THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Shenzhen Investment Limited (the “Company”), you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or the transferee 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 or the transferee.

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

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.

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 00604)

(1) MAJOR AND CONNECTED TRANSACTION IN RELATION TO

ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF A COMPANY INDIRECTLY HOLDING A LAND SITE IN SHENZHEN, THE PEOPLE’S REPUBLIC OF CHINA INVOLVING THE ISSUE OF CONSIDERATION SHARES; (2) APPLICATION FOR WHITEWASH WAIVER; (3) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (4) RE-ELECTION OF RETIRING DIRECTOR; AND ( 5) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial adviser to the Company

SOMERLEY LIMITED

Independent financial adviser

to the Takeovers Code IBC, the Listing Rules IBC and the Independent Shareholders

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Letters from the Takeovers Code IBC and the Listing Rules IBC containing their recommendation to the Independent Shareholders are set out on pages 31 to 32 and pages 33 to 34 respectively of this circular. A letter from CIMB, the independent financial adviser, containing its advice to the Takeovers Code IBC and the Listing Rules IBC and the Independent Shareholders is set out on pages 35 to 56 of this circular.

A notice convening an extraordinary general meeting of the Company to be held at Garden Room, 2nd Floor, Hotel Nikko, Hong Kong, 72 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong at 10:00 a.m. on Thursday, 18 April 2013 for considering the ordinary resolutions to approve the Acquisition (including the issuance of the Consideration Shares), the Whitewash Waiver, the increase in authorised share capital of the Company , the Property Disposal and the re-election of a retiring Director, is set out on pages EGM – 1 to EGM – 5 of this circular. Whether or not you intend to attend the meeting, you are requested to complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and deposit 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 less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

28 March 2013

			Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			7
Letter from the Takeovers Code IBC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			31
Letter from the Listing Rules IBC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			33
Letter from CIMB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			35
Appendix I	–	Financial information of the Group. . . . . . . . . . . . . . . . . . . . . .	I – 1
Appendix II A	–	Accountants’ report of the Target Group. . . . . . . . . . . . . . . . .	IIA – 1
Appendix II B	–	Accountants’ report of the PRC Co 1 Group. . . . . . . . . . . . . .	IIB – 1
Appendix II C	–	Management discussion and analysis and
		other financial information of the Target Group. . . . . . . . . .	II C – 1
Appendix III	–	Financial information of the Enlarged Group. . . . . . . . . . . . . .	III – 1
Appendix IV	–	Valuation report on the property interests of the Group. . . . .	IV – 1
Appendix V	–	Valuation report on the property interests of
		the Target Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V – 1
Appendix VI	–	Details of Director proposed for re-election. . . . . . . . . . . . . . .	VI – 1
Appendix VII	–	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VII – 1
Notice of the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			EGM – 1

– i –

DEFINITIONS

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

“acting in concert”

has the same meaning as defined in the Takeovers Code; and the term “concert parties” shall be construed accordingly

“Acquisition”
the proposed acquisition of the entire issued share capital of the Target Company by the Purchaser from the Vendor pursuant to the terms and conditions of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement)
“Acquisition Agreement” the acquisition agreement entered into on 17 January 2013 (after trading hours) between the Purchaser and the Vendor in respect of the Acquisition
“Agreed Land Premium”
RMB2.0 billion , being the estimated additional land premium payable by PRC Co 2 to the PRC government for the sale of the apartment portion of the Target Site
“Announcement”
the announcement of the Company dated 22 January 2013 in relation to, among others, the Acquisition and the Whitewash Waiver
“Articles of Association”

the articles of association of the Company, as originally adopted and as from time to time altered

“associate(s)”

has the same meaning as defined in the Listing Rules

“Board” the board of the Directors

“Business Day”

a day (other than a Saturday, a Sunday or a public holiday or a day on which Typhoon No. 8 signal or higher is hoisted or a “black” rain storm warning is given in Hong Kong at any time during 9:00 a.m. and 5:00 p.m.) on which licensed banks are generally open for business in Hong Kong

“BVI”

the British Virgin Islands

“ CIMB”

CIMB Securities Limited, a licensed corporation to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, and the independent financial adviser appointed by the Takeovers Code IBC and Listing Rules IBC to advise the Takeovers Code IBC, the Listing Rules IBC and the Independent Shareholders in relation to the Acquisition (and the transactions contemplated thereunder) and, where applicable, the Whitewash Waiver

– 1 –

DEFINITIONS

“Company” or
“ Purchaser”
Shenzhen Investment Limited, a company incorporated in Hong Kong with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange
“Completion” completion of the Acquisition
“Completion Date”
the date falling on the second Business Day after all the conditions precedent under the Acquisition Agreement have been fulfilled and/or waived by the Purchaser (or such other date as the Vendor and the Purchaser may agree in writing)
“connected person(s)” has the same meaning as defined in the Listing Rules
“Consideration”
the consideration of RMB4,150.0 million (equivalent to approximately HK$5,170.9 million) payable by the Purchaser for acquisition of the entire issued share capital of the Target Company pursuant to the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement)
“Consideration Share(s)” the new Shares to be allotted and issued by the Company to the Vendor as payment of the Consideration
“controlling shareholder” has the same meaning as defined in the Listing Rules
“Director(s)” the director(s) of the Company
“EGM”
the extraordinary general meeting of the Company to be convened at Garden Room, 2nd Floor, Hotel Nikko, Hong Kong, 72 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong at 10:00 a.m. on Thursday, 18 April 2013 for the purpose of considering and, if thought fit, approving the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions contemplated thereunder (including the issuance of the Consideration Shares), the Whitewash Waiver , the increase in authorised share capital of the Company , the Property Disposal and the re-election of Mr. W ANG Minyuan as Director
“Enlarged Group”

the Group as enlarged by the Acquisition

“Executive”
the Executive Director of the Corporate Finance Division of the SFC from time to time and any delegate of such Executive Director
“Group” the Company and its subsidiaries from time to time

– 2 –

DEFINITIONS

“Hong Kong”

the Hong Kong Special Administrative Region of the PRC

“Independent Shareholders” the Shareholders other than (i) the Vendor and its associates and concert parties; and (ii) Shareholders who are involved in or interested in the Acquisition and/or the Whitewash Waiver
“Issue Price”
the issue price of HK$3.667 per Consideration Share
“Last Trading Date”
17 January 2013, being the last trading date of the Shares before the issue of the Announcement
“Latest Practicable Date”
25 March 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Listing Rules IBC” an independent committee of the Board, comprising all of the independent non-executive Directors, namely Mr. WONG Po Yan, Mr. WU Wai Chung, Michael and Mr. LI Wai Keung constituted, in compliance with the Listing Rules, to advise the Independent Shareholders as regards the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions contemplated thereunder
“PRC” or “China”
the People’s Republic of China and, for the purpose of this circular, excluding Hong Kong, Macao Special Administrative Region of the People’s Republic of China and Taiwan
“PRC Co 1”
深圳市吉兆鑫投資有限公司 (Shenzhen Jizhaoxin Investment Limited*), a company established in the PRC and a member of the Target Group with its principal business activities as investment holding
“PRC Co 1 Group”

PRC Co 1 and its subsidiar y

“PRC Co 2”

深圳市科之谷投資有限公司 ( S h e n z h e n Ke z h i g u Investment Limited*), a company established in the PRC and a member of the Target Group with its principal business activities as property development and property investment

– 3 –

DEFINITIONS

“Property” certain units of Tai R an Building, Binhe Da Road, Futian District, Shenzhen City, Guangdong Province, the PRC with GFA of 7,885.11 sq. m., as more particularly described in Appendix V to this circular “Property Disposal” the proposed sale of the Property by Shum Yip Terra to PRC Co 2 pursuant to the Property Disposal Agreements “Property Disposal seven sale and purchase agreements all dated 31 July 2012 Agreements” entered into between Shum Yip Terra as vend or and PRC Co 2 as purchaser for the sale and purchase of the Property

“Relevant Company the guarantee entered into by PRC Co 2 on 28 June Guarantee” 2012 in favour of a bank in respect of a bank borrowing of a subsidiary of Shum Yip Group in the amount of approximately RMB475 million

“Relevant Period” the period commencing six months preceding 22 January 2013, being the date of the Announcement, and ending on the Latest Practicable Date

“SFC” The Securities and Futures Commission of Hong Kong “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Share(s)” the ordinary share(s) with par value of HK$0.05 each in the issued share capital of the Company “Share Option(s)” the share options carrying rights to subscribe for Shares, as granted under the share option schemes of Company adopted by the Company on 5 June 2002 and 22 June 2012 “Shareholder(s)” the holder(s) of the Share(s) “Shareholders’ Loan” the amount due to the Vendor and Shum Yip Group and its subsidiaries by the Target Group, which was in the approximate aggregate amount of RMB 5.03 billion (including interests) as at 31 December 2012

“Shum Yip Group” 深業集團有限公司 (Shum Yip Group Limited*), a company established in the PRC and the holding company of the Vendor, which is ultimately wholly owned by Shenzhen Municipal People’s Government and under the administration of Shenzhen State-owned Assets Supervision and Administration Commission

– 4 –

DEFINITIONS

“Shum Yip Terra” 深業泰然（集團）股份有限公司 ( S h u m Yi p Te r r a (Holdings) Co., Ltd.*), a company established in the PRC in which the Company held an attributable interest of approximately 75.05% as at the Latest Practicable Date

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Supplemental Acquisition a supplemental agreement to the Acquisition Agreement Agreement” dated 25 February 2013 entered into between the Vendor and the Company in relation to the Acquisition
“Takeovers Code” the Hong Kong Code on the Takeovers and Mergers

“Takeovers Code IBC” the independent committee of the Board comprising a non-executive Director, namely Dr. WU Jiesi and all the independent non-executive Directors, namely Mr. WONG Po Yan, Mr. Wu Wai Chung, Michael and Mr. LI Wai Keung constituted, in compliance with Rule 2.8 of the Takeovers Code, to advise the Independent Shareholders as regards the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions contemplated thereunder and the Whitewash Waiver

“Target Company”

Shenzhen Silicon Valley Hi-tech Investment Company L i m i t e d（深圳硅谷投資有限公司）, a c o m p a n y incorporated in the BVI with its entire issued share capital currently held by the Vendor

“Target Group”

the Target Company and its subsidiaries (namely, WFOE, PRC Co 1 and PRC Co 2)

“Target Site”

the parcels of land and the buildings erected thereon owned by the Target Group with a total land area of approximately 121,225.1 sq. m. and a GFA of approximately 788,910 sq. m. (or 820,910 sq. m. including underground supporting commercial services facilities) at the junction of Caitian Road and Sungang Road, Futian District, Shenzhen City, Guangdong Province, the PRC

“Vendor” or “Shum Yip Holdings”

Shum Yip Holdings Company Limited（深業（集團）有限公司）, a company incorporated in Hong Kong and wholly owned by Shum Yip Group

– 5 –

DEFINITIONS

深圳市深業科技開發有限公司 (Shenzhen Shum Yip Technology Development Limited*), a wholly foreign - owned enterprise established in the PRC and a member of the Target Group with its principal business activities as investment holding

“WFOE” 深圳市深業科技開發有限公司 (Shenzhen Shum Yip Technology Development Limited*), a wholly foreign - owned enterprise established in the PRC and a member of the Target Group with its principal business activities as investment holding “Whitewash Waiver” a waiver of the obligation of the Vendor to make a mandatory general offer to the Shareholders in respect of the Shares and securities issued by the Company not already owned or agreed to be acquired by the Vendor and its concert parties as a result of the issue of the Consideration Shares pursuant to the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) in accordance with Note 1 on dispensations from Rule 26 of the Takeovers Code

“GFA” gross floor area “HK$” Hong Kong dollar(s), the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “sq. m.” square metre(s) “%” per cent.

Unless otherwise specified, translations of RMB into HK$ in this circular are based on the rates of HK$1.246 = RMB1.0. No representation is made that any amounts in RMB and HK$ can be or could have been converted at the relevant dates at the above rates or any other rates at all.

The English translation is for identification purpose only.

– 6 –

LETTER FROM THE BOARD

28 March 2013

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 00604)

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

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

Non-executive Directors: Dr. WU Jiesi Mr. HUANG Yige

Independent non-executive Directors: Mr. WONG Po Yan Mr. WU Wai Chung, Michael Mr. LI Wai Keung

To the Shareholders

Dear Sir or Madam,

(1) MAJOR AND CONNECTED TRANSACTION IN RELATION TO

ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF A COMPANY INDIRECTLY HOLDING A LAND SITE IN SHENZHEN, THE PEOPLE’s REPUBLIC OF CHINA INVOLVING THE ISSUE OF CONSIDERATION SHARES; (2) APPLICATION FOR WHITEWASH WAIVER;

(3) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (4) RE-ELECTION OF RETIRING DIRECTOR; AND ( 5) NOTICE OF EXTRAORDINARY GENERAL MEETING

(A) INTRODUCTION

On 22 January 2013, the Board announced that on 17 January 2013 (after trading hours), the Company and the Vendor, a wholly-owned subsidiary of Shum Yip Group, entered into the Acquisition Agreement pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the entire issued share capital of the Target Company. The principal asset of the Target Group is the Target Site, which is located at the junction of Caitian Road and Sungang Road, Futian District, Shenzhen City, Guangdong Province, the PRC and is held through PRC Co 2.

– 7 –

LETTER FROM THE BOARD

The purpose of this circular is to give you, among other things, (i) further information on the Acquisition and the Whitewash Waiver; (ii) the letters of recommendation from the Takeovers Code IBC and the Listing Rules IBC to the Independent Shareholders in relation to the Acquisition and, where applicable, the Whitewash Waiver; (iii) the letter of advice from CIMB to the Takeovers Code IBC and the Listing Rules IBC and the Independent Shareholders in relation to the Acquisition and, where applicable, the Whitewash Waiver; (iv) information regarding the re-election of a retiring Director ( v) the notice of the EGM; and ( vi) other information as required under the Listing Rules and the Takeovers Code.

(B) THE ACQUISITION

The Acquisition Agreement

Date: 17 January 2013 (after trading hours) Purchaser: the Company Vendor: the Vendor

The Vendor is an investment holding company. As at the Latest Practicable Date, the Vendor was the direct controlling shareholder of the Company holding 1,655,211,234 Shares, representing approximately 44.4% of the issued share capital of the Company. The Vendor is wholly owned by Shum Yip Group.

Assets to be acquired

Pursuant to the Acquisition Agreement, the Purchaser has conditionally agreed to acquire the entire issued share capital of the Target Company from the Vendor. The principal asset of the Target Group is the Target Site, which is located at the junction of Caitian Road and Sungang Road, Futian District, Shenzhen City, Guangdong Province, the PRC and is held through PRC Co 2. The Target Company, through PRC Co 2, entered into the Property Disposal Agreements to acquire the Property at a total consideration of approximately RMB272.4 million. Details of the Target Site and the Property are set out in section headed “(D) Information on the Target Group” below.

Upon Completion, the Target Company, WFOE, PRC Co 1 and PRC Co 2 will become wholly-owned subsidiaries of the Company.

– 8 –

LETTER FROM THE BOARD

The Consideration

The Consideration shall be RMB4,150.0 million (equivalent to approximately HK$5,170.9 million), which has been agreed after arm’s length negotiation between the Purchaser and the Vendor having taken into account, among others, market information of the Target Site including comparable sale evidence as available in the relevant market, the Agreed Land Premium, the business prospects of the Target Group, deferred tax liabilities relating to the excess of fair value over costs of the Target Site, trade and other payables and tax payables.

The Consideration represents a discount of approximately 11.6 % to the net asset value of the Target Group as at 31 December 2012 of approximately RMB 4,697 million having adjusted for (i) the valuation of the Target Site as at 31 December 2012, using the direct comparison valuation method, in the amount of HK$ 10,300 million; and (ii) the estimated potential land appreciation tax liabilities under the relevant PRC laws and regulations that may be payable by PRC Co 2, being the difference of the potential net tax liability based on the Consideration and the land cost of the Target Site , which is calculated with reference to (a) the prevailing tax rates; (b) the projected sales proceeds from the sale of properties to be developed; and (c) the projected allowable cost deductions.

Upon Completion, the Consideration shall be satisfied by the Company by way of allotment and issue of 1,410,117,262 Consideration Shares credited as fully paid up at the issue price of HK$3.667 per Consideration Share by the Company to the Vendor.

Conditions precedent

Completion is subject to the following conditions being satisfied:

(a) the passing of an ordinary resolution by the Independent Shareholders at the EGM approving the Acquisition Agreement and the transactions contemplated thereunder including the issue of Consideration Shares to the Vendor;
(b) the passing of an ordinary resolution by the Independent Shareholders at the EGM approving the Whitewash Waiver;
(c) the passing of an ordinary resolution by the Shareholders at the EGM approving the increase in the authorised share capital of the Company to HK$500,000,000 (comprising 10,000,000,000 Shares);
(d) the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, Consideration Shares on the Stock Exchange;

– 9 –

LETTER FROM THE BOARD

(e) the Executive granting the Whitewash Waiver;
(f) the Vendor having provided all relevant documents of the Target Group as required by the Purchaser from time to time and the Purchaser having completed due diligence on the Target Group (including but not limited to in respect of the establishment, approvals, legal, financial, engineering, land, property, management, labour, insurance, environmental protection, foreign exchange, lending and borrowing, guarantee and investment of all relevant companies) and having confirmed in writing that the due diligence results are satisfactory;
(g) the issue of legal opinion by a qualified PRC lawyer confirming (including but not limited to) the due establishment and existence of the Target Group (other than the Target Company) and their business operation and scope and property, etc. are legal and valid in all material respects under the PRC laws;
(h) the Vendor having provided to the Company all relevant documentary evidence that PRC Co 2 has obtained the construction works planning permit and construction works commencement permit or the confirmation approving the advance commencement of the building works, as issued by the relevant PRC authority(ies) in respect of the construction works already commenced at the Target Site;
(i) approval being obtained by the Vendor from Shenzhen State-owned Assets Supervision and Administration Commission for the sale and purchase of the entire issued share capital in the Target Company pursuant to the Acquisition Agreement; and
(j) the warranties given by the Vendor under the Acquisition Agreement remaining true and accurate in all material respects and not misleading in any material respect.

The Purchaser may waive conditions precedent (f), (g), (h) and/or (j) above by notice in writing to the Vendor. If the above conditions precedent are not fulfilled on or before 30 June 2013 (or such other later date or longer period as agreed by the Vendor and the Company in writing), the Acquisition Agreement shall terminate automatically. As at the Latest Practicable Date, only condition precedent (i) above had been fulfilled.

– 10 –

LETTER FROM THE BOARD

Completion

Upon fulfillment and/or waiver of all the conditions precedent set out above, Completion shall take place on the Completion Date.

The indemnities

Under the Acquisition Agreement, the Purchaser and the Vendor have agreed to indemnify the other party for losses, liabilities or expenses, directly or indirectly incurred by such other party, arising from, as a result of or based on its non-compliance of any provision of the Acquisition Agreement including any terms, representations, undertakings and warranties.

In addition, the Purchaser has agreed to pay the Vendor an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion of the Target Site is less than the Agreed Land Premium (if any); and the Vendor has agreed to indemnify and pay the Purchaser for an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion is higher than the Agreed Land Premium (if any). The Vendor has also agreed to indemnify the Purchaser for any amount of land premium payable to the PRC government by PRC Co 2 for its holding and operating (including leasing) of the commercial services facilities, underground supporting commercial services facilities and hotel portions of the Target Site.

The Vendor has further agreed to indemnify the Purchaser for any liabilities incurred or to be incurred by PRC Co 2 and losses directly or indirectly incurred by the Purchaser or PRC Co 2 in relation to or as a result of the Relevant Company Guarantee. Pursuant to the Acquisition Agreement, the Vendor has undertaken to procure the full and valid release of the Relevant Company Guarantee before Completion.

Upon Completion, the Vendor and the Purchaser will enter into a tax indemnity deed pursuant to which, among other things, the Vendor will undertake to indemnify the Purchaser (for itself and as trustee for each member of the Target Group) for, among others, (i) any loss of the Target Group if the Target Group is required to bear any tax liabilities of the Vendor which may arise from the transactions under the Acquisition Agreement; and (ii) any tax liabilities due to the income or transactions of the Target Group prior to the Completion Date.

– 11 –

LETTER FROM THE BOARD

(C) CONSIDERATION SHARES

The Consideration Shares will be issued at HK$3.667 per Share, which:

(i) represents a premium of approximately 9.1% over the closing price of HK$3.360 per Share as quoted on the Stock Exchange on the Last Trading Date;
(ii) represents a premium of approximately 9.3% over the average closing price of HK$3.354 per Share for the last five trading days up to and including the Last Trading Date;
(iii) represents a premium of approximately 8.7% over the average closing price of HK$3.375 per Share for the last ten trading days up to and including the Last Trading Date;
(iv) represents a premium of approximately 21.8% over the closing price of HK$ 3.01 per Share as quoted on the Stock Exchange on the Latest Practicable Date; and
(v) represents a discount of approximately 20.1% to the audited consolidated net assets value attributable to equity holders of the Company per Share of approximately HK$ 4.60, calculated based on the Group’s audited consolidated net asset value (less the proposed final dividend for the year ended 31 December 2012) of HK$ 17,137.7 million as at 31 December 2012 and 3,729,015,408 Shares in issue as at the Latest Practicable Date.

When allotted and issued at Completion, the Consideration Shares will represent approximately:

(i) 37.8% of the existing issued share capital of the Company as at the Latest Practicable Date; and
(ii) 27.4% of the issued share capital of the Company as enlarged by the allotment and issue of the Consideration Shares.

The Consideration Shares are to be issued by the Company under specific mandate sought from the Independent Shareholders at the EGM. The Consideration Shares, when allotted and issued, will rank pari passu in all respects with all the Shares then in issue. The issue of the Consideration Share will not result in a change of control of the Company.

The Issue Price was arrived at after arm’s length negotiations between the parties to the Acquisition Agreement after taking into account, among others, the prevailing market price of the Shares, the financial performance of the Group and the prevailing market conditions at the time of signing of the Acquisition Agreement.

– 12 –

LETTER FROM THE BOARD

An application will be made to the Stock Exchange by the Company for the listing of, and permission to deal in, the Consideration Shares.

(D) INFORMATION ON THE TARGET GROUP

Information on the Target Group

The Target Company was incorporated in the BVI and, through its wholly-owned subsidiaries established in the PRC, holds the entire interest in the Target Site. Save for the investment in the Target Site, the prepayment made for the Property and the Shareholders’ Loan, the Target Group has no other material assets and liabilities and members of the Target Group has not conducted any business activities since their incorporation or establishment.

Information on the Target Site

The Target Site is located at the junction of Caitian Road and Sungang Road, Futian District, Shenzhen City, Guangdong Province, the PRC.

The Target Site has a total land area of approximately 121,225.1 sq. m. and a GFA of approximately 788,910 sq. m. (or 820,910 sq. m. including underground supporting commercial services facilities). The Target Site is divided into the northern portion and the southern portion. The northern portion has a land area of approximately 25,105 sq. m. and a GFA of approximately 170,720 sq. m.. It is planned to be developed into a residential area with apartments in 4 blocks of buildings, all of which are intended to be for sale. The southern portion has a land area of approximately 96,120.1 sq. m. and a GFA of approximately 618,190 sq. m. (or 650,190 sq. m. including underground supporting commercial services facilities). It is planned to be developed into three main areas, namely office with a GFA of approximately 432,760 sq. m., hotel with a GFA of approximately 50,000 sq. m. and commercial services facilities with a GFA of approximately 135,000 sq. m.. 70% of the office area is intended to be for sale while the hotel and commercial services facilities are currently intended for leasing. In addition, a total of 5,400 car parking spaces shall be provided in the basement of the subject development. Construction work for the northern portion of the Target Site is currently underway and completion is expected by end of 2014.

– 13 –

LETTER FROM THE BOARD

has been advised by the relevant PRC authority(ies) that these permits are expected to be granted in April 2013. Based on the foregoing, the PRC legal adviser of the Company has advised that subject to PRC Co 2 conforming to the applicable PRC laws and regulations, and after PRC Co 2 having implemented/completed the procedures required by the applicable PRC laws and regulations and the relevant PRC authorities, there will be no material legal obstacles for PRC Co 2 to obtain the above-mentioned permits. Furthermore, as confirmed by the Target Group that, as at the Latest Practicable Date, no related penalties had been imposed by the relevant PRC authority(ies) on PRC Co 2. Based on all of the foregoing, the PRC legal adviser of the Company is of the view that the commencement of the building works without obtaining such permits will not have material adverse affects on the business and/or operations of the Target Group after Completion.

The Property Disposal and its implications on the Acquisition

PRC Co 2 entered into the Property Disposal Agreements with Shum Yip Terra to acquire the Property at a total consideration of approximately RMB272.4 million. The Property is for industrial use and has a GFA of 7,885.11 sq. m.. Payment of such consideration has been made and the transfer of the title of the Property is expected to complete by 30 June 2013. The Property Disposal constitutes a connected transaction of the Company and is subject to independent Shareholders’ approval. The Target Group had 151 employees as at 31 December 2012 and has been leasing premises for use as its offices. As one of the leases will expire in March 2013, the Property is intended to be held by the Target Group for its own use as office. As the office of the Target Group forms an integral part of the business and operation of the Target Group, the Directors consider it appropriate and reasonable to proceed with the Acquisition including the buyback of the Property.

Pursuant to the undertaking letter given by PRC Co 2 to Shum Yip Terra dated 25 February 2013, PRC Co 2 has agreed that the sale and purchase of the Property under the Property Disposal Agreements shall be conditional upon the approval of the independent Shareholders at the EGM, and PRC Co 2 has irrevocably undertaken to Shum Yip Terra that in the event that the aforesaid shareholders’ approval is not obtained, PRC Co 2 shall enter into relevant termination agreement(s) and/or arrangements with Shum Yip Terra in connection with the termination of the Property Disposal Agreements to the effect that the Property Disposal Agreements will be terminated and will not be completed with the consideration of approximately RMB272.4 million being refunded to PRC Co 2 by Shum Yip Terra.

Further details in relation to the Property Disposal are contained in the announcement of the Company dated 25 February 2013 and a separate circular of the Company dated 28 March 2013.

– 14 –

LETTER FROM THE BOARD

If the Property Disposal is not approved by the independent Shareholders at the EGM, PRC Co 2 will have an additional cash amount of approximately RMB272.4 million, instead of the interests in the Property. In such case, upon Completion (subject to the fulfillment and/or waiver of all the conditions precedent set out in the Acquisition Agreement), PRC Co 2, which will be indirectly acquired by the Purchaser from Shum Yip Holdings under the Acquisition Agreement, will have no interests in the Property but the Property will be retained by the Group through Shum Yip Terra; and the only investment of PRC Co 2 will be the Target Site. If completion of the Property Disposal does not take place, the Target Group will either renew the existing lease or look for other appropriate premises for use as its office. The Directors consider that alternative premises can be secured as the Target Group’s office in a timely manner if the Property Disposal is not completed and the impact on business and operation of the Target Group is expected to be minimal.

If the Property Disposal is approved by the independent Shareholders at the EGM, the Acquisition will not be affected.

The Directors consider that the Property Disposal will not pose any impacts on the Consideration due to the following reasons:-

(i ) pursuant to the undertaking letter dated 25 February 2013 given by PRC Co 2 to Shum Yip Terra, in the event that the independent Shareholders’ approval is not obtained and the Property Disposal Agreements are terminated, the total consideration of the Property Disposal of approximately RMB272.4 million will be refunded to PRC Co 2 by Shum Yip Terra. The Directors expect the purchase price of the Property Disposal be refunded before Completion should the Property Disposal Agreements be terminated; and
( ii) according to the property valuation report issued by the independent property valuer, Asset Appraisal Limited, in connection with its valuation of the property interests held by the Target Group as set out in Appendix V to this circular, the valuation of the Property as at 31 December 2012 was RMB272.4 million, which is substantially the same as the total consideration of the Property Disposal. Therefore, whether or not independent Shareholders’ approval is obtained for the Property Disposal, the net asset value of the Target Group would remain the same with RMB272.4 million of which taking the form of either the Property or cash .

The Supplemental Acquisition Agreement

The Vendor has given an irrevocable undertaking in favour of the Company under the Supplemental Acquisition Agreement that if the approval for the Property Disposal by the independent Shareholders is not obtained at the EGM and the Property Disposal Agreements are terminated accordingly, the Vendor shall indemnify the Company against all losses, liabilities, taxation, costs and expenses payable or incurred by Shum Yip Terra as a result of such termination and indemnify the Company against all taxation, costs and expenses payable or incurred by PRC Co 2 (if becoming a subsidiary of the Company pursuant to the Acquisition Agreement) as a result of such termination.

– 15 –

LETTER FROM THE BOARD

Shareholding structure of the Target Group

Set out below are the shareholding structure charts of the Target Group (i) as at the Latest Practicable Date ; (ii) immediately after Completion (if the Property Disposal is not approved by the independent Shareholders at the EGM or has not yet been completed); and (iii) immediately after Completion (if the Property Disposal is approved by the independent Shareholders at the EGM and has been completed) (assuming that, in the cases of (ii) and (iii), there are no changes in the issued share capital of each of the companies other than changes as a result of the transactions contemplated under the Acquisition Agreement) respectively:

(i) As at the Latest Practicable Date

==> picture [205 x 334] intentionally omitted <==

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

Shum Yip Group
(PRC)
100%
The Vendor
(HK)
100%
The Target Company
(BVI)
100%
WFOE
(PRC)
100%
PRC Co 1
25%
(PRC)
75%
PRC Co 2
(PRC)
The Property
The Target Site
(Note)
----- End of picture text -----

Note: PRC Co 2 entered into the Property Disposal Agreements to acquire the Property at a total consideration of approximately RMB272.4 million. Completion of the Property Disposal is subject to independent Shareholders’ approval at the EGM and therefore, the Property Disposal may or may not be completed. The Property is currently legally and beneficially owned by Shum Yip Terra, a non-wholly owned subsidiary of the Company.

– 16 –

LETTER FROM THE BOARD

(ii) Immediately after Completion (if the Property Disposal is not approved by the independent Shareholders at the EGM or has not yet been completed)

==> picture [116 x 361] intentionally omitted <==

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

Shum Yip Group
(PRC)
100%
The Vendor
(HK)
59.7%
The Company
(HK)
100%
The Target Company
(BVI)
100%
WFOE
(PRC)
100%
PRC Co 1
25%
(PRC)
75%
PRC Co 2
(PRC)
The Target Site
(Note)
----- End of picture text -----

Note: In the event that independent Shareholders’ approval for the Property Disposal is not obtained by the Company, other than cash and receivables, the sole asset of the Target Group is the Target Site upon Completion.

– 17 –

LETTER FROM THE BOARD

(iii) Immediately after Completion (if the Property Disposal is approved by the independent Shareholders at the EGM and has been completed)

==> picture [181 x 374] intentionally omitted <==

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

Shum Yip Group
(PRC)
100%
The Vendor
(HK)
59.7%
The Company
(HK)
100%
The Target Company
(BVI)
100%
WFOE
(PRC)
100%
PRC Co 1
25%
(PRC)
75%
PRC Co 2
(PRC)
The Property
The Target Site
(Note)
----- End of picture text -----

Note: In the event that independent Shareholders’ approval is obtained for the Property Disposal by the Company, other than cash and receivables, the assets of the Target Group comprise the Target Site and the Property upon Completion and completion of the Property Disposal.

– 18 –

LETTER FROM THE BOARD

Financial information on the Target Group

Based on the accountants’ report of the Target Group prepared in accordance with Hong Kong Financial Reporting Standards as set out in Appendix IIA to this circular, the audited consolidated net assets of Target Group was approximately HK$2,448.6 million as at 31 December 2012. The following table shows the audited consolidated results of the Target Group for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012 as extracted from the accountants’ report of the Target Group set out in Appendix IIA to this circular:

	For the period
	from 20 April 2011
	(date of incorporation)	For the year ended
	to 31 December 2011	31 December 2012
	HK$ million	HK$ million
Revenue	–	–
Loss before taxation	26.0	85.2
Loss after taxation	20.0	64.4

Based on the accountants’ report of PRC Co 1 Group prepared in accordance with Hong Kong Financial Reporting Standards as set out in Appendix IIB to this circular, the audited consolidated net liabilities of PRC Co 1 Group was approximately HK$ 1,226.7 million as at 31 December 2012. The following table shows the audited consolidated results of PRC Co 1 Group for the three years ended 31 December 2012 as extracted from the accountants’ report of PRC Co 1 Group set out in Appendix IIB to this circular:

	For the	For the	For the
	year ended	year ended	year ended
	31 December	31 December	31 December
	2010	2011	2012
	HK$ million	HK$ million	HK$ million
Revenue	13.5	–	–
Loss before taxation	251.4	62.3	85.2
Loss after taxation	188.8	47.3	64.4

The total investment cost for the Target Group incurred by Shum Yip Group and the Vendor was approximately RMB 2. 9 billion.

– 19 –

LETTER FROM THE BOARD

As at 31 December 2012, the Shareholders’ Loan in a total amount of approximately RMB 5.03 billion (including interests) was owing by the Target Group to (i) Shum Yip Group and certain of its subsidiaries of approximately RMB 5.02 billion; and (ii) the Vendor of approximately RMB0.01 billion. Out of such RMB 5.03 billion Shareholders’ Loan, RMB2.81 billion principal amount carrying interests of 9.9% per annum are repayable from 30 October 2014 to 9 September 2015; and the remaining principal amounts of approximately RMB 1.84 billion carrying interest ranging from nil to the one-year benchmark lending rate of the People’s Bank of China are repayable on demand or within a year. Before Completion, RMB1.35 billion of the Shareholders’ Loan will be set off against a receivable of the same amount from Shum Yip Group and the balance of the Shareholders’ Loan will be approximately RMB 3.68 billion at Completion.

On 25 March 2013, each lender of the Shareholders’ Loan confirmed that, in the event that the Target Group does not have sufficient cash to satisfy its repayment obligations or by doing so may cause material adverse effect to its operations . it will extend the repayment date of the Shareholders’ Loan by entering into separate agreements, the timing of such repayment extention and the terms of which are to be agreed upon by the relevant parties of the Shareholder Loan based on the then prevailing circumstances and subject to normal commercial terms .

As at 31 December 2012 and the Latest Practicable Date, the Relevant Company Guarantee provided by PRC Co 2 was and remained valid and effective. Pursuant to the Acquisition Agreement, the Vendor has undertaken to procure the full and valid release of the Relevant Company Guarantee before Completion.

(E) REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in property development, property investment, property management, provision of transportation services and manufacturing and sale of industrial and commercial products. The Group is a property developer providing mid-high end products in southern China. As at 31 December 2012, the Group had land reserves of about 10.4 million sq. m. (GFA), of which 1.8 million sq. m. were under construction. The Group also held approximately 600,000 sq. m. (GFA) of investment properties at prime locations in Shenzhen.

As affected from the stringent austerity measures, the housing market in Shenzhen was still in downturn in 2011, with annual trading volume remained at a sluggish level of 2.7 million sq. m., and housing price declining substantially. As one of first-tier cities in the PRC, Shenzhen has clustered a large number of market-oriented enterprises with innovative ability, and has obvious competitiveness in terms of high and new technology, financial and high-end services industries. Shenzhen is one of the cities having the highest resident income in the PRC, with a resident population of 10.0 million. The increase in local resident income has driven the strong demand for consumption upgrading and robust demand for housing. These provide a wider development room for the real estate market in Shenzhen, especially the commercial property market which is fast growing. As such, the Directors have full confidence about the long term development potential and real estate market in Shenzhen.

The Group intends to finance the development of the Target Site by a combination of internal resources and banking facilities.

– 20 –

LETTER FROM THE BOARD

The Directors believe the Acquisition represents an excellent opportunity for the Group to increase its land bank in Shenzhen. The increase in land bank in Shenzhen is vital for the Group’s long-term development as the Directors believe that the demand for high quality properties in Shenzhen will continue to increase in the future as a result of its continuously improving economic environment. Following the Acquisition, the land bank of the Group (in terms of total GFA) will be increased by over 800,000 sq. m..

The Directors (excluding the members of the Takeovers Code IBC whose views are set out in the letter from the Takeovers Code IBC in this circular) are of the view that the Acquisition which replenishes the Group’s land bank, will further improve the profitability and facilitate the sustainable development of the Company in the long run, and that the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions thereunder are on normal commercial terms and the Acquisition and the Whitewash Waiver are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

(F) SHAREHOLDING STRUCTURES OF THE COMPANY

Set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately before the issue of the Consideration Shares (assuming either none or all of the outstanding Share Options will be exercised); and (iii) immediately after the issue of the Consideration Shares (assuming either none or all of the outstanding Share Options will be exercised), assuming that no Shares other than the Consideration Shares will be issued from the Latest Practicable Date until Completion:

The Vendor LU Hua (Note) MOU Yong (Note) Sub-total of the Vendor and its concert parties The Directors (excluding LU Hua and MOU Yong) LIU Chong WU Jiesi WONG Po Yan LI Wai Keung Public Shareholders Total	(i) As Latest Pract No. of Shares 1,655,211,234 1,038,829 – 1,656,250,063 – 3,534,767 3,534,767 1,087,145 2,064,608,666 3,729,015,408	at the icable Date % 44.4% 0.0% – 44.4% – 0.1% 0.1% 0.0% 55.4% 100.0%	(ii) Immediately b the Consider Assuming none of the outstanding Share Options will be exercised No. of shares % 1,655,211,234 44.4% 1,038,829 0.0% – – 1,656,250,063 44.4% – – 3,534,767 0.1% 3,534,767 0.1% 1,087,145 0.0% 2,064,608,666 55.4% 3,729,015,408 100.0%	efore the issue of ation Shares Assuming all outstanding Share Options (whether or not exercisable at the time of the issue of Consideration Shares) will be exercised No. of Shares % 1,655,211,234 43.4% 5,054,829 0.1% 4,016,000 0.1% 1,664,282,063 43.6% 4,016,000 0.1% 3,534,767 0.1% 3,534,767 0.1% 1,087,145 0.0% 2,144,138,666 56.1% 3,820,593,408 100.0%	(iii) Immediately the Consider Assuming none of the outstanding Share Options will be exercised No. of Shares % 3,065,328,496 59.7% 1,038,829 0.0% – – 3,066,367,325 59.7% – – 3,534,767 0.1% 3,534,767 0.1% 1,087,145 0.0% 2,064,608,666 40.1% 5,139,132,670 100.0%	after the issue of ation Shares Assuming all outstanding Share Options (whether or not exercisable at the time of the issue of Consideration Shares) will be exercised No. of Shares % 3,065,328,496 58.6% 5,054,829 0.1% 4,016,000 0.1% 3,074,399,325 58.8% 4,016,000 0.1% 3,534,767 0.1% 3,534,767 0.1% 1,087,145 0.0% 2,144,138,666 40.9% 5,230,710,670 100.0%	after the issue of ation Shares Assuming all outstanding Share Options (whether or not exercisable at the time of the issue of Consideration Shares) will be exercised No. of Shares % 3,065,328,496 58.6% 5,054,829 0.1% 4,016,000 0.1% 3,074,399,325 58.8% 4,016,000 0.1% 3,534,767 0.1% 3,534,767 0.1% 1,087,145 0.0% 2,144,138,666 40.9% 5,230,710,670 100.0%
							58.8% 0.1% 0.1% 0.1% 0.0% 40.9%
							100.0%

– 21 –

LETTER FROM THE BOARD

Note: Both Mr. LU Hua and Mr. MOU Yong, who are the Directors and also directors of the Vendor, are regarded as concert parties of the Vendor. The purpose of setting out the assumptions of all outstanding Share Options, as held by Mr. LU Hua and Mr. MOU Yong, will be exercised, is for illustrative purpose only. As Mr. LU Hua and Mr. MOU Yong are concert parties of the Vendor, they had each undertaken not to deal in the Shares or the securities of the Company before Completion.

(G) WHITEWASH WAIVER

The issue of the Consideration Shares to the Vendor will result in the increase in shareholding of the Vendor and its concert parties in the Company from approximately 44.4% to approximately 59.7% (assuming that no Shares other than the Consideration Shares will be issued from the Latest Practicable Date until Completion). Accordingly, such an increase will give rise to an obligation under Rule 26 of the Takeovers Code for the Vendor to make a mandatory general offer under Rule 26 of the Takeovers Code for all the Shares and other securities issued by the Company not already held or agreed to be acquired by the Vendor and its concert parties unless the Whitewash Waiver is obtained.

Paragraph 3 of Schedule VI of the Takeovers Code provides that the Executive will not normally waive an obligation under Rule 26 if there occurs any disqualifying transaction for such a waiver. Disqualifying transactions include, among others, a situation where the person seeking a waiver or any person acting in concert with him has acquired voting rights in the relevant company in the six months immediately prior to the announcement of the proposals but subsequent to negotiations, discussions or the reaching of understandings or agreements with the directors of such company in relation to the relevant proposal.

On 27 August 2012, the Company announced that the Board resolved to recommend/declare an interim dividend of HK$0.07 per Share for the six months ended 30 June 2012 (the “ Interim Dividend ”) to the Shareholders in the form of new fully-paid Shares (the “ Scrip Shares ”) with the Shareholders being given the option to receive cash in lieu of all or part of their Scrip Shares entitlements. During the period from 18 July 2012 (being the first day of the six month period preceding the date of the Acquisition Agreement) to the Latest Practicable Date (the “ Relevant Disqualifying Transaction Period ”), the Company issued and allotted an aggregate of 102,991,104 Scrip Shares on or about 14 November 2012, as part of the distributions of the Interim Dividend, to the Shareholders, including 63,125,817 Scrip Shares to the Vendor and its concert parties.

– 22 –

LETTER FROM THE BOARD

Save as disclosed above, during the Relevant Disqualifying Transaction Period, the Vendor and its concert parties had not acquired or been deemed to have acquired, any voting rights in the Company.

Although there were acquisitions of the Scrip Shares by the Vendor and its concert parties during the Relevant Disqualifying Transaction Period, all of these transactions occurred prior to any negotiation, or discussion, or reaching of any understanding or agreement between the Company and the Vendor on the Acquisition. The Directors confirm that at such relevant times, neither the Company, nor any of its Directors was in contemplation of the Acquisition and/or the transactions contemplated therein.

The Vendor confirms that, save for the entering into of the Acquisition Agreement, the Vendor and its concert parties have not and will not acquire or dispose of any Shares in the period between the date of the Acquisition Agreement and the date of Completion.

An application will be made by the Vendor to the Executive for the Whitewash Waiver pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the Executive, will be subject to, among other things, the approval of the Independent Shareholders at the EGM. The Vendor and its associates and concert parties and Shareholders who are involved in or interested in the Acquisition and/or the Whitewash Waiver will abstain from voting on the resolution s to approve the Acquisition and the Whitewash Waiver to be proposed at the EGM.

It is one of the conditions of the Acquisition Agreement that the Whitewash Waiver be granted by the Executive and be approved by the Independent Shareholders at the EGM. If the Whitewash Waiver is not granted by the Executive or not approved by the Independent Shareholders, the Acquisition will not proceed.

The Directors (excluding the members of the Takeovers Code IBC whose views are set out in the letter from the Takeovers Code IBC in this circular ) believe that the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the Whitewash Waiver are fair and reasonable as far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

Upon Completion, it is the intention of the Vendor and its concert parties to continue the existing business and the employment of the existing employees of the Group. The Vendor and its concert parties have no intention to introduce any major changes to the business, including any redeployment of the fixed assets of the Group.

– 23 –

LETTER FROM THE BOARD

(H) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

The authorised share capital of the Company is HK$250,000,000 comprising 5,000,000,000 Shares, of which 3,729,015,408 Shares were in issue as at the Latest Practicable Date. For the purpose of the Acquisition, the Board proposes to increase the authorised share capital of the Company from HK$250,000,000 to HK$500,000,000 by the creation of an additional 5,000,000,000 unissued Shares which rank pari passu in all respects with the existing Shares in the capital of the Company. The increase in authorised share capital of the Company is subject to the approval by an ordinary resolution of the Shareholders, which is proposed to be sought at the EGM.

(I) LISTING RULES AND TAKEOVERS CODE IMPLICATIONS

Listing Rules implications

As one or more of the relevant percentage ratios applicable to the Company exceeds 25% but all of them are less than 100%, the Acquisition constitutes a major transaction for the Company under Chapter 14 of the Listing Rules.

As at the Latest Practicable Date, the Target Company was wholly owned by the Vendor, the direct controlling shareholder of the Company holding approximately 44.4% interest in the issued share capital of the Company. The Vendor is therefore a connected person of the Company. Accordingly, the Acquisition constitutes a connected transaction for the Company and is subject to the reporting, announcement and the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

None of the Directors has a material interest in the Acquisition for which he shall be required to abstain from voting on the board resolution approving the Acquisition . Notwithstanding the fact that Mr. LU Hua, Mr. MOU Yong and Mr. HUANG Yige are directors of the Vendor and Shum Yip Group and Mr. LIU Chong and Mr. WANG Minyuan are the vice presidents of the Vendor and Shum Yip Group, each of such Directors does not have a material interest in the Acquisition for which he shall be required to abstain from voting on the board resolution approving the Acquisition pursuant to the Company’s articles of association, as none of them is beneficially interested in any shares in the Vendor or Shum Yip Group or has any personal interest in the Acquisition. Furthermore, the Acquisition is subject to the approval of the Independent Shareholders. The Company wishes to clarify that in respect of the Group’s acquisition of interests in a company from the Vendor’s subsidiary as disclosed in the announcement of the Company dated 27 July 2012, Mr. LU Hua, Mr. MOU Yong, Mr. HUANG Yige and Mr. LIU Chong abstained from voting on the board resolution approving such transaction on a voluntary basis in light of their then directorship or office in the Vendor considering that such acquisition was not required to be approved by the independent Shareholders. The Company was then in fact taking a cautious approach.

– 24 –

LETTER FROM THE BOARD

The Vendor and its associates and concert parties and Shareholders who are involved in or interested in the Acquisition and/or the Whitewash Waiver will abstain from voting in respect of the resolution approving the Acquisition to be proposed at the EGM. As at the Latest Practicable Date, none of the associates of the Vendor held any interests in the Shares.

In compliance with the Listing Rules, the Listing Rules IBC has been established to consider the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and advise the Independent Shareholders as to whether the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable as far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole and to give its recommendation as to the voting in respect of the resolution to be proposed at the EGM for approving the Acquisition, after taking into account the recommendation of the independent financial adviser. CIMB has been appointed as the independent financial adviser to advise the Listing Rules IBC and the Independent Shareholders in the same regard.

Takeovers Code implications

The issue of the Consideration Shares to the Vendor will result in the increase in shareholdings of the Vendor and its concert parties in the Company from approximately 44.4% to approximately 59.7% (assuming that no Shares will be issued from the Latest Practicable Date until Completion). Accordingly, such an increase will give rise to an obligation under Rule 26 of the Takeovers Code for the Vendor to make a mandatory general offer under Rule 26 of the Takeovers Code for all the Shares and other securities issued by the Company not already held or agreed to be acquired by the Vendor and its concert parties unless the Whitewash Waiver is obtained.

An application will be made by the Vendor to the Executive for the Whitewash Waiver pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the Executive, will be subject to, among other things, the approval of the Independent Shareholders at the EGM. The Vendor and its associates and parties acting in concert with it and Shareholders who are involved in or interested in the Acquisition and/or the Whitewash Waiver will abstain from voting on the resolution to approve the Whitewash Waiver to be proposed at the EGM.

In compliance with Rule 2.8 of the Takeovers Code, the Takeovers Code IBC has been established to consider the terms of the Acquisition and the Whitewash Waiver, and advise the Independent Shareholders as to whether the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the Whitewash Waiver are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole and whether the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) are on normal commercial terms and to give its recommendation as to the voting in respect of the resolutions to be proposed at the EGM for approving the Acquisition and the Whitewash Waiver, after taking into account the recommendation of the independent financial adviser. CIMB has been appointed as the independent financial adviser to advise the Takeovers Code IBC and the Independent Shareholders in the same regard. The Takeovers Code IBC has included all non-executive Directors with the exception of one non-executive Director, namely Mr. HUANG Yige, as he is a party acting in concert with the Vendor.

– 25 –

LETTER FROM THE BOARD

Completion is subject to the satisfaction and/or waiver of the conditions precedent under the Acquisition Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

Based on the shareholding structure of the Company as at the Latest Practicable Date and assuming no other change in the issued share capital and shareholding structure of the Company from the Latest Practicable Date up to Completion save for the issue of the Consideration Shares, upon Completion, the Vendor and its concert parties will in aggregate hold more than 50% of the total voting rights of the Company. The Vendor and its concert parties may thereafter increase its holding of Shares without incurring any further obligation to make a general offer under Rule 26 of the Takeovers Code.

(J) FINANCIAL EFFECTS OF THE ACQUISITION

Upon Completion, the Target Company, WFOE, PRC Co 1 and PRC Co 2 will become indirect wholly-owned subsidiaries of the Company and their results will be consolidated into the Group’s consolidated financial statements. The unaudited pro forma financial information of the Enlarged Group illustrating the financial impact of the Acquisition on the assets and liabilities of the Group ( assuming the Acquisition had been completed on 31 December 2012) is set out in Appendix III to this circular. Based on the annual results announcement for the year ended 31 December 2012 , as at 31 December 2012, the Group had total assets of approximately HK$ 54.4 billion, total liabilities of approximately HK$ 34.9 billion, net current assets of approximately HK$ 14.9 billion and a gearing ratio (calculated by dividing total liabilities by total assets) of approximately 64.2%. Based on the unaudited pro forma statement of financial position of the Enlarged Group (assuming the Acquisition had been completed on 31 December 2012) as set out in Appendix III to this circular, as at 31 December 2012, the Enlarged Group would have total assets of approximately HK$ 68.0 billion, total liabilities of approximately HK$ 43.3 billion, net current assets of approximately HK$ 22.7 billion and a gearing ratio (calculated by dividing total liabilities by total assets) of approximately 63. 7%. Based on the aforesaid figures, the net current assets will be increased by approximately 52.3% while gearing ratio of the Group will be slightly improved upon Completion .

In light of the potential future prospects offered by the Acquisition as stated in the section headed “Reasons for and benefits of the Acquisition” above, the Directors are of the view that the Acquisition will likely to contribute positively to the Enlarged Group. Nevertheless, the actual effect on earnings/(losses) of the Company will depend on the future financial performance of the Target Group.

– 26 –

LETTER FROM THE BOARD

It is also worthwhile noting that since the assets and liabilities of the Target Group will be recognised in the consolidated statement of financial position of the Company at fair value at Completion. In the event that the then fair value of the consolidated net assets of the Target Group at Completion is different from the then fair value of the Consideration, a goodwill or gain on bargain purchase (as the case may be) may arise as a result of the Acquisition. If the then fair value of the Consideration exceeds the then fair value of the consolidated net assets of the Target Group at Completion, the excess amount will be recognised as goodwill arising from the Acquisition. Vice versa, if the then fair value of the consolidated net assets of the Target Group at Completion exceeds the corresponding then fair value of the Consideration, the excess amount will be recognised as gain on bargain purchase in the profit and loss account of the Group. The final amounts of goodwill or gain on bargain purchase will be determined, and subject to audit, upon Completion based on the then fair value of the consolidated net assets of the Target Group and the then fair value of the Consideration.

The Company will engage an independent valuer to determine the fair value of the Target Site as at the Completion Date. If goodwill arises from Completion , the impairment of goodwill in the current or subsequent financial periods may materially affect the financial results and financial position of the Enlarged Group. The fair value of the Consideration, which is dependent on the then prevailing Share price , and the fair value of the Target Site will be determined on the Completion Date. As such, the actual goodwill (if any) will be determined at Completion , and will be accounted for in accordance with the accounting policies of the Enlarged Group.

The accounting policies also require that goodwill be tested for impairment on an annual basis or more frequently if there is any indication of impairment. Where the recoverable amount of the Target Group is less than its carrying amount, an impairment loss is recognised. The recoverable amount of the Target Group is determined based on a value-in-use calculation using cash flow projections based on financial budgets covering a five-year period approved by the Directors. The key assumptions used in the value-in-use calculations include growth rates and discount rates which are based on management’s best estimates.

The Company will adopt consistent accounting policies and key assumptions to assess the impairment of the Enlarged Group’s goodwill when preparing future final results. As part of the audit of the consolidated financial statements of the Enlarged Group, the auditors of the Company will review the consistency of accounting policies applied by the Company in its assessment of the impairment of the Enlarged Group’s goodwill (if any).

Please also refer to Appendix III to this circular for further details.

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LETTER FROM THE BOARD

( K) RE-ELECTION OF RETIRING DIRECTOR

The Board currently consists of nine Directors, namely Mr. LU Hua (Chairman), Mr. MOU Yong, Mr. LIU Chong, Mr. WANG Minyuan, Dr. WU Jiesi, Mr. HUANG Yige, Mr. WONG Po Yan, Mr. WU Wai Chung, Michael and Mr. LI Wai Keung.

In accordance with Article 92 of the Articles of Association, Mr. WANG Minyuan will hold office as Director only until the first general meeting following his appointment by the Board with effect from 28 September 2012 and, being eligible, he has offered himself for re-election at the EGM.

Details of Mr. WANG Minyuan who is proposed to be re-elected as Director at the EGM are set out in Appendix VI to this circular.

(L) EGM

Set out on pages EGM – 1 to EGM – 5 is a notice convening the EGM to be held at Garden Room, 2nd Floor, Hotel Nikko, Hong Kong, 72 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong at 10:00 a.m. Thursday, 18 April 2013 at which ordinary resolutions will be proposed to consider and, if thought fit, approve the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions contemplated thereunder (including the issuance of the Consideration Shares), the Whitewash Waiver , the increase in authorised share capital of the Company , the Property Disposal and to re-elect Mr. WANG Minyuan as a director of the Company. Further details of the Property Disposal are contained in a separate circular of the Company dated 28 March 2013.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same with 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 less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish. Voting on the proposed resolutions at the EGM will be taken by poll.

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LETTER FROM THE BOARD

(M) RECOMMENDATIONS

Your attention is drawn to the letters from the Takeovers Code IBC and the Listing Rules IBC to the Independent Shareholders set out on pages 31 to 32 and 33 to 34 of this circular and the letter from CIMB on pages 35 to 56 of this circular which contains their advice to the Takeovers Code IBC and the Listing Rules IBC and the Independent Shareholders regarding the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and, where applicable, the Whitewash Waiver as well as the principal factors and reasons taken into consideration in arriving at their advice.

The Directors (excluding the members of the Takeovers Code IBC and the members of the Listing Rules IBC whose views are respectively set out in their letters mentioned above) consider that the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the Whitewash Waiver are fair and reasonable as far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole and the Directors consider that the increase in the authorised share capital of the Company , and the re-election of Mr. WANG Minyuan as director of the Company are in the interests of the Company and the Shareholders as a who le. Accordingly, the Directors (excluding the members of the Takeovers Code IBC and the members of the Listing Rules IBC whose views are respectively set out in their letters mentioned above) recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM to approve the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions contemplated thereunder (including the issuance of the Consideration Shares) and the Whitewash Waiver . You are advised to read the letters from the Takeovers Code IBC and the Listing Rules IBC and the letter from CIMB mentioned above before deciding how to vote on such resolutions to be proposed at the EGM. Also, the Directors recommend the Shareholders to vote in favour of the resolutions to be proposed at the EGM to approve the increase in the authorised share capital of the Company and to re-elect Mr. WANG Minyuan as Director.

Please refer to a separate circular of the Company dated 28 March 2013 relating to the recommendation on the voting in respect of the resolution to be proposed at the EGM to approve the Property Disposal.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

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

Yours faithfully, For and on behalf of the Board of Shenzhen Investment Limited

LU Hua Chairman

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LETTER FROM THE TAKEOVERS CODE IBC

The following is the text of the letter of recommendation from the Takeovers Code IBC to the Independent Shareholders in relation to the Acquisition and the Whitewash Waiver prepared for the purpose of incorporation in this circular.

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

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00604)

28 March 2013

To the Independent Shareholders

Dear Sir or Madam,

(1) MAJOR AND CONNECTED TRANSACTION IN RELATION TO ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF A COMPANY INDIRECTLY HOLDING A LAND SITE IN SHENZHEN, THE PEOPLE’S REPUBLIC OF CHINA INVOLVING THE ISSUE OF CONSIDERATION SHARES; AND (2) APPLICATION FOR WHITEWASH WAIVER

We refer to the circular of the Company on the even date (the “ Circular ”), of which this letter forms part. Unless the context requires otherwise, capitalised terms used herein shall have the same meanings as those defined in the Circular.

We have been appointed by the Board as members of the Takeovers Code IBC to advise you on the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the Whitewash Waiver. CIMB has been appointed as the independent financial adviser to advise you and us in this regard. Details of their advice, together with the principal factors and reasons they have taken into consideration in giving such advice, are set out on pages 35 to 56 of the Circular. Your attention is also drawn to the “Letter from the Board” in the Circular and the additional information set out in the appendices thereto.

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LETTER FROM THE TAKEOVERS CODE IBC

Having considered the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the Whitewash Waiver, and taking into account the advice of CIMB, in particular the principal factors, reasons and recommendation as set out in their letter, we consider that the entering into of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the performance of the transactions contemplated thereunder (including the issuance of the Consideration Shares) and the Whitewash Waiver are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole, and the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) are on normal commercial terms . We therefore recommend you to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions contemplated thereunder (including the issuance of the Consideration Shares) and the Whitewash Waiver.

Dr. WU Jiesi Non-executive Director

Yours faithfully, Takeovers Code IBC Mr. WU Wai Chung, Mr. WONG Po Yan Michael Mr. LI Wai Keung Independent non-executive Director

– 32 –

LETTER FROM THE LISTING RULES IBC

The following is the text of the letter of recommendation from the Listing Rules IBC to the Independent Shareholders in relation to the Acquisition prepared for the purpose of incorporation in this circular.

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 00604)

28 March 2013

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION IN RELATION TO ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF A COMPANY INDIRECTLY HOLDING A LAND SITE IN SHENZHEN, THE PEOPLE’s REPUBLIC OF CHINA INVOLVING THE ISSUE OF CONSIDERATION SHARES

We have been appointed by the Board as members of the Listing Rules IBC to advise you on the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement). CIMB has been appointed as the independent financial adviser to advise you and us in this regard. Details of their advice, together with the principal factors and reasons they have taken into consideration in giving such advice, are set out on pages 35 to 56 of the Circular. Your attention is also drawn to the “Letter from the Board” in the Circular and the additional information set out in the appendices thereto.

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LETTER FROM THE LISTING RULES IBC

Having considered the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement), and taking into account the advice of CIMB, in particular the principal factors, reasons and recommendation as set out in their letter, we consider that the entering into of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the performance of the transactions contemplated thereunder (including the issuance of the Consideration Shares) are in the interests of the Company and the Shareholders as a whole, and the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. We therefore recommend you to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) and the transactions contemplated thereunder .

Yours faithfully,

Mr. WONG Po Yan

Listing Rules IBC Mr. WU Wai Chung, Michael Mr. LI Wai Keung

Independent non-executive Directors

– 34 –

LETTER FROM CIMB

==> picture [56 x 44] intentionally omitted <==

Units 7706-08, Level 77 International Commerce Centre 1 Austin Road West Kowloon, Hong Kong

28 March 2013

To the Listing Rules IBC;

the Takeover Codes IBC; and the Independent Shareholders

Dear Sirs,

MAJOR AND CONNECTED TRANSACTION; AND APPLICATION FOR WHITEWASH WAIVER

INTRODUCTION

We refer to our engagement as the independent financial adviser to the Listing Rules IBC, Takeovers Code IBC and the Independent Shareholders in respect of the terms of the Acquisition Agreement (and the transactions contemplated thereunder) and the Whitewash Waiver, details of which are contained in a circular issued by the Company (the “ Circular ”) to the Shareholders dated 28 March 2013, of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular and Letter from the Board (as defined hereinafter) unless the context otherwise requires.

The Listing Rules IBC, comprising Mr. WONG Po Yan, Mr. WU Wai Chung, Michael and Mr. LI Wai Keung, being all the independent non-executive Directors, has been formed to advise the Independent Shareholders in relation to terms of the Acquisition Agreement and the transactions contemplated thereunder. The Takeovers Code IBC, comprising Dr. WU Jiesi, being the non-executive Director, and Mr. WONG Po Yan, Mr. WU Wai Chung, Michael and Mr. LI Wai Keung, being the independent non-executive Directors, has been formed to advise the Independent Shareholders in relation to terms of the Acquisition Agreement as amended and supplemented by the Supplemental Acquisition Agreement (and the transactions contemplated thereunder) and the Whitewash Waiver.

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LETTER FROM CIMB

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular as well as the representations made or provided by the Directors and senior management of the Company. The Directors have declared in a responsibility statement contained in the Circular that they collectively and individually accept full responsibility and comply with the Listing Rules and Takeovers Code for the purpose of giving information in relation to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters, the omission of which would make any statement herein or the Circular misleading. We have also assumed that the information and the representations made as contained or referred to in the Circular were true and accurate at the time they were made and continue to be so at the date of the despatch of the Circular. Shareholders will be informed as soon as reasonably practicable after we have become aware of any material change to the above during the period from the date of the Circular and up to the time of the EGM. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and senior management of the Company.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or the prospects of the Group or the Target Group or any of their respective subsidiaries or associates. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any shares or any other securities of the Company. In rendering this opinion, we have not provided legal, tax, accounting or actuarial advice and accordingly we do not assume any responsibility or liability in respect thereof.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion for the Acquisition Agreement as amended and supplemented by the Supplemental Acquisition Agreement (and the transactions contemplated thereunder) and the Whitewash Waiver relating thereto, we have considered the following principal factors and reasons:

1. Background of the Acquisition

On 22 January 2013, the Board announced that on 17 January 2013 (after trading hours), the Company and the Vendor, a direct controlling Shareholder of the Company, entered into the Acquisition Agreement pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the entire issued share capital of the Target Company. Details of the Acquisition Agreement are set out in the letter from the Board (the “ Letter from the Board ”) in the Circular.

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LETTER FROM CIMB

On 25 February 2013, PRC Co 2 executed an undertaking letter to Shum Yip Terra pursuant to which PRC Co 2 has irrevocably undertaken to Shum Yip Terra that in the event that the independent Shareholders’ approval for the Property Disposal is not obtained, PRC Co 2 shall enter into relevant termination agreement(s) and/or arrangements with Shum Yip Terra to the effect that the Property Disposal Agreements will be terminated and will not be completed with the consideration of approximately RMB272.4 million being refunded to PRC Co 2 by Shum Yip Terra. PRC Co 2 will have no interests in the Property but will have an additional cash amount of RMB272.4 million, being the prepayment of the entire consideration made for the Property. Also on 25 February 2013, the Company and the Vendor entered into the Supplemental Acquisition Agreement pursuant to which the Vendor has given an irrevocable undertaking in favour of the Company that if the approval for the Property Disposal is not obtained at the EGM and the Property Disposal Agreements are terminated accordingly, the Vendor shall provide indemnities to the Company against the losses incurred by Shum Yip Terra and taxation and costs incurred by PRC Co 2 (upon PRC Co 2 becoming a subsidiary of the Company pursuant to the Acquisition Agreement) as a result of such termination.

The Target Company was incorporated in the BVI and, through its wholly-owned subsidiaries established in the PRC, holds the entire interest in the Target Site. The principal asset of the Target Group is the Target Site, which is located at the junction of Caitian Road and Sungang Road, Futian District, Shenzhen City, Guangdong Province, the PRC and is held through PRC Co 2. At present, save for the investment in the Target Site, the prepayment made for the Property and the Shareholders’ Loan, the Target Group has no other material assets and liabilities and members of the Target Group has not conducted any business activities since their incorporation or establishment. If the Property Disposal Agreements are terminated, the Target Group will have no interests in the Property but will have an additional cash amount of approximately RMB272.4 million (being the amount of the prepayment of the entire consideration made for the Property). Upon Completion, the Target Company, WFOE, PRC Co 1 and PRC Co 2 will become wholly-owned subsidiaries of the Company.

2. Reasons for and benefits of the Acquisition

(i) Principal business of the Group

The Group is principally engaged in property development, property investment, property management, provision of transportation services and manufacturing and sale of industrial and commercial products. The Group is a property developer providing mid-high end products in southern PRC. We note from the annual report of the Company for the year ended 31 December 2011 (the “ 2011 Annual Report ”) that the Group intends to focus its resources in the development of its real estate business in Shenzhen as the increase in local resident income has driven strong demand for housing and consumption upgrading, and one of the methods

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LETTER FROM CIMB

in which the Group intends to achieve this is by acquiring high quality assets from its parent companies. As stated in the Letter from the Board, the Directors have full confidence about the long term development potential of the real estate market in Shenzhen.

The Target Site is divided into the northern portion and the southern portion. The northern portion is planned to be developed into a residential area with apartments in 4 blocks of buildings, all of which are intended to be for sale. The southern portion is planned to be developed into three main areas, namely office, hotel and commercial services facilities. 70% of the office area is intended to be for sale while the hotel and commercial services facilities are currently intended for leasing. In addition, a total of 5,400 car parking spaces shall be provided in the basement of the subject development. Construction work for the northern portion of the Target Site is currently underway and completion is expected by end of 2014. Following the Acquisition, the land bank of the Group (in terms of total GFA) will be increased by over 800,000 sq. m.. As disclosed in the Letter from the Board, the Group intends to finance the development of the Target Site by a combination of internal resources and banking facilities.

PRC Co 2 entered into the Property Disposal Agreements with Shum Yip Terra, a non-wholly owned subsidiary of the Company, to acquire the Property from Shum Yip Terra at a total consideration of approximately RMB272.4 million. Payment of such consideration has been made and the transfer of the title of the Property is expected to complete by 30 June 2013. The Property Disposal constitutes a connected transaction of the Company and is still subject to independent Shareholders’ approval. The Property is for industrial use and is intended to be held by the Target Group for use as its office as one of the leases of the Target Group will expire in March 2013. As the office of the Target Group forms an integral part of the business and operation of the Target Group, the Directors consider it appropriate and reasonable to proceed with the Acquisition including the buyback of the Property. Pursuant to the undertaking letter given by PRC Co 2 to Shum Yip Terra dated 25 February, 2013, PRC Co has irrevocably undertaken to Shum Yip Terra that in the event that the independent Shareholders’ approval for the Property Disposal is not obtained, PRC Co 2 shall enter into relevant termination agreement(s) and/or arrangements with Shum Yip Terra to the effect that the Property Disposal Agreements will be terminated and will not be completed with the consideration of approximately RMB272.4 million being refunded to PRC Co 2 by Shum Yip Terra. In such case, upon Completion, PRC Co 2, which will be indirectly acquired by the Purchaser from Shum Yip Holdings under the Acquisition Agreement, will have no interests in the Property but the Property will be retained by the Group through Shum Yip Terra; and the only investment of PRC Co 2 will be the Target Site. Given that valuation of the Property as at 31 December 2012 is substantially the same as the total consideration of the Property Disposal, we concur with the Directors’ view that whether or not independent Shareholders’ approval is

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LETTER FROM CIMB

obtained for the Property Disposal, the net asset value of the Target Group would remain the same with RMB272.4 million taking the form of either the Property or cash and hence would not have any significant impact on the Consideration.

In view of the above, we consider that the Acquisition is in line with the Group’s principal business, and concur with the view of management of the Company that the Acquisition allows the Group to expand its portfolio of development projects and land bank in Shenzhen and its revenue base.

(ii) Overview of the economic development and the property market in Shenzhen, the PRC

We have reviewed information sourced from National Bureau of Statistics of China and Shenzhen Statistical Bureau in respect of the economic development and the property market in Shenzhen, the PRC, where the Target Site and the Property are located.

Shenzhen is a major city of the Guangdong Province. According to the Shenzhen Statistical Bureau, during the period between 2005 and 2012, the city recorded a strong growth in its nominal gross domestic product (“ GDP ”), which grew to approximately RMB1,295 billion in 2012 compared to approximately RMB493 billion in 2005, representing a compound annual growth rate (“ CAGR ”) of approximately 14.8%; and the GDP per capita disposable income (based on the resident population) increased from approximately RMB21,494 in 2005 to approximately RMB40,742 in 2012 with a CAGR of 9.6%.

According to the Shenzhen Statistical Bureau, the total investment fulfilled in fixed assets（固定資產投資完成額）of the city increased to approximately RMB231 billion in 2012, representing a CAGR of 12.3% as compared to that of 2010; and annual disposable income per capita of households of the city was approximately RMB40,742 in 2012 with a growth rate of 11.6% over the previous year.

The city continued to attract foreign capital and witnessed a growth in its foreign investments in terms of number and value. According to the Shenzhen Statistical Bureau, there was approximately 2,513 newly signed foreign direct investment projects in 2011, and contracted foreign capital reached USD7.6 billion in 2011, representing an increase of approximately 30.3% and 35.1%, respectively compared to the previous year. The domestic consumer goods market continued to expand, with the total retail consumption sales amounting to approximately RMB352 billion in 2011, representing a year-over-year growth of 17.8%.

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LETTER FROM CIMB

In respect of Shenzhen’s property market, according to the Shenzhen Statistical Bureau, the total fulfilled investment of real estate（房地產開發投資完成金額）of the city amounted to approximately RMB59 billion in 2011, representing a growth rate of 28.7% over the previous year; the construction floor area of commodity housing was approximately 30.8 million sq. m. in 2011, increased by 4.8% as compared to the previous year; while the completed floor area of commodity housing was approximately 3.4 million sq. m. in 2011, representing a small decrease of 0.3% compared to the previous year.

Taking into account the above, including the local economic development in Shenzhen, we concur with the view of management that there is continued growth potential of the property market in Shenzhen in the future.

In respect of the economy in the PRC, according to the National Bureau of Statistics of China, GDP of the PRC in 2012 reached RMB51.9 trillion on nominal terms, representing a year-over-year increase of 7.8%; the per capita disposable income of urban households increased from RMB10,493 in 2005 to RMB24,565 in 2012 with a CAGR of 13.0%; and the urban population increased from 562.1 million in 2005 to 711.8 million in 2012, representing a CAGR of 3.4%.

Taking into account the above, we are of the view that the fundamental growth drivers of the PRC property market, including, among others, the overall growth of the PRC’s economy, increases in disposable income and rapid urbanization, remain positive. However, the stringent austerity measures to cool down the property market from the PRC government are expected to continue to affect the property market in the PRC going forward.

(iii) Information on the Target Group

As stated in the Letter from the Board, the Target Company is principally an investment holding company and, through its wholly-owned subsidiaries established in the PRC, holds the entire interest in the Target Site. The principal asset of the Target Group is the Target Site. The total investment cost for the Target Group incurred by Shum Yip Group and the Vendor was approximately RMB2 billion. Save for the investment in the Target Site, the prepayment made for the Property and the Shareholders’ Loan, the Target Group has no other material assets and liabilities.

– 40 –

LETTER FROM CIMB

As stated in the valuation report prepared by an independent third party valuer (“ Valuer ”) set out in Appendix V to the Circular (the “ Valuation Report ”), the Target Site comprises a parcel of land situated in Shenzhen with a total area of approximately 121,225 sq. m. which is subdivided into the northern portion and the southern portion with respective areas of approximately 25,105 sq. m. and 96,120 sq. m.. The northern portion of the Target Site is planned to be developed into 4 blocks of apartment tower, all of which are intended to be for sale, with a total GFA of approximately 170,720 sq. m., comprising an apartment area of approximately 168,790 sq. m. and other area of approximately 1,930 sq. m.. The southern portion of the Target Site is planned to be developed into a retail/hotel/research and development complex with a total GFA of approximately 650,190 sq. m., comprising a research and development area of approximately 432,760 sq. m., hotel area of approximately 50,000 sq. m., retail area (including basement) of approximately 167,000 sq. m., and other area of approximately 430 sq. m.. Based on the Valuation Report, the market value of the Target Site as at 31 December 2012 was RMB10,300 million. In addition, a total of 5,400 car parking spaces shall be provided in the basement of the Target Site. As at the Latest Practical Date, construction work for the northern portion of the Target Site has commenced and the 4 apartment towers are scheduled for completion by the end of year 2014.

As set out in the accountants’ report of the Target Group in Appendix IIA to the Circular, the Target Group had audited net assets, total assets and total liabilities of approximately HK$2.4 billion (approximately RMB 2.0 billion), HK$8.8 billion (approximately RMB7. 0 billion) and HK$6.3 billion (approximately RMB5.1 billion), respectively as at 31 December 2012. The total assets mainly comprised the Target Site and the prepayment for the Property of approximately HK$6. 9 billion in aggregate and the total liabilities mainly comprised the Shareholder’s Loan of approximately RMB 5.0 billion (including interests) (approximately HK$6.2 million) owed by the Target Group to the Vendor and Shum Yip Group and certain of its subsidiaries, which, before Completion, approximately RMB1.3 4 billion (approximately HK$1.7 million) of the Shareholder’s Loan will be set off against a receivable of the same amount from Shum Yip Group and the balance of the Shareholder’s Loan will be approximately RMB 3.68 billion (approximately HK$4.5 million) at Completion. Such amount will be assigned to the Company upon Completion.

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LETTER FROM CIMB

(iv) Our view

Considering that (i) the Acquisition is in line with the Group’s principal business and allows it to expand its portfolio of development projects and land bank in Shenzhen and its revenue base; (ii) the long term prospects of the PRC property market; and (iii) the fairness of the terms of the Acquisition Agreement (which is further elaborated below), we are of the view that the Acquisition is in the interests of the Company and the Independent Shareholders.

3. Major terms of the Acquisition Agreement

(i) Consideration

The Acquisition Agreement stipulates that the Consideration shall be RMB4,150.0 million (equivalent to approximately HK$5,170.9 million).

As stated in the Letter from the Board, the Consideration was determined after arm’s length negotiation between the Purchaser and the Vendor. The Consideration represents a discount of approximately 11.6 % to the adjusted net asset value of the Target Group as at 31 December 2012 of approximately RMB 4,696.6 million (the “ Adjusted NAV ”). The Adjusted NAV was calculated by the audited net asset value of the Target Group of approximately HK$ 2,448.6 million (approximately RMB 1,965.2 million) as at 31 December 2012 having adjusted for (i) the valuation of the Target Site as at 31 December 2012, using the direct comparison valuation method, in the amount of HK$ 10,300 million (representing approximately RMB 5,045.4 million appreciation in valuation of the Target Site as at 31 December 2012 over the original land cost of the Target Site (the “ Appreciation Amount ”) based on the valuation report of the property interests of the Target Group set out in Appendix V to the Circular); and (ii) the estimated potential land appreciation tax (“ LAT ”) under the relevant PRC laws and regulations that may be payable by PRC Co 2 upon disposal of the Target Site, being the difference of the LAT based on the Consideration and the land cost of the Target Site, which is calculated with reference to (a) the prevailing tax rates; (b) the projected sales proceeds from the sale of properties to be developed; and (c) the projected allowable cost deductions. The Adjusted NAV will not be affected by whether the Property Disposal Agreements will proceed to completion or will be terminated as the Adjusted NAV has already taken into account the Target Group’s prepayment for the Property, which is identical to the valuation for the Property as set out in the Valuation Report.

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LETTER FROM CIMB

In reviewing the calculation the Adjusted NAV, we have h eld discussions with the management of the Company and the Valuer. In particular, we note that in performing the valuation for the Target Site and the Property, the Valuer has adopted the market approach by making reference to the comparable properties in the relevant locality. Comparable properties of similar size, character and location are analysed and carefully selected of each property in order to arrive at a fair comparison of capital values. We have also been advised by the Valuer that given the particulars of the Target Site and the Property, the above valuation methodologies are commonly used in arriving at the Valuation. Based on our discussion with the Valuer and our understanding of the particulars of the Target Site and the Property, we believe that the market approach adopted by the Valuer in performing the Valuation is appropriate. As regards to the calculation of the Appreciation Amount, we have (i) compared the book value of the property interests of the Target Group as at 31 December 2012 as set out in Appendix IIA to the Circular against the valuation of the property interests of the Target Group as at 31 December 2012 as set out in Appendix V to the Circular; and (ii) reviewed the calculation of the LAT.

Having considered the above, in particular (i) having understood from the management of the Company that the Consideration was determined after arm’s length negotiation between the Purchaser and the Vendor; (ii) adjustments have been made to the net asset value of the Target Group as at 31 December 2012 by the management of the Company to arrive at the Adjusted NAV in assessing the fairness and reasonableness of the Consideration, which we concur with the management of the Company to be the relevant type of adjustments in assessing the fairness and reasonableness of the Consideration as the net asset value of the Target Group as at 31 December 2012 as set out in Appendix IIA to the Circular did not take into account the market valuation of the Target Site as at 31 December 2012 and the estimated potential LAT to be borne by PRC Co 2 upon disposal of the Target Site; (iii) the Consideration represents a discount to the Adjusted NAV, which we consider to be the most relevant benchmark in assessing the fairness of the Consideration given that the principal asset underlying the Acquisition is the Target Site which is a real estate property; and (iii) having discussed with the Valuer and understood that an appropriate valuation methodology was adopted in the valuation of the properties of the Target Group, we are of the view that the Consideration is fair and reasonable in so far the Independent Shareholders are concerned and are on normal commercial terms.

– 43 –

LETTER FROM CIMB

(ii) Consideration Shares and Issue Price

The Acquisition Agreement stipulates that the Consideration shall be satisfied by the Company by way of allotment and issue of 1,410,117,262 Consideration Shares credited as fully paid up at the issue price of HK$3.667 per Consideration Share by the Company to the Vendor.

When allotted and issued at Completion, the Consideration Shares will represent approximately 37.8% of the existing issued share capital of the Company as at the Latest Practicable Date; and 27.4% of the issued share capital of the Company as enlarged by the allotment and issue of the Consideration Shares.

The Consideration Shares will be issued at HK$3.667 per Share, which:

(a) represents a premium of approximately 9.1% over the closing price of HK$3.360 per Share as quoted on the Stock Exchange on the Last Trading Date;
(b) represents a premium of approximately 9.3% over the average closing price of HK$3.354 per Share for the last five trading days up to and including the Last Trading Date;
(c) represents a premium of approximately 8.7% over the average closing price of HK$3.375 per Share for the last ten trading days up to and including the Last Trading Date;
(d) represents a premium of approximately 21.8 % over the closing price of HK$ 3. 01 per Share as quoted on the Stock Exchange on the Latest Practicable Date; and
(e) represents a discount of approximately 20.1% over the unaudited consolidated net assets value attributable to equity holders of the Company per Share of approximately HK$4. 60, calculated based on the Group’s audited consolidated net asset value (less the proposed final dividend for the year ended 31 December 2012) of HK$ 17,137.7 million as at 31 December 2012 and 3,729,015,408 Shares in issue as at the Latest Practicable Date.

– 44 –

LETTER FROM CIMB

As disclosed in the Letter from the Board, the Issue Price was arrived at after arm’s length negotiations between the parties to the Acquisition Agreement after taking into account, among others, the prevailing market price of the Shares, the financial performance of the Group and the prevailing market conditions at the time of signing of the Acquisition Agreement.

The following chart illustrates the closing prices of the Shares for the period from 23 July 2012 (being the date 6 months prior to and including the date of the Announcement) up to and including the Latest Practicable Date (the “ Review Period ”):

==> picture [334 x 188] intentionally omitted <==

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

5 24,000
4 Issue Price: 3.667
22,000
3
The Announcement 20,000
on 17 January 2013 Annual results
2 announcement
Supplemental on 25 March 2013
Discloseable transaction Acquisition 18,000
1 Interim results announcement Agreement
announcement on 28 September 2012 announcement
on 27 August 2012 on 25 February 2013
0 16,000
Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13
Shenzhen Investment Limited Hang Seng Index
Share price (HKD)
----- End of picture text -----

Source: Bloomberg

As shown in the chart above, the closing prices of the Shares were within the range of HK$1.72 per Share to HK$3.91 per Share during the Review Period. From late July 2012 to the Last Trading Day, the price of the Shares was on an ascending trend rising from HK$1.79 per Share on 23 July 2012 to the highest of HK$3.91 per Share on 23 January 2013. The price of the Shares traded at a similar trend to the Hang Seng Index during the Review Period. As noted from the public announcements made by the Company during this period, save for the 2012 interim results announcement released on 27 August 2012, the discloseable transactions with Coastal Greenland Limited released on 28 September 2012 , the Announcement, the Supplemental Acquisition Agreement announcement released on 25 February 2013 and the 2012 annual results announcement released on 25 March 2013, the Directors were not aware of any other announcements that would materially affect the Share price of the Company. Following the release of the Announcement, the Share price recorded an increase from HK$3.36 per Share on the Last Trading Day to HK$3.91

– 45 –

LETTER FROM CIMB

per Share on 23 January 2013, being the highest closing price recorded during the Review Period. We consider that it is possible that the Share price reacted positively to the Acquisition. We further note from the chart above that the Issue Price is at a premium to the historical trading price of the Shares throughout most of the Review Period.

We consider that price-to-book ratio is the appropriate benchmark for valuing companies engaged in property investment and development whose values lie in the value of their underlying assets rather than their profits which may be affected by the timing of the launch of development projects. Therefore, in assessing the fairness of the Issue Price, we consider that it is appropriate to compare the ratio of the Issue Price to the underlying net asset value of the Shares against the price-to-book ratio of other relevant property companies. In particular, we have reviewed companies listed in the Main Board of the Stock Exchange (the “ Comparable Companies ”), which are principally engaged in property developments and/or investments primarily in the PRC as shown in their latest published annual reports, and which have a market capitalisation above HK$ 10,000 million and below HK$ 50,000 million as at the Latest Practicable Date. We consider that the above criteria for selection of the Comparable Companies are appropriate given that the Company is principally engaged in property developments and property investments in the PRC and has a market capitalisation of approximately HK$ 11,224 million as at the Latest Practicable Date.

– 46 –

LETTER FROM CIMB

On this basis, we have identified six Comparable Companies, which we consider to be exhaustive based on the above selection criteria, and set them out in the table below. The table below illustrates the level of premium/discount of share prices over/to consolidated net asset values attributable to equity holders of each of the Comparable Companies.

				(Discount)/
				Premium of
				market
			Latest audited/	capitalisation
			unaudited	over/to the
	Closing	Market	consolidated	consolidated
	share price as	capitalisation	net asset value	net asset value
	at the Latest	as at the Latest	attributable	attributable to
Company Name	Practicable Date	Practicable Date	to equity holders	equity holders
	HK$	HK$’ million	HK$’ million	%
Guangzhou R&F Properties Co.,
Ltd (stock code: 2777)	11.58	41,182	52,977	( 2 2.3)
Greentown China Holdings Ltd
(stock code: 3900)	13.4	26,298	18,925	39.0
New World China Land Ltd
(stock code: 917)	3.36	28,762	48,752	(41.0)
SOHO China Ltd
(stock code: 410)	5.94	32,276	38,214	(15.5)
Sino-Ocean Land Holdings Ltd
(stock code:3377)	4.79	26,497	47,673	( 44.4)
Shimao Property Holdings Ltd
(stock code: 813)	14.52	47,574	85,558	( 44.4)
Mean				( 21.4)
Lowest				( 44.4)
Highest				39.0
The Company	3.667	13,674	1 7, 138	( 20.1)
	(Note 1)	(Note 2)	(Note 3)

Source: www.hkex.com.hk

Notes:

Being the Issue Price of HK$3.667 per Share.
We have taken the Issue Price for the purpose of determining the market capitalisation of the Company.
Being the audited consolidated net asset attributable to the Shareholders as at 31 December 2012 as reported in the Company’s annual results announcement for the year ended 31 December 2012.

– 47 –

LETTER FROM CIMB

In our opinion, property companies are generally traded at a discount of market capitalisation to their underlying net asset value. As illustrated in the table above, (i) the shares of five out of the six Comparable Companies were traded at a discount to their respective net asset value with a discount ranging from approximately 15.5 % to 44.4 %; (ii) the shares of the remaining Comparable Company were traded at a premium to their respective net asset value with a premium of approximately 39.0 %; and (iii) the shares of the six Comparable Companies were traded at an average discount of approximately 21.4 % to their net asset value. The discount of market capitalisation of the Company as represented by the Issue Price to the audited net asset value attributable to Shareholders as at 31 December 2012 of approximately 20.1 % is therefore within range of the Comparable Companies and is also lower than the average discount of the Comparable Companies of approximately 21.4 %.

For readers’ additional reference, we have reviewed recent share placements of real estate companies listed on the Main Board of the Stock Exchange with significant property interests in the PRC (excluding those in suspension in trading) in the past 6 months i.e. from 1 August 2012 up to and including the Latest Practicable Date (the “ Property Placement Comparables ”). We consider that the above criteria for selecting the Property Placement Comparables are appropriate given that (i) the Company’s property interests are mainly in the PRC; and (ii) a review period of six months for analyzing placement transactions allows us to capture recent market trend and information.

– 48 –

LETTER FROM CIMB

Based on our review, we note that the Issue Price is at a premium over the Share price on the Last Trading Date and over the average Share price on the last ten trading days up to and including the Last Trading Date while the respective issue prices for the Property Placement Comparables, which we consider to be exhaustive based on the above selection criteria, are at a discount to the same trading price benchmarks. Details of the Property Placement Comparables are summarised in the following table:

				(Discount)/
				Premium of
				issue price
			(Discount)/	to average trading
			Premium of	price on the last
			issue price	five trading days
			to trading price	up to and including
			on the respective	the respective
			last trading dates	last trading dates
			before publication	before publication
			of placing	of placing
			announcements	announcements
Date	Code	Company Name	%	%
28 Jan 13	535	Frasers Property (China) Limited	(15.2)	(16.1)
28 Jan 13	9	Cheung Wo Intl’ Holdings Limited	(15.3)	(18.3)
21 Jan 13	1918	Sunac China Holdings Limited	(5.0)	(4.0)
17 Jan 13	3333	Evergrande Real Estate Group Ltd.	(6.5)	(3.8)
18 Oct 12	497	CSI Properties Limited	(15.2)	(12.1)
18 Sep 12	960	Longfor Properties Co. Ltd.	(7.9)	(2.7)
		Average	(10.8)	(9.5)
		Range	(5.0) to (15.3)	(2.7) to (18.3)
The Issue Price			9.1	8.7
Source: www.hkex.com.hk

The discount of the issue price of the Property Placement Comparables to the trading price on the respective last trading dates before the publish of placing announcement ranged from approximately 5.0% to approximately 15.3% with an average discount of approximately 10.8%. The discount of the issue price of the Property Placement Comparables to the average trading price on the last five trading days up to and including the respective last trading dates before the publish of placing announcement ranged from approximately 2.7% to approximately 18.3% with an average discount of approximately 9.5%. As compared to the Property Placement Comparables, the Consideration Shares will be issued at HK$3.667 per Share, which (i) represents a premium of approximately 9.1% over the closing price of HK$3.360 per Share as quoted on the Stock Exchange on the Last Trading Date; and

– 49 –

LETTER FROM CIMB

(ii) represents a premium of approximately 8.7% over the average closing price of HK$3.354 per Share for the last five trading days up to and including the Last Trading Date.

Taking into account the above, in particular, (i) the Issue Price was arrived at after arm’s length negotiations between the parties to the Acquisition Agreement after taking into account, among others, the prevailing market price of the Shares, the financial performance of the Group and the prevailing market conditions at the time of signing of the Acquisition Agreement; (ii) the Issue Price is at a premium over the historical trading price of the Shares throughout most of the Review Period; and (iii) the discount of market capitalisation of the Company as represented by the Issue Price to the audited net asset value attributable to Shareholders as at 31 December 2012 of approximately 20.1 % is within range of the Comparable Companies and lower than the average discount of the Comparable Companies of approximately 21.4 % , we are of the view that the Issue Price is fair and reasonable in so far the Independent Shareholders are concerned and are on normal commercial terms.

(iii) The indemnities

Pursuant to the Acquisition Agreement, the Purchaser has agreed to pay the Vendor an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion of the Target Site is less than the Agreed Land Premium (if any). In addition, the Vendor has also agreed to (i) indemnify and pay the Purchaser for an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion is higher than the Agreed Land Premium (if any); (ii) indemnify the Purchaser for any amount of land premium payable to the PRC government by PRC Co 2 for its holding and operating (including leasing) of the commercial services facilities, underground supporting commercial services facilities and hotel portions of the Target Site; (iii) indemnify the Purchaser for any liabilities incurred or to be incurred by PRC Co 2 and losses directly or indirectly incurred by the Purchaser or PRC Co 2 in relation to or as a result of the Relevant Company Guarantee; and (iv) procure the full and valid release of the Relevant Company Guarantee before Completion.

– 50 –

LETTER FROM CIMB

Furthermore, pursuant to the Supplemental Acquisition Agreement, the Vendor has given an irrevocable undertaking in favour of the Company that if the approval for the Property Disposal by the independent Shareholders is not obtained at the EGM and the Property Disposal Agreements are terminated accordingly, the Vendor shall indemnify the Company against all losses, liabilities, taxation, costs and expenses payable or incurred by the Target Group as a result of such termination and indemnify the Company against all taxation, costs and expenses payable or incurred by PRC Co 2 (upon PRC Co 2 becoming a subsidiary of the Company pursuant to the Acquisition Agreement) as a result of such termination. Upon termination of the Property Disposal Agreements, Shum Yip Terra will also refund the entire consideration of approximately RMB272.4 million to PRC Co 2.

Taking into account all the indemnities as stated above (the “ Indemnities ”), in particular that the Indemnities will indemnify the Purchaser for any amount of land premium payable to the PRC government by PRC Co 2 for its holding and operating (including leasing) of the commercial services facilities, underground supporting commercial services facilities and hotel portions of the Target Site, and the Indemnities are intended to enhance the protection of the Company from incurring any potential unnecessary losses from the Target Group arising from (i) the Relevant Company Guarantee; (ii) any tax liabilities incurred by the Vendor in relation to the Acquisition; (iii) any tax liabilities arising from transactions of the Target Group before Completion; and iv) the termination of the Property Disposal Agreements, we are of the view that the Indemnities are fair and reasonable so far as the Company and the Independent Shareholders are concerned and in the interest of the Group and the Shareholders as a whole.

(iv) Completion

Completion shall take place on the second Business Day after all the conditions precedent under the Acquisition Agreement as set out in the Letter from the Board have been fulfilled and/or waived by the Purchaser (or such other date as the Vendor and the Purchaser may agree in writing).

– 51 –

LETTER FROM CIMB

If all the conditions precedent under the Acquisition Agreement as set out in the Letter from the Board are not fulfilled or waived before 30 June 2013 (or such other later date or longer period as agreed by the Vendor and the Company in writing), the Acquisition Agreement shall terminate automatically.

Our view

Taking into account the above, we are of the view that the terms of the Acquisition Agreement, in particular, the Consideration, the Issue Price and the Indemnities, are fair and reasonable so far as the Company and the Independent Shareholders are concerned and in the interests of the Group and the Shareholders as a whole.

4. Possible financial effects of the Acquisition

(i) Earnings

As stated in the Letter from the Board, upon Completion, the Target Company, WFOE, PRC Co 1 and PRC Co2 will be accounted for as subsidiaries of the Company and their respective results will be consolidated into the results of the Group.

(ii) Net assets value

Based on the annual results announcement of the Company for the year ended 31 December 2012 dated 25 March 2013, the Group had total assets of approximately HK$ 54.4 billion, total liabilities of approximately HK$ 34.9 billion, net assets of approximately HK$ 19.5 billion. Upon Completion, based on the unaudited pro forma statement of financial position of the Enlarged Group (assuming the Acquisition had been completed on 31 December 2012) as set out in Appendix III to the Circular, as at 31 December 2012, the Enlarged Group would have total assets of approximately HK$ 68.0 billion, total liabilities of approximately HK$ 43.3 billion and net assets of approximately HK$ 24.7 billion. Based on the aforesaid figures, the Enlarged Group’s net assets position as at 31 December 2012 will be increased by approximately 26.7 % from the Group’s net assets position as at 31 December 2012.

However, Shareholders should note that the exact effects of the Acquisition on the Group’s net assets value and the amount of goodwill or gain on bargain purchase (as the case may be) shall only be determined, and subject to audit, upon Completion based on the then fair value of the consolidated net assets of the Target Group and the then fair value of the Consideration.

– 52 –

LETTER FROM CIMB

(iii) Working capital

As stated in the Letter from the Board, the Consideration will be satisfied by the Company by way of allotment and issue of 1,410,117,262 Consideration Shares credited as fully paid up at the issue price of HK$3.667 per Consideration Share by the Company to the Vendor.

As the Consideration will be satisfied by the Company by way of issue of Consideration Shares, there will not be any potential cash flow burden of the Group arising from settlement of the Consideration. Upon Completion, the Shareholders’ Loan of approximately RMB3.7 billion (including interests) will be assigned to the Company (as at 31 December 2012, the Shareholders’ Loan amounted to approximately RMB5.0 billion and before Completion, approximately RMB1. 4 billion of the Shareholders’ Loan will be set off against a receivable of the same amount from the Shum Yip Group). Out of the Shareholders’ Loan of approximately RMB3. 7 billion, approximately RMB1.84 billion carrying interest ranging from nil to the one-year benchmark lending rate of the People’s Bank of China are repayable on demand or within a year while the remaining amount of approximately RMB2.8 billion carrying interests of 9.9% per annum is repayable from 30 October 2014 to 9 September 2015. As stated in the Letter from the Board, on 25 March 2013, each lender of the Shareholders’ Loan confirmed that it will extend the repayment date of the Shareholders’ Loan by entering into separate agreements, the terms of which are to be agreed upon by both parties based on the then prevailing circumstances and subject to compliance with the regulatory requirements, in the event that the Target Group does not have sufficient cash to satisfy the repayment obligations or by doing so will adversely affect its operation.

Having considered that the Consideration will be satisfied by the Company by way of issue of Consideration Shares and the strong cash and cash equivalents position of the Group of approximately HK$ 6.7 billion as at 31 December 2012 as per the Company’s annual results announcement for the year ended 31 December 2012 dated 25 March 2013, and based on our discussion with the management of the Company and in view of the confirmations from the lenders of the Acquisition and the Shareholders’ Loan as explained above, we consider that the Shareholders’ Loan will not have an immediate adverse impact on the Group’s liquidity and working capital position.

– 53 –

LETTER FROM CIMB

5. Potential dilution effects and the Whitewash Waiver

(i) Potential dilution effects

As at the Latest Practicable Date, the Independent Shareholders were interested in approximately 55.4% of the issued share capital of the Company. Upon completion of the Acquisition (assuming none of the outstanding Share Options will be exercised), the aggregate shareholding interests of the Independent Shareholders in the Company will be diluted by approximately 15.3% to approximately 40.1%.

Having considered the reasons and benefits of the Acquisition above, the financial effects of the Acquisition, and the analysis on the reasonableness of the Consideration and the Issue Price, we consider that the dilution in the shareholding interests of the Independent Shareholders in the Company upon completion of the Acquisition is not prejudicial to their interests and, as such, is considered to be fair and reasonable.

(ii) The Whitewash Waiver

As at the Latest Practicable Date, the Vendor and its concert parties hold, own, or have control or direction over 1,656,250,063 Shares and 8,032,000 Share Options. Save as disclosed above, the Vendor and its concert parties do not hold, own or have control or direction over any other Shares, convertible securities, warrants or options of the Company or any outstanding derivative in respect of relevant securities (as defined in note 4 to Rule 22 of the Takeovers Code) of the Company. The issue of the Consideration Shares to the Vendor will result in the increase in shareholding of the Vendor and its concert parties in the Company from approximately 44.4% to approximately 59.7% (assuming that no Shares other than the Consideration Shares will be issued from the Latest Practicable Date until Completion). Accordingly, such an increase will give rise to an obligation under Rule 26 of the Takeovers Code for the Vendor to make a mandatory general offer under Rule 26 of the Takeovers Code for all the Shares and other securities issued by the Company not already held or agreed to be acquired by the Vendor and its concert parties unless the Whitewash Waiver is obtained.

– 54 –

LETTER FROM CIMB

during the period from 18 July 2012 (being the first day of the six month period preceding the date of the Acquisition Agreement) to the Latest Practicable Date, the Vendor and its concert parties had not acquired or been deemed to have acquired, any voting rights in the Company.

An application has been made by the Vendor to the Executive for the Whitewash Waiver pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted, will be subject to the approval of the Independent Shareholders on a vote taken by way of a poll at the EGM and such other condition(s) as may be imposed by the Executive. It is one of the conditions of the Acquisition Agreement that the Whitewash Waiver be granted by the Executive and be approved by the Independent Shareholders at the EGM. The Vendor and its concert parties and Shareholders who are involved in or interested in the Acquisition and/or the Whitewash Waiver will abstain from voting on the resolution(s) to approve the Whitewash Waiver at the EGM. If the Whitewash Waiver is not granted by the Executive or not approved by the Independent Shareholders, the Acquisition will not proceed. Such condition to the Acquisition Agreement cannot be waived.

Based on our analysis of the reasons and benefits of the Acquisition and the terms of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement) above, in particular the following:

(i) the Acquisition is in line with the Group’s principal business and allows the Group to expand its portfolio of development projects and land bank;
(ii) the Consideration represents a discount of approximately 11.6 % to the Adjusted NAV of the Target Group;
(iii) the Issue Price is at a premium over the historical trading price of the Shares throughout most of the Review Period; and

– 55 –

LETTER FROM CIMB

(iv) the discount of approximately 20.1 % of the market capitalisation of the Company as represented by the Issue Price to the audited net asset value attributable to Shareholders as at 31 December 2012 is within range of the Comparable Companies and is lower than the average discount of those of the Comparable Companies of approximately 21.4 % ,

we consider that the entering into of the Acquisition Agreement and the Supplemental Acquisition Agreement is in the interests of the Company and the Independent Shareholders as a whole. If the Whitewash Waiver is not approved by the Independent Shareholders at the EGM, the Acquisition will not proceed and the Company will lose all the benefits that are expected to be brought by the Completion, including but not limited to, the opportunity to further develop its real estate business and increase its land bank in Shenzhen, which, as outlined above, has experienced strong and growing demand for consumption upgrading and housing recently. Accordingly, we are of the view that for the purposes of the Acquisition to proceed to Completion, the Whitewash Waiver is fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

RECOMMENDATION

Having considered the principal factors and reasons referred to above, we are of the opinion that the Acquisition is in line with the Group’s business and the Acquisition (and the transactions contemplated thereunder) and the terms thereof and the Whitewash Waiver are in the interest of the Group and the Shareholders as a whole and the terms are of normal commercial terms and fair and reasonable so far as the Company and the Independent Shareholders are concerned.

Accordingly, we advise the Listing Rules IBC and Takeovers Code IBC to recommend the Independent Shareholders and the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the entering into of the Acquisition (and the transactions contemplated thereunder) and the Whitewash Waiver.

Yours faithfully, For and on behalf of

CIMB Securities Limited

Alex LAU Heidi CHENG Director Director Corporate Finance Corporate Finance

– 56 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. SUMMARY OF FINANCIAL INFORMATION

The following is a summary of the consolidated financial information of the Group for the three years ended 31 December 2010, 2011 and 2012, as extracted from the annual results announcement of the Company for the year ended 31 December 2012 and the annual report of the Company for the year ended 31 December 2011.

RESULTS
REVENUE
PROFIT BEFORE TAX
Income tax expense
PROFIT FOR THE YEAR
ATTRIBUTABLE TO:
Shareholders
Non-controlling interests
Basic earnings per Share attributable to
the Shareholders
Dividend per Share attributable to
the Shareholders
Dividends
ASSETS, LIABILITIES AND
NON-CONTROLLING INTERESTS
Total assets
Total liabilities
Non-controlling interests
Equity attributable to owners of the
parent

Year ended 31 December
2012
2011
2010
HK$’000
HK$’000
HK$’000
Restated
8,568,254
7,320,584
6,502,460
3,701,801
2,892,293
2,440,527
(1,141,561)
(1,076,534)
(863,660)
2,560,240
1,815,759
1,576,867
2,156,069
1,522,078
1,324,780
404,171
293,681
252,087
2,560,240
1,815,759
1,576,867
HK 59.23 cents
HK42.86 cents
HK37.47 cents
HK 18.00 cents
HK15.00 cents
HK14.00 cents
664,014
538,118
495,732
54,392,007
41,540,624
33,817,517
34,882,164
24,527,687
19,117,720
1,961,947
1,469,558
1,224,894
17,547,896
15,543,379
13,474,903

Notes:

No qualified opinion in respect of the audit of the Group for the three years ended 31 December 2010, 2011 and 2012 has been issued by the auditors of the Company.
No exceptional items because of their size, nature or incidences were recognised in the above accounts for the three years ended 31 December 2010, 2011 and 2012.

I – 1

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2. LATEST PUBLISHED FINANCIAL INFORMATION

Set out below are the latest published audited consolidated financial information of the Group for the two years ended 31 December 2012 and 2011 respectively together with the accompanying notes relating thereto and the comparative figures, for the two years ended 31 December 2012 and 2011 as extracted from the annual results announcement of the Company for the year ended 31 December 2012 and the annual report of the Company for the year ended 31 December 2011 respectively. References to page numbers in this section are to the page numbers of such annual results announcement and annual report of the Company.

(A) AUDITED FINANCIAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2012

CONSOLIDATED INCOME STATEMENT

Year ended 31 December 2012

Notes REVENUE 4 Cost of sales Gross profit Other income and gains 4 Fair value gains/(losses), net: Equity investments at fair value through profit or loss Financial liabilities at fair value through profit or loss Increase in fair value of investment properties Selling and distribution expenses Administrative expenses Other expenses Finance costs 6 Share of profits and losses of: Jointly-controlled entities Associates PROFIT BEFORE TAX 5 Income tax expense 7 PROFIT FOR THE YEAR	2012 HK$’000 8,568,254 (5,479,594) 3,088,660 813,422 2,269 – 470,895 (243,868) (758,921) (58,568) (479,549) 48,524 818,937 3,701,801 (1,141,561) 2,560,240	2011 HK$’000 7,320,584 (4,653,449) 2,667,135 463,778 (1,077) 65,861 311,316 (226,787) (725,522) (256,689) (200,562) 185,265 609,575 2,892,293 (1,076,534) 1,815,759

I – 2

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Attributable to: Owners of the parent Non-controlling interests EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT 9 Basic – For profit for the year Diluted – For profit for the year Note	2,156,069 404,171 2,560,240 HK59.23 cents HK59.23 cents 2012 HK$’000	1,522,078 293,681 2011 HK$’000
		1,815,759

		HK42.86 cents

		HK42.86 cents

Details of the dividends payable and proposed for the year are disclosed in note 8 to the financial information.

I – 3

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 December 2012

PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Available-for-sale investments: Changes in fair value Income tax effect Share of other comprehensive income of associates Exchange differences on translation of foreign operations OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX TOTAL COMPREHENSIVE INCOME FOR THE YEAR Attributable to: Owners of the parent Non-controlling interests	2012 HK$’000 2,560,240 2,632 (657) 1,975 27,779 178,541 208,295 2,768,535 2,345,526 423,009 2,768,535	2011 HK$’000 1,815,759 (5,676) 1,419 (4,257) 162,448 819,615 977,806 2,793,565 2,428,837 364,728 2,793,565

I – 4

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 December 2012

Notes NON-CURRENT ASSETS Property, plant and equipment Intangible assets Prepaid land lease payments Goodwill Investment properties Investments in associates Investments in jointly-controlled entities Available-for-sale investments Other long term assets Deferred tax assets Pledged deposits Total non-current assets CURRENT ASSETS Inventories Completed properties held for sale Properties under development Trade receivables 10 Prepayments, deposits and other receivables Equity investments at fair value through profit or loss Held-to-maturity investment Pledged deposits Restricted cash Cash and cash equivalents Total current assets CURRENT LIABILITIES Interest-bearing bank and other borrowings Trade payables 11 Other payables and accruals Due to the immediate holding company Due to the ultimate holding company Tax payable Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES	31 December 2012 HK$’000 2,414,252 75,986 49,045 322,744 9,210,339 5,223,517 118,124 52,471 1,377,822 528,258 137,323 19,509,881 109,107 7,094,670 15,723,873 254,857 4,520,838 10,296 – 129,905 304,528 6,734,052 34,882,126 8,974,238 703,486 8,283,656 14,158 64,579 1,978,905 20,019,022 14,863,104 34,372,985	31 December 2011 HK$’000 630,160 81,372 48,863 322,704 5,560,792 5,276,081 430,866 29,913 1,386,939 438,845 12,427
		14,218,962
		91,677 3,348,072 15,111,752 143,407 2,995,350 19,487 387,968 – 126,425 5,097,524
		27,321,662
		4,965,249 264,717 4,815,051 – 54,641 1,806,695
		11,906,353
		15,415,309
		29,634,271

I – 5

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

NON-CURRENT LIABILITIES Interest-bearing bank and other borrowings Deferred tax liabilities Total non-current liabilities Net assets EQUITY Equity attributable to owners of the parent Issued capital Reserves Proposed final dividend 8 Non-controlling interests Total equity Note	13,236,124 1,627,018 14,863,142 19,509,843 186,451 16,951,253 410,192 17,547,896 1,961,947 19,509,843 31 December 2012 HK$’000	11,514,038 1,107,296 31 December 2011 HK$’000
		12,621,334
		17,012,937

		181,301 15,071,996 290,082
		15,543,379 1,469,558
		17,012,937

I – 6

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO FINANCIAL INFORMATION

31 December 2012

1. Corporate information

Shenzhen Investment Limited is a limited liability company incorporated in Hong Kong. The registered office of the Company is located at 8th Floor, New East Ocean Centre, 9 Science Museum Road, Kowloon, Hong Kong.

During the year, the Group was involved in the following principal activities:

Property development
Property investment
Property management
Provision of transportation services
Manufacturing and sale of industrial and commercial products

In the opinion of the directors, the immediate holding company of the Company is Shum Yip Holdings Company Limited (“Shum Yip Holdings”, 深業（集團）有限公司）, which is a private company incorporated in Hong Kong. The ultimate holding company of the Company is 深業集團有限公司, which is a private company established in Shenzhen, the People’s Republic of China (the “PRC”).

2.1 Basis of preparation

The Company’s financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), accounting principles generally accepted in Hong Kong and the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for investment properties, certain buildings classified as property, plant and equipment, derivative financial instruments and equity investments, which have been measured at fair value. These financial statements are presented in Hong Kong dollars (“HK$”) and all values are rounded to the nearest thousand except when otherwise indicated.

I – 7

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 December 2012. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated on consolidation in full.

Total comprehensive income within a subsidiary is attributed to the noncontrolling interest even if it results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate.

2.2 Changes in accounting policy and disclosures

The Group has adopted the following revised HKFRSs for the first time for the current year’s financial statements.

HKFRS 1 Amendments Amendments to HKFRS 1 First-time Adoption of Hong Kong Financial Reporting Standards – Severe Hyperinflation and Removal of Fixed Dates for Firsttime Adopters HKFRS 7 Amendments Amendments to HKFRS 7 Financial Instruments: Disclosures – Transfers of Financial Assets HKAS 12 Amendments Amendments to HKAS 12 Income Taxes – Deferred Tax: Recovery of Underlying Assets

I – 8

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Other than as further explained below regarding the impact of amendments to HKAS 12, the adoption of the revised HKFRSs has had no significant financial effect on these financial statements.

The HKAS 12 Amendments clarify the determination of deferred tax for investment property measured at fair value and introduce a rebuttable presumption that deferred tax on investment property measured at fair value should be determined on the basis that its carrying amount will be recovered through sale. Furthermore, the amendments incorporate the requirement previously in HK(SIC)-Int 21 Income Taxes – Recovery of Revalued Non-Depreciable Assets that deferred tax on non-depreciable assets, measured using the revaluation model in HKAS 16, should always be measured on a sale basis. The presumption that deferred tax on investment property measured at fair value should be determined on the basis that its carrying amount will be recovered through sale has been rebutted by the Group as the Group’s investment properties are held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Accordingly deferred tax has been determined on the basis of recovery through use. The Group has adopted this amendment retrospectively for the year ended 31 December 2012. Since all the investment properties of the Group are held with a business model to consume substantially all of the economic benefits embodied in the investment properties over time rather than through sale, the presumption has been rebutted. Consequently, the Group has continued to recognise the deferred taxes on the basis that the value of investment properties is recovered through use and there is no impact on the Group’s results of operations and financial position.

2.3 Issued but not yet effective Hong Kong Financial Reporting Standards

The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in the consolidated financial statements.

HKFRS 1 Amendments	Amendments to HKFRS 1 First-time Adoption of
	Hong Kong Financial Reporting Standards
	– Government Loans2
HKFRS 7 Amendments	Amendments to HKFRS 7 Financial Instruments:
	Disclosures – Offsetting Financial Assets and
	Financial Liabilities2
HKFRS 9	Financial Instruments4
HKFRS 10	Consolidated Financial Statements2
HKFRS 11	Joint Arrangements2
HKFRS 12	Disclosure of Interests in Other Entities2
HKFRS 10, HKFRS 11 and	Amendments to HKFRS 10, HKFRS 11 and
HKFRS 12 Amendments	HKFRS 12 – Transition Guidance2

I – 9

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

HKFRS 10, HKFRS 12 and Amendments to HKFRS 10, HKFRS 12 and HKAS 27 (2011) HKAS 27 (2011) – Investment Entities[3] Amendments HKFRS 13 Fair Value Measurement[2] HKAS 1 Amendments Amendments to HKAS 1 Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income[1] HKAS 19 (2011) Employee Benefits[2] HKAS 27 (2011) Separate Financial Statements[2] HKAS 28 (2011) Investments in Associates and Joint Ventures[2] HKAS 32 Amendments Amendments to HKAS 32 Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities[3] HK(IFRIC)-Int 20 Stripping Costs in the Production Phase of a Surface Mine[2] Annual Improvements Amendments to a number of HKFRSs issued in June 2009-2011 Cycle 2012[2]

1 Effective for annual periods beginning on or after 1 July 2012

2 Effective for annual periods beginning on or after 1 January 2013

3 Effective for annual periods beginning on or after 1 January 2014

4 Effective for annual periods beginning on or after 1 January 2015

Further information about those HKFRSs that are expected to be applicable to the Group is as follows:

The HKFRS 7 Amendments require an entity to disclose information about rights to set-off and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with HKAS 32 Financial Instruments: Presentation. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with HKAS 32. The Group expects to adopt the amendments from 1 January 2013.

