Hopefluent Group Holdings Limited - Proxy Solicitation & Information Statement 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult a licensed securities dealer, a bank manager, solicitor, professional accountant or other professional adviser.

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

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

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(Incorporated in Bermuda with limited liability)

(Stock code: 372)

MAJOR TRANSACTION

POSSIBLE DISPOSALS OF SHARES IN

PYI CORPORATION LIMITED

Financial adviser

CORPORATE FINANCE, LIMITED

A notice convening a special general meeting of the holders of ordinary shares of ITC Corporation Limited to be held at Conference Room, 11th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong on Wednesday, 18 April 2007 at 11:00 a.m. is set out on pages 81 and 82 of this circular. There is a form of proxy for use at the special general meeting of ITC Corporation Limited accompanying this circular. If holders of ordinary shares of ITC Corporation Limited are not able to attend the meeting, they are requested to complete and return the accompanying form of proxy to the principal place of business of ITC Corporation Limited in Hong Kong at 30th Floor, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not preclude holders of ordinary shares from attending and voting in person at the meeting or any adjournment thereof should they so wish.

2 April 2007

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
The Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Reasons for the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Financial effect of the Disposal on ITC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Information on ITC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Information on PYI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I – Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix II – General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	67
Notice of SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	81
Accompanying document
– Form of proxy

DEFINITIONS

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

“Announcement” the announcement of the Company dated 12 March 2007 “associate(s)” the meaning ascribed thereto in the Listing Rules “Board” the board of Directors “Company” or “ITC” ITC Corporation Limited (stock code: 372), a company incorporated in Bermuda with limited liability and whose securities are listed on the main board of the Stock Exchange “Director(s)” the director(s) of the Company “Disposal” a disposal of PYI Shares in one or more transactions over a period of time which when aggregated may constitute a major transaction under the definition of the Listing Rules

“Group” the Company and its subsidiaries “Hanny” Hanny Holdings Limited (stock code: 275), an indirect non-wholly owned subsidiary of the Company and a company incorporated in Bermuda with limited liability and whose shares are listed on the main board of the Stock Exchange

“Hong Kong” Hong Kong Special Administrative Region of the PRC “Latest Practicable Date” 29 March 2007, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular

“Listing Rules”

The Rules Governing the Listing of Securities on the Stock Exchange

“Macau” Macau Special Administrative Region of the PRC “Model Code” Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules “Ordinary Share(s)” ordinary share(s) of HK$0.10 each in the share capital of ITC “Ordinary Shareholder(s)” the holder(s) of Ordinary Share(s) “PRC” the People’s Republic of China “PYI” PYI Corporation Limited (stock code: 498), a company incorporated in Bermuda with limited liability and whose shares are listed on the Main Board of the Stock Exchange

“Macau”
“Model Code”

PYI and its subsidiaries ordinary share(s) of HK$0.10 each in the share capital of PYI

“PYI Group”

“PYI Share(s)”

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“SFO”

the special general meeting of the Company to be convened on 18 April 2007 to consider and, if thought fit, approve the proposed Disposal by the Ordinary Shareholders

“SGM”

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“substantial shareholder”

a person who is entitled to exercise, or control the exercise of, 10% or more of the voting power of the total issued ordinary shares at any general meeting of the company

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“%” per cent.

LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock code: 372)

Executive Directors:

Dr. Chan Kwok Keung, Charles (Chairman) Ms. Chau Mei Wah, Rosanna (Deputy Chairman and Managing Director) Mr. Chan Kwok Chuen, Augustine Mr. Chan Fut Yan Mr. Cheung Hon Kit

Independent Non-executive Directors: Mr. Chuck, Winston Calptor Mr. Lee Kit Wah Hon. Shek Lai Him, Abraham, JP

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal place of business in Hong Kong: 30th Floor Bank of America Tower 12 Harcourt Road Central Hong Kong 2 April 2007

To the Ordinary Shareholders and, for information only, holders of the convertible redeemable preference shares of the Company

Dear Sir and Madam,

MAJOR TRANSACTION

POSSIBLE DISPOSALS OF SHARES IN

PYI CORPORATION LIMITED

INTRODUCTION

On 12 March 2007, ITC announced that the Directors intend to seek Ordinary Shareholders’ approval for the possible disposal of PYI Shares in one or more transactions within twelve months from the date of approval of the Disposal by Ordinary Shareholders provided that the percentage ratios applicable to all such disposals taken in aggregate will not exceed the upper limit of the major transaction percentage ratios under the Listing Rules. The minimum disposal price shall be equal to or exceed HK$3 per PYI Share (subject to adjustment in the event of a share consolidation or share subdivision by PYI).

THE DISPOSAL

The Directors intend to seek Ordinary Shareholders’ approval for the possible disposal of PYI Shares in one or more transactions during a period of twelve months from the date of approval of the Disposal by Ordinary Shareholders which if aggregated may constitute a major transaction. Under the Listing Rules, certain percentage ratios are used to determine the classification of transactions. Where any of such percentage ratios for a disposal is 25% or more but less than 75%, the Disposal will constitute a major transaction under the Listing Rules. Due to the fact that the percentage ratios under the Listing Rules are required to be based on the information available at the time of the transaction, the figures used in this circular (except the minimum disposal price) are for illustration purposes and should be used as a reference only. Given the market capitalisation of ITC around the time of the Announcement and the minimum disposal price of HK$3 per PYI Share, the maximum consideration is approximately HK$830 million representing up to approximately 276.6 million PYI Shares, which is approximately 18.54% of the issued share capital of PYI as at the Latest Practicable Date. Assuming that the implied maximum of approximately 276.6 million PYI Shares are sold, the ITC’s shareholding interest in PYI will decrease from approximately 26.97% to approximately 8.43% of

LETTER FROM THE BOARD

the issued share capital of PYI as at the Latest Practicable Date. The price of any disposal will be subject to a minimum price of HK$3 per PYI Share (subject to adjustment in the event of a share consolidation or share subdivision by PYI). The minimum price of HK$3 per PYI Share represents a 15.5% discount to the closing price of HK$3.55 as quoted on the Stock Exchange as at the Latest Practicable Date.

No contractual arrangements have been entered into by the Company in relation to the possible Disposal, as the Directors consider that the Company should first obtain the approval from the Ordinary Shareholders for the Disposal, so that the Disposal can be effected expeditiously when market conditions are favourable.

The proposed disposal of PYI Shares may be made on market, private placing or placing through placing agent(s) and in one or a series of transactions over a period of time. In the event that placing agreement(s) is/are entered into with placing agent(s) to dispose of PYI Shares under the Disposal mandate, the Company will disclose such placing agreement(s) through published announcement(s). Further, the Company may also make an additional announcement when: (i) the aggregate disposal of PYI Shares first exceeds the 25% major transaction threshold; (ii) upon expiration of the Disposal mandate; and (iii) if any disclosure obligation should arise under Rule 13.09 of the Listing Rules in relation to the proposed Disposal.

The Disposal for which advance Ordinary Shareholders’ approval is being sought will only be effected

if:

the minimum disposal price equals to or exceeds HK$3 per PYI Share (subject to adjustment in the event of a share consolidation or share subdivision by PYI);
all of the percentage ratios under the Listing Rules for the aggregated disposal of PYI Shares under the mandate granted by the Ordinary Shareholders to be below 75%;
all the PYI Shares to be disposed are disposed, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, to parties who are independent of the Company and any director, chief executive or substantial shareholder of any member of the Group or any associate of any of them or any connected persons (as defined by the Listing Rules) of the Company; and
the Disposal is completed within twelve months of the approval of Ordinary Shareholders being given, which the Directors consider to be a reasonable period to conduct such Disposal.

The minimum disposal price per PYI Share represents:

a premium of approximately 72.4% to the net asset value of HK$1.74 per PYI Share (which is calculated based on the unaudited net asset value of approximately HK$2,547.3 million as at 30 September 2006 divided by the number of PYI Shares outstanding as at 30 September 2006 of approximately 1,462.6 million PYI Shares, this information is obtained from the interim report of PYI for the six months ended 30 September 2006);
a price to earnings ratio of 13.2 times the basic earnings per PYI Share of HK$0.227 for the year ended 31 March 2006;
a discount of approximately 11.2% to the closing price of HK$3.38 per PYI Share as quoted on the Stock Exchange on 8 March 2007;
a discount of approximately 5.7% to the average closing price of HK$3.18 per PYI Share as quoted on the Stock Exchange for the last 30 trading days up to and including 8 March 2007;
equal to the average closing price of HK$3 per PYI Share as quoted on the Stock Exchange for the last 60 trading days up to and including 8 March 2007;
a premium of approximately 1.7% to the average closing price of HK$2.95 per PYI Share as quoted on the Stock Exchange for the last 90 trading days up to and including 8 March 2007;
a premium of approximately 7.5% to the average closing price of HK$2.79 per PYI Share as quoted on the Stock Exchange for the last 180 trading days up to and including 8 March 2007; and
a discount of approximately 15.5% to the closing price of HK$3.55 per PYI Share as quoted on the Stock Exchange as at the Latest Practicable Date.

LETTER FROM THE BOARD

REASONS FOR THE DISPOSAL

On 18 August 2004 and 10 November 2005, the Company announced disposals of its shareholding interests in PYI. These disposals have increased the public float and amount of institutional holding, and generally widened the shareholder base of PYI. Since the announcement of the Company dated 18 August 2004, the Company has seen its investment in PYI increase from HK$0.52 per PYI Share to HK$3.38 per PYI Share as at 8 March 2007. The proposed further Disposal of PYI Shares will enable the Company to realise a portion of its shareholding interest in PYI and diversify its investment base. It will also enable the Company to further increase the public float and widen the shareholder base of PYI. Although no acquisition or investment proposals are currently under negotiation, the proceeds after Disposal may provide the Company with additional resources to fund such acquisitions and investments when opportunities arise.

FINANCIAL EFFECT OF THE DISPOSAL ON ITC

Based on the market capitalisation of ITC around the time of the Announcement and the minimum disposal price of HK$3 per PYI Share, the Disposal will raise up to a maximum of approximately HK$830 million in cash, before expenses and tax, for ITC on completion. As at the Latest Practicable Date, there is no specific use for the proceeds other than to be used for general working capital.

According to the Group’s books and records at 30 September 2006, the carrying amount per PYI Share was approximately HK$1.87, resulting in an estimated profit on the Disposal of approximately HK$313 million, before expenses and tax, based on the minimum price of HK$3 per PYI Share and the implied maximum number of approximately 276.6 million PYI Shares. The Group shall discontinue the use of the equity method from the date that PYI ceases to be an associate of the Group and shall account for the investment in PYI in accordance with Hong Kong Accounting Standard 39 “ Financial Instruments: Recognition and Measurement”.

INFORMATION ON ITC

The Company is an investment holding company which directly and indirectly holds strategic investments in a number of listed companies. It directly holds investments, namely, Hanny, PYI, Trasy Gold Ex Limited and Burcon NutraScience Corporation. Through its listed non-wholly owned subsidiary, Hanny, and its listed associated company, PYI, the Group has indirect interests in Paul Y. Engineering Group Limited, Macau Prime Properties Holdings Limited, See Corporation Limited, Wing On Travel (Holdings) Limited, China Enterprises Limited, MRI Holdings Limited, PSC Corporation Limited, Intraco Limited and Tat Seng Packaging Group Limited. The principal activities of the Group comprise investment holding, the provision of finance, the provision of management services, property investment and trading, treasury investment, trading of building materials and machinery, holding of vessels for sand mining and the provision and operation of an internetbased precious metals trading platform.

INFORMATION ON PYI

The PYI Group is principally engaged in the business of development and investment in port and other infrastructure projects, land and property development and investment in association with port facilities, treasury investment and, through its subsidiary, Paul Y. Engineering Group Limited, construction and engineering, project management and facilities management.

The following is a summary of the audited consolidated results of PYI Group for the two years ended 31 March 2005 and 2006 respectively:

Profit before taxation Taxation Profit after taxation (before minority interests)	For the year ended 31 March 2006 2005 (restated) HK$’000 HK$’000 398,754 497,163 (52,804) 23,772 345,950 520,935	For the year ended 31 March 2006 2005 (restated) HK$’000 HK$’000 398,754 497,163 (52,804) 23,772 345,950 520,935
		520,935

LETTER FROM THE BOARD

SGM

The proposed Disposal will constitute a major transaction for the Company under the Listing Rules, for which Ordinary Shareholders’ approval is required. At present no Ordinary Shareholder is required to abstain from voting on the approval of the Disposal.

Upon approval by the Ordinary Shareholders of the proposed Disposal, the Company will closely monitor the Disposal to ensure that the aggregate disposals will not give rise to a very substantial disposal. If such an event should occur, the Company will either discontinue further disposals or adhere to any additional requirements under the Listing Rules, including seeking further approval by the Ordinary Shareholders, if required, before proceeding with further disposals of PYI Shares.

A notice convening the SGM to be held on Wednesday, 18 April 2007 at 11:00 a.m. at Conference Room, 11th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong for the purpose of considering and, if thought fit, approving, among other things, the Disposal is set out on pages 81 and 82 of this circular.

Whether or not the Ordinary Shareholders are able to attend the meeting, they are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the principal place of business of the Company in Hong Kong at 30th Floor, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude the Ordinary Shareholders from subsequently attending and voting in person at the SGM or any adjourned meeting thereof should they so wish.

RECOMMENDATION

The Board considers that the terms of the proposed Disposal are fair and reasonable and in the interests of the Company and its shareholders as a whole. The Board therefore recommends the Ordinary Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Disposal and matters ancillary thereto as set out in the notice of SGM.

ADDITIONAL INFORMATION

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

Yours faithfully For and on behalf of the Board ITC Corporation Limited Dr. Chan Kwok Keung, Charles Chairman

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. THREE YEAR FINANCIAL SUMMARY

The following is a summary of the audited consolidated results of the Group for each of the three years ended 31 March 2004, 2005 and 2006, and the audited assets and liabilities of the Group as at 31 March 2004, 31 March 2005, 31 March 2006 as extracted from the annual report of ITC for the year ended 31 March 2006, and the unaudited consolidated results of the Group for each of the six months ended 30 September 2005 and 2006 and the unaudited assets and liabilities of the Group as at 30 September 2006 as extracted from the interim report of ITC for the six months ended 30 September 2006.

Results

Turnover – Continuing operations – Discontinued operation Profit (loss) before income tax Income tax expense Profit for the year from discontinued operation Profit for the year/period Attributable to: Equity holders of the parent Minority interests	Year 2006 HK$’000 252,959 – 252,959 103,541 – – 103,541 107,394 (3,853) 103,541	ended 31 March 2005 2004 HK$’000 HK$’000 (Restated) (Restated) 104,361 100,590 1,921,967 3,334,076 2,026,328 3,434,666 (34,230) (278,990) (260) – 151,672 364,119 117,182 85,129 88,898 (16,166) 28,284 101,295 117,182 85,129	(Unaudited) Six months ended 30 September 2006 2005 HK$’000 HK$’000 (Restated) 358,174 42,771 – – 358,174 42,771 194,948 25,809 – – – – 194,948 25,809 195,753 27,456 (805) (1,647) 194,948 25,809

Assets and Liabilities

Total assets Total liabilities Shareholders’ funds Attributable to: Equity holders of the parent Minority interests	2006 HK$’000 2,460,700 (428,691) 2,032,009 2,009,945 22,064 2,032,009	As at 31 March 2005 HK$’000 (Restated) 2,176,978 (568,308) 1,608,670 1,579,011 29,659 1,608,670	(Unaudited) As at 30 September 2004 2006 HK$’000 HK$’000 (Restated) 5,337,404 2,593,126 (2,427,756) (464,991) 2,909,648 2,128,135 1,714,284 2,106,876 1,195,364 21,259 2,909,648 2,128,135

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2. AUDITED FINANCIAL STATEMENTS

The following is the audited consolidated income statement of the Group for each of the two years ended 31 March 2006 and the audited consolidated balance sheet of the Group as at 31 March 2005 and 2006 together with the relevant notes (“Financial Statements”), as extracted from the Company’s annual report for the year ended 31 March 2006. Terms defined herein apply to this section only.

CONSOLIDATED INCOME STATEMENT

For the year ended 31 March 2006

Notes Continuing operations Turnover 7 Cost of sales Gross profit Other income (expenses) 8 Administrative expenses Discount on acquisition released to income arising from acquisition of: – additional interest in a subsidiary – interest in a subsidiary Finance costs 9 Net investment expenses 10 Allowance for amounts due from associates and related companies Net loss on disposal and dilution of interests in subsidiaries and associates 11 Share of results of associates Profit (loss) before taxation Taxation 12 Profit (loss) for the year from continuing operations Discontinued operations Profit for the year from discontinued operations 13 Profit for the year 14 Attributable to: Equity holders of the parent Minority interests Dividend paid 16 Earnings per share 17 From continuing and discontinued operations: Basic Diluted	2006 HK$’000 252,959 (205,884) 47,075 1,260 (59,199) 2,578 – (28,012) – (3,064) (31,596) 174,499 103,541 – 103,541 – 103,541 107,394 (3,853) 103,541 30,755 HK cents 9.4 6.8	2005 HK$’000 (Restated) 104,361 (48,117) 56,244 (3,189) (64,612) – 20,938 (23,868) (8,182) (17,001) (141,028) 146,468 (34,230) (260) (34,490) 151,672 117,182 88,898 28,284 117,182 6,543 HK cents 10.8 5.7

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED BALANCE SHEET

At 31 March 2006

Notes Non-current assets Property, plant and equipment 18 Investment properties 19 Prepaid lease payments 20 Other intangible assets 21 Interests in associates 22 Available-for-sale investments 23 Current assets Inventories Debtors, deposits and prepayments 25 Margin account receivables 26 Prepaid lease payments 20 Amounts due from associates 27 Amounts due from related companies 28 Loans receivable 29 Investments in securities 24 Held for trading investments 30 Gold bullion Bank deposits 31 Bank balances and cash Current liabilities Creditors and accrued expenses 32 Margin account payables 26 Derivative financial instruments 33 Amounts due to associates 34 Convertible notes 35 Bank borrowings – due within one year 36 Other loans – due within one year 37 Net current assets (liabilities) Total assets less current liabilities Non-current liabilities Redeemable convertible preference shares 38 Bank borrowings – due after one year 36 Deferred tax liabilities 39 Net assets	2006 HK$’000 50,835 4,016 89,651 1,080 1,179,749 83,730 1,409,061 137 14,370 10,791 2,214 205,083 247,362 205,400 – 138,474 – 223,230 4,578 1,051,639 25,383 25,048 460 123 – 30,667 – 81,681 969,958 2,379,019 286,811 60,100 99 347,010 2,032,009	2005 HK$’000 (Restated) 40,760 3,525 91,865 1,840 1,912,286 – 2,050,276 115 4,587 25 2,214 8,538 1,632 23,231 5,025 – 65,303 12,814 3,218 126,702 20,306 – – 93 162,628 17,372 18,774 219,173 (92,471) 1,957,805 286,537 62,550 48 349,135 1,608,670

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes Capital and reserves Share capital 40 Reserves Equity attributable to equity holders of the parent Minority interests Total equity	2006 HK$’000 183,750 1,826,195 2,009,945 22,064 2,032,009	2005 HK$’000 (Restated) 107,201 1,471,810
		1,579,011 29,659
		1,608,670

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2006

				Attributable to equity holders of the parent	Attributable to equity holders of the parent	Attributable to equity holders of the parent	Attributable to equity holders of the parent	Attributable to equity holders of the parent					Minority interests HK$’000 1,195,365 (55,596)	Total HK$’000 2,548,547 305,504
Share capital HK$’000 92,227 –	Share premium HK$’000 209,889 60	Contributed surplus HK$’000 2,092,234 –	Capital redemption reserve HK$’000 908 –	Other reserve HK$’000 7,130 2,675	Property revaluation reserve HK$’000 3,414 –	Investment revaluation reserve HK$’000 – –	Translation reserve HK$’000 81,548 –	Goodwill reserve HK$’000 (49,067) 49,067	Convertible notes reserve HK$’000 – 9,393	Preference share reserve HK$’000 – –	Accumulated (losses) profits HK$’000 (1,085,101) 299,905	Total HK$’000 1,353,182 361,100
92,227	209,949	2,092,234	908	9,805	3,414	–	81,548	–	9,393	–	(785,196)	1,714,282	1,139,769	2,854,051
– – – –	– – – –	– – – –	– – – –	– (8,707) – –	– (3,074) 272 (48)	– – – –			– – – –	– – – –	– – – –	(16,055) (36,263) 272 (48)	(13,061) (353) – –	(29,116) (36,616) 272 (48)
–	–	–	–	(8,707)	(2,850)	–			–	–	–	(52,094)	(13,414)	(65,508)
– – –	– – –	– – –	– – –	– 173 (317)	– (340) –	– – –			– – –	– – –	88,898 – –	88,898 (5,934) (948)	28,284 (1,513,430) (4,439)	117,182 (1,519,364) (5,387)
–	–	–	–	(8,851)	(3,190)	–			–	–	88,898	29,922	(1,502,999)	(1,473,077)
(26,798) 41,667 105 – – –	(256,274) 85,837 (2) – – –	– – – – – (983,307)	– – – – – –	– – – – – –	– – – – – –	– – – – – –	– – – – – –	– – – – – –	– (4,056) – – – –	874 – (3) – – –	– – – (6,543) – 983,307	(282,198) 123,448 100 (6,543) – –	– – – – 392,889 –	(282,198) 123,448 100 (6,543 392,889 –
107,201 –	39,510 –	1,108,927 –	908 –	954 (228)	224 –	– 491	34,613 –	– –	5,337 –	871 –	280,466 30,715	1,579,011 30,978	29,659 –	1,608,670 30,978
107,201	39,510	1,108,927	908	726	224	491	34,613	–	5,337	871	311,181	1,609,989	29,659	1,639,648

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

				Attributable to equity holders of the parent	Attributable to equity holders of the parent	Attributable to equity holders of the parent	Attributable to equity holders of the parent	Attributable to equity holders of the parent					Minority interests HK$’000 – – – –` –	Total HK$’000 3,122 (4,821) 294 (51) 23,224
Share capital HK$’000 – – – – –	Share premium HK$’000 – – – – –	Contributed surplus HK$’000 – – – – –	Capital redemption reserve HK$’000 – – – – –	Other reserve HK$’000 – 4,090 – – –	Property revaluation reserve HK$’000 – – 294 (51) –	Investment revaluation reserve HK$’000 – (9,175) – – 23,224	Translation reserve HK$’000 3,122 264 – – –	Goodwill reserve HK$’000 – – – – –	Convertible notes reserve HK$’000 – – – – –	Preference share reserve HK$’000 – – – – –	Accumulated (losses) profits HK$’000 – – – – –	Total HK$’000 3,122 (4,821) 294 (51) 23,224
–	–	–	–	4,090	243	14,049	3,386	–	–	–	–	21,768	–	21,768
– –	– –	– –	– –	– (1,346)	– –	– 719			– –	– –	107,394 –	107,394 (12,935)	(3,853) –	103,541 (12,935)
–	–	–	–	2,744	243	14,768			–	–	107,394	116,227	(3,853)	112,374
54,834 275 21,440 – –	114,984 (275) 128,563 – –	– – – – –	– – – – –	– – – – –	– – – – –	– – – – –	– – – – –	– – – – –	(5,337) – – – –	– – – – –	– – – (30,755) –	164,481 – 150,003 (30,755) –	– – – – (3,742)	164,481 – 150,003 (30,755) (3,742)
183,750	282,782	1,108,927	908	3,470	467	15,259	25,691	–	–	871	387,820	2,009,945	22,064	2,032,009

The contributed surplus of the Group comprises the difference between the nominal amount of the ordinary shares capital issued by the Company in exchange for the nominal amount of the share capital of a subsidiary acquired pursuant to a corporate reorganisation on 24 January 1992 and the credits arising from the changes in the capital and reserves of the Company in other capital reorganisation and the transfers to the accumulated losses as approved by the board of directors from time to time.

