Imperium Financial Group Limited - Proxy Solicitation & Information Statement 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

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

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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(Proposed to be renamed as Sun International Group Limited )

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8029)

(I) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE PROPOSED ACQUISITION OF THE ENTIRE EQUITY INTEREST AND SHAREHOLDER’S LOAN OF SUPERB KINGS LIMITED; (II) PROPOSED REFRESHMENT OF CURRENT GENERAL MANDATES; (III) PROPOSED CHANGE OF COMPANY NAME; AND

(IV) NOTICE OF EGM

Financial adviser to the Galileo Holdings Limited

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

Grand Vinco Capital Limited

A notice convening the EGM to be held at 19th Floor, The Pemberton, 22-26 Bonham Strand, Sheung Wan, Hong Kong on Monday, 5 May 2008 at 4:00 p.m. is set out on pages 196 to 199 of this circular. Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

This circular will remain on the “Latest Company Announcements” page of the GEM website at www.hkgem.com for at least seven days from the date of its publication.

10 April 2008

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-to-date information on GEM-listed issuers.

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Page

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
Letter from Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		21
Letter from Vinco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		22
Appendix I –	Financial information of the Group . . . . . . . . . . . . . . . . . . . . .	28
Appendix II –	Financial information of Superb Kings. . . . . . . . . . . . . . . . . . .	85
Appendix III –	Financial information of companies acquired
	since the latest published audited accounts . . . . . . . . . . . . .	102
Appendix IV –	Valuation report on Superb Kings . . . . . . . . . . . . . . . . . . . . . .	149
Appendix V –	Property valuation report on the Enlarged Group. . . . . . . . . .	161
Appendix VI –	Unaudited pro forma financial information
	of the Enlarged Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	171
Appendix VII –	Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	182
Appendix VIII–	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	185
Notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		196

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DEFINITIONS

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

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|||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|“Acquisition”|the|proposed|acquisition|of|the|Sale|Shares|and|the|Sale|
|Loan|by|the|Purchaser|from|the|Vendor|subject|to|and|
|upon|the|terms|and|conditions|of|the|Agreements|
|“Agreements”|collectively,|the|Formal|Acquisition|Agreement|and|the|
|Supplemental|Agreement|
|“Announcement”|the|announcement|dated|11|December|2007|whereby|the|
|Company|announced,|among|other|matters,|the|
|Agreements|and|the|Acquisition|
|“Articles”|the|existing|articles|of|associations|of|the|Company|
|“associates”|has|the|meaning|ascribed|thereto|in|the|GEM|Listing|
|Rules|
|“Board”|the|board|of|Directors|
|“Business|Day”|a|day|(other|than|Saturday|and|Sunday)|on|which|
|licensed|banks|are|generally|open|for|business|in|Hong|
|Kong|throughout|their|normal|business|hours|
|“Change|of|Company|Name”|the|proposed|change|of|the|name|of|the|Company|from|
|“Galileo Holdings Limited|” to “Sun|
|International|Group|Limited|”|
|which|was|announced|on|21|December|2007|
|“Company”|Galileo|Holdings|Limited,|a|company|incorporated|in|the|
|Cayman|Islands|with|limited|liability,|the|issued|Shares|
|of|which|are|listed|on|GEM|
|“Completion”|completion|of|the|Acquisition|
|“connected|persons”|has|the|meaning|ascribed|thereto|in|the|GEM|Listing|
|Rules|
|“Consideration”|the|total|consideration|of|HK$205,000,000|payable|by|
|the|Company|for|the|acquisition|of|the|Sale|Shares|and|
|the|Sale|Loan|

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– 1 –

DEFINITIONS

“Consideration Shares”	105,000,000 Shares to be issued upon Completion
	pursuant to the Agreements
“Current General Mandates”	the general mandates granted by the Shareholders on 28
	September 2007 authorizing the Directors to allot and
	issue Shares of up to 20% and to repurchase Shares of up
	to 10% of the issued share capital of the Company as at
	the date of passing the relevant ordinary resolution
“Deposit”	HK$44,750,000 paid by the Purchaser to the Vendor in
	cash as deposit upon the signing the Formal Acquisition
	Agreement
“Directors”	directors of the Company
“EGM”	the extraordinary general meeting of the Company to be
	convened to consider and, if thought fit, approve the
	Agreements and the transactions contemplated
	thereunder, the Change of Company Name, and the
	refreshment of the Current General Mandates
“Enlarged Group”	the Group as enlarged by completion of the Acquisition
“Formal Acquisition Agreement”	an agreement dated 26 November 2007 entered into
	among the Purchaser and the Vendor in respect of the
	Acquisition
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Grant Sherman”	Grant Sherman Appraisal Limited, a professional firm of
	valuers appointed by the Company to provide a valuation
	report on Superb Kings Limited and a valuation report on
	real property of the Enlarged Group
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC

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DEFINITIONS

“Independent Board Committee”	a committee of the Board, comprising Mr. Siu Hi Lam,
	Alick, Mr. Kwok Kwan Hung and Mr. Chien Hoe Yong,
	being the independent non-executive Directors,
	constituted to advise the Independent Shareholders on the
	refreshment of the Current General Mandate
“Independent Shareholders”	Shareholders other than Mr. Chui Bing Sun, Mr. Lee Chi
	Shing, Caesar, Mr. Chau Cheok Wa and their respective
	associates
“Independent Third Party(ies)”	the third party(ies) independent of the Company and
	its/their connected persons as defined in the GEM Listing
	Rules
“Issue Price”	HK$1.10 per Consideration Share
“Land”	a parcel of land, whose size is approximately 20,832
	sq.m., located at Barangay San Vicente, Municipality of
	Sta. Ana, Province of Cagayan
“Last Trading Day”	26 November 2007, being the last trading day of the
	Shares prior to the release of the Announcement
“Latest Practicable Date”	7 April 2008, being the latest practicable date for the
	purpose of ascertaining certain information contained in
	this circular
“Management Account Date”	24 November 2007
“MOU”	the non-legally binding memorandum of understanding
	entered into by the Purchaser and the Vendor on 11
	October 2007 (after trading hours) in respect of the
	Acquisition
“New Issue Mandate”	the mandate proposed to be granted to the Directors at the
	EGM to allot, issue and otherwise deal with additional
	Shares not exceeding 20% of the issued share capital of
	the Company as at the date of the EGM
“PHP”	Pesos, the lawful currency of Philippines
“PRC”	the People’s Republic of China which, excludes Hong
	Kong, the Macau Special Administrative Region of the
	People’s Republic of China and Taiwan

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DEFINITIONS

“Prestigious and Leisure Resort” the prestigious and leisure resort to be established by Superb Kings on the Land in Cagayan Valley in the Philippines
“Purchaser” Galileo Capital Group (BVI) Limited, a company incorporated in British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company
“Sale Loan” being all obligations, liabilities and debts owing or incurred by Superb Kings to the Vendor due and payable on or at any time prior to the Completion, and amounted to HK$31,202,468.57, as at the Management Account Date of Superb Kings
“Sale Shares” 50,000 issued shares of Superb Kings with a par value of US$1.00 each , representing the entire issued share capital of Superb Kings
“SFO” the Securities and Futures Ordinaries (Chapter 571 of the Laws of Hong Kong)
“Share(s)” ordinary share(s) of HK$0.02 each in the share capital of the Company
“Shareholder(s)” holder(s) of the Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “Superb Kings” Superb Kings Limited, a company incorporated in the British Virgin Islands with limited liability and is wholly and beneficially owned by the Vendor
“Supplemental Agreement” an supplemental agreement dated 10 December 2007 entered into among the Purchaser and the Vendor in respect of the Acquisition
“Vendor” Mr. Yeung Hak Kan, an Independent Third Party

– 4 –

DEFINITIONS

“Vinco”

Grand Vinco Capital Limited, a licensed corporation to carry on business in type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the refreshment of the Current General Mandates

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“k.m.” kilometers “sq.m.” square metres “%” per cent.

For illustrative purpose, the circular contains translation between HK$ and PHP at HK$1.00 = PHP5.6 unless defined otherwise. The translation should not be taken as a representation that the relevant currency could actually be converted into HK$ at that rate or at all.

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LETTER FROM THE BOARD

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(Proposed to be renamed as Sun International Group Limited )

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8029)

Executive Directors:

Mr. Chui Bing Sun (Chairman) Mr. Chau Cheok Wa (Vice Chairman) Mr. Lee Chi Shing, Caesar

Independent non-executive Directors:

Mr. Siu Hi Lam, Alick Mr. Kwok Kwan Hung Mr. Chien Hoe Yong

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business: 21st Floor The Pemberton 22-26 Bonham Strand Sheung Wan Hong Kong 10 April 2008

To the Shareholders

Dear Sir or Madam,

(I) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE PROPOSED ACQUISITION OF THE ENTIRE EQUITY INTEREST AND SHAREHOLDER’S LOAN OF SUPERB KINGS LIMITED; (II) PROPOSED REFRESHMENT OF CURRENT GENERAL MANDATES; (III) PROPOSED CHANGE OF COMPANY NAME; AND (IV) NOTICE OF EGM

INTRODUCTION

It was announced that on 11 October 2007 the Company entered into the non-binding MOU with the Vendor in relation to the intended acquisition of 50% of the entire issued share capital of Superb Kings, which in turn would be investing in the establishment of the Prestigious and Leisure Resort in Cagayan Valley in the Philippines. After further consideration and in view of the great potential of the tourist industry of the Philippines, the Board decided to purchase the entire issued share capital of Superb Kings (i.e. the Sale Shares), as well as the shareholder’s loan (i.e. the Sale Loan) owed by Superb Kings to the Vendor.

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LETTER FROM THE BOARD

On 11 December 2007, the Company announced that the Formal Acquisition Agreement and the Supplemental Agreement were entered into between the Purchaser and the Vendor, pursuant to which the Purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose the Sale Shares, and the Sale Loan from the Vendor for a total consideration of HK$205,000,000. The consideration shall be satisfied by the Purchaser as to (i) HK$115,500,000 by procuring the Company to allot and issue the Consideration Shares on Completion; (ii) HK$44,750,000 in cash as deposit upon signing of the Formal Acquisition Agreement; and (iii) HK$44,750,000 in cash on Completion. The principal terms of the Agreements are set out below in this circular.

The Agreements and the transactions contemplated thereunder (including but not limited to the allotment and issue of the Consideration Shares) constitute a very substantial acquisition on part of the Company under Chapter 19 of the GEM Listing Rules, and is subject to the approval by the Shareholders at the EGM. The EGM will be convened to consider and, if thought fit, approve, among other things, the Agreements and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Vendor does not hold any Shares as at the date of this circular and no Shareholder has a material interest in the Agreements, and therefore no Shareholder is required to abstain from voting on the resolution to approve the Agreements and the transactions contemplated thereunder at the EGM.

The Board proposed the Change of Company Name in order to give a refreshed image of the Company and the refreshment of the Current General Mandate (as defined below) to allow more flexibility in fund-raising by the Company in future.

The purpose of this circular is to provide you with, among other things, (i) the details of the Agreements, financial and other information on the Group, the valuation report of Superb Kings prepared by an independent valuer; (ii) the details of the refreshment of Current General Mandate; (iii) the details of the Change of Company Name; and (iv) the notice convening the EGM.

(I) THE FORMAL ACQUISITION AGREEMENT AND SUPPLEMENTAL AGREEMENT

Date

26 November 2007 (for the Formal Acquisition Agreement) and 10 December 2007 (for the Supplemental Agreement)

Parties

Purchaser: the Purchaser

Vendor: the Vendor, who, to the best knowledge, information and belief of the Directors, having made all reasonable enquiries, is an Independent Third Party.

Assets to be acquired

The Sale Shares and the Sale Loan. Further information on Superb Kings is set out under the section headed “INFORMATION ON SUPERB KINGS” in this circular.

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LETTER FROM THE BOARD

Consideration and basis of the Consideration

The Consideration shall be satisfied by the Purchaser in the following manners:

(i) HK$115,500,000 shall be satisfied by the Purchaser procuring the Company to allot and issue the Consideration Shares to the Vendor at the Issue Price credited as fully paid on Completion;
(ii) HK$44,750,000 in cash by the Purchaser to the Vendor as the Deposit; and
(iii) HK$44,750,000 in cash by the Purchaser to the Vendor on Completion.

The Consideration had been determined after arm’s length negotiation between the Purchaser and the Vendor with reference to, inter alia, (i) the overall future prospect in hotel and tourism business in Cagayan Valley of the Philippines and the business prospects of Superb Kings; (ii) the estimated value of the Prestigious and Leisure Resort taking into account the face value of the Sale Loan and the undertaking given by the Vendor in respect of the balance of the construction and decoration cost of Prestigious and Leisure Resort; (iii) the opportunity for the Group to expand its business scope into hotel business in Philippines; (iv) the total estimated cost of approximately PHP610,400,000 (representing approximately HK$109 million) in connection with the construction, development, decoration or refurbishment of the Prestigious and Leisure Resort as at the date of the Formal Acquisition Agreement; and (v) the actual cash outlay is HK$89,500,000 whereas part of the consideration of HK$115,500,000 will be settled by the issue of the Consideration Shares.

As at the Latest Practicable Date, the total cost of construction, development, decoration or refurbishment of Prestigious and Leisure Resort incurred of approximately HK$67.35 million.

Based on the closing price of HK$1.58 per Share on the date of the Formal Acquisition Agreement and the Supplemental Agreement, the 105,000,000 Consideration Shares would be valued at HK$165.9 million and therefore the total consideration for the Acquisition would have been HK$255.4 million.

The cash portion of HK$89,500,000 for the Acquisition will be funded by internal cash resource of the Company.

The Issue Price of the Consideration Shares of HK$1.10 represents:

a discount of approximately 30.38% to the closing price of HK$1.58 per Share as quoted on the Stock Exchange on the Last Trading Date;
a discount of approximately 29.49% to the average of the closing prices of HK$1.56 per Share for the 5 consecutive trading days up to and including the Last Trading Date;

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LETTER FROM THE BOARD

a discount of approximately 25.67% to the average of the closing prices of HK$1.48 per Share for the 30 consecutive trading days up to and including the Last Trading Date;
a premium of approximately 10.00% over the average of the closing prices of HK$1.00 per Share for the 90 consecutive trading days up to and including the Last Trading Date; and
a premium of approximately 41.03% over the closing price of HK$0.78 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

The 105,000,000 Consideration Shares represent approximately 6.71% of the existing issued share capital of the Company as at the Latest Practicable Date and approximately 5.29% of the issued share capital of the Company as enlarged by the issue and allotment of the Consideration Shares.

An application will be made to the Stock Exchange for the listing of and permission to deal in the Consideration Shares, which, when issued, will rank pari passu in all material respects with the then existing issued Shares.

Conditions precedent

The Purchaser shall procure that its agents shall forthwith upon the signing of the Formal Acquisition Agreement conduct such review of the assets, liabilities, operations and affairs of Superb Kings as it may reasonably consider appropriate and the Vendor shall provide and procure Superb Kings and their agents to provide such assistance as the Purchaser or its agents may reasonably require in connection with such review.

The Agreements are conditional upon:

the Purchaser being satisfied with the results of the due diligence review to be conducted;
all approvals, consents, authorisations and licenses (so far as necessary) required to be obtained on the part of the Vendor or the Purchaser in relation to the transactions contemplated under the Agreements having been obtained;
the warranties given by the Vendor and Purchaser as set out in the Agreements remaining true and accurate in all respects;
the passing by the Shareholders at the EGM to be convened and held of an ordinary resolution to approve the Agreements and the transactions contemplated thereunder, including but not limited to the allotment and issue of the Consideration Shares to the Vendor, credited as fully paid at the Issue Price; and
the GEM Listing Committee of the Stock Exchange granting listing of and permission to deal in the Consideration Shares.

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LETTER FROM THE BOARD

The Vendor shall use its best endeavours to assist the Purchaser in connection with the due diligence review to be conducted and procure the fulfillment of the conditions set out herein.

As at the Latest Practicable Date, the condition 2 above has been fulfilled.

Pursuant to the Formal Acquisition Agreement, if any of the conditions set out above has not been satisfied (or, as the case may be, waived by the Purchaser) on or before 12:00 noon on the date falling 90 days from the date of the Formal Acquisition Agreement (the “Long Stop Date”) or such later date as the Vendor and the Purchaser may agree, the Vendor shall forthwith refund the Deposit, without interest, to the Purchaser and the Agreements shall cease and determine and neither party hereto shall have any obligations and liabilities hereunder save for any antecedent breaches of the terms hereof.

Given the Acquisition has not been completed in the agreed period pursuant to the Formal Acquisition Agreement, i.e. 90 days from the date of the Formal Acquisition Agreement which was 26 February 2008, the Long Stop Date is therefore extended to 30 June 2008 and such agreement has been duly approved and has been signed between the Vendor and the Purchaser on 31 March 2008.

Completion

Completion shall take place on the third Business Day after the conditions precedent stated above have been fulfilled, or waived by the Purchaser (as the case may be).

If Completion does not take place as a result of the sole default of the Purchaser, the Vendor shall be entitled to forfeit the Deposit and may forthwith determine the Agreements by giving notice of termination in writing to the Purchaser to such effect, in which event neither party shall have any obligations and liabilities hereunder.

If Completion does not take place as a result of the sole default of the Vendor, the Purchaser may forthwith determine the Agreements by giving notice of termination in writing to the Vendor to such effect, in which event, the Vendor shall forthwith refund to the Purchaser the Deposit, without interest, together with a sum of equivalent to the Deposit as liquidated damages for compensation of the Purchaser, and thereafter neither party shall have any obligations and liabilities hereunder.

Undertaking given by the Vendor

The Vendor undertakes and warrants to the Purchaser that, from Completion and for a period of one year from date of Completion, it will not offer, lend, sell, contract to sell, pledge, grant any option to purchase or otherwise dispose of, any of the Consideration Shares or enter into a transaction (including a derivative transaction) having an economic effect similar to that of a sale or enter into any swap or similar agreement that transfers, in whole or in part, the economic risk of ownership of any of the Consideration Shares, whether any such transaction

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LETTER FROM THE BOARD

described above is to be settled by delivery of any of the Consideration Shares, in cash or otherwise or publicly announce any intention to offer, lend, sell, pledge, contract to sell, grant any option to purchase or otherwise dispose of, any of the Consideration Shares or enter into by any swap or similar agreement described above or deposit any of the Consideration Shares in any depository receipt facility, without prior written consent of the Purchaser.

INFORMATION ON SUPERB KINGS

Superb Kings was incorporated in the British Virgin Islands on 6 July 2007 and is principally engaged in investment holding business. Its major asset is the leasing agreement entered into with First Cagayan Leisure and Resort Corporation for a term of 25 years in relation to the utilization of the Land for the development of the Prestigious and Leisure Resort. Superb Kings had also entered into construction contracts with CAMJ Construction Inc. to construct the Prestigious and Leisure Resort on the Land. Upon the expiration of the 25-year leasing terms, the leasing agreement will either be terminated or renewed under the terms and conditions as may be mutually agreed upon by the parties. During the 25-year leasing term, Superb Kings has the beneficial ownership of the Prestigious and Leisure Resort. Once the leasing agreement is terminated, all the improvements built on the Land (including the Prestigious and Leisure Resort) will be owned by First Cagayan Leisure and Resort Corporation. To the best of Directors’ knowledge, information and belief CAMJ Construction Inc. and First Cagayan Leisure and Resort Corporation are both Independent Third Parties.

As the Prestigious and Leisure Resort is under construction, the estimated total costs to be incurred for completion of the construction of the Prestigious and Leisure Resort are approximately PHP377.16 million (representing approximately HK$67.35 million) as at the Latest Practicable Date. The Vendor undertakes to and covenants with the Purchaser that he will on behalf of Superb Kings fully pay all costs, fees, expenses, liabilities and obligations in relation to or in connection with the construction, development, decoration or refurbishment of the Prestigious and Leisure Resort or any part thereof, including but not limited to (i) the outstanding payments under the construction contracts entered into with CAMJ Construction Inc. and (ii) expenses to be incurred by Superb Kings for all kinds of facilities, furniture, fixtures and equipments to be affixed or placed in Prestigious and Leisure Resort or any part thereof. And that immediately upon such payment, the Vendor will waive and discharge Superb Kings from the obligations and liabilities to repay to the Vendor for such construction costs settled by the Vendor on behalf of Superb Kings.

According to the Vendor, other than Cebu of the Philippines, Cagayan Valley will be a new development area for entertainment and leisure tourism. Cagayan Valley is located in the northern end of the Philippines, which has a consistent climate and a beach shore of as long as one k.m. In early 2007, a large-scale entertainment facility has been established in Cagayan Valley by an Independent Third Party in view of the new direction of tourism development. The results of the operation of such entertainment facility have been better than expected whereas accommodations in Cagayan valley were insufficient to meet the needs.

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LETTER FROM THE BOARD

According to the Board’s presentation, an international airport will be constructed in Cagayan Valley in 2008. It will greatly improve the transportation network and encourage it to be a fast growing tourist centre in South East Asia. It is intended that the Prestigious and Leisure Resort will offer extensive leisure facilities, which include various water sports such as jet skiing, water skiing, scuba diving, yachting and fishing, and indoor/outdoor swimming pool. The constructions of Prestigious and Leisure Resort is divided in three stages. The first phase development will be completed in April 2008 when the Prestigious and Leisure Resort can offer approximately 245 rooms for accommodations whereas the second and/or final phase of development is anticipated to be commenced in year 2008 when the Directors consider appropriate. The second and/or final phase development of the Prestigious and Leisure Resort will have the full capacity to offer services of over 250 rooms for accommodations and all entertainment facilities, including the recreation centre nearby the resort. According to the Board, the first phase development of the Prestigious and Leisure Resort has not been completed at the Latest Practicable Date.

On 2 February 2008, Superb Kings has entered into a lease agreement with Succeed Asia Pacific Company, Ltd. (the “Lessee”), an Independent Third Party (the “Hotel Agreement”). Pursuant to which the 245 rooms of the Prestigious and Leisure Resort shall be reserved by Lessee exclusively for a terms of two years beginning from April 2008 to March 2010 at approximately US$27,250 per day for all 245 rooms (equivalent to approximately HK$212,550 per day) or approximately US$9,940,000 per year (equivalent to approximately HK$77.6 million per year). Lessee agreed to pay for the rent whether the designated 245 rooms are actually occupied by the Lessee. The Hotel Agreement may be renewed upon expiration which shall not exceed 25 years in total and the annual increase in rental should not exceed 10%. To the best of knowledge of Directors, the Lessee is principally engaged in package tours, travel and related services.

As set out in Appendix II to this circular, the audited financial results of Superb Kings, prepared in accordance with Hong Kong Financial Reporting Standards, for the financial period from 6 July 2007 (being the date of incorporation) to 31 December 2007 showed that the net liabilities was approximately HK$85,237 as at 31 December 2007. Since Superb Kings has not commenced business as at the Latest Practicable Date, no income has been recorded and the net loss was approximately PHP2,661,327 million (representing approximately HK$475,237) for the period from 6 July 2007 to 31 December 2007.

REASONS FOR THE ACQUISITION AND FUTURE PROSPECT

The Group is principally engaged in (i) the provision of funeral services on various funeral customs and activities; (ii) the provision of business consultancy services to assist clients on various business or management issues; and (iii) the provision of computer system and related services of its customers in relation to the on-line entertainment and gaming activities.

Having considered and reviewed the existing operation and financial position of the Group, the Board has always been active in seeking opportunities to diversify the Group’s revenue streams in order to enhance shareholder’s returns and the investment value of the Group. Beside the acquisition of the Loyal King Investments Limited which enables the Group to explore into the market for computer systems and related services, the Directors are attracted by the future prospect of tourism development and are optimistic about the prospect of the hotel and tourism business in Cagayan Valley of the Philippines as they believe that the demand

– 12 –

LETTER FROM THE BOARD

for accommodations and entertainment facilities will continue to grow in the near future. The Board is of the view that the Acquisition will be an valuable opportunity for the Company to tap into the hotel industry while to increase the value of the Company, which are in the interests of the Company and the Shareholders as a whole. Furthermore, according to the Philippine Business Report issued by the Trade and Industry Information Center, Department of Trade and Industry of the Philippines, the statistics has shown that 2.5 million foreign tourists visited the country in 2006, an increase of 8.8% from 2005. The Philippine’s government has set a target of at least 5 million tourist arrivals by 2010. With the support by the Philippine’s government in developing tourism business, the Directors consider that the Acquisition will enable the Group to capture potential opportunities in hotel business in the Philippines and to explore investment opportunity to strengthen the business profile of the Group. Save for the Company may invite person(s) who has substantial experience in the hotel business joining the Board to participate in the management of the newly acquired business, there will not be change in board composition or change in control of the Company as a result of the Acquisition. Having taken into account the above reasons, the Directors consider that the Acquisition and the terms of the Agreements are fair and reasonable so far as the Company and the Shareholders are concerned.

FINANCIAL EFFECTS ON THE GROUP

Upon Completion, Superb Kings will become indirect wholly-owned subsidiary of the Company and its accounts will be consolidated into the Group. The Group had an audited net assets value of approximately HK$64,462,124 as at 30 September 2007 and unaudited net assets value of approximately HK$219,021,154 after the completion of the acquisition of Loyal King Investments Limited as detailed in section iv under Appendix III to this circular. According to the unaudited pro forma consolidated balance sheet of the Enlarged Group as disclosed in Appendix VI to this circular, assuming the Acquisition took place on 30 September 2007, the net assets value of the Group will increase from approximately HK$219,021,154 to approximately HK$391,221,154. As such, the net assets value per Share will increase from approximately HK$0.0055 as at 31 March 2007 to approximately HK$0.2342 per Shares based on the total number of issued Shares as enlarged by the Consideration Shares (calculated as the pro forma net asset value of the Enlarged Group of HK$391,221,154 divided by the number of issued Shares of 1,670,450,000 as enlarged by the Consideration Shares). Given Superb Kings has not commenced business as at the date of the unaudited pro forma consolidated income statement for the Enlarged Group, there will be no material financial effect to the Group upon Completion.

The pro forma financial information of the Enlarged Group has been prepared and set out in Appendix VI to this circular to provide detail to the Shareholders.

FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

The Group is principally engaged in the provision of funeral services on various funeral customs and activities and the provision of business consultancy services to assist clients on various business or management issue. Following the acquisition of Loyal King Investments Limited, the Group has diversified in engaging in the provision of computer system and related services of its customers in relation to the on-line entertainment and gaming activities. It is generally believed that the ageing population and increasing death rate have driven the demand growth of funeral services in Hong Kong, and therefore, the management intends to continue the existing business of the funeral service businesses in the PRC and Hong Kong.

As stated in the September 2007 interim report of the Company, the Board has been seeking opportunities to diversify the Group’s income stream in order to enhance Shareholders’

– 13 –

LETTER FROM THE BOARD

value. To align with the initiative to diversify the income stream of the Group, the Board has acquired information technology related business and, through the Acquisition, the hotel and tourism business. The Board is optimistic about the expansion of the Company’s business will contribute a new stable income stream to the Group in the long run.

IMPLICATIONS UNDER THE GEM LISTING RULES FOR THE ACQUISITION

The Agreements and the transactions contemplated thereunder (including but not limited to the allotment and issue of Consideration Shares) constitute a very substantial acquisition on part of the Company under Chapter 19 of the GEM Listing Rules, and is subject to the approval by the Shareholders at the EGM. The EGM will be convened to consider and, if thought fit, approve, among other things, the Agreements and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Vendor does not hold any Shares as at the Latest Practicable Date and no Shareholder has a material interest in the Agreements, and therefore no Shareholder is required to abstain from voting on the resolution to approve the Agreements and the transactions contemplated thereunder at the EGM.

(II) PROPOSED REFRESHMENT OF CURRENT GENERAL MANDATES

Since the general mandate was granted to the Directors to issue and to allot 194,700,000 Shares, which were issued and allotted pursuant to a placing dated 20 August 2007, at the annual general meeting of the Company held on 2 August 2007, the Shareholders approved an ordinary resolution to grant to the Directors the general mandates to allot up to 239,640,000 Shares and to repurchase up to 119,820,000 Shares under the Current General Mandates at the extraordinary general meeting of the Company held on 28 September 2007.

As set out in the announcement of the Company 16 October 2007, the Company had utilized, through a placing, 80,000,000 Shares under the Current General Mandates to the independent investors.

The mandate granted to the Directors to issue Shares at the extraordinary general meeting was utilized as to approximately 33.38% of the Current General Mandates as a result of completion of the placing of 80,000,000 new Shares. The Company wishes to seek approval of Shareholders at the EGM to refresh the Current General Mandates in order to allow the flexibility for future business development and/or fund raising.

At the EGM, resolutions will be proposed to:

(1) refresh the general and unconditional mandate authorising the Directors to exercise all powers of the Company to issue new Shares up to 20% of the issued share capital of the Company on the date of the EGM;
(2) refresh the general and unconditional mandate authorising the Directors to exercise all powers of the Company to repurchase Shares on GEM up to a maximum of 10% of the issued share capital of the Company on the date of the EGM; and
(3) by a separate ordinary resolution, extend the general and unconditional mandate referred to in (1) above so that the Directors be given a general mandate to issue further Shares equal to the Shares repurchased under the repurchase mandate referred to in (2) above.

– 14 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, the Company has 1,565,450,000 Shares currently in issue and assuming there is no change in the issued share capital until the date of the EGM, the maximum number of Shares that can be issued under the New Issue Mandate are 313,090,000 Shares and to repurchase Shares up to 156,545,000 Shares.

Each of the general mandates would continue in force until whichever is the earliest of:

(a) the conclusion of the next annual general meeting of the Company;
(b) the expiration of the period within which the next annual general meeting of the Company is required by any applicable law of the Cayman Islands or the Articles of Association to be held; or
(c) the date on which any such mandate is revoked or varied by an ordinary resolution of the Shareholders in a general meeting.

EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Set out below are the fund raising activities conducted by the Company in the past twelve months prior to the Latest Practicable Date.

				Actual use of
				proceeds as at
Date of initial		Net proceeds	Intended use of	the Latest
announcement	Description	(approximately)	proceeds	Practicable Date
16 October 2007	Placing of	HK$123.2 million	Use for general	HK$44.75 million
	80,000,000 Shares		working capital	has been utilized
	at a price of		and/or possible	for the Deposit in
	HK$1.58 per		future	respect of the
	Share		investments in a	Acquisition and
			prestigious and	the remaining
			leisure resort in	balance of the net
			Cagayan Valley	proceeds will be
				used as intended
20 August 2007	Top-up placing of	HK$52.1 million	Use for general	The net proceeds
	194,700,000		working capital	has been utilized
	Shares at a price			as intended
	of HK$0.275 per
	Share

Save for disclosed herein, the Company has not conducted any equity fund raising activities in the past twelve months immediately preceding the Latest Practicable Date.

– 15 –

LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE

The effect on the shareholding structure of the Company assuming (i) the full utilisation of the New Issue Mandate; and (ii) the issue and allotment of the Consideration Shares issued pursuant to the Agreements, which are subject to the Shareholders’ approval at the EGM, are illustrated below:

New Brilliant Investments Ltd. (Note 1) Premier United Limited (Note 2) First Cheer Holdings Limited (Note 3) Mr. Lee Chi Shing, Caesar (Note 4) Public Shareholders The Vendor Shares issued under New Issue Mandate Others Total	As at the Latest Practicable Date (Number of Shares) % 292,900,000 18.71 190,000,000 12.14 280,000,000 17.89 1,000,000 0.06 – – – – 801,550,000 51.20 1,565,450,000 100.00	Upon full utilization of the New Issue Mandate (Number of Shares) % 292,900,000 15.59 190,000,000 10.11 280,000,000 14.91 1,000,000 0.05 – – 313,090,000 16.67 801,550,000 42.67 1,878,540,000 100.00	Upon full utilization of the New Issue Mandate and immediately after the allotment and issue of Consideration Share (Number of Shares) % 292,900,000 14.77 190,000,000 9.58 280,000,000 14.12 1,000,000 0.05 105,000,000 5.29 313,090,000 15.78 801,550,000 40.41 1,983,540,000 100.00	Upon full utilization of the New Issue Mandate and immediately after the allotment and issue of Consideration Share (Number of Shares) % 292,900,000 14.77 190,000,000 9.58 280,000,000 14.12 1,000,000 0.05 105,000,000 5.29 313,090,000 15.78 801,550,000 40.41 1,983,540,000 100.00
				100.00

Notes:

1 New Brilliant Investments Ltd. is a company beneficially owned as to 80% by 20/20 International Limited and as to 20% by Ms. Zhang Ze Mei, the mother of Mr. Chui Bing Sun, a Director. Mr. Chui Bing Sun beneficially owns 70.4% of the issued shares of 20/20 International Limited and Ms. Zhang Ze Mei holds the remaining 29.6% of the issued shares of 20/20 International Limited.
2 Premier United Limited is a company beneficially owned by Mr. Chan Ping Che and Ms. Lam Shiu May in equal shares. Other than 190,000,000 Shares beneficially owned by Mr. Chan Ping Che and Ms. Lam Shiu May as at the Latest Practicable Date, they are Independent Third Parties.
3 First Cheer Holdings Limited is a company beneficially owned as to 45% by Mr. Cheng Ting Kong, as to 45% by Mr. Chau Cheok Wa, the Director, and as to 10% by Mr. Lai Ting Kwong.
Mr. Lee Chi Shing, Caesar is the executive Director.

– 16 –

LETTER FROM THE BOARD

Save for the 125,850,000 outstanding share options, there are no other outstanding options, warrants or securities convertible into the Shares or other securities of the Company as at the Latest Practicable Date.

Upon full utilisation of the New Issue Mandate and completion of the Acquisition, the Vendor and its associates will hold approximately 5.30% of the issued share capital of the Company as enlarged by the Consideration Shares.

IMPLICATIONS UNDER THE GEM LISTING RULES FOR THE REFRESHMENT OF CURRENT GENERAL MANDATE

Pursuant to the GEM Listing Rules, the refreshment of the Current General Mandates will be subject to the Shareholders’ approval by way of a poll at which the controlling shareholders of the Company and their associates or, where there are no controlling shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the resolutions to be proposed in respect of the refreshment of the Current General Mandates.

As at the Latest Practicable Date, 292,900,000 Shares, representing approximately 18.71% of the existing issued share capital of the Company, were held by New Brilliant, which is beneficially owned by Mr. Chui Bing Sun, the chairman of the Company and an executive Director, and his associates; Mr. Lee Chi Shing, Caesar, an executive Director, is interested in 1,000,000 Shares; and Mr. Chau Cheok Wa, a Director, beneficially owns 45% First Cheer Holdings Limited and is deemed to own 280,000,000 Shares. The Company did not have any controlling shareholder. Accordingly, Mr. Chui Bing Sun, Mr. Lee Chi Shing, Caesar and Mr. Chau Cheok Wa and their respective associates, including New Brilliant Investments Ltd. and First Cheer Holdings Limited, will abstain from voting in favour of resolution to refresh the Current General Mandates at the EGM. In accordance with the GEM Listing Rules, Vinco has been appointed by the Company to advise Independent Board Committee and the Independent Shareholders on the refreshment of the Current General Mandates.

(III) PROPOSED CHANGE OF COMPANY NAME

On 21 December 2007, the Board announced that it was proposed to change the name of the Company from “Galileo Holdings Limited ” to “Sun International Group Limited ”.

The Board has been acquiring businesses in order to diversify the Group’s income stream and to enhance Shareholders’ value. The Directors considers that the proposed new name will better reflect the business diversity and the long term business development of the Group in the future and provide the Company with a fresh new corporate identity and image. The Board is therefore of the view that the Change of Company Name is in the best interests of the Company and the Shareholders as a whole.

– 17 –

LETTER FROM THE BOARD

The Change of Company Name is subject to the passing of a special resolution to approve the Change of Company Name by the Shareholders at the EGM.

The Change of Company Name will take effect from the date on which the special resolution to approve the Change of Company Name is duly passed by the Shareholders at the EGM. The Company will carry out all necessary filing procedures with the Registrar of Companies in Hong Kong and the Registrar of Companies in the Cayman Islands (if any).

The Change of Company Name will not affect any rights of the Shareholders. The existing Share certificates in issue bearing the present name of the Company will, after the Change of Company Name having become effective, continue to be evidence of title to the Shares and will continue to be valid for trading, settlement, delivery and registration purposes.

There will be no special arrangement for free exchange of the existing Share certificates for new Share certificates printed in the Company’s new name. Once the Change of Company Name becomes effective, new Share certificates will be issued under the new name of the Company. The Company will make further announcement as and when appropriate on the arrangement relating to the Change of Company Name, the trading and dealings in the Shares on the GEM under the new name of the Company.

(IV) NOTICE OF EGM

A notice convening the EGM to be held on Monday, 5 May 2008 is set out on pages 196 to 199 of this circular and a form of proxy for use at the EGM is herein enclosed. Ordinary resolutions will be proposed at the EGM to approve the Acquisition and the transactions contemplated thereunder and the refreshment of the Current General Mandates. Special resolution will be proposed at the EGM to approve the Change of Company Name. In accordance with the GEM Listing Rules, no Shareholder is required to abstain from voting on the resolutions to approve the Agreements and the transactions contemplated thereunder and the Change of Company Name at the EGM. However, Mr. Chui Bing Sun, Mr. Lee Chi Shing, Caesar, and Mr. Chau Cheok Wa and their respective associates, including New Brilliant Investments Ltd. and First Cheer Holdings Limited, will abstain from voting in favour of resolution to refresh the Current General Mandates at the EGM. Pursuant to the GEM Listing Rules, the refreshment of the Current General Mandate will be taken by poll at the EGM.

Whether or not you intend to be present at the EGM, you are requested to complete the form of proxy and return it to the Company’s branch share registrar, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon not later than 48 hours before the time for holding the EGM.

Completion and delivery of the form of proxy will not prevent Shareholders from attending and voting at the EGM if they so wish.

– 18 –

LETTER FROM THE BOARD

PROCEDURES FOR DEMANDING A POLL

Pursuant to Article 72 of the articles of association of the Company, at any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (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:

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

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on page 21 of this circular which contains its recommendation to the Independent Shareholders in respect of the resolutions to approve the refreshment of the Current General Mandates.

The advice of Vinco, the independent financial adviser to the Independent Board Committee and the Independent Shareholders as to whether the terms of the refreshment of the Current General Mandates are in the interest of the Company and its Shareholders as a whole are set out on pages 22 to 27 of this circular. The Independent Board Committee, having taken into account the advice of Vinco, is of the opinion that the refreshment of Current General Mandates is fair and reasonable so far as the Independent Shareholders are concerned and is in the interest of the Shareholders and the Company as a whole.

