THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares of Brilliant Circle Holdings International Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the transferee.

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

BRILLIANT CIRCLE HOLDINGS INTERNATIONAL LIMITED 貴聯控股國際有限公司

(formerly known as CT Holdings (International) Limited 詩天控股（國際）有限公司 ) (incorporated in the Cayman Islands with limited liability)

(Stock Code: 1008)

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY AND NOTICE OF EXTRAORDINARY GENERAL MEETING

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

==> picture [107 x 42] intentionally omitted <==

Capitalised terms used on this cover page shall have the same meanings as those in the section headed “Definitions” in this circular.

A letter from the Independent Board Committee is set out on page 17 of this circular. A letter from Ample Capital, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 18 to 32 of this circular.

A notice convening the extraordinary general meeting to be held at Sportful Garden Restaurant, Shop No. 312, 3rd Floor, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, New Territories, Hong Kong on Wednesday, 13 July 2011 at 11:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular. A form of proxy for use at the EGM is also enclosed with this circular. Such form of proxy is also published on the website of the Stock Exchange at www.hkex.com.hk.

Whether or not you are able to attend the meeting in person, you are requested to complete the accompanying form of proxy in accordance with the instruction printed thereon and deposit the same at the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at 26/F., 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 meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

24 June 2011

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . .	17
Letter from Ample Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Appendix I – Financial information of the Group . . . . . . . . . . . . . . .	I-1
Appendix II – Financial information of the Target Group and
BB Jinhuangshan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III – Financial information of the Enlarged Group . . . . . . . .	III-1
Appendix IV – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

DEFINITIONS

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

“Acquisition”
the acquisition of the entire issued share capital of the Target as contemplated under the Acquisition Agreement
“Acquisition Agreement”
the conditional sale and purchase agreement dated 24 May 2011 entered into between the Purchaser and the Vendor in relation to the Acquisition
“Acquisition Completion”
completion of the Acquisition
“Ample Capital”
Ample Capital Limited, a licensed corporation under the SFO to carry out type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition
“Announcement”
the announcement of the Company dated 30 May 2011 in respect of, among other things, the Acquisition
“associates”
has the meaning as ascribed thereto in the Listing Rules
“BB Jinhuangshan”
蚌埠金黃山凹版印刷有限公司 (Bengbu Jinhuangshan Rotogravure Printing Co., Ltd.*), an indirect non-wholly owned subsidiary of the Company
“BCG”
Brilliant Circle Group Holdings Limited (formerly known as Brilliant Circle Holdings International Limited), a company incorporated in the BVI, which has become a wholly-owned subsidiary of the Company after completion of the BCG Acquisition
“BCG Acquisition”
the acquisition of the entire equity interest in BCG by the Group, details of which were disclosed in the announcements of the Company dated 1 February 2011 and 14 April 2011, and the BCG Circular
“BCG Circular”
the circular of the Company dated 28 March 2011 in relation to, among other things, the BCG Acquisition
“BCG Group”
BCG and its subsidiaries

– 1 –

DEFINITIONS

“Board”

the board of Directors

“Business Day”

a day (other than a Saturday) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours

“BVI” the British Virgin Islands
“Company”
Brilliant Circle Holdings International Limited (formerly known as CT Holdings (International) Limited), a company incorporated in the Cayman Islands with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“CT Group” the Group (excluding BCG Group)
“CT Shenzhen”
詩天紙藝製品（深圳）有限公司 (Shitian Paper Craft (Shenzhen) Company Limited), a wholly foreign owned enterprise established in the PRC and is indirect wholly-owned by the Company
“Debt”
the indebtedness owing to Maoming Investments by Sanbond, which amounted to RMB160,000,000 (equivalent to approximately HK$191,364,669) as at the date of the Acquisition Agreement
“Director(s)” director(s) of the Company
“EGM”
the extraordinary general meeting of the Company to be convened for the purpose of considering and, if thought fit, approving, among other things, the Acquisition Agreement and the transactions contemplated thereunder
“Enlarged Group” the Group immediately after Acquisition Completion
“Group”
the Company and its subsidiaries
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC

– 2 –

DEFINITIONS

“Independent Board Committee”
the independent board committee of the Company comprising all independent non-executive Directors, namely Mr. Lui Tin Nang, Mr. Lam Ying Hung, Andy and Mr. Siu Man Ho, Simon, established to give recommendation to the Independent Shareholders regarding the Acquisition
“Independent Shareholders”
Shareholders other than the Vendor and its associates
“Latest Practicable Date”
22 June 2011, being the latest practicable date prior to the printing of this circular for ascertaining certain information herein
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Maoming Investments”
茂名市中誠致信投資有限公司 (Maoming City Zhongcheng Zhixin Investments Co., Ltd*), a company established in the PRC
“PRC”
the People’s Republic of China, which for the purpose of this circular excludes Hong Kong, Macau Special Administrative Region and Taiwan
“Promissory Note”
the 2% coupon promissory note to be issued by the Company to the Vendor (or its nominee(s)) as part of the consideration of the Acquisition payable within 24 months after Acquisition Completion
“Purchaser”
Brilliant Circle Development Limited, a company incorporated in Hong Kong with limited liability, which is an indirect wholly-owned subsidiary of the Company
“Sale Shares”
100 ordinary shares of US$1.00 each in the share capital of the Target, representing the entire issued share capital thereof as at the date of the Acquisition Agreement
“Sanbond”
Sanbond Investment Limited, a company incorporated in Hong Kong, which is legally and beneficially wholly-owned by the Target and is the 47.36% registered owner of BB Jinhuangshan
“SFO”
the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)

– 3 –

DEFINITIONS

“Share(s)”	ordinary share(s) of HK$0.01	each in the share capital
	of the Company
“Shareholder(s)”	holder(s) of Share(s)
“Stock Exchange”	The Stock Exchange of Hong	Kong Limited
“Target”	Champion League Investment Holdings Limited, a
	company incorporated in	the BVI with limited
	liability
“Target Group”	the Target and its subsidiary,	namely Sanbond
“Vendor”	Best Modern Holdings	Limited, a company
	incorporated in the BVI with	limited liability
“HK$”	Hong Kong dollars, the lawful currency of Hong
	Kong
“RMB”	Renminbi, the lawful currency of the PRC
“US$”	United States dollars, the	lawful currency of the
	United States of America
“%”	per cent.

For illustration purpose in this circular, amounts in RMB have been converted into HK$ at the rate of RMB0.8361 = HK$1.

* The English name is for identification purpose only and is not the official English translation of the Chinese name.

– 4 –

LETTER FROM THE BOARD

BRILLIANT CIRCLE HOLDINGS INTERNATIONAL LIMITED 貴聯控股國際有限公司

(formerly known as CT Holdings (International) Limited 詩天控股（國際）有限公司 ) (incorporated in the Cayman Islands with limited liability)

(Stock Code: 1008)

Executive Directors: Mr. Tsoi Tak (Chairman) Mr. Cai Xiao Ming, David (Vice-Chairman and Chief Executive Officer) Ms. Wu Sin Wah, Eva Mr. Cai Xiao Xing Mr. Kiong Chung Yin, Yttox

Non-executive Director: Mr. Sean Xing He

Independent non-executive Directors: Mr. Lam Ying Hung, Andy Mr. Lui Tin Nang Mr. Siu Man Ho, Simon

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

Head office and principal place of business in Hong Kong: Suites 2301-2, 23rd Floor Tower Two, Nina Tower 8 Yeung Uk Road Tsuen Wan New Territories Hong Kong 24 June 2011

To the Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY

INTRODUCTION

On 24 May 2011 (after trading hours), the Purchaser, a wholly-owned subsidiary of the Company, and the Vendor entered into the Acquisition Agreement whereby the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell the entire equity interest in the Target at a consideration of HK$630 million which shall be satisfied by the Purchaser as to HK$50 million in cash and as to HK$580 million (subject to adjustment, if any, as detailed below) by way of the issue of the Promissory Note. Upon Acquisition Completion, the Target Group and BB Jinhuangshan will become indirect wholly-owned subsidiaries of the Company.

The Acquisition constitutes a very substantial acquisition and connected transaction of the Company under the Listing Rules. The purpose of this circular is to provide you with, among other things, (i) details of the Acquisition; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders in respect of the

– 5 –

LETTER FROM THE BOARD

Acquisition; (iii) the letter of advice from an independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition; (iv) financial information of the Group; (v) financial information of the Target Group and BB Jinhuangshan; (vi) pro forma financial information of the Enlarged Group; and (vii) the notice of EGM.

THE ACQUISITION AGREEMENT

Date

24 May 2011

Parties : (1) Best Modern Holdings Limited, as the Vendor

(2) Brilliant Circle Development Limited, an indirect wholly-owned subsidiary of the Company, as the Purchaser

The Vendor is a limited liability company incorporated in the BVI, which is indirectly beneficially interested in 47.36% equity interest in BB Jinhuangshan. BB Jinhuangshan is an indirect non-wholly owned subsidiary of the Company after completion of the BCG Acquisition. Accordingly, the Vendor is a substantial shareholder of BB Jinhuangshan and thus a connected person of the Company as defined under the Listing Rules.

The Vendor is wholly and beneficially owned by Madam Ye Honglian who is one of the ultimate shareholders with approximately 12.55% attributable shareholding in Maoming Investments (being the previous joint venture partner of BB Jinhuangshan). Save as disclosed above, Madam Ye Honglian is independent of the connected persons of the Company.

Assets to be acquired

Pursuant to the Acquisition Agreement, the Purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale Shares, being 100 issued shares of the Target, representing the entire issued share capital of the Target. The Target (through its wholly-owned subsidiary, Sanbond) holds a 47.36% equity interest in and is entitled to share 62.36% of the profit and loss of BB Jinhuangshan as at the Latest Practicable Date.

For further details of the Target Group, please refer to the paragraph headed “Information on the Target Group” below.

Consideration

The consideration of the Acquisition is HK$630,000,000, which shall be satisfied by the Purchaser in the following manner:

(i) as to HK$50,000,000 as refundable deposit and had been paid on 9 June 2011 (the “ Deposit ”); and

– 6 –

LETTER FROM THE BOARD

(ii) as to the remaining HK$580,000,000 (subject to adjustment in respect of the settlement of the Debt as described below, if any), to be satisfied by way of procuring the Company to execute the Promissory Note in favour of the Vendor upon Acquisition Completion.

The consideration of the Acquisition was determined after arm’s length negotiations between the Purchaser and the Vendor on normal commercial terms and taking into account a number of factors including the historical performance, business growth and earnings potential of BB Jinhuangshan. For the past two years ended 31 December 2010, the financial performance of BB Jinhuangshan has been growing satisfactorily. According to the audited financial statements of BB Jinhuangshan, its net profit after taxation has increased to approximately HK$93.3 million for the year ended 31 December 2010 from approximately HK$67.6 million for the year ended 31 December 2009, representing an increase of approximately 38.0%. Based on the audited net profit after taxation of BB Jinhuangshan for the year ended 31 December 2010, multiplied by the attributable profit sharing ratio of 62.36% by the Vendor in BB Jinhuangshan, the consideration of the Acquisition represents a price earnings ratio of approximately 10.8 times.

The cash portion of the consideration of the Acquisition, being the Deposit, has been financed by the proceeds from the placing of the Company as announced on 11 May 2011 and the Company will issue the Promissory Note to the Vendor to satisfy the remaining portion of the consideration of the Acquisition. The principal terms of the Promissory Note are set out as follows:

Principal amount: HK$580,000,000 (subject to adjustment in respect of the settlement of the Debt as described below, if any) Maturity date: 24 months from date of issue of the Promissory Note Interest rate: 2% per annum, payable half-yearly on 30 June and 31 December in arrears with the first interest payment to be made on 31 December 2011 Security: unsecured Issue date: upon Acquisition Completion

It is expected that the Promissory Note will be repaid by means of funds generated from the Group’s internal resources and/or funds raised through equity and/or debt financing.

– 7 –

LETTER FROM THE BOARD

As at the date of the Acquisition Agreement, Sanbond is indebted to Maoming Investments in the sum of RMB160,000,000 (equivalent to approximately HK$191,364,669), being the consideration payable by Sanbond for the acquisition of the 47.36% equity interest in BB Jinhuangshan from Maoming Investments (which acquired the same equity interest in BB Jinhuangshan from its then joint venture partner in 2009 at the sum of RMB160,000,000). To the best knowledge, information and belief of the Directors, (i) Maoming Investments was owned as to 12.55% by Madam Ye Honglian and the remaining 87.45% shareholding in Maoming Investments was owned by two other third parties; (ii) save for being business partners with those two shareholders in respect of the investments in Maoming Investments, Madam Ye Honglian does not have any other relationship with them; (iii) one of such two other parties had been a director of BB Jinhuangshan during the preceding twelve-month period from the Latest Practicable Date; and (iv) save for their prior indirect equity interest and directorship in BB Jinhuangshan, each of them is a third party independent of and does not have any relationship with the Company and its connected persons as defined under the Listing Rules. As advised by the Vendor, the acquisition of the 47.36% equity interest in BB Jinhuangshan by Sanbond from Maoming Investments was an internal restructuring initiated by the Vendor to allow more flexibility to deal with or otherwise dispose of its investment in BB Jinhuangshan in such a way that potential purchaser(s) could acquire the equity interest in either the Target (which is a company incorporated in the BVI), or Sanbond (which is a company incorporated in Hong Kong) or the direct equity interest in BB Jinhuangshan. As advised by the Vendor, the acquisition cost of Sanbond of RMB160 million was therefore set at an amount equivalent to the original acquisition costs paid by Maoming Investments in 2009 in respect of the 47.36% equity interest in BB Jinhuangshan. Taking into account the aforesaid, the Company considered that the acquisition cost payable by Sanbond is not relevant for the Company in determining the consideration for the Acquisition. Instead, the consideration of the Acquisition was determined after arm’s length negotiations between the Purchaser and the Vendor on normal commercial terms and taking into account a number of factors including the historical performance, business growth and earnings potential of BB Jinhuangshan, which represents a premium over the then consideration paid by the Vendor to Maoming Investments for the acquisition of the 47.36% equity interest in BB Jinhuangshan. As set out in the section headed “Financial information of the Target Group and BB Jinhuangshan” below, the financial performance of BB Jinhuangshan has been continuously improving and its audited net profit after tax has been increased from approximately HK$57.4 million in 2008 to approximately HK$93.3 million in 2010. As at the Latest Practicable Date, the Debt amounted to RMB160,000,000 (equivalent to HK$191,364,669) and it is interest-free and payable on or before 31 August 2011. The Vendor shall settle the Debt if it is due and payable prior to Acquisition Completion. In the event that the Debt is not due and payable prior to the Acquisition Completion or the Debt is not settled by the Vendor in full prior to the Acquisition Completion, the Purchaser shall be entitled to assume the outstanding amount of the Debt from the Vendor and the amount of the Promissory Note to be issued to the Vendor for the remaining consideration of the Acquisition upon the Acquisition Completion shall be deducted by the same amount of the Debt assumed by the Purchaser.

Taking into account the promising track record and growing prospects of BB Jinhuangshan, the amount of the Debt and the delay in payment of a majority part of consideration of up to 24 months after Acquisition Completion by way of the issue of the Promissory Note (which bears interest at a rate lower than the current Hong Kong prime lending rate), the Directors consider that the consideration of the Acquisition (including the terms of the Promissory Note) is fair and reasonable.

– 8 –

LETTER FROM THE BOARD

Conditions precedent

The Acquisition Completion is conditional upon the satisfaction or waiver (as the case may be) of the following conditions:

(i) the Independent Shareholders passing the resolution approving the Acquisition Agreement and the transactions contemplated thereunder at the EGM;
(ii) the warranties given by the Vendor in the Acquisition Agreement remaining true and accurate in all respects; and
(iii) all necessary consents, authorisations, licences and approvals for or in connection with the sale and purchase of the Sale Shares having been obtained.

The Purchaser may at any time waive in writing the condition set out in (ii) above. If any of the above conditions precedent have not been satisfied (or waived as the case may be) at or before 12:00 noon on 31 July 2011 or such later date as the Purchaser may agree, the Acquisition Agreement shall cease and determine in which event the Deposit shall be refunded to the Purchaser forthwith and neither party shall have any obligations and liabilities thereunder save for any antecedent breaches of the terms thereof. As at the Latest Practicable Date, none of the above condition had been fulfilled.

Completion

Acquisition Completion shall take place on the date falling the Business Day on which the last of the conditions precedent specified above has been fulfilled (or waived as the case may be).

INFORMATION ON THE TARGET GROUP

Background information

The Target is an investment holding company incorporated in the BVI on 1 December 2010 with limited liability, the entire issued share capital of which is wholly and beneficially owned by the Vendor. According to the information provided by the Vendor, Sanbond (being a wholly-owned subsidiary of the Target) has acquired the 47.36% equity interest in BB Jinhuangshan from Maoming Investments at a consideration of RMB160,000,000 and BB Jinhuangshan became a wholly-foreign owned enterprise on 21 April 2011. Accordingly, as at the Latest Practicable Date, the Target is indirectly beneficially interested in 47.36% equity interest in and is entitled to share 62.36% of the profit and loss of BB Jinhuangshan.

BB Jinhuangshan was established as a sino-foreign co-operative joint venture on 22 December 1997 in Anhui Province, the PRC and is now a non-wholly owned subsidiary of the Company after completion of the BCG Acquisition. It was originally established by the Purchaser with 中國安徽蚌埠捲煙廠 (China Anhui Bengbu Cigarette Factory*), an independent third party not connected with the Company and its connected persons.

– 9 –

LETTER FROM THE BOARD

Pursuant to the joint venture contract of BB Jinhuangshan dated 30 August 2004 entered into between the Purchaser and the then joint venture partner, the profit and loss of BB Jinhuangshan has been agreed to be shared as to 37.64% by the Purchaser and as to 62.36% by the joint venture partner, which was determined after commercial negotiation and taking into account the strategic relationship established by the then joint venture partner in Anhui province at that time. For further details on the history and development of BB Jinhuangshan and the BCG Acquisition, please refer to the BCG Circular.

BB Jinhuangshan is principally engaged in the printing of cigarette packages, which has established its own production facilities in Anhui Province, the PRC with annual production capacity of approximately 1.2 million cases of cigarette packages in 2010. For the past three years ended 31 December 2010, all of the sales of BB Jinhuangshan have been made to customers within the PRC and its principal customer is a state-owned cigarette manufacturer.

Upon the Acquisition Completion, the Target Group and BB Jinhuangshan will become indirect wholly-owned subsidiaries of the Company.

Group structure

Set out below are the simplified group structures of the Group and the Target Group as at the Latest Practicable Date and immediately after Acquisition Completion:

As at the Latest Practicable Date

==> picture [410 x 334] intentionally omitted <==

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

Company
Vendor
100% 100% 100%
CT Printing
Target BCG Limited
(Note 1)
100% 100% 100%
CT Shenzhen
Sanbond Purchaser
(Note 2)
52.64%
47.36%
BB Jinhuangshan Other members
of the BCG Group
(Note 3)
----- End of picture text -----

– 10 –

LETTER FROM THE BOARD

Immediately after Acquisition Completion

==> picture [399 x 422] intentionally omitted <==

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

Company
100% 100%
CT Printing
BCG Limited
(Note 1)
100% 100%
CT Shenzhen
Purchaser
(Note 2)
100%
Target
100%
52.64%
Sanbond
47.36%
Other members
BB Jinhuangshan
of the BCG Group
(Note 3)
----- End of picture text -----

Notes:

The principal business of CT Printing Limited is the printing of books and other paper-related products including greeting cards, party decoratives, calendars, paper bags and packaging boxes.
CT Shenzhen is a wholly foreign owned enterprise established in the PRC. Pursuant to the business licence of CT Shenzhen, its business scope covers the printing of packaging and decorative matter, research and development on printing technology, wholesale, import and export of packaging products and other related services.
The BCG Group is principally engaged in the printing of cigarette packages, which also engaged in the manufacturing of laminated paper. Please refer to the BCG Circular for further details.

– 11 –

LETTER FROM THE BOARD

Financial information of the Target Group and BB Jinhuangshan

Except for the acquisition of 47.36% equity interest in BB Jinhuangshan from Maoming Investments as set out in the above paragraph headed “Background information”, the Target Group has not conducted any business since its incorporation and as at the Latest Practicable Date, its principal asset is its 47.36% equity interest in BB Jinhuangshan. As advised by the Vendor, the Target Group is indebted to Maoming Investments in the sum of RMB160,000,000 (equivalent to approximately HK$191,364,669) as at the date of the Acquisition Agreement and as at the Latest Practicable Date. Further details of the Debt is disclosed in the above paragraph headed “Consideration”.

According to the financial information of the Target Group set out in Appendix II to this circular prepared under the Hong Kong Financial Reporting Standards, the Target Group has not recorded any turnover and the audited net losses before and after tax of the Target Group were HK$71,486 and HK$71,486, respectively, for the period from 1 December 2010 (being the date of incorporation) to 31 December 2010. The audited net deficit of the Target Group as at 31 December 2010 was HK$70,706.

As extracted from the accountants’ report on BB Jinhuangshan as set out in Appendix II to this circular, the following is a summary of the audited financial results of BB Jinhuangshan for the three years ended 31 December 2010:

	Year	ended 31 December
	2008	2009	2010
	HK$’000	HK$’000	HK$’000
	(audited)	(audited)	(audited)
Turnover	363,380	333,787	428,025
Profit before tax	76,867	78,988	110,055
Profit for the year	57,419	67,573	93,317

According to the accountants’ report on BB Jinhuangshan as set out in Appendix II to this circular, BB Jinhuangshan recorded an audited net assets of approximately HK$204.7 million as at 31 December 2010.

For further details of the financial information of the Target Group and BB Jinhuangshan, please refer to the Appendix II to this circular.

– 12 –

LETTER FROM THE BOARD

REASONS FOR THE ACQUISITION

The Company is principally engaged in the printing of cigarette packages for PRC cigarette manufacturers and provision of printing services to customers including international publishers and multi-national corporations.

As referred to in the annual report of the Company for the year ended 31 December 2010 and the BCG Circular, the Group may, from time to time, consider further acquisitions of companies engaging in similar cigarette package printing business should suitable opportunities arise. In particular, as stated in the BCG Circular, the Group has been considering to acquire the remaining equity interest in BB Jinhuangshan. Given the PRC is the largest cigarette manufacturer in the world, its market of cigarette packages provide ample opportunities for cigarette package printers and the large population of cigarette smokers and the expected economic growth in the PRC which will raise consumer spending power of the PRC, the Group is optimistic on the growth in demand of cigarettes and hence the growth potential of the business of cigarette package printing in the PRC. In this connection, the Group has identified the Target Group as a suitable acquisition opportunity and considered that the Acquisition is in line with development strategy of the Company. Also, the Acquisition would enable the Group to further consolidate control and the profits in BB Jinhuangshan and benefit from its financial performance.

Taken into account the aforesaid, the Directors are of the view that the terms of the Acquisition Agreement are fair and reasonable and the Acquisition is in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECT OF THE ACQUISITION

After completion of the BCG Acquisition and as at the Latest Practicable Date, BB Jinhuangshan is an indirect non-wholly owned subsidiary of the Company. Upon Acquisition Completion, the Target Group and BB Jinhuangshan will become indirect wholly-owned subsidiaries of the Company and their financial results will be consolidated into the Company’s consolidated accounts. Please refer to Appendix II to this circular for details of the financial information of the Target Group and BB Jinhuangshan.

– 13 –

LETTER FROM THE BOARD

The following is a summary of the unaudited pro forma combined statement of financial position of the Enlarged Group as set out in Appendix III to this circular (which has been prepared as if the BCG Acquisition and the Acquisition had been completed on 31 December 2010):

		After taking	After further
		into account	taking into
		the pro forma	account the
	CT Group	adjustments	pro forma
	as at	relating to the	adjustments
	31 December	BCG	relating to the
	2010	Acquisition	Acquisition
	(HK$ million)	(HK$ million)	(HK$ million)
Total equity attributable to	287.9	880.0	359.9
the equity holders of the		(Note 1)	(Note 3)
Company
Total assets	388.0	1,893.6	1,843.6
		(Note 1)	(Note 3)
Total liabilities	100.1	893.9	1,474.0
		(Note 2)	(Note 4)

Notes:

1. The increase in total assets and total equity attributable to the equity holders of the Company is mainly attributable to the increase in assets as a result of the consolidation of the BCG Group as a result of the BCG Acquisition. Please refer to the BCG Circular for further details.

2. The increase in total liabilities is mainly due to the consolidation of liabilities of the BCG Group as a result of the BCG Acquisition. Please refer to the BCG Circular for further details.

3. The decrease in the total assets and total equity attributable to the equity holders of the Company is mainly due to the recognition of the excess of fair value of consideration of the Acquisition over the decrease in carrying value of non-controlling interest in BB Jinhuangshan by the Group of approximately HK$520 million as at 31 December 2010 as a result of the Acquisition.

4. The increase in total liabilities is mainly due to the issue of the Promissory Note in the amount of HK$580 million (assuming the Debt has been fully settled by the Vendor on or before Acquisition Completion) by the Group as a result of the Acquisition.

Moreover, based on the unaudited pro forma combined statement of comprehensive income of the Enlarged Group as set out in Appendix III to this circular (which has been prepared as if the Acquisition and the BCG Acquisition had taken place on 1 January 2010), the profit attributable to the owners of the Company for the year ended 31 December 2010 would increase from approximately HK$7.7 million to HK$239.4 million (after taking into account the pro forma adjustments relating to the BCG Acquisition), which was mainly due to the consolidation of profit attributable to the owner of BCG of approximately HK$231.7 million for the year ended 31 December 2009; and would further increase to approximately HK$296.6 million (after further taking into account the pro forma adjustments relating to the Acquisition), which was mainly due to the reversal of

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LETTER FROM THE BOARD

profit attributable to the non-controlling shareholders of BB Jinhuangshan for the year ended 31 December 2010 of approximately HK$57.2 million for the year ended 31 December 2010.