I – 10

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

HKFRS 9 issued in November 2009 is the first part of phase 1 of a comprehensive project to entirely replace HKAS 39 Financial Instruments: Recognition and Measurement. This phase focuses on the classification and measurement of financial assets. Instead of classifying financial assets into four categories, an entity shall classify financial assets as subsequently measured at either amortised cost or fair value, on the basis of both the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. This aims to improve and simplify the approach for the classification and measurement of financial assets compared with the requirements of HKAS 39.

In November 2010, the HKICPA issued additions to HKFRS 9 to address financial liabilities (the “Additions”) and incorporated in HKFRS 9 the current derecognition principles of financial instruments of HKAS 39. Most of the Additions were carried forward unchanged from HKAS 39, while changes were made to the measurement of financial liabilities designated at fair value through profit or loss using the fair value option (“FVO”). For these FVO liabilities, the amount of change in the fair value of a liability that is attributable to changes in credit risk must be presented in other comprehensive income (“OCI”). The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change in respect of the liability’s credit risk in OCI would create or enlarge an accounting mismatch in profit or loss. However, loan commitments and financial guarantee contracts which have been designated under the FVO are scoped out of the Additions.

HKAS 39 is aimed to be replaced by HKFRS 9 in its entirety. Before this entire replacement, the guidance in HKAS 39 on hedge accounting and impairment of financial assets continues to apply. The Group expects to adopt HKFRS 9 from 1 January 2015. The Group will quantify the effect in conjunction with other phases, when the final standard including all phases is issued.

HKFRS 10 establishes a single control model that applies to all entities including special purpose entities or structured entities. It includes a new definition of control which is used to determine which entities are consolidated. The changes introduced by HKFRS 10 require management of the Group to exercise significant judgement to determine which entities are controlled, compared with the requirements in HKAS 27 and HK(SIC)-Int 12 Consolidation – Special Purpose Entities. HKFRS 10 replaces the portion of HKAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the issues raised in HK(SIC)-Int 12. Based on the preliminary analyses performed, HKFRS 10 is not expected to have any impact on the currently held investments of the Group.

I – 11

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

HKFRS 11 replaces HKAS 31 Interests in Joint Ventures and HK(SIC)-Int 13 Jointlycontrolled Entities – Non-Monetary Contributions by Venturers. It describes the accounting for joint arrangements with joint control. It addresses only two forms of joint arrangements, i.e., joint operations and joint ventures, and removes the option to account for joint ventures using proportionate consolidation. Based on the preliminary analyses performed, HKFRS 11 is not expected to have any impact on the currently held investments of the Group.

HKFRS 12 includes the disclosure requirements for subsidiaries, joint arrangements, associates and structured entities previously included in HKAS 27 Consolidated and Separate Financial Statements, HKAS 31 Interests in Joint Ventures and HKAS 28 Investments in Associates. It also introduces a number of new disclosure requirements for these entities.

In July 2012, the HKICPA issued amendments to HKFRS 10, HKFRS 11 and HKFRS 12 which clarify the transition guidance in HKFRS 10 and provide further relief from full retrospective application of these standards, limiting the requirement to provide adjusted comparative information to only the preceding comparative period. The amendments clarify that retrospective adjustments are only required if the consolidation conclusion as to which entities are controlled by the Group is different between HKFRS 10 and HKAS 27 or HK(SIC)-Int 12 at the beginning of the annual period in which HKFRS 10 is applied for the first time. Furthermore, for disclosures related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for periods before HKFRS 12 is first applied.

The amendments to HKFRS 10 issued in December 2012 include a definition of an investment entity and provide an exception to the consolidation requirement for entities that meet the definition of an investment entity. Investment entities are required to account for subsidiaries at fair value through profit or loss in accordance with HKFRS 9 rather than consolidate them. Consequential amendments were made to HKFRS 12 and HKAS 27 (2011). The amendments to HKFRS 12 also set out the disclosure requirements for investment entities. The Group expects that these amendments will not have any impact on the Group as the Company is not an investment entity as defined in HKFRS 10.

Consequential amendments were made to HKAS 27 and HKAS 28 as a result of the issuance of HKFRS 10, HKFRS 11 and HKFRS 12. The Group expects to adopt HKFRS 10, HKFRS 11, HKFRS 12, HKAS 27 (2011), HKAS 28 (2011), and the subsequent amendments to these standards issued in July and December 2012 from 1 January 2013.

HKFRS 13 provides a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across HKFRSs. The standard does not change the circumstances in which the Group is required to use fair value, but provides guidance on how fair value should be applied where its use is already required or permitted under other HKFRSs. The Group expects to adopt HKFRS 13 prospectively from 1 January 2013.

I – 12

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The HKAS 1 Amendments change the grouping of items presented in OCI. Items that could be reclassified (or recycled) to profit or loss at a future point in time (for example, net gain on hedge of a net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) would be presented separately from items which will never be reclassified (for example, actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendments will affect presentation only and have no impact on the financial position or performance. The Group expects to adopt the amendments from 1 January 2013.

HKAS 19 (2011) includes a number of amendments that range from fundamental changes to simple clarifications and re-wording. The revised standard introduces significant changes in the accounting for defined benefit pension plans including removing the choice to defer the recognition of actuarial gains and losses. Other changes include modifications to the timing of recognition for termination benefits, the classification of short-term employee benefits and disclosures of defined benefit plans. The Group expects to adopt HKAS 19 (2011) from 1 January 2013.

The HKAS 32 Amendments clarify the meaning of “currently has a legally enforceable right to setoff” for offsetting financial assets and financial liabilities. The amendments also clarify the application of the offsetting criteria in HKAS 32 to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The amendments are not expected to have any impact on the financial position or performance of the Group upon adoption on 1 January 2014.

The Annual Improvements to HKFRSs 2009-2011 Cycle issued in June 2012 sets out amendments to a number of HKFRSs. The Group expects to adopt the amendments from 1 January 2013. There are separate transitional provisions for each standard. While the adoption of some of the amendments may result in changes in accounting policies, none of these amendments are expected to have a significant financial impact on the Group. Those amendments that are expected to have a significant impact on the Group’s policies are as follows:

(a) HKAS 1 Presentation of Financial Statements: Clarifies the difference between voluntary additional comparative information and the minimum required comparative information. Generally, the minimum required comparative period is the previous period. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the previous period. The additional comparative information does not need to contain a complete set of financial statements.

I – 13

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

In addition, the amendment clarifies that the opening statement of financial position as at the beginning of the preceding period must be presented when an entity changes its accounting policies; makes retrospective restatements or makes reclassifications, and that change has a material effect on the statement of financial position. However, the related notes to the opening statement of financial position as at the beginning of the preceding period are not required to be presented.

(b) HKAS 32 Financial Instruments: Presentation: Clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with HKAS 12 Income Taxes. The amendment removes existing income tax requirements from HKAS 32 and requires entities to apply the requirements in HKAS 12 to any income tax arising from distributions to equity holders.

3. Operating segment information

For management purposes, the Group is organised into business units based on their products and services, and has six reportable operating segments as follows:

(a) the property development segment engages in the development of residential, industrial and commercial properties;
(b) the property investment segment invests in residential, industrial and commercial properties for their rental income potential;
(c) the property management segment engages in the management of both properties developed by the Group and external parties;
(d) the transportation services segment consists of the provision of passenger transportation services, automobile maintenance and other related services;
(e) the manufacturing segment engages in the manufacture and sale of industrial and commercial products; and
(f) the “others” segment comprises, principally, the manufacture and sale of aluminum alloy products and other businesses.

I – 14

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Management monitors the operating results of the Group’s business units separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit, which is a measure of adjusted profit before tax. The adjusted profit before tax is measured consistently with the Group’s profit before tax except that interest income, finance costs, dividend income, fair value gains from the Group’s financial instruments as well as head office and corporate expenses are excluded from this measurement.

Segment assets exclude deferred tax assets, pledged deposits, restricted cash, cash and cash equivalents, equity investments at fair value through profit or loss, derivative financial instruments and other unallocated head office and corporate assets as these assets are managed on a group basis.

Segment liabilities exclude derivative financial instruments, interest-bearing bank and other borrowings, an amount due to the ultimate holding company, tax payable, an amount due to the immediate holding company, deferred tax liabilities and other unallocated head office and corporate liabilities as these liabilities are managed on a group basis.

Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

Year ended 31 December 2012 Segment revenue: Sales to customers Intersegment sales Reconciliation Elimination of intersegment sales Revenue Segment results before increase in fair value of investment properties Increase in fair value of investment properties Segment results after increase in fair value of investment properties	Property development HK$’000 6,013,545 – 6,013,545 2,500,891 – 2,500,891	Property investment HK$’000 514,998 6,412 521,410 530,936 470,895 1,001,831	Property management HK$’000 1,062,627 3,640 1,066,267 27,351 – 27,351	Transportation services HK$’000 236,116 – 236,116 12,413 – 12,413	Manufacturing HK$’000 333,785 – 333,785 9,882 – 9,882	Others HK$’000 407,183 192,660 599,843 31,168 – 31,168	Total HK$’000 8,568,254 202,712
							8,770,966 (202,712)
							8,568,254

							3,112,641 470,895
							3,583,536

I – 15

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Year ended 31 December 2012 Property development Property investment Property management Transportation services Manufacturing Others HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Reconciliation Elimination of intersegment results Finance income Dividend income and unallocated gains Gain on bargain purchases Remeasurement gain on investment in associates in step acquisitions Fair value gains of the financial instruments, net Corporate and other unallocated expenses Finance costs Profit before tax Segment assets 29,984,330 13,459,697 103,022 361,629 150,407 2,390,302 Reconciliation Corporate and other unallocated assets Total assets Segment liabilities 6,137,842 988,033 276,902 268,310 39,363 1,269,637 Reconciliation Corporate and other unallocated liabilities Total liabilities Other segment information: Depreciation 26,318 7,901 9,342 35,252 3,841 21,497 Amortisation of vehicle licences – – – 6,332 – – Amortisation of prepaid land lease payments – – – – – 1,497 Share of profits and losses of associates 647,645 139,463 5,581 4,869 – 21,379 Share of profits and losses of jointly-controlled entities – – – – – 48,524 Investments in associates 4,881,970 97,003 16,432 49,986 15,133 162,993 Investments in jointly-controlled entities 62,195 – – – – 55,929 Capital expenditure* 7,863,542 2,426,525 10,496 58,225 6,208 1,021,264	Total HK$’000 (42,841) 472,427 23,855 200,586 39,188 2,269 (97,670) (479,549)
	3,701,801

	46,449,387 7,942,620
	54,392,007

	8,980,087 25,902,077 34,882,164

	104,151 6,332 1,497 818,937 48,524 5,223,517 118,124 11,386,260

Capital expenditure consists of additions to property, plant and equipment, investment properties, properties under development and completed properties held for sale including assets from the acquisition of subsidiaries.

I – 16

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Year ended 31 December 2011 Segment revenue: Sales to customers Intersegment sales Reconciliation Elimination of intersegment sales Revenue Segment results before increase in fair value of investment properties Increase in fair value of investment properties Segment results after increase in fair value of investment properties Reconciliation Elimination of intersegment results Finance income Dividend income and unallocated gains Fair value gains of the financial instruments, net Corporate and other unallocated expenses Finance costs Profit before tax Segment assets Reconciliation Corporate and other unallocated assets Total assets Segment liabilities Reconciliation Corporate and other unallocated liabilities Total liabilities	Property development HK$’000 5,053,060 49,890 5,102,950 1,808,821 – 1,808,821 26,314,617 3,735,697	Property investment HK$’000 446,782 5,756 452,538 479,356 311,316 790,672 7,366,521 464,483	Property management HK$’000 899,707 6,441 906,148 19,306 – 19,306 137,780 297,681	Transportation services HK$’000 240,678 – 240,678 13,525 – 13,525 360,719 264,360	Manufacturing HK$’000 311,489 – 311,489 12,781 – 12,781 208,446 94,779	Others HK$’000 368,868 86,716 455,584 214,616 – 214,616 969,664 198,225	Total HK$’000 7,320,584 148,803
							7,469,387 (148,803)
							7,320,584

							2,548,405 311,316
							2,859,721 (75,124) 369,333 22,038 64,784 (147,897) (200,562)
							2,892,293

							35,357,747 6,182,877
							41,540,624

							5,055,225 19,472,462
							24,527,687

I – 17

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Year ended	Property	Property	Property	Transportation
31 December 2011	development	investment	management	services	Manufacturing	Others	Total
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Other segment information:
Depreciation	15,715	9,805	8,726	34,833	7,649	12,662	89,390
Amortisation of vehicle licences	–	–	–	6,446	–	–	6,446
Amortisation of prepaid land
lease payments	–	–	–	–	–	1,546	1,546
Impairment loss of an investment
in an associate	200,000	–	–	–	–	–	200,000
Share of profits and
losses of associates	441,236	134,046	5,177	4,706	–	24,410	609,575
Share of profits and losses of
jointly-controlled entities	–	–	–	–	–	185,265	185,265
Investments in associates	4,624,886	115,090	15,013	47,129	15,133	458,830	5,276,081
Investments in
jointly-controlled entities	61,695	–	–	–	–	369,171	430,866
Capital expenditure	8,140,824	35,207	18,023	12,570	8,577	13,337	8,228,538

As the Group generates substantially all of its revenues from customers domiciled in the PRC, no geographical information is presented.

4. Revenue, other income and gains

Revenue, which is also the Group’s turnover, represents proceeds from the sale of properties, commercial and industrial goods, rental income, management fee income, income from transportation and others.

I – 18

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

An analysis of revenue, other income and gains is as follows:

Revenue Sale of properties Gross management fee income Gross rental income from investment properties Sale of commercial and industrial goods Income from transportation Others Other income Bank interest income Interest income from: Held-to-maturity investment A jointly-controlled entity Associates A non-controlling shareholder of a subsidiary Finance income from independent third parties Others Gains Gain on disposal of a held-for-trading investment Gain on disposal of items of property, plant and equipment Gain on bargain purchases Remeasurement gain on investment in associates in step acquisitions Others Other income and gains	2012 HK$’000 6,013,545 1,062,627 514,998 333,785 236,116 407,183 8,568,254 93,601 39,827 198,235 17,824 – 122,940 86,944 559,371 4,779 3,533 200,586 39,188 5,965 254,051 813,422	2011 HK$’000 5,053,060 899,707 446,782 311,489 240,678 368,868
		7,320,584
		67,860 48,374 119,389 5,848 7,432 120,430 92,461
		461,794
		– 1,395 – – 589
		1,984
		463,778

I – 19

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. Profit before tax

The Group’s profit before tax is arrived at after charging/(crediting):

Cost of inventories sold Cost of services provided Auditors’ remuneration Depreciation Impairment of trade receivables Reversal of impairment of trade receivables Impairment of other receivables Impairment loss of an investment in an associate Direct operating expenses (including repairs and maintenance) arising on rental-earning investment properties Minimum lease payments under operating leases in respect of land and buildings Amortisation of vehicle licences Amortisation of prepaid land lease payments Employee benefit expense (excluding directors’ and chief executive’s remuneration): Wages and salaries Equity-settled share option expense Pension scheme contributions Less: Amount capitalised Net: Pension scheme contributions Foreign exchange differences, net Rental income on investment properties less direct operating expenses of HK$68,397,000 (2011: HK$73,027,000) Gain on disposal of a held-for-trading investment Gain on disposal of items of property, plant and equipment Gain on bargain purchases Remeasurement gain on investment in associates in step acquisitions	2012 HK$’000 3,912,150 971,553 5,100 104,151 3,758 (9,111) 14,971 – 68,397 8,358 6,332 1,497 792,138 12,683 104,199 (31,260) 72,939 877,760 (3,085) (446,601) (4,779) (3,533) (200,586) (39,188)	2011 HK$’000 3,207,965 738,623 4,650 89,390 1,632 (3,356) – 200,000 73,027 11,968 6,446 1,546 713,937 19,926 99,663 (31,401) 68,262 802,125 8,727 (373,755) – (1,395) – –

I – 20

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

6. Finance costs

An analysis of finance costs is as follows:

Interest on: Bank loans Other borrowings Total interest expense on financial liabilities not at fair value through profit or loss Less: Interest capitalised Other finance costs	2012 HK$’000 1,102,414 81,366 1,183,780 (721,942) 461,838 17,711 479,549	2011 HK$’000 672,215 – 672,215 (538,970) 133,245 67,317 200,562

The average capitalisation rate for the year used to determine the amount of borrowing costs eligible for capitalisation was 7.28% (2011: 5.55%).

7. Income tax

Hong Kong profits tax has been provided at the rate of 16.5% (2011: 16.5%) on the estimated assessable profits arising in Hong Kong during the year. No provision for Hong Kong profits tax has been made as the Group had no assessable profits arising in Hong Kong during the year (2011: Nil).

Taxes on profits assessable in Mainland China are calculated at the rates of tax prevailing in the provinces in which the Group operates.

Under the relevant income tax law, the PRC subsidiaries are subject to corporate income tax (“CIT”) at a statutory rate of 25% on their respective taxable income during the year.

PRC LAT 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 and all property development expenditures. LAT of HK$461,419,000 is charged to the consolidated income statement for the year (2011: HK$478,451,000).

I – 21

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Group: Current – Mainland China LAT in Mainland China Deferred Mainland China corporate income tax Total tax charge for the year	2012 HK$’000 546,937 461,419 133,205 1,141,561	2011 HK$’000 555,531 478,451 42,552
		1,076,534

The share of taxes attributable to associates and jointly-controlled entities amounting to HK$933,546,000 (2011: HK$723,512,000) and HK$16,038,000 (2011: HK$72,277,000), respectively, are included in “Share of profits and losses of associates” and “Share of profits and losses of jointly-controlled entities” on the face of the consolidated income statement.

8. Dividends

Interim – HK7 cents (2011: HK7 cents) per ordinary share Adjustment to prior year’s final dividend Proposed final dividend of HK11 cents (2011: final dividend of HK8 cents) per ordinary share	2012 HK$’000 253,822 – 410,192 664,014	2011 HK$’000 247,798 238 290,082
		538,118

The proposed final dividend for the year is subject to the approval of the Company’s shareholders at the forthcoming annual general meeting.

I – 22

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

9. Earnings per share attributable to ordinary equity holders of the parent

The calculation of the basic earnings per share amount is based on the profit for the year attributable to ordinary equity holders of the parent, and the weighted average number of ordinary shares of 3,640,042,538 (2011: 3,551,123,432) in issue during the year.

No adjustment has been made to the basic earnings per share amounts presented for the year ended 31 December 2012 in respect of a dilution as the impact of the share options outstanding had an anti-dilutive effect on the basic earnings per share amounts presented.

The calculation of the diluted earnings per share amount for the year ended 31 December 2011 is based on the profit for the year attributable to ordinary equity holders of the parent. The weighted average number of ordinary shares used in the calculation is the number of ordinary shares in issue during the year, as used in the basic earnings per share calculation, and the weighted average number of ordinary shares assumed to have been issued at no consideration on the deemed exercise or conversion of all dilutive potential ordinary shares into ordinary shares.

The calculations of basic and diluted earnings per share amounts are based on:

Earnings Profit attributable to ordinary equity holders of the parent, used in the basic and diluted earnings per share calculations Shares Weighted average number of ordinary shares in issue during the year used in the basic earnings per share calculation Effect of dilution – weighted average number of ordinary shares: Share options	2012 2011 HK$’000 HK$’000 2,156,069 1,522,078 Number of shares 2012 2011 3,640,042,538 3,551,123,432 – 418,557 3,640,042,538 3,551,541,989	2011 HK$’000 1,522,078

		3,551,541,989

I – 23

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

10. Trade receivables

Trade receivables Impairment	2012 HK$’000 285,796 (30,939) 254,857	2011 HK$’000 181,667 (38,260)
		143,407

Under normal circumstances, the Group does not grant any credit terms to its customers. The Group seeks to maintain strict control over its outstanding receivables and to minimise credit risk. In view of the aforementioned and the fact that the Group’s trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non-interest-bearing.

An aged analysis of the trade receivables as at the end of the reporting period, based on the contract date and net of provision, is as follows:

Within one year One to two years Two to three years	2012 HK$’000 252,580 2,076 201 254,857	2011 HK$’000 131,726 2,316 9,365
		143,407

I – 24

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

11. Trade payables

An aged analysis of the trade payables as at the end of the reporting period, based on the invoice date, is as follows:

Within one year One to two years Two to three years Over three years	2012 HK$’000 649,910 12,099 1,197 40,280 703,486	2011 HK$’000 221,772 1,069 6,818 35,058
		264,717

The trade payables are non-interest-bearing.

12. Pledge of assets

At the end of the reporting period, the Group’s bank loans amounting to HK$3,762,403,000 (2011: HK$1,538,960,000) were secured by:

(i) certain of the Group’s land and buildings with a net book value of approximately HK$1,205,866,000 (2011: HK$4,742,000);
(ii) certain of the Group’s properties under development with a net book value of approximately HK$1,498,849,000 (2011: HK$1,585,366,000);
(iii) certain of the Group’s investment properties with a net book value of approximately HK$4,614,496,000 (2011: HK$694,920,000);
(iv) certain of the Group’s bank deposits with a net book value of HK$267,228,000 (2011: HK$12,427,000); and
(v) certain of the Group’s completed properties held for sale with a net book value of approximately HK$45,410,000 (2011: Nil).

I – 25

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

13. Capital commitments

The Group had the following capital commitments at the end of the reporting period:

Commitments in respect of acquisition of land and buildings, and development costs attributable to properties under development: Contracted, but not provided for Authorised, but not contracted for	2012 HK$’000 4,262,180 502,724 4,764,904	2011 HK$’000 5,683,011
		1,641,265
		7,324,276

14. Contingent liabilities

At the end of the reporting period, contingent liabilities not provided for in the financial statements were as follows:

As at 31 December 2012, the Group has given guarantees to a maximum extent of approximately HK$1,948,307,000 (2011: HK$1,401,107,000) to banks for housing loans extended by the banks to the purchasers of the Group’s properties.

Pursuant to the terms of the guarantees, if there is default of the mortgage payments by these purchasers, the Group is responsible for repaying the outstanding mortgage loans together with any accrued interest and penalty owed by the defaulted purchasers to banks. The Group is then entitled to take over the legal title of the related properties. The Group’s guarantee period commences from the date of grant of the relevant mortgage loan and ends after the buyer of the Group’s properties obtained the individual property ownership certificate.

The directors consider that in case of default in payments, the net realisable value of the related properties can cover the repayment of the outstanding mortgage loans together with any accrued interest and penalty and therefore no provision has been made in connection with the guarantees.

I – 26

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

15. Related party transactions

The Group had the following material transactions with related parties during the year:

		2012	2011
	Notes	HK$’000	HK$’000
Shum Yip Holdings Company
Limited, the immediate
holding company:
Rental expenses paid	(i)	1,989	5,479
Associates:
Sales of products	(ii)	67,238	–
Purchase of properties	(iii)	–	721,203
Interest income		17,825	5,848
A jointly-controlled entity:
Interest income		198,235	119,389
Interest expenses paid to
a fellow subsidiary	(iv)	17,711	–
Management fee from
a fellow subsidiary		6,147	–

Notes:

(i) The rentals were recognised at prices based on mutual agreement between the parties.
(ii) The sales to the associates were made according to the published prices and conditions offered to the major customers of the Group.
(iii) The purchase of properties from an associate for the year ended 31 December 2011 was made at a price mutually agreed between the parties.
(iv) Interest expenses were calculated for the amount which the Group had borrowed from a fellow subsidiary. The interest rate charged for the balance with the fellow subsidiary was the one-year benchmark lending rate of the People’s Bank of China.

I – 27

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

16. Events after the reporting period

(i) On 17 January 2013, an acquisition agreement was entered into between the Group and Shum Yip Holdings. The Group has conditionally agreed to acquire the entire issued share capital of Shenzhen Silicon Valley Investment Limited (“Shenzhen Silicon Valley”) from Shum Yip Holdings at a consideration to be satisfied by way of allotment and issue of consideration shares to Shum Yip Holdings. The fair value of the consideration will be determined on the completion date of the acquisition. Shenzhen Silicon Valley is engaged in property development and property investment in Shenzhen, the PRC. At the date of approval of these financial statements, the transaction was not completed yet.
(ii) Pursuant to the undertaking letter given by the Shenzhen Kezhigu Investment Limited (“Kezhigu”), a fellow subsidiary of the Group, to the Group dated 25 February 2013, Kezhigu has agreed that the purchase of certain properties from the Group shall be conditional upon the approval of the independent shareholders at the extraordinary general meeting of the Company. In the event that the aforesaid shareholders’ approval is not obtained, Kezhigu shall enter into the relevant termination agreement(s) and/or arrangements with the Group in connection with the termination of the purchase of the properties to the effect that the purchase of the properties will be terminated and will not be completed with the entire consideration of HK$338,842,000 being refunded to Kezhigu by the Group.

I – 28

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

( B) AUDITED CONSOLIDATED FINANCIAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2011

CONSOLIDATED INCOME STATEMENT

Year ended 31 December 2011

Notes REVENUE 5 Cost of sales Gross profit Other income and gains 5 Fair value gains/(losses), net: Equity investments at fair value through profit or loss Financial liabilities at fair value through profit or loss Increase in fair value of investment properties 19 Selling and distribution costs Administrative expenses Other expenses Finance costs 7 Share of profits and losses of: Jointly-controlled entities Associates PROFIT BEFORE TAX 6 Income tax expense 10 PROFIT FOR THE YEAR	2011 HK$’000	2010 HK$’000 Restated 6,502,460 (4,158,770) 2,343,690 357,759 (954) 103,019 595,372 (155,349) (661,540) (367,570) (206,000) 39,579 392,521 2,440,527 (863,660) 1,576,867
	7,320,584

	(4,653,449)

	2,667,135

	463,778

	(1,077)
	65,861
	311,316
	(226,787)
	(725,522)
	(256,689)
	(200,562)

	185,265
	609,575

	2,892,293

	(1,076,534)

	1,815,759

I – 29

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes Attributable to: Owners of the parent 11 Non-controlling interests EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT 13 Basic – For profit for the year Diluted – For profit for the year	2011 HK$’000	2010 HK$’000 Restated 1,324,780 252,087

	1,522,078
	293,681
		1,576,867
	1,815,759

		HK37.47 cents



	HK42.86 cents

		HK37.34 cents

	HK42.86 cents

Details of the dividends payable and proposed for the year are disclosed in note 12 to the financial statements.

I – 30

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 December 2011

PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Available-for-sale investments: Changes in fair value Income tax effect Share of other comprehensive income of associates Exchange differences on translation of foreign operations OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX TOTAL COMPREHENSIVE INCOME FOR THE YEAR Attributable to: Owners of the parent Non-controlling interests	2011 HK$’000	2010 HK$’000 1,576,867 (17,520) 3,229 (14,291) 62,588 500,438 548,735 2,125,602 1,830,693 294,909 2,125,602
	1,815,759




	(5,676)
	1,419

	(4,257)

	162,448
	819,615

	977,806


	2,793,565



	2,428,837
	364,728

	2,793,565

I – 31

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 December 2011

Notes NON-CURRENT ASSETS Property, plant and equipment 14 Intangible assets 15 Prepaid land lease payments 16 Goodwill 17 Investment properties 19 Investments in associates 22 Investments in jointly-controlled entities 21 Held-to-maturity investment 23 Available-for-sale investments 24 Other long term assets 25 Deferred tax assets 34 Pledged deposits 30 Total non-current assets CURRENT ASSETS Inventories 26 Completed properties held for sale Properties under development 18 Trade receivables 27 Prepayments, deposits and other receivables 28 Equity investments at fair value through profit or loss 29 Held-to-maturity investment 23 Restricted cash 30 Cash and cash equivalents 30 Total current assets	31 December 2011 HK$’000	31 December 2010 HK$’000 Restated 628,878 84,305 30,738 322,625 4,902,151 5,010,384 171,008 385,938 34,014 156,876 332,348 – 12,059,265 60,286 2,441,670 10,813,762 199,449 2,042,731 20,564 – – 6,179,790 21,758,252	1 January 2010 HK$’000 Restated 586,747 88,092 4,118 322,600 4,105,782 4,970,160 125,927 383,518 46,744 439,635 262,642 –

	630,160
	81,372
	48,863
	322,704
	5,560,792
	5,276,081
	430,866
	–
	29,913
	1,386,939
	438,845
	12,427
			11,335,965
	14,218,962
			63,200 1,775,443 9,404,382 423,933 1,141,814 21,510 – – 6,365,549

	91,677
	3,348,072
	15,111,752
	143,407
	2,995,350
	19,487
	387,968
	126,425
	5,097,524
			19,195,831
	27,321,662

I – 32

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes CURRENT LIABILITIES Interest-bearing bank loans 31 Derivative financial instruments Trade payables 32 Other payables and accruals 33 Due to the ultimate holding company 41(c)(ii) Tax payable Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest-bearing bank loans 31 Deferred tax liabilities 34 Total non-current liabilities Net assets EQUITY Equity attributable to owners of the parent Issued capital 35 Reserves 37(a) Proposed final dividend 12 Non-controlling interests Total equity	31 December 2011 HK$’000	31 December 2010 HK$’000 Restated 9,495,479 65,861 141,725 4,085,327 41,616 1,400,478 15,230,486 6,527,766 18,587,031 2,951,719 935,515 3,887,234 14,699,797 176,828 13,050,515 247,560 13,474,903 1,224,894 14,699,797	1 January 2010 HK$’000 Restated 3,088,485 168,880 88,250 4,471,746 102,390 1,123,261

	4,965,249
	–
	264,717
	4,815,051
	54,641
	1,806,695
			9,043,012
	11,906,353
			10,152,819
	15,415,309
			21,488,784
	29,634,271
			7,374,447 702,659

	11,514,038
	1,107,296
			8,077,106
	12,621,334
			13,411,678
	17,012,937

			176,392 11,966,669 246,948


	181,301
	15,071,996
	290,082
			12,390,009 1,021,669
	15,543,379
	1,469,558
			13,411,678
	17,012,937

I – 33

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 December 2011

Notes
At 1 January 2010
Profit for the year
Other comprehensive
income for the year:
Changes in fair value
of available-for-sale
investments, net of tax
Share of other comprehensive
income of associates
Exchange differences on
translation of foreign
operations
Total comprehensive income for
the year
Adjustment to prior year’s final
dividend
12
Final 2009 dividend declared
Acquisition of
non-controlling interests
Share options exercised
35/37
Share issue expenses
35/37
Share options lapsed
Equity-settled share
option expense
36
Share of reserves of associates
Interim 2010 dividend
12
Proposed final 2010 dividend
12
Dividends paid to
non-controlling shareholders
Transfer from retained profits
At 31 December 2010

Attributable to owners of the parent
Issued
capital
Share
premium
account
Acquisition
of non-
controlling
interests
Capital
redemption
reserve
Share
option
reserve
Capital
reserve
Asset
revaluation
reserve
Available-
for-sale
investment
revaluation
reserve
Statutory
reserve
Exchange
fluctuation
reserve
Retained
profits
Proposed
dividends
Total
Non-
controlling
interests
Total
equity
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
176,392
5,384,872
–
2,036
46,211
59,019
60,940
20,235
1,040,666
1,793,102
3,559,588
246,948
12,390,009
1,021,669
13,411,678
–
–
–
–
–
–
–
–
–
–
1,324,780
–
1,324,780
252,087
1,576,867
–
–
–
–
–
–
–
(14,291)
–
–
–
–
(14,291)
–
(14,291)
–
–
–
–
–
–
(1,768)
–
–
64,356
–
–
62,588
–
62,588
–
–
–
–
–
–
–
–
–
457,616
–
–
457,616
42,822
500,438
–
–
–
–
–
–
(1,768)
(14,291)
–
521,972
1,324,780
–
1,830,693
294,909
2,125,602
–
–
–
–
–
–
–
–
–
–
(612)
612
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(247,560)
(247,560)
–
(247,560)
–
–
(278,831)
–
–
–
–
–
–
–
–
–
(278,831)
(3,530)
(282,361)
436
13,335
–
–
(2,939)
–
–
–
–
–
–
–
10,832
–
10,832
–
(10)
–
–
–
–
–
–
–
–
–
–
(10)
–
(10)
–
–
–
–
(38,125)
–
–
–
–
–
38,125
–
–
–
–
–
–
–
–
10,661
–
–
–
–
–
–
–
10,661
–
10,661
–
–
–
–
6,669
–
–
–
–
–
–
–
6,669
–
6,669
–
–
–
–
–
–
–
–
–
–
(247,560)
–
(247,560)
–
(247,560)
–
–
–
–
–
–
–
–
–
–
(247,560)
247,560
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(88,154)
(88,154)
–
–
–
–
–
–
–
–
129,383
–
(129,383)
–
–
–
–
176,828
5,398,197
(278,831)
2,036
22,477
59,019
59,172
5,944
1,170,049
2,315,074
4,297,378
247,560
13,474,903
1,224,894
14,699,797

I – 34

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Notes
At 1 January 2011
Profit for the year
Other comprehensive
income for the year:
Changes in fair value
of available-for-sale
investments, net of tax
Share of other comprehensive
income of associates
Exchange differences on
translation of foreign
operations
Total comprehensive
income for the year
Adjustment to prior year’s final
dividend
12
Final 2010 dividend declared
Acquisition of
non-controlling interests
Acquisition of
a subsidiary
Share options exercised
35/37
Share issue expenses
35/37
Interim 2011 dividends in
the form of new shares
35/37
Equity-settled share
option expense
36
Share of reserves of associates
Interim 2011 dividend
12
Proposed final 2011 dividend
12
Dividends paid to non-
controlling shareholders
Transfer from retained profits
At 31 December 2011

Attributable to owners of the parent
Issued
capital
Share
premium
account
Acquisition
of non-
controlling
interests
Capital
redemption
reserve
Share
option
reserve
Capital
reserve
Asset
revaluation
reserve
Available-
for-sale
investment
revaluation
reserve
Statutory
reserve
Exchange
fluctuation
reserve
Retained
profits
Proposed
dividends
Total
Non-
controlling
interests
Total
equity
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
176,828
5,398,197
(278,831)
2,036
22,477
59,019
59,172
5,944
1,170,049
2,315,074
4,297,378
247,560
13,474,903
1,224,894
14,699,797
–
–
–
–
–
–
–
–
–
–
1,522,078
–
1,522,078
293,681
1,815,759
–
–
–
–
–
–
–
(4,257)
–
–
–
–
(4,257)
–
(4,257)
–
–
–
–
–
–
4,399
–
–
158,049
–
–
162,448
–
162,448
–
–
–
–
–
–
–
–
–
748,568
–
–
748,568
71,047
819,615
–
–
–
–
–
–
4,399
(4,257)
–
906,617
1,522,078
–
2,428,837
364,728
2,793,565
–
–
–
–
–
–
–
–
–
–
(238)
238
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(247,798)
(247,798)
–
(247,798)
–
–
(32,409)
–
–
–
–
–
–
–
–
–
(32,409)
(19,123)
(51,532)
–
–
–
–
–
–
–
–
–
–
–
–
–
4,936
4,936
170
9,163
–
–
(1,972)
–
–
–
–
–
–
–
7,361
–
7,361
–
(37)
–
–
–
–
–
–
–
–
–
–
(37)
–
(37)
4,303
129,945
–
–
–
–
–
–
–
–
–
–
134,248
–
134,248
–
–
–
–
24,746
–
–
–
–
–
–
–
24,746
–
24,746
–
–
–
–
1,326
–
–
–
–
–
–
–
1,326
–
1,326
–
–
–
–
–
–
–
–
–
–
(247,798)
–
(247,798)
–
(247,798)
–
–
–
–
–
–
–
–
–
–
(290,082)
290,082
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(105,877)
(105,877)
–
–
–
–
–
–
–
–
136,645
–
(136,645)
–
–
–
–
181,301
5,537,268
(311,240)
2,036
46,577
59,019
63,571
1,687
1,306,694
3,221,691
5,144,693
290,082
15,543,379
1,469,558
17,012,937

These reserve accounts comprise the consolidated reserves of HK$15,071,996,000 (2010: HK$13,050,515,000) in the consolidated statement of financial position.

I – 35

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended 31 December 2011

Notes CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax: Adjustments for: Finance costs 7 Finance income Depreciation 6 Increase in fair value of investment properties 19 Dividend income from investments Share of profits and losses of: Associates Jointly-controlled entities Amortisation of vehicle licences 6 Amortisation of prepaid land lease payments 6 Gains on disposal of items of property, plant and equipment 6 Gains on disposal of investment properties 5 Gain on disposal of a subsidiary 5 Impairment loss of an investment in an associate 6 Net fair value gains on financial liabilities at fair value through profit or loss Net fair value losses on equity investments at fair value through profit or loss Equity-settled share option expense 36 Decrease in trade receivables Increase in prepayments, deposits and other receivables Decrease/(increase) in inventories Increase in completed properties for sale Increase in properties under development Increase in trade payables Increase/(decrease) in other payables and accruals Increase/(decrease) in due to the ultimate holding company Increase in restricted cash 30	2011 HK$’000	2010 HK$’000 Restated 2,440,527 206,000 (182,675) 80,417 (595,372) (1,080) (392,521) (39,579) 7,102 294 (2,177) (2,011) (106,906) 307,000 (103,019) 954 10,661 1,627,615 224,484 (896,941) 2,914 (706,456) (943,276) 53,566 (534,014) (60,774) –


	2,892,293

	200,562
	(369,333)
	89,390
	(311,316)
	(1,108)

	(609,575)
	(185,265)
	6,446
	1,546
	(1,395)
	–
	–
	200,000
	(65,861)
	1,077
	24,746

	1,872,207

	56,042
	(929,335)
	(31,391)
	(959,144)
	(3,221,021)
	122,818
	916,924
	13,025
	(126,425)

I – 36

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Notes Cash used in operations Interest paid Mainland China taxes paid Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Dividends received from investments Dividends received from associates Proceeds from disposal of items of property, plant and equipment Proceeds from disposal of investment properties Purchases of items of property, plant and equipment Acquisition of subsidiaries Acquisition of non-controlling interests Proceeds from disposal of a subsidiary Purchases of available-for-sale investments Additions to investment properties Loans to associates Disposal/(additions) of investments in associates Additions to investments in jointly-controlled entities Decrease/(increase) in other long term assets Additions to intangible assets Increase in pledged deposits 30 Net cash flows from/(used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 35 Share issue expenses 35 Dividends paid Dividends paid to non-controlling shareholders New bank loans Repayment of bank loans Net cash flows from financing activities	2011 HK$’000	2010 HK$’000 Restated (1,232,882) (430,935) (496,341) (2,160,158) 174,506 1,080 168,448 3,773 3,251 (67,461) – (141,180) 232,199 (3,177) – (10,415) (76) – 226,727 – – 587,675 10,832 (10) (495,120) (88,154) 5,534,920 (3,752,761) 1,209,707

	(2,286,300)
	(734,806)
	(627,765)

	(3,648,871)


	247,267
	1,108
	581,639
	6,559
	–
	(70,667)
	(17,767)
	(51,533)
	–
	–
	(47,764)
	(207,338)
	624
	(61,695)
	(1,220,952)
	(345)
	(12,427)

	(853,291)


	7,361
	(37)
	(361,348)
	(105,877)
	14,254,267
	(10,550,248)

	3,244,118

I – 37

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes NET DECREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year Effect of foreign exchange rate anges, net CASH AND CASH EQUIVALENTS AT END OF YEAR ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances 30 Non-pledged time deposits with original maturity of less than three months when acquired 30 Cash and cash equivalents as stated in the statement of cash flows	2011 HK$’000	2010 HK$’000 Restated (362,776) 6,365,549 177,017 6,179,790 5,756,809 422,981 6,179,790

	(1,258,044)
	6,179,790
	175,778

	5,097,524



	3,766,916
	1,330,608

	5,097,524

I – 38

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

STATEMENT OF FINANCIAL POSITION

31 December 2011

Notes NON-CURRENT ASSETS Property, plant and equipment 14 Investments in subsidiaries 20 Investments in associates 22 Held-to-maturity investment 23 Available-for-sale investments 24 Total non-current assets CURRENT ASSETS Prepayments, deposits and other receivables 28 Due from subsidiaries 20 Equity investments at fair value through profit or loss 29 Held-to-maturity investment 23 Cash and cash equivalents 30 Total current assets CURRENT LIABILITIES Interest-bearing bank loans 31 Derivative financial instruments Other payables and accruals 33 Due to the ultimate holding company Due to subsidiaries 20 Total current liabilities NET CURRENT ASSETS/(LIABILITIES)	31 December 2011 HK$’000	31 December 2010 HK$’000 2,240 5,934,130 935,532 385,938 1,720 7,259,560 195,233 3,486,988 18,381 – 1,085,605 4,786,207 4,619,235 65,861 139,982 – 57,466 4,882,544 (96,337)

	1,502
	6,625,439
	364,532
	–
	1,720

	6,993,193


	7,710
	4,740,097
	8,027
	387,968
	1,255,619

	6,399,421


	260,000
	–
	54,033
	5,207
	156,983

	476,223

	5,923,198

I – 39

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest-bearing bank loans 31 Total non-current liabilities Net assets EQUITY Issued capital 35 Reserves 37(b) Proposed final dividend 12 Total equity	31 December 2011 HK$’000	31 December 2010 HK$’000 7,163,223
	12,916,391
		1,078,003

	6,599,106
		1,078,003
	6,599,106
		6,085,220
	6,317,285
		176,828 5,660,832 247,560

	181,301
	5,845,902
	290,082
		6,085,220
	6,317,285

I – 40

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO FINANCIAL STATEMENTS

31 December 2011

1. Corporate information

During the year, the Group was involved in the following principal activities:

Property development
Property investment
Property management
Provision of transportation services
Manufacturing and sale of industrial and commercial products

In the opinion of the directors, the immediate holding company of the Group is Shum Yip Holdings Company Limited (“Shum Yip Holdings”, 深業（集團）有限公司), which is a private company incorporated in Hong Kong. The ultimate holding company of the Group is 深業集團有限公司 (formerly 深業投資開發有限公司), which is a private company established in Shenzhen, the People’s Republic of China (the “PRC”).

2.1 Basis of preparation

These financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants, accounting principles generally accepted in Hong Kong and the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for investment properties, derivative financial instruments and equity investments, which have been measured at fair value. These financial statements are presented in Hong Kong dollars (“HK$”) and all values are rounded to the nearest thousand except when otherwise indicated.

I – 41

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 December 2011. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated on consolidation in full.

Total comprehensive income within a subsidiary is attributed to the noncontrolling interest even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

I – 42

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2.2 Changes in accounting policy and disclosures

2.2.1 The Group has adopted the following new and revised HKFRSs for the first time for the current year’s financial statements.

HKFRS 1 Amendment	Amendment to HKFRS 1 First-time Adoption
	of Hong Kong Financial Reporting
	Standards – Limited Exemption from
	Comparative HKFRS 7 Disclosures for
	First-time Adopters
HKAS 24 (Revised)	Related Party Disclosures
HKAS 32 Amendment	Amendments to HKAS 32 Financial
	Instruments: Presentation – Classification of
	Rights Issues
HK(IFRIC)-Int 14	Amendments to HK(IFRIC)-Int 14
Amendments	Prepayments of a Minimum Funding
	Requirement
HK(IFRIC)-Int 19	Extinguishing Financial Liabilities with Equity
	Instruments
Improvements to	Amendments to a number of HKFRSs issued
HKFRSs 2010	in May 2010

Other than as further explained below regarding the impact of HKAS 24 (Revised), and amendments to HKFRS 3, HKAS 1 and HKAS 27 included in Improvements to HKFRSs 2010, the adoption of the new and revised HKFRSs has had no significant financial effect on these financial statements.

The principal effects of adopting these HKFRSs are as follows:

(a) HKAS 24 (Revised) Related Party Disclosures

HKAS 24 (Revised) clarifies and simplifies the definitions of related parties. The new definitions emphasise a symmetrical view of related party relationships and clarify the circumstances in which persons and key management personnel affect related party relationships of an entity. The revised standard also introduces an exemption from the general related party disclosure requirements for transactions with a government and entities that are controlled, jointly-controlled or significantly influenced by the same government as the reporting entity. The accounting policy for related parties has been revised to reflect the changes in the definitions of related parties under the revised standard. The adoption of the revised standard did not have any impact

I – 43

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

on the financial position or performance of the Group. Details of the related party transactions, including the related comparative information, are included in note 41 to the consolidated financial statements.

(b) Improvements to HKFRSs 2010 issued in May 2010 sets out amendments to a number of HKFRSs. There are separate transitional provisions for each standard. While the adoption of some of the amendments may result in changes in accounting policies, none of these amendments has had a significant financial impact on the financial position or performance of the Group. Details of the key amendments most applicable to the Group are as follows:
HKFRS 3 Business Combinations: The amendment clarifies that the amendments to HKFRS 7, HKAS 32 and HKAS 39 that eliminate the exemption for contingent consideration do not apply to contingent consideration that arose from business combinations whose acquisition dates precede the application of HKFRS 3 (as revised in 2008).

In addition, the amendment limits the scope of measurement choices for non-controlling interests. Only the components of non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation are measured at either fair value or at the present ownership instruments’ proportionate share of the acquiree’s identifiable net assets. All other components of noncontrolling interests are measured at their acquisition date fair value, unless another measurement basis is required by another HKFRS.

The amendment also added explicit guidance to clarify the accounting treatment for non-replaced and voluntarily replaced share-based payment awards.

I – 44

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

HKAS 1 Presentation of Financial Statements: The amendment clarifies that an analysis of each component of other comprehensive income can be presented either in the statement of changes in equity or in the notes to the financial statements. The Group elects to present the analysis of each component of other comprehensive income in the statement of changes in equity.
HKAS 27 Consolidated and Separate Financial Statements: The amendment clarifies that the consequential amendments from HKAS 27 (as revised in 2008) made to HKAS 21, HKAS 28 and HKAS 31 shall be applied prospectively for annual periods beginning on or after 1 July 2009 or earlier if HKAS 27 is applied earlier.

2.2.2 Changes in accounting policy for the investments in jointly-controlled entities

During the year, the directors elected to change the accounting policy used to account for the Group’s jointly-controlled entities from proportionate consolidation to the equity method, both of which are allowed under HKAS 31. The directors considered that HKFRS 11 Joint Arrangements, published in June 2011 and being effective for annual periods beginning on or after 1 January 2013, removes the option to account for joint ventures using proportionate consolidation. In addition, the directors also considered that other country’s framework, such as China, requires equity method accounting and does not allow proportionate consolidation, which is consistent with the policy adopted by the Group’s ultimate holding company, 深業集團有限公司 who prepares the statutory financial statements in accordance with the Chinese Accounting Standards (“CAS”). Given the above considerations, the directors believed that the adoption of the equity method for investments in jointly-controlled entities would provide more relevant and comparable information about the economic activity of the Group to the readers of the financial statements. The effect of this change did not result in any impact on the profit and equity attributable to owners of the parent in the periods prior to the change.

I – 45

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

This change in accounting policy has been applied retrospectively and resulted

in:

Revenue Other income and gains Selling and distribution costs Administrative expenses Other expenses Share of profits and losses of: Jointly-controlled entities PROFIT BEFORE TAX Income tax expense PROFIT FOR THE YEAR	Effect of the adoption of equity method (increase/(decrease) in net profit) 2011 2010 HK$’000 HK$’000 (301,622) (82,138) 31,562 21,499 1,932 328 7,653 339 2,933 6 185,265 39,579 (72,277) (20,387) 72,277 20,387 – –

	(301,622)
	31,562
	1,932
	7,653
	2,933

	185,265

	(72,277)
	72,277

	–

I – 46

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Investments in jointly- controlled entities Property, plant and equipment Other long term assets NON-CURRENT ASSETS Inventories Properties under development Trade receivables Loans to a jointly-controlled entity included in prepayments, deposits and other receivables Prepayments, deposits and other receivables excluded loans to a jointly-controlled entity Cash and cash equivalents CURRENT ASSETS Interest-bearing bank loans Other payables and accruals Tax payable CURRENT LIABILITIES Interest-bearing bank loans NON-CURRENT LIABILITIES NET ASSETS	Effect of the adoption of equity method (increase/(decrease) in net assets) 31 December 31 December 1 January 2011 2010 2010 HK$’000 HK$’000 HK$’000 430,866 171,008 125,927 (1,186) (1,237) (667) (943,305) – (726,684) (513,625) 169,771 (601,424) (1,001) (3) (4) – (1,346,674) – (151,916) – (109,003) 440,754 697,992 235,748 (110,779) (8,903) (1,505) (76,268) (65,673) (68,688) 100,790 (723,261) 56,548 – 120,003 173,778 144,301 164,490 15,730 98,833 47,189 25,382 243,134 331,682 214,890 169,701 221,808 329,986 169,701 221,808 329,986 – – –
	430,866
	(1,186)
	(943,305)

	(513,625)

	(1,001)
	–
	(151,916)
	440,754
	(110,779)
	(76,268)

	100,790

	–
	144,301
	98,833

	243,134

	169,701

	169,701

	–

I – 47

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax: Adjustments for: Interest income Depreciation Share of profits and losses of: Jointly-controlled entities Decrease/(increase) in trade receivables Decrease/(increase) in prepayments, deposits and other receivables Decrease/(increase) in inventories Increase in properties under development Increase/(decrease) in other payables and accruals Cash from/(used in) operations Interest paid Mainland China taxes paid Net cash flows from/(used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Additions to investments in jointly-controlled entities Additions in other long term assets Purchases of items of property, plant and equipment Net cash flows from/(used in) investing activities	Effect of the adoption of equity method (increase/(decrease)) 2011 2010 HK$’000 HK$’000 (72,277) (20,387) (31,562) (21,499) (176) (167) (185,265) (39,579) (289,280) (81,632) 151,916 (109,003) 325,495 (454,847) 998 (1) – 552,223 12,164 (156,322) 201,293 (249,582) 51,460 52,767 20,631 – 273,384 (196,815) 31,562 21,499 (61,695) – (439,828) – 65 714 (469,896) 22,213

	(72,277)

	(31,562)
	(176)

	(185,265)

	(289,280)

	151,916
	325,495
	998
	–
	12,164

	201,293
	51,460
	20,631

	273,384


	31,562
	(61,695)
	(439,828)
	65

	(469,896)

I – 48

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CASH FLOWS FROM FINANCING ACTIVITIES Repayment of bank loans Net cash flows from financing activities NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year Effect of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF YEAR	Effect of the adoption of equity method (increase/(decrease)) 2011 2010 HK$’000 HK$’000 188,787 180,005 188,787 180,005 (7,725) 5,403 (65,673) (68,688) (2,870) (2,388) (76,268) (65,673)

	188,787

	188,787

	(7,725)
	(65,673)
	(2,870)

	(76,268)

I – 49

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2.3 Issued but not yet effective Hong Fong Financial Rporting Standards

The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these financial statements.

HKFRS 1 Amendments	Amendment to HKFRS 1 First-time Adoption
	of Hong Kong Financial Reporting
	Standards – Severe Hyperinflation and
	Removal of Fixed Dates for First-time
	Adopters1
HKFRS 7 Amendments	Amendments to HKFRS 7 Financial
	Instruments: Disclosures – Transfers of
	Financial Assets1
	Amendments to HKFRS 7 Financial
	Instruments: Disclosures – Offsetting
	Financial Assets and Financial Liabilities4
HKFRS 9	Financial Instruments6
HKFRS 10	Consolidated Financial Statements4
HKFRS 11	Joint Arrangements4
HKFRS 12	Disclosure of Interests in Other Entities4
HKFRS 13	Fair Value Measurement4
HKAS 1 Amendments	Amendments to Presentation of Financial
	Statements – Presentation of Items of Other
	Comprehensive Income3
HKAS 12 Amendments	Amendments to HKAS 12 Income Taxes –
	Deferred Tax: Recovery of Underlying
	Assets2
HKAS 32 Amendments	Amendments to HKAS 32 Financial
	Instruments: Presentation – Offsetting
	Financial Assets and Financial Liabilities5
HKAS 19 (2011)	Employee Benefits4
HKAS 27 (2011)	Separate Financial Statements4
HKAS 28 (2011)	Investments in Associates and Joint Ventures4
HK(IFRIC)-Int 20	Stripping Costs in the Production Phase of a
	Surface Mine4

1 Effective for annual periods beginning on or after 1 July 2011 2 Effective for annual periods beginning on or after 1 January 2012 3 Effective for annual periods beginning on or after 1 July 2012 4 Effective for annual periods beginning on or after 1 January 2013 5 Effective for annual periods beginning on or after 1 January 2014 6 Effective for annual periods beginning on or after 1 January 2015

I – 50

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Further information about those changes that are expected to significantly affect the Group is as follows:

HKFRS 9 issued in November 2009 is the first part of phase 1 of a comprehensive project to entirely replace HKAS 39 Financial Instruments: Recognition and Measurement . This phase focuses on the classification and measurement of financial assets. Instead of classifying financial assets into four categories, an entity shall classify financial assets as subsequently measured at either amortised cost or fair value, on the basis of both the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. This aims to improve and simplify the approach for the classification and measurement of financial assets compared with the requirements of HKAS 39.

I – 51

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

HKFRS 11 replaces HKAS 31 Interests in Joint Ventures and HK(SIC)-Int 13 Jointly-controlled Entities – Non-Monetary Contributions by Venturers. It describes the accounting for joint arrangements with joint control. It addresses only two forms of joint arrangements, i.e., joint operations and joint ventures, and removes the option to account for joint ventures using proportionate consolidation.

HKFRS 12 includes the disclosure requirements for subsidiaries, joint arrangements, associates and structured entities that are previously included in HKAS 27 Consolidated and Separate Financial Statements, HKAS 31 Interests in Joint Ventures and HKAS 28 Investments in Associates. It also introduces a number of new disclosure requirements for these entities.

Consequential amendments were made to HKAS 27 and HKAS 28 as a result of the issuance of HKFRS 10, HKFRS 11 and HKFRS 12. The Group expects to adopt HKFRS 10, HKFRS 11, HKFRS 12 and the consequential amendments to HKAS 27 and HKAS 28 from 1 January 2013.

Amendments to HKAS 1 change the grouping of items presented in OCI. Items that could be reclassified (or recycled) to profit or loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items which will never be reclassified. The Group expects to adopt the amendments from 1 January 2013.

HKAS 12 Amendments clarify the determination of deferred tax for investment property measured at fair value. The amendments introduce a rebuttable presumption that deferred tax on investment property measured at fair value should be determined on the basis that its carrying amount will be recovered through sale. Furthermore, the amendments incorporate the requirement previously in HK(SIC)-Int 21 Income TaxesRecovery of Revalued Non-Depreciable Assets that deferred tax on non-depreciable assets, measured using the revaluation model in HKAS 16, should always be measured on a sale basis. The Group expects to adopt HKAS 12 Amendments from 1 January 2012. Upon the adoption, the Group’s deferred tax liability with respect to investment properties located in Mainland China is expected to be reduced.

I – 52

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2.4 Summary of significant accounting policies

Subsidiaries

A subsidiary is an entity in which the Company, directly or indirectly, controls more than half of its voting power or issued share capital or controls the composition of its board of directors; or over which the Company has a contractual right to exercise a dominant influence with respect to that entity’s financial and operating policies.

The results of subsidiaries are included in the Company’s income statement to the extent of dividends received and receivable. The Company’s investments in subsidiaries that are not classified as held for sale in accordance with HKFRS 5 are stated at cost less any impairment losses.

Jointly-controlled entities

A jointly-controlled entity is a joint venture that is subject to joint control, resulting in none of the participating parties having unilateral control over the economic activity of the jointly-controlled entity.

The Group’s investments in jointly-controlled entities are stated in the consolidated statement of financial position at the Group’s share of net assets under the equity method of accounting, less any impairment losses. The Group’s share of the post-acquisition results and reserves of jointly-controlled entities is included in the consolidated income statement and consolidated reserves, respectively. Where the profit sharing ratio is different to the Group’s equity interest, the share of postacquisition results of the jointly-controlled entities is determined based on the agreed profit sharing ratio. Unrealised gains and losses resulting from transactions between the Group and its jointly-controlled entities are eliminated to the extent of the Group’s investments in the jointly-controlled entities, except where unrealised losses provide evidence of an impairment of the asset transferred. Goodwill arising from the acquisition of jointly-controlled entities is included as part of the Group’s investments in jointly-controlled entities.

The results of jointly-controlled entities are included in the Company’s income statement to the extent of dividends received and receivable. The Company’s investments in jointly-controlled entities are treated as non-current assets and are stated at cost less any impairment losses.

When an investment in a jointly-controlled entity is classified as held for sale, it is accounted for in accordance with HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

I – 53

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Associates

An associate is an entity, not being a subsidiary or jointly-controlled entity, in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence.

The Group’s investments in associates are stated in the consolidated statement of financial position at the Group’s share of net assets under the equity method of accounting, less any impairment losses. The Group’s share of the post-acquisition results and reserves of associates is included in the consolidated income statement and consolidated reserves, respectively. Unrealised gains and losses resulting from transactions between the Group and its associates are eliminated to the extent of the Group’s investments in the associates, except where unrealised losses provide evidence of an impairment of the asset transferred. Goodwill arising from the acquisition of associates is included as part of the Group’s investments in associates and is not individually tested for impairment.

The results of associates are included in the Company’s income statement to the extent of dividends received and receivable. The Company’s investments in associates are treated as non-current assets and are stated at cost less any impairment losses.

When an investment in an associate is classified as held for sale, it is accounted for in accordance with HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of net assets in the event of liquidation either at fair value or at the proportionate share of the acquiree’s identifiable net assets. All other components of non-controlling interests are measured at fair value. Acquisition costs are expensed as incurred.

I – 54

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with HKAS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of HKAS 39, it is measured in accordance with the appropriate HKFRS.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any fair value of the Group’s previously held equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as a gain on bargain purchase.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Impairment is determined by assessing the recoverable amount of the cashgenerating unit (group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.

I – 55

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Where goodwill forms part of a cash-generating unit (group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Impairment of non-financial assets

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, construction contract assets, financial assets, investment properties, goodwill and non-current assets/a disposal groups classified as held for sale), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs to sell, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to the income statement in the period in which it arises in those expense categories consistent with the function of the impaired asset, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill and certain financial assets is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/ amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to the income statement in the period in which it arises, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

I – 56

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Related parties

A party is considered to be related to the Group if:

(a) the party is a person or a close member of that person’s family and that person,
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;

(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group;
(vi) the entity is controlled or jointly-controlled by a person identified in (a); and
(vii) person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Property, plant and equipment and depreciation

Property, plant and equipment, other than construction in progress, are stated at cost or valuation less accumulated depreciation and any impairment losses. When an item of property, plant and equipment is classified as held for sale or when it is part of a disposal group classified as held for sale, it is not depreciated and is accounted for in accordance with HKFRS 5 Non-current assets and disposal groups held for sale. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the income statement in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly.

Valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Changes in the values of property, plant and equipment are dealt with as movements in the asset revaluation reserve. If the total of this reserve is insufficient to cover a deficit, on an individual asset basis, the excess of the deficit is charged to the income statement. Any subsequent revaluation surplus is credited to the income statement to the extent of the deficit previously charged. An annual transfer from the asset revaluation reserve to retained profits is made for the difference between the depreciation based on the revalued carrying amount of an asset and the depreciation based on the asset’s original cost. On disposal of a revalued asset, the relevant portion of the asset revaluation reserve realised in respect of previous valuations is transferred to retained profits as a movement in reserves.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:

Leasehold land and buildings	Over the lease terms
Leasehold improvements	20%
Furniture, fixtures and equipment	10% to 25%
Motor vehicles	9% to 20%
Plant and machinery	10% to 25%

Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in the income statement in the year the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.

Construction in progress represents a building under construction, which is stated at cost less any impairment losses, and is not depreciated. Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

Investment properties

Investment properties are interests in land and buildings (including the leasehold interest under an operating lease for a property which would otherwise meet the definition of an investment property) held to earn rental income and/or for capital appreciation, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the end of the reporting period.

Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the year in which they arise.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Any gains or losses on the retirement or disposal of an investment property are recognised in the income statement in the year of the retirement or disposal.

For a transfer from investment properties to owner-occupied properties or inventories, the deemed cost of a property for subsequent accounting is its fair value at the date of change in use. If a property occupied by the Group as an owneroccupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under “Property, plant and equipment and depreciation” up to the date of change in use, and any difference at that date between the carrying amount and the fair value of the property is accounted for as a revaluation in accordance with the policy stated under “Property, plant and equipment and depreciation” above. For a transfer from inventories to investment properties, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement.

Intangible assets (other than goodwill)

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

Vehicle licences acquired by the Group are stated at cost less any impairment losses and are amortised on the straight-line basis over their estimated useful lives of 15 to 20 years.

Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the Group is the lessor, assets leased by the Group under operating leases are included in non-current assets, and rentals receivable under the operating leases are credited to the income statement on the straight-line basis over the lease terms. Where the Group is the lessee, rentals payable under the operating leases are charged to the income statement on the straight-line basis over the lease terms.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Prepaid land lease payments under operating leases are initially stated at cost and subsequently recognised on the straight-line basis over the lease terms. When the lease payments cannot be allocated reliably between the land and buildings elements, the entire lease payments are included in the cost of the land and buildings as a finance lease in property, plant and equipment.

Investments and other financial assets

Initial recognition and measurement

Financial assets within the scope of HKAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables and available-forsale financial investments, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

The Group’s financial assets include cash and bank balances, restricted cash, pledged deposits, trade and other receivables, loans receivable, quoted and unquoted financial instruments, and derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of sale in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments as defined by HKAS 39.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in other income and gains or finance costs in the income statement. These net fair value changes do not include any dividends or interest earned on these financial assets, which are recognised in accordance with the policies set out for “Revenue recognition” below.

Financial assets designated upon initial recognition at fair value through profit or loss are designated at the date of initial recognition and only if the criteria under HKAS 39 are satisfied.

The Group evaluates its financial assets at fair value through profit or loss (held for trading) to assess whether the intent to sell them in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and management’s intent to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets. The reclassification from financial assets at fair value through profit or loss to loans and receivables, available-for-sale financial assets or held-to-maturity investments depends on the nature of the assets. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation as these instruments cannot be reclassified after initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are subsequently measured at amortised cost using the effective interest rate method less any allowance for impairment. Amortised cost is calculated by taking into account any other expense discount or premium on acquisition and includes fees or costs that are an integral part of the effective interest. The effective interest rate amortisation is included in finance income in the income statement. The loss arising from impairment is recognised in the income statement in finance costs for loans and in other expenses for receivables.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held to maturity when the Group has the positive intention and ability to hold them to maturity. Held-to-maturity investments are subsequently measured at amortised cost using the effective interest rate method less any allowance for impairment. Amortised cost calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in other income and gains in the income statement. The loss arising from impairment is recognised in the income statement in other expenses.

Available-for-sale financial investments

Available-for-sale financial investments are non-derivative financial assets in listed and unlisted equity investments and debt securities. Equity investments classified as available for sale are those which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial recognition, available-for-sale financial investments are subsequently measured at fair value, with unrealised gains or losses recognised as other comprehensive income in the available-for-sale investment revaluation reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in the income statement in other income, or until the investment is determined to be impaired, when the cumulative gain or loss is reclassified from the available-for-sale investment revaluation reserve to the income statement in other expenses. Interest and dividends earned whilst holding the available-for-sale financial investments are reported as interest income and dividend income, respectively and are recognised in the income statement as “Other income” in accordance with the policies set out for “Revenue recognition” below.

When the fair value of unlisted equity investments cannot be reliably measured because (a) the variability in the range of reasonable fair value estimates is significant for that investment or (b) the probabilities of the various estimates within the range cannot be reasonably assessed and used in estimating fair value, such investments are stated at cost less any impairment losses.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The Group evaluates whether the ability and intention to sell its available-for-sale financial assets in the near term are still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and management’s intent to do so significantly changes in the foreseeable future, the Group may elect to reclassify these financial assets. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Group has the intent and ability to hold these assets for the foreseeable future or to maturity. Reclassification to the held-to-maturity category is permitted only when the Group has the ability and intent to hold until the maturity date of the financial asset.

For a financial asset reclassified from the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortised cost and any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the effective interest rate. Any difference between the new amortised cost and the maturity amount is also amortised over the remaining life of the asset using the effective interest rate. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the income statement.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired; or
the Group has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Impairment of financial assets

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses individually whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of loss is recognised in the income statement. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Group.

If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to the income statement.

Available-for-sale financial investments

For available-for-sale financial investments, the Group assesses at the end of each reporting period whether there is objective evidence that an investment or a group of investments is impaired.

If an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the income statement, is removed from other comprehensive income and recognised in the income statement.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged decline in the fair value of an investment below its cost. The determination of what is “significant” or ‘’prolonged” requires judgement. “Significant” is evaluated against the original cost of the investment and “prolonged” against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the income statement – is removed from other comprehensive income and recognised in the income statement. Impairment losses on equity instruments classified as available for sale are not reversed through the income statement. Increases in their fair value after impairment are recognised directly in other comprehensive income.

In the case of debt instruments classified as available for sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the income statement. Future interest income continues to be accrued based on the reduced carrying amount of the asset and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. Impairment losses on debt instruments are reversed through the income statement if the increase in fair value of the instruments can be objectively related to an event occurring after the impairment loss was recognised in the income statement.

Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of HKAS 39 are classified as financial liabilities at fair value through profit or loss, or loans and borrowings, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus, in the case of loans and borrowings, directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, amount due to the ultimate holding company, derivative financial instruments and interest-bearing loans and borrowings.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of sale in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by HKAS 39. Separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the income statement. The net fair value gain or loss recognised in the income statement does not include any interest charged on these financial liabilities.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the date of initial recognition and only if the criteria of HKAS 39 are satisfied.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective interest rate amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in the income statement.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Financial guarantee contracts

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. A financial guarantee contract is recognised initially as a liability at its fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the Group measures the financial guarantee contract at the higher of: (i) the amount of the best estimate of the expenditure required to settle the present obligation at the end of the reporting period; and (ii) the amount initially recognised less, when appropriate, cumulative amortisation.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in the income statement.

Fair value of financial instruments

The fair value of financial instruments that are traded in active markets is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. For financial instruments where there is no active market, the fair value is determined using appropriate valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; a discounted cash flow analysis; and option pricing models or other valuation models.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Derivative financial instruments

Initial recognition and subsequent measurement

The Group uses derivative financial instrument, such as interest rate swaps, to hedge its interest rate risk. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

The fair value of commodity purchase contracts that meet the definition of a derivative as defined by HKAS 39 is recognised in the income statement in cost of sales. Commodity contracts that are entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the Group’s expected purchase, sale or usage requirements are held at cost.

Any gains or losses arising from changes in fair value of derivatives are taken directly to the income statement, except for the effective portion of cash flow hedges, which is recognised in other comprehensive income.

Current versus non-current classification

Derivative instruments that are not designated and effective hedging instruments are classified as current or non-current or separated into a current or non-current portion based on an assessment of the facts and circumstances (i.e., the underlying contracted cash flows).

Where the Group will hold a derivative as an economic hedge (and does not apply hedge accounting) for a period beyond 12 months after the end of the reporting period, the derivative is classified as non-current (or separated into current and non-current portions) consistently with the classification of the underlying item.
Embedded derivatives that are not closely related to the host contract are classified consistently with the cash flows of the host contract.
Derivative instruments that are designated as, and are effective hedging instruments, are classified consistently with the classification of the underlying hedged item. The derivative instruments are separated into current portions and non-current portions only if a reliable allocation can be made.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Properties under development

Properties under development are intended to be held for sale after completion.

Properties under development are stated at the lower of cost and net realisable value and comprise land costs, construction costs, borrowing costs, professional fees and other costs directly attributable to such properties incurred during the development period.

Properties under development are classified as current assets unless the construction period of the relevant property development project is expected to complete beyond normal operating cycle. On completion, the properties are transferred to completed properties held for sale.

Completed properties held for sale

Completed properties held for sale are stated at the lower of cost and net realisable value. Cost is determined by an apportionment of the total land and buildings costs attributable to unsold properties. Net realisable value is estimated by the directors based on the prevailing market prices, on an individual property basis.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

Cash and cash equivalents

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Group’s cash management.

For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, which are not restricted as to use.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Income tax

Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and a joint venture when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, the carryforward of unused tax credits and unused tax losses can be utilised, except:

when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

in respect of deductible temporary differences associated with investments in subsidiaries, associates and a joint venture, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenue can be measured reliably, on the following bases:

(a) income from the sale of properties and industrial and commercial products, when the significant risks and rewards of ownership have been transferred to the buyer, provided that the Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the goods and properties sold;
(b) rental income, on a time proportion basis over the lease terms;
(c) income from the provision of transportation services, when the transportation services have been rendered;
(d) services income, when the relevant services have been rendered;

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(e) interest income, on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset; and
(f) dividend income, when the shareholders’ right to receive payment has been established.

Dividends

Final dividends proposed by the directors are classified as a separate allocation of retained profits within the equity section of the statement of financial position, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability.

Interim dividends are simultaneously proposed and declared, because the Company’s memorandum and articles of association grant the directors the authority to declare interim dividends. Consequently, interim dividends are recognised immediately as a liability when they are proposed and declared.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The 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 capitalised. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Share-based payment transactions

The Company operates a share option scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations. Employees (including directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (“equity-settled transactions”), further details of which are given in note 36 to the financial statements.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by the management using the Black-Scholes model.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/ or service conditions are fulfilled. The cumulative expense recognised for equitysettled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the income statement for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period. If the share options granted vest immediately, the Group recognises the fair value in the period in which the options are granted.

No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification, that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

The Group has adopted the transitional provisions of HKFRS 2 in respect of equity-settled awards and has applied HKFRS 2 only to equity-settled awards granted after 7 November 2002 that had not vested by 1 January 2005 and to those granted on or after 1 January 2005.

I – 75

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Pension schemes

The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the “MPF Scheme”) under the Mandatory Provident Fund Schemes Ordinance for those employees who are eligible to participate in the MPF Scheme. Contributions are made based on a percentage of the employees’ basic salaries and are charged to the income statement as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an independently administered fund. The Group’s employer contributions vest fully with the employees when contributed into the MPF Scheme except for the Group’s employer voluntary contributions, which are refunded to the Group when the employee leaves employment prior to the contributions vesting fully, in accordance with the rules of the MPF Scheme.

Each of the subsidiaries operating in Mainland China participates in the central pension scheme (the “CPS”) operated by the local municipal government for all of its staff. These subsidiaries are required to contribute 8% to 20% of their payroll costs to the CPS. The contributions are charged to the income statement as they become payable in accordance with the rules of the CPS.

Foreign currencies

These financial statements are presented in Hong Kong dollars, which is the Company’s functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective functional currency rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange ruling at the end of the reporting period. All differences arising on the settlement or transaction of monetary items are taken to the income statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The gain or loss arising on retranslation of a non-monetary item is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation differences on the item whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

I – 76

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The functional currencies of certain overseas subsidiaries, associates and jointly-controlled entities are currencies other than the Hong Kong dollar. As at the end of the reporting period, the assets and liabilities of these entities are translated into the presentation currency of the Company at the exchange rates ruling at the end of the reporting period and their income statements are translated into Hong Kong dollars at the weighted average exchange rates for the year. The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the income statement.

For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are translated into Hong Kong dollars at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are translated into Hong Kong dollars at the weighted average exchange rates for the year.

3. Significant accounting judgements and estimates

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

Judgements

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

Impairment of assets

In determining whether an asset is impaired or the event previously causing the impairment no longer exists, the Group has to exercise judgement in the area of asset impairment, particularly in assessing: (1) whether an event has occurred that may affect the asset value or such event affecting the asset value has not been in existence; (2) whether the carrying value of an asset can be supported by the net present value of future cash flows which are estimated based upon the continued use of the asset or derecognition; and (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to determine the level of impairment, including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the net present value used in the impairment test.

I – 77

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Income tax

Deferred tax is provided using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets are recognised for unused tax losses carried forward to the extent that it is probable that future taxable profits will be available against which the unused tax losses can be utilised, based on all available evidence. Recognition primarily involves judgement regarding the future performance of the particular legal entity or tax group in which the deferred tax asset has been recognised. A variety of other factors are also evaluated in considering whether there is convincing evidence that it is probable that some portions or all of the deferred tax assets will ultimately be realised, such as the existence of taxable temporary differences, tax planning strategies and the periods in which estimated tax losses can be utilised. The carrying amount of deferred tax assets and related financial models and budgets are reviewed at the end of each reporting period and to the extent that there is insufficient convincing evidence that sufficient taxable profits will be available within the utilisation periods to allow utilisation of the tax losses carried forward, and that the asset balance will be reduced and charged to the income statement.

Land appreciation tax

Under the Provisional Regulations on Land Appreciation Tax (“LAT”) implemented upon the issuance of the Provisional Regulations of the Public on 27 January 1995, all gains arising from the transfer of real estate properties in Mainland China with effect from 1 January 1994 are subject to LAT at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sales of properties less deductible expenditures including amortisation of land use rights, borrowing costs and all property development expenditures.

The subsidiaries of the Group engaging in the property development business in Mainland China are subject to LAT, which has been included in income tax. However, the implementation of these taxes varies amongst various Mainland China cities and the Group has not finalised its LAT returns with various tax authorities. Accordingly, significant judgement is required in determining the amount of land appreciation and its related taxes. The ultimate tax determination is uncertain during the ordinary course of business. The Group recognises these liabilities based on management’s best estimates. When the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and provisions of land appreciation taxes in the period in which such determination is made.

I – 78

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Operating lease commitments – Group as lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined based on an evaluation of the terms and conditions of the arrangement that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases.

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately or leased out separately under finance leases, the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Estimation uncertainty

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

I – 79

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Estimation of fair value of investment properties

The best evidence of fair value is current prices in an active market for similar lease terms and other contracts. In the absence of such information, management determines the amount within a range of reasonable fair value estimates. In making its judgement, management considers information from (i) current prices in an active market for properties of a different nature, condition or location by reference to available market information; (ii) recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the dates of transactions that occurred at those prices; and (iii) discounted cash flow projections, based on reliable estimates of future cash flows, supported by the terms of any existing lease and other contracts, and (where possible) by external evidence such as current market rates for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of cash flows.

The principal assumptions for the Group’s estimation of the fair value include those related to current market rents for similar properties in the same location and condition, appropriate discount rates, expected future market rents and future maintenance costs. The carrying amount of investment properties as at 31 December 2011 was HK$5,560,792,000 (2010: HK$4,902,151,000).

4. Operating segment information

For management purpose, the Group is organised into business units based on their products and services, and has six reportable operating segments as follows:

(a) the property development segment engages in the development of residential, industrial and commercial properties;
(b) the property investment segment invests in residential, industrial and commercial properties for their rental income potential;
(c) the property management segment engages in the management of both properties developed by the Group and external parties;
(d) the transportation services segment consists of the provision of passenger transportation services, automobile maintenance and other related services;

I – 80

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(e) the manufacturing segment engages in the manufacture and sale of industrial and commercial products; and
(f) the “others” segment comprises, principally, the manufacture and sale of aluminum alloys products and other businesses.

Management monitors the operating results of the Group’s business units separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit, which is a measure of adjusted profit before tax. The adjusted profit before tax is measured consistently with the Group’s profit before tax except that finance income, finance costs, dividend income, fair value gains from the Group’s financial instruments as well as head office and corporate expenses are excluded from such measurement.

Segment liabilities exclude derivative financial instruments, interest-bearing bank and other borrowings, an amount due to the ultimate holding company, tax payable, deferred tax liabilities and other unallocated head office and corporate liabilities as these liabilities are managed on a group basis.

Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

I – 81

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Property development HK$’000	Property investment HK$’000	Property management HK$’000	Transportation services HK$’000	Manufacturing HK$’000	Others HK$’000	Total HK$’000


5,053,060	446,782	899,707	240,678	311,489	368,868	7,320,584
49,890	5,756	6,441	–	–	86,716	148,803

5,102,950	452,538	906,148	240,678	311,489	455,584	7,469,387

						(148,803)

						7,320,584


1,808,821	479,356	19,306	13,525	12,781	214,616	2,548,405

–	311,316	–	–	–	–	311,316

1,808,821	790,672	19,306	13,525	12,781	214,616	2,859,721


						(75,124)
						369,333
						22,038
						64,784
						(147,897)
						(200,562)

						2,892,293


26,314,617	7,366,521	137,780	360,719	208,446	969,664	35,357,747

						6,182,877

						41,540,624


3,735,697	464,483	297,681	264,360	94,779	198,225	5,055,225

						19,472,462

						24,527,687



15,715	9,805	8,726	34,833	7,649	12,662	89,390
–	–	–	6,446	–	–	6,446
–	–	–	–	–	1,546	1,546
200,000	–	–	–	–	–	200,000
441,236	134,046	5,177	4,706	–	24,410	609,575
–	–	–	–	–	185,265	185,265
4,624,886	115,090	15,013	47,129	15,133	458,830	5,276,081
61,695	–	–	–	–	369,171	430,866
8,140,824	35,207	18,023	12,570	8,577	13,337	8,228,538

I – 82

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Year ended 31 December 2010, as restated Segment revenue: Sales to customers Intersegment sales Reconciliation Elimination of intersegment sales Revenue Segment results before increase in fair value of investment properties Increase in fair value of investment properties Segment results after increase in fair value of investment properties Reconciliation Elimination of intersegment results Finance income Dividend income and unallocated gains Gain on disposal of a subsidiary Fair value gains of the financial instruments, net Corporate and other unallocated expenses Finance costs Profit before tax Segment assets Reconciliation Corporate and other unallocated assets Total assets Segment liabilities Reconciliation Corporate and other unallocated liabilities Total liabilities Other segment information: Depreciation Amortisation of vehicle licences Amortisation of prepaid land lease payments Impairment loss of an investment in an associate Share of profits and losses of associates Share of profits and losses of jointly-controlled entities Investments in associates Investment in jointly-controlled entities Capital expenditure	Property development HK$’000 4,660,705 – 4,660,705 1,196,739 – 1,196,739 20,146,050 3,194,820 11,128 – – 307,000 179,205 – 4,319,786 – 5,208,865	Property investment HK$’000 390,849 – 390,849 448,877 595,372 1,044,249 5,143,753 225,954 8,981 – – – 178,598 – 106,614 – 14,245	Property management HK$’000 732,283 15,437 747,720 (7,250) – (7,250) 100,063 167,507 7,444 – – – 3,558 – 13,249 – 6,817	Transportation services HK$’000 238,911 – 238,911 35,159 – 35,159 372,323 248,745 33,523 7,102 – – 4,431 – 44,187 – 12,778	Manufacturing HK$’000 280,540 – 280,540 10,548 – 10,548 188,643 90,240 7,247 – – – – – 15,133 – 6,157	Others HK$’000 199,172 43,772 242,944 73,537 – 73,537 845,373 186,520 12,094 – 294 – 26,729 39,579 511,415 171,008 11,592	Total HK$’000 6,502,460 59,209
							6,561,669 (59,209)
							6,502,460

							1,757,610 595,372
							2,352,982 (3,718) 182,675 19,238 106,906 102,065 (113,621) (206,000)
							2,440,527

							26,796,205 7,021,312
							33,817,517

							4,113,786 15,003,934
							19,117,720

							80,417 7,102 294 307,000 392,521 39,579 5,010,384 171,008 5,260,454

As the Group generates substantially all of its revenues from customers domiciled in the PRC, no geographical information is presented.

I – 83

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. Revenue, other income and gains

An analysis of revenue, other income and gains is as follows:

Revenue Sale of properties Gross management fee income Gross rental income from investment properties Sale of commercial and industrial goods Income from transportation Others Other income Bank interest income Interest income from: Held-to-maturity investment A jointly-controlled entity Associates A non-controlling shareholder of a subsidiary Finance income from independent third parties Others Gains Gains on disposal of investment properties Gains on disposal of items of property, plant and equipment Gain on disposal of a subsidiary Others Other income and gains	2011 HK$’000	2010 HK$’000 Restated 4,660,705 732,283 390,849 280,540 238,911 199,172

	5,053,060
	899,707
	446,782
	311,489
	240,678
	368,868
		6,502,460
	7,320,584
		54,320 48,014 38,350 18,840 – 23,151 63,839

	67,860

	48,374
	119,389
	5,848
	7,432
	120,430
	92,461
		246,514
	461,794
		2,011 2,177 106,906 151

	–
	1,395
	–
	589
		111,245
	1,984
		357,759
	463,778

I – 84

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

6. Profit before tax

The Group’s profit before tax is arrived at after charging/(crediting):

Notes Cost of inventories sold Cost of services provided Auditors’ remuneration Depreciation 14 Impairment of trade receivables 27 Reversal of impairment of trade receivables 27 Impairment loss of an investment in an associate* 22 Direct operating expenses (including repairs and maintenance) arising on rental-earning investment properties Minimum lease payments under operating leases in respect of land and buildings Amortisation of vehicle licences 15 Amortisation of prepaid land lease payments 16 Employee benefit expense (excluding directors’ remuneration, note 8): Wages and salaries Equity-settled share option expense Pension scheme contributions Less: Amount capitalised Net: Pension scheme contributions Foreign exchange differences, net Rental income on investment properties less direct operating expenses of HK$73,027,000 (2010: HK$48,508,000) Gains on disposal of investment properties Gains on disposal of items of property, plant and equipment Gain on disposal of a subsidiary	2011 HK$’000	2010 HK$’000 Restated 3,063,053 583,294 6,912 80,417 14,110 (2,861) 307,000 48,508 11,101 7,102 294 565,535 8,371 84,008 (26,468) 57,540 631,446 16,789 (342,341) (2,011) (2,177) (106,906)
	3,207,965
	738,623
	4,650
	89,390
	1,632
	(3,356)
	200,000
	73,027
	11,968
	6,446
	1,546

	713,937
	19,926
	99,663
	(31,401)

	68,262

	802,125

	8,727
	(373,755)
	–
	(1,395)
	–

The impairment loss of the investment in an associate is included in “other expenses” in the consolidated income statement.

I – 85

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

7. Finance costs

An analysis of finance costs is as follows:

Interest on: Bank loans Total interest expense on financial liabilities not at fair value through profit or loss Less: Interest capitalised Other finance costs	Group 2011 2010 HK$’000 HK$’000 Restated 672,215 310,247	Group 2011 2010 HK$’000 HK$’000 Restated 672,215 310,247


	672,215
		310,247 (246,433)
	672,215
	(538,970)
		63,814 142,186
	133,245
	67,317
		206,000
	200,562

The average capitalisation rate for the year used to determine the amount of borrowing costs eligible for capitalisation was 5.55% (2010: 5.27%).

8. Directors’ remuneration

Directors’ remuneration for the year, disclosed pursuant to the Listing Rules and Section 161 of the Hong Kong Companies Ordinance, is as follows:

Fees Other emoluments: Salaries, allowances and benefits in kind Equity-settled share option expense Pension scheme contributions	Group 2011 2010 HK$’000 HK$’000 1,220 1,500	Group 2011 2010 HK$’000 HK$’000 1,220 1,500

	1,220
		3,743 2,290 597

	4,400
	4,820
	570
		6,630
	9,790
		8,130
	11,010

I – 86

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(a) Independent non-executive directors

The fees paid to independent non-executive directors during the year were as follows:

Fees HK$’000	Employee share option expense HK$’000	Total HK$’000


330	–	330
280	–	280
330	–	330

940	–	940

330 280 330 940	– – – –	330 280 330 940

There were no other emoluments payable to the independent non-executive directors during the year (2010: Nil).

I – 87

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Executive directors and non-executive directors

Fees HK$’000	Salaries, allowances and benefits in kind HK$’000	Employee share option expense Pension scheme contributions HK$’000 HK$’000	Employee share option expense Pension scheme contributions HK$’000 HK$’000	Total HK$’000



–	1,254	1,571	157	2,982
–	552	746	85	1,383
–	653	501	42	1,196
–	790	1,001	119	1,910
–	1,151	1,001	167	2,319

–	4,400	4,820	570	9,790


280	–	–	–	280
–	–	–	–	–

280	–	–	–	280

280	4,400	4,820	570	10,070

Resigned as director on 21 June 2011
** Appointed as director on 21 June 2011
*** There was an arrangement under which a non-executive director, Liu Biao had waived his remuneration of HK$280,000 during the year

I – 88

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2010 Executive directors: Guo Limin Xu Ruxin Liu Weijin Mou Yong Liu Chong Non-executive directors: Wu Jiesi Liu Biao	Fees HK$’000 – – – – – – 280 280 560 560	Salaries, allowances and benefits in kind HK$’000 1,105 1,061 948 629 – 3,743 – – – 3,743	Employee share option expense Pension scheme contributions HK$’000 HK$’000 710 148 674 144 453 203 453 102 – – 2,290 597 – – – – – – 2,290 597	Total HK$’000 1,963 1,879 1,604 1,184 –
				6,630
				280 280
				560
				7,190

I – 89

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

9. Five highest paid employees

The five highest paid employees during the year included three (2010: three) directors, details of whose remuneration are set out in note 8 above. Details of the remuneration of the remaining two (2010: two) non-director, highest paid employees for the year are as follows:

Salaries, allowances and benefits in kind Equity-settled share option expense Pension scheme contributions	Group 2011 2010 HK$’000 HK$’000 2,432 2,015 2,342 533 422 384	Group 2011 2010 HK$’000 HK$’000 2,432 2,015 2,342 533 422 384

	2,432
	2,342
	422
		2,932
	5,196

The number of non-director, highest paid employees whose remuneration fell within the following bands is as follows:

HK$1,000,001 to HK$1,500,000 HK$1,500,001 to HK$3,000,000	Number of 2011	employees 2010 1 1

	–
	2
		2
	2

In prior years, share options were granted to two non-director, highest paid employees in respect of their services to the Group, further details of which are included in the disclosures in note 36 to the financial statements. The fair value of such options, which has been recognised in the income statement over the vesting period, was determined as at the date of grant and the amount included in the financial statements for the current year is included in the above non-director, highest paid employees’ remuneration disclosures.

I – 90

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

10. Income tax

Hong Kong profits tax has been provided at the rate of 16.5% (2010: 16.5%) on the estimated assessable profits arising in Hong Kong during the year. No provision for Hong Kong profits tax has been made as the Group had no assessable profits arising in Hong Kong during the year (2010: Nil).

Taxes on profits assessable in Mainland China are calculated at the rates of tax prevailing in the provinces in which the Group operates.

Under the relevant income tax law, the PRC subsidiaries are subject to corporate income tax (“CIT”) at a statutory rate of 25% (2010: 25%) on their respective taxable income, except for certain PRC subsidiaries in the Shenzhen Special Economic Zones which are entitled to a preferential CIT rate of 24% in the year ended 31 December 2011 (2010: 22%).

PRC LAT 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 and all property development expenditures. LAT of HK$478,451,000 is charged to the consolidated income statement for the year (2010: HK$319,695,000).

Group: Current – Mainland China LAT in Mainland China Deferred Mainland China corporate income tax (note 34) Total tax charge for the year	2011 HK$’000	2010 HK$’000 Restated 395,724 319,695 148,241


	555,531
	478,451
	42,552
		863,660
	1,076,534

I – 91

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

A reconciliation of the tax expense applicable to profit before tax at the statutory income tax rate to the tax expense at the Group’s effective income tax rate for the year, and a reconciliation of the applicable rate (i.e., the statutory tax rate) to the effective tax rate, are as follows:

2011 HK$’000 %	2011 HK$’000 %	2010 HK$’000 % Restated 2,440,527 610,132 25 (39,520) (1.6) (81,411) (3.3) (8,708) (0.4) 13,263 0.6 (28,769) (1.2) 93,409 3.8 68,106 2.8 319,695 13.1 (82,537) (3.4) 863,660 35.4

2,892,293


723,073	25
(43,166)	(1.5)
(129,000)	(4.5)
(44,464)	(1.5)
3,883	0.1
(903)	(0.0)
118,229	4.1
78,368	2.7
478,451	16.5
(107,937)	(3.7)
		35.4
1,076,534	37.2

The share of taxes attributable to associates and jointly-controlled entities amounting to HK$723,512,000 (2010: HK$505,805,000) and HK$72,277,000 (2010: HK$20,387,000), respectively, are included in “Share of profits and losses of associates” and “Share of profits and losses of jointly-controlled entities” on the face of the consolidated income statement.

I – 92

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

11. Loss attributable to owners of the parent

The consolidated profit attributable to owners of the parent for the year ended 31 December 2011 includes a loss of HK$796,546,000 (2010: HK$283,970,000) which has been dealt with in the financial statements of the Company.

12. Dividends

Interim – HK7 cents (2010: HK7 cents) per ordinary share Adjustment to prior year’s final dividend Proposed final dividend of HK8 cents (2010: final dividend of HK7 cents) per ordinary share	2011 HK$’000	2010 HK$’000 247,560 612 247,560

	247,798
	238
	290,082
		495,732
	538,118

The proposed final dividend for the year is subject to the approval of the Company’s shareholders at the forthcoming annual general meeting.

13. Earnings per share attributable to ordinary equity holders of the parent

The calculation of the basic earnings per share amount is based on the profit for the year attributable to ordinary equity holders of the parent, and the weighted average number of ordinary shares of 3,551,123,432 (2010: 3,535,689,759) in issue during the year.

The calculation of the diluted earnings per share amount is based on the profit for the year attributable to ordinary equity holders of the parent. The weighted average number of ordinary shares used in the calculation is the number of ordinary shares in issue during the year, as used in the basic earnings per share calculation, and the weighted average number of ordinary shares assumed to have been issued at no consideration on the deemed exercise or conversion of all dilutive potential ordinary shares into ordinary shares.

I – 93

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The calculations of basic and diluted earnings per share amounts are based on:

Earnings Profit attributable to ordinary equity holders of the parent, used in the basic and diluted earnings per share calculations Shares Weighted average number of ordinary shares in issue during the year used in the basic earnings per share calculation Effect of dilution – weighted average number of ordinary shares: Share options	2011 HK$’000	2010 HK$’000 1,324,780


	1,522,078

	Number of shares 2011 2010 3,551,123,432 3,535,689,759 418,557 12,641,367


	3,551,123,432


	418,557
		3,548,331,126
	3,551,541,989

I – 94

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

14. Property, plant and equipment

Group

Land and buildings in Hong Kong under medium term leases HK$’000	Land and buildings in Mainland China under medium term leases HK$’000	Leasehold improvements HK$’000	Furniture, fixtures and equipment HK$’000	Motor vehicles HK$’000	Plant and machinery HK$’000	Construction in progress HK$’000	Total HK$’000


2,837	347,106	27,679	23,364	124,921	71,698	32,510	630,115
–	–	–	(121)	(1,116)	–	–	(1,237)

2,837	347,106	27,679	23,243	123,805	71,698	32,510	628,878



2,939	424,628	69,386	86,424	287,101	156,600	32,510	1,059,588
(102)	(77,522)	(41,707)	(63,181)	(163,296)	(84,902)	–	(430,710)

2,837	347,106	27,679	23,243	123,805	71,698	32,510	628,878


2,837	347,106	27,679	23,243	123,805	71,698	32,510	628,878

–	200	29,222	12,373	22,506	6,366	–	70,667
–	171	35	7	–	–	–	213
–	–	–	481	–	–	(481)	–
–	–	–	(504)	(4,357)	(303)	–	(5,164)
–	(8,737)	(15,481)	(11,513)	(42,887)	(10,772)	–	(89,390)
139	13,456	1,109	858	4,862	3,373	1,159	24,956

2,976	352,196	42,564	24,945	103,929	70,362	33,188	630,160



3,083	443,719	101,555	98,993	285,229	169,053	33,188	1,134,820
(107)	(91,523)	(58,991)	(74,048)	(181,300)	(98,691)	–	(504,660)

2,976	352,196	42,564	24,945	103,929	70,362	33,188	630,160



1,282	269,769	101,555	98,993	285,229	169,053	33,188	959,069
1,801	173,950	–	–	–	–	–	175,751

3,083	443,719	101,555	98,993	285,229	169,053	33,188	1,134,820

I – 95

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

31 December 2010 Net carrying amount at 31 December 2009 and at 1 January 2010, previously stated: Changes in accounting policy (note 2.2.2) At 31 December 2009 and at 1 January 2010, as restated: Cost or valuation Accumulated depreciation Net carrying amount At 1 January 2010, net of accumulated depreciation, as restated Additions Reclassification Disposals Disposal of a subsidiary Transfer from properties under development (note 18) Transfer to prepaid land lease payments (note 16) Depreciation provided during the year Exchange realignment At 31 December 2010, net of accumulated depreciation At 31 December 2010: Cost or valuation Accumulated depreciation Net carrying amount Analysis of cost or valuation: At cost At 2006 valuation	Land and buildings in Hong Kong under medium term leases HK$’000 2,739 – 2,739 2,837 (98) 2,739 2,739 – – – – – – – 98 2,837 2,939 (102) 2,837 1,221 1,718 2,939	Land and buildings in Mainland China under medium term leases HK$’000 221,010 – 221,010 288,922 (67,912) 221,010 221,010 552 65,224 (6) (2,072) 63,759 – (6,862) 5,501 347,106 424,628 (77,522) 347,106 258,770 165,858 424,628	Leasehold improvements HK$’000 23,823 – 23,823 51,278 (27,455) 23,823 23,823 11,065 5,117 – – – – (13,278) 952 27,679 69,386 (41,707) 27,679 69,386 – 69,386	Furniture, fixtures and equipment HK$’000 14,659 (118) 14,541 68,871 (54,330) 14,541 14,541 17,395 – (483) (16) – – (9,849) 1,655 23,243 86,424 (63,181) 23,243 86,424 – 86,424	Motor vehicles HK$’000 134,360 (549) 133,811 263,053 (129,242) 133,811 133,811 26,352 – (790) – – – (39,914) 4,346 123,805 287,101 (163,296) 123,805 287,101 – 287,101	Plant and machinery HK$’000 73,702 – 73,702 146,795 (73,093) 73,702 73,702 6,755 – (317) – – – (10,514) 2,072 71,698 156,600 (84,902) 71,698 156,600 – 156,600	Construction in progress HK$’000 117,121 – 117,121 117,121 – 117,121 117,121 9,407 (70,341) – – – (27,706) – 4,029 32,510 32,510 – 32,510 32,510 – 32,510	Total HK$’000 587,414 (667) 586,747 938,877 (352,130) 586,747 586,747 71,526 – (1,596) (2,088) 63,759 (27,706) (80,417) 18,653 628,878 1,059,588 (430,710) 628,878 892,012 167,576 1,059,588

I – 96

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group’s land and buildings were revalued at 31 December 2006 by Greater China Appraisal Ltd., an independent firm of professionally qualified property valuers. These land and buildings were revalued at their open market values based on their existing use.

Had these land and buildings been carried at historical cost less accumulated depreciation, their carrying amount would have been approximately HK$72,530,000 (2010: HK$72,659,000).

At 31 December 2011, certain of the Group’s land and buildings in Mainland China with a net book value of approximately HK$4,742,000 (2010: Nil) were pledged to secure bank loans granted to the Group (note 31(a)(i)).

Furniture and fixtures HK$’000	Motor vehicles HK$’000	Total HK$’000


135	2,105	2,240
53	–	53
(75)	(716)	(791)

113	1,389	1,502



1,293	4,324	5,617
(1,180)	(2,935)	(4,115)

113	1,389	1,502

I – 97

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Company 31 December 2010 At 1 January 2010, net of accumulated depreciation Additions Depreciation provided during the year At 31 December 2010, net of accumulated depreciation At 31 December 2010: Cost Accumulated depreciation Net carrying amount	Leasehold improvements HK$’000 119 – (119) – 593 (593) –	Furniture and fixtures HK$’000 222 55 (142) 135 1,240 (1,105) 135	Motor vehicles HK$’000 1,371 1,360 (626) 2,105 4,324 (2,219) 2,105	Total HK$’000 1,712 1,415 (887)
				2,240

				6,157 (3,917)
				2,240

I – 98

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

15. Intangible assets

Group Vehicle licences 31 December 2011 Cost at 1 January 2011, net of accumulated amortisation Addition Amortisation provided during the year Exchange realignment At 31 December 2011 At 31 December 2011: Cost Accumulated amortisation Net carrying amount 31 December 2010 Cost at 1 January 2010, net of accumulated amortisation Amortisation provided during the year Exchange realignment At 31 December 2010 At 31 December 2010: Cost Accumulated amortisation Net carrying amount	HK$’000





	84,305
	345
	(6,446)
	3,168

	81,372



	137,779
	(56,407)

	81,372

	88,092 (7,102) 3,315 84,305 131,784 (47,479) 84,305

I – 99

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

16. Prepaid land lease payments

Carrying amount at 1 January Transfer from properties under development (note 18) Transfer from property, plant and equipment (note 14) Recognised during the year Exchange realignment Carrying amount at 31 December Current portion included in prepayments, deposits and other receivables Non-current portion	Group 2011 2010 HK$’000 HK$’000 31,626 4,214 18,330 – – 27,706 (1,546) (294) 2,207 – 50,617 31,626 (1,754) (888) 48,863 30,738

	31,626
	18,330
	–
	(1,546)
	2,207

	50,617
	(1,754)

	48,863

The leasehold land is held under a medium term lease and is situated in Mainland China.

I – 100

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

17. Goodwill

Group Cost at 1 January 2010 Exchange realignment Cost and carrying amount at 31 December 2010 At 31 December 2010: Cost Accumulated impairment Net carrying amount Cost at 1 January 2011 Exchange realignment Cost and carrying amount at 31 December 2011 At 31 December 2011: Cost Accumulated impairment Net carrying amount	HK$’000 322,600 25 322,625 322,625 – 322,625
	322,625
	79

	322,704



	322,704
	–

	322,704

Impairment testing of goodwill

Goodwill arising from the acquisition of interests in subsidiaries has been allocated to the following cash-generating units, which are reportable segments, for impairment testing:

Property development cash-generating unit
Property investment cash-generating unit

I – 101

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The recoverable amounts of the cash-generating units have been determined based on a value-in-use calculation using cash flow projections based on financial budgets covering a five-year period approved by senior management. The key assumptions adopted on growth rates and discount rates used in the value-in-use calculations are based on management best estimates. The growth rate of 2% (2010: 2%) is determined by considering both internal and external factors relating to the relevant segments. The discount rate applied to the cash flow projections is 12% (2010: 12%).

Management believes that any reasonably possible change in the key assumptions on which the recoverable amounts of goodwill is based would not cause the carrying amounts of goodwill, to exceed its recoverable amounts.

18. Properties under development

Land in Mainland China held under medium term leases, at cost: At beginning of year Additions Acquisition of a subsidiary Transfer to completed properties held for sale Transfer to prepaid land lease payments (note 16) Disposal of a subsidiary Exchange realignment At 31 December Development expenditure, at cost: At beginning of year Additions Transfer to completed properties held for sale Transfer to property, plant and equipment (note 14) Disposal of a subsidiary Exchange realignment At 31 December	Group 2011 2010 HK$’000 HK$’000 Restated 8,170,836 6,563,688 2,596,629 2,694,140 28,406 – (612,002) (1,209,447) (18,330) – – (121,575) 410,260 244,030 10,575,799 8,170,836 2,642,926 2,840,694 5,513,120 2,768,915 (3,737,756) (3,001,713) – (63,759) – (1,896) 117,663 100,685 4,535,953 2,642,926 15,111,752 10,813,762


	8,170,836
	2,596,629
	28,406
	(612,002)
	(18,330)
	–
	410,260

	10,575,799


	2,642,926
	5,513,120
	(3,737,756)
	–
	–
	117,663

	4,535,953

	15,111,752

I – 102

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Properties under development expected to be recovered: Within one year After more than one year	Group 2011 2010 HK$’000 HK$’000 Restated 4,110,381 3,792,234 11,001,371 7,021,528	Group 2011 2010 HK$’000 HK$’000 Restated 4,110,381 3,792,234 11,001,371 7,021,528


	4,110,381
	11,001,371
		10,813,762
	15,111,752

As at 31 December 2011, the Group’s properties under development with a net book value of approximately HK$1,585,366,000 (2010: Nil) were pledged to secure bank loans granted to the Group (note 31(a)(ii)).

As at 31 December 2011, the application for certificates of land in Mainland China held under medium term leases with a net book value of RMB415,470,000 (equivalent to approximately HK$512,648,000) was still in progress.

19. Investment properties

Carrying amount at 1 January Additions Net gain from a fair value adjustment Reclassified from completed properties held for sale Disposals Exchange realignment Carrying amount at 31 December	Group 2011 2010 HK$’000 HK$’000 4,902,151 4,105,782 47,764 – 311,316 595,372 52,742 40,229 – (1,240) 246,819 162,008	Group 2011 2010 HK$’000 HK$’000 4,902,151 4,105,782 47,764 – 311,316 595,372 52,742 40,229 – (1,240) 246,819 162,008

	4,902,151
	47,764
	311,316
	52,742
	–
	246,819
		4,902,151
	5,560,792

The Group’s investment properties are situated in Mainland China and are held under a medium term lease.

I – 103

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group’s investment properties were revalued on 31 December 2011 by Asset Appraisal Limited, an independent firm of professionally qualified property valuers, at approximately HK$5,560,792,000 on an open market, existing use basis. The investment properties are leased to third parties under operating leases, further summary details of which are included in note 38(i) to the financial statements. The net surplus arising on the revaluation has been credited to the consolidated income statement.

As at 31 December 2011, the Group’s investment property with a net book value of approximately HK$694,920,000 (2010: HK$504,518,000) was pledged to secure bank loans granted to the Group (note 31(a)(iii)).

20. Investments in subsidiaries

Unlisted shares, at cost Due from subsidiaries Capital contribution in respect of employee share-based compensation Impairment*	Company 2011 2010 HK$’000 HK$’000 5,427,660 4,754,518 1,227,918 1,219,554 13,496 3,693 6,669,074 5,977,765 (43,635) (43,635) 6,625,439 5,934,130

	5,427,660
	1,227,918
	13,496

	6,669,074

	(43,635)

	6,625,439

The amounts due from subsidiaries are unsecured and have no fixed terms of repayment. The amounts due from subsidiaries of HK$1,057,916,000 (2010: HK$1,055,905,000) are interest-free, while the remaining balance of HK$170,002,000 (2010: HK$163,649,000) bears interest at rates ranging from 5% to 6.31% (2010: 5% to 5.31%) per annum.
** An impairment was recognised for certain unlisted investments and amounts due from subsidiaries with carrying amounts of HK$5 million and HK$108 million (before deducting the impairment loss), respectively. There was no change in the impairment during the current and prior years.

The amounts due from and to subsidiaries included in the Company’s current assets and current liabilities are unsecured, interest-free and are repayable on demand or within one year. The carrying amounts of amounts due from and to subsidiaries approximate to their fair values.

I – 104

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Particulars of the principal subsidiaries are as follows:

		Nominal value of
	Place of	issued and fully	Percentage of equity
	registration	paid-up capital/	interest attributable
Name	and operation	registered capital	to the Company		Principal activities
			2011	2010
Shum Yip Southern Land	Mainland China	HK$1,702,500,000	100	100	Property investment and
(Holdings) Co., Ltd. (note b)					development
Shum Yip Centre Development	Mainland China	HK$40,000,000	100	100	Property investment
(Shenzhen) Co., Ltd.
(notes a & c)
Shum Yip Shumkang (Group)	Mainland China	RMB95,500,000	80	80	Provision of
Co., Ltd. (note d)					transportation
					services
Shum Yip Terra (Holdings)	Mainland China	RMB800,000,000	75.05	75.05	Property investment and
Co., Ltd. (note d)					development
Shenzhen Terra Construction	Mainland China	RMB10,000,000	75.05	75.05	Manufacturing and sales
Co., Ltd. (notes a & c)					of aluminum products
Shenzhen Terra Property	Mainland China	RMB5,060,000	75.05	75.05	Property management
Management Service Co., Ltd.
(notes a & c)
Wuhan Shum Yip Terra Property	Mainland China	RMB137,000,000	75.05	75.05	Property development
Development Co., Ltd.
(notes a & c)
Shum Yip East China Property	Mainland China	RMB50,000,000	100	100	Property development
Development Co., Ltd.
(notes a & c)
Shum Yip TaiFu Logistics Group	Mainland China	RMB85,966,370	95.37	95.37	Operation of
Holdings Co., Ltd.					warehouses and
(notes a & c)					property development
Shum Yip Pengji Holdings	Mainland China	RMB932,050,000	100	100	Property investment and
Co., Ltd. (note b)					development
Shenzhen Pengji Property	Mainland China	RMB20,000,000	100	100	Property management
Management Services Limited
(notes a & c)
Shenzhen Shum Yip Steel Centre	Mainland China	RMB19,920,000	100	100	Manufacturing of steel
Ltd. (notes a & c)					products
Shenzhen Wondershine Residence	Mainland China	RMB15,000,000	100	100	Property management
Company Limited (notes a & c)
Shum Yip Investment (Shenzhen)	Mainland China	US$150,000,000	100	100	Investment holding
Co., Ltd. (note b)

I – 105

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

		Nominal value of
	Place of	issued and fully	Percentage of equity
	registration	paid-up capital/	interest attributable
Name	and operation	registered capital	to the Company		Principal activities
			2011	2010
Changsha Pengji Property Limited	Mainland China	RMB75,000,000	80	80	Property development
(notes a & c)
Huizhou Pengji Investment	Mainland China	RMB10,000,000	100	100	Property development
Limited (notes a & c)
Shum Yip (Shenzhen) Property	Mainland China	RMB30,000,000	100	100	Property management
Management Limited
(notes a & c)
Dongguan Shum Yip Property	Mainland China	RMB10,000,000	100	100	Property development
Development Limited
(notes a & c)
Foshan Shunde Shum Yip Property	Mainland China	RMB20,000,000	100	100	Property development
Development Limited
(notes a & c)
Changzhou Shum Yip Property	Mainland China	US$99,800,000	100	–	Property development
Development Limited (note b)
Shum Yip Land Company Limited (notes a & c)	Mainland China	RMB50,000,000	100	–	Property development

The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.

Notes:

a. Indirectly held by the Company
b. Established in Mainland China as a wholly foreign-owned enterprise
c. Established in Mainland China as a domestic enterprise with limited liability
d. Established in Mainland China as a Sino-foreign joint venture enterprise

I – 106

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

21. Investment in jointly-controlled entities

Share of net assets	Group 2011 2010 HK$’000 HK$’000 Restated 430,866 171,008	Group 2011 2010 HK$’000 HK$’000 Restated 430,866 171,008

	430,866

The loans to the jointly-controlled entities included in the Group’s prepayments, deposits and other receivables are disclosed in note 28 to the financial statements.

Particulars of the jointly-controlled entities are as follows:

				Percentage of
		Place of
	Nominal value of	registration	Ownership	Voting	Profit
Name	registered capital	and operation	interest	power	sharing	Principal activities
Taizhou Shum Yip Investment	RMB100,000,000	Mainland China	51	50	51	Provision of
Development Limited						development
(“Taizhou Shum Yip”)						service
Shenzhen ShumYip Pengji	RMB100,000,000	Mainland China	50	50	50	Property
Baohua Investment Limited						development
(“ShumYip Pengji Baohua”)

Both of the above investments in jointly-controlled entities are indirectly held by the Company.

I – 107

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The following table illustrates the summarised financial information of the Group’s jointly-controlled entities:

Share of the jointly-controlled entities’ assets and liabilities: Non-current assets Current assets Current liabilities Non-current liabilities Net assets Share of the jointly-controlled entities’ results: Income Total expense Tax Profit for the year	2011 HK$’000	2010 HK$’000 1,237 2,091,872 (1,670,422) (221,808)


	1,008,156
	342,647
	(686,570)
	(169,701)
		200,879
	494,532

		82,138 (673) (20,387)

	301,622
	(12,518)
	(72,277)
		61,078
	216,827

22. Investments in associates

Group 2011 2010 HK$’000 HK$’000 – – – – 5,394,924 5,136,565 126,917 126,917 325,240 117,902 (571,000) (371,000) 5,276,081 5,010,384 1,061,147 1,742,002	Company 2011 2010 HK$’000 HK$’000 15,133 15,133 920,399 920,399 – – – – – – (571,000) –	Company 2011 2010 HK$’000 HK$’000 15,133 15,133 920,399 920,399 – – – – – – (571,000) –

–	15,133
–	920,399
5,394,924	–
126,917	–
325,240	–
(571,000)	(571,000)
		935,532
5,276,081	364,532

		315,546
1,061,147	183,017

The loans to associates are unsecured and have no fixed terms of repayment. The loans to associates of HK$90,285,000 (2010: HK$45,985,000) are interest-free, while the remaining balance of HK$234,955,000 (2010: HK$71,917,000) bears interest at rates ranging from 5.81% to 7.05% (2010: 5.31% to 6.75% ) per annum.

I – 108

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The loans from associates included in the Group’s other payables and accruals totalling HK$286,303,000 (2010: HK$50,828,000) are unsecured, interest-free and are payable on demand.

(a) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost is an objective evidence of impairment. In consideration of the fluctuation in the share price, management performed impairment testing for its investments in associates. The recoverable amounts of the investments in associates have been determined based on a value-inuse calculation using the Group’s share of the present value of the estimated future cash flows expected to be generated by the associates. The cash flow projections of the associates were made based on financial budgets covering a five-year period. The key assumptions adopted on growth rates and discount rates used in the value-in-use calculations are based on management’s best estimates. Growth rates are determined by considering both internal and external factors. The discount rate applied to the cash flow projections is 14%.

Particulars of the principal associates are as follows:

			Nominal value of
		Place of	issued and fully	Percentage of
	Business	incorporation/	paid-up capital/	ownership interest
Name	structure	registration	registered capital	attributable to the Group		Principal activities
				2011	2010
Coastal Greenland Limited	Corporate	Bermuda	HK$279,058,000	22.62	22.62	Property development and
(“Coastal Greenland”)*						investment
(note a)
Road King Infrastructure	Corporate	Bermuda	HK$74,193,000	27.27	27.27	Provision of investment and
Ltd. (“Road King”)**						management of toll roads
(note b)						and property development
Shenzhen Tianan Cyber	Corporate	Mainland China	US$62,000,000	37.53	37.53	Property investment and
Park (Group) Co., Ltd.						development
(note b)
Shenyang Wuai Shumkang	Corporate	Mainland China	RMB400,000,000	46.925	46.925	Property development
Company Limited						and investment and
(“Wuai”) (note b)						transportation station
						management

None of the associates are audited by Ernst & Young, Hong Kong or other member firms of the Ernst & Young global network.

