Jian Real Estate	Co., Ltd.		Guangzhou Xin Hua Jian Real Estate	Co., Ltd.		Guangzhou Hemsell Real Estate	Development Co., Ltd.	Guangzhou Hemsell Real Estate	Development Co., Ltd.	Guangzhou Bosson Real Estate Co.,	Ltd.	Guangzhou Bosson Real Estate Co.,	Ltd.	Guangzhou Bosson Real Estate Co.,	Ltd.	Guangzhou Bosson Real Estate Co.,	Ltd.	Guangzhou Xin Hua Chen Real	Estate Co., Ltd.				Guangzhou Xin Hua Chen Real	Estate Co., Ltd.				Guangzhou Xin Hua Chen Real	Estate Co., Ltd.				Guangzhou Jixian Zhuang New	World City Garden Development	Limited			Guangzhou Jixian Zhuang New	World City Garden Development	Limited			Guangzhou Jixian Zhuang New	World City Garden Development	Limited			Guangzhou Jixian Zhuang New	World City Garden Development	Limited			Guangzhou Xin Sui Tourism Centre	Ltd.
					Property Name			Sales Centre of Guangzhou New World	Oriental Garden		Car Parking Portion of Guangzhou New	World Oriental Garden Phases I, II and	III	Retail Portion and Ancillary Portions of	Guangzhou New World Oriental Garden	Phase II	Kindergarten Portion of Guangzhou Xintang	New World Garden Phase III	Retail Portion of Guangzhou Xintang New	World Garden	Car Parking Portion of Northern District of	Guangzhou Xintang New World Garden	Car Parking Portion of Southern District of	Guangzhou Xintang New World Garden	Agricultural Market of Guangzhou Xintang	New World Garden	Commercial Podium of Guangzhou Xintang	New World Garden	Car Parking Portion of Guangzhou Dong Yi	Garden Phases II to IV				Commercial Podium of Guangzhou Dong Yi	Garden Phase II				Commercial Podium of Guangzhou Dong Yi	Garden Phase IV				Commercial Podium and Ancillary Facilities	of Phase 2A Guangzhou Park Paradise,				Commercial Podium of Phase 2C1 to 2C3,	Guangzhou Park Paradise				Commercial Podium of Phase 2D1,	Guangzhou Park Paradise				Commercial Podium of Phase 2E1,	Guangzhou Park Paradise				Car Parking Portion of Phase 4, Guangzhou	Park Paradise
				Property	No.			53			54			55			56		57		58		59		60		61		62					63					64					65					66					67					68					69
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APPENDIX IV

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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
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Market	Value(3) in	Market Value(3) in Existing State Attributable to	Market Value(3) in Existing State Attributable to	Market Value(3) in Existing State Attributable to	No. of Existing Interest the Group	Car Existing Monthly State As At Attributable As At	Property Name Holding Entity City District Land Use Expiry Date of Land Use Term Type of Property GFA(1)(2) Completion Date Parking Spaces Occupancy Rate Passing Rent 31 December 2015 to the Group 31 December 2015	Property Name Holding Entity City District Land Use Expiry Date of Land Use Term Type of Property GFA(1)(2) Completion Date Parking Spaces Occupancy Rate Passing Rent 31 December 2015 to the Group 31 December 2015	(sq m) (RMB (RMB (RMB	million) million) million)	Car Parking Portion of Area 6, Guangzhou Guangzhou Yibo Real Estate Guangzhou Baiyun Residential, 22 Jun 2039 to Carpark 22,621 2014-2015 1,097 N/A — 214.00 100.00% 214.00	Park Paradise Development Co., Ltd. Commercial, 22 Jun 2069	Tourism,	Entertainment,	Other	Dinning Building and Car Parking Portion of Guangzhou Jixian Zhuang New Guangzhou Baiyun Residential, 22 Jun 2039 to Commercial 13,514 2014 193 100% 0.24 113.20 100.00% 113.20	Guangzhou Park Paradise Phase 5 World City Garden Development Commercial, 22 Jun 2069	Limited Tourism,	Entertainment,	Other	Student Hostel of Lingnan Middle School Guangzhou Xin Sui Tourism Centre Guangzhou Baiyun Residential, 22 Jun 2039 to School 14,400 2002 — 100% 0.76 42.00 100.00% 42.00	Guangzhou Park Paradise Ltd. Commercial, 22 Jun 2069	Tourism,	Entertainment,	Other	Commercial, Ancillary Facilities and Car Guangzhou Fong Chuen New World Guangzhou Liwan Residential, 20 Jun 2039 to Commercial, 26,000 2005-2013 290 79% 0.24 206.00 100.00% 206.00	Parking Portions of Guangzhou Covent Property Development Co., Commercial, Other 29 Dec 2079 Ancillary	Garden Limited Facilities,	Carpark	Commercial and Car Parking Portions of Huizhou New World Housing Huizhou Huicheng Residential, 2 Mar 2045 to Commercial, 30,053 1999-2013 826 0% — 69.20 62.50% 43.25	Huizhou Changhuyuan Development Limited Commercial, Other 11 Mar 2079 Carpark	Commercial and Car Parking Portions of Zhaoqing New World Property Zhaoqing Duanzhou Residential, 24 Dec 2038 to Commercial, 15,902 2014 30 83% 0.30 62.90 100.00% 62.90	Districts D and E, Zhaoqing New World Development Limited Commercial 24 Dec 2068 Carpark	Garden	Car Parking Portion of Canton First Estate, Foshan Da Hao Hu Real Estate Foshan Nanhai Residential, Golf 30 Jul 2070 Carpark 13,567 2014 451 N/A — 63.00 84.80% 53.42	CF19A Development Co., Ltd. Gaoxin course and	ancillary services	Residential Portion of Canton First Estate Foshan Da Hao Hu Real Estate Foshan Nanhai Residential, Golf 30 Jul 2070 Residential 11,043 2014 — 15% 0.18 168.00 84.80% 142.46	CF19A Development Co., Ltd. Gaoxin course and	ancillary services	Retail Portion of Nanjing New World Centre Nanjing New World Real Estate Co. Nanjing Xuanwu Commercial, Finance 30 May 2043 Commercial 41,712 2008 — 100% 0.37 369.00 100.00% 369.00	Car Parking Portion of Nanjing New World Nanjing New World Real Estate Co. Nanjing Xuanwu Commercial, Finance 30 May 2043 Carpark 5,262 2008 143 N/A — 18.60 100.00% 18.60	Centre	Retail and Car Parking Portions of Changsha Hunan Success New Century Changsha Yuhua Residential, 16 Feb 2044 to Commercial, 6,840 2009-2010 183 39% 0.01 30.40(5) 47.50% 14.44(5)	La Ville New World Investment Company Limited Commercial, 16 Feb 2074 Carpark	Kindergarten,	Composite	Retail and Car Parking Portions of Anshan New World (Anshan) Property Anshan Gaoxin Residential, 5 Jun 2048 to Commercial, 56,477 2011-2013 1,258 97% 0.11 190.00 100.00% 190.00	New World Garden Phases IA Development Co., Ltd. Commercial 7 May 2084 Carpark	Car Parking Portion of Phase III of Haikou Haikou New World Housing Haikou Meilan Residential, 20 Dec 2070 to Carpark 4,731 2013 415 N/A — 27.00 100.00% 27.00	New World Garden Development Ltd. Commercial 13 Sep 2071	Car Parking Portion of Shenzhen New World Shenzhen Topping Real Estate Shenzhen Yantin Residential, 1 Aug 2069 Carpark 29,699 2015 845 N/A — 160.55 100.00% 160.55	Yi Shan Garden Phase III Development Co., Ltd. Commercial	Car Parking Portion of Shenzhen New World Shenzhen Top One Real Estate Shenzhen Baoan Residential 16 Sep 2067 Carpark 6,314 2014 135 N/A — 25.70 100.00% 25.70	Signature Hill Development Co., Ltd.	Various Portions of Tangshan New World Tang Shan New World Property Tangshan Lunan Residential, 4 Oct 2050 to Commercial, Office 84,682 2015 — 4% 0.07 935.00 100.00% 935.00	Centre Development Co., Ltd. Commercial 4 Oct 2080	2,045,170 26,843 83.64 25,517.04(6) 20,565.97(6)		All areas stated are approximations.	All GFA has included the gross floor area of car parking portion of the property, if any.	All values stated are approximations.	The valuation of the car parking portion of the property was arrived by making reference to its lease term interest and its rights in sub-letting and/or transferring the lease term interests of such portion of the property. In addition, according to the Group’s specific terms of instruction, we have taken into account the outstanding land costs of the property of approximately RMB1,301,000 in our valuation.	The valuation of the car parking portion of the property was arrived by making reference to its lease term interest and its rights in sub-letting and/or transferring the lease term interests of such portion of the property. In addition, according to the Group’s specific terms of instruction, we have taken into account the outstanding land costs of the property of approximately RMB1,301,000 in our valuation.	Pursuant to a participation agreement dated 11 September 2006 entered into between the Company and Solar Leader Limited ("Solar Leader"), a wholly owned subsidiary of New World Development Limited. Solar Leader has a participating interest representing 50% of the total interest in this property project.	The sub-total of the properties in Group I includes the value of car parking portion of the property no. 48. During the course of valuation, we have made reference to its lease term interest and its rights in sub-letting and/or transferring the lease term interests of the aforesaid can parking portion.
							Property	No.			70					71					72					73				74		75			76			77			78	79		80				81		82		83		84		85			Notes:	(1)	(2)	(3)	(4)		(5)	(6)
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		Value(4) in	Existing State	Attributable to	the Group	As At	31 December	2015	(RMB	million)	418.40				427.00			2,990.00			234.70			597.00					145.30					80.30			18.50			4,911.20
					Interest	Attributable	to the	Group			100.00%				100.00%			100.00%			100.00%			100.00%					100.00%					100.00%			100.00%
			Market	Value(4) in	Existing State	As At	31 December	2015	(RMB	million)	418.40				427.00			2,990.00			234.70			597.00					145.30					80.30			18.50			4,911.20
		Gross	Development	Value(4) As	If Completed	As At	31 December	2015	(RMB	million)	503.40				538.27			4,849.80			745.50			1,611.00					388.83					128.96			52.26			8,818.02
						Outstanding	Construction	Cost	(RMB	million)	46.16				58.50			1,331.92			378.90			649.72					185.80					35.81			26.17
						Construction	Cost	Incurred	(RMB	million)	228.93				281.46			2,313.28			252.22			227.65					43.67					51.09			9.33
						No. of Car	Parking	Spaces			2,517				2,833			0			3,550			0					1,994					992			402			12,288
Group II — Investment properties held by the Group under development in the PRC	Valuation Summary as at 31 December 2015					Date of	Property Expiry Date of Type of Site Completion of	No. Property Name Holding Entity City District Land Use Land Use Term Property Area(1) GFA(1)(2) Construction	(sq m) (sq m)		86 Car Parking Portion of Guangzhou Fong Chuen New Guangzhou Liwan Residential, 20 Jun 2039 to Carpark 311,652(3) 102,919 2016	Guangzhou Covent World Property Commercial, Other 29 Dec 2079	Garden Zone 1 Development Co.,	Limited	87 Car Parking Portion of New World (Shenyang) Shenyang Heping Composite 8 Jun 2048 Carpark 196,462(3) 114,267 2016	Shenyang New World Property Development	Centre Limited	88 K11 of Shenyang New World New World (Shenyang) Shenyang Heping Composite 8 Jun 2048 Commercial 196,462(3) 327,201 2016	Centre Property Development	Limited	89 Car Parking Portion of New World (Shenyang) Shenyang Heping Composite 8 Jun 2048 Carpark 1,742,000(3) 179,442 2018	Shenyang New World Property Development	Garden Phase 2D Limited	90 Commercial Portion of Phase Guangzhou Jixian Zhuang Guangzhou Baiyun Residential, 22 Jun 2039 to Commercial 409,801 88,346 2017	5A of Guangzhou Park New World City Garden Commercial, 22 Jun 2069	Paradise Development Limited, Tourism,	Guangzhou Xin Sui Entertainment,	Tourism Centre Ltd. Other	91 Car Parking Portion of Phase Guangzhou Jixian Zhuang Guangzhou Baiyun Residential, 22 Jun 2039 to Carpark 409,801 78,895 2017	5A of Guangzhou Park New World City Garden Commercial, 22 Jun 2069	Paradise Development Limited, Tourism,	Guangzhou Xin Sui Entertainment,	Tourism Centre Ltd. Other	92 Car Parking Portion of New World (Anshan) Anshan Gaoxin Residential, 15 Jun 2078 to Carpark 658,356(3) 45,725 2016	Anshan New World Property Development Commercial 7 May 2084	Garden Phase 3A Co., Ltd.	93 Car Parking Portion of New World (Anshan) Anshan Gaoxin Residential, 15 Jun 2078 to Carpark 658,356(3) 19,591 2017	Anshan New World Property Development Commercial 7 May 2084	Garden Phase 3B Co., Ltd.	956,386	Notes:	(1) All areas stated are approximations.	(2) The GFA has included the gross floor area of car parking portion of the property, if any.	(3) The site area mentioned refers to the total site area of the whole development of the property.	(4) All values stated are approximations.
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		Existing State	Attributable to	the Group	As At	31 December	2015	(RMB million)	393.60		812.00		825.00	247.00	172.15		795.90					62.40		3,308.05
					Interest	Attributable to	the Group		60.00%		100.00%		100.00%	100.00%	55.00%		70.00%					32.50%
		Market	Value(2) in	Existing State	As At	31 December	2015	(RMB million)	656.00		812.00		825.00	247.00	313.00		1,137.00					192.00		4,182.00
						No. of	Rooms		327		420		558	258	307		309					370		2,549
						Completion	Date		2007		2009		2003	2003	1999		2013					1997
							GFA(1)	(sq m)	29,411		53,248		46,942	13,353	23,988		53,998					36,524		257,464
						Type of	Property		Hotel		Hotel		Hotel	Hotel	Hotel		Hotel					Hotel
						Expiry Date of	Land Use Term		18 Jul 2041		15 Sep 2048 to	25 Mar 2064	20 Apr 2048	20 Apr 2048	31 Mar 2044		30 Aug 2054					Aug 2066
							Land Use		Commercial		Residential,	Catering	Composite	Composite	Composite		Commercial,	Financing,	Office, Hotel,	Catering,	Carpark, Other	Commercial
Group III — Hotels held by the Group in the PRC	Valuation Summary as at 31 December 2015					Property	No. Property Name Holding Entity City District		94 New World Wuhan Hotel Wuhan New World Hotel Wuhan Hankou	Properties Co., Ltd.	95 New World Dalian Hotel Dalian New World Tower Dalian Zhongshan	Co., Ltd.	96 New World Shanghai Hotel Shanghai Ramada Plaza Ltd. Shanghai Changning	97 pentahotel Shanghai Shanghai Ramada Plaza Ltd. Shanghai Changning	98 pentahotel Beijing Beijing Xin Lian Hotel Co., Beijing Dongcheng	Ltd.	99 New World Beijing Hotel Beijing Chong Wen-New Beijing Dongcheng	World Properties	Development Co., Ltd.			100 New World Shunde Hotel Foshan Shunde Bao Xing Shude Daliang	Hotel Company Limited		Notes:	(1) All areas stated are approximations.	(2) All values stated are approximations.

