Long Investment Corp - Proxy Solicitation & Information Statement 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Shui On Construction and Materials Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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.

This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares. In particular, this circular does not constitute an offer document of the Offer.

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(Stock Code: 983)

MAJOR TRANSACTION

RECOMMENDED OFFER BY SHUI ON CONSTRUCTION AND MATERIALS LIMITED TO ACQUIRE ALL OF THE ISSUED SHARES OF CHINA CENTRAL PROPERTIES LIMITED NOT ALREADY OWNED BY SHUI ON CONSTRUCTION AND MATERIALS LIMITED AND ITS SUBSIDIARIES

Financial Adviser to Shui On Construction and Materials Limited

A letter from the SOCAM Board is set out on pages 9 to 29 of this circular.

A notice convening a special general meeting of the Company to be held at Room 103, 1st Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong on Wednesday, 3 June 2009 at 3:15 p.m. (or so soon thereafter as the annual general meeting of the Company convened at the same place and date at 3:00 p.m. shall have concluded or adjourned) is set out on pages 342 to 343 of this circular. Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong as soon as possible and, in any event, not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting and any adjourned meeting (as the case may be) should you so wish.

* for identification purpose only

15 May 2009

			Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			1
Letter from the	SOCAM Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9
Appendix I	—	Conditions of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Appendix II	—	Financial information on the SOCAM Group . . . . . . . . . . . . . . . . . .	41
Appendix III	—	Accountants’ Report on CCP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	137
Appendix IV	—	Management discussion and analysis on CCP . . . . . . . . . . . . . . . . . .	197
Appendix V	—	Pro forma financial information on the Enlarged Group . . . . . . . . .	202
Appendix VI	—	Property Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	215
Appendix VII	—	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	321
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			342

— i —

DEFINITIONS

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

Accounting Date 31 December 2008 AIM AIM, a market operated by the London Stock Exchange AIM Rules the AIM Rules for Companies as published by the London Stock Exchange from time to time associates has the meaning ascribed to it under the HK Listing Rules BIL Brilliance Investments Limited, a wholly-owned subsidiary of SOCAM Bloomberg global provider of financial news and data through its terminals and television channel, known as Bloomberg Bondholder Meeting the meeting of the Convertible Bondholders to consider and, if thought fit, to approve the Bond Cancellation Bond Cancellation the cancellation CCP of all the

the proposed cancellation by CCP of all the outstanding Convertible Bonds to be effected by way of cancellation of the Trust Deed, in accordance with the terms of the Trust Deed, pursuant to which (subject to satisfaction of certain conditions including the Offer being made and it becoming or being declared unconditional in all respects (save for any condition of the Offer which requires payment to the Convertible Bondholders (or their respective nominees) to have been made pursuant to the proposed cancellation)) the Convertible Bondholders will receive from CCP a cash payment in US dollars which represents 90.00% of the principal amount of their Convertible Bonds in consideration for the early cancellation of their Convertible Bonds

Business Day a day not being Saturday or Sunday when banks generally are open in the City of London and Hong Kong for the transaction of general business Cancellation Deed the cancellation deed to be made between CCP and The Hongkong and Shanghai Banking Corporation Limited in relation to the Bond Cancellation

CCP

China Central Properties Limited, a company incorporated in the Isle of Man with limited liability (registration number 000480V) and whose shares are admitted to trading on AIM

— 1 —

DEFINITIONS

CCP (BVI)

China Central Properties (BVI) Limited (formerly known as Tancherry Holdings Limited), a company incorporated in the British Virgin Islands and which is the intermediate holding company of the CCP Group

CCP Board the board of CCP Directors

CCP Director(s) director(s) of CCP CCP Group CCP, its subsidiaries and its subsidiary undertakings CCP Independent Directors the CCP Directors who are independent in relation to the Offer, being Mr. David Eldon, Mr. Chan, Kay-Cheung, Mr. Alexander R. Hamilton and Mr. Tsang Kwok Tai, Moses

CCP Shareholders the holders of CCP Shares CCP Shares means:

(a) the existing unconditionally allotted or issued and fully paid ordinary shares of 1.00 pence each in the capital of CCP; and
(b) any further shares of 1.00 pence each in the capital of CCP which are unconditionally allotted or issued and fully paid before the Offer closes or lapses

certificated form

a share or other security which is not in uncertificated form (that is, not recorded on the relevant register as being held in uncertificated form in CREST, the relevant system operated by Euroclear UK & Ireland Limited in accordance with which securities may be held or transferred in uncertificated form)

City Code The City Code on Takeovers and Mergers of the United Kingdom

City Code Undertaking the undertaking that has been entered into by SOCAM and CCP dated 12 May 2009, pursuant to which, amongst other things, SOCAM and CCP have mutually undertaken, for so long as the Offer is still open for acceptance and the CCP Independent Directors continue to recommend the Offer, to comply (subject to a number of agreed derogations) with the City Code, so far as applicable, in the conduct and execution of the Offer as though CCP were subject to the City Code

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DEFINITIONS

Closing Price the closing middle market quotation of the relevant share as derived from the Daily Official List for the CCP Shares and the daily closing price as derived from the daily quotation sheets of the HK Stock Exchange for the SOCAM Shares Competition Commission the body known as the “Competition Commission” as referred to in section 45 of the Competition Act 1998 of the UK connected person(s) has the meaning ascribed to it under the HK Listing Rules controlling shareholder has the meaning ascribed to it under the HK Listing Rules Convertible Bondholders the holders of the Convertible Bonds Convertible Bonds the 2.00% convertible bonds issued by CCP on 13 June 2007 and due on 13 June 2012 Convertible Bonds Trustee The Hongkong and Shanghai Banking Corporation Limited, the trustee of the Convertible Bonds Daily Official List the daily official list of the London Stock Exchange Deloitte Deloitte Touche Tohmatsu Deutsche Bank Deutsche Bank AG and any of its affiliates Disclosed (a) disclosed in CCP’s annual reports and accounts for firstly the period from 9 February 2007 (being the date of incorporation of CCP) to 31 December 2007 or secondly the financial year ended 31 December 2008; or (b) fairly disclosed to SOCAM or its advisers in writing before the date of the Joint Announcement; or (c) publicly announced to a Regulatory Information Service (as defined in the AIM Rules) by or on behalf of CCP prior to the Joint Announcement Enlarged Group the SOCAM Group immediately after the completion of the Offer Final Dividend The final dividend of 0.50 pence per CCP Share announced by CCP in respect of the year ended 31 December 2008 and paid on 6 May 2009 to CCP Shareholders on the register of members on 17 April 2009 Form of Acceptance the form of acceptance and authority relating to the Offer which will accompany the Offer Document FTSE AIM All Share Index The Financial Times Stock Exchange AIM All Share Index, a capitalisation-weighted index of emerging and smaller companies traded on the London Stock Exchange

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DEFINITIONS

HK Listing Rules the Rules Governing the Listing of Securities on the HK Stock Exchange HK Stock Exchange The Stock Exchange of Hong Kong Limited HK Unilateral Announcement the announcement released by SOCAM in Hong Kong on 7 April 2009 in relation to the Initial Offer Hong Kong the Hong Kong Special Administrative Region of the PRC Initial Mixed Offer 0.47432 New SOCAM Shares and 27.50 pence in cash for each CCP Share Initial Offer the Initial Share Offer and the Initial Mixed Offer which were proposed by SOCAM to acquire the entire issued share capital of CCP not already owned by the SOCAM Group, and which have been replaced by the Offer in all respects Initial Share Offer 0.94864 New SOCAM Shares for each CCP Share Investment Management the 10-year investment management agreement dated 12 April Agreement 2007 between Tancherry Holdings Limited (subsequently renamed CCP (BVI)), SAM and SOCAM. Joint Announcement the joint announcement by SOCAM and CCP dated 12 May 2009 announcing the recommended Offer Last Practicable Date 8 May 2009, being the latest practicable date prior to the printing of this circular for ascertaining certain information herein London Stock Exchange London Stock Exchange plc LSOC Lafarge Shui On Cement Limited, a joint venture company between Financiere Lafarge (a wholly-owned subsidiary of Lafarge S.A.) and a wholly-owned subsidiary of SOCAM Mixed Offer 0.575 New SOCAM Shares and 32.50 pence in cash for each CCP Share MOFCOM Ministry of Commerce of the PRC New SOCAM Shares the SOCAM Shares proposed to be issued and credited as fully paid pursuant to the Offer

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DEFINITIONS

Offer	the Share Offer and the Mixed Offer, recommended by the
	CCP Independent Directors, made by SOCAM to acquire the
	entire issued share capital of CCP not already owned by the
	SOCAM Group on the terms and subject to the conditions to
	be set out or referred to in the Offer Document and, in relation
	to any CCP Shares in certificated form, the Form of
	Acceptance (including where the context admits, any
	subsequent revisions, variations, extensions or renewals
	thereof), and which has replaced the Initial Offer in all
	respects
Offer Document	the document dated 14 May 2009 to CCP Shareholders in
	order to make the Offer and containing, inter alia, the terms
	and conditions of the Offer
Penta	Penta Investment Advisers Limited
PRC	the People’s Republic of China (for the purpose of this
	circular, excluding Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan)
Reference Date	11 March 2009, being the last Business Day prior to the
	announcement by the CCP Board that it had received an
	approach which may or may not result in an offer being made
	for CCP
relevant authority	any central bank, government, government department or
	governmental, quasi-governmental, supranational, statutory,
	regulatory or investigative body, authority (including any
	national or supranational antitrust or merger control
	authority), court, tribunal, stock exchange, trade agency,
	professional association or institution, environmental body or
	any other person or body whatsoever in any jurisdiction
Resolution	the ordinary resolution to be proposed at the SOCAM Meeting
	as set out in the Notice of Special General Meeting which is
	set out on pages 342 and 343 of this circular
SAM	SOCAM Asset Management Limited, a wholly-owned
	subsidiary of SOCAM
Savills	Savills Valuation and Professional Services Limited
SFO	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
Share Offer	1.150 New SOCAM Shares for each CCP Share

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DEFINITIONS

SOCAM or Company Shui On Construction and Materials Limited, a company incorporated in Bermuda with limited liability and whose shares are listed for trading on the main board of the HK Stock Exchange (stock code: 983)

SOCAM Board board of SOCAM Directors SOCAM Director(s) the director(s) of SOCAM SOCAM Group SOCAM, its subsidiaries and its subsidiary undertakings SOCAM Meeting any special general meeting of holders of SOCAM Shares to be held for the purpose of approving the acquisition of the CCP Shares pursuant to the Offer SOCAM Share(s) ordinary shares of HK$1.00 each in the share capital of SOCAM SOCAM Shareholders the holders of SOCAM Shares Somerley Somerley Limited of 10/F., The Hong Kong Club Building, 3A Chater Road, Central, Hong Kong in its capacity as an independent financial adviser to CCP Spinnaker collectively, Spinnaker Global Opportunity Fund Ltd., Spinnaker Global Emerging Markets Fund Ltd. and Spinnaker Global Strategic Fund Ltd.

substantial shareholder(s) has the meaning ascribed to it under the HK Listing Rules Takeover Panel the United Kingdom Panel on Takeovers and Mergers, an independent body whose main functions are to issue and administer the City Code Trust Deed the trust deed dated 13 June 2007 constituting the Convertible Bonds

UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland UK Unilateral Announcement the announcement dated 7 April 2009 by SOCAM of its firm intention to make the Initial Offer, pre-conditional on the recommendation of the Initial Offer by the CCP Independent Directors US or United States the United States of America, its territories and possessions, any State of the United States and the District of Columbia

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DEFINITIONS

Wider CCP Group	CCP and its subsidiary undertakings	CCP and its subsidiary undertakings	and associated	and associated
	undertakings and any other undertaking		or partnership,
	company	or joint venture in which CCP and/or		such
	subsidiary	or associated undertakings (aggregating		their
	interests)	have a substantial interest (and	member of the
	Wider CCP Group shall be construed accordingly)
Wider SOCAM Group	SOCAM	and its subsidiary undertakings	and associated
	undertakings and any other undertaking		or partnership,
	company	or joint venture in which SOCAM and/or		such
	subsidiary	or associated undertakings (aggregating		their
	interests)	have a substantial interest (and	member of the
	Wider SOCAM Group shall be construed accordingly)
£ or pence	the lawful	currency of the United Kingdom
HK$	the lawful	currency of Hong Kong
RMB	the lawful	currency of the PRC
US$	the lawful	currency of the United States
%	per cent.

In the section “Letter from the SOCAM Board” and Appendix I to this circular, “ subsidiary ”, “ subsidiary undertaking ”, “ associated undertaking ” and “ undertaking ” have the meanings given by the Companies Act 2006 of the UK (but for these purposes, ignoring paragraph 19(1)(b) of Schedule 6 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008) and “ substantial interest ” means a direct or indirect interest in 20.00% or more of the equity capital of an undertaking.

In Appendix II to Appendix VII to this circular, “ subsidiary ” and “ subsidiaries ” shall have the meanings ascribed to them under the HK Listing Rules, and “ CCP Group ” shall be construed as CCP and its subsidiaries and “ SOCAM Group ” shall be construed as SOCAM and its subsidiaries for the purposes of those appendices.

In this circular:

(a) the value of the whole of the issued share capital of CCP is based upon 281,193,011 CCP Shares (being the number of existing issued shares of CCP as at the Last Practicable Date);
(b) unless otherwise stated, all historical prices of CCP Shares have been derived from the Daily Official List; and

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DEFINITIONS

(c) unless otherwise stated, the conversions of UK pound sterling and US dollars into Hong Kong dollars have been made at a rate of £1.00 to HK$11.6567, and US$1.00 to HK$7.7501 respectively, save that:
the financial information in CCP consolidated income statement (including the consolidated net profit before and after tax and extraordinary items) for the period ended 31 December 2007 has been converted using an assumed exchange rate of HK$7.8020 to US$1.00 (being the average HK$/US$ exchange rate in 2007 derived from Bloomberg);
the financial information in CCP consolidated income statement (including the consolidated net profit before and after tax and extraordinary items) for the year ended 31 December 2008 has been converted using an assumed exchange rate of HK$7.7862 to US$1.00 (being the average HK$/US$ exchange rate in 2008 derived from Bloomberg);
the financial information in CCP consolidated balance sheet (including the consolidated net asset value) at 31 December 2007 has been converted using an assumed exchange rate of HK$7.7995 to US$1.00 (being the HK$/US$ exchange rate at 31 December 2007 derived from Bloomberg);
the financial information in CCP consolidated balance sheet (including the consolidated net asset value) at 31 December 2008 has been converted using an assumed exchange rate of HK$7.7494 to US$1.00 (being the HK$/US$ exchange rate at 31 December 2008 derived from Bloomberg); and
the principal amount of the Convertible Bonds held by BIL has been converted using an assumed exchange rate of HK$7.7494 to US$1.00 (being the HK$/US$ exchange rate at 31 December 2008 derived from Bloomberg).

The above conversions are for reference only and should not be construed as representations that the UK pound sterling or the US dollar amount could be converted into Hong Kong dollars at that or any other rate.

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LETTER FROM THE SOCAM BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

Executive Directors:

Mr. Lo Hong Sui, Vincent ( Chairman ) Mr. Choi Yuk Keung, Lawrence ( Vice-Chairman ) Mr. Wong Yuet Leung, Frankie ( Chief Executive Officer ) Ms. Lau Jeny (Chief Financial Officer) Mrs. Lowe Hoh Wai Wan, Vivien

Non-executive Director: Professor Michael Enright

Independent Non-executive Directors: Mr. Anthony Griffiths Mr. Gerrit de Nys Ms. Li Hoi Lun, Helen

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

Head Office and Principal Place of Business in Hong Kong: 34th Floor Shui On Centre 6-8 Harbour Road Hong Kong

15 May 2009

To the SOCAM Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION

RECOMMENDED OFFER BY SHUI ON CONSTRUCTION AND MATERIALS LIMITED TO ACQUIRE ALL OF THE ISSUED SHARES OF CHINA CENTRAL PROPERTIES LIMITED NOT ALREADY OWNED BY SHUI ON CONSTRUCTION AND MATERIALS LIMITED AND ITS SUBSIDIARIES

INTRODUCTION

On 7 April 2009, the SOCAM Board announced the terms of a pre-conditional offer, i.e. the Initial Offer, which was intended to be made by SOCAM for the entire issued share capital of CCP not already owned by the SOCAM Group. The making of the Initial Offer was stated as being pre-conditional on the recommendation of the Initial Offer by the CCP Independent Directors. Following discussions with the CCP Independent Directors, the SOCAM Board decided to revise the

* for identification purpose only

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LETTER FROM THE SOCAM BOARD

terms of the Initial Offer from those stated in the HK Unilateral Announcement. On 12 May 2009, the SOCAM Board and the CCP Independent Directors announced the terms of the Offer to be made by SOCAM for all the CCP Shares not already owned by the SOCAM Group and that the CCP Independent Directors have unanimously recommended that CCP Shareholders to whom the Offer is made to accept the Share Offer or, in certain circumstances, consider accepting the Mixed Offer.

The acquisition of the CCP Shares by SOCAM pursuant to the Offer constitutes a major transaction for SOCAM under the HK Listing Rules, and is subject to the applicable announcement and shareholders’ approval requirements under the HK Listing Rules.

This circular provides you with information regarding the acquisition of the CCP Shares by SOCAM pursuant to the Offer, the notice to convene the SOCAM Meeting to approve, amongst other things, such acquisition and certain other information as required under the HK Listing Rules.

1. Summary of the Offer

Under the terms of the Offer, which will be subject to the conditions set out in the Appendix I to this circular and to the full terms and conditions to be set out in the Offer Document and, in the case of CCP Shares held in certificated form, the Form of Acceptance, CCP Shareholders (other than the SOCAM Group) will be entitled to receive:

For each CCP Share 1.150 New SOCAM Shares under the Share Offer

or

0.575 New SOCAM Shares and 32.50 pence in cash under the Mixed Offer

The Offer is being made on the same terms to all CCP Shareholders to whom the Offer is made, including those CCP shareholders who entered into irrevocable undertakings prior to the release of the HK Unilateral Announcement.

Fractions of New SOCAM Shares will not be allotted and issued to CCP Shareholders who accept either the Share Offer or the Mixed Offer and in all cases any fractional entitlements to New SOCAM Shares will be disregarded.

The CCP Independent Directors, who have been so advised by Somerley, consider the terms of the Offer to be fair and reasonable, and accordingly the CCP Independent Directors unanimously recommend that CCP Shareholders to whom the Offer is made accept the Share Offer or, in certain circumstances, consider accepting the Mixed Offer.

Based on HK$8.98 per SOCAM Share (being the Closing Price per SOCAM Share on 8 May 2009 (being the Last Practicable Date)) and an exchange rate of HK$11.6567 to £1.00 (being the exchange rate on 8 May 2009), the Share Offer values the entire existing issued share capital of CCP at approximately £249.12 million (approximately HK$2,903.88 million) and values each CCP Share at a price of 88.59 pence (approximately HK$10.33). Such value represents:

a 188.11% premium over the Closing Price of 30.75 pence (approximately HK$3.58) per CCP Share on 11 March 2009 (being the Reference Date);

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LETTER FROM THE SOCAM BOARD

a 284.02% premium over the average Closing Price of CCP Shares over the last 30 calendar days up to and including the Reference Date; and
a 26.11% premium over the Closing Price of 70.25 pence (approximately HK$8.19) per CCP Share on 8 May 2009, being the Last Practicable Date.

Based on the Closing Price per SOCAM Share of HK$8.98 on 8 May 2009 and an exchange rate of HK$11.6567 to £1.00 on 8 May 2009, the Mixed Offer values the entire existing issued share capital of CCP at approximately £215.95 million (approximately HK$2,517.22 million) and values each CCP Share at a price of 76.80 pence (approximately HK$8.95).

A comparison of the Offer terms to the Initial Offer terms is set out below:

					Percentage
			Initial Offer	Offer	increase
share	offer		0.94864 New	1.150 New	21.23%
			SOCAM Shares	SOCAM Shares
mixed	offer	(share element)	0.47432 New	0.575 New	21.23%
			SOCAM Shares	SOCAM Shares
mixed	offer	(cash element)	27.50 pence in cash	32.50 pence in cash	18.18%

Both the Share Offer and the Mixed Offer are made on the basis that the CCP Shareholders are entitled to retain the Final Dividend without there being any adjustment to the Offer consideration to be received by CCP Shareholders.

The CCP Shares which are the subject of the Offer will be acquired fully paid and free from all liens, charges, equities, equitable interests, encumbrances, rights of pre-emption or other third party rights of any nature and together with all rights attaching to such CCP Shares, including the right to receive all dividends and other distributions declared, paid or made on or after the date of the Offer Document other than the Final Dividend.

For illustrative purposes only, assuming that all the CCP Shareholders to whom the Offer is made, other than those who have elected to accept the Mixed Offer under the terms of their irrevocable undertakings, elect to accept the Share Offer, a total of 166,673,875 New SOCAM Shares, representing approximately 51.78% of the existing issued share capital of SOCAM, or approximately 34.11% of the issued share capital of SOCAM as enlarged by the issue of such New SOCAM Shares, will be allotted and issued in accordance with the terms of the Offer. Alternatively, assuming that all the CCP Shareholders to whom the Offer is made, other than those who have elected to accept the Share Offer under the terms of their irrevocable undertakings, elect to accept the Mixed Offer, a total of 121,827,518 New SOCAM Shares, representing approximately 37.85% of the existing issued share capital of SOCAM, or approximately 27.45% of the issued share capital of SOCAM as enlarged by the issue of such New SOCAM Shares, will be allotted and issued under the Offer and an aggregate amount of £35,534,225 (approximately HK$414,211,801) would be paid in cash to the CCP Shareholders under the Offer.

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LETTER FROM THE SOCAM BOARD

The Offer will extend to all CCP Shares unconditionally allotted or issued after the date of the Offering Document and before the time at which the Offer ceases to be open for acceptance or lapses.

An application will be made to the HK Stock Exchange for the listing of, and for permission to deal in, the New SOCAM Shares to be issued pursuant to the Offer.

The table below sets out the shareholding structure of SOCAM ascertainable by the SOCAM Directors after making all reasonable enquiries up to the Last Practicable Date and, for illustrative purposes only, the shareholding structure of SOCAM immediately following the completion of the Offer (assuming that all CCP Shareholders to whom the Offer is made accept the Offer):

Shareholders (1) Controlling shareholder of SOCAM (Note a) (2) Directors of SOCAM and its subsidiaries and their respective associates other than (1) (3) UBS AG (Note b) (4) Penta group of companies (Note c) (5) Spinnaker (Note d) (6) CCP Shareholders other than (2), (4) and (5) (7) Other public shareholders Total	Existing at the Last Practicable Date No. of SOCAM Shares % of issued share capital of SOCAM 182,293,000 56.63 2,718,000 0.84 39,041,734 12.13 20,802,631 6.46 — — — — 77,055,874 23.94 321,911,239 100.00	Assuming all the CCP Shareholders to whom the Offer is made elect to accept the Share Offer (other than those who have already elected to accept the Mixed Offer) (Scenario 1 (Note e)) No. of SOCAM Shares % of issued share capital of SOCAM 182,293,000 37.31 3,049,933 0.62 39,041,734 7.99 59,115,954 12.10 51,508,500 10.54 76,520,119 15.66 77,055,874 15.78 488,585,114 100.00	Assuming all the CCP Shareholders to whom the Offer is made elect to accept the Mixed Offer (other than those who have already elected to accept the Share Offer) (Scenario 2 (Note f)) No. of SOCAM Shares % of issued share capital of SOCAM 182,293,000 41.08 2,883,966 0.65 39,041,734 8.80 59,115,954 13.32 25,754,250 5.80 57,593,979 12.98 77,055,874 17.37 443,738,757 100.00	Assuming all the CCP Shareholders to whom the Offer is made elect to accept the Mixed Offer (other than those who have already elected to accept the Share Offer) (Scenario 2 (Note f)) No. of SOCAM Shares % of issued share capital of SOCAM 182,293,000 41.08 2,883,966 0.65 39,041,734 8.80 59,115,954 13.32 25,754,250 5.80 57,593,979 12.98 77,055,874 17.37 443,738,757 100.00
				100.00

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LETTER FROM THE SOCAM BOARD

Notes:

a. The ultimate controlling shareholder of SOCAM is Mr. Lo Hong Sui, Vincent.
b. At the Last Practicable Date, UBS AG was not regarded as a public shareholder of SOCAM under the HK Listing Rules as it was a substantial shareholder of SOCAM. On the basis set out in the above table, immediately following the completion of the Offer, UBS AG will be regarded as a public shareholder of SOCAM under the HK Listing Rules as it will no longer be a substantial shareholder of SOCAM.
c. At the Last Practicable Date, the Penta group of companies was regarded as a public shareholder of SOCAM under the HK Listing Rules. On the basis set out in the above table, immediately following the completion of the Offer, the Penta group of companies will no longer be regarded as a public shareholder of SOCAM under the HK Listing Rules as it will become a substantial shareholder of SOCAM.
d. On the basis set out in the above table, immediately following the completion of the Offer, Spinnaker will not be regarded as a public shareholder of SOCAM under the HK Listing Rules in the case of scenario 1 as it will become a substantial shareholder of SOCAM in such case.
e. The total number of New SOCAM Shares that may be issued under the Offer, as compared to that under the Initial Offer, will increase from 137,490,004 to 166,673,875 in the case of scenario 1.
f. The total number of New SOCAM Shares that may be issued under the Offer, as compared to that under the Initial Offer, will increase from 100,496,050 to 121,827,518 in the case of scenario 2.

The Offer will not result in any change of control of SOCAM, and Mr. Lo Hong Sui, Vincent will remain as the ultimate controlling shareholder of SOCAM.

Based on the information ascertainable by the SOCAM Directors after making all reasonable enquiries up to the Last Practicable Date (including the public records and the irrevocable undertakings received by SOCAM in connection with the Offer), SOCAM does not envisage any public float issue immediately following the completion of the Offer. Notwithstanding the foregoing, SOCAM will take appropriate steps to closely monitor the trading of the SOCAM Shares to ensure that it will comply with the minimum public float requirements required under the HK Listing Rules immediately following the completion of the Offer.

2. Recommendation of the Offer

The CCP Independent Directors, who have been so advised by Somerley, consider the terms of the Offer to be fair and reasonable. In providing advice to the CCP Independent Directors, Somerley has taken into account the commercial assessments of the CCP Independent Directors.

Accordingly, the CCP Independent Directors unanimously recommend that CCP Shareholders to whom the Offer is made accept the Share Offer or, in certain circumstances, consider accepting the Mixed Offer.

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LETTER FROM THE SOCAM BOARD

3. Conditions of the Offer

The Offer is conditional upon, amongst other things:

3.1 Acceptances

Valid acceptances being received in respect of not less than 90.00% (or such lower percentage as SOCAM may decide) in nominal value of the CCP Shares to which the Offer relates and not less than 90.00% (or such lower percentage as SOCAM may decide) of the voting rights carried by the CCP Shares to which the Offer relates. However, this condition will not be satisfied unless SOCAM and/or its related parties shall hold, have acquired or agreed to acquire in aggregate more than 50.00% of the voting rights then normally exercisable at a general meeting of CCP.

3.2 Completion of the Bond Cancellation

Payment being made to the Convertible Bondholders (or their respective nominees) upon the cancellation of the Convertible Bonds pursuant to the Bond Cancellation, and the Cancellation Deed having been executed by CCP and the Convertible Bonds Trustee in the form agreed between CCP and SOCAM.

3.3 Hong Kong listing approval

The HK Stock Exchange granting the unconditional approval for the listing of, and permission to deal in, the New SOCAM Shares which fall to be issued pursuant to the Offer (save for any condition in respect of proper allotment and issue of such shares and any other non-material conditions that will not affect the terms or the timing of the Offer) and such approval remaining in place.

3.4 Competition issues

Any applicable waiting periods for a response from MOFCOM having expired or been terminated and/or any anti-trust consent or approval of MOFCOM in connection with the Offer or the completion thereof having been obtained on an unconditional basis by or on behalf of SOCAM and/or CCP pursuant to the provisions of any laws or regulations in the PRC, in each case where necessary for completion of the Offer.

3.5 SOCAM Shareholders’ approval

The passing at the SOCAM Meeting (or at any adjournment of such meeting) of such resolutions as may be necessary as required under the HK Listing Rules or other applicable laws and regulations to approve, implement, and effect the Offer and the acquisition of the CCP Shares pursuant to the Offer.

Further details of the conditions of the Offer are set out in the Appendix I to this circular.

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LETTER FROM THE SOCAM BOARD

IRREVOCABLE UNDERTAKINGS AND SOCAM’S EXISTING SHARE OWNERSHIP

SOCAM has received the following irrevocable undertakings to accept the Offer:

CCP Shareholders:

Everhigh Investments Limited
OZ Master Fund, Ltd.
OZ Global Special Investments Master Fund, L.P.
OZ Asia Master Fund, Ltd.
Pacific Alliance Asia Opportunity Fund L.P.
Penta Asia Domestic Partners, L.P.
Penta Asia Long Short Fund Ltd.
Penta Master Fund, Limited

SOCAM currently holds, through its wholly-owned subsidiary, BIL, 120,588,000 CCP Shares, representing approximately 42.88% of the existing issued share capital of CCP.

SOCAM has received irrevocable undertakings from the above CCP Shareholders to accept or procure the acceptance of the Offer in respect of a total of 82,611,348 CCP Shares, representing, in aggregate, approximately 29.38% of the existing issued share capital of CCP and 51.44% of the existing issued share capital of CCP to whom the Offer is made, under which the above CCP Shareholders have, amongst other terms, agreed to accept or procure the acceptance of the Offer, and not to withdraw their acceptances of the Offer and procure that such acceptances are not withdrawn, in respect of all their respective shareholdings in CCP by no later than 5:00 p.m. (London time) of the seventh day after the despatch of the Offer Document.

SOCAM therefore owns and has received irrevocable undertakings to accept the Offer in respect of a total of 203,199,348 CCP shares, representing, in aggregate, approximately 72.26% of the existing issued share capital of CCP.

Such irrevocable undertakings will remain binding in the event of a competing offer being made for CCP but they will cease to have effect on the above CCP Shareholders on the withdrawal or lapsing of the Offer.

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LETTER FROM THE SOCAM BOARD

SOCAM has received the following irrevocable undertakings in respect of the Bond Cancellation:

Convertible Bondholders:

CQS Asia Master Fund Limited
CQS Convertible and Quantitative Strategies Master Fund Limited
Centar Investments (Asia) Ltd.
Highbridge Asia Opportunities Master Fund, L.P.
Highbridge International LLC
OZ Asia Master Fund, Ltd.
OZ Global Special Investments Master Fund, L.P.
OZ Master Fund, Ltd.
Pacific Alliance Asia Opportunity Fund L.P.
Pacific Alliance Asia Opportunity Fund Limited
Stark Master Fund, Ltd.
Value Partners Hedge Master Fund Limited
Value Partners High-Dividend Stocks Fund

SOCAM has received irrevocable undertakings from the above Convertible Bondholders to vote in favour of the resolutions to be proposed at the Bondholder Meeting to approve the Bond Cancellation. Under the terms of the irrevocable undertakings from the above Convertible Bondholders, the above Convertible Bondholders have agreed to, amongst other things: (a) remain interested in their respective interest in the Convertible Bonds until the end of the Bondholder Meeting; and (b) procure the registered holder of their respective interest in the Convertible Bonds to vote or execute the relevant written resolutions in favour of the Bond Cancellation at the Bondholder Meeting.

Such irrevocable undertakings will remain binding in the event of a competing offer being made for CCP but they will cease to have effect on the above Convertible Bondholders, amongst other things: (a) on the withdrawal or lapsing of the Offer; or (b) on the withdrawal or lapsing of the Bond Cancellation; or (c) in the case of the irrevocable undertakings from CQS Asia Master Fund Limited, CQS Convertible and Quantitative Strategies Master Fund Limited, Centar Investments (Asia) Ltd., Stark Master Fund, Ltd., OZ Asia Master Fund, Ltd., OZ Global Special Investments Master Fund, L.P.

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LETTER FROM THE SOCAM BOARD

and OZ Master Fund, Ltd., payment not being made to the Convertible Bondholders (or their respective nominees) by 30 June 2009; or (d) in the case of the irrevocable undertaking from CQS Asia Master Fund Limited, CQS Convertible and Quantitative Strategies Master Fund Limited, Centar Investments (Asia) Ltd. and Stark Master Fund, Ltd., if there are any changes to the material terms of the Bond Cancellation (for these purposes, material changes being changes to the proposed conditionality of the Bond Cancellation and the amount and timing of payment under the Bond Cancellation).

In the City Code Undertaking, in the event CCP proposes the Bond Cancellation, SOCAM has agreed to use its reasonable endeavours to ensure that, for so long as the CCP Independent Directors continue to recommend the Offer, the Convertible Bondholders who have given irrevocable undertakings to SOCAM in respect of their Convertible Bonds will comply on a timely basis with such undertakings.

THE BOND CANCELLATION

The completion of the Offer is conditional, amongst other things, on CCP first cancelling all of its outstanding Convertible Bonds. In order to effect this, the CCP Independent Directors have agreed to convene the Bondholder Meeting to approve the cancellation of the Trust Deed, in accordance with the terms of the Trust Deed and by way of the execution of the Cancellation Deed, such that the Convertible Bondholders will agree, by way of a resolution, to receive from CCP an amount in US dollars equal to 90.00% of the principal amount of the Convertible Bonds they hold in consideration of the early cancellation of such Convertible Bonds and also to authorise the Convertible Bonds Trustee to give effect to the cancellation of the Convertible Bonds by executing the Cancellation Deed.

The Bond Cancellation will be conditional on (a) the approval of 75.00% or more of the votes cast by the Convertible Bondholders at the Bondholder Meeting, (b) the Offer becoming or being declared unconditional in all respects (save for any condition of the Offer which requires payment to the Convertible Bondholders or their respective nominees to have been made pursuant to the Bond Cancellation), and (c) the CCP Independent Directors not withdrawing their recommendation for CCP Shareholders to accept the Offer.

SOCAM has received irrevocable undertakings from certain Convertible Bondholders to vote in favour of the resolutions to be proposed at the Bondholder Meeting to approve the Bond Cancellation and at any other Convertible Bondholder meetings relating to the Bond Cancellation, representing, when aggregated with SOCAM’s current holding of Convertible Bonds in the principal amount of US$25.00 million (approximately HK$193.74 million) (representing approximately 14.37% in the principal amount of the outstanding Convertible Bonds), approximately 89.37% in the aggregate principal amount of the outstanding Convertible Bonds.

SOCAM has, through BIL which holds the entire interest of SOCAM in the Convertible Bonds, given an undertaking to CCP to vote in favour of the resolutions to be proposed at the Bondholder Meeting to approve the Bond Cancellation on terms that are similar to those irrevocable undertakings given to SOCAM by other Convertible Bondholders. Such irrevocable undertaking will remain binding in the event of a competing offer being made for CCP but will cease to have effect, amongst other

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LETTER FROM THE SOCAM BOARD

things: (i) on the withdrawal or lapsing of the Offer; (ii) on the withdrawal or lapsing of the Bond Cancellation; (iii) if there is any change to the principal terms and conditions of the Bond Cancellation; or (iv) if the payment to be made to the Convertible Bondholders pursuant to the Bond Cancellation is not made on or before 30 June 2009.

COMPULSORY ACQUISITION, DELISTING AND CANCELLATION OF TRADING

As set out above, SOCAM owns and has received irrevocable undertakings to accept the Offer in respect of a total of 203,199,348 CCP Shares, representing, in aggregate, approximately 72.26% of the existing issued share capital of CCP. Subject to SOCAM holding or acquiring, by virtue of the Offer or otherwise, CCP Shares carrying, when aggregated with its current holding, 75.00% or more of the voting rights of CCP, and subject to the Offer becoming or being declared unconditional in all respects, SOCAM intends to procure that CCP applies in accordance with the AIM Rules for the cancellation of the admission to trading of CCP Shares on AIM. It is intended that CCP Shares will cease to be admitted to trading on AIM shortly after the Offer is declared unconditional in all respects.

If SOCAM receives acceptances under the Offer in respect of, or otherwise acquires, 90.00% or more of the CCP Shares to which the Offer relates, SOCAM intends to exercise its rights pursuant to section 160 of the Isle of Man Companies Act 2006 to acquire compulsorily the remaining CCP Shares in respect of which the Offer has not been accepted.

OTHERS

The Offer, and acceptances thereof, will be governed by English law and will be subject to the jurisdiction of the English courts.

This circular does not constitute an offer document for the Offer. The Offer Document has been despatched to the CCP Shareholders. CCP Shareholders should refer to the full text of the Offer Document.

Deutsche Bank is acting as the financial adviser to SOCAM in connection with the Offer.

BACKGROUND TO AND REASONS FOR THE OFFER

Given the relatively low liquidity of the CCP Shares, the SOCAM Directors believe that access to the equity capital markets does not provide CCP with an attractive fund raising avenue and that the costs and management resources associated with the maintenance of CCP’s status as an AIM-listed company are not warranted. The low liquidity has also contributed to the adverse share trading performance of CCP since its admission to trading on AIM in June 2007 until the Reference Date.

Over the three-month period prior to the Reference Date, the price of the CCP Shares fell by approximately 12.14% and the market, as represented by the FTSE AIM All Share Index, fell by approximately 3.17%. During the period from the peak of the FTSE AIM All Share Index at 1,236.60 on 16 July 2007 to the Reference Date, the FTSE AIM All Share Index fell by approximately 69.57% and the price of the CCP Shares fell by approximately 73.32%.

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LETTER FROM THE SOCAM BOARD

The SOCAM Directors wish to consolidate CCP into SOCAM while providing an opportunity for CCP Shareholders to switch their investment into a company with access to a larger capital base and a company that is listed on the main board of a major international exchange. The Offer also provides CCP Shareholders with an opportunity to partially realise their investment in CCP during sustained uncertain market conditions at a premium to the market price prevailing on the Reference Date and a further opportunity to benefit from continued participation in the business of CCP via the Enlarged Group going forward.

SOCAM does not envisage any significant change in CCP’s business and strategy, which is to specialise in the development and investment of partially-completed property projects and stand-alone medium-sized greenfield developments in major and secondary cities in the PRC. Current projects are expected to progress according to existing business plans and development schedules which may need to be adjusted in accordance with the availability of finance and prevailing market conditions.

As part of the arrangements entered into between SOCAM and CCP at the time of CCP’s admission to trading on AIM, CCP (BVI) entered into the Investment Management Agreement with SAM. Further details of the Investment Management Agreement are set out below in this circular.

SOCAM intends to simplify the current corporate structure and investment decision process of CCP and deploy greater resources to allow CCP to grow faster and become a strong core business of SOCAM without the costs and management resources associated with the maintenance of CCP’s status as an AIM-listed company.

INFORMATION ON SOCAM

Background information on SOCAM and its relationship with CCP

SOCAM is an investment company whose shares are listed for trading on the main board of the HK Stock Exchange. The SOCAM Group is principally engaged in property development, asset management, cement production, construction, investment in property development and venture capital investment in Hong Kong and the PRC. In 2005, it also started to invest in the partially-completed property development business in the PRC. In conjunction with the admission to trading of CCP Shares on AIM in 2007, SOCAM divested its then investments in the partiallycompleted property development business in the PRC to CCP. Following the admission to trading of CCP Shares on AIM in 2007, SOCAM holds all of its investment in the partially-completed property investments in the PRC through CCP. At the Last Practicable Date, SOCAM, through its wholly-owned subsidiary, BIL, held approximately 42.88% of the existing issued share capital of CCP and US$25.00 million in the principal amount of the Convertible Bonds, which represents approximately 14.37% in the principal amount of the total outstanding principal amount of the Convertible Bonds.

SOCAM, through its wholly-owned subsidiary, SAM, has also been the investment and project manager of CCP. SAM entered into the Investment Management Agreement with the CCP Group on 12 April 2007, whereby SAM provides to the CCP Group project investment management services as well as other services with respect to sourcing, structuring, financing, marketing, sales, leasing and disposal of partially-completed property investment opportunities in the PRC in accordance with the

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LETTER FROM THE SOCAM BOARD

investment strategy of CCP. The Investment Management Agreement is for an initial term of 10 years pursuant to which SAM is entitled to a base fee plus a performance fee determined by the performance of the investment projects of CCP. For the financial year ended 31 December 2008, a total base fee of approximately HK$71.85 million and performance fee of approximately HK$39.20 million have been incurred by the CCP Group.

In relation to SOCAM’s cement business, since 1994 the SOCAM Group has actively invested in the PRC, notably in Chongqing, Guizhou, Nanjing and Yunnan, through the acquisition of existing state-owned plants and adding newly built production lines. In August 2005, SOCAM entered into a joint venture agreement with Financiere Lafarge (a wholly-owned subsidiary of Lafarge S.A., the world’s largest cement producer (based on tonne per annum)), to form LSOC, with the parties owning 45.00% and 55.00% of the issued share capital of LSOC respectively. SOCAM injected its key cement interests in Chongqing and Yunnan, together with dry rotary lines in Guizhou into LSOC. LSOC thus became one of the leading cement producers in Southwest China and SOCAM retained interests in the 60.00% owned Nanjing Jiangnan cement grinding station, as well as six cement plants and one cement grinding station in Guizhou which had not been injected into LSOC. SOCAM is implementing an exit plan in relation to these retained interests and has sold some of these plants in the past twelve months. At the end of 2008, LSOC had a total capacity of 24 million tonnes per annum with further capacity expansion underway in Chongqing, Sichuan, Guizhou and Yunnan.

SOCAM’s construction division, operating mainly under Shui On Building Contractors Limited (“ SOBC ”), Shui On Construction Company Limited (“ SOC ”) and Pat Davie Limited, focuses on construction, design-and-build, interior fitting-out, renovation, heritage restoration, as well as maintenance of public housing, residential and institutional buildings. Through a PRC subsidiary, Shui On Construction Co., Ltd, the division also provides contracting support to the SOCAM Group’s property projects in the PRC.

SOBC is a leading building contractor in public housing construction in Hong Kong. Since 1981, it has completed numerous public housing units as well as shopping centres and public amenities in government housing estates, often pioneering new town developments such as those in Ma On Shan, Tin Shui Wai and Tung Chung.

SOC has extensive experience in the construction of commercial and institutional projects for the government, major institutions and private developers, which include many well known developments. These developments range from major luxury hotels, office buildings and shopping centres to sports and arts facilities, hospitals, schools, universities and recreational parks.

Pat Davie Limited has a track record of interior fitting and building refurbishment projects for the office, retail, banking and hospitality sectors in Hong Kong, Macau Special Administrative Region of the PRC and the PRC.

The construction division is an integral part of SOCAM and through its businesses in the PRC and Hong Kong, SOCAM has developed strong competencies in integrating its construction, property

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LETTER FROM THE SOCAM BOARD

and financial structuring capabilities in its property development projects. The SOCAM Directors believe that the SOCAM Group’s construction division will provide synergistic benefits with the CCP business through in-house access to the expertise and experience of SOCAM’s project management and construction capabilities.

In addition to the Investment Management Agreement, the CCP Group also entered into two separate construction and project management agreements dated 12 April 2007 with the SOCAM Group which are on the same terms. Pat Davie (China) Limited and Shui On Project Management (China) Limited, both of which are subsidiaries of SOCAM, and/or their respective subsidiaries agree to provide construction and project management services on all construction-related matters for certain property projects of the CCP Group in the PRC under the terms and conditions set out in the construction and project management agreements at the request of the CCP Group for an initial term of 10 years. For the financial year ended 31 December 2008, total project management fees of approximately HK$7.57 million have been incurred by the CCP Group.

SOCAM has exposure to a range of venture capital funds through previous investments embracing a range of businesses, including innovative products and services from environmentallyfriendly recycling of waste oils, animal feeds, to biopharmaceuticals, and wireless and telecom technologies. At 31 December 2008, all the funds were fully invested. The venture capital division is considered as a non-core operation of SOCAM and the intention of the SOCAM Directors is to wind down the existing venture capital portfolio going forward.

Financial information on SOCAM Group

The audited consolidated net profits both before and after tax and extraordinary items for the financial years ended 31 December 2007 and 2008 and the audited consolidated net asset value at 31 December 2008 of the SOCAM Group were approximately as follows:

Consolidated net	profit before	Consolidated net	profit after	Consolidated net
tax and extraordinary items for		tax and extraordinary items for		asset value
the financial	the financial	the financial	the financial
year ended	year ended	year ended	year ended	at
31 December	31 December	31 December	31 December	31 December
2007	2008	2007	2008	2008
HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
715.6	584.7	704.3	569.1	4,999.2

INFORMATION ON CCP

CCP is a property investment company whose shares have been admitted to trading on AIM since 13 June 2007. The CCP Group focuses primarily on investing in partially-completed property projects in major and secondary cities in the PRC. CCP has a well-diversified portfolio of properties, including commercial, retail and residential complexes, strategically located in the prime areas of Guangzhou, Qingdao, Beijing, Chengdu, Shenyang and Chongqing, with SAM as its investment manager.

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LETTER FROM THE SOCAM BOARD

The audited consolidated net profits both before and after tax and extraordinary items for the period from 9 February 2007 (being the date of incorporation of CCP) to 31 December 2007 and the financial year ended 31 December 2008 and the audited consolidated net asset value at 31 December 2008 of the CCP Group were approximately as follows:

Consolidated net	profit before	Consolidated net	profit after	Consolidated
tax and extraordinary items for		tax and extraordinary items for		net asset value
the	the financial	the	the financial
period ended	year ended	period ended	year ended	at
31 December	31 December	31 December	31 December	31 December
2007	2008	2007	2008	2008
US$ ’000	US$ ’000	US$ ’000	US$ ’000	US$ ’000
(approx	(approx	(approx	(approx	(approx
HK$ ’000)	HK$ ’000)	HK$ ’000)	HK$ ’000)	HK$ ’000)
9,755	26,463	3,656	15,692	638,660
(76,109)	(206,046)	(28,524)	(122,181)	(4,949,232)

FINANCING OF THE OFFER

Full acceptance of the Offer, assuming all CCP Shareholders to whom the Offer is made, other than those that have elected to accept the Share Offer under the terms of their irrevocable undertakings, elect to accept the Mixed Offer and assuming that none of the Convertible Bondholders will exercise their right to convert such Convertible Bonds into CCP Shares will, subject to the further assumptions set out below, require the payment by SOCAM of £35,534,225 (approximately HK$414,211,801) in cash.

SOCAM’s wholly-owned subsidiary, BIL, holds US$25,000,000 (approximately HK$193,740,000) in the principal amount of the Convertible Bonds. SOCAM intends to finance the cash consideration payable under the Offer from a combination of the proceeds to be received by SOCAM from its wholly-owned subsidiary, BIL, as a result of the Bond Cancellation, of US$22,500,000 (approximately HK$174,380,000), from its own resources and from existing banking facilities available to the SOCAM Group.

Deutsche Bank has confirmed that, assuming the receipt by SOCAM’s wholly-owned subsidiary, BIL (or its nominee), of the cash proceeds of US$22,500,000 (approximately HK$174,380,000) which BIL will become entitled to receive under the Bond Cancellation, taking into account those shareholders who have irrevocably undertaken to SOCAM that they will accept the Share Offer, assuming that none of the holders of the Convertible Bonds will exercise their right to convert such Convertible Bonds into CCP Shares and assuming that there are no further CCP Shares issued after the Last Practicable Date, the necessary financial resources are available to SOCAM to satisfy £35,534,225 (approximately HK$414,211,801) of cash consideration payable under the Offer when fully implemented.

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LETTER FROM THE SOCAM BOARD

MANAGEMENT

The CCP Board comprises eight members, of whom Mr. Lo Hong Sui, Vincent, the non-executive chairman, and Mr. Wong Yuet Leung, Frankie, a non-executive director, are also the executive SOCAM Directors. Mr. Lo Hong Sui, Vincent is also the chairman of SOCAM.

The SOCAM Board has confirmed that, on the Offer becoming or being declared unconditional in all respects, the existing employment rights and terms and conditions of employment of all management and employees of CCP will be safeguarded and pension obligations complied with. SOCAM’s plans for CCP do not involve any change in the foreseeable future in the conditions or location of employment of CCP employees and it is SOCAM’s intention that employees of CCP will continue to enjoy terms and conditions that overall are as favourable as those that currently apply.

The SOCAM Directors intend that, following the Offer becoming or being declared unconditional in all respects, the CCP management team should remain in place.

APPLICABILITY OF THE CITY CODE

Since the securities of CCP are not traded on a regulated market in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man and since CCP is not considered by the Takeover Panel to be centrally controlled or managed in the United Kingdom, the Channel Islands or the Isle of Man, CCP is not subject to the provisions of the City Code and therefore the Offer will not be regulated by the Takeover Panel.

However, the articles of association of CCP provide that if and for so long as CCP shall not be subject to the City Code, the CCP Board shall, where CCP is the subject of an approach, comply with and procure that CCP complies with the provisions of the City Code as if CCP were subject to the City Code , provided always that this obligation is subject to the requirements of the Isle of Man Companies Act 2006 and to the requirement that the CCP Board must be satisfied that the application of the article relating to the application of the City Code is in the best interest of CCP. In addition, under the same article, if the CCP Board recommends to the CCP Shareholders or any class thereof any takeover offer made for ordinary shares of CCP from time to time, the CCP Board is required by its articles to obtain the undertaking of the offeror(s) to comply with the provisions of the City Code in the conduct and execution of the relevant offer mutatis mutandis as though CCP were subject to the City Code.

Accordingly, SOCAM has entered into the City Code Undertaking with CCP which will remain in place for so long as the Offer is capable of being accepted and the CCP Independent Directors are still recommending acceptance of the Offer, whereby SOCAM and CCP undertake, amongst other things, to comply with the requirements of the City Code, subject to a number of agreed derogations which the CCP Independent Directors regard as being in the best interests of CCP Shareholders to whom the Offer is made.

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LETTER FROM THE SOCAM BOARD

DISCLOSURE OF INTERESTS IN CCP

At the Last Practicable Date:

(a) SOCAM held, through its wholly-owned subsidiary, BIL, 120,588,000 CCP Shares, representing approximately 42.88% of the existing issued share capital of CCP and US$25.00 million (approximately HK$193.74 million) in the principal amount of the Convertible Bonds representing approximately 14.37% in principal amount of CCP’s outstanding Convertible Bonds;
(b) Mr. Anthony Griffiths, an independent non-executive director of SOCAM, held 6,000 CCP Shares, representing approximately 0.002% of the existing issued share capital of CCP; and
(c) Deutsche Bank held 50,000 CCP Shares, representing approximately 0.018% of the existing issued share capital of CCP.

Save as disclosed above and in the section entitled “Irrevocable Undertakings and SOCAM’s Existing Share Ownership”, neither SOCAM, nor any of SOCAM Directors, nor, so far as any SOCAM Director is aware (having made all reasonable enquiries), any person acting in concert with SOCAM, is interested in or has any rights to subscribe for any CCP Shares, or securities convertible or exchangeable into CCP Shares, nor does any such person have any short position (whether conditional or absolute and whether in the money or otherwise) including short positions under derivatives, or any arrangement in relation to CCP Shares or such securities.

Save as disclosed below and other than BIL, Mr. Anthony Griffiths and Deutsche Bank (but only insofar as Deutsche Bank is acting in any capacity other than as exempt fund manager or exempt principal trader) whose interests in CCP are set out in this section above, to the best of the knowledge, information and belief of the SOCAM Directors having made all reasonable enquiries, all the CCP Shareholders and their ultimate beneficial owners are at the Last Practicable Date independent of SOCAM and its connected persons.

(a) Mr. Li Chi Keung, a director of certain subsidiaries of SOCAM, held 50,000 CCP Shares, representing approximately 0.018% of the existing issued share capital of CCP, and held 10,000 SOCAM Shares, representing approximately 0.003% of the existing issued share capital of SOCAM;
(b) Ms. Ng Man Ying, the spouse of Mr. Wong Kun To, a director of certain subsidiaries of SOCAM, held 132,638 CCP Shares, representing approximately 0.047% of the existing issued share capital of CCP; and
(c) Mrs. Kwan Chan Yin Kwan, Lilian, the spouse of Mr. Kwan Chi Ping, Edgar, a director of certain subsidiaries of SOCAM, held 100,000 CCP Shares representing approximately 0.036% of the existing issued share capital of CCP.

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LETTER FROM THE SOCAM BOARD

SETTLEMENT, LISTING AND DEALING OF NEW SOCAM SHARES

The New SOCAM Shares to be issued pursuant to the Offer will be ordinary shares of HK$1.00 each in the share capital of SOCAM and will rank pari passu in all respects with the SOCAM Shares in issue at the date of issue of the New SOCAM Shares and will entitle the holders thereof to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the New SOCAM Shares.

An application will be made to the HK Stock Exchange for the listing of, and for permission to deal in, the New SOCAM Shares to be issued pursuant to the Offer, and the completion of the Offer is conditional upon, amongst other things, the HK Stock Exchange granting the listing of, and permission to deal in, the New SOCAM Shares on the main board of the HK Stock Exchange. It is expected that the listing of and dealing in the New SOCAM Shares will become effective shortly following the date on which the Offer becomes or is declared unconditional in all respects. Save as set out in this circular, no application will be made for the listing of, or for permission to deal in, the New SOCAM Shares in any other jurisdiction or securities exchanges.

Approval will also be sought from the SOCAM Shareholders for, amongst other things, the allotment and issue of the New SOCAM Shares pursuant to the Offer.

FINANCIAL IMPACT ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE COMPANY

Earnings

Following the completion of the Offer, CCP will become a subsidiary of SOCAM and its financial results will be consolidated into the financial statements of the SOCAM Group. Accordingly, turnover of the Enlarged Group will increase by the amount of the CCP Group’s turnover that is not already included after elimination of all inter-company transactions. The consolidated net profit or loss attributable to the equity holders of SOCAM will increase by the amount of the CCP Group’s net profit or loss that is not already included in the SOCAM Group’s net profit or loss less any applicable minority interests.

Assets and liabilities

The SOCAM Group had an audited net asset value (including minority interests) of approximately HK$5,054.30 million at 31 December 2008 and an adjusted consolidated net tangible assets per SOCAM Share of HK$15.53 at 31 December 2008. Based on the unaudited pro forma statement of assets and liabilities of the Enlarged Group under two different scenarios as set out in Appendix V to this circular, then:

(i) under scenario (1) (i.e. assuming that all CCP Shareholders to whom the Offer is made, other than those who have elected to accept the Mixed Offer under the terms of their irrevocable undertakings, elect to accept the Share Offer), the total assets and total liabilities of the Enlarged Group would increase by approximately HK$4,416.10 million and HK$1,572.30 million respectively, the net asset value of the Enlarged Group will

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LETTER FROM THE SOCAM BOARD

increase by approximately HK$2,843.80 million upon the completion of the Offer and, assuming completion of the Offer, the adjusted consolidated net tangible assets of the Enlarged Group per SOCAM Share at 31 December 2008 on a pro-forma basis will increase to HK$16.03; or

(ii) under scenario (2) (i.e. assuming that all CCP Shareholders to whom the Offer is made, other than those who have elected to accept the Share Offer under the terms of their irrevocable undertakings, elect to accept the Mixed Offer), the total assets and total liabilities of the Enlarged Group would increase by approximately HK$4,120.60 million and HK$1,572.3 million respectively, the net asset value of the Enlarged Group will increase by approximately HK$2,548.30 million upon the completion of the Offer and, assuming completion of the Offer, the adjusted consolidated net tangible assets of the Enlarged Group per SOCAM Share at 31 December 2008 on a pro-forma basis will increase to HK$16.99.

Gearing position

The SOCAM Group’s net gearing ratio was 85.11% at 31 December 2008 (the net gearing ratio has been calculated by aggregating SOCAM’s total borrowings, including bank borrowings and convertible bonds, deducting bank balances, deposits and cash, and calculating the resultant figure as a percentage of total equity attributable to equity holders of SOCAM). SOCAM has improved its indebtedness position since the 2008 financial year end by the repayment of HK$270 million of bank loans in the first quarter of 2009, and by obtaining a total of HK$2,084 million of renewed and new banking facilities. Of this amount, HK$1,659 million of banking facilities included the renewed and new banking facility granted by Standard Chartered Bank to the SOCAM Group after 31 March 2009. The pro forma net gearing ratio of the Enlarged Group at 31 December 2008, following the completion of the Offer will be either 48.60% (in the case of scenario (1) as set out above) or 54.42% (in the case of scenario (2) as set out above).

The SOCAM Directors have stated that having reviewed the projected cash flows of the Enlarged Group, the SOCAM Directors consider that the Enlarged Group will have sufficient working capital for its present requirements and that, barring unforeseeable circumstances, the Enlarged Group will not need to raise additional funding through the issuance of equity or equity-linked securities of SOCAM for the foreseeable future.

Dividend policy

SOCAM’s informal policy relating to the recommendation of dividends is generally to propose a distribution out of approximately one third of its net earnings in each financial year, with one third of the payment proposed as an interim dividend and the balance recommended as a final dividend. The SOCAM Directors currently intend this informal policy to continue following completion of the Offer.

Please refer to Appendix V to this circular for details of the pro forma financial information of the Enlarged Group.

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LETTER FROM THE SOCAM BOARD

FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

The SOCAM Directors intend that the Enlarged Group will continue to acquire partiallycompleted properties in the PRC for quick asset conversion where appropriate and, at the same time, acquire stand-alone, medium-sized greenfield development projects in cities where it already has operations.The SOCAM Directors believe that despite continuing uncertainty as to the prospects of the global economy in the near term, the PRC’s strong economic fundamentals set it apart from the other major economies. The SOCAM Directors remain positive about the long-term prospects of the property market in the PRC, especially in view of increasing urbanisation and rising levels of income and private consumption. In the near future, the SOCAM Directors expect attractive acquisition opportunities for new property projects.

In the cement sector, the already announced RMB4 trillion PRC government stimulus package with its infrastructure and low cost housing focus will, the SOCAM Directors believe, assist in underpinning robust demand for cement, especially in Southwest China. Weaker cement producers are continuously being eliminated in the face of progressive market consolidation and the PRC’s increasing environmental emphasis. The SOCAM Directors believe that SOCAM, through its joint venture company LSOC, is well placed to play a leading part in the market consolidation process, particularly in the light of its adoption of the Lafarge group’s global environmental sustainability policy. LSOC is at the forefront of applying what is, in its chosen market, state-of-the-art energy saving and low carbon emission technology, for the purposes of its cement production.

As part of its corporate finance strategy, SOCAM, together with its joint venture partner Financiere Lafarge, are actively considering the possibility of a separate listing of LSOC’s cement operations to fund its ongoing expansion plans. No formal decision has yet been made but preparatory steps are in hand. However, there is no certainty that a separate listing of the cement operations will be achieved.

After the completion of the acquisition of CCP Shares by SOCAM, CCP will be the largest element in SOCAM’s consolidated balance sheet. The SOCAM Directors have stated that they believe that its construction division will provide synergistic benefits with the CCP business. If the separate listing for LSOC referred to above is achieved, the cement business will have a better defined identity and additional funding sources of its own. With regard to its holding of shares in Shui On Land Limited, SOCAM sold some of its holdings in Shui On Land Limited in 2008, and its remaining holding has been reduced to below 10% of the issued share capital of Shui On Land Limited. In addition, the venture capital division is considered as a non-core operation of SOCAM and the stated intention of the SOCAM Directors is to wind down its existing venture capital portfolio going forward. Consequently, SOCAM’s focus on its core operations will be sharpened and the coherence of its businesses will be strengthened.

Looking ahead, the SOCAM Directors have stated that they believe that the solid foundation of its core businesses will assist the Enlarged Group to better weather the difficult business environment that is likely to continue throughout 2009. The SOCAM Directors have also stated that in their view to some extent, the market downturn in the PRC is actually creating opportunities for the Enlarged Group’s two major businesses of distressed property development and cement manufacturing, while

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LETTER FROM THE SOCAM BOARD

the construction business is well-positioned to benefit from the increase in public sector work in Hong Kong. The SOCAM Directors have further stated that they see good prospects for business growth in the PRC and that they intend to continue to explore and take opportunities to deliver sustainable growth and increased value to the Enlarged Group’s shareholders.

HK LISTING RULES IMPLICATIONS

Major transaction and exempt connected transactions

As Mr. Anthony Griffiths, Mr. Li Chi Keung, Ms. Ng Man Ying and Mrs. Kwan Chan Yin Kwan, Lilian, who held CCP Shares as detailed in the section entitled “Disclosure of interests in CCP”, are connected persons of SOCAM, the acquisitions of the CCP Shares from each of Mr. Anthony Griffiths, Mr. Li Chi Keung, Ms. Ng Man Ying and Mrs. Kwan Chan Yin Kwan, Lilian by SOCAM pursuant to the Offer will each constitute a connected transaction for SOCAM under the HK Listing Rules. The applicable percentage ratios for each of such connected transactions fall below the de-minimis threshold under Rule 14A.31(2) of the HK Listing Rules. Accordingly, such connected transactions are exempt from the reporting, announcement and independent shareholders’ approval requirements under the HK Listing Rules.

Mr. Li Chi Keung and Penta group of companies are required to abstain from voting at the SOCAM Meeting. SOCAM Shareholders are reminded that if they hold any interest in the CCP Shares, they should abstain from voting at the SOCAM Meeting as required under the HK Listing Rules.

SOCAM has received an irrevocable undertaking from Shui On Company Limited, as the beneficial owner (along with its subsidiary Shui On Finance Company Limited) of 181,981,000 SOCAM Shares (representing approximately 56.53% of the issued share capital of SOCAM at the Last Practicable Date), conditional upon and for so long as CCP Independent Directors recommend the Offer, to vote in favour of the resolution to be proposed at the SOCAM Meeting to approve the acquisition of CCP pursuant to the Offer. Such undertaking will lapse if SOCAM withdraws the Offer or if the Offer lapses.

In the City Code Undertaking, SOCAM has agreed to use its reasonable endeavours to ensure that, for so long as the CCP Independent Directors continue to recommend the Offer, Shui On Company Limited will comply on a timely basis with its undertakings.

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LETTER FROM THE SOCAM BOARD

The completion of the Offer is subject to a number of conditions. Accordingly, the Offer may or may not be completed, and there can be no assurance that the Offer will be completed. SOCAM Shareholders and potential investors are advised to exercise due caution when dealing in the securities of SOCAM.

THE SOCAM MEETING

A notice convening the SOCAM Meeting to be held at Room 103, 1st Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong on Wednesday, 3 June 2009 at 3:15 p.m. (or so soon thereafter as the annual general meeting of SOCAM convened at the same place and date at 3:00 p.m. shall have concluded or adjourned) is set out on pages 342 and 343 of this circular. At the SOCAM Meeting, the Resolution will be proposed to approve the Offer.

A proxy form for use at the SOCAM Meeting is enclosed. Whether or not you are able to attend the SOCAM Meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SOCAM Meeting and any adjourned meeting (as the case may be) if you so wish.

In accordance with Rule 13.39(4) of the HK Listing Rules, the chairman of the SOCAM Meeting will demand a poll for the Resolution to be proposed at the SOCAM Meeting. The results of the voting will be announced after the SOCAM Meeting.

RECOMMENDATION

The SOCAM Directors consider that the acquisition of CCP Shares pursuant to the Offer is fair and reasonable and is in the interests of the SOCAM Shareholders as a whole. The SOCAM Directors recommend the SOCAM Shareholders to vote in favour of the Resolution to be proposed at the SOCAM Meeting.

