Symphony Holdings 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 you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Symphony Holdings Limited, you should hand this circular to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other registered dealer in securities, or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

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

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**SYMPHONY HOLDINGS LIMITED 新灃集團有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock code: 01223)

MAJOR TRANSACTION INVOLVING

ACQUISITION OF LAND IN SHENYANG, PRC

TO BE FUNDED BY WAY OF FURTHER INJECTION INTO A NON WHOLLY-OWNED SUBSIDIARY

For identification purpose only

Hong Kong, 3 February 2012

CONTENTS

		Page
Definitions . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
Appendix I	Financial Information of the Group. . . . . . . . . . . . . . . . . . . . .	12
Appendix II	Additional Financial Information of the Group . . . . . . . . . . .	18
Appendix III	Accountants’ Report on Shenyang Keenson . . . . . . . . . . . .	20
Appendix IV	Unaudited Pro Forma Financial Information . . . . . . . . . . . .	35
Appendix V	Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	40
Appendix VI	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44

– i –

DEFINITIONS

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

2001 Scheme

the share option scheme of the Company adopted on 22 October 2001

Board

the board of directors of the Company

Boom Origin

Boom Origin Limited, a company incorporated in Hong Kong with limited liability
Capital Injection Agreement
an agreement dated 17 January 2012 entered into between Boom Origin and Shenyang TongDing for capital injection into Shenyang Keenson
Company
Symphony Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Exchange (Stock Code: 01223)
Confirmation Agreement
the confirmation agreement dated 8 December 2011 entered into between Shenyang Keenson and the Land Bureau confirming Shenyang Keenson’s successful bid for the Land at RMB177,943,800
Connected Person
has the meaning ascribed to it by the Listing Rules
December Acquisition
the acquisition of the Land by Shenyang Keenson pursuant to the Confirmation Agreement
Director(s)
executive director(s), non-executive director and independent non-executive director(s) of the Company
Exchange
The Stock Exchange of Hong Kong Limited
Further Injection

the further cash injection by Boom Origin and Shenyang TongDing into Shenyang Keenson in the amount of USD30,766,000 and USD1,034,000 respectively

Group
the Company and its subsidiaries
HKD

Hong Kong dollars, the lawful currency of Hong Kong

– 1 –

DEFINITIONS

Hong Kong Hong Kong Special Administrative Region of PRC

Independent Third Party(ies)

third party(ies) who to the best knowledge, information and belief of the Directors and having made all reasonable enquiry is independent of the Company and its connected persons (as defined in the Listing Rules)

January Acquisition

the acquisition by Boom Origin of a parcel of land located at North Puhe Road (蒲河大道北側), Shenbei New District (瀋北新區), Shenyang, Liaoning Province, PRC on 20 January 2011 and details of which were set out in the circular of the Company dated 11 February 2011
Land a parcel of land located at North Puhe Road (蒲河大道北側), Shenbei New District (瀋北新區), Shenyang, Liaoning Province, PRC
Land Bureau Shenyang Plan and Land Resources Bureau (瀋陽巿規劃和國土資源局)
Land Exchange Center Shenyang Land Reserve and Exchange Center[#] (瀋陽巿土地儲備交易中心), an agent of the Land Bureau to conduct the Open Auction
Latest Practicable Date 31 January 2012, being the latest practicable date prior to the printing of this circular for ascertaining certain information herein
Listing Rules Rules Governing the Listing of Securities on the Exchange
Open Auction
the open auction of land held by Land Exchange Center on 8 December 2011
PRC

the People’s Republic of China

Premium the premium for the December Acquisition
Purchaser

Shenyang Keenson

Renminbi, the lawful currency of PRC

– 2 –

DEFINITIONS

Share(s) shares of HKD0.1 each in the share capital of the Company Shareholders holder(s) of the Shares Shenyang Keenson Shenyang Keenson Alliance Properties Limited, a company incorporated in PRC Shenyang TongDing 瀋陽通鼎商貿有限公司 Shenyang TongDing Trading Limited[#] , a company incorporated in PRC USD United States dollars, the lawful currency of United States of America Vendor Land Bureau Well Success Well Success Investment Limited, a company incorporated in the British Virgin Islands, is directly interested in 50.8% of the issued Shares

For illustration purpose in this circular, unless otherwise stated, the amounts in RMB and USD are translated into HKD at the rates of RMB0.813 = HKD1.000 = USD0.128. No representation is made that any amount in RMB or USD has been or could be converted at the above rates or at any other rates or at all.

# The unofficial English transliterations or translations are for identification purpose only.

– 3 –

LETTER FROM THE BOARD

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**SYMPHONY HOLDINGS LIMITED 新灃集團有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock code: 01223)

Executive Directors:

Mr. Chan Ting Chuen, Chairman Mr. Sze Sun Sun Tony,

Deputy Chairman and Managing Director

Mr. Chang Tsung Yuan, Deputy Chairman Mr. Chan Lu Min Ms. Chen Fang Mei Dr. Ho Ting Seng

Non-executive Director:

Mr. Li I Nan

Independent Non-executive Directors:

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Principal Place of Business in Hong Kong: 10th Floor Island Place Tower 510 King’s Road North Point Hong Kong

Mr. Cheng Kar Shing Mr. Feng Lei Ming Mr. Ho Shing Chak Mr. Huang Shenglan

3 February 2012

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION INVOLVING ACQUISITION OF LAND IN SHENYANG, PRC TO BE FUNDED BY WAY OF FURTHER INJECTION INTO A NON WHOLLY-OWNED SUBSIDIARY

1. INTRODUCTION

Reference is made to the announcements of the Company dated 8 December 2011, 30 December 2011 and 17 January 2012.

For identification purpose only

– 4 –

LETTER FROM THE BOARD

1. INTRODUCTION (Continued)

Shenyang Keenson, a non wholly-owned subsidiary of Boom Origin, which in turn is a wholly-owned subsidiary of the Company, was successful in the Open Auction in bidding for the Land situated at North Puhe Road, Shenyang, Liaoning Province, PRC at the Premium of RMB177,943,800 (approximately HKD218,924,257) on 8 December 2011. On the same day, Shenyang Keenson entered into a Confirmation Agreement with Land Bureau confirming the successful bid of Shenyang Keenson for the Land.

Boom Origin, a wholly-owned subsidiary of the Company, was successful in bidding for one parcel of the land situated at North Puhe Road, Shenyang, Liaoning Province, PRC at an aggregate premium of RMB65,727,334.6 (approximately HKD80,864,339.8) on 20 January 2011. Following the January Acquisition, a PRC investor, Shenyang TongDing, an Independent Third Party has agreed to invest a total of USD4,066,000 (approximately HKD31,511,500) by way of contribution into 38% equity interest in the registered capital of Shenyang Keenson, a project company incorporated for holding and developing the land.

As originally stated in the announcement dated 8 December 2011, Boom Origin, a wholly-owned subsidiary of the Company, proposed to inject further cash into Shenyang Keenson in the aggregate amount of USD29,300,000 (approximately HKD228,059,480) in order to fund the acquisition of the Land. The proposed injection would be contributed solely by Boom Origin. Accordingly, upon completion of the proposed injection, the shareholding interest of Boom Origin in Shenyang Keenson would be increased from 62% to 89.8%.

On 17 January 2012, Boom Origin and Shenyang TongDing entered into the Capital Injection Agreement confirming and restating that, Boom Origin and Shenyang TongDing will provide cash contribution to Shenyang Keenson in the amount of USD30,766,000 (approximately HKD239,470,238) and USD1,034,000 (approximately HKD8,048,242) respectively. Upon completion of the capital contribution pursuant to the Capital Injection Agreement, Boom Origin’s equity interest in Shenyang Keenson will increase from 62% to 88% and Shenyang Keenson will remain a non wholly-owned subsidiary of the Company. Shenyang TongDing’s shareholding in Shenyang Keenson will reduce as a result from 38% to 12%, and will remain a substantial shareholder of a subsidiary of the Company for the purpose of the Listing Rules. Accordingly, the funding to be provided by the Group will increase by USD1,466,000 (approximately HKD11,410,758) from USD29,300,000 (approximately HKD228,059,480) to USD30,766,000 (approximately HKD239,470,238).

The purpose of this circular is to provide you with, among other things, further details in respect of the transaction as required under the Listing Rules.

– 5 –

LETTER FROM THE BOARD

2. DETAILS OF THE DECEMBER ACQUISITION

Tender Award Date : 8 December 2011

Type : Open Auction Parties : (a) Land Bureau as the Vendor. The Company confirmed that Land Bureau and its ultimate beneficial owner are Independent Third Parties; and
(b) Shenyang Keenson as the successful Purchaser.
Valuation : A valuation report on the Land as required under the Listing Rules by independent valuers is set out on pages 40 to 43 of this circular.

Confirmation Agreements

On 8 December 2011, Shenyang Keenson entered into the Confirmation Agreement with Land Bureau confirming the successful bid of Shenyang Keenson for the Land. Pursuant to the Confirmation Agreement, the December Acquisition is conditional upon (a) the development of the Land in line with the PRC Government relocation plan, (b) the payment of the Premium for the Land, and (c) signing of the contracts for the transfer of the land use right of State-owned land for construction[#] (國有建設用地使用權出讓合同) for the Land with Land Bureau.

Premium and Payment Terms

The Premium for acquiring the land use right of the Land is RMB177,943,800 (approximately HKD218,924,257) which is payable by cash. The Premium was derived from the Open Auction held by Land Exchange Center on 8 December 2011 which is required to be conducted in accordance with the relevant PRC laws and regulations. It was determined with reference to the average market price of similar plots of land in the proximity.

– 6 –

LETTER FROM THE BOARD

2. DETAILS OF THE DECEMBER ACQUISITION (Continued)

On 7 December 2011, Shenyang Keenson remitted to Land Exchange Center an amount of RMB36,000,000 (approximately HKD44,290,800) as deposit for the Open Auction, which formed part of the Premium. Unless otherwise extended, the balance of the Premium will be payable within three months from the date on which the Confirmation Agreement is entered into with the Land Bureau.

Under the Confirmation Agreement, the Premium will be payable in cash as follows:

Date of Payment Amount Payable Within three months from the Balance of the Premium (inclusive of date of the Confirmation deposit remitted) for settlement with Agreement foreign exchange

Completion

Completion of the December Acquisition is expected to take place within three months from the date of the Confirmation Agreement. Under the terms of the Open Auction, Shenyang Keenson will enter into the contracts for the transfer of the land use right of State-owned land for construction[#] (國有建設用地使用權出讓合同) with Land Bureau, and application for the issue of the new land use right certificate will take place after payment by Shenyang Keenson of the Premium in full.

