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

Mar 27, 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your Shares , you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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

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

(Incorporated in Hong Kong with limited liability) (Stock Code: 00604)

CONNECTED TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A notice convening the EGM to be held on Thursday , 18 April 2013 at 10:00 a.m. at Garden Room, 2nd Floor, Hotel Nikko, Hong Kong, 72 Mody Road, Tsimshatsui East, Kowloon, Hong Kong , for considering, among others, the ordinary resolution for approving the Disposal is set out on pages EGM-1 to EGM-5 of the Major Transaction Circular despatched to the Shareholders together with this circular. A form of proxy for use by the Shareholders in relation to such proposed resolution at the EGM is enclosed therein.

Whether or not you are able to attend the EGM, you are requested to complete the form of proxy enclosed with the Major Transaction Circular for use at the EGM in accordance with the instructions printed thereon and return the same to the registered office of the Company at 8th Floor, New East Ocean Centre, 9 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong, as soon as possible and, in any event, not 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 adjourned meeting thereof should you so wish.

28 March 2013

CONTENTS

		Page
DEFINITIONS		1
LETTER FROM	THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
LETTER FROM	THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . .	14
LETTER FROM	INVESTEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
APPENDIX I	– PROPERTY VALUATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I – 1
APPENDIX II	– GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . .	II – 1

– i –

DEFINITIONS

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

• “Acquisition”

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）by the Company from Shum Yip Holdings pursuant to the terms and conditions of the Acquisition Agreement (as amended and supplemented by the Supplemental Acquisition Agreement)

• “Acquisition Agreement”

the acquisition agreement dated 17 January 2013 entered into among the Company and Shum Yip Holdings in respect of the Acquisition, details of which are more particularly set out in the announcement of the Company dated 22 January 2013 and the Major Transaction Circular

• “Announcement”

• the announcement of the Company dated 25 February 2013 in relation to the Disposal

• “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

• “Companies Ordinance”

the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) as amended, supplemented or otherwise modified from time to time

– 1 –

DEFINITIONS

“Company”	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
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Consideration”	approximately RMB272.4 million (equivalent to
	approximately HK$334.0 million at the exchange rate of
	RMB1=HK$1.226 on 31 July 2012), being the total amount
	payable by the Purchaser to Shum Yip Terra pursuant to the
	Sale and Purchase Agreements
“Consideration Shares”	the new Shares to be allotted and issued by the Company to
	Shum Yip Holdings as payment of the consideration under
	the Acquisition Agreement
“controlling shareholder”	has the same meaning as defined in the Listing Rules
“ Director(s)”	the director(s) of the Company
“Disposal”	the disposal of the Property by Shum Yip Terra pursuant to
	the Sale and Purchase Agreements
“EGM”	the extraordinary general meeting of the Company to be
	convened for the purpose of considering and, if thought
	fit, approving the Disposal, the Acquisition (including
	the issuance of the Consideration Shares), the Whitewash
	Waiver and the increase in authorised share capital of the
	Company
“Group”	the Company and its subsidiaries from time to time
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Board Committee”	the independent committee of the Board, constituted in
	compliance with the Listing Rules and consisting of all
	the independent non-executive Directors, to advise the
	Independent Shareholders in respect of, among others, the
	Disposal
“Independent Shareholders”	the Shareholders other than Shum Yip Holdings and its
	associates

– 2 –

DEFINITIONS

“Investec”

• “Latest Practicable Date”

• “Listing Rules”

• “Major Transaction Circular” or “MT Circular”

• “PRC”

• “Property”

• “Purchaser”

• “Sale and Purchase Agreements”

• Investec Capital Asia Limited, a corporation licensed 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, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Disposal

• 25 March 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

• the Rules Governing the Listing of Securities on the Stock Exchange

• the circular dated 28 March 2013 d espatched to the Shareholders, which contains, among other things, further information in relation to the Acquisition (including the issuance of the Consideration Shares), letters of recommendation from independent board committees, letters of advice from independent financial adviser, certain financial information and valuation reports and notice of the EGM

• the People’s Republic of China, which for the purpose of this circular excludes Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan

• 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, with a total GFA of 7,885.11 sq. m.

• 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

• seven sale and purchase agreements all dated 31 July 2012 entered into by Shum Yip Terra as vendor and the Purchaser as purchaser in relation to the sale and purchase of the Property

– 3 –

DEFINITIONS

“SFO” the 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 “Shareholder(s)” the holder(s) of the Share(s)

• “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 Shum Yip Holdings, which is ultimately wholly owned by Shenzhen Municipal People’s Government and under the administration of Shenzhen State-owned Assets Supervision and Administration Commission

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

• “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

• “substantial shareholder(s)”

has the meaning as defined in the Listing Rules

• “Supplemental Acquisition Agreement”

• a supplemental agreement to the Acquisition Agreement dated 25 February 2013 entered into between Shum Yip Holdings and the Company in relation to the Acquisition

• “Takeovers Code”

the Hong Kong Code on the Takeovers and Mergers

• “Target Site”

the parcels of land and the buildings erected thereon with a total land area of approximately 121,225.1 sq. m. and a gross floor area 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

– 4 –

DEFINITIONS

“Whitewash Waiver”	a waiver of the obligation of Shum Yip Holdings 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 Shum Yip
	Holdings and its concert parties as a result of the issue
	of the Consideration Shares pursuant to the Acquisition
	Agreement in accordance with Note 1 on dispensations
	from Rule 26 of the Takeovers Code
“GFA”	gross floor area
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“sq. m.”	square metres
“%”	per cent

• For identification purpose only

– 5 –

LETTER FROM THE BOARD

28 March 2013

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

(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,

CONNECTED TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY

INTRODUCTION

Reference is made to the Announcement regarding the Disposal. The Board announces that on 31 July 2012, Shum Yip Terra, a non-wholly owned subsidiary of the Company, entered into the Sale and Purchase Agreements with the Purchaser pursuant to which Shum Yip Terra agreed to sell, and the Purchaser agreed to purchase, the Property at a total consideration of approximately RMB272.4 million (equivalent to approximately HK$334.0 million at the then exchange rate of RMB1=HK$1.226 on 31 July 2012).