LISTING RULES IMPLICATIONS

The Acquisition constitutes a very substantial acquisition for the Company pursuant to Rule 14.06(5) of the Listing Rules. Since the Vendor is a substantial shareholder of BB Jinhuangshan and thus a connected person of the Company, the Acquisition also constitutes a connected transaction of the Company pursuant to Rule 14A.13(1)(a) of the Listing Rules. The Acquisition Agreement and the transactions contemplated thereunder are therefore subject to the approval by the Independent Shareholders at the EGM by way of poll.

No Shareholder, except for the Vendor and its associates, has a material interest in the Acquisition which is different from other Shareholders and is required to abstain from voting on the relevant resolution(s) to be proposed at the EGM to approve the Acquisition Agreement and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Vendor and its associates do not hold any Shares, options or securities convertible or exchangeable into Shares as at the Latest Practicable Date. The Vendor and its associates would be required to abstain from voting on the relevant resolution(s) to be proposed at the EGM to approve the Acquisition Agreement and the transactions contemplated thereunder if any of them hold any Shares as at the date of the EGM. None of the Directors have a material interest in the Acquisition and were required to abstain from voting on the board resolution approving the Acquisition Agreement and the transactions contemplated thereunder.

THE EGM

The EGM will be held at Sportful Garden Restaurant, Shop No. 312, 3rd Floor, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, New Territories, Hong Kong, on Wednesday, 13 July 2011 at 11:00 a.m.. for the purpose of considering and, if thought fit, approving the Acquisition Agreement and the transactions contemplated thereunder. The notice convening the EGM is set out on pages EGM-1 to EGM-2 of this circular.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying forms of proxy in accordance with the instructions printed thereon and return them to Tricor Investor Services Limited, the branch share registrar and transfer office of the Company in Hong Kong, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider the terms of the Acquisition Agreement and the transactions contemplated thereunder are fair and reasonable and the Acquisition is in the interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the proposed resolution at the EGM approving the Acquisition Agreement and the transactions contemplated thereunder. Your attention is also drawn to the text of the letter of advice from the Ample Capital containing its recommendation and the principal factors they have taken into account in arriving at their recommendation set out on pages 18 to 32 of this circular. You are advised to read the Letter from the Independent Board Committee and the letter from Ample Capital before deciding how to vote at the EGM.

ADDITIONAL INFORMATION

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

By Order of the Board Brilliant Circle Holdings International Limited Kiong Chung Yin, Yttox Executive Director

– 16 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

BRILLIANT CIRCLE HOLDINGS INTERNATIONAL LIMITED 貴聯控股國際有限公司

(formerly known as CT Holdings (International) Limited 詩天控股（國際）有限公司 )

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1008)

24 June 2011

To the Independent Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY

We refer to the circular of the Company dated 24 June 2011 (the “ Circular ”) of which this letter forms part. Capitalised terms used herein have the same meanings as those defined in the Circular unless otherwise stated.

We have been appointed as members of the Independent Board Committee to consider the terms of the Acquisition Agreement and the transactions contemplated thereunder. Ample Capital has been appointed as the independent financial adviser to advise us in this regard. Details of the advice of Ample Capital are contained in its letter set out on pages 18 to 32 of the Circular.

Having taken into account the advice of Ample Capital, we consider the terms of the Acquisition Agreement and the transactions contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned, and the Acquisition and the transactions contemplated thereunder are in the interests of the Company and its Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the proposed resolution at the EGM to approve the Acquisition Agreement and the transactions contemplated thereunder.

Yours faithfully,

Independent Board Committee

Lam Ying Hung, Andy

Independent non-executive Director

Lui Tin Nang

Independent non-executive Director

Siu Man Ho, Simon

Independent non-executive Director

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LETTER FROM AMPLE CAPITAL

The following is the full text of the letter from Ample Capital setting out its advice to the Independent Board Committee and the Independent Shareholders in relation to the Acquisition for inclusion in this circular.

==> picture [107 x 42] intentionally omitted <==

Ample Capital Limited Unit A, 14th Floor

Two Chinachem Plaza 135 Des Voeux Road Central Hong Kong

24 June 2011

To the Independent Board Committee and the Independent Shareholders of Brilliant Circle Holdings International Limited

Dear Sirs,

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY

INTRODUCTION

We refer to our engagement by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Acquisition, the particulars of which have been set out in a circular to the Shareholders dated 24 June 2011 (the “ Circular ”) and in which this letter is reproduced. Unless the context requires otherwise, terms used in this letter shall have the same meanings as given to them in the Circular.

Ample Capital has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders to (i) give our recommendation as to whether the terms of the Acquisition are fair and reasonable so far as the Independent Shareholders are concerned and on normal commercial terms; (ii) give our recommendations as to whether the Acquisition is in the interest of the Company and the Shareholders as a whole and in the ordinary and usual course of business of the Group; and (iii) advise the Independent Shareholders on how to vote at the EGM. Details of the reasons for the Acquisition are set out in the section headed “Letter from the Board” in the Circular (the “ Board Letter ”).

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LETTER FROM AMPLE CAPITAL

On 24 May 2011 (after trading hours), the Purchaser, a wholly-owned subsidiary of the Company, and the Vendor entered into the Acquisition Agreement whereby the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell the entire equity interest in the Target at a consideration of HK$630 million which shall be satisfied by the Purchaser as to HK$50 million in cash and as to HK$580 million (subject to adjustment, if any) by way of the issue of the Promissory Note. Upon Acquisition Completion, the Target Group and BB Jinhuangshan will become indirect wholly-owned subsidiaries of the Company.

The Company was incorporated in the Cayman Island with limited liability whose shares are listed on the Main Board of the Stock Exchange. The Group is principally engaged in the printing of cigarette packages for PRC cigarette manufacturers and provision of printing services to customers including international publishers and multi-national corporations.

No Shareholder, except for the Vendor and its associates, has a material interest in the Acquisition which is different from other Shareholders and its required to abstain from voting on the relevant resolutions(s) to be proposed at the EGM to approve the Acquisition Agreement and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Vendor and its associates do not hold any Shares, options or securities convertible or exchangeable into Shares as at the Latest Practicable Date. The vendor and its associates would be required to abstain from voting on the relevant resolution(s) to be proposed at the EGM to approve the Acquisition Agreement and the transactions contemplated thereunder if any of them hold any Shares as at the date of the EGM. None of the Directors have a material interest in the Acquisition and were required to abstain from voting on the board resolution approving the Acquisition Agreement and the transactions contemplated thereunder.

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LETTER FROM AMPLE CAPITAL

BASIS OF ADVICE

In formulating our opinions and recommendations, we have relied on the information supplied to us by the Company, the opinions expressed by, and the representations of, the Directors and the management of the Company, including those set out in the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representation provided to us by the Directors. We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. The Directors have confirmed that, to the best of their knowledge, they believe that no material fact or information has been omitted from the information supplied and that the representations made or opinions expressed have been arrived at after due and careful consideration and there are no other facts or representations the omission of which would make any statement in the Circular, including this letter, misleading.

While we have taken reasonable steps to satisfy the requirements under the Listing Rules, we have not carried out any independent verification of the information, opinions or representations given or made by or on behalf of the Company, nor have we conducted an independent investigation into the business affairs or assets and liabilities of the Group or any of the other parties involved in the Acquisition.

In the event of inconsistency, the English text of this letter shall prevail over the Chinese translation of this letter.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion in relation to the Acquisition, we have taken into consideration the following factors:

1. Background information on the Group

After completion of the BCG Acquisition in April 2011, the Group has been principally engaged in the printing of cigarette packages for PRC cigarette manufacturers and provision of printing services to customers including international publishers and multi-national corporations. Certain summary financial information of the Group as extracted from the Company’s annual report for the year ended 31 December 2010 (the “ Annual Report ”) is set out below.

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LETTER FROM AMPLE CAPITAL

Turnover Profit attributable to owners of the Company Total assets (as at period end) Total liabilities (as at period end) Net assets (as at period end)	Year ended December 2010 2009 HK$’000 HK$’000 (audited) (audited) 370,031 362,750 7,733 22,733 387,975 424,424 100,082 145,477 287,893 278,947

As stated in the Annual Report, the Group recorded revenue of approximately HK$370,031,000 during the year ended 31 December 2010, representing an approximately 2.01% increase over the revenue of approximately HK$362,750,000 generated in the year ended 31 December 2009. Furthermore, the Group generated profit attributable to owners of the Company of approximately HK$7,733,000 for the year ended 31 December 2010 compared with a profit attributable to owners of the Company of approximately HK$22,733,000 for the year ended 31 December 2009, representing a decrease of approximately 65.98%. As per the Annual Report, the Directors attribute the sharp decrease in profit to continuous increase in raw materials cost, direct manufacturing costs and selling expenses, partly offset by the decrease in administrative expenses. As at 31 December 2010, the Group had consolidated total assets, total liabilities and net assets of approximately HK$387,975,000, HK$100,082,000 and HK$287,893,000 respectively.

As explained in the BCG Circular, the Group entered into an acquisition agreement in respect of the BCG Acquisition on 29 December 2010 (as supplemented on 25 March 2011). Under the BCG Acquisition, the Group has acquired the entire issued share capital of BCG. Among other things, BCG is indirectly interested in an approximately 52.64% equity interest in BB Jinhuangshan. As per the Company’s announcement dated 14 April 2011, the BCG Acquisition has completed on the same date. Please refer to the BCG Circular for further information regarding the BCG Acquisition.

We set out below certain summary unaudited pro forma financial information of the Group (after taking into account the BCG Acquisition) as extracted from the “Unaudited pro forma Combined Statement of Comprehensive Income of the Enlarged Group” and “Unaudited pro forma Combined Statement of Financial Position of the Enlarged Group” (collectively the “ Pro Forma Financial Information ”) set out in Appendix III to the Circular headed “Financial information of the Enlarged Group”.

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LETTER FROM AMPLE CAPITAL

	The Group
	(after taking
	into account
	the BCG
	Acquisition)
	HK$’000
	(unaudited)
Turnover	1,420,669
Profit attributable to owners of the Company	239,449
Total assets	1,893,590
Total liabilities	893,883
Total equity attributable to Shareholders	879,930

2. Information on the Target Group

As per the Board Letter, the Target is an investment holding company incorporated in the BVI on 1 December 2010 with limited liability, the entire issued share capital of which is wholly and beneficially owned by the Vendor. According to the information provided by the Vendor, Sanbond (being a wholly-owned subsidiary of the Target) has acquired the 47.36% equity interest in BB Jinhuangshan from Maoming Investments at a consideration of RMB160,000,000 and BB Jinhuangshan became a wholly-foreign owned enterprise on 21 April 2011. Accordingly, as at the Latest Practicable Date, the Target is indirectly beneficially interested in 47.36% equity interest in and is entitled to share 62.36% of the profit and loss of BB Jinhuangshan.

Except for the acquisition of 47.36% equity interest in BB Jinhuangshan from Maoming Investments as set out in the paragraph headed “Background information” in the Board Letter, the Target Group has not conducted any business since its incorporation and as at the Latest Practicable Date, its principal asset is its 47.36% equity interest in BB Jinhuangshan.

BB Jinhuangshan is principally engaged in the printing of cigarette packages, which has established its own production facilities in Anhui Province, the PRC with annual production capacity of approximately 1.2 million of cigarette packages in 2010. For the past three years ended 31 December 2010, all of the sales of BB Jinhuangshan have been made to customers within the PRC and its principal customer is a state-owned cigarette manufacturer.

The following is certain summary financial information of BB Jinhuangshan for the three years ended 31 December 2008, 2009 and 2010 as extracted from the accountants’ report on BB Jinhuangshan (the “ BB Jinhuangshan Accountants’ Report ”) set out in Appendix II to the Circular headed “Financial Information of the Target Group and BB Jinhuangshan”.

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LETTER FROM AMPLE CAPITAL

	Year	ended 31 December	ended 31 December
	2008	2009	2010
	HK$’000	HK$’000	HK$’000
	(audited)	(audited)	(audited)
Turnover	363,380	333,787	428,025
Profit attributable to owners of
the company	57,419	67,573	93,317
Total assets (as at period end)	333,749	370,639	442,969
Total liabilities (as at period end)	186,249	206,640	238,232
Total equity (as at period end)	147,500	163,999	204,737

Your attention is drawn to the subsection headed “Management discussion and analysis on BB Jinhuangshan” in Appendix II to the Circular for further information on BB Jinhuangshan.

We note that the Vendor and its associates are connected persons of the Company by reason of the Vendor being a substantial shareholder of BB Jinhuangshan, a non-wholly owned subsidiary of the Company as at the Latest Practicable Date. The Directors have advised us that, to the best of their information, knowledge and belief (i) save for the Vendor, none of the connected persons of the Company has any control or interest in the Vendor and its associates; (ii) save for the Vendor’s existing 47.36% equity interest in BB Jinhuangshan, the Vendor and its associates do not have any control or interest in the Group; (iii) the Vendor and its associates do not hold any Shares, options or securities convertible or exchangeable into Shares as at the Latest Practicable Date; and (iv) none of the Shareholders have an interest in the Acquisition which is different from any of the other Shareholders as at the Latest Practicable Date. The Directors have also advised us that they have acted in the best interest of all of the Shareholders during the negotiations of the Acquisition Agreement.

3. Reasons for the Acquisition

It is stated in the Board Letter that as referred to in the Annual Report and the BCG Circular, the Group may, from time to time, consider further acquisitions of companies engaging in similar cigarette package printing business should suitable opportunities arise. In particular, as stated in the BCG Circular, the Group has been considering to acquire the remaining equity interest in BB Jinhuangshan. Given the PRC is the largest cigarette manufacturer in the world, its market of cigarette packages provide ample opportunities for cigarette package printers and the large population of cigarette smokers and the expected economic growth in the PRC which will raise consumer spending power of the PRC, the Group is optimistic on the growth in demand of cigarettes and hence the growth potential of the business of cigarette package printing in the PRC. In this connection, the Group has identified

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LETTER FROM AMPLE CAPITAL

the Target Group as a suitable acquisition opportunity and considered that the Acquisition is in line with development strategy of the Company. Also, the Acquisition would enable the Group to further consolidated control and the profits in BB Jinhuangshan and benefit from its financial performance.

4. Terms of the Acquisition

4.1 The consideration

As per the Board Letter, the consideration of the Acquisition is HK$630,000,000 (the “ Consideration ”), which shall be satisfied by the Purchaser in the following manner:

(i) as to HK$50,000,000 as a refundable Deposit and had been paid on 9 June 2011; and
(ii) as to the remaining HK$580,000,000 (subject to adjustment in respect of the settlement of the Debt, if any), to be satisfied by way of procuring the Company to execute the Promissory Note in favour of the Vendor upon Acquisition Completion.

The Board Letter further states that the Consideration was determined after arm’s length negotiations between the Purchaser and the Vendor on normal commercial terms and taking into account a number of factors including the historical performance, business growth and earnings potential of BB Jinhuangshan. For the past two years ended 31 December 2010, the financial performance of BB Jinhuangshan has been growing satisfactorily. According to the audited financial statements of BB Jinhuangshan, its net profit after taxation has increased to approximately HK$93.3 million for the year ended 31 December 2010 from approximately HK$67.6 million for the year ended 31 December 2009, representing an increase of approximately 38.0%. Based on the audited net profit after taxation of BB Jinhuangshan for the year ended 31 December 2010, multiplied by the attributable profit sharing ratio of 62.36% by the Vendor in BB Jinhuangshan, the consideration of the Acquisition represents a price earnings ratio of approximately 10.8 times.

The Board Letter carries on to explain that as at the date of the Acquisition Agreement, Sanbond is indebted to Maoming Investments in the sum of RMB160,000,000 (equivalent to approximately HK$191,364,669), being the consideration payable by Sanbond for the acquisition of the 47.36% equity interest in BB Jinhuangshan from Maoming Investments (which acquired the same equity interest in BB Jinhuangshan from its then joint venture partner in 2009 at the sum of RMB160,000,000). To the best knowledge, information and

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LETTER FROM AMPLE CAPITAL

belief of the Directors, (i) Maoming Investments was owned as to 12.55% by Madam Ye Honglian and the remaining 87.45% shareholding in Maoming Investments was owned by two other third parties; (ii) save for being business partners with those two shareholders in respect of the investment in Maoming Investments, Madam Ye Honglian does not have any other relationship with them; (iii) one of such two other parties had been director of BB Jinhuangshan during the preceding twelve-month period from the Latest Practicable Date; and (iv) save for their prior indirect equity interest and directorship in BB Jinhuangshan, each of them is a third party independent of and does not have any relationship with the Company and its connected persons as defined under the Listing Rules. As advised by the Vendor, the acquisition of the 47.36% equity interest in BB Jinhuangshan by Sanbond from Maoming Investments was an internal restructuring initiated by the Vendor to allow more flexibility to deal with or otherwise dispose of its investment in BB Jinhuangshan in such a way that potential purchaser(s) could acquire the equity interest in either the Target (which is a company incorporated in the BVI), or Sanbond (which is a company incorporated in Hong Kong) or the direct equity interest in BB Jinhuangshan. As advised by the Vendor, the acquisition cost of Sanbond of RMB160 million was therefore set at an amount equivalent to the original acquisition costs paid by Maoming Investments in 2009 in respect of the 47.36% equity interest in BB Jinhuangshan. Taking into account the aforesaid, the Company considered that the acquisition cost payable by Sanbond is not relevant for the Company in determining the consideration for the Acquisition. Instead, the consideration of the Acquisition was determined after arm’s length negotiations between the Purchaser and the Vendor on normal commercial terms and taking into account a number of factors including the historical performance, business growth and earnings potential of BB Jinhuangshan, which represents a premium over the then consideration paid by the Vendor to Maoming Investments for the acquisition of the 47.36% equity interest in BB Jinhuangshan. As set out in the section headed “Financial information of the Target Group and BB Jinhuangshan” in the Board Letter, the financial performance of BB Jinhuangshan has been continuously improving and its audited net profit after tax has been increased from approximately HK$57.4 million in 2008 to approximately HK$93.3 million in 2010. As at the Latest Practicable Date, the Debt amounted to RMB160,000,000 (equivalent to HK$191,364,669) and it is interest-free and payable on or before 31 August 2011. The Vendor shall settle the Debt if it is due and payable prior to Acquisition Completion. In the event that the Debt is not settled by the Vendor in full prior to the Acquisition Completion, the Purchaser shall be entitled to assume the outstanding amount of the Debt from the Vendor and the amount of the Promissory Note to be issued to the Vendor for the remaining Consideration upon the Acquisition Completion shall be deducted by the same amount of the Debt assumed by the Purchaser.

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LETTER FROM AMPLE CAPITAL

Taking into account the promising track record and growing prospects of BB Jinhuangshan, the amount of the Debt and the delay in payment of a majority part of Consideration of up to 24 months after Acquisition Completion by way of the issue of the Promissory Note (which bears interest at a rate lower than the current Hong Kong prime lending rate), the Directors consider that the Consideration (including the terms of the Promissory Note) is fair and reasonable.

Having assessed the factors considered by the Company as discussed above, we concur with the Company’s view that the acquisition payable by Sanbond is not relevant for the Company in determining the Consideration. In this connection, we have identified 6 companies listed in Hong Kong whose principal business is similar to that of the Target Group (collectively the “ Industry Comparable(s) ”). The Industry Comparables include all of the companies as identified by us in our research on a best effort basis which are considered to be relevant to the Target Group’s business. Having considered (i) the subject of the Acquisition, i.e. BB Jinhuangshan, is a profit generating business entity instead of an asset (e.g. a parcel of land); and (ii) BB Jinhuangshan has been in operation for a number of years and has recorded a solid historical financial track record, we have conducted an analysis of the price-to-earnings ratio (“ P/E ”) which is a commonly adopted benchmark in the valuation of companies to assess the fairness and reasonableness of the Consideration. Such analysis is set out below for your information.

Name of		Market	Profit
company		capitalization/	attributable to
(stock code)	Principal business	valuation1	shareholders2	P/E
		HK$’000	HK$’000	times
New Island	Printing and	1,305,992	24,248	53.86
Printing	manufacturing of
Holdings	high quality,
Limited (377)	multi-color
	packaging products
	and carbon boxes;
	printing of books,
	brochures and other
	paper products.
Starlite	Printing and	220,557	41,212	5.35
Holdings	manufacturing of
Limited (403)	packaging
	materials, labels,
	paper products and
	environmentally
	friendly products.
Hung Hing	Book and package	2,723,595	166,604	16.35
Printing	printing; consumer
Group	product packaging;
Limited (450)	corrugated box; and
	trading of paper.

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LETTER FROM AMPLE CAPITAL

Name of		Market	Profit
company		capitalization/	attributable to
(stock code)	Principal business	valuation1	shareholders2	P/E
		HK$’000	HK$’000	times
Kith Holdings	Printing and	407,868	55,775	7.31
Limited	manufacturing of
(1201)	packaging
	products, and
	distribution of
	electronic and
	related products.
	Other operations
	include leasing out
	of assets for rental
	income and
	provision of
	financial services.
AMVIG	Print and	4,929,605	570,914	8.63
Holdings	manufacture
Limited	cigarette packages
(2300)	and manufacture
	laminated papers
	and laser film.
The Company	Printing of cigarette	5,912,500	239,4493	24.69
(1008)	packages for PRC
	cigarette
	manufacturers and
	provision of
	printing services to
	customers
	including
	international
	publishers and
	multi-national
	corporations.
			Maximum:	53.86
			Minimum:	5.35
			Average:	19.37
			Median:	12.49
BB	Printing of cigarette	1,010,263	93,317	10.83
Jinhuangshan	packages

Source: http://www.hkexnews.hk/

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LETTER FROM AMPLE CAPITAL

Notes:

For the Industry Comparables, the market capitalization was calculated based on their respective closing price per share on 24 May 2011, i.e. the date of the Acquisition Agreement. For BB Jinhuangshan, its valuation of HK$1,010,263,000 was calculated with reference to the Consideration of HK$630,000,000 for a 62.36% share of its profit and loss.
Unless otherwise stated, the net profit attributable to shareholders of the Industry Comparables is derived from their respective latest published financial statements. For BB Jinhuangshan, its net profit for the year ended 31 December 2010 is derived from the BB Jinhuangshan Accountants’ Report.
The Company’s net profit attributable to shareholders is derived from the Pro Forma Financial Information after taking into account the pro forma adjustments for the BCG Acquisition which has completed on 14 April 2011.

As illustrated in the analysis set out above, the P/E of the Industry Comparables range from a low of approximately 5.35 times to a high of approximately 53.86 times, with the average and median P/E being approximately 19.37 times and 12.49 times respectively. The P/E of BB Jinhuangshan as calculated with reference to the Consideration is approximately 10.83 times, a figure which is within the range as represented by the Industry Comparables and is below the average and median P/E thereof.

We also note from the sub-section headed “Basis of the consideration of the Acquisition” referred to in the BCG Circular that the consideration of the BCG Acquisition represents a P/E of approximately 10.36 times (the “ BCG Acquisition P/E ”). We note that the BCG Acquisition involves the acquisition of a controlling interest in BCG whereas the Consideration (for which the Group is acquiring a 47.36% equity interest in BB Jinhuangshan) represents a P/E of approximately 10.83 times. Having considered the Group only obtained an approximately 37.64% entitlement to BB Jinhuangshan’s profit and loss through the BCG Acquisition while it will obtain an approximately 62.36% entitlement to BB Jinhuangshan’s profit loss through the Acquisition, we consider the P/E of BB Jinhuangshan (calculated with reference to the Consideration) is in line with the BCG Acquisition P/E.

Having considered the factors discussed above, we are of the view that the Consideration is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

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LETTER FROM AMPLE CAPITAL

4.2 The Promissory Note

As mentioned in the Board Letter, the cash portion of the Consideration, being the Deposit, has been financed by the proceeds from the placing of the Company as announced on 11 May 2011 and the Company will issue the Promissory Note to the Vendor to satisfy the remaining portion of the Consideration. The principal terms of the Promissory Note are set out as follows:

Principal amount:	HK$580,000,000 (subject to adjustment in respect
	of the settlement of the Debt, if any)
Maturity date:	24 months from date of issue of the Promissory
	Note
Interest rate:	2% per annum, payable half-yearly on 30 June and
	31 December in arrears with the first interest
	payment to be made on 31 December 2011
Security:	unsecured
Issue date:	upon Acquisition Completion

It is expected that the Promissory Note will be repaid by means of funds generated from the Group’s internal resources and/or funds raised through equity and/or debt financing.

We note that as at the Latest Practicable Date, the HK$ best lending rate of the Hongkong and Shanghai Banking Corporation Limited is 5% per annum (the “ Best Lending Rate ”). Since the Best Lending Rate represents the fair cost of capital at which companies may obtain bank loans, the interest rate of the Promissory Note of 2% per annum, an amount which is below the Best Lending Rate, is favorable to the Company.

In our discussion with the Group’s management, we have learnt that it has also considered other financing alternatives for the Acquisition such as equity financing or other type of debt financing such as bank borrowings.

For equity financing such as placing of shares, rights issue or open offer, the main consideration of the Group’s management is the time involved. As announced in the Company’s announcement dated 11 May 2011, the Company has conducted a placing of up to 7,500,000 Shares raising net proceeds of approximately HK$59.4 million, a substantial portion of which has been applied towards the payment of the Deposit in the amount of HK$50,000,000 in connection with the Acquisition. If the Company were to raise further funds by way of placing to finance the remaining portion of the Consideration, the Company will need to procure suitable investors. As at the Latest Practicable

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LETTER FROM AMPLE CAPITAL

Date, the Company has not identified such suitable investors with a concrete plan to invest in the Company. For pro-rata equity financing such as rights issue or open offer, a significant amount of time would be used in the whole process including shareholders’ approval (if applicable), issue of prospectus and an offer period.