Coastal Greenland is a limited liability company incorporated in Bermuda and its ordinary shares with a nominal value of HK$0.10 each are listed on the Main Board of The Stock Exchange of Hong Kong Limited. The principal location of Coastal Greenland’s business is Mainland China.

I – 109

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

** Road King is a limited liability company incorporated in Bermuda and its ordinary shares with a nominal value of HK$0.10 each are listed on the Main Board of The Stock Exchange of Hong Kong Limited. The principal location of Road King’s business is Mainland China.

Notes:

a. Directly held by the Company
b. Indirectly held by the Company

The above table lists the associates of the Group which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other associates would, in the opinion of the directors, result in particulars of excessive length.

All the above associates have been accounted for using the equity method in these financial statements.

The following table illustrates the summarised financial information of the Group’s associates extracted from their financial statements.

Assets Liabilities Revenues Profit	2011 HK$’000	2010 HK$’000 53,742,731 38,018,578 8,124,198 962,642

	62,705,242
	45,345,157
	15,502,613
	1,963,198

23. Held-to-maturity investment

Held-to-maturity investment	Group 2011 2010 HK$’000 HK$’000 387,968 385,938	Company 2011 2010 HK$’000 HK$’000 387,968 385,938	Company 2011 2010 HK$’000 HK$’000 387,968 385,938

	387,968	387,968

Held-to-maturity investment represented investment in guaranteed senior notes of US$50,000,000 issued by Coastal Greenland, at a consideration of US$47,000,000 (equivalent to approximately HK$361,000,000). The guaranteed senior notes will be due on 8 November 2012 and bear interest at the rate of 12% per annum. The senior notes are listed on the Singapore Securities Trading Limited and the investment is classified as a held-tomaturity investment and measured at amortised cost.

I – 110

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

24. Available-for-sale investments

Group 2011 2010 HK$’000 HK$’000 25,428 29,657 4,485 4,357 29,913 34,014	Company 2011 2010 HK$’000 HK$’000 – – 1,720 1,720	Company 2011 2010 HK$’000 HK$’000 – – 1,720 1,720


25,428	–
4,485	1,720
		1,720
29,913	1,720

During the year, the net loss in respect of the Group’s available-for-sale investments recognised in other comprehensive income amounted to HK$4,257,000 (2010: HK$14,291,000).

The fair values of listed equity investments are based on quoted market prices.

25. Other long term assets

As at 31 December 2011, other long term assets mainly represented prepayment of HK$1,340,090,000 (2010: HK$112,212,000) related to acquisition of land use rights. The remaining balance of HK$46,849,000 (2010: HK$44,664,000) included receivables from other independent third parties.

26. Inventories

Raw materials Work in progress Finished goods	Group 2011 2010 HK$’000 HK$’000 Restated 32,051 29,064 43,014 17,044 16,612 14,178	Group 2011 2010 HK$’000 HK$’000 Restated 32,051 29,064 43,014 17,044 16,612 14,178

	32,051
	43,014
	16,612
		60,286
	91,677

I – 111

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

27. Trade receivables

Trade receivables Impairment	Group 2011 2010 HK$’000 HK$’000 181,667 237,615 (38,260) (38,166)	Group 2011 2010 HK$’000 HK$’000 181,667 237,615 (38,260) (38,166)

	181,667
	(38,260)
		199,449
	143,407

An aged analysis of the trade receivables as at the end of the reporting period, based on the contract date and net of provision, is as follows:

Within one year One to two years Two to three years	Group 2011 2010 HK$’000 HK$’000 131,726 147,272 2,316 16,947 9,365 35,230	Group 2011 2010 HK$’000 HK$’000 131,726 147,272 2,316 16,947 9,365 35,230

	131,726
	2,316
	9,365
		199,449
	143,407

I – 112

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The movements in the provision for impairment of trade receivables are as follows:

At 1 January Impairment losses recognised (note 6) Impairment losses reversed (note 6) Exchange realignment	Group 2011 2010 HK$’000 HK$’000 38,166 25,780 1,632 14,110 (3,356) (2,861) 1,818 1,137	Group 2011 2010 HK$’000 HK$’000 38,166 25,780 1,632 14,110 (3,356) (2,861) 1,818 1,137

	38,166
	1,632
	(3,356)
	1,818
		38,166
	38,260

Included in the above provision for impairment of trade receivables is a provision for individually impaired trade receivables of HK$38,260,000 (2010: HK$38,166,000) with a carrying amount before provision of HK$49,243,000 (2010: HK$80,749,000).

The individually impaired trade receivables relate to customers that were in financial difficulties or were in default in both interest and/or principal payments and only a portion of the receivables is expected to be recovered.

The aged analysis of the trade receivables that are not individually nor collectively considered to be impaired is as follows:

Neither past due nor impaired Less than one year past due	Group 2011 2010 HK$’000 HK$’000 131,716 145,876 708 10,990	Group 2011 2010 HK$’000 HK$’000 131,716 145,876 708 10,990

	131,716
	708
		156,866
	132,424

Receivables that were neither past due nor impaired relate to a large number of diversified customers for whom there was no recent history of default.

Receivables that were past due but not impaired relate to a number of independent customers that have a good track record with the Group. Based on past experience, the directors of the Company are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable.

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APPENDIX I

28. Prepayments, deposits and other receivables

Group 2011 2010 HK$’000 HK$’000 Restated 1,461,241 186,448 669,885 487,672 864,224 1,368,611 2,995,350 2,042,731	Company 2011 2010 HK$’000 HK$’000 – 186,448 7,710 8,785 – –	Company 2011 2010 HK$’000 HK$’000 – 186,448 7,710 8,785 – –

1,461,241	–
669,885	7,710
864,224	–
		195,233
2,995,350	7,710

Included in the Group’s prepayments, deposits and other receivables are loans to the Group’s jointly-controlled entity totalling HK$864,224,000 (2010: HK$1,368,611,000), which are unsecured and have no fixed terms of repayment, and bear interest at rate of 12% per annum (2010: 6.39%).

None of the above assets is either past due or impaired. The financial assets included in the above balances relate to receivables for which there was no recent history of default.

29. Equity investments at fair value through profit or loss

Group 2011 2010 HK$’000 HK$’000 8,023 16,693 11,460 2,183 4 1,688 19,487 20,564	Company 2011 2010 HK$’000 HK$’000 8,023 16,693 – – 4 1,688	Company 2011 2010 HK$’000 HK$’000 8,023 16,693 – – 4 1,688


8,023	8,023
11,460	–

4	4
		18,381
19,487	8,027

Notes:

(a) The above equity investments as at 31 December 2010 and 2011 were classified as held for trading.
(b) On 18 December 2007, the Company purchased from an independent third party up to 37,207,500 warrant shares issued by Coastal Greenland at a consideration of HK$27,000,000. According to HKAS 39, the warrants were recorded as derivatives, which should be measured at fair value at each period end. The revaluation loss of HK$1,684,000 (2010: HK$5,431,000) was recorded in the consolidated income statement in the current year.

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APPENDIX I

30. Cash and cash equivalents and pledged deposits

Group 2011 2010 HK$’000 HK$’000 Restated 3,766,916 5,756,809 1,469,460 422,981 5,236,376 6,179,790 (12,427) – (126,425) – 5,097,524 6,179,790	Company 2011 2010 HK$’000 HK$’000 33,509 1,080,712 1,222,110 4,893	Company 2011 2010 HK$’000 HK$’000 33,509 1,080,712 1,222,110 4,893

3,766,916	33,509
1,469,460	1,222,110
		1,085,605 – –
5,236,376	1,255,619

(12,427)	–
(126,425)	–
		1,085,605
5,097,524	1,255,619

In accordance with relevant documents issued by the PRC State-Owned Land and Resource Bureau, certain property development companies of the Group are required to place in designated bank accounts certain amount of presale proceeds of properties as guarantee deposits for constructions of related properties. The deposits can only be used for purchases of construction materials and the payments of construction fee of the relevant property projects when approval from PRC StateOwned Land and Resource Bureau is obtained. Such guarantee deposits will only be released after completion of related pre-sold properties or issuance of the real estate ownership certificates, whichever is the earlier.

At the end of the reporting period, the cash and cash equivalents of the Group denominated in Renminbi (“RMB”) amounted to HK$3,814,631,000 (2010: HK$5,066,652,000). The RMB is not freely convertible into other currencies. However, under Mainland China’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the respective short term time deposit rates. The bank balances are deposited with creditworthy banks with no recent history of default.

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FINANCIAL INFORMATION OF THE GROUP

31. Interest-bearing bank loans

2011	2010 Restated	HK$’000 29,749 9,465,730
Effective contractual interest rate(%) Maturity	Effective contractual interest rate(%) Maturity 5.35 2011 3.9825-7.63 HIBOR+0.42- HIBOR+0.8 LIBOR+0.48 2011 5.35 2012-2017 4.1301-5.6 HIBOR+0.7 LIBOR+2 2012-2014 2010


6.31-7.34 2012
4.86-7.93 HIBOR+1.95, HIBOR+2.85 2012
		9,495,479

		168,576 2,783,143

6.37-8.645 2013-2021
4.86-7.6475 HIBOR+0.7- HIBOR+2.95, LIBOR+2- LIBOR+2.95 2013-2015
		2,951,719

		12,447,198


2011		HK$’000 4,619,235 1,078,003
Effective contractual interest rate(%) Maturity	Effective contractual interest rate (%) Maturity HIBOR+0.42- HIBOR+0.8, LIBOR+0.48 2011 HIBOR+0.7, LIBOR+2 2012-2014

HIBOR+1.95, HIBOR+2.85 2012

HIBOR+0.7- HIBOR+2.95, LIBOR+2- LIBOR+2.95 2013-2015
		5,697,238

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APPENDIX I

Group 2011 2010 HK$’000 HK$’000 Restated 4,965,249 9,495,479 2,771,562 1,260,172 8,443,696 1,641,966 298,780 49,581 16,479,287 12,447,198	Company 2011 2010 HK$’000 HK$’000 260,000 4,619,235 730,383 – 5,868,723 1,078,003 – –	Company 2011 2010 HK$’000 HK$’000 260,000 4,619,235 730,383 – 5,868,723 1,078,003 – –



4,965,249	260,000
2,771,562	730,383
8,443,696	5,868,723
298,780	–
		5,697,238
16,479,287	6,859,106

(a) Bank loans amounting to HK$1,538,960,000 (2010: HK$198,325,000) were secured by:
(i) certain of the Group’s land and buildings in Mainland China with a net book value of approximately HK$4,742,000 (2010: Nil) (note 14);
(ii) certain of the Group’s properties under development with a net book value of approximately HK$1,585,366,000 (2010: Nil) (note 18);
(iii) certain of the Group’s investment properties with a net book value of approximately HK$694,920,000 (2010: HK$504,518,000) (note 19); and
(iv) certain of the Group’s bank deposits with a net book value of HK$12,427,000 (2010: Nil) (note 30).
(b) Except for the bank loans equivalent to approximately HK$4,883,106,000 (2010: HK$4,547,238,000) and HK$1,976,000,000 (2010: HK$1,150,000,000), which are denominated respectively in United States dollars and Hong Kong dollars, all borrowings of the Group are in RMB.
(c) The carrying amounts of the Group’s and the Company’s borrowings approximate to their fair values, which have been calculated by discounting the expected future cash flows at the prevailing interest rates.

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APPENDIX I

32. Trade payables

An aged analysis of the trade payables as at the end of the reporting period, based on the invoice date, is as follows:

Within one year One to two years Two to three years Over three years	Group 2011 2010 HK$’000 HK$’000 221,772 88,548 1,069 8,638 6,818 2,672 35,058 41,867	Group 2011 2010 HK$’000 HK$’000 221,772 88,548 1,069 8,638 6,818 2,672 35,058 41,867

	221,772
	1,069
	6,818
	35,058
		141,725
	264,717

The trade payables are non-interest-bearing.

33. Other payables and accruals

Group 2011 2010 HK$’000 HK$’000 Restated 1,749,563 1,910,944 2,121,551 1,556,349 286,303 50,828 657,634 567,206 4,815,051 4,085,327	Company 2011 2010 HK$’000 HK$’000 – – 326 86,135 29,213 28,115 24,494 25,732	Company 2011 2010 HK$’000 HK$’000 – – 326 86,135 29,213 28,115 24,494 25,732

1,749,563	–
2,121,551	326
286,303	29,213
657,634	24,494
		139,982
4,815,051	54,033

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APPENDIX I

34. Deferred tax

The movements in deferred tax liabilities and assets during the year are as follows:

Deferred tax liabilities:

Group

2011

At 1 January 2011 Deferred tax charged to the income statement during the year (note 10) Deferred tax charged to equity during the year Exchange realignment Gross deferred tax liabilities at 31 December 2011	Withholding tax on dividend HK$’000 100,203 39,659 – 6,345 146,207	Revaluation of investment properties HK$’000 658,608 77,829 – 34,290 770,727	Revaluation of assets HK$’000 13,263 – – 590 13,853	Revaluation of investments HK$’000 7,652 – (1,419) 310 6,543	Fair value adjustment arising from acquisition of subsidiaries and associates HK$’000 35,337 – – – 35,337	Accelerated tax depreciation on investment properties HK$’000 120,452 13,171 – 1,006 134,629	Total HK$’000 935,515 130,659 (1,419) 42,541
							1,107,296

Deferred tax assets:

Group

Losses available for offsetting against future taxable profits HK$’000 At 1 January 2011 22,413 Deferred tax credited/(charged) to the income statement during the year (note 10) 20,984 Exchange realignment 1,609 Gross deferred tax assets at 31 December 2011 45,006			2011		Total HK$’000 332,348 88,107 18,390
		Tax effect of LAT HK$’000 281,211 28,666 14,294 324,171	Unrealised profits HK$’000 – 38,522 947 39,469	Others HK$’000 28,724 (65) 1,540 30,199
					438,845

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APPENDIX I

Deferred tax liabilities:

Group

At 1 January 2010 Deferred tax charged to the income statement during the year (note 10) Deferred tax charged to equity during the year Disposal of a subsidiary Exchange realignment Gross deferred tax liabilities at 31 December 2010				2010			Total HK$’000 702,659 207,657 (3,229) (5,056) 33,484
	Withholding tax on dividend HK$’000 51,387 46,390 – – 2,426 100,203	Revaluation of investment properties HK$’000 484,721 148,843 – – 25,044 658,608	Revaluation of assets HK$’000 12,845 – – – 418 13,263	Revaluation of investments HK$’000 10,550 – (3,229) – 331 7,652	Fair value adjustment arising from acquisition of subsidiaries and associates HK$’000 40,218 – – (5,056) 175 35,337	Accelerated tax depreciation on investment properties HK$’000 102,938 12,424 – – 5,090 120,452
							935,515

Deferred tax assets:

Group

At 1 January 2010 Deferred tax credited/(charged) to the income statement during the year (note 10) Exchange realignment Gross deferred tax assets at 31 December 2010		2010	2010
	Losses available for offsetting against future taxable profits HK$’000 28,502 (6,937) 848 22,413	Tax effect of LAT HK$’000 209,570 62,568 9,073 281,211	Others HK$’000 24,570 3,785 369 28,724	Total HK$’000 262,642 59,416 10,290
				332,348

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The Group has tax losses arising in Hong Kong of HK$322,367,000 (2010: HK$220,291,000) that are available indefinitely for offsetting against future taxable profits of the companies in which the losses arose. The Group also has tax losses arising in Mainland China of HK$108,604,000 (2010: HK$105,088,000). Accumulated losses amounting to HK$4,263,000, HK$15,263,000, HK$25,863,000, HK$54,623,000 and HK$8,592,000 as at 31 December 2011 will expire in 2012, 2013, 2014, 2015 and 2016, respectively, for offsetting against future taxable profits. Deferred tax assets have not been recognised in respect of these losses as they have arisen in subsidiaries that have been lossmaking for years and it is not considered probable that taxable profits will be available against which the tax losses can be utilised.

Pursuant to the PRC Corporate Income Tax Law, a 10% withholding tax is levied on dividends declared to foreign investors from the foreign investment enterprises established in Mainland China. The requirement is effective from 1 January 2008 and applies to earnings after 31 December 2007. A lower withholding tax rate may be applied if there is a tax treaty between Mainland China and the jurisdiction of the foreign investors. The Group is therefore liable for withholding taxes on dividends distributed by those subsidiaries established in Mainland China in respect of earnings generated from 1 January 2008. As at 31 December 2011, the Group recognised a deferred tax liability of HK$146,207,000 (2010: HK$100,203,000) in respect of the withholding tax on future dividend distribution by these PRC subsidiaries.

There are no income tax consequences attaching to the payment of dividends by the Company to its shareholders.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

35. Share capital Shares Authorised: 5,000,000,000 (2010: 5,000,000,000) ordinary shares of HK$0.05 (2010: HK$0.05) each Issued and fully paid: 3,626,024,304 (2010: 3,536,568,090) ordinary shares of HK$0.05 (2010: HK$0.05) each	2011 HK$’000	2010 HK$’000 250,000


	250,000

		176,828

	181,301

During the year, the movements in share capital were as follows:

(a) The subscription rights attaching to 3,400,000 share options were exercised at subscription prices of HK$2.165 per share, resulting in the issue of 3,400,000 shares of HK$0.05 each for a total cash consideration, before expenses, of HK$7,361,000. An amount of HK$1,972,000 was transferred from the share option reserve to the share premium account upon the exercise of the share options.
(b) On 25 August 2011, the Board resolved to declare an interim dividend of HK7.00 cents per share for the six months ended 30 June 2011. The Board further resolved that such interim dividend be satisfied wholly in the form of an allotment of new fully paid share(s) of nominal value of HK$0.05 each in the share capital of the Company (“scrip shares”) but shareholders will be given the option of receiving such interim dividend wholly in cash in lieu of such allotment, or partly in cash and partly in the form of scrip shares. The interim dividend in the form of scrip shares, resulted in the issue of 86,056,214 shares at an issue price of HK$1.560 per share for a total consideration, before expenses, of HK$134,248,000.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

A summary of the transactions during the year with reference to the above movements in the Company’s issued share capital is as follows:

At 1 January 2010 Share options exercised Share issue expenses At 31 December 2010 and 1 January 2011 Share options exercised (a) Dividend in the form of new shares (b) Share issue expenses At 31 December 2011	Number of shares in issue 3,527,835,090 8,733,000 – 3,536,568,090 3,400,000 86,056,214 – 3,626,024,304	Issued share capital HK$’000 176,392 436 – 176,828 170 4,303 – 181,301	Share premium account HK$’000 5,384,872 13,335 (10) 5,398,197 9,163 129,945 (37) 5,537,268	Total HK$’000 5,561,264 13,771 (10)
				5,575,025 9,333 134,248 (37)
				5,718,569

Share options

Details of the Company’s share option scheme and the share options issued under the scheme are included in note 36 to the financial statements.

36. Share option scheme

The Company operates a share option scheme (the “Scheme”) for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations. Eligible participants of the Scheme include any employee or director (including executive, non-executive and independent non-executive director) of any member of the Group, or any employee, partner or director of any business consultant, joint venture partner, financial adviser and legal adviser of and to any member of the Group, as absolutely determined by the board of directors. The Scheme became effective on 5 June 2002 and, unless otherwise cancelled or amended, shall be valid and effective for a period of 10 years from that date, after which period no further options will be issued but in all other respects the provisions of the Scheme shall remain in full force and effect. The remaining life of the Scheme will expire on 5 June 2012.

I – 123

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The maximum number of ordinary shares which may be issued upon exercise of all options to be granted under the Scheme and any other share option schemes of the Company shall not in aggregate exceed 10% of the total number of shares in issue as at the date of approval of the Scheme unless the Company obtains a fresh approval from its shareholders. Options lapsed in accordance with the terms of the Scheme will not be counted for the purpose of calculating such 10% limit. Notwithstanding the above, the maximum number of shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Scheme and any other share option schemes of the Company shall not exceed 30 percent of the shares in issue from time to time. The 10% limit was refreshed by an ordinary resolution passed by the shareholders at the annual general meeting held on 12 June 2006, which enabled the grant of further options to subscribe up to 250,271,396 shares, representing 10% of the shares in issue as at 12 June 2006. As at the date of this Annual Report, the total number of shares available for issue under the Scheme was 189,131,396 shares (including options for 98,778,000 shares that have been granted but not yet lapsed or exercised) which represented 5.22% of the issued share capital of the Company.

The maximum entitlement of each participant under the Scheme is that 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 shall not exceed 1% of the total number of shares in issue.

The period under which an option may be exercised will be determined by the board of directors at their absolute discretion and notified by the directors to each grantee as being the period during which an option may be exercised, and shall expire no later than 10th Anniversary of the date upon which the option is granted and accepted in accordance with the Scheme. Unless otherwise determined by the Board and specified in the offer letter at the time of the offer, there is no minimum period for which an option must be held before the option can be exercised.

An option is open for acceptance for a period of 28 days from the date of offer. The amount payable on acceptance of an option is HK$1. The full amount of exercise price for the subscription for shares has to be paid upon exercise of an option.

The exercise price shall be a price determined by the board of directors and notified to a participant and shall be at least the highest of (i) the closing price of the shares as stated in The Stock Exchange of Hong Kong Limited’s daily quotations sheet on the date of offer of grant, which must be a business day, (ii) a price being the average of the closing prices of the shares as stated in The Stock Exchange of Hong Kong Limited’s daily quotations sheets for the five business days immediately preceding the date of offer of grant, and (iii) the nominal value of a share in the Company.

I – 124

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

2011 Weighted average exercise price Number of options	2011 Weighted average exercise price Number of options	2010 Weighted average exercise price Number of options per share HK$ 4.2072 70,713,000 2.4074 97,878,000 1.2404 (8,733,000) 4.7680 (57,680,000) 2.4201 102,178,000	2010 Weighted average exercise price Number of options per share HK$ 4.2072 70,713,000 2.4074 97,878,000 1.2404 (8,733,000) 4.7680 (57,680,000) 2.4201 102,178,000
per share		per share
HK$		HK$
		4.2072 2.4074 1.2404 4.7680 2.4201
2.4201	102,178,000
–	–
2.165	(3,400,000)
–	–
			102,178,000
2.4289	98,778,000

The weighted average share price at the date of exercise for share options exercised during the year was HK$2.576 per share (2010: HK$3.159 per share).

The exercise prices and exercise periods of the share options outstanding as at the end of the reporting period are as follows:

2011
Number of options	Exercise price*	Exercise period
	HK$ per share
900,000	4.7680	4-7-2007 to 3-7-2012
93,862,000	2.3900	19-7-2012 to 18-7-2015
4,016,000	2.8140	19-7-2012 to 18-7-2015
98,778,000

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2010
Number of options	Exercise price*	Exercise period
	HK$ per share
3,400,000	2.1650	29-5-2006 to 28-5-2011
900,000	4.7680	4-7-2007 to 3-7-2012
93,862,000	2.3900	19-7-2012 to 18-7-2015
4,016,000	2.8140	19-7-2012 to 18-7-2015
102,178,000

The exercise price of the share options is subject to adjustment in case of rights or bonus issues, or other similar changes in the Company’s share capital.

No share option has been granted during the year. The Group recognised a share option expense of HK$24,746,000 (2010: HK$10,661,000) during the year ended 31 December 2011.

The 3,400,000 share options exercised during the year resulted in the issue of 3,400,000 ordinary shares of the Company and new share capital of HK$170,000 and share premium of HK$9,163,000 (before issue expenses), as further detailed in note 35 to the financial statements.

At the end of the reporting period, the Company had 98,778,000 share options outstanding under the Scheme. The exercise in full of the outstanding share options would, under the present capital structure of the Company, result in the issue of 98,778,000 additional ordinary shares of the Company and additional share capital of HK$4,939,000 and share premium of HK$234,984,000 (before issue expenses).

As at the date of this report, options carrying rights to subscribe for 98,778,000 shares remain outstanding and yet to be exercised, which represented approximately 2.72% of the Company’s shares in issue as at that date.

37. Reserves

(a) Group

The amounts of the Group’s reserves and the movements therein for the current and prior years are presented in the consolidated statement of changes in equity on pages 71 to 72 of the financial statements.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Pursuant to the relevant laws and regulations for Sino-foreign joint venture enterprises, a portion of the profits of the Group’s subsidiaries and associates in Mainland China has been transferred to the statutory reserve which is restricted as to use.

(b) Company

Notes At 1 January 2010 Total comprehensive income for the year Share issue expenses 35 Share options exercised 35 Share options lapsed Equity-settled share option expense 36 Interim 2010 dividend 12 Adjustment to prior year’s final dividend 12 Proposed final 2010 dividend 12 At 31 December 2010 Total comprehensive income for the year Dividend in the form of new share 35 Share options exercised 35 Share issue expenses 35 Equity-settled share option expense 36 Interim 2011 dividend 12 Adjustment to prior year’s final dividend 12 Proposed final 2011 dividend 12 At 31 December 2011	Share premium account HK$’000 5,384,872 – (10) 13,335 – – – – – 5,398,197 – 129,945 9,163 (37) – – – – 5,537,268	Capital redemption reserve HK$’000 2,036 – – – – – – – – 2,036 – – – – – – – – 2,036	Share option reserve HK$’000 43,288 – – (2,939) (38,125) 10,661 – – – 12,885 – – (1,972) – 24,746 – – – 35,659	Retained profits HK$’000 336,934 368,387 – – 38,125 – (247,560) (612) (247,560) 247,714 561,343 – – – – (247,798) (238) (290,082) 270,939	Total HK$’000 5,767,130 368,387 (10) 10,396 – 10,661 (247,560) (612) (247,560)
					5,660,832 561,343 129,945 7,191 (37) 24,746 (247,798) (238) (290,082)
					5,845,902

The share option reserve comprises the fair value of share options granted which are yet to be exercised, as further explained in the accounting policy for sharebased payment transactions in note 2.4 to the financial statements. The amount will either be transferred to the share premium account when the related options are exercised, or be transferred to retained profits when the related options lapsed.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

38. Operating lease arrangements

(i) As lessor

The Group leases its investment properties (note 19 to the financial statements) and property, plant and equipment under operating lease arrangements, with leases negotiated for terms ranging from two to eighteen years. The terms of the leases generally also require the tenants to pay security deposits and provide for periodic rent adjustments according to the then prevailing market conditions.

As at 31 December 2011, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

Within one year In the second to fifth years, inclusive After five years	Group 2011 2010 HK$’000 HK$’000 351,647 345,751 499,728 544,463 185,485 288,867	Group 2011 2010 HK$’000 HK$’000 351,647 345,751 499,728 544,463 185,485 288,867

	351,647
	499,728
	185,485
		1,179,081
	1,036,860

The Group leases certain of its properties under operating lease arrangements. Leases for the properties are negotiated for terms ranging from three to nineteen years.

As at 31 December 2011, the Group and the Company had total future minimum lease payments under non-cancellable operating leases falling due as follows:

Group 2011 2010 HK$’000 HK$’000 8,179 7,095 11,938 12,721 20,117 19,816	Company 2011 2010 HK$’000 HK$’000 1,825 1,825 608 2,434	Company 2011 2010 HK$’000 HK$’000 1,825 1,825 608 2,434

8,179	1,825
11,938	608
		4,259
20,117	2,433

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

39. Capital commitments

In addition to the operating lease commitments detailed in note 38(ii) above, the Group and the Company had the following commitments at the end of the reporting period:

Group 2011 2010 HK$’000 HK$’000 Restated 5,683,011 6,822,677 1,641,265 405,268 7,324,276 7,227,945	Company 2011 2010 HK$’000 HK$’000 – –	Company 2011 2010 HK$’000 HK$’000 – –


5,683,011	–
		337,552
1,641,265	–
		337,552
7,324,276	–

40. Contingent liabilities

At the end of the reporting period, contingent liabilities not provided for in the financial statements were as follows:

(i) Guarantees given to banks for credit facilities granted to subsidiaries	Group 2011 2010 HK$’000 HK$’000 – –	Company 2011 2010 HK$’000 HK$’000 1,604,070 1,117,675	Company 2011 2010 HK$’000 HK$’000 1,604,070 1,117,675

	–	1,604,070

The guarantees given to banks for credit facilities granted to the subsidiaries by the Company will expire on 31 December 2012.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(ii) As at 31 December 2011, the Group has given guarantees to a maximum extent of approximately HK$1,401,107,000 (2010: HK$962,473,000) to banks for housing loans extended by the banks to the purchasers of the Group’s properties.

(iii) A statement of claim dated 27 August 2002 was issued by Fancheng Property Development Co., Limited (the “Plaintiff”) against Shum Yip Group (Shenzhen) Co., Ltd. (“Shum Yip Shenzhen”, renamed as Shum Yip Southern Land (Holdings) Co., Ltd. in the year of 2007), a wholly-owned subsidiary of the Company as the first defendant and Yaoheng Development Co., Ltd. as the second defendant in a civil claim at the court in Mainland China.

The Plaintiff claimed against Shum Yip Shenzhen for, inter alia, damages suffered by the Plaintiff as a result of the breach by Shum Yip Shenzhen of the terms of a cooperation agreement entered into between the Plaintiff and Shum Yip Shenzhen dated 8 July 1991, which include (i) Shum Yip Shenzhen’s deliberate register of the properties named Shenfa Garden under the name of Shum Yip Shenzhen and its refusal to give the properties to the Plaintiff and (ii) Shum Yip Shenzhen’s appropriation of the Plaintiff’s sales proceeds to compensate the individual owners and the construction party of Shenfa Garden while keeping the income in relation to certain car parks and the kindergarten situated within the area of Shenfa Garden. The Plaintiff claimed a total compensation of approximately RMB170 million against Shum Yip Shenzhen. Shum Yip Shenzhen lodged a defence and a counter-claim for compensation of RMB1.3 million against the Plaintiff on 22 October 2002. This case was heard in court on 26 March 2003 and 5 November 2004, the arbitration process was complicated and time-consuming.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

On 4 January 2008, the Plaintiff and Shum Yip Shenzhen entered into an amicable settlement agreement, pursuant to which the Plaintiff agreed to partially waive the claim mentioned above, and the remaining claim was RMB40,000,000 (equivalent to approximately HK$45,432,000). On 4 August 2009, the High Court of Guangdong province arbitrated the partial waiver of the claim.

On 23 December 2009, the High Court of Guangdong province (“Guangdong High Court”) arbitrated to overrule both the claims of the Plaintiff and the counter-claim of Shum Yip Shenzhen. On 2 February 2010, the Plaintiff appealed to the Supreme People’s Court of the PRC, in which the Plaintiff claimed for revocation of the judgement of the Guangdong High Court and affirmed part of their original claims of RMB26,000,000 (equivalent to approximately HK$29,530,800). On 9 September 2010, the Supreme People’s Court of the PRC opened a court session on the issue. On 11 February 2011, the Supreme People’s Court of the PRC arbitrated to overrule the judgement of Guangdong High Court and the case was remanded to Guangdong High Court for a new trial. As at the date of this report, the case was still subject to final judgement of Guangdong High Court.

As advised by Hong Kong lawyers, pursuant to a deed (the “Deed”) entered into on 12 February 1997 by Shum Yip Holdings as covenanter in favour of the Company as covenantee in connection with the listing of the Company, the Company could claim indemnity from Shum Yip Holdings if the Plaintiff and/or the applicant is successful in its claim against Shum Yip Shenzhen on the grounds that Shum Yip Shenzhen had materially breached the cooperation agreement, and the circumstances which gave rise to the above litigation were already in existence at the time of execution of the Deed.

I – 131

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

41. Related party transactions

(a) The Group had the following material transactions with related parties during the year:

Notes Shum Yip Holdings Company Limited, the immediate holding company: Rental expenses paid (i) Associates: Purchase of properties (ii) Interest income A jointly-controlled entity: Interest income (note 28)	Group 2011 2010 HK$’000 HK$’000 Restated 5,479 4,978 721,203 – 5,848 18,840 119,389 38,350	Group 2011 2010 HK$’000 HK$’000 Restated 5,479 4,978 721,203 – 5,848 18,840 119,389 38,350


	5,479

	721,203
	5,848

	119,389

Notes:

(i) The rentals were recognised at prices based on mutual agreement between the parties.

(ii) The transaction with the associate was the purchase of properties of Tianan Golf Longyuan at the average price of HK$35,697 per square meter.

(b) Commitments with related parties:

On 1 May 2008 and 1 January 2011, the Company and a subsidiary of the Group respectively entered into lease agreements for periods ending 30 April 2013 and 31 December 2013 with Shum Yip Holdings Company Limited, the immediate holding company, respectively. The amount of lease expenses for the year is included in note 41(a) to the financial statement. The Group expects total lease expenses in 2012 and 2013 to be approximately HK$5,184,000 and HK$3,967,000, respectively.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(c) Outstanding balances with related parties:
(i) Details of the Group’s loans to/from its associates as at the end of the reporting period are included in note 22 to the financial statements.
(ii) As disclosed in the consolidated statement of financial position, the Group had payable amounting to HK$54,641,000 (2010: HK$41,616,000) to 深業集團有限公司, the ultimate holding company. The payable is unsecured, interest-free and has no fixed terms of repayment.
(iii) Details of the Group’s prepayments, deposits and other receivables with its jointly-controlled entity as at 31 December 2011 are disclosed in note 28 to the financial statements.
(iv) The loans to fellow subsidiaries included in the Group’s prepayments, deposits and other receivables of HK$117,669,000 (2010: HK$10,499,000) are unsecured, interest-free and has no fixed terms of repayment.
(v) The loans from fellow subsidiaries included in the Group’s other payables and accruals totalling HK$103,522,000 (2010: HK$15,298,000) are unsecured, interest-free and payable on demand.
(d) Compensation of key management personnel of the Group:

Short term employee benefits Post-employment benefits Equity-settled share option expense Total compensation paid to key management personnel	2011 HK$’000	2010 HK$’000 7,312 1,217 3,277

	7,908
	1,142
	8,410
		11,806
	17,460

Further details of directors’ emoluments are included in note 8 to the financial statements.

I – 133

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

42. Financial instruments by category

The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows:

2011

Financial assets at fair value through profit or loss-held for trading HK$’000	Held-to- maturity investments HK$’000	Group Loans and receivables HK$’000	Available- for-sale financial assets HK$’000	Total HK$’000

–	–	234,955	–	234,955
–	–	864,224	–	864,224
–	387,968	–	–	387,968
–	–	–	29,913	29,913
–	–	143,407	–	143,407
–	–	669,885	–	669,885
19,487	–	–	–	19,487
–	–	12,427	–	12,427
–	–	126,425	–	126,425
–	–	5,097,524	–	5,097,524

19,487	387,968	7,148,847	29,913	7,586,215

Financial liabilities Trade payables Financial liabilities included in other payables and accruals (note 33) Interest-bearing bank loans Due to the ultimate holding company Loans from associates (note 22)	Financial liabilities at amortised cost HK$’000	Total HK$’000 264,717 2,121,551 16,479,287 54,641 286,303
	264,717
	2,121,551
	16,479,287
	54,641
	286,303
		19,206,499
	19,206,499

I – 134

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2010

Group Restated Financial assets Financial assets at fair value through profit or loss-held for trading Held-to- maturity investments Loans and receivables Available- for-sale financial assets HK$’000 HK$’000 HK$’000 HK$’000 Loans to associates (note 22) – – 71,917 – Loans to a jointly-controlled entity (note 28) – – 1,368,611 – Held-to-maturity investment – 385,938 – – Available-for-sale investments – – – 34,014 Trade receivables – – 199,449 – Financial assets included in prepayments, deposits and other receivables (note 28) – – 487,672 – Equity investments at fair value through profit or loss 20,564 – – – Cash and cash equivalents – – 6,179,790 – 20,564 385,938 8,307,439 34,014 Group Restated Financial liabilities Financial liabilities at fair value through profit or loss-held for trading Financial liabilities at amortised cost HK$’000 HK$’000 Trade payables – 141,725 Financial liabilities included in other payables and accruals – 1,300,359 Derivative financial instruments 65,861 – Interest-bearing bank loans – 12,447,198 Due to the ultimate holding company – 41,616 Loans from associates – 50,828 65,861 13,981,726	Group Restated Financial assets Financial assets at fair value through profit or loss-held for trading Held-to- maturity investments Loans and receivables Available- for-sale financial assets HK$’000 HK$’000 HK$’000 HK$’000 Loans to associates (note 22) – – 71,917 – Loans to a jointly-controlled entity (note 28) – – 1,368,611 – Held-to-maturity investment – 385,938 – – Available-for-sale investments – – – 34,014 Trade receivables – – 199,449 – Financial assets included in prepayments, deposits and other receivables (note 28) – – 487,672 – Equity investments at fair value through profit or loss 20,564 – – – Cash and cash equivalents – – 6,179,790 – 20,564 385,938 8,307,439 34,014 Group Restated Financial liabilities Financial liabilities at fair value through profit or loss-held for trading Financial liabilities at amortised cost HK$’000 HK$’000 Trade payables – 141,725 Financial liabilities included in other payables and accruals – 1,300,359 Derivative financial instruments 65,861 – Interest-bearing bank loans – 12,447,198 Due to the ultimate holding company – 41,616 Loans from associates – 50,828 65,861 13,981,726	Total HK$’000 71,917 1,368,611 385,938 34,014 199,449 487,672 20,564 6,179,790
		8,747,955

		Total HK$’000 141,725 1,300,359 65,861 12,447,198 41,616 50,828
		14,047,587

I – 135

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Financial assets at fair value through profit or loss-held for trading HK$’000	Held-to- maturity investments HK$’000	2011 Loans and receivables HK$’000	Available- for-sale financial assets HK$’000	Company Total Financial assets at fair value through profit or loss-held for trading HK$’000 HK$’000 170,002 – 387,968 – 1,720 – 8,027 18,381 7,710 – 4,740,097 – 1,255,619 – 6,571,143 18,381	Total HK$’000 163,649 385,938 1,720 18,381 499 3,486,988 1,085,605
–	–	170,002	–	170,002
–	387,968	–	–	387,968
–	–	–	1,720	1,720
8,027	–	–	–	8,027
–	–	7,710	–	7,710
–	–	4,740,097	–	4,740,097
–	–	1,255,619	–	1,255,619
					5,142,780
8,027	387,968	6,173,428	1,720	6,571,143

2011 Financial liabilities at amortised cost Total HK$’000 HK$’000	2011 Financial liabilities at amortised cost Total HK$’000 HK$’000	Total HK$’000 54,979 28,115 65,861 5,697,238 – 57,466

326	326
29,213	29,213
–	–
6,859,106	6,859,106
5,207	5,207
156,983	156,983
		5,903,659
7,050,835	7,050,835

I – 136

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

43. Fair value and fair value hierarchy

The carrying amounts and fair values of the Group’s and the Company’s financial instruments are as follows:

Group

Carrying 2011 HK$’000	Fair values 2011 2010 HK$’000 HK$’000 Restated 5,097,524 6,179,790 126,425 – 12,427 – 234,955 71,917 864,224 1,368,611 143,407 199,449 669,885 487,672 29,913 34,014 19,487 20,564 322,203 421,865	Fair values 2011 2010 HK$’000 HK$’000 Restated 5,097,524 6,179,790 126,425 – 12,427 – 234,955 71,917 864,224 1,368,611 143,407 199,449 669,885 487,672 29,913 34,014 19,487 20,564 322,203 421,865


5,097,524	5,097,524
126,425	126,425
12,427	12,427
234,955	234,955
864,224	864,224
143,407	143,407
669,885	669,885
29,913	29,913
19,487	19,487
387,968	322,203
		8,783,882
7,586,215	7,520,450

		141,725 1,300,359 65,861 12,447,198 41,616 50,828

264,717	264,717
2,121,551	2,121,551
–	–
16,479,287	16,479,287
54,641	54,641
286,303	286,303
		14,047,587
19,206,499	19,206,499

I – 137

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Company

Carrying 2011 HK$’000	Fair values 2011 2010 HK$’000 HK$’000 170,002 163,649 322,203 421,865 1,255,619 1,085,605 7,710 499 8,027 18,381 4,740,097 3,486,988 1,720 1,720	Fair values 2011 2010 HK$’000 HK$’000 170,002 163,649 322,203 421,865 1,255,619 1,085,605 7,710 499 8,027 18,381 4,740,097 3,486,988 1,720 1,720


170,002	170,002
387,968	322,203
1,255,619	1,255,619
7,710	7,710
8,027	8,027
4,740,097	4,740,097
1,720	1,720
		5,178,707
6,571,143	6,505,378

		57,466 54,979 28,115 5,697,238 – 65,861

156,983	156,983
326	326
29,213	29,213
6,859,106	6,859,106
5,207	5,207
–	–
		5,903,659
7,050,835	7,050,835

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The fair values of cash and cash equivalents, restricted cash, trade receivables, trade payables, financial assets included in prepayments, deposits and other receivables, financial liabilities included in other payables and accruals, amounts due from/to subsidiaries, amounts due to the ultimate holding company, loans from associates and investments in subsidiaries approximate to their carrying amounts largely due to the short term maturities of these instruments.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The fair values of loans to associates, pledged deposits, interest-bearing bank loans and held-to-maturity investment have been calculated by discounting the expected future cash flows using rates currently available for instruments on similar terms, credit risk and remaining maturities.

The fair values of listed equity investments are based on quoted market prices.

Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair values of financial instruments:

Level 1: fair values measured based on quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: fair values measured based on valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: fair values measured based on valuation techniques for which any inputs which have a significant effect on the recorded fair value are not based on observable market data (unobservable inputs)

As at 31 December 2011, the Group held the following financial instruments measured at fair value:

Assets measured at fair value as at 31 December 2011:

Level 1 HK$’000	Level 2 HK$’000	Level 3 HK$’000	Total HK$’000

29,913	–	–	29,913
19,483	4	–	19,487

49,396	4	–	49,400

I – 139

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 31 December 2011, the Company held the following financial instruments measured at fair value:

Assets measured at fair value as at 31 December 2011:

Level 1 HK$’000	Level 2 HK$’000	Level 3 HK$’000	Total HK$’000

1,720	–	–	1,720
8,023	4	–	8,027

9,743	4	–	9,747

44. Financial risk management objectives and policies

The Group’s principal financial instruments, other than derivative financial instruments, comprise interest-bearing bank loans, cash and cash equivalents, equity investments and an investment in senior notes. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk, liquidity risk and equity price risk. The board of directors reviews and agrees policies for managing each of these risks and they are summarised below.

Interest rate risk

The interest rate risk of the Group is mainly due to the interest rate fluctuations of its bank borrowings. Interest on these bank borrowings is computed based on market rates. In the prior year, the Group entered into interest rate swaps, in which the Group agreed to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated to hedge underlying debt obligations.

The Group will constantly assess the interest rate risk it encounters to decide whether it is required to hedge against the possible interest rate risk that may arise.

I – 140

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

On 31 December 2011, if the interest rate of bank borrowings had increased/ decreased by 0.5% and all other factors remained unchanged, the profit after tax for the year of the Group and the Company would have decreased/increased by approximately HK$47,137,000 (2010: HK$32,717,728) and HK$28,017,000 (2010: HK$30,302,837), respectively.

Foreign currency risk

Most of the operating income of the Group’s business is in RMB and the Group’s assets held and all of its committed borrowings of the Group are mainly denominated in RMB and US$. During the year, RMB appreciated compared to US$ and HK$. Management believes such an appreciation will not have any negative effect on the Group. Hence, the Group has not adopted any financial instruments for hedging purposes. However, the Group will constantly assess the foreign exchange risk it encounters so as to immediately decide the hedging policy required to hedge against the possible foreign exchange risk that may arise.

On 31 December 2011, if HKD had appreciated by 5% against RMB/US$ and all other factors remained unchanged, the profit after tax for the year of the Group and the Company could have increased by HK$235,650,767 (2010: HK$176,745,857) and HK$82,900,539 (2010: HK$53,806,560), respectively. The change mainly due to the net value changes of the exchange gains in US$-denominated bank borrowings and RMB-denominated cash and cash equivalents, after offsetting the exchange loss in RMB-denominated trade payables.

Credit risk

The credit risk of the Group’s financial assets, which comprise cash and cash equivalents, available-for-sale financial assets, trade and other receivables, arises from default of the counterparty, with a maximum exposure equal to the carrying amounts of these instruments. The Group is also exposed to credit risk through the granting of financial guarantees, further details of which are disclosed in note 40(ii) to the financial statements.

I – 141

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

To manage the risk, deposits are mainly placed with licensing banks which are all high credit quality financial institutions. The Group trades only with recognised and creditworthy third parties except for the sales of properties. The Group has policies in place to ensure that sales are made to buyers with appropriate financial strength and appropriate percentage of down payments. The Group would not release the property ownership certificates to the buyers before the buyers fully settle the payment. It also has other monitoring procedures to ensure that followup action is taken to recover overdue debts. In addition, the Group reviews regularly the recoverable amount of each individual trade receivable to ensure that adequate impairment losses are made for irrecoverable amounts. The Group has no significant concentrations of credit risk, with exposure spread over a number of counterparties and customers.

Further quantitative data in respect of the Group’s exposure to credit risk arising from trade receivables are disclosed in note 27 to the financial statements.

Liquidity risk

Liquidity risk arises when the Group is unable to meet its current liabilities that fall due. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of short and long term bank loans. Through maintaining a reasonable proportion in its asset and liability structure, the Group is able to meet its ongoing financial needs.

I – 142

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The maturity profile of the Group’s financial liabilities as at the end of the reporting period is as follows:

Group

		201	1		Total HK$’000
On demand HK$’000	Within one year HK$’000	One to two years HK$’000	Two to three years HK$’000	Over three years HK$’000

9,871	5,677,223	3,276,362	6,239,163	2,982,284	18,184,903
–	264,717	–	–	–	264,717
–	2,121,551	–	–	–	2,121,551
54,641	–	–	–	–	54,641
–	286,303	–	–	–	286,303

64,512	8,349,794	3,276,362	6,239,163	2,982,284	20,912,115

Restated Interest-bearing bank loans Trade payables Financial liabilities included in other payables and accruals Derivative financial instruments Due to the ultimate holding company Loans from associates Total			20	10
	On demand HK$’000 108,000 – – – 41,616 – 149,616	Within one year HK$’000 9,875,547 141,725 1,300,359 65,861 – 50,828 11,434,320	One to two years HK$’000 1,492,600 – – – – – 1,492,600	Two to three years HK$’000 759,032 – – – – – 759,032	Over three years HK$’000 1,149,543 – – – – – 1,149,543	Total HK$’000 13,384,722 141,725 1,300,359 65,861 41,616 50,828
						14,985,111

The maturity profile of the Company’s financial liabilities as at the end of the reporting period is as follows:

Company

		20	11		Total HK$’000
On demand HK$’000	Within one year HK$’000	One to two years HK$’000	Two to three years HK$’000	Over three years HK$’000

–	480,149	943,125	3,644,799	2,440,293	7,508,366
–	326	–	–	–	326
–	29,213	–	–	–	29,213
5,207	–	–	–	–	5,207
–	156,983	–	–	–	156,983

5,207	666,671	943,125	3,644,799	2,440,293	7,700,095


–	1,604,070	–	–	–	1,604,070

I – 143

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

		2010
Within one year HK$’000 4,676,975 54,979 28,115 65,861 57,466 4,883,396 1,117,675	One to two years HK$’000 – – – – – – –	Two to three years HK$’000 321,070 – – – – 321,070 –	Over three years HK$’000 852,427 – – – – 852,427 –	Total HK$’000 5,850,472 54,979 28,115 65,861 57,466
				6,056,893

				1,117,675

Equity price risk

The equity price risk of the Group mainly arises from the changes in market prices for held-for-trading equity investments. The book values of this type of financial assets held by the Group are recognised according to market quotes as at the end of the reporting period.

On 31 December 2011, if the price of listed equity securities held by the Group had increased/decreased by 10%, and all other factors remained unchanged and excluding tax items, the book values of the listed equity securities of the Group and the Company would have increased/decreased by HK$1,948,000 (2010: HK$2,056,398) and HK$802,000 (2010: HK$1,838,113), respectively.

Capital management

The objectives of the Group’s capital management policy are to ensure the financing capabilities of the Company in running its operation on a going concern basis, to maintain an optimal capital structure, to reduce capital cost and to maximise the value of shareholders.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group manages and adjusts its capital structure appropriately according to the specific features of the risks of its assets and the changes in various economic conditions. Through adjustments in dividend distribution, injections and repayments of capital by shareholders or issuance of new shares, the Group is able to maintain an optimal capital structure of the Company.

The Group monitors capital using a gearing ratio, which is net debts divided by equity attributable to owners of the parent. The Group’s policy is, in the long run, to maintain the average gearing ratio no more than approximately 70%. Net debts are interest-bearing bank loans less cash and cash equivalents, pledged deposits and restricted cash. The gearing ratios as at the end of the reporting periods are as follows:

Group

Interest-bearing bank loans (note 31) Less: Cash and cash equivalents (note 30) Pledged deposits (note 30) Restricted cash (note 30) Net debts Equity attributable to owners of the parent Gearing ratio	2011 HK$’000	2010 HK$’000 Restated 12,447,198 (6,179,790) – – 6,267,408 13,474,903 47%

	16,479,287
	(5,097,524)
	(12,427)
	(126,425)

	11,242,911

	15,543,379

	72%

I – 145

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

45. Comparative amounts

As further explained in note 2.2.2 to the financial statements, the Group changed to adopt equity method to account for its investments in jointly-controlled entities during the current year, therefore accounting treatment and presentation of certain items in the financial statements have been revised to comply with the accounting policy changed. In addition, the comparative income statement has been re-presented as if the equity method had been adopted at the beginning of the comparative period.

46. Approval of the financial statements

The financial statements were approved and authorised for issue by the board of directors on 27 March 2012.

I – 146

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The following is the text of the accountants’ report of Target Group prepared for the purpose of incorporation in this circular, received from the reporting accountants, Ernst & Young.

22/F, CITIC Tower 1 Tim Mei Avenue Central, Hong Kong

28 March 2013

The Directors

Shenzhen Investment Limited

Dear Sirs,

We set out below our report on the financial information of Shenzhen Silicon Valley Hi-tech Investment Company Limited ( the “Target Company”) and its subsidiaries (hereinafter collectively referred to as the “Target Group”) comprising the consolidated income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Target Group for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012 (the “Relevant Periods”), and the consolidated statements of financial position of the Target Group as at 31 December 2011 and 2012, the statements of financial position of the Target Company as at 31 December 2011 and 2012, together with the notes thereto (the “Financial Information”) for inclusion in the circular of Shenzhen Investment Limited dated 28 March 2013 (the “Circular”) in connection with the proposed acquisition of the Target Company.

The Target Company was incorporated in the British Virgin Islands (the “BVI”) on 20 April 2011 as a company with limited liability under the Business Companies Act of the British Virgin Islands (2004). Apart from investment holding, the Target Company has not commenced any business or operation since its incorporation.

IIA – 1

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

For the purpose of this report, the directors of the Target Company (the “Directors”) have prepared the consolidated financial statements of the the Target Group (the “Underlying Financial Statements”) in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”), which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations, issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). The Underlying Financial Statements for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012 were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA.

The Financial Information set out in this report has been prepared from the Underlying Financial Statements with no adjustments made thereon.

DIRECTORS’ RESPONSIBILITY

The Directors are responsible for the preparation of the Underlying Financial Statements, the Financial Information that give a true and fair view in accordance with HKFRSs, and for such internal control as the Directors determine is necessary to enable the preparation of the Financial Information that are free from material misstatement, whether due to fraud or error.

REPORTING ACCOUNTANTS’ RESPONSIBILITY

It is our responsibility to form an independent opinion on the Financial Information and to report our opinion thereon to you.

For the purpose of this report, we have examined the Underlying Financial Statements and have carried out procedures on the Financial Information in accordance with Auditing Guideline 3.340 Prospectuses and the Reporting Accountant issued by the HKICPA.

OPINION IN RESPECT OF THE FINANCIAL INFORMATION

In our opinion, for the purpose of this report, the Financial Information gives a true and fair view of the state of affairs of the Target Group and the Target Company as at 31 December 2011 and 2012 and of the consolidated results and cash flows of the Target Group for each of the Relevant Periods.

IIA – 2

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

I. FINANCIAL INFORMATION

CONSOLIDATED INCOME STATEMENTS

Notes REVENUE 5 Cost of sales Gross profit Other income and gains 5 Administrative expenses Other expenses Finance costs 7 LOSS BEFORE TAX 6 Income tax 10 LOSS FOR THE PERIOD/YEAR	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 – – – 11,056 (4,393) (610) (32,084) (26,031) 5,987 (20,044)	Year ended 31 December 2012 HK$’000 – – – 1,086 (17,991) (1,576) (66,678) (85,159) 20,733 (64,426)

IIA – 3

APPENDIX II A

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

LOSS FOR THE PERIOD/YEAR OTHER COMPREHENSIVE INCOME Exchange differences on translation OTHER COMPREHENSIVE INCOME FOR THE PERIOD/YEAR, NET OF TAX TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD/YEAR	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 (20,044) 61,270 61,270 41,226	Year ended 31 December 2012 HK$’000 (64,426) 19,720 19,720 (44,706)

IIA – 4

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Notes NON-CURRENT ASSETS Property, plant and equipment 12 Investment properties under construction 13 Prepayment 16 Deferred tax asset 19 Total non-current assets CURRENT ASSETS Properties under development 14 Deposits and other receivables 16 Due from fellow subsidiaries 26(b)(i) Due from the ultimate holding company 26(b)(i) Cash and cash equivalents 17 Restricted cash 17 Total current assets CURRENT LIABILITIES Deposits received, other payables and accruals 18 Due to the immediate holding company 26(b)(i) Due to fellow subsidiaries 26(b)(ii) Due to the ultimate holding company 26(b)(iii) Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITY Due to the ultimate holding company 26(b)(iii) Total non-current liability Net assets EQUITY Share capital 20 Reserves 21 Total equity	As at 31 December 2011 2012 HK$’000 HK$’000 2,761 5,167 1,944,307 2,702,641 – 338,842 99,513 121,297 2,046,581 3,167,947 2,657,852 3,837,300 4,273 2,344 8,637 1,585 1,665,765 1,679,265 186,910 38,094 28,077 26,774 4,551,514 5,585,362 32,721 43,632 79 15,590 101,160 264,193 2,116,768 2,253,059 2,250,728 2,576,474 2,300,786 3,008,888 4,347,367 6,176,835 1,854,058 3,728,232 1,854,058 3,728,232 2,493,309 2,448,603 – – 2,493,309 2,448,603 2,493,309 2,448,603	As at 31 December 2011 2012 HK$’000 HK$’000 2,761 5,167 1,944,307 2,702,641 – 338,842 99,513 121,297 2,046,581 3,167,947 2,657,852 3,837,300 4,273 2,344 8,637 1,585 1,665,765 1,679,265 186,910 38,094 28,077 26,774 4,551,514 5,585,362 32,721 43,632 79 15,590 101,160 264,193 2,116,768 2,253,059 2,250,728 2,576,474 2,300,786 3,008,888 4,347,367 6,176,835 1,854,058 3,728,232 1,854,058 3,728,232 2,493,309 2,448,603 – – 2,493,309 2,448,603 2,493,309 2,448,603
		3,167,947
		3,837,300 2,344 1,585 1,679,265 38,094 26,774
		5,585,362
		43,632 15,590 264,193 2,253,059
		2,576,474
		3,008,888
		6,176,835
		3,728,232
		3,728,232
		2,448,603

		– 2,448,603
		2,448,603

IIA – 5

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

At 20 April 2011 (date of incorporation) Loss for the period Other comprehensive income for the period Exchange differences on translation Total comprehensive income the period Acquisition of subsidiaries under common control (note 22) At 31 December 2011 and 1 January 2012 Loss for the year Other comprehensive income for the year Exchange differences on translation Total comprehensive loss for the year At 31 December 2012	Attributable to ow	Attributable to ow	ners of the parent Exchange fluctuation reserve Accumulated losses HK$’000 HK$’000 – – – (20,044) 61,270 – 61,270 (20,044) – – 61,270 (20,044) – (64,426) 19,720 – 19,720 (64,426) 80,990 (84,470)	Total HK$’000 – (20,044) 61,270 41,226 2,452,083 2,493,309 (64,426) 19,720 (44,706) 2,448,603
	Share capital HK$’000 (note 20) – – – – – – – – – –	Capital reserve HK$’000 (note 21) – – – – 2,452,083 2,452,083 – – – 2,452,083	Exchange fluctuation reserve HK$’000 – – 61,270 61,270 – 61,270 – 19,720 19,720 80,990

These reserve accounts comprise the consolidated reserves of HK$2,493,309,000 and HK$2,448,603,000 in the consolidated statements of financial position as at 31 December 2011 and 2012, respectively.

IIA – 6

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

CONSOLIDATED STATEMENTS OF CASH FLOWS

Notes CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax: Adjustments for: Finance costs 7 Finance income 6 Depreciation 6 Decrease/(increase) in deposits and other receivables Increase in properties under development Increase/(decrease) in other payables and accruals Decrease/(increase) in amounts due from fellow subsidiaries Increase in an amount due to the immediate holding company Decrease in amounts due to fellow subsidiaries Increase in an amount due from the ultimate holding company Decrease/(increase) in restricted cash Cash used in operations Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Purchases of items of property, plant and equipment Prepayments for items of property, plant and equipment Additions to investment properties Acquisition of subsidiaries 22 Net cash flows used in investing activities	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 (26,031) 32,084 (109) 150 6,094 (3,476) (24,933) (877) (8,637) 79 (9,539) (1,625,805) (390) (1,667,484) (1,667,484) 109 (2,396) – (16,853) 9,890 (9,250)	Year ended 31 December 2012 HK$’000 (85,159) 66,678 (643) 264 (18,860) 1,589 (993,819) 11,250 7,052 15,656 (16,691) – 1,303 (992,520) (992,520) 643 (3,005) (338,842) (622,282) – (963,486)

IIA – 7

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

CASH FLOWS FROM FINANCING ACTIVITIES Increase in amounts due to fellow subsidiaries Increase in an amount due to the ultimate holding company Net cash flows from financing activities NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the date of incorporation/beginning of the year Effect of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF PERIOD/YEAR ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances 17 Cash and cash equivalents as stated in the statements of cash flows 17 Note	71,080 1,792,208 1,863,288 186,554 – 356 186,910 186,910 186,910 For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000	179,724 1,625,951 1,805,675 (150,331) 186,910 1,515 38,094 38,094 38,094 Year ended 31 December 2012 HK$’000

IIA – 8

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

STATEMENTS OF FINANCIAL POSITION

Notes NON-CURRENT ASSET Investment in a subsidiary 15 Total non-current asset CURRENT ASSET Cash and cash equivalents 17 Total current asset CURRENT LIABILITIES Due to a subsidiary 15 Due to the immediate holding company 26(b)(i) Total current liabilities NET CURRENT LIABILITIES TOTAL ASSETS LESS CURRENT LIABILITIES Net assets EQUITY Share capital Reserve 21 Total equity	As at 31 December 2011 2012 HK$’000 HK$’000 15,586 15,586 15,586 15,586 55 50 55 50 15,546 – 79 15,590 15,625 15,590 15,570 15,540 16 46 16 46 – – 16 46 16 46	As at 31 December 2011 2012 HK$’000 HK$’000 15,586 15,586 15,586 15,586 55 50 55 50 15,546 – 79 15,590 15,625 15,590 15,570 15,540 16 46 16 46 – – 16 46 16 46
		15,586
		50
		50
		– 15,590
		15,590
		15,540
		46
		46

		– 46
		46

IIA – 9

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

II. FINANCIAL INFORMATION

1. Corporate information

The Target Company is a limited company and was incorporated in the BVI on 20 April 2011. The Target Company’s registered office is located at Morgan & Morgan Building, P.O. Box 958, Pasea Estate, Road Town, Tortola, the BVI.

The principal activity of the Target Company is investment holding. During the Relevant Periods, the subsidiaries of the Target Company were principally engaged in property development and property investment.

In the opinion of the Directors, the immediate holding company and ultimate holding company of the Target Company is Shum Yip Holdings Limited (“Shum Yip Holdings”)（深業（集團）有限公司）and 深業集團有限公司 (“Shum Yip Group”), respectively.

As at the end of the Relevant Periods, the Target Company had direct and indirect interests in its subsidiaries, all of which have substantially similar characteristics to a private company incorporated in Hong Kong, the particulars of which are set out below:

	Place and date of	Nominal value of
	incorporation/	issued ordinary/	Percentage of
	registration and	registered	equity attributable to		Principal
Company Name	operations	share capital	the Target	Company	activities
			Direct	Indirect
Shenzhen Shum Yip Technology	People’s Republic of	US$2,000,000	100%	–	Investment holding
Development Limited	China (the “PRC”)/
(“Shum Yip Technology	Mainland China
Development”) (ii)	1 July 2011
（深圳市深業科技開發有限公司）
Shenzhen Jizhaoxin Investment	PRC/Mainland China	RMB300,000,000	–	100%	Investment holding
Limited (“ PRC Co 1”) (iii)	23 January 1989
（深圳市吉兆鑫投資有限公司）
Shenzhen Kezhigu Investment	PRC/Mainland China	RMB784,528,950	–	100%	Property development
Limited (“ PRC Co 2”) (iii)	20 May 1989				and property
（深圳市科之谷投資有限公司）					investment

IIA – 10

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

(i) No audited financial statements have been issued for the Target Company since its date of incorporation as this entity has not carried on any business, and the Target Company was incorporated in the BVI where there is no statutory audit requirement.
(ii) Shum Yip Technology Development was registered as a wholly-foreignowned enterprise under the PRC Law. No audited financial statements have been prepared for the period from 1 July 2011 (date of incorporation) to 31 December 2011.
(iii) The statutory audited financial statements of PRC Co 1 and PRC Co 2 for the year ended 31 December 2011 were prepared in accordance with PRC generally accepted accounting principles and were audited by 大華會計師事務所 (Da Hua Certified Public Accountants), certified public accountants registered in the PRC.

The English names of certain of the subsidiaries registered in the PRC represent the best effort made by management of the Target Company to translate their Chinese names as those subsidiaries do not have official English names.

2.1 Basis of preparation

The Financial Information has been prepared in accordance with HKFRSs (which include all Hong Kong Financial Reporting Standards, HKASs and Interpretations) issued by the HKICPA, accounting principles generally accepted in Hong Kong. All HKFRSs effective for the accounting periods commencing from 1 January 2012, together with the relevant transitional provisions, have been early adopted by the Target Group in the preparation of the Financial Information throughout the Relevant Periods.

The Financial Information has been prepared under the historical cost convention. The Financial Information is presented in Hong Kong dollars (“HK$”) and all values are rounded to the nearest thousand except when otherwise indicated.

IIA – 11

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

During the Relevant Periods, the Target Group finances its operations primarily through proceeds from the ultimate holding company. The Directors of the Target Group are of the opinion that the Target Group will have sufficient working capital to finance its operations and to maintain its operating existence in the foreseeable future and accordingly have prepared the Financial Information on a going concern basis.

Basis of consolidation

The consolidated financial statements include the financial statements of the Target Group for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012. The financial statements of the subsidiaries are prepared for the same reporting period as the Target Company, using consistent accounting policies. All intra-group balances, transactions, and unrealised gains and losses resulting from intra-group transactions and dividends are eliminated on consolidation in full.

Total comprehensive income within a subsidiary is attributed to the noncontrolling interest even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Target Company loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The Target Group’s share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate.

IIA – 12

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

2.2 Issued but not yet effective Hong Kong Financial Reporting Standards

The Target Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these Financial Information.

HKFRS 1 Amendments	Amendments to HKFRS 1 First-time Adoption of
	Hong Kong Financial Reporting Standards –
	Government Loans2
HKFRS 7 Amendments	Amendments to HKFRS 7 Financial Instruments:
	Disclosures – Offsetting Financial Assets and
	Financial Liabilities2
HKFRS 9	Financial Instruments4
HKFRS 10	Consolidated Financial Statements2
HKFRS 11	Joint Arrangements2
HKFRS 12	Disclosure of Interests in Other Entities2
HKFRS 10, HKFRS 11 and	Amendments to HKFRS 10, HKFRS 11 and HKFRS
HKFRS 12 Amendments	12 – Transition Guidance2
HKFRS 10, HKFRS 12 and	Amendments to HKFRS 10, HKFRS 12 and HKAS
HKAS 27 (2011)	27 (2011) – Investment Entities3
Amendments
HKFRS 13	Fair Value Measurement2
HKAS 1 Amendments	Amendments to HKAS 1 Presentation of Financial
	Statements – Presentation of Items of Other
	Comprehensive Income1
HKAS 19 (2011)	Employee Benefits2
HKAS 27 (2011)	Separate Financial Statements2
HKAS 28 (2011)	Investments in Associates and Joint Ventures2
HKAS 32 Amendments	Amendments to HKAS 32 Financial Instruments:
	Presentation – Offsetting Financial Assets and
	Financial Liabilities3
HK(IFRIC)-Int 20	Stripping Costs in the Production Phase of a Surface
	Mine2
Annual Improvements	Amendments to a number of HKFRSs issued in June
2009-2011 Cycle	20122

1 Effective for annual periods beginning on or after 1 July 2012

2 Effective for annual periods beginning on or after 1 January 2013

3 Effective for annual periods beginning on or after 1 January 2014

4 Effective for annual periods beginning on or after 1 January 2015

IIA – 13

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The Target Group is in the process of making an assessment of the impact of these new and revised HKFRSs upon initial application. So far, the Target Group considers that these new and revised HKFRSs are unlikely to have a significant impact on its results of operations and financial position.

2.3 Summary of significant accounting policies

Subsidiaries

A subsidiary is an entity whose financial and operating policies the Target Company controls, directly or indirectly, so as to obtain benefits from its activities. The results of subsidiaries are consolidated from the date of acquisition, being the date on which the Target Group obtains control, and continue to be consolidated until the date that such control ceases.

The results of subsidiaries are included in the Target Company’s income statement to the extent of dividends received and receivable. the Target Company’s investments in subsidiaries are stated at cost less any impairment loss.

Business combinations

Business combinations under common control with no substance are accounted for using the pooling of interest method. The net assets of the Target Group and the acquiree are consolidated using the existing book values from the controlling party’s perspective. No amount is recognised in respect of goodwill or excess of the Target Group’s interest in the carrying amounts of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost of acquisition at the time of the business combinations under common control. Acquisition costs incurred in relation to business combination under common control with no substance are expensed as incurred.

Other than business combination under common control with no substance, business combinations are accounted for using the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Target Group, liabilities assumed by the Target Group to the former owners of the acquiree and the equity interests issued by the Target Group in exchange for control of the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred in relation to these business combinations are expensed as incurred.

IIA – 14

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

When the Target Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any fair value of the Target Group’s previously held equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as a gain on bargain purchase.

Impairment of non-financial assets

IIA – 15

APPENDIX II A

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

An assessment is made at the end of the Relevant Periods as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill and certain financial assets is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/ amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to the income statement in the period in which it arises, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

Related parties

A party is considered to be related to the Target Group if:

(a) the party is a person or a close member of that person’s family and that person,
(i) has control or joint control over the Target Group;
(ii) has significant influence over the Target Group; or
(iii) is a member of the key management personnel of the Target Group or of a parent of the Target Group; or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Target Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);

IIA – 16

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

(iii) the entity and the Target Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Target Group or an entity related to the Target Group;
(vi) the entity is controlled or jointly-controlled by a person identified in (a); and
(vii) person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and any impairment losses. When an item of property, plant and equipment is classified as held for sale or when it is part of a disposal group classified as held for sale, it is not depreciated and is accounted for in accordance with HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the income statement in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Target Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly.

IIA – 17

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Buildings	Over the lease terms
Leasehold improvements	19%
Furniture, fixtures and equipment	19%
Motor vehicles	19%
Plant and machinery	10% to 25%

Investment properties

Investment properties are interests in land and buildings held to earn rental income and/or for capital appreciation, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the end of the Relevant Periods.

Properties under construction or development for future use as investment properties are classified as investment properties under construction. If the fair value cannot be reliably determined, the investment properties under construction will be measured at cost until such time as fair value can be determined or construction is completed. The Target Group has concluded that the fair value of its investment properties under construction cannot be measured reliably as the properties are in the early stage of development at the end of the Relevant Periods, therefore, the Target Group’s investment properties under construction continue to be measured at cost.

IIA – 18

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the year in which they arise.

Any gains or losses on the retirement or disposal of an investment property are recognised in the income statement in the year of the retirement or disposal.

For a transfer from investment properties to owner-occupied properties or inventories, the deemed cost of a property for subsequent accounting is its fair value at the date of change in use. If a property occupied by the Target Group as an owneroccupied property becomes an investment property, the Target Group accounts for such property in accordance with the policy stated under “Property, plant and equipment and depreciation” up to the date of change in use, and any difference at that date between the carrying amount and the fair value of the property is accounted for as a revaluation in accordance with the policy stated under “Property, plant and equipment and depreciation” above. For a transfer from inventories to investment properties, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement.

Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the Target Group is the lessor, assets leased by the Target Group under operating leases are included in non-current assets, and rentals receivable under the operating leases are credited to the income statement on the straight-line basis over the lease terms. Where the Target Group is the lessee, rentals payable under the operating leases are charged to the income statement on the straight-line basis over the lease terms.

IIA – 19

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Investments and other financial assets

Initial recognition and measurement

Financial assets within the scope of HKAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables and available-forsale financial investments, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. the Target Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Target Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

The Target Group’s financial assets include cash and bank balances, deposits and other receivables, amounts due from fellow subsidiaries and an amount due from the ultimate holding company.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Loans and receivables

IIA – 20

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired; or
the Target Group has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Target Group has transferred substantially all the risks and rewards of the asset, or (b) the Target Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Target Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Target Group’s continuing involvement in the asset. In that case, the Target Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Target Group has retained.

IIA – 21

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Impairment of financial assets

The Target Group assesses at the end of the Relevant Periods whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the Target Group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Target Group first assesses individually whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Target Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

IIA – 22

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of HKAS 39 are classified as financial liabilities at fair value through profit or loss, or loans and borrowings, as appropriate. The Target Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus, in the case of loans and borrowings, directly attributable transaction costs.

The Target Group’s financial liabilities include other payables, an amount due to the immediate holding company, an amount due to the ultimate holding company and amounts due to fellow subsidiaries.

IIA – 23

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Loans and borrowings

Financial guarantee contracts

Financial guarantee contracts issued by the Target Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. A financial guarantee contract is recognised initially as a liability at its fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the Target Group measures the financial guarantee contract at the higher of: (i) the amount of the best estimate of the expenditure required to settle the present obligation at the end of the Relevant Periods; and (ii) the amount initially recognised less, when appropriate, cumulative amortisation.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

IIA – 24

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Properties under development

Properties under development are intended to be held for sale after completion.

Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Target Group’s cash management.

For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, which are not restricted as to use.

IIA – 25

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the Relevant Periods, taking into consideration interpretations and practices prevailing in the countries in which the Target Group operates.

Deferred tax is provided, using the liability method, on all temporary differences at the end of the Relevant Periods between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and a joint venture when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

IIA – 26

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

in respect of deductible temporary differences associated with investments in subsidiaries, associates and a joint venture, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of the Relevant Periods 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 deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of the Relevant Periods and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Target Group and when the revenue can be measured reliably, on the following bases:

(a) income from the sale of properties, when the significant risks and rewards of ownership have been transferred to the buyer, provided that the Target Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the properties sold;
(b) rental income, on a time proportion basis over the lease terms;

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

(c) services income, when the relevant services have been rendered; and
(d) interest income, on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

Borrowing costs

Other employee benefits

Pension schemes

The Target Group’s subsidiaries which operate in Mainland China participate in the central pension scheme (the “CPS”) operated by the local municipal government for all of its staff. These subsidiaries are required to contribute 8% to 20% of its payroll costs to the CPS. The contributions are charged to the income statement as they become payable in accordance with the rules of the CPS.

Foreign currencies

These financial statements are presented in Hong Kong dollars, which is the the Target Company’s presentation currency. Each entity in the Target Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the Target Group are initially recorded using their respective functional currency rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange ruling at the end of the Relevant Periods. All differences arising on the settlement or transaction of monetary items are taken to the income statement.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The functional currencies of overseas subsidiaries of the Target Company are currencies other than Hong Kong dollars. As at the end of the Relevant Periods, the assets and liabilities of these subsidiaries are translated into Hong Kong dollars at the exchange rates ruling at the end of the Relevant Periods and their income statements are translated into Hong Kong dollars at the weighted average exchange rates for the year. The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve.

3. Significant accounting judgements and estimates

The preparation of the Target Group’s Financial Information requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the Relevant Periods. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Judgements

In the process of applying the Target Group’s accounting policies, management has made the following judgement, apart from those involving estimations, which have the most significant effect on the amounts recognised in the Financial Information:

Impairment of assets

In determining whether an asset is impaired or the event previously causing the impairment no longer exists, the Target Group has to exercise judgement in the area of asset impairment, particularly in assessing: (1) whether an event has occurred that may affect the asset value or such event affecting the asset value has not been in existence; (2) whether the carrying value of an asset can be supported by the net present value of future cash flows which are estimated based upon the continued use of the asset or derecognition; and (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to determine the level of impairment, including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the net present value used in the impairment test.

Classification between investment properties and owner-occupied properties

The Target Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Target Group considers whether a property generates cash flows largely independently of the other assets held by the Target Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately or leased out separately under finance leases, the Target Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Classification between investment properties and properties under development

The Target Group develops properties held for sale and properties held to earn rentals and/or for capital appreciation. Judgement is made by management on determining whether a property is designated as an investment property or properties under development. In general, the Target Group considers its intention for holding the properties at the early development stage of the related properties. However, in response to the market demand to investment properties, the Target Group would from time to time amend the corporate strategies on the Target Group’s properties portfolio. During the course of construction, the related properties under construction are accounted for as properties under development included in current assets if the properties are intended for sale after their completion, whereas, the properties accounted for as investment properties under construction included in non-current assets if the properties are intended to be held to earn rentals and/or for capital appreciation. Upon completion of the properties, the properties held for sale are transferred to completed properties held for sale while the properties held to earn rentals and/or for capital appreciation are transferred to completed investment properties.

Estimation uncertainty

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

Deferred tax asset

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. At 31 December 2011 and 2012, the carrying value of deferred tax asset relating to recognised tax losses was HK$99,513,000 and HK$121,297,000, respectively.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

4. Operating segment information

The principal activity of the Target Group is property development and property investment. The Directors are of the view that the Target Group operates in one segment as defined in HKFRS 8: Operating Segments. The chief operating decision maker reviews the profitability and operations of the Target Group as one business. Accordingly, no segment information has been disclosed.

5. Revenue, other income and gains

An analysis of revenue, other income and gains is as follows:

Revenue Rental income Other income and gains Bank interest income Others	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 – 109 10,947 11,056	Year ended 31 December 2012 HK$’000 –
		643 443
		1,086

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APPENDIX II A

6. Loss before tax

The Target Group’s loss before tax is arrived at after charging/(crediting):

Cost of services provided Depreciation Minimum lease payments under operating leases in respect of land and buildings Auditors’ remuneration Employee benefit expense: Wages and salaries Pension scheme contributions Bank interest income	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 – 150 289 207 464 243 707 (109)	Year ended 31 December 2012 HK$’000 – 264 1,033 394 8,088 917 9,005 (643)

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

7. Finance costs

An analysis of finance costs is as follows:

Interest on an amount due to the ultimate holding company and amounts due to fellow subsidiaries Less: Interest capitalised	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 78,698 (46,614) 32,084	Year ended 31 December 2012 HK$’000 351,060 (284,382) 66,678

The average capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation was 8.0% and 9.4% for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012, respectively.

8. Directors’ remuneration

No director received any fees or emoluments in respect of their services rendered to the Target Group during the Relevant Periods.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

9. Five highest paid employees

None of the five highest paid employees of the Target Group during the Relevant Periods were directors. Details of the remuneration of the five highest paid employees for the Relevant Periods are as follows:

Salaries, allowances and benefits in kind Pension scheme contributions	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 1,642 78 1,720	Year ended 31 December 2012 HK$’000 8,175 150
		8,325

The number of non-director, highest paid employees whose remuneration fell within the following bands is as follows:

Nil to HK$1,000,000 HK$1,000,001 to HK$2,000,000 HK$2,000,001 to HK$4,000,000	Number of For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 5 – – 5	employees Year ended 31 December 2012 HK$’000 1 3 1
		5

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

10. Income tax

The Target Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions in which members of the Target Group are domiciled and operate.

Pursuant to the International Business Companies Act, 1984 (the “IBC Act”) of the BVI, international business companies incorporated pursuant to the IBC Act enjoy a complete exemption from income tax. This includes an exemption from capital gains tax and all forms of withholding tax. Accordingly, the Target Company is not subject to tax.

Pursuant to the PRC Corporate Income Tax Law effective from 1 January 2008, the corporate income tax (“CIT”) rate was unified as 25% for enterprises in the PRC. Accordingly, the applicable tax rate for Shum Yip Technology Development was 25% for the Relevant Periods. PRC Co 1 and PRC Co 2, enterprises located in the Shenzhen Special Economic Zone and incorporated before the approval of the PRC Corporate Income Tax Law effective from 1 January 2008, were entitled to adopt the new CIT rate as follows: 2008, 18%; 2009, 20%; 2010, 22%; 2011, 24%; 2012, 25%.

Current Charge for the period/year Deferred (note 19) Total tax credit for the period/year	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 – (5,987) (5,987)	Year ended 31 December 2012 HK$’000 – (20,733) (20,733)

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

A reconciliation of the tax expense applicable to loss before tax at the statutory income tax rate to the tax credit at the Target Group’s effective income tax rate for the period/year, and a reconciliation of the applicable rate (i.e., the statutory tax rate) to the effective tax rate, are as follows:

Loss before tax Tax at the statutory tax rates Expenses not deductible for tax Effect on opening deferred tax of increase in rates Tax credit at the Target Group’s effective rate	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 (26,031) (6,247) 490 (230) (5,987)	% 24 (1) 1 24	Year ended 31 December 2012 HK$’000 (85,159) (21,290) 557 – (20,733)	% 25 (1) – 24

11. Profit attributable to owners of the parent

The consolidated loss attributable to owners of the parent for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012 includes a profit of HK$16,000 and HK$30,000, respectively, which has been dealt with in the financial statements of the Target Company (note 21).

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

12. Property, plant and equipment

Target Group

At 20 April 2011 (date of incorporation): Cost Accumulated depreciation and impairment Net carrying amount At 20 April 2011, net of accumulated depreciation and impairment Acquisition of subsidiaries (note 22) Additions Depreciation provided during the period Exchange realignment At 31 December 2011, net of accumulated depreciation and impairment At 31 December 2011 and 1 January 2012: Cost Accumulated depreciation and impairment Net carrying amount At 1 January 2012, net of accumulated depreciation and impairment Additions Depreciation provided during the year Exchange realignment At 31 December 2012, net of accumulated depreciation and impairment At 31 December 2012: Cost Accumulated depreciation and impairment Net carrying amount	Buildings HK$’000 – – – – – – – – – 498,097 (498,097) – – – – – – – – –	Leasehold improvements HK$’000 – – – – – 1,896 (166) (4) 1,726 1,896 (170) 1,726 1,726 1,574 – 14 3,314 3,485 (171) 3,314	Furniture, fixtures and equipment HK$’000 – – – – 306 468 (132) 13 655 1,201 (546) 655 655 1,263 (408) (10) 1,500 2,546 (1,046) 1,500	Motor vehicles HK$’000 – – – – 411 32 (62) (1) 380 443 (63) 380 380 168 (196) 1 353 614 (261) 353	Plant and machinery HK$’000 – – – – – – – – – 2,886 (2,886) – – – – – – – – –	Total HK$’000 – – – – 717 2,396 (360) 8 2,761 504,523 (501,762) 2,761 2,761 3,005 (604) 5 5,167 6,645 (1,478) 5,167

The cost of buildings of HK$498,097,000 and the related accumulated depreciation and impairment provision of HK$498,097,000 were written off in the year ended 31 December 2012.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

13. Investment properties under construction

At the date of incorporation/beginning of the year Acquisition of subsidiaries (note 22) Additions Exchange realignment At 31 December	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 1,944,307 1,859,961 – 36,571 742,576 47,775 15,758 1,944,307 2,702,641	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 1,944,307 1,859,961 – 36,571 742,576 47,775 15,758 1,944,307 2,702,641
		2,702,641

The Target Group’s investment properties under construction are held under a medium term lease and are situated in Mainland China.

Investment properties under construction included interest expense of HK$19,718,000 and HK$120,294,000 for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012, respectively, that was incurred and capitalised.

As at the end of the Relevant Periods, the Target Group’s investment properties are under construction and measured at cost until such time as fair value can be determined reliably or construction is completed. The Target Group has concluded that the fair value of its investment properties under construction cannot be measured reliably as the properties are in the early stage of development at the end of the Relevant Periods and are therefore measured at cost in the statements of financial position.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

14. Properties under development

Land in Mainland China held under medium term leases, at cost: At the date of incorporation/beginning of the year Acquisition of subsidiaries (note 22) Additions Exchange realignment At 31 December Development expenditure, at cost: At the date of incorporation/beginning of the year Acquisition of subsidiaries (note 22) Additions Exchange realignment At 31 December	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 2,554,334 2,490,367 – – 721,746 63,967 20,701 2,554,334 3,296,781 – 103,518 50,396 – 51,829 436,161 1,293 840 103,518 540,519 2,657,852 3,837,300	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 2,554,334 2,490,367 – – 721,746 63,967 20,701 2,554,334 3,296,781 – 103,518 50,396 – 51,829 436,161 1,293 840 103,518 540,519 2,657,852 3,837,300
		3,296,781
		103,518 – 436,161 840
		540,519
		3,837,300

The Target Group’s properties under development are held under a medium term lease and are situated in Mainland China.

Properties under development included interest expense of HK$26,896,000 and HK$164,088,000 for the period from 20 April 2011 (date of incorporation) to 31 December 2011 and the year ended 31 December 2012, respectively, that was incurred and capitalised.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The Target Group had apartments, hotels and commercial service facilities under development as at 31 December 2012. Pursuant to an agreement entered into between the Target Group and 深圳市規劃和國土資源委員會第一直屬管理局 (the First Administrative Bureau of the Urban Planning and Land Resources Commission of Shenzhen) (the “Land Bureau”) and a notice issued by the Land Bureau on 19 September 2012, the Target Group is required to pay additional land premium to the Land Bureau in respect of the sale of apartments, hotels and commercial service facilities. The additional land premium will be determined based on the market value of the properties at the time of sale (note 25(ii)).

15. Investment in a subsidiary

	Target Group
Investment in a subsidiary	2011	2012
	HK$’000	HK$’000
Unlisted shares, at cost	15,586	15,586

The amount due to a subsidiary included in the Target Company’s current liabilities of HK$15,546,000 is unsecured, interest-free and has no fixed terms of repayment.

16. Prepayment, deposits and other receivables

Non-current assets Prepayment Current assets Deposits and other receivables	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 338,842 4,273 2,344	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 338,842 4,273 2,344

		2,344

The prepayments as at 31 December 2012 included an amount of HK$338,842,000 which was paid to 深業泰然（集團）股份有限公司 (“Shum Yip Terra”), a fellow subsidiary of the Target Group, for the purchase of certain land and buildings (note 30( iii)).

None of the above assets is either past due or impaired. The financial assets included in the above balances relate to receivables for which there was no recent history of default.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

17. Cash and cash equivalents and restricted cash

Cash and bank balances Less: Restricted cash Cash and cash equivalents	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 214,987 64,868 28,077 26,774 186,910 38,094	Target Company As at 31 December 2011 2012 HK$’000 HK$’000 55 50 – – 55 50	Target Company As at 31 December 2011 2012 HK$’000 HK$’000 55 50 – – 55 50
			50

The amount of HK$28,077,000 and HK$26,774,000 as at 31 December 2011 and 2012, respectively, was deposited in an escrow account jointly operated by the Target Group and Shenzhen Electronics Group Co., Ltd. (“Shenzhen Electronics”) （深圳賽格集團有限公司）.

At 31 December 2011 and 2012, the cash and cash equivalents of the Target Group were all denominated in RMB which is not freely convertible into other currencies. However, under Mainland China’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Target Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Target Group, and earn interest at the respective short term time deposit rates. The bank balances are deposited with creditworthy banks with no recent history of default.

18. Deposits received, other payables and accruals

Deposits received Other payables Accruals	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 5,028 32,317 37,498 404 1,106 32,721 43,632	Target Group As at 31 December 2011 2012 HK$’000 HK$’000 – 5,028 32,317 37,498 404 1,106 32,721 43,632
		43,632

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

19. Deferred tax asset

The movements in deferred tax asset of the Target Group during the Relevant Periods are as follows:

At 20 April 2011 (date of incorporation) Acquisition of subsidiaries (note 22) Deferred tax credited to the income statement during the period (note 10) Exchange realignment Gross deferred tax asset recognised in the statement of financial position at 31 December 2011 and 1 January 2012 Deferred tax credited to the income statement during the year (note 10) Exchange realignment Gross deferred tax asset recognised in the statement of financial position at 31 December 2012	Losses available for offsetting against future taxable profits HK$’000 – 91,048 5,987 2,478
	99,513
	20,733 1,051
	121,297

The Target Group has tax losses of approximately HK$1,354,972,000 and HK$1,044,176,000 as at 31 December 2011 and 2012, respectively, that can be carried forward for five years from the year in which the losses arose for offsetting against future taxable profits. Deferred tax assets have not been recognised in respect of these losses as there is insufficient convincing evidence that sufficient taxable profits will be available to allow the utilisation of the carryforward of tax losses before they expire in five years.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

20. Share capital

The Target Company was incorporated in the BVI on 20 April 2011 with an authorised share capital of 50,000 shares with no par value. One share of the Target Company was allotted and issued at US$1 on the same date.

21. Reserves

Target Group

The capital reserve represented the carrying amounts of the net identifiable assets and liabilities of the equity interest in PRC Co 1 and PRC Co 2 transferred to Shum Yip Technology Development from Shum Yip Group at zero consideration (note 22).

Target Company

At 20 April 2011 (date of incorporation) Profit for the period At 31 December 2011 and 1 January 2012 Profit for the year At 31 December 2012	Total reserve HK$’000 – 16
	16

	30
	46

22. Business combination under common control

On 12 July 2011, Shum Yip Technology Development, a subsidiary of the Target Group, acquired the 100% equity interests in PRC Co 1 and PRC Co 2 from Shum Yip Group at zero consideration. Because Shum Yip Technology Development, PRC Co 1 and PRC Co 2 were under common control by Shum Yip Group before and after the acquisition and the Target Group has concluded that there was no substance to this acquisition, this acquisition was accounted for by using the pooling of interest method.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The carrying amounts of the identifiable assets and liabilities of PRC Co 1 and PRC Co 2 were as follows:

Notes Property, plant and equipment 12 Investment properties under construction 13 Deferred tax asset 19 Properties under development 14 Deposits and other receivables Cash and cash equivalents Restricted cash Deposits received, other payables and accruals Due to fellow subsidiaries Due to the ultimate holding company Capital reserve Consideration	At 20 April 2011 HK$’000 717 1,859,961 91,048 2,540,763 457 9,890 27,687 (33,259) (38,553) (2,006,628) 2,452,083 (2,452,083) –

An analysis of the cash flows in respect of the acquisition of subsidiaries is as follows:

Cash paid Cash and cash equivalents acquired Net inflow of cash and cash equivalents included in cash flows from investing activities	HK$’000 – 9,890
	9,890

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

23. Operating lease arrangements

The Target Group leases certain of its properties under operating lease arrangements. Leases for the properties are negotiated for terms ranging from one to two years.

As at the end of the Relevant Periods, the Target Group had total future minimum lease payments under non-cancellable operating leases falling due as follows:

Within one year In the second to fifth years, inclusive	As at 31 December 2011 2012 HK$’000 HK$’000 296 4,007 – 3,633 296 7,640	As at 31 December 2011 2012 HK$’000 HK$’000 296 4,007 – 3,633 296 7,640
		7,640

24. Capital commitments

In addition to the operating lease commitments detailed in note 23 above, the Target Group had the following commitments at the end of the Relevant Periods:

	As at 31	December
	2011	2012
	HK$’000	HK$’000
Contracted, but not provided for:
Investment properties under construction and
properties under development	33,282	2,300,945

In addition, the Target Group is required to pay additional land premium in respect of the sale of apartments, hotels and commercial service facilities. The additional land premium will be determined based on the market value of the properties at the time of sale (notes 14 and 25(ii)).

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

25. Contingent liabilities

(i) Pursuant to an agreement entered into by PRC Co 2, Shenzhen Yuanzhi Investment Co., Ltd. (“Yuanzhi Investment”)（深圳市遠致投資有限公司）and Shenzhen Electronics on 30 March 2009, PRC Co 2 has transferred its assets of RMB189,240,000 and liabilities of RMB113,800,000 as at 31 December 2008 to Shenzhen Electronics at zero consideration. In addition, on 15 November 2010, Shenzhen Electronics has agreed to indemnify PRC Co 2 for the liabilities of RMB113,800,000 and any contingent liability of PRC Co 2 as at 31 December 2008.

Pursuant to an agreement entered into by PRC Co 2, Yuanzhi Investment, Shenzhen Electronics and Shum Yip Group on 6 September 2010, Shenzhen Electronics has agreed to indemnify PRC Co 2 for all the liabilities and any contingent liability which existed prior to the transfer of PRC Co 2’s equity interests from Shenzhen Electronics to Yuanzhi Investment. PRC Co 2 became a wholly-owned subsidiary of Shum Yip Group as a result of the transfer of the equity interests of PRC Co 1, the immediate holding company of PRC Co 2, from Yuanzhi Investment to Shum Yip Group on 6 September 2010.

(ii) As detailed in note 14, the Target Group is required to pay additional land premium to the Land Bureau in respect of the sale of apartments, hotels and commercial service facilities currently under construction on a parcel of land. The additional land premium will be determined based on the market value of the properties at the time of sale.

PRC Co 2 entered into a guarantee on 28 June 2012 in respect of a bank borrowing of a fellow subsidiary in the amount of approximately RMB475,000,000 (equivalent to HK$583,216,000) (the “Guarantee”). On 31 December 2012, Shum Yip Group has agreed to indemnify PRC Co 2 for any liabilities incurred or to be incurred by PRC Co 2 and losses directly or indirectly incurred by PRC Co 2 in relation to the Guarantee.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Pursuant to an acquisition agreement entered into between Shenzhen Investment Limited (“Shenzhen Investment”) and Shum Yip Holdings on 17 January 2013 (the “Acquisition Agreement”), Shenzhen Investment has conditionally agreed to acquire the entire issued share capital of the Target Company from Shum Yip Holdings (the “Acquisition”).

Pursuant to the Acquisition Agreement, Shenzhen Investment has agreed to pay Shum Yip Holdings an amount by which the actual additional land premium payable to the Land Bureau by PRC Co 2 in respect of the sale of apartments is less than RMB2,000,000,000, and Shum Yip Holdings has agreed to indemnify and pay Shenzhen Investment for an amount by which the actual additional land premium payable to the Land Bureau by PRC Co 2 in respect of the sale of apartments is higher than RMB2,000,000,000. Shum Yip Holdings has also agreed to indemnify Shenzhen Investment for any amount of additional land premium payable to the Land Bureau by PRC Co 2 for its holding and operating (including leasing) of the commercial service facilities, underground supporting commercial services facilities and hotel portions of the parcel of land.

Pursuant to the Acquisition Agreement, Shum Yip Holdings has further agreed to indemnify Shenzhen Investment for any liabilities incurred or to be incurred by PRC Co 2 and losses directly or indirectly incurred by Shenzhen Investment or PRC Co 2 in relation to or as a result of the Guarantee. In addition, Shum Yip Holdings has undertaken to procure the full and valid release of the Guarantee before the completion of the Acquisition.

(iii) Pursuant to an agreement entered into between PRC Co 1 and Shum Yip Group on 31 December 2012, Shum Yip Group has undertaken to pay an amount of RMB110,345,000 (equivalent to HK$137,258,000) due by PRC Co 1 to an independent third party on behalf of PRC Co 1. PRC Co 1 will pay the same amount to Shum Yip Group as consideration by 31 December 2013. Shum Yip Group has also agreed to indemnify PRC Co 1 for an amount by which the actual payment to the independent third party is higher than RMB110,345,000.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

26. Related party transactions

(a) In addition to the transactions disclosed elsewhere in the Financial Information, the Target Group had the following transactions with related parties during the Relevant Periods:

Notes Interest expenses to: The ultimate holding company (i) Fellow subsidiaries (i) Rental expenses to: The immediate holding company (ii)	For the period from 20 April 2011 (date of incorporation) to 31 December 2011 HK$’000 76,135 2,563 78,698 –	Year ended 31 December 2012 HK$’000 344,683 6,377
		351,060

		3,640

(i) Interest expenses were calculated for the amounts which the Target Group had borrowed from the ultimate holding company and fellow subsidiaries. The interest rates charged for the balances with fellow subsidiaries and the ultimate holding company were disclosed in notes 26(b)(ii) and 26(b)(iii).
(ii) The operating lease rental expenses charged by Shum Yip Holdings were mutually agreed between the Target Group and Shum Yip Holdings.

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ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

(b) Outstanding balances with related parties:
(i) The amounts due from/to the related parties are unsecured, interest-free and have no fixed terms of repayment.

Pursuant to an agreement entered into between the Target Group and Shum Yip Group on 1 January 2013, the Target Group is entitled to receive interest at 9.9% per annum on the amount of RMB1,350,000,000 (equivalent to HK$1,679,265,000) due from Shum Yip Group with effect from 1 January 2013.

(ii) Included in the amounts due to fellow subsidiaries were amounts of HK$82,652,000 and HK$262,376,000 as at 31 December 2011 and 2012, respectively, which are unsecured, bear interest at the one-year benchmark lending rate of the People’s Bank of China (the “PBOC”) and repayable on demand. The remaining amounts due to fellow subsidiaries are unsecured, interest-free and have no fixed terms of repayment.
(iii) Included in the aggregate amount due to the ultimate holding company under current liabilities was an amount of HK$1,980,611,000 and HK$2,115,773,000 as at 31 December 2011 and 2012, respectively, which is unsecured, bear interest at the one-year benchmark lending rate of the PBOC and repayable on demand. The remaining amount due to the ultimate holding company is unsecured, interest-free and has no fixed terms of repayment.

The aggregate amount due to the ultimate holding company under non-current liability of HK$1,854,058,000 and HK$3,728,232,000 as at 31 December 2011 and 2012, respectively, which bears interest at 9.9% per annum, is unsecured and repayable from 30 October 2014 to 9 September 2015.

IIA – 50

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

27. Financial instruments by category

The carrying amounts of each of the categories of financial instruments of the Target Group as at the end of the Relevant Periods are as follows:

Financial assets – loans and receivables Deposits and other receivables Due from fellow subsidiaries Due from the ultimate holding company Cash and cash equivalents Restricted cash Total Financial liabilities at amortised cost Deposits received and other payables Due to the immediate holding company Due to fellow subsidiaries Due to the ultimate holding company Total	As at 31 December 2011 2012 HK$’000 HK$’000 4,273 2,344 8,637 1,585 1,665,765 1,679,265 186,910 38,094 28,077 26,774 1,893,662 1,748,062 As at 31 December 2011 2012 HK$’000 HK$’000 32,317 42,526 79 15,590 101,160 264,193 3,970,826 5,981,291 4,104,382 6,303,600	As at 31 December 2011 2012 HK$’000 HK$’000 4,273 2,344 8,637 1,585 1,665,765 1,679,265 186,910 38,094 28,077 26,774 1,893,662 1,748,062 As at 31 December 2011 2012 HK$’000 HK$’000 32,317 42,526 79 15,590 101,160 264,193 3,970,826 5,981,291 4,104,382 6,303,600
		6,303,600

IIA – 51

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The carrying amounts of each of the categories of financial instruments of the Target Company as at the end of the Relevant Periods are as follows:

Financial assets – loans and receivables Cash and cash equivalents Financial liabilities at amortised cost Due to a subsidiary Due to the immediate holding company	As at 31 December 2011 2012 HK$’000 HK$’000 55 50 As at 31 December 2011 2012 HK$’000 HK$’000 15,546 – 79 15,590 15,625 15,590	As at 31 December 2011 2012 HK$’000 HK$’000 55 50 As at 31 December 2011 2012 HK$’000 HK$’000 15,546 – 79 15,590 15,625 15,590
		15,590

28. Fair value and fair value hierarchy

The carrying amounts and fair values of the Target Group’s financial instruments are as follows:

Financial assets Deposits and other receivables Due from fellow subsidiaries Due from the ultimate holding company Cash and cash equivalents Restricted cash	Carrying 2011 HK$’000 4,273 8,637 1,665,765 186,910 28,077 1,893,662	amounts 2012 HK$’000 2,344 1,585 1,679,265 38,094 26,774 1,748,062	Fair values 2011 2012 HK$’000 HK$’000 4,273 2,344 8,637 1,585 1,665,765 1,679,265 186,910 38,094 28,077 26,774 1,893,662 1,748,062	Fair values 2011 2012 HK$’000 HK$’000 4,273 2,344 8,637 1,585 1,665,765 1,679,265 186,910 38,094 28,077 26,774 1,893,662 1,748,062
				1,748,062

IIA – 52

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

Financial liabilities Deposits received and other payables Due to the immediate holding company Due to fellow subsidiaries Due to the ultimate holding company	Carrying 2011 HK$’000 32,317 79 101,160 3,970,826 4,104,382	amounts 2012 HK$’000 42,526 15,590 264,193 5,981,291 6,303,600	Fair values 2011 2012 HK$’000 HK$’000 32,317 42,526 79 15,590 101,160 264,193 3,970,826 5,981,291 4,104,382 6,303,600	Fair values 2011 2012 HK$’000 HK$’000 32,317 42,526 79 15,590 101,160 264,193 3,970,826 5,981,291 4,104,382 6,303,600
				6,303,600

The carrying amounts and fair values of the Target Company’s financial instruments are as follows:

Financial assets Cash and cash equivalents Financial liabilities Due to a subsidiary Due to the immediate holding company	Carrying 2011 HK$’000 55 Carrying 2011 HK$’000 15,546 79 15,625	amounts 2012 HK$’000 50 amounts 2012 HK$’000 – 15,590 15,590	Fair values 2011 2012 HK$’000 HK$’000 55 50 Fair values 2011 2012 HK$’000 HK$’000 15,546 – 79 15,590 15,625 15,590	Fair values 2011 2012 HK$’000 HK$’000 55 50 Fair values 2011 2012 HK$’000 HK$’000 15,546 – 79 15,590 15,625 15,590
				15,590

IIA – 53

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The fair values of deposits and other receivables, amounts due from/to fellow subsidiaries, an amount due from the ultimate holding company, cash and cash equivalents, restricted cash, deposits received and other payables, an amount due to the immediate holding company and an amount due to the ultimate holding company under current liabilities approximate to their carrying amounts largely due to the short term maturities of these instruments.

The fair value of an amount due to the ultimate holding company under non-current liability has been calculated by discounting the expected future cash flows using rates currently available for instruments on similar terms, credit risk and remaining maturities.

29. Financial risk management objectives and policies

The Target Group’s principal financial instruments comprise amounts due from/to fellow subsidiaries, amounts due from/to the ultimate holding company and cash and cash equivalents. The main purpose of these financial instruments is to raise finance for the Target Group’s operations.

The main risks arising from the Target Group’s financial instruments are interest rate risk and liquidity risk. The board of directors reviews and agrees policies for managing each of these risks and they are summarised below.

Interest rate risk

The Target Group’s exposure to the risk of changes in market interest rates relates primarily to the amounts due to fellow subsidiaries and an amount due to the ultimate holding company. The Target Group’s policy is to obtain the most favourable interest rate available. The effective interest rate and terms of repayment of the amounts due to fellow subsidiaries and the amount due to the ultimate holding company are set out in notes 26(b)(ii) and 26(b)(iii) to the Financial Information.

The Target Group has not used any interest swaps to hedge its exposure to interest rate risk. At the end of the Relevant Periods, approximately 49% and 61% of the amounts due to fellow subsidiaries and the amount due to the ultimate holding company bore interest at fixed rates.

IIA – 54

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Target Group’s loss before tax (through the impact on floating rate borrowings):

		Increase/
	Increase/	(decrease)
	(decrease)	in loss
	in basis points	before tax
		HK$’000
Period from 20 April 2011 (date of
incorporation) to 31 December 2011
RMB	+100	6,170
RMB	–100	(6,170)
Year ended 31 December 2012
RMB	+100	12,855
RMB	–100	(12,855)
Liquidity risk

Liquidity risk arises when the Target Group is unable to meet its current liabilities that fall due. The Target Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of short and long term bank loans. Through maintaining a reasonable proportion in its asset and liability structure, the Target Group is able to meet its ongoing financial needs.

The maturity profile of the Target Group’s financial liabilities as at the end of the Relevant Periods is as follows:

Deposits received and other payables Due to the immediate holding company Due to fellow subsidiaries Due to the ultimate holding company Total	On demand HK$’000 32,317 79 101,160 2,116,768 2,250,324	Less than 3 months HK$’000 – – – – –	As at 31 December 2011 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – – – 2,268,038 – 2,268,038	Over 5 years HK$’000 – – – – –	Total HK$’000 32,317 79 101,160 4,384,806
					4,518,362

IIA – 55

APPENDIX II A

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

Deposits received and other payables Due to the immediate holding company Due to fellow subsidiaries Due to the ultimate holding company Total	On demand HK$’000 42,526 15,590 264,193 2,253,059 2,575,368	Less than 3 months HK$’000 – – – – –	As at 31 December 2012 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – – – 4,501,794 – 4,501,794	Over 5 years HK$’000 – – – – –	Total HK$’000 42,526 15,590 264,193 6,754,853
					7,077,162

The maturity profile of the Target Company’s financial liabilities as at the end of the Relevant Periods is as follows:

Due to a subsidiary Due to the immediate holding company Total Due to the ultimate holding company	On demand HK$’000 15,546 79 15,625 On demand HK$’000 15,590	Less than 3 months HK$’000 – – – Less than 3 months HK$’000 –	As at 31 December 2011 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – – As at 31 December 2012 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – –	Over 5 years HK$’000 – – – Over 5 years HK$’000 –	Total HK$’000 15,546 79
					15,625

					Total HK$’000 15,590

Capital management

The objectives of the Target Group’s capital management policy are to ensure the financing capabilities of the Target Group in running its operation on a going concern basis, to maintain an optimal capital structure, to reduce capital cost and to maximise the value of shareholders.

The Target Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Target Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives or policies for managing capital during the Relevant Periods.

IIA – 56

APPENDIX II A

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

The Target Group monitors capital using a gearing ratio, which is net debts divided by total assets. Net debts are an amount due to the ultimate holding company less cash and cash equivalents and restricted cash. The gearing ratios as at the end of the Relevant Periods are as follows:

Due to the ultimate holding company (note 26(b)(iii)) Less: Cash and cash equivalents (note 17) Restricted cash (note 17) Net debts Total assets Gearing ratio	As at 31 December 2011 2012 HK$’000 HK$’000 3,970,826 5,981,291 (186,910) (38,094) (28,077) (26,774) 3,755,839 5,916,423 6,598,095 8,753,309 57% 68%

30. Events after the relevant periods

(i) Pursuant to an agreement entered into between the Target Group and Shum Yip Group on 1 January 2013, the Target Group is entitled to receive interest at 9.9% per annum on the amount of RMB1,350,000,000 (equivalent to HK$1,679,265,000) due from Shum Yip Group with effect from 1 January 2013 (note 26(b)(i)).
( ii) Pursuant to the Acquisition Agreement dated 17 January 2013 as detailed in note 25(ii), Shum Yip Holdings has agreed to indemnify Shenzhen Investment and the Target Group for (i) any loss of the Target Group if the Target Group is required to bear any tax liabilities of Shum Yip Holdings which may arise from the transactions under the Acquisition Agreement; and (ii) any tax liabilities due to the income or transactions of the Target Group prior to the completion of the Acquisition.

IIA – 57

ACCOUNTANTS’ REPORT OF THE TARGET GROUP

APPENDIX II A

( iii) Pursuant to the undertaking letter given by the Target Group to Shum Yip Terra dated 25 February 2013, the Target Group has agreed that the purchase of the land and buildings from Shum Yip Terra (note 16) shall be conditional upon the approval of the independent shareholders at the extraordinary general meeting of Shenzhen Investment , the intermediate holding company of Shum Yip Terra. In the event that the aforesaid shareholders’ approval is not obtained, the Target Group shall enter into the relevant termination agreement(s) and/or arrangements with Shum Yip Terra in connection with the termination of the purchase of the land and buildings to the effect that the purchase of the land and buildings will be terminated and will not be completed with the entire consideration of HK$338,842,000 being refunded to the Target Group by Shum Yip Terra.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Target Group or any of its subsidiaries in respect of any period subsequent to 31 December 2012.

Yours faithfully, Certified Public Accountants Hong Kong

IIA – 58

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The following is the text of the accountants’ report of the PRC Co 1 Group prepared for the purpose of incorporation in this circular, received from the reporting accountants, Ernst & Young.

22/F, CITIC Tower 1 Tim Mei Avenue Central, Hong Kong

28 March 2013

The Directors

Shenzhen Investment Limited

Dear Sirs,

We set out below our report on the financial information of Shenzhen Jizhaoxin Investment Limited (“ PRC Co 1”) and its subsidiary (hereinafter collectively referred to as the “PRC Co 1 Group”) comprising the consolidated income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows of the PRC Co 1 Group for each of the years ended 31 December 2010, 2011 and 2012 (the “Relevant Periods”), and the consolidated statements of financial position of the PRC Co 1 Group as at 31 December 2010, 2011 and 2012, the statements of financial position of PRC Co 1 as at 31 December 2010, 2011 and 2012, together with the notes thereto (the “Financial Information”), for inclusion in the circular of Shenzhen Investment Limited dated 28 March 2013 (the “Circular”) in connection with the proposed acquisition of Shenzhen Silicon Valley Hi-tech Investment Company Limited (the “ Target Company”), the intermediate holding company of PRC Co 1.

PRC Co 1 was incorporated as a limited company in the People’s Republic of China (the “PRC”) on 23 January 1989. Apart from investment holding, PRC Co 1 has not commenced any business or operation since its incorporation.

The audited financial statements of PRC Co 1 for the years ended 31 December 2010 and 2011, which were prepared in accordance with accounting principles generally accepted in the PRC, were audited by 大華會計師事務所 (Da Hua Certified Public Accountants), certified public accountants registered in the PRC.

IIB – 1

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

For the purpose of this report, the directors of PRC Co 1 (the “Directors”) have prepared the consolidated financial statements of the PRC Co 1 Group (the “Underlying Financial Statements”) in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”), which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations, issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). The Underlying Financial Statements for each of the years ended 31 December 2010, 2011 and 2012 were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA.

The Financial Information set out in this report has been prepared from the Underlying Financial Statements with no adjustments made thereon.

DIRECTORS’ RESPONSIBILITY

REPORTING ACCOUNTANTS’ RESPONSIBILITY

It is our responsibility to form an independent opinion on the Financial Information and to report our opinion thereon to you.

OPINION IN RESPECT OF THE FINANCIAL INFORMATION

In our opinion, for the purpose of this report, the Financial Information gives a true and fair view of the state of affairs of the PRC Co 1 Group and PRC Co 1 as at 31 December 2010, 2011 and 2012 and of the consolidated results and cash flows of the PRC Co 1 Group for each of the Relevant Periods.

IIB – 2

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

I. FINANCIAL INFORMATION

CONSOLIDATED INCOME STATEMENTS

Notes REVENUE 5 Cost of sales Gross profit Other income and gains 5 Administrative expenses Other expenses Finance costs 7 LOSS BEFORE TAX 6 Income tax 10 LOSS FOR THE YEAR Attributable to: Owners of the parent Non-controlling interests	Year 2010 HK$’000 13,489 (6,814) 6,675 6 23 (39,373) (204,220) (15,132) (251,427) 62,578 (188,849) (141,678) (47,171) (188,849)	ended 31 December 2011 2012 HK$’000 HK$’000 – – – – – – 11,189 729 (6,990) (17,640) (858) (1,576) (65,675) (66,678) (62,334) (85,165) 15,040 20,733 (47,294) (64,432) (35,508) (48,335) (11,786) (16,097) (47,294) (64,432)

IIB – 3

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

LOSS FOR THE YEAR OTHER COMPREHENSIVE LOSS Exchange differences on translation OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF TAX TOTAL COMPREHENSIVE LOSS FOR THE YEAR Attributable to: Owners of the parent Non-controlling interests	Year 2010 HK$’000 (188,849) (26,937) (26,937) (215,786) (161,122) (54,664) (215,786)	ended 31 December 2011 2012 HK$’000 HK$’000 (47,294) (64,432) (52,507) (10,097) (52,507) (10,097) (99,801) (74,529) (76,460) (56,181) (23,341) (18,348) (99,801) (74,529)

IIB – 4

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Notes NON-CURRENT ASSETS Property, plant and equipment 12 Investment properties under construction 13 Prepayment 16 Deferred tax asset 17 Total non-current assets CURRENT ASSETS Properties under development 14 Trade receivables Deposits and other receivables 16 Due from fellow subsidiaries 25(b)(i) Due from the ultimate holding company 25(b)(i) Cash and cash equivalents 17 Restricted cash 17 Total current assets CURRENT LIABILITIES Deposits received, other payables and accruals 18 Due to fellow subsidiaries 25(b)(ii) Due to the ultimate holding company 25(b)(iii) Total current liabilities	31 December 2010 HK$’000 367 327,072 – 80,191 407,630 453,615 856 299 – – 7,769 24,203 486,742 30,402 10,506 1,905,808 1,946,716	31 December 2011 HK$’000 2,761 400,081 – 99,513 502,355 556,601 – 4,273 8,637 1,665,765 186,855 28,077 2,450,208 32,722 101,160 2,116,768 2,250,650	31 December 2012 HK$’000 5,167 1,145,900 338,842 121,297
			1,611,206
			1,719,019 – 2,344 1,585 1,679,265 22,221 26,774
			3,451,208
			43,632 264,193 2,253,031
			2,560,856

IIB – 5

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Notes NET CURRENT ASSETS/ (LIABILITIES) TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITY Due to the ultimate holding company 25(b)(iii) Total non-current liability Net liabilities EQUITY Paid-up capital 20 Reserves 21 Non-controlling interests Total deficit	31 December 2010 HK$’000 (1,459,974) (1,052,344) – – (1,052,344) 284,767 (1,106,232) (821,465) (230,879) (1,052,344)	31 December 2011 HK$’000 199,558 701,913 1,854,058 1,854,058 (1,152,145) 284,767 (1,182,692) (897,925) (254,220) (1,152,145)	31 December 2012 HK$’000 890,352 2,501,558 3,728,232 3,728,232 (1,226,674) 284,767 (1,238,873) (954,106) (272,568) (1,226,674)

IIB – 6

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

At 31 December 2009 and 1 January 2010 Loss for the year Other comprehensive loss for the year Exchange differences on translation Total comprehensive loss for the year At 31 December 2010 and 1 January 2011 Loss for the year Other comprehensive loss for the year Exchange differences on translation Total comprehensive loss for the year At 31 December 2011 and 1 January 2012 Loss for the year Other comprehensive loss for the year Exchange differences on translation Total comprehensive loss for the year At 31 December 2012		Attributable to owners of the parent	Attributable to owners of the parent	Attributable to owners of the parent	Total HK$’000 (660,343) (141,678) (19,444) (161,122) (821,465) (35,508) (40,952) (76,460) (897,925) (48,335) (7,846) (56,181) (954,106)	Non- controlling interests HK$’000 (176,215) (47,171) (7,493) (54,664) (230,879) (11,786) (11,555) (23,341) (254,220) (16,097) (2,251) (18,348) (272,568)	Total deficit HK$’000 (836,558) (188,849) (26,937) (215,786) (1,052,344) (47,294) (52,507) (99,801) (1,152,145) (64,432) (10,097) (74,529) (1,226,674)
	Paid-up capital HK$’000 284,767 – – – 284,767 – – – 284,767 – – – 284,767	Capital reserve HK$’000 969 – – – 969 – – – 969 – – – 969*	Exchange Fluctuation reserve HK$’000 (23,516) – (19,444) (19,444) (42,960) – (40,952) (40,952) (83,912) – (7,846) (7,846) (91,758)*	Accumulated losses HK$’000 (922,563) (141,678) – (141,678) (1,064,241) (35,508) – (35,508) (1,099,749) (48,335) – (48,335) (1,148,084)*

These reserve accounts comprise the consolidated debit reserve balance of HK$1,106,232,000, HK$1,182,692,000 and HK$1,238,873,000 in the consolidated statements of financial position as at 31 December 2010, 2011 and 2012, respectively.