ADDITIONAL INFORMATION

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

Yours faithfully For and on behalf of Shui On Construction and Materials Limited Lo Hong Sui, Vincent Chairman

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CONDITIONS OF THE OFFER

APPENDIX I

1. CONDITIONS OF THE OFFER

The Offer is subject to the following conditions:

1.1 Acceptances

Valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. (London time) on the 21st day from the posting of the Offer Document (or such later time(s) and/or date(s) as SOCAM may decide, not being later than midnight (London time) on the 60th day after the posting of the Offer Document (unless CCP consents in writing to an extension beyond such time)) in respect of not less than 90.00% (or such lower percentage as SOCAM may decide) in nominal value of the CCP Shares to which the Offer relates and not less than 90.00% (or such lower percentage as SOCAM may decide) of the voting rights carried by the CCP Shares to which the Offer relates. However, this condition will not be satisfied unless SOCAM and/or its related parties shall hold, have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) CCP Shares carrying in aggregate more than 50.00% of the voting rights then normally exercisable at a general meeting of CCP (including for this purpose any voting rights attaching to any CCP Shares which are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of conversion or subscription rights or otherwise). In this condition:

(a) CCP Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue;
(b) the expression “CCP Shares to which the Offer relates” shall be construed in the same way as the expression “of shares affected” contained in section 160 of the Isle of Man Companies Act 2006; and
(c) valid acceptances shall be deemed to have been received in respect of any CCP Shares which SOCAM shall, pursuant to section 160 of the Isle of Man Companies Act 2006, be treated as having acquired or contracted unconditionally to acquire other than by virtue of acceptances of the Offer.

1.2 Completion of the Bond Cancellation

1.3 HK Stock Exchange listing approval

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CONDITIONS OF THE OFFER

APPENDIX I

1.4 Competition issues

Without limitation to the condition set out in paragraph 1.5, any applicable waiting periods for a response from MOFCOM having expired or been terminated and/or any anti-trust consent or approval of MOFCOM in connection with the Offer or the completion thereof having been obtained on an unconditional basis by or on behalf of SOCAM and/or CCP pursuant to the provisions of any laws or regulations in the PRC, in each case where necessary for completion of the Offer.

1.5 Regulatory intervention

No relevant authority having, without the consent or agreement of SOCAM, taken, instituted, implemented or threatened any legal proceedings, and there not continuing to be outstanding, any action, proceeding, suit, investigation, enquiry or reference, and no relevant authority having enacted, made or proposed any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything in each case which would reasonably be expected to:

(a) make the Offer, its implementation or the acquisition or proposed acquisition by SOCAM or any member of the Wider SOCAM Group pursuant to the Offer of any shares in, or control or management of, CCP or any member of the Wider CCP Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction;
(b) otherwise directly or indirectly, restrain, restrict, prohibit, delay the same or impose additional material conditions or material obligations with respect to the Offer or such acquisition, or otherwise challenge, impede or interfere with the Offer or such acquisition or require amendment to the terms of the Offer or such acquisition;
(c) require a disposal by any member of the Wider SOCAM Group of any of the shares or other securities in CCP or any member of the Wider CCP Group;
(d) require, prevent or delay a divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider CCP Group, in any such case, of all or any part of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct all or any portion of their respective businesses or to own all or any portion of their respective assets or properties which in any case is material in the context of the Wider CCP Group taken as a whole;
(e) impose any limitation on, or result in a delay in, the ability of any member of the Wider SOCAM Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities in any member of the Wider CCP Group or to hold or exercise effectively management control over any member of the Wider CCP Group;

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APPENDIX I

CONDITIONS OF THE OFFER

(f) except pursuant to the Offer or section 160 of the Isle of Man Companies Act 2006, and save as Disclosed, require any member of the Wider SOCAM Group or of the Wider CCP Group to acquire, or offer to acquire, any shares or other securities (or the equivalent) in any member of the Wider CCP Group or any asset owned by any third party;
(g) result in any member of the Wider CCP Group or the Wider SOCAM Group ceasing to be able to carry on business under any name under which it presently does so where such cessation would have a material adverse effect on the SOCAM Group or the CCP Group (as the case may be) taken as a whole;
(h) limit the ability of any member of the Wider CCP Group or the Wider SOCAM Group to conduct or integrate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider CCP Group; or
(i) otherwise affect adversely any or all of the business, assets, profits, financial or trading position or prospects of any member of the Wider SOCAM Group or any member of the Wider CCP Group in any way, which would be material in the context of the SOCAM Group or the CCP Group, as the case may be, taken as a whole,

and all applicable waiting and other time periods (including any extension of such periods) during which any relevant authority could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or to take any other step under the laws of any jurisdiction having expired, lapsed or been terminated.

1.6 Filings and authorisations
(a) All notifications, filings and applications, which are necessary or are reasonably considered necessary or appropriate by SOCAM including such notifications, filings and applications as may be required to be submitted to any relevant authorities, having been submitted and all applicable waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulations of any jurisdiction having expired, lapsed or been terminated (as appropriate).
(b) All authorisations, determinations, statutory obligations and regulatory obligations which are necessary or are reasonably considered necessary or appropriate by SOCAM in any jurisdiction for or in respect of the Offer or its implementation or the acquisition or the proposed acquisition of any shares in, or control of, CCP or any member of the Wider CCP Group by any member of the Wider SOCAM Group or the carrying on by any member of the Wider CCP Group of its business having been obtained or complied with (as appropriate) on terms and in a form reasonably satisfactory to SOCAM from all relevant authorities or from any persons or bodies with whom any member of the Wider CCP Group has entered into contractual arrangements and all such authorisations and determinations remaining in full force and effect and there being no notice of an intention to revoke, suspend, restrict, modify or not to renew such authorisations and determinations provided that such authorisations and determinations shall not impose any conditions or require the taking or refraining from taking of any action by any member of the Wider SOCAM Group or any member of the Wider CCP Group.

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CONDITIONS OF THE OFFER

APPENDIX I

1.7 Consequences of the Offer

Save as Disclosed, there being no provision of any arrangement, agreement, licence, permit, lease, franchise or other instrument to which any member of the Wider CCP Group is a party, or by or to which any such member, or any of its respective assets is or may be bound (which in each case is material to the Wider CCP Group taken as a whole), entitled or be subject, or any circumstance which, in each case, as a consequence of the Offer or the acquisition or the proposed acquisition by any member of the SOCAM Group of any shares in, or control of, CCP or any other member of the Wider CCP Group or otherwise, would reasonably be expected to result in:

(a) any material amount of monies borrowed by, or any other material indebtedness or liabilities, actual or contingent of, or any material grant available to, any member of the Wider CCP Group being or becoming repayable, or capable of being declared repayable immediately or earlier than the stated maturity or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being or becoming capable of being withdrawn or inhibited;
(b) the rights, liabilities, obligations, interests or business of any member of the Wider CCP Group under any such arrangement, agreement, licence, permit, lease, franchise or instrument or the interests or business of any member of the Wider CCP Group in or with any other firm or company or body or person (or any agreement or arrangements relating to any such business or interests) being or becoming capable of being terminated or modified or affected in any material respect or any onerous obligation or any liability arising or any adverse action being taken thereunder;
(c) any member of the Wider CCP Group ceasing to be able to carry on business under any name under which it presently does so to an extent which is material to the Wider CCP Group;
(d) any material asset, property or interest of, or any asset the use of which is enjoyed by, any member of the Wider CCP Group being disposed of by or ceasing to be available to any member of the Wider CCP Group or any right arising under which any such asset or interest could be required to be disposed of by or could cease to be available to any member of the Wider CCP Group other than in the ordinary course of business;
(e) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider CCP Group or the Wider SOCAM Group or any such mortgage, charge or other security interest (whether existing or having arisen) becoming enforceable;
(f) the financial or trading position or prospects or the value of any member of the Wider CCP Group being prejudiced or adversely affected in a manner which is material to the CCP Group taken as a whole;

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CONDITIONS OF THE OFFER

APPENDIX I

(g) the creation or assumption of any liability (actual, contingent or prospective) by any member of the Wider CCP Group which liability is material in the context of the CCP Group taken as a whole; or
(h) any member of the Wider CCP Group being required to repay or repurchase any shares in and/or indebtedness of any member of the Wider CCP Group owned by any third party,

and no event having occurred which, under any provision of any such arrangement, agreement, licence, permit, lease, franchise or other instrument, would reasonably be expected to result in any of the events or circumstances which are referred to in paragraph 1.7(a) to (h) above.

1.8 No corporate action taken since the Accounting Date

Since the Accounting Date (save as Disclosed) no member of the Wider CCP Group having:

(a) issued or agreed to issue, or authorised or proposed the issue of, additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or transferred or sold any shares out of treasury (other than as between CCP and wholly-owned subsidiaries of CCP before the date of the Joint Announcement);
(b) recommended, declared, paid or made or proposed to recommend, declare, pay or make dividend, bonus issue or other distribution whether payable in cash or otherwise (other than the Final Dividend and other than to CCP or one of its wholly-owned subsidiaries);
(c) save for transactions between members of the CCP Group, made or authorised any change in its loan capital;
(d) save for transactions between members of the CCP Group, effected or implemented any merger or demerger or acquired, disposed of, transferred, mortgaged, charged or granted security over any body corporate, partnership or business or acquired or disposed of, or, other than in the ordinary course of business, transferred, mortgaged or charged or created any security interest over, any asset or any right, title or interest in any asset (including shares and trade investments) or authorised, proposed or announced any intention to do so;
(e) save for transactions between members of the CCP Group or transactions carried out by members of the CCP Group in the ordinary course of business, issued, authorised or proposed the issue of or made any material change in or to any debentures or incurred or increased any indebtedness or become subject to any liability (actual or contingent) which is of an aggregate amount which would reasonably be expected to materially and adversely affect the Wider CCP Group taken as a whole;

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APPENDIX I

CONDITIONS OF THE OFFER

(f) entered into or varied or announced its intention to enter into or vary any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) other than in the ordinary course of business or which restricts or could restrict the business of any member of the Wider CCP Group or the Wider SOCAM Group;
(g) entered into or varied or made any offer (which remains open for acceptance) to enter into or change the terms of any contract, service agreement or arrangement with any director or senior executive of any member of the Wider CCP Group;
(h) entered into, implemented, effected or authorised, proposed or announced its intention to enter into, implement, effect, authorise or propose any reconstruction, amalgamation, commitment, scheme or other transaction or arrangement in respect of itself or another member of the Wider CCP Group or the Wider SOCAM Group;
(i) purchased, redeemed or repaid or proposed the purchase, redemption or repayment of any of its own shares or other securities (or the equivalent) or reduced or made any other change to any part of its share capital;
(j) waived or compromised any claim other than in the ordinary course of business;
(k) made any alteration to its memorandum or articles of association or other constitutional documents (save for any amendments reasonably required (in the reasonable opinion of CCP based on legal advice) for the purpose of implementing any undertaking between SOCAM and CCP regarding the application of the City Code);
(l) taken or proposed any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of any administrator, receiver, administrative receiver, trustee or similar officer or other encumbrancer of all or any part of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction;
(m) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;
(n) made or agreed or consented to:
(i) any significant change to:
- (A) the terms of the trust deeds constituting the pension scheme(s) established for its directors, employees or their dependants;
- (B) the benefits which accrue, or to the pensions which are payable, under such pension scheme(s);

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CONDITIONS OF THE OFFER

APPENDIX I

     - (C) the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined;

     - (D) the basis upon which the liabilities (including pensions) of such pension scheme(s) are funded or made; or

  - (ii) any change to the trustees including the appointment of a trust corporation but excluding any appointment of a member nominated trustee in accordance with existing nomination arrangements or one company appointment to fill a trustee vacancy;

(o) terminated or varied the terms of any agreement or arrangement between any member of the Wider CCP Group and any other person which is material in the context of the Wider CCP Group taken as a whole;
(p) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other material benefit relating to the employment or termination of employment of any person employed by the Wider CCP Group in a manner which is material in the context of the Wider CCP Group;
(q) save for transactions between members of the CCP Group, granted any material lease in respect of any of the leasehold or freehold property owned or occupied by it or transferred or otherwise disposed of any such property; or
(r) entered into any contract, commitment, agreement or arrangement or passed any resolution or made any offer (which remains open for acceptance) with respect to, or announced any intention to effect, any of the transactions, matters or events referred to in this paragraph 1.8.
1.9 Other events since the Accounting Date

Since the Accounting Date (save as Disclosed):

(a) there having been no adverse change or deterioration in the business, assets, financial or trading position or profits or prospects of any member of the Wider CCP Group which is in any case material in the context of the Wider CCP Group taken as a whole;
(b) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider CCP Group is or is likely to become a party (whether as plaintiff or claimant or defendant or otherwise) and which is material in the context of the Wider CCP Group taken as a whole having been threatened, announced or instituted by or against or remaining outstanding against or in respect of any member of the Wider CCP Group;

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CONDITIONS OF THE OFFER

APPENDIX I

(c) no enquiry or investigation by, or complaint or reference to, any relevant authority having been threatened, announced, implemented or instituted or remaining outstanding, against or in respect of any member of the Wider CCP Group which is in any case material in the context of the CCP Group taken as a whole;
(d) no actual, contingent or other liability having arisen which would be likely to adversely affect the business, assets, financial or trading position or profits or prospects of any member of the Wider CCP Group which is in any case material in the context of the CCP Group taken as a whole; or
(e) no material claim being made, and no circumstance having arisen which is likely to lead to a material claim being made, under the insurance of any member of the Wider CCP Group.

1.10 CCP information issues

SOCAM not having discovered:

(a) that any financial, business or other information concerning the Wider CCP Group publicly disclosed or disclosed in writing to any member of the Wider SOCAM Group or its advisers at any time by or on behalf of any member of the Wider CCP Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained in such disclosure not misleading and in each such case the matter concerned being material in the context of the Wider CCP Group taken as a whole;
(b) that (save as Disclosed) any member of the Wider CCP Group is subject to any liability, (whether actual, contingent or prospective) which is outside the ordinary course of business and in each such case the matter concerned being material in the context of the Wider CCP Group taken as a whole; or
(c) any information (save as Disclosed) which affects the import of any information disclosed in writing at any time by or on behalf of the Wider CCP Group to the extent that such discovered information is material in the context of the Wider CCP Group taken as a whole.

1.11 SOCAM information issues

CCP not having discovered:

(a) that any financial, business or other information concerning the Wider SOCAM Group publicly disclosed or disclosed in writing to any member of the Wider CCP Group or its advisers at any time by or on behalf of any member of the Wider SOCAM Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained in such disclosure not misleading and in each such case the matter concerned being material in the context of the Wider SOCAM Group taken as a whole;

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CONDITIONS OF THE OFFER

APPENDIX I

(b) that (save as publicly disclosed by SOCAM or disclosed in writing by or on behalf of SOCAM to CCP before the Joint Announcement) any member of the Wider SOCAM Group is subject to any liability (whether actual, contingent or prospective) which is outside the ordinary course of business and in each such case the matter concerned being material in the context of the Wider SOCAM Group taken as a whole; or
(c) any information (save as publicly disclosed by SOCAM or disclosed in writing by or on behalf of SOCAM to CCP before the Joint Announcement) which affects the import of any information disclosed at any time by or on behalf of the Wider SOCAM Group to the extent that such discovered information is material in the context of the Wider SOCAM Group taken as a whole.

1.12 Environmental issues

SOCAM not having discovered that (save as Disclosed):

(a) any past or present member of the Wider CCP Group has not complied with any applicable legislation or regulations of any jurisdiction with regard to the use, treatment, handling, storage, presence, transport, release, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or the health, safety or welfare of any person, or that there has otherwise been any such use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission (whether or not this constituted a non-compliance by any person with any legislation, consent or regulations and wherever the same may have taken place) which, in any case, would be likely to give rise to any liability (whether actual or contingent) or cost on the part of any member of the Wider CCP Group which in any case is material in the context of the Wider CCP Group taken as a whole;
(b) there is, or is likely to be, any liability, whether actual or contingent, to make good, repair, reinstate, improve or clean up any property (whether real or personal) now or previously owned, occupied or made use of by any past or present member of the Wider CCP Group or any waters under any environmental legislation, consent, regulation, notice, circular, order or other lawful requirement of any relevant authority or otherwise which in any case is material in the context of the Wider CCP Group taken as a whole; or
(c) circumstances exist whereby a person or class of persons would be likely to have a claim in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Wider CCP Group which is material in the context of the Wider CCP Group taken as a whole.

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CONDITIONS OF THE OFFER

APPENDIX I

1.13 SOCAM Shareholders’ approval

The passing at the SOCAM Meeting (or at any adjournment of such meeting) of such resolutions as may be necessary as required under the HK Listing Rules or other applicable laws and regulations in order to approve, implement, and effect the Offer and the acquisition of the CCP Shares pursuant to the Offer.

2. INVOKING CONDITIONS

SOCAM may not invoke or waive condition 1.11 ( SOCAM information issues ). Save for the conditions set out in the following paragraphs (which SOCAM may unilaterally invoke, subject to and in accordance with their respective terms), namely, Paragraphs 1.1 ( Acceptances ), 1.2 ( Completion of the Bond Cancellation ), 1.3 ( HK Stock Exchange listing approval ), and 1.13 ( SOCAM Shareholders’ approval )), SOCAM shall not invoke any of the other conditions except with CCP’s prior written consent, so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the relevant conditions are determined by both SOCAM and CCP to be of material significance to SOCAM in the context of the Offer.

CCP shall not invoke the condition set out in paragraph 1.11 ( SOCAM information issues ) so as to cause the Offer not to proceed, to lapse or be withdrawn unless the circumstances which give rise to the right to invoke the relevant condition are determined by both CCP and SOCAM to be of material significance to CCP Shareholders in the context of the Offer. Where CCP does invoke such condition in accordance with the foregoing requirement, the Offer shall lapse forthwith.

3. RIGHT TO WAIVE CONDITIONS

SOCAM reserves the right (but shall be under no obligation) to waive all or any of the conditions set out in Paragraph 1 ( Conditions of the Offer ), in whole or in part except for the conditions set out in paragraphs 1.1 ( Acceptances ), 1.2 ( Completion of the Bond Cancellation ), 1.3 ( HK Stock Exchange listing approval ) and 1.13 ( SOCAM Shareholders’ approval ), provided that SOCAM shall not waive (in whole or in part) the condition set out in paragraph 1.4 ( Competition issues ) unless the circumstances in respect of which SOCAM wishes to waive such conditions are determined by both SOCAM and CCP not to be of material significance to either SOCAM or CCP in the context of the Offer.

CCP reserves the right (but shall be under no obligation) to waive the condition set out in paragraph 1.11 ( SOCAM information issues ) in whole or in part.

4. OFFER LAPSING

The Offer will lapse if it (or any matter arising from the Offer) is referred to the Competition Commission before the later of the 21st day from the posting of the Offer Document and the date on which the Offer becomes or is declared unconditional as to acceptances.

— 39 —

APPENDIX I

CONDITIONS OF THE OFFER

The Offer will lapse (except with CCP’s prior written consent) unless all the conditions other than the condition set out in paragraph 1.1 ( Acceptances ) have been fulfilled or (if capable of being waived) waived or, where appropriate, have been determined by SOCAM in its reasonable opinion to be or remain satisfied by no later than midnight (London time) on the 21st day after the later of the 21st day from the posting of the Offer Document and the date on which the condition set out in paragraph 1.1 ( Acceptances ) is fulfilled (or in each case such later date as SOCAM may, with the prior written consent of CCP, decide). SOCAM shall be under no obligation to waive (if capable of waiver) or determine to be or remain satisfied or to treat as fulfilled any of the conditions set out in paragraphs 1.2 to 1.10 and Paragraphs 1.12 and 1.13 inclusive (and CCP shall be under no such obligation in respect of the condition set out in paragraph 1.11 ( SOCAM information issues )), in each case, by a date earlier than the latest date specified above for the fulfilment of such conditions notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

If the Offer lapses, the Offer will cease to be capable of further acceptance and persons accepting the Offer and SOCAM will cease to be bound by their acceptances submitted on or before the time when the Offer lapses.

5. CCP SHARES

— 40 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

1. FINANCIAL SUMMARY

The table set out below is a summary of the financial information of the SOCAM Group for the nine months ended 31 December 2006 and the two years ended 31 December 2008, as extracted from the annual reports of SOCAM for the two years ended 31 December 2008.

(i) Consolidated income statements

			Nine months
			ended
	Year ended 31 December		31 December
	2008	2007	2006
	HK$ million	HK$ million	HK$ million
Turnover
The Company and its subsidiaries	2,944.3	2,810.5	1,680.4
Share of jointly controlled entities/associates	3,688.5	2,270.2	1,606.2
	6,632.8	5,080.7	3,286.6
Group turnover	2,944.3	2,810.5	1,680.4
Other income	133.0	60.6	70.7
Changes in inventories of finished goods,
work in progress, contract work in progress
and properties held for sale	(17.3)	76.2	25.2
Raw materials and consumables used	(583.2)	(423.0)	(244.8)
Staff costs	(417.0)	(346.2)	(215.4)
Depreciation and amortisation expenses	(7.9)	(7.8)	(5.6)
Subcontracting, external labour costs and other
expenses	(1,863.9)	(2,212.5)	(1,308.6)
Dividend income from available-for-sale
investments	67.3	71.1	—
Fair value changes on investment properties	26.6	25.2	1.4
Fair value changes on embedded derivatives	(3.5)	(15.5)	621.4
Convertible bonds issued by the Company
— Fair value changes on embedded
derivatives	238.9	(326.6)	(28.1)
— Imputed interest expense	(48.5)	(78.5)	(40.5)
Interest on bank loans and other borrowing
costs	(180.9)	(208.6)	(125.4)
Gain on disposal of available-for-sale
investments	496.4	928.7	—

— 41 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

			Nine months
			ended
	Year ended 31 December		31 December
	2008	2007	2006
	HK$ million	HK$ million	HK$ million
Fair value changes on financial assets carried
at fair value through profit or loss	20.3	—	48.1
Impairment loss recognised in respect of
interests in jointly controlled entities	(12.1)	(85.8)	—
Impairment loss on available-for-sale
investments	(558.3)	—	—
(Loss) gain on disposals of interests in jointly
controlled entities	(6.4)	110.5	—
Loss on deemed disposal of interest in an
associate	—	(21.5)	119.1
Discount on deemed acquisition of interest in
an associate	84.7	—	—
Share of impairment loss of jointly controlled
entities	—	(34.4)	(84.3)
Share of results of jointly controlled entities	(78.1)	367.1	83.5
Share of results of associates	350.3	26.1	48.8
Loss on disposal of partial interest in a
subsidiary	—	—	(9.7)
Profit before taxation	584.7	715.6	636.2
Taxation	(15.6)	(11.3)	(7.7)
Profit for the year/period from continuing
operations	569.1	704.3	628.5
Discontinued operations
Loss for the period from discontinued
operations	—	—	(6.1)
Profit for the year/period	569.1	704.3	622.4

— 42 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

			Nine months
			ended
	Year ended	31 December	31 December
	2008	2007	2006
	HK$ million	HK$ million	HK$ million
Attributable to:
Equity holders of the Company	562.4	702.0	602.1
Minority interests	6.7	2.3	20.3
	569.1	704.3	622.4
Dividends
Paid or declared	273.5	198.0	120.3
Proposed	—	209.1	150.9
Earnings per share
Basic	HK$1.75	HK$2.34	HK$2.17
Diluted	HK$1.08	HK$2.29	HK$0.06

— 43 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

(ii) Consolidated balance sheets

	31 December	31 December	31 December
	2008	2007	2006
	HK$ million	HK$ million	HK$ million
Non-current Assets
Investment properties	—	92.9	63.2
Property, plant and equipment	28.8	24.5	29.4
Prepaid lease payments	43.9	42.6	40.8
Interests in jointly controlled entities	3,903.1	3,175.0	2,548.9
Available-for-sale investments	970.4	4,789.1	5,070.0
Interests in associates	2,430.0	1,836.9	—
Investment in convertible bonds	194.2	174.1	—
Club memberships	1.2	1.2	1.2
Amounts due from jointly controlled entities	553.8	188.8	—
Amounts due from associates	567.9	490.6	—
Defined benefit scheme assets	—	111.3	83.0
	8,693.3	10,927.0	7,836.5
Current Assets
Inventories	12.8	11.3	21.5
Prepaid lease payments	1.0	0.9	0.9
Properties held for sale	52.8	53.5	55.1
Properties under development for sale	185.7	—	—
Debtors, deposits and prepayments	644.1	589.5	811.6
Derivative financial instruments
— Embedded derivatives of convertible
bonds issued by an associate	12.7	16.2	—
— Early redemption option of convertible
bonds issued by the Company	—	4.6	8.6
Amounts due from customers for contract
work	219.1	161.9	108.9
Amounts due from jointly controlled entities	481.3	860.8	1,204.7
Amounts due from associates	49.0	129.8	—
Amounts due from related companies	46.5	1.9	1.3
Taxation recoverable	0.1	2.6	0.4
Pledged bank deposits	76.0	386.4	200.5
Bank balances, deposits and cash	617.1	153.3	64.8
	2,398.2	2,372.7	2,478.3
Assets classified as held for sale	444.6	—	31.0
	2,842.8	2,372.7	2,509.3

— 44 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

	31 December	31 December	31 December
	2008	2007	2006
	HK$ million	HK$ million	HK$ million
Current Liabilities
Creditors and accrued charges	867.5	802.5	864.6
Amounts due to customers for contract work	132.1	85.0	142.6
Amounts due to jointly controlled entities	344.7	12.4	156.1
Amounts due to associates	28.1	294.8	—
Amounts due to related companies	1.8	0.4	0.1
Loan from a related company	—	100.0	—
Taxation payable	11.3	8.3	10.7
Derivative financial instruments	0.8	248.8	175.3
Bank borrowings due within one year	3,447.5	2,800.5	2,394.8
Convertible bonds	430.5	—	—
	5,264.3	4,352.7	3,744.2
Liabilities associated with assets classified as
held for sale	62.6	—	—
	5,326.9	4,352.7	3,744.2
Net Current Liabilities	(2,484.1)	(1,980.0)	(1,234.9)
Total Assets Less Current Liabilities	6,209.2	8,947.0	6,601.6
Capital and Reserves
Share capital	321.9	320.9	283.6
Reserves	4,677.3	6,920.7	4,880.3
Total equity attributable to equity holders of
the Company	4,999.2	7,241.6	5,163.9
Minority interests	55.1	53.7	52.2
	5,054.3	7,295.3	5,216.1
Non-current Liabilities
Bank borrowings	1,070.0	1,259.0	567.4
Convertible bonds	—	392.0	817.6
Defined benefit scheme liabilities	84.3	—	—
Deferred tax liabilities	0.6	0.7	0.5
	1,154.9	1,651.7	1,385.5
	6,209.2	8,947.0	6,601.6

— 45 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

2. FINANCIAL STATEMENTS

The following is the latest published audited consolidated financial statements of the SOCAM Group for the year ended 31 December 2008 together with the notes therein, as extracted from the annual report of SOCAM for the year ended 31 December 2008.

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2008

		2008	2007
	Notes	HK$ million	HK$ million
Turnover
The Company and its subsidiaries		2,944.3	2,810.5
Share of jointly controlled entities/associates		3,688.5	2,270.2
		6,632.8	5,080.7
Group turnover	7	2,944.3	2,810.5
Other income	8	133.0	60.6
Changes in inventories of finished goods, work in progress,
contract work in progress and properties held for sale		(17.3)	76.2
Raw materials and consumables used		(583.2)	(423.0)
Staff costs		(417.0)	(346.2)
Depreciation and amortisation expenses		(7.9)	(7.8)
Subcontracting, external labour costs and other expenses		(1,863.9)	(2,212.5)
Dividend income from available-for-sale investments		67.3	71.1
Fair value changes on investment properties		26.6	25.2
Fair value changes on embedded derivatives	9	(3.5)	(15.5)
Convertible bonds issued by the Company
- Fair value changes on embedded derivatives	9	238.9	(326.6)
- Imputed interest expense	10	(48.5)	(78.5)
Interest on bank loans and other borrowing costs	10	(180.9)	(208.6)
Gain on disposal of available-for-sale investments	20	496.4	928.7
Fair value changes on financial assets carried at fair value
through profit or loss		20.3	—
Impairment loss recognised in respect of interests in jointly
controlled entities	19	(12.1)	(85.8)
Impairment loss on available-for-sale investments		(558.3)	—
(Loss) gain on disposals of interests in jointly controlled
entities	42	(6.4)	110.5
Loss on deemed disposal of interest in an associate	42	—	(21.5)
Discount on deemed acquisition of interest in an associate	21	84.7	—

— 46 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		2008	2007
	Notes	HK$ million	HK$ million
Share of impairment loss of jointly controlled entities		—	(34.4)
Share of results of jointly controlled entities	7	(78.1)	367.1
Share of results of associates	7	350.3	26.1
Profit before taxation		584.7	715.6
Taxation	11	(15.6)	(11.3)
Profit for the year	13	569.1	704.3
Attributable to:
Equity holders of the Company		562.4	702.0
Minority interests		6.7	2.3
		569.1	704.3
Dividends	14
Paid		273.5	198.0
Proposed		—	209.1
Earnings per share	15
Basic		HK$1.75	HK$2.34
Diluted		HK$1.08	HK$2.29

— 47 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

CONSOLIDATED BALANCE SHEET

At 31 December 2008

		2008	2007
	Notes	HK$ million	HK$ million
Non-current Assets
Investment properties	16	—	92.9
Property, plant and equipment	17	28.8	24.5
Prepaid lease payments	18	43.9	42.6
Interests in jointly controlled entities	19	3,903.1	3,175.0
Available-for-sale investments	20	970.4	4,789.1
Interests in associates	21	2,430.0	1,836.9
Investment in convertible bonds	22	194.2	174.1
Club memberships		1.2	1.2
Amounts due from jointly controlled entities	23	553.8	188.8
Amounts due from associates	25	567.9	490.6
Defined benefit scheme assets	37	—	111.3
		8,693.3	10,927.0
Current Assets
Inventories	24	12.8	11.3
Prepaid lease payments	18	1.0	0.9
Properties held for sale		52.8	53.5
Properties under development for sale	16	185.7	—
Debtors, deposits and prepayments	26	644.1	589.5
Derivative financial instruments
- Embedded derivatives of convertible bonds issued
by an associate	22	12.7	16.2
- Early redemption option of convertible bonds issued
by the Company	33	—	4.6
Amounts due from customers for contract work	24	219.1	161.9
Amounts due from jointly controlled entities	23	481.3	860.8
Amounts due from associates	25	49.0	129.8
Amounts due from related companies	28	46.5	1.9
Taxation recoverable		0.1	2.6
Pledged bank deposits	27	76.0	386.4
Bank balances, deposits and cash	26	617.1	153.3
		2,398.2	2,372.7
Assets classified as held for sale	29	444.6	—
		2,842.8	2,372.7

— 48 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

		2008	2007
	Notes	HK$ million	HK$ million
Current Liabilities
Creditors and accrued charges	30	867.5	802.5
Amounts due to customers for contract work	24	132.1	85.0
Amounts due to jointly controlled entities	23	344.7	12.4
Amounts due to associates	25	28.1	294.8
Amounts due to related companies	28	1.8	0.4
Loan from a related company	31	—	100.0
Taxation payable		11.3	8.3
Derivative financial instruments	33	0.8	248.8
Bank borrowings due within one year	32	3,447.5	2,800.5
Convertible bonds	33	430.5	—
		5,264.3	4,352.7
Liabilities associated with assets classified as held for sale	29	62.6	—
		5,326.9	4,352.7
Net Current Liabilities		(2,484.1)	(1,980.0)
Total Assets Less Current Liabilities		6,209.2	8,947.0
Capital and Reserves
Share capital	34	321.9	320.9
Reserves	35	4,677.3	6,920.7
Total equity attributable to equity holders
of the Company		4,999.2	7,241.6
Minority interests		55.1	53.7
		5,054.3	7,295.3
Non-current Liabilities
Bank borrowings	32	1,070.0	1,259.0
Convertible bonds	33	—	392.0
Defined benefit scheme liabilities	37	84.3	—
Deferred tax liabilities	36	0.6	0.7
		1,154.9	1,651.7
		6,209.2	8,947.0

— 49 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

For the year ended 31 December 2008

	2008	2007
	HK$ million	HK$ million
(Loss) gain on fair value changes of available-for-sale investments	(2,857.8)	1,394.2
Exchange differences arising on translation of financial statements
of foreign operations	148.5	146.1
Recognition of actuarial (loss) gain	(209.6)	17.8
Share of translation reserve of associates	129.3	23.6
Share of reserve of a jointly controlled entity	102.0	—
Net (expense) income recognised directly in equity	(2,687.6)	1,581.7
Transfer to profit or loss on disposals of available-for-sale
investments	(458.4)	(824.4)
Transfer to profit or loss in respect of impairment loss on
available-for-sale investments	558.3	—
Transfer to profit or loss on disposals of interests in jointly
controlled entities	(0.4)	(9.2)
Profit for the year	569.1	704.3
Total recognised income and expense for the year	(2,019.0)	1,452.4
Attributable to:
Equity holders of the Company	(2,027.7)	1,447.6
Minority interests	8.7	4.8
	(2,019.0)	1,452.4

— 50 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2008

	2008	2007
	HK$ million	HK$ million
OPERATING ACTIVITIES
Profit before taxation	584.7	715.6
Adjustments for:
Impairment loss on available-for-sale investments	558.3	—
Impairment loss recognised in respect of interests in jointly
controlled entities	12.1	85.8
Loss (gain) on disposal of interests in jointly controlled entities	6.4	(110.5)
Loss on deemed disposal of interest in an associate	—	21.5
Discount on deemed acquisition of interest in an associate	(84.7)	—
Share of impairment loss of jointly controlled entities	—	34.4
Share of results of jointly controlled entities	78.1	(367.1)
Share of results of associates	(350.3)	(26.1)
Interest income	(23.3)	(18.1)
Interest on bank loans and other borrowing costs	180.9	208.6
Imputed interest on convertible bonds issued by the Company	48.5	78.5
Interest from investment in convertible bonds	(24.0)	(12.4)
Imputed interest income on loans to jointly controlled
entities/associates	(53.2)	—
Dividend income from available-for-sale investments	(67.3)	(71.1)
Fair value changes on investment properties	(26.6)	(25.2)
Fair value changes on financial assets carried at fair value
through profit or loss	(20.3)	—
Fair value changes on embedded derivatives	(235.4)	342.1
Depreciation on property, plant and equipment	6.9	6.9
Amortisation of prepaid lease payments	1.0	0.9
Net loss on disposal of property, plant and equipment	2.0	6.4
Gain on disposal of available-for-sale investments	(496.4)	(928.7)
Unrealised gain on income from associates/jointly controlled
entities	2.5	5.8
Impairment loss on other receivables	—	12.2
Share-based payment expense	39.9	31.1
Discount on acquisition of a jointly controlled entity	(0.9)	—
Loss on disposal of financial assets carried at fair value through
profit or loss	—	0.1

— 51 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

	2008	2007
	HK$ million	HK$ million
Operating cash flows before movements in working capital	138.9	(9.3)
Decrease in inventories	0.2	11.1
Increase in properties under development for sale	(60.2)	—
Decrease in properties held for sale	0.8	1.6
(Increase) decrease in debtors, deposits and prepayments	(287.3)	254.2
Increase in amounts due from customers for contract work	(57.3)	(53.0)
Increase in amounts due from related companies	(44.6)	(0.6)
Decrease (increase) in amounts due from associates	235.3	(129.7)
Decrease (increase) in amounts due from jointly controlled entities	22.0	(121.5)
Increase in defined benefit scheme assets	(14.0)	(10.5)
Increase (decrease) in creditors and accrued charges	60.9	(13.6)
Increase (decrease) in amounts due to customers for contract work	47.2	(57.6)
Increase (decrease) in amounts due to jointly controlled entities	394.8	(143.7)
(Decrease) increase in amounts due to associates	(73.3)	294.8
Increase in amounts due to related companies	1.4	0.3
Cash from operations	364.8	22.5
Hong Kong Profits Tax paid	(8.9)	(16.1)
Hong Kong Profits Tax refunded	2.8	0.4
Income tax of other regions in the PRC paid	(4.2)	(0.2)
NET CASH FROM OPERATING ACTIVITIES	354.5	6.6
INVESTING ACTIVITIES
Investments in jointly controlled entities	(565.9)	(339.4)
Investments in associates	—	(983.8)
Advance to jointly controlled entities	(488.8)	(467.3)
Advance to an associate	(241.8)	(507.7)
Investment in convertible bonds of an associate	—	(195.3)
Purchases of property, plant and equipment and investment
properties	(31.0)	(9.2)
Dividends received from jointly controlled entities	66.7	49.4
Proceeds from sales of available-for-sale investments	998.9	1,779.4
Proceeds from sales of financial assets carried at fair value through
profit or loss	52.9	71.4
Interest received	27.2	20.0
Proceeds from sales of property, plant and equipment and leasehold
land	0.3	1.9
Dividends received from available-for-sale investments	67.3	71.1

— 52 —

APPENDIX II FINANCIAL INFORMATION ON THE SOCAM GROUP

	2008	2007
	HK$ million	HK$ million
Net proceeds from disposal of a jointly controlled entity	9.2	0.3
Net cash outflow arising from deregistration of a subsidiary	(0.2)	—
Pledged bank deposits	310.4	(185.9)
NET CASH FROM (USED IN) INVESTING ACTIVITIES	205.2	(695.1)
FINANCING ACTIVITIES
New bank loans raised	2,209.0	2,567.0
(Repayment to) loan from a related company	(100.0)	100.0
Net proceeds received on issue of shares	4.5	43.9
Repayments of bank loans	(1,740.4)	(1,487.7)
Interest paid	(165.0)	(200.2)
Other borrowing costs paid	(16.0)	(8.4)
Other movements with minority shareholders	0.4	(0.5)
Dividends paid	(273.5)	(249.1)
Dividends paid to minority shareholders	(5.0)	(2.8)
NET CASH (USED IN) FROM FINANCING ACTIVITIES	(86.0)	762.2
NET INCREASE IN CASH AND CASH EQUIVALENTS	473.7	73.7
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF
THE YEAR	138.6	62.1
EFFECT OF FOREIGN EXCHANGE RATE CHANGES	6.9	2.8
CASH AND CASH EQUIVALENTS AT THE END OF THE
YEAR	619.2	138.6
ANALYSIS OF THE BALANCES OF CASH AND CASH
EQUIVALENTS
Bank balances, deposits and cash	617.1	153.3
Bank balances, deposits and cash included in assets classified as
held for sale (note 29)	2.1	—
Bank overdrafts	—	(14.7)
	619.2	138.6

— 53 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2008

1. GENERAL

The Company is incorporated in Bermuda as an exempted company with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The Directors consider that its parent and ultimate holding company is Shui On Company Limited (“SOCL”), a private limited liability company incorporated in the British Virgin Islands. The addresses of the registered office and principal place of business of the Company are disclosed in Corporate Information in the annual report.

The principal activity of the Company is investment holding. Its subsidiaries, jointly controlled entities and associates are principally engaged in construction and contracting, renovation and fitting out, manufacturing and sales of cement, property development and investment, asset management and investment holding.

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

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

In the current year, the Group has applied the following new amendments and interpretations (“new HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), which are or have become effective. The adoption of the new HKFRSs has had no material effect on the preparation and presentation of the results and financial position for the current or prior accounting periods. Accordingly, no prior period adjustment has been required.

HKAS 39 & HKFRS 7 (Amendments) Reclassification of Financial Assets HK(IFRIC) — INT 11 HKFRS 2: Group and Treasury Share Transactions HK(IFRIC) — INT 12 Service Concession Arrangements HK(IFRIC) — INT 14 HKAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

3. POTENTIAL IMPACT ARISING ON THE NEW OR REVISED ACCOUNTING STANDARDS NOT YET EFFECTIVE

The Group has not early applied the following new and revised standards, amendments or interpretations that have been issued but are not yet effective.

HKFRSs (Amendments) Improvements to HKFRSs[1] HKAS 1 (Revised) Presentation of Financial Statements[2] HKAS 23 (Revised) Borrowing Costs[2] HKAS 27 (Revised) Consolidated and Separate Financial Statements[3] HKAS 32 & HKAS 1 (Amendments) Puttable Financial Instruments and Obligations Arising on Liquidation[2] HKAS 39 (Amendment) Eligible Hedged Items[3] HKFRS 1 & HKAS 27 (Amendments) Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate[2] HKFRS 2 (Amendment) Vesting Conditions and Cancellations[2] HKFRS 3 (Revised) Business Combinations[3] HKFRS 7 (Amendment) Improving Disclosures about Financial Instruments[2] HKFRS 8 Operating Segments[2] HK(IFRIC) — INT 9 & HKAS 39 Embedded Derivatives[4] (Amendments) HK(IFRIC) — INT 13 Customer Loyalty Programmes[5]

— 54 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

HK(IFRIC) — INT 15 Agreements for the Construction of Real Estate[2] HK(IFRIC) — INT 16 Hedges of a Net Investment in a Foreign Operation[6] HK(IFRIC) — INT 17 Distribution of Non-cash Assets to Owners[3] HK(IFRIC) — INT 18 Transfer of Assets from Customers[7]

1 Effective for annual periods beginning on or after 1 January 2009 except the amendments to HKFRS 5, effective for annual periods beginning on or after 1 July 2009

2 Effective for annual periods beginning on or after 1 January 2009
3 Effective for annual periods beginning on or after 1 July 2009
4 Effective for annual periods ending on or after 30 June 2009
5 Effective for annual periods beginning on or after 1 July 2008
6 Effective for annual periods beginning on or after 1 October 2008
7 Effective for transfer on or after 1 July 2009

The application of HKFRS 3 (Revised) may affect the accounting for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. HKAS 27 (Revised) will affect the accounting treatment for changes in a parent’s ownership interest in a subsidiary. The Directors of the Company anticipate that the application of the other new and revised standards, amendments or interpretations will have no material impact on the results and financial position of the Group.

4. SIGNIFICANT ACCOUNTING POLICIES

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

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

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

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

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

All inter-company transactions and balances within the Group are eliminated on consolidation.

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

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under HKFRS 3 Business Combinations are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Goodwill

Goodwill arising on an acquisition of a subsidiary represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the relevant subsidiary at the date of acquisition. Such goodwill is carried at cost less any accumulated impairment losses.

Capitalised goodwill arising on an acquisition of a subsidiary is presented separately in the consolidated balance sheet.

For the purposes of impairment testing, goodwill arising from an acquisition of a subsidiary is allocated to each of the relevant cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the acquisition. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, and whenever there is an indication that the unit may be impaired. For goodwill arising on an acquisition in a financial year, the cash-generating unit to which goodwill has been allocated is tested for impairment before the end of that financial year. When the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated to reduce the carrying amount of any goodwill allocated to the unit first, and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in the consolidated income statement. An impairment loss for goodwill is not reversed in subsequent periods.

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

Excess of an acquirer’s interest in the net fair value of an acquiree’s identifiable assets, liabilities and contingent liabilities over cost (“Discount on acquisition”)

A discount on acquisition arising on an acquisition of a subsidiary, an associate or a jointly controlled entity represents the excess of the net fair value of an acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the business combination, after reassessment. Discount on acquisition is recognised immediately in profit or loss. A discount on acquisition arising on an acquisition of an associate or a jointly controlled entity (which is accounted for using the equity method) is included as income in the determination of the investor’s share of results of the associate or jointly controlled entity in the period in which the investment is acquired.

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Investments in associates and jointly controlled entities

An associate is an entity over which the investor has significant influence and that is neither a subsidiary nor an interest in a joint venture.

Joint venture arrangements that involve the establishment of a separate entity in which the venturers have joint control over the economic activity of the entity are referred to as jointly controlled entities.

The results and assets and liabilities of associates and jointly controlled entities are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale (in which case it is accounted for under HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations) or when the investment is designated as at fair value through profit or loss upon initial recognition or is classified as held for trading (in which case it is accounted for under HKAS 39 Financial Instruments: Recognition and Measurement). Under the equity method, investments in associates and jointly controlled entities are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Group’s share of net assets of the associate and the jointly controlled entity, less any identified impairment loss. When the Group’s share of losses equals or exceeds its interest in the associate or the jointly controlled entities (which includes any long-term interest that, in substance, form part of the Group’s net investment in the associates or jointly controlled entities), the Group discontinues recognising its share of further losses except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or the jointly controlled entity.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate or the jointly controlled entity recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment.

Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

When a group entity transacts with an associate or a jointly controlled entity of the Group, profits or losses are eliminated to the extent of the Group’s interest in the associate or the jointly controlled entity.

Non-current assets held for sale

Non-current assets or disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition.

Non-current assets (or disposal groups) classified as held for sale are measured at the lower of the assets’ (or disposal groups’) previous carrying amount and fair value less costs to sell.

Revenue recognition

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

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Sales of properties

Revenue from the sale of properties in the ordinary course of business is recognised when all the following criteria are met:

the significant risks and rewards of ownership of the properties are transferred to buyers;
neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the properties are retained;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Payments received from purchasers prior to this stage are recorded as sales deposits under current liabilities.

Others

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

Service income is recognised when services are provided.

Revenue from sale of goods is recognised when goods are delivered and title has passed.

Rental income is recognised on a straight-line basis over the term of the relevant lease.

Dividend income from investments including financial assets at fair value through profit or loss is recognised when the Group’s right to receive the relevant payment has been established.

Investment properties

Investment properties are properties (including properties under construction or development for future use as investment properties) held to earn rentals and/or for capital appreciation. On initial recognition, investment properties are measured at cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured using the fair value model and stated at fair value at the balance sheet date. Gains or losses arising from changes in the fair value of investment property are included as profit or loss for the period in which they arise.

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

Property, plant and equipment

Property, plant and equipment including land and buildings held for use in the production or supply of goods or services, or for administrative purposes are stated at cost less subsequent accumulated depreciation and impairment losses.

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APPENDIX II FINANCIAL INFORMATION ON THE SOCAM GROUP

Depreciation is provided to write off the cost of items of property, plant and equipment over their estimated useful lives and after taking into account their estimated residual value, if any, using the straight-line method. Both the useful life of an asset and its residual value, if any, are reviewed annually.

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

Club memberships

On initial recognition, club memberships are stated at cost. After initial recognition, club memberships with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses.

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

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

Inventories

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

Properties held for sale

Properties held for sale are stated at the lower of cost and net realisable value. Net realisable value is determined based on prevailing market conditions.

Properties under development for sale

Properties under development, which are intended to be held for sale, are measured at the lower of cost and net realisable value. Cost includes costs of land, development expenditure incurred, borrowing costs capitalised in accordance with the Group’s accounting policy and other direct costs attributable to such properties. These assets are recorded as current assets as they are expected to be realised in, or are intended for sale within the Group’s normal operating cycle. Upon completion, the assets are recorded as properties held for sale. Net realisable value is determined based on prevailing market conditions.

Prepaid lease payments on land use rights

Prepaid lease payments for leasehold land are charged to the consolidated income statement on a straight-line basis over the period of the land use rights.

Construction and building maintenance contracts

Where the outcome of a construction and building maintenance contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

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APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Where the outcome of a construction and building maintenance contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that probably will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

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

Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as an amount due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is shown as an amount due to customers for contract work. Amounts received before the related work is performed are included in the consolidated balance sheet, as a liability, as advances received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated balance sheet under debtors, deposits and prepayments.

Borrowing costs

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

All other borrowing costs are recognised in the consolidated income statement in the period in which they are incurred.

Impairment of assets (other than goodwill and club memberships with indefinite useful life)

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

Taxation

Taxation represents the sum of the tax currently payable and deferred tax.

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

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

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APPENDIX II FINANCIAL INFORMATION ON THE SOCAM GROUP

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

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

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

Leasing

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

The Group as lessor

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

The Group as lessee

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

Foreign currencies

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

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

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

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

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

Goodwill and fair value adjustments on identifiable assets acquired arising on acquisitions of foreign operations prior to 1 April 2005 are treated as non-monetary foreign currency items of the acquirer and reported using the historical exchange rate prevailing at the date of the acquisition.

Retirement benefits costs

Payments to the Mandatory Provident Fund Scheme (the “MPF Scheme”), which is a defined contribution scheme, are charged as an expense when employees have rendered service entitling them to the contributions.

For the defined benefit retirement scheme, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each balance sheet date. All actuarial gains and losses of defined benefit scheme are recognised immediately in actuarial gain and loss in equity in the period in which they occur.

Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The amount recognised in the consolidated balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

Financial instruments

Financial assets and financial liabilities are recognised on the balance sheet when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets or financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets and financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

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

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or, where appropriate, a shorter period.

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Income is recognised on an effective interest basis for debt instruments.

Financial assets carried at fair value through profit or loss

Financial assets are classified at fair value through profit or loss where the financial asset is held for trading.

A financial asset is classified as held for trading if:

it has been acquired principally for the purpose of selling in the near future; or
it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.

At each balance sheet date subsequent to initial recognition, financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss excludes any dividend or interest earned on the financial asset.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. At each balance sheet date subsequent to initial recognition, loans and receivables (including trade debtors, amounts due from jointly controlled entities, associates and related companies, the debt receivable portion of investment in convertible bonds, pledged bank deposits and bank balances, deposits and cash) are carried at amortised cost using the effective interest method, less any identified impairment loss (see the accounting policy on impairment loss on financial assets below).

Available-for-sale investments

Available-for-sale investments are non-derivatives that are neither designated nor classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments. At each balance sheet date subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Changes in fair value are recognised in equity, until the financial asset is disposed of or is determined to be impaired, at which time, the cumulative gain or loss previously recognised in equity is removed from equity and recognised in profit or loss (see accounting policy on impairment loss on financial assets below).

Investment in convertible bonds

The Group’s investment in convertible bonds issued by an associate that contain both a debt receivable component and embedded derivatives is classified separately into respective components on initial recognition that are recognised initially at fair value. In subsequent periods, the debt receivable component of the convertible bonds is carried at amortised cost using the effective interest method. The embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss.

Transaction costs that relate to the acquisition of the convertible bonds are allocated to the debt receivable and embedded derivatives components in proportion to the allocation of the proceeds. Transaction costs relating to the embedded derivatives are charged to profit or loss immediately. Transaction costs relating to the debt receivable component are included in the carrying amount of the debt receivable portion and amortised over the period of the convertible bonds using the effective interest method.

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for any impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial asset have been affected.

For an available-for sale equity investment, a significant or prolonged decline in the fair value of that investment below its cost is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include:

significant financial difficulty of the issuer or counterparty; or
default or delinquency in interest or principal payments; or
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For certain categories of financial asset, such as trade debtors, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio, observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, an impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amounts of financial assets are reduced by impairment directly except for trade debtors, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a debtor is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Impairment losses on available-for-sale equity investments will not be reversed in profit or loss in subsequent periods. Any increase in fair value subsequent to impairment loss is recognised directly in equity. For available-for-sale debt investments, impairment losses are subsequently reversed if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

Financial liabilities and equity

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

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

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

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability or, where appropriate, a shorter period.

Interest expense is recognised on an effective interest basis.

Convertible bonds

Convertible bonds issued by the Group that contain both liability and conversion option components are classified separately into the respective components on initial recognition. A conversion option that will be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company’s own equity instruments is a conversion option derivative. At the date of issue, both the liability and conversion option components are recognised at fair value.

In subsequent periods, the liability component of the convertible bonds is carried at amortised cost using the effective interest method. The conversion option derivative is measured at fair value with changes in fair value recognised in profit or loss.

Transaction costs that relate to the issue of the convertible loan notes are allocated to the liability and conversion option components in proportion to the allocation of the proceeds. Transaction costs relating to the conversion option derivative are charged to profit or loss immediately. Transaction costs relating to the liability component are included in the carrying amount of the liability portion and amortised over the period of the convertible loan notes using the effective interest method.

Borrowings

Bank borrowings and loans from a related company are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs.

Other financial liabilities

Other financial liabilities (including creditors, amounts due to jointly controlled entities, associates and related companies) are subsequently measured at amortised cost, using the effective interest method.

Equity instruments

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

Embedded derivatives

Derivatives embedded in non-derivative host contracts are treated as separate derivatives when their risk and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognised in profit or loss.

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APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Derivatives (including embedded derivatives which are separated from non-derivatives host contracts) that do not qualify for hedge accounting are deemed as financial assets/financial liabilities held for trading and are measured at fair value except for derivative instruments which are linked to and must be settled by delivery of unquoted equity instruments whose fair value cannot be reliably measured and such derivative instruments are stated at cost less impairment, if applicable.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. A financial guarantee contract issued by the Group and not designated at fair value through profit or loss is recognised initially at its fair value less transaction costs that are directly attributable to the issue of the financial guarantee contract. Subsequent to initial recognition, the Group measures the financial guarantee contract at the higher of: (i) the amount determined in accordance with HKAS 37 Provisions, Contingent Liabilities and Contingent Assets; and (ii) the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with HKAS 18 Revenue.

Derecognition

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

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

Share-based payment transactions

Share options granted to employees

The fair value of services received determined by reference to the fair value of share options granted at the grant date is expensed on a straight-line basis over the vesting period, with a corresponding increase in equity (share option reserve).

At each balance sheet date, for share options, which are conditional upon satisfying specified non-market performance vesting conditions, the Group revises its estimates of the number of options that are expected to vest ultimately. The impact of the revision of the original estimates during the vesting period, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the share option reserve.

At the time when the share options are exercised, the amount previously recognised in the share option reserve will be transferred to share premium. When share options are forfeited after the vesting date or are still not exercised at the expiry date, the amount previously recognised in the share option reserve will be transferred to retained profits.

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in note 4, the Directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The key estimates and assumptions that may 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.

Construction contracts

The Group recognises contract revenue and profit on a construction contract according to the management’s estimation of the total outcome of the project as well as the percentage of completion of construction works. Notwithstanding that the management reviews and revises the estimates of both contract revenue and costs for the construction contract as the contract progresses, the actual outcome of the contract in terms of its total revenue and costs may be higher or lower than the estimations and this will affect the revenue and profit recognised.

Fair value of derivatives and other financial instruments

The Directors of the Company use their judgement and engage independent professional valuers in selecting an appropriate valuation technique for financial instruments not quoted in an active market. Valuation techniques commonly used by market practitioners are applied. For derivative financial instruments, assumptions are made based on quoted market rates adjusted for specific features of the instrument. Other financial instruments are valued using a discounted cash flow analysis based on assumptions supported, where possible, by observable market prices or rates.

Impairment of available-for-sale investments

The Group determines that available-for-sale investments are impaired when there has been a significant or prolonged decline in the fair value below its cost, which is judgmental by nature, so profit and loss could be affected by changes in this judgement.

6. FINANCIAL INSTRUMENTS

Financial risk management objectives and policies

The Group’s major financial instruments include available-for-sale investments, investment in convertible bonds, debtors, amounts due from jointly controlled entities and associates, pledged bank deposits, bank balances, creditors, amounts due to jointly controlled entities, a related company and an associate, bank borrowings, loan from a related company and convertible bonds. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The Group manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

— 67 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Categories of financial instruments

	2008	2007
	HK$ million	HK$ million
Financial assets
Available-for-sale investments	970.4	4,789.1
Loans and receivables (including cash and cash equivalents)	3,218.3	2,962.5
Derivative financial instruments	12.7	20.8
Financial liabilities
Amortised cost	5,869.8	5,661.6
Derivative financial instruments	0.8	248.8

(a) Market risk

The Group is exposed primarily to the financial risks of changes in interest rates, foreign currency exchange rates and equity prices. There has been no change to the Group’s exposure to market risk or the manner in which it manages and measures the risk. Details of each type of market risk are described as follows:

(i) Interest rate risk

The Group is exposed to cash flow interest rate risk due to the fluctuation of the prevailing market interest rate on bank deposits and variable-rate borrowings. The Group is also exposed to fair value interest rate risk, which relates primarily to its fixed-rate pledged bank deposits, fixed-rate bank borrowings and the debt portion of the convertible bonds issued by the Company and an associate. The Group currently does not use any derivative contracts to hedge its exposure to interest rate risk but would consider doing so in respect of significant exposure should the need arise.

The Group’s exposure to interest rates on financial assets and financial liabilities is detailed in the liquidity risk management section of this note. The Group’s cash flow interest rate risk is mainly concentrated on the fluctuation of HIBOR arising from the Group’s Hong Kong dollar denominated borrowings.

Interest rate sensitivity

The sensitivity analyses below have been determined based on the exposure to cash flow interest rate risk for variable-rate borrowings. The analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. An increase or decrease of 100 basis points (2007: 100 basis points) is used when reporting the interest rate risk internally and represents management’s assessment of the reasonably possible change in interest rates.

At the balance sheet date, if interest rates had been increased/decreased by 100 basis points (2007: 100 basis points) and all other variables were held constant, the Group’s post tax profit would decrease/increase by approximately HK$45.2 million for the year ended 31 December 2008 (2007: HK$40.5 million).

(ii) Foreign currency risk

Most of the Group’s assets and liabilities are denominated in Hong Kong dollars or Renminbi, which are the same as the functional currency of the relevant group entity. The Group undertakes certain transactions denominated in foreign currencies, hence the exposure to exchange rate fluctuations arises. The Group does not expect any significant exposure to foreign exchange fluctuations and does not use any derivative contracts to hedge against its exposure to currency risk. The Group manages its foreign currency risk by closely monitoring the movement of the foreign currency rate.

— 68 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities are as follows:

	2008	2007
	HK$ million	HK$ million
Assets
United States Dollars	658.4	651.9
Renminbi	312.7	89.9
Liabilities
United States Dollars	232.5	429.0
Renminbi	40.8	—

Foreign currency sensitivity

The Group’s foreign currency risk is mainly concentrated on the fluctuation of the Renminbi against the Hong Kong dollar. It is assumed that the pegged rate between the Hong Kong dollar and the United States dollar would be materially unaffected by any changes in movement in value of the United States dollar against other currencies. The following table details the Group’s sensitivity to a 7% (2007: 7%) increase or decrease in the Hong Kong dollar against the Renminbi. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 7% (2007: 7%) change in foreign currency rates. A positive number indicates an increase in profit for the year where the Renminbi strengthens against the Hong Kong dollar. For a 7% (2007: 7%) weakening of the Renminbi against the Hong Kong dollar, there would be an equal and opposite impact on the profit and the balances below would be negative.

		2008		2007
	_HK$ _	million	_HK$ _	million
Renminbi		19.0		6.3

(iii) Other price risk

The Group is required to estimate the fair value of the embedded derivatives of the convertible bonds issued by the Company and an associate at each balance sheet date, which exposing the Group to equity price risk. Details of the convertible bonds issued by the Company and an associate are set out in notes 33 and 22, respectively.

If the equity prices had been 20% (2007: 20%) higher/lower while all other input variables of the valuation models were held constant, the Group’s profit would (decrease)/increase as follows:

	2008	2007
	HK$ million	HK$ million
Higher by 20% (2007: 20%)
Convertible bonds issued by the Company	(1.6)	(122.4)
Convertible bonds issued by an associate	0.2	5.0
Lower by 20% (2007: 20%)
Convertible bonds issued by the Company	0.6	113.4
Convertible bonds issued by an associate	(0.2)	(4.3)

— 69 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The Group is also exposed to equity price risk through its available-for-sale investment. If the market price of the investment had been increased/decreased by 20% (2007: 20%), the Group’s reserve/profit for the year ended 31 December 2008 would increase/decrease by approximately HK$194.1 million (2007: the Group’s reserve would increase/decrease by approximately HK$957.8 million).

(b) Credit risk

The Group’s maximum exposure to credit risk in the event of the counterparties’ failure to perform their obligations in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the consolidated balance sheet. In order to minimise credit risk, the Group has policies in place for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the Directors of the Company consider that the credit risk is significantly reduced.

The Group has a concentration of credit risk in respect of amounts due from jointly controlled entities, where 37% (2007: 36%) of the balance at 31 December 2008 is due from Broad Wise Limited. Except for this, the Group has no other significant concentration of credit risk, with exposure spread over a number of counterparties and customers.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

With respect to credit risk arising from amounts due from jointly controlled entities and associates, the Group’s exposure to credit risk arising from default of the counterparty is limited as the counterparty has sufficient net assets to repay its debts and a good history of repayment. The Group does not expect to incur a significant loss for uncollected amounts due from these jointly controlled entities and associates.

(c) Capital risk

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt: equity ratio. There has been no change to the Group’s exposure to capital risk or the manner in which it manages and measures the risk.

The capital structure of the Group consists of debt, which includes borrowings and convertible bonds issued, and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained profits. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

The Directors of the Company review the capital structure periodically. As a part of this review, the Directors consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the Directors, the Group will adjust its overall capital structure through the issue of new shares, new debt or the redemption of existing debt.

(d) Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank and other borrowings. At 31 December 2008, the Group’s net current liabilities were HK$2,484.1 million (2007: HK$1,980.0 million), of which HK$2,140.0 million were revolving bank loans with no fixed term of repayment. Subsequent to the balance sheet date, all the revolving bank loans due for periodic review by banks have been renewed, and a total of HK$800 million revolving and short-term loans was renewed. In addition, a total of HK$270 million short-term bank loans was paid off on due dates. The Directors consider that the remaining revolving bank loans can be renewed on the strength of the Group’s earnings and business prospects so that the Group will have adequate sources of funding to finance its activities and manage its liquidity.

— 70 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The following table details the Group’s contractual maturity for its non-derivative financial liabilities as well as certain non-derivative financial assets. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. For non-derivative financial assets, the table reflects the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The table includes both interest and principal cash flows.

	Weighted
	average							Total
	effective	Less than		3 months				undiscounted	Carrying
	interest rate	3	months	to 1 year		1-2 years	2-3 years	cash flow	amount
	_% _	_HK$ million _		_HK$ _	_million _	_HK$ million _	HK$ million	_HK$ million _	HK$ million
At 31 December 2008
Bank deposits	1.46%		370.5		75.5	—	—	446.0	444.7
Trade and other
payables	—		(765.0)		(93.0)	(63.8)	—	(921.8)	(921.8)
Borrowings
— variable rate	3.31%		(951.6)	(2,598.1)		(357.0)	(757.4)	(4,664.1)	(4,517.5)
Convertible bonds
(fixed)	12.50%		—		(458.2)	—	—	(458.2)	(430.5)
		(1,346.1)		(3,073.8)		(420.8)	(757.4)	(5,598.1)	(5,425.1)
At 31 December 2007
Pledged fixed bank
deposits	3.72%		302.6		87.4	—	—	390.0	386.4
Trade and other
payables	—		(943.1)		(94.2)	(72.8)	—	(1,110.1)	(1,110.1)
Borrowings
— fixed rate	5.39%		(6.5)		(92.9)	—	—	(99.4)	(90.8)
— variable rate	4.44%	(1,569.8)		(1,481.1)		(908.4)	(252.2)	(4,211.5)	(4,068.7)
Convertible bonds
(fixed)	12.50%		—		—	(470.0)	—	(470.0)	(392.0)
		(2,216.8)		(1,580.8)		(1,451.2)	(252.2)	(5,501.0)	(5,275.2)

— 71 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

(e) Fair value of financial instruments

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

The fair value of financial assets and financial liabilities (including derivative instruments) with standard terms and conditions and traded on active liquid markets is determined with reference to quoted market prices.
The fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accordance with generally accepted pricing models based on discounted cash flow analysis or using prices from observable current market transactions.
The fair value of derivative instruments, is calculated using quoted market prices. Where such prices are not available, fair value is estimated using discounted cash flow analysis based on the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.

The Directors of the Company consider that the carrying amounts of the financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements approximate their fair values.

7. BUSINESS AND GEOGRAPHICAL SEGMENTS

Business segments

For management reporting purposes, the Group is currently organised into four operating divisions — construction and building maintenance, cement operations, property development and asset management and others. These divisions are the basis on which the Group reports its primary segment information.