For other debt financing such bank borrowings, we have already mentioned earlier that the Best Lending Rate is 5% per annum, an amount which is higher than the Promissory Note’s interest rate of 2% per annum. Accordingly, the Group’s management expects that any bank borrowings that may be obtained by the Group would incur significantly higher interest expenses for the Group. Furthermore, bank borrowings are generally subject to lengthy due diligence which would also lengthen the time at which the Group would receive the required funding to finance the remaining portion of the Consideration.

Having considered the above, we are of the view that the Promissory Note is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

4.3 Conclusion regarding the Acquisition

Having considered the factors discussed in this section, we are of the view that terms of the Acquisition (including the Consideration and the Promissory Note) are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

5. Financial impacts of the Acquisition

5.1 Earnings

As illustrated in the Pro Forma Financial Information, the Group (after taking into account the BCG Acquisition) has unaudited pro forma net profit attributable to Shareholders of approximately HK$239,449,000. After pro forma adjustments for the Acquisition, the Enlarged Group would have unaudited pro forma net profit attributable to Shareholders of approximately HK$296,567,000. As explained in the section headed “Financial effect of the Acquisition” in the Board Letter (the “ Financial Effect ”), such increase in profit attributable to Shareholders is mainly attributable to the reversal of profit attributable to the non-controlling shareholders of BB Jinhuangshan. Based on the above, the Acquisition is expected to have an immediate positive effect on the Enlarged Group’s earnings.

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LETTER FROM AMPLE CAPITAL

5.2 Net assets

As illustrated in the Pro Forma Financial Information, the Group (after taking into account the BCG Acquisition) has unaudited pro forma net assets attributable to Shareholders of approximately HK$879,930,000. After pro forma adjustments for the Acquisition, the Enlarged Group would have unaudited pro forma net assets attributable to Shareholders of approximately HK$359,850,000. As explained under note 3 set out in the Financial Effect, the decrease in net asset attributable to Shareholders is mainly due to the recognition of the excess of fair value of the Consideration over the decrease in carrying value of non-controlling interest in BB Jinhuangshan by the Group of approximately HK$520 million as at 31 December 2010 as a result of the Acquisition. Based on the above, the Acquisition is expected to have an immediate negative effect on the Enlarged Group’s net assets. As discussed above, the Acquisition is expected to have a positive effect on the Enlarged Group’s earnings. In the event that the Target Group can maintain its profitability in the future, the Acquisition may improve the Enlarged Group’s net assets in the long term.

5.3 Liquidity

According to the Pro Forma Financial Information, the Group (after taking into account the BCG Acquisition) has unaudited pro forma current assets and unaudited pro forma current liabilities of approximately HK$936,989,000 and HK$760,652,000 respectively, translating into a current ratio (current assets/current liabilities) of approximately 1.23 times. After pro forma adjustments for the Acquisition, the Enlarged Group would have unaudited pro forma current assets and unaudited pro forma current liabilities of approximately HK$886,989,000 and HK$760,723,000 respectively, translating into a current ratio of approximately 1.17 times. Based on the above, the Acquisition is expected to have an immediate negative effect on the Enlarged Group’s liquidity. However, a current ratio which is higher than 1 is still generally considered to be healthy as the current assets are supposed to be able to cover the current liabilities as they become due.

5.4 Gearing

As per the Pro Forma Financial Information, the Group (after taking into account the BCG Acquisition) has unaudited pro forma total debts of HK$396,740,000 (comprised of (i) current portion of obligations under finance leases of approximately HK$12,187,000; (ii) current portion of bank borrowings of approximately HK$353,307,000; (iii) obligations under finance leases (non-current portion) of approximately HK$6,524,000; and (iv) other payables of approximately HK$24,722,000) and unaudited pro forma total assets of approximately HK$1,893,590,000. Accordingly, the gearing ratio (total debts/total assets x 100%) is approximately 20.95%. After pro forma adjustments for the Acquisition, the Enlarged Group would have unaudited pro forma total debts of HK$976,740,000 (comprised of (i) current portion of

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LETTER FROM AMPLE CAPITAL

obligations under finance lease of approximately HK$12,187,000; (ii) current portion of bank borrowings of approximately HK$353,307,000; (iii) obligations under finance leases (non-current portion) of approximately HK$6,524,000; and (iv) other payables of approximately HK$604,722,000 (inclusive of the Promissory Note)) and unaudited pro forma total assets of approximately HK$1,843,590,000, which translates into a gearing ratio of approximately 52.98%. It is noted that the substantial increase in the Enlarged Group’s gearing ratio is attributable to the issue of the Promissory Note in the amount of HK$580,000,000. Having considered the reasons for the Acquisition as discussed in section 3 of this letter and the potential improvement to the Enlarged Group’s earnings as discussed above, we consider such increase in gearing to be acceptable.

It should be noted that the aforementioned analysis is for illustrative purpose only and does not purport to represent how the financial position of the Enlarged Group will be upon Acquisition Completion.

CONCLUSION

Having considered the above principal factors, we are of the opinion that the terms of the Acquisition (including the Consideration and the Promissory Note) are fair and reasonable and in the interest of the Company and the Shareholders as a whole. In addition, we consider that the Acquisition is on normal commercial terms and in the ordinary and usual course of business of the Group. Accordingly, we would recommend (i) the Independent Board Committee to advise the Independent Shareholders; and (ii) the Independent Shareholders, to vote in favor of the ordinary resolution(s) to approve the Acquisition at the EGM.

Yours faithfully, For and on behalf of Ample Capital Limited Kevin So Vice President

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Company for each of the three years ended 31 December, 2008, 2009 and 2010 are disclosed in the following documents which have been published on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.bcghk.cn):

annual report of the Company for the year ended 31 December 2008 published on 28 April 2009 (pages 29-96);
annual report of the Company for the year ended 31 December 2009 published on 29 April 2010 (pages 21-75); and
annual report of the Company for the year ended 31 December 2010 published on 27 April 2011 (page 24-84).

On 14 April 2011, the Group completed the BCG Acquisition in which the Group acquired the entire equity interest in BCG at a consideration of HK$2.4 billion which has been satisfied by the issuance of 480,000,000 shares of the Company at HK$5 each. BCG Group is principally engaged in the printing of cigarette packages and the manufacturing of laminated paper in the PRC. The aggregate of the remuneration payable to and benefits in kind receivable by the directors of BCG remain the same upon the completion of the BCG Acquisition. Details of the financial information of BCG Group and the pro forma financial information of the enlarged group upon the completion of BCG Acquisition are set out in the Appendices II and III on the BCG Circular.

2. MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

As at the Latest Practicable Date, the Group comprised the CT Group and the BCG Group.

(a) Management discussion and analysis of the CT Group

For the year ended 31 December 2010

Turnover

For the year ended 31 December 2010, turnover of the CT Group was approximately HK$370.0 million (2009: HK$362.8 million), representing a slight increase of approximately HK$7.2 million or 2.0% when compared with that of the previous year. During the year, the CT Group was principally engaged in the provision of printing services in Hong Kong and overseas markets. There was only one operating segment for the CT Group.

As a result of the continuous effort in exploring the European market, CT Group’s turnover in Europe increased by approximately 14.4% as compared with the previous year and accounted for approximately 72.5%

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FINANCIAL INFORMATION OF THE GROUP

(2009: 64.7%) of the CT Group’s total turnover for the year ended 31 December 2010. However, the increase in turnover generated from Europe was offset by the decrease in the sales to Asia market mainly because CT Shenzhen had scaled down its operation during the second half of the year.

Gross Profit

Gross profit of the CT Group decreased by approximately HK$17.6 million, or 19.3%, from approximately HK$91.4 million for the year ended in 31 December 2009 to approximately HK$73.8 million for the same period in 2010. In addition, the gross profit margin of the CT Group for the year ended in 31 December 2010 was approximately 19.9%, dropped by about 5.3% from 25.2% for the same period in 2009. Such deterioration was caused by the upsurge in raw material costs and direct manufacturing costs.

Other revenue and other income

Other revenue and other income of the CT Group was contributed mainly by the net proceeds gained from the disposal of scrap materials, sundry income and bank interest income, representing an increase of approximately HK$2.1 million when compared with year 2009.

Selling expenses

For the year ended 31 December 2010, the selling expenses of the CT Group was approximately HK$31.9 million (2009: HK$25.9 million), representing an increase of approximately HK$6.0 million or 23.2% when compared with that of the previous year. As a result of the global upsurge of shipping and the increase in requirement for urgent freight booking from our customers, the freight and transportation costs amounted to approximately HK$22.1 million for the year ended 31 December 2010, increased by approximately HK$7.6 million from the same period in 2009.

Administrative expenses

The administrative expenses of the CT Group for the year ended 31 December 2010 was approximately HK$33.9 million and decreased by approximately HK$1.7 million when compared to the same period in 2009. The major reason for the slight decrease in administrative expenses was the impairment losses of approximately HK$4.1 million incurred in 2009 due to the closing down of some of the customers suffering from the financial tsunami. Following the gradual recovery of the global economy, the impairment losses provided for the doubtful account receivables decreased dramatically. The effect of the aforementioned was partly offset by the increase in exchange loss of approximately HK$2.8 million arising from the appreciation of Renminbi against Hong Kong dollars during the year.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Finance costs

CT Group recorded a slight decrease in finance costs by approximately HK$1.0 million during the year ended 31 December 2010 when compared with the same period in 2009. The decrease was due to an overall decrease in interest bearing liabilities of the CT Group.

Profit for the period attributable to owners of the CT Group

For the year ended 31 December 2010, profit attributable to owners of the CT Group was approximately HK$7.7 million, representing a decrease of approximately HK$15.0 million when compared with the same period in 2009. Such significant profit contraction was caused by the substantial drop in profit margin and the net increase in operating expenses of the CT Group, partly offset by the decrease in administrative expenses of the CT Group.

No dividend was declared for the year.

Financial position and liquidity

CT Group generally finances its operations with internally generated resources and banking facilities. As at 31 December 2010, the CT Group had cash and cash equivalent amounted to approximately HK$75.6 million (2009: HK$56.3 million). The improvement in cash position was contributed by the increase in cash-flow generated from operation. Net current assets of the CT Group remained stable at approximately HK$182.2 million (2009: HK$158.9 million) at period end date.

As at 31 December 2010, the CT Group had interest-bearing bank loans of HK$36.6 million (2009: HK$39.8 million) which were repayable within one year and had interest-bearing obligations under finance leases of approximately HK$18.5 million (2009: HK$33.5 million), among which HK$12.0 million were repayable within one year. Carrying amount of property, plant and equipment and bank deposits pledged for securing these credit facilities amounted to approximately HK$46.5 million and HK$25.1 million respectively.

As at 31 December 2010, the CT Group’s gearing ratio was approximately 19.1% (2009: 26.3%) which was calculated on the basis of the amount of interest-bearing borrowings divided by shareholders’ equity. The improvement in the gearing ratio was mainly due to the repayment of the interest-bearing borrowings, especially the finance lease, during the year.

As at 31 December 2010, the CT Group had no capital commitment.

As at 31 December 2010, the CT Group did not provide any guarantees for any third party and had no significant contingent liabilities.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Material acquisitions and disposals

During the year, the CT Group had entered into a conditional sale and purchase agreement to acquire 100% equity interest in BCG from Mr. Tsoi Tak, the Chairman of the Board, non-executive Director and the controlling shareholder of the Company, at a consideration of HK$2.4 billion. The consideration had been satisfied by the issuance of 480,000,000 new shares of the Company at HK$5 each. Completion of the BCG Acquisition took place on 14 April 2011. Details of the BCG Acquisition are set out in the announcements of the Company dated 1 February 2011 and 14 April 2011 and the BCG Circular respectively.

Capital structure

During the year ended 31 December 2010, the CT Group’s operation was mainly financed by funds generated from its operation and borrowings. As at 31 December 2010, the borrowings were mainly denominated in HK$ and US$, while the cash and cash equivalents held by the CT Group were mainly denominated in HK$ and RMB. All of the CT Group’s borrowings were variable rate borrowings and no hedging has been employed by the CT Group during the year. The CT Group’s turnover was mainly denominated in US$, Pounds Sterling, Euros and HK$, while its costs and expenses were mainly denominated in US$, HK$ and RMB. As the majority portion of the CT Group’s assets, liabilities, revenues and payments during the year ended 31 December 2010 were denominated in either HK$ or US$, the Board considered that the risk exposure to foreign exchange rate fluctuations was not significant. CT Group did not have a formal hedging policy and has not entered into any material foreign currency exchange contracts or derivative transactions to hedge against its currency risks.

Human resources

As at 31 December 2010, the CT Group had a total of 42 full-time staff based in Hong Kong and the PRC. The CT Group’s remuneration packages were generally structured with reference to market terms and individual merits. The CT Group operated a defined contribution retirement benefits scheme under the Mandatory Provident Fund Schemes Ordinance for all of its employees in Hong Kong. Contributions were made based on a percentage of the employees’ basic salaries. The CT Group also made contributions to provident funds, elderly insurance, medical insurance, unemployment insurance and work-related injury insurance in accordance with appropriate laws and regulations in the PRC. The CT Group has also adopted a share option scheme to provide incentive or reward to eligible high-calibre employees and attract human resources that are valuable to the CT Group.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

For the year ended 31 December 2009

Turnover

For the year ended 31 December 2009, turnover of the CT Group was approximately HK$362.8 million (2008: HK$403.2 million), representing a decrease of approximately HK$40.4 million or 10.0% when compared with that of the previous year. Such fall in turnover for the year was mainly due to the impact of the financial crisis on the customers from the US and Europe. However, the recent development of CT Shenzhen had been bringing the CT Group extra income from the PRC market.

During the year, the CT Group was principally engaged in the provision of printing services in Hong Kong and overseas markets. There was only one operating segment for the CT Group. Due to the downturn of the global economy, a few customers had filed for bankruptcy during the year, whose sales in 2008 amounted to HK$24.6 million. Besides, existing customers placed their orders with more caution and the CT Group had adopted a more prudent approach when accepting orders from new customers. Therefore, turnover generated from existing customers and new customers had dropped HK$30.0 million and HK$22.9 million respectively when compared to that of 2008. In view of the declining overseas market, the management had put enormous effort in exploring the PRC market. As a result, the CT Group had successfully obtained sales amounted to HK$29.3 million from the PRC customers.

Gross Profit

For the year ended 31 December 2009, the CT Group attained a gross profit of approximately HK$91.4 million (2008: HK$99.1 million), which represented a decrease of approximately HK$7.7 million or 7.8% when compared with the previous year. Such reduction of gross profit was resulted from the downfall of sales. However, the gross profit margin had improved slightly to 25.2% (2008: 24.6%) by virtue of the higher profit margin products (28.0%) produced by CT Shenzhen.

Other revenue and other net income

The other revenue and other net income of the CT Group representing mainly the net proceeds from the sale of scrap materials and bank interest income. During the 12 months ended 31 December 2009, such income decreased by HK$2.3 million when compared with year 2008.

Selling expenses

Selling expenses incurred by the CT Group for the year ended 31 December 2009 of HK$25.9 million (2008: HK$29.6 million) had decreased by approximately 12.5% when compared to that of 2008. The major reason for the saving was that the largest selling expenses item, freight and transportation costs, was less consumed in line with the drop of sales as well as the global fall in fuel price. Therefore, approximately HK$3.4 million of the freight charges was scrimped.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Administrative expenses

Administrative expenses of the CT Group had increased by around HK$6.5 million for the year ended 31 December 2009 as compared to the previous year. The maintenance of status as a newly listed company after the Company’s listing on the Main Board of The Stock Exchange on 30 March 2009, gave rise to an extra HK$4.1 million increase in administrative expenses (mainly comprising the professional fees). In addition, CT Shenzhen commenced its operation during the year and thus, approximately HK$2.0 million of administrative expenses were incurred. Owing to the closing down of certain customers, an impairment loss of approximately HK$4.1 million was made to those doubtful account receivables. Apart from the aforementioned, the administrative expenses were kept at a reasonable level similar to previous year.

Finance costs

Finance costs of the CT Group decreased by approximately HK$3.7 million which was in line with the overall decrease in interest bearing borrowings.

Profit attributable to owners of the CT Group

As a result of the drop-off of the gross profit, other revenue and other income and together with the increase in administrative expenses, profit for the year attributable to owners of the CT Group was HK$22.7 million (2008: HK$31.8 million), representing a decrease of HK$9.1 million, despite the retrenchment of the selling expenses and finance costs.

No dividend was declared for the year.

Financial position and liquidity

CT Group generally finances its operations with internally generated resources and banking facilities provided by its bankers. As at 31 December 2009, the CT Group had net current assets of HK$161.7 million (2008: HK$110.6 million), while the CT Group’s cash and cash equivalents amounted to HK$56.3 million (2008: HK$14.5 million). The betterment of the cash position was mainly due to the funds raised from the Company’s public offering during the year.

As at 31 December 2009, the CT Group had interest-bearing bank loans of HK$39.8 million (2008: HK$76.2 million) of which HK$37.0 million were repayable within one year and had interest bearing obligations under finance leases of approximately HK$33.5 million (2008: HK$56.1 million) of which about HK$15.0 million were repayable within one year (2008: HK$17.9 million). Carrying amount of property, plant and equipment and bank deposits pledged for securing these credit facilities amounted to about HK$87.7 million.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

As at 31 December 2009, the CT Group’s gearing ratio represented by the amount of interest bearing borrowings divided by shareholders equity was 26.3% (2008: 63.5%). The sound improvement in the gearing ratio was mainly due to the significant increase in shareholders equity and decrease in the interest bearing borrowings.

As at 31 December 2009, the CT Group had capital commitment of HK$2.3 million in respect of acquisition of property, plant and equipment which had been contracted but not provided for by the CT Group.

As at 31 December 2009, the CT Group had no material contingent liabilities.

Material acquisitions or disposals

During the year ended 31 December 2009, the CT Group did not have any material acquisitions or disposals.

Capital structure

During the year ended 31 December 2009, the CT Group’s operation was mainly financed by funds generated from its operation and borrowings. As at 31 December 2009, the borrowings were mainly denominated in Hong Kong dollars, while the cash and cash equivalents held by the CT Group were mainly denominated in HK$ and RMB. All of the CT Group’s borrowings were variable rate borrowings and no hedging has been employed by the CT Group during the year.

The CT Group’s turnover was mainly denominated in US$, British pound, Euros, and HK$, while its costs and expenses were mainly denominated in US$, HK$ and RMB. Most of the CT Group’s assets, liabilities, revenues and payments were denominated in either HK$ or US$. Therefore, the CT Group considered that the risk exposure to foreign exchange rate fluctuations was minimal. The CT Group did not have a formal hedging policy and has not entered into any material foreign currency exchange contracts or derivative transactions to hedge against its currency risks.

Human resources

As at 31 December 2009, the CT Group had a total of 42 full-time staff based in Hong Kong and the PRC. The CT Group’s remuneration packages were generally structured with reference to market terms and individual merits. The CT Group operated a defined contribution retirement benefits scheme under the Mandatory Provident Fund Schemes Ordinance for all of its employees in Hong Kong. Contributions were made based on a percentage of the employees’ basic salaries. The CT Group also made contributions to provident funds, elderly insurance, medical insurance, unemployment insurance and work-related injury insurance in accordance with appropriate laws and regulations in the PRC. The CT Group has also adopted a share option scheme to provide incentive or reward to eligible persons for their contribution to the CT Group and/or enable the CT Group to recruit and retain high-calibre employees and attract human resources that are valuable to the CT Group.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

For the year ended 31 December 2008

Turnover

For the year ended 31 December 2008, turnover of the CT Group was approximately HK$403.2 million, representing a growth of approximately HK$67.8 million or 20.2% when compared with the previous financial year. The increase in turnover for the year was mainly due to the continuous market expansion and increase in customer base of the CT Group. During the year, the CT Group had one business segment, namely the printing of paper products, the operation of which was carried out in Hong Kong and overseas markets.

During the year, United Kingdom (“UK”) market remained as the biggest contributor to the CT Group’s turnover. Nonetheless, as a result of the marketing effort put in by the CT Group, turnover from the other parts of Europe increased significantly by 136.9%, representing an increase in its proportion to the CT Group’s total turnover from 8.3% in 2007 to 16.3% in 2008. The books printed by the CT Group were primarily leisure books including children’s books, travel books and cookery books. Turnover generated from the sales of case bound books, paperback books, spiral bound books, novelty books and other paper-related products accounted for approximately 49.4%, 16.1%, 16.1%, 14.4% and 4.0% respectively of the CT Group’s total turnover during the year.

Gross profit

The gross profit of the CT Group recorded was approximately HK$99.1 million for the year ended 31 December 2008, representing an increase of approximately 17.5% when compared with the previous financial year. However, the gross profit margin dropped slightly from approximately 25.2% in 2007 to approximately 24.6% in 2008 as a result of the appreciation of cost of sales. In particular, depreciation expense and rental expense increased as additional machineries were purchased by the CT Group and additional area was rented by the processing factory of the CT Group during the year.

Other revenue and other net income

For the year ended 31 December 2008, other revenue and other net income of the CT Group recorded a decrease of approximately 21.0% when compared with year 2007 and the amount mainly represented the sale of scrap materials and bank interest income.

Selling expenses

The selling expenses of the CT Group of approximately HK$29.6 million for the year ended 31 December 2008 had increased by approximately 1.9% as compared with year 2007. During the year, the CT Group increased its spending in several international marketing events for the promotion of products of the CT Group so as to increase its international market diversity. Freight and transportation costs of approximately HK$17.9 million, being the biggest selling expenses item, also experienced an increase of 12.7% from previous year.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Administrative expenses

Administrative expenses of the CT Group as compared to turnover of the CT Group had risen to 7.2% this year as the CT Group had employed more administrative staff. Another major cause of increase in administrative expenses was net exchange loss arising from the appreciation of Renminbi against Hong Kong dollars upon exchange of Hong Kong dollars into Renminbi for the payment of processing fees to the processing factory in the PRC. Administrative expenses were mainly comprised of staff salaries, net exchange loss, rental expenses, bank and remittance charges and insurance expenses.

Finance costs

The CT Group recorded a decrease in finance costs of about 6.5% when compared with previous year. The decrease represented a net effect of an increase in finance lease costs and a decrease in interest on bank loan, overdraft and other borrowings. The overall decrease was due to a general decrease in interest bearing liabilities of the CT Group.

Profit for the year attributable to equity holders of the CT Group

Despite a decrease in gross profit margin, and increases in selling and administrative expenses, profit for the year attributable to equity holders of the CT Group still recorded a growth to about HK$31.8 million. This was mainly attributable to the significant jump in sales of approximately 20.2% during the year.

No dividend was declared for the year.

Financial position and liquidity

As at 31 December 2008, the CT Group had cash and cash equivalent amounted to about HK$14.5 million. Net current assets of the CT Group grew substantially from last year’s about HK$53.1 million to over HK$110.6 million as at 31 December 2008.

As at 31 December 2008, the CT Group had interest bearing obligations under finance leases of approximately HK$56.1 million (of which about HK$17.9 million were repayable within one year), and outstanding secured interest bearing bank and other borrowings of approximately HK$76.2 million which were repayable within one year. Net book value of fixed assets, available-for-sale financial assets and fixed deposits pledged for securing these credit facilities amounted to about HK$109.2 million.

As at 31 December 2008, the CT Group’s net gearing ratio was 49.3% which was calculated on the basis of the amount of borrowings less cash and cash equivalents and pledged bank deposits divided by shareholders’ equity. The significant improvement in the net gearing ratio from last year’s 162.5% was partly due to the capitalisation of the balance due to a Director during the course of the reorganisation and partly due to the strengthening of net liquid

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

assets through the CT Group’s profit making operations. As at 31 December 2008, the CT Group had no material capital commitment. Save for the contingent liabilities in respect of certain unlimited corporate guarantees provided by the CT Group to a related company for bank borrowings, the CT Group had no material contingent liabilities as at 31 December 2008.

Material acquisitions or disposals

During the year ended 31 December 2008, the CT Group did not have any material acquisitions or disposals.

Capital structure

During the year ended 31 December 2008, the CT Group’s operation was mainly financed by funds generated from its operation and borrowings. As at 31 December 2008, the borrowings were mainly denominated in HK$ and US$, while the cash and cash equivalents held by the CT Group were mainly denominated in HK$ and RMB. All of the CT Group’s borrowings were variable rate borrowings and no hedging has been employed by the CT Group during the year.

The CT Group also held an available-for-sale financial asset during the year ended 31 December 2008, which was denominated in US dollars. As US$ were pegged with Hong Kong dollars during the year, no hedging in respect of the investment was considered necessary by the CT Group.

The CT Group’s turnover was mainly denominated in US$, Pounds Sterling, Euros, and HK$, while its costs and expenses were mainly denominated in US$, HK$ and RMB. As majority portion of the CT Group’s assets, liabilities, revenues and payments during the year were denominated in either HK$ or US$, the CT Group considered that the risk exposure to foreign exchange rate fluctuations was not significant. The CT Group did not have a formal hedging policy and has not entered into any material foreign currency exchange contracts or derivative transactions to hedge against its currency risks.

Details of the exposure of the CT Group on interest rate and exchange rate fluctuations are set out in note 4(a) to the combined financial statements.

Post balance sheet events

The subsidiaries comprising the CT Group at year end date underwent and fully completed the reorganization in preparation for the initial public offering. The listing exercise was completed on 30 March 2009 and net proceed of about HK$48.9 million was raised from the placing and public offer of 50,000,000 new shares of the Company to investors.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Human resources

As at 31 December 2008, the CT Group had a total of 42 full-time staff based in Hong Kong and the PRC. The CT Group’s remuneration packages are generally structured with reference to market terms and individual merits. The CT Group operated a defined contribution retirement benefits scheme under the Mandatory Provident Fund Schemes Ordinance for all of its employees in Hong Kong. Contributions were made based on a percentage of the employees’ basic salaries. The CT Group also made contributions to provident funds, elderly insurance, medical insurance, unemployment insurance and work-related injury insurance in accordance with appropriate laws and regulations in the PRC. The CT Group has also adopted a share option scheme to provide incentive or reward to eligible high-calibre employees and attract human resources that are valuable to the CT Group.