IIB – 7

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

CONSOLIDATED STATEMENTS OF CASH FLOWS

Notes CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax: Adjustments for: Finance costs 7 Finance income 6 Depreciation 6 Impairment of property, plant and equipment 6 Decrease in trade receivables Decrease/(increase) in deposits and other receivables Increase in properties under development Increase/(decrease) in other payables and accruals Decrease/(increase) in amounts due from fellow subsidiaries Increase/(decrease) in amounts due to fellow subsidiaries Increase in an amount due from the ultimate holding company Decrease/(increase) in restricted cash Cash used in operations Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Purchases of items of property, plant and equipment Prepayments for items of property, plant and equipment Additions to investment properties Net cash flows used in investing activities	Year 2010 HK$’000 (251,427) 15,132 (30) 23,732 203,917 (8,676) 228 125,066 (434,839) (101,188) – – – (8,002) (427,411) (427,411) 30 (183) – (319,543) (319,696)	ended 31 December 2011 2012 HK$’000 HK$’000 (62,334) (85,165) 65,675 66,678 (107) (633) 107 234 – – 3,341 (18,886) 856 – (3,972) 1,762 (39,241) (993,819) 2,432 10,909 (8,637) 7,052 18,508 (16,691) (1,625,805) – (3,874) 1,303 (1,656,392) (1,008,370) (1,656,392) (1,008,370) 107 633 (2,851) (3,005) – (338,842) (26,544) (622,282) (29,288) (963,496)

IIB – 8

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in amounts due to fellow subsidiaries Increase in an amount due to the ultimate holding company Net cash flows from financing activities NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year Effect of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF YEAR ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances 17 Cash and cash equivalents as stated in the statements of cash flows 17 Notes	(319,696) 10,506 729,507 740,013 (7,094) 14,349 514 7,769 7,769 7,769 Year 2010 HK$’000	(29,288) (963,496) 72,146 179,724 1,792,208 1,625,951 1,864,354 1,805,675 178,674 (166,191) 7,769 186,855 412 1,557 186,855 22,221 186,855 22,221 186,855 22,221 ended 31 December 2011 2012 HK$’000 HK$’000

IIB – 9

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

STATEMENTS OF FINANCIAL POSITION

Notes
NON-CURRENT ASSETS
Property, plant and equipment
Investment in a subsidiary
15
Total non-current assets
CURRENT ASSET
Deposits and other receivables
16
Cash and cash equivalents
17
Total current asset
CURRENT LIABILITIES
Deposits received,
other payables and accruals
18
Due to a subsidiary
15
Due to the immediate
holding company
25(b)(i)
Total current liabilities
NET CURRENT LIABILITIES
TOTAL ASSETS LESS
CURRENT LIABILITIES
Net assets
EQUITY
Paid-up capital
Reserves
Total equity

As at 31 December
2010
2011
2012
HK$’000
HK$’000
HK$’000
210
69
25
480,457
503,898
507,982
480,667
503,967
508,007
165
167
–
1,441
1,395
1,411
1,606
1,562
1,411
170
58
59
651
680
520
129,821
136,157
137,258
130,642
136,895
137,837
(129,036)
(135,333)
(136,426)
351,631
368,634
371,581
351,631
368,634
371,581
284,767
284,767
284,767
66,864
83,867
86,814
351,631
368,634
371,581

IIB – 10

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

II. NOTES TO THE FINANCIAL INFORMATION

1. Corporate information

PRC Co 1 was incorporated as a limited company in the PRC on 23 January 1989. The registered office of PRC Co 1 is located at 蓮花彩電工業區 (Lianhua Colour TV Industrial Zone), Huanggang Road, Futian District, Shenzhen, Guangdong Province, the PRC.

During the Relevant Periods, the PRC Co 1 Group was principally engaged in property development and property investment in the PRC.

In the opinion of the Directors, the immediate holding company of PRC Co 1 is Shenzhen Shum Yip Technology Development Limited（深圳市深業科技開發有限公司）. During the Relevant Periods, the ultimate holding company of PRC Co 1 was Shenzhen Yuanzhi Investment Co., Ltd. (“Yuanzhi Investment”)（深圳市遠致投資有限公司）for the period from 1 January 2010 to 6 September 2010 and 深業集團有限公司 (“Shum Yip Group”) for the remaining period.

As at the end of the Relevant Periods, PRC Co 1 had direct interests in a subsidiary set out below, which has substantially similar characteristics to a private company incorporated in Hong Kong.

Place and date of Nominal value of incorporation/ issued ordinary/ registration registered Percentage of equity Company Name and operations share capital attributable to PRC Co 1 Principal activities Direct Indirect Shenzhen Kezhigu PRC/ RMB784,528,950 75% – Property development Investment Limited Mainland China and property (“ PRC Co 2”) (i) 20 May 1989 investment （深圳市科之谷投資有限公司）

(i) The statutory audited financial statements of PRC Co 2 for the years ended 31 December 2010 and 2011 were prepared in accordance with PRC generally accepted accounting principles and were audited by 大華會計師事務所 (Da Hua Certified Public Accountants), certified public accountants registered in the PRC.

IIB – 11

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

2.1 Basis of preparation

The Financial Information has been prepared in accordance with HKFRSs (which include all Hong Kong Financial Reporting Standards, HKASs and Interpretations) issued by the HKICPA, accounting principles generally accepted in Hong Kong. All HKFRSs effective for the accounting periods commencing from 1 January 2012, together with the relevant transitional provisions, have been early adopted by the PRC Co 1 Group in the preparation of the Financial Information throughout the Relevant Periods.

During the Relevant Periods, the PRC Co 1 Group finances its operations primarily through proceeds from the ultimate holding company. The Directors of the PRC Co 1 Group are of the opinion that the PRC Co 1 Group will have sufficient working capital to finance its operations and to maintain its operating existence in the foreseeable future and accordingly have prepared the Financial Information on a going concern basis.

Basis of consolidation

The consolidated financial statements include the financial statements of the PRC Co 1 Group for the years ended 31 December 2010, 2011 and 2012. The financial statements of the subsidiaries are prepared for the same reporting period as PRC Co 1, using consistent accounting policies. All intra-group balances, transactions, and unrealised gains and losses resulting from intra-group transactions and dividends are eliminated on consolidation in full.

Total comprehensive income within a subsidiary is attributed to the noncontrolling interest even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If PRC Co 1 loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The PRC Co 1 Group’s share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

2.2 Issued but not yet effective Hong Kong Financial Reporting Standards

The PRC Co 1 Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these Financial Information.

HKFRS 1 Amendments	Amendments to HKFRS 1 First-time Adoption of Hong
	Kong Financial Reporting Standards – Government
	Loans2
HKFRS 7 Amendments	Amendments to HKFRS 7 Financial Instruments:
	Disclosures – Offsetting Financial Assets and
	Financial Liabilities2
HKFRS 9	Financial Instruments4
HKFRS 10	Consolidated Financial Statements2
HKFRS 11	Joint Arrangements2
HKFRS 12	Disclosure of Interests in Other Entities2
HKFRS 10, HKFRS	Amendments to HKFRS 10, HKFRS 11 and HKFRS 12
11 and HKFRS 12	– Transition Guidance2
Amendments
HKFRS 10, HKFRS 12	Amendments to HKFRS 10, HKFRS 12 and HKAS 27
and HKAS 27 (2011)	(2011) – Investment Entities3
Amendments
HKFRS 13	Fair Value Measurement2
HKAS 1 Amendments	Amendments to HKAS 1 Presentation of Financial
	Statements – Presentation of Items of Other
	Comprehensive Income1
HKAS 19 (2011)	Employee Benefits2
HKAS 27 (2011)	Separate Financial Statements2
HKAS 28 (2011)	Investments in Associates and Joint Ventures2
HKAS 32 Amendments	Amendments to HKAS 32 Financial Instruments:
	Presentation – Offsetting Financial Assets and
	Financial Liabilities3
HK(IFRIC)-Int 20	Stripping Costs in the Production Phase of a Surface
	Mine2
Annual Improvements	Amendments to a number of HKFRSs issued in June
2009-2011 Cycle	20122

1 Effective for annual periods beginning on or after 1 July 2012

2 Effective for annual periods beginning on or after 1 January 2013

3 Effective for annual periods beginning on or after 1 January 2014

4 Effective for annual periods beginning on or after 1 January 2015

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The PRC Co 1 Group is in the process of making an assessment of the impact of these new and revised HKFRSs upon initial application. So far, the PRC Co 1 Group considers that these new and revised HKFRSs are unlikely to have a significant impact on its results of operations and financial position.

2.3 Summary of significant accounting policies

Subsidiaries

A subsidiary is an entity whose financial and operating policies PRC Co 1 controls, directly or indirectly, so as to obtain benefits from its activities. The results of subsidiaries are consolidated from the date of acquisition, being the date on which the PRC Co 1 Group obtains control, and continue to be consolidated until the date that such control ceases.

The results of subsidiaries are included in PRC Co 1’s income statement to the extent of dividends received and receivable. PRC Co 1’s investments in subsidiaries are stated at cost less any impairment loss.

Business combinations

Business combinations are accounted for using the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the PRC Co 1 Group, liabilities assumed by the PRC Co 1 Group to the former owners of the acquiree and the equity interests issued by the PRC Co 1 Group in exchange for control of the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs are expensed as incurred.

When the PRC Co 1 Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any fair value of the PRC Co 1 Group’s previously held equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as a gain on bargain purchase.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Impairment of non-financial assets

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Related parties

A party is considered to be related to the PRC Co 1 Group if:

(a) the party is a person or a close member of that person’s family and that person,
(i) has control or joint control over the PRC Co 1 Group;
(ii) has significant influence over the PRC Co 1 Group; or
(iii) is a member of the key management personnel of the PRC Co 1 Group or of a parent of the PRC Co 1 Group; or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the PRC Co 1 Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);
(iii) the entity and the PRC Co 1 Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the PRC Co 1 Group or an entity related to the PRC Co 1 Group;
(vi) the entity is controlled or jointly-controlled by a person identified in (a); and
(vii) person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Property, plant and equipment and depreciation

Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the income statement in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the PRC Co 1 Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly.

Buildings	Over the land lease terms
Leasehold improvements	19%
Furniture, fixtures and equipment	19%
Motor vehicles	19%
Plant and machinery	10% to 25%

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Investment properties

Properties under construction or development for future use as investment properties are classified as investment properties under construction. If the fair value cannot be reliably determined, the investment properties under construction will be measured at cost until such time as fair value can be determined or construction is completed. The PRC Co 1 Group has concluded that the fair value of its investment properties under construction cannot be measured reliably as the properties are in the early stage of development at the end of the Relevant Periods, therefore, the PRC Co 1 Group’s investment properties under construction continue to be measured at cost.

Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the year in which they arise.

Any gains or losses on the retirement or disposal of an investment property are recognised in the income statement in the year of the retirement or disposal.

For a transfer from investment properties to owner-occupied properties or inventories, the deemed cost of a property for subsequent accounting is its fair value at the date of change in use. If a property occupied by the PRC Co 1 Group as an owneroccupied property becomes an investment property, the PRC Co 1 Group accounts for such property in accordance with the policy stated under “Property, plant and equipment and depreciation” up to the date of change in use, and any difference at that date between the carrying amount and the fair value of the property is accounted for as a revaluation in accordance with the policy stated under “Property, plant and equipment and depreciation” above. For a transfer from inventories to investment properties, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the PRC Co 1 Group is the lessor, assets leased by the PRC Co 1 Group under operating leases are included in non-current assets, and rentals receivable under the operating leases are credited to the income statement on the straight-line basis over the lease terms. Where the PRC Co 1 Group is the lessee, rentals payable under the operating leases are charged to the income statement on the straight-line basis over the lease terms.

Investments and other financial assets

Initial recognition and measurement

Financial assets within the scope of HKAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables and available-forsale financial investments, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The PRC Co 1 Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the PRC Co 1 Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

The PRC Co 1 Group’s financial assets include cash and bank balances, trade receivables, deposits and other receivables, amounts due from fellow subsidiaries and an amount due from the ultimate holding company.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Loans and receivables

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired; or
the PRC Co 1 Group has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “passthrough” arrangement; and either (a) the PRC Co 1 Group has transferred substantially all the risks and rewards of the asset, or (b) the PRC Co 1 Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the PRC Co 1 Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the PRC Co 1 Group’s continuing involvement in the asset. In that case, the PRC Co 1 Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the PRC Co 1 Group has retained.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Impairment of financial assets

The PRC Co 1 Group assesses at the end of the Relevant Periods whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the PRC Co 1 Group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the PRC Co 1 Group first assesses individually whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the PRC Co 1 Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of HKAS 39 are classified as financial liabilities at fair value through profit or loss, or loans and borrowings, as appropriate. The PRC Co 1 Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus, in the case of loans and borrowings, directly attributable transaction costs.

The PRC Co 1 Group’s financial liabilities include other payables, an amount due to the ultimate holding company and amounts due to fellow subsidiaries.

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Loans and borrowings

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Financial guarantee contracts

Financial guarantee contracts issued by the PRC Co 1 Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. A financial guarantee contract is recognised initially as a liability at its fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the PRC Co 1 Group measures the financial guarantee contract at the higher of: (i) the amount of the best estimate of the expenditure required to settle the present obligation at the end of the Relevant Periods; and (ii) the amount initially recognised less, when appropriate, cumulative amortisation.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

Offsetting of financial instruments

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Properties under development

Properties under development are intended to be held for sale after completion.

Cash and cash equivalents

For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, which are not restricted as to use.

Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the Relevant Periods, taking into consideration interpretations and practices prevailing in the countries in which the PRC Co 1 Group operates.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Deferred tax liabilities are recognised for all taxable temporary differences, except:

when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and a joint venture when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and a joint venture, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to the PRC Co 1 Group and when the revenue can be measured reliably, on the following bases:

(a) income from the sale of properties, when the significant risks and rewards of ownership have been transferred to the buyer, provided that the PRC Co 1 Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the properties sold;
(b) rental income, on a time proportion basis over the lease terms;
(c) services income, when the relevant services have been rendered; and
(d) interest income, on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Borrowing costs

Other employee benefits

Pension schemes

The PRC Co 1 Group participate in the central pension scheme (the “CPS”) operated by the local municipal government for all of its staff. The PRC Co 1 Group are required to contribute 8% to 20% of its payroll costs to the CPS. The contributions are charged to the income statement as they become payable in accordance with the rules of the CPS.

Foreign currencies

These financial statements are presented in Hong Kong dollars. Foreign currency transactions recorded by the PRC Co 1 Group are initially recorded using their respective functional currency rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange ruling at the end of the Relevant Periods. All differences arising on the settlement or transaction of monetary items are taken to the income statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non– monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The gain or loss arising on retranslation of a non-monetary item is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation differences on the item whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

As at the end of the Relevant Periods, the assets and liabilities of the PRC Co 1 Group are translated into Hong Kong dollars at the exchange rates ruling at the end of the Relevant Periods and their income statements are translated into Hong Kong dollars at the weighted average exchange rates for the year. The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve.

The cash flows of the PRC Co 1 Group are translated into Hong Kong dollars at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of the PRC Co 1 Group which arise throughout the year are translated into Hong Kong dollars at the weighted average exchange rates for the year.

3. Significant accounting judgements and estimates

The preparation of the PRC Co 1 Group’s Financial Information requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the Relevant Periods. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

Judgements

In the process of applying the PRC Co 1 Group’s accounting policies, management has made the following judgement, apart from those involving estimations, which have the most significant effect on the amounts recognised in the Financial Information:

Impairment of assets

In determining whether an asset is impaired or the event previously causing the impairment no longer exists, the PRC Co 1 Group has to exercise judgement in the area of asset impairment, particularly in assessing: (1) whether an event has occurred that may affect the asset value or such event affecting the asset value has not been in existence; (2) whether the carrying value of an asset can be supported by the net present value of future cash flows which are estimated based upon the continued use of the asset or derecognition; and (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to determine the level of impairment, including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the net present value used in the impairment test.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Classification between investment properties and owner-occupied properties

The PRC Co 1 Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the PRC Co 1 Group considers whether a property generates cash flows largely independently of the other assets held by the PRC Co 1 Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately or leased out separately under finance leases, the PRC Co 1 Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Classification between investment properties and properties under development

The PRC Co 1 Group develops properties held for sale and properties held to earn rentals and/or for capital appreciation. Judgement is made by management on determining whether a property is designated as an investment property or properties under development. In general, the PRC Co 1 Group considers its intention for holding the properties at the early development stage of the related properties. However, in response to the market demand to investment properties, the PRC Co 1 Group would from time to time amend the corporate strategies on the PRC Co 1 Group’s properties portfolio. During the course of construction, the related properties under construction are accounted for as properties under development included in current assets if the properties are intended for sale after their completion, whereas, the properties accounted for as investment properties under construction included in non-current assets if the properties are intended to be held to earn rentals and/or for capital appreciation. Upon completion of the properties, the properties held for sale are transferred to completed properties held for sale while the properties held to earn rentals and/or for capital appreciation are transferred to completed investment properties.

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Estimation uncertainty

Deferred tax asset

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. At 31 December 2010, 2011 and 2012, the carrying value of the deferred tax asset relating to recognised tax losses was HK$80,191,000, HK$99,513,000 and HK$121,297,000, respectively.

4. Operating segment information

The principal activity of the PRC Co 1 Group is property development and property investment. The Directors are of the view that the PRC Co 1 Group operates in one segment as defined in HKFRS 8: Operating Segments. The chief operating decision maker reviews the profitability and operations of the PRC Co 1 Group as one business. Accordingly, no segment information has been disclosed.

5. Revenue, other income and gains

Revenue, which is also the PRC Co 1 Group’s turnover, represents rental income.

An analysis of revenue, other income and gains is as follows:

Revenue Rental income Other income and gains Bank interest income Others	Year 2010 HK$’000 13,489 30 593 623	ended 31 December 2011 2012 HK$’000 HK$’000 – – 107 633 11,082 96 11,189 729	ended 31 December 2011 2012 HK$’000 HK$’000 – – 107 633 11,082 96 11,189 729
			633 96
			729

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

6. Loss before tax

The PRC Co 1 Group’s loss before tax is arrived at after charging/(crediting):

Cost of services provided Depreciation Minimum lease payments under operating leases in respect of land and buildings Amortisation of prepaid land lease payments Auditors’ remuneration Employee benefit expense: Wages and salaries Pension scheme contributions Bank interest income Impairment of property, plant and equipment	Year 2010 HK$’000 6,814 23,732 – 543 103 6,505 1,150 7,655 (30) 203,917	ended 31 December 2011 2012 HK$’000 HK$’000 – – 107 234 867 1,033 – – 166 369 696 8,088 434 917 1,130 9,005 (107) (633) – –

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

7. Finance costs

An analysis of finance costs is as follows:

Interest on an amount due to the ultimate holding company and amounts due to fellow subsidiaries Less: Interest capitalised	Year 2010 HK$’000 16,161 (1,029) 15,132	ended 31 December 2011 2012 HK$’000 HK$’000 137,797 351,060 (72,122) (284,382) 65,675 66,678	ended 31 December 2011 2012 HK$’000 HK$’000 137,797 351,060 (72,122) (284,382) 65,675 66,678
			66,678

The average capitalisation rate for the year used to determine the amount of borrowing costs eligible for capitalisation was 5.5%, 8.0% and 9.4% for the years ended 31 December 2010, 2011 and 2012, respectively.

8. Directors’ remuneration

No director received any fees or emoluments in respect of their services rendered to the PRC Co 1 Group during the Relevant Periods.

9. Five highest paid employees

None of the five highest paid employees of the PRC Co 1 Group during the Relevant Periods were directors. Details of the remuneration of the five highest paid employees for the Relevant Periods are as follows:

Salaries, allowances and benefits in kind Pension scheme contributions	Year 2010 HK$’000 3,262 132 3,394	ended 31 December 2011 2012 HK$’000 HK$’000 3,282 8,175 155 150 3,437 8,325	ended 31 December 2011 2012 HK$’000 HK$’000 3,282 8,175 155 150 3,437 8,325
			8,325

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The number of non-director, highest paid employees whose remuneration fell within the following bands is as follows:

Nil to HK$1,000,000 HK$1,000,001 to HK$2,000,000 HK$2,000,001 to HK$4,000,000	Number of employees 2010 2011 2012 5 5 1 – – 3 – – 1 5 5 5	Number of employees 2010 2011 2012 5 5 1 – – 3 – – 1 5 5 5
		5

10. Income tax

Pursuant to the PRC Corporate Income Tax Law effective on 1 January 2008, the corporate income tax rate was unified as 25% for enterprises in the PRC. However, PRC Co 1 and PRC Co 2, enterprises located in Shenzhen Special Economic Zone, are entitled to adopt the new CIT rate as follows: 2008, 18%; 2009, 20%; 2010, 22%; 2011, 24%; 2012, 25%.

Current Charge for the year Deferred (note 19) Total tax credit for the year	Year 2010 HK$’000 – (62,578) (62,578)	ended 31 December 2011 2012 HK$’000 HK$’000 – – (15,040) (20,733) (15,040) (20,733)	ended 31 December 2011 2012 HK$’000 HK$’000 – – (15,040) (20,733) (15,040) (20,733)
			(20,733)

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

A reconciliation of the tax credit applicable to loss before tax at the statutory income tax rate to the tax expense at the PRC Co 1 Group’s effective income tax rate for the year, and a reconciliation of the applicable rate (i.e., the statutory tax rate) to the effective tax rate, are as follows:

Loss before tax Tax at the statutory tax rate Expenses not deductible for tax Effect on opening deferred tax of increase in rates Tax credit at the PRC Co 1 Group’s effective rate	2010 HK$’000 (251,427) (55,314) 325 (7,589) (62,578)	% 22 – 3 25	Year ended 31 December 2011 HK$’000 % (62,334) (14,960) 24 522 (1) (602) 1 (15,040) 24	2012 HK$’000 (85,165) (21,291) 558 – (20,733)	% 25 (1) – 24

11. Profit attributable to owners of the parent

The consolidated loss attributable to owners of the parent for the years ended 31 December 2010, 2011 and 2012 includes a loss of HK$166,000, HK$148,000 and HK$40,000, respectively, which has been dealt with in the financial statements of PRC Co 1 (note 21).

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ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

12. Property, plant and equipment

PRC Co 1 Group

31 December 2010 At 1 January 2010: Cost Accumulated depreciation Net carrying amount At 1 January 2010, net of accumulated depreciation Additions Depreciation provided during the year Impairment Exchange realignment At 31 December 2010, net of accumulated depreciation and impairment At 31 December 2010: Cost Accumulated depreciation and impairment Net carrying amount 31 December 2011 At 1 January 2011: Cost Accumulated depreciation and impairment Net carrying amount At 1 January 2011, net of accumulated depreciation and impairment Additions Depreciation provided during the year Exchange realignment At 31 December 2011, net of accumulated depreciation and impairment At 31 December 2011: Cost Accumulated depreciation and impairment Net carrying amount	Buildings HK$’000 495,734 (272,079) 223,655 223,655 – (23,508) (202,510) 2,363 – 498,097 (498,097) – Buildings HK$’000 498,097 (498,097) – – – – – – 498,097 (498,097) –	Leasehold improvements HK$’000 – – – – – – – – – – – – Leasehold improvements HK$’000 – – – – 1,896 (166) (4) 1,726 1,896 (170) 1,726	Furniture, fixtures and equipment HK$’000 458 (108) 350 350 183 (174) – 8 367 657 (290) 367 Furniture, fixtures and equipment HK$’000 657 (290) 367 367 512 (236) 12 655 1,201 (546) 655	Motor vehicles HK$’000 – – – – – – – – – – – – Motor vehicles HK$’000 – – – – 443 (62) (1) 380 443 (63) 380	Plant and machinery HK$’000 2,656 (1,068) 1,588 1,588 – (198) (1,407) 17 – 2,752 (2,752) – Plant and machinery HK$’000 2,752 (2,752) – – – – – – 2,886 (2,886) –	Total HK$’000 498,848 (273,255)
						225,593

						225,593 183 (23,880) (203,917) 2,388
						367

						501,506 (501,139)
						367

						Total HK$’000 501,506 (501,139)
						367

						367 2,851 (464) 7
						2,761

						504,523 (501,762)
						2,761

IIB – 35

APPENDIX II B

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

31 December 2012 At 1 January 2012: Cost Accumulated depreciation and impairment Net carrying amount At 1 January 2012, net of accumulated depreciation and impairment Additions Depreciation provided during the year Exchange realignment At 31 December 2012, net of accumulated depreciation and impairment At 31 December 2012: Cost Accumulated depreciation and impairment Net carrying amount	Buildings HK$’000 498,097 (498,097) – – – – – – – – –	Leasehold improvements HK$’000 1,896 (170) 1,726 1,726 1,574 – 14 3,314 3,485 (171) 3,314	Furniture, fixtures and equipment HK$’000 1,201 (546) 655 655 1,263 (408) (10) 1,500 2,546 (1,046) 1,500	Motor vehicles HK$’000 443 (63) 380 380 168 (196) 1 353 614 (261) 353	Plant and machinery HK$’000 2,886 (2,886) – – – – – – – – –	Total HK$’000 504,523 (501,762)
						2,761

						2,761 3,005 (604) 5
						5,167

						6,645 (1,478)
						5,167

The cost of buildings of HK$498,097,000 and the related accumulated depreciation and impairment provision of HK$498,097,000 were written off in the year ended 31 December 2012.

13. Investment properties under construction

At beginning of year Additions Transfer from prepaid land lease payments Exchange realignment At 31 December	PRC Co 1 Group As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – 327,072 400,081 319,978 57,052 742,576 7,094 – – – 15,957 3,243 327,072 400,081 1,145,900	PRC Co 1 Group As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – 327,072 400,081 319,978 57,052 742,576 7,094 – – – 15,957 3,243 327,072 400,081 1,145,900
		1,145,900

The PRC Co 1 Group’s investment properties under construction are held under a medium term lease and are situated in Mainland China.

IIB – 36

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Investment properties under construction included interest expense of HK$435,000, HK$30,508,000 and HK$120,294,000 for the years ended 31 December 2010, 2011 and 2012 that was incurred and capitalised.

As at the end of the Relevant Periods, the PRC Co 1 Group’s investment properties are under construction and measured at cost until such time as fair value can be determined reliably or construction is completed. The PRC Co 1 Group has concluded that the fair value of its investment properties under construction cannot be measured reliably as the properties are in the early stage of development at the end of the Relevant Periods and are therefore measured at cost in the statements of financial position.

14. Properties under development

Land in Mainland China held under medium term leases, at cost: At beginning of year Additions Transfer from prepaid land lease payments Exchange realignment At 31 December Development expenditure, at cost: At beginning of year Additions Exchange realignment At 31 December	PRC Co 1 Group As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – 432,005 453,083 422,351 – 721,746 9,654 – – – 21,078 3,671 432,005 453,083 1,178,500 8,233 21,610 103,518 13,082 80,855 436,161 295 1,053 840 21,610 103,518 540,519 453,615 556,601 1,719,019	PRC Co 1 Group As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – 432,005 453,083 422,351 – 721,746 9,654 – – – 21,078 3,671 432,005 453,083 1,178,500 8,233 21,610 103,518 13,082 80,855 436,161 295 1,053 840 21,610 103,518 540,519 453,615 556,601 1,719,019
		1,178,500
		103,518 436,161 840
		540,519
		1,719,019

The PRC Co 1 Group’s properties under development are held under a medium term lease and are situated in Mainland China.

IIB – 37

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Properties under development included interest expense of HK$594,000, HK$41,614,000 and HK$164,088,000 for the years ended 31 December 2010, 2011 and 2012 that was incurred and capitalised.

The PRC Co 1 Group had apartments, hotels and commercial service facilities under development as at 31 December 2012. Pursuant to an agreement entered into between the PRC Co 1 Group and 深圳市規劃和國土資源委源第一直屬管理局 (the First Administrative Bureau of the Urban Planning and Land Resources Commission of Shenzhen) (the “Land Bureau”) and a notice issued by the Land Bureau on 19 September 2012, the PRC Co 1 Group is required to pay additional land premium to the Land Bureau in respect of the sale of apartments, hotels and commercial service facilities. The additional land premium will be determined based on the market value of the properties at the time of sale (note 24(ii)).

15. Investment in a subsidiary

		As at 31 December
Investment in a subsidiary	2010	2011	2012
	HK$’000	HK$’000	HK$’000
Unlisted shares, at cost	480,457	503,898	507,982

The amount due to a subsidiary included in PRC Co 1’s current liabilities is unsecured, interest-free and has no fixed terms of repayment.

16. Prepayment, deposits and other receivables

Non-current assets Prepayment Current assets Deposits and other receivables	PRC Co 1 Group As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – – 338,842 299 4,273 2,344	PRC Co 1 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – – – 165 167 –	PRC Co 1 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – – – 165 167 –

			–

The prepayments as at 31 December 2012 included an amount of HK$338,842,000 which was paid to 深業泰然（集團）股份有限公司 (“Shum Yip Terra”), a fellow subsidiary of the PRC Co 1 Group, for the purchase of certain land and buildings (note 29( ii)).

None of the above assets is either past due or impaired. The financial assets included in the above balances relate to receivables for which there was no recent history of default.

IIB – 38

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

17. Cash and cash equivalents and restricted cash

Cash and bank balances Less: Restricted cash Cash and cash equivalents	PRC Co 1 Group As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 31,972 214,932 48,995 24,203 28,077 26,774 7,769 186,855 22,221	PRC Co 1 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 1,441 1,395 1,411 – – – 1,441 1,395 1,411	PRC Co 1 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 1,441 1,395 1,411 – – – 1,441 1,395 1,411
			1,411

The amount of HK$24,203,000, HK$28,077,000 and HK$26,774,000 as at 31 December 2010, 2011 and 2012, respectively, was deposited in an escrow account jointly operated by the PRC Co 1 Group and Shenzhen Electronics Group Co., Ltd. (“Shenzhen Electronics”)（深圳賽格集團有限公司）.

At 31 December 2010, 2011 and 2012, the cash and cash equivalents of the PRC Co 1 Group were all denominated in Renminbi (“RMB”) which is not freely convertible into other currencies. However, under Mainland China’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the PRC Co 1 Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the PRC Co 1 Group, and earn interest at the respective short term time deposit rates. The bank balances are deposited with creditworthy banks with no recent history of default.

18. Deposits received, other payables and accruals

Deposits received Other payables Accruals	PRC Co 1 Group As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 585 – 5,028 29,487 32,260 37,439 330 462 1,165 30,402 32,722 43,632	PRC Co 1 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – – – 170 58 59 – – – 170 58 59	PRC Co 1 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – – – 170 58 59 – – – 170 58 59
			59

IIB – 39

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

19. Deferred tax asset

The movements in deferred tax asset of the PRC Co 1 Group during the Relevant Periods are as follows:

At 1 January 2010 Deferred tax credited to the income statement during the year (note 10) Exchange realignment Gross deferred tax asset recognised in the statement of financial position at 31 December 2010 and 1 January 2011 Deferred tax credited to the income statement during the year (note 10) Exchange realignment Gross deferred tax asset recognised in the statement of financial position at 31 December 2011 and 1 January 2012 Deferred tax credited to the income statement during the year (note 10) Exchange realignment Gross deferred tax asset recognised in the statement of financial position at 31 December 2012	Losses available for offsetting against future taxable profits HK$’000 15,493 62,578 2,120
	80,191
	15,040 4,282
	99,513
	20,733 1,051
	121,297

The PRC Co 1 Group has tax losses of approximately HK$1,524,899,000, HK$1,354,543,000 and HK$1,043,643,000 as at 31 December 2010, 2011 and 2012, respectively, that can be carried forward for five years from the year in which the losses arose for offsetting against future taxable profits. Deferred tax assets have not been recognised in respect of these losses as there is insufficient convincing evidence that sufficient taxable profits will be available to allow the utilisation of the carryforward of tax losses before they expire in five years.

IIB – 40

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

20. Paid-up capital

		31 December
	2010	2011	2012
	HK$’000	HK$’000	HK$’000
Registered and fully paid:	284,767	284,767	284,767

At 31 December 2010, 2011 and 2012, the registered capital of PRC Co 1 was HK$284,767,000 which had been fully paid by the shareholders and verified by certified public accountants registered in the PRC.

21. Reserves

PRC Co 1

At 31 December 2009 and 1 January 2010 Loss for the year Other comprehensive income for the year Exchange differences on translation Total comprehensive income for the year At 31 December 2010 and 1 January 2011 Loss for the year Other comprehensive income for the year Exchange differences on translation Total comprehensive income for the year At 31 December 2011 and 1 January 2012 Loss for the year Other comprehensive income for the year Exchange differences on translation Total comprehensive income for the year At 31 December 2012	Paid-up capital HK$’000 284,767 – – – 284,767 – – – 284,767 – – – 284,767	Capital reserve HK$’000 969 – – – 969 – – – 969 – – – 969	Exchange Fluctuation reserve HK$’000 55,812 – 12,167 12,167 67,979 – 17,151 17,151 85,130 – 2,987 2,987 88,117	Accumulated losses HK$’000 (1,918) (166) – (166) (2,084) (148) – (148) (2,232) (40) – (40) (2,272)	Total deficit HK$’000 339,630 (166) 12,167
					12,001
					351,631

					(148) 17,151
					17,003
					368,634

					(40) 2,987
					2,947
					371,581

IIB – 41

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

22. Operating lease arrangements

The PRC Co 1 Group leases certain of its properties under operating lease arrangements. Leases for the properties are negotiated for terms ranging from one to two years.

As at the end of the Relevant Periods, the PRC Co 1 Group had total future minimum lease payments under non-cancellable operating leases falling due as follows:

Within one year In the second to fifth years, inclusive	As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – 296 4,007 – – 3,633 – 296 7,640	As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 – 296 4,007 – – 3,633 – 296 7,640
		7,640

23. Capital commitments

In addition to the operating lease commitments detailed in note 22 above, the PRC Co 1 Group had the following commitments at the end of the Relevant Periods:

		As at 31 December
	2010	2011	2012
	HK$’000	HK$’000	HK$’000
Contracted, but not provided for:
Investment properties under
construction and properties
under development	–	33,282	2,300,945

In addition, the PRC Co 1 Group is required to pay additional land premium in respect of the sale of apartments, hotels and commercial service facilities. The additional land premium will be determined based on the market value of the properties at the time of sale (notes 14 and 24(ii)).

IIB – 42

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

24. Contingent liabilities

(i) Pursuant to an agreement entered into by PRC Co 2, Yuanzhi Investment and Shenzhen Electronics on 30 March 2009, PRC Co 2 has transferred its assets of RMB189,240,000 and liabilities of RMB113,800,000 as at 31 December 2008 to Shenzhen Electronics at zero consideration. In addition, on 15 November 2010, Shenzhen Electronics has agreed to indemnify PRC Co 2 for the liabilities of RMB113,800,000 and any contingent liability of PRC Co 2 as at 31 December 2008.

(ii) As detailed in note 14, the PRC Co 1 Group is required to pay additional land premium to the Land Bureau in respect of the sale of apartments, hotels and commercial service facilities currently under construction on a parcel of land. The additional land premium will be determined based on the market value of the properties at the time of sale.

IIB – 43

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Pursuant to an acquisition agreement entered into between Shenzhen Investment Limited (“Shenzhen Investment”) and Shum Yip Holdings Limited (“Shum Yip Holdings”)（深業（集團）有限公司）on 17 January 2013 (the “Acquisition Agreement”), Shenzhen Investment has conditionally agreed to acquire the entire issued share capital of the Target Company from Shum Yip Holdings (the “Acquisition”).

(iii) Pursuant to an agreement entered into between PRC Co 1 and Shum Yip Group on 31 December 2012, Shum Yip Group has undertaken to pay an amount of RMB110,345,000 (equivalent to HK$137,258,000) due by PRC Co 1 to an independent third party on behalf of PRC Co 1. PRC Co 1 will pay the same amount to Shum Yip Group as consideration by 31 December 2013. Shum Yip Group has also agreed to indemnify PRC Co 1 for an amount by which the actual payment to the independent third party is higher than RMB110,345,000.

IIB – 44

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

25. Related party transactions

(a) In addition to the transactions disclosed elsewhere in the Financial Information, the PRC Co 1 Group had the following transactions with related parties during the Relevant Periods:

Notes Interest expenses to: The ultimate holding company (i) Fellow subsidiaries (i) Rental expenses to: An intermediate holding company (ii)	Year 2010 HK$’000 16,161 – 16,161 –	ended 31 December 2011 2012 HK$’000 HK$’000 135,234 344,683 2,563 6,377 137,797 351,060 – 3,640	ended 31 December 2011 2012 HK$’000 HK$’000 135,234 344,683 2,563 6,377 137,797 351,060 – 3,640
			351,060

			3,640

(i) Interest expenses were calculated for the amounts which the PRC Co 1 Group had borrowed from the ultimate holding company and fellow subsidiaries. The interest rates charged for the balances with fellow subsidiaries and the ultimate holding company were disclosed in notes 25(b)(ii) and 25(b)(iii).
(ii) The operating lease rental expenses charged by Shum Yip Holdings were mutually agreed between the PRC Co 1 Group and Shum Yip Holdings.

IIB – 45

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

(b) Outstanding balances with related parties:
(i) The amounts due from the related parties are unsecured, interest-free and have no fixed terms of repayment.

Pursuant to an agreement entered into between the PRC Co 1 Group and Shum Yip Group on 1 January 2013, the PRC Co 1 Group is entitled to receive interest at 9.9% per annum on the amount of RMB1,350,000,000 (equivalent to HK$1,679,265,000) due from Shum Yip Group with effect from 1 January 2013.

(ii) Included in the amounts due to fellow subsidiaries were amounts of HK$82,652,000 and HK$262,376,000 as at 31 December 2011 and 2012, respectively, which are unsecured, bear interest at the one-year benchmark lending rate of the People’s Bank of China (the “PBOC”) and repayable on demand. The remaining amounts due to fellow subsidiaries are unsecured, interest-free and have no fixed terms of repayment.
(iii) Included in the aggregate amount due to the ultimate holding company under current liabilities as at 31 December 2010 was an amount of HK$1,775,987,000 which is unsecured, bears interest at the one-year benchmark lending rate of the PBOC and repayable from 14 September 2011 to 22 December 2011. Included in the aggregate amount due to the ultimate holding company under current liabilities as at 31 December 2011 and 2012 was an amount of HK$1,980,611,000 and HK$2,115,773,000 as at 31 December 2011 and 2012, respectively, which is unsecured, bears interest at the one-year benchmark lending rate of the PBOC and repayable on demand. The remaining amount due to the ultimate holding company is unsecured, interest-free and has no fixed terms of repayment.

The aggregate amount due to the ultimate holding company under non– current liability of HK$1,854,058,000 and HK$3,728,232,000 as at 31 December 2011 and 2012, respectively, which bears interest at 9.9% per annum, is unsecured and repayable from 30 October 2014 to 9 September 2015.

IIB – 46

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

26. Financial instruments by category

The carrying amounts of each of the categories of financial instruments of the PRC Co 1 Group as at the end of the Relevant Periods are as follows:

Financial assets – loans and receivables Trade receivables Deposits and other receivables Due from fellow subsidiaries Due from the ultimate holding company Cash and cash equivalents Restricted cash Total Financial liabilities at amortised cost Deposits received and other payables Due to fellow subsidiaries Due to the ultimate holding company Total	As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 856 – – 299 4,273 2,344 – 8,637 1,585 – 1,665,765 1,679,265 7,769 186,855 22,221 24,203 28,077 26,774 33,127 1,893,607 1,732,189 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 30,072 32,260 42,467 10,506 101,160 264,193 1,905,808 3,970,826 5,981,263 1,946,386 4,104,246 6,287,923	As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 856 – – 299 4,273 2,344 – 8,637 1,585 – 1,665,765 1,679,265 7,769 186,855 22,221 24,203 28,077 26,774 33,127 1,893,607 1,732,189 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 30,072 32,260 42,467 10,506 101,160 264,193 1,905,808 3,970,826 5,981,263 1,946,386 4,104,246 6,287,923
		6,287,923

IIB – 47

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The carrying amounts of each of the categories of financial instruments of PRC Co 1 as at the end of the Relevant Periods are as follows:

Financial assets – loans and receivables Deposits and other receivables Cash and cash equivalents Financial liabilities at amortised cost Deposits received, other payables and accruals Due to a subsidiary Due to the immediate holding company	As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 165 167 – 1,441 1,395 1,411 1,606 1,562 1,411 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 170 58 59 651 680 520 129,821 136,157 137,258 130,642 136,895 137,837	As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 165 167 – 1,441 1,395 1,411 1,606 1,562 1,411 As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 170 58 59 651 680 520 129,821 136,157 137,258 130,642 136,895 137,837
		137,837

27. Fair value and fair value hierarchy

The carrying amounts and fair values of the PRC Co 1 Group’s financial instruments are as follows:

Financial assets

Trade receivables Deposits and other receivables Due from fellow subsidiaries Due from the ultimate holding company Cash and cash equivalents Restricted cash	Carrying amounts 2010 2011 2012 HK$’000 HK$’000 HK$’000 856 – – 299 4,273 2,344 – 8,637 1,585 – 1,679,265 1,679,265 7,769 186,855 22,221 24,203 28,077 26,774 33,127 1,893,607 1,732,189	2010 HK$’000 856 299 – – 7,769 24,203 33,127	Fair values 2011 HK$’000 – 4,273 8,637 1,665,765 186,855 28,077 1,893,607	2012 HK$’000 – 2,344 1,585 1,679,265 22,221 26,774
				1,732,189

IIB – 48

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Financial liabilities

Deposits received and other payables Due to fellow subsidiaries Due to the ultimate holding company	Carrying amounts 2010 2011 2012 HK$’000 HK$’000 HK$’000 30,072 32,260 42,467 10,506 101,160 264,193 1,905,808 3,970,826 5,981,263 1,946,386 4,104,246 6,287,923	2010 HK$’000 30,072 10,506 1,905,808 1,946,386	Fair values 2011 HK$’000 32,260 101,160 3,970,826 4,104,246	2012 HK$’000 42,467 264,193 5,981,263
				6,287,923

The carrying amounts and fair values of PRC Co 1’s financial instruments are as follows:

Financial assets

Deposits and other receivables Cash and cash equivalents	Carrying amounts 2010 2011 2012 HK$’000 HK$’000 HK$’000 165 167 – 1,441 1,395 1,411 1,606 1,562 1,411	2010 HK$’000 165 1,441 1,606	Fair values 2011 HK$’000 167 1,395 1,562	2012 HK$’000 – 1,411
				1,411

Financial liabilities

Deposits received, other payables and accruals Due to a subsidiary Due to the immediate holding company	Carrying amounts 2010 2011 2012 HK$’000 HK$’000 HK$’000 170 58 59 651 680 520 129,821 136,157 137,258 130,642 136,895 137,837	2010 HK$’000 170 651 129,821 130,642	Fair values 2011 HK$’000 58 680 136,157 136,895	2012 HK$’000 59 520 137,258
				137,837

IIB – 49

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The fair values of trade receivables, deposits and other receivables, amounts due from/ to fellow subsidiaries, an amount due from the ultimate holding company, cash and cash equivalents, restricted cash, deposits received and other payables and an amount due to the ultimate holding company under current liabilities approximate to their carrying amounts largely due to the short term maturities of these instruments.

28. Financial risk management objectives and policies

The PRC Co 1 Group’s principal financial instruments comprise amounts due from/ to fellow subsidiaries, amounts due from/to the ultimate holding company and cash and cash equivalents. The main purpose of these financial instruments is to raise finance for the PRC Co 1 Group’s operations.

The main risks arising from the PRC Co 1 Group’s financial instruments are interest rate risk and liquidity risk. The board of directors reviews and agrees policies for managing each of these risks and they are summarised below.

Interest rate risk

The PRC Co 1 Group’s exposure to the risk of changes in market interest rates relates primarily to the amounts due to fellow subsidiaries and an amount due to the ultimate holding company. The PRC Co 1 Group’s policy is to obtain the most favourable interest rate available. The effective interest rate and terms of repayment of the amounts due to fellow subsidiaries and the amount due to the ultimate holding company are set out in notes 25(b)(ii) and 25(b)(iii) to the Financial Information.

The PRC Co 1 Group has not used any interest swaps to hedge its exposure to interest rate risk. At the end of the Relevant Periods, approximately nil, 49% and 61% of the amounts due to fellow subsidiaries and the amount due to the ultimate holding company bore interest at fixed rates.

IIB – 50

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the PRC Co 1 Group’s loss before tax (through the impact on floating rate borrowings):

		Increase/
	Increase/	(decrease)
	(decrease)	in loss before
	in basis points	tax
		HK$’000
2010
RMB	+100	2,805
RMB	-100	(2,805)
2011
RMB	+100	9,414
RMB	-100	(9,414)
2012
RMB	+100	12,855
RMB	-100	(12,855)

Liquidity risk

Liquidity risk arises when the PRC Co 1 Group is unable to meet its current liabilities that fall due. The PRC Co 1 Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of short and long term bank loans. Through maintaining a reasonable proportion in its asset and liability structure, the PRC Co 1 Group is able to meet its ongoing financial needs.

IIB – 51

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The maturity profile of the PRC Co 1 Group’s financial liabilities as at the end of the Relevant Periods is as follows:

Deposits received and other payables Due to fellow subsidiaries Due to the ultimate holding company Total Deposits received and other payables Due to fellow subsidiaries Due to the ultimate holding company Total Deposits received and other payables Due to fellow subsidiaries Due to the ultimate holding company Total	On demand HK$’000 30,072 10,506 129,821 170,399 On demand HK$’000 32,260 101,160 2,116,768 2,250,188 On demand HK$’000 42,467 264,193 2,253,031 2,559,691	Less than 3 months HK$’000 – – 28,855 28,855 Less than 3 months HK$’000 – – – – Less than 3 months HK$’000 – – – –	As at 31 December 2010 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – 1,845,384 – 1,845,384 – As at 31 December 2011 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – 2,268,038 – 2,268,038 As at 31 December 2012 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – 4,501,794 – 4,501,794	Over 5 years HK$’000 – – – – Over 5 years HK$’000 – – – – Over 5 years HK$’000 – – – –	Total HK$’000 30,072 10,506 2,004,060
					2,044,638

					Total HK$’000 32,260 101,160 4,384,806
					4,518,226

					Total HK$’000 42,467 264,193 6,754,825
					7,061,485

IIB – 52

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

The maturity profile of PRC Co 1’s financial liabilities as at the end of the Relevant Periods is as follows:

Deposits received, other payables and accruals Due to a subsidiary Due to the immediate holding company Total Deposits received, other payables and accruals Due to a subsidiary Due to the immediate holding company Total Deposits received, other payables and accruals Due to a subsidiary Due to the immediate holding company Total	On demand HK$’000 170 651 129,821 130,642 On demand HK$’000 58 680 136,157 136,895 On demand HK$’000 59 520 137,258 137,837	Less than 3 months HK$’000 – – – – Less than 3 months HK$’000 – – – – Less than 3 months HK$’000 – – – –	As at 31 December 2010 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – – – – As at 31 December 2011 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – – – – As at 31 December 2012 3 to less than 12 months 1 to 5 years HK$’000 HK$’000 – – – – – – – –	Over 5 years HK$’000 – – – – Over 5 years HK$’000 – – – – Over 5 years HK$’000 – – – –	Total HK$’000 170 651 129,821
					130,642

					Total HK$’000 58 680 136,157
					136,895

					Total HK$’000 59 520 137,258
					137,837

IIB – 53

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

Capital management

The objectives of the PRC Co 1 Group’s capital management policy are to ensure the financing capabilities of the PRC Co 1 Group in running its operation on a going concern basis, to maintain an optimal capital structure, to reduce capital cost and to maximise the value of shareholders.

The PRC Co 1 Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the PRC Co 1 Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives or policies for managing capital during the Relevant Periods.

The PRC Co 1 Group monitors capital using a gearing ratio, which is net debts divided by total assets. Net debts are an amount due to the ultimate holding company less cash and cash equivalents and restricted cash. The gearing ratios as at the end of the Relevant Periods are as follows:

Due to the ultimate holding company (note 25(b)(iii)) Less: Cash and cash equivalents (17) Restricted cash (note 17) Net debts Total assets Gearing ratio	As at 31 December 2010 2011 2012 HK$’000 HK$’000 HK$’000 1,905,808 3,970,826 5,981,263 (7,769) (186,855) (22,221) (24,203) (28,077) (26,774) 1,873,836 3,755,894 5,932,268 894,372 2,952,730 5,062,414 210% 127% 117%

IIB – 54

ACCOUNTANTS’ REPORT OF THE PRC CO 1 GROUP

APPENDIX II B

29. Events after the relevant periods

(i) Pursuant to an agreement entered into between the PRC Co 1 Group and Shum Yip Group on 1 January 2013, the PRC Co 1 Group is entitled to receive interest at 9.9% per annum on the amount of RMB1,350,000,000 (equivalent to HK$1,679,265,000) due from Shum Yip Group with effect from 1 January 2013 (note 25(b)(i)).
( ii) Pursuant to the undertaking letter given by the PRC Co 1 Group to Shum Yip Terra dated 25 February 2013, the PRC Co 1 Group has agreed that the purchase of the land and buildings from Shum Yip Terra (note 16) shall be conditional upon the approval of the independent shareholders at the extraordinary general meeting of Shenzhen Investment , the intermediate holding company of Shum Yip Terra. In the event that the aforesaid shareholders’ approval is not obtained, the PRC Co 1 Group shall enter into the relevant termination agreement(s) and/or arrangements with Shum Yip Terra in connection with the termination of the purchase of the land and buildings to the effect that the purchase of the land and buildings will be terminated and will not be completed with the entire consideration of HK$338,842,000 being refunded to the PRC Co 1 Group by Shum Yip Terra.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the PRC Co 1 Group or its subsidiary in respect of any period subsequent to 31 December 2012.

Yours faithfully,

Certified Public Accountants

Hong Kong

IIB – 55

MANAGEMENT DISCUSSION AND ANALYSIS AND OTHER FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II C

TARGET GROUP

Business and financial overview

The Target Company, incorporated on 20 April 2011, is an investment holding company and is currently principally engaged in the holding of the entire equity interests in WFOE, which in turn, through PRC Co 1 and PRC Co 2, is interested in the Target Site.

The Target Group did not record any turnover during the period from 20 April 2011 (date of incorporation) to 31 December 2011 and for the year ended 31 December 2012 due to the start-up stage of the Target Group. The Target Group recorded losses during the period from 20 April 2011 (date of incorporation) to 31 December 2011 of approximately HK$20.0 million and for the year ended 31 December 2012 of approximately HK$64.4 million. The losses were due to finance costs of approximately HK$32.1 million and HK$66.7 million incurred by Target Group on the Shareholders’ Loan during the period from 20 April 2011 (date of incorporation) to 31 December 2011 and for the year ended 31 December 2012 respectively. Throughout the period under review, the Target Group was mainly conducting initial business developments of the Target Site.

Financial position

Total assets of the Target Group were approximately HK$6,598.1 million and HK$8,753.3 million as at 31 December 2011 and 2012 respectively which were mainly made up of (i) investment properties under construction (FY2011: HK$1,944.3 million and FY2012: HK$2,702.6 million); (ii) properties under development (FY2011: HK$2,657.9 million and FY2012: HK$3,837.3 million); (ii) amount due from the ultimate holding company (FY2011: HK$1,665.8 million and FY2012: HK$1,679.3 million). The increases in investment properties under construction and properties under development reflect the construction progress of the Target Site.

Total liabilities of the Target Group were approximately HK$4,104.8 million and HK$6,304.7 million as at 31 December 2011 and 2012 respectively which were mainly made up of the loans provided by the ultimate holding company, immediate holding company and fellow subsidiaries. The increases in the loans provided by the ultimate holding company, immediate holding company and fellow subsidiaries were mainly the additional financing required for the construction of the Target Site.

The net asset value of the Target Group was approximately HK$2,493.3 million and HK$2,448.6 million as at 31 December 2011 and 2012 respectively.

IIC – 1

MANAGEMENT DISCUSSION AND ANALYSIS AND OTHER FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II C

Liquidity and financial resources, gearing, charge on assets and capital commitments

As at 31 December 2011 and 2012, the Target Group had current ratios of approximately 202.2% and 216.8% respectively and gearing ratios (defined as total liabilities divided by total assets) were approximately 62.2% and 72.0% respectively.

During the period under review, the Target Group had utilized the loans provided by the ultimate holding company, immediate holding company and fellow subsidiaries to finance the development of the Target Site. Such loans were unsecured and carrying interest ranging from nil to 9.9% per annum. As at 31 December 2012, about 60% of the loans are repayable from 30 October 2014 to 9 September 2015 and the rest of the loans are repayable on demand or within a year.

Foreign exchange risk

The operations of the principal subsidiaries of Target Company, namely WFOE, PRC Co 1 and PRC Co 2 were principally in the PRC and the principal assets and liabilities of Target Group were denominated in Renminbi. The Target Group considered that it did not have any material exposure to fluctuations in exchange rate. Therefore, no hedging measures were taken.

Contingent liabilities

The Target Group is required to pay additional land premium to the Land Bureau in respect of the sale of apartments, hotels and commercial services facilities currently or to be constructed on the Target Site. Under the Acquisition Agreement, the Purchaser has agreed to pay the Vendor an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion of the Target Site is less than the Agreed Land Premium (if any); and the Vendor has agreed to indemnify and pay the Purchaser for an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion is higher than the Agreed Land Premium (if any). In addition, the Vendor has agreed to indemnify any amount of land premium payable to the PRC government by PRC Co2 for its holding and operating (including leasing) of the commercial services facilities, underground supporting commercial services facilities and hotel portions of the Target Site.

PRC Co 2 entered into a guarantee (i.e. Relevant Company Guarantee) on 28 June 2012 in respect of a bank borrowing of a fellow subsidiary in the amount of approximately RMB475 million. Pursuant to the Acquisition Agreement, the Vendor has undertaken to procure the full and valid release of the Relevant Company Guarantee before Completion.

Please refer to the paragraph headed “The indemnities” in the “Letter from the Board” of this circular for further details.

IIC – 2

MANAGEMENT DISCUSSION AND ANALYSIS AND OTHER FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II C

Significant investments, material acquisitions and disposals of subsidiaries and associated companies

During the period from 20 April 201 0 (date of incorporation) to 31 December 201 0 and the year ended 31 December 2011 , the significant investments held by the Target Group were the Target Site and the prepayment made for the Property.

Save for the acquisition of the Property on 31 July 2012 , there were no material acquisitions and disposals of subsidiaries and associated companies by the Target Company or its subsidiaries during the period from 20 April 2011 (date of incorporation) to 31 December 2011 and for the year ended 31 December 2012.

Employees and remuneration policies

As at 31 December 2011 and 2012, the Target Group had 27 and 151 employees respectively, who were remunerated according to nature of the job and market trend, as well as individual qualifications and performance. Total staff costs of the Target Group for the year ended 31 December 2011 and 2012 were HK$ 6.3 million and HK$ 46.8 million respectively.

PRC CO 1 GROUP

Business and financial overview

PRC Co 1’s turnover was HK$13.5 million, nil and nil for the three years ended 31 December 2012. Before the old buildings on the Target Site were demolished at the end of 2010, they were held as investment property generating rental income to PRC Co 1. The PRC Co 1 recorded losses during the three years ended 31 December 2012 of approximately HK$188.8 million, HK$47.3 million and HK$64.4 million respectively. The loss for the year ended 31 December 2010 was mainly due to the impairment loss of approximately HK$203.9 million for unused factory properties, the legal titles of which have been wrote off on April 2011.

The losses were due to finance costs of approximately HK$65.7 million and HK$66.7 million incurred by PRC Co 1 on the Shareholders’ Loan for the two years ended 31 December 2012 respectively.

IIC – 3

MANAGEMENT DISCUSSION AND ANALYSIS AND OTHER FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II C

Financial position

Total assets of the PRC Co 1 were approximately HK$894. 4 million, HK$2,952.6 million and HK$5,062.4 million as at 31 December 2010, 2011 and 2012 respectively which were mainly made up of (i) investment properties under construction (FY2010: HK$327.1 million, FY2011: HK$400.1 million and FY2012: HK$1,145.9 million); (ii) properties under development (FY2010: HK$453.6 million, FY2011: HK$556.6 million and FY2012: HK$1,719.0 million); and (iii) amount due from the ultimate holding company (FY2010: nil, FY2011: HK$1,665.8 million and FY2012: HK$1,679.3 million). The increases in investment properties under construction and properties under development during the two years ended 31 December 2012 reflect the development progress of the Target Site.

Total liabilities of the PRC Co 1 were approximately HK$1,946.7 million, HK$4,104.7 million and HK$6,289.1 million as at 31 December 2010, 2011 and 2012 respectively which were mainly made up of the loans provided by the ultimate holding company, immediate holding company and fellow subsidiaries. The increases in the loans provided by the ultimate holding company, immediate holding company and fellow subsidiaries were mainly the additional financing required for the construction of the Target Site.

The net liabilities of the PRC Co 1 were approximately HK$1,052.3 million, HK$1,152.1 million and HK$1,226.7 million as at 31 December 2010, 2011 and 2012 respectively.

Liquidity and financial resources, gearing, charge on assets and capital commitments

As at 31 December 2010, 2011 and 2012, the PRC Co 1 had current ratios of approximately 25.0%, 108.9% and 134.8% respectively and gearing ratios (defined as total liabilities divided by total assets) were approximately 217.7%, 139.0% and 124.2% respectively.

During the period under review, the PRC Co 1 had utilized the loans provided by the ultimate holding company, immediate holding company and fellow subsidiaries to finance the development of the Target Site. Such loans were unsecured and carrying interest ranging from nil to 9.9% per annum. As at 31 December 2012, about 60% of the loans are repayable from 30 October 2014 to 9 September 2015 and the rest of the loans are repayable on demand or within a year.

Foreign exchange risk

PRC Co 1 and its subsidiary were principally in the PRC and the principal assets and liabilities of PRC Co 1 were denominated in Renminbi. The PRC Co 1 considered that it did not have any material exposure to fluctuations in exchange rate. Therefore, no hedging measures were taken.

IIC – 4

MANAGEMENT DISCUSSION AND ANALYSIS AND OTHER FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II C

Contingent liabilities

The PRC Co 1 is required to pay additional land premium to the Land Bureau in respect of the sale of apartments, hotels and commercial services facilities currently or to be constructed on the Target Site. Under the Acquisition Agreement, the Purchaser has agreed to pay the Vendor an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion of the Target Site is less than the Agreed Land Premium (if any); and the Vendor has agreed to indemnify and pay the Purchaser for an amount by which the actual land premium payable to the PRC government by PRC Co 2 in respect of the sale of the apartment portion is higher than the Agreed Land Premium (if any). In addition, the Vendor has agreed to indemnify any amount of land premium payable to the PRC government by PRC Co2 for its holding and operating (including leasing) of the commercial services facilities, underground supporting commercial services facilities and hotel portions of the Target Site.

Please refer to the paragraph headed “The indemnities” in the “Letter from the Board” of this circular for further details.

Significant investments, material acquisitions and disposals of subsidiaries and associated companies

During the three years ended 31 December 2010, 2011 and 2012, the significant investments held by the PRC Co 1 were the Target Site and the prepayment made for the Property.

Save for the proposed acquisition of the Property pursuant to the Property Disposal Agreements dated 31 July 2012 as stated in the section headed “The Property Disposal and its implication on the Acquisition” in the “Letter from the Board” of this circular, there were no material acquisitions and disposals of subsidiaries and associated companies by the Target Company or its subsidiaries during the three years ended 31 December 2010, 2011 and 2012.

Employees and remuneration policies

As at 31 December 2010, 2011 and 2012, the PRC Co 1 and its subsidiary had 18 , 27 and 151 employees respectively, who were remunerated according to nature of the job and market trend, as well as individual qualifications and performance. Total staff costs of the PRC Co 1 Group for the year ended 31 December 2010, 2011 and 2012 were HK$ 8.0 million, HK$ 7.4 million and HK$ 46.9 million respectively.

IIC – 5

FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

1. UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is a summary of the unaudited pro forma statement of assets and liabilities of the Enlarged Group (the “Unaudited Pro Forma Financial Information”) for the purpose of illustration only and does not form part of the accountants’ reports prepared by the reporting accountants of the Company as set out in Appendix IIA and IIB to the Circular.

The Unaudited Pro Forma Financial Information may not give a true picture of the financial position of the Enlarged Group had the Acquisition been completed on 31 December 2012 because of its hypothetical nature.

The Unaudited Pro Forma Financial Information is prepared based on the audited consolidated statement of financial position of the Group as at 31 December 2012 extracted from the 2012 annual results announcement of the Company for the year ended 31 December 2012 dated 25 March 2013 and the audited financial information of the Target Group as at 31 December 2012 extracted from the accountants’ report on the Target Group as set out in Appendix IIA to the Circular as if the Acquisition had been completed on 31 December 2012.

NON-CURRENT ASSETS Property, plant and equipment Intangible assets Prepaid land lease payments Goodwill Investment properties Investments in associates Investments in jointly-controlled entities Available-for-sale investments Other long term assets Prepayments Deferred tax assets Pledged deposits Total non-current assets	The Group as at 31 December 2012 HK$’000 2,414,252 75,986 49,045 322,744 9,210,339 5,223,517 118,124 52,471 1,377,822 – 528,258 137,323 19,509,881	The Target Group as at 31 December 2012 HK$’000 5,167 – – – 2,702,641 – – – – 338,842 121,297 – 3,167,947	Pro forma adjustments HK$’000 Notes – – – 653,029 (iii) – – – – – (338,842) (iv) – – 314,187	Pro forma Enlarged Group HK$’000 2,419,419 75,986 49,045 975,773 11,912,980 5,223,517 118,124 52,471 1,377,822 – 649,555 137,323
				22,992,015

III – 1

APPENDIX III

FINANCIAL INFORMATION OF THE ENLARGED GROUP

CURRENT ASSETS Inventories Completed properties held for sale Properties under development Trade receivables Prepayments, deposits and other receivables Equity investments at fair value through profit or loss Due from fellow subsidiaries Due from the ultimate holding company Pledged deposits Restricted cash Cash and cash equivalents Total current assets CURRENT LIABILITIES Interest-bearing bank loans and other borrowings Trade payables Deposits received, other payables and accruals Due to the immediate holding company Due to fellow subsidiaries Due to the ultimate holding company Tax payable Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES	The Group as at 31 December 2012 HK$’000 109,107 7,094,670 15,723,873 254,857 4,520,838 10,296 – – 129,905 304,528 6,734,052 34,882,126 8,974,238 703,486 8,283,656 14,158 – 64,579 1,978,905 20,019,022 14,863,104 34,372,985	The Target Group as at 31 December 2012 HK$’000 – – 3,837,300 – 2,344 – 1,585 1,679,265 – 26,774 38,094 5,585,362 – – 43,632 15,590 264,193 2,253,059 – 2,576,474 3,008,888 6,176,835	Pro forma adjustments HK$’000 Notes – – 4,495,435 (iii) – – – (1,585) (iv) – – – – 4,493,850 – – (340,427) (iv) – – – – (340,427) 4,834,277 5,148,464	Pro forma Enlarged Group HK$’000 109,107 7,094,670 24,056,608 254,857 4,523,182 10,296 – 1,679,265 129,905 331,302 6,772,146
				44,961,338

				8,974,238 703,486 7,986,861 29,748 264,193.0 2,317,638 1,978,905
				22,255,069
				22,706,269
				45,698,284

III – 2

APPENDIX III

FINANCIAL INFORMATION OF THE ENLARGED GROUP

NON-CURRENT LIABILITIES Interest-bearing bank loans and other borrowings Due to the ultimate holding company Deferred tax liabilities Total non-current liabilities Net assets EQUITY Equity attributable to owners of the parent Share capital Reserves Proposed dividends Non-controlling interests Total equity	The Group as at 31 December 2012 HK$’000 13,236,124 – 1,627,018 14,863,142 19,509,843 186,451 16,951,253 410,192 17,547,896 1,961,947 19,509,843	The Target Group as at 31 December 2012 HK$’000 – 3,728,232 – 3,728,232 2,448,603 – 2,448,603 – 2,448,603 - 2,448,603	Pro forma adjustments HK$’000 Notes – – 2,426,167 (iii) 2,426,167 2,722,297 70,506 (i) 2,651,791 (i) & (iii) – 2,722,297 - 2,722,297	Pro forma Enlarged Group HK$’000 13,236,124 3,728,232 4,053,185
				21,017,541
				24,680,743
				256,957 22,051,647 410,192
				22,718,796
				1,961,947
				24,680,743

Notes:

(i) The Acquisition is assumed to have been completed on 31 December 2012 and thus the issuance of 1,410,117,262 new Shares by the Company to Shum Yip Holdings and the relevant surplus are included as a pro forma adjustment. In the opinion of the Directors and as announced, the Acquisition will be settled by allotting and issuing to Shum Yip Holdings of 1,410,117,262 new Shares of HK$0.05 each by the Company at an issue price of HK$3.667 per Consideration Share, which is equivalent to a total consideration of approximately HK$5,170.9 million.
(ii) As the Group previously elected to adopt the purchase method in the acquisitions of other subsidiaries under common control, to be consistent, the Group will account for the Acquisition in accordance HKFRS 3 (Revised). For the purpose of preparing the Unaudited Pro Forma Financial Information after the Acquisition, the purchase price allocation is based on the Directors’ estimates on the fair value of the identifiable assets and liabilities of the Target Group as at 31 December 2012 and with reference to the professional valuation carried out on 31 December 2012 (as set out in Appendix V) by Asset Appraisal Limited, an independent valuer, on the fair value of the properties under development held by the Target Group.

III – 3

FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

(iii) The pro forma adjustments reflect: (a) elimination of the Group’s entire equity interests in the Target Group after the Acquisition; and (b) the recognition of the estimated goodwill* arising from the Acquisition as calculated below:

Net assets value of the Target Group as at 31 December 2012 Fair value adjustment on properties under development Deferred tax liabilities arising from fair value adjustment on properties under development (relating to estimated PRC corporate income tax and land appreciation tax) Total identifiable net assets at fair value Goodwill arising from the Acquisition Satisfied by: Consideration Shares	HK$’000 2,448,603 4,495,435 (2,426,167)
	4,517,871
	653,029 5,170,900

The fair value adjustment of HK$4,495,435,000 and estimated goodwill of HK$653,029,000 have not taken into account of any fair value adjustment of investment properties under construction of the Target Group for the purpose of the preparation of the Unaudited Pro Forma Financial Information. The Directors have concluded that the fair value of the investment properties under construction as at 31 December 2012 cannot be measured reliably as the properties are in the early stage of development as at 31 December 2012. Therefore, the investment properties under construction continue to be measured at cost for the purpose of the preparation of the Unaudited Pro Forma Financial Information.

An impairment testing conducted in accordance with Hong Kong Accounting Standard 36 “Impairment of Assets” (“HKAS 36”) issued by the Hong Kong Institute of Certified Public Accountants involves the determination of the recoverable amount of the asset which is the higher of its fair value less costs to sell and its value in use. The recoverable amount of the Target Group is determined based on a value-in-use calculation using cash flow projections based on financial budgets covering a five-year period approved by the Directors. The key assumptions used in the value-in-use calculations include growth rates and discount rates which are based on management’s best estimates. For the purpose of the preparation of the Unaudited Pro Forma Financial Information, the Directors have estimated the recoverable amount of the Target Group, and assessed that no adjustment for impairment was required for the estimated goodwill arising from the Acquisition.

The actual fair value amounts of the identifiable assets and liabilities of the Target Group and the Consideration Shares at the Completion Date may be substantially different from that used in the preparation of the Unaudited Pro Forma Financial Information. Hence, the actual purchase price allocation may result in different amounts as shown in the Unaudited Pro Forma Financial Information.

(iv) The pro forma adjustment reflects the elimination of the amounts due from/to subsidiaries of the Company by the Target Group as at 31 December 2012.

III – 4

APPENDIX III FINANCIAL INFORMATION OF THE ENLARGED GROUP

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

The following is the text of a report, prepared for the purpose of incorporation in this circular, received from Ernst & Young.

22/F, CITIC Tower 1 Tim Mei Avenue Central, Hong Kong

28 March 2013

The Directors

Shenzhen Investment Limited

Dear Sirs,

We report on the unaudited pro forma financial information (the “Unaudited Pro Forma Financial Information”) of Shenzhen Investment Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), and Shenzhen Silicon Valley Hi-tech Investment Company Limited and its subsidiaries (the “ Target Group”) (together with the Group hereafter collectively referred to as the “Enlarged Group”), which has been prepared by the directors of the Company (the “Directors”) for illustrative purposes only, to provide information about how the acquisition of the Target Group by the Company might have affected the financial information presented, for inclusion in Appendix III to the circular of the Company dated 28 March 2013 (the “Circular”). The basis of preparation of the Unaudited Pro Forma Financial Information is set out in Appendix III to the Circular.

Respective Responsibilities of the Directors and Reporting Accountants

It is the responsibility solely of the Directors to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

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APPENDIX III

FINANCIAL INFORMATION OF THE ENLARGED GROUP

It is our responsibility to form an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

Basis of Opinion

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

Our work did not constitute an audit or a review made in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA, and accordingly, we do not express any such audit or review assurance on the Unaudited Pro Forma 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 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 4.29(1) of the Listing Rules.

Our work has not been carried out in accordance with the auditing standards or other standards and practices generally accepted in the United States of America or auditing standards of the Public Company Accounting Oversight Board (United States) and accordingly should not be relied upon as if it had been carried out in accordance with those standards.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgements and assumptions of the Directors, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Enlarged Group as at 31 December 2012 or any future dates.

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FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors 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 4.29(1) of the Listing Rules.

Yours faithfully, Certified Public Accountants Hong Kong

III – 7

FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

3. WORKING CAPITAL

The Directors are of the opinion that, in the absence of unforeseeable circumstances, after taking into account the Enlarged Group’s business prospects, internal resources and available credit facilities, the Enlarged Group has sufficient working capital for its present requirements for the next twelve months from the date of this circular.

4. INDEBTEDNESS

As at the close of business on 31 January 2013, being the latest practicable date for the purpose of th is statement of indebtedness prior to printing of this circular, the Enlarged Group had total outstanding interest-bearing bank loans and other borrowings of approximately HK$ 22,416.0 million, comprising secured current bank loans of approximately HK$ 1,045.9 million, unsecured current bank loans of approximately HK$ 4,158.8 million, unsecured current other loans of approximately HK$ 249.4 million, unsecured current portion of long-term bank loans of approximately HK$ 2,881.3 million, unsecured current portion of long-term other loans of approximately HK$773.1 million, secured non-current bank loans of approximately HK$ 2,830.3 million, unsecured non-current bank loans of approximately HK$ 9,379.8 million and secured noncurrent other loans of approximately HK$ 1,097.4 million.

As at 31 January 2013, certain pledged bank deposits, fixed assets, properties under development , investment properties and completed properties for sales of the Enlarged Group of approximately HK$ 143.2 million, HK$ 1,126.5 million, HK$ 1,502.6 million , HK$ 4,239.2 million and HK$45.5 million, respectively, had been pledged to banks to secure credit facilities granted to the Enlarged Group .

As at 31 January 2013, the Enlarged Group had given guarantees to a maximum extent of approximately HK$ 1,116.7 million to banks for housing loans extended by the banks to the purchasers of the Enlarged Group’s properties.

Save as aforesaid or otherwise disclosed herein, as at the close of business on 31 January 2013, the Enlarged Group did not have any loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, hire purchases commitments, guarantees or other material contingent liabilities.

5. MATERIAL CHANGES

As at the Latest Practicable Date, save for the Acquisition, there had been no material changes in the financial or trading position or outlook of the Group since 31 December 201 2 (being the date to which the latest published audited consolidated financial statements of the Company were made up).

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FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

6. FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

Business outlook

Industry prospect

In 2013, the domestic economy of the PRC has shown a steady recovery trend, however, it still faces challenges from structural adjustment of the industries and deterioration of environmental resources. At the end of last year, the central government firmly indicated the fundamental direction of implementing a proactive fiscal policy and a prudent monetary policy. It also reiterated that the real estate control policies would remain intact. In the beginning of this year, the launch of the details of “國五條 (StateFive Policies)” further demonstrated the determination of the central government’s control over the Chinese real estate market. We believe that the direction and trend of the central government’s control over the real estate market will remain unchanged, and that the differences of policies, as well as the austerity policies in suppressing the investment and speculative housing demand will continue. 2013 will be a year of consolidating the effects of the intervention and maintaining the stability and rational development of the real estate market.

According to the relevant policies, the current real estate market structure is becoming rational with rigid demand and living-improvement demand being the main purchasing power for the market. As the first-tier cities have strong economic vitalities, large population and solid consumption capacities, their momentum for market recovery and sustainability are relatively higher. The market purchasing capacities of most third and fourth-tier cities are limited, and with relatively larger supply, the market pressure they face is still tremendous. We believe that with the gradual shift to equilibrium in supply and demand, the real estate industry will still maintain stable development in 2013. The Group will closely monitor the economic environment and industry policy development; cope with the market changes on a timely basis; and adjust its operating strategies to develop progressively and steadily.

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FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

Shenzhen

In Shenzhen, as the long-accumulated rigid demand was released rationally, the transaction volume of new housing in 2012 has reached approximately 3.67 million square meters, representing an increase of 35% over the same period of last year. As one of the first-tier cities in the PRC with a permanent population of over 10 million, Shenzhen has huge economic development potential and a leading edge in terms of industries such as port logistics, high-tech, finance and internet. In recent years, Shenzhen has gradually increased its investments in the construction of infrastructural facilities in education, healthcare and environmental protection, and has improved the quality of city life. The population of Shenzhen mainly comprises immigrants who are at the age of about 30 years old in average, and are full of passion and vitality. The development of 前海 (Qianhai) in Shenzhen will also bring about a new round of momentum for its economic development, especially for the development of financial industry, logistics industry and information industry. The Group is fully confident about the long term development of real estate market in Shenzhen and will continue its strategic focus in Shenzhen.

Accelerating strategic transformation and upgrade

The Group will continue to facilitate its strategic transformation through quality and sustainable growth as well as the overall value enhancement of the Company to achieve corporate value enhancement and core competency improvement. Through optimizing its land reserve structure, the Group will focus its resources in the development of Shenzhen. We will gradually transit from the “development and sale” model to a “development, sale and holding for operation” model. We will gradually build up three professional platforms including industrial properties, commercial properties and residential properties and also optimize our assets/liabilities and financing structures to safeguard the security of funds and business growth.

Asset Injection

On 17 January 2013, the Group entered into a conditional acquisition agreement with its parent company, Shum Yip Holdings, to acquire the 100% equity interests of Kezhigu （科之谷）project (located at 福田區 (Futian District), Shenzhen city) at a consideration of RMB4.15 billion. Upon completion of such acquisition, the Group will issue and allot approximately 1,410 million new shares of the Company to Shum Yip Holdings at the price of HK$3.667 per share to satisfy the consideration of the transaction. The fair value of the consideration will be determined on the completion date of the acquisition. Please refer to the Company’s announcement dated 22 January 2013 for more details. This transaction unveils the start of asset injection from our parent company.

III – 10

APPENDIX III

FINANCIAL INFORMATION OF THE ENLARGED GROUP

Surrounded by three main parks, namely Lian Hua Shan Park, Bijiashan Park and Central Park, the Kezhigu（科之谷）project is located at Futian district with beautiful sceneries. It is only five minutes’ drive to CBD of Futian with perfect surrounding transportation networks and comprehensive transportation facilities. The Kezhigu（科之谷） project occupies an area of 121,225.1 square meters, with a planned total gross floor area of 788,910 square meters, which includes high-end apartments, Grade A office buildings, office buildings for small and medium enterprises, high-end shopping centers and a five-star hotel. The project positions itself to be the base of high-end innovative headquarters, recreational and leisure centers, and will become the new landmark of Shenzhen.

The construction of the northern zone apartment portion of Kezhigu（科之谷） project has already commenced and is scheduled to realize pre-sale during the year, and will complete in 2014. The pre-sale target for the year is RMB2.4 billion which will bring significant growth to the sales of the Group.

The acquisition of Kezhigu（科之谷）is the first step of asset injection. After completion of this transaction, the total gross floor area of the Group’s land reserves will reach 11.20 million square meters with attributable gross floor area of 10.12 million square meters, of which, the proportion of land reserves in Shenzhen will increase from its existing approximately 9% to 16%. The proportion of Shum Yip Holdings’ equity interests in the Group will increase from its existing 44.4% to 59.6% and the net gearing ratio of the Group will decrease significantly.

Shum Yip Holdings has a land reserve with gross floor area of approximately 2 million square meters, and these are potential resources to be injected into the Group. We believe that asset injection will improve the land reserve quality of the Group and its future profitability rapidly and thus provide a huge momentum of continuous growth for the Company. With the further implementation of the Group’s strategies, in the next 3 to 4 years, the Group will have real estate projects in Shenzhen with gross floor area of over 4 million square meters. The Group will continue to increase its project reserves in Shenzhen through asset injection and other means, enhance the capacity of the construction and operation of its residential and commercial properties, and strive to become a leading developer and commercial property operator in Shenzhen.

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FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

Real Estate Operation

The Group aims at achieving a saleable property area of 1.58 million square meters with saleable property value reaching approximately RMB23.3 billion in 2013, representing an increase of approximately 55% over last year. As the asset injection projects will realize contracted sales this year, the contracted sales of the Group will achieve significant growth with a sales target of about RMB9.0 billion in 2013, representing an increase of 48% as compared with the actual contracted sales last year. The major sales projects include Terra Building（泰然大廈）, the Kezhigu Northern Zone Apartments（科之谷北區公寓）, Qingshuihe Auto Logistic Park（清水河汽車物流園）, Noble Times（東晟時代）, Shum Yip Royal Garden（深業御園）, Shum Yip City（深業城）, Yundonghai（雲東海）, Saina Bay（塞納灣）, Euro-view Garden（歐景麗苑）, Wanlin Lake（萬林湖）, Nanhu Rose Bay（南湖玫瑰灣）and Rui Cheng（睿城）. The Group will continue to grasp the market opportunities and formulate rational sales strategies to strive for realizing its sales target.

In order to implement its sustainable development and steadily promote the development of projects, the Group plans to construct 24 new projects with gross floor area exceeding 2.00 million square meters in 2013. The Group will retune its project development progress according to project sales conditions and market environment to ensure sufficient saleable volume for this year and next year.

Land reserves

The Group will maintain its existing scale of land reserves and optimize the land reserve structure optimization based on a proactive and prudent principles. The Group will continue to focus on its development in Shenzhen and complement its quality land resources. At the same time, the Group will seek for opportunities according to market conditions and adjust the land reserve structure to improve its land bank quality.

Re-development

The Group has 6 urban re-development projects in Shenzhen, including the Kezhigu （科之谷）project, which are locating at Lian Hua Shan in Futian（福田蓮花山）, Sungang, Qingshuihe, Shangbu, Chegongmiao and Guanlan respectively, with expected total planned gross floor area of approximately 2.40 million square meters. Such projects are important resources of the Group in focusing on the development in Shenzhen. By leveraging on the strength of its state-owned controlling shareholder, the Group will speed up the progress in re-development project planning application, demolition and land usage procedures registration to promote the projects to enter into their construction and sales phases as quickly as possible.

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FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

Financial strategy

The Group will adhere to the consistent principle of maintaining healthy financial position and actively explore various financing channels besides commercial loans. It will endeavour to reduce financing costs to provide concrete protection of financial resources for its business development.

Corporate prospect

In 2013, the Group will grasp market opportunities and ensure a stable operation. It will make full use of its resources advantages and optimize its regional layout to sustain a steady growth. The Board is in full confidence that the Group will achieve a solid growth in the future.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

The following is the text of a letter, summary of valuation and valuation certificate, prepared for the purpose of incorporation in this circular received from Asset Appraisal Limited, an independent valuer, in connection with its valuation as at 31 December 2012 of the property interests held by the Group.

��

Rm 901, 9/F., On Hong Commercial Building 145 Hennessy Road, Wanchai, Hong Kong ��145 � ��9 ��901 � Tel : (852) 2529 9448 Fax : (852) 3521 9591

28 March 2013

The Directors

Shenzhen Investment Ltd.

8th Floor, New East Ocean Centre No.9 Science Museum Road Tsimshatsui East, Kowloon Hong Kong

Dear Sirs,

Re: Valuation of property interests situated in the People’s Republic of China and in Hong Kong

In accordance with the instructions from Shenzhen Investment Ltd . (the “ Company ”) to value the property interests (the “ Properties ”) of the Company or its subsidiaries (the Company and its subsidiaries altogether referred to as the “ Group ”) in the People’s Republic of China (“ PRC ”) and in Hong Kong, we confirm that we have inspected the Properties, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the Properties as at 31 December 2012 (the “ date of valuation ”).

BASIS OF VALUATION

Our valuation of the Properties represents the market value which we would define as intended to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

TITLESHIP

We have been provided with copies of legal documents regarding the Properties. We have also relied upon the legal opinion provided by the PRC legal advisers, namely King & Wood Mallesons (the “ PRC Legal Opinion ”), to the Company on the relevant laws and regulations in the PRC, on the nature of the owners’ land use rights or leasehold interests in the Properties and the existence of any encumbrances that would affect their ownership. Its material content has been summarized in the valuation certificate attached herewith.

VALUATION METHODOLOGY

The Properties have been valued by the comparison method where comparison was based on price information of comparable properties. Comparable properties of similar size, character and location have been analysed and carefully selected of each property in order to arrive at a fair comparison of capital values.

Due to the non-assignable nature of Property numbered 165 of which the land use rights have been granted to the Group and are restricted for its self use, we have adopted the “Depreciated Replacement Cost” approach to measure its capital value. It is a method of using the replacement costs of the building and site works of the properties as prevailing on the valuation date to arrive at the value to the business in occupation of the properties as existing. This method of valuation requires an estimate of the new replacement cost of the buildings and other site works, from which deductions are then made to allow for age, condition, functional obsolescence, etc. The original acquisition costs (if any) has been adopted to reflect the capital value of the land portion of the concerned property.

The Groups’ interests in those Properties rented by it have no commercial value due either to the short-term nature of the leases or the prohibition against assignment or sub-letting or otherwise due to the lack of substantial profit rents.

ASSUMPTIONS

With the exception of those properties which are non-transferrable, our valuation has been made on the assumption that the owner sells the Properties on the market without the benefit of deferred terms contracts, leaseback, joint ventures, management agreements or any similar arrangement which would serve to affect the value of the Properties.

For Properties are held by the owners by means of long term land use rights granted by the PRC Government (the “ Government ”), we have assumed that the owners have free and uninterrupted rights to use the Properties for the whole of the respective unexpired terms of the land use rights.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Unless stated as otherwise, we have assumed that the owners of the Properties have the right to sell, mortgage, charge or otherwise dispose of the Properties to any person without payment of any additional premium or substantial fee to government authorities.

Other special assumptions for our valuation (if any) would be stated out in the footnotes of the valuation certificate attached herewith.

LIMITING CONDITIONS

No allowance has been made in our report for any charges, mortgages or amounts owing on the Properties 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.

We have relied to a very considerable extent on the information given by the Company or the Group and have accepted advice given to us on such matters as tenure, planning approvals, statutory notices, easements, particulars of occupancy, tenancy and all other relevant matters. We have not carried out detailed site measurements to verify the correctness of the site and floor areas in respect of the Properties but have assumed that the floor areas shown on the documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations.

The Properties was last inspected by Tse Wai Leung, Or Kin Kwan Stanley and Liu Ho Chi between on 17 December 2012 and 24 January 2013. We have inspected the exterior and, where possible, the interior of the Properties. However, no structure\al survey has been made for them. In the course of our inspection, we did not note any apparent defects. We are not, however, able to report whether the buildings and structures inspected by us are free of rot, infestation or any structural defect. No test was carried out on any of the building services and equipment.

We must point out that we have not carried out site investigations to determine the suitability of ground conditions or the services for any property development of the Properties. Our valuation is on the basis that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during construction period.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Company. We have also sought confirmation from the Company that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and we have no reason to suspect that any material information has been withheld.

IV – 3

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

For the Properties located in the PRC under Group I to Group V, we have been advised by the Group that the potential tax liabilities include Land Appreciation Tax at progressive tax rates from 30% to 60%, Business Tax at 5% of sales amount, related surcharge at 11% of Business Tax, and Income Tax at 25% on profit before tax. The exact amount of tax payable upon realization of the relevant properties in the PRC will be subject to the formal tax advice issued by the relevant tax authorities at the time of disposal of relevant properties upon presentation of the relevant transaction documents. For the Properties under Group II to Group V (being properties under development, held for investment and held for self occupation), the likelihood of the relevant tax liability (arising from the disposal of the Properties at consideration equal to the valuation amount) being crystallized is remote as the Group has no detail planning for the disposal of such properties yet.

For Properties held for sale under Group I, as advised by the Group, they will be sold in due course. Therefore, the likelihood of the relevant tax liability being crystallized is high.

In valuing the Properties, we have complied with all the requirements contained in Rule 11 of the Codes on Takeovers and Mergers and Share Repurchases of the Securities and Futures Commission; Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited; the HKIS Valuation Standards (2012 Edition) published by The Hong Kong Institute of Surveyors.

All monetary sums stated in this report are in Renminbi (RMB).

Our summary of valuation and valuation certificates are attached herewith.

Yours faithfully, for and on behalf of

Asset Appraisal Limited

Tse Wai Leung

MFin BSc MRICS MHKIS RPS(GP)

Director

Tse Wai Leung is a member of the Royal Institution of Chartered Surveyors, the Hong Kong Institute of Surveyors and a Registered Professional Surveyor in General Practice. He is on the list of Property Valuers for Undertaking Valuations for Incorporation or Reference in Listing Particulars and Circulars and Valuations in Connection with Takeovers and Mergers of the Hong Kong Institute of Surveyors, Registered Business Valuer under the Hong Kong Business Forum and has over 10 years’ experience in valuation of properties in Hong Kong, in Macau and in the PRC.

IV – 4

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

SUMMARY OF VALUATION

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Group	I – Properties Held by the Group for Sale
Shum Yip Southern Land (Holdings) Co., Ltd.
1.	15 Garden Houses and 22 Residential Units	162,300,000.–	100%	162,300,000.–
	Purple Kylin Hill（紫麟山花園）
	Longsheng Avenue
	Longgang Town
	Longgang District
	Shenzhen City
	Guangdong Province
	the PRC
2.	Various Residential Units, 6 Shop Units	231,500,000.–	100%	231,500,000.–
	and 158 car Parking Spaces in Phase 1
	Shunde Shum Yip City（順德深業城）
	Wuchangsha
	Beijiao Town
	Shunde District
	Foshan City
	Guangdong Province
	the PRC
3.	Various Residential Units and Various	1,593,000,000.–	100%	1,593,000,000.–
	Retail Units
	Dongcheng Shidai
	（東晟時代）
	Pingshan Town
	Longgang District
	Shenzhen City
	Guangdong Province
	the PRC
4.	Various Residential Units and Various	211,000,000.–	100%	211,000,000.–
	Retail Units of Yu Yuan（禦園）
	Jinxiu Dong Road and Jinhui Road
	Kengzi Town
	Longgang District
	Shenzhen City
	Guangdong Province
	the PRC

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Pengji Holdings Co., Ltd.
5.	Various units of	143,600,000.–	100%	143,600,000.–
	Zhongxin Keji Building（眾鑫科技大廈）,
	Ba Gua Ling Industrial Area
	Ba Gua Ling
	Futian District
	Shenzhen
	the PRC.
6.	Various garden houses and residential units of	160,000,000.–	80%	128,000,000.–
	Shenye Rui Cheng（深業睿城）
	Xingsha Town
	Changsha County
	Changsha City
	Hunan Province
	the PRC.
7.	Various Garden Houses, Residential Units,	296,000,000.–	100%	296,000,000.–
	Shops and Car Parking Spaces of Phases 1 to 6
	Hill House（萬林湖）
	Shanbeikeng
	Huizhou City
	Guangdong Province
	the PRC
8.	Various Garden Houses, Various Residential Units and	182,400,000.–	100%	182,400,000.–
	Retail Units of
	Hillsides Villas（半山名苑）
	Area Nos. 16 and 72
	Zhongkai High-Technology Zone
	Huizhou City
	Guangdong Province
	the PRC

IV – 6

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
9.	Various Residential Units of Phase I and II	442,800,000.–	100%	442,800,000.–
	Euro-view Garden（歐景麗苑）
	Gangkou Avenue
	Wanjiang District
	Dongguan City
	Guangdong Province
	the PRC
10.	Various Residential Units within Phases 1	73,000,000.–	100%	73,000,000.–
	Fairview City
	（姜堰錦繡薑城）
	Jiangyan Avenue and Shanghai Road
	Jiangyan
	Taizhou City
	Jiangsu Province
	the PRC
Shum	Yip Shumkang (Group) Co., Ltd.
11.	Meibo Trading Centre and	305,000,000.–	74.55%	227,337,500.–
	Meibo Apartments,
	western side of Xiaonan Street,
	Shenhe District
	Shenyang City
	Liaoning Province
	the PRC
12.	Various Industrial Units of	3,060,000,000.–	75%	2,295,000,000.–
	Terra Building（泰然大廈）
	Che Gong Miao Industrial Zone,
	Futian District,
	Shenzhen,
	the PRC.
13.	Three Garden Houses and Various	588,000,000.–	75%	441,000,000.–
	Residential Units and Various Shops of
	Phase 1-3 Nanhu Rose Bay（南湖玫瑰灣）
	Wangjiawan
	Shizishan Street
	Wuhan City
	Hubei Province
	the PRC.

IV – 7

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
14.	Various Residential Units and Various	360,500,000.–	52.5%	189,262,500.–
	Shops of Zone A and B in Phase 1
	Yihu Rose Garden
	（怡湖玫瑰苑）
	Yihu Road, Qingjiang Bei Road
	and Qingjiang Dong Road
	Qingbai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
15.	Various Residential Unit of	1,367,600,000.–	37.5%	512,850,000.–
	Tianan Qinghua Apartment, Various
	Industrial Units within Phases 5 and 6,
	Tianan Panyu Ecological Hi-tech Park
	No.730 Yingbin Road
	Panyu District
	Guangzhou City
	Guangdong Province
	the PRC.
16.	Various Industrial Units of Block A, B and	416,000,000.–	37.5%	156,000,000.–
	C in Tianan Shanggu（天安尚谷）, Various
	Residential Units of Block 1 to 8 in Tianan
	Shangchang（天安尚城）and 957 Car
	Parking Spaces,
	Tianan Changzhou Cyber Park,
	Wujin Hi-tech Development Zone,
	Changzhou City,
	Jiangsu Province,
	the PRC.
17.	Various Industrial Units of	257,800,000.–	37.5%	96,675,000.–
	Block A1, A2, B1, B2, B3
	Phase 1
	Tianan Jiangyin Cyber Park,
	Changshan Avenue
	Xuyao Village,
	Chengdong Street,
	Jiangyin City,
	Jiangsu Province,
	the PRC.

IV – 8

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Property 18. Various Industrial Units of Block Nos.A1 and A2 Tianan Dongguan Cyber Park, Nancheng District, Dongguan City, Guangdong Province, the PRC. 19. Various Industrial Units of Block No.1-5, Phase I Tianan Chongqing Cyber Park （重慶天安數碼城）, Da Du Kou, Chongqing City, the PRC. 20. Various Industrial Units of Block 1 in Phase 3 Tianan Longgang Cyber Park, Longgang District, Shenzhen, the PRC. 21. Serviced Apartment Portion of Coastal International Centre（沿海國際中心） No.1296 Ganjiang West Road Jinchang District Suzhou City Jiangsu Province the PRC Sub-total:	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 110,000,000.– 29.3% 32,230,000.– 1,086,000,000.– 37.5% 407,250,000.– 165,000,000.– 37.5% 61,875,000.– 207,000,000.– 100% 207,000,000.– 11, 418,500,000.– 8,0 90,120,000.–	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 110,000,000.– 29.3% 32,230,000.– 1,086,000,000.– 37.5% 407,250,000.– 165,000,000.– 37.5% 61,875,000.– 207,000,000.– 100% 207,000,000.– 11, 418,500,000.– 8,0 90,120,000.–
		8,0 90,120,000.–

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Group	II – Properties Held by the Group Under Development
Shum Yip Southern Land (Holdings) Co., Ltd.
22.	Development Site Phase 2	728,400,000.–	100%	728,400,000.–
	Shunde Shum Yip City（順德深業城）
	Wuchangsha, Beijiao Town
	Shunde District
	Foshan City
	Guangdong Province
	the PRC
23.	Development Site of Jinshazhou	2,652,000,000.–	100%	2,652,000,000.–
	Caibin Bei Road
	Baiyun District
	Guangzhou City
	Guangdong Province
	the PRC
24.	Development Site of Phase 1 of	303,600,000.–	100%	303,600,000.–
	Baie De Seine（塞納灣）
	Dongyuan County
	Heyuan City
	Guangdong Province
	the PRC
25.	Development Site of Phase 1 in Plot 2	483,500,000.–	100%	483,500,000.–
	Sanshui Yundonghai（三水雲東海）
	Baiyun Road, Yundonghai Street
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Pengji Holdings Co., Ltd.
26.	Development Site of Phase 1.2A	239,000,000.–	80%	191,200,000.–
	Shenye Rui Cheng（深業睿城）
	Xingsha Town
	Changsha County
	Changsha City
	Hunan Province
	the PRC.
27.	Development Site of Phase 8	543,000,000.–	100%	543,000,000.–
	Hill House（萬林湖）
	Jinbang Road
	Huizhou City
	Guangdong Province
	the PRC
28.	Development Site of Phase 2	263,700,000.–	100%	263,700,000.–
	Fairview City（姜堰錦繡薑城）
	Jiangyan Avenue and Shanghai Road
	Jiangyan
	Taizhou City
	Jiangsu Province
	the PRC
29.	Development Site of Phase III	166,000,000.–	100%	166,000,000.–
	Euro-view Garden（歐景麗苑）
	Gangkou Avenue
	Wanjiang District
	Dongguan City
	Guangdong Province
	the PRC

IV – 11

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Terra (Holdings) Co., Ltd.
30.	Development Site of Phase 3	231,800,000.–	75%	173,850,000.–
	Nanhu Rose Bay（南湖玫瑰灣）
	Wangjiawan
	Shizishan Street
	Wuhan City
	Hubei Province
	the PRC.
31.	Development Site of Block 4 and 12	64,400,000.–	52.5%	33,810,000.–
	in Phase I-I
	Yihu Rose Garden（怡湖玫瑰苑）
	Yihu Road, Qingjiang Bei Road
	and Qingjiang Dong Road
	Qingbai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
32.	Development Site of Phases 7 and 8	34,500,000.–	37.5%	12,937,500.–
	Tianan Panyu Ecological Hi-tech Park
	No.730 Yingbin Road
	Panyu District
	Guangzhou City
	Guangdong Province
	the PRC.
33.	Development Site of Science Technology	84,000,000.–	33.8%	28,392,000.–
	Mansion（科技大廈）,
	Tianan Nanhai Cyber Park,
	Nanhai District, Foshan City,
	Guangdong Province,
	the PRC.
34.	Development Site of Zone B and Zone E	268,000,000.–	29.3%	78,524,000.–
	Tianan Dongguan Cyber Park,
	Nancheng District, Dongguan City,
	Guangdong Province,
	the PRC.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Property 35. Development Site of Residential Block No. 1-18 Tianan Jiangyin Cyber Park, Changshan Avenue Xuyao Village, Chengdong Street, Jiangyin City, Jiangsu Province, the PRC. 36. Development Site of Chanye Mansion Blocks 1 to 4 in Phase 1（天安天津產業大廈一期）, Long Yuan（瓏園）of Phase I and Industrial Development of Phase II, Tianan Chuangxin Science and Technology Park, Zhangjiawo Town, Xiqing District, Tianjin City, the PRC. Maanshan Shum Yip Real Estate Co., Ltd. 37. Development Site of Shenye Huafu Lot No. 03-03-03-0525 at the northeastern junction of Huxi Road and Jiuhua Road Ma’anshan City, Anhui Province, the PRC Sub-total:	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 162,400,000.– 37.5% 60,900,000.– 761,600,000.– 37.5% 285,600,000.– 1,655,000,000.– 99.54% 1,647,387,000.– 8,640,900,000.– 7,652,800,500.–	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 162,400,000.– 37.5% 60,900,000.– 761,600,000.– 37.5% 285,600,000.– 1,655,000,000.– 99.54% 1,647,387,000.– 8,640,900,000.– 7,652,800,500.–
		7,652,800,500.–

IV – 13

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Group	III – Properties Held by the Group for Future	Development
Shum Yip Southern Land (Holdings) Co., Ltd.
38.	Development Site of No.1 Gaobangshan	68 8,000,000.–	70%	48 1, 600,000.–
	Garden（高榜山一號花園）
	Huizhou Railway West Station
	Huizhou City
	Guangdong Province
	the PRC
39.	Development Site of Baie De Seine	313,000,000.–	100%	313,000,000.–
	（塞納灣）
	Dongyuan County
	Heyuan City
	Guangdong Province
	the PRC
40.	Development Site of Plot 1, Plot 3, Plot 4	425,000,000.–	100%	425,000,000.–
	Sanshui Yundonghai（三水雲東海）
	Baiyun Road, Yundonghai Street
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC
41.	Development Site of Phase 3 and 4 in	743,900,000.–	100%	743,900,000.–
	Plot A
	Shunde Shum Yip City（順德深業城）
	Wuchangsha, Beijiao Town
	Shunde District
	Foshan City
	Guangdong Province
	the PRC

IV – 14

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Pengji Holdings Co., Ltd
42.	Development Site of Plot 1 and Plot 3	70,000,000.–	100%	70,000,000.–
	Hillsides Villas（半山名苑）
	Area Nos. 16 and 72
	Zhongkai High-Technology Zone
	Huizhou City
	Guangdong Province
	the PRC
43.	Development Site of Phase 1.2B, 2 and 3	121,500,000.–	80%	97,200,000.–
	Shenye Rui Cheng（深業睿城）
	Xingsha Town
	Changsha County
	Changsha City
	Hunan Province
	the PRC.
44.	Development Site in Southern Zone of	64,330,000.–	100%	64,330,000.–
	Hill House（萬林湖）
	Shanbeikeng
	Gu Tang Ao
	Huizhou City
	Guangdong Province
	the PRC
45.	Development Site of Phase 3	280,000,000.–	100%	280,000,000.–
	Fairview City（姜堰錦繡薑城）
	Jiangyan Avenue and Shanghai Road
	Jiangyan
	Taizhou City
	Jiangsu Province
	the PRC

IV – 15

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Shumkang (Group) Co., Ltd.
46.	Development Site in West Zone of	4,200,000.–	80%	3,360,000.–
	Shangyang
	Xiangshuihe Industrial Park,
	Daya Bay Economic & Technology
	Development Area,
	Huizhou City,
	Guangdong Province,
	the PRC.
Shum	Yip Taifu Logistics Group Holdings Co., Ltd.
47.	Development Site in Southern Zone of	2,320,000.–	73%	1,693,600.–
	Jinxiu Workshop（錦繡工場）
	No.36 Caotang Dong Road
	Qingyang District
	Chengdu City
	Sichuan Province
	the PRC
Shum	Yip Terra (Holdings) Co., Ltd.
48.	Development Site of Zone C in Phase 1	128,500,000.–	52.5%	67,462,500.–
	and Phase 2 and 3
	Yihu Rose Garden（怡湖玫瑰苑）
	Yihu Road, Qingjiang Bei Road
	and Qingjiang Dong Road
	Qingbai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
49.	Development Site in Gexin Village	216,000,000.–	52.5%	113,400,000.–
	Dawan Street
	Qingbai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.（北部新區）

IV – 16

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
50.	Development Site of Phase 4	108,000,000.–	75%	81,000,000.–
	Nanhu Rose Bay（南湖玫瑰灣）
	Wangjiawan
	Shizishan Street
	Wuhan City
	Hubei Province
	the PRC.
51.	Development Site of Phase 4	83,800,000.–	37.5%	31,425,000.–
	Tianan Longgang Cyber Park,
	Longgang District,
	Shenzhen,
	the PRC.
52.	Development Site of Phase 9	15,500,000.–	37.5%	5,812,500.–
	Tianan Panyu Ecological Hi-tech Park
	No.730 Yingbin Road
	Panyu District
	Guangzhou City
	Guangdong Province
	the PRC.
53.	Development Site of Phase 6,	9,500,000.–	33.8%	3,211,000.–
	Tianan Nanhai Cyber Park,
	Nanhai District, Foshan City,
	Guangdong Province,
	the PRC.
54.	Development Site of Two Land Parcels in	40,000,000.–	29.3%	11,720,000.–
	Tianan Dongguan Cyber Park,
	Nancheng District, Dongguan City,
	Guangdong Province,
	the PRC.
55.	Development Site of	133,000,000.–	37.5%	49,875,000.–
	Tianan Changzhou Cyber Park,
	Wujin Hi-tech Development Zone,
	Changzhou City,
	Jiangsu Province,
	the PRC.

IV – 17

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
56.	Development Site of Phase 3	44,000,000.–	37.5%	16,500,000.–
	Tianan Jiangyin Cyber Park,
	Changshan Avenue
	Xuyao Village,
	Chengdong Street,
	Jiangyin City,
	Jiangsu Province,
	the PRC.
57.	Development Site of	374,000,000.–	37.5%	140,250,000.–
	Tianan Chuangxin Science and Technology
	Park,
	Zhangjiawo Town,
	Xiqing District,
	Tianjin City,
	the PRC.
58.	Development Site of	873,600,000.–	37.5%	327,600,000.–
	Tianan Chongqing Cyber Park
	（重慶天安數碼城）,
	Da Du Kou,
	Chongqing City,
	the PRC.
Shum	Yip Land Co., Ltd.
59.	Development Site of Plot 5	108,000,000.–	100%	108,000,000.–
	Sanshui Yundonghai（三水雲東海）
	Baiyun Road, Yundonghai Street
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC

IV – 18

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Property 60. Development Site of North Zone and South Zone, Shumyip Hot Spring （深業半湯禦泉莊）, No. 128 Tangshang Road, Bantang Economic Development Zone, Chaohu City, Anhui Province, the PRC. 61. Development Site on Duo Lai Te Ba Ge Road, 11th Village, Xia Town, Ka Shi City, Xinjiang Weiwuer Autonomy Zone, the PRC. Sub-total:	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 75,000,000.– 80% 60,000,000.– 29,400,000.– 100% 29,400,000.– 4,9 50,550,000.– 3,525, 739,600.–	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 75,000,000.– 80% 60,000,000.– 29,400,000.– 100% 29,400,000.– 4,9 50,550,000.– 3,525, 739,600.–
		3,525, 739,600.–

IV – 19

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Group	IV – Properties Held by the Group for Investment
Shum Yip Southern Land (Holdings) Co., Ltd
62.	Carparking spaces, various shop units and	170,000,000	100%	170,000,000
	office units,
	Shum Yip Centre,
	Shennan Zhong Road,
	Luohu District,
	Shenzhen,
	the PRC.
63.	Various office units,	21,600,000	100%	21,600,000
	Shum Yip Building,
	No.7 Wenjin Zhong Road,
	Luohu District,
	Shenzhen,
	the PRC.
64.	Basement Levels 1 and 2,	50,380,000	100%	50,380,000
	Levels 1 to 4 and
	Units B, C and D on 5th Floor,
	Hua Min Building,
	Renmin Nan Road,
	Luohu District,
	Shenzhen,
	the PRC.
65.	Various office/residential units,	10,000,000	100%	10,000,000
	Hua Min Building,
	Renmin Nan Road,
	Luohu District,
	Shenzhen,
	the PRC.
66.	A Shop Unit on Ground Floor,	457,450,000	100%	457,450,000
	Various office units, apartment units and
	11 car parking spaces of Shun Hing Square
	(also known as “King Land Building”),
	No. 5002 Shennan Road East,
	Luohu District,
	Shenzhen,
	the PRC.

IV – 20

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
67.	Various shop units of residents’ clubhouse	37,000,000	100%	37,000,000
	Shum Yip Garden
	Futian District
	Shenzhen
	the PRC.
68.	Shop No. 117 on Ground Floor,	1,600,000	100%	1,600,000
	Fu Xing Building,
	No. 9 Fuxing Road,
	Futian,
	Shenzhen
	the PRC.
69.	Shop units and	No Commercial	100%	No Commercial
	car parking spaces of	Value		Value
	Fu Xing Building,
	No. 9 Fuxing Road,
	Futian District,
	Shenzhen,
	the PRC.
70.	Four shops of Yitai Centre,	6,274,800	100%	6,274,800
	Dongmen Zhong Road,
	Luohu District,
	Shenzhen,
	the PRC.
71.	175 Car Parking Spaces in	No Commercial	100%	No Commercial
	Zi Jing Yuan	Value		Value
	Jing Tian Residential Area
	Futian District
	Shenzhen,
	the PRC.
Shum	Yip Pengji Holdings Co., Ltd.
72.	Levels 2 to 7,	No Commercial	100%	No Commercial
	Factory Block No. 703,	Value		Value
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.

IV – 21

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
73.	Level 5,	No Commercial	100%	No Commercial
	Factory Block No. 705,	Value		Value
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
74.	Level 6,	No Commercial	100%	No Commercial
	Factory Block No. 709,	Value		Value
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
75.	Levels 3 to 7,	No Commercial	100%	No Commercial
	Factory Block No. 711,	Value		Value
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
76.	Levels 1 to 8,	15,124,000	100%	15,124,000
	Dormitory Block No. 101,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
77.	Levels 1 to 8,	15,326,000	100%	15,326,000
	Dormitory Block
	No. 102,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.

IV – 22

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
78.	Levels 1 to 8,	10,092,000	100%	10,092,000
	Dormitory Block
	No. 103,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
79.	Levels 1, 4, 6, 7 and 8,	7,781,000	100%	7,781,000
	Dormitory Block
	No. 104,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
80.	Levels 1 and 2,	4,320,000	100%	4,320,000
	Dormitory Block
	No. 105,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
81.	Levels 1, 6, 7 and 8,	5,035,000	100%	5,035,000
	Dormitory Block
	No. 106,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.

