YNBY International Limited - Proxy Solicitation & Information Statement 2008

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all your shares in ABC Communications (Holdings) Limited, you should at once hand this circular and the accompanying proxy form to the purchaser or transferee or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sales were effected for transmission to the purchaser or transferee.

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

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(Incorporated in the Bermuda with limited liability)

(Stock Code: 30)

VERY SUBSTANTIAL DISPOSAL, CONNECTED TRANSACTION AND SPECIAL DEAL – DISPOSAL OF ABC GLOBAL LIMITED

Independent Financial Adviser to the Independent Board Committee and Independent Shareholders

A notice convening the SGM to be held at Peking Room, The American Club Hong Kong, 48th Floor, Exchange Square Two, 8 Connaught Place, Central, Hong Kong on 11 August 2008 at 10:00 a.m. is set out on pages 128 to 130 of this circular. A form of proxy for use at the SGM is enclosed with this circular.

Whether or not you intend to attend the SGM or any adjourned meeting in person, you are requested to complete and sign the accompanying form of proxy, in accordance with the instructions printed thereon and deposit the same at the offices of the Company’s share registrar, Computershare Hong Kong Investor Services Limited, Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. 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 should you so wish.

18 July 2008

EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iii
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER	FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
1.	INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
2.	SHARE PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
3.	DISPOSAL AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
4.	SPECIAL DIVIDEND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
5.	CAPITAL REORGANISATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
6.	THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
7.	REASONS FOR AND BENEFITS OF THE TRANSACTIONS. . . . . . . . . . .	17
8.	COMPLIANCE WITH RULES 13.24 AND 14.82. . . . . . . . . . . . . . . . . . . . .	18
9.	INFORMATION ON THE OFFEROR . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
10.	INTENTION OF THE OFFEROR REGARDING
	THE REMAINING GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
11.	FINANCIAL EFFECTS OF THE DISPOSAL AGREEMENT . . . . . . . . . . . .	19
12.	MANAGEMENT DISCUSSION AND ANALYSIS
	ON THE REMAINING GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
13.	PROPOSED CHANGE OF BOARD COMPOSITION
	OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
14.	LISTING RULES AND TAKEOVERS CODE IMPLICATIONS . . . . . . . . . .	24
15.	CORPORATE STRUCTURE AND SHAREHOLDING
	OF THE COMPANY BEFORE AND AFTER COMPLETION. . . . . . . . . .	26
16.	INFORMATION ON THE GROUP, THE ABC GLOBAL GROUP,
	THE CHOUDARY GROUP, HCBC COMMUNICATIONS,
	HCBC ENTERPRISES, HCBC BVI AND GODDARD . . . . . . . . . . . . . . .	28
17.	INDEPENDENT BOARD COMMITTEE AND
	INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . . . . . . . . . . .	30
18.	SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31
19.	RIGHT FOR DEMANDING A POLL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31
20.	GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
LETTER	FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . .	33
LETTER	FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . . .	34

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TABLE OF CONTENTS

APPENDIX I	–	ACCOUNTANT’S REPORT OF THE GROUP . . . . . . . . . . . .	49
APPENDIX II	–	UNAUDITED PRO FORMA FINANCIAL
		INFORMATION OF THE REMAINING GROUP . . . . . . . .	112
APPENDIX III	–	ADDITIONAL FINANCIAL INFORMATION
		OF THE GROUP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	121
APPENDIX IV	–	GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . .	122
NOTICE OF SGM		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	128

– ii –

EXPECTED TIMETABLE

If the conditions applicable to the Transactions are all fulfilled, the expected timetable for the relevant events shall be as follows:

2008 (Note 1)

Last day of dealings in the Shares cum-entitlement
to the Special Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 4 August
First day of dealings in the Shares ex-entitlement
to the Special Dividend (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 5 August
Latest time for lodging transfer of Shares in order
to be entitled to the Special Dividend . . . . . . . . . . . . 4:30 p.m. on Wednesday, 6 August
Latest time for lodging transfer of Shares to qualify
for attending and voting at the SGM . . . . . . . . . . . . . 4:30 p.m. on Wednesday, 6 August
Register of members closed . . . . . . . . . . . . . . . Thursday, 7 August to Monday, 11 August
Latest time for lodging the form of proxy for the SGM . 10:00 a.m. on Saturday, 9 August
Record date for determining the entitlements
to the Special Dividend for Shareholders . . . . . . . . . . . . . . . . . . . . . Monday, 11 August
Record date for determining the eligibility
to attend and vote at the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 11 August
SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Monday, 11 August
Announcement of results of the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 11 August
Effective date for Capital Reorganisation . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 12 August
First day for free exchange of existing share certificates
for new share certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 12 August
Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 20 August
Expected date of dispatch of the cash cheque
for the Special Dividend to the Shareholders . . . . . . . . . . . . . . . . Monday, 1 September
Last day for free exchange of existing share certificates
for new share certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 23 September

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EXPECTED TIMETABLE

Notes:

Dates and deadlines stated in this circular for events in the timetable are indicative only and may be extended or varied. Any changes to the anticipated timetable will be announced as appropriate. All times and dates refer to Hong Kong local time.
The distribution of the Special Dividend is conditional upon completion of the Disposal, which in turn is conditional upon the fulfillment of certain conditions including the passing of the relevant resolution by the Independent Shareholders at the SGM. Shareholders and investors should note that, based on the expected timetable, the Shares will be dealt in on an ex-entitlement basis commencing from Tuesday, 5 August 2008 and that dealing in Shares will take place even though the conditions to the Disposal remain unfulfilled. Any Shareholder or investor dealing in the Shares between the ex-entitlement date and the Completion Date (which is expected to be on Wednesday, 20 August 2008) will accordingly bear the risk that Completion may not proceed and that the Special Dividend is not distributed.

– iv –

DEFINITIONS

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

“ABC Global”

ABC Global Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company

“ABC Global Group” ABC Global and its direct and indirect subsidiaries after the Restructuring
“Abstaining Shareholders”
Shareholders who are required to abstain from voting pursuant to the requirements under the Takeovers Code and/or the Listing Rules in respect of the Disposal, including HCBC Enterprises, HCBC Communications, Mr. George Ho, Mr. George Joseph Ho, Mr. Michael Tse Chi Hung, Mr. Leung Kwok Kit and their respective associates (including Ms. Joyce Leung and Ms. Jacqueline Leung)
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Board”
the board of Directors
“Business Day”
a day (other than Saturday or days on which a typhoon signal 8 or above or black rainstorm is hoisted in Hong Kong at 10:00 a.m.) on which banks in Hong Kong are open for general banking business
“Capital Reorganisation”
the reduction of the share capital, the subdivision of the authorised but unissued Shares and the reduction of the share premium account of the Company as described in paragraph 5 of the Letter from the Board of this circular
“Choudary”
Choudary Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company
“Choudary Group” Choudary and its direct and indirect subsidiaries
“Company”
ABC Communications (Holdings) Limited, a company incorporated in Bermuda and the shares of which are listed on the Stock Exchange (Stock code: 30)
“Completion”

completion of the Transactions

“Completion Date”

the date of Completion

– 1 –

DEFINITIONS

“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Continuing Business” the financial quotation and securities trading system licensing and wireless application businesses of the Group, which are undertaken by the Choudary Group
“Directors” directors of the Company
“Discontinued Business” the investment holding arm of the Group which will be held by ABC Global upon completion of the Restructuring
“Disposal” the Disposal Agreement and the transactions contemplated thereunder
“Disposal Agreement” the sale and purchase agreement dated 2 May 2008 entered into between the Company and HCBC Enterprises in relation to the disposal of the entire issued share capital of ABC Global
“Executive” the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
“Goddard” Goddard and Company, Limited, a company incorporated in Hong Kong with limited liability and the shareholding of which is described in paragraph 16.6 of the Letter from the Board of this circular
“Group” the Company and its subsidiaries
“HCBC BVI”
H.C.B.C. Enterprises (B.V.I.) Limited, a company incorporated in the British Virgin Islands with limited liability and the shareholding of which is described in paragraph 16.5 of the Letter from the Board of this circular
“HCBC Communications” HCBC Communications (International) Limited, a company incorporated in the British Virgin Islands with limited liability and the shareholding of which is described in paragraph 16.3 of the Letter from the Board of this circular
“HCBC Enterprises” H.C.B.C. Enterprises Limited, a company incorporated in Hong Kong with limited liability and the shareholding of which is described in paragraph 16.4 of the Letter from the Board of this circular

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DEFINITIONS

“HK$” Hong Kong Dollars, the lawful currency of Hong Kong “Hong Kong” Hong Kong Special Administrative Region of the PRC
“Independent Board Committee”
an independent committee of the Board comprising all the independent non-executive Directors, namely Mr. Adrian Fu Hau Chak, Mr. Aubrey Li Kwok Sing and Mr. Lester Kwok Chi Hang, constituted by the Company to consider the Disposal
“Independent Financial Adviser”
Altus Capital Limited, a licensed corporation to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO and is the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Disposal and the Offer
“Independent Shareholders”
Shareholders other than the Abstaining Shareholders
“Independent Third Parties”
independent third parties not being connected persons of the Company nor their associates
“Interim Valuation”
the aggregate unaudited net book value of the assets to be sold under the Disposal Agreement as at 30 September 2007 in the amount of approximately HK$259,900,000
“Joint Announcement”
the announcement dated 30 May 2008 jointly made by the Company, the Offeror and HCBC Communications in relation to, inter alia, the Share Purchase Agreement, the Disposal Agreement and the Offer

“JPY”

Japanese Yen, the lawful currency of Japan
“Latest Practicable Date”
15 July 2008, being the latest practicable date for ascertaining certain information referred to in this circular prior to the printing of this circular
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“Minimum Cash Warranty”
the warranty given by HCBC Communications to the Offeror under the Share Purchase Agreement that at Completion, the Company shall have (a) cash to satisfy the Special Dividend, being in the amount of not less than HK$273,868,476; and (b) cash as working capital of the Company (not on a consolidated basis) in an amount of not less than HK$7,000,000

– 3 –

DEFINITIONS

“Mr. Lin”
Mr. Lin Qun, a director of the Offeror and is beneficially interested in 15% of the issued share capital of the Offeror
“Mr. Sze”
Mr. Sze Chun Ning Vincent, a director of the Offeror and is beneficially interested in 85% of the issued share capital of the Offeror
“Offer”
the possible unconditional mandatory cash offer to be made by Partners Capital and President Securities on behalf of the Offeror for all the Offer Shares in accordance with the Takeovers Code
“Offer Price” HK$0.3992 per Share
“Offer Shares”
Shares not already beneficially owned or agreed to be acquired by the Offeror or parties acting in concert with it

“Offeror”

Asian Gold Dragon Limited, a company incorporated in the British Virgin Islands with limited liability
“parties acting in concert”
has the meaning ascribed thereto in the Takeovers Code
“Partners Capital”
Partners Capital International Limited, a licensed corporation to carry on type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO and is one of the joint financial advisers to the Offeror in respect of the Offer

“PRC”

The People’s Republic of China
“President Securities”
President Securities (Hong Kong) Ltd., a licensed corporation to carry on type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (assets management) regulated activities under the SFO and is one of the joint financial advisers to the Offeror in respect of the Offer
“QuickSilver” ABC QuickSilver Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of QuotePower
“QuotePower”
QuotePower International Limited, a company incorporated in Hong Kong with limited liability and a 99.95% owned subsidiary of Choudary

– 4 –

DEFINITIONS

“Remaining Group” the Group excluding the ABC Global Group which will be disposed of by the Company if the Disposal Agreement is completed “Restructuring” the restructuring which takes place before Completion, as described in paragraph 3.4 of the Letter from the Board of this circular “Sale Shares” 245,523,600 Shares beneficially owned by HCBC Communications, representing approximately 52.59% of the issued share capital of the Company as at the date of the Share Purchase Agreement “SFC” Hong Kong Securities and Futures Commission “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SGM” the special general meeting of the Shareholders to be convened by the Company to consider and approve, the Disposal, the Capital Reorganisation and the Special Dividend “Share(s)” existing ordinary share(s) of HK$0.10 each in the issued share capital of the Company “Shareholder(s)” holder(s) of the Share(s) “Share Purchase Agreement” the conditional sale and purchase agreement dated 2 May 2008 entered into between HCBC Communications, HCBC Enterprises and the Offeror relating to the sale and purchase of the Sale Shares “Special Dividend” the special dividend payable as described in paragraph 4 of the Letter from the Board of this circular “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” the Hong Kong Code on Takeovers and Mergers “Total Benefit” the aggregate amount of approximately HK$0.9858 per Share receivable by a Shareholder under the Offer and the Special Dividend, if the Transactions are completed and the Shareholder accepts the Offer “Transactions” the Share Purchase Agreement and the Disposal Agreement and all transactions contemplated thereunder “US$” United States Dollars, the lawful currency of the United States of America

– 5 –

LETTER FROM THE BOARD

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 30)

Executive Directors: Mr. George Joseph Ho Mr. Joey Fan Ms. Patricia Yeung Shuk Kwan

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Non-executive Directors:

Mr. Michael Tse Chi Hung (Non-executive Chairman) Mr. George Ho Mr. Leung Kwok Kit

Independent Non-executive Directors: Mr. Adrian Fu Hau Chak Mr. Aubrey Li Kwok Sing Mr. Lester Kwok Chi Hang

Head office and principal place of business: 2nd Floor Jade Mansion 40 Waterloo Road Yaumatei, Kowloon Hong Kong 18 July 2008

To the Shareholders and the holders of Options,

VERY SUBSTANTIAL DISPOSAL, CONNECTED TRANSACTION AND SPECIAL DEAL – DISPOSAL OF ABC GLOBAL LIMITED

1. INTRODUCTION

Reference is made to the joint announcement made by the Company, HCBC Communications and the Offeror on 30 May 2008.

