Rykadan Capital Limited - Proxy Solicitation & Information Statement 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

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

SUNDART INTERNATIONAL HOLDINGS LIMITED 承達國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

VERY SUBSTANTIAL DISPOSAL

DISPOSAL OF 85% INTEREST IN SUNDART HOLDINGS

AND

CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

A letter from the board of directors of Sundart International Holdings Limited (the “Company”) is set out on pages 5 to 32 of this circular.

A notice convening an extraordinary general meeting of the Company (the “EGM”) to be held at 3:00 p.m. on 20 June 2012 at Centenary Room I, Marco Polo Hongkong Hotel, 3 Canton Road, Harbour City, Tsim Sha Tsui, Hong Kong, is set out on pages 64 to 65 of this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as practicable. The form of proxy should be returned to the Company’s branch share registrar, Tricor Investor Services Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong, 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 at any adjourned meeting thereof) should you so wish.

1 June 2012

			Page
Definitions . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			5
Appendix I	–	Financial Information on the Group . . . . . . . . . . . . . . . . . . . . . .	33
Appendix II	–	Financial Information on the Disposal Group . . . . . . . . . . . . . . .	34
Appendix III	–	Unaudited Pro Forma Financial Information on
		the Remaining Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	45
Appendix IV	–	General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	57
Notice of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			64

– i –

DEFINITIONS

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

“Agreement” the sale and purchase agreement dated 16 May 2012 entered into between the Company and the Purchaser in relation to the Disposal
“Beijing Jangho” 北京江河幕牆股份有限公司 (Beijing Jangho Curtain Wall Co., Ltd.), a joint stock company incorporated in the PRC principally engaged in the business of the research, design, production and construction of curtain walls and related consultation service, the A shares of which are listed on the SSE (Stock Code: 601886)
“BVI” British Virgin Islands
“Board” the board of Directors
“Company”
Sundart International Holdings Limited, the shares of which are listed on the Stock Exchange (Stock Code: 2288)
“Completion” completion of the Disposal in accordance with the Agreement
“Completion Accounts” the unaudited consolidated balance sheet of the Disposal Group as at the Completion Accounts Date and the unaudited consolidated income statement of the Disposal Group for the period from 1 February 2012 to the Completion Accounts Date and all the notes and records thereto, as certified to be true by two directors of Sundart Holdings
“Completion Accounts Date” the last day of the calendar month immediately preceding the Completion Date
“Completion Date”
the date when Completion shall take place, being the fifth business day after all the Conditions have been satisfied or such other date as may be agreed in writing between the Company and the Purchaser
“Conditions”
the conditions precedent to Completion as set out in the section titled “Conditions to Completion” in the “Letter from the Board” in this circular
“Director(s)”

the director(s) of the Company, including independent non-executive directors

– 1 –

DEFINITIONS

“Disposal” the disposal of 4,335 shares of US$1 each in Sundart Holdings (representing 85% of the issued share capital of Sundart Holdings) by the Company to the Purchaser in accordance with the terms and conditions of the Agreement
“Disposal Group” Sundart Holdings and its subsidiaries “EGM” the extraordinary general meeting of the Company to be convened to consider and, if thought fit, to approve the Agreement and the Shareholders’ Agreement and the transactions contemplated thereunder
“Global Offering” the offering of Shares for subscription by the public in Hong Kong and the placing of the Shares with professional, institutional and other investors as described in the Prospectus
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“independent third party(ies)” third party(ies) independent of the Company, its directors, chief executives or substantial Shareholders
“KLR Holdings” Kailong REI Holdings Limited, a member of the Remaining Group which is owned as to 29.36% by the Company
“Kwun Tong Project” the redevelopment project relating to the property located at 135-137 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong owned by Vital Success
“Latest Practicable Date” 29 May 2012, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular
“Listing Rules” Rules Governing the Listing of Securities on the Stock Exchange
“Macau” the Macau Special Administrative Region of the PRC
“Mr. Chan” Mr. Chan William, an executive Director and a substantial Shareholder

– 2 –

DEFINITIONS

“Mr. Leung” Mr. Leung Kai Ming, an executive Director and the chief operating officer of the Company “Mr. Ng” Mr. Ng Tak Kwan, an executive Director and a substantial Shareholder “Mr. Wong” Mr. Wong Kim Hung Patrick, a non-executive Director and a Shareholder “PRC” the People’s Republic of China, excluding Hong Kong, Macau and Taiwan for the purposes of this circular “Prospectus” the prospectus of the Company dated 11 August 2009 “Purchaser” Jangho Curtain Wall Hongkong Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of Beijing Jangho “Remaining Group” the Group immediately after Completion “RMB” Renminbi, the lawful currency of the PRC “Sale Shares” 4,335 shares of US$1 each in Sundart Holdings, representing 85% of the issued share capital of Sundart Holdings “Scenemay” Scenemay Holdings Limited, a substantial Shareholder “SFO” The Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong “Share(s)” share(s) of HK$0.01 each in the Company “Shareholder(s)” the holder(s) of the Share(s) “Shareholders’ Agreement” the shareholders’ agreement to be entered into among the Company, the Purchaser and Sundart Holdings at Completion “SSE” Shanghai Stock Exchange “Stock Exchange” The Stock Exchange of Hong Kong Limited

– 3 –

DEFINITIONS

“STP Guarantee” the guarantee existing as at the date of the Agreement which is given by Sundart Timber Products Company Limited in connection with a bank facility of approximately HK$737,500,000 granted by DBS Bank (Hong Kong) Limited advanced to Vital Success in June 2011
“Sundart Guarantees” the guarantees given by the Company in connection with bank facilities of approximately HK$1,296,150,000 granted to the Disposal Group as at 31 January 2012
“Sundart Holdings” Sundart Holdings Limited, a company incorporated in the BVI and a wholly-owned subsidiary of the Company
“Tiger Crown” Tiger Crown Limited, a company wholly-owned by the Company’s executive Director, Mr. Chan, which is a substantial Shareholder
“US$” United States dollars, the lawful currency of the United States
“Vital Success” Vital Success Development Limited, a member of the Remaining Group which is owned by the Company as to 65%
“2011 Annual Report” the 2011 annual report of the Company published in July 2011
“2011 Interim Report” the 2011 interim report of the Company published in December 2011
“%” per cent.

English names of the PRC established companies in this circular are only translations of their official Chinese names. In case of inconsistency, the Chinese names prevail.

– 4 –

LETTER FROM THE BOARD

SUNDART INTERNATIONAL HOLDINGS LIMITED 承達國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

Executive Directors:

Mr. Chan William（陳偉倫） (Chairman) Mr. Ng Tak Kwan（吳德坤） (Chief Executive Officer) Mr. Leung Kai Ming（梁繼明） (Chief Operating Officer) Mr. Yip Chun Kwok（葉振國）

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

Non-executive Directors:

Mr. Wong Kim Hung, Patrick（黃劍雄）

Independent non-executive Directors: Mr. Ho Kwok Wah, George（何國華） Mr. To King Yan, Adam（杜景仁） Mr. Wong Hoi Ki（黃開基）

Principal Place of Business in Hong Kong: 25/F, Millennium City 3 370 Kwun Tong Road Kowloon Hong Kong 1 June 2012

To the Shareholders

Dear Sir/Madam,

VERY SUBSTANTIAL DISPOSAL

DISPOSAL OF 85% INTEREST IN SUNDART HOLDINGS

AND

CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

INTRODUCTION

On 16 May 2012, the Company announced that:

(1) the Company and the Purchaser entered into the Agreement on 16 May 2012, pursuant to which the Company has conditionally agreed to sell, and the Purchaser has conditionally agreed to purchase the Sale Shares, representing 85% of the issued share capital of Sundart Holdings, for a consideration of HK$493,000,000; and

– 5 –

LETTER FROM THE BOARD

(2) pursuant to the Agreement, the Company, the Purchaser and Sundart Holdings will upon Completion enter into the Shareholders’ Agreement to provide for the ownership, management, financing and other activities of Sundart Holdings and its subsidiaries (as appropriate).

As the relevant applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Disposal exceed 75%, the Disposal constitutes a very substantial disposal for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and Shareholders’ approval requirements.

The purpose of this circular is to provide the Shareholders with, among other things:

(i) further details of the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder;
(ii) further details of the financial information of the Disposal Group; and
(iii) a notice of the EGM at which an ordinary resolution will be proposed to approve the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder.

THE AGREEMENT

On 16 May 2012, the Company and the Purchaser entered into the Agreement pursuant to which the Company has conditionally agreed to sell, and the Purchaser has conditionally agreed to purchase the Sale Shares, representing 85% of the issued share capital of Sundart Holdings, for a consideration of HK$493,000,000.

Date

16 May 2012

Parties

Vendor: The Company Purchaser: The Purchaser

Assets to be disposed of

The Sale Shares, representing 85% of the issued share capital of Sundart Holdings.

Further information on Sundart Holdings and its subsidiaries are set out in the section titled “Information on the Disposal Group” in this circular.

– 6 –

LETTER FROM THE BOARD

Consideration

The consideration for the Sale Shares is HK$493,000,000 (the “ Consideration ”), which shall be paid by the Purchaser to the Company in cash in the following manner upon the Purchaser receiving on the Completion Date a copy of the register of members of Sundart Holdings reflecting the Purchaser as the holder of the Sale Shares:

(i) HK$350,030,000, being 71% of the Consideration, shall be paid on the Completion Date; and
(ii) HK$142,970,000, being 29% of the Consideration (the “ Second Instalment ”), shall be paid within 21 days after the Completion Date (the “ Payment Period ”).

The Company shall retain the original share certificate(s) in respect of 1,275 Shares (representing approximately 29% of the total number of the Sale Shares) (the “ Retained Shares ”) on the Completion Date, and shall deliver the same to the Purchaser on the date of payment of the Second Instalment by the Purchaser.

If the Purchaser fails to pay the Second Instalment within the Payment Period, the Purchaser shall immediately pay to the Company an amount equal to 1% of the Second Instalment as compensation.

Unless as agreed between the Company and the Purchaser otherwise, if the Purchaser fails to pay to the Company the Second Instalment within 30 days after the Payment Period (excluding the last day of the Payment Period), the Company shall be entitled to become the legal and beneficial owner of the Retained Shares, and the Purchaser undertakes to execute the necessary instrument of transfer and/or all other relevant documents for the purpose of transferring the Retained Shares back to the Company without consideration and to procure that the register of members of Sundart Holdings reflects the Company as the registered holder of the Retained Shares.

The Consideration was determined after arm’s length negotiations between the Company and the Purchaser with reference to the net assets value of the Disposal Group as at 31 January 2012 and the market capitalization of the Company at the time of negotiation of the Disposal with the Purchaser.

Conditions to Completion

Completion is conditional upon the fulfillment of all of the following conditions:

(a) the Shareholders approving the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder at a general meeting of the Company;
(b) the obtaining by the Company and any member of the Disposal Group of all necessary consents, approvals, authorisations and/or waivers from the relevant banks in connection with the Agreement and the transactions contemplated thereunder;

– 7 –

LETTER FROM THE BOARD

(c) the obtaining of all consents and/or approvals which are necessary or required to be obtained from government authorities and/or regulatory authorities in order for the Company to carry out the transactions contemplated under the Agreement;
(d) the obtaining of all consents and/or approvals which are necessary or required to be obtained from government authorities and/or regulatory authorities in order for the Purchaser to carry out the transactions contemplated under the Agreement; and
(e) the directors of the Purchaser approving the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder at a board meeting of the Purchaser.

Completion

Subject to the fulfillment of all the Conditions and compliance with the terms and conditions of the Agreement, Completion shall take place on the Completion Date.

The Company has undertaken to the Purchaser in the Agreement that it shall not sell and transfer the Sale Shares (except to the Purchaser) or mortgage, pledge or create any other encumbrance on the Sale Shares within 18 months from the date of the Agreement, unless at the time of contemplating such sale, transfer, mortgage, pledge or creation of encumbrances, the Agreement failed to complete due to the Purchaser’s default. If Completion cannot take place within 18 months from the date of the Agreement, the Agreement shall immediately thereafter automatically terminate and the Company shall at any time thereafter be free to sell, transfer, mortgage, pledge or create encumbrances on the Sale Shares.

Change of name

Pursuant to the Agreement, the Company shall, and shall procure its subsidiaries other than members of the Disposal Group which company name contains the words “Sundart” or “承達” or “承达”, as soon as possible after Completion, and in any event no later than 180 days after Completion, pass all necessary resolutions and procedures to change their names to a name which does not contain the words “Sundart” or “承達” or “承达”. The Company has also undertaken that subject to compliance with the above, the Company shall not, and shall procure that its subsidiaries other than members of the Disposal Group shall not use the words “Sundart” or “承達” or “承达” in their company names.

Shareholder’s loans and bank loans and release of bank guarantees

The Company has undertaken in the Agreement:

(i) to ensure that the amount of the shareholders’ loan (except for the New Shareholders’ Loan (if any), as defined below) owed by the Disposal Group to the Company is HK$80,000,000 (the “ Sundart Loan ”) as at the Completion Date; and

– 8 –

LETTER FROM THE BOARD

(ii) to arrange that members of the Disposal Group repay all bank loans which fall due prior to the Completion Date as well as all bank loans which the relevant banks have requested for repayment prior to the Completion Date (the “ Relevant Bank Loans ”).

The Purchaser has agreed that if the Disposal Group does not have sufficient funds to repay the Relevant Bank Loans as mentioned above, the Company may advance to the Disposal Group a loan bearing interest of 3% per annum for use in repaying the Relevant Bank Loans, which loan from the Company shall be repaid in full by the Disposal Group within one year from the date of advance of such loan (the “ New Shareholders’ Loan ”).

The main reason for retaining the Sundart Loan and providing a further loan to repay the Relevant Bank Loans as mentioned above is to ensure that there is a smooth handover for the transactions contemplated under the Agreement between the Company and the Purchaser and minimal disruption to the business and operations of the Disposal Group, taking into account the following:

(i) since the Purchaser is not a shareholder of Sundart Holdings prior to Completion, the Purchaser is not obliged to repay any bank loan owed by any member of the Disposal Group which falls due before Completion. Accordingly, members of the Disposal Group should arrange to repay the bank loan on its own, otherwise it would have been in default of the relevant loan documents. If any member of the Disposal Group does not have sufficient funds to repay the bank loan, it is reasonable for the Company to provide funding to such member of the Disposal Group for such repayment as it is still the holding company of the Disposal Group at the time;
(ii) since one of the conditions to Completion is the obtaining of necessary consents, approvals, authorisations and/or waivers from the relevant banks in connection with the Disposal, in the event that any bank is unwilling to give the relevant approval, consent or waiver, a member of the Disposal Group may need to repay the relevant bank loan in order that Completion may take place; and
(iii) as the Purchaser is a wholly-owned subsidiary of a PRC company and is PRC based, its funding mostly comes from within the PRC and accordingly, it has to go through time consuming foreign exchange control procedures before funds can be transferred out of the PRC for use by the Disposal Group outside the PRC. The Company considers that by not requiring the repayment of the Sundart Loan at or prior to Completion, the Disposal Group will be able to retain some cash for its operations (other than in the PRC) for the transitional period after Completion, pending the injection of new funds from the Purchaser which will facilitate a smooth handover.