IV – 23

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
82.	Levels 1, 7 and 8,	No Commercial	100%	No Commercial
	Dormitory Block No. 107,	Value		Value
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
83.	Levels 2 to 8,	8,252,000	100%	8,252,000
	Dormitory Block No. 108,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
84.	Levels 1 to 8,	15,326,000	100%	15,326,000
	Dormitory Block No. 109,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
85.	Levels 1 to 8,	15,326,000	100%	15,326,000
	Dormitory Block No. 110,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
86.	Levels 1 and 2,	15,641,000	100%	15,641,000
	Dormitory Block No. 49,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 24

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

					Property interest	Property interest	Property interest
		Market value in		Interest	attributable	to the
		existing state	as at	attributable	Company		as at
	Property	31 December	2012	to the Company	31 December		2012
		(RMB)		(%)	(RMB)
87.	Level 1,	18,111,000		100%	18,111,000
	Dormitory Block Nos. 50 and 51,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
88.	Unit 710,	No Commercial		100%	No Commercial
	Apartment Block No. 52,	Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
89.	Level 1,	No Commercial		100%	No Commercial
	Apartment Block No. 11,	Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
90.	Levels 1 and 2,	No Commercial		100%	No Commercial
	Dormitory Block No. 6 (New),	Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
91.	Level 1,	No Commercial		100%	No Commercial
	Dormitory Block No. 5,	Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 25

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

						Property interest	Property interest	Property interest
		Market value in			Interest	attributable	to the
		existing state		as at	attributable	Company		as at
	Property	31 December		2012	to the Company	31 December		2012
			(RMB)		(%)	(RMB)
92.	Level 1,	No	Commercial		100%	No Commercial
	Dormitory Block No. 431,		Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
93.	Level 1,	No	Commercial		100%	No Commercial
	Dormitory Block No. 21,		Value				Value
	Ba Gua Second Road,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
94.	Levels 1 and 2,	No	Commercial		100%	No Commercial
	Apartment Block No. 33,		Value				Value
	Ba Gua Second Road,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
95.	Levels 3 to 6,	No	Commercial		100%	No Commercial
	Dormitory Block No. 6 (New),		Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
96.	Levels 3 to 4,	No	Commercial		100%	No Commercial
	Dormitory Block No. 6,		Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 26

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

						Property interest	Property interest	Property interest
		Market value in			Interest	attributable	to the
		existing state		as at	attributable	Company		as at
	Property	31 December		2012	to the Company	31 December		2012
			(RMB)		(%)	(RMB)
97.	Levels 1 to 7,	No	Commercial		100%	No Commercial
	Dormitory Block No. 7,		Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
98.	Level 3,	No	Commercial		100%	No Commercial
	Apartment Block No. 11,		Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
99.	20 dormitory units on	No	Commercial		100%	No Commercial
	Level 5,		Value				Value
	Dormitory Block No. 24,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
100.	4 dormitory units on Level 2 (East),	No	Commercial		100%	No Commercial
	Dormitory Block No. 30,		Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
101.	8 dormitory units on Level 5,	No	Commercial		100%	No Commercial
	Dormitory Block No. 31,		Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 27

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

					Property interest	Property interest	Property interest
		Market value in		Interest	attributable	to the
		existing state	as at	attributable	Company		as at
	Property	31 December	2012	to the Company	31 December		2012
		(RMB)		(%)	(RMB)
102.	Dormitory Block No. 48,	19,517,000		100%	19,517,000
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
103.	Levels 1 to 7 (excluding Unit 305),	No Commercial		100%	No Commercial
	Dormitory Block No. 35,	Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
104.	Levels 1 to 8,	19,219,000		100%	19,219,000
	Dormitory Block No. 41,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
105.	Levels 2 to 6,	No Commercial		100%	No Commercial
	Dormitory Block No. 5,	Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
106.	Levels 2 to 6,	No Commercial		100%	No Commercial
	Dormitory Block No. 431,	Value				Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 28

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
107.	Levels 1 to 5,	10,917,000	100%	10,917,000
	Dormitory Block No. 534,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
108.	Levels 1 to 6, Block 610,	No Commercial	100%	No Commercial
	Ba Gua Ling Industrial Area,	Value		Value
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
109.	Levels 7 and 8,	No Commercial	100%	No Commercial
	Factory Block 618,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
110.	Level 3,	No Commercial	100%	No Commercial
	Factory Block No. 513,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
111.	Level 6,	No Commercial	100%	No Commercial
	Factory Block No. 515,	Value		Value
	69Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 29

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
112.	Level 5,	No Commercial	100%	No Commercial
	Factory Block No. 532,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen, the PRC.
113.	Levels 1 and 2,	No Commercial	100%	No Commercial
	Dormitory Block No. 6,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
114.	Levels 1 and 3,	No Commercial	100%	No Commercial
	Factory Block No. 11,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
115.	Level 5,	No Commercial	100%	No Commercial
	Factory Block No. 424,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
116.	Levels 1, 2 and 12	No Commercial	100%	No Commercial
	Factory Block No. 430,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 30

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
117.	Levels 1 to 3,	No Commercial	100%	No Commercial
	Factory Block No. 102C,	Value		Value
	Shangbu Industrial District,
	Futian District,
	Shenzhen,
	the PRC.
118.	Level 1,	No Commercial	100%	No Commercial
	Factory Block No. 201,	Value		Value
	Shangbu Industrial District,
	Futian District,
	Shenzhen,
	the PRC.
119.	East Portion on	No Commercial	100%	No Commercial
	Level 5,	Value		Value
	Dormitory Block No. 402A,
	Shangbu Industrial District,
	Futian District,
	Shenzhen,
	the PRC.
120.	31 dormitory units on Level 5,	No Commercial	100%	No Commercial
	Dormitory Block No. 503,	Value		Value
	Shangbu Industrial District,
	Futian District,
	Shenzhen,
	the PRC.
121.	Level 1,	No Commercial	100%	No Commercial
	Dormitory Block No. 505,	Value		Value
	Shangbu Industrial District,
	Futian District,
	Shenzhen,
	the PRC.
122.	Levels 1 to Level 6,	No Commercial	100%	No Commercial
	Management Centre Block No.501,	Value		Value
	Shangbu Industrial District,
	Futian District,
	Shenzhen,
	the PRC.

IV – 31

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
123.	Level 5,	No Commercial	100%	No Commercial
	Factory Block No. 514,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
124.	Level 18,	No Commercial	100%	No Commercial
	An Hua Building,	Value		Value
	Luohu District,
	Shenzhen,
	the PRC.
125.	Level 1 and Level 2,	No Commercial	100%	No Commercial
	Factory Block No. 523,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
126.	Various Retail Units of Block 4,	85,300,000	100%	85,300,000
	Peng Yi Garden
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
127.	Multi-purpose Building Block No. 2,	14,400,000	100%	14,400,000
	Longjing Zhuguang Industrial Area,
	Mao Tou Shan,
	Bei Huan Road,
	Nanshan District,
	Shenzhen,
	the PRC.

IV – 32

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
128.	Unsold Portion of	6,899,000	100%	6,899,000
	Factory Block No. 7,
	Longjing Zhuguang Industrial Area,
	Mao Tou Shan,
	Bei Huan Road,
	Nanshan District,
	Shenzhen,
	the PRC.
129.	East Portion on Level 4,	9,870,000	100%	9,870,000
	Level 5,
	Factory Block No. 3,
	Longjing Zhuguang Industrial Area,
	Mao Tou Shan,
	Bei Huan Road,
	Nanshan District,
	Shenzhen,
	the PRC.
130.	Factory Block No. 1,	12,830,000	100%	12,830,000
	Longjing Zhuguang Industrial Area,
	Mao Tou Shan,
	Bei Huan Road,
	Nanshan District,
	Shenzhen,
	the PRC.
131.	Various Residential Units of Residential	30,919,000	100%	30,919,000
	Block Nos.1, 3 and 4,
	Gaofa Oriental Hitech Park,
	Mao Tou Shan,
	Bei Huan Road,
	Nanshan District,
	Shenzhen,
	the PRC.

IV – 33

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
132.	Levels 2 and 3,	25,572,000	100%	25,572,000
	Huake Industrial Building,
	Gaofa Oriental Hitech Park,
	Mao Tou Shan,
	Bei Huan Road,
	Nanshan District,
	Shenzhen,
	the PRC.
133.	Staff Canteen,	349,000	100%	349,000
	Gaofa Oriental Hitech Park,
	Mao Tou Shan,
	Bei Huan Road,
	Nanshan District,
	Shenzhen,
	the PRC.
134.	Development Site in	No Commercial	100%	No Commercial
	Keng Zi Town,	Value		Value
	Longgang District
	Shenzhen,
	the PRC.
135.	Various Retail Units of	14,900,000	100%	14,900,000
	Blocks 58 to 65,
	Phase 5,
	Peng Xing Garden,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
136.	Various Retail Units within	74,730,000	100%	74,730,000
	Phase 6,
	Peng Xing Garden,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.

IV – 34

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
137.	Level 1	No Commercial	100%	No Commercial
	Dormitory Block No.9,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
138.	Dormitory Block No. 47,	No Commercial	100%	No Commercial
	Ba Gua Ling Industrial Area,	Value		Value
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
139.	Unit 101 of Podium	43,800,000	100%	43,800,000
	Block Nos.5, 6 and 7
	Shengshi Pengcheng
	（盛世鵬程）
	Shangbu Road and Sungang Road
	Futian District,
	Shenzhen,
	the PRC.
140.	Various retail units on	No Commercial	50%	No Commercial
	Levels 1 and 2 of Apartment Block	Value		Value
	Nos. 1 to 10,
	Peng Sheng Village,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
141.	Theatre Building,	No Commercial	50%	No Commercial
	Shop Nos. 201 to 207 on Level 2,	Value		Value
	Shop Nos.301 to 308 on Level 3,
	Pengsheng Nianhua,
	Ba Gua 1st Road,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 35

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
142.	Retail Spaces on	16,517,000	100%	16,517,000
	Level 1,
	Block 14, Hong Li Village,
	Zhen Xing Road,
	Futian District,
	Shenzhen,
	the PRC.
143.	Unit A on Level 3,	1,421,000	100%	1,421,000
	Block 17, Hong Li Village,
	Hong Li Road,
	Futian District,
	Shenzhen,
	the PRC.
144.	Zhong Fa Industrial Building,	26,800,000	74.57%	19,984,760
	Ba Gua Ling Industrial Area,
	Ba Gua Road,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
145.	Levels 1 and 2,	No Commercial	74.57%	No Commercial
	Ba Gua Ling	Value		Value
	Commercial Centre
	Block No. 33,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
146.	Research and Development Building	34,383,000	30%	10,314,900
	(excluding Portion of the Level 6),
	B311-38 Ba Gua Third Road,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 36

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
147.	Rong Sheng Chemical Industrial Complex,	42,000,000	30%	12,600,000
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
148.	Levels 3 and 4,	No Commercial	30%	No Commercial
	Dormitory Block No. 28,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
149.	7 dormitory units on Level 3,	No Commercial	30%	No Commercial
	Apartment Block No. 11 (North),	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
150.	Unit Nos. 206 to 209, 211, 216 to 220,	1,337,000	30%	401, 100
	Apartment Block No. 52,
	Ba Gua Second Road,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
151.	Shanglin Yuan Hotel,	5,000,000	100%	5,000,000
	Lot No. B311-29,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.

IV – 37

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
152.	16 dormitory units on Level 2 and	4,540,000	100%	4,540,000
	26 dormitory units on Level 3,
	Dormitory Block No. 31,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
153.	Various dormitory units of	No Commercial	100%	No Commercial
	Dormitory Block No. 23,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
154.	14 dormitory units on Level 1,	No Commercial	100%	No Commercial
	Dormitory Block No. 24,	Value		Value
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
155.	Unit 2 on 15th Floor	2,900,000	100%	2,900,000
	Block AB
	Nanfang Zhengquan Building
	No.2018 Jianshe Road
	Luohu District
	Shenzhen,
	the PRC.
156.	Unit D1 on 12th Floor,	610,000	100%	610,000
	Shangmao Plaza,
	No.49 Zhongshan Nan Road,
	Nanjing City,
	Jiangsu Province,
	the PRC.

IV – 38

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
157.	Shop 8046 on 8th Floor,	730,000	100%	730,000
	Chan Yuan Commercial City,
	No.11 Chan Yuan Road,
	Nanjing City,
	Jiangsu Province,
	the PRC.
158.	Shop in between	20,000	100%	20,000
	Blocks B and C on Level 1,
	Nanyang Building,
	Jianshe Road,
	Luohu District,
	Shenzhen,
	the PRC.
159.	Units 402, 407, 410 and 419	960,000	100%	960,000
	on 4th Floor
	Dormitory Block No. 52,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
160.	Dormitory Block Nos. 6 to 8,	31,000,000	100%	31,000,000
	Factory Block Nos. 1 to 3,
	Pengji Industrial City
	Ma Di Village,
	Lu Yao,
	Henggang Town,
	Longgang District,
	Shenzhen,
	the PRC.

IV – 39

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Land Co., Ltd.
161.	Office and Retail Portions of Coastal	706,000,000	100%	706,000,000
	International Centre（沿海國際中心）
	No.1296 Ganjiang West Road
	Jinchang District
	Suzhou City
	Jiangsu Province
	the PRC
162.	Units A1, A2, A3 and A4 on 4th Floor and	No Commercial	100%	No Commercial
	Unit A1 on 5th Floor of Jinzhou Building	Value		Value
	（金洲大廈）
	No.130 Changxu Road
	（閶胥路）
	Suzhou City
	Jiangsu Province
	the PRC
Shum	Yip Shumkang (Group) Co., Ltd.
163.	Level 2 and various residential units,	32,440,000	80%	25,952,000
	Shen Gang Garden,
	Wenjin Road,
	Luohu District,
	Shenzhen,
	the PRC.
164.	Various residential units,	8,140,000	80%	6,512,000
	Huagang Xincun,
	No.1137 Jin Dao Tian Road,
	Caopu,
	Luohu District,
	Shenzhen,
	the PRC.

IV – 40

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
165.	Levels 1 and 2 of	11,290,000	80%	9,032,000
	Block No. 2,
	Factory Building
	Block No.9 and
	Transformer Room,
	Shen Gang Xin Cun,
	Luo Fang Sub-district
	Luohu District,
	Shenzhen, the PRC.
166.	Various residential units and Levels 1 to 3,	82,570,000	40%	33,028,000
	Shenrong Building,
	Huanggang,
	Futian District,
	Shenzhen,
	the PRC.
167.	Units 1301 and 1302, 13th Floor	3,000,000	80%	2,400,000
	Jinze Building
	No.201 Huangpu Avenue West,
	Tianhe District,
	Guangzhou City,
	Guangdong Province,
	the PRC.
168.	Unit 11C, 11th Floor	2,000,000	80%	1,600,000
	Fuxing Commercial and Trading Building
	No.159 Huangpu Avenue,
	Tianhe District,
	Guangzhou City,
	Guangdong Province,
	the PRC.
169.	Building and Land of Shenyang Wuai	169,500,000	74.55%	126,362,250
	Shengang Vehicle and Logistic Terminus
	Nos.145-2 and 149 Bei Han Lin Road
	Shenhe District
	Shenyang City
	Liaoning Province
	the PRC.

IV – 41

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
170.	Various units in Meibo Trading Centre,	946,000,000	74.55%	705,243,000
	western side of Xiaonan Street,
	Shenhe District,
	Shenyang City,
	Liaoning Province,
	the PRC
Shum	Yip Taifu Logistics Group Holdings Co., Ltd.
171.	Warehouse Block Nos. 10, 12, 830, 831,	648,000,000	95.4%	618,192,000
	832, 837, 839, 841 and 843, Shenzhen
	Sungang Warehouse Zone,
	Baoan Bei Road,
	Luohu District, Shenzhen,
	the PRC.
172.	Development Site of Qingshuihe	197,000,000	95.4%	187,938,000
	International Vehicle Logistics Park,
	Qingshuihe Warehouse Zone,
	Honggang Road, Luohu District,
	Shenzhen,
	the PRC.
173.	Units 101 to 525 of Composite Building	35,000,000	95.4%	33,390,000
	Block C,
	Baoan Bei Road and Taoyuan Road,
	Shenzhen Sungang Warehouse Zone,
	Baoan Bei Road,
	Luohu District, Shenzhen,
	the PRC.
174.	Dormitory Building Block B,	35,000,000	95.4%	33,390,000
	Baoan Bei Road,
	Shenzhen Sungang Warehouse Zone,
	Baoan Bei Road,
	Luohu District
	Shenzhen, the PRC.

IV – 42

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Property interest Market value in Interest attributable to the existing state as at attributable Company as at Property 31 December 2012 to the Company 31 December 2012 (RMB) (%) (RMB) 175. Various Commercial Units of Block No. 2, 285,700,000 73% 208,561,000 4 and 5 and Various Car Parking Spaces within Northern Zone Jinxiu Workshop（錦繡工場） No.36 Caotang Dong Road Qingyang District Chengdu City Sichuan Province the PRC Shum Yip Terra (Holdings) Co., Ltd. 176. Units 401 to 409, 411, 413 and 415 of 2,025,510,000 75% 1,519,132,500 Block No.102, West Wing on Level 6 of Factory Block No.202, Factory Block Nos. 207, 208, 210, 212 Levels 3 to 8 of Factory Block 211, Dormitory Block Nos. 103,105 and 106 the commercial podium and two units on Level 3 of Taian Xuan（泰安軒）and Taikang Xuan（泰康軒）, commercial podium of Haisong Building （海松大廈）, commercial podium of Cangsong Building （蒼松大廈）, commercial podium and 17 industrial units of Jinsong Building（勁松大廈）and Yunsong Building, Units A, B, C, D and E on 3rd Floor of Yunsong Building（雲松大廈）, Shop Nos. 1A, 1C, 1D, 1E and 1F and Units 14A, 14B, 14C, 14D, 15A, 15B, 15C, 15D, 16B and 16C of Shuisong Building, Levels 1, 2 and 9 of Hongsong Building（紅松大廈）, Levels 1 and 2 and various industrial units of Snow Pine Building（雪松大廈）and Tai Xing Yuan Composite Building, Che Gong Miao Industrial Zone, Futian District, Shenzhen, the PRC.

Shum Yip Terra (Holdings) Co., Ltd.

IV – 43

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
177.	Basement and Levels 2 to 6	98,000,000	75%	73,500,000
	Factory Block 1
	Shenhua Science and Technology Industrial
	Park
	Meihua Road,
	Meilin
	Futian District
	Shenzhen,
	the PRC.
178.	Unit 704	No Commercial	75%	No Commercial
	Block 2	Value		Value
	No.10 Fuxing Nan Road,
	Futian District,
	Shenzhen,
	the PRC.
179.	6th Floor	No Commercial	75%	No Commercial
	Shenzhen International Trust and	Value		Value
	Investment General Corp. Building,
	Zhenxing Road and Shangbu Zhong Road,
	Futian District,
	Shenzhen,
	the PRC.
180.	Unit 5E of Yajing Court,	818,750,000	37.5%	307,031,250
	Tianan Golf Garden,
	Various industrial units in Block Nos. F3.8,
	F4.8 and F5.8, Various dormitory units in
	Block Nos. H1.8, H4.8, H5.8 and H7.8,
	various units of Chuangxin Keji Building,
	the commercial podium of Cyber Building
	and Various industrial units in Tianan Keji
	Service Centre,
	Tianan Cyber City,
	Futian District,
	Shenzhen,
	the PRC.

IV – 44

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
181.	Various industrial units and 225 car parking	101,550,000	33.8%	34,323,900
	spaces of Tianyou Chuangfu Building
	（天佑創富大廈）,
	Various industrial units and 248 car parking
	spaces of Tianan Chuangxin Building
	（天安創新大廈）,
	Various industrial units and 207 car parking
	spaces of Tianan Fazhan Building
	（天安發展大廈）,
	Tianan Nanhai Cyber City,
	Nanhai District, Foshan City,
	Guangdong Province,
	the PRC.
182.	Various industrial units of Tianan Chuangxin	148,830,000	37.5%	55,811,250
	Building（天安創新大廈）, Unit 103 of Tianan
	Chuangye Centre（天安創業中心）, various
	indusrial units of Tianan Development
	Building（天安發展大廈）, Various industrial
	units of Tianan Jiaoliu Centre（天安交流中心）,
	Various industrial units of Tianan Chanye
	Building（天安產業大廈）, various apartment units
	of Tianan Jinghua Apartment（天安菁華公寓）
	and 875 car parking spaces,
	Tianan Panyu Cyber City,
	Panyu District, Guangzhou City,
	Guangdong Province,
	the PRC.
183.	Restaurant Nos.1, 2, 3, 4, 5 and various industrial	227,000,000	37.5%	103,875,000
	units of Factory Nos.1, 2 and 3,
	Chuangxin Yuan（創新園）,
	Tianan Longgang Cyber City,
	Longgang District,
	Shenzhen,
	the PRC.

IV – 45

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property 184. Various Industrial Units of Block Nos.A1 and A2 Tianan Dongguan Cyber Park, Nancheng District, Dongguan City, Guangdong Province, the PRC. Sub-total:	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 17,000,000 29.3% 4,981,000 8,070,358,800 6,157,114,710	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) 17,000,000 29.3% 4,981,000 8,070,358,800 6,157,114,710
		6,157,114,710

IV – 46

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Group	V – Properties Held and Occupied by the Group
Shum Yip Southern Land (Holdings) Co., Ltd.
18 5.	26th Floor, 27th Floor,	100,000,000.–	100%	100,000,000.–
	30th Floor and 32nd Floor
	Shum Yip Centre（深業中心）,
	Shennan Zhong Road,
	Luohu District,
	Shenzhen,
	the PRC.
186.	Unit 803 8th Floor	1,300,000	100%	1,300,000.–
	Block 38
	Song Ping Shan Estate
	Futian District,
	Shenzhen,
	the PRC.
187.	Unit 28-702 7th Floor	2,000,000	100%	2,000,000.–
	Block 202
	Tian Yuan Xin Cun
	Wenjin Bei Road
	Luohu District
	Shenzhen,
	the PRC.
18 8.	Building and Land of Phase I,	156,000,000.–	80%	124,800,000.–
	Shumyip Hot Spring
	（深業半湯禦泉莊）,
	No. 128 Tangshang Road,
	Bantang Economic Development Zone,
	Chaohu City,
	Anhui Province,
	the PRC.

IV – 47

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
18 9.	Units 2 and 3 on 8th Floor	1,800,000.–	100%	1,800,000.–
	Block C-2
	Jinhui Hujing Garden（金匯湖景花園）
	No.3 E Hu Road
	Huicheng District
	Huizhou City
	Guangdong Province
	the PRC.
1 90.	House Nos. D1-80 and D1-81, Type D1,	3,450,000.–	100%	3,450,000.–
	Palm Island
	Heyuan Agile Garden（河源雅居樂花園）
	Dongcheng Xi District
	Heyuan City
	Guangdong Province
	the PRC.
1 91.	Units 808, 1404 and 1508 of Block A	5,000,000.–	100%	5,000,000.–
	Yitai Centre（怡泰中心）,
	Dongmen Zhong Road,
	Luohu District,
	Shenzhen,
	the PRC.
192.	Management and Activity Centre,	28,000,000 .–	100%	28,000,000 .–
	Clubhouse of Shumyip Coast
	（深業新岸線）
	Xinan Avenue（新安大道）
	Baoan District,
	Shenzhen,
	the PRC.
193.	Unit 12E on 12th Floor	1,380,000 .–	100%	1,380,000 .–
	Hengfa Court（橫發閣）
	Shenfa Garden（深發花園）
	Shennan Dong Road
	Luohu District,
	Shenzhen,
	the PRC.

IV – 48

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
194.	Unit 6C on 6th Floor	6,850,000 .–	100%	6,850,000 .–
	and Unit 24I on 24th Floor
	Bi Luo Xuan（碧蘿軒）
	Units 6B and 6G on 6th Floor and
	Units 6B and 24A on 24th Floor
	Zi Teng Xuan（紫藤軒）
	Cai Tian Ming Yuan（彩天名苑）
	Cai Tian Road
	Futian District,
	Shenzhen,
	the PRC.
Shum	Yip Pengji Holdings Co., Ltd.
1 9 5.	Block 611	No Commercial	100%	No Commercial
	Ba Gua Ling Industrial Area,	Value		Value
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
1 9 6.	Factory in,	3,800,000.–	100%	3,800,000.–
	Xuexiang Village（雪象村）,
	Buji Town,
	Longgang District
	Shenzhen,
	the PRC.
1 9 7.	Factory in	7,600,000.–	100%	7,600,000.–
	Xia Shijia Village（下石家村）,
	Gongming Town,
	Baoan District
	Shenzhen,
	the PRC.

IV – 49

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

					Property interest
		Market value in		Interest	attributable to the
		existing state as at		attributable	Company as at
	Property	31 December 2012		to the Company	31 December 2012
			(RMB)	(%)	(RMB)
1 9 8.	Unit 824 on Level 8		480,000.–	100%	480,000.–
	Apartment Block No. 8,
	Peng Sheng Village,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
199 .	Unit 219 on Level 2		350,000 .–	100%	350,000 .–
	Apartment Block No. 51,
	Ba Gua Ling Industrial Area,
	Ba Gua Ling,
	Futian District,
	Shenzhen,
	the PRC.
200 .	Unit 604 on Level 6 of		1,000,000.–	100%	1,000,000.–
	Block 58,
	Phase 5,
	Peng Xing Garden（鵬興花園）,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
201.	Unit 708 7th Floor		320,000	30%	96,000
	Block 8
	Peng Sheng Village
	Futian District
	Shenzhen,
	the PRC.

IV – 50

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Land Co., Ltd.
202.	Hotel Portion of Coastal International	681,000,000.–	100%	681,000,000.–
	Centre（沿海國際中心）
	No.1296 Ganjiang West Road
	Jinchang District
	Suzhou City
	Jiangsu Province
	the PRC
Shum	Yip Shumkang (Group) Co., Ltd.
203.	Level 4 and various residential units of	47,600,000.–	40%	19,040,000.–
	Shenrong Building（深榮大廈）,
	Fuqiang Road,
	Huanggang,
	Futian District,
	Shenzhen,
	the PRC.
20 4.	Unit 252 on 5th Floor and car parking space	820,000.–	46.925%	384, 785.–
	on 1st Floor
	Aixin Jiayuan
	No.4 Tengfei Er Street
	Tiexi District
	Shenyang City
	Liaoning Province
	the PRC
20 5.	Development Site in	6,000,000.–	80%	4,800,000.–
	Xing Hua Dong Lane,
	Shawan,
	Buji Town,
	Longgang District,
	Shenzhen,
	the PRC.

IV – 51

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
206.	Levels 1 to 3,	17,300,000.–	80%	13,840,000.–
	Factory Block No. 709,
	Liantong Industrial Area,
	Luosha Road,
	Luohu District,
	Shenzhen,
	the PRC.
207.	Units 103, 104, 106, 203, 703, 704 and	No Commercial	80%	No Commercial
	705,	Value		Value
	Block B,
	Lian Nan Garden,
	Shenzhen,
	the PRC.
20 8.	Unit 292 on 9th Floor	1,450,000.–	74.55%	1,080,975.–
	Block 4
	Dong Fang Wei Ni Si
	Shenshui Road
	Shenhe District
	Shenyang City
	Liaoning Province
	the PRC
20 9.	Building and Land of	23,200,000.–	74.55%	17,295,600.–
	Shenyang Wuai Shengang Vehicle and
	Logistic Terminus
	Nos.145-2 and 149 Bei Han Lin Road
	Shenhe District
	Shenyang City
	Liaoning Province
	the PRC.
2 10.	Shenyang Wuai Shengang Bus Station	241,000,000.–	74.55%	179,665,500.–
	western side of
	Xiaonan Street,
	Shenhe District
	Shenyang City
	Liaoning Province
	the PRC

IV – 52

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 11.	Levels 4 and 5 of Building on Xinghe	1,360,000.–	40%	544,000.–
	Road,
	Danshui Town,
	Huiyang District,
	Huizhou City,
	Guangdong Province,
	the PRC.
2 12.	Buildings and Land of Vehicle Terminus,	3,160,000.–	40.8%	1,289,280.–
	Cheng Jiang Lu Hu Village,
	Taihe County,
	Jian City,
	Jiangxi Province,
	the PRC.
2 13.	Buildings and Land of Vehicle Terminus,	39,000,000.–	40.8%	15,912,000.–
	Baifeng Avenue,
	Taihe County,
	Jian City,
	Jiangxi Province,
	the PRC.
21 4.	Buildings and Land of Vehicle Terminus,	4,250,000.–	40.8%	1,734,000.–
	Gong Nong Bing Avenue (also known as
	Guanxi Road),
	Taihe County,
	Jian City,
	Jiangxi Province,
	the PRC.
21 5.	Flat B on 3rd Floor including Flat Roof,	1,430,000.–	40%	572,000.–
	Elaine Court,
	Nos.211 to 215 Tung Choi Street,
	Kowloon, Hong Kong.
21 6.	Flat No.14 on 3rd Floor,	4,700,000.–	40%	1,880,000.–
	Shing Tak Mansion,
	No. 15 Peace Avenue,
	Kowloon, Hong Kong.

IV – 53

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Property Shum Yip Terra (Holdings) Co., Ltd. 21 7. 21st and 22nd Floor of Jinsong Building（勁松大廈） Che Gong Miao Industrial Zone, Futian District, Shenzhen, the PRC. 21 8. Units 14A and 25A Jinghai Garden（京海花園） Futian District, Shenzhen, the PRC. 21 9. Market Units 101-108, 201, 202 and Clubhouse Terra Bihai Hong Shu Yuan Furong Road and Binhe Road Futian District Shenzhen, the PRC. Maanshan Shum Yip Real Estate Co., Ltd. 2 20. Units 1-602 and 1-603 Mingzhu Times Square（名築時代廣場） Huayu Road Yushan District Ma’anshan City, Anhui Province, the PRC Sub-total:	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) No Commercial Value 75% No Commercial Value 3,600,000.– 75% 2,700,000.– 34,000,000.– 75% 25,500,000.– 3,200,000.– 99.54% 3,185,280.– 1,432,400,000 1,258,329,420	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) No Commercial Value 75% No Commercial Value 3,600,000.– 75% 2,700,000.– 34,000,000.– 75% 25,500,000.– 3,200,000.– 99.54% 3,185,280.– 1,432,400,000 1,258,329,420
		1,258,329,420

IV – 54

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Group	VI–Properties Rented by the Group
2 21.	Office Units on 8th Floor	No Commercial	100%	No Commercial
	New East Ocean Centre	Value		Value
	No.9 Science Museum Road
	Kowloon, Hong Kong.
Shum Yip Southern Land (Holdings) Co., Ltd.
2 22.	Units 2301 and 2302	No Commercial	100%	No Commercial
	Haisong Building	Value		Value
	Tairan 9th Road
	Che Gong Miao Industrial Zone,
	Futian District,
	Shenzhen,
	the PRC.
2 23.	Units 1 and 5 on 11th Floor	No Commercial	100%	No Commercial
	Zhujiang International Building	Value		Value
	No.112 Yuehua Road
	Yuexiu District
	Guangzhou City
	Guangdong Province
	the PRC
22 4.	Northern Portion on 2nd Floor	No Commercial	100%	No Commercial
	Yundonghai Street Office Building	Value		Value
	Yundonghai Avenue
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC
22 5.	Building in Yangmei Power Management	No Commercial	100%	No Commercial
	Station	Value		Value
	Yangmei Village
	Xinan Street
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC

IV – 55

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
22 6.	Unit 702 and 802	No Commercial	100%	No Commercial
	Block 13	Value		Value
	Luhu City Garden（綠湖城市花園）
	No.28 Sanda Road（三達路）
	Xinan Street
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC
22 7.	Unit 201, Block 7	No Commercial	100%	No Commercial
	Fulin House	Value		Value
	Nan Yuan Garden
	Beijiao Town
	Shunde District
	Foshan City
	Guangdong Province
	the PRC.
22 8.	Unit 201, Block 11	No Commercial	100%	No Commercial
	Fulin House	Value		Value
	Nan Yuan Garden
	Beijiao Town
	Shunde District
	Foshan City
	Guangdong Province the PRC.
22 9.	Unit 501, Block 7	No Commercial	100%	No Commercial
	Fuyi House	Value		Value
	Nan Yuan Garden
	Beijiao Town
	Shunde District
	Foshan City
	Guangdong Province the PRC.
2 30.	15th Floor	No Commercial	100%	No Commercial
	Jinsheng Building	Value		Value
	No.29 Guanghai Avenue
	Xinan Town
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC.

IV – 56

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 31.	Unit A3-901 on 9th Floor	No Commercial	100%	No Commercial
	Dongjin Court	Value		Value
	Donghai Lanwan
	No.11 Jiaoyu Dong Road
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC.
2 32.	Unit A5-1503 on 15th Floor	No Commercial	100%	No Commercial
	Dongjin Court	Value		Value
	Donghai Lanwan
	No.11 Jiaoyu Dong Road
	Sanshui District
	Foshan City
	Guangdong Province
	the PRC.
Shum	Yip Pengji Holdings Co., Ltd.
23 3.	Shop Nos.301, 302, 303 and 304 on Level	No Commercial	100%	No Commercial
	3, Shop Nos.401 and 402 on Level 4,	Value		Value
	Clubhouse B
	Noah Mountain Forest
	Xingsha Town
	Changsha County
	Changsha City
	Hunan Province
	the PRC.
23 4.	Shop Nos.206, 207 and 208 on Level 2,	No Commercial	100%	No Commercial
	Clubhouse B	Value		Value
	Noah Mountain Forest
	Xingsha Town
	Changsha County
	Changsha City
	Hunan Province
	the PRC.

IV – 57

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
23 5.	Units 1510-1512 on 15th Floor	No Commercial	100%	No Commercial
	Block B	Value		Value
	Huakai Plaza
	Yuanmei Road
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.
23 6.	Unit 713 on 7th Floor	No Commercial	100%	No Commercial
	Block 6	Value		Value
	Zhongxin Xin Tiandi
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.
23 7.	Unit 605 on 6th Floor	No Commercial	100%	No Commercial
	Block 6	Value		Value
	Zhongxin Xin Tiandi
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.
23 8.	Unit 1512 on 15th Floor	No Commercial	100%	No Commercial
	Block 2	Value		Value
	Zhongxin Xin Tiandi
	Nancheng District
	Dongguan City
	Guangdong Province,
	the PRC.
23 9.	Unit 604 on 6th Floor	No Commercial	100%	No Commercial
	Jinsheng House	Value		Value
	Huangjin Garden
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.

IV – 58

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 40.	Unit 701 on 7th Floor	No Commercial	100%	No Commercial
	Block 2	Value		Value
	Daohua Village
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.
2 41.	Building on No.15	No Commercial	100%	No Commercial
	Dong Yi Lane	Value		Value
	Huangjin Yuan Street
	Heng Mei Village
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.
2 42.	Unit 506 on 5th Floor	No Commercial	100%	No Commercial
	Block 16	Value		Value
	Ju Xiang Yuan
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.
2 43.	Unit 404 on 4th Floor	No Commercial	100%	No Commercial
	Block 2	Value		Value
	Heng Mei Apartment
	Nancheng District
	Dongguan City
	Guangdong Province
	the PRC.
2 44.	Unit 407 on 4th Floor	No Commercial	100%	No Commercial
	Block 1	Value		Value
	Xin Shidai Garden
	Huizhou City
	Guangdong Province
	the PRC.

IV – 59

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
24 5.	Unit 2305 on 23rd Floor	No Commercial	100%	No Commercial
	Block 2	Value		Value
	City Plaza
	Huicheng District
	Huizhou City
	Guangdong Province
	the PRC.
24 6.	Unit 105 on 1st Floor	No Commercial	100%	No Commercial
	Block M5	Value		Value
	Hill House（萬林湖）
	Shanbeikeng
	Huizhou City
	Guangdong Province
	the PRC.
24 7.	Unit 3-401 on 4th Floor	No Commercial	100%	No Commercial
	Block A13-A17	Value		Value
	Hill House
	Shanbeikeng
	Huizhou City
	Guangdong Province
	the PRC.
24 8.	Units 201, 203 and 204 on 2nd Floor and 111, 112,	No Commercial	100%	No Commercial
	113 and 114	Value		Value
	on 1st Floor
	Block M7
	Hill House
	Shanbeikeng
	Huizhou City
	Guangdong Province
	the PRC.
24 9.	Unit 202 on 2nd Floor	No Commercial	100%	No Commercial
	Block M7	Value		Value
	Hill House
	Shanbeikeng
	Huizhou City
	Guangdong Province
	the PRC.

IV – 60

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 50.	Unit 116 on 1st Floor	No Commercial	100%	No Commercial
	Block M7	Value		Value
	Hill House
	Shanbeikeng
	Huizhou City
	Guangdong Province
	the PRC.
2 51.	Unit 115 on 1st Floor	No Commercial	100%	No Commercial
	Block M7	Value		Value
	Hill House
	Shanbeikeng
	Huizhou City
	Guangdong Province
	the PRC.
2 52.	Factory A	No Commercial	100%	No Commercial
	Zone 2	Value		Value
	Tong Fu Yu Industrial Park
	（同富園工業園）
	Longhua Town
	Baoan District
	Shenzhen City
	the PRC.
2 53.	Unit JL3-304 on 3rd Floor	No Commercial	100%	No Commercial
	Commercial Podium of	Value		Value
	Jilian Building
	Lianhua Bei
	Futian District
	Shenzhen,
	the PRC.
25 4.	Unit 409-410 on 4th Floor	No Commercial	100%	No Commercial
	Block B	Value		Value
	Feng Shen Commercial Centre
	Feng Shen Avenue
	Huadu District
	Guangzhou City
	Guangdong Province
	the PRC

IV – 61

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
25 5.	4th Floor	No Commercial	100%	No Commercial
	Block B Wei Lai Cheng	Value		Value
	No.498 Zhujiang Road
	Xuanwu District
	Nanjing City
	Jiangsu Province
	the PRC.
25 6.	Levels 1 to 2	No Commercial	100%	No Commercial
	Environment Bureau	Value		Value
	Taizhou City
	Jiangsu Province
	the PRC.
25 7.	Office Building in Rest Home of	No Commercial	100%	No Commercial
	The Anhui Province Geology and	Value		Value
	Mineral Resources Bureau
	Chaohu City
	Anhui Province
	the PRC.
25 8.	Unit 4-401	No Commercial	100%	No Commercial
	Block 21	Value		Value
	City Scenry
	Xiangyang Village
	Chaohu City
	Anhui Province
	the PRC.
25 9.	Unit 3-501	No Commercial	100%	No Commercial
	Block 22	Value		Value
	City Scenry
	Xiangyang Village
	Chaohu City
	Anhui Province
	the PRC.

IV – 62

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 60.	Unit 1-202	No Commercial	100%	No Commercial
	Block 11	Value		Value
	Dongfang Jing Yuan
	Guang Ming Village
	Chaohu City
	Anhui Province
	the PRC.
2 61.	Unit 2-603	No Commercial	100%	No Commercial
	Block 11	Value		Value
	Dongfang Jing Yuan
	Guang Ming Village
	Chaohu City
	Anhui Province
	the PRC.
2 62.	Unit 406	No Commercial	100%	No Commercial
	Block 11	Value		Value
	Dongfang Jing Yuan
	Guang Ming Village
	Chaohu City
	Anhui Province
	the PRC.
2 63.	Unit 1-101	No Commercial	100%	No Commercial
	Block 60	Value		Value
	Dongfang Jing Yuan
	Guang Ming Village
	Chaohu City
	Anhui Province
	the PRC.
264 .	Unit 2-101	No Commercial	100%	No Commercial
	Block 23	Value		Value
	Mei Xin Da Estate
	Chaohu City
	Anhui Province
	the PRC.

IV – 63

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
26 5.	Unit 3-401	No Commercial	100%	No Commercial
	Block 25	Value		Value
	Zone C
	Shiji Xindu
	Chaohu City
	Anhui Province
	the PRC.
26 6.	Training Centre of	No Commercial	100%	No Commercial
	Chaohu Financial Society (also known	Value		Value
	as Tangshang Hotel)
	Chaohu City
	Anhui Province,
	the PRC.
Shum	Yip Shunkang (Group) Co., Ltd.
26 7.	6-Men,	No Commercial	80%	No Commercial
	No.34-1 Weigong South Street,	Value		Value
	Tiexi District,
	Shenyang City,
	Liaoning Province,
	the PRC
26 8.	Level 1 of 2-Men and	No Commercial	80%	No Commercial
	Level 2 of 1-Men	Value		Value
	No.34-1 Weigong South Street,
	Tiexi District,
	Shenyang City,
	Liaoning Province
	the PRC
26 9.	Unit 4-6-1,	No Commercial	46.9%	No Commercial
	No. 9 Leshixiang,	Value		Value
	Dainan Street,
	Shenhe District,
	Shenyang City,
	Liaoning Province,
	the PRC

IV – 64

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 70.	No. 21-5 Wenyi Road,	No Commercial	46.9%	No Commercial
	Shenhe District,	Value		Value
	Shenyang City,
	Liaoning Province,
	the PRC
2 71.	Building on No.1 Jingwei 1st Road	No Commercial	100%	No Commercial
	Taihe County	Value		Value
	Jian City
	Jiangxi Province,
	the PRC.
2 72.	Units 205-208 on 2nd Floor	No Commercial	100%	No Commercial
	And 5th Floor of Zone E and Unit 22,	Value		Value
	Yinlong Jundu Office Building
	No.31 Longgong Road
	Buji Street
	Longgang District
	Shenzhen,
	the PRC.
2 73.	Levels 3 to 6	No Commercial	100%	No Commercial
	Shang Yang Fujing Estate	Value		Value
	Daya Wan Xi District
	Huizhou City
	Guangdong Province,
	the PRC.
27 4.	Land on Xicha Road	No Commercial	100%	No Commercial
	Guangzhou City	Value		Value
	Guangdong Province,
	the PRC.
Shum	Yip Taifu Logistics Group Holdings Co., Ltd.
27 5.	23rd Floor	No Commercial	95.4%	No Commercial
	Shum Yip Centre,	Value		Value
	Shennan Zhong Road,
	Luohu District,
	Shenzhen,
	the PRC.

IV – 65

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
Shum	Yip Terra (Holdings) Co., Ltd.
27 6.	Unit 1-95 on 16th Floor	No Commercial	75%	No Commercial
	of Block 3	Value		Value
	Xing Fu Jia Yuan（幸福家園）
	Xing He Wan Estate（星河灣）
	Chengdu City
	Sichuan Province
	the PRC.
27 7.	Unit 1-7 on 4th Floor	No Commercial	75%	No Commercial
	of Block 2	Value		Value
	Yi Jing Yang Guang（怡景陽光）
	No.280 Shi Jia Nian Dong Road
	Qing Bai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
27 8.	Unit 10 on 5th Floor	No Commercial	75%	No Commercial
	Block 1-3	Value		Value
	Shu Xiang Yuan（書香院）
	No.95 Shi Jia Nian Dong Road
	Qing Bai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
27 9.	Unit 131 on 22nd Floor of Block 2-1	No Commercial	75%	No Commercial
	Phase 3	Value		Value
	Xing Fu Jia Yuan（幸福家園）
	Xing He Wan Estate（星河灣）
	Chengdu City
	Sichuan Province
	the PRC.

IV – 66

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 80.	Unit 8 of Block 4-3	No Commercial	75%	No Commercial
	Shu Xiang Yuan（書香院）	Value		Value
	No.95 Shi Jia Nian Dong Road
	Qing Bai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
2 81.	Unit 4 on 2nd Floor	No Commercial	75%	No Commercial
	Block 1-3	Value		Value
	Phase 2
	Shu Xiang Yuan（書香院）
	No.95 Shi Jia Nian Dong Road
	Qing Bai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
2 82.	Unit 509 on 5th Floor	No Commercial	75%	No Commercial
	of Block 11-1	Value		Value
	Shui Yun Jian（水雲間）
	Xing Fu Jia Yuan（幸福家園）
	Xing He Wan Estate（星河灣）
	Chengdu City
	Sichuan Province
	the PRC.
2 83.	Level 17, Office Building	No Commercial	75%	No Commercial
	Phase 2	Value		Value
	Wuhan Science and Technology
	Convention Centre
	No.546 Luo Yu Road
	Donghu High-Tech Development Zone
	Wuhan City
	Hubei Province
	the PRC.

IV – 67

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

				Property interest
		Market value in	Interest	attributable to the
		existing state as at	attributable	Company as at
	Property	31 December 2012	to the Company	31 December 2012
		(RMB)	(%)	(RMB)
2 84.	Level 3of Block 9	No Commercial	75%	No Commercial
	No.95-1 Shi Jia Nian Dong Road	Value		Value
	（石家碾東路）
	Qing Bai Jiang District
	Chengdu City
	Sichuan Province
	the PRC.
2 85.	Units B204, B205 and B216 on 2nd Floor	No Commercial	75%	No Commercial
	Block B, Terra Quarter	Value		Value
	Che Gong Miao Industrial Zone,
	Futian District,
	Shenzhen,
	the PRC.
2 86.	Units B214, B215 and B217 on 2nd Floor	No Commercial	75%	No Commercial
	Block B, Terra Quarter	Value		Value
	Che Gong Miao Industrial Zone,
	Futian District,
	Shenzhen,
	the PRC.
2 87.	Units 526-529 on 5th Floor	No Commercial	100%	No Commercial
	Block B1	Value		Value
	Innovative Base
	Guanggu Biology City
	No.666 Gaoxin Avenue
	Donghu New-Tech Development Zone
	Wuhan City
	Hubei Province,
	the PRC.
28 8.	No.12 of Block 1 and No.15 of Block 2	No Commercial	37.5%	No Commercial
	No.11 Mu Shu Ling Industrial Area	Value		Value
	Liguang Community
	Guanlan Town
	Baoan District,
	Shenzhen,
	the PRC.

IV – 68

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Property 2 89. Unit 4-23 of Block 2 Jintian Commercial Centre No.126 Wenti Road Da Du Kou District Chongqing City, the PRC. 2 90. Unit 4-26 of East Tower Jintian Commercial Centre No.126 Wenti Road Da Du Kou District Chongqing City, the PRC. 2 91. 5th Floor of No.23 Fengze Road（豐澤路）, Zhangjiawo Industrial Area （張家窩工業園區）, Zhangjiawo Town, Xiqing District, Tianjin City, the PRC. Sub-total: Grand Total:	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) No Commercial Value 100% No Commercial Value No Commercial Value 100% No Commercial Value No Commercial Value 37.5% No Commercial Value No Commercial Value No Commercial Value 34,512,708,800 26,684,104,230	Market value in existing state as at 31 December 2012 Interest attributable to the Company Property interest attributable to the Company as at 31 December 2012 (RMB) (%) (RMB) No Commercial Value 100% No Commercial Value No Commercial Value 100% No Commercial Value No Commercial Value 37.5% No Commercial Value No Commercial Value No Commercial Value 34,512,708,800 26,684,104,230
		No Commercial Value
		26,684,104,230

IV – 69

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

VALUATION CERTIFICATE

Group I – Properties Held by the Group for Sale

Shum Yip Southern Land (Holdings) Co., Ltd.

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

15 Garden Houses and Purple Kylin Hill comprises a parcel 22 Residential Units of land with an area of 145,466.61 Purple Kylin Hill square metres on which eight blocks

（紫麟山花園） of 28-storey residential building, ten Longsheng Avenue blocks of 9-storey residential building Longgang Town and forty one blocks of 3-storey Longgang District garden house will be developed by Shenzhen City phasing. Guangdong Province the PRC The property comprises 15 blocks 3-storey garden house and 22 residential units within the aforesaid 28-storey residential buildings and 9-storey residential building of the subject development. The property was fully completed in 2011.

Purple Kylin Hill comprises a parcel of land with an area of 145,466.61 square metres on which eight blocks of 28-storey residential building, ten blocks of 9-storey residential building and forty one blocks of 3-storey garden house will be developed by phasing.

The property is currently vacant.

RMB162,300,000.–

(100% interest attributable to the Company RMB162,300,000.–)

The gross floor areas of the garden houses and residential units are 4,097.18 square metres and 5,158.03 square metres respectively.

The property is held for a term of 70 years commencing on 28 February 2006 expiring on 28 February 2076.

IV – 70

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Notes:

As revealed by the Building and Land Ownership Certificate dated 7 October 2008, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd. (深業南方地產（集團）有限公司, a wholly-owned subsidiary of the Company) for a term of 70 years commencing on 28 February 2006 and expiring on 28 February 2076.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Building and Land Ownership Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the land use rights of the property are held by Shum Yip Southern Land (Holdings) Co., Ltd. for a terms 70 year commencing on 28 February 2006 and expiring on 28 February 2076 for residential use;
ii. Shum Yip Southern Land (Holdings) Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 71

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Description and tenure

Property

Various Residential Shunde Shum Yip City is a large-scale Units, 6 Shop Units and residential development which will be 158 car Parking Spaces developed by phasing. in Phase 1 Shunde Shum Yip City The property comprises various

（順德深業城） residential units within four blocks Wuchangsha of 30-storey residential building, six Beijiao Town retail units of a 2-storey commercial Shunde District complex completed and 158 car Foshan City parking spaces. The property was Guangdong Province fully completed in 2012. the PRC

Market value in
Particulars of existing state as at occupancy 31 December 2012 The property is RMB231,500,000.– currently vacant. (100% interest
attributable to the Company
RMB231,500,000.–)

The gross floor areas of residential units and retail units are of 21,401.71 square metres and 5,690.37 square metres respectively. The land use rights of the property are held for a term expiring on 4 July 2074.

Notes:

As revealed by the Land Use Rights Certificate dated 15 November 2007, the land use rights of the property are held by Foshan Shunde Shum Yip Property Development Limited（佛山市順德區深業房地產有限公司）, a wholly-owned subsidiary of the Company, for a land use right term expiring on 4 July 2074.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Certificate for Construction Works Completion	:	Yes
Pre-sale Permit	:	Yes

IV – 72

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by three sets of Land Use Rights Certificate, the land use rights of the property are held by Foshan Shunde Shum Yip Property Development Limited for the terms expiring on 4 July 2074 for residential use;
ii. Foshan Shunde Shum Yip Property Development Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 73

APPENDIX IV

Property

Various Residential Units and Various Retail Units Dongcheng Shidai

（東晟時代） Pingshan Town Longgang District Shenzhen City Guangdong Province the PRC

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Market value in existing state as at 31 December 2012

Particulars of

Description and tenure

occupancy

RMB1,593,000,000.–

Dongcheng Shidai is occupying a parcel of land with an area of 72,640.84 square metres on which a commercial/residential development is planned to be developed.

The property is currently vacant.

(100% interest attributable to the Company RMB1,593,000,000.–)

The subject development comprises two blocks of 24-storey residential building, two block of 31-storey residential building, one block of 32-storey residential building, three block of 33-storey residential building and one block of kindergarten of the subject development.

The property comprises various residential units and various retail units within the subject development. The property was fully completed by the end of 2012.

The gross floor areas of residential units and retail units are of 115,204.78 square metres and 19,956.86 square metres respectively.

The property is held for a term of 70 years commencing on 3 September 2007 and expiring on 2 September 2077.

IV – 74

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

Notes:

As revealed by the Building and Land Ownership Certificate dated 30 January 2008, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd. (深業南方地產（集團）有限公司, a wholly-owned subsidiary of the Company) for a term of 70 years commencing on 3 September 2007 and expiring on 2 September 2077.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Building and Land Ownership Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the land use rights of the property are held by Shum Yip Southern Land (Holdings) Co., Ltd. for a terms 70 year commencing on 28 February 2006 and expiring on 28 February 2076for residential use;
ii. Shum Yip Southern Land (Holdings) Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 75

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Various Residential Yu Yuan comprises is occupying Units and Various Retail a parcel of land with an area of Units of Yu Yuan（禦園） 31,197.48 square metres on which a Jinxiu Dong Road and residential development is being built. Jinhui Road Kengzi Town The subject development comprises Longgang District two blocks of 33-storey residential Shenzhen City building, four block of 18-storey Guangdong Province residential building and one block of the PRC 2-storey ancillary building.

The property is RMB211,000,000.– currently vacant. (100% interest attributable to the Company RMB211,000,000.–)

The property comprises various residential units and various retail units within the subject development. The property was completed by the end of 2012.

The gross floor areas of residential units and retail units are of 27,862.43 square metres and 3,000.41 square metres respectively.

The property is held for a term of 70 years commencing on 3 September 2007 and expiring on 2 September 2077.

Notes:

As revealed by the Building and Land Ownership Certificate dated 30 January 2008, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd. (深業南方地產（集團）有限公司, a wholly-owned subsidiary of the Company) for a term of 70 years commencing on 3 September 2007 and expiring on 2 September 2077.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes Pre-sale Pernmit : Yes

IV – 76

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by Shum Yip Southern Land (Holdings) Co., Ltd. for a term commencing on 3 September 2007 and expiring on 2 September 2077;
ii Shum Yip Southern Land (Holdings) Co., Ltd. has obtained the relevant construction approvals as staed in the PRC Legal Opinion for the subject development; and
iii Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 77

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Pengji Holdings Co., Ltd.

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 5. Various units of The property comprises various The property is RMB143,600,000.– Zhongxin Keji Building display premises on level 1, office currently vacant. （眾鑫科技大廈）, premises on levels 1, 3, 4, 6 and 7 (100% interest Ba Gua Ling Industrial and motel premises on levels 12 and attributable to the Area 20 of a 20-storey guest house/office Company Ba Gua Ling building completed in 2001. RMB143,600,000.–) Futian District Shenzhen The total gross floor area of the the PRC. property is 9,572.00 square metres. The property is held for a term commencing on 12 December 2001 and expiring on 11 November 2051.

Notes:

Pursuant to various sets of Building and Land Ownership Certificate dated 12 June 2008 and 13 June 2008 respectively, the property is held by Shum Yip Pengji Holdings Co., Ltd., a wholly-owned subsidiary of the Company, for a term commencing on 12 December 2001 and expiring on 11 November 2051.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Building and Land Ownership Certificate : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i The land use rights of the property is held by Shum Yip Penji Holdings Co., Ltd. for a term commencing on 12 December 2001 and expiring on 11 December 2051 for office purpose; and
ii Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 78

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various garden houses Shenye Rui Cheng comprises two and residential units of parcels of land with a total area Shenye Rui Cheng of 225,096 square metres which

（深業睿城） is planned for a large-scale low Xingsha Town density residential development to be Changsha County completed by phasing. Changsha City Hunan Province The property comprises 25 blocks the PRC. 3-storey garden houses and 134 residential units of 6 blocks of 9-storey residential building which were completed in 2012.

The property is RMB160,000,000.– currently vacant. (80% interest
attributable to the Company
RMB 128,000,000.–)

The gross floor areas of the garden houses and residential units are 6,185.16 square metres and 17,948.66 square metres respectively. The property is held for the terms expiring between on 16 June 2046 and 16 June 2076.

Notes:

As revealed by two sets of Land Use Rights Certificate both dated 26 January 2011, the subject land parcel with a total area of 225,096 square metres is held by Changsha Pengji Property Co. Ltd.（長沙鵬基地產有限公司）, a 80%-owned subsidiary of the Company, for the land use right terms expiring between on 16 June 2046 and 16 June 2076 for commercial and residential purposes respectively.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Pre-sale Permit : Yes

IV – 79

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property is held by Changsha Pengji Property Co. Ltd. for the terms expiring between on 16 June 2046 and 16 June 2076 for commercial and residential purposes respectively;
ii. Changsha Pengji Property Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 80

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Various Garden Houses, Hill House is occupying four parcels Residential Units, Shops of land with a total area of 423,658.40 and Car Parking Spaces square metres and is a large-scale low of Phases 1 to 6 density residential development to be Hill House（萬林湖） completed by phasing. Shanbeikeng Huizhou City The property comprises 17 blocks Guangdong Province of 2 to 3-storey garden houses, 10 the PRC residential units of 7 to 18-storey residential building, 9 retail shops and various car parking spaces completed between in 2008 and 2011.

The property is currently vacant.

RMB296,000,000.–

(100% interest attributable to the Company RMB296,000,000.–)

The gross floor areas of the garden houses, residential units and retail shops are 9,380.73 square metres, 1,851.03 square metres and 7,628.57 square metres respectively.

The property is held for a land use right term expiring on between 5 January 2075 and 16 June 2075.

Notes:

As revealed by three sets of Land Use Rights Certificate, three parcels of land use rights of the property with a total area of 330,973.20 square metres are held by Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, for the term expiring on 5 January 2075 for residential purpose.
As revealed by another set of Land Use Rights Certificate, the remaining portion of the property with an area of 92,685.20 square metres is held by Huizhou Pengji Investment Limited for a term expiring on 16 June 2075 for residential purpose.

IV – 81

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by four sets of Land Use Rights Certificate, the property is held by Huizhou Pengji Investment Limited for a term expiring on between 5 January 2075 and 16 June 2075 for residential purpose;
ii. Huizhou Pengji Investment Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 82

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various Garden Houses, Hillsides Villas is occupying two Various Residential parcels of land with a total area of Units and Retail Units 465,653.60 square metres and is a of Hillsides Villas large-scale low density residential

（半山名苑） development to be completed by Area Nos. 16 and 72 phasing. As advised, the subject Zhongkai development will be fully completed High-Technology Zone by the end of 2014. Huizhou City Guangdong Province The property comprises various the PRC blocks of 3-storey garden houses, various retail units and various residential units of 2 blocks of 4-storey residential buildings fully completed in 2012.

The property is RMB182,400,000.– currently vacant. ( 100% interest attributable to the Company RMB182,400,000.– )

The gross floor areas of the garden houses, residential units and retail units are 17,219.62 square metres, 3,088.81 square metres and 4,037.76 square metres respectively.

The property is held for a term expiring on 21 March 2047 and 21 March 2077 for commercial and residential purposes respectively.

Notes:

As revealed by the two sets of Land Use Rights Certificate both dated 8 August 2007, the property is held by 惠州市仲愷鵬基投資有限公司 Huizhou Zhongkai Pengji Investment Limited（惠州市仲愷鵬基投資有限公司）, a wholly-owned subsidiary of the Company, for a term expiring on 21 March 2047 and 21 March 2077 for commercial and residential purposes respectively.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

IV – 83

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Land Use Rights Certificate, the property is held by Huizhou Zhongkai Pengji Investment Limited for a term expiring on 21 March 2047 and 21 March 2077 for commercial and residential purposes respectively;
ii. Huizhou Zhongkai Pengji Investment Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 84

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure

Various Residential Euro-view Garden comprises a parcel Units of Phase I and II of land with an area of 122,771.45 Euro-view Garden square metres on which thirty blocks

（歐景麗苑） of 6 to 17-storey residential building Gangkou Avenue will be developed. Wanjiang District Dongguan City The property comprises 527 Guangdong Province residential units within Phase I and the PRC II of the subject development. The property was completed in 2012.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB442,800,000.– currently vacant. (100% interest attributable to the Company RMB442,800,000.–)

The gross floor areas of the property is of 14,397.46 square metres, 68,124.15 square metres.

The property is held for a term expiring on 29 December 2076.

Notes:

As revealed by the Land Use Rights Certificate (reference no. 東府國用(2007)第特443號, the property is held by Dongguan Gaofa Property Development Co., Ltd.（東莞市高發房地產有限公司）, a wholly-owned subsidiary of the Company, for a term expiring on 29 December 2076 for commercial and residential purposes.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property is held by Dongguan Gaofa Property Development Co., Ltd. for a term expiring on 29 December 2076 for commercial and residential purposes;
ii. Dongguan Gaofa Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 85

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various Residential The property comprises a parcel of Units within Phases 1 land with an area of 62,330.80 square Fairview City metres on which 15 blocks 18-storey

（姜堰錦繡姜城） residential building. Jiangyan Avenue and Shanghai Road The property comprises 124 Jiangyan residential units within Phase I of the Taizhou City subject development. The property Jiangsu Province was completed in 2011. the PRC

The property is RMB73,000,000.– currently vacant.

(100% interest
attributable to the Company
RMB73,000,000.–)
The gross floor areas of the residential units is of 16,279.87 square metres respectively.

The property is held for a term expiring on 8 July 2079.

Notes:

Pursuant to two sets of Land Use Rights Contract with its supplement contract both dated 8 July 2009 and 20 April 2010 respectively entered into between Jiangyan City Land Resource Bureau（姜堰市國土資源局）(“the Bureau”) and Taizhou Shum Yip Pengji Investment Limited（泰州深業鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter acquired the land use rights in the subject development with a total area of 284,790 from the Bureau at a total consideration of RMB451,196,781 . As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 16 July 2009, the land use rights of the property with and area of 62,330.80 square metres are held by Taizhou Shum Yip Pengji Investment Limited for a term expiring on 8 July 2079 for commercial and residential purposes.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 284,790.00 square metres Land Use : Commercial/Residential Plot Ratio : ≦2.50 Site Coverage : ≦50% (Com.); 20%-28% (Res.) Greenery Coverage : ≧20% (Com.); 30% (Res.)

IV – 86

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by Taizhou Shum Yip Pengji Investment Limited for a land use right term expiring on 8 July 2079 for commercial and residential purposes;
ii. Taizhou Shum Yip Pengji Investment Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 87

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Shumkang (Group) Co., Ltd.

Property Description and tenure
1. Meibo Trading Centre The subject development which is and Meibo Apartments, occupying a parcel of land with an western side of area of 28,613.80 square metres Xiaonan Street, comprises two 26-storey residential Shenhe District buildings both surmounting an Shenyang City 8 -storey commercial/bus station Liaoning Province podium. The development were the PRC completed in 2011. The property comprises various commercial and residential units within the development with a total gross floor area of the property is approximately 55,728.36 square metres. The property is held for a land use rights term expiring on 2 November 2057.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB305,000,000.– currently vacant. ( 74.55% interest attributable to the Company RMB 227,377,500.–)

Notes:

Pursuant to the Land Use Rights Contract entered into between Shenyang Plan & Land Resources Bureau（瀋陽市規劃和國土資源局）and Shenyang Wuai Shumkang Property Development Co. Ltd.（沈陽五愛深港房地產開發有限公司）, a 74.55%-owned subsidiary of the Company, issued on 2 November 2007, the latter acquired the land use rights of the property for commercial/residential/transportation development purpose at a consideration of RMB310,001,909.20. As confirmed by the Group, the aforesaid consideration was fully settled.
As stipulated in the Land Use Rights Certificate (Ref: Chen Yang Guo Yong (2007) Di No. 0373（沈陽國用(2007)第0373號）dated 3 December 2007, the land use rights of the property is held by Shenyang Wuai Shumkang Property Development Co. Ltd. for a term expiring on 2 November 2057 for commercial, residential and transportation uses.
As revealed by the Construction Land Use Planning Permit（建設用地規劃許可證）(Ref: Shen Gui Tu Zheng Zi 2007 Nian No. 0079（沈規土證字2007年0079號）) issued by the Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）on 26 April 2007, the construction site of the property with an area of 28,613.8 square metres is in compliance with the town planning controls.

IV – 88

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed by the Planning Permit for Construction Works（建設工程規劃許可證）(Ref: Chen Gui Jian Zheng Zi 2008 Nian No. 0018（沈規建証字2008年0018號）issued by Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）dated 4 March 2008, the construction works of with planned gross floor area of 157,204.36 square metres are in compliance with the construction work requirements and have been approved.
As revealed by the Construction Works Commencement Permits（建築工程施工許可證）(Ref: 210102201007050101) issued by the Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）on 10 March 2008, the construction of the subject buildings with a total gross floor area of 157,204.36 square metres has been allowed.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Building Ownership Certificate	:	No
Construction Land Use Planning Permit	:	Yes
Planning Permit for Construction Works	:	Yes
Construction Works Commencement Permits	:	Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by Shenyang Wuai Shumkang Property Development Co. Ltd.（沈陽五愛深港房地產開發有限公司）for a land use rights term expiring on 2 November 2057 for commercial, residential and transportation purposes;
ii. The land use rights of the property are subject to the mortgage in favour of the Bank of China – Shenzhen Branch and Shenyang Branch;
iii. As confirmed by the Company, the property is not subject to any seizure and other third party encumbrances; and
iv. Shenyang Wuai Shumkang Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development.

IV – 89

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Terra (Holdings) Co., Ltd.

==> picture [428 x 203] intentionally omitted <==

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

Market value in
Particulars of existing state as at
Property Description and tenure occupancy 31 December 2012
12. Various Industrial Units Terra Building is a 25-storey The property is RMB3,060,000,000.–
of Terra Building industrial building completed in 2012. currently vacant.
（泰然大廈） (75% interest
Che Gong Miao The property comprises 204 industrial attributable to the
Industrial Zone, units of the subject building. Company
Futian District, RMB2,295,000,000.–)
Shenzhen, The total gross floor area of the
the PRC. property is 101,938.28 square.
The property is held for a term of 50
year commencing on 30 June 2007
and expiring on 29 June 2057.
----- End of picture text -----

Notes:

As revealed by the Building and Land Ownership Certificate dated 14 March 2011, the land use rights of the property is held by Shum Yip Terra (Holdings) Co., Ltd., a 75%-owned subsidiary of the Company, for a term of 50 years commencing on 30 June 2007 and expiring on 29 June 2057.
As revealed from the aforesaid Buiding and Land Ownership Certificate, the subject development is subject to the following material development conditions:

Site Area : 24,521.70 square metres Land Use : Industrial Plot Ratio : ≦5.33 Site Coverage : ≦44%

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Buiding and Land Ownership Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

IV – 90

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the land use rights of the property is held by Shum Yip Terra (Holdings) Co., Ltd. for a term of 50 years commencing on 30 June 2007 and expiring on 29 June 2057;
ii Shum Yip Terra (Holdings) Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii The land use rights in the property is subject to a mortgage in favour of Ping An Bank Ltd – Shenzhen Branch（平安銀行股份有限公司深圳分行） ; and
iv Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 91

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Three Garden Houses Nanhu Rose Bay is a large-scale and Various Residential residential development which will be Units and Various Shops developed by phasing. of Phase 1 – 3 Nanhu Rose Bay The property comprises three

（南湖玫瑰灣） 3-storey’s garden houses, various Wangjiawan residential units and various retail Shizishan Street shops within fourteen blocks of 5 to Wuhan City 33-storey residential building which Hubei Province fully completed in 2012. the PRC.

The property is RMB588,000,000.– currently vacant.

(75% interest
attributable to the Company
RMB441,000,000.–)

The gross floor areas of garden houses, residential units and retail shops are of 470.70 square metres, 48,341.98 square metres and 8,080.74 square metres respectively.

The property is held for a term expiring on 16 August 2075.

Notes:

As revealed by the Land Use Rights Certificate dated 30 August 2005, the land use rights of the property with an area of 268,361.04 square metres is held by Wuhan Terra Property Development Co., Ltd.（武漢市泰然房地產開發有限公司）, a 75%-owned subsidiary of the Company, for a term expiring on 16 August 2075 for residential use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by five sets of Land Use Rights Certificate, the land use rights of the property are held by Wuhan Terra Property Development Co., Ltd. for a land use right term expiring on 16 August 2075 for residential use;
ii. Wuhan Terra Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 92

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure
1. Various Residential Yihu Rose Garden is occupying five Units and Various Shops parcels of land with a total area of of Zone A and B in 112,039.32 square metres on which a Phase 1 large-scale residential development is Yihu Rose Garden planned.
（怡湖玫瑰苑） Yihu Road, Qingjiang The property comprises various Bei Road and residential units and various retail Qingjiang Dong Road units within seven blocks of 5 to Qingbai Jiang District 30-storey residential building which Chengdu City completed in 2012. Sichuan Province the PRC. The gross floor areas of residential units and retail units are 56,847.19 square metres and 2,405.14 square metres respectively.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is RMB360,500,000.– currently vacant. (52.5% interest attributable to the Company RMB189,262,500.–)

Notes:

Pursuant to five sets of Land Use Rights Contract dated 18 August 2009 and 10 February 2010 respectively entered into between Qingbai Jiang District Land Resource Bureau（青白江區國土資源局）(“the Bureau”) and 成都市怡湖投資有限公司 ( now known as Chengdu City Shum Yip Terra Property Development Co., Ltd.（成都市深業泰然房地產開發有限公司）) which is a 52.5%-owned subsidiary of the Company , the latter acquired portion of the land use rights of the property with a total area of 112,039.32 square metres from the Bureau at a total consideration of RMB277,295,700.–. As confirmed by the Company, as at the valuation date, a sum of RMB185,126,684.– for the aforesaid land purchase consideration has been fully settled.
As revealed by three sets of Land Use Rights Certificate all dated 11 May 2011, the land use rights of the property with a total area of 60,352.63 square metres are held by Chengdu City Shum Yip Terra Property Development Co., Ltd. for a term expiring on either 17 August 2049 or 17 August 2079.
As revealed by another Land Use Rights Certificate dated 11 May 2011, the land use rights of the property with an area of 14,446.03 square metres are held by Chengdu City Shum Yip Terra Property Development Co., Ltd. for a term expiring on either 29 June 2050 or 29 June 2080.

IV – 93

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes (74,798.66 square metres) Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

Our valuation does not include any value of portion of the subject land which land grant procedures have not yet completed as at the valuation date.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property with a total area of 74,798.66 square metres are held by Chengdu Shum Yip Terra Property Development Co., Ltd. for a term expiring on 17 August 2049, 29 June 2050, 17 August 2079 and 29 June 2080 respectively for commercial and residential uses; and
ii. Chengdu Shum Yip Terra Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development .
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 94

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various Residential The property comprises various Unit of residential units of a 19-storey Tianan Qinghua residential building and various Apartment, Various industrial unit within eleven blocks Industrial Units within of 3 to 7 storey industrial building Phases 5 and 6, completed between in 2009 and 2012. Tianan Panyu Ecological Hi-tech Park The gross floor areas of residential No.730 Yingbin Road units and industrial units are Panyu District of 15,764.88 square metres Guangzhou City and 114,649.38 square metres Guangdong Province respectively. the PRC.

The property is RMB1,367,600,000.– currently vacant. (37.5% interest attributable to the Company RMB512,850,000.–)

The property is held for a term of expiring on 24 September 2052.

Notes:

As revealed by the Land Use Rights Certificate dated 28 August 2003, the land use rights in the industrial buildings with an area of 226,987.90 square metres is held by 廣州市番禺節能科技園發展有限公司, which is owned as to 37.5% by the Company for a term of expiring on 24 September 2052 for industrial use.
As revealed by various sets of Building and Land Ownership Certificate, the property is held by 廣州市番禺節能科技園發展有限公司, which is owned as to 37.5% by the Company, for a land use right term expiring on 24 September 2052 for dormitory use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Land Use Rights Certificate : Yes Building and Land Ownership Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by Land Use Rights Certificate and various sets of Building and Land Ownership Certificate, the property is held by 廣州市番禺節能科技園發展有限公司 for a term expiring on 24 September 2052 for dormitory and industrial use respectively;
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 95

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Various Indusrial The property comprises various Units of Block A, industrial units of three blocks of B and C 15-storey industrial building, various in Tianan Shanggu residential units of eight blocks of

（天安尚谷）, 16-storey residential building and 957 Various Residential car parking spaces within the subject Units of development. The aforesaid buildings Block 1 to 8 were fully completed in 2012. in Tianan Shangchang

（天安尚城）and The gross floor areas of industrial 957 Car Parking Spaces, units and residential units are of Tianan Changzhou 102,335.53 square metres and Cyber Park, 24,705.64 square metres respectively. Wujin Hi-tech Development Zone, The property is held for a term Changzhou City, commencing on 11 September 2007 Jiangsu Province, and expiring on 10 September 2057. the PRC.

The property comprises various industrial units of three blocks of 15-storey industrial building, various residential units of eight blocks of 16-storey residential building and 957 car parking spaces within the subject development. The aforesaid buildings were fully completed in 2012.

The gross floor areas of industrial units and residential units are of 102,335.53 square metres and 24,705.64 square metres respectively.

The property is currently vacant.

RMB416,000,000.–

(37.5% interest attributable to the Company RMB156,000,000.–)

Notes:

As revealed by five sets of Land Use Rights Certificate dated 13 November 2007 and 19 April 2010 respectively, the land use rights of the property with a total area of 171,440.70 square metres are held by Changzhou Tianan Cyber Park (Property) Co., Ltd.（常州天安數碼城（置業）有限公司）, which is owned as to 37.5 % by the Company, for a term expiring on 10 September 2057 for industrial use.
As revealed by three sets of Land Use Rights Certificate dated 13 November 2007 and 19 April 2010 respectively, the land use rights of the property with an area of 118,454.30 square metres are held by Changzhou Tianan Cyber Park (Property) Co., Ltd. for a term expiring on 10 September 2077 for residential use.
As revealed by the Building Ownership Certificate registered on 8 October 2010, the subject building with a total gross floor area of 54,817.57 square metres are held by Changzhou Tianan Cyber Park (Property) Co., Ltd. for a term commencing on 11 September 2007 and expiring on 10 September 2057. As confirmed by the Group, the property constitutes the unsold portion of the subject building.

IV – 96

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Building and Land Ownership Certificate : Yes Certificate for Construction Works Completion : Yes Pre-sale Permit : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in portion of the property with an area of 44,655.20 square metres is held by Changzhou Tianan Cyber Park (Property) Co., Ltd. for a term expiring on 10 September 2057 for industrial purpose;
ii. As revealed by the Land Use Rights Certificate, the land use rights in portion of the property with an area of 36,193.80 square metres is held by Changzhou Tianan Cyber Park (Property) Co., Ltd. for a term expiring on 10 September 2077 for residential purpose;
iii. As revealed by the Building Ownership Certificate, the subject building with a total gross floor area of 54,817.57 square metres are held by Changzhou Tianan Cyber Park (Property) Co., Ltd.;
iv. Changzhou Tianan Cyber Park (Property) Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development;
v. The land use rights in the property with an area of 36,193.80 square metres are subject to a mortgage in favour of Jiangsu Bank Ltd. – Changzhou Branch for a term expiring on 28 March 2014; and
vi. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 97

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Various Industrial The subject development comprises Units of Block A1, A2, two parcels of land with a total area B1, B2, B3 of 173,204.00 square metres on which Phase 1 an industrial/residential development Tianan Jiangyin will be erected. Cyber Park, Changshan Avenue The property comprises various Xuyao Village, industrial units within two blocks of Chengdong Street, 15-storey industrial building and three Jiangyin City, blocks of 3-storey industrial building Jiangsu Province, which all completed in 2012. the PRC.

The property is currently vacant.

RMB257,800,000.–

(37.5% interest attributable to the Company RMB96,675,000.–)

The total gross floor area of the property is of 67,838.50 square metres.

The property is held for the terms of expiring on between 14 September 2060 and 14 September 2080.

Notes:

Pursuant to two sets of Land Use Rights Contract both dated 9 September 2010 entered into between Jiangyin City Land Resource Bureau（江陰市國土資源局）(“the Bureau”) and Shenzhen Tianan Cyber Park (Group) Co., Ltd.（深圳市天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter acquired the land use rights of the property from the Bureau at a total consideration of RMB103,600,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 14 November 2010, the land use rights of the property with an area of 103,949.00 square metres are held by Jiangyin Tianan Cyber Park Property Co., Ltd.（江陰市天安數碼城置業有限公司）, which is owned as to 37.5% by the Company, for a term expiring on 14 September 2060 for industrial use.
As revealed by the Land Use Rights Certificate dated 14 November 2010, the land use rights of the property with an area of 69,255.00 square metres are held by Jiangyin Tianan Cyber Park Property Co., Ltd.（江陰市天安數碼城置業有限公司）for a term expiring on 14 September 2080 for residential use.

IV – 98

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Pre-sale Permit : Yes Completion Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Land Use Rights Certificate, the land use rights in the property are held by Jiangyin Tianan Cyber Park Property Co., Ltd. for a term expiring on 14 September 2060 and 14 September 2080 respectively for industrial and residential uses;
ii. A parcel of the subject land with an area of 103,949 square metres is subject to a mortgage in favour of The Bank of Jiangsu – Jiangyin Branch（江蘇銀行股份有限公司江陰支行）; and
iii. Jiangyin Tianan Cyber Park Property Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development ; and
iv Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 99

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

Various Industrial Units The property comprises a parcel of of Block Nos.A1 and A2 land with an area of 47,316.60 square Tianan Dongguan Cyber metres on which a 3-storey industrial Park, building and a 14-storey industrial Nancheng District, building erected in 2012. Dongguan City, Guangdong Province, The property comprises various the PRC. industrial units within the aforesaid industrial buildings. The total gross floor area of the property is of 18,999.91 square metres. The property is held for a term of expiring on 14 October 2060.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB110,000,000.– currently vacant. (29.3% interest attributable to the Company RMB32,230,000.–)

Notes:

Pursuant to the Land Use Rights Contract dated 14 July 2010 entered into between Dongguan City Land Resource Bureau（東莞市國土資源局）(“the Bureau”) and Dongguan Tianan Cyber Park Co., Ltd.（東莞市天安數碼城有限公司）, which is owned as to 29.3% by the Company, the latter acquired the land use rights of the property with an area of 47,317.00 square metres from the Bureau at a consideration of RMB24,420,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 26 January 2011, the land use rights of the property with an area of 47,316.60 square metres are held by Dongguan Tianan Cyber Park Co., Ltd. for a term expiring on 14 October 2060 for industrial use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Pre-sale Permit	:	Yes
Completion Permit for Construction Works	:	Yes

IV – 100

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property is held by Dongguan Tianan Cyber Park Co., Ltd. for a term expiring on 14 October 2060 for industrial use;
ii. Dongguan Tianan Cyber Park Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 101

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Description and tenure

Property

Vaious Industrial Units The property comprises various of Block No.1-5, industrial units within two blocks Phase I of 8-storey industrial building and Tianan Chongqing three 20-storey industrial building Cyber Park compelted in 2012.

（重慶天安數碼城）, Da Du Kou, The total gross floor area of the Chongqing City, property is of 130,977.06 square the PRC. metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB1,086,000,000.– currently vacant. (37.5% interest attributable to the Company RMB407,250,000.–)

The property is held for a term of expiring on 28 February 2061 for industrial use.

Notes:

Pursuant to the Land Use Rights Contract dated 15 January 2011 entered into between Chongqing City Land Resource and Housing Management Bureau（重慶市國土資源和房屋管理局）(“the Bureau”) and Chongqing Tianan Cyber Park Co., Ltd.（重慶市天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter acquired the land use rights of the property with an area of 123,315.00 square metres from the Bureau at a consideration of RMB511,770,000.– for commercial/residential uses. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to another set of Land Use Rights Contract dated 29 April 2011 entered into between Chongqing City Land Resource and Housing Management Bureau（重慶市國土資源和房屋管理局）(“the Bureau”) and Chongqing Tianan Cyber Park Co., Ltd., the latter acquired the land use rights of the property with an area of 234,453.00 square metres from the Bureau at a consideration of RMB358,610,000.– for industrial use. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As stipulated in the Building and Land Ownership Certificate dated 4 July 2011, the laud use rights in the property with an area of 53,969.50 square metres are held by Chongqing Tianan Cyber Park Co., Ltd. for a term expiring on 28 February 2061 for industrial use.

IV – 102

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Building and Land Ownership Certificate : Yes Pre-sale Permit : Yes Completion Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property are held by Chongqing Tianan Cyber Park Co., Ltd. for a term expiring on 28 February 2061 for industrial use;
ii. Chongqing Tianan Cyber Park Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 103

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Varioius Industrial The property comprises various Units of Block 1 industrial units of an 18-storey in Phase 3 industrial building completed in 2012. Tianan Longgang Cyber Park, The total gross floor area of the Longgang District, property is of 12,213.15 square Shenzhen, metres. the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB165,000,000.– currently vacant. (37.5% interest attributable to the Company RMB61,875,000.–)

The property is held for a term of 50 years commencing on 23 December 2002 and expiring on 22 December 2052.

Notes:

As revealed by the Building and Land Ownership Certificate dated 9 September 2009, the land use rights of the property with an area of 51,995.00 square metres is held by Shenzhen Longgang Tianan Cyber Park Co., Ltd.

（深圳市龍崗天安數碼新城有限公司）, which is owned as to 37.5% by the Company, for a term of 50 years commencing on 23 December 2002 and expiring on 22 December 2052 for industrial use.

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Pre-sale Permit : Yes Completion Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property is held by 深圳市龍崗天安數碼新城有限公司 Suzhou New Development Investment Co., Ltd. for a term expiring on 11 April 2046 for commercial service purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance .

IV – 104

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Land Co., Ltd.

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Serviced Apartment Coastal International Centre is Portion of Coastal a parcel of land with an area of International Centre 26,819.60 square metres on which

（沿海國際中心） a composite development namely No.1296 Ganjiang “Coastal International Centre” are West Road erected in 2009. Jinchang District The property comprises a levels 3 to

Suzhou City 9 of a 9-storey apartment building

Jiangsu Province the PRC within the subject development.

The property is RMB 207,000,000.– currently vacant.

(100% interest attributable to the Company RMB 207,000,000.–)

The total gross floor area of the property is of 14,088.73 square metres.

The property is held for a term expiring on 11 April 2046 for commercial service purpose.

Notes:

As revealed by the Land Use Rights Certificate dated 5 September 2003, the land use rights of the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）, a wholly-owned subsidiary of the Company, for a term expiring on 11 April 2046 for commercial service purpose.
As revealed by various Building Ownership Certificates all dated 19 April 2010, the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Certificate : Yes Building and Land Ownership Certificate : Yes Pre-sale Permit : Yes Completion Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property is held by Suzhou New Development Investment Co., Ltd. for a term expiring on 11 April 2046 for commercial service purpose; and
ii. The property is held by Suzhou New Development Investment Co., Ltd.;
iii. The property is subject to 25 mortgages in favour of China Agricultural Bank – Suzhou Branch ; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Group II – Properties Held by the Group Under Development

Shum Yip Southern Land (Holdings) Co., Ltd.

Property Description and tenure
1. Development Site Shunde Shum Yip City is occupying Phase 2 three parcels of land with a total area Shunde Shum Yip City of 305,543.73 square metres and is a
（順德深業城） large-scale residential development Wuchangsha, which will be developed by phasing. Beijiao Town Shunde District The property comprises 20 blocks of Foshan City 11 to 29-storey residential building. Guangdong Province the PRC Upon completion, a total gross floor area of 135,979.44 square metres will be provided for the property.

Particulars of occupancy

The property is currently vacant.

Market value in existing state as at 31 December 2012

RMB728,400,000.–

(100% interest attributable to the Company RMB728,400,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be completed in mid of 2013.

The property is held for a term expiring on 4 July 2074.

Notes:

As revealed by three sets of Land Use Rights Certificate all dated 15 November 2007, the land use rights of the property is held by 佛山市順德區深業房地產有限公司 Foshan Shunde Shum Yip Property Development Limited, a wholly-owned subsidiary of the Company, for a term expiring on 4 July 2074.
As revealed from the aforesaid Land Use Rights Transfer Supplement Contracts, the property is subject to the following material development conditions:

Site Area : 305,543.73 square metres Land Use : Commercial/Residential Plot Ratio : ≦2.1 Site Coverage : ≦35% Greenery Coverage : ≧30%

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 612,673,000.– and RMB 388,422,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 884,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by three sets of Land Use Rights Certificate, the land use rights of the property are held by Foshan Shunde Shum Yip Property Development Limited for the terms expiring on 4 July 2074 for residential use;
ii. Foshan Shum Yip Property Development Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 107

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises a parcel of Jinshazhou land with an area of 94,519 square Caibin Bei Road metres on which a residential Baiyun District development will be erected. Guangzhou City Guangdong Province Upon completion, the subject the PRC development comprises three blocks of 9-storey residential building, twelve blocks of 25/26-storey residential building and four blocks of single storey commercial building. The total gross floor area for the subject development is 267,763 square metres.

The property is RMB2,652,000,000.– currently vacant.

(100% interest attributable to the Company RMB2,652,000,000.– )

As advised, the property will be fully completed by the end of 2014.

The land use rights of the land are granted for a term of 70 years expiring on 23 January 2081 for residential use.

Notes:

Pursuant to the Land Use Rights Contract with its Revised Contract dated 1 November 2010 and 22 February 2011 respectively entered into between Guangzhou City Land Resource and Real Estate Management Bureau

（廣州市國土資源和房屋管理局）(“the Bureau”), Shum Yip Southern Land (Holdings) Co., Ltd.（深業南方地產（集團）有限公司）and 廣州市深業房地產有限公司 Shum Yip Property Development Co., Ltd.（廣州市深業房地產有限公司）, a wholly-owned subsidiary of the Company, 廣州市深業房地產有限公司 Shum Yip Property Development Co., Ltd. acquired the land use rights of the property from the Bureau at a consideration of RMB2,210,000,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.

As revealed by the Land Use Rights Certificate dated 29 September 2012, the land use rights of the property is held by Guangzhou Shum Yip Property Development Co., Ltd.（廣州市深業房地產有限公司）for a term expiring on 23 January 2081 for residential purpose.

IV – 108

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

he status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 534,000,000.– and RMB 241,963,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 4,820,000,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The Land Use Rights Certificate of the property is held by Guangzhou Shum Yip Property Development Co., Ltd. for a term expiring on 23 January 2081 for residential purpose;
ii. Guangzhou Shum Yip Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 109

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of Baie De Seine is occupying three Phase 1 of parcels of land with a total area of Baie De Seine 200,000.00 square metres on which

（塞納灣） a large-scale commercial/residential Dongyuan County development is planned. Heyuan City Guangdong Province The property comprises portion of the the PRC subject development with a land area of 121,531.40 square metres on which 149 blocks of 2 to 3-storey garden house and a 3-storey clubhouse are under construction.

The property is currently vacant.

RMB303,600,000.–

(100% interest attributable to the Company RMB303,600,000.–)

Upon completion, the property shall provide a total gross floor area of 55,780.74 square metres.

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed in mid of 2013.

The land use rights of the land are granted for the terms of expiring on between 19 November 2050 and 6 March 2081.

Notes:

Pursuant to the Land Use Rights Contract dated 7 March 2011 entered into between Dongyuan County Land Resource Bureau（東源縣國土資源局）(“the Bureau”) and Heyuan Shum Yip Property Development Limited

（河源市深業地產有限公司）, a wholly-owned subsidiary of the Company, the latter acquired portion of land use rights in the property with the area 57,804.90 square metres from the Bureau at a consideration of RMB74,857,346.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.

Pursuant to the Land Use Rights Contract dated 19 November 2010 entered into between Dongyuan County Land Resource Bureau（東源縣國土資源局）(“the Bureau”) and Heyuan Shum Yip Property Development Limited, the latter acquired portion of the land use rights of the property with the area 20,663.70 square metres from the Bureau at a consideration of RMB26,759,492.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.

IV – 110

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Pursuant to the Land Use Rights Contract dated 19 November 2010 entered into between Dongyuan County Land Resource Bureau（東源縣國土資源局）(“the Bureau”) and Heyuan Shum Yip Property Development Limited, the latter acquired portion of the land use rights of the property with the area 121,531.4 square metres from the Bureau at a consideration of RMB157,383,163.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by three sets of Land Use Rights Certificate dated 23 November 2010 and 25 March 2011 respectively, the land use rights with a total area of 200,000.00 square metres of the property is held by Heyuan Shum Yip Property Development Limited for the terms of expiring on between 19 November 2050 and 6 March 2081 for commercial/residential uses.
As revealed from the aforesaid Land Use Rights Contract, the property is subject to the following material development conditions:

Site Area : 850,000.00 square metres. Total Gross Floor Area : 1,530,000.00 square metres. Land Use : Commercial/Residential Plot Ratio : ≦1.8 Site Coverage : ≦40% Greenery Coverage : ≧35%

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 427,349,000.– and RMB 246,585,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 637,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by three sets of Land Use Rights Certificate, the land use rights of the property are held by Heyuan Shum Yip Property Development Limited for the terms of expiring on between 19 November 2050 and 6 March 2081 for commercial/residential uses;
ii. Heyuan Shum Yip Property Development Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 111

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of Phase 1 in Plot 2 Sanshui Yundonghai

（三水雲東海） Baiyun Road, Yundonghai Street Sanshui District Foshan City Guangdong Province the PRC

Sanshui Yundonghai is occupying various parcels of land with a total area of 1,018,579.26 square metres on which a large-scale low density residential development is planned.
The property comprises portion of the subject development with a land area of 427,745.98 square metres on which 378 blocks of 3 to 4-storey garden house are being built.

The property is currently vacant.

RMB483,500,000.–

(100% interest attributable to the Company RMB483,500,000.–)

Upon completion, the property shall provide a total gross floor area of 256,647.59 square metres.

As at the date of our inspection, the construction works of the property were in progress. As advised, 33 blocks of 3 to 4-storey garden house of the property will be completed in the mid of 2013.

The property is held for the terms expiring on between 29 April 2049 and 26 February 2081.

Notes:

Pursuant to eight sets of Land Use Rights Contract entered into between Foshan City Land Resource Bureau （佛山市國土資源理局）(“the Bureau”) and Foshan Sanshui Shum Yip Property Development Limited（佛山三水深業地產有限公司）, a wholly-owned subsidiary of the Company, the latter acquired the land use rights in the subject development with a total area of 1,018,579.21 square metres from the Bureau at a total consideration of RMB527,000,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by six sets of Land Use Rights Certificate dated 22 September 2009 and 31 October 2012 respectively, the land use rights in the subject plot are held by Foshan Sanshui Shum Yip Property Development Limited for the terms expiring on between 29 April 2049 and 30 July 2082.

IV – 112

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 1,018,579.21 square metres Land Use : Residential Plot Ratio : ≦0.6 Site Coverage : ≦16% Greenery Coverage : ≧45%

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 948,167,000- and RMB 189,617,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 3,066,800,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by nine sets of Land Use Rights Certificate, the land use rights of the property are held by Foshan Sanshui Shum Yip Property Development Limited for the terms expiring on 22 September 2049, 29 September 2049, 27 February 2050 and 26 February 2051 respectively for commercial use and expiring on 22 September 2079, 29 September 2079 27 February 2080 and 26 February 2081 respectively for residential use;
ii. Foshan Sanshui Shum Yip Property Development Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 113

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Pengji Holdings Co., Ltd.

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of Shenye Rui Cheng comprises two Phase 1.2A parcels of land with a total area Shenye Rui Cheng of 225,096 square metres which

（深業睿城） is planned for a large-scale low Xingsha Town density residential development to be Changsha County completed by phasing. Changsha City Hunan Province The property comprises thirteen the PRC. blocks of 9 to 33-storey residential building. Upon completion, the property will provided a total gross floor area of 217,037 square metres.

The property is RMB239,000,000.– currently vacant.

(80% interest attributable to the Company RMB191,200,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed by the end of 2014.

The property is held for a term expiring between on 16 June 2046 and 16 June 2076.

Notes:

As revealed by two sets of Land Use Rights Certificate both dated 26 January 2011, the subject land parcel with a total area of 225,096 square metres is held by Changsha Pengji Property Co. Ltd.（長沙鵬基地產有限公司）, a 80%-owned subsidiary of the Company, for the land use right terms expiring between on 16 June 2046 and 16 June 2076 for commercial and residential purposes re spectively.
Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 252,255,000.– and RMB 130,230,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 1,136,000,000 .

IV – 114

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property is held by Changsha Pengji Property Co. Ltd. for the terms expiring between on 16 June 2046 and 16 June 2076 for commercial and residential purposes respectively;
ii. Changsha Pengji Property Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 115

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises a parcel Phase 8 of land with an area of 102,995.80 Hill House（萬林湖） square metres on which a commercial/ Jinbang Road residential development will be Huizhou City erected. As advised, the subject Guangdong Province development will be fully completed the PRC by the end of 2014.

The property is RMB543,000,000.– currently vacant.

(100% interest
attributable to the Company
RMB543,000,000.–)

Upon completion, the maximum permissible gross floor area of the subject development is 257,490.00 square metres.

The property is held for a term expiring on between 27 October 2051 and 27 October 2081.

Notes:

Pursuant to the Land Use Rights Contract dated 27 October 2010 entered into between Huizhou City Land Resource Bureau（惠州市國土資源理局）(“the Bureau”) and Huizhou Pengji Investment Limited (Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）), a wholly-owned subsidiary of the Company, the latter acquired the land use rights in the subject development from the Bureau at a total consideration of RMB221,900,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 22 March 2011, the land use rights of the property is held by Huizhou Pengji Investment Limited for commercial and residential uses.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

IV – 116

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 324,138,000.– and RMB 241,773,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 1,416,000,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the property is held by Huizhou Pengji Investment Limited for a term expiring on between 27 October 2051 and 27 October 2081 for commercial and residential purposes;
ii. Huizhou Pengji Investment Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 117

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Development Site of Phase 2 Fairview City
The property comprises a parcel of land with an area of 69,795 square metres on which various blocks 18-storey residential building will be erected.
（姜堰錦繡姜城） 18-storey residential building will be Jiangyan Avenue and erected. Shanghai Road Jiangyan Upon completion, the property will Taizhou City provided a total gross floor areas of Jiangsu Province 174,594 square metres. the PRC

The property is currently vacant.

RMB263,700,000.–

(100% interest attributable to the Company RMB263,700,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be completed 2014.

The property is held for a term expiring on 8 July 2079.

Notes:

Pursuant to two sets of Land Use Rights Contract with its supplement contract both dated 8 July 2009 and 20 April 2010 respectively entered into between Jiangyan City Land Resource Bureau（姜堰市國土資源局）(“the Bureau”) and Taizhou Shum Yip Pengji Investment Limited（泰州深業鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter acquired the land use rights in the subject development with a total area of 284,790 from the Bureau at a total consideration of RMB451,196,781 . As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 16 July 2009, the land use rights of the property with and area of 62,330.80 square metres are held by Taizhou Shum Yip Pengji Investment Limited 泰州深業鵬基投資有限公司 for a term expiring on 8 July 2079 for commercial and residential purposes.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 284,790.00 square metres Land Use : Commercial/Residential Plot Ratio : ≦2.50 Site Coverage : ≦50% (Com.); 20%-28% (Res.) Greenery Coverage : ≧20% (Com.); 30% (Res.)

IV – 118

APPENDIX IV VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 727,520,000.– and RMB 131,000,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 821,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by Taizhou Shum Yip Pengji Investment Limited for a land use right term expiring on 8 July 2079 for commercial and residential purposes;
ii. Taizhou Shum Yip Pengji Investment Limited has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 119

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of Euro-view Garden comprises a parcel Phase III of land with an area of 122,771.45 Euro-view Garden square metres on which thirty blocks

（歐景麗苑） of 6 to 17-storey residential building Gangkou Avenue will be developed. Wanjiang District Dongguan City The property compreise four blocks of Guangdong Province 11 to 17-storey residential building. the PRC Upon completion, the total gross floor area of the property is of 35,996 square metres

The property is RMB166,000,000.– currently vacant.

(100% interest attributable to the Company RMB166,000,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed by the end of 2014.

The property is held for a term expiring on 29 December 2076.

Notes:

As revealed by the Land Use Rights Certificate (reference no. 東府國用(2007)第特443號, the property is held by Dongguan Gaofa Property Development Co., Ltd.（東莞市高發房地產有限公司）, a wholly-owned subsidiary of the Company, for a term expiring on 29 December 2076 for commercial and residential purposes.
Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 80,000,000.– and RMB 40,000,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 234,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property is held by Dongguan Gaofa Property Development Co., Ltd. for a term expiring on 29 December 2076 for commercial and residential purposes;
ii. Dongguan Gaofa Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 121

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Terra (Holdings) Co., Ltd.

Property Description and tenure 30. Development Site of Nanhu Rose Bay is a large-scale Phase 3 residential development which will be Nanhu Rose Bay developed by phasing. （南湖玫瑰灣） Wangjiawan The property comprises twenty eight Shizishan Street blocks of 5 to 33-storey residential Wuhan City building within the subject Hubei Province development. the PRC. As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed by the end of 2014.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB231,800,000.– currently vacant. (75% interest attributable to the Company RMB173,850,000.–)

The total gross floor area of the property is 116,751.33 square metres.

The property is held for a term expiring on 16 August 2075.

Notes:

As revealed by the Land Use Rights Certificate dated 30 August 2005, the land use rights of the property with an area of 268,361.04 square metres is held by Wuhan Terra Property Development Co., Ltd.（武漢市泰然房地產開發有限公司）, a 75%-owned subsidiary of the Company, for a term expiring on 16 August 2075 for residential use.
As revealed from the Land Use Rights Contract dated 16 August 2005, the subject development is subject to the following material development conditions:

Site Area : 268,361.04 square metres Land Use : Residential Plot Ratio : ≦1.90

IV – 122

APPENDIX IV VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 170,640,000.– and RMB 80,000,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 1,338,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by five sets of Land Use Rights Certificate, the land use rights of the property are held by Wuhan Terra Property Development Co., Ltd. for a land use right term expiring on 16 August 2075 for residential use;
ii. Wuhan Terra Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 123

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of Yihu Rose Garden is occupying five Block 4 and 12 parcels of land with a total area of in Phase I-I 112,039.32 square metres on which a Yihu Rose Garden large-scale residential development is

（怡湖玫瑰苑） planned. Yihu Road, Qingjiang Bei Road and The property comprises a parcel of Qingjiang Dong Road land with an area of 51,919.25 square Qingbai Jiang District metres on which two blocks of 17 to Chengdu City 30-storey residential building will be Sichuan Province developed. the PRC. Upon completion, a total gross floor area of the aforesaid buildings will be 49,464.40 square metres.

The property is currently vacant.

RMB64,400,000.–

(52.5% interest attributable to the Company RMB33,810,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed by the end of 2013.

Notes:

Pursuant to five sets of Land Use Rights Contract dated 18 August 2009 and 10 February 2010 respectively entered into between Qingbai Jiang District Land Resource Bureau（青白江區國土資源局）(“the Bureau”) and 成都市怡湖投資有限公司 ( now known as Chengdu Shum Yip Terra Property Development Co., Ltd.（成都市深業泰然房地產開發有限公司）which is a 52.5%-owned subsidiary of the Company , the latter acquired portion of the land use rights of the property with a total area of 112,039.32 square mtres from the Bureau at a total consideration of RMB277,295,700.–. As confirmed by the Company, as at the valuation date, a sum of RMB185,126,684.– for the aforesaid land purchase consideration has been fully settled.
As revealed by three sets of Land Use Rights Certificate all dated 11 May 2011, the land use rights of the property with a total area of 60,352.63 square metres are held by Chengdu Shum Yip Terra Property Development Co., Ltd. for a term expiring on either 17 August 2049 or 17 August 2079.
As revealed by another Land Use Rights Certificate dated 11 May 2011, the land use rights of the property with an area of 14,446.03 square metres are held by Chengdu Shum Yip Terra Property Development Co., Ltd. for a term expiring on either 29 June 2050 or 29 June 2080.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 112,039.32 square metres Land Use : Commercial/Residential Plot Ratio : ≦6 Site Coverage : ≦45% Greenery Coverage : ≧25%

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 124,368,000.– and RMB 32,286,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 297,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes (74,798.66 square metres) Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

Our valuation does not include any value of portion of the subject land which land grant procedures have not yet completed as at the valuation date.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property with a total area of 74,798.66 square metres are held by Chengdu Shum Yip Terra Property Development Co., Ltd. for a term expiring on 17 August 2049, 29 June 2050, 17 August 2079 and 29 June 2080 respectively for commercial and residential uses; and
ii. Chengdu Shum Yip Terra Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development.
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises four blocks Phases 7 and 8 of 3-storey industrial building, four Tianan Panyu Ecological blocks of 5-storey industrial building, Hi-tech Park a block of 10-storey industrial No.730 Yingbin Road building and two blocks of 20-storey Panyu District industrial building will be developed. Guangzhou City Guangdong Province Upon completion, a total gross floor the PRC. area of 85,404.00 square metres will be provided.

The property is RMB34,500,000.– currently vacant.

(37.5% interest
attributable to the Company
RMB12,937,500.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed by the end of 2014.

The property is held for a term expiring on 24 September 2052.

Notes:

As revealed by the Land Use Rights Certificate dated 28 August 2003, the land use rights of the property with an area of 226,987.90 square metres is held by Guangzhou Panyu Hi-tech Ecological Park Development Co., Ltd.（廣州市番禺節能科技園發展有限公司）, which is owned as to 37.5% by the Company, for a term of expiring on 24 September 2052 for industrial use.
Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 294,567,000.– and RMB 13,500,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 854,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property is held by Guangzhou Panyu Hi-tech Ecological Park Development Co., Ltd. for a term expiring on 24 September 2052 for industrial use;
ii. Guangzhou Panyu Hi-tech Ecological Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 127

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

Development Site of The property comprises a parcel Science Techology of land with an area of 103,104.74 Mansion square metres on which a 11-storey

（科技大廈）, industrial building will be erected. Tianan Nanhai Cyber Park, Upon completion, a total gross floor Nanhai District, area of 36,404.55 square metres will Foshan City, be provided. Guangdong Province, the PRC. As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed by the end of 2013.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB84,000,000.– currently vacant. (33.8% interest attributable to the Company RMB28,392,000.–)

The property is held for a term of expiring on 28 November 2056.

Notes:

As revealed by the Land Use Rights Certificate dated 15 December 2006, the land use rights in the property with an area of 103,104.74 square metres are held by Foshan Tianan Cyber Park Co., Ltd.（佛山市天安數碼城有限公司）, which is owned as to 33.8% by the Company, for a term expiring on 28 November 2056 for industrial use.
As revealed from the aforesaid Land Use Rights Contract, the subject development is subject to the following material development conditions:

Site Area : 103,104.74 square metres Land Use : Industrial Plot Ratio : ≦2.50 Site Coverage : ≦35% Greenery Coverage : ≧15%

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 165,280,000.– and RMB 72,600,000.– respectively.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The market value of the property as if were fully completed on the valuation date is RMB 290,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in the property are held by Foshan Tianan Cyber Park Co., Ltd. for a term expiring on 28 November 2056 for industrial use;
ii. The subject land parcel is subject to a mortgage in favour of The Village Trust Committee of Nanhai District, Foshan City – Guicheng Branch for a term expiring on 27 Apirl 2019; and
iii. Foshan Tianan Cyber Park Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development ; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 129

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises two parcels Zone B and Zone E of land with a total area of 57,832.55 Tianan Dongguan square metres on which nine blocks Cyber Park, of 22 to 28-storey residential building Nancheng District, and two blocks of 15 to 17-storey Dongguan City, industrial building will be erected. Guangdong Province, the PRC. Upon completion, a total gross floor area of 159,645.89 square metres will be provided.

The property is currently vacant.

RMB268,000,000.–

(29.3% interest attributable to the Company RMB78,524,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed by the end of 2013.

The property is held for a term of expiring on 14 October 2060.

Notes:

Pursuant to four sets of Land Use Rights Contract all dated 14 July 2010 entered into between Dongguan City Land Resource Bureau（東莞市國土資源局）(“the Bureau”) and Dongguan Tianan Cyber Park Co., Ltd.（東莞市天安數碼城有限公司）, which is owned as to 29.3% by the Company, the latter acquired the land use rights of the property from the Bureau at a total consideration of RMB147,080,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by three sets of Land Use Rights Certificate all dated 26 January 2011, the land use rights of the property with a total area of 79,977.53 square metres are held by Dongguan Tianan Cyber Park Co., Ltd. for the terms expiring on 14 October 2060 for industrial use.
As revealed by another set of Land Use Rights Certificate dated 26 January 2011, the land use rights of the property with a total area of 32,636.50 square metres are held by Dongguan Tianan Cyber Park Co., Ltd. for the terms expiring on 14 October 2080 for commercial and residential uses.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 159,931.55 square metres Land Use : Industrial/Commercial/Residential Plot Ratio : ≦3.00 (Ind.); 2.5 (Com./Res.) Site Coverage : ≦35% (Ind.); 25% (Com./Res.) Greenery Coverage : ≧20% (Ind.); 30% (Com./Res.)

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 250,493,000.– and RMB 81,615,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 1,027,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in the property is held by Dongguan Tianan Cyber Park Co., Ltd. for a term expiring on 14 October 2060 and 14 October 2080 for industrial use and commercial/residential uses respectively;
ii. Dongguan Tianan Cyber Park Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The subject development comprises Residential Block two parcels of land with a total area No. 1-18 of 173,204.00 square metres on which Tianan Jiangyin an industrial/residential development Cyber Park, will be erected. Changshan Avenue Xuyao Village, The property includes eighteen blocks Chengdong Street, of 3 to 24-storey residential building. Jiangyin City, Jiangsu Province, Upon completion, a total gross floor the PRC. area of 134,933.01 square metres will be provided.

The property is currently vacant.

RMB162,400,000.–

(37.5% interest attributable to the Company RMB60,900,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed in 2014.

The property is held for the terms of expiring on between 14 September 2060 and 14 September 2080.

Notes:

Pursuant to two sets of Land Use Rights Contract both dated 9 September 2010 entered into between Jiangyin City Land Resource Bureau（江陰市國土資源局）(“the Bureau”) and Shenzhen Tianan Cyber Park (Group) Co., Ltd.（深圳市天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter acquired the land use rights of the property from the Bureau at a total consideration of RMB103,600,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 14 November 2010, the land use rights of the property with an area of 69,255.00 square metres are held by Jiangyin Tianan Cyber Park Proeprty Co., Ltd.（江陰市天安數碼城置業有限公司）for a term expiring on 14 September 2080 for residential use.

IV – 132

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contract, the subject development is subject to the following material development conditions:

Site Area : 69,255.00 square metres Land Use : Residential Plot Ratio : ≦1.95 Site Coverage : ≦30% Greenery Coverage : ≧30%

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 217,809,000.– and RMB 81,454,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 675,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Land Use Rights Certificate, the land use rights of the property are held by Jiangyin Tianan Cyber Park Proeprty Co., Ltd. for a term expiring on 14 September 2060 and 14 September 2080 respectively for industrial and residential uses;
ii. A parcel of the subject land with an area of 103,949 square metres is subject to a mortgage in favour of The Bank of Jiangsu – Jiangyin Branch for a term from 26 June 2011 to 27 June 2012; and
iii. Jiangyin Tianan Cyber Park Proeprty Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development ; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 133

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure
1. Development Site of The subject development comprises Chanye Mansion four parcels of land with a total area Blocks 1 to 4 of 588,074.80 square metres on which in Phase 1（天安天津產 an industrial/residential development 業大廈一期）, will be erected. Long Yuan（瓏園）of Phase I and The property includes four blocks Industrial Development of 12-storey industrial building, two of Phase II, blocks of 33-storey industrial building Tianan Chuangxin and seventeen blocks 3 to 26-storey Science and building. Technology Park, Zhangjiawo Town, Upon completion, gross floor areas of Xiqing District, residential and indusrial are of 98,930 Tianjin City, square metres and 40,800 square the PRC. metres respectively.

Particulars of occupancy

The property is currently vacant.

Market value in existing state as at 31 December 2012

RMB761,600,000.–

(37.5% interest attributable to the Company RMB285,600,000.–)

As at the date of our inspection, the construction works of the property were in progress. As advised, the property will be fully completed in 2014.

The property is held for the terms of expiring on between 27 December 2060 and 2 September 2080.

Notes:

Pursuant to the Land Use Rights Contract dated 16 August 2010 entered into between Tianjin City Land Resource and Housing Management Bureau – Xiqing District Land Resources Sub-Bureau（天津市國土資源和房屋管理局西青區國土資源分局）(“the Bureau”) and Tianjin Tianan Cyber Park Co., Ltd.（天津天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter acquired the land use rights of the property with an area of 198,709.60 square metres from the Bureau at a total consideration of RMB114,732,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to another three sets of Land Use Rights Contract all dated 10 November 2010 entered into between Tianjin City Land Resource and Housing Management Bureau – Xiqing District Land Resources Sub-Bureau

（天津市國土資源和房屋管理局西青區國土資源分局）(“the Bureau”) and Tianjin Tianan Cyber Park Co., Ltd the latter acquired the remaining portion land use rights in the property from the Bureau at a total consideration of RMB170,950,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.

IV – 134

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed by four sets of Land Use Rights Certificate dated 14 January 2011 and 17 March 2011, the land use rights of the property with a total area of 389,364.70 square metres are held by Tianjin Tianan Cyber Park Co., Ltd. for a term expiring on 27 December 2060 for industrial use.
As revealed by another set of Land Use Rights Certificate dated 12 December 2011, the land use rights of the property with a total area of 198,709.40 square metres are held by Tianjin Tianan Cyber Park Co., Ltd. for a term expiring on 2 Setpember 2080 for residential use.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 588,074.80 square metres Land Use : Industrial and Residential Plot Ratio : ≦1.00 (Ind.); 1.50 (Res.) Site Coverage : ≦30% Greenery Coverage : ≧20% (Ind.); 45%(Res.)

Based on the information provided by the Company, the total construction costs for the property and the construction costs expended on the property as at the valuation date were estimated to be approximately RMB 891,000,000.– and RMB 339,915,000.– respectively.
The market value of the property as if were fully completed on the valuation date is RMB 1,796,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by four sets of Land Use Rights Certificate, the land use rights of the property with a total area of 389,364.70 square metres are held by Tianjin Tianan Cyber Park Co., Ltd. for a term expiring on 27 December 2060 for industrial use;
ii. A parcel of the subject land with an area of 217,407.50 square metres is subject to a mortgage in favour of The Bank of China – Tianjin Xiqing Branch for a term from 10 June 2011 to 6 June 2014; and
iii. Tianjin Tianan Cyber Park Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development.
iv. Up to the Practicable Date, as confirmed by the Company, the property is free from any encumbrance.

IV – 135

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Maanshan Shum Yip Real Estate Co., Ltd.

Property Description and tenure
1. Development Site of The property comprises a Shenye Huafu development site with an area
（深業華府） of 479,826.99 square metres on Lot No. 03-03-03which the phase I of the residential 0525 at the northeastern development comprising 8 blocks junction of Huxi Road of 2 to 33-storey residential towers and Jiuhua Road is under construction. Sub-structure Ma’anshan City, work of the development is in Anhui Province, progress and upon completion of the PRC construction work, the development shall provide a total gross floor area of 226,815.00 square metres (including basement area of 46,559.00 square metres).

Market value in existing state as at 31 December 2012

Particulars of occupancy

The property is RMB1,655,000,000.– currently vacant . (99.54% interest attributable to Company RMB1,647,387,000.–)

Super-structure work of the development is currently underway and the first phase of the project is scheduled for completion in 2013.

The property is held for a term of 70 years for residential use, 40 years for retail and entertainment uses, 50 years for office and cultural uses.

Notes:

Pursuant to a Land Use Right Grant Contract dated 31 October 2007 entered into between the Ma’anshan Municipal Land Resources Bureau（馬鞍山市國土資源局）as grantor and Ma’anshan Shum Yip Taifu Yisheng Property Development Co., Ltd.（馬鞍山深業泰富益聖房地產發展有限公司） as grantee, the land use rights of the subject land parcel with an area of 479,826.99 square metres were granted by the Grantor to the Grantee for a land use rights term of 70 years for residential use, 40 years for retail and entertainment uses, 50 years for office and cultural uses at a land premium RMB1,179,000,000. Subsequent to the aforesaid Land Use Right Grant Contract, two sets of its supplemental contracts were entered by Ma'anshan Shum Yip Taifu Yisheng Property Development Co., Ltd. with the Government on 31 October 2007 and 24 December 2008.
As advised by the Group, as at the date of valuation, the paid land premium for the subject land parcel was approximately RMB554,700,000, meanwhile the outstanding land premium was approximately RMB624,300,000. In valuing the property, we have assumed that transferrable land use rights in respect of the property have been granted and that all requisite land premium payable has been fully settled.

