Macau E&M Holding Limited — Proxy Solicitation & Information Statement 2013

Apr 25, 2013

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in SHENZHEN INVESTMENT LIMITED , you should at once hand this circular with the accompanying form of proxy to the purchaser or to the transferee or to the bank, stockbroker or other agent through whom the sale was effected, for transmission to the purchaser or the transferee.

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

==> picture [335 x 48] intentionally omitted <==

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00604)

PROPOSALS INVOLVING RE-ELECTION OF RETIRING DIRECTORS AND GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

A notice convening the annual general meeting of Shenzhen Investment Limited to be held at Garden Room, 2nd Floor, Hotel Nikko Hong Kong, 72 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Thursday, 13 June 2013 at 10:30 a.m. is set out on the 2012 Annual Report of the Company to be dispatched to shareholders together with this circular. Whether or not you propose to attend the meeting, you are requested to complete the accompanying form of proxy enclosed with the 2012 Annual Report of the Company in accordance with the instructions printed thereon and return the same to the registered office of the Company at 8th Floor, New East Ocean Centre, 9 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the meeting or any adjourned meeting should you so desire.

26 April 2013

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Chairman
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
General Mandate to Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Voting by way of poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix I – Details of Directors proposed for re-election. . . . . . . . . . . . . . . . . . . .	9
Appendix II – Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

– i –

DEFINITIONS

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

• “Annual General Meeting”

• the annual general meeting of the Company to be held at Garden Room, 2nd Floor, Hotel Nikko Hong Kong, 72 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Thursday, 13 June 2013 at 10:30 a.m. or, where the context so admits, any adjournment thereof

• “Articles of Association”

• the articles of association of the Company, as originally adopted, or as from time to time altered in accordance with the Companies Ordinance

• “Board”

the board of directors of the Company

• “Companies Ordinance”

• the Companies Ordinance, Chapter 32 of the Laws of Hong Kong

• “Company”

• Shenzhen Investment Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange

• “Directors”

the directors of the Company

• “Issue Mandate”

• a general mandate to the Directors to issue Shares representing up to 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of the resolution

• “Last Annual General Meeting”

• the annual general meeting of the Company held on 22 June 2012

• “Latest Practicable Date”

• 19 April 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

– 1 –

DEFINITIONS

“Notice of Annual General the notice dated 26 April 2013 convening the Annual Meeting” General Meeting as set out in the 2012 Annual Report of the Company “Repurchase Mandate” a general mandate to the Directors to exercise the powers of the Company to repurchase on the Stock Exchange Shares representing up to a maximum of 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of the resolution

“Shareholder(s)” holder(s) of Shares “Shares” shares of HK$0.05 each in the share capital of the Company (or of such other nominal amount as shall result from a subdivision, consolidation, reclassification or reconstruction of the share capital of the Company from time to time) “Shum Yip Holdings” Shum Yip Holdings Company Limited, a substantial shareholder of the Company “深業集團” 深業集團有限公司, the holding company of Shum Yip Holdings “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” the Hong Kong Codes on Takeovers and Mergers and Share Repurchases “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

– 2 –

LETTER FROM THE CHAIRMAN

==> picture [335 x 48] intentionally omitted <==

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00604)

Executive Directors: LU Hua (Chairman) MOU Yong WANG Minyuan LIU Chong

Non-Executive Directors: Dr. WU Jiesi HUANG Yige

Registered Office: 8th Floor, New East Ocean Centre, 9 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong.

Independent Non-Executive Directors: WONG Po Yan LI Wai Keung WU Wai Chung, Michael

26 April 2013

To the Shareholders

Dear Sir or Madam,

PROPOSALS INVOLVING RE-ELECTION OF RETIRING DIRECTORS AND GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

INTRODUCTION

The purpose of this circular is to provide you with information regarding the re-election of retiring Directors, the proposed Repurchase Mandate and Issue Mandate and the extension of the Issue Mandate and to seek your approval at the Annual General Meeting in connection with such matters.

RE-ELECTION OF RETIRING DIRECTORS

The Board currently comprises 9 Directors, namely, Mr. LU Hua, Mr. MOU Yong, Mr. WANG Minyuan, Mr. LIU Chong, Dr. WU Jiesi, Mr. HUANG Yige, Mr. WONG Po Yan, Mr. LI Wai Keung and Mr. WU Wai Chung, Michael.