– 6 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with further information regarding details of the Sales and Purchase Agreements, letter of recommendation from the Independent Board Committee, the letter of advice from Investec and the valuation report on the Property. A separate MT Circular dated on the even date has been issued to provide you with further information regarding, among others, details of the Acquisition . An EGM will be held on Thursday, 18 April 2013 for the purpose of considering and if thought fit, approving the Disposal, the Acquisition (including the issuance of the Consideration Shares), the Whitewash Waiver and the increase in authorised share capital of the Company. A notice convening the EGM is set out on pages EGM-1 to EGM-5 of the MT Circular and a proxy form is enclosed therewith.

DISPOSAL OF PROPERTY

(a) The Sale and Purchase Agreements

The principal terms of the Sale and Purchase Agreements are summarised as follows:

Date: 31 July 2012 Parties: Shum Yip Terra, a non-wholly owned subsidiary of the Company, as vendor The Purchaser, as purchaser Subject matter: Sale and purchase of the Property Total Consideration: Approximately RMB272.4 million (equivalent to approximately HK$334.0 million at the exchange rate of RMB1=HK$1.226 on 31 July 2012)

(b) The Property

The Property comprises 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. The Property is for industrial use, and has a total GFA of 7,885.11 sq. m..

Tai Ran Building, at which the Property is situated, was developed and built by Shum Yip Terra and its construction was completed in December 2012. The book value of the Property as at the date of the Sale and Purchase Agreements was approximately RMB 67.0 million (equivalent to approximately HK$82.2 million at the then exchange rate of RMB1=HK$1.226 on 31 July 2012).

– 7 –

LETTER FROM THE BOARD

(c) The bases of the Consideration and payment

The price per sq. m. (being the relevant consideration divided by GFA) under each Sale and Purchase Agreement ranged from RMB31,826.44 to RMB42,202.73. Such price per sq. m. was determined through arm’s length negotiations between Shum Yip Terra and the Purchaser with reference to the then prevailing market prices of Tai Ran Building after taking into account the key features of the relevant units (i.e. floor level, size, interior structure, view and other relevant features) and Shum Yip Terra’s internal price control list. The price per sq. m. under the Sale and Purchase Agreements was comparable to those offered by Shum Yip Terra to other independent third party purchasers of units of the Tai Ran Building.

The Consideration was fully paid in cash by the Purchaser on 5 November 2012.

(d) Delivery of the Property

Pursuant to the Sale and Purchase Agreements, the Property shall be delivered to the Purchaser before 31 March 2013. The transfer of the title of the Property is expected to complete by 30 June 2013.

(e) Condition precedent and undertakings

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

In addition, Shum Yip Holdings has given an irrevocable undertaking in favour of the Company under the Supplemental Acquisition Agreement that if the approval for the Disposal by the Independent Shareholders is not obtained at the EGM and the Sale and Purchase Agreements are terminated accordingly, Shum Yip Holdings 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 the Purchaser (if becoming a subsidiary of the Company pursuant to the Acquisition Agreement) as a result of such termination.

– 8 –

LETTER FROM THE BOARD

IMPLICATIONS ON THE ACQUISITION

If the Disposal is not approved by the Independent Shareholders at the EGM, the Purchaser will have an additional cash amount of approximately RMB272.4 million (equivalent to approximately HK$339.4 million at the prevailing exchange rate of RMB1 = HK$1.246), instead of the interests in the Property. In such case, upon completion of the Acquisition (subject to the fulfillment and/or waiver of all the conditions precedent set out in the Acquisition Agreement), the Purchaser, which will be indirectly acquired by the Company 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 the Purchaser will be the Target Site.

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

Further details of the Acquisition are contained in the announcement dated 22 January 2013 and the Major Transaction Circular .

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Disposal was conducted on normal commercial terms and in the ordinary and usual course of the Group’s business as part of its property development business. The Purchaser had been searching for a property for its own use since September 2011. The Purchaser found the Property satisfied its requirement after the sale of units of Tai Ran Building opened to public in June 2012. The Consideration was comparable to those offered by Shum Yip Terra to other independent third party purchasers of units of Tai Ran Building in terms of the price per sq. m.. The proceeds from the Disposal is expected to be retained by the Company as general working capital.

An estimated gain of approximately RMB 133.6 million (equivalent to approximately HK$ 166.5 million at the prevailing exchange rate of RMB1=HK$ 1.246 ), being the Consideration of approximately RMB272.4 million less the book value of the Property as at 31 July 2012 of approximately RMB 67.0 million and the related transactional expenses and tax liabilities, is expected to be recorded by the Group as a result of the Disposal.