IV – 136

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

A Land Use Right Certificate (Ref: Ma Guo Yong (2011) Di No. 83592) for a portion of the subject land parcel with an area of 155,240.68 square metres was issued by The People’s Government of Maanshan（馬鞍山市人民政府）in the name of Ma'anshan Shum Yip Property Development Limited （馬鞍山深業房地產有限公司）, a 99.54 %-owned subsidiary of the Company, and was registered on 15 April 2011.
As advised, the Land Use Right Certificate for the remaining portion the subject land parcel with an area of approximately 324,586.31 square metres has not obtained yet. We have assumed that the Company has secured transferable land use rights for commercial purposes in the property and will have no legal impediment in obtaining Land Use Right Certificate for the property.
As mentioned in the Planning Permit for Construction Land (Ref: Di Zi Di No. 340504201000066) dated 19 July 2010 and the Planning Permit for Construction Works (Ref: Jian Zi Di No. 340503201100064) dated 18 May 2011 and the Construction Works Commencement Permits (Ref: 340500201109190101), the approval scheme of the subject development contains the following material parameters:

Total Gross Floor Area : 226,815 square metres Land Uses : Residential, Commercial, Office, Culture and entertainment

As confirmed by the Company, a total construction costs of approximately RMB 244,140,000 has been expended onto phase I of the development as at the valuation date. According to the budget total construction costs estimated by the Company, the further construction costs to be expended for completing the phase I of the development as at the valuation date is approximately RMB 610,860,000 .
The existing state value of the phase I of the property is RMB700,600,000. The market value of phase I of the property as if it were fully completed on the valuation date is RMB 1,210,000,000 .
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes (Portion of the subject land parcel) Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes Construction Works Commencement Permits : Yes

We have been provided with a legal opinion regarding the property interests by the PRC Legal Adviser, which contains, inter alia, the followings:
i. As revealed by a set of Land Use Rights Certificate, the land use rights of portion of the property with a total area of 155,240.68 square metres are held by Ma'anshan Shum Yip Property Development Limited for a term of 70 years for residential use, 40 years for retail and entertainment uses, 50 years for office and cultural uses.
ii. As confirmed by the Company, the property is not subject to any mortgage, seizure and other third party encumbrances; and
iii. The Planning Permit for Construction Land (Ref: Di Zi Di No. 340504201000066), Planning Permit for Construction Works (Ref: Jian Zi Di No. 340503201100064) and Construction Works Commencement Permits (Ref: 340500201109190101) for the subject development have been obtained by Ma'anshan Shum Yip Property Development Limited.

IV – 137

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Group III – Properties Held by the Group for Future Development

Shum Yip Southern Land (Holdings) Co., Ltd.

Property Description and tenure 38. Development The property comprises two parcels of Site of No.1 land with a total area of 153,240.60 Gaobangshan Garden square metres on which a commercial/ （高榜山一號花園） residential development namely “No.1 Huizhou Railway Jinbangshan Garden” will be erected. West Station Huizhou City Upon completion, the total gross floor Guangdong Province area of 422,290.02 square metres will the PRC be provided within the development. As advised, the property will be fully completed by the end of 2017.

Market value in existing state as at 31 December 2012

Particulars of occupancy

The property is RMB 688,000,000.– currently vacant. (70% interest attributable to the Company RMB 481,600,000.–)

The land use rights of the land are granted for a term of 70 years commencing on 1 November 2010 for residential use.

Notes:

Pursuant to the Land Use Rights Contract dated 12 October 2007 entered into between Huizhou City Land Resource Bureau（惠州市國土資源局）(“the Bureau”) and 惠州深業南方地產有限公司, a 70%-owned subsidiary of the Company, the latter acquired the land use rights of the property from the Bureau at a consideration of RMB510,000,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by two sets of Land Use Rights Certificate both dated 22 January 2010, the property is held by 惠州深業南方地產有限公司 for a term expiring on 12 October 2047 for commercial use and expiring on 12 October 2077 for residential use.

IV – 138

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : No

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Land Use Rights Certificate, the property is held by 惠州深業南方地產有限公司 for a term expiring on 12 October 2047 for commercial use and expiring on 12 October 2077 for residential use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 139

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises three parcels Baie De Seine of land with a total area of 200,000.00

（塞納灣） square metres on which a large-scale Dongyuan County commercial/residential development Heyuan City namely “Baie De Seine” will be Guangdong Province erected. the PRC

The property is RMB313,000,000.– currently vacant.

(100% interest
attributable to the Company
RMB313,000,000.–)
Upon completion, the maximum permissible gross floor area of the property is 304,219.91 square metres.

As advised, the property will be fully completed in 2016 .

The land use rights of the land are granted for the terms of expiring on between 19 November 2050 and 6 March 2081.

Notes:

Pursuant to the Land Use Rights Contract dated 7 March 2011 entered into between Dongyuan County Land Resource Bureau（東源縣國土資源局）(“the Bureau”) and Heyuan Shum Yip Property Development Limited

Pursuant to the Land Use Rights Contract dated 19 November 2010 entered into between Dongyuan County Land Resource Bureau（東源縣國土資源局）(“the Bureau”) and Heyuan Shum Yip Property Development Limited, the latter acquired portion of the land use rights of the property with the area 20,663.70 square metres from the Bureau at a consideration of RMB26,759,492.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to the Land Use Rights Contract dated 19 November 2010 entered into between Dongyuan County Land Resource Bureau（東源縣國土資源局）(“the Bureau”) and Heyuan Shum Yip Property Development Limited, the latter acquired portion of the land use rights of the property with the area 121,531.4 square metres from the Bureau at a consideration of RMB157,383,163.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by three sets of Land Use Rights Certificate dated 23 November 2010 and 25 March 2011 respectively, the land use rights with a total area of 200,000.00 square metres of the property is held by Heyuan Shum Yip Property Development Limited for the terms of expiring on between 19 November 2050 and 6 March 2081 for commercial/residential uses.

IV – 140

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contract, the property is subject to the following material development conditions:

Site Area : 200,000.00 square metres Land Use : Commercial/Residential Plot Ratio : ≦1.8 Site Coverage : ≦40% Greenery Coverage : ≧35%

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by three sets of Land Use Rights Certificate, the land use rights of the property are held by Heyuan Shum Yip Property Development Limited for the terms of expiring on between 19 November 2050 and 6 March 2081 for commercial/residential uses; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 141

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of Sanshui Yundonghai comprises Plot 1, Plot 3, Plot 4 various parcels of land with a total Sanshui Yundonghai area of 590,833.28 square metres

（三水雲東海） on which a large-scale low density Baiyun Road, residential development will be Yundonghai Street developed. Sanshui District Foshan City Upon completion, the maximum Guangdong Province permissible gross floor area of the the PRC property is 354,499.97 square metres

The property is RMB425,000,000.– currently vacant.

(100% interest
attributable to the Company
RMB425,000,000.–)

As advised, the property will be fully completed by the end of 2016 .

The property is held for the terms expiring on between 29 April 2049 and 26 February 2081.

Notes:

Pursuant to two sets of Land Use Rights Contract both dated 27 July 2009 entered into between Foshan City Land Resource Bureau（佛山市國土資源理局）(“the Bureau”) and 佛山三水深業地產有限公司 Foshan Sanshui Shum Yip Property Development Limited（佛山市三水深業地產有限公司）, a wholly-owned subsidiary of the Company, the latter acquired the land use rights in the subject development with a total area of 440,263.66 square metres from the Bureau at a total consideration of RMB527,000,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to another Land Use Rights Contract dated 20 December 2010 entered into between Foshan City Land Resource Bureau（佛山市國土資源理局）(“the Bureau”) and 佛山三水深業地產有限公司 Foshan Sanshui Shum Yip Property Development Limited, the latter acquired the land use rights in the subject development with an area of 250,624.50 square metres from the Bureau at a total consideration of RMB300,000,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to another Land Use Rights Contract dated 27 August 2012 entered into between Foshan City Land Resource Bureau（佛山市國土資源理局） (“the Bureau”) and 佛山三水深業投資有限公司, a wholly-owned subsidiary of the Company, the latter acquired the land use rights in the subject development with an area of 36,756 square metres from the Bureau at a total consideration of RMB43,997,292.12. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.

IV – 142

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed by nine sets of Land Use Rights Certificate dated 22 September 2009, 8 February 2010, 12 April 2011 respectively, the land use rights of the property with a total area of 554,077.28 square metres are held by 佛山三水深業地產有限公司 Foshan Sanshui Shum Yip Property Development Limited for the terms expiring on between 27 February 2050 and 30 July 2082.
As revealed by another Land Use Rights Certificate dated 31 October 2012, the land use rights of the another portion of the property with an area of 36,756 square metres are held by 佛山三水深業投資有限公司 for a term expiring either on 30 July 2082 for residential use or 30 July 2052 for commercial use.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Land Use : Residential/Commercial Plot Ratio : ≦0.6 Site Coverage : ≦16% Greenery Coverage : ≧45%

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property are held by 佛山三水深業地產有限公司 Foshan Sanshui Shum Yip Property Development Limited for the terms expiring on 22 September 2049, 29 September 2049, 27 February 2050 and 26 February 2051 respectively for commercial use and expiring on 22 September 2079, 29 September 2079 27 February 2080 and 26 February 2081 respectively for residential use; and
ii. Portion of the property with a total land area of 422,614.28 square metres are subject to a m ortgage in favour of China Construction Bank Ltd ; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 143

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Description and tenure

Property

Development Site of Shunde Shum Yip City comprises Phase 3 and 4 three parcels of land with a total area in Plot A of 305,543.73 square metres on which Shunde Shum Yip City a large-scale residential development

（順德深業城） will be developed by phasing. Wuchangsha, Beijiao Town The property comprises a parcel Shunde District of land with an area of 148,776.83 Foshan City square metres within the subject Guangdong Province development. the PRC

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB743,900,000.– currently vacant.

(100% interest attributable to the Company RMB743,900,000.–)

Upon completion, the maximum permissible gross floor area of the property is 297,553.66 square metres.

As advised, the property will be fully completed by the end of 2015.

The property is held for a term expiring on 4 July 2074.

Notes:

As revealed by three sets of Land Use Rights Certificate all dated 15 November 2007, the land use rights of the property is held by 佛山市順德區深業房地產有限公司 Foshan Shunde Shum Yip Property Development Limited, a wholly-owned subsidiary of the Company, for a term expiring on 4 July 2074.
As revealed from the aforesaid Land Use Rights Transfer Supplement Contracts, the subject development is subject to the following material development conditions:

Site Area : 305,543.73 square metres Land Use : Commercial/Residential Plot Ratio : ≦2.1 Site Coverage : ≦35% Greenery Coverage : ≧30%

IV – 144

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by three sets of Land Use Rights Certificate, the land use rights of the property are held by 佛山市順德區深業房地產有限公司 Foshan Shunde Shum Yip Property Development Limited for the terms expiring on 4 July 2074 for residential use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 145

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Pengji Holdings Co., Ltd.

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 42. Development Site of Plot Hillsides Villas comprises two parcels The property is RMB70,000,000.– 1 and Plot 3 of land with a total area of 83,580.60 currently vacant. Hillsides Villas square metres on which a large-scale (100% interest （半山名苑） low density residential development attributable to the Area Nos. 16 and 72 will be erected by phasing. Company Zhongkai RMB70,000,000.–) High-Technology Zone Upon completion, the property will Huizhou City provided a total gross floor area of Guangdong Province 108,654.78 square metres. the PRC As advised, the property will be fully completed by the end of 2015. The property is held for a term expiring on 21 March 2047 and 21 March 2077 for commercial and residential purposes respectively.

Notes:

As revealed by the two sets of Land Use Rights Certificate both dated 8 August 2007, the property is held by Huizhou Zhongkai Pengji Investment Limited（惠州市仲愷鵬基投資有限公司）, a wholly-owned subsidiary of the Company, for a term expiring on 21 March 2047 and 21 March 2077 for commercial and residential purposes respectively.
As revealed from the aforesaid Land Use Rights Certificate, the property is subject to the following material development conditions:

Land Use : Commercial/Residential Plot Ratio : ≦1.3 Site Coverage : ≦25% Greenery Coverage : ≧35%

IV – 146

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : N/A Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Land Use Rights Certificate, the property is held by Huizhou Zhongkai Pengji Investment Limited（惠州市仲愷鵬基投資有限公司）for a term expiring on 21 March 2047 and 21 March 2077 for commercial and residential purposes respectively; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 147

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Development Site of The property comprises two parcels Phase 1.2B, 2 and 3 of land with a total area of 225,096 Shenye Rui Cheng square metres on which a commercial/
（深業睿城） residential development will be Xingsha Town erected. As advised, the subject Changsha County development will be fully completed Changsha City by the end of 2016. Hunan Province the PRC. Upon completion, the property will provided a total gross floor area of 243,086.14 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB121,500,000.– currently vacant.

(80% interest
attributable to the Company
RMB97,200,000.–)

The property is held for terms expiring on between 16 June 2046 and 16 June 2076.

Notes:

As revealed by two sets of Land Use Rights Certificate both dated 26 January 2011, the subject land parcel with a total area of 225,096 square metres is held by Changsha Pengji Property Co. Ltd.（長沙鵬基地產有限公司）, a 80%-owned subsidiary of the Company, for the land use right terms expiring between on 16 June 2046 and 16 June 2076 for commercial and residential purposes rexpectively.
As revealed from the Land Use Rights Contract dated 25 August 2004, the property is subject to the following material development conditions:

Site Area : 169,188.00 square metres Land Use : Residential Plot Ratio : ≦1.81 Site Coverage : ≦28% Greenery Coverage : ≧38.8%

IV – 148

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed another set Land Use Rights Contract dated 16 June 2006, the property is subject to the following material development conditions:

Site Area : 55,908.00 square metres Land Use : Commercial/Residential Plot Ratio : ≦3.4 Site Coverage : ≦26.33% Greenery Coverage : ≧37.8%

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : No Planning Permit for Construction Works : No

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property is held by 長沙鵬基地產有限公司 Changsha Pengji Property Co. Ltd. for a term expiring on between 16 June 2046 and 16 June 2076 for residential and commercial purposes; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 149

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Development Site The property comprises two The property is RMB64,330,000.– in Southern Zone of parcels of land with a total area of currently vacant. Hill House（萬林湖） 57,045.20 square metres on which an (100% interest Shanbeikeng educational/residential development attributable to the Gu Tang Ao will be erected. As advised, the Company Huizhou City subject development will be fully RMB64,330,000.–) Guangdong Province completed by the end of 2014. the PRC

Upon completion, the property will provided a total gross floor area of 67,015.00 square metres.

Notes:

As revealed by the Land Use Rights Certificate dated 13 March 2007, a parcel of land use rights of the property with an area of 41,283.40 square metres is held by Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, for the term expiring on 16 June 2075 for residential purpose.
As revealed by another set of Land Use Rights Certificate dated 22 July 2005, remaining portion of the property with an area of 15,761.80 square metres is held by Huizhou Pengji Investment Limited through administrative allocation for educational purpose.
As specified in the aforesaid Land Use Rights Certificate, portion of the land use rights of the property were obtained by the Company through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. We have attributed no commercial value to such portion of the property in our valuation.
As revealed from the Land Use Rights Contract dated 16 June 2005, the property is subject to the following material development conditions:

Land Use : Residential Plot Ratio : ≦1.4 Site Coverage : ≦24% Greenery Coverage : ≧35%

IV – 150

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : No

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, portion of the property with an area of 41,283.40 square metres is held by Huizhou Pengji Investment Limited for a term expiring on 16 June 2075 for residential purpose;
ii. As revealed by the Land Use Rights Certificate, remaining portion of the property is held by Huizhou Pengji Investment Limited through administrative allocation for educational purpose;
iii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights (as mentioned in note 3-ii) of the property can be dispose by Huizhou Pengji Investment Limited; and
iv Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 151

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Description and tenure

Property

Development Site of The property comprises seven parcels Phase 3 of land with a total area of 284,790.00 Fairview City square metres on which a commercial/

（姜堰錦繡薑城） residential development will be Jiangyan Avenue and erected. As advised, the property will Shanghai Road be fully completed in 2015. Jiangyan Taizhou City Upon completion, the maximum Jiangsu Province permissible gross floor area of the the PRC property is of 368,769.22 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB280,000,000.– currently vacant. (100% interest attributable to the Company RMB280,000,000.–)

The property is held for the terms expiring on 8 July 2079.

Notes:

Pursuant to two sets of Land Use Rights Contract with its supplement contract both dated 8 July 2009 and 20 April 2010 respectively entered into between Jiangyan City Land Resource Bureau（姜堰市國土資源局）(“the Bureau”) and Taizhou Shum Yip Pengji Investment Limited（泰州市深業鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter acquired the land use rights in the subject development with a total area of 284,790.00 from the Bureau at a total consideration of RMB451,196,781.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by four sets of Land Use Rights Certificate all dated 16 July 2009, the land use rights of the property with a total area of 167,878.40 square metres are held by Taizhou Shum Yip Pengji Investment Limited for a term expiring on 8 July 2079 for commercial/residential purposes.
As revealed by two sets of Land Use Rights Certificate both dated 17 February 2011, the land use rights of the property with an area of 10,908.00 square metres are held by Taizhou Shum Yip Pengji Investment Limited for a term expiring on 8 July 2079 for commercial/residential purposes.
As revealed by another set Land Use Rights Certificate dated 16 July 2009, the land use rights of the property with a total area of 106,003.60 square metres are held by Taizhou Shum Yip Pengji Investment Limited for a term expiring on 8 July 2079 for commercial/residential purposes.

IV – 152

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contract, the property is subject to the following material development conditions:

Land Use : Commercial/Residential Plot Ratio : ≦2.5 Site Coverage : ≦50% (Commercial); ≦28% (Residential) Greenery Coverage : ≧30% (Residential); ≧20% (Commercial)

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : N/A Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by seven sets of Land Use Rights Certificate, the land use rights of the property are held by Taizhou Shum Yip Pengji Investment Limited for a land use right term expiring on 8 July 2079 for commercial and residential purposes; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 153

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Shumkang (Group) Co., Ltd.

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 46. Development Site The property comprises a parcel of The property is vacant. RMB4,200,000.– in West Zone of land with an area of 5,000 square Shangyang metres on which a commercial/ (80% interest Xiangshuihe residential development will be attributable to the Industrial Park, erected. Company Daya Bay Economic RMB3,360,000.–) & Technology The property is held for a term Development Area, expiring on 1 November 2051. Huizhou City, Guangdong Province, the PRC.

Notes:

As stipulated in the Land Use Rights Certificate dated 7 December 2007, the land use rights of the property is held by Shum Yip Shumkang (Group) Co., Ltd.（深業深港（集團）有限公司）, a 80%-owned subsidiary of the Company, for a term expiring on 1 November 2051 for the purpose of commercial/residential uses.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Planning Permit for Construction Land	:	No
Planning Permit for Construction Works	:	No

Opinion of the PRC Lawyer on the property is summarized as follows:
i. As revealed by the Land Use Rights Certificate, the property is held by Shum Yip Shumkang (Group) Co., Ltd. for a term expiring on 1 November 2051 for the purpose of commercial/residential uses; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 154

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Taifu Logistics Group Holdings Co., Ltd.

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 47. Development Site in The property comprises two parcels The property is RMB2,320,000.– Southern Zone of of land with a total area of 7,623.20 currently vacant. Jinxiu Workshop square metres on which an industrial (73% interest （錦繡工場） development will be erected. As attributable to the No.36 Caotang advised, the subject development Company Dong Road will be fully completed by the end of RMB1,693,600.–) Qingyang District 2015. Chengdu City Sichuan Province Upon completion, the property will the PRC provided a total permissible gross floor area of 11,617.76 square metres. The property is held for the land use rights term expiring on 7 April 2058 for industrial use.

Notes:

As revealed by two sets of Land Use Rights Certificate both dated 9 February 2009, the land use rights of the property is held by is 成都市興城建實業發展有限責任公司, a 73%-owned subsidiary of the Company, for the term expiring on 7 April 2058 for industial use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Certificate	:	Yes
Planning Permit for Construction Land	:	N/A
Planning Permit for Construction Works	:	N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 成都市興城建實業發展有限責任公司 for a term expiring on 7 April 2058 for industial use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 155

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Terra (Holdings) Co., Ltd.

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of Yihu Rose Garden comprises five Zone C in Phase 1 parcels of land with a total area of and Phase 2 and 3 112,039.32 square metres on which Yihu Rose Garden a large-scale residential development

（怡湖玫瑰苑） will be developed by phasing. Yihu Road, Qingjiang Bei Road The property comprises remaining and Qingjiang portion of the subject land with an Dong Road area of 74,798.66 square metres Qingbai Jiang District within the subject development. Chengdu City Sichuan Province Upon completion, the maximum the PRC. permissible gross floor area of the property is 197,697.82 square metres.

The property is RMB128,500,000.– currently vacant.

(52.5% interest attributable to the Company RMB67,462,500.–)

As advised, the property will be fully completed by the end of 2015.

Notes:

Pursuant to five sets of Land Use Rights Contract dated 18 August 2009 and 10 February 2010 respectively entered into between Qingbai Jiang District Land Resource Bureau（青白江區國土資源局）(“the Bureau”), 成都市怡湖投資有限公司, a 52.5%-owned subsidiary of the Company, the latter acquired portion of the land use rights of the property with a total area of 112,039.32 square mtres from the Bureau at a total consideration of RMB277,295,700.–. As confirmed by the Company, as at the valuation date, a sum of RMB185,126,684.– for the aforesaid land purchase consideration has been fully settled.
As revealed by three sets of Land Use Rights Certificate all dated 11 May 2011, the land use rights of the property with a total area of 60,352.63 square metres are held by Chengdu Shum Yip Terra Property Development Co., Ltd. （成都市深業泰然房地產開發有限公司）) for a term expiring on either 17 August 2049 or 17 August 2079.
As revealed by another Land Use Rights Certificate dated 11 May 2011, the land use rights of the property with an area of 14,446.03 square metres are held by Chengdu Shum Yip Terra Property Development Co., Ltd. for a term expiring on either 29 June 2050 or 29 June 2080.

IV – 156

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 112,039.32 square metres Land Use : Commercial/Residential Plot Ratio : ≦6 Site Coverage : ≦45% Greenery Coverage : ≧25%

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes (74,798.66 square metres) Planning Permit for Construction Land : N/A Planning Permit for Construction Works : N/A

Our valuation does not include any value of portion of the subject land which land grant procedures have not yet completed as at the valuation date.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property with a total area of 74,798.66 square metres are held by Chengdu Shum Yip Terra Property Development Co., Ltd. for a term expiring on 17 August 2049, 29 June 2050, 17 August 2079 and 29 June 2080 respectively for commercial and residential uses;
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 157

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

Development Site The property comprises a parcel in Gexin Village of land with an area of 118,731.32

（革新村）, square metres on which a largeDawan Street（大灣街） scale residential development will Qingbai Jiang District be erected by phasing and fully

（青白江區） completed by the end of 2016 . Chengdu City Sichuan Province Upon completion, the maximum the PRC. permissible gross floor area of the property is 474,925.28 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB216,000,000.– currently vacant. ( 52.5 % interest attributable to the Company RMB 113,400,000 .–)

The property is held for a term expiring on either 29 December 2050 or 29 December 2080.

Notes:

Pursuant to the Land Use Rights Contract dated 10 March 2010 entered into between Qingbai Jiang District Land Resource Bureau（青白江區國土資源局）(“the Bureau”), 成都市怡湖投資有限公司, a 52.5%-owned subsidiary of the Company, the latter acquired the land use rights in the property from the Bureau at a total consideration of RMB 112,201,110.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 11 May 2011, the land use rights in the property is held by 成都市深業泰然房地產開發有限公司 for a term expiring on either 29 December 2050 or 29 December 2080.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 118,731.32 square metres Land Use : Commercial/Residential Plot Ratio : ≦4 Site Coverage : ≦25% Greenery Coverage : ≧25%

IV – 158

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

APPENDIX IV

The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : No Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in the property are held by 成都市深業泰然房地產開發有限公司 for a term expiring on either 29 December 2050 or 29 December 2080 for commercial and residential uses;
ii. The land use rights in the property are legally held by 成都市深業泰然房地產開發有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 159

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Development Site of Nanhu Rose Bay is a large-scale Phase 4 residential development which will be Nanhu Rose Bay developed by phasing.
（南湖玫瑰灣） Wangjiawan The property comprise a parcel Shizishan Street of land with an area of 43,821.92 Wuhan City square metres within the subject Hubei Province development. Upon completion,the the PRC. total gross floor area of the property is 83,261.65 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB108,000,000.– currently vacant. (75% interest attributable to the Company RMB81,000,000.–)

As advised, the property will be fully completed by the end of 2015.

The property is held for a term expiring on 16 August 2075.

Notes:

As revealed by the Land Use Rights Certificate dated 30 August 2005, the land use rights of the property with an area of 268,361.04 square metres is held by Wuhan Terra Property Development Co., Ltd.（武漢市泰然房地產開發有限公司）, a 75%-owned subsidiary of the Company, for a term expiring on 16 August 2075 for residential use.
As revealed from the Land Use Rights Contract dated 16 August 2005, the subject development is subject to the following material development conditions:

Site Area : 268,361.04 square metres Land Use : Residential Plot Ratio : ≦1.90

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : N/A Planning Permit for Construction Work : N/A

IV – 160

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by five sets of Land Use Rights Certificate, the land use rights of the property are held by Wuhan Terra Property Development Co., Ltd. for a land use right term expiring on 16 August 2075 for residential use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 161

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises a parcel of Phase 4 land with an area of 44,934.00 square Tianan Longgang metres on which a commercial/ Cyber Park, industrial development will be Longgang District, erected. Shenzhen, the PRC. Upon completion, a total gross floor area of 91,431.32 square metres will be provided.

The property is currently vacant.

RMB83,800,000.–

(37.5% interest attributable to the Company RMB31,425,000.–)

As advised, the property will be fully completed by the end of 2014 .

The property is held for a term of 50 years commencing on 23 December 2002 and expiring on 22 December 2052.

Notes:

As revealed by the Building and Land Ownership Certificate dated 9 September 2009, the land use rights of the property with an area of 51,995.00 square metres is held by Shenzhen Longgang Tianan Cyber Park Co., Ltd.

（深圳市龍崗天安數碼新城有限公司）, which is owned as to 37.5% by of the Company, for a term of 50 years commencing on 23 December 2002 and expiring on 22 December 2052 for industrial use.

As revealed by another set of Building and Land Ownership Certificate dated 10 April 2006, the land use rights of the property with an area of 18,556.40 square metres is held by Shenzhen Longgang Tianan Cyber Park Co., Ltd. for a term of 50 years commencing on 23 December 2002 and expiring on 22 December 2042 for commercial use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Planning Permit for Construction Land	:	Yes
Planning Permit for Construction Works	:	N/A

IV – 162

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property are held by Shenzhen Longgang Tianan Cyber Park Co., Ltd. for the terms expiring on 22 December 2042 and 22 December 2052 for commercial and industrial uses respectively; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 163

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Development Site of The property comprises two parcels of Phase 9 land with a total area of 35,169 square Tianan Panyu Ecological metres on which 9-storey industrial Hi-tech Park development will be erected. No.730 Yingbin Road Panyu District Upon completion, a total gross floor area of 62,158 square metres will be
Guangzhou City Guangdong Province provided. the PRC. As advised, the property will be fully completed by the end of 2015 . The property is held for a term expiring on 24 September 2052.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB15,500,000.– currently vacant. (37.5% interest attributable to the Company RMB5,812,500.–)

Notes:

As revealed by two sets of Land Use Rights Certificate both dated 28 August 2003, the land use rights of the property are held by Guangzhou Panyu Hi-tech Ecological Park Development Co., Ltd.（廣州市番禺節能科技園發展有限公司）, which is owned as to 37.5% by the Company, for the terms expiring on 25 June 2052 and 24 September 2052 respectively for industrial use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Planning Permit for Construction Land	:	N/A
Planning Permit for Construction Works	:	N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by three sets of Land Use Rights Certificate, the land use rights in the property is held by 廣州市番禺節能科技園發展有限公司 for a term expiring on 25 June 2052 and 24 September 2052 respectively for industrial use;
ii. The property was subject to a mortgage in faovur of Village Trust Community of Guangzhou City – Panyu Branch（廣州市農村信用合作社番禺信用社） ; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 164

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description
1. Development Site of The property comprises a parcel of Phase 6, land with an area of 10,592.70 square Tianan Nanhai metres on which three blocks of Cyber Park, industrial building will be erected. Nanhai District, Foshan City, Upon completion, a total gross floor Guangdong Province, area of 31,773.35 square metres will the PRC. be provided.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB9,500,000.– currently vacant. ( 33.8 % interest attributable to the Company RMB 3,211,000 .–)

As advised, the property will be fully completed in 2014 .

The property is held for a term of expiring on 14 September 2054 or 28 November 2056.

Notes:

As revealed by the Land Use Rights Certificate dated 22 December 2006, the land use rights in the property with an area of 11,210.09 square metres are held by Foshan Tianan Cyber Park Co., Ltd.（佛山市天安數碼城有限公司）, which is owned as to 33.8% by the Company, for a term expiring on 14 September 2054 for industrial use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : No Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in the property are held by Foshan Tianan Cyber Park Co., Ltd. for a term expiring on either 14 September 2054 for industrial use;
ii. The subject land parcel is subject to a mortgage in favour of The Village Trust Committee of Nanhai District, Foshan City – Guicheng Branch for a term expiring on 27 Apirl 2019 ; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 165

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises two parcels Two Land Parcels in of land with a total area of 54,782 Tianan Dongguan square metres on which a industrial Cyber Park, development will be erected. Nancheng District, Dongguan City, Upon completion, a total gross floor Guangdong Province, area of 164,346 square metres will be the PRC. provided.

The property is RMB40,000,000.– currently vacant.

(29.3% interest
attributable to the Company
RMB11,720,000.–)
As advised, the property will be fully completed in 2015 .

The property is held for a term of expiring on between 14 October 2060 and 14 October 2080.

Notes:

Pursuant to two sets of Land Use Rights Contract all dated 14 July 2010 entered into between Dongguan City Land Resource Bureau（東莞市國土資源局）(“the Bureau”) and Dongguan Tianan Cyber Park Co., Ltd.（東莞市天安數碼城有限公司）, which is owned as to 29.3% by the Company, the latter acquired the land use rights of the property from the Bureau at a total consideration of RMB28,930,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by two sets of Land Use Rights Certificate all dated 26 January 2011, the land use rights of the property with a total area of 54,782 square metres are held by Dongguan Tianan Cyber Park Co., Ltd. for the terms expiring on 14 October 2060 for industrial use.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Land Use : Industrial Plot Ratio : ≦3.00 Site Coverage : ≦35% Greenery Coverage : ≧20%

IV – 166

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : No Planning Permit for Construction Works : No

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in the property is held by 東莞市天安數碼城有限公司 for a term expiring on 14 October 2060 and 14 October 2080 for industrial use and commercial/residential uses respectively; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 167

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises a parcel Tianan Changzhou of land with a site area of 289,496 Cyber Park, square metres which are currently Wujin Hi-tech bare and vacant site. Development Zone, Changzhou City, Upon completion, a total permissible Jiangsu Province, gross floor area of 303,220.54 square the PRC. metres will be provided.

The property is RMB133,000,000.– currently vacant.

(37.5% interest attributable to the Company RMB49,875,000.–)

As advised, the property will be completed in 2015 .

The property is held for a term expiring on 10 September 2057 for industrial use and 10 September 2077 for residential use.

Notes:

As revealed by five sets of Land Use Rights Certificate dated 13 November 2007 and 19 April 2010 respectively, the land use rights of the property with a total area of 171,440.70 square metres are held by Changzhou Tianan Cyber Park (Property) Co., Ltd.（常州天安數碼城（置業）有限公司）, which is owned as to 37.5% by the Company, for a term expiring on 10 September 2057 for industrial use.
As revealed by three sets of Land Use Rights Certificate dated 13 November 2007 and 19 April 2010 respectively, the land use rights of the property with an area of 118,454.30 square metres are held by Changzhou Tianan Cyber Park (Property) Co., Ltd. for a term expiring on 10 September 2077 for residential use.
As revealed from the aforesaid Land Use Rights Contract, the subject development is subject to the following material development conditions:

Site Area : 289,496.00 square metres Land Use : Industrial and Residential Plot Ratio : ≦3.20 (Res.); ≧1.00 (Ind.)

IV – 168

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : N/A Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in portion of the property with an area of 44,655.20 square metres is held by 常州市天安數碼城置業有限公司 for a term expiring on 10 September 2057 for industrial purpose;
ii. As revealed by the Land Use Rights Certificate, the land use rights in portion of the property with an area of 36,193.80 square metres is held by 常州市天安數碼城置業有限公司 for a term expiring on 10 September 2077 for residential purpose;
iii. The land use rights in the property with an area of 36,193.80 square metres are subject to a mortgage in favour of Jiangsu Bank Ltd. – Changzhou Branch for a term expiring on 28 March 2014;
iv. The land use rights in the property are legally held by 常州市天安數碼城置業有限公司 ; and
v. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 169

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The subject development comprises Phase 3 two parcels of land with a total area Tianan Jiangyin Cyber of 173,204.00 square metres on which Park, an industrial/residential development Changshan Avenue will be erected. Xuyao Village, Chengdong Street, The property comprises portion of the Jiangyin City, subject development land with an area Jiangsu Province, of 103,949.00 square metres. Upon the PRC. completion, a total gross floor area of 147,624.45 square metres will be provided.

The property is currently vacant.

RMB44,000,000.–

(37.5% interest attributable to the Company RMB16,500,000.–)

As advised, the property will be fully completed in 2015 .

The property is held for the terms of expiring on 14 September 2060 for industrial use.

Notes:

Pursuant to two sets of Land Use Rights Contract both dated 9 September 2010 entered into between Jiangyin City Land Resource Bureau（江陰市國土資源局）(“the Bureau”) and Shenzhen Tianan Cyber Park (Group) Co., Ltd.（深圳市天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter acquired the land use rights in the subject development from the Bureau at a total consideration of RMB103,600,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 14 November 2010, the land use rights of the property with an area of 103,949.00 square metres are held by Jiangyin Tianan Cyber Park Proeprty Co., Ltd.（江陰市天安數碼城置業有限公司）, a 37.5%-owned subsidiary of the Company, for a term expiring on 14 September 2060 for industrial use.

IV – 170

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Land Use Rights Certificate, the land use rights of the property are held by Jiangyin Tianan Cyber Park Proeprty Co., Ltd. for a term expiring on 14 September 2060 and 14 September 2080 respectively for industrial and residential uses;
ii. A parcel of the subject land with an area of 103,949 square metres is subject to a mortgage in favour of The Bank of Jiangsu – Jiangyin Branch for a term from 26 June 2011 to 27 June 2012 ; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 171

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The subject development comprises Tianan Chuangxin four parcels of land with a total area Science and of 588,074.80 square metres on which Technology Park, an industrial/residential development Zhangjiawo Town, will be erected. Xiqing District, Tianjin City, The property comprises portion of the the PRC. subject development land with an area of 505,332.00 square metres. Upon completion, a total gross floor area of 429,599.54 square metres will be provided.
The subject development comprises four parcels of land with a total area of 588,074.80 square metres on which an industrial/residential development will be erected.

The property is currently vacant.

RMB374,000,000.–

(37.5% interest attributable to the Company RMB140,250,000.–)

As advised, the property will be fully completed in 2015 .

The property is held for the terms of expiring on between 27 December 2060 and 2 September 2080.

Notes:

Pursuant to the Land Use Rights Contract dated 16 August 2010 entered into between Tianjin City Land Resource and Housing Management Bureau – Xiqing District Land Resources Sub-Bureau（天津市國土資源和房屋管理局西青區國土資源分局）(“the Bureau”) and Tianjin Tianan Cyber Park Co., Ltd.（天津天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter acquired the land use rights of the property with an area of 198,709.60 square metres from the Bureau at a total consideration of RMB114,732,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to another three sets of Land Use Rights Contract all dated 10 November 2010 entered into between Tianjin City Land Resource and Housing Management Bureau – Xiqing District Land Resources Sub-Bureau

（天津市國土資源和房屋管理局西青區國土資源分局）(“the Bureau”) and Tianjin Tianan Cyber Park Co., Ltd., a 37.5%-owned subsidiary of the Company, the latter acquired the remaining portion land use rights in the property from the Bureau at a total consideration of RMB170,950,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.

IV – 172

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed by three sets of Land Use Rights Certificate dated 14 January 2011 and 17 March 2011, the land use rights of the property with a total area of 389,364.70 square metres are held by Tianjin Tianan Cyber Park Co., Ltd. for a term expiring on 27 December 2060 for industrial use.
As revealed by another set of Land Use Rights Certificate dated 12 December 2011, the land use rights of the property with a total area of 198,709.40 square metres are held by Tianjin Tianan Cyber Park Co., Ltd. for a term expiring on 2 Sepember 2080 for residential use.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 588,074.80 square metres Land Use : Industrial and Residential Plot Ratio : ≦1.00 (Ind.); 1.50 (Res.) Site Coverage : ≦30% Greenery Coverage : ≧20% (Ind.); 45% (Res.)

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : N/A Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by four sets of Land Use Rights Certificate, the land use rights of the property with a total area of 389,364.70 square metres are held by Tianjin Tianan Cyber Park Co., Ltd. for a term expiring on 27 December 2060 for industrial use;
ii. A parcel of the subject land with an area of 217,407.50 square metres is subject to a mortgage in favour of The Bank of China – Tianjin Xiqing Branch for a term from 10 June 2011 to 6 June 2014 ; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

IV – 173

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Development Site of The property comprises seven parcels Tianan Chongqing of land with a total area of 307,181.90 Cyber Park square metres on which an industrial/
（重慶天安數碼城）, residential development will be Da Du Kou, erected. Chongqing City, the PRC. Upon completion, the maximum permissible gross floor area of the subject development is 628,909.63 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB873,600,000.– currently vacant. (37.5% interest attributable to the Company RMB327,600,000.–)

As advised, the property will be fully completed in 2015 .

Notes:

Pursuant to the Land Use Rights Contract dated 15 January 2011 entered into between Chongqing City Land Resource and Housing Management Bureau（重慶市國土資源和房屋管理局）(“the Bureau”) and Chongqing Tianan Cyber Park Co., Ltd.（重慶市天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter acquired the land use rights of the property with an area of 123,315.00 square metres from the Bureau at a consideration of RMB511,770,000.– for commercial/residential uses. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to another set of Land Use Rights Contract dated 29 April 2011 entered into between Chongqing City Land Resource and Housing Management Bureau（重慶市國土資源和房屋管理局）(“the Bureau”) and Chongqing Tianan Cyber Park Co., Ltd., a 37.5%-owned subsidiary of the Company, the latter acquired the land use rights of the property with an area of 234,453.00 square metres from the Bureau at a consideration of RMB358,610,000.– for industrial use. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As stipulated in four sets of Building and Land Ownership Certificate dated 4 July 2011 and 18 October 2011 respectively, the laud use rights in portion of the property with a total area of 183,867.90 square metres are held by Chongqing Tianan Cyber Park Co., Ltd. for a term expiring on 28 February 2061 for industrial use.
As stipulated in another three sets of Building and Land Ownership Certificate all dated 15 February 2012, the laud use rights in portion of the property with a total area of 123,314 square metres are held by Chongqing Tianan Cyber Park Co., Ltd. for a term expiring on 25 January 2061 for residential use.

IV – 174

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Site Area : 357,768.00 square metres Land Use : Industrial and Commercial/Residential Plot Ratio : ≦2.50

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Building and Land Ownership Certificate : Yes (Site Area 307,181.90 square metres) Planning Permit for Construction Land : Yes Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by Chongqing Tianan Cyber Park Co., Ltd. for the terms expiring on 25 January 2061, 25 January 2051 and 28 February 2061 for residential, commercial and industrial use respectively; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 175

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Land Co., Ltd.

Description and tenure

Property

Development Site of The subject development comprises Plot 5 two parcels of land with a total Sanshui Yundonghai area of 90,016.44 square metres on

（三水雲東海） which a hotel development will be Baiyun Road, developed. Yundonghai Street Sanshui District Upon completion, the maximum Foshan City permissible gross floor area of the Guangdong Province property is 90,016.44 square metres the PRC

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB108,000,000.– currently vacant.

(100% interest attributable to the Company RMB108,000,000.–)

As advised, the property will be fully completed by the end of 2016 . The property is held for the terms expiring on 21 December 2051.

Notes:

Pursuant to two sets of Land Use Rights Contract both dated 19 January 2012 entered into between Foshan City Land Resource Bureau（佛山市國土資源理局）(“the Bureau”) and Foshan Sanshui Shum Yip Property Development Limited（佛山三水深業地產有限公司）, a wholly-owned subsidiary of the Company, the latter acquired the land use rights of the property from the Bureau at a total consideration of RMB107,750,574.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by two sets of Land Use Rights Certificate dated 7 March 2012, the land use rights of the property are held by 佛山市三水深業酒店有限公司 for the terms expiring on 21 December 2051 for commercial use.
As revealed from the aforesaid Land Use Rights Contracts, the subject development is subject to the following material development conditions:

Land Use : Residential Plot Ratio : ≦1.0 Site Coverage : ≦20% Greenery Coverage : ≧45%

IV – 176

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : N/A Planning Permit for Construction Works : N/A

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 佛山市三水深業酒店有限公司 for the terms expiring on 21 December 2051 for commercial use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 177

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Development Site of The property comprises a parcel North Zone and South of land with an area of 250,196.37 Zone, square metres on which a low-density Shumyip Hot Spring leisure residential development will

（深業半湯禦泉莊）, be erected. No. 128 Tangshang Road, Upon completion, the total gross floor Bantang Economic area of 125,098.19 square metres will Development Zone, be provided within the property. Chaohu City, Anhui Province, As advised, the property will be fully the PRC. completed in 2015 .

The property is RMB75,000,000.– currently vacant.

(80% interest attributable to the Company RMB60,000,000.–)

The property is held for a term expiring on either 31 May 2046 for resort use or 31 May 2076 for leisure residential use.

Notes:

Pursuant to the Land Use Rights Contract dated 8 May 2008 respectively entered into between Chaohu City Land Resources Bureau（巢湖市國土資源局）(“the Bureau”) and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter acquired the land use rights of the property with an area of 239,001.45 square metres from the Bureau at a consideration of RMB43,020,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by two sets of Land Use Rights Certificate dated 31 October 2008 and 19 August 2011 respectively, the land use rights of the property are held by 巢湖深業誠毅地產有限公司 for a term expiring on 31 May 2046 for restaurant/hotel uses, 27 May 2048 for resort use or 27 May 2078 for leisure residential use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Planning Permit for Construction Land	:	N/A
Planning Permit for Construction Works	:	N/A

IV – 178

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by 巢湖深業誠毅地產有限公司 for a term expiring on 31 May 2046 for restaurant/hotel uses, 27 May 2048 for resort use or 27 May 2078 for leisure residential use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in
Particulars of existing state as at
Property Description and tenure occupancy 31 December 2012
1. Development Site on The property comprises two parcel The property is RMB29,400,000.– Duo Lai Te Ba Ge Road, of land with a total area of 81,619.40 currently vacant. 11th Village, square metres on which a residential (100% interest Xia Town, development will be erected. attributable to the Ka Shi City, Company Xinjiang Weiwuer Upon completion, the total gross floor RMB29,400,000.–) Autonomy Zone, area of 285,666.50 square metres will the PRC. be provided within the property. As advised, the property will be fully completed in 2015 .

Notes:

Pursuant to two sets of Land Use Rights Contract both dated 18 September 2010 entered into between Xinjiang Weiwuer Autonomy Zone Ka Shi City Land Resources Bureau（新疆維吾爾自治區喀什市國土資源局）(“the Bureau”) and 喀什市深業地產有限公司, a wholly-owned subsidiary of the Company, the latter acquired the land use rights of the property with a total area of 81,619.00 square metres from the Bureau at a total consideration of RMB48,970,000.–. As confirmed by the Company, as at the valuation date, the amount of RMB25,750,000 .– for the land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 1 June 2011, the land use rights of the property with an area of 17,129.40 square metres are held by 喀什市深業地產有限公司 for a term expiring in October 2080 for residential use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes (17,129.40 square metres) Planning Permit for Construction Land : N/A Planning Permit for Construction Works : N/A

As the land grant procedures for portion of the property have not yet been completed, we have attributed no commercial value to such portion of the property in our valuation.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to the Land Use Rights Contract dated 18 September 2010 entered into between Xinjiang Weiwuer Autonomy Zone Ka Shi City Land Resources Bureau（新疆維吾爾自治區喀什市國土資源局）(“the Bureau”) and 喀什市深業地產有限公司, the latter acquired portion of the land use rights in the property with an area of 64,490.00 square metres from the Bureau at a consideration of RMB38,690,000.– for residential purpose;
ii. As revealed by the Land Use Rights Certificate, another portion land use rights in the property with an area 17,129.40 square metres are held by 喀什市深業地產有限公司 for a term expiring on October 2080 for residential purpose; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Group IV – Properties Held by the Group for Investment

Shum Yip Southern Land (Holdings) Co., Ltd.

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Carparking spaces, various shop units and office units, Shum Yip Centre, Shennan Zhong Road, Luohu District, Shenzhen, the PRC.

Shum Yip Centre comprises a 33-storey commercial building and 2 basement levels of carparking space occupying a site with an area of approximately 7,650.00 square metres. The subject development was completed in 1997.

As advised by the RMB 170,000,000 .– Company, various shop units and various (100% interest office units are leased attributable to the to various individual Company tenants. RMB 170,000,000 .–)

The property comprises 147 carparking spaces, various shop units and office units within the subject development.

The total gross floor area (“G.F.A.”) of the property (excluding carparking spaces) is 7,422.84 square metres with breakdown as follows:

Use Shop Office Total:	Gross Floor Area (sq. m.) 979.35 6,443.49 7,422.84

The property is held for a term of 50 years commencing on 28 July 1988 and expiring on 27 July 2038.

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Notes:

As revealed by various sets of Building and Land Ownership Certificate all dated 5 September 2000, the property is held by 深業中心發展（深圳）有限公司 (Shum Yip Centre Development (Shenzhen) Co., Ltd.), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 28 July 1988 and expiring on 27 July 2038.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificates, the property is held by 深業中心發展（深圳）有限公司 for a term commencing on 28 July 1988 and expiring on 27 July 2038; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Various office units, The property comprises various office Shum Yip Building, units within a 19-storey commercial No.7 Wenjin building which was completed in June Zhong Road, 1991. Luohu District, Shenzhen, The total gross floor area of the the PRC. property is 3,931.39 square metres.
Market value in
Particulars of existing state as at occupancy 31 December 2012 As advised by the RMB 21,600,000 .– Company, various office units are leased (100% interest to various individual attributable to the tenants. Company RMB 21,600,000 .–)

The property is held for a term of 30 years commencing on 27 June 1998 and expiring on 26 June 2018.

Notes:

As revealed by 7 sets of Building and Land Ownership Certificates all dated 3 December 2009, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd.（深業南方地產（集團）有限公司）, a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 27 June 1988 and expiring on 26 June 2018.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 深業南方地產（集團）有限公司; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

Basement Levels The property comprises three office/ 1 and 2, residential units on 5th floor, shop Levels 1 to 4 and premises on Levels 1 to 4 and 36 Units B, C and D carparking spaces on 2 basement on 5th Floor, levels of a 24-storey office/residential Hua Min Building, building surmounting a 4-storey Renmin Nan Road, commercial podium and 2 car parking Luohu District, basement levels. The development Shenzhen, was completed in 1993. the PRC.

RMB 50,380,000 .–

As advised by the RMB 50,380,000 .– Company, the property is leased to various (100% interest individual tenants. attributable to the Company RMB 50,380,000 .–)

The gross floor areas of the office/ residential units, shops and basement are 284.56 square metres, 4,094.43 square metres and 1,474.20 square metres respectively.

The property is held for a term of 50 years commencing on 2 May 1991 and expiring on 1 May 2041.

Notes:

As revealed by various sets of Building and Land Ownership Certificate, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd.（深業南方地產（集團）有限公司）, a wholly-owned subsidiary of the Company,for a term of 50 years commencing on 2 May 1991 and expiring on 1 May 2041.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by Shum Yip Southern Land (Holdings) Co., Ltd.; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Various office/ The property comprises 14 office/ residential units, residential units of a 24-storey office/ Hua Min Building, residential building surmounting a Renmin Nan Road, 4-storey commercial podium and Luohu District, 2 car parking basement levels. The Shenzhen, development was completed in 1993. the PRC.
As advised by the RMB 10,000,000 .– Company, the property is leased to various (100% interest individual tenants. attributable to the Company
RMB 10,000,000 .–)

The total gross floor area of the property is 1,376.98 square metres.

The property is held for a term of 50 years commencing on 2 May 1991 and expiring on 1 May 2041.

Notes:

As revealed by seven sets of Building and Land Ownership Certificate all dated 29 December 1994 and issued by the People’s Government of Shenzhen, the property is held by 深圳華民發展有限公司 (Shenzhen Hua Min Development Co., Ltd.) for a term of 50 years commencing on 2 May 1991 and expiring on 1 May 2041.
With reference to a Joint Venture Agreement dated 3 March 1991 entered into between Shenzhen Lian Hua Enterprise Development Company (Party A) and Shum Yip Holdings Co., Ltd. (the holding company of the Company) (Party B), Shenzhen Hua Min Development Co., Ltd. is a joint venture company established by Party A and Party B of equal shares for the purpose of developing subject building.
According to the Board Resolutions of 19 November 1991 passed by Shum Yip Holdings Co. Ltd., its entire interest in the subject property has been transferred to Shum Yip Holdings (Shenzhen) Co., Ltd. (a whollyowned subsidiary of the Company). Hence, the Company holds a 100% interest in the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by Shenzhen Hua Min Development Co., Ltd. for a term commencing on 2 May 1991 and expiring on 1 May 2041; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

A Shop Unit on Ground Floor, Various office units, apartment units and 11 car parking spaces of Shun Hing Square (also known as “King Land Building”), No. 5002 Shennan Road East, Luohu District, Shenzhen, the PRC.

The property comprises various office units, various apartment units, a retail unit and 11 car parking spaces of a 68-storey office building and a 32-storey apartment building. The property was completed in June 1996.

The gross floor areas of the offices, apartments and retail are 15,929.45 square metres, 1,478.15 square metres and 409.51 square metres respectively.

RMB 457,450,000 .–

As advised by the RMB 457,450,000 .– Company, the retail unit, various office (100% interest units and apartment attributable to the units of the property Company are leased to various RMB 457,450,000 .–) individual tenants.

The property is held for a term of 50 years commencing on 2 January 1995 expiring on 1 January 2045.

Notes:

The property comprises the followings:

Units 1901, 1902, 1903, 1905, 1907, 1908, 1909, 1910, 1912, 1913, 1915 and 1916 on Level 19 of Executive Service Apartment Tower,

Shop Unit UG02 on Upper Ground Floor, Units 302, 305 and 306 on Level 3, Units 601, 602, 603, 605, 606, 607, 608, 609, 610, 611, 612, 613, 615 and 616 on Level 6, Units 701, 702, 705, 709, 710, 711, 712, 715 and 716 on Level 7, Units 1009, 1010, 1011, 1012, 1013, 1015 and 1016 on Level 10, Units 1101, 1102, 1103, 1105, 1106, 1107, 1108, 1109, 1110, 1111, 1112, 1113, 1115 and 1116 on Level 11, Units 1201, 1202, 1203, 1205, 1206, 1210, 1211, 1212 and 1216 on Level 12, Units 1501, 1502, 1505, 1506, 1507 and 1508 on Level 15, Units 1601, 1606, 1609, 1611, 1612, 1613 and 1615 on Level 16, Units 1701, 1702, 1703, 1709, 1710, 1711, 1712, 1713, 1715 and 1716 on Level 17, Unit 1809 on Level 18, Units 1901, 1906, 1909, 1910, 1911, 1912, 1913, 1915 and 1916 on Level 19, Units 2109, 2110, 2111, 2112, 2113, 2115 and 2116 on Level 21, Unit 4013 on Level 40, Units 4305 and 4316 on Level 43, Units 4611, 4612, 4613 and 4615 on Level 46, Units 4808 and 4809 on Level 48 and Unit 6316 on Level 63 of Office Tower.

As revealed various sets of Building and Land Ownership Certificate, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd., a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 2 January 1991 and expiring on 1 January 2041.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by Shum Yip Southern Land (Holdings) Co., Ltd.; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Description and tenure

Property

Various shop units of The property comprises retail residents’ clubhouse premises of a 3-storey residents’ Shum Yip Garden clubhouse building completed in Futian District 2002. Shenzhen the PRC. The total gross floor area of the property is of 2,646.43 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is subject RMB 37,000,000 .– to various tenancies. (100% interest attributable to the Company RMB 37,000,000 .–)

Notes:

We have assumed that the Company has secured transferable land use rights for commercial purposes in the property and will have no legal impediment in obtaining Buildings and Land Ownership Certificate for the property.
2 We have also assumed that the Property is held for a term of not less than 40 years being the maximum term of land for commercial purpose as stated in the land law of China.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by Shum Yip Holdings Company Limited and Shenzhen Investment Limited for a term of 70 years commencing on 22 January 1999 and expiring on 21 January 2069 for residential purpose;
ii The property is held by Shum Yip Holdings Company Limited and Shenzhen Investment Limited; and
iii Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Shop No. 117 The property comprises a ground on Ground Floor, floor shop within a 4-storey Fu Xing Building, commercial podium surmounted by No. 9 Fuxing Road, two blocks of 24-storey residential Futian, building. The development was Shenzhen completed in 1993. the PRC.

The gross floor area of the property is approximately 50.49 square metres.

RMB 1,600,000 .–

As advised by RMB 1,600,000 .– the Company, the property is leased for (100% interest a term of fourteen attributable to the years commencing Company on 1 January 1998 RMB 1,600,000 .–) and expiring on 31 December 2012 at a current monthly rent of RMB6,335.–.

The property is held for a term of 50 years commencing on 18 October 1988 under a Land Use Right Contract dated 11 November 1988.

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳市深業富安居物業管理有限公司 (a wholly-owned subsidiary of the Company).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by 深圳市深業富安居物業管理有限公司 for a term of 50 years commencing on 18 October 1988 and expiring on 17 October 2038 for residential and commercial purposes;
ii The property is held by 深圳市深業富安居物業管理有限公司; and
iii Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Shop units and car parking spaces of Fu Xing Building, No. 9 Fuxing Road, Futian District, Shenzhen, the PRC.
The property comprises shop premises within a 4-storey commercial podium and all the car parking spaces in basement surmounted by two blocks of 24-storey residential building which was completed in 1993.

As advised by the No Commercial Value Company, the property is leased to various (100% interest individual tenants. attributable to the Company No Commercial Value )

The total gross area of the property is approximately 1,593.20 square metres with breakdown as follows:

Gross Use Floor Area (sq. m.) Shop 91.20 Carpark 1,502.00 Total: 1,593.20 The property is held for a term of 50 years commencing on 18 October 1988.

Notes:

As certified by the Shenzhen Real Estate Management Bureau on 31 May 1993, the legal title to the property is vested in Shenzhen Caimao Industrial & Development Co., Ltd. (a wholly -owned subsidiary of the Company).
As advised by the Company, the legal interests in the property have been transferred to the Group.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 5,020,000 .

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Four shops of Yitai Centre comprises a 36-storey Yitai Centre, office building and two 36-storey Dongmen Zhong Road, residential buildings all surmounting Luohu District, a 5-level common commercial Shenzhen, podium. The subject development was the PRC. completed in 2004.

The property is vacant. RMB 6,274,800 .–

(100% interest attributable to the Company RMB 6,274,800 .–)

The property comprises 4 shop units within the subject development.

The total gross floor area of the shop units is of 627.48 square metres respectively.

The property is held for a term of 70 years commencing on 28 June 1993 and expiring on 27 June 2063.

Notes:

As stipulated in four sets of Building and Land Ownership Certificate all dated 3 December 2009, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd.（深業南方地產（集團）有限公司）, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 28 June 1993 and expiring on 27 June 2063.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 深業南方地產（集團）有限公司; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

175 Car Parking Zi Jing Yuan comprise six blocks of Spaces in 8 to 10-storey residential building Zi Jing Yuan completed in 1997. Jing Tian Residential Area The property comprises 175 car Futian District parking spaces with the subject Shenzhen, development. the PRC. The total gross floor area of the property is of 7,257 square metres.

The property is being No Commercial Value let on monthly basis. (100% interest attributable to the Company No Commercial Value )

The property is held for a term of 70 years commencing on 1 July 1996 and expiring on 30 June 2066.

Notes:

Pursuant to a Land Use Right Contract entered into between Town Planning and Land Administration Bureau of Shenzhen and Shum Yip Holdings (Shenzhen) Co., Ltd., the holding company of the Company, dated 2 July 1996, the latter acquired the subject land for the subject development.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group as at the valuation date are as follows:

Land Use Rights Contract	Yes
Planning Permit for Construction Land	Yes
Planning Permit for Construction Work	Yes
Construction Permit	Yes
Sales Permit	Yes

Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 17,500,000 .

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Pengji Holdings Co., Ltd.

Property Description and tenure
1. Levels 2 to 7, The property comprises industrial Factory Block No. 703, premises on the levels 2 to 7 of a Liantong Industrial 7-storey industrial building completed Area, in 1994. Luosha Road, Luohu District, The total gross floor area of the Shenzhen, property is 11,206.53 square metres. the PRC. The property is held for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in six sets of Building and Land Ownership Certificate all dated 15 December 2009, the property is held by Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for industrial purpose for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 24 February 2042 for industrial purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 39,223,000 .

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Description and tenure

Property

Level 5, The property comprises industrial Factory Block No. 705, premises on the level 5 of a 6-storey Liantong Industrial industrial building completed in 1989. Area, Luosha Road, The gross floor area of the property is Luohu District, 2,265 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 15 December 2009, the property is held by Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for industrial purpose for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 24 February 2042 for industrial purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 7,928,000 .

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Level 6, The property comprises industrial Factory Block No. 709, premises on the level 6 of a 6-storey Liantong Industrial industrial building completed in 1991. Area, Luosha Road, The gross floor area of the property is Luohu District, 1,687.44 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 15 December 2009, the property is held by Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for industrial purpose for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 24 February 2042 for industrial purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 5,906,000 .

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Levels 3 to 7, The property comprises industrial Factory Block No. 711, premises on the levels 3 to 7 of a Liantong 7-storey industrial building completed Industrial Area, in 1994. Luosha Road, Luohu District, The total gross floor area of the Shenzhen, property is 7,949.14 square metres. the PRC. The property is held for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.

Notes:

As stipulated in five sets of Building and Land Ownership Certificate all dated 15 December 2009, the property is held by Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for industrial purpose for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 24 February 2042 for industrial purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 27,822,000 .

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Levels 1 to 8, The property comprises a 7-storey Dormitory Block No. dormitory building completed in 101, 1993. Liantong Industrial Area, The total gross floor area of the Luosha Road, property is 4,726.34 square metres. Luohu District, Shenzhen, The property is held for a term of 70 the PRC. years commencing on 25 February 1992 and expiring on 24 February 2062.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation RMB 15,124,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 15,124,000 .–)

Notes:

As stipulated in eight sets of Building and Land Ownership Certificate all dated 4 July 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 197

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Levels 1 to 8, The property comprises a 7-storey Dormitory Block dormitory building completed in No. 102, 1993. Liantong Industrial Area, The total gross floor area of the Luosha Road, property is 4,789.24 square metres. Luohu District, Shenzhen, The property is held for a term of 70 the PRC. years commencing on 25 February 1992 and expiring on 24 February 2062.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation RMB 15,326,000 .– date, portion of the property was subject to (100% interest various tenancies. attributable to the Company RMB 15,326,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 22 November 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 to 8, The property comprises a 7-storey Dormitory Block dormitory building completed in No. 103, 1993. Liantong Industrial Area, The total gross floor area of the Luosha Road, property is 3,153.67 square metres. Luohu District, Shenzhen, The property is held for a term of 70 the PRC. years commencing on 25 February 1992 and expiring on 24 February 2062.

As at the valuation RMB 10,092,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 10,092,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 22 November 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1, 4, 6, 7 and 8, The property comprises dormitory Dormitory Block units on the levels 1, 4, 6 to 8 of No. 104, an 8-storey dormitory building Liantong completed in 1993. Industrial Area, Luosha Road, The total gross floor area of the Luohu District, property is 2,431.50 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
As at the valuation RMB 7,781,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company
RMB 7,781,000 .–)

Notes:

As stipulated in various sets of Building and Land Ownership Certificate dated 4 July 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 200

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 and 2, The property comprises dormitory Dormitory Block units on the levels 1 and 2 of No. 105, a 7-storey dormitory building Liantong Industrial completed in 1993. Area, Luosha Road, The total gross floor area of the Luohu District, property is 1,348.92 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
As at the valuation RMB 4,320,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company
RMB 4,320,000 .–)

Notes:

As stipulated in two sets of Building and Land Ownership Certificate both dated 4 July 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 201

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1, 6, 7 and 8, The property comprises dormitory Dormitory Block units on the levels 1, 6 to 8 of No. 106, an 8-storey dormitory building Liantong completed in 1992. Industrial Area, Luosha Road, The total gross floor area of the Luohu District, property is 1,573.29 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.

As at the valuation RMB 5,035,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 5,035,000 .–)

Notes:

As stipulated in various sets of Building and Land Ownership Certificate all dated 4 July 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 202

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1, 7 and 8, The property comprises dormitory Dormitory Block units on the levels 1, 7 and 8 of No. 107, an 8-storey dormitory building Liantong completed in 1992. Industrial Area, Luosha Road, The total gross floor area of the Luohu District, property is 1,358.27 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value )

Notes:

As confirmed by the Company, the property was held by it as at the valuation date.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 4,346,000 .

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 2 to 8, The property comprises dormitory Dormitory Block units on the levels 2 to 8 of an No. 108, 8-storey dormitory building Liantong completed in 1994. Industrial Area, Luosha Road, The total gross floor area of the Luohu District, property is 2,578.63 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.

As at the valuation RMB 8,252,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 8,252,000 .–)

Notes:

As stipulated in various sets of Building and Land Ownership Certificate all dated 4 July 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 204

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 to 8, The property comprises dormitory Dormitory Block units on the levels 1 to 8 of an No. 109, 8-storey dormitory building Liantong completed in 1994. Industrial Area, Luosha Road, The total gross floor area of the Luohu District, property is 4,789.24 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.

As at the valuation RMB 15,326,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 15,326,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 22 November 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 205

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 to 8, The property comprises dormitory Dormitory Block units on the levels 1 to 8 of an No. 110, 8-storey dormitory building Liantong completed in 1995. Industrial Area, Luosha Road, The total gross floor area of the Luohu District, property is 4,789.24 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.

As at the valuation RMB 15,326,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 15,326,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 22 November 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 206

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 and 2, The property comprises retail Dormitory Block premises on the levels 1 and 2 of No. 49, an 8-storey dormitory building Ba Gua Ling completed in 1991. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 2,234.40 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
As at the valuation RMB 15,641,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company
RMB 15,641,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 1 December 2000, the property is held by the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 12 October 2033 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 207

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Level 1, The property comprises retail Dormitory Block premises on the level 1 of two Nos. 50 and 51, 8-storey dormitory buildings both Ba Gua Ling completed in 1995. Industrial Area, Ba Gua Ling, The total gross floor area of the Futian District, property is 1,393.16 square metres. Shenzhen, the PRC. The property is held for the term of 50 years and 70 years expiring on between 30 November 2043 and 29 November 2063.

As at the valuation RMB 18,111,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 18,111,000 .–)

Notes:

As stipulated in two sets of Building and Land Ownership Certificate dated 3 December 2004 and 28 January 2005 respectively, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for the term of 50 years and 70 years expiring on between 30 November 2043 and 29 November 2063.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on between 30 November 2043 and 29 November 2063; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 208

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 88. Unit 710, The property comprises a dormitory Apartment Block unit on the level 7 of an 8-storey No. 52, apartment building completed in Ba Gua Ling 1995. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 50.51 square metres. Shenzhen, the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

Pursuant to the Land Use Right Contract dated 30 November 1993, the land of the subject development namely Lot No. B311-25 with an area of 8,755.3 square metres was granted to 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for residential purpose .
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 172,000 .

IV – 209

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 1, The property comprises retail Apartment Block premises on the level 1 of an 8-storey No. 11, dormitory building completed in Ba Gua Ling 1985. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 817.65 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in two sets of Building and Land Ownership Certificate dated 14 December 1998 and 4 March 1999 respectively, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value of the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 10,629,000 .

IV – 210

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 and 2, The property comprises retail Dormitory Block premises on the levels 1 and 2 of No. 6 (New), a dormitory building completed in Ba Gua Ling 1984. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 1,589.90 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 12 October 1983.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 20,669,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 10 October 2045; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 211

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Market value in Particulars of existing state as at occupancy 31 December 2012

Property Description and tenure occupancy 31 December 2012
1. Level 1, The property comprises retail As at the valuation No Commercial Value Dormitory Block No. 5, premises on the level 1 of a dormitory date, the property was Ba Gua Ling building completed in 1995. subject to various (100% interest Industrial Area, tenancies. attributable to the Ba Gua Ling, The gross floor area of the property is Company Futian District, 707.73 square metres. No Commercial Value) Shenzhen, the PRC.

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Hodlings Company Limited), a wholly-owned subsidiary of the Company.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 9,200,000 .

IV – 212

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 92. Level 1, The property comprises retail Dormitory Block premises on the level 1 of a dormitory No. 431, building completed in 1995. Ba Gua Ling Industrial Area, The gross floor area of the property is Ba Gua Ling, 851.58 square metres. Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983.

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a whollyowned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 11,071,000 .

IV – 213

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 1, The property comprises retail As at the valuation No Commercial Value Dormitory Block No. 21, premises on the level 1 of a dormitory date, the property was Ba Gua Second Road, building completed in 1986 subject to various (100% interest Ba Gua Ling tenancies. attributable to the Industrial Area, The gross floor area of the property is Company Ba Gua Ling, 266.65 square metres. No Commercial Value) Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983.

Notes:

As stipulated in two sets of Building and Land Ownership Certificate both dated 11 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 3,466,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 214

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 and 2, The property comprises retail Apartment Block premises on the levels 1 and 2 of No. 33, a dormitory building completed in Ba Gua Second Road, 1986. Ba Gua Ling Industrial Area, The gross floor area of the property is Ba Gua Ling, 1,456.28 square metres. Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in four sets of Building and Land Ownership Certificate all dated 14 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 15,291,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for commercial purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 215

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Levels 3 to 6, The property comprises dormitory Dormitory Block units on the levels 3 to 6 of a No. 6 (New), dormitory building completed in Ba Gua Ling 1985. Industrial Area, Ba Gua Ling, The total gross floor area of the Futian District, property is 3,232.29 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As confirmed by the PRC Lawyer, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a whollyowned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 10,990,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 10 October 2045; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 216

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 3 to 4, The property comprises dormitory Dormitory Block No. 6, units on the levels 3 and 4 of a Ba Gua Ling dormitory building completed in Industrial Area, 1984. Ba Gua Ling, Futian District, The gross floor area of the property is Shenzhen, 1,595.34 square metres. the PRC.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Notes:

As stipulated in two sets of Building and Land Ownership Certificate both dated 10 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 5,424,000 .

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 to 7, The property comprises dormitory Dormitory Block No. 7, units on the levels1 to 7 of a Ba Gua Ling dormitory building completed in Industrial Area, 1985. Ba Gua Ling, Futian District, The total gross floor area of the Shenzhen, property is 4,982.88 square metres. the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a whollyowned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 17,000,000 .

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 98. Level 3, The property comprises dormitory Apartment Block units on the level 3 of a dormitory No. 11, building completed in 1985. Ba Gua Ling Industrial Area, The gross floor area of the property is Ba Gua Ling, 400.61 square metres. Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Notes:

As stipulated in two sets of Building and Land Ownership Certificate dated 14 December 1998 and 4 March 1999 respectively, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 1,362,000 .

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in
Particulars of existing state as at
Property Description and tenure occupancy 31 December 2012
1. 20 dormitory units on The property comprises 20 dormitory As at the valuation No Commercial Value Level 5, units on the level 5 of a dormitory date, the property was Dormitory Block No. 24, building completed in 1986. subject to various (100% interest Ba Gua Ling tenancies. attributable to the Industrial Area, The total gross floor area of the Company Ba Gua Ling, property is 638.11 square metres. No Commercial Value) Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 14 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 2,170,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in
Particulars of existing state as at
Property Description and tenure occupancy 31 December 2012
1. 4 dormitory units on The property comprises 4 dormitory As at the valuation No Commercial Value Level 2 (East), units on the level 2 of a dormitory date, the property was Dormitory Block No. 30, building completed in 1986. subject to various (100% interest Ba Gua Ling tenancies. attributable to the Industrial Area, The total gross floor area of the Company Ba Gua Ling, property is 118.52 square metres. No Commercial Value) Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 14 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 403,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

8 dormitory units on The property comprises eight Level 5, dormitory units on the level 5 of Dormitory Block a dormitory building completed in No. 31, 1986. Ba Gua Ling Industrial Area, The total gross floor area of the Ba Gua Ling, property is 237.11 square metres. Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in four sets of Building and Land Ownership Certificate all dated 14 December 1998, portion of the property with a gross floor area of 651.81 square metres is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983. As confirmed by the PRC Lawyer, the remaining portion of the property is held by the Company.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 806,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose;
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 102. Dormitory Block No. 48, The property comprises a dormitory As at the valuation RMB 19,517,000 .– Ba Gua Ling building completed in 1986. date, the property was Industrial Area, subject to various (100% interest Ba Gua Ling, The gross floor area of the property is tenancies. attributable to the Futian District, 5,740.19 square metres. Company Shenzhen, RMB 19,517,000 .–) the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 18 November 1993, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited) (a wholly-owned subsidiary of the Company).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 12 October 2033 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in
Particulars of existing state as at
Property Description and tenure occupancy 31 December 2012
1. Levels 1 to 7 The property comprises a dormitory As at the valuation No Commercial Value (excluding Unit 305), building (excluding Unit 305) date, the property was Dormitory Block No. 35, completed in 1985. subject to various (100% interest Ba Gua Ling tenancies. attributable to the Industrial Area, The total gross floor area of the Company Ba Gua Ling, property is 2,645.33 square metres. No Commercial Value) Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 18 November 1993, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited) (a wholly-owned subsidiary of the Company).
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 8,994,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

Levels 1 to 8, The property comprises a dormitory Dormitory Block No. 41, building completed in 1988. Ba Gua Ling Industrial Area, The gross floor area of the property is Ba Gua Ling, 5,652.60 square metres. Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 19,219,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 19,219,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 25 November 1996, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 12 October 2033 for dormitory purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Market value in
Particulars of existing state as at
Property Description and tenure occupancy 31 December 2012
1. Levels 2 to 6, The property comprises all dormitory As at the valuation No Commercial Value Dormitory Block No. 5, units on the levels 2 to 6 of a date, the property was Ba Gua Ling dormitory building completed in subject to various (100% interest Industrial Area, 1995. tenancies. attributable to the Ba Gua Ling, Company Futian District, The total gross floor area of the No Commercial Value) Shenzhen, property is 3,345.58 square metres. the PRC.

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Hodlings Company Limited), a wholly-owned subsidiary of the Company.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 11,375,000 .

IV – 226

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 2 to 6, The property comprises dormitory Dormitory Block units on the levels 2 to 6 of a No. 431, dormitory building completed in Ba Gua Ling 1995. Industrial Area, Ba Gua Ling, The total gross floor area of the Futian District, property is 3,769.26 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a whollyowned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 12,815,000 .

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 to 5, The property comprises dormitory Dormitory Block units on the levels 1 to 5 of a No. 534, dormitory building completed in Ba Gua Ling 1996. Industrial Area, Ba Gua Ling, The total gross floor area of the Futian District, property is 3,210.78 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

As at the valuation RMB 10,917,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 10,917,000 .–)

Notes:

As stipulated in the Building and Land Ownership Cettificate, the property is held by Shum Yip Pengji Holdings Company Limited, Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 12 October 2033 for dormitory and canteen purposes; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 228

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 to 6, The property comprises all car Block 610, parking spaces on the levels 1 to 6 Ba Gua Ling of a multi-story carpark building Industrial Area, completed in 1986. Ba Gua Ling, Futian District, The total gross floor area of the Shenzhen, property is 14,139 square metres. the PRC.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 18 November 1993, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited) (a wholly-owned subsidiary of the Company).
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 19,795,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 11 October 2013 for car park purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Levels 7 and 8, The property comprises industrial Factory Block 618, premises on the levels 7 and 8 of an Ba Gua Ling industrial building completed in 1985. Industrial Area, Ba Gua Ling, The total gross floor area of the Futian District, property is 3,190.68 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 25 November 1996, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 9,444,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 11 October 2013 for industrial purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 3, The property comprises industrial Factory Block No. 513, premises on the level 3 of an Ba Gua Ling industrial building completed in 1986. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 969.81 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 10 July 1996, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 12 October 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:

Opinion of the PRC Lawyer on the property is summarized as follows:

i. The land use rights in the property is held by Shenzhen Pengji Industrial Development Corporation through administrative allocation for a term commencing on 12 October 1983 and expiring on 11 October 2013;
ii. The property is held by Shenzhen Pengji Industrial Development Corporation;
iii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 2,871,000 .

IV – 231

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 6, The property comprises industrial Factory Block No. 515, premises on the level 6 of an 69Ba Gua Ling industrial building completed in 1985. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 1,972.50 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 10 July 1996, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 5,839,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 11 October 2013 for industrial purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 232

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 5, The property comprises industrial Factory Block No. 532, premises on the level 5 of an Ba Gua Ling industrial building completed in 1985. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 1,060.10 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 10 July 1996, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 3,138,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 11 October 2013 for industrial purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 233

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 and 2, The property comprises retail Dormitory Block No. 6, premises on the levels 1 and 2 of Ba Gua Ling a dormitory building completed in Industrial Area, 1984. Ba Gua Ling, Futian District, The gross floor area of the property is Shenzhen, 2,501.59 square metres. the PRC.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 11 October 2033.

Notes:

As stipulated in two sets of Building and Land Ownership Certificate both dated 10 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 8,255,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 234

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 and 3, The property comprises industrial Factory Block No. 11, premises on the levels 1 and 3 of an Ba Gua Ling industrial building completed in 1985. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 2,047.76 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Hodlings Company Limited), a wholly-owned subsidiary of the Company.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 6,061,000 .

IV – 235

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 5, The property comprises industrial Factory Block No. 424, premises on the level 5 of an Ba Gua Ling industrial building completed in 1986. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 2,296.68 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited) (a whollyowned subsidiary of the Company).
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 6,798,000 .

IV – 236

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1, 2 and 12 The property comprises industrial Factory Block No. 430, premises on the levels 1, 2 and 12 of Ba Gua Ling an industrial building completed in Industrial Area, 1993. Ba Gua Ling, Futian District, The total gross floor area of the Shenzhen, property is 2,304.37 square metres. the PRC.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

Notes:

As confirmed by the Company, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited) (a whollyowned subsidiary of the Company).
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 7,604,000 .

IV – 237

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Levels 1 to 3, The property comprises industrial Factory Block No. 102C, premises on the levels 1 to 3 of an Shangbu industrial building completed in 1983. Industrial District, Futian District, The total gross floor area of the Shenzhen, property is 705 square metres. the PRC. The property is held for a term of 30 years commencing on 3 January 1983 and expiring on 3 January 2013.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 13 January 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 3 January 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 3,032,000 .

IV – 238

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 118. Level 1, The property comprises industrial As at the valuation No Commercial Value Factory Block No. 201, premises on the level 1 of an date, the property was Shangbu industrial building completed in 1983. subject to various (100% interest Industrial District, tenancies. attributable to the Futian District, The gross floor area of the property is Company Shenzhen, 865.43 square metres. No Commercial Value) the PRC. The property is held for a term of 30 years commencing on 3 January 1983 and expiring on 3 January 2013.

Notes:

As stipulated in three sets of Building and Land Ownership Certificate all dated 12 January 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 3 January 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 4,500,000 .

IV – 239

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. East Portion on The property comprises various Level 5, dormitory units on the level 5 of Dormitory Block a dormitory building completed in No. 402A, 1984. Shangbu Industrial District, The total gross floor area of the Futian District, property is 744.70 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 3 January 1983 and expiring on 3 January 2013.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in three sets of Building and Land Ownership Certificate all dated 12 January 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 3 January 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 2,979,000 .

IV – 240

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. 31 dormitory units on The property comprises 31 dormitory Level 5, units on the level 5 of a dormitory Dormitory Block building completed in 1989. No. 503, Shangbu The total gross floor area of the Industrial District, property is 1,028.33 square metres. Futian District, Shenzhen, The property is held for a term of 30 the PRC. years commencing on 3 January 1983 and expiring on 3 January 2013.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 12 January 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 3 January 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 4,113,000 .

IV – 241

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 121. Level 1, The property comprises retail As at the valuation No Commercial Value Dormitory Block premises on the level 1 of a dormitory date, the property was No. 505, building completed in 1985. subject to various (100% interest Shangbu tenancies. attributable to the Industrial District, The total gross floor area of the Company Futian District, property is 1,959.39 square metres. No Commercial Value) Shenzhen, the PRC. The property is held for a term of 30 years commencing on 3 January 1983 and expiring on 3 January 2013.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 12 January 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 3 January 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation; and
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 18,026,000 .

IV – 242

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 122. Levels 1 to Level 6, The property comprises office Management Centre premises on the levels 1 to 6 of Block No.501, a 12-storey industrial building Shangbu completed in 1984. Industrial District, Futian District, The total gross floor area of the Shenzhen, property is 3,161.63 square metres. the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 30 years commencing on 3 January 1983 and expiring on 3 January 2013.

Notes:

As stipulated in four Building and Land Ownership Certificate all dated 12 January 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 3 January 1983.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation;
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 10,750,000 .

IV – 243

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 123. Level 5, The property comprises industrial Factory Block No. 514, premises on the level 5 of an Ba Gua Ling industrial building completed in 1987. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 1,766.63 square metres. Shenzhen, the PRC. The property is held for a term of 25 years commencing on 30 October 1987 and expiring on 30 October 2012.

Notes:

As confirmed by the PRC Lawyer, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by Shenzhen Pengji Industrial Development Corporation through administrative allocation for a term commencing on 12 October 1983 and expiring on 11 October 2013;
ii. The property is held by Shenzhen Pengji Industrial Development Corporation;
iii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 5,229,000 .

IV – 244

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 18, An Hua Building, Luohu District, Shenzhen, the PRC.
The property comprises all office premises on the level 18 of an 18-storey commercial building completed in about 1991.

The gross floor area of the property is 670 square metres.

As at the valuation No commercial value date, the property was subject to various (100% interest tenancies. attributable to the Company No commercial value)

The property is held for a term of 50 years commencing on 1 February 1989 and expiring on 31 January 2039.

Notes:

Pursuant to an Agreement for Sale and Purchase dated 16 December 1992 entered into between 深圳博倫皮革製造有限公司 (“Party A”) and 深圳鵬基物業發展公司 (“Party B”) which is a wholly-subsidiary of the Company, the property was acquired by Party B. As confirmed by the Company, the transaction is not legal on the ground that the land grant procedures for the property have not yet completed by Party A.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 5,360,000 .

IV – 245

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Level 1 and Level 2, The property comprises industrial Factory Block No. 523, premises on the level 1 and level 2 Ba Gua Ling of an 8-storey industrial building Industrial Area, completed in 1984. Ba Gua Ling, Futian District, The total gross floor area of the Shenzhen, property is 2,468 square metres. the PRC.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 11 January 1999, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), a wholly-owned subsidiary of the Company, for a term of 30 years commencing on 12 October 1983 and expiring on 11 October 2013.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 11 October 2013 for industrial purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 4,887,000 .

IV – 246

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Various Retail Units of The property comprises retail Block 2, premises of a 3 levels common Peng Yi Garden commercial podium in about 1995. Ba Gua Ling Industrial Area, The total gross floor area of the Ba Gua Ling, property is 9,692.33 square metres. Futian District, Shenzhen, The property is held for a term of 70 the PRC. years commencing on 28 June 1992 and expiring on 27 June 2062.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 85,300,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 85,300,000 .–)

Notes:

As stipulated in two sets of Building and Land Ownership Certificate dated 24 January 2000, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 27 February 2062 for commercial purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 247

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

Multi-purpose Building Block No. 2, Longjing Zhuguang Industrial Area, Mao Tou Shan, Bei Huan Road, Nanshan District, Shenzhen,

The property comprises a 4-storey multi-purpose building completed in 1994.

The total gross floor area of the property is 3,795.42 square metres which comprises the followings:

As at the valuation RMB 14,400,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 14,400,000 .–)

==> picture [227 x 128] intentionally omitted <==

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

the PRC. Gross
Use Floor Area
(sq. m.)
Apartment 1,488.10
Office 617.24
Shopping Centre 656.37
Restaurant 1,033.71
Total: 3,795.42
----- End of picture text -----

The property is held for a term of 50 years commencing on 8 June 1992 and expiring on 7 June 2042.

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by variouis sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 248

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 128. Unsold Portion of The property comprises various Factory Block No. 7, workshops of a 6-storey industrial Longjing Zhuguang building completed in 1994. Industrial Area, Mao Tou Shan, The total gross floor area of the Bei Huan Road, property is 2,225.43 square metres. Nanshan District, Shenzhen, The property is held for a term of 30 the PRC. years commencing on 8 June 1992 and expiring on 7 June 2022.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 6,899,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 6,899,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by variouis sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 249

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 129. East Portion on The property comprises industrial Level 4, Level 5, premises on levels 4 and 5 of a Factory Block No. 3, 6-storey industrial building completed Longjing Zhuguang in 1996. Industrial Area, Mao Tou Shan, The total gross floor area of the Bei Huan Road, property is 3,183.93 square metres. Nanshan District, Shenzhen, The property is held for a term of 30 the PRC. years commencing on 13 September 1994 and expiring on 12 September 2024.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation RMB 9,870,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 9,870,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by variouis sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 250

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Factory Block No. 1, The property comprises industrial Longjing Zhuguang premises a 6-storey industrial building Industrial Area, completed in 1993. Mao Tou Shan, Bei Huan Road, The gross floor area of the property is Nanshan District, 6,415.15 square metres. Shenzhen, the PRC. The property is held for a term of 30 years commencing on 8 June 1992 and expiring on 7 June 2022.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 12,830,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 12,830,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by variouis sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 251

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various Residential The property comprises various Units of Residential residential units of three 7/8 storey Block Nos.1, 3 and 4, residential buildings all completed in Gaofa Oriental 2002. Hitech Park, Mao Tou Shan, The total gross floor area of the Bei Huan Road, property is 4,235.44 square metres. Nanshan District, Shenzhen, The property is held for a term of 50 the PRC. years commencing on 28 February 1998 and expiring on 27 February 2048.

As at the valuation RMB 30,919,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 30,919,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by variouis sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 252

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 2 and 3, The property comprises industrial Huake Industrial premises on levels 2 and 3 of a Building, 5-storey industrial building completed Gaofa Oriental in 1996. Hitech Park, Mao Tou Shan, The gross floor area of the property is Bei Huan Road, 7,103.46 square metres. Nanshan District, Shenzhen, The property is held for a term of 50 the PRC. years commencing on 28 February 1998 and expiring on 28 February 2048.

As at the valuation RMB 25,572,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 25,572,000 .–)

Notes:

As stipulated in eight sets of Building and Land Ownership Certificate dated 27 April 2005 and 28 April 2005 respectively, the property is held by 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 28 February 1998 and expiring on 28 February 2048.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by variouis sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 28 February 2048 for industrial purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

IV – 253

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure
1. Staff Canteen, The property comprises a 2-storey Gaofa Oriental canteen building completed in 1996. Hitech Park, Mao Tou Shan, The gross floor area of the property is Bei Huan Road, 931.88 square metres. Nanshan District, Shenzhen, the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 349,000 .– date, the property was subject to a tenancy. (100% interest attributable to the Company RMB 349,000 .–)

Notes:

Pursuant to a Land Asset Transfer Agreement（土地資產轉讓協定）entered into between 深圳市高發投資控股有限公司 and 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, dated 30 December 2004, the latter acquired the property from the former.
For nature of buildings and structures of the property where no known market can be identified, we have adopted the Depreciated Replacement Costs Method to value them. It is a method of using current replacement costs to arrive at the fair value of a property in existing state as at the date of valuation. This method of valuation requires an estimate of the market value of the land in its existing use (if any) and an estimate of the new replacement costs of the buildings and other site works, from which deductions are then made to allow for age, condition, functional obsolescence, etc.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by variouis sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Development Site in Keng Zi Town, Longgang District Shenzhen, the PRC
The property comprises a parcel of land with an area of 4,462.38 square metres for industrial purpose.

As advised by the No Commercial Value Company, the property is vacant. (100% interest attributable to the Company No Commercial Value)

Notes:

Pursuant to a Land Asset Transfer Agreement（土地資產轉讓協定）entered into between 深圳市高發投資控股有限公司 and 深圳鵬基（集團）有限公司 (Shenzhen Pengji (Holdings) Company Limited) (now known as Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, dated 30 December 2004, the latter acquired the property from the former.
In our valuation, we have assumed that Shenzhen Pengji (Holdings) Company Limited shall secured legal title to the property for a land use right term of not less than 50 years, being the maximum term for industrial land uses as stipulated in the Article of the Provision Regulation of the PRC and Granting and Transferring the Land Use Rights of State-owned Land in Cities and Towns.
Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 2,348,000 .

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Various Retail Units of The property comprises retail Blocks 58 to 65, premises of a common commercial Phase 5, podium within 8 residential buildings. Peng Xing Garden, Liantong The total gross floor area of the Industrial Area, property is 1,486.06 square metres. Luosha Road, Luohu District, The property is held for a term of 70 Shenzhen, years commencing on 25 February the PRC. 1992 and expiring on 24 February 2062.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 14,900,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 14,900,000 .–)

Notes:

As stipulated in eight sets of Building and Land Ownership Certificate dated 27 September 2008 and 28 September 2008 respectively, the property is held by Shum Yip Pengji Holdings Company Limited, a whollyowned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by eight sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for commercial purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 136. Various Retail The property comprises retail Units within premises of a common commercial Phase 6, podium. Peng Xing Garden, Liantong The total gross floor area of the Industrial Area, property is 7,784.37 square metres. Luosha Road, Luohu District, The property is held for a term of 70 Shenzhen, the PRC. years commencing on 25 February 1992 and expiring on 24 February 2062.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 74,730,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 74,730,000 .–)

Notes:

As stipulated in two sets of Building and Land Ownership Certificate both dated 27 September 2008, the property is held by Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 25 February 1992 and expiring on 24 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited for a term expiring on 24 February 2062 for commercial purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 137. Level 1 The property comprises residential Dormitory Block No.9, premises on the levels 1 of a Ba Gua Ling dormitory building. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 306.90 square metres. Shenzhen, the PRC.

Notes:

As confirmed, the property is held by Shum Yip Pengji Holdings Company Limited.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by Shenzhen Pengji Industrial Development Corporation through administrative allocation for a term commencing on 12 October 1983 and expiring on 11 October 2013;
ii. The property is held by Shenzhen Pengji Industrial Development Corporation;
iii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 1,000,000 .

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Dormitory Block No. 47, The property comprises residential Ba Gua Ling premises of a dormitory building. Industrial Area, Ba Gua Ling, The gross floor area of the property is Futian District, 2,058.17 square metres. Shenzhen, the PRC.

As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As confirmed, the property is held by Shum Yip Pengji Holdings Company Limited.
Since the title certificate for the property has not yet obtained by the Company, we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 4,900,000 .

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Unit 101 of Podium The property comprises a retail Block Nos.5, 6 and 7 unit on the level 1within a 2-storey Shengshi Pengcheng commercial podium underneath three

（盛世鵬程） 30-storey residential buildings all Shangbu Road and completed in 2005. Sungang Road Futian District, The gross floor area of the property is Shenzhen, 1,944.63 square metres. the PRC.

As at the valuation RMB 43,800,000 .– date, the property was subject to a tenancy. (100% interest attributable to the Company RMB 43,800,000 .–)

The property is held for a term of 70 years commencing on 18 November 1992 and expiring on 17 November 2062.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 28 June 2011, the property is held by Shum Yip Pengji Holdings Company Limited, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 18 November 1992 and expiring on 17 November 2062 for commercial purpose.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificates, the property is held by Shum Yip Pengji Holdings Company Limited for a term commencing on 28 April 1991 and expiring on 27 April 2041; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various retail units on The property comprises retail space Levels 1 and 2 of on the level 1 and level 2 under ten Apartment Block blocks of 8 to 23-storey apartment Nos. 1 to 10, building completed in between 1992 Peng Sheng Village, to 1997. Ba Gua Ling, Futian District, The total gross floor area of the Shenzhen, property is 13,169.10 square metres. the PRC.

As at the valuation No Commercial Value date, the property was subject to various ( 50% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 20 August 1992, the property is held by 深圳鵬盛房地產實業有限公司, a 50%-owned subsidiary of the Company, for a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 119,800,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificates, the property is held by 深圳鵬盛房地產實業有限公司 for a term commencing on 28 April 1991 and expiring on 27 April 2041;
ii. As revealed by the Land Use Rights Certificate, the land use rights in the property is held by 深圳鵬盛房地產實業有限公司 through administrative allocation for residential purpose;
iii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by 深圳鵬盛房地產實業有限公司; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Theatre Building, Shop Nos. 201 to 207 on Level 2, Shop Nos.301 to 308 on Level 3, Pengsheng Nianhua, Ba Gua 1st Road, Ba Gua Ling, Futian District, Shenzhen, the PRC.
The property comprises a single storey theatre building, all retail spaces on the level 2 and level 3 within a 4-storey commercial podium underneath a two 22-storey residential buildings. The subject development was completed in 2003.

The total gross floor area of the property is 3,953.19 square metres including theatre area of 757.96 square metres.

As at the valuation No Commercial Value date, the property was subject to various ( 50% interest tenancies. attributable to the Company No Commercial Value)

The property is held for a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041.

Notes:

As stipulated in various Building and Land Ownership Certificates dated 9 June 2004 and 21 July 2004 respectivley, the property is held by 深圳鵬盛地產實業有限公司, a 50%-owned subsidiary of the Company, for a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 23,700,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificates, the property is held by 深圳鵬盛房地產實業有限公司 for a term commencing on 28 April 1991 and expiring on 27 April 2041;
ii. As revealed by the Land Use Rights Certificate, the land use rights in the property is held by 深圳鵬盛房地產實業有限公司 through administrative allocation for residential purpose;
iii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by 深圳鵬盛房地產實業有限公司; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Retail Spaces on The property comprises retail Level 1, spaces on the level 1 of a 7-storey Block 14, commercial/residential building Hong Li Village, completed in 1991. Zhen Xing Road, Futian District, The gross floor area of the property is Shenzhen, 1,032.32 square metres. the PRC.

As at the valuation RMB 16,517,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 16,517,000 .–)

The property is held for a term of 50 years commencing on 12 August 1988 and expiring on 11 August 2038.

Notes:

As revealed by the Building and Land Ownership Certificate dated 13 March 1992, the property is held by 深圳市萬廈居業公司 which is wholly-owned subsidiary of the Company for a term of 50 years commencing on 12 August 1988 and expiring on 11 August 2038.
As stipulated in the aforesaid Building and Land Ownership Certificate, the property is subject to a mortgage in favour of Agriculture Bank – Shangbu Branch.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by 深圳市萬廈居業公司 for a term commencing on 12 August 1988 and expiring on 11 August 2038; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Unit A on Level 3, The property comprises an office Block 17, unit on the level 3 of a 3-storey Hong Li Village, commercial building completed in Hong Li Road, 1991. Futian District, Shenzhen, The gross floor area of the property is the PRC. 464.41 square metres.

As at the valuation RMB 1,421,000 .– date, the property was leased at an annual (100% interest rent of RMB339,600.– attributable to the for a term expiring on Company 1 September 2014. RMB 1,421,000 .–)

The property is held for a term of 50 years commencing on 12 August 1988 and expiring on 11 August 2038.

Notes:

As revealed by the Building and Land Ownership Certificate dated 9 April 1992, the property is held by 深圳市萬廈居業公司 which is a wholly-owned subsidiary of the Company for a term of 50 years commencing on 12 August 1988 and expiring on 11 August 2038.
As stipulated in the aforesaid Building and Land Ownership Certificate, the property is subject to a mortgage in favour of Agriculture Bank – Shangbu Branch.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by 深圳市萬廈居業公司 for a term commencing on 12 August 1988 and expiring on 11 August 2038; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 144. Zhong Fa Industrial The property comprises a 6-storey Building, industrial building completed in 1993. Ba Gua Ling Industrial Area, The total gross floor area of the Ba Gua Road, property is 6,708.88 square metres. Ba Gua Ling, Futian District, The property is held for a term of 30 Shenzhen, years commencing on 8 November the PRC. 1992 and expiring on 7 November 2022.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 26,800,000 .– date, the property was subject to various ( 74.57% interest tenancies. attributable to the Company RMB 19,984,760 .–)

Notes:

Pursuant to six sets of Building and Land Ownership Certificate respectively dated 21 May 1996, 16 April 1996, 6 May 1996 and 14 March 1995 (Nos. 0103085, 0102907, 0103041, 0098741, 0098742 and 0098753), the property is held by 深圳市中發實業股份有限公司 which is a 74.57%-owned subsidiary of the Company for a term of 30 years commencing on 8 November 1992 and expiring on 7 November 2022.
As stipulated in the aforesaid Building and Land Ownership Certificates, Level 1 of the property is subject to a mortgage in favour of Bank of China – Shangbu Branch.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by six sets of Building and Land Ownership Certificate, the property is held by 深圳市中發實業股份有限公司 for a term commencing on 8 November 1992 and expiring on 7 November 2022; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 1 and 2, The property comprises the Ba Gua Ling commercial premises on level 1 and Commercial Centre 12 residential units on the level 2 Block No. 33, of a 7-storey commercial/residential Ba Gua Ling building completed in 1986. Industrial Area, Ba Gua Ling, The total gross floor area of the Futian District, property is 1,104.01 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

As at the valuation No Commercial Value date, the property was subject to various ( 74.57% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in three sets of Building and Land Ownership Certificate all dated 9 December 1998, the property is held by Shenzhen Pengji Industrial Development Corporation for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
The property was injected by the Company to 深圳中發實業股份有限公司 which is a 74.57%-owned subsidiary of the Company via an investment certificate.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i As revealed by the Building and Land Ownership Certificates, the property is held by Shum Yip Pengji Holdings Company Limited for a term commencing on 12 October 1983 and expiring on 12 October 2033;
ii As revealed by the Land Use Rights Certificate, the land use rights in the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for warehouse purpose;
iii After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iv Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 7,700,000 .

IV – 266

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Research and The property comprises industrial Development Building premises of an 8-storey industrial (excluding Portion of the building (except portion of the level Level 6), 6) completed in 2000. B311-38 Ba Gua Third Road, The total gross floor area of the Ba Gua Ling property is 10,419 square metres. Industrial Area, Ba Gua Ling, The property is held for a term of 50 Futian District, years commencing on 16 June 1996 Shenzhen, and expiring on 15 June 2046. the PRC.

As at the valuation RMB 34,383,000 .– date, the property was subject to various ( 30% interest tenancies. attributable to the Company RMB 10,314,900 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 21 June 1996, the property is held by 深圳榮生化工有限公司 (now known as 深圳市榮生物業服務有限公司）which is a 30%-owned associated company of the Company for a term of 50 years commencing on 16 June 1996 and expiring on 15 June 2046.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by 深圳市榮生物業服務有限公司 for a term commencing on 16 June 1996 and expiring on 15 June 2046;
ii. The property is held by 深圳市榮生物業服務有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Rong Sheng Chemical The property comprises various Industrial Complex, blocks of industrial building and Ba Gua Ling ancillary structures having a total Industrial Area, gross floor area of 14,200.41 square Ba Gua Ling, metres. They were all completed in Futian District, 1991. Shenzhen, the PRC. The property is held for a term commencing on 25 May 1985 and expiring on 24 May 2015.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 42,000,000 .– date, the property was subject to various ( 30% interest tenancies. attributable to the Company RMB 12,600,000 .–)

Notes:

As revealed by the Building and Land Ownership Certificate, the property is held by 深圳榮生化工有限公司 (now known as 深圳市榮生物業服務有限公司）which is a 30%-owned associated company of the Company for a term commencing on 25 May 1985 and expiring on 24 May 2015;
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by 深圳市榮生物業服務有限公司 for a term commencing on 25 May 1985 and expiring on 24 May 2015;
ii. The property is held by 深圳市榮生物業服務有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Levels 3 and 4, The property comprises dormitory Dormitory Block No. 28, units on the levels 3 and 4 of a Ba Gua Ling dormitory building completed in Industrial Area, 1985. Ba Gua Ling, Futian District, The total gross floor area of the Shenzhen, property is 1,659.08 square metres. the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 11 October 2033.

As at the valuation No Commercial Value date, the property was subject to various ( 30% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in two sets of Building and Land Ownership Certificate, the property is held by 深圳榮生化工有限公司 (now known as 深圳市榮生物業服務有限公司) which is a 30%-owned associated company of the Company for a term of 50 years commencing on 12 October 1983 and expiring on 11 October 2033.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 5,641,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by 深圳市榮生物業服務有限公司 for a term commencing on 12 October 1983 and expiring on 12 October 2033;
ii. The property is held by 深圳市榮生物業服務有限公司; and
iii. The land use rights of the property were obtained through administrative allocation; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

7 dormitory units on The property comprises 7 dormitory Level 3, units on the level 3 of a dormitory Apartment Block building completed in 1985. No. 11 (North), Ba Gua Ling The total gross floor area of the Industrial Area, property is 215.74 square metres. Ba Gua Ling, Futian District, The property is held for a term of Shenzhen, 50 years commencing on 12 October the PRC. 1983 and expiring on 12 October 2033.

As at the valuation No Commercial Value date, the property was subject to various ( 30% interest tenancies. attributable to the Company No Commercial Value)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 17 April 1999, the property is held by 深圳榮生化工有限公司 (now known as 深圳市榮生物業服務有限公司) which is a 30%-owned associated company of the Company for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 734,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by 深圳市榮生物業服務有限公司 for a term commencing on 12 October 1983 and expiring on 12 October 2033;
ii. The property is held by 深圳市榮生物業服務有限公司;
iii. The land use rights of the property were obtained through administrative allocation; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 150. Unit Nos. 206 to 209, The property comprises 10 apartment 211, 216 to 220, units on the level 2 of an apartment Apartment Block building completed in 1995. No. 52, Ba Gua Second Road, The total gross floor area of the Ba Gua Ling property is 393.24 square metres. Industrial Area, Ba Gua Ling, The property is held for a term of 50 Futian District, years commencing on 30 November Shenzhen, 1993 and expiring on 29 November the PRC. 2043.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 1,337,000 .– date, the property was subject to various ( 30% interest tenancies. attributable to the Company RMB 401,000 .–)

Notes:

As stipulated in ten sets of Building and Land Ownership Certificate all dated 17 October 1997, the property is held by 深圳榮生化工有限公司 (now known as 深圳市榮生物業服務有限公司）which is a 30%-owned associated company of the Company for a term of 50 years commencing on 30 November 1993 and expiring on 29 November 2043.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by 深圳市榮生物業服務有限公司 for a term commencing on 30 November 1993 and expiring on 29 November 2043;
ii. The property is held by 深圳市榮生物業服務有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure
1. Shanglin Yuan Hotel, The property comprises a hotel Lot No. B311-29, building which was completed in Ba Gua Ling 1986. The total gross floor area of the Industrial Area, property is 8,840.19 square metres. Ba Gua Ling, Futian District, Shenzhen, the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012

As at the valuation RMB 5,000,000 .– date, the property was subject to a tenancy. (100% interest attributable to the Company RMB 5,000,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 鵬基上林苑酒店 which is a wholly-owned subsidiary of the Company for a term of 20 years commencing on 12 October 1983 and expiring on 11 October 2003.
Our valuation of the property only reflects the depreciated replacement costs and ascribed no commercial value to the land portion.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 11 October 2003;
ii. The land use rights term for the property has been expired and has not been renew;
iii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

16 dormitory units on The property comprises 16 dormitory Level 2 and units on the level 2 and 26 dormitory 26 dormitory units on units on the level 3 of a dormitory Level 3, building completed in 1986. Dormitory Block No. 31, Ba Gua Ling The total gross floor area of the Industrial Area, property is 1,335.40 square metres. Ba Gua Ling, Futian District, The property is held for a term of Shenzhen, 50 years commencing on 12 October the PRC. 1983 and expiring on 12 October 2033.

As at the valuation RMB 4,540,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 4,540,000 .–)

Notes:

As revealed by the Building and Land Ownership Certificate dated 14 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited), which is a wholly-owned subsidiary of the Company for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by Shum Yip Pengji Holdings Company Limited for a term commencing on 12 October 1983 and expiring on 12 October 2033;
ii. The property is held by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

Various dormitory The property comprises various units of dormitory units of a dormitory Dormitory Block No. 23, building completed in 1986. Ba Gua Ling Industrial Area, The total gross floor area of the Ba Gua Ling, property is 207.41 square metres. Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
Market value in
Particulars of existing state as at occupancy 31 December 2012 As at the valuation No Commercial Value date, the property was subject to various (100% interest tenancies. attributable to the Company
No Commercial Value)

Notes:

As revealed by the Building and Land Ownership Certificate dated 11 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited) which is a wholly-owned subsidiary of the Company for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose;
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 705,000 .

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in
Particulars of existing state as at
Property Description and tenure occupancy 31 December 2012
1. 14 dormitory units on The property comprises 14 dormitory As at the valuation No Commercial Value Level 1, units on the level 1 of a dormitory date, the property was Dormitory Block No. 24, building completed in 1986. subject to various (100% interest Ba Gua Ling tenancies. attributable to the Industrial Area, The total gross floor area of the Company Ba Gua Ling, property is 446.60 square metres. No Commercial Value) Futian District, Shenzhen, The property is held for a term of the PRC. 50 years commencing on 12 October 1983 and expiring on 12 October 2033.

Notes:

As revealed by the Building and Land Ownership Certificate dated 11 December 1998, the property is held by 深圳市鵬基工業發展總公司 (Shenzhen Pengji Industrial Development Corporation) (now known as Shum Yip Pengji Holdings Company Limited) which is a wholly-owned subsidiary of the Company for a term of 50 years commencing on 12 October 1983 and expiring on 12 October 2033.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 12 October 2033 for dormitory purpose;
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 1,520,000 .

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 155. Unit 2 on 15th Floor The property comprises an office Block AB unit of a 28-storey office building Nanfang completed in 1998. Zhengquan Building No.2018 Jianshe Road The gross floor area of the property is Luohu District 206.34 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 28 May 1995 and expiring on 27 May 2045.

Market value in Particulars of existing state as at occupancy 31 December 2012 As at the valuation RMB 2,900,000 .– date, the property was subject to a tenancy. (100% interest attributable to the Company RMB 2,900,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 9th May 2006,the property is held by 深圳鵬基管理服務有限公司 which is a wholly-owned subsidiary of the Company for a term of 50 years commencing on 28 May 1995 and expiring on 27 May 2045.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by 深圳市鵬基物業管理服務有限公司 for a term commencing on 28 May 1995 and expiring on 27 May 2045; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 156. Unit D1 on 12th Floor, The property comprises an office unit As at the valuation RMB 610,000 .– Shangmao Plaza, on 12th floor of a 59-storey office date, the property was No.49 Zhongshan building completed in 2004. subject to a tenancy. (100% interest Nan Road, attributable to the Nanjing City, The gross floor area of the property is Company Jiangsu Province, 47.13 square metres. RMB 610,000 .–) the PRC.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 12 January 2005, the property is held by 深圳市鵬基物業管理服務有限公司 which is a wholly-owned subsidiary of the Company.
In our valuation, we have assumed that the property is held for a term of 50 years for composite purpose (being the maximum term for land use for composite purpose under the land law of the PRC).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by 深圳市鵬基物業管理服務有限公司; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 157. Shop 8046 on 8th Floor, The property comprises a retail unit As at the valuation RMB 730,000 .– Chan Yuan on 8th floor of a 9-storey commercial date, the property was Commercial City, complex completed in 2002. subject to a tenancy. (100% interest No.11 Chan Yuan Road, attributable to the Nanjing City, The gross floor area of the property is Company Jiangsu Province, 58.16 square metres. RMB 730,000 .–) the PRC.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 19 December 2005, the property is held by 深圳市鵬基物業管理服務有限公司 which is a wholly-owned subsidiary of the Company.
In our valuation, we have assumed that the property is held for a term of 40 years for commercial purpose (being the maximum term for land use for commercial purpose under the land law of the PRC).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by 深圳市鵬基物業管理服務有限公司; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 158. Shop in between The property comprises a retail unit As at the valuation RMB 20,000 .– Blocks B and C on on level 1 of a commercial/residential date, the property was Level 1, building completed in 1986. subject to a tenancy. (100% interest Nanyang Building, attributable to the Jianshe Road, The gross floor area of the property is Company Luohu District, 23.26 square metres. RMB 20,000 .–) Shenzhen, the PRC. The property is held for a term of 20 years commencing on 5 August 1986 and expiring on 4 August 2006.

Notes:

As stipulated in the Building Ownership Certificate dated 5 August 1986, the property is held by 深圳市鵬基勞動服務有限公司 which is a wholly-owned subsidiary of the Company for a term of 20 years commencing on 5 August 1986 and expiring on 4 August 2006.
Our valuation of the property only reflects the depreciated replacement costs and ascribed no commercial value to the land portion.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 深圳市鵬基勞動服務有限公司 for a term commencing on 5 August 1986 and expiring on 4 August 2006 which has not been renewed yet; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 159. Units 402, 407, The property comprises four As at the valuation RMB 960,000 .– 410 and 419 residential units on 4th floor of a date, the property was on 4th Floor dormitory building completed in 1995. subject to a tenancy. (100% interest Dormitory Block No. 52, attributable to the Ba Gua Ling The total gross floor area of the Company Industrial Area, property is 155.60 square metres. RMB 960,000 .–) Ba Gua Ling, Futian District, The property is held for a term of 50 Shenzhen, years commencing on 30 November the PRC. 1993 and expiring on 29 November 2043.

Notes:

As stipulated in four sets of Building and Land Ownership Certificate dated 1 August 1997 and 12 August 1997, the property is held by 深圳鵬基工業區管理服務有限公司 which is a wholly-owned subsidiary of the Company for a term of 50 years commencing on 30 November 1993 and expiring on 29 November 2043.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by four sets of Building and Land Ownership Certificate, the property is held by 深圳市鵬基物業管理服務有限公司 for a term commencing on 30 November 1993 and expiring on 29 November 2043; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

Dormitory Block Nos. 6 to 8, Factory Block Nos. 1 to 3, Pengji Industrial City Ma Di Village, Lu Yao, Henggang Town, Longgang District, Shenzhen, the PRC.

The property comprises a parcel of land with an area of 32,809.50 square metres on which an industrial complex consisting three blocks of 4-storey factory building (Block Nos. 1, 2 and 3) and three blocks of 5-storey dormitory building (Block Nos. 6, 7 and 8) are erected. The property was completed in 1993.

The total gross floor area of the property is 25,669 square metres as followings:

As at the valuation RMB 31,000,000 .– date, the property was subject to various (100% interest tenancies. attributable to the Company RMB 31,000,000 .–)

Use Factory Dormitory Total:	Gross Floor Area (sq.m.) 18,118.50 7,550.50
	25,669.00

The property is held for a term of 30 years commencing on 27 November 1991 and expiring on 27 November 2041.

Notes:

As stipulated in six sets of Building and Land Ownership Certificate dated either 6 January 1999 or 31 May 1999, the property is held by 龍崗鵬基物業管理公司 which is a wholly-owned subsidiary of 深圳鵬基物業發展公司 for a term of 30 years commencing on 27 November 1991 and expiring on 27 November 2041.
As stipulated in the aforesaid Building and Land Ownership Certificates, the property (excluding Block No. 2) is subject to various mortgages.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by six sets of Building and Land Ownership Certificate, the property is held by 深圳市鵬基物業管理服務有限公司 for a term commencing on 27 November 1991 and expiring on 27 November 2041; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Land Co., Ltd.

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Office and Retail Coastal International Centre is Portions of Coastal a parcel of land with an area of International Centre 26,819.60 square metres on which

（沿海國際中心） a composite development namely No.1296 Ganjiang “Coastal International Centre” are West Road erected in 2009. Jinchang District The property comprises office

Suzhou City premises on level 3 to 27 and retail

Jiangsu Province premises on level 1 to 2 of a 51-storey

the PRC commercial building and retail premises of a 3-storey commercial building and within the subject development.

The property is currently vacant.

RMB 706,000,000 .– (100% interest attributable to the Company RMB 706,000,000 .–)

The gross floor areas of office premises and retail premises are of 30,906.18 square metres and 11,611.82 square metres respectively.

The property is held for a term expiring on 11 April 2046 for commercial service purpose.

Notes:

As revealed by the Land Use Rights Certificate dated 5 September 2003, the land use rights of the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）, a wholly-owned subsidiary of the Company, for a term expiring on 11 April 2046 for commercial service purpose.
As revealed by various Building Ownership Certificates all dated 19 April 2010, the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Certificate : Yes Building and Land Ownership Certificate : Yes Pre-sale Permit : Yes Completion Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property is held by Suzhou New Development Investment Co., Ltd. for a term expiring on 11 April 2046 for commercial service purpose; and
ii. The property is held by Suzhou New Development Investment Co., Ltd.;
iii. The property is subject to 25 mortgages in favour of China Agricultural Bank – Suzhou Branch ; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure 162. Units A1, A2, A3 and The property comprises four office A4 on 4th Floor and units on 4th floor and an office unit Unit A1 on 5th Floor of on 5th floor of a 12-storey office Jinzhou Building building completed in about 1990’s. （金洲大廈） No.130 Changxu Road The total gross floor area of the （閶胥路） property is of 1,865 square metres. Suzhou City Jiangsu Province the PRC

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value currently vacant. (100% interest attributable to the Company No Commercial Value)

Notes:

As revealed by five sets of Land Use Rights Certificate dated 18 September 2003 and 24 September 2003 respectively, the land use rights of the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）, a wholly-owned subsidiary of the Company, for commercial service purpose.
As revealed by five sets of Building Ownership Certificates, the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Certificate : Yes Building and Land Ownership Certificate : Yes

As specified in the aforesaid Land Use Rights Certificates, the land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. We have attributed no commercial value to such portion of the property in our valuation. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 5,600,000 .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by Suzhou New Development Investment Co., Ltd. through administrative allocation for commercial purpose;
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Suzhou New Development Investment Co., Ltd.; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Shumkang (Group) Co., Ltd.