3. PARTICULARS OF THE LAND

The Land is located at North Puhe Road, Shenbei New District, Shenyang, Liaoning Province, PRC. Further details of the Land are set out below:

Location	:	North Puhe Road, Shenbei New District,
		Shenyang, Liaoning Province, PRC
Site Area	:	Approximately 94,450 square metres
Maximum Permissible	:	Approximately 188,900 square metres
Gross Floor Area
Permitted Land Use	:	Residential & Commercial
Term of Land Use Rights	:	Maximum 70 years

# The unofficial English transliterations or translations are for identification purpose only.

– 7 –

LETTER FROM THE BOARD

4. DETAILS OF THE FURTHER INJECTION

On 17 January 2012, Boom Origin and Shenyang TongDing entered into the Capital Injection Agreement confirming that, Boom Origin and Shenyang TongDing will provide cash contribution to Shenyang Keenson in the amount of USD30,766,000 (approximately HKD239,470,238) and USD1,034,000 (approximately HKD8,048,242) respectively. Upon completion of the capital contribution pursuant to the Capital Injection Agreement, Boom Origin’s equity interest in Shenyang Keenson will increase from 62% to 88% and Shenyang Keenson will remain a non wholly-owned subsidiary of the Company. Shenyang TongDing’s shareholding in Shenyang Keenson will reduce as a result from 38% to 12%, and will remain a substantial shareholder of a subsidiary of the Company. Accordingly, the funding to be provided by the Group will increase by USD1,466,000 (approximately HKD11,410,758) from USD29,300,000 (approximately HKD228,059,480) to USD30,766,000 (approximately HKD239,470,238).

5. FINANCIAL EFFECTS OF THE ACQUISITION OF THE LAND AND THE FURTHER INJECTION

The injection of the amount of USD30,766,000 (approximately HKD239,470,238) by Boom Origin for the purpose of funding of the Premium for the December Acquisition at the amount of RMB177,943,800 (approximately HKD218,924,257) and general working capital of Shenyang Keenson, which shall be financed by the Group’s internal resources and/or external bank borrowings. Upon Completion, the Land will result in an amount of approximately HKD218,924,257 (equivalent to RMB177,943,800) booked as investment properties in the Group’s consolidated non-current assets. Share of profit or loss to the non controlling interest in Shenyang Keenson shall be reduced from 38% to 12%.

The funding requirements for the December Acquisition and the Further Injection are not expected to have any material adverse impact on the financial position of the Group. The Group plans to build urban commercial amenities on the Land and it is anticipated that it will take few years to complete, hence no rental income will be generated from the Land. It is expected that the transaction will not have any direct material impact on the earnings of the Group in the short run. We would, however, wish to draw your attention to the long-term benefit of the transaction as explained under paragraph 6 “Reasons for and benefits of the December Acquisition” below.

Upon completion of the Further Injection, Shenyang Keenson remains a non wholly-owned subsidiary of the Group.

– 8 –

LETTER FROM THE BOARD

6. REASONS FOR AND BENEFITS OF THE DECEMBER ACQUISITION

The Land is adjoining the land acquired by the Company in January 2011. It is an enlargement of our earlier acquisition. Both pieces are located in the general compound of the Group’s Shenbei Park Outlet.

The Company plans to participate actively in the ongoing development of urban commercial amenities, including condominiums and residential real estates. Directors are of the opinion that this acquisition would complement the Group’s earlier land development projects and thus further enhancing its future value by achieving an economic scale.

Directors believe that land development of residential real estates adjoining Park Outlet is not only a viable proposition, but a potentially lucrative one. In addition, the acquisition will significantly broaden the asset and earning base of the Group. The acquisition of the Land will bring new business opportunities and thus benefit the Group in numerous ways. The presence of residences and commercial activities in the neighbourhood of Park Outlet will greatly contribute to the growth of foot traffic. They will shorten the breakeven and quicken the return on investment. Our ultimate goal is to nurture commercial activities and more traffic to the mall.

We will significantly reduce business risks by teaming up with Shenyang TongDing, the management team of which is reputable land developer and real estate management group in construction industry in Shenyang, PRC.

Directors also consider that the Premium of the Land and terms of the Confirmation Agreement are on normal commercial terms, and are fair and reasonable, and in the interests of the Company and Shareholders as a whole.

7. INFORMATION ON THE LAND BUREAU

Land Bureau is a local government body of PRC and is in charge of planning, managing, administering and monitoring land resources in Shenyang, Liaoning Province, PRC.

8. INFORMATION ON THE COMPANY

The Company is an investment holding company. The principal activities of the Company are footwear manufacturing and trading, property investment and investment holding in Hong Kong and PRC. The Company is a seasoned market player in brand development and retailing in Greater China, managing more than 300 points-of-sale all over PRC with its famous and heritage brands portfolio. The Company extends its business to outlet mall development and operation in PRC. Park Outlet of Shenyang is its milestone and is slated for completion in 2012. Boom Origin is a wholly-owned subsidiary of the Company, the principal business activity of which is investment holdings.

– 9 –

LETTER FROM THE BOARD

9. INFORMATION ON SHENYANG TONGDING

Shenyang TongDing is a PRC incorporated company. The management team of which is reputable land developer and real estate management group in construction industry in Shenyang, PRC. Before the Further Injection, Shenyang TongDing was interested in 38% shareholding in Shenyang Keenson and therefore is a Connected Person of the Group.

10. INFORMATION ON SHENYANG KEENSON

Shenyang Keenson, a PRC incorporated company, is a non wholly-owned subsidiary of the Company. At present, Shenyang Keenson is owned as to 62% and 38% by Boom Origin and Shenyang TongDing respectively. Upon completion of the Further Injection, the corresponding equity interest of Shenyang Keenson held by Boom Origin and Shenyang TongDing shall be 88% and 12%. The principal business of Shenyang Keenson is property development in Shenyang.

Below shows the net profits of Shenyang Keenson for the period from 21 March 2011 to 31 October 2011 and its net asset value as at 31 October 2011.

	Period from
	21 March 2011
	to
	31 October 2011
	RMB
Profit before income tax expense	5,469,304
Profit after income tax expense	4,075,638
	At
	31 October 2011
	RMB
Net Assets	60,202,665

11. LISTING RULES IMPLICATIONS

Based on the calculation reckoned on 100% of the Further Injection and 62% of the January Acquisition, when aggregated pursuant to Rule 14.22 of the Listing Rules, the transaction constitutes a major transaction of the Company under Rule 14.06(3) of the Listing Rules.

Under the Listing Rules, the transaction is subject to the approval of the Shareholders. Well Success, a Shareholder, holds 664,677,468 Shares, representing approximately 50.8% in the issued share capital of the Company. Since none of the Shareholders is required to abstain from voting in respect of the transaction and written approval of Well Success has been obtained for the purpose of approving the transaction, no physical Shareholders’ meeting will be convened as permitted under Rule 14.44 of the Listing Rules.

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LETTER FROM THE BOARD

11. LISTING RULES IMPLICATIONS (Continued)

The Further Injection by Shenyang TongDing constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. As the total assets, profits and revenue ratios of Shenyang Keenson represent less than 10% for each of the latest three financial years and the consideration ratio of Shenyang TongDing’s contribution to Shenyang Keenson is less than 10%, Shenyang Keenson will be considered as an insignificant subsidiary of the Company pursuant to Rule 14A.31(9)(b) and (c) of the Listing Rules and such connected transaction will be exempt from the reporting, announcement and independent shareholders’ approval requirements as set out in Chapter 14A of the Listing Rules.

The purpose of this circular is to provide you with, among other things, further details in respect of the Acquisition as required under the Listing Rules.

12. GENERAL

Directors consider that the terms of the December Acquisition, the Confirmation Agreement and the Further Injection are in the interests of the Company and its shareholders, and are fair and reasonable.

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

Yours faithfully, For and on behalf of Symphony Holdings Limited Chan Ting Chuen Chairman

– 11 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY

(a) Audited Financial Statements

Set out below is a summary of the audited consolidated financial statements of the Group for the three years ended 31 December 2010.

(i) Consolidated Statement of Comprehensive Income

Year ended 31 December

	2010	2009	2008
	HKD’000	HKD’000	HKD’000
Revenue	1,947,473	1,784,907	2,050,584
Cost of sales	(1,585,502)	(1,437,838)	(1,768,865)
Gross Profit	361,971	347,069	281,719
Other income	23,320	34,425	38,853
Distribution and selling expenses	(171,081)	(149,114)	(127,843)
Administrative expenses	(220,967)	(196,392)	(232,783)
Finance costs	(497)	–	–
Other expenses	(4,765)	(7,430)	(3,360)
Net increase (decrease) in fair
value of investment properties	159,224	57,750	(32,050)
Gain on disposal of available-for-
sale investments	20,491	2	–
Gain on disposal of subsidiaries	–	–	13,586
Impairment loss on goodwill	–	–	(57,477)
Gain (Loss) on fair value changes
of held-for-trading investments	64	716	(11,998)
Share of results of jointly
controlled entities	(41,394)	(58,498)	(101,409)
Profit (Loss) before tax	126,366	28,528	(232,762)
Taxation	(38,770)	(10,785)	1,554
Profit (Loss) for the year	87,596	17,743	(231,208)
Other comprehensive income
(expense)
Surplus arising on
re-classification from prepaid
lease payments to investment
properties	–	203	–
Deferred tax on surplus arising on
re-classification from prepaid
lease payments to investment
properties	–	(50)	–
Surplus arising on revaluation of
properties	25,754	45,024	36,687
Deferred tax liability arising on
revaluation of properties	(4,238)	(8,283)	(5,063)
Effect of changes in tax rates	–	–	253

– 12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY (Continued)

(a) Audited Financial Statements (Continued)

(i) Consolidated Statement of Comprehensive Income (Continued)