(b) Management discussion and analysis of the BCG Group

For the nine months ended 30 September 2010

Turnover

For the nine months ended 30 September 2010, the BCG Group recorded a turnover of approximately HK$769.3 million, representing a slight increase of approximately 1.6% as compared to that for the same period in 2009.

During the period, the BCG Group had two business segments, namely, (i) printing of cigarette packages; and (ii) manufacturing of laminated paper.

For the nine months ended 30 September 2010, the printing of cigarette packages segment recorded revenue and segmental profit of approximately HK$743.4 million and HK$282.2 million respectively, representing an increase of approximately 0.6% and 34.1% respectively as compared to the same period in 2009. The gross profit margin for the printing of cigarette packages increased from approximately 30.5% for the nine months ended 30 September 2009 to approximately 32.9% for the nine months ended 30 September 2010. The improvements in the segmental result and gross profit margin were mainly due to the implementation of cost control policies for the period.

For the nine months ended 30 September 2010, the manufacturing of laminated papers segment recorded revenue and segmental profit of approximately HK$25.9 million and HK$5.3 million respectively, representing an increase of approximately 42.3% and a turnaround from a segment loss position respectively as compare to the same period in 2009. The gross profit margin for the manufacturing of laminated papers increased from approximately 10.2% for the nine months ended 30 September 2009 to approximately 25.1% for the nine months ended 30 September 2010. The improvement in the segmental revenue, profit and gross margin were mainly due to the slight increase in demand in the segment and implementation of cost control policies.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Gross profit, other income and profit for the period attributable to owners of the BCG Group

As a result of the implementation of cost control policies, the BCG Group recorded a gross profit of approximately HK$251.0 million for the nine months ended 30 September 2010, representing an increase of approximately 10.4% as compared to the same period in 2009, while the gross profit margin reached approximately 32.6% for the nine months ended 30 September 2010, representing a further improvement in gross profit margin from approximately 30.0% in the same period in 2009. The BCG Group recorded other income of approximately HK$18.4 million, mainly comprising net exchange gain of approximately HK$5.8 million (mainly arising from the repayment of non-Renminbi denominated payables), write off of trade and other payables of approximately HK$3.6 million, interest income of approximately HK$2.8 million and rental income of approximately HK$2.4 million. The BCG Group recorded a profit attributable to its owners of approximately HK$223.3 million, representing an increase of approximately 55.8% or HK$80.0 million as compared to that for the nine months ended 30 September 2009 and net profit margin of approximately 29.0%, representing an increase of approximately 10.1% as compared to that for the same period in 2009. The increase in the profit and net profit margin of the BCG Group for the nine months ended 30 September 2010 when compared to that of 2009, were largely due to the increase in gross profit margin, the increase in share of profit of an associate of approximately HK$47.3 million, the implementation of cost control policies by the BCG Group which reduced the selling and distribution costs and administrative expenses by approximately HK$12.0 million and HK$17.0 million respectively and the increase in other income in relation to exchange gain of approximately HK$5.8 million, which was mainly due to the exchange gain recorded in the repayments of non-Renminbi denominated payables as a result of appreciation of RMB, being the functional currency of the BCG Group, against other currencies and write off of trade and other payables of HK$3.5 million respectively.

The performance of the associate of the BCG, being 常德金鵬印務有限公司 (Changde Goldroc Printing Co., Limited) (“ CD Goldroc* ”) which was also engaged in the printing of cigarette packages, remained strong for the nine months ended 30 September 2010, and CD Goldroc recorded revenue of approximately HK$1,023.9 million and net profit of approximately HK$321.0 million for the nine months ended 30 September 2010, representing a growth of approximately 39.4% and 78.3% respectively as compared to the same period in 2009. Notwithstanding the disposal of 13.85% equity interest in the associate by the BCG Group during the period, the BCG Group still recorded a share of result of this associate for the nine months ended 30 September 2010 of approximately HK$127.2 million, representing a growth of approximately 59.2% as compared to the same period in 2009.

Dividend amounted to approximately HK$461.0 million was declared for the period (nine months ended 30 September 2009: nil).

– I-12 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Selling and distribution expenses

For the nine months ended 30 September 2010, the selling and distribution expenses amounted to approximately HK$21.9 million representing approximately 2.8% of the turnover of the BCG Group. The increase trend of the selling and distribution expenses of the BCG Group was mainly attributable to the increase in focus on marketing to cope with the growth of the BCG Group’s turnover.

Administrative expenses

For the nine months ended 30 September 2010, the administrative expenses amounted to approximately HK$30.9 million, representing 4.0% of the turnover of the BCG Group and a decrease of approximately HK$17.0 million as compared to that for the same period in 2009. The decrease was mainly due to the staff bonus of approximately HK$8.6 million made for the nine months ended 30 September 2009, while no such staff bonus was made for the nine months ended 30 September 2010. Also, a net exchange loss of approximately HK$4.6 million was recorded for the nine months ended 30 September 2009, while net exchange gain was recorded for the nine months ended 30 September 2010.

Finance costs

For the nine months ended 30 September 2010, the finance costs of the BCG Group amounted to approximately HK$15.4 million. The interest expenses in respect of the bank borrowings accounted for more than 90% of the finance costs of the BCG Group while the remaining represented the finance lease charges.

Financial position and liquidity

The BCG Group generally finances its operations with internally generated resources and banking facilities. The BCG Group had cash balances increased from HK$97.4 million as at 31 December 2009 to approximately HK$179.4 million as at 30 September 2010. Net current assets of the BCG decreased from HK$127.7 million as at 31 December 2009 to HK$2.2 million as at 30 September 2010. The deterioration in net current position was mainly due to the decrease in trade and other receivables and the amount due from non-controlling shareholders and partly offset by the increase in bank and cash balances and decrease in trade and other payables.

– I-13 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

to the repayment of bank loans by the internal resources generated from the ordinary business of the BCG Group. The obligation under finance leases amounted to HK$0.2 million as at 30 September 2010 which remained the same as the obligation under finance leases as at 31 December 2009.

As at 30 September 2010, the bank borrowings of the BCG Group, including the finance leases, were secured by the pledge of bank deposits of approximately HK$19.7 million, property, plant and machinery of approximately HK$164.8 million, prepaid land lease payments of approximately HK$17.5 million, corporate guarantee given by the BCG, corporate guarantee given by subsidiaries and personal guarantee executed by a director.

The BCG Group’s gearing ratio increased from approximately 34.8% as at 31 December 2009 to approximately 44.0% as at 30 September 2010 as the BCG has declared a dividend of approximately HK$461.0 million during the period which reduced the shareholders’ equity of the BCG Group.

As at 30 September 2010, the BCG Group had capital commitments contracted by not provided for in respect of acquisition of property, plant and equipment of approximately HK$0.9 million.

During the period, the BCG Group issued a corporate guarantee of RMB260 million to a bank to secure banking facilities granted to a related company. The directors of the BCG Group do not consider it probable that a claim against the BCG Group of the aforesaid guarantee be made. The maximum liability of the BCG Group under the guarantee was the amount of bank loans drawn at that date of RMB260 million.

Material acquisitions and disposals

During the nine months ended 30 September 2010, the BCG Group did not have any material acquisitions or disposals except for the disposal of 13.85% equity interest in an associate, being CD Goldroc, to an independent third party, at a consideration of approximately RMB35.8 million which resulted in a loss on disposal of approximately HK$14.6 million.

Capital structure

There was no significant change in the capital structure of the BCG throughout the period. The BCG Group was mainly financed by internal resources and bank borrowings.

The BCG Group had exposure to foreign currency risk as most of its business transactions, assets and liabilities were principally denominated in RMB. The BCG Group did not have a foreign currency hedging policy in respect of foreign currency exposure.

– I-14 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Human resources

As at 30 September 2010, the BCG Group had over 1,100 full time employees in Hong Kong and the PRC. Total staffs costs (including directors’ emoluments) amounted to approximately HK$57.6 million for the year. All full time salaried employees were being paid on a monthly basis, plus a discretionary performance bonus. Factory workers were being remunerated based on a basic wages plus production incentive. In addition to salaries, the BCG Group provided staff benefits including medical insurance, contribution to staff’s provident fund and in-house training to staff.

For the year ended 31 December 2009

Turnover

The turnover of the BCG Group amounted to approximately HK$1,050.6 million in 2009, representing a decrease of approximately 6.9% as compared to that of 2008, which was mainly due to the scale down of the manufacturing of laminated papers segment in 2008 with a view to devoting more resources for the development of the printing of cigarette packages businesses.

During the year, the BCG Group had two business segments, namely, (i) printing of cigarette packages; and (ii) manufacturing of laminated paper.

For the year ended 31 December 2009, the printing of cigarette packages segment recorded revenue and segmental profit of approximately HK$1,025.4 million and HK$322.0 million respectively, representing an increase of approximately 7.7% and 11.5% respectively as compared to the same period in 2008. The gross profit margin for the printing of cigarette packages increased from approximately 29.3% for the year ended 31 December 2008 to approximately 31.9% for the year ended 31 December 2009. The improvements in the segmental revenue, result and gross profit margin were mainly due to expansion of existing customer base by developing new design for the customers despite the global financial downturn and the implementation of cost control policies.

For the year ended 31 December 2009, the manufacturing of laminated papers segment recorded revenue and segmental profit of approximately HK$25.3 million and HK$0.3 million respectively, representing a decrease of approximately 85.7% and 88.0% respectively as compared to the same period in 2008. The gross profit margin for the manufacturing of laminated papers increased from approximately 13.1% for the year ended 31 December 2008 to approximately 19.6% for the year ended 31 December 2009. The decrease in overall revenue and result of the segment were mainly due to the effect of the cessation of the operation of 常德金芙蓉鋁箔包裝有限公司 (Changde Jinfurong Aluminium Foil Packaging Materials Co., Ltd.) (“ CD Jinfurong* ”) in 2008. The improvement in gross profit margin was mainly attributable to the implementation of cost control policies and the decrease in cost of paper, being the major raw material of the segment, as a percentage of total cost for the year.

– I-15 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Gross profit, other income and profit attributable to the owners of the BCG Group

Despite the scaling down of the manufacturing of laminated papers segment of the BCG Group, the BCG Group recorded a gross profit of approximately HK$331.8 million for the year ended 31 December 2009, representing an increase of approximately 9.7% as compared to the year 2008, while the gross profit margin reached approximately 31.6% for the year ended 31 December 2009, representing a further improvement in gross profit margin from approximately 26.8% in the year 2008. The improvements in gross profit and gross profit margin were mainly attributable to the improvement in the financial performance of the printing of cigarette packages segment, the implementation of cost control policies and the scale down of the manufacturing of laminated paper segment which was less profitable as compared to the printing of cigarette packages segment of the BCG Group. The BCG Group recorded other income of approximately HK$7.8 million, mainly attributable to the gain on sales of scrapped materials of approximately HK$3.3 million and rental income of approximately HK$2.9 million. The BCG Group recorded a profit attributable to its owners of approximately HK$231.7 million, representing a decrease of approximately 11.4% or HK$29.8 million as compared to that for the year ended 31 December 2008 and net profit margin of approximately 22.1%, representing a slight drop of approximately 1.1% as compared to that in 2008. The decrease in the profit of the BCG Group for the year ended 31 December 2009 when compared to that of 2008, was largely due to other income recorded for the year 2008 in relation to exchange gain, gain on sales of paper and gain on de-registration of a subsidiary of the BCG Group (being CD Jinfurong) of approximately HK$25.6 million, HK$14.2 million and HK$10.2 million respectively, which were not recorded in 2009. Despite the global financial downturn, which spanned over fourth quarter of 2008 and whole year of 2009, the business of the BCG Group had not been materially adversely affected.

The performance of the associate of the BCG, being CD Goldroc which was also engaged in the printing of cigarette packages, remained strong for the year ended 31 December 2009, and CD Goldroc recorded revenue of approximately HK$1,072.0 million for the year ended 31 December 2009, representing a slight decrease of approximately 2.7% as compared to the same period in 2008. Despite the decrease in revenue of the associate of the BCG Group, the net profit of the associate increased by approximately 7.0% as compared to the year ended 31 December 2008 and reached approximately HK$255.2 million for the year ended 31 December 2009, and the share of result of this associate by the BCG Group for the year ended 31 December 2009 increased to approximately HK$115.2 million, representing an increase of approximately 6.3% as compared to that for the year ended 31 December 2008.

No dividend was declared for the year (year ended 31 December 2008: nil).

– I-16 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Selling and distribution expenses

For the year ended 31 December 2009, the selling and distribution expenses amounted to approximately HK$38.3 million representing approximately 3.6% of the turnover of the BCG Group. The increase of the selling and distribution expenses of the BCG Group was mainly attributable to the increase in focus on marketing to cope with the growth of the BCG Group’s turnover.

Administrative expenses

For the year ended 31 December 2009, the administrative expenses amounted to approximately HK$60.7 million, representing 5.8% of the turnover of the BCG Group and an increase of approximately HK$11.2 million as compared to that for the year in 2008. The increase was mainly attributable to the staff bonus of approximately HK$8.6 million during the year in 2009.

Finance costs

For the year ended 31 December 2009, the finance costs of the BCG Group amounted to approximately HK$19.4 million. The interest expenses in respect of the bank borrowings accounted for more than 90% of the finance costs of the BCG Group while the remaining represented the finance lease charges.

Financial position and liquidity

The BCG Group generally finances its operations with internally generated resources and banking facilities. The BCG Group had cash balances decreased from approximately HK$155.3 million as at 31 December 2008 to approximately HK$97.4 million as at 31 December 2009. Net current position of the BCG improved from net current deficit of approximately HK$97.7 million as at 31 December 2008 to net current assets of approximately HK$127.8 million as at 31 December 2009. The improvement in net current position was mainly due to the repayment of loan to the ultimate holding company of BCG Group, increase in trade and other receivables and the amount due from non-controlling shareholders and partly offset by the increase in trade and other payables.

The BCG Group’s borrowing and banking facilities mainly comprised bank loans and obligation under finance leases. The bank loans of the BCG Group decreased from approximately HK$357.9 million as at 31 December 2008 to approximately HK$327.3 million as at 31 December 2009. The majority of the bank loans of the BCG Group were secured bank loans. The decrease in the outstanding balance of the bank loans during the period was mainly due to the repayment of bank loans by the internal resources generated from the ordinary business of the BCG Group. The obligation under finance leases decreased from approximately HK9.2 million as at 31 December 2008 to

– I-17 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

approximately HK$0.2 million as at 31 December 2009. The decrease in the obligation under finance leases during the period was mainly due to the repayment of the facilities by the internal resources generated from the ordinary business of the BCG Group.

As at 31 December 2009, the bank borrowings of the BCG Group, including the finance leases, were secured by the pledge of bank deposits of approximately HK$45.2 million, pledge of property, plant and machinery of approximately HK$146.5 million, prepaid land lease payments of approximately HK$17.4 million, corporate guarantee given by the BCG, corporate guarantee given by ultimate holding company, corporate guarantee given by subsidiaries and personal guarantee executed by a director.

The BCG Group’s gearing ratio improved from approximately 52.8% as at 31 December 2008 to approximately 34.8% as at 31 December 2009. The improvement was mainly due to the increase in shareholders’ equity as a result of the strong financial performance of the BCG Group during the year ended 31 December 2009.

As at 31 December 2009, the BCG Group had capital commitments contracted but not provided for in respect of acquisition of property, plant and equipment of approximately HK$23.1 million.

As at 31 December 2009, the BCG Group did not provide any guarantees for any third party and had no significant contingent liabilities.

Material acquisitions and disposals

During the year, the BCG Group did not have any material acquisitions or disposals.

Capital structure

There was no significant change in the capital structure of the BCG throughout the year. The BCG Group was mainly financed by internal resources and bank borrowings.

Human resources

As at 31 December 2009, the BCG Group had over 1,200 full time employees in Hong Kong and the PRC. Total staffs costs (including directors’ emoluments) amounted to approximately HK$87.4 million for the year. All full time salaried employees were being paid on a monthly basis, plus a

– I-18 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

discretionary performance bonus. Factory workers were being remunerated based on a basic wages plus production incentive. In addition to salaries, the BCG Group provided staff benefits including medical insurance, contribution to staff’s provident fund and in-house training to staff.

For the year ended 31 December 2008

Turnover

The BCG Group’s turnover increased from approximately HK$968.8 million in 2007 to approximately HK$1,129.0 million in 2008, representing an increase of approximately 16.5%, which was mainly due to the increase in demand and expansion in the customer base.

During the year, the BCG Group had two business segments, namely, (i) printing of cigarette packages; and (ii) manufacturing of laminated paper.

For the year ended 31 December 2008, the printing of cigarette packages segment recorded revenue and segmental profit of approximately HK$952.2 million and HK$288.8 million respectively, representing an increase of approximately 36.2% and 40.7% respectively as compared to the same period in 2007. The gross profit margin for the printing of cigarette packages also increased from approximately 27.7% for the year ended 31 December 2007 to approximately 29.3% for the year ended 31 December 2008. The improvement in the segmental revenue, result and gross profit margin were mainly due to increase in demand, the expansion of customer base and implementation of cost control policies of the BCG Group.

For the year ended 31 December 2008, the manufacturing of laminated papers segment recorded revenue and segmental profit of approximately HK$176.8 million and HK$2.5 million respectively, representing a decrease of approximately 34.4% and 90.0% respectively as compared to the same period in 2007. The gross profit margin for the manufacturing of laminated papers slightly dropped from approximately 14.2% for the year ended 31 December 2007 to approximately 13.1% for the year ended 31 December 2008. During the year, the BCG Group had decided not to renew the joint venture contract of CD Jinfurong, being one of the two subsidiaries of the BCG Group engaging in the manufacturing of laminated papers with a view to devoting more resources for the development of the printing of cigarette packages businesses of the BCG Group. The significant decrease in the segmental revenue and result was mainly due to the cessation of the operation of CD Jinfurong.

Gross profit, other income and profit attributable to owners of the BCG Group

The BCG Group recorded a gross profit of approximately HK$302.5 million for the year ended 31 December 2008, representing an increase of approximately 30.7% as compared to the year 2007, while the gross profit margin reached approximately 26.8% for the year ended 31 December 2008,

– I-19 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

representing a further improvement in gross profit margin from approximately 23.9% in the year 2007. The improvements in both gross profit and gross profit margin were mainly attributable to the continuous improvement in the financial performance of the printing of cigarette packages segment, the implementation of cost control policies and the scale down of the manufacturing of laminated paper segment which was less profitable as compared to the printing of cigarette packages segment of the BCG Group. The BCG Group recorded other income of approximately HK$63.7 million, mainly comprising net exchange gain of approximately HK$25.6 million (mainly arising from the repayment of non-Renminbi denominated payables), gain on sales of paper of approximately HK$14.1 million, gain on de-registration of a subsidiary, which was engaged in the manufacturing of laminated papers, of approximately HK$10.2 million and interest income of approximately HK$8.5 million. The BCG Group recorded a profit attributable to its owners of approximately HK$261.5 million, representing an increase of approximately 21.5% or HK$46.2 million as compared to that for the year ended 31 December 2007. The net profit margin slightly improved from approximately 22.2% for the year ended 31 December 2007 to approximately 23.2% for the year ended 31 December 2008. The increase in profit attributable to the owners of the BCG and improvement in net profit margin were mainly attributable to the increase in gross profit of approximately HK$71.0 million as a result of the boost in revenue of the BCG Group, improvement in gross margin, increase in other income of approximately HK$16.1 million (which was mainly attributable to the increase in exchange gain, principally arising from the repayment of non-Renminbi denominated payables, of approximately HK$5.3 million, increase in gain on sales of paper of approximately HK$2.3 million and gain on de-registration of a subsidiary of the BCG Group, being CD Jinfurong, of approximately HK$10.2 million) and increase in share of profit of an associate of approximately HK$22.1 million. For the same period in 2007, the BCG Group recorded an excess of fair value of net assets acquired over the cost of acquisition of a subsidiary of approximately HK$42.1 million, while no such item was recorded by the BCG Group for the year ended 31 December 2008.

The performance of the associate of the BCG, being CD Goldroc which was also engaged in the printing of cigarette packages, further improved for the year ended 31 December 2008, and CD Goldroc recorded revenue of approximately HK$1,102.0 million and net profit of approximately HK$238.6 million for the year ended 31 December 2008, representing an increase of approximately 20.7% and 26.1% respectively as compared to the same period in 2007. As a result of the improvement in revenue of the associate of the BCG Group, the share of result of this associate by the BCG Group for the year ended 31 December 2008 increased to approximately HK$108.4 million, representing an increase of approximately 25.6% as compared to that for the year ended 31 December 2007.

No dividend was declared for the year (for year ended 31 December 2007: HK$501.2 million).

– I-20 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Selling and distribution expenses

For the year ended 31 December 2008, the selling and distribution expenses amounted to approximately HK$19.5 million representing approximately 1.7% of the turnover of the BCG Group. The increase of the selling and distribution expenses of the BCG Group was mainly attributable to the increase in focus on marketing to cope with the growth of the BCG Group’s turnover.

Administrative expenses

For the year ended 31 December 2008, the administrative expenses amounted to approximately HK$49.5 million, representing 4.4% of the turnover of the BCG Group and remained stable compared to the administrative expenses in 2007.

Finance costs

For the year ended 31 December 2008, the finance costs of the BCG Group amounted to approximately HK$32.8 million. The interest expenses in respect of the bank borrowings accounted for more than 90% of the finance costs of the BCG Group while the remaining represented the finance lease charges.

Financial position and liquidity

The BCG Group generally finances its operations with internally generated resources and banking facilities. The BCG Group had cash balances increased from approximately HK$91.4 million as at 31 December 2007 to approximately HK$155.3 million as at 31 December 2008. Net current position of the BCG improved from net current deficit of approximately HK$267.0 million as at 31 December 2007 to net current deficit of approximately HK$97.7 million as at 31 December 2008. The improvement in net current position was mainly due to the repayments of loans to a director and an associate of BCG Group and partly offset by the increase in trade and other payables and bank and cash balances.

The BCG Group’s borrowing and banking facilities mainly comprised bank loans and obligation under finance leases. The bank loans of the BCG Group decreased from approximately HK$368.6 million as at 31 December 2007 to approximately HK$357.9 million as at 31 December 2008. The majority of the bank loans of the BCG Group were secured bank loans. The decrease in the outstanding balance of the bank loans during the period was mainly due to the repayment of bank loans by the internal resources generated from the ordinary business of the BCG Group. The obligation under finance leases decreased from approximately HK$19.2 million as at 31 December 2007 to approximately HK$9.2 million as at 31 December 2008. The decrease in the obligation under finance leases during the period was mainly due to the repayment of the facilities by the internal resources generated from the ordinary business of the BCG Group.

– I-21 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

As at 31 December 2008, the bank borrowings of the BCG Group, including the finance leases, were secured by the pledge of bank deposits of approximately HK$72.5 million, pledge of property, plant and machinery of approximately HK$225.8 million, prepaid land lease payments of approximately HK$11.6 million, corporate guarantee given by ultimate holding company, corporate guarantee given by a related company, corporate guarantee given by an associated company, corporate guarantee given by subsidiaries, personal guarantees executed by a director and his family members and properties held by a director.

The BCG Group’s gearing ratio improved from approximately 83.4% as at 31 December 2007 to approximately 52.8% as at 31 December 2008. The improvement was mainly due to the increase in shareholders’ equity as a result of the strong financial performance of the BCG Group during the year ended 31 December 2008.

As at 31 December 2008, the BCG Group had capital commitments contracted but not provided for in respect of acquisition of property, plant and equipment of approximately HK$35.3 million.

As at 31 December 2008, the BCG Group did not provide any guarantees for any third party and had no significant contingent liabilities.

Material acquisitions and disposals

During the year, the BCG Group did not have any material acquisitions or disposals except for the de-registration of a subsidiary which was engaged in the manufacturing of laminated paper. The de-registration of this subsidiary was due to the expiration of the term of the relevant joint venture agreement and the management of the BCG Group decided to concentrate on printing of cigarette packaging business for more efficient resource allocation of the BCG Group, and, accordingly, decided not to renew the joint venture agreement. A gain on de-registration of this subsidiary of the BCG Group (being CD Jinfurong) of approximately HK$10.2 million was recorded for the year ended 31 December 2008.

Capital structure

There was no significant change in the capital structure of the BCG throughout the year. The BCG Group was mainly financed by internal resources and bank borrowings.

– I-22 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Human resources

As at 31 December 2008, the BCG Group had over 1,200 full time employees in Hong Kong and the PRC. Total staffs costs (including directors’ emoluments) amounted to approximately HK$83.3 million for the year. All full time salaried employees were being paid on a monthly basis, plus a discretionary performance bonus. Factory workers were being remunerated based on a basic wages plus production incentive. In addition to salaries, the BCG Group provided staff benefits including medical insurance, contribution to staff’s provident fund and in-house training to staff.

For the year ended 31 December 2007

Turnover

For the year ended 31 December 2007, the BCG Group recorded a turnover of approximately HK$968.8 million.

During the year, the BCG Group had two business segments, namely, (i) printing of cigarette packages; and (ii) manufacturing of laminated paper.

For the year ended 31 December 2007, the printing of cigarette packages segment recorded revenue and segmental profit of approximately HK$699.1 million and HK$205.3 million respectively and a gross profit margin for the printing of cigarette packages of approximately 27.7%.

For the year ended 31 December 2007, the manufacturing of laminated papers segment recorded revenue and segmental profit of approximately HK$269.7 million and HK$25.5 million respectively and a gross margin for the manufacturing of laminated papers of approximately 14.2%.