The existing amount of shareholder’s loan advanced by the Company to the Disposal Group exceeds the amount of Sundart Loan and the Company will arrange for repayment by the Disposal Group of part of such shareholder’s loan such that the amount of loan owing at Completion will be reduced to HK$80,000,000 (i.e. the Sundart Loan). As the Disposal Group will continue to generate profit from its operations such that there is sufficient cash

– 9 –

LETTER FROM THE BOARD

flow for the Disposal Group for the coming year, the Company considers that the Disposal Group will be able to repay the Sundart Loan. Also, the Disposal Group currently has sufficient funds to repay the bank loans or their relevant installments as and when they fall due before the Completion Date, the Company does not envisage that it is required to advance a further loan of substantial amount to the Disposal Group. Accordingly, the Company considers that the retention of the Sundart Loan and the provision of the further loan will not have a material adverse effect on the Group’s financial position.

The Company and the Purchaser have undertaken in the Agreement that unless both parties agree otherwise, they will arrange for the release of all Sundart Guarantees and the STP Guarantee after 6 months from the Completion Date and procure that such Sundart Guarantees and STP Guarantee be released within 1 year from the Completion Date. Based on the negotiation between the Company and the bank in respect of the STP Guarantee, the Company understands that the time required for the release of the STP Guarantee will be approximately 1 year. Accordingly, the same timeframe was set for the release of the Sundart Guarantees. The reason for setting the above timeframe (from 6 months after Completion to within 1 year from Completion) for release of the Sundart Guarantees and the STP Guarantee at Completion is to provide for a transitional period so as to ensure a smooth handover after Completion and sufficient time for making arrangements with the relevant banks to prepare for the relevant releases. The Company considers that the above timeframe will be able to provide sufficient time for the smooth handover after Completion. Due to the reason set out above, the Directors consider that the Sundart Guarantees and the STP Guarantee will be able to be released within the timeframe set out in the Agreement and that the abovementioned provision in the Agreement relating to the arrangements for release of the Sundart Guarantees and the STP Guarantee to be fair and reasonable and in the interest of the Company.

The Sundart Guarantees were given by the Company in connection with banking facilities granted to the Disposal Group of an aggregate principal amount of approximately HK$1,296,150,000, of which approximately HK$337,279,000 had been utilized by the Disposal Group as at 31 January 2012, and the STP Guarantee was given by a member of the Disposal Group in connection with a banking facility granted to Vital Success (a member of the Remaining Group) of the principal amount of approximately HK$737,500,000, of which approximately HK$429,672,000 had been utilized by Vital Success as at 31 January 2012.

Given that the Purchaser is a wholly-owned subsidiary of Beijing Jangho (a company whose shares are listed on the SSE), and the fact that the Disposal Group will continue to generate profit from its operations such that there will be sufficient cash flow for the Disposal Group, the Company considers that the Disposal Group will be able to make the required payments to the financial institutions on its debt obligations in connection with the Sundart Guarantees as scheduled, therefore the Company does not foresee any possible enforcement of the Sundart Guarantees.

Also, the Sundart Guarantees will be released within 1 year after the Completion Date, the Directors therefore consider that the default risk of the Sundart Guarantees towards the Remaining Group is low. As such, the Directors consider that the continuous provision of the Sundart Guarantees after Completion and arranging for the release of the same from 6

– 10 –

LETTER FROM THE BOARD

months after Completion to within 1 year from Completion will not have a material adverse effect on the Remaining Group’s financial position and will not bring any material adverse financial impact to the Remaining Group.

In the event that the New Shareholders’ Loan (if any) fails to be repaid in full by the Disposal Group within 1 year from the date of advance of such loan and that the Sundart Guarantees and/or the STP Guarantee cannot be released within 1 year from Completion, the Company will comply with the disclosure, announcement and/or shareholders’ approval requirements under the Listing Rules as appropriate.

Payment of accounts receivables

Pursuant to the Agreement, if the accounts receivables of Sundart Holdings as shown in the Completion Accounts cannot be collected in full by the relevant member of the Disposal Group within 18 months from the Completion Date (the “ Collection Period ”), and there is not sufficient bad debt provision in the Completion Accounts to cover the uncollected accounts receivables, then the Company shall within 5 days from the end of the Collection Period pay to the Purchaser the amount of the difference between such uncollected accounts receivables and the amount of bad debt provision as shown in the Completion Accounts. If the Purchaser and/or the relevant member of the Disposal Group subsequently is able to collect the outstanding accounts receivables, then the Purchaser and/or the relevant member of the Disposal Group shall within 5 days of collection of such accounts receivable repay the same amount to the Company.

The Purchaser has requested for the aforesaid provision in relation to the payment of accounts receivables in the Agreement such that it will still be compensated in the event that the financial statements of the Disposal Group provided to the Purchaser fail to have adequate provision for bad debt. As disclosed in the Prospectus, the amounts of write off of trade and other receivables of the Company for the two years ended 31 March 2007 and 2008 were HK$344,000 and HK$1,165,000 respectively. In particular, no bad debt amount was recorded by the Group for the period from 1 April 2011 to 31 January 2012 and two years ended 31 March 2010 and 2011. In view of the historic low bad debt amount incurred by the Disposal Group and since sufficient provision for bad debt will be made in the Completion Accounts if any debt amount is noted, the Company considers that the Group’s exposure on the compensation that may be made for the Disposal Group’s accounts receivables is negligible. Due to the reason set out above and since the Company will be refunded the amount of outstanding accounts receivables which the Purchaser and/or the relevant member of the Disposal Group subsequently is able to collect, the Directors consider that the abovementioned provision in the Agreement relating to the arrangements for the Company to compensate the Disposal Group for the uncollected accounts receivables to be fair and reasonable and in the interest of the Company.

– 11 –

LETTER FROM THE BOARD

THE SHAREHOLDERS’ AGREEMENT

Pursuant to the Agreement, the Company, the Purchaser and Sundart Holdings will upon Completion enter into the Shareholders’ Agreement to provide for the ownership, management, financing and other activities of Sundart Holdings and its subsidiaries (as appropriate). The principal terms of the Shareholders’ Agreement, among other things, are summarized as follows:

Board Representation

After Completion, the board of directors of each member of the Disposal Group shall comprise five directors, of which one director shall be appointed by the Company and four directors shall be appointed by the Purchaser. The Company shall nominate Mr. Ng as a director of each member of the Disposal Group who shall hold office for a period of three years from the date of the Shareholders’ Agreement.

Other than certain material matters specified in the Shareholders’ Agreement which shall either be approved by:

(a) the Company and the Purchaser in writing or by the Company and the Purchaser unanimously at a general meeting of the Company; or
(b) all directors of the board of directors of the relevant member of the Disposal Group in writing; or
(c) all directors at the meeting of the board of directors of the relevant member of the Disposal Group (which shall, in any event, include at least one director appointed by the Company) who are present either in person or by their respective alternates and a quorum being present at the aforesaid board meeting;

all matters to be determined by the respective board of directors of members of the Disposal Group shall be decided by a simple majority vote of the directors present and voting.

Financing for the Disposal Group

All funding required for the business of the Disposal Group shall be satisfied through the following means:

(a) the Purchaser shall procure that members of the Disposal Group use reasonable endeavours to obtain project financing from banks or other financial institutions on such terms as the board of directors of Sundart Holdings shall by unanimous vote determine; and
(b) the Company shall ensure that the Disposal Group shall obtain the Sundart Loan.

– 12 –

LETTER FROM THE BOARD

The Company and the Purchaser shall irrevocably agree and undertake in the Shareholders’ Agreement that the Sundart Loan shall be for a term of 1 year and shall bear interest at the rate of 3% per annum. The sole purpose of the Sundart Loan is to ensure that there is a smooth handover for the transactions contemplated under the Agreement between the Company and the Purchaser, and the term of the Sundart Loan is short which is not expected to be more than 1 year. In addition, the Sundart Loan which will carry interests at 3% per annum is higher than that of the Company’s financing interest rate, accordingly, the Company considers that the Sundart Loan is on normal commercial terms and fair and reasonable and is in the interests of the Shareholders and the Company.

Non-competition

The Company shall undertake in the Shareholders’ Agreement that during the period from the date of the Shareholders’ Agreement until it no longer holds any shares in Sundart Holdings, unless with the unanimous agreement of the Company and the Purchaser, the Company shall not (other than through the Disposal Group) directly or indirectly set up, manage or invest in any business which competes or may compete with the business of the Disposal Group.

Since the Company will have disposed of its fitting-out business other than 15% interest in Sundart Holdings, the Group will no longer have the resources to carry on fitting-out business activities on its own. Accordingly, such non-competition undertaking will not post as a material restriction on the Group’s future business activities. Currently, the Company has engaged Kin Shing (Leung’s) General Contractors Limited, a member of the Disposal Group, to carry out superstructure works (including the construction and the fit-out) in respect of the Kwun Tong Project. It is envisaged that the Company may continue to engage the Disposal Group to undertake the fitting-out works for other property projects it may invest in future. Given that the Disposal Group’s positive “job reference” in the fitting-out business, engaging the Disposal Group to fit-out the investment properties of the Group will have a positive effect on the image of the Group’s investment properties, the Directors consider that giving the non-competition undertaking is in the interest of the Company.

Termination

If an order is made or an effective resolution is passed for the winding up of the Company other than for the purposes of amalgamation or reconstruction, or if all or a substantial part of all of the assets of the Disposal Group are expropriated or otherwise placed under the direct control of the government, or if Sundart Holdings is unable to pay its debts (within the meaning of section 178 of the Companies Ordinance but excluding any debts owed to any shareholder of Sundart Holdings), or Sundart Holdings makes a general assignment for the benefit of its creditors or has a receiver or manager appointed over all or a substantial part of its assets, any of the Company or the Purchaser shall be entitled to terminate the Shareholders’ Agreement forthwith by delivery of a notice of termination to the other of them. Such termination shall not affect the rights and obligations accrued prior to the date of such termination.

– 13 –

LETTER FROM THE BOARD

Upon the liquidation of Company, the Shareholders’ Agreement shall also terminate and such termination shall not affect the rights and obligations accrued prior to the date of such termination.

Options

Under the Shareholders’ Agreement, the Company and the Purchaser will have the following rights or options to require the other party to buy/sell the shares in Sundart Holdings upon occurrence of the following events:

Pre-emption rights Each time when the Company or the Purchaser wishes to sell its shares in Sundart Holdings, the selling shareholder shall first offer all or some of such shares together with the relevant proportion of outstanding shareholder’s loan owed by Sundart Holdings to it to the other shareholder in accordance with the provisions of the Shareholders’ Agreement.

Tag-along rights

In the event that the Company or the Purchaser proposes to transfer, in one or more transactions, any of its interest in Sundart Holdings to another party, the other shareholder (i.e. the non-selling shareholder) shall, in accordance with the provisions of the Shareholders’ Agreement, have the right, but not the obligation, to tag-along and join in such proposed transfer at the same price and on the same terms and subject to the same conditions as the selling shareholder on a pro rata basis.

INFORMATION ON THE COMPANY AND THE PURCHASER

The Company is an integrated fitting-out contractor based in Hong Kong principally engaged in providing professional, up-market and cost-saving fitting-out contracting services for sizeable residential and hotel projects. The dealings in the Shares first commenced on the Main Board of the Stock Exchange on 21 August 2009.

The Purchaser is principally engaged in contracting curtain wall construction business in Hong Kong.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are third parties independent of and do not have any other relationship with the Group and its connected persons (as defined in the Listing Rules).

– 14 –

LETTER FROM THE BOARD

STRUCTURE OF THE GROUP BEFORE AND AFTER COMPLETION

The following charts illustrate the structure of the Group immediately before and after Completion:

As at the Latest Practicable Date and immediately before Completion:

==> picture [392 x 221] intentionally omitted <==

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

The Company
(Cayman Islands)
100% 100% 100%
Joint Champ International Limited Keen Virtue Group Limited
The Disposal Group (Note)
(BVI) (BVI)
70% 100% 100% 65% 100%
Q-Stone Building Apex Wealth Talent Step Wit Legend Vast Aim
Materials Limited International Investments Limited Investments Limited International
(Hong Kong) Limited (BVI) (BVI) Limited
(BVI) (BVI)
29.36% 100%
KLR Holdings Vital Success
(BVI) (Hong Kong)
----- End of picture text -----

Immediately after Completion:

==> picture [392 x 216] intentionally omitted <==

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

The Company
(Cayman Islands)
100% 100% 15%
Joint Champ International Limited Keen Virtue Group Limited
The Disposal Group (Note)
(BVI) (BVI)
70% 100% 100% 65% 100%
Q-Stone Building Apex Wealth Talent Step Wit Legend Vast Aim
Materials Limited International Investments Limited Investments Limited International
(Hong Kong) Limited (BVI) (BVI) Limited
(BVI) (BVI)
29.36% 100%
KLR Holdings Vital Success
(BVI) (Hong Kong)
----- End of picture text -----

Note: Please refer to the section titled “Information on the Disposal Group” in this circular for the chart illustrating the structure of the Disposal Group.

– 15 –

LETTER FROM THE BOARD

INFORMATION ON THE DISPOSAL GROUP

The Disposal Group is principally engaged in the business of conducting fitting-out works, construction and civil engineering works, sourcing and distribution of interior decorative materials, supply and installation of timber doors and floorsets, provision of project management services and manufacturing of timber products. Set out below is the shareholding structure of the Disposal Group as at the Latest Practicable Date:

==> picture [386 x 263] intentionally omitted <==

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

The Company
100%
Sundart Holdings [#]
(BVI)
10%
100% 100% 100%
Glory Spring Sundart Products Sundart Investments
Investments Limited (Note 1) Limited [#]
Limited# (BVI) (Hong Kong)
(BVI)
100% 100% 100% 100% 100% 100% 100% 100%
Kin Shing (Leung’s) Sundart Sundart Living Sundart Elite Tech Elite Base Sundart Timber Grace United
General Contractors Limited (Note 2) Supply (Macau) International (Hong Kong)Limited# Supply LimitedInternational Holdings Limited# LimitedEngineering (Note 5) Products Company Limited (Note 6) Development Limited
(Hong Kong) Limited (Note 3) (Note 4) (Hong (Hong Kong) (Hong Kong) (Note 7)
(Macau) (Hong Kong) Kong) (Hong Kong)
100% 100% 100% 90%
東莞承達木材制品有限公司 Sundart Emirates 北京承達創建裝飾工程 Sundart Engineering
(Dongguan Sundart Timber Products Interior 有限公司 Services (Macau)
Company Limited) (Note 8) Contracting LLC (Sundart Engineering & Limited (Note 10)
(PRC) (Note 9) Contracting (Beijing) (Macau)
(Abu Dhabi) Limited) (Note 10)
(PRC)
----- End of picture text -----

# An Investment holding company.

Note 1: Being principally engaged in investment holding and leasing of intellectual properties.

