Wang On Group Limited - Proxy Solicitation & Information Statement 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Wang On Group Limited 宏安集團有限公司[*] , you should at once hand this circular together with the enclosed form of proxy to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or the transferee.

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

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**WANG ON GROUP LIMITED 宏安集團有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 1222)

MAJOR TRANSACTIONS

DISPOSAL OF 100% INTEREST IN SHINEY DAY INVESTMENTS LIMITED, ACQUISITION OF 100% INTEREST IN EVERLONG LIMITED AND THE SALE LOAN AND PROVISION OF FINANCIAL ASSISTANCE

Financial adviser to the Company

CIMB-GK Securities (HK) Limited

A letter from the Board is set out on pages 6 to 16 of this circular.

A notice convening the SGM to be held at 11/F., Two Exchange Square, Central, Hong Kong on Monday, 23 March 2009 at 4:00 p.m. is set out on pages SGM-1 to SGM-3 of this circular. Whether or not you are able to attend the SGM in person, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable and in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof (as the case may be) should you so wish.

6 March 2009

* For identification purpose only

CONTENTS

				Page
DEFINITIONS	. .	. . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM	THE BOARD . . . . . . . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX I	–	FINANCIAL INFORMATION	OF THE GROUP . . . . . . . . . .	I-1
APPENDIX II	–	FINANCIAL INFORMATION	OF
		THE EVERLONG GROUP	. . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	–	UNAUDITED PRO FORMA FINANCIAL
		INFORMATION OF THE ENLARGED GROUP . . . . . . . .		III-1
APPENDIX IV	–	PROPERTY VALUATION OF
		THE EVERLONG GROUP	. . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V	–	PROPERTY VALUATION OF
		THE SHINEY DAY GROUP	. . . . . . . . . . . . . . . . . . . . . . . .	V-1
APPENDIX VI	–	GENERAL INFORMATION	. . . . . . . . . . . . . . . . . . . . . . . . .	VI-1
NOTICE OF THE SGM . . . . . . . . . . . . . . . . . . . .			. . . . . . . . . . . . . . . . . . . . . . . . .	SGM-1

DEFINITIONS

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

“Acquisition”	acquisition of the Everlong Sale Share and the Sale Loan
	by the Group from the LeRoi Group pursuant to the
	Acquisition Agreement
“Acquisition Completion”	completion of the Acquisition Agreement
“Acquisition Agreement”	the conditional sale and purchase agreement dated 13
	February 2009 entered into between Loyal Fame and Wang
	On Enterprises in respect of the Acquisition
“Active Day”	Active Day Investments Limited 興日投資有限公司, an
	investment holding company incorporated in the British
	Virgin Islands with limited liability and was indirectly
	wholly owned by the Company as at the Latest Practicable
	Date
“Affiliate”	means, in relation to a party, any company which is directly
	or indirectly controlled by, or under common control with,
	or in control of, a party; the term “control” means the
	ownership of fifty percent (50%) or more of the voting
	shares or the registered capital of a company, or the power
	to appoint or elect a majority of the directors or the power
	to direct the management of a company
“associate”	has the meaning given to it in the Listing Rules
“Board”	the board of the Directors
“Business Day”	means a day (other than a Saturday or Sunday) on which
	banks are open for general business in Hong Kong
“Century Choice”	Century Choice Limited 龍群有限公司, an investment
	holding company incorporated in Hong Kong with limited
	liability and was directly wholly owned by Shiney Day as
	at the Latest Practicable Date
“China Agri-Products”	China Agri-Products Exchange Limited 中國農產品交易
	有限公司*, a company incorporated in Bermuda with
	limited liability and whose shares are listed on the main
	board of the Stock Exchange (Stock Code: 0149)
“China Agri-Products Group”	China Agri-Products together with its subsidiaries

For identification purpose only

– 1 –

DEFINITIONS

“China Agri-Products SGM”	a special general meeting of China Agri-Products to be
	convened and held for the purpose of considering and, if
	thought fit, approving the Disposal Agreement and the
	transactions contemplated thereunder
“China Agri-Products	the holder(s) of the ordinary share(s) of US$0.02 each in
Shareholder(s)”	the issued share capital of China Agri-Products
“Companies Act”	the Companies Act 1981 of Bermuda
“Company”	Wang On Group Limited宏安集團有限公司*, an exempted
	company incorporated in Bermuda with limited liability
	and whose shares are listed on the main board of the Stock
	Exchange (Stock Code: 1222)
“connected person(s)”	has the meaning given to it in the Listing Rules
“controlling shareholder(s)”	has the meaning given to it in the Listing Rules
“Director(s)”	the director(s) of the Company
“Disposal”	the disposal of the Shiney Day Sale Share by the Group to
	the China Agri-Products Group pursuant to the Disposal
	Agreement
“Disposal Agreement”	the conditional sale and purchase agreement dated 12
	February 2009 entered into between Active Day and Super
	Treasure in respect of the Disposal
“Disposal Completion”	completion of the Disposal Agreement
“Enlarged Group”	the Group immediately after the Acquisition Completion
“Everlong”	Everlong Limited, an investment holding company
	incorporated in the British Virgin Islands with limited
	liability and was directly wholly owned by Loyal Fame as
	at the Latest Practicable Date
“Everlong Group”	Everlong together with its subsidiaries
“Everlong Sale Share”	one (1) share of US$1.00 each in the share capital of
	Everlong owned by Loyal Fame, representing the entire
	issued share capital of Everlong
“Existing Loan”	the amount advanced by Active Day to Shiney Day, which
	stood at approximately HK$238 million as at the Latest
	Practicable Date

* For identification purpose only

– 2 –

DEFINITIONS

“Fully Wealth”	Fully Wealth Investment Limited 卓利投資有限公司, an
	investment holding company incorporated in Hong Kong
	with limited liability and was directly wholly owned by
	Shiney Day as at the Latest Practicable Date
“Group”	the Company together with its subsidiaries
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Investment Properties”	the portfolio of Hong Kong investment properties held by
	the Everlong Group
“Land”	the land with a total site area of approximately 273,884
	square metres located at 中國廣西壯族自治區玉林市二環
	北路南側(South Wing, Er-Huan North Road, Yulin City,
	Guangxi Zhuang Autonomous Region, the PRC)# and
	owned by Yulin Hong-Jin
“Latest Practicable Date”	2 March 2009, being the latest practicable date prior to the
	printing of this circular for the purpose of ascertaining
	certain information for inclusion in this circular
“LeRoi”	LeRoi Holdings Limited 利來控股有限公司, a company
	incorporated in the Cayman Islands with limited liability
	and whose shares are listed on the main board of the Stock
	Exchange (Stock Code: 0221)
“LeRoi Group”	LeRoi together with its subsidiaries
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Loyal Fame”	Loyal Fame International Limited 忠譽國際有限公司, an
	investment holding company incorporated in the British
	Virgin Islands with limited liability and was directly
	wholly owned by LeRoi as at the Latest Practicable Date
“PRC”	the People’s Republic of China, which for the purpose of
	this circular shall exclude Hong Kong, Taiwan and the
	Macau Special Administrative Region of the PRC
“RMB”	Renminbi, the lawful currency of the PRC

# English translation of a Chinese company or entity or address and is provided for identification purpose only

– 3 –

DEFINITIONS

“Sale Loan”	the amount advanced by Loyal Fame to Everlong, which
	stood at approximately HK$81.9 million as at the Latest
	Practicable Date
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“SGM”	a special general meeting of the Company to be convened
	and held for the purpose of considering and, if thought fit,
	approving the Disposal, the Acquisition, the Financial
	Assistance and the transactions contemplated thereunder
“Share(s)”	the ordinary share(s) of HK$0.005 each in the issued share
	capital of the Company
“Shareholder(s)”	the holder(s) of the Shares
“Share Options”	the options granted by the Company to subscribe for Shares
	pursuant to the Share Option Scheme
“Share Option Scheme”	the share option scheme adopted by the Company on 3 May
	2002
“Shiney Day”	Shiney Day Investments Limited, a company incorporated
	in the British Virgin Islands with limited liability and was
	directly wholly owned by Active Day as at the Latest
	Practicable Date
“Shiney Day Group”	Shiney Day and its subsidiaries
“Shiney Day Sale Share”	one (1) share of US$1.00 each in the share capital of
	Shiney Day owned by Active Day, representing the entire
	issued share capital of Shiney Day
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiary(ies)”	has the meaning given to it in the Companies Ordinance
	(Chapter 32 of the Laws of Hong Kong)
“substantial shareholder”	has the meaning given to it in the Listing Rules
“Super Treasure”	Super Treasure Holdings Limited 至寶控股有限公司, an
	investment holding company incorporated in the British
	Virgin Islands with limited liability and was directly
	wholly owned by China Agri-Products as at the Latest
	Practicable Date

– 4 –

DEFINITIONS

“Wang On Enterprises”

Wang On Enterprises (BVI) Limited, a company incorporated in the British Virgin Islands with limited liability and was directly wholly owned by the Company as at the Latest Practicable Date

“WYT”

Wai Yuen Tong Medicine Holdings Limited 位元堂藥業控股有限公司[*] , an exempted company incorporated in Bermuda with limited liability and whose shares are listed on the main board of the Stock Exchange (Stock Code: 0897)

“Xuzhou Yuan Yang”

徐州源洋商貿發展有限公司 (Xuzhou Yuan Yang Trading Development Company Limited)[#] , a sino-foreign owned enterprise established under the laws of the PRC and was owned as to 51% by Fully Wealth as at the Latest Practicable Date

“Yulin Hong-Jin” 玉林宏進農副產品批發市場有限公司 (Yulin Hong-Jin Agricultural By-products Wholesale Marketplace Limited)[#] , a sino-foreign owned enterprise established under the laws of the PRC and was owned as to 65% by Century Choice as at the Latest Practicable Date

“%”

per cent.

For identification purpose only

# English translation of a Chinese company or entity or address and is provided for identification purpose only

– 5 –

LETTER FROM THE BOARD

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**WANG ON GROUP LIMITED 宏安集團有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 1222)

Executive Directors: Registered office: Mr. Tang Ching Ho (Chairman) Clarendon House Ms. Yau Yuk Yin (Deputy Chairman) 2 Church Street Mr. Chan Chun Hong, Thomas (Managing Director) Hamilton HM 11 Bermuda

Independent non-executive Directors:

Dr. Lee Peng Fei, Allen, CBE, BS, FHKIE, JP Head office and principal Mr. Wong Chun, Justein, MBE, JP place of business in Hong Kong: Mr. Siu Yim Kwan, Sidney, S.B.St.J. 5/F., Wai Yuen Tong Medicine Building Mr. Siu Kam Chau 9 Wang Kwong Road Kowloon Bay Kowloon Hong Kong 6 March 2009

To the Shareholders and, for information only, the holders of the Share Options

Dear Sir or Madam,

MAJOR TRANSACTIONS

DISPOSAL OF 100% INTEREST IN SHINEY DAY INVESTMENTS LIMITED, ACQUISITION OF 100% INTEREST IN EVERLONG LIMITED AND THE SALE LOAN AND PROVISION OF FINANCIAL ASSISTANCE

INTRODUCTION

On 12 February 2009, Active Day and Super Treasure entered into the Disposal Agreement, pursuant to which Active Day has agreed to dispose of and Super Treasure has agreed to purchase the Shiney Day Sale Share, representing the entire issued share capital of Shiney Day, for a cash consideration of HK$150 million.

For identification purpose only

– 6 –

LETTER FROM THE BOARD

Pursuant to the Disposal Agreement, upon the Disposal Completion, Active Day, as lender, and Shiney Day, as borrower, will enter into a loan agreement (the “ Loan Agreement ”) pursuant to which Active Day agrees to continue to extend the Existing Loan to Shiney Day. Accordingly, the Existing Loan, representing an amount due to Active Day by Shiney Day, will constitute a provision of financial assistance (the “ Financial Assistance ”) by Active Day to Shiney Day. The Existing Loan will be secured by the Corporate Guarantee (as defined below) granted by China Agri-Products in favour of Active Day.

On 13 February 2009, Loyal Fame and Wang On Enterprises entered into the Acquisition Agreement, pursuant to which Loyal Fame has agreed to dispose of and Wang On Enterprises has agreed to purchase the Everlong Sale Share, representing the entire issued share capital of Everlong, and the Sale Loan, for a cash consideration of HK$63.4 million.

Each of the Disposal, the Acquisition and the Financial Assistance constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to Shareholders’ approval at the SGM.

As no Shareholder has an interest in any of the Disposal, the Acquisition and the Financial Assistance which is materially different from the other Shareholders, no Shareholder is required to abstain from voting on the resolutions to be proposed at the SGM to approve the Disposal, the Acquisition, the Financial Assistance and the transactions contemplated thereunder.

The purpose of this circular is to provide you with further details of the Disposal, the Acquisition and the Financial Assistance as required under the Listing Rules together with a notice convening the SGM to approve the Disposal, the Acquisition, the Financial Assistance and the transactions contemplated thereunder.

THE DISPOSAL AGREEMENT

1. Date

12 February 2009

2. Parties

(i) Active Day, as vendor; and
(ii) Super Treasure, as purchaser.

(collectively referred to as the “ Disposal Parties ” and each a “ Disposal Party ”)

Each of Active Day and Super Treasure is principally engaged in investment holding.

– 7 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, the Company indirectly wholly owned Active Day, and was also a substantial shareholder of WYT, holding 25.32% of its equity interest.

As at the Latest Practicable Date, WYT was a substantial shareholder of LeRoi holding 29.97% of its equity interest, which in turn indirectly held 28.49% of the equity interest in China Agri-Products, and which in turn directly wholly owned Super Treasure.

As at the Latest Practicable Date, Mr. Chan Chun Hong, Thomas, an executive Director, was also an executive director of each of WYT, LeRoi and China Agri-Products and Mr. Tang Ching Ho, an executive Director, was also an executive director of WYT. As at the Latest Practicable Date, Mr. Tang Ching Ho together with his associates held 10.65% of the equity interest in the Company.

Based on the foregoing and, having made all reasonable enquiries, to the best of the Directors’ knowledge, information and belief, as at the Latest Practicable Date, (i) none of the connected persons of the Company had any shareholding interest in LeRoi or China Agri-Products, and (ii) Super Treasure and China Agri-Products were independent of and not connected with the Company and its connected persons.

3. Subject assets

The Shiney Day Sale Share, representing the entire issued share capital of Shiney Day. There is no restriction on the sale of the Shiney Day Sale Share by the China Agri-Products Group subsequent to the Disposal Completion.

4. Consideration

The consideration of HK$150 million for the Disposal was arrived at after arm’s length negotiations between the Disposal Parties with reference to the unaudited net liabilities of the Shiney Day Group attributable to the Company of approximately HK$4 million as at 31 December 2008, and revaluation surplus of the Land and the developed and developing properties as at 31 January 2009, as valued by an independent valuer, attributable to Shiney Day of approximately HK$177 million.

The consideration for the Disposal represents a discount of approximately 13.30% to the unaudited net asset value of the Shiney Day Group as at 31 December 2008 after adjusted for the revaluation surplus attributable to Shiney Day as set out above.

Pursuant to the Disposal Agreement, the consideration shall be settled by cash in full immediately upon the Disposal Completion.

5. Conditions precedent

The Disposal Completion shall be conditional on the following conditions precedent being fulfilled:

(i) Super Treasure being satisfied as to its due diligence findings of the Shiney Day Group;
(ii) the Company having obtained the approval of the Shareholders at the SGM for the sale of the Shiney Day Sale Share in accordance with the Listing Rules and such approval not having been or proposed to be revoked; and

– 8 –

LETTER FROM THE BOARD

(iii) China Agri-Products having obtained the approval of the China Agri-Products Shareholders at the China Agri-Products SGM for the purchase of the Shiney Day Sale Share in accordance with the requirements of the Listing Rules and such approval not having been or proposed to be revoked.

Save and except for conditions (ii) and (iii) above, Super Treasure shall be entitled in its absolute discretion to waive condition (i) either in whole or in part.

In the event that the above conditions cannot be fulfilled by 31 March 2009 or such later date as the Disposal Parties may mutually agree in writing, the Disposal Agreement shall automatically terminate and neither the Disposal Parties nor any of their Affiliates shall have any claim of any nature whatsoever against the other Disposal Party (or any of its Affiliates) under the Disposal Agreement (save in respect of any rights and liabilities of the Disposal Parties which have accrued prior to termination).

THE FINANCIAL ASSISTANCE

The Existing Loan was advanced by the Group to Shiney Day from 2006 to 2008 (i) as registered capital of Yulin Hong-Jin and Xuzhou Yuan Yang; (ii) for the settlement of land premium of the Land; and (iii) as construction cost of the properties owned by Yulin Hong-Jin and Xuzhou Yuan Yang.

Pursuant to the Disposal Agreement, upon the Disposal Completion, Active Day, as lender, and Shiney Day, as borrower, will enter into the Loan Agreement pursuant to which Active Day agrees to continue to extend the Existing Loan to Shiney Day. Accordingly, the Existing Loan, representing an amount due to Active Day by Shiney Day, will constitute a provision of Financial Assistance by Active Day to Shiney Day.

The Existing Loan will be secured by a corporate guarantee (the “ Corporate Guarantee ”) granted by China Agri-Products in favour of Active Day. Pursuant to the Corporate Guarantee to be entered into upon the Disposal Completion, China Agri-Products will unconditionally and irrevocably guarantee to Active Day the prompt performance by Shiney Day of all its obligations under or in connection with the Loan Agreement.

Pursuant to the Loan Agreement to be entered into, the Existing Loan will carry interest at 6% per annum, which was determined with reference to the prevailing market rate, payable monthly in arrears, and the principal amount will be due for full repayment on the date falling 18 months from the date of the Loan Agreement (the “ Final Repayment Date ”). Shiney Day may, by giving Active Day a notice in writing three (3) Business Days in advance, repay a portion or the full amount of the Existing Loan at any time prior to the Final Repayment Date without any premium or penalty.

THE ACQUISITION AGREEMENT

1. Date

13 February 2009

– 9 –

LETTER FROM THE BOARD

2. Parties

(i) Loyal Fame, as vendor; and
(ii) Wang On Enterprises, as purchaser.

(collectively referred to as the “ Acquisition Parties ” and each an “ Acquisition Party ”)

Each of Loyal Fame and Wang On Enterprises is principally engaged in investment holding.

As at the Latest Practicable Date, the Company directly wholly owned Wang On Enterprises, and was also a substantial shareholder of WYT, holding 25.32% of its equity interest.

As at the Latest Practicable Date, WYT was a substantial shareholder of LeRoi holding 29.97% of its equity interest, which in turn directly wholly owned Loyal Fame, and which in turn directly wholly owned Everlong.

Based on the foregoing and, having made all reasonable enquires, to the best of the Directors’ knowledge, information and belief, as at the Latest Practicable Date, (i) none of the connected persons of the Company had any shareholding interest in WYT or LeRoi, and (ii) Loyal Fame and LeRoi were independent of and not connected with the Company and its connected persons.

3. Subject assets

The Everlong Sale Share, representing the entire issued share capital of Everlong, and the Sale Loan. There is no restriction on the sale of the Everlong Sale Share by the Group subsequent to the Acquisition Completion.

4. Consideration

The consideration of HK$63.4 million for the Acquisition was arrived at after arm’s length negotiations between the Acquisition Parties with reference to the unaudited consolidated net liabilities of the Everlong Group of approximately HK$3.5 million as at 31 December 2008, revaluation deficit of the Investment Properties of approximately HK$15 million as at 31 January 2009 as valued by an independent valuer, and the Sale Loan of approximately HK$81.9 million.

Pursuant to the Acquisition Agreement, the consideration shall be settled by cash in full upon the Acquisition Completion.

Wang On Enterprises will finance the payment of the consideration by internal resources.

– 10 –

LETTER FROM THE BOARD

5. Conditions precedent

The Acquisition Completion shall be conditional on the following conditions precedent being fulfilled:

(i) the Company having obtained the approval of the Shareholders at the SGM for the purchase of the Everlong Sale Share and the Sale Loan in accordance with the requirements of the Listing Rules and such approval not having been or proposed to be revoked; and
(ii) Wang On Enterprises being satisfied as to its due diligence findings of the Everlong Group.

Save and except for condition (i) above, Wang On Enterprises shall be entitled at its absolute discretion to waive condition (ii) either in whole or in part.

If any of the above conditions has not been fulfilled or waived by 31 March 2009 (or such later date as the Acquisition Parties may mutually agree in writing), the Acquisition Agreement shall automatically terminate and neither the Acquisition Party nor any of their Affiliates shall have any claim of any nature whatsoever against the other Acquisition Party (or any of its Affiliates) under the Acquisition Agreement (save in respect of any rights and liabilities of the Acquisition Parties which have accrued prior to termination).

INFORMATION ON THE SHINEY DAY GROUP

Shiney Day

As at the Latest Practicable Date, Shiney Day, which is principally engaged in investment holding, was an indirect wholly-owned subsidiary of the Company and, through Century Choice, held 65% of the issued share capital of Yulin Hong-Jin, and, through Fully Wealth, held 51% of the issued share capital of Xuzhou Yuan Yang. Both Yulin Hong-Jin and Xuzhou Yuan Yang are indirect subsidiaries of the Company and their financial results are consolidated into those of the Company.

Set out below is the financial information of the Shiney Day Group for the period from 10 July 2006 to 31 March 2007 and the year ended 31 March 2008, which are prepared in accordance with Hong Kong Financial Reporting Standards:

	Period from	For the
	10 July 2006 to	year ended
	31 March	31 March
	2007	2008
	HK$’million	HK$’million
	(audited)	(audited)
Revenue	–	11.9
Net loss before taxation	(2.5)	(20.4)
Net loss after taxation	(2.5)	(20.4)

– 11 –

LETTER FROM THE BOARD

	As at 31	March
	2007	2008
	HK$’million	HK$’million
	(audited)	(audited)
Total assets	22.0	291.7
Net assets/(liabilities)	(2.1)	40.1

Century Choice and Fully Wealth

Century Choice was incorporated in Hong Kong on 6 January 2006. Century Choice is an investment holding company established for incorporating and holding the 65% interest in Yulin Hong-Jin.

Fully Wealth was incorporated in Hong Kong on 28 June 2006. Fully Wealth is an investment holding company established for incorporating and holding the 51% interest in Xuzhou Yuan Yang.

Save for the holding of interest in Yulin Hong-Jin and Xuzhou Yuan Yang and the Existing Loan due to Shiney Day respectively, both Century Choice and Fully Wealth have no other material assets and liabilities.

Yulin Hong-Jin

Yulin Hong-Jin is a sino-foreign owned enterprise established under the laws of the PRC on 15 December 2006. Yulin Hong-Jin acquired the Land for the development of a large scale agricultural by-products wholesale market at a consideration of RMB76.3 million in 2007. Yulin Hong-Jin obtained the relevant land use right certificates in September 2007 and December 2007 respectively.

The Land has a total site area of approximately 273,884 square metres with a land use right term of 40 years. The total planned gross floor area (“ GFA ”) to be developed on the Land is approximately 207,666 square metres of which the superstructure of approximately 68,352 square metres have been built with various two-storey market stalls and multi-storey godown by the end of 2008. The book value and market value of the Land and the developed and developing properties as at 31 January 2009, as valued by an independent valuer under the direct comparison approach, was approximately HK$195.7 million and HK$461 million respectively.

Xuzhou Yuan Yang

Xuzhou Yuan Yang is a sino-foreign owned enterprise established under the laws of the PRC on 21 July 2006. Xuzhou Yuan Yang is the owner of certain land and is principally engaged in the operation of an agricultural wholesale market in Xuzhou, Jiangsu Province, the PRC. The agricultural wholesale market consists of various single-storey market stalls and multi-storey godown with a total GFA of approximately 79,653 square metres. The market accommodates more than 850 operators and is a major wholesalemarket player of fruit and seafood supplies in Xuzhou. The aggregate book value and market value of the land and properties on which the market operates as at 31 January 2009, as valued by an independent valuer under the capitalisation approach, was approximately HK$180 million and HK$199 million respectively.

– 12 –

LETTER FROM THE BOARD

INFORMATION ON THE EVERLONG GROUP

As at the Latest Practicable Date, Everlong, which is principally engaged in investment holding, was an indirect wholly-owned subsidiary of LeRoi. Through its subsidiaries, Everlong beneficially owns the Investment Properties. Upon the Acquisition Completion, Everlong will become an indirect wholly-owned subsidiary of the Company.

The Investment Properties consist of 54 residential units located in Hong Kong and have an aggregate GFA of approximately 32,600 square feet. Market value of the Investment Properties as at 31 January 2009 as valued by an independent valuer was approximately HK$98 million. The Investment Properties are currently rented out to independent third parties.

Set out below is the financial information of the Everlong Group for the period from 28 December 2006 (being the date of incorporation) to 31 March 2007 and the year ended 31 March 2008 as extracted from Appendix II to this circular:

	Period from
	28 December 2006
	(date of	For the
	incorporation)	year ended
	to 31 March	31 March
	2007	2008
	HK$’million	HK$’million
	(audited)	(audited)
Turnover	–	1.7
Profit before taxation	0.1	1.8
Net profit after taxation	0.1	1.5
	As at 31	March
	2007	2008
	HK$’million	HK$’million
	(audited)	(audited)
Total assets	12.0	75.7
Net assets	0.1	1.6

REASONS FOR AND BENEFITS OF THE DISPOSAL, THE ACQUISITION AND THE FINANCIAL ASSISTANCE

The Disposal

The Group is principally engaged in the development and management of agricultural by-products wholesaling business in the PRC and Hong Kong, management and sub-licensing of wet markets in the PRC and Hong Kong, property development, property investment and management and sub-licensing shopping centres in Hong Kong. It also has interests in the pharmaceutical business through its investments in WYT.

– 13 –

LETTER FROM THE BOARD

While the Directors are optimistic about the long term potential of the agricultural by-products wholesale market in Yulin and Xuzhou, they consider that the Disposal will allow the Group to realise its investment in Yulin Hong-Jin and Xuzhou Yuan Yang, to streamline its business, and to focus its resources for other projects and potential investments.

The Directors are of the view that the terms of the Disposal Agreement are on normal commercial terms, fair and reasonable and in the interests of the Group and the Shareholders as a whole.

The Acquisition

The Investment Properties consist of 54 residential units located in Hong Kong and have an aggregate GFA of approximately 32,600 square feet. The Investment Properties are currently rented out to independent third parties, yielding an annual rental income of approximately HK$9.5 million. The Group intends to continue leasing out the Investment Properties after the Acquisition Completion for rental income. The Directors believe in the long term prospect of residential properties in Hong Kong and consider that the Acquisition will strengthen the Group’s recurring income base.

The Directors consider that the terms of the Acquisition Agreement are on normal commercial terms, fair and reasonable and in the interests of the Group and the Shareholders as a whole.

The Financial Assistance

As the Existing Loan under the Loan Agreement will generate interest income to the Company and is secured by the Corporate Guarantee, the Directors are of the view that the terms of the Financial Assistance are on normal commercial terms, fair and reasonable and in the interests of the Group and the Shareholders as a whole.

FINANCIAL EFFECTS ON THE GROUP

The Disposal

Upon the Disposal Completion, the Company expects to record a gain on disposal of approximately HK$154 million (before deduction of estimated and necessary expenses) calculated with reference to the book value of the Shiney Day Group. Shareholders should note that the actual gain on disposal to be recorded by the Company will depend on the net asset value of the Shiney Day Group as at the date of the Disposal Completion. The Company currently intends to apply the proceeds from the Disposal for acquisition of other potential investment targets and as general working capital. Upon the Disposal Completion, save for the Financial Assistance, the Company will cease to have any interest in Shiney Day, Yulin Hong-Jin and Xuzhou Yuan Yang.

Based on the management accounts of the Shiney Day Group as at 31 December 2008 and the consideration of HK$150 million for the Disposal, immediately upon the Disposal Completion, the Group’s consolidated total assets will be decreased by approximately HK$265.6 million and the Group’s consolidated total liabilities will be decreased by approximately HK$419.6 million.

– 14 –

LETTER FROM THE BOARD

The Acquisition

Upon the Acquisition Completion, Everlong will become an indirect wholly-owned subsidiary of the Company and thus its assets, liabilities and financial results will be consolidated into those of the Group. As noted from the unaudited pro forma financial information of the Enlarged Group as set out in the Appendix III to this circular, it is expected that both total assets and total liabilities of the Group will increase upon the Acquisition Completion. The Directors consider that there will be no significant impact on the earnings of the Group immediately upon the Acquisition Completion.

The Financial Assistance

The Directors consider that there will be no significant impact on the assets, liabilities and earnings of the Group as a result of the Financial Assistance.

VALUATION OF THE INVESTMENT PROPERTIES

The Company has engaged Vigers Appraisal & Consulting Limited to value the Investment Properties. Details of the valuation reports are set out in Appendix IV to this circular. Disclosure of the reconciliation of the net book value and the valuation as required under Rule 5.07 of the Listing Rules is set out below:

Net book value of the Everlong Group’s investment properties as at 30 September 2008 as set out in Appendix II to this circular Add: Value of the investment properties acquired by the Everlong Group during 1 October 2008 to 31 January 2009 Less: Revaluation deficit Valuation of the Investment Properties as at 31 January 2009	Investment Properties HK$’000 107,520 5,454 14,774
	98,200

IMPLICATION UNDER THE LISTING RULES

– 15 –

LETTER FROM THE BOARD

As no Shareholder has an interest in any of the Disposal, the Acquisition and the Financial Assistance which is materially different from other Shareholders, no Shareholder is required to abstain from voting on the resolutions to be proposed at the SGM to approve the Disposal, the Acquisition, the Financial Assistance and the transactions contemplated thereunder.

THE SGM

Set out on pages SGM-1 to SGM-3 of this circular is a notice convening the SGM to be held at 11/F., Two Exchange Square, Central, Hong Kong on Monday, 23 March 2009 at 4:00 p.m. for the purpose of considering and, if thought fit, passing the resolutions to approve the Disposal, the Acquisition, the Financial Assistance and the transactions contemplated thereunder.

A form of proxy is herewith enclosed for use at the SGM. Whether or not you are able to attend the SGM in person, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable and in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof (as the case may be) should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders at a general meeting of the Company must be taken by way of a poll. Accordingly, the resolutions to be considered and, if thought fit, passed at the SGM will be voted by way of a poll by the Shareholders.

RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the terms of the Disposal, the Acquisition and the Financial Assistance are fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Directors recommend that the Shareholders vote in favour of the resolutions for approving the Disposal, the Acquisition, the Financial Assistance and the transactions contemplated thereunder.

ADDITIONAL INFORMATION

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

Yours faithfully, For and on behalf of the Board

Wang On Group Limited 宏安集團有限公司[] Tang Ching Ho* Chairman

For identification purpose only

– 16 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY

The following is a summary of the audited financial results of the Group for each of the three years ended 31 March 2008 as extracted from the annual reports of the Company for which the auditors of the Company, Ernst & Young, Certified Public Accountants, expressed unqualified opinion.

Results

For the year ended 31 March 2008 2007 2006 HK$’000 HK$’000 HK$’000 545,882 499,488 395,557 161,325 118,997 82,056 122,577 96,432 82,063 (25,963) (13,254) (9,480) 96,089 83,170 72,554 525 8 29 96,614 83,178 72,583 – 126 4,608 10,319 7,073 6,736 7,868 19,540 15,718 18,187 26,739 27,062 HK1.55 cents HK1.76 cents HK1.56 cents HK1.43 cents HK1.58 cents HK1.49 cents	For the year ended 31 March 2008 2007 2006 HK$’000 HK$’000 HK$’000 545,882 499,488 395,557 161,325 118,997 82,056 122,577 96,432 82,063 (25,963) (13,254) (9,480) 96,089 83,170 72,554 525 8 29 96,614 83,178 72,583 – 126 4,608 10,319 7,073 6,736 7,868 19,540 15,718 18,187 26,739 27,062 HK1.55 cents HK1.76 cents HK1.56 cents HK1.43 cents HK1.58 cents HK1.49 cents	For the year ended 31 March 2008 2007 2006 HK$’000 HK$’000 HK$’000 545,882 499,488 395,557 161,325 118,997 82,056 122,577 96,432 82,063 (25,963) (13,254) (9,480) 96,089 83,170 72,554 525 8 29 96,614 83,178 72,583 – 126 4,608 10,319 7,073 6,736 7,868 19,540 15,718 18,187 26,739 27,062 HK1.55 cents HK1.76 cents HK1.56 cents HK1.43 cents HK1.58 cents HK1.49 cents
161,325 122,577 (25,963) 96,089 525	118,997 96,432 (13,254) 83,170 8	82,056
		82,063 (9,480
		72,554 29
96,614	83,178
– 10,319 7,868	126 7,073 19,540	4,608 6,736 15,718
18,187 HK1.55 cents HK1.43 cents	26,739 HK1.76 cents HK1.58 cents

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Assets and liabilities Non-current assets Current assets Total assets Current liabilities Non-current liabilities Total liabilities Equity Equity attributable to equity holders of the parent Minority interests	As at 31 March 2008 2007 1,291,413 951,043 740,561 783,171 2,031,974 1,734,214 582,055 531,899 209,704 160,009 791,759 691,908 1,182,569 1,041,834 57,646 472 1,240,215 1,042,306	2006 932,375 564,949
		1,497,324

		400,035 257,116
		657,151

		839,709 464
		840,173

– I-2 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2. AUDITED FINANCIAL STATEMENTS OF THE GROUP FOR THE TWO YEARS ENDED 31 MARCH 2008

Set out below are the audited financial statements of the Group for the two years ended 31 March 2008 which are published in the Company’s annual report for the year ended 31 March 2008:

Consolidated Income Statement

Year ended 31 March 2008

Notes REVENUE 5 Cost of sales Gross profit Other income and gains 5 Selling and distribution costs Administrative expenses Other expenses Finance costs 7 Gain on disposal of subsidiaries Fair value gains on revaluation of investment properties, net 16 Share of profits and losses of associates PROFIT BEFORE TAX 6 Tax 10 PROFIT FOR THE YEAR Attributable to: Equity holders of the parent 11 Minority interests DIVIDENDS 12 Additional final dividend for 2006 Interim Proposed final EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT 13 Basic Diluted	2008 HK$’000 545,882 (384,557)	2007 HK$’000 499,488 (380,491) 118,997 37,639 (12,536) (70,684) (1,806) (13,828) 2,524 31,548 4,578 96,432 (13,254) 83,178 83,170 8 83,178 126 7,073 19,540 26,739 HK1.76 cents HK1.58 cents
	161,325 97,329 (10,548) (104,427) (45,222) (14,906) – 11,383 27,643 122,577 (25,963)	118,997 37,639 (12,536 (70,684 (1,806 (13,828 2,524 31,548 4,578
		96,432 (13,254
	96,614
	96,089 525	83,170 8
	96,614
	– 10,319 7,868	126 7,073 19,540
	18,187 HK1.55 cents HK1.43 cents

– I-3 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Balance Sheet

31 March 2008

Notes NON-CURRENT ASSETS Property, plant and equipment 14 Prepaid land lease payments 15 Investment properties 16 Properties under development 17 Goodwill 18 Interests in associates 20 Held-to-maturity financial asset 22 Other intangible asset 23 Loans receivable 26 Rental deposits paid 26 Deposits for the acquisition of investment properties and associates Deferred tax assets 35 Total non-current assets CURRENT ASSETS Properties held for sale 24 Properties under development 17 Trade receivables 25 Prepayments, deposits and other receivables 26 Financial assets at fair value through profit or loss 27 Tax recoverable Pledged deposits 28 Cash and cash equivalents 28 Total current assets CURRENT LIABILITIES Trade payables 29 Other payables and accruals 30 Deposits received and receipts in advance Derivative financial instruments 31 Interest-bearing bank loans 32 Provisions for onerous contracts 33 Tax payable Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES	2008 HK$’000 160,884 177,902 555,199 – 7,820 305,825 1,943 24,240 12,989 4,595 35,674 4,342	2007 HK$’000 11,985 – 315,143 247,869 2,319 321,364 – 30,300 13,987 5,343 – 2,733
	1,291,413 27,885 288,405 4,101 43,190 45,278 883 – 330,819 740,561 24,624 128,423 50,038 2,338 347,115 1,690 27,827 582,055 158,506 1,449,919	951,043
		1,455 222,811 6,596 38,958 46,767 – 78,000 388,584
		783,171
		23,246 21,095 81,888 – 389,425 369 15,876
		531,899
		251,272
		1,202,315

– I-4 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes NON-CURRENT LIABILITIES Interest-bearing bank loans 32 Provisions for onerous contracts 33 Convertible notes 34 Deferred tax liabilities 35 Total non-current liabilities Net assets EQUITY Equity attributable to equity holders of the parent Issued capital 36 Equity component of convertible notes 34 Reserves 38(a) Proposed final dividend 12 Minority interests Total equity	2008 HK$’000 199,118 1,960 – 8,626 209,704 1,240,215 32,051 – 1,142,650 7,868 1,182,569 57,646 1,240,215	2007 HK$’000 108,799 – 45,756 5,454
		160,009
		1,042,306

		29,418 5,653 987,223 19,540
		1,041,834
		472
		1,042,306

– I-5 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Statement of Changes in Equity

Year ended 31 March 2008

Notes At 1 April 2006 Final 2006 dividend declared 12 Exchange realignment recognised directly in equity Profit for the year Total income and expense for the year Conversion of convertible notes 34, 36 Bonus issue 36 Repurchases of shares 36 Placements of shares 36 Share issue expenses 36 Equity-settled share option arrangements 37 Interim 2007 dividend 12 Proposed final 2007 dividend 12 At 31 March and 1 April 2007 Final 2007 dividend declared Exchange realignment recognised directly in equity Profit for the year Total income and expenses for the year Conversion of convertible notes 34, 36 Exercise of share options 36 Repurchases of shares 36 Share of changes in reserves of associates Acquisition of a subsidiary 39(b) Capital contribution from a minority shareholder of a subsidiary Issuance of warrants 36 Share issue expenses 36 Equity-settled share option arrangements 37 Interim 2008 dividend 12 Proposed final 2008 dividend 12 At 31 March 2008	Attributable to equity holders of the parent
	Issued share capital Share premium account Contributed surplus Equity component of convertible notes Share option reserve Exchange fluctuation reserve Warrant reserve Other reserve Retained profits Proposed final dividend Total Minority interests Total equity HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 22,454 422,291 106,329 6,077 – – – – 266,840 15,718 839,709 464 840,173 – – – – – – – – (126) (15,718) (15,844) – (15,844) 22,454 422,291 106,329 6,077 – – – – 266,714 – 823,865 464 824,329 – – – – – 378 – – – – 378 – 378 – – – – – – – – 83,170 – 83,170 8 83,178 – – – – – 378 – – 83,170 – 83,548 8 83,556 180 3,822 – (424) – – – – – – 3,578 – 3,578 2,264 (2,264) – – – – – – – – – – – (1,930) (43,087) – – – – – – – – (45,017) – (45,017) 6,450 174,150 – – – – – – – – 180,600 – 180,600 – (5,300) – – – – – – – – (5,300) – (5,300) – – – – 7,633 – – – – – 7,633 – 7,633 – – – – – – – – (7,073) – (7,073) – (7,073) – – – – – – – – (19,540) 19,540 – – – 29,418 549,612 106,329 5,653 7,633 378 – – 323,271* 19,540 1,041,834 472 1,042,306 – – – – – – – – – (19,540) (19,540) – (19,540) 29,418 549,612 106,329 5,653 7,633 378 – – 323,271 – 1,022,294 472 1,022,766 – – – – – 22,789 – – – – 22,789 4,056 26,845 – – – – – – – – 96,089 – 96,089 525 96,614 – – – – – 22,789 – – 96,089 – 118,878 4,581 123,459 2,640 49,712 – (5,653) – – – – – – 46,699 – 46,699 896 7,798 – – – – – – – – 8,694 – 8,694 (903) (20,603) – – – – – – – – (21,506) – (21,506) – – – – – – – 13,425 – – 13,425 – 13,425 – – – – – – – – – – – 24,402 24,402 – – – – – – – – – – – 28,191 28,191 – – – – – – 4,500 – – – 4,500 – 4,500 – (160) – – – – – – – – (160) – (160) – – – – 64 – – – – – 64 – 64 – – – – – – – – (10,319) – (10,319) – (10,319) – – – – – – – – (7,868) 7,868 – – –
	32,051 586,359 106,329 – 7,697 23,167 4,500 13,425 401,173* 7,868 1,182,569 57,646 1,240,215

Notes
At 1 April 2006
Final 2006 dividend
declared
12
Exchange realignment
recognised directly
in equity
Profit for the year
Total income and
expense for the year
Conversion of
convertible notes
34,
36
Bonus issue
36
Repurchases of shares
36
Placements of shares
36
Share issue expenses
36
Equity-settled share
option arrangements
37
Interim 2007 dividend
12
Proposed final 2007
dividend
12
At 31 March and
1 April 2007
Final 2007 dividend
declared
Exchange realignment
recognised directly
in equity
Profit for the year
Total income and expenses
for the year
Conversion of
convertible notes
34,
36
Exercise of share options
36
Repurchases of shares
36
Share of changes in
reserves of associates
Acquisition of
a subsidiary
39(b)
Capital contribution from
a minority shareholder of
a subsidiary
Issuance of warrants
36
Share issue expenses
36
Equity-settled share
option arrangements
37
Interim 2008 dividend
12
Proposed final 2008
dividend
12
At 31 March 2008

Attributable to equity holders of the parent

Issued
share
capital
Share
premium
account
Contributed
surplus
Equity
component
of
convertible
notes
Share
option
reserve
Exchange
fluctuation
reserve
Warrant
reserve
Other
reserve
Retained
profits
Proposed
final
dividend
Total
Minority
interests
Total
equity
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
HK$’000
22,454
422,291
106,329
6,077
–
–
–
–
266,840
15,718
839,709
464
840,173
–
–
–
–
–
–
–
–
(126)
(15,718)
(15,844)
–
(15,844)
22,454
422,291
106,329
6,077
–
–
–
–
266,714
–
823,865
464
824,329
–
–
–
–
–
378
–
–
–
–
378
–
378
–
–
–
–
–
–
–
–
83,170
–
83,170
8
83,178
–
–
–
–
–
378
–
–
83,170
–
83,548
8
83,556
180
3,822
–
(424)
–
–
–
–
–
–
3,578
–
3,578
2,264
(2,264)
–
–
–
–
–
–
–
–
–
–
–
(1,930)
(43,087)
–
–
–
–
–
–
–
–
(45,017)
–
(45,017)
6,450
174,150
–
–
–
–
–
–
–
–
180,600
–
180,600
–
(5,300)
–
–
–
–
–
–
–
–
(5,300)
–
(5,300)
–
–
–
–
7,633
–
–
–
–
–
7,633
–
7,633
–
–
–
–
–
–
–
–
(7,073)
–
(7,073)
–
(7,073)
–
–
–
–
–
–
–
–
(19,540)
19,540
–
–
–
29,418
549,612
106,329
5,653
7,633
378
–
–
323,271*
19,540
1,041,834
472
1,042,306
–
–
–
–
–
–
–
–
–
(19,540)
(19,540)
–
(19,540)
29,418
549,612
106,329
5,653
7,633
378
–
–
323,271
–
1,022,294
472
1,022,766
–
–
–
–
–
22,789
–
–
–
–
22,789
4,056
26,845
–
–
–
–
–
–
–
–
96,089
–
96,089
525
96,614
–
–
–
–
–
22,789
–
–
96,089
–
118,878
4,581
123,459
2,640
49,712
–
(5,653)
–
–
–
–
–
–
46,699
–
46,699
896
7,798
–
–
–
–
–
–
–
–
8,694
–
8,694
(903)
(20,603)
–
–
–
–
–
–
–
–
(21,506)
–
(21,506)
–
–
–
–
–
–
–
13,425
–
–
13,425
–
13,425
–
–
–
–
–
–
–
–
–
–
–
24,402
24,402
–
–
–
–
–
–
–
–
–
–
–
28,191
28,191
–
–
–
–
–
–
4,500
–
–
–
4,500
–
4,500
–
(160)
–
–
–
–
–
–
–
–
(160)
–
(160)
–
–
–
–
64
–
–
–
–
–
64
–
64
–
–
–
–
–
–
–
–
(10,319)
–
(10,319)
–
(10,319)
–
–
–
–
–
–
–
–
(7,868)
7,868
–
–
–

32,051
586,359
106,329
–
7,697
23,167
4,500
13,425
401,173*
7,868
1,182,569
57,646
1,240,215

* These reserve accounts comprise the consolidated reserves of HK$1,142,650,000 (2007: HK$987,223,000) in the consolidated balance sheet.