Based on the above, the Board ( excluding members of the Independent Board Committee, whose views are set out in the “Letter from the Independent Board Committee” on page 14 of this circular) are of the view that the Disposal was entered into in the ordinary and usual course of business of the Group and on normal commercial terms and the terms of the Sale and Purchase Agreements are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 9 –

LETTER FROM THE BOARD

GENERAL INFORMATION

The Purchaser is principally engaged in the holding, investment and development of the Target Site.

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. are under construction. The Group also held approximately 600,000 sq. m. (GFA) of investment properties at prime locations in Shenzhen.

LISTING RULES IMPLICATIONS

As at the date of the Sale and Purchase Agreements, the Purchaser was an indirect wholly owned subsidiary of Shum Yip Holdings, the direct controlling shareholder of the Company, holding approximately 43.9 % interest in the issued share capital of the Company at the time. Therefore, the Purchaser was a connected person of the Company.

As one of the applicable percentage ratios, being the consideration ratio, for the Disposal slightly exceeded 5% ( namely, approximately 5.25%) and the Consideration exceeded HK$10 million, the Disposal is subject to the reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.17 of the Listing Rules. The other applicable percentage ratio, being the assets ratio, was only 0.81%, which in turn would have rendered the Disposal as a connected transaction which is only subject to the reporting and announcement requirements. The Company did not comply with reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.17 of the Listing Rules until the date of the Announcement. The Company had failed to recogni se that the Disposal would amount to a nonexempt connected transaction under Chapter 14A of the Listing Rules – this was inadvertent and un-intentional.

The Company has admitted the above breach of Rule 14A.17 of the Listing Rules to the Stock Exchange and has initiated the following remedial steps which were undertaken by the Company on an urgent basis:

• the Board appointed the Independent Board Committee, for the purpose of, among others, dealing with, and rectifying the breach of Rule 14A.17 of the Listing Rules;

• the Independent Board Committee reviewed and considered the formal valuation of the Property (which was sought for the purpose of the Acquisition);

– 10 –

LETTER FROM THE BOARD

• with the assistance from external legal advisers, the Independent Board Committee conducted an investigation to identify the cause of the breach. The investigation concluded that the breach was an inadvertent oversight and an isolated and one-off incident. The Independent Board Committee found that the Company’s management has dealt with the breach in a responsible, pro-active and transparent manner. External legal advice was promptly sought and the Company took immediate steps to comply with Rule 14A.17 of the Listing Rules;

• the Independent Board Committee, upon receiving legal advice from external legal advisers, has made recommendations as to the internal control enhancements that should be introduced within the Group to prevent similar non-compliance in the future. These internal control enhancements include:

• regular and continuous trainings to ensure that all relevant personnel are fully familiar with and understand the connected transaction requirements under the Listing Rules;

• appointment of a disclosure officer in the Company and a disclosure officer in each subsidiary of the Company to ensure that transactions that may have connected transaction implications under the Listing Rules are identified and promptly reported; and

• set up and maintain a centralised database of all known connected parties and connected transactions to serve as a quick source of reference for checking whether a transaction may be a connected transaction;

• the Company has already reached an agreement with the Purchaser whereby the Disposal under the Sale and Purchase Agreements shall be made conditional upon the approval of the Independent Shareholders and in the event that the Independent Shareholders’ approval is not obtained, the Purchaser will enter into the relevant termination agreements with the effect that the Sale and Purchase Agreements will be terminated with no financial loss to Shum Yip Terra ;

Shum Yip Holdings and its associates will abstain from voting on the ordinary resolution to be proposed at the EGM to approve the Disposal .

Notwithstanding that the executive Directors are either directors or vice presidents of Shum Yip Holdings and Shum Yip Group, and one of the non-executive Directors (namely, Mr. HUANG Yige) is a director of Shum Yip Holdings and Shum Yip Group, each of such Directors does not have a material interest in the Disposal for which he shall be required to abstain from voting on the board resolution approving the Disposal pursuant to the Company’s articles of association, as none of them is beneficially interested in any shares in Shum Yip Holdings or Shum Yip Group or has any personal interest in the Disposal. However, in line with the remedial measures undertaken by the Company in this particular case, Mr. LU Hua, Mr. MOU Yong and Mr. HUANG Yige (who are also directors of Shum Yip Holdings and Shum Yip Group) voluntarily abstained from voting in the board resolution approving the Disposal. Furthermore, the Disposal is subject to the approval of the Independent Shareholders. The Company wishes to clarify that in respect of the Group’s acquisition

– 11 –

LETTER FROM THE BOARD

of interests in a company from Shum Yip Holdings’ subsidiary as disclosed in the announcement of the Company dated 27 July 2012, Mr. LU Hua, Mr. HUANG Yige, Mr. MOU Yong 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 Shum Yip Holdings considering that such acquisition was not required to be approved by the independent Shareholders. The Company was then in fact taking a cautious approach.

EXTRAORDINARY GENERAL MEETING

A notice convening the EGM is set out on pages EGM-1 to EGM-5 of the Major Transaction Circular. The EGM will be convened for the purpose of considering and, if thought fit, passing the ordinary resolutions to approve the Disposal, the Acquisition (including the issuance of the Consideration Shares), the Whitewash Waiver and the increase in authorised share capital of the Company.

As at the Latest Practicable Date, and to the best knowledge, belief and information of the Directors having made all reasonable enquiries, save for Shum Yip Holdings and its associate, no Shareholder is required under the Listing Rules to abstain from voting on the ordinary resolution to approve the Disposal at the EGM.