Having considered the reasons set out herein, the Directors, including the independent non-executive Directors, are of the opinion that the Agreements and the transactions contemplated thereunder are on normal commercial terms, and the refreshment of Current General Mandates and Change of Company Name are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors, including the independent non-executive Directors, recommend (i) the Shareholders to vote in favour of the ordinary resolution to approve the Agreements and the transactions contemplated thereunder,

– 19 –

LETTER FROM THE BOARD

and the special resolution to approve the Change of Company Name, and (ii) the Independent Shareholders to vote in favour of the ordinary resolution to approve the refreshment Current General Mandates to be put forward at the EGM.

ADDITIONAL INFORMATION

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

Your faithfully, By order of the Board Galileo Holdings Limited Chui Bing Sun Chairman

– 20 –

LETTER FROM INDEPENDENT BOARD COMMITTEE

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==> picture [229 x 45] intentionally omitted <==

(Proposed to be renamed as Sun International Group Limited ) (Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8029)

10 April 2008

To the Independent Shareholders

Dear Sir or Madam,

REFRESHMENT OF THE CURRENT GENERAL MANDATES

We refer to the circular of the Company dated 10 April 2008 (the “ Circular ”) of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

We have been appointed to advise the Independent Shareholders as to whether the refreshment of the Current General Mandates is in the best interest of the Company and its Shareholders, and is fair and reasonable so far as the Independent Shareholders are concerned. Vinco has been appointed as the independent financial adviser to advise you and us in this respect.

Having considered the advice of Vinco in relation to the refreshment of the Current General Mandates as set out on pages 22 to 27 of the Circular, we are of the opinion that the refreshment of the Current General Mandates is in the interest of the Company and the Shareholders as a whole and is fair and reasonable so far as the Independent Shareholders are concerned. We therefore recommended that you vote in favour of the ordinary resolutions to be proposed at the EGM for the refreshment of the Current General Mandates.

Yours faithfully,

Independent Board Committee

Mr. Siu Hi Lam, Alick

Mr. Siu Hi Lam, Alick Mr. Kwok Kwan Hung Mr. Chien Hoe Yong Independent Independent Independent Non-executive Director Non-executive Director Non-executive Director

– 21 –

LETTER FROM VINCO

The following is the text of the letter of advice from Grand Vinco Capital Limited to the Independent Board Committee and the Independent Shareholders in connection with the New Issue Mandate, which has been prepared for the purpose of incorporation in this circular.

Grand Vinco Capital Limited Unit 4909-4910, 49/F., The Center

99 Queen’s Road Central, Hong Kong

10 April 2008

To the Independent Board Committee and the Independent Shareholders of Galileo Holdings Limited

Dear Sirs,

PROPOSED REFRESHMENT OF THE CURRENT GENERAL MANDATES

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in connection with the proposed grant of the New Issue Mandate, details of which are set out in the circular (the “Circular”) issued by the Company to the Shareholders dated 10 April 2008 of which this letter forms part. Capitalized terms used in this letter shall have the same meanings ascribed to them in the Circular unless the context otherwise requires.

In accordance with Rule 17.42A of the GEM Listing Rules, as there was no controlling shareholder as at the Latest Practicable Date, the proposed New Issue Mandate requires the approval of the Independent Shareholders at which the Directors (excluding the independent non-executive Directors), the chief executive officer of the Company and their respective associates shall abstain from voting at the EGM. Voting of the Independent Shareholders at the EGM shall be taken by poll according to Rule 17.47 (4) (b) of the GEM Listing Rules.

The New Issue Mandate will, if granted, remain effective until the earliest of: (i) the conclusion of next annual general meeting of the Company; (ii) the expiration of the period within the next annual general meeting of the Company is required by the memorandum and articles of association of the Company or any other applicable laws to be held and (iii) the passing of an ordinary resolution by the Shareholders in general meeting revoking or varying the authority given to the Directors under the New Issue Mandate.

The Independent Board Committee, comprising Mr. Siu Hi Lam, Alick, Mr. Kwok Kwan Hung and Mr. Chien Hoe Yong, all being independent non-executive Directors, has been established to advise the Independent Shareholders as to whether the grant of the New Issue Mandate is fair and reasonable so far as the Independent Shareholders are concerned and whether the grant of the New Issue Mandate is in the interests of the Company and the Shareholders as a whole.

– 22 –

LETTER FROM VINCO

BASIS OF OUR OPINION AND RECOMMENDATION

In forming our opinion and recommendation, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, management of the Company and its subsidiaries. We have assumed that all information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continued to be true, accurate and complete as at the date of the Circular and that all expectations and intentions of the Directors, management of the Company and its subsidiaries, will be met or carried out as the case may be. We have no reason to doubt the truth, accuracy and completeness of the information, facts, opinions and representations provided to us by the Directors, management of the Company and its subsidiaries. The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinions expressed. We have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided to us by the Directors, management of the Company and its subsidiaries.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

We have relied on such information and opinions and have not, however, conducted any independent verification of the information provided, nor have we carried out any independent investigation into the business, financial conditions and affairs of the Group or its future prospect.

Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to the grant of the New Issue Mandate, as referred to in Rule 17.92 of the GEM Listing Rules (including the notes thereto).

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the proposed New Issue Mandate and, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

– 23 –

LETTER FROM VINCO

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the proposed New Issue Mandate, we have considered the principal factors and reasons set out below:

Background of and reasons for the proposed New Issue Mandate

The Current General Mandates were granted to the Directors to allot and issue up to a maximum of 239,640,000 Shares (equivalent to 20% of the then issued share capital of the Company) at the extraordinary general meeting held on 28 September 2007. As announced on 16 October 2007, 80,000,000 Shares have been issued and allotted pursuant to a placing under the Current General Mandates, representing approximately 33.38% of the Current General Mandates were utilized.

In this regard, the Board proposed to pass an ordinary resolution at the EGM to approve the proposed New Issue Mandate in accordance with Rule 17.42A of the GEM Listing Rules to allow flexibility to issue any additional new Shares so that the Directors would be granted to allot and issue not exceeding 20% of the entire issued share capital of the Company as at the date of the EGM. The proposed New Issue Mandate will be in force when it is approved by the Independent Shareholders at the EGM.

Fund raising activities in the past 12 months

According to the information provided by the Directors, the following table summarizes the information relating to the Company’s fund raising activities in the past 12 months:

				Actual use of
		Net proceeds		proceeds as at
Date of		raised	Intended use	the Latest
announcement	Transaction	(approximately)	of proceeds	Practicable Date
16 October 2007	Placing of	HK$123.2 million	Use for general	HK$44.75 million
	80,000,000 Shares		working capital	has been utilized
	at a price of		and/or possible	for the Deposit in
	HK$1.58		future	respect of the
	per Share		investments in a	Acquisition and
			prestigious and	the remaining of
			leisure resort in	the net proceeds
			Cagayan Valley	will be used as
				intended
20 August 2007	Top-up placing of	HK$52.1 million	Use for general	The net proceeds has
	194,700,000		working capital	been utilized as
	Shares at a price			intended
	of HK$0.275
	per Share

– 24 –

LETTER FROM VINCO

As illustrated in the above table, the Company has a successful track record of completing two fund raising exercises in the past 12 months. As far as the use of proceeds from the two fund raising exercises as illustrated in the above table is concerned, we noted that the actual use of proceeds was in line with the intended use of proceeds.

However, in the event the Company identifies a suitable investment opportunity but does not have sufficient financial resources on hand, or is unable to obtain loan financing on acceptable terms, or cannot find other alternatives to finance the acquisition of such investment opportunity in a timely manner, the Company may lose its bid in an otherwise favourable investment and also a favorable opportunity to expand its business portfolio. In light of the above, we consider the proposed New Issue Mandate to be in the interests of the Company and the Independent Shareholders as a whole. Save as the proposed Acquisition as set out in the Circular, the Directors confirmed that there is no definite plan for any other investment or acquisition of the Group nor is there any immediate funding need for the operation of the Group as at the Latest Practicable Date. However, the Directors cannot preclude the possibilities that additional funding may still be needed for investment development as well as other opportunities arise in the future.

Financial flexibility

The Directors believed that the proposed New Issue Mandate will provide the Company with additional flexibility in deciding the source of finance for any acquisition opportunities that may arise in the future and for the purpose of raising general working capital of the Group. Save as the issue and allotment of the 105,000,000 Consideration Shares upon the Completion as set out in the Circular, the Directors confirmed that there is no proposal for any other investment or acquisition of the Group as at the Latest Practicable Date.

We consider that the proposed New Issue Mandate could enhance the financing flexibility of the Company to raise capital and to strengthen the capital base of the Group, if and when required, by way of issue of new Shares or other convertible instruments for further development of the Group. In addition, the Directors consider that if investment or acquisition opportunities arise, decisions may have to be made within a limited period of time. The proposed New Issue Mandate would provide the Group with the maximum flexibility as allowed under the Listing Rules to allot and issue new Shares or other convertible instruments to raise capital through placing of Shares as consideration for funding such potential investments and/or acquisitions in the future as and when such opportunities arise. The increased amount of capital which may be raised under the proposed New Issue Mandate provides more options of financing to the Group when assessing and negotiating potential acquisitions in a timely manner.

– 25 –

LETTER FROM VINCO

Other financing alternatives

Other than raising funds by way of issuing equity capital, the Directors confirmed that they will consider other financing methods such as bank financing, debt financing and funding through internal resources in order to meet its financing requirements arising from future development of the Group, depending on the then financial position, capital structure and cost of funding of the Group and the then market condition. As confirmed by the Directors, the proposed New Issue Mandate provides another alternative to the Directors to finance the Group’s businesses and the Directors will use the method which serves the best interest of the Group. We consider that it is a sensible consideration to make reference to the then financial position of the Group in order to decide on a financing method for the future development of the Group.

Potential dilution to shareholding of the Independent Shareholders

New Brilliant Investments Ltd. (Note 1) Premier United Limited (Note 2) First Cheer Holdings Limited (Note 3) Mr. Lee Chi Shing, Caesar (Note 4) Public Shareholders Shares issued under New Issue Mandate Other public Shareholders Total	As at the Latest Practicable Date (Number of Shares) % 292,900,000 18.71 190,000,000 12.14 280,000,000 17.89 1,000,000 0.06 – – 801,550,000 51.20 1,565,450,000 100.00	Upon full utilization of the New Issue Mandate (Number of Shares) % 292,900,000 15.59 190,000,000 10.11 280,000,000 14.91 1,000,000 0.05 313,090,000 16.67 801,550,000 42.67 1,878,540,000 100.00	Upon full utilization of the New Issue Mandate (Number of Shares) % 292,900,000 15.59 190,000,000 10.11 280,000,000 14.91 1,000,000 0.05 313,090,000 16.67 801,550,000 42.67 1,878,540,000 100.00
			100.00

Notes:

New Brilliant Investments Ltd. is a company beneficially owned as to 80% by 20/20 International Limited and as to 20% by Ms. Zhang Ze Mei, the mother of Mr. Chui Bing Sun who is a Director. Mr. Chui Bing Sun beneficially owns 70.4% of the issued shares of 20/20 International Limited and Ms. Zhang Ze Mei holds the remaining 29.6% of the issued shares of 20/20 International Limited.
Premier United Limited is a company beneficially owned by Mr. Chan Ping Che and Ms. Lam Shiu May in equal shares. Other than 190,000,000 Shares beneficially owned by Mr. Chan Ping Che and Ms. Lam Shiu May as at the Latest Practicable Date, they are Independent Third Parties.
First Cheer Holdings Limited is a company beneficially owned as to 45% by Mr. Cheng Ting Kong, as to 45% by Mr. Chau Cheok Wa, the Director, and as to 10% by Mr. Lai Ting Kwong.
Mr. Lee Chi Shing, Caesar is the executive Director.

– 26 –

LETTER FROM VINCO

For illustrative purpose, assuming there is no change in the issued share capital of the Company until the date of the EGM and the proposed New Issue Mandate is fully utilized, 313,090,000 new Shares will be issued, representing 20% of the entire issued share capital of the Company, and approximately 16.67% of the then entire issued share capital of the Company as enlarged by the Shares issued under the proposed New Issue Mandate respectively.

The aggregate shareholding of the other public Shareholders will decrease from approximately 51.20% to approximately 42.67% upon full utilization of the proposed New Issue Mandate, a potential maximum dilution of approximately 8.53%. Taking into account that the proposed New Issue Mandate (i) will provide an alternative to increase the amount of capital which may be raised under the proposed New Issue Mandate; (ii) provides more options of financing to the Group for further development of its business as well as in potential investment and/or acquisitions when such opportunities arise and; (iii) the fact that the shareholding of all the Shareholders will be diluted proportionally to their respective shareholdings upon any utilization of the proposed New Issue Mandate, we consider such potential maximum dilution to shareholdings of the Independent Shareholders to be justifiable.

CONCLUSION

Having taken into consideration the above principal factors and reasons, we are of the view that the New Issue Mandate is fair and reasonable, so far as the Independent Shareholders are concerned and that the proposed New Issue Mandate is in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the proposed New Issue Mandate.

Yours faithfully, For and on behalf of Grand Vinco Capital Limited Alister Chung Managing Director

– 27 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY

Set out below is a summary of the audited financial information of the Group for the three years ended 31 March 2007 and the unaudited consolidated income statement of the Group for the six months ended 30 September 2007 and nine months ended 31 December 2007 which extracted from the relevant annual reports and interim report 2007 of the Company.

CONSOLIDATED INCOME STATEMENTS

	For the nine	For the six
	months	months
	ended	ended
	31 December	30 September	For	the year ended	31 March
	2007	2007	2007	2006	2005
	HK$	HK$	HK$	HK$	HK$
	Unaudited	Unaudited	Audited	Audited	Audited
Turnover	6,248,014	2,668,178	1,643,189	2,357,000	916,054
Direct costs	(4,089,105)	(1,577,095)	(524,339)	(544,764)	(171,143)
Gross profit	2,158,909	1,091,083	1,118,850	1,812,236	744,911
Other operating income	452,448	124,362	4,854,451	779	15,062
Administrative expenses	(20,463,350)	(11,166,967)	(12,376,094)	(3,744,815)	(3,839,082)
Other operating
expenses	–	–	–	–	(41,704)
Finance costs	(245,387)	(181,152)	(67,584)	–	(2)
Loss before tax	(18,238,380)	(10,132,674)	(6,470,377)	(1,931,800)	(3,120,815)
Income tax expense	(141,000)	–	(41,258)	–	–
Loss for the year/period	(18,238,380)	(10,132,674)	(6,511,635)	(1,931,800)	(3,120,815)

Loss per share
– Basic	HK(1.66) cent	HK(1.01) cent	HK(0.73) cent	HK(0.24) cent	HK(0.39) cent

– 28 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED BALANCE SHEETS

At 30 September 2007 HK$ Unaudited 1,166,407 2,600,000 4,987,395	2007 HK$ Audited 2,332,814 2,600,000 5,178,012	At 31 March 2006 HK$ Audited – – 532,140	2005 HK$ Audited – – 733,558 733,558 – – 117,120 541,329 658,449 34 375,589 – – – – – – 375,623 282,826 1,016,384 – 2,795,584 – (1,779,200) 16,000,000 (17,779,200) (1,779,200)
8,753,802 87,436 145,293 20,280,658 40,528,296 61,041,683 – 1,241,418 30,000 27,284 253,484 27,255 – 48,853 1,628,294 59,413,389 68,167,191 3,684,893 – 20,174	10,110,826 95,030 96,355 590,043 1,801,684 2,583,112 – 1,402,413 30,000 758,368 – 85,587 5,000,000 48,853 7,325,221 (4,742,109) 5,368,717 – – 24,079	532,140 – 311,000 117,120 330,821 758,941 – 639,344 – 4,362,737 – – – – 5,002,081 (4,243,140) (3,711,000) – – –	733,558
			– – 117,120 541,329
			658,449
			34 375,589 – – – – – –
			375,623
			282,826
			1,016,384 – 2,795,584 –
64,462,124	5,344,638	(3,711,000)
23,964,000 40,498,124	19,300,000 (13,955,362)	16,000,000 (19,711,000)	16,000,000 (17,779,200
64,462,124	5,344,638	(3,711,000)

Note:

Consolidated balance sheet of the Company as at 31 December 2007 is not available on its third quarterly report 2007.

– 29 –

APPENDIX I FINANCIAL INFORMATION OF THE GROUP

2. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE YEAR ENDED 31 MARCH 2007

The following are the audited consolidated financial statements of the Group extracted from the annual report of the Company for the year ended 31 March 2007.

CONSOLIDATED INCOME STATEMENT

For year ended March 31, 2007

Notes Turnover 7 Direct costs Gross profit Other operating income Administrative expenses Finance costs 8 Loss before taxation 9 Income tax expense 12 Loss for the year Dividend 13 Loss per share 14 Basic Diluted	2007 HK$ 1,643,189 (524,339)	2006 HK$ 2,357,000 (544,764) 1,812,236 779 (3,744,815) – (1,931,800) – (1,931,800) – HK(0.24) cent N/A
	1,118,850 4,854,451 (12,376,094) (67,584) (6,470,377) (41,258) (6,511,635)	1,812,236 779 (3,744,815 –
		(1,931,800 –
		(1,931,800
	– HK(0.73) cent HK(0.66) cent

– 30 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED BALANCE SHEET

As at March 31, 2007

Notes NON-CURRENT ASSETS Goodwill 15, 29 Investment property 16 Property, plant and equipment 16 CURRENT ASSETS Inventories 18 Trade receivables 19 Prepayments, deposits and other receivables Bank balances and cash CURRENT LIABILITIES Accruals and other payables Deposits received Amount due to a director 20 Obligations under finance leases – current portion 21 Other borrowings 22 Tax payable NET CURRENT LIABILITIES TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Obligations under finance lease – long term portion 21 CAPITAL AND RESERVES Share capital 23 Reserves	2007 HK$ 2,332,814 2,600,000 5,178,012	2006 HK$ – – 532,140 532,140 – 311,000 117,120 330,821 758,941 639,344 – 4,362,737 – – – 5,002,081 (4,243,140) (3,711,000) – (3,711,000) 16,000,000 (19,711,000) (3,711,000)
	10,110,826 95,030 96,355 590,043 1,801,684 2,583,112 1,402,413 30,000 758,368 85,587 5,000,000 48,853 7,325,221 (4,742,109) 5,368,717 24,079	532,140
		– 311,000 117,120 330,821
		758,941
		639,344 – 4,362,737 – – –
		5,002,081
		(4,243,140
		(3,711,000 –
	5,344,638
	19,300,000 (13,955,362)	16,000,000 (19,711,000
	5,344,638

– 31 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

BALANCE SHEET

As at March 31, 2007

Notes CURRENT ASSETS Amounts due from subsidiaries Bank balances and cash CURRENT LIABILITIES Accruals and other payables Amount due to a subsidiary Amount due to a director 20 Other borrowings 22 CAPITAL AND RESERVES Share capital 23 Reserves 25	2007 HK$ 15,252,593 998,184	2006 HK$ 6,857 225,186 232,043 165,101 492,605 4,362,737 – 5,020,443 (4,788,400) 16,000,000 (20,788,400) (4,788,400)
	16,250,777 472,627 621,489 758,368 5,000,000 6,852,484	232,043
		165,101 492,605 4,362,737 –
		5,020,443
	9,398,293
	19,300,000 (9,901,707)	16,000,000 (20,788,400
	9,398,293

– 32 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For year ended March 31, 2007

Share capital (note 23) HK$ 16,000,000 – 16,000,000 3,200,000 – – 100,000 –		Reserves	Reserves	Reserves	Total HK$ (1,779,200) (1,931,800) (3,711,000) 11,200,000 (405,120) 3,272,393 1,500,000 (6,511,635) 5,344,638
	Share premium HK$ 8,095,956 – 8,095,956 8,000,000 (405,120) – 1,400,000 –	Merger deficit HK$ (119,998) – (119,998) – – – – –	Share option reserve Accumulated losses HK$ HK$ – (25,755,158) – (1,931,800) – (27,686,958) – – – – 3,558,215 (285,822) (285,822) 285,822 – (6,511,635)		Total HK$ (1,779,200 (1,931,800
16,000,000 3,200,000 – – 100,000 –					(3,711,000 11,200,000 (405,120 3,272,393 1,500,000 (6,511,635
19,300,000	17,090,836	(119,998)	3,272,393	(34,198,593)

Note: The merger deficit of the Group represents the difference between the nominal value of the shares of acquired subsidiaries over the nominal value of the share capital of the Company issued in exchange therefore.

– 33 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED CASH FLOW STATEMENT

For year ended March 31, 2007

Note OPERATING ACTIVITIES Loss before taxation Adjustments for: Depreciation of property, plant and equipment Waive of amount due to an ex-director Bank interest income Finance costs Impairment loss recognised in respect of goodwill Share based payment expenses Operating cash flows before movements in working capital Decrease in inventories Increase in trade receivables, prepayments, deposits and other receivables Increase in accruals, other payables and deposits received Increase in amount due to a director Cash used in operations Interest received NET CASH USED IN OPERATING ACTIVITIES INVESTING ACTIVITIES Acquisition of subsidiaries 29 Purchase of property, plant and equipment NET CASH USED IN INVESTING ACTIVITIES FINANCING ACTIVITIES Proceeds from other borrowings Loan interest paid Finance leases interest paid Repayment of obligation under finance leases Proceeds from placing of new shares during the year Recognition of share issue expenses Proceeds from share option NET CASH FROM FINANCING ACTIVITIES NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT END OF THE YEAR ANALYSIS OF CASH AND CASH EQUIVALENT Bank balances and cash	2007 HK$ (6,470,377) 468,963 (4,792,737) (53,389) 67,584 2,332,815 3,272,393	2006 HK$ (1,931,800) 214,658 – (8) – – – (1,717,150) – (311,000) 263,755 1,567,153 (197,242) 8 (197,234) – (13,240) (13,240) – – – – – – – – (210,474) 541,295 330,821 330,821
	(5,174,748) 4,170 (239,578) 681,847 1,188,368 (3,539,941) 53,389 (3,486,552) (12,184,767) (58,511) (12,243,278) 5,000,000 (63,973) (3,611) (26,603) 11,200,000 (405,120) 1,500,000 17,200,693 1,470,863 330,821	(1,717,150 – (311,000 263,755 1,567,153
		(197,242 8
		(197,234
		– (13,240
		(13,240
		– – – – – – –
		–
		(210,474 541,295
	1,801,684 1,801,684

– 34 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO THE FINANCIAL STATEMENTS

For the year ended March 31, 2007

1. GENERAL

The Company is incorporated in the Cayman Islands on July 11, 2000 as an exempted company with limited liability under the Companies Law (Revised) of Cayman Islands. Its shares were listed on the Growth Enterprise Market (the “GEM”) of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). As at the balance sheet date, the parent of the Company (the “Immediate Holding Company”) is New Brilliant Investments Limited, a company incorporated in the British Virgin Islands, and the ultimate holding company of the Company (the “Ultimate Holding Company”) is 20/20 International Limited, a company incorporated in the British Virgin Islands. The address of the registered office and principal place of business of the Company are disclosed in the page 2 of annual report.

The Company acts as an investment holding company. Details of the principal activities of its subsidiaries are set out in note 17. There were no significant changes in the nature of the Group’s principal activities during the year.

The financial statements are presented in Hong Kong dollars. The functional currency of the Group is mainly Hong Kong dollars (“HKD”) which is the same as the presentation currency of the Group.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Group recorded a consolidated loss of HK$6,511,635 for the year ended March 31, 2007 and had consolidated net current liabilities as at March 31, 2007 of HK$4,742,109. The net current liabilities of the Group mainly comprised of the amount due to Ms. Chan Chor Sum (“Ms. Chan”), an independent third party of the Company, amounted to HK$5,000,000 as at March 31, 2007. The Group largely finances day-to-day working capital requirements using funds advanced from Ms. Chan. Notwithstanding that, the financial statements have been prepared on the assumption that the Group will continue to operate as a going concern for the foreseeable future.

In order to improve the financial position, liquidity and cash flow position of the Group, the following measures/arrangements have been implemented which include, but not limit to:

(a) Pursuant to the loan agreement signed with Ms. Chan dated January 17, 2007, the loan totalling HK$5,000,000 owed to her had expired and had been repaid on June 14, 2007;
(b) Pursuant to the loan agreement with Nanyang Commercial Bank dated April 16, 2007, a subsidiary of the Group obtained a loan from the bank totalling HK$4,000,000 in order to provide for working capital to the Company. The loan would be wholly repaid after twelve years. The loan was secured by properties owned by the Group;
(c) Pursuant to the loan agreement dated June 12, 2007, the substantive shareholder and director, Mr. Chui Bing Sun (“Mr. Chui”) would provide financial support in form of loan totalling HK$1,200,000 to the Group. The loan is interest bearing at 6.75% per annum and is repayable over one year from the date of the loan agreement; and
(d) Pursuant to the projected future cash flow of the Group for the period from April 1, 2007 to June 30, 2008 prepared by the Board, the Group is able to maintain sufficient working capital for operations as the trend of turnover would increase continuously.

In the opinion of the Directors, in light of the ongoing support from Mr. Chui and the various measures/arrangements implemented to date, the Group will have sufficient working capital for its current requirements. Accordingly, the Directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis, notwithstanding the Group’s financial position and tight liquidity as at March 31, 2007.

3. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS

In the current year, the Group has applied, for the first time, a number of new standards, amendments and interpretations (“new HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), which are either effective for accounting periods beginning on or after December 1, 2005, January 1, 2006 or March 1, 2006. The adoption of the new HKFRSs had no material effect on how the results for the current or prior accounting periods have been prepared and presented. Accordingly, no prior period adjustment has been required.

– 35 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The Group has not early applied the following new standard, amendment and interpretations that have been issued but are not yet effective as at March 31, 2007. The directors of the Company anticipate that the application of these standard, amendment or interpretations will have no material impact on the results and the financial position of the Group.

Hong Kong Accounting Standard Capital Disclosures[1] (“HKAS”) 1 (Amendment) HKFRS 7 Financial Instruments: Disclosures[1] HKFRS 8 Operating Segments[2] HK(IFRIC)-Interpretation (“Int”) 8 Scope of HKFRS 2[3] HK(IFRIC)-Int 9 Reassessment of Embedded Derivatives[4] HK(IFRIC)-Int 10 Interim Financial Reporting and Impairment[5] HK(IFRIC)-Int 11 HKFRS 2 – Group and Treasury Share Transactions[6] HK(IFRIC)-Int 12 Service Commission Arrangements[7]

1 Effective for annual periods beginning on or after January 1, 2007.
2 Effective for annual periods beginning on or after January 1, 2009. 3 Effective for annual periods beginning on or after May 1, 2006. 4 Effective for annual periods beginning on or after June 1, 2006. 5 Effective for annual periods beginning on or after November 1, 2006.
6 Effective for annual periods beginning on or after March 1, 2007.
7 Effective for annual periods beginning on or after January 1, 2008.

4. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with HKFRS issued by the HKICPA. The financial statements have been prepared under the historical cost basis except for investment property and certain financial instruments, which are measured at fair values, as explained in the accounting policies set out below.

In addition, the financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the GEM of The Stock Exchange and by the Hong Kong Companies Ordinances.

Basis of consolidation

The consolidated financial statements incorporated 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.

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

Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under HKFRS 3 Business Combinations are recognised at their fair values at the acquisition date, except for non-current assets that are classified as held for sale in accordance with HKFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell. Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

– 36 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Goodwill

Goodwill arising on an acquisition of a subsidiary for which the agreement date is on or after January 1, 2005 represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the relevant subsidiary at the date of acquisition. Such goodwill is carried at cost less any accumulated impairment losses. Capitalised goodwill arising on an acquisition of a subsidiary is presented as an intangible asset.

For the purposes of impairment testing, goodwill arising from an acquisition is allocated to each of the relevant cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the acquisition. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, and whenever there is an indication that the unit may be impaired. For goodwill arising on an acquisition in a financial year, the cash- generating unit to which goodwill has been allocated is tested for impairment before the end of that financial year.

When the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated to reduce the carrying amount of any goodwill allocated to the unit first, and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in the consolidated income statement. An impairment loss for goodwill is not reversed in subsequent periods.

On subsequent disposal of a subsidiary, the attributable amount of goodwill capitalised is included in the determination of the amount of profit or loss on disposal.

Investment property

Investment property is a building which is owned or held under a leasehold interest to earn rental income and/or for capital appreciation. These include land held for a currently undetermined future use.

Investment property is stated in the balance sheet at fair value. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss. Rental income form investment property is accounted for as described in below.

When the Group holds a property interest under an operating lease to earn rental income and/or for capital appreciation, the interest is classified and accounted for as an investment property on a property-byproperty basis. Any such property interest which has been classified as an investment property is accounted for as if it were held under a finance lease, and the same accounting policies are applied to that interest as are applied to other investment properties leased under finance leases. Leases payments are accounted for as described in below.

Property, plant and equipment

Property, plant and equipment are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.

Depreciation is provided to write off the cost of items of property, plant and equipment over their estimated useful lives and after taking into account their estimated residual value, using the straight-line method, at the following rates per annum:

Leasehold properties	2.5%
Leasehold improvement	4%
Office equipment	20%
Furniture and fixtures	20%
Motor vehicle	20%
Computer equipment	30%

Any revaluation increase arising on the revaluation of property, plant and equipment is credited to the 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

– 37 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

as an expense to the extent that it exceeds the balance, if any, on the revaluation reserve relating to a previously revaluation of that asset. On the subsequent derecognition of a revalued asset, the attributable revaluation surplus is transferred to retained profits.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

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.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

First-in, first-out method is used to calculate the cost of ordinarily interchangeable items.

Financial instruments

Financial assets and financial liabilities are recognised on balance sheet when the Group 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 loans and receivables. 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.

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 trade receivables, other receivables and bank balances 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.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group 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 after deducting all of its liabilities. The Group’s financial liabilities are mainly other financial liabilities. The accounting policies adopted in respect of other financial liabilities and equity instruments are set out below.

Other Financial liabilities

Other financial liabilities including accrued charges and other payables, deposits received and amounts due to directors are subsequently measured at amortised cost, using the effective interest rate method.

– 38 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Equity instruments

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

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 receivable and the cumulative again or loss that had been recognised directly in equity is recognised in profit or loss.

Financial liabilities, are derecognitised when the obligation specified in the relevant contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Impairment of assets

(i) Impairment of investments in other receivables

Investments in debt and equity securities and other current and non-current receivables that are stated at cost or amortised cost are reviewed at each balance sheet date to determine whether there is objective evidence of impairment. If any such evidence exists, any impairment loss is determined and recognised as follows:

For trade and other current receivables and other financial assets carried at amortised cost, the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition of these assets), where the effect of discounting is material.
If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the impairment loss was recognised, the impairment loss is reversed through profit or loss. A reversal of an impairment loss shall not result in the asset’s carrying amount exceeding that which have been determined had no impairment loss been recognised in prior years.

(ii) Impairment of other assets

Internal and external sources of information are reviewed at each balance sheet date to identify indications that the following assets may be impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased:

property, plant and equipment (other than properties carried at revalued amounts);
investment in subsidiaries; and
goodwill.

If any such indication exists, the asset’s recoverable amount is estimated. In addition, for goodwill, the recoverable amount is estimated annually whether or not there is any indication of impairment.

Calculation of recoverable amount

The recoverable amount of an asset is the greater of its net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of time value of money and the risks specific to the asset. Where an asset doe not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).

– 39 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Recognition of impairment losses

An impairment loss is recognised in profit or loss whenever the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit or group of units and then, to reduce the carrying amount of the other assets in the unit or group of units on a pro rata basis, expect that the carrying value of an asset will not be reduced below its individual fair value less costs to sell, or value in use, if determinable.

Reversals of impairment losses

In respect of assets other than goodwill, an impairment loss is reversal if there has been a favourable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is not reversal.

A reversal of an impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognised in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are capitalised as part of the cost of those assets. Capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Revenue recognition

Service – income is recognised when services are rendered, on an accrual basis or where condition attached to the relevant agreements and mandates is in satisfaction of the relevant condition.

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 exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Rental income receivable under operating leases is recognised in profit or loss in equal instalments over the periods covered by the lease term.

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 periods and it further excludes items that are never taxable or deductible. The Company’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 amount of assets and liabilities in the financial statements and the corresponding tax bases 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Company 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 profits 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, based on tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Leased assets

Where the group acquires the use of assets under finance leases, the amounts representing the fair value of the leased asset, or, if lower, the present value of the minimum lease payments, of such assets are included in fixed assets and the corresponding liabilities, net of finance charges, are recorded as obligations under financial leases. Depreciation is provided at rates which write off the cost or valuation of the assets over the term of the relevant lease or, where it is likely the group will obtain ownership of the asset, the life of the asset. Impairment losses are accounted for in accordance with the accounting policy as set out above. Finance charges implicit in the lease payments are charged to profit or loss over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred.

Where substantially all of the risks and rewards incidental to ownership are retained by the lessor (an “operating lease”), the total rentals payable under the lease are charged to the income statement on a straight-line bases over the lease term.

The land and buildings elements of property leases are considered separately for the purposes of lease classification.

Retirement benefit scheme

Payments to the Mandatory Provident Fund Scheme (“MPF Scheme”) and state-managed retirement benefit schemes are charged as an expense when employees have rendered services entitling them to the contributions.

Foreign currencies

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. Non-monetary 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 included in profit or loss in the period in which they arise. Except for exchange differences arising on a monetary item that forms part of the Company’s net investment in a foreign operation, in which case, such exchange differences are recognised in equity in the consolidated financials statements. Exchange difference 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 gain and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into 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,

– 41 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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.

Goodwill and fair value adjustments on identifiable assets acquired arising on an acquisition of a foreign operation on or after January 1, 2005 are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the balance sheet date. Exchange differences arising are recognised in the translation reserve.

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated income statement on a straight-line basis over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at the balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated income statement over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the consolidated income statement is charged during the vesting period, the number of share options that is expected to vest is reviewed. Any adjustment to the cumulative fair value recognised in prior years is charged/credited to the profit or loss for the year of the review, unless the original employee expenses qualify for recognition as an asset, with a corresponding adjustment to the capital reserve. On vesting date, the amount recognised as an expense is adjusted to reflect the actual number of options that vest (with a corresponding adjustment to the capital reserve) except where forfeiture is only due to not achieving vesting conditions that related to the market price of the Company’s shares. The equity amount is recognised in the capital reserve until either the option is exercised (when it is transferred to the share premium account) or the option expires when it is released directly to retained profits) with the fair value of goods and services received.

Derivative financial instruments

Derivative financial instruments are recognised initially at fair value. At the balance sheet date the fair value is remeasured. The gain or loss on remeasurement to fair value is charged immediately to profit or loss, except where the derivatives qualify for cash flow hedge accounting or hedge the net investment in a foreign operation, in which case recognition of any resultant gain or loss depends on the nature of the item being hedged.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTIES

In the process of applying the Group’s accounting policies described in note 4, management makes various estimations and judgments based on past experiences, expectations of the future and other information. The key source of estimation uncertainties and the judgment that may significantly affect the amounts recognised in the financial statements are disclosed below:

Allowances for bad and doubtful debts

The policy for allowance of bad and doubtful debts of the Group is based on the evaluation of collectability and aging analysis of accounts and on management’s judgment. A considerable amount of judgment is required in assessing the ultimate realization of these receivables, including the current creditworthiness and the past collection history of each customer. If the financial conditions of customers of the Group were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required.

– 42 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Useful lives and impairment assessment of property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and identified impairment losses. The estimation of useful lives impacts the level of annual depreciation recorded. Property, plant and equipment are evaluated for possible impairment on a specific asset basic or in groups of similar assets, as applicable. This process requires management’s estimate of future cash flows generated by each asset or group of asset. For any instance where this evaluation process indicates impairment, the relevant asset’s carrying amount is written down to the recoverable amount and the amount written down is charged against the results of operations.

Estimated impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. As at March 31, 2007, the carrying amount of the goodwill is HK$2,332,814 (net of accumulated impairment loss of HK$2,332,815).

6. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s major financial instruments include trade receivables and other receivables, bank balances and cash, accruals and other payables, deposits received and amounts due to directors. 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.

Credit risk

The Group’s maximum exposure to credit risk in the event of the counterparties failure to perform their obligations as at March 31, 2007 is the carrying amount of trade and other receivables, as started in the consolidated balance sheet. The Group reviews the recoverable amount of each individual debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the Directors consider that the Group’s credit risk is significantly reduced.

The credit risk on liquid is limited because the counterparties are banks with good reputation.

Liquidity risk

Internally generated cash flow and borrowing from related parties are the general sources of funds to finance the operations of the Group. Borrowings of the Group are subject to fixed interests rate and are renewable annually. The Group liquidity risk management includes making available fund sources from related parties with favorable interest rates and diversifying the funding sources. The Group regularly reviews its major funding positions to ensure it has adequate financial resources in meeting its financial obligations.

7. TURNOVER AND SEGMENT INFORMATION

Turnover represents the amounts received and receivable for services provided by the Group to outside customers and rental income, and is analysed as follows:

Business consultancy service income Funeral services income Rental income	THE GROUP 2007 2006 HK$ HK$ 923,000 2,357,000 690,189 – 30,000 – 1,643,189 2,357,000	THE GROUP 2007 2006 HK$ HK$ 923,000 2,357,000 690,189 – 30,000 – 1,643,189 2,357,000
		2,357,000

– 43 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Segment information is presented by way if two segment formats: (i) on a primary segment reporting basis, by business segment; and (ii) on a secondary segment reporting basis, by geographical segment.

Business segments

The Group’s operating business are structured and managed separately, according to the nature of their operations and services they provided. Each of the Group’s business segments represents a strategic business unit that offers services which are subject to risk and returns that are different from those of the other business segments.

For management purposes, the Group is currently organised into two operating divisions – business consultancy services and funeral services.

Principal activities are as follows:

Business consultancy – providing services to assist clients on various business or management issues.

Funeral services

– providing services to assist clients on various funeral custom and activities.

Segment information about these businesses is presented below.

Income Statement

For the year ended March 31, 2007

Turnover External sales Result Segment result Unallocated corporate income Unallocated corporate expenses Finance cost Loss before taxation Income tax expense Loss for the year	Business consultancy HK$ 923,000 (2,332,172)	Funeral services HK$ 690,189 (2,570,583)	Other HK$ 30,000 (340,284)	Consolidated HK$ 1,643,189 (5,243,039) 4,845,242 (6,004,996) (67,584) (6,470,377) (41,258) (6,511,635)

– 44 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Balance Sheet

As at March 31, 2007

Business consultancy Funeral services Other HK$ HK$ HK$ Assets Segment assets 1,535,335 3,661,256 6,499,163 Unallocated corporate assets Consolidated total assets Liabilities Segment liabilities (338,922) (455,530) (323,853) Unallocated corporate liabilities Consolidated total liabilities	Consolidated HK$ 11,695,754 998,184
	12,693,938

	(1,118,305 (6,230,995
	(7,349,300

Other information

For the year ended March 31, 2007

	Business	Funeral
	consultancy	services	Other	Consolidated
	HK$	HK$	HK$	HK$
Capital additions	96,177	1,380	–	97,557
Depreciation	232,303	129,662	106,998	468,963

The Group had only one business segment for the year ended March 31, 2006 which were business consultancy services segment, no separate disclosure of segmental income statement and balance sheet would be made.