On 2 May 2008, the Offeror entered into the Share Purchase Agreement with HCBC Communications pursuant to which the Offeror conditionally agreed to acquire, and HCBC Communications conditionally agreed to dispose of, the Sale Shares representing approximately 52.59% of the total issued share capital of the Company at an aggregate cash consideration of HK$98,014,865, which is equivalent to approximately HK$0.3992 per Sale Share.

On 2 May 2008, the Company also entered into the Disposal Agreement to dispose of the entire issued share capital of ABC Global to HCBC Enterprises at an aggregate cash consideration of HK$252,300,000 (subject to adjustment). Completion of the Share Purchase Agreement shall take place simultaneously with completion of the Disposal Agreement. Subject to completion of the Disposal Agreement, the Company will apply the proceeds under the Disposal Agreement and surplus cash of the Company for the Special Dividend to

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LETTER FROM THE BOARD

be made to all Shareholders (including HCBC Communications) whose names appear on the register of members of the Company on the date of the SGM. The Special Dividend amounts to HK$273,868,476, which is equivalent to approximately HK$0.5866 per Share.

The purpose of this circular is to provide you with further information regarding the Transactions and to give you notice of the SGM at which the Disposal, the Capital Reorganisation and the Special Dividend will be considered, and if thought fit, approved.

Under Rule 26.1 of the Takeovers Code, once the Share Purchase Agreement is completed, the Offeror will be required to make an unconditional mandatory cash offer for all the then issued Shares not already beneficially owned or agreed to be acquired by the Offeror and parties acting in concert with it. Accordingly, subject to Completion, Partners Capital and President Securities, on behalf of the Offeror, will make the Offer to acquire all the issued Shares not already beneficially owned or agreed to be acquired by the Offeror and parties acting in concert with it on the basis of HK$0.3992 per Share in cash. Details of the terms of the Offer will be included in the composite offer and response document to be dispatched to Shareholders.

Shareholders whose names appear on the register of members of the Company on the date of the SGM are entitled to the Special Dividend whether they accept the Offer or not during the offer period. If Completion proceeds, HCBC Communications will receive an aggregate of approximately HK$0.9858 per Share (before expenses) from the sale proceeds of the Sale Shares and the Special Dividend. Similarly, other Shareholders will receive a Total Benefit of approximately HK$0.9858 per Share from the Special Dividend and the Offer if the Transactions are completed and they accept the Offer.

2. SHARE PURCHASE AGREEMENT

2.1 Date

2 May 2008

2.2 Parties

Vendor: HCBC Communications Guarantor: HCBC Enterprises Purchaser: Offeror

HCBC Enterprises has agreed to guarantee the performance by HCBC Communications of certain provisions of the Share Purchase Agreement.

To the best of the knowledge, information and belief of the Directors after having made reasonable enquiries, each of the Offeror and its ultimate beneficial owners (Mr. Sze and Mr. Lin) is an Independent Third Party and is not acting in concert with any of the Abstaining Shareholders.

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LETTER FROM THE BOARD

2.3 Subject matter

The Offeror has agreed to acquire the Sale Shares, representing approximately 52.59% of the total issued share capital of the Company.

The rights to the Special Dividend shall belong to HCBC Communications. At Completion, the Sale Shares will be transferred by HCBC Communications to the Offeror on an ex-dividend basis.

2.4 Consideration

The aggregate cash consideration for the acquisition of the Sale Shares amounts to HK$98,014,865, which is equivalent to approximately HK$0.3992 per Sale Share.

Upon the signing of the Share Purchase Agreement, a deposit of HK$20,000,000 (the “ Deposit ”) was paid by the Offeror to the escrow agent. On Completion, the Deposit will be released by the escrow agent and the balance of consideration in the amount of HK$78,014,865 will be paid by the Offeror to HCBC Communications or as it may direct.

If the Share Purchase Agreement is terminated due to the breach or default of HCBC Communications, the Deposit shall be refunded (with interest) and HCBC Communications shall pay a further sum of HK$10,000,000 to the Offeror as liquidated damages. If the Share Purchase Agreement is terminated due to no breach or default of any party thereto, HCBC Communications is entitled to deduct from the Deposit a sum of HK$1,500,000 as liquidated damages and refund the balance of the Deposit (with interest) to the Offeror. If the Share Purchase Agreement is terminated due to the breach or default of the Offeror, HCBC Communications is entitled to forfeit the Deposit in full.

The consideration for the acquisition of the Sale Shares was arrived at after arm’s length negotiations between HCBC Communications and the Offeror, having taken into account the market performance of the Shares prior to suspension of trading in the Shares on 2 May 2008 and the Special Dividend to be made subject to completion of the Disposal Agreement.

2.5 Conditions precedent

Completion of the Share Purchase Agreement is conditional upon:

(a) the Executive granting a “special deal” consent under Rule 25 of the Takeovers Code in respect of the Disposal, and any conditions attaching to such consent being fulfilled;
(b) the passing of all necessary resolutions by the Shareholders (other than such Shareholders who are required to abstain from voting pursuant to the requirements under the Takeovers Code and/or the Listing Rules) at the general meeting of the Company by way of a poll (if required) to approve the Disposal;

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LETTER FROM THE BOARD

(c) the listing status of the Company on the Stock Exchange not being revoked or withdrawn at any time prior to Completion, and there being no indication from the Stock Exchange or the Executive that the listing status of the Company will be suspended, cancelled, revoked or withdrawn at any time after Completion as a result of the Transactions (other than any suspension pending the restoration of the minimum public float of the Company);
(d) the Disposal Agreement having become unconditional in accordance with the terms thereof;
(e) the warranties set out in the Share Purchase Agreement remaining true and accurate and not misleading in all material respects; and
(f) all requisite consents, authorizations, approvals and waivers in connection with the entering into and performance of the terms of the Share Purchase Agreement having been obtained by each party thereto.

The Offeror may waive any of the conditions above other than those set out in paragraphs (a) and (b) above.

If any of the above conditions are not fulfilled or waived on or before 31 August 2008 (or such later date as the parties may agree), the Share Purchase Agreement shall forthwith terminate and the parties shall be released from all obligations under the Share Purchase Agreement, save for the obligations in connection with the liquidated damages as stipulated in the Share Purchase Agreement and any liabilities for antecedent breaches of the Share Purchase Agreement.

As at the Latest Practicable Date, none of the above conditions has been fulfilled or waived.

2.6 Completion

Completion shall take place within seven Business Days (or such other date as the parties may agree) after the day when all the conditions to the Share Purchase Agreement are satisfied or waived. Completion of the Share Purchase Agreement shall take place simultaneously with completion of the Disposal Agreement.

Under Rule 26.1 of the Takeovers Code, once the Share Purchase Agreement is completed, the Offeror will be required to make the Offer on the basis of HK$0.3992 per Share in cash. Details of terms of the Offer will be included in the composite offer and response document to be dispatched to Shareholders.

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LETTER FROM THE BOARD

2.7 Warranties as to remaining cash and adjustment to consideration under the Disposal Agreement

HCBC Communications has given the Minimum Cash Warranty to the Offeror that at Completion, the Company shall have (a) cash to satisfy the Special Dividend, being in the amount of not less than HK$273,868,476; and (b) cash as working capital of the Company (not on a consolidated basis) in an amount of not less than HK$7,000,000. At Completion, if the cash position of the Company does not meet the Minimum Cash Warranty, HCBC Enterprises will increase the consideration under the Disposal Agreement to ensure that the Minimum Cash Warranty is satisfied in full.

3. DISPOSAL AGREEMENT

3.1 Date

2 May 2008

3.2 Parties

Vendor: The Company Purchaser: HCBC Enterprises

3.3 Subject matter

HCBC Enterprises has agreed to acquire and the Company has agreed to dispose of, the entire issued share capital of ABC Global. ABC Global, a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of the Company, is principally engaged in the business of investment holding.

3.4 Restructuring

The businesses of the Group can be divided into two categories:

(a) The Continuing Business

The Continuing Business consists of (i) the financial quotation and securities trading system licensing business, which is undertaken by QuotePower; and (ii) the wireless application business, which is undertaken by QuickSilver.

Choudary owns 99.95% of the issued shares of QuotePower, which in turn owns the entire issued share capital of QuickSilver. Therefore, Choudary is the holding company of all the Continuing Business. The Choudary Group holds all the assets which are required for the ongoing operation of the Continuing Business, which principally consist of computers, servers and networking equipment.

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LETTER FROM THE BOARD

(b) The Discontinued Business

The Discontinued Business is the investment holding arm of the Group which holds the non-operating corporate assets and liabilities of the Group.

The Company will undertake a restructuring prior to completion of the Disposal Agreement. Upon completion of the Restructuring:

(a) ABC Global will be the holding company of all the Discontinued Business. In addition, ABC Global will own a 49% minority interest in Choudary.
(b) The Company will own a 51% direct interest in Choudary.

As at the Latest Practicable Date, the Discontinued Business principally consists of the following non-operating assets:

(a) 17,901 ordinary shares of eAccess Limited representing approximately 1.23% of its issued share capital – eAccess Limited is a broadband internet service provider whose ordinary shares are listed on the Tokyo Stock Exchange;
(b) unlisted securities in eMobile Limited representing approximately 0.47% of its issued share capital – eMobile Limited is 37.6% owned by eAccess Limited and is licensed to operate a new mobile network in Japan;
(c) investment in the Argo II Funds representing 1.89% of its total capital – Argo II Funds invest in the Internet and mobile telecommunications industries; and
(d) two office properties situated on the 1st and 2nd Floor of Jade Mansion, 40 Waterloo Road, Yaumatei, Kowloon, Hong Kong – the 2nd Floor is currently used as the Company’s office and the 1st Floor is currently held for rental purpose.

During the Restructuring, inter-company accounts of the Group will be waived, settled or capitalized as appropriate. Following completion of the Restructuring and the Disposal, the ABC Global Group and the Choudary Group will not have any inter-company account with the Company.

3.5 Consideration

On the Completion Date, HCBC Enterprises will pay the entire sum of HK$252,300,000 in cash to the Company as consideration for the entire issued share capital of ABC Global.

The unaudited net book value of the Discontinued Business as at 30 September 2007 amounted to HK$257,440,427 and the unaudited net book value of 49% of the Continuing Business as at 30 September 2007 amounted to HK$2,481,993. Therefore, the Interim Valuation (that is, the aggregate unaudited net book value of the assets to be sold under the

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Disposal Agreement as at 30 September 2007) amounted to approximately HK$259,900,000. The consideration under the Disposal Agreement was fixed at a discount of approximately HK$7,600,000 to the Interim Valuation of the relevant assets.

Under the Share Purchase Agreement, HCBC Communications has given the Minimum Cash Warranty. At Completion, if the cash position of the Company does not meet the Minimum Cash Warranty, HCBC Enterprises will increase the consideration under the Disposal Agreement to ensure that the Minimum Cash Warranty is satisfied in full.

To allow for maximum certainty for Shareholders to assess the merits of the Transactions, the Company has decided that the amount of the Special Dividend should be a fixed amount rather than an indicative range which may vary between signing and Completion. The cash position of the Company immediately before Completion, however, cannot be predicted with accuracy at present since the Company may need to settle outgoings and expenses during the ordinary course of business between signing and Completion. HCBC Enterprises has agreed, if necessary, to increase the consideration under the Disposal Agreement to ensure that the Company has sufficient sale proceeds to fund the payment of the Special Dividend in full, while retaining cash of HK$7,000,000 as working capital for the Company at Completion at the same time.