Year ended 31 December

	2010	2009	2008
	HKD’000	HKD’000	HKD’000
Fair value gain (loss) on
available-for-sale investments	1,755	6,412	(6,899)
Re-classification adjustment to
profit or loss upon disposal of
available-for-sale investments	(2,103)	(2)	–
Exchange differences arising on
translation of foreign operations	15,581	(2,968)	27,945
Share of other comprehensive
income (expenses) of jointly
controlled entities	3,021	5,320	(3,108)
Other comprehensive income for
the year (net of tax)	39,770	45,656	49,815
Total comprehensive income and
expense for the year	127,366	63,399	(181,393)
Profit (Loss) for the year
attributable to:
Owners of the Company	87,861	17,963	(228,025)
Non-controlling interests	(265)	(220)	(3,183)
	87,596	17,743	(231,208)
Total comprehensive income and
expense attributable to:
Owners of the Company	126,835	63,610	(178,854)
Non-controlling interests	531	(211)	(2,539)
	127,366	63,399	(181,393)
Earnings (Loss) per share
Basic and diluted
(HK cents)	5.04	1.03	(13.07)

– 13 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY (Continued)

(a) Audited Financial Statements (Continued)

(ii) Consolidated Statement of Financial Position

At 31 December

	2010	2009	2008
	HKD’000	HKD’000	HKD’000
Non-current assets
Property, plant and equipment	331,097	318,067	350,236
Investment properties	512,962	331,040	112,450
Prepaid lease payments	19,054	18,860	21,268
Interests in jointly controlled
entities	91,217	56,778	78,272
Advances to jointly controlled
entities	171,388	171,110	127,749
Available-for-sale investments	6,246	60,011	54,366
Deferred tax assets	12,266	13,127	10,085
Tax recoverable	23,214	17,214	9,714
Club debentures	2,003	2,003	2,003

	1,169,447	988,210	766,143

Current assets
Inventories	281,499	171,254	269,148
Amounts due from jointly
controlled entities	23,693	25,664	50,692
Trade and other receivables	345,947	217,808	459,061
Prepaid lease payments	518	499	516
Held-for-trading investments	–	321	4,055
Bank balances and cash	365,519	399,184	280,963

	1,017,176	814,730	1,064,435

Current liabilities
Trade and other payables	451,064	311,305	395,027
Amounts due to jointly
controlled entities	12,577	17,650	28,006
Secured bank loans	80,000	–	–
Tax payable	55,483	54,969	55,641
	599,124	383,924	478,674

Net current assets	418,052	430,806	585,761

Total assets less current liabilities	1,587,499	1,419,016	1,351,904
Non-current liabilities
Deferred tax liabilities	77,517	36,781	15,628

Net assets	1,509,982	1,382,235	1,336,276
Capital and reserves
Share Capital	436,011	436,011	436,011
Share premium and reserves	972,219	913,604	867,434

Equity attributable to owners of
the Company	1,408,230	1,349,615	1,303,445
Non-controlling interests	101,752	32,620	32,831
	1,509,982	1,382,235	1,336,276

– 14 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY (Continued)

(b) Unaudited Financial Statements

Set out below is a summary of the unaudited consolidated financial statements of the Group for the two interim periods ended 30 June 2011.

(i) Consolidated Statement of Comprehensive Income

Period ended 30 June

	2011	2010
	HKD’000	HKD’000
Revenue	1,134,020	812,425
Cost of sales	(949,521)	(656,842)
Gross Profit	184,499	155,583
Other income	75,613	42,279
Distribution and selling expenses	(90,073)	(83,316)
Administrative expenses	(96,330)	(87,968)
Other expenses	(5,964)	(1,755)
Share of results of jointly controlled entities	(29,819)	(19,909)
Finance costs	(1,024)	–
Profit before tax	36,902	4,914
Taxation	(19,779)	(1,501)
Profit for the period	17,123	3,413

Other comprehensive income (expense)
Exchange differences arising on translation of
foreign operations	13,939	6,671
Fair value gain of available-for-sale
investments	111	670
Re-classification adjustment to profit or loss
upon disposal of available-for-sale
investments	–	(1,597)
Reserve released upon deregistration of a
subsidiary	–	(2,254)
Deferred tax liability arising on revaluation of
properties	(2,079)	(3,417)
Share of other comprehensive (expense)
income of jointly controlled entities	1,399	(600)
Surplus arising on revaluation of properties	11,848	5,621
Exchange reserve released upon closure of a
jointly controlled entity	(3)	–
Other comprehensive income for the period
(net of tax)	25,215	5,094
Total comprehensive income for the period	42,338	8,507
Profit for the period attributable to:
Owners of the Company	4,476	3,346
Non-controlling interests	12,647	67
	17,123	3,413
Total comprehensive income attributable to:
Owners of the Company	29,286	8,366
Non-controlling interests	13,052	141
	42,338	8,507
Earnings per share
Basic and diluted (HK cents)	0.45	0.37

– 15 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY (Continued)

(b) Unaudited Financial Statements (Continued)

(ii) Consolidated Statement of Financial Position

At 30 June

	2011	2010
	HKD’000	HKD’000
Non-current assets
Property, plant and equipment	340,299	230,661
Investment properties	796,387	341,061
Prepaid lease payments	19,180	38,315
Interests in jointly controlled entities	38,176	73,082
Advances to jointly controlled entities	171,532	171,681
Available-for-sale investments	6,365	28,136
Deferred tax assets	12,003	13,495
Tax recoverable	23,214	23,214
Club debentures	2,003	2,003

	1,409,159	921,648

Current assets
Inventories	517,900	311,368
Amounts due from jointly controlled entities	21,581	20,489
Trade and other receivables	542,604	398,599
Prepaid lease payments	528	1,055
Bank balances and cash	268,745	180,051

	1,351,358	911,562

Current liabilities
Trade and other payables	531,667	372,824
Amounts due to jointly controlled entities	12,816	12,256
Dividend payable	26,161	22,673
Tax payable	56,497	40,099
Secured bank loans	193,910	60,000

	821,051	507,852

Net current assets	530,307	403,710

Total assets less current liabilities	1,939,466	1,325,358
Non-current liabilities
Deferred tax liabilities	96,867	29,809

Net assets	1,842,599	1,295,549
Capital and reserves
Share Capital	654,017	436,011
Share premium and reserves	990,545	852,932

Equity attributable to owners of the Company	1,644,562	1,288,943
Non-controlling interests	198,037	6,606
	1,842,599	1,295,549

– 16 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER 2010 AND 2009

The audited consolidated financial statements of the Group for the years ended 31 December 2010 and 2009, together with the notes to the consolidated financial statements have been set out in the Annual Reports 2010 and 2009 of the Company which were posted on the website of the Exchange (http://www.hkexnews.hk) on 27 April 2011 and 22 April 2010 respectively. Please also see below quick link to the Annual Reports 2010 and 2009:

Annual Report 2010: http://www.hkexnews.hk/listedco/listconews/sehk/2011/0427/ LTN20110427193.pdf

Annual Report 2009: http://www.hkexnews.hk/listedco/listconews/sehk/2010/0422/ LTN20100422198.pdf

– 17 –

ADDITIONAL FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

1. WORKING CAPITAL STATEMENT

In the absence of unforeseen circumstances and taking into account of the Land, the Further Injection and financial resources available to the Group, Directors are of the opinion that the Group will have sufficient working capital for its present requirements for the next twelve months from the date of this circular.

2. INDEBTEDNESS STATEMENT

At the close of business on 31 December 2011, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group had an aggregate outstanding borrowings of approximately HKD120,000,000 solely comprising secured bank borrowings. The Group had also executed continuing guarantee in favour of a bank in respect of facilities granted to a jointly controlled entity amounted at HKD80,000,000.

Save as aforesaid or as otherwise disclosed herein and apart from intra-group liabilities, at the close of business on 31 December 2011, the Group did not have any loan capital outstanding, issued or agreed to be issued, bank overdraft, loans, or other similar indebtedness, liabilities under acceptances or acceptances credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantees or other material liabilities.

3. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, save for the December Acquisition and the Further Injection as disclosed in the Letter of the Board in this circular, Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2010, being the date to which the latest published audited consolidated financial statements of the Group were made up.

4. FINANCIAL AND TRADING PROSPECT OF THE GROUP

During the first half of 2011, the Company recorded a stable performance despite a challenging world economy. Following the consolidation of production facilities and persistent upturn of domestic consumption in the PRC, revenue of the Group increased by 39.6% to HKD1,134 million for the six months ended 30 June 2011. Profit attributable to owners of the Company remained solid at HKD4.5 million.

– 18 –

ADDITIONAL FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

4. FINANCIAL AND TRADING PROSPECT OF THE GROUP (Continued)

The booming domestic consumption demand and the rapid growth in the PRC, together with a series of effective macroeconomic regulations and controls adopted by the Chinese government benefit the business of the Group and bring exciting opportunities to retailing and property investments in the PRC. The consolidation of factory plants has proven to be effectual to stabilise the operating cost. We have been and will remain competitive by working closely with our key customers and implementing tight cost control. Despite the promising economy in China, the global business environment continues to be challenging due to prevailing political and economic uncertainties. The Board remains cautiously optimistic about the prospects in the following year. It expects the business of the Group to grow moderately.

– 19 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

The following is the text of report prepared for the purpose of inclusion in this circular, received from the independent reporting accountants, BDO Limited, Certified Public Accountants, Hong Kong.

==> picture [75 x 61] intentionally omitted <==

==> picture [96 x 54] intentionally omitted <==

3 February 2012

The Board of Directors Symphony Holdings Limited 10/F., Island Place Tower 510 King’s Road North Point Hong Kong

Dear Sirs,

We set out below our report on the financial information of 瀋陽建新聯合置業有限公司 (Shenyang Keenson Alliance Properties Limited) (“ Shenyang Keenson ”), which comprises the statement of financial position as at 31 October 2011, and the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the period from 21 March 2011 (date of establishment) to 31 October 2011 (the “ Relevant Period ”), and a summary of significant accounting policies and other explanatory notes (the “ Financial Information ”), for inclusion in the circular issued by Symphony Holdings Limited (the “ Company ”) dated 3 February 2012 (the “ Circular ”) in connection with its proposed further injection of USD31,800,000 to Shenyang Keenson, a non wholly-owned subsidiary of the Company, to fund the acquisition of the land use rights of a parcel of land situated at North Puhe Road, Shenbei New District, Shenyang, Liaoning Province, the People’s Republic of China (the “ PRC ”) by Shenyang Keenson for a consideration of RMB177,943,800.

Shenyang Keenson was established in the PRC with limited liability under the Common Law of the PRC. Its registered office is located at 76-2 Shenbei Road, Shenbei New District, Shenyang City, Liaoning Province, the PRC. Shenyang Keenson is principally engaged in properties development.