Turnover represents the revenue arising on construction contracts and building maintenance, amounts received and receivable for goods sold by the Group to third party customers, less returns and allowances, revenue from property development projects, fees from asset management and rental and leasing income for the year.

— 72 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Segment information about these businesses is presented below.

Year ended 31 December 2008

Cement operations Construction and building maintenance Through LSOC# Other cement operations Property development HK$ million HK$ million HK$ million HK$ million TURNOVER External sales 2,728.9 — — — Inter-segment sales 5.8 — — — Group turnover 2,734.7 — — — Share of jointly controlled entities 7.0 2,104.5 474.3 — Share of associates — — — 1,088.5 Total 2,741.7 2,104.5 474.3 1,088.5 Inter-segment sales are charged at mutually agreed prices. # LSOC denotes Lafarge Shui On Cement Limited, a jointly controlled entity of the Group. RESULTS Segment results 82.6 7.8 (6.5) 10.6 Interest income 3.8 — 5.2 — Interest income from investment in convertible bonds — — — 24.0 Imputed interest income on loans to jointly controlled entities/associates — — — 53.2 Fair value changes on investment properties — — — — Fair value changes on embedded derivatives — — — (3.5) Dividend income from available-for-sale investments — — — 67.3 Convertible bonds issued by the Company — Fair value changes on embedded derivatives — — — — — Imputed interest expense — — — — Interest on bank loans and other borrowing costs — — — — Impairment loss recognised in respect of interests in jointly controlled entities — — (12.1) —	Asset management and others HK$ million 215.4 — 215.4 14.2 — 229.6 (7.0) 14.3 — — 26.6 — — 238.9 (48.5) (180.9) —	Total HK$ million 2,944.3 5.8 2,950.1 2,600.0 1,088.5 6,638.6 87.5 23.3 24.0 53.2 26.6 (3.5) 67.3 238.9 (48.5) (180.9) (12.1)	Eliminations HK$ million — (5.8) (5.8) — — (5.8)	Consolidated HK$ million 2,944.3 —
				2,944.3 2,600.0 1,088.5
				6,632.8
				87.5 23.3 24.0 53.2 26.6 (3.5) 67.3 238.9 (48.5) (180.9) (12.1)

— 73 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Cement operations Construction and building maintenance Through LSOC# Other cement operations Property development Asset management and others HK$ million HK$ million HK$ million HK$ million HK$ million Gain on disposal of available-for-sale investments — — — 496.4 — Loss on disposal of interests in a jointly controlled entity — — (6.4) — — Discount on deemed acquisition of interest in an associate — — — 84.7 — Fair value changes on financial assets carried at fair value through profit or loss — — — — 20.3 Impairment loss on available-for-sale investments — — — (558.3) — Share of results of jointly controlled entities Cement operations in — LSOC — 133.3 — — — — Guizhou — — 33.1 — — Venture capital investments — — — — (232.9) Greenfield development — — — 15.3 — Imputed interest expense — — — (22.6) — Others (3.3) — — — (1.0) Share of results of associates Distressed asset development — — — 108.1 — Greenfield development — — — 272.8 — Imputed interest expense — — — (30.6) — Profit (loss) before taxation 83.1 141.1 13.3 517.4 (170.2) Taxation Profit for the year	Total Eliminations HK$ million HK$ million 496.4 (6.4) 84.7 20.3 (558.3) 133.3 33.1 (232.9) 15.3 (22.6) (4.3) (78.1) 108.1 272.8 (30.6) 350.3 584.7 (15.6) 569.1	Consolidated HK$ million 496.4 (6.4) 84.7 20.3 (558.3) 133.3 33.1 (232.9) 15.3 (22.6) (4.3) (78.1) 108.1 272.8 (30.6) 350.3 584.7 (15.6) 569.1

— 74 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

CONSOLIDATED BALANCE SHEET

At 31 December 2008

		Cement operations	Cement operations
	Construction		Other			Asset
	and building	Through	cement		Property	management
	maintenance	LSOC	operations		development	and others	Eliminations	Consolidated
	HK$ million	HK$ million	HK$ million		HK$ million	HK$ million	HK$ million	HK$ million
ASSETS
Segment assets	956.7	—		35.0	10.5	926.8	—	1,929.0
Amounts due from
jointly controlled
entities and
associates	7.8	4.0	390.8		1,207.7	41.7	—	1,652.0
Interests in jointly
controlled entities
and associates	(14.1)	3,390.3	188.7		2,548.1	215.8	—	6,328.8
Inter-segment
receivables	800.1	—		35.7	150.5	6,488.8	(7,475.1)	—
Investment in
convertible bonds	—	—		—	206.9	—	—	206.9
Available-for-sale
investments	—	—		—	970.4	—	—	970.4
Assets classified as
held for sale	—	—	444.6		—	—	—	444.6
	1,750.5	3,394.3	1,094.8		5,094.1	7,673.1	(7,475.1)	11,531.7
Unallocated assets								0.1
Consolidated total
assets								11,531.8
LIABILITIES
Segment liabilities	920.6	—		4.1	—	76.7	—	1,001.4
Amounts due to
jointly controlled
entities and
associates	3.7	302.0		6.4	—	60.7	—	372.8
Inter-segment
payables	114.6	—	3,623.8		3,097.2	639.5	(7,475.1)	—
Liabilities associated
with assets
classified as held
for sale	—	—		62.6	—	—	—	62.6
	1,038.9	302.0	3,696.9		3,097.2	776.9	(7,475.1)	1,436.8
Unallocated
liabilities								5,045.0
Consolidated total
liabilities								6,481.8

— 75 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

OTHER INFORMATION

Year ended 31 December 2008

		Cement operations	Cement operations
	Construction		Other		Asset
	and building	Through	cement	Property	management
	maintenance	LSOC	operations	development	and others	Consolidated
	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
Capital expenditure	2.0	—	18.2	—	10.8	31.0
Depreciation and amortisation
expenses	3.4	—	0.3	—	4.2	7.9
Share-based payment expense	8.2	—	0.6	—	31.1	39.9
Net loss on disposal of property,
plant and equipment	—	—	—	—	2.0	2.0

Year ended 31 December 2007

		Cement operations	Cement operations	Cement operations
	Construction			Other			Asset
	and building	Through		cement	Property	management
	maintenance	LSOC	operations		development	and others		Total	Eliminations	Consolidated
	HK$ million	HK$ million	HK$ million		HK$ million	HK$ million		HK$ million	HK$ million	HK$ million
TURNOVER
External sales	2,733.1	—		—	—		77.4	2,810.5	—	2,810.5
Inter-segment sales	1.3	—		—	—		—	1.3	(1.3)	—
Group turnover	2,734.4	—		—	—		77.4	2,811.8	(1.3)	2,810.5
Share of jointly
controlled entities	9.2	1,669.3		385.9	—		7.2	2,071.6	—	2,071.6
Share of associates	—	—		—	198.6		—	198.6	—	198.6
Total	2,743.6	1,669.3		385.9	198.6		84.6	5,082.0	(1.3)	5,080.7

Inter-segment sales are charged at mutually agreed prices.

— 76 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		Cement operations	Cement operations
	Construction		Other			Asset
	and building	Through	cement		Property	management
	maintenance	LSOC	operations		development	and others	Total	Eliminations	Consolidated
	HK$ million	HK$ million	HK$ million		HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
RESULTS
Segment results	55.3	7.8		(18.9)	(4.3)	(112.6)	(72.7)		(72.7)
Interest income	3.6	—		8.5	0.1	5.9	18.1		18.1
Interest income from
investment in
convertible bonds	—	—		—	12.4	—	12.4		12.4
Fair value changes on
investment
properties	—	—		—	—	25.2	25.2		25.2
Fair value changes on
embedded
derivatives	—	—		—	(15.5)	—	(15.5)		(15.5)
Dividend income from
available-for-sale
investments	—	—		—	71.1	—	71.1		71.1
Convertible bonds
issued by the
Company
— Fair value
changes on
embedded
derivatives	—	—		—	—	(326.6)	(326.6)		(326.6)
— Imputed interest
expense	—	—		—	—	(78.5)	(78.5)		(78.5)
Interest on bank loans
and other
borrowing costs	—	—		—	—	(208.6)	(208.6)		(208.6)
Impairment loss
recognised in
respect of interests
in jointly
controlled entities	—	—		(85.8)	—	—	(85.8)		(85.8)
Gain on disposal of
available-for-sale
investments	—	—		—	928.7	—	928.7		928.7
Gain on disposals of
interests in jointly
controlled entities	—	—		—	110.5	—	110.5		110.5
Loss on deemed
disposal of interest
in an associate	—	—		—	(21.5)	—	(21.5)		(21.5)

— 77 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		Cement operations	Cement operations
	Construction		Other				Asset
	and building	Through	cement		Property	management
	maintenance	LSOC	operations		development	and others		Total	Eliminations	Consolidated
	HK$ million	HK$ million	HK$ million		HK$ million	HK$ million		HK$ million	HK$ million		HK$ million
Share of results of
jointly controlled
entities
Cement operations	in
— LSOC	—	86.6		—	—		—	86.6			86.6
— Guizhou	—	—		18.9	—		—	18.9			18.9
Venture capital
investments	—	—		—	—		77.6	77.6			77.6
Distressed asset
development	—	—		—	187.0		—	187.0			187.0
Others	(4.4)	—		(0.6)	1.8		0.2	(3.0)			(3.0)
								367.1			367.1
Share of impairment
loss of jointly
controlled entities	—	(34.4)		—	—		—	(34.4)			(34.4)
Share of results of
associates	—	—		—	26.1		—	26.1			26.1
Profit (loss) before
taxation	54.5	60.0		(77.9)	1,296.4		(617.4)	715.6			715.6
Taxation								(11.3)			(11.3)
Profit for the year								704.3			704.3

— 78 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

CONSOLIDATED BALANCE SHEET

At 31 December 2007

		Cement operations	Cement operations
	Construction		Other		Asset
	and building	Through	cement	Property	management
	maintenance	LSOC	operations	development	and others	Eliminations	Consolidated
	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
ASSETS
Segment assets	741.9	—	127.0	0.3	650.7	—	1,519.9
Amounts due from
jointly controlled
entities and
associates	9.6	88.1	498.7	490.6	583.0	—	1,670.0
Interests in jointly
controlled entities
and associates	(11.2)	2,420.6	244.6	1,845.3	512.6	—	5,011.9
Inter-segment
receivables	908.9	—	(80.2)	—	2,910.0	(3,738.7)	—
Investment in
convertible bonds	—	—	—	190.3	—	—	190.3
Available-for-sale
investments	—	—	—	4,789.1	—	—	4,789.1
	1,649.2	2,508.7	790.1	7,315.6	4,656.3	(3,738.7)	13,181.2
Unallocated assets							118.5
Consolidated total
assets							13,299.7
LIABILITIES
Segment liabilities	823.8	—	7.4	—	56.7	—	887.9
Amounts due to
jointly controlled
entities and
associates	1.2	—	17.5	—	288.5	—	307.2
Inter-segment
payables	117.7	—	3,121.4	—	499.6	(3,738.7)	—
	942.7	—	3,146.3	—	844.8	(3,738.7)	1,195.1
Unallocated
liabilities							4,809.3
Consolidated total
liabilities							6,004.4

— 79 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

OTHER INFORMATION

Year ended 31 December 2007

		Cement operations	Cement operations
	Construction		Other		Asset
	and building	Through	cement	Property	management
	maintenance	LSOC	operations	development	and others	Consolidated
	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
Capital expenditure	3.1	—	0.1	—	6.0	9.2
Depreciation and amortisation
expenses	3.6	—	0.4	—	3.8	7.8
Impairment loss on other
receivables	—	—	12.2	—	—	12.2
Share-based payment expense	—	—	—	—	31.1	31.1
Net loss on disposal of property,
plant and equipment	3.2	—	3.2	—	—	6.4

Geographical segments

The Group’s operations are located in Hong Kong and other regions in the PRC.

An analysis of the Group’s turnover by geographical markets, irrespective of the origin of the goods/services, is as follows:

						Year	ended 31 December 2008	ended 31 December 2008		Year	ended 31 December 2007	ended 31 December 2007
							Share of				Share of
							jointly				jointly
							controlled				controlled
							entities/				entities/
					The	Group	associates	Total	The Group		associates	Total
					_HK$ _	million	HK$ million	HK$ million	HK$ million		HK$ million	HK$ million
Hong	Kong					1,918.2	7.0	1,925.2		1,995.9	9.2	2,005.1
Other	regions	in	the	PRC		1,026.1	3,681.5	4,707.6		814.6	2,261.0	3,075.6
						2,944.3	3,688.5	6,632.8		2,810.5	2,270.2	5,080.7

— 80 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The following is an analysis of the carrying amount of segment assets and total assets, and additions to investment properties and property, plant and equipment analysed by the geographical areas in which the assets are located:

								Additions to investment	Additions to investment	Additions to investment
		Carrying amount		of	Carrying	amount of		properties and property,
		segment assets			total	assets		plant	and	equipment
		2008		2007	2008		2007	2008		2007
		HK$ million _HK$ _	million		HK$ million	_HK$ _	million	HK$ million		HK$ million
	Hong Kong	1,070.5		868.1	1,111.4		1,030.8		1.2	3.6
	Other regions in the PRC	858.5		651.8	10,420.4	12,268.9		29.8		5.6
		1,929.0	1,519.9		11,531.8	13,299.7		31.0		9.2
8.	OTHER INCOME
								2008		2007
							_HK$ _	million		HK$ million
	Included in other income are:
	Interest income							23.3		18.1
	Interest income from investment in convertible bonds							24.0		12.4
	Imputed interest income on loans to jointly controlled entities/associates							53.2		—
9.	FAIR VALUE CHANGES ON	EMBEDDED DERIVATIVES
								2008		2007
							_HK$ _	million		HK$ million
	Changes in fair values of embedded derivatives in:
	— Convertible bonds issued	by an associate (note		22)				(3.5)		(15.5)
	— Convertible bonds issued	by the Company (note 33)						238.9		(326.6)
	Net gain (loss) recognised							235.4		(342.1)

— 81 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

10. FINANCE COSTS

	2008	2007
	HK$ million	HK$ million
Interest on bank loans and overdrafts and other loans
wholly repayable within 5 years	164.9	200.2
Other borrowing costs	16.0	8.4
	180.9	208.6
Imputed interest expense on convertible bonds
issued by the Company (note 33)	48.5	78.5
	229.4	287.1
TAXATION
	2008	2007
	HK$ million	HK$ million
The charge comprises:
Current taxation
Hong Kong Profits Tax	10.5	6.2
Income tax of other regions in the PRC	5.2	4.9
	15.7	11.1
Deferred taxation (note 36)	(0.1)	0.2
	15.6	11.3

11. TAXATION

On 26 June 2008, the Hong Kong Legislative Council passed the Revenue Bill 2008, which reduced corporate profits tax rate from 17.5% to 16.5% effective from the year of assessment 2008/2009. Therefore, Hong Kong Profits Tax is calculated at 16.5% (2007: 17.5%) on the estimated assessable profit for the year.

Profits tax outside Hong Kong is calculated at the rates prevailing in the respective jurisdictions.

On 16 March 2007, the PRC promulgated the Law of the PRC on Enterprise Income Tax (the “New Law”) by Order No. 63 of the President of the PRC. On 6 December 2007, the State Council of the PRC issued Implementation Regulations of the New Law. The New Law and Implementation Regulations changed the tax rate from 33% to 25% for certain subsidiaries, jointly controlled entities and associates from 1 January 2008.

Despite the reduction in tax rates in 2008, the increase in tax charge for the year, as compared with the previous year, was mainly due to increased assessable profits from the various businesses of the Group in 2008, whereas the gains on disposal of available-for-sale investment in both 2008 and 2007 were not taxable.

Details of the deferred taxation are set out in note 36.

— 82 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The tax charge for the year can be reconciled to the profit before taxation per the consolidated income statement as follows:

	2008	2007
	HK$ million	HK$ million
Profit before taxation	584.7	715.6
Tax at Hong Kong Profits Tax rate of 16.5% (2007: 17.5%)	96.5	125.2
Effect of share of results of jointly controlled entities	12.9	(58.2)
Effect of share of results of associates	(57.8)	(4.6)
Effect of different tax rates on operations in other jurisdictions	0.1	(1.5)
Tax effect of expenses not deductible for tax purposes	128.0	129.4
Tax effect of income not taxable for tax purposes	(162.3)	(201.5)
Tax effect of tax losses not recognised	3.0	23.0
Tax effect of utilisation of tax losses previously not recognised	(3.9)	(0.9)
Decrease in opening deferred taxation liabilities from a decrease in applicable
tax rate	(0.1)	—
Others	(0.8)	0.4
Tax charge for the year	15.6	11.3

— 83 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

12. DIRECTORS’ EMOLUMENTS AND FIVE HIGHEST PAID EMPLOYEES

Directors

The emoluments paid or payable to each of the ten (2007: eleven) Directors were as follows:

Fees HK$’000 10 10 10 10 10 350 440 350 120 144 — —	Salaries and other benefits HK$’000 — 3,440 5,548 3,022 2,155 — — — — — — —	Salaries and other benefits HK$’000 — 3,440 5,548 3,022 2,155 — — — — — — —	Salaries and other benefits HK$’000 — 3,440 5,548 3,022 2,155 — — — — — — —	Share based payments HK$’000 — 2,483 6,468 658 2,090 — — — — — — —	2008 Total HK$’000 10 7,966 19,042 4,197 5,559 350 440 350 120 144 — —	2007 Total HK$’000 10 6,931 18,125 759 4,675 275 350 102 — 275 137 3,524
1,454	14,165	10,561	299	11,699	38,178	35,163

Notes:

(a) Ms. Lau Jeny was appointed as an Executive Director on 2 October 2007.
(b) Non-executive Director.
(c) Independent Non-executive Directors.
(d) Mr. Gerrit de Nys was appointed as an Independent Non-executive Director on 18 August 2007.
(e) Ms. Li Hoi Lun, Helen was appointed as an Independent Non-executive Director on 28 August 2008.
(f) Mr. Cheng Mo Chi, Moses retired as an Independent Non-executive Director on 29 May 2008.

— 84 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

(g) Professor K. C. Chan resigned as an Independent Non-executive Director on 1 July 2007.
(h) Mr. Wong Fook Lam, Raymond resigned as an Executive Director on 14 June 2007.

Of the five individuals with the highest emoluments in the Group, two (2007: two) are Executive Directors of the Company whose emoluments are set out above. The emolument of the remaining three (2007: three) individuals was as follows:

	2008	2007
	HK$ million	HK$ million
Salaries, bonuses and allowances	13.4	11.8
Retirement benefits scheme contributions	0.3	0.3
Share based payments	6.9	6.1
	20.6	18.2
Their emoluments were within the following bands:
	2008	2007
	No. of employees	No. of employees
HK$4,500,001 to HK$5,000,000	—	1
HK$5,500,001 to HK$6,000,000	—	1
HK$6,000,001 to HK$6,500,000	2	—
HK$7,500,001 to HK$8,000,000	1	1
	3	3

— 85 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

13. PROFIT FOR THE YEAR

	2008	2007
	HK$ million	HK$ million
Profit for the year has been arrived at after charging (crediting):
Depreciation and amortisation:
Prepaid lease payments	1.0	0.9
Property, plant and equipment	6.9	6.9
	7.9	7.8
Auditors’ remuneration	3.5	4.3
Operating lease payments in respect of rented premises	7.7	6.4
Net loss on disposal of property, plant and equipment	2.0	6.4
Impairment loss on other receivables (included in subcontracting, external
labour costs and other expenses)	—	12.2
Loss on disposal of financial assets carried at fair value through profit or loss	—	0.1
Staff costs (including directors’ emoluments):
Salaries, bonuses and allowances	381.4	318.4
Retirement benefits cost	(4.3)	(3.3)
Share-based payment expense	39.9	31.1
	417.0	346.2
Gross rental revenue from an investment property and car park spaces	(0.3)	(1.4)
Less: Direct expenses from investment properties that generated rental income	0.5	0.6
Net rental expense (income)	0.2	(0.8)
Share of tax of jointly controlled entities (included in share of results of
jointly controlled entities)	2.6	25.0
Share of tax of associates (included in share of results of associates)	134.9	19.2

— 86 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

14. DIVIDENDS

	2008	2007
	HK$ million	HK$ million
Paid:
Final dividend in respect of the year ended 31 December 2007: HK$0.65
per share (2007: HK$0.52 per share for the nine months ended 31
December 2006)	209.1	150.9
Interim dividend in respect of the year ended 31 December 2008:
HK$0.20 per share (2007: HK$0.15 per share)	64.4	47.1
	273.5	198.0
Proposed:
Final dividend in respect of the year ended 31 December 2007:
HK$0.65 per share	—	209.1

The Directors do not recommend the payment of a final dividend for the year ended 31 December 2008.

— 87 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

15. EARNINGS PER SHARE

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

	2008	2007
	HK$ million	HK$ million
Earnings:
Earnings for the purpose of basic earnings per share	562.4	702.0
Effect of dilutive potential ordinary shares from
convertible bonds issued by the Company:
Imputed interest expense	48.5	—
Fair value changes on embedded derivatives	(238.9)	—
Effect of dilutive potential ordinary shares of an associate:
Interest income on convertible bonds	—	(12.4)
Fair value changes on embedded derivatives of convertible bonds	—	15.5
Adjustment to the share of results of an associate based on dilution of its
earnings per share	—	(8.2)
Earnings for the purpose of diluted earnings per share	372.0	696.9
Number of shares:	Million	Million
Weighted average number of ordinary shares for the purpose of basic earnings
per share	321.7	299.8
Effect of dilutive potential ordinary shares:
Convertible bonds issued by the Company	22.5	—
Share options	1.2	4.5
Weighted average number of ordinary shares for the purpose of diluted
earnings per share	345.4	304.3
Earnings per share	HK$	HK$
Basic	1.75	2.34
Diluted	1.08	2.29

The dilutive effect on the Group’s earnings and number of ordinary shares arising from the convertible bonds issued by the Company and the convertible bonds issued by an associate held by the Group have to be accounted for in the calculation of diluted earnings per share. These convertible bonds are assumed to be converted into shares of the relevant issuer at the beginning of the year or, if later, the date of issue and, in particular, the accounting effects of such financial instruments are reversed in the determination of diluted earnings if their conversion has a dilutive effect on the earnings per share.

The computation of diluted earnings per share for the year ended 31 December 2008 does not assume the conversion of outstanding convertible bonds issued by an associate, since their conversion would result in an increase in earnings per share for the current year.

— 88 —

APPENDIX II FINANCIAL INFORMATION ON THE SOCAM GROUP

The computation of diluted earnings per share for the year ended 31 December 2007 did not assume the conversion of outstanding convertible bonds issued by the Company, since their conversion would result in an increase in earnings per share for that year.

16. INVESTMENT PROPERTIES

	2008	2007
	HK$ million	HK$ million
FAIR VALUE
At the beginning of the year	92.9	63.2
Exchange adjustments	5.9	4.5
Additions	0.1	—
Increase in fair value recognised	26.6	25.2
Transfer to properties under development for sale	(125.5)	—
At the end of the year	—	92.9

During the year ended 31 December 2008, the Group decided the properties previously held as investment properties be redeveloped as properties for sale in the future. Accordingly, the property interests were reclassified to properties under development for sale and their fair value at the date of change in use, based on the auction price at that date, was regarded as their deemed initial cost.

The carrying value of the investment properties at 31 December 2007 was measured using the fair value model and represented properties situated in the PRC under medium-term leases. The fair value at 31 December 2007 was arrived at based on a valuation carried out by Chongqing Ruisheng Real Estate Appraisal Co., Ltd., an independent professionally qualified valuer not connected with the Group that has recent experience in the valuation of similar properties in the relevant locations.

— 89 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

17. PROPERTY, PLANT AND EQUIPMENT

		Properties in
Properties in		other regions
Hong Kong		of the PRC
located on		located on
land held		land held			Equipment,
	under	under			furniture
medium-		medium-	Plant and	Motor	and other
term leases		term leases	machinery	vehicles	assets	Total
_HK$ _	million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
AT COST
At 1 January 2007	3.4	8.1	57.4	17.3	39.3	125.5
Exchange adjustments	—	0.6	0.8	0.3	0.2	1.9
Additions	—	—	0.1	4.9	4.2	9.2
Disposals	—	(6.3)	(8.0)	(3.5)	(0.8)	(18.6)
At 31 December 2007	3.4	2.4	50.3	19.0	42.9	118.0
Exchange adjustments	—	0.2	0.3	0.2	0.3	1.0
Additions	—	—	18.8	1.5	10.6	30.9
Disposals	—	—	(1.6)	(1.6)	(3.5)	(6.7)
Reclassified as held for sale	—	—	(18.0)	—	(0.1)	(18.1)
At 31 December 2008	3.4	2.6	49.8	19.1	50.2	125.1
ACCUMULATED DEPRECIATION
AND IMPAIRMENT
At 1 January 2007	1.2	3.5	50.5	10.8	30.1	96.1
Exchange adjustments	—	0.1	0.5	0.2	0.1	0.9
Charge for the year	0.1	0.5	0.7	2.2	3.4	6.9
Eliminated on disposals	—	(3.6)	(3.7)	(2.6)	(0.5)	(10.4)
At 31 December 2007	1.3	0.5	48.0	10.6	33.1	93.5
Exchange adjustments	—	—	0.3	—	0.1	0.4
Charge for the year	—	0.3	0.2	2.6	3.8	6.9
Eliminated on disposals	—	—	(1.5)	(1.3)	(1.7)	(4.5)
At 31 December 2008	1.3	0.8	47.0	11.9	35.3	96.3
CARRYING VALUES
At 31 December 2008	2.1	1.8	2.8	7.2	14.9	28.8
At 31 December 2007	2.1	1.9	2.3	8.4	9.8	24.5

— 90 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

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

annum:

Properties in Hong Kong and other regions of the PRC 2.5% or remaining lease term, if shorter located on land held under medium-term leases Plant and machinery 10 — 25% Motor vehicles, equipment, furniture and other assets 20 — 33%

18. PREPAID LEASE PAYMENTS

	2008	2007
	HK$ million	HK$ million
Leasehold land under medium-term lease:
In Hong Kong	3.1	3.2
Outside Hong Kong	41.8	40.3
	44.9	43.5
Analysed for reporting purposes as:
Non-current	43.9	42.6
Current	1.0	0.9
	44.9	43.5

Amortisation of prepaid lease payments amounting to HK$1.0 million (2007: HK$0.9 million) was charged to the consolidated income statement.

19. INTERESTS IN JOINTLY CONTROLLED ENTITIES

	2008	2007
	HK$ million	HK$ million
Cost of unlisted investments in jointly controlled entities, net of impairment
of HK$12.1 million (2007: HK$85.8 million)	3,617.9	2,900.4
Share of post-acquisition profits and reserves	363.4	274.6
Reclassified as assets held for sale (note 29)	(78.2)	—
	3,903.1	3,175.0

Note: Goodwill of HK$121.8 million (2007: HK$121.8 million) is included in the cost of unlisted investments in jointly controlled entities. The goodwill arose from the contribution to a jointly controlled entity, Lafarge Shui On Cement Limited (“LSOC”), during the year ended 31 March 2006. The entire carrying amount of the Group’s interest in LSOC, including the goodwill, is reviewed for impairment at each balance sheet date. No impairment is noted at either balance sheet date.

Particulars of the principal jointly controlled entities are set out in note 47.

— 91 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The summarised financial information in respect of the Group’s share of interest in assets, liabilities, income and expenses of jointly controlled entities for the years ended 31 December 2008 and 31 December 2007 attributable to the Group is as follows:

	2008	2007
	HK$ million	HK$ million
Current assets	3,054.7	2,438.6
Non-current assets	7,958.3	6,083.5
Current liabilities	(5,486.8)	(3,874.0)
Non-current liabilities	(949.9)	(1,032.5)
Minority interests	(747.2)	(587.5)
Income	3,992.8	3,174.2
Expenses	(4,070.9)	(2,841.5)

The summary of aggregate financial information of the Group’s significant jointly controlled entities engaged in the manufacture and sale of cement in Guizhou, Nanjing and LSOC, based on the adjusted financial statements prepared under the HKFRSs for the years ended 31 December 2008 and 31 December 2007, is as follows:

	2008	2007
	HK$ million	HK$ million
Results for the year ended 31 December
Turnover	6,860.0	5,351.7
Profit before taxation	321.8	158.7
Profit before taxation attributable to the Group	169.1	87.2

— 92 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

	2008	2007
	HK$ million	HK$ million
Financial position at 31 December
Non-current assets	15,161.7	11,939.6
Current assets	6,177.3	4,484.3
Current liabilities	(9,650.7)	(7,632.8)
Non-current liabilities	(2,008.8)	(1,838.7)
Minority interests	(1,572.4)	(1,183.7)
Net assets	8,107.1	5,768.7
Net assets attributable to the Group	3,655.8	2,658.6
Reclassified as assets held for sale (note 29)	(78.2)	—
	3,577.6	2,658.6

The Group provided HK$12.1 million (2007: HK$85.8 million) impairment loss in respect of its investment in the cement operations in Guizhou and Nanjing, to write down the Group’s interests in these jointly controlled entities to their estimated recoverable amount at 31 December 2008.

The summary of aggregate financial information of the Group’s significant jointly controlled entities engaged in venture capital investments, based on the adjusted financial statements prepared under HKFRSs for the years ended 31 December 2008 and 31 December 2007, is as follows:

	2008	2007
	HK$ million	HK$ million
Results for the year ended 31 December
Turnover	—	—
(Loss) profit before taxation	(319.5)	106.7
(Loss) profit before taxation attributable to the Group	(232.9)	77.6

— 93 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

	2008	2007
	HK$ million	HK$ million
Financial position at 31 December
Non-current assets	500.8	891.3
Current assets	71.0	148.5
Current liabilities	(55.5)	(110.9)
Non-current liabilities	(100.0)	(100.0)
Minority interests	(70.5)	(82.4)
Net assets	345.8	746.5
Net assets attributable to the Group	226.3	523.3

The Group has discontinued recognition of its share of loss of a jointly controlled entity in Nanjing because the Group’s share of losses of this jointly controlled entity in previous years has exceeded its investment cost. The amounts of the unrecognised share of losses of the jointly controlled entity, both for the year and cumulatively, are as follows:

		2008	2007
		HK$ million	HK$ million
	Unrecognised share of losses of the jointly controlled entity for the year	(6.6)	(6.5)
	Accumulated unrecognised share of losses of the jointly controlled entity	(25.1)	(18.5)
20.	AVAILABLE-FOR-SALE INVESTMENTS
		2008	2007
		HK$ million	HK$ million
	Available-for-sale investments comprise:
	Listed equity securities in Hong Kong (at market price)	970.4	4,789.1

Available-for-sale investments at 31 December 2008 and 31 December 2007 represent the Group’s equity interest in Shui On Land Limited (“SOL”), a fellow subsidiary of the Company.

During the year, the Group disposed of HK$1.0 billion (2007: HK$1.8 billion) worth of SOL shares to a wholly-owned subsidiary of SOCL, representing approximately 3.11% (2007: 5.27%) equity interest in SOL. As a result, the Group recognised a gain on disposal of HK$496.4 million (2007: HK$928.7 million) in the consolidated income statement for the year ended 31 December 2008. At 31 December 2008, the Group holds a 9.46% (2007: 12.57%) equity interest in SOL.

— 94 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

21. INTERESTS IN ASSOCIATES

	2008	2007
	HK$ million	HK$ million
Cost of investments in associates
Listed outside Hong Kong	1,770.1	1,770.1
Unlisted	34.2	17.1
Share of post-acquisition profits and reserves	541.0	49.7
Discount on deemed acquisition of interest in an associate	84.7	—
	2,430.0	1,836.9
Fair value of listed investments	378.5	1,325.0

During the year ended 31 December 2008, China Central Properties Limited (“CCP”), an associate of the Group, re-purchased and cancelled certain of its ordinary shares. As a result, the Group’s interest in CCP increased to 42.88% (2007: 40.38%), and the Group recognised a discount on deemed acquisition of interest in an associate of HK$84.7 million in the consolidated income statement for the year ended 31 December 2008.

Particulars of the principal associates are set out in note 48.

A summary of the financial information of the Group’s associates is as follows:

	2008	2007
	HK$ million	HK$ million
Results for the year ended 31 December
Turnover	2,538.5	491.8
Profit for the year	956.4	67.2
Profit for the year attributable to the Group	350.3	26.1
	2008	2007
	HK$ million	HK$ million
Financial position at 31 December
Total assets	14,391.5	11,104.6
Total liabilities	(7,432.2)	(6,076.7)
Minority interests	(810.9)	(283.6)
Net assets	6,148.4	4,744.3
Net assets attributable to the Group	2,430.0	1,836.9

— 95 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

22. INVESTMENT IN CONVERTIBLE BONDS

On 13 June 2007, the Group subscribed for US$25 million 2% convertible bonds due 2012 of CCP, an associate of the Group, upon the listing of CCP’s shares on the AIM Board of the London Stock Exchange plc (the “Listing”). The effective interest rate of the straight debt component is 13.8% per annum.

The investment in convertible bonds of CCP has been split between a straight debt component and embedded derivatives. The Group engaged independent valuers to assess the fair value of the embedded derivatives, which were determined in accordance with the Binomial Model. The major inputs to the model at the balance sheet date were as follows:

	2008	2007
Share price of CCP	£0.280	£0.705
Risk-free rate of interest	3.322% p.a.	4.602% p.a.
Dividend yield	2.75% p.a.	0% p.a.
Volatility	55%	50%

The movement of the convertible bonds for the year is as follows:

	Straight	Embedded
	debt	derivatives
	HK$ million	HK$ million
Convertible bonds subscribed on 13 June 2007	163.6	31.7
Interest income recognised during the year	12.4	—
Interest received during the year	(1.9)	—
Changes in fair value (note 9)	—	(15.5)
At 31 December 2007	174.1	16.2
Interest income recognised during the year	24.0	—
Interest received during the year	(3.9)	—
Changes in fair value (note 9)	—	(3.5)
At 31 December 2008	194.2	12.7

The principal terms of the convertible bonds issued by CCP include the following:

Conversion

Bondholders have the right to convert their convertible bonds (or any of them) into shares of CCP at any time during the period beginning on (and including) the date falling 41 days after 13 June 2007 (the “Issue Date”) and ending on (and including) the date falling 7 days prior to 13 June 2012 (the “Maturity Date”) at a conversion price of £1.34 per share. The conversion price is subject to adjustment in certain events.

— 96 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Redemption

Unless previously redeemed, converted or purchased and cancelled, the convertible bonds will be redeemed at the greater of (a) the current market price of shares into which such convertible bonds could be converted (assuming that all convertible bonds were converted at the Maturity Date) and (b) the redemption price at 146.62% of their principal amount, together with accrued interest on the Maturity Date.

Redemption at the option of the bondholders

A bondholder has the right to require CCP to redeem all or some only of such holder’s convertible bonds on the third anniversary of the Issue Date (the “Non-QPO Put Option Date”) at 123.51% of the principal amount of such convertible bond at the relevant date fixed for redemption together with accrued interest to the date fixed for redemption if the listing date (the date of a qualifying public offering (QPO) at the stock exchange in Hong Kong or Singapore or such other stock exchange as approved by the bondholders) has not occurred prior to the Non-QPO Put Option Date.

Redemption at the option of CCP

CCP may at any time on or prior to the date falling on the first anniversary of the date on which the shares are listed on a qualified stock exchange, redeem all, or some only of the convertible bonds at their early redemption amount (as defined in the Admission Document of CCP) together with interest accrued to the date fixed for redemption if the mid-market closing price for the shares (as derived from the daily quotation sheet of a qualified stock exchange) translated into USD at the prevailing rate for the relevant day, for each of 20 consecutive trading days, the last of which occurs not more than 30 days prior to the date upon which notice of such redemption is published was at least 130% of the early redemption amount divided by the prevailing conversion ratio. CCP may also at any time redeem all, but not some only, of the convertible bonds at their early redemption amount together with interest accrued to the date fixed for redemption if 90% in principal amount of the convertible bonds originally issued has already been converted, redeemed or purchased and cancelled.

23. AMOUNTS DUE FROM/TO JOINTLY CONTROLLED ENTITIES

	2008	2007
	HK$ million	HK$ million
Amounts due from jointly controlled entities
Non-current (note a)	553.8	188.8
Current (note b)	481.3	860.8
	1,035.1	1,049.6
Amounts due to jointly controlled entities (note c)	344.7	12.4
Notes:

(a) The balance is unsecured, interest-free and with no fixed terms of repayment. The amount is carried at amortised cost using the effective interest rate of 4.8% to 5.4% (2007: 3.5%) per annum.
(b) The balances are unsecured and repayable on demand. Out of the total balance, a total of HK$158.4 million (2007: HK$149.3 million) bears interest at prevailing market rates. The remaining balance is interest-free.
(c) The balances are unsecured, interest-free and repayable on demand.

— 97 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

24. INVENTORIES AND CONTRACTS IN PROGRESS

	2008	2007
	HK$ million	HK$ million
Inventories
Raw materials	2.0	2.7
Work-in-progress	6.0	3.9
Finished goods	2.4	2.2
Spare parts	2.4	2.5
	12.8	11.3
	2008	2007
	HK$ million	HK$ million
Contracts in progress
Costs incurred to date	5,365.1	5,066.6
Recognised profits less recognised losses	162.1	127.4
	5,527.2	5,194.0
Less: Progress billings	(5,440.2)	(5,117.1)
Net contract work	87.0	76.9
Represented by:
Amounts due from customers for contract work	219.1	161.9
Amounts due to customers for contract work	(132.1)	(85.0)
	87.0	76.9
AMOUNTS DUE FROM/TO ASSOCIATES
	2008	2007
	HK$ million	HK$ million
Amounts due from associates
Non-current (note a)	567.9	490.6
Current (note b)	49.0	129.8
	616.9	620.4
Amounts due to associates (note c)	28.1	294.8

25. AMOUNTS DUE FROM/TO ASSOCIATES

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Notes:

(a) The balances represent advances to an associate for financing the development of Dalian Tiandi•Software Hub. Pursuant to the joint venture agreement, the advances are unsecured, interest-free and with no fixed terms of repayment until the independent co-investor of the project has contributed its portion. Thereafter, the advances will bear interest at a rate of 10% per annum, subject to the joint venture shareholders’ approval. The amounts are carried at amortised cost using the effective interest rate of 4.8% (2007: 3.5%) per annum.
(b) The balances at 31 December 2008 are unsecured, interest-free and repayable on demand. Out of the total balance at 31 December 2007, an amount of RMB80 million (HK$85.4 million) bore interest at prevailing market rate, the remaining balances are interest-free.
(c) The balances are unsecured, interest-free and repayable on demand.

26. OTHER FINANCIAL ASSETS

Debtors, deposits and prepayments

	2008	2007
	HK$ million	HK$ million
Trade debtors	365.2	281.2
Less: Allowance for doubtful debts	(1.0)	(4.1)
	364.2	277.1
Retention receivable	116.5	107.7
Prepayments, deposits and other receivables	163.4	204.7
	644.1	589.5

The Group maintains a defined credit policy to assess the credit quality of each counterparty. Collections are closely monitored to minimise any credit risk associated with trade debtors. The general credit term ranges from 30 to 90 days.

— 99 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The following is an aged analysis of trade debtors net of allowance for doubtful debts at the balance sheet date:

	2008	2007
	HK$ million	HK$ million
Within 90 days	336.2	267.4
Amounts past due but not impaired:
91 days to 180 days	16.3	3.3
181 days to 360 days	2.5	2.0
Over 360 days (Note)	9.2	4.4
	28.0	9.7
	364.2	277.1
Retention receivable is analysed as follows:
Due within one year	74.2	82.1
Due after one year	42.3	25.6
	116.5	107.7

Note: The increase in overdue debts in 2008 was largely due to a building construction project in Hong Kong that had progress payments for contract works totaling HK$5.6 million overdue from the customer, pending the settlement of a contractual claim.

Movement in the allowance for doubtful debts

	2008	2007
	HK$ million	HK$ million
Balance at beginning of the year	4.1	4.4
Amounts written off as uncollectible	(3.0)	—
Amounts recovered during the year	(0.1)	(0.1)
Impairment losses reversed	—	(0.2)
	1.0	4.1

Bank balances, deposits and cash

Bank balances, deposits and cash comprise cash held by the Group and deposits with maturity of three months or less held with banks not restricted as to use. Bank balances carry interest at market rates, which range from 0.01% to 3.50% (2007: 1.75% to 3.33%) per annum.

— 100 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

27. PLEDGED BANK DEPOSITS

	Effective
	interest rate	2008	2007
	% per annum	HK$ million	HK$ million
In relation to:
Short term bank loan granted to the Group	—	—	86.4
Standby documentary credit issued relating to a bank loan
granted to an associate	2.1%	76.0	300.0
		76.0	386.4
AMOUNTS DUE FROM/TO RELATED COMPANIES
		2008	2007
		HK$ million	HK$ million
Amounts due from related companies		46.5	1.9
Amounts due to related companies		1.8	0.4

28. AMOUNTS DUE FROM/TO RELATED COMPANIES

The related companies are subsidiaries of SOCL.

The balances are unsecured, interest-free and repayable on demand.

— 101 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

29. ASSETS CLASSIFIED AS HELD FOR SALE/LIABILITIES ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE

In 2008, the Group entered into sale and purchase agreements to dispose of certain jointly controlled entities and a subsidiary. The transactions pursuant to these agreements have not been completed at 31 December 2008. Accordingly, the assets and liabilities attributable to these companies have been treated as assets classified as held for sale and liabilities associated with assets classified as held for sale, and are presented separately in the consolidated balance sheet.

	2008
	HK$ million
Disposal of jointly controlled entities (notes a and b), comprising
Interests in jointly controlled entities	78.2
Amounts due from jointly controlled entities	111.0
	189.2
Disposal of a subsidiary (note c)
Property, plant and equipment	18.1
Debtors, deposits and prepayments	235.2
Bank balances, deposits and cash	2.1
	255.4
Total assets classified as held for sale	444.6
Disposal of a subsidiary (note c)
Amounts due to a jointly controlled entity	(62.6)
Liabilities associated with assets classified as held for sale	(62.6)

Notes:

(a) On 5 May 2008, the Group entered into a sale and purchase agreement with LSOC to dispose of the Group’s equity interest in and the related shareholders loans to certain jointly controlled entities, which operate a cement plant and a concrete plant in Guizhou for a total consideration of approximately HK$195 million. Completion of the disposal is subject to certain conditions as stipulated in the sale and purchase agreement. Details of the transaction are set out in an announcement and a circular of the Company dated 6 May 2008 and 26 May 2008 respectively.
(b) On 5 November 2008, the Group entered into a sale and purchase agreement with an independent third party to dispose of the Group’s equity interest in and the related shareholders loan to a jointly controlled entity, which operates a cement grinding plant in Guizhou for a total consideration of approximately HK$19 million. The transaction was completed on 24 February 2009, resulting in an insignificant gain or loss on disposal.

— 102 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

(c) On 5 May 2008, the Group entered into a sale and purchase agreement with LSOC to dispose of the Group’s equity interest in and the related shareholder loans to a subsidiary, which will operate a new cement plant in Guizhou that is currently under construction, for a total consideration of approximately HK$157 million. Completion of the disposal is subject to certain conditions as stipulated in the sale and purchase agreement. Details of the transaction are set out in an announcement and a circular of the Company dated 6 May 2008 and 26 May 2008 respectively.

30. CREDITORS AND ACCRUED CHARGES

The aged analysis of creditors of HK$280.0 million (2007: HK$204.3 million), which are included in the Group’s creditors and accrued charges is as follows:

	2008	2007
	HK$ million	HK$ million
Creditors aged analysis:
Within 30 days	208.1	116.8
31 days to 90 days	59.0	55.0
91 days to 180 days	10.0	21.7
Over 180 days	2.9	10.8
	280.0	204.3
Retention payable	143.9	134.5
Accruals and other payables	443.6	463.7
	867.5	802.5

The average credit period on purchases is 3 months. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

31. LOAN FROM A RELATED COMPANY

The amount at 31 December 2007 represented an unsecured short-term interest bearing loan granted by a subsidiary of SOCL to the Company that was fully repaid in the current year.

— 103 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

32. BANK BORROWINGS

	2008	2007
	HK$ million	HK$ million
Bank overdrafts	—	14.7
Secured bank loans (note 41)	350.0	85.5
Unsecured bank loans	4,167.5	3,959.3
	4,517.5	4,059.5
Less: Amounts due within 12 months	(3,447.5)	(2,800.5)
Amounts due for settlement after 12 months	1,070.0	1,259.0
Carrying amount repayable:
Within one year (note)	3,447.5	2,800.5
More than one year but not exceeding two years	320.0	1,009.0
More than two years but not exceeding five years	750.0	250.0
	4,517.5	4,059.5

The average effective interest rates of the borrowings range from 1.00% to 6.83% (2007: 3.74% to 6.56%) per annum. All the Group’s borrowings are denominated in the functional currencies of the relevant group companies.

Note: Subsequent to the balance sheet date, the Group has renewed short-term bank loans of HK$800 million from financial institutions and a total of HK$270 million short-term loans was paid off on due dates. The average effective interest rates of these renewed borrowings range from 1.58% to 6.00% per annum.

33. CONVERTIBLE BONDS

On 31 July 2006, the Company issued HK$930 million zero coupon convertible bonds due 22 July 2009. The convertible bonds are denominated in Hong Kong dollars and are listed on the Stock Exchange.

The net proceeds received from the issue of the convertible bonds have been split between a straight debt component and a number of derivative financial instruments, which are measured at fair values. The effective interest rate of the straight debt component is 12.5% per annum. The fair values of the early redemption option and the conversion option are determined based on the Binomial Model and the Black-Scholes Pricing Model, respectively. The major inputs into the models at the balance sheet dates were as follows:

	2008	2007
Share price	HK$6.08	HK$28.43
Risk-free rate of interest	0.084% p.a.	2.072% p.a.
Dividend yield	4.8% p.a.	4.2% p.a.
Volatility	53%	38%

— 104 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The movement of the convertible bonds for the year is as follows:

		Derivative	financial	financial
		instruments
		Early
	Straight	redemption	Conversion
	debt	option		option
	HK$ million	HK$ million	_HK$ _	million
At 1 January 2007	817.6	(8.6)		175.3
Imputed interest expense during the year (note 10)	78.5	—		—
Changes in fair value (note 9)	—	(2.9)		329.5
Conversion during the year	(504.1)	6.9		(256.0)
At 31 December 2007	392.0	(4.6)		248.8
Imputed interest expense during the year (note 10)	48.5	—		—
Changes in fair value (note 9)	—	4.5		(243.4)
Conversion during the year	(10.0)	0.1		(4.6)
At 31 December 2008	430.5	—		0.8

The principal amount and market value of the convertible bonds outstanding at 31 December 2008 amounted to HK$385.1 million (2007: HK$395.1 million) and HK$357.0 million (2007: HK$650.1 million) respectively.

The convertible bonds are constituted by a trust deed dated 31 July 2006 (the “Trust Deed”). The principal terms of the convertible bonds include the following:

Conversion

At the option of the holders, the convertible bonds will be converted into fully paid ordinary shares of the Company from 9 September 2006 to 22 July 2009, both days inclusive, at an initial conversion price of HK$17.134 per share. The conversion price is subject to adjustments in certain events set out in the Trust Deed.

If the arithmetic average of the closing price of the Company’s shares for each day during the 15 consecutive Stock Exchange trading days immediately before 31 July 2007, 31 July 2008 and 31 May 2009 is less than the initial conversion price, the conversion price will automatically be adjusted downwards with reference to the 15-day average trading prices prior to adjustment, save that the adjusted conversion price shall in no event be less than 72% of the initial conversion price.

Pursuant to this price reset mechanism, the conversion price was adjusted to HK$15.41 per share with effect from 31 July 2008. Details of the adjustment are set out in an announcement of the Company dated 31 July 2008.

Redemption

Unless previously redeemed, purchased and cancelled or converted, the convertible bonds will be redeemed by the Company at 118.971% of their principal amount on 31 July 2009 (the “Maturity Date”).

— 105 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The Company may redeem the convertible bonds, in whole but not in part, (i) on or at any time after 31 January 2008 but not less than 7 business days prior to the Maturity Date, if the closing price of the Company’s shares for any 20 Stock Exchange trading days out of the 30 consecutive Stock Exchange trading days prior to the date upon which notice of such redemption is given was at least 125% of the applicable Early Redemption Amount (as defined below) divided by the Conversion Ratio (as defined below) in effect on such trading day or (ii) when more than 95% in principal amount of the convertible bonds has already been converted, redeemed or purchased and cancelled or (iii) as a result of regulatory change impacting on the payment obligations of the Company under the convertible bonds.

The “Early Redemption Amount” is the principal amount of the convertible bonds plus a gross yield of 5.875% per annum, calculated on a semi-annual basis, from 31 July 2006, the closing date of the convertible bond issue, to the Maturity Date. The “Conversion Ratio” is the principal amount of the convertible bonds divided by the then conversion price.

Cash settlement option

The obligation of the Company to issue shares on the exercise of any conversion rights attaching to the convertible bonds may, at the sole discretion of the Company, be settled by cash payment. The cash settlement payment shall be the product of the number of the Company’s shares otherwise deliverable under the then conversion price and the average closing price of the Company’s shares for the 10 Stock Exchange trading days immediately before the date the Company elects to exercise its cash settlement option in respect of the relevant convertible bonds.

34. SHARE CAPITAL

Ordinary shares of HK$1 each: Authorised At the beginning and the end of the year Issued and fully paid At the beginning of the year Exercise of share options Conversion of convertible bonds At the end of the year	2008 Number of shares 1,000,000,000 320,929,606 388,000 583,633 321,901,239	2007 2008 2007 Number of shares HK$ million HK$ million 1,000,000,000 1,000.0 1,000.0 283,600,000 320.9 283.6 6,111,000 0.4 6.1 31,218,606 0.6 31.2 320,929,606 321.9 320.9	2007 2008 2007 Number of shares HK$ million HK$ million 1,000,000,000 1,000.0 1,000.0 283,600,000 320.9 283.6 6,111,000 0.4 6.1 31,218,606 0.6 31.2 320,929,606 321.9 320.9
			283.6 6.1 31.2
			320.9

All the new shares issued during the year rank pari passu in all respects with the existing shares.

— 106 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

35. RESERVES

Attributable to equity holders of the Company

Share premium account Translation reserve Contributed surplus (Note a) Goodwill Retained profits HK$ million HK$ million HK$ million HK$ million HK$ million At 1 January 2007 646.9 51.5 197.6 (2.7) 1,460.1 Fair value changes of available-for-sale investments — — — — — Exchange differences arising on translation of financial statements of foreign operations — 143.6 — — — Recognition of actuarial gain (note 37) — — — — — Share of translation reserve of associates — 23.6 — — — Net income recognised directly in equity — 167.2 — — — Disposal of available-for-sale investments — — — — — Disposal of interests in jointly controlled entities — (9.2) — — — Profit for the year — — — — 702.0 Total recognised income and expense for the year — 158.0 — — 702.0 Premium on issue of shares upon exercise of share options 37.7 — — — — Conversion of convertible bonds 722.0 — — — — Recognition of share-based payments — — — — — Transfer upon exercise of share options 4.1 — — — — Transfer to statutory reserve — — — — (0.6)	Reserve funds HK$ million 1.5 — — — — — — — — — — — — — 0.6	Share option reserve Actuarial gain and loss Investment revaluation reserve Other reserve (Note b) HK$ million HK$ million HK$ million HK$ million 7.1 75.3 2,188.1 254.9 — — 1,394.2 — — — — — — 17.8 — — — — — — — 17.8 1,394.2 — — — (824.4) — — — — — — — — — — 17.8 569.8 — — — — — — — — — 31.1 — — — (4.1) — — — — — — —	Total Minority interests HK$ million HK$ million 4,880.3 52.2 1,394.2 — 143.6 2.5 17.8 — 23.6 — 1,579.2 2.5 (824.4) — (9.2) — 702.0 2.3 1,447.6 4.8 37.7 — 722.0 — 31.1 — — — — —	Total HK$ million 4,932.5
				1,394.2 146.1 17.8 23.6
				1,581.7 (824.4) (9.2) 704.3
				1,452.4 37.7 722.0 31.1 — —

— 107 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Attributable to equity holders	of the Company	Total HK$ million (200.8) (0.5)
Reserve funds HK$ million — — 2.1 — — — — — — — — — — — —	Share option reserve Actuarial gain and loss Investment revaluation reserve Other reserve (Note b) HK$ million HK$ million HK$ million HK$ million — — — — — — — — 34.1 93.1 2,757.9 254.9 — — (2,857.8) — — — — — — (209.6) — — — — — — — — — 102.0 — (209.6) (2,857.8) 102.0 — — (458.4) — — — 558.3 — — — — — — — — — — (209.6) (2,757.9) 102.0 — — — —
		6,974.4
		(2,857.8) 148.5 (209.6) 129.3 102.0
		(2,687.6) (458.4) 558.3 (0.4) 569.1
		(2,019.0) (2.7)

— 108 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

				Attributable to equity holders	Attributable to equity holders	Attributable to equity holders	of the Company	of the Company
	Share		Contributed				Share	Actuarial		Investment	Other
	premium	Translation	surplus		Retained	Reserve	option	gain and		revaluation	reserve		Minority
	account	reserve	(Note a)	Goodwill	profits	funds	reserve	loss		reserve	(Note b)	Total	interests	Total
	HK$	HK$	HK$	HK$	HK$	HK$	HK$	HK$		HK$	HK$	HK$	HK$	HK$
	million	million	million	million	million	million	million	million		million	million	million	million	million
Premium on issue of
shares upon
exercise of share
options	4.0	—	—	—	—	—	—		—	—	—	4.0	—	4.0
Conversion of
convertible bonds	13.9	—	—	—	—	—	—		—	—	—	13.9	—	13.9
Recognition of
share-based
payments	—	—	—	—	—	—	39.9		—	—	—	39.9	—	39.9
Transfer upon exercise
of share options	1.2	—	—	—	—	—	(1.2)		—	—	—	—	—	—
Transfer to statutory
reserve	—	—	—	—	(0.7)	0.7	—		—	—	—	—	—	—
Dividends paid	—	—	—	—	(273.5)	—	—		—	—	—	(273.5)	(5.0)	(278.5)
Other movements with
minority
shareholders	—	—	—	—	—	—	—		—	—	—	—	0.4	0.4
At 31 December 2008	1,429.8	484.9	197.6	(2.7)	2,251.7	2.8	72.8	(116.5)		—	356.9	4,677.3	55.1	4,732.4

Notes:

(a) The contributed surplus of the Group represents the difference between the nominal value of the shares of the acquired subsidiaries and the nominal value of the Company’s shares issued for the acquisition at the time of the group reorganisation prior to the listing of the Company’s shares in 1997.
(b) Other reserve of the Group included (i) an amount of HK$231.1 million, which arose when the Group entered into agreements with SOCL to co-invest in SOL during the year ended 31 March 2005, and (ii) an amount of HK$102.0 million, which represented the Group’s share of compensation recognised by LSOC in the form of donation in respect of losses in the earthquake in Sichuan during the year ended 31 December 2008.

— 109 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

36. DEFERRED TAXATION

The following are the major deferred tax (liabilities) assets recognised by the Group and movements thereon during the current and prior years:

			Other
	Accelerated tax		temporary
	depreciation	Tax losses	differences	Total
	HK$ million	HK$ million	HK$ million	HK$ million
At 1 January 2007	(0.9)	0.4	—	(0.5)
Charge to consolidated
income statement for the year	(0.2)	—	—	(0.2)
At 31 December 2007	(1.1)	0.4	—	(0.7)
Effect of change in tax rate	0.1	—	—	0.1
At 31 December 2008	(1.0)	0.4	—	(0.6)

For the purposes of balance sheet presentation certain deferred tax assets and liabilities have been offset.

At 31 December 2008, the Group has unused tax losses of HK$376.0 million (2007: HK$385.9 million) available to offset against future profits. A deferred tax asset has been recognised in respect of such tax losses amounting to HK$2.0 million (2007: HK$2.0 million). No deferred tax asset has been recognised in respect of the remaining tax losses of approximately HK$374.0 million (2007: HK$383.9 million) due to the unpredictability of future profit streams.

37. PROVIDENT FUND SCHEME AND DEFINED BENEFIT SCHEME

The Group participates in both a defined benefit scheme (the “Scheme”), which is registered under the Occupational Retirement Schemes Ordinance and a Mandatory Provident Fund Scheme (the “MPF Scheme”), a defined contribution scheme, established under the Mandatory Provident Fund Schemes Ordinance in December 2000. The assets of the schemes are held separately from those of the Group and are invested in securities and funds under the control of trustees. Employees who were members of the Scheme prior to the establishment of the MPF Scheme were offered a choice of staying within the Scheme or switching to the MPF Scheme. All employees joining the Group on or after 1 December 2000 have been required to join the MPF Scheme.

Mandatory Provident Fund Scheme

For members of the MPF Scheme, contributions are made by the employee at 5% of relevant income and by the Group at rates ranging from 5% to 10% of the employee’s salary, depending on the employee’s length of service with the Group.

The Group’s contributions to the MPF Scheme charged to the consolidated income statement as staff cost during the year amounted to HK$7.2 million (2007: HK$5.1 million). The amount of employer’s voluntary contributions to MPF schemes forfeited for the year ended 31 December 2008 and 31 December 2007 was immaterial and was used to reduce the existing level of contributions.

— 110 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Defined Benefit Scheme

Contributions to the Scheme are made by the members at 5% of their salaries and by the Group at rates, which are based on recommendations made by the actuary to the Scheme. The current employer contribution rate is 2% (31 December 2007: 2%) of the members’ salaries. Under the Scheme, a member is entitled to retirement benefits, which comprise the sum of any benefits transferred from another scheme and the greater of the sum of employer’s scheduled contribution plus the member’s contribution (both contributions being calculated on the basic salary of the member) accumulated with interest at a rate of no less than 6% per annum before 1 September 2003 and 1% per annum in respect of contributions made on or after 1 September 2003 or 1.8 times the final salary times the years of employment with the Group on the attainment of the retirement age of 60. For members who joined the Scheme before 1997, the retirement age is 60 for male members and 55 for female members. No other post-retirement benefits are provided.

The most recent actuarial valuations of the Scheme assets and the present value of the defined benefit obligation were carried out at 31 December 2008 by Ms. Elaine Hwang of Watson Wyatt Hong Kong Limited, who is a Fellow of the Society of Actuaries. The present value of the defined benefit obligations and the related current service cost were measured using the Projected Unit Credit Method.

The principal actuarial assumptions used at the balance sheet dates are as follows:

	2008	2007
Discount rate	1.20%	3.50%
Expected rate of return on Scheme assets	8.00%	8.25%
Expected rate of salary increase
2008	—	4.0% p.a.
2009	0.5% p.a.	4.0% p.a.
2010	1.0% p.a.	4.0% p.a.
2011 and after	2.0% p.a.	4.0% p.a.

The overall expected rate of return is a weighted average of the expected returns of the various categories of Scheme assets held.

The actual return on Scheme assets for the year ended 31 December 2008 was a loss of HK$158.3 million (2007: gain of HK$84.3 million).

Amounts recognised in the consolidated income statement for the year in respect of the Scheme are as follows:

	Year ended 31 December	Year ended 31 December
	2008	2007
	HK$ million	HK$ million
Current service cost	13.0	11.5
Interest cost	11.0	10.4
Expected return on Scheme assets	(35.5)	(30.3)
Net amount credited to consolidated income statement as staff costs	(11.5)	(8.4)

— 111 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The amount included in the consolidated balance sheet arising from the Group’s obligations in respect of the Scheme is as follows:

	2008	2007
	HK$ million	HK$ million
Present value of funded obligations	(358.7)	(330.5)
Fair value of Scheme assets	274.4	441.8
Defined benefit (liabilities) assets included in the consolidated balance sheet	(84.3)	111.3

The Scheme assets included no shares of the Company (2007: nil).

Movements of the present value of funded obligations are as follows:

	2008	2007
	HK$ million	HK$ million
At the beginning of the year	330.5	288.6
Current service cost	13.0	11.5
Interest cost	11.0	10.4
Employees’ contributions	6.2	6.5
Benefits paid	(18.8)	(16.8)
Transfers	1.0	(6.0)
Actuarial loss (note)	15.8	36.3
At the end of the year	358.7	330.5

Note: Actuarial loss on funded obligations represents the difference between expected obligations and actual obligations at the end of the year. The expected obligations at the end of the year are the obligations at the beginning of the year increased with one more year of service. The actuarial loss is mainly due to increase of salary in the year being different from that assumed at the last actuarial valuation and the change of certain assumptions at the current actuarial valuation.

— 112 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Movements of the fair value of Scheme assets are as follows:

	2008	2007
	HK$ million	HK$ million
At the beginning of the year	441.8	371.6
Expected return on Scheme assets	35.5	30.3
Actuarial (loss) gain (note)	(193.8)	54.1
Employers’ contributions	2.5	5.1
Employees’ contributions	6.2	6.5
Benefits paid	(18.8)	(16.8)
Transfers	1.0	(9.0)
At the end of the year	274.4	441.8

Note: Actuarial (loss) gain on Scheme assets represents the difference between expected assets value and actual assets value at the end of the year. The expected assets value at the end of year is the asset value at the beginning of year adjusted by contributions, benefit payments and expected returns. The actuarial (loss) gain is due to the actual return being lower/higher than the assumed return at the last actuarial valuation.

Additional disclosure in respect of the Scheme is as follows:

						2008		2007
					_HK$ _	million	_HK$ _	million
Experience	adjustment	on	Scheme	liabilities		(0.5)		(6.6)
Experience	adjustment	on	Scheme	assets		(193.8)		54.1

The major categories of Scheme assets as a percentage of total Scheme assets are as follows:

	2008	2007
	HK$ million	HK$ million
Equities	44.8%	68.5%
Hedge funds	28.9%	18.9%
Bonds and cash	26.3%	12.6%
	100%	100%

The Group expects to make a contribution of HK$2.2 million (2007: HK$2.5 million) to the Scheme during the next financial year.

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APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The Group recognises all actuarial gains and losses of the Scheme directly in the consolidated statement of recognised income and expense. The amounts of the actuarial gains and losses recognised during the year and cumulatively, are as follows:

	2008	2007
	HK$ million	HK$ million
Actuarial loss on present value of funded obligations	(15.8)	(36.3)
Actuarial (loss) gain on fair value of Scheme assets	(193.8)	54.1
Net actuarial (losses) gains recognised	(209.6)	17.8
Accumulated amount of actuarial (losses) gains recognised in the actuarial
gain and loss reserve	(116.5)	93.1

38. LEASE ARRANGEMENTS

As lessor

Property rental income in respect of the investment property and car park spaces earned during the year ended 31 December 2008 was HK$0.3 million (2007: HK$1.4 million).

At the balance sheet date, the Group had no significant leases contracted with its tenants.

As lessee

At the balance sheet date, the Group had commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	2008	2007
	HK$ million	HK$ million
Within one year	9.3	2.6
In the second to fifth years inclusive	11.7	1.3
	21.0	3.9

Operating lease payments represent rentals payable by the Group for certain of its office properties. Leases are negotiated for lease terms ranging from one to ten years.

— 114 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

39. CAPITAL COMMITMENTS

(a) At 31 December 2008, the Group’s share of the capital commitments of its jointly controlled entities is as follows:

				2008	2007
				HK$ million	HK$ million
Authorised	but	not	contracted for	—	—
Contracted	but	not	provided for	1,394.8	515.0

(b) At 31 December 2008, the Group had capital commitments in respect of certain investments not provided for in the financial statements amounting to approximately HK$698.9 million (2007: HK$284.3 million).