Accordingly, HCBC Enterprises is absorbing all risks underlying the Transactions which may result from, inter alia, any outgoings and expenses actually paid by the Company between signing and Completion, any fluctuation in the market value of the listed securities and any fluctuation in the exchange rates of the foreign currencies in which the assets and liabilities are denominated. On that basis, the consideration under the Disposal Agreement was fixed at a discount of approximately HK$7,600,000 to the Interim Valuation of the relevant assets to reflect the transaction risks mentioned above and the lack of liquidity of the relevant assets.

3.6 Conditions precedent

Completion of the Disposal Agreement is conditional upon:

(a) the Executive granting a “special deal” consent under Rule 25 of the Takeovers Code in respect of the Disposal, and any conditions attaching to such consent being fulfilled;
(b) the passing of all necessary resolutions by the Shareholders (other than such Shareholders who are required to abstain from voting pursuant to the requirements under the Takeovers Code and/or the Listing Rules) at the general meeting of the Company by way of a poll (if required) to approve the Disposal;
(c) the Share Purchase Agreement having become unconditional in accordance with the terms thereof; and
(d) completion of the Restructuring.

HCBC Enterprises may waive the condition set out in paragraph (d) above.

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If any of the above conditions are not fulfilled or waived on or before 31 August 2008 (or such later date as the parties may agree), the Disposal Agreement shall forthwith terminate and the parties shall be released from all obligations under the Disposal Agreement, save for liabilities for any antecedent breaches of the Disposal Agreement.

As at the Latest Practicable Date, none of the above conditions has been fulfilled or waived.

3.7 Completion

Completion of the Disposal Agreement shall take place simultaneously with completion of the Share Purchase Agreement.

4. SPECIAL DIVIDEND

Subject to completion of the Disposal, the Company will apply the sale proceeds under the Disposal and surplus cash of the Company for the Special Dividend to be made to all Shareholders (including HCBC Communications) whose names appear on the register of members of the Company on the date of the SGM. The Special Dividend amounts to HK$273,868,476, which is equivalent to approximately HK$0.5866 per Share.

To comply with the bye-laws of the Company, the Board will seek the approval of the Shareholders, by way of an ordinary resolution, at the SGM in respect of the Special Dividend. The Abstaining Shareholders do not have a material interest in the Special Dividend which is different from the Independent Shareholders. The Abstaining Shareholders will not be required to abstain from voting in respect of the ordinary resolution approving the Special Dividend.

The distribution of the Special Dividend is conditional upon completion of the Disposal, which in turn is conditional upon the fulfillment of certain conditions including the passing of the relevant resolution by the Independent Shareholders at the SGM. Shareholders and investors should note that, based on the expected timetable, the Shares will be dealt in on an ex-entitlement basis commencing from Tuesday, 5 August 2008 and that dealing in Shares will take place even though the conditions to the Disposal remain unfulfilled. Any Shareholder or investor dealing in the Shares between the ex-entitlement date and the Completion Date (which is expected to be on Wednesday, 20 August 2008) will accordingly bear the risk that Completion may not proceed and that the Special Dividend is not distributed.

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5. CAPITAL REORGANISATION

To facilitate the distribution of the Special Dividend, the Board will also seek the approval of the Shareholders at the SGM in respect of the Capital Reorganisation, which will involve:

(a) the reduction of the nominal value of each issued Share from HK$0.10 to HK$0.01 by the cancellation of HK$0.09 from the paid-up capital on each issued Share and to transfer the credit arising therefrom to the contributed surplus account of the Company;
(b) the authorised but unissued share capital of the Company be sub-divided by sub-dividing each of the authorised but unissued Shares of HK$0.10 each in the capital of the Company into 10 new shares of HK$0.01 each in the capital of the Company; and
(c) the reduction of the share premium account of the Company (in the amount of HK$76,470,297 as at 31 March 2008) to zero and to transfer the credit arising therefrom to the contributed surplus account of the Company.

The Capital Reorganisation is conditional upon:

(a) the passing of a special resolution by not less than three-fourths of the votes cast by Shareholders at the SGM;
(b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the new shares of HK$0.01 each of the Company; and
(c) compliance with Section 46 of the Bermuda Companies Act, including the publication of a notice of reduction of capital in an appointed newspaper in Bermuda and the filing of a memorandum of reduction of capital with the Registrar of Companies in Bermuda.

The Capital Reorganisation is not conditional upon Completion. The Abstaining Shareholders will not be required to abstain from voting in respect of the special resolution approving the Capital Reorganisation.

Subject to the satisfaction of the conditions above, the Capital Reorganisation will take effect from 9:30 a.m. (Hong Kong time) on the next Business Day following the date of the SGM. Subject to the satisfaction of the conditions above, the Capital Reorganisation and making of the Special Dividend will comply with Bermuda law in all respects.

Under the Bermuda Companies Act and the Company’s bye-laws, dividends can be paid out of (a) the retained profits of the Company; and (b) the contributed surplus of the Company subject to approval by shareholders of the Company and provided that the Company is, or would after the payment be, able to pay its liabilities as they become due, or the realisable value of its assets would not thereby become less than the aggregate of its liabilities and its issued share capital and share premium account. As at 31 March 2008, the

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amount distributable by the Company amounted to HK$87,905,038. Assuming that the Restructuring and the Disposal had taken place on 31 March 2008, the amount distributable by the Company would have amounted to HK$280,297,091.

6. THE OFFER

As at the Latest Practicable Date, the Offeror and parties acting in concert with it do not own any Shares. If the Transactions are completed, the Offeror and parties acting in concert with it will own an aggregate of 245,523,600 Shares, representing approximately 52.59% of the entire issued share capital of the Company. Under Rule 26.1 of the Takeovers Code, once the Share Purchase Agreement is completed, the Offeror will be required to make an unconditional mandatory cash offer for all the then issued Shares not already beneficially owned or agreed to be acquired by the Offeror and parties acting in concert with it. The Offer, if and when made, will be unconditional in all respects.

Subject to Completion, Partners Capital and President Securities, on behalf of the Offeror, will make the Offer to acquire all the issued Shares not already beneficially owned or agreed to be acquired by the Offeror and parties acting in concert with it on the basis of HK$0.3992 per Share in cash.

Shareholders whose names appear on the register of members of the Company on the date of the SGM are entitled to the Special Dividend whether they accept the Offer or not during the offer period. The Special Dividend amounts to HK$273,868,476, which is equivalent to approximately HK$0.5866 per Share. If Completion proceeds, HCBC Communications will receive an aggregate of approximately HK$0.9858 per Share (before expenses) from the sale proceeds of the Sale Shares and the Special Dividend. Similarly, other Shareholders will receive a Total Benefit of approximately HK$0.9858 per Share from the Special Dividend and the Offer if the Transactions are completed and they accept the Offer.

The Offer Price of HK$0.3992 per Share represents:

(a) a discount of approximately 51.32% to the closing price of HK$0.82 per Share as quoted on the Stock Exchange on 30 April 2008, being the last trading day prior to the suspension of trading of the Shares on 2 May 2008;
(b) a discount of approximately 43.93% to the average closing price of HK$0.712 per Share over the 5 trading days up to and including 30 April 2008;
(c) a discount of approximately 38.40% to the average closing price of HK$0.648 per Share over the 10 trading days up to and including 30 April 2008;
(d) a discount of approximately 31.53% to the average closing price of HK$0.583 per Share over the 30 trading days up to and including 30 April 2008;
(e) a discount of approximately 35.92% to the audited consolidated net asset value of HK$0.623 per Share as disclosed in the final results of the Company for the year ended 31 March 2008; and

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(f) a discount of approximately 58.42% to the closing price of HK$0.96 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

The Total Benefit of HK$0.9858 per Share receivable by Shareholders under the Offer and the Special Dividend represents:

(a) a premium of approximately 20.22% over the closing price of HK$0.82 per Share as quoted on the Stock Exchange on 30 April 2008, being the last trading day prior to the suspension of trading of the Shares on 2 May 2008;
(b) a premium of approximately 38.46% over the average closing price of HK$0.712 per Share over the 5 trading days up to and including 30 April 2008;
(c) a premium of approximately 52.13% over the average closing price of HK$0.648 per Share over the 10 trading days up to and including 30 April 2008;
(d) a premium of approximately 69.09% over the average closing price of HK$0.583 per Share over the 30 trading days up to and including 30 April 2008;
(e) a premium of approximately 58.23% over the audited consolidated net asset value of HK$0.623 per Share as disclosed in the final results of the Company for the year ended 31 March 2008; and
(f) a premium of approximately 2.08% over the closing price of HK$0.96 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

Pursuant to Rule 8.2 of the Takeovers Code, the offer document containing, amongst other things, the terms of the Offer, together with the form of acceptance and transfer, should normally be posted to the Shareholders within 21 days of the date of the announcement of the Offer. The Offeror and the Company intend to combine the offer document and the Company’s response document in a composite offer and response document. Such composite offer and response document in connection with the Offer is expected to be issued and dispatched by the Offeror and the Company jointly to the Shareholders in accordance with the timeframe required pursuant to the Takeovers Code. Pursuant to Note 2 to Rule 8.2 of the Takeovers Code, the Executive’s consent is required if the making of the Offer is subject to prior fulfillment of certain conditions precedent and the conditions precedent cannot be fulfilled within the time period contemplated by Rule 8.2 of the Takeovers Code. Upon application made by the Offeror, the Executive has given consent under Rule 8.2 of the Takeovers Code to extend the deadline for the dispatch of such composite offer and response document to a date falling seven days after the completion of the Share Purchase Agreement, or 27 August 2008, whichever is earlier.

Persons who are not resident in Hong Kong should inform themselves about and observe any applicable requirements in their own jurisdictions.

Shareholders and investors of the Company should note that the Share Purchase Agreement and the Disposal Agreement are conditional upon the fulfillment of certain conditions, and the Offer will only be made if the Share Purchase Agreement and the

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Disposal Agreement become unconditional and the Offeror’s acquisition of the Sale Shares is completed in accordance with the Share Purchase Agreement. As such, the Offer is a possibility only and may or may not proceed. Shareholders and investors of the Company are therefore advised to exercise caution in dealing in the securities of the Company.

7. REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The purposes of entering into the Disposal Agreement by the Company are to divest the Discontinued Business, which principally consists of non-operating investment holdings, and to focus its capital and management resources on the operating business of financial quotation and securities trading system licensing and wireless applications, and to return surplus cash to the Shareholders.

As a result of the strong stock market in Hong Kong in recent years, the turnover of the Continuing Business has been growing. With the current market position of QuotePower, the Company considers that there is reasonable potential for the Continuing Business to grow further through increasing its market share and possibly expanding its business into mainland China.

However, as at the Latest Practicable Date, the Continuing Business is still suffering from a low profit margin and if there is any significant downturn in the stock market, the earnings of the Continuing Business may be severely affected. Therefore, under the Disposal Agreement, the Company will divest 49% of the Continuing Business to HCBC Enterprises. The purposes of such disposal are to leverage on the extensive experience of the management of HCBC Enterprises in the provision of financial information services and to share the risks between the Company and HCBC Enterprises in the event of a market downturn.

The terms of the Disposal Agreement have been arrived at after arm’s length negotiations between HCBC Enterprises and the Company. In evaluating the reasonableness and fairness of the consideration under the Disposal Agreement, the Directors have taken into account many factors including (a) the sum of the unaudited net book value of the Discontinued Business as at 30 September 2007 (in the amount of HK$257,440,427) and the unaudited net book value of 49% of the Continuing Business as at 30 September 2007 (in the amount of HK$2,481,993), which amounts to approximately HK$259,900,000 in aggregate; (b) the latest market value of the underlying assets including the two office properties according to the Company’s market information; (c) the lack of liquidity of the relevant assets; and (d) the transaction risks assumed by HCBC Enterprises as mentioned in paragraph 3.5 of the Letter from the Board of this circular. Based on the above and after reviewing the advice from the Independent Financial Adviser as contained on pages 34 to 48 of this circular, the Directors (including the independent non-executive Directors believe that the transactions contemplated under the Disposal Agreement are on normal commercial terms, the terms of such transactions are fair and reasonable and the entering into of the Disposal Agreement is in the interests of the Company and the Shareholders as a whole.

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8. COMPLIANCE WITH RULES 13.24 AND 14.82

After Completion, the Company will have a sufficient level of operations and assets to warrant the continued listing of the Shares in compliance with Rule 13.24 of the Listing Rules. During the two years ended 31 March 2008, the Continuing Business accounted for all the operating revenue of the Company. After Completion, the revenue and profits of the Continuing Business will continue to be consolidated into the accounts of the Group.