No statutory audited financial statements of Shenyang Keenson have been prepared as its first statutory financial statements are not yet due to be issued. For the purpose of this report, the directors of Shenyang Keenson have prepared the financial statements of Shenyang Keenson in accordance with Hong Kong Financial Reporting Standards (“ HKFRSs ”) issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”) for the Relevant Period (the “ Underlying Financial

– 20 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Statements ”), including Hong Kong Accounting Standards (“ HKASs ”) and Interpretation, the applicable disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of the Hong Kong Limited (“ Listing Rules ”). The Financial Information has been prepared based on the Underlying Financial Statements. We have, for the purpose of this report, carried out audit procedures in respect of the Underlying Financial Statements in accordance with Hong Kong Standards on Auditing issued by the HKICPA.

DIRECTORS’ RESPONSIBILITY

The directors of Shenyang Keenson are responsible for the preparation of the Financial Information that gives a true and fair view in accordance with HKFRSs and the applicable disclosure requirement of the Listing Rules and the Hong Kong Companies Ordinance, and for such internal control as the directors of Shenyang Keenson determine is necessary to enable the presentation of the Financial Information that is free from material misstatement, whether due to fraud or error. The directors of Symphony Holdings Limited are responsible for the contents of the Circular in which this report is included.

REPORTING ACCOUNTANTS’ RESPONSIBILITY

For the purpose of this report, we have carried out audit procedures in respect of the Underlying Financial Statements in accordance with Hong Kong Standards on Auditing issued by the HKICPA and have examined the Financial Information and carried out such additional procedures as we considered necessary in accordance with Auditing Guideline 3.340 ‘Prospectuses and the Reporting Accountant’ issued by the HKICPA.

We have not audited any financial statements of Shenyang Keenson in respect of any period subsequent to 31 October 2011.

OPINION

In our opinion, the Financial Information, for the purpose of this report, prepared on the basis set out in note 2 and in accordance with the accounting policies in note 3, gives a true and fair view of the state of affairs of Shenyang Keenson as at 31 October 2011 and of its results and cash flows for the Relevant Period.

– 21 –

APPENDIX III ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

FINANCIAL INFORMATION ON SHENYANG KEENSON

The Financial Information of Shenyang Keenson has been prepared on the basis set out in Note 2.

Statement of Comprehensive Income

		Period from
		21 March 2011
		(date of
		establishment)
		to 31 October
		2011
	Notes	RMB
Turnover	6	–
Other revenue and gains	7	5,575,044
Administrative expenses		(105,740)
Profit before income tax expense	8	5,469,304
Income tax expense	9	(1,393,666)
Profit and total comprehensive income for the period		4,075,638

– 22 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

FINANCIAL INFORMATION ON SHENYANG KEENSON (Continued)

Statement of Financial Position

		31 October 2011
	Notes	RMB
Non-current assets
Investment property	14	71,302,000
Current assets
Cash and cash equivalents		129,200
Current liabilities
Amounts due to fellow subsidiaries	15	9,834,869
Net current liabilities		(9,705,669)
Total assets less current liabilities		61,596,331
Non-current liabilities
Deferred tax liabilities	16	1,393,666

Net assets		60,202,665
Capital and reserves
Paid-up capital	17	56,127,027
Retained profits		4,075,638

Total equity		60,202,665

Statement of Changes in Equity

	Paid-up	Retained
	capital	profits	Total
	RMB	RMB	RMB
	(Note 17)
Capital contribution	56,127,027	–	56,127,027
Profit and total comprehensive income for the period	–	4,075,638	4,075,638

At 31 October 2011	56,127,027	4,075,638	60,202,665

– 23 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

FINANCIAL INFORMATION ON SHENYANG KEENSON (Continued)

Statement of Cash Flows

		Period from
		21 March 2011
		(date of
		establishment)
		to 31 October
		2011
	Note	RMB
Cash flows from operating activities
Profit before income tax expense		5,469,304
Adjustments for:
Fair value gain on investment property		(5,574,665)
Interest income		(379)
Operating loss before working capital changes		(105,740)
Increase in amount due to a fellow subsidiary		83,922
Net cash used in operating activities		(21,818)
Cash flows from investing activities
Interest received		379
Purchase of investment property		(65,727,335)
Net cash used in investing activities		(65,726,956)
Cash flows from financing activities
Capital contribution	17	56,127,027
Advance from a fellow subsidiary		9,750,947
Net cash generated from financing activities		65,877,974
Net increase in cash and cash equivalents
and cash and cash equivalents at end of period		129,200
Analysis of the balances of cash and cash equivalents
Cash at bank and in hand		129,200

– 24 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements

1. GENERAL

Shenyang Keenson is a limited liability company incorporated in the PRC. Its registered office is located at 76-2 Shenbei Road, Shenbei New District, Shenyang City, Liaoning Province, the PRC.

The directors of Shenyang Keenson consider its ultimate parent to be Symphony Holdings Limited which was incorporated in Bermuda with limited liability and shares of which are listed on The Stock Exchange of Hong Kong Limited (“ Exchange ”).

Shenyang Keenson engages in properties development.

2. BASIS OF PREPARATION

(a) Statement of compliance

The Financial Information has been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“ HKFRSs ”), Hong Kong Accounting Standards (“ HKASs ”) and Interpretations (hereinafter collectively referred to as the “ HKFRSs ”) issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”) and the disclosure requirements of the Hong Kong Companies Ordinance. In addition, the Financial Information includes applicable disclosures required by the Rules Governing the Listing of Securities on the Exchange (the “ Listing Rules ”).

(b) Adoption of Hong Kong Financial Reporting Standards (“HKFRSs”)

For the purpose of preparing and presenting the Financial Information for the Relevant Period, Shenyang Keenson has adopted the new and revised HKFRSs issued by the HKICPA that are relevant to its operations and effective for the annual period beginning on or after 21 March 2011 throughout the Relevant Period.

At the date of this report, the following new or revised HKFRSs that are potentially relevant to Shenyang Keenson have been issued but are not effective for the Relevant Period have not been early adopted.

Amendments to HKFRS 7	Disclosures – Transfers of Financial Assets1
Amendments to HKFRS 7	Disclosures – Offsetting Financial Assets and
	Financial Liabilities4
Amendments to HKAS 12	Deferred Tax – Recovery of Underlying Assets2
Amendments to HKAS 32	Presentation – Offsetting Financial Assets and
	Financial Liabilities5
Amendments to HKAS 1 (Revised)	Presentation of Items of Other Comprehensive
	Income3
HKFRS 13	Fair Value Measurement4
HKFRS 9	Financial Instruments6

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

Shenyang Keenson is in the process of making an assessment of the potential impact of new and revised HKFRSs and the directors so far concluded that the application of the new and revised HKFRSs will have no material impact on the results and the financial position of Shenyang Keenson.

– 25 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

2. BASIS OF PREPARATION (Continued)

(c) Basis of measurement and preparation

The Financial Information has been prepared under the historical cost basis except for the investment property which is measured at fair value.

(d) Functional and presentation currency

The Financial Information is presented in Renminbi, which is the same as the functional currency of Shenyang Keenson.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Investment properties

Investment properties are properties held either to earn rentals or for capital appreciation or for both, but not held for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are measured at cost on initial recognition and subsequently at fair value with any change therein recognised in profit or loss.

(b) Financial instruments

(i) Financial assets

Shenyang Keenson classifies its financial assets at initial recognition, depending on the purpose for which the asset was acquired. Financial assets at fair value through profit or loss are initially measured at fair value and all other financial assets are initially measured at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets. Regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade debtors), and also incorporate other types of contractual monetary asset. Subsequent to initial recognition, they are carried at amortised cost using the effective interest method, less any identified impairment losses.

– 26 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Financial instruments (Continued)

(ii) Impairment loss on financial assets

Shenyang Keenson assesses, at the end of the Relevant Period, whether there is any objective evidence that financial asset is impaired. Financial asset is impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.

Evidence of impairment may include:

significant financial difficulty of the debtor;
a breach of contract, such as a default or delinquency in interest or principal payments;
granting concession to a debtor because of debtors’ financial difficulty; or
it becoming probable that the debtor will enter bankruptcy or other financial reorganisation.

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. The carrying amount of financial asset is reduced through the use of an allowance account. When any part of financial asset is determined as uncollectible, it is written off against the allowance account for the relevant financial asset.

(iii) Financial liabilities

Shenyang Keenson classifies its financial liabilities, depending on the purpose for which the liabilities were incurred. Financial liabilities at fair value through profit or loss are initially measured at fair value and financial liabilities at amortised costs are initially measured at fair value, net of directly attributable costs incurred.

All Shenyang Keenson’s financial liabilities are classified as financial liabilities at amortised cost including amounts due to fellow subsidiaries are subsequently measured at amortised cost, using the effective interest method. The related interest expense is recognised in profit or loss.

Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.

(iv) Effective interest method

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

(v) Equity instruments

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

– 27 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Financial instruments (Continued)

(vi) Derecognition

Shenyang Keenson derecognises a financial asset when the contractual rights to the future cash flows in relation to the financial asset expire or when the financial asset has been transferred and the transfer meets the criteria for derecognition in accordance with HKAS 39.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires.

(c) Revenue recognition

Interest income is accrued on a time basis on the principal outstanding at the applicable interest

rate.

(d) Income taxes

Income taxes for the Relevant Period comprise current tax and deferred tax.

Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purposes and is calculated using tax rates that have been enacted or substantively enacted at the end of the Relevant Period.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for tax purposes. Except for goodwill and recognised assets and liabilities that affect neither accounting nor taxable profits, deferred tax liabilities are recognised for all temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is measured at the tax rates expected to apply in the period when the liability is settled or the asset is realised based on tax rates that have been enacted or substantively enacted at the end of the Relevant Period.

Income taxes are recognised in profit or loss except when they relate to items recognised in other comprehensive income in which case the taxes are also recognised in other comprehensive income.

(e) Foreign currency

Transactions entered into by Shenyang Keenson in currencies other than the currency of the primary economic environment in which it operates (the “ functional currency ”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the end of the Relevant Period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in profit or loss in the period in which they arise.