Geographical segments

In determining the Group’s geographical segment, turnover is attributed to the segments based on the location of the customers, and assets are attributed to the segment based on the location of the assets.

The following table presents turnover and certain asset and expenditure information for the Group’s geographical segments.

			People’s Republic of	People’s Republic of
	Hong	Kong	China		Consolidated
	2007	2006	2007	2006	2007	2006
	HK$	HK$	HK$	HK$	HK$	HK$
Turnover – external	1,643,189	2,057,000	–	300,000	1,643,189	2,357,000
Other segment
information:
Carrying amount of
segment assets	12,693,938	1,291,081	–	–	12,693,938	1,291,081
Capital expenditure	97,557	13,240	–	–	97,557	13,240

– 45 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

8. FINANCE COSTS

Interest on: Other borrowings repayable within one year Finance leases	2007 HK$ 63,973 3,611 67,584	2006 HK$ – –
		–

9. LOSS BEFORE TAXATION

Loss before taxation has been arrived at after charging(crediting): Directors’ emoluments* (Note 10) Staff costs Retirement benefit scheme contributions, excluding directors Total employee benefits expense including those of directors Depreciation for property, plant and equipment – owned assets – finance leases assets Auditors’ remuneration Share base payment expense Impairment loss recognised in respect of goodwill Waive of amount due to an ex-director Interest income	2007 HK$ 2,291,889 1,351,069 61,434 3,704,392 387,424 81,539 319,000 3,272,393 2,332,815 (4,792,737) (53,389)	2006 HK$ 836,325 1,184,419 53,405
		2,074,149 214,658 – 250,000 – – – (8)

* Directors’ emoluments of HK$69,682 (2006: HK$535,765) has been recognised during the year, which has been included in direct costs.

– 46 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

10. DIRECTORS’ EMOLUMENTS

The emoluments paid or payable to each of the thirteen (2006: eight) directors were as follows:

Old director: (Note 1) Mr. Liu Ka Lim Mr. Kan Siu Lun Mr. Sun Wai Yan, Victor Miss Lam So Ying Miss Sy Wai Shuen Mr. Shum Kai Wing Mr. Wong Yuk Man, Edmund Mr. Chow Cheuk Lap New director: (Note 2) Mr. Chui Bing Sun Mr. Lee Chi Shing, Caesar Mr. Sui Hi Lam, Alick Mr. Kwok Kwan Hung Mr. Chien Hoe Yong Total emoluments	Directors’ fees HK$ – – – – – 22,258 22,258 22,258 – – 75,806 75,806 75,806	Salaries and other benefits HK$ 160,000 60,000 69,682 180,000 100,000 – – – 510,000 539,031 – – –	2007 Retirement benefit scheme contributions HK$ 1,000 1,000 3,318 5,000 – – – – 8,000 8,847 – – –	Share Options granted HK$ – – – – – – – – – 351,819 – – –	Total HK$ 161,000 61,000 73,000 185,000 100,000 22,258 22,258 22,258 518,000 899,697 75,806 75,806 75,806	Directors’ fees HK$ – – – – – 60,000 60,000 60,000 – – – – –	Salaries and other benefits HK$ – 339,000 221,765 80,000 – – – – – – – – – 640,765	2006 Retirement benefit scheme contributions HK$ – – 10,560 5,000 – – – – – – – – –	Share Options granted HK$ – – – – – – – – – – – – –	Total HK$ – 339,000 232,325 85,000 – 60,000 60,000 60,000 – – – – –
	294,192	1,618,713	27,165	351,819	2,291,889	180,000		15,560	–	836,325

Notes:

During the year, Mr. Liu Ka Lim, Mr. Kan Siu Lun, Mr. Sun Wai Yan, Victor, Miss Lam So Ying, Miss Sy Wai Shuen, Mr. Shum Kai Wing, Mr. Wong Yuk Man, Edmund and Mr. Chow Cheuk Lap were resigned on August 14, 2006.
During the year, Mr. Chui Bing Sun, Mr. Lee Chi Shing, Caesar, Mr. Sui Hi Lam, Alick, Mr. Kwok Kwan Hung and Mr. Chien Hoe Yong were appointed on August 14, 2006.

11. EMPLOYEES’ EMOLUMENTS

Of the five individuals with the highest emoluments in the Group, three (2006: two) were directors of the Company whose emoluments are included in the disclosures in note 10 above. The emoluments of the remaining two (2006: three) individuals were as follows:

Salaries and other benefits Retirement benefit scheme contributions Share options granted	2007 HK$ 412,366 14,775 27,819 454,960	2006 HK$ 655,000 29,750 –
		684,750

– 47 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Their emoluments were within the following bands:

			2007	2006
			Number of	Number of
			employees	employees
HK$nil	to	HK$1,000,000	2	3

During the two years ended March 31, 2007 and March 31, 2006, no emoluments were paid to the five highest paid individuals or any of the directors by the Group as an inducement to join or upon joining the Group or as compensation for loss of office.

12. INCOME TAX EXPENSE

Hong Kong Profits Tax has been provided for in the financial statements at 17.5% on the amount of estimated assessable profits arising in Hong Kong.

No Hong Kong Profits Tax has been provided for in the financial statements for the year ended March 31, 2006 as the Group had not assessable profits for the year.

The tax charge for the year can be reconciled to the loss before tax as follows:

Loss before taxation Tax at Hong Kong Profits Tax rate Tax effect of expenses not deductible for tax purpose Tax effect of income not taxable for the tax purpose Tax effect of tax losses not recongnised Tax expense for the year	2007 HK$ (6,470,377)	2006 HK$ (1,931,800

	(1,132,316) 532,248 (878,085) 1,519,411	(338,065 54,938 (8,863 291,990
	41,258	–

Details of deferred tax are set out in note 26.

13. DIVIDEND

No dividend was paid or proposed during the year ended March 31, 2007, nor has any dividend been proposed since the balance sheet date (2006: nil).

14. LOSS PER SHARE

(a) Basic loss per share

The calculation of basic loss per share is based on the Group’s loss for the year attributable to equity holders of the Company of HK$6,511,635 (2006: HK$1,931,800) and the weighted average number of 894,041,096 (2006: 800,000,000) ordinary shares in issue during the year, calculated as follows:

Weighted average number of ordinary shares

Issued ordinary shares at April 1, 2006 Effect of issuance of new shares (note 23(a)) Effect of exercise of share options (note 23(b)) Weighted average number of ordinary shares for the purpose of basic loss per share	2007 800,000,000 93,808,219 232,877 894,041,096	2006 800,000,000 – –
		800,000,000

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Diluted loss per share

The calculation of diluted loss per share is based on the Group’s loss for the year attributable to equity holders of the Company of approximately HK$6,511,635 and the weighted average number of 980,781,481 ordinary shares in issue during the year, calculated as follows:

Weighted average number of ordinary shares (Diluted)

Weighted average number of ordinary shares for the purpose of basic loss per share Effect of share options Weighted average number of ordinary shares for the purpose of diluted loss per share	2007 894,041,096 86,740,385 980,781,481	2006 800,000,000 –
		800,000,000

Note: No diluted earnings per share have been presented for year ended March 31, 2006 as no share options found for the year ended March 31, 2006.

15. GOODWILL

Cost Acquisition of subsidiaries during the year and at March 31, 2007 Accumulated impairment losses Impairment loss recognised during the year and at March 31, 2007 Carrying amount At March 31, 2007 At March 31, 2006	HK$ 4,665,629
	2,332,815
	2,332,814

	–

Impairment testing of goodwill

Goodwill acquired through business combinations has been allocated to the cash-generating units from services provided, which are reportable segments, for impairment testing.

The recoverable amount of the cash-generating unit from services provided has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by senior management. The discount rate applied to the cash flow projections is come from similar industries and the amount of impairment made during the year determined according to the opinion from the Board of directors.

– 49 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

16. PROPERTY, PLANT AND EQUIPMENT

Buildings held for own use carried at cost HK$ – –	Computer equipment HK$ 162,237 13,240	Office equipment HK$ 142,950 –	Furniture and fixtures HK$ 676,653 –	Motor vehicle HK$ – –	Leasehold improvement HK$ – –	Sub–total HK$ 981,840 13,240	Investment property HK$ – –	Total HK$ 981,840 13,240
– 3,800,000 –	175,477 – 55,151	142,950 24,088 41,026	676,653 72,436 1,380	– 384,920 –	– 887,417 –	995,080 5,168,861 97,557	– 2,600,000 –	995,080 7,768,861 97,557
3,800,000	230,628	208,064	750,469	384,920	887,417	6,261,498	2,600,000	8,861,498
– –	54,219 50,738	30,645 28,590	163,418 135,330	– –	– –	248,282 214,658	– –	248,282 214,658
– – 95,000	104,957 – 63,595	59,235 4,818 38,193	298,748 12,684 150,095	– 76,984 76,984	– 57,097 45,096	462,940 151,583 468,963	– – –	462,940 151,583 468,963
95,000	168,552	102,246	461,527	153,968	102,193	1,083,486	–	1,083,486
3,705,000	62,076	105,818	288,942	230,952	785,224	5,178,012	2,600,000	7,778,012

–	70,520	83,715	377,905	–	–	532,140	–	532,140

The Group’s investment properties were revalued on September 30, 2006 by RHL Appraisal Limited, independent professionally qualified valuers, at HK$2,600,000 on an open market, existing use basis. The investment properties are leased to third parties under operating leases.

As at March 31, 2007, property, plant and equipment of the Group with net book value of approximately HK$265,000 was held under finance lease (2006: Nil).

– 50 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

17. INTERESTS IN SUBSIDIARIES

Details of the Company’s subsidiaries at March 31, 2007 are as follows:

			Issued and
			fully paid	Proportion
			up	of ownership
			ordinary	interest
	Place of	Form of	share	and	voting
Name of subsidiary	incorporation	legal entity	capital	power held		Principal activities
				Directly	Indirectly
				%	%
Galileo Asset	Hong Kong	Limited	HK$10,000	–	100	Inactive
Management		company
Limited
Galileo Asset	The	Limited	US$10,000	–	100	Inactive
Management Group	Cayman	company
Limited	Islands
Galileo Capital	Hong Kong	Limited	HK$15,500,000	–	100	Provision of business
Limited		company				information,
						business brokerage
						and financial
						advisory services in
						Hong Kong
Golden Harvest	Hong Kong	Limited	HK$2	–	100	Provision of
Trading Limited		company				administrative
						services for the
						Group in Hong
						Kong
Galileo Capital	British	Limited	US$10,000	100	–	Investment holding in
Group (BVI)	Virgin	company				Hong Kong
Limited	Islands
Galileo Financial	Hong Kong	Limited	HK$10,000	–	100	Inactive
Services Limited		company
Wealth Supply	British	Limited	US$1	–	100	Inactive
International	Virgin	company
Limited	Islands
Grand Sea Limited	Hong Kong	Limited	HK$3	–	100	Properties holding
		company
Cheung Shing	Hong Kong	Limited	HK$17	–	100	Provision of funeral
Funeral Limited		company				services
Cheung Shing	British	Limited	US$1	–	100	Inactive
Funeral Services	Virgin	company
Limited	Islands

None of the subsidiaries had any debt capital outstanding at the end of the year or at ant time during the year.

– 51 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

18. INVENTORIES

			The
			2007	2006
			HK$	HK$
Merchandize,	at	cost	95,030	–

Included in above, none of amount of inventories is carried at net realisable value.

19. TRADE RECEIVABLES

The general credit terms is seven days from the date of issue payment invoice and the Group also offers extended credit terms to certain customers with reference to their respective financial background, reputation and credit worthiness.

At March 31, 2007, all trade receivables were outstanding for less than 90 days (2006: 90 days).

The Directors consider that the carrying amount of the Group’s trade receivables approximates their fair value.

20. AMOUNT DUE TO A DIRECTOR

Mr. Liu Ka Lim Mr. Chui Bing Sun	The Group and the Company 2007 2006 HK$ HK$ – 4,362,737 758,368 – 758,368 4,362,737	The Group and the Company 2007 2006 HK$ HK$ – 4,362,737 758,368 – 758,368 4,362,737
		4,362,737

The amount due to a director is unsecured, interest free and repayable on demand.

The Directors consider that the carrying amount of amount due to a director approximates its fair value.

– 52 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

21. OBLIGATIONS UNDER FINANCE LEASES

The Group Minimum lease payments Present value of minimum lease payment 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 94,615 – 85,587 – 30,340 – 24,079 –	The Group Minimum lease payments Present value of minimum lease payment 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 94,615 – 85,587 – 30,340 – 24,079 –	The Group Minimum lease payments Present value of minimum lease payment 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 94,615 – 85,587 – 30,340 – 24,079 –	The Group Minimum lease payments Present value of minimum lease payment 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 94,615 – 85,587 – 30,340 – 24,079 –
124,955 (15,289)	– –	109,666 –	– –
109,666	–	109,666	–
		(85,587)	–
		24,079	–

It is the Group’s policy to lease certain of its fixed assets under finance leases. The average lease term is one year. For the year ended March 31, 2007, the average effective borrowing rate was 3.29% p.a.. Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

22. OTHER BORROWINGS

The amount is unsecured and carried interest at 6% per annum on fixed interest rate. The loan amount is borrowed from an individual third party in order to provide working capital to the Group. The amount was repayable with twelve months.

The Directors consider that the carrying amount of the other borrowings approximates to its fair value.

23. SHARE CAPITAL OF THE COMPANY

Ordinary shares of HK$0.02 each Authorised: At April 1, 2005, March 31, 2006 and March 31, 2007 Issued and fully paid: At April 1, 2005 and March 31, 2006 Issuance of shares (note a) Effect of exercise of share options (note b) At March 31, 2007	Number of shares 6,000,000,000	Amount HK$ 120,000,000

	800,000,000 160,000,000 5,000,000	16,000,000 3,200,000 100,000
	965,000,000	19,300,000

– 53 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The movements in the ordinary share capital during the year ended March 31, 2007 are as follows:

Note a: Upon the completion of placing of new shares under general mandate on August 30, 2006, the Company issued and allotted 160,000,000 shares of the share capital of the Company (“Placing Shares”) at a price of HK$0.07 per share. The gross proceeds from placing new shares before issue expenses amounted to HK$11,200,000.

All new shares issued ranked pari passu in all respects with existing ordinary shares of the Company.

Note b: On March 19, 2007, 5,000,000 share options exercised and transferred into shares in the share capital of the Company at an exercise price of HK$0.3 per share. The gross proceeds from exercising the share options is amounted to HK$1,500,000.

All new shares issued ranked pari passu in all respects with the existing ordinary shares of the Company.

24. SHARE OPTION SCHEMES

The Company operates share option schemes for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations. Eligible participants of the Option Scheme include the Company’s directors, including independent non-executive directors, other employees of the Group, any person or entity providing research, development or other technological support to the Group, and any other person or entity determined by the directors as having contributed or may contribute to the development and growth of the Group. The Company has two share option schemes, one was adopted on November 29, 2000 (the “Pre-IPO Share Option Scheme”) and another was adopted on December 5, 2006 (the “New Scheme”).

(a) Pre-IPO Share Option Scheme

On November 29, 2000, the Company adopted a share option scheme which was valid and effective for a period not exceeding ten years commencing from November 29, 2000.

Under the Pre-IPO Share Option Scheme, the eligible participants (including any employee and executive director of the Company or any of its subsidiaries, who has full time employment with the Company or any such subsidiary at the time) may be granted an option to subscribe for shares of the Company.

The maximum number of shares in respect of which share options may be granted under the Scheme may not exceed, in nominal amount, 30% of the issued share capital of the Company. The maximum number of shares issuable under share options to each eligible participant in the Scheme is limited to 25% of the maximum aggregate number of shares for the time being issued and which may fall to be issued under the Scheme.

The offer of a grant of share options may be accepted within 21 days inclusive of, and from the date of the offer. The exercise period of the share options granted is determined by the directors, and commences after a certain vesting period and ends on a date which is not later than 10 years from the respective date when the share options are granted, subject to the provisions for any terminations thereof.

In respect of the share options to be granted after the listing of the Company’s shares on the GME of the Stock Exchange, the subscription price will be a price determined by the directors, but may not be less than the highest of the closing price of the shares on the GEM of the Stock Exchange on the date of grant of the particular option or the average of the closing prices of the shares on the GEM of the Stock Exchange for the five trading days immediately preceding the date of the offer of grant of the particular option or the nominal value of a share.

In respect of the share options granted prior to the listing of the Company’s shares on the GME of the Stock Exchange (the “Pre-IPO Share Options”), the subscription price of the Pre-ISO Share Options should not be less than the nominal value of a share.

Share options do not confer rights on the holders to dividends or to vote at shareholders’ meetings.

There was no outstanding share option as at March 31, 2007.

– 54 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The Directors consider that the Pre-IPO Share Options Scheme does not comply with certain supplementary guidance published by the Stock Exchange concerning Rule 23.03(13) of the GEM Listing Rules and the note immediately followed the rule. No further share options will be granted under the Pre-IPO Share Options Plan.

(b) New Scheme

On December 5, 2006, the Company adopted a new share option scheme. The New Scheme became valid and effective for a period of ten years commencing from the adoption of the New Scheme, after which period no further options will be granted but the provisions of the New Scheme shall remain in full force and effect in all other respects.

The participants of the New Scheme to whom options may be granted by the Board shall include any director, employee, consultant, adviser, agent, contractor, customer or supplier of any member of the Group whom the Board in its sole discretion considers eligible for the New Scheme on the basis of his/her contribution to the development and growth of the Group.

No participant shall be granted an option if the total number of Shares issued and to be issued upon exercise of the options granted and to be granted (including options exercised, cancelled and outstanding) in any 12 month period up to and including the date of grant to such participant would exceed 1% of the shares for the time being in issue unless the proposed grant has been approved by the shareholders in general meeting with the proposed grantee and his associates abstaining from voting. The number and terms of options to be granted to each grantee must be fixed before the shareholders’ approval and the date of meeting of the Board for proposing such further grant should be taken as the date of grant for the purpose of calculating the subscription price.

The total number of shares which may be issued upon exercise of all options to be granted under the New Scheme and all other share option schemes of the Company (the “Scheme Mandate Limit’) shall not exceed 10% of the total number of Shares in issue unless the Company obtains a fresh approval from its shareholders pursuant to the approval of the shareholders in general meetings. At March 31, 2007, the number of shares issuable under share options granted under the Share Option Plan was 72,750,000, which represented approximately 7.5% of the Company’s shares in issue as at that date. The limit on the number of shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the New Scheme and any other schemes shall not exceed 30% of the shares of the Company from time to time.

The offer of a grant of share options may be accepted within 14 days after the date on which the offer becomes or is declared unconditional. The exercise period of the share options granted is determinable by the board of directors, and commences on any date after the date of grant and ends on a date which is not later than ten years from the date of offer of the share options or the expiry date of the New Scheme, if earlier.

The exercise price of share options is determined by the board of directors, but may not be less than the higher of (i) the closing price of the Company’s shares on the GEM of the Stock Exchange on the date of grant of the option; (ii) the average of the closing prices of the Company’s shares on the GEM of the Stock Exchange for the five trading days immediately preceding the date of grant of the option; and (iii) the nominal value of the shares of the Company.

The Company will comply with the disclosure requirements under Chapter 23 of the GEM Listing Rules, including without limitation disclosures in the annual and interim reports of the Company including details of the options granted to the following persons: (i) each of the connected person; (ii) each participant with options granted in excess of the limit; (iii) aggregate figures for the employees; (iv) aggregate figures for supplier of goods or services; and (v) all other participants as an aggregate whole.

– 55 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The following share options were outstanding under the Option Scheme during the year:

Name of category of participant Director Mr. Lee Chi Shing, Caesar Consultants In aggregate Other employees In aggregate	Number of share options At April 1, 2006 Granted during the year Exercised during the year At March 31, 2007 Date of exercise of share option Date of grant of share option(1) Exercise period of share options Exercise price of share options(2),(3) HK$ – 2,500,000 – 2,500,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 1,000,000 – 1,000,000 – 23-02-2007 23-02-2008 to 22-02-2017 0.300 – 74,000,000 (5,000,000) 69,000,000 19-03-2007 23-02-2007 23-02-2007 to 22-02-2008 0.300 – 250,000 – 250,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 77,750,000 (5,000,000) 72,750,000	Number of share options At April 1, 2006 Granted during the year Exercised during the year At March 31, 2007 Date of exercise of share option Date of grant of share option(1) Exercise period of share options Exercise price of share options(2),(3) HK$ – 2,500,000 – 2,500,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 1,000,000 – 1,000,000 – 23-02-2007 23-02-2008 to 22-02-2017 0.300 – 74,000,000 (5,000,000) 69,000,000 19-03-2007 23-02-2007 23-02-2007 to 22-02-2008 0.300 – 250,000 – 250,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 77,750,000 (5,000,000) 72,750,000	Number of share options At April 1, 2006 Granted during the year Exercised during the year At March 31, 2007 Date of exercise of share option Date of grant of share option(1) Exercise period of share options Exercise price of share options(2),(3) HK$ – 2,500,000 – 2,500,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 1,000,000 – 1,000,000 – 23-02-2007 23-02-2008 to 22-02-2017 0.300 – 74,000,000 (5,000,000) 69,000,000 19-03-2007 23-02-2007 23-02-2007 to 22-02-2008 0.300 – 250,000 – 250,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 77,750,000 (5,000,000) 72,750,000	Number of share options At April 1, 2006 Granted during the year Exercised during the year At March 31, 2007 Date of exercise of share option Date of grant of share option(1) Exercise period of share options Exercise price of share options(2),(3) HK$ – 2,500,000 – 2,500,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 1,000,000 – 1,000,000 – 23-02-2007 23-02-2008 to 22-02-2017 0.300 – 74,000,000 (5,000,000) 69,000,000 19-03-2007 23-02-2007 23-02-2007 to 22-02-2008 0.300 – 250,000 – 250,000 – 19-12-2006 19-12-2007 to 18-12-2016 0.418 – 77,750,000 (5,000,000) 72,750,000
	At April 1, 2006 – – – –	Granted during the year 2,500,000 1,000,000 74,000,000 250,000	Exercised during the year – – (5,000,000) –	At March 31, 2007 2,500,000 1,000,000 69,000,000 250,000
	–	77,750,000	(5,000,000)

(1) The vesting period of the share options is from the date of the grant until the commencement of the exercise period.
(2) The exercise price of the share option is subject to adjustment in the case of a capitalisation issue, rights issue, sub-division or consolidation of the Company’s shares or reduction of the Company’s share capital.
(3) The number of share options and exercised price had been adjusted following the completion of open offer. These fair values of the share options granted on December 19, 2006 and February 23, 2007 were calculated using the Black-Scholes pricing model. The inputs into the model were at the date of grant of options as follows:

	December 19,	February 23,
	2006	2007
Weighted average share price	0.408	0.280
Exercise price	0.418	0.300
Expected volatility	70%	70%
Expected life (year)	6	6
Risk-free rate	3.57%	3.69-4.04%
Expected dividend yield	0%	0%
Employee exit rate pre-vesting	0%	0%

Expected volatility was determined by using the historical volatility of the Company’s share price over the previous 1 year. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations.

The Group recognised the total expense of HK$3,272,393 for the year ended March 31, 2007 (2006: Nil) in relation to share options granted by the Company.

– 56 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

At March 31, 2007, the Company had 72,750,000 share options (2006: Nil) outstanding under the Option Scheme. The exercise in full of the outstanding share options would, under the present capital structure of the Company, result in the issue of 72,750,000 additional ordinary shares of HK$0.02 each of the Company and additional share capital of HK$1,455,000 (2006: Nil) and share premium of approximately HK$20,414,500 (2006: Nil) (before share issue expenses).

The number and weighted average exercise prices of share options are as follows:

	2007		2006
	Weighted		Weighted
	average	Number of	average	Number of
	exercise price	options	exercise price	options
Outstanding at the
beginning of the year	–	–	–	–
Exercised during the
year	0.31	5,000,000	–	–
Granted during the year	0.31	77,750,000	–	–
Outstanding at the end
of the year	0.31	72,750,000	–	–

Exercisable at the end
of the year	0.31	72,750,000	–	–

The weighted average share price at the date of exercise for shares options exercised during the year was HK$0.31 (2006: not applicable).

The options outstanding at March 31, 2007 had an exercise price of HK$0.31 (2006: not applicable) and a weighted average remaining contractual life of 11.3 years (2006: not applicable).

25. RESERVE OF THE COMPANY

At April 1, 2005 Loss for the year At March 31, 2006 Placing of new shares Recognition of share issue expenses Recognition of equity- settled share base payment Exercise of share options Loss for the year At March 31, 2007	Share premium HK$ 8,095,956 –	Contributed surplus HK$ 367,874 –	Share option reserve Accumulated loss HK$ HK$ – (27,341,880) – (1,910,350)	Share option reserve Accumulated loss HK$ HK$ – (27,341,880) – (1,910,350)	Total HK$ (18,878,050) (1,910,350)
	8,095,956 8,000,000 (405,120) – 1,400,000 –	367,874 – – – – –	– – – 3,558,215 (285,822) –	(29,252,230) – – (285,822) 285,822 (1,380,580)	(20,788,400) 8,000,000 (405,120) 3,272,393 1,400,000 (1,380,580)
	17,090,836	367,874	3,272,393	(30,632,810)	(9,901,707)

Note: The contributed surplus of the Company represents the difference between the then consolidated net assets of the acquired subsidiaries over the nominal value of the share the capital of the Company issued in exchange therefore.

– 57 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

26. DEFERRED TAX

The following are the major deferred tax liabilities/assets recognized by the Group, and the movements thereon, during current and prior years.

The Group

At April 1, 2005 (Charge) credit to the income statement for the year At March 31, 2006 (Charge) credit to the income statement for the year At March 31, 2007	Accelerated tax depreciation HK$ (91,191) 6,705	Tax losses HK$ 91,191 (6,705)	Total HK$ – –
	(84,486) (164,098)	84,486 164,098	– –
	(248,584)	248,584	–

The following is the analysis of the deferred tax balances (after offset) for balance sheet purposes:

Deferred tax liabilities Deferred tax assets	2007 HK$ (248,584) 248,584 –	2006 HK$ (84,486 84,486
		–

At the balance sheet date, the Group has unused tax losses of approximately HK$22,872,000 (2006: HK$23,270,000) available for offset against future profits. A deferred tax asset has been recognized in respect of approximately HK$1,420,480 (2006: HK$483,000) of such losses. No deferred tax asset has been recognized in respect of the remaining tax losses of approximately HK$22,872,000 (2006: HK$22,787,000) due to the unpredictability of future profits streams. All losses may be carried forward indefinitely subject to the approvals of Inland Revenue Department in Hong Kong.

27. RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

Compensation of key management personnel

The remuneration of directors and other members of key executives during the year was as follows:

Short-term benefits Post-employment benefits Share options granted	2007 HK$ 1,049,031 27,165 379,638 1,455,834	2006 HK$ 980,765 22,560 –
		1,003,325

The remuneration of directors and key executives is determined, in consultation with the Remuneration Committee, by the Directors having regard to the performance of individuals and markets trends.

– 58 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

28. OPERATING LEASE COMMITMENTS

The Group made approximately HK$650,155 (2006: HK$635,144) and HK$46,000 (2006: HK$168,000) minimum lease payments under operating lease during the year in respect of office premises and motor vehicles respectively.

(a) The Group as lessee

At the balance sheet date, the Group had commitments for future minimum lease payments in respect of office premises and motor vehicle under non-cancellable operating lease which fall due as follows:

Within one year In the second to fifth year inclusive	2007 HK$ 230,626 461,252 691,878	2006 HK$ 495,720 –
		495,720

Leases are negotiated for an average term of three years and rentals fixed throughout the lease period.

(b) The Group as lesser

At the balance sheet date, the Group had contracted with tenants for the following future minimum lease payments:

			2007	2006
			HK$	HK$
Within	one	year	180,000	–

Leases are negotiated for an average term of two years and rentals fixed throughout the lease period.

– 59 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

29. ACQUISITION OF SUBSIDIARIES

During the year, the group acquired two subsidiaries for an aggregate cash consideration of HK$12,185,118. This transaction has been accounted for by the acquisition method of accounting.

Net assets acquired: Property, plant and equipment Inventories Trade and other receivables Bank balances and cash Deposits and received Accrual and other payables Obligation under finance leases Tax payable Goodwill (Note 15) Total consideration Satisfied by: Cash Net cash outflow arising on acquisition: Cash consideration Less: Bank balances and cash acquired	HK$ 7,617,278 99,200 18,700 351 (30.000) (81,223) (97,222) (7,595) 7,519,489 4,665,629 12,185,118 12,185,118 12,185,118 (351) 12,184,767

30. RETIREMENT BENEFITS SCHEME

The Group operates a Mandatory Provident Fund Scheme (the “Scheme”) for all its qualifying employees. The assets of the Scheme are held separately from those of the Group, in funds under the control of trustees. The Group contributes the lower of 5% of the relevant payroll costs or HK$1,000 for each of its employees to the Scheme per month, which contribution is matched by employees.

31. CONTINGENT LIABILITIES

As at March 31, 2007, the Group had no contingent liabilities found.

32. MAJOR NON-CASH TRANSACTIONS

During the year, the Group entered into finance lease arrangements in respect of property, plant and equipment with a total capital value at the inception of the leases of HK$39,047 (2006: Nil).

– 60 –

APPENDIX I FINANCIAL INFORMATION OF THE GROUP

3. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007

The following are the unaudited consolidated financial statements of the Group extracted from the half-yearly results of the Company for the three months and six months ended 30 September 2007 together with the comparative unaudited figures for the corresponding period in 2006.

CONSOLIDATED INCOME STATEMENT

For the three months and the six months ended 30 September 2007

For the three months ended 30 September 2007 2006 HK$ HK$ Unaudited Unaudited 1,421,111 170,000 (870,603) (10,500)	For the three months ended 30 September 2007 2006 HK$ HK$ Unaudited Unaudited 1,421,111 170,000 (870,603) (10,500)	For the six months ended 30 September 2007 2006 HK$ HK$ Unaudited Unaudited 2,668,178 450,000 (1,577,095) (69,682) 1,091,083 380,318 124,362 4,792,741 (11,166,967) (2,358,877) (181,152) (847) (10,132,674) 2,813,335 – – (10,132,674) 2,813,335 – – HK(1.01) cent HK0.34 cent	For the six months ended 30 September 2007 2006 HK$ HK$ Unaudited Unaudited 2,668,178 450,000 (1,577,095) (69,682) 1,091,083 380,318 124,362 4,792,741 (11,166,967) (2,358,877) (181,152) (847) (10,132,674) 2,813,335 – – (10,132,674) 2,813,335 – – HK(1.01) cent HK0.34 cent
550,508 9,792 (8,374,978) (53,020) (7,867,698) –	159,500 4,792,737 (1,526,801) (846) 3,424,590 –	1,091,083 124,362 (11,166,967) (181,152) (10,132,674) –	380,318 4,792,741 (2,358,877 (847
			2,813,335 –
(7,867,698) – HK(0.75) cent	3,424,590 – HK0.41 cent	(10,132,674) – HK(1.01) cent

– 61 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONDENSED CONSOLIDATED BALANCE SHEET

As at 30 September 2007

At 30 September 2007 Notes HK$ Unaudited Non-current assets Goodwill 1,166,407 Investment property 2,600,000 Property, Plant & Equipment 7 4,987,395 8,753,802 Current assets Inventories 87,436 Trade receivables 8 145,293 Prepayments, deposits and other receivables 13a 20,280,658 Bank balances and cash 40,528,296 61,041,683 Current liabilities Accruals and other payables 1,241,418 Deposits received 30,000 Amount due to a director 9 27,284 Bank loan 10 253,484 Obligation under finance leases 27,255 Other borrowings – Tax payable 48,853 1,628,294 Net current assets (liabilities) 59,413,389 Total assets less current liabilities 68,167,191 Non-current liabilities Bank loan 10 3,684,893 Obligation under finance leases 20,174 3,705,067 64,462,124 Capital and reserves Share Capital 11 23,964,000 Reserves 40,498,124 64,462,124	At 30 September 2007 Notes HK$ Unaudited Non-current assets Goodwill 1,166,407 Investment property 2,600,000 Property, Plant & Equipment 7 4,987,395 8,753,802 Current assets Inventories 87,436 Trade receivables 8 145,293 Prepayments, deposits and other receivables 13a 20,280,658 Bank balances and cash 40,528,296 61,041,683 Current liabilities Accruals and other payables 1,241,418 Deposits received 30,000 Amount due to a director 9 27,284 Bank loan 10 253,484 Obligation under finance leases 27,255 Other borrowings – Tax payable 48,853 1,628,294 Net current assets (liabilities) 59,413,389 Total assets less current liabilities 68,167,191 Non-current liabilities Bank loan 10 3,684,893 Obligation under finance leases 20,174 3,705,067 64,462,124 Capital and reserves Share Capital 11 23,964,000 Reserves 40,498,124 64,462,124	At 31 March 2007 HK$ Audited 2,332,814 2,600,000 5,178,012 10,110,826 95,030 96,355 590,043 1,801,684 2,583,112 1,402,413 30,000 758,368 – 85,587 5,000,000 48,853 7,325,221 (4,742,109) 5,368,717 – 24,079 24,079 5,344,638 19,300,000 (13,955,362) 5,344,638
	8,753,802 87,436 145,293 20,280,658 40,528,296 61,041,683 1,241,418 30,000 27,284 253,484 27,255 – 48,853 1,628,294 59,413,389 68,167,191 3,684,893 20,174 3,705,067	10,110,826
		95,030 96,355 590,043 1,801,684
		2,583,112
		1,402,413 30,000 758,368 – 85,587 5,000,000 48,853
		7,325,221
		(4,742,109
		5,368,717
		– 24,079
		24,079
	64,462,124
	23,964,000 40,498,124	19,300,000 (13,955,362
	64,462,124

– 62 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2007

Share capital HK$ Unaudited 16,000,000 3,200,000 – –	Share premium HK$ Unaudited 8,095,956 8,000,000 (405,120) –	Reserves Merger deficit Share option reserve Accumulated losses HK$ HK$ HK$ Unaudited Unaudited Unaudited (119,998) – (27,686,958) – – – – – – – – 2,813,335	Reserves Merger deficit Share option reserve Accumulated losses HK$ HK$ HK$ Unaudited Unaudited Unaudited (119,998) – (27,686,958) – – – – – – – – 2,813,335	Reserves Merger deficit Share option reserve Accumulated losses HK$ HK$ HK$ Unaudited Unaudited Unaudited (119,998) – (27,686,958) – – – – – – – – 2,813,335	Total HK$ Unaudited (3,711,000) 11,200,000 (405,120) 2,813,335 9,897,215 5,344,638 53,542,500 (1,582,852) 5,299,512 11,991,000 (10,132,674) 64,462,124
19,200,000 19,300,000 3,894,000 – – 770,000 –	15,690,836 17,090,836 49,648,500 (1,582,852) – 13,257,202 –	(119,998) (119,998) – – – – –	– 3,272,393 – – 5,299,512 (2,036,202) –	(24,873,623) (34,198,593) – – – – (10,132,674)	9,897,215
					5,344,638 53,542,500 (1,582,852 5,299,512 11,991,000 (10,132,674
23,964,000	78,413,686	(119,998)	6,535,703	(44,331,267)

– 63 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 September 2007

Net cash used in operating activities Net cash used in investing activities Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Analysis of the balances of cash and cash equivalents Bank balances and cash	For the six months ended 30 September 2007 2006 HK$ HK$ Unaudited Unaudited (22,992,968) (1,047,746) (194,972) (57,130) 61,914,552 12,194,355 38,726,612 11,089,479 1,801,684 330,821 40,528,296 11,420,300 40,528,296 11,420,300

– 64 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL RESULTS

1. Basis of preparation

The unaudited consolidated results have been prepared under the historical cost convention except for investment property and certain financial instruments, which are measured at fair values.

The unaudited interim consolidated financial statements have been prepared in accordance with the Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and applicable disclosure requirements of the GEM Listing Rules. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended 31 March 2007.

The HKICPA has issued a number of new and revised Hong Kong Financial Reporting Standards. For those which are effective for accounting periods beginning on 1 January 2007, the adoption has no significant impact on the Group’s results and financial position; and for those which are not yet effective, the Group is in the process of assessing their impact on the Group’s results and financial position.

The principal accounting polices used in the preparation of the interim financial statements are consistent with those used in the financial statements for the year ended 31 March 2007.

The unaudited consolidated results of the Group for the six months ended 30 September 2007 are unaudited but have been reviewed by the Company’s Audit Committee.

2. Revenue and segment information

Revenue represents the net amounts received and receivable from services provided by the Group to outside customers and rental income.

Segment information is presented by way of two segment formats: (i) on a primary segment reporting basis, by business segment; and (ii) on a secondary segment reporting basis, by geographical segment.

Business segment

The Group’s operating businesses are structured and managed separately, according to the nature of their operation and services they provided. Each of the Group’s business segment represents a strategic business unit that offers services which are subject to risk and returns that are different from those of the other business segments.

– 65 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

For management purpose, the Group is currently organized into two operating divisions – business consultancy services and funeral services. Segment information about these businesses is presented below.

Business consultancy 2007 2006 HK$ HK$ 235,000 450,000	Business consultancy 2007 2006 HK$ HK$ 235,000 450,000	Funeral services Others For the six months ended 30 September 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 2,343,178 – 90,000 –	Funeral services Others For the six months ended 30 September 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 2,343,178 – 90,000 –	Funeral services Others For the six months ended 30 September 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 2,343,178 – 90,000 –	Funeral services Others For the six months ended 30 September 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 2,343,178 – 90,000 –	Consolidated 2007 2006 HK$ HK$ 2,668,178 450,000	Consolidated 2007 2006 HK$ HK$ 2,668,178 450,000
(1,417,598)	(906,851)	(60,384)	–	(1,389,939)	–	(2,867,921) 19,698 (7,103,299) (181,152) (10,132,674) –	(906,851) 4,792,739 (1,071,706) (847)
							2,813,335 –
						(10,132,674)	2,813,335

Geographical segment

In determining the Group’s geographical segment, turnover is attributed to the segments based on the location of the customers. The Group had only one geographical segment for the period ended 30 September 2007 and 30 September 2006 which was Hong Kong based geographical segment.