Because of the nature of the Continuing Business, it does not need a substantial asset base to operate. All the fixed assets required for the ongoing operation of the Continuing Business are already owned by the Choudary Group, and will continue to be owned by the Choudary Group after Completion. The Choudary Group currently has sufficient cash to operate its business without recourse to the Company and in view of the net cash in-flow generated from QuotePower, the Company is satisfied that the Choudary Group will have sufficient cash to operate its business without recourse to the Company after Completion. Accordingly, the Company considers that it will have sufficient assets to maintain its operation after the completion of the Disposal Agreement.

After completion of the Disposal Agreement and the distribution of the Special Dividend, the Company’s remaining assets are expected to consist of only a 51% interest in the Choudary Group and general working capital in the amount of approximately HK$7,000,000. The Company is satisfied that its assets will not consist wholly or substantially of cash or short-dated securities and the Company should not be regarded as a “cash company” as defined in Rule 14.82 of the Listing Rules.

9. INFORMATION ON THE OFFEROR

The Offeror is an investment holding company incorporated in the British Virgin Islands with limited liability on 14 March 2008. As at the Latest Practicable Date, the Offeror was beneficially owned as to 85% by Mr. Sze and as to 15% by Mr. Lin. To the best of the knowledge, information and belief of the Directors after having made reasonable enquiries, each of the Offeror and its ultimate beneficial owners (Mr. Sze and Mr. Lin) is an Independent Third Party and is not acting in concert with any of the Abstaining Shareholders. Save for the entering into of the Share Purchase Agreement, the Offeror has not conducted any other business since its incorporation. The board of directors of the Offeror are Mr. Sze and Mr. Lin. Mr. Sze Chun Ning Vincent, aged 42, has extensive experience in project investment and development, international trading business, sales and marketing. Mr. Sze had worked for a well known toys manufacturing and trading company based in Hong Kong for over 13 years, and has extensive experience in product research and development, factory operations and management, and launch of new products. Mr. Sze is currently an executive director of China Water Industry Group Limited (Stock Code: 1129), a company whose shares are listed on the Main Board of the Stock Exchange.

Mr. Lin Qun, aged 44, holds a bachelor degree from the China Statistics Cadre College and a Master degree of Business Administration from the Open University of Hong Kong. Mr. Lin has extensive experience in management, operation and project development in large

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corporations in China, and has held senior management positions in (Baohai Group Joint Stock Limited Liability Corporation) and (Sanya Oriental Tourism Company Limited).

Prior to the entering into of the Share Purchase Agreement, neither the Offeror, Mr. Sze, Mr. Lin nor any party acting in concert with them owned any Shares. Save for the entering into of the Share Purchase Agreement, none of the Offeror, Mr. Sze, Mr. Lin nor any party acting in concert with them has dealt in any Shares and other securities of the Company during the period commencing six months prior to the date of the Share Purchase Agreement and up to the Latest Practicable Date.

10. INTENTION OF THE OFFEROR REGARDING THE REMAINING GROUP

The Offeror intends that the Remaining Group will continue its existing businesses of financial quotation and securities trading system licensing and wireless applications. The Offeror has no intention to dispose of or re-deploy the assets of the Remaining Group following completion of the Disposal Agreement other than in the ordinary course of its business, or to inject its assets into the Remaining Group.

Following Completion and the close of the Offer, the Offeror will conduct a detailed review on the business operations and financial position of the Remaining Group for the purpose of formulating business plans and strategies for the future business development of the Remaining Group. Subject to the result of such review and if suitable investment or business opportunities arises, the Offeror may consider diversifying the business of the Remaining Group to broaden its income source and/or carrying out fund raising exercises to strengthen the financial position of the Remaining Group. If such acquisitions and/or fund raising exercises materialise, further announcement(s) will be made by the Company in accordance with the Listing Rules.

The Stock Exchange has stated that if, at the close of the Offer, less than the minimum prescribed percentage applicable to the Company, being 25% of all the issued Shares, are held by the public, or if the Stock Exchange believes that (a) a false market exists or may exist in the trading of the Shares; or (b) that there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend dealings in the Shares.

The Offeror intends to maintain the listing status of the Company on the Stock Exchange following the close of the Offer. The Offeror and the Company will take appropriate steps to ensure that sufficient public float exists in the Shares.

11. FINANCIAL EFFECTS OF THE DISPOSAL AGREEMENT

Upon completion of the Disposal Agreement, the Company’s shareholding interest in ABC Global will drop from 100% to 0%. ABC Global will cease to be a subsidiary of the Company following the Disposal.

* for identification purpose only

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Upon completion of the Disposal Agreement, the Company’s shareholding interest in Choudary will drop from 100% to 51%. Each of Choudary, QuotePower and QuickSilver will become a non wholly owned subsidiary of the Company following the Disposal. The remaining 51% interest in Choudary is intended to be retained by the Company upon completion of the Disposal Agreement.

Based on the unaudited pro forma consolidated income statement of the Remaining Group set out in Appendix II to this circular, assuming (inter alia) that the Restructuring, the Disposal and the distribution of the Special Dividend had all taken place on 1 April 2007, the consolidated profit/loss attributable to shareholders of the Group would have increased from a loss of HK$5,546,779 to a profit of HK$96,903,160. The unaudited pro forma consolidated profit attributable to shareholders of HK$96,903,160 has already taken into account (a) an adjustment reflecting a gain of HK$20,585,276 (unaudited) recorded by the Remaining Group in relation to a waiver of an amount due by the Remaining Group to the ABC Global Group during the year ended 31 March 2008; (b) an estimated gain realized from the release of investment revaluation reserve of HK$90,665,551 in relation to the available-for-sale securities held by ABC Global Group being disposed of by the Company assuming the Disposal took place on 1 April 2007; and (c) an estimated loss from the Disposal of approximately HK$12,720,107 (after estimated professional costs of HK$6,000,000 and assuming the Disposal took place on 1 April 2007).

Based on the unaudited pro forma consolidated balance sheet of the Remaining Group set out in Appendix II to the circular, assuming (inter alia) that the Restructuring, the Disposal and the distribution of the Special Dividend had all taken place on 31 March 2008, the consolidated total assets of the Group would have decreased from HK$419,087,904 to approximately HK$41,692,629, and the unaudited consolidated total liabilities of the Group would have decreased from HK$128,234,094 to approximately HK$27,811,467.

Based on the unaudited pro forma consolidated balance sheet of the Remaining Group set out in Appendix II to the circular, assuming (inter alia) that the Restructuring and the Disposal had taken place on 31 March 2008, the Company is expected to record (a) an estimated gain realized from the release of investment revaluation reserve in the amount of HK$78,250,262 in relation to the available-for-sale securities held by ABC Global Group being disposed of by the Company assuming the Disposal took place on 31 March 2008; and (b) an estimated loss on the Disposal in the amount of approximately HK$6,849,054 (after estimated professional costs of HK$6,000,000).

12. MANAGEMENT DISCUSSION AND ANALYSIS ON THE REMAINING GROUP

The financial information relating to the Remaining Group referred to in the following management discussion and analysis is based on the unaudited pro forma financial information on the Remaining Group as set out in Appendix II to this circular which has been prepared on the basis as set out therein for the purpose of illustrating the effect of the Disposal, as if it had taken place on 31 March 2008 for the unaudited pro forma consolidated balance sheet, and on 1 April 2007 for the unaudited pro forma consolidated income statement and the unaudited pro forma consolidated cash flow statement.

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12.1 Financial review

The principal activities of the Remaining Group following completion of the Disposal Agreement will comprise two business units: financial information services and securities trading licensing provided by QuotePower and wireless applications development provided by QuickSilver.

For the fiscal year ended 31 March 2008, the two business units of the Remaining Group (before minority interests) recorded a turnover of HK$150 million (unaudited) and a net profit of approximately HK$3.75 million (unaudited), excluding an adjustment reflecting a gain of HK$20,585,276 (unaudited) recorded by QuickSilver in relation to a waiver of an amount due by QuickSilver to the ABC Global Group.

QuotePower

The principal business of QuotePower encompasses the provision of financial information products and on-line trading platform for securities trading.

QuotePower is financially self-sufficient. It generated revenue and net profit in the respective sums of HK$149.89 million (unaudited) and HK$4.76 million (unaudited) in the fiscal year ended 31 March 2008.

QuickSilver

QuickSilver provides mobile messaging solutions to wireless service providers for their customers to communicate via SMS (Short Message Service) or MMS (Multimedia Messaging Service). The data applications of QuickSilver include financial quote services, horse racing data and soccer game data developed on the back of SMS, MMS, WAP (Wireless Application Protocol) and JAVA, which have been rolled out by service providers and carrier customers in Hong Kong.

As the selling cycle for QuickSilver’s wireless solutions is rather long, QuickSilver incurred a loss of HK$1.01 million (unaudited) in the fiscal year ended 31 March 2008, excluding an adjustment reflecting a gain of HK$20,585,276 (unaudited) recorded by QuickSilver in relation to a waiver of an amount due by QuickSilver to the ABC Global Group. QuickSilver has since March 2008 become a wholly-owned subsidiary of QuotePower with the view to achieving more efficient deployment of development staff employed by the two respective business units. Mobile quotation services developed by QuickSilver will help broaden the product offerings of QuotePower, thereby enhancing its competitiveness in the marketplace.

12.2 Prospects

In the wake of the turmoil in the global financial markets earlier this year, investor sentiment is likely to remain weak for quite a while and this may affect the short-term outlook of QuotePower and hence the Remaining Group. However, in light of QuotePower’s market position and strong customer base, it should be able to weather any serious threats of a market downturn. As Hong Kong continues to strengthen its position as an international

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financial centre, QuotePower should also be able to exploit new growth prospects. It will continue to explore business opportunities to enhance its market leadership in the area of financial information services and to expand the geographical reach of its sales and marketing activities.

The Remaining Group may also, following a detailed review of its business operations and financial position, look for suitable investment or business opportunities to broaden its income source.

12.3 Gearing Ratio

As at 31 March 2008, the Remaining Group would have cash balances amounting to approximately HK$27 million (unaudited) after accounting for the sales proceeds of HK$252,300,000 from the Disposal and the distribution of the Special Dividend of 273,868,476. As at 31 March 2008, the Remaining Group did not have any borrowings.

On 15 July 2008, the Offeror and Mr. Sze entered into a facility agreement with the Company pursuant to which, subject to Completion, the Offeror and Mr. Sze irrevocably undertook to grant to the Company a joint standby revolving facility of HK$20 million for a period of 24 months after Completion. The facility will be unsecured and bears interest at the prime rate for the lending of Hong Kong dollars as quoted by The Hongkong and Shanghai Banking Corporation Limited from time to time accruing over the daily outstanding sum.

Assuming the facility of HK$20 million would be drawn down in full and on the basis of the unaudited pro forma total equity of the Remaining Group of HK$13,881,162, the gearing of the Remaining Group would be as follows.

Total equity	HK$13,881,162	41%
Loans	HK$20,000,000	59%
Total capital employed	HK$33,881,162	100%

12.4 Capital Structure

There has been no change in the capital structure of the Company in the fiscal period from 1 April 2007 to 31 March 2008, nor in the subsequent period up to the Latest Practicable Date. As at the Latest Practicable Date, the authorized share capital and the issued share capital of the Company were 600,000,000 shares and 466,886,000 shares, respectively, of HK$0.10 each.

Assuming that the Capital Reorganisation is approved at the SGM, the authorized share capital and the issued share capital of the Company will become 6,000,000,000 shares and 466,886,000 shares, respectively, of HK$0.01 each. Details of the Capital Reorganisation are set out in paragraph 5 of the Letter of the Board of this circular.

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12.5 Significant Investment

Apart from capital investment on computing equipment in the ordinary course of its business, the Remaining Group has not made any significant investment in the fiscal period from 1 April 2007 to 31 March 2008, nor in the subsequent period up to the Latest Practicable Date.

12.6 Material Acquisitions and Disposals

The Remaining Group did not make any material acquisitions or disposals during the fiscal period from 1 April 2007 to 31 March 2008. Save for the transactions contemplated by the Restructuring, the Remaining Group has not entered into any material acquisitions or disposals in the subsequent period up to the Latest Practicable Date.

12.7 Foreign Exchange Exposure

Practically all of the Remaining Group’s current business transactions, assets and liabilities are denominated in Hong Kong dollars. The risk of foreign exchange fluctuation is not significant to the Remaining Group.

12.8 Charge on Group’s Assets

Up to the Latest Practicable Date, all of the assets of the Remaining Group were free of any legal charge or lien.

12.9 Contingent Liability

As at the Latest Practicable Date, the Remaining Group had no material contingent liabilities.

12.10 Employee Information and Remuneration Policies

As at the Latest Practicable Date, there were 30 staff employed by the Remaining Group. The remuneration policy is in line with prevailing market practices and is formulated on the basis of the performance and experience of individual employees. Apart from basic salaries, staff benefits include provident funds, life insurance and medical assistance benefits. The Remaining Group may also grant share options to eligible employees to motivate their performance and contribution.