A form of proxy for use for the abovementioned ordinary resolutions at the EGM is sent to the Shareholders together with the Major Transaction Circular. Whether or not the Shareholders are able to attend the EGM, the Shareholders are requested to complete and return the form of proxy enclosed with the Major Transaction Circular in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time for holding of the EGM or adjournment thereof. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting at the EGM or any adjourned meeting thereof should the Shareholders so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders at the EGM must be taken by poll.

INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising of 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 consider the terms of the Sale and Purchase Agreements and to advise the Independent Shareholders on the same. Investec has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in this regard.

Your attention is drawn to the letter from the Independent Board Committee as set out on page 14 of this circular which contains its recommendation to the Independent Shareholders as to voting in relation to the Disposal at the EGM.

– 12 –

LETTER FROM THE BOARD

Your attention is also drawn to the letter from Investec as set out on pages 15 to 22 of this circular, which contains its advice to the Independent Board Committee and the Independent Shareholders in relation to the Disposal.

RECOMMENDATION

The Independent Board Committee, after taking into account the advice from Investec, consider that (i) the Disposal was entered into in the ordinary and usual course of business of the Group and on normal commercial terms and the terms of the Sale and Purchase Agreements are fair and reasonable so far as the Company and the Independent Shareholders are concerned ; and (ii) the transactions under the Sale and Purchase Agreements are in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Disposal . The Letter from the Independent Board Committee is set out on page 14 of this circular.

ADDITIONAL INFORMATION

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

By order of the Board Shenzhen Investment Limited LU Hua Chairman

– 13 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> 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,

CONNECTED TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY

We refer to the Announcement and th is circular of the Company on the even date (the “ Circular ”) of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context requires otherwise. We, being the independent nonexecutive Directors, have been appointed as the Independent Board Committee to advise you as an Independent Shareholder in connection with the Disposal, details of which are set out in the Letter from the Board contained in the Circular.

Having considered the Disposal, and the advice and opinion of Investec in relation thereto as set out on pages 15 to 22 of the Circular, we are of the opinion that (i) the Disposal was entered into in the ordinary and usual course of business of the Group and on normal commercial terms and the terms of the Sale and Purchase Agreements are fair and reasonable so far as the Company and the Independent Shareholders are concerned; and (ii) the transactions under the Sale and Purchase Agreements are in the interests of the Company and the Shareholders as a whole. We therefore recommend that you vote in favour of the ordinary resolution to be proposed at the EGM to approve the Disposal.

Your faithfully

Independent Board Committee

Mr. WONG Po Yan

Mr. WU Wai Chung, Michael

Mr. LI Wai Keung

Independent non-executive Directors

– 14 –

LETTER FROM INVESTEC

The following is the text of the letter of advice from Investec Capital Asia Limited to the Independent Board Committee and the Independent Shareholders prepared for inclusion in this circular.

Investec Capital Asia Ltd

Room 3609-3613, 36/F, Two International Finance Centre 8 Finance Street, Central, Hong Kong 香港中環金融街8號國際金融中心二期36樓3609-3613室 Tel/電話: (852) 3187 5000 Fax/傳真: (852) 2501 0171 www.investec.com

28 March 2013

To the Independent Board Committee and

the Independent Shareholders of Shenzhen Investment Limited

Dear Sirs,

CONNECTED TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY

I. INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Disposal, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular dated 28 March 2013 (the “ Circular ”) of which this letter forms part. Capitalised terms used in this letter have the same meanings as those defined in the Circular unless the context otherwise specifies.

The Company announced on 31 July 2012, Shum Yip Terra, a non-wholly owned subsidiary of the Company, entered into the Sale and Purchase Agreements with the Purchaser pursuant to which Shum Yip Terra agreed to sell, and the Purchaser agreed to purchase, the Property at a total consideration of approximately RMB272.4 million (equivalent to approximately HK$334.0 million at the then exchange rate of RMB1=HK$1.226 on 31 July 2012).

As at the date of the Sale and Purchase Agreements, the Purchaser was an indirect wholly owned subsidiary of Shum Yip Holdings, the direct controlling Shareholder then holding approximately 43.9% interest in the issued share capital of the Company. Therefore, the Purchaser was a connected person of the Company.

– 15 –

LETTER FROM INVESTEC

As one of the applicable percentage ratios, being the consideration ratio, for the Disposal slightly exceeded 5% (namely, approximately 5.25%) and the Consideration exceeded HK$10 million, the Disposal is subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Shum Yip Holdings and its associates will abstain from voting in respect of the ordinary resolution approving the Disposal at the EGM.

II. THE INDEPENDENT BOARD COMMITTEE

The Board currently consists of (i) four executive Directors, namely Mr. LU Hua, Mr. MOU Yong, Mr. LIU Chong and Mr. WANG Minyuan; (ii) two non-executive Directors, namely Dr. WU Jiesi and Mr. HUANG Yige; and (iii) three independent non-executive Directors, namely Mr. WONG Po Yan, Mr. WU Wai Chung, Michael and Mr. LI Wai Keung.

The Independent Board Committee comprising Mr. WONG Po Yan, Mr. WU Wai Chung, Michael and Mr. LI Wai Keung, being all independent non-executive Directors, has been established to advise the Independent Shareholders on the fairness and reasonableness of the terms of the Sale and Purchase Agreements and whether the Disposal is in the interests of the Company and the Shareholders as a whole and to advise the Independent Shareholders on how to vote in respect of the ordinary resolution approving the Disposal at the EGM.