The other reserve of the Group represents the difference between the nominal amount of the share capital and share premium of the subsidiaries of the associates of the Group at the date on which they were acquired by the associates of the Group and the nominal amount of the share capital issued as consideration for the acquisition.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 March 2006

OPERATING ACTIVITIES Profit for the year Adjustments for: Share of results of jointly controlled entities Share of results of associates Net loss on disposal and dilution of interests in subsidiaries and associates Allowance for amounts due from associates and related companies Allowance for debtors, deposits and prepayments Allowance for loans receivables Impairment loss on other intangible assets Impairment loss on investment securities Gain on disposal of investment properties Reverse of provision of option agreement Interest expenses Income tax expenses Discount on acquisition released to income arising from acquisition of – additional interest in subsidiaries – interest in subsidiaries Depreciation and amortisation of property, plant and equipment Release of prepaid lease payments (Gain) loss on disposal of property, plant and equipment Surplus arising from revaluation of land and buildings Increase in fair value of investment properties Net loss on disposal of listed other investments Net unrealised holding loss on listed other investments Decrease in fair value of held for trading investments Decrease in fair value of derivative financial instruments Gain on disposal of gold bullion Reverse of provision of guarantees in previous years Operating cash flows before movements in working capital Increase in property held for resale (Increase) decrease in inventories Decrease in amounts due from (to) customers for contract works, net of attributable interest expenses and depreciation and amortisation (Increase) decrease in debtors, deposits and prepayments Increase in margin account receivables Increase in amounts due from associates Decrease in amounts due from jointly controlled entities Increase in amounts due from related companies (Increase) decrease in loans receivable Net increase in held for trading investments Increase (decrease) in creditors and accrued expenses Increase in margin account payables Increase (decrease) in amounts due to associates Decrease in amounts due to related companies Cash (used in) generated from operations Dividends received from associates Dividends received from a jointly controlled entity Overseas tax paid Hong Kong Profits Tax refunded Hong Kong Profits Tax paid NET CASH FROM OPERATING ACTIVITIES	2006 HK$’000 103,541 – (174,499) 31,596 3,064 773 3,475 1,085 – – – 28,012 – (2,578) – 4,440 2,214 (295) (2,582) (335) – – 1,229 460 (7,075) – (7,475) – (22) – (10,556) (10,766) (27,662) – (9,677) (185,644) (134,678) 5,077 25,048 30 – (356,325) 498,555 – – – – 142,230	2005 HK$’000 (Restated) 117,182 (117) (257,267) 140,150 17,001 – – – 9,821 (1,129) (510) 23,935 16,405 – (20,938) 34,333 554 1,324 (230) – 1,574 7,328 – – – (5,483) 83,933 (41,000) 23 23,797 72,365 (25) (25,569) 664 (7,649) 48,286 – (41,258) – (94,161) (216) 19,190 66,206 4,000 (3,869) 484 (141) 85,870

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Notes INVESTING ACTIVITIES Proceeds from disposal of interests in associates Proceeds from disposal of gold bullion Proceeds from disposal of property, plant and equipment Amounts advanced to related companies Amounts advanced to associates Additions to available-for-sale investments Acquisition of additional interests in associates Additions to property, plant and equipment Acquisition of additional interests in subsidiaries Acquisition of other intangible assets Proceeds from disposal of investment properties Repayment from jointly controlled entities Proceeds from disposal of investments in securities Acquisition of subsidiaries, net of cash and cash equivalents acquired 42 Increase in prepaid lease payments Disposal of subsidiaries, net of cash and cash equivalents disposed 43 Additions to properties under development NET CASH USED IN INVESTING ACTIVITIES FINANCING ACTIVITIES Net proceeds from issue of shares Net increase (decrease) in bank overdrafts Dividends paid Interest paid Repayments of other loans Repayments of bank borrowings Loans from a minority shareholder of a subsidiary raised New bank loans raised Other loans raised Repayment of advances from minority shareholders of a subsidiary Repayment of advance from a jointly controlled entity NET CASH FROM FINANCING ACTIVITIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS BROUGHT FORWARD EFFECT OF FOREIGN EXCHANGE RATE CHANGES CASH AND CASH EQUIVALENTS CARRIED FORWARD ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS Bank deposits Bank balances and cash	2006 HK$’000 448,214 71,757 484 (239,000) (169,000) (60,506) (55,335) (10,967) (1,164) (325) – – – – – – – (15,842) 150,003 13,295 (30,755) (25,885) (18,774) (2,450) – – – – – 85,434 211,822 16,032 (46) 227,808 223,230 4,578 227,808	2005 HK$’000 (Restated) – – 1,064 (23,361) – – – (22,701) – – 61,129 2,000 1,337 (432,773) (94,633) (43,588) (28,363) (579,889) – (16,325) (6,543) (17,751) (17,317) (78,850) 341,000 75,000 18,774 (55,159) (34,818) 208,011 (286,008) 303,051 (1,011) 16,032 12,814 3,218 16,032

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 March 2006

1. GENERAL

The Company is an exempted company incorporated in Bermuda with limited liability. Its shares are listed on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”). The addresses of the registered office and the principal place of business of the Company are disclosed in the corporate information section of the annual report.

The financial statements are presented in Hong Kong dollars, which is the same as the functional currency of the Company.

The Company is an investment holding company. The principal activities of the Company’s principal subsidiaries and the Group’s principal associates are set out in notes 53 and 22 respectively.

2. APPLICATION OF NEW/REVISED HONG KONG FINANCIAL REPORTING STANDARDS

In the current year, the Group has applied, for the first time, a number of new Hong Kong Financial Reporting Standards (“HKFRSs”), Hong Kong Accounting Standards (“HKASs”) and Interpretations (hereinafter collectively referred to as “new HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) that are effective for accounting periods beginning on or after 1 January 2005. The application of the new HKFRSs has resulted in a change in the presentation of the consolidated income statement, consolidated balance sheet and consolidated statement of changes in equity. In particular, the presentation of minority interests and share of tax of associates have been changed. The changes in presentation have been applied retrospectively. The adoption of the new HKFRSs has resulted in changes to the Group’s accounting policies in the following areas that have an effect on how the results for the current and prior accounting periods are prepared and presented:

Business Combinations

In the current year, the Group has elected to apply HKFRS 3 “Business Combinations” retrospectively to goodwill existing at or acquired after, and to business combinations for which the agreement date is on or after 1 December 2002 as the Group acquired a significant subsidiary in December 2002. The principal effects of the application of HKFRS 3 to the Group are summarised below:

Goodwill

In previous periods, goodwill arising on acquisitions prior to 1 April 2001 was held in reserves, and goodwill arising on acquisitions on or after 1 April 2001 was capitalised and amortised over its estimated useful life. The Group has applied the relevant transitional provisions in HKFRS 3 retrospectively to goodwill existing at or acquired after, and to business combinations for which the agreement date is on or after 1 December 2002. Goodwill previously recognised in reserves has been transferred to the accumulated profits of the Group on 1 December 2002. With respect to goodwill previously capitalised on the balance sheet, the Group has discontinued amortising such goodwill from 1 December 2002 (the date on which the Group applied the HKFRS 3 with retrospective effect) onwards and goodwill will be tested for impairment at least annually. Goodwill arising on acquisitions on or after 1 December 2002 is measured at cost less accumulated impairment losses (if any) after initial recognition. As a result of this change in accounting policy, no amortisation of goodwill has been charged in the current year. Comparative figures have been restated (see note 3 for the financial impact).

Excess of the Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost (previously known as “negative goodwill”)

In accordance with HKFRS 3, any excess of the Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of acquisition (“discount on acquisition”) is recognised immediately in profit or loss in the period in which the acquisition takes place. In previous periods, negative goodwill arising on acquisitions prior to 1 April 2001 was held in reserves, and negative goodwill arising on acquisitions on or after 1 April 2001 was presented as a deduction from assets and released to income based on an analysis of the circumstances from which the balance resulted. In accordance with the relevant transitional provisions in HKFRS 3, the Group has derecognised all negative goodwill as at 1 December 2002 which was previously presented as a deduction from assets or hold in reserve, with a corresponding increase to accumulated profits.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Intangible Assets

In the current year, the Group has elected to apply HKAS 38 “Intangible Assets”, along with the application of HKFRS 3, retrospectively to intangible assets at or acquired after, and to intangible assets for which the agreement date is on or after 1 December 2002.

In previous years, intangible assets were amortised over their estimated useful lives. HKAS 38 requires intangible assets to be assessed at the individual asset level as having either finite or indefinite life. A finite-life intangible asset is amortised over its estimated useful life whereas an intangible asset with an indefinite useful life is carried at cost less accumulated impairment losses. Intangible assets with indefinite lives are not subject to amortisation but are tested for impairment annually or more frequently when there are indications of impairment. The retrospective application of HKAS 38 has had no material effect on how the results for the current or prior accounting years are prepared and presented.

Impairment of Assets

In the current year, the Group has elected to apply HKAS 36 “Impairment of Assets”, along with the application of HKFRS 3 and HKAS 38, retrospectively to goodwill and intangible assets acquired on or after 1 December 2002.

In previous years, the recoverable amount of an asset was to be measured whenever there is an indication of impairment. HKAS 36 requires the recoverable amount of an asset with an indefinite useful life and goodwill to be measured annually, irrespective of whether there is any indication that the asset may be impaired. The retrospective application of HKAS 36 has had no material effect on how the results for the current or prior accounting years are prepared and presented.

Financial Instruments

In the current year, the Group has applied HKAS 32 “Financial Instruments: Disclosure and Presentation” and HKAS 39 “Financial Instruments: Recognition and Measurement”. HKAS 32 requires retrospective application. The application of HKAS 39 generally does not permit to recognise, derecognise or measure financial assets and liabilities on a retrospective basis. The principal effects resulting from the implementation of HKAS 32 and HKAS 39 are summarised below:

Convertible notes and redeemable convertible preference shares

HKAS 32 requires an issuer of a compound financial instrument (that contains both financial liability and equity components) to separate the compound financial instrument into its liability and equity components on its initial recognition and to account for these components separately. In subsequent periods, the liability component is carried at amortised cost using the effective interest method. The principal impact of HKAS 32 on the Group is in relation to the convertible notes and the redeemable convertible preference shares issued by the Company that contain both liability and equity components. Previously, the convertible notes and the redeemable convertible preference shares were classified as liabilities and equity, respectively, on the balance sheet. Because HKAS 32 requires retrospective application, comparative figures have been restated. Comparative results for 2005 have been restated in order to reflect the increase in effective interest on the liability component (see note 3 for the financial impact).

Classification and measurement of financial assets and financial liabilities

The Group has applied the relevant transitional provisions in HKAS 39 with respect to classification and measurement of financial assets and financial liabilities that are within the scope of HKAS 39.

By 31 March 2005, the Group classified and measured its investments in equity securities in accordance with the benchmark treatment of Statement of Standard Accounting Practice 24 “Accounting for Investments in Securities” (“SSAP 24”). Under SSAP 24, investments in debt or equity securities are classified as “investment securities” or “other investments” as appropriate. “Investment securities” are carried at cost less impairment losses (if any) while “other investments” are measured at fair value, with unrealised gains or losses included in the profit or loss. From 1 April 2005 onwards, the Group classifies and measures its debt and equity securities in accordance with HKAS 39. Under HKAS 39, financial assets are classified as “financial assets at fair value through profit or loss” or “available-for-sale financial assets”. The classification depends on the purpose for which the assets are acquired. “Financial assets at fair value through profit or loss” and “available-for-sale financial assets” are carried at fair value, with changes in fair values recognised in profit or loss and equity, respectively.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

On 1 April 2005, the Group has classified and measured its investment in equity securities in accordance with the requirements of HKAS 39. The adoption of HKAS 39 has resulted in the reclassification of investments in securities for the Group to held for trading investments at 1 April 2005. In addition, the adoption of HKAS 39 by an associate of the Group has resulted in an increase in the Group’s interest in associates, a decrease in other reserve, an increase in investment revaluation reserve and an increase in accumulated profits as at 1 April 2005 (see note 3 for the financial impact).

Owner-occupied Leasehold Interest in Land

In previous periods, owner-occupied leasehold land and buildings were included in property, plant and equipment and measured using the revaluation model. In the current year, the Group has applied HKAS 17 “Leases”. Under HKAS 17, the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification, unless the lease payments cannot be allocated reliably between the land and buildings elements, in which case, the entire lease is generally treated as a finance lease. To the extent that the allocation of the lease payments between the land and buildings elements can be made reliably, the leasehold interests in land are reclassified to prepaid lease payments under operating leases, which are carried at cost and amortised over the lease terms on a straight-line basis. This change in accounting policy has been applied retrospectively (see note 3 for the financial impact).

Investment Properties

In the current year, the Group has, for the first time, applied HKAS 40 “Investment Property”. The Group has elected to use the fair value model to account for its investment properties which requires gains or losses arising from changes in the fair value of investment properties to be recognised directly in profit or loss for the year in which they arise. In previous years, investment properties under the predecessor standard (SSAP 13 “Accounting for Investment Properties”) were measured at open market values, with revaluation surplus or deficits credited or charged to investment property revaluation reserve unless the balance on this reserve was insufficient to cover a revaluation decrease, in which case the excess of the revaluation decrease over the balance on the investment property revaluation reserve was charged to the income statement. Where a decrease had previously been charged to the income statement and a revaluation surplus subsequently arose, that increase was credited to the income statement to the extent of the decrease previously charged. The Group has applied the relevant transitional provisions in HKAS 40 and elected to apply HKAS 40 retrospectively.

The adoption of HKAS 40 has resulted in a change of classification of certain properties which were previously exempted for classifying as investment properties according to SSAP 13. In previous year, property with 15% or less by area of value that was owned by the Group and leased out should normally not be regarded as an investment property. According to HKAS 40, if a portion of properties could be sold separately (or leased out separately under a finance lease), an entity accounts for the portion separately. In the current year, the Group applied HKAS 40 retrospectively and has reclassified certain such properties that could be sold separately (or leased out separately under a finance lease) from property, plant and equipment to investment properties. Comparative figures for 2005 have been restated (see note 3 for the financial impact).

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. SUMMARY OF THE EFFECTS OF THE CHANGES IN ACCOUNTING POLICIES

The effects of the changes in the accounting policies described above on the results for the current and prior years are as follows:

(i) On results

For the year ended 31 March 2006

HKAS 1 HKAS 38 HK$’000 HK$’000 Non-amortisation of goodwill – – Decrease in depreciation – – Increase in negative goodwill credited to income – – Decrease in revaluation surplus on land and building – – Increase in fair value of investment properties – – Increase in loss on disposal and dilution of interest in associates – – Increase in effective interest on the liability component of convertible notes – – Increase in effective interest on the liability component of redeemable convertible preference shares – – Decrease in income tax expense 36,020 – (Decrease) increase in share of results of associates (36,020) 1,178 Decrease in profit for the year and attributable to equity holders of the parent – 1,178 For the year ended 31 March 2005 HKAS 1 HK$’000 Decrease in depreciation – Decrease in negative goodwill credited to income – Decrease in surplus arising from land and building – Increase in loss on disposal and dilution of interest in associates – Increase in effective interest on the liability component of convertible notes – Increase in effective interest on the liability component of redeemable convertible preference shares – Decrease in income tax expense 41,383 Decrease in share of results of associates (41,383) Decrease in profit for the year and attributable to equity holders of the parent –	HKAS 32 HK$’000 – – – – – – (1,731) (10,952) – – (12,683) HKAS 32 HK$’000 – – – – (2,908) (4,439) – – (7,347)		HKAS 39 HKAS 40 HKFRS 2 HKFRS 3 Total effects HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 – – – 77 77 – 66 – – 66 – – – 15,285 15,285 – (401) – – (401) – 335 – – 335 – – – (84,141) (84,141) – – – – (1,731) – – – – (10,952) – – – – 36,020 49,079 – (1,520) 10,309 23,026 49,079 – (1,520) (58,470) (22,416) HKFRS 3 HKAS 40 HK-INT 2 Total effects HK$’000 HK$’000 HK$’000 HK$’000 – 62 – 62 (47,790) – – (47,790) – (62) – (62) (42,036) – – (42,036) – – – (2,908) – – – (4,439) – – – 41,383 – – (657) (42,040) (89,826) – (657) (97,830)	HKAS 39 HKAS 40 HKFRS 2 HKFRS 3 Total effects HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 – – – 77 77 – 66 – – 66 – – – 15,285 15,285 – (401) – – (401) – 335 – – 335 – – – (84,141) (84,141) – – – – (1,731) – – – – (10,952) – – – – 36,020 49,079 – (1,520) 10,309 23,026 49,079 – (1,520) (58,470) (22,416) HKFRS 3 HKAS 40 HK-INT 2 Total effects HK$’000 HK$’000 HK$’000 HK$’000 – 62 – 62 (47,790) – – (47,790) – (62) – (62) (42,036) – – (42,036) – – – (2,908) – – – (4,439) – – – 41,383 – – (657) (42,040) (89,826) – (657) (97,830)



				(97,830)

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(ii) On income statement line items

Decrease in other income Decrease in administrative expenses Increase in discount on acquisition released to income Increase in finance costs Increase in net loss on disposal and dilution of interests in subsidiaries and associates Increase (decrease) in share of results of associates Decrease in taxation Decrease in profit for the year and attributable to equity holders of the parent	2006 HK$’000 (66) 66 2,578 (12,683) (84,141) 35,810 36,020 (22,416)	2005 HK$’000 (27,192) 62 – (7,347) (42,036) (62,700) 41,383
		(97,830)

The cumulative effects of the application of the new HKFRSs on 31 March 2005 and 1 April 2005 are summarised below:

Balance sheet items Property, plant and equipment Investment properties Prepaid lease payments Interests in associates Investments in securities Held for trading investments Convertible notes Deferred tax liabilities Redeemable convertible preference shares Total effects on assets and liabilities Share capital Share premium Other reserve Investment revaluation reserve Property revaluation reserve Goodwill reserve Convertible notes reserve Preference share reserve Accumulated profits Total effects on equity	31.3.2005 HK$’000 (Originally stated) 151,785 – – 1,652,095 5,025 – (164,378) (2,396) – 1,642,131 133,896 293,220 (1,721) – 11,297 (44,851) – – 78,391 470,232 1,171,899	Effect of HKFRS 3 HK$’000 – – – 260,191 – – – – – 260,191 – – 2,675 – – 44,851 – – 212,665 260,191 –	Effect of HKAS 17 HK$’000 (107,500) – 94,079 – – – – 2,348 – (11,073) – – – – (11,073) – – – – (11,073) –	Effect of HKAS 32 HK$’000 – – – – – – 1,750 – (286,537) (284,787) (26,695) (253,710) – – – – 5,337 871 (10,590) (284,787) –	Effect of HKAS 40 HK$’000 (3,525) 3,525 – – – – – – – – – – – – – – – – – – –	31.3.2005 HK$’000 (Restated) 40,760 3,525 94,079 1,912,286 5,025 – (162,628) (48) (286,537) 1,606,462 107,201 39,510 954 – 224 – 5,337 871 280,466 434,563 1,171,899	Share of effect of Effect of HKAS 39 on HKAS 39 associates HK$’000 HK$’000 – – – – – – – 30,978 (5,025) – 5,025 – – – – – – – – 30,978 – – – – – (228) – 491 – – – – – – – – – 30,715 – 30,978 – –	1.4.2005 HK$’000 (Restated) 40,760 3,525 94,079 1,943,264 – 5,025 (162,628) (48) (286,537)
								1,637,440
								107,201 39,510 726 491 224 – 5,337 871 311,181
								465,541
								1,171,899