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– III-14 –
Market (4)inValue StateExisting Attributable Grouptheto AtAs 31December 2015 million)(RMB (5)79.10 177.10 327.60 1,964.20 74.90 10.78 33.53 2,000.88
Interest Group 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 75.00%
Attributable theto
Market (4)inValue State AtAs December 2015 million) (5)113.00 253.00 468.00 2,806.00 107.00 15.40 47.90 2,667.84
Existing 31 (RMB
Gross Development (4)IfAsValue Completed AtAs 31December 2015 million)(RMB — 494.55 770.85 3,523.83 — — — 2,753.46
PRCthe Outstanding Construction Cost million)(RMB — 105.28 138.48 123.04 — — — 419.80
in Construction CostIncurred million)(RMB — 17.60 59.99 469.85 — — — 378.30
Group Pre-sale million) — — — — — — — 179.95
Consideration (RMB
theby (1)GFA — — — — — — — 6,364
Pre-sale
Carof Parking Spaces 0 154 159 550 0 0 0 0
No.
of
development of 2013– 2013– 2017–
Date Completion Construction 2005 2001 2017 2017 2002 2000 2002 1997
(1)(2)GFA m)(sq 10,727 22,651 39,653 113,295 5,552 592 1,978 136,229
for/underheld (1)SiteArea m)(sq — (3)56,275 7,348 24,574 — — — (3)129,702
ofPropertyType Commercial,Office, Carpark Residential, Commercial, Carpark Office,Commercial, Carpark Commercial, Ancillary Facilities, Carpark Office Residential OfficeResidential, Residential, Commercial, Office, Carpark
Properties ofExpiryDate TermUseLand Jul204413to Jul207413 204427Augto 207427Aug 204430Augto 205430Aug 204430Augto 205430Aug 20389Aprto 20689Apr 204431Mar 20338Novto 20638Nov 20502Decto 20802Dec
sale,
for 2015 UseLand Residential, Commercial, Office, Ancillary Facilities, Carpark Residential, Commercial, Ancillary Facilities, Carpark OfficeCommercial, OfficeCommercial, Residential, Commercial, Office, Ancillary Facilities, Storage, Carpark Composite Residential, Commercial, Office Residential, Commercial, Composite
held
December District Dongcheng Dongcheng Dongcheng Dongcheng Dongcheng Dongcheng Dongcheng Shunyi
31
properties at City Beijing Beijing Beijing Beijing Beijing Beijing Beijing Beijing
as Entity ChongWen-New PropertiesWorld Ltd.DevelopmentCo., ChongWen-New PropertiesWorld Ltd.DevelopmentCo., ChongWen-New PropertiesWorld Ltd.DevelopmentCo., ChongWen-New PropertiesWorld Ltd.DevelopmentCo., RealChongYu DevelopmentEstate Ltd.Co., ElectronicsWorldNew BeijingLtd.,Co., WorldChongWen-New DevelopmentProperties Ltd.Co., RealChongYu DevelopmentEstate Ltd.Co., HuameiWorldNew RealEstate Ltd.DevelopmentCo.,
Completed
Holding Beijing Beijing Beijing Beijing Beijing China Beijing Beijing
— Summary of
Yi View View Yu New Centre I
IV Name Xin Garden New Garden New Commercial Centre Xin Commercial Centre Zhengren Commercial Building Portions Beijing World Phase Taihua Apartment Yuzhuang Project
Group Valuation Property PropertyNo. Beijing101 Beijing102 Beijing103 Beijing104 105Beijing 106Various Beijing107 Beijing108
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Value(4) in	Existing State	Attributable	to the Group	As At	31 December	2015	(RMB million)	463.40						896.00					1,972.00						10.80						86.70						1,286.00					191.20				44.90		529.00			1,898.00				929.80
				Interest	Attributable	to the Group		70.00%						100.00%					100.00%						100.00%						100.00%						100.00%					100.00%				100.00%		100.00%			100.00%				100.00%
	Market	Value(4) in	Existing State	As At	31 December	2015	(RMB million)	662.00						896.00					1,972.00						10.80						86.70						1,286.00					191.20				44.90		529.00			1,898.00				929.80
Gross	Development	Value(4) As If	Completed	As At	31 December	2015	(RMB million)	—						—					1,960.16						—						—						2,306.54					—				—		634.14			2,671.11				—
				Outstanding	Construction	Cost	(RMB million)	—						—					456.72						—						—						533.64					—				—		105.14			454.61				—
					Construction	Cost Incurred	(RMB million)	—						—					606.85						—						—						449.78					—				—		249.07			825.78				—
					Pre-sale	Consideration	(RMB million)	—						—					269.36						—						—						224.02					59.21				—		194.21			3.93				400.66
						Pre-sale GFA(1)		—						—					30,216						—						—						28,395					2,681				—		15,821			256				21,657
				No. of Car	Parking	Spaces		176						1,107					1,053						127						1,020						1,730					0				0		0			2,847				0
				Date of	Completion of	Construction		2013						2015					2013–2016						2014						2015						2017					2014				2009		2016–2017			2017				2007–2008
						GFA(1)(2)	(sq m)	32,414						210,638					300,048						1,751						24,885						367,201					10,016				2,117		53,607			397,787				52,819
						Site Area(1)	(sq m)	—						—					95,598						—						—						133,856(3)					—				—		332,311(3)			132,937(3)				—
						Type of Property		Commercial,	Ancillary,	Carpark				Residential,	Commercial,	Ancillary	Facilities,	Carpark	Residential,	Commercial,	Office, Hotel,	Ancillary	Facilities,	Carpark	Carpark						Carpark						Residential,	Commercial,	Ancillary	Facilities,	Carpark	Residential				Commercial		Residential,	Commercial		Residential,	Commercial,	Office, Hotel,	Carpark	Office
					Expiry Date of	Land Use Term		30 Aug 2044 to	30 Aug 2054					4 Oct 2050 to	4 Oct 2080				27 Oct 2050 to	27 Oct 2080					27 Oct 2050 to	27 Oct 2080					27 Oct 2050 to	27 Oct 2080					27 Oct 2080					17 Dec 2046 to	17 Dec 2076			25 Oct 2054		19 Dec 2075			19 Apr 2060				18 Jul 2041 to	18 Jul 2071
						Land Use		Commercial,	Carpark					Residential,	Commercial				Residential,	Commercial,	Financial				Residential,	Commercial,	Financial				Residential,	Commercial,	Financial				Residential					Residential,	Commercial,	Serviced	Apartment	Commercial		Residential			Residential,	Commercial,	Finance		Residential,	Commercial
						District		Dongcheng						Lunan					Guangyang						Guangyang						Guangyang						Guangyang					Heping				Heping		Jiangan			Hongshan				Hankou
						City		Beijing						Tangshan					Langfang						Langfang						Langfang						Langfang					Tianjin				Tianjin		Wuhan			Wuhan				Wuhan
						Holding Entity		Beijing Chong Wen-New	World Properties	Development Co., Ltd.				Tang Shan New World	Property Development	Co., Ltd.			Lang Fang New World	Properties Development	Co., Ltd.				Lang Fang New World	Properties Development	Co., Ltd.				Lang Fang New World	Properties Development	Co., Ltd.				Lang Fang Xin Zhong	Properties Development	Co., Ltd.			Tianjin New World Properties	Development Co., Ltd.			Tianjin New World Properties	Development Co., Ltd.	Wuhan Xinhan Development	Co., Ltd.		New World Goodtrade	(Wuhan) Limited			New World Development	(Wuhan) Co., Ltd.
						Property Name		Commercial and	Car Parking	Portions of	Beijing	Yanjing	Building	Tangshan New	World Centre				Langfang New	World Centre					Car Parking	Portion of	Langfang	New World	Centre	District B2	Car Parking	Portion of	Langfang	New World	Centre	District C1	Langfang New	World Garden				Tianjin Glorious	Place			Tianjin Jin Mao	Plaza	Wuhan Tazi Lake	Menghu	Garden	Wuhan Guanggu	New World			Unsold portion of	Wuhan New	World Centre
					Property	No.		109						110					111						112						113						114					115				116		117			118				119
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Value(4) in	Existing State	Attributable	to the Group	As At	31 December	2015	(RMB million)	1,183.00			3,906.00			807.97(6)				434.70					1,863.39					8,121.00					0.16			3,137.60						214.38					1,709.00			3,530.00			4,215.00
				Interest	Attributable	to the Group		100.00%			100.00%			47.50%				100.00%					90.50%					100.00%					40.00%			100.00%						62.50%					100.00%			100.00%			100.00%
	Market	Value(4) in	Existing State	As At	31 December	2015	(RMB million)	1,183.00			3,906.00			1,701.00(6)				434.70					2,059.00					8,121.00					0.40			3,137.60						343.00					1,709.00			3,530.00			4,215.00
Gross	Development	Value(4) As If	Completed	As At	31 December	2015	(RMB million)	1,918.59			10,273.13			4,063.24				653.12					—					14,943.17					—			5,298.10						—					—			—			—
				Outstanding	Construction	Cost	(RMB million)	283.45			3,397.50			1,427.04				78.11					—					3,211.12					—			1,245.71						—					—			—			—
					Construction	Cost Incurred	(RMB million)	381.50			66.73			294.89				113.23					—					1,313.50					—			199.28						—					—			—			—
					Pre-sale	Consideration	(RMB million)	—			—			—				—					143.67					2,450.08					—			82.59						69.25					526.60			2,801.52			3,872.47
						Pre-sale GFA(1)		—			—			—				—					2,035					110,622					—			3,619						5,595					18,290			39,256			87,674
				No. of Car	Parking	Spaces		907			5,375			5,359				243					0					505					2			2,462						0					0			0			0
				Date of	Completion of	Construction		2018			2017–2018			2009–2019				2017					2011–2012					2011–2017					2006			2002–2019						2005-2015					2014-2015			2014			2003–2015
						GFA(1)(2)	(sq m)	140,969			669,446			719,136				41,386					30,200					800,416					25			353,665						31,604					65,599			44,542			94,988
						Site Area(1)	(sq m)	18,612			133,547(3)			375,516(3)				61,784(3)					—					311,652(3)					—			90,846(3)						—					—			—			—
						Type of Property		Commercial, Office,	Carpark		Residential,	Commercial,	Carpark	Residential,	Commercial,	Carpark		Residential,	Ancillary	Facilities,	Carpark		Residential					Residential,	Commercial,	Ancillary	Facilities,	Carpark	Carpark			Residential,	Commercial,	Ancillary	Facilities,	Carpark		Residential					Residential			Residential			Residential,	Ancillary	Facilities
					Expiry Date of	Land Use Term		2 May 2053			29 Jun 2055 to	29 Jun 2085		16 Feb 2044 to	16 Feb 2074			29 May 2038 to	29 May 2068				7 Jun 2039 to	7 Jun 2069				20 Jun 2039 to	29 Dec 2079				12 Apr 2039 to	12 Apr 2069		22 Jun 2039 to	22 Jun 2069					9 Apr 2063 to	29 Dec 2074				22 Jun 2039 to	22 Jun 2069		16 Sep 2067			1 Aug 2069
						Land Use		Commercial			Residential,	Commercial,	Educational	Residential,	Commercial,	Kindergarten,	Composite	Residential,	Commercial,	Tourism,	Entertainment,	Other	Residential,	Commercial,	Tourism,	Entertainment,	Others	Residential,	Commercial,	Other			Composite			Residential,	Commercial,	Tourism,	Entertainment,	Other		Residential,	Commercial				Residential,	Commercial,	Other	Residential			Residential,	Commercial
						District		Hankou			Qiaokou			Yuhua				Tianhe					Tianhe					Liwan					Tianhe			Baiyun						Zengcheng					Baiyun			Baoan			Yantian
						City		Wuhan			Wuhan			Changsha				Guangzhou					Guangzhou					Guangzhou					Guangzhou			Guangzhou						Guangzhou					Guangzhou			Shenzhen			Shenzhen
						Holding Entity		New World Development	(Wuhan) Co., Ltd.		New World New Land Real	Estate (Wuhan) Co., Ltd		Hunan Success New Century	Investment Company	Limited		Guangzhou Xin Hua Chen	Real Estate Co., Ltd.				Guangzhou Xin Yi	Development Limited				Guangzhou Fong Chuen New	World Property	Development Co.,	Limited		Concord Properties Holding	(Guangzhou) Limited		Guangzhou Jixian Zhuang	New World City Garden	Development Limited,	Guangzhou Xin Sui	Tourism Centre Ltd.		Guangzhou Hemsell Real	Estate Development	Co., Ltd., Guangzhou	Bosson Real Estate Co.,	Ltd.	Guangzhou Yibo Real Estate	Development Co., Ltd.		Shenzhen Top One Real	Estate Development	Co., Ltd.	Shenzhen Topping Real	Estate Development	Co., Ltd.
						Property Name		Wuhan New World	Centre Phase	III	Wuhan New World	. Times		Changsha La Ville	New World			Guangzhou Dong	Yi Garden				Guangzhou Central	Park-view				Guangzhou Covent	Garden				Guangzhou	Concord New	World Garden	Guangzhou P,ark	Paradise	Phase 2, 4	and	remaining	phases	Guangzhou Xintang	New World	Garden			Guangzhou Park	Paradise	Area 6	Shenzhen New	World	Signature Hill	Shenzhen New	World Yi	Shan Garden
					Property	No.		120			121			122				123					124					125					126			127						128					129			130			131
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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
– III-17 –
Market (4)inValue StateExisting Attributable Grouptheto AtAs 31December 2015 million)(RMB 619.00 (7)4,373.14 35.00 103.25 5,183.00 1,248.00 3,494.00 4.84 754.00 29.96 42.00 1,821.00
Interest Group 100.00% 84.80% 62.50% 100.00% 100.00% 100.00% 100.00% 88.00% 100.00% 42.20% 100.00% 100.00%
Attributable theto
Market (4)inValue State AtAs December 2015 million) 619.00 (7)5,157.00 56.00 103.25 5,183.00 1,248.00 3,494.00 5.50 754.00 71.00 42.00 1,821.00
Existing 31 (RMB
Gross Development (4)IfAsValue Completed AtAs 31December 2015 million)(RMB 531.88 12,072.66 524.82 — 12,021.34 1,569.56 8,532.05 — — — — 5,252.78
Outstanding Construction Cost million)(RMB 57.77 4,398.64 251.40 — 4,267.93 354.11 2,548.77 — — — — 1,944.18
Construction CostIncurred million)(RMB 169.16 1,954.09 1.26 — 1,233.52 67.95 2,281.13 — — — — 504.74
Pre-sale million) 430.52 590.94 — — 195.74 — — — — — — 101.39
Consideration (RMB
(1)GFA 75,299 47,731 — — 16,347 — — — — — — 18,729
Pre-sale
Carof Parking Spaces 363 1,637 690 413 5,428 268 0 0 0 0 346 4,552
No.
of
ofDate Completion Construction 20162003– 20182014– 2020 1999 20182010– 20182013– 20162020– 2004 2015 2010 2013 20162024–
(1)(2)GFA m)(sq 95,978 1,403,025 93,900 24,489 1,509,466 130,680 588,857 479 44,761 9,618 6,183 920,637
(1)SiteArea m)(sq (3)137,340 1,115,811 212,705 — (3)1,742,000 (3)14,476 196,462 — — — — (3)124,275
Property Hotel Office
of Commercial, Carpark Commercial, Carpark, Commercial, Carpark Commercial, Office, Carpark, Ancillary facilities Commercial, Office, Carpark, Ancillary facilities Carpark Commercial, Carpark, Ancillary facilities
Type Residential, Residential, Residential, Carpark Residential, Residential, Residential, Office Residential Residential Commercial, Residential,
ofDate TermUse 2038Decto 206824Dec 2064Janto Jul207030 2045Marto 207610Jan 2064Jan 2048Jun 2049Juneto 205326June 2048Jun 2064Jul 2048Septo 252064Mar 2066 2042Marto 20723Mar 2078Junto 2084May7
Expiry Land 24 26 2 22 8 9 8 28 15 Aug 3 5
Use Commercial Residential Commercial Commercial Commercial
Land Residential, Residential Residential Residential Composite Commercial Composite Residential Catering, Residential, Residential, Residential,
Gaoxin
District Duanzhou Nanhai Huicheng Changning Heping Heping Heping Zhongshan Zhongshan Daliang Jinwan Gaoxin
City Zhaoqing Foshan Huizhou Shanghai Shenyang Shenyang Shenyang Dalian Dalian Shude Zhuhai Anshan
Entity WorldNew DevelopmentProperty Limited RealHuHaoDa DevelopmentEstate FoshanLtd.,Co., RealCountryEstate Ltd.,DevelopmentCo., ClubFoshanCountry Ltd.Co., HousingWorldNew LimitedDevelopment TrioProperty Ltd.DevelopmentCo., (Shenyang)World DevelopmentProperty Limited XinWorldNew Ltd.PropertiesHuiCo., (Shenyang)World DevelopmentProperty Limited PlazaWorldNew Ltd.InternationalCo., WorldTowerNew Ltd.Co., ShunxingShunde RealCompanyEstate Limited HousingWorldNew LimitedDevelopment (Anshan)World DevelopmentProperty Ltd.Co.,
Holding Zhaoqing Foshan Huizhou Shanghai New Shenyang New Dalian Dalian Foshan Zhuhai New
Name New GardenWorld ofCanton FirstEstate Changhuyuan Parking ofPortion Shanghai Zhongshan Square New GardenWorld New World Commercial Centre and Office ofPortion Shenyang WorldNew Centre WorldNew Plaza WorldNew Tower WorldNew Centre HaiJin WorldNew WorldNew Garden
Property Zhaoqing Portion Huizhou Car Shenyang Shenyang Residential Dalian Dalian Shunde Zhuhai Anshan
Property No. 132 133 134 135 136 137 138 139 140 141 142 143
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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
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Market	Gross Value(4) in	Development Market Existing State	Value(4) As If Value(4) in Attributable	Completed Existing State to the Group	Date of No. of Car Outstanding As At As At Interest As At	Property Expiry Date of Completion of Parking Pre-sale Construction Construction 31 December 31 December Attributable 31 December	No. Property Name Holding Entity City District Land Use Land Use Term Type of Property Site Area(1) GFA(1)(2) Construction Spaces Pre-sale GFA(1) Consideration Cost Incurred Cost 2015 2015 to the Group 2015	(sq m) (sq m) (RMB million) (RMB million) (RMB million) (RMB million) (RMB million) (RMB million)	144 Jinan Sunshine Jinan New World Sunshine Jinan Huaiyin Residential, Public 6 Jun 2041 to Residential, 13,668 114,722 2008–2016 832 — — 257.24 79.59 736.43 852.00 100.00% 852.00	Garden Development Ltd. Facilities 6 Jun 2071 Commercial,	Office, Hotel,	Carpark,	Ancillary	facilities	145 Ningbo New World Ningbo Xin Li Real Estate Ningbo Jiangdong Residential, 13 May 2043 to Residential, 79,081(2) 826,977 2020 3,894 — — 339.50 4,001.06 14,149.39 5,592.00 49% 2,740.08	Plaza Co. Ltd., Ningbo Gong Commercial, 13 May 2081 Commercial,	Tai Properties Co. Ltd Cultural and Office, Hotel,	Entertainment Carpark,	Ancillary	facilities	10,545,708 42,199 530,587 12,596.11 107,654.90 70,321.99 63,397.36	Notes:	(1) All areas stated are approximations.	(2) The GFA has included the gross floor area of car parking portion of the property, if any.	(3) The site area mentioned refers to the total site area of the whole development of the property.	(4) All values stated are approximations.	(5) Portion of the property with a gross floor area of approximately 8,116.00 sq m is erected on allocated land and we have roughly estimated the land premium required of	RMB104,000,000 for converting the land use rights from allocated to granted. During the course of our valuation, we have valued such portion of the property by assuming	that the aforesaid conversion of land use rights to granted has been completed and have taken into account of the land premium in our valuation.	(6) Pursuant to a participation agreement dated 11 September 2006 entered into between the Company and Solar Leader Limited (‘‘Solar Leader’’), a wholly owned subsidiary	of New World Development Limited. Solar Leader has a participating interest representing 50% of the total interest in this property project.	(7) According to the Group’s specific terms of instruction, we have taken into account the outstanding land costs of the property of approximately RMB83,901,000 in our	valuation.
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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
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		Existing State	Attributable	to the Group	As At	31 December	2015	(RMB million)	164.51			33.00						62.20			94.75			6.25			25.50		137.00			16.00
					Interest	Attributable to	the Group		84.80%			100.00%						100.00%			50.00%			62.50%			100.00%		100.00%			100.00%
		Market	Value(3) in	Existing State	As At	31 December	2015	(RMB million)	194.00			33.00						62.20			189.50			10.00			25.50		137.00			16.00
				No. of	Car	Parking	Spaces		0			0						0			0			0			0		25			0
						Completion	Date		1997			1997						2006			2002			2007			2008		2000–2010			2011–2013
Group V — Land and Buildings held by the Group for owner-occupation/operation in the PRC	Valuation Summary as at 31 December 2015					Property Expiry Date of Type of	No. Property Name Holding Entity City District Land Use Land Use Term Property Site Area(1) GFA(1)(2)	(sq m) (sq m)	146 Golf Course Portion of Foshan Country Club Co., Foshan Nanhai Golf Course and 17 Mar 2033 to Golf Course 1,833,421 5,543	Canton First Estate Ltd. Gaoxin Ancillary 27 Jan 2034	service	147 Various Portions of Tianjin New World Anderson Tianjin Nankai Commercial 20 Jul 2045 Commercial, — 3,643	Xin An New World Development Company Office		Plaza Limited, Tianjin Xin	Guang Development	Co., Ltd.	148 Office Portion of Wuhan New World Development Wuhan Jianghan Commercial 6 Nov 2042 Office — 4,242	New World International (Wuhan) Co., Ltd.	Trade Tower I	149 Office Portion of Shanghai Shanghai New World Huai Shanghai Huangpu Composite 1 Dec 2044 Office — 3,704	Hong Kong New World Hai Property	Tower Development Co., Ltd.	150 Office Portion of Guangzhou Guangzhou Hemsell Real Guangzhou Zengcheng Residential, 9 Apr 2063 to Office — 1,326	Xintang New World Estate Development Co., Commercial 29 Dec 2074	Garden Ltd.	151 Office Portion of Jinan Jinan New World Sunshine Jinan Huaiyin Public facilities, 6 Jun 2041 to Office — 2,806	Sunshine Garden Development Ltd. Residential 6 Jun 2071	152 Office and Car Parking New World (Shenyang) Shenyang Heping Composite 8 Jun 2048 Office, — 24,792	Portion of Shenyang Property Development Carpark	New World Garden Limited	153 Retail Portion of Anshan New World (Anshan) Anshan Gaoxin Residential, 5 Jun 2048 to Office — 3,264	New World Garden Property Development Commercial 7 May 2084	Co., Ltd.
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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
– III-20 –
Market (3)inValue StateExisting Attributable Grouptheto AtAs 31December 2015 million)(RMB 18.90 16.30 574.41
Interest to Group 100.00% 100.00%
the
Attributable
Market (3)inValue State AtAs December 2015 million) 18.90 16.30 702.40
Existing 31 (RMB
of Car 0 0 25
No. Parking Spaces
Completion Date 2015 2015
(1)(2) m)(sq 2,102 1,533 52,955
GFA
(1)
Area m)(sq — —
Site
of
Office
Type Property Office Commercial,
ofExpiryDate TermUseLand 2050Oct27to 2080Oct27 20504Oct4to 2080Oct ifany.
property,
Use the
Financial, Residential Commercial
of
Land Commercial, Residential,
portion
District Guangyang Lunan
parking
car
City Langfang Tangshan of
area
World World
Development Development floor
New New
Entity Ltd. Ltd.
Holding FangLang Properties Co., ShanTang Property Co., thegross
approximations.
of approximations.
are
Langfangof Centre Portion WorldNew are included
Name World Retail stated has stated
Property PortionOffice New andOffice Tangshan Centre areas GFA values
All The All
Property No. 154 155 Notes: (1) (2) (3)
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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
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		Value(4) in	Existing State	Attributable	to the Group	As At	31 December	2015	(RMB million)	175.00					1,468.00			1,201.00			329.00			3,173.00
					Interest	Attributable	to the	Group		100.00%					100.00%			100.00%			100.00%
			Market	Value(4) in	Existing State	As At	31 December	2015	(RMB million)	175.00					1,468.00			1,201.00			329.00			3,173.00
		Gross	Development	Value(4) As	If Completed	As At	31 December	2015	(RMB million)	1,352.05					2,007.18			1,494.59			402.25			5,256.07
						Outstanding	Construction	Cost	(RMB million)	782.46					230.59			67.76			19.90
						Construction	Cost	Incurred	(RMB million)	101.37					1,203.11			1,006.47			261.68
						No. of Car	Parking	Spaces		279					0			0			0			279
						Date of	Completion of	Construction		2017					2016			2016			2016
								GFA(1)(2)	(sq m)	80,798					119,475			93,412			40,225			333,910
Group VI — Assets Under Construction held by the Group in the PRC	Valuation Summary as at 31 December 2015						Property Expiry Date of Type of	No. Property Name Holding Entity City District Land Use Land Use Term Property Site Area(1)	(sq m)	156 New World Guangzhou Guangzhou Jixian Zhuang Guangzhou Baiyun Residential, 22 Jun 2039 to Hotel 90,846(3)	Hotel New World City Garden Commercial, 22 Jun 2069	Development Limited, Tourism,	Guangzhou Xin Sui Entertainment,	Tourism Centre Ltd. Other	157 Convention Centre New World (Shenyang) Shenyang Heping Composite 8 Jun 2048 Convention 196,462(3)	Shenyang New World Property Development Centre	Centre Limited	158 New World Shenyang Hotel New World (Shenyang) Shenyang Heping Composite 8 Jun 2048 Hotel 196,462(3)	Property Development	Limited	159 pentahotel Shenyang New World (Shenyang) Shenyang Heping Composite 8 Jun 2048 Hotel 196,462(3)	Property Development	Limited		Notes:	(1) All areas stated are approximations.	(2) The GFA has included the gross floor area of car parking portion of the property, if any.	(3) The site area mentioned refers to the total site area of the whole development of property.	(4) All values stated are approximations.