– 3 –

LETTER FROM THE CHAIRMAN

On 25 March 2013, the Board announced that Mr. WONG Po Yan, an independent nonexecutive Director, shall retire by rotation in accordance with Article 101 of the Articles of Association at the Annual General Meeting and has notified the Company that due to age, he would not seek for re-election as a Director at the Annual General Meeting. Mr. WONG confirmed that he had no disagreement with the Board and there was no other matter in relation to his retirement that needed to be brought to the attention of the Shareholders. In addition, Mr. WONG will cease to be a member and the chairman of the remuneration committee and nomination committee and a member of the audit committee of the Company upon his retirement as a Director from the conclusion of the Annual General Meeting.

In accordance with Article 92 of the Articles of Association, Mr. WANG Minyuan who was appointed as a director to fill a casual vacancy will hold office only until the next following general meeting and shall then be eligible for re-election. Mr. WANG held office until the extraordinary general meeting of the Company (“EGM”) held on 18 April 2013 which is the next following general meeting after his appointment. At the EGM, Mr. WANG was re-elected as a director and will not be required to retire at the Annual General Meeting.

In accordance with Article 101 of the Articles of Association, Mr. LIU Chong, Mr. WONG Po Yan and Mr. WU Wai Chung, Michael will retire by rotation at the Annual General Meeting and except for Mr. WONG, all other retiring Directors, being eligible, offer themselves for re-election.

At present, the Company has not yet identified an appropriate person for election at the Annual General Meeting to fill up the vacated office resulting from the retirement of Mr. WONG as a Director. Pursuant to Article 103 of the Articles of Association, it will be proposed at the Annual General Meeting to resolve not to fill up such vacated office in order that the retirement of Mr. WONG as a Director may take effect immediately from the conclusion of the Annual General Meeting.

In accordance with rule 3.10(1) and 3.10A of the Listing Rules, the Board of the Company must include at least three independent non-executive directors and one-third of the Board should be independent non-executive directors. The Company is now seeking an appropriate person to be appointed by the Board or to be proposed for election to fill up the vacated office resulting from the retirement of Mr. WONG as a Director. If the requirements of rule 3.10(1) and 3.10A of the Listing Rules are not complied with at the date of the Annual General Meeting, the Company should immediately inform the Stock Exchange and publish an announcement containing the relevant details and reasons.

Pursuant to Code Provision A.4.3 of the Corporate Governance Code set out in Appendix 14 to the Listing Rules, if an independent non-executive director serves more than 9 years, his further appointment should be subject to a separate resolution to be approved by shareholders, and the papers to shareholders accompanying that resolution should include the reasons why the board believes he is still independent and should be re-elected.

– 4 –

LETTER FROM THE CHAIRMAN

Mr. WU Wai Chung, Michael (“Mr. WU”) was appointed as an independent non-executive Director (“INED”) of the Company on 4 December 2000. He has served the Company for more than 12 years as of the Latest Practicable Date and will retire by rotation at the Annual General Meeting. The Board intends to further appoint Mr. WU as an INED. During his tenure of office over the past 12 years, Mr. WU has been able to fulfill all the requirements regarding independence of an INED and provide annual confirmation of independence to the Company under Rule 3.13 of the Listing Rules. To the best knowledge of the Directors, as of the Latest Practicable Date, the Company is not aware of any foreseeable events that may occur and affect the independence of Mr. WU in the near future. Hence, the Board believes that Mr. WU is and will continue to be independent of the Company unless unexpected circumstances arise in the future. The Company will continue to review the independence of Mr. WU annually and take all appropriate measures to ensure compliance of relevant provisions regarding independence of INED in the Listing Rules.

On the other hand, during his tenure of office, Mr. WU had performed his duties as an INED to the satisfaction of the Board. Through exercising the scrutinizing and monitoring function of an INED, he had contributed to an upright and efficient board of directors for the interest of Shareholders. In view of the above, the Board considers that the re-election of Mr. WU as an INED is beneficial to the Board, the Company and the Shareholders as a whole. Pursuant to the requirement of the Listing Rules, a separate ordinary resolution will be proposed at the Annual General Meeting to approve the re-election of Mr. WU as an INED of the Company.