Note 2: Being principally engaged in construction and civil engineering works.

Note 3: Being principally engaged in sourcing and distribution of interior decorative materials.

Note 4: Being principally engaged in sourcing and distribution of interior decorative materials.

Note 5: Being principally engaged in interior fitting-out works.
Note 6: Being principally engaged in investment holding and supply and installation of timber doors and floorsets and interior fitting-out works.
Note 7: Being principally engaged in project management services.
Note 8: Being principally engaged in manufacturing of timber products.
Note 9: Being principally engaged in interior fitting-out works in Abu Dhabi and is currently inactive.
Note 10: Being principally engaged in supply and installation of timber doors and floorsets and interior fitting-out works.

– 16 –

LETTER FROM THE BOARD

The unaudited consolidated net assets value of Sundart Holdings as at 31 January 2012 was HK$400,453,000. The unaudited consolidated net profits before and after tax of Sundart Holdings for the year ended 31 March 2011 were HK$167,036,000 and HK$141,124,000 respectively, and the unaudited consolidated net profits before and after tax of Sundart Holdings for the year ended 31 March 2010 were HK$225,543,000 and HK$191,428,000 respectively.

In addition, the unaudited consolidated net profits before and after tax of Sundart Holdings for the ten months period ended 31 January 2012 were HK$107,416,000 and HK$91,330,000 respectively, and the unaudited consolidated net profits before and after tax of Sundart Holdings for the ten months period ended 31 January 2011 were HK$128,238,000 and HK$108,017,000 respectively.

The book value of the Disposal Group as at 31 January 2012 was HK$400,453,000.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group started its fitting-out business in 1988 and since then, had been gradually expanding its fitting-out business. After the listing of the Shares on the Stock Exchange, whilst the Group continued to develop its fitting-out business, the Company also explored the possibility, and came across opportunities, of engaging in additional new businesses which may bring in more profits for the Group, including but not limited to real estate investment. In terms of the fitting-out business of the Group, there has been increased competition as other competitors viewed the Company’s business as a profitable model and followed suit. In addition, labour costs relating to the installation works by subcontractors and costs of raw materials for fitting-out projects (including but not limited to timber products, marble products and steel, metal and glazing products) have increased in recent years. Although the Group is still having a sizeable share in the Hong Kong and Macau markets, such increase in competition and costs continues to lower its profit margin, which has decreased from 19.35% for the six months period ended 30 September 2010 to 13.55% for the six months period ended 30 September 2011.

Although the Company is still optimistic about the markets of Hong Kong and Macau, its fitting-out business has grown to an extent that the Company expects that there would not be much room for extensive expansion since both markets are small. For the Group’s fitting-out business in Hong Kong, since the transparency of the Group’s financial information, such as profit margin of the business, becomes higher after the Company’s listing, the market was able to ascertain the profitability of the business. As a result, this attracted new players to join the business. This led to more competition in the market which resulted in a lower profit margin for the Group over the past years. Also, the running of fitting-out business is becoming tougher as the aforementioned costs for labour and raw material have risen much in recent years whilst the increase in the aforesaid costs are quite difficult to pass to the customers, hence the fitting-out business is not expected to be as profitable as before. For the Group’s fitting-out business in Macau, as the Macau government had in March 2010 announced a limitation to the number of casino tables in Macau in the next three years, this consequentially limited the number of new fitting-out

– 17 –

LETTER FROM THE BOARD

projects available there. After finishing the large-scale hotel projects, such as Galaxy Resort & Casino Cotai City, it is expected that there will not be any large-scale casino projects until late 2013.

By engaging in new lines of businesses, the Company will have new sources of revenue, which the Directors consider that they will be beneficial to the Group and the Shareholders as a whole. Accordingly, in June 2010, the Group entered into a formal agreement for the acquisition of the property where the Kwun Tong Project is located, which acquisition was completed in December 2010. In January 2011, the Group commenced the development of the Kwun Tong Project and started demolishing the old building located at the site of the Kwun Tong Project.

The Company had on 16 September 2010 announced its acquisition of 29.36% interest in KLR Holdings, which in turn was interested in 54.02% of Kailong REI Project Investment Consulting (Hong Kong) Co., Ltd. (“ KLR Hong Kong ”). KLR Holdings is a holding company that undertakes, through KLR Hong Kong and/or the subsidiaries and affiliates of KLR Hong Kong (collectively, the “ KLR Group ”), fund management, real estate investment and asset management business in the PRC.

As stated in the 2011 Annual Report, property development will represent a second line of business for the Group in the future and will generate a new source of income. The 2011 Annual Report also stated that the Group is looking for new projects to keep this business line running and will continue to explore property development opportunities with KLR Holdings. At the time of acquisition of interests in KLR Holdings as well as the property where the Kwun Tong Project is located, there were no plans to dispose of the fitting-out business of the Group.

As mentioned above, the fitting-out business of the Group in Hong Kong and Macau has grown to an extent that there would not be much room for extensive expansion in such markets. However, the Company believes that the PRC market has great potential for the fitting-out business and accordingly increased its exposure to the PRC market in cities with high growth potential such as Beijing, Shanghai, Chengdu and Chongqing.

As the Company continues to develop its fitting-out business in the PRC, it realizes that the difficulty and risk of expanding its fitting-out business in the PRC market continues to increase, especially on its own without the assistance of a local PRC partner. Such difficulty and risk mainly come from the time consuming foreign exchange control procedures which the Group has to go through when injecting funds into its PRC businesses and that the Group’s familiarity with the PRC market is not as good as that with the Hong Kong and Macau markets. In addition, given that there is money supply limitation and strict foreign exchange control policies in the PRC, the Company’s customers became not as liquid as before, which caused the cash flow turnover of running the fitting-out business in the PRC not as satisfactory as the Company expected.

With a sudden increase in the Group’s fitting-out orders in the PRC within a short period of time during April 2011 to September 2011, and that the scale of such fitting-out projects were much larger than the previous projects which the Group took up, the Group realised the difficulties in expanding its fitting-out business in the PRC and is faced with

– 18 –

LETTER FROM THE BOARD

both funding and operation difficulties and higher operational risks. Apart from the difficulties encountered in the foreign exchange control procedures in the PRC as mentioned above, the Group also faces difficulties and risks in operating business in the PRC due to cultural differences between Hong Kong and the PRC as well as cultural differences among different cities in the PRC. Projects of the Group in the past were only located in large cities, namely Shanghai or Beijing, whereas currently many development projects are located in other second-tier cities in the PRC. As such, and as each city has its own set of regulations, rules and norms, and the expectation of customers of these cities varies due to difference in their cultural background, the Group needs to spend extra time to familiarize itself with and adapt to the differences in each of these cities in order to meet the varied requirements and expectations of its PRC customers in different cities. The Group also has to assign a number of staff to support the projects located in different regions in the PRC. Given the Group’s manpower is limited and the fact that unlike in Hong Kong and Macau where a project manager can oversee different projects at the same time, the PRC projects are scattered in different regions in the PRC and as such the Company has difficulties in assigning a project manager to oversee several projects at the same time. This has therefore placed much pressure on the Group’s human resources which the Group cannot solve on its own. Accordingly, the Group had to hire additional local staff in the PRC to take up the fitting-out projects, although the Company faced unexpected difficulty in recruiting experienced local staff at reasonable costs in the PRC. The aforementioned factors put a strain on the Group’s resources as well as increase the Group’s operating costs.

Further, due to the difficulties mentioned above and that the commencement and/or progress of certain projects secured by the Group in or before March 2011 had been postponed or suspended by its customers to 2012, the Group experienced slower-than-expected progress in completing some of its fitting-out projects in the PRC. Further, the Group will require substantial initial setting up costs if too many significant projects commence at a particular period of time and expects that this will use up a lot of cash resources. As a result, although the Group has managed to increase the volume of orders for fitting-out projects in the PRC, the Company realises that the fitting-out business in the PRC is not as easy to operate and not as profitable as it had originally expected and the return of such business in the PRC market is not as good as that in Hong Kong and Macau if the Company continues to run the fitting-out business in the PRC alone.

In light of the above, when Beijing Jangho approached the Company early this year, and in view of the business scale and size of Beijing Jangho and its extensive network in the PRC, the Directors consider that it would be beneficial to the Group to invite the Purchaser to join as a long-term partner to expand and co-invest in the fitting-out business in the PRC. However, given the “Sundart” brand name is well established and is part and parcel of the fitting-out businesses in Hong Kong and Macau, it would not be commercially viable to have two businesses owned by two different persons but sharing the same “Sundart” brand name, and it would not be possible to separately dispose of just the Company’s fitting-out business in the PRC without the accompanying “Sundart” brand name. Accordingly, the Purchaser (which is a wholly-owned subsidiary of Beijing Jangho, the shares of which are listed on the SSE since August 2011) although interested in co-investing in the Group’s fitting-out business, wishes to acquire a controlling stake in Sundart Holdings and not just the Group’s fitting-out business in the PRC. The Company believes that by

– 19 –

LETTER FROM THE BOARD

introducing an experienced PRC partner into the Disposal Group to take over the operation of the Company’s fitting-out business in the PRC, the Company’s existing fitting-out business in the PRC will expand to take advantage of the great potential of the PRC market.

With both the experiences in engaging in the fitting-out and real estate-related businesses, the Company considers that the real estate-related business is of comparatively lower operational risks and easier to operate as it is less dependent on human resources management and may have a higher profit margin than that of the fitting-out business. The Company is therefore of the view that disposing of 85% interest in Sundart Holdings to the Purchaser is a good opportunity to allow the Group to reallocate its resources and focus on the development and expansion of its other line of business, being the real estate investment (including property development) business in the future. Although the Company will no longer be actively involved in the operation of the fitting-out business of the Disposal Group after the Disposal, the operating risks in running the Company’s fitting-out business in the PRC will shift to the Purchaser after the Disposal and the Company’s retention of 15% interest in Sundart Holdings will enable the Company to share the profits from the fitting-out business of the Disposal Group without the need to bear the operational risks and difficulties of the fitting-out business on its own.

The Directors consider that the terms of the Agreement and the Shareholders’ Agreement are fair and reasonable and that the entering into of the Agreement and the Shareholders’ Agreement is in the interests of the Company and the Shareholders as a whole.

BUSINESS OF THE REMAINING GROUP

After the Disposal, the Company will continue to further develop and expand its core business towards both the directions of real estate development, such as the Kwun Tong Project and other similar projects, and real estate investment (including property development), fund management and asset management in both Hong Kong and the PRC.

Real estate development

It is always the Company’s intention to engage in other real estate development projects which are similar to the Kwun Tong Project after the Company entered into the real estate development business in 2010. As disclosed in the 2011 Annual Report, the Kwun Tong Project will be the first of its kind for the Group. Accordingly, the Group will continue to explore property development opportunities and expand on this line of business in future. The Company will adopt a business model on repositioning and value enhancement of property with a focus on commercial projects in prime locations in both Hong Kong and the PRC. The Company will identify opportunities and acquire suitable assets and thereafter may repackage the assets to enhance their capital value by ways of rebuilding the properties, or upgrading the properties by carrying out renovation, fitting-out and furnishing works and improving the greenery, amenities and interior of the properties so as to build good images of the assets and make the properties attractive to investors.

– 20 –

LETTER FROM THE BOARD

The Kwun Tong Project is the first project under such business model in which an old industrial property was acquired. In particular, the Group may acquire suitable properties in the future for refurbishment and re-packaging for subsequent sale at a higher value. The Company is looking for other property development projects which can bring in rental income and also possesses capital gain potential. It is also the Company’s intention to look for other properties with good redevelopment potential such that the model of the Kwun Tong Project can be mirrored.

Real estate related investment, fund management and asset management

Apart from the Group’s engagement in real estate development projects as mentioned above, the Company also considers the prospect of real estate-related investment business is good, and accordingly intends to expand and strengthen its existing real estate-related businesses, including increasing its shareholding in KLR Holdings after the Disposal to the extent that KLR Holdings or KLR Hong Kong may, ultimately, become a subsidiary of the Company. KLR Holdings, through KLR Hong Kong and/or the subsidiaries and affiliates of KLR Hong Kong, undertakes fund management, real estate investment and asset management business in the PRC, and increasing its interest in KLR Holdings will enable the Company to further increase its involvement in the real estate investment and fund management and asset management business in the PRC.

As far as the Company is aware, the KLR Group is now managing two funds with a total capital of RMB650 million and will invest in around RMB1.2 billion worth of property. As KLR Holdings can complement the Company’s business well and the PRC market for RMB fund products is very large, there is a plan to further acquire interest in KLR Holdings to the extent that KLR Holdings or KLR Hong Kong may, ultimately, become a subsidiary of the Company. As at the Latest Practicable Date, as the Company is only interested in 29.36% of the issued share capital of KLR Holdings, it does not have control over the management of KLR Holdings. If the Company is successful in acquiring further interests in KLR Holdings, it will then be able to be further involved in the real estate investment, fund management and asset management business in the PRC. As at the Latest Practicable Date, the Company has not reached any agreement in respect of its intended increase of its shareholding interest in KLR Holdings although negotiation is in progress.

The Company intends to work closely with the KLR Group and the Disposal Group to fully execute the aforesaid business model that is similar to the Kwun Tong Project. As KLR Holdings has an extensive network in the PRC, the Company expects that it can help to find suitable investment projects for the Company’s involvement. The KLR Group also has strong connections with international funds so that the Company may partner up with the international funds to take part in large scale projects. Furthermore, the KLR Group has a team in Hong Kong, in which the Company can seek advice from the KLR Group in relation to potential projects in Hong Kong that the Company may be involved. Also, the Disposal Group can assist with the renovation, fit-out, furnishings and construction of the Company’s potential projects in the future.

– 21 –

LETTER FROM THE BOARD

Distribution of construction and/or decorative materials

The Remaining Group also intends to develop its business in the area of distribution of construction and/or decorative materials. Instead of acquiring such business, the Remaining Group specifically set up a company, namely Q-Stone Building Materials Limited, to carry out the business. In this connection, Q-Stone Building Materials Limited has entered into agreements with an independent third party regarding an exclusive right to sell and distribute marble-based and quartz-based stone composite surfaces products in the PRC (excluding Hong Kong and Macau) for two years and a license to use the relevant trademark in connection therewith.

Other than the abovementioned businesses, the Company currently has no intention to acquire any new line of business.

The Remaining Group will be able to meet the requirement under Rule 13.24 of the Listing Rules by virtue of it having, among others, the Kwun Tong Project which is a large-scale redevelopment project with a net book value of approximately HK$768,000,000 as at 31 January 2012. Given the Company will still be receiving revenue from its fitting-out business up until Completion and the pre-sale consent in relation to the Kwun Tong Project is expected to be issued in the third quarter of 2012, the period between the Completion and the commencement of the pre-sale (during which the Company might not be generating revenue) is considerably short, and the initial deposit from the pre-sale will then be recognized as revenue in the consolidated financial statements of the Company when the sales and purchases of the properties in relation to the Kwun Tong Project is completed, which is expected to be by the end of June 2013. The Group has obtained a bank loan to fund the development costs of the Kwun Tong Project, and coupled with the remaining proceeds from the Global Offering as well as the proceeds to be received from the Disposal, the Group will have sufficient funds for carrying out its remaining business including completing its Kwun Tong Project. Further, in the event that the Company is successful in its acquisition of further interests in KLR Holdings, the Group’s level of operations and value of assets will be further increased.