– I-6 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Consolidated Cash Flow Statement

Year ended 31 March 2008

Notes CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Finance costs 7 Share of profits and losses of associates Fair value losses/(gains), net: Financial assets at fair value through profit or loss 5, 6 Derivative financial instruments 6 Interest income from unlisted investments 5 Interest income from loans receivable 5 Bank interest income 5 Dividend income from listed securities 5 Gain on disposal a land use right 5 Gain on disposal of subsidiaries 39(c) Recognition of a deferred gain 5 Gain on disposal of financial assets at fair value through profit or loss, net 5 Gain on disposal of investment properties 5 Loss on partial/deemed disposal of an associate 6 Impairment of trade receivables 6 Depreciation 6 Amortisation of other intangible asset 6 Amortisation of prepaid land lease payments 6 Amount provided/(released) for onerous contracts, net 6 Loss/(gain) on disposal and write-off of items of property, plant and equipment 6 Impairment of a land use right 5, 6 Impairment of goodwill 6 Impairment of other receivables 6 Reversal of impairment on trade receivables 25 Written off of trade receivables 25 Fair value gains on revaluation of investment properties, net 16 Equity-settled share option expense 6	2008 HK$’000 122,577 14,906 (27,643) 6,663 2,338 (1,195) (1,046) (8,189) (404) (62,969) – (799) (11,522) – 4,855 – 7,850 6,060 712 3,281 51 9,700 11,558 70 (244) (216) (11,383) 64 65,075	2007 HK’000 96,432 13,828 (4,578) (489) – (2,436) (1,376) (7,116) (267) – (2,524) (3,769) (4,120) (8,000) – 467 5,158 – – (1,566) (163) – – – – – (31,548) 7,633 55,566

– I-7 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes Decrease in inventories Decrease in properties held for sale Increase in properties under development Decrease in trade receivables, prepayments, deposits and other receivables Increase in trade payables Increase/(decrease) in other payables and accruals Decrease in deposits received and receipts in advance Cash generated from operations Profits tax paid Net cash inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Dividend income from listed securities Interest income from unlisted investments Increase in amounts due from associates Increase/(decrease) in amounts due to associates Acquisition of a subsidiary 39(b) Acquisition of a jointly-controlled entity 21 Investment in an associate Proceeds from disposal of a land use right Proceeds from disposal of subsidiaries 39(c) Purchases of investment properties Purchases of property, plant and equipment Purchases of held-to-maturity financial asset Purchases of financial assets at fair value through profit or loss Proceeds from disposal of investment properties Proceeds from disposal of items of property, plant and equipment Receipt of government grant Prepayment of land lease payments Proceeds from disposal of financial assets at fair value through profit or loss	2008 HK$’000 – 211,504 (48,354) 9,723 1,378 75,032 (31,876)	2007 HK’000 55 129,189 (166,638) 25,075 23,136 (13,774) (2,091) 50,518 (3,896) 46,622 7,907 267 2,436 – 814 – (64,560) – – 16,830 (18,642) (3,949) – (51,556) 93,600 1,052 – – 80,213
	282,482 (13,332) 269,150	50,518 (3,896
		46,622
	9,295 404 1,195 (2,099) (81) 3,044 (12,285) (43,756) 240,000 – (201,113) (147,034) (1,943) (83,942) – 1,939 2,217 (345,929) 90,290

– I-8 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes Proceeds from partial disposal of an associate Addition to other intangible asset Deposits paid for the acquisition of investment properties and associates Decrease/(increase) in pledged deposits Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Dividends paid Proceeds from issue of shares upon exercise of share options 36 Proceeds from placements of shares 36 Proceeds from issue of warrants 36 Capital contribution from a minority shareholder of a subsidiary Share issue expenses 36 Repurchases of shares 36 Repayment of bank loans New bank loans Net cash inflow from financing activities NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year Effect of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF YEAR ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances 28 Non-pledged time deposits with original maturity of less than three months when acquired 28	2008 HK$’000 96,050 – (35,674) 78,000	2007 HK’000 – (30,300) – (64,029) (29,917) (20,798) (22,917) – 180,600 – – (5,300) (45,017) (385,804) 373,500 74,264 90,969 297,902 (287) 388,584 135,757 252,827 388,584
	(351,422) (22,339) (29,859) 8,694 – 4,500 28,191 (160) (21,506) (380,760) 428,769 15,530 (66,742) 388,584 8,977	(29,917
		(20,798 (22,917 – 180,600 – – (5,300 (45,017 (385,804 373,500
		74,264
		90,969 297,902 (287
	330,819
	81,307 249,512	135,757 252,827
	330,819

– I-9 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Balance Sheet

31 March 2008

Notes NON-CURRENT ASSETS Interests in subsidiaries 19 Interests in associates 20 Held-to-maturity financial asset 22 Total non-current assets CURRENT ASSETS Prepayments, deposits and other receivables 26 Financial assets at fair value through profit or loss 27 Pledged deposits 28 Cash and cash equivalents 28 Total current assets CURRENT LIABILITIES Other payables and accruals 30 Interest-bearing bank loans 32 Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest-bearing bank loans 32 Convertible notes 34 Total non-current liabilities Net assets EQUITY Issued capital 36 Equity component of convertible notes 34 Reserves 38(b) Total equity	2008 HK$’000 1,191,421 2,089 1,943	2007 HK$’000 710,622 192 –
	1,195,453 980 14,471 – 224,347 239,798 69,644 133,275 202,919 36,879 1,232,332 117,975 – 117,975	710,814
		758 36,927 78,000 312,484
		428,169
		739 137,000
		137,739
		290,430
		1,001,244
		29,750 45,756
		75,506
	1,114,357	925,738

	32,051 – 1,082,306	29,418 5,653 890,667
	1,114,357	925,738

– I-10 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

Wang On Group Limited (the “Company”) is a limited liability company incorporated in Bermuda, and both its head office and principal place of business is located at 5th Floor, Wai Yuen Tong Medicine Building, 9 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong.

During the year, the Company, its subsidiaries and its jointly-controlled entities (collectively referred to as the “Group”) were involved in the following principal activities:

property development
property investment
management and sub-licensing of Chinese wet markets, shopping centres and car parks
operations and management of agricultural by-products wholesale markets

2.1 BASIS OF PREPARATION

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

Basis of consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries and its jointly-controlled entities for the year ended 31 March 2008. Adjustments are made to bring into line any dissimilar accounting policies that may exist. The results of subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date such control ceases. The assets, liabilities, income and expenses of jointly-controlled entities are proportionally consolidated from the date on which joint control is established and obtained by the Group, and continue to be proportionally consolidated until the date such joint control ceases. All significant intercompany transactions and balances within the Group are eliminated on consolidation.

The acquisition of a subsidiary during the year has been accounted for using the purchase method of accounting. This method involves allocating the cost of the business combinations to the fair value of the identifiable assets acquired, and liabilities and contingent liabilities assumed at the date of acquisition. The cost of the acquisition is measured at the aggregate of the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

Minority interests represent the interests of outside shareholders not held by the Group in the results and net assets of the Company’s subsidiaries.

2.2 IMPACT OF NEW AND REVISED HKFRSs

The Group has adopted the following new and revised HKFRSs for the first time for the current year’s financial statements. Except for in certain cases, giving rise to new and revised accounting policies and additional disclosures, the adoption of these new and revised standards and interpretations has had no material effect on these financial statements.

– I-11 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

HKFRS 7 Financial Instruments: Disclosures HKAS 1 Amendment Capital Disclosures HK(IFRIC)-Int 8 Scope of HKFRS 2 HK(IFRIC)-Int 9 Reassessment of Embedded Derivatives HK(IFRIC)-Int 10 Interim Financial Reporting and Impairment HK(IFRIC)-Int 11 HKFRS 2 – Group and Treasury Share Transactions

The principal effects of adopting these new and revised HKFRSs are as follows:

(a) HKFRS 7 Financial Instruments: Disclosures

This standard requires disclosures that enable users of the financial statements to evaluate the significance of the Group’s financial instruments and the nature and extent of risks arising from those financial instruments. The new disclosures are included throughout the financial statements. While there has been no effect on the financial position or results of operations of the Group, comparative information has been included/revised where appropriate.

(b) Amendment to HKAS 1 Presentation of Financial Statements – Capital Disclosures

This amendment requires the Group to make disclosures that enable users of the financial statements to evaluate the Group’s objectives, policies and processes for managing capital. These new disclosures are shown in note 44 to the financial statements.

(c) HK(IFRIC)-Int 8 Scope of HKFRS 2

This interpretation requires HKFRS 2 to be applied to any arrangement in which the Group cannot identify specifically some or all of the goods or services received, for which equity instruments are granted or liabilities (based on a value of the Group’s equity instruments) are incurred by the Group for a consideration, and which appears to be less than the fair value of the equity instruments granted or liabilities incurred. As the Company has only issued equity instruments to the Group’s employees in accordance with the Group’s share option scheme, the interpretation has had no effect on these financial statements.

(d) HK(IFRIC)-Int 9 Reassessment of Embedded Derivatives

This interpretation requires that the date to assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative is the date that the Group first becomes a party to the contract, with reassessment only if there is a change to the contract that significantly modifies the cash flows. As the Group’s existing policy of accounting for derivatives complies with the requirements of the interpretation, the interpretation has had no material impact on the financial position or results of operations of the Group.

(e) HK(IFRIC)-Int 10 Interim Financial Reporting and Impairment

The Group has adopted this interpretation as of 1 April 2007, which requires that an impairment loss recognised in a previous interim period in respect of goodwill or an investment in either an equity instrument classified as available for sale or a financial asset carried at cost is not subsequently reversed. As the Group had no impairment losses previously reversed in respect of such assets, the interpretation has had no impact on the financial position or results of operations of the Group.

(f) HK(IFRIC)-Int 11 HKFRS 2 – Group and Treasury Share Transactions

This interpretation requires arrangements whereby an employee is granted rights to the Group’s equity instruments, to be accounted for as an equity-settled scheme, even if the Group acquires the instruments from another party, or the shareholders provide the equity instruments needed. This interpretation also addresses the accounting for share-based payment transactions involving two or more entities within the Group. As the Group’s current policy for share-based payment transactions aligns with the requirements of the interpretation, the interpretation has had no effect on these financial statements.

– I-12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2.3 IMPACT OF ISSUED BUT NOT YET EFFECTIVE HKFRSs

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

HKFRS 2 Amendments Share-based Payment – Vesting Conditions and Cancellations[1] HKFRS 3 (Revised) Business Combinations[4] HKFRS 8 Operating Segments[1] HKAS 1 (Revised) Presentation of Financial Statements[1] HKAS 23 (Revised) Borrowing Costs[1] HKAS 27 (Revised) Consolidated and Separate Financial Statements[4] HKAS 32 and HKAS 1 Puttable Financial Instruments and Obligations Arising on Liquidation[1] Amendments HK(IFRIC)-Int 12 Service Concession Arrangements[3] HK(IFRIC)-Int 13 Customer Loyalty Programmes[2] HK(IFRIC)-Int 14 HKAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction[3]

1 Effective for annual periods beginning on or after 1 January 2009
2 Effective for annual periods beginning on or after 1 July 2008
3 Effective for annual periods beginning on or after 1 January 2008
4 Effective for annual periods beginning on or after 1 July 2009

HKFRS 2 has been amended to restrict the definition of “vesting condition” to a condition that includes an explicit or implicit requirement to provide services. Any other conditions are non-vesting conditions, which have to be taken into account to determine the fair value of the equity instruments granted. In the case that the award does not vest as the result of a failure to meet a non-vesting condition that is within the control of either the entity or the counterparty, this must be accounted for as a cancellation. The Group has not entered into share-based payment schemes with non-vesting conditions attached and, therefore, does not expect significant implications on its accounting for share-based payments.

HKFRS 3 has been revised to introduce a number of changes in the accounting for business combinations that will have impact on the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results.

HKAS 27 has been revised to require a change in the ownership interest of a subsidiary is accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary.

The changes introduced by HKFRS 3 (revised) and HKAS 27 (revised) must be applied prospectively and will affect future acquisitions and transactions with minority interests.

HKFRS 8, which will replace HKAS 14 Segment Reporting , specifies how an entity should report information about its operating segments, based on information about the components of the entity that is available to the chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The standard also requires the disclosure of information about the products and services provided by the segments, the geographical areas in which the Group operates, and revenue from the Group’s major customers. The Group expects to adopt HKFRS 8 from 1 April 2009.

HKAS 1 has been revised to introduce changes in presentation and disclosures of financial statements and does not change the recognition, measurement or disclosure of specific transactions and other events required by other HKFRSs.

– I-13 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

HKAS 23 has been revised to require capitalisation of borrowing costs when such costs are directly attributable to the acquisition, construction or production of a qualifying asset. As the Group’s current policy for borrowing costs aligns with the requirements of the revised standard, the revised standard is unlikely to have any financial impact on the Group.

HKAS 32 and HKAS 1 Amendments have been revised to require puttable financial instruments and instruments or components of instruments that impose on the entity an obligation to deliver to another party a pro rata rate of the share of the net assets of the entity only on liquidation to be classified as equity. The Group expects to adopt HKAS 32 and HKAS 1 Amendments from 1 April 2009.

HK(IFRIC)-Int 12 requires an operator under public-to-private service concession arrangements to recognise the consideration received or receivable in exchange for the construction services as a financial asset and/or an intangible asset, based on the terms of the contractual arrangements. HK(IFRIC)-Int 12 also addresses how an operator shall apply existing HKFRSs to account for the obligations and the rights arising from service concession arrangements by which a government or a public sector entity grants a contract for the construction of infrastructure used to provide public services and/or for the supply of public services. As the Group currently has no such arrangements, the interpretation is unlikely to have any financial impact on the Group.

HK(IFRIC)-lnt 13 requires that loyalty award credits granted to customers as part of a sales transaction are accounted for as a separate component of the sales transaction. The consideration received in the sales transaction is allocated between the loyalty award credits and the other components of the sale. The amount allocated to the loyalty award credits is determined by reference to their fair value and is deferred until the awards are redeemed or the liability is otherwise extinguished.

HK(IFRIC)-lnt 14 addresses how to assess the limit under HKAS 19 Employee Benefits, on the amount of a refund or a reduction in future contributions in relation to a defined benefit scheme that can be recognised as an asset, in particular, when a minimum funding requirement exists.

As the Group currently has no customer loyalty award credits and defined benefit scheme, HK(IFRIC)-Int 13 and HK(IFRIC)-Int 14 are not applicable to the Group and therefore are unlikely to have any financial impact on the Group.

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Subsidiaries

A subsidiary is an entity whose financial and operating policies the Company controls, directly or indirectly, so as to obtain benefits from its activities.

The results of subsidiaries are included in the Company’s income statement to the extent of dividends received and receivable. The Company’s interests in subsidiaries are stated at cost less any impairment losses.

Joint ventures

A joint venture is an entity set up by contractual arrangement, whereby the Group and other parties undertake an economic activity. The joint venture operates as a separate entity in which the Group and the other parties have an interest.

The joint venture agreement between the venturers stipulates the capital contributions of the joint venture parties, the duration of the joint venture entity and the basis on which the assets are to be realised upon its dissolution. The profits and losses from the joint venture’s operations and any distributions of surplus assets are shared by the venturers, either in proportion to their respective capital contributions, or in accordance with the terms of the joint venture agreement.

– I-14 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

A joint venture is treated as:

(a) a subsidiary, if the Group has unilateral control, directly or indirectly, over the joint venture;
(b) a jointly-controlled entity, if the Group does not have unilateral control, but has joint control, directly or indirectly, over the joint venture;
(c) an associate, if the Group does not have unilateral or joint control, but holds, directly or indirectly, generally not less than 20% of the joint venture’s registered capital and is in a position to exercise significant influence over the joint venture; or
(d) an equity investment accounted for in accordance with HKAS 39, if the Group holds, directly or indirectly, less than 20% of the joint venture’s registered capital and has neither joint control of, nor is in a position to exercise significant influence over, the joint venture.

Jointly-controlled entities

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

The Group’s interests in its jointly-controlled entities are accounted for by proportionate consolidation, which involves recognising its share of the jointly-controlled entities’ assets, liabilities, income and expenses with similar items in the consolidated financial statements on a line-by-line basis. Unrealised gains and losses resulting from transactions between the Group and its jointly-controlled entities are eliminated to the extent of the Group’s interests in the jointly-controlled entities, except where unrealised losses provide evidence of an impairment of the asset transferred.

Gain or loss arising from assets contributed or sold by the Group to its jointly-controlled entities recognised in the consolidated income statement to the extent that such gain or loss is attributable to the interests of other venturers when significant risks and rewards of ownership of the assets have been passed to the jointly-controlled entities and the assets are retained by the jointly-controlled entities.

Associates

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

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

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

Deferred gain represents the unrealised profit resulting from downstream transactions with an associate eliminated to the extent of the Group’s interest in that associate. Deferred gain is recognised in the consolidated balance sheet as part of the Group’s interests in associates.

Goodwill

Goodwill arising on the acquisition of subsidiaries, associates and a jointly-controlled entity represents the excess of the cost of the business combination over the Group’s interest in the net fair value of the acquirees’ identifiable assets acquired, and liabilities and contingent liabilities assumed as at the date of acquisition.

– I-15 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Goodwill arising on acquisition is recognised in the consolidated balance sheet as an asset, initially measured at cost and subsequently at cost less any accumulated impairment losses. In the case of associates and jointly-controlled entities, goodwill is included in the carrying amount thereof, rather than as a separately identified asset on the consolidated balance sheet.

The carrying amount of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31 March.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

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

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

Goodwill previously eliminated against consolidated reserves

Prior to the adoption the HKICPA’s Statement of Standard Accounting Practice 30 “Business Combinations” (“SSAP 30”) in 2001, goodwill arising on acquisition was eliminated against consolidated reserves in the year of acquisition. On the adoption of HKFRS 3, such goodwill remains eliminated against the consolidated reserves and is not recognised in the income statement when all or part of the business to which the goodwill relates is disposed of or when a cash-generating unit to which the goodwill relates becomes impaired.

Excess over the cost of business combinations

Any excess of the Group’s interest in the net fair value of the acquirees’ identifiable assets, liabilities and contingent liabilities over the cost of acquisition of subsidiaries and associates (previously referred to as negative goodwill), after reassessment, is recognised immediately in the income statement.

The excess for associates is included in the Group’s share of the associates’ profit or loss in the period in which the investments are acquired.

Impairment of non-financial assets other than goodwill

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

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

– I-16 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

Intangible assets (other than goodwill)

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each balance sheet date.

Marketplace operating right

Purchased marketplace operating right is stated at cost less any impairment losses and is amortised on the straight-line basis over its estimated useful life of five years.

Related parties

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

(a) the party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or is under common control with, the Group; (ii) has an interest in the Group that gives it significant influence over the Group; or (iii) has joint control over the Group;
(b) the party is an associate;
(c) the party is a jointly-controlled entity;
(d) the party is a member of the key management personnel of the Group or its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or
(g) the party is a post-employment benefit plan for the benefit of the employees of the Group, or of any entity that is a related party of the Group.

Property, plant and equipment and depreciation

Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the income statement in the period in which it is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of property, plant and equipment, and where the cost of the item can be measured reliably, the expenditure is capitalised as an additional cost of that asset or as a replacement.

– I-17 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

Building 5% Leasehold improvements 15% – 33% or over the lease term Plant and machinery 15% – 50% Furniture, fixtures and office equipment 15% – 50% Motor vehicles 20% Computer equipment 15% – 33%

Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately.

Residual values, useful lives and the depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date.

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

Construction in progress represents an agricultural by-products wholesale market under construction, which is stated at cost less any impairment losses, and is not depreciated. Cost comprises land costs, the direct costs of construction and capitalised borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassified to the appropriate category of property, plant and equipment or investment properties when completed and ready for use.

Investment properties

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

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

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

Operating leases

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

Prepaid land lease payments under operating leases are initially stated at cost and subsequently recognised on the straight-line basis over the lease terms.

– I-18 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Properties under development

Properties under development represent properties developed for sale and are stated at the lower of cost and net realisable value. Cost comprises prepaid land lease payments together with borrowing costs, professional fees and any other direct costs attributable to the development of the properties incurred during the development period.

Properties under development which have been pre-sold and/or are expected to be completed within 12 months from the balance sheet date are classified as current assets.

Properties held for sale

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

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised.

Investments and other financial assets

Financial assets in the scope of HKAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables and held to maturity investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

The Group assesses whether a contract contains an embedded derivative when the Group first becomes a party to it and assesses whether an embedded derivative is separated from the host contract when the analysis shows that the economic characteristics and risks of the embedded derivative is not closely related to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at the balance sheet date.

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

– I-19 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of sale in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments or financial guarantee contracts. Gains or losses on these financial assets are recognised in the income statement. The net fair value gain or loss recognised in the income statement does not include any dividends on these financial assets, which are recognised in accordance with the policy set out for “Revenue recognition” below.

Financial assets may be designated upon initial recognition as at fair value through profit or loss if the following criteria are met: (i) the designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or recognising gains or losses on them on a different basis; (ii) the assets are part of a group of financial assets which are managed and their performance evaluated on a fair value basis, in accordance with a documented risk management strategy; or (iii) the financial asset contains an embedded derivative that would need to be separately recorded.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are subsequently carried at amortised cost using the effective interest method less any allowance for impairment. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction costs. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Held to maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held to maturity when the Group has the positive intention and ability to hold to maturity. Held-to-maturity investments are subsequently measured at amortised cost less any allowance for impairment. Amortised cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. Gains and losses are recognised in the income statement when the investments are derecognised or impaired, as well as through the amortisation process.

Fair value

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business at the balance sheet date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; a discounted cash flow analysis; and option pricing models.

Impairment of financial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or a group of financial assets is impaired.

Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through the use of an allowance account. The amount of the impairment loss is recognised in the income statement. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery.

– I-20 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting the allowance account. Any subsequent reversal of an impairment loss is recognised in the income statement, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

In relation to trade and other receivables, a provision for impairment is made when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor and significant changes in the technological, market economic or legal environment that have an adverse effect on the debtor) that the Group will not be able to collect all of the amounts due under the original terms of an invoice. The carrying amount of the receivables is reduced through the use of an allowance account. Impaired debts are derecognised when they are assessed as uncollectible.

Assets carried at cost

If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Impairment losses on these assets are not reversed.

Derecognition of financial assets

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

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

Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, where the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

– I-21 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Financial liabilities at amortised cost (including interest-bearing loans and borrowings)

Financial liabilities including trade and other payables and interest-bearing loans and borrowings are initially stated at fair value less directly attributable transaction costs and are subsequently measured at amortised cost, using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost. The related interest expense is recognised within “finance costs” in the income statement.

Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the amortisation process.

Financial guarantee contracts

Financial guarantee contracts in the scope of HKAS 39 are accounted for as financial liabilities. A financial guarantee contract is recognised initially at its fair value less transaction costs that are directly attributable to the acquisition or issue of the financial guarantee contract, except when such contract is recognised at fair value through profit or loss. Subsequent to initial recognition, the Group measures the financial guarantee contract at the higher of: (i) the amount determined in accordance with HKAS 37 Provisions, Contingent Liabilities and Contingent Assets; and (ii) the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with HKAS 18 Revenue.

Convertible notes

The component of convertible notes that exhibits characteristics of a liability is recognised as a liability in the balance sheet, net of transaction costs. On issuance of convertible notes, the fair value of the liability component is determined using a market rate for an equivalent non-convertible note; and this amount is carried as a long term liability on the amortised cost basis until extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in shareholders’ equity, net of transaction costs. The carrying amount of the conversion option is not remeasured in subsequent years.

Transaction costs are apportioned between the liability and equity components of the convertible notes based on the allocation of proceeds to the liability and equity components when the instruments are initially recognised.

Derecognition of financial liabilities

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

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

Derivative financial instruments

The Group uses derivative financial instruments such as equity accumulator contracts. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Any gains or losses arising from changes in fair value on derivatives are taken directly to the income statement.

The fair value of equity accumulator contracts is calculated by reference to equity prices of the underlying instruments.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out basis. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

– I-22 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Cash and cash equivalents

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

For the purpose of the balance sheets, cash and cash equivalents comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, which are not restricted as to use.

Provisions

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognised for a provision is the present value at the balance sheet date of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in the income statement.

Provision for onerous contracts represents provision for lease contracts for certain Hong Kong properties and projects where the unavoidable costs of meeting the obligations under the contracts exceed the economic benefits expected to be received under them. Provisions for onerous contracts are recognised based on the difference between the rental payments receivable by the Group and those unavoidable rental payments payable by the Group under the contracts, together with any compensation or penalties arising from the failure to fulfill the contracts, discounted to their present value as appropriate.

Income tax

Income tax comprises current and deferred tax. Income tax is recognised in the income statement, or in equity if it relates to items that are recognised in the same or a different period directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities.

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

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

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

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

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

– I-23 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Conversely, previously unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

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

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

Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to the income statement over the expected useful life of the relevant asset by equal annual instalments.

Revenue recognition

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

(a) rental and sub-licensing fee income, on a time proportion basis over the lease terms; (b) from the provision of services, when the services are rendered; (c) from the sale of goods, when the significant risks and rewards of ownership have been transferred to the buyer, provided that the Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold;
(d) from the sale of properties, when the sale agreement becomes unconditional; (e) interest income, on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset;
(f) on the trading of securities, on the date when the transaction takes place; and (g) dividend income, where the shareholders’ right to receive payment has been established.

– I-24 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Employee benefits

Pension schemes

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

The employees of the Group’s subsidiaries and jointly-controlled entities in Mainland China are required to participate in a central pension scheme (the “PRC Pension Scheme”) operated by the local municipal government. The subsidiaries and jointly-controlled entities are required to contribute certain percentage of their payroll costs to the PRC Pension Scheme. The only obligation of the Group with respect to the PRC Pension Scheme is to pay the ongoing contributions under the PRC Pension Scheme. The contributions are charged to the income statement as they become payable in accordance with the rules of the PRC Pension Scheme.

Share-based payment transactions

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

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an external valuer using a binomial model, further details of which are given in note 37 to the financial statements. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company (“market conditions”), if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the “vesting date”). The cumulative expense recognised for equity-settled transactions at each balance sheet date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the income statement for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period.

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

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

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

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

– I-25 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Dividends

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

Interim dividends are simultaneously proposed and declared, because by-law 140 of the Company’s bye-laws grants the directors the authority to declare interim dividends. Consequently, interim dividends are recognised immediately as a liability when they are proposed and declared.

Foreign currencies

These financial statements are presented in Hong Kong dollars, which is the Company’s functional and presentation currency. Each entity in the Group determines their own functional currencies and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions are initially recorded using the functional currency rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange ruling at the balance sheet date. All differences are taken to the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

The functional currencies of certain overseas subsidiaries, jointly-controlled entities and an associate are currencies other than the Hong Kong dollar. As at the balance sheet date, the assets and liabilities of these entities are translated into the presentation currency of the Company at the exchange rates ruling at the balance sheet date and, their income statements are translated into Hong Kong dollars at the weighted average exchange rates for the year. The resulting exchange differences are included in a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the income statement.

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

3. SIGNIFICANT ACCOUNTING JUDGEMENT AND ESTIMATES

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

Judgement

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

Operating lease commitments – Group as lessor

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

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

– I-26 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill at 31 March 2008 was HK$7,820,000 (2007: HK$12,037,000). More details are given in note 18.

Impairment of non-financial assets (other than goodwill)

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

Impairment of properties under development

The Group assessed the recoverable amount of each property under development based on its value in use or net selling price, depending on the anticipated future plans for the property. Estimating the value in use of an asset involves estimating the future cash flows to be derived from continuing use of the asset and from its ultimate disposal and applying the appropriate discount rate to these future cash flows.

The carrying amount of properties under development at 31 March 2008 was HK$288,405,000 (2007: HK$470,680,000) (note 17).

Estimation of fair value of investment properties

In the absence of current prices in an active market for similar properties, the Group considers information from a variety of sources, including:

(a) current prices in an active market for properties of a different nature, condition or location (or subject to different leases or other contracts), adjusted to reflect those differences;
(b) recent prices of similar properties on less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices; and
(c) discounted cash flow projections based on reliable estimates of future cash flows, supported by the terms of any existing lease and other contracts and (when possible) by external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

The principal assumptions for the Group’s estimation of the fair value include those related to current market rents for similar properties in the same location and condition, appropriate discount rates, expected future market rents and future maintenance costs.

The carrying amount of investment properties at 31 March 2008 was HK$555,199,000 (2007: HK$315,143,000) (note 16).

Useful lives and impairment of property, plant and equipment

The Group’s management determines the estimated useful lives and related depreciation charges for its items of property, plant and equipment. This estimate is based on the historical experience of the actual useful lives of items of property, plant and equipment of similar nature and functions. It could change significantly as a result of technical innovations and its competitor actions. Management will increase the depreciation charge where useful lives are less than previously estimates, or it will write off or write down technically obsolete assets that have been abandoned.

– I-27 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The carrying value of an item of property, plant and equipment is reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable in accordance with the accounting policy as disclosed in the relevant part of this section. The recoverable amount of an item of property, plant and equipment is calculated as the higher of its fair value less costs to sell and value in use, the calculations of which involve the use of estimates.

Deferred tax assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The carrying value of deferred tax assets relating to recognised tax losses was HK$3,062,000 (2007: HK$2,733,000) as at 31 March 2008. Further details are contained in note 35 to the financial statements.

Allowance on trade and other receivables

The provision policy for doubtful debts of the Group is based on the ongoing evaluation of the collectibility and aged analysis of the outstanding receivables and on management’s estimation. A considerable amount of judgement is required in assessing the ultimate realisation of these receivables, including the creditworthiness and the past collection history of each customer. If the financial conditions of the customers of the Group were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

PRC corporate income tax (“CIT”)

The Group is subject to income taxes in the People’s Republic of China (the “PRC”). As a result of the fact that certain matters relating to the income taxes have not been confirmed by the local tax bureau, objective estimate and judgement based on currently enacted tax laws, regulations and other related policies are required in determining the provision for income taxes to be made. Where the final tax outcome of these matters is different from the amounts originally recorded, the differences will impact on the income tax and tax provisions in the period in which the differences realise.

4. SEGMENT INFORMATION

Segment information is presented by way of two segment formats: (i) on a primary segment reporting basis, by business segment; and (ii) on a secondary segment reporting basis, by geographical segment.

The Group’s operating businesses are structured and managed separately, according to the nature of their operations and the products and services they provide. Each of the Group’s business segments represents a strategic business unit that offers products and services which are subject to risks and returns that are different from those of the other business segments. Summary details of the business segments are as follows:

(a) the property development segment engages in the development of properties;
(b) the property investment segment invests in industrial and commercial premises and residential units for rental income;
(c) the Chinese wet markets segment engages in the management and sub-licensing of Chinese wet markets;
(d) the shopping centres and car parks segment engages in the management and sub-licensing of shopping centres and car parks;
(e) the agricultural by-products wholesale markets segment engages in the operations and management of agricultural by-products wholesale markets; and
(f) the corporate and others segment comprises the Group’s management service business. This segment also includes corporate income and expense items.

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

– I-28 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(a) Business segments

The following tables present revenue, profit/(loss) and certain asset, liability and expenditure information for the Group’s business segments for the years ended 31 March 2008 and 2007.

Prop develo 2008 HK$’000 302,998 9,848 8	erty pment 2007 HK$’000 242,242 – 7	Property i 2008 HK$’000 22,826 – 9,614	nvestment 2007 HK$’000 42,090 2,772 39,945	Chinese w 2008 HK$’000 170,742 – 5,600	et markets 2007 HK$’000 144,048 4,091 2,616	Shop centr car p 2008 HK$’000 12,893 440 515	ping es and arks 2007 HK$’000 27,262 791 1,038	Agric by-pr wholesale 2008 HK$’000 34,395 – 4,740	ultural oducts markets 2007 HK$’000 – – 379	Unall corp and o 2008 HK$’000 2,028 9,696 80,358	ocated orate thers 2007 HK$’000 43,846 1,854 18,773	Elimin 2008 HK$’000 – (19,984) (2,553)	ations 2007 HK$’000 – (9,508) (1,975)	Conso 2008 HK$’000 545,882 – 98,282	lidated 2007 HK$’000 499,488 – 60,783
312,854	242,249	32,440	84,807	176,342	150,755	13,848	29,091	39,135	379	92,082	64,473	(22,537)	(11,483)	644,164	560,271

49,565	28,205	26,590	48,472	13,478	31,028	2,283	3,688	(583)	(9,309)	11,050	7,334	(2,973)	2,089	99,410	111,507

														– 10,430 (14,906) 27,643	(16,753) 10,928 (13,828) 4,578
														122,577 (25,963)	96,432 (13,254)
														96,614	83,178

Property development Property investment Chinese wet markets Shopping centres and car parks Agricultural by-products wholesale markets Unallocated corporate and others Eliminations 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Assets and liabilities Segment assets 751,325 575,474 436,214 394,268 204,092 108,870 47,072 52,488 432,077 54,028 2,462,613 2,103,447 (2,611,586) (1,878,458) Interests in associates – – – – – – – – – – 305,825 321,364 – – Deferred tax assets 3,062 2,171 244 – 1,036 562 – – – – – – – – Total assets Segment liabilities 570,813 317,630 292,567 222,581 203,920 131,183 15,030 17,649 352,326 68,651 1,386,003 1,247,362 (2,611,586) (1,878,458) Interest-bearing bank loans 150,650 242,050 94,904 88,528 – 896 – – 49,429 – 251,250 166,750 – – Tax payable 9,433 7,173 949 478 845 3,667 210 2,026 2,079 – 14,311 2,532 – – Convertible notes – – – – – – – – – – – 45,756 – – Deferred tax liabilities – – 8,593 5,454 – – – – – – 33 – – – Total liabilities Other segment information: Depreciation and amortisation 796 4 12 12 6,734 3,693 11 491 6,669 6 840 952 – – Impairment losses recognised in the income statement 14,925 – – – – – 70 – – – 6,333 – – – Capital expenditure 181,641 30 118,357 18,752 16,653 2,077 – 17 210,128 30,764 1,392 1,361 – –	Conso 2008 HK$’000 1,721,807 305,825 4,342	lidated 2007 HK$’000 1,410,117 321,364 2,733
	2,031,974	1,734,214

	209,073 546,233 27,827 – 8,626	126,598 498,224 15,876 45,756 5,454
	791,759	691,908

	15,062 21,328 528,171	5,158 – 53,001

– I-29 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Geographical segments

The following table presents revenue and certain asset and expenditure information for the Group’s geographical segments for the year ended 31 March 2008 and 2007.

Segment revenue: Sales to external customers Other segment information: Segment assets Capital expenditure	Hong Kong 2008 2007 HK$’000 HK$’000 496,331 494,673 3,775,697 3,544,096 135,886 51,656	Mainland China Eliminations 2008 2007 2008 2007 HK$’000 HK$’000 HK$’000 HK$’000 49,551 4,815 – – 867,863 68,576 (2,611,586) (1,878,458) 392,285 1,345 – –	Consolidated 2008 2007 HK$’000 HK$’000 545,882 499,488 2,031,974 1,734,214 528,171 53,001	Consolidated 2008 2007 HK$’000 HK$’000 545,882 499,488 2,031,974 1,734,214 528,171 53,001

				1,734,214 53,001

5. REVENUE, OTHER INCOME AND GAINS

Revenue, which is also the Group’s turnover, represents sub-licensing and management fee income received and receivable; the invoiced value of goods sold, after allowances for returns and trade discounts; the invoiced value of services rendered; the gross rental income received and receivable from investment properties and proceeds from the sale of properties during the year.