– 28 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(f) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when Shenyang Keenson has a legal or constructive obligation arising as a result of a past event, which will probably result in an outflow of economic benefits that can be reasonably estimated.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, the existence of which will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The following are the key assumption concerning the future, and other key sources of estimation uncertainty at the end of the Relevant Period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Fair Value of Investment Property

At 31 October 2011, Shenyang Keenson’s investment property is stated at fair value based on the valuation carried out by an independent firm of Chartered Surveyors. In determining the fair value, the valuers have adopted on the market value approach which takes into account certain estimates, such as comparable market transactions. The management has reviewed the valuation and is satisfied that the valuation of Shenyang’s investment property is reasonable.

5. SEGMENT REPORTING

Shenyang Keenson primarily operates in one business segment – property development, located in the PRC. Substantially all of the Shenyang Keenson’s assets are located in the PRC. Accordingly, no analysis of the segment information is presented.

6. TURNOVER

Shenyang Keenson has not started the development of the investment property and did not generate any turnover during the Relevant Period.

7. OTHER REVENUE AND GAINS

	Period from
	21 March 2011
	(date of
	establishment)
	to 31 October
	2011
	RMB
Bank interest income	379
Fair value gain on investment property	5,574,665
	5,575,044

– 29 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

8. PROFIT BEFORE INCOME TAX EXPENSE

Profit before income tax expense is arrived at after charging/(crediting):

	Period from
	21 March 2011
	(date of
	establishment)
	to 31 October
	2011
	RMB
Auditors’ remuneration	–
Exchange loss	21,697

9. INCOME TAX EXPENSE

The amount of income tax expense in the statement of comprehensive income represents:

				Period from
				21 March 2011
				(date of
				establishment)
				to 31 October
				2011
				RMB
Deferred	tax	_(note _	16)	1,393,666

Shenyang Keenson was established in the PRC and is subject to Enterprise Income Tax (“ EIT ”) at the rate of 25% for the Relevant Period. However, no provision for EIT has been made as it has no estimated assessable profit for the Relevant Period.

The income tax expense for the period can be reconciled to the profit before income tax expense per the statement of comprehensive income as follows:

	Period from
	21 March 2011
	(date of
	establishment)
	to 31 October
	2011
	RMB
Profit before income tax expense	5,469,304
Tax calculated at the domestic tax rate of 25%	1,367,326
Others	26,340

Income tax expense	1,393,666

– 30 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

10. DIRECTORS’ REMUNERATION

No directors’ remuneration was payable during the Relevant Period.

No emoluments or discretionary bonus were payable to the directors as an inducement to join or upon joining Shenyang Keenson or as compensation for loss of office during the Relevant Period. No director of Shenyang Keenson had waived or agreed to waive any emoluments or discretionary bonus during the Relevant Period.

11. INDIVIDUALS WITH HIGHEST EMOLUMENTS

Shenyang Keenson has no employees during the Relevant Period. Accordingly, no emoluments of individuals were payable for the Relevant Period.

No emoluments or discretionary bonus were paid to any individual as an inducement to join or upon joining Shenyang Keenson or as compensation for loss of office during the Relevant Period. No individual had waived or agreed to waive any emoluments or discretionary bonus in Shenyang Keenson during the Relevant Period.

12. EARNINGS PER SHARE

Information in relation to earnings per share is not presented as its inclusion, for the purpose of this report, is not considered meaningful.

13. DIVIDENDS

No dividend was declared or paid by Shenyang Keenson during the Relevant Period.

14. INVESTMENT PROPERTY

	31 October 2011
	RMB
Fair value
Additions	65,727,335
Change in fair value	5,574,665
At end of the period	71,302,000

The investment property represents the land use rights of a parcel of land located at North Puhe Road, Shenbei New District, Shenyang, Liaoning Province, the PRC. Shenyang Keenson intends to develop the land into commercial and residential properties. The land use rights are held under a medium term lease. As at 31 October 2011, Shenyang Keenson has not obtained the land use rights certificate pending completion of the transfer of the land use rights to it from Shenyang Plan and Land Resources Bureau (瀋陽市規劃和國土資源局) (the “ Land Bureau ”). In the opinion of the directors, there is no impairment in the fair value of the property as Shenyang Keenson has paid the full purchase consideration for the land to the Land Bureau and the probability of Shenyang Keenson not obtaining the land use rights certificate is remote.

The investment property was fair valued on 31 October 2011 by Prudential Surveyors (Hong Kong) Limited, an independent firm Chartered Surveyors. The valuation was arrived at with reference to market comparable sales evidence available in the market.

– 31 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

15. AMOUNTS DUE TO FELLOW SUBSIDIARIES

The amounts are unsecured, interest free and repayable on demand.

16. DEFERRED TAX LIABILITIES

Details of the deferred tax liabilities recognised and movements during the Relevant Period are as follows:

			31 October 2011
			RMB
	Property revaluation
	Charged to profit or loss		1,393,666
	At end of the period		1,393,666
17.	CAPITAL
			31 October 2011
			USD
	Registered capital		10,700,000
		31 October 2011	31 October 2011
		USD	RMB
	Paid-up capital:
	Capital contribution paid-up	8,592,110	56,127,027

	At the end of the period	8,592,110	56,127,027

Shenyang Keenson was established on 21 March 2011 with a registered capital of USD10,700,000.

In November 2011, the paid up capital was increased to USD8,902,110 through payment of further contribution of USD310,000 by the Group.

18. CAPITAL RISK MANAGEMENT

Shenyang Keenson’s objective of managing capital is to safeguard Shenyang Keenson’s ability to continue as a going concern in order to provide returns to equity holders and benefits for other stakeholders and to maintain an optimal capital structure to reduce cost of capital. For this purpose and as disclosed in note 19(b), the ultimate parent has confirmed its intention to provide sufficient financial support to Shenyang Keenson.

The capital structure of Shenyang Keenson consists of equity attributable to equity holders of Shenyang Keenson only, comprising paid-up capital and retained earnings. In order to maintain or adjust the capital structure, Shenyang Keenson may adjust the amount of dividends paid to equity holders, return capital to equity holders, raise additional registered capital or sell assets to reduce debts.

– 32 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

19. FINANCIAL RISK MANAGEMENT

The main risks arising from Shenyang Keenson’s financial instruments in the normal course of business are credit risk, liquidity risk, interest rate risk and currency risk.

These risks are limited by Shenyang Keenson’s financial management policies and practices described below.

(a) Credit risk

Shenyang Keenson has no significant credit risk as its financial assets only include cash and cash equivalents.

(b) Liquidity risk

Shenyang Keenson’s policy is to regularly monitor current and expected liquidity requirements to ensure that it maintains sufficient cash to meet its liquidity requirements in the short and longer term. All the financial liabilities of Shenyang Keenson at the end of the Relevant Period are repayable on demand.

At the end of the Relevant Period, Shenyang Keenson’s current liabilities exceeded its current assets by RMB9,705,669. The ultimate parent has confirmed its intention to provide sufficient financial support to Shenyang Keenson so as to enable Shenyang Keenson to meet its liabilities as and when they fall due and to enable Shenyang Keenson to continue to operate in the foreseeable future. Management considers that Shenyang Keenson continues as a going concern and does not have significant liquidity risk.

(c) Interest rate risk

As Shenyang Keenson has no interest-bearing assets and liabilities and its operating cash flows are substantially independent of changes in market interest rate.

(d) Currency risk

Currency risk to Shenyang Keenson is minimal as most of its transactions are carried out in Renminbi.

(e) Fair value estimation

All financial instruments are carried at amounts not materially different from their fair values as at 31 October 2011.

20. SUMMARY OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES BY CATEGORY

The carrying amounts of Shenyang Keenson’s financial assets and financial liabilities recognised at 31 October 2011 may be categorised as follows:

	31 October 2011
	RMB
Financial assets
Loans and receivables (including cash and cash equivalents)	129,200
Financial liabilities
Financial liabilities measured at amortised cost	9,834,869

– 33 –

ACCOUNTANTS’ REPORT ON SHENYANG KEENSON

APPENDIX III

Notes to the Financial Statements (Continued)

21. EVENTS SUBSEQUENT TO THE RELEVANT PERIOD

On 8 December 2011, Shenyang Keenson entered into a confirmation agreement with Shenyang Plan and Land Resources Bureau confirming its successful bid for the land use rights of a parcel of land located at North Puhe Road, Shenbei New District, Shenyang, Liaoning Province, the PRC at a premium of RMB177,943,800 (the “ Acquisition ”). The Acquisition is expected to complete within three months and conditional upon, inter alia, Shenyang Keenson entering into contracts for the transfer the land use rights of this land with Shenyang Plan and Land Resources Bureau. Details of the Acquisition are set out in the announcement of Symphony Holdings Limited dated 8 December 2011 and the Circular.

SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by Shenyang Keenson in respect of any period subsequent to 31 October 2011 and up to the date of this report. No dividend or other distributions have been declared, made or paid by Shenyang Keenson in respect of any period subsequent to 31 October 2011.

Yours faithfully

BDO Limited

Certified Public Accountants Hong Kong Shiu Hong Ng

Practising Certificate Number P03752

– 34 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX IV

The unaudited pro forma consolidated statement of financial position of the Group (“ Unaudited Pro Forma Financial Information ”) prepared in accordance with Rule 4.29 of the Listing Rules is set out below to illustrate the effect of the proposed further injection of USD31,800,000 (“ Further Injection ”) to Shenyang Keenson Alliance Properties Limited (“ Shenyang Keenson ”), a non wholly-owned subsidiary, to fund the acquisition of the land use rights of a parcel of land situated at North Puhe Road, Shenbei New District, Shenyang, Liaoning Province, PRC at a consideration of RMB177,943,800 by Shenyang Keenson (“ Acquisition ”) on the unaudited consolidated statement of financial position of the Group as if the Acquisition and the Further Injection had been completed on 30 June 2011. The Further Injection shall be contributed by Boom Origin Limited, a wholly-owned subsidiary of the Group, and the non-controlling interest in the amounts of USD30,766,000 and USD1,034,000 respectively.

The Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only, and because of its nature, it may not give a true picture of the financial position of the Group as at 30 June 2011 or at any future date following the Acquisition and the Further Injection. The Unaudited Pro Forma Financial Information is prepared based on the unaudited consolidated statement of financial position of the Group at 30 June 2011, as extracted from the published interim report of the Group as set out in Appendix I to this circular and the adjustments described below.