3. (Loss) Profit before taxation

(Loss) Profit before taxation is arrived at after charging (crediting):

	For the six months	For the six months	ended
	30 September
	2007		2006
	HK$		HK$
Depreciation for property, plant and equipment
– owned assets	121,006	111,644
– finance lease assets	42,397		–
Share base payment expense	5,299,512		–
Impairment loss recognised in respect of goodwill	1,166,407		–
Waive of amount due to an ex-director	–	(4,792,737)
Interest income	(23,150)		(4)

4. Income tax expense

No provision for Hong Kong Profits Tax has been provided as the Group did not have any assessable profits arising in Hong Kong during the period (2006: Nil).

5. Dividend

The Directors do not recommend the payment of an interim dividend for the six months ended 30 September 2007 (2006: Nil).

– 66 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

6. (Loss) earnings per share

The calculation of basic (loss) earnings per share attributable to the ordinary equity holders of the Company is based on the following data:

(Loss) Profit for the period and (loss) profit for the purpose of determining basic (loss) earnings per share Weighted average number of ordinary shares for the purpose of determining basic (loss) earnings per share	For the three months ended 30 September 2007 2006 HK$ HK$ (7,867,698) 3,424,590 Number of shares Number of shares 1,045,532,609 831,304,348	For the six months ended 30 September 2007 2006 HK$ HK$ (10,132,674) 2,813,335 Number of shares Number of shares 1,007,073,770 815,737,705	For the six months ended 30 September 2007 2006 HK$ HK$ (10,132,674) 2,813,335 Number of shares Number of shares 1,007,073,770 815,737,705

			Number of shares 815,737,705

Diluted loss per share for the period for three months and six months ended 30 September 2007 are not presented as the potential ordinary shares outstanding had an anti-dilutive effect on the basic loss per share for the periods ended 30 September 2007. No diluted earnings per share for the period for three months and six months ended 30 September 2006 have been presented as no share options existed.

7. Property, plant and equipment

During the six months period, the Group spent HK$283,272 on property, plant and equipment (2006: HK$96,177). The amount disposed during the six months period was HK$998,722 of which the net book value was HK$310,486 (2006: Nil).

8. Trade receivables

The general credit terms is seven days from the date of issue of payment invoices and the Group also offers extended credit terms to certain customers with reference to their respective financial background, reputation and credit worthiness.

At 30 September 2007, all trade receivables, net of allowances, were outstanding for less than 90 days (2006: 90 days).

The Directors consider that the carrying amount of the Group’s trade receivables approximate their fair values.

9. Amount due to a director

The amount due to a director, Mr. Chui Bing Sun, is unsecured, interest free and repayable on demand.

The Directors consider that the carrying amount of amount due to a director approximates its fair value.

10. Bank loan

Bank loan is secured by a charge over the fixed assets of a subsidiary company.

– 67 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

11. Share capital

Ordinary shares of HK$0.02 each Authorised: At 31 March 2007 and 30 September 2007 Issued and fully paid: At 31 March 2007 Issue of shares (Note a) Effect of exercise of share options (Note b) At 30 September 2007	Number of shares 6,000,000,000	Amounts HK$ 120,000,000

	965,000,000 194,700,000 38,500,000	19,300,000 3,894,000 770,000
	1,198,200,000	23,964,000

Note a: Upon the completion of placing of existing shares on 24 August 2007, the Company issued and allotted 194,700,000 shares of the share capital of the Company at a price of HK$0.275 per share. The gross proceeds from placing and subscription of shares before issue expenses amounted to HK$53,542,500.

All new shares issued ranked pari passu in all respects with existing ordinary shares of the Company.

Note b: During the six months ended 30 September 2007, 28,700,000 share options and 9,800,000 share options were exercised at an exercise price of HK$0.3 and HK$0.345 respectively and transferred into shares in the share capital of the Company. The gross proceeds from exercising the share options are amounted to HK$11,991,000.

All new shares issued ranked pari passu in all respects with existing ordinary shares of the Company.

12. Related party transactions

Compensation of key management personnel

The remuneration of directors and key executives as key management of the Group during the period was as follows:

Short-term benefits Post-employment benefits Share options granted	For the three months ended 30 September 2007 2006 HK$ HK$ 745,259 344,193 15,000 6,347 122,078 – 882,337 350,540	For the six months ended 30 September 2007 2006 HK$ HK$ 1,189,259 483,875 27,000 11,165 242,830 – 1,459,089 495,040	For the six months ended 30 September 2007 2006 HK$ HK$ 1,189,259 483,875 27,000 11,165 242,830 – 1,459,089 495,040
			495,040

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

13. Post balance sheet events

(a) On 18 September 2007, a wholly owned subsidiary of the Company (the “Purchaser”) entered into an agreement (the “S & P Agreement”) with First Cheer Holdings Limited (the “Vendor”), pursuant to which the Purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose the entire issued share capital of Loyal King Investments Limited and all liabilities owing or incurred by the Loyal King Investments Limited to the Vendor due and payable on or at any time prior to the completion of the acquisition from the Vendor for a total consideration of HK$194 million. Completion shall take place after all the conditions set out in the S & P Agreement have been fulfilled (or as the case maybe, waived). The consideration shall be payable as to (i) HK$154 million by the Purchaser procuring the Company to allot and issue the Consideration Shares to the Vendor credited as fully paid on completion of the acquisition; (ii) HK$20 million in cash by the Purchaser to the Vendor as deposit upon signing of the S & P Agreement; and (iii) HK$20 million in cash by the Purchaser to the Vendor on completion. The principal terms of the S & P Agreement were set out in announcement dated 28 September 2007.
(b) On 15 October 2007, the Company entered into a placing agreement with a placing agent pursuant to which the Company has conditionally agreed to place, through the placing agent, 80,000,000 placing shares at a price of HK$1.58 per placing share. The gross proceeds from the placing will be approximately HK$126.40 million.

– 69 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE NINE MONTHS ENDED 31 DECEMBER 2007

The following are the unaudited consolidated financial statements of the Group extracted from the nine months results of the Company for the three months and nine months ended 31 December 2007 together with the comparative unaudited figures for the corresponding period in 2006.

Condensed Consolidated Income Statement

For the three months and nine months ended 31 December 2007

For the three months ended 31 December 2007 2006 HK$ HK$ Unaudited Unaudited 3,579,836 270,000 (2,512,010) –	For the three months ended 31 December 2007 2006 HK$ HK$ Unaudited Unaudited 3,579,836 270,000 (2,512,010) –	For the nine months ended 31 December 2007 2006 HK$ HK$ Unaudited Unaudited 6,248,014 720,000 (4,089,105) (69,682) 2,158,909 650,318 452,448 4,846,245 (20,463,350) (4,699,714) (245,387) (1,354) (18,097,380) 795,495 (141,000) – (18,238,380) 795,495 (18,440,528) 795,495 202,148 – (18,238,380) 795,495 – – HK(1.66) cent HK0.09 cent	For the nine months ended 31 December 2007 2006 HK$ HK$ Unaudited Unaudited 6,248,014 720,000 (4,089,105) (69,682) 2,158,909 650,318 452,448 4,846,245 (20,463,350) (4,699,714) (245,387) (1,354) (18,097,380) 795,495 (141,000) – (18,238,380) 795,495 (18,440,528) 795,495 202,148 – (18,238,380) 795,495 – – HK(1.66) cent HK0.09 cent
1,067,826 328,086 (9,296,383) (64,235) (7,964,706) (141,000)	270,000 53,504 (2,340,837) (507) (2,017,840) –	2,158,909 452,448 (20,463,350) (245,387) (18,097,380) (141,000)	650,318 4,846,245 (4,699,714 (1,354
			795,495 –
(8,105,706)	(2,017,840)	(18,238,380)
(8,307,854) 202,148	(2,017,840) –	(18,440,528) 202,148	795,495 –
(8,105,706) – HK(0.63) cent	(2,017,840) – HK(0.21) cent	(18,238,380) – HK(1.66) cent

– 70 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Condensed Consolidated Statement of Changes in Equity

For the nine months ended 31 December 2007

Attributable to equity holders of the Company

Share capital HK$ Unaudited 16,000,000 3,200,000 – – – 19,200,000	Share premium HK$ Unaudited 8,095,956 8,000,000 (405,120) – – 15,690,836	Merger deficit HK$ Unaudited (119,998) – – – – (119,998)	Share option reserve Accumulated losses HK$ HK$ Unaudited Unaudited – (27,686,958) – – – – 17,472 – – 795,495 17,472 (26,891,463)	Share option reserve Accumulated losses HK$ HK$ Unaudited Unaudited – (27,686,958) – – – – 17,472 – – 795,495 17,472 (26,891,463)	Total HK$ Unaudited (3,711,000) 11,200,000 (405,120) 17,472 795,495 7,896,847	Minority interests HK$ Unaudited – – – – – –	Total HK$ Unaudited (3,711,000) 11,200,000 (405,120) 17,472 795,495
							7,896,847

19,300,000 5,494,000 5,600,000 – 895,000 – – –	17,090,836 174,448,500 148,400,000 (4,632,851) 16,009,006 – – –	(119,998) – – – – – – –	3,272,393 – – – (2,433,506) 5,716,284 – –	(34,198,593) – – – – – – (18,440,528)	5,344,638 179,942,500 154,000,000 (4,632,851) 14,470,500 5,716,284 – (18,440,528)	– – – – – – 2,500,958 202,148	5,344,638 179,942,500 154,000,000 (4,632,851) 14,470,500 5,716,284 2,500,958 (18,238,380)
31,289,000 Note a	351,315,491 Note a	(119,998) Note b	6,555,171	(52,639,121)	336,400,543	2,703,106	339,103,649

Note a: Upon the completion of the placing of existing shares and subscription of new shares on 24 August 2007 and the placing of new shares on 5 November 2007, the Company issued and allotted 194,700,000 and 80,000,000 shares of the Company at a price of HK$0.275 and HK$1.58 per share respectively. The gross proceeds from these placing of shares before issue expenses amounted to HK179,942,500.

On 14 December 2007, the Company issued and allotted 280,000,000 shares to First Cheer Holdings Limited as partly consideration of HK$154 million for the acquisition of the three subsidiaries.

During the nine months ended 31 December 2007, 44,750,000 share options were exercised and transferred into shares in the share capital of the Company. The gross proceeds from exercising these share options are amounted to HK$14,470,500.

Note b: The merger deficit of the Group represents the difference between the nominal value of the shares of acquired subsidiaries over the nominal value of the share capital of the Company issued in exchange therefor.

– 71 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes to the Unaudited Consolidated Financial Results

1. Basis of preparation

The unaudited consolidated results have been prepared under the historical cost convention except for investment property and certain financial instruments, which are measured at fair values.

The unaudited consolidated results have been prepared in accordance with the Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”), accounting principles generally accepted in Hong Kong and applicable disclosure requirements of the GEM Listing Rules.

The accounting policies and methods of computation used in the preparation of the consolidated financial statements for the nine months 31 December 2007 are consistent with those used in the consolidated financial statements of the Company for the year ended 31 March 2007.

The unaudited consolidated results of the Group for the nine months ended 31 December 2007 are unaudited but have been reviewed by the Company’s Audit Committee.

2. Revenue

Revenue represents the net amounts received and receivable from services provided by the Group to outside customers and rental income, and is analysed as follows:

Business consultancy service income Funeral services income Rental income Software solutions and services providing income	For the three months ended 31 December 2007 2006 HK$ HK$ 130,000 270,000 1,117,414 – 45,000 – 2,287,422 – 3,579,836 270,000	For the nine months ended 31 December 2007 2006 HK$ HK$ 365,000 720,000 3,460,592 – 135,000 – 2,287,422 – 6,248,014 720,000	For the nine months ended 31 December 2007 2006 HK$ HK$ 365,000 720,000 3,460,592 – 135,000 – 2,287,422 – 6,248,014 720,000
			720,000

– 72 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. Income tax expense

Hong Kong Profits Tax has been provided for in the financial statements at 17.5% on the amount of estimated assessable profits arising in Hong Kong (2006: Nil).

4. Dividend

The Directors do not recommend the payment of an interim dividend for the three months and nine months ended 31 December 2007 (2006: Nil).

5. (Loss) earnings per share

The calculation of basic (loss) earnings per share attributable to the ordinary equity holders of the Company is based on the following data:

(Loss) earnings for the purpose of basic (loss) earnings per share for the period attributable to equity holders of the Company Weighted average number of ordinary shares for the purpose of determining basic (loss) earnings per share	For the three months ended 31 December 2007 2006 HK$ HK$ (8,307,854) (2,017,840) Number of shares Number of shares 1,309,382,065 960,000,000	For the nine months ended 31 December 2007 2006 HK$ HK$ (18,440,528) 795,495 Number of shares Number of shares 1,108,209,636 864,000,000	For the nine months ended 31 December 2007 2006 HK$ HK$ (18,440,528) 795,495 Number of shares Number of shares 1,108,209,636 864,000,000

			Number of shares 864,000,000

Diluted (loss) earnings per share for the periods for the three months and nine months ended 31 December 2007 and 2006 have not been shown as the potential ordinary shares outstanding have no dilutive effect on the basic (loss) earnings per share for the periods.

– 73 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

6. Acquisition of subsidiaries

On 19 December 2007, the Group completed to acquire 3 subsidiaries for an aggregate consideration of HK$194,678,000. This transaction has been accounted for by the acquisition method of accounting.

Net assets acquired: Property, plant and equipment Inventories Trade and other receivables Bank balances and cash Deposits Trade and other payables Tax payable Minority interests Goodwill Total consideration Satisfied by: Cash Consideration shares Net cash outflow arising on acquisition: Cash consideration Less: Bank balances and cash acquired	HK$ 340,893 47,000 4,147,645 4,212,331 92,600 (1,405,929) (1,520,975) (2,500,958) 3,412,607 191,265,393 194,678,000 40,678,000 154,000,000 194,678,000 40,678,000 (4,212,331) 36,465,669

7. Post balance sheet event

A wholly-owned subsidiary of the Company (the “Purchaser”) entered into a formal acquisition agreement dated 26 November 2007 and a supplemental agreement dated 10 December 2007 with an Independent Third Party (the “Vendor”) (collectively the “Agreements”), pursuant to which the Purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose the Sale Shares, representing the entire issued capital of Superb Kings, and the Sale Loan of being all liabilities incurred by Superb Kings to the Vendor due and payable on or at any time prior to completion and amounted to HK$31,202,468.57 as at the management account date of 24 November 2007 of Superb Kings from the Vendor for a total consideration of HK$205,000,000. The consideration shall be satisfied by the Purchaser as to (i) HK$115,500,000 by procuring the Company to allot and issue the Consideration Shares on Completion; (ii) HK$44,750,000 in cash as deposit upon signing of the Formal Acquisition Agreement; and (iii) HK$44,750,000 in cash on completion. The Agreements and the transactions are subject to the approval by the Shareholders of the Company at the coming extraordinary general meeting. The principal terms of the Agreements are set out in the announcement dated 11 December 2007.

– 74 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. INDEBTEDNESS

As at the close of business on 31 January 2008 (being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this Circular), the Enlarged Group had outstanding borrowings of approximately HK$3,856,000 comprising long-term bank borrowings of approximately HK$3,831,000 and an amount of approximately HK$25,000 finance lease obligation.

As at 31 January 2008, the Enlarged Group’s bank borrowings amounting about HK$3,831,000 were secured by first legal charges on certain of the investment property and leasehold land and buildings located in Hong Kong with carrying values of approximately HK$6,226,000.

Save as aforesaid and apart from intra-group liabilities and normal accounts payable in the ordinary course of business of the Enlarged Group, none of the companies comprising the Enlarged Group had outstanding at the close of business on 31 January 2008 any mortgages, terms loans, charges or debentures, loan capital, bank loans and overdrafts, debt securities or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptance (other than normal trade bills) or acceptance credits or any guarantees or other material contingent liabilities.

The Directors have confirmed that there has been no material change in indebtedness or contingent liabilities of the Group since 31 January 2008.

6. WORKING CAPITAL

The Directors are of the opinion that, following completion of the Acquisition, taking into account the financial resources available to the Enlarged Group, including the internally generated funds, the present available banking facilities and the continuous financial support from the major shareholder −Mr. Chui Bing Sun of the Enlarged Group, and in the absence of unforeseen circumstances, the Enlarged Group will have sufficient working capital for its present requirements that is for at least the next 12 months from the date of this circular.

7. MATERIAL CHANGES

The Directors are not aware of any material adverse changes in the financial or trading position of the Group since 31 March 2007, the date to which the latest audited consolidated financial statements of the Group were made.

8. MANAGEMENT DISCUSSION AND ANALYSIS

For the year ended 31 March 2005

Financial performance

The Group recorded a turnover of approximately HK$0.9 million for the year ended 31 March 2005, representing a decrease of approximately 79% over the previous year’s turnover

– 75 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

of approximately HK$4.3 million. The decrease was mainly due to the fact that almost all of the deals under negotiation required more time for completion. Many of those clients were scheduled to conclude their agreements with the Group in the next financial year. The contribution to operating results was resulted from business activity of business consultancy services, the only operating business of the Group in Hong Kong.

Cost of services for the year had continued its downward trend from approximately HK$2.2 million for the year ended 31 March 2004 to approximately HK$0.2 million for the year ended 31 March 2005, representing a reduction of approximately 92%. As a result, gross profit margin for the year was approximately 81.3%, a notable improvement over approximately 50.3% achieved in the previous financial year.

Administrative and general expenses together with other operating expenses reduced by approximately 16.6% to about HK$3.9 million compared to approximately HK$4.7 million in the previous financial year.

Net loss for the year ended 31 March 2005 was approximately HK$3.1 million, representing an increase of nearly 31%. While all cost and expenditure items remained at a stable level, the higher loss recorded mainly reflected the much smaller turnover recorded for the year with the bulk of the revenue due from clients to be recognised in future financial periods when the deals were successfully concluded.

Liquidity and financial resources

As at 31 March 2005, the Group had net tangible liabilities of approximately HK$1.8 million and net current assets of approximately HK$0.3 million. The net tangible liabilities were mainly caused by the amount due to a Director had gone up from HK$1.4 million to nearly HK$2.8 million. This amount was unsecured and carried interest at 1.5% per annum which for the year under review was waived. The Group had approximately HK$0.5 million cash and bank balances as at 31 March 2005, which was a decline of more than 70% due to further loss incurred during the year.

Gearing ratio

The Group’s gearing ratio, being total borrowings divided by shareholders’ funds, was 100% as at 31 March 2005 (31 March 2004: 100%).

– 76 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Capital structure

There was no change in the capital structure of the Company during the year.

Employees information

The total number of employees was 16 as at 31 March 2005 (31 March 2004: 8), and the total remuneration for the year under review was approximately HK$1.6 million (2004: approximately HK$2.4 million). The remuneration policy of the Group was reviewed and approved by the Board. Discretionary bonus was linked to performance of the individual employee.

The Group would offer options to reward employees who made significant contributions and to retain key staffs pursuant to the share option scheme of the Group.

Charges on assets

During the years ended 31 March 2005 and 2004, none of the Group’s assets had been charged.

Contingent liabilities

As at 31 March 2005, the Group had no contingent liabilities.

Dividend

The Directors did not recommend the payment of dividend for the year ended 31 March 2005.

Business review

2004 was a pivotal year for the Group as the new Shareholders and management team had taken over the running of the business. The Group moved quickly to implement an effective set of cost control measures while at the same time, took steps to ensure that existing and new client relationships did not suffer as a result of the Group’s policy of entrenchment. Through cooperation with other investment banks and financial service providers, the Group had managed to conclude protracted negotiations with a few promising PRC clients for fund-raising activities.

The Hangzhou representative office of the Group had been promoting its expertise to local state and private enterprises. A number of interesting deals from the Northern and Western regions of the PRC had also been received through the Group’s associates in Beijing. The Group had begun the process of picking out the private firms with better prospect to consider how they would benefit from using the Group’s financial services.

– 77 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the year ended 31 March 2006

Financial performance

The Group recorded a turnover of approximately HK$2.4 million for the year ended 31 March 2006, representing a strong increase of approximately 157% over the previous year’s turnover of approximately HK$0.9 million. Such increase in turnover was mainly due to the fact that many of the deals under negotiation throughout the two years ended 31 March 2006 were completed during the financial year under review. The income generated was therefore recognised after these transactions had been concluded successfully.

Cost of services for the year had gone up to approximately HK$0.5 million from approximately HK$0.2 million recorded in the previous financial year. Nonetheless, the cost of services at less than 25% of turnover was still considered manageable and the increase was in line with the higher turnover as anticipated.

Administrative and general expenses together with other operating expenses reduced by approximately 2.5% to approximately HK$3.7 million compared to approximately HK$3.8 million in the previous financial year.

Net loss for the year ended 31 March 2006 was approximately HK$1.9 million, representing a decrease of approximately HK$1.2 million or more than 38%. As all cost and expenditure items remained at a stable level, the smaller loss mainly reflected a higher turnover recorded for the year with the bulk of the revenue due from clients recognised in the financial year under review when the deals were successfully brought to a conclusion.

Liquidity and financial resources

As at 31 March 2006, the Group had net tangible liabilities of approximately HK$3.7 million and net current liabilities of approximately HK$4.2 million. The net tangible liabilities value was caused by the amount due to a Director had gone up from approximately HK$2.8 million to nearly HK$4.4 million. This advance was unsecured and carried interest at 1.5% per annum which for the year under review was waived. The Group had approximately HK$0.3 million cash and bank balances as at 31 March 2006, which was a decline of nearly 39% due to further loss incurred during the year.

Gearing ratio

As at 31 March 2006, the Group had a gearing ratio (being total debts net of payables under ordinary course of business over total assets) of approximately 338% (31 March 2005: approximately 201%).

Capital structure

There was no change in the capital structure of the Company during the year.

– 78 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Employees information

The total number of employees was 13 as at 31 March 2006 (31 March 2005: 16), and the total remuneration for the year under review was about HK$2.1 million (2005: approximately HK$1.7 million). The remuneration policy of the Group was reviewed and approved by the Board and the remuneration committee of the Company. Discretionary bonus was linked to performance of the individual employee.

Charges on assets

During the years ended 31 March 2006 and 2005, none of the Group’s assets was charged.

Contingent liabilities

On 16 November 2004, RMB0.8 million deposits were received by Galileo Asset Management Limited (the “GAML”), a wholly owned subsidiary of the Company, for the purpose of providing advisory services for the client after signing the consultancy agreement between the parties. On 7 January 2006, a letter was sent to GAML for termination of the consultancy agreement and the said client requested for the return of the RMB0.8 million deposit.

However, the Company’s legal adviser had advised the directors of GAML that such client had been in breach of the consultancy agreement between GAML and such client and that GAML was not obliged to return the sum of RMB0.8 million to the client but conversely GAML would have a potential claim against the client for breach of contract. Accordingly, the Directors considered the RMB0.8 million to be non-refundable upfront fee payable under the consultancy agreement, and no liability had been assumed and accordingly, the amount of RMB0.8 million had not been accounted for in the income statement.

The Directors considered that the outcome of the claim referred above would not have a material adverse effect on the financial position of the Group.

Dividend

The Directors did not recommend the payment of dividend for the year ended 31 March 2006.

Business review

2005 saw the unmistakable sign of the local economy continuing its strong recovery. Business activities in the capital and securities markets had both picked up considerably in tandem with the PRC’s growing needs for overseas fund-raising. Through cooperation with other investment banks and financial service providers, the Group had been involved in the protracted negotiations with a number of promising clients in the PRC for placements and listings as well as finalising credit facilities. The better than expected increase in turnover had been generated from financial advisory assignments due to the Group’s strong in-house structuring expertise.

– 79 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Whenever possible, the Group had been active in building bridges to second-tier cities in the PRC. This was a sustained long term process to establish a strong delivery platform for the Group’s financial and investment products to corporate clients. The management hoped to position the Group as a premier financial service provider in the Greater China region in the years to come.

For the year ended 31 March 2007

Financial Performance

The Group recorded a turnover of HK$1,643,189 for the year ended 31 March 2007, representing a decrease of 30% from last year’s turnover of approximately HK$2,357,000. The decrease was mainly due to the fact that the funeral business was taken up on 17 January 2007. Only two months’ result was included in the accounts for the year ended 31 March 2007. The contributions to operating results by business segment were resulted from business activity of business consultancy services and funeral services income. HK$923,000 was generated from business consultancy service income, HK$690,189 was generated from funeral services income and HK$30,000 was generated from other income of the Company.

The cost of services for the whole year had dropped to HK$524,339 from HK$544,764 recorded during last year. The decrease in gross profit percentage was mainly due to the lower gross profit rate of funeral business. However, higher turnover is expected for the year ended 31 March 2008 and the resulted total gross profit will be increased.

Administrative and general expenses together with other operating expenses made an increase of 230% to HK$12,376,094 compared to HK$3,744,815 in 2006. Their increase was mainly due to the granting of share options, the administrative expenses and goodwill written off in acquiring the funeral business. The administrative expenses will be reduced for the coming years due to the lower rental expenses by changing to the new office.

The net loss for the year ended 31 March 2007 was HK$6,511,635, an increase of HK$4,579,835 or more than 237%. The higher loss figure mainly reflected a higher administrative and general expense for the year due to the granting of share options and the cost, including the goodwill written off, associated with the acquisition of the funeral business.

Liquidity and Financial Resources

As of 31 March 2007, the Group had a net assets amounted to HK$5,344,638 and a net current liabilities amounted to HK$4,742,109. Net current liabilities continued to be negative because there was an obtaining of other borrowings of HK$5 million in current year. This advance was unsecured and carried interest at 6% per annum and repayable within twelve months. The Group had HK$1,801,684 bank balances and cash as of 31 March 2007 which was an increase of approximately 445% as compared with last year due to the raising of capital and other borrowings obtained.

– 80 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Gearing Ratio

For the year ended 31 March 2007, the Group had gearing ratio which is defined as total debts net of payable under ordinary course of business over total assets of approximately 45% (2006: 338%).

Capital Structure

Movements in share capital are reflected in note 23 to the financial statements.

Employees Information

The total number of employees was 18 as at 31 March 2007 (31 March 2006: 13), and the total remuneration for the year 2007 was about HK$3,704,392 (2006: HK$2,074,149). The remuneration policy of the Group was reviewed and approved by the Board and the Remuneration Committee. Discretionary bonus was linked to performance of the individual specific to each case.

Charges on Group Assets

As at 31 March 2007, property, plant and equipment of the Group with net book value of approximately HK$265,000 was held under finance lease (2006: Nil).

Contingent Liabilities

As at 31 March 2007, the Group had no contingent liabilities.

Dividend

The directors do not recommend the payment of dividend for the year ended 31 March 2007.

Business Review

Hong Kong continued its economic recovery in 2006. Business activities in the capital and securities markets have both picked up considerably in tandem with China’s growing needs for overseas fund-raising. Through cooperation with other investment banks and financial service providers, we have been involved in the protracted negotiations with a number of promising clients in mainland China for placement and listing as well as finalising credit facilities. Our strong in-house experts were able to provide quality professional services.

– 81 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the nine months ended 31 December 2007

Review of Financial Performance

The Group recorded a turnover of HK$6,248,014 for the nine months ended 31 December 2007, representing an increase of 768% when compared to the corresponding period in the last fiscal year. The increase was mainly due to the fact that the funeral business was taken up on 17 January 2007 and the taken up of business of providing software solutions and services on 19 December 2007. Their result were included in the accounts for the nine months ended 31 December 2007.

The cost of services was increased to HK$4,089,105 from HK$69,682 recorded during the same period last year. The decrease in gross profit percentage was mainly due to the lower gross profit rate of funeral business. However, higher turnover is expected for the year ended 31 March 2008 and the resulted total gross profit will be increased.

Administrative expenses made an increase of 335% to HK$20,463,350 compared to HK$4,699,714 in 2006. The increase was mainly due to the increase in staff costs, including shares options granted.

The net loss attributable to equity holders of the Company for the nine months ended 31 December 2007 was HK$18,440,528 as compared with the net profit of HK$795,495 for the corresponding period in the last fiscal year. The higher loss figure mainly reflected a higher administrative and general expense for the period due to the cost of share options granted and other staff cost.

Business Review

For the nine-month period under review, the international financial market showed mixed signs of direction. The stock market was seriously affected by the United States home loan market. On the other hand, a series of controlling measures had been launched by China to curb the overheated stock market and the property market while the Hong Kong stock exchange will benefit from the decreasing interest rate. This has led to increased opportunity in offering our services in raising finance for high quality projects in the coming months. Through cooperation with other investment banks and financial service providers, we have been involved in the protracted negotiations with a number of promising clients in mainland China for placement and listing as well as finalising credit facilities. Our strong in-house experts were able to provide quality professional services.

Following the acquisition of Cheung Shing Funeral Limited, the Group would enhance its future development in funeral services so as to strengthen its revenue base. We hope to position ourselves as the premier funeral service provider in Hong Kong in the years to come. On the other hand, through the acquisition of the Loyal King Group, the Group is able to explore into the development of entertainment and gaming activities. With the strong and competent information technology staff of the Loyal King Group, the group is able to increase its market share in the gaming market and improve its financial position by increasing revenue.

– 82 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Prospects

For the foreseeable future, China will continue to be a major factor of international trade. However, the Chinese government is facing the pressure of the interest rate adjustment, currency revaluation, record trade surpluses and fluctuating commodities and oil prices. The problems from the domestic front include rising inflation rate, flooding of money supply and overheating in the property sector.

Regarding the provision of computer system and related services in relation to the on-line entertainment and gaming activities, the Board is of the view that the performance is promising and it will greatly improve the Group’s financial position.

The Board is always seeking opportunities to diversify the Group’s revenue streams in order to enhance shareholders’ value and is optimistic about the project of acquiring Superb Kings Limited. The Board is attracted by the future prospect of tourism development and is optimistic about the prospect of the hotel and tourism business in Cagayan Valley of the Philippines as they believe that the demand for accommodations and entertainment facilities will continue to grow in the near future. The Board is of the view that the acquisition will be a valuable opportunity for the Group to tap into the hotel industry while to increase the value of the Group, which are in the interests of the Shareholders as a whole.

Liquidity and Financial Resources

As of 31 December 2007, the Group’s net assets increased to approximately HK$339,104,000 from net assets of approximately HK$5,345,000 as at 31 March 2007. The bank balances as at 31 December 2007 was approximately HK$94,953,000 as compared to the balance of approximately HK$1,802,000 as at 31 March 2007. The increase in net assets was due to bank balances increased as a result of the completion of placing shares. During the nine months ended 31 December 2007, the Group’s operation was mainly financed by the internal financial resources of the Group and the net proceeds from shares placing.

Gearing Ratio

The gearing ratio, defined as total debts net of payable under ordinary course of business over total assets, was approximately 1% (31 March 2007: 45%).

Charges on Group Assets

As at 31 December 2007, plant and equipment of the Group with net book value of HK$28,635 was held under finance leases (2006: HK$36,000) and properties with net book value of HK$6,233,750 were pledged as securities for bank loan (2006: Nil).

Contingent Liabilities

As at 31 December 2007, the Group had no contingent liabilities.

– 83 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Foreign Exchange Exposure

Most of the trading transactions, assets and liabilities of the Group were denominated in Hong Kong dollars. As at 31 December 2007, the Group had no significant exposure under foreign exchange contracts, interest, currency swaps or other financial derivatives.

Employee Information

The total number of employees was 27 as at 31 December 2007, and the total remuneration for the nine months ended 31 December 2007 was approximately HK$12,487,000. The Group’s remuneration policy for senior executives is basically performance-linked. Staff benefits, including medical coverage and mandatory provident fund, are also provided to employees where appropriate. Discretionary bonus is linked to performance of the individual specific to each case. The Group may offer options to reward employees who make significant contributions and to retain key staff pursuant to the share option scheme of the Group. The remuneration policy of the Group is reviewed and approved by the Remuneration Committee as well as by the Board.

9. CHANGE OF COMPANY NAME

At the extraordinary general meeting of the Company held on 18 May 2007, the special resolution in respect of the change of the Company’s name from “Galileo Capital Group Limited ” to “Galileo Holdings Limited ” was duly approved by the shareholders of the Company. In this connection, the Registrar of Companies in the Cayman Islands issued a Certificate of Incorporation on Change of Name dated 28 May 2007 and the Registrar of Companies in Hong Kong issued a Certificate of Registration on Change of Name of Oversea Company dated 30 July 2007.

– 84 –

APPENDIX II

FINANCIAL INFORMATION OF SUPERB KINGS

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, received from the independent reporting accountants, HLB Hodgson Impey Cheng, Chartered Accountants, Certified Public Accountants, Hong Kong.

==> picture [229 x 84] intentionally omitted <==

31/F Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong

10 April 2008

The Board of Directors Galileo Holdings Limited 21st Floor, The Pemberton 22-26 Bonham Strand Sheung Wan Hong Kong

Dear Sirs,

We set out below our report on the financial information regarding Superb Kings Limited (“Superb Kings”) for the period from 6 July 2007 (date of incorporation) to 31 December 2007 (the “Relevant Period”), including the balance sheet of Superb Kings as at 31 December 2007, the income statement, the cash flow statement and the statement of changes in equity for the Relevant Period, and the notes thereto (the “Financial Information”), for inclusion in the circular of Galileo Holdings Limited (the “Company”) dated 10 April 2008 (the “Circular”) in connection with the proposed acquisition of the entire issued share capital of Superb Kings and the Sale Loan at a total consideration of HK$205,000,000. The consideration in the amount of HK$205,000,000 would be satisfied (i) as to HK$115,500,000 by procuring the Company to allot and issue the Consideration Shares on Completion; (ii) as to HK$44,750,000 in cash as deposit upon signing of the Formal Acquisition Agreement; and (iii) as to HK$44,750,000 in cash on Completion.

Superb Kings was established in the British Virgin Islands on 6 July 2007 with limited liability. The registered office of Superb Kings is situated at Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands. Superb Kings is principally engaged in investment holding during the Relevant Period. No statutory financial statements of Superb Kings have been prepared since the date of incorporation. Superb Kings adopts 31 December as its financial year end date and the first financial statements will be prepared for the period ended 31 December 2007.

– 85 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

BASIS OF PREPARATION

For the purpose of this report, the sole director of Superb Kings has prepared the financial statements of Superb Kings for the Relevant Period in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”).

The Financial Information has been prepared by the sole director of Superb Kings based on the financial statements for the Relevant Period, on the basis as set out in Note 2 below. The Financial Information has been prepared in accordance with HKFRSs which also include Hong Kong Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”), accounting principles generally accepted in Hong Kong.

DIRECTOR’S RESPONSIBILITY FOR THE FINANCIAL INFORMATION

The sole director of Superb Kings is responsible for the preparation and the true and fair presentation of the Financial Information in accordance with HKFRSs issued by the HKICPA. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and the true and fair presentation of Financial Information that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The directors of the Company are responsible for the contents of the Circular in which this report is included.

REPORTING ACCOUNTANTS’ RESPONSIBILITY

Our responsibility is to express an opinion on the Financial Information based on our audit. For the purpose of this report, we have audited the Financial Information for the Relevant Period in accordance with Hong Kong Standards on Auditing issued by the HKICPA. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the Financial Information is free from material misstatement. We have also carried out additional procedures as we considered necessary in accordance with the Auditing Guideline 3.340 “Prospectuses and the reporting accountant” issued by the HKICPA.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Information. The procedures selected depend on the reporting accountants’ judgment, including the assessment of the risks of material misstatement of the Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation and the true and fair presentation of the Financial Information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the sole director of Superb Kings, as well as evaluating the overall presentation of the Financial Information.

– 86 –

APPENDIX II FINANCIAL INFORMATION OF SUPERB KINGS

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

OPINION

In our opinion, for the purpose of this report, the Financial Information gives a true and fair view of the state of affairs of Superb Kings as at 31 December 2007 and of the result and cash flow of Superb Kings for the Relevant Period in accordance with Hong Kong Financial Reporting Standards.

SIGNIFICANT UNCERTAINTY RELATING TO GOING CONCERN BASIS OF SUPERB KINGS

Without qualifying our opinion, we draw attention to Note 2 of Section II of the Financial Information which indicates that Superb Kings incurred net loss of HK$475,237 for the period ended 31 December 2007 and Superb Kings’s total liabilities exceeded its total assets by HK$85,237 as at 31 December 2007. These conditions, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty which may cast significant doubt about Superb Kings’s ability to continue as a going concern.

– 87 –

APPENDIX II FINANCIAL INFORMATION OF SUPERB KINGS

I. FINANCIAL INFORMATION

INCOME STATEMENT

For the period from 6 July 2007 (date of incorporation) to 31 December 2007

Notes Turnover 6 Administrative expenses Loss before tax 7 Income tax expense 9 Loss for the period	HK$ – (475,237) (475,237) – (475,237)

– 88 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

BALANCE SHEET

At 31 December 2007

Notes Non-current asset Property under development 11 Current asset Prepayments and deposits 12 Current liability Amount due to a shareholder 13 Net current liabilities Total assets and liabilities Capital and reserves Share capital 14 Reserves Total equity	HK$ 14,769,231 27,349,597 (42,204,065) (14,854,468) (85,237) 390,000 (475,237) (85,237)

– 89 –

APPENDIX II FINANCIAL INFORMATION OF SUPERB KINGS

STATEMENT OF CHANGES IN EQUITY

For the period from 6 July 2007 (date of incorporation) to 31 December 2007

At 6 July 2007 (date of incorporation) Issue of shares Loss for the period At 31 December 2007	Share capital Accumulated losses HK$ HK$ – – 390,000 – – (475,237) 390,000 (475,237)	Total HK$ – 390,000 (475,237) (85,237)

– 90 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

CASH FLOW STATEMENT

For the period from 6 July 2007 (date of incorporation) to 31 December 2007

Cash flows from operating activities
Loss before tax
Increase in prepayments and deposits
Net cash used in operating activities
Cash flows from investing activity
Increase in property under development
Net cash used in investing activity
Cash flows from financing activities
Increase in amount due to a shareholder
Proceeds from issue of shares
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Analysis of balance of cash and cash equivalents
Cash and bank balance

HK$
(475,237)
(27,349,597)
(27,824,834)
(14,769,231)
(14,769,231)
42,204,065
390,000
42,594,065
–
–
–
–

– 91 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

II. NOTES TO THE FINANCIAL INFORMATION

1. GENERAL INFORMATION

Superb Kings was established in the British Virgin Islands with limited liability. The address of the registered office of Superb Kings is situated at Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands.

Superb Kings is principally engaged in investment holding during the Relevant Period.

The Financial Information is presented in Hong Kong Dollars which is the functional currency of Superb Kings.