FINANCIAL EFFECT OF THE DISPOSAL

Upon Completion, the interests of the Company in Sundart Holdings will be reduced to 15% and Sundart Holdings and its subsidiaries will cease to be subsidiaries of the Company and will become associates of the Company. As a result, the results and assets and liabilities of Sundart Holdings and its subsidiaries will be incorporated in the consolidated financial statements using the equity method of accounting upon Completion.

The Group expects to recognize a gain of approximately HK$147,600,000 from the Disposal, which is calculated with reference to the consideration to be received, the estimated fair value of the remaining 15% interest in Sundart Holdings as at 31 January 2012, the carrying amounts of assets and liabilities of Sundart Holdings as at 31 January 2012 and the estimated legal and professional expenses related to the Disposal assuming that fair value equals to the carrying amounts of assets and liabilities of the remaining 15% interests in Sundart Holdings as at 31 January 2012 and that the Disposal was completed on 31 January 2012.

– 22 –

LETTER FROM THE BOARD

USE OF PROCEEDS FROM THE DISPOSAL

The Company intends to use the net proceeds from the Disposal (expected to be approximately HK$488,000,000) for development of the Kwun Tong Project (the details of which are disclosed in the announcement of the Company dated 14 June 2011) and as working capital for future investment purpose (including for funding the consideration for the acquisition of future interest in KLR Holdings if such acquisition is materialized).

The subject site of the Kwun Tong Project was originally restricted to industrial/ godown purposes. The Company has subsequently applied for a lease modification in order to change the land use of the site to commercial purpose. The aforesaid application succeeded in September 2011 upon the corresponding payment of land premium of HK$386,500,000 to the Government of Hong Kong.

As at the Latest Practicable Date, as far as the construction works in relation to the Kwun Tong Project are concerned, the demolition works of the previously existing building on the site and the foundation works have been completed and the superstructure works by the main contractors is currently in progress. The construction works are expected to take approximately 330 to 360 days with the occupation permit and certificate of compliance expected to be issued by the end of June 2013, and the consent for pre-sale of the properties in relation to the Kwun Tong Project is expected to be obtained in the third quarter of 2012. It is intended that while the majority of the units of the Kwun Tong Project will be sold, the Remaining Group may retain certain units of the Kwun Tong Project and lease out the same so as to generate a steady stream of rental income for the Group in the future.

As at 31 January 2012, the estimated remaining development costs for the Kwun Tong Project was approximately HK$296,000,000, which is to be mainly financed by unutilized bank facilities designated for the project, which borrowings will be repayable in 2013 or upon completion of sales of individual units of the aforesaid project.

Save for the proposed increase in the shareholding interests in KLR Holdings as mentioned above, the Company has not identified any future investment opportunities yet.

The Company currently expects that out of the net proceeds of the Disposal:

(a) approximately HK$30,000,000 will be used as working capital;
(b) approximately HK$120,000,000 will be used for future investment projects that are related to property development or property investment in Hong Kong and the PRC; and
(c) approximately HK$338,000,000 will be reserved for expenditure relating to the Kwun Tong Project, if any, until its successful pre-sale, after which any remaining amount will be used for other corporate uses.

Given the Kwun Tong Project is mainly financed by bank loans, the Company had been in discussions with the relevant bank regarding the Disposal and it is expected that such bank may require the Company upon Completion to provide additional security deposit for

– 23 –

LETTER FROM THE BOARD

securing the existing development loan advanced by such bank since the Company would have disposed of its cash-generating operation, being its fitting-out business. Also, the Company may have to apply part of the net proceeds from the Disposal for paying the relevant bank charges and interests and for the purpose of further funding the Kwun Tong Project in case additional bank financing is unavailable or insufficient to satisfy the funding needs of the Kwun Tong Project at any stage. Upon the successful pre-sale of the Kwun Tong Project, any unused net proceeds from the Disposal reserved for the Kwun Tong Project will be re-allocated as general working capital of the Group.

CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

The net proceeds received by the Company from the Global Offering amounted to approximately HK$457,000,000. As disclosed in the 2011 Interim Report, the Company has utilized the net proceeds received from the Global Offering in the manner consistent with that mentioned in the Prospectus under the section titled “Use of Proceeds” and in the Company’s announcement dated 31 August 2011 under the section titled “Change of Use of Proceeds”. As at 31 January 2012,

(a) approximately HK$128,900,000 has been used in relation to the financing of the fitting-out project(s) in the PRC;
(b) approximately HK$17,800,000 has been used in relation to the setting up of the Company’s own procurement and pre-fabrication facility and research and development;
(c) approximately HK$2,200,000 has been used in relation to the financing of the fitting-out project(s) in the Middle East;
(d) approximately HK$49,000,000 has been used as reserve for potential future acquisitions;
(e) approximately HK$41,100,000 has been used in relation to the financing of the fitting-out project(s) in Hong Kong and Macau;
(f) approximately HK$3,900,000 has been used in relation to the Company’s marketing activities; and
(g) approximately HK$100,500,000 has been used in relation to the working capital requirements and other corporate purposes.

The balance of the unutilized proceeds of approximately HK$113,600,000 was deposited in banks.

Given that the interests of the Company in Sundart Holdings will be reduced to 15% upon Completion and with the Purchaser becoming a strategic partner of the Company in its fitting-out business in the PRC, the Board considers that the aforesaid unutilized proceeds from the Global Offering may be used for purposes other than activities relating to the fitting-out business. Accordingly, the Board has decided to reallocate the aforesaid unutilized

– 24 –

LETTER FROM THE BOARD

portion of the net proceeds from the Global Offering and approximately HK$113,600,000 will be used for funding future acquisitions of the Group, including the proposed acquisition of additional shareholding interests in KLR Holdings as mentioned above.

The Board considers that the above change of the use of the unutilized net proceeds from the Global Offering will facilitate the efficient use of financial resources of the Group, is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

EFFECTS OF THE DISPOSAL ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

Upon Completion, members of the Disposal Group will become associates of the Company and the results and assets and liabilities of these associates will be incorporated in the consolidated financial statements of the Company using the equity method of accounting.

Effect on assets/liabilities

Based on the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to this circular, the Remaining Group’s total assets and total liabilities as at 30 September 2011 would become approximately HK$1,647,752,000 and HK$556,062,000 respectively assuming that the Disposal was completed on 30 September 2011.

Effect on earnings

The Company expects to recognize a gain of approximately HK$147,600,000 from the Disposal, which is calculated with reference to the consideration to be received, the estimated fair value of the remaining 15% interests in Sundart Holdings as at 31 January 2012, the carrying amounts of assets and liabilities of Sundart Holdings as at 31 January 2012 and the estimated legal and professional expenses related to the Disposal assuming that the fair value equals to the carrying amounts of assets and liabilities of the remaining 15% interests in Sundart Holdings as at 31 January 2012 and that the Disposal was completed on 31 January 2012.

It should be noted that the aforementioned estimations are for illustrative purpose only and do not purport to represent how the financial position of the Remaining Group will be upon Completion.

– 25 –

LETTER FROM THE BOARD

MANAGEMENT DISCUSSION AND ANALYSIS ON THE REMAINING GROUP

Set out below is the management discussion and analysis of the Remaining Group’s business and performance for each of the three financial years ended 31 March 2009, 2010 and 2011 and the ten months ended 31 January 2012.

(i) For the ten months period ended 31 January 2012

Results

For the ten months period ended 31 January 2012, no revenue was recorded by the Remaining Group as the Kwun Tong Project was under development. The Remaining Group had share of profit from an associate, KLR Holdings, of HK$78,411. The administrative expenses for the Remaining Group was approximately HK$12,000,000 for the ten months ended 31 January 2012.

Segment Results

For property development, segment turnover was not yet recognized as the Kwun Tong Project was under development. The amount of property under development for sale increased from HK$336,000,000 as at 31 March 2011 to HK$768,000,000 as at 31 January 2012. The increase was mainly due to the payment of land premium of HK$386,500,000 in relation to the lease modification duly executed in September 2011. As at 31 January 2012, the old building on the site of the Kwun Tong Project had been demolished and the foundation works were in progress.

Liquidity and Financial Resources

As at 31 January 2012, the Remaining Group’s total debt (representing the total interest-bearing borrowings) to total assets ratio was approximately 36.23% compared to 25.67% as at 31 March 2011. The gearing ratio (net debt to equity attributable to owners of the Company) was 21.70% with the new loans of HK$241,000,000 had been raised to finance the development of Kwun Tong Project compared to the net cash position as at 31 March 2011.

The Remaining Group mainly relies upon its cash and bank balances on hand and bank borrowings to finance its operations and development of the Kwun Tong Project.

Pledge of Assets

As at 31 January 2012, the Remaining Group had pledged properties under development for sale to secure the term loan facility granted to the Remaining Group. The aggregate carrying value of the pledged assets was HK$768,000,000.

– 26 –

LETTER FROM THE BOARD

Contingent Liabilities and Capital Commitments

The Disposal Group will continue to generate profit from its operation. Further, there are bank balances and cash of HK$358,172,000 and net asset of HK$401,350,000 as at 31 January 2012 for the Disposal Group. In the Director’s opinion, the Disposal Group will have sufficient resources to repay the bank borrowing when it falls due. As at 31 January 2012, the total banking facility available for the Disposal Group is HK$1,296,150,000 and HK$337,279,000 is utilized which is 26% of the total available facility. The release of all Sundart Guarantees and the STP Guarantee will be one year after Completion, in the Directors’ opinion, the contingent liability for the Sundart Guarantee and the STP Guarantee are remote.

The Remaining Group did not have any significant capital commitment as at 31 January 2012.

Exposure to Fluctuations in Exchange Rates and Interest Rates and Corresponding Hedging Arrangement

The Remaining Group’s bank borrowings were made at floating rates. The Remaining Group may work in different currencies including United States dollars and Renminbi. The exchange rates for the foresaid currencies are relatively stable. The Remaining Group reviews the exchange risk regularly and closely monitors the fluctuations of foreign currencies and will make proper adjustments if necessary. The Group has no hedging arrangements for foreign currencies or interest rates.

Disposal of Partial Interest in a Subsidiary

On 14 June 2011, a member of the Group had entered into an agreement with two independent third parties, pursuant to which the member of the Group has conditionally agreed to sell, and the two independent third parties have conditionally agreed to purchase in aggregate 35% of the issued share capital of Wit Legend Investments Limited (a wholly-owned subsidiary of the Company at the time) and 35% of shareholder’s loan of HK$50,311,000, for an aggregate cash consideration of HK$87,850,000. The disposal was completed on 24 June 2011.

The disposal, without losing the Group’s control over Wit Legend Investments Limited, was accounted for as an equity transaction. The difference between the fair value of cash consideration of HK$37,539,000 as received and 35% of the net liabilities in an amount of HK$7,000, amounted to HK$37,546,000, was recognized directly in equity as other reserves and attributable to owners of the Company.

Employees and Remuneration Policies

As at 31 January 2012, there were 10 persons employed by the Remaining Group. The remuneration policies are formulated on the basis of performance of individual employees and the prevailing salaries’ trend. The Remaining Group provides external training programmes, a mandatory provident fund scheme, medical insurance and discretionary bonuses.

– 27 –

LETTER FROM THE BOARD

(ii) For the financial year ended 31 March 2011

Results

For the financial year ended 31 March 2011, no revenue was recorded by the Remaining Group as the Kwun Tong Project was under development. The Remaining Group had share of profit from an associate, KLR Holdings, of approximately HK$193,000. The administrative expenses for the Remaining Group were approximately HK$13,000,000 for the year ended 31 March 2011.

Segment Results

For property development, segment turnover was not yet recognized as the Kwun Tong Project was under development.

Liquidity and Financial Resources

As at 31 March 2011, the Remaining Group’s total debt (representing the total interest-bearing borrowings) to total assets ratio was approximately 25.67%. The gearing ratio (net debt to equity attributable to owners of the Company) was nil as the Remaining Group should have net cash of HK$123,000,000 assuming that no shareholder’s loans had been advanced to the Disposal Group as at 31 March 2011.

The Remaining Group mainly relies upon its cash and bank balances on hand and bank borrowings to finance its operations and development of the Kwun Tong Project.

Pledge of Assets

As at 31 March 2011, the Remaining Group had pledged properties under development for sale to secure the term loan facility granted to the Remaining Group. The aggregate carrying value of the pledged assets was HK$336,000,000.

Contingent Liabilities and Capital Commitments

The Remaining Group did not have any significant contingent liabilities and capital commitment as at 31 March 2011.

Exposure to Fluctuations in Exchange Rates and Interest Rates and Corresponding Hedging Arrangement

– 28 –

LETTER FROM THE BOARD

Acquisition of Hoi Bun Road Property

On 31 May 2010, a member of the Remaining Group had signed a provisional sale and purchase agreement with an independent third party in relation to the acquisition of a property located at 135-137 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong. The formal agreement for sale and purchase was signed on 28 June 2010 and completion took place in December 2010. The consideration was HK$315,000,000, 60% of which was financed by bank financing. The site area of the property is approximately 16,500 square feet.

The property is in the process of being redeveloped into a high end commercial building, with a gross floor area of approximately 19,200 square meters.

Acquisition of Interest in KLR Holdings

On 15 September 2010, a member of the Remaining Group has entered into a subscription agreement with independent third parties (the “ Subscription Agreement ”), pursuant to which the member of the Remaining Group has agreed to subscribe for 2,936 ordinary shares of US$0.1 each in the issued share capital of KLR Holdings, representing 29.36% interest in KLR Holdings, for a cash consideration of US$2,667,500 (equivalent to approximately HK$20,771,000) (the “ Subscription of KLR Holdings ”). On 14 September 2010, KLR Holdings has entered into a subscription agreement with KLR Hong Kong, pursuant to which KLR Holdings has agreed to subscribe for 10,000 ordinary shares of US$5 each in the issued share capital of KLR Hong Kong, representing 1.54% interest in KLR Hong Kong (the “ Subscription of KLR Hong Kong ”). On the same date, KLR Holdings has entered into a share purchase agreement with its controlling shareholder, pursuant to the KLR Holdings has agreed to purchase 340,050 ordinary shares of US$5 each in the issued share capital of KLR Hong Kong, representing 52.48% interest in KLR Hong Kong (the “ Purchase of KLR Hong Kong ”). The aggregate cash consideration for the Subscription of KLR Hong Kong and the Purchase of KLR Hong Kong was US$4,250,000 (equivalent to approximately HK$33,094,000), both of which were completed on 14 September 2010 and accordingly, KLR Holdings was interested in KLR Hong Kong as to 54.02% after completion. The Subscription of KLR Holdings was completed on 15 September 2010. The Remaining Group is able to exercise significant influence over KLR Holdings because it has the power to appoint one out of five directors of KLR Holdings under the provisions as stated in the shareholders’ deed entered into among the parties to the Subscription Agreement.