Details of the retiring Directors who are proposed to be re-elected at the Annual General Meeting are set out in Appendix I to this circular.

GENERAL MANDATE TO REPURCHASE SHARES

An ordinary resolution was passed at the Last Annual General Meeting whereby a general mandate was granted to the Directors to repurchase Shares representing up to 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of the relevant resolution. Such a general mandate will lapse at the conclusion of the Annual General Meeting. Therefore, an ordinary resolution will be proposed at the Annual General Meeting to grant the Repurchase Mandate, details of which are set out in Ordinary Resolution No.5 of the notice convening the Annual General Meeting.

Subject to the passing of the Ordinary Resolution No.5 set out in the notice convening the Annual General Meeting and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 372,901,540 Shares representing 10% of the issued share capital of the Company as at the date of the passing of Ordinary Resolution No.5 set out in the notice convening the Annual General Meeting.

– 5 –

LETTER FROM THE CHAIRMAN

If completion of the Acquisition (as described and defined in the announcement and circular of the Company dated 22 January 2013 and 28 March 2013 respectively) takes place and 1,410,117,262 new Shares (“Consideration Shares”) are issued to Shum Yip Holdings before the Annual General Meeting, the issued share capital of the Company will comprise 5,139,132,670 Shares. Subject to the passing of the Ordinary Resolution No.5 set out in the notice convening the Annual General Meeting, and assuming no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 513,913,267 Shares.

In accordance with the Listing Rules, an explanatory statement to provide Shareholders with all the information reasonably necessary to enable them to make an informed decision on whether to vote for or against the resolution to approve the Repurchase Mandate is set out in Appendix II to this circular.

GENERAL MANDATE TO ISSUE SHARES

Ordinary resolutions were passed at the Last Annual General Meeting whereby (i) a general mandate was given to the Directors to allot, issue and deal with Shares representing up to 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of the relevant resolution and (ii) such a general mandate was extended by adding thereto the Shares repurchased by the Company pursuant to the general mandate to repurchase Shares granted to the Directors at the Last Annual General Meeting. Such general mandate will lapse at the conclusion of the Annual General Meeting. Therefore, an ordinary resolution will be proposed at the Annual General Meeting to grant to the Directors the Issue Mandate in order to ensure flexibility and discretion to the Directors to issue any Shares, details of which are set out in Ordinary Resolution No.6 of the notice convening the Annual General Meeting.

In addition, an ordinary resolution will be proposed to extend the Issue Mandate by adding to it the number of Shares repurchased under the Repurchase Mandate, details of which are set out in Ordinary Resolution No.7 of the notice convening the Annual General Meeting.

Subject to the passing of the Ordinary Resolution No.6 set out in the notice convening the Annual General Meeting and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Issue Mandate to issue a maximum of 745,803,080 Shares representing 20% of the issued share capital of the Company as at the date of the passing of Ordinary Resolution No.6 set out in the notice convening the Annual General Meeting.

If completion of the Acquisition takes place and Consideration Shares are issued to Shum Yip Holdings before the Annual General Meeting, the issued share capital of the Company will comprise 5,139,132,670 Shares. Subject to the passing of the Ordinary Resolution No.6 set out in the notice convening the Annual General Meeting, and assuming no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Issue Mandate to issue a maximum of 1,027,826,534 Shares.

– 6 –

LETTER FROM THE CHAIRMAN

ANNUAL GENERAL MEETING

At the Annual General Meeting, resolutions will be proposed to the Shareholders in respect of the ordinary business to be considered at the Annual General Meeting, including the re-election of retiring Directors, and the special business to be considered at the Annual General Meeting, being the granting of the Repurchase Mandate and the Issue Mandate and the extension of the Issue Mandate. The Notice of Annual General Meeting will also be set out in the 2012 Annual Report of the Company expected to be despatched to Shareholders together with this circular.

A form of proxy for use at the Annual General Meeting is enclosed with the 2012 Annual Report of the Company to be despatched to Shareholders together with this circular. Whether or not you are able to attend the Annual General Meeting, you are requested to complete the form of proxy and return it to the registered office of the Company in accordance with the instructions printed thereon not later than 48 hours before the time fixed for holding the Annual General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the Annual General Meeting or any adjourned meeting if you so desire.