40. SHARE-BASED PAYMENTS

Following the amendments of Chapter 17 of the Rules Governing the Listing of Securities on the Stock Exchange on 1 September 2001, the Share Option Scheme of the Company adopted on 20 January 1997 (the “Old Scheme”) was terminated and replaced by a new share option scheme on 27 August 2002 (the “New Scheme”). Since then, no further option could be granted under the Old Scheme, but all options granted prior to such termination continue to be valid and exercisable.

Under the Old Scheme, the Board of Directors could offer eligible participants options to subscribe for shares in the Company at a price equal to the higher of the nominal value of the shares and 80% of the average of the closing prices of the shares quoted on the Stock Exchange for the five trading days immediately preceding the date on which options are offered to the eligible participants, subject to a maximum of 10% of the issued share capital of the Company from time to time. Consideration paid for each grant was HK$1. The entitlement of each eligible participant shall not exceed 25% of the aggregate number of ordinary shares in respect of options that could be granted under existing option schemes. Options granted were exercisable in stages over 5 years and up to 10 years from the date of grant.

On 27 August 2002, the Company adopted the New Scheme, which continues in force until the 10th anniversary of such date. The principal terms of the New Scheme are summarised below:

Purpose
(a) The New Scheme is a share incentive scheme and was established to recognise and acknowledge the contributions, which eligible participants have made or may make to the Group.
(b) The New Scheme provides eligible participants an opportunity to have a personal stake in the Company with a view to achieving the following objectives:
- (i) motivating eligible participants to utilise their performance and efficiency for the benefit of the Group; and
- (ii) attracting and retaining eligible participants whose contributions are or will be beneficial to the long term growth of the Group.

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Eligible participants
(a) The Board may at its discretion invite anyone belonging to any of the following classes of persons to take up options to subscribe for shares of the Company, subject to such conditions as the Board may think fit: any Director (whether Executive or Non-executive or Independent Non-executive), employee (whether full time or part time), officer, consultant, customer, supplier, agent, partner or adviser of or contractor to the Group or any invested entity and for the purpose of the New Scheme, the options may be granted to any corporation wholly-owned by any person mentioned in this paragraph.
(b) The eligibility of any of the above persons for the grant of any option is determined by the Board from time to time on the basis of his contribution to the development and growth of the Group. The Company is entitled to cancel any option granted to a grantee but not exercised if such grantee fails to meet the eligibility criteria determined by the Board after an option is granted but before it is exercised.

3. Total number of shares available for issue under the New Scheme

(a) 10% limit

Subject to the following paragraph, the total number of shares, which may be issued upon exercise of all options to be granted under the New Scheme and any other share option scheme of the Company must not in aggregate exceed 10% of the shares in issue at the date of approval of the New Scheme (excluding options which have lapsed) (the “Scheme Mandate Limit”).

The Company may, from time to time, refresh the Scheme Mandate Limit by obtaining the approval of the shareholders in general meeting. The Company may also seek separate approval of the shareholders in general meeting for granting options beyond the Scheme Mandate Limit or the refreshed limit, provided that the options in excess of such limit are granted only to eligible participants specifically identified by the Company before such approval is sought.

(b) 30% limit

The overall limit on the number of shares, which may be issued upon exercise of all outstanding options granted and yet to be exercised under the New Scheme and any other share option scheme of the Company must not exceed 30% of the shares in issue from time to time.

4. Maximum entitlement of each participant

The total number of shares issued and to be issued upon exercise of the options granted to each participant (including both exercised and outstanding options) in any 12-month period must not exceed 1% of the shares in issue. Where any further grant of options to a grantee would result in the shares issued and to be issued upon exercise of all options granted and to be granted to such person (including exercised, cancelled and outstanding options) in the 12-month period up to and including the date of such further grant representing in aggregate over 1% of the shares in issue, such further grant must be separately approved by the shareholders in general meeting with such grantee and his associates abstaining from voting.

5. Performance target

The New Scheme allows the Board, when offering the grant of any option, to impose any condition including any performance target, which must be met before the option shall vest and become exercisable.

— 116 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

Minimum period for which an option must be held

The Board may at its discretion when offering the grant of any option impose any minimum period for which an option must be held before it can be exercised.

7. Exercise price

The exercise price is determined by the Board and shall be at least the highest of: (a) the closing price of a share as stated in the daily quotations sheet of the Stock Exchange on the date of grant; and (b) the average closing price of the shares as shown on the daily quotations sheets of the Stock Exchange for the five business days immediately preceding the date of grant; and (c) the nominal value of a share.

8. Amount payable upon acceptance of option

HK$1.00 is payable by each eligible participant to the Company on acceptance of an offer of options, to be paid within 28 days from the date of the offer.

The following tables disclose details of the Company’s share options held by employees (including directors) and movements in such holdings during the year.

					Number of	options
										Period during
										which share	Average
										options	closing
										outstanding at	reference
		Subscription	At 1	Granted	Exercised	Cancelled		Lapsed	At 31	31 December	price for
		price per	January	during the	during the	during	the	during the	December	2008 are	exercise of
Date of grant	Grant	share	2008	year	year	year		year	2008	exercisable	options
		HK$									HK$
											(Note)
New Scheme
4 August 2003	3	5.80	6,000	—	(6,000)		—	—	—	4 February 2004	16.30
										to 3 August 2008
26 July 2004	4	7.25	220,000	—	(106,000)		—	(26,000)	88,000	26 January 2005	15.22
										to 25 July 2009
29 July 2005	5	9.30	466,000	—	(108,000)		—	(36,000)	322,000	29 January 2006	16.63
										to 28 July 2010
1 August 2006	6	14.00	3,464,000	—	(120,000)		—	(96,000)	3,248,000	1 February 2007	19.43
										to 31 July 2011
3 January 2007	7	16.78	8,800,000	—	—		—	—	8,800,000	3 January 2010	—
										to 2 January 2012
3 January 2007	8	16.78	3,525,000	—	—		—	—	3,525,000	3 January 2010	—
										to 2 January 2017
14 June 2007	9	20.96	3,070,000	—	(48,000)		—	(72,000)	2,950,000	14 December 2007	26.27
										to 13 June 2012

— 117 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Date of grant Grant Subscription price per share HK$ 14 June 2007 10 20.96 14 June 2007 11 20.96 7 May 2008 12 19.76 7 May 2008 13 19.76 7 May 2008 14 19.76 7 May 2008 15 19.76 Number of options exercisable at the end of the year			Number of options	At 31 December 2008 Period during which share options outstanding at 31 December 2008 are exercisable Average closing reference price for exercise of options HK$ (Note) 600,000 14 December 2008 to 13 June 2012 — 4,200,000 1 July 2010 to 13 June 2012 — 3,440,000 7 November 2008 to 6 May 2013 — 300,000 7 November 2009 to 6 May 2013 — 3,000,000 7 May 2011 to 6 May 2013 — 4,750,000 7 May 2011 to 6 May 2018 — 35,223,000 4,090,400
		At 1 January 2008 900,000 4,200,000 — — — — 24,651,000	Granted during the year Exercised during the year Cancelled during the year Lapsed during the year — — — (300,000) — — — — 3,440,000 — — — 300,000 — — — 3,000,000 — — — 4,750,000 — — — 11,490,000 (388,000) — (530,000)

Number of options exercisable at the end of the year

— 118 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

Date of grant Grant Subscription price per share HK$ New Scheme 27 August 2002 1 6.00 27 August 2002 2 6.00 4 August 2003 3 5.80 26 July 2004 4 7.25 29 July 2005 5 9.30 1 August 2006 6 14.00 3 January 2007 7 16.78 3 January 2007 8 16.78 14 June 2007 9 20.96 14 June 2007 10 20.96 14 June 2007 11 20.96 Number of options exercisable at the end of the year				Number of options	At 31 December 2007 Period during which share options outstanding at 31 December 2007 are exercisable Average closing reference price for exercise of options HK$ (Note) — 27 February 2003 to 26 August 2007 20.49 — 27 August 2005 to 26 August 2010 21.94 6,000 4 February 2004 to 3 August 2008 22.87 220,000 26 January 2005 to 25 July 2009 24.05 466,000 29 January 2006 to 28 July 2010 22.78 3,464,000 1 February 2007 to 31 July 2011 23.22 8,800,000 3 January 2010 to 2 January 2012 — 3,525,000 3 January 2010 to 2 January 2017 — 3,070,000 14 December 2007 to 13 June 2012 27.02 900,000 14 December 2008 to 13 June 2012 — 4,200,000 1 July 2010 to 13 June 2012 — 24,651,000 1,663,200
		At 1 January 2007 272,000 4,435,000 190,000 454,000 776,000 4,106,000 — — — — — 10,233,000	Granted during the year — — — — — — 8,800,000 3,525,000 3,186,000 900,000 4,200,000 20,611,000	Exercised during the year Cancelled during the year Lapsed during the year (272,000) — — (4,435,000) — — (184,000) — — (234,000) — — (302,000) — (8,000) (618,000) — (24,000) — — — — — — (66,000) — (50,000) — — — — — — (6,111,000) — (82,000)

Note: The average closing reference price represented the average of closing prices of the Company’s shares immediately before the dates on which the options were exercised during the year, weighted by the number of options exercised.

— 119 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

The vesting conditions of the respective share option grants are as follows:

For Grants 1, 3 to 6, 9 and 12:

20%:	6 months after the date of grant
20%:	1st anniversary of the date of grant
20%:	2nd anniversary of the date of grant
20%:	3rd anniversary of the date of grant
20%:	4th anniversary of the date of grant

For Grant 2:

The options have fully or partly vested and become exercisable on 27 August 2005 based on the assessment of the related performance of the option holders.

For Grant 7 and 14:

Service Requirement All options may vest on 3 January 2010 (for Grant 7) or 7 May 2011 (for Grant 14) subject to the satisfaction of all the performance conditions. Performance Hurdle All options may vest on vesting date depending on performance appraisal grading that includes 50% weight of Project Development team performance and 50% weight of individual performance, both of which the grantee would achieve in his/her performance appraisal during 2007, 2008 and 2009 (for Grant 7) or 2008, 2009 and 2010 (for Grant 14), and apply to 1/3 of the options granted respectively.

The vesting schedule is as follows:

Performance	Vested Portion of Options
Superior	100%
Superior minus	90%
Good plus	75%
Good	60%

For Grant 8 and 15:

Vesting of the options is conditional upon the performance of the Company’s shares over the period from close of trading in Hong Kong on 3 January 2007 to 2 January 2010 (for Grant 8) or 1 January 2008 to 31 December 2010 (for Grant 15) (“Performance Period”). Vesting will only occur if the change in the total shareholder return (“TSR”) of the Company’s shares over the relevant Performance Period is (1) positive and (2) equal to or greater than the change in the total return index (“TRI”) of the Hang Seng Index (“HSI”) over the relevant Performance Period.

— 120 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

The vesting schedule is as follows:

Positive change in TSR of the Company compared to the change in the HSI TRI	Vested Portion of
during the relevant Performance Period	Options
Less than the change in the HSI TRI	0%
Equal to the change in the HSI TRI	30%
For each percentage point up to 35% above the change in the HSI TRI	2%
Higher than the change in the HSI TRI by 35% or above	100%

If the change in HSI TRI is negative compared to the positive change in TSR of the Company, full vesting will apply.

For Grant 11:

Service Requirement All options may vest on 1 July 2010 subject to the satisfaction of all the performance conditions.

Performance Hurdle

All options may vest on vesting date depending on performance appraisal grading that includes 50% weight of Project Development team performance and 50% weight of individual performance, both of which the grantee would achieve in his/her performance appraisal at 31 December 2007, 31 December 2008, 31 December 2009 and 30 June 2010, and apply to 1/6, 1/3, 1/3 and 1/6 of the options granted respectively.

The vesting schedule is as follows:

Performance	Vested Portion of Options
Superior	100%
Superior minus	90%
Good plus	75%
Good	60%

For Grant 10 and 13:

Service Requirement Subject to the satisfaction of all the performance conditions, the options may vest in accordance with the following schedule:

40%: 18 months after the date of grant 20%: 2nd anniversary of the date of grant 20%: 3rd anniversary of the date of grant 20%: 4th anniversary of the date of grant

Performance Hurdle

The vesting of these share options is subject to the satisfactory performance of the Project Development business as a whole during the next 18 months after the date of grant as assessed by the Company’s executive management.

— 121 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The fair values of services received in return for share options granted is measured by reference to the fair value of share options granted. Except for Grant 8 and 15, which adopt the Monte Carlo model, the estimate of the fair value of the share options granted is measured based on the Binomial model. The inputs into the models were as follows:

	Grant 3	Grant 4	Grant 5	Grant 6	Grant 7	Grant 8	Grant 9 Grant 10	Grant 9 Grant 10	Grant 11
	4 August	26 July	29 July	1 August	3 January	3 January	14 June	14 June	14 June
Date of grant	2003	2004	2005	2006	2007	2007	2007	2007	2007
Average fair value	HK$1.33	HK$1.79	HK$2.27	HK$3.83	HK$4.39	HK$3.46	HK$5.72	HK$5.78	HK$5.85
Share price on the date of grant	HK$5.70	HK$7.30	HK$9.30	HK$14.00	HK$16.50	HK$16.50	HK$20.90 HK$20.90		HK$20.90
Exercise price	HK$5.80	HK$7.25	HK$9.30	HK$14.00	HK$16.78	HK$16.78	HK$20.96 HK$20.96		HK$20.96
Expected volatility	40% p.a.	40% p.a.	40% p.a.	40% p.a.	40% p.a.	40% p.a.	40% p.a.	40% p.a.	40% p.a.
Average expected life	3.84 years	3.82 years	3.81 years	4.21 years	4.53 years	3.48 years	4.17 years 3.48 years		4.52 years
Average risk-free rate	2.86% p.a.	3.25% p.a.	3.53% p.a.	4.40% p.a.	3.67% p.a.	3.62% p.a.	4.61% p.a. 4.62% p.a.		4.64% p.a.
Expected dividend paid	5% p.a.	5% p.a.	5% p.a.	5% p.a.	5% p.a.	5% p.a.	5% p.a.	5% p.a.	5% p.a.
Rate of leaving service	2% p.a.	2% p.a.	2% p.a.	2% p.a.	3% p.a.	0% p.a.	3% p.a.	3% p.a.	3% p.a.
Expected volatility of HSI TRI	n/a	n/a	n/a	n/a	n/a	15% p.a.	n/a	n/a	n/a
Expected correlation between TSR of
the Company and HSI TRI	n/a	n/a	n/a	n/a	n/a	35% p.a.	n/a	n/a	n/a
				Grant 12	Grant 13		Grant 14		Grant 15
				7 May		7 May	7 May		7 May
Date of grant				2008		2008	2008		2008
Average fair value				HK$5.06		HK$5.09	HK$5.12		HK$3.03
Share price on the date of grant				HK$19.28	HK$19.28		HK$19.28		HK$19.28
Exercise price				HK$19.76	HK$19.76		HK$19.76		HK$19.76
Expected volatility				42% p.a.		42% p.a.	42% p.a.		42% p.a.
Average expected life				4 years		4 years	4 years		4 years
Average risk-free rate				2.35% p.a.	2.37% p.a.		2.40% p.a.		2.36% p.a.
Expected dividend paid				5% p.a.		5% p.a.	5% p.a.		5% p.a.
Rate of leaving service				3% p.a.		3% p.a.	3% p.a.		0% p.a.
Expected volatility of HSI TRI				n/a		n/a	n/a		25% p.a.
Expected correlation between TSR of
the Company and HSI TRI				n/a		n/a	n/a		45% p.a.

For grants in 2008, the expected volatility was determined by using the average historical volatility of the Company’s share price over last 4 years and 5 years before the grant date. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non transferability, exercise restrictions and behavioural considerations.

Total consideration received during the year from employees, including directors, for taking up the options granted was HK$72 (2007: HK$79).

The Group recognised a total expense of HK$39.9 million for the year ended 31 December 2008 (2007: HK$31.1 million) in relation to share options granted by the Company.

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FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

41. PLEDGE OF ASSETS

At 31 December 2008, the following net assets were pledged as collateral to secure certain banking facilities granted to the Group:

	2008	2007
	HK$ million	HK$ million
Pledged bank deposit	76.0	386.4
Equity interest in a subsidiary classified as held for sale (note a)	192.8	—
Equity interest in a subsidiary and certain jointly controlled entities (note b)	519.5	—
	788.3	386.4

Notes:

(a) The amount represents the net asset value of the subsidiary at 31 December 2008. As disclosed in note 29, the Group entered into a sale and purchase agreement to dispose of its equity interest in this subsidiary to LSOC. The pledge will be released upon completion of the disposal.
(b) The net assets of the subsidiary and the jointly controlled entities pledged are as follows.

	2008
	HK$ million
Property, plant and equipment	1.4
Interests in jointly controlled entities	149.6
Properties under development for sale	185.7
Debtors, deposits and prepayments	7.4
Amounts due from jointly controlled entities	134.9
Amounts due from associates	0.8
Bank balances, deposits and cash	55.3
Creditors and accrued charges	(0.9)
Amounts due to jointly controlled entities	(14.7)
Net assets pledged	519.5

42. LOSS/GAIN ON DISPOSAL OF INTERESTS IN JOINTLY CONTROLLED ENTITIES/LOSS ON DEEMED DISPOSAL OF INTEREST IN AN ASSOCIATE

(a) On 12 April 2007, the Group and the co-investors of certain jointly controlled entities, which hold five distressed property development projects in the PRC entered into asset injection agreements with a wholly-owned subsidiary of CCP in connection with the disposal of the entire equity interest in, and a majority of their related shareholders loans to these jointly controlled entities.

— 123 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

The transaction was completed on 13 June 2007 upon the Listing and the Group received 56,924,000 ordinary shares of CCP as the consideration from CCP, representing about 47.8% of the then equity of CCP. The transaction was accounted for as the disposal of interests in jointly controlled entities. Incidental to the disposal and pursuant to the subscription agreement dated 12 April 2007, the Group further injected £63.0 million (HK$975.2 million) and US$25 million (HK$195.3 million) to subscribe for 63,012,000 ordinary shares and convertible bonds of CCP respectively, upon Listing.

Subsequent to the Listing and the allotment of new CCP shares under the subscription agreement, the Group’s equity interest in CCP was diluted to 40.2%. This was accounted for as a deemed disposal of interest in an associate. Details of the transactions were set out in the circular of the Company dated 18 April 2007 and announcements of the Company dated 12 April 2007, 15 May 2007, 23 May 2007 and 8 June 2007.

As a result of the above transactions, the Group recognised a net gain of approximately HK$89.0 million in the consolidated income statement for the year ended 31 December 2007.

(b) During the year ended 31 December 2008, the Group disposed of a jointly controlled entity to an independent third party and recognised a loss on disposal amounting to HK$6.4 million.

43. CONTINGENT LIABILITIES

At 31 December 2008, performance bonds established amounting to approximately HK$196.4 million (31 December 2007: HK$130.6 million) have not been provided for in the consolidated financial statements.

At 31 December 2008, the Group has arranged standby documentary credits with banks amounting to HK$292 million (2007: HK$300 million) to secure bank loans granted to subsidiaries of an associate.

In the opinion of the Directors of the Company, the fair values of the financial guarantee contracts of the Group are insignificant at initial recognition and the Directors consider that the possibility of the default of the parties involved is remote. Accordingly, no value has been recognised in the consolidated balance sheet.

44. RELATED PARTY TRANSACTIONS

(a) During the year, the Group had the following transactions with SOCL and its subsidiaries and associates other than those of the Group (“SOCL Private Group”).

Nature of transactions	2008	2007
	HK$ million	HK$ million
Income recognised:
Management and information system services	0.4	0.6
Project management services	—	3.1
Construction work	278.4	119.6
Cost and expenses recognised:
Rental expenses	0.5	0.1
Building management fee	0.1	0.1
Interest expense	2.1	11.3

The outstanding balances with SOCL Private Group at the balance sheet date are disclosed in notes 28 and 31.

— 124 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

(b) During the year, the Group had the following transactions with jointly controlled entities.

Nature of transactions	2008	2007
	HK$ million	HK$ million
Income recognised:
Interest income	4.8	6.8
Imputed interest income	22.6	—
Management fee	30.7	21.9
Rental income	—	0.7
Construction/subcontracting work	—	11.5
Cost and expenses recognised:
Construction/subcontracting work	7.9	8.5
Interest expense	2.3	—

The outstanding balances with jointly controlled entities at the balance sheet date are disclosed in note 23.

Nature of transactions	2008	2007
	HK$ million	HK$ million
Income recognised:
Interest income	6.3	2.5
Imputed interest income	30.6	—
Management fee	171.8	42.2
Interest income on convertible bonds	24.0	12.4
Construction/subcontracting work	67.4	1.1

The outstanding balances with associates at the balance sheet date are disclosed in note 25.

(d) The Group is licensed by Shui On Holdings Limited, a wholly-owned subsidiary of SOCL, to use the trademark, trade name of “Shui On”, “瑞安” and/or the Seagull devices on a non-exclusive, royalty-free basis for an unlimited period of time.
(e) During the year, the Group was granted unsecured interest bearing short-term loans totalling HK$300.0 million from SOCL Private Group (2007: HK$450.0 million), and incurred interest on such loans amounting to HK$2.1 million (2007: HK$11.3 million). The loans, inclusive of interest, were repaid during the year.
(f) During the year, the Group received dividend income amounting to HK$83.6 million (2007: HK$120.9 million) from certain jointly controlled entities.
(g) During the year, the Group disposed of HK$1.0 billion (2007: HK$1.8 billion) worth of SOL shares to a wholly-owned subsidiary of SOCL.

— 125 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

(h) The remuneration of Directors and other members of key management during the year was as follows:

	2008	2007
	HK$ million	HK$ million
Fees	1.5	1.2
Salaries and other benefits	36.5	28.3
Bonuses	15.4	17.9
Retirement benefit scheme contributions	1.1	1.1
Share-based payments	21.3	17.7
	75.8	66.2

The remuneration of Directors and key executives is determined by the Remuneration Committee having regard to the performance of individuals and market trends.

45. EVENTS AFTER THE BALANCE SHEET DATE

On 31 March 2009, the Company announced that it has made an approach to CCP, which may or may not lead to an offer being made by the Company for CCP. A further announcement will be made by the Company as appropriate in due course.

46. PARTICULARS OF PRINCIPAL SUBSIDIARIES

The Directors are of the opinion that a complete list of the particulars of all subsidiaries will be of excessive length and therefore the following list contains only the particulars of subsidiaries at 31 December 2008, which principally affect the results or assets of the Group. All the companies listed below were incorporated and are operating in Hong Kong except as otherwise indicated.

		Percentage of issued	Percentage of issued	Percentage of issued
		share/ registered
	Issued and fully paid share	capital held by		the
Subsidiaries	capital/registered capital	Company			Principal activities
		Directly Indirectly
Construction and building
maintenance business
Dynamic Mark Limited	100 ordinary shares of HK$1	—		80%	Supply of metal gates
	each
	3,000,000 non-voting deferred
	shares of HK$1 each
P.D. (Contractors) Limited	1,000,000 ordinary shares of	—	98.34%		Renovation work
	HK$1 each
Pacific Extend Limited	10,000 ordinary shares of HK$1	—		67%	Maintenance
	each				contractor
	6,000 special shares of HK$1
	each

— 126 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		Percentage of issued	Percentage of issued	Percentage of issued
		share/ registered
	Issued and fully paid share	capital held by		the
Subsidiaries	capital/registered capital	Company			Principal activities
		Directly Indirectly
Pat Davie Limited	9,400,100 ordinary shares of	—	98.34%		Interior decoration,
	HK$1 each				fitting out, design and
	100,000 non-voting deferred				contracting
	shares of HK$10 each
Pat Davie (Macau) Limited ##	two quotas of total face value of	—	98.34%		Interior decoration,
	MOP1,000,000				fitting out, design and
					contracting
Pat Davie (Shanghai) Company	2 ordinary shares of HK$1 each	—	98.34%		Interior decoration,
Limited					fitting out, design and
					contracting
Panyu Dynamic Mark Steel and	Registered and paid up capital	—		64%	Steel fabrication
Aluminium Engineering Co.	HK$4,000,000
Ltd. **@
Shui Fai Metal Works	10,000 ordinary shares of HK$1	—		55%	Sales and installation
Engineering Company	each				of wallform and other
Limited					metal works
Shui On Building Contractors	117,000,100 ordinary shares of	—		100%	Building construction
Limited	HK$1 each				and maintenance
	33,000,100 non-voting deferred
	shares of HK$1 each
	50,000 non-voting deferred
	shares of HK$1,000 each
Shui On Construction Company	100 ordinary shares of HK$1	—		100%	Building construction
Limited	each
	69,000,000 non-voting deferred
	shares of HK$1 each
	1,030,000 non-voting deferred
	shares of HK$100 each
Shui On Contractors Limited*	1 share of US$1	100%		—	Investment holding
Shui On Plant and Equipment	16,611,000 ordinary shares of	—		100%	Owning and leasing of
Services Limited	HK$1 each				plant and machinery
	45,389,000 non-voting deferred				and structural steel
	shares of HK$1 each				construction work
Shui On Construction Co.,	Registered and paid up capital	—		70%	Building construction
Ltd. **@	RMB50,000,000				and maintenance

— 127 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		Percentage of issued	Percentage of issued
		share/ registered
	Issued and fully paid share	capital held by	the
Subsidiaries	capital/registered capital	Company		Principal activities
		Directly Indirectly
Cement operations
Asia No.1 Material Supply	100 ordinary shares of HK$100	—	100%	Holding of a quarry
Limited	each			right
	1,000 non-voting deferred
	shares of HK$100 each
Asia Materials Limited	2 ordinary shares of HK$1 each	—	100%	Trading
Glorycrest Holdings Limited*	1 share of US$1	—	100%	Investment holding
Shui On Building Materials	100 ordinary shares of HK$1	—	100%	Investment holding
Limited	each			and sale of
	1,000,000 non-voting deferred			construction materials
	shares of HK$1 each
Shui On Cement (Guizhou)	100,000 shares of US$1 each	—	100%	Investment holding
Limited *
Shui On Materials Limited *	1 share of US$1	100%	—	Investment holding
貴州瑞安水泥發展管理	Registered and paid up capital	—	100%	Provision of
有限公司**+	US$670,000			consultancy services
Middleton Investments	2 ordinary shares of US$1 each	—	100%	Investment holding
Limited ***
Tinsley Holdings Limited ***	2 ordinary shares of US$1 each	—	100%	Investment holding
Top Bright Investments	2 ordinary shares of US$1 each	—	100%	Investment holding
Limited ***
Winway Holdings Limited ***	2 ordinary shares of US$1 each	—	100%	Investment holding
Fortune Smooth Investments	1 share of US$1	—	100%	Investment holding
Limited *
Wayly Holdings Limited *	1 share of US$1	—	100%	Investment holding
貴州凱里瑞安建材有限公司**+	Registered and paid up capital	—	100%	Manufacture and sale
	HK$150,000,000			of cement and related
				construction materials
				products

— 128 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

		Percentage of issued	Percentage of issued
		share/ registered
	Issued and fully paid share	capital held by	the
Subsidiaries	capital/registered capital	Company		Principal activities
		Directly Indirectly
Property development business
Jade City International Limited	2 ordinary shares of HK$1 each	—	100%	Property holding
New Rainbow Investments	1 share of US$1	100%	—	Investment holding
Limited *
Brilliance Investments Limited *	1 share of US$1	100%	—	Investment holding
Main Zone Group Limited *	1 share of US$1	100%	—	Investment holding
Asset management and other
business
SOCAM Asset Management	1 share of US$1	100%	—	Investment holding
Limited *
SOCAM Asset Management	1 ordinary share of HK$1	—	100%	Provision of
(HK) Limited				management services
Beijing SOCAM Real Estate	Registered and paid up capital	—	100%	Provision of
Consulting Co., Ltd. **+	RMB800,000			consultancy services
Shui On Project Management	1 share of US$1	—	100%	Investment holding
(China) Limited *
Trillion Earn Limited	1 ordinary share of HK$1	—	100%	Investment holding
High Spirit Project Management	1 ordinary share of HK$1	—	100%	Project management
Consultancy Limited				consultancy services
Park Wealth Investments	1 share of US$1	100%	—	Investment holding
Limited *
Poly Edge Enterprises Limited *	1 share of US$1	100%	—	Investment holding
Max Clear Holdings Limited *	1 share of US$1	100%	—	Provision of
				management services
Dalian Zhong Hui Construction	Registered capital	—	100%	Wholesale of
Materials Co., Ltd. **+	US$32,000,000 and paid up			construction materials
	capital US$6,400,000

— 129 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

			Percentage of issued	Percentage of issued	Percentage of issued
			share/ registered
		Issued and fully paid share	capital held by		the
Subsidiaries		capital/registered capital		Company		Principal activities
				Directly Indirectly
Dalian Jiasheng Science &		Registered capital US$6,000,000		—	100%	Software and hardware
	Technology Development Co.,	and paid up capital				development and
	Ltd. **+	US$1,200,000				technical consultancy
						services
Rise Huge International		1 share of US$1		100%	—	Investment holding
	Limited *
Lamma Rock Products Limited		100 ordinary shares of HK$10		—	100%	Investment holding
		each
		3,500,000 non-voting deferred
		shares of HK$10 each
T H Industrial Management		2,740 ordinary shares of US$1 each		—	100%	Investment holding
	Limited #
Prelude Group Limited *		2,000 shares of US$1 each		—	100%	Investment holding
Chongqing TH Holding		Registered capital		—	100%	Exploration and
	Management Company	RMB291,460,000 and paid up				management of
	Limited **+	capital RMB91,460,000				investment projects
Chongqing T.H. White Cement		Registered and paid up capital		—	60%	Manufacture and sale
	Co. Ltd. **@	US$1,506,000				of cement
Chongqing Yugang Foreign		Registered and paid up capital		—	100%	Provision of
	Investment Consulting	RMB800,000				investment
	Limited **+					consultation
*	Incorporated in the British Virgin Islands
**	Registered and operated in other regions of the PRC
*** Incorporated in Mauritius
#	Incorporated in the Bahamas
##	Incorporated in Macau Special Administrative Region of the PRC
+	Wholly-foreign owned enterprises
@	Equity joint venture

None of the subsidiaries had any debt securities subsisting at 31 December 2008 or at any time during the year.

— 130 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

47. PARTICULARS OF PRINCIPAL JOINTLY CONTROLLED ENTITIES

The Directors are of the opinion that a complete list of the particulars of all jointly controlled entities will be of excessive length and therefore the following list contains only the particulars of principal jointly controlled entities of the Group at 31 December 2008. All the companies listed below were incorporated and are operating in Hong Kong except otherwise indicated.

		Effective
		percentage
		of issued
		share/registered
Indirect jointly	Issued and paid up share	capital held
controlled entities	capital/ registered capital	by the Group	Principal activities	Notes
Construction and
building maintenance
business
Brisfull Limited	5,000,000 ordinary shares of	50%	Sale and installation of
	HK$1 each		aluminium window
			products
Super Race Limited	420,000 ordinary shares of	50%	Supply of sink units and
	HK$1 each		cooking benches
鶴山超合預製件	Registered capital	50%	Manufacture of sink units	1
有限公司**@	US$1,284,600 and paid up		and cooking benches
	capital US$484,600
Cement operations
Beijing Chinefarge	Registered and paid up	29.25%	Production and sales of
Cement Co., Ltd.**@	capital RMB315,000,000		cement and cement
			related products
Beijing Shunfa Lafarge	Registered and paid up	31.5%	Production and sales of
Cement Co., Ltd.**@	capital RMB150,000,000		cement and cement
			related products
Beijing Yicheng Lafarge	Registered and paid up	34.52%	Production and sales of
Concrete Co., Ltd.**@	capital RMB30,340,000		concrete
Chongqing TH New	Registered and paid up	33.75%	Production and sales of
Building Materials Co.,	capital RMB41,500,000		cement and cement
Ltd.**@			related products
Chongqing TH Diwei	Registered and paid up	36%	Production and sales of
Cement Co., Ltd.**@	capital RMB61,680,000		cement and cement
			related products
Chongqing TH Fuling	Registered and paid up	45%	Production and sales of
Cement Co., Ltd.**	capital RMB44,000,000		cement and cement
			related products

— 131 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		Effective
		percentage
		of issued
		share/registered
Indirect jointly	Issued and paid up share	capital held
controlled entities	capital/ registered capital	by the Group	Principal activities	Notes
Chongqing TH Special	Registered and paid up	36%	Production and sales of
Cement Co., Ltd.**@	capital RMB210,000,000		cement and cement
			related products
Guangan TH Cement Co.,	Registered and paid up	45%	Production and sales of
Ltd.**	capital RMB110,000,000		cement and cement
			related products
Guizhou Bijie Shui On	Registered and paid up	80%	Manufacture and sale of	1
Cement Co., Ltd.**@	capital RMB48,000,000		cement
貴州暢達瑞安水泥	Registered and paid up	51%	Manufacture and sale of	1
有限公司**@	capital RMB106,000,000		cement
Guizhou Dingxiao Shui	Registered and paid up	40.5%	Production and sales of
On Cement Co.,	capital RMB129,777,699		cement and cement
Ltd.**@			related products
Guizhou Kaili Ken On	Registered and paid up	75%	Supply of ready mixed	1
Concrete Co., Ltd.**@	capital RMB10,000,000		concrete
貴州凱里瑞安水泥	Registered and paid up	90%	Manufacture and sale of	1
有限公司**@	capital RMB60,000,000		cement
貴州六礦瑞安水泥	Registered and paid up	30%	Manufacture and sale of
有限公司**@	capital RMB110,000,000		cement
Guizhou Shuicheng Shui	Registered and paid up	31.5%	Production and sales of
On Cement Co.,	capital RMB200,000,000		cement and cement
Ltd.**@			related products
Guizhou Yuqing Shui On	Registered and paid up	80%	Manufacture and sale of	1
Cement Co., Ltd.**@	capital RMB20,000,000		cement
貴州遵義瑞安水泥	Registered and paid up	80%	Manufacture and sale of	1
有限公司**@	capital RMB92,000,000		cement
Lafarge Chongqing	Registered and paid up	31.77%	Production and sales of
Cement Co., Ltd.**@	capital RMB340,000,000		cement and cement
			related products
Lafarge Dujiangyan	Registered and paid up	33.75%	Production and sales of
Cement Co., Ltd.**@	capital RMB856,839,300		cement and cement
			related products

— 132 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		Effective
		percentage
		of issued
		share/registered
Indirect jointly	Issued and paid up share	capital held
controlled entities	capital/ registered capital	by the Group	Principal activities	Notes
Nanchong T.H. Cement	Registered and paid up	45%	Manufacture and sale of
Co., Ltd.**	capital RMB15,000,000		cement
Lafarge Shui On Cement	2,057,998 ordinary shares of	45%	Investment holding
Limited	HK$1 each
Nanjing Jiangnan Cement	Registered and paid up	60%	Manufacture and trading	1
Co., Ltd.**@	capital RMB120,000,000		of cement
Panzhihua Jinsha Cement	Registered and paid up	36%	Production and sales of
Co., Ltd.**	capital RMB10,000,000		cement and cement
			related products
Yunnan Shui On	Registered and paid up	36%	Investment holding
Construction Materials	capital RMB1,000,000,000
Investment Holding
Co., Ltd.**@
Yunnan State Assets	Registered and paid up	36%	Production and sales of
Cement Chuxiong Co.,	capital RMB32,696,363		cement and cement
Ltd.**			related products
Yunnan State Assets	Registered and paid up	36%	Production and sales of
Cement Dongjun Co.,	capital RMB260,000,000		cement and cement
Ltd.**			related products
Yunnan State Assets	Registered and paid up	36%	Production and sales of
Cement Haikou Co.,	capital RMB54,556,806		cement and cement
Ltd**			related products
Yunan State Assets	Registered and paid up	36%	Production and sales of
Cement Honghe Co.,	capital RMB263,785,829		cement and cement
Ltd.**			related products
Yunnan State Assets	Registered and paid up	36%	Production and sales of
Cement Jianchuan Co.,	capital RMB122,483,913		cement and cement
Ltd.**			related products
Yunan State Assets	Registered and paid up	36%	Production and sales of
Cement Kunming Co.,	capital RMB130,375,098		cement and cement
Ltd.**			related products
Property development
business
Broad Wise Limited*	100 shares of US$1 each	40%	Investment holding

— 133 —

APPENDIX II

FINANCIAL INFORMATION ON THE SOCAM GROUP

		Effective
		percentage
		of issued
		share/registered
Indirect jointly	Issued and paid up share	capital held
controlled entities	capital/ registered capital	by the Group	Principal activities	Notes
Orient Home Chengdu	Registered and paid up	24.5%	Property development
Jinniu Zhiye Co.,	capital RMB300,000,000
Ltd.**@
瀋陽中匯達房地產	Registered and paid up	40%	Property development
有限公司**	capital US$149,400,000
Asset management and
other business
The Yangtze Ventures	1,000 ordinary shares of	65.5%	Venture capital	2
Limited #	HK$0.1 each		investments
The Yangtze Ventures II	1,000 ordinary shares of	75.4%	Venture capital	2
Limited #	HK$0.1 each		investments
On Capital China Fund	13,923 participating shares	66.8%	Venture capital	2
Series A #	of US$0.01 each		investments
On Capital China Fund	5,229 participating shares of	58.5%	Venture capital	2
Series B #	US$0.01 each		investments

Incorporated in the British Virgin Islands
** Registered and operated in other regions of the PRC
Incorporated in the Cayman Islands
@ Equity joint venture

Notes:

The Group is under contractual arrangements to jointly control these entities with PRC partners. Accordingly, the Directors consider they are jointly controlled entities.
The respective boards of directors of these entities are jointly controlled by the Group and other investors. Accordingly, the Directors consider they are jointly controlled entities.

— 134 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

48. PARTICULARS OF PRINCIPAL ASSOCIATES

The Directors are of the opinion that a complete list of the particulars of all associates will be of excessive length and therefore the following list contains only the particulars of principal associates of the Group at 31 December 2008.

		Effective
		percentage
		of issued
		share/registered
	Issued and paid up share	capital held by
Indirect associates	capital/ registered capital	the Group	Principal activities
Richcoast Group Limited*	780 shares of US$1 each	28.2%	Investment holding
Dalian Qiantong Science &	RMB800,000,000	22%	Software development
Technology Development Co.,
Ltd. **@
Dalian Ruisheng Software	RMB800,000,000	22%	Software development
Development Co., Ltd.**@
Dalian Delan Software	RMB300,000,000	22%	Software development
Development Co., Ltd.**@
Dalian Jiadao Science &	RMB300,000,000	22%	Software development
Technology Development Co.,
Ltd.**@
大連軟件園瑞安發展有限公司**	RMB600,000,000	22%	Software development
大連軟件園瑞安開發有限公司**	RMB600,000,000	22%	Software development
China Central Properties Limited^	281,193,011 shares of	42.88%	Investment holding
	GBP0.01 each
Dalian Shengyuan Real Estate	RMB50,000,000	42.88%	Investment holding
Consulting Co., Ltd.**
北京億達房地產開發有限公司**	RMB30,000,000	42.88%	Property development
Chengdu Shui On Huiyuan Property	USD6,000,000	42.88%	Property development
Co., Ltd.**
Chengdu Shui On Huida Property	RMB650,000,000	42.88%	Property development
Co., Ltd.**
Chongqing Fengde Land Limited**	USD40,000,000	42.88%	Investment holding
重慶豐德尊鼎實業有限公司**	RMB10,000,000	42.88%	Property development
重慶豐德南洋實業有限公司**	RMB10,000,000	42.88%	Property development

— 135 —

FINANCIAL INFORMATION ON THE SOCAM GROUP

APPENDIX II

		Effective
		percentage
		of issued
		share/registered
	Issued and paid up share	capital held by
Indirect associates	capital/ registered capital	the Group	Principal activities
重慶豐德豪門實業有限公司**	RMB10,000,000	42.88%	Property development
Chongqing Hui Zheng Properties	USD75,000,000	42.88%	Property development
Co., Ltd.**
Qingdao Zhongcheng Yinchu	HK$400,000,000	42.88%	Property development
Development Co., Ltd.**
Shengyang Hua Hui Properties Co.	USD40,000,000	30.02%	Property development
Ltd.**

Incorporated in the British Virgin Islands
** Registered and operated in other regions of the PRC
^ Incorporated in Isle of Man
@ Equity joint venture

— 136 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

The following is the text of a report on CCP prepared by Deloitte Touche Tohmatsu in its capacity as reporting accountants appointed by SOCAM, for the purpose of inclusion in this circular.

==> picture [75 x 58] intentionally omitted <==

==> picture [81 x 35] intentionally omitted <==

14 May 2009

The Directors

Shui On Construction and Materials Limited

Dear Sirs,

We set out below our report on the financial information regarding China Central Properties Limited (the “Company” or “CCP”) and its subsidiaries (hereinafter collectively referred to as the “Group”) including the consolidated income statements, the consolidated statements of changes in equity and the consolidated cash flow statements for the period from 9 February 2007 (date of incorporation) to 31 December 2007 and for the year ended 31 December 2008 (the “Relevant Periods”) and the consolidated and the Company’s balance sheets as at 31 December 2007 and 2008 and the notes thereto (the “Financial Information”) for inclusion in the circular (the “Circular”) of Shui On Construction and Materials Limited (“SOCAM”) to be dated 15 May 2009 in connection with the proposed acquisition by SOCAM of the entire issued shares of the Company not already owned by SOCAM.

The Company is a limited liability company incorporated in Isle of Man on 9 February 2007 with its shares listed on the Alternative Investment Market of the London Stock Exchange (“AIM”). On 12 April 2007, the Company entered into several asset injection agreements, pursuant to which China Central Properties (BVI) Limited, a wholly-owned subsidiary of the Company, agreed to acquire the entire equity interests in, and certain shareholders’ loans to, property holding companies which have five distressed property development projects in the People’s Republic of China (the “PRC”) (collectively named as “Contributing Projects”) for a consideration which was settled by the issue of 119,004,000 ordinary shares in the Company on 13 June 2007 upon the admission to AIM (the “Acquisition”). Pursuant to the Acquisition, the Company became the holding company of the Group.

At the date of this report, the Company had direct and indirect interests in the principal subsidiaries and jointly controlled entities as set out in notes 39 and 15, respectively.

We have acted as the auditor of the Company throughout the Relevant Periods. We have examined the audited consolidated financial statements of the Company prepared in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (the “IASB”) for the Relevant Periods, (hereinafter collectively referred to as the “Underlying Financial Statements”), in accordance with the Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

— 137 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

The Financial Information of the Company for the Relevant Periods set out in this report has been prepared from the Underlying Financial Statements. No adjustments were deemed necessary by us to the Underlying Financial Statements in preparing our report for inclusion in the Circular.

The preparation of the Underlying Financial Statements is the responsibility of the Directors of the Company who approved their issue. The directors of SOCAM 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 Financial Statements, to form an opinion on the Financial Information and to report our opinion to you.

In our opinion, the Financial Information gives, for the purpose of this report, a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2007 and 2008, and of the profit and cash flows of the Group for the Relevant Periods.

— 138 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

A. FINANCIAL INFORMATION

Consolidated income statements

NOTES
Turnover
5
Cost of sales
Gross profit
Gain on disposal of properties interests
34
Other income
Investment management fee to a related company
35
Other operating expenses
Finance costs
6
Changes in fair value of derivative financial
instruments
7
Share of (loss) profit of jointly controlled entities
Gain on re-purchase of own convertible bonds
Profit before taxation
8
Income tax expense
9
Profit for the year/period
Dividend
11
Earnings per share:
12
Basic
Diluted

Year ended
31 December
From
9 February 2007
(date of
incorporation)
to 31 December
2008
2007
USD’000
USD’000
326,183
63,046
(292,187)
(57,687)
33,996
5,359
42,276
—
15,118
10,293
(12,832)
(3,386)
(27,977)
(13,345)
(26,005)
(21,520)
1,932
31,398
(2,536)
956
2,491
—
26,463
9,755
(10,771)
(6,099)
15,692
3,656
5,185
—
US5.37 cents
US1.99 cents
US5.37 cents
US0.38 cents

— 139 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

Consolidated balance sheets

		As at 31	December
	NOTES	2008	2007
		USD’000	USD’000
Non-current Assets
Properties interests	13	—	204,283
Interests in jointly controlled entities	15	29,211	984
Amounts due from jointly controlled entities	16	99,446	—
Property, plant and equipment	17	2,722	1,488
Deposits for acquisition of properties companies	18	—	104,505
Pledged bank deposits	25	4,390	—
Other non-current assets		—	237
		135,769	311,497
Current Assets
Properties held for sale	19	9,789	170,042
Properties under development for sale	19	395,356	285,261
Foreign exchange forward contracts	20	—	14,835
Amounts due from related companies	22	3,519	12,974
Amounts due from jointly controlled entities	16	32,292	28,539
Loan to a related company	23	14,631	—
Trade and other receivables	24	115,146	28,677
Pledged bank deposits	25	—	128,592
Bank balances and cash	25	255,019	110,957
		825,752	779,877
Total Assets		961,521	1,091,374
Capital and Reserves
Share capital	26	5,557	5,901
Share premium		569,749	569,749
Reserves		63,354	27,004
Total Equity		638,660	602,654

— 140 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

		As at 31	December
	NOTES	2008	2007
		USD’000	USD’000
Non-current Liabilities
Convertible bonds	28	169,427	173,221
Bank borrowings due after one year	29	29,263	66,397
Other non-current liabilities		428	—
		199,118	239,618
Current Liabilities
Trade and other payables	30	42,124	57,360
Foreign exchange forward contract	20	5,699	—
Embedded derivatives in the convertible bonds	28	11,479	16,624
Bank borrowings due within one year	29	33,549	147,852
Loans from related companies	31	5,750	19,513
Amounts due to jointly controlled entities	16	13,705	—
Amounts due to related companies	22	2,371	4,816
Taxation payable		9,066	2,937
		123,743	249,102
Total Liabilities		322,861	488,720
Total Equity and Liabilities		961,521	1,091,374

— 141 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

Balance sheets of the Company

		As at 31	December
	NOTES	2008	2007
		USD’000	USD’000
Non-current Assets
Interest in a subsidiary	14	97,376	—
Property, plant and equipment	17	407	631
Deposits for acquisition of properties companies	18	—	25,000
Amount due from a subsidiary	21	407,978	—
Other non-current assets		—	237
		505,761	25,868
Current Assets
Foreign exchange forward contracts	20	—	14,835
Amounts due from subsidiaries	21	103,932	685,580
Amounts due from related companies	22	10,939	220
Amount due from a jointly controlled entity of a subsidiary	16	—	28,539
Other receivables	24	509	96
Bank balances and cash	25	225,772	33,900
		341,152	763,170
Total Assets		846,913	789,038
Capital and Reserves
Share capital	26	5,557	5,901
Share premium	27	569,749	569,749
Reserves	27	50,187	22,197
Total Equity		625,493	597,847

— 142 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

		As at 31	December
	NOTES	2008	2007
		USD’000	USD’000
Non-current Liabilities
Convertible bonds	28	169,427	173,221
Other non-current liabilities		428	—
		169,855	173,221
Current Liabilities
Other payables	30	838	951
Foreign exchange forward contract	20	5,699	—
Embedded derivatives in the convertible bonds	28	11,479	16,624
Bank borrowings due within one year	29	33,549	—
Amounts due to related companies	22	—	395
		51,565	17,970
Total Liabilities		221,420	191,191
Total Equity and Liabilities		846,913	789,038

— 143 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Consolidated statements of changes in equity

At 9 February 2007 Issue of shares for cash (Note 26 (i) & (iii)) Issue of shares for the acquisition of Contributing Projects (Note 26 (ii)) Transaction costs attributable to issue of new shares Exchange differences arising on translation of financial statements from functional currency to presentation currency recognised directly in equity Profit for the period Total recognised income for the period At 31 December 2007 Exchange differences arising on translation of financial statements from functional currency to presentation currency recognised directly in equity Profit for the year Total recognised income for the year Re-purchase of own shares (Note 26(iv)) Dividend paid At 31 December 2008	Share capital USD’000 — 3,552 2,349 — 5,901 — — — 5,901 — — — (344) — 5,557	Share premium Capital redemption reserve Translation reserve USD’000 USD’000 USD’000 — — — 351,651 — — 232,523 — — (14,425) — — 569,749 — — — — 23,348 — — — — — 23,348 569,749 — 23,348 — — 40,303 — — — — — 40,303 — (14,460) — — — — 569,749 (14,460) 63,651	Retained profit USD’000 — — — — — — 3,656 3,656 3,656 — 15,692 15,692 — (5,185) 14,163	Total equity USD’000 — 355,203 234,872 (14,425) 575,650 23,348 3,656 27,004 602,654 40,303 15,692 55,995 (14,804) (5,185) 638,660

— 144 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

Consolidated cash flow statements

			From
			9 February 2007
			(date of
		Year ended	incorporation)
		31 December	to 31 December
	NOTES	2008	2007
		USD’000	USD’000
Operating Activities
Profit before taxation		26,463	9,755
Adjustments for:
Gain on disposal of properties interests		(42,276)	—
Finance costs		26,005	21,520
Changes in fair value of derivative financial
instruments		(1,932)	(31,398)
Gain on re-purchase of own convertible bonds		(2,491)	—
Imputed interest income on amounts due from
jointly controlled entities		(6,261)	—
Share of loss (profit) of jointly controlled entities		2,536	(956)
Loss on disposal of property, plant and equipment		143	—
Depreciation		487	136
Write-down of properties held for sale		4,985	—
Bank interest income		(5,961)	(9,478)
Expenses on issue of derivative financial
instruments		—	749
Operating cash flows before movements in working
capital		1,698	(9,672)
Decrease (increase) in properties held for sale		267,523	(26,636)
Increase in properties under development for sale		(40,853)	(2,980)
Increase in trade and other receivables		(35,505)	(12,266)
Decrease in sales deposits received		—	(20,680)
Decrease in trade and other payables		(17,242)	(14,573)
Decrease (increase) in other non-current assets		253	(237)
Increase in other non-current liabilities		428	—
Cash from (used in) operations		176,302	(87,044)
People’s Republic of China (“PRC”) income tax paid		(4,841)	(2,181)
Net Cash From (Used In) Operating Activities		171,461	(89,225)

— 145 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

				From
				9 February 2007
				(date of
			Year ended	incorporation)
			31 December	to 31 December
		NOTES	2008	2007
			USD’000	USD’000
Investing Activities
Additions to properties interests			(13,735)	(41,308)
Proceeds from disposal of properties interests			126,989	—
Additions to property, plant and equipment			(2,003)	(1,173)
Deposits paid for acquisition of properties companies			—	(103,489)
Loan to a related company			(14,631)	—
Advances to jointly controlled entities			(85,601)	(28,539)
Repayment from (advances to) related companies			10,212	(657)
Decrease (increase) in pledged bank deposits			88,237	(75,712)
Interest received			5,961	9,478
Receipt from foreign exchange forward contracts			19,355	744
Acquisition of subsidiaries	33(a)(b)(d)		(62,560)	(22,888)
Cash acquired from the acquisition of Contributing
Projects		33(c)	—	29,988
Temporary payment for acquisition of subsidiaries		33(d)	—	(12,819)
Net Cash From (Used In) Investing Activities			72,224	(246,375)
Financing Activities
Interest paid			(12,268)	(17,430)
Dividend paid			(5,185)	—
Proceeds from issue of shares			—	355,203
Transaction costs of issue of new shares			—	(14,425)
Proceeds from new bank borrowings raised			103,294	141,047
Repayment of bank borrowings			(133,101)	(149,821)
Proceeds from issue of convertible bonds			—	200,000
Expenses on issue of convertible bonds			—	(6,129)
Re-purchase for own shares			(14,804)	—
Re-purchase for own convertible bonds			(22,916)	—
Net repayment to related companies			(17,647)	(64,825)
Net Cash (Used In) From Financing Activities			(102,627)	443,620
Net Increase In Cash And Cash Equivalents			141,058	108,020
Cash And Cash Equivalents At The Beginning Of
The Year/Period			110,957	—
Effect Of Foreign Exchange Rate Changes			3,004	2,937
Cash And Cash Equivalents At The End Of The
Year/Period
Bank balances and cash			255,019	110,957

— 146 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

NOTES TO THE FINANCIAL INFORMATION

1. BASIS OF PRESENTATION

The Financial Information is presented in the currency of the United States (“US Dollars” or “USD”), which is different from the functional currency of the Company and other group entities, i.e. Renminbi (“RMB”). The Group’s management has elected to use USD as the presentation currency as they believe USD is the appropriate presentation currency for the international users of the Group’s Financial Information.

2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Group has adopted, for the period ended 31 December 2007 and year ended 31 December 2008, all of the new and revised standards (“IAS”), International Financial Reporting Standards (“IFRS”), amendments issued by International Accounting Standards Board (“IASB”) and the interpretations developed by International Financial Reporting Interpretations Committee (“IFRIC”), which are effective for each of the Group’s financial period/year beginning on 9 February 2007 (date of incorporation) and 1 January 2008 respectively.

The adoption of these new and revised standards, amendments and interpretations had no material effect on the results and financial position of the Group for the Relevant Periods. Accordingly, no prior period adjustment has been required.

The Group has not early applied the following new and revised standards, amendments and interpretations that have been issued but are not yet effective.

IFRSs (Amendments)	Improvements to IFRSs May 20081
IFRSs (Amendments)	Improvements to IFRSs April 20092
IAS 1 (Revised)	Presentation of Financial Statements3
IAS 23 (Revised)	Borrowing Costs3
IAS 27 (Revised)	Consolidated and Separate Financial Statements4
IAS 32 & 1 (Amendments)	Puttable Financial Instruments and Obligations Arising on Liquidation3
IAS 39 (Amendment)	Eligible Hedged Items4
IFRS 1 & IAS 27 (Amendments)	Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate3
IFRS 2 (Amendment)	Vesting Conditions and Cancellations3
IFRS 3 (Revised)	Business Combinations4
IFRS 7 (Amendment)	Improving Disclosures about Financial Instruments3
IFRS 8	Operating Segments3
IFRIC 9 & IAS 39 (Amendments)	Embedded Derivatives5
IFRIC 13	Customer Loyalty Programmes6
IFRIC 15	Agreements for the Construction of Real Estate3
IFRIC 16	Hedges of a Net Investment in a Foreign Operation7
IFRIC 17	Distributions of Non-cash Assets to Owners4
IFRIC 18	Transfers of Assets from Customers8

1 Effective for annual periods beginning on or after 1 January 2009 except the amendments to IFRS 5, which is effective for annual periods beginning on or after 1 July 2009
2 Effective for annual periods beginning on or after 1 January, 2009, 1 July 2009 and 1 January 2010, as appropriate 3 Effective for annual periods beginning on or after 1 January 2009
4 Effective for annual periods beginning on or after 1 July 2009
5 Effective for annual periods ending on or after 30 June 2009
6 Effective for annual periods beginning on or after 1 July 2008
7 Effective for annual periods beginning on or after 1 October 2008
8 Effective for transfers on or after 1 July 2009

— 147 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

The Directors of the Company anticipate that the application of these standards, amendments or interpretations will have no material impact on the results and financial position of the Group except for the adoption of IFRS 3 (Revised), IAS 27 (Revised) and IFRIC 15. The adoption of IAS 1 (Revised) results in change in a presentation of primary statements of financial statements and IFRS 8 results in a change in basis of reporting of segment information. The adoption of IFRS 3 (Revised) may affect the accounting for business combination for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. IAS 27 (Revised) will affect the accounting treatment for changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control, which will be accounted for as equity transactions. IFRIC 15 may affect the timing of the revenue recognition on the sales of properties until all criteria in paragraph 14 of IAS 18 are satisfied. The Directors of the Company are in the process of assessing the impact of the application of these standards, amendments and interpretations on the results and the financial position of the Group.

3. SIGNIFICANT ACCOUNTING POLICIES

The Financial Information has been prepared on the historical basis except for certain financial instruments which are measured at fair values as explained in the accounting policies set out below.

The Financial Information has been prepared in accordance with the accounting policies set out below which conform with International Financial Reporting Standards issued by the IASB, which are not materially different from Hong Kong Financial Reporting Standards, and the accounting policies adopted by SOCAM. In addition, the Financial Information includes applicable disclosure required by the Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited.

Basis of consolidation

The Financial Information incorporates the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

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

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

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

Investment in a subsidiary

A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Investment in a subsidiary is included in the Company’s balance sheet at cost less any identified impairment loss. The result of the subsidiary is accounted for by the Company on the basis of dividend received and receivable during the year.

Jointly controlled entities

Joint venture arrangements that involve the establishment of a separate entity in which venturers have joint control over the economic activity of the entity are referred to as jointly controlled entities.

The results and assets and liabilities of jointly controlled entities are incorporated in the Financial Information using the equity method of accounting. Under the equity method, investments in jointly controlled entities are carried

— 148 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the jointly controlled entities, less any identified impairment loss. When the Group’s share of losses of a jointly controlled entity equals or exceeds its interest in that jointly controlled entity (which includes any long-term interests that, in substance, form part of the Group’s net investment in the jointly controlled entity), the Group discontinues recognising its share of further losses. An additional share of losses is provided for and a liability is recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of that jointly controlled entity.

When a group entity transacts with a jointly controlled entity of the Group, profits or losses are eliminated to the extent of the Group’s interest in the jointly controlled entity.

Revenue recognition

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

Revenue from sale of properties in the ordinary course of business is recognised when all of the following criteria are met:

the significant risks and rewards of ownership of the properties are transferred to buyers;
neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the properties are retained;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Payments received from purchasers prior to this stage are recorded as sales deposits received under current liabilities.

Rental income from operating lease is recognised in the consolidated income statement on a straight-line basis over the term of the relevant lease.

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

Properties held for sale

Properties held for sale are stated at the lower of cost and net realisable value. Cost comprises property interest in leasehold land and development costs including attributable borrowings costs and charges capitalised during the development period that have been incurred in bringing the properties held for sale to their present location and condition. Net realisable value represents the estimated selling price less all anticipated costs of completion and costs to be incurred in marketing, selling and distribution.

— 149 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Properties under development for sale

Properties under development which are intended to be properties held for sale are measured at the lower of cost and net realisable value. Cost includes purchase price, construction costs, borrowing costs capitalised and other direct development expenditure. These assets are recorded as current assets as they are expected to be realised in, or are intended for sale within the Group’s normal operating cycle. Upon completion, the assets are reclassified as properties held for sale.

Properties interests

Properties interests identified as investment property are recorded at cost until development and construction is completed, at which time, the property is accounted for in accordance with the Group’s investment property policy. Cost also includes purchase price, construction costs, borrowing costs capitalised and other direct development expenditure.

Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation.

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

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

Property, plant and equipment

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

Depreciation is charged using the straight-line method to write off the cost of assets to their residual value, if any, over their estimated useful lives. Both the useful life of an asset and its residual value, if any, are reviewed annually.

Impairment of tangible assets

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

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

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

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 added to 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.

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

Retirement benefit costs

Payments to state-managed retirement benefit schemes/the Mandatory Provident Fund Scheme are charged as an expense when employees have rendered their services.

Taxation

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

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

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

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

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 at the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

— 151 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Leasing

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

Foreign currencies

The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). The functional currency of the Company and its subsidiaries is RMB. For the purpose of the Financial Information, the results and financial position of each entity are expressed in USD, which is the presentation currency for the Financial Information.

In preparing the financial statements of the individual group entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded in its functional currency at the rates of exchange prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are recognised in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting the Financial Information, the assets and liabilities of the Group’s operations are expressed in USD using exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised in profit or loss in the period in which the operation is disposed of.

Financial instruments

Financial assets and financial liabilities are recognised on the consolidated balance sheet when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset/liability and of allocating interest income/expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts/payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset/liability, or, where appropriate, a shorter period.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Interest income/expense is recognised on an effective interest basis for debt instruments other than those financial assets/liabilities at fair value through profit or loss, of which interest income/expense is included in net gains or losses.

Financial assets

The Group’s financial assets are classified into financial assets at fair value through profit or loss and loans and receivables. The accounting policies adopted in respect of each category of financial assets are set out below.

Financial assets at fair value through profit or loss

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

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. At each balance sheet date subsequent to initial recognition, loans and receivables (including pledged bank deposits, amounts due from subsidiaries, related companies, jointly controlled entities, loan to a related company, trade and other receivables and bank balances) are carried at amortised cost using the effective interest method, less any identified impairment loss (see accounting policy in respect of impairment loss on financial assets below).

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been impacted. Objective evidence of impairment could include:

significant financial difficulty of the issuer or counterparty; or
default or delinquency in interest or principal payments; or
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

Trade receivables, that are assessed not to be impaired individually, are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio, as well as observable changes in national or local economic conditions that correlate with default on receivables.

An impairment loss for loans and receivables is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

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APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables and amounts due from subsidiaries, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

Financial liabilities and equity

Financial liabilities and equity instruments issued by a group entity are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies adopted for the Group’s financial liabilities and equity instruments are set out below.

Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Convertible bonds

Convertible bonds issued by the Company contain a liability component and embedded derivative. The embedded derivatives consist of a conversion option, put option, and an early redemption option. The embedded derivatives which are not closely related to the host contract are separately recognised. At the date of issue, the liability component and embedded derivatives are recognised at fair value.

In subsequent periods, the liability component of the convertible bonds is carried at amortised cost using the effective interest method. The embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss.

Transaction costs that relate to the issue of the convertible bonds are allocated to the liability component and the embedded derivative in proportion to the allocation of the proceeds. Transaction costs relating to the embedded derivative are charged to profit or loss immediately. Transaction costs relating to the liability component are included in the carrying amount of the liability portion and amortised over the period of the convertible loan notes using the effective interest method.

Other financial liabilities

Other financial liabilities, including trade and other payables, loans from related companies, amounts due to jointly controlled entities and related companies and bank borrowings, are subsequently measured at amortised cost using the effective interest method.

Equity instruments

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

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Derivatives

Derivatives (including foreign exchange forward contracts and embedded derivatives which are separated from non-derivatives host contracts) that do not qualify for hedge accounting are deemed as financial assets/financial liabilities held for trading and are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. The resulting gain or loss is recognised in profit or loss immediately.

Derecognition

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the process of applying the Group’s accounting policies, which are described in note 3, the Directors of the Company have made the following judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The key assumptions concerning the future 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.

Estimated allowances for bad and doubtful debts

The Group makes allowances for bad and doubtful debts when there is objective evidence that debtors balances are impaired. The balances of the debtors are based on the present value of estimated future cash flows discounted at the effective rate computed at initial recognition. The Directors exercised a considerable amount of judgement in assessing the ultimate realisation of these receivables including the current creditworthiness and the past collection history of each customer. If the financial credit of customers of the Group were to deteriorate, resulting in an impairment of their activity to make payments and therefore affect the estimated future cash flow, additional allowance may be required.

Convertible bonds

The Group’s convertible bonds contain a number of embedded derivatives that are remeasured to fair value at subsequent reporting dates. The Company engaged an independent appraiser to assist it in determining the fair value of these embedded derivatives. The determination of fair value was made after consideration of a number of factors, including: the Group’s financial and operating results; the current condition of the economy and property market in the PRC; the likelihood of non-occurrence of Qualified Public Offering (“QPO”) by the Non-QPO put option date; and market yields and return volatility of comparable corporate bonds. In relying on the valuation report, the Directors of the Company have exercised their judgement and are satisfied that the assumptions used in the valuation are reflective of the current market conditions. Changes to these assumptions would result in changes in the fair values of these embedded derivatives and the corresponding adjustments to the amount of gain or loss reported in the income statement.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Land appreciation tax

The Group is subject to land appreciation tax in the PRC. However, the implementation and settlement of the tax varies amongst different tax jurisdictions in various cities of the PRC and the Group has not finalised its land appreciation tax calculation and payments with any local tax authorities in the PRC. Accordingly, significant judgment is required in determining the amount of the land appreciation and its related income tax provisions. The Group recognised the land appreciation tax based on management’s best estimates. The final tax outcome could be different from the amounts that were initially recorded, and these differences will impact the income tax expense and the related income tax provisions in the periods in which such tax is finalised with local tax authorities.