13. PROPOSED CHANGE OF BOARD COMPOSITION OF THE COMPANY

If Completion takes place, all existing Directors will resign from their office with effect from the earliest time permitted under the Takeovers Code. The Offeror intends to nominate Mr. Lin as an executive Director and such appointment will not take effect earlier than the date of posting of the offer document subject to the requirements under the Takeovers Code. In addition, the Offeror is in the process of identifying other suitable candidates of executive Directors and independent non-executive Directors. A separate announcement will be made if such appointments are finalized.

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14. LISTING RULES AND TAKEOVERS CODE IMPLICATIONS

14.1 Special deal

The Disposal constitutes a special deal under Rule 25 of the Takeovers Code, and requires the consent of the Executive. The Executive’s consent, if granted, will be conditional upon (a) the independent financial adviser to the independent board committee publicly giving an opinion that the terms of such transaction are fair and reasonable; and (b) the approval of the Independent Shareholders voting by way of a poll at the SGM.

14.2 Connected transaction

As at the Latest Practicable Date, HCBC Enterprises holds all the 312,000 ‘A’ voting shares and 12,488 (out of 78,000) ‘B’ non-voting shares of HCBC Communications, which in turn holds 245,523,600 Shares representing 52.59% of the issued share capital of the Company. In addition, HCBC Enterprises directly holds 19,808,000 Shares representing 4.24% of the issued share capital of the Company. Accordingly, HCBC Enterprises is regarded as a connected person of the Company under the Listing Rules, and the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

Since the applicable percentage ratios in respect of the Disposal represent more than 2.5% for the Company, the Disposal constitutes a non-exempt connected transaction under Chapter 14A of the Listing Rules and is subject to approval of the Independent Shareholders.

14.3 Very substantial disposal

The applicable percentage ratios in respect of the Disposal represent 75% or more of the Company. Accordingly, the Disposal constitutes a very substantial disposal of the Company under Chapter 14 of the Listing Rules and is subject to approval of the Independent Shareholders.

14.4 Abstaining from voting

Under Note 4 to Rule 25 of the Takeovers Code, votes in respect of the Disposal must be taken from shareholders who are not involved in or interested in the transaction (otherwise than solely as shareholders of the offeree company). Under Rule 14.49 of the Listing Rules, any shareholder with a material interest in the transaction and his associates must abstain in voting in respect of the Disposal. Under Rule 14A.54 of the Listing Rules, any connected person of the Company with a material interest in the transaction, and any person with a material interest in the transaction and its associates, must abstain in voting in respect of the Disposal.

– 24 –

LETTER FROM THE BOARD

Mr. Leung Kwok Kit and their respective associates (including Ms. Joyce Leung and Ms. Jacqueline Leung) will abstain from voting in respect of the resolutions to approve the Disposal at the SGM. The shareholdings of the Abstaining Shareholders are summarized in paragraph 15(c) of the Letter from the Board of this circular.

As far as the Directors are aware, having made all reasonable enquiries, as at Latest Practicable Date: -

(a) the Abstaining Shareholders controlled or were entitled to exercise control over the voting rights in respect of their respective Shares;
(b) (i) there were no voting trusts or other agreements or arrangements or understandings (other than an outright sale) entered into by or binding upon the Abstaining Shareholders and (ii) there were no obligations or entitlements of the Abstaining Shareholders, whereby such persons have or might have temporarily or permanently passed control over the excise of the voting right in respect of their Shares to third parties, either generally or on a case-by-case basis; and
(c) there were no discrepancies between the beneficial shareholding interests in the Company of the Abstaining Shareholders and the number of Shares in respect of which they would control or would be entitled to exercise control over the voting rights at the SGM.

– 25 –

LETTER FROM THE BOARD

15. CORPORATE STRUCTURE AND SHAREHOLDING OF THE COMPANY BEFORE AND AFTER COMPLETION

(a) The corporate structure of the Company immediately before Completion (assuming completion of the Restructuring) will be as follows:

==> picture [253 x 322] intentionally omitted <==

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

HCBC Enterprises
100%
HCBC Communications
52.59%
The Company
100%
ABC Global
49% 51%
Discontinued
Choudary
Business
99.95%
QuotePower
100%
QuickSilver
----- End of picture text -----

Remarks: HCBC Enterprises controls 100% of the voting rights of HCBC Communications.

– 26 –

LETTER FROM THE BOARD

(b) The corporate structure of the Company immediately after Completion will be as follows:

==> picture [255 x 212] intentionally omitted <==

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

Offeror HCBC Enterprises
52.59% 100%
The Company ABC Global
51%
49%
Discontinued
Choudary
Business
99.95%
QuotePower
100%
QuickSilver
----- End of picture text -----

Before Completion Number of shares % 0 0 245,523,600 52.59 19,808,000 4.24 7,530,000 1.61 3,500,000 0.75 8,868,006 1.90 1,206,600 0.26 286,436,206 61.35	Before Completion Number of shares % 0 0 245,523,600 52.59 19,808,000 4.24 7,530,000 1.61 3,500,000 0.75 8,868,006 1.90 1,206,600 0.26 286,436,206 61.35	After Completion Number of shares % 245,523,600 52.59 0 0 19,808,000 4.24 7,530,000 1.61 3,500,000 0.75 8,868,006 1.90 1,206,600 0.26 286,436,206 61.35	After Completion Number of shares % 245,523,600 52.59 0 0 19,808,000 4.24 7,530,000 1.61 3,500,000 0.75 8,868,006 1.90 1,206,600 0.26 286,436,206 61.35
6,636,400 173,813,394 180,449,794	1.42 37.23 38.65	6,636,400 173,813,394 180,449,794	1.42 37.23 38.65
466,886,000	100.00	466,886,000	100.00

The shareholding of Mr. Leung Kwok Kit disclosed here includes (a) 906,600 Shares owned by him personally; (b) 100,000 Shares owned by his daughter, Ms. Joyce Leung; and (c) 200,000 Shares owned by his daughter, Ms. Jacqueline Leung.
The shareholding of the Directors disclosed here includes (a) 6,450,400 Shares owned by Ms. Patricia Yeung Shuk Kwan; and (b) 186,000 Shares owned by Mr. Aubrey Li Kwok Sing.

– 27 –

LETTER FROM THE BOARD

16. INFORMATION ON THE GROUP, THE ABC GLOBAL GROUP, THE CHOUDARY GROUP, HCBC COMMUNICATIONS, HCBC ENTERPRISES, HCBC BVI AND GODDARD

16.1 Information on the Group

The Company is incorporated in Bermuda with limited liability and its Shares are listed on the Stock Exchange. The Company is an investment holding company. Its subsidiaries are principally engaged in providing financial information services, wireless applications development, securities trading system licensing, property and investment holding.

For the year ended 31 March 2007, the audited consolidated revenue, profit before taxation and profit after taxation of the Company were HK$73,784,184, HK$8,650,313 and HK$7,619,441, respectively. For the year ended 31 March 2008, the audited consolidated revenue, loss before taxation and loss after taxation of the Company were approximately HK$150,249,600, HK$5,304,820 and HK$5,546,779, respectively. As at 31 March 2008, the audited consolidated net assets of the Company were approximately HK$290,853,810, or HK$0.6230 per Share.

16.2 Information on the ABC Global Group and the Choudary Group

Completion is conditional upon, inter alia, completion of the Restructuring. Following the Restructuring, (a) ABC Global will become the holding company of the investment holding business of the Group and a 49% minority interest in Choudary; and (b) the Company will continue to own a 51% direct interest in Choudary.

Based on the combined financial information of the ABC Global Group and the consolidated financial information of the Choudary Group as presented in Section III (Subsequent Events) of the Accountant’s Report of the Group set out in Appendix I of this circular, the net profits/losses (before and after taxation) and the net assets/liabilities of the ABC Global Group and the Choudary Group are as follows:

		ABC Global	Group	Choudary	Group
		As at and	As at and	As at and	As at and
		for the year	for the year	for the year	for the year
		ended 31	ended 31	ended 31	ended 31
		March 2007	March 2008	March 2007	March 2008
		(HK$)	(HK$)	(HK$)	(HK$)
Net	profit/(loss) before taxation	8,767,082	(16,564,724)	1,058,625	24,333,315
Net	profit/(loss) after taxation	7,736,210	(16,806,683)	1,058,625	24,333,315
Net	assets/(liabilities)	80,135,157	50,913,184	(85,016,885)	(57,683,764)

Notes:

(a) The combined financial information of the ABC Global Group and the consolidated financial information of the Choudary Group above were extracted from Section III (Subsequent Events) of the Accountant’s Report of the Group set out in Appendix I of this circular, which were prepared on the assumption that the proposed structure after the Restructuring has been in existence throughout the relevant financial period.

– 28 –

LETTER FROM THE BOARD

(b) The net profit (before and after taxation) of the Choudary Group for the year ended 31 March 2008 has included an adjustment reflecting a gain of HK$20,585,276 recorded by the Choudary Group in relation to a waiver of an amount due by the Choudary Group to the ABC Global Group during the year ended 31 March 2008.

As at the Latest Practicable Date, (a) the directors of Choudary are Mr. George Joseph Ho, Ms. Patricia Yeung Shuk Kwan and Mr. Michael Tse Chi Hung; (b) the directors of QuotePower are Mr. George Joseph Ho, Mr. Joey Fan, Ms. Patricia Yeung Shuk Kwan and Mr. Michael Tse Chi Hung; and (c) the directors of QuickSilver are Mr. George Joseph Ho, Ms. Patricia Yeung Shuk Kwan, Mr. Michael Tse Chi Hung and Mr. William Marvin Brack. After completion of the Disposal Agreement, the directors of each of Choudary, QuotePower and QuickSilver will be Mr. Joey Fan, Ms. Patricia Yeung Shuk Kwan, Mr. Michael Tse Chi Hung, Mr. Lin Qun and an additional director to be appointed by the new management of the Company.

16.3 Information on HCBC Communications

HCBC Communications is a company incorporated in the British Virgin Islands with limited liability. Its principal business activity is investment holding. As at the date of the Share Purchase Agreement, HCBC Communications beneficially owns 245,523,600 Shares, representing approximately 52.59% of the issued share capital of the Company.

The issued share capital of HCBC Communications comprises 312,000 ‘A’ voting shares and 78,000 ‘B’ non-voting shares. Each ‘A’ voting share and each ’B’ non-voting share rank pari passu with each other in regard to dividend and return of capital, but ‘B’ non-voting shares do not carry any voting rights. As at the Latest Practicable Date, HCBC Enterprises held all the 312,000 ‘A’ voting shares and 12,488 ‘B’ non-voting shares of HCBC Communications. Mr. George Ho and Goddard respectively held 18,112 and 18,765 ‘B’ non-voting shares of HCBC Communications. The remaining 28,635 ‘B’ non-voting shares of HCBC Communications were owned by Independent Third Parties. The board of directors of HCBC Communications comprises Mr. George Ho, Mr. George Joseph Ho, Mr. Michael Tse Chi Hung and Mr. Leung Kwok Kit.

16.4 Information on HCBC Enterprises

HCBC Enterprises is a company incorporated in Hong Kong with limited liability. Its principal business activity is investment holding.

The issued share capital of HCBC Enterprises comprises 10 management shares and 78,000 non-voting deferred shares. The non-voting deferred shares effectively carry no rights as to dividend, return of capital and voting. As at the Latest Practicable Date, HCBC BVI held all 10 issued management shares of HCBC Enterprises. Therefore, HCBC Enterprises is regarded as a wholly owned subsidiary of HCBC BVI. The board of directors of HCBC Enterprises comprises Mr. George Ho, Mr. George Joseph Ho, Mr. Michael Tse Chi Hung, Mr. Leung Kwok Kit, Ms. Winnie Yu, Mr. Robert Kwok Chin Kung, Mr. Richard Tang Yat Sun and Ms. Amy Miao Mei Yan.

– 29 –

LETTER FROM THE BOARD

16.5 Information on HCBC BVI

HCBC BVI is a company incorporated in the British Virgin Islands with limited liability. Its principal business activity is investment holding.

The issued share capital of HCBC BVI comprises 135,000 management shares and 2,940,619 ordinary shares. Each management share and each ordinary share rank pari passu with each other in regard to dividend and return of capital, but the ordinary shares do not carry any voting rights. As at the Latest Practicable Date, Mr. George Ho was the ultimate beneficial owner of 115,000 management shares and 946,975 ordinary shares of HCBC BVI. The remaining 20,000 management shares and 1,993,644 ordinary shares of HCBC BVI were owned by Independent Third Parties.

16.6 Information on Goddard

Goddard is a company incorporated in Hong Kong with limited liability. Its principal business activity is investment holding.