2. BASIS OF PREPARATION

The principal accounting policies applied in the preparation of this Financial Information are set out in Note 3 below. These policies have been consistently applied to the Relevant Period presented, unless otherwise stated.

The Financial Information has been prepared in accordance with the Hong Kong Financial Reporting Standards (“HKFRSs”) (which also include Hong Kong Accounting Standards (“HKASs”) and interpretations) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and accounting principles generally accepted in Hong Kong. The Financial Information has been prepared under the historical cost convention.

The preparation of Financial Information in conformity with HKFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. It also requires management to exercise judgment in the process of applying Superb Kings’s accounting policies. The areas involved a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the Financial Information were disclosed in Note 4.

For the period ended 31 December 2007, Superb Kings incurred net loss of HK$475,237 and Superb Kings’s total liabilities exceeded its total assets by HK$85,237 as at 31 December 2007. The Financial Information has been prepared on a going concern basis because the shareholder has confirmed to provide continuing financial support to Superb Kings to enable it to continue as a going concern and to settle its liabilities as and when they fall due for the foreseeable future.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Superb Kings has not early applied the following new and revised standards and interpretations that have been issued but are not yet effective. The management is in the process of making an assessment of the impact of these new standards, amendments and interpretations to existing standards. The sole director of Superb Kings anticipates that the application of these new standards or interpretations will have no material impact on the Financial Information of Superb Kings.

HKAS 1 (Revised) Presentation of financial statement[1] HKAS 23 (Revised) Borrowing costs[1] HKFRS 8 Operating segments[1] HK(IFRIC) – INT 12 Service concession arrangements[2] HK(IFRIC) – INT 13 Customer loyalty programmes[3] HK(IFRIC) – INT 14 The limit on a defined benefit asset, minimum funding requirements and their interaction[2]

1 Effective for annual periods beginning on or after 1 January 2009

2 Effective for annual periods beginning on or after 1 January 2008

3 Effective for annual periods beginning on or after 1 July 2008

A summary of significant accounting policies followed by Superb Kings in the preparation of the Financial Information is set out below.

– 92 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

(a) Financial instruments

Financial assets and financial liabilities are recognised on the balance sheet when the entity becomes a party to the contractual provisions of the instruments. 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 income statement.

Financial assets

Superb Kings’s major financial asset is prepayments and deposits which falls within the category of loans and receivables and the accounting policies adopted are set out below.

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 are carried at amortised cost using the effective interest method, less any identified impairment losses. An impairment loss is recognised in income statement when there is objective evidence that the asset is impaired, and is measured as the difference between the assets’ 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.

Financial liabilities and equity instruments

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

Financial liabilities including amount due to a shareholder are classified as other financial liabilities which are initially measured at fair value and subsequently measured at amortised cost using the effective interest method.

An equity instrument is any contract that evidences a residual interest in the assets of Superb Kings after deducting all of its liabilities. Equity instruments issued by Superb Kings are record at the proceeds received, net of direct issue costs.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the assets expire or, the financial assets are transferred and Superb Kings 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 income statement.

For financial liabilities, they are removed from the 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 paid or payable is recognised in income statement.

– 93 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

(b) Impairment losses

At each balance sheet date, Superb Kings 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 periods. A reversal of an impairment loss is recognised as income immediately.

(c) Income tax

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 period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods, and it further excludes income statement items that are never taxable and deductible. Superb Kings’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 of the financial information and the corresponding tax bases used in the computation of taxable profit and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and the 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 the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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 to 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.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the entity intends to settle its current tax assets and liabilities on a net basis.

(d) Property under development

Property under development is stated at cost, less any impairment losses. Cost included construction cost, interest, finance charges and other direct cost attributable to the construction.

(e) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

(f) Provisions

Provisions are recognised when Superb Kings has a present obligation as a results of a past event, and it is probable that Superb Kings will be required to settle that obligations. Provisions are measured at the sole director’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

– 94 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

(g) Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.

A transaction is considered to be a related party transaction where there is a transfer of resources or obligations between related parties.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

In the process of applying Superb Kings’s accounting policies which are described in Note 3, management has made certain key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period, are discussed below.

(a) Impairment of properties under development

Properties under development are included in the balance sheet with an aggregate carrying amount of HK$14,769,231. Management assessed the recoverability of these amounts based on an estimation of the net realisable value of the underlying properties which involves, inter-alia, considerable analysis of current market price of properties of a comparable standard and location, construction costs to be incurred values of the underlying properties are more or less than expected as a result of changes in market condition and/or significant variation in the budgeted development cost, material reversal of or provision for impairment losses may result.

5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management applies these policies continuously to manage and monitor these exposures to ensure appropriate measures are implemented on a timely and effective manner.

5.1 Financial risk factors

Categories of financial instruments

	At	31 December
		2007
		HK$
Financial assets
– Loan and receivables		27,349,597
Financial liabilities
– Amortised cost		42,204,065
*Liquidity risk management*

Superb Kings is exposed to liquidity risk if it is not able to raise sufficient funds to meet its financial obligations as its net liabilities position and net current liabilities position. The Financial Information has been prepared on a going concern basis because the shareholder of Superb Kings has agreed to provide adequate funds to enable Superb Kings to meet in full its financial obligations as they fall due for the foreseeable future. The financial support from the shareholder will be replaced by the Company if the acquisition by the Company is successful completed.

The liquidity of Superb Kings is primarily dependent on its ability to maintain adequate cash inflow from operations to meet its debt obligations and to obtain ongoing support from its shareholder.

– 95 –

APPENDIX II

FINANCIAL INFORMATION OF SUPERB KINGS

The following tables detail Superb Kings’ remaining contractual maturity for its financial liabilities which are included in the maturity analysis provided internally to the key management personnel for the purpose of managing liquidity risk. For non-derivative financial liabilities, the table reflects the undiscounted cash flows of financial liabilities based on the earliest date on which Superb Kings’ can be required to pay. The table includes both interest and principal cash flows.

	Weighted
	average
	effective				Total	Total
	interest	Within 1	2 to 5	Over 5	undiscounted	carrying
	rate	year	years	years	cash flows	amount
At 31
December
2007
Non-
derivate
financial
liabilities
Amount
due to a
shareholder	–	42,204,065	–	–	42,204,065	42,204,065

5.2 Capital risk management

Superb Kings’s objectives of managing capital are to safeguard Superb Kings’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders; to maintain an optimal capital structure to reduce the cost of capital; to provide capital for the purpose of strengthening Superb Kings’s risk management capability.

In order to maintain or adjust the capital structure, Superb Kings may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Superb Kings actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns, taking into consideration the future capital requirements of Superb Kings and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Superb Kings currently does not adopt any formal dividend policy. Management regards total equity as capital, for capital management purpose.

5.3 Fair value estimation

The fair value of financial assets and financial liabilities are determined as follows:

the fair value of financial assets and financial liabilities with standard terms and conditions and trade on active liquid markets are determined with reference to quoted market bid prices and ask prices respectively; and
the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices or rates from observable current market transactions as input.

The sole director of Superb Kings considers that the carrying amounts of financial assets and financial liabilities in the financial statements approximate to their fair values.

6. TURNOVER

No turnover was generated by Superb Kings during the Relevant Period.

Segment information is not presented as Superb Kings is principally engaged in the businesses of investment holding in the Philippines, which over 90% of Superb Kings results and assets were related to during the Relevant Period.

– 96 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

7. LOSS BEFORE TAX

From 6 July 2007 to 31 December 2007 HK$ Loss before tax is stated after charging: Operating lease rental expense in respect of land 475,237

8. SOLE DIRECTOR’ REMUNERATION AND THE FIVE HIGHEST PAID EMPLOYEES

During the Relevant Period, no emoluments was paid or payable by Superb Kings to its sole director or the five highest paid employees for services rendered or as an inducement to joint or upon joining or as compensation for loss of office. The sole director of Superb Kings has not waived any emoluments during the Relevant Period.

		For the period from 6 July 2007 to 31 December 2007	For the period from 6 July 2007 to 31 December 2007	For the period from 6 July 2007 to 31 December 2007	For the period from 6 July 2007 to 31 December 2007
			Salaries,		Other
			allowance	Retirement	fringe
		Fee	and bonus	scheme	benefits	Total
		HK$	HK$	HK$	HK$	HK$
Name	of director
Yeung	Hak Kan	–	–	–	–	–

9. INCOME TAX EXPENSE

No provision for Hong Kong or overseas profits tax has been made as Superb Kings did not generate any assessable profits during the Relevant Period.

The income tax expense for the Relevant Period can be reconciled to loss for the period per income statement as follow:

to Loss before tax Tax at the applicable rate Tax effect of non-deductible expenses Income tax expenses	From 6 July 2007 31 December 2007 HK$ 475,237	%
	166,333 (166,333)	35.0 (35.0
	–	–

There are no material unprovided deferred tax assets and liabilities at the balance sheet date.

10. EARNINGS PER SHARE

Earnings per share information is not presented as its inclusion, for the purpose of this report, is not considered meaningful.

– 97 –

APPENDIX II FINANCIAL INFORMATION OF SUPERB KINGS

11. PROPERTY UNDER DEVELOPMENT

	At 31 December
	2007
	HK$
Property under development
– Construction cost	14,769,231

The property under development is situated in the Philippines under medium-term lease. As at the balance date, the sole director of Superb Kings reviewed the carrying value of the property under development with reference to current market situation and no impairment loss was recognised during the Relevant Period.

12. PREPAYMENTS AND DEPOSITS

Prepayments Deposits	At 31 December 2007 HK$ 27,183,922 165,675
	27,349,597

Included in prepayments and deposits are prepayment for construction fee of HK$22,798,607 and prepayment for rental expense in respect of land of HK$3,467,071. The sole director of Superb Kings considers that the carrying amounts of prepayments and deposits approximate to their fair value.

13. AMOUNT DUE TO A SHAREHOLDER

The amount is unsecured, interest free and has no fixed repayment terms. The sole director of Superb Kings considers that the carrying amount of amount due to a shareholder approximates to its fair value.

14. SHARE CAPITAL

	At 31 December
	2007
	HK$
Authorised, issued and fully paid:
50,000 ordinary share of US$1.00 each	390,000

15. OPERATING LEASE COMMITMENTS

Superb Kings as lessee

At the balance sheet date, Superb Kings had outstanding commitments for future minimum lease payments under non-cancellable operating leases in respect of land which fall due as follows:

Within a year Two to five years More than five years	At 31 December 2007 HK$ 1,971,154 5,658,491 48,067,803
	55,697,448

Operating leases in respect of land with lease terms of 25 years. Superb Kings does not have an option to purchase the leased asset at the expiry of the lease period.

– 98 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

16. CAPITAL COMMITMENTS

Authorised and contracted for:

At 31 December 2007 HK$ Construction cost of properties 34,963,700

17. MATERIAL RELATED PARTY TRANSACTIONS

Save as disclosed in Note 13 to the Financial Information, Superb Kings had not entered into any transaction with related parties.

Compensation by key management personnel of Superb Kings represented the sole director’ remuneration as disclosed in Note 8 to the Financial Information.

18. CONTINGENT LIABILITIES

Superb Kings did not have any significant contingent liabilities at 31 December 2007.

19. SUBSEQUENT EVENTS

No significant subsequent events took place subsequent to 31 December 2007.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared for Superb Kings in respect of any period subsequent to 31 December 2007. No dividend has been declared, made or paid by Superb Kings in respect of any period subsequent to 31 December 2007.

Yours faithfully,

HLB Hodgson Impey Cheng

Chartered Accountants Certified Public Accountants Hong Kong

– 99 –

FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

MANAGEMENT DISCUSSION AND ANALYSIS

For the period commenced from 6 July 2007 (date of incorporation) to 31 December 2007

Financial and business performance

As Superb Kings has not commenced business, no turnover has been recorded during the review period. Superb Kings intends to build a luxury hotel, namely Prestigious and Leisure Resort, which will offer extensive leisure facilities, including various water sports such as jet skiing, water skiing, scuba diving, yachting and fishing, and indoor/outdoor swimming pool.

During the period ended 31 December 2007, Superb Kings recorded a total turnover of nil. The loss after income tax was approximately HK$475,237 mainly attributed from the operating lease rental cost of Superb Kings for the period.

Liquidity and financial resources

As at 31 December 2007, Superb Kings had net current liabilities of approximately HK$14,854,468. The current liabilities, representing the total liabilities of the company, of approximately HK$42,204,065 attributed to the amount due to a shareholder of Superb Kings for the sole purpose of financing the business. In addition, as at 31 December 2007, the current ratio of Superb Kings was approximately 64.80%. The gearing ratio (defined as total liabilities over the total assets) of Superb Kings as at 31 December 2007 was approximately 100.2%. Superb Kings generally finances its business solely by its shareholder.

Charge of assets

Superb Kings did not have any pledged assets as at 31 December 2007.

Capital structure

As at 31 December 2007, the issued share capital of Superb Kings was HK$390,000, comprise of 50,000 issued and fully paid ordinary shares of US$1.00 each. There were no other loan stocks, preference shares or convertibles issued and outstanding.

Contingent liabilities

As at 31 December 2007, Superb Kings had no contingent liabilities.

Employees and remuneration

Given the Superb Kings has not commenced business during the review period, no employee was hired. No remuneration was recorded during the review period.

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FINANCIAL INFORMATION OF SUPERB KINGS

APPENDIX II

Exposure to foreign exchange

The revenue and cost of sales of the Superb Kings was mainly denominated in HK$ and therefore the Superb Kings was not exposed to any material foreign currency exchange risk.

Future prospects

The Prestigious and Leisure Resort is divided in three stages. The first phase development will be completed in April 2008 when the Prestigious and Leisure Resort can offer approximately 245 rooms for accommodations whereas the second and/or final phase of development is anticipated to be commenced in year 2008. The second and/or final phase development of the Prestigious and Leisure Resort will have the full capacity to offer services of over 250 rooms for accommodations and all entertainment facilities, including the recreation centre nearby the resort.

Save for the hotel business of Prestigious and Leisure Resort, there was no future plan for material investment or capital assets by the Superb Kings during the year.

Reconciliation of appraised property values with net carrying values

The reconciliation between the appraised values as at 31 January 2008 of the property under development of Superb Kings prepared by Grant Sherman Appraisals Limited with their net carrying values as at 31 December 2007 as reflected in the financial statements of Superb Kings are as follows:

Property under development Property valuation as at 31 January 2008 as set out in Appendix V Net carrying value as at 31 December 2007 Additions Revaluation surplus	HK$ 14,769,231 6,990,231	HK$ 23,500,000
		21,759,462
		1,740,538

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FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

I. ACQUISITIONS OF LOYAL KING INVESTMENTS LIMITED (INCLUDING THE ALLIANCE COMPUTER SERVICES LIMITED AND ALLIANCE COMPUTER SYSTEMS LIMITED) (THE “LOYAL KING GROUP”)

Background

On 28 September 2007, Galileo Capital Group (BVI) Limited (Galileo Capital”), a wholly-owned subsidiary of the Company entered into the sale and purchase agreement with First Cheer Holdings Limited (the “First Cheer”) for the acquisition of 100% equity interest in Loyal King Investments Limited (the “Loyal King”) at a total consideration of HK$194 million, of which (i) HK$154 million satisfied by the Company to allot and issue the consideration Shares to the First Cheer credited as fully paid; and (ii) HK$40 million in cash by the Galileo Capital to the First Cheer. The Loyal King Group comprises Loyal King and its two subsidiaries. Alliance Services and Alliance Systems are owned by Loyal King as to 97% and 60% respectively. Loyal King was incorporated in British Virgin Islands on 12 July 2007. The aforesaid acquisition were completed on 18 December 2007. There were no variation to the aggregate remuneration payable to and benefits in kind receivable by the directors of Loyal King.

Financial information

Set out below are (i) audited financial information of Loyal King for the two months ended 31 August 2007 together with the relevant notes to the accounts and the management discussion and analysis of the Loyal King as extracted from the accountants’ report of the Loyal King as set out in Appendix II to the Company’s circular dated 23 November 2007; (ii) audited financial information of Alliance Services for the three years ended 31 March 2007 and the five months ended 31 August 2007 together with the relevant notes to the accounts and the management discussion and analysis of the Alliance Services as extracted from the accountants’ report of the Alliance Services as set out in Appendix III to the Company’s circular dated 23 November 2007; (iii) audited financial information of Alliance Systems for the two years ended 31 March 2007 and the five months ended 31 August 2007 together with the relevant notes to the accounts and the management discussion and analysis of the Alliance Systems as extracted from the accountants’ report of the Alliance Systems as set out in Appendix IV to the Company’s circular dated 23 November 2007; and (iv) the pro forma financial information of the Group as enlarged by the acquisitions of the interest in the Loyal King Group as extracted from Appendix V to the Company’s circular dated 23 November 2007.

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

i. Audited financial information of the Loyal King

FINANCIAL INFORMATION

INCOME STATEMENT

Turnover Cost of sales Gross profit Other revenue Administrative expenses Profit before taxation Income tax expenses Profit/(loss) for the period	Two months ended 31 August 2007 HK$ – –
	– – –
	– –
	–

– 103 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

BALANCE SHEET

Notes NON-CURRENT ASSETS Investments in subsidiaries 5 CURRENT LIABILITIES Other payables 6 Amount due to a shareholder 7 CAPITAL AND RESERVES Share capital 8 Retained profits	At 31 August 2007 HK$ 26,000,000
	19,500,000 6,112,500
	25,612,500
	387,500

	387,500 –
	387,500

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

STATEMENT OF CHANGES IN EQUITY

Note Issue of share capital 8 (Loss)/profit for the period At 31 August 2007	Share capital HK$ 387,500 – 387,500	Retained profits HK$ – – –	Total HK$ 387,500 –
			387,500

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

NOTES TO THE FINANCIAL INFORMATION

1. BASIS OF PRESENTATION

The Financial Information has been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRS”), which include all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance. The Financial Information also comply with the applicable disclosure requirements of the GEM Listing Rules.

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

The HKICPA has issued the following Standards amendments and INTs that are not yet effective. The Company has considered the following Standards amendments and INTs but does not expect they will have a material effect on how the results of operations and financial position of the Company are prepared and presented.

HKAS 23 (Revised) Borrowing Costs[1] HKFRS 8 Operating Segments[1] HK(IFRIC)-Int 12 Service concession arrangements[2] HK(IFRIC)-Int 13 Customer Loyalty Programmes[3] HK(IFRIC)-Int 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirement and their interaction[2]

1 Effective for annual periods beginning on or after January 1, 2009.

2 Effective for annual periods beginning on or after January 1, 2008.

3 Effective for annual periods beginning on or after July 1, 2008.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The significant accounting policies that have used in the preparation of the Financial Information are summarized below.

It should be noted that accounting estimates and assumptions have been used in preparation of the Financial Information. Although these estimates and assumptions are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates and assumptions.

(b) Subsidiaries

A subsidiary is an entity in which the Company is able to exercise its control on it. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

In the Company’s balance sheet, investments in subsidiaries are carried at cost less impairment losses, if any.

(c) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized when is probable that the economic benefits will flow to the Company and when the revenue can be measured reliably, on the following bases:

(i) Sale of goods is recognised when the goods are delivered to customers and the title has passed.
(ii) Rendering of services is recognised when the services are rendered.

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FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

(d) Impairment (for tangible assets and intangible assets with definite useful lives)

At each balance sheet date, the Group reviews the carrying amounts of the assets to determine whether there is any indication that those assets have suffered 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. Impairment loss is recognised as an expense immediately.

Where impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, such 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/periods. A reversal of impairment loss is recognised as income immediately.

(e) Financial instruments

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

Financial liabilities and equity

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The accounting policies adopted in respect of financial liabilities are set out below.

Financial liabilities

Financial liabilities including other payables and amount due to a shareholder are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method.

Equity instruments

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

Derecognition

Financial liabilities are derecognised 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 paid and payable is recognised in profit or loss.

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FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The company’s major financial instruments include other payable and accruals and amount due to a shareholder. 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.

Credit risk

The company has no significant concentration of credit risk, with exposure spread over a number of counterparties and customers. In order to minimize the credit risk, the company reviews the recoverable amount of each individual trade debt 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 company’s credit risk is significantly reduced.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. The management aims to maintain flexibility in funding by keeping committed credit lines available.

5. INVESTMENTS IN SUBSIDIARIES

Unlisted investments, at cost Less: impairment loss	At 31 August 2007 HK$ 26,000,000 –
	26,000,000

Particulars of subsidiaries are as follows

				Percentage of	Percentage of
	Place of		Registered/	equity	interest
	incorporation	Class of	issued	attributable to the		Principal
Name of company	and operation	shares held	capital	Company		activities
				Direct	Indirect
Alliance Computer	Hong Kong	Ordinary	HK$200,000	97	–	Provide computer
Services Limited						hardware and
						software
						services
Alliance Computer	Hong Kong	Ordinary	HK$20,000	60	–	Provide computer
Systems Limited						hardware and
						software
						services

Loyal King acquired 97% and 60% equity interest in Alliance Computer Services Limited and Alliance Computer Systems Limited respectively for an aggregate consideration of HK$26,000,000 on 31 August 2007.

– 108 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

6. OTHER PAYABLES

The amount represents the outstanding amount of consideration payable to the vendors, namely Lau Hung Lun, Ma Cheuk Wai, Leung Ming Yuen, Tin Ho Fai and Choi Chi Leung in respect of the acquisition of Alliance Systems and Alliance Services.

The Directors consider that the carrying amounts of the company’s other payables approximate to their fair

value.

7. AMOUNT DUE TO A SHAREHOLDER

Amounts due to a shareholder are unsecured interest free and repayment on demand.

The Directors consider that the carrying amount of amount due to a shareholder approximates its fair value.

8. SHARE CAPITAL

	At
	31 August
	2007
	HK$
Authorised, issued and fully paid
50,000 ordinary shares of US$1 each	387,500

The Company incorporated on 12 July 2007 with an authorized share capital of US$50,000 is divided into 50,000 ordinary shares of US$1 each. At the time of incorporation, 50,000 ordinary shares of US$1 each were issued to the subscribers. There was no movement of share capital after incorporation. The exchange rate is US$1 equal to HK$7.75.

9. PRESENTATION OF CASH FLOW STATEMENT

As the Company has no cash transactions during the period from 12 July 2007 (date of incorporation) to 31 August 2007, no cash flow statement is prepared.

– 109 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

MANAGEMENT DISCUSSION AND ANALYSIS OF LOYAL KING

For the period from 12 July 2007, the date of incorporation, to 31 August 2007

Loyal King is a company incorporated in British Virgin Islands with limited liability pursuant to BVI Business Ordinance Act, 2004. The principal activity of Loyal King is investment holding.

Loyal King has direct investment in two subsidiaries. The investment represents 97% in Alliance Services and 60% in Alliance Systems. Both companies were incorporated in Hong Kong.

PROSPECTS

It is expected that all the benefits of the business operation will be generated from the subsidiaries, namely Alliance Services and Alliance Systems.

With the positive financial records of Alliance Services and Alliance Systems, the management is optimistic about the earning potential of the Alliance Services and Alliance Systems.

– 110 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

ii. Audited financial information of the Alliance Services

FINANCIAL INFORMATION

INCOME STATEMENTS

Year 2007 HK$ 3,652,500 (2,132,005)	ended 31 March 2006 2005 HK$ HK$ 5,807,603 3,343,528 (4,181,569) (1,916,773)	ended 31 March 2006 2005 HK$ HK$ 5,807,603 3,343,528 (4,181,569) (1,916,773)	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – 2,815,567 – (2,042,639) – 772,928 40,027 9,100 (12,700) (696,542) 27,327 85,486 – (14,960) 27,327 70,526 (1,063,150) –	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – 2,815,567 – (2,042,639) – 772,928 40,027 9,100 (12,700) (696,542) 27,327 85,486 – (14,960) 27,327 70,526 (1,063,150) –
1,520,495 9,100 (667,979) 861,616 (150,783)	1,626,034 158,400 (1,665,669) 118,765 (20,834)	1,426,755 70,116 (1,349,979) 146,892 (25,752)	– 40,027 (12,700) 27,327 –	772,928 9,100 (696,542
				85,486 (14,960
710,833 –	97,931 –	121,140 –	27,327 (1,063,150)

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FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

BALANCE SHEETS

As at 31 March 2007 2006 HK$ HK$ 331,839 556,108 – 265,945 929,033 – – – – 5,021 397,388 175,573	As at 31 March 2007 2006 HK$ HK$ 331,839 556,108 – 265,945 929,033 – – – – 5,021 397,388 175,573	2005 HK$ 364,600 265,945 – 30,428 – 226,112	As at 31 August 2007 HK$ – – – 207,673 149,654
1,658,260 30,000 235,110 130,000 395,110	1,002,647 429,218 21,112 – 450,330	887,085 424,701 – 7,998 432,699	357,327
			– – 130,000
			130,000
1,263,150	552,317	454,386	227,327

200,000 1,063,150	200,000 352,317	200,000 254,386	200,000 27,327
1,263,150	552,317	454,386	227,327

– 112 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

STATEMENT OF CHANGES IN EQUITY

Share capital HK$ 200,000 –	Retained profits HK$ 133,246 121,140	Total HK$ 333,246 121,140 454,386 97,931 552,317 710,833 1,263,150 27,327 (1,063,150) 227,327 552,317 70,526 622,843
200,000 – 200,000 – 200,000 – –	254,386 97,931 352,317 710,833 1,063,150 27,327 (1,063,150)	454,386 97,931
		552,317 710,833
		1,263,150 27,327 (1,063,150
200,000	27,327
200,000 –	352,317 70,526	552,317 70,526
200,000	422,843

– 113 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

CASH FLOW STATEMENTS

Year 2007 HK$ 861,616 224,269 265,945 (929,033) – 213,998 – (399,218)	ended 31 March 2006 2005 HK$ HK$ 118,765 146,892 (191,507) 123,160 – (4,297) – – 30,428 (30,428) 21,112 – – (101,942) 4,516 18,671	ended 31 March 2006 2005 HK$ HK$ 118,765 146,892 (191,507) 123,160 – (4,297) – – 30,428 (30,428) 21,112 – – (101,942) 4,516 18,671	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 27,327 85,486 331,839 (192,506) – – 929,033 179,543 (207,673) – (235,110) (81,006) – – (30,000) 42,914 815,416 34,431 – – 815,416 34,431 (1,063,150) – (247,734) 34,431 397,388 175,573 149,654 210,004 149,654 210,004	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 27,327 85,486 331,839 (192,506) – – 929,033 179,543 (207,673) – (235,110) (81,006) – – (30,000) 42,914 815,416 34,431 – – 815,416 34,431 (1,063,150) – (247,734) 34,431 397,388 175,573 149,654 210,004 149,654 210,004
237,577 (15,762) 221,815 – 221,815 175,573	(16,686) (33,853) (50,539) – (50,539) 226,112	152,056 (30,113) 121,943 – 121,943 104,169	815,416 – 815,416 (1,063,150) (247,734) 397,388	34,431 –
				34,431 –
				34,431 175,573
397,388 397,388	175,573 175,573	226,112 226,112	149,654 149,654

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

NOTES TO THE FINANCIAL INFORMATION

1. BASIS OF PRESENTATION

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

During the period from 1 April 2004 to 31 August 2007, the HKICPA issued a number of new or revised Hong Kong Accounting Standards (“HKAS”s), Hong Kong Financial Reporting Standards (“HKFRS”s) and Interpretations (“INT”s) (here in after collectively referred to as “new HKFRS”s) which are effective for accounting periods beginning on or after 1 April 2004. For the purposes of preparing and presenting financial information of the Relevant Periods, the Company has adopted all these new and revised HKFRSs.

HKAS 23 (Revised)	Borrowing Costs1
HKFRS 8	Operating Segments1
HK(IFRIC)-Int 12	Service concession arrangements2
HK(IFRIC)-Int 13	Customer Loyalty Programmes3
HK(IFRIC)-Int 14	The Limit on a Defined Benefit Asset, Minimum Funding
	Requirement and their interaction2

1 Effective for annual periods beginning on or after January 1, 2009.

2 Effective for annual periods beginning on or after January 1, 2008.

3 Effective for annual periods beginning on or after July 1, 2008.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The significant accounting policies that have used in the preparation of the Financial Information are summarized below.

(b) Revenue recognition

(i) Sale of goods is recognised when the goods are delivered to customers and the title has passed.

(ii) Rendering of services is recognised when the services are rendered.

(c) Financial instruments

Financial assets and financial liabilities are recognized on the balance sheet when a Company 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

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

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 recognized immediately in profit or loss.

Financial assets

The Company’s financial assets are classified as loans and receivables. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way 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.

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 trade and other receivables and amounts due from a related company and a director) 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.

Financial liabilities and equity

Financial liabilities

Financial liabilities including other payables and accruals and amount due to a director are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method.

Equity instruments

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

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Company 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 receivable and the cumulative gain or loss that had been recognised directly in equity is recognised in profit or loss.

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

(d) 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 years/period. 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 periods and it further excludes income statement items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the combined financial statements and the corresponding tax bases 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.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized. 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.

(e) Retirement benefits costs

Payments to the Mandatory Provident Fund Scheme are charged as an expense when employees have rendered service entitling them to the contributions.

(f) Operating leases

Rentals payable under operating leases are charged to profit or loss on a straight line basis over the term 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 term on a straight line basis. Contingent rentals, if any, are charged to income statement in the accounting period in which they are incurred.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the process of applying the company’s accounting policies which are described in note 3, management has made the following judgments that have significant effect on the amounts recognised in the financial statements. The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are also discussed below.

Allowances for bad and doubtful debts

The policy for allowance of bad and doubtful of the company is based on the evaluation of collectability and aging analysis of accounts and on management’s judgment. A considerable amount of judgment is required in assessing the ultimate realization of these receivables, including the current creditworthiness ant the past collection history of each customer. If the financial conditions of customers of the company were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required.

5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The company’s major financial instruments include trade and other receivables, other payable and accruals and amounts due from/(to) a related company/a director. 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.

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

Credit risk

Liquidity risk

6. TURNOVER AND OTHER REVENUE

Turnover Sales of goods and service Other revenue Sundry income	Year ended 31 March 2007 2006 2005 HK$ HK$ HK$ 3,652,500 5,807,603 3,343,528 9,100 158,400 70,116 3,661,600 5,966,003 3,413,644	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – 2,815,567 40,072 9,100 40,027 2,824,667	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – 2,815,567 40,072 9,100 40,027 2,824,667
			2,824,667

7. PROFIT BEFORE TAXATION

				Five months	ended	ended
	Year	ended 31 March		31 August
	2007	2006	2005	2007		2006
	HK$	HK$	HK$	HK$			HK$
					(unaudited)
Profit before taxation has
been arrived at after
charging:
Auditor’s remuneration	13,000	10,000	10,000	–			–
Cost of inventories
recognised as expenses	2,132,005	4,181,569	1,916,773	–	2,042,639
Staff costs (including
directors’ remuneration)
Wages and salaries	393,782	1,006,800	949,488	–		393,782
Retirement benefits
scheme contributions	39,647	48,390	45,614	–		39,385
Operating lease expenses
in respect of leasehold
land and buildings	–	99,738	109,870	9,800			–

– 118 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

8. DIRECTORS’ REMUNERATION

Details of remuneration paid to the company’s directors disclosed pursuant to section 161 of the Hong Kong Companies Ordinance are as follows:

Fee Other emoluments Salaries (including benefits in kind) Retirement benefits scheme contribution	Year ended 31 March 2007 2006 2005 HK$ HK$ HK$ – – – 57,000 265,000 247,000 6,750 11,850 11,850 63,750 276,850 258,850	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – – – – – – – –	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – – – – – – – –
			–

9. INCOME TAX EXPENSES

Hong Kong profits tax is calculated at 17.5% on the estimated assessable profit for the year/period.

The amount of income tax expenses charged to the income statement represents:

Hong Kong profits tax Current year Under-provision for prior years Income tax expenses	Year ended 31 March 2007 2006 2005 HK$ HK$ HK$ 150,783 20,783 25,752 – 51 – 150,783 20,834 25,752	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – 14,960 – – – 14,960	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – 14,960 – – – 14,960
			14,960

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FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

The tax charge for the year/period can be reconciled to the profit before taxation as follows:

Year ended 31 March 2007 2006 2005 HK$ HK$ HK$ 861,616 118,765 146,892	Year ended 31 March 2007 2006 2005 HK$ HK$ HK$ 861,616 118,765 146,892	Year ended 31 March 2007 2006 2005 HK$ HK$ HK$ 861,616 118,765 146,892	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 27,327 85,486	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 27,327 85,486

150,783 – – –	20,783 – – 51	25,706 46 – –	4,782 – (4,782) –	14,960 – – –
150,783	20,834	25,752	–	14,960

10. DIVIDEND

The interim dividend paid during the Relevant Periods had been proposed by the directors as belows:

				Five months	ended
	Year ended 31 March			31 August
	2007	2006	2005	2007	2006
	HK$	HK$	HK$	HK$		HK$
					(unaudited)
Interim dividend paid of
HK$5.31575 per share	–	–	–	1,063,150		–

11. TRADE AND OTHER RECEIVABLES AND DEPOSITS/OTHER PAYABLES AND ACCRUALS

The Directors consider that the carrying amounts of the company’s trade and other receivables and deposits and other payables and accruals approximate to their fair value.

– 120 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

12. AMOUNT DUE FROM A RELATED COMPANY

Balance as at: 31 August 2007 31 March 2007 31 March 2006 31 March 2005	Maximum outstanding balance during the year/period HK$ 1,349,433 1,229,033 – –	Alliance Computer Systems Limited HK$ –

		929,033

		–

		–

Common shareholder and director: Ma Cheuk Wai

The amount is unsecured, interest free and has no fixed terms of repayment.

The Directors consider that the carrying amount of amount due from a related company approximates its fair value.

13. AMOUNT DUE FROM/(TO) A DIRECTOR

Balance as at: 31 August 2007 31 March 2007 31 March 2006 31 March 2005	Maximum outstanding balance during the year/period 1,602,823 N/A N/A 818,141	Tam Kit Keung HK$ 207,673

		(235,110)

		(21,112)

		30,428

The amount is unsecured, interest free and has no fixed terms of repayment.

The Directors consider that the carrying amount of amount due from/(to) a director approximates its fair value.

– 121 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

14. SHARE CAPITAL

				At
		At 31 March		31 August
	2007	2006	2005	2007
	HK$	HK$	HK$	HK$
Authorised, issued and fully paid
200,000 ordinary shares of HK$1 each	200,000	200,000	200,000	200,000

15. RETIREMENT BENEFITS SCHEME

The company participates in a defined contribution scheme which is registered under a Mandatory Provident Fund Scheme (the “MPF Scheme”) established under the Mandatory Provident Fund Schemes Ordinance in December 2000. The assets of the scheme are held separately from those of the company, in funds under the control of trustee.

For members of the MPF Scheme, the company contributes 5% of relevant payroll costs to the scheme, which contribution is matched by employees.

– 122 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

MANAGEMENT DISCUSSION AND ANALYSIS OF ALLIANCE SERVICES

For the year ended 31 March 2005

Financial and business performance

During the year ended 31 March 2005, Alliance Services recorded a total turnover of approximately HK$3,343,000. Income from sales of hardware equipment and software applications amounted to HK$1,961,000, which included sales of hardware equipment of approximately HK$1,292,000 and sales of software applications of approximately HK$669,000. The remaining balance of HK$1,382,000 represents the project incomes of the Alliance Services in relation to the provision of the set up, installation, maintenance and after sales services to its customers. The profit after income tax was approximately HK$121,000. Alliance Services had not capitalised any intangible assets relating to the software equipment. The major expense to Alliance Services was salaries and wages of approximately HK$950,000.

Liquidity and financial resources

As at 31 March 2005, Alliance Services had net current assets of approximately HK$454,000. In addition, as at 31 March 2005, the current ratio of Alliance Services was approximately 200%. The gearing ratio (defined as total liabilities over total assets) of Alliance Services as at 31 March 2005 was approximately 48%.

Charge of assets

No significant investments were held by Alliance Services as at 31 March 2005. During the year under review, the Alliance Services had no material acquisition and disposal of investment. As at 31 March 2005, save for the above, Alliance Services did not have any other outstanding secured borrowings, mortgages or charges.

Capital structure

As at 31 March 2005, the issued share capital of Alliance Services was HK$200,000, comprised of 200,000 issued and fully paid ordinary shares of HK$1 each. There were no other loan stocks, preference shares or convertibles issued and outstanding.

Contingent liabilities

As at 31 March 2005, Alliance Services had no contingent liabilities.

Employee information

The total number of employees of Alliance Services as at 31 March 2005 was 7 and the total remuneration for the period ended 31 March 2005 was about HK$950,000. The remuneration policy was basically performance-linked and was subject to reviews by directors of Alliance Services from time to time.

– 123 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

For the year ended 31 March 2006

Financial and business performance

During the year ended 31 March 2006, Alliance Services recorded a total turnover of approximately HK$5,807,000. Income from sales of hardware equipment and software applications amounted to HK$5,065,000, which included sales of hardware equipment of approximately HK$4,275,000 and sales of software applications of approximately HK$790,000. The remaining balance of HK$742,000 represents the project incomes of the Alliance Services in relation to the provision of the set up, installation, maintenance and after sales services to its customers. The profit after income tax was approximately HK$98,000. Alliance Services had not capitalised any intangible assets relating to the software equipment. The major expense to Alliance Services was salaries and wages of approximately HK$1,007,000.

Liquidity and financial resources

As at 31 March 2006, Alliance Services had net current assets of approximately HK$552,000. In addition, as at 31 March 2006, the current ratio of Alliance Services was approximately 223%. The gearing ratio (defined as total liabilities over total assets) of Alliance Services as at 31 March 2006 was approximately 45%.

Charge of assets

No significant investments were held by Alliance Services as at 31 March 2006. During the year under review, the Alliance Services had no material acquisition and disposal of investment. As at 31 March 2006, save for the above, Alliance Services did not have any other outstanding secured borrowings, mortgages or charges.

Capital structure

As at 31 March 2006, the issued share capital of Alliance Services was HK$200,000, comprised of 200,000 issued and fully paid ordinary shares of HK$1 each. There were no other loan stocks, preference shares or convertibles issued and outstanding.

Contingent liabilities

As at 31 March 2006, Alliance Services had no contingent liabilities.

Employee information

The total number of employees of Alliance Services as at 31 March 2006 was 8 and the total remuneration for the period ended 31 March 2006 was about HK$1,007,000. The remuneration policy was basically performance-linked and was subject to reviews by directors of Alliance Services from time to time.