5. TURNOVER AND SEGMENTAL INFORMATION

The Group’s turnover for the period/year represents income from sale of developed properties.

During the year ended 31 December 2008, the Group disposed of its properties interests, namely Beijing Huapu Centre, of which details are set out in note 34. The proceeds from the disposal has not been presented as turnover as the property was intended to be developed for future use as investment property and therefore was classified as non-current asset in the balance sheet as at 31 December 2007. The property was accounted for in accordance with IAS 16 “Property, Plant and Equipment” until construction or development was complete. According to IAS 1 “Presentation of Financial Statements”, gains and losses arising from the disposal of non-current assets are determined as the difference between the proceeds on disposal, net of any related selling expenses, and the carrying amount of the assets. Accordingly, the net result of disposal of Beijing Huapu Centre is shown separately in the consolidated income statement.

No information of segment revenue, segment results, segment assets or segment liabilities for business segments or geographical segments has been presented as the management considers the Group has only one segment which is development of partially-completed properties in the PRC. Accordingly, no segment results, assets or liabilities are presented.

6. FINANCE COSTS

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Interest on bank borrowings	6,741	6,620
Interest on loans from related companies	1,345	1,371
Amortised interest expense on convertible bonds (Note 28)	23,255	13,044
Other finance costs	505	7,439
	31,846	28,474
Less: amount capitalised to properties under development	(5,841)	(6,954)
	26,005	21,520

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

7. CHANGES IN FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Changes in fair value of:
- Embedded derivatives in relation to convertible bonds issued (Note 28)	3,111	15,819
- Foreign exchange forward contracts
Realised	4,520	744
Unrealised (Note 20)	(5,699)	14,835
	1,932	31,398

8. PROFIT BEFORE TAXATION

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Profit before taxation has been arrived at after charging (crediting):
Cost of properties sold	292,187	57,687
Depreciation for property, plant and equipment	728	233
Less: amount capitalised to properties under development	(241)	(97)
	487	136
Net foreign exchange loss	12,214	6,093
Staff costs:
Directors’ emoluments
Directors’ emoluments excluding retirement benefits costs	1,085	565
Retirement benefit costs	22	17
	1,107	582

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APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Other staff costs
Other staff costs excluding retirement benefit costs	2,303	705
Retirement benefit costs	210	57
Total other staff costs	2,513	762
Less: amount capitalised to properties under development	(1,069)	(459)
	1,444	303
	2,551	885
Loss on disposal of property, plant and equipment	143	—
Bank interest income	(5,961)	(9,478)
Imputed interest income on amounts due from jointly controlled entities	(6,261)	—

9. INCOME TAX EXPENSE

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Current tax
- PRC Enterprise Income Tax
- Current year	5,702	4,407
- Overprovision in prior year	(634)	—
- Land appreciation tax	5,703	1,692
	10,771	6,099

Entities established in the PRC are subject to the PRC Enterprise Income Tax rate of 25% (2007: 33%) of the assessable profits for the year/period.

— 158 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

Land appreciation tax is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds from sales of properties less deductible expenditures including amortisation of land use rights, borrowing costs, business taxes and all property development expenditures. The tax is incurred upon transfer of property ownership.

No provision for taxation in other jurisdictions has been made as, in the opinion of the Directors of the Company, the income of the Group neither arises in, nor is derived from, other jurisdictions.

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

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Profit before taxation	26,463	9,755
PRC Enterprise Income Tax at 25% (2007: 33%)	6,616	3,219
Tax effect of share of loss (profit) of jointly controlled entities	634	(315)
Tax effect of expenses not deductible for tax purposes	17,018	14,466
Tax effect of income not taxable	(17,360)	(13,052)
Land appreciation tax	5,703	1,692
Tax effect of land appreciation tax	(1,426)	(558)
Tax effect of tax losses not recognised	757	905
Overprovision of taxation in prior year	(634)	—
Utilisation of tax losses previously not recognised	(615)	—
Others	78	(258)
Tax charge for the year/period	10,771	6,099

At the balance sheet date, the Group has unused tax losses of USD4,016,000 (2007: USD6,130,000) available for offset against future profits that may be carried forward for 5 years. No deferred tax asset has been recognised in respect of the tax losses as it is not probable that taxable profit will be available due to unpredictability of future taxable profit streams.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

10. DIRECTORS’ EMOLUMENTS

The emoluments paid or payable to the Directors of the Company were as follows:

Name of Directors *Non-Executive Chairman* Mr. Vincent H.S. Lo *Non-Executive Director* Mr. Frankie Y.L. Wong *Executive Directors* Mr. David W.K. Wong (Note) Mr. Raymond F.L. Wong *Independent Non-Executive Directors* Mr. David Eldon Mr. Nicholas Brooke Mr. Kay-Cheung Chan Mr. Alexander R. Hamilton Mr. Moses K.T. Tsang		Year ended 31 December 2008
		Fees Salaries and other benefits Retirement benefit costs USD’000 USD’000 USD’000 5 — — 1 — — 1 448 15 1 465 7 32 — — 32 — — 39 — — 32 — — 29 — — 172 913 22	Total USD’000 5 1 464 473 32 32 39 32 29
			1,107

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APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

Name of Directors *Non-Executive Chairman* Mr. Vincent H.S. Lo *Non-Executive Director* Mr. Frankie Y.L. Wong *Executive Directors* Mr. David W.K. Wong (Note) Mr. Raymond F.L. Wong *Independent Non-Executive Directors* Mr. David Eldon Mr. Nicholas Brooke Mr. Kay-Cheung Chan Mr. Alexander R. Hamilton Mr. Moses K.T. Tsang		From 9 February 2007 (date of incorporation) to 31 December 2007	From 9 February 2007 (date of incorporation) to 31 December 2007
		Fees Salaries and other benefits Retirement benefit costs USD’000 USD’000 USD’000 3 — — 1 — — 1 220 10 1 222 7 23 — — 23 — — 27 — — 23 — — 21 — — 123 442 17	Total USD’000 3 1 231 230 23 23 27 23 21
			582

Note:

Mr. David W.K. Wong resigned as an executive director effective from 1 November 2008.

11. DIVIDEND

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Dividend recognised as distributions during the year/period:
Interim, paid - 1.0 pence (approximately US1.8 cents) (2007: Nil)	5,185	—

A final dividend of 0.5 pence (approximately US0.7 cent) per share (2007: Nil) was approved by the Directors of the Company on 2 April 2009.

— 161 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

12. EARNINGS PER SHARE

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

		From 9 February
		2007 (date of
	Year ended	incorporation) to
	31 December	31 December
	2008	2007
	USD’000	USD’000
Earnings
Earnings for the purposes of basic earnings per share	15,692	3,656
Effect of dilutive potential ordinary shares for convertible bonds issued:
Amortised interest expenses on convertible bonds (Note)	—	13,044
Fair value change on embedded derivatives in relation to convertible bonds
issued (Note)	—	(15,819)
Gain on re-purchase of own convertible bonds (Note)	—	—
Earnings for the purposes of diluted earnings per share	15,692	881
	’000	’000
Number of shares
Weighted average number of ordinary shares for the
purposes of basic earnings per share	292,426	183,979
Effect of dilutive potential ordinary shares for convertible bonds (Note)	—	46,620
Weighted average number of ordinary shares for the
purposes of diluted earnings per share	292,426	230,599

Note: The computation of diluted earnings per share for the year ended 31 December 2008 did not assume the conversion of the Company’s outstanding convertible bonds since their exercise would result in an increase in earnings per share.

— 162 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

13. PROPERTIES INTERESTS

Prior to the acquisition of the Contributing Projects, a company owning one of the Contributing Projects had entered into several pre-sale contracts with a vendor to acquire its properties interests in Beijing Huapu Centre. Pursuant to the supplemental pre-sale contract entered into between the property holding company and the vendor, the vendor is entitled to receive additional consideration at different stages based on the sale price of the properties interests of the property holding company less certain adjustments (“Contingent Consideration”).

At 31 December 2007, the risks and rewards of the properties interests have been transferred to the Group, notwithstanding the land use rights of the properties interests have not yet been transferred to the Group.

During the year ended 31 December 2008, the properties interests were disposed of to a third party. In the opinion of the Directors, in accordance with the pre-sale contracts entered into by the property holding company, the Group is not subject to the payment of Contingent Consideration as the disposal of properties interests is made through the disposal of equity interests in the company which holds the property interests as opposed to direct disposal of the properties interests.

14. INTEREST IN A SUBSIDIARY

							As at 31	December
							2008	2007
							USD’000	USD’000
Cost	of	unlisted	investment	in	a	subsidiary	97,376	—

Cost of investment in a subsidiary represents investment cost of USD1 in China Central Properties (BVI) Limited and an amount of USD97,376,000 (2007: Nil) which represents deemed contribution arising from fair value adjustment on interest free loans advanced to the subsidiary (details as set out in note 21).

15. INTERESTS IN JOINTLY CONTROLLED ENTITIES

Cost of unlisted investments in jointly controlled entities (Note a) Exchange realignment Share of post-acquisition (losses) profits	As at 31 December 2008 2007 USD’000 USD’000 30,656 — 135 28 (1,580) 956 29,211 984	As at 31 December 2008 2007 USD’000 USD’000 30,656 — 135 28 (1,580) 956 29,211 984
		984

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

The Group had interests in the following jointly controlled entities:

			Proportion of	Proportion of
	Place of		nominal value of
	incorporation/		issued capital/
	registration	Class of	registered capital
Name of entity	and operation	share held	held by the Group			Principal activity
			2008	2007
Honest Joy Investments Limited	British Virgin	Ordinary	70%	70%		Investment holding
(“Honest Joy”)	Islands (“BVI”)		(note b)	_(note _	b)
Pacific Hill Limited	Hong Kong	Ordinary	70%	70%		Investment holding
			(note b)	_(note _	b)
Shenyang Hua Hui Properties Co., Ltd.	PRC	Registered	70%	70%		Property development
		capital	(note b)	_(note _	b)
Broad Wise Limited	BVI	Ordinary	40%		—	Investment holding
(“Broad Wise”)			(note c)
Loyal Max Investments Limited	Hong Kong	Ordinary	40%		—	Investment holding
			(note c)
瀋陽中滙達房地產有限公司	PRC	Registered	40%		—	Property development
Shenyang Zhong Hui Da		capital	(note c)
Properties Co., Ltd.
Mountain Snow (Barbados) SRL	Barbados	Common	50%	100%		Investment holding
(“Mountain Snow”)		quotas		_(note _	d)
Chengdu Shui On Huiyuan Property	PRC	Registered	50%	100%		Property development
Co., Ltd.		capital		_(note _	d)
Gracious Spring Limited	BVI	Ordinary	50%	100%		Investment holding
(“Gracious Spring”)				_(note _	d)
Giroverse Corporation	BVI	Ordinary	50%		—	Investment holding
Lancewood Enterprises Limited	Hong Kong	Ordinary	50%		—	Investment holding
Shorewood Investments Limited	Hong Kong	Ordinary	50%	100%		Investment holding
				_(note _	d)
Chengdu Xianglong Real Estate	PRC	Registered	24.5%		—	Property development
Co., Ltd. (formerly known as		capital
Orient Home Chengdu Jinniu
Zhiye Co., Ltd.)

Notes:

(a) Included in cost of investment at 31 December 2008 is an amount of USD30,656,000 which represents deemed contribution arising from fair value adjustment on interest free loans advanced to jointly controlled entities (details as set out in note 16).

Included in cost of investment is an amount of USD211 (2007: USD70) which represents investment cost in jointly controlled entities.

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APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

(b) Honest Joy holds 100% equity interests in Pacific Hill Limited which in turn holds Shenyang Hua Hui Properties Co., Ltd. Pursuant to the terms stipulated under the shareholders deed relating to Honest Joy, significant financial and operating decisions require approval by the holders of at least 75% of the shares outstanding and entitled to vote at the meetings of the shareholders. As neither the Group nor the other joint venture partner has the ability to control over these companies, the Group accounts for these investments as jointly controlled entities.

Subsequent to the year ended 31 December 2008, the Group purchased the remaining 30% equity interest in Honest Joy from a joint venture partner, details of which are set out in note 41(i) to the Financial Information.

(c) Broad Wise holds 100% equity interests in Loyal Max Investments Limited which in turn holds Shenyang Zhong Hui Da Properties Co., Ltd. Pursuant to the terms stipulated under the shareholders deed relating to Broad Wise, significant financial and operating decisions require approval by the holders of at least 85% of the shares outstanding and entitled to vote at the meetings of the shareholders. As neither the Group nor the other joint venture partners has the ability to control over these companies, the Group accounts for these investments as jointly controlled entities.
(d) These companies were inactive subsidiaries of the Group during the period ended 31 December 2007. During the year ended 31 December 2008, a subsidiary of a shareholder of the Company injected share capital of USD100 into Mountain Snow and share capital of USD1 into Gracious Spring. Accordingly, the Group’s equity interest in Mountain Snow and Gracious Spring decreased from 100% to 50%, and these companies and their subsidiaries became jointly controlled entities of the Group.

The summarised financial information in respect of the Group’s effective interest in the jointly controlled entities which are accounted for using the equity method is set out below:

Current assets Non-current assets Current liabilities Non-current liabilities Income Expenses	As at 31 December 2008 2007 USD’000 USD’000 117,863 29,518 40,574 84 (29,780) (28,618) (99,446) — 4,479 1,012 (7,015) (56)	As at 31 December 2008 2007 USD’000 USD’000 117,863 29,518 40,574 84 (29,780) (28,618) (99,446) — 4,479 1,012 (7,015) (56)
		84
		(28,618)
		—
		1,012
		(56)

16. AMOUNTS DUE FROM/TO JOINTLY CONTROLLED ENTITIES

THE GROUP

At 31 December 2008, amounts due from jointly controlled entities of principal amounts of approximately USD123,841,000 (2007: Nil) are unsecured, non-interest bearing and not planned to be settled within twelve months from the balance sheet date, accordingly, the balances are classified as non-current. On application of IAS 39 “Financial

— 165 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Instruments — Recognition and Measurement”, the fair values of these amounts are determined based on effective interest rate of 7% (2007: Nil) per annum on initial recognition. The difference between the principal amounts of the advances and their fair values, determined on initial recognition amounting to approximately USD30,656,000 (2007: Nil), has been included in the investment costs in jointly controlled entities as deemed contribution to the jointly controlled entities.

Amounts due from jointly controlled entities classified as current asset are unsecured, non-interest bearing and repayable on demand.

Amounts due to jointly controlled entities are unsecured, non-interest bearing and repayable on demand.

THE COMPANY

As at 31 December 2007, amount due from a jointly controlled entity of a subsidiary classified as current asset is unsecured, non-interest bearing and repayable on demand.

17. PROPERTY, PLANT AND EQUIPMENT

Leasehold improvements USD’000 THE GROUP COST Acquisition during the period and at 31 December 2007 329 Additions 923 Disposals — Exchange realignment 23 At 31 December 2008 1,275 DEPRECIATION Charge for the period and at 31 December 2007 53 Charge for the year 183 Disposals — Exchange realignment 4 At 31 December 2008 240 CARRYING AMOUNTS At 31 December 2008 1,035 At 31 December 2007 276	Motor vehicles Furniture, fixtures and office equipment Computer equipment USD’000 USD’000 USD’000 397 281 714 270 406 404 (43) (53) (85) 27 19 49 651 653 1,082 46 22 112 114 88 343 (11) (11) (16) 3 1 8 152 100 447 499 553 635 351 259 602	Total USD’000 1,721 2,003 (181) 118
		3,661
		233 728 (38) 16
		939
		2,722
		1,488

— 166 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

Leasehold improvements USD’000 THE COMPANY COST Acquisition during the period and at 31 December 2007 140 Additions — Exchange realignment 10 At 31 December 2008 150 DEPRECIATION Charge for the period and at 31 December 2007 23 Charge for the year 46 Exchange realignment 2 At 31 December 2008 71 CARRYING AMOUNTS At 31 December 2008 79 At 31 December 2007 117	Motor vehicles Furniture, fixtures and office equipment Computer equipment USD’000 USD’000 USD’000 64 41 516 — — 80 4 3 36 68 44 632 9 5 93 16 10 276 1 — 6 26 15 375 42 29 257 55 36 423	Total USD’000 761 80 53
		894
		130 348 9
		487
		407
		631

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

annum:

Leasehold improvements Over the term of the lease Motor vehicles 25% Furniture, fixtures and office equipment 25% Computer equipment 50%

18. DEPOSITS FOR ACQUISITION OF PROPERTIES COMPANIES

The amount of the Group at 31 December 2007 represented deposits paid for acquisition of interests in partially-completed property companies located in Shenyang and Guangzhou, the PRC. Included in the balance of the Group and the Company was an amount of USD25,000,000 deposited with SOCAM, which was also one of the joint venture partners, and acted as the Group’s representative to acquire the Group’s share of interest in Shenyang project.

— 167 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

19. PROPERTIES HELD FOR SALE/PROPERTIES UNDER DEVELOPMENT FOR SALE

The Group’s properties held for sale and properties under development for sale are situated in the PRC. The Group is in the process of obtaining the title deeds of certain properties under development for sale with the carrying amount of USD99,219,000 (2007: USD115,120,000).

The cost of properties sold recognised as an expense includes USD4,985,000 (2007: Nil) in respect of write-down of properties held for sale to net realisable value.

20. FOREIGN EXCHANGE FORWARD CONTRACTS

THE GROUP AND THE COMPANY

							As at 31 December	As at 31 December
							2008	2007
							USD’000	USD’000
Foreign	exchange	forward	contracts	-	(liabilities)	assets	(5,699)	14,835

The major terms of the foreign exchange forward contracts are as follows:

As at 31 December 2008
Notional amount	Maturity	Currency	Forward rate
Sell USD50,000,000	30 June 2009	RMB/USD	RMB6.1495:USD1
As at 31 December 2007
Notional amount	Maturity	Currency	Forward rate
Sell USD150,000,000	26 June 2008	RMB/USD	RMB7.269:USD1
Sell USD150,000,000	26 June 2008	RMB/USD	RMB7.271:USD1
Sell USD40,000,000	26 December 2008	RMB/USD	RMB7.113:USD1
Sell USD40,000,000	26 December 2008	RMB/USD	RMB7.114:USD1

— 168 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

21. AMOUNTS DUE FROM SUBSIDIARIES

At 31 December 2008, an amount due from a subsidiary classified under non-current assets of principal amount of approximately USD474,196,000 (2007: Nil) is unsecured, non-interest bearing and not planned to be settled within twelve months from the balance sheet date, accordingly, the balance is classified as non-current. On application of IAS 39 “Financial Instruments - Recognition and Measurement”, the fair value of this amount is determined based on an effective interest rate of 7% (2007: Nil) per annum on initial recognition. The difference between the amount of advance and its fair value, determined on initial recognition amounting to approximately US$97,376,000 (2007: Nil), has been included in the investment cost in interest in a subsidiary as deemed contribution to the subsidiary. The amounts due from subsidiaries classified under current assets are unsecured, non-interest bearing and repayable on demand.

22. AMOUNTS DUE FROM/TO RELATED COMPANIES

Amounts due from: A holding company of a shareholder (Note a) Fellow subsidiaries of a shareholder (Note c) Amounts due to: A holding company of a shareholder (Note c) Fellow subsidiaries of a shareholder (Note b)	THE GROUP As at 31 December 2008 2007 USD’000 USD’000 35 11,075 3,484 1,899 3,519 12,974 — 697 2,371 4,119 2,371 4,816	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 9,170 — 1,769 220 10,939 220 — 395 — — — 395	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 9,170 — 1,769 220 10,939 220 — 395 — — — 395
			220
			395 —
			395

Notes:

(a) At 31 December 2007, the amount due from a holding company of a shareholder mainly represented receivable arising from a back-to-back funding arrangement, which was unsecured, bore interest at rates ranging from 4.48% to 5.09% per annum, between a holding company of a shareholder and a subsidiary of the Company. The balance was fully repaid during 2008.
(b) The amounts due to fellow subsidiaries of a shareholder are unsecured, non-interest bearing and repayable on demand. The balances mainly represent fee payable in relation to the construction and project management services provided to certain properties projects of the Group.
(c) These balances are unsecured, non-interest bearing and repayable on demand.

23. LOAN TO A RELATED COMPANY

At 31 December 2008, loan to a related company of the Group represents an entrustment loan provided to a partner of a jointly controlled entity, which is secured by the equity interest of that joint venture partner in the jointly controlled entity, bears fixed interest rate of 2.79% per annum and is repayable by 15 December 2009.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

24. TRADE AND OTHER RECEIVABLES

THE GROUP

Trade receivables (Note a) Other receivables, deposits and prepayments (Note b) Amount due from a former shareholder of a subsidiary (Note c)	As at 31 December 2008 2007 USD’000 USD’000 60,855 11,559 54,291 4,299 — 12,819 115,146 28,677	As at 31 December 2008 2007 USD’000 USD’000 60,855 11,559 54,291 4,299 — 12,819 115,146 28,677
		28,677

Notes:

(a) Ageing of trade receivables

Not yet due Overdue by: 1 - 60 days 61 - 90 days Over 91 days	As at 31 December 2008 2007 USD’000 USD’000 35,401 10,298 25,166 629 — 205 288 427 60,855 11,559	As at 31 December 2008 2007 USD’000 USD’000 35,401 10,298 25,166 629 — 205 288 427 60,855 11,559
		11,559

Trade receivables arose from sales of properties which were due for settlement in accordance with the terms of the related sale and purchase agreements.

(b) Included in other receivables at 31 December 2008 is an amount of USD46,976,000 due from the buyer of Beijing Huapu Centre (the “Buyer”) as part of the sales proceeds pursuant to the sale agreement (the “Sale Agreement”) signed on 4 February 2008, of which approximately USD4,389,000 and USD42,587,000 was due in August 2008 and December 2008 respectively.

Subsequent to 31 December 2008, the Group entered into a supplemental agreement with the Buyer to re-arrange the repayment of these receivables. Pursuant to this agreement, the Group advanced an unsecured entrustment loan to the Buyer in the amount of RMB120,000,000 (approximately USD17,556,000), bore interest at the People’s Bank of China (“PBOC”) Prescribed Interest Rate and due for repayment on 30 September 2009. In return, the Buyer repaid to the Group a net amount of USD20,463,000, which comprised: (i) a cash collateral amounting to USD30,704,000 which remained in an entity owned by the Buyer (which held Beijing Huapu Centre and was sold by the Group to the Buyer) to secure one of its bank loans existing at the time of the Sale Agreement, (ii) an outstanding amount of USD4,389,000 due in August 2008, and net of (iii) outstanding construction costs borne by the Group under the Sale Agreement amounting to RMB100,000,000 (approximately USD14,630,000) which was included in trade payables at 31 December 2008.

— 170 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Under this re-arrangement, the Group’s outstanding receivables from the Buyer is reduced from USD46,976,000 to USD29,439,000. The Directors consider that this re-arrangement can effectively reduce the Group’s credit risk exposure on the outstanding receivables from the Buyer.

(c) The amount due from a former shareholder of a subsidiary at 31 December 2007 represented the temporary payment for the acquisition of FD Real Estate Investments Limited which was refunded to the Group upon the final payment to the vendor as disclosed in note 33(d).

THE COMPANY

At 31 December 2008 and 2007, other receivables represent interest receivables, utility and rental deposits.

25. PLEDGED BANK DEPOSITS AND BANK BALANCES

Pledged bank deposits of the Group represent deposits pledged to banks to secure the banking facilities granted to the Group in respect of bank borrowings. The pledged deposits of the Group carry interest at market rates, which range from 1.71% to 3.33% (2007: 3.70% to 5.55%). The pledged bank deposits will be released upon the settlement of relevant bank borrowings.

Bank balances of the Group and the Company carry interest at market rates which range from 1.18% to 5.30% (2007: 3.95% to 5.68%).

26. SHARE CAPITAL

Authorised share capital: Ordinary shares of £0.01 each Issued and fully paid: Ordinary shares of £0.01 each Balance at beginning of the year/period Issue of shares (Notes (i) to (iii)) Shares repurchased and cancelled (Note (iv)) Balance at end of the year/period Shown in the Financial Information as	Number of shares Nominal value 2008 2007 2008 2007 £ £ 331,227,320 331,227,320 3,312,273 3,312,273 298,602,000 — 2,986,020 — — 298,602,000 — 2,986,020 (17,408,989) — (174,090) — 281,193,011 298,602,000 2,811,930 2,986,020 Nominal value 2008 2007 USD’000 USD’000 5,557 5,901

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Notes:

The movement of issued share capital is as follows:

(i) On 13 June 2007, the Company issued and placed 151,230,000 ordinary shares of nominal value of £0.01 each for admission to AIM at the price of £1.00 per share (“Placing Price”).
(ii) On 13 June 2007, the Company issued 119,004,000 ordinary shares as consideration shares for the acquisition of the Contributing Projects pursuant to the asset injection agreements.
(iii) On 25 June 2007, the Company issued 22,684,000 ordinary shares upon completion of the over-allotment option in connection with the Company’s placing of ordinary shares. In addition, an existing shareholder has, as a result of the exercise of the over-allotment option and pursuant to a top-up right in the subscription agreement, subscribed for 5,684,000 new ordinary shares in the Company at the Placing Price.
(iv) During the year ended 31 December 2008, the Company re-purchased 17,408,989 ordinary shares of £0.01 each in the Company at prices ranged from £0.36 to £0.71 per share. The re-purchased shares have upon acquisition been cancelled.

All shares issued above are ranked pari passu in all respects.

— 172 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

27. SHARE PREMIUM AND RESERVES

At 9 February 2007 Issue of shares for cash (Note 26(i)&(iii)) Issue of shares for the acquisition of Contributing Projects (Note 26(ii)) Transaction costs attributable to issue of new shares Exchange differences arising on translation of the financial statements from functional currency to presentation currency recognised directly in equity Loss for the period At 31 December 2007 Exchange differences arising on translation of the financial statements from functional currency to presentation currency recognised directly in equity Profit for the year Re-purchase of own shares Dividend paid At 31 December 2008	Reserves Share premium Capital redemption reserve Translation reserve (Accumulated losses) retained profit USD’000 USD’000 USD’000 USD’000 — — — — 351,651 — — — 232,523 — — — (14,425) — — — — — 24,478 — — — — (2,281) 569,749 — 24,478 (2,281) — — 39,701 — — — — 7,934 — (14,460) — — — — — (5,185) 569,749 (14,460) 64,179 468	Reserves	Sub-total USD’000 — — — — 24,478 (2,281) 22,197 39,701 7,934 (14,460) (5,185) 50,187	Total USD’000 — 351,651 232,523 (14,425) 24,478 (2,281)
				591,946
				39,701 7,934 (14,460) (5,185)
				619,936

— 173 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

28. CONVERTIBLE BONDS

On 13 June 2007, the Company issued USD200,000,000 2.00 per cent. coupon convertible bonds due on 13 June 2012 (the “Convertible Bonds”). The Convertible Bonds are denominated in USD and are convertible into fully-paid shares with par value of £0.01 each of the Company.

The net proceeds received from the issue of the Convertible Bonds have been split between a straight debt component and the embedded derivatives which comprise conversion option, bondholders redemption option and issuer redemption option (collectively the “derivative component”). Straight debt component is stated at amortised cost at the effective interest rate of 14.56% per annum. The derivative component is stated at fair value.

During the year ended 31 December 2008, the Company re-purchased USD26,000,000 (2007: Nil) in principal amount of the Convertible Bonds at a price range of 87 to 89 per cent. of their principal amounts. The re-purchased Convertible Bonds have upon acquisition been cancelled.

THE GROUP AND THE COMPANY

At the beginning of the year/period Convertible bonds issued on 13 June 2007 Amortised interest charged during the year/period (Note 6) Changes in fair value (Note 7) Payment of coupon interest during the year/period Re-purchase by the Company during 2008 At the end of the year/period	Straight debt 2008 2007 USD’000 USD’000 173,221 — — 162,177 23,255 13,044 — — (3,676) (2,000) (23,373) — 169,427 173,221	Compound embedded derivatives 2008 2007 USD’000 USD’000 16,624 — — 32,443 — — (3,111) (15,819) — — (2,034) — 11,479 16,624	Compound embedded derivatives 2008 2007 USD’000 USD’000 16,624 — — 32,443 — — (3,111) (15,819) — — (2,034) — 11,479 16,624
			16,624

At 31 December 2008, USD25,000,000 (2007: USD25,000,000) of the principal amount of the Convertible Bonds are held by a subsidiary of SOCAM.

Conversion

The bondholders shall have the right to convert their Convertible Bonds (or any of them) into shares of the Company at any time during the period beginning on (and including) the date falling 41 days after 13 June 2007 (the “Issue Date”) and ending on (and including) the date falling 7 days prior to 13 June 2012 (the “Maturity Date”).

Redemption

Unless previously redeemed, converted or purchased and cancelled, the Convertible Bonds will be redeemed at the greater of (a) the current market price of shares into which such Convertible Bonds could be converted (assuming that all Convertible Bonds were converted as at the Maturity Date) and (b) the redemption price at 146.62 per cent. of their principal amount, together with accrued interest on the Maturity Date.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Redemption at the Option of the Bondholders (“Put Option”)

A bondholder will have the right, at such holder’s option, to require the Company to redeem all or some only of such holder’s Convertible Bonds on the third anniversary of the Issue Date (the “Non-QPO Put Option Date”) at 123.51 per cent. of the principal amount of such Convertible Bond as at the relevant date fixed for redemption together with accrued interest to the date fixed for redemption if the listing date has not occurred prior to the Non-QPO Put Option Date.

Redemption at the Option of the Company (“Early Redemption Option”)

The Company may at any time on or prior to the date that falls on the first anniversary of the date on which the shares are listed on a qualified Stock Exchange, redeem all, or some only of the Convertible Bonds at their early redemption amount (as defined in the Admission Document) together with interest accrued to the date fixed for redemption if the mid-market closing price for the shares (as derived from the daily quotation sheet of a qualified Stock Exchange) translated into USD at the prevailing rate for the relevant day, for each of 20 consecutive trading days, the last of which occurs not more than 30 days prior to the date upon which notice of such redemption is published was at least 130 per cent. of the early redemption amount divided by the prevailing conversion ratio. The Company may also at any time redeem all, but not some only, of the Convertible Bonds at their early redemption amount together with interest accrued to the date fixed for redemption if 90 per cent. in principal amount of the Convertible Bonds originally issued has already been converted, redeemed or purchased and cancelled.

29. BANK BORROWINGS

Amount due within a period of: On demand or within one year (under current liabilities) More than one year, but not exceeding two years (under non-current liabilities) More than two year, but not exceeding three years (under non-current liabilities) Analysis of bank borrowings by currency: Denominated in RMB (Note a) Denominated in HKD (Note b)	THE GROUP As at 31 December 2008 2007 USD’000 USD’000 33,549 147,852 — 66,397 29,263 — 62,812 214,249 29,263 214,249 33,549 — 62,812 214,249	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 33,549 — — — — — 33,549 — — — 33,549 — 33,549 —	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 33,549 — — — — — 33,549 — — — 33,549 — 33,549 —
			—
			— —
			—

— 175 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Notes:

(a) The bank borrowings denominated in RMB are interest bearing at the following rates per annum and subject to the maturity dates stated below:

Maturity date 93% of PBOC Prescribed Interest Rate 15 January 2008 95% of PBOC Prescribed Interest Rate 8 February 2008 PBOC Prescribed Interest Rate 28 May 2009 103% of PBOC Prescribed Interest Rate 8 December 2008 103% of PBOC Prescribed Interest Rate 8 June 2009 PBOC Prescribed Interest Rate Subject to annual review 7.56% 10 January 2011	As at 31 December 2008 2007 USD’000 USD’000 — 54,760 — 33,541 — 16,428 — 49,968 — 49,969 — 9,583 29,263 — 29,263 214,249	As at 31 December 2008 2007 USD’000 USD’000 — 54,760 — 33,541 — 16,428 — 49,968 — 49,969 — 9,583 29,263 — 29,263 214,249
		214,249

The bank borrowings denominated in RMB as at the balance sheet dates were secured by certain properties under development for sale and pledged bank deposits of USD65,584,000 and USD4,390,000 (2007: properties interests of USD204,283,000 and pledged bank deposits of USD128,592,000) respectively.

(b) At 31 December 2008, the bank borrowings denominated in Hong Kong Dollars of USD33,549,000 (2007: Nil) are unsecured, interest bearing at 1-month Hong Kong Interbank Offered Rate (“HIBOR”) plus margin rates ranging from 0.75% to 1.25% per annum, and are due for repayment on or before 18 August 2009.

30. TRADE AND OTHER PAYABLES

THE GROUP Trade payables Other payables Amount due to a former shareholder of a subsidiary Ageing of trade payables Not yet due	As at 31 December 2008 2007 USD’000 USD’000 30,151 32,558 11,973 12,344 — 12,458 42,124 57,360 As at 31 December 2008 2007 USD’000 USD’000 30,151 32,558

Trade payables principally comprise amounts outstanding for construction costs and land costs.

— 176 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

THE COMPANY

At 31 December 2008 and 2007, other payables represent the accruals of expenses.

31. LOANS FROM RELATED COMPANIES

The loans from related companies of the Group represent advances for financing the acquisition and construction of certain contributing projects in the PRC prior to their acquisition by the Group.

The amount at 31 December 2008 is unsecured, non-interest bearing and repayable on demand.

As at 31 December 2007, other than an amount of USD11,395,000 due to a related company which was under the back-to-back funding arrangement as mentioned in note 22 and bore interest at 98% of PBOC Prescribed Interest Rate per annum, the remaining amounts were unsecured, interest free and repayable on demand.

32. FINANCIAL INSTRUMENTS

The Group’s and the Company’s major financial instruments include pledged bank deposits, trade and other receivables, loan to a related company, amounts due from subsidiaries, jointly controlled entities and related companies, bank balances, trade and other payables, amounts due to related companies and jointly controlled entities, loans from related companies, bank borrowings, convertible bonds and derivative financial instruments. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The Group manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

Categories of financial instruments

Financial assets Loans and receivables (including cash and cash equivalents) Fair value through profit or loss (deemed as held for trading) Derivative financial instruments Financial liabilities Amortised cost Fair value through profit or loss (deemed as held for trading) Derivative financial instruments	THE GROUP As at 31 December 2008 2007 USD’000 USD’000 524,443 309,739 — 14,835 296,189 469,159 17,178 16,624	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 749,130 748,335 — 14,835 203,814 174,567 17,178 16,624	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 749,130 748,335 — 14,835 203,814 174,567 17,178 16,624
			174,567 16,624

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Financial risk management objectives and policies

(a) Market risk

The Group’s activities expose primarily to the financial risks of changes in interest rates, foreign currency exchange rates and equity prices.

(i) Interest rate risk

The Group is exposed to cash flow interest rate risk due to the fluctuation of the prevailing market interest rate on bank deposits and variable-rate borrowings. The Group is also exposed to fair value interest rate risk which relates primarily to its debt portion of the convertible bonds issued by the Company and fixed-rate borrowing. The Group currently does not use any derivative contracts to hedge its exposure to interest rate risk. However, the management will consider hedging significant interest rate exposure should the need arise.

The Group’s exposures to interest rates on financial liabilities are detailed in the liquidity risk management section of this note. The Group’s cash flow interest rate risk is mainly concentrated on the fluctuation of the PBOC Prescribed Interest Rate and HIBOR arising from the Group’s RMB and HKD denominated borrowings and the variable interest rates on bank deposits.

THE GROUP

At the balance sheet dates, if interest rates had been increased/decreased by 50 basis points and all other variables were held constant, the Group’s profit would increase/decrease by approximately USD1,129,000 for the year ended 31 December 2008 (For the period ended 31 December 2007: USD127,000). The sensitivity analysis is prepared for variable-rate bank balances and bank borrowings assuming the amount at the balance sheet date was outstanding for the whole year/period.

THE COMPANY

At the balance sheet dates, if interest rates had been increased/decreased by 50 basis points and all other variables were held constant, the Company’s profit would increase/decrease by approximately USD949,000 for the year ended 31 December 2008 (For the period ended 31 December 2007: USD165,000). The sensitivity analysis is prepared for variable-rate bank balances and bank borrowings assuming the amount at the balance sheet date was outstanding for the whole period.

(ii) Foreign currency risk

The Group’s transactions were mainly conducted in RMB, the functional currency of the Company and its subsidiaries. However, the Group and the Company hold certain cash balances and current amount balances with subsidiaries denominated in US Dollars and/or British Pounds, being the proceeds raised through the AIM listing, the issue of the convertible bonds and sales of properties, it has exposure to exchange rate fluctuation. In addition, the Group and the Company have certain Hong Kong Dollars denominated financial assets to facilitate future acquisitions and funding requirements. The Group manages its foreign currency risks by entering into forward contracts, and by closely monitoring the movement of the foreign currency exchange rates.

— 178 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

The carrying amounts of the Group’s and the Company’s foreign currency denominated monetary assets and monetary liabilities at the balance sheet dates are as follows:

	THE GROUP	THE GROUP	THE COMPANY	THE COMPANY
	As at 31 December		As at 31 December
	2008	2007	2008	2007
	USD’000	USD’000	USD’000	USD’000
Assets
Hong Kong Dollars	3,086	60,866	11,153	166,577
US Dollars	401,611	211,922	223,849	343,268
British Pounds	—	—	—	237,544
Liabilities
Hong Kong Dollars	35,193	1,547	34,278	1,219
US Dollars	169,484	173,705	169,484	173,266

Foreign currency sensitivity

The Group and the Company mainly expose to the fluctuation of USD and the Hong Kong Dollars. The following table details the Group’s and the Company’s sensitivity to a 5% increase and decrease in the RMB against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year/period end for a 5% change in foreign currency rates and all other variables are held constant. The sensitivity analysis includes convertible bonds, bank borrowings as well as bank balances. A negative number indicates a decrease in profit for the year/period where the RMB strengthens against the relevant currency. For a 5% weakening of the RMB against the relevant foreign currencies, there would be an equal and opposite impact on the profit and the balances below would be positive.

Hong Kong Dollars US Dollars British Pounds	THE GROUP As at 31 December 2008 2007 USD’000 USD’000 1,584 (2,883) (11,454) (1,857) — — (9,870) (4,740)	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 1,141 (8,036) (2,683) (8,262) — (11,544) (1,542) (27,842)	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 1,141 (8,036) (2,683) (8,262) — (11,544) (1,542) (27,842)
			(27,842)

THE GROUP AND THE COMPANY

The impact of the fair value change in the foreign exchange forward contract assuming a 5% strengthening of the RMB against USD on profit or loss would be an increase in profit for the year of USD2,250,000 (2007: an increase in profit of USD16,700,000). For a 5% weakening of the RMB against USD, there would be an equal and opposite impact on the profit.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

(iii) Price risk

THE GROUP AND THE COMPANY

The embedded conversion option of the convertible bonds issued by the Company exposes the Group to equity price risk. Details of the convertible bonds issued by the Company are set out in note 28.

If the volatility of share price of the Company to the valuation model had been 5% higher/lower while all other variables were held constant, the profit for the year/period would decrease/increase by USD176,000 (2007: USD1,619,000).

(b) Credit risk

THE GROUP AND THE COMPANY

The Group’s and the Company’s maximum exposure to credit risk in the event of the counterparties’ failure to perform their obligations in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the consolidated and Company’s balance sheets and the amount of contingent liabilities in relation to financial guarantee issued by the Group as disclosed in note 37.

The management closely monitors its credit exposure by implementation of policies for determination of credit limits, credit approvals and making necessary follow-up actions to minimise its credit risk throughout the year/period. In addition, the Group and the Company review the recoverable amount of amount due from each counterparty at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies or state-owned banks in the PRC.

The Group has a certain concentration of credit risk as 47% (2007: Nil) of the trade and other receivables was due from the Group’s largest customer. With respect to credit risk arising from amounts due from jointly controlled entities and related companies, the management of the Company considers that the Group’s exposure to credit risk arising from default of these related parties is limited as these related parties have sufficient net assets to repay their debts and the Group does not expect to result in any financial loss for amounts due from these related parties.

(c) Capital management

THE GROUP AND THE COMPANY

The Group and the Company manage its capital to ensure that entities in the Group and the Company will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity mix.

The capital structure of the Group and the Company consist of debt, which includes the convertible bonds and bank borrowings disclosed in notes 28 and 29 respectively, and equity attributable to equity holders of the Company, comprising capital and reserves.

— 180 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

Gearing ratio

The gearing ratio at the balance sheet date was as follows:

Pledged bank deposits, bank balances and cash Less: Debt Net cash (debt) Equity Net debt to equity ratio	THE GROUP As at 31 December 2008 2007 USD’000 USD’000 259,409 239,549 (232,239) (387,470) 27,170 (147,921) 638,660 602,654 Not applicable 25%	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 225,772 33,900 (202,976) (173,221) 22,796 (139,321) 625,493 597,847 Not applicable 23%	THE COMPANY As at 31 December 2008 2007 USD’000 USD’000 225,772 33,900 (202,976) (173,221) 22,796 (139,321) 625,493 597,847 Not applicable 23%
			(139,321)
			597,847
			23%

The Directors of the Company review the capital structure periodically. As part of this review, the Directors of the Company assess budgets of major projects taking into account of the provision of funding. Based on the operating budgets, the Directors consider the cost of capital and the risks associated with each class of capital and balance its overall capital structure through the issue of new shares, new debt or the redemption of existing debt.

The Group’s overall strategy remains unchanged over the year ended 31 December 2008 and the period ended 31 December 2007.

(d) Liquidity risk

THE GROUP AND THE COMPANY

The Group’s and the Company’s objective is to maintain a balance between continuity of funding and the flexibility through the use of bank and other borrowings. At 31 December 2008, the Group’s and the Company’s net current assets were USD702,009,000 (2007: USD530,775,000) and USD289,587,000 (2007: USD745,200,000) respectively. In the opinion of the Directors of the Company, most of the borrowings that mature within one year can be renewed on the strength of the Group’s asset base. The Group expect to have adequate sources of funding to finance the Group’s projects and operations.

The following table details the Group’s and the Company’s contractual maturity for its financial liabilities.

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The table includes both interest and principal cash flows.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

THE GROUP

	Weighted
	average	Carrying						Total
	effective	amount at	Less than	3 months			Over	undiscounted
	interest rate	31 December	3 months	to 1 year 1 - 2 years 2 - 3 years			3 years	cash flows
	%	USD’000	USD’000	USD’000	USD’000	USD’000	USD’000	USD’000
As at 31 December 2008
Non-derivative financial liabilities
Non-interest bearing
Trade and other payables	—	42,124	39,188	2,936	—	—	—	42,124
Loans from related companies	—	5,750	5,750	—	—	—	—	5,750
Amounts due to related
companies	—	2,371	2,371	—	—	—	—	2,371
Amounts due to jointly
controlled entities	—	13,705	13,705	—	—	—	—	13,705
Interest bearing
Bank borrowings
- variable rate	1.69%	33,549	140	33,653	—	—	—	33,793
- fixed rate	7.56%	29,263	545	1,667	2,213	29,317	—	33,742
Convertible bonds	14.56%	169,427	—	3,480	3,480	3,480	258,599	269,039
		296,189	61,699	41,736	5,693	32,797	258,599	400,524
Derivative instruments
- net settlement foreign exchange
forward contract - outflow	—	5,699	—	5,699	—	—	—	5,699
As at 31 December 2007
Non-derivative financial liabilities
Non-interest bearing
Trade and other payables	—	57,360	50,014	2,933	3,863	322	228	57,360
Loans from related companies	—	8,118	8,118	—	—	—	—	8,118
Amounts due to related
companies	—	4,816	3,654	1,162	—	—	—	4,816
Interest bearing
Loans from related companies	5.88%	11,395	—	12,065	—	—	—	12,065
Bank borrowings
- variable rate	6.82%	214,249	85,924	66,561	73,630	—	—	226,115
Convertible bonds	14.56%	173,221	—	4,000	4,000	4,000	301,240	313,240
		469,159	147,710	86,721	81,493	4,322	301,468	621,714

— 182 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

THE COMPANY

Weighted average contractual interest rate Carrying amount at 31 December % USD’000 As at 31 December 2008 Non-derivative financial liabilities Non-interest bearing Other payables — 838 Interest bearing Bank borrowings - variable rate 1.69% 33,549 Convertible bonds 14.56% 169,427 203,814 Derivative instruments - net settlement foreign exchange forward contract - outflow — 5,699 As at 31 December 2007 Non-derivative financial liabilities Non-interest bearing Other payables — 951 Amounts due to related companies — 395 Interest bearing Convertible bonds 14.56% 173,221 174,567	Less than 3 months USD’000 838 140 — 978 — 951 395 — 1,346	3 months to 1 year USD’000 — 33,653 3,480 37,133 5,699 — — 4,000 4,000	1 - 2 years USD’000 — — 3,480 3,480 — — — 4,000 4,000	2 - 3 years USD’000 — — 3,480 3,480 — — — 4,000 4,000	Over 3 years Total undiscounted cash flows USD’000 USD’000 — 838 — 33,793 258,599 269,039 258,599 303,670 — 5,699 — 951 — 395 301,240 313,240 301,240 314,586	Over 3 years Total undiscounted cash flows USD’000 USD’000 — 838 — 33,793 258,599 269,039 258,599 303,670 — 5,699 — 951 — 395 301,240 313,240 301,240 314,586
						303,670
						5,699
						951 395 313,240
						314,586

— 183 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

(e) Fair value of financial instruments

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

The fair value of foreign exchange forward contracts is determined by reference to valuation performed by a financial institution. The fair value of the straight debt portion of the Convertible Bonds at the date of issue is estimated using discounted cash flow analysis and the applicable yield curve. The fair values of the compound embedded derivatives are determined as follows:

(a) conversion option - Binomial Tree model.
(b) issuer redemption option - “With and Without Approach” (i.e. the value of convertible bonds in the absence of the issuer’s redemption right less the value of convertible bonds in the existence of the issuer’s redemption right).
(c) bondholders redemption option - by subtracting the fair value of the non-puttable bond (i.e. straight bond value) from that of puttable bonds. The fair value of the puttable bond was developed by Binomial Tree Model.

The major inputs into the Binomial Tree Model for the calculation of the fair values of the embedded derivatives were as follows:

	2008	2007
Risk free rate of interest	3.32%	4.60%
Dividend yield	2.75%	0%
Time to expiration	3.43 years	4.43 years
Volatility	55%	50%

The Directors consider that the carrying amounts of the financial assets and financial liabilities recorded at amortised cost in the financial information approximate their fair values.

— 184 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

33. ACQUISITION OF ASSETS AND LIABILITIES THROUGH ACQUISITION OF SUBSIDIARIES

(a) On 17 June 2008, the Group acquired Beijing Fengqiao Villas through acquisition of 100% of the registered capital of Beijing Chaoteng Investment Management Co., Ltd. for the consideration of RMB193,500,000 (approximately USD28,077,000).

The net assets acquired in the transaction are as follows:

Net assets acquired: Properties under development Bank balances and cash Total consideration satisfied by: Cash paid during 2008 Net cash outflow arising on acquisition: Bank balances and cash acquired Cash consideration paid during 2008	USD’000 26,626 1,451
	28,077
	28,077
	(1,451) 28,077
	26,626

(b) On 18 July 2008, the Group acquired 100% of the issued share capital of Infotach Assets Limited for the consideration of RMB816,000,000 (approximately USD119,581,000). This transaction has been reflected as a purchase of assets and liabilities.

The net assets acquired in the transaction are as follows:

Net assets acquired: Properties under development Other receivables Bank balances and cash Total consideration satisfied by: Cash paid during 2008 Cash paid during 2007 Net cash outflow arising on acquisition: Bank balances and cash acquired Cash consideration paid during 2008	USD’000 119,439 139 3
	119,581
	35,937 83,644
	119,581
	(3) 35,937
	35,934

— 185 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

(c) On 12 April 2007, the Company entered into several asset injection agreements to acquire the Contributing Projects which was settled by the issue of 119,004,000 ordinary shares in the Company. The fair values of net assets acquired amounted to approximately USD234,872,000 and the assets and liabilities acquired are as follows:

Properties interests (Note 13) Properties under development Property, plant and equipment Properties held for sale Deferred tax assets Advance to related companies Pledged bank deposits Bank balances and cash Bank borrowings Loans from related companies Trade and other payables Sales deposits received Taxation payable Other assets, net Total consideration satisfied by: Issue of shares	USD’000 150,896 232,878 505 132,563 1,548 11,776 47,768 29,988 (213,804) (85,715) (54,462) (20,374) (609) 1,914
	234,872
	234,872

The net cash inflow arising on acquisition of Contributing Projects is bank balances and cash acquired of USD29,988,000.

In addition to the shares issued for the acquisition, the Group was also subject to the payment of Contingent Consideration as referred to in note 13.

— 186 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

(d) On 28 December 2007, the Group acquired 100% of the issued share capital of FD Real Estate Investments Limited for the consideration of RMB270,000,000 (approximately USD36,963,000), which was settled by cash. The fair values of net assets acquired amounted to approximately USD36,963,000. This transaction has been reflected as a purchase of assets and liabilities.

The net cash outflow arising on acquisition of subsidiaries was as follows:

Property, plant and equipment Properties under development Other receivables Bank balances and cash Other payables Total consideration satisfied by: Cash paid during 2007 Cash paid during 2008 Net cash outflow arising on acquisition: Bank balances and cash acquired Cash consideration paid in 2007 (note) Total net cash outflow arising on the acquisition of subsidiaries	USD’000 43 37,084 1,240 1,617 (3,021)
	36,963
	24,505 12,458
	36,963
	(1,617) 24,505
	22,888

Note:

During the period ended 31 December 2007, an amount of HK$100,000,000 (approximately USD12,819,000) was paid to the vendor as temporary payment and was included in trade and other receivables. During the year ended 31 December 2008, such temporary payment was refunded to the Group upon the settlement of the final payment of RMB91,000,000 (approximately USD12,458,000).

— 187 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

34. DISPOSAL OF PROPERTIES INTERESTS

During the year ended 31 December 2008, the Group disposed of its interest in Beijing Huapu Centre through the disposal of 100% equity interest in Mountain Breeze (Barbados) SRL (“Mountain Breeze”), which has 100% interest in 北京中天宏業房地產諮詢有限公司 (Beijing Zhongtian Hongye Real Estate Consulting Co., Ltd).

The net assets of Mountain Breeze and its subsidiary at the date of disposal were as follows:

Net assets disposed of: Properties interests Pledged bank deposits Bank borrowings Other payables Gain on disposal Satisfied by: Cash Deferred consideration Receivable upon release of pledged bank deposits	USD’000 221,221 43,066 (130,332) (1,687)
	132,268 42,276
	174,544
	126,989 4,489 43,066
	174,544

35. RELATED PARTY TRANSACTIONS

(i) During the year ended 31 December 2008, the Group incurred an investment management fee amounting to approximately USD14,256,000 (2007: USD4,241,000). The fee comprised a base fee of approximately USD9,295,000 (2007: USD4,241,000), of which USD1,424,000 (2007: USD855,000) was capitalised under properties under development for sale, and a performance fee of approximately USD4,961,000 (2007: Nil), payable by the Group to SOCAM Asset Management (HK) Limited, a subsidiary of a shareholder of the Company.
(ii) During the year ended 31 December 2008, the Group paid construction costs amounting to approximately USD8,007,000 (2007: Nil) to a subsidiary of a shareholder of the Company. The amount was capitalised under properties under development for sale.
(iii) During the year ended 31 December 2008, the Group paid project management fee amounting to approximately USD3,978,000 (2007: USD1,184,000), of which USD3,524,000 (2007: USD1,153,000) was capitalised under properties under development for sale, to subsidiaries of a shareholder of the Company.
(iv) During the year ended 31 December 2008, the Group received interest income and paid interest expense amounting to approximately USD391,000 (2007: USD501,000) and USD1,345,000 (2007: USD562,000), respectively, in relation to back-to-back funding arrangements with a subsidiary of SOCAM and an unsecured loan from a jointly controlled entity of SOCAM.
(v) During the year ended 31 December 2008, the Group and the Company made advances and repayments to related companies. Details of the balances are disclosed in the consolidated and Company’s balance sheets and notes 16, 21, 22, 23 and 31.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

36. CAPITAL COMMITMENTS

THE GROUP

At 31 December 2008, the capital commitment of Group and its share in a jointly controlled entity, which is contracted for but not provided in the Financial Information, is USD26,849,000 (2007: Nil).

THE COMPANY

The Company did not have any capital commitment at each balance sheet date.

37. CONTINGENT LIABILITIES

(i) At 31 December 2008, a subsidiary of the Company had outstanding guarantees issued in favour of banks amounting to USD1,706,000 (2007: USD7,986,000) in respect of mortgage facilities granted to the buyers of its residential properties. In the opinion of Directors, the likelihood of payment of guarantee is remote, accordingly, the fair value of the financial guarantee contracts is not significant.
(ii) At 31 December 2008, the Company and its wholly-owned subsidiary, China Central Properties (BVI) Limited, have jointly given an indemnity in favour of a shareholder of the Company with respect to certain guarantees granted by the shareholder of the Company in favour of a bank as security for a bank loan granted to a then wholly-owned subsidiary of the Company (the “Subsidiary”) with an outstanding amount of RMB540,000,000 (approximately USD79,000,000). During the year ended 31 December 2008, the Subsidiary was sold to an independent third party who agreed to procure the repayment of the bank loan and this obligation is guaranteed by the parent company of the independent third party. In the opinion of the Directors of the Company, the fair value of the indemnity is insignificant at initial recognition and the Directors consider that the possibility of the default of the parties involved is remote, accordingly, no value has been recognised in the Financial Information.

38. OPERATING LEASE ARRANGEMENTS

The Group and the Company as lessee

Operating leases relate to office premises with lease terms of 1 to 5 years (2007: 1 to 3 years). All operating lease contracts contain market review clauses in the event that the Group exercises its option to renew.

The Group and the Company do not have an option to purchase the leased asset at the expiry of the lease period.

THE GROUP

		From
		9 February
		2007 (date of
	Year ended	incoporation)
	31 December	to 31 December
	2008	2007
	USD’000	USD’000
Payments recognised as an expense
Minimum lease payments	115	66

— 189 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

	THE GROUP	THE GROUP	THE COMPANY	THE COMPANY
	As at 31 December		As at 31 December
	2008	2007	2008	2007
	USD’000	USD’000	USD’000	USD’000
Non-cancellable operating lease commitments
expiring:
Not longer than 1 year	1,298	279	125	124
Longer than 1 year and not longer than 5
years	2,266	172	52	126
	3,564	451	177	250

The Group and the Company as lessor

THE GROUP

Operating leases relate to the properties held for sale owned by the Group with lease terms of between 1 to 10 years. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.

The property rental income earned by the Group from its properties held for sale, all of which are leased out under operating leases, amounts to USD2,831,000 (2007: USD815,000).

Non-cancellable operating lease receivables expiring: Not longer than 1 year Longer than 1 year and not longer than 5 years Longer than 5 years	As at 31 December 2008 2007 USD’000 USD’000 — 2,918 — 4,313 — 2,981 — 10,212	As at 31 December 2008 2007 USD’000 USD’000 — 2,918 — 4,313 — 2,981 — 10,212
		10,212

No operating lease commitment remained at the year end as the relevant property held for sale was disposed of during 2008.

THE COMPANY

The Company has no operating lease commitment at each balance sheet date.

— 190 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

39. PARTICULARS OF PRINCIPAL SUBSIDIARIES

At the date of this report, the Company has the following subsidiaries:

		Place of
		incorporation/	Issued and fully paid
		establishment	share capital/	Attributable equity
Name of subsidiary	Note	and operation	registered capital	interest	held (Note)	Principal activities
				31 December	31 December
				2008	2007
Ally Plus Limited	10	Hong Kong	1 share of HK$1	100%	—	Investment holding
北京億達房地產開發有限公司	1	PRC	RMB30,000,000	100%	100%	Property development
Beijing Yida Estate
Development Co., Ltd.
北京超騰投資管理有限公司	2	PRC	RMB10,000,000	100%	—	Properties investment
Beijing Chaoteng
Investment Management
Co., Ltd.
Beijing Zhonghui Garden	2	PRC	USD2,250,000	100%	100%	Property development
Consulting Co., Ltd.						and consulting service
Beijing Zhongtian Hongye	3, 14	PRC	RMB120,000,000	—	100%	Property development
Real Estate Consulting
Co. Ltd.
Billion Pier Limited	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Bright Jade Investments	9	BVI	1 share of USD1	100%	—	Investment holding
Limited
Bright Pearl Enterprises	9	BVI	1 share of USD1	100%	100%	Investment holding
Limited
Caperidge Group Limited	9	BVI	1,000 no par value	100%	100%	Investment holding
			shares
Channel Pacific Limited	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Chengdu Shui On Huida	4	PRC	RMB650,000,000	100%	100%	Property development
Property Co., Ltd.
Chengdu Shui On Huiyuan	4, 13	PRC	USD6,000,000	—	100%	Property development
Property Co., Ltd.
China Central Properties	9	BVI	1 share of USD1	100%	100%	Investment holding
(BVI) Limited
重慶豐德豪門實業有限公司	5	PRC	RMB10,000,000	100%	100%	Property development
Chongqing Fengde
Haomen Properties
Co., Ltd.
重慶豐德南洋實業有限公司	5	PRC	RMB10,000,000	100%	100%	Property development
Chongqing Fengde
Nanyang Properties
Co., Ltd.

— 191 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

		Place of
		incorporation/	Issued and fully paid
		establishment	share capital/	Attributable equity
Name of subsidiary	Note	and operation	registered capital	interest	held (Note)	Principal activities
				31 December	31 December
				2008	2007
Chongqing Fengde Land	5	PRC	USD35,896,000	100%	100%	Investment holding
Limited (formerly
known as Chongqing
Fengde Real Estate
Development Company
Limited)
重慶豐德尊鼎實業有限公司	5	PRC	RMB10,000,000	100%	100%	Property development
Chongqing Fengde
Zunding Properties Co.,
Ltd.
Chongqing Hui Zheng	5	PRC	USD75,000,000	100%	100%	Property development
Properties Co., Ltd.
Clear Max Enterprises	9	BVI	1 share of USD1	100%	—	Investment holding
Limited
Coral Waters (Barbados)	11	Barbados	60,000,000 Class A	100%	I00%	Investment holding
SRL			quotas
Country Yard Limited	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Dalian Shengyuan Real	6	PRC	RMB50,000,000	100%	100%	Investment holding
Estate Consulting Co.,
Ltd.
Dalian Xiwang Building	6, 14	PRC	USD60,000,000	—	100%	Property development
Co., Ltd.
Donfield Limited	9	BVI	1 share of USD1	100%	100%	Investment holding
Fair China Investments	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Limited
FD Real Estate Investments	9	Cayman Islands	10 shares of	100%	100%	Investment holding
Limited			USD1 each
Giant Sun Investments	9	BVI	1 share of USD1	100%	100%	Investment holding
Limited
Glorious Dragon Holdings	9	BVI	1 share of USD1	100%	—	Investment holding
Limited
Gracious Spring Limited	9	BVI	100 shares of USD1	—	100%	Investment holding
Grow Reach Limited	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
廣州英發房地產開發有限公司	7, 15	PRC	USD37,500,000	100%	—	Property development
Guangzhou Infotach
Property Development
Co., Ltd.
Honest Joy Investments	9, 12	BVI	100 shares of USD1	N/A	N/A	Investment holding
Limited			each

— 192 —

APPENDIX III

ACCOUNTANTS’ REPORT ON CCP

		Place of
		incorporation/	Issued and fully paid
		establishment	share capital/	Attributable equity
Name of subsidiary	Note	and operation	registered capital	interest	held (Note)	Principal activities
				31 December	31 December
				2008	2007
Infotach Assets Limited	9	BVI	50,000 shares of	100%	—	Investment holding
			USD1 each
Jade Circle International	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Limited
Jumbo Grow Limited	9	BVI	1 share of USD1	100%	100%	Investment holding
Lead First Enterprise	9	BVI	1 share of USD1	100%	100%	Investment holding
Limited
Lead Wealthy Investments	10	Hong Kong	1 share of HK$1	100%	—	Investment holding
Limited
Loyal Bright Limited	9	BVI	1 share of USD1	100%	100%	Investment holding
Lucky Miracle Holdings	9	BVI	1 share of USD1	100%	—	Investment holding
Limited
Mass Relief International	9	BVI	1 share of USD1	100%	100%	Investment holding
Limited
Metro Sea Limited	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Mount Shine Limited	9	BVI	1 share of USD1	100%	100%	Investment holding
Mountain Breeze	11, 14	Barbados	2 Class A common	—	100%	Investment holding
(Barbados) SRL			quotas
Mountain Flower	11	Barbados	1 common quota	100%	100%	Investment holding
(Barbados) SRL
Mountain Mist (Barbados)	11	Barbados	15,000,000 common	100%	100%	Investment holding
SRL			quotas
Mountain Snow (Barbados)	11, 13	Barbados	200 Class A common	—	100%	Investment holding
SRL			quotas
Pacific Hill Limited	12	Hong Kong	1 share of HK$1	N/A	N/A	Investment holding
Prosper Idea Limited	9	BVI	50 shares of USD1	100%	100%	Investment holding
			each
Prosper Town Investments	10	Hong Kong	1 share of HK$1	100%	—	Inactive
Limited
Qingdao Zhongcheng	8	PRC	HK$400,000,000	100%	100%	Property development
Yinchu Development
Co., Ltd.
Rise Base Limited	9	BVI	1 share of USD1	100%	100%	Investment holding
Shenyang Shui On Hua Hui	11	PRC	—	100%	—	Wholesaling of
Construction Materials						construction materials
Co., Ltd.

— 193 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

		Place of
		incorporation/	Issued and fully paid
		establishment	share capital/	Attributable equity
Name of subsidiary	Note	and operation	registered capital	interest	held (Note)	Principal activities
				31 December	31 December
				2008	2007
Shenyang Hua Hui	12	PRC	USD70,000,000	N/A	N/A	Property development
Properties Co., Ltd.
Shinehero Limited	9	BVI	1 share of USD1	100%	100%	Investment holding
Shorewood Investments	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Limited
Silver Jumbo Limited	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Sino Harvest Development	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Limited
Sino Spring Investments	9	BVI	1 share of USD1	100%	100%	Investment holding
Limited
Tianjin Ruizhong Real	2	PRC	USD3,750,000	100%	100%	Property development
Estate Co., Ltd.
Tianjin Zhongan Real	2	PRC	USD3,750,000	100%	100%	Property development
Estate Co., Ltd.
Tianjin Zhonghui Real	2	PRC	USD3,750,000	100%	100%	Property development
Estate Co., Ltd.
Value Deep Limited	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Well Path Holdings Limited	10	Hong Kong	1 share of HK$1	100%	—	Investment holding
Win Dynamic Investments	10	Hong Kong	1 share of HK$1	100%	100%	Inactive
Limited
Win Goal Investments	10	Hong Kong	1 share of HK$1	100%	100%	Investment holding
Limited
Wise Keen International	10	Hong Kong	1 share of HK$1	100%	—	Inactive
Limited
Wise Union Holdings	9	BVI	1 share of USD1	100%	100%	Investment holding
Limited
天津匯富投資諮詢有限公司	2	PRC	RMB200,000	100%	—	Investment
						consultancy

Note:

The Company directly holds the equity interest in China Central Properties (BVI) Limited. All other equity interests shown above are indirectly held by the Company.