Non-current assets Property, plant and equipment Investment properties Prepaid lease payments Interests in jointly controlled entities Advances to jointly controlled entities Available-for-sale investments Deferred tax assets Tax recoverable Club debentures Current assets Inventories Amounts due from jointly controlled entities Trade and other receivables Prepaid lease payments Bank balances and cash	Unaudited consolidated statement of financial position of the Group as at 30 June 2011 (Note 1) Pro forma adjustment (Note 2) Pro forma adjustment (Note 3) HKD’000 HKD’000 HKD’000 340,299 796,387 218,924 19,180 38,176 171,532 6,365 12,003 23,214 2,003 1,409,159 517,900 21,581 542,604 528 268,745 (218,924) 8,041 1,351,358	Unaudited pro forma consolidated statement of financial position of the Group as at 30 June 2011 HKD’000 340,299 1,015,311 19,180 38,176 171,532 6,365 12,003 23,214 2,003 1,628,083 517,900 21,581 542,604 528 57,862 1,140,475

– 35 –

APPENDIX IV

UNAUDITED PRO FORMA FINANCIAL INFORMATION

		Unaudited			Unaudited
	consolidated				pro forma
		statement			consolidated
		of financial			statement
		position of			of financial
		the Group			position of
		as at	Pro forma	Pro forma	the Group
	30 June 2011		adjustment	adjustment	as at
		(Note 1)	(Note 2)	(Note 3)	30 June 2011
		HKD’000	HKD’000	HKD’000	HKD’000
Current liabilities
Trade and other payables		531,667			531,667
Amounts due to jointly controlled entities		12,816			12,816
Dividend payable		26,161			26,161
Tax payable		56,497			56,497
Secured bank loans		193,910			193,910

		821,051			821,051

Net current assets		530,307			319,424

Total assets less current liabilities		1,939,466			1,947,507
Non-current liabilities
Deferred tax liabilities		96,867			96,867

NET ASSETS		1,842,599			1,850,640
Capital and reserves
Share capital		654,017			654,017
Share premium and reserves		990,545			990,545

Equity attributable to owners of the Company		1,644,562			1,644,562
Non-controlling interests		198,037		8,041	206,078
		1,842,599			1,850,640

Notes:

The balances are extracted from the unaudited consolidated statement of financial position of the Group as at 30 June 2011 as set out in the published interim report of the Company for the six months ended 30 June 2011.
On 8 December 2011, Shenyang Keenson entered into a confirmation agreement with Shenyang Plan and Land Resources Bureau (瀋陽市規劃和國土資源局) confirming the successful bid of Shenyang Keenson for the Land at an aggregate premium of RMB177,943,800 which shall be wholly satisfied by cash. The adjustment reflects the position as if the Land was acquired on 30 June 2011, with the consideration being settled and the land use rights being effectively obtained on that date.
The adjustment represents cash injection of USD1,034,000 by the non-controlling interest as if the Further Injection was completed on 30 June 2011. Upon completion of the Further Injection, the equity interest of the Group in Shenyang Keenson shall be increased from 62% to 88%. As agreed with the non controlling interest, whilst its share of reserves in Shenyang Keenson shall accordingly be reduced from 38% to 12% starting from the date of completion of the Further Injection, it shall continue to share the reserves prior to the completion of the Further Injection at the original ratio of 38%. As such, the Further Injection would not give rise to any difference between the amount contributed by the Group and adjustments to non-controlling interests.
In the opinion of the directors of the Company, the transaction costs for the acquisition of the Land and the Further Injection are minimal and are ignored in the preparation of the unaudited pro forma financial information.
Amounts denominated in Renminbi and United States dollars are translated into Hong Kong dollars at the exchange rate ruling at 30 June 2011.

– 36 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX IV

The following is the text of an accountants’ report received from BDO Limited, Certified Public Accountants, Hong Kong, for inclusion in this circular, in respect of the unaudited pro forma financial information of the Group as set out in this Appendix IV.

==> picture [75 x 61] intentionally omitted <==

==> picture [96 x 54] intentionally omitted <==

3 February 2012

The Board of Directors Symphony Holdings Limited 10/F., Island Place Tower 510 King’s Road North Point Hong Kong

Dear Sirs,

We report on the unaudited pro forma financial information of Symphony 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, for inclusion in Appendix IV to the circular issued by the Company dated 3 February 2012 (the “ Circular ”) to provide information about how the further injection of USD31,800,000 to be contributed by Boom Origin Limited, a wholly-owned subsidiary of the Company, and the non-controlling interest in the amounts of USD30,766,000 and USD1,034,000 respectively, to Shenyang Keenson Alliance Properties Limited (“ Shenyang Keenson ”) following the successful bid of Shenyang Keenson for the land in Shenyang at a consideration of RMB177,943,800 on 8 December 2011 might have affected the financial information presented. The basis of preparation of the unaudited pro forma financial information is set out in the Appendix IV to the Circular.

Respective responsibilities of directors of the Company and Reporting Accountants

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

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.

– 37 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX IV

Basis of opinion

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

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

Our work did not constitute an audit or review made in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements issued by the HKICPA, and accordingly, we did not express any such assurance on the unaudited pro forma financial information.

The unaudited pro forma financial information is for illustrative purpose only, based on the judgements 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 June 2011 or any future date.

– 38 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX IV

Opinion

In our opinion:

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

Yours faithfully

BDO Limited

Certified Public Accountants Hong Kong Shiu Hong Ng Practising Certificate Number P03752

– 39 –

VALUATION REPORT

APPENDIX V

Set out below is the letter and the valuation report received from Prudential Surveyors (Hong Kong) Ltd, an independent property valuer, prepared for the purpose for incorporation in this circular in connection with their valuation of the property interest as at 8 December 2011.

8 December 2011

The Board of Directors Symphony Holdings Limited (the “ Group ”) 10th Floor, Island Place Tower 510 King’s Road North Point Hong Kong

Dear Sirs,

VALUATION OF A PIECE OF LAND AS NO.124 SHENBEI OR LOT NO. SHENBEI 2011-028 NORTH OF PUHEDA ROAD, DAOYI DEVELOPMENT ZONE, SHENBEI NEW DISTRICT, SHENYANG, LIAONING PROVINCE, THE PEOPLE’S REPUBLIC OF CHINA (THE “PROPERTY”)

In accordance with your instructions for us to value the above Property in the People’s Republic of China (the “ PRC ”). We confirm that we have made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of it as at 8 December 2011 (the “ Date of Valuation ”).

Our valuation of the Property is our opinion of Market Value which is defined mean “the estimated amount for which the Property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

Unless otherwise stated, our valuation is prepared in accordance with the “First Edition 2005 of The HKIS Valuation Standards on Properties” published by the Hong Kong Institute of Surveyors (“ HKIS ”). We have also complied with all requirements contained in Paragraph 34(2), (3) or Schedule 3 of the Companies Ordinance (Cap.32) and Chapter 5, Practice Note 12 and Practice Note 16 of the Rule Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”).

If the Property has commercial value, it is valued by the comparison method on the assumption that it can be sold with the benefit of vacant possession. Comparison is based on prices realised on actual transactions of comparable properties. Comparable properties with similar sizes, characters and locations are analysed, and carefully weighted against all respective advantages and disadvantages against the Property in order to arrive at a fair comparison of value.

– 40 –

VALUATION REPORT

APPENDIX V

Our valuation has been made on the assumption that the owner sells the Property on the open market without the benefit of a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which would serve to affect the value of the Property.

The Property is in the process of acquisition by the Group from the PRC government for future development. Since the Group has not yet obtained the State-owned Land Use Rights Certificates and/or the payment of the land premium has not yet been fully settled as at the date of valuation, we have ascribed no commercial value for the Property.

In the course of our valuation for the property interests, we have relied on the legal opinion of the PRC legal advisor, Dacheng Law Offices (the “ PRC Legal Opinion ”). We have been provided with a Memorandum of Land Sale, Development Parameters related to the Property and a boundary plan, a location plan and some photographs of the Property. We have not searched the original documents to verify the existence of any amendment which does not appear on the copies handed to us. All documents have been used for reference only.

Under the current planning approval systems in the PRC, valuers are not able to undertake any planning approval verification freely and swiftly. We have relied, to a considerable extent, on information given by you, in particular, but not limited to, the sales records, planning approvals, statutory notices, easements, tenancies and floor areas. No on-site measurement has been taken. Dimensions, measurements and areas included in the valuation certificate are only approximations.

We have taken every reasonable care both during inspecting the information provided to us and in making relevant enquiries. We have no reason to doubt the truth and accuracy to the information provided to us by you, which is material to the valuation. We were also advised by you that no material facts have been omitted from the information provided to us.

We have not carried out investigations on the site to determine the suitability of the ground conditions and the services etc. for any future development. Our valuation does not make any allowance for contamination of pollution of the land, if any, which may occurred as a result of past usage.

No allowance has been made in our valuation neither for any charges, mortgages or amounts owning on the Property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and outgoings of any onerous nature which could affect their values.

– 41 –

VALUATION REPORT

APPENDIX V

Unless otherwise stated, all monetary amounts are stated in Renminbi or ¥. We enclose herewith our valuation certificate for your kind reference.

Yours faithfully, For and on behalf of PRUDENTIAL SURVEYORS (HONG KONG) LTD. Albert C H Pang

BSc (Hons) MRICS MHKIS RPS (GP)

Assistant General Manager

Note: Mr. Pang is a Member of the Royal Institution of Chartered Surveyors and a Member of the Hong Kong Institute of Surveyors. He has over 15 years’ valuation experience in Hong Kong and the PRC.

– 42 –

VALUATION REPORT

APPENDIX V

VALUATION CERTIFICATE OF A PIECE OF LAND TO BE ACQUIRED BY THE NON WHOLLY-OWNED SUBSIDIARY OF SYMPHONY HOLDINGS LIMITED

Market value in Particulars existing state as Property Description and tenure of occupancy 8 December 2011 A vacant site at North of The site named as No. 124 The property is vacant. No commercial value Puheda Road, Shenbei is vacant and free of Daoyi Development Zone, structures. Shenbei New District, Shenyang, The site area is approximately Liaoning Province, 94,450 square metres (1,016,660 The People’s Republic of square feet). China. The Property is now belong to the PRC government but subject to a sale to Shenyang Keenson Alliance Properties. The lease term for commercial use to be erected on the site is 40 years and for residential use is 70 years.