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

Revenue Sub-licensing fee income Property management fee income Sale of goods Rendering of services Gross rental income Sale of properties Other income Bank interest income Interest income from unlisted investments Interest income from loans receivable Dividend income from listed securities Management fee income Others	Group 2008 2007 HK$’000 HK$’000 145,024 155,084 16,609 16,228 22,606 40,092 3,781 3,752 43,366 10,603 314,496 273,729 545,882 499,488	Group 2008 2007 HK$’000 HK$’000 145,024 155,084 16,609 16,228 22,606 40,092 3,781 3,752 43,366 10,603 314,496 273,729 545,882 499,488
		499,488

	8,189 1,195 1,046 404 2,190 5,757 18,781	7,116 2,436 1,376 267 1,116 4,481
		16,792

– I-30 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Gains Gain on disposal of a land use right Gain on disposal of financial assets at fair value through profit or loss, net Fair value gains on financial assets at fair value through profit or loss, net Exchange gains, net Recognition of a deferred gain Gain on disposal and write-off of items of property, plant and equipment Gain on disposal of investment properties Other income and gains	Group 2008 2007 HK$’000 HK$’000 62,969 – 11,522 4,120 – 489 3,242 4,306 799 3,769 16 163 – 8,000 78,548 20,847 97,329 37,639	Group 2008 2007 HK$’000 HK$’000 62,969 – 11,522 4,120 – 489 3,242 4,306 799 3,769 16 163 – 8,000 78,548 20,847 97,329 37,639
		20,847
		37,639

6. PROFIT BEFORE TAX

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

Notes Auditors’ remuneration Cost of inventories sold Cost of services provided Cost of properties sold Depreciation 14 Less: Government grants released# Minimum lease payments under operating leases for land and buildings Amortisation of prepaid land lease payments 15 Amortisation of other intangible asset 23 Employee benefits expense (including directors’ remuneration – note 8): Wages and salaries Pension scheme contributions Equity-settled share option expense	Group 2008 2007 HK$’000 HK$’000 2,700 1,900 17,016 24,522 156,037 137,665 211,504 218,304 8,290 5,158 (440) –	Group 2008 2007 HK$’000 HK$’000 2,700 1,900 17,016 24,522 156,037 137,665 211,504 218,304 8,290 5,158 (440) –
	7,850 90,586 712 6,060 61,920 2,992 64 64,976	5,158
		94,697 – – 53,907 1,642 7,633
		63,182

– I-31 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

		Group
		2008	2007
	Notes	HK$’000	HK$’000
Fair value losses/(gains) net:
Financial assets at fair value through
profit or loss*		6,663	(489)
Derivative financial instruments*		2,338	–
Compensation paid to a minority shareholder of
a subsidiary*		9,971	–
Impairment of trade receivables*	25	–	467
Impairment of goodwill*	18	11,558	–
Impairment of a land use right*	15	9,700	–
Impairment of other receivables*		70	–
Loss on disposal of items of property, plant and
equipment*		67	–
Loss on partial/deemed disposal of an associate*		4,855	–
Amount provided/(released) for onerous
contracts, net	33	3,281	(1,566)
Net rental income		(8,951)	(10,480)

The expenses are included in “Other expenses” on the face of the consolidated income statement.

Certain government grants have been received for renovating and upgrading certain Chinese wet markets operated by the Group’s jointly-controlled entity in Shenzhen, the PRC. The government grants released have been deducted from the depreciation cost to which they relate. Government grants received for which related expenditure has not yet been undertaken are included in deferred income under other payables and accruals in the balance sheet. There are no unfulfilled conditions or contingencies relating to these grants.

7. FINANCE COSTS

Interest on convertible notes (note 34) Interest on bank loans and overdrafts Total interest expense on financial liabilities not at fair value through profit or loss Less: Interest capitalised	Group 2008 2007 HK$’000 HK$’000 1,144 2,966 24,490 21,682 25,634 24,648 (10,728) (10,820) 14,906 13,828	Group 2008 2007 HK$’000 HK$’000 1,144 2,966 24,490 21,682 25,634 24,648 (10,728) (10,820) 14,906 13,828
	25,634 (10,728)	24,648 (10,820
	14,906

– I-32 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

8. DIRECTORS’ REMUNERATION

Directors’ remuneration for the year, disclosed pursuant to the Rules Governing the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) and Section 161 of the Hong Kong Companies Ordinance, is as follows:

Fees Other emoluments for executive directors: Salaries, allowances and benefits in kind Performance related bonuses* Employee share option benefits Pension scheme contributions	Group 2008 2007 HK$’000 HK$’000 771 845 10,067 9,499 1,944 1,413 12 – 84 81 12,107 10,993 12,878 11,838	Group 2008 2007 HK$’000 HK$’000 771 845 10,067 9,499 1,944 1,413 12 – 84 81 12,107 10,993 12,878 11,838
		9,499 1,413 – 81
		10,993
		11,838

Certain executive directors of the Company are entitled to bonus payments which are based on the performance of the Group.

During the year, a director was granted share options, in respect of his services to the Group, under the share option scheme of the Company, further details of which are set out in note 37 to the financial statements. The fair value of such options which has been recognised in the income statement over the vesting period, was determined as at the date of grant and the amount included in the financial statements for the current year is included in the above director’s remuneration disclosures.

– I-33 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Executive directors and independent non-executive directors

Fees HK$’000 – – –	Salaries, allowances and benefits in kind HK$’000 4,030 4,094 1,943	Performance related bonuses HK$’000 336 240 1,368	Employee share option benefits Pension scheme contributions Total remuneration HK$’000 HK$’000 HK$’000 – 12 4,378 – 12 4,346 12 60 3,383	Employee share option benefits Pension scheme contributions Total remuneration HK$’000 HK$’000 HK$’000 – 12 4,378 – 12 4,346 12 60 3,383	Employee share option benefits Pension scheme contributions Total remuneration HK$’000 HK$’000 HK$’000 – 12 4,378 – 12 4,346 12 60 3,383
– 297 217 117 140 771	10,067 – – – – –	1,944 – – – – –	12 – – – – –	84 – – – – –	12,107
					297 217 117 140
					771
771 Fees HK$’000 – – –	10,067 Salaries, allowances and benefits in kind HK$’000 3,894 4,029 1,576	1,944 Performance related bonuses HK$’000 324 232 857	12 84 12,878 Employee share option benefits Pension scheme contributions Total remuneration HK$’000 HK$’000 HK$’000 – 12 4,230 – 12 4,273 – 57 2,490		12,878

– 313 240 140 152 845	9,499 – – – – –	1,413 – – – – –	– – – – – –	81 – – – – –	10,993
					313 240 140 152
					845
845	9,499	1,413	–	81	11,838

There was no arrangement under which a director waived or agreed to waive any remuneration during the

year.

– I-34 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

9. FIVE HIGHEST PAID EMPLOYEES

The five highest paid employees during the year included three (2007: three) directors, details of whose remuneration are disclosed in note 8 above. Details of the remuneration of the remaining two (2007: two) non-director, highest paid employees for the year are as follows:

Salaries and allowances Performance related bonuses Employee share option benefits Pension scheme contributions	Group 2008 2007 HK$’000 HK$’000 2,199 3,043 333 224 4 898 24 24 2,560 4,189	Group 2008 2007 HK$’000 HK$’000 2,199 3,043 333 224 4 898 24 24 2,560 4,189
		4,189

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

HK$1,000,001 to HK$1,500,000 HK$1,500,001 to HK$2,000,000 HK$2,000,001 to HK$2,500,000	Number of employees 2008 2007 2 – – 1 – 1 2 2	Number of employees 2008 2007 2 – – 1 – 1 2 2
		2

During the year, share options were granted to the non-director, highest paid employees, in respect of their services to the Group, under the share option scheme of the Company, further details of which are set out in note 37 to the financial statements. The fair value of such options which has been recognised in the income statement over the vesting period, was determined as at the date of grant and the amount included in the financial statements for the current year is included in the above remuneration disclosures.

10. TAX

Hong Kong profits tax has been provided at the rate of 17.5% (2007: 17.5%) on the estimated assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

Group: Current – Hong Kong Charge for the year Overprovision in prior years Current – PRC Charge for the year Deferred (note 35) Total tax charge for the year	2008 HK$’000 24,645 (1,297) 1,052 1,563 25,963	2007 HK$’000 15,249 (2,243) 137 111
		13,254

– I-35 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

A reconciliation of the tax expense applicable to profit before tax using the statutory rates for the jurisdictions in which the Company and the majority of its subsidiaries and jointly-controlled entities are domiciled to the tax expense at the effective tax rate is as follows:

Profit before tax Tax at the statutory tax rates of different jurisdictions Lower tax rate for specific provinces or local authority Adjustments in respect of current tax of previous periods Profits and losses attributable to associates Income not subject to tax Expenses not deductible for tax Tax losses utilised from previous periods Tax losses not recognised Others Tax charge at the Group’s effective rate	Group 2008 2007 HK$’000 HK$’000 122,577 96,432	Group 2008 2007 HK$’000 HK$’000 122,577 96,432

	21,505 (997) (1,297) (5,773) (3,240) 8,836 (3,930) 6,373 4,486	17,054 (207 (2,243 (801 (5,005 2,973 (2,605 5,367 (1,279
	25,963	13,254

The share of tax attributable to associates amounting to HK$864,000 (2007: HK$361,000), is included in “Share of profits and losses of associates” on the face of the consolidated income statement.

11. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

The consolidated profit attributable to equity holders of the parent for the year ended 31 March 2008 includes a profit of HK$180,187,000 (2007: profit of HK$127,230,000) which has been dealt with in the financial statements of the Company (note 38(b)).

12. DIVIDENDS

Additional final dividend for 2006 Interim – HK0.16 cents (2007: HK0.15 cents) per ordinary share Proposed final – HK0.10 cents (2007: HK0.33 cents) per ordinary share	2008 HK$’000 – 10,319 7,868 18,187	2007 HK$’000 126 7,073 19,540
		26,739

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

The dividend per ordinary share amounts for the prior year have been adjusted to reflect the bonus issue during that year and the subdivision of the Company’s shares subsequent to the balance sheet date.

– I-36 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

13. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT

The calculation of basic earnings per share is based on the profit for the year attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares in issue during the year, as adjusted to reflect the share subdivision during the year.

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

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

Earnings Profit attributable to ordinary equity holders of the parent, used in basic earnings per share calculation Interest on convertible notes Profit for the purpose of diluted earnings per share calculation Shares Weighted average number of ordinary shares in issue during the year used in basic earnings per share calculation Effect of dilution – weighted average number of ordinary shares: Convertible notes Share options	2008 2007 HK$’000 HK$’000 96,089 83,170 1,144 2,966 97,233 86,136 Number of shares 2008 2007 6,205,325,115 4,728,929,492 219,278,689 541,288,970 398,588,922 175,381,903 6,823,192,726 5,445,600,365	2007 HK$’000 83,170 2,966
		86,136

		5,445,600,365

– I-37 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

14. PROPERTY, PLANT AND EQUIPMENT

Group

Building Leasehold improvements HK$’000 HK$’000 – 48,415 – (39,094) – 9,321	Building Leasehold improvements HK$’000 HK$’000 – 48,415 – (39,094) – 9,321	Plant and machinery HK$’000 364 (349) 15	Furniture, fixtures and office equipment HK$’000 32,811 (32,182) 629	Motor vehicles HK$’000 1,658 (288) 1,370	Computer equipment HK$’000 2,891 (2,241) 650	Construction in progress HK$’000 – – –	Total HK$’000 86,139 (74,154
							11,985

– – 505 – (16) 37	9,321 15,966 – (1,860) (5,964) 424	15 289 10,388 (46) (503) 760	629 833 15 (77) (539) 12	1,370 1,971 163 – (794) 36	650 548 – (7) (474) –	– 126,268 898 – – 66	11,985 145,875 11,969 (1,990 (8,290 1,335
526	17,887	10,903	873	2,746	717	127,232	160,884

638 (112)	62,558 (44,671)	13,863 (2,960)	33,611 (32,738)	3,825 (1,079)	3,368 (2,651)	127,232 –	245,095 (84,211
526	17,887	10,903	873	2,746	717	127,232	160,884

– I-38 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Building Leasehold improvements HK$’000 HK$’000 – 47,300 – (41,366) – 5,934	Building Leasehold improvements HK$’000 HK$’000 – 47,300 – (41,366) – 5,934	Plant and machinery HK$’000 5,532 (4,422) 1,110	Furniture, fixtures and office equipment HK$’000 49,563 (48,912) 651	Motor vehicles HK$’000 742 (631) 111	Computer equipment HK$’000 2,651 (1,695) 956	Construction in progress HK$’000 – – –	Total HK$’000 105,788 (97,026
							8,762

– – – – – – –	5,934 2,097 4,906 (38) (56) (3,571) 49	1,110 21 – (762) (5) (349) –	651 340 345 (51) (119) (542) 5	111 1,244 193 (38) – (143) 3	956 247 – – – (553) –	– – – – – – –	8,762 3,949 5,444 (889 (180 (5,158 57
–	9,321	15	629	1,370	650	–	11,985

– –	48,415 (39,094)	364 (349)	32,811 (32,182)	1,658 (288)	2,891 (2,241)	– –	86,139 (74,154
–	9,321	15	629	1,370	650	–	11,985

The leasehold land with an aggregate carrying amount of HK$95,835,000 (2007: Nil) and included in the Group’s construction in progress is held under medium term leases and situated in Mainland China.

– I-39 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

15. PREPAID LAND LEASE PAYMENTS

Group

Carrying amount at 1 April Additions Transfer from properties under development (note 17) Amortisation for the year Impairment Exchange realignment Carrying amount at 31 March Current portion included in prepayments, deposits and other receivables (note 26) Non-current portion	2008 HK$’000 – 181,183 3,422 (712) (9,700) 6,298 180,491 (2,589) 177,902	2007 HK$’000 – – – – – –
		– –
		–

The Group’s leasehold land is situated in Hong Kong and Mainland China and is held under the following lease terms:

Long term leases: – Mainland China Medium term leases: – Hong Kong – Mainland China	2008 HK$’000 176,908	2007 HK$’000 –
	3,337 246 3,583	– –
		–
	180,491	–

– I-40 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

16. INVESTMENT PROPERTIES GROUP

Group

Carrying amount at 1 April Additions Acquisition of a jointly-controlled entity Acquisition of a subsidiary (note 39(b)) Disposals Disposal of subsidiaries (note 39(c)) Net profit from a fair value adjustment (Note) Exchange realignment Carrying amount at 31 March	2008 HK$’000 315,143 201,113 – 20,019 – – 11,383 7,541 555,199	2007 HK$’000 297,500 18,752 62,593 – (85,600 (10,200 31,548 550
		315,143

Note: Included in the net profit from a fair value adjustment is an adjustment to the revenue which amounted to HK$82,000 (2007: Nil) and was resulted from the incentive being granted during the year.

The Group’s investment properties are situated in Hong Kong and Mainland China and are held under the following lease terms:

Long term leases: – Hong Kong Medium term leases: – Hong Kong – Mainland China	2008 HK$’000 60,600	2007 HK$’000 31,500
	319,300 175,299 494,599	220,500 63,143
		283,643
	555,199	315,143

The investment properties of the Group were revalued on 31 March 2008 by Savills Valuation and Professional Services Limited, independent professionally qualified valuers, on an open market, existing use basis. The investment properties are leased to a director of the Company and third parties under operating leases, further details of which are included in notes 41 and 43 to the financial statements.

At 31 March 2008, the Group’s investment properties with an aggregate carrying value of HK$348,900,000 (2007: HK$252,000,000) and certain rental income generated therefrom were pledged to secure the Group’s general banking facilities, of which approximately HK$201,504,000 (2007: HK$89,424,000) had been utilised as at 31 March 2008 (note 32).

Further particulars of the Group’s investment properties are included on pages 121 and 122.

– I-41 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

17. PROPERTIES UNDER DEVELOPMENT

Group

Carrying amount at 1 April Additions (including development cost and capitalised interest) Transfer to prepaid land lease payments (note 15) Transfer to properties held for sale (note 24) Carrying amount at 31 March Less: Portion classified as current assets Long term portion	2008 HK$’000 470,680 59,081 (3,422) (237,934)	2007 HK$’000 293,222 177,458 – – 470,680 (222,811) 247,869
	288,405 (288,405)	470,680
		(222,811
	–

At 31 March 2008, the Group’s properties under development with an aggregate carrying value of HK$282,197,000 (2007: HK$449,670,000) were pledged to secure the Group’s general banking facilities, of which approximately HK$150,650,000 (2007: HK$242,050,000) had been utilised as at 31 March 2008 (note 32).

Further particulars of the Group’s properties under development are included on page 123.

18. GOODWILL

Group

Goodwill arising on acquisition of subsidiaries HK$’000 Cost and net carrying amount: At 1 April 2006 4,987 Arising on acquisition of an interest in a jointly-controlled entity – Disposal of subsidiaries (note 39(c)) (4,044) At 31 March 2007 and 1 April 2007 943 Arising on acquisition of a subsidiary (note 39(b)) 11,444 Impairment during the year (5,943) Partial/deemed disposal of an associate – At 31 March 2008 6,444	Goodwill arising on acquisition of subsidiaries HK$’000 Cost and net carrying amount: At 1 April 2006 4,987 Arising on acquisition of an interest in a jointly-controlled entity – Disposal of subsidiaries (note 39(c)) (4,044) At 31 March 2007 and 1 April 2007 943 Arising on acquisition of a subsidiary (note 39(b)) 11,444 Impairment during the year (5,943) Partial/deemed disposal of an associate – At 31 March 2008 6,444	Goodwill arising on acquisition of a jointly- controlled entity HK$’000 – 1,376 –	Total Goodwill arising on acquisition of associates (Note 20) HK$’000 HK$’000 4,987 9,718 1,376 – (4,044) – 2,319 9,718 11,444 – (5,943) (5,615) – (4,103) 7,820 –	Total Goodwill arising on acquisition of associates (Note 20) HK$’000 HK$’000 4,987 9,718 1,376 – (4,044) – 2,319 9,718 11,444 – (5,943) (5,615) – (4,103) 7,820 –
	943 11,444 (5,943) –	1,376 – – –	2,319 11,444 (5,943) –	9,718 – (5,615 (4,103
	6,444	1,376	7,820

– I-42 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group applied the transitional provisions of SSAP 30 that permitted goodwill and negative goodwill in respect of acquisitions which occurred prior to the adoption of the standard, to remain eliminated against consolidated reserves or credited to the capital reserve, respectively.

The amount of goodwill remaining in the consolidated reserves, arising from the acquisition of subsidiaries prior to the adoption of SSAP 30 in 2001, was HK$21,775,000 (2007: HK$21,775,000) as at 31 March 2008.

Impairment testing of goodwill

Goodwill acquired through business combinations has been allocated to the following cash-generating units, which are reportable segments, for impairment testing:

Property development cash-generating unit;
Agricultural by-products wholesale markets cash-generating unit;
A jointly-controlled entity – Shenzhen traditional wet markets cash-generating unit; and
Associates – pharmaceutical products cash-generating unit.

The carrying amount of goodwill allocated to each of the cash-generating units is as follows:

==> picture [341 x 97] intentionally omitted <==

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

A jointly-controlled
Agricultural Associates – entity – Shenzhen
Property by-products pharmaceutical traditional
development wholesale markets products wet markets Total
2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Carrying amount of
goodwill – 943 6,444 – – 9,718 1,376 1,376 7,820 12,037
----- End of picture text -----

Property development cash-generating unit

The recoverable amount of the property development cash-generating unit has been determined based on a value in use calculation using cash flow projections based on financial budgets.

An impairment loss of HK$943,000 (2007: Nil) was recognised during the year due to the completion of respective property projects and management did not expect the relevant subsidiaries will further generate positive cashflow to the Group.

Agricultural by-products wholesale markets cash-generating unit

The recoverable amount of the agricultural by-products wholesale markets cash-generating unit has been determined based on a value in use calculation using cash flow projections based on financial budgets covering a five-year period approved by senior management. The discount rate applied to cash flow projections is 16%.

An impairment loss of HK$5,000,000 (2007: Nil) was recognised during the year due to higher than expected capital expenditure required to modernise the agricultural by-products wholesale markets of the relevant subsidiary.

A jointly-controlled entity – Shenzhen traditional wet markets cash-generating unit

The recoverable amount of the Shenzhen traditional wet markets cash-generating unit has been determined based on a value in use calculation using cash flow projections based on financial budgets covering a five-year period approved by senior management. The discount rate applied to cash flow projections is 16% (2007: 5%).

– I-43 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Associates – pharmaceutical products cash-generating unit

The recoverable amount of the pharmaceutical products cash-generating unit has been determined based on a value in use calculation using cash flow projections based on financial budgets covering a five-year period approved by senior management. The discount rates applied to cash flow projections range from 13% to 16% (2007: 11% to 15%) and cash flows beyond the five-year period are extrapolated using a zero growth rate (2007: zero), which do not exceed the estimated long term average growth rates of the relevant markets.

An impairment loss of HK$5,615,000 (2007: Nil) was recognised during the year due to the increase in market competition and operating expenses which affect adversely the future growth and profits of the Group’s pharmaceutical products business.

Management has determined the budgeted gross margins based on past performance and its expectation for market development. The discount rates used are before tax and reflect specific risks relating to the relevant units.

19. INTERESTS IN SUBSIDIARIES

Unlisted shares, at cost Due from subsidiaries – Note (i) Loans to subsidiaries – Note (ii) Due to subsidiaries – Note (i) Impairment – Note (iii)	Company 2008 2007 HK$’000 HK$’000 71,000 71,000 1,441,026 1,047,377 20,529 80,481 (230,258) (190,412) 1,302,297 1,008,446 (110,876) (297,824) 1,191,421 710,622	Company 2008 2007 HK$’000 HK$’000 71,000 71,000 1,441,026 1,047,377 20,529 80,481 (230,258) (190,412) 1,302,297 1,008,446 (110,876) (297,824) 1,191,421 710,622
	1,302,297 (110,876)	1,008,446 (297,824
	1,191,421

Notes:

(i) The amounts are unsecured, interest-free and have no fixed terms of repayment. The carrying amounts of these amounts approximate to their fair values.
(ii) The amounts are unsecured and have no fixed terms of repayment. Except for loans to subsidiaries amounting to HK$15,878,000 (2007: HK$15,878,000) and Nil (2007: HK$48,657,000) which bear interest at 3% and 1.5%, respectively over the best lending rate per annum offered by banks, the balances are interest-free. The carrying amounts of the loans to subsidiaries approximate to their fair values.
(iii) The impairment relates primarily to amounts due from subsidiaries and loans to subsidiaries that had suffered losses for years or ceased operations. The reversal of impairment during the year was due to some of the relevant subsidiaries are expected by the management to generate positive cashflow and profit to the Group based on their current year’s performance and latest budgets.

– I-44 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Particulars of the principal subsidiaries at the balance sheet date are as follows:

			Percentage	of equity
	Place of	Nominal value of	attributable to the
	incorporation/	issued/registered	Company
Name	operations	share capital	Direct	Indirect	Principal activities
Buildstart Investments Limited	British Virgin	Ordinary US$1	–	100	Investment holding
	Islands/
	Hong Kong
Champford Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Charter Golden Design &	Hong Kong	Ordinary HK$2	–	100	Property development
Contracting Limited
China Coin Management Limited	Hong Kong	Ordinary HK$1,000	–	100	Property investment
Conway Consultants Limited	Hong Kong	Ordinary HK$1,400,000	–	70	Provision of medical
		Non-voting preference			consultation services
		_(Note 2)_HK$600,000
Denox Management Limited	Hong Kong	Ordinary HK$2	–	100	Management and
					sub-letting of
					properties
Easy Kingdom Limited	Hong Kong	Ordinary HK$2	–	100	Property investment
Extra Power Limited	Hong Kong	Ordinary HK$1	–	100	Money lending
Fulling Limited	Hong Kong	Ordinary HK$100	–	100	Money lending and
					securities investment
First World Investments Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Goodtech Management Limited	Hong Kong	Ordinary HK$2,800,100	–	100	Management of shopping
					centres
Grand Quality Development Limited	Hong Kong	Ordinary HK$2	–	100	Property investment
Hanwin Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Info World Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Join China Investment Limited	Hong Kong	Ordinary HK$2	–	100	Investment holding
Kartix Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property development
King Channel Limited	Hong Kong	Ordinary HK$1	–	100	Property development
Kova Investments Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Lead Fortune Limited	Hong Kong	Ordinary HK$1,000	–	100	Property investment
Lica Parking Company Limited	Hong Kong	Ordinary HK$25,500,000	–	99	Management and
					sub-licensing of
					car parks

– I-45 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

			Percentage	of equity
	Place of	Nominal value of	attributable to the
	incorporation/	issued/registered	Company
Name	operations	share capital	Direct	Indirect	Principal activities
Longable Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Mailful Investments Limited	British Virgin	Ordinary US$1	–	100	Investment holding
	Islands/
	Hong Kong
Majorluck Limited	Hong Kong	Ordinary HK$10,000	–	100	Management and
					sub-licensing of
					Chinese wet markets
New Shiny Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Poly Talent Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property development
Richly Gold Limited	Hong Kong	Ordinary HK$2	–	100	Property investment
Rich Time Strategy Limited	British Virgin	Ordinary US$1	–	100	Investment holding
	Islands/
	Hong Kong
Shiny World Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Smart First Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Suitbest Investments Limited	British Virgin	Ordinary US$1	–	100	Investment holding
	Islands/
	Hong Kong
Ventix Investment Limited	Hong Kong	Ordinary HK$1	–	100	Property investment
Wang Hing Fruits and Wholesale	Hong Kong	Ordinary HK$1	–	100	Wholesale of agricultural
Vegetables Limited					products
Wang Hing Vegetables Wholesale	Hong Kong	Ordinary HK$100	–	51	Wholesale of agricultural
Company Limited					products
Wang On Agricultural Wholesale (HK)	Hong Kong	Ordinary HK$1	–	100	Wholesale of agricultural
Limited					products
Wang On Commercial Management	British Virgin	Ordinary US$2	–	100	Investment holding
Limited	Islands/
	Hong Kong
Wang On Enterprises (BVI) Limited	British Virgin	Ordinary US$1	100	–	Investment holding
	Islands/
	Hong Kong
Wang On Majorluck Limited	Hong Kong	Ordinary HK$1,000	–	100	Management and
					sub-licensing of
					Chinese wet markets

– I-46 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

			Percentage	of equity
	Place of	Nominal value of	attributable to the
	incorporation/	issued/registered	Company
Name	operations	share capital	Direct	Indirect	Principal activities
Wang On Shopping Centre Management	Hong Kong	Ordinary HK$2	–	100	Management and
Limited					sub-licensing of
					shopping centres
WEH Investments Limited	Hong Kong	Ordinary HK$477	–	100	Property investment
		Non-voting deferred
		_(Note 3)_HK$1,262,523
Willing Dental Consultants Limited	Hong Kong	Ordinary HK$100	–	100	Provision of dental
					consultation services
Xuzhou Yuan Yang Trading	PRC	RMB61,220,000	–	51	Management and
Development Company Limited					sub-licensing of
					agricultural by-products
					wholesale market
Yulin Hong-Jin Agricultural	PRC	RMB76,230,000	–	65	Management and
By-products Wholesale Marketplace					sub-licensing of
Limited					agricultural by-products
					wholesale market

Notes:

(1) The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.
(2) The non-voting preference shares carry no voting rights but the holders have the right to receive an annual cash dividend equivalent to 30% of the audited net profit after tax. On the winding-up of the company, the holders rank in priority to the ordinary shareholders provided that the assets of the company available for distribution to its members shall be applied first towards arrears or accruals of the dividends.
(3) The non-voting deferred shares carry no voting rights or rights to dividends. On the winding-up of the company, the holders of non-voting deferred shares have a right to repayment in proportion to the amounts of all paid-up ordinary and deferred shares after the first HK$1,000,000,000,000 thereof has been distributed among the holders of the ordinary shares.

– I-47 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

20. INTERESTS IN ASSOCIATES

Group 2008 2007 HK$’000 HK$’000 307,664 319,474 (3,320) (7,129) – 9,718	Group 2008 2007 HK$’000 HK$’000 307,664 319,474 (3,320) (7,129) – 9,718	Company 2008 2007 HK$’000 HK$’000 – – – – – – – – 2,089 219 – (27) 2,089 192 – – 2,089 192 N/A N/A	Company 2008 2007 HK$’000 HK$’000 – – – – – – – – 2,089 219 – (27) 2,089 192 – – 2,089 192 N/A N/A
304,344 2,362 (878) 305,828 (3)	322,063 263 (959) 321,367 (3)	– 2,089 – 2,089 –	– 219 (27
			192 –
305,825 98,161	321,364 212,105	2,089 N/A

Notes:

(i) The amounts are unsecured, interest-free and have no fixed terms of repayment. The carrying amounts of these amounts approximate to their fair values.
(ii) The market value of the listed shares of an associate, Wai Yuen Tong Medicine Holdings Limited (“WYTH”), held by the Group was approximately HK$106,697,000 at the date of approval of these financial statements.

Particulars of the principal associates at the balance sheet date are as follows:

==> picture [355 x 183] intentionally omitted <==

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

Percentage of
ownership
Particulars of Place of interest
issued shares/ incorporation/ attributable
Name registered capital operations to the Group Principal activities
2008 2007
WYTH (Note 2) Ordinary shares of Hong Kong 28.31 49 Production and sale of
HK$0.01 each traditional Chinese and
Western pharmaceutical
health food products and
property holding
Changzhou Ling Jia Tang Paid-up capital of PRC 40 – Agricultural by-products
Hong-Jin Logistic US$14,020,176 wholesale market
Development Company
Limited
----- End of picture text -----*

– I-48 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes:

(1) The above table lists the associates of the Group which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other associates would, in the opinion of the directors, result in particulars of excessive length.
(2) The financial statements of WYTH and its subsidiaries were not audited by Ernst & Young Hong Kong or other member firms of the Ernst & Young global network.
Listed on the Stock Exchange

The following table illustrates the summarised financial information of the Group’s associates extracted from their financial statements/management accounts:

	2008	2007
	HK$’000	HK$’000
Assets	1,375,285	792,911
Liabilities	(364,152)	(135,213)
Revenue	477,021	381,266
Profit	81,392	9,895

21. INTERESTS IN JOINTLY-CONTROLLED ENTITIES

Particulars of the jointly-controlled entities are as follows:

Paid-up registered capital/nominal value of issued share capital Place of registration/ incorporation Name Shenzhen Jimao Market Co., Limited RMB31,225,000 PRC Vast Time Limited HK$1,000 Hong Kong Fuzhou Wang On Property Development Co., Ltd. RMB340,000,000 PRC	Percentage of Ownership interest Voting power Profit sharing Principal activities 50 50 50 Operations and management of traditional wet markets 50 50 50 Investment holding 50 50 50 Property development

– I-49 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The amounts of the assets, liabilities, revenue and expenses of the Group’s jointly-controlled entities attributable to the Group are as follows:

Non-current assets Current assets Current liabilities Net assets Total revenue Total expenses Profit for the year	2008 HK$’000 245,906 11,267 (6,054) 251,119	2007 HK$’000 68,649 2,098 (5,485
		65,262

	16,844 (12,129)	3,476 (2,462
	4,715	1,014

On 23 November 2007, the Group entered into an acquisition agreement with an independent third party for the acquisition of an 50% equity interest in Vast Time Limited (“Vast Time”) at a consideration of RMB11,250,000 (equivalent to HK$12,285,000).

Vast Time and its subsidiary have not commenced any operations as at the date of acquisition saved for obtaining the right to acquire a parcel of land in Fuzhou, the PRC.

22. HELD-TO-MATURITY FINANCIAL ASSET

						Group and	Company
						2008	2007
						HK$’000	HK$’000
Unlisted	debt	investment,	at	amortised	cost	1,943	–

23. OTHER INTANGIBLE ASSET

Carrying amount at 1 April Addition Amortisation for the year Carrying amount at 31 March	Group Marketplace operating right 2008 2007 HK$’000 HK$’000 30,300 – – 30,300 (6,060) – 24,240 30,300	Group Marketplace operating right 2008 2007 HK$’000 HK$’000 30,300 – – 30,300 (6,060) – 24,240 30,300
		30,300

– I-50 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

24. PROPERTIES HELD FOR SALE

Carrying amount at 1 April Transfer from properties under development (note 17) Sale Carrying amount at 31 March	Group 2008 2007 HK$’000 HK$’000 1,455 135,634 237,934 – (211,504) (134,179) 27,885 1,455	Group 2008 2007 HK$’000 HK$’000 1,455 135,634 237,934 – (211,504) (134,179) 27,885 1,455
		1,455

At 31 March 2008, the Group’s properties held for sale with an aggregate carrying value of HK$10,334,497 (2007: Nil) were pledged to secure the Group’s general banking facilities of which approximately HK8,400,000 (2007: Nil) had been utilised as at 31 March 2008 (note 32).

Further particulars of the Group’s properties held for sale are included on page 123.

25. TRADE RECEIVABLES

An aged analysis of the trade receivables as at the balance sheet date, based on the invoice date, is as follows:

Group 2008 2007 HK$’000 Percentage HK$’000 Percentage 3,948 94 6,278 88 165 4 441 6 76 2 425 6 4,189 100 7,144 100 (88) (548)	Group 2008 2007 HK$’000 Percentage HK$’000 Percentage 3,948 94 6,278 88 165 4 441 6 76 2 425 6 4,189 100 7,144 100 (88) (548)	Group 2008 2007 HK$’000 Percentage HK$’000 Percentage 3,948 94 6,278 88 165 4 441 6 76 2 425 6 4,189 100 7,144 100 (88) (548)	Group 2008 2007 HK$’000 Percentage HK$’000 Percentage 3,948 94 6,278 88 165 4 441 6 76 2 425 6 4,189 100 7,144 100 (88) (548)
			100

	)	(548)
4,101		6,596

The Group generally grants 15 to 30 days credit period to customers for its sub-leasing business. The Group generally does not grant any credit to customers of other businesses.

The Group seeks to maintain strict control over its outstanding receivables and has a credit control department to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and that the Group’s trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. Trade receivables are non-interest-bearing.

– I-51 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

Balance at 1 April Impairment losses reversed Impairment losses recognised Amount written off as uncollectible Balance at 31 March	Group 2008 2007 HK$’000 HK$’000 548 636 (244) – – 467 (216) (555) 88 548	Group 2008 2007 HK$’000 HK$’000 548 636 (244) – – 467 (216) (555) 88 548
		548

The above provision for impairment of trade receivables is related to individually impaired trade receivables, the customers of which were in financial difficulties and only a portion of the receivables is expected to be recovered. The Group does not hold any collateral or other credit enhancements over these balances.

The aged analysis of the trade receivables that are not considered to be impaired is as follows:

Neither past due nor impaired Less than 90 days past due 91 – 180 days past due Over 180 days past due	Group 2008 2007 HK$’000 HK$’000 2,116 6,140 1,832 138 138 275 15 43 4,101 6,596	Group 2008 2007 HK$’000 HK$’000 2,116 6,140 1,832 138 138 275 15 43 4,101 6,596
		6,596

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

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

– I-52 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

26. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

Group 2008 2007 HK$’000 HK$’000 7,600 3,336 2,589 – 19,369 11,329 15,053 25,954 23,565 24,719 120 402	Group 2008 2007 HK$’000 HK$’000 7,600 3,336 2,589 – 19,369 11,329 15,053 25,954 23,565 24,719 120 402	Company 2008 2007 HK$’000 HK$’000 771 430 – – 162 100 47 228 – – – –	Company 2008 2007 HK$’000 HK$’000 771 430 – – 162 100 47 228 – – – –
68,296 (7,522) 60,774 (12,989) (4,595)	65,740 (7,452) 58,288 (13,987) (5,343)	980 – 980 – –	758 –
			758 – –
43,190	38,958	980	758

Included in the Group’s deposits are amounts due from the Group’s associate of HK$160,000 (2007: HK$Nil).

The Group’s loans receivable are stated at amortised cost at effective interest rates ranging from 2% to 12% and the credit terms of which range from 4 months to 15 years. As the Group’s loans receivable relate to a number of different borrowers, the directors are of the opinion that there is no concentration of credit risk over these loans receivable. The carrying amounts of the loans receivable approximate to their fair values.

As at 31 March 2008, certain loans receivable and other receivables are secured by contra deposits of HK$2,232,000 received by the Group and a retail shop located in Mongkok, Kowloon, Hong Kong.

Included in the above provision for impairment of other receivables and loans receivable are provision for individually impaired receivables of HK$7,522,000 (2007: HK$7,452,000) with an aggregate carrying amount of HK$9,833,000 (2007: HK$10,446,000). The individually impaired other receivables related to customers or debtors that were in financial difficulties and only portion secured by cash deposit received and property are expected to be recovered.

Other than the aforementioned impaired other receivables, none of the above assets is either past due or impaired. The financial assets included in the above balances relate to the receivables for which there was no recent history of default.

– I-53 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

27. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Listed equity investments, at fair value: Hong Kong Elsewhere Unlisted debt securities, at fair value	Group 2008 2007 HK$’000 HK$’000 27,882 24,721 9,819 5,868 7,577 16,178 45,278 46,767	Company 2008 2007 HK$’000 HK$’000 8,915 15,416 5,556 5,333 – 16,178 14,471 36,927	Company 2008 2007 HK$’000 HK$’000 8,915 15,416 5,556 5,333 – 16,178 14,471 36,927
			36,927

The market values of the Group’s and the Company’s listed equity investments at the date of approval of these financial statements were approximately HK$31,742,000 and HK$12,934,000, respectively.

The effective interest rate of the unlisted debt securities was 6% (2007: 5% to 7%), and they mature in 20 years (2007: 4 to 10 years).

28. CASH AND CASH EQUIVALENTS AND PLEDGED DEPOSITS

Cash and bank balances Time deposits Less: Pledged time deposits Cash and cash equivalents	Group 2008 2007 HK$’000 HK$’000 81,307 135,757 249,512 330,827	Group 2008 2007 HK$’000 HK$’000 81,307 135,757 249,512 330,827	Company 2008 2007 HK$’000 HK$’000 6,129 86,457 218,218 304,027	Company 2008 2007 HK$’000 HK$’000 6,129 86,457 218,218 304,027
	330,819 –	466,584 (78,000)	224,347 –	390,484 (78,000
	330,819	388,584	224,347	312,484

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

– I-54 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

29. TRADE PAYABLES

An aged analysis of the trade payables as at the balance sheet date, based on the invoice date, is as follows:

			Group
			2008	2007
			HK$’000	HK$’000
Within	90	days	24,624	23,246

The trade payables are non-interest-bearing and have an average term of 30 days. The carrying amounts of the trade payables approximated to their fair values.

30. OTHER PAYABLES AND ACCRUALS

Other payables (Note) Accruals	Group 2008 2007 HK$’000 HK$’000 114,298 11,077 14,125 10,018 128,423 21,095	Company 2008 2007 HK$’000 HK$’000 67,542 688 2,102 51 69,644 739	Company 2008 2007 HK$’000 HK$’000 67,542 688 2,102 51 69,644 739
			739

Note: Included in other payables was subscription monies of approximately HK$65,470,000 received for the Top-up Subscription discussed in note 36(e) to financial statements.

Other payables are non-interest-bearing and there are generally no credit terms. The carrying amounts of the other payables approximate to their fair values.