The statutory audited financial statements of the company for the years ended 31 December 2008 and 31 December 2007 which were prepared in accordance with generally accepted accounting principles in the PRC (“PRC GAAP”) and were audited by 萬隆會計師事務所有限公司大連分公司.
The statutory audited financial statements of these companies for the years ended 31 December 2008 and 31 December 2007, if applicable, which were prepared in accordance with PRC GAAP and were audited by 北京中瑞誠聯合會計師事務所.

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ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

The statutory audited financial statements of the company for the period ended 31 December 2007 which were prepared in accordance with PRC GAAP and were audited by 中勤萬信會計師事務所.
The statutory audited financial statements of these companies for the years ended 31 December 2008 and 31 December 2007 which were prepared in accordance with PRC GAAP and were audited by 四川大家會計師事務所.
The statutory audited financial statements of these companies for the years ended 31 December 2008 and 31 December 2007 which were prepared in accordance with PRC GAAP and were audited by 重慶中咨會計師事務所 and 重慶鉑瑪會計師事務所有限公司 respectively.
The statutory audited financial statements of these companies for the years ended 31 December 2008 and 31 December 2007 which were prepared in accordance with PRC GAAP and were audited by 大連君安會計師事務所有限公司.
The statutory audited financial statements of these companies for the year ended 31 December 2008 which were prepared in accordance with PRC GAAP and were audited by 廣州市東方會計師事務所有限公司.
The statutory audited financial statements of these companies for the years ended 31 December 2008 and 31 December 2007 and were audited by 山東大地會計師事務所 which were prepared in accordance with PRC GAAP.
No audited financial statements have been prepared for these companies which are incorporated in a country where there were no statutory audit requirements.
The statutory audited financial statements of these companies for the Relevant Periods or the financial periods since their respective dates of incorporation which were prepared in accordance with Hong Kong Financial Reporting Standards issued by Hong Kong Institute of Certified Public Accountants and were audited by us.
No audited financial statements have been prepared for these companies since their respective dates of incorporation. However, we have reviewed all the relevant transactions of these companies for the Relevant Periods or since their respective dates of incorporation, which were prepared in accordance with IFRS issued by ISAB, for the year ended 31 December 2008 and period ended 31 December 2007.
Subsequent to year ended 31 December 2008, the Group purchased the remaining 30% equity interest in Honest Joy from a joint venture partner. Accordingly, Honest Joy and its subsidiaries, Pacific Hill Limited and Shenyang Hua Hui Properties Co., Ltd., were changed from 70%-owned jointly controlled entities to wholly-owned subsidiaries of the Group. Details of the transaction is set out in note 41(i).
Subsequent to year ended 31 December 2008, the Group purchased 50% equity interest in Mountain Snow from a subsidiary of a shareholder of the Company for the consideration of USD100. Accordingly, Mountain Snow and its subsidiary, Chengdu Shui On Huiyuan Property Co., Ltd., were changed from 50%-owned jointly controlled entities to wholly-owned subsidiaries of the Group.
These companies were disposed of during the year ended 31 December 2008, accordingly, the issued and fully paid up capital represented those paid up as at 31 December 2007.
Subsequent to year ended 31 December 2008, the Group injected capital of USD8,000,000 into Guangzhou Infotach Property Development Co., Ltd. Accordingly the paid up registered capital increased from USD29,500,000 to USD37,500,000.

40. TOTAL ASSETS LESS CURRENT LIABILITIES/NET CURRENT ASSETS

The Group’s and the Company’s total assets less current liabilities at 31 December 2008 amounted to approximately USD837,778,000 (2007: USD842,272,000) and USD795,348,000 (2007: USD771,068,000) respectively. The Group’s and Company’s net current assets at 31 December 2008 amounted to approximately USD702,009,000 (2007: USD530,775,000) and USD289,587,000 (2007: USD745,200,000) respectively.

— 195 —

ACCOUNTANTS’ REPORT ON CCP

APPENDIX III

41. POST BALANCE SHEET EVENTS

(i) On 29 January 2009, the Group entered into an agreement with Perfect Eagle Group Limited (the “Seller”), a wholly-owned subsidiary of a US financial services company, for the purchase by the Group of the Seller’s 30% equity interest in Honest Joy Investments Limited (“Honest Joy”), together with the related shareholders loan made by the Seller to Honest Joy, for a consideration of USD5,600,000. Prior to the acquisition, Honest Joy was a 70% jointly controlled entity of the Group and the holding company for the development of the Shenyang Central Plaza Phase I project located in Shenyang, the PRC. An estimated gain arising from the aforesaid acquisition amounted to approximately USD13 million, representing the excess of the provisional amounts of the Group’s share of additional interest in the net assets of Honest Joy and shareholder loan attributable to the acquisition over the cost of acquisition, which is subject to adjustment upon the finalisation of the fair value of net assets acquired. Details of the transaction are set out in an announcement of the Company dated 29 January 2009.
(ii) On 31 March 2009, CCP made an announcement as follows:

“The Board of China Central Properties Limited refers to the announcement made by CCP on 12 March 2009 and notes the following announcement which has been made today by Shui On Construction and Materials Limited (“SOCAM”):

“This announcement is made pursuant to Rule 13.09(1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The board of directors of SOCAM (the “Company”) wishes to announce that the Company has made an approach to CCP, which may or may not lead to an offer being made by the Company for CCP. There can be no assurance that an offer will be made but if made, the offer may constitute a very substantial acquisition on the part of the Company under Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Shareholders and potential investors are advised to exercise due caution when dealing in the securities of the Company. A further announcement will be made as appropriate in due course.”

The CCP Board emphasises that this matter is at an early stage and that there can be no assurance that an offer by SOCAM will be forthcoming. A further statement by the CCP Board will be issued in due course.”

B. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements of the Group or any of its subsidiaries have been prepared in respect of any period subsequent to 31 December 2008.

Yours faithfully Deloitte Touche Tohmatsu Certified Public Accountants Hong Kong

— 196 —

APPENDIX IV MANAGEMENT DISCUSSION AND ANALYSIS ON CCP

1. MANAGEMENT DISCUSSION AND ANALYSIS ON CCP

Review of the operating results for the year ended 31 December 2008 (“FY2008”) and for the period ended 31 December 2007 (“FP2007”)

Turnover

Turnover increased to US$326.18 million (HK$2,539.73 million) in FY2008 from US$63.05 million (HK$491.88 million) in FP2007. The increase was mainly due to the disposal of Beijing Shengyuan Centre, Dalian Xiwang Building, part of Qingdao Central International Plaza, and part of Chengdu Central Point Phase I.

Cost of sales

Cost of sales increased to US$292.19 million (HK$2,275.03 million) in FY2008 from US$57.69 million (HK$450.07 million) in FP2007. This increase was primarily due to recognition of construction and development costs relating to the sale of the aforementioned properties.

Gross profit

Gross profit was US$34.00 million (HK$264.70 million) in FY2008 (FP2007 — US$5.36 million, HK$41.81 million). The gross profit margin for FY2008 was 10.42% compared with 8.50% for FP2007.

Gain on disposal of properties interests

Gain on disposal of properties interests increased to US$42.28 million (HK$329.17 million) in FY2008 (nil in FP2007) and was attributable to the disposal of Beijing Huapu Centre.

Other income

Other income increased to US$15.12 million (HK$117.71 million) in FY2008 (FP2007 — US$10.29 million, HK$80.31 million) comprised mainly bank and imputed interest income and was related to 12 months as compared with approximately 6.5 months operation in 2007.

Investment management fee to a related company

Investment management fee to a related company increased to US$12.83 million (HK$99.91 million) in FY2008 from US$3.39 million (HK$26.42 million) in FP2007 due to higher base fee paid on a much larger investment portfolio and performance fee paid for the overall positive results on the sale of CCP’s property investments.

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MANAGEMENT DISCUSSION AND ANALYSIS ON CCP

APPENDIX IV

Other operating expenses

Other operating expenses of US$27.98 million (HK$217.83 million) in FY2008 (FP2007 — US$13.35 million, HK$104.12 million) consisted of net exchange losses of US$12.21 million (HK$95.10 million) as well as sales, marketing and staff expenses, the increase of which were in line with a full year’s operation and the much increased activities in FY2008.

Finance costs

Finance costs increased to US$26.01 million (HK$202.48 million) in FY2008 from US$21.52 million (HK$167.90 million) in FP2007 due mainly to a full year’s amortised interest expense of US$23.26 million (HK$181.07 million) on convertible bonds.

Changes in fair value of derivative financial instruments

Changes in fair value of derivative financial instruments decreased to US$1.93 million (HK$15.04 million) in FY2008 from US$31.40 million (HK$244.97 million) in FP2007. The combined net effect of the changes in value of the embedded derivatives in relation to convertible bonds, which was chargeable to the income statement, amounted to US$3.11 million (HK$24.22 million) in FY2008 and compared with US$15.82 million (HK$123.42 million) in FP2007. This material favourable change is the result of the substantial downward movement in the CCP’s share price and the general deterioration in market environment. Also included under this heading was a net loss from non-deliverable foreign exchange contracts amounting to US$1.18 million (HK$9.18 million) as compared with a gain of US$15.58 million (HK$121.55 million) in FP2007.

Share of loss of jointly controlled entities

Share of loss of jointly controlled entities increased to US$2.54 million (HK$19.75 million) in FY2008 from a gain of US$0.96 million (HK$7.46 million) in FP2007 which were mainly exchange differences and imputed interests relating to the operation of these entities.

Gain on re-purchase of own convertible bonds

Gain on re-purchase of own convertible bonds amounted to US$2.49 million (HK$19.40 million) in FY2008 from nil in FP2007. The increase was derived from the repurchase of US$26.00 million convertible bonds during FY2008 at discounts to the face value.

Profit before tax

Profit before tax increased to US$26.46 million (HK$206.05 million) in FY2008 from US$9.76 million (HK$76.11 million) in FP2007.

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MANAGEMENT DISCUSSION AND ANALYSIS ON CCP

APPENDIX IV

Income tax expense

Income tax expense increased to US$10.77 million (HK$83.87 million) in FY2008 from US$6.10 million (HK$47.58 million) in FP2007 related to various taxes in connection with the disposals of properties.

Profit for the year/period

Profit for the year/period increased to US$15.69 million (HK$122.18 million) in FY2008 from US$3.66 million (HK$28.52 million) in FP2007 due to a combination of the movements in the items mentioned above.

Financial Resources, Capital Structure and Liquidity

In FP2007, CCP has interest-bearing bank borrowings of US$214.25 million (HK$1,671.04 million). The amounts denominated in RMB were secured by properties interests and pledged bank deposits of US$204.28 million (HK$1,593.31 million) and US$128.59 million (HK$1,002.95 million) respectively. In addition, CCP has US$-denominated 2.00% convertible bonds of US$189.85 million (HK$1,480.70 million), in which the straight debt portion amounted to US$173.22 million (HK$1,351.04 million) with related embedded derivatives amounting to US$16.63 million (HK$129.66 million).

In FY2008, part of the substantial cash generated from sale of properties during the year was used for the repayment of bank loans. As a result, at the end of FY2008, interest-bearing bank borrowings were reduced to US$62.81 million (HK$486.76 million), in which the amount denominated in RMB were secured by certain properties under development for sale and pledged bank deposits of US$65.58 million (HK$508.24 million) and US$4.39 million (HK$34.02 million) respectively. In addition, CCP has US$-denominated 2.00% convertible bonds of US$180.91 million (HK$1,401.91 million), which included a straight debt portion of US$169.43 million (HK$1,312.96 million) and embedded derivatives of US$11.48 million (HK$88.96 million).

At 31 December 2008, CCP had bank balances and cash and pledged bank deposits amounting to US$259.41 million (HK$2,010.26 million) compared with US$239.55 million (HK$1,868.36 million) at the end of FP2007. At the end of FY2008 and FP2007, total debts, including outstanding convertible bonds, were respectively US$232.24 million (HK$1,799.71 million) and US$387.47 million (HK$3,022.07 million). The net debt position at the end of FP2007 of US$147.92 million (HK$1,153.71 million) was reversed to a net cash position of US$27.17 million (HK$210.55 million) at 31 December 2008. There was therefore no net debt to equity ratio at 31 December 2008 whilst that at 31 December 2007 was 24.54%.

— 199 —

MANAGEMENT DISCUSSION AND ANALYSIS ON CCP

APPENDIX IV

Contingent liabilities

In FY2008, CCP and its wholly-owned subsidiary, CCP (BVI), have jointly given an indemnity in favour of a shareholder of CCP with respect to certain guarantees granted by the shareholder of CCP in favour of a bank as security for a bank loan granted to a former wholly-owned subsidiary of CCP (“Subsidiary”) with an outstanding amount of US$79.00 million (HK$612.20 million). The Subsidiary was sold to an independent third party who agreed to procure the repayment of the bank loan and this obligation is guaranteed by the parent company of the independent third party. In the opinion of the CCP Directors, the fair value of the indemnity is insignificant at initial recognition and the CCP Directors consider that the possibility of the default of the parties involved is remote, accordingly, no value has been recognised in the Financial Information.

Capital commitments

The capital commitment of CCP Group and its share in a jointly controlled entity, which has been contracted for but not provided in the Financial Information in FY2008 and FP2007 was US$26.85 million (HK$208.06 million) and nil respectively.

Exchange rate risk

CCP Group’s transactions were mainly conducted in RMB, the functional currency of CCP and its subsidiaries. However, CCP Group held certain cash balances denominated in US$. The exposure to exchange rate risk is considered low given CCP manages this risks through the hedging of forward currency exposure and by closely monitoring the movement of the foreign currency exchange rates.

Credit risk

CCP Group has a certain concentration of credit risk as 47.27% on trade and other receivables which was due from CCP Group’s largest customer in FY2008 (nil in FP2007). The credit risk arising from amounts due from jointly-controlled entities and related companies is low as sufficient net assets are available for repayment of the relevant debts.

Acquisition/disposal of subsidiaries

In FY2008, CCP has acquired Beijing Chaoteng Investment Management Co., Ltd., which held Beijing Fengqiao Villas, for US$28.08 million (HK$217.58 million), and Infotach Assets Limited, which held Guangzhou Chuangyi Centre, for US$119.58 million (HK$926.68 million). In FP2007, CCP has acquired five property holding companies, which held interests of five distressed property development projects, upon its listing on AIM, for US$234.87 million (HK$1,831.88 million), and FD Real Estate Investments Limited, which held Chongqing Fengde Portfolio, for US$36.96 million (HK$288.29 million).

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APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS ON CCP

In FY2008, CCP has disposed of its interest in Beijing Huapu Centre through the disposal of 100% equity interest in Mountain Breeze (Barbados) SRL, which has 100% interest in Beijing Zhongtian Hongye Real Estate Consulting Company Limited for RMB760.00 million (HK$824.05 million), resulting in a gain of US$42.28 million (HK$329.17 million).

Employees

Staff costs (including directors’ emoluments) of CCP comprise of the following:

	Year ended	Year ended	Period ended	Period ended
	31 December		31 December
		2008		2007
	HK$ million	US$ million HK$ million		US$ million
Directors’ emoluments
Directors’ emoluments excl.
retirement benefit costs	8.45	1.09	4.41	0.57
Retirement benefit costs	0.17	0.02	0.13	0.01
	8.62	1.11	4.54	0.58
Other staff costs
Other staff costs excl. retirement
benefit costs	17.93	2.30	5.50	0.71
Retirement benefit costs	1.64	0.21	0.44	0.06
	19.57	2.51	5.94	0.77
Total	28.19	3.62	10.48	1.35

The number of employees at 31 December 2007 and 31 December 2008 was 125 (of which 10 were located in Hong Kong and 115 were located in the PRC) and 226 (of which 8 were located in Hong Kong and 218 were located in the PRC) respectively.

Future plans

Upon the completion of the Offer, CCP will continue to engage in the development of partially-completed properties and medium size stand alone greenfield development in major and secondary cities in the PRC. SOCAM expects to fund such developments with its internally generated cash flow as well as project financing from banks.

— 201 —

APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLAREGD GROUP

Set out below are the unaudited pro forma statement of assets and liabilities of the Enlarged Group and the unaudited statement of adjusted consolidated net tangible assets of the SOCAM Group and the unaudited pro forma statement of adjusted consolidated net tangible assets of the Enlarged Group (the “Unaudited Pro Forma Financial Information”). They have been prepared for the purpose of illustrating the effects of the Offer as if it had been completed on 31 December 2008. The Unaudited Pro Forma Financial Information has been prepared based on the audited consolidated balance sheet of the SOCAM Group at 31 December 2008 as set out in Appendix II of this circular, and the audited consolidated balance sheet of the CCP Group at 31 December 2008 as extracted from the accountants’ report thereon set out in Appendix III of this circular, after making certain pro forma adjustments as set out below.

The Unaudited Pro Forma Financial Information of the Enlarged Group has been prepared to cover the following scenarios:

(1) the first scenario (Scenario 1) assumes that all the CCP Shareholders to whom the Offer is made, other than those who have elected to accept the Mixed Offer under the terms of their irrevocable undertakings, elect to accept the Share Offer; and
(2) the second scenario (Scenario 2) assumes that all the CCP Shareholders to whom the Offer is made, other than those who have elected to accept the Share Offer under the terms of their irrevocable undertakings, elect to accept the Mixed Offer.

The Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the financial position of the Enlarged Group at 31 December 2008 or at any future date.

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

1. UNAUDITED PRO FORMA STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP AT 31 DECEMBER 2008

Scenario 1

	SOCAM	CCP Group
	Group at 31	at 31							Pro forma
	December	December							Enlarged
	2008	2008		Unaudited pro forma adjustments					Group Total
	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
		(Note 1)	(Note 2)	(Note 3)	(Note 4)	(Note 5)	(Note 6)	(Note 7)
Non-current Assets
Property, plant and equipment	28.8	21.1	—	—	—	0.9	—	—	50.8
Prepaid lease payments	43.9	—	—	—	—	—	—	—	43.9
Interests in jointly controlled
entities	3,903.1	226.0	—	—	—	355.7	—	43.2	4,528.0
Available-for-sale investments	970.4	—	—	—	—	—	—	—	970.4
Interests in associates	2,430.0	—	—	(2,108.7)	—	—	—	—	321.3
Investment in convertible bonds	194.2	—	(194.2)	—	—	—	—	—	—
Club memberships	1.2	—	—	—	—	—	—	—	1.2
Amounts due from jointly controlled
entities	553.8	769.5	—	—	—	233.7	(1,313.5)	—	243.5
Amounts due from associates	567.9	—	—	—	—	—	—	—	567.9
Pledged bank deposits	—	34.0	—	—	—	—	—	—	34.0
	8,693.3	1,050.6	(194.2)	(2,108.7)	—	590.3	(1,313.5)	43.2	6,761.0
Current Assets
Inventories	12.8	—	—	—	—	—	—	—	12.8
Prepaid lease payments	1.0	—	—	—	—	—	—	—	1.0
Properties held for sale	52.8	75.7	—	(0.7)	—	—	—	2.9	130.7
Properties under development for
sale	185.7	3,059.3	—	(13.1)	—	1,054.6	—	204.7	4,491.2
Debtors, deposits and prepayments	644.1	891.0	—	—	—	—	—	—	1,535.1
Derivative financial instruments	12.7	—	(12.7)	—	—	—	—	—	—
Amounts due from customers for
contract work	219.1	—	—	—	—	—	—	—	219.1
Amounts due from jointly controlled
entities	481.3	249.9	—	—	—	1.7	(145.6)	—	587.3
Amounts due from associates	49.0	—	—	—	—	—	(32.4)	—	16.6
Amounts due from related
companies	46.5	27.2	—	—	—	51.4	(78.6)	—	46.5
Loan to a related company	—	113.2	—	—	—	—	—	—	113.2
Taxation recoverable	0.1	—	—	—	—	—	—	—	0.1
Pledged bank deposits	76.0	—	—	—	—	—	—	—	76.0
Bank balances, deposits and cash	617.1	1,973.3	(1,039.3)	—	(118.7)	84.6	—	—	1,517.0
	2,398.2	6,389.6	(1,052.0)	(13.8)	(118.7)	1,192.3	(256.6)	207.6	8,746.6
Assets classified as held for sale	444.6	—	—	—	—	—	—	—	444.6
	2,842.8	6,389.6	(1,052.0)	(13.8)	(118.7)	1,192.3	(256.6)	207.6	9,191.2

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

	SOCAM	CCP Group
	Group at 31	at 31							Pro forma
	December	December							Enlarged
	2008	2008		Unaudited pro forma adjustments					Group Total
	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million	HK$ million
		(Note 1)	(Note 2)	(Note 3)	(Note 4)	(Note 5)	(Note 6)	(Note 7)
Current Liabilities
Creditors and accrued charges	867.5	326.0	—	—	—	304.1	—	—	1,497.6
Amounts due to customers for
contract work	132.1	—	—	—	—	—	—	—	132.1
Amounts due to jointly controlled
entities	344.7	106.0	—	—	—	—	(51.4)	—	399.3
Amounts due to associates	28.1	—	—	—	—	—	(28.1)	—	—
Amounts due to related companies	1.8	18.3	—	—	—	1,469.5	(1,487.8)	—	1.8
Loan from related companies	—	44.5	—	—	—	—	—	—	44.5
Taxation payable	11.3	70.2	—	—	—	—	—	—	81.5
Derivative financial instruments	0.8	88.8	(88.8)	—	—	—	—	—	0.8
Bank borrowings due within one
year	3,447.5	259.6	—	—	—	—	—	—	3,707.1
Foreign exchange forward contract	—	44.1	—	—	—	—	—	—	44.1
Convertible bonds	430.5	—	—	—	—	—	—	—	430.5
	5,264.3	957.5	(88.8)	—	—	1,773.6	(1,567.3)	—	6,339.3
Liabilities associated with assets
classified as held for sale	62.6	—	—	—	—	—	—	—	62.6
	5,326.9	957.5	(88.8)	—	—	1,773.6	(1,567.3)	—	6,401.9
Net Current (Liabilities) Assets	(2,484.1)	5,432.1	(963.2)	(13.8)	(118.7)	(581.3)	1,310.7	207.6	2,789.3
Total Assets Less Current
Liabilities	6,209.2	6,482.7	(1,157.4)	(2,122.5)	(118.7)	9.0	(2.8)	250.8	9,550.3
Non-current Liabilities
Bank borrowings	1,070.0	226.4	—	—	—	—	—	—	1,296.4
Convertible bonds	—	1,311.0	(1,311.0)	—	—	—	—	—	—
Defined benefit scheme liabilities	84.3	—	—	—	—	—	—	—	84.3
Other non-current liabilities	—	3.3	—	—	—	—	—	—	3.3
Deferred tax liabilities	0.6	—	—	—	—	—	—	267.6	268.2
	1,154.9	1,540.7	(1,311.0)	—	—	—	—	267.6	1,652.2
Net Assets	5,054.3	4,942.0	153.6	(2,122.5)	(118.7)	9.0	(2.8)	(16.8)	7,898.1
Total equity attributable to equity
holders of SOCAM/CCP	4,999.2	4,942.0	153.6	(2,122.5)	(118.7)	—	(2.8)	(16.8)	7,834.0
Minority interests	55.1	—	—	—	—	9.0	—	—	64.1
Total equity	5,054.3	4,942.0	153.6	(2,122.5)	(118.7)	9.0	(2.8)	(16.8)	7,898.1

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

Scenario 2

SOCAM Group at 31 December 2008 HK$ million 28.8 43.9 3,903.1 970.4 2,430.0 194.2 1.2 553.8 567.9 —	CCP Group at 31 December 2008 HK$ million (Note 1) 21.1 — 226.0 — — — — 769.5 — 34.0	Unaudited pro fo	rma adjustments	Pro forma Enlarged Group Total HK$ million 50.8 43.9 4,528.0 970.4 321.3 — 1.2 243.5 567.9 34.0
		HK$ million HK$ million HK$ million HK$ million HK$ million HK$ million (Note 2) (Note 3) (Note 4) (Note 5) (Note 6) (Note 7) — — — 0.9 — — — — — — — — — — — 355.7 — 43.2 — — — — — — — (2,108.7) — — — — (194.2) — — — — — — — — — — — — — — 233.7 (1,313.5) — — — — — — — — — — — — — (194.2) (2,108.7) — 590.3 (1,313.5) 43.2 — — — — — — — — — — — — — (0.7) — — — 2.9 — (13.1) — 1,054.6 — 204.7 — — — — — — (12.7) — — — — — — — — — — — — — — 1.7 (145.6) — — — — — (32.4) — — — — 51.4 (78.6) — — — — — — — — — — — — — — — — — — — (1,039.3) — (414.2) 84.6 — — (1,052.0) (13.8) (414.2) 1,192.3 (256.6) 207.6 — — — — — — (1,052.0) (13.8) (414.2) 1,192.3 (256.6) 207.6 — — — 304.1 — — — — — — — — — — — — (51.4) — — — — — (28.1) — — — — 1,469.5 (1,487.8) — — — — — — — — — — — — — (88.8) — — — — — — — — — — — — — — — — — — — — — — — (88.8) — — 1,773.6 (1,567.3) — — — — — — — (88.8) — — 1,773.6 (1,567.3) — (963.2) (13.8) (414.2) (581.3) 1,310.7 207.6 (1,157.4) (2,122.5) (414.2) 9.0 (2.8) 250.8	HK$ million (Note 5) 0.9 — 355.7 — — — — 233.7 — —
8,693.3 12.8 1.0 52.8 185.7 644.1 12.7 219.1 481.3 49.0 46.5 — 0.1 76.0 617.1	1,050.6 — — 75.7 3,059.3 891.0 — — 249.9 — 27.2 113.2 — — 1,973.3			6,761.0 12.8 1.0 130.7 4,491.2 1,535.1 — 219.1 587.3 16.6 46.5 113.2 0.1 76.0 1,221.5
2,398.2 444.6	6,389.6 —			8,451.1 444.6
2,842.8 867.5 132.1 344.7 28.1 1.8 — 11.3 0.8 3,447.5 — 430.5	6,389.6 326.0 — 106.0 — 18.3 44.5 70.2 88.8 259.6 44.1 —			8,895.7 1,497.6 132.1 399.3 — 1.8 44.5 81.5 0.8 3,707.1 44.1 430.5
5,264.3 62.6	957.5 —			6,339.3 62.6
				6,401.9 2,493.8
6,209.2	6,482.7			9,254.8

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

SOCAM Group at 31 December 2008 HK$ million 1,070.0 — 84.3 — 0.6	CCP Group at 31 December 2008 HK$ million (Note 1) 226.4 1,311.0 — 3.3 —	Una	udited pro fo	rma adjustments	rma adjustments		Pro forma Enlarged Group Total HK$ million 1,296.4 — 84.3 3.3 268.2
		HK$ million HK$ million HK$ million HK$ million (Note 2) (Note 3) (Note 4) (Note 5) — — — — (1,311.0) — — — — — — — — — — — — — — — (1,311.0) — — — 153.6 (2,122.5) (414.2) 9.0 153.6 (2,122.5) (414.2) — — — — 9.0 153.6 (2,122.5) (414.2) 9.0	HK$ million (Note 4) — — — — —	HK$ million (Note 5) — — — — —	HK$ million (Note 6) — — — — —	HK$ million (Note 7) — — — — 267.6
1,154.9	1,540.7		—	—	—	267.6	1,652.2
5,054.3	4,942.0	153.6
4,999.2 55.1	4,942.0 —	153.6 —
5,054.3	4,942.0	153.6

Notes to the Unaudited Pro Forma Statement of Assets and Liabilities of the Enlarged Group:

For the purpose of preparing the unaudited pro forma statement of assets and liabilities of the Enlarged Group, the financial information of the CCP Group as extracted from the accountants’ report in Appendix III is translated into Hong Kong dollars at an exchange rate of US$1.0 = HK$7.7380.
The adjustment reflects:
i) early cancellation of all CCP’s outstanding convertible bonds (the “Bond Cancellation”) at its carrying amount at 31 December 2008 of HK$1,399.8 million comprising straight debt component at 31 December 2008 of HK$1,311.0 million and derivative financial instruments at 31 December 2008 of HK$88.8 million. The bondholders will receive 90% of the principal amount of the convertible bonds they hold in consideration of the early cancellation in a total amount of HK$1,213.7 million. The Bond Cancellation is subject to approval at the Bondholder Meeting.
ii) cancellation of the SOCAM Group’s investment in CCP’s convertible bonds at a carrying amount at 31 December 2008 of HK$206.9 million comprising straight debt component at 31 December 2008 of HK$194.2 million and derivative financial instruments at 31 December 2008 of HK$12.7 million for a proceed of HK$174.4 million.
The adjustment reflects:
i) elimination of the SOCAM Group’s interest in CCP classified as interests in associates at 31 December 2008 of HK$2,108.7 million upon completion of the Offer.
ii) elimination of unrealised profit on assets injected into CCP by the SOCAM Group in prior year and elimination of such unrealised profit capitalised by CCP.
The adjustment reflects the Offer for a total consideration of HK$1,615.4 million and HK$1,508.2 million for Scenarios 1 and 2 respectively which is financed by way of issuance of 166,673,875 new shares (“New SOCAM Shares”) in an amount of HK$1,496.7 million (as calculated based on the Company’s Closing Price of HK$8.98 on 8 May 2009) and

— 206 —

APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

cash consideration of HK$118.7 million for Scenario 1 (as calculated based on an exchange rate of £1 = HK$11.6567); and issuance of 121,827,518 New SOCAM Shares in an amount of HK$1,094.0 million (as calculated based on the Company’s Closing Price of HK$8.98 on 8 May 2009) and cash consideration of HK$414.2 million for Scenario 2 (as calculated based on an exchange rate of £1 = HK$11.6567).

At 31 December 2008, the SOCAM Group and the CCP Group each have a 40% effective interest in a property project in Shenyang. This property project is held by a jointly controlled entity of the SOCAM Group and the CCP Group. Upon completion of the Offer, this jointly controlled entity will be accounted for as a 80% owned subsidiary of the Enlarged Group.

In addition, the SOCAM Group and the CCP Group each have a 24.5% effective interest in a property project in Chengdu (the “Chengdu Project”). This property project is indirectly held by a 50/50 jointly controlled entity of the SOCAM Group and the CCP Group, which has a 49% interest in the Chengdu Project. Upon completion of the Offer, this jointly controlled entity will be accounted for as a wholly-owned subsidiary of the Enlarged Group. Furthermore, the Enlarged Group’s effective interest in the Chengdu Project will be 49% and the holding company of the Chengdu Project will then be accounted for as a 49% jointly controlled entity of the Enlarged Group.

The adjustment reflects i) elimination of interests in jointly controlled entities; ii) consolidation of assets and liabilities of subsidiaries; iii) equity accounting of the holding company of the Chengdu Project as a 49% jointly controlled entity of the Enlarged Group; and iv) recognition of additional minority interests by HK$9.0 million to HK$64.1 million.

The adjustment reflects elimination of intercompany balances within the Enlarged Group.
The adjustment reflects:
i) fair value adjustment on interests in jointly controlled entities, properties held for sale and properties under development for sale of approximately HK$43.2 million, HK$2.9 million and HK$204.7 million respectively; and
ii) recognition of deferred tax liabilities of approximately HK$267.6 million.

The fair value adjustment on the properties held by the CCP Group included in interests in jointly controlled entities, and properties held by the CCP Group classified as properties held for sale and properties under development for sale as at 28 February 2009 is made by reference to a valuation carried out as of 28 February 2009 by Savills Valuation and Professional Services Limited, independent qualified professional valuers not connected with the SOCAM Group (“Savills Valuation Report”) and the carrying value of the respective properties in the accountants’ report on CCP as at 31 December 2008.

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

Below is the reconciliation of the properties held by the CCP Group at 31 December 2008 and 28 February 2009.

		Properties		Interest in
		under		jointly
		development	Properties	controlled
		for sale	held for sale	entities	Total
		RMB million	RMB million	RMB million	RMB million
		(Note a)	(Note b)	(Note c)
Carrying amount of the properties held by the
CCP Group at 31 December 2008		2,702.1	66.9	911.4	3,680.4
Disposals after 31 December 2008	(Note d)	—	(4.0)	—	(4.0)
Acquisition after 31 December 2008	(Note e)	—	—	195.0	195.0
Increase in fair value of properties held by the
CCP Group at 28 February 2009		180.2	2.6	114.0	296.8
Other adjustments	(Note f)	—	(15.3)	—	(15.3)
Fair value of properties held by the CCP Group
at 28 February 2009, as per Savills Valuation
Report		2,882.3	50.2	1,220.4	4,152.9

Notes:

a. For accounting classification purposes, properties 2 to 3 and 6 to 10 in the Savills Valuation Report are classified as “Properties under development for sale” on the consolidated balance sheet of the CCP Group. The amount at 31 December 2008 is presented in RMB for this reconciliation purpose.
b. For accounting classification purposes, property 1 in the Savills Valuation Report is classified as “Properties held for sale” on the consolidated balance sheet of the CCP Group. The amount at 31 December 2008 is presented in RMB for this reconciliation purpose.
c. Properties 4 to 5 and 11 in the Savills Valuation Report are held by certain jointly controlled entities of the CCP Group. For accounting classification purposes, they are included under “Interests in jointly controlled entities” on the consolidated balance sheet of the CCP Group. The amount at 31 December 2008 is presented in RMB for this reconciliation purpose.
d. Since 31 December 2008, certain units of the property have been disposed of by the CCP Group. Therefore, adjustment is required in order to reconcile the valuation results as of 28 February 2009.
e. Since 31 December 2008, the CCP Group has acquired the remaining 30% interest in the Shenyang Central Plaza Phase I project (i.e. property 4 in the Savills Valuation Report). At 28 February 2009, the CCP Group’s interest in this project has been increased to 100%. Therefore, adjustment is required in order to reconcile the valuation results as of 28 February 2009.
f. As noted in the Savills Valuation Report, certain part of the Qingdao Central International Plaza (see also footnote 4 of property 1 in the Savills Valuation Report) are subject to court seizures. The market value of such part of the property of approximately RMB15.3 million has been excluded in the Savills Valuation Report.

Given the hypothetical nature of unaudited pro forma financial information and it is prepared for illustrative purpose only, the above mentioned pro forma adjustment did not reflect an actual fair value adjustment to be recorded by the SOCAM Group upon completion of the Offer.

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

2. UNAUDITED STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE SOCAM GROUP AND UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE ENLARGED GROUP AT 31 DECEMBER 2008

				Unaudited pro
		Adjusted		forma adjusted
		consolidated net		consolidated net	Unaudited pro
		tangible assets of	Adjusted	tangible assets of	forma adjusted
		the	consolidated net	the Enlarged	consolidated net
		SOCAM Group	tangible assets of	Group	tangible assets of
		attributable to	the SOCAM	attributable to	the Enlarged
		equity holders of	Group per	equity holders of	Group per
		the Company at	SOCAM Share at	the Company at	SOCAM Share at
		31 December	31 December	31 December	31 December
		2008	2008	2008	2008
		HK$’million	HK$	HK$’million	HK$
		(Note 1)	(Note 2)	(Note 3)	(Note 4)
Scenario	1	4,998.0	15.5	7,832.8	16.0
Scenario	2	4,998.0	15.5	7,537.3	17.0

Notes to the Unaudited Statement of Adjusted Consolidated Net Tangible Assets of the SOCAM Group and the Unaudited Pro Forma Statement of Adjusted Consolidated Net Tangible Assets of the Enlarged Group:

The adjusted consolidated net tangible assets of the SOCAM Group attributable to equity holders of the Company at 31 December 2008 of HK$4,998.0 million is calculated based on the audited consolidated net assets attributable to equity holders of the Company at 31 December 2008 of HK$4,999.2 million with an adjustment for club memberships at 31 December 2008 of HK$1.2 million. All these figures are extracted from the consolidated balance sheet of the SOCAM Group at 31 December 2008 as set out in Appendix II of this circular.
The adjusted consolidated net tangible assets of the SOCAM Group per SOCAM Share at 31 December 2008 is determined based on 321,901,239 SOCAM Shares in issue at 31 December 2008.
The unaudited pro forma adjusted consolidated net tangible assets of the Enlarged Group attributable to equity holders of the Company at 31 December 2008 of HK$7,832.8 million and HK$7,537.3 million for Scenario 1 and 2 respectively are calculated based on the consolidated net assets of the Enlarged Group at 31 December 2008 of HK$7,898.1 million

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

and HK$7,602.6 million for Scenario 1 and 2 respectively, with adjustments for club memberships and minority interests at 31 December 2008 of HK$1.2 million and HK$64.1 million respectively. All these figures are extracted from the unaudited pro forma statement of assets and liabilities of the Enlarged Group as set out in section 1 of this Appendix.

The unaudited pro forma adjusted consolidated net tangible assets of the Enlarged Group per SOCAM Share at 31 December 2008 is determined based on 488,575,114 and 443,728,757 SOCAM Shares for Scenario 1 and 2 respectively, assumed to be issued at 31 December 2008, representing 321,901,239 existing SOCAM Shares and 166,673,875 and 121,827,518 New SOCAM Shares to be issued pursuant to the Offer under Scenarios 1 and 2 respectively.

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APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

3. REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is the text of a report received from the reporting accountants of SOCAM, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [75 x 58] intentionally omitted <==

ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

TO THE DIRECTORS OF SHUI ON CONSTRUCTION AND MATERIALS LIMITED

We report on the unaudited pro forma financial information of Shui On Construction and Materials 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 major transaction in connection with the acquisition of all of the issued shares of China Central Properties Limited not already owned by the Group (the “Acquisition”) might have affected the financial information presented, for inclusion in sections 1 and 2 of Appendix V to the circular to be dated 15 May 2009 (“Circular”). The basis of preparation of the unaudited pro forma financial information is set out in Appendix V to the Circular.

Respective responsibilities of directors of the Company and reporting accountants

It is the responsibility solely of the directors of the Company to prepare the unaudited pro forma financial information in accordance with paragraph 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.

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.

— 211 —

APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

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 Hong Kong Institute of Certified Public Accountants. 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. This 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 judgments 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 future and may not be indicative of the financial position of the Group as at 31 December 2008 or any future date.

Opinion

In our opinion:

(a) the unaudited pro forma financial information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

Deloitte Touche Tohmatsu

Certified Public Accountants Hong Kong 14 May 2009

— 212 —

APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

4. INDEBTEDNESS

Borrowings

At 31 March 2009, being the latest practicable date for the purpose of this statement of indebtedness, the Enlarged Group had total borrowings amounting to approximately HK$6,494.20 million, details of which are as follows:

	HK$ million
Bank loans	4,725.59
Convertible bonds of SOCAM — aggregate outstanding principal amount	385.10
Convertible bonds of CCP — aggregate outstanding principal amount (Note)	1,154.83
Advances from jointly controlled entities/associates	184.12
Advances from related companies	44.56
	6,494.20
Secured	2,004.07
Unsecured	4,490.13
	6,494.20

Note:

The amount does not include SOCAM Group’s investment in Convertible Bonds of CCP with outstanding principal amount of approximately HK$193.76 million (US$25.00 million) at 31 March 2009. Furthermore, as one of the conditions to the Offer, the Convertible Bonds of CCP will be cancelled under the Bond Cancellation. Accordingly, this will be eliminated before completion of the Offer.

Mortgages and charges

At 31 March 2009, certain banking facilities granted to the Enlarged Group were secured by (i) pledged bank balance and deposit of approximately HK$111.79 million; (ii) interest in a subsidiary classified as held for sale with carrying amounts of approximately HK$226.80 million and the assignment of rights under the related sale and purchase agreement amounted to approximately HK$128.77 million; (iii) interest in and shareholders loans to certain subsidiaries with carrying amounts of approximately HK$875.58 million; (iv) interest in and shareholders loans to certain jointly controlled entities and an associate with carrying amounts of approximately HK$1,066.73 million; (v) SOCAM Group’s investment in convertible bonds of CCP with outstanding principal amount of approximately HK$193.76 million (US$25.00 million) and (vi) certain properties under development for sale with carrying amounts of approximately HK$521.70 million.

— 213 —

APPENDIX V PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

Contingent liabilities

At 31 March 2009, the Enlarged Group has performance bonds established amounting to approximately HK$166.67 million.

At 31 March 2009, the Enlarged Group has arranged standby documentary credits with banks amounting to HK$292.00 million to secure bank loans granted to subsidiaries of an associate.

At 31 March 2009, a subsidiary of the Enlarged Group had outstanding guarantees issued in favour of banks amounting to RMB7.78 million (approximately HK$8.82 million) in respect of mortgage facilities granted to the buyers of its residential properties.

At 31 March 2009, the Enlarged Group has given guarantees to a bank as security for a bank loan granted to a former wholly-owned subsidiary of the Enlarged Group (the “Subsidiary”) with an outstanding amount of RMB542.41 million (approximately HK$614.95 million). During the year ended 31 December 2008, the Subsidiary was sold to an independent third party who agreed to procure the repayment of the bank loan and this obligation is guaranteed by the parent company of the independent third party.

Other liabilities and material changes since 31 March 2009

Save as disclosed above and apart from intra-group liabilities and normal trade payables, at the close of business on 31 March 2009, the Enlarged Group did not have any outstanding loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances, debentures, mortgages, charges, finance lease commitments, guarantees or other material contingent liabilities.

Since 31 March 2009, the Enlarged Group has refinanced revolving bank loans of HK$814 million into long term bank loans and obtained new banking facilities of HK$840 million, which has not been drawn at the Last Practicable Date. The SOCAM Directors have confirmed that, save as disclosed above, there has been no material change in the indebtedness or contingent liabilities of the Enlarged Group since 31 March 2009.

5. WORKING CAPITAL

The SOCAM Directors are of the opinion that taking into account the Enlarged Group’s internal resources, available banking and other borrowing facilities, the Enlarged Group has sufficient working capital for its present requirements that is, for at least the next 12 months from the date of this circular.

— 214 —

APPENDIX VI

PROPERTY VALUATION

The following is the text of a letter, summary of values and valuation certificates, prepared for inclusion in this circular, received from Savills Valuation and Professional Services Limited, an independent valuer, in connection with their valuations as of 28 February 2009 of the properties held by CCP Group.

==> picture [72 x 71] intentionally omitted <==

The Directors Shui On Construction and Materials Limited 34th Floor Shui On Centre 6-8 Harbour Road Hong Kong

==> picture [118 x 93] intentionally omitted <==

15 May 2009

Dear Sirs,

In accordance with the instructions from Shui On Construction and Materials Limited (the “Company”) for us to value the properties held by China Central Properties Limited (“CCP”) and its subsidiaries (collectively the “CCP Group”) in the People’s Republic of China (the “PRC”), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of values of such properties as at 28 February 2009 (“Valuation Date”) for inclusion in a circular issued by the Company.

Our valuation of each of the properties is our opinion of its market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures, management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

— 215 —

APPENDIX VI

PROPERTY VALUATION

In valuing the properties in the PRC, we have assumed that transferable land use rights in respect of the properties for respective specific terms at nominal land use fees have been granted and that all requisite land premium payable has been fully settled. We have also assumed that the owners of the properties have enforceable titles to the properties and have free and uninterrupted rights to use, occupy or assign the properties for the whole of the respective unexpired terms as granted.

In valuing the properties in Group I, which are held by the CCP Group for sale in the PRC, we have adopted the direct comparison approach by making reference to the comparable market transactions as available in the market.

In valuing the properties in Groups II, III and IV, which are held by the CCP Group under development and for future development and contracted to be acquired by the CCP Group in the PRC, we have valued the properties on the basis that they will be developed and completed in accordance with the CCP Group’s latest development proposals provided to us. We have assumed that all consents, approvals and licences from relevant government authorities for these proposals have been obtained. In arriving at our opinion of values, we have adopted the “Direct Comparison Approach” by making reference to the comparable sales transactions as available in the market and where appropriate, have taken into account the construction costs that will be expended to complete the development to reflect the quality of the completed development. The capital value as if completed represents our opinion of the aggregate selling prices of the property assuming that it would have been completed as at the Valuation Date.

In valuing the properties in Groups V and VI, which are/were leased by the CCP Group in the PRC and Hong Kong, we have assigned no commercial values to such properties due to prohibition against assignments or sub-lettings or otherwise due to lack of substantial profit rents.

We have been provided with copies of extracts of title documents relating to the properties. However, we have not inspected the original documents to ascertain the existence of any amendments which may not appear on the copies handed to us. We have relied to a very considerable extent on information given by the Company’s legal adviser, Zhong Lun Law Firm, regarding the titles to the properties. We have also accepted advice given to us on such matters as planning approvals, statutory notices, easements, tenure, development proposals, outstanding construction costs to be expended, estimated completion dates, particulars of occupancy, identification of the properties, site and floor areas and all other relevant matters. Dimensions, measurements and areas included in the valuation certificates are based on information contained in the documents provided to us and are therefore only approximations. No on-site measurements have been made. We have had no reason to doubt the truth and accuracy of the information provided to us by the CCP Group which is material to our valuation. We have also advised by the CCP Group that no material facts have been omitted from the information provided.

We have inspected the exterior and where possible, the interior of the properties. During the course of our inspection, we did not note any serious defects. However, no structural survey has been made and we are therefore unable to report that the properties are free from rot, infestation or any other structural defect. No tests were carried out to any of the services.

— 216 —

APPENDIX VI

PROPERTY VALUATION

No allowance has been made in our valuation for any charges, mortgages or amounts owing on any property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

In valuing the properties, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and Valuation Standards on Properties (First Edition) published by the Hong Kong Institute of Surveyors.

According to the information prepared by the CCP Group, the potential tax liabilities which would arise on the disposal of the property interests under Groups I and II in this report at the amounts as valued by us comprise Chinese business tax, Chinese land appreciation tax, Chinese corporate income tax and Chinese stamp duty. As advised by the CCP Group, depending on the then status, there is likelihood of such liabilities being crystallized.

Unless otherwise stated, all money amounts stated in this report are in Renminbi.

Our summary of values and valuation certificates are attached.

Yours faithfully, For and on behalf of

Savills Valuation and Professional Services Limited Charles C K Chan

MSc FRICS FHKIS MCIArb RPS(GP) Managing Director

Note: Charles C K Chan has been a qualified valuer since 1987 and has about 24 years’ experience in the valuation of properties in Hong Kong and about 19 years’ experience in the valuation of properties in the PRC.

— 217 —

PROPERTY VALUATION

APPENDIX VI

		SUMMARY OF VALUES	SUMMARY OF VALUES	SUMMARY OF VALUES
							Market value in
					Interest			existing state
				Market value	attributable		attributable to the
			in	existing state as at	to the CCP		CCP Group as at
No.	Property			28 February 2009		Group	28	February 2009
Group I — Properties held by the CCP Group for sale in the					PRC
1.	Central International Plaza,			RMB50,170,000		100%		RMB50,170,000
	No. 19 Zhangzhouer Road,
	Shinan District,
	Qingdao,
	Shandong Province,
	PRC
2.	141 villas,			RMB680,000,000		100%	RMB680,000,000
	Fengqiao Villas,
	Xiangyang South Road,
	Mapo Town,
	Shunyi District,
	Beijing,
	PRC
	Sub-total:			RMB730,170,000			RMB730,170,000
Group II — Properties		held by the CCP		Group under development		in the	PRC
3.	Central Point,			RMB477,000,000		100%	RMB477,000,000
	Jinjiang Bridge East,
	No. 1 Renmin South Road Section		3,
	Wuhou District,
	Chengdu,
	Sichuan Province,
	PRC
4.	Phase I of Shenyang Central Plaza,			RMB650,000,000		100%	RMB650,000,000
	Junction of Bei Ling Main
	Street and Bashan	Road,
	Huanggu District,
	Shenyang,
	Liaoning Province,
	PRC
		Sub-total:		RMB1,127,000,000			RMB1,127,000,000

— 218 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
Group III — Properties held by		the CCP Group for future development in		the PRC
5.	Orient Home,	RMB810,000,000	24.5%	RMB198,450,000
	No. 139 Section 1 of
	Jiefang Road North,
	Jinniu District,
	Chengdu,
	Sichuan Province,
	PRC
6.	Ruiqi Building,	RMB551,300,000	100%	RMB551,300,000
	Junction of Zhong Hua
	Road and Xin Hua Road,
	Yuzhong District,
	Chongqing,
	PRC
7.	Haomen Apartment,	RMB50,000,000	100%	RMB50,000,000
	No. 15 Minsheng Road,
	Jiefangbei Area,
	Yuzhong District,
	Chongqing,
	PRC
8.	Nanyang Building,	RMB107,000,000	100%	RMB107,000,000
	Nanping Road North,
	Nanan District,
	Chongqing,
	PRC
9.	Qianxinian Building,	RMB167,000,000	100%	RMB167,000,000
	Jianxin Road West,
	Guanyinqiao,
	Jiangbei District,
	Chongqing,
	PRC

— 219 —

PROPERTY VALUATION

APPENDIX VI

No.
Property
Market value
in existing state as at
28 February 2009
Interest
attributable
to the CCP
Group
10.
Chuangyi Centre,
South of Tianhebei Road and
east of Longkoudong Road,
Tianhe District,
Guangzhou,
Guangdong Province,
PRC
RMB850,000,000
100%
Sub-total:
RMB2,535,300,000
Group IV — Property to be acquired by the CCP Group in the PRC
11.
A parcel of land located at
west and east of
Bailongjiang Road
(also known as Phase II of
Shenyang Central Plaza),
Huanggu District,
Shenyang,
Liaoning Province,
PRC
RMB930,000,000
40%
Sub-total:
RMB930,000,000
Group V — Properties leased by the CCP Group in the PRC
12.
An office unit on Level 13,
CYTS Plaza,
No. 5 South Dongzhimen
Road,
Dongcheng District,
Beijing,
PRC

Market value in
existing state
attributable to the
CCP Group as at
28 February 2009
RMB850,000,000

RMB1,923,750,000
RMB372,000,000

RMB372,000,000
No commercial
value

— 220 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
13.	An office unit on Level 13,			No commercial
	CYTS Plaza,			value
	No. 5 South Dongzhimen Road,
	Dongcheng District,
	Beijing,
	PRC
14.	Units 909AB and 910 on Level 9,			No commercial
	Diyang Plaza,			value
	No. 2 North Donsanhuan Road,
	Chaoyang District,
	Beijing,
	PRC
15.	Unit 1907 on Level 19,			No commercial
	International Harbor,			value
	No. 2 North Donsanhuan Road,
	Chaoyang District,
	Beijing,
	PRC
16.	Unit 788 on Level 7,			No commercial
	Hongkong Macau Center			value
	Swissotel,
	No. 5 North Chongyao Road,
	Dongcheng District,
	Beijing,
	PRC
17.	Unit T11-1101 on Level 11,			No commercial
	Seasons Park,			value
	No. 36 Dongzhimenwai Road,
	Dongcheng District,
	Beijing,
	PRC

— 221 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
18.	Unit T12-1801 on Level 18,			No commercial
	Seasons Park,			value
	No. 36 Dongzhimenwai Road,
	Dongcheng District,
	Beijing,
	PRC
19.	Unit 402 on Level 4,			No commercial
	Yudong Garden,			value
	Chaoyangmenwai Road,
	Chaoyang District,
	Beijing,
	PRC
20.	Unit 2201 on Level 22,			No commercial
	Building 2,			value
	No. 165 Youth Avenue,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
21.	Unit 2203 on Level 22,			No commercial
	Building 4,			value
	No. 65 Youth Avenue,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
22.	Unit 907 on Level 9,			No commercial
	Building 1,			value
	No. 211 Youth Avenue,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC

— 222 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
23.	Unit 106 on Level 10,			No commercial
	Building 2,			value
	No. 211 Youth Avenue,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
24.	Unit 1207 on Level 12,			No commercial
	Building 1,			value
	No. 211 Youth Avenue,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
25.	Unit 808 on Level 8,			No commercial
	Building A,			value
	No. 211-1 Youth Avenue,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
26.	An office unit on Level 21,			No commercial
	N.H.M International Plaza,			value
	No. 51 North Station Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
27.	An office unit on Level 22,			No commercial
	N.H.M International Plaza,			value
	No. 51 North Station Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC

— 223 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
28.	Unit 2002 on Level 20,			No commercial
	Milky Way International,			value
	No. 28 North Station Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
29.	Unit 1-1110 on Level 11,			No commercial
	Milky Way International,			value
	No. 28 North Station Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
30.	Unit 1709 on Level 17,			No commercial
	Milky Way International,			value
	No. 28 North Station Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
31.	Unit 1405 on Level 14,			No commercial
	Milky Way International,			value
	No. 28 North Station Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
32.	Unit 14-1517 on Level 15,			No commercial
	Splendor Tiandi Building 3,			value
	No. 128 Haerbin Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC

— 224 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
33.	Unit 1603 on Level 16,			No commercial
	Splendor Tiandi Building 1,			value
	No. 128 Haerbin Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
34.	Unit 14-1516 on Level 15,			No commercial
	Splendor Tiandi Building 3,			value
	No. 128 Haerbin Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
35.	Unit 1911 on Level 19,			No commercial
	Splendor Tiandi Building 1,			value
	No. 128 Haerbin Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
36.	Unit 1618 on Level 16,			No commercial
	Splendor Tiandi Building 2,			value
	No. 128 Haerbin Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
37.	Unit 1613 on Level 16,			No commercial
	Splendor Tiandi Building 2,			value
	No. 128 Haerbin Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC

— 225 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
38.	Unit 3-503 on Level 5,			No commercial
	No. 1 Bashan Road,			value
	Huanggu District,
	Shenyang,
	Liaoning Province,
	PRC
39.	Unit D-11-2 on Level 11,			No commercial
	Long Han City Garden,			value
	No. 84 North Station Road,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
40.	Unit 2-7-2 on Level 7,			No commercial
	No. 168 Lingwen Road,			value
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
41.	Two hotel rooms in			No commercial
	Ramada Hotel and Suites,			value
	No. 136 Huigong Street,
	Shenhe District,
	Shenyang,
	Liaoning Province,
	PRC
42.	Unit 1-1001-06 on Level 10,			No commercial
	Plaza Central,			value
	No. 8 Shuncheng Street,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC

— 226 —

PROPERTY VALUATION

APPENDIX VI

No. Property

Unit 3-103 on Level 1, Building 21, Zhong Hai Ming City, No. 8 Shenxianshu South Road, Gaoxin District, Chengdu, Sichuan Province, PRC
Unit 3-102 on Level 1, Building 12, Zhong Hai Ming City, No. 8 Shenxianshu South Road, Gaoxin District, Chengdu, Sichuan Province, PRC 45. Unit 1-502 on Level 5, Building 5, Ling Jiang Feng Ge, No. 81 Shunjiang Road, Jinjiang District, Chengdu, Sichuan Province, PRC 46. Unit 17F-4 on Level 17, Tower B, Jian Yin Plaza, No. 9 Hongxing Road, Jinjiang District, Chengdu, Sichuan Province, PRC

Market value in Interest existing state Market value attributable attributable to the in existing state as at to the CCP CCP Group as at 28 February 2009 Group 28 February 2009

No commercial value

No commercial value No commercial value No commercial value

— 227 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
47.	Unit 7-10 on Level 7,			No commercial
	Tower B,			value
	Cai Fu Center,
	Junction of Daye Road,
	Chaoyang Road and
	Qingshiqiao Road,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC
48.	Unit 19-7 on Level 19,			No commercial
	Tower B,			value
	Cai Fu Center,
	Junction of Daye Road,
	Chaoyang Road and
	Qingshiqiao Road,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC
49.	Unit 22-5 on Level 22,			No commercial
	Tower B,			value
	Cai Fu Center,
	Junction of Daye Road,
	Chaoyang Road and
	Qingshiqiao Road,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC
50.	A carparking space in the			No commercial
	Basement of Plaza Central,			value
	No. 8 Shuncheng Street,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC

— 228 —

PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
51.	A carparking space in the			No commercial
	Basement of Plaza Central,			value
	No. 8 Shuncheng Street,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC
52.	Car Park No. 110,			No commercial
	Plaza Central,			value
	No. 8 Shuncheng Street,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC
53.	A carparking space in the			No commercial
	Basement of Plaza Central,			value
	No. 8 Shuncheng Street,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC
54.	Unit 3-2901 on Level 29,			No commercial
	Building 1,			value
	Empress Tower,
	No. 66 Datangkan Road,
	Jinjiang District,
	Chengdu,
	Sichuan Province,
	PRC
55.	Units 6,11 and 12 on Level 25,			No commercial
	International Trade Centre,			value
	No. 38 Youth Road,
	Yuzhong District,
	Chongqing,
	PRC

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APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
56.	Units 7, 8, 9 and 10 on			No commercial
	Level 25,			value
	International Trade Centre,
	No. 38 Youth Road,
	Yuzhong District,
	Chongqing,
	PRC
57.	Unit 4 on Level 25,			No commercial
	International Trade Centre,			value
	No. 38 Youth Road,
	Yuzhong District,
	Chongqing,
	PRC
58.	Unit 5-7-2 on Level 7,			No commercial
	Block A,			value
	Renhe Tiandi,
	No. 11 Xinnan Road,
	Yubei District,
	Chongqing,
	PRC
59.	Unit 3804 on Level 38,			No commercial
	Tower B,			value
	Oriental Manhattan,
	No. 9 Bayi Road,
	Yuzhong District,
	Chongqing,
	PRC
60.	Unit 3008 on Level 30,			No commercial
	Tower B,			value
	Oriental Manhattan,
	No. 9 Bayi Road,
	Yuzhong District,
	Chongqing,
	PRC

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PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
61.	Unit 07 on Level 36,			No commercial
	City Legend,			value
	No. 9 Linjiangzhi Road,
	Yuzhong District,
	Chongqing,
	PRC
62.	Unit 2213 on Level 22,			No commercial
	Yaozhong Plaza,			value
	Nos. 3-15 Linhexi Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
63.	Unit 2214 on Level 22,			No commercial
	Yaozhong Plaza,			value
	Nos. 3-15 Linhexi Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
64.	Unit 2215 on Level 22,			No commercial
	Yaozhong Plaza,			value
	Nos. 3-15 Linhexi Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
65.	Unit 2216 on Level 22,			No commercial
	Yaozhong Plaza,			value
	Nos. 3-15 Linhexi Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC

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APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
66.	Unit 10A on Level 10,			No commercial
	Dijin Building,			value
	No. 3 Longkouzhong Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
67.	Unit 807 on Level 8,			No commercial
	Qiaolin Building,			value
	No. 51 Qiaolin Street,
	Linhedong Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
68.	Unit 2102 on Level 21,			No commercial
	Yayuan Building,			value
	No. 3 Huaxiao Street,
	Tianhedong Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
69.	Unit 601 on Level 6,			No commercial
	Yaoxing Building,			value
	No. 25 Tianshou Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC

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PROPERTY VALUATION

APPENDIX VI

				Market value in
			Interest	existing state
		Market value	attributable	attributable to the
		in existing state as at	to the CCP	CCP Group as at
No.	Property	28 February 2009	Group	28 February 2009
70.	Unit 401 on Level 4,			No commercial
	Yaoxing Building,			value
	No. 25 Tianshou Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
71.	Unit 13A01 on Level 13,			No commercial
	Xinhuiyuan Building,			value
	No. 35 Huaming Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
72.	Unit 904 on Level 9,			No commercial
	Haomenge South Building,			value
	Huacheng Main Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC
73.	Unit 1105 on Level 11,			No commercial
	Tianwenyuan Building,			value
	No. 105 Tiyuxi Road,
	Tianhe District,
	Guangzhou,
	Guangdong Province,
	PRC

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PROPERTY VALUATION

Market value in Interest existing state Market value attributable attributable to the in existing state as at to the CCP CCP Group as at No. Property 28 February 2009 Group 28 February 2009 74. Unit 13A02 on Level 13, No commercial No. 66 Qiaolin Street, value Tianhe North Road, Tianhe District, Guangzhou, Guangdong Province, PRC Sub-total: No commercial value Group VI — Property leased by the CCP Group in Hong Kong 75. Units 1101-1102, Level 11, No commercial Shui On Centre, value Nos. 6 - 8 Harbour Road, Wanchai, Hong Kong Sub-total: No commercial value Grand-total: RMB5,322,470,000 RMB4,152,920,000

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APPENDIX VI

VALUATION CERTIFICATE

Group I — Properties held by the CCP Group for sale in the PRC

						Market value in
					Particulars of	existing state as at
No.	Property	Description and tenure			occupancy	28 February 2009
1.	Central	The property comprises the unsold portion of a			The property is	RMB50,170,000
	International Plaza,	composite development known as Central			vacant.
	No.19	International Plaza (the “development”). It was				(100% interest
	Zhangzhouer Road,	completed in 2007.				attributable to
	Shinan District,					the CCP Group:
	Qingdao,	The total gross floor area	of the property	is		RMB50,170,000)
	Shandong Province,	approximately 5,642.16 sq.m. (60,732 sq.ft.).				(see Note (4))
	PRC	Breakdown of areas is listed as follows:
			Approximate
			Gross Floor	Area
			sq.m.	sq.ft.
		Retail	3,224.73	34,711
		Office	425.04	4,575
		Residential	1,992.39	21,446
		Total	5,642.16	60,732

The land use rights of the property have been granted for a term expiring on 1 July 2062 for commercial, residential and office uses.

Notes:

(1) Pursuant to two Real Estate Title Certificates issued by Qingdao Municipal Land Resources and House Administration Bureau dated 8 October 2004, the land use rights of a parcel of land with a site area of 15,251.50 sq.m. have been granted to Qingdao Zhongcheng Yinchu Development Co., Ltd. (“Zhongcheng”), a wholly owned subsidiary of CCP. Details of the certificates are listed as follows:-

		Common site
Certificate No.	Date of Issuance	Area (sq.m.)	Usage	Expiry Date
Qing Fang Di Quan Shi Zi Di	8 October 2004		Commercial,	1 July 2062
No. 184148		15,251.50	Residential and Office
Qing Fang Di Quan Shi Zi Di	8 October 2004		Commercial,	1 July 2062
No. 184146			Residential and Office

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PROPERTY VALUATION

(2) Pursuant to two Real Estate Title Registration Certificates issued by Qingdao Municipal Land Resources and House Administration Bureau dated 23 January 2008, the building ownership of the property with a total gross floor area of approximately 54,020.21 sq.m. have been granted to Zhongcheng. Details of the certificates are listed as follows:-

	Date of	Gross Floor
Certificate No.	Issuance	Area (sq.m.)
Qing Fang Di Quan Bei Zi 2008 Di No. 105	23 January 2008	29,082.07
Qing Fang Di Quan Bei Zi 2008 Di No. 106	23 January 2008	24,938.14

As advised by the CCP Group, the property comprises part of the buildings with a total gross floor area of approximately 5,642.16 sq.m. as stated in the above Real Estate Title Registration Certificates.

(3) As advised by the CCP Group, the development was acquired on 13 June 2007 at a consideration of approximately RMB350,700,000.
(4) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Zhongcheng has obtained the State-owned Land Use Certificates and Building Title Certificates of the property and is legally entitled to sell, lease, mortgage or otherwise dispose of the property other than the 3 seized units as stated in Note (4) ii;
ii. part of the property with a total gross floor area of approximately 1,499.76 sq.m. is subject to three court seizures due to expire between 10 December 2009 and 20 April 2011 imposed by the People’s Court of Shinan District, Qingdao with serial nos. 2008 Nan Min Chu Zi Di Nos. 20050 30275 and 30276;
iii. Zhongcheng will be legally entitled to sell, lease, mortgage or otherwise dispose of the 3 units as stated in Note (4) ii upon the termination of the court seizures; and
iv. other than the court seizures as stated in Note (4) ii, the property is not subject to any other mortgages or court seizures.
(5) In the course of our valuation, we have assigned no commercial value to part of the property with a total gross floor area of approximately 1,499.76 sq.m. which are subject to three court seizures as stated in Note (4) ii. For reference purposes, the market value of such part of the property was approximately RMB15,300,000 if the court seizures were fully settled.