Gross profit, other income and profit attributable to owners of the BCG Group

The gross profit of the BCG Group amounted to approximately HK$231.5 million for the year ended 31 December 2007 with gross profit margin of approximately 23.9%. The BCG Group recorded other income of approximately HK$47.6 million, mainly comprising net exchange gain of approximately HK$20.3 million (mainly arising from the repayment of non-Renminbi denominated payables), gain on sales of paper of approximately HK$11.8 million and interest income of approximately HK$4.6 million. The BCG Group recorded a profit attributable to its owners of approximately HK$215.3 million (representing a net profit margin of approximately 22.2%) which included an excess of fair value of net assets acquired over the cost of acquisition of a subsidiary amounted to approximately HK$42.1 million for the year ended 31 December 2007.

– I-23 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The performance of the associate of the BCG, being CD Goldroc which was also engaged in the printing of cigarette packages, remained satisfactory, and CD Goldroc recorded revenue of approximately HK$912.7 million and net profit of approximately HK$189.2 million for the year ended 31 December 2007. The share of result of such associate by the BCG Group for the year ended 31 December 2007 amounted to approximately HK$86.3 million.

Dividend amounted to approximately HK$501.2 million was declared for the year.

Selling and distribution expenses

For the year ended 31 December 2007, the selling and distribution expenses amounted to approximately HK$15.6 million representing approximately 1.6% of the turnover of the BCG Group.

Administrative expenses

For the year ended 31 December 2007, the administrative expenses amounted to approximately HK$51.1 million, representing 5.3% of the turnover of the BCG Group.

Finance costs

For the year ended 31 December 2007, the finance costs of the BCG Group amounted to approximately HK$33.3 million. The interest expenses in respect of the bank borrowings accounted for more than 90% of the finance costs of the BCG Group while the remaining represented the finance lease charges.

Financial position and liquidity

The BCG Group generally finances its operations with internally generated resources and banking facilities. As at 31 December 2007, the BCG Group had cash balances amounted to approximately HK$91.4 million and net current deficit amounted to approximately HK$267.0 million.

The BCG Group’s borrowing and banking facilities mainly comprised bank loans, bank overdrafts and obligation under finance leases. The bank loans of the BCG Group amounted to approximately HK$368.6 million as at 31 December 2007. The majority of the bank loans of the BCG Group were secured bank loans. The obligation under finance leases amounted to approximately HK19.2 million as at 31 December 2007. The BCG Group had bank overdraft o approximately HK$0.1 million as at 31 December 2007.

As at 31 December 2007, the bank borrowings of the BCG Group, including the finance leases, were secured by the pledge of bank deposits of approximately HK$66.1 million, pledge of property, plant and machinery of

– I-24 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

approximately HK$45.7 million, corporate guarantee given by a related company, corporate guarantee given by an associated company, corporate guarantee given by subsidiaries, personal guarantees executed by a director and his family members and properties held by a director.

The BCG Group’s gearing ratio was approximately 83.4% as at 31 December 2007. As at 31 December 2007, the BCG Group had capital commitments contracted but not provided for in respect of acquisition of property, plant and equipment of approximately HK$1.1 million.

As at 31 December 2007, the BCG Group did not provide any guarantees for any third party and had no significant contingent liabilities.

Material acquisitions and disposals

On 22 June 2007, the BCG disposed of CT Printing Limited to Mr. Tsoi, who is a director of the BCG, at a consideration of HK$10,000. On 30 September 2007, the BCG disposed of Shenzhen Yuen Cheong Hong Trading Co., Ltd. to a related party, at a consideration of approximately HK$2,308,000. On 30 September 2007, the BCG disposed of Hunan Yingkun Printing Ink & Chemicals Co., Ltd to an independent third party at a consideration of RMB8,400,000. The BCG had not consolidated the results of the aforesaid subsidiaries and the carrying amount of CT Printing Limited, Shenzhen Yuen Cheong Hong Trading Co., Ltd. and Hunan Yingkun Printing Ink & Chemicals Co., Ltd. amounted to HK$10,000, HK$1,429,000 and RMB8,400,000 respectively, resulting in no gain or loss on disposal of CT Printing Limited and Hunan Yingkun Printing Ink & Chemicals Co., Ltd., while a gain on disposal of approximately HK$879,000 for the disposal of Shenzhen Yuen Cheong Hong Trading Co., Ltd.

On 8 June 2007, the BCG Group acquired the entire interest in Union Virtue Limited from a related party at a consideration of HK$8 and an excess of fair value of net assets acquired over the cost of acquisition of Union Virtue Limited of approximately HK$42.1 million was recorded as a result of the acquisition. Union Virtue Limited is an investment holding company and its only asset is 6% equity interests in Brilliant Circle Printing & Packaging Limited, a subsidiary of the BCG. The BCG Group had also acquired additional 4.75% equity interest in Brilliant Circle Printing & Packaging Limited on 26 June 2007 at a consideration of US$9.6 million and goodwill of approximately HK$41.6 million was aroused as a result of the acquisition.

Capital structure

There was no significant change in the capital structure of the BCG throughout the year. The BCG Group was mainly financed by internal resources and bank borrowings.

– I-25 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Human resources

As at 31 December 2007, the BCG Group had over 1,400 full time employees in Hong Kong and the PRC. Total staffs costs (including directors’ emoluments) amounted to approximately HK$67.2 million for the year. All full time salaried employees were being paid on a monthly basis, plus a discretionary performance bonus. Factory workers were being remunerated based on a basic wages plus production incentive. In addition to salaries, the BCG Group provided staff benefits including medical insurance, contribution to staff’s provident fund and in-house training to staff.

3. MATERIAL ADVERSE CHANGE

Save for the transactions contemplated under the Acquisition Agreement and the legal proceedings against a subsidiary of the Company as disclosed under the paragraph headed “Litigation” in Appendix IV to this circular, as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2010, the date to which the latest audited consolidated financial statements of the Group were made up.

– I-26 –

APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

1. FINANCIAL INFORMATION OF THE TARGET GROUP

(a) Accountants’ report on the Target Group

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, from the independent reporting accountants, RSM Nelson Wheeler, Certified Public Accountants, Hong Kong.

中瑞岳華（香港）會計師事務所

29th Floor Caroline Centre Lee Gardens Two 28 Yun Ping Road Hong Kong

24 June 2011

The Board of Directors Brilliant Circle Holdings International Limited (Formerly known as CT Holdings (International) Limited)

Dear Sirs,

We set out below our report on the financial information (the “Financial Information”) of Champion League Investment Holdings Limited (“Champion League”) and its subsidiary (hereinafter collectively referred to as the “Champion League Group”) for the period from 1 December 2010 (date of incorporation) to 31 December 2010 (the “Relevant Period”) for inclusion in the circular dated 24 June 2011 issued by Brilliant Circle Holdings International Limited (the “Company”) in connection with the proposed acquisition of the remaining equity interest in an indirectly non-wholly owned subsidiary of the Company (the “Circular”).

Champion League was incorporated on 1 December 2010 in the British Virgin Islands (the “BVI”) with limited liabilities and act as an investment holding company. As at the date of this report, Champion League has the following wholly-owned subsidiary:

Name of	Place and date	Issued and fully	Principal
subsidiary	of incorporation	paid capital	activities
Sanbond	Hong Kong	100 ordinary	Investment
Investment	3 November	shares of	holding
Limited	2010	HK$1 each
(“Sanbond”)

Champion League and its subsidiary has adopted 31 December as the financial year end date.

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No statutory financial statements of Champion League and Sanbond have been prepared since their date of incorporation as they were newly incorporated and have not been involved in any significant business transactions since their incorporation.

For the purpose of this report, the sole director of Champion League has prepared the consolidated financial statements of the Champion League Group for the Relevant Period (the “Underlying Financial Statements”) in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

For the purpose of this report, we have carried out independent audit procedures we consider necessary in respect of the Underlying Financial Statements for the Relevant Period in accordance with Hong Kong Standards on Auditing issued by the HKICPA and examined the Underlying Financial Statements in accordance with Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA.

The Financial Information has been prepared from the Underlying Financial Statements. No adjustments were considered necessary for the purpose of preparing our report for inclusion in the Circular.

The sole director of Champion League is responsible for the preparation of the Underlying Financial Statements. The sole director of Champion League is responsible for the contents of the Circular in which this report is included. It is our responsibility to compile the Financial Information set out in this report from the Underlying Financial Statements, to form an independent opinion on the Financial Information and to report our opinion to you.

In our opinion, for the purpose of this report, the Financial Information gives a true and fair view of the state of affairs of Champion League and the Champion League Group as at 31 December 2010 and of the Champion League Group’s results for the Relevant Period.

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FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Note Turnover 4 Administrative expenses Loss before tax 6 Income tax expense 7 Loss for the period and total comprehensive income for the period	Period from 1/12/2010 (date of incorporation) to 31/12/2010 HK$ – (71,486) (71,486) – (71,486)

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B. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note Total assets Capital and reserves Share capital 8 Reserves Total equity Current liabilities Due to a director 9 Total liabilities Total equity and liabilities Net current liabilities Total assets less current liabilities	As at 31/12/2010 HK$ – 780 (71,486) (70,706) 70,706 70,706 – (70,706) (70,706)

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C. STATEMENT OF FINANCIAL POSITION

Note Non-current assets Investment in a subsidiary Capital and reserves Share capital 8 Reserves Total equity Current liabilities Due to a director 9 Total liabilities Total equity and liabilities Net current liabilities Total assets less current liabilities	As at 31/12/2010 HK$ 100 780 (14,339) (13,559) 13,659 13,659 100 (13,659) (13,559)

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D. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Issue of shares Total comprehensive income for the period Changes in equity for the period At 31 December 2010	Share capital HK$ 780 –	Accumulated losses HK$ – (71,486)	Total equity HK$ 780 (71,486) (70,706) (70,706)
	780	(71,486)	(70,706
	780	(71,486)

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APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

E. NOTES TO FINANCIAL INFORMATION

1. GENERAL INFORMATION

Champion League was incorporated in the British Virgin Islands as a limited liability company. The address of its registered office is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

Champion League acted as an investment holding company. In the opinion of the sole director, Madam Ye Honglian is the ultimate controlling party of Champion League.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The Financial Information has been prepared in accordance with HKFRSs and accounting principles generally accepted in Hong Kong. HKFRSs comprise Hong Kong Financial Reporting Standards (“HKFRS”); Hong Kong Accounting Standards; and Interpretations. In addition, the Financial Information includes applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and by the Hong Kong Companies Ordinance.

The Champion League Group does not maintain any bank accounts and also did not incur any cash and cash equivalents transactions during the Relevant Period. Hence no consolidated statement of cash flows was prepared.

The Financial Information has been prepared under the historical cost convention.

For the purpose of preparing and presentating Financial Information of the Relevant Period, the Champion League Group has adopted all the applicable HKFRSs which are effective for accounting periods beginning on or after 1 December 2010.

The Champion League Group has not applied the new HKFRSs that have been issued but are not yet effective. The Champion League Group has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs would have a material impact on its results of operations and financial position.

The preparation of Financial Information in conformity with HKFRSs requires the use of certain key assumptions and estimates. It also requires the sole director to exercise its judgements in the process of applying the accounting policies.

The significant accounting policies applied in the preparation of the Financial Information are set out below.

(b) Consolidation

The Financial Information include the financial statements of Champion League and its subsidiary made up to 31 December. Subsidiaries are entities over which the Champion League Group has control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Champion League Group has control.

Subsidiaries are consolidated from the date on which control is transferred to the Champion League Group. They are de-consolidated from the date the control ceases.

Intragroup transactions, balances and unrealised profits are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset

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transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Champion League Group.

In Champion League’s statement of financial position, the investment in subsidiaries are stated at cost less allowance for impairment losses. The results of subsidiary are accounted for by Champion League on the basis of dividends received and receivable.

(c) Foreign currency translation

(i) Functional and presentation currency

Items included in the Financial Information are measured using the currency of the primary economic environment in which Champion League operates (the “functional currency”). The Financial Information is presented in Hong Kong dollars (“HK$”), which is Champion League’s presentation currency and functional currency.

(ii) Transactions and balances in each entity’s financial statements

Transactions in foreign currencies are translated into the functional currency on initial recognition using the exchange rates prevailing on the transaction dates. Monetary assets and liabilities in foreign currencies are translated at the exchange rates at the end of each reporting period. Gains and losses resulting from this translation policy are recognised in profit or loss.

Non-monetary items that are measured at fair values in foreign currencies are translated using the exchange rates at the dates when the fair values are determined.

When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that gain or loss is recognised in other comprehensive income. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

(d) Recognition and derecognition of financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when the Champion League Group becomes a party to the contractual provisions of the instruments.

Financial assets are derecognised when the contractual rights to receive cash flows from the assets expire; the Champion League Group transfers substantially all the risks and rewards of ownership of the assets; or the Champion League Group neither transfers nor retains substantially all the risks and rewards of ownership of the assets but has not retained control on the 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 in other comprehensive income is recognised in profit or loss.

Financial liabilities are derecognised 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 is recognised in profit or loss.

(e) Financial liabilities and equity instruments

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

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equity instrument under HKFRSs. An equity instrument is any contract that evidences a residual interest in the assets of the Champion League Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out in (f) and (g) below.

(f)

Other payables

Other payables are stated initially at their fair value and subsequently measured at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

(g)

Equity instruments

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

(h) Taxation

Income tax represents the sum of the current tax and deferred tax.

The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit recognised in profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Champion League Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Financial Information and the corresponding tax bases used in the computation of taxable profit. 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, unused tax losses or unused tax credits 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.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 substantively enacted by the end of the reporting period. Deferred tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the deferred tax is also recognised in other comprehensive income or directly in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Champion League Group intends to settle its current tax assets and liabilities on a net basis.

(i)

Related parties

A party is related to the Champion League Group if:

(i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control with, the Champion League Group; has

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

an interest in the Champion League Group that gives it significant influence over the Champion League Group; or has joint control over the Champion League Group;

(ii) the party is an associate;
(iii) the party is a joint venture;
(iv) the party is a member of the key management personnel of Champion League or its parent;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or
(vii) the party is a post-employment benefit plan for the benefit of employees of the Champion League Group, or of any entity that is a related party of the Champion League Group.

(j)

Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Champion League Group has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.

(k)

Events after the reporting period

Events after the reporting period that provide additional information about the Champion League Group’s position at the end of the reporting period or those that indicate the going concern assumption is not appropriate are adjusting events and are reflected in the Financial Information. Events after the reporting period that are not adjusting events are disclosed in the notes to the Financial Information when material.

3. FINANCIAL RISK MANAGEMENT

The Champion League Group’s activities expose it to a variety of financial risks: foreign currency risk, liquidity risk and interest rate risk. The Champion League Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Champion League Group’s financial performance.

(a) Foreign currency risk

The Champion League Group has minimal exposure to foreign currency risk as most of its business transactions, assets and liabilities are principally denominated in the functional currencies of the entities of the Champion League Group.

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(b) Liquidity risk

The Champion League Group’s policy is to regularly monitor current and expected liquidity requirements to ensure that there is sufficient financial support from a director to meet its liquidity requirements in the short and longer term.

The maturity analysis of the Champion League Group’s financial liabilities is as follows:

Due to a director (c) Categories of financial instruments Financial liabilities Financial liabilities measured at amortised cost	Less than 1 year HK$ 70,706

	HK$ 70,706

(d) Fair values

The carrying amounts of the Champion League Group’s financial liabilities as reflected in the statements of financial position approximate its respective fair value.

4. TURNOVER

The Champion League Group has no turnover during the Relevant Period.

5. SEGMENT INFORMATION

The Champion League Group was engaged in investment holding only and no revenue was generated during the Relevant Period. Accordingly, no analysis of the Champion League Group’s segment information is disclosed.

6. LOSS BEFORE TAX

The Champion League Group’s loss before tax is stated after charging the following:

		HK$
Auditor’s	remuneration	–
Director’s	emoluments	–

7. INCOME TAX EXPENSE

No provision for Hong Kong Profits Tax is required since the Champion League Group has no assessable profit for the Relevant Period.

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APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

The reconciliation between the income tax expense and the product of loss before tax multiplied by the applicable tax rate is as follows:

Loss before tax Tax at applicable tax rate of 16.5% Tax effect of non-deductible expenses Income tax expense	HK$ (71,486)
	(11,795) 11,795
	–

8. SHARE CAPITAL Authorised 50,000 ordinary shares of US$1 each Issued and fully paid 100 ordinary shares of US$1 each	HK$ 390,000

	780

Upon incorporation, Champion League issued 100 ordinary shares of US$1 each at par for cash to provide initial working capital.

The Champion League Group’s objectives when managing capital are to safeguard the Champion League Group’s ability to continue as a going concern and to maximise the return to the shareholders through the optimisation of the debt and equity balance.

Champion League currently does not have any specific policies and processes for managing capital.

9. DUE TO A DIRECTOR

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

10. CONTINGENT LIABILITIES

The Champion League Group did not have any significant contingent liabilities as at 31 December 2010.

11. EVENTS AFTER THE REPORTING PERIOD

Subsequent to the end of the reporting period, the Group acquired 37.64% equity interest of Bengbu Jinhuangshan Rotogravure Printing Company Ltd at a consideration of RMB160,000,000.

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APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

12. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Champion League Group in respect of any period subsequent to 31 December 2010.

Yours faithfully, RSM Nelson Wheeler Certified Public Accountants Hong Kong

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(b) Management discussion and analysis of the Target Group

For the period from 1 December 2010 (being the date of incorporation of the Target) to 31 December 2010

The Target Group has not conducted any business and has not recorded any turnover during the period. Accordingly, during the period, the Target Group had no business segment. The administrative expenses of approximately HK$71,486 incurred during the period mainly represent legal and professional fees relating to the incorporation of the Target Group, while the loss for the period was amounted to approximately HK$71,486. No dividend was declared for the period.

As at 31 December 2010, the Target Group had no assets and it recorded a net deficit of approximately HK$70,706. Save for the amount due to a director, which is unsecured, interest free and has no fixed terms of repayment, of approximately HK$70,706, the Target Group had no other borrowings and did not provide any guarantees for any third party and had no significant contingent liabilities. The gearing ratio of the Target Group was zero as the Target Group had no interest-bearing borrowings as at 31 December 2010. As at 31 December 2010, the Target Group had no capital commitment.

During the period, the Target Group’s liabilities and payments were denominated in HK$. As such, it is considered that the risk exposure to foreign exchange rate fluctuations is not significant. The Target Group did not have a formal hedging policy and had not entered into any material foreign currency exchange contracts or derivative transactions to hedge against its currency risks.

As at 31 December 2010, the Target Group did not hire any full-time staff.

In April 2011, the Target Group completed the acquisition of the 47.36% equity interest in BB Jinhuangshan from Maoming Investments, the consideration of which, being RMB160 million (equivalent to approximately HK$191 million) is interest-free and shall be settled on or before 31 August 2011.

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APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

2. FINANCIAL INFORMATION ON BB JINHUANGSHAN

(a) Accountants’ report on BB Jinhuangshan

中瑞岳華（香港）會計師事務所

29th Floor Caroline Centre Lee Gardens Two 28 Yun Ping Road Hong Kong

24 June 2011

The Board of Directors

Brilliant Circle Holdings International Limited (formerly known as CT Holdings (International) Limited)

Dear Sirs,

We set out below our report on the financial information (the “Financial Information”) of *Bengbu Jinhuangshan Rotogravure Printing Co., Ltd. (“BB Jinhuangshan”) for each of the three years ended 31 December 2010 (the “Relevant Periods”) for inclusion in the circular dated 24 June 2011 issued by Brilliant Circle Holdings International Limited (the “Company”) in connection with the proposed acquisition of the remaining equity interest in an indirectly non-wholly owned subsidiary of the Company (the “Circular”).

BB Jinhuangshan was established on 22 December 1997 in The People’s Republic of China (the “PRC”) and engaged in the printing of cigarette packages. BB Jinhuangshan has adopted 31 December as the financial year end date.

The statutory financial statements of BB Jinhuangshan has been prepared in accordance with the relevant accounting principles and financial regulations applicable to companies established in the PRC and was audited by Anhui Huaan Certified Public Accountants Ltd.(安徽永合會計師事務所有限公司) for the years ended 31 December 2008, 2009 and 2010.

* The English name of BB Jinhuangshan represents management’s best efforts at translating the Chinese name of the company as no English name has been registered.

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

For the purpose of this report, the directors of BB Jinhuangshan have prepared the management accounts of BB Jinhuangshan for the three years ended 31 December 2010 (the “Underlying Management Accounts”) in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

For the purpose of this report, we have carried out independent audit procedures we consider necessary in respect of the Underlying Management Accounts for the Relevant Periods in accordance with Hong Kong Standard on Auditing issued by the HKICPA and examined the Underlying Management Accounts in accordance with Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA.

The Financial Information has been prepared from the Underlying Management Accounts. No adjustments were considered necessary for the purpose of preparing our report for inclusion in the Circular.

The directors of BB Jinhuangshan are responsible for the preparation of the Underlying Management Accounts. The directors of the Company are responsible for the contents of the Circular in which this report is included. It is our responsibility to compile the Financial Information set out in this report from the Underlying Management Accounts, to form an independent opinion on the Financial Information and to report our opinion to you.

In our opinion, for the purpose of this report, the Financial Information gives a true and fair view of the state of affairs of BB Jinhuangshan as at 31 December 2008, 2009 and 2010 and of BB Jinhuangshan’s results and cash flows for the Relevant Periods.

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

FINANCIAL INFORMATION

A. STATEMENTS OF COMPREHENSIVE INCOME

Note Turnover 5 Cost of goods sold Gross profit Other income 5 Selling and distribution costs Administrative expenses Profit from operations 7 Finance costs 8 Profit before tax Income tax expense 9 Profit for the year Other comprehensive income for the year, net of tax Exchange differences on translation Total comprehensive income for the year	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 363,380 333,787 428,025 (268,077) (237,761) (300,860) 95,303 96,026 127,165 604 1,567 2,205 (1,906) (1,889) (3,468) (10,841) (11,456) (10,089) 83,160 84,248 115,813 (6,293) (5,260) (5,758) 76,867 78,988 110,055 (19,448) (11,415) (16,738) 57,419 67,573 93,317 7,231 1,577 7,125 64,650 69,150 100,442

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

B. STATEMENTS OF FINANCIAL POSITION

At 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 150,220 143,263 135,987 – 3,127 2,864 3,725 – –	At 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 150,220 143,263 135,987 – 3,127 2,864 3,725 – –	At 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 150,220 143,263 135,987 – 3,127 2,864 3,725 – –
153,945 46,894 82,047 – 1,066 – – 49,797 179,804	146,390 44,351 26,416 368 114,025 – 3,245 35,844 224,249	138,851
		58,241 97,379 382 4,252 106,344 – 37,520
		304,118
333,749	370,639	442,969

61,031 86,469 147,500	61,031 102,968 163,999	61,031 143,706
		204,737

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

Note Non-current liabilities Bank borrowings 19 Current liabilities Trade and bill payables 18 Accruals and other payables Due to fellow subsidiaries 16 Current tax liabilities Current portion of bank borrowings 19 Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities	At 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 16,923 – – 64,107 64,808 98,435 16,599 18,287 31,306 – 39,848 16,061 8,518 1,725 10,900 80,102 81,972 81,530 169,326 206,640 238,232 186,249 206,640 238,232 333,749 370,639 442,969 10,478 17,609 65,886 164,423 163,999 204,737	At 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 16,923 – – 64,107 64,808 98,435 16,599 18,287 31,306 – 39,848 16,061 8,518 1,725 10,900 80,102 81,972 81,530 169,326 206,640 238,232 186,249 206,640 238,232 333,749 370,639 442,969 10,478 17,609 65,886 164,423 163,999 204,737
		98,435 31,306 16,061 10,900 81,530
		238,232
		238,232
		442,969

		65,886

		204,737

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

C. STATEMENTS OF CHANGES IN EQUITY

Paid-in capital HK$’000 48,799	Note 21(a) Exchange reserve HK$’000 12,569	Note 21(b) Statutory reserves HK$’000 28,784	Retained profits HK$’000 47,192	Total equity HK$’000 137,344 64,650 – (54,494) 10,156 147,500 69,150 – (52,651) 16,499 163,999 100,442 – (59,704) 40,738 204,737
– 12,232 – 12,232 61,031 – – – – 61,031 – – – –	7,231 – – 7,231 19,800 1,577 – – 1,577 21,377 7,125 – – 7,125	– (12,232) – (12,232) 16,552 – 1,350 – 1,350 17,902 – 6,635 – 6,635	57,419 – (54,494) 2,925 50,117 67,573 (1,350) (52,651) 13,572 63,689 93,317 (6,635) (59,704) 26,978	64,650 – (54,494
				10,156
				147,500
				69,150 – (52,651
				16,499
				163,999
				100,442 – (59,704
				40,738
61,031	28,502	24,537	90,667

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

D. STATEMENTS OF CASH FLOWS

Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 76,867 78,988 110,055 6,293 5,260 5,758 18,495 17,857 19,510 1 52 (751) (182) (163) (500) – – (225) 101,474 101,994 133,847 (3,367) 2,543 (13,665) 3,074 55,631 (70,963) 9,977 (1,488) (1,698) 22,471 701 33,627 2,315 1,688 13,019 (34,722) – – – – 16,061 101,222 161,069 110,228 (16,584) (18,262) (7,869) 84,638 142,807 102,359 4,547 (3,245) 3,245 (21,912) (9,425) (7,246) – – 1,225 182 163 500 (17,183) (12,507) (2,276)	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 76,867 78,988 110,055 6,293 5,260 5,758 18,495 17,857 19,510 1 52 (751) (182) (163) (500) – – (225) 101,474 101,994 133,847 (3,367) 2,543 (13,665) 3,074 55,631 (70,963) 9,977 (1,488) (1,698) 22,471 701 33,627 2,315 1,688 13,019 (34,722) – – – – 16,061 101,222 161,069 110,228 (16,584) (18,262) (7,869) 84,638 142,807 102,359 4,547 (3,245) 3,245 (21,912) (9,425) (7,246) – – 1,225 182 163 500 (17,183) (12,507) (2,276)	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 76,867 78,988 110,055 6,293 5,260 5,758 18,495 17,857 19,510 1 52 (751) (182) (163) (500) – – (225) 101,474 101,994 133,847 (3,367) 2,543 (13,665) 3,074 55,631 (70,963) 9,977 (1,488) (1,698) 22,471 701 33,627 2,315 1,688 13,019 (34,722) – – – – 16,061 101,222 161,069 110,228 (16,584) (18,262) (7,869) 84,638 142,807 102,359 4,547 (3,245) 3,245 (21,912) (9,425) (7,246) – – 1,225 182 163 500 (17,183) (12,507) (2,276)
101,474 (3,367) 3,074 9,977 22,471 2,315 (34,722) – 101,222 (16,584) 84,638 4,547 (21,912) – 182 (17,183)	101,994 2,543 55,631 (1,488) 701 1,688 – – 161,069 (18,262) 142,807 (3,245) (9,425) – 163 (12,507)	133,847 (13,665 (70,963 (1,698 33,627 13,019 – 16,061
		110,228 (7,869
		102,359
		3,245 (7,246 1,225 500
		(2,276

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FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

CASH FLOWS FROM FINANCING
ACTIVITIES
(Advance to)/repayment from a shareholders
Advance from/(to) fellow subsidiaries
Interests on bank borrowings paid
Repayment of bank borrowings
Bank borrowings raised
Dividend paid
Net cash used in financing activities
NET INCREASE/ (DECREASE) IN CASH
AND CASH EQUIVALENTS
Effect of foreign exchange rate changes
CASH AND CASH EQUIVALENTS
AT 1 JANUARY
CASH AND CASH EQUIVALENTS
AT 31 DECEMBER
ANALYSIS OF CASH AND CASH
EQUIVALENTS
Bank and cash balances

Year ended 31 December
2008
2009
2010
HK$’000
HK$’000
HK$’000
–
(111,471)
111,471
–
39,848
(146,192)
(6,293)
(5,260)
(5,758)
(94,769)
(153,698)
(165,424)
126,358
137,759
161,879
(54,494)
(52,651)
(59,704)
(29,198)
(145,473)
(103,728)
38,257
(15,173)
(3,645)
3,563
1,220
5,321
7,977
49,797
35,844
49,797
35,844
37,520
49,797
35,844
37,520

– II-22 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

E. NOTES TO FINANCIAL INFORMATION

1. GENERAL INFORMATION

BB Jinhuangshan was established in the PRC as a sino-foreign co-operative joint venture for an operating period of 21 years commencing from 22 December 1997. The address of its registered office is High-tech Development Zone, Changzhen Road, Bengbu City, Anhui Province, People’s Republic of China (安徽省蚌埠市長征路高新技術開發區).