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APPENDIX III SUMMARY OF PROPERTY VALUATION OF THE NWCL GROUP
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Group VII — Contracted properties held by the Group in the PRC	Valuation Summary as at 31 December 2015	Market	Gross Value(4) in	Development Market Existing State	Value(4) As Value(4) in Attributable to	If Completed Existing State the Group	Date of No. of Car Construction Outstanding As At As At Interest As At	Property Expiry Date of Type of Completion of Parking Cost Construction 31 December 31 December Attributable to 31 December	No. Property Name Holding Entity City District Land Use Land Use Term Property Site Area(1) GFA(1)(2) Construction Spaces Incurred Cost 2015 2015 the Group 2015	(sq m) (sq m) (RMB million) (RMB million) (RMB million) (RMB million) (RMB million)	160 Beijing Xin Yu Beijing Chong Wen-New Beijing Dongcheng Residential, 7 Jul 2046 to Commercial 443,239(3) 799,987 N/A 2,394 244.15 4,173.80 35,878.63 12,419.00(5) 70.00% 8,693.30(5)	Garden World Properties Commercial 7 Jul 2076	Development Co., Ltd.	799,987 2,394 35,878.63 12,419.00 8,693.30	Notes:	(1) All areas stated are approximations. (2) The GFA has included the gross floor area of car parking portion of the property, if any.	(3) The site area mentioned refers to the total site area of the whole property development.	(4) All values stated are approximations.	(5) According to the Group’s specific terms of instruction, we have taken into account the outstanding demolition, relocation and compensation costs of the property of	approximately RMB7,686,433,000 in our valuation.
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APPENDIX IV