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The cumulative effects of the application of the new HKFRSs on 31 March 2004 are summarised below:

Balance sheet items Property, plant and equipment Investment properties Interests in associates Negative goodwill Convertible notes Total effects on assets and liabilities Share premium Other reserve Goodwill reserve Convertible notes reserve Accumulated losses Minority interests Total effects on equity Minority interests	31.3.2004 HK$’000 (Originally stated) 452,374 515,000 1,750,489 (314,540) (289,050) 2,114,273 209,889 7,130 (49,067) – (1,085,101) – (917,149) 1,195,365 1,836,057	Effect of HKFRS 3 HK$’000 – – 40,351 314,540 – 354,891 – 2,675 49,067 – 303,150 1,195,364 1,550,256 (1,195,365) –	Effect of HKAS 32 HK$’000 – – – – 6,210 6,210 60 – – 9,393 (3,243) – 6,210 – –	Effect of HKAS 40 HK$’000 (3,525) 3,525 – – – – – – – – – – – – –	31.3.2004 HK$’000 (Restated) 448,849 518,525 1,790,840 – (282,840) 2,475,374 209,949 9,805 – 9,393 (785,194) 1,195,364 639,317 – 1,836,057

The Group has not early applied the following new standards, amendments or interpretations that have been issued but are not yet effective. The directors of the Company anticipate that the application of these standards, amendments and interpretations will have no material impact on the financial statements of the Group except for HKAS 39 & HKFRS 4 (Amendments) “Financial Guarantee Contracts” which require all financial guarantee contracts to be initially measured at fair value. The directors consider that the impact resulting from this amendment cannot be reasonably estimated as at the balance sheet date:

HKAS 1 (Amendment) Capital disclosures[1] HKAS 19 (Amendment) Actuarial gains and losses, group plans and disclosures[2] HKAS 21 (Amendment) Net investment in a foreign operation[2] HKAS 39 (Amendment) Cash flow hedge accounting of forecast intragroup transactions[2] HKAS 39 (Amendment) The fair value option[2] HKAS 39 & HKFRS 4 (Amendments) Financial guarantee contracts[2] HKFRS 6 Exploration for and evaluation of mineral resources[2] HKFRS 7 Financial instruments: Disclosures[1] HK(IFRIC) – INT 4 Determining whether an arrangement contains a lease[2] HK(IFRIC) – INT 5 Rights to interests arising from decommissioning, restoration and environmental rehabilitation funds[2] HK(IFRIC) – INT 6 Liabilities arising from participating in a specific market – waste electrical and electronic equipment[3] HK(IFRIC) – INT 7 Applying the restatement approach under HKAS 29 Financial Reporting in Hyperinflationary Economies[4] HK(IFRIC) – INT 8 Scope of HKFRS 2[5] HK(IFRIC) – INT 9 Reassessment of embedded derivatives[6]

1 Effective for annual periods beginning on or after 1 January 2007.

2 Effective for annual periods beginning on or after 1 January 2006.

3 Effective for annual periods beginning on or after 1 December 2005.

4 Effective for annual periods beginning on or after 1 March 2006.

5 Effective for annual periods beginning on or after 1 May 2006.

6 Effective for annual periods beginning on or after 1 June 2006.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared under the historical cost basis except for certain properties and financial instruments, which are measured at revalued amounts or fair values, as explained in the accounting policies set out below.

The consolidated financial statements have been prepared in accordance with new HKFRSs issued by the HKICPA. In addition, the consolidated financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange and by the Hong Kong Companies Ordinance.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Minority interests in the net assets of consolidated subsidiaries are presented separately from the Group’s equity therein. Minority interests in the net assets consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

Business combinations achieved in stages

For business combination that involves more than one exchange transaction through successive share purchases, the cost of the transaction and fair value information at the date of each exchange transaction are treated separately to determine the amount of any goodwill associated with that transaction. Any adjustments to those fair values relating to previously held interests is accounted for as increase in revaluation reserve.

Property, plant and equipment

Property, plant and equipment, other than construction in progress, are stated at cost or fair value less subsequent accumulated depreciation and amortisation and accumulated impairment losses.

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at their revalued amount, being the fair value at the date of revaluation less any subsequent accumulated depreciation and amortisation and any subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date.

Any revaluation increase arising on revaluation of land and buildings is credited to the property revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense, in which case the increase is credited to the income statement to the extent of the decrease previously charged. A decrease in net carrying amount arising on revaluation of an asset is dealt with as an expense to the extent that it exceeds the balance, if any, on the property revaluation reserve relating to a previous revaluation of the same asset. On the subsequent sale or retirement of a revalued asset, the attributable revaluation surplus is transferred to accumulated profits.

No depreciation is provided in respect of freehold land.

Depreciation is provided to write off the cost or fair value of items of property, plant and equipment, other than construction in progress, over their estimated useful lives and after taking into account their estimated residual value, using the straight-line method.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the year in which the item is derecognised.

Construction in progress is stated at cost which includes all development expenditure and the direct costs attributable to such projects. Construction in progress is not depreciated or amortised until completion of construction and the asset is available for use. The cost of completed construction works is transferred to the appropriate categories of property, plant and equipment.

Investment properties

On initial recognition, investment properties are measured at cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured using the fair value model. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use or no future economic benefits are expected from its disposals. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year in which the item is derecognised.

Interests in associates

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Group’s share of the profit or loss and of changes in equity of the associate, less any identified impairment loss. When the Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognising its share of further losses. An additional share of losses is provided for and a liability is recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of that associate.

Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

Other intangible assets

On initial recognition, other intangible assets acquired separately other than from business combinations are recognised at cost. After initial recognition, other intangible assets with indefinite useful lives are carried at cost less any identified impairment loss.

Gains or losses arising from derecognition of an intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised.

Other intangible assets with indefinite useful lives are tested for impairment annually by comparing their carrying amounts with their recoverable amounts, irrespective of whether there is any indication that they may be impaired. If the recoverable amount of other intangible assets is estimated to be less than its carrying amount, the carrying amount of the other intangible assets is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

When an impairment loss subsequently reverses, the carrying amount of other intangible assets is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for that other intangible assets in prior years. A reversal of an impairment loss is recognised as income immediately.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Financial instruments

Financial assets and financial liabilities are recognised on the balance sheet when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

The Group’s financial assets are classified into one of the four categories, including financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. The accounting policies adopted in respect of each category of financial assets are set out below.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss has two subcategories, including financial assets held for trading and those designated at fair value through profit or loss on initial recognition. At each balance sheet date subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value, with changes in fair value recognised directly in profit or loss in the period in which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. At each balance sheet date subsequent to initial recognition, loans and receivables (including debtors, deposits and prepayments, margin account receivables, loans receivable, bank deposits, bank balances, amounts due from associates and amounts due from related companies) are carried at amortised cost using the effective interest method, less any identified impairment losses. An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated or not classified as any of the other categories (set out above). At each balance sheet date subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Changes in fair value are recognised in equity, until the financial asset is disposed of or is determined to be impaired, at which time, the cumulative gain or loss previously recognised in equity is removed from equity and recognised in profit or loss. Impairment losses on available-for-sale financial assets are recognised in profit or loss. Impairment losses on available-for-sale equity investments will not be reversed in subsequent periods. For available-for-sale debt investments, impairment losses are subsequently reversed if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

Financial liabilities and equity

Financial liabilities and equity instruments issued by a group entity are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the group entity after deducting all of its liabilities. The Group’s financial liabilities are generally classified into financial liabilities at fair value through profit or loss and other financial liabilities. The accounting policies adopted in respect of financial liabilities and equity instruments are set out below.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Other financial liabilities

Other financial liabilities, including bank borrowings, creditors, margin account payables, amounts due to associates and other loans, are subsequently measured at amortised cost, using the effective interest method.

Convertible notes and redeemable convertible preference shares

Convertible notes and redeemable convertible preference shares issued by the Company that contain both financial liability and equity components are classified separately into respective liability and equity components on initial recognition. On initial recognition, the fair value of the liability component is determined using the prevailing market interest of similar non-convertible debts. The difference between the proceeds of the issue of the convertible notes/redeemable convertible preference shares and the fair value assigned to the liability component, representing the embedded call option for the holder to convert the notes into equity, is included in equity (convertible notes reserve/preference share reserve).

In subsequent periods, the liability component of the convertible notes and redeemable convertible preference shares is carried at amortised cost using the effective interest method. The equity component, represented by the option to convert the liability component into ordinary shares of the Company, will remain in convertible notes reserve/preference share reserve until the embedded option is exercised (in which case the balance stated in convertible notes reserve/preference share reserve will be transferred to share premium). Where the option remains unexercised at the expiry date, the balance stated in convertible notes reserve/preference share reserve will be released to accumulated profits. No gain or loss is recognised in profit or loss upon conversion or expiration of the option.

Transaction costs that relate to the issue of the convertible notes/redeemable convertible preference shares are allocated to the liability and equity components in proportion to the allocation of the proceeds. Transaction costs relating to the equity component are charged directly to equity. Transaction costs relating to the liability component are included in the carrying amount of the liability portion and amortised over the period of the convertible notes/ redeemable convertible preference shares using the effective interest method.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Derivative financial instruments

Derivatives that do not qualify for hedge accounting are deemed as financial assets held for trading or financial liabilities held for trading. Changes in fair values of such derivatives are recognised directly in profit or loss.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Group has transferred substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received and the cumulative gain or loss that had been recognised directly in equity is recognised in profit or loss.

For financial liabilities, they are removed from the Group’s balance sheet (i.e. when the obligation specified in the relevant contract is discharged, cancelled or expires). The difference between the carrying amount of the financial liability derecognised and the consideration received or receivable is recognised in profit or loss.

Gold bullion

Gold bullion is stated at the gold price prevailing at the close of business at the balance sheet date. Differences arising from changes in gold prices are dealt with in the profit or loss.

Inventories

Inventories represent finished goods which are stated at the lower of cost and net realisable value. Cost is calculated using first-in, first-out method.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Impairment

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Revenue recognition

Revenue is measured at fair value of the consideration received or receivable and represents amount receivable for goods and services provided in the normal course of business, net of discounts and sales related taxes.

Sales of goods are recognised when goods are delivered and title has passed.

Service revenue is recognised when services are rendered.

Sales of securities are recognised when the sale agreement becomes unconditional.

Dividend income from investments is recognised when the Group’s right to receive payment has been established.

Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that discounts the estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Rental income under operating leases is recognised on a straight-line basis over the terms of the relevant leases.

Where the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively with reference to the stage of completion of the contract activity at the balance sheet date, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as an expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Transaction fees income is recognised when transaction fees derived from the provision of an interest-based electronic trading system are recognised when a transaction is duly executed on a trade date basis.

Precious metals contract trading is recognised as income or debt to income when the contract is closed.

Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in its functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in profit or loss in the period in which they arise. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity, in which cases, the exchange differences are also recognised directly in equity.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into the presentation currency of the Company (i.e. Hong Kong dollars) at the rate of exchange prevailing at the balance sheet date, and their income and expenses are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognised as a separate component of equity (the translation reserve). Such exchange differences are recognised in profit or loss in the period in which the foreign operation is disposed of.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax base used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Retirement benefit costs

Payments to defined contribution retirement benefit schemes are charged as an expense or capitalised in contracts in progress, where appropriate, as they fall due.

Borrowing costs

All borrowing costs are recognised as and included in finance costs in the income statement in the period which they are incurred.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessor

Rental income from operating leases is recognised in the income statement on a straight-line basis over the terms of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense on a straight-line basis over the lease terms.

The Group as lessee

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the terms of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are recognised as a reduction of rental expense over the lease terms on a straight-line basis.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. KEY SOURCES OF ESTIMATION UNCERTAINTY

In the process of applying the Group’s accounting policies which are described in note 4, management has made the following estimation uncertainty at the balance sheet date, that have a most significant risk of causing a material adjustment to the carrying amount of assets/liabilities within the next year as discussed below.

Impairment loss on trade debtors and loans receivable

The management regularly reviews the recoverability and/or age of the trade debtors and loans receivable. Appropriate impairment for estimated irrecoverable amounts are recognised in profit and loss when there is objective evidence that the asset is impaired.

In determining whether impairment for bad and doubtful debts is required, the Group takes into consideration the age status and likelihood of collection. Specific allowance is only made for receivables that are unlikely to be collected and is recognised on the difference between the estimated future cash flow expected to receive discounted using the original effective interest rate and its carrying value.

6. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s major financial instruments include bank balances, bank deposits, borrowings, loans receivable, amounts due from and to associates and related companies, available-for-sale investments, held for trading investments, redeemable convertible preference shares, margin account receivable/payables, trade debtors and trade creditors. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Currency risk

Regarding the overseas operations and certain held for trading investments in foreign currencies (other than US Dollars), the Group has been matching assets with borrowings in the same currency. Certain held for trading investments are denominated in United States Dollars. Since United States Dollars is linked to Hong Kong Dollars, the Group does not expect any significant movements in USD/HKD exchange rate. Management has closely monitored foreign exchange exposure to mitigate the foreign currency risk.

Credit risk

The Group’s maximum exposure to credit risk in the event of the counterparties failure to perform their obligations as at 31 March 2006 in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the consolidated balance sheet. In order to minimise the credit risk, management of the Group has determined credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade and loan debtor at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group’s credit risk is significantly reduced. The Group has significant concentration of credit risk on loan receivables and amounts due from related companies and associates, amounting to approximately HK$195 million, HK$247 million and HK$169 million, respectively. As they have a strong financial position with good repayment record in the past, the directors of the Company consider that the Group’s credit risk is minimal.

Cash flow interest rate risk

All bank deposits, amount due from associates, amount due from related companies, loans receivable and borrowings of the Group are arranged at floating rates (except preference shares). The management has employed a treasury team to closely monitor interest rate movement and manage the potential risk.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

7. TURNOVER AND SEGMENTAL INFORMATION

Turnover represents the amounts received and receivable from outside customers for the year and is analysed as follows:

Continuing operations: Interest income Trading of listed securities Property investment Trading of building materials and machinery Others Discontinued operations: Building construction Civil engineering Specialist works Trading of construction materials	2006 HK$’000 32,409 210,765 674 4,234 4,877 252,959 – – – – – 252,959	2005 HK$’000 26,592 44,676 24,806 5,276 3,011
		104,361
		1,424,932 272,972 223,239 824
		1,921,967
		2,026,328

Business segments

For management purposes, the Group’s operations are currently organised into four operating divisions namely finance, investment (including treasury investment), property investment and trading of building materials and machinery. These divisions are the basis on which the Group reports its primary segment information.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Business segment information for the year ended 31 March 2006 is presented below:

		Continuing operations	Continuing operations	Continuing operations					Discontinued operations	Discontinued operations	Discontinued operations			Consolidated HK$’000 252,959 –
Finance HK$’000 32,409 4,233	Investment HK$’000 210,765 –	Property investment HK$’000 674 5,075	Trading of building materials and machinery HK$’000 4,234 –	Unallocated HK$’000 4,877 –	Eliminations HK$’000 – (9,308)	Sub-total HK$’000 252,959 –	Building construction HK$’000 – –	Civil engineering HK$’000 – –	Specialist works HK$’000 – –	Trading of construction materials HK$’000 – –	Unallocated HK$’000 – –	Eliminations HK$’000 – –	Sub-total HK$’000 – –
36,642	210,765	5,749	4,234	4,877	(9,308)	252,959	–	–	–	–	–	–	–	252,959

8,886	5,671	1,967	163	(513)	–	16,174 (27,038) 2,578 (3,064) (31,596) 174,499 (28,012)	–	–	–	–	– – – – – – –	– – – – – – –	– – – – – – –	16,174 (27,038) 2,578 (3,064) (31,596) 174,499 (28,012)

– – – – – –	– – – – – –	– – – – – –	– – – – – –	(27,038) 2,578 (3,064) (31,596) 174,499 (28,012)	– – – – – –		– – – – – –	– – – – – –	– – – – – –	– – – – – –
						103,541 –							– –	103,541 –
						103,541							–	103,541

Inter-segment sales are charged at prevailing market rate or, where no market rate was available, at terms determined and agreed by both parties.

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

		Continuing operations	Continuing operations	Continuing operations				Discontinued operations	Discontinued operations	Discontinued operations
				Trading of
					building					Trading of
			Property	materials and			Building	Civil	Specialist	Construction
	Finance	Investment	investment	machinery		Unallocated	construction	engineering	works	materials	Unallocated	Consolidated
	HK$’000	HK$’000	HK$’000		HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
BALANCE SHEET
ASSETS
Segment assets	657,838	455,985	31,595		825	715	–	–	–	–	–	1,146,958
Interests in associates	–	–	–		–	1,179,749	–	–	–	–	–	1,179,749
Unallocated corporate assets	–	–	–		–	133,993	–	–	–	–	–	133,993
Total assets												2,460,700
LIABILITIES
Segment liabilities	–	17,561	48		477	870	–	–	–	–	–	18,956
Unallocated corporate liabilities	–	–	–		–	409,735	–	–	–	–	–	409,735
Total liabilities												428,691
OTHER INFORMATION
Capital additions	–	–	–		3	10,964	–	–	–	–	–	10,967
Depreciation and amortisation
of property, plant and
equipment	–	–	231		–	4,209	–	–	–	–	–	4,440
Release of prepaid lease
payments	–	–	–		–	2,214	–	–	–	–	–	2,214
Gain on disposal of property,
plant and equipment	–	–	–		–	295	–	–	–	–	–	295

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Business segment information for the year ended 31 March 2005 (Restated) is presented below:

		Continuing operations	Continuing operations	Continuing operations					Discontinued operations	Discontinued operations	Discontinued operations			Consolidated HK$’000 2,026,328 –
Finance HK$’000 26,592 955	Investment HK$’000 44,676 –	Property investment HK$’000 24,806 1,783	Trading of building materials and machinery HK$’000 5,276 29	Unallocated HK$’000 3,011 150	Eliminations HK$’000 – (2,917)	Sub-total HK$’000 104,361 –	Building construction HK$’000 1,424,932 –	Civil engineering HK$’000 272,972 –	Specialist works HK$’000 223,239 98,977	Trading of Construction materials HK$’000 824 33,150	Unallocated HK$’000 – –	Eliminations HK$’000 – (132,127)	Sub-total HK$’000 1,921,967 –
27,547	44,676	26,589	5,305	3,161	(2,917)	104,361	1,424,932	272,972	322,216	33,974	–	(132,127)	1,921,967	2,026,328

12,819	(8,316)	21,006	224	(622)	–	25,111 (36,668) 20,938 (8,182) (17,001) (141,028) – 146,468 – (23,868)	41,812	7,841	6,413	24	–	–	56,090 – – – – 878 95,722 15,077 117 (67)	81,201 (36,668) 20,938 (8,182) (17,001) (140,150) 95,722 161,545 117 (23,935)

– – – – – – – – – –	– – (9,821) – – – – – – –	– – 1,129 – – – – – – (287)	– – – – – – – – – –	(36,668) 20,938 510 (17,001) (141,028) – 146,468 – (23,868) 27	– – – – – – – – – –				– – – – – – – – – –	– – – – – – 198 – – 38	– – – – 878 95,722 – – (67) (11,177)	– – – – – – – – – –
						(34,230) (260)							167,817 (16,145)	133,587 (16,405)
						(34,490)							151,672	117,182

Inter-segment sales are charged at prevailing market rate or, where no market rate was available, at terms determined and agreed by both parties.

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Continuing operations Discontinued operations Trading of building Trading of Property materials and Building Civil Specialist Construction Finance Investment investment machinery Unallocated construction engineering works materials Unallocated HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 BALANCE SHEET ASSETS Segment assets 23,780 108,000 11,106 953 1,306 – – – – – Interests in associates – – – – 1,912,286 – – – – – Unallocated corporate assets – – – – 119,547 – – – – – Total assets LIABILITIES Segment liabilities 10 7,388 46 856 1,569 – – – – – Unallocated corporate liabilities – – – – 558,439 – – – – – Total liabilities OTHER INFORMATION Capital additions – – – – 113,659 2,356 – – – 1,890 Depreciation and amortisation of property, plant and equipment – – 218 – 14,525 8,247 1,262 7,601 3,414 – Release of prepaid lease payments – – – – 554 – – – – – Impairment loss on investment securities – 9,821 – – – – – – – – Loss on disposal of property, plant and equipment – – – – 1,324 – – – – –	Discontinued operations	Consolidated HK$’000 145,145 1,912,286 119,547
		2,176,978
		9,869 558,439
		568,308
		117,905 35,267 554 9,821 1,324

Geographical segments

Over 90% of the turnover of the Group was to the customers in Hong Kong; accordingly, no geographical analysis of turnover was presented.