VOTING BY WAY OF POLL

Pursuant to Rule 13.39(4) of the Listing Rules, all votes at the Annual General Meeting will be taken by poll except where the Chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matters to be voted on a show of hands and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATION

The Directors consider that the re-election of the retiring Directors, the granting of the Repurchase Mandate and the Issue Mandate and the extension of the Issue Mandate are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders should vote in favour of the relevant resolutions to be proposed at the Annual General Meeting.

RESPONSIBILITY STATEMENT

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

By order of the Board Shenzhen Investment Limited LU Hua

Chairman

– 7 –

APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

The details of the two Directors proposed to be re-elected at the Annual General Meeting to be held on 13 June 2013 are set out below:

1. Mr. LIU Chong , aged 53, was appointed as Executive Director on 30 December 2010. He is currently the Vice President of Shum Yip, Shum Yip Holdings Company Limited (“Shum Yip Holdings”) and the Company. He holds a bachelor degree and postgraduate qualification from Jiangxi Institute of Finance and Economics, majoring in Accounting and he is a senior accountant. Prior to joining Shum Yip Holdings in April 2010, he served successively as deputy general manager and financial controller of Shenzhen SDG Company Limited（深圳市特發集團有限公司）, a director and financial controller of Shenzhen Petrochemical Group Co., Ltd., a director and financial controller of Shenzhen Health Mineral Water Co., Ltd. and a director of Shenzhen Tellus (Group) Company Limited (SZSE:000025) from June 2009 to June 2010. Mr. LIU has been appointed as an independent director of Shenzhen Shenxin Taifeng Group Co., Ltd. (SZSE:000034) (“Shenxin Taifeng”) since May 2009. Mr. LIU owns over 30 years of experience in finance and accounting management.

Shenxin Taifeng is a company established in the People’s Republic of China (“PRC”). On 20 November 2009, the Shenzhen Intermediate People’s Court, PRC（深圳市 中級人民法院）granted an order that Shenxin Taifeng shall undergo a restructuring and an administrator（管理人）was thereby appointed. On 15 January 2010, the Shenzhen Intermediate People’s Court, PRC ordered that four subsidiaries of Shenxin Taifeng shall undergo restructuring. On 30 April 2010, the Shenzhen Intermediate People’s Court, PRC further granted an order to approve the restructuring proposal of Shenxin Taifeng and its four subsidiaries (the “Restructuring”). The estimated amount involved in the Restructuring was approximately RMB2,113 million, comprising an external debt of RMB1,525 million. According to the Restructuring, part of the debt had been settled by way of remise of shares by Shenxin Taifeng’s promoter in accordance with the respective repayment rates, and Shenxin Taifeng and its four subsidiaries shall not be liable for the remaining debt pursuant to requirement under the Law of the People’s Republic of China on Enterprise Bankruptcy. On 30 August 2010, the Shenzhen Intermediate People’s Court, PRC ordered that the implementation of the Restructuring was completed, and Shenxin Taifeng ceased to be liable for the relevant debt in the said proceeding. Based on the information published by Shenxin Taifeng, Shenxin Taifeng is principally engaged in the business of (i) the research, development, production and sale of communication equipment and software development, (ii) domestic commerce and goods consignment; (iii) trade and operation of import and export business; (iv) raise of poultry and the production, processing and sale of animal feeds; (v) fruit and tree plantation; and (vi) development of real estate and the management of properties.

– 8 –

APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Save as disclosed above, Mr. LIU did not hold any directorships in any other listed public companies in the last three years or any position with the Company or other members of the Company’s group.

As at the Latest Practicable Date, Mr. LIU has beneficial interest in an option to subscribe for 4,016,000 Shares at a subscription price of HK$2.39 per Share within the meaning of Part XV of the Securities and Futures Ordinance.

The Company has entered into an appointment letter with Mr. LIU for a term of 3 years commencing from 27 March 2012 which will continue until terminated by either party to the appointment letter at six months’ notice. Mr. LIU is also subject to the retirement and re-election provisions in the Articles of Association pursuant to which he shall retire from office by rotation at the annual general meeting of the Company. Mr. LIU is currently entitled to receive a basic remuneration of such amount per annum as the Board may determine from time to time under the authority granted by Shareholders at the annual general meeting. In addition, Mr. LIU is entitled to receive discretionary bonuses, share options or other benefits as may be decided by the Board having regard to his performance and duties, the Company’s performance and profitability and the prevailing market condition. For the year ending 31 December 2013, a basic remuneration of HK$421,321 per annum will be payable to Mr. LIU.

Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders and there is no information which is required to be disclosed pursuant to any requirements of rule 13.51(2) of the Listing Rules.

1. Mr. WU Wai Chung, Michael , aged 63, was appointed as Independent NonExecutive Director on 9 October 2002. He is a member of the audit committee and the remuneration committee of the Company. He was formerly the deputy chairman of the Shanghai Stock Exchange and a Commissioner in the Strategy & Development Committee of the China Securities Regulatory Commission in the PRC. Prior to that, he was the deputy chairman, chief operating officer and executive director responsible for the Intermediaries Division, comprising the Licensing and Intermediaries Supervision Departments until his departure from the Securities and Futures Commission on 31 December 1997. He was an independent non-executive director of Sunwah Kingsway Capital Holdings Limited. At present, Mr. WU is an independent non-executive director and chairman of Cypress Jade Agricultural Holdings Limited and an Executive Director of Tradelink Electronic Commerce Ltd, all being listed public companies in Hong Kong. Save as disclosed above, Mr. WU does not have any relationships with any Directors, senior management, substantial or controlling shareholders of the Company.

– 9 –

APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

As at the Latest Practicable Date, Mr. WU did not have any interests in Shares or underlying shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

The Company has entered into an appointment letter with Mr. WU. Mr. WU’s term of service with the Company is three years up to 31 December 2013 but is subject to the retirement and re-election provisions in the Articles of Association pursuant to which he shall retire from office by rotation at the annual general meeting of the Company. Mr. WU is currently entitled to a director’s fee of such amount per annum as the Board may determine from time to time under the authority granted by Shareholders at the annual general meeting. His director’s fee is to be determined by the Board with reference to his duties and responsibilities with the Company, the Company’s business performance and profitability and the prevailing market conditions. For the year ended 31 December 2012, Mr. WU received a remuneration of HK$280,000. For the year ending 31 December 2013, a remuneration of HK$280,000 will be payable to Mr. WU subject to authorization to be given by the Shareholders at the Annual General Meeting.

Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders and there is no other information which is required to be disclosed pursuant to any requirements of Rule 13.51(2) of the Listing Rules.

– 10 –

EXPLANATORY STATEMENT

APPENDIX II

The Listing Rules permit a company with a primary listing on the Stock Exchange to repurchase in cash its own shares on the Stock Exchange subject to certain restrictions, the most important of which are summarised below:

• (i) the shares proposed to be purchased by the company are fully-paid up;

• (ii) the company has previously sent to its shareholders an explanatory statement complying with the provisions of Rule 10.06(1)(b); and

• (iii) the shareholders of the company have given a specific approval or a general mandate to the directors to make such purchase(s), by way of an ordinary resolution which complies with the provisions of Rule 10.06(1)(c) and which has been passed at a general meeting of the company duly convened and held.

The company must report the outcome of the general meeting called to consider the proposed purchases to the Stock Exchange immediately following the meeting.

This appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to Shareholders for their consideration of the Repurchase Mandate and also constitutes the memorandum as required under Section 49BA(3) of the Companies Ordinance.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 3,729,015,408 Shares. Subject to the passing of the Ordinary Resolution No.5 set out in the notice convening the Annual General Meeting, and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 372,901,540 Shares.

If completion of the Acquisition takes place and Consideration Shares are issued to Shum Yip Holdings before the Annual General Meeting, the issued share capital of the Company will comprise 5,139,132,670 shares. Subject to the passing of the Ordinary Resolution No. 5 set out in the notice convening the Annual General Meeting, and assuming no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 513,913,267 Shares.

2. REASONS FOR REPURCHASE

Repurchases of Shares will only be made when the Directors believe that such a repurchase will benefit the Company and its Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per Share.

– 11 –

EXPLANATORY STATEMENT

APPENDIX II

3. FUNDING OF REPURCHASES

Repurchases will be funded entirely from the Company’s available cash flow or working capital facilities which will be funds legally available for the purpose and in accordance with the laws of Hong Kong and the memorandum and articles of association of the Company.