Employees and Remuneration Policies

As at 31 March 2011, there were 9 persons employed by the Remaining Group. The remuneration policies are formulated on the basis of performance of individual employees and the prevailing salaries’ trend. The Remaining Group provides external training programmes, a mandatory provident fund scheme, medical insurance and discretionary bonuses.

– 29 –

LETTER FROM THE BOARD

(iii) For the two financial years ended 31 March 2009 and 2010

The businesses as mentioned above had not commenced in the two financial years ended 31 March 2009 and 2010.

FINANCIAL AND TRADING PROSPECTS

Following Completion, the Remaining Group will continue to focus on the development of the Kwun Tong Project which is expected to be completed in 2013. The Kwun Tong Project is the first property re-development project of the Group. The Company will adopt a business model on repositioning and value enhancement of properties with a focus on commercial projects in prime locations in both Hong Kong and the PRC. With the strong cash position of the Remaining Group after Completion, the Remaining Group may acquire suitable properties in the future for refurbishment and re-packaging for subsequent sale at a higher value. The Company is looking for other property development projects which can bring in rental income and also possesses capital gain potential.

The Company also considers the prospect of real estate-related investment business is good, and accordingly intends to expand and strengthen its existing real estate-related businesses, including increasing its shareholding in KLR Holdings after the Disposal to the extent that KLR Holdings or KLR Hong Kong may, ultimately, become a subsidiary of the Company. With KLR Holdings, it will provide an investment opportunity and involvement in the real estate investment and fund management and asset management business in the PRC which can bring in additional investment income and also capital gain potential.

A member of the Remaining Group has also entered into an agreement with an independent third party regarding an exclusive right to sell and distribute marble-based and quartz-based stone composite surfaces products in the PRC. This business can bring in a stable and sustainable income with potential growth.

The Directors expect that the financial position of the Remaining Group would remain solid taking into account the financial resources available to the Remaining Group and the strong assets base of the Remaining Group.

LISTING RULES IMPLICATIONS

As the Group will focus on the property development and real estate/asset management business in Hong Kong and the PRC through the Remaining Group after the Disposal, Mr. Leung will therefore resign from the Company and join the Disposal Group after Completion in order to pursue his career in developing the fitting out business in the PRC. As Mr. Leung will resign from the Company and join the Disposal Group after Completion, Mr.

– 30 –

LETTER FROM THE BOARD

Leung and his respective associates (as defined in the Listing Rules) will abstain from voting in respect of the resolution at the EGM to approve the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder.

As at the Latest Practicable Date, Tiger Crown, Mr. Ng, Mr. Wong and Scenemay held 97,104,000 Shares, 84,000,000 Shares, 20,520,000 Shares and 97,104,000 Shares respectively, representing approximately 20.34%, 17.59%, 4.3% and 20.34% respectively of the issued share capital of the Company as at the Latest Practicable Date.

Tiger Crown and Mr. Chan had jointly and severally irrevocably undertaken to the Purchaser, inter alia, that:

(a) on or prior to the date of the EGM, Tiger Crown shall not, and Mr. Chan shall procure that Tiger Crown shall not, sell, transfer, mortgage or pledge all or any of the Shares owned by it to any other persons or cause or permit the occurrence of any events which may damage or reduce its rights under the Shares owned by it to attend and vote at any general meetings of the Company;
(b) Tiger Crown shall, and Mr. Chan shall procure Tiger Crown to, appoint a representative to attend the EGM and vote in favour of the resolution approving the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder at the EGM.

Each of Mr. Ng and Mr. Wong had also irrevocably undertaken to the Purchaser, inter alia, that:

(a) on or prior to the date of the EGM, he shall not sell, transfer, mortgage or pledge all or any of the Shares owned by him to any other persons or cause or permit the occurrence of any events which may damage or reduce its/his rights under the Shares owned by him to attend and vote at any general meetings of the Company;
(b) he shall attend the EGM in person or by proxy and vote in favour of the resolution approving the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder at the EGM.

Scenemay, a substantial Shareholder, had authorised Mr. Chan as its representative to attend, act and to vote in favour of the resolution to be proposed at the EGM and at any adjournment thereof to approve the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder and Mr. Chan has undertaken to the Purchaser that he shall vote in favour of the resolution to be proposed at the EGM to approve the Agreement, the Shareholders’ Agreement and the transactions contemplated thereunder pursuant to such authorization of Scenemay.

– 31 –

LETTER FROM THE BOARD

EGM

A notice convening the EGM to be held at 3:00 p.m. on 20 June 2012 at Centenary Room I, Marco Polo Hongkong Hotel, 3 Canton Road, Harbour City, Tsim Sha Tsui, Hong Kong, is set out on pages 64 to 65 of this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as practicable. The form of proxy should be returned to the Company’s branch share registrar, Tricor Investor Services Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong, 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 at any adjourned meeting thereof) should you so wish.

RECOMMENDATION

The Directors consider that the terms of the Agreement and the Shareholders’ Agreement are fair and reasonable and that the entering into of the Agreement and Shareholders’ Agreement in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

ADDITIONAL INFORMATION

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

By order of the Board Sundart International Holdings Limited CHAN William Chairman

– 32 –

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

1. THREE YEARS FINANCIAL INFORMATION

Details of the financial information of the Group for the financial years ended 31 March 2009, 2010 and 2011 and for the six months ended 30 September 2011 are disclosed in the Prospectus, the annual report for the financial year ended 31 March 2010, the 2011 Annual Report and the 2011 Interim Report respectively. All of these financial statements have been published on the website of the Stock Exchange at www.hkex.com.hk and the Company’s website at www.sundart.com.

2. STATEMENT OF INDEBTEDNESS

At the close of business on 30 April 2012, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group had bank borrowings of approximately HK$550,000,000 of which HK$445,000,000 of term loan was secured by the Group’s properties under development for sale of HK$791,000,000. In addition, the Group had outstanding at that date loans from non-controlling interests of HK$98,000,000.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, the Group did not have outstanding at the close of business on 30 April 2012 any loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptable credits, debentures, mortgages, charges, hire purchases commitments, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

The Directors are of the opinion that, taking into account the financial resources available to the Remaining Group including internally generated funds and the available banking facilities, the Remaining Group will have sufficient working capital to meet its present requirements for at least the next 12 months from the date of this circular.

4. MATERIAL ADVERSE CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 March 2011, the date to which the latest published audited financial statements of the Group were made up.

– 33 –

APPENDIX II

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

Set out below are the unaudited consolidated financial information of the Disposal Group for each of the three years ended 31 March 2011 and the ten months ended 31 January 2012 (the “ Unaudited Consolidated Financial Information ”), which have been prepared in accordance with paragraph 68(2)(a)(i) of Chapter 14 of the Listing Rules, and solely for the purpose of inclusion in this circular in connection with the Disposal. The auditor of the Company, Deloitte Touche Tohmatsu, has reviewed the Unaudited Consolidated Financial Information in accordance with Hong Kong Standard on Review Engagements 2410 ’’Review of Interim Financial Information Performed by the Independent Auditor of the Entity’’ issued by the Hong Kong Institute of Certified Public Accountants which applies to a review of historical financial information performed by the independent auditor of the entity and concluded that nothing has come to their attention that causes them to believe that the Unaudited Consolidated Financial Information is not prepared, in all material respects, in accordance with the accounting policies adopted by the Company for the relevant years or periods in the preparation of the consolidated financial information of the Company and the basis set out in note 2 to the Unaudited Consolidated Financial Information.

For the purpose of preparation of the Unaudited Consolidated Financial Information to be included in this circular, the Directors have prepared the Unaudited Consolidated Financial Information in accordance with paragraph 68(2)(a)(i) of Chapter 14 of the Listing Rules which requires that the financial information must contain at least a statement of financial position, a statement of comprehensive income, a statement of changes in equity and a statement of cash flows for each of the three financial years of the company immediately preceding the issue of the circular and where applicable, a stub period. However, the Unaudited Consolidated Financial Information does not contain sufficient explanatory notes to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard 1 “Presentation of Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR EACH OF THE THREE YEARS ENDED 31 MARCH 2011 AND THE TEN MONTHS ENDED 31 JANUARY 2012

Revenue Cost of sales Gross profit Other income, other gains and losses Loss on disposal of subsidiaries Administrative expenses Other service costs Other expenses	Ten months ended 31 January 2012 2011 HK$’000 HK$’000 1,512,064 1,112,767 (1,317,316) (918,580) 194,748 194,187 2,424 103 (1,046) – (76,602) (55,352) (3,111) (7,778) (6,972) (3,554)	Year 2011 HK$’000 1,362,278 (1,111,434) 250,844 580 – (68,798) (9,333) (5,513)	ended 31 March 2010 2009 HK$’000 HK$’000 1,708,136 1,465,230 (1,408,164) (1,260,105) 299,972 205,125 3,470 2,627 – – (51,230) (35,659) (20,534) – (5,720) (1,656)

– 34 –

APPENDIX II

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

Share of profit of an associate Finance costs Profit before taxation Income tax expense Profit for the period/year Other comprehensive income Exchange differences arising on translation of foreign operations Release of translation reserve upon disposal of foreign operations Share of translation reserve of an associate Fair value gain on available-for-sale investment Gain on revaluation of property upon transfer to investment property Other comprehensive income for the period/year Total comprehensive income for the period/year	Ten months ended 31 January 2012 2011 HK$’000 HK$’000 209 1,097 (2,234) (465) 107,416 128,238 (16,086) (20,221) 91,330 108,017 4,058 2,398 (316) – 227 67 – 3,151 1,720 – 5,689 5,616 97,019 113,633	Year 2011 HK$’000 193 (937) 167,036 (25,912) 141,124 2,777 – 83 3,151 – 6,011 147,135	ended 31 March 2010 2009 HK$’000 HK$’000 – – (415) (2,920) 225,543 167,517 (34,115) (23,810) 191,428 143,707 201 806 – – – – – – – – 201 806 191,629 144,513

– 35 –

APPENDIX II

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

Profit for the period/year attributable to: Owners of the Company Non-controlling interests Total comprehensive income for the period/year attributable to: Owners of the Company Non-controlling interests	Ten months ended 31 January 2012 2011 HK$’000 HK$’000 91,356 108,017 (26) – 91,330 108,017 97,045 113,633 (26) – 97,019 113,633	Year 2011 HK$’000 141,124 – 141,124 147,135 – 147,135	ended 31 March 2010 2009 HK$’000 HK$’000 191,428 143,707 – – 191,428 143,707 191,629 144,513 – – 191,629 144,513	ended 31 March 2010 2009 HK$’000 HK$’000 191,428 143,707 – – 191,428 143,707 191,629 144,513 – – 191,629 144,513
				143,707

				144,513 –
				144,513

– 36 –

APPENDIX II FINANCIAL INFORMATION ON THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2009, 2010, 2011 AND 31 JANUARY 2012

As at 31 January 2012 HK$’000 Non-current assets Property, plant and equipment 27,413 Investment property 6,268 Goodwill 1,510 Other intangible assets 16,857 Interest in an associate – Available-for-sale investment 15,553 67,601 Current assets Properties under development for sale – Inventories 31,868 Amounts due from related companies 3,150 Amounts due from fellow subsidiaries 185,046 Trade and other receivables 130,211 Bills receivable 5,529 Amounts due from customers for contract work 366,979 Retentions receivable 134,442 Tax recoverable 5,863 Pledged bank deposits – Bank balances and cash 358,172 1,221,260	As at 31 March 2011 2010 2009 HK$’000 HK$’000 HK$’000 27,690 6,872 6,000 – – – 1,510 746 746 21,264 6,752 – 21,047 – – 15,023 – – 86,534 14,370 6,746 336,472 – – 40,249 – – – 7,536 5,128 – – – 233,847 91,028 314,919 15,805 5,945 – 272,592 150,090 70,056 131,963 134,873 114,914 2,652 92 43 – – 809 422,225 518,628 191,074 1,455,805 908,192 696,943	As at 31 March 2011 2010 2009 HK$’000 HK$’000 HK$’000 27,690 6,872 6,000 – – – 1,510 746 746 21,264 6,752 – 21,047 – – 15,023 – – 86,534 14,370 6,746 336,472 – – 40,249 – – – 7,536 5,128 – – – 233,847 91,028 314,919 15,805 5,945 – 272,592 150,090 70,056 131,963 134,873 114,914 2,652 92 43 – – 809 422,225 518,628 191,074 1,455,805 908,192 696,943
		6,746
		– – 5,128 – 314,919 – 70,056 114,914 43 809 191,074
		696,943

– 37 –

APPENDIX II

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

As at 31 January 2012 HK$’000 Current liabilities Trade and other payables 220,804 Bills payable – Amount due to ultimate holding company 466,860 Amount due to a related company – Amount due to a jointly controlled entity – Amounts due to customers for contract work 26,522 Tax payable 23,925 Bank borrowings 149,400 887,511 Net current assets 333,749 Total assets less current liabilities 401,350 Capital and reserves Share capital 40 Reserves 400,413 400,453 Non-current liabilities Bank borrowings – Deferred taxation 897 897 401,350	As at 31 March 2011 2010 2009 HK$’000 HK$’000 HK$’000 282,530 223,604 353,520 – – 2,291 466,357 339,323 – – 3,948 5,181 5,346 6,354 – 10,552 15,410 15,512 26,636 28,129 35,017 123,123 1,667 26,667 914,544 618,435 438,188 541,261 289,757 258,755 627,795 304,127 265,501 40 40 40 383,383 303,715 263,437 383,423 303,755 263,477 243,973 – 1,667 399 372 357 244,372 372 2,024 627,795 304,127 265,501	As at 31 March 2011 2010 2009 HK$’000 HK$’000 HK$’000 282,530 223,604 353,520 – – 2,291 466,357 339,323 – – 3,948 5,181 5,346 6,354 – 10,552 15,410 15,512 26,636 28,129 35,017 123,123 1,667 26,667 914,544 618,435 438,188 541,261 289,757 258,755 627,795 304,127 265,501 40 40 40 383,383 303,715 263,437 383,423 303,755 263,477 243,973 – 1,667 399 372 357 244,372 372 2,024 627,795 304,127 265,501
		438,188
		258,755
		265,501

		40 263,437
		263,477
		1,667 357
		2,024
		265,501

– 38 –

APPENDIX II FINANCIAL INFORMATION ON THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR EACH OF THE THREE YEARS ENDED 31 MARCH 2011 AND THE TEN MONTHS ENDED 31 JANUARY 2012