We have been appointed to advise the Independent Board Committee and the Independent Shareholders in these respects and to give our opinion in relation to the Disposal for the Independent Board Committee’s consideration when making its recommendation to the Independent Shareholders.

Apart from the normal advisory fee payable to us in connection with our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders, no arrangement exists whereby we shall receive any other fees or benefits from the Company.

III. BASIS AND ASSUMPTIONS OF THE ADVICE

In formulating our advice, we have relied solely on the statements, information, opinions and representations contained in the Circular and the information and representations provided to us by the Group and/or its senior management staff (the “ Management ”) and/or the Directors. We have assumed that all such statements, information, opinions and representations contained or referred to in the Circular or otherwise provided or made or given by the Group and/or the Management and/ or the Directors and for which it is/they are solely responsible were true and accurate and valid at

– 16 –

LETTER FROM INVESTEC

the time they were made and given and continue to be true and valid as at the Latest Practicable Date. We have assumed that all the opinions and representations for matters relating to the Group made or provided by the Directors contained in the Circular have been reasonably made after due and careful enquiry. We have also sought and obtained confirmation from the Company and/or the Management and/or the Directors that no material facts have been omitted from the information provided and referred to in the Circular.

We consider that we have reviewed all currently available information and documents which are made available to us to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our advice. We have no reason to doubt the truth, accuracy and completeness of the statements, information, opinions and representations provided to us by the Group and/or the Management and/or the Directors and their respective advisers or to believe that material information has been withheld or omitted from the information provided to us or referred to in the aforesaid documents. We have not, however, carried out any independent verification of the information provided, nor have we conducted any independent investigation into the business and affairs of the Group.

IV PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion regarding the Sale and Purchase Agreements, we have taken into consideration the following principal factors:

1. Terms of the Sale and Purchase Agreements

The principal terms of the Sale and Purchase Agreements are summarised as follows:

Date: 31 July 2012 Parties: Shum Yip Terra, a non-wholly owned subsidiary of the Company, as vendor

The Purchaser, as purchaser

Subject matter: Sale and purchase of the Property

Consideration: Approximately RMB272.4 million (equivalent to approximately HK$334.0 million at the exchange rate of RMB1=HK$1.226 on 31 July 2012)

The Consideration was fully paid in cash by the Purchaser on 5 November 2012.

– 17 –

LETTER FROM INVESTEC

2. Information on the Property

As set out in the Letter from the Board, the Property comprises 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. The Property is for industrial use, and has a total GFA of 7,885.11 sq. m..

Tai Ran Building, at which the Property is situated, was developed and built by Shum Yip Terra and its construction was completed in December 2012. The book value of the Property as at the date of the Sale and Purchase Agreements was approximately RMB67 million (equivalent to approximately HK$82.2 million at the then exchange rate of RMB1=HK$1.226 on 31 July 2012).

3. Reasons for and benefits of the Disposal

As stated in the Letter from the Board, the Disposal was conducted on normal commercial terms and in the ordinary and usual course of the Group’s business as part of its property development business. The Purchaser intended to acquire a property for its own use and found the Property satisfied its requirement.

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 disclosed in the annual report of the Group for the financial year ended 31 December 2011, the Group generated a revenue of approximately HK$7,320.58 million for the year ended 31 December 2011 where approximately HK$5,053.06 million or approximately 69.0% of the total revenue was attributed to the sale of property to customers. 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. are under construction. The Group also held approximately 600,000 sq. m. (GFA) of investment properties at prime locations in Shenzhen.

An estimated gain of approximately RMB133.6 million (equivalent to approximately HK$166.5 million at the prevailing exchange rate of RMB1=HK$1.246), being the Consideration of approximately RMB272.4 million less the book value of the Property as at 31 July 2012 of approximately RMB67.0 million and the related transactional expenses and tax liabilities, is expected to be recorded by the Group as a result of the Disposal. The proceeds from the Disposal is expected to be retained by the Company as general working capital.

– 18 –

LETTER FROM INVESTEC

Having considered that (i) the Group is principally engaged in property development and the Disposal forms part of the Group’s ordinary and usual course of business; and (ii) the Disposal will have a positive impact on the earnings and the financial position of the Group as mentioned above, we concur with the Directors’ view that the Disposal was entered into in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole.

4. The Consideration

Pursuant to the Sale and Purchase Agreements, the Consideration was approximately RMB272.4 million. As noted from the Letter from the Board, the price per sq. m. was determined through arm’s length negotiations between Shum Yip Terra and the Purchaser with reference to the then prevailing market prices of Tai Ran Building after taking into account the key features of the relevant units (i.e. floor level, size, interior structure, view and other relevant features) and Shum Yip Terra’s internal price control list. As stated in the Letter from the Board, the price per sq. m. under the Sale and Purchase Agreements was comparable to those offered by Shum Yip Terra to other independent third party purchasers of units of the Tai Ran Building.

In assessing the fairness and reasonableness of the Consideration, we have reviewed and taken into account of (i) samples of sale and purchase agreements entered into between Shum Yip Terra and other independent third party purchasers of units of the Tai Ran Building; and (ii) the valuation of the Property as of 31 December 2012, appraised by Asset Appraisal Limited (the “ Valuer ”) the text of which is set out in the section headed “Property valuation” in Appendix I to the Circular (the “ Valuation Report ”).

For each of the Sale and Purchase Agreements, we noted that price per sq.m. (being the relevant consideration divided by GFA) for each of the units of the Property, namely 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 ranged from RMB31,826.44 to RMB42,202.73 (the “ Range of Consideration ”).