31. DERIVATIVE FINANCIAL INSTRUMENTS

			Group
			2008	2007
			HK$’000	HK$’000
Stock	accumulator	contracts	2,338	–

– I-55 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

32. INTEREST-BEARING BANK LOANS

Group 2008 Contractual interest rate(%) Maturity Current: Bank loans – secured HIBOR+ (0.85 – 1.625)/ P – (2.25 – 3.15) 2009 Bank loans – unsecured HIBOR+ (0.85 – 1.625) 2009 Non-current: Bank loans – secured HIBOR+ (0.85 – 1.0) P – (2.25 – 3.15)/ 2009–2025 Bank loans – unsecured HIBOR+ (0.85 – 1.0) 2009–2022 Company 2008 Contractual interest rate(%) Maturity Current: Bank loans – secured HIBOR+ (0.85 – 1.0) 2009 Bank loans – unsecured HIBOR+ (0.85 – 1.625) 2009 Non-current: Bank loans – secured HIBOR+ (0.85 – 1.0) 2009–2023 Bank loans – unsecured HIBOR+ (0.85 – 1.0) 2009–2022	2007 HK$’000 Contractual interest rate(%) Maturity 244,240 HIBOR+ (0.91 – 1.625) 2008 102,875 HIBOR+ (1.0 – 1.625) 2008	HK$’000 364,425 25,000
	347,115 165,743 HIBOR+ (0.91-1.625)/ P – 2.25 2008–2025 33,375 199,118	389,425
		108,799 –
		108,799
	546,233 2007 HK$’000 Contractual interest rate(%) Maturity 30,400 HIBOR+ (1.0 – 1.625) 2008 102,875 HIBOR+ (1.3 – 1.425) 2008	498,224

		HK$’000 112,000 25,000
	133,275 84,600 HIBOR+ (1.0 – 1.625) 2008 – 2011 33,375 117,975	137,000
		29,750 –
		29,750
	251,250	166,750

– I-56 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Analysed into: Bank loans repayable: Within one year In the second year In the third to fifth years, inclusive Beyond five years	Group 2008 2007 HK$’000 HK$’000 347,115 389,425 42,483 20,871 74,122 40,687 82,513 47,241 546,233 498,224	Company 2008 2007 HK$’000 HK$’000 133,275 137,000 35,500 16,250 70,475 13,500 12,000 – 251,250 166,750	Company 2008 2007 HK$’000 HK$’000 133,275 137,000 35,500 16,250 70,475 13,500 12,000 – 251,250 166,750
			166,750

Notes:

(a) Certain bank loans of the Group and the Company are secured by the Group’s investment properties and certain rental income generated therefrom (note 16), properties under development (note 17) and properties held for sale (note 24).

In addition, the Company has guaranteed certain of the Group’s bank loans up to HK$577,371,000 (2007: HK$483,162,000) as at the balance sheet date.

(b) All bank loans of the Group and the Company bear interest at floating interest rates.
(c) The carrying amounts of the bank loans of the Group and of the Company approximate to their fair values.

33. PROVISIONS FOR ONEROUS CONTRACTS

Carrying amount at 1 April Additional provision/(write-back of provision) Amount utilised during the year Carrying amount at 31 March Portion classified as current liabilities Long term portion	Group 2008 2007 HK$’000 HK$’000 369 1,935 3,650 (688 (369) (878	Group 2008 2007 HK$’000 HK$’000 369 1,935 3,650 (688 (369) (878
	3,650 (1,690)	369 (369
	1,960	–

– I-57 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

34. CONVERTIBLE NOTES

		Group and	Company
		2008	2007
		HK$’000	HK$’000
Convertible	notes	–	45,756

In 2005, the Company issued convertible notes with an aggregate principal amount of HK$61,440,000 through a placing agent to several independent third parties. The convertible notes provide the holders option rights to convert the principal amount into ordinary shares of HK$0.005 each of the Company on any business day prior to the maturity of the convertible notes at a conversion price of HK$0.0909 per share (as adjusted after the bonus issue of the Company in prior year and subdivision of shares during the year).

The principal amounts of the convertible notes bear interest at a rate of 1% per annum and the convertible notes will mature on the first day of a period of three years from the date of their issue.

All the convertible notes outstanding as at 1 April 2007 were converted into shares of the Company (note 36) during the year.

The fair value of the liability component was estimated at the issue date using an equivalent market interest rate for a similar note without a conversion option. The residual amount is assigned as the equity component and is included in shareholders’ equity.

Balance at 1 April 2006 Interest expense (note 7) Interest paid Conversion of convertible notes Balance at 31 March and 1 April 2007 Interest expense (note 7) Interest paid Conversion of convertible notes Balance at 31 March 2008	Liability component of convertible notes HK$’000 46,860 2,966 (492) (3,578)	Equity component of convertible notes HK$’000 6,077 – – (424
	45,756 1,144 (201) (46,699)	5,653 – – (5,653
	–	–

– I-58 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

35. DEFERRED TAX

The components of deferred tax liabilities and assets during the year are as follows:

Deferred tax liabilities

Group

Depreciation allowance in excess of related depreciation HK$’000 798 335	Revaluation gain of investment properties HK$’000 2,374 1,947	Total HK$’000 3,172 2,282
1,133 388	4,321 2,784	5,454 3,172
1,521	7,105	8,626

Depreciation in excess of related depreciation allowance HK$’000 At 1 April 2006 – Deferred tax credited to the income statement during the year (note 10) – At 31 March and 1 April 2007 – Deferred tax credited to the income statement during the year (note 10) 397 Deferred tax assets at 31 March 2008 397	Depreciation in excess of related depreciation allowance HK$’000 At 1 April 2006 – Deferred tax credited to the income statement during the year (note 10) – At 31 March and 1 April 2007 – Deferred tax credited to the income statement during the year (note 10) 397 Deferred tax assets at 31 March 2008 397	Provision for onerous contracts HK$’000 – –	Revaluation loss of investment properties HK$’000 – –	Losses available for offset against future taxable profit HK$’000 562 2,171	Total HK$’000 562 2,171
	– 397	– 639	– 244	2,733 329	2,733 1,609
	397	639	244	3,062	4,342

– I-59 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group has tax losses arising in Hong Kong of approximately HK$61,524,000 (2007: HK$47,729,000) that are available indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognised in respect of these losses as they have arisen in subsidiaries that have been loss-making for some time.

At 31 March 2008, there was no significant unrecognised deferred tax liability (2007: Nil) for taxes that would be payable on the unremitted earnings of certain of the Group’s subsidiaries, associates or jointly-controlled entities as the Group has no liability to additional tax should such amounts be remitted.

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

36. SHARE CAPITAL

Authorised: 40,000,000,000 (2007: 2,000,000,000) ordinary shares of HK$0.005 (2007: HK$0.10) each Issued and fully paid: 6,410,233,640 (2007: 294,178,882) ordinary shares of HK$0.005 (2007: HK$0.10) each	2008 HK$’000 200,000 32,051	2007 HK$’000 200,000

		29,418

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

(a) The subscription rights attaching to 1,887,600 and 141,504,000 share options were exercised at the subscription prices of HK$0.97 and HK$0.0485, respectively, per share (note 37), resulting in the issue of 1,887,600 shares of HK$0.10 each and 141,504,000 shares of HK$0.005 each, respectively for a total consideration, before issue expenses, of HK$8,694,000.
(b) Pursuant to an ordinary resolution passed on 17 May 2007, the existing issued and unissued ordinary shares with the nominal value of HK$0.10 each in the share capital of the Company were subdivided into 20 ordinary shares with the nominal value of HK$0.005 each.
(c) During the year, the conversion rights attaching to the convertible notes issued by the Company with an aggregate nominal value of HK$48,000,000 were exercised at the conversion price of HK$0.0909 per share, resulting in the issue of 528,000,000 shares of HK$0.005 each.
(d) During the year, the Company repurchased its own shares on the Stock Exchange as follows:

	Number of	Highest	Lowest
	shares	price paid	price paid	Aggregate
Month/year	repurchased	per share	per share	price paid
		HK$	HK$	HK$’000
Jan to Feb 2008	180,600,000	0.152	0.108	21,506

The repurchased shares were cancelled and accordingly the issued share capital of the Company was reduced by the nominal value of these shares.

– I-60 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(e) On 26 March 2008, Accord Power Limited (“Accord Power”), a substantial shareholder of the Company which is wholly-owned by Trustcorp Limited in its capacity as the trustee of the Tang’s Family Trust, entered into a Top-up Placing and Subscription Agreement with Kingston Securities Limited (the “Placing Agent”) and the Company and pursuant to which, Accord Power agreed to place, through the Placing Agent, an aggregate of 900 million existing ordinary shares of the Company to certain private investors at a price of HK$0.075 each (the “Top-up Placing”) and subscribe for an aggregate of 900 million new ordinary shares of the Company at a price of HK$0.075 each (the “Top-up Subscription”).

The Top-up Placing and the Top-up Subscription were completed on 31 March 2008 and 2 April 2008, respectively, and the Group raised a total of HK$67,500,000 (before expenses) (note 45(a)).

(f) On 22 April 2008, the Company placed an aggregate of 460,000,000 new ordinary shares, through the Placing Agent, to certain private investors at a price of HK$0.075 per share, raising a total of HK$34,500,000 (before expenses) (note 45(b)).

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

At 1 April 2006 Conversion of convertible notes Bonus issue Repurchases of shares Placements of shares Share issue expenses At 31 March and 1 April 2007 Exercise of share options (a) Subdivision of shares (b) Conversion of convertible notes (c) Repurchases of shares (d) Share issue expenses At 31 March 2008	Number of shares in issue 224,544,439 1,800,000 22,634,443 (19,300,000) 64,500,000 –	Issued share capital HK$’000 22,454 180 2,264 (1,930) 6,450 –	Share premium account HK$’000 422,291 3,822 (2,264) (43,087) 174,150 (5,300)	Total HK$’000 444,745 4,002 – (45,017) 180,600 (5,300) 579,030 8,694 – 52,352 (21,506) (160) 618,410
	294,178,882 143,391,600 5,625,263,158 528,000,000 (180,600,000) –	29,418 896 – 2,640 (903) –	549,612 7,798 – 49,712 (20,603) (160)	579,030 8,694 – 52,352 (21,506 (160
	6,410,233,640	32,051	586,359

Share options

Details of the Company’s share option scheme are set out in note 37 to the financial statements.

Warrants

On 15 May 2007, the Company entered into a warrant agreement (the “Warrant Agreement”) with Lehman Brothers Commercial Corporation Asia Limited and pursuant to which the Company agreed to issue a total of 10 million warrants attaching the rights to subscribe for 10 million ordinary shares (before the share subdivision as discussed in note 36(b) above) of the Company for a total warrants’ issue price of HK$4,500,000.

– I-61 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Warrant Agreement was completed on 31 May 2007 and a total of 200 million warrants (adjusted for the effect of the share subdivision as discussed in note 36(b) above) attaching the rights to subscribe for 200 million ordinary shares of the Company were issued.

No warrants was exercised during the year and all the 200 million warrants were outstanding at 31 March 2008. The exercise in full of such warrants would, under the present capital structure of the Company, result in the issue of 200 million additional shares of HK$0.005 each.

37. SHARE OPTION SCHEME

The Company operates a share option scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations. On 3 May 2002, the Company approved a share option scheme (the “Scheme”) under which eligible participants include any director or proposed director (whether executive or non-executive, including independent non-executive director), employee or proposed employee (whether full-time or part-time), secondee, any holder of securities issued by any member of the Group, any business or joint venture partner, contractor, agent or representative, any person or entity that provides research, development or other technology support or advisory, consultancy, professional or other services to the Group, any supplier, producer or licensor of goods or services to the Group, any customer, licensee (including any sub-licensee) or distributor of goods or services of the Group, or any landlord or tenant (including any sub-tenant) of the Group or any substantial shareholder or company controlled by a substantial shareholder, or any company controlled by one or more persons belonging to any of the above classes of participants. The Scheme became effective on 3 May 2002 and, unless otherwise terminated earlier by shareholders in a general meeting, will remain in force for a period of 10 years from that date.

Pursuant to the Scheme, the maximum number of share options that may be granted under the Scheme and any other share option schemes of the Company is an amount equivalent, upon their exercise, not in aggregate exceed 10% of the issued share capital of the Company from time to time, excluding any shares issued on the exercise of share options.

The maximum number of shares issuable under share options to each eligible participant (except for a substantial shareholder or an independent non-executive director or any of their respective associates) under the Scheme within any 12-month period is limited to 1% of the shares of the Company in issue at any time. Any further grant of share options in excess of such limit must be separately approved by shareholders with such eligible participant and his associates abstaining from voting.

Share options granted to a director, chief executive or substantial shareholder of the Company (or any of their respective associates) must be approved by the independent non-executive directors (excluding any independent non-executive director who is the grantee of the option). Where any grant of share options to a substantial shareholder or an independent non-executive director (or any of their respective associates) will result in the total number of shares issued and to be issued upon exercise of share options already granted and to be granted to such person under the Scheme and any other share option schemes of the Company (including options exercised, cancelled and outstanding) in any 12-month period up to and including the date of grant representing in aggregate over 0.1% of the shares in issue, and having an aggregate value, based on the closing price of the Company’s shares at each date of grant, in excess of HK$5 million, such further grant of share options is required to be approved by shareholders in a general meeting in accordance with the Listing Rules. Any change in the terms of a share option granted to a substantial shareholder or an independent non-executive director (or any of their respective associates) is also required to be approved by shareholders.

An offer for the grant of share options must be accepted within 30 days from the date on which such offer was made. The amount payable by the grantee of a share option to the Company on acceptance of the offer of the grant is HK$1.00.

The option price per share payable on the exercise of an option is determined by the directors provided that it shall be at least the higher of (i) the closing price of the shares as stated in the daily quotation sheet issued by the Stock Exchange at the date of offer of grant (which is deemed to be the date of grant if the offer for the grant of a share option is accepted by the eligible person), which must be a business day; and (ii) the average closing price of the shares as stated in the daily quotation sheets issued by the Stock Exchange for the five business days immediately preceding the date of offer of grant, provided that the option price per share shall in no event be less than the nominal amount of one share.

Share options do not confer rights on the holders to dividends or to vote at shareholders’ meetings.

– I-62 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

	2008		2007
	Weighted		Weighted
	average		average
	exercise	Number of	exercise	Number of
	price	options	price	options
	HK$	’000	HK$	’000
	per share
At 1 April	2.0502	32,547	1.0670	12,588
Adjustment arising from bonus issue	–	–	–	1,259
Adjustment arising from subdivision of
shares	–	582,525	–	–
Granted during the year	0.1670	7,150	2.8500	18,700
Exercised during the year	0.0606	(143,392)	–	–
At 31 March	0.1237	478,830	2.0502	32,547

The exercise prices and exercise periods of the share options outstanding as at that balance sheet date are as follows:

2008

options	Exercise price*	Exercise period
’000	HK$
	per share
97,680	0.0485	12/11/2004 to 11/11/2014
374,000	0.1425	1/3/2007 to 28/2/2017
7,150	0.1670	2/1/2009 to 1/1/2013
478,830

2007

options	Exercise price*	Exercise period
’000	HK$
	per share
13,847	0.9700	12/11/2004 to 11/11/2014
18,700	2.8500	1/3/2007 to 28/2/2017
32,547

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

– I-63 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The fair value of the share options granted during the year was HK$467,000 (2007: HK$7,633,000) of which the Group recognised a share option expense of HK$64,000 (2006: HK$7,633,000) during the year ended 31 March 2008.

The fair value of equity-settled share options granted in the current year was estimated as at the date of grant, using a binomial model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used for the year ended 31 March 2008:

	2008	2007
Expected dividend yield (%)	1.00	4.73
Expected volatility (%)	57.00	23.29
Risk-free interest rate (%)	2.60 – 3.10	4.00
Exit rate of employees (%)	–	15.00

The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other feature of the options granted was incorporated into the measurement of fair value.

The 143,391,600 share options exercised during the year resulted in the issue of 143,391,600 ordinary shares of the Company and new share capital of HK$896,000 and share premium of HK$7,798,000 (before issue expenses), as further detailed in note 36 to the financial statements.

At the balance sheet date, the Company had 478,830,000 (2007: 32,546,800) share options outstanding under the Scheme. The exercise in full of these share options would, under the then capital structure of the Company, result in the issue of 478,830,000 (2007: 32,546,800) additional ordinary shares of the Company and additional share capital of HK$2,394,000 (2007: HK$3,255,000) and share premium of HK$56,832,000 (2007: HK$63,472,000) (before issue expenses).

At the date of approval of these financial statements, the Company had 584,982,964 share options available for issue under the Scheme which represented approximately 7.4% of the Company’s shares in issue as at that date.

38. RESERVES

(a) Group

The amounts of the Group’s reserves and the movements therein for the current and prior years are presented in the consolidated statement of changes in equity on page 32 of the financial statements.

Certain amounts of goodwill arising on the acquisition of subsidiaries and associates in prior years remain eliminated against consolidated reserves, as explained in note 18 to the financial statements.

– I-64 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Company

Notes At 1 April 2006 Final 2006 dividend declared 12 Conversion of convertible notes 36 Bonus issue 36 Repurchases of shares 36 Placements of shares 36 Share issue expenses 36 Equity-settled share option arrangements 37 Profit for the year Interim 2007 dividend 12 Proposed final 2007 dividend 12 At 31 March and 1 April 2007 Final 2007 dividend declared Conversion of convertible notes 36 Issue of warrants 36 Exercise of share options 36 Repurchases of shares 36 Share issue expenses 36 Equity-settled share option arrangements 37 Profit for the year Interim 2008 dividend 12 Proposed final 2008 dividend 12 At 31 March 2008	Share premium account Contributed surplus (Note) HK$’000 HK$’000 422,291 121,364 – – 3,822 – (2,264) – (43,087) – 174,150 – (5,300) – – – – – – – – –	Share premium account Contributed surplus (Note) HK$’000 HK$’000 422,291 121,364 – – 3,822 – (2,264) – (43,087) – 174,150 – (5,300) – – – – – – – – –	Share option reserve HK$’000 – – – – – – – 7,633 – – –	warrant reserve HK$’000 – – – – – – – – – – –	Retained profits HK$’000 92,027 (126) – – – – – – 127,230 (7,073) (19,540)	Proposed final dividend HK$’000 15,718 (15,718) – – – – – – – – 19,540	Total HK$’000 651,400 (15,844) 3,822 (2,264) (43,087) 174,150 (5,300) 7,633 127,230 (7,073) –
	549,612 – 49,712 – 7,798 (20,603) (160) – – – –	121,364 – – – – – – – – – –	7,633 – – – – – – 64 – – –	– – – 4,500 – – – – – – –	192,518 – – – – – – – 180,187 (10,319) (7,868)	19,540 (19,540) – – – – – – – – 7,868	890,667 (19,540) 49,712 4,500 7,798 (20,603) (160) 64 180,187 (10,319) –
	586,359	121,364	7,697	4,500	354,518	7,868	1,082,306

Note: The contributed surplus of the Company originally derived from the difference between the nominal value of the share capital and share premium of the subsidiaries acquired pursuant to the Group’s reorganisation on 6 February 1995 and the par value of the Company’s shares issued in exchange therefor. Under the Companies Act 1981 of Bermuda (as amended), the contributed surplus is distributable to shareholders under certain circumstances.

39. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

(a) Major non-cash transaction

During the year, all the outstanding convertible notes with a face value of HK$48,000,000 (2007: HK$3,600,000) were converted into 528,000,000 (2007: 1,800,000) new shares of the Company.

– I-65 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Acquisition of a subsidiary

Pursuant to the Shareholder Agreement dated 6 January 2007 entered into between the Group and the existing shareholders of Xuzhou Yuan Yang Trading Development Company Limited (“Xuzhou Yuan Yang”), the Group injected capital amounting to RMB35.7 million into Xuzhou Yuan Yang and obtained a 51% stake in the enlarged capital of Xuzhou Yuan Yang (the “Capital Injection”). Xuzhou Yuan Yang is principally engaged in the development, operation and management of an agricultural by-products wholesale market and related facilities, and rental of properties.

The Capital Injection was completed in August 2007 and Xuzhou Yuan Yang became a 51%-owned subsidiary of the Group.

The fair values of the identifiable assets and liabilities of Xuzhou Yuan Yang as at the date of acquisition and the corresponding carrying amounts immediately before the acquisition were as follows:

Notes Net assets acquired: Property, plant and equipment 14 Investment properties 16 Trade receivables Other receivables Cash and cash equivalents Other payables and accruals Minority interests Goodwill on acquisition 18 Satisfied by cash	2008 Fair value recognised on acquisition Carrying amount HK$’000 HK$’000 11,969 11,776 20,019 19,678 201 201 6,429 6,429 39,886 39,886 (28,704) (28,704) 49,800 49,266 (24,402) 11,444 36,842	2008 Fair value recognised on acquisition Carrying amount HK$’000 HK$’000 11,969 11,776 20,019 19,678 201 201 6,429 6,429 39,886 39,886 (28,704) (28,704) 49,800 49,266 (24,402) 11,444 36,842	2008 Fair value recognised on acquisition Carrying amount HK$’000 HK$’000 11,969 11,776 20,019 19,678 201 201 6,429 6,429 39,886 39,886 (28,704) (28,704) 49,800 49,266 (24,402) 11,444 36,842
		)
	36,842

An analysis of the net outflow of cash and cash equivalents in respect of the acquisition of a subsidiary is as follows:

Cash consideration Cash and bank balances acquired Net inflow of cash and cash equivalents in respect of the acquisition of a subsidiary	2008 HK$’000 (36,842) 39,886 3,044

Since its acquisition, Xuzhou Yuan Yang contributed HK$11,913,000 to the Group’s turnover and HK$4,091,000 to the consolidated profit for the year ended 31 March 2008.

There would have been no significant differences to the Group’s consolidated profit for the year had the acquisition taken place at the beginning of the year.

– I-66 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(c) Disposal of subsidiaries

Notes Net assets disposed of: Property, plant and equipment 14 Investment properties 16 Inventories Trade receivables Deposits and other receivables Cash and cash equivalents Trade and other payables Tax payable Dividends payable Goodwill released on disposal 18 Gain on disposal of subsidiaries Satisfied by: Cash Expenses incurred	2007 HK$’000 180 10,200 10 43 1,339 1,978 (1,315) (195) (633) 11,607 4,044 2,524 18,175 18,200 (25) 18,175

An analysis of the net inflow of cash and cash equivalents in respect of the disposal of subsidiaries is as follows:

Cash consideration Dividends received Expenses incurred Cash and cash equivalents disposed of Net inflow of cash and cash equivalents in respect of the disposal of subsidiaries	2007 HK$’000 18,200 633 (25) (1,978) 16,830

– I-67 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

40. CONTINGENT LIABILITIES

At the balance sheet date, contingent liabilities not provided for in the financial statements were as follows:

Company
	2008	2007
	HK$’000	HK$’000
Guarantees given to financial institutions in connection
with facilities granted to subsidiaries	577,371	483,162

(b) The Group has a contingent liability in respect of possible future long service payments to employees under the Hong Kong Employment Ordinance, with a maximum possible amount of HK$799,000 (2007: HK$714,000) as at 31 March 2008, as further explained under the heading “Employee benefits” in note 2.4 to the financial statements. The contingent liability has arisen because, at the balance sheet date, a number of current employees had achieved the required number of years of service to the Group in order to be eligible for long service payments under the Employment Ordinance if their employment is terminated under certain circumstances. A provision has not been recognised in respect of such possible payments, as it is not considered probable that the situation will result in a material future outflow of resources from the Group.

41. OPERATING LEASE ARRANGEMENTS

(a) As lessor

The Group leases it investment properties (note 16), sub-leases Chinese wet markets, shopping centres and car parks under operating lease arrangements, with leases negotiated for terms ranging from three months to five years. The terms of the leases generally also require the tenants to pay security deposits and provide for periodic rental adjustments according to the then prevailing market conditions.

At the balance sheet date, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

Within one year In the second to fifth years, inclusive After five years	Group 2008 2007 HK$’000 HK$’000 95,137 64,937 13,791 88,835 1,660 12,430 110,588 166,202	Group 2008 2007 HK$’000 HK$’000 95,137 64,937 13,791 88,835 1,660 12,430 110,588 166,202
		166,202

– I-68 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) As lessee

The Group leases certain Chinese wet markets, shopping centres, car parks and certain of its office properties under operating lease arrangements. Leases are negotiated for terms ranging from three months to seven years.

At the balance sheet date, the Group had total future minimum lease payments under non-cancellable operating leases falling due as follows:

Within one year In the second to fifth years, inclusive After five years	Group 2008 2007 HK$’000 HK$’000 65,042 110,710 101,366 91,551 10,949 – 177,357 202,261	Group 2008 2007 HK$’000 HK$’000 65,042 110,710 101,366 91,551 10,949 – 177,357 202,261
		202,261

42. COMMITMENTS

In addition to the operating lease commitments detailed in note 41(b) above, the Group had the following capital commitments at the balance sheet date:

Contracted, but not provided for: Capital expenditure on property, plant and equipment Capital expenditure for properties under development Capital expenditure for construction of investment properties in Mainland China Acquisition of investment properties Investment in a subsidiary Investment in an associate Acquisition of a subsidiary Acquisition of associates	Group 2008 2007 HK$’000 HK$’000 803 – 10,856 31,693 53,643 – 49,842 – – 39,190 18,787 – – 36,218 63,470 – 197,401 107,101	Group 2008 2007 HK$’000 HK$’000 803 – 10,856 31,693 53,643 – 49,842 – – 39,190 18,787 – – 36,218 63,470 – 197,401 107,101
		107,101

At the balance sheet date, the Company did not have any significant commitments.

– I-69 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

43. RELATED PARTY TRANSACTIONS

In addition to the transactions and balances detailed elsewhere in these financial statements, the Group had the following material transactions with related parties during the year:

(a) Transactions with related parties

		2008	2007
	Notes	HK$’000	HK$’000
Rental income received from a director	(i)	802	600
Income from associates:	(ii)
Management fee		996	996
Rental		1,657	1,044
Management fee income from companies
that were significantly influenced by
an executive director of the Company	(ii)	960	–
Rental expenses paid to an associate	(ii)	1,920	1,845

Notes:

(i) Certain investment properties of the Group were leased to a director at an agreed monthly rental range from HK$50,000 to HK$82,000 (2007: HK$50,000). The rental was determined with reference to the prevailing market rates.
(ii) The transactions were based on terms mutually agreed between the Group and the related parties.
(b) On 7 January 2008, the Group entered into an agreement (the “Land Disposal Agreement”) with Joyful Leap Investments Limited (“Joyful”), a wholly-owned subsidiary of LeRoi Holdings Limited (an associate of WYTH and significantly influenced by an executive director of the Company), for the disposal of the entire equity interest in Brightest Investments Limited (“Brightest Investments”), a wholly-owned subsidiary of the Group, at an aggregate consideration of HK$240 million. Brightest Investments and its subsidiaries (collectively the “Disposal Group”) are established by the Group solely for the purpose of acquiring a parcel of land in Dongguan (the “Dongguan Land”) from the Dongguan Bureau of Land and Resources and have not commenced any operations other than matters in relation to obtaining the right to acquire the Dongguan Land.

The Land Disposal Agreement was completed on 10 January 2008 when the Disposal Group obtained the land use right certificate of the Dongguan Land.

(c) Details of the Group’s balances with associates as at the balance sheet date are disclosed in note 20 to the financial statements.

– I-70 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(d) Compensation of key management personnel of the Group

Short term employment benefits Post-employment benefits	2008 HK$’000 4,172 75 4,247	2007 HK$’000 5,509 82
		5,591

The above compensation of key management personnel excludes the directors’ remuneration, details of which are set out in note 8 to the financial statements.

44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial instruments, other than derivatives, comprise bank loans and overdrafts, convertible notes, and cash and short term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk, liquidity risk and equity price risk. The board of directors reviews and agrees policies for managing each of these risks and they are summarised below. The Group’s accounting policies in relation to derivatives are set out in note 2.4 to the financial statements.

Interest rate risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s debt obligations with a floating interest rate.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group’s profit before tax (through the impact on floating rate borrowings). There is no material impact on other components of the Group’s equity.

	Group
		Increase/
	Increase/	(decrease)
	(decrease) in	in profit
	basis points	before tax
		HK$’000
2008
Hong Kong dollar	100	(4,968)
Renminbi	100	(499)
Hong Kong dollar	(100)	4,968
Renminbi	(100)	499
2007
Hong Kong dollar	100	(4,982)
Hong Kong dollar	(100)	4,982

– I-71 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Foreign currency risk

The Group has minimal transactional currency exposure arising from sales or purchases by operating units in currencies other than the units’ functional currency, and hence it does not have any foreign currency hedging policies.

Part of the Group’s turnover and operating expenses are denominated in Renminbi (“RMB”), which is currently not a freely convertible currency. The PRC Government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of Mainland China. Shortages in the availability of foreign currencies may restrict the ability of the Group’s PRC subsidiaries and jointly-controlled entities to remit sufficient foreign currencies to pay dividends or other amounts to the Group.

Under existing PRC foreign exchange regulations, payments of current account items, including dividends, trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State Administration for Foreign Exchange Bureau by complying with certain procedural requirements. However, approval from appropriate PRC governmental authorities is required where RMB is to be converted into a foreign currency and remitted out of Mainland China to pay capital account items, such as the repayment of bank loans denominated in foreign currencies.

Currently, the Group’s PRC subsidiaries and jointly-controlled entities may purchase foreign exchange for settlement of current account transactions, including payment of dividends to the Company, without prior approval of the State Administration for Foreign Exchange Bureau. The Group’s PRC subsidiaries and jointly-controlled entities may also retain foreign currencies in their current accounts to satisfy foreign currency liabilities or to pay dividends. Since foreign currency transactions on the capital account are still subject to limitations and require approval from the State Administration for Foreign Exchange Bureau, this could affect the Group’s subsidiaries and jointly-controlled entities’ ability to obtain required foreign exchange through debt or equity financing, including by means of loans or capital contributions from us.

There are limited hedging instruments available in the PRC to reduce the Group’s exposure to exchange rate fluctuations between RMB and other currencies. To date, the Group has not entered into any hedging transactions in an effort to reduce the Group’s exposure to foreign currency exchange risks. While the Group may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and the Group may not be able to hedge the Group’s exposure successfully, or at all.

The following table demonstrates the sensitivity at the balance sheet date to a reasonably possible change in the RMB exchange rate, with all other variables held constant, of the Group’s profit before tax (due to changes in the fair value of monetary assets and liabilities).

– I-72 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

		Group	Group
		Increase/		Increase/
	(decrease) in			(decrease)
	basis points		in	profit before
		rate		tax
		%		HK$’000
2008
If Euro strengthens against HK$		17.058		1,750
If Euro weakens against HK$		(17.058)		(1,750)
If HK$ strengthens against RMB		9.023		3,989
If HK$ weakens against RMB		(9.023)		(3,989)
2007
If GBP strengthens against HK$		8.734		1,199
If GBP weakens against HK$		(8.734)		(1,199)

Credit risk

The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, available-for-sale financial assets, financial assets at fair value through profit or loss, amounts due from associates, other receivables and certain derivative instruments, arises from default of the counterparty, with a maximum exposure equal to the carrying amounts of these instruments.

Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral. Concentrations of credit risk are managed by customer/counterparty and by industry sector. There are no significant concentrations of credit risk within the Group as the customer bases of the Group’s trade receivables are widely dispersed in different sectors and industries.

Further quantitative data in respect of the Group’s exposure to credit risk arising from trade and other receivables are disclosed in notes 25 and 26 respectively, to the financial statements.

Liquidity risk

The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial instruments and financial assets (e.g. trade receivables) and projected cash flows from operations.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and convertible notes.

– I-73 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The maturity profile of the Group’s financial liabilities as at the balance sheet date, based on the contracted undiscounted payments, was as follows:

Interest-bearing bank loans Trade payables (note 29) Other payables (note 30)	Within 1 year or on demand HK$’000 358,552 24,624 114,298 497,474	1 to 2 years HK$’000 48,224 – – 48,224	2008 3 to 5 years HK$’000 83,327 – – 83,327	Over 5 years HK$’000 93,621 – – 93,621	Total HK$’000 583,724 24,624 114,298
					722,646

Convertible notes Interest-bearing bank loans Trade payables (note 29) Other payables (note 30)	Within 1 year or on demand HK$’000 – 403,517 23,246 11,077 437,840	1 to 2 years HK$’000 48,200 22,916 – – 71,116	2007 3 to 5 years HK$’000 – 43,208 – – 43,208	Over 5 years HK$’000 – 47,618 – – 47,618	Total HK$’000 48,200 517,259 23,246 11,077
					599,782

The maturity profile of the Company’s financial liabilities as at the balance sheet date, based on the contracted undiscounted payments, was as follows:

Interest-bearing bank loans Due to subsidiaries (note 19) Convertible notes Interest-bearing bank loans Due to subsidiaries (note 19)	Within 1 year or on demand HK$’000 138,342 – 138,342 Within 1 year or on demand HK$’000 – 139,693 – 139,693	1 to 2 years HK$’000 39,157 – 39,157 1 to 2 years HK$’000 48,200 17,029 – 65,229	2008 3 to 5 years HK$’000 75,419 – 75,419 2007 3 to 5 years HK$’000 – 14,486 – 14,486	Over 5 years HK$’000 17,503 230,258 247,761 Over 5 years HK$’000 – – 190,412 190,412	Total HK$’000 270,421 230,258
					500,679

					Total HK$’000 48,200 171,208 190,412
					409,820

– I-74 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Equity price risk

Equity price risk is the risk that the fair values of equity securities decrease as a result of changes in the levels of equity indices and the value of individual securities. The Group is exposed to equity price risk arising from individual equity investments classified as trading equity investments (note 27) as at 31 March 2008. The Group’s listed investments are listed on the Hong Kong, London, Paris, Tokyo and Singapore stock exchanges and are valued at quoted market prices at the balance sheet date.

The market equity indices for the following stock exchanges, at the close of business of the nearest trading day in the year to the balance sheet date, and their respective highest and lowest points during the year were as follows:

	31 March	High/low	31 March	High/low
	2008	2008	2007	2007
Hong Kong – Hang Seng Index	22,849	31,650/19,904	19,801	20,951/15,205
London – FTSE 100	5,702	6,752/5,414	6,308	6,435/5,467
Paris – CAC 40 Index	4,707	6,168/4,417	5,634	5,772/4,565
Tokyo – Nikkei 225	12,526	18,297/11,691	17,288	18,300/14,046
Singapore – Straits Times Index	3,007	3,831/2,746	3,231	3,236/2,252

The following table demonstrates the sensitivity to a reasonably possible change in the fair values of the equity investments, with all other variables held constant and before any impact on tax, based on their carrying amounts at the balance sheet date.

	Carrying		Increase/
	amount	Increase/	(decrease)
	of equity	(decrease) in	in profit
	investments	equity price	before tax
	HK$’000	%	HK$’000
2008
Investments held-for-trading listed in:
Hong Kong	27,882	54	15,140
Hong Kong	27,882	(54)	(15,140)
London	2,338	15	355
London	2,338	(15)	(355)
Paris	1,925	23	441
Paris	1,925	(23)	(441)
Singapore	5,556	22	1,203
Singapore	5,556	(22)	(1,203)

– I-75 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

	Carrying		Increase/
	amount of	Increase/	(decrease)
	equity	(decrease) in	in profit
	investments	equity price	before tax
	HK$’000	%	HK$’000
2007
Investments held-for-trading listed in:
Hong Kong	24,721	27	6,623
Hong Kong	24,721	(27)	(6,623)
London	2,243	10	229
London	2,243	(10)	(229)
Tokyo	536	14	74
Tokyo	536	(14)	(74)
Singapore	3,089	36	1,098
Singapore	3,089	(36)	(1,098)

Capital management

The primary objective of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 March 2008 and 31 March 2007.

The Group monitors capital using a gearing ratio, which is net debt divided by the capital. The Group’s policy is to maintain the gearing ratio not exceeding 40%. Net debt is calculated as a total of interest-bearing bank borrowings and liability component of convertible notes, less cash and cash equivalents (including pledged deposits). Capital includes equity attributable to equity holders of the parent (including the equity component of convertible notes). The gearing ratios as at the balance sheet dates were as follows:

Interest-bearing bank borrowings (note 32) Liability component of convertible notes (note 34) Less: Cash and cash equivalents (note 28) Net debt Equity attributable to equity holders Gearing ratio	Group 2008 2007 HK$’000 HK$’000 546,233 498,224 – 45,756 (330,819) (466,584) 215,414 77,396 1,182,569 1,041,834 18.2% 7.4%	Group 2008 2007 HK$’000 HK$’000 546,233 498,224 – 45,756 (330,819) (466,584) 215,414 77,396 1,182,569 1,041,834 18.2% 7.4%
	215,414 1,182,569	77,396
		1,041,834
	18.2%

– I-76 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

45. POST BALANCE SHEET EVENTS

Subsequent to the balance sheet date, the Group had the following significant post balance sheet events:

(a) On 26 March 2008, Accord Power entered into a Top-up Placing and Subscription Agreement with the Placing Agent and the Company and pursuant to which Accord Power agreed to subscribe for an aggregate of 900 million new ordinary shares of the Company at a price of HK$0.075 each (the “Top-up Subscription”).
The Top-up Subscription was completed on 2 April 2008 and the Company raised a total of HK$67,500,000 (before expenses) (note 36(e)).
(b) On 22 April 2008, the Company placed an aggregate of 460 million new ordinary shares, through the Placing Agent, to certain private investors at a price of HK$0.075 per share pursuant to the agreement entered into between the Company and the Placing Agent on 26 March 2008 and raised a total of HK$34.5 million (before expenses) (note 36(f)).
(c) On 7 May 2008, Rich Time Strategy Limited (“Rich Time”), an indirect wholly-owned subsidiary of the Company, entered into a Top-up Placing and Subscription Agreement with the Placing Agent and WYTH and pursuant to which, Rich Time agreed to place, through the Placing Agent, an aggregate of 335,004,000 existing ordinary shares of WYTH to certain private investors at a price of HK$0.165 each (the “WYTH Top-up Placing”) and subscribe conditionally for an aggregate of 335,004,000 new ordinary shares of WYTH at a price of HK$0.165 each (the “WYTH Top-up Subscription”).

The WYTH Top-up Placing and the WYTH Top-up Subscription were completed on 15 May 2008 and 19 May 2008, respectively. Upon completion of the WYTH Top-up Placing and WYTH Top-up Subscription, the Group’s interests in WYTH were diluted from 28.31% to 23.59%.

46. COMPARATIVE AMOUNTS

As further explained in note 2.2 to the financial statements, due to the adoption of the new and revised HKFRSs during the current year, certain comparative amounts have been adjusted to conform with the current year’s presentation and to show separately comparative amounts in respect of items disclosed for the first time in 2008.

47. APPROVAL OF THE FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the board of directors on 15 July 2008.

– I-77 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. WORKING CAPITAL

The Directors are satisfied after due and careful enquiry that after taking into account the existing banking and other borrowing facilities available and the existing cash and bank balances, the Enlarged Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of publication of this circular, in the absence of unforeseeable circumstances.

4. INDEBTEDNESS OF THE ENLARGED GROUP

As at the close of business on 31 January 2009, being the latest practicable date for the purpose of ascertaining information contained in this indebtedness statement prior to the printing of the circular, the Enlarged Group had outstanding bank loans of approximately HK$509,070,000 and all of which were secured by the Enlarged Group’s investment properties and certain rental income generated therefrom, properties under development and properties held for sale.

Save as aforesaid and apart from intra-group liabilities and normal trade payables, as at the close of business on 31 January 2009, the Enlarged Group did not have any other debt securities issued and outstanding or authorized or otherwise created but unissued, any other term loans, any other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptance (other than normal trade bills) or acceptance credits or hire purchase commitments, any other mortgages and charges or any guarantees or material contingent liabilities.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group has embarked on various diversification projects since 2007. It achieved considerable progress in the past year in laying a more solid foundation for future growth by expanding its business to cover new areas, such as property investment and development and retailing. Looking forward, the Group will maintain its steady development and yet remain strategically focused on future expansion.

As a niche player focused on improving property rental returns in Hong Kong, the Group is well positioned to benefit from the growing opportunities in this sector. Having carried out a series of fund-raising activities, the Group has boosted its capital base which enhances its investment capability. The Group’s liquidity and equity will be further enhanced and its business will be streamlined upon the Disposal Completion. The Group is optimistic about the growth prospects of the rental business of the investment properties in Hong Kong and expects the acquisition of the Investment Properties will strengthen the Group’s recurring income base.

Despite the sluggish economic outlook, the Group remains strong on liquidity and will continue to search for attractive investment opportunities to ensure the Group’s further long-term earnings.

– I-78 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

1. FINANCIAL SUMMARY

The following is a summary of the financial information of the Everlong Group for the period from 28 December 2006 (date of incorporation) to 31 March 2007, the financial year ended 31 March 2008 and the six months ended 30 September 2008 (the “Relevant Periods”) as extracted from the accountants’ reports of Everlong, for which the auditors of Everlong, HLB Hodgson Impey Cheng, Chartered Accountant and Certified Public Accountants, expressed unqualified opinion.