APPENDIX IV GENERAL INFORMATION OF NWD AND THE OFFEROR

RESPONSIBILITY STATEMENT

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

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

DISCLOSURE OF INTERESTS IN NWCL’S SECURITIES

For the purpose of paragraphs 2 and 3 in this Appendix IV to this Composite Document, ‘‘interested’’ has the same meaning as ascribed to that term in Part XV of the SFO.

As at the Latest Practicable Date, save as disclosed in the section headed ‘‘Shareholding Structure of NWCL and the Offers’’ in ‘‘Letter from HSBC’’ in this Composite Document:

(a) the Offeror did not own any NWCL Shares, NWCL Options or convertible securities, warrants, options or derivatives in respect of NWCL Shares;
(b) no director of the Offeror was interested in any NWCL Shares, NWCL Options or convertible securities, warrants, options or derivatives in respect of NWCL Shares; and
(c) no Offeror Concert Party owned or controlled any NWCL Shares, NWCL Options or convertible securities, warrants, options or derivatives in respect of NWCL Shares.

3. DEALINGS IN NWCL’S SECURITIES

During the Relevant Period, neither NWD nor the Offeror had dealt for value in any NWCL Shares, NWCL Options or convertible securities, warrants, options or derivatives in respect of NWCL Shares.

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APPENDIX IV

APPENDIX IV GENERAL INFORMATION OF NWD AND THE OFFEROR

During the Relevant Period, certain Offeror Concert Parties had dealt for value in NWCL Options, the particulars of which are as follows:

Dealings in NWCL Options

				Number
				of NWCL
				Shares	Exercise	Date of
			Number	under the	price per	exercise of
			of NWCL	NWCL	NWCL	NWCL	Total exercise
Name	Date of grant	Exercisable period	Options	Options	Option	Options	price paid
					(HK$)		(HK$)
Dr. Cheng Kar-	18 January	19 February 2011	2,077,922	2,077,922	3.036	15 January	6,308,571.19
Shun, Henry	2011	to 18 February				2016
		2016
Mr. Cheng Kar-	18 January	19 February 2011	831,169	831,169	3.036	15 January	2,523,429.08
Shing, Peter	2011	to 18 February				2016
		2016
Dr. Cheng Chi-	18 January	19 February 2013	935,066	935,066	3.036	15 January	2,838,860.38
Kong, Adrian	2011	to 18 February				2016
		2016
Mr. Lee Luen-	18 January	19 February 2011	311,688	311,688	3.036	15 January	946,284.77
Wai, John	2011	to 18 February				2016
		2016

Save for the above, during the Relevant Period, none of the Offeror Concert Parties had dealt for value in any NWCL Shares, NWCL Options or convertible securities, warrants, options or derivatives in respect of NWCL Shares.

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APPENDIX IV

APPENDIX IV GENERAL INFORMATION OF NWD AND THE OFFEROR

ARRANGEMENTS IN CONNECTION WITH THE OFFERS
As at the Latest Practicable Date,
(a) none of the existing NWCL Directors had been given any benefit as compensation for loss of office or otherwise in connection with the Offers;
(b) no agreement, arrangement or understanding (including any compensation arrangement) existed between the Offeror or any Offeror Concert Parties and any of the NWCL Directors or recent NWCL Directors, NWCL Shareholders or recent NWCL Shareholders having any connection with or was dependent upon the outcome of the Offers (except for any Deed of Undertaking executed by any of such persons who were also NWCL Optionholders);
(c) no arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code had been entered into between the Offeror or any Offeror Concert Parties and any other person;
(d) no person who owned or controlled NWCL Shares, NWCL Options or convertible securities, warrants, options or derivatives in respect of NWCL Shares had irrevocably committed themselves to the Offeror or NWD to accept or reject the Offers;
(e) there were no NWCL Shares, NWCL Options or convertible securities, warrants, options or derivatives in respect of NWCL Shares which the Offeror or any Offeror Concert Parties had borrowed or lent, save for borrowed securities (if any) which have been either on-lent or sold;
(f) there was no agreement or arrangement to which the Offeror was a party which related to the circumstances in which it might or might not invoke or seek to invoke a condition to the Offers; and
(g) the Offeror had no intention to transfer, charge or pledge any NWCL Shares acquired pursuant to the Offers to any other persons and had no agreement, arrangement or understanding with any third party to do so.