BB Jinhuangshan was engaged in the printing of cigarette packages in the PRC. In the opinion of the directors of BB Jinhuangshan, as at 31 December 2010, Brilliant Circle Development Limited, a company incorporated in Hong Kong, is the immediate holding company; Mr. Tsoi Tak and Brilliant Circle Group Holdings Limited (formerly known as Brilliant Circle Holdings International Limited), a company incorporated in the British Virgin Islands, is the ultimate controlling party and the ultimate holding company of BB Jinhuangshan respectively for the period after 30 June 2009. AMVIG Holdings Limited, a company incorporated in Cayman Islands, was the ultimate holding company of BB Jinhuangshan for the period from 1 January 2008 to 30 June 2009.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The Financial Information has been prepared in accordance with HKFRSs and accounting principles generally accepted in Hong Kong. HKFRSs comprise Hong Kong Financial Reporting Standards (“HKFRS”); Hong Kong Accounting Standards (“HKAS”); and Interpretations. In addition, the Financial Information includes applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and by the Hong Kong Companies Ordinance.

The Financial Information has been prepared under the historical cost convention.

For the purpose of preparing and presentating Financial Information of the Relevant Periods, BB Jinhuangshan has adopted all the applicable HKFRSs which are effective for accounting periods beginning on or after 1 January 2010.

BB Jinhuangshan has not applied the new HKFRSs that have been issued but are not yet effective. BB Jinhuangshan has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs would have a material impact on its results of operations and financial position.

The preparation of Financial Information in conformity with HKFRSs requires the use of certain key assumptions and estimates. It also requires the directors to exercise its judgements in the process of applying the accounting policies. The areas involving critical judgements and areas where assumptions and estimates are significant to the Financial Information, are disclosed in Note 3.

The significant accounting policies applied in the preparation of the Financial Information are set out below.

(b) Foreign currency translation

(i) Functional and presentation currency

Items included in the Financial Information are measured using the currency of the primary economic environment in which BB Jinhuangshan operates (the “functional currency”). The Financial Information is presented in Hong Kong dollars (“HK$”), which is BB Jinhuangshan’s presentation currency. The functional

– II-23 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

currency of BB Jinhuangshan is Renminbi (“RMB”). The directors consider that choosing HK$ as the presentation currency best suits the needs of the shareholders and investors.

(ii) Transactions and balances in each entity’s Financial Information

Non-monetary items that are measured at fair values in foreign currencies are translated using the exchange rates at the dates when the fair values are determined.

(iii) Translation

The results and financial position of BB Jinhuangshan are translated into BB Jinhuangshan’s presentation currency as follows:

Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
Income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the exchange rates on the transaction dates); and
All resulting exchange differences are recognised in the exchange reserve.

(c) Property, plant and equipment

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

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to BB Jinhuangshan and the cost of the item can be measured reliably. All other repairs and maintenance are recognised in profit or loss during the period in which they are incurred.

Depreciation of property, plant and equipment is calculated at rates sufficient to write off their cost less their residual values over the estimated useful lives on a straight-line basis. The principal useful lives are as follows:

Buildings		20 years
Plant and machinery	5	– 10 years
Office equipment		5 years
Motor vehicles		5 years

– II-24 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

The residual values, useful lives and depreciation method are reviewed and adjusted, if appropriate, at the end of each reporting period.

Construction in progress represents buildings under construction and plant and machinery pending installation, and is stated at cost less impairment losses. Depreciation begins when the relevant assets are available for use.

The gain or loss on disposal of property, plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets, and is recognised in profit or loss.

(d)

Operating leases

Leases that do not substantially transfer to BB Jinhuangshan all the risks and rewards of ownership of assets are accounted for as operating leases. Lease payments (net of any incentives received from the lessor) are recognised as an expense on a straight-line basis over the lease term.

(e)

Research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

(f) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average basis. The cost of finished goods and work in progress comprises raw materials, direct labour and an appropriate proportion of all production overhead expenditure, and where appropriate, subcontracting charges. Net realisable value is 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.

(g)

Recognition and derecognition of financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when BB Jinhuangshan becomes a party to the contractual provisions of the instruments.

Financial assets are derecognised when the contractual rights to receive cash flows from the assets expire; BB Jinhuangshan transfers substantially all the risks and rewards of ownership of the assets; or BB Jinhuangshan neither transfers nor retains substantially all the risks and rewards of ownership of the assets but has not retained control on the 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 in other comprehensive income is recognised in profit or loss.

(h) Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment. An allowance for impairment of trade and other receivables is established when there is objective evidence that BB Jinhuangshan will not be able to collect all amounts due according to the original terms of receivables. The amount of the

– II-25 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

allowance is the difference between the receivables’ carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate computed at initial recognition. The amount of the allowance is recognised in profit or loss.

Impairment losses are reversed in subsequent periods and recognised in profit or loss when an increase in the receivables’ recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the receivables at the date the impairment is reversed shall not exceed what the amortised cost would have been had the impairment not been recognised.

(i)

Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents represent cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term highly liquid investments which are readily convertible into known amounts of cash and subject to an insignificant risk of change in value. Bank overdrafts which are repayable on demand and form an integral part of BB Jinhuangshan’s cash management are also included as a component of cash and cash equivalents.

(j)

Financial liabilities and equity instruments

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 under HKFRSs. An equity instrument is any contract that evidences a residual interest in the assets of BB Jinhuangshan after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out in (k) to (n) below.

(k)

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method.

Borrowings are classified as current liabilities unless BB Jinhuangshan has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(l)

Financial guarantee contract liabilities

Financial guarantee contract liabilities are measured initially at their fair values and are subsequently measured at the higher of:

The amount of the obligations under the contracts, as determined in accordance with HKAS 37 “Provisions, Contingent Liabilities and Contingent Assets”; and
The amount initially recognised less cumulative amortisation recognised in profit or loss on a straight-line basis over the terms of the guarantee contracts.

(m)

Trade and other payables

Trade and other payables are stated initially at their fair value and subsequently measured at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

(n)

Equity instruments

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

– II-26 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

(o) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and is recognised when it is probable that the economic benefits will flow to BB Jinhuangshan and the amount of revenue can be measured reliably.

Revenue from the sales of manufactured goods is recognised on the transfer of significant risks and rewards of ownership, which generally coincides with the time when the goods are delivered and the title has passed to the customers.

Interest income is recognised on a time-proportion basis using the effective interest method.

(p) Employee benefits

(i) Employee leave entitlements

Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long service leave as a result of services rendered by employees up to the end of the reporting period.

Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

(ii) Pension obligations

BB Jinhuangshan contributes to defined contribution retirement schemes which are available to all employees. Contributions to the schemes by BB Jinhuangshan and employees are calculated as a percentage of employees’ basic salaries. The retirement benefit scheme cost charged to profit or loss represents contributions payable by BB Jinhuangshan to the funds.

(iii) Termination benefits

Termination benefits are recognised when, and only when, BB Jinhuangshan demonstrably commits itself to terminate employment or to provide benefits as a result of voluntary redundancy by having a detailed formal plan which is without realistic possibility of withdrawal.

(q) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets, until such time as 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.

To the extent that funds are borrowed generally and used for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate is the weighted average of the borrowing costs applicable to the borrowings of BB Jinhuangshan that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset.

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

– II-27 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

(r) Taxation

Income tax represents the sum of the current tax and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit recognised in profit or loss 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. BB Jinhuangshan’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and BB Jinhuangshan intends to settle its current tax assets and liabilities on a net basis.

(s) Related parties

A party is related to BB Jinhuangshan if:

(i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control with, BB Jinhuangshan; has an interest in BB Jinhuangshan that gives it significant influence over BB Jinhuangshan; or has joint control over BB Jinhuangshan;
(ii) the party is an associate;
(iii) the party is a joint venture;
(iv) the party is a member of the key management personnel of BB Jinhuangshan or its parent;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

– II-28 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

(vii) the party is a post-employment benefit plan for the benefit of employees of BB Jinhuangshan, or of any entity that is a related party of BB Jinhuangshan.

(t)

Impairment of assets

At the end of each reporting period, BB Jinhuangshan reviews the carrying amounts of its assets except inventories and receivables to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, BB Jinhuangshan estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell 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 the time value of money and the risks specific to the asset.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash- generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit 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 (net of depreciation or amortisation) had no impairment loss been recognised for the asset or cash- generating unit in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(u) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when BB Jinhuangshan has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non- occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.

(v) Events after the reporting period

Events after the reporting period that provide additional information about BB Jinhuangshan’s position at the end of the reporting period or those that indicate the going concern assumption is not appropriate are adjusting events and are reflected in the Financial Information. Events after the reporting period that are not adjusting events are disclosed in the notes to the Financial Information when material.

– II-29 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

3. KEY ESTIMATES

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

(a) Property, plant and equipment and depreciation

BB Jinhuangshan determines the estimated useful lives, residual values and related depreciation charges for BB Jinhuangshan’s property, plant and equipment. This estimate is based on the historical experience of the actual useful lives and residual values of property, plant and equipment of similar nature and functions. BB Jinhuangshan will revise the depreciation charge where useful lives and residual values are different to those previously estimated, or it will write-off or write-down technically obsolete or nonstrategic assets that have been abandoned or sold.

(b) Impairment loss on receivables

BB Jinhuangshan makes impairment loss on receivables based on assessments of the recoverability of the receivables, including the current creditworthiness and the past collection history of each debtor. Impairments arise where events or changes in circumstances indicate that the balances may not be collectible. The identification of impairment loss on receivables requires the use of judgement and estimates. Where the actual result is different from the original estimate, such difference will impact the carrying value of the receivables and impairment loss on receivables in the year in which such estimate has been changed.

(c) Allowance for inventories and net realisable value of inventories

Allowance for inventories is made based on the ageing and estimated net realisable value of inventories. The assessment of the allowance amount involves judgement and estimates. Where the actual outcome in future is different from the original estimate, such difference will impact the carrying value of inventories and allowance charge/write-back in the period in which such estimate has been changed.

Net realisable value of inventories is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling expense. These estimates are based on the current market condition and the historical experience of manufacturing and selling products of similar nature. It could change significantly as a result of changes in customer taste and competitor actions in response to serve market environment. BB Jinhuangshan will reassess the estimates by the end of each reporting period.

4. FINANCIAL RISK MANAGEMENT

BB Jinhuangshan’s activities expose it to a variety of financial risks: foreign currency risk, credit risk, liquidity risk and interest rate risk. BB Jinhuangshan’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on BB Jinhuangshan’s financial performance.

– II-30 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

(a) Foreign currency risk

BB Jinhuangshan has minimal exposure to foreign currency risk as most of its business transactions, assets and liabilities are principally denominated in the functional currencies of BB Jinhuangshan.

(b) Credit risk

The carrying amount of the bank and cash balances including pledged bank deposits, trade receivables, deposits and other receivables and due from a fellow subsidiary included in the statements of financial position represents BB Jinhuangshan’s maximum exposure to credit risk in relation to BB Jinhuangshan’s financial assets.

The amount due from a fellow subsidiary and the largest trade receivable represented approximately 44% and 40%, respectively, of the loans and receivables (including cash and cash equivalents) of BB Jinhuangshan as at 31 December 2010.

BB Jinhuangshan has policies in place to ensure trade receivables and other exposure to credit risk are managed through the application of credit approvals, credit limits and monitoring process. BB Jinhuangshan’s senior management performs on-going credit evaluation and regularly reviews the recoverable amount of each individual trade debt to ensure that adequate impairment losses are recognised for irrecoverable debts. The amount due from a fellow subsidiary is closely monitored by management.

The credit risk on bank and cash balances is limited because the counterparties are well-established banks in the PRC.

(c) Liquidity risk

BB Jinhuangshan’s policy is to regularly monitor current and expected liquidity requirements to ensure that it maintains sufficient reserve of cash to meet its liquidity requirements in the short and longer term.

The maturity analysis of BB Jinhuangshan’s financial liabilities is as follows:

	Less than	Between
	1 year	1 and 2 years
	HK$’000	HK$’000
At 31 December 2008
Bank borrowings	81,825	18,443
Trade and bill payables	64,107	–
Accruals and other payables	6,250	–
At 31 December 2009
Bank borrowings	84,478	–
Trade and bill payables	64,808	–
Accruals and other payables	13,811	–
Due to fellow subsidiaries	39,848	–
At 31 December 2010
Bank borrowings	83,274	–
Trade and bill payables	98,435	–
Accruals and other payables	25,112	–
Due to fellow subsidiaries	16,061	–

– II-31 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

(d) Interest rate risk

BB Jinhuangshan’s exposure to interest-rate risk arises from its bank deposits and bank borrowings. BB Jinhuangshan’s bank borrowings of approximately HK$Nil, HK$10,930,000 and HK$47,265,000 as at 31 December 2008, 2009 and 2010 respectively bear interests at fixed interest rates and therefore are subject to fair value interest rate risks. The bank deposits and other bank borrowings bear interests at variable rates varied with the then prevailing market condition and expose BB Jinhuangshan to cash flow interest rate risk.

The directors consider BB Jinhuangshan’s exposure to interest rate risk on bank deposits is not significant as interest bearing bank balances are within short maturity period.

At 31 December 2008, 2009 and 2010, if the interest rate had been 100 basis points lower, with all other variables held constant, the impact on profit after tax is summarised in the following table. The sensitivity analysis includes outstanding bank borrowings and adjusts the respective interest rates at the year end of 100 basis points. A positive number indicates an increase in profit. If the interest rate had been 100 basis points higher, with all other variables held constant, there would be an equal and opposite impact on profit after tax, and the balances below would be negative.

					December
				2008	2009	2010
				HK$’000	HK$’000	HK$’000
Profit	after	tax	(i)	727	603	292

(i) This is mainly a result of the decrease in interest expenses on bank borrowings at year end.

(e) Categories of financial instruments

		At 31 December
	2008	2009	2010
	HK$’000	HK$’000	HK$’000
Financial assets
Loans and receivables
(including cash and cash equivalents)	131,967	177,073	241,476
Financial liabilities
Financial liabilities measured
at amortised cost	167,382	200,439	221,138

(f) Fair values

The carrying amounts of BB Jinhuangshan’s financial assets and financial liabilities as reflected in the statements of financial position approximate their respective fair values.

– II-32 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

5. TURNOVER AND OTHER INCOME

BB Jinhuangshan is principally engaged in printing of cigarette packages. An analysis of BB Jinhuangshan’s turnover and other income is as follows:

Turnover Cigarette packages Other income Interest income Gain on sales of scrapped materials Gain on sales of paper Gain on disposal of property, plant and equipment Sundry income	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 363,380 333,787 428,025	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 363,380 333,787 428,025	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 363,380 333,787 428,025
	182 387 – – 35	163 1,341 32 – 31	500 840 34 751 80
	604	1,567	2,205

6. SEGMENT INFORMATION

For the Relevant Periods, BB Jinhuangshan was engaged in a single business segment being printing of cigarette packages and over 90% of the Company’s revenue was made to a single customer. BB Jinhuangshan’s revenue is solely derived from printing of cigarette packages and its operations are based in the PRC. BB Jinhuangshan’s assets are all located in the PRC. Accordingly, no analysis of BB Jinhuangshan’s segment information is disclosed.

7. PROFIT FROM OPERATIONS

BB Jinhuangshan’s profit from operations is stated after charging/(crediting) the following:

Auditors’ remuneration
Cost of inventories sold (Note a)
Depreciation
Directors’ emoluments
Loss/(gain) on disposal of property, plant and
equipment, net
Operating lease rentals in respect of land and
buildings
Research and development costs
Reversal of allowance for inventories
Staff costs including directors’ emoluments
Salaries, bonus and allowances
Retirement benefits scheme contributions

Year ended 31 December
2008
2009
2010
HK$’000
HK$’000
HK$’000
34
32
35
268,077
237,761
300,860
18,495
17,674
19,138
1,021
784
670
1
52
(751)
945
815
891
1,036
2,282
3,777
–
–
(225)
22,048
22,031
25,029
1,824
1,856
2,022
23,872
23,887
27,051

– II-33 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

Note:

(a) Cost of inventories sold includes the following which are included in the respective amounts disclosed separately above for the year:

	Year	ended 31 December	ended 31 December
	2008	2009	2010
	HK$’000	HK$’000	HK$’000
Operating lease rentals in respect
of land and buildings	945	632	519
Staff costs	18,705	17,954	21,184
Depreciation	18,115	17,322	18,704
Research and development costs	1,036	2,282	3,777
Reversal of allowance for inventories	–	–	(225)

8. FINANCE COSTS

Interests on bank borrowings 9. INCOME TAX EXPENSE PRC enterprise income tax – Provision for the year – Under/(over) provision in prior year	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 6,293 5,260 5,758 Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 19,421 11,971 16,738 27 (556) – 19,448 11,415 16,738	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 6,293 5,260 5,758 Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 19,421 11,971 16,738 27 (556) – 19,448 11,415 16,738
		16,738

On 16 March 2007, the National People’s Congress approved the Corporate Income Tax Law of the PRC (“New CIT Law”), which became effective from 1 January 2008. Under the New CIT Law, the standard corporate income tax rate is 25%, replacing the previous applicable rate of 33%.

According to the certificate issued by the Anhui Province Science and Technology Bureau (安徵省科學廳) on 11 November 2009, BB Jinhuangshan is accredited as a High-Tech Enterprise. Pursuant to Articles 7 and 8 of the “Enterprise Income Tax Law for Foreign Investment Enterprises and Foreign Enterprises”. BB Jinhuangshan, being a High-Tech Enterprise, is entitled to a reduced PRC enterprise income tax rate of 15% for the year from 2009 to 2011.

– II-34 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

The reconciliation between the income tax expenses and the product of profit before tax multiplied by the applicable tax rate is as follows:

Profit before tax Tax at applicable tax rate of 15% (2008: 25%) Tax effect of non-deductible expenses Under/(over) provision in prior year Income tax expense	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 76,867 78,988 110,055 19,216 11,848 16,508 205 123 230 27 (556) – 19,448 11,415 16,738	Year ended 31 December 2008 2009 2010 HK$’000 HK$’000 HK$’000 76,867 78,988 110,055 19,216 11,848 16,508 205 123 230 27 (556) – 19,448 11,415 16,738
		16,508 230 –
		16,738

10. RETIREMENT BENEFIT SCHEMES

The employees of BB Jinhuangshan are members of a central pension scheme operated by the local municipal government. BB Jinhuangshan is required to contribute certain percentage of the employees’ basic salaries and wages to the central pension scheme to fund the retirement benefits. The local municipal government undertakes to assume the retirement benefits obligations of all existing and future retired employees of BB Jinhuangshan. The only obligation of BB Jinhuangshan with respect to the central pension scheme is to meet the required contributions under the scheme.

11. DIVIDENDS

				Year	ended 31 December	ended 31 December
				2008	2009	2010
				HK$’000	HK$’000	HK$’000
Dividends	declared	and	paid	54,494	52,651	59,704

– II-35 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

12. PROPERTY, PLANT AND EQUIPMENT

Buildings Plant and machinery Office equipment HK$’000 HK$’000 HK$’000 23,386 132,206 16,699 96 – 740 408 61,812 1,594 – – (4) 1,192 6,988 861	Buildings Plant and machinery Office equipment HK$’000 HK$’000 HK$’000 23,386 132,206 16,699 96 – 740 408 61,812 1,594 – – (4) 1,192 6,988 861	Buildings Plant and machinery Office equipment HK$’000 HK$’000 HK$’000 23,386 132,206 16,699 96 – 740 408 61,812 1,594 – – (4) 1,192 6,988 861	Motor vehicles Construction in progress HK$’000 HK$’000 1,849 52,251 – 21,076 – (63,814) – – 94 2,475	Motor vehicles Construction in progress HK$’000 HK$’000 1,849 52,251 – 21,076 – (63,814) – – 94 2,475	Total HK$’000 226,391 21,912 – (4) 11,610
25,082 – 16,605 – 286 41,973 – 29 – 1,590 43,592 5,971 1,220 – 310 7,501 1,147 – 72 8,720 2,095 – 387 11,202	201,006 – – – 1,835 202,841 4,222 4,424 (3,120) 7,829 216,196 70,032 15,163 – 3,627 88,822 14,316 – 860 103,998 14,605 (2,808) 4,257 120,052	19,890 130 1,837 (515) 187 21,529 126 – (422) 808 22,041 9,519 1,890 (3) 492 11,898 2,019 (463) 114 13,568 2,183 (314) 564 16,001	1,943 – – – 17 1,960 767 – (536) 81 2,272 1,185 222 – 61 1,468 192 – 14 1,674 255 (482) 57 1,504	11,988 9,295 (18,442) – 79 2,920 2,131 (4,453) – 47 645 – – – – – – – – – – – – –	259,909 9,425 – (515) 2,404
					271,223 7,246 – (4,078) 10,355
					284,746
					86,707 18,495 (3) 4,490
					109,689 17,674 (463) 1,060
					127,960 19,138 (3,604) 5,265
					148,759
17,581 33,253 32,390	112,184 98,843 96,144	7,992 7,961 6,040	475 286 768	11,988 2,920 645	150,220

					143,263

					135,987

– II-36 –

APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

BB Jinhuangshan’s buildings are situated in the PRC.

The carrying amounts of BB Jinhuangshan’s property, plant and equipment amounted to approximately HK$104,851,000, HK$68,968,000 and HK$96,653,000 were pledged as security for BB Jinhuangshan’s bank facilities (Note 19) as at 31 December 2008, 2009 and 2010, respectively.

13. PREPAID LAND LEASE PAYMENTS

At 1 January Additions Amortisation for the year Exchange differences At 31 December Current portion Non-current portion	At 31 December 2008 2009 HK$’000 HK$’000 – – – 3,666 – (183) – 12 – 3,495 – (368) – 3,127	2010 HK$’000 3,495 – (372) 123
		3,246 (382)
		2,864

BB Jinhuangshan’s prepaid land lease payments represent payments for land use rights in the PRC under medium term leases.

The carrying amount of prepaid land lease payments pledged as security for BB Jinhuangshan’s bank borrowings amounted to HK$Nil, HK$Nil and HK$3,246,000 as at 31 December 2008, 2009 and 2010, respectively (Note 19) .

14. INVENTORIES

Raw materials Work in progress Finished goods	At 31 December 2008 2009 HK$’000 HK$’000 26,592 21,308 1,560 7,368 18,742 15,675 46,894 44,351	2010 HK$’000 34,388 12,756 11,097
		58,241

Because of the change in market conditions of BB Jinhuangshan’s products during the Relevant Periods, there were changes in the net realisable value of inventories. As a result, reversal of allowance for inventories was made during the Relevant Periods (Note 7) .

– II-37 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

15. TRADE RECEIVABLES

The general credit terms of BB Jinhuangshan granted to its trade customers are three months. BB Jinhuangshan seeks to maintain strict control over its outstanding receivables. Overdue balances are reviewed regularly by the senior management. An aging analysis of trade receivables, based on the date of invoices is as follows:

Current to 30 days 31 to 90 days	At 31 December 2008 2009 HK$’000 HK$’000 82,047 26,416 – – 82,047 26,416	2010 HK$’000 80,787 16,592
		97,379

At 31 December 2008, 2009 and 2010, there were no allowance for estimated irrecoverable trade receivables and all trade receivable were within the due date.

The carrying amount of BB Jinhuangshan’s trade receivables are dominated in RMB.