Results

Period from 28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 Turnover 22 Gross profit 17 Profit/(loss) before taxation 101 Taxation – Profit/(loss) for the year/period 101 Profit/(loss) for the year/period attributable to: – Equity holders of Everlong 101 – Minority interest – 101	Year ended 31 March 2008 HK$’000 1,692	Six months ended 30 September 2007 2008 HK$’000 HK$’000 (Unaudited) 469 3,339 427 2,816 578 (6,405) (39) – 539 (6,405) 539 (6,405) – – 539 (6,405)	Six months ended 30 September 2007 2008 HK$’000 HK$’000 (Unaudited) 469 3,339 427 2,816 578 (6,405) (39) – 539 (6,405) 539 (6,405) – – 539 (6,405)
17 101 –	1,448 1,815 (330)	427 578 (39)	2,816 (6,405 –
101	1,485	539
101 –	1,485 –	539 –	(6,405 –
101	1,485	539

– II-1 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Assets and liabilities

Non-current assets Current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets/(liabilities)	As at 31 2007 HK$’000 11,720 244 11,964 11,863 – 11,863 101	March As at 30 September 2008 2008 HK$’000 HK$’000 70,534 107,774 5,198 4,335 75,732 112,109 73,816 85,020 330 31,908 74,146 116,928 1,586 (4,819)

– II-2 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

2. ACCOUNTANTS’ REPORT OF THE EVERLONG GROUP

The following is the text of a report, prepared for the sole purpose of incorporation in this circular, received from the independent reporting accountants, HLB Hodgson Impey Cheng, Chartered Accountants, Certified Public Accountants, Hong Kong.

==> picture [189 x 72] intentionally omitted <==

31/F Gloucester Tower 11 Pedder Street Central Hong Kong

The Board of Directors Wang On Group Limited 5/F., Wai Yuen Tong Medicine Building 9 Wang Kwong Road Kowloon Bay Kowloon Hong Kong

Dear Sirs,

We set out below our report on the Financial Information of Everlong Limited (“Everlong”) and its subsidiaries (collectively “the Everlong Group”) for the period from 28 December 2006 (date of incorporation) to 31 March 2007, the year ended 31 March 2008 and the six months ended 30 September 2008 (collectively the “Relevant Periods”) and comparative financial information of the Everlong Group for the six months ended 30 September 2007, prepared on the basis set out in Note 2 of Section I below, for inclusion in the circular of Wang On Group Limited dated 6 March 2009 in connection with the proposed disposal of 100% interest in Shiney Day Investments Limited, acquisition of 100% interest in Everlong and the sale loan and provision of financial assistance (the “Circular”).

Everlong was incorporated in the British Virgin Islands with limited liability on 28 December 2006. On 10 February 2009, Everlong became the holding company of the companies now comprising the Everlong Group pursuant to the group reorganisation (the “Reorganisation”) as set out in Note 1 of Section I. During the Relevant Periods, Everlong was principally engaged in investment holding. Details of the Everlong’s interests in its subsidiaries as at the date of this report are set out in Note 16 of Section I below. The Everlong Group has adopted 31 March as its financial year end date.

No audited financial statements have been prepared for Everlong since the date of its incorporation as there is no statutory requirement for Everlong to prepare audited financial statements. The statutory financial statements or management accounts of the subsidiaries now comprising the Everlong Group were prepared in accordance with the relevant accounting principles applicable to these companies in their respective jurisdictions. Details of their statutory auditors during the Relevant Periods were set out in Note 16 of Section I below.

– II-3 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

BASIS OF PREPARATION

For the purpose of this report, the directors of Everlong have prepared the combined management accounts (the “HKFRS Combined Management Accounts”) of the Everlong Group for the Relevant Periods and the six months ended 30 September 2007 in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

The Financial Information set out in this report, including the combined income statements, the combined statements of changes in equity and the combined cash flow statements of the Everlong Group for each of the Relevant Periods and the six months ended 30 September 2007 and the combined balance sheets of the Everlong Group as at 31 March 2007 and 2008 and 30 September 2008, together with the notes thereto (collectively the “Financial Information”) have been prepared based on the HKFRS Combined Management Accounts and in accordance with the basis of preparation as set out in Note 2 of Section I below.

As at the date of this report, Everlong has direct and indirect interests in the subsidiaries as set out on page II-34 below.

RESPONSIBILITY OF THE DIRECTORS

The directors of Everlong are responsible for the preparation and the true and fair presentation of the Financial Information in accordance with HKFRSs issued by the HKICPA. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and the true and fair presentation of Financial Information that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

RESPONSIBILITY OF REPORTING ACCOUNTANTS

For the financial information for the period from 28 December 2006 (date of incorporation) to 31 March 2007, the year ended 31 March 2008 and the six months ended 30 September 2008, our responsibility is to express an opinion on the financial information based on our audit and to report our opinion to you. We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the HKICPA and carried out such additional procedures as we considered necessary in accordance with the Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial information is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on the reporting accountants’ judgement, including the assessment of the risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation and true and fair presentation of the financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting polices used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial information.

– II-4 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

For the purpose of this report, we have reviewed the comparative financial information of the Everlong Group including the combined income statement, combined statement of changes in equity and combined cash flow statement for the six months ended 30 September 2007, together with the notes thereto (the “Unaudited Comparative Financial Information”), for which the directors of Everlong are responsible, in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the financial information for the six months ended 30 September 2007.

OPINION AND REVIEW CONCLUSION

In our opinion, the Financial Information for the Relevant Periods, for the purpose of this report, gives a true and fair view of the state of affairs of Everlong and the combined state of affairs of the Everlong Group as at 31 March 2007 and 2008 and 30 September 2008 and of the combined results and cash flows of the Everlong Group for the year and periods then ended.

On the basis of our review which does not constitute an audit, for the purpose of this report, nothing has come to our attention that causes us to believe that the Unaudited Comparative Financial Information for the six months ended 30 September 2007 is not prepared, in all material respects, in accordance with Hong Kong Financial Reporting Standards.

– II-5 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

I. FINANCIAL INFORMATION OF THE EVERLONG GROUP

Combined Income Statements

Period from 28 December 2006 (date of incorporation) to 31 March 2007 Notes HK$’000 Turnover 6 22 Cost of sales (5) Gross profit 17 Other revenue 6 4 Other income 7 26 Administrative expenses (21) Fair value changes on investment properties 75 Operating profit/(loss) 7 101 Finance costs 8 – Profit/(loss) before taxation 101 Taxation 11 – Profit/(loss) for the year/period 101 Profit/(loss) for the year/period attributable to: – Equity holders of Everlong 101 – Minority interest – 101	Year ended 31 March 2008 HK$’000 1,692 (244)	Six months ended 30 September 2007 2008 HK$’000 HK$’000 (Unaudited) 469 3,339 (42) (523) 427 2,816 60 155 – – (193) (707) 284 (8,270) 578 (6,006) – (399) 578 (6,405) (39) – 539 (6,405) 539 (6,405) – – 539 (6,405)	Six months ended 30 September 2007 2008 HK$’000 HK$’000 (Unaudited) 469 3,339 (42) (523) 427 2,816 60 155 – – (193) (707) 284 (8,270) 578 (6,006) – (399) 578 (6,405) (39) – 539 (6,405) 539 (6,405) – – 539 (6,405)
17 4 26 (21) 75 101 – 101 –	1,448 96 – (1,615) 1,886 1,815 – 1,815 (330)	427 60 – (193) 284 578 – 578 (39)	2,816 155 – (707 (8,270
			(6,006 (399
			(6,405 –
101	1,485	539
101 –	1,485 –	539 –	(6,405 –
101	1,485	539

– II-6 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Combined Balance Sheets

As at 31 2007 HK$’000 – 11,720	March 2008 HK$’000 284 70,250	As at 30 September 2008 HK$’000 254 107,520 107,774 28 1,083 3,224 4,335 (1,550) (79,836) (3,634) (85,020) (80,685) 27,089 (330) (31,578) (31,908) (4,819) – (4,819) (4,819)
11,720 – 170 74 244 (256) (11,607) – (11,863) (11,619) 101 – – –	70,534 23 3,836 1,339 5,198 (1,080) (72,736) – (73,816) (68,618) 1,916 (330) – (330)	107,774
		28 1,083 3,224
		4,335
		(1,550 (79,836 (3,634
		(85,020
		(80,685
		27,089
		(330 (31,578
		(31,908
101	1,586
– 101	– 1,586	– (4,819
101	1,586

– II-7 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Balance Sheets

As at 31 2007 HK$’000 –	March 2008 HK$’000 –	As at 30 September 2008 HK$’000 – 4 (25) (21) (21) (21) – (21) (21)
– (6) (6) (6)	10 (25) (15) (15)	4
		(25
		(21
		(21
(6)	(15)
– (6)	– (15)	– (21
(6)	(15)

– II-8 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Combined Statements of Changes in Equity

Share capital Retained profits/ (Accumulated losses) HK$’000 HK$’000 – – – 101	Share capital Retained profits/ (Accumulated losses) HK$’000 HK$’000 – – – 101	Total equity HK$’000 – 101 101 1,485 1,586 (6,405) (4,819) Total equity HK$’000 101 539 640
– – – –	101 1,485 1,586 (6,405)	101 1,485
		1,586 (6,405
– (unaudited) Share capital HK$’000 – – –	(4,819) Retained profits HK$’000 101 539 640

– II-9 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Combined Cash Flow Statements

Period from 28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 CASH FLOWS FROM OPERATING ACTIVITIES Profit/(loss) before taxation 101 Adjustments for: Depreciation – Negative goodwill (26) Interest income – Fair value changes on investment properties (75) Finance costs – Operating (loss)/profit before working capital changes – Increase in trade receivables – (Increase)/decrease in prepayments, deposits and other receivables (127) Increase in amount due to immediate holding company 11,607 Increase in accruals and other payables 164 Cash generated from operations 11,644 Interest paid – Net cash generated from operating activities 11,644 CASH FLOWS FROM INVESTING ACTIVITIES Interest received – Purchases of property, plant and equipment – Purchase of investment properties (1,105) Acquisition of a subsidiary (10,465) Net cash used in investing activities (11,570)	Year ended 31 March 2008 HK$’000 1,815 15 – (1) (1,886) –	Six months ended 30 September 2007 2008 HK$’000 HK$’000 (Unaudited) 578 (6,405) – 30 – – – – (284) 8,270 – 399 294 2,294 (14) (5) (1,940) 2,753 12,470 7,100 54 470 10,864 12,612 – (399) 10,864 12,213 – – – – (10,566) (45,540) – – (10,566) (45,540)	Six months ended 30 September 2007 2008 HK$’000 HK$’000 (Unaudited) 578 (6,405) – 30 – – – – (284) 8,270 – 399 294 2,294 (14) (5) (1,940) 2,753 12,470 7,100 54 470 10,864 12,612 – (399) 10,864 12,213 – – – – (10,566) (45,540) – – (10,566) (45,540)
– – (127) 11,607 164 11,644 – 11,644 – – (1,105) (10,465) (11,570)	(57) (23) (3,666) 61,129 824 58,207 – 58,207 1 (299) (56,644) – (56,942)	294 (14) (1,940) 12,470 54 10,864 – 10,864 – – (10,566) – (10,566)	2,294 (5 2,753 7,100 470
			12,612 (399
			12,213
			– – (45,540 –
			(45,540

– II-10 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Period from 28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 CASH FLOWS FROM FINANCING ACTIVITIES Received interest-bearing loans from bank – Repayment of interest-bearing bank loans – Net cash generated from investing activities – Net increase in cash and cash equivalents 74 Cash and cash equivalents at the beginning of the year/period – Cash and cash equivalents at the end of the year/period 74 Analysis of the balances of cash and cash equivalents Cash and bank balances 74	Year ended 31 March 2008 HK$’000 – – – 1,265 74 1,339 1,339	Six months ended 30 September 2007 2008 HK$’000 HK$’000 (Unaudited) – 36,450 – (1,238) – 35,212 298 1,885 74 1,339 372 3,224 372 3,224

– II-11 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Notes to Financial Information

1. GENERAL INFORMATION

Everlong is a limited liability company incorporated in the British Virgin Islands. The registered office of the Company is located at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. The Everlong Group is principally engaged in property investment (the “Relevant Business”).

Prior to the Reorganisation (as defined below), the Relevant Business was carried out by the subsidiaries now comprising the Everlong Group (the “Relevant Subsidiaries”) which are wholly-owned by Loyal Fame International Limited (“Loyal Fame”), the immediate holding company of Everlong. Both Everlong and Loyal Fame are wholly-owned subsidiaries of LeRoi Holdings Limited (“LeRoi”), the shares of which are listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

Pursuant to a group reorganisation of Everlong and Loyal Fame, Loyal Fame transferred its entire interests in the Relevant Subsidiaries to Everlong at an aggregate consideration of US$2 on 10 February 2009 (the “Reorganisation”).

The principal place of business of Everlong is located at 5th floor, Wai Yuen Tong Medicine Building, 9 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong.

The principal activity of Evelong is investment holding. The principal activities of its subsidiaries are set out in note 16 to the Financial Information.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Financial Information have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) (which also include Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance and applicable disclosure provisions of The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). These Financial Information are presented in Hong Kong dollars and all values are rounded to the nearest thousand (“HK$’000”) except otherwise indicated.

A summary of significant accounting policies adopted by the Everlong Group in the preparation of the Financial Information is set out below:

Basis of preparation

The measurement basis used in the preparation of the Financial Information is historical cost convention except for investment properties which have been carried at fair value as explained below.

The Reorganisation involved companies under common control and Everlong and its subsidiaries resulting from the Reorganisation are regarded as a continuing group. Accordingly, this Financial Information has been prepared using the merger method of accounting as if Everlong had been the holding company of the Everlong Group from the beginning of the earliest period presented. The Financial Information presents the consolidated results, cash flows and financial position of the Everlong Group as if Everlong had been in existence throughout the Relevant Periods and the current structure had been in place as of the earliest period presented, or since the effective dates of incorporation of the companies where they were not existed at those dates.

The preparation of Financial Information in conformity with HKFRSs requires management to make judgments, estimates and assumption that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

– II-12 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Judgments made by management in the application of HKFRSs that have significant effect on the Financial Information and estimates with a significant risk of material adjustments in the next year are discussed in Note 3 to the Financial Information.

The Everlong Group incurred losses of approximately HK$6,405,000 for the period ended 30 September 2008. As at 30 September 2008, the Everlong Group incurred net liabilities of approximately HK$4,819,000. The Evelong Group’s continuance in business as a going concern is dependent upon the success of the Everlong Group’s future operations and the continuing financial support from its holding company. The Financial Information has been prepared on a going concern basis as the holding company have confirmed to provide continuing financial support to the Everlong Group to enable it to continue as a going concern and to settle its liabilities as and when they fall due.

Impact of new and revised HKFRSs

The Everlong Group has adopted, for the first time, the following new HKFRSs issued by the HKICPA, which are effective for the Everlong Group’s financial period beginning on 1 April 2008. The adoption of these new and revised standards and interpretations had no material impact on these Financial Information.

HKAS 39 & HKFRS 7 Reclassification of Financial Assets (Amendments) HK(IFRIC) – Int 11 HKFRS 2 – Group and Treasury Share Transactions HK(IFRIC) – Int 12 Service Concession Arrangements HK(IFRIC) – Int 14 HKAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

The application of the new HKFRSs had no material effect on how the results and financial position for the current or prior accounting periods have been prepared and presented. Accordingly, no prior period adjustment has been required.

Impact of new and revised HKFRSs not yet effective

		Effective for accounting
		period beginning on or
		after
HKAS 1 (Revised)	Presentation of Financial Statements	1 January 2009
HKAS 23 (Revised)	Borrowing Costs	1 January 2009
HKAS 27 (Revised)	Consolidated and Separate Financial	1 July 2009
	Statements
HKAS 32 and HKAS 1	Puttable Financial Instruments and	1 January 2009
(Amendments)	Obligations Arising on Liquidation
HKAS 39 (Amendments)	Eligible hedged items	1 July 2009
HKFRS 1 & HKAS 27	Cost of an Investment in a	1 January 2009
(Amendments)	Subsidiaries, Jointly Controlled
	Entity or Associate
HKFRS 2 (Amendments)	Share-based Payment – Vesting	1 January 2009
	Conditions and Cancellations
HKFRS 3 (Revised)	Business Combinations	1 July 2009
HKFRS 8	Operating Segments	1 January 2009
HK(IFRIC) – Int 13	Customer Loyalty Programmes	1 July 2008
HK(IFRIC) – Int 15	Arrangements for the Construction of	1 January 2009
	Real Estate
HK(IFRIC) – Int 16	Hedges of a Net Investment in	1 October 2008
	a Foreign Operation
HK(IFRIC) – Int 17	Distributions of Non-cash Assets	1 July 2009
	to Owners
HKFRSs (Amendments)	Improvements to HKFRSs	1 January 2009
		(except the amendments to
		HKFRS 5 – effective for annual
		periods beginning on or after
		1 July 2009)

– II-13 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

The management is in the process of making an assessment of the impact of these new standards, amendments and interpretations to existing standards. The directors of Everlong so far has concluded that the application of these new standards, amendments or interpretations will have no material impact on the results and the financial position of the Everlong Group.

Basis of combination

The Financial Information incorporates the financial statements of Everlong and its subsidiaries for the Relevant Periods. As explained in above, the acquisition of subsidiaries under common control has been accounted for using the merger method of accounting. The acquisition of all other subsidiaries during the Relevant Periods is accounted for using the purchase method of accounting.

The merger method of accounting involves incorporating the financial statement items of the combining entities or businesses in which the common control combination occurs as if they had been combined from the date when the combining entities or businesses first came under the control of the controlling party.

The net assets of the combining entities or businesses are combined using the existing book values. No amount is recognised in respect of goodwill or excess of acquirers’ interest in the net fair value of acquirees’ identifiable assets, liabilities and contingent liabilities over cost at the time of common control combination.

The combined income statements include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control, where this is a shorter period, regardless of the date of the common control combination.

The purchase method of accounting involves allocating the cost of a business combination to the fair value of the identifiable assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of acquisition is measured at the aggregate fair value of the assets given and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

All significant intra-group transactions and balances have been eliminated on combination.

Minority interests represent the interests of outside shareholders not held by the Everlong Group in the results and net assets of the companies now comprising the Everlong Group. When the Everlong Group acquires minority interests of its subsidiaries, the difference between the amounts of consideration and carrying values of minority interests are recognised as a reserve movement.

Subsidiaries

A subsidiary is an entity whose financial and operating policies Everlong controls, directly or indirectly, so as to obtain benefits from its activities.

The results of subsidiaries are included in Everlong’s income statement to the extent of dividends received and receivable. Everlong’s interests in subsidiaries are stated at cost less any impairment losses.

Impairment of non-financial assets (other than goodwill)

Where an indication of impairment exists, or when annual impairment testing for an asset is required, the asset’s recoverable amount is estimated. An asset’s recoverable amount is calculated as the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs to sell, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

– II-14 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

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

Investment properties

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

Gain or loss arising from changes in fair values of investment properties are included in the income statement in the period in which they arise.

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

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the assets to its location and working condition for its intended use. Expenses incurred after item of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the income statement in the period in which it is incurred. In situation where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of property, plant and equipment, and where the cost of the item can be measured reliably, the expenditure is capitalised as an additional cost of that assets or as a replacement.

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

Leasehold improvements Over the lease terms

Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately.

Residual values, useful lives and depreciation method are reviewed, and adjusted if appropriate, at each balance sheet date.

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

Investments and other financial assets

Financial assets in the scope of HKAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, and available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Everlong Group considers whether a contract contains an embedded derivative when the Everlong Group first becomes a party to it. The

– II-15 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

embedded derivatives are separated from the host contract which is not measured at fair value through profit or loss when the analysis shows that the economic characteristics and risks of embedded derivatives are not closely related to those of the host contract.

The Everlong Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at the balance sheet date.

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

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. At each balance sheet date subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective interest method, less any identified impairment losses. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction costs. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Impairment of financial assets

The Everlong Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or a group of financial assets is impaired.

Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate, being the effective interest rate computed at initial recognition. The carrying amount of the asset is reduced either directly or through the use of an allowance account. The amount of the impairment loss is recognised in the income statement.

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

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the income statement to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

In relation to trade receivables, a provision for impairment is made when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the Everlong Group will not be able to collect all of the amounts due under the original terms of an invoice. The carrying amount of the receivables is reduced through the use of an allowance account. Impaired debts are derecognised when they are assessed as uncollectible.

– II-16 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Derecognition of financial assets

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

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

Where the Everlong Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Everlong Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that Everlong Group could be required to repay.

Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Everlong Group’s continuing involvement is the amount of the transferred asset that the Everlong Group may repurchase, except in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, where the extent of the Everlong Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

Financial liabilities at amortised cost

Financial liabilities including accruals and other payables, amounts due to fellow subsidiaries, amount due to immediate holding company and interest-bearing bank loan are initially stated at fair value less directly attributable transaction costs and are subsequently measured at amortised cost, using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the amortisation process.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying value of the financial liability derecognised and the consideration paid is recognised in the income statement.

Cash and cash equivalents

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

For the purpose of the balance sheets, cash and bank balances comprise cash on hand and at banks, including term deposits, which are not restricted as to use.

– II-17 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Provisions and contingent liabilities

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 benefit is remote. Possible obligations, whose existence 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.

Income tax

Income tax for the period comprises current tax and deferred tax. Income tax is recognised in the income statement or in equity if it relates to items that are recognised in the same or a different period directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities.

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

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

where the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

– II-18 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

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

Revenue recognition

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

Rental income, on a time proportion basis over the lease terms.

Employee benefits

Paid leave carried forward

The Everlong Group provides paid annual leave to its employees under their employment contracts on a calendar year basis. Under certain circumstances, such leave which remains untaken as at the balance sheet date is permitted to be carried forward and utilised by the respective employees in the following year. No accrual is made at the balance sheet date for the expected future cost of such paid leave earned during the period by the employees and carried forward as the amount is immaterial.

Retirement benefits scheme

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

Share options scheme

The Everlong Group’s holding company, LeRoi, operates a share option scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the operation of the group comprising LeRoi and its subsidiaries.

The fair value of share options granted to employees is recognised as an employee cost with a corresponding increase in a capital reserve of the holding company within equity. The fair value is measured at grant date, taking into account the terms and conditions upon which the options were granted. Where the employees have to meet vesting conditions before becoming unconditionally entitled to the share options, the total estimated fair value of the share options is spread over the vesting periods, taking into account the probability that the options will vest.

During the vesting periods, the number of share options that is expected to vest is reviewed. On vesting date, the amount recognised as an expense is adjusted to reflect the actual number of share options that vest (with a corresponding adjustment to the capital reserve) except where forfeiture is only due to achieving conditions that relate to the market price of the holding company’s shares. The equity amount is recognised in the capital reserve of the holding company until either the option is exercised (when it is transferred to the share premium account of the holding company) or the option expires (when it is released directly to retained profits).

Borrowing costs

Borrowing costs are expensed in the income statement in the period in which they are incurred.

– II-19 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Related parties transactions

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

(a) the party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or is under common control with, the Everlong Group; (ii) has an interest in the Everlong Group that gives it significant influence over the Everlong Group; or (iii) has joint control over the Everlong Group;
(b) the party is an associate;
(c) the party is a jointly-controlled entity;
(d) the party is a member of the key management personnel of the Everlong Group or its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or
(g) the party is a post-employment benefit plan for the benefit of the employees of the Everlong Group, or of any entity that is a related party of the Everlong Group.

A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

Current assets and current liabilities

Current assets are expected to be realised within twelve months of the balance sheet date or in the normal course of the Everlong Group’s operating cycle. Current liabilities are expected to be settled within twelve months of the balance sheet date or in the normal course of the Everlong Group’s operating cycle.

Leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the Everlong Group is the lessee, rentals payable under the operating leases net of any incentives received from the lessor are charged to the income statement on the straight-line basis over the lease terms.

Foreign currencies

These financial statements are presented in the Hong Kong dollars, which is the Everlong Group’s functional and presentation currency. Foreign currency transactions are initially recorded using the functional currency rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange ruling at the balance sheet date. All differences are taken to the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgment are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Everlong Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk in causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

– II-20 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Income tax

The Everlong Group is subject to income taxes in Hong Kong. Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Everlong Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Fair value of investment properties

The best evidence of fair value is current prices in an active market for similar lease and other contracts. In the absence of such information, the Everlong Group determines the amount within a range of reasonable fair value estimates. In making its judgment, the Everlong Group considers information from a variety of sources including:

(i) current prices in an active market for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences;
(ii) recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices, and
(iii) discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of any existing lease and other contracts, and (where possible) from external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

If information on current or recent prices of investment properties is not available, the fair values of investment properties are determined using discounted cash flow valuation techniques. The Everlong Group uses assumptions that are mainly based on market conditions existing at each balance sheet date.

The principal assumptions underlying management’s estimation of fair value are those related to: the receipt of contractual rentals; expected future market rentals; void periods; maintenance requirements; and appropriate discount rates. These valuations are regularly compared to actual market yield data, and actual transactions by the Everlong Group and those reported by the market.

The expected future market rentals are determined on the basis of current market rentals for similar properties in the same location and condition.

Impairment of property, plant and equipment

In accordance with HKAS 16, the Everlong Group estimates the useful lives of property, plant and equipment in order to determine the amount of depreciation expenses to be recorded. The useful lives are estimated at the time the asset is acquired based on historical experience, the expected usage, wear and tear of the assets, as well as technical obsolescence arising from changes in the market demands or service output of the assets. The Everlong Group also performs annual reviews on whether the assumptions made on useful lives continue to be valid. The Everlong Group tests annually whether the assets have suffered any impairment. The recoverable amount of an asset or a cash generating unit is determined based on value-in-use calculations which require the use of assumptions and estimates.

– II-21 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND ESTIMATES

(a) Categories of financial instruments

Financial assets Loans and receivables (including cash and cash equivalents) Financial liabilities Amortised cost	As at 31 March 2007 2008 HK$’000 HK$’000 170 1,461 11,773 73,288	As at 30 September 2008 HK$’000 3,376

		115,409

(b) Financial risk management objectives and policies

The main risk arising from the Everlong Group’s financial instruments are market risk (including interest rate risk and foreign exchange risk), credit risk and liquidity risk. The management reviews and agrees policies for managing each of these risks and they are summarised below.

(i) Market risk

The Everlong Group’s activities expose it primarily to the financial risks of changes in interest rates and foreign currency exchange rates.

Market risk exposures are measured by sensitivity analysis.

There has been no change to the Everlong Group’s exposure to market risks or the manner in which it manages and measures the risk.

Interest rate risk management

For the period ended 30 September 2008, the Everlong Group’s interest rate risk arises from long term interest-bearing bank loans. Borrowings issued at prevailing market rates expose the Everlong Group to cash flow interest rate risk. The Everlong Group did not enter into interest rate swap to hedge against its exposures to changes in fair values of the borrowings.

For the period/year ended 31 March 2007 and 2008, the Everlong Group considers that there is no significant cash flow interest rate risk as the Everlong Group does not have variable-rate borrowings.

The Everlong Group’s exposures to interest rates on financial assets and financial liabilities are detailed in liquidity risk management section of this note.

Sensitivity analysis on interest rate risk management

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the balance sheet date. For variable-rate borrowings, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 50 basis point increase or decrease in prevailing market rates is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

– II-22 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Everlong Group’s loss for the period ended 30 September 2008 would increase/decrease by HK$2. This is mainly attributable to the Everlong Group’s exposure to interest rates on its variable rate borrowings.

The Everlong Group’s sensitivity to interest rates has increased during the period ended 30 September 2008 mainly due to the increase in variable-rate borrowings from bank.

Foreign exchange risk management

The Everlong Group has no transactional currency exposures. The Everlong Group’s markets mainly located in Hong Kong and its sales and purchases are denominated primarily in Hong Kong dollars, which does not expose the Everlong Group to foreign currency risk. The Everlong Group does not have any formal hedging policy.

(ii) Credit risk

As at 31 March 2007, 2008 and 30 September 2008, the Everlong Group’s maximum exposure to credit risk which will cause a financial loss to the Everlong Group due to failure to discharge an obligation by the counterparties is arising from the carrying amount of the respective recognised financial assets as stated in the combined balance sheet.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings by international credit-rating agency.

Other than concentration of credit risk on liquid funds which are deposited with banks with high credit ratings, the Everlong Group does not have any other significant concentration of credit risk.

(iii) Liquidity risk

The Everlong Group’s liquidity risk management includes diversifying the funding sources. Advances from holding company and interest-bearing bank loans during the Relevant Periods are the general source of funds to finance the operation of the Everlong Group. The Everlong Group regularly reviews its major funding positions to ensure that it has adequate financial resources in meeting its financial obligations.

The following table details the Everlong Group’s remaining contractual maturity for its financial assets and financial liabilities which are included in the maturity analysis provided internally to the key management personnel for the purpose of managing liquidity risk. For non-derivative financial assets, the tables have been drawn up based on the undiscounted contractual maturities of the financial assets including interests that will be earned on those assets except when the Everlong Group anticipates that the cash flow will occur in a different period. For non-derivative financial liabilities, the table reflects the undiscounted cash flows of financial liabilities based on the earliest date on which the Everlong Group can be required to pay. The tables include both interest and principal cash flows.

– II-23 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Within 1 year HK$’000 96 74 170	2 to 5 years HK$’000 – – –	Over 5 years Total undiscounted cash flows HK$’000 HK$’000 – 96 – 74 – 170	Over 5 years Total undiscounted cash flows HK$’000 HK$’000 – 96 – 74 – 170	Total carrying amount HK$’000 96 74
				170

(166) (11,607)	– –	– –	(166) (11,607)	(166 (11,607
(11,773) (11,603)	– –	– –	(11,773) (11,603)	(11,773

				(11,603

23 99 1,339	– – –	– – –	23 99 1,339	23 99 1,339
1,461	–	–	1,461	1,461

– II-24 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Within 1 year HK$’000 (552) (72,736) (73,288) (71,827)	2 to 5 years HK$’000 – – – –	Over 5 years Total undiscounted cash flows HK$’000 HK$’000 – (552) – (72,736) – (73,288) – (71,827)	Over 5 years Total undiscounted cash flows HK$’000 HK$’000 – (552) – (72,736) – (73,288) – (71,827)	Total carrying amount HK$’000 (552 (72,736
				(73,288

				(71,827

28 124 3,224	– – –	– – –	28 124 3,224	28 124 3,224
3,376	–	–	3,376	3,376

(361) (3,634) (79,836)	– (14,646) –	– (16,932) –	(361) (35,212) (79,836)	(361 (35,212 (79,836
(83,831) (80,455)	(14,646) (14,646)	(16,932) (16,932)	(115,409) (112,033)	(115,409

				(112,033

– II-25 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Fair value of financial instruments

The fair value of financial assets and financial liabilities are determined as follows:

(i) the fair value of financial assets and financial liabilities (including derivative instruments) with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market bid prices and ask prices respectively; and
(ii) the fair value of other financial assets and financial liabilities (including derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices or rates from observable current market transactions as input.

The directors consider that the carrying amounts of financial assets and financial liabilities recorded in the combined financial statements approximate their fair values.

(c) Capital risk management

The Everlong Group manages its capital to ensure that the Everlong Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Everlong Group’s overall strategy remains unchanged during the Relevant Periods.

The capital structure of the Everlong Group consists of debt (which includes borrowings), cash and cash equivalents and equity attributable to equity holders of Everlong, comprising issued share capital and reserves.

Gearing ratio

The directors review the capital structure regularly. As part of this review, the directors consider the cost of capital and the risks associated with each class of capital. During the Relevant Periods, Everlong’s strategy was to reduce the gearing ratio. This ratio is calculated base on net debt and shareholders equity. Net debt is calculated as a total of interest-bearing bank loans less cash and cash equivalents. Capital includes total equity attributable to equity holders of Everlong.

The gearing ratios at 31 March 2007, 2008 and 30 September 2008 were as follows:

Total debt (Note (i)) Less: cash in bank Total equity attributable to equity holder of Everlong Gearing ratio	At 31 March 2007 2008 HK$’000 HK$’000 – – (74) (1,339) (74) (1,339) 101 1,586 N/A N/A	At 30 September 2008 HK$’000 35,212 (3,224) 31,988 (4,819) (664%)

Note (i): Total debt comprises obligations under interest-bearing bank loans as detailed in Note 19.

– II-26 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

5. SEGMENT INFORMATION

During the Relevant Periods, over 90% of the Everlong Group’s revenue and assets were derived from the operation of property holding in Hong Kong and accordingly, no detailed analysis of the Everlong Group’s business segment and geographical segment is disclosed.

6. TURNOVER AND OTHER REVENUE

Turnover represents rental income.

An analysis of the Everlong Group’s turnover and other revenue is as follows:

Period from 28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 Turnover: Rental income 22 Other revenue: Sundry income 4 Interest income – 4 Total revenue 26	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 1,692 469 3,339	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 1,692 469 3,339	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 1,692 469 3,339
4 – 4	95 1 96	60 – 60	155 –
			155
26	1,788	529	3,494

– II-27 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

7. OPERATING PROFIT/(LOSS)

Operating profit/(loss) is stated after charging:

Period from 28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 Depreciation of owned property, plant and equipment – Auditors’ remuneration 1 Minimum lease payments under operating leases for land and buildings – Fair value loss in respect of investment properties (Note 15) – Bad debt written off – Salaries and other short-term employee benefits (excluding Directors’ remuneration – Note 9) – Retirement benefits scheme contributions – – Other income: Negative goodwill 26 Fair value gain in respect of investment properties (Note 15) 75 101	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 15 – 30 12 6 57 67 – 96 – – 8,270 – – 2	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 15 – 30 12 6 57 67 – 96 – – 8,270 – – 2	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 15 – 30 12 6 57 67 – 96 – – 8,270 – – 2

– –	240 –	120 –	525 18
–	240	120	543

26 75	– 1,886	– 284	– –
101	1,886	284	–

– II-28 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

8. FINANCE COSTS

		The Everlong Group	The Everlong Group
	Period
	from
	28 December
	2006
	(date of
	incorporation)	Year ended	Six months		ended
	to 31 March	31 March	30	September
	2007	2008	2007		2008
	HK$’000	HK$’000	HK$’000		HK$’000
			(Unaudited)
Effective interest on
interest-bearing bank loan wholly
repayable over five years	–	–		–	399

9. DIRECTORS’ REMUNERATION

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

The remuneration of every Director for the Relevant Periods is set out below:

Name of director Mr. Chan Chun Hong Mr. Cheung Wai Kai Ms. Chim Lai Fun	Basic salaries HK$’000 – – – –	Director’s fee Provident fund contributions HK$’000 HK$’000 – – – – – – – –	Total HK$’000 – – –
			–

Notes:

Mr. Chan Chun Hong was appointed on 24 January 2007.
Mr. Cheung Wai Kai was appointed on 24 January 2007.
Ms. Chim Lai Fun was appointed on 24 January 2007.

During the Relevant Periods, no emoluments were paid by the Everlong Group to the Directors as an inducement to join, or upon joining the Everlong Group, or as compensation for loss of office. None of the directors has waived any emoluments during the Relevant Periods.

– II-29 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

10. FIVE HIGHEST PAID EMPLOYEES

The emoluments paid to the five highest paid individuals of the Everlong Group during the Relevant Periods and six months ended 30 September 2007 were as follow:

Period from 28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 Basic salaries and allowances – Retirement benefits scheme contributions – –	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 240 120 525 – – 18 240 120 543	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) 240 120 525 – – 18 240 120 543
		543

The emoluments were fall within the Nil to HK$1,000,000 band.

During the Relevant Periods, no emoluments were paid by the Everlong Group to the non-director, highest paid employees as an inducement to join, or upon joining the Everlong Group, or as compensation for loss of office.

The staff cost incurred by the Everlong Group was allocated by LeRoi Group in consideration of the services provided by employees of LeRoi Group to the Everlong Group.

11. TAXATION

No provision for Hong Kong profits tax has been made as the Everlong Group incurred tax losses during the Relevant Periods. Hong Kong profits tax has been provided at the rate of 17.5% on the estimated assessable profits arising in Hong Kong during the six months ended 30 September 2007.

Period from 28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 Current tax provided for the year/period: – Deferred tax: Revaluation of properties – Total tax charge for the year/period –	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) – 39 – 330 – – 330 39 –	The Everlong Group Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 HK$’000 HK$’000 (Unaudited) – 39 – 330 – – 330 39 –
		–

– II-30 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

The tax charge for the Relevant Periods and six months ended 30 September 2007 can be reconciled to the profit/(loss) before taxation per the combined income statement as follows:

Period from

	Period from	Period from
Profit/(loss) before taxation Tax at the applicable tax rate Tax effect of income and expenses not taxable or not deductible for tax purposes Tax effect of unrecognised temporary differences Tax effect of tax losses utilised Tax effect of tax losses not recognised Tax charge at the effective tax rate for the year/ period	28 December 2006 (date of incorporation) to 31 March 2007 HK$’000 % 101		Year ended 31 March Six months ended 30 September 2008 2007 2008 HK$’000 % HK$’000 (Unaudited) % HK$’000 % 1,815 578 (6,405)
	18 (70) (34) – 86	17.5% (69.3%) (33.6%) – 85.4%	318 9 (287) – 290	17.5% 0.5% (15.8%) – 16.0%	101 36 (90) (8) –	17.5% 6.2% (15.6%) (1.4%) –	(1,057) (11) 1,167 (99) –	(16.5%) (0.2%) 18.2% (1.5%) –
	–	–	330	18.2%	39	6.7%	–	–

12. DIVIDEND

The Directors do not recommend the payment of any dividend in respect of the Relevant Periods.

13. EARNINGS PER SHARE

Earnings per share information is not presented as its inclusion, for the purpose of this report, is not considered meaningful.

– II-31 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

14. PROPERTY, PLANT AND EQUIPMENT

The Everlong Group
At Cost:
At 28 December 2006, 31 March 2007 and 1 April 2007
Additions
At 31 March 2008, 1 April 2008 and 30 September 2008
Accumulated depreciation and impairment:
At 28 December 2006, 31 March 2007 and 1 April 2007
Charge for the year
At 31 March 2008 and 1 April 2008
Charge for the period
At 30 September 2008
Net book value:
At 30 September 2008
At 31 March 2008
At 31 March 2007
15.
INVESTMENT PROPERTIES
The Everlong Group
Fair value:
At 28 December 2006
Additions
Acquisition of a subsidiary
Net increase in fair value
At 31 March 2007 and 1 April 2007
Additions
Net increase in fair value
At 31 March 2008 and 1 April 2008
Additions
Net decrease in fair value
At 30 September 2008

Leasehold
improvements
HK$’000
–
299
299
–
15
15
30
45
254
284
–
HK$’000
–
1,105
10,540
75
11,720
56,644
1,886
70,250
45,540
(8,270)
107,520

– II-32 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Investment properties were revalued at their open market values at 31 March 2008 and 2007 by Messrs Savills Valuation and Professional Services Limited and 30 September 2008 by Messrs Vigers Appraisals & Consulting Limited, independent qualified professional valuers not connected with the Everlong Group, on an open market value, existing use basis. This valuation gave rise to a gain arising from change in fair value of approximately HK$75,000 and HK$1,886,000 at 31 March 2007 and 2008 respectively and gave rise to a loss arising from change in fair value of approximately HK$8,270,000 at 30 September 2008 respectively, which have been charged to the combined income statement.

The investment properties are situated in Hong Kong under medium-term to long-term leases.

As at 30 September 2008, the Everlong Group’s investment properties with an aggregate carrying value of HK$57,800,000 were pledged to secure the Everlong Group’s general banking facilities (Note 19).

The investment properties are leased to third parties under operating lease. Property rental income earned during the years ended 31 March 2007 and 2008 and the six months period ended 30 September 2008 were approximately HK$22,000, HK$1,692,000 and HK$3,339,000 respectively. No contingent rental income was recognised during the years ended 31 March 2007 and 2008 and the six months period ended 30 September 2008.

The Everlong Group leased its investment properties under operating lease arrangements with leases terms negotiated for terms ranging from 1 to 2 years, with an option to renew the contracts according to the prevailing market conditions. Tenants are required to pay security deposits under the lease terms.