As at the Latest Practicable Date, Goddard was 16.5% owned by Mr. George Ho, 15.74% owned by The Jessie and George Ho Charitable Foundation (an exempted charitable body under Section 88 of the Inland Revenue Ordinance founded by Mr. George Ho) and 0.17% owned by Mr. George Joseph Ho. The remaining 67.59% of Goddard was owned by Independent Third Parties.

17. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising all the independent non-executive Directors, namely Mr. Adrian Fu Hau Chak, Mr. Aubrey Li Kwok Sing and Mr. Lester Kwok Chi Hang, has been constituted by the Company to consider the Disposal. The other non-executive Directors, namely Mr. George Ho, Mr. Michael Tse Chi Hung and Mr. Leung Kwok Kit, are directors of HCBC Communications and HCBC Enterprises and do not consider themselves sufficiently independent to advise the Independent Shareholders on the Disposal.

The Company has also appointed Altus Capital Limited as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Disposal and the Offer. The appointment of the Independent Financial Adviser has been approved by the Independent Board Committee.

– 30 –

LETTER FROM THE BOARD

18. SGM

A notice convening the SGM is set out on pages 128 to 130 of this circular. At the SGM, relevant resolutions will be proposed to approve the Disposal, the Capital Reorganisation and the Special Dividend.

There is enclosed with this circular a proxy form for use at the SGM. Whether or not you intend to attend the SGM or any adjourned meeting in person, you are requested to complete and sign the accompanying form of proxy, in accordance with the instructions printed thereon and deposit the same at the office of the Company’s share registrar, Computershare Hong Kong Investor Services Limited, Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. 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 should you so wish.

19. RIGHT FOR DEMANDING A POLL

Pursuant to Bye-law 70 of the Company’s bye-laws, every question submitted to a general meeting shall be determined in the first instance by a show of hands of the shareholders present in person, unless voting by way of poll is required by the Listing Rules or a poll is demanded (before or upon the declaration of the result of the show of hands) by the Chairman or by:–

(a) not less than three members present in person or by proxy having the right to vote at the meeting; or
(b) a member or members present in person or by proxy representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or
(c) a member or members present in person or by proxy holding shares conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right; or
(d) if required by the Listing Rules, any director or directors who, individually or collectively, hold proxies in respect of shares representing 5% or more of the total voting rights at such meeting.

In accordance with Rule 25 of the Takeovers Code and Chapters 14 and 14A of the Listing Rules, the vote taken at the SGM to seek approval of the Independent Shareholders in respect of the Disposal must be taken by poll.

– 31 –

LETTER FROM THE BOARD

20. GENERAL

Based on the reasons described in paragraph 7 of the Letter from the Board of this circular and after reviewing the advice from the Independent Financial Adviser as contained on pages 34 to 48 of this circular, the Directors (including the independent non-executive Directors) believe that the transactions contemplated under the Disposal Agreement are on normal commercial terms, the terms of such transactions are fair and reasonable and the entering into of the Disposal Agreement is in the interests of the Company and the Shareholders as a whole. The Directors therefore recommend the Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Disposal.

Shareholders are advised to read carefully the Letter from the Independent Board Committee and the Letter from the Independent Financial Adviser as contained in this circular before deciding to vote for or against the resolution to be proposed at the SGM to approve the Disposal.

The Directors also recommend the Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Capital Reorganisation and the Special Dividend.

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 Patricia Yeung Shuk Kwan

Managing Director

– 32 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the terms of the Disposal.

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 30)

18 July 2008

To the Independent Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL, CONNECTED TRANSACTION AND SPECIAL DEAL – DISPOSAL OF ABC GLOBAL LIMITED

As the Independent Board Committee, we have been appointed to advise you in connection with the terms of the Disposal and the transactions contemplated thereunder, details of which have been set out in the Letter from the Board contained in the circular to the Shareholders dated 18 July 2008 (the “ Circular ”), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

Having considered the terms of the Disposal and the advice of the Independent Financial Adviser in relation thereto as set out on pages 34 and 48 of the Circular, we are of the opinion that the terms of the Disposal are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and the entering into of the Disposal is in the interests of the Company and the Shareholders as a whole. We therefore recommend you to vote in favour of the resolution to be proposed at the SGM to approve the Disposal and the transactions contemplated thereunder.

Adrian Fu Hau Chak

Yours faithfully, Aubrey Li Kwok Sing Lester Kwok Chi Hang Independent Board Committee

– 33 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter of advice from Altus Capital Limited to the Independent Board Committee and the Independent Shareholders in respect of the Disposal which has been prepared for the purpose of inclusion in this circular.

8/F Hong Kong Diamond Exchange Building 8 Duddell Street, Central Hong Kong

18 July 2008

To the Independent Board Committee and the Independent Shareholders ABC Communications (Holdings) Limited 2/F Jade Mansion 40 Waterloo Road Yaumatei Kowloon Hong Kong

Dear Sirs,

VERY SUBSTANTIAL DISPOSAL, CONNECTED TRANSACTION AND SPECIAL DEAL DISPOSAL OF 100% INTEREST IN ABC GLOBAL LIMITED

INTRODUCTION

We refer to our appointment as independent financial adviser to advise the Independent Board Committee and Independent Shareholders in respect of the Disposal. Details of the Disposal are set out in the letter from the Board contained in the circular of the Company dated 18 July 2008 (“Circular”) to the Shareholders, of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

The Disposal Agreement constitutes a special deal under Rule 25 of the Takeovers Code, and requires the consent of the Executive. The Executive’s consent, if granted, will be conditional upon (a) us, being the independent financial adviser to the Independent Board Committee publicly giving an opinion that the terms of such transaction are fair and reasonable; and (b) the approval of the Independent Shareholders voting by way of a poll at the SGM.

The Disposal constitutes a very substantial disposal for the Company under the Listing Rules as the applicable percentage ratios calculated per Rule 14.07 of the Listing Rules represent 75% or more for the Company. The Vendor under the Disposal Agreement, being the Company, is currently owned as to approximately 52.59% by HCBC Communications, which in turn is owned by the Purchaser under the Disposal Agreement, HCBC Enterprises. As at the Latest Practicable Date, HCBC Enterprises hold all the 312,000 “A” voting shares

– 34 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

and 12,488 (out of 78,000) “B” non-voting shares of HBCB Communications. In addition, HCBC Enterprises directly holds 4.24% of the issued share capital of the Company. The Disposal therefore constitutes a connected transaction for the Company under the Listing Rules, which will be subjected to the Independent Shareholders’ approval at the SGM.

Mr. George Ho, Mr. George Joseph Ho, Mr. Michael Tse Chi Hung and Mr. Leung Kwok Kit are common directors of HCBC Communications and HCBC Enterprises and are deemed to be interested in the Disposal. In addition, Mr. George Ho has an indirect beneficial interest in the shareholding of HCBC Enterprises. Accordingly, HCBC Communications, HCBC Enterprises, Mr. George Ho, Mr. George Joseph Ho, Mr. Michael Tse Chi Hung, Mr. Leung Kwok Kit and their respective associates (including Ms. Joyce Leung and Ms. Jacqueline Leung) are required to abstain from voting on the proposed resolution approving the Disposal.

The Independent Board Committee has been established to advise whether the Disposal is fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. The Independent Board Committee comprises Mr. Adrian Fu Hau Chak, Mr. Aubrey Li Kwok Seng and Mr. Lester Kwok Chi Hang, all being independent non-executive Directors.

BASIS OF OUR ADVICE

In formulating our opinion, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, the Company and its management. We have assumed that all statements, information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continued to be true, accurate and complete as at the date of the Circular. We have no reason to doubt the truth, accuracy and completeness of the statements, information, facts, opinions and representations provided to us by the Directors, the Company and its management. The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinions expressed; thus we have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular, or the reasonableness of the opinions and representations provided to us by them.

All the Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that, to the best of their knowledge, opinions expressed in the Circular have been arrived at

– 35 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

after due and careful consideration and that there are no other facts not contained in the Circular the omission of which would make any statement in the Circular misleading. We have relied on such information and opinions and have not however, conducted any independent investigation into the business, financial conditions and affairs or the future prospects of the Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion whether the Disposal is fair and reasonable, we have taken the following factors into consideration:

1. Background of the Transactions

On 2 May 2008, the Share Purchase Agreement was entered into upon which the Offeror has conditionally agreed to purchase from HCBC Communications approximately 52.59% interest in the Company, for an aggregate consideration of HK$98,014,865, which is equivalent to approximately HK$0.3992 per Sale Share.

The completion of the Share Purchase Agreement is conditional upon the completion of the Disposal Agreement, and the Sale Shares will be transferred by HCBC Communications to the Offeror on an ex-Special Dividend basis.

The Company entered into the Disposal Agreement on 2 May 2008, for HK$252,300,000 in cash as consideration for disposing of its interest in the entire issued share capital of ABC Global to HCBC Enterprises. Upon completion of the Disposal Agreement, the Company will use the proceeds, together with surplus cash of the Company, for payment of the Special Dividend to all existing Shareholders (including HCBC Communications). The Special Dividend amounts to HK$273,868,476, which is equivalent to approximately HK$0.5866 per Share.

2. Rationale of the Disposal

The Disposal comprises the disposal of the Discontinued Business, which consists of two office properties and some passive investments in eAccess Limited, eMobile Limited, Argo II Funds, Savecom, ABC Net Limited and Lexco Limited; as well as a 49% minority interest in Choudary Group (being the Continuing Business).

Upon Completion, there will be a new controlling shareholder and all the existing Directors will resign from the Company. The Offeror intends to nominate Mr. Lin as an executive Director and is in the progress of identifying new executive directors and independent non-executive directors. Together with the new management, the Offeror intends to focus the Company’s capital and management resources on the Continuing Business, which is principally engaged in the financial quotation and securities trading system licensing and wireless application. The Share Purchase Agreement has been entered into conditional upon the completion of the Disposal Agreement which means the Offeror has no interest in the Discontinued Business and the investment portfolio under the Discontinued Business will not form part of the on-going business after the Completion.

– 36 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Given the fair and reasonable price offered for the Discontinued Business (which will be discussed in section 3 below), we believe it is reasonable for the Company to dispose of the Discontinued Business.

3. Price of the Disposal

An aggregate consideration of HK$252.3 million will be paid for the Discontinued Business and the 49% minority interest in Choudary Group. As mentioned in the Circular, the consideration of the Disposal was determined with reference to the aggregate book value of the Discontinued Business and 49% of the Continuing Business as at 30 September 2007, which amounted to approximately HK$259.9 million. The table below shows the prevailing values and the latest available net asset values of the respective investments under the Discontinued Business and the 49% minority interest in Choudary Group, which amounted to approximately HK$246.05 million (“Prevailing Value”). The aggregate consideration of HK252.3 million which is at a discount to the aforesaid book value as at 30 September 2007, represents a premium of HK$6.25 million over the Prevailing Value. We believe it is appropriate to compare the consideration of the Disposal against the Prevailing Value which reflects more updated values of the investments.

	The Group’s
	shareholding in the	Nature of business	Net Asset Value/
Name of investment	investment	of the investment	Market Value
			(HK$ million)
eAccess Limited	17,901 shares which are	Broadband internet	As at Latest
	listed on the Tokyo	service provider	Practicable
	Stock Exchange		Date: 74.7
	representing 1.23% of
	its issued share
	capital
eMobile Limited	9,677 unlisted securities	Owned as to 37.6%	As at 31 March
	representing 0.47% of	by eAccess	2008: 62.8
	its issued share	Limited. Licensed
	capital	company to
		operate a new
		mobile network in
		Japan
Argo II Funds	1.89% of its total	Unlisted closed-end	As at 31 March
	capital	private funds	2008: 29.8
		investing in	(Note 1)
		wireless internet
		industries

– 37 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Name of investment
The Group’s
shareholding in the
investment
Nature of business
of the investment
SmarTone
76,000 shares which are
listed on the Stock
Exchange
representing 0.013%
of its issued share
capital
Provision of mobile
services and the
sale of mobile
telephones and
accessories
Property – 1st Floor,
Jade Mansion
100% interests
Property for rental
purposes
Property – 2nd Floor,
Jade Mansion
100% interests
Property used as the
Company’s office
ABC Net Ltd
18% of its issued share
capital
Provision of internet
and related
services
Lexco Ltd
9% of its issued share
capital
Provision of facility
management
consultancy and
maintenance or
support services
(“Savecom”)
0.548% of its issued
share capital
Provision of paging
and internet
services in Taiwan
Choudary (Being the
Continuing Business)
49% of its issued share
capital
Financial quotation
and securities
trading system and
wireless
application
Cash at Bank (Note 5)
Loans denominated in JPY
Total

Net Asset Value/
Market Value
(HK$ million)
As at Latest
Practicable
Date: 0.6
As at 31 March
2008: 19.7
As at 31 March
2008: 19.9
As at 31 July
2007: (0.5)
(Note 2)
As at 31 March
2007: 0.2
(Note 3)
As at 31 March
2008:
approximately
0.05 (Note 4)
As at 31 March
2008: 3.7
134.7
(99.6)
246.05

Notes:

(1) Net asset value based on the Company’s shareholdings in Argo II Funds and is calculated based on Argo II Funds’ unaudited financial statements for the period ended 31 March 2008 provided by the investment manager of Argo II Funds. The unaudited net asset value of Argo II Funds as at 31 March 2008 is approximately US$202.03 million and it is made up of the realisable value of the underlying assets of the investments under Argo II Funds (net of its liabilities). For reference, the audited net asset value of Argo II Funds as at 31 December 2007 is approximately US$196.44 million.