– 124 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

For the year ended 31 March 2007

Financial and business performance

During the year ended 31 March 2007, Alliance Services recorded a total turnover of approximately HK$3,652,000. Income from sales of hardware equipment and software applications amounted to HK$2,783,000, which included sales of hardware equipment of approximately HK$2,505,000 and sales of software applications of approximately HK$278,000. The remaining balance of HK$869,000 represents the project incomes of the Alliance Services in relation to the provision of the set up, installation, maintenance and after sales services to its customers. The profit after income tax was approximately HK$711,000. Alliance Services had not capitalised any intangible assets relating to the software equipment. The major expense to Alliance Services was salaries and wages of approximately HK$394,000.

Liquidity and financial resources

As at 31 March 2007, Alliance Services had net current assets of approximately HK$1,263,000. In addition, as at 31 March 2007, the current ratio of Alliance Services was approximately 419%. The gearing ratio (defined as total liabilities over total assets) of Alliance Services as at 31 March 2007 was approximately 24%.

Charge of assets

No significant investments were held by Alliance Services as at 31 March 2007. During the period under review, the Alliance Services had no material acquisition and disposal of investment. As at 31 March 2007, save for the above, Alliance Services did not have any other outstanding secured borrowings, mortgages or charges.

Capital structure

As at 31 March 2007, the issued share capital of Alliance Services was HK$200,000, comprised of 200,000 issued and fully paid ordinary shares of HK$1 each. There were no other loan stocks, preference shares or convertibles issued and outstanding.

Contingent liabilities

As at 31 March 2007, Alliance Services had no contingent liabilities.

Employee information

During the year, Alliance Services had 10 employees but they were then transferred to Alliance Computer Systems Limited (Alliance Systems) under the operational reconstruction. The total remuneration for the period ended 31 March 2007 was about HK$394,000. The remuneration policy was basically performance-linked and was subject to reviews by directors of Alliance Services from time to time.

– 125 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

For the five months ended 31 August 2007

Financial and business performance

During the five months ended 31 August 2007, Alliance Services had undergone an operational reconstruction in which it was mainly involved in developing on-line games. As a result, there was no recorded turnover and all the sales were reported under Alliance Systems. Alliance Services had not capitalised any intangible assets relating to the software equipment.

Liquidity and financial resources

As at 31 August 2007, Alliance Services had net current assets of approximately HK$227,300. In addition, as at 31 August 2007, the current ratio of Alliance Services was approximately 275%. The gearing ratio (defined as total liabilities over total assets) of Alliance Services as at 31 August 2007 was approximately 36%.

Charge of assets

No significant investments were held by Alliance Services as at 31 August 2007. During the year under review, the Alliance Services had no material acquisition and disposal of investment. As at 31 August 2007, save for the above, Alliance Services did not have any other outstanding secured borrowings, mortgages or charges.

Capital structure

As at 31 August 2007, the issued share capital of Alliance Services was HK$200,000, comprised of 200,000 issued and fully paid ordinary shares of HK$1 each. There were no other loan stocks, preference shares or convertibles issued and outstanding.

Contingent liabilities

As at 31 August 2007, Alliance Services had no contingent liabilities.

Employee information

During the period, Alliance Services had no employee but a new recruitment exercise would be started after the procurement of new clients.

PROSPECTS

It is generally believed that the internet is becoming an important element in our daily life. Furthermore, with the positive financial records of Alliance Services, the management is optimistic that the company will continue to grow in all aspects through the development of entertainment and gaming activities through the internet in a long run.

– 126 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

iii. Audited financial information of the Alliance Systems

FINANCIAL INFORMATION

INCOME STATEMENTS

Year ended 31 March 2007 HK$ 6,597,637 (3,232,715)	Period from 23 September 2005 (date of incorporation) to 31 March 2006 HK$ – –	For Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 9,441,990 425,524 (6,567,177) (145,604) 2,874,813 279,920 116,768 – (1,337,075) (210,931) 1,654,506 68,989 (293,980) (10,151) 1,360,526 58,838 1,072,884 –	For Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 9,441,990 425,524 (6,567,177) (145,604) 2,874,813 279,920 116,768 – (1,337,075) (210,931) 1,654,506 68,989 (293,980) (10,151) 1,360,526 58,838 1,072,884 –
3,364,922 1,429 (1,990,510) 1,375,841 (91,975)	– – (10,982) (10,982) –	2,874,813 116,768 (1,337,075) 1,654,506 (293,980)	279,920 – (210,931
			68,989 (10,151
1,283,866 200,000	(10,982) –	1,360,526 1,072,884

– 127 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

BALANCE SHEETS

At 31 March 2007 2006 HK$ HK$ – –	At 31 March 2007 2006 HK$ HK$ – –	At 31 August 2007 HK$ 279,219
– 509,319 1,847,927 467,948 2,825,194 929,033 500,000 221,302 91,975 1,742,310	– – 10,000 – 10,000 – – 10,982 – 10,982	36,000 1,613,591 265,902 634,153
		2,549,646 – – 1,062,384 385,955
		1,448,339
1,082,884	(982)	1,380,526

10,000 1,072,884	10,000 (10,982)	20,000 1,360,526
1,082,884	(982)	1,380,526

– 128 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

STATEMENT OF CHANGES IN EQUITY

Share capital Retained profits/ (accumulated losses) HK$ HK$ 10,000 – – (10,982)	Share capital Retained profits/ (accumulated losses) HK$ HK$ 10,000 – – (10,982)	Total HK$ 10,000 (10,982) (982) 1,283,866 (200,000) 1,082,884 10,000 (1,072,884) 1,360,526 1,380,526 (982) 58,838 57,856
10,000 – – 10,000 10,000 – –	(10,982) 1,283,866 (200,000) 1,072,884 – (1,072,884) 1,360,526	(982 1,283,866 (200,000
		1,082,884 10,000 (1,072,884 1,360,526
20,000	1,360,526
10,000 –	(10,982) 58,838	(982 58,838
10,000	47,856

– 129 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

CASH FLOW STATEMENTS

Year ended 31 March 2007 HK$ 1,364,859 –	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 1,654,506 58,007 25,384 – 1,679,890 58,007 (36,000) (1,104,272) (157,175) 1,582,025 – (929,033) (179,543) (500,000) – 841,082 360,849 1,533,692 82,138 (304,603) – (304,603) – 10,000 10,000 (1,072,884) – (1,062,884) 10,000 166,205 92,138 467,948 – 634,153 92,138 634,153 92,138	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 1,654,506 58,007 25,384 – 1,679,890 58,007 (36,000) (1,104,272) (157,175) 1,582,025 – (929,033) (179,543) (500,000) – 841,082 360,849 1,533,692 82,138 (304,603) – (304,603) – 10,000 10,000 (1,072,884) – (1,062,884) 10,000 166,205 92,138 467,948 – 634,153 92,138 634,153 92,138
1,364,859 – (509,319) (1,847,927) 929,033 500,000 221,302 657,948 – – 10,000 (200,000) (190,000) 467,948 –	1,679,890 (36,000) (1,104,272) 1,582,025 (929,033) (500,000) 841,082 1,533,692 (304,603) (304,603) 10,000 (1,072,884) (1,062,884) 166,205 467,948	58,007 (157,175 – (179,543 – 360,849
		82,138
		–
		–
		10,000 –
		10,000
		92,138 –
467,948 467,948	634,153 634,153

Note: No cash flow statement is presented for the period from 23 September 2005 (date of incorporations) to 31 March 2006, as no cash transaction during the period.

– 130 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

NOTES TO THE FINANCIAL INFORMATION

1. BASIS OF PREPARATION

The Financial Information has been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRS”), which include all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance. The Financial Information also included all the applicable disclosure requirements of the GEM Listing Rules.

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

HKAS 23 (Revised) Borrowing Cost[1] HKAS 8 Operating Segments[1] HK(IFRIC)-Interpretation (Int) 12 Service concession arrangements[2] HK(IFRIC)-Int 13 Customer Loyalty Programmes[3] HK(IFRIC)-Int 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction[4]

1 Effective for annual periods beginning on or after 1 January 2009

2 Effective for annual periods beginning on or after 1 January 2008.
3 Effective for annual periods beginning on or after 1 July 2008.
4 Effective for annual periods beginning on or after 1 January 2008.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The significant accounting policies that have used in the preparation of the Financial Information are summarized below.

(b) Revenue recognition

Revenue is measured at the fair value of the consideration received and receivable. Revenue is recognized when is probable that the economic benefits will flow to the Company and when the revenue can be measured reliably, on the following bases:

(a) Sales of goods are recognized when goods are delivered to customers and title has been passed.
(b) Rending of services is recognized when the services are rendered.
(c) Project fee is recognised based on percentage of the project completed.

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

(c) Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any.

Depreciation is provided to write off the cost of plant and equipment over their estimated useful lives, using the straight line method, at the following rates per annum:

Office equipment 20% Decoration 20%

(d) Operating leasing

Rentals payable under operating leases are charged to income statement on a straight-line basis over the term of the relevant lease. Benefits received and receivables as an incentive to enter into an operating lease are recognised as reduction of rental expense over the lease term on a straight-line basis.

(e) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost, which comprises all costs of purchase and, where applicable, cost of conversion and other costs that have been incurred in bringing the inventories to their present location and condition, is calculated using the first-in first-out method. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

(f) 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 that years/period. 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.

Deferred tax is recognised on difference between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases 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 negative 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 from investments in subsidiaries except where the Company 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.

Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is settled or the asset is realised. Deferred tax is charged or credited to 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.

– 132 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

(g) Financial instruments

Financial assets and financial liabilities are recognized in the Company’s balance sheet when the Company 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 financial assets of Alliance Systems Business are classified into loans and receivables. The accounting policy adopted in respect of financial assets is set out below:

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 trade receivables and other receivables) 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.

Financial liabilities and equity

Financial liabilities and equity instruments 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 Company after deducting all of its liabilities. The accounting policies adopted in respect of financial liabilities and an equity instrument are set out below.

Financial liabilities

Financial liabilities including other payables and accruals, amounts due to a related company/directors and bank loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method.

Equity instruments

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

Derecognition

(h) Employee benefits

Payments to the Mandatory Provident Fund Scheme are charged as an expense when employees have rendered service entitling them to the contributions.

– 133 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

4. KEY SOURCE OF ESTIMATION UNCERTAINTY

In the process of applying the Company’s accounting policies, which are described in note 3 above, management has made various estimates based on past experience, expectations of the future and other information. The key sources of estimation uncertainty that can significantly affect the amounts recognized in the financial statements are set out below.

Allowances for bad and doubtful debts

Depreciation of plant and equipment

Plant and equipment are depreciated on straight-line basis over their estimated useful lives, after taking into account of their estimated residual value. The determination of the useful lives and residual values involves management’s estimation. The company assesses annually the residual value and the useful life of the plant and equipment and if the expectation differs from the original estimate, such a difference may impact the depreciation in the year and the estimate will be changed in the future period.

5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICES

Credit risk

Liquidity risk

– 134 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

6. TURNOVER AND OTHER REVENUE

Year ended 31 March 2007 HK$ 3,338,637 3,259,000	Period from 23 September 2005 (date of incorporation) to 31 March 2006 HK$ – –	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 9,441,990 425,524 – –	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 9,441,990 425,524 – –
6,597,637 – 1,429	– – –	9,441,990 116,768 –	425,524 – –
	–	9,558,758	425,524

		Period from
		23 September
		2005 (date of
	Year ended	incorporation)	Five months	ended
	31 March	to 31 March	31 August
	2007	2006	2007	2006
	HK$	HK$	HK$	HK$
				(unaudited)
Profit/(loss) before taxation has been
arrived after charging:
Auditors’ remuneration	10,000	–	–	–
Cost of inventories sold	3,232,715	–	6,567,177	145,604
Staff costs (including directors’
remuneration)
Wages and salaries	1,321,198	–	760,808	128,087
Retirement benefits scheme
contributions	93,091	–	47,928	8,605
Operating lease expenses for
leasehold land and buildings	171,806	–	71,242	40,670
Depreciation of plant and equipment	–	–	25,384	–

– 135 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

8. DIRECTORS’ REMUNERATION

Details of remuneration paid to the Company’s directors during the Relevant Periods are follows:

Fee Other emoluments Salaries (including benefits in kind) Retirement benefits scheme contribution	Year ended 31 March 2007 HK$ 100,000 – – 100,000	Period from 23 September 2005 (date of incorporation) to 31 March 2006 HK$ – – – –	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – – 74,800 – – – 74,800 –	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) – – 74,800 – – – 74,800 –
				–

9. INCOME TAX EXPENSE

Hong Kong profits tax is calculated at 17.5% of the estimated assessable profit for the Relevant Periods.

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

Year ended 31 March 2007 HK$ 1,283,866	Period from 23 September 2005 (date of incorporation) to 31 March 2006 HK$ (10,982)	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 1,654,506 58,007	Five months ended 31 August 2007 2006 HK$ HK$ (unaudited) 1,654,506 58,007

224,676 (132,732) 31	(1,921) – 1,921	289,538 – 4,442	10,151 – –
91,975	–	293,980	10,151

– 136 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

10. DIVIDEND

The interim dividend paid during the Relevant Periods had been proposed by the directors as belows.

Period from 23 September 2005 (date of incorporation) to 31 March 2006 HK$ – Office equipment HK$ – 235,951 235,951	Period from 23 September 2005 (date of incorporation) to 31 March 2006 HK$ – Office equipment HK$ – 235,951 235,951	Period from 23 September 2005 (date of incorporation) to 31 March 2006 HK$ – Office equipment HK$ – 235,951 235,951

Office equipment HK$ – 235,951 235,951


– 19,663 19,663	– 5,721 5,721	– 25,384
		25,384
216,288 62,931 – – At 31 March 2007 2006 HK$ HK$ – –

At 31 August 2007, carrying value of inventories stated at net realisable value is approximately HK$36,000.

– 137 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

13. AMOUNTS DUE TO DIRECTORS/A RELATED COMPANY

Amounts due to directors/ a related party are unsecured interest free and repayment on demand.

The Directors consider that the carrying amount of amount due from a related company approximates its fair value.

14. TRADE AND OTHER RECEIVABLES AND DEPOSITS / OTHER PAYABLES AND ACCRUALS

The Directors consider that the carrying amounts of the company’s trade and other receivables and deposits and other payables and accruals approximate to their fair value.

15. SHARE CAPITAL

	At 31 March		At 31 August
	2007	2006	2007
	HK$	HK$	HK$
Authorised, issued and fully paid:
20,000 ordinary shares of HK$1 each	10,000	10,000	20,000

The company was incorporated on 23 September 2005 with 10,000 ordinary shares of HK$1 each issued at par value to subscribers who paid until 1 August 2006. On 6 August 2007, the authorized shares were increased by 10,000 to 20,000 and were issued at par value to subscribers who paid until 21 August 2007 during the relevant period.

16. RETIREMENT BENEFIT SCHEME

The Company participates in a defined contribution scheme which is registered under a Mandatory Provident Fund Scheme (the “MPF Scheme”) established under the Mandatory Provident Fund Schemes Ordinance in December 2000. The assets of the scheme are held separately from those of the Company, in funds under the control of trustee.

For members of the MPF Scheme, the Company contributes 5% of relevant payroll costs to the scheme, which contribution is matched by employees.

– 138 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

MANAGEMENT DISCUSSION AND ANALYSIS OF ALLIANCE SYSTEMS

For the year ended 31 March 2007

Financial and business performance

Alliance Systems commenced business on 9 August 2006 while its clients and staff were transferred from Alliance Services. During the period ended 31 March 2007, Alliance Systems recorded a total turnover of approximately HK$6,597,000. Income from sales of hardware equipment and software applications amounted to HK$6,131,000, which included sales of hardware equipment of approximately HK$2,191,000 and sales of software applications of approximately HK$3,940,000. The remaining balance of HK$466,000 represents the project incomes of the Alliance Systems in relation to the provision of the set up, installation, maintenance and after sales services to its customers. The profit after income tax was approximately HK$1,272,000. Alliance Systems had not capitalised any intangible assets relating to the software equipment. The major expense to Alliance Systems was salaries and wages of approximately HK$1,321,000.

Liquidity and financial resources

As at 31 March 2007, Alliance Systems had net current assets of approximately HK$1,083,000. In addition, as at 31 March 2007, the current ratio of Alliance Systems was approximately 162%. The gearing ratio (defined as total liabilities over total assets) of Alliance Systems as at 31 March 2007 was approximately 62%.

Charge of assets

No significant investments were held by Alliance Systems as at 31 March 2007. During the year under review, the Alliance Systems had no material acquisition and disposal of investment. As at 31 March 2007, save for the above, Alliance Systems did not have any other outstanding secured borrowings, mortgages or charges.

Capital structure

As at 31 March 2007, the issued share capital of Alliance Systems was HK$10,000, comprised of 10,000 issued and fully paid ordinary shares of HK$1 each. There were no other loan stocks, preference shares or convertibles issued and outstanding.

Contingent liabilities

As at 31 March 2007, Alliance Systems had no contingent liabilities.

Employee information

During the year, Alliance Systems had 10 employees transferred from Alliance Services. The total remuneration for the period ended 31 March 2007 was about HK$1,321,000. The remuneration policy was basically performance-linked and was subject to reviews by directors of from time to time.

– 139 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

For the five months ended 31 August 2007

Financial and business performance

During the five months ended 31 August 2007, Alliance Systems recorded a total turnover of approximately HK$9,442,000. The profit after income tax was approximately HK$1,360,500. Alliance Systems had not capitalised any intangible assets relating to the software equipment. The major expense to Alliance Systems was salaries and wages of approximately HK$760,000.

Liquidity and financial resources

As at 31 August 2007, Alliance Systems had net current assets of approximately HK$1,380,000. In addition, as at 31 August 2007, the current ratio of Alliance Systems was approximately 176%. The gearing ratio (defined as total liabilities over total assets) of Alliance Systems as at 31 August 2007 was approximately 51%.

Charge of assets

No significant investments were held by Alliance Systems as at 31 August 2007. During the period under review, the Alliance Systems had no material acquisition and disposal of investment. As at 31 August 2007, save for the above, Alliance Systems did not have any other outstanding secured borrowings, mortgages or charges.

Capital structure

As at 31 August 2007, the issued share capital of Alliance Systems was HK$20,000, comprised of 20,000 issued and fully paid ordinary shares of HK$1 each. There were no other loan stocks, preference shares or convertibles issued and outstanding.

Contingent liabilities

As at 31 August 2007, Alliance Systems had no contingent liabilities.

Employee information

During the period, Alliance Systems had 10 employees transferred from Alliance Services. The total remuneration for the period ended 31 August 2007 was about HK$760,000. The remuneration policy was basically performance-linked and was subject to reviews by directors of from time to time.

PROSPECTS

It is generally believed that the usage of computer is very common in the business world. As a result, the demand for expertise on hardware and software application will remain strong. With the existing business of development of office automation and entertainment activities and the positive financial performance of Alliance Systems, the management is optimistic that the company will continue to grow in all aspects in a long run.

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FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

iv. Unaudited pro forma financial information of the Group as enlarged by the acquisition of Loyal King

Set out below is the pro forma statement of assets and liabilities of the Group as enlarged by the acquisition of the interest in Loyal King and the report of such pro forma statement of assets and liabilities as extracted from Appendix V to the Company’s circular dated 23 November 2007.

Certified Public Accountants

Room 1304 Shanghai Industrial Investment Building 60 Hennessy Road, Wanchai Hong Kong Tel: (852) 2802 2187 Fax:(852) 2824 4091

23 November 2007

The Directors Galileo Holdings Limited 2202, 22/F., Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong

Dear Sirs

We report on the unaudited pro forma financial information (“Unaudited Pro Forma Financial Information”) of Galileo Holdings Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”), Loyal King Investments Limited (“Loyal King”), Alliance Computer Services Limited (“Alliance Services”) and Alliance Computer Systems Limited (“Alliance Systems”) (together with the Group collectively referred to as the “Enlarged Group”), which has been prepared by the directors of the Company for illustrative purposes only, to provide information about how the proposed acquisition of the entire share capital of Loyal King, 97% issued share capital of Alliance Services and 60% issued share capital of Alliance Systems and the Loan owed by Loyal King to First Cheer Holdings Limited (referred to as the “Vendor”) (the “Proposed Acquisition”) might have affected the financial information presented, for inclusion in Appendix V of the circular dated 23 November 2007 (the “Circular”). The basis of preparation of the unaudited pro forma financial information is set out in Appendix V of the Circular.

– 141 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

Respective responsibilities of directors of the Company and reporting accountants

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 31 of Chapter 7 of the Rules Governing the Listing of Securities on Growth Enterprises Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) and with reference to AG 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

Our work does not constitute an audit or review made in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA and accordingly, we do not express any such assurance on the Unaudited Pro Forma Financial Information.

It is our responsibility to form an opinion, as required by paragraph 31(7) of Chapter 7 of the GEM Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

Basis of opinion

We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements (“HKSIR”) 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. The engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Listing Rules.

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APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, dose not provide any assurance or indication that any event will take place in the future and may not be indicative of:

the financial position of the Enlarged Group as at date covered by the Unaudited Pro Forma Financial Information or any future date; or
the results of the Enlarged Group for periods covered by the Unaudited Pro Forma Financial Information or for any future periods.

Opinion

In our opinion:

(a) The statement of unaudited pro forma financial information of the Enlarged Group has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the statement of unaudited pro forma financial information as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Listing Rules.

Yours faithfully

Lo & Kwong C.P.A. Company Limited Certified Public Accountants Hong Kong

– 143 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

PRO FORMA CONSOLIDATED BALANCE SHEET

The Group at 30 September 2007 HK$ (unaudited) 1,166,407 – 2,600,000 4,987,395	Loyal King at 31 August 2007 HK$ (audited) – 26,000,000 – –	Alliance Systems at 31 August 2007 HK$ (audited) – – – 279,219	Alliance Services at 31 August 2007 Pro forma adjustments (Note e1) (Note e2) (Note e3) HK$ HK$ HK$ HK$ (audited) (unaudited) (unaudited) (unaudited) – 192,951,177 – 194,000,000 (220,000,000) – –	Pro forma Enlarged Group HK$ 194,117,584 – 2,600,000 5,266,614
8,753,802 87,436 145,293 20,280,658 – 40,528,296 61,041,683 1,241,418 – 30,000 27,284 27,255 253,484 48,853 1,628,294 59,413,389 68,167,191 3,684,893 20,174 3,705,067	26,000,000 – – – – – – 19,500,000 6,112,500 – – – – – 25,612,500 (25,612,500) 387,500 – – –	279,219 36,000 1,613,591 265,902 – 634,153 2,549,646 1,062,384 – – – – – 385,955 1,448,339 1,101,307 1,380,526 – – –	– – – 207,673 (20,000,000) –‘ 6,112,500 (6,112,500) 149,654 (20,000,000) 357,327 – (19,500,000) – (6,112,500) – – – – 130,000 130,000 227,327 227,327 – – –	201,984,198
				123,436 1,758,884 754,233 – 21,312,103
				23,948,656
				2,303,802 – 30,000 27,284 27,255 253,484 564,808
				3,206,633
				20,742,023
				222,726,221
				3,684,893 20,174
				3,705,067
64,462,124	387,500	1,380,526	227,327	219,021,154

23,964,000 40,498,124 –	387,500 – –	20,000 1,360,526 –	200,000 5,600,000 (607,500) 27,327 148,400,000 (1,387,853) – 559,030	29,564,000 188,898,124 559,030
64,462,124	387,500	1,380,526	227,327	219,021,154

– 144 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

PRO FORMA CONSOLIDATED INCOME STATEMENT

For the year ended 31 March 2007

The Group HK$ (audited) 1,643,189 (524,339)	Alliance Systems HK$ (audited) 6,597,637 (3,232,715)	Alliance Services HK$ (audited) 3,652,500 (2,132,005)	Pro forma Enlarged Group HK$ 11,893,326 (5,889,059) 6,004,267 4,864,980 (15,034,583) (67,584) (4,232,920) (284,016) (4,516,936) (5,051,807) 534,871 (4,516,936)
1,118,850 4,854,451 (12,376,094) (67,584) (6,470,377) (41,258)	3,364,922 1,429 (1,990,510) – 1,375,841 (91,975)	1,520,495 9,100 (667,979) – 861,616 (150,783)	6,004,267 4,864,980 (15,034,583 (67,584
			(4,232,920 (284,016
(6,511,635)	1,283,866	710,833
(6,511,635) –	770,320 513,546	689,508 21,325	(5,051,807 534,871
(6,511,635)	1,283,866	710,833

– 145 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

PRO FORMA CONSOLIDATED CASH FLOW STATEMENTS

For the year ended 31 March 2007

The Group HK$ (audited) (6,470,377) 468,963 (4,792,737) 2,332,815 3,272,393 (53,389) 67,584	Alliance Systems HK$ (audited) 1,364,859 – – – – – –	Alliance Services Pro forma adjustments (Note e1) HK$ HK$ (audited) (unaudited) 861,616 – – – – – –	Pro forma Enlarged Group HK$ (4,243,902) 468,963 (4,792,737) 2,332,815 3,272,393 (53,389) 67,584 (2,948,273) 4,170 (2,106,610) – 1,217,929 1,188,368 (2,644,416) 53,389 (15,762) (2,606,789) (51,400,960) (58,511) (51,459,471)
(5,174,748) 4,170 (239,578) – 681,847 1,188,368 (3,539,941) 53,389 – (3,486,552) (12,184,767) (58,511) (12,243,278)	1,364,859 – (2,357,246) 929,033 721,302 – 657,948 – – 657,948 – – –	861,616 – 490,214 (929,033) (185,220) – 237,577 – (15,762) 221,815 – (39,216,193) – –	(2,948,273 4,170 (2,106,610 – 1,217,929 1,188,368
			(2,644,416 53,389 (15,762
			(2,606,789
			(51,400,960 (58,511
			(51,459,471

– 146 –

FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

APPENDIX III

The Group HK$ (audited) 5,000,000 11,200,000 (405,120) 1,500,000 (26,603) (67,584) –	Alliance Systems HK$ (audited) – 10,000 – – – – (200,000)	Alliance Services Pro forma adjustments (Note e1) HK$ HK$ (audited) (unaudited) – – – – – – –	Pro forma Enlarged Group HK$ 5,000,000 11,210,000 (405,120) 1,500,000 (26,603) (67,584) (200,000) 17,010,693 (37,055,567) (277,413) (37,332,980) (37,332,980)
17,200,693 1,470,863 330,821	(190,000) 467,948 –	– 221,815 175,573 (783,807)	17,010,693
			(37,055,567 (277,413
1,801,684 1,801,684	467,948 467,948	397,388 (40,000,000) 397,388

– 147 –

APPENDIX III FINANCIAL INFORMATION OF COMPANIES ACQUIRED SINCE THE LATEST PUBLISHED AUDITED ACCOUNTS

NOTES OF THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The purchase consideration HK$194 million would be settled by (i) issuance of 280,000,000 consideration shares of the Company at a price of HK$0.55 per share and (ii) balancing HK$40,000,000 would be paid by cash.

In this case, we assume all consideration shares in favor of the Vendor will be delivered to the Vendor upon completion.

The net cash outflow arising from the Proposed Acquisition totaling to HK$39,216,193 has been arrived at based on (i) the portion of cash consideration should be paid by the Company totaling HK$ 40,000,000, net of (ii) the cash and cash equivalents from Alliance Services and Alliance Systems totaling to HK$783,807 as at 31 August 2007, which was assumed to be acquired by the Group upon the Proposed Acquisition.

On 18 September 2007, the Group entered into an agreement with the Vendors to purchase the entire issue share capital of Loyal King and the shareholders’ loans owed by Loyal King to the Vendors. As Loyal King owns 97% and 60% share holdings in Alliance Services and Alliance Systems respectively, and thus after the completion of the Proposed Acquisition, the Group also has 97% and 60% share holdings in Alliance Services and Alliance Systems.

Loyal King and its subsidiary are, therefore, considered by the Directors as subsidiaries of the Group because both of them will be controlled by the Group after the completion of the Proposed Acquisition. The balance sheet of both companies will be consolidated with that of the Group form the date on which control is transferred to the Group.

The adjustment is to reflect the effect of the Proposed Acquisition on the consolidated balance sheet of the Group as if the Proposed Acquisition had taken place on 30 September 2007. The goodwill was determined based on consideration HK$ 194 million and adjusting the following:

i Shareholders’ loan owed by the original shareholders of the Targeted Group to the existing shareholders totaling HK$6,112,500 acquired by the Group.
ii Off-setting the outstanding consideration of HK$19,500,000 payable by the Group to the original owners of Targeted Group.
iii. Off-setting the following amounts stated in balance sheets of Loyal King, Alliance Systems and Alliance Services:

			Balance sheets of
			Alliance	Alliance
		Loyal King	Systems	Services
		HK$	HK$	HK$
–	Investments in subsidiaries	26,000,000	–	–
–	Share capital	387,500	20,000	200,000
–	Pre-acquisition reserves	–	1,360,526	27,327

iv. Adding back the amount of share of minority interest HK$559,030, which belong to minority shareholders of Alliance Systems and Alliance Services at 31 August 2007.

On completion of the Proposed Acquisition, the fair value of the consideration and the net assets of the Targeted Group will have to be assessed, As a result of the assessment, the amount of goodwill may be different from that estimated based on the basis stated above for the purpose of preparation of the unaudited pro forma financial information. Accordingly, the actual goodwill at the date of completion of the Proposed Acquisition may be different form that presented above.

It represents the inter-company balance eliminated.

– 148 –

VALUATION REPORT ON SUPERB KINGS

APPENDIX IV

Room 1701 on 17/F Jubilee Centre 18 Fenwick Street Wanchai, Hong Kong

10 April 2008

The Directors Galileo Holdings Limited 21st Floor, The Pemberton 22-26 Bonham Strand Sheung Wan Hong Kong

Dear Sirs/Madams,

In accordance with your instructions, we have made an appraisal of the fair market value of the business enterprise of Superb Kings Limited (“Superb Kings”). Superb Kings is an investment holding company. Its major asset is the leasing agreement entered into with First Cagayan Leisure and Resort Corporation for a term of 25 years in relation to the utilization of the land in Cagayan Valley of the Philippines for the development of the Prestigious and Leisure Resort.

This letter identifies the property appraised, describes the basis of valuation and assumptions, explains the valuation methodology utilized, and presents our conclusion of value. Excluded from this appraisal are all real estate property, machinery, equipment, supplies, stocks, spare parts, materials on hand, computer software, inventories, current assets, current liabilities or any intangible assets that may exist.

Business enterprise is defined for this appraisal as the total invested capital, net of the value of debt but including shareholders’ loans (if any), and is equivalent to shareholders’ equity plus shareholders’ loans.

The purpose of this appraisal is to express an independent opinion of the fair market value of Superb Kings as of 31 December 2007. It is our understanding that this appraisal is used for acquisition purposes.

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VALUATION REPORT ON SUPERB KINGS

APPENDIX IV

INTRODUCTION

The Background

On 11 December 2007, Galileo Holdings Limited (the “Company”) announced that the Formal Acquisition Agreement and the Supplemental Agreement were entered into between Galileo Capital Group (BVI) Limited (the “Purchaser”) and Mr. Yeung Hak Kan (the “Vendor”), pursuant to which the purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose the entire issued share capital of Superb Kings (the “Sale Shares”) and the shareholder’s loan (the “Sale Loan”) from the Vendor for a total consideration of HKD205,000,000. The Purchaser is a company incorporated in British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company. The Company is listed on the growth enterprise market of the Stock Exchange of Hong Kong (Stock Code: 8029).

Superb Kings and its Business

Superb Kings was incorporated in the British Virgin Islands on 6 July 2007 and is wholly and beneficially owned by the Vendor. The major asset of Superb Kings is the leasing agreement entered into with First Cagayan Leisure and Resort Corporation for a term of 25 years in relation to the utilization of the land in Cagayan Valley of the Philippines for the development of the Prestigious and Leisure Resort (the “Resort”). Superb Kings has also entered into construction contracts with CAMJ Construction Inc. to develop the Resort. During the 25-year leasing term, Superb Kings has the beneficial ownership of the Resort. Upon the expiration of the leasing terms, the leasing agreement will either be terminated or renewed. If the agreement is terminated, all the improvements built on the land (including the Resort) will be owned by First Cagayan Leisure and Resort Corporation.

Upon completion of the development, the Resort is expected to have a capacity to offer services of over 250 rooms for accommodations in Cagayan Valley. In addition, the Resort will offer extensive leisure facilities, including various water sports such as jet skiing, water skiing, scuba diving, yachting and fishing. According to the management, the revenues of the resort will mainly come from the operations of hotel accommodation, restaurants, retail stores and leisure facilities. In early 2007, a large-scale entertainment facility has been established in Cagayan Valley by Succeed Asia Pacific Company, Ltd (“Succeed Asia Pacific”) in view of the new direction of tourism development. The results of the operation of Succeed Asia Pacific’s entertainment facilities have been better than expected resulted in a strong demand for accommodations in Cagayan valley according to the management of Superb Kings (the “Management”).

On 2 February 2008, Superb Kings and Succeed Asia Pacific, an Independent Third Party, have entered into an agreement (the “Hotel Agreement”) that 245 rooms of the Resort shall be reserved exclusively for Succeed Asia Pacific for two years beginning from April 2008 and may be renewed upon expiration. The Management is confident in implementing Superb Kings’ business plan due to its hotel revenue is secured by the Hotel Agreement. According to the projections provided by the Management (the “Projections”), total revenue in financial year 2008 and financial year 2009 will reach HKD146.2 million and HKD148.2 million respectively. We have assumed a mild revenue growth rate of 3% in the remaining operating years. To the best knowledge of Directors, the Succeed Asia Pacific is principally engaged in package tours, travel and other related services.

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APPENDIX IV

VALUATION REPORT ON SUPERB KINGS

In addition, according to a legal opinion, Superb Kings is engaged in the tourism business within the Cagayan Special Economic Zone and Freeport and is entitled to tax holidays and preferential tax treatments.

INDUSTRY AND MARKET OVERVIEW

The Philippines is one of the popular countries for sightseeing and vacations in South-east Asia. The country’s international tourism receipts have substantially increased to US$4.9 billion, about 4% of the country’s GDP in 2007. The tourism industry reached a new high in visitor arrivals with 3,091,993 visitors in 2007 compared to 2,843,345 in 2006[1] . According to the Department of Tourism of the Philippines, Korea, U.S., Japan, China and Taiwan are the top sources of tourists, with surging number of Russians travel to the country[2] .

The Philippines Department of Tourism has put a lot of effort to attract not only first time visitors, but also repeated visitors. Believing that the tourists are interested in its natural resources such as beautiful beaches, vast coastal areas and coral reefs, the country promotes itself as a healthy and beautiful tourism destination by focusing on eco-tourism. The diversity of a total of 7,107 islands within the country and over 32 eco-tourism sites are the major attractions. Cagayan Valley, Tugeugarao and Panay Island are being promoted for white water rafters while Palawan, Benguet, Banawe and Sagade are for nature and adventure seekers[3] .

To meet up rapid growth in tourism, infrastructure, such as roads, railway, seaports, and airport need to be put in place or improved. At present, the Philippines government is involved in 32 infrastructure projects in Central Philippines, where the country’s tourist hotspots are concentrated[4] . The strong support of the Philippine government, led by the Department of Tourism, has strongly influenced the very good performance of the Country’s tourism industry.

The availability of direct flights and the development of other international airports are very crucial to the growth of tourism industry. Asian Spirit, a domestic airline operator in Philippines, has launched flights from Macau to Cagayan in 2007. It plans to have other flights from 14 cities in Asia and the Pacific to Cagayan in the near future. Besides, an international airport will also be built in Cagayan valley this year to improve the transportation network, providing a greater access for the increasing demand.

1 Philippinebusiness.com, “Tourism Receipts Hit US$4.9B in 2007”, dated 11 January 2008, http://philippinebusiness.com.ph/news_updates/tourism.htm
2 Philippinebusiness.com, “Tourism Arrivals Hit 2.2 million in January – September”, dated 5 January 2008, http://philippinebusiness.com.ph/news_updates/tourism.htm
3 Euromonitor.com, “Travel and Tourism in the Philippines”, dated Oct 2006, http://www.euromonitor.com/Travel_And_Tourism_in_the_Philippines?print=true
4 Philippinebusiness.com, “Tourism Momentum Needs Accelerated Infrastructure Development”, dated 23 February 2007, http://philippinebusiness.com.ph/news_updates/tourism.htm

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APPENDIX IV

VALUATION REPORT ON SUPERB KINGS

However, the shortage of accommodation facilities, particularly in most of top tourist destinations, turned away 500,000 tourists in 2007[5] . The Department of Tourism is expected that there is a need to construct 20,000 more hotel rooms to accommodate a target of 5 million tourists by 2010[6] . With the high occupancy levels and steadily increasing visitor arrivals in the last several years, the Philippines has caught the attention of numerous major hotel and property developers from all around the globe.

Tourism in Cagayan Valley

==> picture [146 x 218] intentionally omitted <==

Cagayan Valley, unlike other major tourist destinations in Philippines, is located in the North Luzon Island. It is about 500 kilometers away from Manila, the capital city of the Philippines. With its rich cultural heritage, religious traditions and natural attractions, Cagayan Valley has become a popular tourist destination, compared with those located in the central regions, such as Subic, Cebu, and Davao etc.

Cagayan Valley has a consistent climate and a beach shore of as long as one kilometer. Reviewing Superb Kings’ business plan, different types of bungalows will be built along the beach shore. A total of 635,160 tourists have visited the Cagayan Valley Region in 2006, a 1.8 percent increase from that of 623,849 tourists in 2005[7] . With the launch of large-scale entertainment facility last year and the upcoming construction of the new resort facilities such as hotels, motels, casinos and other sports facilities, more domestic and foreign tourists will be lured to the Cagayan Valley Region.

5 Philippinebusiness.com, “Lack of Hotels Turns Away 500,000 Tourists”, dated 12 January 2007, http://philippinebusiness.com.ph/news_updates/tourism.htm

6 Euromonitor.com, “Travel and Tourism in the Philippines”, dated Oct 2006, http://www.euromonitor.com/Travel_And_Tourism_in_the_Philippines?print=true

7 National Economic and Development Authority, Cagayan Valley Bounces Back in 2006, 15 May 2007

– 152 –

VALUATION REPORT ON SUPERB KINGS

APPENDIX IV

BASIS OF VALUATION AND ASSUMPTIONS

We have appraised the business enterprises on the basis of fair market value. Fair market value is defined as the estimated amount at which the asset might be expected to exchange between a willing buyer and a willing seller, neither being under compulsion, each having reasonable knowledge of all relevant facts, and with the buyer and seller contemplating retention of the business at its present location for continuation of current operations unless the break-up of the business or the sale of its assets would yield greater investment returns.