We have reviewed a sample of sale and purchase agreements (the “ Sample Agreements ”) entered into between Shum Yip Terra and other independent third party purchasers of units of the Tai Ran Building between the period of 29 June 2012 and 5 February 2013 . When selecting the Sample Agreements, we have made reference to the floor levels of the Property i.e. 5th, 6th, 7th and 8th floor of Tai Ran Building. We have reviewed 29 Sample Agreements, representing all of the sale and purchase agreements entered into between Shum Yip Terra and other independent third party purchasers of units on the 5th, 6th, 7th and 8th floor of Tai Ran Building. Given that the Sample Agreements cover all of the sold units on the same floors as the Property, we are of the view that the Sample Agreements

– 19 –

LETTER FROM INVESTEC

are fair and representative samples for comparable purposes. The transacted price per sq.m. (being the relevant consideration divided by GFA) (the “ Historical Transacted Prices ”) ranged from approximately RMB 31, 504. 56 to RMB 36,037.00. The lower end of the Range of Consideration is comparable to the lower end of the Historical Transacted Prices, while the upper end of the Range of Consideration is higher than any of the Historical Transacted Prices.

In addition, we have reviewed the Valuation Report and have discussed with the Valuer and understand that the Valuer has adopted the comparison approach in assessing the market value of the Property. In adopting the comparison approach, the Valuer has made reference to price information of comparable properties of similar size, character and location which have been analysed and carefully selected in order to arrive at a fair comparison of capital values. We have also discussed with the Valuer on the underlying assumptions in assessing the market value of the Property. We understand from the Valuer that the approach adopted including the underlying a ssumptions, is commonly used for arriving at the market value of properties similar to the Property. Based on our discussion with the Valuer, we consider that the approach, together with the underlying assumptions, adopted by the Valuer is appropriate.

Moreover, we note that the Consideration is in line with the valuation of the Property of RMB272.4 million as of 31 December 2012, as appraised by the Valuer with the Valuer also confirming that there was no material change in the market value of the Property between the date of the Sale and Purchase Agreements i.e. 31 July 2012 and the date of valuation i.e. 31 December 2012. As stated in the Valuation Report, we also noted that the assessed market price per sq. m. (being the relevant market value divided by GFA) for each of the units of the Property, namely 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 ranged from approximately RMB31,819.00 to RMB42,199.00 (the “ Valuer Range of Market Value ”).

We have also discussed and understand from the Management that Shum Yip Terra’s internal price control list was set with reference to the prevailing market price at the launch of the sale of units of Tai Ran Building. However, in accessing the fairness and reasonableness of the Consideration, we have relied on the comparison between the Range of Consideration and (i) the Historical Transacted Prices; and (ii) the Valuer Range of Market Value as mentioned above instead of the comparison with the internal price control list.

Given that (i) the lower end of the Range of Consideration is comparable to the lower of the Historical Transacted Prices, while the upper end of the Range of Consideration is higher than any of the Historical Transacted Prices; and (ii) the Consideration is in line with the valuation of the Property and the Range of Consideration is comparable to the Valuer Range of Market Value as appraised by the Valuer, we are of the view that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 20 –

LETTER FROM INVESTEC

5. Other terms and conditions under the Sale and Purchase Agreements

We have reviewed and compared other terms (save for the Consideration – please refer to our analysis set out under the section headed “4. The Consideration” above), including payment terms and payment method set out in the Sale and Purchase Agreements and the Sample Agreements and noted that the terms under the Sale and Purchase Agreements are no less favourable to Shum Yip Terra or the Company than those available to independent third party purchasers of units of the Tai Ran Building.

6. Condition precedent and undertakings

As set out in the Letter from the Board, pursuant to the undertaking letter given by the Purchaser to Shum Yip Terra dated 25 February 2013, the Purchaser has agreed that the sale and purchase of the Property under the Sale and Purchase Agreements shall be conditional upon the approval of the Independent Shareholders at the EGM, and the Purchaser has irrevocably undertaken in favour of Shum Yip Terra that among other things, in the event that the aforesaid shareholders’ approval is not obtained, the Purchaser will enter into relevant termination agreement(s) and/or arrangements with Shum Yip Terra in connection with the termination of the Sale and Purchase Agreements (the “ Termination ”) to the effect that the Sale and Purchase Agreements will be terminated and will not be completed with the Consideration being refunded to the Purchaser by Shum Yip Terra.

In addition, Shum Yip Holdings has given an irrevocable undertaking in favour of the Company under the Supplemental Acquisition Agreement that if the approval for the Disposal by the Independent Shareholders is not obtained at the EGM and the Sale and Purchase Agreements are terminated accordingly, Shum Yip Holdings 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 the Purchaser (if becoming a subsidiary of the Company pursuant to the Acquisition Agreement) as a result of such termination.

We are of the view that the abovementioned arrangement is in the interest of the Company and the Shareholders as a whole as the Company will be indemnified for any losses associated with the Termination, in the event that the Disposal is not approved by the Independent Shareholders at the EGM.

– 21 –

LETTER FROM INVESTEC

7. Implication on the Acquisition

Shareholders should also note that as set out in the Letter from the Board, if the Disposal is not approved by the Independent Shareholders at the EGM, the Purchaser will have an additional cash amount of approximately RMB272.4 million (equivalent to approximately HK$339.4 million at the prevailing exchange rate of RMB1=HK$1.246), instead of the interests in the Property. In such case, upon completion of the Acquisition (subject to the fulfilment and/or waiver of all the conditions precedent set out in the Acquisition Agreement), the Purchaser, which will be indirectly acquired by the Company 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 the Purchaser will be the Target Site.