5. MISCELLANEOUS

(a) The Offeror is a company incorporated in Hong Kong with limited liability on 6 October 1970 and is a wholly owned subsidiary of NWD. The registered office of the Offeror is 30th Floor, New World Tower, 16–18 Queen’s Road Central, Hong Kong.

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APPENDIX IV

APPENDIX IV GENERAL INFORMATION OF NWD AND THE OFFEROR

(b) The directors of the Offeror are: Dr. Cheng Kar-Shun, Henry Mr. Chen Guanzhan Mr. Au Tak-Cheong

(c) NWD is a company incorporated in Hong Kong with limited liability on 29 May 1970. The registered office of NWD is 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong. The ultimate controlling shareholders of NWD and the Offeror are Cheng Yu Tung Family (Holdings) Limited (‘‘CYTF’’) and Cheng Yu Tung Family (Holdings II) Limited (‘‘CYTFII’’). The directors of both CYTF and CYTFII are Dato’ Dr. Cheng Yu-Tung, Dr. Cheng Kar-Shun, Henry, Mrs. Sun Cheng Lai-Ha, Cecilia, Mrs. Doo Cheng Sau-Ha, Amy and Mr. Cheng Kar-Shing, Peter. The registered offices of CYTF and CYTFII are both located at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.
(d) The directors of NWD are:

Executive Directors:

Dr. Cheng Kar-Shun, Henry Dr. Cheng Chi-Kong, Adrian Mr. Chen Guanzhan Ms. Ki Man-Fung, Leonie Mr. Cheng Chi-Heng Ms. Cheng Chi-Man, Sonia Mr. Au Tak-Cheong

Non-executive Directors:

Mr. Doo Wai-Hoi, William Mr. Cheng Kar-Shing, Peter

Independent Non-executive Directors:

Mr. Yeung Ping-Leung, Howard Mr. Cha Mou-Sing, Payson (alternate director to Mr. Cha Mou-Sing, Payson: Mr. Cha Mou-Zing, Victor) Mr. Ho Hau-Hay, Hamilton Mr. Lee Luen-Wai, John Mr. Liang Cheung-Biu, Thomas

(e) The registered office of HSBC is situated at 1 Queen’s Road Central, Hong Kong.

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APPENDIX IV

APPENDIX V GENERAL INFORMATION OF NWCL

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1. RESPONSIBILITY STATEMENT
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This Composite Document includes particulars given in compliance with the Takeovers Code for the purpose of giving information with regard to the NWCL Group.

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

SHARE CAPITAL OF NWCL

As at the Latest Practicable Date:

(a) the authorised share capital of NWCL was HK$3,000,000,000.00 divided into 30,000,000,000 NWCL Shares;
(b) the issued share capital of NWCL was approximately HK$870,167,175.40 divided into 8,701,671,754 NWCL Shares;
(c) NWCL had issued 12,902,197 new NWCL Shares pursuant to the exercise of the NWCL Options since 30 June 2015, being the end of the last financial year of NWCL;
(d) all of the NWCL Shares ranked pari passu in all respects as regards rights to capital, dividends and voting;
(e) there were 25,544,661 NWCL Options. As set out in the table setting out the exercise price applicable to each NWCL Option in the section headed ‘‘Option Offer’’ in the ‘‘Letter from HSBC’’ in this Composite Document, if any NWCL Option is vested and is exercised in accordance with the terms of the NWCL Share Option Schemes prior to the Closing Date, any NWCL Shares issued as a result of the exercise of such NWCL Options prior to the Closing Date will be subject to and eligible to participate in the Share Offer. Pursuant to the terms of the NWCL Share Option Schemes, if the Share Offer becomes or is declared unconditional in all respects, the NWCL Optionholders shall be entitled to exercise the NWCL Options in full (to the extent not already exercised) at any time within 14 days following the date on which the Share Offer becomes or is declared unconditional in all respects. NWCL Options not exercised at the expiry of such 14-day period shall lapse; and
(f) other than the NWCL Options, there are no other options, derivatives, warrants or other securities convertible or exchangeable into NWCL Shares which were issued by NWD, the Offeror or NWCL.

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APPENDIX V

GENERAL INFORMATION OF NWCL

3. MARKET PRICES

The table below sets out the closing price of the NWCL Shares on the Stock Exchange on (i) the last Business Day of each of the calendar months during the Relevant Period; (ii) the Last Trading Day; and (iii) the Latest Practicable Date:

		Closing price for
		each NWCL Share
		(HK$)
31	July 2015	4.78
31	August 2015	4.70
30	September 2015	4.59
30	October 2015	5.15
30	November 2015	5.32
31	December 2015 (Last Trading Day)	6.21
29	January 2016	7.51
24	February 2016 (Latest Practicable Date)	7.47

The lowest and highest closing market prices of NWCL Shares as quoted on the Stock Exchange during the Relevant Period were HK$3.89 per NWCL Share on 8 July 2015 and HK$7.66 per NWCL Share on 13 January 2016, respectively.

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APPENDIX IV

APPENDIX V

GENERAL INFORMATION OF NWCL

4. DISCLOSURE OF INTERESTS

For the purpose of this paragraph, ‘‘interested’’ and ‘‘interests’’ have the same meanings as ascribed to those terms in Part XV of the SFO.

(a) Long position in shares

As at the Latest Practicable Date, certain NWCL Directors had interests in NWCL Shares and/or NWD Shares, the particulars of which are as follow:

NWCL Shares
Dr. Cheng Kar-Shun, Henry
Mr. Cheng Kar-Shing, Peter
Dr. Cheng Chi-Kong, Adrian
Mr. Fong Shing-Kwong,
Michael
Ms. Ngan Man-Ying, Lynda
Dr. Cheng Wai-Chee,
Christopher
Hon. Tien Pei-Chun, James
Mr. Lee Luen-Wai, John
NWD Shares
Dr. Cheng Kar-Shun, Henry
Mr. Cheng Kar-Shing, Peter
Mr. Fong Shing-Kwong,
Michael

Number of shares
Percentage of
the relevant
issued share
capital as at
the Latest
Practicable Date
Personal
interests
Family
interests
Corporate
interests
Total
2,077,922
—
—
2,077,922
0.02
1,587,130
—
—
1,587,130
0.02
935,066
—
—
935,066
0.01
2,134,376
—
—
2,134,376
0.02
1,038,961
—
—
1,038,961
0.01
699,136
—
—
699,136
0.01
699,136
—
—
699,136
0.01
699,136
—
—
699,136
0.01
—
600,000
—
600,000
0.01
—
506,545
—
506,545
0.01
213,182
—
—
213,182
0.00

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APPENDIX V

GENERAL INFORMATION OF NWCL

(b) Long position in underlying shares

NWD

As at the Latest Practicable Date, certain NWCL Directors had personal interests in share options to subscribe for NWD Shares under the share option scheme of NWD, and are accordingly regarded as interested in the underlying NWD Shares, the particulars of which are as follows:

				Exercise
		Exercisable	Number of	price per
Name	Date of grant	period	share options	share
		note		HK$
Dr. Cheng Kar-Shun, Henry	19 March 2012	1	10,675,637	9.152
Mr. Cheng Kar-Shing, Peter	19 March 2012	1	533,779	9.152
Dr. Cheng Chi-Kong, Adrian	19 March 2012	1	3,736,471	9.152
Ms. Cheng Chi-Man, Sonia	19 March 2012	1	3,202,688	9.152
Mr. Fong Shing-Kwong, Michael	19 March 2012	2	919,680	9.152
Mr. Lee Luen-Wai, John	19 March 2012	1	533,779	9.152

Notes:

Divided into 4 tranches, exercisable from 19 March 2012, 19 March 2013, 19 March 2014 and 19 March 2015, respectively to 18 March 2016.
Divided into 2 tranches, exercisable from 19 March 2014 and 19 March 2015, respectively to 18 March 2016.

(c) Long position in debentures

NWCL

As at the Latest Practicable Date, certain NWCL Directors had interests in the debentures issued by NWCL, the particulars of which are as follows:

Name Mr. Cheng Kar-Shing, Peter Mr. Fong Shing- Kwong, Michael Mr. Ip Yuk-Keung, Albert	Amount of debentures issued by NWCL Percentage of the total debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total RMB RMB RMB RMB — 12,256,0001 16,000,0002 28,256,000 0.30 12,256,0001 — — 12,256,000 0.13 — 3,064,0001 — 3,064,000 0.03

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APPENDIX V GENERAL INFORMATION OF NWCL
Notes:
1. These debentures were issued in USD and have been translated into RMB using the rate of
USD1=RMB6.128.
2. These debentures are beneficially owned by a company which is wholly owned by Mr. Cheng
Kar-Shing, Peter.
(d) Short position in NWCL Shares
As at the Latest Practicable Date, MLAP (together with any entity that is controlling,
controlled by, or under the same control as MLAP, but excluding exempt principal traders)
had interests in NWCL Shares, the particulars of which are as follows:
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Percentage of
the relevant
issued share
capital as at the
Number of Latest Practicable
Name NWCL Shares Date
Bank of America, N.A. 544,000 0.006%
Notes:
1. Prior to commencement of the Offer Period, Bank of America, N.A., entered into an equity swap
through an ISDA Master Agreement with a US-based client. The shares underlying the swap are
544,000 NWCL Shares. To hedge its exposure under the swap, Bank of America, N.A. entered into a
back-to-back equity swap arrangement with Merrill Lynch International which has an exempt principal
trader status, referencing the 544,000 NWCL Shares, and Merrill Lynch International has purchased the
equivalent number of NWCL Shares, which it holds as beneficial owner.
2. The maturity date of the equity swap between Bank of America, N.A. and the US-based client is 19
June 2017. The swap agreements involve 9 further derivative positions.
3. The reference prices for the 9 derivative positions (and the relevant quantity of NWCL Shares
referenced) are set out in the table below:
Ticker Quantity Reference Price
HK$
0917.HK 456,000 5.7
0917.HK 8,000 5.636627
0917.HK 12,000 5.967015
0917.HK 16,000 5.859388
0917.HK 16,000 6.197286
0917.HK 20,000 5.995048
0917.HK 20,000 5.946991
0917.HK 2,000 6.217309
0917.HK –6,000 6.182714
4. For clarity, the ‘‘–6,000’’ in the last line of the table at note 3 above represents a reduction in the
overall derivative position by 6,000 NWCL Shares.
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APPENDIX IV

APPENDIX V GENERAL INFORMATION OF NWCL

Confirmations

Except as disclosed in this section headed ‘‘Disclosure of Interests’’ in this Appendix V, as at the Latest Practicable Date:

(a) neither NWCL nor any of the NWCL Directors was interested in any NWD Shares or the shares of the Offeror or any convertible securities, warrants, options or derivatives in respect of NWD Shares or shares of the Offeror;

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(b) none of the NWCL Directors was interested in any NWCL Shares or any
convertible securities, warrants, options or derivatives in respect of NWCL Shares;
(c) no subsidiary of NWCL, or any pension fund of NWCL or of any other member of
the NWCL Group or any adviser to NWCL as specified in class (2) of the definition
of ‘‘associate’’ under the Takeovers Code (excluding exempt principal traders)
owned or controlled any NWCL Shares or any convertible securities, warrants,
options or derivatives in respect of NWCL Shares;
(d) neither NWCL nor any person who is its associate by virtue of classes (1), (2), (3)
or (4) of the definition of ‘‘associate’’ under the Takeovers Code had an
arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code
with any person;
(e) none of the non-exempt discretionary fund managers and principal traders
connected with NWCL owned or controlled any NWCL Shares or any convertible
securities, warrants, options or derivatives in respect of NWCL Shares; and
(f) neither NWCL nor any of the NWCL Directors had borrowed or lent any NWCL
Shares or any convertible securities, warrants, options or derivatives in respect of
NWCL Shares.
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Each of the NWCL Directors who had a beneficial holding in NWCL Shares had indicated that he/she intended to accept the Share Offer in respect of his/her own beneficial ownership in such NWCL Shares.