Our investigation included site visits and discussions with the Management in relation to the history and nature of the business, a study of the financial projections of Superb Kings (the “Projections”) covering the period from 1 January 2008 to 30 September 2032, a review of the information provided by the Management in connection with the Resort. According to the Management, the Projections are based on the Hotel Agreement and the operation result of a nearby local similar business with 48 hotels rooms. The Projections of financial year 2008 include the rental revenues and expenses from the Hotel Agreement and other operations. According to the Hotel agreement, 245 rooms will be reserved exclusively for Succeed Asia Pacific Company Ltd with a daily rental of USD27,250 and which is equivalent to an annual rental of HKD77.6 million. In addition, the Projections include revenues of HKD68.6 million from the operations of restaurants, retail stores and recreational facilities in the Resort. Therefore, the projected total revenue in financial year 2008 is estimated to be HKD146.2 million. The Projections also cover expenses and costs incurred in the operations of the resort, restaurants, stores and recreational facilities, such as salaries, utilities, repairs and maintenance, office expenses and messing etc. The total expense in financial year 2008 is estimated to be HKD58.1 million. We have assumed that such information and representation provided to us are true and accurate. Before arriving at our opinion of value, we have considered the following principal factors:

The nature and prospect of the tourism industry in the Philippines;
The economic outlook in general and the specific economic and competitive elements affecting Superb Kings’ business, the industry and its market;
The market-derived investment returns of entities engaged in a similar line of business;
The risks relating to Superb Kings when implementing its business plan; and
The Projections and the business plan of Superb Kings.

Due to the changing environment in which Superb Kings is operating, a number of assumptions have to be established in order to sufficiently support our concluded value of the business enterprises. The major assumptions adopted in this appraisal are:

There will be no major changes in the existing political, legal, and economic conditions in the Philippines, in which Superb Kings will carry on its business;

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VALUATION REPORT ON SUPERB KINGS

APPENDIX IV

There will be no major changes in the current and expected taxation law in the Philippines, that the rates of tax payable remain unchanged and that all applicable laws and regulations will be complied with;
Exchange rates and interest rates will not differ materially from those presently prevailing;
Industry trends and market conditions for related industries in the Philippines will not deviate significantly from project forecasts;
The business plan and the Projections have been prepared on a reasonable basis, reflecting estimates which have been arrived at after due and careful consideration;
We have assumed a mild 3% annual growth in both revenues and expenses where 3% to 5% is the target range of the inflation rate of the Philippines;
The projected total revenue in financial year 2008 is estimated to be HKD 146.2 million. For the Projections of financial year 2009, the rental revenue remains the same as stated on the Hotel Agreement and the other revenues are assumed to have a mild 3% growth according to the assumption. Therefore, the estimated total revenue of HKD148.2 million in financial year 2009 includes annual rental revenue of HKD77.6 million and revenue from the other operations of HKD70.6 million. For the remaining years, all revenues are assumed to have an annual 3% growth. On the other hand, all expenses are assumed to have an annual 3% growth starting from the financial year 2009.
The availability of finance will not be a constraint on the Resort’s operation in accordance to the business plan and the Projections, and Superb Kings will remain debt-free in the future;
Superb Kings will recruit and have competent management, key personnel, and technical staff to implement the business plan and the Projections;
According to the Hotel Agreement, it is renewable upon expiration, it is assumed that it will be renewed until expiration of the lease agreement;
Superb Kings entitles to four years tax holiday and preferential tax treatment throughout the operating period; and
Superb Kings will continue its business during the lease term.

VALUATION METHODOLOGY

The fair market value of Superb Kings Limited was developed through the application of the income approach technique known as the Discounted Cash Flow Method. In this method, the value depends on the present worth of future economic benefits to be derived from

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APPENDIX IV

VALUATION REPORT ON SUPERB KINGS

ownership of equity and shareholders’ loans. Thus, an indication of value was developed by discounting future free cash flow available for distribution to shareholders and for servicing shareholders’ loans to their present worth at market-derived rates of return appropriate for the risks and hazards (discount rate) associated with the comparable business. Discounting the future free cash flow does not involve the adoption of accounting policy because the discount cash flow method is cash based.

A discount rate is the expected rate of return that an investor would have to give up by investing in the subject investment instead of in available alternative investments that are comparable in terms of risk and other investment characteristics. When developing a discount rate to apply to the free cash flow from operation, the discount rate is base on a weighted average cost of capital (“WACC”) developed through the application of the Capital Asset Pricing Model (“CAPM”). In determining an appropriate discount rate utilizing the WACC analysis, a study was made of short-term interest rates, the yields of long-term corporate and government bonds, and other alternative investment instruments, as well as the typical capital structure of the companies in the industry. WACC is the weighted sum of cost of equity and after tax cost of debt.

The cost of equity was developed using Capital Asset Pricing Model (“CAPM”), a model widely used by the investment community. CAPM states that an investor requires excess returns to compensate for any risk that is correlated to the risk in the return from the stock market as a whole but requires no excess return for other risks. Risks that are correlated with the return from the stock market are referred to as systematic; other risks are referred to as nonsystematic. Under CAPM, the appropriate cost of equity is the sum of the risk-free rate and the equity premium required by investors to compensate for the systematic risk assumed with adjustment for increments for risk differentials of the company being valued versus those of the comparable companies, which include adjustments for size (the “Small Capitalization Risk Premium”), operation expansion (the “Company Specific Risk Discount”) and other risk factors in relation to the liquidity of an ownership interest (the “Discount for Lack of Marketability”).

The risk-free rate associated with the subject company is the yield on bonds issued by the government of the country in which the subject company locates. With reference to Bloomberg, the risk free rate of the Philippines was 6.58%. Our analysis suggested that a discount rate of 28.83% was appropriate for valuing Superb Kings Limited.

We were furnished by the Management for the purpose of this appraisal, with the Projections as well as other records and documents. In arriving at our opinion of value, we have relied upon such projection, records and documents, as well as financial and business information from other sources.

Additional Valuation Consideration

Small Capitalization Risk Premium

Small capitalization risk premium is the excess return that an investor would demand in order to compensate for the additional risk over that of the entire stock market

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APPENDIX IV

VALUATION REPORT ON SUPERB KINGS

when investing in a small capitalization company. This premium reflects the fact that the cost of capital increases with decreasing size of the business. A number of studies were conducted in the U.S. which concludes that the risk premium associated with a small company is over and above the amount that would be warranted just as a result of the business’ systematic risk derived from the CAPM model. Based on the 2008 SBBI Valuation Edition Yearbook published by MorningStar Inc., we concluded that a small capitalization risk premium of 5.82% is appropriate for Superb Kings.

Company Specific Risk Discount

Superb Kings Limited is a new startup business. To reflect the startup risk, a company specific risk premium of 3% is added in developing the discount rate for Superb Kings.

Discount for Lack of Marketability

The concept of marketability deals with the liquidity of an ownership interest, that is, how quickly and easily it can be converted to cash if the owner chooses to sell. The lack of marketability discount reflects the fact that there is no ready market for shares in a closely held corporation. Ownership interests in closely held companies are typically not readily marketable compared to similar interests in public companies. Therefore, a share of stock in a privately held company is usually worth less than an otherwise comparable share in a publicly held company.

A number of studies were conducted in the U.S. in an attempt to determine average levels of discounts for lack of marketability. These studies all fall into one of two basic categories, depending on the type of market transaction data on which they are based:

Restricted (“letter”) stock studies.
Studies of transactions in closely held stocks prior to initial public offerings (IPOs).

In this case, a lack of marketability discount of 30% is deemed to be reasonable for Superb Kings Limited.

Sensitivity Analysis

We have identified the discount rate as the variable in our model whose sensitivity on the fair market value of Superb Kings is being tested. Our conclusion of the fair market value of Superb Kings increases from HKD212.8 million to HKD230.4 million as the discount rate decreases from 29.83% to 27.83%.

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VALUATION REPORT ON SUPERB KINGS

APPENDIX IV

CONCLUSION OF VALUE

Based upon the investigation and analysis outlined above and on the appraisal method employed, it is our opinion that as of 31 December 2007 the fair market value of Superb Kings is reasonably stated by the amount of HONG KONG DOLLARS TWO HUNDRED TWENTY-ONE MILLION AND TWO HUNDRED THOUSAND (HKD221,200,000) ONLY.

This conclusion of value was based on the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Foundation of the US and generally accepted valuation procedures and practices that rely extensively on the use of numerous assumptions and the consideration of many uncertainties, not all of which can be easily quantified or ascertained.

We have not investigated the title to or any liabilities against the property appraised.

We hereby certify that we have neither present nor prospective interests in Superb Kings Limited, Galileo Holdings Limited or the value reported.

Respectfully submitted, For and on behalf of

GRANT SHERMAN APPRAISAL LIMITED Keith C.C. Yan, ASA Jacqueline W. Huang, Ph.D Managing Director Associate Director

Note: Mr. Keith C.C. Yan is an Accredited Senior Appraiser (Business Valuation) of the American Society of Appraisers and he has been conducting business and intangible assets valuation in the Greater China region for various purposes since 1988 and has more than 10 years experiences in DCF modeling. He has been involved in valuation services for a wide variety of business enterprises for the purposes of sale, merger, allocation of purchase price, accounting and tax, majority and minority stock interests, public listing, and strategic joint-ventures. He has also had significant experience in the valuation of intangible assets including trademarks, patents, know-how, license agreements, quotas, assembled workforce, copyrights, distribution networks, and computer software. He was involved in the valuation of intangible assets or business enterprises for public document purposes for clients from a wide variety of industries including metal fabrication, power generation, publishing, fashion retailing, food and beverage, transportation, automobile, Internet, telecommunications, property development, infrastructure, electronics, bio-tech, pharmaceutical, newspaper, entertainment, petro-chemical, software, satellite, construction, oil and gas and hospitality. Jacqueline w. Huang is a Ph.D in real estate economics from the University of Hong Kong. She has been conducting business valuation for various purposes since 2005 and has extensive experience in transaction services.

Analyze and report by: Keith C.C. Yan, ASA Jacqueline W. Huang, Ph.D.

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VALUATION REPORT ON SUPERB KINGS

APPENDIX IV

(i) Letter from reporting accountants of the Company

The following is the text of a report, prepared for the purpose of incorporation in this circular, received from the independent reporting accountants, HLB Hodgson Impey Cheng, Chartered Accountants, Certified Public Accountants, Hong Kong.

==> picture [229 x 84] intentionally omitted <==

31/F Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong

10 April 2008

The Board of Directors Galileo Holdings Limited 21st Floor, The Pemberton 22-26 Bonham Strand Sheung Wan Hong Kong

Dear Sirs,

We report on the calculations of the discounted future estimated cash flows on which the business valuation (the “Valuation”) dated 10 April 2008 prepared by Grant Sherman Appraisal Limited (the “Valuer”) in respect of the fair value of the entire equity interest in Superb Kings Limited (“Superb Kings”) as at 31 December 2007 as set out in Appendix IV of the circular of Galileo Holdings Limited (the “Company”) dated 10 April 2008 (the “Circular”) in connection with the proposed acquisition of the entire interest in Superb Kings by the Company.

Respective responsibilities of the directors of the Company and the reporting accountants

The directors of the Company are solely responsible for the preparation of the discounted future estimated cash flows for the valuation which is regarded as a profit forecast under rule 19.61 of the Rules Governing the Listing of Securities on the Growth Enterprise Market (“GEM”) of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”).

It is our responsibility to report, as required by rule 19.62(2) of the GEM Listing Rules, on the calculations of the discounted future estimated cash flows on which the Valuation is based. The discounted future estimated cash flows do not involve the adoption of accounting policies. The discounted future estimated cash flows depend on future events and on a number of bases and assumptions which cannot be confirmed and verified in the same way as past results and not all of which may remain valid throughout the period. Consequently, we have

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APPENDIX IV

VALUATION REPORT ON SUPERB KINGS

not reviewed, considered or conducted any work on the appropriateness and validity of the bases and assumptions and express no opinion on the appropriateness and validity of the bases and assumptions on which the discounted future estimated cash flows, and thus the Valuation, are based.

Basis of opinion

We conducted our work in accordance with Hong Kong Standards on Assurance Engagements 3000 “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to the procedures under Auditing Guideline 3.341 “Accountants’ report on profit forecasts” issued by Hong Kong Institute of Certified Public Accountants. We examined the arithmetical accuracy of the Valuation. Our work has been undertaken solely to assist the directors of the Company in evaluating whether the discounted future estimated cash flows, so far as the calculations are concerned, has been properly compiled and for no other purpose. We accept no responsibility to any other person in respect of, arising out of in connection with our work. Our work does not constitute any valuation of Superb Kings.

Opinion

Based on the foregoing, in our opinion, the discounted future estimated cash flows, so far as the calculations are concerned, has been properly compiled in accordance with the bases and assumptions made by the directors of the Company as set out in Appendix IV of the Circular.

Yours faithfully,

HLB Hodgson Impey Cheng Chartered Accountants Certified Public Accountants Hong Kong

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VALUATION REPORT ON SUPERB KINGS

APPENDIX IV

(ii) Letter from financial adviser of the Company

The following is the text of a report, prepared for the purpose of incorporation in this circular, received from the Nuada Limited, the financial adviser of the Company.

==> picture [156 x 35] intentionally omitted <==

7th Floor, New York House 60 Connaught Road Central Hong Kong

10 April 2008

To the Directors Galileo Holdings Limited

Dear Sirs,

We refer to the valuation report dated 10 April 2008 prepared by Grant Sherman Appraisal Limited (the “Valuer”) in respect of the fair market value of the business enterprise of Superb Kings Limited (the “Superb Kings”) (the “Valuation Report”). The Valuation Report has been set out in Appendix IV to the circular of Galileo Holdings Limited (the “Company”) dated 10 April 2008 (the “Circular”).

As set out on pages 149 to 157 to the Circular, the Valuation Report including the basis of valuation and assumptions and the projections, of which the Directors are solely responsible, has been prepared based on the cash flow projection of Superb Kings and its business for the period from 1 January 2008 to 30 September 2032 made by the Valuer and reviewed by the sole director of Superb Kings (the “Projections”).

We have discussed with you the basis and assumptions in the Valuation Report upon which the Projections has been made. We have also considered the letter dated 10 April 2008 issued by HLB Hodgson Impey Cheng, Chartered Accountants, Certified Public Accountants, Hong Kong addressed to you, regarding whether the Valuation Report was compiled properly so far as the calculations are concerned.

On the basis of the assumptions and calculations adopted by the Valuer in respect of the Projections after properly reviewed by you, we are of the view that the Projections, for which the Directors are responsible, has been made after due and careful enquiry by you.

The purpose of this letter in connection with the Projections undertake by us is solely for the strict compliance under Rule 19.62(3) of the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited. We, however, express no opinion in this letter on the actual results of the Projections as the Projections are based on hypothesis of the future event.

Yours faithfully, For and on behalf of Nuada Limited Po Chan Executive Director

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

Room 1701 on 17/F Jubilee Centre 18 Fenwick Street Wanchai, Hong Kong

10 April 2008

The Directors Galileo Holdings Limited 21st Floor, The Pemberton 22-26 Bonham Strand Sheung Wan Hong Kong

Dear Sirs/Madams,

In accordance with your instructions to value the property interests to be acquired by Galileo Holdings Limited (the “Company”) or its subsidiaries (the “Group”) located at Barangay San Vicente, Municipality of Sta. Ana, Province of Cagayan in Cagayan Valley of the Philippines and property interests held by the Enlarged Group, we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for providing you with our opinion of the value of the property interests as at 31 January 2008.

Our valuation of the property interests is our opinion of the market value which we would define as intended to mean the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

For the property interests in Group I, due to the nature of the buildings and structures constructed for specific purpose, there is no readily identifiable market comparable. Thus these buildings and structures cannot be valued on the basis of direct comparison. They have therefore been valued on the basis of Depreciated Replacement Cost (“DRC”). DRC is based on an estimate of the market value for the existing use of the land, plus the current gross replacement (reproduction) costs of the improvements, less allowances for physical deterioration and all relevant forms of obsolescence and optimization.

We are of the opinion that no commercial value attribute to the land of Group I and property interests of Group IV mainly due to the short term nature or the prohibition against assignment or sub-letting or otherwise due to the lack of substantial profit rents.

We have valued the property interests in Group II & III by Comparison Approach assuming sale in their existing state with the benefit of vacant possession and by making reference to comparable sales evidences as available in the relevant market.

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

Our valuation has been made on the assumption that the Company sells the property interest on the market in its existing state without the benefit of a deferred terms contract, leaseback, joint venture, management agreement or any similar arrangement which would serve to affect the value of the property.

No allowance has been made in our report for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect their value.

We have assumed that all consents, approvals and licenses from relevant government authorities for the property have been granted without any onerous conditions or undue time delay which might affect its value. It is assumed that all applicable zoning and use regulations and restrictions have been complied with unless nonconformity has been stated, defined and considered in the report.

No environmental impact study has been ordered or made. Full compliance with applicable national, provincial and local environmental regulations and laws is assumed unless otherwise stated, defined, and considered in the report. It is also assumed that all required licenses, consents, or other legislative or administrative authority from any local, provincial, or national government or private entity or organization either have been or can be obtained or renewed for any use which the report covers.

In valuing the property interests, we have complied with all the requirements contained in Chapter 8 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards on Properties (1st Edition 2005) published by The Hong Kong Institute of Surveyors.

In the course of our valuation, we have relied on a considerable extent on information provided by the Company on such matters as statutory notices, easements, tenure, occupation, floor areas, identification of the property and all other relevant matters. We have had no reason to doubt the truth and accuracy of the information provided to us by the Companies which is material to the valuation. We were also advised by the Company that no material facts have been omitted from the information supplied. All documents have been used as reference only. All dimensions, measurements and areas are approximations only. We have relied to the considerable extent on the legal opinion provided by the Company’s legal adviser, Perlas De Guzman Garcia and Asuncion Law Offices on the Philippines’s laws regarding the titles of the property in the Philippines.

No site investigation has been carried out to determine the suitability of the ground conditions or the services for any property development thereon. Our valuation is carried out on the assumption that these aspects are satisfactory. We have also assumed that all consents, approvals and licenses from relevant government authorities for the proposals have been or will be granted without onerous conditions or delay.

Other special assumptions for the property, if any, have been stated in the footnotes of the valuation certificate.

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

We have inspected out inspection on 3 January 2008 and wherever possible, the interior of the properties included in the attached valuation certificates. During the course of our inspection, we did not note any serious defects. However, no structural survey has been made and we are therefore unable to report as to whether the properties are free from rot, infestation or other defects. No tests were carried out on any of the services.

Unless otherwise stated, all dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us by the Company and are therefore approximate. We have no reason to doubt the truth and accuracy of the information provided to us by the Company, and have been advised by the Company that no material facts have been omitted from the information provided.

We have not carried out detailed site measurements to verify the correctness of the site areas in respect of the property but have assumed that the site areas shown on the documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations. No on-site measurement has been taken.

The property value is denominated in Hong Kong Dollars. The exchange rate used in valuing the property interests in the Philippines as on the Valuation Date was HK$1 to PHP5.2.

Our Valuation Certificate is enclosed herewith.

Yours faithfully,

For and on behalf of

GRANT SHERMAN APPRAISAL LIMITED

Peggy Y. Y. Lai

MRICS MHKIS RPS Associate Director Real Estate Group

Note: Ms. Peggy Y.Y. Lai is a Chartered Surveyor since 1996, she has extensive experience in valuation of properties in Hong Kong, the PRC and Asian Pacific Region including the Philippines.

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

SUMMARY OF VALUATION

Group I – Property interests to be acquired by the Company in Philippines

		Capital value in
		existing state as at
	Property	31 January 2008
1.	A parcel of land together with buildings and structures	HK$23,500,000
	located at Barangay San Vicente,
	Municipality of Sta, Ana,
	Province of Cagayan in Cagayan Valley of the Philippines

Group II – Property interests held by the Enlarged Group for self occupation in Hong Kong

2.	Shops N and O on	HK$4,930,000
	G/F, Cheong Lok Mansion
	1H, 1J & 1K Baker Street
	2F, 2G & 2H Cooke Street
	1-11 Lo Lung Hang Street
	2-12 Malacca Street and
	Shops N and O on
	M/F, Cheong Lok Mansion
	No. 1 G Baker Street
	Kowloon

Group III – Property interests held by the Enlarged Group for investment in Hong Kong

Shop P on G/F, Cheong Lok Mansion 1H, 1J & 1K Baker Street 2F, 2G & 2H Cooke Street 1-11 Lo Lung Hang Street 2-12 Malacca Street and Shop P on M/F, Cheong Lok Mansion No. 1 G Baker Street Kowloon

HK$3,040,000

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

Property

Capital value in existing state as at 31 January 2008

Group IV – Property interests leased by the Enlarged Group in Hong Kong

Room 2202 on the 22nd Floor of Hopewell Centre No. 183 Queen’s Road East Wanchai Hong Kong

No Commercial Value

21st and 22nd Floor of the Pemberton Nos.22-26 Bonham Strand Sheung Wan Hong Kong

No Commercial Value

Grand Total

HK$31,470,000

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

VALUATION CERTIFICATE

Group I – Property interest to be acquired and by the Company in Philippines

Capital value in Particulars of existing state as at Property Description and tenure occupancy 31 January 2008 1. A parcel of land The property comprises a parcel The property is HK$23,500,000 together with of land with a site area of 20,832 currently under buildings and sq.m. on which is going to construction. structures located construct about 100 units of one at Barangay San to two storeys semi-detached or As at valuation date, Vicente, detached houses for hotel resort 38 units of houses Municipality of development. were erected. Sta, Ana, Province of Cagayan in The whole development will be Cagayan Valley of completed in about 2008. the Philippines Facilities ancillary to the development include casino, open swimming pool, restaurant and karaoke. The property is held under a Contract of Sublease/Memorandum of Agreement dated 4 October 2007 for a term of 25 years commencing from 4 October 2007. The rental for first two years is PHP20,500,000. The monthly rentals are US$12,300, US$13,500, US$14,900 for the third, fourth and fifth year respectively. From the sixth year onward, the rental is subject to a 5% increase.

Notes:

(i) We have been provided with a legal opinion regarding the property interests by the Company’s Philippines’ legal advisor, (Perlas De Guzman Garcia and Asuncion Law Offices), which contains, inter alia, the followings:
(a) the terms and substance of the Contract of Sublease/Memorandum of Agreement dated (4 October 2007) are valid, legal and binding on the (First Cagayan Leisure and Resorts Corporation) and Superb Kings Limited:
- (i) The property with a total site area of about 20,832 sq.m. is subject to a Contract of Sublease/Memorandum of Agreement dated 4 October 2007 signed between First Cagayan Leisure and Resorts Corporation (“Lessor”) and Superb Kings Limited (“Lessee”) for the term of 25 years commencing on 4 October 2007 at a rental of about PHP20,500,000 for the first two years of the lease period; a monthly rental of US$12,300 for the third year; a monthly rental of US$13,500 for the fourth year; a monthly rental of US$14,900 for the fifth year; and a monthly rental which may be increased by the Lessor by 5% for the six year onwards.
(b) No material encumbrances have been created against the land use right (title) to the property and the land use right is free from any legal impediment.
(c) The relevant taxes on the subject property have been fully settled.
(ii) As advised by the Company, the total development costs paid up to 31 January 2008 was approximately PHP224,702,760 and the further development cost to be incurred for completing the development was approximately PHP152,461,240. As at the valuation date, since the site formation, civil construction work and infrastructure works are in progress.

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

VALUATION CERTIFICATE

Group II – Property interest held by the Enlarged Group for self occupation in Hong Kong

Capital value in Particulars of existing state as at Property Description and tenure occupancy 31 January 2008 2. Shops N and O on The property comprises 2 shop The property is HK$4,930,000 G/F, Cheong Lok units on ground floor and 2 occupied by Cheung Mansion shops units on Mezzaine Floor of Shing Funeral 1H, 1J & 1K a 10-storey composite building of Limited. Baker Street reinforced concrete construction. 2F, 2G & 2H The property was completed in Cooke Street about 1966. 1-11 Lo Lung Hang Street The saleable area of the ground 2-12 Malacca Street floor of the property is about 559 and Shops N sq.ft. , while the saleable area of and O on M/F, the cockloft is about 659 sq.ft. Cheong Lok Mansion The property is held under No. 1 G Baker Conditions of Exchange No. Street 8802 for a term of 75 years Kowloon renewable for 75 years commencing from 5 November 4/236th parts or 1900. The rent per annum is shares of and in HK$140. Hung Hom Inland Lot No. 484.

Notes:

(i) The registered owner of the property is Grand Sea Limited, a wholly owned subsidiary of the Company vide Memorial No. UB9327949 dated 20 August 2004.
(ii) The property is subject to a mortgage in favour of Nanyang Commercial Bank Limited vide Memorial No. 07053100650044 dated 22 May 2007.
(iii) The property is subject to a Deed of Mutual Covenant vide Memorial No. UB557437 dated 20 October 1966.
(iv) Cheung Shing Funeral Limited, a wholly owned subsidiary of the Company was issued on Undertaker’s Licence (Undertakers of Burials Regulation) by Food and Environment Hygiene Department for carrying funeral business.
(v) The cockloft of shop N has been enlarged by enclosing the void area and part of the rear portion of shop N on G/F have been enlarged, as compared with the floor plans provided. As at the date of valuation, there is no documentary consent available from the Buildings Department and such enlargement may be unauthorized alteration and may subject to enforcement action for reinstatement by the Buildings Department. Nevertheless, such alteration may be rectified by qualified professionals and as confirmed by the Company, such reinstatement shall have no detrimental effect on the business operations in the property.

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

VALUATION CERTIFICATE

Group III – Property interest held by the Enlarged Group for investment in Hong Kong

Property Description and tenure 3. Shop P on G/F, The property comprises a shop Cheong Lok unit on ground floor and a shop Mansion unit on Mezzaine Floor of a 101H, 1J & 1K storey composite building of Baker Street reinforced concrete construction. 2F, 2G & 2H The property was completed in Cooke Street about 1966. 1-11 Lo Lung Hang Street The saleable area of the ground 2-12 Malacca Street floor of the property is about 384 and Shop P on sq.ft. , while the saleable area of M/F, Cheong Lok the cockloft is about 301 sq.ft. Mansion No. 1 G Baker The property is held under Street Conditions of Exchange No. Kowloon 8802 for a term of 75 years renewable for 75 years 2/236th parts or commencing from 5 November shares of and in 1900. The rent per annum is Hung Hom Inland HK$140. Lot No. 484.

Capital value in Particulars of existing state as at occupancy 31 January 2008 The property is HK$3,040,000 tenanted with monthly rent of HK$15,000 for a term of 2 years commencing from 7 April 2006 and expiring on 6 April 2008 exclusive of management fee but inclusive of Government rates and rent.

Notes:

(i) The registered owner of the property is Grand Sea Limited, a wholly owned subsidiary of the Company vide Memorial No. UB9327951 dated 20 August 2004.
(ii) The property is subject to a mortgage in favour of Nanyang Commercial Bank Limited vide Memorial No. 07053100650044 dated 22 May 2007.
(iii) The property is subject to a Deed of Mutual Covenant vide Memorial No. UB557437 dated 20 October 1966.
(iv) Pursuant to a tenancy agreement dated 15 March 2006, the property was leased to and independent third parties.

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

VALUATION CERTIFICATE

Group IV – Property interest leased by the Enlarged Group in Hong Kong

Capital value in Particulars of existing state as at Property Description and Tenure Occupancy 31 January 2008 4. Room 2202 The property comprises an office The property is leased No Commercial Value on the 22nd Floor unit on 22nd floor of a by Golden Harvest of Hopewell 66-storey composite building. Trading Limited, Centre The building was completed in a wholly owned No. 183 Queen’s about 1980. subsidiary of the Road East Company for a term Wanchai The lettable area of the property of 3 years Hong Kong is about 953 sq.ft. commencing from 1 March 2007 to Inland Lot The property is held under 28 February 2010 at a No. 8851 Conditions of Exchange No. monthly rental of UB11834 for a term of 75 years HK$20,966 exclusive renewable for 75 years of air-conditioning commencing from 23 May 1985. charges, management The rent per annum is HK$1,000. fees, rates and other outgoings. (see note iii)

Notes:

(i) According to the records in the relevant Land Registry, the registered owner of the property is Singway (B.V.I) Company Limited.
(ii) Pursuant to a tenancy agreement dated 28 March 2007, Golden Harvest Trading Limited, a wholly owned subsidiary of the Company (“the lessee”), leased the property from Singway (B.V.I.) Company Limited (“the lessor”), an independent third party.
(iii) As advised by the Company, the subject tenancy agreement was terminated on 29 February 2008.

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APPENDIX V PROPERTY VALUATION REPORT ON THE ENLARGED GROUP

VALUATION CERTIFICATE

Property Description and Tenure

Capital value in Particulars of existing state as at Occupancy 31 January 2008

21st Floor and The property comprises office The property is leased No Commercial Value 22nd Floor of the area on 21st floor and 22nd floor by Golden Harvest Pemberton of a 25-storey composite Trading Limited, Nos. 22-26 building. The building was a wholly owned Bonham Strand completed in about 1984. subsidiary of the Sheung Wan Hong Company for a term Kong The total gross floor area of the of 2 years property is about 5,628 sq.ft. commencing from The Remaining 16 December 2007 to Portion of Inland The property is held under 15 December 2009 at Lot No. 7667 Conditions of Exchange No. a monthly rental of UB6383 for a term of 999 years. HK$100,000 exclusive The rent is HK$74 for IL 7667. of air-conditioning charges, service charges, rates and other outgoings.

Notes:

(i) According to the records in the relevant Land Registry, the registered owner of the property is Pemberton Assets Management Limited.
(ii) Pursuant to a tenancy agreement dated 14 December 2007, Golden Harvest Trading Limited, a wholly owned subsidiary of the Company (“the lessee”), leased the property from Pemberton Assets Management Limited (“the lessor”), an independent third party.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

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31/F Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong

10 April 2008

The Board of Directors Galileo Holdings Limited 21st Floor, The Pemberton 22-26 Bonham Strand Sheung Wan Hong Kong

Dear Sirs,

We report on the unaudited pro forma financial information of Galileo Holdings Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), Superb Kings Limited (“Superb Kings”) (together with the Group hereinafter referred to as the “Enlarged Group”) set out on pages 171 to 181 under the headings of “Unaudited Pro Forma Financial Information of the Enlarged Group” (the “Unaudited Pro Forma Financial Information”) in Appendix VI of the Company’s circular dated 10 April 2008 (the “Circular”) in connection with the proposed acquisition of entire issued share capital of Superb Kings and the Sale Loan (the “Acquisition”). The Unaudited Pro Forma Financial Information has been prepared by the directors of the Company, for illustrative purposes only, to provide information about how the Acquisition, which will result in the formation of the Enlarged Group, might have affected the relevant financial information presented, for inclusion in Appendix VI of the Circular. The basis of preparation of the Unaudited Pro Forma Financial Information is set out on page 174 of Appendix VI to this Circular.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS OF THE COMPANY AND REPORTING ACCOUNTANTS

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 7.31 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) and Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

It is our responsibility to form an opinion, as required by paragraph 7.31(7) of the GEM Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion solely to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

BASIS OF OPINION

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. This engagement did not involved independent examination of any of the underlying financial information.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and because of its hypothetical nature, it does not provide any assurance or indication that any event will take place in the future and may not be indicative of:

the financial position of the Enlarged Group as at 30 September 2007 or any future date, or
the results and cash flows of the Enlarged Group for the year ended 31 March 2007 or any future periods.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

OPINION

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 7.31(1) of the GEM Listing Rules.

Yours faithfully, HLB Hodgson Impey Cheng

Chartered Accountants Certified Public Accountants Hong Kong

– 173 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

INTRODUCTION TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

The following is the unaudited pro forma financial information of the Enlarged Group as if the Acquisition completed on 30 September 2007 for the unaudited pro forma consolidated balance sheet and the Group has completed the acquisition of Loyal King Investment Limited (“Loyal King”) on 30 September 2007, and the Acquisition completed on 1 April 2006 for the unaudited pro forma consolidated income statement and cash flow statement and the Group has completed the acquisition of Loyal King on 1 April 2006. The accompanying unaudited pro forma financial information of the Enlarged Group has been prepared to illustrate the effect of the proposed acquisition of entire issued share capital of Superb Kings and the Sale Loan and at an aggregate consideration of HK$205 million (the “Consideration”).

The accompanying unaudited pro forma financial information of the Enlarged Group is based on certain assumption, estimates, uncertainties and other currently available financial information, and is provided for illustrative purposes only because of its hypothetical nature, it may not give a true picture of the actual financial position and financial results of the Enlarged Group’s operations that would have been attained had the Acquisition actually occurred on the dates indicated herein. Further, the accompanying unaudited pro forma financial information of the Enlarged Group does not purport to predict the Enlarged Group’s future financial position or results of operations.

The unaudited pro forma financial information of the Enlarged Group should be read in conjunctions with the Accountants’ Report on Superb Kings as set out in Appendix II and the historical financial information on the Group as set out in Appendix I and other financial information included elsewhere in this Circular.

– 174 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

(i) Unaudited Pro Forma Consolidated Balance Sheet of the Enlarged Group

The following is the unaudited pro forma consolidated balance sheet of the Enlarged Group, assuming that the Acquisition has been completed on 30 September 2007. The unaudited pro forma consolidated balance sheet is based on the enlarged Group after completion of the acquisition of Loyal King which represented the aggregate amount of the balances of the Group as at 30 September 2007, the balances of Loyal King as at 31 August 2007, the balances of Alliance Computer Systems Limited (“Alliance Systems”) as at 31 August 2007 and the balances of Alliance Computer Services Limited (“Alliance Services”) as at 31 August 2007, as extracted from the pro forma consolidated balance sheet set out in Appendix III to this Circular, the audited balance sheet of Superb Kings as at 31 December 2007 as set out in Appendix II to this Circular. Such information is adjusted to reflect the effect of the Acquisition.

As the unaudited pro forma consolidated balance sheet of the Enlarged Group has been prepared for illustrative purpose only and because of its nature, it may not give a true picture of the financial position of the Enlarged Group as at the date to which it is made up to or at any future date.

The enlarged Group after completion of the acquisition of Loyal King Superb Kings at 31 December 2007 HK$ HK$ 2,600,000 – 5,266,614 – – 14,769,231 194,117,584 –	The enlarged Group after completion of the acquisition of Loyal King Superb Kings at 31 December 2007 HK$ HK$ 2,600,000 – 5,266,614 – – 14,769,231 194,117,584 –	Sub-total Pro forma adjustment (Note 1) HK$ HK$ 2,600,000 5,266,614 14,769,231 1,230,769 194,117,584 218,424,249	The Enlarged Group HK$ 2,600,000 5,266,614 16,000,000 412,541,833 436,408,447 123,436 1,758,884 28,103,830 (68,187,897) (38,201,747)
201,984,198 123,436 1,758,884 754,233 21,312,103 23,948,656	14,769,231 – – 27,349,597 – 27,349,597	216,753,429 123,436 1,758,884 28,103,830 21,312,103 (89,500,000) 51,298,253	436,408,447
			123,436 1,758,884 28,103,830 (68,187,897
			(38,201,747

– 175 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

The enlarged Group after completion of the acquisition of Loyal King HK$ 2,303,802 30,000 27,284 253,484 27,255 – 564,808	Superb Kings at 31 December 2007 HK$ – – – – – 42,204,065 –	Sub-total Pro forma adjustment (Note 1) HK$ HK$ 2,303,802 30,000 27,284 253,484 27,255 42,204,065 (42,204,065) 564,808	The Enlarged Group HK$ 2,303,802 30,000 27,284 253,484 27,255 – 564,808 3,206,633 (41,408,380) 395,000,067 3,684,893 73,846 20,174 3,778,913 391,221,154 31,664,000 358,998,124 559,030 391,221,154
3,206,633 20,742,023 222,726,221 3,684,893 – 20,174 3,705,067	42,204,065 (14,854,468) (85,237) – – – –	45,410,698 5,887,555 222,640,984 3,684,893 – 73,846 20,174 3,705,067	3,206,633
			(41,408,380
			395,000,067
			3,684,893 73,846 20,174
			3,778,913
219,021,154	(85,237)	218,935,917
29,564,000 188,898,124 559,030	390,000 (475,237) –	29,954,000 1,710,000 188,422,887 170,575,237 559,030	31,664,000 358,998,124 559,030
219,021,154	(85,237)	218,935,917

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

(ii) Unaudited Pro Forma Consolidated Income Statement for the Enlarged Group

The following is the unaudited pro forma consolidated income statement of the Enlarged Group, assuming that the Acquisition has been completed on 1 April 2006. The unaudited pro forma consolidated income statement is based on the enlarged Group after completion of the acquisition of Loyal King which represented the aggregate amount of the results of the Group for the year ended 31 March 2007, the results of Alliance Systems for the year ended 31 March 2007 and the results of Alliance Services for the year ended 31 March 2007, as extracted from the pro forma consolidated income statement set out in Appendix III to this Circular, the audited income statements of Superb Kings for the period from 6 July 2007 (date of incorporation) to 31 December 2007 as set out in Appendix II to this Circular. Such information is adjusted to reflect the effect of the Acquisition.

As the unaudited pro forma consolidated income statement of the Enlarged Group has been prepared for illustrative purpose only and because of its nature, it may not give a true picture of the results of the Enlarged Group after completion of the Acquisition for the year ended to which it is made up to or for any future date.

The enlarged Group after completion of the acquisition of Loyal King HK$ 11,893,326 (5,889,059)	Superb Kings for the period ended 31 December 2007 HK$ – –	The Enlarged Group HK$ 11,893,326 (5,889,059) 6,004,267 4,864,980 (15,509,820) (67,584) (4,708,157) (284,016) (4,992,173)
6,004,267 4,864,980 (15,034,583) (67,584) (4,232,920) (284,016)	– – (475,237) – (475,237) –	6,004,267 4,864,980 (15,509,820 (67,584
		(4,708,157 (284,016
(4,516,936)	(475,237)

– 177 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

(iii) Unaudited Pro Forma Consolidated Cash Flow Statement for the Enlarged Group

The following is the unaudited pro forma consolidated cash flow statement of the Enlarged Group, assuming that the Acquisition has been completed on 1 April 2006. The unaudited consolidated cash flow statement is based on the enlarged Group after completion of the acquisition of Loyal King which represented the aggregate amount of the cash flows of the Group for the year ended 31 March 2007, the cash flows of Alliance Systems for the year ended 31 March 2007 and the cash flows of Alliance Services for the year ended 31 March 2007, as extracted from the pro forma consolidated cash flow statement set out in Appendix III to this Circular, the audited cash flow statement of Superb Kings for the period from 6 July 2007 (date of incorporation) to 31 December 2007 as set out in Appendix II to this Circular. Such information is adjusted to reflect the effect of the Acquisition.