During the Relevant Periods, the Everlong Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

Within one year In the second to fifth years, Inclusive	The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 522 2,834 4,770 16 – 8 538 2,834 4,778	The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 522 2,834 4,770 16 – 8 538 2,834 4,778
		4,778

16. INVESTMENTS IN SUBSIDIARIES

					Everlong
						At 30
				At 31	March	September
				2007	2008	2008
				HK$’000	HK$’000	HK$’000
Unlisted	shares,	at	costs	–	–	–

– II-33 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Particulars of principal subsidiaries are as follows:

	Place of	Nominal value	Percentage
	incorporation/	of ordinary/	of equity
	registration	paid up	attributable to	Principal
Name	and operations	share capital	the Company	activities
Directly held
Garwell Investments	BVI	US$1	100%	Property
Limited (Note a)				holding
Ease Mind Investments	BVI	US$1	100%	Property
Limited (Note a)				holding
Indirectly held
Excellence Star Limited	Hong Kong	HK$1	100%	Property
(Note c)				holding
Allied Victory Investment	Hong Kong	HK$2	100%	Property
Limited (Note b)				holding
New Sino Investment	Hong Kong	HK$1	100%	Property
Limited (Note c)				holding
Easytex Investment	Hong Kong	HK$1	100%	Property
Limited (Note c)				holding
Winhero Investment	Hong Kong	HK$1	100%	Property
Limited (Note c)				holding
Kingtex Investment	Hong Kong	HK$1	100%	Property
Limited (Note b)				holding
Cititeam Investment	Hong Kong	HK$1	100%	Property
Limited (Note c)				holding
Samrich Investment	Hong Kong	HK$1	100%	Property
Limited (Note c)				holding
Topbo Investment Limited	Hong Kong	HK$1	100%	Property
(Note b)				holding
Goldbo Investment Limited	Hong Kong	HK$2	100%	Property
(Note b)				holding
Newbo Investment Limited	Hong Kong	HK$1	100%	Property
(Note c)				holding
Lanbo Investment Limited	Hong Kong	HK$1	100%	Property
(Note c)				holding
Allied Wide Investment	Hong Kong	HK$1	100%	Property
Limited (Note c)				holding
Hanwell Investment	Hong Kong	HK$1	100%	Property
Limited (Note c)				holding

Notes:

(a) No audited statutory financial statements have been prepared for this company since the date of its incorporation as there is no statutory requirement for it to prepare audited financial statements.
(b) The statutory financial statements for the years ended 31 March 2007 and 2008 were audited by HLB Hodgson Impey Cheng.
(c) No audited statutory financial statements have been prepared for this company since the date of its incorporation.

– II-34 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

17. TRADE RECEIVABLES

The Everlong Group’s trading terms with its customers are mainly on credit. The credit terms are generally for a period of one month. The Everlong Group seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Everlong Group’s trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. Trade receivables are non-interest bearing.

An aged analysis of the Everlong Group’s trade receivables as at the balance sheet date, based on invoice date, is as follows:

				The Everlong Group
					At 30
			At 31 March		September
			2007	2008	2008
			HK$’000	HK$’000	HK$’000
Within	90	days	–	23	28

18. AMOUNT DUE TO IMMEDIATE HOLDING COMPANY

The Everlong Group and Everlong

The amount due to immediate holding company is unsecured, interest-free and repayable on

demand.

19. INTEREST-BEARING BANK LOANS

Bank loans (secured) The maturity of the bank loans is as follows: Within one year Between one and two years Between two and five years Over five years _Less:_Amount due within one year shown under current liabilities Amount due after one year	The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 – – 35,212 The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 – – 3,634 – – 3,645 – – 11,001 – – 16,932	The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 – – 35,212 The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 – – 3,634 – – 3,645 – – 11,001 – – 16,932	The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 – – 35,212 The Everlong Group At 31 March At 30 September 2007 2008 2008 HK$’000 HK$’000 HK$’000 – – 3,634 – – 3,645 – – 11,001 – – 16,932
	– –	– –	35,212 (3,634
	–	–	31,578

– II-35 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

The effective interest rates at the balance sheet date were as follows: –

				The Everlong Group
					At 30
			At 31 March		September
			2007	2008	2008
			HK$’000	HK$’000	HK$’000
Bank	loans	(secured)
For	long	term (HK$)	–	–	HIBOR
					+1.5%p.a.
					and 2.9%p.a.

All interest-bearing bank loans of the Everlong Group are secured by the Everlong Group’s investment properties (Note 15).

In addition, LeRoi has guaranteed certain of the Everlong Group’s interest-bearing bank loans up to HK$27,000,000 as at 30 September 2008.

The carrying amounts of bank loans approximate to their fair values.

20. DEFERRED TAXATION

The Everlong Group

The following are the major deferred tax balances recognised and movements thereon during the Relevant Periods:

Deferred tax liabilities

At 28 December 2006, 31 March 2007 and 1 April 2007 Charge to combined income statement for the period At 31 March 2008 and 30 September 2008	Revaluation of properties HK$’000 – 330
	330

The Everlong Group has estimated tax losses arising in Hong Kong of approximately HK$129,000 as at 31 March 2007, approximately HK$1,797,000 as at 31 March 2008 and approximately HK$1,197,000 as at 30 September 2008 that are available indefinitely for offsetting against future taxable profits of companies in which the losses arose. No deferred tax assets have been recognised due to the unpredictability of future profits streams.

– II-36 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

21. SHARE CAPITAL

Authorised: 50,000 ordinary share of US$1 each Issued and fully paid: 1 ordinary share of US$1 each	Everlong At 31 March 2007 2008 HK$’000 HK$’000 390 390 HK$8 HK$8	At 30 September 2008 HK$’000 390

		HK$8

Everlong was incorporated with an initial authorised share capital of US$50,000 divided into 50,000 ordinary shares of US$1 each. On 28 December 2008, Everlong issued 1 ordinary share of US$1 each. The proceeds were used to provide general working capital for Everlong.

22. RESERVES

(a) The Everlong Group

The amounts of the Everlong Group’s reserves and the movement therein for the Relevant Periods are presented in the combined statement of changes in equity on page II-9 of the Financial Information.

(b) Everlong

Share capital HK$’000 – –	Accumulated losses HK$’000 – 6	Total equity HK$’000 – 6
– – – –	6 9 15 6	6 9
		15 6
–	21	21

23. ACQUISITION OF A SUBSIDIARY

For the year ended 31 March 2007

On 23 March 2007, the wholly owned subsidiary of the Everlong Group, Garwell Investments Limited, acquired 100% equity interest in Allied Victory Investment Limited (“Allied Victory”) at a consideration of HK$10,200,000 (included the shareholder’s loan in the principal amount of HK$9,980,000). The consideration was satisfied in cash. The amount of negative goodwill arising as a result of the acquisition was approximately HK$26,000.

– II-37 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Allied Victory was a wholly owned subsidiary of Wang On Group Limited which held 49% of the shareholding interests in Wai Yuen Tong Medicine Holdings Limited which held 25.32% of the shareholding interests in the Everlong Group’s ultimate holding company – LeRoi. Such acquisition constituted a major and connected transaction under the Listing Rules. For more details, please refer to LeRoi’s circular dated 5 March 2007.

The effect of net assets acquired in the transaction and the negative goodwill arising are as follows:

Net assets acquired:

	Allied Victory	Total fair value HK$’000 10,540 43 35 (92) 10,526 (26) 10,500 HK$’000 10,200 300 10,500
Acquiree’s carrying amount before combination HK$’000 10,540 43 35 (92) 10,526	Fair value adjustment HK$’000 – – – – –	Total fair value HK$’000 10,540 43 35 (92
		10,526 (26

Analysis of the net outflow in respect of the acquisition of a subsidiary:

Cash paid Bank balances and cash acquired	HK$’000 (10,500) 35 10,465

During the period ended 31 March 2007, Allied Victory contributed approximately HK$22,000 to the Everlong Group’s turnover for the period from the date of acquisition to the balance sheet date.

If the acquisition had been completed on 28 December 2006, total of the Everlong Group’s revenue for the period would have been approximately HK$126,000 and profit for the period attributable to equity holders of Everlong would have been approximately HK$621,000. The pro forma information is for illustrative purpose only and is not necessarily an indication of revenue and results of the Everlong Group that actually would have been achieved had the acquisition been completed on 28 December 2006, nor is it intended to be a projection of future results.

– II-38 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

24. CONTINGENT LIABILITIES

The Everlong Group did not have any significant contingent liabilities as at the respective balance sheet

dates.

25. MATERIAL RELATED PARTY TRANSACTIONS

During the Relevant Periods, the Everlong Group had entered into the following transactions with related parties which, in the opinion of the directors, were carried out in the ordinary course of the Everlong Group’s business.

(a) On 23 March 2007, the wholly owned subsidiary of the Everlong Group acquired 100% equity interests in Allied Victory at a total consideration of HK$10,200,000 (inclusive of shareholders’ loan in the principal amount of approximately HK$9,980,000). Allied Victory was a subsidiary of Wang On Group Limited which held 49% of the shareholding interest in Wai Yuen Tong Medicine Holdings Limited which held 25.32% of the shareholding interests in LeRoi as at 23 March 2007. For further details, please refer to LeRoi’s circular dated 5 March 2007. The transaction constitutes connected transactions under Listing Rules.

In addition to the transactions and balances disclosed elsewhere in these Financial Information, there were no other material related party transactions incurred during the Relevant Periods.

Compensation of any kind paid to the directors and other key management personnel of Everlong during the Relevant Periods were set out in note 9.

26. CAPITAL COMMITMENT

At the balance sheet date, the Everlong Group had the following capital commitments:

			The Everlong Group
		As at	As at	As at 30
		31 March	31 March	September
		2007	2008	2008
		HK$’000	HK$’000	HK$’000
Contracted	but not provided for:
Acquisition	of investment properties	657	18,602	3,867

Everlong has no material capital commitment as at 31 March 2007 and 2008 and at 30 September 2008.

27. SUBSEQUENT EVENTS

(a) The Reorganisation was completed on 10 February 2009. Further details of the Reorganisation are set out in Note 1 of these Financial Information.

II. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared for Everlong or any of it subsidiaries in respect of any period subsequent to 30 September 2008. No dividends have been declared or paid by Everlong or any of its subsidiaries in respect of any period subsequent to 30 September 2008.

Yours faithfully,

HLB Hodgson Impey Cheng Chartered Accountants Certified Public Accountants Hong Kong

– II-39 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

3. MANAGEMENT DISCUSSION AND ANALYSIS ON THE EVERLONG GROUP

The following is a discussion and analysis on the Everlong Group for the period from 28 December 2006 (being the date of incorporation) to 31 March 2008, and the six months ended 30 September 2008.

Business review for the period from 28 December 2006 (being the date of incorporation) to 30 September 2008

For the period from 28 December 2006 (being the date of incorporation) to 30 September 2008, Everlong, which was incorporated in the British Virgin Islands with limited liability, was principally engaged in investment holding. Everlong became an indirect wholly owned subsidiary of LeRoi on 24 January 2007.

As at the Latest Practicable Date, through its subsidiaries, Everlong beneficially owned the Investment Properties. The Investment Properties consist of 54 residential units located in Hong Kong with an aggregate gross floor area of approximately 32,600 square feet. All of the Investment Properties are prime residential or commercial units and the market value of the Investment Properties as at 31 January 2009 as valued by an independent valuer was approximately HK$98 million.

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008, the Everlong Group acquired a portfolio of 45 investment properties in Hong Kong which were rented out to independent third parties generating a rental income of approximately HK$1.7 million during the relevant period.

For the six months ended 30 September 2008

For the six months ended 30 September 2008, the Everlong Group further acquired 7 residential units to enhance rental income and development in the investment property business. The acquired 7 residential units, together with the 45 investment properties as mentioned above, were rented out to independent third parties generating an aggregate rental income of approximately HK$3.3 million during the relevant period.

Upon the Acquisition Completion, Everlong will become an indirect wholly owned subsidiary of the Company and the Directors expect that the Investment Properties will be rented out to independent third parties to enhance the Group’s rental income and development in its investment property business.

– II-40 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Operations review for the period from 28 December 2006 (being the date of incorporation) to 30 September 2008

Liquidity and Financial Resources

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

As at 31 March 2008, the Everlong Group had total assets of approximately HK$75.7 million and total liabilities of approximately HK$74.1 million. The Everlong Group did not have any bank borrowings as at 31 March 2008 and therefore its gearing ratio was nil as at 31 March 2008 based on the bank borrowings compared to total assets.

For the six months ended 30 September 2008

As at 30 September 2008, the Everlong Group had total assets of approximately HK$112.1 million and total liabilities of approximately HK$116.9 million. The Everlong Group had bank borrowings of approximately HK$35.2 million as at 30 September 2008 and its gearing ratio was approximately 31.4% as at 30 September 2008 based on the bank borrowings compared to total assets.

Capital structure

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

As at 31 March 2008, the Everlong Group was financed by borrowings from an immediate holding company only, which amounted to approximately HK$72.7 million.

For the six months ended 30 September 2008

As at 30 September 2008, the Everlong Group was financed by borrowings from an immediate holding company and bank, which amounted to approximately HK$79.8 million and approximately HK$35.2 million respectively.

Material Acquisition

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

On 23 March 2007, the Everlong Group, through its wholly owned subsidiary, acquired 100% equity interest in Allied Victory Investment Limited which then held 6 investment properties of the Investment Properties.

For the six months ended 30 September 2008

The Company had no material acquisitions or disposals of subsidiaries or associated companies during the relevant period.

– II-41 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Staff Cost

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

During the relevant period, the Everlong Group incurred staff cost of approximately HK$240,000 which was allocated by the LeRoi Group to the Everlong Group in consideration of the services provided by employees of the LeRoi Group to the Everlong Group.

For the six months ended 30 September 2008

During the relevant period, the Everlong Group incurred staff cost of approximately HK$525,000 which was allocated by the LeRoi Group to the Everlong Group in consideration of the services provided by employees of the LeRoi Group to the Everlong Group.

Foreign Exchange

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

During the relevant period, the Everlong Group did not have exposure to the risk of exchange rate’s fluctuations as the Everlong Group had its all assets and liabilities in term of Hong Kong dollars.

For the six months ended 30 September 2008

Contingent Liabilities

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

As at 31 March 2008, the Everlong Group did not have any significant contingent liabilities.

For the six months ended 30 September 2008

As at 30 September 2008, the Everlong Group did not have any significant contingent liabilities.

– II-42 –

FINANCIAL INFORMATION OF THE EVERLONG GROUP

APPENDIX II

Charges on assets

For the period from 28 December 2006 (being the date of incorporation) to 31 March 2008

As at 31 March 2008, the Everlong Group did not have any charges on assets.

For the six months ended 30 September 2008

As at 30 September 2008, 22 properties had been pledged for bank mortgage loan of outstanding balance of approximately HK$35.2 million.

Future Plans and Prospects

In view of the high density population and the growing demand for residential real estates in Hong Kong in the long term, the Everlong Group is optimistic about the growth prospects of investment properties in Hong Kong and expects the property market to continue to generate attractive rental income for the Everlong Group in the long term.

In this regard, the Everlong Group will continue to rent out the Investment Properties and will continue to look for potential investment opportunities in the property market in Hong Kong to enhance its business, to optimise its scope and to further strengthen its foothold in the investment property market in Hong Kong. As at the Latest Practicable Date, the Everlong Group has not identified any possible acquisitions.

– II-43 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

The following is the text of a report, prepared for the sole purpose of incorporation in this circular, received from the independent reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong.

==> picture [182 x 45] intentionally omitted <==

18th Floor Two International Finance Centre 8 Finance Street Central Hong Kong

6 March 2009

The Directors

Wang On Group Limited

Dear Sirs

We report on the unaudited pro forma statement of assets and liabilities (the “Unaudited Pro Forma Financial Information”) of Wang On Group Limited (the “Company”) and its subsidiaries and jointly-controlled entities (hereafter collectively referred to as the “Group”) set out on pages III-3 to III-5 in Appendix III of the Company’s circular dated 6 March 2009 (the “Circular”) in connection with the proposed acquisition of 100% interest in Everlong Limited (the “Acquisition”) by the Group. The Unaudited Pro Forma Financial Information has been prepared by the directors of the Company, for illustrative purposes only, to provide information about how the Acquisition might have affected the assets and liabilities of the Group if the Acquisition had taken place at 30 September 2008.

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 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants.

It is our responsibility to form an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

– III-1 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

Basis of opinion

We conducted our engagement in accordance with the Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants. Our work consisted primarily of comparing the unadjusted financial information with source documents, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. This engagement did not involve independent examination of any 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 purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Group as at 30 September 2008 or any future dates.

Opinion

In our opinion:

(i) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
(ii) such basis is consistent with the accounting policies of the Group; and
(iii) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully Ernst & Young Certified Public Accountants Hong Kong

– III-2 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

INTRODUCTION

The unaudited pro forma statement of assets and liabilities of the Enlarged Group set out below has been prepared to illustrate the effect of the Acquisition on the assets and liabilities of the Group, as if the Acquisition had taken place on 30 September 2008, and is based on the historical consolidated balance sheet of the Group and the historical combined balance sheet of the Everlong Group with further adjustments as explained in the notes below. The unaudited pro forma statement of assets and liabilities has been prepared for illustrative purposes only and, because of its nature, may not give a true picture of the financial position of the Enlarged Group.

The historical consolidated balance sheets of the Group and the historical combined balance sheet of the Everlong Group as at 30 September 2008 have been extracted from the published interim report of the Company for the period ended 30 September 2008 and the accountants’ report of the Everlong Group as set out in Appendix II to this circular, respectively.

UNAUDITED PRO FORMA STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

AS AT 30 SEPTEMBER 2008

NON-CURRENT ASSETS Property, plant and equipment Prepaid land lease payments Investment properties Goodwill Interests in associates Held-to-maturity financial assets Other intangible assets Loans receivable Rental deposits paid Deferred tax assets CURRENT ASSETS Properties held for sale Properties under development Inventories Trade receivables Prepayments, deposits and other receivables Financial assets at fair value through profit or loss Tax recoverable Cash and cash equivalents	The Group HK$’000 (Unaudited) 204,449 3,337 612,545 7,820 255,881 6,094 21,210 12,739 10,423 4,342	Everlong Group Pro forma adjustments HK$’000 HK$’000 Note (Audited) (Unaudited) 254 – 107,520 (14,774) (ii) (b) 5,454 (ii) (a) – – – – – – –	Pro forma Enlarged Group HK$’000 (Unaudited) 204,703 3,337 710,745 7,820 255,881 6,094 21,210 12,739 10,423 4,342
	1,138,840 14,361 313,052 4,305 2,523 40,594 23,648 883 443,208	107,774 – – – 28 1,083 – – 3,224 (63,372) (i) (2,121) (ii) (a)	1,237,294 14,361 313,052 4,305 2,551 41,677 23,648 883 380,939
	842,574	4,335	781,416

– III-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

The Group HK$’000 (Unaudited) 8,729 82,799 45,270 – 718 127,742 1,090 29,489	Everlong Group Pro forma adjustments HK$’000 HK$’000 Note (Audited) (Unaudited) – 1,550 – 79,836 (83,169) (i) 3,333 (ii) (a) – 3,634 – –	Pro forma Enlarged Group HK$’000 (Unaudited) 8,729 84,349 45,270 – 718 131,376 1,090 29,489
295,837 546,737 1,685,577 401,672 1,960 15,104 418,736	85,020 (80,685) 27,089 31,578 330 (330) (ii) (b) 31,908	301,021 480,395
		1,717,689
		433,250 1,960 15,104
		450,314
1,266,841	(4,819)	1,267,375

39,339 1,151,531 1,190,870 75,971	– (4,819) 4,819 534 (ii) (c) (ii) (d) (4,819) –	39,339 1,152,065
		1,191,404 75,971
1,266,841	(4,819)	1,267,375

– III-4 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

Notes:

(i) These adjustments reflect the aggregate consideration of HK$63,372,000 payable by the Group for the Acquisition and the assignment of the Sale Loan (taking into account the adjustment made in (ii) below). Pursuant to the Acquisition Agreement and as announced by the Company, the consideration will be settled by cash in full upon completion of the Acquisition and the Group will finance the consideration by internal resources.
(ii) Under generally accepted accounting principles in Hong Kong, the Group will apply the purchase method to account for the Acquisition.

In applying the purchase method, the identifiable assets, liabilities and contingent liabilities of the Everlong Group will be recorded on the consolidated balance sheet of the Enlarged Group at their fair values at the date of completion of the Acquisition. Any excess of the Group’s interest in the net fair value of the Everlong Group’s identified assets, liabilities and contingent liabilities over the cost of acquisition of the Everlong Group at the date of completion of the Acquisition will be recognised immediately in the consolidated income statement.

For the purposes of calculating the excess over the cost of acquisition of the Everlong Group and preparing the unaudited pro forma statement of assets and liabilities of the Enlarged Group immediately upon completion of the Acquisition, the book values of the assets and liabilities of the Everlong Group as at 30 September 2008 as extracted from the accountants’ report set out in Appendix II to this Circular have been used, except for the fair value of the investment properties held by the Everlong Group. The fair value of the investment properties portfolio of the Everlong Group has been adjusted based on the valuations performed by Vigers Appraisal & Consulting Limited as at 31 January 2009 (taking into account an addition of HK$5,454,000 subsequent to 30 September 2008) and the deficit arising therefor of HK$14,774,000 is considered by the directors of the Company as material to illustrate the effect of the Acquisition.

A formal valuation of the identified assets, liabilities and contingent liabilities of the Everlong Group will be performed on the date of completion of the Acquisition and their fair values may be different with those used in preparing this pro forma statement of assets and liabilities and, accordingly, the actual amount of the excess over the cost of acquisition of the Everlong Group may be different from that shown below.

In summary, the adjustments reflect:

(a) the recognition of an addition to investment properties by the Everlong Group of HK$5,454,000 which was financed as to HK$2,121,000 by cash and HK$3,333,000 by advances from the immediate holding company;
(b) the recognition of a deficit of HK$14,774,000 and the related deferred tax impact arising from the revaluation of investment properties of the Everlong Group as at 31 January 2009;
(c) the elimination of all the share capital and reserves of the Everlong Group, amounting to HK$4,819,000, as pre-acquisition reserves; and
(d) The recognition of the excess over the cost of acquisition of the Everlong Group of HK$534,000 to the consolidated income statement of the Enlarged Group.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

The following is the text of a letter, summary of valuation prepared for the purpose of incorporation in this circular with its valuation as at 31 January 2009.

Vigers Appraisal & Consulting Limited

10th Floor, The Grande Building 398 Kwun Tong Road Kowloon Hong Kong

==> picture [60 x 60] intentionally omitted <==

The Directors Wang On Group Limited Unit A, 5/F, Wai Yuen Tong Medicine Building 9 Wang On Road Kowloon Bay Kowloon Hong Kong

The Directors LeRoi Holdings Limited Unit A, 5/F, Wai Yuen Tong Medicine Building 9 Wang On Road Kowloon Bay Kowloon Hong Kong

6 March 2009

Dear Sirs,

RE: VALUATION OF VARIOUS PROPERTIES IN HONG KONG

In accordance with your instructions for us to value the above property interests owned by the subsidiary of Everlong Limited (together referred to as the “Group”), we confirm that we have carried out an inspection, made relevant enquiries and obtained such information as we consider necessary for the purpose of providing you with our opinion of its value as at 31 January 2009 (the “Valuation Date”).

Our valuation represents our opinion of the market value. Market Value is defined as intended to mean – “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing selling on an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

Our valuations have been made on the assumption that the properties that the owner sold the properties in the open market without the benefit of a deferred term contract, leaseback, joint venture, management agreement or any other similar arrangement which could serve to increase or decrease the values of the properties.

The properties are held by the Group for investment purposes. We have valued the properties by direct comparison approach with reference to market comparables with due allowances for the

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

differences between the comparables and the properties. Where appropriate, we have also valued the properties by capitalisation of the net rental income obtained from the property with allowances for reversionary income potential.

We have relied to a considerable extent on the information by the Group and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, lettings and rental income, floor areas, and all other relevant matters. All documents have been used for reference only and all dimensions, measurements and areas are approximates.

We have caused searches to be made at the Land Registry. We have to stress that we have not been provided the original copies of all the documents to verify their accuracy. In any events, we reserve the right to revise our valuations should there disclose any information which is in contravention to the information provided to us.

We have inspected the exterior of the properties. However, we have not carried out any structural surveys nor have we inspected woodwork or other parts of the structures which were covered, unexposed or inaccessible to us. We are therefore unable to report whether the properties were free from any structural or non-structural defect.

We have not arranged for any investigation to be carried out to determine whether or not high alumina cement concrete or calcium chloride additive or pulverized fly ash, or any other deleterious material has been used in the construction of these properties and we are therefore unable to report that the properties are free from risk in this respect. For the purpose of this valuation, we have assumed that such investigation would not disclose the presence of any such material in any adverse conditions.

No allowance has been made in our valuations for any charges, mortgages or amounts owing on the properties for any expenses or taxation which might be incurred in effecting a sale. Unless otherwise stated, we have assumed that the properties were free from any encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

Our valuations have been prepared in accordance with “The HKIS Valuation Standards on Properties (First Edition 2005)” published by The Hong Kong Institute of Surveyors, and the relevant provisions in the Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (Main Board).

We enclose herewith the summary of values and valuation certificates.

Yours faithfully,

For and on behalf of

VIGERS APPRAISAL & CONSULTING LIMITED

Gilbert K. M. YUEN

Registered Professional Surveyor

MRICS MHKIS Executive Director

Note: Mr. Gilbert K. M. Yuen is a Registered Professional Surveyor in General Practice Division with over 20 years’ valuation experience on properties in Hong Kong.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

SUMMARY OF VALUES

Property interests in Hong Kong held for investment by the Group

		Market Value as at
		31 January 2009
1.	7th Floor, No. 33 Wong Chuk Street, Kowloon	1,000,000
2.	7th Floor (Flat C on 7th Floor), Dun Tak Mansion,	2,400,000
	No. 127 Portland Street, Kowloon
3.	9th Floor, No. 10 Shek Kip Mei Street, Kowloon	1,450,000
4.	Eighth Floor, No. 253 Tai Nan Street, Kowloon	880,000
5.	7th Floor, Kwok Chai Building, No. 137 Sai Yee Street,	2,300,000
	Kowloon
6.	8th Floor, Kwok Chai Building, No. 137 Sai Yee Street,	2,380,000
	Kowloon
7.	Flat A6 on 3rd Floor of Block A, Lockhart House,	2,650,000
	No. 441 Lockhart Road and No. 440 Jaffe Road, Hong Kong
8.	Flat F on 4th Floor, Wing Ming Building,	1,100,000
	Nos. 34/42 Yen Chow Street, Kowloon
9.	2nd Floor, No. 675 Shanghai Street, Kowloon	1,380,000
10.	6th Floor, No. 258 Apliu Street, Kowloon	800,000
11.	Front Portion of 4th Floor, No. 60 Castle Peak Road,	1,450,000
	Kowloon
12.	5th Floor, No. 524 Jaffe Road, Hong Kong	2,100,000
13.	Flat B on 5th Floor, Po Tai Building,	1,250,000
	No. 180 Nam Cheong Street, Kowloon
14.	5th Floor of Block F, No. 89 Chung On Street, Tsuen Wan,	1,230,000
	New Territories
15.	Flat A on 8th Floor, Nos. 479 & 481 Hennessy Road and	3,400,000
	No. 29 Percival Street, Hong Kong

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

		Market Value as at
		31 January 2009
16.	Flat A on 11th Floor, May Ming Mansion,	2,700,000
	No. 312 Nathan Road, Kowloon
17.	Flat B on 6th Floor, Nos. 117-123 Hennessy Road,	3,600,000
	Hong Kong
18.	1st Floor, No. 23C Fuk Wing Street, Kowloon	1,100,000
19.	Flat D on Sixth Floor, Po Cheong Building,	1,200,000
	Nos. 148-154 Nam Cheong Street, Kowloon
20.	Flat A on 6th Floor, Wellcome Mansion,	1,450,000
	Nos. 233, 233A, 235, 237 & 239 Cheung Sha Wan Road and
	No. 38K Kweilin Street, Kowloon
21.	Flat C on 2nd Floor, Tsang Cheung House,	2,100,000
	Nos. 444, 444A, 446 & 446A Nathan Road, Kowloon
22.	Flat F on 10th Floor, Thai Kong Building,	2,300,000
	No. 482 Hennessy Road, Hong Kong
23.	7th Floor, No. 3 Un Chau Street, Kowloon	1,650,000
24.	Flat C on 8th Floor, Pak Lok Building,	2,380,000
	Nos. 322-326A Nathan Road, Kowloon
25.	Flat C on 6th Floor, Rex House,	1,880,000
	Nos. 648, 650 & 652 Nathan Road, Kowloon
26.	Unit A on 6th Floor, Parkes Building,	1,150,000
	Nos. 17-23 Parkes Street, Kowloon
27.	2nd Floor, No. 30D Fuk Wing Street, Kowloon	820,000
28.	5th Floor, No. 132A Electric Road, Hong Kong	2,400,000
29.	Flat 413 on 4th Floor, Sincere House,	2,000,000
	No. 83 Argyle Street, Kowloon
30.	Flat B on 11th Floor, Wen Pang Building,	1,480,000
	Nos. 270-272 Lai Chi Kok Road and
	Nos. 66-68 Nam Cheong Street, Kowloon

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

		Market Value as at
		31 January 2009
31.	Unit A on 4th Floor & Flat Roof thereof, Parkes Building,	1,280,000
	Nos. 17-23 Parkes Street, Kowloon
32.	Apartment No. P-7 on 7th Floor, Wing Lung Building,	980,000
	Nos. 220-240 & 240A Castle Peak Road and
	Nos. 20 & 22 Wing Lung Street, Kowloon
33.	Unit B on 4th Floor & Flat Roof thereof, Parkes Building,	1,150,000
	Nos. 17-23 Parkes Street, Kowloon
34.	7th Floor, No. 64 Cheung Sha Wan Road, Kowloon	1,300,000
35.	Flat G on 7th Floor, Lung Wa Building,	1,500,000
	No. 22 Fuk Wa Street, Kowloon
36.	Flat No. 5 on 1st Floor, Tai Yue Mansion,	2,000,000
	No. 133 Sai Yee Street, Kowloon
37.	Flat 1 on 1st Floor together with Portion of the Flat Roof	1,200,000
	(also known as Flat A on 1st Floor),
	No. 174 Jockey Club Road, North, New Territories
38.	Flat M on 4th Floor, Lung Wa Building,	1,020,000
	No. 22 Fuk Wa Street, Kowloon
39.	Unit B on 6th Floor, Parkes Building,	1,150,000
	Nos. 17-23 Parkes Street, Kowloon
40.	2nd Floor, Golden Jubilee House,	2,550,000
	No. 399 Lockhart Road, Hong Kong
41.	11th Floor, No. 501 Nathan Road, Kowloon	1,880,000
42.	3rd Floor, No. 192 Tai Nan Street, Kowloon	1,420,000
43.	Ninth Floor, No. 13 Cheung Sha Wan Road, Kowloon	2,000,000
44.	Flat A on 6th Floor, No. 240 Lockhart Road, Hong Kong	2,430,000
45.	Unit A on 8th Floor, Parkes Building,	1,200,000
	Nos. 17-23 Parkes Street, Kowloon
46.	1st Floor Rear Portion, No. 1 San Lok Street, Shek Wu Hui,	1,550,000
	Sheung Shui, New Territories

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

47.
5th Floor of Block H, Golden Horse Mansion,
No. 27 Mansion Street, Hong Kong
48.
6th Floor and its Interior Wall, No. 463 Hennessy Road,
Hong Kong
49.
7th Floor, No. 109 Cheung Sha Wan Road, Kowloon
50.
Unit A on 10th Floor, Parkes Building,
Nos. 17-23 Parkes Street, Kowloon
51.
Unit B on 8th Floor, Parkes Building,
Nos. 17-23 Parkes Street, Kowloon
52.
7th Floor, No. 250A Cheung Sha Wan Road, Kowloon
53.
Flat B on 10th Floor, Parkes Building,
Nos. 17-23 Parkes Street, Kowloon
54.
Flat E on 35th Floor of Block 2, Royal Ascot,
No. 1 Tsun King Road, Shatin, New Territories

Market Value as at
31 January 2009
2,150,000
2,100,000
1,450,000
1,200,000
1,150,000
960,000
1,150,000
9,450,000

HK$98,200,000

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

VALUATION CERTIFICATE

Property interests held for investment by the Group in Hong Kong

Property Description & Tenure Particular of Occupancy 1. 7th Floor, No. 33 Wong The property comprises a As provided by the Group, Chuk Street, Kowloon residential unit of an the property is divided into 8-storey composite 4 sub-units and all of them 1/8th share of and in building, which was are tenanted with the latest the Remaining Portion completed in 1959. expiry on 22 January 2010. of New Kowloon Inland As at 31 January 2009, the Lot No. 2309. The property has a saleable total monthly rent area of approximately 631 receivable was HK$9,100. sq.ft. (58.62 sq.m.). The property is held under a Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

Market Value in existing state as at 31 January 2009

HK$1,000,000

The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB304686 dated 21 October, 1959. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Allied Victory Investment Limited vide Memorial No. 08052901680011 dated 2 May, 2008. As advised by the Group, the mortgage will not be discharged before the completion.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Description & Tenure

Particular of Occupancy

Property Description & Tenure Particular of Occupancy 31 January 2009 2. 7th Floor (Flat C on 7th The property comprises a As provided by the Group, HK$2,400,000 Floor), Dun Tak residential unit in a the property is divided into Mansion, No. 127 10-storey composite 6 sub-units and all of them Portland Street, building, which was are tenanted with the latest Kowloon completed in 1963. expiry date on 18 January 2011. As at 31 January 1/40th share of and in The property has a saleable 2009 the total monthly rent Kowloon Inland Lot area of approximately 921 receivable was HK$20,600. Nos. 8121 and 8160. sq.ft. (85.56 sq.m.). The property is held under Conditions of Re-Grant Nos. 6852 and 6970 for a term of 150 years commencing from 25 December 1887.

The government rent is totally HK$214 per annum for the whole of Kowloon Inland Lot Nos. 8121 and 8160.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB418488 dated 23 October 1963. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to the following orders:
i. Order No. DR00189/K/07 by the Building Authority under S.28(3) of the Buildings Ordinance (Re: For common drains only) vide Memorial No. 07101501330023 dated 14 September 2007.
ii. Order No. C/TF/003575/08/K by the Building Authority under S.24(1) of the Buildings Ordinance (Re: Common parts) vide Memorial No. 08121600570338 dated 17 September 2008.
According to the Group, the estimated costs to comply with the above Building Orders are in the total sum of HK$369,791, of which the property will share HK$9,245 in proportion to the undivided shares. Our valuation has not reflected this estimated sum.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 3. 9th Floor, No. 10 Shek The property comprises a As provided by the Group, HK$1,450,000 Kip Mei Street, residential unit in a the property is divided into Kowloon 13-storey composite 4 sub-units and all of them building completed in 1963. are tenanted with the latest 4/156th shares of and in expiry on 31 December the Remaining Portion The property has a saleable 2009. As at 31 January of New Kowloon Inland area of approximately 602 2009 the total monthly rent Lot No. 1152 and the sq.ft. (55.93 sq.m.). receivable was HK$10,600. Remaining Portion of New Kowloon Inland The property is held under a Lot No. 1283. Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB424625 dated 20 January 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Allied Victory Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Eighth Floor, No. 253 The property comprises a As provided by the Group, Tai Nan Street, residential unit of a 9-storey the property is divided into Kowloon composite building, which 4 sub-units and all of them was completed in 1960. are tenanted with the latest 1/9th share of and in expiry on 16 January 2010. the Remaining Portion According to the As at 31 January 2009 the of New Kowloon Inland information provided by the total monthly rent Lot No. 19. Rating and Valuation receivable was HK$8,150. Department, the property has a saleable area of approximately 593 sq.ft. (55.09 sq.m.).

HK$880,000

The property is held under a Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenants vide Memorial No. UB334512 dated 17 February 1961. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Allied Victory Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

7th Floor, Kwok Chai The property comprises a As provided by the Group, HK$2,300,000 Building, No. 137 Sai residential unit in a the property is divided into Yee Street, Kowloon 17-storey composite 5 sub-units and all of them building, which was are tenanted with the latest 1/57th share of and in completed in 1965. expiry on 31 December the Remaining Portion 2009. As at 31 January of Section A and the The property has a saleable 2009, the total monthly rent Remaining Portion of area of approximately 983 receivable was HK$21,900. Kowloon Inland Lot sq.ft. (91.32 sq.m.). No. 2147. The property is held under Government Lease for a term of 75 years commencing from 22 October 1928 and renewable for a further term of 75 years.

The government rent is HK$1,318 per annum.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB487401 dated 12 May 1965. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Allied Victory Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

8th Floor, Kwok Chai The property comprises a As provided by the Group, HK$2,380,000 Building, No. 137 Sai residential unit in a the property is divided into Yee Street, Kowloon 17-storey composite 5 sub-units and all of them building, which was are tenanted with the latest 1/57th share of and in completed in 1965. expiry on 31 July 2009. As the Remaining Portion at 31 January 2009, the of Section A and the The property has a saleable total monthly rent Remaining Portion of area of approximately 983 receivable was HK$23,500. Kowloon Inland Lot sq.ft. (91.32 sq.m.). No. 2147.

The property is held under Government Lease for a term of 75 years commencing from 22 October 1928 and renewable for a further term of 75 years.

The government rent is HK$1,318 per annum.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB487401 dated 12 May 1965. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Allied Victory Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat A6 on 3rd Floor of Block A, Lockhart House, No. 441 Lockhart Road and No. 440 Jaffe Road, Hong Kong

The property comprises a residential unit in the Block A of Lockhart House, which is development consists of two residential towers over a two-storey commercial podium. Block A rises 26 storeys and was completed in 1979.

14/4348th shares of and storeys and was completed in the Remaining in 1979. Portion of Section F, the Remaining Portion The property has gross floor of Sub-section 1 of area and saleable area of Section F, the approximately 671 sq.ft. Remaining Portion of (62.34 sq.m.) and 552 sq.ft. Sub-section 1 of (51.28 sq.m.) respectively. Section I and the Remaining Portion of The property is held under Section I of Inland Lot Government Leases of No. 2833, Section E Inland Lot No. 2833, Inland and the Remaining Lot No. 2835 and Inland Portion of Inland Lot Lot No. 6304, each for a No. 2835 and the term of 99 years renewable Remaining Portion of for a term of 99 years Inland Lot No. 6304. commencing from 15 April 1929, 25 May 1929 and 18 October 1947 respectively.

As provided by the Group, the property is divided into 4 sub-units and all of them are tenanted with the latest expiry on 30 November 2009. As at 31 January 2009 the total monthly rent receivable was HK$19,700.

HK$2,650,000

The government rent is totally [HK$1,744] per annum for the whole of Inland Lot Nos. 2833, 2835 and 6304.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Covenant vide Memorial No. UB1744911 dated 6 June 1979. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Allied Victory Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat F on 4th Floor, The property comprises a As provided by the Group, Wing Ming Building, residential unit in a the property is divided into Nos. 34/42 Yen Chow 13-storey composite 3 sub-units and all of them Street, Kowloon building, which was are tenanted with the latest completed in 1971. expiry on 18 December 7/900th shares of and in 2009. As at 31 January the Remaining Portion, The property has a saleable 2009, the total monthly rent the Remaining Portion area of approximately 487 receivable was HK$11,100. of Section C and the sq.ft. (45.24 sq.m.). Remaining Portion of Section B of New The property is held under a Kowloon Inland Lot Government Lease for a No. 930. term expiring on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

HK$1,100,000

The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Allied Victory Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB843653 dated 8 October 1971. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Allied Victory Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

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PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 9. 2nd Floor, No. 675 The property comprises a As provided by the Group, HK$1,380,000 Shanghai Street, residential unit in a the property is divided into Kowloon 10-storey composite 3 sub-units and all of them building, which was are tenanted with the latest 1/10th share of and in completed in 1966. expiry on 31 October 2009. Kowloon Inland Lot As at 31 January 2009, the No. 10830. The property has a saleable total monthly rent area of approximately 560 receivable was HK$11,700. sq.ft. (52.03 sq.m.). The property is held under a Government Lease for a term from 28 June 1985 to 30 June 2047. The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB3976641 dated 13 January 1989. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-15 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 10. 6th Floor, No. 258 The property comprises a As provided by the Group, HK$800,000 Apliu Street, Kowloon residential unit in a 9-storey the property is divided into composite building, which 3 sub-units and all of them 1/30th share of and in was completed in 1966. are tenanted with the latest New Kowloon Inland expiry on 24 November Lot No. 393 and the The property has a saleable 2009. As at 31 January Remaining Portion of area of approximately 431 2009 the total monthly rent New Kowloon Inland sq.ft. (40.04 sq.m.). receivable was HK$7,700. Lot No. 1306. The property is held under a Government Lease for a term expiring on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB607720 dated 27 November 1967. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to the following orders:
i. Order No. UBZ/U31-53/0022/06 by the Building Authority under S.24(1) of the Buildings Ordinance vide Memorial No. 07100301160214 dated 17 March 2007.
ii. Order No. DBZ/U31-53/0001/06 by the Building Authority under S.26 of the Buildings Ordinance vide Memorial No. 07100301160319 dated 6 July 2007.
iii. Order No. DRZ/U31-53/0001/06 by the Building Authority under S.28(3) of the Buildings Ordinance vide Memorial No. 07100301160327 dated 2 August 2007.
According to the Group, the estimated costs to comply with the above Building Orders are in the total sum of HK$546,034, of which the property will share HK$18,019 in proportion to the undivided shares. Our valuation has not reflected this estimated sum.