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COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX V

GENERAL INFORMATION OF NWCL

DEALINGS IN NWD SHARES, SHARES OF THE OFFEROR, NWCL SHARES AND NWCL OPTIONS

During the Relevant Period, certain NWCL Directors had dealt for value in NWCL Options, the particulars of which are as follows:

Dealings in NWCL Options

				Number of
				NWCL
				Shares	Exercise	Date of
			Number of	under the	price per	exercise of
			NWCL	NWCL	NWCL	NWCL	Total exercise
Name	Date of grant	Exercisable period	Options	Options	Option	Options	price paid
					(HK$)		(HK$)
Dr. Cheng	18 January 2011	19 February 2011 to	2,077,922	2,077,922	3.036	15 January	6,308,571.19
Kar-Shun, Henry		18 February 2016				2016
Mr. Cheng	18 January 2011	19 February 2011 to	831,169	831,169	3.036	15 January	2,523,429.08
Kar-Shing, Peter		18 February 2016				2016
Dr. Cheng	18 January 2011	19 February 2013 to	935,066	935,066	3.036	15 January	2,838,860.38
Chi-Kong,		18 February 2016				2016
Adrian
Mr. Fong Shing-	18 January 2011	19 February 2013 to	277,481	277,481	3.036	15 January	842,432.32
Kwong, Michael		18 February 2016				2016
Ms. Ngan	18 January 2011	19 February 2011 to	1,038,961	1,038,961	3.036	15 January	3,154,285.60
Man-Ying,		18 February 2016				2016
Lynda
Dr. Cheng	18 January 2011	19 February 2011 to	311,688	311,688	3.036	15 January	946,284.77
Wai-Chee,		18 February 2016				2016
Christopher
Hon. Tien	18 January 2011	19 February 2011 to	311,688	311,688	3.036	15 January	946,284.77
Pei-Chun, James		18 February 2016				2016
Mr. Lee Luen-Wai,	18 January 2011	19 February 2011 to	311,688	311,688	3.036	15 January	946,284.77
John		18 February 2016				2016

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APPENDIX IV

APPENDIX V

GENERAL INFORMATION OF NWCL

Confirmations

During the Relevant Period, except as disclosed in this section headed ‘‘Dealings in NWD Shares, Shares of the Offeror, NWCL Shares and NWCL Options’’:

(a) neither NWCL nor any NWCL Director had dealt for value in any NWD Shares or the shares of the Offeror or any convertible securities, warrants, options or derivatives in respect of NWD Shares or shares of the Offeror; and
(b) none of the NWCL Directors had dealt for value in any NWCL Shares or any convertible securities, warrants, options or derivatives in respect of NWCL Shares.

During the Offer Period and up to the Latest Practicable Date, except as disclosed in this section headed ‘‘Dealings in NWD Shares, Shares of the Offeror, NWCL Shares and NWCL Options’’:

(a) no subsidiary of NWCL, or any pension fund of NWCL or of any other member of the NWCL Group or any adviser to NWCL as specified in class (2) of the definition of ‘‘associate’’ under the Takeovers Code (but excluding exempt principal traders) had dealt for value in any NWCL Shares or any convertible securities, warrants, options or derivatives in respect of NWCL Shares; and
(b) none of the non-exempt discretionary fund managers and principal traders connected with NWCL had dealt for value in any NWCL Shares or any convertible securities, warrants, options or derivatives in respect of NWCL Shares.
NWCL DIRECTORS’ SERVICE CONTRACTS

Save as disclosed in this section headed ‘‘NWCL Directors’ Service Contracts’’, as at the Latest Practicable Date, none of the NWCL Directors had entered into any service contracts with NWCL or any of its subsidiaries or associated companies which are fixed term contracts with more than 12 months to run irrespective of notice period, which has been entered into and amended within six months before the commencement of the Offer Period, or which are continuous contracts with a notice period of 12 months or more.

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Annual remuneration
for the financial
Date of service Expiry date of year ending
Name contract the service contract 30 June 2016
(HK’000)
Dr. Cheng Kar-Shun, Henry 16 March 2015 31 March 2018 223 [(2)]
Mr. Cheng Kar-Shing, Peter 16 March 2015 31 March 2018 2,113 [(3)]
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APPENDIX IV

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APPENDIX V GENERAL INFORMATION OF NWCL
Annual remuneration
for the financial
Date of service Expiry date of year ending
Name contract the service contract 30 June 2016
(HK’000)
Mr. Cheng Chi-Him, Conrad 1 December 2015 7 January 2019 1,649 [(3)(4)]
Ms. Cheng Chi-Man, Sonia 1 December 2015 7 January 2019 4,117 [(3)(5)]
Mr. Fong Shing-Kwong, Michael 16 March 2015 31 March 2018 2,143 [(3)]
Mr. Ip Yuk-Keung, Albert 1 December 2015 27 December 2018 312 [(2)(6)]
Notes:
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The service contracts of the above NWCL Directors do not contain any fixed or variable amount of remuneration. The remuneration of the above NWCL Directors will be reviewed by the remuneration committee of the NWCL Board and determined by the NWCL Board annually.
The remuneration of such NWCL Director comprises a director’s fee which, subject to authorisation given by the NWCL Shareholders in annual general meeting, is determined by the NWCL Board in December of the relevant financial year of NWCL and payable annually after the end of such financial year.
The remuneration of such NWCL Director comprises (i) a director’s fee which, subject to authorisation given by the NWCL Shareholders in annual general meeting, is payable annually after the end of the relevant financial year; and (ii) annual salary package payable over a 12-month period. Such NWCL Director is also entitled to a discretionary bonus to be determined by the remuneration committee of the NWCL Board. The annual remuneration of such NWCL Director for the financial year ending 30 June 2016 has not included any discretionary bonus which may be payable to such NWCL Director.
The earlier service contract of this NWCL Director, which expired on 7 January 2016, did not contain any fixed or variable amount of remuneration. Such earlier service contract provided that the remuneration of this NWCL Director comprised an annual salary package (which would be reviewed annually by the remuneration committee of the NWCL Board) and he would be entitled to a discretionary bonus. In addition, subject to authorisation given by the NWCL Shareholders in annual general meeting, his annual director’s fee would be determined by the NWCL Board annually. The aggregate annual remuneration paid to this NWCL Director for the financial year ended 30 June 2015 was HK$1,824,000.
The earlier service contract of this NWCL Director, which expired on 7 January 2016, did not contain any fixed or variable amount of remuneration. Such earlier service contract provided that the remuneration of this NWCL Director comprised an annual salary package (which would be reviewed annually by the remuneration committee of the NWCL Board) and she would be entitled to a discretionary bonus. In addition, subject to authorisation given by the NWCL Shareholders in annual general meeting, her annual director’s fee would be determined by the NWCL Board annually. The aggregate annual remuneration paid to this NWCL Director for the financial year ended 30 June 2015 was HK$4,950,000.
The earlier service contract of this NWCL Director, which expired on 27 December 2015, did not contain any fixed or variable amount of remuneration. Such earlier service contract provided that subject to authorisation given by the NWCL Shareholders in annual general meeting, the annual director’s fee of this NWCL Director would be determined by the NWCL Board annually. The aggregate annual remuneration paid to this NWCL Director for the financial year ended 30 June 2015 was HK$297,000.

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APPENDIX IV

APPENDIX V

GENERAL INFORMATION OF NWCL

MATERIAL LITIGATION

As at the Latest Practicable Date, none of the members of the NWCL Group were engaged in any litigation, arbitration or claim of material importance, and no litigation, arbitration or claim of material importance is known to the NWCL Directors to be pending or threatened by or against any member of the NWCL Group.

MATERIAL CONTRACTS

The following material contracts (not being contracts entered into in the ordinary course of business) had been entered into by the NWCL Group after the date of two years before the Announcement Date and up to and including the Latest Practicable Date:

(a) a subscription agreement dated 30 October 2014 among BOCI Asia Limited, The Hongkong and Shanghai Banking Corporation Limited, Citigroup Global Markets Limited and Merrill Lynch International and NWCL relating to the establishment by NWCL of an US$1,500 million medium term note programme and the issue by NWCL of US$900 million 5.375% notes due 2019;
(b) a sale and purchase agreement dated 3 July 2015 between NWDCL and Chow Tai Fook Enterprises Limited whereby NWDCL conditionally agreed to sell and Chow Tai Fook Enterprises Limited conditionally agreed to acquire the entire issued share capital of, and the outstanding shareholder’s loans owing from, New World Hotel Management (BVI) Limited for a consideration of HK$1,963 million;
(c) a sale and purchase agreement dated 2 December 2015 entered into between NWDCL and Shengyu in relation to the disposal of the NWCL Group’s interests in the property projects in Hankou, Wuhan city, Hubei province, the PRC for a total consideration of RMB3,800 million (subject to adjustment);
(d) a sale and purchase agreement dated 2 December 2015 entered into between NWDCL and Shengyu in relation to the disposal of the NWCL Group’s interests in the property projects in Huiyang, the PRC for a total consideration of RMB1,100 million (subject to adjustment);
(e) a sale and purchase agreement dated 2 December 2015 entered into between NWDCL and Shengyu in relation to the disposal of the NWCL Group’s interests in the property project in Haikou, the PRC for a total consideration of RMB8,600 million (subject to adjustment);
(f) a subscription agreement dated 23 December 2015 entered into between (i) Sherson Limited, a wholly owned subsidiary of NWD, and Vivid China Investment Limited, a wholly owned subsidiary of NWCL, as purchasers and (ii) Evergrande as issuer, pursuant to which Sherson Limited and Vivid China Investment Limited agreed to subscribe for the perpetual securities issued by Evergrande in an aggregate principal amount of

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APPENDIX IV

APPENDIX V GENERAL INFORMATION OF NWCL

US$900 million, for a consideration of US$450 million and US$450 million, respectively, the details of which are disclosed in the joint announcements of NWD and NWCL dated 23 December 2015 and 29 December 2015;

(g) a sale and purchase agreement dated 29 December 2015 entered into between NWDCL and Shengyu in relation to the disposal of the NWCL Group’s interests in the property projects in Chengdu, the PRC for a total consideration of RMB2,000 million (subject to adjustment); and (h) a sale and purchase agreement dated 29 December 2015 entered into between NWDCL and Shengyu in relation to the disposal of the NWCL Group’s interests in the property projects in Guiyang, the PRC for a total consideration of RMB5,300 million (subject to adjustment).

QUALIFICATIONS OF EXPERTS

The following are the qualifications of each of the experts who have been named in this Composite Document or who have given their opinion or advice, which is contained in this Composite Document:

Name Qualification HSBC a registered institution under the SFO, registered to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO and a licensed bank under the Banking Ordinance (Chapter 155 of the laws of Hong Kong) Somerley a licensed corporation which is permitted to carry on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO Knight Frank chartered professional surveyors and valuers

10. CONSENTS

Each of experts named in the section headed ‘‘Qualifications of Experts’’ above and MLAP as financial adviser to NWCL has given and has not withdrawn its written consents to the issue of this Composite Document with the inclusion therein of the opinions, reports and/or letters and/or the references to its name and/or opinions, reports and/or letters in the form and context in which they respectively appear.