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

V. RECOMMENDATION

Having considered the above principal factors and reasons, we are of the opinion that the Sale and Purchase Agreements were entered into in the ordinary and usual course of business of the Group and in the interest of the Company and the Shareholders as a whole and the terms thereof are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we would recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the ordinary resolution to approve the transactions under the Sale and Purchase Agreements at the EGM.

Yours faithfully For and on behalf of

Investec Capital Asia Limited Jimmy Chung Managing Director Corporate Finance

– 22 –

PROPERTY VALUATION

APPENDIX I

The following is the text of a letter 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 of the Property as at 31 December 2012 .

�������������

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,

Unit No. 5F03 on Level 5, Unit Nos. 6A01, 6F01 and 6F02 on Level 6 Unit Nos. 7F01 and 7F02 on Level 7 and Unit No. 8F01 on Level 8, Tai Ran Building, Binhe Da Road, Futian District, Shenzhen City, Guangdong Province, the People’s Republic of China (the “PRC”)

In accordance with the instructions from Shenzhen Investment Ltd. (the “ Company ”) to value the captioned property interests (the “ Property ”) which have been agreed to be sold by Shum Yip Terra Holdings Co., Ltd. 深圳泰然（集團）股份有限公司, a non-wholly owned subsidiary of the Company, (the “ Vendor ”) to Shenzhen Kezhigu Investment Co., Ltd.（深圳市科之谷投資有限 公司, the “ Purchaser ”）, we confirm that we have inspected the Property, 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 Property as at 31 December 2012 (the “ date of valuation ”).

BASIS OF VALUATION

Our valuation of the Property 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”.

I – 1

PROPERTY VALUATION

APPENDIX I

As the Property was agreed to be acquired by the Purchaser from the Vendor on pre-sale basis, our valuation has been made on the basis that the Vendor shall, upon completion of the property transaction of the Property, deliver the Property to the Purchaser on full completion state within the prescribed period as agreed by both parties without undue delay.

TITLESHIP

We have been provided with copies of legal documents regarding the Property. However, we have not verified ownership of the Property and the existence of any encumbrances that would affect its ownership.

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 owner’s land use rights in the Property. Its material content has been summari sed in the valuation certificate attached herewith.

VALUATION METHODOLOGY

The Property has 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.

ASSUMPTIONS

Our valuation has been made on the assumption that the Vendor sells the Property 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 Property.

As the Property is held by the Vendor by means of long term Land Use Rights granted by the Government, we have assumed that the owner or his successor-in-title has free and uninterrupted rights to use the Property for the whole of its unexpired term 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.

LIMITING CONDITIONS

No allowance has been made in our report for any charges, mortgages or amounts owing on the Property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and outgoings of an onerous nature, which could affect its value.

I – 2

PROPERTY VALUATION

APPENDIX I

We have relied to a very considerable extent on the information given by the Company or the Vendor 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 floor areas in respect of the Property but have assumed that the floor areas shown on the documents and official floor 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 Property was last inspected by TSE Wai Leung on 10 January 2013. We have inspected the exterior and, where possible, the interior of the Property. 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.

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.

In valuing the Property, we have complied with all the requirements contained in 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 valuation certificate is attached herewith.

Yours faithfully, for and on behalf of

Asset Appraisal Limited

Tse Wai Leung

MFin 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.

I – 3

PROPERTY VALUATION

APPENDIX I

VALUATION CERTIFICATE

Property interests previously held by the Group for sale

Market Value in Particulars of Existing State as at Property Description and tenure occupancy 31 December 2012 RMB Unit No. 5F03 on The Property comprises a total of 7 The property is currently 272,400,000 Level 5, workshop units within a 25-storey (plus vacant. Unit Nos. 6A01, 6F01 2 basement levels) industrial building and 6F02 on Level 6, which was newly completed at the end Unit Nos. 7F01 and of 2012. 7F02 on Level 7 and Unit No. 8F01 on The gross floor area of the Property is Level 8, 7,885.11 square metres. Tai Ran Building, Binhe Da Road, The land use rights of the Property Futian District, have been granted for a term of 50 Shenzhen City, years commencing on 30 June 2007 and Guangdong Province, expiring on 29 June 2057 for industrial the PRC uses.

Notes:

1. 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.

2. 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. (the “ Vendor ”) and Shenzhen Kezhigu Investment Co., Ltd. 深圳市科之谷投資有限公司 (the “ Purchaser ” ) on 31 July 2012, the latter agreed to acquire the Property from the former at a total consideration of RMB272,402,793 which has been settled in full. We agreed to be confirmed that there is no material change in the market value of the Property between the agreement date i.e. 31 July 2012 and the date of valuation i.e. 31 December 2012.

3. Pursuant to the undertaking letter given by the Purchaser to the Vendor on 25 February 2013, the Purchaser 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 the Purchaser has irrevocably undertaken in favour of the Vendor that in the event that the aforesaid shareholders’ approval is not obtained, the Purchaser shall enter into relevant termination agreement(s) and/or arrangements with the Vendor 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 the Purchaser by the Vendor.