At 1 April 2008 Exchange differences arising on translation of foreign operations Profit for the year Total comprehensive income for the year Dividends paid At 31 March 2009 Exchange differences arising on translation of foreign operations Profit for the year Total comprehensive income for the year Dividends paid Shareholders’ contribution Recognition of other service costs Transfer to statutory reserve At 31 March 2010 Exchange differences arising on translation of foreign operations Share of translation reserve of an associate Fair value gain on available-for-sale investment Profit for the year Total comprehensive income for the year Dividends paid Recognition of other service costs At 31 March 2011	Share capital HK$’000 40 – – – – 40 – – – – – – – 40 – – – – – – – 40	Share premium HK$’000 66,799 – – – – 66,799 – – – (16,100) – – – 50,699 – – – – – (6,000) – 44,699	Legal reserve HK$’000 49 – – – – 49 – – – – – – – 49 – – – – – – – 49	Statutory reserve I r HK$’000 – – – – – – – – – – – – 690 690 – – – – – – – 690	Attributable nvestment evaluation reserve r HK$’000 – – – – – – – – – – – – – – – – 3,151 – 3,151 – – 3,151	to owners of t Property evaluation reserve T HK$’000 – – – – – – – – – – – – – – – – – – – – – –	he Company ranslation reserve Sha co HK$’000 4,218 806 – 806 – 5,024 201 – 201 – – – – 5,225 2,777 83 – – 2,860 – – 8,085	reholders’ ntribution reserve HK$’000 – – – – – – – – – – 6,615 – – 6,615 – – – – – – – 6,615	Other reserves Acc HK$’000 – – – – – – – – – – – 20,534 – 20,534 – – – – – – 9,333 29,867	umulated profits HK$’000 160,858 – 143,707 143,707 (113,000) 191,565 – 191,428 191,428 (162,400) – – (690) 219,903 – – – 141,124 141,124 (70,800) – 290,227	Sub-total Non– controlling interests HK$’000 HK$’000 231,964 – 806 – 143,707 – 144,513 – (113,000) – 263,477 – 201 – 191,428 – 191,629 – (178,500) – 6,615 – 20,534 – – – 303,755 – 2,777 – 83 – 3,151 – 141,124 – 147,135 – (76,800) – 9,333 – 383,423 –	Total HK$’000 231,964
												806 143,707
												144,513 (113,000)
												263,477
												201 191,428
												191,629 (178,500) 6,615 20,534 –
												303,755
												2,777 83 3,151 141,124
												147,135 (76,800) 9,333
												383,423

– 39 –

APPENDIX II

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

Exchange differences arising on translation of foreign operations Release of translation reserve upon disposal of foreign operations Share of translation reserve of an associate Gain on revaluation of property upon transfer to investment property Profit for the period Total comprehensive income for the period Dividends paid Disposal of partial interest in a subsidiary Transfer to legal reserve Deemed capital contribution from non-controlling interests Disposal of a subsidiary to ultimate holding company Recognition of other service costs At 31 January 2012 At 1 April 2010 Exchange differences arising on translation of foreign operations Share of translation reserve of an associate Fair value gain on available-for-sale investment Profit for the period Total comprehensive income for the period Dividends paid Recognition of other service costs At 31 January 2011	Share capital HK$’000 – – – – – – – – – – – – 40 40 – – – – – – – 40	Share premium HK$’000 – – – – – – (10,000) – – – – – 34,699 50,699 – – – – – (6,000) – 44,699	Legal reserve HK$’000 – – – – – – – – 12 – – – 61 49 – – – – – – – 49	Statutory reserve I r HK$’000 – – – – – – – – – – – – 690 690 – – – – – – – 690	Attributable nvestment evaluation reserve r HK$’000 – – – – – – – – – – – – 3,151 – – – 3,151 – 3,151 – – 3,151	to owners of t Property evaluation reserve T HK$’000 – – – 1,720 – 1,720 – – – – – – 1,720 – – – – – – – – –	he Company ranslation reserve Sha co HK$’000 4,058 (316) 227 – – 3,969 – – – – – – 12,054 5,225 2,398 67 – – 2,465 – – 7,690	reholders’ ntribution reserve HK$’000 – – – – – – – – – – – – 6,615 6,615 – – – – – – – 6,615	Other reserves Acc HK$’000 – – – – – – – 37,546 – – (37,546) 3,111 32,978 20,534 – – – – – – 7,778 28,312	umulated profits HK$’000 – – – – 91,356 91,356 (110,672) – (12) – 37,546 – 308,445 219,903 – – – 108,017 108,017 (70,800) – 257,120	Sub-total Non– controlling interests HK$’000 HK$’000 4,058 – (316) – 227 – 1,720 – 91,356 (26) 97,045 (26) (120,672) – 37,546 (7) – – – 7,923 – (7,890) 3,111 – 400,453 – 303,755 – 2,398 – 67 – 3,151 – 108,017 – 113,633 – (76,800) – 7,778 – 348,366 –	Total HK$’000 4,058 (316) 227 1,720 91,330
												97,019 (120,672) 37,539 – 7,923 (7,890) 3,111
												400,453

												303,755
												2,398 67 3,151 108,017
												113,633 (76,800) 7,778
												348,366

– 40 –

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

APPENDIX II

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR EACH OF THE THREE YEARS ENDED 31 MARCH 2011 AND THE TEN MONTHS ENDED 31 JANUARY 2012

Operating activities Profit before taxation Adjustments for: Depreciation of property, plant and equipment Amortisation of other intangible assets Loss on disposal of subsidiaries Loss (gain) on disposal of property, plant and equipment Allowance for inventories Interest income Interest expense Share of profit of an associate Other service costs Operating cash flow before movements in working capital Increase in properties under development for sale Decrease (increase) in inventories (Increase) decrease in amounts due from related companies Decrease (increase) in trade and other receivables Decrease (increase) in bills receivable (Increase) decrease in amounts due from customers for contract work (Increase) decrease in retentions receivable (Decrease) increase in trade and other payables Increase (decrease) in bills payable Increase (decrease) in amount due to a related company	Ten months ended 31 January 2012 2011 HK$’000 HK$’000 107,416 128,238 7,458 2,693 4,407 2,607 1,046 – 341 344 310 – (612) (862) 2,234 465 (209) (1,097) 3,111 7,778 125,502 140,166 (422,479) (333,941) 8,071 (11,063) (3,150) (8,881) 103,474 (118,895) 10,276 (20,419) (94,387) (66,563) (2,479) 8,685 (40,379) (90,160) – 1,501 – 18,392	Year 2011 HK$’000 167,036 3,921 3,488 – 350 982 (1,020) 937 (193) 9,333 184,834 (335,853) (9,517) (5,881) (129,313) (9,860) (122,502) 2,910 30,813 – 18,393	ended 31 March 2010 2009 HK$’000 HK$’000 225,543 167,517 999 753 1,686 – – – 91 (8) – – (1,030) (932) 415 2,920 – – 20,534 – 248,238 170,250 – – – – (2,408) 2,106 223,891 (34,102) (5,945) – (80,034) 71,231 (19,959) (5,752) (129,916) 81,754 (2,291) 1,921 (1,233) 5,181

– 41 –

APPENDIX II

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

Ten months ended

Increase (decrease) in amounts due to customers for contract work Cash (used in) from operations Interest paid Income tax refunded Income tax paid Net cash (used in) from operating activities Investing activities Purchases of property, plant and equipment Purchases of other intangible assets Acquisition of subsidiaries Purchase of available-for-sale investment Acquisition of an associate Proceeds from disposal of property, plant and equipment Interest received Decrease in pledged bank deposits Disposal of subsidiaries Advance to fellow subsidiaries Net cash from (used in) investing activities Financing activities New bank borrowings raised Repayments of bank borrowings Dividends paid Advance from ultimate holding company Proceeds from disposal of partial interest in a subsidiary without losing control Proceeds from sale of shareholder’s loan	31 January 2012 2011 HK$’000 HK$’000 15,970 66,593 (299,581) (414,585) (6,268) (739) 219 19 (21,750) (35,750) (327,380) (451,055) (11,276) (3,548) – – – (58,667) – (11,872) – (20,771) – 2 612 862 – – 27,956 – (158) – 17,134 (93,994) 618,183 417,145 (414,147) (35,322) (120,672) (76,800) 21,285 168,277 37,539 – 50,311 –	Year 2011 HK$’000 (4,858) (380,834) (1,556) 19 (36,248) (418,619) (4,416) – (58,667) (11,872) (20,771) 6 1,020 – – – (94,700) 444,097 (78,668) (76,800) 127,034 – –	ended 31 March 2010 2009 HK$’000 HK$’000 (102) 5,210 230,241 297,799 (415) (2,920) 4 127 (41,042) (10,421) 188,788 284,585 (1,943) (1,516) (1,823) – – – – – – – 7 16 1,030 932 809 69,981 – – – – (1,920) 69,413 94,958 137,992 (121,625) (269,686) (178,500) (113,000) 339,323 – – – – –

– 42 –

APPENDIX II

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

Advance from non-controlling interests (Repayment to) advance from a jointly controlled entity Net cash from (used in) financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period/year Effect on foreign exchange rate changes Cash and cash equivalents at the end of the period/year, representing bank balances and cash	Ten months ended 31 January 2012 2011 HK$’000 HK$’000 50,960 – (19) (870) 243,440 472,430 (66,806) (72,619) 422,225 518,628 2,753 1,991 358,172 448,000	Year 2011 HK$’000 – (1,008) 414,655 (98,664) 518,628 2,261 422,225	ended 31 March 2010 2009 HK$’000 HK$’000 – – 6,354 – 140,510 (244,694) 327,378 109,304 191,074 81,064 176 706 518,628 191,074

– 43 –

FINANCIAL INFORMATION ON THE DISPOSAL GROUP

APPENDIX II

1. GENERAL

On 16 May 2012, the Company has entered into an agreement with Jangho Curtain Wall Hongkong Limited, an independent third party, pursuant to which the Company has conditionally agreed to sell and the purchaser has conditionally agreed to purchase 85% interest in the Disposal Group at a cash consideration of HK$493,000,000. Upon completion of the Disposal, the Disposal Group will cease to be the subsidiaries and become an associate of the Company.

2. BASIS OF PRESENTATION OF THE UNAUDITED CONSOLIDATED FINANCIAL INFORMATION

The Unaudited Consolidated Financial Information of the Disposal Group for each of the three years ended 31 March 2011 and the ten months ended 31 January 2012 has been prepared in accordance with paragraph 68(2)(a)(i) of Chapter 14 of the Listing Rules, and solely for the purpose of inclusion in the circular to be issued by the Company in connection with the Disposal.

The Unaudited Consolidated Financial Information has been prepared in accordance with the relevant accounting policies adopted by the Company for the relevant years or periods in the preparation of the consolidated financial information of the Company. The Unaudited Consolidated Financial Information does not contain sufficient explanatory notes to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard 1 “Presentation of Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants.

– 44 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

(A) ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

==> picture [80 x 38] intentionally omitted <==

TO THE DIRECTORS OF SUNDART INTERNATIONAL HOLDINGS LIMITED

We report on the unaudited pro forma financial information of Sundart International Holdings Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), which has been prepared by the directors of the Company for illustrative purposes only, to provide information about how the proposed disposal of 85% interest in Sundart Holdings Limited and its subsidiaries (the “Disposal Group”) might have affected the financial information presented, for inclusion in Appendix III to the circular dated 1 June 2012 (the “Circular”). The basis of preparation of the unaudited pro forma financial information is set out in Section B of this appendix.

Respective Responsibilities of Directors of the Company and Reporting Accountants

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

It is our responsibility to form an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the unaudited pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

Basis of Opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants. Our work consisted primarily of comparing the unadjusted financial information with source documents, considering the evidence supporting the adjustments and discussing the unaudited pro forma financial information with the directors of the Company. This engagement did not involve independent examination of any of the underlying financial information.

– 45 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the unaudited pro forma financial information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and the adjustments are appropriate for the purpose of the unaudited pro forma financial information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

The unaudited pro forma financial information is for illustrative purpose only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in future and may not be indicative of the financial position of the Group as at 30 September 2011 or the results and cash flows of the Group for the year ended 31 March 2011, or for any future period.

Opinion

In our opinion:

(a) the unaudited pro forma financial information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group so far as such policies related to the transactions; and
(c) the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

Deloitte Touche Tohmatsu

Certified Public Accountants Hong Kong

1 June 2012

– 46 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

(B) UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

Introduction

On 16 May 2012, Sundart International Holdings Limited (the “Company”) entered into an agreement with an independent third party, Jangho Curtain Wall Hongkong Limited (the “Purchaser”) (the “Agreement”), pursuant to which the Company has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase 85% interest in Sundart Holdings Limited (“Sundart Holdings”) and its subsidiaries (the “Disposal Group”) at a cash consideration of HK$493,000,000 (the “Disposal”). Upon completion of the Disposal, the Disposal Group will cease to be the subsidiaries of the Company and become an associate of the Company. For the purpose of this unaudited pro forma financial information, the Company and its subsidiaries (the “Group”) immediately after completion of the Disposal are hereinafter referred to as the “Remaining Group”.

In January 2012, the Disposal Group underwent a reorganization before completion of the Disposal (the “Reorganization”). The Reorganization involved disposal of four subsidiaries held by Sundart Holdings to the Company at a consideration equal to the aggregate net assets of these subsidiaries, including Talent Step Investments Limited, Keen Virtue Group Limited, Wit Legend Investments Limited and Vital Success Development Limited (the “Four Subsidiaries”). As set out in the Agreement, the Company has undertaken (i) to ensure that the shareholder’s loan owned by the Disposal Group to the Company is HK$80,000,000 as at the date of completion; and (ii) to continue to provide financial guarantees to the Disposal Group in connection with bank loans advanced to the Disposal Group for a period of six months to one year after the date of completion.

Upon the Disposal, the Group is able to exercise significant influence over the Disposal Group because it has the power to appoint one out of five directors of Sundart Holdings pursuant to the shareholders’ agreement that will be entered among the Company, the Purchaser and Sundart Holdings upon completion of the Disposal. The directors of the Company consider the Company can exercise significant influence over Sundart Holdings which is accounted for as an associate under equity method in the consolidated financial statements of the Group after the Disposal. For the purpose of this unaudited pro forma financial information, the fair value of remaining 15% interest in the Disposal Group as at the date of completion is estimated to be HK$87,000,000, being the amount in proportion to the cash consideration of HK$493,000,000 in respect of the proposed disposal of 85% interest in Sundart Holdings.

– 47 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

Basis of preparation of the unaudited pro forma financial information of the Remaining Group

The unaudited pro forma financial information of the Remaining Group is prepared in accordance with paragraph 29 of Chapter 4 of the Listing Rules to illustrate the effect of the Disposal.

The unaudited consolidated statement of financial position of the Remaining Group is prepared based on the unaudited condensed consolidated statement of financial position of the Group as at 30 September 2011 as extracted from the interim report of the Company for the six months ended 30 September 2011, after making pro forma adjustments relating to the Disposal, as if the Disposal had been completed on 30 September 2011.

The unaudited pro forma consolidated statement of comprehensive income and the unaudited pro forma consolidated statement of cash flows of the Remaining Group are prepared based on the consolidated statement of comprehensive income and the consolidated statement of cash flows of the Group for the year ended 31 March 2011 as extracted from the annual report of the Company for the year ended 31 March 2011, after making pro forma adjustments relating to the Disposal, as if the Disposal had been completed on 1 April 2010.