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COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX V

GENERAL INFORMATION OF NWCL

11. MISCELLANEOUS

(a) As at the Latest Practicable Date, none of the existing NWCL Directors had been given any benefit as compensation for loss of office or otherwise in connection with the Offers.
(b) As at the Latest Practicable Date, there was no agreement or arrangement between any NWCL Director and any other person which is conditional on or dependent upon the outcome of the Offers or otherwise connected with the Offers (except for any Deed of Undertaking executed by any of such persons who were also NWCL Optionholders).
(c) As at the Latest Practicable Date, there was no material contract entered into by the Offeror or NWD in which any of the NWCL Directors has a material personal interest.
(d) The registered office of NWCL is P.O. Box 309, Ugland House, Grand Cayman KY11104, Cayman Islands. The head office and principal place of business of NWCL in Hong Kong is 9/F., New World Tower 1, 18 Queen’s Road Central, Hong Kong.
(e) The principal share registrar of NWCL is Royal Bank of Canada Trust Company (Cayman) Limited at 4th Floor, Royal Bank House, 24 Shedden Road, George Town, Grand Cayman KY1-1110, Cayman Islands.
(f) The Hong Kong branch share registrar and transfer office of NWCL is Tricor Standard Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(g) As at the Latest Practicable Date, the board of the NWCL comprised (a) seven executive directors, namely Dr. Cheng Kar-Shun, Henry, Mr. Cheng Kar-Shing, Peter, Dr. Cheng Chi-Kong, Adrian, Ms. Cheng Chi-Man, Sonia, Mr. Cheng Chi-Him, Conrad, Mr. Fong Shing-Kwong, Michael and Ms. Ngan Man-Ying, Lynda; and (b) four independent nonexecutive directors, namely Dr. Cheng Wai-Chee, Christopher, Hon. Tien Pei-Chun, James, Mr. Lee Luen-Wai, John and Mr. Ip Yuk-Keung, Albert.
(h) The company secretary of NWCL is Ms. Ngan Man-Ying, Lynda, who is a Practising Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants of the United Kingdom.
(i) The principal place of business of Somerley is 20/F, China Building, 29 Queen’s Road Central, Hong Kong.

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COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX V GENERAL INFORMATION OF NWCL

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at (i) the office of NWCL located at 9th Floor, New World Tower 1, 18 Queen’s Road Central, Hong Kong from 9:30 a.m. to 5:30 p.m., Monday to Friday (except public holidays), (ii) on the website of NWCL at www.nwcl.com.hk and (iii) the website of the SFC at www.sfc.hk from 27 February 2016 until the earlier of: (i) the Closing Date; and (ii) the date on which the Offers are withdrawn or lapse, whichever is the earliest:

(a) the memorandum and articles of association of NWCL;
(b) the memorandum and articles of association of the Offeror;
(c) the annual reports of NWCL for the two years ended 30 June 2015;
(d) the unaudited interim results announcement of NWCL for the six months ended 31 December 2015;
(e) the ‘‘Letter from HSBC’’, the text of which is set out on pages 13 to 34 of this Composite Document;
(f) the ‘‘Letter from the NWCL Board’’, the text of which is set out on pages 35 to 39 of this Composite Document;
(g) the ‘‘Letter from the NWCL Independent Board Committee’’, the text of which is set out on pages 40 and 41 of this Composite Document;
(h) the ‘‘Letter from the NWCL Independent Financial Adviser’’, the text of which is set out on pages 42 to 78 of this Composite Document;
(i) NWCL Directors’ service contracts referred to the section headed ‘‘NWCL Directors’ Service Contracts’’ in this Appendix V to this Composite Document;
(j) the written consents referred to in the section headed ‘‘Consents’’ in this Appendix V to this Composite Document;
(k) a form of the Deed of Undertaking;
(l) the material contracts referred to in the section headed ‘‘Material Contracts’’ in this Appendix V to this Composite Document;
(m) English and Chinese versions of the full property valuation report of the NWCL Group (including the valuation certificates) prepared by Knight Frank, a summary of which is set out in ‘‘Appendix III — Summary of Property Valuation of the NWCL Group’’ to this Composite Document; and
(n) the derivative contracts (and associated trade reports) relevant to the Bank of America N.A interest in the NWCL Shares as referred to in the section headed ‘‘Disclosure of Interests — (d) Short position in NWCL Shares’’ in this Appendix V to this Composite Document.

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COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX VI

FORM OF OPTION OFFER LETTER

The following is the form of the Option Offer letter being sent to the NWCL Optionholders in connection with the Option Offer.

27 February 2016

To the NWCL Optionholders

Dear Sir or Madam,

OPTION OFFER IN RELATION TO VOLUNTARY CONDITIONAL CASH OFFERS BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED ON BEHALF OF THE OFFEROR, A WHOLLY OWNED SUBSIDIARY OF NEW WORLD DEVELOPMENT COMPANY LIMITED, TO ACQUIRE ALL THE ISSUED SHARES OF NEW WORLD CHINA LAND LIMITED (OTHER THAN THOSE ALREADY HELD BY THE OFFEROR AND NEW WORLD DEVELOPMENT COMPANY LIMITED)

AND TO CANCEL ALL THE OUTSTANDING OPTIONS OF NEW WORLD CHINA LAND LIMITED

A composite offer and response document dated the same date as this letter jointly issued by New World Development Company Limited (新世界發展有限公司) (‘‘NWD’’), Easywin Enterprises Corporation Limited (義榮企業有限公司) (the ‘‘Offeror’’) and New World China Land Limited (‘‘NWCL’’) (the ‘‘Composite Document’’) is enclosed with this letter. Terms used but not defined in this letter shall have the same meanings and construction as in the Composite Document. This letter should be read in conjunction with the Composite Document and the PINK Form of Option Offer Acceptance.

NWD, the Offeror and NWCL issued a joint announcement dated 6 January 2016 (the ‘‘Joint Announcement’’) which stated that, among others, HSBC, on behalf of the Offeror, a wholly owned subsidiary of NWD, intended to make a voluntary conditional cash offer to acquire all of the Offer Shares. As stated in the Joint Announcement, as part of the Offers, the Offeror would make an appropriate offer, namely the Option Offer, to the NWCL Optionholders for the cancellation of all outstanding NWCL Options in accordance with Rule 13 of the Takeovers Code. The Option Offer will be subject to and conditional upon the Share Offer becoming or being declared unconditional in all respects.

This letter explains the actions you may take in relation to your outstanding NWCL Options. You are advised to refer to the Composite Document and the PINK Form of Option Offer Acceptance when considering them.

Your attention is also drawn to the terms and conditions of the NWCL Share Option Schemes.

– VI-1 –

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COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX VI FORM OF OPTION OFFER LETTER

TERMS OF THE OPTION OFFER

On behalf of the Offeror, we are making the Option Offer to you pursuant to Rule 13 of the Takeovers Code.

Any outstanding NWCL Options (both vested or unvested), to the extent not exercised within fourteen (14) days after the date on which the Share Offer becomes or is declared unconditional in all respects (the ‘‘Latest Option Exercise Date’’), will lapse automatically. You may accept the Option Offer by lodging a duly completed and signed PINK Form of Option Offer Acceptance and the relevant documents by the Closing Date and, if the Offers become unconditional in all respects, you will be entitled to the Option Offer Price.

The Option Offer Price above represents the ‘‘see-through’’ price of the outstanding NWCL Options, being an amount by which the Share Offer Price exceeds the exercise price of the relevant outstanding NWCL Option.

The Option Offer is subject to and conditional upon the Share Offer becoming or being declared unconditional in all respects. The Conditions are set out in the section headed ‘‘Conditions of the Offers’’ in ‘‘Letter from HSBC’’ in the Composite Document. In addition, all payments in respect of the Option Offer Price will be made by cheques in Hong Kong dollars.

You are further advised to refer to the sections headed ‘‘Overseas NWCL Offer Shareholders and NWCL Optionholders’’ and ‘‘Taxation and Independent Advice’’ in the ‘‘Letter from HSBC’’ in the Composite Document, and the section headed ‘‘Nominee Registration’’ in ‘‘Appendix I — Further Terms of the Offers’’ to the Composite Document.

Your attention is drawn to the ‘‘Letter from the NWCL Independent Board Committee’’ to the Independent NWCL Shareholders and the NWCL Optionholders set out in the Composite Document and the ‘‘Letter from the NWCL Independent Financial Adviser’’ set out in the Composite Document, which contain the recommendations of the NWCL Independent Board Committee and of the NWCL Independent Financial Adviser, respectively, in relation to the Offers.

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APPENDIX IV

APPENDIX VI

FORM OF OPTION OFFER LETTER

COURSES OF ACTION AVAILABLE TO THE NWCL OPTIONHOLDERS

In summary, the choices available to you in respect of your outstanding NWCL Options are:

(a) to the extent any of your outstanding NWCL Options (whether vested or unvested) is not exercised on or prior to the Latest Option Exercise Date, you may accept the Option Offer in accordance with its terms (as set out in the Composite Document and the PINK Form of Option Offer Acceptance) and receive the Option Offer Price if the Offers become unconditional in all respects, by allowing such unexercised outstanding NWCL Options to remain unexercised on the Latest Option Exercise Date, and returning, duly completed and signed, the PINK Form of Option Offer Acceptance enclosed together with the relevant document(s) as soon as possible and in any event by no later than 4:00 p.m. (Hong Kong time) on the Closing Date;
(b) subject to the restrictions under the Deed of Undertaking which you have executed (if any), you may in accordance with the terms of the NWCL Share Option Schemes exercise all of your outstanding vested NWCL Options (to the extent not already exercised) or some only of them to the extent specified in your notice of exercise, by submitting a notice of exercise of NWCL Options to the company secretary of NWCL at any time after the date of this letter (being 27 February 2016) and up to the Latest Option Exercise Date. Any NWCL Shares issued as a result of the exercise of such outstanding NWCL Options as mentioned above will be subject to and eligible to participate in the Share Offer. Please refer to the Composite Document for the details of the Offers in this regard; or
(c) do nothing, in which case, if the Offers become unconditional in all respects, your unexercised outstanding NWCL Options (whether vested or unvested) will lapse automatically after the Latest Option Exercise Date and you will not receive the Option Offer Price.

Each outstanding NWCL Option you hold is independent and you should make a separate decision for each one.

For further details, please refer to the remaining sections of this letter, the Composite Document, the PINK Form of Option Offer Acceptance and the terms and conditions of the NWCL Share Option Schemes.

OUTSTANDING NWCL OPTIONS HELD AS AT THE LATEST PRACTICABLE DATE

Information on the outstanding NWCL Options held by you as at the Latest Practicable Date is available from the company secretary of NWCL. If you exercise your outstanding NWCL Options after the Latest Practicable Date, you may accept the Option Offer only in respect of those outstanding NWCL Options which remain unexercised or unvested on the Latest Option Exercise Date.

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COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX VI FORM OF OPTION OFFER LETTER

LAPSED NWCL OPTIONS

Please note that nothing in this letter or the Composite Document serves to extend the life of a NWCL Option which lapses, will lapse, or has already lapsed, under the terms of the NWCL Share Option Schemes. You cannot exercise or accept the Option Offer in respect of a NWCL Option once it lapses in accordance with its terms.

PROFESSIONAL ADVICE

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The information provided in this letter is intended to give you factual details on which to base
your decision as to the action you wish to take.
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If you are in any doubt as to any aspect of this letter, the Composite Document or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional adviser.