Property Description and tenure 163. Level 2 and various The property comprises shop premises residential units, on Level 2 and various residential Shen Gang Garden, units within a 32-storey commercial/ Wenjin Road, residential building which was Luohu District, completed in March 1994. Shenzhen, the PRC. The floor areas of the shop premises and residential units are 1,433.76 square metres and 1,946.36 square metres respectively.

Market value in existing state as at 31 December 2012

Particulars of occupancy

As advised by the RMB 32,440,000 .– Company, all the shop premises and various (80% interest residential units are attributable to the leased to various Company individual tenants. RMB 25,952,000 .–)

The property is held for a term of 70 years commencing on 8 August 1991 and expiring on 7 August 2061.

Notes:

As revealed by two sets of Building and Land Ownership Certificate both dated 17 February 2006, Units 10C and 23D of the property is held by 深圳深港實業（集團）有限公司 (now known as Shum Yip Shumkang (Group) Company Limited（深業深港（集團）有限公司）, a 80% owned subsidiary of the Company,, for a term of 70 years commencing on 8 August 1991 and expiring on 7 August 2061.
As stipulated in two sets of Land Use Rights Certificate, the land use rights in the property is held by 深圳深港實業（集團）有限公司 for a term of 70 years commencing on 8 August 1991 and expiring on 7 August 2061 for commercial and residential uses.
In our valuation, we have assumed the remaining Buildings and Land Ownership Certificate of the property will be obtained by the Enlarged Group in due course.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property and Units 10C and 23D of the property is held by Shum Yip Shumkang (Group) Co., Ltd. for a term of 70 years commencing on 8 August 1991 and expiring on 7 August 2061 for the purpose of commercial and residential uses; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Various residential units, The subject development comprises Huagang Xincun, an 8-storey residential building No.1137 erected on a site with an area of Jin Dao Tian Road, 10,320 square metres. The subject Caopu, development was completed in 1995. Luohu District, Shenzhen, The property comprises 30 residential the PRC. units within the subject development.

As advised by the RMB 8,140,000 .– Company, portion of the property are leased (80% interest to various individual attributable to the tenants. Company RMB 6, 512,000 .–)

The gross floor area of the residential units is 2,198.73 square metres.

The property is held for a term of 70 years commencing on 23 July 1993 and expiring on 22 July 2063.

Notes:

As stipulated in various sets of Building and Land Ownership Certificate issued by the People’s Government of Shenzhen, the property is held by 深圳深港實業（集團）有限公司 (now known as Shum Yip Shumkang (Group) Company Limited（深業深港（集團）有限公司）, a 80%-owned subsidiary of the Company,for a term of 70 years commencing on 23 July 1993 and expiring on 22 July 2063.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by various sets of Building and Land Ownership Certificate, the property is held by 深圳深港實業（集團）有限公司 for a term of 70 years commencing on 23 July 1993 and expiring on 22 July 2063 for the residential purpose; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Levels 1 and 2 of Block No. 2, Factory Building Block No.9 and Transformer Room, Shen Gang Xin Cun, Luo Fang Sub-district Luohu District, Shenzhen, the PRC.
The property comprises carparking spaces on level 2 within an 8-storey residential building, a 3-storey industrial building and a 2-storey transformer room which were completed in between 1991 and 1992.

The gross floor areas of the carparking spaces, industrial units and transformer room are 2,918.00 square metres, 5,527.43 square metres and 468 square metres respectively.

As advised by the RMB 11,290,000 .– Company, all the car parking space, portion (80% interest of industial units attributable to the and residential units Company are leased to various RMB 9,032,000 .–) individual tenants.

The property is held for the terms of 30 years and 50 years commencing on and 8 August 1989 and 18 November 1991 respectively.

Notes:

As stipulated in the Building and Land Ownership Certificates dated 7 October 1993, the legal title of Level 2 of Block No.6 is vested in 深圳市深港運輸實業發展公司 (now known as 深圳深港榮利直通巴士有限公司), a 80%-owned subsidiary of the Company.
As stipulated in two sets of Building and Land Ownership Certificate dated 12 November 1990, Factory Building Block No.9 (formely known as “Composite Building”) is held by 深港汽車運輸公司 (now known as 深圳深港榮利直通巴士有限公司), a 80%-owned subsidiary of the Company.
In our valuation, we have assumed that the remaining Building and Land Ownership Certificates of the property will be obtained by the Group in due course.
Block No.2 of the property is not allowed to be transferred but is restricted for the use of the grantee only. Our valuation only reflects the depreciated replacement costs of the property and ascribed no commercial value to the land portion.
Our valuation of the transformer room only reflects the depreciated replacement costs and ascribed no commercial value to the land portion.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, portion of the property with the gross floor area of 6,170.21 square metres is held by 深圳深港榮利直通巴士有限公司 for a term commencing on 8 August 1989 and expiring on 7 August 2019;
ii. The land use rights in the property is held 深圳深港榮利直通巴士有限公司 for a term commencing on 8 August 1989 and expiring on 7 August 2019 for office use; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

Various residential units The property comprises various and Levels 1 to 3, residential units and shop premises Shenrong Building, on levels 1 to 3 within a 4-storey Huanggang, commercial podium under the highFutian District, rise residential building. The property Shenzhen, was completed in 2000. the PRC.

As advised by the RMB 82,570,000 .– Company, the property is leased to various (40% interest tenants. attributable to the Company RMB 33,028,000 .–)

The gross floor areas of residential units and shop premises are approximately 356.98 square metres and 6,526.80 square metres respectively.

The property is held for a term of 70 years commencing on 7 March 1994 and expiring on 6 March 2064.

Notes:

As stipulated in three sets Building and Land Ownership Certificate all dated 12 March 2002, the property is held by 深圳深港榮利直通巴士有限公司，a 40%-owned subsidiary of the Company, for a term of 70 years commencing on 7 March 1994 and expiring on 6 March 2064.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i The property is held by 深圳深港榮利直通巴士有限公司 for a term commencing on 7 March 1994 and expiring on 6 March 2064; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 167. Units 1301 and 1302 The property comprises two The property is subject RMB 3,000,000 .– 13th Floor residential units on 13 floor of to a tenancy. Jinze Building a 26-storey residential building (80% interest No.201 Huangpu completed in 1997. attributable to the Avenue West, Company Tianhe District, The total gross floor area of the RMB 2,400,000 .–) Guangzhou City, property is of 240.91 square metres. Guangdong Province, the PRC. The property is held for a term of 70 years commencing on 26 February 1993.

Notes:

As stipulated in two sets Building and Land Ownership Certificate, the property is held by 廣州深港富豪直通巴士有限公司, a 80%-owned subsidiary of the Company, for a term of 70 years commencing on 26 February 1993.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by 廣州深港富豪直通巴士有限公司 for a term of 70 years commencing on 26 February 1993 for the purpose of residential use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 168. Unit 11C The property comprises an office unit The property is subject RMB 2,000,000 .– 11th Floor on 11th floor of a 26-storey office to a tenancy. Fuxing Commercial and building completed in 1996. (80% interest Trading Building attributable to the No.159 Huangpu The total gross floor area of the Company Avenue, property is of 150.55 square metres. RMB 1,600,000 .–) Tianhe District, Guangzhou City, The property is held for a term of 50 Guangdong Province, years commencing on 15 February the PRC. 1994.

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 廣東深港富豪直通巴士有限公司, a 80%-owned subsidiary of the Company, for a term of 50 years commencing on 15 February 1994.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by 廣東深港富豪直通巴士有限公司 for a term of 50 years commencing on 15 February 1994 for the purpose of office use;
ii. The Building and Land Ownership Certificate will be obtained in the name of 廣州深港富豪客運投資有限公司 which is a 80%-owned subsidiary of the Company. The legal interests of the property is held by 廣州深港富豪客運投資有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Building and Land of Shenyang Wuai Shengang Vehicle and Logistic Terminus Nos.145-2 and 149 Bei Han Lin Road Shenhe District Shenyang City Liaoning Province the PRC.
The subject development which is occupying a parcel of land with an area of 12,805.50 square metres on which a 6-storey warehouse building, a 5-storey passenger terminus building, a 10-storey office building and various ancillary buildings erected in between 1994 and 1996.
The property comprises various office/warehouse buildings within the development with a total gross floor area of the property is approximately 27,853 square metres.

RMB 169,500,000 .–

As advised by the RMB 169,500,000 .– Company, portion of the property are leased ( 74.55% interest to various individual attributable to the tenants. Company RMB 126,362,250 .–)

The property is held for a term expiring on 23 May 2056.

Notes:

As stipulated in the Land Use Rights Certificate dated 3 May 2006, the land use rights of the property is held by Shenyang Wuai Shumkang Company Limited（沈陽五愛深港客貨總站有限公司）, a 74.55%-owned subsidiary of the Company, for a term expiring on 23 May 2056 for transportation uses.
As stipulated in a set of Building Ownership Certificate (Ref: Chen Fang Quan Zheng Shi Chen He Zi Di No. 11930（沈房權證市沈河字第11930號）dated 23 April 2006, the subject buildings with a total gross floor area of 24,566 square metres are held by Shenyang Wuai Shumkang Company Limited for office use.
As advised, the Building Ownership Certificate for a portion of the property with the gross floor area of approximately 3,287 square metres has not obtained yet. In the absence of evidence of prove the legality of the construction of such portion of the property, we have no commercial value to that portion of the building. Upon all the Building Ownership Certificates for the property issued by the relevant the government, the capital value of the property is in the amount of RMB 22,700,000 .–.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate and Building Ownership Certificate, the property is held by Shenyang Wuai Shumkang Company Limited; and
ii. The building ownership rights of the property are subject to the mortgage in favour of the China Construction Bank – Shenyang Branch;
iii. As confirmed by the Company, the property is not subject to any seizure and other third party encumbrances.

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Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

Various units in Meibo The subject development which is Trading Centre occupying a parcel of land with an western side of area of 28,613.80 square metres Xiaonan Street, comprises two 26-storey residential Shenhe District buildings both surmounting an Shenyang City 8 -storey commercial/bus station Liaoning Province podium. The development were the PRC completed in 2011.

RMB 946,000,000 .–

As advised by the RMB 946,000,000 .– Company, portion of the property are leased ( 74.55% interest to various individual attributable to the tenants. Company RMB 705,243,000 .–)

The property comprises various commercial units within the commercial podium of the development with a total gross floor area of the property is approximately 86,645.49 square metres.

The property is held for a land use rights term expiring on 2 November 2057.

Notes:

Pursuant to the Land Use Rights Contract entered into between Shenyang Plan & Land Resources Bureau（瀋陽市規劃和國土資源局）and Shenyang Wuai Shumkang Property Development Co. Ltd.（沈陽五愛深港房地產開發有限公司）, a 74.55%-owned subsidiary of the Company, issued on 2 November 2007, the latter acquired the land use rights of the property for commercial/residential/transportation development purpose at a consideration of RMB310,001,909.20. As confirmed by the Group, the aforesaid consideration was fully settled.
As stipulated in the Land Use Rights Certificate (Ref: Chen Yang Guo Yong (2007) Di No. 0373（沈陽國用(2007)第0373號）dated 3 December 2007, the land use rights of the property is held by Shenyang Wuai Shumkang Property Development Co. Ltd. for a term expiring on 2 November 2057 for commercial, residential and transportation uses.
As revealed by the Construction Land Use Planning Permit（建設用地規劃許可證）(Ref: Shen Gui Tu Zheng Zi 2007 Nian No. 0079（沈規土證字2007年0079號）) issued by the Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）on 26 April 2007, the construction site of the property with an area of 28,613.8 square metres is in compliance with the town planning controls.

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As revealed by the Planning Permit for Construction Works（建設工程規劃許可證）(Ref: Chen Gui Jian Zheng Zi 2008 Nian No. 0018（沈規建証字2008年0018號）issued by Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）dated 4 March 2008, the construction works of with planned gross floor area of 157,204.36 square metres are in compliance with the construction work requirements and have been approved.
As revealed by the Construction Works Commencement Permits（建築工程施工許可證）(Ref: 210102201007050101) issued by the Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）on 10 March 2008, the construction of the subject buildings with a total gross floor area of 157,204.36 square metres has been allowed.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Building Ownership Certificate	:	No
Construction Land Use Planning Permit	:	Yes
Planning Permit for Construction Works	:	Yes
Construction Works Commencement Permits	:	Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by Shenyang Wuai Shumkang Property Development Co. Ltd.（沈陽五愛深港房地產開發有限公司）for a land use rights term expiring on 2 November 2057 for commercial, residential and transportation purposes;
ii. The land use rights of the property are subject to the mortgage in favour of the Bank of China – Shenzhen Branch and Shenyang Branch;
iii. As confirmed by the Company, the property is not subject to any seizure and other third party encumbrances;
iv. Shenyang Wuai Shumkang Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Taifu Logistics Group Holdings Co., Ltd.

Property Description and tenure 171. Warehouse Block Nos. The property comprises five blocks 10, 12, 830, 831, 832, of single-storey warehouse building, 837, 839, 841 and 843, a 5-storey warehouse building and Shenzhen Sungang three blocks of 6-storey warehouse Warehouse Zone, building. The buildings were Baoan Bei Road, completed in between 1990 and 2002. Luohu District, Shenzhen, The total gross floor area of the the PRC. property is approximately 102,658 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 As advised by the RMB 648,000,000 .– Company, the property is partially leased to (95.4% interest various individual attributable to the tenants. Company RMB 618,192,000 .–)

Notes:

As stipulated in four sets of Building and Land Ownership Certificate dated 3 February 2008, Warehouse Block No.10 of the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）, a 95.4%-owned subsidiary of the Company, for terms of 50 years expiring on 17 March 2044.
As stipulated in six sets of Building and Land Ownership Certificate dated 3 February 2008 and 28 January 2008 respectively, Warehouse Block No.830 of the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）for terms of 50 years expiring on 5 August 2047.
As stipulated in six sets of Building and Land Ownership Certificate dated 28 January 2008, Warehouse Block No.831 of the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）for terms of 50 years expiring on 15 August 2047.
As stipulated in six sets of Building and Land Ownership Certificate dated 28 January 2008 and 3 February 2008 respectively, Warehouse Block No.832 of the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）for terms of 50 years expiring on 15 August 2047.
As stipulated in the Building and Land Ownership Certificate, the land use rights in the remaining portion of the property with an area of 53,675.97 square metres is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）for the term commencing on 18 November 1996 and expiring on 17 November 2046.

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We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by four sets Building and Land Ownership Certificate, Warehouse Block No.10 of the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd. for the term expiring on 17 March 2044;
ii. As revealed by six sets Building and Land Ownership Certificate, Warehouse Block No.830 of the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd. for the term expiring on 5 August 2047;
iii. As revealed by twelve sets Building and Land Ownership Certificate, Warehouse Block Nos.831 and 832 of the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd. for the term expiring on 15 August 2047;
iv. As revealed by the Building and Land Ownership Certificate, the land use rights in the remaining portion of the property with an area of 53,675.97 square metres is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd. for the term commencing on 18 November 1996 and expiring on 17 November 2046;
v. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property Description and tenure
1. Development Site of The property comprises four Qingshuihe International parcels of land with a total area of Vehicle Logistics Park, approximately 43,067.21 square Qingshuihe metres on which a vehicle exhibition Warehouse Zone, and storage centre namely Qingshuihe Honggang Road, International Vehicle Logistics Park Luohu District, will be developed. As advised, the Shenzhen, development will be fully completed the PRC. in 2016.

Market value in Particulars of existing state as at occupancy 31 December 2012

As advised by the RMB 197,000,000 .– Company, portion of the property are leased (95.4% interest to various individual attributable to the tenants. Company RMB 187,938,000 .–)
Upon completion, the total gross floor area (“G.F.A.”) of the aforesaid development will be approximately 163,200.00 square metres.

Notes:

Pursuant to the Land Rights Contract entered into between 深圳市規劃和國土資源委員會第一直屬管理局 and Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）, a 95.4%-owned subsidiary of the Company, dated 30 August 2011, the latter acquired portion land use rights in the property with an area of 7,544.92 square metres from the former at a consideration of RMB11,980,975.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
Pursuant to the Land Rights Contract entered into between 深圳市規劃和國土資源委員會第一直屬管理局 and Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）dated 21 November 2011, the latter acquired portion land use rights in the property with an area of 20,242.50 square metres from the former at a consideration of RMB26,728,825.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As stipulated in the Building and Land Ownership Certificate dated 29 December 2011, the land use rights in the portion of the property with an area of 7,544.92 square metres is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）, a 95.4%-owned subsidiary of the Company, for a term of 50 years commencing on 29 July 2011 and expiring on 28 July 2061 for storage use.
As stipulated in the Building and Land Ownership Certificate dated 13 August 2012, the land use rights in another portion of the property with an area of 20,242.50 square metres is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）for a term of 50 years commencing on 11 November 2011 and expiring on 10 November 2061 for storage use.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Pursuant to the Land Use Rights Contract entered into between 深圳市規劃和國土資源委員會第一直屬管理局 and Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）dated 28 June 2012, the latter acquired portion land use rights in the property with an area of 6,553.29 square metres from the former at a consideration of RMB17,082,472.- for a term of 50 years commencing on 20 June 2012 and expiring on 19 June 2062 for storage use. As confirmed by the Company, the Company, as at the valuation date, the aforesaid land purchase consideration has not been settled yet.
Pursuant to another set of Land Use Rights Contract entered into between 深圳市規劃和國土資源委員會第一直屬管理局 and Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）dated 28 June 2012, the latter acquired portion land use rights in the property with an area of 8,726.51 square metres from the former at a consideration of RMB8,627,247.-for a term of 50 years commencing on 20 June 2012 and expiring on 19 June 2062 for storage use. As confirmed by the Company, the Company, as at the valuation date, the aforesaid land purchase consideration has not been settled yet.
As confirmed by the Company, the total construction costs of approximately RMB125,993,000.- have been expended on the property as at the valuation date.
8 . Since land grant procedures for the portion of the subject land have not yet completed as at the valuation date, we have ascribed no commercial value to such portion of the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 230,000,000.- .
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights in the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd. for a term commencing on 29 July 2011 and expiring on 28 July 2061 for storage use;
ii. Shum Yip Taifu Logistics Group Holdings Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 173. Units 101 to 525 of The property comprises composite Composite Building premises on levels 1 to 5 of a 7-storey Block C, composite building completed in Baoan Bei Road and 1991. Taoyuan Road, Shenzhen Sungang The total gross floor area of the Warehouse Zone, property is approximately 4,812.73 Baoan Bei Road, square metres. Luohu District, Shenzhen, The property is held for a term of 50 the PRC. years commencing on 28 June 1992 and expiring on 27 June 2042.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is subject RMB 35,000,000 .– to various tenancies. (95.4% interest attributable to the Company RMB 33,390,000 .–)

Notes:

As stipulated in the Building and Land Ownership Certificate dated 3 February 2008, the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）, a 95.4%-owned subsidiary of the Company, for terms of 50 years commencing on 28 June 1992 and expiring on 27 June 2042.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd. for a terms 50 year commencing on 28 June 1992 and expiring on 27 June 2042; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
1. Dormitory Building The property comprises a 7-storey Block B, residential building completed in Baoan Bei Road, 1988. Shenzhen Sungang Warehouse Zone, The total gross floor area of the Baoan Bei Road, property is approximately 4,835.28 Luohu District square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 15 January 1985 and expiring on 14 January 2035.

Notes:

As stipulated in various sets of Building and Land Ownership Certificate, the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd.（深業泰富物流集團股份有限公司）, a 95.4%-owned subsidiary of the Company, for terms of 50 years commencing on 15 Janury 1985 and expiring on 14 January 2035.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Taifu Logistics Group Holdings Co., Ltd. for a terms 50 year commencing on commencing on 15 Janury 1985 and expiring on 14 January 2035; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various Commercial The property comprises various Units of Block commercial premises and various No. 2, 4 and 5 and car parking spaces of three 4-storey Various Car Parking commercial buildings completed in Spaces within 2008. Northern Zone Jinxiu Workshop The gross floor areas of commercial

（錦繡工場） premises and car parking spaces No.36 Caotang are of 17,728.24 square metres and Dong Road 12,356.65 square metres respectively. Qingyang District Chengdu City The property is held for the land use Sichuan Province rights term expiring on 17 June 2049 the PRC foe commercial use and 17 June 2059 for museum use.

The property is subject RMB 285,700,000 .– to various tenancies. (73% interest attributable to the Company RMB 208,561,000 .–)

Notes:

As revealed by the Land Use Rights Certificate dated 9 June 2009, the land use rights of the property is held by 成都市興城建實業發展有限責任公司, a 73%-owned subsidiary of the Company, for the term expiring on 17 June 2049 foe commerncial use and 17 June 2059 for museum use.
As stipulated in four sets of Building Ownership Certificate, the property is held by 成都市興城建實業發展有限責任公司.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Certificate : Yes Building Ownership Certificate : Yes Certificate for Construction Works Completion : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 成都市興城建實業發展有限責任公司 for the term expiring on 17 June 2049 for commerncial use and 17 June 2059 for museum use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Terra (Holdings) Co., Ltd.

	Property	Description and tenure
176.	Units 401 to 409,	The property comprises 12 industrial
	411, 413 and 415 of	units of an industrial building
	Block No.102,	(Block 102), a portion of level 6 of
	West Wing on Level 6 of	a 6-storey industrial building (Block
	Factory Block	No.202), a 3-storey management
	No.202, Factory Block	services building (Block No. 207),
	Nos. 207, 208, 210, 212	a 4-storey hotel building (Block
	Levels 3 to 8 of	No.208), industrial premises on
	Factory Block 211,	levels 3 to 8 of a block of 8-storey
	Dormitory Block	industrial building (Block No. 211), a
	Nos. 103,105 and 106	block of 8-storey industrial building
	the commercial podium	(Block No. 212), three blocks of
	and two units on	7-storey dormitory building (Block
	Level 3 of Taian Xuan	Nos. 103, 105 and 106), various
	（泰安軒）and Taikang	industrial units on the level 8 of an
	Xuan（泰康軒）,	8-storey industrial building (Block
	commercial podium of	No. 210), retail premises in a 2-storey
	Haisong Building（海	commercial podium underneath two
	松大廈）, commercial	high-rise residential buildings (Taian
	podium of Cangsong	Xuan, Taikang Xuan), commercial
	Building（蒼松大廈）,	premise underneath of three high-
	commercial podium and	rise industrial buildings (Cangsong
	17 industrial units of	Building, Jinsong Building and
	Jinsong Building（勁	Yunsong Building), a 3-storey
	松大廈）and Yunsong	commercial podium underneath
	Building, Units A, B, C,	two 23-storey industrial buildings
	D and E on 3rd Floor of	(Haisong Building), five industrial
	Yunsong Building（雲	units on 3 floor of Yunsong Building,
	松大廈）, Shop Nos.	an unit of management tower, a
	1A, 1C, 1D, 1E and 1F	6-storey car park/composite building
	and Units 14A, 14B,	(Tai Xing Yuan Composite Building),
	14C, 14D, 15A, 15B,	Levels 1, 2 and 9 of Hongsong
	15C, 15D, 16B and 16C	Building（紅松大廈）, Levels 1, 2 and
	of Shuisong Building,	various industrial units of a 17-storey
	Levels 1, 2 and 9 of	industrial building, five retail units
	Hongsong Building（紅	on level 1 and 10 industrial units on
	松大廈）,	14th floor to 16th floor of a high-
	Levels 1 and 2 and	rise industrial building (Shuisong
	various industrial units	Building). Levels 1 and 2 of Snow
	of Snow Pine Building	Pine Building（雪松大廈）, Those
	（雪松大廈）and Tai	buildings were completed in between
	Xing Yuan Composite	1994 and 2010.
	Building, Che Gong
	Miao Industrial Zone,	The total gross floor area of the
	Futian District,	property is 132,707.76 square metres
	Shenzhen,	including hotel area of 8,500 square
	the PRC.	metres and retail area of 68,113.70
		square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is leased RMB 2,025,510,000 .– to various individual tenants. (75% interest attributable to the Company RMB 1,519,132,500 .–)

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Notes:

Pursuant to a Land Use Right Contract dated 29 December 1988 between the People’s Government of Shenzhen (the grantor) and 深圳泰然實業有限公司 (Shenzhen Terra Industrial Co., Ltd.) (a 75%-owned subsidiary of the Company, formerly known as 深圳市工業區開發公司 (Shenzhen Industrial Zone Development Company)) (the grantee), the grantor agreed to grant the land use rights in Lot No.B107-1 (upon part of which the property is erected) to the grantee for a term of 50 years commencing on 16 November 1988 and expiring on 15 November 2038.
As stipulated in six sets of Building and Land Ownership Certificate all dated 17 October 2005, levels 3 to of Factory Block No.211 are held by 深圳泰然（集團）股份有限公司, a 75%-owned subsidiary of the Company, for a term of 50 years commencing on 16 November 1988 and expiring on 15 November 2038.
As stipulated in eight sets of Building and Land Ownership Certificate all dated 14 October 2005, Factory Block No.212 is held by 深圳泰然（集團）股份有限公司 for a term of 50 years commencing on 16 November 1988 and expiring on 15 November 2038.
As stipulated in the Building and Land Ownership Certificate dated 18 September 2001, the land use rights in the Tai Xing Yuan Composite Building with an area of 5,063.70 square metres are held by Shenzhen Terra Industrial Co., Ltd. for a term of 50 yeas commencing on 16 November 1988 and expiring on 15 November 2038.
As stipulated in seven sets of Building and Land Ownership Certificate all dated 18 January 2008, the 3-storey commercial podium of Haisong Building with a total gross floor area of 24,942.06 square metres are held by 深圳泰然（集團）股份有限公司 for a term of 50 yeas commencing on 8 November 2004 and expiring on 7 November 2054.
As stipulated in three sets of Building and Land Ownership Certificate all dated 2 November 2007, Units 1A, 2A Mezzaine Floor of Haisong Building with a total gross floor area of 15,563.31 square metres are held by 深圳泰然（集團）股份有限公司 for a term of 50 yeas commencing on 23 May 2002 and expiring on 22 May 2052.
As stipulated in four sets of Building and Land Ownership Certificate all dated 25 October 2005, Units 3A, 3B, 3C and 3D of Haisong Building with a total gross floor area of 1,306.02 square metres are held by 深圳泰然

（集團）股份有限公司 for a term of 50 yeas commencing on 23 May 2002 and expiring on 22 May 2052.

As stipulated in five sets of Building and Land Ownership Certificate all dated 12 August 2009, Shop Nos. 1A, 1C, 1D, 1E and 1F of Shuisong Building with a total gross floor area of 814.51 square metres are held by 深圳泰然（集團）股份有限公司 for a term of 50 yeas commencing on 16 November 2005 and expiring on 15 November 2055.
As stipulated in ten sets of Building and Land Ownership Certificate all dated 12 August 2009, Units 14A, 14B, 14C, 14D, 15A, 15B, 15C, 15D, 16B and 16C of Shuisong Building with a total gross floor area of 3,359.49 square metres are held by 深圳泰然（集團）股份有限公司 for a term of 50 yeas commencing on 16 November 2005 and expiring on 15 November 2055.
As stipulated in eighteen sets of Building and Land Ownership Certificate all dated 27 September 2010, levels 1, 2 and 9 of Hongsong Building with a total gross floor area of 5,967.85 square metres are held by 深圳泰然

（集團）股份有限公司 for a term of 50 yeas commencing on 20 August 2007 and expiring on 19 August 2057.

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As revealed by the Buiding and Land Ownership Certificate dated 9 July 2008, the land use rights in the Snow Pine Building is held by Shum Yip Terra (Holdings) Co., Ltd. for a term of 50 years commencing on 1 April 2008 and expiring on 31 March 2058.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by various sets Building and Land Ownership Certificate, Factory Block Nos.211, 212 and Tai Xing Yuan Composite Building of the property are held by Shum Yip Terra (Holdings) Co., Ltd. for the term commencing on 16 November 1988 and expiring on 15 November 2038;
ii. As revealed by various sets Building and Land Ownership Certificate, Haisong Building of the property is held by Shum Yip Terra (Holdings) Co., Ltd. for the term commencing on 8 November 2004 and expiring on 7 November 2054;
iii. As revealed by various sets Building and Land Ownership Certificate, Hongsong Building of the property is held by Shum Yip Terra (Holdings) Co., Ltd. for the term commencing on 20 August 2007 and expiring on 19 August 2057;
iv. As revealed by various sets Building and Land Ownership Certificate, Shuisong Building of the property is held by Shum Yip Terra (Holdings) Co., Ltd. for the term commencing on 16 November 2005 and expiring on 15 November 2055;
v. As revealed by various sets Building and Land Ownership Certificate, Haisong Building of the property is held by Shum Yip Terra (Holdings) Co., Ltd. for the term commencing on 23 May 2002 and expiring on 22 May 2052;
vi. As revealed by the Building and Land Ownership Certificate, the land use rights in Snow Pine Building with an area of 8,425.82 square metres is held by Shum Yip Terra (Holdings) Co., Ltd. for a term of 50 years commencing on 1 April 2008 and expiring on 31 March 2058;
vii. Shum Yip Terra (Holdings) Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development; and
viii. The property is subject to 82 mortgages in favour of the Industrial and Commercial Bank of China Ltd., Bank of Ningbo Ltd.（寧波銀行）and the Shenzhen Village Commercial Bank（深圳農村商業銀行） respectively; and
ix. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

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Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Basement and The subject building is a 6-storey Levels 2 to 6 (plus a basement) industrial building Factory Block 1 completed in 1994. Shenhua Science and Technology The property comprises various Industrial Park industrial premises on basement Meihua Road 1, levels 2 to 6 within the subject Meilin building. The total gross floor area Futian District of the property is 15,341.58 square Shenzhen, metres. the PRC.

The property is subject RMB 98,000,000 .–

to various tenancies. (75% interest attributable to the Company RMB 73,500,000 .–)

The property is held for a term of 50 years commencing on 28 December 1990 and expiring on 27 December 2040.

Notes:

As stipulated in six sets of Building and Land Ownership Certificate all dated 24 March 2006, the property is held by Shum Yip Terra (Holdings) Co., Ltd., a 75%-owned subsidiary of the Company, for a term of 50 years commencing on 28 December 1990 and expiring on 27 December 2040.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by six sets Building and Land Ownership Certificate, the property is held by Shum Yip Terra (Holdings) Co., Ltd. for a term of 50 years commencing on 28 December 1990 and expiring on 27 December 2040;
ii. The property is subject to 5 mortgages in favour of the Industrial and Commercial Bank of China Ltd. ; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

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Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 178. Unit 704 The property comprises a residential The property is subject No Commercial Value Block 2 unit of a residential building. to a tenancy. No.10 Fuxing Nan Road, (75% interest Futian District, The gross floor area of the property is attributable to the Shenzhen, of 64.66 square metres. Company the PRC. No Commercial Value )

Notes:

We have assumed that Shum Yip Terra (Holdings) Co., Ltd., a 75%-owned subsidiary of the Company, has secured transferable land use rights for residential purposes in the property and will have no legal impediment in obtaining Buildings and Land Ownership Certificate for the property.
We have also assumed that the Property is held for a term of not less than 70 years being the maximum term of land for residential purpose as stated in the land law of China.
Since the title certificate for the property has not yet obtained by Shum Yip Terra (Holdings) Co., Ltd., we have ascribed no commercial value to the property. Upon obtained the title certificate, the market value of the property is at the amount of RMB 420,000 .

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Property Description and tenure 179. 6th Floor The property comprises office Shenzhen International premises on 6th floor of a 6-storey Trust and Investment office building completed in 1990. General Corp. Building, Zhenxing Road and The gross floor area of the property is Shangbu Zhong Road, 1,316.54 square metres. Futian District, Shenzhen, The property is held for a term of 30 the PRC. years commencing on 8 August 1983 and expiring on 7 August 2013.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is subject No Commercial Value to various tenancies. (75% interest attributable to the Company No Commercial Value)

Notes:

As stipulated in two sets of Building and Land Ownership Certificate both dated 14 January 1997, the property is held by 深圳國際信託投資公司 , for a term of 30 years commencing on 8 August 1983 and expiring on 7 August 2013.
In our valuation, we have assumed that 深圳國際信託投資公司 shall secured legal title to the property for a land use right term of not less than 50 years, being the maximum term for industrial land uses as stipulated in the Article of the Provision Regulation of the PRC and Granting and Transferring the Land Use Rights of Stateowned Land in Cities and Towns.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets Building and Land Ownership Certificate, the property is held by 深圳國際信託投資公司 for a term of 30 years commencing on 8 August 1983 and expiring on 7 August 2013;
ii. As confimed by Shum Yip Terra (Holdings) Co., Ltd., a 75%-owned subsidiary of the Company, the legal interest in the property has been acquired by Shum Yip Terra (Holdings) Co., Ltd.;
iii. Up to the Latest Practicable Date, the legal procedures for the title interest of the property vesting to Shum Yip Terra (Holdings) Co., Ltd. has not been completed ; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
Since legal procedures for the title interst of the property vesting to Shum Yip Terrs (Holdings) Co., Ltd. not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid legal procedures, the market value of the property is at the amount of RMB 7,900,000 .

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INTERESTS OF THE GROUP

Property Description and tenure
1. Unit 5E of Yajing Court, The property comprises a residential Tianan Golf Garden, unit of an 18-storey residential Various industrial units building, industrial premises within in Block Nos. F3.8, three 8-storey industrial buildings F4.8 and F5.8, and an 18-storey industrial building Various dormitory (Tianan Keji Service Centre), units in Block Nos. dormitory premises within four H1.8, H4.8, 8-storey dormitory buildings, H5.8 and H7.8, various commercial premises within a units of Chuangxin Keji 2-storey commercial podium Building, underneath a high-rise industrial the commercial podium building (Cyber Building) and of Cyber Building and industrial premises of a high-rise Various industrial units industrial building (Chuangxin Keji in Tianan Keji Building). The aforesaid buildings Service Centre, were completed in between 1992 and Tianan Cyber City, 2005. Futian District, Shenzhen, The gross floor areas of the the PRC. residential unit, industrial premises and commercial premises are 123.36 square metres, 18,390.09 square metres and 33,073.93 respectively.

Market value in existing state as at 31 December 2012

Particulars of occupancy

RMB 818,750,000 .–

As advised by the RMB 818,750,000 .– Company, the property is leased to various (37.5% interest tenants. attributable to the Company
RMB 307,031,250 .–)

Notes:

As stipulated in various Building and Land Ownership Certificates dated 27 January 2005 and 1 May 2006 the property are held by Shenzhen Tianan Cyber City Co., Ltd.（深圳天安數碼城有限公司）, which is owned as to 37.5% by the Company, for a term of expiring between on 15 November 2038, 28 April 2051, 15 November 2051 and 9 September 2052, 23 January 2053 respectively.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As stipulated in various Building and Land Ownership Certificate, portion of the property in Tianan Keji Service Centre is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 23 January 2053 for industrial purpose;
ii. As stipulated in various Building and Land Ownership Certificate, portion of the property in Chuangxin Keji Building is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 15 November 2038 for industrial purpose;

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iii. As stipulated in various Building and Land Ownership Certificate, portion of the property in Cyber Building is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 28 April 2051 for commercial and office purposes;
iv. As stipulated in various Building and Land Ownership Certificate, portion of the property in Block F5.8 is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 15 November 2038 for industrial purposes;
v. As stipulated in various Building and Land Ownership Certificate, portion of the property in Block F4.8 is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 15 November 2038 for industrial purposes;
vi. As stipulated in various Building and Land Ownership Certificate, portion of the property in Block H4.8 is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 15 November 2038 for residential purposes;
vii. As stipulated in various Building and Land Ownership Certificate, portion of the property in Block H7.8 is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 15 November 2038 for residential purposes;
viii. As stipulated in various Building and Land Ownership Certificate, portion of the property in Block H5.8 is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 15 November 2038 for residential purposes;
ix. As stipulated in various Building and Land Ownership Certificate, portion of the property in Yajing Court is held by Shenzhen Tianan Cyber City Co., Ltd. for a term expiring on 15 November 2038 for residential purposes; and
x. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Various industrial units The property comprises industrial and 225 car parking premises and 680 car parking spaces spaces of Tianyou within a 17-storey industrial building Chuangfu Building and two blocks 19-storey industrial

（天佑創富大廈）, building completed in between 2008 Various industrial units and 2011. and 248 car parking spaces of Tianan The total gross floor area of the Chuangxin Building industrial premises is of 12,966.37

（天安創新大廈）, square metres. Various industrial units and 207 car parking The property is held for a land use spaces of Tianan Fazhan rights term expiring on 28 November Building 2056.

（天安發展大廈）, Tianan Nanhai Cyber City, Nanhai District, Foshan City, Guangdong Province, the PRC.

As advised by the RMB 101,550,000 .– Company, the property is leased to various (33.8% interest tenants. attributable to the Company RMB 34,323,900 .–)

Notes:

As stipulated in various sets of Building and Land Ownership Certificate all dated 16 April 2009, the property is held by Foshan Tianan Cyber Park Co., Ltd.（佛山市天安數碼城有限公司）, which is owned as to 33.8% by the Company, for a land use rights term expiring on 28 November 2056.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held byFoshan Tianan Cyber Park Co., Ltd. for a term expiring 28 November 2056; and
ii. The property is subject to a mortgage in favour of The Village Trust Committee of Nanhai District, Foshan City – Guicheng Branch for a term expiring on 27 Apirl 2019 ; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

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Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

Various industrial units of Tianan Chuangxin Building
（天安創新大廈）, Unit 103 of Tianan Chuangye Centre

（天安創業中心）, various indusrial units of of Tianan Development Building （天安發展大廈）, Various industrial units of Tianan Jiaoliu Centre

The property comprises 878 car parking spaces, various industrial premises within five 6 to 12-storey industrial buildings and various apartment units of a 19-storey apartment building. The aforesaid buildings were completed in 2010.

The gross floor areas of the industrial premises and apartment premises are of 18,839.92 square metres and 625.16 square metres respectively.

As advised by the RMB 148,830,000 .– Company, the property is leased to various (37.5% interest tenants. attributable to the Company RMB 55,811,250 .–)

（天安交流中心）, Various industrial units of Tianan Chanye Building

（天安產業大廈）, various apartment unts of Tianan Jinghua Apartment （天安菁華公寓）and

875 car parking spaces, Tianan Panyu Cyber City, Panyu District, Guangzhou City, Guangdong Province, the PRC.

Notes:

As revealed by various sets of Building and Land Ownership Certificate dated 9 September 2009, Tianan Jinghua Apartment is held by Guangzhou Panyu Hi-tech Ecological Park Development Co., Ltd.（廣州市番禺節能科技園發展有限公司）, which is owned as to 37.5% by the Company, for a term o of expiring on 24 September 2052 for dormitory purpose.
As stipulated in the Land Use Rights Certificate dated 28 August 2003, the land use rights of the property is held by Guangzhou Panyu Hi-tech Ecological Park Development Co., Ltd. for a term o of expiring on 11 June 2052 for industrial pupose.

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We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by various sets of Building and Land Ownership Certificate, Tianan Jinghua Apartment of the property is held by 廣州市番禺節能科技園發展有限公司 for a term 4 September 2052 for dormitory use;
ii. As revealed by various sets of Building and Land Ownership Certificate, Tianan Chanye Building of the property is held by 廣州市番禺節能科技園發展有限公司 for a term 4 September 2052 for industrial use;
iii. As revealed by various sets of Building and Land Ownership Certificate, Tianan Chuangye Centre, Tianan Chuangxin Building, Tianan Jiaoliu Centre and Tianan Development Building of the property are held by 廣州市番禺節能科技園發展有限公司 for a term 11 November 2052 for industrial use; and
iv. The property (except Tianan Jinghua Apartment) was subject to a mortgage in faovur of Village Trust Community of Guangzhou City – Panyu Branch（廣州市農村信用合作社番禺信用社） ; and
v. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

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Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

Restaurant Nos.1, 2, The property comprises five 3, 4, 5 and various restaurant premises and various industrial units of industrial units within three 16-storey Factory Nos.1, 2 and 3, industrial building which completed Chuangxin Yuan in either 2010 or 2011.

（創新園）, Tianan Longgang The gross floor areas of the industrial Cyber City, premises and restaurant premises Longgang District, are of 28,957.84 square metres and Shenzhen, 2,668.76 square metres respectively. the PRC.

As advised by the RMB 277,000,000 .– Company, the property is leased to various (37.5% interest tenants. attributable to the Company RMB 103,875,000 .–)

The property is held for a term of 50 years commencing on 27 April 2005 and expiring on 26 April 2055 industrial use.

Notes:

As revealed by the Building and Land Ownership Certificate dated 30 April 2008, the land use rights of the property with an area of 48,304.76 square metres is held by Shenzhen Longgang Tianan Cyber Park Co., Ltd.

（深圳市龍崗天安數碼新城有限公司）, which is owned as to 37.5% by the Company, for a term of 50 years commencing on 27 April 2005 and expiring on 26 April 2055 industrial use.

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shenzhen Longgang Tianan Cyber Park Co., Ltd. for industrial use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Various Industrial Units The property comprises various of Block Nos.A1 and A2 industrial units on 1st floor of Tianan Dongguan Cyber 14-storey industrial building erected Park, in 2012. Nancheng District, Dongguan City, The gross floor area of the property is Guangdong Province, of 2,833.46 square metres. the PRC. The property is held for a term of expiring on 14 October 2060.

As advised by the RMB 17,000,000 .– Company, the property is leased to various ( 29.3 % interest tenants. attributable to the Company RMB 4,981,000 .–)

Notes:

Pursuant to the Land Use Rights Contract dated 14 July 2010 entered into between Dongguan City Land Resource Bureau（東莞市國土資源局）(“the Bureau”) and 東莞市天安數碼城有限公司, which is owned as to 29.3% by the Company, the latter acquired the land use rights in the property with an area of 47,317.00 square metres from the Bureau at a consideration of RMB24,420,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 26 January 2011, the land use rights in the property with an area of 47,316.60 square metres are held by 東莞市天安數碼城有限公司 for a term expiring on 14 October 2060 for industrial use.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Pre-sale Permit : Yes Completion Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights in the property is held by 東莞市天安數碼城有限公司 for a term expiring on 14 October 2060 for industrial use; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Group V – Properties Held and Occupied by the Group

Shum Yip Southern Land (Holdings) Co., Ltd.

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

18 5. 26th Floor, 27th Floor, Shum Yip Centre comprises a 30th Floor and 32nd 33-storey commercial building and Floor 2 basement levels of carparking Shum Yip Centre space occupying a site with an area
（深業中心）, of approximately 7,650.00 square Shennan Zhong Road, metres. The subject development was Luohu District, completed in 1997. Shenzhen, the PRC. The property comprises entire office premises on 26th, 27th, 30th and 32nd floors within the subject development. The total gross floor area (“G.F.A.”) of the property is of 5,559.00 square metres.

The property is RMB100,000,000.– currently occupied by the Group for office (100% interest purpose. attributable to the Company RMB100,000,000.–)

The property is held for a term of 50 years commencing on 28 July 1988 and expiring on 27 July 2038.

Notes:

As revealed by two sets of Building and Land Ownership Certificate dated 5 September 2000, the property is held by Shum Yip Centre Development (Shenzhen) Co., Ltd., a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 28 July 1988 and expiring on 27 July 2038.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificates, the property (30th and 32nd floors) is held by 深業中心發展（深圳）有限公司 for a term commencing on 28 July 1988 and expiring on 27 July 2038; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Description and tenure

Property

18 6. Unit 803 8th Floor The property comprises a residential Block 38 unit of an 8-storey residential building Song Ping Shan Estate completed in 1996. （松坪山住宅樓） Futian District, The total gross floor area of the Shenzhen, property is of 77.27 square metres. the PRC. The property is held for a term of 50 years commencing on 1 July 1995 and expiring on 1 July 2045.

Market value in Particulars of existing state as at 31 occupancy December 2012 The property is RMB 1,300,000 occupied by the Enlarged Group as ( 100% interest dormitory purposes. attributable to the Company: RMB 1,300,000 )

Notes:

As stipulated the Building and Land Ownership Certificate, the property is held by Shum Yip Centre Development (Shenzhen) Co., Ltd., a wholly-owned subsidiary of the Company), for a term of a term of 50 years commencing on 1 July 1995 and expiring on 1 July 2045 for residential purpose.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate : Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by Shum Yip Centre Development (Shenzhen) Co., Ltd. for a term commencing on 1 July 1995 and expiring on 1 July 2045; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

18 7. Unit 28-702 7th Floor The property comprises a residential Block 202 unit on 7th floor of a 7-storey Tian Yuan Xin Cun dormitory building completed in
（田苑新村）, 1988. Wenjin Bei Road
（文錦北路）, The gross floor area of the property is Luohu District, 103.23 square metres. Shenzhen, the PRC. The property is held for a term of 50 years commencing on 29 September 1986 and expiring on 28 September 2036.

The property is RMB 2,000,000 occupied by the Enlarged Group as (100% interest dormitory purposes. attributable to the Company: RMB 2,000,000 )

Notes:

As stipulated the Building and Land Ownership Certificate, the property is held by 深業（集團）深圳有限公司 which is a wholly owned subsidiary company of the Company for a term of a term of 50 years commencing on 29 September 1986 and expiring on 28 September 2036 for residential purpose.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate : Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by 深業（集團）深圳有限公司 for a term of 50 years commencing on 29 September 1986 and expiring on 28 September 2036; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

18 8. Building and Land of Phase I, Shumyip Hot Spring
The subject development comprises a parcel of land with an area of 205,740.46 square metres on which a resort hotel development will be erected.
（深業半湯禦泉莊）, a resort hotel development will be No. 128 Tangshang erected. Road, Bantang Economic The property comprises a 4-storey Development Zone, hotel building, a 6-storey hotel Chaohu City, building and twenty three blocks Anhui Province, single storey guest house completed the PRC. in 2012.

RMB156,000,000.–

The property is RMB156,000,000.– currently occupied by the Group as a hotel. ( 80% interest attributable to the Company RMB 124,800,000.–)

The total gross floor area of the property is of 34,721.91 square metres.

The property is held for a term expiring on either 31 May 2046 for resort use or 31 May 2076 for leisure residential use.

Notes:

Pursuant to the Land Use Rights Contract dated 8 June 2006 entered into between Chaohu City Land Resources Bureau（巢湖市國土資源局）(“the Bureau”) and 巢湖誠毅地產投資管理有限公司, a 80%-owned subsidiary of the Company, the latter acquired the land use rights of the property with an area of 205,353.23 square metres from the Bureau at a total consideration of RMB30,800,000.–. As confirmed by the Company, as at the valuation date, the aforesaid land purchase consideration has been fully settled.
As revealed by the Land Use Rights Certificate dated 14 December 2006, the land use rights of the property with an area of 205,740.46 square metres are held by 巢湖誠毅地產投資管理有限公司 for a term expiring on either 31 May 2046 for resort use or 31 May 2076 for leisure residential use.
As stipulated in 25 sets of Building and Land Ownership Certificate dated 14 April 2011, 18 April 2011 and 17 January 2013 respectively, the property is held by 巢湖深業誠毅地產有限公司 for a term commencing on 31 May 2006 and expiring on 31 May 2046 for commercial use.

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APPENDIX IV

The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Building and Land Ownership Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property are held by 巢湖深業誠毅地產有限公司 for a term expiring on either 31 May 2046 for restaurant/hotel/commerciall uses or 31 May 2076 for leisure residential use;
ii. The property is held by 巢湖深業誠毅地產有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Property Description and tenure 18 9. Units 2 and 3 on The property comprises two 8th Floor residential units on 8th floor a Block C-2 9-storey (plus 1 basement for Jinhui Hujing Garden carparking spaces) residential （金匯湖景花園） building completed in 2008. No.3 E Hu Road Huicheng District The total gross floor area of the Huizhou City property is of 325.66 square metres. Guangdong Province the PRC. The property is held for a term expiring on 28 June 2063.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB1,800,000.– currently occupied by the Group for (100% interest dormitory purpose. attributable to the Company RMB1,800,000.–)

Notes:

As revealed by two sets of Building and Land Ownership Certificate , the property is held by 惠州深業南方地產有限公司, a wholly-owned subsidiary of the Company, for a term expiring on 28 June 2063.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by 惠州深業南方地產有限公司; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property Description and tenure 1 90. House Nos. D1-80 and The property comprises two 3-storey D1-81, garden houses completed in 2009. Type D1 Palm Island The total gross floor area of the Heyuan Agile Garden property is of 383.56 square metres. （河源雅居樂花園） Dongcheng Xi District The property is held for a term Heyuan City expiring on 19 July 2076. Guangdong Province the PRC

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB3,450,000.– currently occupied by the Group for (100% interest dormitory purpose. attributable to the Company RMB3,450,000.–)

Notes:

As revealed by two sets of Building and Land Ownership Certificate both dated 25 August 2009, the property is held by 深業南方地產（集團）有限公司, a wholly-owned subsidiary of the Company, for a term expiring on 19 July 2076.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by 深業南方地產（集團）有限公司; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

Yitai Centre comprises a 36-storey office building and two 36-storey residential buildings all surmounting a 5-level common commercial podium. The subject development was completed in 2004.
19 1. Units 808, 1404 and Yitai Centre comprises a 36-storey 1508 of Block A office building and two 36-storey Yitai Centre residential buildings all surmounting
（怡泰中心）, a 5-level common commercial Dongmen Zhong Road, podium. The subject development was Luohu District, completed in 2004. Shenzhen, the PRC. The property comprises 3 residential units within one of the aforesaid 36-storey residential buildings of the subject development.

The property is RMB5,000,000.– occupied by the Group as dormitory. (100% interest attributable to the Company RMB5,000,000.–)

The total gross floor area of the property is of 337.40 square metres.

The property is held for a term of 70 years commencing on 28 June 1993 and expiring on 27 June 2063.

Notes:

As stipulated in three sets of Building and Land Ownership Certificate all dated 3 December 2009, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd.（深業南方地產（集團）有限公司）, a wholly-owned subsidiary of the Company, for a term of 70 years commencing on 28 June 1993 and expiring on 27 June 2063.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 深業南方地產（集團）有限公司; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Property Description and tenure
1. Management and The property comprises a resident Activity Centre, clubhouse and two ancillary buildings Clubhouse of within a residential development Shumyip Coast completed between in 2005 and 2008.
（深業新岸線） Xinan Avenue The total gross floor area of the
（新安大道） property is of 3,728.75 square metres. Baoan District, Shenzhen, The property is held for a term of 70 the PRC. years commencing on 26 July 2002 and expiring on 25 July 2072.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB 28,000,000 occupied by the Enlarged Group as (100% interest ancillary activity attributable to centre and resident the Company: clubhouse purposes. RMB 28,000,000 )

Notes:

As stipulated in various sets of Building and Land Ownership Certificate, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd.（深業南方地產（集團）有限公司）, a wholly-owned subsidiary of the Company, for a term of a term of 70 years commencing on 26 July 2002 and expiring on 25 July 2072 for ancillary activity centre and resident clubhouse.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate : Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by Shum Yip Southern Land (Holdings) Co., Ltd. for a term of 70 years commencing on 26 July 2002 and expiring on 25 July 2072; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Property Description and tenure
1. Unit 12E on 12th Floor The property comprises a residential Hengfa Court（橫發閣） unit of a 32-storey residential building Shenfa Garden completed in 1994.
（深發花園） Shennan Dong Road The gross floor area of the property is Luohu District, of 86.37 square metres. Shenzhen, the PRC. The property is held for a term of 70 years commencing on 8 August 1991 and expiring on 7 August 2061.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB 1,380,000 occupied by the Enlarged Group as (100% interest dormitory purpose. attributable to the Company: RMB 1,380,000 )

Notes:

As stipulated the Building and Land Ownership Certificate, the property is held by Shum Yip Southern Land (Holdings) Co., Ltd., a wholly-owned subsidiary of the Company, for a term of a term of 70 years commencing on 8 August 1991 and expiring on 7 August 2061 for residential purpose.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate : Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by Shum Yip Southern Land (Holdings) Co., Ltd. for a term of 70 years commencing on 8 August 1991 and expiring on 7 August 2061; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Unit 6C on 6th Floor The property comprises five and Unit 24I on residential units of two 32-storey 24th Floor residential buildings completed in Bi Luo Xuan（碧蘿軒） 2001. Units 6B and 6G on 6th Floor and Unit 24A The total gross floor area of the on 24th Floor property is of 342.44 square metres. Zi Teng Xuan（紫藤軒） Cai Tian Ming Yuan The property is held for a term of （彩天名苑） 70 years commencing on 17 January Cai Tian Road 1995 and expiring on 16 January Futian District, 2065. Shenzhen, the PRC.

The property is RMB 6,850,000 occupied by the Enlarged Group as (100% interest dormitory purpose. attributable to the Company: RMB 6,850,000 )

Notes:

As stipulated various sets of Building and Land Ownership Certificate, the property is held by 深業（集團）深圳有限公司, a wholly-owned subsidiary of the Company, for a term of a term of 70 years commencing on 17 January 1995 and expiring on 16 January 2065 for residential purpose.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate : Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by 深業（集團）深圳有限公司 for a term of 70 years commencing on 17 January 1995 and expiring on 16 January 2065; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Shum Yip Pengji Holdings Co., Ltd.

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 19 5. Block 611 The property comprises an 8-storey The property is No Commercial Value Ba Gua Ling industrial building completed in 1985. occupied by the Group Industrial Area, for office purpose. (100% interest Ba Gua Ling, The total gross floor area of the attributable to the Futian District, property is 9,418.02 square metres. Company Shenzhen, No Commercial Value) the PRC. The property is held for a term of 50 years commencing on 12 October 1983 and expiring on 11 October 2033.

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by Shenzhen Pengji Industrial Development Corporation, a wholly-owned subsidiary of the Company, for a term of 50 years commencing on 12 October 1983.
The land use rights of the property were obtained through administrative allocation and it is required to pay land premium to the government in order to dispose of the property. Since land grant procedures for the property have not yet completed as at the valuation date, we have ascribed no commercial value to the property. Upon completion of the aforesaid land grant procedures, the market value of the property is at the amount of RMB 33,000,000.–
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by Shum Yip Pengji Holdings Company Limited through administrative allocation for a term expiring on 11 October 2033 for industrial purpose;
ii. After completion of the PRC’s legal procedures and obtained the approval from the relevant authorities, the land use rights of the property can be dispose by Shum Yip Pengji Holdings Company Limited; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

19 6. Factory in, The property comprises a parcel of Xuexiang Village land with an area of 8,454.50 square
（雪象村）, metres on which a 4-storey factory Buji Town, building was erected. The property Longgang District was completed in 2005. Shenzhen, the PRC. The gross floor area of the property is 2,168.10 square metres.

The property is RMB3,800,000.– occupied by the Group as a factory. (100% interest attributable to the Company RMB3,800,000.–)

The property is held for a term of 50 years commencing on 11 May 1995 and expiring on 11 May 2045.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 14 January 2004, the land use rights of the property is held by 深圳國際建築機械有限公司 which is a 100%-owned subsidiary of 深圳鵬基物業發展公司 for a term of 50 years commencing on 11 May 1995 and expiring on 11 May 2045.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the land use rights of the property is held by 深圳國際建築機械有限公司 for a term commencing on 11 May 1995 and expiring on 11 May 2045 for industrial and storage purposes;
ii. Up to the date of the Legal Opinion, 深圳國際建築機械有限公司 has not obtained the Building and Land Ownership Certificate for the aforesaid building; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
Due to the Building Ownership Certificate for the aforesaid building not obtained yet, we have no commercial value to the aforesaid building.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

19 7. Factory in The property comprises two parcels Xia Shijia Village of land with a total area of 15,288.80
（下石家村）, square metres on which a 2-storey Gongming Town, factory building and a single storey Baoan District building were erected. Shenzhen, the PRC. The total gross floor area of the property is 5,088.10 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB7,600,000.– occupied by the Group as a factory. (100% interest attributable to the Company RMB7,600,000.–)

The property is held for a term of 50 years commencing on 31 May 1998 and expiring on 30 May 2048.

Notes:

As stipulated in four sets of Building and Land Ownership Certificate, the property is held by 深圳深業五金有限公司 which is a 100%-owned subsidiary of Shum Yip Pengji Holdings Co., Ltd. for a term of 50 years commencing on 31 May 1998 and expiring on 30 May 2048.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificates, the property is held by 深圳深業五金有限公司 for a term commencing on 31 May 1998 and expiring on 30 May 2048 for industrial and office purposes; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 19 8. Unit 824 on Level 8 The property comprises a residential The property is RMB480,000.– Apartment Block No. 8, unit on the level 8 of a dormitory occupied by the Group Peng Sheng Village, building completed in 1992. as dormitory. (100% interest Ba Gua Ling, attributable to the Futian District, The gross floor area of the property is Company Shenzhen, 47.06 square metres. RMB480,000.–) the PRC. The property is held for a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041.

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳市鵬基勞動服務有限公司 which is a wholly-owned subsidiary of the Company for a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building Ownership Certificate, the property is held by 深圳市鵬基勞動服務有限公司 for a term commencing on 28 April 1991 and expiring on 27 April 2041; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 19 9. Unit 219 on The property comprises a residential The property is RMB350,000.– Level 2 Apartment unit on the level 2 of 8-storey occupied by the Group Block No. 51, dormitory buildings both completed in as dormitory. (100% interest Ba Gua Ling 1995. attributable to the Industrial Area, Company Ba Gua Ling, The gross floor area of the property is RMB350,000.–) Futian District, 35.31 square metres. Shenzhen, the PRC. The property is held for a term expiring on 29 November 2063.

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳市鵬基勞動服務有限公司 which is a wholly-owned subsidiary of the Company for a term expiring on 29 November 2063.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building Ownership Certificate, the property is held by 深圳市鵬基勞動服務有限公司 for a term expiring on 29 November 2063; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 200. Unit 604 on Level 6 of The property comprises a residential The property is RMB1,000,000.– Block 58, unit on the level 6 of a dormitory occupied by the Group Phase 5, building. as dormitory. (100% interest Peng Xing Garden attributable to the （鵬興花園）, The gross floor area of the property is Company Liantong Industrial 72.69 square metres. RMB1,000,000.–) Area, Luosha Road, The property is held for a term of 70 Luohu District, years commencing on 25 February Shenzhen, 1992 and expiring on 24 February the PRC. 2062.

Notes:

As stipulated in the Building and Land Ownership Certificate, the property is held by 深圳市鵬基勞動服務有限公司 which is a wholly-owned subsidiary of the Company for a term of 70 years commencing on 25 February 1992 and expiring on 2 4 February 2062.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building Ownership Certificate, the property is held by 深圳市鵬基勞動服務有限公司 for a term of 70 years commencing on 25 February 1992 and expiring on 2 4 February 2062; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at 31 Property Description and tenure occupancy December 2012 201. Unit 708 7th Floor The property comprises a residential The property is RMB 320,000 Block 8 unit on 8th floor of of a dormitory occupied by the Peng Sheng Village, building completed in 1992. Enlarged Group as ( 30% interest Ba Gua Ling, dormitory purpose. attributable to the Futian District, The gross floor area of the property is Company: Shenzhen, 31.48 square metres. RMB 96,000) the PRC. The property is held for a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041.

Notes:

As stipulated the Building and Land Ownership Certificate, the property is held by 深圳榮生化工有限公司 which is owned as to 30% by the Company for a term of a term of 50 years commencing on 28 April 1991 and expiring on 27 April 2041 for residential purpose.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate

: Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by深圳榮生化工有限公司 for a term commencing on 28 April 1991 and expiring on 27 April 2041; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Land Co., Ltd.

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Hotel Portion of Coastal Coastal International Centre is International Centre a parcel of land with an area of

（沿海國際中心） 26,819.60 square metres on which No.1296 Ganjiang a composite development namely West Road “Coastal International Centre” are Jinchang District erected in 2009. Suzhou City Jiangsu Province The property comprises a levels 29 to the PRC 49 of a 51-storey commercial building within the subject development.

RMB 681,000,000.–

The property is RMB 681,000,000.– currently operated as a 2-star hotel. (100% interest attributable to the Company RMB 681,000,000.–)

The total gross floor area of the property is of 38,690.71 square metres.

The property is held for a term expiring on 11 April 2046 for commercial service purpose.

Notes:

As revealed by the Land Use Rights Certificate dated 5 September 2003, the land use rights of the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）, a wholly-owned subsidiary of the Company, for a term expiring on 11 April 2046 for commercial service purpose.
As revealed by three sets of Building Ownership Certificates all dated 19 April 2010, the property is held by Suzhou New Development Investment Co., Ltd.（蘇州新發展投資有限公司）.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Certificate : Yes Building and Land Ownership Certificate : Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The land use rights of the property is held by Suzhou New Development Investment Co., Ltd. for a term expiring on 11 April 2046 for commercial service purpose; and
ii. The property is held by Suzhou New Development Investment Co., Ltd.;
iii. The property is subject to 25 mortgages in favour of China Agricultural Bank – Suzhou Branch ; and
iv. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance except for the above mortgage.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Shumkang (Group) Co., Ltd.

Property Description and tenure 203. Level 4 and various The property comprises commercial residential units of premises on level 4 and thirty Shenrong Building residential units within a 23-storey （深榮大廈）, composite building completed in Fuqiang Road, 2000. Huanggang, Futian District, The gross floor area of commercial Shenzhen, premises and residential units are of the PRC. 2,362.62 square metres and 1,280.52 square metres respectively.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB47,600,000 occupied by the Group as office/dormitory/ (40% interest canteen purposes. attributable to the Company RMB19,040,000.–)

The property is held for a term of 70 years commencing on 7 March 1994 and expiring on 6 March 2064.

Notes:

As stipulated in various sets of Building and Land Ownership Certificate dated 12 March 2002 and 13 March 2002 respectively, the property is held by 深圳深港榮利直通巴士有限公司, which is owned as to 40% by the Company, for a term of 70 years commencing on 7 March 1994 and expiring on 6 March 2064.
The property comprises the followings:
Level 4; Units 608, 609, 610, 611, 612, 613, 614, 615, 616, 617, 618, 619 and 620 on 6th Floor; Units 714, 715, 716, 717, 718, 719 and 720 on 7th Floor and Units 2208, 2209, 2210, 2211, 2212 and 2213 on 22nd Floor.
Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by 深圳深港榮利直通巴士有限公司 for a term commencing on 7 March 1994 and expiring on 6 March 2064;
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
Our valuation has been made on the basis that all the land premium has been fully settled to the government so that the property can be freely transferred on the market.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

Unit 252 on 5th Floor The property comprises a residential and car parking space unit on 5th floor and a car parking on 1st Floor space on 1st floor of a 7-storey Aixin Jiayuan residential building completed in No.4 Tengfei Er Street 1998. Tiexi District Shenyang City The total gross floor area of the Liaoning Province property is approximately 153.00 the PRC square metres with breakdown as follows:

The property is RMB820,000.– occupied by the Group as dormitory. ( 46.925% interest attributable to the Company RMB 384, 785.–)

Use Residential Carpark Total:	Gross Floor Area (sq. m.) 130.00 23.00
	153.00

Notes:

As stipulated in two sets of Building and Land Ownership Certificate both dated 3 November 1999, the property is held by Shenyang Shengang Pengcheng Automotive Development Co., Ltd.（沈陽深港鵬城汽車發展有限公司）, which is owned as to 46.925% by the Company.
In our valuation, we have assumed that the property is held for a term of 70 years for residential purpose (being the maximum term for land use for residential purpose under the land law of the PRC).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by two sets of Building Ownership Certificate, the property is held by Shenyang Shengang Pengcheng Automotive Development Co., Ltd .; and
ii. As confirmed by the Company, the property is not subject to any mortgage, seizure and other third party encumbrances.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

20 5. Development Site in The property comprises a parcel of Xing Hua Dong Lane, land with an area of 1,480 square Shawan, metres on which a commercial/office Buji Town, development will be erected. Longgang District, Shenzhen, Upon completion, a total gross floor the PRC. area of 3,108 square metres will be provided for the subject development.
The property is RMB6,000,000.– temporary occupied by the Group as car port (80% interest and ancillary office attributable to the purposes. Company RMB4,800,000.–)

The property is held for a term of 50 years commencing on 20 December 1998 and 19 December 2048.

Notes:

As stipulated in the Building and Land Ownership Certificate dated 27 December 2001, the property is held by Shum Yip Shumkang (Group) Company Limited（深業深港（集團）有限公司）, a 80%-owned subsidiary of the Company).
In our valuation, we have only valued the property as a bare site and disregarder the aforesaid development potential.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : Yes Planning Permit for Construction Land : Yes Planning Permit for Construction Works : No

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by Shum Yip Shumkang (Group) Co., Ltd. for a term of 50 years commencing on 20 December 1998 and 19 December 2048 for the purpose of commercial/office uses; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
20 6. Levels 1 to 3, The property comprises industrial Factory Block No. 709, premises on the levels 1 to 3 of a Liantong Industrial 6-storey industrial building completed Area, in 1994. Luosha Road, Luohu District, The gross floor area of the property is Shenzhen, 4,941.49 square metres. the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB17,300,000.– occupied by the Group as workshop (80% interest and ancillary office attributable to the purposes. Company RMB13,840,000.–)

The property is held for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042.

Notes:

As stipulated in three sets of Building and Land Ownership Certificate all dated 25 May 1998, the property is held by 深圳深港實業（集團）有限公司 (now known as Shum Yip Shumkang (Group) Company Limited（深業深港（集團）有限公司）, a 80%-owned subsidiary of the Company.).
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building and Land Ownership Certificate, the property is held by Shum Yip Shumkang (Group) Co., Ltd. for a term of 50 years commencing on 25 February 1992 and expiring on 24 February 2042 for the purpose of industrial/warehouse uses; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

20 7. Units 103, 104, 106, The property comprises seven 203, 703, 704 and 705, residential units within an 8-storey Block B, residential building completed in Lian Nan Garden, 1993. Shenzhen, the PRC. The total gross area of the property is approximately 744.28 square metres.
The property is No Commercial Value occupied by the Group as dormitory purposes.

Notes:

Pursuant to six sets of Agreement all entered into between 深圳市羅湖區黃貝街道辦事處蓮塘村民委員 and 深圳三九實業總公司房地產部 (together referred to as “Party A”) and Shenzhen Shenkang Development Enterprise Corporation (referred to as “Party B”), a 80%-owned subsidiary of the Company, dated 8 September 1994, Party B agreed to acquire the property (excluding unit 203) from Party A.
According to the aforesaid Agreements, the property is held for a land use rights term of 50 years from September 1993 to September 2043.
Due to the Building and Land Ownership Certificate not yet obtained, we have attributable to no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The Building Ownership Certificate of the property has not yet been obtained. The legal interests of the property is held by Shum Yip Shumkang (Group) Co., Ltd ; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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INTERESTS OF THE GROUP

Property Description and tenure
20 8. Unit 292 on 9th Floor The property comprises a residential Block 4 unit on 9th floor of a 10-storey Dong Fang Wei Ni Si residential building completed in Shenshui Road 2005. Shenhe District Shenyang City The gross floor area of the property is Liaoning Province approximately 160.48 square metres. the PRC The property is held for a term commencing on 25 September 2001 and 24 September 2031.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB1,450,000 occupied by the Group as dormitory. ( 74.55% interest attributable to the Company RMB 1,080,975.–)

Notes:

As stipulated in the Building Ownership Certificate (Ref: Fang Quan Zheng Shi Zhong Xin Zi Di No. N060045358（沈房權証市中心字第N060045358號）dated 29 May 2008, the property with a gross floor area of 160.48 square metres is held by Shenyang Wuai Shumkang Property Development Co. Ltd.（瀋陽五愛深港房地產開發有限公司）, a 74.55%-owned subsidiary of the Company.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Building Ownership Certificate, the property is held by Shenyang Wuai Shumkang Property Development Co. Ltd.（瀋陽五愛深港房地產開發有限公司）; and
ii. As confirmed by the Company, the property is not subject to any mortgage, seizure and other third party encumbrances.

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Property Description and tenure
20 9. Building and Land of The subject development which is Shenyang Wuai occupying a parcel of land with an Shengang Vehicle and area of 12,805.50 square metres on Logistic Terminus which a 6-storey warehouse building, Nos.145-2 and 149 Bei a 5-storey passenger terminus Han Lin Road building, a 10-storey office building Shenhe District and various ancillary buildings Shenyang City erected in between 1994 and 1996. Liaoning Province the PRC. The property comprises various warehouse and ancillary buildings within the development with a total gross floor area of the property is approximately 5,680 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is RMB23,200,000 occupied by the Group as office and ( 74.55% interest warehouse. attributable to the Company RMB 17,295,600.–)

The property is held for a term expiring on 23 May 2056.

Notes:

As stipulated in the Land Use Rights Certificate dated 3 May 2006, the land use rights of the property is held by Shenyang Wuai Shumkang Company Limited（沈陽五愛深港客貨總站有限公司）, a 74.55%-owned subsidiary of the Company, for a term expiring on 23 May 2056 for transportation uses.
As stipulated in a set of Building Ownership Certificate (Ref: Chen Fang Quan Zheng Shi Chen He Zi Di No. 11931（沈房權證市沈河字第11931號）dated 23 April 2006, the property with a total gross floor area of 3,358 square metres are held by Shenyang Wuai Shumkang Company Limited for office use.
Our valuation has been made on the assumption that Shenyang Wuai Shumkang Company Limited shall have no legal impediment and additional charge of substantial amount in obtaining Building Ownership Certificate for the remaining portions of the subject buildings.
As advised, the Building Ownership Certificate for a portion of the property with the total gross floor area of 2,322 square metres has not obtained yet. In the absence of evidence of prove the legality of the construction of such portion of the property, we have no commercial value to that portion of the property. Upon all the Building Ownership Certificates for the property issued by the relevant the government, the capital value for the above portion of property is in the amount of RMB 9,300,000 .–.

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We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate and Building Ownership Certificate, the property is held by Shenyang Wuai Shumkang Company Limited; and
ii. The building ownership rights of the property are subject to the mortgage in favour of the China Construction Bank – Shenyang Branch;
iii. As confirmed by the Company, the property is not subject to any seizure and other third party encumbrances.

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Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

2 10. Shenyang Wuai The subject development which is Shengang Bus Station occupying a parcel of land with an western side of area of 28,613.80 square metres Xiaonan Street, comprises two 26-storey residential Shenhe District buildings both surmounting an Shenyang City 8 -storey commercial/bus station Liaoning Province podium. The development were the PRC completed in 2011.

The property which RMB241,000,000 is currently being operated by the owner. ( 74.55% interest attributable to the Company: RMB 179,665,500.–)

The property comprises bus station/ car parking podium of the subject development with a total gross floor area of approximately 40,106.74 square metres.

The property is held for a land use rights term expiring on 2 November 2057.

Notes:

Pursuant to the Land Use Rights Contract entered into between Shenyang Plan & Land Resources Bureau（瀋陽市規劃和國土資源局）and Shenyang Wuai Shumkang Property Development Co. Ltd.（沈陽五愛深港房地產開發有限公司）, a 74.55%-owned subsidiary of the Company, issued on 2 November 2007, the latter acquired the land use rights of the property for commercial/residential/transportation development purpose at a consideration of RMB310,001,909.20. As confirmed by the Group, the aforesaid consideration was fully settled.
As stipulated in the Land Use Rights Certificate (Ref: Chen Yang Guo Yong (2007) Di No. 0373（沈陽國用(2007)第0373號）dated 3 December 2007, the land use rights of the property is held by Shenyang Wuai Shumkang Property Development Co. Ltd. for a term expiring on 2 November 2057 for commercial, residential and transportation uses.
As revealed by the Construction Land Use Planning Permit（建設用地規劃許可證）(Ref: Shen Gui Tu Zheng Zi 2007 Nian No. 0079（沈規土證字2007年0079號）) issued by the Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）on 26 April 2007, the construction site of the property with an area of 28,613.8 square metres is in compliance with the town planning controls.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

As revealed by the Planning Permit for Construction Works（建設工程規劃許可證）(Ref: Chen Gui Jian Zheng Zi 2008 Nian No. 0018（沈規建証字2008年0018號）issued by Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）dated 4 March 2008, the construction works of with planned gross floor area of 157,204.36 square metres are in compliance with the construction work requirements and have been approved.
As revealed by the Construction Works Commencement Permits（建築工程施工許可證）(Ref: 210102201007050101) issued by the Shenyang Planning and Land and Resources Bureau（沈陽市規劃和國土資源局）on 10 March 2008, the construction of the subject buildings with a total gross floor area of 157,204.36 square metres has been allowed.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract	:	Yes
Land Use Rights Certificate	:	Yes
Building Ownership Certificate	:	No
Construction Land Use Planning Permit	:	Yes
Planning Permit for Construction Works	:	Yes
Construction Works Commencement Permits	:	Yes

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by Shenyang Wuai Shumkang Property Development Co. Ltd.（沈陽五愛深港房地產開發有限公司）for a land use rights term expiring on 2 November 2057 for commercial, residential and transportation purposes;
ii. The land use rights of the property are subject to the mortgage in favour of the Bank of China – Shenzhen Branch and Shenyang Branch;
iii. As confirmed by the Company, the property is not subject to any seizure and other third party encumbrances;
iv. Shenyang Wuai Shumkang Property Development Co., Ltd. has obtained the relevant construction approvals as stated in the PRC Legal Opinion for the subject development.

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Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

2 11. Levels 4 and 5 of The subject building comprises a Building on Xinghe parcel of land with an area of 240.00 Road, square metres on which a 5-storey Danshui Town, residential building completed in Huiyang District, 2002. Huizhou City, Guangdong Province, The property comprises levels 4 and the PRC. 5 of the subject building and has a total gross floor area of the property is 543.30 square metres.
The subject building comprises a parcel of land with an area of 240.00 square metres on which a 5-storey residential building completed in 2002.

The property is RMB1,360,000.– occupied by the Group as dormitory. (40% interest attributable to the Company RMB544,000.–)

The property is held for a land use right term expiring on 23 December 2068.

Notes:

As stipulated in the Land Use Rights Certificate dated 18 April 2005, the land use rights of the property is held by 惠陽惠深運輸實業發展公司 which is owned as to 40% by the Company.
As stipulated in the Building and Land Ownership Certificate dated 30 March 2005, the property is held by 惠陽惠深運輸實業發展公司.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property is held by 惠陽惠深運輸實業發展公司 for a term expiring on 23 December 2068 for residential use;
ii. As revealed by the Building and Land Ownership Certificate, the property is held by 惠陽惠深運輸實業發展公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 2 12. Buildings and Land of The property comprises two parcels The property is RMB3,160,000.– Vehicle Terminus, of land with a total area of 6,840.20 occupied by the Group Cheng Jiang Lu Hu square metres on which a 4-storey as vehicle terminus. (40.8% interest Village, office building and a 2-storey office attributable to the Taihe County, building erected in between 1999 and Company Jian City, 2001. RMB1,289,280.–) Jiangxi Province, the PRC. The total gross floor area of the property is of 1,508.60 square metres. The property is held for a term expiring on 23 May 2056.

Notes:

As stipulated in two sets of Land Use Rights Certificate both dated 12 August 2005, the land use rights in the property is held by 江西深港交通運輸有限公司, which is owned as to 40.8% by the Company, for a land use rights term expiring on 23 May 2053.
As stipulated in two sets of Building Ownership Certificate, the aforesaid buildings are held by 江西深港交通運輸有限公司.
Opinion of the PRC Lawyer on the property is summarized as follows:
i. As revealed by two sets of Land Use Rights Certificate, the land use rights in the property are held by 江西深港交通運輸有限公司 for a term expiring on 23 May 2053 for composite use;
ii. The aforesaid buildings are held by 江西深港交通運輸有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

2 13. Buildings and Land of The property comprises a parcel Vehicle Terminus, of land with an area of 14,060.60 Baifeng Avenue, squre metres on which two blocks of Taihe County, 7-storey office building, a 3-storey Jian City, office building and a 3-storey Jiangxi Province, commercial building erected in the PRC. between 1978 and 1999.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB39,000,000.– occupied by the Group as vehicle terminus. (40.8% interest attributable to the Company RMB15,912,000.–)

The total gross floor area of the property is of 9,734.17 square metres.

The property is held for a term expiring on 31 December 2052.

Notes:

As stipulated in the Land Use Rights Certificate dated 12 August 2005, the land use rights of the property is held by 江西深港交通運輸有限公司, which is owned as to 40.8% by the Company, for a land use rights term expiring on 31 December 2052.
As stipulated in various sets of Building Ownership Certificate, the aforesaid buildings are held by 江西深港交通運輸有限公司.
Opinion of the PRC Lawyer on the property is summarized as follows:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by 江西深港交通運輸有限公司 for a term expiring on 31 December 2052 for composite use;
ii. The aforesaid buildings are held by 江西深港交通運輸有限公司; and
iii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 2 14. Buildings and Land of The property comprises two parcels The property is RMB4,250,000.– Vehicle Terminus, of land with a total area of 10,009.00 occupied by the Group Gong Nong Bing Avenue squre metres on which a single storey as vehicle terminus. (40.8% interest (also known as workshop building erected in 2004. attributable to the Guanxi Road), Company Taihe County, The total gross floor area of the RMB1,734,000.–) Jian City, property is of 1,631.56 square metres. Jiangxi Province, the PRC. The property is held for a term expiring on either 7 May 2055 or 1 November 2057.

Notes:

As stipulated in two sets of Land Use Rights Certificate dated 8 August 2008 and 3 December 2008 respectively, the land use rights of the property is held by 江西深港交通運輸有限公司, which is owned as to 40.8% by the Company, for a land use rights term expiring on either 7 May 2055or 1 November 2057 for transportation purpose.
The Building Ownership Certificate for the aforesaid buildings has not obtained yet. In our valuation, we have valued the property as a clearance site and have disregarded land improvement works and any buildings and structures erected on the property.
Opinion of the PRC Lawyer on the property is summarized as follows:
i. As revealed by the Land Use Rights Certificate, the land use rights of the property are held by 江西深港交通運輸有限公司 for a term expiring on either 7 May 2055 or 1 November 2057 for transportation use;
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure
2 15. Flat B on 3rd Floor The property comprises a residential including Flat Roof, unit of a 15-storey commercial/ Elaine Court, residential building completed in Nos.211 to 215 Tung 1986. Choi Street, Kowloon, Hong Kong. The total gross floor area of the property is 43.01 square metres.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB1,430,000 occupied by the Group as a dormitory. (40% interest attributable to the Company RMB572,000.–)

The property is held under three government leases each for a term of 75 years renewable for a further term of 75 years all commencing on 18 June 1951.

Notes:

The registered owner of the property is Wing Lee (Kong Shum) Transportation Limited via memorial no.UB5310550 dated 21 April 1992. As revealed by a trust deed dated 1 February 1997 executed by Wing Lee (Kong Shum) Transportation Limited as trustee in favour of Shenzhen Shenkong Winglee Cross Border Bus Co., Ltd. ( which is owned as to 40% by the Company), Shenzhen Shenkong Winglee Cross Border Bus Co., Ltd. is the beneficial owner of the property.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 16. Flat No.14 on 3rd Floor, The property comprises a residential Shing Tak Mansion, unit on 3rd floor of a 12-storey No. 15 Peace Avenue, commercial/residential building Kowloon, Hong Kong. completed in 1962.

The saleable floor area of the property is 62.71 square metres (675 square feet).

The property is RMB4,700,000.– occupied by the Group as a dormitory. (40% interest attributable to the Company
RMB1,880,000.–)

The property is held under a government lease for a term of 75 years renewable for a further term of 75 years all commencing on 1 December 1913.

Notes:

The registered owner of the property is 深圳深港實業（集團）有限公司 (now known as Shum Yip Shumkang (Group) Company Limited), which is owned as to 40% by the Company, via memorial no.06121601070107 dated 24 November 2006.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Terra (Holdings) Co., Ltd.

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 2 17. 21st and 22nd Floor of The property comprises entire The property is No Commercial Value Jinsong Building industrial premises on 21st floor and currently occupied by （勁松大廈） 22nd floor of a 22-storey industrial the Group for office (75% interest Che Gong Miao building completed in 2001. purpose. attributable to the Industrial Zone, Company Futian District, The gross floor area (“G.F.A.”) of the No Commercial Value) Shenzhen, property is of 3,600.00 square metres. the PRC. The property is held for a term of 50 years commencing on 16 November 1988 and expiring on 15 November 2038.

Notes:

Pursuant to a Land Use Right Contract dated 29 December 1988 between the People’s Government of Shenzhen (the grantor) and Shenzhen Terra Industrial Co., Ltd. (a 75%-owned subsidiary of the Company, formerly known as Shenzhen Industrial Zone Development Company) (the grantee), the grantor agreed to grant the land use rights in Lot No.B107-1 (upon part of which the property is erected) to the grantee for a term of 50 years commencing on 16 November 1988 and expiring on 15 November 2038.
As revealed by the Planning Permit for Construction Works dated 6 October 2008, the land use rights in the subject building held by Shenzhen Terra Industrial Co., Ltd. for the development of the subject building.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Land Use Rights Contract : Yes Land Use Rights Certificate : No Planning Permit for Construction Land : Yes Planning Permit for Construction Works : Yes

Due to the Building and Land Ownership Certificate for the property not obtained yet, we have ascribed no commercial value to the property. Upon obtained the Building and Land Ownership Certificate for the property, the market value of the property is at the amount of RMB 75.600.000 .–.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 18. Units 14A and 25A The property comprises two Jinghai Garden residential units of a 32-storey
（京海花園） residential building completed in Futian District, 1998. Shenzhen, the PRC. The total gross floor area of the property is of 200.24 square metres.

The property is RMB3,600,000.– occupied by the Group as office/dormitory (75% interest purposes. attributable to the Company RMB2,700,000.–)

The property is held for a term of 70 years commencing on 28 August 1996 and expiring on 27 August 2066.

Notes:

As stipulated in two sets of Building and Land Ownership Certificate dated 16 March 2011 and 18 March 2011 respectively, the property is held by 深圳泰然建設工程有限公司, a 75%-owned subsidiary of the Company, for a term of 70 years commencing on 28 August 1996 and expiring on 27 August 2066 for residential purpose.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Group is as follows:

Building and Land Ownership Certificate : Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. As revealed by two sets of Building and Land Ownership Certificate, the property is held by 深圳泰然建設工程有限公司 for a term commencing on 28 August 1996 and expiring on 27 August 2066;
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure

Property

2 19. Market Units 101-108, The property comprises various 201, 202 and Clubhouse retail units and a resident clubhouse Terra Bihai of a 3-storey commercial complex Hong Shu Yuan completed in 2004.
（泰然碧海紅樹園） Furong Road and The total gross floor area of the Binhe Avenue property is of 7,431.11 square metres. Futian District, Shenzhen, The property is held for a term of the PRC. 70 years commencing on 22 January 2002 and expiring on 21 January 2072.

Market value in Particulars of existing state as at 31 occupancy December 2012 The property is RMB 34, 000,000 occupied by the Enlarged Group as (75% interest commercial/ancillary attributable to resident clubhouse the Company: purposes. RMB 25, 500,000 )

Notes:

As stipulated in various sets of Building and Land Ownership Certificate, the property is held by Shum Yip Terra (Holdings) Co., Ltd. 深業泰然（集團）股份有限公司, a 75%-owned subsidiary of the Company, for a term of a term of 70 years commencing on 22 January 2002 and expiring on 21 January 2072 for residential purpose.
The status of the title and grant of major approvals and licences in accordance with the information provided by the Enlarged Group is as follows:

Building and Land Ownership Certificate : Yes

Opinion of the PRC Lawyer on the property is summarized as follows:
i. The property is held by Shum Yip Terra (Holdings) Co., Ltd. for a term commencing on 22 January 2002 and expiring on 21 January 2072; and
ii. Up to the Latest Practicable Date, as confirmed by the Company, the property was free from any encumbrance.
The property is not allowed to be transferred but is restricted for the use of the grantee only. Our valuation only reflects the depreciated replacement costs of the property and ascribed no commercial value to the land.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Maanshan Shum Yip Real Estate Co., Ltd.

Property Description and tenure 2 20. Units 1-602 and 1-603 The property comprises two Mingzhu Times Square, residential units on Level 6 within Huayu Road, 6-storey residential buildings Yushan District, completed in about 2005. Ma’anshan City, Anhui Province, The total gross floor area of the the PRC property is 462.4 square metres. The property is held for a term expiring on 28 August 2073.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is RMB3,200,000 occupied by the Group for office purpose (99.54% interest attributable to Company RMB3,185,280.–)

Notes:

As revealed by two sets of Land Use Rights Certificate, the land use rights of the property are held by Maanshan Shum Yip Real Estate Co., Ltd. （馬鞍山深業地產有限公司）, a 99.54%-owned subsidiary of the Company, for a term expiring on 28 August 2073 for residential use.
As revealed by two Building and Land Ownership Certificates all registered on 21 April 2011, the subject property with a total gross floor area of 462.4 square metres are held by Maanshan Shum Yip Real Estate Co., Ltd. for residential use.
We have been provided with a legal opinion regarding the property interests by the PRC Legal Adviser, which contains, inter alia, the followings:
i. As revealed by the Land Use Rights Certificate and Building Ownership Certificate, the property is held by Maanshan Shum Yip Real Estate Co., Ltd. （馬鞍山深業地產有限公司）; and
ii. As confirmed by the Company, the property is not subject to any mortgage, seizure and other third party encumbrances.

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Group VI – Properties Rented by the Group

				Market value in
			Particulars of	existing state as at
	Property	Description and tenure	occupancy	31 December 2012
2 21.	Office Units on	New East Ocean Centre is a 20-storey	The property is	No Commercial Value
	8th Floor New East Ocean Centre	(including 3 basements) commercial building completed in 1991.	occupied by the Group for office purpose.
	No.9 Science Museum
	Road	The property comprises portion office
	Kowloon, Hong Kong.	premises on 8th floor of the subject
		building.
		The gross floor area of the property is
		7,606 square feet.
		The property is held by the Group
		under a tenancy agreement for a
		term of 5 years commencing on 1
		May 2008 and expiring on 30 April
		2013 at a current monthly rent of
		RMB152,120.–.

Notes:

The registered owner of the property is Shum Yip Holdings Company Limited which is a holding company of the Company via memorial no.UB5297756 dated 14 May 1992.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Shum Yip Southern Land (Holdings) Co., Ltd.

Property Description and tenure 2 22. Units 2301 and 2302 The property comprises entire Haisong Building industrial premises on 23rd floor Tairan 9th Road of a 25-storey industrial building Che Gong Miao completed in 2006. Industrial Zone, Futian District, The total gross floor area of the Shenzhen, property is 2,434.28 square metres. the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value currently occupied by the Group as an ancillary office.

The property is held by the Group under a tenancy agreement for a term of 3 years commencing on 1 January 2011 and expiring on 31 December 2013 at a current monthly rent of RMB243,428.– inclusive management fee.

Notes:

Pursuant to the Tenancy Agreement entered into between Shum Yip Holdings Company Limited（深業（集團）有限公司）, the holding company of the Company, and Shum Yip Southern Land (Holdings) Co., Ltd.

（深業南方地產（集團）有限公司）, a wholly-owned subsidiary of the Company, dated 15 January 2010, the latter rented the property from the former at a current monthly rent of RMB243,428 for a term of 3 years commencing on 1 January 2011 and expiring on 31 December 2013.

As stipulated in two sets Building and Land Ownership Certificates dated 24 March 2008, the property held by Shum Yip Holdings Company Limited.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between Shum Yip Holdings Company Limited and Shum Yip Southern Land (Holdings) Co., Ltd., the property was leased to Shum Yip Southern Land (Holdings) Co., Ltd. for a term expiring on 31 December 2013;
ii. The property is held by Shum Yip Holdings Company Limited; and
iii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties.

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VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 23. Units 1 and 5 on The property comprises two office 11th Floor units on 11th floor of a 30-storey Zhujiang International office building completed in 1990’s. Building No.112 Yuehua Road The gross floor area of the property is Yuexiu District 794.49 square metres. Guangzhou City Guangdong Province The property is held by the Group the PRC under a tenancy agreement for a term of 2 years commencing on 10 February 2011 and expiring on 9 February 2013 at a current monthly rent of RMB67,352.– exclusive management fee.

The property is No Commercial Value currently occupied by the Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement with its supplement agreement entered into between 廣東合生越華房地產有限公司 (an independent third party), and Guangzhou 廣州市深業房地產有限公司 Shum Yip Property Development Co., Ltd.（廣州市深業房地產有限公司）, a wholly-owned subsidiary of the Company, dated 28 December 2010 and 10 February 2011 respectively, the latter rented the property from the former at a current monthly rent of RMB67,352– for a term of 2 years commencing on 10 February 2011 and expiring on 9 February 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 廣東合生越華房地產有限公司 and 廣州市深業房地產有限公司 Shum Yip Property Development Co., Ltd. as tenant, the property was leased to Guangzhou 廣州市深業房地產有限公司 Shum Yip Property Development Co., Ltd. for a term expiring on 9 February 2013; and
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right.

IV – 355

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 24. Northern Portion on The property comprises office 2nd Floor premises on 2nd floor of a 5-storey Yundonghai Street office building completed in 2005. Office Building Yundonghai Avenue The gross floor area of the property is Sanshui District 800.00 square metres. Foshan City Guangdong Province The property is held by the Group the PRC under a tenancy agreement for a term of 2 years and 6 months commencing on 30 September 2008 and expiring on 31 March 2011 at a current monthly rent of RMB8,000-.
The gross floor area of the property is 800.00 square metres.

The property is No Commercial Value currently occupied by the Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 佛山市三水區雲東海街道辦事處, an independent third party, and 佛山市三水深業地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB8,000.– for a term of 2 years and 6 months commencing on 30 September 2008 and expiring on 31 March 2011.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 佛山市三水區雲東海街道辦事處 and 佛山市三水深業地產有限公司 as tenant, the property was leased to 佛山市三水深業地產有限公司 for a term of 2 years and 6 months commencing on 30 September 2008 and expiring on 31 March 2011;
ii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties.

IV – 356

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 25. Building in Yangmei The property comprises a 6-storey Power Management residential building completed in Station 1990’s. Yangmei Village Xinan Street The gross floor area of the property is Sanshui District 895.53 square metres. Foshan City Guangdong Province The property is held by the Group the PRC under a tenancy agreement for a term of 5 years commencing on 1 April 2010 and expiring on 30 April 2014 at a current monthly rent of RMB8,955.30.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 佛山市三水新恆益物業管理有限公司, an independent third party, and 佛山市三水深業地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB8,955.30 for a term of 5 years commencing on 1 April 2010 and expiring on 30 April 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 佛山市三水新恆益物業管理有限公司 and 佛山市三水深業地產有限公司 as tenant, the property was leased to 佛山市三水深業地產有限公司 for a term of 5 years commencing on 1 April 2010 and expiring on 30 April 2014;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 357

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

2 26. Unit 702 and 802 The property comprises two Block 13 residential unit of an 8-storey Luhu City Garden residential building completed in （綠湖城市花園） 2010. No.28 Sanda Road （三達路） The gross floor area of the property is Xinan Street 222.54 square metres. Sanshui District Foshan City The property is held by the Group Guangdong Province under a tenancy agreement for a term the PRC of 1 year commencing on 15 February 2012 and expiring on 28 February 2013 at a current monthly rent of RMB2,500.

The property is currently occupied by the Group for dormitory purpose.

No Commercial Value

Notes:

Pursuant to the Tenancy Agreement entered into between 曾銘東, an independent third party, and 佛山市三水深業地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB2,500 for a term of 1 year commencing on 15 February 2012 and expiring on 28 February 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 曾銘東 and 佛山市三水深業地產有限公司 as tenant, the property was leased to 佛山市三水深業地產有限公司 for a term of 1 year commencing on 15 February 2012 and expiring on 28 February 2013; and
ii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 358

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

22 7. Unit 201, Block 7 The property comprises a residential Fulin House （富林樓） unit on 2nd floor of an 8-storey Nan Yuan Garden residential building completed in
（南源花園） 1990’s. Beijiao Town （北滘鎮） Shunde District The gross floor area of the property is Foshan City 82.8 square metres. Guangdong Province the PRC The property is held by the Enlarged Group under a tenancy agreement for a term of 2 years commencing on 15 April 2011 and expiring on 15 April 2013 at a current monthly rent of RMB2,000– exclusive management fee.
The gross floor area of the property is 82.8 square metres.

The property is No Commercial Value currently occupied by the Enlarged Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 許寧, an independent third party, and 順德深業房地產有限公司, a wholly-owned subsidiary of the Company, dated 14 April 2011, the latter rented the property from the former at a current monthly rent of RMB2,000– for a term of 2 years commencing on 15 April 2011 and expiring on 15 April 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 許寧 and 佛山市順德區深業房地產有限公司 as tenant, the property was leased to 佛山市順德區深業房地產有限公司 for a term of 2 years commencing on 15 April 2011 and expiring on 15 April 2013 at a current monthly rent of RMB2,000-;
ii. The property is held by 許寧; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 359

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

22 8. Unit 201, Block 11 The property comprises a residential Fulin House （富林樓） unit on 2nd floor of an 8-storey Nan Yuan Garden residential building completed in
（南源花園） 1990’s. Beijiao Town （北滘鎮） Shunde District The gross floor area of the property is Foshan City 94.6 square metres. Guangdong Province the PRC The property is held by the Enlarged Group under a tenancy agreement for a term of 2 years commencing on 1 June 2011 and expiring on 31 May 2013 at a current monthly rent of RMB2,000– exclusive management fee.
The gross floor area of the property is 94.6 square metres.

The property is No Commercial Value currently occupied by the Enlarged Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 李志優, an independent third party, and 順德深業房地產有限公司, a wholly-owned subsidiary of the Company, dated 29 April 2011, the latter rented the property from the former at a current monthly rent of RMB2,000– for a term of 2 years commencing on 1 June 2011 and expiring on 31 May 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 李志優 and 佛山市順德區深業房地產有限公司 as tenant, the property was leased to 佛山市順德區深業房地產有限公司 for a term of 2 years commencing on 1 June 2011 and expiring on 31 May 2013 at a current monthly rent of RMB2,000-;
ii. The property is held by 李志優; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 360

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

22 9. Unit 501, Block 7 The property comprises a residential Fuyi House （富逸樓） unit on 5th floor of an 8-storey Nan Yuan Garden residential building completed in
（南源花園） 1990’s. Beijiao Town （北滘鎮） Shunde District The gross floor area of the property is Foshan City 113.69 square metres. Guangdong Province the PRC The property is held by the Enlarged Group under a tenancy agreement for a term of two years commencing on 1 June 2011 and expiring on 31 May 2013 at a current monthly rent of RMB2,200– exclusive management fee.

The property is No Commercial Value currently occupied by the Enlarged Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 梁健敏 and 盧儉濱, together known as independent third parties, and 順德深業房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB2,200– for a term of two years commencing on 1 June 2011 and expiring on 31 May 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 梁健敏 and 盧儉濱 and 佛山市順德區深業房地產有限公司 as tenant, the property was leased to 佛山市順德區深業房地產有限公司 for a term of two years commencing on 1 June 2011 and expiring on 31 May 2013;
ii. The property is held by 梁健敏 and 盧儉濱; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 361

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2012

2 30. 15th Floor Jinsheng Building
（金盛大廈） No.29 Guanghai Avenue
（廣海大道） Xinan Town （西南鎮） Sanshui District Foshan City Guangdong Province the PRC

The property comprises office premies on 15th floor of a 20-storey office building completed in 2009.

The total gross floor area of the property is of 472.95 square metres.

The property is held by the Enlarged Group under a tenancy for a term of 4 years commencing on 1 March 2012 and expiring on 29 February 2016 at a current monthly rent of RMB 15,406 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 廣州金盛地產集團有限公司, an independent third party, and 佛山市三水深業酒店有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 15,406 for a term of 4 years commencing on 1 March 2012 and expiring on 29 February 2016.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 廣州金盛地產集團有限公司 and 佛山市三水深業酒店有限公司 as tenant, the property was leased to 佛山市三水深業酒店有限公司 for a term commencing on 6 June 2012 and expiring on 16 June 2013;
ii. The property is held by 廣州金盛地產集團有限公司; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties

IV – 362

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

2 31. Unit A3-901 The property comprises a residential on 9th Floor unit on 9th floor of a 11-storey Dongjin Court（東峻閣） residential building completed in Donghai Lanwan 2010.
（東海藍灣） No.11 Jiaoyu Dong The total gross floor area of the Road（教育東路） property is of 100.37 square metres. Xinan Town（西南鎮） Sanshui District The property is held by the Enlarged Foshan City Group under a tenancy for a term of Guangdong Province 2 years commencing on 1 February the PRC 2012 and expiring on 30 January 2014 at a current monthly rent of RMB 2,000 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 褟毅恆, an independent third party, and 佛山市三水深業酒店有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 2,000 for a term of 2 years commencing on 1 February 2012 and expiring on 30 January 2014.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 褟毅恆 and 佛山市三水深業酒店有限公司 as tenant, the property was leased to 佛山市三水深業酒店有限公司 for a term 2 years commencing on 1 February 2012 and expiring on 30 January 2014;
ii. The property is held by 褟毅恆; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 363

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

2 32. Unit A5-1503 The property comprises a residential on 15th Floor unit on 15th floor of a 16-storey Dongjin Court（東峻閣） residential building completed in Donghai Lanwan 2010.
（東海藍灣） No.11 Jiaoyu Dong The total gross floor area of the Road（教育東路） property is of 102.08 square metres. Xinan Town（西南鎮） Sanshui District The property is held by the Enlarged Foshan City Group under a tenancy for a term of Guangdong Province 2 years commencing on 7 April 2012 the PRC

The property is held by the Enlarged Group under a tenancy for a term of 2 years commencing on 7 April 2012 and expiring on 6 April 2014 at a current monthly rent of RMB 2,500 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 鍾櫻, an independent third party, and 佛山市三水深業酒店有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 2,500 for a term of 2 years commencing on 7 April 2012 and expiring on 6 April 2014.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 鍾櫻 and 佛山市三水深業酒店有限公司 as tenant, the property was leased to 佛山市三水深業酒店有限公司 for a term 2 years commencing on 7 April 2012 and expiring on 6 April 2014;
ii. The property is held by 陸泳斌; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties

IV – 364

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Pengji Holdings Co., Ltd.

Property Description and tenure 2 33. Shop Nos.301, 302, 303 Noah Mountain Forest comprises and 304 on Level 3, seven parcels of land with a total area Shop Nos.401 and of 524,337.00 square metres on which 402 on Level 4, a large-scale low density residential Clubhouse B development will be erected by Noah Mountain Forest phasing. Xingsha Town Changsha County The property comprises six retail Changsha City units on levels 3 and 4 of a 4 -storey Hunan Province clubhouse building within the subject the PRC. development. The aforesaid clubhouse building was completed in 2010. The total gross floor area of the property is of 1,786.84 square metres. The property is held by the Group under a tenancy for a term of 3 years commencing on 25 May 2011 at a current annual rent of RMB171,537.– exclusive of management fee, water and electricity charges.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value occupied by the Group as office and staff canteen.

Notes:

Pursuant to the Tenancy Agreement entered into between 劉喜雲 and 梁支根 (Parties A), the independent third parties, and Changsha Pengji Property Co. Ltd.（長沙鵬基地產有限公司）(Party B), a wholly-owned subsidiary of the Company, dated 25 May 2011, the Party B rented the property from the Parties A at a current annual rent of RMB171,537.– for a term 3 years commencing on 25 May 2011.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.

IV – 365

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 劉喜雲 and 梁支根 (together known as the lessors) and 長沙鵬基地產有限公司 Changsha Pengji Property Co. Ltd. as tenant, the property was leased to 長沙鵬基地產有限公司 Changsha Pengji Property Co. Ltd. for a term expiring on 24 May 2014;
ii. The property is held by 劉喜雲; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 366

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

23 4. Shop Nos.206, 207 Noah Mountain Forest comprises and 208 on Level 2, seven parcels of land with a total area Clubhouse B of 524,337.00 square metres on which Noah Mountain Forest a large-scale low density residential Xingsha Town development will be erected by Changsha County phasing. Changsha City Hunan Province The property comprises three the PRC. retail units on level 2 of a 4-storey clubhouse building within the subject development. The aforesaid clubhouse building was completed in 2010.

The property is No Commercial Value occupied by the Group as office.

The total gross floor area of the property is of 333.32 square metres.

The property is held by the Group under a tenancy for a term of 1 year commencing on 25 May 2011 at a current annual rent of RMB31,999.– exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 劉喜雲 and 梁支根 (Parties A), the independent third parties, and Changsha Pengji Property Co. Ltd.（長沙鵬基地產有限公司）(Party B), a wholly-owned subsidiary of the Company, dated 25 May 2011, the Party B rented the property from the Parties A at a current annual rent of RMB31,999.– for a term 1 year commencing on 25 May 2011.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.

IV – 367

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 劉喜雲 and 梁支根 (together known as the lessors) and Changsha Pengji Property Co. Ltd. as tenant, the property was leased to Changsha Pengji Property Co. Ltd. for a term expiring on 24 May 2012;
ii. the leasing registration of the tenancy agreement as mentioned in noted 1 above has not been completed; and
iii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties.

IV – 368

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

23 5. Units 1510-1512 The property comprises three office on 15th Floor units on 15th floor of a 20-storey Block B office building completed in 2005. Huakai Plaza Yuanmei Road The total gross floor area of the Nancheng District property is of 469.30 square metres. Dongguan City Guangdong Province The property is held by the Group the PRC. under 3 tenancies for a term of 2 years commencing on 1 February 2011 and expiring on 31 January 2013 at a total current monthly rent of RMB19,874.96 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Group as office.

Notes:

Pursuant to the Tenancy Agreement entered into between 詹錦連, an independent third party, and Dongguan Gaofa Property Development Co., Ltd.（東莞市高發房地產有限公司）, a wholly-owned subsidiary of the Company, the latter rented Unit 1510 of the property from the former at a current monthly rent of RMB6,717.92 for a term of 2 years commencing on 1 February 2011 and expiring on 31 January 2013.
Pursuant to the Tenancy Agreement entered into between 謝洪偉 and Dongguan Gaofa Property Development Co., Ltd., a wholly-owned subsidiary of the Company, dated 21 December 2010, the latter rented Unit 1512 of the property from the former at a current monthly rent of RMB6,000.– for a term of 2 years commencing on 1 February 2011 and expiring on 31 January 2013.
Pursuant to the Tenancy Agreement entered into between 莫偉軍 and Dongguan Gaofa Property Development Co., Ltd., a wholly-owned subsidiary of the Company, dated 21 December 2010, the latter rented Unit 1511 of the property from the former at a current monthly rent of RMB7,157.04 for a term of 2 years commencing on 1 February 2011 and expiring on 31 January 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.

IV – 369

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 莫偉軍 and Dongguan Gaofa Property Development Co., Ltd. as tenant, Unit 1511 of the property was leased to Dongguan Gaofa Property Development Co., Ltd. for a term expiring on 31 January 2013;
ii. Pursuant to a tenancy agreement entered into between 謝洪偉 and Dongguan Gaofa Property Development Co., Ltd. as tenant, Unit 1512 of the property was leased to Dongguan Gaofa Property Development Co., Ltd. for a term expiring on 31 January 2013;
iii. Pursuant to a tenancy agreement entered into between 詹錦連 and Dongguan Gaofa Property Development Co., Ltd. as tenant, Unit 1510 of the property was leased to for a term expiring on 31 January 2013; and
iv. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right.

IV – 370

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

23 6. Unit 713 on 7th Floor The property comprises a residential Block 6 unit on 7th floor of an 18-storey Zhongxin Xin Tiandi residential building completed in
（中信新天地） 2003. Nancheng District Dongguan City The gross floor area of the property is Guangdong Province of 55.56 square metres. the PRC.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

The property is held by the Enlarged Group under a tenancy for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013 at a current monthly rent of RMB1,500.– inclusive of management fee.

Notes:

Pursuant to the Tenancy Agreement entered into between 武先帆, an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,500.– for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 武先帆 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013;
ii. The property is held by 武先帆; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties.

IV – 371

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in December 2012

Particulars of existing state as at 31 occupancy December 2012

23 7. Unit 605 on 6th Floor The property comprises a residential Block 6 unit on 6th floor of an 18-storey Zhongxin Xin Tiandi residential building completed in
（中信新天地） 2003.
（中信新天地） 2003. Nancheng District Dongguan City The gross floor area of the property is Guangdong Province of 55.68 square metres. the PRC.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

The property is held by the Enlarged Group under a tenancy for a term of one year commencing on 27 June 2012 and expiring on 26 June 2013 at a current monthly rent of RMB1,600.– inclusive of management fee.

Notes:

Pursuant to the Tenancy Agreement entered into between 方武, an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,600.– for a term of one year commencing on 27 June 2012 and expiring on 26 June 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 方武 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 372

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

23 8. Unit 1512 on 15th Floor The property comprises a residential Block 2 unit on 15th floor of an 18-storey Zhongxin Xin Tiandi residential building completed in
（中信新天地） 2003. Nancheng District Dongguan City The gross floor area of the property is Guangdong Province of 55 square metres. the PRC.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

The property is held by the Enlarged Group under a tenancy for a term commencing on 1 July 2010 and expiring on 1 March 2013 at a current monthly rent of RMB1,500.– inclusive of management fee.

Notes:

Pursuant to the Tenancy Agreement entered into between 毛志華, an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,500.– for a term commencing on 1 July 2010 and expiring on 1 March 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 毛志華 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term commencing on 1 July 2010 and expiring on 1 March 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 373

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

23 9. Unit 604 on 6th Floor The property comprises a residential Jinsheng House unit on 6th floor of a 12-storey
（金盛樓） residential building completed in Huangjin Garden 2006.
（黃金花園） Nancheng District The gross floor area of the property is Dongguan City of 106 square metres. Guangdong Province the PRC. The property is held by the Enlarged Group under a tenancy for a term of one year commencing on 24 July 2012 and expiring on 23 July 2013 at a current monthly rent of RMB1,500.– inclusive of management fee.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 賀蔚, an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,500.– for a term one year commencing on 24 July 2012 and expiring on 23 July 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 賀蔚 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term one year commencing on 24 July 2012 and expiring on 23 July 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 374

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Market value in

Property

Description and tenure

Particulars of existing state as at 31 occupancy December 2012

2 40. Unit 701 on 7th Floor The property comprises a residential Block 2 unit on 7th floor of a 10-storey Daohua Village residential building completed in
（稻花村） 2000. Nancheng District Dongguan City The gross floor area of the property is Guangdong Province of 94.02 square metres. the PRC.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

The property is held by the Enlarged Group under a tenancy for a term of one year commencing on 1 October 2012 and expiring on 30 September 2013 at a current monthly rent of RMB2,100.– inclusive of management fee.

Notes:

Pursuant to the Tenancy Agreement entered into between 陳德強, an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB2,100.– for a term of one year commencing on 1 October 2012 and expiring on 30 September 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 陳德強 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term of one year commencing on 1 October 2012 and expiring on 30 September 2013;
ii. The property is held by 陳德強; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 375

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

2 41. Building on No.15 The property comprises a 4-storey Dong Yi Lane（東一巷） residential building completed in Huangjin Yuan Street 1998.
（黃金園街） Heng Mei Village The gross floor area of the property is
（亨美村） of 256 square metres. Nancheng District Dongguan City The property is held by the Enlarged Guangdong Province Group under a tenancy for a term the PRC.

The property is held by the Enlarged Group under a tenancy for a term of one year commencing on 31 August 2012 and expiring on 30 August 2013 at a current monthly rent of RMB2,600.– exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 蘇樹溪, an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB2,600.– for a term of one year commencing on 31 August 2012 and expiring on 30 August 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 蘇樹溪 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term of one year commencing on 31 August 2012 and expiring on 30 August 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 376

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

2 42. Unit 506 on 5th Floor The property comprises a residential Block 16 unit on 5th floor of a 10-storey Ju Xiang Yuan（菊香園） residential building completed in Nancheng District 2000. Dongguan City Guangdong Province The gross floor area of the property is the PRC. of 85 square metres.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

The property is held by the Enlarged Group under a tenancy for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013 at a current monthly rent of RMB1,600.-.

Notes:

Pursuant to the Tenancy Agreement entered into between 葉平友, an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,600.– for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 葉平友 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 377

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at 31 occupancy December 2012

24 3. Unit 404 on 4th Floor The property comprises a residential Block 2 unit on 4th floor of an 8-storey Heng Mei Apartment residential building completed in
（亨美公寓） 1990’s. Nancheng District Dongguan City The gross floor area of the property is Guangdong Province of 155.56 square metres. the PRC.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

The property is held by the Enlarged Group under a tenancy for a term of one year commencing on 1 July 2012 and expiring on 30 June 2013 at a current monthly rent of RMB2,800.– exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 李智群 , an independent third party, and 東莞市高發房地產有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB2,800.– for a term of one year commencing on 1 July 2012 and expiring on 30 June 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 李智群 and 東莞市高發房地產有限公司 as tenant, the property was leased to 東莞市高發房地產有限公司 for a term of one year commencing on 1 July 2012 and expiring on 30 June 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 378

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

24 4. Unit 407 on 4th Floor The property comprises a residential Block 1 unit on 4th floor of a 11-storey Xin Shidai Garden residential building completed in Huizhou City 2010. Guangdong Province the PRC. The gross floor area of the property is of 160.00 square metres.

The property is No Commercial Value occupied by the Group as dormitory.

The property is held by the Group under a tenancy for a term of 3 years commencing on 1 December 2010 and expiring on 1 December 2013 at a current monthly rent of RMB2,500.– exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 方麗英, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB2,500.– for a term of 3 years commencing on 1 December 2010 and expiring on 1 December 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 方麗英 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term of 3 years commencing on 1 December 2010 and expiring on 1 December 2013;
ii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 379

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure 24 5. Unit 2305 on 23rd Floor The property comprises a residential Block 2 unit on 23rd floor of a 25-storey City Plaza residential building completed in Huicheng District 2009. Huizhou City Guangdong Province The gross floor area of the property is the PRC. of 86.00 square metres. The property is held by the Group under a tenancy for a term commencing on 17 December 2012 and expiring on 16 June 2013 at a current monthly rent of RMB2,500.– exclusive of management fee, water and electricity charges.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is No Commercial Value occupied by the Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 陳世明, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB2,500.– for a term commencing on 17 December 2012 and expiring on 16 June 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 陳世明 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term commencing on 17 December 2012 and expiring on 16 June 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 380

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

24 6. Unit 105 on 1st Floor The property comprises a retail unit Block M5 on 1st floor of a 2-storey commercial Hill House（萬林湖） building completed in 2010. Shanbeikeng Huizhou City The gross floor area of the property is Guangdong Province of 28.00 square metres. the PRC.