The following is an analysis of the carrying amount of segment assets and capital additions, analysed by the geographical area in which the assets are located:

Hong Kong The People’s Republic of China (the “PRC”) Others	Carrying amount of segment assets 2006 2005 HK$’000 HK$’000 (Restated) 1,252,246 239,395 2 2 28,703 25,295 1,280,951 264,692	Capital additions 2006 2005 HK$’000 HK$’000 10,874 117,879 – – 93 26 10,967 117,905	Capital additions 2006 2005 HK$’000 HK$’000 10,874 117,879 – – 93 26 10,967 117,905
			117,905

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

8. OTHER INCOME (EXPENSES)

Surplus arising from revaluation of land and buildings
Increase in fair value of investment properties
Net loss on disposal of listed other investments
Net unrealised holding loss on listed other investments
Decrease in fair value of held for trading investments
Gain on disposal of gold bullion
Loss on gold trading contract
Increase in fair value of gold trading contract
Decrease in fair value of derivative financial instruments
Reversal of provision of guarantees in previous years

Continuing operations
and consolidated
2006
2005
HK$’000
HK$’000
(Restated)
2,582
230
335
–
–
(1,574)
–
(7,328)
(1,229)
–
7,075
–
(7,326)
–
283
–
(460)
–
–
5,483
1,260
(3,189)

9. FINANCE COSTS

Continuing operations 2006 2005 HK$’000 HK$’000 (Restated) Interest payable on: Bank borrowings wholly repayable within five years 834 4,058 Bank borrowings not wholly repayable within five years 2,482 180 Convertible notes 11,938 16,738 Redeemable convertible preference shares 10,952 4,439 Other borrowings wholly repayable within five years 1,406 60 Overprovision of previous year – (1,607) Interest on margin account payables 400 – 28,012 23,868	Discontinued operations 2006 2005 HK$’000 HK$’000 (Restated) – 67 – – – – – – – – – – – – – 67	Consolidated 2006 2005 HK$’000 HK$’000 (Restated) 834 4,125 2,482 180 11,938 16,738 10,952 4,439 1,406 60 – (1,607) 400 – 28,012 23,935

10. NET INVESTMENT EXPENSES

Impairment loss on investment securities Gain on disposal of investment properties Reverse of provision of settlement of option agreement	Continuing operations and consolidated 2006 2005 HK$’000 HK$’000 (Restated) – (9,821) – 1,129 – 510 – (8,182)

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

11. NET (LOSS) GAIN ON DISPOSAL AND DILUTION OF INTERESTS IN SUBSIDIARIES AND ASSOCIATES

Loss on disposal and dilution of interests in subsidiaries Loss on disposal of interests in associates Gain on dilution of interests in associates Loss on dilution of interests in associates	Continuing operations 2006 2005 HK$’000 HK$’000 (Restated) – (78,076) (20,073) – 76 130 (11,599) (63,082) (31,596) (141,028)	Discontinued operations 2006 2005 HK$’000 HK$’000 (Restated) – – – – – 878 – – – 878	Consolidated 2006 2005 HK$’000 HK$’000 (Restated) – (78,076) (20,073) – 76 1,008 (11,599) (63,082) (31,596) (140,150)	Consolidated 2006 2005 HK$’000 HK$’000 (Restated) – (78,076) (20,073) – 76 1,008 (11,599) (63,082) (31,596) (140,150)
				(140,150)

12. TAXATION

Hong Kong Profits Tax Current year Underprovision in previous years Overseas taxation Deferred tax_(note 39)_ Charge for the year Taxation attributable to the Company and its subsidiaries	Continuing operations 2006 2005 HK$’000 HK$’000 (Restated) – – – – – – – – – – – 260 – 260	Discontinued operations 2006 2005 HK$’000 HK$’000 (Restated) – – – 21 – 21 – 3,995 – 4,016 – 12,129 – 16,145	Consolidated 2006 2005 HK$’000 HK$’000 (Restated) – – – 21 – 21 – 3,995 – 4,016 – 12,389 – 16,405	Consolidated 2006 2005 HK$’000 HK$’000 (Restated) – – – 21 – 21 – 3,995 – 4,016 – 12,389 – 16,405
				21 3,995
				4,016 12,389
				16,405

For 2006, no provision for Hong Kong Profits Tax has been made in the financial statements as the Group had no assessable profit for the year.

For 2005, Hong Kong Profits Tax is calculated at the rate of 17.5% of the estimated assessable profit for the year.

Overseas taxation is calculated at the rates prevailing in the respective jurisdictions.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The tax charge for the year can be reconciled to the profit (loss) per the income statement as follows:

Profit (loss) before taxation Continuing operations Discontinued operations Tax at Hong Kong Profits Tax rate of 17.5% Tax effect of expenses not deductible for tax purposes Tax effect of income not taxable for tax purposes Tax effect of utilisation of deductible temporary differences previously not recognised Tax effect of tax losses not recognised Tax effect of share of results of associates and jointly controlled entities Underprovision in previous years Tax charge for the year	2006 HK$’000 103,541 – 103,541 18,120 11,891 (2,153) (40) 2,720 (30,538) – –	2005 HK$’000 (Restated) (34,230) 167,817 133,587 23,378 15,843 (5,610) (27) 8,432 (25,632) 21 16,405

Details of the deferred tax are set out in note 39.

13. DISCONTINUED OPERATIONS

On 20 October 2004, the Group disposed of 5.73% of equity interest in its then 55.06% owned subsidiary PYI Corporation Limited (“PYI”), which, on completion of the disposal, became an associate of the Group.

The Group’s operations in building construction, civil engineering, specialist works and construction materials are solely attributable to PYI and its subsidiaries (“PYI Group”) and they have been discontinued after the disposal of the shares in PYI.

Other than these operations, PYI Group and the Group also operate in investment, finance and property investment. These operations are still be carried on by the Group subsequent to the disposal of shares in PYI. Accordingly, these operations are disclosed as continuing operations in note 7.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The results of the discontinued operations for the period from 1 April 2004 to 20 October 2004, which have been included in the consolidated income statement, were as follows:

Turnover Building construction Civil engineering Specialist works Construction materials Cost of sales Gross profit Administrative expenses Finance costs Net gain on disposal and dilution of interests in subsidiaries and associates Share of results of associates Share of results of jointly controlled entities Profit before taxation Taxation Profit after taxation	2005 HK$’000 (Restated) 1,424,932 272,972 223,239 824 1,921,967 (1,821,422) 100,545 (44,455) (67) 878 110,799 117 167,817 (16,145) 151,672

The carrying amounts of the assets and liabilities of the discontinued operations as at the date of disposal, were as follows:

On the date of disposal	On the date of disposal
	HK$’000
Total assets	2,319,995
Total liabilities	1,551,598

The cash flows of the discontinued operations for the year ended 31 March 2005 were as follows:
	HK$’000
Net cash from operating activities	45,794
Net cash used in investing activities	(454,097)
Net cash from financing activities	301,280

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

14. PROFIT FOR THE YEAR

	Continuing	Continuing	Discontinued	Discontinued
	operations		operations			Consolidated
	2006	2005	2006		2005	2006	2005
	HK$’000	HK$’000	HK$’000	HK$’000		HK$’000	HK$’000
		(Restated)		(Restated)			(Restated)
Profit for the year has been
arrived at after charging:
Auditors’ remuneration	1,665	1,255	–		606	1,665	1,861
Cost of inventories recognised
as expenses	2,497	3,436	–		–	2,497	3,436
Release of prepaid lease
payments	2,214	554	–		–	2,214	554
Depreciation and amortisation
of property, plant and
equipment_(note (a) below)_	4,440	14,734	–	19,599		4,440	34,333
Impairment loss on other
intangible assets	1,085	–	–		–	1,085	–
Loss on disposal of property,
plant and equipment	–	364	–		960	–	1,324
Minimum lease payments under
operating leases in respect of:
Premises	1,416	781	–		1,767	1,416	2,548
Plant and machinery	–	–	–		473	–	473
Staff costs, including directors’
emoluments_(note (b) below)_	27,890	34,165	–	34,867		27,890	69,032
Share of tax of associates
(included in share of results
of associates)	36,020	11,368	–	30,015		36,020	41,383
Net foreign exchange
losses (gains)	203	(3)	–		76	203	73
and after crediting:
Gain on disposal of property,
plant and equipment	295	–	–		–	295	–
Rental income under operating
leases in respect of:
Premises, net of
negligible outgoings
(2005: HK$9,177,000)	674	13,503	–		–	674	13,503
Plant and machinery	–	–	–		32	–	32

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes:

Continuing operations 2006 2005 HK$’000 HK$’000 (a) Depreciation and amortisation of property, plant and equipment: Owned assets 4,440 14,734 Less: Amount capitalised in respect of contracts in progress – – 4,440 14,734 (b) Staff costs, including directors’ emoluments: Salaries and other benefits 27,074 33,898 Retirement benefit scheme contributions, net of forfeited contributions of approximately HK$68,000 (2005: HK$1,202,000) 816 848 27,890 34,746 Less: Amount capitalised in respect of contracts in progress – (581) 27,890 34,165	Discontinued operations 2006 2005 HK$’000 HK$’000 – 20,533 – (934) – 19,599 – 141,653 – 4,500 – 146,153 – (111,286) – 34,867	Consolidated 2006 2005 HK$’000 HK$’000 4,440 35,267 – (934) 4,440 34,333 27,074 175,551 816 5,348 27,890 180,899 – (111,867) 27,890 69,032

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

15. DIRECTORS’ AND EMPLOYEES’ EMOLUMENTS

The emoluments paid or payable to each of the nine (2005: eleven) directors were as follows:

(a) Directors’ emoluments

2006

Chan Chau Kwok Mei Chan Keung, Wah, Kwok Charles Rosanna Hung HK$’000 HK$’000 HK$’000 Fees 10 10 10 Other emoluments Salaries and other benefits 2,200 1,400 1,838 Retirement benefit schemes contributions 220 140 64 Discretionary bonus – – – Total emoluments 2,430 1,550 1,912 2005 Chan Chau Kwok Mei Chan Chan Keung, Wah, Kwok Fut Charles Rosanna Hung Yan HK$’000 HK$’000 HK$’000 HK$’000 Fees 10 10 10 10 Other emoluments Salaries and other benefits 2,467 1,928 1,838 1,928 Retirement benefit schemes contributions 246 192 56 192 Discretionary bonus – – 1,500 – Total emoluments 2,723 2,130 3,404 2,130	Chan Chau Kwok Mei Chan Keung, Wah, Kwok Charles Rosanna Hung HK$’000 HK$’000 HK$’000 Fees 10 10 10 Other emoluments Salaries and other benefits 2,200 1,400 1,838 Retirement benefit schemes contributions 220 140 64 Discretionary bonus – – – Total emoluments 2,430 1,550 1,912 2005 Chan Chau Kwok Mei Chan Chan Keung, Wah, Kwok Fut Charles Rosanna Hung Yan HK$’000 HK$’000 HK$’000 HK$’000 Fees 10 10 10 10 Other emoluments Salaries and other benefits 2,467 1,928 1,838 1,928 Retirement benefit schemes contributions 246 192 56 192 Discretionary bonus – – 1,500 – Total emoluments 2,723 2,130 3,404 2,130	Chan Chau Kwok Mei Chan Keung, Wah, Kwok Charles Rosanna Hung HK$’000 HK$’000 HK$’000 Fees 10 10 10 Other emoluments Salaries and other benefits 2,200 1,400 1,838 Retirement benefit schemes contributions 220 140 64 Discretionary bonus – – – Total emoluments 2,430 1,550 1,912 2005 Chan Chau Kwok Mei Chan Chan Keung, Wah, Kwok Fut Charles Rosanna Hung Yan HK$’000 HK$’000 HK$’000 HK$’000 Fees 10 10 10 10 Other emoluments Salaries and other benefits 2,467 1,928 1,838 1,928 Retirement benefit schemes contributions 246 192 56 192 Discretionary bonus – – 1,500 – Total emoluments 2,723 2,130 3,404 2,130	Chan Chau Kwok Mei Chan Keung, Wah, Kwok Charles Rosanna Hung HK$’000 HK$’000 HK$’000 Fees 10 10 10 Other emoluments Salaries and other benefits 2,200 1,400 1,838 Retirement benefit schemes contributions 220 140 64 Discretionary bonus – – – Total emoluments 2,430 1,550 1,912 2005 Chan Chau Kwok Mei Chan Chan Keung, Wah, Kwok Fut Charles Rosanna Hung Yan HK$’000 HK$’000 HK$’000 HK$’000 Fees 10 10 10 10 Other emoluments Salaries and other benefits 2,467 1,928 1,838 1,928 Retirement benefit schemes contributions 246 192 56 192 Discretionary bonus – – 1,500 – Total emoluments 2,723 2,130 3,404 2,130	Chan Fut Yan HK$’000 10 600 60 –	Lau Wong Cheung Ko Chuck, Lee Kam Hon Yuen, Winston Kit Cheong, Kit Tom Calptor Wah Stanley HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 5 120 120 120 – 270 – – – – 27 – – – – – – – – 10 302 120 120 120 Lau Wong Ko Chuck, Lee Kam Wong Yuen, Winston Kit Cheong, Lai, Kun Tom Calptor Wah Stanley Dominic To HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 120 83 60 52 4 1,928 – – – – – 143 – – – – – – – – – – – 2,081 120 83 60 52 4	Lau Wong Cheung Ko Chuck, Lee Kam Hon Yuen, Winston Kit Cheong, Kit Tom Calptor Wah Stanley HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 5 120 120 120 – 270 – – – – 27 – – – – – – – – 10 302 120 120 120 Lau Wong Ko Chuck, Lee Kam Wong Yuen, Winston Kit Cheong, Lai, Kun Tom Calptor Wah Stanley Dominic To HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 120 83 60 52 4 1,928 – – – – – 143 – – – – – – – – – – – 2,081 120 83 60 52 4	Lau Wong Cheung Ko Chuck, Lee Kam Hon Yuen, Winston Kit Cheong, Kit Tom Calptor Wah Stanley HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 5 120 120 120 – 270 – – – – 27 – – – – – – – – 10 302 120 120 120 Lau Wong Ko Chuck, Lee Kam Wong Yuen, Winston Kit Cheong, Lai, Kun Tom Calptor Wah Stanley Dominic To HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 120 83 60 52 4 1,928 – – – – – 143 – – – – – – – – – – – 2,081 120 83 60 52 4	Lau Wong Cheung Ko Chuck, Lee Kam Hon Yuen, Winston Kit Cheong, Kit Tom Calptor Wah Stanley HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 5 120 120 120 – 270 – – – – 27 – – – – – – – – 10 302 120 120 120 Lau Wong Ko Chuck, Lee Kam Wong Yuen, Winston Kit Cheong, Lai, Kun Tom Calptor Wah Stanley Dominic To HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 120 83 60 52 4 1,928 – – – – – 143 – – – – – – – – – – – 2,081 120 83 60 52 4	Lau Wong Cheung Ko Chuck, Lee Kam Hon Yuen, Winston Kit Cheong, Kit Tom Calptor Wah Stanley HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 5 120 120 120 – 270 – – – – 27 – – – – – – – – 10 302 120 120 120 Lau Wong Ko Chuck, Lee Kam Wong Yuen, Winston Kit Cheong, Lai, Kun Tom Calptor Wah Stanley Dominic To HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 120 83 60 52 4 1,928 – – – – – 143 – – – – – – – – – – – 2,081 120 83 60 52 4	Lau Wong Cheung Ko Chuck, Lee Kam Hon Yuen, Winston Kit Cheong, Kit Tom Calptor Wah Stanley HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 5 120 120 120 – 270 – – – – 27 – – – – – – – – 10 302 120 120 120 Lau Wong Ko Chuck, Lee Kam Wong Yuen, Winston Kit Cheong, Lai, Kun Tom Calptor Wah Stanley Dominic To HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 10 120 83 60 52 4 1,928 – – – – – 143 – – – – – – – – – – – 2,081 120 83 60 52 4	Total HK$’000 415 6,308 511 –
				670							7,234

				Cheung Hon Kit HK$’000 10 6 – –							Total HK$’000 379 10,095 829 1,500
2,723	2,130	3,404	2,130	16	2,081	120	83	60	52	4	12,803

(b) Employees’ emoluments

The five highest paid individuals in the Group for the year ended 31 March 2006 included three directors and two employees (2005: five directors) and information regarding their emoluments are as follows:

Fees Salaries and other benefits Discretionary bonus Retirement benefit scheme contributions	2006 HK$’000 30 8,848 200 446 9,524	2005 HK$’000 50 10,089 1,500 829
		12,468

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Their emoluments were within the following bands:

HK$1,000,001 to HK$1,500,000 HK$1,500,001 to HK$2,000,000 HK$2,000,001 to HK$2,500,000 HK$2,500,001 to HK$3,000,000 HK$3,000,001 to HK$3,500,000	2006 Number of employees 1 2 2 – – 5	2005 Number of employees – – 3 1 1
		5

(c) During the year, no emoluments were paid by the Group to the five highest paid individuals, including directors, as an inducement to join or upon joining the Group or as compensation for loss of office. In addition, none of the directors has waived any emoluments during the year.

16. DIVIDEND PAID

Ordinary shares: Final dividend paid for 2005 – HK1.5 cents (2004: Nil) per share Interim dividend paid for 2006 – HK1.5 cents (2005: HK1.0 cent) per share Scrip dividend issued in lieu of cash	2006 HK$’000 16,080 16,121 (1,446) 30,755	2005 HK$’000 – 6,543 –
		6,543

Of the dividend paid during the year, approximately HK$1,446,000 (2005: Nil) was settled in shares under the Company’s scrip dividend alternative scheme announced by the Company on 6 October 2005 in respect of the final dividend of the year ended 31 March 2005.

The amount of the final dividend proposed for the year ended 31 March 2006 is HK1.7 cents per ordinary share (2005: HK1.5 cents per ordinary share), which will be payable in cash with an option to elect scrip dividend of ordinary shares.

The amount of the preference share dividend in respect of the twelve month period ending on but excluding 3 November 2006 is HK4 cents per redeemable convertible preference share.

17. EARNINGS PER SHARE

Earnings (loss) per share from continuing operations_(note a) Earnings per share from discontinued operations(note b)_ Earnings per share from continuing and discontinued operations	2006 Basic Diluted HK cents HK cents 9.4 6.8 – – 9.4 6.8	2005 Basic Diluted HK cents HK cents (Restated) (Restated) (10.2) (3.1 21.0 8.8 10.8 5.7	2005 Basic Diluted HK cents HK cents (Restated) (Restated) (10.2) (3.1 21.0 8.8 10.8 5.7
			5.7

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes:

(a) Earnings (loss) per share from continuing operations

The calculation of the basic and diluted earnings per share from continuing operations attributable to the equity holders of the parent is based on the following data:

Earnings figures are calculated as follows: Profit for the year attributable to equity holders of the parent Less: Earnings for the year from discontinued operations Earnings (loss) for the purpose of basic earnings per share from continuing operations before dividend for compulsorily convertible cumulative preference shares Dividend for compulsorily convertible cumulative preference shares Earnings (loss) for the purposes of basic earnings per share from continuing operations after dividend for compulsorily convertible cumulative preference shares Effect of dilutive potential ordinary shares: Adjustment of finance cost on convertible notes Adjustment of finance cost on redeemable convertible preference shares Adjustment to the share of results of associates based on dilution of their earnings per share Earnings (loss) for the purposes of diluted earnings per share from continuing operations Weighted average number of ordinary shares for the purposes of basic earnings per share Effect of dilutive potential ordinary shares: Redeemable convertible preference shares Convertible notes Weighted average number of ordinary shares for the purposes of diluted earnings per share	2006 HK$’000 107,394 – 107,394 – 107,394 11,938 10,952 – 130,284 Number 2006 1,142,341,794 272,085,692 500,270,320 1,914,697,806	2005 HK$’000 (Restated) 88,898 (151,672) (62,774) (10,942) (73,716) 16,738 4,439 (271) (52,810) of shares 2005 722,619,374 111,337,564 897,979,908 1,731,936,846

(b) Earnings per share from discontinued operations

Basic and diluted earnings per share for discontinued operations for 2005 is HK$0.21 and HK$0.088, respectively, which are calculated based on the profit for the year from discontinued operations of approximately HK$151,672,000 and the denominators detailed above for basic and diluted earnings per share.

There was no discontinued operations during 2006.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The adjustment to comparative basic and diluted earnings per share, arising from changes in accounting policies set out in note 3 above, is as follows:

Reconciliation of basic and diluted earnings per share for the year ended 31 March 2005:

Reported figure before adjustments Adjustments arising from changes in accounting policies As restated	Basic HK cents 23.7 (12.9) 10.8	Diluted HK cents 10.9 (5.2) 5.7

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

18. PROPERTY, PLANT AND EQUIPMENT

COST OR VALUATION At 1 April 2004 – as originally stated – adoption of HKAS 40 – as restated Translation adjustments Acquisition of subsidiaries Disposal of subsidiaries Additions Disposals Revaluation increase At 31 March 2005 Translation adjustments Additions Disposals Transfer Revaluation increase At 31 March 2006 Comprising: At cost At valuation – 2006 DEPRECIATION AND AMORTISATION At 1 April 2004 Translation adjustments Eliminated on disposal of subsidiaries Provided for the year Eliminated on disposals Reversal on revaluation At 31 March 2005 Translation adjustments Provided for the year Eliminated on disposals Reversal on revaluation At 31 March 2006 CARRYING VALUE At 31 March 2006 At 31 March 2005	Land and buildings HK$’000 242,901 (3,525) 239,376 1,489 – (221,326) 12,300 – 212 32,051 859 – – – 2,351 35,261 – 35,261 35,261 – – (2,987) 3,277 – (290) – – 525 – (525) – 35,261 32,051	Plant, machinery and office equipment HK$’000 414,416 – 414,416 23 13 (403,217) 876 (10,794) – 1,317 17 1,926 (65) 221 – 3,416 3,416 – 3,416 324,003 23 (330,173) 16,231 (9,111) – 973 16 566 (63) – 1,492 1,924 344	Motor vehicles and vessels HK$’000 100,142 – 100,142 55 450 (90,153) 4,761 (962) – 14,293 37 5,318 (1,948) – – 17,700 17,700 – 17,700 33,627 55 (31,006) 8,095 (863) – 9,908 38 1,887 (1,820) – 10,013 7,687 4,385	Furniture Construction and in fixtures progress HK$’000 HK$’000 138,873 – – – 138,873 – 77 – 108 – (137,084) – 960 3,804 (1,501) – – – 1,433 3,804 53 – 3,723 – (654) – 3,583 (3,804) – – 8,138 – 8,138 – – – 8,138 – 86,328 – 73 – (91,913) – 7,664 – (895) – – – 1,257 – 51 – 1,462 – (595) – – – 2,175 – 5,963 – 176 3,804	Total HK$’000 896,332 (3,525)
					892,807 1,644 571 (851,780) 22,701 (13,257) 212
					52,898 966 10,967 (2,667) – 2,351
					64,515
					29,254 35,261
					64,515
					443,958 151 (456,079) 35,267 (10,869) (290)
					12,138 105 4,440 (2,478) (525)
					13,680
					50,835

					40,760

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The above items of property, plant and equipment are depreciated on a straight-line basis at the following rates per annum:

Freehold land	Nil
Buildings	20 years to 50 years
Plant, machinery and office equipment	20% – 331/3%
Motor vehicles and vessels	20% – 331/3%
Furniture and fixtures	20%
Construction in progress	Nil

At 31 March 2006, land and buildings of the Group were revalued by RHL Appraisal Ltd., an independent professional property valuer, either on an open market value basis or on an existing use basis. RHL Appraisal Ltd. is not connected with the Group. This revaluation gave rise to a surplus on revaluation of approximately HK$2,876,000 of which approximately HK$2,582,000 and HK$294,000 had been credited to the income statement and properties revaluation reserve of the Group respectively.