As the unaudited pro forma consolidated cash flow of the Enlarged Group has been prepared for illustrative purpose only and because of its nature, it may not give a true picture of the cash flow of the Enlarged Group after completion of the Acquisition for the year ended to which it is made up to or for any future period.

Operating activities Loss before income tax Adjustment for: Depreciation of property, plant and equipment Wavier of amount due to an ex-director Bank interest income Finance costs Impairment loss recognised in respect of goodwill Share base payment expenses Operating cash flows before movements in working capital Decrease in inventories Increase in trade receivables, prepayments, deposits and other receivables Increase in amount due to a director Increase in deposits received accruals, other payable	The enlarged Group after completion of the acquisition of Loyal King Superb Kings for the period ended 31 December 2007 HK$ HK$ (4,243,902) (475,237) 468,963 – (4,792,737) – (53,389) – 67,584 – 2,332,815 – 3,272,393 –	The enlarged Group after completion of the acquisition of Loyal King Superb Kings for the period ended 31 December 2007 HK$ HK$ (4,243,902) (475,237) 468,963 – (4,792,737) – (53,389) – 67,584 – 2,332,815 – 3,272,393 –	Sub-total Pro forma adjustment (Note 2) HK$ HK$ (4,719,139) 468,963 (4,792,737) (53,389) 67,584 2,332,815 3,272,393	The Enlarged Group HK$ (4,719,139) 468,963 (4,792,737) (53,389) 67,584 2,332,815 3,272,393 (3,423,510) 4,170 (29,456,207) 1,188,368 1,217,929
	(2,948,273) 4,170 (2,106,610) 1,188,368 1,217,929	(475,237) – (27,349,597) – –	(3,423,510) 4,170 (29,456,207) 1,188,368 1,217,929	(3,423,510 4,170 (29,456,207 1,188,368 1,217,929

– 178 –

APPENDIX VI

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The enlarged Group after completion of the acquisition of Loyal King Superb Kings for the period ended 31 December 2007 HK$ HK$ (2,644,416) (27,824,834) 53,389 – (15,762) −	The enlarged Group after completion of the acquisition of Loyal King Superb Kings for the period ended 31 December 2007 HK$ HK$ (2,644,416) (27,824,834) 53,389 – (15,762) −	Sub-total Pro forma adjustment (Note 2) HK$ HK$ (30,469,250) 53,389 (15,762)	Sub-total Pro forma adjustment (Note 2) HK$ HK$ (30,469,250) 53,389 (15,762)
(2,606,789) (51,400,960) (58,511) – (51,459,471) 5,000,000 – (67,584) (200,000) (26,603) 11,210,000 – (405,120) 1,500,000 17,010,693	(27,824,834) – – (14,769,231) (14,769,231) – 42,204,065 – – – – 390,000 – – 42,594,065	(30,431,623) (30,431,623 (51,400,960) (89,500,000) (140,900,960 (58,511) (58,511 (14,769,231) (14,769,231 (66,228,702) (155,728,702 5,000,000 5,000,000 42,204,065 42,204,065 (67,584) (67,584 (200,000) (200,000 (26,603) (26,603 11,210,000 11,210,000 390,000 390,000 (405,120) (405,120 1,500,000 1,500,000 59,604,758 59,604,758	(30,431,623
			5,000,000 42,204,065 (67,584 (200,000 (26,603 11,210,000 390,000 (405,120 1,500,000
			59,604,758

– 179 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

Net decrease in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December Analysis of the balance of cash and cash equivalents Cash at bank and in hand	The enlarged Group after completion of the acquisition of Loyal King Superb Kings for the period ended 31 December 2007 HK$ HK$ (37,055,567) – (277,413) – (37,332,980) – (37,332,980) –	Sub-total Pro forma adjustment (Note 2) The Enlarged Group HK$ HK$ HK$ (37,055,567) (126,555,567) (277,413) (277,413) (37,332,980) (126,832,980) (37,332,980) (126,832,980)

– 180 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX VI

Notes on the pro forma adjustment to the unaudited pro forma financial information on the Enlarged Group

For the purpose of this pro forma financial information, the values of assets and liabilities of Superb Kings as at 31 December 2007 and the Consideration were taken to be the fair values for consolidation purpose.

The adjustment reflects the following:

(i) Upon the completion of the Acquisition, Superb Kings was accounted as a subsidiary of the Company, the property under development was transferred to the Group. Upon Acquisition, the Group will adjust the property under development to its fair value by reference to a valuation performed by an independent valuer, Grant Sherman Appraisal Limited. The fair value adjustment amounted to HK$1,230,769 according to the valuation report as at 31 December 2007 and the revaluation of property under development amounted to HK$16,000,000. Up to 31 January 2008, the revaluation of property under development as at 31 January 2008 amounted to HK$23,500,000 as set out in Appendix V and the revaluation surplus amounted to HK$1,740,538. Shareholders should note that the revaluation of property under development and the fair value adjustment may be subject to change upon completion of the Acquisition.
(ii) Goodwill of HK$218,424,249 arising from the Acquisition of Superb Kings, which is derived from the calculation as follow:

Fair value of net assets of Superb Kings Loan from a shareholder Deferred tax liabilities Goodwill Total consideration Satisfied by: Fair value of shares issued by the Company (Note) Cash consideration	HK$ 1,145,532 42,204,065 (73,846) 218,424,249 261,700,000 172,200,000 89,500,000 261,700,000

  - _Note:_ Pursuant to the agreement, the 105,000,000 ordinary shares of the Company with par value of HK$0.02 each will be issued on the actual date of Completion. The fair value of the shares to be issued is HK$172,200,000 with reference to the market price of HK$1.64 per share of the Company’s share as at 28 September 2007, being the nearest trading date of 30 September 2007. The actual value of the Consideration shares would be different on the Completion Date.

(iii) The pro forma adjustment of cash and cash equivalents of HK$89,500,000 represented the cash settlement of the consideration for the Acquisition.
(iv) The adjustment on the amount due to a shareholder of HK$42,204,065 represents the shareholder’s loan acquired and eliminated as inter-group balance on consolidation.
(v) Deferred tax liabilities of HK$73,846 represent the resulting deferred tax liabilities of increase in fair value of property under development of HK$1,230,769 at the tax rate of 6% enacted in the Philippine.
(vi) The adjustment on share capital of HK$1,710,000 represents the increase in share capital of HK$2,100,000 upon the issue of 105,000,000 Consideration Shares at par value as part of the consideration and elimination of share capital of Superb Kings of HK$390,000 on consolidation.
(vii) The pro-forma adjustment of reserves of HK$170,575,237 represents (a) share premium of HK$113,400,000 for 105,000,000 ordinary shares issued by the Company; (b) special reserve of HK$56,700,000 arising from the difference between the fair value and the contracted value of consideration paid for the Acquisition; and (c) the elimination of the pre-acquisition reserves of Superb Kings of HK$475,237.
The pro forma adjustment in the unaudited pro forma consolidated cash flow statement of HK$89,500,000 represents the cash consideration paid upon the completion.
After making the above pro forma adjustments, the pro forma consolidated balance sheet showed a shortfall of cash and cash equivalents of HK$68,187,897. The Group received net proceeds of approximately HK$123.20 million through placing a total of 80,000,000 new shares at the placing price of HK$1.58 per placing share on 5 November 2007, details of the placing were disclosed in the Company’s announcement dated 16 October 2007. The shortfall will be settled by the internal resources of the Group and aforesaid placing of new shares to ensure that the Group has sufficient working capital to precede the Acquisition.

– 181 –

EXPLANATORY STATEMENT

APPENDIX VII

This Appendix serves as an explanatory statement required to be sent to all Shareholders pursuant to Rule 13.08 of the GEM Listing Rules, to provide the requisite information to you for your consideration of the grant of the Repurchase Mandate.

1. EXERCISE OF THE REPURCHASE MANDATE

As at the Latest Practicable Date, the issued share capital of the Company comprised of 1,565,450,000 Shares.

Subject to the passing of ordinary resolution no. 1 set out in the notice of the EGM (the “Notice”) and on the basis that no further Shares are issued or repurchased by the Company after the Latest Practicable Date and up to the date of passing such resolution, the Company would be allowed to repurchase a maximum of 156,545,000 Shares (representing 10% of the Shares in issue as at the date of the passing of the resolution) (the “Repurchase Mandate”) during the period from the date of the passing of ordinary resolution no. 2 set out in the Notice up to (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within which the next annual general meeting of the Company is required by the existing articles of associations of the Company or any applicable laws of the Cayman Islands to be held; or (iii) the revocation, variation or renewal of the Repurchase Mandate by ordinary resolution of the Shareholders in general meeting, whichever occurs first.

2. REASONS FOR REPURCHASES

The Directors believe that the Repurchase Mandate is in the best interests of the Company and the Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value and/or earnings per Share of the Company. It will only be made when the Directors believe that such a repurchase will benefit the Company and its Shareholders.

3. FUNDING OF REPURCHASES

In repurchasing the Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum of association of the Company, the Articles, the GEM Listing Rules and the applicable laws of the Cayman Islands. The Company may not repurchase securities on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

4. GENERAL

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements contained in the Company’s 2006 annual report) in the event that the Repurchase Mandate is exercised in full. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or its gearing levels which in the opinion of the Directors are from time to time appropriate for the Company. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Directors at the relevant time having regard to the circumstances then pertaining.

– 182 –

EXPLANATORY STATEMENT

APPENDIX VII

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules, the memorandum of association of the Company, the Articles and the applicable laws of the Cayman Islands.

6. THE TAKEOVERS CODE

If as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of Rule 32 of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert (within the meaning of the Takeovers Code), depending on the level of increase in the Shareholder’s interest, could obtain or consolidate control of the Company and become(s) obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, the following substantial Shareholders had or were taken to have interests in Shares under the SFO:

			Approximate
			percentage of
		Approximate	shareholding if
		percentage of	the Repurchase
	Number of	existing	Mandate is
Name	Shares held	shareholding	exercised in full
New Brilliant (Note 1)	292,900,000	18.71%	20.79%
Premier United Limited
(Note 2)	190,000,000	12.14%	13.49%
First Cheer Holdings
Limited (Note 3)	280,000,000	17.89%	19.87%

Notes:

New Brilliant is beneficially owned as to 80% by 20/20 International Ltd. and as to 20% by Ms. Zhang Ze Mei. In addition, 20/20 International Ltd. is beneficially owned as to 70.4% by Mr. Chui Bing Sun. Accordingly, both 20/20 International Ltd. and Mr. Chui Bing Sun are deemed under the SFO to be interested in the 304,960,000 Shares beneficially owned by New Brilliant.
Premier United Limited is beneficially owned as to 50% by Mr. Chan Ping Che and as to 50% by Ms. Lam Shiu May. Accordingly, both Mr. Chan Ping Che and as Ms. Lam Shiu May are deemed under the SFO to be interested in the 190,000,000 Shares beneficially owned by Premier United Limited.
First Cheer Holdings Limited is a company beneficially owned as to 45% by Mr. Cheng Ting Kong, as to 45% by Mr. Chau Cheok Wa and as to 10% by Mr. Lai Ting Kwong.

In the event the Directors should exercise in full the Repurchase Mandate, the interests of the above substantial Shareholders would be increased to such percentage as shown in the last column above. The Directors are not aware of any consequences which will arise under the Takeovers Code as a result of any repurchases to be made under the Repurchase Mandate.

– 183 –

EXPLANATORY STATEMENT

APPENDIX VII

7. SHARES REPURCHASE MADE BY THE COMPANY

No repurchases of Shares have been made by the Company, whether on GEM or otherwise, in the six months preceding the Latest Practicable Date.

8. DIRECTOR AND CONNECTED PERSON

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their associates have any present intention to sell any Shares to the Company under the Repurchase Mandate if such is approved by the Shareholders.

No connected person has notified the Company that he has a present intention to sell any Shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by the Shareholders.

9. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on GEM during each of the previous twelve months prior to the Latest Practicable Date were as follows:

	Highest per	Lowest per
	Share	Share
	HK$	HK$
2007
March	0.425	0.245
April	0.450	0.330
May	0.650	0.335
June	0.630	0.420
July	0.600	0.420
August	0.660	0.250
September	1.930	0.680
October	2.000	1.200
November	1.650	1.320
December	1.600	1.260
2008
January	1.400	0.600
February	0.990	0.800
March	0.950	0.750
April (up to the Latest Practicable Date)	0.800	0.700

– 184 –

GENERAL INFORMATION

APPENDIX VIII

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this circular is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

2. SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date and following completion of the Acquisition were and will be as follows:

Authorised: 6,000,000,000 Shares Issued and fully paid or credited as fully paid: 1,565,450,000 Shares in issue as at the Latest Practicable Date 105,000,000 Consideration Share to be issued upon completion of the Acquisition 1,670,450,000 Shares	HK$ 120,000,000 31,309,000 2,100,000
	33,409,000

All the Shares in issue and to be issued (when fully paid) rank and will rank pari passu in all respects with each other including rights to dividends, voting and return of capital.

As at the Latest Practicable Date, no share or loan capital of the Company has been issued or is proposed to be issued for cash or otherwise and no commissions, discounts, brokerages or other special terms have been granted in connection with the issue or sale of any such capital, except for the Consideration Shares.

The Shares are listed on the Stock Exchange. No part of the share or loan capital of the Company is listed or dealt in, nor is listing or permission to deal in the share or loan capital of the Company being, or proposed to be, sought on any other stock exchange.

– 185 –

GENERAL INFORMATION

APPENDIX VIII

3. DIRECTORS AND SENIOR MANAGEMENT

Executive Directors

Mr. Chui Bing Sun

Mr. Chui Bing Sun, aged 31, has over seven years of experience in hedge fund and portfolio management, finance and accounting. He has been a fund manager of two global hedge funds for the last five years. Prior to this, Mr. Chui has worked for two international accounting firms. Mr. Chui is a certified public accountant and a Chartered Financial Analyst charterholder.

Mr. Chau Cheok Wa

Mr. Chau Cheok Wa, aged 33, was born in the Macao Special Administrative Region (“Macao”) and is a Portuguese national. He received his education in Macao and has since then engaged in the business of operating and managing V.I.P. clubs, in which he has over ten years of experience, at the entertainment V.I.P. clubs at hotels in Macao. Under Mr. Chau’s leadership, the number of entertainment V.I.P. clubs managed by Mr. Chau has soared from one to six in the last three years, five of which are at the five-star hotels in Macao including StarWorld Hotel Macau, Venetian Macao Resort Hotel, Grand Lisboa Macau and Wynn Macau (two V.I.P. clubs); and one of which is at the entertainment V.I.P. club of the world-renowned Walker Hill in Seoul, the capital of the South Korea.

Mr. Lee Chi Shing, Caesar

Mr. Lee Chi Shing, Caesar, aged 44, is experienced in corporate management and internal control. He was an executive director of Tanrich Financial Holdings Limited, a company listed on the main board of the Stock Exchange, from 1 November 2004 to 29 June 2005. In 2000, he joined Ernst and Young, an international accounting firm, as a senior manager. He has worked in the Inland Revenue Department for over 15 years after his graduation. He is a fellow member of both the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. In addition, he is a member of the Society of Registered Financial Planners. Mr. Lee graduated from the Department of Accountancy of Hong Kong Polytechnic University in 1985. He later obtained a Master degree in International Accountancy in 2001.

Independent non-executive Directors

Mr. Siu Hi Lam, Alick

Mr. Siu Hi Lam, Alick, aged 53, is the managing director of Fortune Take International Limited, which has been engaging in consultancy services, since February 2004. Mr. Siu has worked in the finance and banking field for more than 25 years. He had been the senior vice president of AIG Finance (Hong Kong) Limited and the vice president of Bank of America. He was responsible for business development and credit risk management. Mr. Siu obtained a Master degree in Business Administration from the University of Hull in 1995.

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GENERAL INFORMATION

APPENDIX VIII

Mr. Kwok Kwan Hung

Mr. Kwok Kwan Hung, aged 42, has extensive experience in investment banking, financial management and auditing. He has held various senior positions in two investment banking groups and an international accounting firm. Currently, he is a director and responsible officer of a licensed corporate finance firm in Hong Kong which provides corporate finance and other advisory services. He is also an independent non-executive director of Nam Hing Holdings Limited, a company listed on the main board of the Stock Exchange. Mr. Kwok is a qualified accountant. He is a fellow member of the Hong Kong Institute of Certified Public Accountants, the Association of Chartered Certified Accountants and the Hong Kong Institute of Directors. He holds a Bachelor degree in Science from the University of London.

Mr. Chien Hoe Yong

Mr. Chien Hoe Yong, aged 44, is currently an executive director of Mingyuan Medicare Development Company Limited, a company listed on the main board of the Stock Exchange. Mr. Chien has extensive experience in international investment banking, corporate advisory and financial accounting with international reputable companies and banks. He has held senior managerial positions in several major investment banking firms in Hong Kong.

Senior management

Ms. Chan Wai Hung , aged 39, joined the Group in September 2005 as the qualified accountant. Ms. Chan holds a Bachelor degree in Accounting from the University of Hong Kong and is a member of the Hong Kong Institute of Certified Public Accountants. She has 10 years’ experience in the accounting and auditing field.

The business address of the directors and the senior management of the Company is 21st Floor, The Pemberton, 22-26 Bonham Strand, Sheung Wan, Hong Kong.

4. AUDIT COMMITTEE

The Company has established an audit committee with written terms of reference in compliance with the GEM Listing Rules. The duties of the audit committee are to review the Company’s annual and quarterly financial reports and to provide advice and comments thereon to the Board. The audit committee comprises three independent non-executive Directors, namely, Mr. Siu Hi Lam, Alick, Mr. Kwok Kwan Hung and Mr. Chien Hoe Yong. Mr. Chien Hoe Yong was appointed as the chairman of the audit committee. The biographies of members of the audit committee are set out in the paragraph headed “DIRECTORS AND SENIOR MANAGEMENT” above.

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GENERAL INFORMATION

APPENDIX VIII

5. DISCLOSURE OF INTERESTS

(a) Interests of the directors and chief executive of the Company

(1) Long positions in the shares of the Company

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the Shares, underlying Shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were otherwise required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to the securities transactions by the Directors, were as follows:

Long position in the Shares:

					Percentage
Name of	Nature of	Number of			of issued
Director	interest	Shares held	Capacity		shares
Mr. Chui Bing	Corporate	292,900,000	Interest of a		18.71%
Sun	(Note 1)			controlled
				corporation
Mr. Lee Chi	Personal	1,000,000	–		0.06%
Shing, Caesar
Chau Cheok Wa	Corporate	280,000,000	Interest of a		17.89%
	(Note 2)			controlled
				corporation

Notes:

These Shares were owned by New Brilliant, the issued share capital of which is beneficially owned as to 80% by 20/20 International Ltd. and as to 20% by Ms. Zhang Ze Mei. Mr. Chui Bing Sun beneficially owns 70.4% of the issued shares of 20/20 International Ltd.
These Shares were owned by First Cheer Holdings Limited, the issued share capital of which is beneficially owned as to 45% by Mr. Cheng Ting Kong, as to 45% by Mr. Chau Cheok Wa and as to 10% by Mr. Lai Ting Kwong.

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APPENDIX VIII

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interests or short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were otherwise required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to the securities transactions by the Directors.

(2) Long positions in the underlying shares of the Company

Pursuant to the new share option scheme adopted by the Company on 5 December 2006 (the “New Scheme”), several Directors in the capacity as beneficial owners were granted share options to subscribe for Shares, details of which as at the Latest Practicable Date were as follows:

								Number of
								options
								outstanding
					Exercise			as at the
					price			Latest
	Date of	Vesting	period		per	Exercise period		Practicable
Name of Director	grant	from		until	share	from	until	Date
					HK$
Mr. Chien Hoe	26/03/2007	26/03/2007		25/03/2008	0.33	26/03/2008	25/03/2017	750,000
Yong	01/11/2007		–	–	1.47	01/11/2007	31/10/2017	250,000
Mr. Kwok Kwan	26/03/2007	26/03/2007		25/03/2008	0.33	26/03/2008	25/03/2017	750,000
Hung	01/11/2007		–	–	1.47	01/11/2007	31/10/2017	250,000
Mr. Siu Hi Lam,	26/03/2007	26/03/2007		25/03/2008	0.33	26/03/2008	25/03/2017	750,000
Alick	01/11/2007		–	–	1.47	01/11/2007	31/10/2017	250,000

Save as disclosed above, none of the Directors or their respective associates was granted share options to subscribe for Shares, nor had exercised such rights as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX VIII

(b) Interests of substantial Shareholders

As at the Latest Practicable Date, so far as was known to the Directors and chief executive of the Company, the following entity or person (not being a Director or chief executive of the Company) had, or was taken or deemed to have, an interest or short position in the Shares or underlying Shares 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 is expected, directly or indirectly, to be 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:

Long position in the Shares:

			(Approximate)	(Approximate)
				Percentage
	Nature of	Number of		of issued
Name of Shareholders	interests	Shares held	Capacity	Shares
New Brilliant	Corporate	292,900,000	Beneficial owner	18.71%
Investments Limited
(Note 1)
20/20 International	Corporate	292,900,000	Interest of a	18.71%
Limited (Note 1)			controlled
			corporation
Premier United Limited	Corporate	190,000,000	Beneficial owner	12.14%
(Note 2)
Chan Ping Che (Note 2)	Corporate	190,000,000	Interest of a	12.14%
			controlled
			corporation
Lam Shiu May (Note 2)	Corporate	190,000,000	Interest of a	12.14%
			controlled
			corporation
First Cheer Holdings	Corporate	280,000,000	Beneficial owner	17.89%
Limited (Note 3)
Cheng Ting Kong	Corporate	280,000,000	Interest of a	17.89%
(Note 3)			controlled
			corporation

– 190 –

GENERAL INFORMATION

APPENDIX VIII

				(Approximate)
				Percentage
	Nature of	Number of		of issued
Name of Shareholders	interests	Shares held	Capacity	Shares
Lai Ting Kwong (Note 3)	Corporate	280,000,000	Interest of a	17.89%
			controlled
			corporation

Notes:

New Brilliant Investments Limited is beneficially owned as to 80% by 20/20 International Limited and as to 20% by Ms. Zhang Ze Mei. In addition, 20/20 International Limited is beneficially owned as to 70.4% by Mr. Chui Bing Sun. Accordingly, both 20/20 International Limited and Mr. Chui Bing Sun are deemed under the SFO to be interested in the 304,960,000 Shares beneficially owned by New Brilliant Investments Limited as at 30 September 2007.
Premier United Limited is beneficially owned as to 50% by Mr. Chan Ping Che and as to 50% by Ms. Lam Shiu May. Accordingly, both Mr. Chan Ping Che and Ms. Lam Shiu May are deemed under the SFO to be interested in the 190,000,000 Shares beneficially owned by Premier United Limited.
First Cheer Holdings Limited is a company beneficially owned as to 45% by Mr. Cheng Ting Kong, as to 45% by Mr. Chau Cheok Wa and as to 10% by Mr. Lai Ting Kwong.

Save as disclosed above, the Directors and chief executive of the Company were not aware of any entities or persons who had an interest or short position in the Shares or underlying Shares 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 expected, directly or indirectly, to be 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 as at the Latest Practicable Date.

As at the Latest Practicable Date, save as disclosed above, the Company was not notified of any other relevant interests or short positions in the Shares or underlying Shares in the Company as recorded in the register required to be kept by the Company under section 336 of Part XV of the SFO.

6. COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or the management shareholders of the Company and their respective associates has an interest in a business, apart from the business of the Group, which competes or may compete, either directly or indirectly, with the business of the Group or has any other conflict of interest with the Group.

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GENERAL INFORMATION

APPENDIX VIII

7. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business of the Enlarged Group, were entered into by the Enlarged Group within the two years immediately preceding the Latest Practicable Date and are, or may be material:

(a) the placing agreement dated 30 August 2006 entered into among the Company, New Brilliant and a placing agent, pursuant to which the placing agent has agreed, on a best effort basis, to procure purchasers to purchase, and New Brilliant has agreed to sell, up to 160,000,000 existing Shares, at the placing price of HK$0.07 per Share;
(b) the subscription agreement dated 30 August 2006 entered into between the Company and New Brilliant, pursuant to which New Brilliant has conditionally agreed to subscribe for up to 160,000,000 new Shares at a price of HK$0.07 per Share;
(c) the sale and purchase agreement dated 6 November 2006 entered into by the Group in relation to the acquisition of Cheung Shing Funeral Limited (“Cheung Shing”) beneficially owned by Mr. Woo Shik Man, Ms. Cheung Kam Man, and Ms. Kong Sau Ping at a consideration of HK$5.1 million;
(d) the sale and purchase agreement dated 6 November 2006 entered into by the Group in relation to the acquisition of Grand Sea Limited beneficially owned by Mr. Woo Shik Man, Ms. Cheung Kam Man and Ms. Kong Sau Ping at a consideration of HK$6.4 million;
(e) the placing agreement dated 20 August 2007 entered into among the Company, New Brilliant and a placing agent, pursuant to which the placing agent has agreed, on a best effort basis, to procure purchasers to purchase, and New Brilliant has agreed to sell, up to 194,700,000 existing Shares, at the placing price of HK$0.275 per Share;
(f) the subscription agreement dated 20 August 2007 entered into between the Company and New Brilliant, pursuant to which New Brilliant has conditional agreed to subscribe for up to 194,700,000 new Shares at a price of HK$0.275 per Share;
(g) the placing agreement dated 15 October 2007 entered into between the Company and the placing agent, pursuant to which the placing agent has agreed, on a best effort basis, to place up to 80,000,000 Shares at the placing price of HK$1.58 per Share;
(h) the agreement dated 18 September 2007 entered into among the Group, First Cheer Holdings Limited and Mr. Cheng Ting Kong in relation to the acquisition of Loyal King Investments Limited at a total consideration of HK$194 million;
(i) the Agreements;

– 192 –

GENERAL INFORMATION

APPENDIX VIII

(j) the tenancy agreement dated 4 October 2007 entered into between Superb Kings as tenant and First Cagayan Leisure and Resort Corporation as landlord pursuant to which First Cagayan Leisure and Resort Corporation has leased to Superb Kings the piece of land in Cagayan Valley of the Philippines for development of the Prestigious and Leisure Resort;
(k) the construction agreements dated 25 September 2007 entered into between Superb Kings and CAMJ Construction, Inc for development of the facilities of the Prestigious and Leisure Resort;
(l) the agreement dated 2 February 2008 entered into between Superb Kings and Success Asia Pacific Company Limited pursuant to which 245 rooms of the Prestigious and Leisure Resort shall be reserved exclusively for Success Asia Pacific Company Limited for two years beginning from April 2008; and
(m) the agreement dated 31 March 2008 entered into between the Purchaser and the Vendor for the extension of the Long Stop Date of the Acquisition.

8. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Group.

9. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

10. DIRECTORS’ INTERESTS IN CONTRACTS AND ASSETS

No contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date in which any Director was materially interested and which was significant in relation to the business of the Group.

As at the Latest Practicable Date, none of the Directors had, or has had, any direct or indirect interest in any assets which have been acquired, disposed of by or leased to, or which are proposed to be acquired, disposed of by or leased to, any member of the Group since 31 March 2007, the date to which the latest published audited consolidated financial statements of the Group were made.

– 193 –

GENERAL INFORMATION

APPENDIX VIII

11. EXPERTS AND CONSENTS

(a) The following are the qualifications of the experts who have given an opinion or advice, which is contained or referred to in this circular:

Name

Qualifications

HLB Hodgson Impey Cheng Chartered Accountants Certified Public Accountants Grant Sherman Independent valuer Vinco A corporation licensed to conduct types 1 and 6 (dealing in securities and advising on corporate finance) regulated activities under SFO Nuada A corporation licensed to conduct type 6 (advising on corporate finance) regulated activity under SFO

Perlas De Guzman Garcia and Asuncion Legal advisors of the Company in Law Offices Philippines

(b) As at the Latest Practicable Date, each of the experts above did not have any direct or indirect shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.
(c) Each of the experts above has given and has not withdrawn its written consents to the issue of this circular with the inclusion of its letters and reports and references to its name in the form and context in which it is included.
(d) Each of the experts above does not have any interest, direct or indirect, in any assets which have 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 since 31 March 2007, the date to which the latest published audited financial statements of the Company were made.

12. GENERAL

(a) The secretary and compliance officer of the Company is Mr. Lee Chi Shing, Caesar whose qualification is detailed under the section headed “Directors and senior management” in this appendix.
(b) The qualified accountant of the Company is Ms. Chan Wai Hung whose qualification is detailed under the section headed “Directors and senior management” in this appendix.
(c) The registered office of the Company is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands and the principal place of business and the head office of the Company in Hong Kong is at 21st Floor, The Pemberton, 22-26 Bonham Strand, Sheung Wan, Hong Kong.

– 194 –

GENERAL INFORMATION

APPENDIX VIII

(d) The share registrar and transfer office of the Company in the Cayman Islands is Butterfield Fund Services (Cayman) Limited, P.O. Box 705 GT, Butterfield House, 68 Fort Street, George Town, Grand Cayman, Cayman Islands. The branch share registrar and transfer office of the Company in Hong Kong is Tricor Tengis Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(e) The English text of this circular and the accompany form of proxy shall prevail over their respective Chinese text in case of inconsistency.

13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal office of the Company at 21st Floor, The Pemberton, 22-26 Bonham Strand, Sheung Wan, Hong Kong during normal office hours on any weekday, except Saturdays, Sundays and public holidays, from the date of this circular up to and including the date of the EGM:

(a) the memorandum and articles of association of the Company;
(b) the annual reports of the Company for each of the two years ended 31 March 2006 and 31 March 2007;
(c) the half-yearly financial results of the Company for the six months ended 30 September 2007;
(d) the financial information of the Superb Kings as set out in Appendix II to this circular;
(e) the letter on the unaudited pro forma financial information of the Enlarged Group, the text of which is set out in Appendix VI to this circular;
(f) the material contracts referred to in the section headed “Material contracts” in this appendix;
(g) the written consents referred to in the section headed “Experts and consents” in this appendix;
(h) this circular;
(i) the circular of the Company dated 23 November 2007 in relation to the acquisition of Loyal King Investments Limited at a total consideration of HK$194 million (which is contemplated under the agreement dated 18 September 2007);
(j) the valuation report of Superb Kings as set out in Appendix IV to this circular;
(k) the property valuation report of the Enlarged Group as set out in Appendix V to this circular; and
(l) the legal opinion issued by Perlas De Guzman Garcia and Asuncion Law Offices, the legal advisers of the Company in Philippines.

– 195 –

NOTICE OF THE EGM

==> picture [71 x 64] intentionally omitted <==

==> picture [229 x 45] intentionally omitted <==

(Proposed to be renamed as Sun International Group Limited )

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8029)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of the shareholders of Galileo Holdings Limited (the “ Company ”) will be held at 19th Floor, The Pemberton, 22-26 Bonham Strand, Sheung Wan, Hong Kong on Monday, 5 May 2008 at 4:00 p.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as special resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT

(a) the formal acquisition agreement dated 26 November 2007 (the “ Formal Acquisition Agreement ”) and the supplemental agreement (the “ Supplemental Agreement ”) dated 10 December 2007, both were entered into between (i) Mr. Yeung Yak Kan (the “ Vendor ”) as vendor and (ii) Galileo Capital Group (BVI) Limited (the “ Purchaser ”) as purchaser in relation to the acquisition of the entire issued share capital of Superb Kings Limited, a copy of the Formal Acquisition Agreement and a copy of the Supplemental Agreement have been produced to this meeting marked “A” and “B” respectively (both were signed by the Chairman of the meeting for the purpose of identification), and the transactions contemplated by the Formal Acquisition Agreement and the Supplemental Agreement be and are hereby approved, confirmed and ratified; and
(b) the directors of the Company be and are hereby authorised to do all other acts and things and execute all documents which they consider necessary or expedient for the implementation of and giving effect to the Formal Acquisition Agreement, the Supplemental Agreement and the transactions contemplated thereunder.”
“ THAT , to the extent not already exercised, the mandate to allot and issue shares of the Company given to the directors (the “ Directors ”) of the Company at the annual general meeting (the “ AGM ”) of the Company held on 28 September 2007 be and is hereby replaceed by the mandate THAT :
(a) subject to paragraph (c) below, pursuant to the Rules (the “ GEM Listing Rules ”) Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”), the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the

– 196 –

NOTICE OF THE EGM

Company to allot, issue and deal with unissued shares of HK$0.02 each (the “ Shares ”) in the capital of the Company and to make or grant offers, agreements and options, including warrants to subscribe for Shares, which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

(b) the approval in paragraph (a) above shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;
(c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise), issued or dealt with by the Directors pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) the exercise of any options granted under the share option scheme of the Company; or (iii) any scrip dividend or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association (the “ Articles ”) of the Company in force from time to time; or (iv) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares, shall not exceed the aggregate of:
(i) 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution; and
(ii) (if the Directors are so authorised by a separate ordinary resolution of the shareholders of the Company) the nominal amount of any share capital of the Company repurchased by the Company subsequent to the passing of this resolution (up to a maximum equivalent to 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of such resolution),

and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

(d) for the purpose of this resolution:
“ Relevant Period ” means the period from the date of the passing of this resolution until whichever is the earliest of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the Company is required by the Articles of Association, the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated or revised) of the Cayman Islands or any other applicable law of the Cayman Islands to be held; or

– 197 –

NOTICE OF THE EGM

(iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this resolution;
“ Rights Issue ” means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Directors to holders of Shares on the register on a fixed record date in proportion to their then holdings of Shares (subject to such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements, or having regard to any restrictions or obligations under the laws of, or the requirements of, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction outside Hong Kong or any recognised regulatory body or any stock exchange outside Hong Kong).”
“ THAT conditional upon the passing of resolution no. 1 above, the mandate granted to the Directors at the AGM to extend the general mandate to allot and issue Shares to Shares repurchased by the Company be and is hereby replaced by the mandate THAT the Directors be and they are hereby authorised to exercise the authority referred to in paragraph (a) of resolution no. 1 above in respect of the share capital of the Company referred to in sub-paragraph (ii) of paragraph (c) of such resolution.”

SPECIAL RESOLUTION

“ THAT the name of the Company be and is hereby changed from “Galileo Holdings Limited ” to “Sun International Group Limited ” and the directors of the Company be and are hereby authorized

generally to do such acts and things and execute all documents or make such arrangements as they may deem necessary, desirable or expedient to effect the change of name of the Company.”

By order of the Board Galileo Holdings Limited Chui Bing Sun Chairman

Hong Kong, 10 April 2008

– 198 –

NOTICE OF THE EGM

Registered office: Head office and principal place of Cricket Square business in Hong Kong: Hutchins Drive 21st Floor P.O. Box 2681 The Pemberton Grand Cayman KY1-1111 22-26 Bonham Strand Cayman Islands Sheung Wan Hong Kong

Notes:

A member entitled to attend and vote at the EGM is entitled to appoint one or more proxy to attend and, subject to the provisions of the Articles, to vote on his behalf. A proxy need not be a member of the Company but must be present in person at the EGM to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.
A form of proxy for use at the EGM is enclosed. In order to be valid, the form of proxy must be duly completed and signed in accordance with the instructions printed thereon and deposited together with a power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, at the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of a form of proxy will not preclude a member from attending in person and voting at the EGM or any adjournment thereof, should he so wish.
In the case of joint holders of shares, any one of such holders may vote at the EGM, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holder are present at the EGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such shares shall alone be entitled to vote in respect thereof.
The memorandum and articles of association of the Company are written in English. There is no official Chinese translation in respect thereof. Should there be any discrepancy, the English version shall prevail.
Pursuant to the GEM Listing Rules, the voting on resolutions nos. 1 and 2 at the EGM will be conducted by way of poll.

– 199 –

AI assistant

Imperium Financial Group Limited — Proxy Solicitation & Information Statement 2008

51224_rns_2008-04-09_2cde47d1-a2ea-4599-9600-67456d60dabd.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

(I) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE PROPOSED ACQUISITION OF THE ENTIRE EQUITY INTEREST AND SHAREHOLDER’S LOAN OF SUPERB KINGS LIMITED; (II) PROPOSED REFRESHMENT OF CURRENT GENERAL MANDATES; (III) PROPOSED CHANGE OF COMPANY NAME; AND

(IV) NOTICE OF EGM

Grand Vinco Capital Limited

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

(Stock Code: 8029)

INTRODUCTION

LETTER FROM THE BOARD

(I) THE FORMAL ACQUISITION AGREEMENT AND SUPPLEMENTAL AGREEMENT

Date

Parties

Assets to be acquired

Consideration and basis of the Consideration

LETTER FROM THE BOARD

Conditions precedent

LETTER FROM THE BOARD

Completion

Undertaking given by the Vendor

LETTER FROM THE BOARD

INFORMATION ON SUPERB KINGS

LETTER FROM THE BOARD

REASONS FOR THE ACQUISITION AND FUTURE PROSPECT

LETTER FROM THE BOARD

FINANCIAL EFFECTS ON THE GROUP

FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

LETTER FROM THE BOARD

IMPLICATIONS UNDER THE GEM LISTING RULES FOR THE ACQUISITION

(II) PROPOSED REFRESHMENT OF CURRENT GENERAL MANDATES

LETTER FROM THE BOARD

EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE

LETTER FROM THE BOARD

IMPLICATIONS UNDER THE GEM LISTING RULES FOR THE REFRESHMENT OF CURRENT GENERAL MANDATE

(III) PROPOSED CHANGE OF COMPANY NAME

LETTER FROM THE BOARD

(IV) NOTICE OF EGM

PROCEDURES FOR DEMANDING A POLL

RECOMMENDATION

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

LETTER FROM INDEPENDENT BOARD COMMITTEE

(Stock Code: 8029)

REFRESHMENT OF THE CURRENT GENERAL MANDATES

Yours faithfully,

Independent Board Committee

Mr. Siu Hi Lam, Alick

LETTER FROM VINCO

PROPOSED REFRESHMENT OF THE CURRENT GENERAL MANDATES

INTRODUCTION

BASIS OF OUR OPINION AND RECOMMENDATION

PRINCIPAL FACTORS AND REASONS CONSIDERED

Background of and reasons for the proposed New Issue Mandate

Fund raising activities in the past 12 months

LETTER FROM VINCO

Financial flexibility

LETTER FROM VINCO

Other financing alternatives

Potential dilution to shareholding of the Independent Shareholders

LETTER FROM VINCO

CONCLUSION

1. FINANCIAL SUMMARY

CONSOLIDATED INCOME STATEMENTS

CONSOLIDATED BALANCE SHEETS

2. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE YEAR ENDED 31 MARCH 2007

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET

BALANCE SHEET

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL

Imperium Financial Group Limited Proxy Solicitation & Information Statement 2008