The unaudited pro forma financial information is based on the aforesaid historical data after giving effect to the pro forma adjustments described in the accompanying notes. Narrative description of the pro forma adjustments that are (i) directly attributable to the transactions and (ii) factually supportable, is summarised in the accompanying notes.

This unaudited pro forma financial information has been prepared by the directors of the Company for illustrative purposes only and is based on a number of assumptions, estimates, uncertainties and currently available information. Because of its hypothetical nature, the unaudited pro forma financial information may not give a true picture of the results, cash flows, or financial position of the Group upon completion of the Disposal or of any future period or of any future date.

– 48 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 SEPTEMBER 2011

The Group as at 30 September 2011 Pro forma adjustments for the Disposal HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) Note (a) Note (b) Note (c) Note (d) Note (e) Note (l) NON-CURRENT ASSETS Property, plant and equipment 29,255 (29,255) Investment property 6,255 (6,255) Goodwill 1,510 (1,510) Other intangible assets 18,620 (18,620) Interests in associates 18,323 (18,323) 18,323 87,000 Available-for-sale investment 15,519 (15,519) 89,482 CURRENT ASSETS Properties under development for sale 736,962 (736,962) 736,962 Inventories 32,258 (32,258) Amount due from the Disposal Group – 510,575 (203,754) (226,821) Trade and other receivables 252,924 (252,717) Bills receivable 1,899 (1,899) Amounts due from customers for contract work 433,321 (433,321) Retentions receivable 131,235 (131,235) Tax recoverable 2,275 (2,230) Bank balances and cash 366,049 (359,512) 3,857 (5,000) 493,000 226,821 1,956,923	The Remaining Group as at 30 September 2011 HK$’000 – – – – 105,323 –
	105,323
	736,962 – 80,000 207 – – – 45 725,215
	1,542,429

– 49 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

The Group as at 30 September 2011 Pro forma adjustments for the Disposal HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) Note (a) Note (b) Note (c) Note (d) Note (e) Note (l) CURRENT LIABILITIES Trade and other payables 357,629 (356,857) 4,162 Bills payable 1,271 (1,271) Amounts due to customers for contract work 14,625 (14,625) Dividend payable 40,800 Tax payable 25,095 (25,095) Bank borrowings 100,975 (100,975) 540,395 NET CURRENT ASSETS 1,416,528 TOTAL ASSETS LESS CURRENT LIABILITIES 1,506,010 CAPITAL AND RESERVES Share capital 4,800 Reserves 909,882 (11,927) (5,000) 186,036 Equity attributable to owners of the Company 914,682 Non-controlling interests 7,899 (7,899) 7,899 TOTAL EQUITY 922,581 NON-CURRENT LIABILITIES Bank borrowings 488,581 (488,581) 416,375 Amounts due to non-controlling interests 93,953 (93,953) 93,953 Deferred taxation 895 (895) 583,429 1,506,010	The Remaining Group as at 30 September 2011 HK$’000 4,934 – – 40,800 – –
	45,734
	1,496,695
	1,602,018

	4,800 1,078,991
	1,083,791 7,899
	1,091,690
	416,375 93,953 –
	510,328
	1,602,018

– 50 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2011

							The
							Remaining
	The Group						Group
	for the						for the
	year ended						year ended
	31 March						31 March
	2011	Pro	forma adjustments for		the Disposal		2011
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	Note (f)	Note (g)	Note (h)	Note (d)	Note (i)	note (j)
Revenue	1,362,278	(1,362,278)					–
Cost of sales	(1,111,434) 1,111,434						–
Gross profit	250,844						–
Other income, other gains and
losses	587	(580)				13,975	13,982
Gain on disposal of the Disposal
Group	–				281,470		281,470
Administrative expenses	(68,235) 68,798		(33)			(13,975)	(13,445)
Other service costs	(9,333) 9,333						–
Other expenses	(5,804) 5,513			(5,000)			(5,291)
Share of profits of associates	193	(193)	193		21,140		21,333
Finance costs	(937) 937						–
Profit before taxation	167,315						298,049
Income tax expense	(26,100) 25,912						(188)
Profit for the year	141,215						297,861
Other comprehensive income
(expense)
Exchange difference arising on
translation of foreign
operations	2,777	(2,777)					–
Release of translation reserve
upon disposal of the
Disposal Group	–				(5,225)		(5,225)
Share of other comprehensive
income of associates	83	(83)	83		429		512
Fair value gain on
available-for-sale investment	3,151	(3,151)					–
Other comprehensive income
(expense) for the year	6,011						(4,713)
Total comprehensive income for
the year	147,226						293,148

– 51 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2011

						The
						Remaining
	The Group					Group
	for the					for the
	year ended					year ended
	31 March					31 March
	2011	Pro forma	adjustments for the Disposal			2011
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	Note (f)	Note (g)	Note (h)	Note (d)	Note (k)
OPERATING ACTIVITIES
Profit before taxation	167,315	(167,036)	160	(5,000)	302,610	298,049
Adjustments for:
Depreciation of property, plant and
equipment	3,921	(3,921)				–
Amortisation of other intangible assets	3,488	(3,488)				–
Loss on disposal of property, plant and
equipment	350	(350)				–
Gain on disposal of the Disposal Group	–				(281,470)	(281,470)
Allowance for inventories	982	(982)				–
Interest income	(1,027)	1,020				(7)
Interest expense	937	(937)				–
Share of profits of associates	(193)	193	(193)		(21,140)	(21,333)
Other service costs	9,333	(9,333)				–
Operating cash flows before movements in
working capital	185,106					(4,761)
Increase in properties under development for
sale	(335,853)	335,853	(335,853)			(335,853)
Increase in inventories	(9,517)	9,517				–
Increase in amounts due from related
companies	(5,881)	5,881				–
Increase in amount due from the Disposal
Group	–	(13,975)				(13,975)
(Increase) decrease in trade and other
receivables	(129,207)	129,313				106
Increase in bills receivable	(9,860)	9,860				–
Increase in amounts due from customers for
contract work	(122,502)	122,502				–
Decrease in retentions receivable	2,910	(2,910)				–
Increase in trade and other payables	31,101	(30,813)	1,613			1,901
Increase in amount due to a related company	18,393	(18,393)				–
Decrease in amounts due to customers for
contract work	(4,858)	4,858				–

– 52 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

						The
						Remaining
	The Group					Group
	for the					for the
	year ended					year ended
	31 March					31 March
	2011	Pro forma	adjustments for the		Disposal	2011
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	Note (f)	Note (g)	Note (h)	Note (d)	Note (k)
Cash used in operations	(380,168)					(352,582)
Interest paid	(1,556)	1,556	(619)			(619)
Income tax refunded	19	(19)				–
Income tax paid	(36,683)	36,248				(435)
Net cash used in operating activities	(418,388)					(353,636)
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(4,416)	4,416				–
Acquisition of subsidiaries	(58,667)	58,667				–
Purchase of available-for-sale investment	(11,872)	11,872				–
Acquisition of an associate	(20,771)	20,771	(20,771)			(20,771)
Repayments from the Disposal Group	–	(113,059)	166,714			53,655
Proceeds from disposal of property, plant and
equipment	6	(6)				–
Dividends received from an associate	–				11,520	11,520
Interest received	1,027	(1,020)				7
Disposal of the Disposal Group	–				233,695	233,695
Net cash used in (from) investing activities	(94,693)					278,106
FINANCING ACTIVITIES
New bank borrowings raised	444,097	(444,097)	189,000			189,000
Repayments of bank borrowings	(78,668)	78,668				–
Dividends paid	(76,800)					(76,800)
Repayment to a jointly controlled entity	(1,008)	1,008				–
Net cash from financing activities	287,621					112,200

– 53 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

						The
						Remaining
	The Group					Group
	for the					for the
	year ended					year ended
	31 March					31 March
	2011	Pro forma	adjustments for the		Disposal	2011
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
	Note (f)	Note (g)	Note (h)	Note (d)	Note (k)
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS	(225,460)					36,670
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR	657,506					657,506
EFFECT OF FOREIGN EXCHANGE RATE
CHANGES	2,261	(2,261)				–
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR,
represented by bank balances and cash	434,307					694,176

Notes:

(a) Figures are extracted from the unaudited interim financial information of the Group as set out in the interim report of the Company for the six months ended 30 September 2011.
(b) The adjustment reflects the exclusion of assets and liabilities (net of non-controlling interests) and the release of translation reserve of the Disposal Group as at 30 September 2011 assuming the Disposal had been taken place on 30 September 2011.

Figures are extracted from the unaudited management accounts of the Disposal Group as at 30 September 2011 prepared by the directors of the Company.

(c) The adjustment reflects the inclusion of assets and liabilities of the Four Subsidiaries in the Remaining Group as at 30 September 2011. Figures are extracted from the unaudited management accounts of the Four Subsidiaries for the six months ended 30 September 2011 prepared by the directors of the Company.
(d) The adjustment recognises transaction costs of HK$5,000,000 (including but not limited to legal and professional fees) directly attributable to the Disposal estimated by the directors of the Company.

– 54 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

(e) The adjustment recognises the remaining 15% interest in the Disposal Group as interest in an associate of HK$87,000,000 and the estimated gain on the Disposal assuming the Disposal had been taken place on 30 September 2011.

Cash consideration
Estimated fair value of remaining 15% interest in the Disposal Group
Carrying amounts of assets and liabilities (net of non-controlling interests)
of the Disposal Group (note b)
Release of translation reserve of the Disposal Group excluding
the Four Subsidiaries (note b)
Carrying amounts of assets and liabilities (net of non-controlling interests)
of the Four Subsidiaries (note c)
Estimated gain on the Disposal

HK$’000
493,000
87,000
(438,890)
11,927
32,999
186,036

In the opinion of directors of the Company, the fair values in relation to the guarantees provided by the Company to the Disposal Group as at 30 September 2011 are immaterial and are not recognised in the pro forma financial information of the Remaining Group.

(f) Figures are extracted from the audited consolidated financial statements of the Group as set out in the annual report of the Company for the year ended 31 March 2011.
(g) The adjustment reflects the exclusion of results and cash flows of the Disposal Group for the year ended 31 March 2011 assuming the Disposal had been taken place on 1 April 2010. Figures are extracted from the unaudited consolidated financial statements of the Disposal Group for the year ended 31 March 2011 as set out in Appendix II to this circular.
(h) The adjustment reflects the inclusion of results and cash flows of the Four Subsidiaries in the Remaining Group for the year ended 31 March 2011. Figures are extracted from the unaudited management accounts of the Four Subsidiaries for the year ended 31 March 2011 prepared by the directors of the Company.
(i) This adjustment recognises the share of profit and other comprehensive income of an associate of HK$21,140,000 and HK$429,000, respectively, and the estimated gain on the Disposal assuming the Disposal had been taken place on 1 April 2010.

The share of profit and other comprehensive income of an associate (i.e. the Disposal Group) are arrived at 15% of the profit and other comprehensive income of the Disposal Group excluding the Four Subsidiaries for the year ended 31 March 2011 as extracted from the unaudited management accounts of the Disposal Group and the Four Subsidiaries for the year ended 31 March 2011.

Cash consideration Estimated fair value of remaining 15% interest in the Disposal Group (note e) Carrying amounts of assets and liabilities of the Disposal Group as at 1 April 2010 Release of translation reserve of the Disposal Group as at 1 April 2010 Estimated gain on the Disposal	HK$’000 493,000 87,000 (303,755) 5,225 281,470

The carrying amounts of assets and liabilities and translation reserve of the Disposal Group as at 1 April 2010 are extracted from the unaudited consolidated financial statements of the Disposal Group for the year ended 31 March 2011 as set out in Appendix II to this circular.

– 55 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX III

The Four Subsidiaries are incorporated after 1 April 2010 and therefore not included in the above calculation of estimated gain on the Disposal.

In the opinion of directors of the Company, the fair values in relation to the guarantees provided by the Company to the Disposal Group as at 1 April 2010 are immaterial and are not recognised in the pro forma financial information of the Remaining Group.

(j) This adjustment restates management fee income charged by the Company to the Disposal Group for the year ended 31 March 2011 and eliminates corresponding management fee expenses included in the administrative expenses of the Disposal Group (as set out in note g) for the same period.
(k) The adjustment recognises the following amounts assuming the Disposal had been taken place on 1 April 2010:

(i)
Share of profit of an associate (note i)
(ii)
Estimated gain on the Disposal (note i)
(iii)
Dividends received from an associate
(iv)
Net cash inflow arising from the Disposal, comprising
– Cash consideration
– Cash and cash equivalents of the Disposal Group as at 1 April
2010
– Repayment of shareholder’s loan considering the Company’s
undertaking to ensure that the shareholder’s loan owned by the
Disposal Group is HK$80,000,000 as at 1 April 2010

HK$’000
HK$’000
21,140
281,470
11,520
233,695
493,000
(518,628)
259,323

The Company entitles to 15% of the dividends distributed by the Disposal Group of HK$76,800,000 for the year ended 31 March 2011.

The dividends distribution by the Disposal Group of HK$76,800,000 and the cash and cash equivalents of the Disposal Group as at 1 April 2010 are extracted from the unaudited consolidated financial statements of the Disposal Group as set out in Appendix II to this circular.

(l) The adjustment reflects the undertaking by the Company to ensure that the shareholder’s loan owned by the Disposal Group to the Company is HK$80,000,000 as at the date of completion. The difference in excess of the outstanding amount due from the Disposal Group would be repaid in cash.

The above pro forma adjustments, except for note (j), will have no continuing effect on the Remaining Group in the subsequent reporting periods.

– 56 –

GENERAL INFORMATION

APPENDIX IV

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(1) Interests of Directors and chief executives

As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO) or are required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or were required pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers of the Listing Rules (the “ Model Code ”) to be notified to the Company and the Stock Exchange were as follows:

Long position

Name of Director Nature of interest and capacity Mr. Chan Interest in a controlled corporation(2) Other interest(1) Mr. Ng Beneficial owner Mr. Leung Beneficial owner Mr. Wong Beneficial owner	Total number of shares held as at the Latest Practicable Date 97,104,000 97,104,000 194,208,000 84,000,000 34,272,000 20,520,000	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date 20.335% 20.335%
		40.67% 17.59% 7.18% 4.3%

– 57 –

GENERAL INFORMATION

APPENDIX IV

Note:

Since Tiger Crown, Scenemay, Mr. Chan, Mr. Li Chu Kwan (“ Mr. Li ”) and Ms. Li Wing Yin (“ Ms. Li ”) are regarded as a group of controlling shareholders acting in concert to exercise their voting rights in the Company, pursuant to the provisions of the SFO, each of them is deemed to be interested in the 97,104,000 Shares beneficially owned or deemed to be interested by each other. Tiger Crown, Scenemay, Mr. Chan, Mr. Li and Ms. Li together are therefore interested in a total of 40.67% of the issued share capital of the Company.
The entire issued share capital of Tiger Crown is owned by Mr. Chan. As Mr. Chan controls more than one-third of the voting power in general meetings of Tiger Crown, he is deemed to be interested in the 97,104,000 Shares beneficially owned by Tiger Crown.