The property is No Commercial Value occupied by the Group as office.

The property is held by the Group under a tenancy for a term commencing on 15 September 2012 and expiring on 28 February 2013 at a current monthly rent of RMB1,484.– exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 蔡俊鋒, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,484.– for a term 15 September 2012 and expiring on 28 February 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 蔡俊鋒 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term 15 September 2012 and expiring on 28 February 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 381

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

24 7. Unit 3-401 on 4th Floor The property comprises a residential Block A13-A17 unit on 4th floor of an 8-storey Hill House residential building completed in Shanbeikeng 2010. Huizhou City Guangdong Province The gross floor area of the property is the PRC. of 137.00 square metres.

The property is No Commercial Value occupied by the Group as dormitory.

The property is held by the Group under a tenancy for a term commencing on 1 March 2011 and expiring on 31 December 2013 at a current monthly rent of RMB1,750.– exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 梅騰, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,750.– for a term commencing on 1 March 2011 and expiring on 31 December 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 梅騰 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term commencing on 1 March 2011 and expiring on 31 December 2013;
ii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 382

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

24 8. Units 201, 203 and 204 The property comprises 3 retail units on 2nd Floor and 111, on 2nd floor and 4 retail units on 112, 113 and 114 1st Floor of a 2-storey commercial on 1st Floor building completed in 2010. Block M7 Hill House The total gross floor area of the Shanbeikeng property is of 991.36 square metres. Huizhou City Guangdong Province The property is held by the Group the PRC. under two tenancies for a term of 5 years commencing on 23 October 2009 and expiring on 22 October 2014 at a current annual rent of RMB322,980.– exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Group as office.

Notes:

Pursuant to two sets of Tenancy Agreement both entered into between 張榮輝, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current annual rent of RMB322,980.– for a term of 5 years commencing on 23 October 2009 and expiring on 22 October 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to two tenancy agreements both entered into between 張榮輝 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term of 5 years commencing on 23 October 2009 and expiring on 22 October 2014;
ii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 383

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure

24 9. Unit 202 on 2nd Floor The property comprises a retail unit Block M7 on 2nd floor of a 2-storey commercial Hill House building completed in 2010. Shanbeikeng Huizhou City The gross floor area of the property is Guangdong Province of 496.06 square metres. the PRC.

Market value in Particulars of existing state as at occupancy 31 December 2012 The property is No Commercial Value occupied by the Group as office.

The property is held by the Group under a tenancy for a term of 5 years commencing on 23 October 2009 and expiring on 22 October 2014 at a current annual rent of RMB148,818.– exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 蔡惠雄, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current annual rent of RMB148,818.– for a term of 5 years commencing on 23 October 2009 and expiring on 22 October 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 蔡惠雄 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term of 5 years commencing on 23 October 2009 and expiring on 22 October 2014;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 384

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 50. Unit 116 on 1st Floor The property comprises a retail unit Block M7 on 1st floor of a 2-storey commercial Hill House building completed in 2010. Shanbeikeng Huizhou City The gross floor area of the property is Guangdong Province of 58.27 square metres. the PRC.

The property is No Commercial Value occupied by the Group as office.

The property is held by the Group under a tenancy for a term of 5 years commencing on 23 September 2009 and expiring on 22 September 2014 at a current annual rent of RMB24,473.40 exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 張才英, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current annual rent of RMB24,473.40 for a term of 5 years commencing on 23 September 2009 and expiring on 22 September 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 張才英 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term of 5 years commencing on 23 September 2009 and expiring on 22 September 2014;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 385

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 51. Unit 115 on 1st Floor The property comprises a retail unit Block M7 on 1st floor of a 2-storey commercial Hill House building completed in 2010. Shanbeikeng Huizhou City The gross floor area of the property is Guangdong Province of 54.47 square metres. the PRC.

The property is No Commercial Value occupied by the Group as office.

The property is held by the Group under a tenancy for a term of 5 years commencing on 23 September 2009 and expiring on 22 September 2014 at a current annual rent of RMB22,877.40 exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 羅靜萍, an independent third party, and Huizhou Pengji Investment Limited（惠州市鵬基投資有限公司）, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current annual rent of RMB22,877.40 for a term of 5 years commencing on 23 September 2009 and expiring on 22 September 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 羅靜萍 and Huizhou Pengji Investment Limited as tenant, the property was leased to Huizhou Pengji Investment Limited for a term of 5 years commencing on 23 September 2009 and expiring on 22 September 2014;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 386

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 52. Factory A The property comprises a 4-storey Zone 2 industrial building completed in Tong Fu Yu 1990’s. Industrial Park

The property is occupied by the Group as factory.

No Commercial Value

（同富園工業園） The total gross floor area of the Longhua Town property is of 8,468.00 square metres. Baoan District Shenzhen City The property is held by the Group the PRC. under a tenancy for a term of 10 years commencing on 8 July 2004 and expiring on 8 July 2014 at a current monthly rent of RMB112,624.40 exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 深圳市同富園實業發展有限公司, an independent third party, and 深圳市晶華顯示器材有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB112,624.40 for a term of 10 years commencing on 8 July 2004 and expiring on 8 July 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 深圳市同富園實業發展有限公司 and 深圳市晶華顯示器材有限公司 as tenant, the property was leased to 深圳市晶華顯示器材有限公司 for a term of 5 years commencing on 23 September 2009 and expiring on 22 September 2014;
ii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties.

IV – 387

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

25 3. Unit JL3-304 The property comprises commercial on 3rd Floor premises on 3rd floor of a 32-storey Commercia; Podium composite building completed in Jilian Building 1995. （吉蓮大廈） Lianhua Bei（蓮花北） The gross floor area of the property is Futian District, 1,569 square metres. Shenzhen, the PRC. The property is held by the Enlarged Group under a tenancy agreement for the term expiring on 30 November 2015 at a current monthly rent of RMB 39,225.

The property is No Commercial Value currently occupied by the Enlarged Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 深圳市住房和建設局, an independent third party, and 深圳市萬廈居業有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 39,225 for the term expiring on 30 November 2015.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 深圳市住房和建設局 and 深圳港龍深圳市萬廈居業有限公司 as tenant, the property was leased to 深圳市萬廈居業有限公司 for a term expiring on 30 November 2015; and
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 388

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VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure
25 4. Unit 409-410 The property comprises two office on 4th Floor units on 4th floor of a 4-storey Block B commercial building completed in Feng Shen Commercial 2004. Centre（風神商業中心） Feng Shen Avenue The gross floor area of the property is
（風神大道） of 275.34 square metres. Huadu District Guangzhou City The property is held by the Enlarged Guangdong Province Group under a tenancy for a term of 1 the PRC.

The gross floor area of the property is of 275.34 square metres.

The property is held by the Enlarged Group under a tenancy for a term of 1 year commencing on 25 March 2012 and expiring on 24 March 2013 at a current monthly rent of RMB5,856.40 exclusive of management fee, water and electricity charges.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value occupied by the Enlarged Group as office.

Notes:

Pursuant to the Tenancy Agreement entered into between 廣州風神汽車產業基地開發有限公司, an independent third party, and 廣州鵬基物業管理服務有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the formerfor a term of 1 year commencing on 25 March 2012 and expiring on 24 March 2013;
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 廣州風神汽車產業基地開發有限公司 and 廣州鵬基物業管理服務有限公司 as tenant, the property was leased to 廣州鵬基物業管理服務有限公司 for a term of 1 year commencing on 25 March 2012 and expiring on 24 March 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 389

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

25 5. 4th Floor The property comprises office Block B premises on 4th floor of a 30-storey Wei Lai Cheng commercial building completed in （未來城） 2000’s. No.498 Zhujiang Road （珠江路） The gross floor area of the property is Xuanwu Distirct of 537.00 square metres. （宣武區） Nanjing City The property is held by the Enlarged Jiangsu Province Group under a tenancy for a term of the PRC. 20 years commencing on 27 March 2006 and expiring on 27 March 2025 at a total rent of RMB2,680,800.00 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as office.

Notes:

Pursuant to the Tenancy Agreement entered into between 南京高宏投資置業有限公司, an independent third party, and 南京鵬基物業管理服務有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a total rent of RMB2,680,800.00 for a term of 20 years commencing on 27 March 2006 and expiring on 27 March 2025.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 南京高宏投資置業有限公司 and 南京鵬基物業管理服務有限公司 as tenant, the property was leased to 南京鵬基物業管理服務有限公司 for a term of 20 years commencing on 27 March 2006 and expiring on 27 March 2025;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 390

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 30 September 2012

25 6. Levels 1 to 2 The property comprises office Environment Bureau premises on level 1 and 2 of a Taizhou City 4-storey office building completed in Jiangsu Province 2010. the PRC.

The property is No Commercial Value currently occupied by the Enlarged Group for office purpose.

The gross floor area of the property is 1,264 square metres.

The property is held by the Enlarged Group under a tenancy agreement for a term of 2 years commencing on 1 January 2011 and expiring on 31 December 2013 at a monthly rent of RMB 7,900.- exclusive managment fee.

Notes:

Pursuant to the Tenancy Agreement entered into between 泰州市環保局, an independent third party, and 泰州市深業投資發展有限公司, a 50%-owned subsidiary of the Company, the latter rented the property from the former for a term of 2 years commencing on 1 January 2011 and expiring on 31 December 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 泰州市環保局 and 泰州市深業投資發展有限公司 as tenant, the property was leased to 泰州市深業投資發展有限公司 for a term of 2 years commencing on 1 January 2011 and expiring on 31 December 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 391

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Description and tenure The property comprises a 3-storey office building completed in 1989. The total gross floor area of the property is of 2,520 square metres.

Property

25 7. Office Building in Rest The property comprises a 3-storey Home of the Anhui office building completed in 1989. Province Geology and Mineral Resources The total gross floor area of the Exploration Bureau property is of 2,520 square metres.
（安徽省地質礦產勘探局職工療院） The property is held by the Enlarged Chaohu City, Group under a tenancy for a term of 5 Anhui Province, years commencing on 25 September the PRC 2009 at a current annual rent of RMB 88,000 exclusive of management fee, water and electricity charges.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value occupied by the Enlarged Group as office.

Notes:

Pursuant to the Tenancy Agreement entered into between 安徽省地質礦產勘探局職工療院, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current annual rent of RMB 88,000 for a term of 5 years commencing on 25 September 2009.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 安徽省地質礦產勘探局職工療院 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 5 years commencing on 25 September 2009;
ii. The property is held by 安徽省地質礦產勘探局職工療院; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 392

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

25 8. Unit 4-401 The property comprises a residential Block 21 unit of a 6-storey residential building City Scenery completed in 2005.
（城市風景） Xiangyang Village The gross floor area of the property is
（向陽村） of 89.88 square metres. Chaohu City, Anhui Province, The property is held by the Enlarged the PRC Group under a tenancy for a term of 1 year commencing on 5 May 2012 and expiring on 4 May 2013 at a current monthly rent of RMB 1,400 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Note:

Pursuant to the Tenancy Agreement entered into between 胡世元, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,400 for a term of 1 year commencing on 5 May 2012 and expiring on 4 May 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 胡世元 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 5 May 2012 and expiring on 4 May 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 393

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

25 9. Unit 3-501 The property comprises a residential Block 22 unit of a 6-storey residential building City Scenery completed in 2005. （城市風景） Xiangyang Village The gross floor area of the property is （向陽村） of 90 square metres. Chaohu City, Anhui Province, The property is held by the Enlarged the PRC Group under a tenancy for a term of 1 year commencing on 2 March 2012 and expiring on 1 March 2013 at a current monthly rent of RMB 1,400 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 王凌 and 呂毅, independent third parties, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,400 for a term of 1 year commencing on 2 March 2012 and expiring on 1 March 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 王凌, 呂毅 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 2 March 2012 and expiring on 1 March 2013;
ii. The land use rights in the property is held by 呂毅; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 394

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 60. Unit 1-202 The property comprises a residential Block 11 unit of a 6-storey residential building Dongfang Jing Yuan completed in 2004.
（東方景苑） Guang Ming Village The gross floor area of the property is
（光明村） of 109.66 square metres. Chaohu City, Anhui Province, The property is held by the Enlarged the PRC Group under a tenancy for a term of 1 year commencing on 16 April 2012 and expiring on 16 April 2013 at a current monthly rent of RMB 1,333 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 湯玉根, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,333 for a term of 1 year commencing on 16 April 2012 and expiring on 16 April 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 湯玉根 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 16 April 2012 and expiring on 16 April 2013;
ii. The property is held by 湯玉根; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 395

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 61. Unit 2-603 The property comprises a residential Block 11 unit of a 6-storey residential building Dongfang Jing Yuan completed in 2004.
（東方景苑） Guang Ming Village The gross floor area of the property is
（光明村） of 109.66 square metres. Chaohu City, Anhui Province, The property is held by the Enlarged the PRC Group under a tenancy for a term of 1 year commencing on 12 July 2012 and expiring on 11 July 2013 at a current monthly rent of RMB 1,200 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 徐世華, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,200 for a term of 1 year commencing on 12 July 2012 and expiring on 11 July 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 徐世華 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 12 July 2012 and expiring on 11 July 2013;
ii. The property is held by 徐世華; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 396

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure
2 62. Unit 406 The property comprises a residential Block 11 unit of a 6-storey residential building Dongfang Jing Yuan completed in 2005.
（東方景苑） Guang Ming Village The gross floor area of the property is
（光明村） of 78 square metres. Chaohu City, Anhui Province, The property is held by the Enlarged the PRC Group under a tenancy for a term of 1 year commencing on 2 March 2012 and expiring on 1 March 2013 at a current monthly rent of RMB 1,000 exclusive of management fee, water and electricity charges.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 熊嚴軍, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,000 for a term of 1 year commencing on 2 March 2012 and expiring on 1 March 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 熊嚴軍 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 2 March 2012 and expiring on 1 March 2013;
ii. The property is held by 熊嚴軍 as tenant in common;
iii. Up to the Latest Practicable Date, the authorization granted by the other owner of the property has not obtained; and
iv. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 397

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property Description and tenure
26 3. Unit 1-101 The property comprises a residential Block 60 unit of a 6-storey residential building Dongfang Jing Yuan completed in 2004.
（東方景苑） Guang Ming Village The gross floor area of the property is
（光明村） of 86.39 square metres. Chaohu City, Anhui Province, The property is held by the Enlarged the PRC Group under a tenancy for a term of 1 year commencing on 11 September 2012 and expiring on 10 September 2013 at a current monthly rent of RMB 1,100 exclusive of management fee, water and electricity charges.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

Notes:

Pursuant to the Tenancy Agreement entered into between 胡宗貴, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,100 for a term of 1 year commencing on 11 September 2012 and expiring on 10 September 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 胡宗貴 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 11 September 2012 and expiring on 10 September 2013;
ii. The property is held by 胡宗貴 as tenant in common;
iii. Up to the Latest Practicable Date, the authorization granted by the other owner of the property has not obtained; and
iv. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 398

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

26 4. Unit 2-101 The property comprises a residential Block 23 unit of a 6-storey residential building Mei Xin Da Estate completed in 2009.
（美欣達小區） Chaohu City, The gross floor area of the property is Anhui Province, of 118.9 square metres. the PRC

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

The property is held by the Enlarged Group under a tenancy for a term of 1 year commencing on 1 November 2012 and expiring on 31 October 2013 at a current monthly rent of RMB 1,600 exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 羅齊安, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,600 for a term of 1 year commencing on 1 November 2012 and expiring on 31 October 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 羅齊安 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 1 November 2012 and expiring on 31 October 2013;
ii. The property is held by 羅齊安 as 25% of tenant in common;
iii. Up to the Latest Practicable Date, the authorization granted by the other owner of the property has not obtained; and
iv. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 399

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

26 5. Unit 3-401 The property comprises a residential Block 25 unit of a 6-storey residential building Zone C completed in 2007. Shiji Xindu

The property is No Commercial Value occupied by the Enlarged Group as dormitory.

（世紀新都） The gross floor area of the property is Chaohu City, of 85 square metres. Anhui Province, the PRC The property is held by the Enlarged Group under a tenancy for a term of 1 year commencing on 18 November 2012 and expiring on 17 November 2013 at a current monthly rent of RMB 1,400 exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 於洋, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 1,400 for a term of 1 year commencing on 18 November 2012 and expiring on 17 November 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 於洋 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term of 1 year commencing on 18 November 2012 and expiring on 17 November 2013;
ii. The property is held by 於洋; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 400

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property Description and tenure 26 6. Training Centre of The property comprises a 5-storey Chaohu Financial commercial building completed in Society (also known as 200 1. Tangshang Hotel) （巢湖市財會培訓中心 The property is held by the Enlarged 另稱湯山賓館） Group under a tenancy for a term Chaohu City, commencing on 6 June 2012 and Anhui Province, expiring on 16 June 2013 at a current the PRC monthly rent of RMB 37,500 exclusive of management fee, water and electricity charges.

Market value in Particulars of existing state as at occupancy 31 December 2012

The property is No Commercial Value occupied by the Enlarged Group as commercial purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 巢湖市財會培訓中心, an independent third party, and 巢湖深業誠毅地產有限公司, a 80%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 37,500 for a term commencing on 6 June 2012 and expiring on 16 June 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 巢湖市財會培訓中心 and 巢湖深業誠毅地產有限公司 as tenant, the property was leased to 巢湖深業誠毅地產有限公司 for a term commencing on 6 June 2012 and expiring on 16 June 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 401

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Shumkang (Group) Co., Ltd.

Market value in Particulars of existing state as at Property Description and tenure occupancy 31 December 2012 26 7. 6-Men, The property comprises a commercial The property is No Commercial Value No.34-1 Weigong unit within a 2-storey commercial occupied by the Group South Street, podium completed in about 2009 . as office Tiexi District, Shenyang City, The gross floor area of the property is Liaoning Province, approximately 203.37 square metres. the PRC The property is held by the Group under a tenancy for a term commencing on 1 October 2012 and expiring on 30 September 2016 at a annual rent of RMB 130,000 exclusive of management fee, water and electricity charges .

Note:

Pursuant to a tenancy agreement entered into between Shenyang Shengang Pengcheng Automotive Development Co., Ltd.（沈陽深港鵬城汽車發展有限公司）and Sun Xiao Nan（孫曉楠）, Shenyang Shengang Pengcheng Automotive Development Co., Ltd., which is a 70 %-owned subsidiary of the Company, rented the property from Sun Xiao Nan which is an independent third party for a term commencing on 1 October 2012 and expiring on 30 September 2016 at a annual rent of RMB 130,000 exclusive of management fee, water and electricity charges .
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between Sun Xiao Nan and Shenyang Shengang Pengcheng Automotive Development Co., Ltd. as tenant, the property was leased to Shenyang Shengang Pengcheng Automotive Development Co., Ltd. for a term of commencing on 1 October 2012 and expiring on 30 September 2016; and
ii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties.

IV – 402

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

26 8. Level 1 of 2-Men and The property comprises a commercial Level 2 of 1-Men unit on Level 1 and 2 of a 2-storey No.34-1 Weigong commercial podium completed in South Street, about 2009 . Tiexi District, Shenyang City The gross floor area of the property is Liaoning Province approximately 300 square metres. the PRC
The property is No Commercial Value occupied by the Group as office.

The property is held by the Group under a tenancy for a term of 5 years commencing on 1 June 2011 and expiring on 31 May 2016 at a annual rent of RMB300,000 exclusive of management fee, water and electricity charges .

Notes:

Pursuant to a tenancy agreement entered into between Shenyang Shengang Pengcheng Automotive Development Co., Ltd.（沈陽深港鵬城汽車發展有限公司）and Tian Ming Jiang（田明江）, Shenyang Shengang Pengcheng Automotive Development Co., Ltd., which is a 80 %-owned subsidiary of the Company, rented the property from Tian Ming Jiang（田明江）which is an independent third party for a term of 5 years commencing on 1 June 2011 and expiring on 31 May 2016 at a annual rent of RMB300,000 exclusive of management fee, water and electricity charges .
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between Tian Ming Jiang and Shenyang Shengang Pengcheng Automotive Development Co., Ltd . as tenant, the property was leased to Shenyang Shengang Pengcheng Automotive Development Co., Ltd . for a term of 5 years commencing on 1 June 2011 and expiring on 31 May 2016 at a annual rent of RMB300,000.–; and
ii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties.

IV – 403

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

26 9. Unit 4-6-1, No. 9 Leshixiang, Dainan Street, Shenhe District, Shenyang City, Liaoning Province, the PRC

The property comprises a residential unit within 7-storey residential building completed in about 1988.

The gross floor area of the property is 46.6 square metres.

The property is No Commercial Value occupied by the Group as staff quarter.

The property is held by the Group

（遼寧省瀋陽市沈河區

under a tenancy for a term of

大南街勒石巷9號4-6-1） commencing on 9 December 2012 and expiring on 9 June 2013 at a monthly rent of RMB 2,068 exclusive of management fee, water and electricity charges.

Notes:

Pursuant to a tenancy agreement entered into between Shenyang Wuai Shumkang Company Limited（瀋陽五愛深港客貨總站（有限公司））and Tian Shu Qin（田淑琴）, Shenyang Wuai Shumkang Company Limited, which is owned as to 46.9 % by the Company, rented the property from Tian Shu Qin which is an independent third party for a term commencing on 9 December 2012 and expiring on 9 June 2013 at a monthly rent of RMB 2,068 exclusive of management fee, water and electricity charges.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between Tian Shu Qin（田淑琴）and Shenyang Wuai Shumkang Company Limited as tenant, the property was leased to Shenyang Wuai Shumkang Company Limited for a term commencing on 9 December 2012 and expiring on 9 June 2013 ;
ii. The lessor is unable to provide the relevant title documents of the property to prove the legal title of the property. If the lessor does not hold the legal title of the property, the aforesaid tenancy agreement may be void and the lessee may have to move out from the property; and
iii. The lessee is unable to provide the registration document of the aforesaid tenancy.

IV – 404

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 70. No. 21-5 Wenyi Road, The property comprises a residential Shenhe District, unit within a 32-storey residential Shenyang City, building completed in about 2004. Liaoning Province, the PRC
- The gross floor area of the property is 73.5 square metres.
（遼寧省瀋陽市沈河區文藝路21-5號）

The property is held by the Group under a tenancy for a term of commencing on 1 January 2013 and expiring on 30 June 2013 at a monthly rent of RMB 5,100 exclusive of management fee, water and electricity charges.

The property is No Commercial Value occupied by the Group as staff quarter.

Notes:

Pursuant to a tenancy agreement dated 30 December 2012, Shenyang Wuai Shumkang Company Limited（瀋陽五愛深港客貨總站（有限公司））, which is owned as to 46.9 % by the Company, rented the property from Ma Jin Sheng（馬金生）which is an independent third party for a term commencing on 1 January 2013 and expiring on 30 June 2013 at a monthly rent of RMB 5,100 exclusive of management fee, water and electricity charges.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between Ma Jin Sheng（馬金生）and Shenyang Wuai Shumkang Company Limited as tenant, the property was leased to Shenyang Wuai Shumkang Company Limited for a term commencing on 1 January 2013 and expiring on 30 June 2013 ;
ii. The lessor is unable to provide the relevant title documents of the property to prove the legal title of the property. If the lessor does not hold the legal title of the property, the aforesaid tenancy agreement may be void and the lessee may have to move out from the property; and
iii. The lessee is unable to provide the registration document of the aforesaid tenancy.

IV – 405

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 71 Building on No.1 The property comprises a single Jingwei 1st Road storey building erected in 2007. （經緯一路）, Taihe County, The gross floor area of the property is Jian City, of 613 square metres. Jiangxi Province, the PRC. The property is held by the Enlarged Group under a tenancy agreement for a term expiring on 31 December 2013 at a current monthly rent of RMB 5,950.

The property is No Commercial Value currently occupied by the Enlarged Group for

office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 泰安地產, an independent third party, and 江西深港交通運輸有限公司, which is owned as to 40.8% by the Company, the latter rented the property from the former at a current monthly rent of RMB 5,950 for the terms both expiring on 31 December 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 泰安地產 and 江西深港交通運輸有限公司as tenant, the property was leased to 江西深港交通運輸有限公司 for a term commencing on 1 March 2010 and expiring on 31 December 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 406

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 72. Units 205-208 on 2nd The property comprises office Floor and 5th Floor of premises on 2nd floor and 5th floor of Zone E and Unit 22, a office building completed in 1990’s. Yinlong Jundu Office Building The total gross floor area of the
（銀龍俊都辦公樓） property is 1,380 square metres. No.31 Longong Road
（龍公路） The property is held by the Enlarged Buji Street Group under a tenancy agreement for Longgang District, the term both expiring on 30 August Shenzhen, 2022 at a total current monthly rent of the PRC. RMB24,847.20.

The property is No Commercial Value currently occupied by the Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 深圳市銀龍物流發展有限公司, an independent third party, and 深圳港龍運輸實業有限公司, a wholly-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB24,847.20 for the term expiring on 30 August 2022.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 深圳市銀龍物流發展有限公司 and 深圳港龍運輸實業有限公司 as tenant, the property was leased to 深圳港龍運輸實業有限公司 for a term expiring on 30 August 2022;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 407

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

27 3. Levels, 3 to 6 The property comprises a residential Shang Yang Fujing premises on levels 3 to 6 of a 6-storey Estate（上楊福景小區） residential building completed in Daya Wan Xi District 2004.
（大亞灣西區） Huizhou City（惠州市） The total gross floor area of the Guangdong Province property is of 692.24 square metres. the PRC

The property is No Commercial Value occupied by the Enlarged Group as office purpose.

The property is held by the Enlarged Group under a tenancy for a term commencing on 1 September 2012 and expiring on 31 December 2015 at a current monthly rent of RMB 4,000 exclusive of management fee, water and electricity charges.

Notes:

Pursuant to the Tenancy Agreement entered into between 惠州惠深房地產開發有限公司, an independent third party, and 惠州大亞灣深港三維交通實業有限公司, a 80 %-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 4,000 for a term commencing on 1 September 2012 and expiring on 31 December 2015.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 惠州惠深房地產開發有限公司 and 惠州大亞灣深港三維交通實業有限公司 as tenant, the property was leased to 惠州大亞灣深港三維交通實業有限公司 for a term commencing on 1 September 2012 and expiring on 31 December 2015;
ii. The property is held by 惠州惠深房地產開發有限公司; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 408

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

27 4. Land on Xicha Road The property comprises a parcel of （西槎路） land with an area of 4,784 square Guangzhou City, metres area. Guangdong Province, the PRC. The property is held by the Enlarged Group under a tenancy agreement for a term commencing on 1 June 2007 and expiring on 30 May 2015 at a current monthly rent of RMB 38,272.exclusive managment fee.

The property is No Commercial Value currently occupied by the Enlarged Group for car parking purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 廣州市同粵實業有限公司 (an independent third party) and 廣州市南方高速客運有限公司, a 39.2%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB 38,272.- for a term commencing on 1 June 2007 and expiring on 30 May 2015.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i Pursuant to a tenancy agreement entered into between 廣州市同粵實業有限公司 and 廣州市南方高速客運有限公司 as tenant, the property was leased to 廣州市南方高速客運有限公司 for a term commencing on 1 June 2007 and expiring on 30 May 2015; and
ii In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right.

IV – 409

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Taifu Logistics Group Holdings Co., Ltd.

Property

Description and tenure

Particulars of

occupancy

Market value in existing state as at 31 December 2012

27 5 . 23rd Floor Shum Yip Centre, Shennan Zhong Road, Luohu District, Shenzhen, the PRC.

The property is currently occupied by the Group as an office.

No Commercial Value

The gross floor area of the property is 1,518.50 square metres.

The property is held by the Group under a tenancy agreement for a term expiring on 10 June 2012 at a current monthly rent of RMB83,517.5 inclusive management fee

Notes:

Pursuant to the Tenancy Agreement with its Renewal Agreement entered into between Shum Yip Holdings Company Limited, the holding company of the Company, and Shum Yip Taifu Logistics Group Holdings Co., Ltd., a 95.3745%-owned subsidiary of the Company, dated 11 June 2009 and 21 September 2010 respectively, the latter rented the property from the former at a current monthly rent of RMB83,517.5 for a term expiring on 10 June 2012.
As stipulated in the Building and Land Ownership Certificates , the property held by Shum Yip Holdings Company Limited.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.

IV – 410

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between Shum Yip Holdings Company Limited and Shum Yip Taifu Logistics Group Holdings Co., Ltd. as tenant, the property was leased to Shum Yip Taifu Logistics Group Holdings Co., Ltd. for a term expiring on 10 June 2012;
ii. the leasing registration of the tenancy agreement as mentioned in noted 1 above has not been completed; and
iii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties.

IV – 411

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Shum Yip Terra (Holdings) Co., Ltd.

				Market value in
			Particulars of	existing state as at
	Property	Description and tenure	occupancy	31 December 2012
27 6.	Unit 1-95 on 16th Floor	The property comprises a residential	The property is	No Commercial Value
	of Block 3 Xing Fu Jia Yuan （幸福家園）	unit on 16th floor of a 28-storey residential building completed in 2009.	currently occupied by the Group for dormitory purpose.
	Xing He Wan Estate
	（星河灣）	The gross floor area of the property is
	Chengdu City	99.97 square metres.
	Sichuan Province
	the PRC.	The property is held by the Group
		under a tenancy agreement for a term
		of two years commencing on 1 July
		2012 and expiring on 31 December
		2012 at a current monthly rent of
		RMB1,200.–.

Notes:

Pursuant to the Tenancy Agreement entered into between 駱艷梅, an independent third party, and Chengdu Yihu Investment Co., Ltd.（成都怡湖投資有限公司）, a 75%-owned subsidiary of the Company, dated 1 July 2010, the latter rented the property from the former at a current monthly rent of RMB1,250.– for a term of two years commencing on 1 July 2012 and expiring on 31 December 2012.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 駱豔梅 (as a trustee) and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 1 July 2012 and expiring on 1 January 2013;
ii. The property is held by 駱豔梅 with 50% interests;
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties and
iv. Up to the Latest Practicable Date, 駱豔梅 has not obtained the authorization from the coowner of the property. 成都市深業泰然房地產開發有限公司 will not be require to relocate subject to obtained such authorization .

IV – 412

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

27 7. Unit 1-7 on 4th Floor The property comprises a residential of Block 2 unit on 4th floor of a 6-storey Yi Jing Yang Guang residential building completed in
（怡景陽光） 2008. No.280 Shi Jia Nian Dong Road The gross floor area of the property is Qing Bai Jiang District 119.60 square metres. Chengdu City Sichuan Province The property is held by the Group the PRC. under a tenancy agreement for a term of one year commencing on 1 April 2012 and expiring on 31 March 2013 at a current quarterly rent of RMB1,200.–.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 馮建國, an independent third party, and Chengdu Yihu Investment Co., Ltd.（成都怡湖投資有限公司）, a 75%-owned subsidiary of the Company, the latter rented the property from the former at a current quarterly rent of RMB1,200.– for a term of two years commencing on 1 April 2012 and expiring on 31 March 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 馮建國 (as a trustee) and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 1 April 2012 and expiring on 1 March 2013;
ii. The property is held by 馮建國 as a coowner;
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties and
iv. Up to the Latest Practicable Date, 馮建國 has not obtained the authorization from the coowner of the property. 成都市深業泰然房地產開發有限公司 will not be require to relocate subject to obtained such authorization .

IV – 413

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

27 8. Unit 10 on 5th Floor The property comprises a residential Block 1-3 unit on 5th floor of a 5-storey Shu Xiang Yuan residential building completed in
（書香院） 2007. No.95 Shi Jia Nian Dong Road The gross floor area of the property is Qing Bai Jiang District 119.28 square metres. Chengdu City Sichuan Province The property is held by the Group the PRC. under a tenancy agreement for a term of one year commencing on 21 November 2011 and expiring on 20 November 2013 at a current monthly rent of RMB1,200.–.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 張友莉, an independent third party, and Chengdu Yihu Investment Co., Ltd.（成都怡湖投資有限公司）, a 75%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,200.– for a term of one year commencing on 21 November 2011 and expiring on 20 November 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 張友莉 and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 21 November 2011 and expiring on 20 November 2013;
ii. The property is held by 張友莉; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 414

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

27 9. Unit 131 on 22nd Floor The property comprises a residential of Block 2-1 unit on 22nd floor of a 28-storey Phase 3 residential building completed in Xing Fu Jia Yuan 2007.
（幸福家園） Xing He Wan Estate The gross floor area of the property is
（星河灣） 99.80 square metres. Chengdu City Sichuan Province The property is held by the Group the PRC. under a tenancy agreement for the term commencing on 7 August 2012 and expiring on 6 February 2013 at a current monthly rent of RMB1,250.–.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 譚青雲, an independent third party, and Chengdu Yihu Investment Co., Ltd.（成都怡湖投資有限公司）, a 75%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,250.– for the term commencing on 7 August 2012 and expiring on 6 February 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 譚清雲 and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 7 August 2012 and expiring on 6 February 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 415

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 80. Unit 8 of Block 4-3 The property comprises a residential Shu Xiang Yuan unit of a 5-storey residential building （書香院） completed in 2007. No.95 Shi Jia Nian Dong Road The gross floor area of the property is Qing Bai Jiang District 108.90 square metres. Chengdu City Sichuan Province The property is held by the Group the PRC. under a tenancy agreement for a term of two years commencing on 1 December 2011 and expiring on 30 November 2013 at a current quarterly rent of RMB2,656.25.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 黎曉玲, an independent third party, and Chengdu Yihu Investment Co., Ltd.（成都怡湖投資有限公司）, a 75%-owned subsidiary of the Company, dated 18 November 2009, the latter rented the property from the former at a current quarterly rent of RMB2,656.25 for a term of two years commencing on 1 December 2011 and expiring on 30 November 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 黎曉玲 and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 1 December 2011 and expiring on 30 November 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 416

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 81. Unit 4 on 2nd Floor The property comprises a residential Block 1-3 unit on 5th floor of a 5-storey Phase 2 residential building completed in Shu Xiang Yuan 2006. （書香院） No.95 Shi Jia Nian Dong The gross floor area of the property is Road 101.35 square metres. Qing Bai Jiang District Chengdu City The property is held by the Group Sichuan Province under a tenancy agreement for a term the PRC. of two years commencing on 2 March 2012 and expiring on 1 March 2014 at a current monthly rent of RMB1,200.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 刁正仕, an independent third party, and Chengdu Yihu Investment Co., Ltd.（成都怡湖投資有限公司）, a 75%-owned subsidiary of the Company, dated 2 March 2010, the latter rented the property from the former at a current monthly rent of RMB1,200 for a term of two years commencing on 2 March 2012 and expiring on 1 March 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 刁正仕 and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 2 March 2012 and expiring on 1 March 2014;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 417

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 82. Unit 509 on 5th Floor The property comprises a residential of Block 11-1 unit on 5th floor of a 6-storey Shui Yun Jian residential building completed in
（水雲間） 2007. Xing Fu Jia Yuan
（幸福家園） The gross floor area of the property is Xing He Wan Estate 101.14 square metres.
（星河灣） Chengdu City The property is held by the Group Sichuan Province under a tenancy agreement for a the PRC. term of one year commencing on 11 August 2012 and expiring on 11 August 2013 at a current monthly rent of RMB1,250.–.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 譚清明, an independent third party, and Chengdu Yihu Investment Co., Ltd.（成都怡湖投資有限公司）, a 75%-owned subsidiary of the Company, the latter rented the property from the former at a current monthly rent of RMB1,250.– for a term of one year commencing on 11 August 2012 and expiring on 11 August 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 譚清明 and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 11 August 2012 and expiring on 10 February 2013;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 418

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

28 3. Level 17, The property comprises office Office Building premises on level 17 of a 25-storey Phase 2 office building completed in 2000. Wuhan Science and Technology The gross floor area of the property is Convention Centre 370.00 square metres. No.546 Luo Yu Road Donghu High-Tech The property is held by the Group Development Zone under a tenancy agreement for a term Wuhan City of 2 years commencing on 1 January Hubei Province 2011 and expiring on 31 December the PRC. 2013 at a current annual rent of RMB128,760.– exclusive managment fee.

The gross floor area of the property is 370.00 square metres.

The property is No Commercial Value currently occupied by the Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 武漢市東湖開發區辦公事務服務中心, an independent third party, and Wuhan Terra Property Development Co., Ltd.（武漢市泰然房地產開發有限公司）, a 75%-owned subsidiary of the Company, dated 10 September 2010, the latter rented the property from the former at a current annual rent of RMB128,760.– for a term 2 years commencing on 1 January 2011 and expiring on 31 December 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 武漢市東湖開發區辦公事務服務中心 and Wuhan Terra Property Development Co., Ltd. as tenant, the property was leased to Wuhan Terra Property Development Co., Ltd. for a term of 2 years commencing on 1 January 2011 and expiring on 31 December 2013 at a current annual rent of RMB128,760-; and
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right.

IV – 419

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

28 4. Level 3of Block 9 The property comprises an office unit No.95-1 Shi Jia Nian on 3rd floor of a 4-storey commercial Dong Road building completed in 2007.
（石家碾東路）

The property is No Commercial Value currently occupied by the Enlarged Group for office purpose.

Qing Bai Jiang District The gross floor area of the property is Chengdu City 479.76 square metres. Sichuan Province the PRC. The property is held by the Enlarged Group under a tenancy agreement for a term of three years commencing on 20 January 2011 and expiring on 19 January 2014 at a current monthly rent of RMB9,595-.

Notes:

Pursuant to the Tenancy Agreement entered into between 余若瑜, an independent third party, and 成都市深業泰然房地產開發有限公司, a 75%-owned subsidiary of the Company, dated 8 December 2010, the latter rented the property from the former at a current monthly rent of RMB9,595– for a term of three years commencing on 20 January 2011 and expiring on 19 January 2014.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 余若瑜 and 成都市深業泰然房地產開發有限公司 as tenant, the property was leased to 成都市深業泰然房地產開發有限公司 for a term commencing on 20 January 2011 and expiring on 19 January 2014;
ii. As stipulated in the Building and Land Ownership Certificate, the property is held by 余若瑜; and
iii. Although the aforesaid tenancy agreement has not registered, it has been executed by both parties is valid and legally binding to both parties.

IV – 420

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

28 5. Units B204, B205 and The property comprises three B216 on 2nd Floor residential units on 2nd floor of Block B, Terra Quarter a 7-storey dormitory building Che Gong Miao completed in 1994. Industrial Zone, Futian District, The total gross floor area of the Shenzhen, property is 95.86 square metres. the PRC.

The property is No Commercial Value currently occupied by the Group for dormitory purpose.

The property is held by the Group under a tenancy agreement for a term of 3 years commencing on 1 April 2011 and expiring on 31 March 2014 at a current monthly rent of RMB4,299.75 exclusive managment fee.

Notes:

Pursuant to the Tenancy Agreement entered into between 張永春, an independent third party, and Shenzhen Terra Property Management Service Co., Ltd.（深圳市泰然物業管理服務有限公司）, a 75%-owned subsidiary of the Company, dated 1 April 2011, the latter rented the property from the former at a current monthly rent of RMB4,299.75 for a term 3 years commencing on 1 April 2011 and expiring on 31 March 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 張永春 and Shenzhen Terra Property Management Service Co., Ltd. as tenant, the property was leased to Shenzhen Terra Property Management Service Co., Ltd. for a term commencing on 1 April 2011 and expiring on 31 March 2014; and
ii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties.

IV – 421

APPENDIX IV

VALUATION REPORT ON THE PROPERTY

INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

28 6. Units B214, B215 and The property comprises three B217 on 2nd Floor residential units on 2nd floor of Block B, Terra Quarter a 7-storey dormitory building Che Gong Miao completed in 1994. Industrial Zone, Futian District, The total gross floor area of the Shenzhen, property is 94.65 square metres. the PRC.

The property is currently occupied by the Group for dormitory purpose.

No Commercial Value

Notes:

Pursuant to the Tenancy Agreement entered into between 王豔紅, an independent third party, and Shenzhen Terra Property Management Service Co., Ltd.（深圳市泰然物業管理服務有限公司）, a 75%-owned subsidiary of the Company, dated 1 April 2011, the latter rented the property from the former at a current monthly rent of RMB4,299.75 for a term 3 years commencing on 1 April 2011 and expiring on 31 March 2014.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 王豔紅 and Shenzhen Terra Property Management Service Co., Ltd. as tenant, the property was leased to Shenzhen Terra Property Management Service Co., Ltd. for a term commencing on 1 April 2011 and expiring on 31 March 2014; and
ii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties.

IV – 422

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 30 September 2012

28 7. Units 526-529 on 5th Floor, Block B1 Innovative Base Guanggu Biology City
（光谷生物城）
No.666 Gaoxin Avenue
The property comprises office premises on 5th floor of an office building completed in 2000’s.
The gross floor area of the property is 593.87 square metres.

The property is No Commercial Value currently occupied by the Enlarged Group for office purpose.

（高新大道） Donghu New-Tech The property is held by the Enlarged Development Zone Group under a tenancy agreement
（東湖新技術開發區） on monthly basis at a current annual Wuhan City rent of RMB 160,000.– exclusive Hubei Province managment fee. the PRC.

Notes:

Pursuant to the Tenancy Agreement entered into between 武漢國家生物產業創新基地有限公司, an independent third party, and 湖北省科技投資集團有限公司泰然生物谷分公司, a 52.5%-owned subsidiary of the Company, the latter rented the property from the former at a current annual rent of RMB 160,000.– on monthly basis.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 武漢市東湖開發區辦公事務服務中心 and 武漢市泰然房地產開發有限公司 as tenant, the property was leased to 武漢市泰然房地產開發有限公司 on monthly basis;
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 423

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

28 8. No.12 of Block 1 and The property comprises industrial No.15 of Block 2 premises of a 2-storey industrial No.11 Mu Shu Ling building and dormitory premises Industrial Area of a 2-storey dormitory building Liguang Community completed in 1990’s. Guanlan Town Baoan District, The total gross floor area of the Shenzhen, property is 2,440.00 square metres. the PRC.

The property is No Commercial Value currently occupied by the Group for industrial and dormitory purposes.

The property is held by the Group under a tenancy agreement for a term commencing on 10 August 2010 and expiring on 11 October 2016 at a current monthly rent of RMB43,000.– exclusive managment fee.

Notes:

Pursuant to the Tenancy Agreement entered into between 魏鳳林, an independent third party, and 深圳市泰然鋁合金工程有限公司, a 75%-owned subsidiary of the Company, dated 10 August 2010, the latter rented the property from the former at a current monthly rent of RMB43,000.– for a term commencing on 10 August 2010 and expiring on 11 October 2016.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 魏鳳林 and 深圳市泰然鋁合金工程有限公司 (now known as Shenzhen Terra Construction Co., Ltd.（深圳市泰然建設工程有限公司）as tenant, the property was leased to 深圳市泰然鋁合金工程有限公司 for a term commencing on 10 August 2010 and expiring on 11 October 2016; and
ii. In the absence of title certificate, the legal advisers as to the PRC laws is unable to ascertain whether the lessor has the right to lease out the property and whether the property is subject to an encumbrance or third party’s right.

IV – 424

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

28 9. Unit 4-23 of Block 2 Jintian Commercial Centre
（錦天商業中心）
The property comprises an office unit on level 4 of an office building completed in 2000’s.
No.126 Wenti Road The gross floor area of the property is
（文體路） 54.17 square metres. Da Du Kou District,
（大渡口區） The property is held by the Enlarged Chongqing City, Group under a tenancy agreement the PRC. for a term commencing on 7 January 2012 and expiring on 6 January 2013 at a current monthly rent of RMB1,400-.
The gross floor area of the property is 54.17 square metres.

The property is No Commercial Value currently occupied by the Enlarged Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 冉光麗 (Party A), an independent third party, and 重慶天安數碼城有限公司, which is owned as to 37.5% by subsidiary of the Company, the Party B rented the property from the Party A at a current monthly rent of RMB1,400.– for a term commencing on 7 January 2012 and expiring on 6 January 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 冉光麗 and 重慶市天安數碼城有限公司 as tenant, the property was leased to 重慶市天安數碼城有限公司 for a term commencing on 7 January 2012 and expiring on 6 January 2013 at a current monthly rent of RMB1,400-; and
ii. The property is held by 冉光麗 and 杜小林; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 425

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 90. Unit 4-26 of East Tower The property comprises an office Jintian Commercial unit on level 4 of an office building Centre completed in 2000’s.
（錦天商業中心） No.126 Wenti Road The gross floor area of the property is
（文體路） 54.17 square metres. Da Du Kou District,
（大渡口區） The property is held by the Enlarged Chongqing City, Group under a tenancy agreement for the PRC. a term commencing on 11 January 2012 and expiring on 10 January 2013 at a current monthly rent of RMB1,272-.

The property is No Commercial Value currently occupied by the Enlarged Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 熊瑞 (Party A), an independent third party, and 重慶天安數碼城有限公司, which is owned as to 37.5% by the Company, the Party B rented the property from the Party A at a current monthly rent of RMB1,272.– for a term commencing on 11 January 2012 and expiring on 10 January 2013.
As the property interests of the property are held by the Enlarged Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. Pursuant to a tenancy agreement entered into between 熊瑞 and 重慶市天安數碼城有限公司 as tenant, the property was leased to 重慶市天安數碼城有限公司 for a term commencing on 11 January 2012 and expiring on 10 January 2013;
ii. The property is held by 熊瑞; and
iii. Although the tenancy agreement has not been registered, it is valid and has been executed by both parties and legally binding to both parties .

IV – 426

APPENDIX IV

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE GROUP

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 December 2012

2 91. 5th Floor of No.23 Fengze Road
（豐澤路）, Zhangjiawo Industrial Area
The property comprises a office premises on 5th floor of a 5-storey building completed in 2008.
The gross floor area of the property is 1,005 square metres.

（張家窩工業園區）, 1,005 square metres. Zhangjiawo Town, Xiqing District, The property is held by the Group Tianjin City, under a tenancy agreement for a the PRC. term of 3 years and six months commencing on 1 June 2010 and expiring on 1 December 2013 at a current monthly rent of RMB48,000.

The property is No Commercial Value currently occupied by the Group for office purpose.

Notes:

Pursuant to the Tenancy Agreement entered into between 天津宏澤園科工貿有限公司, an independent third party, and Tianjin Tianan Cyber Park Co., Ltd.（天津天安數碼城有限公司）, which is owned as to 37.5% by the Company, the latter rented the property from the former at a current monthly rent of RMB48,000.– for a term of 3 years and six months commencing on 1 June 2010 and expiring on 1 December 2013.
As the property interests of the property are held by the Group under leasehold interest, we have ascribed no commercial value to the property.
We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal advisers, which contains, inter alia, the followings:
i. The property is held by 天津宏澤園科工貿有限公司.
ii. Pursuant to a tenancy agreement entered into between 天津宏澤園科工貿有限公司 and Tianjin Tianan Cyber Park Co., Ltd. as tenant, the property was leased to Tianjin Tianan Cyber Park Co., Ltd. for a term of 2 years commencing on 1 July 2010 and expiring on 30 June 2012;
iii. The tenancy agreement which has been executed by both parties is valid and legally binding to both parties; and
iv. The leasing registration of the tenancy agreement as mentioned in noted 1 above has been completed .

IV – 427

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

APPENDIX V

��

Rm 901, 9/F., On Hong Commercial Building 145 Hennessy Road, Wanchai, Hong Kong ��145 � ��9 ��901 � Tel : (852) 2529 9448 Fax : (852) 3521 9591

28 March 2013

The Board of Directors

Shenzhen Investment Ltd.

8th Floor, New East Ocean Centre No.9 Science Museum Road Tsimshatsui East, Kowloon Hong Kong

Dear Sirs,

Re: Valuation of various properties in the People’s Republic of China (the “PRC”)

In accordance with the instructions from Shenzhen Investment Ltd. (the “ Company ”) to value the property interests (the “ Properties ”) of Shenzhen Silicon Valley Hi-tech Investment Company Ltd.（深圳硅谷投資有限公司, the “ Target Company ”）or its subsidiaries (hereinafter together referred to as the “ Target Group ”) in the PRC, we confirm that we have inspected the Properties, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the Properties as at 31 December 2012 (the “ date of valuation ”).

BASIS OF VALUATION

Our valuation of the Properties represents the market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion”.

V – 1

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

APPENDIX V

TITLESHIP

We have been provided with copies of legal documents regarding the Properties. We have also relied upon the legal opinion provided by the PRC legal advisers, namely King & Wood Mallesons (the “ PRC Legal Opinion ”), to the Company on the relevant laws and regulations in the PRC, on the nature of the owners’ land use rights or leasehold interests in the Propert ies and the existence of any encumbrances that would affect their ownership. Its material content has been summarized in the valuation certificate attached herewith.

VALUATION METHODOLOGY

The Properties numbered 3 and 4 which are rented by the Target Group have no commercial value due either to the short-term nature of the leasehold interest or the prohibition against assignment or sub-letting or otherwise due to the lack of substantial profit rents.

ASSUMPTIONS

Our valuation has been made on the assumption that the owner sells the Properties 1 and 2 on the market without the benefit of deferred terms contracts, leaseback, joint ventures, management agreements or any similar arrangement which would serve to affect the value of the Properties.

As Properties numbered 1 and 2 are held by the owner by means of long term Land Use Rights granted by the PRC Government (the “ Government ”), we have assumed that the owner has free and uninterrupted rights to use the properties for the whole of the respective unexpired terms of the land use rights.

Other special assumptions for our valuation (if any) would be stated out in the footnotes of the valuation certificate attached herewith.

V – 2

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

APPENDIX V

LIMITING CONDITIONS

We have relied to a very considerable extent on the information given by the Company or the Target Group and have accepted advice given to us on such matters as tenure, planning approvals, statutory notices, easements, particulars of occupancy, tenancy and all other relevant matters.

We have not carried out detailed site measurements to verify the correctness of the site and floor areas in respect of the Properties but have assumed that the floor areas shown on the documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations.

The Properties was last inspected by Tse Wai Leung on 10 January 2013. We have inspected the exterior and, where possible, the interior of the Properties. However, no structural survey has been made for them. In the course of our inspection, we did not note any apparent defects. We are not, however, able to report whether the buildings and structures inspected by us are free of rot, infestation or any structural defect. No test was carried out on any of the building services and equipment.

V – 3

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

For the Properties located in the PRC under Group I to Group II (being properties under development and held for self occupation), we have been advised by the Group that the potential tax liabilities include Land Appreciation Tax at progressive tax rates from 30% to 60%, Business Tax at 5% of sales amount, related surcharge at 11% of Business Tax, and Income Tax at 25% on profit before tax. The exact amount of tax payable upon realization of the relevant properties in the PRC will be subject to the formal tax advice issued by the relevant tax authorities at the time of disposal of relevant properties upon presentation of the relevant transaction documents. The likelihood of the relevant tax liability (arising from the disposal of the Properties at consideration equal to the valuation amount) being crystallized is remote as the Group has no detail planning for the disposal of such properties yet.

All monetary sums stated in this report are in Renminbi (RMB).

Our summary of valuation and valuation certificate are attached herewith.

Yours faithfully, for and on behalf of

Asset Appraisal Limited

Tse Wai Leung

MFin MRICS MHKIS RPS(GP)

Director

V – 4

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

SUMMARY OF VALUATION

					Value of
				Interest	property interest
		Market value		attributable	attributable to
		in existing		to the Target	the Target
		state	as at	Group as at	Group as at
		31 December		31 December	31 December
	Property		2012	2012	2012
		RMB		%	RMB
Group	I – Property interest held by the Target Group under development
1.	Lot No. B307-0018 at junction of	10,300,000,000		100 %	10,300,000,000
	Caitian Road and Sungang Road
	Futian District
	Shenzhen City,
	Guangdong Province,
	the PRC

Group II – Property interest to be acquired by the Target Group (subject to the approval of the Independent Shareholders at the EGM)

2.	Unit No. 5F03 on Level 5, Unit Nos. 6A01,	272,400,000	100 %	272,400,000
	6F01 and 6F02 on Level 6, Unit Nos. 7F01 and
	7F02 on Level 7 and Unit No. 8F01 on Level 8,
	Terra Building,
	Binhe Da Road,
	Futian District,
	Shenzhen City,
	Guangdong Province,
	the PRC

Group III – Properties rented by the Target Group

3. Level 5 to 7 Block No. 1 Star Garden No. 5003 Huanggang Road Futian District Shenzhen City, Guangdong Province, the PRC 4. Unit Nos. B2301, B2401 and B2501 Haisong Building Tairan 9th Road Che Gong Miao Industrial Zone, Futian District, Shenzhen, the PRC Grand-total:	No commercial value 100 % No commercial value 100 % 10,572,400,000	No commercial value No commercial value
		10,572,400,000

V – 5

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

VALUATION CERTIFICATE

Group I – Property interest held by the Target Group under development

Property Description and tenure
1. Lot No. B307-0018 The property comprises a parcel at junction of of land situated with a total area Caitian Road and of approximately 121,225.1 square Sungang Road metres which is subdivided into the Futian District Northern Portion and the Southern Shenzhen City, Portion with respective areas of 25,105 Guangdong Province, square metres and 96,120.1 square the PRC metres.

Particulars of occupancy The property is currently vacant.

Market Value in Existing State as at 31 December 2012 RMB 10,300,000,000 100% interest attributable to the Target Group: 10,300,000,000

The Northern Portion of the subject site is planned to be developed into 4 blocks of apartment tower with a total gross floor area of approximately 170,720 square metres which is broken down into the followings:

Property Apartment Other	Planned GFA (sq.m.) 168,790 1,930 170,720

V – 6

APPENDIX V

Property

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

Market Value in Existing State as at 31 December 2012 RMB

Particulars of occupancy

Description and tenure

The Southern Portion of the subject site is planned to be developed into a retail/hotel/research and development ( “ R&D ”) compound with a total gross floor area (GFA) of 65 0,190 square metres which is broken down into the followings:

Property Retail Retail(Basement) Hotel R&D unit Other	Planned GFA (sq.m.) 135,000 32,000 50,000 432,760 430 650,190

In addition, a total of 5,400 car parking spaces shall be provided in the basement of the subject development.

Construction work for the Northern Portion of the subject site has commenced on the valuation date and the apartment towers are scheduled for completion by end of 2014.

The land use rights of the property have been granted for a term of 50 years commencing on 29 August 2012 and expiring on 28 August 2062 for retail/hotel/R&D/apartment uses.

V – 7

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

Notes:

Pursuant to the State-Owned Land Use Right Grant Contract (Ref: Shen Di He Zi (2012) No. 6015) dated 19 September 2012 and the First Supplemental Land Use Right Granting Contract dated 19 November 2012, the land use rights of the Property (Lot No. B307-0018) with a land area of 121,255.10 square metres were granted by the Town Planning and Land Resources Committee No. 1 Administration Bureau（深圳市規劃和國土資源委員會第一直屬管理局）to Shenzhen Kezhigu Investment Co., Ltd. 深圳市科之谷投資有限公司 (“ PRC Co 2 ”) (an indirect wholly-owned subsidiary of the Target Company) for a land use right term of 50 years commencing on 29 August 2012 and expiring on 28 August 2062 for retail/hotel/office/apartment uses at a land premium of RMB1,564,699,550 which has been settled in full. As provided in the said State-Owned Land Use Right Grant Contract, the subject land parcel is subject to the following material land use conditions:

Land use : retail/hotel/R&D/apartment uses Plot Ratio : not more than 6.5 times Site Coverage : not more than 90% Building Covenant : on or before 29 August 2017

A Land Use Right Certificate (Ref. Shen Fang Di Zhi No. 3000704544) registered on 21 December 2012 was issued in the name of PRC Co 2.
The Target Company was incorporated in the BVI of which the entire issue share capital is held by Shum Yip Holdings Company Limited. Pursuant to an acquisition agreement entered into between Shum Yip Holdings Company Limited (referred to as the “ Vendor ”) and the Company (referred to as the “ Purchaser ”) on 17 January 2013 (the “ Acquisition Agreement ”), the Vendor has agreed to sell and the Purchaser has agreed to purchase the entire issue share capital of the Target Company (the “ Acquisition ”).
The land use rights of the Property have been granted at concessionary land premium and are subject to alienation restriction. All apartment units with a total GFA of 168,790 square metres are non-transferrable unless additional land premium (being the difference between assessed market land price and the land premium already paid to the Government) is settled. As confirmed by the Company, the apartment units shall be launched on the market for sale in due course. The estimated amount of land premium payable to the Government for the relief of the alienation restriction of the apartment units is RMB2,000,000,000 and the Vendor has agreed under the Acquisition Agreement to indemnify the Purchaser for any land premium payment payable by PRC Co 2 to the Government beyond RMB2,000,000,000 .
Out of the total GFA of 432,760 square metres of R&D units of the subject development, 302,932 square metres can be freely transferred on the market subject to no additional land premium payment, 90,382 square metres are non-transferrable and 39,446 square metres shall be bought back by the Government at costs.
As confirmed by the Company, the retail portion and the hotel portion of the subject development shall be retained by it for leasing purpose and are not intended to be sold on the market. Pursuant to the Acquisition Agreement, the Vendor has agreed to indemnify the Purchaser for any amount of land premium payable to the Government by PRC Co 2 for its holding and operating (including leasing) of the retail and hotel portions of the subject development.

V – 8

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

APPENDIX V

As revealed by the Construction Land Use Planning Permit (Ref Shen Gui Tu Xu No. ZS-2011-0061) issued by the Town Planning and Land Resources Committee No. 1 Administration Bureau on 12 June 2012, the subject development is subject to the following planning conditions:

Plot ratio : not more than 6.5 times Site coverage : not more than 90% Building height : 240 to 300 metres GFA of apartment : 168,790 square metres GFA of R&D units : 432,760 square metres GFA of hotel : 50,000 square metres Retail : 167,000 square metres (including 32,000 square metres in basement) Amenity facilities : 2,360 square metres (including 600 square metres for community health centre; 200 square metres for residents’ committee; 200 square metres for community service centre; 100 square metres for security office; 170 square metres for refuse rooms; 660 square metres for property management office; 150 square metres for post office and 280 square metres for public lavatories) No. of Car parking : 5,400 bays Space

In accordance with the information provided by the Group, the status of title and grant of major approvals and licences are as follows:

State-Owned	Land Use Right Grant Contract	Yes
State-Owned	Land Use Right Certificate	Yes
Construction	Land Use Planning Permit	Yes
Construction	Works Commencement Permit	To be granted
Construction	Works Planning Permit	To be granted

As at the Latest Practicable Date, PRC Co 2 has yet to obtain the construction works planning permit or construction works commencement permit or the confirmation approving the advance commencement of the building works from the relevant PRC authority(ies) although the construction works have already commenced at the Target Site. Completion of the Acquisition, however, is subject to the fulfillment or waiver of, among other things, the obtaining of such permits and/or confirmations, as issued by the relevant PRC authority(ies), being condition precedent (h) in the section headed “Conditions precedent” in the Letter from the Board of this circular. As confirmed by the Target Group, the applications for these permits have been submitted and accepted by the relevant PRC authority(ies). The management of the Group has been advised by the relevant PRC authority(ies) that these permits are expected to be granted in April 2013. Based on the foregoing, the PRC legal adviser of the Company has advised that subject to PRC Co 2 conforming to the applicable PRC laws and regulations, and after PRC Co 2 having implemented/completed the procedures required by the applicable PRC laws and regulations and the relevant PRC authorities, there will be no material legal obstacles for PRC Co 2 to obtain the above-mentioned permits. Furthermore, as confirmed by the Target Group that, as at the Latest Practicable Date, no related penalties had been imposed by the relevant PRC authority(ies) on PRC Co 2. Based on all of the foregoing, the PRC legal adviser of the Company is of the view that the commencement of the building works without obtaining such permits will not have material adverse affects on the business and/or operations of the Target Group after Completion of the Acquisition.

As at the date of valuation, the construction costs already expended and the further construction costs to be expended by PRC Co 2 to complete the apartment towers on the Northern Portion of the subject site are RMB 355,000,000 and RMB 1,340,000,000 respectively. The market value of the apartment towers of the Northern Portion of the property as if it were fully completed on the date of valuation is assessed at RMB 7,179,000,000 . In addition, site formation costs and site preparation costs of approximately RMB 78,800,000 has been expended on the Southern Portion of the subject site.

V – 9

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

The PRC Legal Opinion based on the information provided by the Group is summarized as follows:
10.1 A Land Use Right Grant Contract (Ref Shen Di He Zi (2012) No. 6015) was entered into between the Shenzhen Town Planning and Land Resources Committee No. 1 Administration Bureau （深圳市規劃和國土資源委員會第一直屬管理局）and PRC Co 2 on 19 September 2012, the subject land parcel (Lot No. B307-0018) with an area of 121,370.90 square metres was granted by the Shenzhen Town Planning and Land Resources Committee No. 1 Administration Bureau（深圳市規劃和國土資源委員會第一直屬管理局）to PRC Co 2 for a term of 50 years expiring on 28 August 2062 for hotel, office and type 1 industrial use at a total land costs of RMB1,564,699,550 which comprises land premium, land development fund and community facility provision fee of RMB234,704,932, RMB10,780,594 and RMB1,319,214,024 respectively.
10.2 A Certificate of Land Cost Settlement was issued by the Shenzhen Town Planning and Land Resources Committee No. 1 Administration Bureau on 10 October 2012 to certify the full payment of the land costs of RMB1,564,699,550 on 10 September 2012.
10.3 First Supplemental Land Use Right Granting Contract was entered into between the Shenzhen Town Planning and Land Resources Committee No. 1 Administration Bureau（深圳市規劃和國土資源委員會第一直屬管理局）and PRC Co 2 on 19 November 2012 by which the site area of the subject land parcel (Lot No. B307-0018) was adjusted to 121,225.10 square metres.
10.4 A Land Use Right Certificate (Ref Shen Fang Di Zi No. 30007045 44) for the subject land parcel (Lot No. B307-0018) with an area of 121,225.10 square metres was obtained by PRC Co 2 from the Municipal Government of Shenzhen on 21 December 2012. The land parcel is permitted for hotel, office and type 1 industrial uses for a land use right term of 50 year from 29 August 2012 to 28 August 2062.
10.5 As remarked in the said Land Use Right Certificate, the subject land parcel is sub-divided into 2 portion (being “Land Parcel 1” and ”Land Parcel 2”).
10.6 Land Parcel 1 has an area of 25,105 square metres and permissible gross floor area of 170,720 square metres of which 168,790 square metres are attributable to apartment units, 1,930 square metres are attributable to such amenity facilities as community health centre (600 square metres), residents’ committee (200 square metres), community service centre (200 square metres), security office (100 square metres), refuse rooms (170 square metres) and property management office (660 square metres) ; and the aforesaid amenity facilities (save for the property management office) together with their legal title shall be surrendered to the Government without consideration. The property management office shall be considered as common facilities co-owned by all property owners of the land parcel.
10.7 Land Parcel 2 has an area of 96,266 square metres and permissible gross floor area of 618,190 square metres which comprises the followings:
- R&D office with a total gross floor area of 432,760 square metres of which 302,932 square metres can be transferrable on strata-title basis, 39,446 square metres shall be bought back by the Government at costs and the remaining floor area is not regarded as commodity property;
- Hotel with a gross floor area of 50,000 square metres
- Commercial and services facilities with a gross floor area of 135,000 square metres
- Underground supporting commercial and services facilities with a gross floor area of 32,000 square metres
- Amenity facilities with a gross floor area of 430 square metres (including post office of 150 square metres which can be transferrable and public lavatories of 280 square metres which is not regarded as commodity property; the aforesaid lavatories together with their legal title shall be surrendered to the Government without consideration.

V – 10

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

10.8 Based on the status of the Property as mentioned above, the PRC Legal Advisor opined that Land Parcel 1 is currently in the nature of non-commodity property. As confirmed by the Target Company, PRC Co 2 is planning to convert the land use rights of Land Parcel 1 from non-commodity property to commodity property such that the property erected thereon can be sold on the market. To legally complete the conversion process, under the PRC Land Administration Law Implementation Rules, it is necessary to gain approval document and submit application to the relevant land administrative bureau and finally alter registration records by the relevant land registry. Under the Shenzhen Urban Renewal Execution Law（深圳市城市更新辦法）, conversion of non-commodity land use rights into commodity land use rights would involve payment of land premium. As such, PRC Co 2 is required to seek approval from the State-owned Land Administration Bureau and settle land premium in accordance with the aforesaid execution law in order to convert the Land Parcel 1 from non-commodity land use rights into commodity land use rights.
10.9 After completing the aforesaid conversion process and obtaining Pre-sale Permit, PRC Co 2 has the rights to sell the properties of Land Parcel 1 on the market.
10.10 For the R&D offices to be erected on the Land Parcel 2 with a gross floor area of 302,932 square metres, PRC Co 2 is allowed to sell these offices on the market provided that PRC Co 2 undertakes the building construction in accordance with the relevant rules and regulation and obtains Pre-sale Permit.
10.11 For the R&D offices to be erected on the Land Parcel 2 with a gross floor area of 39,446 square metres, they shall be bought back by the Government at costs.
10.12 For the remaining floor area of the R&D offices to be erected on the Land Parcel 2, they are in the nature of non-commodity land use rights.
10.13 For the hotel property with a gross floor area of 50,000 square metres, the commercial service facilities with a gross floor area of 135,000 square metres, the underground supporting commercial services facilities with a gross floor area of 32,000 square metres and the public lavatory with a gross floor area of 280 square metres, their land use rights are all of non-commodity in nature.
10.14 Post office with a gross floor area of 150 square metres is in the nature of commodity property and is allowed to be sold on the market on non-strata title basis.
10.15 Health centre, residents’ committee, community service centre, refuse rooms, public lavatory and security rooms shall be surrendered to the Government upon completion.
10.16 Property management office shall be common area jointly owned by all owners of the land parcels after completion of relevant formality as laid down in the Shenzhen Special Economic Zone Property Management Regulations.
10.17 Up to the Latest Practicable Date as confirmed by the Target Group, with the exception of the restrictions on the land use rights of the property as mentioned above, the property was free from any encumbrance.

V – 11

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

VALUATION CERTIFICATE

Group II – Property interest to be acquired by the Target Group (subject to the approval of the Independent Shareholders at the EGM)

				Market Value in
			Particulars of	Existing State as at
	Property	Description and tenure	occupancy	31 December 2012
				RMB
2.	Unit No. 5F03 on	The property comprises a total of 7	The property is	272,400,000
	Level 5, Unit	workshop units within a 25-storey	currently vacant.
	Nos. 6A01,	(plus 2 basement levels) industrial		100% interest
	6F01 and 6F02 on	building which was newly completed		attributable to
	Level 6, Unit	at the end of 2012.		the Target Group:
	Nos. 7F01 and			272,400,000
	7F02 on Level 7 and	The gross floor area of the property is
	Unit No. 8F01 on	7,885.11 square metres.
	Level 8,
	Terra Building,	The land use rights of the property
	Binhe Da Road,	have been granted for a term of 50
	Futian District,	years commencing on 30 June 2007
	Shenzhen City,	and expiring on 29 June 2057 for
	Guangdong Province,	industrial uses.
	the PRC

Notes:

As revealed by the Building and Land Ownership Certificate dated 14 March 2011, the land use rights of the property is held by Shum Yip Terra (Holdings) Co., Ltd., a 75%-owned subsidiary of the Company, for a term of 50 years commencing on 30 June 2007 and expiring on 29 June 2057.
Pursuant to 7 sets of sale and purchase ( pre- sale) agreements (the “ Sale and Purchase (Pre-Sale) Agreements ”) all entered into between Shum Yip Terra (Holdings) Co., Ltd.（深圳泰然（集團）股份有限公司） and Shenzhen Kezhigu Investment Co., Ltd. 深圳市科之谷投資有限公司 (“ PRC Co 2 ”) (an indirect wholly-owned subsidiary of the Target Company) on 31 July 2012, the latter acquired the property from the former at a total consideration of RMB272,402,793 which in our opinion is in line with the market value of the property as at the agreement date i.e. 31 July 2012. The purchase consideration has been settled in full.
Pursuant to the undertaking letter given by PRC Co 2 to Shum Yip Terra (Holdings) Co., Ltd. on 25 February 2013, PRC Co 2 has agreed that the sale and purchase of the property under the aforesaid Sale and Purchase (Pre-Sale) Agreements shall be conditional upon the approval of the Independent Shareholders of the Company at the EGM, and PRC Co 2 has irrevocably undertaken in favour of Shum Yip Terra (Holdings) Co., Ltd. that in the event that the aforesaid shareholders’ approval is not obtained, PRC Co 2 shall enter into relevant termination agreement(s) and/or arrangements with Shum Yip Terra (Holdings) Co., Ltd. in connection with the termination of the Sale and Purchase (Pre-Sale) Agreements to the effect that the Sale and Purchase (Pre-Sale) Agreements will be terminated and will not be completed with the Consideration of approximately RMB272.4 million being refunded to PRC Co 2 by Shum Yip Terra (Holdings) Co., Ltd..

V – 12

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

The PRC Legal Opinion based on the information provided by the Group is summarized as follows:
4.1 The Sale and Purchase (Pre-Sale) Agreements (Ref Shen (Fu) Wang Yu Mai Zi (2012) Nos. 1858 to 1861 and 1863 to 1865) were entered into between Shum Yip Terra (Holdings) Co., Ltd. and PRC Co 2 on 31 July 2012 by virtue of which the property was acquired by PRC Co 2 from Shum Yip Terra (Holdings) Co., Ltd. As provided in the agreements, the purchase consideration should be fully settled by the purchaser on the agreement date.
4.2 The Sale and Purchase (Pre-Sale) Agreements were filed to the Shenzhen Property Title Registration Centre on 8 August 2012.
4.3 Shum Yip Terra (Holdings) Co., Ltd. has been issued by the Shenzhen Town Planning and Land Resources Administration Committee（深圳市規劃和國土資源委員會）a Pre-sale Permit (Ref. Shen Fang Xu Zi (2012) Fu Tian No. 003) on 30 May 2012 for the pre-sale of the subject building.
4.4 The purchase consideration was settled in full to Shum Yip Terra (Holdings) Co., Ltd. by PRC Co 2 on 5 November 2012.
4.5 According to a written confirmation issued by Shum Yip Terra (Holdings) Co., Ltd. on 18 January 2013, the payment of the purchase consideration by PRC Co 2 on 5 November 2012 constituted full and final settlement for the property transactions and Shum Yip Terra (Holdings) Co., Ltd. waived its rights to take any legal action against PRC Co 2 on the ground of late payment.
4.6 On 25 February 2013, PRC Co 2 issued an undertaking letter to Shum Yip Terra (Holdings) Co., Ltd. and agreed to cancel all transaction under the Sale and Purchase (Pre-Sale) Agreements mentioned in note 4.1 above and accept the full amount of purchase consideration refunded by Shum Yip Terra (Holdings) Co., Ltd. in case where the transaction is not approved by the Independent Shareholders of the Company at the EGM.
7 Based on the status of the property as mentioned above, the PRC Legal Advisor opined that the aforesaid pre-sale agreements are legal and valid. By virtue of the aforesaid written confirmation of 18 January 2013 issued by Shum Yip Terra (Holdings) Co., Ltd., PRC Co 2 shall not be subject to any legal liability regarding the late payment of the purchase consideration.
4.8 Up to the Latest Practicable Date as confirmed by the Target Group, with the exception of the conditions of the undertaking letter as mentioned above, the property was free from any encumbrance.

V – 13

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

VALUATION CERTIFICATE

Group III – Property rented by the Target Group

Market Value in Particulars of Existing State as at Property Description and tenure occupancy 31 December 2012 RMB 3. Level 5 to 7 The property comprises all office units The property is occupied No commercial value Block No. 1 on Level 5 to 7 of a 7-storey office by the Target Group as Star Garden building completed in 2003. offices. No. 5003 Huanggang Road The gross floor area of the property is Futian District 3,714 square metres. Shenzhen City, Guangdong Province, The Property is rented by the Target the PRC Group for a lease term expiring on 25 March 2013 at a current monthly rent of RMB150,000 exclusive of management fee.

Notes:

Pursuant to a tenancy agreement and a supplemental tenancy agreement both entered into between Shenzhen San Xing Media Shi Jie Co. Ltd.（深圳三星視界有限公司）and Shenzhen Kezhigu Investment Co., Ltd. 深圳市科之谷投資有限公司 (“ PRC Co 2 ”) (an indirect wholly-owned subsidiary of the Target Company), the former rented the Level 6 and 7 of the property with a total gross floor area of 2,476 square metres to the latter for a term of 1 years expiring on 25 March 2013 at a monthly rent of RMB80,000 during the period from 26 March 2012 and 25 June 2012 and a monthly rent of RMB100,000 during the period from 26 June 2012 to 25 March 2013 exclusive of management fee.
Pursuant to a memorandum executed by Shenzhen San Xing Media Shi Jie Co. Ltd.（深圳三星視界有限公司） and PRC Co 2 in 2012, the former rented the Level 5 of the property to the latter for a term commencing on 26 October 2012 and expiring on 25 March 2013 at a monthly rent of RMB50,000.
As revealed from the Building and Land Ownership Certificate (Ref. Shen Fang Di Zi No. 3000227313) registered on 1 January 2004, the Property is held by Shenzhen San Xing Media Shi Jie Co. Ltd.（深圳三星視界有限公司）.
The Property is currently legally and beneficially owned by 深圳三星視界有限公司, a non-wholly owned subsidiary of the Company.

V – 14

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

The PRC Legal Opinion based on the information provided by the Group is summarized as follows:
4.1 A tenancy agreement and a supplemental tenancy agreement were entered into between Shenzhen San Xing Media Shi Jie Co. Ltd.（深圳三星視界有限公司）and PRC Co 2 in 2012 by virtue of which Levels 6 and 7 of the property are leased to PRC Co 2 for a term spanning on between 26 March 2012 and 25 March 2013 at a monthly rent of RMB80,000 for the period between 26 March 2012 and 25 June 2012 and a monthly rent of RMB100,000 for the period between 26 June 2012 and 25 March 2013.
4.2 A memorandum was entered into between Shenzhen San Xing Media Shi Jie Co. Ltd.（深圳三星視界有限公司）and PRC Co 2 in 2012 by virtue of which Level 5 of the property is leased to PRC Co 2 for a term spanning on between 26 October 2012 and 25 March 2013 at a monthly rent of RMB50,000.
4.3 According to the Building and Land Ownership Certificate (Ref. Shen Fang Di Zi No. 3000227313), the property is held by Shenzhen San Xing Media Shi Jie Co. Ltd.（深圳三星視界有限公司）.
4.4 PRC Co 2 filed the tenancy agreement on 25 April 2012 and has been issued by the Shenzhen Futian Property Leasing Administration Bureau a Leasing Confirmation Certificate（房屋租賃憑證, Ref No. Fu JR009491Bi（備））. However, the supplemental tenancy agreement and the memorandum have not yet been filed to the Shenzhen Futian Property Leasing Administration Bureau.
4.5 Based on the status of the property as mentioned above, the PRC Legal Advisor opined that the tenancy agreement is legal and valid and is enforceable between both parties to the agreement. Up to the Latest Practicable Date, PRC Co 2 has the right to use the property.
4.6 Under Proviso 44 of the PRC Contract Laws（中華人民共和國合同法）and Proviso 9 of the Interpretation by the Supreme Court on certain Proviso of the PRC Contract Law No. 1（最高人民法院關於適用《中國人民共和國合同法》若干問題的司法解釋（一））, the enforceability of a tenancy agreement would not be impaired on the ground that it has not been completed the registration process. According to the Commodity Property Leasing Administration Method（商品房屋租賃管理辦法）, for those tenancy agreement which failed to be registered, the local municipal Government would require the rectification of defect within prescribed time period. Failure to rectify the defect within the prescribed period would lead to penalty with an amount ranging from RMB1,000 to RMB10,000. As the supplemental tenancy agreement and the memorandum have not yet been registered, PRC Co 2 is exposing to the legal risk of being penalized.

V – 15

APPENDIX V

VALUATION REPORT ON THE PROPERTY INTERESTS OF THE TARGET GROUP

VALUATION CERTIFICATE

Group III – Property rented by the Target Group

Property Description and tenure 4. Unit Nos. B2301, The property comprises 3 industrial B2401 and B2501 units on Levels 23 to 25 of a 25-storey Haisong Building industrial building completed in 2006. Tairan 9th Road Che Gong Miao The gross floor area of the property is Industrial Zone, 2,084.04 square metres. Futian District, Shenzhen, The Property is rented by the Target the PRC Group for a lease term expiring on 31 December 2014 at a current monthly rent of RMB243,428 exclusive of management fee.

Market Value in Particulars of Existing State as at occupancy 31 December 2012 RMB The property is occupied No commercial value by the Target Group as offices.

Notes:

Pursuant to a tenancy agreement entered into between Shum Yip Holdings Company Limited （深業（集團）有限公司）and Shenzhen Kezhigu Investment Co., Ltd. 深圳市科之谷投資有限公司 (“ PRC Co 2 ”), (an indirect wholly-owned subsidiary of the Target Company), the former rented the property to the latter for a term of 3 years expiring on 31 December 2014 at a monthly rent of RMB243,428 exclusive of management fee.
As revealed from three sets of Building and Land Ownership Certificates (Ref. Shen Fang Di Zi Nos. 3000514625, 3000513905 and 3000513779) , the Property is held by Shum Yip Holdings Company Limited.
The PRC Legal Opinion based on the information provided by the Group is summarized as follows:
3.1 A tenancy agreement was entered into between Shum Yip Holdings Company Limited and PRC Co 2 on 9 May 2012 by virtue of which the property is leased to PRC Co 2 for a term spanning on between 1 January 2012 and 31 December 2014 at a monthly rent of RMB243,428.
3.2 According to the three sets of Building and Land Ownership Certificates, the property is held by Shum Yip Holdings Company Limited.
3.3 PRC Co 2 registered the tenancy agreement on 10 May 2012 and has been issued by the Shenzhen Futian Property Leasing Administration Bureau a Leasing Permit (Ref No. Fu EK047161).
3.4 Based on the status of the property as mentioned above, the PRC Legal Advisor opined that the tenancy agreement is legal and valid and is enforceable between both parties to the agreement. Up to the Latest Practicable Date, PRC Co 2 has the right to use the property.

V – 16

APPENDIX VI DETAILS OF DIRECTOR PROPOSED FOR RE-ELECTION

The details of Mr. WANG Minyuan proposed to be re-elected as Director at the EGM are set out below:

Mr. WANG Minyuan , aged 52, was appointed as Executive Director on 28 September 2012. He is currently the Vice President of Shum Yip Group. Mr. WANG joined Shum Yip Group in August 2012. Presently, he is a Senior Engineer. Prior to the date thereof, Mr. WANG had served successively as Vice President of Shenzhen Metro Group Co., Ltd. and Shenzhen Expressway Co., Ltd. He holds a bachelor’s degree in Civil Engineering from Zhejiang University. He has over thirty years of extensive experience in engineering design and construction and corporate management. Save as disclosed above, Mr. WANG 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.

Save as disclosed above, Mr. WANG does not have any relationships with any Directors, senior management, substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. WANG did not have any interests in Shares or underlying shares of the Company within the meaning of Part XV of the SFO.

The Company has entered into an appointment letter with Mr. WANG for a term of 3 years commencing from 28 September 2012 which will continue until terminated by either party to the appointment letter at six months’ notice. Mr. WANG is also subject to the retirement and re-election provisions in the Articles of Association pursuant to which he shall retire from office at the next following general meeting of the Company following his appointment by the Board and shall then be eligible for re-election. Thereafter, he shall retire from office by rotation at the annual general meeting of the Company. Mr. WANG 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. WANG 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$626,522 per annum will be payable to Mr. WANG.

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.

VI – 1

GENERAL INFORMATION

APPENDIX VII

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group and the Target 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 herein or this circular misleading.

This circular includes particulars given in compliance with the Takeovers Code for the purpose of giving information with regard to the Group and the Target Group. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this circular (other than information relating to the Target Group, and the Vendor and parties acting in concert with it) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts not contained in this circular, the omission of which would make any statement in this circular misleading.

The directors of the Vendor jointly and severally accept full responsibility for the accuracy of the information contained in this circular relating to the Target Group, the Acquisition Agreement, and the Vendor and parties acting in concert with it, and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts not contained in this circular, the omission of which would make any statement in this circular misleading.

VII – 1

GENERAL INFORMATION

APPENDIX VII

2. SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date were, and immediately after the issue of the Consideration Shares (assuming all outstanding Share Options, whether or not exercisable at such time, will be fully exercised) will be, as follows:

Authorised: 5,000,000,000 Shares as at the Latest Practicable Date 10,000,000,000 Shares after the ordinary resolution for the increase in the authorised share capital is approved by the Shareholders at the EGM Issued and fully paid: 3,729,015,408 Shares in issue as at the Latest Practicable Date 1,410,117,262 Consideration Shares to be issued at Completion 91,578,000 Shares to be issued assuming full exercise of the Share Options 5,230,710,670 Shares	HK$ 250,000,000.00

	500,000,000.00

	186,450,770.40 70,505,863.10 4,578,900.00
	261,535,533.50

All the existing Shares in issue are fully paid and rank pari passu in all respects including all rights as to voting, dividends and interests in capital. The Consideration Shares to be issued upon Completion will rank pari passu in all respects with all other Shares in issue as at the date of Completion and be entitled to all dividends and other distributions the record date for which falls on or after the date of Completion.

There has been no alteration to the authorised share capital of the Company since 31 December 201 2 and up to the Latest Practicable Date.

The Company had not issued any new Shares since 31 December 2012 and up to the Latest Practicable Date.

VII – 2

GENERAL INFORMATION

APPENDIX VII

As at the Latest Practicable Date, there were 91,578,000 outstanding Share Options entitling the holders to acquire a total of 91,578,000 Shares upon full conversion, among which 12,048,000 Share Options were granted to certain Directors (as set out in the section headed “Disclosure of Interests” in this appendix) and the remaining 79,530,000 Share Options were granted to certain employees of the Group. As at the Latest Practicable Date, save as disclosed above, the Company did not have any outstanding warrants, options or securities convertible into Shares.

3. MARKET PRICES

The table below shows the closing price of the Shares on the Stock Exchange on (i) the last trading date of the Stock Exchange for each of the calendar month end date, during the Relevant Period; (ii) the Last Trading Date; and (iii) the Latest Practicable Date:

Date	Closing price per Share
	HK$
31 July 2012	1.79
31 August 2012	1.76
28 September 2012	1.80
31 October 2012	2.06
30 November 2012	2.61
31 December 2012	3.14
17 January 2013 (the Last Trading Date)	3.36
31 January 2013	3.57
28 February 2013	3.39
25 March 2013 (the Latest Practicable Date)	3.01

The highest and lowest closing prices of the Shares as recorded on the Stock Exchange during the Relevant Period were HK$ 3. 910 per Share on 23 January 2013 and HK$ 1.72 per Share on 26 July 2012 respectively.

VII – 3

GENERAL INFORMATION

APPENDIX VII

4. DISCLOSURE OF INTERESTS

Interests and short positions of Directors and chief executives in the Shares, underlying Shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

Long positions in the Shares and underlying Shares of the Company:

				Underlying
				Shares		Percentage of
			Number of	pursuant to	Aggregate	issued share
Name of director	Capacity	Nature of interests	Shares	Share Options	interests	capital
LU Hua	Beneficial owner	Beneficial interest	1,038,829	4,016,000	5,054,829	0.14
				(Note)
MOU Yong	Beneficial owner	Beneficial interest	–	4,016,000	4,016,000	0.11
				(Note)
LIU Chong	Beneficial owner	Beneficial interest	–	4,016,000	4,016,000	0.11
				(Note)
WU Jiesi	Beneficial owner	Beneficial interest	3,534,767	–	3,534,767	0.09
WONG Po Yan	Beneficial owner	Beneficial interest	3,534,767	–	3,534,767	0.09
LI Wai Keung	Beneficial owner	Beneficial interest	1,087,145	–	1,087,145	0.03

Note: These Share Options were granted on 19 July 2010 at an exercise price of HK$2.39 per Share. Such Share Options granted to each of the above Directors may be exercised up to 40% at any time from 19 July 2012 to 19 July 2013, and up to 70% at any time from 19 July 2013 to 19 July 2014, and up to 100% at any time from 19 July 2014 to 19 July 2015

VII – 4

GENERAL INFORMATION

APPENDIX VII

Long positions in the shares and underlying shares of the associated corporation – Road King Infrastructure Limited:

			Underlying
			shares	Underlying		Percentage of
		Number of	pursuant to	shares of	Aggregate	issued
Name of director	Capacity	shares	share options	debentures	interests	share capital
WONG Po Yan	Beneficial owner	50,000	–	–	50,000	0.01

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

5. ARRANGEMENTS AFFECTING DIRECTORS AND DIRECTORS’ INTEREST IN CONTRACTS AND ASSETS

(a) As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which had been, since 31 December 20 12 (being the date to which the latest published audited consolidated accounts of the Group were made up), acquired or disposed of by or leased to any member of the Enlarged Group, or were proposed to be acquired or disposed of by or leased to any member of the Enlarged Group.
(b) No contract or arrangement in which any of the Directors was materially interested and which was significant in relation to the business of the Enlarged Group subsisted at the Latest Practicable Date.
(c) As at the Latest Practicable Date, no benefit had been or would be given to any Director as compensation for loss of office or otherwise in connection with the Acquisition (and the issue of the Consideration Shares) and/or the Whitewash Waiver.

VII – 5

GENERAL INFORMATION

APPENDIX VII

(d) As at the Latest Practicable Date, there was no agreement or arrangement between any Director and any other person which was conditional on or dependent upon the outcome of the Acquisition (and the issue of the consideration shares) and/or the Whitewash Waiver or otherwise connected with the Acquisition (and the issue of the consideration shares) and/or the Whitewash Waiver.
(e) As at the Latest Practicable Date, there was no material contract entered into by the Vendor in which any Director had a material personal interest.

6. OTHER DISCLOSURE

(a) As at the Latest Practicable Date, save as disclosed in the sections headed “Shareholding structures of the Company” in the “Letter from the Board” of this circular and “Disclosure of interests” above in this appendix, none of the Directors, directors of the Vendor, and the Vendor and its concert parties owned or controlled or were interested in any other Shares, convertible securities, warrants, options or derivatives of the Company.
(b) Save for the entering into of the Acquisition Agreement, none of the Directors, directors of the Vendor, and the Vendor and its concert parties had dealt for value in any Shares, convertible securities, warrants, options or derivatives of the Company during the Relevant Period.
(c) None of the Company and the Directors were interested in or owned or controlled any shares, convertible securities, warrants, options or derivatives of the Vendor as at the Latest Practicable Date nor had any of them dealt for value in any shares, convertible securities, warrants, options or derivatives of the Vendor during the Relevant Period.
( d) None of the subsidiaries of the Company, or pension fund of the Company or of a subsidiary of the Company or by an adviser to the Company as specified class (2) of the definition of associate in the Takeovers Code but excluding exempt principal traders, owned or controlled any Shares, convertible securities, warrants, options or derivatives of the Company as at the Latest Practicable Date .
( e) No fund managers (other than exempt fund managers) connected with the Company managed on a discretionary basis any Shares, convertible securities, warrants, options or derivatives of the Company as at the Latest Practicable Date .
( f) As at the Latest Practicable Date, none of the Independent Shareholders had irrevocably committed themselves to vote for or against the proposed resolutions approving the Acquisition (and the issue of the Consideration Shares) and/or the Whitewash Waiver.

VII – 6

GENERAL INFORMATION

APPENDIX VII

( g) As at the Latest Practicable Date, no agreement, arrangement or understanding (including any compensation arrangement) existed between the Vendor or its concert parties and any of the Directors, recent Directors, Shareholders or recent Shareholders having any connection with or dependence upon the Acquisition and the issue of the Consideration Shares, and/or the Whitewash Waiver.
( h) None of the Vendor and its concert parties had borrowed or lent any Shares, convertible securities, warrants, options or derivatives of the Company during the Relevant Period.
( i) As at the Latest Practicable Date, none of the Vendor and its concert parties had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Company or any person. As at the Latest Practicable Date, the Company did not have any arrangement of the kind referred to in note 8 to Rule 22 of the Takeovers Code with any person, and no person had any such arrangement with any person who is an associate of the Company by virtue of classes (1), (2), (3) and (4) of the definition of associate under the Takeovers Code.
( j) As at the Latest Practicable Date, neither the Company nor any of the Directors had borrowed or lent any Shares, convertible securities, warrants, options or derivatives of the Company.
( k) Dr. WU Jiesi (Non-executive Director), Mr. WONG Po Yan (Independent nonexecutive Director) and Mr. LI Wai Keung (Independent non-executive Director) are considered Independent Shareholders. Save for having voted on the board resolution approving the Acquisition, each of them was not involved in the Acquisition and therefore was not interested in the Acquisition or the Whitewash Waiver and they intended to exercise the voting rights in respect of the Shares they beneficially owned respectively to vote for the proposed resolutions for approving the Acquisition (and the issuance of the Consideration Shares) and the Whitewash Waiver . Mr. LU Hua and Mr. MOU Yong, who are executive Directors and also directors of the Vendor, are regarded as concert parties of the Vendor, and Mr. LIU Chong, who is an executive Director and was involved in the Acquisition by participating in the negotiation for the Acquisition, is not considered an Independent Shareholder , and hence each of them will abstain from voting on the proposed resolutions for approving the Acquisition (and the issuance of the Consideration Shares) and the Whitewash Waiver . Other than the Directors mentioned in this paragraph above, as at the Latest Practicable Date, no other Directors held any relevant securities (as defined in note 4 to Rule 22 of the Takeovers Code) of the Company.
( l) As at the Latest Practicable Date, there was no agreement, arrangement or understanding pursuant to which the Consideration Shares to be issued to the Vendor under the Acquisition Agreement would be transferred, charged or pledged to any other persons.
(m) Mr. LU Hua, Mr. MOU Yong and Mr. HUANG Yige are the directors of the Vendor and Shum Yip Group while Mr. LIU Chong and Mr. WANG Min yuan are the vice presidents of the Vendor and Shum Yip Group.

VII – 7

GENERAL INFORMATION

APPENDIX VII

7. MATERIAL LITIGATION

A claim for breach of a cooperation agreement was made by Fancheng Property Development Co., Limited (the “ Plaintiff ”) against Shum Yip Group (Shenzhen) Co., Ltd. (“ Shum Yip Shenzhen ”), a subsidiary of the Company, for a total compensation of approximately RMB 31,510,000 . As at the Latest Practicable Date, such case was still subject to the judgment of the High Court of Guangdong Province. Pursuant to a deed entered into on 12 February 1997 by Shum Yip Holdings in favour of the Company in connection with the listing of the Company, the Company could claim indemnity from Shum Yip Holdings if the Plaintiff is successful in its claim against Shum Yip Shenzhen on material breach of the cooperation agreement. Further details of the above litigation are set out on page 37 of the Company’s interim report for the six months ended 30 June 2012.

Save as disclosed above, as at the Latest Practicable Date, no member of the Enlarged Group was engaged in any litigation or claim of material importance and no litigation or claim of material importance was pending or threatened against any member of the Enlarged Group or to which any member of the Enlarged Group was, or might become, a party.

8. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, Mr. LU Hua, Mr. MOU Yong and Mr. HUANG Yige , Directors, were directors of both Shum Yip Holdings and Shum Yip Group. Shum Yip Holdings is principally engaged in investment holding and Shum Yip Group is principally engaged in investment in infrastructure and property development. Therefore, the above Directors were considered to have interest in the businesses which competed or were likely to compete, either directly or indirectly, with the businesses of the Group pursuant to the Listing Rules.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or their respective associates was interested in any business which competed or would be likely to compete, either directly or indirectly, with the business of the Group, other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or the Group.

9. SERVICE CONTRACTS

As at the Latest Practicable Date, (i) none of the Directors had any service contracts with the Company or any of its subsidiaries or associated companies in force which (a) (including both continuous and fixed term contracts) had been entered into or amended within 6 months before the date of the Announcement; (b) were continuous contracts with a notice period of 12 months or more; or (c) were fixed term contracts with more than 12 months to run irrespective of the notice period; and (ii) none of the Directors had any existing or proposed service contracts with any member of the Enlarged Group (other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

VII – 8

GENERAL INFORMATION

APPENDIX VII

10. EXPERTS AND CONSENTS

The following are the qualifications of the experts whose advices and/or reports are contained in this circular:

Name

Qualification

Asset Appraisal Limited Professional property valuer (“ Asset Appraisal ”)

CIMB A licensed corporation to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

Ernst & Young Certified Public Accountants King & Wood Mallesons PRC legal adviser (“ KWM ”) Somerley Limited (“ Somerley ”) A licensed corporation to carry out type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO

Each of Asset Appraisal, CIMB, Ernst & Young, KWM and Somerley (collectively the “ Experts ”) has given and has not withdrawn its written consent to the issue of this circular with the inclusion of, where applicable, its letter(s) of advices and/or report(s) and references to its name in the form and context in which they respectively appear.

As at the Latest Practicable Date, each of the Experts:

(a) did not have any shareholding in any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and
(b) did not have any direct or indirect interest in any assets which had been, since 31 December 2012 (being the date to which the latest published audited consolidated accounts of the Group were made up), acquired or disposed of by or leased to any member of the Enlarged Group, or were proposed to be acquired or disposed of by or leased to any member of the Enlarged Group.

VII – 9

GENERAL INFORMATION

APPENDIX VII

11. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Enlarged Group) had been entered into by the members of the Enlarged Group after the date the two years immediately preceding the date of the Announcement up to and including the Latest Practicable Date which are or may be material:

(a) the Property Disposal Agreements dated 31 July 2012, the details of which are set out in the paragraph headed “The Property Disposal and its implications on the Acquisition ” in the “Letter from the Board” of this circular;
( b) a conditional master agreement dated 28 September 2012 between the Company and Coastal Greenland Limited (“ Coastal Greenland ”) pursuant to which, among others (i) the Company shall procure Shum Yip Investment (Shenzhen) Co., Ltd. (“ Shum Yip Investment ”), a wholly-owned subsidiary of the Company, to transfer to Shenzhen Coastal Property Investment Limited (“ Shenzhen Coastal ”) 30% of the entire equity interests in Huizhou Shum Yip Southern Land Company Limited (“ Huizhou Shum Yip ”) (the “ Huizhou Sale Interests ”) and a shareholder’s loan in the principal amount of approximately RMB195 million owing by Huizhou Shum Yip to Shum Yip Investment, at the total consideration approximately of RMB215 million (the “ Huizhou Disposal ”); and (ii) Coastal Greenland will procure Suzhou Gaotong Information Services and Consultation Ltd. (“ Suzhou Gaotong ”) to transfer to Shum Yip Southern Land (Holdings) Co., Ltd. (“ Shum Yip Land ”), a wholly-owned subsidiary of the Company, the entire equity interests of Suzhou New Development Investment Co. Ltd (“ Suzhou New Development ”) at the consideration of approximately RMB160 million and Coastal Realty Investment (China) Limited (“ Coastal Realty ”) to transfer to Shum Yip Land a shareholder’s loan in the principal amount of approximately RMB392 million owing by Suzhou New Development to Suzhou Reality at the consideration of approximately RMB392 million (the “ Suzhou Acquisition ”), details of which are set out in the announcements of the Company dated 28 September 2012 and 3 October 2012;
( c) an agreement (the “ Huizhou Agreement ”) dated 16 October 2012 between Shum Yip Investment and Shenzhen Coastal in respect of the Huizhou Disposal;
( d) an agreement (the “ Suzhou Agreement ”) dated 16 October 2012 between Shum Yip Land, Suzhou Gaotong and Coastal Realty in respect of the Suzhou Acquisition;
( e) a memorandum of settlement (the “ Memorandum of Settlement ”) dated 16 October 2012 between Shum Yip Investment, Suzhou Gaotong, Shum Yip Land, Coastal Realty and Shenzhen Coastal in relation to the payment manner for the Huizhou Disposal and the payment manner for the Suzhou Acquisition;

VII – 10

GENERAL INFORMATION

APPENDIX VII

( f) a guarantee agreement dated 16 October 2012 entered into by the Company guaranteeing the performance of Shum Yip Investment under the Huizhou Agreement and the Memorandum of Settlement, and the performance of Shum Yip Land under the Suzhou Agreement and the Memorandum of Settlement;
( g) an agreement dated 16 October 2012 between Shenzhen Coastal and Shum Yip Land pursuant to which Shenzhen Coastal agreed to pledge to Shum Yip Land the Huizhou Sale Interests after the formal transfer of the Huizhou Sale Interests to Shenzhen Coastal, to secure the obligations of Suzhou Gaotong and Coastal Realty under the Suzhou Agreement;
( h) the Acquisition Agreement and the Supplemental Acquisition Agreement; and
( i) the Relevant Company Guarantee .

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection (i) during normal business hours from 9:00 a.m. to 5:00 p.m. (other than Saturdays, Sundays, and public holidays) at the principal place of business of the Company at 8th Floor, New East Ocean Centre, 9 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong; (ii) on the website of the SFC (at www.sfc.hk); and (iii) on the Company’s website (at www.shenzheninvestment.com), from 28 March 2013 up to and including the date of the EGM on 18 April 2013:

(a) the memorandum and articles of association of the Company;
(b) the annual results of the Company for the year ended 31 December 2012;
( c) the annual report of the Company for the year ended 31 December 2011;
( d) the letter from the Board, the text of which is set out in the section headed “Letter from the Board” of this circular;

VII – 11

GENERAL INFORMATION

APPENDIX VII

( e) the letters of recommendation from the Takeovers Code IBC and the Listing Rules IBC to the Independent Shareholders, the text of which are set out in the section headed “Letter from the Takeovers Code IBC” and “Letter from the Listing Rules IBC” respectively of this circular;
( f) the letter of advice from CIMB to the Takeovers Code IBC, the Listing Rules IBC and the Independent Shareholders, the text of which is set out in the section headed “Letter from CIMB” of this circular;
( g) the accountants’ reports on the Target Group and the PRC Co 1 Group, the text of which are set out in Appendi ces IIA and IIB to this circular respectively;
( h) the letter from Ernst & Young in respect of the unaudited pro forma financial information of the Enlarged Group, the text of which is set out in Appendix III to this circular;
( i) the valuation reports on the property interests of the Group and the Target Group prepared by Asset Appraisal , the text of which are set out in Appendix IV and Appendix V to this circular respectively;
( j) the written consents as referred to under the paragraph headed “Experts and consents” in this appendix;
( k) the material contracts as referred to under the paragraph headed “Material contracts” in this appendix; and
( l) this circular and a separate circular of the Company in respect of the Property Disposal dated 28 March 2013.

VII – 12

GENERAL INFORMATION

APPENDIX VII

13. MISCELLANEOUS

(a) The registered office of the Company is at 8th Floor, New East Ocean Centre, 9 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong.
(b) The share registrar and transfer office of the Company is Tricor Standard Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong.
(c) The secretary of the Company is Mr. LEE Ka Sze, Carmelo. He is a solicitor of the High Court of Hong Kong.
(d) The registered office of the Vendor is at 8/F, New East Ocean Centre, 9 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong. The directors of the Vendor are Mr. LU Hua, Mr. MOU Yong and Mr. HUANG Yige.
(e) The holding company of the Vendor is Shum Yip Group, which is ultimately wholly owned by Shenzhen Municipal People’s Government and under the administration of Shenzhen State-owned Assets Supervision and Administration Commission. The directors of Shum Yip Group are Mr. LU Hua, Mr. GAO Sheng Yuan, Mr. MOU Yong, Mr. Dai Yi Yi, Mr. YE Qing, Mr. GUO Yuan, Mr. CHEN Zhi Min, Mr. HUANG Yige and Mr. JIN Hai Tao. The registered office of Shum Yip Group is 28th Floor, Shum Yip Centre, Shennan Road East, Shenzhen, the PRC.
( f) As at the Latest Practicable Date, save for Mr. LU Hua , Mr. MOU Yong and Mr. HUANG Yige being the directors of the Vendor and Shum Yip Group, and Mr. LIU Chong and Mr. WANG Minyuan being the vice presidents of the Vendor and Shum Yip Group, none of the Directors was a director or employee of a company which had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.
( g) In the event of inconsistency, the English text of this circular and the accompanying form of proxy shall prevail over their respective Chinese text.

VII – 13

NOTICE OF THE EGM

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

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00604)

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“ Meeting ”) of Shenzhen Investment Limited (the “ Company ”) will be held at Garden Room, 2nd Floor, Hotel Nikko, Hong Kong, 72 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong at 10:00 a.m. on Thursday, 18 April 2013 for the purpose of considering and, if thought fit, passing, with or without amendments, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“ THAT :
(a) the conditional acquisition agreement dated 17 January 2013 entered into between the Company as purchaser and Shum Yip Holdings Company Limited（深業（集團）有限公司）(the “ Vendor ”) as vendor in respect of the proposed acquisition of the entire issued share capital of Shenzhen Silicon Valley Hi-tech Investment Company Limited（深圳硅谷投資有限公司）(the “ Acquisition Agreement ”, a copy of which has been produced before the Meeting marked “ A ” and initialed by the chairman of the Meeting for the purpose of identification), as supplemented and amended by the supplemental agreement dated 25 February 2013 between the Company and the Vendor (the “ Supplemental Acquisition Agreement ”, a copy of which has been produced before the Meeting marked “ B ” and initialed by the chairman of the Meeting for the purpose of identification), and all transactions contemplated thereunder and in connection therewith be and are hereby approved, confirmed and ratified;

EGM-1

NOTICE OF THE EGM

(b) the allotment and issue to the Vendor of 1,410,117,262 Consideration Shares (as defined in the circular of the Company dated 28 March 2013 (the “ Circular ”, a copy of which has been produced before the Meeting marked “ C ” and initialed by the chairman of the Meeting for the purpose of identification)) credited as fully paid-up at the issue price of HK$3.667 per Consideration Share, as consideration for the Acquisition (as defined in the Circular) pursuant to the Acquisition Agreement as supplemented and amended by the Supplemental Acquisition Agreement, be and is hereby approved; and
(c) any one director (the “ Director ”) of the Company, or if the affixation of the common seal is necessary, any two Directors or any one Director and the secretary of the Company, be and is/are hereby authorised for and on behalf of the Company to execute all such other documents and agreements and do all such acts or things as he/she/they may in his/her/their absolute discretion consider to be necessary, desirable, appropriate or expedient to implement or given effect to or in connection with the Acquisition Agreement as supplemented and amended by the Supplemental Acquisition Agreement and the transactions contemplated thereunder (including without limitation, the allotment and issue of the Consideration Shares).”
“ THAT :
(a) the whitewash waiver (the “ Whitewash Waiver ”) granted or to be granted by the Executive Director of the Corporate Finance Division of the Securities and Futures Commission or any delegate thereof pursuant to Note 1 on Dispensations from Rule 26 of the Hong Kong Code on Takeovers and Mergers to waive the obligation of the Vendor and parties acting in concert with it to make a mandatory offer for all the shares and securities issued by the Company not already owned or agreed to be acquired by them as a result of the issue of the Consideration Shares (as defined in the Circular) be and is hereby approved; and
(b) any one Director be and is hereby authorised for and on behalf of the Company to execute all such documents and do all such acts or things as he/she may in his/her absolute discretion consider to be necessary, desirable, appropriate or expedient to implement or given effect to or in connection with the Whitewash Waiver.”

EGM-2

NOTICE OF THE EGM

“ THAT :
(a) the authorised share capital of the Company be increased from HK$250,000,000 divided into 5,000,000,000 ordinary shares of HK$0.05 each (“ Shares ”) to HK$500,000,000 divided into 10,000,000,000 Shares by the creation of additional 5,000,000,000 new Shares (the “ Increase in Authorised Share Capital ”); and
(b) any one Director be and is hereby authorised for and on behalf of the Company to execute all such documents and do such acts or things as he/she may in his/her absolute discretion consider to be necessary, desirable, appropriate or expedient to implement or give effect to or in connection with the Increase in Authorised Share Capital.”
“ THAT :
(a) the seven sale and purchase agreements dated 31 July 2012 entered into by 深業泰然（集團）股份有限公司 (Shum Yip Terra (Holdings) Co., Ltd.) as vendor and 深圳市科之谷投資有限公司 (Shenzhen Kezhigu Investment Limited) as purchaser in relation to the sale and purchase of Unit 5F03 on the Fifth Floor, Units 6A01, 6F01 and 6F02 on the Sixth Floor, Units 7F01 and 7F02 on the Seventh Floor, and Unit 8F01 on the Eighth Floor, of Tai Ran Building, Binhe Da Road, Futian District, Shenzhen City, Guangdong Province, the PRC (a copy of which has been produced before the Meeting marked “ D ” and initialed by the chairman of the Meeting for the purpose of identification) (the “ Property Disposal Agreements ”) and the transactions contemplated thereunder be and are hereby approved, ratified and confirmed;
(b) the authority of any Director to do or undertake such acts and things, and execute all such documents for and on behalf of the Company incidental to, ancillary to or in connection with matters relating to or contemplated in the Property Disposal Agreements as he may in his absolute discretion consider necessary, desirable or expedient to give effect to the Property Disposal Agreements and the transactions contemplated thereunder be and are hereby approved, ratified and confirmed; and

EGM-3

NOTICE OF THE EGM

(c) any and all actions of the Company, or of any Directors or officers or representatives of the Company, taken in connection with the Property Disposal Agreements and the transactions contemplated thereunder prior to the Meeting be and are hereby ratified, confirmed, approved and adopted in all respects as fully as if such action(s) had been presented to for approval, and approved by, the independent shareholders of the Company prior to such action being taken.”
“ THAT , Mr. WANG Minyuan, who retires pursuant to the articles of association of the Company and is eligible for re-election, shall be re-elected as a Director .”

By Order of the Board Shenzhen Investment Limited LU Hua Chairman

Hong Kong, 28 March 2013

Registered office:

8th Floor, New East Ocean Centre

9 Science Museum Road Tsimshatsui, Kowloon Hong Kong

The English translation is for identification purpose only.

EGM-4

NOTICE OF THE EGM

Notes:

(1) A member of the Company entitled to attend and vote at the Meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote in his stead. Votes may be given either personally (or, in the case of a shareholder being a corporation, by its duly authorised representative) or by proxy in accordance with the articles of association of the Company. A proxy need not be a member of the Company.
(2) The instrument appointing a proxy must be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under seal, or under the hand of an officer or attorney duly authorised.
(3) Where there are joint registered holders of any share(s), any one of such persons may vote at the Meeting, either personally or by proxy, in respect of such share(s) as if he were solely entitled thereto, but if more than one of such joint holders be present at the Meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of shareholders of the Company in respect of such share(s) shall alone be entitled to vote in respect thereof.
(4) To be valid, the form of proxy, together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, must be delivered 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 but in any event not less than 48 hours before the time appointed for the Meeting (or any adjournment thereof, as the case may be).
(5) Delivery of an instrument appointing a proxy shall not preclude a member of the Company from attending and voting in person at the meeting or poll concerned and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
(6) The resolutions as set out in this notice will be decided by way of poll.
(7) To ascertain the shareholders’ entitlement to attend and vote at the Meeting, the register of members of the Company will be closed from 16 April 2013 ( Tuesday) to 18 April 2013 ( Thursday), both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the Meeting, all duly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s share registrars, Tricor Standard Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on 15 April 2013 ( Monday).

EGM-5

AI assistant

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

49906_rns_2013-03-27_59511a15-8eff-40cd-afaf-0654dc116217.pdf

SOMERLEY LIMITED

Independent financial adviser

CONTENTS

DEFINITIONS

the British Virgin Islands

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

(Stock Code: 00604)

(1) MAJOR AND CONNECTED TRANSACTION IN RELATION TO

(A) INTRODUCTION

LETTER FROM THE BOARD

(B) THE ACQUISITION

The Acquisition Agreement

Assets to be acquired

LETTER FROM THE BOARD

The Consideration

Conditions precedent

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Completion

The indemnities

LETTER FROM THE BOARD

(C) CONSIDERATION SHARES

(D) INFORMATION ON THE TARGET GROUP

Information on the Target Group

Information on the Target Site

LETTER FROM THE BOARD

The Property Disposal and its implications on the Acquisition

LETTER FROM THE BOARD

The Supplemental Acquisition Agreement

LETTER FROM THE BOARD

Shareholding structure of the Target Group

(i) As at the Latest Practicable Date

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(ii) Immediately after Completion (if the Property Disposal is not approved by the independent Shareholders at the EGM or has not yet been completed)

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(iii) Immediately after Completion (if the Property Disposal is approved by the independent Shareholders at the EGM and has been completed)

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Financial information on the Target Group

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(E) REASONS FOR AND BENEFITS OF THE ACQUISITION

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(F) SHAREHOLDING STRUCTURES OF THE COMPANY

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(G) WHITEWASH WAIVER

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(H) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

(I) LISTING RULES AND TAKEOVERS CODE IMPLICATIONS

Listing Rules implications

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Takeovers Code implications

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(J) FINANCIAL EFFECTS OF THE ACQUISITION

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( K) RE-ELECTION OF RETIRING DIRECTOR

(L) EGM

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(M) RECOMMENDATIONS

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ADDITIONAL INFORMATION

(Stock Code: 00604)

(1) MAJOR AND CONNECTED TRANSACTION IN RELATION TO ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF A COMPANY INDIRECTLY HOLDING A LAND SITE IN SHENZHEN, THE PEOPLE’S REPUBLIC OF CHINA INVOLVING THE ISSUE OF CONSIDERATION SHARES; AND (2) APPLICATION FOR WHITEWASH WAIVER

LETTER FROM THE TAKEOVERS CODE IBC

MAJOR AND CONNECTED TRANSACTION IN RELATION TO ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF A COMPANY INDIRECTLY HOLDING A LAND SITE IN SHENZHEN, THE PEOPLE’s REPUBLIC OF CHINA INVOLVING THE ISSUE OF CONSIDERATION SHARES

LETTER FROM THE LISTING RULES IBC

Yours faithfully,

Mr. WONG Po Yan

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MAJOR AND CONNECTED TRANSACTION; AND APPLICATION FOR WHITEWASH WAIVER

INTRODUCTION

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PRINCIPAL FACTORS AND REASONS CONSIDERED

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