(2) Net asset value based on its unaudited financial statements for the period ended 31 July 2007.

– 38 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(3) Net asset value based on its audited financial statements for the period ended 31 March 2007.
(4) Net asset value based on its unaudited financial statements for the period ended 31 March 2008.
(5) Based on bank balance as at 31 March 2008 plus proceeds from partial sale of shares of eAccess Limited in April 2008.

eAccess Limited, eMobile Limited, Argo II Funds, SmarTone Telecommunications Holdings Limited (“SmarTone”), ABC Net Limited and Lexco Limited are passive investments of the Group. The Group has no control nor active involvement in the management and operations of these investments.

eAccess Limited

The market value of eAccess Limited shares was determined with reference to the closing market price and the foreign exchange rate on the Latest Practicable Date. Based on the closing share price of eAccess Limited of JPY56,100 and the exchange rate of JPY100 to HK$7.43 on the Latest Practicable Date, the market value of eAccess Limited shares as at the Latest Practicable Date was approximately HK$74.7 million.

For illustration purposes, the market value of eAccess Limited shares was approximately HK$85.6 million based on the closing price of JPY64,100 per eAccess Limited share on 31 March 2008 and the exchange rate of JPY100 to HK$7.79. Being shares listed on the Tokyo Stock Exchange, they are subject to stock market fluctuations.

The graph below illustrates the historical closing prices and trading volume of eAccess Limited shares from 2 July 2007 to Latest Practicable Date (“Review Period”). The closing prices of eAccess shares had fluctuated between a low of JPY52,500 per eAccess Limited share on 20 November 2007 to a high of JPY74,400 per eAccess Limited share on 1 November 2007 during the Review Period. The closing share price of JPY56,100 per eAccess Limited share on the Latest Practicable Date was approximately 24.6% lower than the highest closing price and approximately 6.9% higher than the lowest closing price of eAccess Limited share during the Review Period.

==> picture [332 x 168] intentionally omitted <==

– 39 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The table below sets out the monthly average closing price of eAccess Limited shares and its average daily trading volume for the respective months. eAccess Limited has recorded the highest monthly average closing price of JPY70,705 per eAccess Limited share in the month of July 2007 and the lowest average closing price of JPY56,157 per eAccess Limited share in the month of June 2008.

		Average daily
	Monthly	trading volume in
Month	Average Price	the month
	(JPY)
July 2007	70,705	8,889
August 2007	61,626	11,631
September 2007	60,211	9,810
October 2007	64,864	10,755
November 2007	61,138	12,668
December 2007	68,753	12,954
January 2008	63,089	6,298
February 2008	64,245	5,845
March 2008	64,310	6,222
April 2008	65,881	4,436
May 2008	62,910	7,668
June 2008	56,157	7,015
1 July 2008 – 15 July 2008	56,382	4,471

The trading volume of eAccess Limited shares during the second half of year 2007 was generally higher than the period between 1 January 2008 and the Latest Practicable Date. During the Review Period, the highest and lowest average daily trading volume were 12,954 eAccess Limited shares and 4,436 eAccess Limited shares in December 2007 and April 2008 respectively.

In view of the recent average daily volume of less than 5,000 eAccess Limited shares in July 2008, the Company may require three to four days if it were to dispose of its entire shareholding of 17,901 eAccess Limited shares, which represents 1.23% of issued share capital of eAccess Limited. The Company may find it difficult to dispose of its entire shareholding in the open market within a short period. In such event, a liquidity discount will be applicable as these shares may not be realisable at the prevailing market price at once.

eMobile Limited

eMobile Limited is licensed to operate a mobile network in Japan and launched its data services in March 2007. It is still at a loss making stage. The value of the securities of eMobile Limited was determined with reference to a valuation conducted by an independent valuer on the securities as at 31 March 2008 at the exchange rate of JPY100 equivalent to HK$7.79. The valuation of approximately JPY844.6 million is equivalent to approximately HK$65.7 million as at 31 March 2008, which represents a

– 40 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

downward revaluation from HK$72.06 million as at 31 March 2007. The value of eMobile Limited was approximately HK$62.8 million based on the exchange rate of JPY100 to HK$7.43 on the Latest Practicable Date.

The values of eAccess Limited and eMobile Limited are denominated in JPY and therefore subject to its fluctuations against the HK$. If the JPY moves unfavorably against HK$, there will be a negative impact on the realisable value of these investments. During the period between 1 June 2007 and the Latest Practicable Date, the exchange rate has fluctuated between JPY100 equivalent to HK$6.31 and HK$8.00 as shown in the chart below.

==> picture [317 x 190] intentionally omitted <==

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

Japanese Yen to Hong Kong Dollar Exchange Rate
(HK$ per JPY100)
8.5000
8.0000
7.5000
7.0000
6.5000
6.0000
Jun 07 Jul 07 Aug 07 Oct 07 Nov 07 Dec 07 Feb08 08Mar Apr 08 Jun 08 Jul 08
01 12 22 02 12 23 02 14 24 04 15
----- End of picture text -----

Loans

Under the Discontinued Business, there are JPY denominated loans of approximately JPY1.34 billion as at 31 March 2008. This amount of JPY denominated loan is equivalent to HK$99.6 million based on the exchange rate of JPY100 to HK$7.43 on the Latest Practicable Date.

The net exposure to JPY is therefore the difference between (i) the value of the eAccess Limited and the eMobile Limited; and (ii) the total value of the JPY denominated loans. For illustration purposes, the aggregate value of eAccess Limited and eMobile Limited amounts to approximately JPY1.94 billion and the JPY denominated loans amounts to approximately JPY1.34 billion as at 31 March 2008. Therefore, the Company’s net exposure to JPY is approximately JPY603 million and such exposure will be subject to foreign exchange fluctuations.

– 41 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Argo II Funds

The value of the Company’s shareholding in Argo II Funds of approximately HK$29.8 million was based on its net asset value of approximately US$3,833,129 as at 31 March 2008 as reported in its unaudited financial statements for the period ended 31 March 2008 and the exchange rate of US$1 equivalent to HK$7.80. It represented approximately 1.89% of the total capital of the Argo II Funds. Had Argo II Funds’ audited net asset value as at 31 December 2007 been used, the value of the Company’s shareholding will be US$3,727,143. We believe applying the 31 March 2008 figures provides a more updated value to the Company’s shareholding in Argo II Funds. As Argo II Funds is an unlisted investment, quoted market price is not available and it may be difficult to find a ready buyer for such illiquid investment. It therefore is subject to liquidity risks and the Company may have to apply a liquidity discount in order to realise its shareholdings in Argo II Funds..

SmarTone

SmarTone is a listed security on the Stock Exchange. Based on the closing price of HK$7.82 per share on the Latest Practicable Date, the market value of SmarTone shares was HK$594,320. For illustration purposes, the market value of the shares in SmarTone of HK$623,200 was based on the closing price of HK$8.20 per share on 31 March 2008. Hence, the market value of SmarTone shares as at the Latest Practicable Date represents an approximately 4.6% of discount to its market value as at 31 March 2008. Given that the Company’s shareholding in SmarTone is small, the entire holdings should be realisable in the prevailing market price. However, being listed securities, their realisable value on the Stock Exchange may vary due to share price fluctuations.

Properties

The property values of HK$19.65 million and HK$19.85 million respectively for the two offices situated at 1st and 2nd floor of Jade Mansion, 40 Waterloo Road, Yaumatei, Kowloon, Hong Kong were determined with reference to the market value of the properties as at 31 March 2008 as indicated in the valuation report prepared by an independent property valuer. As stated in the valuation report, the market valuation of the properties represents the estimated amount for which the properties 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. We are of the view that this basis of valuation is reasonable.

Choudary Group

The Disposal also includes the 49% interest in Choudary Group, which has a pro forma net asset value as at 31 March 2008 amounting to approximately HK$3.7 million. Choudary Group constitutes all the Continuing Business. The pro forma net asset value is applied because the disposal of the 49% interest in the Choudary Group by the Company to HCBC Enterprises is conducted after the Restructuring. By divesting 49% interest in the Choudary Group, the Company could share the downside

– 42 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

risk of Choudary Group’s business with HCBC Enterprises in the event of a market downturn. At the same time, it enables the Company to leverage on the experience of the management of HCBC Enterprises who has been managing Choudary Group’s business and also ensure their commitment towards improving the Continuing Business. Given these benefits, we are of the view that it is reasonable for the Company to dispose of 49% of its interest in the Choudary Group.

Other Assets

As the securities of ABC Net Limited, Lexco Limited and Savecom are not listed on any stock exchange, these securities do not have quoted market prices. Lexco Limited has a net asset value of approximately HK$0.2 million based on its audited financial statements for the period ended 31 March 2007.

ABC Net Limited has reported a net liability of HK$492,117 based on its unaudited financial statements for the period ended 31 July 2007. If the value of ABC Net Limited was based on its audited financial statements for the period ended 31 March 2006, its net liability value will be HK$417,030. According to the Directors, ABC Net Limited currently has minimal operations and does not prepare management accounts for reporting to its shareholders, including the Company on a regular basis.

Savecom is an unlisted company in Taiwan. Based on its unaudited financial statements for the period ended 31 March 2008, Savecom has a net asset value of approximately HK$7.8 million. Savecom has a net asset value of approximately HK$5.4 million based on its audited financial statements for the period ended 31 December 2007. We believe it is appropriate to apply the updated unaudited values of ABC Net Limited and Savecom, which reflects its more recent financial position.

Having considered that (i) the consideration is at a premium to the Prevailing Value; (ii) in assessing realisable values, additional liquidity discounts on certain of the investments will be applicable as discussed above; and (iii) the Company may have difficulties finding a ready buyer to dispose of the investments in the unlisted securities, we are of the view that an aggregate consideration of HK$252.3 million is fair and reasonable, and it represents an opportunity for a one-time realisation of the Company’s investment portfolio at a favourable price.

– 43 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Payment of proceeds from the Disposal

Subject to the completion of the Disposal Agreement, proceeds from the Disposal, together with the surplus cash of the Company will be distributed to the Shareholders in the form of the Special Dividend, which amounts to HK$273,868,476 or approximately HK$0.5866 per Share. The Shareholders will therefore receive the Special Dividend in cash.

From the financial year ended 31 March 2004 to 31 March 2008, the Company has declared aggregate dividends of HK$0.33 per Share. The table below sets out the dividend history of the Company since the financial year ended 31 March 2004.

Compared to the historical dividends declared by the Company, the Special Dividend of approximately HK$0.5866 per Share is substantial. In view of the fact that the Company has no intention to utilise these proceeds immediately and for other purposes such as further investments, it is reasonable for the Company to declare the Special Dividend. This will be an opportunity for the Shareholders to realise and receive cash proceeds from the Company’s investment portfolio, constituting principally the Discontinued Business. HCBC Communications, being a Shareholder, will also be entitled to the Special Dividend as per all other Shareholders. We believe this is a reasonable arrangement.