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PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenure occupancy 28 February 2009 2. 141 villas, The property comprises 141 villas within a The property is RMB680,000,000 Fengqiao Villas, luxury residential development known as vacant. Xiangyang South Fengqiao Villas. (100% interest Road, Mapo Town, attributable to Shunyi District, The sizes of the villas range from 400 sq.m. to the CCP Group: Beijing, PRC 700 sq.m.. The total gross floor area of the RMB680,000,000) property is approximately 76,273.45 sq.m. (see Notes (7) and (821,007 sq.ft.). (10)) The property is subject to a renovation scheme. The renovation work is scheduled to be completed in the 1st quarter of 2010. The land use rights of the property have been granted for a term expiring on 17 December 2063 for villa use.

Notes:

(1) Pursuant to a State-owned Land Use Certificate — Jing Shi Shun Gang Ao Tai Guo Yong (2004 Chu) Zi No. 10218 dated 20 April 2004, the land use rights of a parcel of land with a site area of 168,360.00 sq.m. have been granted to Beijing Jingda Real Estate Development Co., Ltd. (“Jingda”), the developer of the property, for a term due to expire on 17 December 2063 for villa use.
(2) Pursuant to five Civil Written Decisions issued by Beijing Second Intermediate People’s Court and Beijing Xicheng District People’s Court in 2007, Beijing Yida Real Estate Development Co., Ltd. (“Yida”), a wholly owned subsidary of CCP, has obtained the building ownership and the corresponding land use rights of 87 villas.
(3) Pursuant to eleven Civil Written Decisions issued by the People’s Court of Luan County of Hebei Province dated 18 November 2008, Beijing Chaoteng Investment Management Co., Ltd. (“Chaoteng”), a wholly owned subsidary of CCP, has obtained the building ownership and the corresponding land use rights of 11 villas.
(4) Pursuant to a Civil Written Decision issued by Beijing Second Intermediate People’s Court in April 2007, Zhejiang Chaojie Group Co., Ltd. (“Chaojie”) has obtained the building ownership and the corresponding land use rights of 35 villas.
(5) Pursuant to a transfer agreement entered into between Chaojie and Chaoteng dated 17 June 2008, the building ownership and the corresponding land use rights of the 35 villas as stated in Note (4) have been transferred to Chaoteng.
(6) Pursuant to two Notices for Assistance in Execution issued by Beijing Second Intermediate People’s Court to Beijing Municipal Construction Committee (“BMCC”) and Beijing Municipal Bureau of Land and Resources (“BMBLR”) respectively both dated 5 March 2008, BMCC and BMBLR have been requested to register the 35 villas as stated in Note (4) under the name of Chaoteng.
(7) In addition to the 133 villas as mentioned in Notes (2), (3) and (4), Yida has entered into eight agreements with Jingda to purchase another 8 villas. As advised by the CCP Group, all the consideration for the purchase was paid in full and the acquisition is expected to be completed by the end of 2009.

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PROPERTY VALUATION

(8) As advised by the CCP Group, they will refurbish the property by spending an estimated cost of approximately RMB310,807,835 on the property. In undertaking our valuation, we have taken into account the said amount.
(9) As advised by the CCP Group, the property was acquired during the period from June 2007 to September 2008 for a total consideration of approximately RMB601,338,300.
(10) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Yida and Chaoteng are not legally entitled to sell, lease, mortgage or otherwise dispose of the 133 villas but will be legally entitled to do so upon the issuance of Building Title Certificates of these villas by the competent governmental authorities in Beijing;
ii. there are no legal impediments for Yida and Chaoteng to obtain Building Title Certificates for the villas as stated in Note (10) i;
iii. the land use rights of the property as stated in Note (7) are subject to two court seizures due to expire during the period between 6 November 2009 and 13 November 2009 imposed by Hangzhou Intermediate People’s Court;
iv. other than the two court seizures as stated in Note (10) iii, the property is not subject to any other mortgages or count seizures;
v. the transfer of the 133 villas will not be affected by the two court seizures as stated in Note (10) iii; and
vi. the 8 pre-sold villas will be transferred from Jingda to Yida after the two court seizures as stated in Note (10) iii expire or are lifted and the 8 pre-sold agreements are fully performed by parties thereto.

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PROPERTY VALUATION

Group II — Properties held by the CCP Group under development in the PRC

					Market value in
				Particulars of	existing state as at
No.	Property	Description and tenure		occupancy	28 February 2009
3.	Central Point, Jinjiang Bridge	Central Point comprises two parcels of land with a total site area of approximately 10,004.67		The property is under	RMB477,000,000
	East, No. 1 Renmin	sq.m. (107,690 sq.ft.).		construction.	(100% interest
	South Road Section				attributable to
	3, Wuhou District,	The property is planned to be developed	into a		the CCP Group:
	Chengdu,	mixed commercial complex in two phases.			RMB477,000,000)
	Sichuan Province,
	PRC	Phase I will be designated for commercial,
		office and serviced apartment uses whilst	Phase
		II will be designated for office use. Carpark will
		be provided in both phases.
		The property comprises portion of Phase	I with
		a total gross floor area of approximately
		39,855.00 sq.m. (428,999 sq.ft.) and Phase II
		which is now under construction. Upon
		completion, Phase II will provide a total	gross
		floor area of approximately 56,334.00 sq.m.
		(606,379 sq.ft.). Breakdown of areas is listed as
		follows: Approximate
		Gross Floor	Area
		Phase I sq.m.	sq.ft.
		Serviced Apartment 28,393.00	305,622
		Commercial 3,376.00	36,339
		Refugee floor 99.00	1,066
		Carpark 7,987.00	85,972
		Sub-total 39,855.00	428,999
		Phase II
		Office 38,054.00	409,613
		Refugee floor 1,200.00	12,917
		Carpark 17,080.00	183,849
		Sub-total 56,334.00	606,379
		Total 96,189.00 1,035,378

Phase I and Phase II are scheduled to be completed in the 2nd quarter of 2009 and the 2nd quarter of 2010 respectively.

The land use rights of the property have been granted for various terms (refer to Note 1).

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PROPERTY VALUATION

APPENDIX VI

Notes:

(1) Pursuant to two State-owned Land Use Certificates issued by Chengdu Municipality Government dated 19 September 2007 and 13 June 2008 respectively, the land use rights of 2 parcels of land with a total site area of 10,004.67 sq.m. have been granted to Chengdu Shui On Hui Da Property Co., Ltd. (“Shui On Hui Da”), a wholly owned subsidiary of CCP. Details of the certificates are listed as follows:-

		Site Area
Certificate No.	Date of Issuance	(sq.m.)	Usage	Expiry Date
Cheng Guo Yong (2008) Di	13 June 2008	4,924.39	Commercial and	22 April 2048
No. 588			Other Commercial
			Service (office)
Cheng Guo Yong (2007) Di	19 September 2007	5,080.28	Composite	15 August 2049
No. 1143

(2) Pursuant to two Planning Permits for Construction Land — Cheng Gui Jian (1995) No. 511 and Cheng Gui Yong Di [2007] No. 484 issued by Chengdu Planning and Management Bureau dated 8 May 1995 and 30 October 2007 respectively, two parcels of land with a total site area of approximately 10,517.00 sq.m. (including a site area of approximately 511.99 sq.m. to be resumed by the Government) were permitted for construction.
(3) Pursuant to two Planning Permits for Construction Works — 97 No. 317 and Jian Zi Di No. 510107200930031 issued by Chengdu Planning and Management Bureau dated 10 July 1997 and 22 January 2009 respectively, the approved construction scale is approximately 121,020.00 sq.m.
(4) Pursuant to two Commencement Permits for Construction Works — Cheng Jian Shi Jian Zi (1997) No. 0174 and No. 510100200901230101 issued by Chengdu Planning and Management Bureau dated 7 July 1997 and 23 January 2009 respectively, the approved construction scale of the property is approximately 121,020.00 sq.m.
(5) Pursuant to a Filing Form of Inspection and Acceptance of the Construction Completion — No. 2008-719 issued by Chengdu Construction Committee dated 17 December 2008, the construction works of the property with a total gross floor area of approximately 62,829.68 sq.m. have been certified to be completed.
(6) Pursuant to a Pre-sale Permit — Cheng Fang Yu Shou Zhong Xin Cheng Qu Zi Di No. 5564 issued by Chengdu Housing Administration Bureau in September 2008, the approved pre-sale area is approximately 62,657.00 sq.m.
(7) As advised by the CCP Group, there was an estimated outstanding construction cost of approximately RMB443,655,560 to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.
(8) The capital value as if completed as of 28 February 2009 is RMB1,034,000,000.
(9) As advised by the CCP Group, the property was acquired on 13 June 2007 for a consideration of approximately RMB462,700,000.
(10) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Shui On Hui Da has obtained the land use rights of the property other than the 16 pre-sold units and is legally entitled to lease, mortgage or otherwise dispose of those portions;

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APPENDIX VI

PROPERTY VALUATION

ii. the land stipulated in the State-owned Land Use Certificate — Cheng Guo Yong (2008) Di No. 588 as stated in Note (1) is subject to a mortgage in favour of ICBC, Chengdu Hi-Tech Economic Development Zone Sub-branch in an amount of RMB100,000,000 from 15 July 2008 to 30 May 2012;
iii. the construction works with an area of 36,910.25 sq.m. relating to the State-owned Land Use Certificate — Cheng Guo Yong (2007) Di No. 1143 as stated in Note (1) other than the 16 pre-sold units are subject to a mortgage in favour of ICBC, Chengdu Hi-Tech Economic Development Zone Sub-branch in an amount of RMB200,000,000 from 14 February 2008 to 10 January 2011;
iv. the property shall not be transferred during the existence of the relevant mortgages as stated in Notes (10) ii and iii without the consent from the relevant mortgagees unless the transferee discharges the debts and extinguishes the relevant mortgages for Shui On Hui Da;
v. Shui On Hui Da has obtained the Planning Permit for Construction Land, Planning Permit for Construction Works, Commencement Permit for Construction Works, Filing Form of Inspection and Acceptance of the Construction Completion and Pre-sale Permit for the construction works and pre-sale of Central Point Phase I;
vi. Shui On Hui Da has obtained the Planning Permit for Construction Land, Planning Permit for Construction Works and Commencement Permit for Construction Works for the construction works of Central Point Phase II but it has not obtained the completion acceptance documents; and
vii. other than the mortgages as stated in Notes (10) ii and iii, the property is not subject to any other mortgages or court seizures.

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PROPERTY VALUATION

No. Property Description and tenure

Phase I of The property comprises a parcel of land with a Shenyang Central site area of approximately 26,045.00 sq.m. Plaza, Junction (280,348 sq.ft.) on which a mixed development of Bei Ling is being constructed. Main Street and Bashan Road, The proposed development will be designated Huanggu District, for residential, SOHO/ serviced apartment, Shenyang, retail, office and car parking uses. Liaoning Province PRC Upon completion, the proposed development will provide a total gross floor area of approximately 298,267.00 sq.m. (3,210,546 sq.ft.). Breakdown of areas is listed as follows:

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is RMB650,000,000 under construction. (100% interest attributable to the CCP Group: RMB650,000,000)

	Approximate	Approximate
	Gross Floor Area
	sq.m.	sq.ft.
Residential	71,398.00	768,528
SOHO/
Serviced
Apartment	75,019.00	807,505
Office	44,802.00	482,249
Retail	56,833.00	611,750
Carpark	50,215.00	540,514
Total	298,267.00	3,210,546

The proposed development is scheduled to be completed in the 4th quarter of 2011.

The land use rights of the property have been granted for terms expiring on 15 May 2048 and 15 May 2058 for commercial and residential uses respectively.

Notes:

(1) Pursuant to a State-owned Land Use Certificate — Shen Yang Guo Yong (2008) Di No. 0151 issued by Shenyang Municipal Government dated 15 July 2008, the land use rights of a parcel of land with a site area of approximately 26,045.00 sq.m. have been granted to Shenyang Hua Hui Properties Co., Ltd. (“Huahui”), a wholly owned subsidiary of CCP, for a term due to expire on 15 May 2048 and 15 May 2058 for commercial and residential uses respectively.
(2) Pursuant to a Planning Permit for Construction Land — Shen Gui Tu Zheng Zi 2008 Nian No. 0027 issued by Shenyang Plan and Land Resources Bureau dated 26 March 2008, a parcel of land with a site area of approximately 29,174.00 sq.m. was permitted for construction. The construction scale is approximately 116,700 sq.m.
(3) Pursuant to a Notification about Content Modification of Planning Permit for Construction Land — Shen Gui Tu Zheng Fu Geng Zi 2008 Nian No. 0019 issued by Shenyang Plan and Land Resources Bureau dated 8 September 2008, the site area as stated in Note (2) was changed to 26,045.00 sq.m. The construction scale was also changed to 298,267.00 sq.m.

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PROPERTY VALUATION

(4) Pursuant to two Planning Permits for Construction Works — Jian Zi Di No. 210100200800170 and Jian Zi Di No. 210100200900005 issued by Shenyang Plan and Land Resources Bureau dated 17 October 2008 and 13 January 2009 respectively, the approved construction scale is approximately 166,427.00 sq.m.
(5) Pursuant to a Commencement Permit for Construction Works — No. 210104200811280201 issued by Shenyang Town and Rural Development Committee dated 28 November 2008, the approved construction scale of the property is approximately 59,062.00 sq.m.
(6) As advised by the CCP Group, there was an estimated outstanding construction cost of approximately RMB1,136,738,288 to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.
(7) The capital value as if completed as of 28 February 2009 is RMB2,400,000,000.
(8) As advised by the CCP group, the property was acquired on 20 July 2007 for a consideration of approximately RMB202,600,000.
(9) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Huahui has obtained the land use rights of the property and is entitled to sell, lease, mortgage or otherwise dispose of the property;
ii. Huahui has obtained the Planning Permit for Construction Land, Planning Permit for Construction Works and Commencement Permit for the construction works of the property; and
iii. the property is not subject to any mortgages or court seizures.

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PROPERTY VALUATION

Group III — Properties held by the CCP Group for future development in the PRC

No. Property Description and tenure 5. Orient Home, The property comprises three parcels of land No. 139 Section 1 with a total site area of approximately 57,397.26 of Jiefang Road sq.m. (617,824 sq.ft.). North, Jinniu District, Chengdu, The property is planned to be developed into a Sichuan Province, large-scale development with a mixture of PRC residential, serviced apartment and retail uses. Kindergarten, community centre and carpark will be provided within the development.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is RMB810,000,000 vacant with some structures (24.5% interest erected thereon attributable to pending for the CCP Group: demolition. RMB198,450,000)

Upon completion, the proposed development will provide a total gross floor area of approximately 454,181.00 sq.m. (4,888,803 sq.ft.). Breakdown of areas is listed as follows:

Residential Serviced Apartment Retail Kindergarten Community Centre Carpark Total	Approximate Gross Floor Area sq.m. sq.ft. 204,288.00 2,198,956 72,159.00 776,719 47,174.00 507,781 3,600.00 38,750 2,600.00 27,986 124,360.00 1,338,611 454,181.00 4,888,803	Approximate Gross Floor Area sq.m. sq.ft. 204,288.00 2,198,956 72,159.00 776,719 47,174.00 507,781 3,600.00 38,750 2,600.00 27,986 124,360.00 1,338,611 454,181.00 4,888,803
		4,888,803

The construction work of the proposed development is scheduled for commencement in the 1st quarter of 2010 and for completion in the 2nd quarter of 2012.

The land use rights of the property have been granted for various terms (refer to Note 1) .

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PROPERTY VALUATION

APPENDIX VI

Notes:

(1) Pursuant to three State-owned Land Use Certificates issued by Chengdu Municipality Government dated 23 June 2008 and 13 October 2008, the land use rights of 3 parcels of land with a total site area of 57,397.26 sq.m. have been granted to Chengdu Xianglong Real Estate Co., Ltd. (“Chengdu Xianglong”) (formerly known as Orient Home Chengdu Jinniu Zhiye Co., Ltd.), a 24.5% owned jointly controlled entity of CCP. Details of the certificates are listed as follows:

		Site Area
Certificate No.	Date of Issurance	(sq.m.)	Usage	Expiry Date
Cheng Guo Yong (2008) 965	13 October 2008	51,197.16	Residential and	Residential: 18 May
			Commercial	2078 Commercial: 18
				May 2048
Cheng Guo Yong (2008) 605	23 June 2008	3,600.04	Education (Kindergarten)	18 May 2058
Cheng Guo Yong (2008) 606	23 June 2008	2,600.06	Public Facilities	18 May 2058
			(Community Centre)

(2) Pursuant to a Notification of Planning and Design issued by Chengdu Planning and Management Bureau dated 26 January 2008, Chengdu Xianglong is allowed to develop the property subject to the following criteria:

Site Area: 57,397.26 sq.m. (total) Breakdown site area: Plot 19: 51,197.16 sq.m. Plot 4: 2,600.06 sq.m. Plot 5: 3,600.04 sq.m. Land Use: Plot 19: Residential and Commercial Plot 4: Community Centre Plot 5: Kindergarten Plot Ratio: Plot 19: less or equal to 6 (residential less or equal to 4) Plot 4: less or equal to 2.4 Plot 5: N/A

The Notification is valid for a year from the date of issuance.

(3) Pursuant to a Planning Permit for Construction Land — Di Zi Di No. 510106200820034 issued by Chengdu Planning and Management Bureau dated 29 January 2008, a parcel of land with a site area of approximately 116,954.17 sq.m. (including a site area of approximately 59,556.90 sq.m. to be resumed by the government) was permitted for construction.
(4) As advised by the CCP Group, there was an estimated outstanding construction cost of approximately RMB1,572,466,310 to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.
(5) The capital value as if completed as of 28 February 2009 is RMB2,906,000,000.
(6) As advised by the CCP group, the property was acquired on 4 February 2008 for a consideration of approximately RMB420,000,000.
(7) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Chengdu Xianglong has obtained the land use rights of the property and is legally entitled to sell, lease, mortgage or otherwise dispose of the property;
ii. Chengdu Xianglong has obtained the Planning Permit for Construction Land but it has not obtained the Planning Permit for Construction Works and Commencement Permit for Construction Works or the completion acceptance documents for the construction works of the property; and
iii. the property is not subject to any mortgages or court seizures.

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No. Property Description and tenure

Ruiqi Building, The property comprises a parcel of land with a Junction of Zhong site area of approximately 6,543.80 sq.m. Hua Road and (70,437 sq.ft.) on which a composite Xin Hua Road, development is being constructed. Yuzhong District, Chongqing, Upon completion, the proposed development will PRC provide a total gross floor area of approximately 86,341.00 sq.m. (929,375 sq.ft.). Breakdown of areas is listed as follows:

Market value in Particulars of existing state as at 28 occupancy February 2009 The property is RMB551,300,000 under construction. (100% interest attributable to the CCP Group: RMB551,300,000)

Residential Office Retail Carpark Ancillary facilities Total	Approximate Gross Floor Area sq.m. sq.ft. 29,200.00 314,309 22,776.00 245,161 20,471.00 220,350 9,264.00 99,718 4,630.00 49,837 86,341.00 929,375	Approximate Gross Floor Area sq.m. sq.ft. 29,200.00 314,309 22,776.00 245,161 20,471.00 220,350 9,264.00 99,718 4,630.00 49,837 86,341.00 929,375
		929,375

The proposed development is scheduled to be completed in the 4th quarter of 2009.

The land use rights of the property have been granted for terms expiring on 28 November 2047 and 28 November 2057 for commercial and residential uses respectively.

Notes:

(1) Pursuant to a Real Estate Title Certificate — 101 Fang Di Zheng D2009 Zi Di No. 013 issued by Chongqing Land Resources and Real Estate Management Bureau dated 31 March 2009, the land use rights of a parcel of land with a site area of approximately 6,543.80 sq.m. have been granted to Chongqing Hui Zheng Properties Co., Ltd. (“Chongqing Hui Zheng”), a wholly owned subsidiary of CCP, for terms due to expire on 28 November 2047 and 28 November 2057 for commercial and residential uses respectively.
(2) Pursuant to a Planning Permit for Construction Land — Di Zi Di Jian No. 500103200900059 issued by Chongqing Planning Bureau dated 3 March 2009, a parcel of land with a site area of approximately 6,543.80 sq.m. was permitted for construction. The approved construction scale is approximately 86,340.83 sq.m.
(3) As advised by the CCP Group, there was an estimated outstanding construction cost of approximately RMB324,740,000 to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.

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(4) The capital value as if completed as of 28 February 2009 is RMB1,049,000,000.
(5) As advised by the CCP group, the property was acquired on 26 July 2007 for a consideration of approximately RMB413,700,000.
(6) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Chongqing Hui Zheng has obtained the land use rights of the property and has the rights to sell, lease, mortgage or otherwise dispose of the property;
ii. Chongqing Hui Zheng has obtained the Planning Permit for Construction Land but it has not obtained the Planning Permit for Construction Works and Commencement Permit for Construction Works or the completion acceptance documents for the construction works of the property; and
iii. the property is not subject to any mortgages or court seizures.

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No. Property Description and tenure

Haomen Apartment, The property comprises a parcel of land with a No. 15 Minsheng site area of approximately 560.10 sq.m. (6,029 Road, sq.ft.) on which a composite development is Jiefangbei Area, proposed to be built. Yuzhong District, Chongqing, The property will be developed for residential, PRC retail and car parking uses. Upon completion, the proposed development will provide a total gross floor area of approximately 13,070.00 sq.m. (140,686 sq.ft.). Breakdown of areas is listed as follows:-

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is RMB50,000,000 pending for construction. (100% interest attributable to the CCP Group: RMB50,000,000)

Residential Retail Carpark Total	Approximate Gross Floor Area sq.m. sq.ft. 9,800.00 105,487 2,180.00 23,466 1,090.00 11,733 13,070.00 140,686	Approximate Gross Floor Area sq.m. sq.ft. 9,800.00 105,487 2,180.00 23,466 1,090.00 11,733 13,070.00 140,686
		140,686

The proposed development is scheduled for commencement in the 3rd quarter of 2009 and for completion in the 2nd quarter of 2010.

The land use rights of the property have been granted for terms expiring on 20 April 2045 and 20 April 2055 for commercial and residential uses respectively.

Notes:

(1) Pursuant to a Real Estate Title Certificate — 101 Fang Di Zheng D2007 Zi Di No. 022 issued by Chongqing Land Resources and Real Estate Management Bureau dated 15 June 2007, the land use rights of a parcel of land with a site area of 560.10 sq.m. have been granted to Chongqing Fengde Haomen Properties Co., Ltd. (“Chongqing Haomen”), a wholly owned subsidary of CCP, for terms due to expire on 20 April 2045 and 20 April 2055 for commercial and residential uses respectively.
(2) Pursuant to an Approval Letter for Construction Land — Yu Zhong Guo Tu Jian Zi [2007] Di No. 11 issued by Chongqing Planning Bureau dated 18 May 2007, a parcel of land with a site area of approximately 560.10 sq.m. was permitted for construction.
(3) As advised by the CCP Group, there was an estimated outstanding construction cost of approximately RMB52,910,000 to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.
(4) The capital value as if completed as of 28 February 2009 is RMB125,700,000.

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(5) As advised by the CCP group, the property together with Property Nos. 8 and 9 were acquired on 4 January 2008 at a consideration of approximately RMB270,000,000.
(6) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Chongqing Haomen has obtained the land use rights of the property and has the rights to sell, lease, mortgage or otherwise dispose of the property;
ii. the property was transferred before the completion of its construction due to the 2007 Offshore Share Transfer, thus those favourable conditions enjoyed by Chongqing Haomen may be called back by the local government;
iii. the favorable conditions included the following:
- a. all the administrative fees previously owed (land premium, construction planning permit fees, etc.) will be exempted;
- b. deed tax paid in relation to the court mandated sale will be refunded;
- c. Zongjin Fengde Investment Holding Co., Ltd. (“Zhongjin”) will not be responsible for the penalties previously incurred; and
- d. the term of the land use right will be re-calculated from the day that Zhongjin purchases it and Zhongjin will not need to pay the land premium for the extended term;
iv. Chongqing Haomen has obtained the Approval Letter for Construction Land but it has not obtained the Planning Permit of Construction Land, Planning Permit for Construction Works and Commencement Permit for Construction Works or the completion acceptance documents for the construction works of the property; and
v. the property is not subject to any mortgages or court seizures.

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No. Property Description and tenure 8. Nanyang Building, The property comprises a parcel of land with a Nanping Road North, site area of approximately 2,152.00 sq.m. Nanan District, (23,164 sq.ft.) on which an uncompleted Chongqing, composite building is erected. PRC As advised by the Company, the said uncompleted building will be demolished to make way for a redevelopment of a residential building. Upon completion, the proposed development will provide a total gross floor area of approximately 52,580.00 sq.m. (565,971 sq.ft.). Breakdown of areas is listed as follows:

	Market value in
Particulars of	existing state as at
occupancy	28 February 2009
The property is	RMB107,000,000
pending for
redevelopment.	(100% interest
	attributable to
	the CCP Group:
	RMB107,000,000)

Residential Carpark & ancillary Total	Approximate Gross Floor Area sq.m. sq.ft. 45,792.00 492,905 6,788.00 73,066 52,580.00 565,971	Approximate Gross Floor Area sq.m. sq.ft. 45,792.00 492,905 6,788.00 73,066 52,580.00 565,971
		565,971

The proposed development is scheduled for commencement in the 3rd quarter of 2009 and for completion in 2nd quarter of 2011.

The land use rights of the property have been granted for a term expiring on 7 March 2045 for commercial and office uses.

Notes:

(1) Pursuant to a Real Estate Title Certificate — 106D Fang Di Zheng 2007 Zi Di No. 00018 issued by Chongqing Land Resources and Real Estate Management Bureau dated 28 April 2007, the land use rights of a parcel of land with a site area of 2,111.00 sq.m. have been granted to Chongqing Fengde Nanyang Properties Co., Ltd. (“Chongqing Nanyang”), a wholly owned subsidary of CCP, for a term due to expire on 7 March 2045 for commercial and office uses.
(2) Pursuant to an Approval Letter for Construction Land — Nan An Di Zi Zi No. (2007-11) issued by Chongqing Planning Bureau dated 22 May 2007, a parcel of land with a site area of approximately 2,111.00 sq.m. was permitted for construction. The approved construction scale is approximately 31,639.96 sq.m.
(3) As advised by the CCP Group, there was an estimated outstanding construction cost and additional land premium of approximately RMB230,084,000 and RMB68,001,000 respectively to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.
(4) The capital value as if completed as of 28 February 2009 is RMB503,700,000.

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(5) As advised by the CCP Group, the property together with Property Nos. 7 and 9 were acquired on 4 January 2008 at a consideration of approximately RMB270,000,000.
(6) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Chongqing Nanyang has obtained the land use rights of part of the property with a total site area of approximately 2,111.00 sq.m. The land use rights of the remaining part of the property with a total site area of approximately 41.00 sq.m. will be obtained by Chongqing Nanyang upon the issuance of the updated State-owned Land Use Certificate;
ii. Chongqing Nanyang has the rights to sell, lease, mortgage or otherwise dispose of the property;
iii. the property was transferred before the completion of its construction due to the 2007 Offshore Share Transfer, thus those favourable conditions enjoyed by Chongqing Nanyang may be called back by the local government;
iv. the favorable conditions included the following:
- a. all the administrative fees previously owed (land premium, construction planning permit fees, etc.) will be exempted;
- b. deed tax paid in relation to the court mandated sale will be refunded;
- c. Zhongjin Fengde Investment Holding Co., Ltd. (“Zhongjin”) will not be responsible for the penalties previously incurred; and
- d. the term of the land use right will be re-calculated from the day that Zhongjin purchases it and Zhongjin will not need to pay the land premium for the extended term;
v. Chongqing Nanyang has obtained the Planning Permit for Construction Land but it has not obtained the Planning Permit for Construction Works and Commencement Permit for Construction Works or the completion acceptance documents for the construction works of the property; and
vi. the property is not subject to any mortgages or court seizures.

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No. Property Description and tenure 9. Qianxinian The property comprises a parcel of land with a Building, site area of approximately 3,181.80 sq.m. Jianxin Road West, (34,249 sq.ft.) on which a commercial Guanyinqiao, development is proposed to be built. Jiangbei District, Chongqing, The proposed development will be designated PRC for commercial, office and car parking uses. Upon completion, the proposed development will provide a total gross floor area of approximately 35,431.00 sq.m. (381,379 sq.ft.). Breakdown of areas is listed as follows:

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is RMB167,000,000 pending for construction. (100% interest attributable to the CCP Group: RMB167,000,000)

Commercial Office Car park Total	Approximate Gross Floor Area sq.m. sq.ft. 2,557.00 27,524 28,587.00 307,710 4,287.00 46,145 35,431.00 381,379	Approximate Gross Floor Area sq.m. sq.ft. 2,557.00 27,524 28,587.00 307,710 4,287.00 46,145 35,431.00 381,379
		381,379

The proposed development is scheduled for commencement in the 3rd quarter of 2009 for completion in the 4th quarter of 2009.

The land use rights of the property have been granted for a term expiring on 18 March 2045 for commercial services use.

Notes:

(1) Pursuant to a Real Estate Ownership Certificate — 103 Fang Di Zheng (2007) Di No. 23310 issued by Chongqing Land Resources and Real Estate Management Bureau dated 22 November 2007, the land use rights of a parcel of land with a site area of 3,181.80 sq.m. have been granted to Chongqing Fengde Zunding Properties Co., Ltd. (“Chongqing Zunding”), a wholly owned subsidary of CCP, for a term due to expire on 18 March 2045 for commercial services use.
(2) Pursuant to a Planning Permit for Construction Land — Di Zi Di Jian No. 500105200800882 issued by Chongqing Planning Bureau dated 31 December 2008, a parcel of land with a site area of approximately 2,609.00 sq.m. was permitted for construction.
(3) As advised by the CCP Group, there was an estimated outstanding construction cost of approximately RMB56,639,000 to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.
(4) The capital value as if completed as of 28 February 2009 is RMB267,600,000.

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(5) As advised by the CCP Group, the property together with Property Nos. 7 and 8 were acquired on 4 January 2008 at a consideration of approximately RMB270,000,000.
(6) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Chongqng Zunding has obtained the land use rights of the property and has the rights to sell, lease, mortgage or otherwise dispose of the property;
ii. the property was transferred before the completion of its construction due to the 2007 Offshore Share Transfer, thus those favourable conditions enjoyed by Chongqing Zunding may be called back by the local government;
iii. the favorable conditions included the following:
- a. all the administrative fees previously owed (land premium, construction planning permit fees, etc.) will be exempted;
- b. deed tax paid in relation to the court mandated sale will be refunded;
- c. Zhongjin will not be responsible for the penalties previously incurred; and
- d. the term of the land use right will be re-calculated from the day that Zhongjin purchases it and Zhongjin will not need to pay the land premium for the extended term; and
iv. Chongqing Zunding has obtained the Planning Permit for Construction Land but it has not obtained the Planning Permit for Construction Works and Commencement Permit for Construction Works or the completion acceptance documents for the construction works of the property; and
v. the property is not subject to any mortgages or court seizures.

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PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenure occupancy 28 February 2009 10. Chuangyi Centre, The property comprises a parcel of land with a Foundation RMB850,000,000 South of Tianhebei site area of approximately 14,753.00 sq.m. work was Road and east of (158,801 sq.ft.). completed (100% interest Longkoudong Road, attributable to the Tianhe District, As advised by the CCP Group, the property is The property is CCP Group: Guangzhou, planned to be developed into 1 block of pending for RMB850,000,000) Guangdong Province, 32-storey serviced apartment, 3 blocks of development. PRC 40-storey high-rise residential buildings and ancillary facilities including a 4-storey basement for car parking spaces, 1 clubhouse and 1 primary school with a total gross floor area of approximately 115,584.00 sq.m. (1,244,146 sq.ft.). Breakdown of areas is listed as follows:

High-rise Residential Serviced Apartment Retail Ancillary Car park Total	Approximate Gross Floor Area sq.m. sq.ft. 52,487.00 564,970 20,293.00 218,434 1,555.00 16,738 7,294.00 78,513 33,955.00 365,492 115,584.00 1,244,147	Approximate Gross Floor Area sq.m. sq.ft. 52,487.00 564,970 20,293.00 218,434 1,555.00 16,738 7,294.00 78,513 33,955.00 365,492 115,584.00 1,244,147
		1,244,147

The proposed development is scheduled for commencement in the 3rd quarter of 2009 and for completion in the 3rd quarter of 2011 respectively.

The land use rights of the property have been granted for various terms (refer to Note 1).

Notes:

(1) Pursuant to a State-owned Land Use Certificate — Sui Fu Guo Yong (1999) Zi Di No. Te 037 issued by Guangzhou Municipal Government dated 11 February 1999, the land use rights of a parcel of land with a site area of 14,753.00 sq.m. have been granted to Guangzhou Infotach Property Development Co., Ltd. (“Infotach”), a wholly owned subsidary of CCP, for terms of 40, 50 and 70 years for commercial, tourism and entertainment uses, industrial and other uses and residential use respectively.

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PROPERTY VALUATION

(2) Pursuant to an Agreement Letter entered into between Guangzhou Municipal Education Bureau of Tianhe District (Party A), Guangzhou Municipal Tianhe Science Park Construction Co., Ltd. (Party B) and Infotach (Party C) dated 5 December 2008, the three parties have reached the following agreements concerning the construction of a primary school :
(i) Party B has agreed to provide the parcel of land located to the west of Wushan Road and the north of No.113 Middle School with a site area of 11,395.947 sq.m. to Party C for the construction of Chuangyi Primary School. The construction of the Primary School is to be financed by Party C.
(ii) Party B and Party C have agreed to bestow the Primary School to Party A upon completion.
(3) Pursuant to an Approval Letter of Construction Detailed Planning — Sui Gui Pi (2008) No. 507 issued by Guangzhou Municipal Urban Planning Bureau dated 19 December 2008, the detailed construction planning for Chuangyi Centre and Chuangyi Primary School is approved.
(4) Pursuant to a Planning Permit for Construction Land — (91) Sui Cheng Gui Di No. 0854 issued by Guangzhou Municipal Planning Bureau dated 12 March 1992, a parcel of land was permitted for construction.
(5) As advised by the CCP Group, there was an estimated outstanding construction cost of approximately RMB552,000,000 to be spent to complete the proposed development as at the Valuation Date. In undertaking our valuation, we have taken into account the said amount.
(6) The capital value as if completed as of 28 February 2009 is RMB1,837,000,000.
(7) As advised by the CCP Group, the property was acquired on 22 November 2007 at a consideration of approximately RMB810,000,000.
(8) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. Infotach has obtained the land use rights of the property and is entitled to sell, lease, mortgage or otherwise dispose of the property;
ii. Infotach has obtained the Planning Permit for Construction Land but it has not obtained the Planning Permit for Construction Works and Commencement Permit for Construction Works or the completion acceptance documents for the construction works of the property; and
iii. the property is not subject to any mortgages or court seizures.

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PROPERTY VALUATION

Group IV — Property contracted to be acquired by the CCP Group in the PRC

No. Property Description and tenure 11. A parcel of land The property comprises a parcel of land with a located at west and site area of approximately 79,704.00 sq.m. east of (857,934 sq.ft.). Bailongjiang Road (also known as As per supplied information, the maximum Phase II of permissible gross floor area of the property is Shenyang approximately 583,695.00 sq.m. (6,282,893 Central Plaza), sq.ft.) for residential and commercial uses. Huanggu District, The land use rights of the property have been
Shenyang, Liaoning Province, granted for a term of 50 years and 40 years for PRC residential and commercial uses respectively.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is RMB930,000,000 vacant with some structures (40% interest erected thereon attributable to pending for the CCP Group: demolition. RMB372,000,000)

Notes:

(1) Pursuant to a Confirmation of Land Auction of No.21 Bei Ling Main Street issued by Shenyang Municipal Land Reserve and Exchange Centre dated 25 January 2008, 2 parcels of land with a total site area of approximately 79,704.00 sq.m. were transacted to Shenyang Zhong Hui Da Properties Co., Ltd. (“Zhong Hui Da”), a 40% owned jointly controlled entity of CCP, for a term of 40 years and 50 years for commercial and residential uses respectively. Development conditions are listed as follows:

Plot A (west side of Bailongjiang Street)

Site Area: 25,767.00 sq.m. Land Use: Residential and Commercial Plot Ratio: less than or equal to 8 Proportion of Commercial: 70%

Plot B (east side of Bailongjiang Street)

Site Area: 53,937.00 sq.m. Land Use: Residential and Commercial Plot Ratio: less than or equal to 7 Proportion of Commercial: 20%

(2) Some building structures were erected upon the property. As advised by the CCP Group, the demolition works will be completed in mid 2009.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s legal adviser, which contains, inter alia, the following information:
i. according to the Confirmation Letter, Zhong Hui Da is the bid winner of the land use rights of the property and will obtain the land use rights of Central Plaza Phase II subject to the terms of the Confirmation Letter; and
ii. according to the payment vouchers provided by Zhong Hui Da, the land premium as stipulated in the Confirmation Letter in the sum of approximately RMB917,393,040 has been paid in full.

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PROPERTY VALUATION

Group V — Properties leased by the CCP Group in the PRC

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
12.	An office unit on	The property comprises an office unit on Level	The property is	No commercial value
	Level 13, CYTS	13 of a 20-storey office building completed in	occupied by the
	Plaza, No. 5 South	about 2006.	CCP Group as
	Dongzhimen Road,		an office.
	Dongcheng District,	The gross floor area of the property is
	Beijing,	approximately 675.00 sq.m. (7,266 sq.ft.)
	PRC
		The property is leased from China CYTS Tours
		Holding Co., Ltd., an independent third party
		for a term of three years commencing on 1
		December 2008 and expiring on 30 November
		2011 at a monthly rental of RMB122,195.25
		with rent free periods as follows:
		1 November 2009 — 30 November 2009
		1 November 2010 — 30 November 2010
		1 November 2011 — 30 November 2011

Notes:

(1) The lessee of the property, Beijing Zhonghui Garden Consulting Co., Ltd. (“Beijing Zhonghui”), is a wholly owned subsidiary of CCP.
(2) We have been provided with legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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PROPERTY VALUATION

No. Property Description and tenancy details 13. An office unit on The property comprises an office unit on Level Level 13, CYTS 13 of a 20-storey office building completed in Plaza, No. 5 South about 2006. Dongzhimen Road, Dongcheng District, The gross floor area of the property is Beijing, approximately 1,125.00 sq.m. (12,110 sq.ft.) PRC The property is leased from China CYTS Tours Holding Co., Ltd., an independent third party for a term of three years commencing on 1 December 2008 and expiring on 30 November 2011 at a monthly rental of RMB203,658.75 with rent free periods as follows: 1 November 2009 — 30 November 2009 1 November 2010 — 30 November 2010 1 November 2011 — 30 November 2011

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as an office.

Notes:

(1) The lessee of the property, Yida, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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PROPERTY VALUATION

No. Property Description and tenancy details 14. Units 909AB and The property comprises 2 office units on Level 910 on Level 9, 9 of a 16-storey office building completed in Diyang Plaza, about 2005. No. 2 North Donsanhuan Road, The gross floor area of the property is Chaoyang District, approximately 463.82 sq.m. (4,993 sq.ft.) Beijing, PRC The property is leased from Beijing Diyang Real Estate Co., Ltd., an independent third party, for a term of half year commencing on 1 January 2009 and expiring on 30 June 2009 at a monthly rental of RMB50,788.29 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as an office.

Notes:

(1) The lessee of the property, Yida, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 15. Unit 1907 on The property comprises an apartment unit of a The property is No commercial value Level 19, composite development completed in about occupied by the International Harbor, 2008. CCP Group as No. 2 North staff quarters. Donsanhuan Road, The gross floor area of the property is Chaoyang District, approximately 80.00 sq.m. (861 sq.ft.) Beijing, PRC The property is leased from Ke Zhihua, an independent third party, for a term of half year commencing on 21 November 2008 and expiring on 20 May 2009 at a monthly rental of RMB4,500 inclusive of management fees.

Notes:

(1) The lessee of the property, Yida, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 16. Unit 788 on Level The property comprises an apartment unit on The property is No commercial value 7, Hongkong Level 7 of a 17-storey composite building occupied by the Macau Center completed in about 1991. CCP Group as Swissotel, staff quarters. No. 5 North The lettable area of the property is Chongyao Road, approximately 55.00 sq.m. (592 sq.ft.) Dongcheng District, The property is leased from Swissotel Beijing, PRC Management Co., Ltd., an independent third party, for a term of one year commencing on 19 December 2008 and expiring on 18 December 2009 at a monthly rental of RMB15,300.

Notes:

(1) The lessee of the property, Beijing Zhonghui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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PROPERTY VALUATION

Market value in
Particulars of existing state as at
No. Property Description and tenancy details occupancy 28 February 2009 17. Unit T11-1101 on The property comprises an apartment unit on The property is No commercial value Level 11, Seasons Level 11 of a 22-storey residential building occupied by the Park, No. 36 completed in about 2007. CCP Group as Dongzhimenwai staff quarters. Road, The gross floor area of the property is Dongcheng District, approximately 98.00 sq.m. (1,055 sq.ft.) Beijing, PRC The property is leased from Kong Jiangnan, an independent third party, for a term of one year commencing on 1 March 2009 and expiring on 28 February 2010 at a monthly rental of RMB8,500 inclusive of management fees.

Notes:

(1) The lessee of the property, Beijing Zhonghui, is a wholly owned subsidiary of CCP.
(2) We have been provided with legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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PROPERTY VALUATION

No. Property Description and tenancy details

Unit T12-1801 on The property comprises an apartment unit on Level 18, Seasons Level 18 of a 22-storey residential building Park, No. 36 completed in about 2007. Dongzhimenwai Road, The gross floor area of the property is Dongcheng District, approximately 95.24 sq.m. (1,025 sq.ft.). Beijing, PRC The property is leased from Wu Xu, an independent third party, for a term of one year commencing on 15 January 2009 and expiring on 14 January 2010 at a monthly rental of RMB9,000 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Beijing Zhonghui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 263 —

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PROPERTY VALUATION

Market value in
Particulars of existing state as at
No. Property Description and tenancy details occupancy 28 February 2009 19. Unit 402 on Level The property comprises an apartment unit on The property is No commercial value 4, Yudong Garden, Level 4 of a 6-storey residential building occupied by the Chaoyangmenwai completed in about 2007. CCP Group as Road, staff quarters. Chaoyang District, The lettable area of the property is Beijing, approximately 125.00 sq.m. (1,346 sq.ft.). PRC The property is leased from Wang Guirong, an independent third party, for a term of one year commencing on 5 December 2008 and expiring on 4 December 2009 at a monthly rental of RMB9,000 inclusive of management fees.

Notes:

(1) The lessee of the property, Beijing Zhonghui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 264 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 2201 on Level The property comprises an apartment unit on 22, Building 2, No. Levels 22 of a 32-storey residential building 165 Youth Avenue, completed in about 2006. Shenhe District, Shenyang, The gross floor area of the property is Liaoning Province, approximately 150.28 sq.m. (1,618 sq.ft.). PRC The property is leased from Yin Xudong, an independent third party, for a term of one year commencing on 1 September 2008 and expiring on 31 August 2009 at a monthly rental of RMB10,000 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 265 —

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PROPERTY VALUATION

Market value in
Particulars of existing state as at
No. Property Description and tenancy details occupancy 28 February 2009 21. Unit 2203 on Level The property comprises an apartment unit on The property is No commercial value 22, Building 4, Level 22 of a 32-storey residential building occupied by the No. 65 Youth completed in about 2006. CCP Group as Avenue, staff quarters. Shenhe District, The gross floor area of the property is Shenyang, approximately 102.20 sq.m. (1,100 sq.ft.). Liaoning Province, PRC The property is leased from Gao Zhuan, an independent third party, for a term of half year commencing on 21 December 2008 and expiring on 20 June 2009 at a monthly rental of RMB3,950 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 266 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 22. Unit 907 The property comprises an apartment unit on on Level 9, Level 9 of a 26-storey residential building Building 1, completed in about 2006. No. 211 Youth Avenue, The gross floor area of the property is Shenhe District, approximately 95.97 sq.m. (1,033 sq.ft.). Shenyang, The property was leased from Tian Xiaohong, an Liaoning Province, PRC independent third party, for a term of one year commencing on 1 May 2008 and expiring on 30 April 2009 at a monthly rental of RMB8,000 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property No commercial value was occupied by the CCP Group as staff quarters as at Valuation Date.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 267 —

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PROPERTY VALUATION

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
23.	Unit 106	The property comprises an apartment unit on	The property is	No commercial value
	on Level 10,	Level 10 of a 26-storey residential building	occupied by the
	Building 2,	completed in about 2006.	CCP Group as
	No. 211 Youth		staff quarters.
	Avenue,	The gross floor area of the property is
	Shenhe District,	approximately 134.96 sq.m. (1,453 sq.ft.).
	Shenyang,
	Liaoning Province,	The property was leased from Meng Chenghong
	PRC	and Li Meng, an independent third party, for a
		term of one year commencing on 6 May 2008
		and expiring on 5 May 2009 at a monthly rental
		of RMB10,000 inclusive of management fees. It
		will be renewed for a further term of one year
		expiring on 5 May 2010 at a monthly rental of
		RMB10,000 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 268 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 1207 The property comprises an apartment unit on on Level 12, Level 12 of a 26-storey residential building Building 1, completed in about 2006. No. 211 Youth Avenue, The gross floor area of the property is Shenhe District, approximately 95.97 sq.m. (1,033 sq.ft.). Shenyang, The property is leased from Mu Gang, an Liaoning Province, PRC independent third party, for a term of one year commencing on 11 November 2008 and expiring on 10 November 2009 at a monthly rental of RMB7,000 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 269 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 25. Unit 808 on Level The property comprises an apartment unit on The property is No commercial value 8, Building A, No. Level 8 of a 26-storey residential building occupied by the 211-1 Youth completed in about 2006. CCP Group as Avenue, staff quarters. Shenhe District, The gross floor area of the property is Shenyang, approximately 144.09 sq.m. (1,551 sq.ft.). Liaoning Province, PRC The property is leased from Hai Yu, an independent third party, for a term of one year commencing on 25 April 2009 and expiring on 24 April 2010 at a monthly rental of RMB8,000 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of the CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 270 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 26. An office unit on The property comprises an office unit on Level The property is No commercial value Level 21, 21 of a 23-storey composite building completed occupied by the N.H.M. in about 2002. CCP Group as International Plaza, an office. No. 51 North The lettable area of the property is Station Road, approximately 533.34 sq.m. (5,741 sq.ft.). Shenhe District, The property is leased from Shenyang Xin Gang Shenyang, Ao Property Development Co., Ltd., an Liaoning Province, PRC independent third party, for a term of one year commencing on 9 June 2008 and expiring on 8 June 2009 at a monthly rental of RMB45,000 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 271 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

An office unit on The property comprises an office unit on Level Level 22, N.H.M. 22 of a 23-storey composite building completed International Plaza, in about 2002. No. 51 North Station Road, The lettable area of the property is Shenhe District, approximately 517.62 sq.m. (5,572 sq.ft.). Shenyang, The property is leased from Shenyang Xin Gang Liaoning Province, PRC Ao Property Development Co., Ltd., an independent third party, for a term of one year commencing on 9 June 2008 and expiring on 8 June 2009 at a monthly rental of RMB46,667 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as an office.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 272 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 28. Unit 2002 The property comprises an apartment unit on on Level 20, Level 20 of a 30-storey residential building Milky Way completed in about 2007. International, No. 28 North Station The gross floor area of the property is Road, Shenhe approximately 44.64 sq.m. (481 sq.ft.). District, Shenyang, The property was leased from Li Shulan, an
Liaoning Province, PRC independent third party, for a term of half year commencing on 6 September 2008 and expiring on 6 March 2009 at a monthly rental of RMB1,800 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property No commercial value was occupied by the CCP Group as staff quarters as at Valuation Date.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal advisers, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 273 —

APPENDIX VI

PROPERTY VALUATION

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
29.	Unit 1-1110	The property comprises an apartment unit on	The property is	No commercial value
	on Level 11,	Level 11 of a 30-storey residential building	occupied by the
	Milky Way	completed in about 2007.	CCP Group as
	International, No.		staff quarters.
	28 North Station	The gross floor area of the property is
	Road, Shenhe	approximately 52.46 sq.m. (565 sq.ft.).
	District, Shenyang,
	Liaoning Province,	The property was leased from Zhang Yongjian,
	PRC	an independent third party, for a term of half
		year commencing on 20 October 2008 and
		expiring on 20 April 2009 at a monthly rental of
		RMB1,900 inclusive of management fees. It was
		renewed for a further term of half year expiring
		on 20 October 2009 at a monthly rental of
		RMB1,900 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contracts are legal and effective; and
ii. the lessee has the rights to use the property.

— 274 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 30. Unit 1709 The property comprises an apartment unit on The property is No commercial value on Level 17, Level 17 of a 30-storey residential building occupied by the Milky Way completed in about 2007. CCP Group as International, staff quarters. No.28 North The gross floor area of the property is Station Road, approximately 53.64 sq.m. (577 sq.ft.). Shenhe District, The property was leased from Chen Wei, an Shenyang, independent third party, for a term of three Liaoning Province, PRC months commencing on 2 February 2009 and expiring on 1 May 2009 at a monthly rental of RMB3,000 exclusive of management fees. It will be renewed for a further term of 2 months expiring on 1 July 2009 at a monthly rental of RMB3,000 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 275 —

APPENDIX VI

PROPERTY VALUATION

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
31.	Unit 1405 on	The property comprises an apartment unit on	The property	No commercial value
	Level 14,	Level 14 of a 30-storey residential building	was occupied
	Milky Way	completed in about 2007.	by the CCP
	International,		Group as staff
	No. 28 North	The gross floor area of the property is	quarters.
	Station Road,	approximately 52.18 sq.m. (562 sq.ft.).
	Shenhe District,
	Shenyang,	The property was leased from Qu Baoyang, an
	Liaoning Province,	independent third party, for a term of half year
	PRC	commencing on 6 September 2008 and expiring
		on 6 March 2009 at a monthly rental of
		RMB1,800 inclusive of management fees. It was
		renewed for a further term of 2 months expiring
		on 7 May 2009 at a monthly rental of
		RMB1,800 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of the CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contracts were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 276 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 32. Unit 14-1517 The property comprises an apartment unit on on Level 15, Level 15 of a 28-storey residential building Splendor Tiandi completed in about 2008. Building 3, No.128 Haerbin Road, The gross floor area of the property is Shenhe District, approximately 55.73 sq.m. (600 sq.ft.). Shenyang, The property was leased from Ma Hui, an
Liaoning Province, PRC independent third party, for a term of half year commencing on 17 September 2008 and expiring on 16 March 2009 at a monthly rental of RMB1,900 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property No commercial value was occupied by the CCP Group as staff quarters as at Valuation Date.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) The lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 277 —

APPENDIX VI

PROPERTY VALUATION

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
33.	Unit 1603	The property comprises an apartment unit on	The property is	No commercial value
	on Level 16,	Level 16 of a 28-storey residential building	occupied by the
	Splendor Tiandi	completed in about 2008.	CCP Group as
	Building 1,		staff quarters.
	No. 128 Haerbin	The gross floor area of the property is
	Road,	approximately 54.08 sq.m. (582 sq.ft.).
	Shenhe District,
	Shenyang,	The property was leased from Bai Yonggang and
	Liaoning Province,	Gong Shiyang, an independent third party, for a
	PRC	term of half year commencing on 11 November
		2008 and expiring on 11 May 2009 at a monthly
		rental of RMB2,300 inclusive of management
		fees. It will be renewed for a further term
		expiring on 1 June 2009 at a monthly rental of
		RMB1,900, inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 278 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 34. Unit 14-1516 The property comprises an apartment unit on on Level 15, Level 15 of a 28-storey residential building Splendor Tiandi completed in about 2008. Building 3, No. 128 Haerbin The gross floor area of the property is Road, approximately 55.01 sq.m. (592 sq.ft.). Shenhe District, The property was leased from Zhao Xiaojing, an
Shenyang, Liaoning Province, independent third party, for a term of half year PRC commencing on 17 September 2008 and expiring on 16 March 2009 at a monthly rental of RMB1,900 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property No commercial value was occupied by the CCP Group as staff quarters as at Valuation Date.

Notes:

(1) The lessee of the property, Huahui is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 279 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 35. Unit 1911 The property comprises an apartment unit on on Level 19, Level 19 of a 28-storey residential building Splendor Tiandi completed in about 2008. Building 1, No. 128 Haerbin The gross floor area of the property is Road, approximately 68.11 sq.m. (733 sq.ft.). Shenhe District, The property is leased from Hao Bin, an
Shenyang, Liaoning Province, independent third party, for a term of one year PRC commencing on 20 December 2008 and expiring on 19 December 2009 at a monthly rental of RMB3,600 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 280 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 36. Unit 1618 on Level The property comprises an apartment on Level The property is No commercial value 16, Splendor Tiandi 16 of a 28-storey residential building completed occupied by the Building 2, No. in about 2008. CCP Group as 128 Haerbin Road, staff quarters. Shenhe District, The gross floor area of the property is Shenyang, approximately 51.31 sq.m. (552 sq.ft.). Liaoning Province, PRC The property is leased from Cheng Chenjing, an independent third party, for a term of one year commencing on 4 March 2009 and expiring on 3 March 2010 at a monthly rental of RMB2,000 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of the CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 281 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 37. Unit 1613 on Level The property comprises an apartment unit on 16, Splendor Tiandi Level 16 of a 28-storey residential building Building 2, No. completed in about 2008. 128 Haerbin Road, Shenhe District, The gross floor area of the property is Shenyang, approximately 52.18 sq.m. (562 sq.ft.). Liaoning Province, PRC The property is leased from Meng Xing, an independent third party, for a term of 9 months commencing on 1 May 2009 and expiring on 31 January 2010 at a monthly rental of RMB1,900 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 282 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 38. Unit 3-503 The property comprises an apartment unit on The property is No commercial value on Level 5, Level 5 of a 6-storey residential building occupied by the No. 1 Bashan Road, completed in about 1995. CCP Group as Huanggu District, staff quarters. Shenyang, The gross floor area of the property is Liaoning Province, approximately 62.06 sq.m. (668 sq.ft.). PRC The property is leased from Zhou Tong, an independent third party, for a term of half year commencing on 23 February 2009 and expiring on 22 August 2009 at a monthly rental of RMB2,000 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 283 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit D-11-2 on The property comprises an apartment on Level Level 11, Long 11 of a 24-storey residential building completed Han City Garden, in about 2000. No. 84 North Station Road, The gross floor area of the property is Shenhe District, approximately 120.14 sq.m. (1,293 sq.ft.). Shenyang, The property is leased from Liu Chunliang, an Liaoning Province, PRC independent third party, for a term of one year commencing on 2 April 2009 and expiring on 1 April 2010 at a monthly rental of RMB3,000 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of the CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 284 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 40. Unit 2-7-2 on The property comprises an apartment on Level 7 The property is No commercial value Level 7, No. 168 of a 7-storey residential building completed in occupied by the Lingwen Road, about 2005. CCP Group as Shenhe District, staff quarters. Shenyang, The gross floor area of the property is Liaoning Province, approximately 55.11 sq.m. (593 sq.ft.). PRC The property is leased from He Weiguo, an independent third party, for a term of one year commencing on 16 March 2009 and expiring on 15 March 2010 at a monthly rental of RMB1,900 inclusive of management fees.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of the CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 285 —

APPENDIX VI

PROPERTY VALUATION

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
41.	Two hotel rooms in	The property comprises two apartment units of a	The property	No commercial value
	Ramada Hotel and	14-storey hotel building completed in about	was occupied
	Suites, No. 136	2006.	by the CCP
	Huigong Street,		Group as staff
	Shenhe District,	The total gross floor area of the property is	quarters as at
	Shenyang, Liaoning	approximately 106.00 sq.m. (1,141 sq.ft.).	Valuation Date.
	Province, PRC
		The property was leased from Shenyang
		Danfeng Bailu Hotel Co., Ltd., an independent
		third party, for a term of half year commencing
		on 23 December 2008 and expiring on 24 June
		2009 at a total monthly rental of RMB14,000
		inclusive of management fees. The lease
		contract of the two hotel rooms was terminated
		in January 2009 and April 2009 respectively.

Notes:

(1) The lessee of the property, Huahui, is a wholly owned subsidiary of the CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective within its lease term before the lease termination dates of the property; and
ii. the lessee had the rights to use the property within its lease term before the lease termination dates of the property.

— 286 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 42. Unit 1-1001-06 on The property comprises an office unit on Level The property is No commercial value Level 10, 10 of a 38-storey office building completed in occupied by the Plaza Central, 2006. CCP Group as No. 8 Shuncheng an office. Street, The gross floor area of the property is Jinjiang District, approximately 885.27 sq.m. (9,529 sq.ft.). Chengdu, Sichuan Province, The property is leased from Chengdu Huashang PRC House Development Co., Ltd., an independent third party, for a term of three years commencing on 16 July 2008 and expiring on 15 July 2011 at a monthly rental of RMB80,559.57 exclusive of management fees.

Notes:

(1) The lessees of the property are Shui On Hui Da and Chengdu Xianglong. Shui On Hui Da is a wholly owned subsidiary of CCP. Chengdu Xianglong is a 24.5% owned jointly controlled entity of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessees have the rights to use the property.

— 287 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 3-103 The property comprises a residential unit on on Level 1, Level 1 of an 11-storey residential building Building 21, completed in 2002. Zhong Hai Ming City, No 8, The gross floor area of the property is Shenxianshu South approximately 145.29 sq.m. (1.564 sq.ft.). Road, Gaoxin District, The property is leased from Jiang Xuan, an Chengdu, independent third party, for a term of one year Sichuan Province, commencing on 1 June 2008 and expiring on 30 PRC May 2009 at a monthly rental of RMB5,500 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No Commercial Value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 288 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 3-102 The property comprises a residential unit on on Level 1, Level 1 of a 6-storey residential building Building 12, Zhong completed in 2002. Hai Ming City, No 8, Shenxianshu The gross floor area of the property is South Road, approximately 121.65 sq.m. (1,309 sq.ft.). Gaoxin District, The property is leased from Huanng Wei, an

Chengdu, Sichuan Province, independent third party, for a term of one year PRC commencing on 2 July 2008 and expiring on 1 July 2009 at a monthly rental of RMB7,000 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 289 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details
Unit 1-502 The property comprises a residential unit on on Level 5, Level 5 of a 31-storey residential building Building 5, completed in 2007. Ling Jiang Feng Ge, The gross floor area of the property is No. 81 Shunjiang approximately 101.94 sq.m. (1,097 sq.ft.). Road, The property is leased from Zhang Lan, an

Jinjiang District, Chengdu, independent third party, for a term of one year Sichuan Province, commencing on 22 September 2008 and expiring PRC on 21 September 2009 at a monthly rental of RMB3,700 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 290 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 17F-4 The property comprises a residential unit on on Level 17, Level 17 of a 28-storey residential building Tower B, completed in 2007. Jian Yin Plaza,

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

No. 9 Hongxing The gross floor area of the property is Road, approximately 129.00 sq.m. (1,389 sq.ft.). Jinjiang District, The property is leased from Xi Mingshu, an
Chengdu, Sichuan Province, independent third party, for a term of one year PRC commencing on 13 January 2009 and expiring on 12 January 2010 at a monthly rental of RMB3,400 exclusive of management fees.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 291 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 47. Unit 7-10 The property comprises a residential unit on on Level 7, Level 7 of a 29-storey residential building Tower B, Cai Fu completed in 2007. Center, Junction of Daye Road, The gross floor area of the property is Chaoyang Road approximately 66.00 sq.m. (710 sq.ft.). and Qingshiqiao The property is leased from Du Jingping, an Road, Jinjiang District, independent third party, for a term of one year commencing on 11 September 2008 and expiring Chengdu, Sichuan Province, on 16 September 2009 at a monthly rental of PRC RMB2,700 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 292 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 19-7 The property comprises a residential unit on on Level 19, Level 19 of a 29-storey residential building Tower B, completed in 2007. Cai Fu Center, Junction of Daye The lettable area of the property is Road, approximately 72.00 sq.m. (775 sq.ft.). Chaoyang Road and Qingshiqiao The property was leased from Li Xiwu, an Road, independent third party, for a term of one year commencing on 8 May 2008 and expiring on 7 Jinjiang District, May 2009 at a monthly rental of RMB2,500 Chengdu, Sichuan Province, exclusive of management fees. PRC

Market value in Particulars of existing state as at occupancy 28 February 2009 The property No commercial value was occupied by the CCP Group as staff quarters as at Valuation Date.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 293 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details
Unit 22-5 The property comprises a residential unit on on Level 22, Level 22 of a 29-storey residential building Tower B, completed in 2007. Cai Fu Center, Junction of Daye The gross floor area of the property is Road, approximately 72.00 sq.m. (775 sq.ft.). Chaoyang Road and Qingshiqiao The property is leased from Peng Siheng, an Road, independent third party, for a term of one year commencing on 10 September 2008 and expiring

Jinjiang District, on 9 September 2009 at a monthly rental of

Chengdu, Sichuan Province, RMB2,500 exclusive of management fees. PRC

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 294 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

A carparking space The property comprises a carpark in the in the Basement of basement of a 38-storey office building Plaza Central, completed in 2006. No. 8 Shuncheng Street, The property is leased from Chengdu Huashang Jinjiang District, House Development Co., Ltd., an independent Chengdu, third party, on monthly basis commencing on 1 Sichuan Province, November 2008 at a monthly rental of PRC RMB500 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as a carpark.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 295 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 51. A carparking space The property comprises a carpark in the in the Basement of basement of a 38-storey office building Plaza Central, completed in 2006. No. 8 Shuncheng Street, The property is leased from Chengdu Huashang Jinjiang District, House Development Co., Ltd., an independent Chengdu, third party, on monthly basis commencing on 1 Sichuan Province, November 2008 at a monthly rental of RMB500 PRC exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as a carpark.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the tenancy arrangement are legal and effective; and
ii. the lessee has the rights to use the property.

— 296 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Car Park No. 110, The property comprises a carpark in the Plaza Central basement of a 38-storey office building No. 8 Shuncheng completed in 2006. Street, Jinjiang District, The property is leased from Chengdu Huashang Chengdu, House Development Co., Ltd., an independent Sichuan Province, third party, on monthly basis commencing on 1 PRC November 2008 at a monthly rental of RMB1,600 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as a carpark.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 297 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

A carparking space The property comprises a carpark in the in the Basement of basement of a 38-storey office building Plaza Central, completed in 2006. No. 8 Shuncheng Street, The property is leased from Chengdu Huashang Jinjiang District, House Development Co., Ltd, an independent Chengdu, third party, on monthly basis commencing on 1 Sichuan Province, November 2008 at a monthly rental of RMB800 PRC exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as a carpark.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 298 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 3-2901 on The property comprises an apartment unit on Level 29, Level 29 of a 33-storey residential building Building 1, completed in 2009. Empress Tower, No. 66 Datangkan The gross floor area of the property is Road, approximately 79.89 sq.m. (860 sq.ft.). Jinjiang District, The property is leased from Yang Zehua, an

Chengdu, Sichuan Province, independent third party, for a term of one year PRC commencing on 7 May 2009 and expiring on 6 May 2010 at a monthly rental of RMB2,800 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Shui On Hui Da, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii the lessee has the rights to use the property.