The net book values of land and buildings held by the Group as at the balance sheet date comprised:

Freehold properties in Canada Buildings in Hong Kong	2006 HK$’000 22,761 12,500 35,261	2005 HK$’000 19,551 12,500
		32,051

As at 31 March 2006, had the Group’s land and buildings been carried at cost less accumulated depreciation and amortisation, the carrying value would have been approximately HK$39,567,000 (2005: HK$38,975,000).

19. INVESTMENT PROPERTIES

VALUATION/FAIR VALUE At 1 April 2004 – as originally stated – adoption of HKAS 40 – as restated Disposals Disposal of subsidiaries At 31 March 2005 Translation adjustments Increase in fair value recognised in the income statement At 31 March 2006	HK$’000 515,000 3,525
	518,525 (60,000) (455,000)
	3,525 156 335
	4,016

At 31 March 2006, investment properties of the Group were revalued by RHL Appraisal Ltd., an independent professional property valuer, on an open market value basis. As stated in note 18, RHL Appraisal Ltd. is not connected with the Group.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

20. PREPAID LEASE PAYMENTS

The Group’s prepaid lease payments comprise: Leasehold land held under medium-term lease in Hong Kong Analysed for reporting purposes as: Non-current assets Current assets	2006 HK$’000 91,865 89,651 2,214 91,865	2005 HK$’000 94,079

		91,865 2,214
		94,079

21. OTHER INTANGIBLE ASSETS

Other intangible assets represent club memberships in Hong Kong and the PRC. The directors have reviewed the carrying amounts of the other intangible assets. During the year, in light of market conditions, an impairment loss of approximately HK$1,085,000 (2005: Nil) has been recognised in the income statement.

22. INTERESTS IN ASSOCIATES

Share of net assets of associates: Listed in Hong Kong Listed overseas Goodwill_(note a)_ Market value of listed securities: Hong Kong Overseas	2006 HK$’000 1,172,442 4,042 3,265 1,179,749 1,359,053 93,771 1,452,824	2005 HK$’000 (Restated) 1,909,054 2,704 528
		1,912,286

		1,866,436 23,468
		1,889,904

Notes:

(a) Included in the cost of interests in associates is goodwill of HK$3,265,000 (2005: HK$528,000) arising on acquisitions and deemed acquisitions.

Cost At 1 April 2004 Dilution of interest in an associate At 31 March 2005 Arising on acquisition of additional interest of an associate Dilution of interest in an associate At 31 March 2006	HK$’000 530 (2)
	528 2,738 (1)
	3,265

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b)

Particulars of the Group’s principal associates as at 31 March 2006 are as follows:

				Percentage of
				issued share
			Issued and	capital/
			fully paid	registered
	Place of	Principal	share capital/	capital
	incorporation/	place of	registered	attributable
Name of associate	registration	operations	capital	to the Group	Principal activities
				%
Burcon NutraScience	Canada	Canada	CAD21,917,688	25.57	Investment holding in company
Corporation (“Burcon”)			common shares		engaged in the development of
					commercial canola protein
Central Town Limited	Hong Kong	Hong Kong	HK$2	50.00	Property investment
Hanny Holdings Limited	Bermuda	Hong Kong	HK$2,372,534.02	24.28	Investment holding in companies
(“Hanny”)			ordinary shares		engaged in trading of
					computer related products,
					consumer electronic products,
					distribution and marketing of
					computer accessories,
					household electronic products
					and telecommunication
					accessories and securities
					trading
PYI	Bermuda	Hong Kong	HK$137,879,991	29.00	Investment holding in companies
			ordinary shares		engaged in development and
					investment in port and
					infrastructure project, property
					development and investment,
					treasury investment,
					construction, engineering and
					specialist works

All of the above associates operate in Hong Kong with the exception of Burcon, which operates in Canada.

All of the above associates are held by the Company indirectly.

During the year, discounts on acquisition of HK$1,803,000 and HK$45,489,000 arising on the acquisition of additional equity interest in PYI and Hanny, respectively, were resulted from the excess of the fair value to market value of the relevant shares. Such discounts have been included as income in the determination of the Group’s share of results of associates.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Total assets Total liabilities Net assets Group’s share of net assets of associates Turnover Profit for the year Group’s share of results of associates for the year	2006 HK$’000 10,369,691 (5,128,224) 5,241,467 1,176,484 9,246,233 300,321 127,207	2005 HK$’000 10,799,703 (5,806,499)
		4,993,204

		1,911,758

		9,264,476

		337,542

		257,267

(d) During the year, the Group recognised a net increase in the equity interest in Burcon from 25.01% to 25.57%.

(e) During the year, the Group recognised a net decrease in the equity interest in PYI from 49.58% to 29.00%.

(f) During the year, the Group recognised a net increase in the equity interest in Hanny from 20.48% to 24.28%.

23. AVAILABLE-FOR-SALE INVESTMENTS

Available-for-sale investments as at 31 March 2006 comprise:

Listed investments: – Equity securities listed in Hong Kong – Equity securities listed elsewhere Total Analysed for reporting purposes as: Non-current assets	HK$’000 69,990 13,740
	83,730

	83,730

As at the balance sheet date, all available-for-sale investments are stated at fair value. Fair values of those investments have been determined by reference to market bid prices quoted in active markets.

24. INVESTMENTS IN SECURITIES

Investments in securities as at 31 March 2005 are set out below. Upon the application of HKAS 39 on 1 April 2005 investments in securities were reclassified to appropriate categories under HKAS 39 (see Note 3 for details).

Listed equity securities in Hong Kong Market value of listed securities	Investment securities HK$’000 – 11,075	Other investments HK$’000 5,025 5,025	Total HK$’000 5,025

			16,100

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

25. DEBTORS, DEPOSITS AND PREPAYMENTS

Included in debtors, deposits and prepayments are trade debtors of approximately HK$11,747,000 (2005: HK$2,090,000) and their aged analysis at the balance sheet date is as follows:

Trade debtors 0-30 days 31-60 days 61-90 days Over 90 days	2006 HK$’000 11,587 129 28 3 11,747	2005 HK$’000 1,852 24 90 124
		2,090

Trade debtors arise from property investment business are payable monthly in advance and the credit terms granted by the Group to other trade debtors normally range from 30 days to 90 days.

The directors consider that the fair values of the Group’s debtors and deposits at 31 March 2006 approximate the corresponding carrying amounts.

26. MARGIN ACCOUNT RECEIVABLES/PAYABLES

The margin account receivables/payables carry variable interest rates, ranging from 0.01% to 4% (2005: 0.01%) per annum.

The directors consider that the fair values of the Group’s margin account receivables/payables at 31 March 2006 approximate the corresponding carrying amounts.

27. AMOUNTS DUE FROM ASSOCIATES

The amounts due from associates of the Group are unsecured, aged and repayable within one year. At 31 March 2006, an amount of approximately HK$169,000,000 (2005: Nil) bore interest at the best lending rate of Hong Kong dollars quoted by The Hongkong and Shanghai Banking Corporation Limited (the “Best Lending Rate”) plus 2% per annum and the remaining balance was interest-free.

The directors consider that the fair values of the amounts due from associates at 31 March 2006 approximate the carrying amounts.

28. AMOUNTS DUE FROM RELATED COMPANIES

China Strategic and its subsidiaries Associates of China Strategic An associate of Hanny Macau Prime Properties Holdings Limited (“Macau Prime”) (formerly known as Cheung Tai Hong Holdings Limited)	2006 HK$’000 – 135,548 111,244 570 247,362	2005 HK$’000 358 1,274 – –
		1,632

The Group has common directors who have significant influence in the above related companies.

The amounts are unsecured, aged within one year and repayable on demand. At 31 March 2006, an amount of approximately HK$239,000,000 (2005: Nil) bore interest at the Best Lending Rate plus 2% per annum and the remaining balance was interest-free. Details of the transactions and balances with related companies are set out in note 51.

The directors consider that the fair values of the amounts due from related companies at 31 March 2006 approximate the corresponding carrying amounts.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

29. LOANS RECEIVABLE

Effective interest Maturity date Collateral rate per annum Loans receivable comprises: 30 April 2003 – Best Lending Rate 7 March 2005 – Best Lending Rate+3% 31 March 2006 – Best Lending Rate+2% 30 June 2006 Motor vehicles Best Lending Rate+3% 29 September 2006 – Best Lending Rate+3% 30 March 2007 – Best Lending Rate+3% 30 March 2007 Interests in certain Best Lending Rate+2% private companies with aggregate net assets value of HK$173.9 million 31 March 2007 – Best Lending Rate 31 March 2007 – Best Lending Rate+1% Less: Impairment loss recognised	2006 HK$’000 1,898 3,475 2,000 1,400 150,000 25,000 20,000 3,500 3,500 210,773 (5,373) 205,400	2005 HK$’000 1,898 15,000 2,000 2,731 – – – – 3,500
		25,129 (1,898)
		23,231

All the Group’s loans receivable are denominated in Hong Kong dollars.

The directors consider that the fair values of the Group’s loans receivable at 31 March 2006 approximate the carrying amounts.

30. HELD FOR TRADING INVESTMENTS (OTHER THAN DERIVATIVES)

Held for trading investments as at 31 March 2006 include:

Listed securities: – Equity securities listed in Hong Kong – Equity securities listed elsewhere Unlisted equity linked notes	HK$’000 42,254 13,476 82,744
	138,474

The fair values of the listed equity securities are determined based on the quoted market bid prices available on the relevant exchanges.

The fair values of the unlisted equity linked notes are determined based on the quoted market prices for equivalent instruments at the balance sheet date.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

31. BANK DEPOSITS

The bank deposits carry variable interest rates, ranging from 0.95% to 4.6% (2005: 0.0006% to 2.25%) per annum. The directors consider that the fair values of the bank deposits at 31 March 2006 approximate the corresponding carrying amounts.

32. CREDITORS AND ACCRUED EXPENSES

Included in creditors and accrued expenses are trade payables of approximately HK$758,000 (2005: HK$4,925,000) and their aged analysis at the balance sheet date is as follows:

Trade creditors 0-30 days 31-60 days 61-90 days Over 90 days	2006 HK$’000 730 22 4 2 758	2005 HK$’000 4,817 54 33 21
		4,925

The directors consider that the fair values of creditors and accrued expenses at 31 March 2006 approximate the carrying amounts.

33. DERIVATIVE FINANCIAL INSTRUMENTS

Liabilities Equity accumulator Futures	2006 HK$’000 285 175 460	2005 HK$’000 – –
		–

The above derivatives are measured at fair value at each balance sheet date. Their fair values are determined based on the quoted market bid prices for equivalent instruments at the balance sheet date.

The equity accumulator represents maturity on 20 March 2007. The futures represent the Group’s investment in an overseas stock market index with maturity on 30 June 2006.

34. AMOUNTS DUE TO ASSOCIATES

The balances of the Group are unsecured, interest-free and have no fixed terms of repayment.

The directors consider that the fair values of amounts due to associates at 31 March 2006 approximate the carrying amounts.

35. CONVERTIBLE NOTES

Liability component at the beginning of the year Interest charge Interest paid Conversion Liability component at the end of the year	2006 HK$’000 162,628 11,938 (10,085) (164,481) –	2005 HK$’000 (Restated) 282,840 16,738 (13,502 (123,448
		162,628

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Pursuant to an ordinary resolution passed at a special general meeting of the Company held on 9 October 2002, the Company issued on 3 March 2003 HK$250,000,000 and HK$142,500,000 convertible notes to Dr. Chan Kwok Keung, Charles, a director and a substantial shareholder of the Company, and independent investors by way of subscription and placement, respectively.

The notes bear interest at the Best Lending Rate and payable semi-annually in arrears.

All the noteholders have an option to convert the convertible notes into ordinary shares of the Company at an initial conversion price of HK$0.30 per ordinary share on or before 3 March 2006. The ordinary shares to be issued upon such conversion rank pari passu in all respects with the ordinary shares of the Company in issue on the relevant conversion date.

Prior to 1 April 2004, convertible notes with a face value of HK$7,000,000 were converted into 23,333,333 ordinary shares of the Company at HK$0.30 per ordinary share and convertible notes with a face value of HK$96,000,000 were redeemed by the Company.

On 31 January 2005 and 3 February 2005, convertible notes with the face values of HK$112,900,000 and HK$12,100,000 were converted into 376,333,333 and 40,333,332 ordinary shares of the Company at HK$0.30 per ordinary share, respectively. The remaining convertible notes with a face value of HK$164,500,000 were fully converted into 548,333,330 ordinary shares of the Company at HK$0.30 per ordinary share during the year.

The convertible notes contain two components: liability and equity elements. Upon the application of HKAS 32 “Financial Instruments: Disclosure and Presentation” (see note 3 for the details), the convertible loan notes were split between the liability and equity elements, on a retrospective basis. The equity element is presented in equity heading “convertible notes reserve”. The effective interest rate of the liability component is 6.2% per annum.

36. BANK BORROWINGS

Bank borrowings comprise: Mortgage loans Bank overdrafts Analysed as: Secured Unsecured The bank borrowings are repayable as follows: Within one year or on demand From one to two years From two to three years From three to four years From four to five years More than five years Less: Amounts due within one year or on demand shown under current liabilities Amounts due after one year	2006 HK$’000 62,550 28,217 90,767 77,383 13,384 90,767 30,667 2,450 2,450 2,450 5,250 47,500 90,767 (30,667) 60,100	2005 HK$’000 65,000 14,922 79,922 79,922 – 79,922 17,372 2,450 7,350 – – 52,750 79,922 (17,372) 62,550

The Group has variable-rate borrowings which carry interest at Hong Kong Interbank Offer Rate or Canadian prime rate plus a fixed percentage.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The ranges of effective interest rates (which are also equal to contracted interest rates) on the Group’s borrowings are as follows:

	2006	2005
Effective interest rate:
Variable-rate borrowings	1.184% to 4.965%	0.954% to 1.184%

The Group’s borrowings are denominated in functional currency of the relevant group entities.

The fair values of the Group’s borrowings estimated by discounting their future cash flows at the prevailing market rates at the balance sheet date for similar borrowings approximate their carrying amounts.

37. OTHER LOANS

The loans were unsecured, beared interest at the Best Lending Rate plus 1% per annum and were fully repaid during the year.

38. REDEEMABLE CONVERTIBLE PREFERENCE SHARES

The movement of the liability component of the redeemable convertible preference shares for the current and prior year is set out below:

	HK$’000
Liability component at 1 April 2004	–
Amendment of terms on 3 November 2004_(note a)_	283,185
Finance cost	4,439
Conversion on 3 February 2005_(note b)_	(1,087)
Liability component at 31 March 2005	286,537
Finance cost	10,952
Interest paid in the form of a dividend	(10,678)
Liability component at 31 March 2006	286,811
Number of redeemable convertible preference shares issued and fully paid
	Number of shares
Redeemable convertible preference shares of HK0.10 each
At 1 April 2004	–
Conversion from compulsorily convertible cumulative preference shares_(note a)_	267,980,000
Conversion on 3 February 2005_(note b)_	(1,028,000)
At 31 March 2005 and 2006	266,952,000

The redeemable convertible preference shares are listed and matured on 3 November 2007, with a redemption value of HK$1.06 per preference share.

The redeemable convertible preference shares rank in priority to the ordinary shares in the Company as to dividends and return of capital. The redeemable convertible preference shares are convertible into ordinary shares of the Company at the option of the holders at any time in accordance with the rights and restrictions as set out in the Special Resolution. However, redeemable convertible preference shares are subject to compulsory conversion at the option of the Company in any of the following cases:

– the closing price of the ordinary shares in the Company on the Hong Kong Stock Exchange is 125% or more of the conversion price of HK$1.04, subject to adjustments, for twenty consecutive trading days; or

– there are less than 50,000,000 redeemable convertible preference shares in issue.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The redeemable convertible preference shares contain two components: liability and equity elements. Upon the application of HKAS 32 (see note 3 for details), the redeemable convertible preference shares were split between the liability and equity elements, on a retrospective basis. The equity element is presented in equity heading “preference share reserve”. The effective interest rate of the liability component is 3.88% per annum. They are redeemable at maturity. As a result of the application of HKAS 32, an amount of approximately HK$874,000 had been credited to the preference share reserve upon the amendment of the terms on 3 November 2004 (note a).

Notes:

(a) With effect from 3 November 2004, the Company’s outstanding preference shares (see note 40 for details) have been converted into convertible, non-voting and redeemable preference shares with a cumulative preferential dividend of HK$0.04 for every redeemable convertible preference share per annum pursuant to the Special Resolution (defined in note 40).

As a result of the above and upon adoption of HKAS 32, the preference shares of the Company which has been previously classified as equity instruments are reclassified as financial liabilities with an embedded conversion feature.

(b) On 3 February 2005, 1,047,769 ordinary shares of the Company of HK$0.10 each were issued upon conversion of 1,028,000 redeemable convertible preference shares of HK$0.10 each at the conversion price of HK$1.04 per ordinary share. Such ordinary shares issued by the Company ranked pari passu with the then existing ordinary shares of the Company in all respects.

39. DEFERRED TAX LIABILITIES

	2006	2005
	HK$’000	HK$’000
Deferred tax liabilities	99	48

The following table shows the major deferred tax (assets) liabilities recognised and movements thereon during the current and prior year:

At 1 April 2004 Acquisition of subsidiaries Charge (credit) to income statement Charge to equity (Restated) Disposal of subsidiaries Exchange difference At 31 March 2005 (Restated) Charge (credit) to income statement Charge to equity At 31 March 2006	Revaluation of medium term leasehold Accelerated properties Undistributed tax situated in earnings of depreciation Hong Kong an associate HK$’000 HK$’000 HK$’000 32,625 – 29,865 – – – 3,709 – 7,302 – 48 – (35,469) – (37,173) – – 6 865 48 – 298 – – – 51 – 1,163 99 –	Recognition Tax of contracting losses income HK$’000 HK$’000 (8,911) (3,426) – – 1,110 271 – – 6,936 3,155 – – (865) – (298) – – – (1,163) –	Others HK$’000 15 900,000 (3) – (900,012) – – – – –	Total HK$’000 50,168 900,000 12,389 48 (962,563) 6
				48 – 51
				99

At the balance sheet date, the Group has unused tax losses of approximately HK$475,000,000 (2005: HK$457,000,000) available for offset against future profits. A deferred tax asset has been recognised in respect of approximately HK$6,645,000 (2005: HK$5,000,000) of such losses. No deferred tax asset in respect of the remaining tax losses has been recognised due to the unpredictability of future profit streams. The tax losses can be carried forward indefinitely.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

40. SHARE CAPITAL

Number of shares Authorised: Ordinary shares of HK$0.10 each At 1 April 2004, 31 March 2005 and 31 March 2006 3,000,000,000 Issued and fully paid: Ordinary shares of HK$0.10 each At 1 April 2004 654,294,107 Conversion of convertible notes_(note a) 416,666,665 Conversion of redeemable convertible preference shares(note b) 1,047,769 At 31 March 2005 1,072,008,541 Conversion of convertible notes(note a) 548,333,330 Issue of shares(notes c and d) 217,153,274 At 31 March 2006 1,837,495,145 Compulsorily convertible cumulative preference shares of HK$0.10 each At 1 April 2004 267,980,000 Conversion to redeemable convertible preference shares(note e)_ (267,980,000) At 1 March 2005, as restated –	Value HK$’000 300,000
	65,429 41,667 105
	107,201 54,834 21,715
	183,750

	26,798 (26,798)
	–

Notes:

(a) 548,333,330 ordinary shares (2005: 416,666,665) of the Company of HK$0.10 each were issued upon conversion of the convertible notes at the conversion price of HK$0.30 per ordinary share. Details are as follows:

	Amount of	No. of ordinary
	convertible notes	shares issued
Date of conversion	being converted	upon conversion
	HK$’000
31 January 2005	112,900	376,333,333
3 February 2005	12,100	40,333,332
	125,000	416,666,665
24 February 2006	39,900	133,000,000
27 February 2006	6,900	23,000,000
28 February 2006	33,900	112,999,998
2 March 2006	83,800	279,333,332
	164,500	548,333,330

The ordinary shares issued by the Company ranked pari passu with the then existing ordinary shares of the Company in all respects.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) On 3 February 2005, 1,047,769 ordinary shares of the Company of HK$0.10 each were issued upon conversion of 1,028,000 redeemable convertible preference shares of HK$0.10 each at the conversion price of HK$1.04 per ordinary share.
(c) On 3 November 2005, 2,753,274 ordinary shares of the Company of HK$0.10 each were issued in the form of scrip dividend. The ordinary shares issued by the Company ranked pari passu with the then existing ordinary shares of the Company in all respects.
(d) On 24 February 2006, 214,400,000 ordinary shares of the Company of HK$0.10 each were issued at an issuance price of HK$0.72 per ordinary share. The ordinary shares issued by the Company ranked pari passu with the then existing ordinary shares of the Company in all respects.
(e) Prior to 3 November 2004, the preference shares are non-voting, non-redeemable and are entitled to a cumulative dividend of HK$0.069 per share per annum. With effect from 3 November 2004, the preference shares have been converted into non-voting and redeemable convertible preference shares with a cumulative preferential dividend of HK$0.04 for every redeemable convertible preference share per annum subject to the rights and restrictions as set out in the Special Resolution passed on 13 October 2004 by the shareholders of the Company.