I – 4

APPENDIX I

PROPERTY VALUATION

1. The breakdown of market value of the property is as follow:–

Unit No. 5F03 6A01 6F01 6F02 7F01 7F02 8F01 Total:	Market Value in Existing State as at 31 December 2012 (RMB) 14,860,000 50,870,000 60,330,000 27,100,000 33,680,000 48,410,000 37,150,000 272,400,000	Unit Rate (RMB/sq.m.) About 31,819 33,241 33,672 33,318 34,585 33,886 42,199

1. The PRC Legal Opinion is summari sed as follows:

2. 5.1 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 the Vendor and the Purchaser on 31 July 2012 by virtue of which the Property was agreed to be acquired by the Purchaser from the Vendor. As provided in the Sale and Purchase (PreSale) Agreements, the purchase consideration should be fully settled by the Purchaser on the agreement date.

3. 5.2 The Sale and Purchase (Pre-Sale) Agreements were filed to the Shenzhen Property Title Registration Centre on 8 August 2012.

4. 5.3 The Vendor 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.

5. 5.4 The purchase consideration was settled in full to the Vendor by the Purchaser on 5 November 2012.

6. 5.5 According to a written confirmation issued by the Vendor on 18 January 2013, the payment of the purchase consideration by the Purchaser on 5 November 2012 constituted full and final settlement for the property transactions and the Vendor waived its rights to take any legal action against the Purchaser on the ground of late payment.

7. 5.6 On 25 February 2013, the Purchaser issued an undertaking letter to the Vendor 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 the Vendor in case where the transaction is not approved by the Independent Shareholders of the Company at the EGM.

8. 5.7 The Sale and Purchase (Pre-Sale) Agreements are legal and valid. By virtue of the aforesaid written confirmation of 18 January 2013 issued by the Vendor, the Purchaser shall not be subject to any legal liability regarding the late payment of the purchase consideration.

9. 5.8 Up to the Latest Practicable Date, as confirmed by the Vendor and the Purchaser, with the exception of the conditions of the undertaking letter as mentioned above, property was free from encumbrance.

I – 5

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This document, for which the Directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this document 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 document misleading.

2. 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

II – 1

GENERAL INFORMATION

APPENDIX II

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 and to 19 July 2014, and up to 100% at any time from 19 July 2014 to 19 July 2015.

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.

As at the Latest Practicable Date, save for Mr. LU Hua, Mr. MOU Yong and Mr. HUANG Yige being the directors of Shum Yip Holdings and Shum Yip Group and Mr. LIU Chong and Mr. WANG Mingyuan being vice presidents of Shum Yip Holdings 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.

II – 2

GENERAL INFORMATION

APPENDIX II

3. FURTHER INFORMATION CONCERNING DIRECTORS

(a) Directors’ service contracts

As at the Latest Practicable Date, none of the Directors had entered, or was proposing to enter, into any service contracts with any member of the Group (excluding contracts expiring or determinable by such member of the Group within one year without payment of compensation (other than statutory compensation)).

(b) Directors’ interest 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 associate was interested in any business apart from the Group’s business, which competed or was likely to compete, either directly or indirectly with the Group’s business.

(c) Directors interests in assets

None of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of or leased to any member of the Group or proposed to be so acquired, disposed of or leased since 31 December 201 2, being the date to which the latest published audited accounts of the Company were made up, and up to the Latest Practicable Date.

(d) Directors interests in contracts

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

II – 3

GENERAL INFORMATION

APPENDIX II

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial position or trading prospects of the Company since 31 December 201 2, the date to which the latest audited financial statements of the Company were made up.

5. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert or professional adviser who have given opinion or advice contained in this circular:

Name Qualification Investec a corporation licensed 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

Asset Appraisal Limited Professional property valuer (“ Asset Appraisal ”) King & Wood Mallesons PRC legal adviser (“ KWM ”)

Each of Investec, Asset Appraisal and KWM has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they respectively appear.

6. INTERESTS OF EXPERT

As at the Latest Practicable Date, each of Investec, Asset Appraisal and KWM :

• (a) did not have any shareholding in or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and

• (b) was not interested, directly or indirectly, in any assets which have been or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 201 2, being the date to which the latest published audited accounts of the Company were made up.

II – 4

GENERAL INFORMATION

APPENDIX II

7. GENERAL

• (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 Company’s Hong Kong branch share registrar and transfer office is Tricor Standard Limited, which is situated at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (c) As at the Latest Practicable Date, Mr. LU Hua, Mr. MOU Yong and Mr. HUANG Yige were the directors of Shum Yip Holdings and Shum Yip Group while Mr. LIU Chong and Mr. WANG Mingyuan were the vice presidents of Shum Yip Holdings and Shum Yip Group.

• (d) The English text of this circular shall prevail over its Chinese text for the purpose of interpretation.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the below documents will be available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m. (other than Saturdays, Sunday 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 from 28 March 2013 up to and including the date of the EGM on 18 April 2013:

• (a) the Sale and Purchase Agreements;

• (b) the Acquisition Agreement;

• (c) the Supplemental Acquisition Agreement;

• (d) the undertaking letter given by the Purchaser to Shum Yip Terra dated 25 February 2013;

• (e) the letter from the Board, the text of which is set out in the section headed “Letter from the Board” of this circular;

• ( f) the letter of recommendation from the Independent Board Committee, the text of which is set out on page 14 of this circular;

• ( g) the letter of advice from Investec, the text of which is set out on pages 15 to 22 of this circular;

• ( h) the valuation report on the Property , the text of which is set out on pages I-1 to I-5 of this circular; and

• ( i) the written consents from Investec, Asset Appraisal and KWM as referred to in paragraph headed “Qualification and consent of expert” in this appendix.

II – 5