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors and chief executives of the Company had any interests and short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO) or were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or were required pursuant to the Model Code to be notified to the Company and the Stock Exchange.

(2) Interests of Substantial Shareholders

As at the Latest Practicable Date, the following persons (other than a Director or chief executive of the Company) and companies had an interest or short position in the Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Long position

Name Nature of interest and capacity Tiger Crown (1) Beneficial owner Other interest(2)	Total number of shares held as at the Latest Practicable Date 97,104,000 97,104,000 194,208,000	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date 20.335% 20.335%
		40.67%

– 58 –

APPENDIX IV

GENERAL INFORMATION

Name Nature of interest and capacity Scenemay(3) Beneficial owner Other interest(2) Mr. Li Interest in a controlled corporation(3) Other interest (2) Ms. Li Interest in a controlled corporation(3) Other interest (2)	Total number of shares held as at the Latest Practicable Date 97,104,000 97,104,000 194,208,000 97,104,000 97,104,000 194,208,000 97,104,000 97,104,000 194,208,000	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date 20.335% 20.335%
		40.67% 20.335% 20.335%
		40.67% 20.335% 20.335%
		40.67%

Note:

Tiger Crown is wholly-owned by Mr. Chan and so Mr. Chan is deemed to be interested in the Shares beneficially owned by Tiger Crown pursuant to the provisions of the SFO.
Since Tiger Crown, Scenemay, Mr. Chan, Mr. Li and Ms. Li are regarded as a group of controlling shareholders acting in concert to exercise their voting rights in the Company, pursuant to the provisions of the SFO, each of them is deemed to be interested in the 97,104,000 Shares owned or deemed to be interested by each other.
The entire issued share capital of Scenemay is owned by Mr. Li and Ms. Li in equal shares. As each of Mr. Li and Ms. Li respectively controls more than one-third of the voting power in general meetings of Scenemay, each of Mr. Li and Ms. Li is deemed to be interested in the 97,104,000 Shares beneficially owned by Scenemay.

Save as disclosed above, as at the Latest Practicable Date, so far as is known to any Director and chief executive of the Company, no other person (not being a Director or chief executive of the Company) or company had, or were deemed to have, any interests or short positions in the Shares and underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO.

– 59 –

GENERAL INFORMATION

APPENDIX IV

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into or proposed to enter into a service contract or had an unexpired service with any member of the Group which is not determinable by the Group within one year without payment of compensation, other than statutory compensation.

4. DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors and their respective associates (as defined in the Listing Rules) had any interest in any business which competes or may compete with the business of the Group or had any other conflict of interest with the Group.

5. DIRECTORS INTERESTS IN ASSETS, CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date:

(i) none of the Directors had any direct or indirect interest in any assets acquired or disposed of by or leased to, or which were proposed to be acquired, disposed of by or leased to, any member of the Group since 31 March 2011, the date up to which the latest published audited accounts of the Group were made up; and
(ii) none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group taken as a whole.

6. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration proceedings of material importance and there is no litigation or claim of material importance known to the Directors to be pending or threatened by or against any member of the Group.

7. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Group within two years immediately preceding the Latest Practicable Date which are or may be material:

(1) a provisional sale and purchase agreement dated 31 May 2010 entered into between Vital Success as purchaser, and Malleson Limited, an independent third party, as vendor, for the acquisition of Kwun Tong Inland Lot No.526, Elite Industrial Building, 135-137 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong at a consideration of HK$315,000,000;

– 60 –

APPENDIX IV

GENERAL INFORMATION

(2) a sale and purchase agreement dated 13 August 2010 entered into between Sundart Products Limited (“ Sundart Products ”), a wholly-owned subsidiary of the Company, as purchaser, Sundart Products Group Limited (“ SPG ”), as vendor, and Mr. Leung, an executive Director and the Company’s Chief Operating Officer, as guarantor of SPG, whereby SPG agreed to sell to Sundart Products all its equity interest in and shareholder’s loan to Sundart Living Limited, a wholly-owned subsidiary of SPG, at a consideration of HK$39,500,000;
(3) a sale and purchase agreement dated 30 August 2010 entered between Glory Spring Investments Limited (“ Glory Spring ”), a wholly-owned subsidiary of the Company, as purchaser, and Leung Fai, Leung Kwong Yuen and Leung Hon Sing Allan, as vendors and the Company as the guarantor of Glory Spring, whereby the vendors agreed to sell to Glory Spring all their interest in Kin Shing (Leung’s) General Contractors Limited at a consideration of HK$28,000,000;
(4) a subscription agreement dated 15 September 2010 entered between Talent Step Investments Limited (“ Talent Step ”), a wholly-owned subsidiary of the Company, Borrison (B.V.I.) Limited and KLR Holdings, pursuant to which Talent Step subscribed for 2,936 ordinary shares of US$0.1 each representing 29.36% interest in KLR Holdings for a cash consideration of US$2,667,500 or approximately HK$20,771,000;
(5) a refurbishment agreement dated 30 November 2010 entered into between Sundart Engineering Services (Macau) Limited (“ Sundart (Macau) ”), a wholly-owned subsidiary of the Company and Waldo Hotel Limited (“ Waldo ”), a connected person of the Company, whereby Sundart (Macau) agreed with Waldo to undertake certain refurbishment works for one floor of Waldo Hotel, which is located at Av. Da Amizada, Macau, at a consideration of HK$3,000,000;
(6) a sale and purchase agreement dated 14 June 2011 entered into among SCJREP IV Cayman E, Ltd. (“ SCJREP ”) and Green Capital Group Limited (“ Green Capital ”) as purchasers, Keen Virtue Group Limited (“ Keen Virtue ”), a wholly-owned subsidiary of the Company, as vendor, and the Company as the guarantor of Keen Virtue, whereby SCJREP and Green Capital agreed to purchase and Keen Virtue agreed to sell 35% of its equity interest in and shareholders’ loan to Wit Legend Investments Limited, a wholly-owned subsidiary of Keen Virtue, for an aggregate consideration of HK$87,850,000;
(7) a sale and purchase agreement dated 31 August 2011 entered into between Sundart Holdings as vendor and Mr. Leung, an executive Director and Chief Operating Officer of the Company, as purchaser, whereby Mr. Leung agreed to acquire from Sundart Holdings the entire issued share capital of Sundart Development Limited, a wholly-owned subsidiary of the Company for a total consideration of HK$4,400,000; and
(8) the Agreement.

– 61 –

GENERAL INFORMATION

APPENDIX IV

8. EXPERT

The qualification of the expert who has given opinion in this circular is as follows:

Name Qualification Deloitte Touche Tohmatsu Certified Public Accountants (“ Deloitte ”)

As at the Latest Practicable Date, Deloitte did not have any shareholding in any member of the Group and did not have any right (whether legally enforceable or not) to subscribe or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, Deloitte did not have any interest, direct or indirect, in any assets which had been, since 31 March 2011, the date to which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

9. CONSENT

Deloitte has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its report and references to its name and advice or opinion in the form and context in which it appears in this circular.

10. GENERAL

(a) The registered office of the Company is situated at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands. The Hong Kong head office and principal place of business of the Company is situated at 25/F, Millennium City 3, 370 Kwun Tong Road, Kowloon, Hong Kong.
(b) The Company’s branch share registrar and transfer office in Hong Kong is Tricor Investor Services Limited situated at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(c) The company secretary of the Company is Yeung Man Yan, Megan, a qualified solicitor in Hong Kong.
(d) In the event of inconsistency, the English text of the circular and the accompanying form of proxy shall prevail over the Chinese text thereof.

– 62 –

GENERAL INFORMATION

APPENDIX IV

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business of the Company in Hong Kong at 25/F, Millennium City 3, 370 Kwun Tong Road, Kowloon, Hong Kong during normal business hours on any weekday (except public holidays) for a period of 14 days from the date hereof:

(a) the Shareholders’ Agreement;
(b) the memorandum of association and the articles of association of the Company;
(c) the Prospectus;
(d) the annual report of the Company for the financial year ended 31 March 2010;
(e) the 2011 Annual Report;
(f) the 2011 Interim Report;
(g) the report from Deloitte on the unaudited pro forma financial information on the Remaining Group, the text of which is set out in Appendix III to this circular;
(h) the written consent from Deloitte referred to in paragraph headed “Consent” in this Appendix; and
(i) each of the material contracts entered into by the Group, as referred to in the paragraph headed “Material Contracts” in this Appendix.

– 63 –

NOTICE OF EGM

SUNDART INTERNATIONAL HOLDINGS LIMITED 承達國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ Meeting ”) of Sundart International Holdings Limited (the “ Company ”) will be held at 3:00 p.m. on 20 June 2012 at Centenary Room I, Marco Polo Hongkong Hotel, 3 Canton Road, Harbour City, Tsim Sha Tsui, Hong Kong, for the purpose of considering, and if appropriate, passing, with or without modification, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT

(a) the sale and purchase agreement dated 16 May 2012 (the “ Agreement ”, a copy of which is produced to the meeting marked “A” and initialed by the chairman of the meeting for the purpose of identification) entered into between the Company and Jangho Curtain Wall Hongkong Limited (the “ Purchaser ”) pursuant to which the Company agreed to sell, and the Purchaser agreed to purchase, 85% of the issued share capital of Sundart Holdings Limited (“ Sundart Holdings ”) and all transactions contemplated under the Agreement and any other agreements or documents in connection therewith be and are hereby approved, confirmed and/or ratified;
(b) the shareholders’ agreement expected to be entered into upon completion of the Agreement between the Company, the Purchaser and Sundart Holdings to provide for the ownership, management, financing and other activities of Sundart Holdings and its subsidiaries (the “ Shareholders’ Agreement ”, a copy of which is produced to the meeting marked “B” and initialed by the chairman of the meeting for the purpose of identification) and all transactions contemplated under the Shareholders’ Agreement and any other agreements or documents in connection therewith be and are hereby approved, confirmed and/or ratified; and
(c) any one director of the Company, or any two directors of the Company if the affixation of the common seal is necessary, be and is/are hereby authorized for and on behalf of the Company to execute all such other documents and agreements and do all such acts and things as he or they may in his or their absolute discretion consider to be necessary, desirable, appropriate or expedient to implement and/or give effect to the Agreement, the Shareholders Agreement and the transactions contemplated thereunder and all matters incidental to, ancillary to or in connection with the Agreement, the Shareholders Agreement and/or any further agreement or document as mentioned in paragraphs (a) and (b) above and/ or the transactions contemplated thereunder and all other matters incidental

– 64 –

NOTICE OF EGM

thereto, including agreeing and making any modifications, amendments, waivers, variations or extensions of the Agreement, the Shareholders Agreement and/or any further agreement or document as mentioned in paragraphs (a) and (b) above and/ or the transactions contemplated thereunder.”

By Order of the Board Sundart International Holdings Limited 承達國際控股有限公司 Yeung Man Yan Megan Company Secretary

Hong Kong, 1 June 2012

Notes:

Resolution at the Meeting will be taken by poll pursuant to the Rules Governing the Listing of Securities (the “ Listing Rules ”) on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) and the results of the poll will be published on the websites of the Stock Exchange and the Company in accordance with the Listing Rules.
A member entitled to attend and vote at the Meeting is entitled to appoint one or more (if he holds more than one share) proxies to attend and vote instead of him. If more than one proxy is appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed. A proxy need not be a member of the Company.
In order 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 certified copy of that power or authority, must be deposited at the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the holding of the Meeting or any adjournment thereof. Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the Meeting and, in such event, the said form of proxy shall be deemed to be revoked.

As at the date of this notice, the Board comprises Mr. Chan William (Chairman), Mr. Ng Tak Kwan (Chief Executive Officer), Mr. Leung Kai Ming (Chief Operating Officer) and Mr. Yip Chun Kwok as Executive Directors, Mr. Wong Kim Hung, Patrick as Non-executive Director, and Mr. To King Yan, Adam, Mr. Wong Hoi Ki and Mr. Ho Kwok Wah, George as Independent Non-executive Directors.

– 65 –

AI assistant

Rykadan Capital Limited — Proxy Solicitation & Information Statement 2012

50499_rns_2012-06-01_1361dac0-04ed-44c5-a0fa-a45a1fc84213.pdf

SUNDART INTERNATIONAL HOLDINGS LIMITED 承達國際控股有限公司

VERY SUBSTANTIAL DISPOSAL

DISPOSAL OF 85% INTEREST IN SUNDART HOLDINGS

AND

CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

SUNDART INTERNATIONAL HOLDINGS LIMITED 承達國際控股有限公司

VERY SUBSTANTIAL DISPOSAL

DISPOSAL OF 85% INTEREST IN SUNDART HOLDINGS

AND

CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

INTRODUCTION

THE AGREEMENT

Date

Parties

Assets to be disposed of

Consideration

Conditions to Completion

Completion

Change of name

Shareholder’s loans and bank loans and release of bank guarantees

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Payment of accounts receivables

THE SHAREHOLDERS’ AGREEMENT

Board Representation

Financing for the Disposal Group

LETTER FROM THE BOARD

Non-competition

Termination

LETTER FROM THE BOARD

Options

INFORMATION ON THE COMPANY AND THE PURCHASER

STRUCTURE OF THE GROUP BEFORE AND AFTER COMPLETION

INFORMATION ON THE DISPOSAL GROUP

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DISPOSAL

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

BUSINESS OF THE REMAINING GROUP

Real estate development

LETTER FROM THE BOARD

Real estate related investment, fund management and asset management

Distribution of construction and/or decorative materials

FINANCIAL EFFECT OF THE DISPOSAL

USE OF PROCEEDS FROM THE DISPOSAL

LETTER FROM THE BOARD

CHANGE OF USE OF PROCEEDS FROM THE GLOBAL OFFERING

EFFECTS OF THE DISPOSAL ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

Effect on assets/liabilities

Effect on earnings

MANAGEMENT DISCUSSION AND ANALYSIS ON THE REMAINING GROUP

(i) For the ten months period ended 31 January 2012

Results

Segment Results

Liquidity and Financial Resources

Pledge of Assets

Contingent Liabilities and Capital Commitments

Exposure to Fluctuations in Exchange Rates and Interest Rates and Corresponding Hedging Arrangement

Disposal of Partial Interest in a Subsidiary

Employees and Remuneration Policies

(ii) For the financial year ended 31 March 2011

Results

Segment Results

Liquidity and Financial Resources

Pledge of Assets

Contingent Liabilities and Capital Commitments

Exposure to Fluctuations in Exchange Rates and Interest Rates and Corresponding Hedging Arrangement

Acquisition of Hoi Bun Road Property

Acquisition of Interest in KLR Holdings

Employees and Remuneration Policies

(iii) For the two financial years ended 31 March 2009 and 2010

Rykadan Capital Limited Proxy Solicitation & Information Statement 2012