The Companies Ordinance provides that the amount of capital repaid in connection with a share repurchase may only be paid from the distributable profits of the company or from the proceeds of a new issue of shares made for the purpose. The Companies Ordinance further provides that the amount of premium payable on repurchase may only be paid out of the distributable profits of the company. Where the repurchased shares were issued at a premium, any premium payable on repurchase may be paid out of the proceeds of a fresh issue of shares made for the purposes of the share repurchase up to certain limits specified by the Companies Ordinance.

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements contained in the annual report for the year ended 31 December 2012) in the event that the Repurchase Mandate is exercised in full at any time during the proposed purchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

4. GENERAL

None of Directors nor, to the best of their knowledge, having made all reasonable enquires, any of their associates (as defined in the Listing Rules), has any present intention, if the Repurchase Mandate is approved by Shareholders, to sell any Shares to the Company.

The Directors have undertaken to the Stock Exchange that they will exercise the power to repurchase Shares pursuant to Ordinary Resolution No. 5 set out in the notice convening the Annual General Meeting in accordance with the Listing Rules and the applicable laws and regulations of Hong Kong.

No connected persons (as defined in the Listing Rules) of the Company have notified the Company that they have a present intention to sell Shares held by them to the Company, or have undertaken not to do so, if the Repurchase Mandate is approved by Shareholders.

– 12 –

APPENDIX II

EXPLANATORY STATEMENT

If as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Takeovers Code. As a result, a Shareholder, or group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, 深業集團 had an indirect interest in 1,655,211,234 Shares, representing approximately 44.39% of the issued share capital of the Company through its 100% interest in Shum Yip Holdings, being a substantial shareholder of the Company. To the best of the knowledge and belief of the Company, no other person, together with his/her associates, was beneficially interested in Shares representing 10% or more of the issued share capital of the Company. If completion of the Acquisition takes place, Consideration Shares will be issued to Shum Yip Holdings and thus 深業集團 will be indirectly interested in 3,065,328,496 Shares, representing approximately 59.7% of the issued share capital through Shum Yip Holdings.

In the event that the Directors exercise in full the power to repurchase Shares which is proposed to be granted pursuant to Ordinary Resolution No. 5 set out in the notice convening the Annual General Meeting, the interest of 深業集團 in the Company held through Shum Yip Holdings would be increased to approximately 49.32% of the issued share capital of the Company, assuming no Consideration Shares are issued before the repurchase. Then, 深業集團 could be required under Rule 26 of the Takeovers Code to make a mandatory offer in respect of all the issued shares of the Company by reason of such increase. If completion of the Acquisition takes place and the Consideration Shares are issued to Shum Yip Holdings before the Annual General Meeting or before the repurchase, the shareholding held by 深業集團 through Shum Yip Holdings will be above 50% of the then issued share capital of the Company, and even if the Ordinary Resolution No. 5 is approved by the Shareholders at the Annual General Meeting and the power to repurchase is exercised in full, 深業集團 would not be required under the Takeovers Code to make a mandatory offer in respect of all the issued Shares by reason by the increase in its shareholding as a result of such repurchase. Save as aforesaid, the Directors are not aware of any consequences which may arise under the Takeovers Code as a consequence of any purchases made under the Repurchase Mandate. The Directors will use their best endeavours to ensure that the Repurchase Mandate will not be exercised to the extent that the number of Shares held by the public would be reduced to less than 25% of the issued share capital of the Company. The Directors have no intention to exercise the Repurchase Mandate which may result in a possible mandatory offer being made under the Takeovers Code.

– 13 –

EXPLANATORY STATEMENT

APPENDIX II

5. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange during each of the previous twelve months before the Latest Practicable Date were as follows:–

	Shares
	Highest	Lowest
	HK$	HK$
2012
April	1.87	1.68
May	1.83	1.62
June	1.92	1.66
July	1.95	1.71
August	1.83	1.71
September	1.89	1.73
October	2.09	1.77
November	2.65	2.06
December	3.34	2.49
2013
January	4.09	3.16
February	3.62	3.12
March	3.44	2.77
April (up to Latest Practicable Date)	3.34	2.87

6. SHARE REPURCHASE MADE BY THE COMPANY

The Company has not purchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

– 14 –