With the adoption of HKAS 32, the redeemable convertible preference shares were reclassified as liability and preference shares reserves (see notes 3 and 38 for details).

41. SHARE OPTIONS

(a) Share options of the Company

The Company adopted a share option scheme (the “ITC Scheme”) on 16 January 2002 (the “Adoption Date”) for the purpose of providing incentive or reward to eligible persons for their contribution to, and continuing efforts to promote the interests of, the Company. The board of directors of the Company may in its absolute discretion, subject to the terms of the ITC Scheme, grant options to any employees (including directors) of the Company and its subsidiaries to subscribe for ordinary shares of the Company.

At the time of adoption by the Company of the ITC Scheme, the aggregate number of ordinary shares which may be issued upon the exercise of all options to be granted under the ITC Scheme and any other share option scheme(s) adopted by the Company must not exceed 10% of the total number of issued ordinary shares of the Company as at the date of shareholders’ approval of the ITC Scheme. By ordinary resolution passed on 15 May 2006 relating to the refreshing of the scheme limit on grant of options under the ITC Scheme and any other share option scheme(s) of the Company, the scheme limit on grant of options was refreshed. As a result, the total number of ordinary shares available for issue under the ITC Scheme is 183,749,514, representing approximately 10% of the aggregate number of issued ordinary shares of the Company as at the date of this report. Notwithstanding the foregoing, the maximum number of ordinary shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the ITC Scheme and any other share option scheme(s) of the Company must not, in aggregate, exceed 30% of the total number of issued ordinary shares of the Company from time to time.

Unless approved by the shareholders of the Company in general meeting, the total number of ordinary shares of the Company issued and to be issued upon exercise of the options granted and to be granted (whether exercised, cancelled or outstanding) under the ITC Scheme and any other share option scheme(s) of the Company to any eligible person in any 12-month period expiring on the date of offer shall not exceed 1% of the total number of the Company’s ordinary shares in issue from time to time.

The period within which the options may be exercised will be determined by the directors of the Company at the time of grant. This period must expire in any event not later than the last day of the ten year period after the Adoption Date. The ITC Scheme does not provide for any minimum period for which an option must be held before it can be exercised. Options may be granted at an initial payment of HK$1.00 for each acceptance of grant of option(s). The directors of the Company shall specify a date, being a date not later than 30 days after (i) the date on which the offer of the options is issued, or (ii) the date on which the conditions for the offer are satisfied, by which the eligible person must accept the offer or be deemed to have declined it.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The exercise price of the options will be determined by the directors of the Company (subject to adjustments as provided in the rules of the ITC Scheme) which shall be at least the highest of (i) the nominal value of the ordinary shares of the Company; (ii) the closing price of the ordinary shares of the Company as stated in the Hong Kong Stock Exchange’s daily quotations sheet on the date of the offer, which must be a business day; and (iii) the average of the closing prices of the ordinary shares of the Company as stated in the Hong Kong Stock Exchange’s daily quotations sheets for the five business days immediately preceding the date of the offer.

The ITC Scheme shall be valid and effective for a period of ten years commencing after the Adoption Date, after which period no further options shall be granted.

As at 31 March 2006 and 2005, there were no outstanding share options granted by the Company pursuant to the ITC Schemes. No share options were granted, exercised, cancelled or lapsed during the year and prior year.

(b) Share options of Trasy

(i) Pre-IPO Share Option Plan of Trasy Gold Ex Limited (“Trasy”)

Trasy, a subsidiary of the Company, adopted a pre-IPO share option plan (the “Trasy Pre-IPO Plan”) on 6 November 2000. Pursuant to the Trasy Pre-IPO Plan, the board of directors of Trasy could, at its discretion, grant options to any full-time employees or executives of Trasy and its subsidiaries on or before 29 November 2000.

Details of the share options granted under the Trasy Pre-IPO Plan are as follows:

Exercise Grantees Date of grant price HK$ Directors of Trasy 29 November 2000 0.21 Others 29 November 2000 0.21 Total		Number of shares of Trasy to be issued upon exercise of the share options	Number of shares of Trasy to be issued upon exercise of the share options	Number of shares of Trasy to be issued upon exercise of the share options	Number of shares of Trasy to be issued upon exercise of the share options
	Balance at 1.4.2004 44,152,000 18,834,000 62,986,000	Lapsed during the year – (2,254,000) (2,254,000)	Balance at 31.3.2005 44,152,000 16,580,000 60,732,000	Cancelled during the year (44,152,000) (15,068,000) (59,220,000)	Lapsed during the year – (1,512,000) (1,512,000)	Balance at 31.3.2006 – –
						–

All the above options have a duration of ten years from the date of grant.

No share options were exercised under the Trasy Pre-IPO Plan during the year and prior year.

(ii) Share Option Scheme of Trasy

Trasy adopted a new share option scheme (the “Trasy Scheme”) on 30th April 2002. The purpose of the Trasy Scheme is to enable the board of Trasy, at its discretion, grant options to any employees or proposed employees or executives, including executive directors, of Trasy, the controlling company and of their respective subsidiaries, non-executive directors of Trasy, any controlling company and their respective subsidiaries, any suppliers, adviser, consultant, contractor, customers, person or entity that provides research, development or other technological support to Trasy and its subsidiaries (the “Trasy Group”) or any shareholders of any members of the Trasy Group or any investor entity as incentives or rewards for their contribution to the Trasy Group.

The total number of shares may be issued upon exercise of all options to be granted under the Trasy Scheme must not, in aggregate, exceed 10% of the issued share capital of Trasy as at the date of adoption of the Trasy Scheme, unless approval by its shareholders has been obtained, and which must not in aggregate exceed 30% of the shares in issue from time to time. The maximum entitlement of each participant under the Trasy Scheme in any 12-month period up to the date of grant shall not exceed 1% of shares in issue as at the date of grant.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

An option may be accepted by a proposed grantee within 7 days from the date of the offer of grant of the option upon payment of HK$1.00 to Trasy by way of consideration for the grant. There is no minimum period for which an option must be held before it can be exercised. An option may be exercised in accordance with the terms of the Trasy Scheme at any time after the date upon which the option is deemed to be granted and accepted and prior to the expiry of ten years from that date.

The exercise price in respect of any particular option granted under the Trasy Scheme shall be determined by the board of directors of Trasy and will not be less than the highest of (a) the closing price of the shares as stated in the Hong Kong Stock Exchange’s daily quotations sheet on the date of grant; (b) the average of the closing prices of the shares as stated in the Hong Kong Stock Exchange’s daily quotations sheet for the five business days immediately preceding the date of grant; and (c) the nominal value of a share.

The Trasy Scheme shall be valid and effective for a period of 10 years from the date of its adoption.

No share options were granted by Trasy under the Trasy New Scheme since the adoption date of the Trasy Scheme.

42. ACQUISITION OF SUBSIDIARIES

In 2006, the Group acquired property, plant and equipment and other intangible assets through acquisition of the entire share capital of Darierian Limited at a consideration of HK$3,500,000. The acquisition has been recorded as purchase of assets.

In 2005, the following major acquisitions took place:

(i) In April 2004, the Group, through PYI, acquired approximately 54.06% indirect interest in a joint venture company, Jiangsu Yangtong Investment and Development Co., Ltd. (“Yangtong”), to build and operate a bulk handing sea port at Yangkou Port, Nantong City, Jiangsu, the PRC, for a consideration of HK$394,911,000, which is satisfied by cash.
(ii) On 23 March 2005, the Group acquired 1,391,430,000 ordinary shares of Trasy representing approximately 50.07% of the entire issued share capital of Trasy, from an independent third party of the Group (the “Vendor”). These shares were pledged by the former holding company of Trasy to the Vendor, which sold the shares to the Group pursuant to the power of sale under the deed of charge, at a consideration of HK$8,803,000. As a result a discount on acquisition of HK$20,938,000 was credited to the income statement.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The amounts of assets and liabilities acquired by the Group, and the goodwill and discount on acquisition arising, during the year were as follows:

Acquirees’ carrying amount before Combination HK$’000 NET ASSETS ACQUIRED Property, plant and equipment 460 Properties under development 116,601 Investments in securities – Debtors, deposits and prepayments 5,402 Gold bullion – Bank balances and cash 2,996 Creditors and accrued expense – Bank borrowings (18,850) Deferred tax liabilities – Minority interests (93,645) 12,964 Discount on acquisition SATISFIED BY: Cash Net cash (outflow) inflow arising on acquisitions Cash consideration paid Cash and cash equivalents acquired		Yangtong	Fair value HK$’000 460 1,723,292 – 5,402 – 2,996 – (18,850) (900,000) (418,389) 394,911 – 394,911 394,911 (394,911) 2,996 (391,915)	Trasy Acquiree’s carrying amount and fair value HK$’000 111 – 250 1,003 65,303 4 (7,271) – – (29,659) 29,741 (20,938) 8,803 8,803 (8,803) 4 (8,799)	Others Acquiree’s carrying amount and fair value HK$’000 – 61,392 – 444 – 30 (29,777) – – – 32,089 – 32,089 32,089 (32,089) 30 (32,059)	2005 Total HK$’000 571 1,784,684 250 6,849 65,303 3,030 (37,048) (18,850) (900,000) (448,048)
		Fair value adjustments HK$’000 – 1,606,691 – – – – – – (900,000) (324,744) 381,947
						456,741 (20,938)
						435,803

						435,803
						(435,803) 3,030
						(432,773)

Had the acquisitions been completed on 1 April 2004, the Group’s turnover and loss for the year attributable to the equity holders of the parent from continuing operations would have been approximately HK$105,986,000 and HK$37,990,000, respectively. This proforma information is for illustrative purposes only and is not necessarily indicative of the turnover and results of the Group that would actually have been impacted had the acquisitions been completed on 1 April 2004, nor is it intended to be a projection of future results.

The newly acquired subsidiaries during 2005 did not make any significant impact on the Group’s results for 2005.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

43. DISPOSAL OF SUBSIDIARIES

NET ASSETS DISPOSED Property, plant and equipment Investment properties Prepaid lease payments Interests in associates Interests in jointly controlled entities Investments in securities Deferred tax assets Property under development Properties held for resale Amounts due from customers for contract works Debtors, deposits and prepayments Amounts due from associates Amounts due from jointly controlled entities Amounts due from related companies Loans receivable Tax recoverable Bank deposits Bank balances and cash Amounts due to customers for contract works Creditors and accrued expenses Amounts due to associates Amounts due to jointly controlled entities Bank borrowings Loans from a minority shareholder Minority interests Provision for long service payments Deferred tax liabilities Reserves released on disposal: Other reserve Properties revaluation reserve Translation reserve Loss on disposal Reclassification to interests in associates SATISFIED BY: Cash Net cash outflow arising on disposal: Cash consideration Bank deposits, bank balances and cash disposed of less bank overdrafts disposed of Net outflow of cash and cash equivalents in respect of the disposal of subsidiaries	2006 HK$’000 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 2006 HK$’000 – – –	2005 HK$’000 (Restated) 260,935 455,000 134,766 1,244,320 8,934 38,103 1,680 1,813,047 41,000 189,074 1,144,839 344,681 207 118,106 199,957 14,291 48,374 79,799 (393,376) (982,186) (2,019) (20,766) (501,051) (341,000) (1,513,430) (1,727) (964,243) 1,417,315 173 (340) (5,767) (71,300) (1,262,547) 77,534 77,534 2005 HK$’000 77,534 (121,122) (43,588)

The subsidiaries disposed of during the year ended 31 March 2005 contributed approximately HK$1,970,241,000 to the Group’s turnover.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

44. MAJOR NON-CASH TRANSACTION

(a) During the year ended 31 March 2006:
(i) HK$164,500,000 convertible notes issued by the Company were converted into 548,333,330 ordinary shares of the Company at HK$0.30 per share.
(b) During the year ended 31 March 2005:
(i) HK$125,000,000 convertible notes issued by the Company were converted into 416,666,665 ordinary shares of the Company at HK$0.30 per share.
(ii) 1,028,000 redeemable convertible preference shares were converted into 1,047,769 ordinary shares of the Company at HK$1.04 per share.

45. RETIREMENT BENEFIT SCHEMES

The Group operates defined contribution retirement benefit schemes for qualifying employees. The assets of the schemes are separately held in funds under the control of trustees.

The cost charged to the income statement represents contributions payable to the funds by the Group at rates specified in the rules of the schemes. Where there are employees who leave the schemes prior to vesting fully in the contributions, the contributions payable by the Group are reduced by the amount of forfeited contributions.

At the balance sheet date, there were no significant forfeited contributions which arose upon employees leaving the schemes prior to their interests in the Group’s contributions becoming fully vested and which are available to reduce the contributions payable by the Group in future years.

The Group also joined a Mandatory Provident Fund Scheme (“MPF Scheme”). The MPF Scheme is registered with the Mandatory Provident Fund Schemes Authority under the Mandatory Provident Fund Scheme Ordinance. The assets of the MPF Scheme are held separately from those of the Group in funds under the control of an independent trustee. Under the rules of the MPF Scheme, the employer and its employees are each required to make contributions to the MPF Scheme at rates specified in the rules. The only obligation of the Group with respect to the MPF Scheme is to make the required contributions under the MPF Scheme. No forfeited contributions are available to reduce the contributions payable in future years.

46. CONTINGENT LIABILITIES

Guarantees given to banks and financial institutions in respect of general facilities granted to an associate Financial support given to an associate	2006 HK$’000 56,000 9,090 65,090	2005 HK$’000 – –
		–

47. OPERATING LEASE ARRANGEMENTS

(a) The Group as a lessee:

At the balance sheet date, the Group had commitments for future minimum lease payments under noncancellable operating leases in respect of rented premises, which fall due as follows:

Within one year In the second to fifth year inclusive	2006 HK$’000 807 647 1,454	2005 HK$’000 308 61
		369

Leases are negotiated, and monthly rentals are fixed, for an average term of two years.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) The Group as a lessor:

At the balance sheet date, the Group had contracted with tenants for future minimum lease payments which fall due as follows:

Within one year In the second to fifth year inclusive The properties held have committed tenants for the next two years. COMMITMENTS Capital expenditure contracted for but not provided in the financial statements in respect of acquisition of: Equity investments Property, plant and equipment	2006 HK$’000 506 1,188 1,694 2006 HK$’000 – 1,398 1,398	2005 HK$’000 563 1,542
		2,105

		2005 HK$’000 43,200 2,984
		46,184

48. COMMITMENTS

49. PLEDGE OF ASSETS

As at 31 March 2006, the Group’s properties of approximately HK$39,277,000 (2005: HK$35,578,000) and prepaid lease payments of approximately HK$91,865,000 (2005: HK$94,079,000) have been pledged to banks and financial institutions to secure general credit facilities granted to the Group. Facilities amounting to approximately HK$77,383,000 (2005: HK$79,922,000) were utilised as at 31 March 2006.

In addition, the Group’s margin accounts payable were secured by the Group’s held for trading investments of HK$42,758,000 (2005: Nil) as at 31 March 2006.

50. POST BALANCE SHEET EVENTS

(a) On 27 April 2006, the Company and Macau Prime entered into a subscription agreement in relation to the subscription of the 1% convertible notes with a principal amount of HK$30,000,000 to be issued by Macau Prime. The subscription had been completed on 8 June 2006.
(b) On 27 June 2006, the Company and Hanny entered into a subscription agreement in relation to the subscription of the 1% convertible exchangeable notes with a principal amount of US$75,000,000 (equivalent to approximately HK$582,450,000) to be issued by Hanny (“Hanny Notes”). Details of the subscription had been disclosed in the joint announcement of the Company and Hanny dated 6 July 2006 (the “Joint Announcement”). Pursuant to the Joint Announcement, if the Company converted the Hanny Notes in full, the Company would obtain controlling interest in Hanny. As the acquisition was not yet to be completed at the date of approval these financial statements, in the opinion of the directors, it was impracticable to quantify the amounts recognised at the acquisition date for each class of Hanny’s assets, liabilities and contingent liabilities.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

51. TRANSACTIONS AND BALANCES WITH RELATED PARTIES

During the year or at the balance sheet date, the Group had transactions/balances with the following related parties, details of which are as follows:

Class of related party Nature of transactions/balances Associates of the Group Sales of building materials Dividend income (including scrip dividend) Purchase of concrete products Rentals and related building management fee charged by the Group Service fees charged by the Group Service fees charged to the Group Construction works charged to the Group Subcontracting fees charged by the Group Interest income received Purchase of property, plant and equipment Purchase of club membership Balance due by the Group Balance due to the Group Jointly controlled entities of the Group Service fees charged by the Group Directors or company Interest paid by the Group controlled by director Interest paid on convertible notes issued by the Group Balance due by the Group Convertible notes due by the Group Other related companies Rental and related building management fee (note) charged by the Group Service fees charged by the Group Service fees charged to the Group Interest income received Balance due to the Group	2006 HK$’000 10 498,555 – 593 1,464 – – – 7,981 3,175 325 123 205,083 – 1,406 6,791 – – 65 – – 7,801 247,362	2005 HK$’000 17 66,206 36 4,528 840 1,100 42,320 2,062 13,432 – – 93 8,538

		376

		10 10,647 18,774 133,000

		3,284 31 1,356 5,929 1,632

Note: The Group has common directors who have significant influence in the above other related companies.

Compensation of key management personnel

The directors were considered to be key management personnel of the Group. The remuneration of directors was disclosed in note 15.

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

52. BALANCE SHEET TO THE COMPANY

Non-current asset Investment in subsidiaries Current assets Debtors, deposits and prepayments Amount due from a subsidiary Bank deposits Bank balances and cash Current liabilities Creditors and accrued expenses Convertible notes Other loans – due within one year Net current assets Total assets less current liabilities Non-current liability Redeemable convertible preference shares Net assets Capital and reserves Share capital Reserves_(Note)_ Shareholders’ funds	2006 HK$’000 1 299 1,871,266 96,030 38 1,967,633 3,356 – 9,950 13,306 1,954,327 1,954,328 286,811 1,667,517 183,750 1,483,767 1,667,517	2005 HK$’000 (Restated) 1
		278 1,758,479 8,000 42
		1,766,799
		6,368 162,628 –
		168,996
		1,597,803
		1,597,804 286,537
		1,311,267

		107,201 1,204,066
		1,311,267

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Note:

Share premium HK$’000 At 1 April 2004 as originally 209,889 Effect of changes in accounting policies 60 As restated 209,949 Profit for the year – Total recognised income and expenses for the year – Conversion of compulsorily convertible cumulative preference shares to redeemable convertible preference shares (256,274) Issue of shares arising from conversion of convertible notes 85,837 Issue of shares arising from conversion of redeemable convertible preference shares (2) Dividend paid – Transfer to contributed surplus – At 31 March 2005 39,510 Profit for the year – Total recognised income and expenses for the year – Issue of shares arising from conversion of convertible notes 114,984 Issue of shares arising from distribution of scrip dividend (275) Issue of shares 128,563 Dividend paid – At 31 March 2006 282,782	Contributed surplus HK$’000 2,117,993 – 2,117,993 – – – – – – (983,307) 1,134,686 – – – – – – 1,134,686	Capital redemption reserve HK$’000 908 – 908 – – – – – – – 908 – – – – – – 908	Convertible notes reserve HK$’000 – 9,393 9,393 – – – (4,056) – – – 5,337 – – (5,337) – – – –	Preference share Accumulated reserve (losses) profits HK$’000 HK$’000 – (983,307) – (3,244) – (986,551) – 32,541 – 32,541 874 – – – (3) – – (6,543) – 983,307 871 22,754 – 72,521 – 72,521 – – – – – – – (30,755) 871 64,520	Total HK$’000 1,345,483 6,209
					1,351,692
					32,541
					32,541
					(255,400) 81,781 (5) (6,543) –
					1,204,066 72,521
					72,521
					109,647 (275) 128,563 (30,755)
					1,483,767

Pursuant to the resolution passed on 22 September 2004 by the board of directors of the Company, part of the contributed surplus was transferred to eliminate the accumulated losses of the Company as at 31 March 2005.

The contributed surplus of the Company comprises the difference between the underlying net assets of the subsidiaries acquired by the Company and the nominal amount of the Company’s ordinary share capital issued as consideration for the acquisition and the credits arising from the changes in the capital and reserves of the Company and the transfers to the accumulated losses as approved by the board of directors from time to time.