– IV-16 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 11. Front Portion of 4th The property comprises a As provided by the Group, HK$1,450,000 Floor, No. 60 Castle residential unit in a the property is divided into Peak Road, Kowloon 12-storey composite 4 sub-units and all of them building, which was are tenanted with the latest 1/144th share of and in completed in 1962. expiry on 9 November New Kowloon Inland 2009. As at 31 January Lot No. 2702. The property has a saleable 2009, the total monthly rent area of approximately 606 receivable was HK$14,300. sq.ft. (56.30 sq.m.).

The property is held under a Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB359776 dated 17 January 1962. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-17 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 12. 5th Floor, No. 524 Jaffe The property comprises a As provided by the Group, HK$2,100,000 Road, Hong Kong residential unit in a 9-storey the property is divided into composite building, which 4 sub-units and all of them 1/18th share of and in was completed in 1961. are tenanted with the latest Sub-section 3 of expiry on 11 November Section F of Marine Lot The property has a saleable 2009. As at 31 January No. 52 and the area of approximately 725 2009, the total monthly rent Extension thereto. sq.ft. (67.35 sq.m.). receivable was HK$18,000. The property is held under Government Lease for a term of 999 years commencing from 25 June 1843. The government rent is HK$12 per annum for the whole of the lot.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB412190 dated 16 September 1963. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-18 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat B on 5th Floor, Po The property comprises a As provided by the Group, HK$1,250,000 Tai Building, No. 180 residential unit in a the property is divided into Nam Cheong Street, 13-storey composite 3 sub-units and all of them Kowloon building, which was are tenanted with the latest completed in 1966. expiry on 31 December 1/49th share of and in 2009. As at 31 January the Remaining Portion The property has a saleable 2009, the total monthly rent of Section A, the area of approximately 507 receivable was HK$11,350. Remaining Portion of sq.ft. (47.10 sq.m.). Section B and the Remaining Portion of The property is held under a Section C of New Government Lease for a Kowloon Inland Lot term expiring on 30 June No. 386. 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Goldbo Investment Limited which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB629283 dated 7 May 1968. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-19 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

5th Floor of Block F, The property comprises a As provided by the Group, No. 89 Chung On residential unit in a 6-storey the property is divided into Street, Tsuen Wan, New composite building, which 4 sub-units and all of them Territories was completed in 1958. are tenanted with the latest expiry on 31 December 1/66th share of and in According to the 2009. As at 31 January the Remaining Portion information provided by the 2009, the total monthly rent of Lot No. 2013 in D.D. Rating and Valuation receivable was HK$12,900. 449. Department, the property has a saleable area of approximately 647 sq.ft. (60.11 sq.m.).

HK$1,230,000

The property is held from the Government under New Grant No. 3504 for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Covenant vide Memorial No. TW68754 dated 14 July 1959. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to the following orders:
i. Order No. D003/NT/99/B/CE under S.26 of the Buildings Ordinance by the Building Authority vide Memorial No. TW1327783 dated 7 December, 1999.
ii. Order No. CRT/RT/009717/05/NT by the Building Authority under S.24(1) of the Buildings Ordinance vide Memorial No. 06011901470155 dated 20 December, 2005.
According to the Group, the estimated costs to comply with the above Building Orders are in the total sum of HK$1,489,551, of which the property will share HK$22,343 in proportion to the undivided shares. Our valuation has not reflected this estimated sum.

– IV-20 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat A on 8th Floor, The property comprises a As provided by the Group, Nos. 479 & 481 residential unit in a the property is divided into Hennessy Road and No. 16-storey composite 5 sub-units and all of them 29 Percival Street, building, which was are tenanted with the latest Hong Kong completed in 1965. expiry on 21 January 2010. As at 31 January 2009, the 2/85th shares of and in The property has a saleable total monthly rent the Remaining Portion area of approximately 820 receivable was HK$25,200. of Inland Lot No. 7160 sq.ft. (76.18 sq.m.). and the Remaining Portion of Inland Lot The property is held under a No. 7161. Government Lease for a term of 99 years commencing from 15 April 1929 and renewable for a further term of 99 years.

HK$3,400,000

The government rent is totally HK$22 per annum for the whole of Inland Lot Nos. 7160 and 7161.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB524680 dated 5 March 1966. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-21 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat A on 11th Floor, The property comprises a As provided by the Group, HK$2,700,000 May Ming Mansion, residential unit in a the property is divided into No. 312 Nathan Road, 13-storey composite 6 sub-units and four of Kowloon building, which was them are tenanted with the completed in 1965. latest expiry on 17 January 1/27th share of and in 2010. As at 31 January the Remaining Portion The property has a saleable 2009, the total monthly rent of Kowloon Inland Lot area of approximately 879 receivable was HK$15,500. No. 3596. sq.ft. (81.66 sq.m.). The remaining units are vacant.

The property is held under a Government Lease for a term of 75 years commencing from 14 September 1914 and renewed for a further term of 75 years.

The government rent is HK$1,584 per annum.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-22 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat B on 6th Floor, Nos. 117-123 Hennessy Road, Hong Kong

2/131st shares of and in the Remaining Portion of Inland Lot No. 3809, the Remaining Portion of Inland Lot No. 3810, the Remaining Portion of Inland Lot No. 3813 and the Remaining Portion of Inland Lot No. 3814.

The property comprises a As provided by the Group, residential unit in a the property is divided into 17-storey composite 5 sub-units and all of them building, which was are tenanted with the latest completed in 1970. expiry on 19 January 2010. As at 31 January 2009, the The property has a saleable total monthly rent area of approximately 834 receivable was HK$25,400. sq.ft. (77.48 sq.m.).

The property is held under Government Leases for a term of 99 years commencing from 25 May 1929 and renewable for a further term of 99 years.

HK$3,600,000

The government rent is totally HK$48 per annum for the whole of Inland Lot Nos. 3809, 3810, 3813 and 3814.

Notes:

The registered owner is Goldbo Investment Limited which, is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB754201 dated 25 July 1970. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-23 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 18. 1st Floor, No. 23C Fuk The property comprises a As provided by the Group, HK$1,100,000 Wing Street, Kowloon residential unit in an the property is divided into 8-storey composite 3 sub-units and all of them 1/8th share of and in building, which was are tenanted with the latest Section D of New completed in 1959. expiry on 28 January 2010. Kowloon Inland Lot As at 31 January 2009, the No. 2310. The property has a saleable total monthly rent area of approximately 527 receivable was HK$10,200. sq.ft. (48.96 sq.m.). The property is held under a Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB307000 dated 1 December 1959. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Goldbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-24 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 19. Flat D on Sixth Floor, The property comprises a As provided by the Group, HK$1,200,000 Po Cheong Building, residential unit in a the property is divided into Nos. 148-154 Nam 13-storey composite 3 sub-units and all of them Cheong Street, building, which was are tenanted with the latest Kowloon completed in 1969. expiry on 14 December 2009. As at 31 January 1/74th share of and in The property has a saleable 2009, the total monthly rent the Remaining Portion area of approximately 480 receivable was HK$10,100. of New Kowloon Inland sq.ft. (44.59 sq.m.). Lot No. 1278, the Remaining Portion of The property is held under New Kowloon Inland Government Leases for a Lot No. 1392, the term expiring on 30 June Remaining Portion of 1997 and has been extended New Kowloon Inland to 30 June 2047 by virtue of Lot No. 1393 and the New Territories Leases Remaining Portion of (Extension) Ordinance. New Kowloon Inland Lot No. 1394. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is Goldbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant and Grant vide Memorial No. UB714611 dated 28 December 1969. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Superseding Order No. DR00022/K/07 by the Building Authority under S.28(3) of the Buildings Ordinance vide Memorial No. 07031300290127 dated 12 January 2007.
According to the Group, a letter dated 26 August 2008 from Messrs. Pansy Leung Tang & Chua, Solicitors acting for the Incorporated Owners of Po Cheong Building has been issued to each of the owners of the building stating the amount each owner has to bear for the purpose of building repairs to comply with the above Building Order. The amount the property has to bear is HK$36,061. Our valuation has not reflected this sum.

– IV-25 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 20. Flat A on 6th Floor, The property comprises a As provided by the Group, HK$1,450,000 Wellcome Mansion, residential unit in a the property is divided into Nos. 233, 233A, 235, 13-storey composite 4 sub-units and all of them 237 & 239 Cheung Sha building, which was are tenanted with the latest Wan Road and No. 38K completed in 1964. expiry on 21 November Kweilin Street, 2009. As at 31 January Kowloon The property has a saleable 2009, the total monthly rent area of approximately 549 receivable was HK$13,200. 1/78th share of and in sq.ft. (51.00 sq.m.). the Remaining Portion of New Kowloon Inland The property is held under Lot No. 1578, the Government Leases for a Remaining Portion of term expired on 30 June New Kowloon Inland 1997 and has been extended Lot No. 1577, the to 30 June 2047 by virtue of Remaining Portion of New Territories Leases New Kowloon Inland (Extension) Ordinance. Lot No. 1576 and the Remaining Portion of The annual government rent New Kowloon Inland is equivalent to 3% of the Lot No. 1290. rateable value for the time being of the property.

Notes:

The registered owner is Topbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB464950 dated 30 October 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Topbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-26 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat C on 2nd Floor, The property comprises a As provided by the Group, HK$2,100,000 Tsang Cheung House, residential unit in a the property is divided into Nos. 444, 444A, 446 & 14-storey composite 4 sub-units and all of them 446A Nathan Road, building, which was are tenanted with the latest Kowloon completed in 1963. expiry on 31 March 2009. As at 31 January 2009, the 1/50th share of and in The property has a saleable total monthly rent Section B and the area of approximately 744 receivable was HK$17,500. Remaining Portion of sq.ft. (69.12 sq.m.). Kowloon Inland Lot No. 1464. The property is held under Government Lease for a term of 75 years commencing from 20 March 1922 and renewed for a further term of 75 years.

The government rent is HK$3,708 per annum.

Notes:

The registered owner is Topbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Covenant vide Memorial No. UB687718 dated 7 August 1969. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Topbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-27 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat F on 10th Floor, The property comprises a As provided by the Group, HK$2,300,000 Thai Kong Building, residential unit in a the property is divided into No. 482 Hennessy 23-storey composite 4 sub-units and all of them Road, Hong Kong building, which was are tenanted with the latest completed in 1966. expiry on 17 April 2009. As 1/120th share of and in at 31 January 2009, the Inland Lot No. 3582. The property has a saleable total monthly rent area of approximately 544 receivable was HK$20,500. sq.ft. (50.54 sq.m.).

The property is held under a Government Lease for a term of 999 years commencing from 25 June 1862.

The government rent is HK$104 per annum for the whole of Inland Lot No. 3582.

Notes:

The registered owner is Topbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB567224 dated 24 December 1966. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Topbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-28 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

				Market Value in
				existing state as at
	Property	Description & Tenure	Particular of Occupancy	31 January 2009
23.	7th Floor, No. 3 Un	The property comprises a	As provided by the Group,	HK$1,650,000
	Chau Street, Kowloon	residential unit in a 9-storey	the property is divided into
		composite building, which	4 sub-units and all of them
	2/27th shares of and in	was completed in 1963.	are tenanted with the latest
	the Remaining Portion		expiry on 30 September
	of New Kowloon Inland	The property has a saleable	2009. As at 31 January
	Lot No. 1927.	area of approximately 651	2009, the total monthly rent
		sq.ft. (60.48 sq.m.).	receivable was HK$15,000.
		The property is held under a
		Government Lease for a
		term expired on 30 June
		1997 and has been extended
		to 30 June 2047 by virtue of
		New Territories Leases
		(Extension) Ordinance.
		The annual government rent
		is equivalent to 3% of the
		rateable value for the time
		being of the property.

Notes:

The registered owner is Topbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB424476 dated 5 December 1963. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Topbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-29 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 24. Flat C on 8th Floor, Pak The property comprises a As provided by the Group, HK$2,380,000 Lok Building, Nos. residential unit in an the property is divided into 322-326A Nathan Road, 18-storey composite 5 sub-units and all of them Kowloon building, which was are tenanted with the latest completed in 1964. expiry on 19 November 1/72nd share of and in 2009. As at 31 January Kowloon Inland Lot The property has a saleable 2009, the total monthly rent Nos. 8030 and 8119. area of approximately 763 receivable was HK$21,000. sq.ft. (70.88 sq.m.).

The property is held from the Government under Conditions of Regrant Nos. 6957 and 6951 for a term of 150 years commencing from 25 December 1888.

The government rent is HK$8 per annum.

Notes:

The registered owner is Topbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB467338 dated 29 October 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Topbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-30 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 25. Flat C on 6th Floor, Rex The property comprises a As provided by the Group, HK$1,880,000 House, Nos. 648, 650 & residential unit in a the property is divided into 652 Nathan Road, 16-storey composite 4 sub-units and all of them Kowloon building, which was are tenanted with the latest completed in 1963. expiry on 31 August 2009. 1/55th share of and in As at 31 January 2009, the the Remaining Portion The property has a saleable total monthly rent of Section A, the area of approximately 652 receivable was HK$16,400. Remaining Portion of sq.ft. (60.57 sq.m.). Section B and the Remaining Portion of The property is held under Sub-section 1 of Government Lease for a Section C of Kowloon term of 75 years Inland Lot No. 1388. commencing from 20 October 1919 and renewed for a further term of 75 years.

The government rent is HK$2,700 per annum.

Notes:

The registered owner is Topbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB476466 dated 1 February 1965. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of China Construction Bank Corporation to secure part of all sums of money including general banking facilities to Topbo Investment Limited vide Memorial No. 08052901680011 dated 2 May 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-31 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Unit A on 6th Floor, Parkes Building, Nos. 17-23 Parkes Street, Kowloon

1/52nd share of and in the Remaining Portion of Kowloon Inland Lot No. 8775, the Remaining Portion of Kowloon Inland Lot No. 8880, the Remaining Portion of Kowloon Inland Lot No. 8604 and the Remaining Portion of Kowloon Inland Lot No. 8710.

The property comprises a residential unit in a 12-storey composite building, which was completed in 1975.

The property comprises a As provided by the Group, residential unit in a the property is divided into 12-storey composite 2 sub-units and all of them building, which was are tenanted with the latest completed in 1975. expiry on 11 July 2009. As at 31 January 2009, the The property has a saleable total monthly rent area of approximately 286 receivable was HK$8,900. sq.ft. (26.57 sq.m.).

The property is held from the Government under Conditions of Regrant Nos. 8064 and 8123 and two Government Leases both a common term of 150 years commencing from 25 December 1887.

HK$1,150,000

The government rent is HK$74 per annum.

Notes:

The registered owner is Topbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-32 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

2nd Floor, No. 30D Fuk The property comprises a As provided by the Group, Wing Street, Kowloon residential unit in a 6-storey the property is divided into composite building, which 3 sub-units and all of them 1/16th share of and in was completed in 1965. are tenanted with the latest the Remaining Portion expiry on 23 August 2009. of Section B of New The property has a saleable As at 31 January 2009, the Kowloon Inland Lot area of approximately 406 total monthly rent No. 222. sq.ft. (37.72 sq.m.). receivable was HK$10,300.

HK$820,000

The property is held under a Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of New Territories Leases (Extension) Ordinance.

The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is Easytex Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB538237 dated 17 June 1966. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-33 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

5th Floor, No. 132A The property comprises a As provided by the Group, Electric Road, Hong residential unit in an the property is divided into Kong 11-storey composite 5 sub-units and all of them building, which was are tenanted with the latest 1/97th share of and in completed in 1964. expiry on 31 December the Remaining Portion 2009. As at 31 January of Inland Lot No. 1065. According to the 2009, the total monthly rent information provided by the receivable was HK$21,000. Rating and Valuation Department, the property has a saleable area of approximately 678 sq.ft. (62.99 sq.m.).

HK$2,400,000

The property is held under Government Lease for a term of 999 years commencing from 14 February 1887.

The government rent is HK$72 per annum for the whole of Inland Lot No. 1065.

Notes:

The registered owner is Easytex Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB452119 dated 17 July 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-34 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat 413 on 4th Floor, The property comprises a As provided by the Group, Sincere House, No. 83 residential unit in a the property is divided into Argyle Street, Kowloon 17-storey composite 5 sub-units and all of them building, which was are tenanted with the latest 1/289th share of and in completed in 1963. expiry on 26 September Kowloon Inland Lot 2009. As at 31 January No. 8241. The property has a saleable 2009, the total monthly rent area of approximately 734 receivable was HK$19,600. sq.ft. (68.19 sq.m.).

HK$2,000,000

The property is held under Conditions of Exchange No. 7073 for a term of 75 years commencing from 6 April 1923 and renewed for a further term of 75 years.

The government rent is HK$3,082 per annum.

Notes:

The registered owner is Easytex Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB411017 dated 21 August 1963. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-35 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 30. Flat B on 11th Floor, The property comprises a As provided by the Group, HK$1,480,000 Wen Pang Building, residential unit in a the property is divided into Nos. 270-272 Lai Chi 13-storey composite 4 sub-units and three of Kok Road and Nos. building, which was them are tenanted with the 66-68 Nam Cheong completed in 1965. latest expiry on 12 May Street, Kowloon 2009. As at 31 January The property has a saleable 2009, the total monthly rent 2/76th shares of and in area of approximately 598 receivable was HK$10,200. the Remaining Portion sq.ft. (55.56 sq.m.). The remaining unit is of New Kowloon Inland vacant. Lot No. 272. The property is held under a Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Easytex Investment Limited which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenants vide Memorial No. UB823000 dated 12 July 1971. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-36 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Unit A on 4th Floor & The property comprises a Flat Roof thereof, residential unit in a Parkes Building, Nos. 12-storey composite 17-23 Parkes Street, building, which was Kowloon completed in 1975.

As provided by the Group, the property is divided into 5 sub-units and all of them are vacant.

HK$1,280,000

1/52nd share of and in The property has a saleable the Remaining Portion area and flat roof area of of Kowloon Inland Lot approximately 286 sq.ft. No. 8775, the (26.57 sq.m.) and 588 sq.ft. Remaining Portion of (54.63 sq.m.) respectively. Kowloon Inland Lot No. 8880, the The property is held from Remaining Portion of the Government under Kowloon Inland Lot Conditions of Regrant Nos. No. 8604 and the 8064 and 8123 and two Remaining Portion of Government Leases for a Kowloon Inland Lot common term of 150 years No. 8710. commencing from 25 December 1887.

The government rent is HK$74 per annum.

Notes:

The registered owner is Easytex Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-37 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Apartment No. P-7 on The property comprises a As provided by the Group, 7th Floor, Wing Lung residential unit in a the property is divided into Building, Nos. 220-240 12-storey composite 3 sub-units and all of them & 240A Castle Peak building, which was are tenanted with the latest Road and Nos. 20 & 22 completed in 1964. expiry on 31 May 2009. As Wing Lung Street, at 31 January 2009, the Kowloon The property has a saleable total monthly rent area of approximately 385 receivable was HK$9,900. 1/243rd share of and in sq.ft. (35.77 sq.m.). New Kowloon Inland Lot Nos. 3538, 3539 The property is held under and 3540. Government Leases for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

HK$980,000

The annual government rent is equivalent to 3% of the rateable value of for the time being of the property.

Notes:

The registered owner is Easytex Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenants vide Memorial No. UB500864 dated 20 August 1965. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-38 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Unit B on 4th Floor & Flat Roof thereof, Parkes Building, Nos. 17-23 Parkes Street, Kowloon

The property comprises a As provided by the Group, residential unit in a the property is divided into 12-storey composite 2 sub-units and all of them building, which was are tenanted with the latest completed in 1964. expiry on 31 July 2009. As at 31 January 2009, the The property has a saleable total monthly rent area and flat roof area of receivable was HK$9,900.

1/52nd share of and in The property has a saleable the Remaining Portion area and flat roof area of of Kowloon Inland Lot approximately 278 sq.ft. No. 8775, the (25.83 sq.m.) and 110 sq.ft. Remaining Portion of (10.22 sq.m.) respectively. Kowloon Inland Lot No. 8880, the The property is held from Remaining Portion of the Government under Kowloon Inland Lot Conditions of Regrant Nos. No. 8604 and the 8064 and 8123 and two Remaining Portion of Government Leases for a Kowloon Inland Lot common term of 150 years No. 8710. commencing from 25 December 1887.

HK$1,150,000

The government rent is HK$74 per annum.

Notes:

The registered owner is New Sino Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-39 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 34. 7th Floor, No. 64 The property comprises a As provided by the Group, HK$1,300,000 Cheung Sha Wan Road, residential unit in a the property is divided into Kowloon 13-storey composite 3 sub-units and all of them building, which was are tenanted with the latest 1/40th share of and in completed in 1964. expiry on 10 January 2010. the Remaining Portion As at 31 January 2009, the of New Kowloon Inland The property has a saleable total monthly rent Lot No. 1721. area of approximately 502 receivable was HK$11,400. sq.ft. (46.64 sq.m.). The property is held under a Government Lease for a term expiring on 30 June 1997 and has been extended to 30 June 2047 by virtue of New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

According to the record in the Land Registry, the registered owner is New Sino Investment Limited which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant and Grant vide Memorial No. UB647377 dated 3 September 1968. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-40 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat G on 7th Floor, Lung Wa Building, No. 22 Fuk Wa Street, Kowloon

The property comprises a As provided by the Group, residential unit in a the property is divided into 13-storey composite 4 sub-units and all of them building, which was are tenanted with the latest completed in 1964. expiry on 30 June 2009. As at 31 January 2009, the The property has a saleable total monthly rent area of approximately 593 receivable was HK$14,500. sq.ft. (55.09 sq.m.).

1/144th share of and in the Remaining Portion The property has a saleable of Section A, the area of approximately 593 Remaining Portion of sq.ft. (55.09 sq.m.). Section B, the Remaining Portion of The property is held under Section C, the Government Lease for a Remaining Portion of term expired on 30 June Section E, the 1997 and has been extended Remaining Portion of to 30 June 2047 by virtue of Section F and the New Territories Leases Remaining Portion of (Extension) Ordinance. New Kowloon Inland Lot No. 1637. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

The property is held under a Government Lease for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of New Territories Leases (Extension) Ordinance.

HK$1,500,000

Notes:

The registered owner is New Sino Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Covenant vide Memorial No. UB432921 dated 3 April 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to an Order No. D00344/K/07/TD by the Building Authority under S.26 of the Buildings Ordinance (Re: For internal common areas and exterior of the building only) vide Memorial No. 07121402370462 dated 2 November 2007.
According to the Group, a letter dated 3 November 2008 from Messrs. S. K. Lam, Alfred Chan & Co. Solicitors & Notaries acting for the Incorporated Owners of Lung Wa Building has been issued to each of the owners of the building stating that an amount in total of HK$4,742,576 is required for the purpose of building repairs to comply with the above Building Order. And that each owner has to bear HK$30,000 and the balance will be paid off out of the building fund of Lung Wa Building. Our valuation has not reflected this sum.

– IV-41 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat No. 5 on 1st Floor, The property comprises a Tai Yue Mansion, No. residential unit in a 133 Sai Yee Street, 15-storey composite Kowloon building, which was completed in 1964. 1/92nd share of and in the Remaining Portion The property has a saleable of Section C, the area of approximately 690 Remaining Portion of sq.ft. (64.10 sq.m.). Section D, the Remaining Portion of The property is held under Section E and the Conditions of Grant No. Remaining Portion of 1271 for a term of 75 years Kowloon Inland Lot commencing from 6 April No. 1580. 1923 and renewed for a further term of 75 years.

The property comprises a As provided by the Group, residential unit in a the property is divided into 15-storey composite 5 sub-units and all of them building, which was are tenanted with the latest completed in 1964. expiry on 16 November 2009. As at 31 January The property has a saleable 2009, the total monthly rent area of approximately 690 receivable was HK$19,600. sq.ft. (64.10 sq.m.).

HK$2,000,000

The government rent is HK$3,072 per annum.

Notes:

The registered owner is New Sino Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB435228 dated 1 April 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-42 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat 1 on 1st Floor together with Portion of the Flat Roof (also known as Flat A on 1st Floor), No. 174 Jockey Club Road, North, New Territories

1/70th share of and in Lot No. 3831 in D.D. 91.

The property comprises a residential unit in a 3-storey tenement building, which was completed in 1973.

The property comprises a As provided by the Group, residential unit in a 3-storey the property is divided into tenement building, which 3 sub-units and all of them was completed in 1973. are tenanted with the latest expiry on 9 August 2009. The property has a saleable As at 31 January 2009, the area and flat roof area of total monthly rent approximately 593 sq.ft. receivable was HK$11,400. (55.09 sq.m.) and 73 sq.ft. (6.78 sq.m.) respectively.

HK$1,200,000

The property is held from the Government under New Grant No. 9166 for for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of New Territories Leases (Extension) Ordinance.

The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is New Sino Investment Limited which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. N175124 dated 1 June 1973. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to an Order No. D00398/NT/07 by the Building Authority under S.26 of the Buildings Ordinance vide Memorial No. 08012300511578 dated 21 December 2007.
According to the Group, the estimated costs to comply with the above Building Order are in the total sum of HK$847,196, of which the property will share HK$11,861 in proportion to the undivided shares. Our valuation has not reflected this estimated sum.

– IV-43 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat M on 4th Floor, The property comprises a Lung Wa Building, No. residential unit in a 22 Fuk Wa Street, 13-storey composite Kowloon building, which was completed in 1964. 1/144th share of and in the Remaining Portion The property has a saleable of Section A, the area of approximately 408 Remaining Portion of sq.ft. (37.90 sq.m.). Section B, the Remaining Portion of The property is held under a Section C, the Government Lease for a Remaining Portion of term expired on 30 June Section E, the 1997 and has been extended Remaining Portion of to 30 June 2047 by virtue of Section F and the New Territories Leases Remaining Portion of (Extension) Ordinance. New Kowloon Inland Lot No. 1637. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

The property comprises a As provided by the Group, residential unit in a the property is divided into 13-storey composite 3 sub-units and all of them building, which was are tenanted with the latest completed in 1964. expiry on 15 June 2009. As at 31 January 2009, the The property has a saleable total monthly rent area of approximately 408 receivable was HK$10,400. sq.ft. (37.90 sq.m.).

HK$1,020,000

Notes:

The registered owner is New Sino Investment Limited which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to Deed of Covenant vide Memorial No. UB432921 dated 3 April 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to an Order No. D00344/K/07/TD by the Building Authority under S.26 of the Buildings Ordinance (Re: For internal common areas and exterior of the building only) vide Memorial No. 07121402370462 dated 2 November 2007.
According to the Group, a letter dated 3 November 2008 from Messrs. S. K. Lam, Alfred Chan & Co. Solicitors & Notaries acting for the Incorporated Owners of Lung Wa Building has been issued to each of the owners of the building stating that an amount in total of HK$4,742,576 is required for the purpose of building repairs to comply with the above Building Order. And that each owner has to bear HK$30,000 and the balance will be paid off out of the building fund of Lung Wa Building. Our valuation has not reflected this sum.

– IV-44 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Unit B on 6th Floor, Parkes Building, Nos. 17-23 Parkes Street, Kowloon

The property comprises a residential unit in a 12-storey composite building, which was completed in 1975.

The property has a saleable area of approximately 278 sq.ft. (25.83 sq.m.).

The property is held from the Government under Conditions of Regrant Nos. 8064 and 8123 and two Government Leases for a common term of 150 years commencing from 25 December 1887.

As provided by the Group, the property is subject to a lease expiring on 2 March 2009 at a monthly rent of HK$4,800.

HK$1,150,000

The government rent is HK$74 per annum.

Notes:

The registered owner is Lanbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-45 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

2nd Floor, Golden The property comprises a As provided by the Group, Jubilee House, No. 399 residential unit in a the property is divided into Lockhart Road, Hong 14-storey composite 4 sub-units and three of Kong building, which was them are tenanted with the completed in 1964. latest expiry on 7 August 1/117th share of and in 2009. As at 31 January Section B, Section C According to the 2009, the total monthly rent and Section D of information provided by the receivable is HK$17,200. Marine Lot No. 435. Rating and Valuation The remaining unit was Department, the property vacant. has a saleable area of approximately 653 sq.ft. (60.67 sq.m.). The property is held under Government Lease for a term of 99 years commencing from 1 July 1927 and renewable for a further term of 99 years.

HK$2,550,000

The government rent for each of the Section B, Section C and Section D of Marine Lot No. 435 is HK$28 per annum.

Notes:

The registered owner is Lanbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB498672 dated 16 July 1965. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-46 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

11th Floor, No. 501 The property comprises a Nathan Road, Kowloon residential unit in a 14-storey composite 1/51st share of and in building, which was Kowloon Inland Lot completed in 1964. Nos. 7749 and 7750.

The property has a saleable area of approximately 606 sq.ft. (56.30 sq.m.).

As provided by the Group, HK$1,880,000 the property is divided into 4 sub-units and all of them are tenanted with the latest expiry on 31 July 2009. As at 31 January 2009, the total monthly rent receivable was HK$17,200.

The property is held from the Government under Conditions of Re-grant Nos. 6171 and 6173 for a term of 150 years commencing from 25 December 1894.

The government rent is HK$6 per annum.

Notes:

The registered owner is Lanbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB457757 dated 15 September 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-47 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

3rd Floor, No. 192 Tai The property comprises a As provided by the Group, HK$1,420,000 Nan Street, Kowloon residential unit in a 9-storey the property is divided into composite building, which 4 sub-units and all of them 1/10th share of and in was completed in 1968. are tenanted with the latest the Remaining Portion expiry on 19 January 2010. of New Kowloon Inland The property has a saleable As at 31 January 2009, the Lot No. 597. area of approximately 678 total monthly rent sq.ft. (62.99 sq.m.). receivable was HK$13,700.

The property is held under Government Leases for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance.

The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is Lanbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB621802 dated 1 April 1968. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-48 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at Property Description & Tenure Particular of Occupancy 31 January 2009 43. Ninth Floor, No. 13 The property comprises a As provided by the Group, HK$2,000,000 Cheung Sha Wan Road, residential unit in an the property is divided into Kowloon 11-storey composite 5 sub-units and three of building, which was them have are tenanted with 1/13th share of and in completed in 1964. the latest expiry on 14 the Remaining Portion November 2009. As at 31 of New Kowloon Inland The property has a saleable January 2009 the total Lot No. 2169. area of approximately 755 monthly rent receivable was sq.ft. (70.14 sq.m.). HK$11,100. The property is held under Government Leases for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is Lanbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB453119 dated 21 August 1964. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-49 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property Description & Tenure 44. Flat A on 6th Floor, No. The property comprises a 240 Lockhart Road, residential unit in a Hong Kong 12-storey composite building, which was 1/24th share of and in completed in 1967. the Remaining Portion of Inland Lot No. 5224 The property has a saleable and the Remaining area of approximately 617 Portion of Inland Lot sq.ft. (57.32 sq.m.). No. 5225. The property is held under Government Leases for a term of 99 years commencing from 25 May 1929 and renewable for a further term of 99 years. The government rent is totally HK$24 per annum for the whole of Inland Lot Nos. 5224 and 5225.

Market Value in existing state as at 31 January 2009

Particular of Occupancy

As provided by the Group, HK$2,430,000 the property is vacant.

Notes:

The registered owner is Lanbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenants vide Memorial No. UB603925 dated 25 September 1967. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-50 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Unit A on 8th Floor, Parkes Building, Nos. 17-23 Parkes Street, Kowloon

The property comprises a residential unit in a 12-storey composite building, which was completed in 1975.

The property comprises a As provided by the Group, residential unit in a the property is divided into 12-storey composite 2 sub-units and all of them building, which was are tenanted with the latest completed in 1975. expiry on 30 June 2009. As at 31 January 2009 the total The property has a saleable monthly rent receivable was area of approximately 286 HK$8,800. sq.ft. (26.57 sq.m.).

The property is held from the Government under Conditions of Regrant Nos. 8064 and 8123 and two Government Leases for a common term of 150 years commencing from 25 December 1887.

HK$1,200,000

The government rent is HK$74 per annum.

Notes:

The registered owner is Newbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-51 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at Property Description & Tenure Particular of Occupancy 31 January 2009 46. 1st Floor Rear Portion, The property comprises a As provided by the Group, HK$1,550,000 No. 1 San Lok Street, residential unit in a 3-storey the property is divided into Shek Wu Hui, Sheung composite building, which 4 sub-units and all of them Shui, New Territories was completed in 1965. are tenanted with the latest expiry on 31 December The property comprises The property has a saleable 2009. As at 31 January 1/12th share of and in area of approximately 700 2009, the total monthly rent Lot No. 3813 in D.D. sq.ft. (65.03 sq.m.). receivable was HK$15,800. 91. The property is held from the Government under New Grant No. 9098 for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is Newbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. N159686 dated 29 December 1966. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-52 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

5th Floor of Block H, The property comprises a As provided by the Group, Golden Horse Mansion, residential unit in a the property is divided into No. 27 Mansion Street, 19-storey composite 4 sub-units and all of them Hong Kong building, which was are tenanted with the latest completed in 1960. expiry on 5 November 1/9th share of and in 2009. As at 31 January Section D of The property has a saleable 2009, the total monthly rent Sub-section 1 of area of approximately 679 receivable was HK$18,000. Section D of Quarry sq.ft. (63.08 sq.m.). Bay Inland Lot No. 4.

HK$2,150,000

The property is held under a Government Lease for a term of 999 years commencing from 2 July 1894.

The government rent is HK$2.51 per annum for the whole of the lot.

Notes:

The registered owner is Newbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB2945601 dated 28 November 1985. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-53 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

6th Floor and its The property comprises a As provided by the Group, Interior Wall, No. 463 residential unit in a the property is divided into Hennessy Road, Hong 15-storey composite 4 sub-units and all of them Kong building, which was are tenanted with the latest completed in 1966. expiry on 26 December 1/42nd share of and in 2010. As at 31 January the Remaining Portion The property has a saleable 2009 the total monthly rent of Inland Lot No. 7152. area of approximately 532 receivable was HK$18,850. sq.ft. (49.42 sq.m.).

HK$2,100,000

The property is held under a Government Lease for a term of 99 years commencing from 15 April 1929 and renewable for a further term of 99 years.

The government rent is HK$12 per annum of the whole of the lot.

Notes:

The registered owner is Newbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB3751412 dated 4 June 1988. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-54 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Market Value in existing state as at 31 January 2009

Property Description & Tenure Particular of Occupancy 31 January 2009 49. 7th Floor, No. 109 The property comprises a As provided by the Group, HK$1,450,000 Cheung Sha Wan Road, residential unit in a the property is divided into Kowloon 15-storey composite 4 sub-units and all of them building, which was are tenanted with the latest 1/77th share of and in completed in 1964. expiry on 1 November the Remaining Portion 2009. As at 31 January of New Kowloon Inland The property has a saleable 2009, the total monthly rent Lot No. 1348, the area of approximately 572 receivable was HK$14,700. Remaining Portion of sq.ft. (53.14 sq.m.). New Kowloon Inland Lot No. 1349, the The property is held under Remaining Portion of Government Leases for a New Kowloon Inland term expired on 30 June Lot No. 1350 and the 1997 and has been extended Remaining Portion of to 30 June 2047 by virtue of New Kowloon Inland the New Territories Leases Lot No. 1351. (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is Newbo Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB477709 dated 29 January 1965. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-55 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Unit A on 10th Floor, Parkes Building, Nos. 17-23 Parkes Street, Kowloon

The property comprises residential unit in a 12-storey composite building, which was completed in 1975.

The property has a saleable area of approximately 286 sq.ft. (26.57 sq.m.).

The property is held from the Government under Conditions of Regrant Nos. 8064 and 8123 and two Government Leases for a common term of 150 years commencing from 25 December 1887.

As provided by the Group, the property is divided into 2 sub-units and all of them are tenanted with the latest expiry on 31 August 2009. As at 31 January 2009, the total monthly rent receivable was HK$8,700.

HK$1,200,000

The government rent is HK$74 per annum.

Notes:

The registered owner is Kingtex Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-56 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Unit B on 8th Floor, Parkes Building, Nos. 17-23 Parkes Street, Kowloon

The property comprises residential unit in a 12-storey composite building, which was completed in 1975.

The property has a saleable area of approximately 278 sq.ft. (25.83 sq.m.).

The property is held from the Government under Conditions of Regrant Nos. 8064 and 8123 and two Government Leases for a common term of 150 years commencing from 25 December 1887.

As provided by the Group, the property is divided into 2 sub-units and all of them are tenanted with the latest expiry on 30 April 2009. As at 31 January 2009, the total monthly rent receivable was HK$8,300.

HK$1,150,000

The government rent is HK$74 per annum.

Notes:

The registered owner is Winhero Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-57 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

7th Floor, No. 250A The property comprises a As provided by the Group, HK$960,000 Cheung Sha Wan Road, residential unit in a the property is divided into Kowloon 13-storey composite 3 sub-units and two of them building, which was are tenanted with the latest 1/36th share of and in completed in 1965. expiry on 31 October 2009. the Remaining Portion As at 31 January 2009, the of New Kowloon Inland The property has a saleable total monthly rent Lot No. 1407 and the area of approximately 391 receivable is HK$6,400. Remaining Portion of sq.ft. (36.32 sq.m.). The remaining unit was New Kowloon Inland vacant. Lot No. 1580. The property is held under Government Leases for a term expired on 30 June 1997 and has been extended to 30 June 2047 by virtue of the New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Notes:

The registered owner is Winhero Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB500270 dated 16 July 1965. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-58 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat B on 10th Floor, Parkes Building, Nos. 17-23 Parkes Street, Kowloon

The property comprises As provided by the Group, HK$1,150,000 residential unit in a the property is divided into 12-storey composite 2 sub-units and one of them building, which was is tenanted with the expiry completed in 1975. on 31 October 2009 for a monthly rent of HK$3,900. The property has a saleable The other sub-unit was area of approximately 278 vacant. sq.ft. (25.83 sq.m.).

The property is held from the Government under Conditions of Regrant Nos. 8064 and 8123 and two Government Leases for a common term of 150 years commencing from 25 December 1887.

The government rent is HK$74 per annum.

Notes:

The registered owner is Allied Wide Investment Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant vide Memorial No. UB1219069 dated 1 December 1975. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.

– IV-59 –

PROPERTY VALUATION OF THE EVERLONG GROUP

APPENDIX IV

Property

Description & Tenure

Particular of Occupancy

Market Value in existing state as at 31 January 2009

Flat E on 35th Floor of The property comprises a Block 2, Royal Ascot, residential unit in Block 2 No. 1 Tsun King Road, of Royal Ascot which a Shatin, New Territories development consists of 11 residential towers over a

122/265814th share of 3-storey landscape and and in Sha Tin Town carpark podium. Block 2 Lot No. 411. rises 33 storeys and was completed in 1995.

As provided by the Group, the property is vacant.

HK$9,450,000

The property has a gross floor area and saleable area of approximately 1,620 sq.ft. (150.50 sq.m.) and 1,399 sq.ft. (129.97 sq.m.) respectively.