— 299 —

APPENDIX VI

PROPERTY VALUATION

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
55.	Units 6,11 and 12	The property comprises 3 office units on Level	The property is	No commercial value
	on Level 25,	25 of a 40-storey office building completed in	occupied by the
	International Trade	about 2005.	CCP Group as
	Centre, No.38		an office.
	Youth Road,	The total gross floor area of the property is
	Yuzhong District,	approximately 247.73 sq.m. (2,667 sq.ft.).
	Chongqing,
	PRC	The property is leased from Huang Minsheng, an
		independent third party, for a term of two years
		commencing on 1 November 2007 and expiring
		on 31 October 2009 at a monthly rental of
		RMB13,873 exclusive of management fees.

Notes:

(1) The lessee of the property, Chongqing Hui Zheng, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 300 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 56. Units 7, 8, 9 and The property comprises 4 office units on Level The property is No commercial value 10 on Level 25, 25 of a 40-storey office building completed in occupied by the International Trade about 2005. CCP Group as Centre, an office. No.38 Youth Road, The total gross floor area of the property is Yuzhong District, approximately 500.00 sq.m. (5,382 sq.ft.). Chongqing, PRC The property is leased from Du Haijun, an independent third party, for a term of two years commencing on 1 November 2007 and expiring on 31 October 2009 at a monthly rental of RMB28,000 exclusive of management fees.

Notes:

(1) The lessee of the property, Chongqing Hui Zheng, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 301 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 57. Unit 4 The property comprises an office unit on Level on Level 25, 25 of a 40-storey office building completed in International Trade about 2005. Centre, No. 38 Youth Road, The gross floor area of the property is Yuzhong District, approximately 126.30 sq.m. (1,359 sq.ft.). Chongqing, PRC The property is leased from Ke Liner, an independent third party, for a term of one and half years commencing on 1 July 2008 and expiring on 31 December 2009 at a monthly rental of RMB7,500 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as an office.

Notes:

(1) The lessee of the property, Chongqing Hui Zheng, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 302 —

APPENDIX VI

PROPERTY VALUATION

Description and tenancy details

No. Property

Unit 5-7-2 The property comprises a residential unit on on Level 7, Level 7 of a 10-storey residential building Block A, Renhe completed in 2004. Tiandi, No.11 Xinnan Road, The gross floor area of the property is Yubei District, approximately 152.47 sq.m. (1,641 sq.ft.). Chongqing, PRC The property is leased from Chen Rong, an independent third party, for a term of one year commencing on 17 December 2008 and expiring on 16 December 2009 at a monthly rental of RMB4,317 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Chongqing Hui Zheng, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 303 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 59. Unit 3804 The property comprises a residential unit on The property is No commercial value on Level 38, Level 38 of a 41-storey residential building occupied by the Tower B, completed in 2004. CCP Group as Oriental staff quarters. Manhattan, The gross floor area of the property is No.9 Bayi Road, approximately 68.37 sq.m. (736 sq.ft.). Yuzhong District, The property was leased from Xu Xiaofei, an Chongqing, PRC independent third party, for a term of one year commencing on 16 April 2008 and expiring on 16 April 2009 at a monthly rental of RMB4,000 exclusive of management fees. It was renewed for a further term of one year expiring on 16 April 2010 at monthly rental of RMB4,000 exclusive of management fees.

Notes:

(1) The lessee of the property, Chongqing Hui Zheng, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contracts are legal and effective; and
ii. the lessee has the rights to use the property.

— 304 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 60. Unit 3008 The property comprises a residential unit on The property is No commercial value on Level 30, Level 30 of a 41-storey residential building occupied by the Tower B, completed in 2004. CCP Group as Oriental staff quarters. Manhattan, The gross floor area of the property is No.9 Bayi Road, approximately 58.03 sq.m. (625 sq.ft.). Yuzhong District, The property is leased from Sun Ling, an Chongqing, PRC independent third party, for a term of 1 years commencing on 7 March 2009 and expiring on 6 March 2010 at a monthly rental of RMB2,300 exclusive of management fees.

Notes:

(1) The lessee of the property, Chongqing Hui Zheng, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 305 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 07 The property comprises a residential unit on on Level 36, Level 36 of a 39-storey residential building City Legend, completed in 2003. No. 9 Linjiangzhi Road, The gross floor area of the property is Yuzhong District, approximately 140.47 sq.m. (1,512 sq.ft.). Chongqing, PRC The property was leased from Yang Xiaoping, an independent third party, for a term of one year commencing on 10 April 2008 and expiring on 10 April 2009 at a monthly rental of RMB6,000 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property No commercial value was occupied by the CCP Group as staff quarters as at Valuation Date.

Notes:

(1) The lessee of the property, Chongqing Hui Zheng, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 306 —

APPENDIX VI

PROPERTY VALUATION

No.
Property
62.
Unit 2213
on Level 22,
Yaozhong Plaza,
Nos. 3-15
Linhexi Road,
Tianhe District,
Guangzhou,
Guangdong Province,
PRC

Description and tenancy details
Particulars of
occupancy
Market value in
existing state as at
28 February 2009
The property comprises an office unit on Level
22 of a 45-storey office building completed in
2007.
The gross floor area of the property is
approximately 81.88 sq.m. (881 sq.ft.).
The property is leased from Guangzhou
Yaozhong Property Development Co., Ltd., an
independent third party, for a term of five years
at the following monthly rentals:
Lease Term
Monthly rental
25 February 2008 - 8 May 2008
Rent Free
9 May 2008 - 24 February 2010
RMB10,890
25 February 2010 - 24 February 2012
RMB11,761
25 February 2012 - 24 February 2013
RMB12,702
The property is
occupied by the
CCP Group as
an office.
No commercial value

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 307 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 63. Unit 2214 The property comprises an office unit on Level The property is No commercial value on Level 22, 22 of a 45-storey office building completed in occupied by the Yaozhong Plaza, 2007. CCP Group as Nos. 3-15 Linhexi an office. Road, The gross floor area of the property is Tianhe District, approximately 83.63 sq.m. (900 sq.ft.). Guangzhou, The property is leased from Guangzhou Guangdong Province, PRC Yaozhong Property Development Co., Ltd., an independent third party, for a term of five years at the following monthly rentals: Lease Term Monthly rental 25 February 2008 - 8 May 2008 Rent Free 9 May 2008 - 24 February 2010 RMB11,123 25 February 2010 - 24 February 2012 RMB12,013 25 February 2012 - 24 February 2013 RMB12,974

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 308 —

APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 64. Unit 2215 The property comprises an office unit on Level The property is No commercial value on Level 22, 22 of a 45-storey office building completed in occupied by the Yaozhong Plaza, 2007. CCP Group as Nos. 3-15 Linhexi an office. Road, The gross floor area of the property is Tianhe District, approximately 82.88 sq.m. (892 sq.ft.). Guangzhou, The property is leased from Guangzhou Guangdong Province, PRC Yaozhong Property Development Co., Ltd., an independent third party, for a term of five years at the following monthly rentals: Lease Term Monthly rental 25 February 2008 - 8 May 2008 Rent Free 9 May 2008 - 24 February 2010 RMB11,023 25 February 2010 - 24 February 2012 RMB11,905 25 February 2012 - 24 February 2013 RMB12,857

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 309 —

APPENDIX VI

PROPERTY VALUATION

No.
Property
65.
Unit 2216
on Level 22,
Yaozhong Plaza,
Nos. 3-15 Linhexi
Road, Tianhe
District,
Guangzhou,
Guangdong Province,
PRC

Description and tenancy details
Particulars of
occupancy
Market value in
existing state as at
28 February 2009
The property comprises an office unit on Level
22 of a 45-storey office building completed in
2007.
The gross floor area of the property is
approximately 1,011.26 sq.m. (10,885 sq.ft.).
The property is leased from Guangzhou
Yaozhong Property Development Co., Ltd., an
independent third party, for a term of five years
at the following monthly rentals:
Lease Term
Monthly rental
25 February 2008 - 8 May 2008
Rent Free
9 May 2008 - 24 February 2010
RMB134,497
25 February 2010 - 24 February 2012
RMB145,257
25 February 2012 - 24 February 2013
RMB156,878
The property is
occupied by the
CCP Group as
an office.
No commercial value

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 310 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 66. Unit 10A The property comprises a residential unit on on Level 10, Level 10 of a 33-storey residential building Dijin Building, completed in 2000. No.3 Longkouzhong The gross floor area of the property is Road, approximately 121.19 sq.m. (1,304 sq.ft.). Tianhe District, The property is leased from Zhang Zhiming and Guangzhou, Wang Xin, independent third parties, for a term Guangdong Province, PRC of three years commencing on 1 April 2008 and expiring on 31 March 2011 at a monthly rental of RMB7,200 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 311 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 807 The property comprises a residential unit on on Level 8, Level 8 of a 19-storey residential building Qiaolin Building, completed in 1997. No.51 Qiaolin Street, The gross floor area of the property is Linhedong Road, approximately 106.99 sq.m. (1.152 sq.ft.). Tianhe District, The property was leased from Zhang Jian, an Guangzhou, Guangdong Province, independent third party, for a term of one year PRC commencing on 5 May 2008 and expiring on 4 May 2009 at a monthly rental of RMB4,000 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property No commercial value was occupied by the CCP Group as staff quarter as at Valuation Date.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) The existing lease contract expired before the last practicable date. As advised by the CCP Group, the lease contract will not be renewed.
(3) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal advisers, which contains, inter alia, the following information:
i. the major terms of the lease contract were legal and effective as at Valuation Date; and
ii. the lessee had the rights to use the property as at Valuation Date.

— 312 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 2102 The property comprises a residential unit on on Level 21, Level 21 of a 24-storey residential building Yayuan Building, completed in 1995. No. 3 Huaxiao Street, The gross floor area of the property is Tianhedong Road, approximately 125.19 sq.m. (1,348 sq.ft.). Tianhe District, The property is leased from Zhong Huifang and Guangzhou, Liu Zhiwei, independent third parties, for a term Guangdong Province, PRC of one and half years commencing on 20 June 2008 and expiring on 19 December 2009 at a monthly rental of RMB4,500 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 69. Unit 601 The property comprises a residential unit on on Level 6, Level 6 of a 32-storey residential building Yaoxing Building, completed in 2004. No. 25 Tianshou Road, The gross floor area of the property is Tianhe District, approximately 81.49 sq.m. (877 sq.ft.). Guangzhou, The property is leased from Wang Cheng and Guangdong Province, PRC Liang Zhizheng independent third parties, for a term of one year commencing on 15 September 2008 and expiring on 14 September 2009 at a monthly rental of RMB3,500 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 70. Unit 401 The property comprises a residential unit on The property is No commercial value on Level 4, Level 4 of a 32-storey residential building occupied by the Yaoxing Building, completed in 2004. CCP Group as No.25 Tianshou staff quarters. Road, Tianhe The gross floor area of the property is District, approximately 85.69 sq.m. (922 sq.ft.). Guangzhou, The property is leased from He Zhiyong and He Guangdong Province, PRC Saiqing, independent third parties, for a term of one year commencing on 15 September 2008 and expiring on 14 September 2009 at a monthly rental of RMB3,500 exclusive of management fees.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 13A01 on The property comprises a residential unit on Level 13, Level 13 of a 34-storey residential building Xinhuiyuan completed in 2001. Building, No.35 Huaming The gross floor area of the property is Road, Tianhe approximately 118.74 sq.m. (1,278 sq.ft.). District, The property is leased from Huang Meilan, an

Guangzhou, Guangdong Province, independent third party, for a term of one year PRC commencing on 1 November 2008 and expiring on 31 October 2009 at a monthly rental of RMB6,700 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details

Unit 904 The property comprises a residential unit on on Level 9, Level 9 of a 34-storey residential building Haomenge South completed in 1999. Building, Huacheng Main The gross floor area of the property is Road, approximately 145.98 sq.m. (1,571 sq.ft.). Tianhe District, The property is leased from Xiaoshiying, an

Guangzhou, Guangdong Province, independent third party, for a term of two years PRC commencing on 1 May 2008 and expiring on 30 April 2010 at a monthly rental of RMB10,000 exclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 317 —

APPENDIX VI

PROPERTY VALUATION

No. Property Description and tenancy details 73. Unit 1105 The property comprises a residential unit on on Level 11, Level 11 of a 29-storey residential building Tianwenyuan completed in 2003. Building, No.105 Tiyuxi The gross floor area of the property is Road, approximately 66.00 sq.m. (710 sq.ft.). Tianhe District, The property is leased from Wu Yinhua, an
Guangzhou, Guangdong Province, independent third party, for a term of one year PRC commencing on 1 December 2008 and expiring on 1 December 2009 at a monthly rental of RMB3,200 inclusive of management fees.

Market value in Particulars of existing state as at occupancy 28 February 2009 The property is No commercial value occupied by the CCP Group as staff quarters.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

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APPENDIX VI

PROPERTY VALUATION

Market value in Particulars of existing state as at No. Property Description and tenancy details occupancy 28 February 2009 74. Unit 13A02 on The property comprises a residential unit on The property is No commercial value Level 13, Level 13 of a 31-storey residential building occupied by the No.66 Qiaolin completed in 2005. CCP Group as Street, staff quarters. Tianhe North Road, The gross floor area of the property is Tianhe District, approximately 64.25 sq.m. (692 sq.ft.). Guangzhou, The property is leased from Zhang Yi Chun, an Guangdong Province, PRC independent third party, for a term of one year commencing on 23 April 2009 and expiring on 22 April 2010 at a monthly rental of RMB4,000 exclusive of management fees.

Notes:

(1) The lessee of the property, Infotach, is a wholly owned subsidiary of the CCP.
(2) We have been provided with a legal opinion on the title to the property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
i. the major terms of the lease contract are legal and effective; and
ii. the lessee has the rights to use the property.

— 319 —

APPENDIX VI

PROPERTY VALUATION

Group VI — Property leased by the Group in Hong Kong

				Market value in
			Particulars of	existing state as at
No.	Property	Description and tenancy details	occupancy	28 February 2009
75.	Units 1101-1102,	The property comprises an office unit on Level	The property is	No commercial value
	Level 11,	11 of a 35-storey office building erected over a	occupied by the
	Shui On Centre,	3-storey basement completed in 1987.	CCP Group as
	Nos. 6 - 8 Harbour		an office.
	Road,	The lettable area of the property is
	Wanchai,	approximately 226.96 sq.m. (2,443 sq.ft.).
	Hong Kong
		The property is leased from Shui On Centre
		Company Limited, for a term of three years
		commencing on 1 June 2007 and expiring on 31
		May 2010 at a monthly rental of HK$80,619
		exclusive of management fees and government
		rates.

Notes:

The lessee of the property, China Central Properties (BVI) Limited, is a wholly owned subsidiary of CCP.

— 320 —

GENERAL INFORMATION

APPENDIX VII

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(A) Interests of SOCAM Directors and chief executive

At the Last Practicable Date, the interests and short positions of the SOCAM Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the HK Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have been taken under such provisions of the SFO) or the Model Code for Securities Transactions by Directors of Listed Issuers or which were required to be entered in the register required to be kept under section 352 of the SFO were as follows:

(a) Long position in the SOCAM Shares

					Approximate
					percentage of
		Number of SOCAM Shares			shareholding
Name of	Personal	Family	Other		in the
SOCAM Directors	interests	interests	interests	Total	Company
Mr. Lo Hong Sui, Vincent	—	312,000	181,981,000	182,293,000	56.63%
		(Note 1)	(Note 2)
Mr. Choi Yuk Keung,	1,100,000	—	—	1,100,000	0.34%
Lawrence
Mr. Wong Yuet Leung,	800,000	—	—	800,000	0.25%
Frankie
Mrs. Lowe Hoh Wai Wan,	720,000	—	—	720,000	0.22%
Vivien

Notes:

(1) These SOCAM Shares are beneficially owned by Ms. Loletta Chu (“Mrs. Lo”), the spouse of Mr. Lo Hong Sui, Vincent. Under the SFO, Mr. Lo Hong Sui, Vincent is deemed to be interested in such SOCAM Shares and both Mr. Lo Hong Sui, Vincent and Mrs. Lo are also deemed to be interested in 181,981,000 SOCAM Shares mentioned in note (2) below.

— 321 —

APPENDIX VII

GENERAL INFORMATION

(2) These SOCAM Shares are beneficially owned by Shui On Company Limited (“SOCL”) and Shui On Finance Company Limited. Of these 181,981,000 SOCAM Shares, 166,148,000 SOCAM Shares are held by SOCL itself and 15,833,000 SOCAM Shares are held by Shui On Finance Company Limited, an indirect wholly-owned subsidiary of SOCL. SOCL is owned by the Bosrich Unit Trust, the trustee of which is Bosrich Holdings (PTC) Inc.. The units of the Bosrich Unit Trust are the property of a discretionary trust, of which Mr. Lo Hong Sui, Vincent is a discretionary beneficiary and HSBC International Trustee Limited is the trustee. Accordingly, Mr. Lo Hong Sui, Vincent, Mrs. Lo, HSBC International Trustee Limited and Bosrich Holdings (PTC) Inc. are deemed to be interested in such SOCAM Shares under the SFO.

(b) Short position in the SOCAM Shares

					Approximate
					percentage of
		Number of	SOCAM Shares		shareholding
Name of	Personal	Family	Other		in the
SOCAM Director	interests	interests	interests	Total	Company
Mr. Lo Hong Sui, Vincent	—	—	1,600,000	1,600,000	0.50%
			(Note)

Note: These SOCAM Shares represent the call option granted by SOCL on 27 August 2002 to Mr. Wong Yuet Leung, Frankie as part of the incentive reward to his services to the Company. Mr. Lo Hong Sui, Vincent, Mrs. Lo, HSBC International Trustee Limited and Bosrich Holdings (PTC) Inc. are deemed to have short position in these SOCAM Shares under the SFO.

(c) Share options of the Company

At the Last Practicable Date, the following SOCAM Directors had interests in the share options granted by the Company under the share option scheme adopted by the Company on 27 August 2002:

		Subscription	Period during	Number of
		price per	which options	SOCAM Shares
Name of	Date of	SOCAM	outstanding are	subject to
SOCAM Directors	grant	Share	exercisable	the options
		HK$
Mr. Choi Yuk Keung,	3-1-2007	16.78	3-1-2010 to	700,000
Lawrence			2-1-2017
	14-6-2007	20.96	14-12-2007 to	250,000
			13-6-2012
	7-5-2008	19.76	7-11-2008 to	250,000
			6-5-2013
	7-5-2008	19.76	7-5-2011 to	1,000,000
			6-5-2018
	9-4-2009	7.63	9-10-2009 to	250,000
			8-4-2014
	9-4-2009	7.63	9-4-2012 to	1,000,000
			8-4-2019

— 322 —

APPENDIX VII

GENERAL INFORMATION

		Subscription	Period during	Number of
		price per	which options	SOCAM Shares
Name of	Date of	SOCAM	outstanding are	subject to
SOCAM Directors	grant	Share	exercisable	the options
		HK$
Mr. Wong Yuet Leung,	1-8-2006	14.00	1-2-2007 to	2,000,000
Frankie			31-7-2011
	3-1-2007	16.78	3-1-2010 to	1,500,000
			2-1-2017
	14-6-2007	20.96	14-12-2007 to	500,000
			13-6-2012
	7-5-2008	19.76	7-11-2008 to	500,000
			6-5-2013
	7-5-2008	19.76	7-5-2011 to	2,000,000
			6-5-2018
	9-4-2009	7.63	9-10-2009 to	750,000
			8-4-2014	(Note 2)
	9-4-2009	7.63	9-4-2012 to	2,000,000
			8-4-2019	(Note 2)
Ms. Lau Jeny	7-5-2008	19.76	7-5-2011 to	1,000,000
			6-5-2018
	9-4-2009	7.63	9-10-2009 to	500,000
			8-4-2014
	9-4-2009	7.63	9-4-2012 to	1,250,000
			8-4-2019
Mrs. Lowe Hoh Wai	1-8-2006	14.00	1-2-2007 to	120,000
Wan, Vivien			31-7-2011
	3-1-2007	16.78	3-1-2010 to	625,000
			2-1-2017
	14-6-2007	20.96	14-12-2007 to	176,000
			13-6-2012
	7-5-2008	19.76	7-11-2008 to	200,000
			6-5-2013
	7-5-2008	19.76	7-5-2011 to	750,000
			6-5-2018
	9-4-2009	7.63	9-10-2009 to	250,000
			8-4-2014
	9-4-2009	7.63	9-4-2012 to	750,000
			8-4-2019

Notes:

(1) The vesting of the share options granted to the SOCAM Directors is subject to the vesting schedules and/or performance conditions as set out in their respective offer letters.

(2) These share options were granted to Mr. Wong Yuet Leung, Frankie subject to the approval of the SOCAM Shareholders at the forthcoming annual general meeting of the Company to be held on 3 June 2009.

— 323 —

GENERAL INFORMATION

APPENDIX VII

(d) Call option over the SOCAM Shares

At the Last Practicable Date, the following SOCAM Director had a call option granted by SOCL over the SOCAM Shares pursuant to the arrangement mentioned in the note to item (b) above:

			Number of
			SOCAM
			Shares subject
			to the call
Name of SOCAM Director	Exercise price	Exercise period	option
	HK$
Mr. Wong Yuet Leung, Frankie	6.00	27-8-2005 to	1,600,000
		26-8-2010

(e) Long position in the shares of Shui On Land Limited (“SOL”)

					Approximate
		Number of ordinary shares of		SOL	percentage of
Name of	Personal	Family	Other		shareholding
SOCAM Directors	interests	interests	interests	Total	in SOL
Mr. Lo Hong Sui, Vincent	—	1,150,000	2,281,250,225	2,282,400,225	54.52%
			(Note)
Mr. Anthony	15,000	—	—	15,000	0.0003%
Griffiths

Note: These shares are directly held by subsidiaries of SOCL, namely, Shui On Investment Company Limited, Shui On Properties Limited and New Rainbow Investments Limited (“New Rainbow”, a wholly-owned subsidiary of the Company). SOCL is owned by the Bosrich Unit Trust. The units of the Bosrich Unit Trust are the property of a discretionary trust, of which Mr. Lo Hong Sui, Vincent is a discretionary beneficiary. Accordingly, Mr. Lo Hong Sui, Vincent is deemed to be interested in such shares under the SFO.

— 324 —

GENERAL INFORMATION

APPENDIX VII

(f) Long position in the CCP Shares

					Approximate
		Number of CCP Shares			percentage of
	Personal	Family	Other		shareholding
Name of SOCAM Director	interests	interests	interests	Total	in CCP
Mr. Anthony Griffiths	6,000	—	—	6,000	0.002%

Save as disclosed above, at the Last Practicable Date, none of the SOCAM Directors or chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the HK Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have been taken under such provisions of the SFO) or the Model Code for Securities Transactions by Directors of Listed Issuers or which were required to be entered in the register required to be kept under section 352 of the SFO.

At the Last Practicable Date, there is no contract or arrangement subsisting in which any of the SOCAM Directors is materially interested and which is significant in relation to the business of the Enlarged Group.

At the Last Practicable Date, none of the SOCAM Directors has had any direct or indirect interest in any assets which have since 31 December 2008 (being the date to which the latest published audited consolidated financial statements of the Company were made up) been 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.

— 325 —

GENERAL INFORMATION

APPENDIX VII

(B) Interests of SOCAM Shareholders discloseable pursuant to the SFO

Save as disclosed below and under the section “Interests of SOCAM Directors and chief executive” above, the SOCAM Directors are not aware of any other person (other than a director or chief executive of the Company or his/her respective associate(s)) who, at the Last Practicable Date, had an interest or short position in the SOCAM Shares or underlying SOCAM Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Long position in the SOCAM Shares

			Number of
			SOCAM	Approximate
			Shares/	percentage of
			underlying	shareholding
Name of SOCAM	Class of		SOCAM	in the
Shareholders	shares	Capacity	Shares held	Company
Mr. John Zwaanstra	Ordinary	Interest of controlled	57,372,248	17.82%
		corporation	(Note 1)
Penta	Ordinary	Investment manager	57,372,248	17.82%
			(Note 1)
Mercurius GP LLC	Ordinary	Founder of	26,613,951	8.27%
		discretionary trust	(Note 2)
Mr. Todd Zwaanstra	Ordinary	Trustee	26,613,951	8.27%
			(Note 2)
Penta Asia Fund, Ltd.	Ordinary	Interest of controlled	26,613,951	8.27%
		corporation	(Note 2)
UBS AG	Ordinary	Beneficial owner/	39,041,734	12.13%
		Holder of security
		interest in shares/
		Interest of controlled
		corporation

Notes:

(1) Among the interests owned by these shareholders, 36,569,617 SOCAM Shares are cash settled derivative interests.
(2) Among the interests owned by these shareholders, 16,000,000 SOCAM Shares are cash settled derivative interests.

— 326 —

GENERAL INFORMATION

APPENDIX VII

At the Last Practicable Date, save as disclosed below, none of the SOCAM Directors was a director or employee of a company which had an interest or short position in the SOCAM Shares and underlying SOCAM Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of company which had such discloseable interest Position within such Name of SOCAM Directors or short position company Mr. Lo Hong Sui, Vincent SOCL Director Mr. Choi Yuk Keung, Lawrence SOCL Director Mr. Wong Yuet Leung, Frankie SOCL Director

3. SERVICE CONTRACTS

At the Last Practicable Date, none of the SOCAM Directors had entered into any service contract with the Company other than contracts expiring or determinable by the SOCAM Group within one year without payment of compensation (other than statutory compensation).

4. LITIGATION

At the Last Practicable Date, the Enlarged Group was not engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the SOCAM Directors to be pending or threatened by or against the Enlarged Group.

5. COMPETING BUSINESS INTERESTS OF SOCAM DIRECTORS

At the Last Practicable Date, Mr. Lo Hong Sui, Vincent was the chairman and the controlling shareholder of SOL which is engaged in property development in the PRC.

Save as referred to herein, at the Last Practicable Date, none of the SOCAM Directors or their respective associates had any interest in a business which competes or may compete with the business of the SOCAM Group.

6. EXPERTS AND CONSENTS

The followings are the qualifications of the experts who have given opinion and advice, which is contained in this circular:

Name Qualification Deloitte Certified Public Accountants Savills Property Valuer

— 327 —

GENERAL INFORMATION

APPENDIX VII

Each of Deloitte and Savills has given and have not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

7. EXPERTS’ INTEREST IN ASSETS

At the Last Practicable Date, each of Deloitte and Savills has confirmed that:

(a) it does not have any shareholding, directly or indirectly, in any member of the SOCAM Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the SOCAM Group; and
(b) it does not have any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any member of the Enlarged Group, or which are proposed to be acquired or disposed of by or leased to any member of the Enlarged Group since 31 December 2008, the date to which the latest published audited consolidated financial statements of the Company were made up.

8. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Enlarged Group within the two years immediately preceding the issue of this circular and are material:

(A) SOCAM Group’s material contracts

(a) Asset injection agreement in relation to Mountain Mist (Barbados) SRL

On 12 April 2007, Keygrow Investments Limited ( “Keygrow” , a wholly-owned subsidiary of SOCAM) entered into an asset injection agreement with, inter alia, CCP (BVI) (a wholly-owned subsidiary of CCP), Rich Resources Investment Limited ( “Rich Resources” ), Silver Summit (Delaware) Corporation ( “Silver Summit” ), CCP and SOCAM, which was supplemented by a supplemental letter dated 14 May 2007, whereby CCP (BVI) agreed to acquire the entire issued quota capital of Mountain Mist (Barbados) SRL ( “Mountain Mist” ) from Keygrow, Rich Resources and Silver Summit and in addition Keygrow, Rich Resources and Silver Summit agreed to assign to CCP (BVI) the benefit of their respective quotaholders’ loans in the respective sums of RMB9,300,000, RMB6,200,000 and RMB3,900,000 owed to them by Mountain Mist. The consideration for such acquisition and assignment was satisfied by the issue of 16,264,000 ordinary shares, 10,842,000 ordinary shares and 6,776,000 ordinary shares in CCP, in each case credited as fully paid, to each of Keygrow, Rich Resources and Silver Summit, respectively or to such person(s) which they directed.

— 328 —

GENERAL INFORMATION

APPENDIX VII

(b) Asset injection agreement in relation to Prosper Idea Limited

On 12 April 2007, Fortune Up Investments Limited ( “Fortune Up” , a wholly-owned subsidiary of SOCAM) entered into an asset injection agreement with CCP (BVI), Spinnaker Global Opportunity Fund Ltd. ( “SGOF” ), Spinnaker Global Emerging Markets Fund Ltd. ( “SGEMF” ), Spinnaker Global Strategic Fund Ltd. ( “SGSF” ), CCP and SOCAM, which was supplemented by a supplemental letter dated 14 May 2007, whereby CCP (BVI) agreed to acquire the entire issued share capital of Prosper Idea Limited ( “Prosper” ) from Fortune Up, SGOF, SGEMF and SGSF and in addition Fortune Up, SGOF, SGEMF and SGSF agreed to assign to CCP (BVI) the benefit of their respective shareholders’ loans in the sums of RMB125,000,000 (in the case of Fortune Up) and RMB125,000,000 (in the case of SGOF, SGEMF and SGSF together) owed to them by Prosper. The consideration for such acquisition and assignment was satisfied by the issue of 10,448,000 ordinary shares, 2,089,000 ordinary shares, 5,016,000 ordinary shares and 3,343,000 ordinary shares in CCP, in each case credited as fully paid, to each of Fortune Up, SGOF, SGEMF and SGSF, respectively or to such person(s) which they directed.

(c) Asset injection agreement in relation to Mountain Breeze (Barbados) SRL

On 12 April 2007, Jumbo China Investments Limited ( “Jumbo China” , a wholly-owned subsidiary of SOCAM) entered into an asset injection agreement with, inter alia, CCP (BVI), Silver Summit, CCP and SOCAM, which was supplemented by a supplemental letter dated 14 May 2007, whereby CCP (BVI) agreed to acquire the entire issued quota capital of Mountain Breeze (Barbados) SRL ( “Mountain Breeze” ) from Jumbo China and Silver Summit and in addition Jumbo China and Silver Summit agreed to assign to CCP (BVI) the benefit of their respective quotaholders’ loans in the respective sums of RMB183,800,000 and RMB183,800,000 owed to them by Mountain Breeze. The consideration for such acquisition and assignment was satisfied by the issue of 19,821,000 ordinary shares and 19,821,000 ordinary shares in CCP, in each case credited as fully paid, to each of Jumbo China and Silver Summit, respectively or to such person(s) which they directed.

(d) Asset injection agreement in relation to Coral Waters (Barbados) SRL

On 12 April 2007, Shine Honest Investments Limited ( “Shine Honest” , a wholly-owned subsidiary of SOCAM) entered into an asset injection agreement with, inter alia, CCP (BVI), SGEMF, Rich Resources, Value Partners China Greenchip Fund Limited ( “Value Partners” ), Freemont Alliance Limited ( “Freemont” ), CCP and SOCAM, which was supplemented by a supplemental letter dated 14 May 2007, whereby CCP (BVI) agreed to acquire the entire issued quota capital of Coral Waters (Barbados) SRL from Shine Honest, SGEMF, Rich Resources, Value Partners and Freemont. The consideration for such acquisition was satisfied by the issue of 4,686,000 ordinary shares, 1,171,000 ordinary shares, 1,406,000 ordinary shares, 1,171,000 ordinary shares and 937,000 ordinary shares in CCP, in each case credited as fully paid, to each of Shine Honest, SGEMF, Rich Resources, Value Partners and Freemont, respectively or to such person(s) which they directed.

— 329 —

GENERAL INFORMATION

APPENDIX VII

(e) Asset injection agreement in relation to Caperidge Group Limited

On 12 April 2007, Elite Great Investments Limited ( “Elite” , a wholly-owned subsidiary of SOCAM) entered into an asset injection agreement with, inter alia, CCP (BVI), SGOF, SGEMF, SGSF, Sunwin Pacific Limited ( “Sunwin” ), Rich Alliance International Limited ( “Rich Alliance” ), CCP and SOCAM, which was supplemented by a supplemental letter dated 14 May 2007, whereby CCP (BVI) agreed to acquire the entire issued share capital of Caperidge Group Limited ( “Caperidge” ) from Elite, SGOF, SGEMF, SGSF, Sunwin and Rich Alliance and in addition Elite, SGOF, SGEMF, SGSF, Sunwin and Rich Alliance agreed to assign to CCP (BVI) the benefit of their respective shareholders’ loans in the sums of RMB55,000,000 (in the case of Elite), RMB22,000,000 (in the case of SGOF, SGEMF and SGSF together), RMB14,600,000 (in the case of Sunwin) and RMB55,000,000 (in the case of Rich Alliance), owed to them by Caperidge. The consideration for such acquisition and assignment was satisfied by the issue of 5,705,000 ordinary shares, 502,000 ordinary shares, 1,050,000 ordinary shares, 730,000 ordinary shares, 1,521,000 ordinary shares and 5,705,000 ordinary shares in CCP, in each case credited as fully paid, to each of Elite, SGOF, SGEMF, SGSF, Sunwin and Rich Alliance, respectively or to such person(s) which they directed.

(f) Subscription agreement for CCP Shares

Pursuant to the terms of the subscription agreement dated 12 April 2007, supplemented by supplemental letters dated 14 May 2007 and 23 May 2007, each of SGOF, SGEMF, SGSF and BIL agreed to subscribe in cash at the applicable placing price on admission of CCP Shares to trading on AIM for a number of CCP Shares equal to the lesser of: (i) the maximum number of shares in CCP that may be subscribed with HK$393 million (in the case of SGOF, SGEMF and SGSF together) and HK$975 million (in the case of BIL) at the applicable placing price; and (ii) such number of shares in CCP which would increase their respective shareholding in CCP up to certain levels (subject to certain adjustments) as stipulated therein.

(g) Convertible bond subscription agreement

Pursuant to a convertible bond subscription agreement dated 14 May 2007 and an amended and restated subscription agreement dated 23 May 2007 entered into between CCP, SOCAM, BIL and Deutsche Bank AG, Hong Kong branch, BIL agreed to subscribe for the Convertible Bonds in the principal amount of US$25 million. The terms and conditions of this agreement contain representations and warranties which are typical in agreements of this nature.

(h) Joint venture agreement in respect of Dalian Tiandi ‧ Software Hub

Main Zone Group Limited (a wholly-owned subsidiary of SOCAM) entered into a shareholders agreement dated 25 May 2007, which was supplemented by the first supplemental agreement dated 29 August 2007, with Innovate Zone Group Limited, Many

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GENERAL INFORMATION

Gain International Limited and Richcoast Group Limited pursuant to which Innovate Zone Group Limited, Main Zone Group Limited and Many Gain International Limited agreed to subscribe for 61.54%, 28.20% and 10.26% equity interests in and to provide shareholders’ loans of HK$1,107.69 million, HK$507.69 million and HK$184.62 million respectively in relation to the establishment of Richcoast Group Limited as a joint venture company for the purpose of the development and operation of the Dalian Software Park Phase II (now known as Dalian Tiandi‧Software Hub) (the “Dalian Project” ) in Dalian, the PRC.

(i) Placing agreement

Pursuant to a placing agreement dated 8 June 2007 between SOCAM, CCP, the directors of CCP at the time of the admission of CCP Shares to trading on AIM, SAM, BIL and Deutsche Bank AG, London branch (the “Placing Agreement” ):

(i) CCP appointed Deutsche Bank AG, London branch as global coordinator and sole bookrunner to the placing of CCP Shares on or around the admission of CCP Shares to trading on AIM (the “Placing” );
(ii) CCP agreed, subject to certain conditions, to issue certain new shares at the placing price of £1.00 per CCP Share;
(iii) Deutsche Bank AG, London branch agreed, subject to certain conditions that are typical for an agreement of this nature, including the admission of the CCP Shares to trading on AIM and the continued accuracy of the representations and warranties given in the Placing Agreement, to use best endeavours to procure placees for or, failing which, Deutsche Bank AG, London branch would itself subscribe for CCP Shares to be allotted and issued pursuant to the Placing, at the placing price of £1.00 per CCP Share;
(iv) CCP agreed to pay to Deutsche Bank AG, London branch a commission of 2.5% (and at the sole discretion of CCP an additional fee of up to 0.5%) of the amount equal to the placing price of £1.00 per CCP Share multiplied by the number of CCP Shares and additional CCP Shares to be made available which Deutsche Bank AG, London branch agreed to procure placees for or, failing which, Deutsche Bank AG, London branch itself agreed to subscribe for, pursuant to the terms of the Placing Agreement;
(v) CCP, BIL, SOCAM and SAM gave certain representations, warranties, undertakings and indemnities to Deutsche Bank AG, London branch. CCP shall, when required by SOCAM in writing to do so, indemnify SOCAM in respect of all losses, liabilities, damages, costs, charges or expenses, claims, demands, or actions in respect thereof, as incurred by SOCAM in respect of or relating to any warranty claim or indemnity provision of the Placing Agreement. Subject to certain limitations, the directors of CCP at the time of the admission of CCP Shares to trading on AIM each gave certain representations, warranties, undertakings and indemnities to Deutsche Bank AG, London branch; and

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(vi) in connection with the Placing, CCP granted to Deutsche Bank AG, London branch an over-allotment option which was exercised by Deutsche Bank AG, London branch.

(j) Sale and purchase agreement for shares in SOL

New Rainbow, a wholly-owned subsidiary of SOCAM, entered into a sale and purchase agreement on 16 July 2007 with Shui On Investment Company Limited ( “SOICL” , a wholly-owned subsidiary of SOCL which is in turn the controlling shareholder of SOCAM), whereby New Rainbow agreed to sell and SOICL agreed to purchase approximately HK$1.8 billion worth of shares of SOL upon and subject to the terms and conditions contained therein.

(k) Letter agreement in relation to Gracious Spring Limited

Pursuant to a letter agreement dated 4 February 2008 entered into between SOCAM and CCP (BVI), each of CCP (BVI) and Park Wealth Investments Limited ( “Park Wealth” , a wholly-owned subsidiary of SOCAM) agreed to subscribe for 50% interest in the enlarged issued share capital or capital contribution of each of Gracious Spring Limited ( “Gracious Spring” ) and Mountain Snow (Barbados) SRL and each provide a shareholder loan in the sum of RMB393.5 million to such joint venture companies for the acquisition and development of a piece of land in Chengdu, the PRC. A shareholders deed was subsequently entered into among CCP (BVI), SOCAM, Park Wealth and Gracious Spring on 2 January 2009 pursuant to the letter agreement referred to above.

(l) Shareholders deed in relation to Broad Wise Limited

Pursuant to a shareholders deed dated 19 February 2008 entered into between CCP (BVI), Poly Edge Enterprises Limited ( “PEE” , a wholly-owned subsidiary of SOCAM), SOCAM, HSBC Custody Services (Guernsey) Ltd. acting as subcustodian and agent for SGEMF, SGOF and SGSF ( “HSBC Custody” ) and Broad Wise Limited, as amended by a supplemental agreement dated 12 September 2008, CCP (BVI), PEE and HSBC Custody agreed to subscribe for 40%, 40% and 20% equity interests in, and provide shareholder loans of US$59.84 million, US$59.84 million and US$29.92 million respectively to, Broad Wise Limited for the development of a parcel of land in Shenyang, the PRC.

(m) Sale and purchase agreement for shares in SOL and supplemental agreement

New Rainbow entered into a sale and purchase agreement on 4 March 2008 with SOICL, as supplemented and amended by the supplemental agreement entered into between the same parties dated 14 March 2008, whereby New Rainbow agreed to sell and SOICL agreed to purchase approximately HK$1 billion worth of shares of SOL upon and subject to the terms and conditions contained therein.

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(n) Supplemental agreement

Main Zone Group Limited (a wholly-owned subsidiary of SOCAM) entered into the second supplemental agreement dated 28 April 2008 with Innovate Zone Group Limited, Many Gain International Limited and Richcoast Group Limited to supplement and amend the joint venture agreement referred to in paragraph 8(A)(h) of this Appendix VII whereby the parties agreed to provide further funding or financial assistance to Richcoast Group Limited and its subsidiaries in an aggregate amount up to the equivalent of RMB1,833 million for the development of the Dalian Project.

(o) Sale and purchase agreement for shares in Winway Holdings Limited and Smartway Investment Limited

Shui On Cement (Guizhou) Limited ( “SOG” , a wholly-owned subsidiary of SOCAM) entered into an agreement with LSOC on 5 May 2008 whereby SOG agreed to sell and LSOC agreed to purchase the entire issued share capital of Winway Holdings Limited and Smartway Investment Limited, which were investment holding companies that owned 90% and 75% of the equity interests in a cement plant and a ready mixed concrete plant in Guizhou respectively, at an aggregate cash consideration of RMB100 million and the related shareholders’ loans owed to SOCAM Group for a cash consideration equal to the carrying amounts of such loans at the date on which the balance of the consideration was paid, subject to and upon the terms and conditions contained therein.

(p) Sale and purchase agreement for shares in Wayly Holdings Limited

Shui On Building Materials Limited ( “SOBM” , a wholly-owned subsidiary of SOCAM) entered into an agreement with LSOC on 5 May 2008 whereby SOBM agreed to sell and LSOC agreed to purchase the entire issued share capital in Wayly Holdings Limited, which is an investment holding company that owns 100% equity interest in a new cement plant under construction in Guizhou, and the related shareholder loan at a cash consideration being the aggregate of all actual cash contributions made by the SOCAM Group and all costs, fees and expenses (including finance costs) directly incurred by the SOCAM Group for the construction of the new cement plant, amounting to approximately HK$157 million, subject to and upon the terms and conditions contained therein.

(q) City Code Undertaking

On 12 May 2009, SOCAM entered into the City Code Undertaking with CCP pursuant to which SOCAM undertook to CCP to comply with the City Code in relation to the Offer and CCP undertook to SOCAM to comply with the City Code in relation to the Offer, subject to a number of agreed derogations from the City Code. The principal agreed derogations are:

(i) the UK Unilateral Announcement and the Joint Announcement did not and the Offer Document does not include confirmation in respect of the portion of the Offer consideration to be paid from the cash proceeds to be received by SOCAM

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from BIL as a result of the Bond Cancellation of US$22.50 million, nor that portion of the Offer consideration which would otherwise have been attributable to those particular CCP Shareholders which have irrevocably undertaken to accept the Share Offer (and assuming that none of the Convertible Bondholders will exercise their right to convert such Convertible Bonds into CCP Shares) in accordance with Rules 2.5(c) and 24.7 of the City Code, by Deutsche Bank or by another appropriate third party that resources are available to SOCAM to satisfy full acceptance of the Offer but instead includes confirmation that, assuming receipt by SOCAM’s wholly-owned subsidiary, BIL (or its nominee), of the cash proceeds of US$22.50 million which BIL will become entitled to receive under the Bond Cancellation, taking into account those CCP Shareholders who have irrevocably undertaken to SOCAM that they will accept the Share Offer, assuming that none of the of the Convertible Bondholders will exercise their right to convert such Convertible Bonds into CCP Shares and assuming that there are no further CCP Shares issued after the Last Practicable Date, the necessary financial resources are available to SOCAM to satisfy £35,534,225 of cash consideration payable under the Offer when fully implemented; and

(ii) in respect of the fulfilment of Conditions 1.2 ( Completion of the Bond Cancellation ), 1.3 ( HK Stock Exchange listing approval ) and 1.13 ( SOCAM Shareholders’ approval ) set out in Appendix I of this circular SOCAM shall be free (subject to and in accordance with their terms) to rely on and invoke such conditions regardless of the provisions of Rule 13.4 of the City Code.

The City Code Undertaking will terminate in the event that either the CCP Independent Directors cease to recommend the Offer, recommend an offer by another party or withdraw or adversely modify their recommendation of the Offer, or following the closure or lapsing of the Offer.

(r) BIL irrevocable undertaking

On 12 May 2009, BIL gave an undertaking to CCP to vote in favour of the resolutions to be proposed at the Bondholder Meeting to approve the Bond Cancellation on terms that are similar to those irrevocable undertakings given to SOCAM by other Convertible Bondholders. Such irrevocable undertaking will remain binding in the event of a competing offer being made for CCP but will cease to have effect, amongst other things: (i) on the withdrawal or lapsing of the Offer; (ii) on the withdrawal or lapsing of the Bond Cancellation; (iii) if there is any change to the principal terms and conditions of the Bond Cancellation; or (iv) if the payment to be made to the Convertible Bondholders pursuant to the Bond Cancellation is not made on or before 30 June 2009.

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(B) CCP Group’s material contracts
(a) Asset injection agreement in relation to Mountain Mist (Barbados) SRL

Please refer to paragraph 8(A)(a) of this Appendix VII for a summary of this contract and the related supplemental letter.

(b) Asset injection agreement in relation to Prosper Idea Limited

Please refer to paragraph 8(A)(b) of this Appendix VII for a summary of this contract and the related supplemental letter.

Please refer to paragraph 8(A)(c) of this Appendix VII for a summary of this contract and the related supplemental letter.

(d) Asset injection agreement in relation to Coral Waters (Barbados) SRL

Please refer to paragraph 8(A)(d) of this Appendix VII for a summary of this contract and the related supplemental letter.

(e) Asset injection agreement in relation to Caperidge Group Limited

Please refer to paragraph 8(A)(e) of this Appendix VII for a summary of this contract and the related supplemental letter.

(f) Subscription agreement for CCP Shares

Please refer to paragraph 8(A)(f) of this Appendix VII for a summary of this contract and the related supplemental letters.

(g) Convertible bond subscription agreement with Deutsche Bank AG, London branch and Cathay Capital Company Limited

Pursuant to a convertible bond subscription agreement dated 14 May 2007 entered into between (i) CCP, (ii) Deutsche Bank AG, London branch and Cathay Capital Company Limited as the investors and (iii) Deutsche Bank AG, Hong Kong branch as the lead manager, the investors agreed to subscribe for the Convertible Bonds in aggregate principal amount of US$67.5 million. The terms and conditions of this agreement contain representations and warranties which are typical in agreements of this nature.

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(h) Convertible bond subscription agreement with OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P.

Pursuant to a convertible bond subscription agreement dated 14 May 2007 entered into between (i) CCP, (ii) OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P. as the investors and (iii) Deutsche Bank AG, Hong Kong branch as the lead manager, the investors agreed to subscribe for the Convertible Bonds in aggregate principal amount of US$37.50 million. The terms and conditions of this agreement contain representation and warranties which are typical in agreements of this nature.

(i) Convertible bond subscription agreement with CQS Asia Master Fund Limited

Pursuant to a convertible bond subscription agreement dated 14 May 2007 entered into between (i) CCP, (ii) CQS Asia Master Fund Limited as the investor and (iii) Deutsche Bank AG, Hong Kong branch as the lead manager, the investor agreed to subscribe for the Convertible Bonds in aggregate principal amount of US$15 million. The terms and conditions of this agreement contain representations and warranties which are typical in agreements of this nature.

(j) Convertible bond subscription agreement with Stark Master Fund Ltd., Stark Asia Master Fund Ltd. and Centar Investments (Asia) Ltd.

Pursuant to a convertible bond subscription agreement dated 14 May 2007 entered into between (i) CCP, (ii) Stark Master Fund Ltd., Stark Asia Master Fund Ltd. and Centar Investments (Asia) Ltd. as the investors and (iii) Deutsche Bank AG, Hong Kong branch as the lead manager, the investors agreed to subscribe for the Convertible Bonds in aggregate principal amount of US$20.00 million. The terms and conditions of this agreement contain representations and warranties which are typical in agreements of this nature.

(k) Convertible bond subscription agreement with BIL

Please refer to paragraph 8(A)(g) of this Appendix VII for a summary of this contract and the amended and restated subscription agreement.

(l) Convertible bond subscription agreement with Highbridge International LLC and Highbridge Asia Opportunity Master Fund LP

Pursuant to a convertible bond subscription agreement dated 23 May 2007 entered into between (i) CCP, (ii) Highbridge International LLC and Highbridge Asia Opportunity Master Fund LP as the investors and (iii) Deutsche Bank AG, Hong Kong branch as the lead manager, the investors agreed to subscribe for the Convertible Bonds in aggregate principal amount of US$25 million. The terms and conditions of this agreement contain representations and warranties which are typical in agreements of this nature.

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(m) Equity subscription agreement with OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P.

Pursuant to an equity subscription agreement dated 14 May 2007 entered into between (i) CCP, (ii) OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P. as the investors and (iii) Deutsche Bank AG, London branch, the investors agreed to subscribe in cash, CCP agreed to issue and Deutsche Bank AG, London branch agreed to cause to be placed to the investors such number of CCP Shares equal to the maximum number of shares that may be subscribed with £18.9 million at the applicable placing price under the placing of CCP Shares on the admission to trading of CCP Shares on AIM.

(n) Equity subscription agreement with UBS A&Q Asia Property Cycle Master Limited

Pursuant to an equity subscription agreement dated 14 May 2007 entered into between (i) CCP, (ii) UBS A&Q Asia Property Cycle Master Limited as the investor and (iii) Deutsche Bank AG, London branch, the investor agreed to subscribe in cash, CCP agreed to issue and Deutsche Bank AG, London branch agreed to cause to be placed to the investor such number of CCP Shares equal to the maximum number of shares that may be subscribed with £7.6 million at the applicable placing price under the placing of CCP Shares on the admission to trading of CCP Shares on AIM.

(o) Equity subscription agreement with Highbridge International LLC and Highbridge Asia Opportunity Master Fund LP

Pursuant to an equity subscription agreement dated 23 May 2007 entered into between (i) CCP, (ii) Highbridge International LLC and Highbridge Asia Opportunity Master Fund LP as the investors and (iii) Deutsche Bank AG, London branch, the investors agreed to subscribe in cash, CCP agreed to issue and Deutsche Bank AG, London branch agreed to cause to be placed to the investors such number of CCP Shares equal to the maximum number of shares that may be subscribed with £5.1 million at the applicable placing price under the placing of CCP Shares on the admission to trading of CCP Shares on AIM.

(p) Letters of undertaking given to the Cornerstone Investors and Penta Japan by CCP

CCP agreed, pursuant to letters of undertaking dated 14 May 2007 and 10 July 2007 with OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund L.P. (collectively the “OZ Group” ), and Spinnaker (OZ Group and Spinnaker together the “Cornerstone Investors” ) and Penta Japan Fund, Ltd. and Penta Japan Domestic Partners II, L.P. (collectively “ Penta Japan ”) to allow each of them certain rights, conditional upon OZ Group and Spinnaker each respectively subscribing for

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not less than 6.5% of the total issued share capital of CCP and upon Penta Japan acquiring 8.9% of the total issued share capital of CCP. Pursuant to the letters of undertaking:

(i) CCP granted the Cornerstone Investors and Penta Japan the right, for an initial period of not less than five years from the admission of the CCP Shares to trading on AIM, to nominate at least one person to the board of directors of CCP (BVI) who will also be entitled to sit on the investment committee of CCP (BVI);
(ii) CCP granted the Cornerstone Investors and Penta Japan the right of first refusal to participate in the acquisition and development of new partially-completed property development or investment projects identified by CCP or the CCP Group in the PRC if and when CCP wishes to invite co-investors and, where they elect not to participate, CCP may only invite other co-investors to participate on terms and prices no more favourable than those offered to the Cornerstone Investors and Penta Japan; and
(iii) the rights of a Cornerstone Investor and Penta Japan terminate on a change of control of such Cornerstone Investor or a change of investment manager in the case of Penta Japan, or if it disposes of its interests in CCP such that its interests is less than 3% of CCP’s issued share capital.
(q) Placing agreement

Please refer to paragraph 8(A)(i) of this Appendix VII for a summary of this contract.

(r) Trust Deed

CCP entered into the Trust Deed with the Convertible Bonds Trustee on 13 June 2007 under which the Convertible Bonds Trustee accepted its appointment as trustee in respect of the Convertible Bonds. The Trust Deed sets out the responsibilities of CCP in respect of the Convertible Bonds and the terms and conditions of the Convertible Bonds. Such responsibilities include, but are not limited to, covenants and notices relating to the conversion rights of the Convertible Bonds and the adjustments to the price of conversion of the Convertible Bonds. The Trust Deed also creates the trust relationship between the trustee and the holders of the Convertible Bonds and sets out the trustee’s powers and duties and includes provisions for the organisation of, and the requirements for, Convertible Bondholders’ meetings. The Trust Deed further includes provisions to (1) remunerate the trustee for its services and (2) indemnify the trustee from losses, liabilities, costs, claims, actions, demands or expenses properly incurred by it in the exercise, performance and discharge of its powers, duties, obligations and discretions under the Trust Deed. Any trustee may retire at any time on giving at least 30 days’ written notice to CCP without giving any reason and without being responsible for any costs occasioned by such retirement.

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(s) Paying and conversion agency agreement

CCP entered into the paying and conversion agency agreement (the “Paying and Conversion Agency Agreement” ) with the Convertible Bonds Trustee as principal agent, as registrar and as trustee, on 13 June 2007 under which the Convertible Bonds Trustee, accepted the roles as the principal agent, registrar and conversion agent, respectively, in respect of the Convertible Bonds. The Paying and Conversion Agency Agreement sets out, inter alia, the principal agent’s obligations and duties to effect payment of principal and interest on behalf of CCP and to accept requests for any conversion. The Paying and Conversion Agency Agreement also sets out arrangements for early redemption of the Convertible Bonds, any issue of replacement of certificates and duties and responsibilities of the registrar. The Paying and Conversion Agency Agreement further includes provisions to (i) remunerate each of the agents in the Paying and Conversion Agency Agreement for its services and (ii) indemnify each of the agents in the Paying and Conversion Agency Agreement against any losses, liabilities, costs, claims, actions, demands or expenses which it may incur or which may be made against it as a result of or in connection with its appointment or exercise or non-exercise by it of its powers, discretions and duties. Subject to certain conditions in the Paying and Conversion Agency Agreement, any agent of the Paying and Conversion Agency Agreement may resign its appointment at any time by giving the trustee, principal agent and CCP at least 30 days’ written notice.

(t) Nominated adviser and broker agreement with Deutsche Bank

CCP and Deutsche Bank AG, London branch entered into a nominated adviser and broker agreement dated 8 June 2007 under which Deutsche Bank AG, London branch has accepted its appointments as the CCP’s nominated adviser and broker for the purposes of the AIM Rules. In its capacity as nominated adviser, Deutsche Bank AG, London branch agreed to provide, inter alia, advice and guidance to the CCP Directors as to their responsibilities and obligations to ensure compliance by CCP with the AIM Rules. CCP paid Deutsche Bank AG, London branch an aggregate yearly fee of £75,000 plus value added tax charged in the UK in addition to the costs and expenses incurred by Deutsche Bank AG, London branch in carrying out its obligations under the nominated adviser and broker agreement. The agreement contained certain undertakings, confirmations and indemnities given by CCP to Deutsche Bank AG, London branch and was terminated on 18 December 2008.

(u) Letter agreement in relation to Gracious Spring Limited

Please refer to paragraph 8(A)(k) of this Appendix VII for a summary of this contract.

(v) Shareholders deed in relation to Broad Wise Limited

Please refer to paragraph 8(A)(l) of this Appendix VII for a summary of this contract.

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(w) Deed of undertaking and indemnification in relation to Beijing ZhongTian HongYe Real Estate Consultancy Co., Ltd.

On 20 February 2008, CCP (BVI) and CCP entered into a deed of undertaking and indemnification to indemnify SOCAM against all losses and liabilities that SOCAM may incur as a result of its continuing obligations under a guarantee dated 2 April 2007 in favour of The Bank of East Asia, Limited, Beijing Branch in respect of a loan facility of RMB730 million in favour of Beijing ZhongTian HongYe Real Estate Consultancy Co., Ltd..

(x) Nominated adviser and broker agreement with Seymour Pierce

CCP and Seymour Pierce Limited ( “Seymour Pierce” ) entered into a nominated adviser and broker agreement dated 18 December 2008 under which Seymour Pierce has accepted its appointments as the CCP’s nominated adviser and broker for the purposes of the AIM Rules. In its capacity as nominated adviser, Seymour Pierce has agreed to provide, inter alia, advice and guidance to the CCP Directors as to their responsibilities and obligations to ensure compliance by CCP with the AIM Rules. CCP will pay Seymour Pierce an aggregate yearly fee of £50,000 plus value added tax charged in the UK in addition to the costs and expenses incurred by Seymour Pierce in carrying out its obligations under the nominated adviser and broker agreement. The agreement contains certain undertakings, confirmations and indemnities given by CCP to Seymour Pierce and is for a minimum of 12 months and then terminable by either party on three months’ notice.

(y) City Code Undertaking

Please refer to paragraph 8(A)(q) of this Appendix VII for a summary of this contract.

9. MATERIAL ADVERSE CHANGE

The SOCAM Directors are not aware of any material adverse change in the financial or trading position of the SOCAM Group since 31 December 2008, the date to which the latest published audited consolidated financial statements of the Company have been made up.

10. GENERAL

(a) The secretary of the Company is Ms. Tsang Yuet Kwai, an Associate of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.
(b) The principal share registrar and the transfer office of the Company is The Bank of Bermuda Limited, 6 Front Street, Hamilton HM 11, Bermuda.
(c) The Hong Kong branch share registrar and transfer office of the Company is Tricor Standard Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

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(d) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The head office and principal place of business of the Company in Hong Kong is at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong.
(e) The English text of this circular shall prevail over the Chinese text.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during business hours at the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong from the date of this circular up to and including 3 June 2009:

(a) the memorandum of association and bye-laws of the Company;
(b) the annual reports of the SOCAM Group for each of the two financial years ended 31 December 2008;
(c) the accountants’ report on CCP, the text of which is set out in Appendix III to this circular;
(d) the report from Deloitte on the unaudited pro forma financial information of the Enlarged Group, the text of which is set out in Appendix V to this circular;
(e) the letter and valuation certificate prepared by Savills, the text of which is set out in Appendix VI to this circular;
(f) the material contracts referred to in the paragraph headed “Material Contracts” of this appendix;
(g) the written consents of Deloitte and Savills referred to in paragraph headed “Experts and Consents” of this appendix;
(h) the connected and discloseable transaction circular dated 13 May 2008 in relation to further funding or financial assistance to a joint venture for the development of Dalian Tiandi • Software Hub;
(i) the discloseable transaction circular dated 26 May 2008 in relation to the disposal of cement and concrete plants in Guizhou;
(j) the discloseable transaction circular dated 18 July 2008 in relation to further cash injections into LSOC in relation to PRC cement operations; and
(k) the continuing connected transactions circular dated 5 January 2009 in relation to a supplemental agreement to a framework agreement.

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NOTICE OF SPECIAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Shui On Construction and Materials Limited (the “Company”) will be held at Room 103, 1st Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong on Wednesday, 3 June 2009 at 3:15 p.m. (or so soon thereafter as the annual general meeting of the Company convened at the same place and date at 3:00 p.m. shall have concluded or adjourned) for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

(1) “ THAT

(a) the acquisition of the shares in China Central Properties Limited by the Company pursuant to the Offer (as defined in the circular to shareholders of the Company dated 15 May 2009 and a copy of which has been produced to this meeting marked “A” and signed by the chairman of the meeting for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved and confirmed;
(b) conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and the permission to deal in, the new shares in the Company to be issued pursuant to the Offer, the allotment and issue of such shares be and are hereby approved; and the directors of the Company be and are hereby authorised to allot and issue such number of new shares in the Company as required to be issued pursuant to the Offer and to take all steps necessary, desirable or expedient in their opinion to implement and/or give effect to the allotment and issue of such shares; and

* for identification purpose only

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NOTICE OF SPECIAL GENERAL MEETING

(c) the directors of the Company be and are hereby authorised to do all such further acts and things and execute such further documents and take all steps which in their opinion may be necessary, desirable or expedient to implement and/or give effect to the acquisition of the shares in China Central Properties Limited by the Company pursuant to the Offer and all other transactions contemplated thereunder with any changes as they may consider necessary, desirable or expedient.”

By Order of the Board Tsang Yuet Kwai Company Secretary

Hong Kong, 15 May 2009.

Notes:

(1) Any member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and, on a poll, vote in his stead. A proxy need not be a member of the Company.
(2) To be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a certified copy thereof, must be lodged with the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong not less than 48 hours before the time fixed for holding the meeting.

At the date of this notice, the executive directors of the Company are Mr. Lo Hong Sui, Vincent, Mr. Choi Yuk Keung, Lawrence, Mr. Wong Yuet Leung, Frankie, Ms. Lau Jeny and Mrs. Lowe Hoh Wai Wan, Vivien; the non-executive director of the Company is Professor Michael Enright; and the independent non-executive directors of the Company are Mr. Anthony Griffiths, Mr. Gerrit de Nys and Ms. Li Hoi Lun, Helen.

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Long Investment Corp — Proxy Solicitation & Information Statement 2009

50512_rns_2009-05-14_c1c9ed1a-3b01-4d86-97d8-9d9f671a592e.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

(Stock Code: 983)

MAJOR TRANSACTION

Financial Adviser to Shui On Construction and Materials Limited

CONTENTS

DEFINITIONS

CCP

DEFINITIONS

CCP (BVI)

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

(Stock Code: 983)

MAJOR TRANSACTION

RECOMMENDED OFFER BY SHUI ON CONSTRUCTION AND MATERIALS LIMITED TO ACQUIRE ALL OF THE ISSUED SHARES OF CHINA CENTRAL PROPERTIES LIMITED NOT ALREADY OWNED BY SHUI ON CONSTRUCTION AND MATERIALS LIMITED AND ITS SUBSIDIARIES

INTRODUCTION

LETTER FROM THE SOCAM BOARD

1. Summary of the Offer

or

0.575 New SOCAM Shares and 32.50 pence in cash under the Mixed Offer

LETTER FROM THE SOCAM BOARD

LETTER FROM THE SOCAM BOARD

2. Recommendation of the Offer

3. Conditions of the Offer

3.1 Acceptances

3.2 Completion of the Bond Cancellation

3.3 Hong Kong listing approval

3.4 Competition issues

3.5 SOCAM Shareholders’ approval

IRREVOCABLE UNDERTAKINGS AND SOCAM’S EXISTING SHARE OWNERSHIP

CCP Shareholders:

LETTER FROM THE SOCAM BOARD

Convertible Bondholders:

LETTER FROM THE SOCAM BOARD

THE BOND CANCELLATION

LETTER FROM THE SOCAM BOARD

COMPULSORY ACQUISITION, DELISTING AND CANCELLATION OF TRADING

OTHERS

BACKGROUND TO AND REASONS FOR THE OFFER

LETTER FROM THE SOCAM BOARD

INFORMATION ON SOCAM

Background information on SOCAM and its relationship with CCP

LETTER FROM THE SOCAM BOARD

LETTER FROM THE SOCAM BOARD

Financial information on SOCAM Group

INFORMATION ON CCP

LETTER FROM THE SOCAM BOARD

FINANCING OF THE OFFER

LETTER FROM THE SOCAM BOARD

MANAGEMENT

APPLICABILITY OF THE CITY CODE

LETTER FROM THE SOCAM BOARD

DISCLOSURE OF INTERESTS IN CCP

LETTER FROM THE SOCAM BOARD

SETTLEMENT, LISTING AND DEALING OF NEW SOCAM SHARES

FINANCIAL IMPACT ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE COMPANY

Earnings

Assets and liabilities

LETTER FROM THE SOCAM BOARD

Gearing position

Dividend policy

LETTER FROM THE SOCAM BOARD

FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

LETTER FROM THE SOCAM BOARD

HK LISTING RULES IMPLICATIONS

Major transaction and exempt connected transactions

LETTER FROM THE SOCAM BOARD

THE SOCAM MEETING

RECOMMENDATION

ADDITIONAL INFORMATION

1. CONDITIONS OF THE OFFER

1.1 Acceptances

1.2 Completion of the Bond Cancellation

1.3 HK Stock Exchange listing approval

Long Investment Corp Proxy Solicitation & Information Statement 2009