GENERAL

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(a) All communications, notices, the PINK Form of Option Offer Acceptance, cheques,
certificates and other documents of any nature, if delivered by or sent to or from you as a
NWCL Optionholder or your designated agents by post, shall be posted at your own risk,
and none of NWD, the Offeror, NWCL or HSBC and any of their respective directors,
the Registrar and other parties involved in the Offers and any of their respective agents
accepts any liability for any loss or delay in postage or any other liabilities that may
arise as a result thereof.
(b) The provisions set out in the Composite Document and the PINK Form of Option Offer
Acceptance form part of the terms of the Option Offer.
(c) The Option Offer and all acceptances will be governed by and construed in accordance
with the laws of Hong Kong.
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(d) The due execution of a PINK Form of Option Offer Acceptance in respect of the Option
Offer will constitute an authority to the Offeror, HSBC or such person(s) as any of them
may direct (i) to complete on behalf of the accepting NWCL Optionholder the PINK
Form of Option Offer Acceptance and any other document(s) and (ii) to do any other act
that may be necessary or expedient for the purpose of cancelling all rights of the NWCL
Optionholders in respect of the outstanding NWCL Options which are the subject of such
acceptance.
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(e) By completing the PINK Form of Option Offer Acceptance in respect of a particular
outstanding NWCL Option, you irrevocably authorise the Offeror, HSBC and/or their
respective agents to send a cheque for collection at the office of NWCL in Hong Kong.
– VI-4 –
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– 358 –

COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX VI

FORM OF OPTION OFFER LETTER

ACTIONS TO BE TAKEN FOR ACCEPTING THE OPTION OFFER

In order to accept the Option Offer, you must deliver the duly completed and signed PINK Form of Option Offer Acceptance together with the relevant certificate(s), document(s) of title or entitlement in respect of the NWCL Options, and/or any other document(s) (if applicable) evidencing the grant of the NWCL Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) for your holding of NWCL Options for not less than the number of NWCL Options in respect of which you intend to accept the Option Offer, by post or by hand, to the company secretary of NWCL at 9/F., New World Tower 1, 18 Queen’s Road Central, Hong Kong marked ‘‘New World China Land Limited — Option Offer’’ on the envelope so as to reach the company secretary of NWCL as soon as possible but in any event by no later than 4:00 p.m. (Hong Kong time) on the Closing Date or such later time(s) and/or date(s) as the Offeror may determine and announce in accordance with the Takeovers Code. If you do not return a duly completed and signed PINK Form of Option Offer Acceptance or exercise your NWCL Options, subject to and conditional upon the Offers becoming unconditional in all respects, your outstanding NWCL Options (whether vested or unvested) will lapse automatically after the Latest Option Exercise Date.

Before delivering the PINK Form of Option Offer Acceptance to the company secretary of NWCL, please ensure that you have signed the PINK Form of Option Offer Acceptance and that your signature has been witnessed.

Payment of the Option Offer Price is expected to be made within seven (7) Business Days following the later of (i) the date on which the Offers become or are declared unconditional in all respects; and (ii) the date of receipt of the duly completed PINK Form of Option Offer Acceptance and all relevant document(s) by the company secretary of NWCL to render such acceptance, surrender and cancellation under the Option Offer valid.

No acknowledgment of receipt of any PINK Form of Option Offer Acceptance and/or NWCL Options relevant certificate(s) (if applicable) and/or any other document(s) evidencing the grant of the outstanding NWCL Options and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) will be given.

RESPONSIBILITY STATEMENTS

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

The directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this letter (other than that relating to the NWCL Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this

– VI-5 –

– 359 –

COMPOSITE DOCUMENT

APPENDIX IV

APPENDIX VI FORM OF OPTION OFFER LETTER

letter (other than those expressed by the NWCL Group or the NWCL Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this letter, the omission of which would make any statement in this letter misleading.

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

Yours faithfully,

For and on behalf of

The Hongkong and Shanghai Banking Corporation Limited Che Ning Liu

Co-head of Banking, Asia-Pacific

The Hongkong and Shanghai Banking Corporation Limited is a registered institution under the SFO registered to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities, and a licensed bank under the Banking Ordinance (Chapter 155 of the laws of Hong Kong).

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– VI-6 –
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– 360 –

NOTICE OF EGM

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(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 (新世界發展有限公司) (the ‘‘Company’’) will be held at Meeting Room S421 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Friday, 18 March 2016 at 11:15 a.m. (or any adjournment thereof) for the purpose of considering and, if thought fit, with or without amendments, passing the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT:

(A) the voluntary conditional cash offer made by The Hongkong and Shanghai Banking Corporation Limited (‘‘HSBC’’) on behalf of Easywin Enterprises Corporation Limited (the ‘‘Offeror’’), a wholly owned subsidiary of the Company, to acquire all of the ordinary shares of HK$0.10 each in the issued share capital of New World China Land Limited (‘‘NWCL Shares’’), other than those already held by the Offeror and the Company, at the price of HK$7.80 per NWCL Share (‘‘Share Offer Price’’), subject to and conditional upon the conditions set out, and as described, in the circular (the ‘‘Circular’’, a copy of which has been produced to the meeting marked ‘‘A’’ and initialled by the chairman of the meeting for identification purposes) of the Company dated 29 February 2016 (the ‘‘Share Offer’’), be and is hereby approved, confirmed and ratified;
(B) the offer made by HSBC on behalf of the Offeror to the holders of the outstanding, vested and unvested, share options, each relating to ordinary shares of HK$0.10 each of NWCL (the ‘‘NWCL Optionholders’’), granted under the share option schemes adopted by NWCL on 26 November 2002 and 22 November 2011 respectively (the ‘‘NWCL Options’’), to cancel all the outstanding NWCL Options held by the NWCL Optionholders in accordance with Rule 13 of The Codes on Takeovers and Mergers of Hong Kong, at the price being the Share Offer Price minus the relevant exercise price of the NWCL Option (the ‘‘Option Offer Price’’) which is subject to and conditional upon the Share Offer becoming or being declared unconditional in all respects, as described in the Circular, (the ‘‘Option Offer’’), be and is hereby approved, confirmed and ratified; and

– 361 –

NOTICE OF EGM

(C) the directors of the Company (the ‘‘Directors’’), acting collectively and individually, be and are hereby authorised, for and on behalf of the Company, (i) to do all such acts and things and to sign, execute, seal (where required) and deliver all such documents and to take all such steps as the Directors in their discretion may consider necessary, appropriate, desirable or expedient to give effect to, to implement or otherwise in connection with or incidental to the Share Offer and the Option Offer and any and all of the transactions contemplated thereunder (including but not limited to the exercise of the right of compulsory acquisition pursuant to section 88 of the Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands to compulsorily acquire those NWCL Shares (other than those already held by the Offeror and the Company) not acquired by the Offeror under the Shares Offer), and (ii) to agree to such variation and amendment of the terms of the Share Offer and the Option Offer as are, in the opinion of the Directors, in the interest of the Company and its shareholders as a whole provided that the Share Offer Price shall not exceed HK$7.80 and the Option Offer Price shall not exceed the amount of HK$7.80 minus the relevant exercise price of the relevant NWCL Option.’’

By Order of the Board Wong Man-Hoi Company Secretary

Hong Kong, 29 February 2016

Notes:

Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies (who must be individuals) to attend and speak and, on a poll, vote instead of him at the meeting, and separate proxies may be appointed by a member to represent the respective number of shares held by him as specified in the relevant proxy form. A proxy need not be a member of the Company.
In order to be valid, the form of proxy, together with any power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, must be deposited at the Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof (as the case may be).
Delivery of an instrument appointing a proxy will not preclude such member of the Company from attending and voting in person at the above meeting or any adjournment thereof and, in such event, the instrument appointing a proxy will be deemed to be revoked.
In the case of joint holders of a share, any one of such joint holders may vote at the above meeting, either in person or by proxy, in respect of such share as if he/she/it were solely entitled thereto. If more than one of such joint holders are present at the above meeting, whether in person or by proxy, that one of such joint holders so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.
Voting on the above resolution will be taken by poll.
The translation into Chinese language of this notice is for reference only. In case of any inconsistency, the English version shall prevail.

– 362 –

NOTICE OF EGM

As at the date of this notice (a) the executive directors of the Company are Dr. Cheng Kar-Shun, Henry, Dr. Cheng Chi-Kong, Adrian, Mr. Chen Guanzhan, Ms. Ki Man-Fung, Leonie, Mr. Cheng Chi-Heng, Ms. Cheng Chi-Man, Sonia and Mr. Au Tak-Cheong; (b) the non-executive directors of the Company are Mr. Doo Wai-Hoi, William and Mr. Cheng Kar-Shing, Peter; and (c) the independent non-executive directors of the Company are Mr. Yeung PingLeung, Howard, Mr. Cha Mou-Sing, Payson (alternate director to Mr. Cha Mou-Sing, Payson: Mr. Cha Mou-Zing, Victor), Mr. Ho Hau-Hay, Hamilton, Mr. Lee Luen-Wai, John and Mr. Liang Cheung-Biu, Thomas.

– 363 –

AI assistant

Galaxy Entertainment Group Limited — Proxy Solicitation & Information Statement 2016

48883_rns_2016-02-26_d64dd3ff-1027-4467-8ffd-6cd377b1ad2e.pdf

(Stock Code: 0017)

MAJOR TRANSACTION IN RELATION TO VOLUNTARY CONDITIONAL CASH OFFERS TO ACQUIRE ALL THE OFFER SHARES AND TO CANCEL ALL THE OUTSTANDING NWCL OPTIONS IN RELATION TO NEW WORLD CHINA LAND LIMITED AND NOTICE OF EGM

Independent Financial Adviser to the Board and the Offeror Board

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

MAJOR TRANSACTION

IN RELATION TO VOLUNTARY CONDITIONAL CASH OFFERS TO ACQUIRE ALL THE OFFER SHARES AND

TO CANCEL ALL THE OUTSTANDING NWCL OPTIONS IN RELATION TO NEW WORLD CHINA LAND LIMITED

INTRODUCTION

THE OFFERS

Share Offer:

For cancellation of each NWCL Option . . . . . . . . . . . . . . the Option Offer Price in cash

Comparisons of value

Closing prices of NWCL Shares

Net asset value per NWCL Share

Value of the Offers

Confirmation of Financial Resources

Settlement of Consideration

CONDITIONS OF THE OFFERS

PUBLIC FLOAT

POSSIBLE COMPULSORY ACQUISITION AND WITHDRAWAL OF LISTING

SHAREHOLDING STRUCTURE OF NWCL AND THE OFFERS

LETTER FROM THE BOARD

Share Offer

LETTER FROM THE BOARD

Option Offer

Interests of the Offeror and the Offeror Concert Parties in NWCL Shares and NWCL Options

TAXATION AND INDEPENDENT ADVICE

FURTHER TERMS OF THE OFFERS

Acceptance of the Share Offer

Acceptance of the Option Offer

Hong Kong stamp duty

Close of the Offers

INTENTIONS OF THE COMPANY REGARDING THE NWCL GROUP

REASONS FOR, AND BENEFITS OF, THE OFFERS

For the Independent NWCL Shareholders

For NWCL

For the Company and the Shareholders

INFORMATION ON NWCL

INFORMATION ON THE OFFEROR AND THE COMPANY

COMPOSITE DOCUMENT

LISTING RULES IMPLICATION FOR THE COMPANY

Major Transaction

LETTER FROM THE BOARD

FINANCIAL EFFECTS OF THE OFFERS

EGM AND BOOK CLOSURE

LETTER FROM THE BOARD

RECOMMENDATION

ADDITIONAL INFORMATION

MAJOR TRANSACTION IN RELATION TO VOLUNTARY CONDITIONAL CASH OFFERS TO ACQUIRE ALL THE OFFER SHARES AND TO CANCEL ALL THE OUTSTANDING NWCL OPTIONS IN RELATION TO NEW WORLD CHINA LAND LIMITED

INTRODUCTION

BASIS OF OUR OPINION

PRINCIPAL TERMS OF THE OFFERS

The Offers

Conditions of the Offers

Possible compulsory acquisition and withdrawal of listing

MAJOR TRANSACTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of the Group

1.1 Business

(ii) Infrastructure and services

(iii) Department stores

(iv) Hotel operations

1.2 Historical financial performance

(i) Historical financial results of the Group

(ii) Historical financial position of the Group

2. Background of the NWCL Group

2.1 Business

2.2 Historical financial performance

(1) Revenue

(2) Gross profit and gross profit margin

(3) Net profit and net profit margin

(ii) Historical financial position of the NWCL Group

(1) Investment properties

(2) Properties held for/under development

Galaxy Entertainment Group Limited Proxy Solicitation & Information Statement 2016