Under the Companies Act 1981 of Bermuda, the contributed surplus account of the Company is available for distribution. However, the Company cannot declare or pay a dividend, or make a distribution out of contributed surplus if:

(a) it is, or would after the payment be, unable to pay its liabilities as they become due; or
(b) the realisable value of its assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

In the opinion of the directors, subject to the restrictions as stipulated in the Companies Act 1981 of Bermuda as described above, the Company’s reserves available for distribution to shareholders were as follows:

Contributed surplus Accumulated profits	2006 HK$’000 1,134,686 64,520 1,199,206	2005 HK$’000 1,134,686 22,754
		1,157,440

53. PARTICULARS OF PRINCIPAL SUBSIDIARIES

Details of the Company’s principal subsidiaries as at 31 March 2006 are as follows:

			Percentage of	Percentage of
			issued share capital/
		Issued and	registered capital
	Place of	fully paid	held by the
	incorporation/	share capital/	*Company/**	attributable
Name of subsidiary	registration	registered capital	subsidiaries	to the Group	Principal activities
			%	%
Burcon Group Limited	Canada	CAD1,000	100	100	Investment and
		class A common			property holding
		shares
Dreyer and Company Limited	Hong Kong	HK$6,424,000	99	99	Trading of building
		ordinary shares			materials and machinery
Great Intelligence Holdings	Hong Kong	HK$2	100	100	Securities trading and
Limited		ordinary shares			treasury investment
Great Intelligence Limited	British Virgin	US$1	100*	100	Investment holding
	Islands	ordinary share
Great Intelligence Limited	Hong Kong	HK$2	100	100	Property holding and
		ordinary shares			investment
ITC Development Co. Limited	British Virgin	US$15,000	100*	100	Investment holding
	Islands	ordinary shares
ITC Finance Limited	Hong Kong	HK$2	100	100	Provision of finance
		ordinary shares
ITC Investment Group Limited	British Virgin	US$1	100*	100	Investment holding
	Islands	ordinary share
ITC Management Group	British Virgin	US$2	100*	100	Investment holding
Limited	Islands	ordinary shares
ITC Management Limited	Hong Kong	HK$2	100	100	Provision of management
		ordinary shares			and financial services
					and treasury investment
Large Scale Investments	British Virgin	US$1	100*	100	Investment holding
Limited	Islands	ordinary share
Trasy	Cayman Islands	HK$27,790,000	100	56.45	Provision and operation
		ordinary shares			of an internet-based
					precious metal trading
					system

None of the subsidiaries had any loan capital subsisting at the end of the year or at any time during the year. All of the above subsidiaries operate in Hong Kong except Burcon Group Limited which operates in Canada. All of the above subsidiaries are limited companies.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. INDEBTEDNESS

Borrowings

At the close of business on 28 February 2007, being the latest practicable date for this statement of indebtedness prior to the printing of this circular, the Group had outstanding borrowings of approximately HK$411,565,000 comprising secured borrowings of approximately HK$208,126,000 and unsecured borrowings of approximately HK$203,439,000. The secured borrowings of approximately HK$208,126,000 included bank borrowings of approximately HK$149,613,000, share margin financing loans of approximately HK$20,374,000 and bank overdrafts of approximately HK$38,139,000. The unsecured borrowings of approximately HK$203,439,000 represented unsecured loans of approximately HK$203,439,000.

Pledge of assets

At the close of business on 28 February 2007, the secured borrowings are secured by certain of the Group’s assets of approximately HK$484,729,000.

Debt securities

At the close of business on 28 February 2007, the Group had outstanding convertible notes and redeemable convertible preference shares with principle amounts of approximately HK$668,983,000 and HK$282,026,000, respectively. The convertible notes are convertible into approximately 74.3 million shares of Hanny at the prevailing convertible price of HK$9 per share of Hanny and the redeemable convertible preference shares are convertible into approximately 271.2 million Ordinary Shares at the conversion price of HK$1.04 per Ordinary Share. The carrying amounts of the convertible notes and the redeemable convertible preference shares on the balance sheet at 28 February 2007 was approximately HK$569,375,000 and HK$285,209,000 (including the accrued finance charge of approximately HK$4,053,000), respectively.

Contingent liabilities

At the close of business on 28 February 2007, the Group had contingent liabilities in respect of guarantees given to banks on general banking facilities granted to an associate and a third party of approximately HK$56,000,000 and HK$14,899,000 respectively. The Group also had given financial support to an associate of approximately HK$8,790,000. Besides, the Group had the share of contingent liabilities of an associate in respect of guarantees given to a bank on general banking facilities granted to third parties of approximately HK$175,000.

Save as aforesaid and apart from intra-group liabilities, the Group did not have outstanding at the close of business on 28 February 2007 any loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, finance lease commitments, guarantees or other material contingent liabilities.

4. WORKING CAPITAL

Taking into account the Group’s internal resources, presently available banking and other facilities and the effect of the Disposal, and in the absence of unforeseen circumstances, the Directors are of the opinion that the Group will have sufficient working capital to meet its present requirement and for the next twelve months from the date of this circular.

5. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 March 2006 (being the date to which the latest published audited accounts of the Company were made up) up to and including the Latest Practicable Date.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

6. FINANCIAL AND TRADING PROSPECTS

The principal activities of the Group comprise investment holding, the provision of finance, the provision of management services, property investment and trading, treasury investment, trading of building materials and machinery, holding of vessels for sand mining and the provision and operation of an internet-based precious metals trading platform. In respect of strategic investments, the Group holds significant interests, directly or indirectly, in a number of companies listed in Hong Kong, Canada, Singapore, the United States, Australia and Germany and other high potential unlisted investments. Pursuant to its long-term strategy, ITC continues to explore potential investments in an aggressive, but cautious, manner with a view to enhance the value of its strategic investments by active participation in or close liaisons with the management of the investee companies of the Group. In view of the strong upturn of the Hong Kong economy and the diversified investment profile of the Group, ITC is confident about the future prospects of its investment and business operation.

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquires, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(A) Directors’ interests and short positions 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, underlying shares and debentures of ITC or any associated corporations (within the meaning of Part XV of the SFO), which were required to be notified to ITC and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO) and the Model Code and which were required to be entered in the register kept by ITC pursuant to Section 352 of the SFO, were as follows:

(a) Interests and short positions in shares, underlying shares and debentures of the Company

				Approximate %
				of the existing
			No. of	issued ordinary
Name of		Long position/	Ordinary	share capital
Director	Capacity	Short position	Shares held	of ITC
Chan Kwok Keung,	Interest of controlled	Long position	642,939,242	34.33%
Charles	corporation
(“Dr. Chan”)	(Note)

Note: Galaxyway Investments Limited is a wholly-owned subsidiary of Chinaview International Limited which is, in turn, wholly owned by Dr. Chan. Dr. Chan was deemed to be interested in 642,939,242 Ordinary Shares held by Galaxyway Investments Limited.

GENERAL INFORMATION

APPENDIX II

(b) Interests and short positions in shares, underlying shares and debentures of the following associated corporations
(i) Hanny

				No. of
				underlying
				shares	Approximate %
			No. of	(in respect of	of the
			shares of	unlisted equity	existing issued
Name of		Long position/	Hanny	derivatives)	share capital
Director	Capacity	Short position	held	of Hanny held	of Hanny
Dr. Chan	Interests of	Long position	169,979,504	–	67.23%
	controlled		(Note 1)
	corporation
	(Note 1)
Dr. Chan	Interests of	Long position	–	11,304,682	4.47%
	controlled			(Note 1)
	corporations
	(Note 1)
Dr. Chan	Beneficial	Long position	1,627,697	–	0.64%
	owner
Dr. Chan	Beneficial	Long position	–	315,756	0.12%
	owner			(Note 2)
Chan Kwok Chuen,	Beneficial	Long position	1,600,000	–	0.63%
Augustine	owner
Cheung Hon Kit	Beneficial	Long position	6	–	0.00%
	owner
Shek Lai Him,	Beneficial	Long position	32	–	0.00%
Abraham	owner

Notes: 1. The shares of Hanny were held by an indirect wholly-owned subsidiary of ITC. ITC, through its wholly-owned subsidiaries, also held the 2% convertible bonds of Hanny due 2011 with an aggregate principal amount of HK$101,742,150. Upon full conversion of such convertible bonds at an initial conversion price of HK$9 per share of Hanny (subject to adjustments), 11,304,682 shares of Hanny would be issued to indirect wholly-owned subsidiaries of ITC.

By virtue of his deemed interests in approximately 34.33% of the existing issued ordinary share capital of ITC, Dr. Chan was deemed to be interested in these shares and underlying shares of Hanny.

Dr. Chan owned the 2% convertible bonds of Hanny due 2011 in the principal amount of HK$2,841,810. Upon full conversion of such convertible bonds at an initial conversion price of HK$9 per share of Hanny (subject to adjustments), 315,756 shares of Hanny would be issued to Dr. Chan.

GENERAL INFORMATION

APPENDIX II

(ii) Trasy Gold Ex Limited (“Trasy”)

Approximate % of the existing Name of Long position/ No. of shares issued share Director Capacity Short position of Trasy held capital of Trasy Dr. Chan Interest of controlled Long position 1,568,681,139 56.45% corporation (Note)

Note: The shares of Trasy were held by an indirect wholly-owned subsidiary of ITC. By virtue of his deemed interests in approximately 34.33% of the existing issued ordinary share capital of ITC, Dr. Chan was deemed to be interested in these shares of Trasy.

(iii) PYI

				No. of
				underlying
				shares (in
				respect of the
				share options	Approximate %
			No. of	(unlisted equity	of the existing
Name of		Long position/	PYI Shares	derivatives)) of	issued share
Director	Capacity	Short position	held	PYI held	capital of PYI
Dr. Chan	Interest of	Long position	402,368,507	–	26.97%
	controlled
	corporation
	(Note 1)
Dr. Chan	Beneficial owner	Long position	11,915,186	–	0.80%
Chau Mei Wah,	Beneficial owner	Long position	–	1,630,000	0.11%
Rosanna				(Note 2)
Chan Fut Yan	Beneficial owner	Long position	–	2,500,000	0.17%
				(Note 2)
Cheung Hon Kit	Beneficial owner	Long position	400	–	0.00%
Shek Lai Him,	Beneficial owner	Long position	2,000	–	0.00%
Abraham

Notes: 1. The PYI Shares were held by an indirect wholly-owned subsidiary of ITC. By virtue of his deemed interests in approximately 34.33% of the existing issued ordinary share capital of ITC, Dr. Chan was deemed to be interested in these PYI Shares.

On 28 December 2004, Ms. Chau Mei Wah, Rosanna and Mr. Chan Fut Yan were granted share options with rights to subscribe for 1,630,000 PYI Shares and 2,500,000 PYI Shares respectively at HK$1.5 per PYI Share (subject to adjustments) during the period from 28 December 2004 to 26 August 2012.

GENERAL INFORMATION

APPENDIX II

(iv) Burcon NutraScience Corporation (“Burcon”)

				No. of
				underlying
				shares
				(in respect of	Approximate %
				the share options	of the
			No. of	(unlisted equity	existing issued
Name of		Long position/	shares of	derivatives)) of	share capital
Director	Capacity	Short position	Burcon held	Burcon held	of Burcon
Chau Mei Wah,	Beneficial owner	Long position	321,074	–	1.31%
Rosanna
Chau Mei Wah,	Beneficial owner	Long position	–	61,000	0.25%
Rosanna

(v) Wing On Travel (Holdings) Limited (“Wing On”)

					No. of
					underlying
					shares	Approximate %
				(in respect of			of the
			No. of	unlisted equity		existing issued
Name of		Long position/	shares of	derivatives) of		share	capital
Director	Capacity	Short position	Wing On held	Wing On held		of Wing On
Dr. Chan	Interest of	Long position	135,740,481		–	22.23%
	controlled
	corporations
	(Note 1)
Dr. Chan	Interest of	Long position	–		379,746,835	62.19%
	controlled
	corporation
	(Note 1)
Dr. Chan	Beneficial owner	Long position	4,529,800		–		0.74%
Cheung Hon Kit	Beneficial owner	Long position	–		4,000,000		0.66%
					(Note 2)

Notes: 1. 11,406,000 shares of Wing On were held by an indirect wholly-owned subsidiary of ITC. 124,334,481 shares of Wing On were held by an indirect wholly-owned subsidiary of China Enterprises Limited (“CEL”) of which Group Dragon Investments Limited (“GDI”) indirectly owned approximately 55.22% of the effective equity interest. Hanny indirectly held approximately 98.92% of the existing issued share capital of GDI. ITC indirectly held approximately 67.23% of the existing issued share capital of Hanny. CEL held a convertible note in the principal amount of HK$300,000,000. Upon full conversion of such convertible note at an initial conversion price of HK$0.79 per share of Wing On (subject to adjustments), 379,746,835 shares of Wing On would be issued to CEL. By virtue of his deemed interests in approximately 34.33% of the existing issued ordinary share capital of ITC. Dr. Chan was deemed to be interested in these shares and underlying shares of Wing On.

On 22 June 2006, Mr. Cheung Hon Kit was granted share options with rights to subscribe for 4,000,000 shares of Wing On at HK$0.728 per share of Wing On (subject to adjustments) during the period from 22 June 2006 to 21 June 2008.

GENERAL INFORMATION

APPENDIX II

Hanny, Trasy, PYI, Burcon and Wing On are associated corporations of ITC within the meaning of Part XV of the SFO.

Dr. Chan was, by virtue of his deemed interest in approximately 34.33% of the existing issued ordinary share capital of ITC, deemed to be interested in the shares and underlying shares (in respect of equity derivatives), if any, of the associated corporations (within the meaning of Part XV of the SFO) of ITC held by the Group under Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executives of ITC had, under Divisions 7 and 8 of Part XV of the SFO, nor were they taken to or deemed to have under such provisions of the SFO, any interests and short positions in the shares, underlying shares or debentures of ITC or any associated corporations (within the meaning of Part XV of the SFO) which are required to be notified to ITC and the Stock Exchange or any interests which are required to be entered into the register kept by ITC pursuant to Section 352 of the SFO or any interests which are required to be notified to ITC and the Stock Exchange pursuant to the Model Code.

(B) Interests and short positions of substantial shareholders/other persons recorded in the register kept under the SFO

As at the Latest Practicable Date, so far as is known to the Directors, the following parties had an interest or short position in the Ordinary Shares and underlying shares of ITC which would fall to be disclosed to ITC under the provisions of Divisions 2 and 3 of Part XV of the SFO:

(a) Interests and short positions of substantial shareholders in Ordinary Shares and underlying shares of ITC

				Approximate %
				of the
			No. of	existing issued
		Long position/	Ordinary	ordinary share
Name	Capacity	Short position	Shares held	capital of ITC
Dr. Chan	Interest of controlled	Long position	642,939,242	34.33%
	corporation_(Note 1)_
Chinaview International	Interest of controlled	Long position	642,939,242	34.33%
Limited	corporation_(Note 1)_
Galaxyway Investments	Beneficial owner	Long position	642,939,242	34.33%
Limited	(Note 1)
Ng Yuen Lan, Macy	Interest of spouse	Long position	642,939,242	34.33%
	(Note 1)
PMA Capital	Investment manager	Long position	223,358,500	11.93%
Management Limited			(Note 2)

Notes: 1. Galaxyway Investments Limited is a wholly-owned subsidiary of Chinaview International Limited which is, in turn, wholly owned by Dr. Chan. Ms. Ng Yuen Lan, Macy is the spouse of Dr. Chan. Chinaview International Limited, Dr. Chan and Ms. Ng Yuen Lan, Macy were deemed to be interested in the Ordinary Shares held by Galaxyway Investments Limited.

So far as known to the Directors, Diversified Asian Strategies Fund is managed by PMA Capital Management Limited and the interests in the Ordinary Shares held by PMA Capital Management Limited include the Ordinary Shares held by Diversified Asian Strategies Fund as mentioned in the section headed “Interests and short positions of other persons in Ordinary Shares and underlying shares of ITC” in this Appendix.

GENERAL INFORMATION

APPENDIX II

(b) Interests and short positions of other persons in Ordinary Shares and underlying shares of ITC

				No. of
				underlying
				shares (in	Approximate %
				respect of	of the
			No. of	listed equity	existing issued
		Long position/	Ordinary	derivatives)	ordinary share
Name	Capacity	Short position	Shares held	of ITC held	capital of ITC
CEF Holdings Limited	Interest of controlled	Long position	2,773,046	–	0.15%
(“CEF Holdings”)	corporations_(Note)_
CEF Holdings	Interest of controlled	Long position	–	213,015,153	11.37%
	corporations_(Note)_
Canadian Imperial	Interest of controlled	Long position	2,773,046	–	0.15%
Bank of Commerce	corporations_(Note)_
Canadian Imperial	Interest of controlled	Long position	–	213,015,153	11.37%
Bank of Commerce	corporations_(Note)_
Cheung Kong	Interest of controlled	Long position	2,773,046	–	0.15%
(Holdings) Limited	corporations_(Note)_
(“CKH”)
CKH	Interest of controlled	Long position	–	213,015,153	11.37%
	corporations_(Note)_
Li Ka-Shing Unity	Trustee_(Note)_	Long position	2,773,046	–	0.15%
Trustee Company
Limited (“TUT1”)
TUT1	Trustee_(Note)_	Long position	–	213,015,153	11.37%
Li Ka-Shing Unity	Trustee & beneficiary	Long position	2,773,046	–	0.15%
Trustee Corporation	of a trust_(Note)_
Limited (“TDT1”)
TDT1	Trustee & beneficiary	Long position	–	213,015,153	11.37%
	of a trust_(Note)_
Li Ka-Shing Unity	Trustee & beneficiary	Long position	2,773,046	–	0.15%
Trustcorp Limited	of a trust_(Note)_
(“TDT2”)
TDT2	Trustee & beneficiary	Long position	–	213,015,153	11.37%
	of a trust_(Note)_
Li Ka-shing	Interest of controlled	Long position	2,773,046	–	0.15%
	corporations &
	founder of
	discretionary trusts
	(Note)

GENERAL INFORMATION

APPENDIX II

				No. of
				underlying
				shares (in	Approximate %
				respect of	of the
			No. of	listed equity	existing issued
		Long position/	Ordinary	derivatives)	ordinary share
Name	Capacity	Short position	Shares held	of ITC held	capital of ITC
Li Ka-shing	Interest of controlled	Long position	–	213,015,153	11.37%
	corporations &
	founder of
	discretionary
	trusts_(Note)_
Deutsche Bank	Security interest	Long position	201,438,795	–	10.75%
Aktiengesellschaft
Diversified Asian	Beneficial owner	Long position	104,156,194	–	5.56%
Strategies Fund

Note: So far as known to the Directors, the number of Ordinary Shares and underlying shares (in respect of listed equity derivatives) of ITC held by Asialand Investment Limited (“Asialand”) and CEF (Capital Markets) Limited (“CEF Capital Markets”) were 50,849,968 and 164,938,231 respectively. CEF Capital Markets was wholly owned by CEF Holdings. Asialand was wholly owned by CEF M B Investments Limited which was in turn wholly owned by CEF Holdings.

Each of CKH and CIBC Holdings (Cayman) Limited was entitled to exercise or control the exercise of one-third or more of the voting power at the general meetings of CEF Holdings. CIBC Holdings (Cayman) Limited was wholly owned by Canadian Imperial Bank of Commerce. CEF M B Investments Limited was deemed to be interested in the Ordinary Shares and/or underlying shares (in respect of listed equity derivatives) of ITC held by Asialand. CEF Holdings, CIBC Holdings (Cayman) Limited and Canadian Imperial Bank of Commerce were all deemed to be interested in the Ordinary Shares and underlying shares (in respect of listed equity derivatives) of ITC held by Asialand and CEF Capital Markets.

Li Ka-Shing Unity Holdings Limited, of which each of Mr. Li Ka-shing, Mr. Li Tzar Kuoi, Victor and Mr. Li Tzar Kai, Richard was interested in one-third of the entire issued share capital, owned the entire issued share capital of TUT1. TUT1 as trustee of The Li Ka-Shing Unity Trust, together with certain companies which TUT1 as trustee of The Li Ka-Shing Unity Trust was entitled to exercise or control the exercise of more than one-third of the voting power at their general meetings, held more than one-third of the issued share capital of CKH.

In addition, Li Ka-Shing Unity Holdings Limited also owned the entire issued share capital of TDT1 as trustee of The Li Ka-Shing Unity Discretionary Trust (“DT1”) and TDT2 as trustee of another discretionary trust (“DT2”). Each of TDT1 and TDT2 held units in The Li Ka-Shing Unity Trust.

By virtue of the SFO, each of Mr. Li Ka-shing being the settlor and may being regarded as a founder of each of DT1 and DT2 for the purpose of the SFO, CKH, TUT1, TDT1 and TDT2 was deemed to be interested in the Ordinary Shares and underlying shares (in respect of listed equity derivatives) of ITC held by Asialand and CEF Capital Markets.

GENERAL INFORMATION

APPENDIX II

(c) Substantial shareholding in the other members of the Group

As at the Latest Practicable Date, so far as is known to the Directors, the following parties, other than a Director, was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

		%of the
		issued share
Name of subsidiary	Name of shareholder	capital
Digital Communications Limited	Global 2000 Management	40%
	Limited
Hanny Investment Group Limited	Global Media Limited	35%
Sino Partner Holdings Limited	Tian Pu Jun	17%
China Telecom International Limited	China Telecom Investment	49%
	Corporation
Earnfull Industrial Limited	Wang Ming Jan	10%
Orion (B.V.I.) Tire Corporation	Coronada Holding Limited	40%
Orion Tire Corporation	Coronada Holding Limited	40%
Ruby Uniforms Limited	Poon Charn Ki, Frederick	10%

Save as disclosed above, the Directors are not aware that there is any party (not being a Director) who, as at the Latest Practicable Date, had an interest or short positions in the Ordinary Shares and underlying shares of ITC which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any options in respect of such shares.

GENERAL INFORMATION

APPENDIX II

3. DIRECTORS’ INTERESTS IN CONTRACTS, ASSETS AND COMPETING BUSINESSES

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

None of the Directors had any interest, direct or indirect, in any asset which have since 30 September 2006, being the date to which the latest published accounts of the Company were made up, up to the Latest Practicable Date, been acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by, or leased to any member of the Group.