The property is held from the Government under New Grant No. ST12548 for a term from 8 December 1993 to 30 June 2047.

The annual government rent is equivalent to 3% of the rateable value for time being of the property.

Notes:

The registered owner is Excellence Star Limited, which is a wholly-owned subsidiary of Everlong Limited.
The property is subject to a Deed of Mutual Covenant and Management Agreement vide Memorial No. ST839458 dated 18 November 1995. Since all strata-titled properties in Hong Kong are subject to the Deed of Mutual Covenant in respect of the subject building/development, by comparison, we consider there should be effectively no effect on the value of the property because of the Deed of Mutual Covenant.
The property is subject to a Mortgage in favour of DBS Bank (Hong Kong) Limited to secure part of all moneys in respect of general banking facilities to Excellence Star Limited vide Memorial No. 08052602500146 dated 30 April 2008. As advised by the Group, the mortgage will not be discharged before the completion.

– IV-60 –

PROPERTY VALUATION OF THE SHINEY DAY GROUP

APPENDIX V

The following is the text of a letter, summary of values and valuation certificate, prepared for inclusion in this circular, received from Savills Valuation and Professional Services Limited, an independent valuer, in connection with their valuations as of 31 January 2009 of the properties of Wang On Group Limited.

==> picture [72 x 72] intentionally omitted <==

Wang On Group Limited Savills Valuation and 5th Floor Professional Services Limited Wai Yuen Tong Medicine Building 23/F Two Exchange Square 9 Wang Kwong Road Central, Hong Kong Kowloon Bay Kowloon T: (852) 2801 6100 Hong Kong F: (852) 2501 5590

China Agri-Products Exchange Limited Room 901, 9th Floor China Merchants Tower Shun Tak Centre Sheung Wan Hong Kong

EA LICENCE: C-023750 savills.com

6 March 2009

Dear Sirs,

RE: VARIOUS PROPERTIES SITUATED IN THE PEOPLE’S REPUBLIC OF CHINA

We refer to your instructions for us to value the properties held by the Shiney Day Group, a sub-group of Wang On Group Limited (hereinafter, “Wang On Group Limited” and its subsidiaries referred to as the “Group”), in the People’s Republic of China (the “PRC”), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of values of the properties as at 31 January 2009 for inclusion in circulars issued respectively by Wang On Group Limited and China Agri-Products Exchange Limited.

Our valuation of each of the properties is our opinion of its market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

– V-1 –

PROPERTY VALUATION OF THE SHINEY DAY GROUP

APPENDIX V

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures, management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

In the course of our valuation of the properties, unless otherwise stated, we have assumed that transferable land use rights of the properties for their specific terms at a nominal annual land use fees have been granted and that any land grant premium payable has already been fully paid. In valuing the properties, unless otherwise stated, we have also assumed that the owners have enforceable title to their properties and have free and uninterrupted right to use, occupy or assign the properties for the whole of the unexpired terms as granted.

In valuing the property in Group I, which is held for investment, we have capitalized the net incomes as shown in the schedule provided to us with due allowance for the reversionary income potential of the property. We have adopted the direct comparison method by making reference to the comparable market rental transactions as available in the market to arrive at the market rent of the property.

In valuing the property in Group II, which is held under development, we have valued it on the basis that it will be developed and completed in accordance with the latest development proposal provided to us. In arriving at our opinion of value, we have adopted the direct comparison approach by making reference to comparable sales evidence as available in the relevant market to arrive at the capital value of the property as if the property were completed at the date of valuation and have also taken into account of the development costs spent and to be spent to reflect the quality of the completed development. The “capital value of the property as if completed” represents our opinion of the aggregate selling prices of the property assuming that it would have been completed at the date of valuation.

We have been provided with copies of extracts of title documents relating to the properties. However, we have not inspected the original documents to ascertain the existence of any amendments which do not appear on the copies handed to us. We have relied to a very considerable extent on information given by you and your legal advisers, Jiangsu Xuzhou Weiyang Law Firm and Jin Da Di Law Firm, regarding the titles to the properties.

We have relied to a very considerable extent on information given by you and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, ownership, identification of the properties, development proposal, tenancy particulars, construction costs, site and floor areas and all other relevant matters. Dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us and are therefore only approximations. No on-site measurements have been made. We have had no reason to doubt the truth and accuracy of the information provided to us by you which is material to our valuation. We have also advised by you that no material facts have been omitted from the information provided.

– V-2 –

PROPERTY VALUATION OF THE SHINEY DAY GROUP

APPENDIX V

We have inspected the exterior and where possible, the interior of the properties. During the course of our inspection, we did not note any serious defects. Moreover, no structural survey has been made, we are therefore unable to report that the properties are free from rot, infestation or any other defects. No tests were carried out on any of the services.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the properties or for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

In valuing the properties, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by the Stock Exchange of Hong Kong Limited and Valuation Standards on Properties (First Edition) published by the Hong Kong Institute of Surveyors.

Unless otherwise stated, all money amounts are stated in Renminbi.

We enclose herewith our summary of values and valuation certificate.

Yours faithfully, For and on behalf of Savills Valuation and Professional Services Limited Charles C K Chan MSc FRICS FHKIS MCIArb RPS(GP) Managing Director

Note: Charles C K Chan, MSc, FRICS, FHKIS, MCIArb, RPS(GP), has been a qualified valuer and has about 24 years’ experience in the valuation of properties in Hong Kong and has about 19 years’ experience in the valuation of properties in the PRC.

– V-3 –

PROPERTY VALUATION OF THE SHINEY DAY GROUP

APPENDIX V

SUMMARY OF VALUES

No. Property Capital value in existing state as at 31 January 2009 Interest attributable to the Group Group I – Property held by the Group for investment in the PRC 1. Xuzhou Agricultural By-Products Wholesaling Market, Yingbin Main Road East, Quanshan District, Xuzhou, Jiangsu Province, PRC RMB175,000,000 51% Sub-total: RMB175,000,000 Group II – Property held by the Group under development in the PRC 2. A proposed agricultural by-products wholesaling market, South of Erhuan North Road, Yulin Urban District, Yulin, Guangxi Province, PRC RMB406,000,000 65% Sub-total: RMB406,000,000 Grand total: RMB581,000,000	No. Property Capital value in existing state as at 31 January 2009 Interest attributable to the Group Group I – Property held by the Group for investment in the PRC 1. Xuzhou Agricultural By-Products Wholesaling Market, Yingbin Main Road East, Quanshan District, Xuzhou, Jiangsu Province, PRC RMB175,000,000 51% Sub-total: RMB175,000,000 Group II – Property held by the Group under development in the PRC 2. A proposed agricultural by-products wholesaling market, South of Erhuan North Road, Yulin Urban District, Yulin, Guangxi Province, PRC RMB406,000,000 65% Sub-total: RMB406,000,000 Grand total: RMB581,000,000	Capital value attributable to the Group as at 31 January 2009 RMB89,250,000
		RMB89,250,000

	er development in the PRC RMB406,000,000 65% RMB406,000,000	RMB263,900,000
		RMB263,900,000
	RMB581,000,000	RMB353,150,000

– V-4 –

PROPERTY VALUATION OF THE SHINEY DAY GROUP

APPENDIX V

VALUATION CERTIFICATE

Group I – Property held by the Group for investment in the PRC

				Capital value in
				existing state as at
	Property	Description and tenure	Particulars of occupancy	31 January 2009
1.	Xuzhou Agricultural	The property comprises a	As at the date of valuation,	RMB175,000,000
	By-Products	parcel of land with a site	the property is operated as
	Wholesaling Market,	area of approximately	an agricultural wholesale	(51% interest
	Yingbin Main Road	193,673.91 sq.m.	market and subject to	attributable to
	East,	(2,084,706 sq.ft.), upon	various tenancies with	the Group:
	Quanshan District,	which various buildings and	majority terms of 1 year	RMB89,250,000)
	Xuzhou,	structures, mostly	and latest expiry date of 27
	Jiangsu Province, PRC	completed between 1986	September 2020 at a total
		and 2008, were erected.	monthly income of
			approximately
		The total gross floor area of	RMB2,170,000, exclusive
		the buildings and structures	of management fees.
		of the property is
		approximately 79,652.73	Portion of the property was
		sq.m. (857,382 sq.ft.).	occupied by the Group for
			ancillary uses whilst the
		The land use rights of the	remaining portion with a
		property were granted for a	gross floor area of
		term of 50 years expiring on	approximately 352.48 sq.m.
		27 November 2057 for	was vacant.
		warehouse and logistics
		uses.

Notes:

Pursuant to a State-owned Land Use Rights Certificate Xu Tu Guo Yong (2008) Di No. 12888 dated 26 May 2008 issued by the State Land Resources Bureau, the land use rights of a parcel of land with a site area of 193,673.91 sq.m. have been granted to Xuzhou Yuanyang Trading Development Company Limited (徐州源洋商貿發展有限公司) (“Xuzhou Yuanyang”, a 51% owned subsidiary of Wang On Group Limited) for a land use term expiring on 27 November 2057 for warehouse and logistics uses.
Pursuant to a Building Ownership Certificate Xu Fang Quan Zheng Yun Long Zi Di No. 56520 issued by Xuzhou Building Administrative Bureau on 17 October 2007, the building ownership of three buildings with a total gross floor area of 6,746.94 sq.m. was held by Xuzhou Yuanyang.
According to the information provided by the Group, the Group acquired 51% shareholdings of Xuzhou Yuanyang by injection of capital of RMB35,700,000 on 26 January 2007 and the book value of the property as at the date of acquisition was about RMB31,000,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Xuzhou Yuanyang has acquired the land use rights of the property and is entitled to use, mortgage, lease or dispose of the land of the property. Xuzhou Yuanyang is entitled to construct buildings and structures upon the land;
(ii) there is no legal impediment for Xuzhou Yuanynag to operate business (included but not limited to agricultural by-products wholesaling market) on the land;
(iii) Xuzhou Yuanyang has acquired the building ownership of the buildings of the property with a total gross floor area 6,746.94 sq.m. and is entitled to use, mortgage, lease or dispose of these buildings of the property;
(iv) portion of the buildings and structures of the property has not been registered with the government but Xuzhou Yuanyang can use these unregistered buildings and structures legally;
(v) Xuzhou Yuanyang is in the process of applying for the relevant Building Ownership Certificate of the unregistered buildings and structures of the property and there is no substantial legal impediment for Xuzhou Yuanyang to obtain it.

– V-5 –

PROPERTY VALUATION OF THE SHINEY DAY GROUP

APPENDIX V

VALUATION CERTIFICATE

Group II – Property held by the Group under development in the PRC

Property Description and tenure 2. A proposed agricultural The property comprises by-products 5 parcels of contiguous land wholesaling market, with a total site area of South of Erhuan North approximately 273,884.07 Road, sq.m. (2,948,088 sq.ft.). Yulin Urban District, Yulin, According to the latest Guangxi Province, PRC development proposals provided to us, the property will be developed as an agricultural wholesale market in two phases. Phase I of the proposed development will comprises various blocks of 2 to 6-storey buildings with superstructures completed in the end of 2008. Phase I has a total gross floor area of approximately 68,352 sq.m. (735,741 sq.ft.). Phase II of the proposed development has a planned total gross floor area of approximately 139,314 sq.m. (1,499,576 sq.ft.) and is scheduled to be completed in 2009. The land use rights of the property were granted for a term expiring on 18 July 2047 for commercial services uses.

Capital value in existing state as at 31 January 2009 RMB406,000,000

Particulars of occupancy

As at the date of valuation, RMB406,000,000 the superstructure and external finishing of Phase I (65% interest have been completed while attributable some of the ancillary to the Group: services were under RMB263,900,000) construction.

The remaining portion of the property were pending for construction.

Notes:

Pursuant to five State-owned Land Use Rights Certificates Yu Guo Yong (2007) Di Nos. A807, A808, A809, A913 and A914 all issued by the People’s Government of Yulin in 2007, the land use rights of 5 parcels of land with a total site area of 273,884.07 sq.m. have been granted to Yulin Hongjin Agriculture By-product Wholesale Market Company Limited (玉林宏進農副產品批發市場有限公司) (“Yulin Hongjin”, a 65% owned subsidiary of Wang On Group Limited) for a land use term expiring on 18 July 2047 for commercial services uses.
Pursuant to the Planning Permit for Construction Land No. 2007-138 issued by Yulin Planning Administrative Bureau on 19 July 2007, Yulin Hongjin is permitted to use a parcel of land with a site area of 273,884 sq.m. for construction.

– V-6 –

PROPERTY VALUATION OF THE SHINEY DAY GROUP

APPENDIX V

Pursuant to the three Planning Permit for Construction Works Nos. 2007-107, Jian Zi Di 450900200800014 and Jian Zi Di 450900200800068 all issued by Yulin Planning Administrative Bureau on 5 November 2007, 2 February 2008 and 11 August 2008 respectively, Yulin Hongjin is permitted to construct various buildings with a total gross floor area of 82,351.40 sq.m.
Pursuant to the information provided, the construction cost spent and to be spent for the proposed development as at the date of valuation are about RMB81,220,000 and RMB205,599,000. We have taken into account such amounts in our valuation.
According to the information provided by the Group, the land of the property was acquired on 8 June 2007 at a total cost of about RMB78,940,000, inclusive of levies. Apart from the costs on land, the Group spent about RMB93,100,000, being the construction cost, financial cost and other cost, as at the date of valuation.
The capital value of the property as if completed as at the date of valuation was RMB749,900,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Yulin Hongjin has acquired the land use rights of the property and is entitled to use, mortgage, lease or dispose of the land of the property;
(ii) Yuling Hongjin has acquired the development and construction approval for the construction of the property and the existing construction of the property is in compliance with the relevant regulations and laws and approval; and
(iii) portion of the proposed development under State-owned Land Use Rights Certificate Yu Guo Yong (2007) Di Nos. A809 and Planning Permit for Construction Work No. 2007-107 is subject to mortgage in favour to Agricultural Development Bank of China, Yulin Branch for an amount of RMB40,000,000.

– V-7 –

GENERAL INFORMATION

APPENDIX VI

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement contained in this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests or short positions of Directors and chief executives in Shares, underlying Shares or debentures of the Company

Save as disclosed below, as at the Latest Practicable Date, none of the Directors or chief executive of the Company and/or any of their respective associates had any interest or short position in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) (a) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (b) which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) which were required, pursuant to Part XV of the SFO and the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange:

Long positions in the Shares or underlying Shares

						Approximate
	Number of Adjusted Shares or underlying			Adjusted Shares	held,	percentage of
		capacity and nature of interest		(Note (a))		the Company’s
	Personal	Family	Corporate	Other		total issued
Name of Director	interest	interest	interest	interest	Total	share capital
Mr. Tang Ching Ho	3,892,550	3,892,540	14,238,426	552,667,749	574,691,265	24.34%
		(Note (b))	(Note (c))	(Note (d))
Ms. Yau Yuk Yin	3,892,540	18,130,976	–	552,667,749	574,691,265	24.34%
		(Note (e))		(Note (f))
Mr. Chan Chun Hong,	156,000	–	–	–	156,000	0.007%
Thomas	(Note (g))

– VI-1 –

GENERAL INFORMATION

APPENDIX VI

Notes:

(a) The interests are based on (i) the Capital Reorganisation has become effective; (ii) the Open Offer and the Bonus Issue have completed on the basis that the Share Options have been exercised in full; and (iii) 2,361,279,270 Adjusted Shares will be in issue upon the Capital Reorganisation, the Open Offer and the Bonus Issue becoming effective. The terms and the details of the Capital Reorganisation, the Open Offer, the Bonus Issue and Adjusted Shares are described and contained in the Company’s announcement dated 13 February 2009 and the Company’s circular dated 3 March 2009 in respect of the proposals of capital reorganisation and open offer.
(b) Mr. Tang Ching Ho was taken to be interested in those Adjusted Shares in which his spouse, Ms. Yau Yuk Yin, was interested.
(c) Mr. Tang Ching Ho was taken to be interested in those Adjusted Shares in which Caister Limited, a company which is wholly and beneficially owned by him, was interested.
(d) Mr. Tang Ching Ho was taken to be interested in those Adjusted Shares by virtue of being the founder of a discretionary trust, namely Tang’s Family Trust.
(e) Ms. Yau Yuk Yin was taken to be interested in those Adjusted Shares in which her spouse, Mr. Tang Ching Ho, was interested.
(f) Ms. Yau Yuk Yin was taken to be interested in those Adjusted Shares by virtue of being a beneficiary of Tang’s Family Trust.
(g) These Adjusted Shares represented the Share Options granted to Mr. Chan Chun Hong, Thomas which would be exercisable during the period from 2 January 2009 to 7 January 2019, which Adjusted Shares and the exercise price of the Share Options are subject to adjustment in accordance with the Share Option Scheme.

(b) Persons who have interests or short positions in the Shares or underlying Shares which are discloseable under Divisions 2 and 3 of Part XV of the SFO

Save as disclosed below, as at the Latest Practicable Date, so far as is known to the Directors, no person had, or were deemed or taken to have interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or, who were, 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 any other member of the Group or had any option in respect of such capital:

– VI-2 –

GENERAL INFORMATION

APPENDIX VI

(i) Long Positions in the Shares

				Approximate
				percentage of
			Number of	the Company’s
			Adjusted	total issued
Name of Shareholder	Notes	Capacity	Shares	share capital
			(Note (a))
Accord Power Limited	(b)	Beneficial owner	552,667,749	23.41%
(“Accord Power”)
Trustcorp Limited	(b)	Interest of controlled	552,667,749	23.41%
		corporation
Newcorp Ltd.	(c)	Interest of controlled	552,667,749	23.41%
		corporation
Newcorp Holdings Ltd.	(d)	Interest of controlled	552,667,749	23.41%
		corporation
Mr. David Henry	(e)	Interest of controlled	552,667,749	23.41%
Christopher Hill		corporation
Ms. Rebecca Ann Hill	(f)	Family interest	552,667,749	23.41%
Mr. David William	(g)	Interest of controlled	552,667,749	23.41%
Roberts		corporation
Kingston Securities	(h)	Beneficial owner	20
Limited (“Kingston		Other	1,433,267,781
Securities”)			1,433,267,801	60.69%
Ms. Chu Yuet Wah	(h)	Interest of controlled	1,433,267,801	60.69%
		corporation
Ms. Ma Siu Fong	(h)	Interest of controlled	1,433,267,801	60.69%
		corporation

Notes:

(a) The interests are based on (i) the Capital Reorganisation has become effective; (ii) the Open Offer and the Bonus Issue have completed on the basis that the Share Options have been exercised in full; and (iii) 2,361,279,270 Adjusted Shares will be in issue upon the Capital Reorganisation, the Open Offer and the Bonus Issue becoming effective.
(b) Accord Power is wholly owned by Trustcorp Limited in its capacity as the trustee of Tang’s Family Trust. Accordingly, Trustcorp Limited was taken to be interested in those Adjusted Shares held by Accord Power.
(c) Trustcorp Limited is a wholly-owned subsidiary of Newcorp Ltd. and accordingly, Newcorp Ltd. was taken to be interested in those Adjusted Shares in which Trustcorp Limited was interested.
(d) Newcorp Ltd. is a wholly-owned subsidiary of Newcorp Holdings Ltd. and accordingly, Newcorp Holdings Ltd. was taken to be interested in those Adjusted Shares in which Newcorp Ltd. was interested.
(e) Mr. David Henry Christopher Hill owned 35% interest in the issued share capital of Newcorp Holdings Ltd. and was therefore taken to be interested in those Adjusted Shares in which Newcorp Holdings Ltd. was interested.

– VI-3 –

GENERAL INFORMATION

APPENDIX VI

(f) Ms. Rebecca Ann Hill is taken to be interested in those Adjusted Shares in which her spouse, Mr. David Henry Christopher Hill, was interested.
(g) Mr. David William Roberts owned 35% interest in the issued share capital of Newcorp Holdings Ltd. and was therefore taken to be interested in those Adjusted Shares in which Newcorp Holdings Ltd. was interested.
(h) These Adjusted Shares are held by Kingston Securities as an underwriter in the Open Offer with the Bonus Issue. Ms. Chu Yuet Wah and Ms. Ma Siu Fong owned 51% and 49% interest in Kingston Securities respectively.
(ii) Interests in a subsidiary of the Company

			Shareholding
Name of Subsidiary	Name	Capacity	percentage
Wang Hing Vegetables	Lam Mei Ki	Beneficial	49%
Wholesale Company		Owner
Limited

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with the Company or any member of the Enlarged Group (excluding contracts expiring or determinable by the relevant member of the Enlarged Group within one year without payment of compensation other than statutory compensation).

– VI-4 –

GENERAL INFORMATION

APPENDIX VI

4. EXPERTS AND CONSENTS

The following are the qualifications of the experts who have been named in this circular or have given opinions, letters or advice contained in this circular:

Name	Qualification
Vigers Appraisal & Consulting Limited	Professional Property Valuers
(“Vigers”)
Savills Valuation and Professional	Professional Property Valuers
Services Limited (“Savills”)
HLB Hodgson Impey Cheng (“HLB”)	Chartered Accountants
	Certified Public Accountants
Ernst & Young (“EY”)	Certified Public Accountants

Each of Vigers, Savills, HLB and EY has given and has not withdrawn its written consent to the issue of this circular with the inclusion therein of its letter and/or references to its name, in the form and context in which they appear.

As at the Latest Practicable Date, each of Vigers, Savills, HLB and EY was not beneficially interested in the share capital of the Company or any member of the Enlarged Group nor had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in the Company or any member of the Enlarged Group, nor did it have any interest, either directly or indirectly, in the assets which have been acquired or disposed of by or leased to the Company or any member of the Enlarged Group since 31 March 2008, being the date to which the latest published audited consolidated financial statements of the Group were made up.

5. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, none of the members of the Enlarged Group was engaged in any litigation or arbitration or claim which is in the opinion of the Directors of material importance and no litigation or claim, which is of material importance in the opinion of the Directors, was known to the Directors to be pending or threatened by or against any member of the Enlarged Group.

6. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

To the best knowledge of the Directors, as at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective associates had any interest in a business which competes or is likely to compete either directly or indirectly with the business of the Group which would be required to be disclosed under Rule 8.10 of the Listing Rules if the Directors were controlling shareholders.

– VI-5 –

GENERAL INFORMATION

APPENDIX VI

7. DIRECTORS’ INTERESTS IN CONTRACTS

Save as disclosed herein, the Directors confirm that there was no contract or arrangement subsisting as at the Latest Practicable Date in which a Director was materially interested which was significant in relation to the business of the Enlarged Group.

8. DIRECTORS’ INTERESTS IN ASSETS

As at the Latest Practicable Date, none of the Directors had any interest, directly or indirectly, in any assets which had been, since 31 March 2008, being the date on which the latest published audited accounts of the Company were made up, acquired or disposed of by or leased to any member of the Enlarged Group, or are proposed to be acquired or disposed of by or leased to any member of the Enlarged Group.

9. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business, have been entered by members of the Enlarged Group after the date falling two years prior to the issue of this circular and up to the Latest Practicable Date and which are or may be material:

(a) The Acquisition Agreement.
(b) The Disposal Agreement.
(c) An underwriting agreement entered into between Accord Power, Kingston Securities and the Company on 10 February 2009 in connection with the proposed issue of the offer shares (with bonus shares) by way of open offer to qualifying shareholders upon the terms and conditions set out in the underwriting agreement, details of which are set out in the Company’s announcement and circular dated 13 February 2009 and 3 March 2009, respectively.
(d) A top-up placing and top-up subscription agreement entered into between Accord Power, a substantial shareholder of the Company, Kingston Securities and the Company on 26 November 2008 in connection with the placing of an aggregate of up to 900 million Shares held by Accord Power to independent third parties at a price of HK$0.022 per Share. The net proceeds of approximately HK$18.81 million were raised.
(e) A placing agreement entered into between the Company and Kingston Securities on 26 November 2008 in connection with the placing of 672.6 million new Shares to independent third parties at a price of HK$0.022 per Share. The net proceeds of approximately HK$14.43 million were raised.
(f) A loan agreement dated 21 November 2008 entered into between Fully Finance Limited, an indirect wholly-owned subsidiary of the Company, and LeRoi in connection with the grant to LeRoi a loan facility of not exceeding a sum of HK$40 million.

– VI-6 –

GENERAL INFORMATION

APPENDIX VI

(g) A loan agreement dated 3 November 2008 entered into between Rich Time Strategy Limited (“ Rich Time ”), an indirect wholly-owned subsidiary of the Company, and WYT in connection with the grant to WYT a loan facility of not exceeding a sum of HK$30 million.
(h) A loan agreement entered into between Rich Time and WYT on 2 October 2008 relating to the advance to WYT a loan of HK$5 million for a period of one year.
(i) A loan agreement entered into between Rich Time and WYT on 5 September 2008 relating to the advance to WYT a loan of HK$5 million for a period of one year.
(j) A conditional agreement dated 31 July 2008 entered into between Suitbest Investments Limited (“ Suitbest ”), an indirect wholly-owned subsidiary of the Company, and Joyful Leap Investments Limited (“ Joyful Leap ”) in respect of the sale and purchase of the entire issued share capital in Strengthen Investments Limited (“ Strengthen Investments ”) and the assignment of a loan of HK$195.6 million at an aggregate consideration of HK$197.8 million.
(k) A top-up placing and top-up subscription agreement entered into between Rich Time, an indirect wholly-owned subsidiary of the Company, Kingston Securities and WYT on 7 May 2008 in connection with the placing of an aggregate of 335,004,000 shares of WYT held by Rich Time to independent third parties at a price of HK$0.165 per share.
(l) A top-up placing and top-up subscription agreement entered into between Accord Power, Kingston Securities and the Company on 26 March 2008 in connection with the placing of an aggregate of 900 million Shares at a price of HK$0.075 per Share. The net proceeds of approximately HK$65.3 million were raised.
(m) A placing agreement entered into between the Company and Kingston Securities on 26 March 2008 in connection with the placing of an additional 460 million Shares at a price of HK$0.075 per Share. The net proceeds of approximately HK$33.6 million were raised.
(n) A sale and purchase agreement entered into between Joyful Leap and Suitbest on 7 January 2008 in connection with the sale and purchase of the entire issued share capital of Brightest Investments Limited and the assignment of a loan of approximately HK$177.3 million at an aggregate consideration of HK$240 million.
(o) A sale and purchase agreement dated 23 November 2007 entered into between Jumbo Sun Investments Limited, its guarantor, Strengthen Investments, its guarantor, an independent third party and its guarantor to purchase 50% each of the issued share capital of Vast Time Limited at a consideration of RMB11.25 million.

– VI-7 –

GENERAL INFORMATION

APPENDIX VI

(p) A conditional agreement entered into between Well Victory Investments Limited, a then wholly-owned subsidiary of the Company, and an independent third party in the PRC as the joint venture partner on 16 November 2007 in connection with the formation of a sino-foreign joint venture company for development, operations and management of agricultural by-products wholesaling marketplace and related facilities, and sale and rental of properties in Zhengzhou, the PRC. A termination notice was served by the Group on the joint venture partner since certain conditions could not be fulfilled as scheduled.
(q) A conditional agreement entered into between Makwin Investment Limited, an indirect wholly-owned subsidiary of the Company, and independent third parties on 3 July 2007 in connection with the acquisition of a 20% equity interest in each of the three companies established in the PRC engaging in the wholesaling of agricultural by-products for an aggregate cash consideration of HK$73,470,000. A deposit of HK$10 million was paid upon signing of the agreement.
(r) A placing agreement entered into between Rich Time and DBS Asia Capital Limited on 11 June 2007 in connection with the placing of an aggregate of 210 million shares of WYT held by the Group to independent third parties at a price of HK$0.46 per share.
(s) An agreement entered into between the Company and Lehman Brothers Commercial Corporation Asia Limited (“ Lehman Brothers ”) on 15 May 2007 in connection with the issue of a total of 200 million unlisted warrants to Lehman Brothers entitling the holder thereof the right to subscribe for 200,000,000 subdivided Shares of HK$0.005 each at a subscription price of HK$0.34 per Share (as adjusted). The net proceeds of HK$4.0 million were raised.
(t) A shareholder agreement entered into between Mega Day Limited, an indirect wholly-owned subsidiary of the Company, and certain independent parties in the PRC on 24 March 2007 in connection with the formation of a joint venture company, namely Changzhou Ling Jia Tang Wang Jin Development Company Limited (“ Changzhou Ling Jia Tang ”) for developing an agricultural by-products wholesaling marketplace and ancillary facilities in Changzhou. The registered capital of Changzhou Ling Jia Tang amounts to US$20 million, to which Mega Day Limited will contribute US$8 million.
(u) A top-up placing and subscription agreement entered into between Accord Power, Kingston Securities and the Company on 13 March 2007 in connection with the placing of an aggregate of 53 million Shares of HK$0.10 each at a price of HK$2.8 per share. The net proceeds of approximately HK$144.2 million were raised.
(v) A placing agreement entered into between the Company and Kingston Securities on 13 March 2007 in connection with the placing of an additional 11.5 million new Shares of HK$0.10 each at a price of HK$2.8 per share. The net proceeds of approximately HK$31.1 million were raised.

– VI-8 –

GENERAL INFORMATION

APPENDIX VI

Save as disclosed above, none of the members of the Enlarged Group had entered into any contracts after the date falling two years prior to the issue of this circular and up to the Latest Practicable Date which are not in the ordinary course of business and which are or may be material.

10. MATERIAL ADVERSE CHANGE

As set out in the interim report of the Company for the six months ended 30 September 2008, the Company recorded an unaudited loss attributable to equity holders of the Company of approximately HK$82.9 million for the six months ended 30 September 2008.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Enlarged Group since 31 March 2008, the date on which the latest published audited consolidated financial statements of the Company were made up.

11. GENERAL

(a) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.
(b) The head office and principal place of business of the Company in Hong Kong is at 5/F., Wai Yuen Tong Medicine Building, 9 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong.
(c) The company secretary of the Company is Ms. Mak Yuen Ming, Anita. She is an associate member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.
(d) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(e) The English text of this circular shall prevail over the Chinese text.

– VI-9 –

GENERAL INFORMATION

APPENDIX VI

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours from 9:00 a.m. to 6:00 p.m. on any Business Day at the head office and principal place of business of the Company in Hong Kong at 5/F., Wai Yuen Tong Medicine Building, 9 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong from the date of this circular up to and including the date of the SGM:

(a) the memorandum of association and the bye-laws of the Company;
(b) the letter from the Board, the text of which is set out on pages 6 to 16 of this circular;
(c) the Acquisition Agreement;
(d) the Disposal Agreement;
(e) the material contracts referred to in the section headed “Material contracts” in this appendix;
(f) the annual reports of the Company for the two years ended 31 March 2007 and 2008;
(g) the audited financial statements of Everlong for the period from 28 December 2006 (being the date of incorporation of Everlong) to 31 March 2007, the financial year ended 31 March 2008 and the six months ended 30 September 2008, as set out in Appendix II to this circular;
(h) the report from EY in respect of the unaudited pro forma financial information of the Enlarged Group as set out in Appendix III to this circular;
(i) the written consents of the experts referred to in the section headed “Experts and consents” in this appendix;
(j) the valuation report issued by Vigers as set out in Appendix IV to this circular;
(k) the valuation report issued by Savills as set out in Appendix V to this circular;
(l) the circular issued by the Company dated 26 May 2008 in relation to the discloseable transactions regarding top-up placing and top-up subscription of shares in WYT;
(m) the circular issued by the Company dated 21 August 2008 in relation to the major transaction regarding transfer of 100% interest in Strengthen Investments and assignment of the sale loan;
(n) the circular issued by the Company dated 18 November 2008 in relation to the discloseable transaction regarding advance to WYT; and
(o) the circular issued by the Company dated 4 December 2008 in relation to the discloseable transaction regarding advance to LeRoi.

– VI-10 –

NOTICE OF THE SGM

==> picture [88 x 66] intentionally omitted <==

WANG ON GROUP LIMITED 宏安集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1222)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Wang On Group Limited 宏安集團有限公司[] (the “ Company* ”) will be held at 11/F., Two Exchange Square, Central, Hong Kong on Monday, 23 March 2009 at 4:00 p.m. for the purpose of considering and, if thought fit, passing, with or without modification, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“(1) THAT :
- (a) the conditional sale and purchase agreement dated 12 February 2009 (the “ Disposal Agreement ”) entered into between Active Day Investments Limited 興日投資有限公司 (“ Active Day ”) and Super Treasure Holdings Limited 至寳控股有限公司 (“ Super Treasure ”) (a copy of which is tabled at this meeting and marked “Exhibit A” and initialled by the chairman of this meeting for the purpose of identification) and more particularly described in the circular of the Company date 6 March 2009, pursuant to which Active Day has conditionally agreed to dispose of and Super Treasure has conditionally agreed to purchase one (1) share of US1.00 each in the share capital of Shiney Day Investments Limited (“ Shiney Day ”), representing the entire issued share capital of Shiney Day, for a cash consideration of approximately HK$150 million, and all transactions contemplated thereunder be and are hereby approved, ratified and confirmed;
- (b) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute all such documents, instruments, agreements and deeds and do all such acts, matters and things as he/she may in his/her absolute discretion consider necessary or desirable for the purpose of and in connection with the implementation of the Disposal Agreement and the transactions contemplated thereunder and to agree to such variations of the terms of the Disposal Agreement as he/she may in his/her absolute discretion consider necessary or desirable; and
- (c) any one director of Active Day be and is hereby authorised for and on behalf of Active Day to execute all such documents, instruments, agreements and deeds and do all such acts, matters and things as he/she may in his/her absolute
For identification purpose only

– SGM-1 –

NOTICE OF THE SGM

discretion consider necessary or desirable for the purpose of and in connection with the implementation of the Disposal Agreement and the transactions contemplated thereunder and to agree to such variations of the terms of the Disposal Agreement as he/she may in his/her absolute discretion consider necessary or desirable.”

“(2) THAT :
(a) the conditional sale and purchase agreement dated 13 February 2009 (the “ Acquisition Agreement ”) entered into between Loyal Fame International Limited 忠譽國際有限公司 (“ Loyal Fame ”) and Wang On Enterprises (BVI) Limited (“ Wang On Enterprises ”) (a copy of which is tabled at this meeting and marked “Exhibit B” and initialled by the chairman of this meeting for the purpose of identification) and more particularly described in the circular of the Company dated 6 March 2009, pursuant to which Loyal Fame has conditionally agreed to dispose of and Wang On Enterprises has conditionally agreed to purchase one (1) share of US1.00 each in the share capital of Everlong Limited (“ Everlong ”), representing the entire issued share capital of Everlong, and the shareholder loan of approximately HK$81.9 million advanced by Loyal Fame to Everlong, for a cash consideration of approximately HK$63.4 million, and all transactions contemplated thereunder be and are hereby approved, ratified and confirmed;
(b) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute all such documents, instruments, agreements and deeds and do all such acts, matters and things as he/she may in his/her absolute discretion consider necessary or desirable for the purpose of and in connection with the implementation of the Acquisition Agreement and the transactions contemplated thereunder and to agree to such variations of the terms of the Acquisition Agreement as he/she may in his/her absolute discretion consider necessary or desirable; and
(c) any one director of Wang On Enterprises be and is hereby authorised for and on behalf of Wang On Enterprises to execute all such documents, instruments, agreements and deeds and do all such acts, matters and things as he/she may in his/her absolute discretion consider necessary or desirable for the purpose of and in connection with the implementation of the Acquisition Agreement and the transactions contemplated thereunder and to agree to such variations of the terms of the Acquisition Agreement as he/she may in his/her absolute discretion consider necessary or desirable.”

By Order of the Board Wang On Group Limited 宏安集團有限公司[] Mak Yuen Ming, Anita* Company Secretary

Hong Kong, 6 March 2009

For identification purpose only

– SGM-2 –

NOTICE OF THE SGM

Registered office: Head office and principal place of business: Clarendon House 5/F., Wai Yuen Tong Medicine Building 2 Church Street 9 Wang Kwong Road Hamilton HM 11 Kowloon Bay Bermuda Kowloon Hong Kong

Notes:

(1) A shareholder of the Company entitled to attend and vote at the special general meeting convened by the above notice or any adjournment thereof (as the case may be) may appoint one or more than one proxy to attend and to vote in his/her stead. A proxy needs not be a member of the Company.
(2) The instrument appointing a proxy shall be in writing under the hand of the appointer or an attorney duly authorised in writing. If the appointer is a corporation, the form of proxy must be under its common seal or under the hand of an officer, attorney or other person authorised to sign the proxy.
(3) In order to be valid, a form of proxy, together with any power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, must be deposited at the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited, 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as practicable and in any event not less than 48 hours before the time for holding of the special general meeting or any adjournment thereof (as the case may be).
(4) Completion and delivery of the form of proxy will not preclude shareholders of the Company from attending and voting in person at the special general meeting or any adjournment thereof (as the case may be) and in such event, the form of proxy will be deemed to be revoked.
(5) Resolutions numbered 1 and 2 will be voted by way of a poll by the shareholders of the Company.

– SGM-3 –

AI assistant

Wang On Group Limited — Proxy Solicitation & Information Statement 2009

49778_rns_2009-03-05_6e4c8ecc-c924-475e-8e29-244b04c06431.pdf

WANG ON GROUP LIMITED 宏安集團有限公司[*]

MAJOR TRANSACTIONS

Financial adviser to the Company

CIMB-GK Securities (HK) Limited

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

WANG ON GROUP LIMITED 宏安集團有限公司[*]

MAJOR TRANSACTIONS

DISPOSAL OF 100% INTEREST IN SHINEY DAY INVESTMENTS LIMITED, ACQUISITION OF 100% INTEREST IN EVERLONG LIMITED AND THE SALE LOAN AND PROVISION OF FINANCIAL ASSISTANCE

INTRODUCTION

LETTER FROM THE BOARD

THE DISPOSAL AGREEMENT

1. Date

2. Parties

3. Subject assets

4. Consideration

5. Conditions precedent

THE FINANCIAL ASSISTANCE

THE ACQUISITION AGREEMENT

1. Date

2. Parties

3. Subject assets

4. Consideration

5. Conditions precedent

INFORMATION ON THE SHINEY DAY GROUP

Shiney Day

Century Choice and Fully Wealth

Yulin Hong-Jin

Xuzhou Yuan Yang

INFORMATION ON THE EVERLONG GROUP

REASONS FOR AND BENEFITS OF THE DISPOSAL, THE ACQUISITION AND THE FINANCIAL ASSISTANCE

The Disposal

The Acquisition

The Financial Assistance

FINANCIAL EFFECTS ON THE GROUP

The Disposal

The Acquisition

The Financial Assistance

VALUATION OF THE INVESTMENT PROPERTIES

IMPLICATION UNDER THE LISTING RULES

THE SGM

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL SUMMARY

Results

2. AUDITED FINANCIAL STATEMENTS OF THE GROUP FOR THE TWO YEARS ENDED 31 MARCH 2008

Consolidated Income Statement

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Balance Sheet

NOTES TO FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

2.1 BASIS OF PREPARATION

Basis of consolidation

2.2 IMPACT OF NEW AND REVISED HKFRSs

(a) HKFRS 7 Financial Instruments: Disclosures

(b) Amendment to HKAS 1 Presentation of Financial Statements – Capital Disclosures

(c) HK(IFRIC)-Int 8 Scope of HKFRS 2

(d) HK(IFRIC)-Int 9 Reassessment of Embedded Derivatives

(e) HK(IFRIC)-Int 10 Interim Financial Reporting and Impairment

(f) HK(IFRIC)-Int 11 HKFRS 2 – Group and Treasury Share Transactions

2.3 IMPACT OF ISSUED BUT NOT YET EFFECTIVE HKFRSs

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Subsidiaries

Joint ventures

Jointly-controlled entities

Associates

Goodwill

Goodwill previously eliminated against consolidated reserves

Excess over the cost of business combinations

Impairment of non-financial assets other than goodwill

Intangible assets (other than goodwill)

Marketplace operating right

Related parties

Wang On Group Limited Proxy Solicitation & Information Statement 2009

**WANG ON GROUP LIMITED 宏安集團有限公司[*]**

**WANG ON GROUP LIMITED 宏安集團有限公司[*]**