Notes:

(1) As advised, Shenyang Keenson Alliance Properties Limited (the “ Company ”) had entered into a Confirmation Agreement with Shenbei District Office of Shenyang Plan and Land Resources Bureau confirming the Company is the successful bidder of the auction of the Property held on 8 December 2011. Shenyang Keenson Alliance Properties Limited, a non wholly-owned subsidiary of the Group, would sign the contract to buy the land parcel with a total site area of 94,450 sq.m. and the maximum proposed gross floor area of approximately 188,900 sq.m. for a total consideration of RMB177,943,800.
(2) Development conditions of the Site

a.	Zoning	Commercial/Residential
b.	Site area	94,450 sq.m.
c.	Development	(i) Plot ratio should be equal to or not to exceed 2.0
	conditions	(ii) Green/landscaping area should be equal to or greater than 30% of site area
		(iii) Ratio of commercial use should not be more than 5%
d.	Term of lease	40 years for commercial
		70 years for residential
e.	Sale price	¥177,943,800

(3) As advised by the Group, the Company is yet to sign the state-owned Land Use Rights Grant Contract and has not yet obtained the State-owned Land Use Rights Certificate of the Property. We have, therefore, ascribed “no commercial value” to the Property. The development conditions are subject to these documents. Had the Group obtained all the State-owned Land Use Rights Certificate of the Property at the Date of Valuation, the market value of the property as at the Date of Valuation would be in the sum of RMB177,943,800.
(4) We have been provided with a legal opinion on the property prepared by the Group’s PRC legal advisors, which contains, inter alia, the following information:

Under the condition that, the Group has paid the land premium in respect of the site in full and signed the State-owned Land Use Rights Grant Contract with the relevant authorities, the Group has no substantial legal obstacles on obtaining the land use rights of the property.

(5) The positions of major land, planning and development certificates/approvals are shown as follows:

i.	State-owned Land Use Rights Grant Contract	Expected to be entered within three months from the
		date of the Confirmation Agreement
ii.	State-owned Land Use Rights Certificate	Subject to application
iii.	Construction Land Use Planning Permit	Subject to application
iv.	Construction Works Planning Permit	Subject to application
v.	Construction Works Commencement Permit	Subject to application
vi.	Pre-sale Permit	Subject to application
vii.	Construction Works Completion Certification	Subject to application
	Report

– 43 –

GENERAL INFORMATION

APPENDIX VI

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. 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 document misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors and Chief Executives

As at the Latest Practicable Date, the interests and short positions of Directors and chief executives of the Company in the Shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“ SFO ”)), (a) which were required to be notified to the Company and the Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which the Directors or the chief executives were taken or deemed to have under such provisions of SFO); or (b) which were required, pursuant to section 352 of SFO, to be entered in the register referred to therein; or (c) which were required to be notified to the Company and the Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules were as follows:

Long Positions

Ordinary shares of HKD0.10 each of the Company:

					% in the
					issued
		Number of ordinary		Total	share
		shares held by		number of	capital of
		beneficial	controlled	ordinary	the
Director	Notes	owner	corporation	shares	Company
Chan Ting Chuen	1,2	3,750,000	664,677,468	668,427,468	51.10%
Chang Tsung
Yuan	4	4,500,000	–	4,500,000	0.34%
Sze Sun Sun
Tony	1,3	–	664,677,468	664,677,468	50.82%

– 44 –

GENERAL INFORMATION

APPENDIX VI

2. DISCLOSURE OF INTERESTS (Continued)

(a) Interests of Directors and Chief Executives (Continued)

Long Positions (Continued)

Notes:

Well Success was directly interested in 664,677,468 Shares. First Dynamic International Limited (“ First Dynamic ”) held more than one-third of the issued share capital of Well Success. Each of Royal Pacific Limited (“ Royal Pacific ”) and Alexon International Limited (“ Alexon ”) held more than one-third of the issued share capital of First Dynamic. Accordingly, First Dynamic, Royal Pacific and Alexon were deemed to be interested in 664,677,468 Shares.
Mr. Chan Ting Chuen (“ Mr. Chan ”) was directly interested in 3,750,000 Shares. Royal Pacific was wholly-owned by TC Chan Family Holdings Limited (“ TCCFHL ”), which in turn was wholly-owned by Mr. Chan. Accordingly, Mr. Chan was or deemed to be interested in 668,427,468 Shares.
Mr. Sze Sun Sun Tony (“ Mr. Sze ”) was interested in the entire issued share capital of Alexon and was therefore deemed to be interested in 664,677,468 Shares.
Mr. Chang Tsung Yuan was directly interested in 4,500,000 Shares. He was also a substantial shareholder of Well Success, in which he held 20% of its issued share capital.

Short Positions

As at the Latest Practicable Date, save as disclosed above, none of the Directors, chief executives nor their associates had any interest or short position in the Shares, underlying shares or debentures of the Company or any of its associated corporation which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

(b) Interests of Substantial Shareholders

As at the Latest Practicable Date, so far as is known to, or can be ascertained after reasonable enquiry by any Directors or chief executives of the Company, the following persons had interests or short positions in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of the Divisions 2 and 3 of Part XV of SFO, or, who were, directly or indirectly, deemed to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Company and the amount of each of such persons’ interests in such securities, together with particulars of any options in respect of such capital were set out in the next page.

– 45 –

GENERAL INFORMATION

APPENDIX VI

2. DISCLOSURE OF INTERESTS (Continued)

(b) Interests of Substantial Shareholders (Continued)

Long Positions

						% in the
			Number of issued ordinary shares			issued share capital of
			Direct	Deemed	Total	the
Shareholder	Notes	Capacity	interests	interests	interests	Company
Well Success	1	Beneficial	664,677,468	–	664,677,468	50.82%
		owner
First Dynamic	1	Interest of	–	664,677,468	664,677,468	50.82%
		controlled
		corporation
Royal Pacific	1	Interest of	–	664,677,468	664,677,468	50.82%
		controlled
		corporation
TCCFHL	2	Interest of	–	664,677,468	664,677,468	50.82%
		controlled
		corporation
Mr. Chan	2	Beneficial	3,750,000	664,677,468	668,427,468	51.10%
		owner and
		interest of
		controlled
		corporation
Ng Shuk Fong	2	Spouse	–	668,427,468	668,427,468	51.10%
(“Madam Ng”)
Alexon	1	Interest of	–	664,677,468	664,677,468	50.82%
		controlled
		corporation
Mr. Sze	3	Interest of	–	664,677,468	664,677,468	50.82%
		controlled
		corporation
Lau Yuk Wah	3	Spouse	–	664,677,468	664,677,468	50.82%
(“Madam Lau”)
Frensham	4	Beneficial	62,999,572	664,677,468	727,677,040	55.63%
Investments		owner and
Limited		interest of
(“Frensham”)		controlled
		corporation
Pou Yuen Industrial	4	Interest of	–	727,677,040	727,677,040	55.63%
(Holdings) Limited		controlled
(“Pou Yuen”)		corporation
Yue Yuen Industrial	4	Interest of	–	727,677,040	727,677,040	55.63%
Limited (“Yue Yuen		controlled
Industrial”)		corporation
Pou Hing Industrial	4	Interest of	–	727,677,040	727,677,040	55.63%
Company Limited		controlled
(“Pou Hing”)		corporation

– 46 –

GENERAL INFORMATION

APPENDIX VI

2. DISCLOSURE OF INTERESTS (Continued)

(b) Interests of Substantial Shareholders (Continued)

Long Positions (Continued)

						% in the
			Number of issued ordinary shares			issued share capital of
			Direct	Deemed	Total	the
Shareholder	Notes	Capacity	interests	interests	interests	Company
Yue Yuen Industrial	4	Interest of	–	727,677,040	727,677,040	55.63%
(Holdings) Limited		controlled
(“Yue Yuen”)		corporation
Wealthplus Holdings	4	Interest of	–	727,677,040	727,677,040	55.63%
Limited		controlled
(“Wealthplus”)		corporation
Pou Chen	4	Interest of	–	727,677,040	727,677,040	55.63%
Corporation (“Pou		controlled
Chen”)		corporation
Shah Capital		Investment	194,058,375	–	194,058,375	14.84%
Management		Manager

Notes:

As at the Latest Practicable Date, Well Success was directly interested in 664,677,468 Shares. First Dynamic held more than one-third of the issued share capital of Well Success. Each of Royal Pacific and Alexon held more than one-third of the issued share capital of First Dynamic. Accordingly, First Dynamic, Royal Pacific and Alexon were deemed to be interested in 664,677,468 Shares.
Madam Ng is the wife of Mr. Chan, a director of the Company. Royal Pacific is whollyowned by TCCFHL, which in turn is wholly-owned by Mr. Chan. As at the Latest Practicable Date, Royal Pacific was deemed to be interested in 664,677,468 Shares (see Note 1), therefore both Mr. Chan and Madam Ng were deemed to be interested in 664,677,468 Shares. Furthermore, Mr. Chan was directly interested in 3,750,000 Shares. Accordingly, Madam Ng was deemed to be interested in a total of 668,427,468 Shares.
Madam Lau is the wife of Mr. Sze, a director of the Company. As at the Latest Practicable Date, Mr. Sze was interested in the entire issued share capital of Alexon, therefore he was deemed to be interested in 664,677,468 Shares (see Note 1). Accordingly, Madam Lau was deemed to be interested in a total of 664,677,468 Shares.
Frensham was a wholly-owned subsidiary of Pou Yuen which in turn was a whollyowned subsidiary of Yue Yuen Industrial. Yue Yuen Industrial was a wholly-owned subsidiary of Pou Hing which in turn was a wholly-owned subsidiary of Yue Yuen. Wealthplus, a wholly- owned subsidiary of Pou Chen, held over one-third of the entire issued share capital of Yue Yuen. As at the Latest Practicable Date, Frensham held more than one-third of the issued share capital of Well Success and was therefore deemed to be interested in 664,677,468 Shares. In addition, Frensham had a direct interest in 62,999,572 Shares. Accordingly, all of Frensham, Pou Yuen, Yue Yuen Industrial, Pou Hing, Yue Yuen, Wealthplus and Pou Chen were or deemed to be interested in 727,677,040 Shares.

– 47 –

GENERAL INFORMATION

APPENDIX VI

2. DISCLOSURE OF INTERESTS (Continued)

(b) Interests of Substantial Shareholders (Continued)

Long Positions (Continued)

Save as disclosed above, as at the Latest Practicable Date, Directors were not aware of any other persons (other than the Directors and the chief executives of the Company) who had interests or short positions in the Shares or underlying shares (including any interests in options in respect of such capital), which would fall to be disclosed to the Company and the Exchange under the provisions of Divisions 2 and 3 of Part XV of SFO, or, who are, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company.