16. DUE FROM/(TO) FELLOW SUBSIDIARIES

The amounts due are unsecured, interest free and have no fixed terms of repayment.

17. PLEDGED BANK DEPOSITS AND BANK AND CASH BALANCES

BB Jinhuangshan’s pledged bank deposits represented deposits pledged to banks to secure the bill payables granted to BB Jinhuangshan (Note 18) .

Included in the pledged bank deposits and bank and cash balances of BB Jinhuangshan is an amount of approximately HK$49,616,000, HK$38,907,000, and HK$37,250,000 as at 31 December 2008, 2009 and 2010 respectively denominated in RMB. Conversion of RMB into foreign currencies is subject to the PRC’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations.

18. TRADE AND BILL PAYABLES

The aging analysis of trade payables, based on the date of invoices, is as follows:

Current to 31 days 31 to 90 days Over 90 days Trade payables Bill payables – secured	At 31 December 2008 2009 HK$’000 HK$’000 50,906 49,074 13,200 10,757 1 1,732 64,107 61,563 – 3,245 64,107 64,808	2010 HK$’000 79,235 19,162 38
		98,435 –
		98,435

The carrying amount of BB Jinhuangshan’s trade and bill payables are denominated in RMB.

– II-38 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

19. BANK BORROWINGS

Secured bank loans Unsecured bank loans	At 31 December 2008 2009 HK$’000 HK$’000 45,128 59,202 51,897 22,770 97,025 81,972	2010 HK$’000 57,898 23,632
		81,530

The borrowings are repayable as follows:

On demand or within one year In the second year Less: Amount due for settlement within 12 months (shown under current liabilities) Amount due for settlement after 12 months	At 31 December 2008 2009 HK$’000 HK$’000 80,102 81,972 16,923 –	At 31 December 2008 2009 HK$’000 HK$’000 80,102 81,972 16,923 –	2010 HK$’000 81,530 –
	97,025 (80,102)	81,972 (81,972)	81,530 (81,530
	16,923	–	–

The carrying amounts of BB Jinhuangshan’s borrowings are denominated in RMB. The ranges of interest rates paid were as follows:

					At 31 December
				2008	2009	2010
Bank	loans	5.1%	to	7.5%	4.9% to 5.4%	4.9% to 5.8%

At 31 December 2008, 2009 and 2010, bank borrowings of approximately HK$Nil, HK$10,930,000 and HK$47,265,000 are arranged at fixed interest rates and expose BB Jinhuangshan to fair value interest rate risk. Other bank borrowings are arranged at floating rates, thus exposing BB Jinhuangshan to cash flow interest rate risk.

At 31 December 2008, 2009 and 2010, the above bank borrowings are secured by the following:

(a) certain property, plant and equipment of BB Jinhuangshan (Note 12) ;
(b) prepaid land lease payments of BB Jinhuangshan at 31 December 2010 only (Note 13) ; and
(c) corporate guarantee given by a fellow subsidiary.

– II-39 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

20. PAID-IN CAPITAL

Registered capital At 1 January Capital increase At 31 December Paid up and verified capital At 1 January Capital injection At 31 December	At 31 December 2008 2009 HK$’000 HK$’000 48,799 61,031 12,232 – 61,031 61,031 48,799 61,031 12,232 – 61,031 61,031	2010 HK$’000 61,031 –
		61,031

		61,031 –
		61,031

Pursuant to the resolution passed on 27 April 2007, the registered capital of BB Jinhuangshan was increased from US$6,300,000 (approximately HK$48,799,000) to US$7,622,800 (approximately HK$61,031,000).

The additional capital was satisfied by the transfer of US$1,322,800 (approximately HK$12,232,000) from statutory reserves and was verified by Anhui Huaan Certified Public Accountants Ltd. on 16 July 2008.

BB Jinhuangshan’s objectives when managing capital are to safeguard BB Jinhuangshan’s ability to continue as a going concern and to maximise the return to the shareholders through the optimisation of the debt and equity balance. BB Jinhuangshan currently does not have any specific policies and processes for managing capital.

21. RESERVES

(a) Exchange reserve

The exchange reserve comprises all foreign exchange differences arising from the translation of the Financial Information of BB Jinhuangshan. The reserve is dealt with in accordance with the accounting policies set out in Note 2 (b)(iii).

(b) Statutory reserves

The statutory reserves, which are non-distributable, are appropriated from the profit after taxation of BB Jinhuangshan under the applicable laws and regulations in the PRC.

22. CONTINGENT LIABILITIES

On 30 November 2009, BB Jinhuangshan issued a corporate guarantee of RMB30,000,000 (the “Guarantee”) to a bank to secure banking facilities granted to a fellow subsidiary. The maximum liability of BB Jinhuangshan under the guarantee was the amount of bank loan outstanding as at 31 December 2009 of RMB30,000,000. The directors do not consider it probable that a claim against BB Jinhuangshan under the Guarantee.

Based on the valuation report issued by an independent valuer, Asset Appraisal Limited, the fair value of the Guarantee at date of inception was approximately HK$12,000 which is not material and is not recognised in the Financial Information.

– II-40 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

Except for the above, BB Jinhuangshan did not have any significant contingent liabilities as at 31 December 2008, 2009 and 2010.

23. COMMITMENTS

BB Jinhuangshan had the following commitments:

(a) Operating lease commitments

BB Jinhuangshan leases certain of its factory premises under operating lease arrangements. The original lease terms for the factory premises range from thirteen years to fifteen years. Rentals are fixed over the lease term and do not include contingent rentals.

Total future minimum lease payments under non-cancellable operating leases are payable as follows:

Within one year In the second to fifth years, inclusive After five years	At 31 December 2008 2009 HK$’000 HK$’000 527 531 2,106 2,126 2,501 1,860 5,134 4,517	2010 HK$’000 557 2,229 1,393
		4,179

(b) Capital commitments

		31 December
	2008	2009	2010
	HK$’000	HK$’000	HK$’000
Contracted but not provided for:
Acquisition of property, plant and
equipment	1,730	–	–

24. RELATED PARTY TRANSACTIONS

(a) Save as disclosed elsewhere in this report, BB Jinhuangshan had the following material related party transactions during the Relevant Periods:

	Year	ended 31 December	ended 31 December
	2008	2009	2010
	HK$’000	HK$’000	HK$’000
Sales to fellow subsidiaries	813	1,514	4,248
Purchases from a fellow subsidiary	–	–	17,611

Note: The sales and purchases were made under normal commercial terms.

– II-41 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

(b) Save as disclosed elsewhere in this report, BB Jinhuangshan had the following related party balance at the end of each reporting periods:

		31 December
	2008	2009	2010
	HK$’000	HK$’000	HK$’000
Prepayments, deposits and other
receivables
Due from a shareholder	–	111,471	–

Note: The amount due from a shareholder is interest free, unsecured and have no fixed term of repayment.

25. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by BB Jinhuangshan in respect of any period subsequent to 31 December 2010.

Yours faithfully, RSM Nelson Wheeler Certified Public Accountants Hong Kong

– II-42 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

(b) Management discussion and analysis on BB Jinhuangshan

For the year ended 31 December 2010

Turnover

The turnover of BB Jinhuangshan amounted to approximately HK$428.0 million in 2010, representing an increase of approximately 28.2% as compared to that of 2009. The increase in revenue was mainly due to the enhancement in sales mix by selling more highend products with higher sales value as well as the expansion in customer demand. During the year, BB Jinhuangshan was engaged in a single business segment being printing of cigarette packages, the revenue of which was solely derived from printing of cigarette packages and its operations are based in the PRC.

Gross Profit

The gross profit of BB Jinhuangshan amounted to approximately HK$127.2 million in 2010, representing an increase of approximately 32.4% as compared to that of 2009. The gross profit margin increased from approximately 28.8% for the year ended 31 December 2009 to approximately 29.7% for the year ended 31 December 2010. The gross profit margin has been improved as cost control measures have been strictly implemented and higher margin products have been sold during the year.

Other income

BB Jinhuangshan recorded other income of approximately HK$2.2 million, mainly comprising, gain on sales of scrapped materials of approximately HK$0.8 million, gain on disposal of property, plant and equipment of approximately HK$0.8 million and interest income of approximately HK$0.5 million.

– II-43 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

Selling and distribution expenses

For the year ended 31 December 2010, the selling and distribution expenses amounted to approximately HK$3.5 million, representing approximately 0.8% of the turnover of BB Jinhuangshan. The increase of the selling and distribution expenses of BB Jinhuangshan was mainly attributable to the increase in focus on marketing to cope with the growth of BB Jinhuangshan’s turnover.

Administrative expenses

For the year ended 31 December 2010, the administrative expenses amounted to approximately HK$10.1 million, representing 2.4% of the turnover of BB Jinhuangshan.

Finance costs

For the year ended 31 December 2010, the finance costs of BB Jinhuangshan amounted to approximately HK$5.8 million. All the costs represent the interest expenses in respect of bank borrowings.

Profit for the year

For the year ended 31 December 2010, the profit was approximately HK$93.3 million, representing an increase of approximately HK$25.7 million when compared with the year in 2009. The increase in profit for the year of BB Jinhuangshan was mainly attributable to the increase in gross profit of approximately HK$31.1 million as a result of the increase in turnover and improvement in gross profit margin by implementation of cost control measures, increase in other income of approximately HK$0.6 million (which was mainly attributable to the increase in gain on disposal of property, plant and equipment, of approximately HK$0.8 million) and offset by the increase in finance costs of approximately HK$0.5 million and the increase in income tax expenses of approximately HK$5.3 million.

Dividend amounted to approximately HK$59.7 million was declared for the year.

Financial position and liquidity

BB Jinhuangshan generally finances its operations with internally generated resources and banking facilities. As at 31 December 2010, BB Jinhuangshan had bank and cash balances amounted to approximately HK$37.5 million (2009: HK$35.8 million). Net current assets of BB Jinhuangshan increased from approximately HK$17.6 million as at 31 December 2009 to approximately HK$65.9 million as at 31 December 2010. The improvement in net current position was mainly due to the arising amount due from a fellow subsidiary and the increased in trade receivables and partly offset by the decrease in prepayments, deposits and other receivables.

– II-44 –

APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

As at 31 December 2010, BB Jinhuangshan had borrowing and banking facilities of HK$81.5 million (2009: HK$82.0 million) which were repayable within one year. Among the bank loans, approximately HK$57.9 million were secured bank loans and approximately HK$47.3 million were borrowed at fixed interest rates.

As at 31 December 2010, the bank borrowings of BB Jinhuangshan were secured by the pledge of property, plant and equipment of approximately HK$96.7 million, pledge of prepaid land lease payments of approximately HK$3.2 million and corporate guarantee given by a fellow subsidiary.

The gearing ratio was 39.8% (2009: 50.0%) as at 31 December 2010. The improvement was mainly due to the increase in shareholders’ equity as a result of the strong financial performance of BB Jinhuangshan during the year ended 31 December 2010.

As at 31 December 2010, BB Jinhuangshan had no capital commitment.

As at 31 December 2010, BB Jinhuangshan did not provide any guarantees for any third party and had no significant contingent liabilities.

Material acquisitions and disposals

During the year ended 31 December 2010, BB Jinhuangshan did not have any material acquisitions or disposals.

Capital structure

There was no significant change in the capital structure of the Target throughout the year. BB Jinhuangshan was mainly financed by internal resources and bank borrowings.

BB Jinhuangshan had exposure to foreign currency risk as most of its business transactions, assets and liabilities were principally denominated in RMB. BB Jinhuangshan did not have a foreign currency hedging policy in respect of foreign currency exposure.

Human resources

As at 31 December 2010, BB Jinhuangshan had over 430 full time employees in the PRC. Total staff costs (including directors’emoluments) amounted to approximately HK$27.1 million for the year. All full time salaried employees were being paid on a monthly basis, plus a discretionary performance bonus. Factory workers were being remunerated based on a basic wages plus production incentive. In addition to salaries, BB Jinhuangshan provided staff benefits including medical insurance, and in-house training to staff.

– II-45 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

For the year ended 31 December 2009

Turnover

The turnover of BB Jinhuangshan amounted to approximately HK$333.8 million in 2009, representing a decrease of approximately 8.1% as compared to that of 2008. The decrease in revenue was mainly caused by both the reduction in customer demand and average selling price. During the year, BB Jinhuangshan was engaged in a single business segment being printing of cigarette packages, the revenue of which was solely derived from printing of cigarette packages and its operations are based in the PRC.

Gross Profit

The gross profit of BB Jinhuangshan amounted to approximately HK$96.0 million in 2009, representing an increase of approximately 0.8% as compared to that of 2008. The gross profit margin increased from approximately 26.2% for the year ended 31 December 2008 to approximately 28.8% for the year ended 31 December 2009. The gross profit margin was improved as cost control measure was strictly implemented and production technique was improved.

Other income

BB Jinhuangshan recorded other income of approximately HK$1.6 million, mainly comprising, gain on sales of scrapped materials of approximately HK$1.3 million and interest income of approximately HK$0.2 million.

Selling and distribution expenses

For the year ended 31 December 2009, the selling and distribution expenses amounted to approximately HK$1.9 million, representing approximately 0.6% of the turnover of BB Jinhuangshan. The increase of the selling and distribution expenses of BB Jinhuangshan was mainly attributable to the increase in focus on marketing to cope with the growth of BB Jinhuangshan’s turnover.

– II-46 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

Administrative expenses

For the year ended 31 December 2009, the administrative expenses amounted to approximately HK$11.5 million, representing 3.4% of the turnover of BB Jinhuangshan.

Finance costs

For the year ended 31 December 2009, the finance costs of BB Jinhuangshan amounted to approximately HK$5.3 million. All the costs represent the interest expenses in respect of bank borrowings.

Profit for the year

For the year ended 31 December 2009, the profit was approximately HK$67.6 million, representing an increase of approximately HK$10.2 million when compared with the year in 2008. The increase in profit for the year of BB Jinhuangshan was mainly attributable to the increase in gross profit of approximately HK$0.7 million as a result of the implementation of cost control measures, increase in other income of approximately HK$1.0 million (which was mainly attributable to the increase in gain on sales of scrapped materials, of approximately HK$1.0 million) and the decrease in finance costs of approximately HK$1.0 million and the decrease in income tax expenses of approximately HK$8.0 million.

Dividend amounted to approximately HK$52.7 million was declared for the year.

Financial position and liquidity

BB Jinhuangshan generally finances its operations with internally generated resources and banking facilities. As at 31 December 2009, BB Jinhuangshan had bank and cash balances amounted to approximately HK$35.8 million (2008: HK$49.8 million). Net current assets of BB Jinhuangshan increased from approximately HK$10.5 million as at 31 December 2008 to approximately HK$17.6 million as at 31 December 2009. The improvement in net current position was mainly due to the increase in prepayments, deposits and other receivables and partly offset by the decrease in trade receivables and the arising amount due to fellow subsidiaries.

As at 31 December 2009, BB Jinhuangshan had borrowing and banking facilities of HK$82.0 million (2008: HK$97.0 million) which were repayable within one year. Among the bank loans, approximately HK$59.2 million were secured bank loans and approximately HK$10.9 million were borrowed at fixed interest rates.

– II-47 –

APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

As at 31 December 2009, the bank borrowings of BB Jinhuangshan were secured by the pledge of property, plant and equipment of approximately HK$69.0 million and corporate guarantee given by a fellow subsidiary. The bill payables of BB Jinhuangshan were secured by the pledge of bank deposits of approximately HK$3.2 million.

The gearing ratio was 50.0% (2008: 65.8%) as at 31 December 2009. The improvement was mainly due to the increase in shareholders’ equity as a result of the strong financial performance of BB Jinhuangshan during the year ended 31 December 2009.

As at 31 December 2009, BB Jinhuangshan had no capital commitment.

As at 31 December 2009, save for the corporate guarantee of RMB30,000,000 to a bank to secure banking facilities granted to a fellow subsidiary of BB Jinhuangshan, BB Jinhuangshan did not provide any guarantees for any third party and had no significant contingent liabilities.

Material acquisitions and disposals

During the year ended 31 December 2009, BB Jinhuangshan did not have any material acquisitions or disposals.

Capital structure

There was no significant change in the capital structure of the Target throughout the year. BB Jinhuangshan was mainly financed by internal resources and bank borrowings.

Human resources

As at 31 December 2009, BB Jinhuangshan had over 460 full time employees in the PRC. Total staffs costs (including directors’emoluments) amounted to approximately HK$23.9 million for the year. All full time salaried employees were being paid on a monthly basis, plus a discretionary performance bonus. Factory workers were being remunerated based on a basic wages plus production incentive. In addition to salaries, BB Jinhuangshan provided staff benefits including medical insurance, and in-house training to staff.

– II-48 –

APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

For the year ended 31 December 2008

Turnover

The turnover of BB Jinhuangshan amounted to approximately HK$363.4 million in 2008. During the year, BB Jinhuangshan was engaged in a single business segment being printing of cigarette packages, the revenue of which was solely derived from printing of cigarette packages and its operations are based in the PRC.

Gross Profit

The gross profit of BB Jinhuangshan amounted to approximately HK$95.3 million in 2008. The gross profit margin amounted to approximately 26.2% for the year ended 31 December 2008.

Other income

BB Jinhuangshan recorded other income of approximately HK$0.6 million, mainly comprising, gain on sales of scrapped materials of approximately HK$0.4 million and interest income of approximately HK$0.2 million.

Selling and distribution expenses

For the year ended 31 December 2008, the selling and distribution expenses amounted to approximately HK$1.9 million, representing approximately 0.5% of the turnover of BB Jinhuangshan. The increase of the selling and distribution expenses of BB Jinhuangshan was mainly attributable to the increase in focus on marketing to cope with the growth of BB Jinhuangshan’s turnover.

Administrative expenses

For the year ended 31 December 2008, the administrative expenses amounted to approximately HK$10.8 million, representing 3.0% of the turnover of BB Jinhuangshan.

Finance costs

For the year ended 31 December 2008, the finance costs of BB Jinhuangshan amounted to approximately HK$6.3 million. All the costs represent the interest expenses in respect of bank borrowings.

– II-49 –

APPENDIX II FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

Profit for the year

For the year ended 31 December 2008, the profit was approximately HK$57.4 million.

Dividend amounted to approximately HK$54.5 million was declared for the year.

Financial position and liquidity

BB Jinhuangshan generally finances its operations with internally generated resources and banking facilities. As at 31 December 2008, BB Jinhuangshan had bank and cash balances amounted to approximately HK$49.8 million. Net current assets of BB Jinhuangshan amounted to approximately HK$10.5 million as at 31 December 2008.

As at 31 December 2008, BB Jinhuangshan had borrowing and banking facilities of HK$97.0 million. Among the bank loans, approximately HK$45.1 million were secured bank loans and none were borrowed at fixed interest rates.

As at 31 December 2008, the bank borrowings of BB Jinhuangshan were secured by the pledge of property, plant and equipment of approximately HK$104.9 million and corporate guarantee given by a fellow subsidiary.

The gearing ratio was approximately 65.8% as at 31 December 2008.

As at 31 December 2008, BB Jinhuangshan had capital commitments of approximately HK$1.7 million.

As at 31 December 2008, BB Jinhuangshan did not provide any guarantees for any third party and had no significant contingent liabilities.

Material acquisitions and disposals

During the year ended 31 December 2008, BB Jinhuangshan did not have any material acquisitions or disposals.

– II-50 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP AND BB JINHUANGSHAN

Capital structure

There was no significant change in the capital structure of the Target throughout the year. BB Jinhuangshan was mainly financed by internal resources and bank borrowings.

Human resources

As at 31 December 2008, BB Jinhuangshan had over 470 full time employees in the PRC. Total staff costs (including directors’emoluments) amounted to approximately HK$23.9 million for the year. All full time salaried employees were being paid on a monthly basis, plus a discretionary performance bonus. Factory workers were being remunerated based on a basic wages plus production incentive. In addition to salaries, BB Jinhuangshan provided staff benefits including medical insurance, and in-house training to staff.

– II-51 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

1. PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

(i) Introduction

The following is the unaudited pro forma financial information of the Enlarged Group after the Acquisition prepared in accordance with Rule 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of the Hong Kong Limited for the purpose of illustrating the effect of the Acquisition on the financial position of the Group as at 31 December 2010 and the results and cash flows of the Group for the year ended 31 December 2010.

The accompanying unaudited pro forma financial information of the Enlarged Group after the Acquisition is based on certain assumptions, estimates, uncertainties and other currently available financial information, and is provided for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the financial position, results and cash flows of the Group following the Acquisition Completion.

Further, the accompanying unaudited pro forma financial information of the Enlarged Group after the Acquisition does not purport to predict the Enlarged Group’s future financial position or results of operations.

Pursuant to the Acquisition Agreement as set out in this circular, the Company has conditionally agreed to acquire 100% equity interest in the Target for an aggregate consideration of HK$630,000,000, to be satisfied by the payment of refundable deposit of HK$50,000,000 and the issuance of Promissory Notes of HK$580,000,000 (subject to adjustment, if any).

The accompanying unaudited pro forma financial information of the Group as enlarged by the Acquisition has been prepared to illustrate the effect of the proposed Acquisition.

The unaudited pro forma combined statement of financial position of the Enlarged Group as at 31 December 2010 is prepared as if the BCG Acquisition and the Acquisition had been completed on 31 December 2010 and is based on (i) the audited consolidated statement of financial position of the Company as at 31 December 2010, which have been extracted from the annual report of the Company for the year ended 31 December 2010; (ii) the audited consolidated statement of financial position of the BCG Group (including BB Jinhuangshan) as at 30 September 2010 as extracted from the accountants’ report as set out in Appendix II to the BCG Circular; and (iii) the audited consolidated statement of financial position of the Target Group as at 31 December 2010 as extracted from the accountants’ report thereon as set out in Appendix II to this circular after making pro forma adjustments that are (i) directly attributable to the Acquisition; and (ii) factually supportable.

– III-1 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

The unaudited pro forma combined statement of comprehensive income and combined statement of cash flows of the Enlarged Group for the year ended 31 December 2010 are prepared as if the BCG Acquisition and the Acquisition had been completed on 1 January 2010 and are based on (i) the audited consolidated statement of comprehensive income and audited consolidated statement of cash flows of the Company for the year ended 31 December 2010, which has been extracted from the annual report of the Company for the year ended 31 December 2010; (ii) the audited consolidated income statement, audited consolidated statement of comprehensive income and audited consolidated statement of cash flows of BCG Group (including BB Jinhuangshan) for the year ended 31 December 2009 as extracted from the accountants’ report set out in Appendix II to the BCG Circular and (iii) the audited consolidation statement of comprehensive income of the Target Group for the year ended 31 December 2010, as extracted from the accountants’ report set out in Appendix II to this circular.