As at the Latest Practicable Date, interests of the Directors in competing businesses which are required to be disclosed pursuant to Rule 8.10 of the Listing Rules were as follows:

		Description of
	Name of entity the	businesses of
	businesses of which are	the entity which are
	considered to compete or	considered to compete or
	likely to compete with	likely to compete with	Nature of interest
	the businesses of	the businesses of	of the Director
Name of Director	the Group	the Group	in the entity
Chan Fut Yan	Macau Prime Properties	Property investment in	As managing director
	Holdings Limited (“MPP”)	Hong Kong and
	and its subsidiaries	property development and
		trading in the PRC (excluding
		Hong Kong and Macau)
Cheung Hon Kit	MPP and its subsidiaries	Property investment in	As chairman
		Hong Kong and
		property development and
		trading in the PRC (excluding
		Hong Kong and Macau)
	Wing On and its subsidiaries	Property investment in	As managing director
		Hong Kong and
		property development
		in the PRC (excluding
		Hong Kong and Macau)
	China Development Limited	Property investment in	As a director and shareholder
		Hong Kong
	Artnos Limited	Property investment in	As a director and shareholder
		Hong Kong
	Co-Forward	Property investment in	As a director and shareholder
	Development Ltd.	Hong Kong
	Orient Centre Limited	Property investment in	As a shareholder
		Hong Kong
	Super Time Limited	Property investment in	As a director and shareholder
		Hong Kong
	Asia City Holdings Ltd.	Property investment in	As a director and shareholder
		Hong Kong
	Supreme Best Ltd.	Property investment in	As a shareholder
		Hong Kong

Save as disclosed above, none of the Directors nor their respective associates were interested in any business apart from the Group’s businesses which competes or is likely to compete, either directly or indirectly, with the Group’s businesses as at the Latest Practicable Date.

GENERAL INFORMATION

APPENDIX II

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into any existing or proposed service contracts with any member of the Group which is not determinable by the Group within one year without any payment of compensation, other than statutory compensation.

5. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, no litigation or claims which is in the opinion of the Directors of material importance was known to the Directors to be pending or threatened against any member of the Group.

MATERIAL CONTRACTS

The following are contracts (not being contracts entered into in the ordinary course of business) entered into by the Group within the two years preceding the date of this circular up to the Latest Practicable Date and which are or may be material:

The Group
(i) the contract notes for acquisition by Golden Hall Holdings Limited (“Golden Hall”), an indirect wholly-owned subsidiary of ITC, of 1,391,430,000 shares in Trasy at an aggregate consideration of HK$8,000,000 on 23 March 2005;
(ii) the mandate letter dated 23 March 2005 entered into between ITC and Somerley Limited and 16 forms of acceptance and transfer of a total of 177,251,139 shares in the capital of Trasy at the offer price of HK$0.00575 per Trasy share in relation to the unconditional mandatory cash offers by Somerley Limited on behalf of Golden Hall to acquire all the issued shares in, and for cancellation of all outstanding options to subscribe for shares of, Trasy, other than those already owned by Golden Hall and parties acting in concert with it;
(iii) the corporate guarantee dated 31 May 2005 executed by ITC in favour of a bank to secure 50% of the liabilities of Central Town Limited, an associated company of ITC, owing to the bank under the loan facilities of HK$112,000,000 from time to time up to the maximum amount of HK$56,000,000 (plus interest and other charges);
(iv) the loan agreement dated 28 July 2005 made between ITC Management Limited (“ITC Management”), an indirect wholly-owned subsidiary of ITC, and Hanny pursuant to which ITC Management agreed to grant to Hanny a loan facility in the principal amount of HK$120,000,000. The supplemental loan agreement dated 22 December 2005 between ITC Management and Hanny in relation to the increase of the loan facility by HK$10,000,000 from HK$120,000,000 to HK$130,000,000 and the second supplemental loan agreement between the same parties dated 28 March 2006 in relation to the further increase of the loan facility by HK$39,000,000 from HK$130,000,000 to HK$169,000,000;
(v) two loan agreements both dated 28 July 2005 made between ITC Management and Apex Quality Group Limited (“Apex”) and Hong Kong Wing On Travel Service Limited (“HK Wing On”) respectively pursuant to which ITC Management agreed to grant to Apex and HK Wing On loan facilities of HK$88,000,000 and HK$32,000,000 respectively;
(vi) the loan agreement dated 11 August 2005 made between ITC Management and See Corporation Limited (“SCL” formerly known as Ruili Holdings Limited) pursuant to which ITC Management agreed to grant to SCL a loan facility in the principal amount of HK$25,000,000. Pursuant to the supplemental agreement dated 28 February 2006 made between ITC Management and SCL, ITC Management has agreed with SCL to increase the loan facility by HK$84,000,000 from HK$25,000,000 to HK$109,000,000;
(vii) the placing agreement dated 28 September 2005 made between Macquarie Securities Limited, Hollyfield Group Limited (“Hollyfield”), an indirect wholly-owned subsidiary of ITC, and ITC in relation to the disposal of 150,000,000 PYI Shares at a price of HK$1.50 per PYI Share;

GENERAL INFORMATION

APPENDIX II

(viii) the confirmation for acquisition by Famex Investment Limited (“Famex”), an indirect wholly-owned subsidiary of ITC, of 11,000,000 shares of Hanny at an aggregate consideration of approximately HK$44,000,000 on 21 October 2005;
(ix) the placing agreement dated 9 February 2006 made between ITC, Hollyfield and BNP Paribas Peregrine Capital Limited in relation to the placing of 150,000,000 PYI Shares at a price of HK$1.78 per PYI Share;
(x) the placing agreement dated 15 February 2006 made between ITC and CLSA Limited in relation to the placement of in aggregate up to 214,400,000 Ordinary Shares at HK$0.72 per Ordinary Share on a best effort basis;
(xi) the conditional subscription agreement dated 27 June 2006 (as supplemented by a supplemental agreement dated 30 August 2006) made between ITC and Hanny in relation to the subscription of US$75 million (equivalent to approximately HK$582.5 million) convertible exchangeable notes of Hanny at face value. On 29 December 2006, Hanny and ITC entered into termination agreement to terminate the conditional subscription agreement;
(xii) the mandate letter dated 16 August 2006 entered into between Famex, ITC and Kingston Corporate Finance Limited, 71 forms of acceptance and transfer of a total of 53,080,585 shares of Hanny at the offer price of HK$3.8 per share of Hanny and 32 forms of acceptance and transfer of a total of HK$5,775,870 2% convertible bonds of Hanny due 2011 (the “Hanny Convertible Bonds”) at the offer price for each HK$15 face value of Hanny Convertible Bonds at HK$6.3334 in relation to conditional mandatory cash offers by Kingston Securities Limited (“Kingston Securities”) on behalf of Famex for all issued shares in Hanny and for all outstanding Hanny Convertible Bonds, other than those already owned or agreed to be acquired by Famex and parties acting in concert with it (except Cobbleford Limited);
(xiii) the loan facility letter dated 16 August 2006 (as supplemented by supplemental facility letters dated 25 August 2006, 29 August 2006, 31 August 2006, 9 November 2006 and 20 November 2006) entered into between Famex and Kingtson Securities pursuant to which Kingston Securities agreed to grant a loan facility of up to HK$600,000,000 to Famex in relation to the making of the offers as mentioned in (xii) above; and
(xiv) the sale and purchase agreement dated 17 August 2006 (as supplemented by supplemental agreements dated 28 August 2006 and 4 October 2006) entered into between Famex and Mr. Ma Ho Man, Hoffman in relation to the conditional acquisition of 22,812,359 shares of Hanny by Famex.
Hanny and its subsidiaries
(i) the subscription agreement dated 20 April 2005 entered into between Loyal Concept Limited, an indirect wholly-owned subsidiary of Hanny, and MPP (formerly known as Cheung Tai Hong Holdings Limited) in relation to the subscription by cash of HK$450 million convertible note due 2010 issued by MPP;
(ii) the underwriting agreement dated 21 April 2005 entered into between Hanny, SCL and Tai Fook Securities Company Limited in relation to the underwriting of a rights issue involving 1,615,668,333 rights shares of SCL at a price of HK$0.10 each, pursuant to which Hanny agreed to underwrite 320,000,000 rights shares of SCL;
(iii) the subscription agreement dated 21 April 2005 entered into between Hanny and SCL relating to the subscription of HK$170 million convertible note issued by SCL in cash;
(iv) the loan agreement dated 11 August 2005 entered into between Hanny and Kingston Finance Limited (“Kingston”) pursuant to which Kingston agreed to grant a loan facility of HK$400 million to Hanny;
(v) the deed of mortgage and assignment dated 11 August 2005 entered into between Well Orient Limited, an indirect wholly-owned subsidiary of Hanny, as the mortgagor and Kingston as the mortgagee in relation to the securities of China Strategic Holdings Limited for the purpose of securing the obligations of Hanny (as borrower) under the loan agreement mentioned in (iv) above;

GENERAL INFORMATION

APPENDIX II

(vi) the security assignment dated 11 August 2005 entered into between Loyal Concept Limited, an indirect wholly-owned subsidiary of Hanny, as the assignor and Kingston as the assignee in relation to the HK$450 million convertible note of MPP for the purpose of securing the obligations of Hanny (as borrower) under the loan agreement mentioned in (iv) above;
(vii) the deed of mortgage of shares dated 11 August 2005 entered into between Hanny as the mortgagor and Kingston as the mortgagee in relation to the securities in SCL for the purpose of securing the obligations of Hanny (as borrower) under the loan agreement mentioned in (iv) above;
(viii) the deed of security assignment dated 11 August 2005 entered into between Hanny as the assignor and Kingston as the assignee in relation to the HK$170 million convertible note of SCL for the purpose of securing the obligations of Hanny (as borrower) under the loan agreement mentioned in (iv) above;
(ix) the subscription agreement dated 18 August 2005 entered into between Hanny and Wo Kee Hong (Holdings) Limited (“WKH”) in respect of the subscription by Hanny of HK$30 million 7.25% convertible note due 2008 issued by WKH in cash;
(x) the disposal agreement dated 19 January 2006 entered into between Memorex International Inc. (“MII”), an indirect non wholly-owned subsidiary of Hanny, and Imation Corp. (“Imation”) relating to the disposal of MII’s business of the design, development, marketing, distribution and sale of hardware, media and accessories used for the storage of electronic data relating to the brand Memorex®. The aggregate cash consideration for the disposal was US$330,000,000, plus adjustments amount and earnout amount calculated in accordance with the terms of the disposal agreement.
(xi) the inducement agreement dated 19 January 2006 entered into, among others, Imation and Hanny, pursuant to which Hanny has, amongst other things, agreed to guarantee the performance of MII under the disposal agreement mentioned in (x) above;
(xii) the conditional sale and purchase agreement dated 9 March 2006 entered into between Best Position Limited, an indirect wholly-owned subsidiary of Hanny, and Asset Manage Limited relating to the acquisition of a 100% interests in Rapid Growth Profits Limited and the shareholders’ loan due from Island Town Limited at a consideration of HK$39,054,194, subject to adjustment. The consideration of the agreement was adjusted to HK$39,048,340;
(xiii) the conditional subscription agreement dated 23 March 2006 entered into between CEL, an indirect non wholly-owned subsidiary of Hanny, and Wing On, an associated company of Hanny, in relation to the subscription by CEL of the HK$300 million 2% convertible exchangeable notes due 2011 of Wing On which entitled the holders thereof to convert the outstanding principal into Wing On shares at the initial conversion price of HK$0.79 per share of Wing On;
(xiv) the underwriting agreement dated 22 April 2006 entered into between Hanny, SCL and Success Securities Limited in relation to the underwriting of the rights issue involving 10,771,122,220 rights shares of SCL at a price of HK$0.014 each, pursuant to which Hanny agreed to underwrite 329,037,330 rights shares of SCL;
(xv) the subscription agreement dated 27 April 2006 entered into between Hanny and MPP in relation to the subscription of HK$270 million 1% convertible note due 2011 issued by MPP in cash;
(xvi) the five conditional subscription agreements all dated 27 June 2006 (as supplemented by the supplemental agreements) entered into between Hanny and each of ITC and the other four subscribers in relation to the subscription of the convertible exchangeable notes of Hanny. On 29 December 2006, Hanny and each of ITC and the other four subscribers entered into termination agreement to terminate the conditional subscription agreement;
(xvii) the subscription agreement dated 28 June 2006 entered into between Hanny as the subscriber and Mei Ah Entertainment Group Limited (“Mei Ah”) as the issuer in respect of the subscription by Hanny of HK$50 million 4% convertible note due 2009 of Mei Ah in cash;

GENERAL INFORMATION

APPENDIX II

(xviii) the subscription agreement dated 10 July 2006 entered into between Quick Target Limited, an indirect wholly-owned subsidiary of Hanny, as the subscriber and Golden Harvest Entertainment (Holdings) Limited (“Golden Harvest”) as the issuer in respect of the subscription of HK$50 million 4% convertible note due 2008 of Golden Harvest in cash;
(xix) the conditional subscription agreement dated 29 August 2006 entered into between Hanny as subscriber and CEL in relation to the subscription of US$100 million (equivalent to approximately HK$776.6 million) 1% convertible notes due 2011 of CEL in cash. On 29 December 2006, Hanny and CEL entered into the termination agreement to terminate the conditional subscription agreement;
(xx) the conditional subscription agreement dated 19 January 2007 entered into between Improvemany International Limited, an indirect wholly-owned subsidiary of Hanny, as the subscriber and China Star Entertainment Limited as the issuer in respect of the subscription of HK$124.5 million zero coupon convertible bonds due 2012 in cash; and
(xxi) the underwriting agreement dated 6 March 2007 entered into between Hanny and SCL pursuant to which Hanny agreed to underwrite up to 367,047,620 rights shares of SCL at a price of HK$0.2 each.

PROCEDURE FOR DEMANDING A POLL

Pursuant to bye-law 79 of the bye-laws of ITC, at any general meeting a resolution put to the vote at the meeting shall be determined by a show of hands of members present in person or by a duly authorised corporate representative or by proxy entitled to vote unless voting by way of a poll is required by the rules of the designated Stock Exchange or a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) demanded:

(1) by the Chairman of the meeting; or
(2) by at least three (3) members present in person or by a duly authorised corporate representative or by proxy for the time being entitled to vote at the meeting; or
(3) by any member or members present in person or by a duly authorised corporate representative or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or
(4) by any member or members present in person or by a duly authorised corporate representative or by proxy and holding shares in ITC conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right; or
(5) if required by the rules of the designated Stock Exchange, by any Director or Directors who, individually or collectively, hold proxies in respect of shares representing five per cent. (5%) or more of the total voting rights at such meeting, and if on a show of hand a meeting votes in the opposite manner to that instructed in those proxies, provided that if it is apparent from the total proxies held that a vote taken on a poll shall not reverse the vote taken on a show of hands, then the Director or Directors shall not be required to demand a poll.

In accordance with the requirements of the Listing Rules, the results of the polls will be published by way of an announcement in the local newspapers on the business day following the meeting.

GENERAL

a. The secretary and the qualified accountant of ITC is Law Hon Wa, William, CPA, FCCA .
b. The registered office of ITC is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and the principal place of business of ITC in Hong Kong is at 30th Floor, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong.

GENERAL INFORMATION

APPENDIX II

c. The principal share registrar and transfer office of ITC is Butterfield Fund Services (Bermuda) Limited of Rosebank Centre, 11 Bermudiana Road, Pembroke, Bermuda and the branch share registrar and transfer office of ITC in Hong Kong is Secretaries Limited of 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
d. The English text of this circular and the accompanying form of proxy shall prevail over the Chinese text for the purpose of interpretation.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the office of Richards Butler at 20th Floor, Alexandra House, 16-20 Chater Road, Central, Hong Kong during normal business hours on any weekday (except public holidays) from the date of this circular up to and including the date of the SGM:

the memorandum of association and bye-laws of each of the Company;
the audited consolidated financial statements of each of the Company for each of the years ended 31 March 2005 and 2006;
the material contracts referred to in this appendix;
the following circulars issued by the Company pursuant to the requirements set out under Chapter 14 of the Listing Rules since 31 March 2006, being the date to which the latest published audited consolidated financial statements of the Group were made up:
a circular dated 16 February 2007 regarding a discloseable transaction in relation to the subscription of convertible bond of China Star Entertainment Limited by an indirect wholly owned subsidiary of Hanny;
a circular dated 20 October 2006 regarding a possible very substantial acquisition of shares in Hanny by Famex and possible conditional mandatory cash offers by Kingston Securities for and on behalf of Famex for all issued shares of Hanny and outstanding Hanny convertible Bonds (other than those already owned by or agreed to be acquired by Famex and parties acting in concert with it (except Cobbleford Limited); and
a circular dated 8 September 2006 regarding a major transaction in relation to the subscription of convertible notes of Hanny and a possible very substantial acquisition.

NOTICE OF SGM

==> picture [312 x 63] intentionally omitted <==

(Incorporated in Bermuda with limited liability)

(Stock code: 372)

NOTICE IS HEREBY GIVEN that a special general meeting of ITC Corporation Limited (the “Company”) will be held at Conference Room, 11th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong on Wednesday, 18 April 2007 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution, which will be proposed as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :–

(A) the disposal by the Company and/or its subsidiaries of shares of HK$0.10 each (each a “PYI Share”) in PYI Corporation Limited (“PYI”) from time to time when the conditions set out in paragraph (B) below can be satisfied and before the first anniversary of the date on which this resolution is passed be and is hereby approved and authorised;
(B) no disposal of PYI Shares pursuant to the authority granted under this ordinary resolution shall be made unless:–
(a) price per share at which such disposal is made shall be equal to or exceed HK$3 per PYI Share (subject to adjustments for share consolidation or share subdivision by PYI and such rounding as may be determined by the Directors in their discretion to take into account fractions of shares);
(b) all of the percentage ratios (as defined in and calculated as required by Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)) in respect of that disposal when aggregated with all other disposals then made or contracted for pursuant to the authority granted under this ordinary resolution are below 75%, calculated at the time of contract of each disposal;
(c) the PYI Shares to be disposed shall be to such person(s) who, to the best of the knowledge, information and belief of the directors of the Company (the “Directors”), having made all reasonable enquiries, to parties who are independent of the Company and any director, chief executive or substantial shareholder of the Company or its subsidiaries or any associate of any of them or any connected persons (as defined in the Listing Rules) of the Company; and
(d) the disposal is to be completed before first anniversary of the date on which this resolution is passed; and
(C) the Directors be and are hereby authorised to exercise all the powers of the Company and take all other steps as might in the opinion of the Directors be desirable or necessary in connection with the disposal, including without limitation, settling, approving or executing one or more agreements in connection with the disposal and generally to exercise all the powers of the Company as they deem desirable or necessary for the foregoing purpose.”

By Order of the Board ITC Corporation Limited Law Hon Wa, William Company Secretary

Hong Kong, 2 April 2007

NOTICE OF SGM

Registered Office Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal Place of Business in Hong Kong 30th Floor, Bank of America Tower 12 Harcourt Road Central Hong Kong

Notes:

Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to attend on the same occasion. A proxy need not be a member of the Company.
A form of proxy for the meeting is enclosed. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, together with such evidence as the board of Directors may require under the bye-laws of the Company shall be deposited at the Company’s principal place of business in Hong Kong at 30th Floor, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjourned meeting at which the person named in the instrument proposes to vote.

As at the date of this notice, the board of Directors comprised:–

Executive Directors

Dr. Chan Kwok Keung, Charles (Chairman) Ms. Chau Mei Wah, Rosanna (Deputy Chairman and Managing Director) Mr. Chan Kwok Chuen, Augustine Mr. Chan Fut Yan Mr. Cheung Hon Kit

Independent Non-executive Directors: Mr. Chuck, Winston Calptor Mr. Lee Kit Wah Hon. Shek Lai Him, Abraham, JP

AI assistant

Hopefluent Group Holdings Limited — Proxy Solicitation & Information Statement 2007

49433_rns_2007-04-03_ac4d4ac3-d2e0-496d-a3bb-ab92327a86e1.pdf

MAJOR TRANSACTION

POSSIBLE DISPOSALS OF SHARES IN

PYI CORPORATION LIMITED

Financial adviser

CONTENTS

DEFINITIONS

MAJOR TRANSACTION

POSSIBLE DISPOSALS OF SHARES IN

PYI CORPORATION LIMITED

INTRODUCTION

THE DISPOSAL

LETTER FROM THE BOARD

REASONS FOR THE DISPOSAL

FINANCIAL EFFECT OF THE DISPOSAL ON ITC

INFORMATION ON ITC

INFORMATION ON PYI

LETTER FROM THE BOARD

SGM

RECOMMENDATION

ADDITIONAL INFORMATION

1. THREE YEAR FINANCIAL SUMMARY

Results

2. AUDITED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET

APPENDIX I

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

APPENDIX I

CONSOLIDATED CASH FLOW STATEMENT

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

2. APPLICATION OF NEW/REVISED HONG KONG FINANCIAL REPORTING STANDARDS

Business Combinations

Goodwill

Intangible Assets

Impairment of Assets

Financial Instruments

Owner-occupied Leasehold Interest in Land

Investment Properties

3. SUMMARY OF THE EFFECTS OF THE CHANGES IN ACCOUNTING POLICIES

(i) On results

(ii) On income statement line items

4. SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

Business combinations achieved in stages

Property, plant and equipment

Investment properties

Interests in associates

Other intangible assets

Financial instruments

Financial assets

Financial assets at fair value through profit or loss

Loans and receivables

Available-for-sale financial assets

Financial liabilities and equity

Other financial liabilities

Convertible notes and redeemable convertible preference shares

Equity instruments

Derivative financial instruments

Derecognition

Gold bullion

Inventories

Impairment

Revenue recognition

Foreign currencies

APPENDIX I

Taxation

Retirement benefit costs

Borrowing costs

Leasing

The Group as lessor

The Group as lessee

5. KEY SOURCES OF ESTIMATION UNCERTAINTY

Impairment loss on trade debtors and loans receivable

6. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Hopefluent Group Holdings Limited Proxy Solicitation & Information Statement 2007