Short Positions

As at the Latest Practicable Date, the Company has not been notified of any other relevant interests or short positions in the issued share capital of the Company.

(c) Share Options of the Company

The Company terminated the 2001 Scheme and adopted a new share option scheme on 10 June 2011 (“ 2011 Scheme ”). As at the Latest Practicable Date, there is no share option being granted, outstanding, lapsed or cancelled by the Group pursuant to 2011 Scheme.

3. COMPETING INTERESTS OF DIRECTORS AND ASSOCIATES

As at the Latest Practicable Date, none of the Directors or their respective associates was interested in any business (other than as an independent non-executive Director) which competes or is likely to compete, either directly or indirectly, with the business of the Group.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had a service contract with the Company which was not determinable by the Company within one year without payment of compensation, other than statutory compensation.

– 48 –

GENERAL INFORMATION

APPENDIX VI

5. LITIGATION

On 31 March 2011, the Group filed an application to High Court (“ Court ”) for a judicial review with respect to the protective profits tax assessments for additional tax issued by Inland Revenue Department (“ IRD ”), relating to the years of assessment of 2001/2002 to 2004/2005 against certain wholly-owned subsidiaries of the Company (“ Subsidiaries ”). The Group has lodged objection with IRD against the protective profits tax assessments and purchased tax reserve certificates as directed by the Commissioner of IRD. Leave to bring judicial review proceedings was granted by the Court, pending for hearing on 1 February 2012.

On 9 December 2011, the Subsidiaries received from the IRD written determinations against the objections lodged by the Subsidiaries (“ Determinations ”). The Subsidiaries have the right to appeal against the Determinations to the Board of Review within one month from the date of the Determinations.

Save as disclosed above and as at the Latest Practicable Date, the Group was not engaged in any litigation or arbitration of material important and there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against the Group.

6. EXPERTS AND CONSENTS

The following is the qualifications of the experts who have given opinion and advice, which is contained in this circular:

Name Qualification BDO Limited (“ BDO ”) Certified Public Accountants Prudential Surveyors (Hong Kong) Ltd Property valuer (“ Prudential ”)

Each of BDO and Prudential has given and has not withdrawn their written consent to the issue of this circular with the inclusions of their respective letter and references to their names in the form and context in which they appear.

As at the Latest Practicable Date, each of BDO and Prudential:

(a) was not interested, directly or indirectly, in any assets which have been acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2010, being the date to which the latest published audited accounts of the Company were made up; and

– 49 –

GENERAL INFORMATION

APPENDIX VI

6. EXPERTS AND CONSENTS (Continued)

(b) did not have any shareholding interest in any member of the Group or any right (whether legally enforce able or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

7. MATERIAL CONTACTS

The following contracts have been entered into by the Group (not being contracts entered into in the ordinary course of business) within two years immediately preceding the date of this circular and are or may be material:

(a) a sale and purchase agreement dated 1 September 2010 between Great Pacific Investments Ltd. and Power Plus Limited, a wholly-owned subsidiary of the Company, in respect of the disposal of 11.3% equity interests in Full Pearl International Limited;
(b) a contract for the transfer of the land use right of State-owned land for construction[#] (國有建設用地使用權出讓合同) dated 11 November 2010 between Shenyang Real Estate Development Company Limited[#] (瀋陽房地產開發有限公司) and 瀋陽巿規劃和國土資源局瀋北分局 (Shenyang Municipal Bureau of Planning and Land Resources Shenbei Branch)[#] in respect of the acquisition of land use right on 20 October 2009;
(c) a confirmation agreement dated 20 January 2011 entered into between Ample Apex Limited, a wholly-owned subsidiary of the Company, and the Shenyang Plan and Land Bureau confirming the successful bid for a parcel of land in Shenyang of Ample Apex Limited;
(d) a confirmation agreement dated 20 January 2011 entered into between Boom Origin Limited, a wholly-owned subsidiary of the Company, and the Shenyang Plan and Land Bureau confirming the successful bid for a parcel of land in Shenyang of Boom Origin Limited;
(e) an agreement dated 23 February 2011 entered into amongst True Wealth Properties Limited, a wholly-owned subsidiary of the Company, Mitsubishi Estate Co. Ltd and the Company in respect of the formation of Premier Ever Group Limited; and
(f) the underwriting agreement dated 11 April 2011 entered into between the Company and Well Success Investment Limited in relation to the underwriting arrangement in respect of the open offer.

# The unofficial English transliterations or translations are for identification purpose only.

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GENERAL INFORMATION

APPENDIX VI

8. DIRECTORS’ INTERESTS IN ASSETS/CONTRACTS

As at the Latest Practicable Date:

(a) none of the Directors had any direct or indirect interests in any assets which have since 31 December 2010 (being the date to which the latest published audited consolidated financial statements of the Company were made up) been acquired or disposed of by or leased to the Company, or are proposed to be acquired or disposed of by or leased to the Company; and
(b) none of the Directors was materially interested in any contracts or arrangements entered into by the Company subsisting as at the Latest Practicable Date which is significant in the relation to the business of the Company.

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours (Saturdays and public holidays excepted) at 10th Floor, Island Place Tower, 510 King’s Road, North Point, Hong Kong from the date of this circular up to and including Thursday, 16 February 2012:

(a) the memorandum and articles of association of the Company;
(b) the annual reports of the Company for the three financial years ended 31 December 2008, 2009 and 2010;
(c) the unaudited interim report of the Company for the six months ended 30 June 2011;
(d) the material contracts as referred to in the section headed “material contracts” in this appendix; and
(e) the written consents referred to in the paragraph headed “Experts and Consents” in this appendix.

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GENERAL INFORMATION

APPENDIX VI

10. GENERAL INFORMATION

(a) The secretary of the Company is Ms. Chu Lai Shan Sammie, an associate member of The Hong Kong Institute of Chartered Secretaries and The Institute of Chartered Secretaries and Administrators. She is also a holder of the Practitioner’s Endorsement issued by The Hong Kong Institute of Chartered Secretaries.
(b) The share registrar of the Company is Tricor Tengis Limited of 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(c) The English text of this circular shall prevail over the Chinese text in the case of inconsistency.

– 52 –

AI assistant

Symphony Holdings Limited — Proxy Solicitation & Information Statement 2012

49779_rns_2012-02-02_0250f50c-ecae-4420-8abb-8b0576fbdbc4.pdf

SYMPHONY HOLDINGS LIMITED 新灃集團有限公司[*]

MAJOR TRANSACTION INVOLVING

ACQUISITION OF LAND IN SHENYANG, PRC

TO BE FUNDED BY WAY OF FURTHER INJECTION INTO A NON WHOLLY-OWNED SUBSIDIARY

DEFINITIONS

SYMPHONY HOLDINGS LIMITED 新灃集團有限公司[*]

To the Shareholders

MAJOR TRANSACTION INVOLVING ACQUISITION OF LAND IN SHENYANG, PRC TO BE FUNDED BY WAY OF FURTHER INJECTION INTO A NON WHOLLY-OWNED SUBSIDIARY

1. INTRODUCTION

1. INTRODUCTION (Continued)

2. DETAILS OF THE DECEMBER ACQUISITION

Confirmation Agreements

Premium and Payment Terms

2. DETAILS OF THE DECEMBER ACQUISITION (Continued)

Completion

3. PARTICULARS OF THE LAND

4. DETAILS OF THE FURTHER INJECTION

5. FINANCIAL EFFECTS OF THE ACQUISITION OF THE LAND AND THE FURTHER INJECTION

6. REASONS FOR AND BENEFITS OF THE DECEMBER ACQUISITION

7. INFORMATION ON THE LAND BUREAU

8. INFORMATION ON THE COMPANY

9. INFORMATION ON SHENYANG TONGDING

10. INFORMATION ON SHENYANG KEENSON

11. LISTING RULES IMPLICATIONS

11. LISTING RULES IMPLICATIONS (Continued)

12. GENERAL

1. FINANCIAL SUMMARY

(a) Audited Financial Statements

(i) Consolidated Statement of Comprehensive Income

Year ended 31 December

1. FINANCIAL SUMMARY (Continued)

(a) Audited Financial Statements (Continued)

(i) Consolidated Statement of Comprehensive Income (Continued)

Year ended 31 December

1. FINANCIAL SUMMARY (Continued)

(a) Audited Financial Statements (Continued)

(ii) Consolidated Statement of Financial Position

At 31 December

1. FINANCIAL SUMMARY (Continued)

(b) Unaudited Financial Statements

(i) Consolidated Statement of Comprehensive Income

Period ended 30 June

1. FINANCIAL SUMMARY (Continued)

(b) Unaudited Financial Statements (Continued)

(ii) Consolidated Statement of Financial Position

At 30 June

2. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER 2010 AND 2009

1. WORKING CAPITAL STATEMENT

2. INDEBTEDNESS STATEMENT

3. MATERIAL ADVERSE CHANGE

4. FINANCIAL AND TRADING PROSPECT OF THE GROUP

4. FINANCIAL AND TRADING PROSPECT OF THE GROUP (Continued)

DIRECTORS’ RESPONSIBILITY

REPORTING ACCOUNTANTS’ RESPONSIBILITY

OPINION

FINANCIAL INFORMATION ON SHENYANG KEENSON

Statement of Comprehensive Income

FINANCIAL INFORMATION ON SHENYANG KEENSON (Continued)

Statement of Financial Position

Statement of Changes in Equity

FINANCIAL INFORMATION ON SHENYANG KEENSON (Continued)

Statement of Cash Flows

Notes to the Financial Statements

1. GENERAL

2. BASIS OF PREPARATION

(a) Statement of compliance

(b) Adoption of Hong Kong Financial Reporting Standards (“HKFRSs”)

Notes to the Financial Statements (Continued)

2. BASIS OF PREPARATION (Continued)

(c) Basis of measurement and preparation

(d) Functional and presentation currency

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Investment properties

(b) Financial instruments

(i) Financial assets

Loans and receivables

Notes to the Financial Statements (Continued)

Symphony Holdings Limited Proxy Solicitation & Information Statement 2012

**SYMPHONY HOLDINGS LIMITED 新灃集團有限公司[*]**

**SYMPHONY HOLDINGS LIMITED 新灃集團有限公司[*]**