– III-2 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

(ii) Unaudited pro forma Combined Statement of Financial Position of the Enlarged Group

CT Group as at 31/12/2010 HK$’000 121,002 – – – – – 53,143 – 113,169 – – 25,082 75,579 387,975	BCG Group as at 30/9/2010 HK$’000 502,784 20,007 – 253,165 40,401 19,242 129,512 769 321,384 2,343 18,171 19,650 179,397 1,506,825	Target Group as at 31/12/2010 Pro forma adjustment of the BCG Acquisition Inter-company adjustment arised from BCG Acquisition Pro forma adjustment of the Acquisition HK$’000 HK$’000 HK$’000 HK$’000 2,400,000 (a) (2,400,000) (b) (1,210) (c) (50,000) (e) –	Enlarged Group HK$’000 623,786 20,007 – 253,165 40,401 19,242 182,655 769 433,343 2,343 18,171 44,732 204,976
			1,843,590

(32,773) (11,979) (36,557) (3,482) – (6,524) – – (8,767)	(330,324) (208) (316,750) (16,722) (5,067) – (24,722) (74,761) (18,457)	(71) (8,000) (f) 1,210 (c) (580,000) (e)	(369,958 (12,187 (353,307 (20,204 (5,067 (6,524 (604,722 (74,761 (27,224
(100,082)	(787,011)	(71)	(1,473,954

(2,000) (285,893) –	– (600,037) (119,777)	– (4,800) (a) 71 (2,395,200) (a) 520,009 (e) 2,400,000 (b) 825,839 (d) (825,839) (d) 8,000 (f) 109,991 (e)	(6,800 (353,050 (9,786
(287,893)	(719,814)	71 – – –	(369,636

– III-3 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

(iii) Unaudited pro forma Combined Statement of Comprehensive Income of the Enlarged Group

Turnover Cost of goods sold Other income Selling and distribution expenses Administrative expenses Other operating expenses Finance costs Share of profit from an associate Profit before tax Taxation Non-controlling interests Net Profit attributable to equity holders of the company OTHER COMPREHENSIVE INCOME Exchange difference on translating foreign operations	CT Group For the year ended 31/12/2010 HK$’000 370,031 (296,251) 4,754 (31,947) (33,870) – (3,976) – 8,741 (1,008) – 7,733 1,213 8,946	BCG Group For the year ended 31/12/2009 HK$’000 1,050,638 (718,854) 7,827 (38,331) (60,701) (9,474) (19,367) 115,192 326,930 (45,682) (49,532) 231,716 4,043 235,759	Target Group From the incorporation date to 31 December 2010 Inter-company adjustment arised from BCG Acquisition Pro forma adjustment of the Acquisition HK$’000 HK$’000 HK$’000 (4,499)(g) (71) 4,499(g) (71) 57,189 (h) (71) – (71)	Enlarged Group HK$’000 1,420,669 (1,015,105) 8,082 (70,278) (90,143) (9,474) (23,343) 115,192
				335,600 (46,690) 7,657
				296,567 5,256
				301,823

– III-4 –

APPENDIX III

FINANCIAL INFORMATION OF THE ENLARGED GROUP

(iv) Unaudited pro forma Combined Statement of Cash Flows of the Enlarged Group

CT Group For the year ended 31/12/2010 HKD’000 8,741 17,165 – 3,976 (135) 348 (126) – –	BCG Group For the year ended 31/12/2009 HKD’000 326,930 53,689 (115,192) 19,367 (1,079) 2,042 7,470 (53) (625)	Target Group From the incorporation date to 31 December 2010 Pro forma adjustment of the Acquisition HKD’000 HKD’000	Enlarged Group HKD’000 335,671 70,854 (115,192) 23,343 (1,214) 2,390 7,344 (53) (625)
29,969 (6,071) 35,027 (26,698) – 32,227 (1,474) – 30,753 135 11,298 – (2,044) – 224 – 9,613	292,549 (19,690) 60,183 1,521 (2) 334,561 (36,707) (6,542) 291,312 1,079 1,138 (111,471) (20,946) 105,372 27,273 (3,666) (1,221)	– – –	322,518 (25,761) 95,210 (25,177) (2)
			366,788 (38,181) (6,542)
			322,065 1,214 12,436 (111,471) (22,990) 105,372 27,497 (3,666)
			8,392

– III-5 –

APPENDIX III

FINANCIAL INFORMATION OF THE ENLARGED GROUP

Net cash inflow before financing activities Financing activities Payment of bank loan and other borrowings Proceeds from new bank loans Interest on bank borrowings paid Repayment to a director Payment of interest element of obligation under finance leases Payments of capital element of obligation under finance lease Repayment to ultimate holding company Dividend to non-controlling shareholders Payment for acquisition of non-controlling interest Net cash used in financing activities Increase/(decrease) in cash and cash equivalents Exchange difference Cash and cash equivalent at beginning of year/period Cash and cash equivalent at end of year/ period	CT Group For the year ended 31/12/2010 HKD’000 40,366 (39,782) 36,557 (2,940) – (1,036) (15,006) – – – (22,207) 18,159 1,164 56,256 75,579	BCG Group For the year ended 31/12/2009 HKD’000 290,091 (671,234) 637,434 (19,163) (252,431) (204) (7,238) (165) (34,703) – (347,704) (57,613) (200) 155,260 97,447	Target Group From the incorporation date to 31 December 2010 Pro forma adjustment of the Acquisition HKD’000 HKD’000 – (50,000)(e) – – (50,000) – –	Enlarged Group HKD’000 330,457 (711,016) 673,991 (22,103) (252,431) (1,240) (22,244) (165) (34,703) (50,000)
				(419,911)
				(89,454) 964 211,516
				123,026

– III-6 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

(v) Notes to the unaudited pro forma financial information of the Enlarged Group

(a) For the purpose of the unaudited pro forma statement of financial position of the Enlarged Group, the directors of the Company assumed the fair value of the total consideration for the acquisition of the BCG Group to be HK$2,400,000,000, which is to be satisfied by the issuance and allotment of 480,000,000 shares with par value of HK$0.01 each at the issue price of HK$5 per share. This results in the increase of share capital and share premium account by HK$4,800,000 and HK$2,395,200,000 respectively.
(b) The BCG Acquisition is considered as a business combination under common control because the Company and BCG are under common control before and after the business combination. The adjustment represents the recognition of merger reserve of HK$2,399,999,992 arising from the business combination, which represents the difference between the cost of combination of HK$2,400,000,000 and the entire share capital of BCG of HK$8.
(c) The adjustments are to eliminate the inter company balances within the Enlarged Group as at 31 December 2010.
(d) The adjustment is to eliminate the pre-acquisition result of HK$825,838,622 of BCG on or before 10 September 2009, the date on which Mr. Tsoi Tak entered a sales and purchases agreement to acquire BCG from the former shareholder. Although the completion date of the sales and purchase agreement was on 25 February 2010, according to such agreement, the former shareholder of BCG deconsolidated the net assets of BCG Group after 10 September 2009 and not be involved in the financial and operational policies of BCG Group with effect from the same date. Therefore, from 10 September 2009, the common control as detailed in note (b) exists. The elimination of the pre-acquisition result also effected in an adjustment to the merger reserve of the same amount.
(e) For the acquisition of the Target Group, the directors of the Company assumed the fair value of the total consideration to be HK$630,000,000, which is to be satisfied by the payment of refundable deposit of HK$50,000,000 and the issuance of Promissory Notes of HK$580,000,000. The Promissory Notes are unsecured, bear an interest at 2% per annum and are repayable 24 months after the date of issuance. This adjustment will have continuing effect to the cash flows of the Group in the subsequent financial years.

As the acquisition does not result in the gain/loss of control by the Group over BB Jinhuangshan, the excess of the fair value of consideration transferred over the decrease in carrying value of non-controlling interest as at 31 December 2010 is recognised directly in equity.

– III-7 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

For the purpose of the unaudited pro forma statement of financial position of the Enlarged Group, the directors of the Company assumed the payables of the Target Group in relation to the acquisition of the equity interest in BB Jinhuangshan will be fully repaid by the former shareholder before the completion of the Acquisition.

(f) The adjustment represents the accrual for the estimated legal and professional costs of approximately HK$8,000,000 directly attributable to the acquisition of BCG by the Company.
(g) The adjustments are to eliminate the inter company transactions within the Enlarged Group, being the rental between 深圳市科彩印務有限公司 (Shenzhen Kecai Printing Co., Ltd.*) and CT Shenzhen, (both are indirect wholly owned subsidiaries of the Company upon completion of the BCG Acquisition). The lease will be expired on May 2013 and therefore this adjustment will have continuing effect to the subsequent financial years.
(h) The adjustment represents the reversal of profit attributable to the non-controlling shareholders of BB Jinhuangshan for the year ended 31 December 2010 as the pro-forma combined statement of comprehensive income is prepared as if the acquisition has been completed on 1 January 2010. This adjustment will not have continuing effect to the Group.

– III-8 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

2. ACCOUNTANT’S REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is the text of a report from RSM Nelson Wheeler, Certified Public Accountants, in respect of the unaudited pro forma financial information of the Enlarged Group as set out in this Appendix and prepared for the sole purpose of inclusion in this circular.

中瑞岳華（香港）會計師事務所

29th Floor Caroline Centre Lee Gardens Two 28 Yun Ping Road Hong Kong

24 June 2011

The Board of Directors Brilliant Circle Holdings International Limited (formerly known as CT Holdings (International) Limited) Suites 2301-2, 23rd Floor Tower 2, Nina Tower 8 Yeung Uk Road Tsuen Wan New Territories Hong Kong

Dear Sirs,

We report on the unaudited pro forma financial information of Brilliant Circle Holdings International Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), which has been prepared by the directors of the Company, for illustrative purposes only, to provide information about how the proposed acquisition of the remaining equity interest in an indirectly non-wholly owned subsidiary of the Company might have affected the financial information of the Group presented, for inclusion in Appendix III to the circular of the Company dated 24 June 2011 (the “Circular”). The basis of preparation of the unaudited pro forma financial information is set out on page III-1 to III-8 to the Circular.

Respective Responsibilities of Directors of the Company and Reporting Accountants

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

– III-9 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

It is our responsibility to form an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the unaudited pro forma 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 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 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 29(1) of Chapter 4 of the Listing Rules.

The unaudited pro forma financial information is for illustrative purposes only, based on the judgements and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of:

the financial position of the Group as at 31 December 2010 or any future date; or
the results and cash flows of the Group for the year ended 31 December 2010 or any future periods.

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

– III-10 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

(c) the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

Yours faithfully, RSM Nelson Wheeler Certified Public Accountants Hong Kong

– III-11 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

3. INDEBTEDNESS STATEMENT

Borrowings

As at the close of business on 30 April 2011, being the latest practicable date for the purpose of this indebtedness statement, the Group had outstanding indebtedness of approximately HK$398 million, comprising secured bank borrowings of approximately HK$372 million, unsecured bank borrowings of approximately HK$12 million, and obligation under finance lease of approximately HK$14 million.

As at 30 April 2011, the Group had pledged bank deposits of approximately HK$59 million, factored trade receivables of approximately HK$22 million, property, plant and equipment of approximately HK$224 million and prepaid land lease payments of approximately HK$21 million to secure the bank loans granted to the Group. The obligation under finance lease of the Group was secured by the charge over the leased assets of approximately HK$45 million.

As at 30 April 2011, the Target Group had outstanding indebtedness of approximately HK$71,000, representing the amount due to a director. The amount due to a director is unsecured, interest free and has no fixed terms of repayment.

Contingent liabilities

As at 30 April 2011, the Group did not have material contingent liabilities.

As at 30 April 2011, a subsidiary of the Group had issued a corporate guarantee or RMB 260 million (equivalent to about HK$311.1 million) to a bank to secure banking facilities granted to a related company and the maximum liability of the Group under the guarantee was RMB 260 million (equivalent to about HK$311.1 million).

Save as disclosed above and apart from intra-group liabilities, the Enlarged Group did not have any outstanding debt securities issued and outstanding or authorized or otherwise created but unissued, term loans, other borrowings or indebtedness in the nature of borrowings including bank overdrafts, liabilities under acceptances (other than normal trade bills), acceptance credits, material hire purchase commitments, mortgages and charges, material contingent liabilities and guarantees outstanding at the close of business on 30 April 2011.

The Directors have confirmed that there have not been any material adverse changes in the indebtedness and contingent liabilities of the Enlarged Group since 30 April 2011 and up to the Latest Practicable Date.

– III-12 –

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

4. WORKING CAPITAL STATEMENT

The Directors, after due and careful enquiry, are of the opinion that following the Acquisition Completion, after taking into account the available internal resources, the banking and other credit facilities available to the Enlarged Group, the Enlarged Group has sufficient working capital for its present requirements for at least the next 12 months from the date of this circular, in the absence of unforeseeable circumstances.

5. FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

The Group is principally engaged in the printing of cigarette packages for PRC cigarette manufacturers and provision of printing services to customers including international publishers and multi-national corporations.

Upon the completion of BCG Acquisition, the Group has been engaging in the cigarette package printing business in the PRC, which is by far the largest cigarette manufacturer by country and has the highest level of cigarette consumption. The Directors are optimistic on the market demand of cigarette and the growth potential of the cigarette package printing business given the large population of smokers in the PRC and the expected economic growth and improved consumer spending power in recent years. At present, BB Jinhuangshan is an indirect non-wholly owned subsidiary of the Company. Upon Acquisition Completion, the Target Group and BB Jinhuangshan will become indirect wholly-owned subsidiaries of the Company. Taking into account the positive and stable track record of BB Jinhuangshan and the established scale of the operation of BB Jinhuangshan and its continuous growing potential, it is expected that the Target Group will be able to contribute recurring cash flow and favourable returns to the Enlarged Group.

– III-13 –

APPENDIX IV

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(i) Interests of the Directors and the chief executive of the Company

As at the Latest Practicable Date, the interests of the Directors and chief executive of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required 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 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 required pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as contained in Appendix 10 to the Listing Rules were as follows:

(a) The Company

Name of Director Capacity Mr. Tsoi Tak Interest of controlled corporation Beneficial owner Mr. Cai Xiao Ming, David Interest of controlled corporation	Number of Shares held Position Approximate percentage of the issued share capital of the Company 135,000,000 (Note 1) Long 19.64% 239,016,000 Long 34.76% 374,016,000 54.40% 45,000,000 (Note 2) Long 6.55%	Number of Shares held Position Approximate percentage of the issued share capital of the Company 135,000,000 (Note 1) Long 19.64% 239,016,000 Long 34.76% 374,016,000 54.40% 45,000,000 (Note 2) Long 6.55%
		54.40%

		6.55%

– IV-1 –

APPENDIX IV

GENERAL INFORMATION

Notes:

These Shares are held by Profitcharm Limited (“Profitcharm”), the entire issued share capital of which is wholly and beneficially owned by Mr. Tsoi Tak. By virtue of the SFO, Mr. Tsoi Tak is deemed to be interested in the entire 135,000,000 Shares held by Profitcharm.
These shares are held by Sinorise International Limited (“Sinorise”), the entire issued share capital of which is wholly and beneficially owned by Mr. Cai Xiao Ming, David. By virtue of the SFO, Mr. Cai Xiao Ming, David, is deemed to be interested in the entire 45,000,000 Shares held by Sinorise.
(b) Associated corporation

					Percentage of
				Number of	shareholding
Name of	Name of			shares in the	in the
associated	registered			associated	associated
corporation	owner	Capacity	Position	corporation	corporation
Profitcharm	Mr. Tsoi	Beneficial	Long	200 shares of	100%
	Tak	owner		US$1.00
				each

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company had any beneficial or deemed interests or short positions in the Shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as contained in Appendix 10 to the Listing Rules.

– IV-2 –

APPENDIX IV

GENERAL INFORMATION

(ii) Persons who have an interest or short position which is disclosable under Divisions 2 and 3 of Part XV of the SFO

Save as disclosed below, the Directors and the chief executive of the Company were not aware that there was any person who, as at the Latest Practicable Date, had an interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would fall to be disclosed under provisions of Division 2 and 3 of Part XV of the SFO:

				Approximate
				percentage of
				the issued share
		Number of		capital of the
Name of Shareholder	Capacity	Shares held	Position	Company
Profitcharm_(Note 1)_	Beneficial owner	135,000,000	Long	19.64%
Sinorise_(Note 2)_	Beneficial owner	45,000,000	Long	6.55%
ACOF Asia	Interest of	90,984,000	Long	13.23%
Management, L.P.	controlled
	corporation
Ares BCG Holdings,	Beneficial owner	90,984,000	Long	13.23%
L.P.
Ares Management	Interest of	90,984,000	Long	13.23%
(Cayman), Ltd.	controlled
	corporation
Partners Group	Beneficial owner	51,476,000	Long	7.49%
Holding AG

Notes:

Profitcharm is a company incorporated in the BVI with limited liability which is wholly and beneficially owned by Mr. Tsoi Tak.
Sinorise is a company incorporated in the BVI with limited liability which is wholly and beneficially owned by Mr. David Cai.

– IV-3 –

APPENDIX IV

GENERAL INFORMATION

(iii) Substantial shareholders

Save as disclosed below, the Directors and the chief executive of the Company were not aware that there was any person who, as at the Latest Practicable Date, was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Enlarged Group:

			Approximate
			percentage of
			shareholding
			in the
	Equity interest held in		members of
	the members of the		the Enlarged
Name of shareholder	Enlarged Group	Position	Group
襄樊捲煙廠	US$612,000 in the	Long	20.4%
(Xiangfan Cigarette	registered capital of
Factory)	襄樊金飛環彩色包裝有限公司
	(Xiangfan Jinfeihuan
	Colour Package Co.,
	Ltd) (“XF Jinfeihuan*”)
昭通龍泉實業有限公司	US$200,000 in the	Long	20%
(Zhao Tong Longquan	registered capital of
Enterprises Limited*)	昭通安通包裝材料有限公司
	(Zhaotong Antong
	Package Material Co.,
	Ltd*)

3. COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors and their respective associates has any interest in a business, apart from the Group’s business which competes, or is likely to compete, either directly or indirectly, with the business of the Group pursuant to Rule 8.10 of the Listing Rules if each of them were a controlling shareholder of the Company.

4. DIRECTORS’ SERVICE CONTRACT

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Enlarged Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

– IV-4 –

APPENDIX IV

GENERAL INFORMATION

5. DIRECTORS’ INTERESTS IN CONTRACTS AND ASSETS

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to any business of the Enlarged Group.

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2010 (being the date up to which the latest published audited accounts of the Group were made up), (i) acquired or disposed of by; or (ii) leased to; or (iii) proposed to be acquired or disposed of by; or (iv) proposed to be leased to, any member of the Enlarged Group.

6. LITIGATION

A subsidiary of the Company received a writ of summons with an endorsement of claim dated 17 June 2011 under which the plaintiff claims damages against the Group for breach of contract and for loss sustained in relation to shipment and delivery of defective goods. According to the letter served by the plaintiff’s solicitors dated 14 June 2011, there are allegations against the Group for: (i) overcharging resulting in the loss of about US$88,548; and (ii) delivery of defective goods resulting in the anticipated loss and damage of about US$346,618. The Group has engaged legal counsel to seek advice and handle the proceedings.

Save as disclosed above, as at the Latest Practicable Date, so far as the Directors were aware, no member of the Enlarged Group was engaged in any litigation or claims of material importance and no litigation or claims of material importance was known to the Directors to be pending or threatened by or against any member of the Enlarged Group.

7. MATERIAL CONTRACTS

The following material contracts, not being contracts entered into in the ordinary course of business of the Group, have been entered into by members of the Enlarged Group within two years immediately preceding the Latest Practicable Date and is or may be material:

(i) The Group

(a) The sale and purchase agreement dated 29 March 2010 and entered into between the Purchaser as vendor and 深圳市鶴韻投資有限公司 (Shenzhen City Heyun Investments Co., Ltd.*) as purchaser for the disposal of 13.85% equity interests in CD Goldroc at a consideration of approximately RMB35.8 million;
(b) The corporate guarantee dated 12 July 2010 and entered into by 深圳市科彩印務有限公司 (Shenzhen Kecai Printing Co., Ltd) in favour of 招商銀行股份有限公司深圳泰然支行 (Tairan Branch, Shenzhen, China Merchants Bank Co., Ltd.) to secure the banking facilities granted to 深

– IV-5 –

APPENDIX IV

GENERAL INFORMATION

圳天利地產集團有限公司 (Shenzhen Tianli Property Group Limited*) up to the amount of RMB260 million;

(c) The master sales agreement dated 28 December 2010 and entered into by XF Jinfeihuan and 襄樊捲煙廠 (Xiangfan Cigarette Factory) in respect of the sale of the cigarette packages and related services supplied by the Group to 湖北中煙工業有限責任公司 (China Tobacco Hubei Industrial Co., Ltd.) for each of the three years ending 31 December 2013 of up to RMB230 million, RMB 250 million and RMB300 million respectively;
(d) The sale and purchase agreement dated 29 December 2010 (as supplemented on 25 March 2011) and entered into among the Company, CT Management Investments Limited, a wholly-owned subsidiary of the Company, as purchaser and Mr. Tsoi Tak, the chairman of the Board, an executive Director and a controlling Shareholder, as vendor in relation to the BCG Acquisition;
(e) The placing agreement dated 11 May 2011 and entered into between the Company and Goldin Equities Limited in relation to the placing of up to 7,500,000 Shares at HK$8.00 per Share; and
(f) The Acquisition Agreement.

(ii) The Target Group

(a) The sale and purchase agreement dated 21 February 2011 and entered into between Sanbond and Maoming Investments in relation to the acquisition of the 47.36% equity interest in BB Jinhuangshan.

8. EXPERTS AND CONSENTS

The following are the name and qualification of the experts who have given opinion or advise, which are contained or referred to in this circular:

Name Qualification Ample Capital a licensed corporation to carry out type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO RSM Nelson Wheeler Certified Public Accountants

Each of Ample Capital and RSM Nelson Wheeler has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and report and references to its name in the form and context in which they appear.

– IV-6 –

APPENDIX IV

GENERAL INFORMATION

As at the Latest Practicable Date, each of Ample Capital and RSM Nelson Wheeler did not have any direct or indirect shareholding in any member of the Enlarged Group or any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for any securities in any member of the Enlarged Group.

As at the Latest Practicable Date, each of Ample Capital and RSM Nelson Wheeler did not have any direct or indirect interest in any assets which had been, since 31 December 2010 (the date to which the latest published audited consolidated accounts of the Group were made up), acquired or disposed of by, or leased to, or are proposed to be acquired or disposed of by, or leased to, any member of the Enlarged Group.

9. GENERAL INFORMATION

(a) The company secretary of the Company is Mr. Yau Chung Hang, who is a fellow member of the Association of Chartered Certified Accountants and certified public accountants of the Hong Kong Institute of Certified Public Accountants.
(b) 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 of the Company in Hong Kong is at Suites 2301-2, 23rd Floor, Tower Two, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, New Territories, Hong Kong.
(c) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(d) The English text of this circular shall prevail over the Chinese text in case of discrepancy.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the Company’s principal place of business in Hong Kong at Suites 2301-2, 23rd Floor, Tower Two, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, New Territories, Hong Kong during normal office hours from 9:30 a.m. to 12:30 p.m. and from 2:30 p.m. to 5:30 p.m. 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 material contracts referred to in the section headed “Material contracts” in this Appendix;

– IV-7 –

APPENDIX IV

GENERAL INFORMATION

(c) the annual reports of the Company for each of the two years ended 31 December 2009 and 2010;
(d) the accountants’ reports on the Target Group and BB Jinhuangshan, the text of which is set out in Appendix II to this circular;
(e) the letter from RSM Nelson Wheeler on the unaudited pro forma financial information of the Enlarged Group, the text of which is set out in Appendix III to this circular;
(f) the letter from Ample Capital, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, containing its advice to the Independent Board Committee and the Independent Shareholders, the text of which is set out in the section headed “Letter from Ample Capital” in this circular;
(g) the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the text of which is set out in the section headed “Letter from the Independent Board Committee” in this circular;
(h) the written consents referred to in this section headed “Experts and consents” in this Appendix;
(i) the BCG Circular; and
(j) this circular.

– IV-8 –

NOTICE OF EGM

BRILLIANT CIRCLE HOLDINGS INTERNATIONAL LIMITED 貴聯控股國際有限公司

(formerly known as CT Holdings (International) Limited 詩天控股（國際）有限公司 )

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1008)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ EGM ”) of Brilliant Circle Holdings International Limited (the “ Company ”) will be held at Sportful Garden Restaurant, Shop No. 312, 3rd Floor, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, New Territories, Hong Kong on Wednesday, 13 July 2011 at 11:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

(a) the sale and purchase agreement (the “ Sale and Purchase Agreement ”) entered into between Brilliant Circle Development Limited as purchaser and Best Modern Holdings Limited (the “ Vendor ”) as vendor dated 24 May 2011 in relation to the acquisition (the “ Acquisition ”) of 100 ordinary shares of US$1.00 each in the issued share capital of Champion League Investment Holdings Limited (the “ Target ”) at a consideration of HK$630,000,000, a copy of the Sale and Purchase Agreement having been produced to the EGM and marked “A” and initialed by the chairman of the EGM for the purpose of identification, and the transactions contemplated thereby be and are hereby approved, confirmed and ratified;
(b) the issue of a promissory note (the “ Promissory Note ”) up to the principal amount of HK$580,000,000 bearing interest at the rate of 2% per annum by the Company to the Vendor pursuant to the terms and conditions of the Sale and Purchase Agreement be and is hereby approved; and
(c) any one or more directors of the Company be and are hereby authorised to do all such acts and things as he/she/they consider(s) necessary or expedient for the purpose of giving effect to the Sale and Purchase Agreement and completing the transactions contemplated thereby including but not limited to the issue of the Promissory Note.”

By order of the Board

Brilliant Circle Holdings International Limited Kiong Chung Yin, Yttox

Executive Director

Hong Kong, 24 June 2011

– EGM-1 –

NOTICE OF EGM

Registered office: Head office and principal place of Cricket Square business in Hong Kong: Hutchins Drive Suites 2301-2, 23rd Floor P.O. Box 2681 Tower Two, Nina Tower Grand Cayman KY1-1111 8 Yeung Uk Road Cayman Islands Tsuen Wan New Territories 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 of association of the Company, vote in his stead. A proxy need not be a member of the Company.
In order to be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, at the offices of the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time for holding the meeting or adjourned meeting.
Completion and return of the form of proxy will not preclude a member of the Company from attending in person and voting at the EGM or any adjournment thereof should he/she/it so wish.

– EGM-2 –

AI assistant

Litu Holdings Limited — Proxy Solicitation & Information Statement 2011

49624_rns_2011-06-23_0e480d11-4f85-4e92-b217-198ebd749be4.pdf

BRILLIANT CIRCLE HOLDINGS INTERNATIONAL LIMITED 貴聯控股國際有限公司

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY AND NOTICE OF EXTRAORDINARY GENERAL MEETING

DEFINITIONS

BRILLIANT CIRCLE HOLDINGS INTERNATIONAL LIMITED 貴聯控股國際有限公司

(Stock Code: 1008)

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY

INTRODUCTION

THE ACQUISITION AGREEMENT

Date

Assets to be acquired

Consideration

Conditions precedent

Completion

INFORMATION ON THE TARGET GROUP

Background information

Group structure

As at the Latest Practicable Date

Financial information of the Target Group and BB Jinhuangshan

REASONS FOR THE ACQUISITION

FINANCIAL EFFECT OF THE ACQUISITION

LISTING RULES IMPLICATIONS

THE EGM

RECOMMENDATION

ADDITIONAL INFORMATION

BRILLIANT CIRCLE HOLDINGS INTERNATIONAL LIMITED 貴聯控股國際有限公司

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY

Yours faithfully,

Lam Ying Hung, Andy

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE REMAINING INTEREST IN AN INDIRECT NON-WHOLLY OWNED SUBSIDIARY OF THE COMPANY

INTRODUCTION

BASIS OF ADVICE

PRINCIPAL FACTORS CONSIDERED

1. Background information on the Group

2. Information on the Target Group

LETTER FROM AMPLE CAPITAL

3. Reasons for the Acquisition

4. Terms of the Acquisition

4.1 The consideration

4.2 The Promissory Note

4.3 Conclusion regarding the Acquisition

5. Financial impacts of the Acquisition

5.1 Earnings

5.2 Net assets

5.3 Liquidity

5.4 Gearing

CONCLUSION

1. FINANCIAL INFORMATION OF THE GROUP

2. MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

(a) Management discussion and analysis of the CT Group

For the year ended 31 December 2010

Turnover

Gross Profit

Other revenue and other income

Selling expenses

Administrative expenses

Finance costs

Profit for the period attributable to owners of the CT Group

Financial position and liquidity

Material acquisitions and disposals

Capital structure

Human resources

For the year ended 31 December 2009

Turnover

Gross Profit

Other revenue and other net income

Selling expenses

Administrative expenses

Finance costs

Profit attributable to owners of the CT Group

Financial position and liquidity

Material acquisitions or disposals

Capital structure

Human resources

For the year ended 31 December 2008

Turnover

Gross profit

Other revenue and other net income

Litu Holdings Limited Proxy Solicitation & Information Statement 2011