Financial year-end		Dividend per Share
		(HK$)
31 March 2008	Final dividend	–
	Interim dividend	0.02
31 March 2007	Final dividend	–
	Interim dividend	0.01
31 March 2006	Final dividend	0.04
	Interim dividend	0.02
31 March 2005	Final dividend	0.11
	Interim dividend	0.02
31 March 2004	Final dividend	0.10
	Interim dividend	0.01

– 44 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. Historical Share price performance and trading liquidity

Historical Share price performance

==> picture [403 x 400] intentionally omitted <==

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

The following chart sets out the daily historical closing prices of the Shares
traded on the Stock Exchange starting from 1 June 2007 up to and including the Latest
Practicable Date. To analyse the Special Dividend relative to the historical Share price,
we have analysed the Share performance from 1 June 2007 to the date of the
Announcement (“Relevant Period”). On 1 June 2007, the closing price of the Shares
was HK$0.88 per Share. Thereafter, the closing prices of the Share were generally
within the range of HK$0.51 per Share and HK$0.88 per Share during the period
between 1 June 2007 and 31 December 2007. From beginning of year 2008 up to 28
April 2008, the closing price of the Shares fluctuated between HK$0.48 per Share and
HK$0.69 per Share. On 29 April 2008, the Company announced that HCBC
Communications was in negotiation for a possible sale of its stake in the Company.
Trading in the Shares was suspended between 2 May 2008 and 30 May 2008 pending
the release of the Announcement. Upon release of the Announcement, prices of the
Shares increased to a high of HK$1.17 per Share on 2 June 2008. As at the Latest
Practicable Date, the closing price of the Share was HK$0.96 per Share.
Historical Share Prices for ABC Communications
$1.20
$1.00
$0.80
Special Dividend of HK$0.5866
$0.60
$0.40
$0.20
$0.00
Closing Price (HK$)
Jun 071 Jun 0715 Jul 073 Jul 0717 Jul 0731 Aug 0714 Aug 0728 Sep0711 Sep0725 Oct 0711 Oct 0726 Nov 079 Nov 0723 Dec 077 Dec 0721 089Jan 0823Jan Feb086 Feb0822 08Mar7 0825Mar Apr 089 Apr 0823 8May 08 May 0823 Jun 086 Jun 0823 Jul 088
----- End of picture text -----

From the beginning of year 2008 to the date prior to the Announcement, the Shares have generally traded around the level of the Special Dividend of approximately HK$0.5866 per Share, rendering the Disposal to be attractive relative to the historical prices of Shares.

After receiving the amount of Special Dividend, Shareholders have the option of (i) continue to hold on to the Shares which value will depend on the then prevailing market prices of the Shares; or (ii) accepting the Offer at HK$0.3992 per Share. The Offer is conditional upon completion of the Disposal Agreement.

– 45 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Historical trading volume of Shares

The following table sets out (i) the total trading volume of the respective months; (ii) the average daily trading volume of the respective months; and (iii) the percentage of average daily trading volume for the month to the total number of Shares issued as at the Latest Practicable Date.

			Percentage of
			average daily
			trading volume
		Average daily	for the month to
	Total trading	trading volume	total number of
	volume	for the month	Shares issued as
	(number of	(number of	at the Latest
Month	Shares)	Shares)	Practicable Date
		(Note a)
July 2007	22,235,900	1,058,852	0.23%
August 2007	10,324,500	448,891	0.10%
September 2007	6,322,000	332,737	0.07%
October 2007	14,081,100	670,529	0.14%
November 2007	6,194,000	281,545	0.06%
December 2007	3,364,000	177,053	0.04%
January 2008	3,714,000	168,818	0.04%
February 2008	6,109,883	321,573	0.07%
March 2008	3,536,000	186,105	0.04%
April 2008	46,884,000	2,232,571	0.48%
May 2008 (Note b)	–	–	0.00%
June 2008	128,558,100	6,427,905	1.38%
2 July 2008 -
15 July 2008	6,034,000	603,400	0.13%

Notes:

a) Based on 466,886,000 issued Shares as at the Latest Practicable Date
b) Trading of Shares were suspended from 2 May 2008 to 30 May 2008 pending the announcement of the Offer

The trading volume of Shares between the periods 1 July 2007 and 31 March 2008 was generally low, with highest average daily trading volume of 1,058,852 Shares in July 2007 and lowest average daily trading volume of 168,818 Shares in January 2008, which represent approximately 0.23% and approximately 0.04% of total number of Shares in issue as at the Latest Practicable Date. When the Company announced that HCBC Communications was in negotiation for a possible sale of its stake in the Company on 29 April 2008, there was a surge of the trading volume of Shares where 24.49 million Shares and 15.03 million Shares were traded on 29 April 2008 and 30 April 2008 respectively. The average daily trading volume also increased in June 2008 to approximately 6.43 million Shares, representing approximately 1.38% of the total number of Shares in issue as at the Latest Practicable Date.

– 46 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As previously discussed, the Shares have generally traded around the level of the Special Dividend of approximately HK$0.5866 per Share during the Relevant Period. In view of the low trading volume of Shares, we are of the opinion that Shareholders may find it difficult to dispose of their Shares in the open market and if possible, without exerting downward pressure on the price of the Shares. The Disposal, which will result in the payment of the Special Dividend, therefore provides an opportunity to the Independent Shareholders to partially realise their investment in the Company while retaining the Shares.

RECOMMENDATION

In arriving at our recommendation in respect of the Disposal, we have considered the principal factors and reasons as discussed above and as summarised below:

There will be a change in control of the Company after the Completion. As the Offeror, representing the new controlling Shareholder and management of the Company has no intention to carry on the Discontinued Business and price offered for the Discontinued Business is fair and reasonable as summarised below, it is reasonable for the Company to dispose of the Discontinued Business;
The consideration for the Disposal is at a premium to the Prevailing Value. In view of the fact that further liquidity discounts will be applicable to some of the investments, the consideration for the Disposal is fair and reasonable;
Subject to completion of the Disposal Agreement, Shareholders will be receiving approximately HK$0.5866 per Share as Special Dividend principally from the proceeds of the Disposal. This Special Dividend is substantial compared to the historical dividends paid out by the Company;
Given the historical Share price performance and the trading volume of Shares, the Special Dividend provides an opportunity to the Independent Shareholders to partially realise their investment in the Company while retaining the Shares; and
The Disposal will facilitate the Offer which represents a further alternative exit to Shareholders, in addition to disposing of the Shares in the open market.

In conclusion, we are of the view that the terms of the Disposal are on normal commercial terms as the consideration of the Disposal has been determined based on arm’s length negotiations. The use of net asset values for determining the aforesaid consideration and the settlement and payment arrangements are also commonly adopted in commercial negotiations. The Disposal, including its terms, is fair and reasonable so far as the Independent Shareholders are concerned and the entering into of the Disposal is in the interests of the Company and the Shareholders as a whole. In addition, the completion of the Disposal will facilitate the Offer which represents an alternative exit to Shareholders.

– 47 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Disposal and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of

Altus Capital Limited

Arnold Ip Executive Director

Sean Pey, Chang Executive Director

– 48 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The following is the text of a report received from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [102 x 37] intentionally omitted <==

18 July 2008

The Directors

ABC Communications (Holdings) Limited

Dear Sirs,

We set out below our report on the financial information (the “Financial Information”) of ABC Communications (Holdings) Limited (the “Company”) and its subsidiaries (together, the “Group”) set out in Sections I to IV below, for inclusion in the circular of the Company dated 18 July 2008 (the “Circular”) in connection with the proposed disposal of ABC Global Limited by the Company. The Financial Information comprises the consolidated balance sheets of the Company as at 31 March 2006, 2007 and 2008, the balance sheets of the Company as at 31 March 2006, 2007 and 2008, and the consolidated income statements, the consolidated statements of changes in equity and the consolidated cash flow statements of the Company for each of the years ended 31 March 2006, 2007 and 2008 (the “Relevant Periods”), and a summary of significant accounting policies and other explanatory notes.

The Company was incorporated in Bermuda on 5 August 1991 as a company with limited liability under the Companies Act 1981 of Bermuda.

As at the date of this report, the Company has direct and indirect interests in the subsidiaries as set out in Note 9 of Section II below. All of these companies are private companies.

The consolidated financial statements of the Company for each of the years ended 31 March 2006, 2007 and 2008 were audited by PricewaterhouseCoopers.

The Financial Information has been prepared based on the audited consolidated financial statements of the Company with no adjustment made thereon.

Directors’ responsibility

The directors of the Company during the Relevant Periods are responsible for the preparation and the true and fair presentation of the consolidated financial statements of the Company in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”).

– 49 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The directors of the Company are responsible for the preparation and the true and fair presentation of the Financial Information in accordance with HKFRSs. 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.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the Financial Information based on our examination and to report our opinion to you. We examined the audited consolidated financial statements of the Company for the Relevant Periods used in preparing the Financial Information, 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 Hong Kong Institute of Certified Public Accountants.

Opinion

In our opinion, the Financial Information, for the purpose of this report, gives a true and fair view of the state of affairs of the Company as at 31 March 2006, 2007 and 2008 and of the Group as at 31 March 2006, 2007 and 2008 and of the Group’s results and cash flows for the Relevant Periods.

– 50 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

I. FINANCIAL INFORMATION

(a) CONSOLIDATED BALANCE SHEETS

Note ASSETS Non-current assets Land use rights 6 Property, plant and equipment 7 Investment property 8 Available-for-sale financial assets 10 Long-term pledged deposits 11 Long-term deposits 12 Current assets Trade receivables 13 Other receivables, deposits and prepayments 14 Short-term pledged deposits 15 Short-term deposits 16 Cash and cash equivalents 17 Total assets	As at 31 March 2006 2007 HK$ HK$ 17,695,935 16,766,631 2,603,471 2,552,065 19,500,000 19,500,000 162,369,952 197,677,575 36,673,380 56,951,448 2,616,321 2,634,581	As at 31 March 2006 2007 HK$ HK$ 17,695,935 16,766,631 2,603,471 2,552,065 19,500,000 19,500,000 162,369,952 197,677,575 36,673,380 56,951,448 2,616,321 2,634,581	2008 HK$ 16,187,881 4,090,940 19,650,000 185,262,286 23,531,087 –
	241,459,059 --------------- 5,011,985 7,863,550 45,261,450 6,400,000 91,151,138	296,082,300 --------------- 13,831,572 7,596,316 45,733,932 – 57,028,051	248,722,194 --------------- 10,965,850 2,924,930 96,738,179 – 59,736,751
	155,688,123 --------------- ----------------------------- 397,147,182	124,189,871 --------------- ----------------------------- 420,272,171	170,365,710 --------------- ----------------------------- 419,087,904

– 51 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

As at 31 March 2006 2007 HK$ HK$ 46,688,600 46,688,600 271,482,846 271,464,998	As at 31 March 2006 2007 HK$ HK$ 46,688,600 46,688,600 271,482,846 271,464,998	2008 HK$ 46,688,600 244,165,210
318,171,446 --------------- 32,811,719 – 32,811,719 --------------- 2,058,517 542,354 38,367,264 5,195,882	318,153,598 --------------- 50,190,764 1,030,872 51,221,636 --------------- 2,564,310 508,500 38,817,407 9,006,720	290,853,810 --------------- 19,934,777 1,272,831
		21,207,608 --------------- 3,222,910 473,000 84,475,560 18,855,016
46,164,017 --------------- ----------------------------- 78,975,736 --------------- ----------------------------- 397,147,182 109,524,106 350,983,165	50,896,937 --------------- ----------------------------- 102,118,573 --------------- ----------------------------- 420,272,171 73,292,934 369,375,234	107,026,486 --------------- ----------------------------- 128,234,094 --------------- ----------------------------- 419,087,904

		63,339,224

		312,061,418

– 52 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(b) BALANCE SHEETS

2006 HK$ 178,506,674 --------------- 280,038 6,400,000 41,737,323 48,417,361 --------------- ----------------------------- 226,924,035	2007 HK$ 176,575,504 --------------- 318,345 – 41,734,016 42,052,361 --------------- ----------------------------- 218,627,865	2008 HK$ 178,287,374 --------------- 192,957 – 33,871,155
		34,064,112 --------------- ----------------------------- 212,351,486

46,688,600 179,427,680 226,116,280 --------------- 322,859 484,896	46,688,600 171,163,660 217,852,260 --------------- 292,887 482,718	46,688,600 164,551,335
		211,239,935 --------------- 577,355 534,196
807,755 --------------- ----------------------------- 226,924,035 47,609,606 226,116,280	775,605 --------------- ----------------------------- 218,627,865 41,276,756 217,852,260	1,111,551 --------------- ----------------------------- 212,351,486

		32,952,561

		211,239,935

– 53 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(c) CONSOLIDATED INCOME STATEMENTS

Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ 41,028,514 73,784,184 150,249,600 (31,265,511) (60,802,709) (133,522,994) 9,763,003 12,981,475 16,726,606 10,848,345 14,326,998 14,631,385 22,605,178 928,710 (15,676,361) (1,448,726) (1,612,791) (1,348,795) (16,442,989) (17,020,528) (18,427,756) 25,324,811 9,603,864 (4,094,921) (343,140) (953,551) (1,209,899) 24,981,671 8,650,313 (5,304,820) – (1,030,872) (241,959) 24,981,671 7,619,441 (5,546,779) 24,981,671 7,619,441 (5,546,779) 5.35 cents 1.63 cents (1.19) cents 5.35 cents 1.63 cents (1.19) cents 28,013,160 4,668,860 9,337,720	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ 41,028,514 73,784,184 150,249,600 (31,265,511) (60,802,709) (133,522,994) 9,763,003 12,981,475 16,726,606 10,848,345 14,326,998 14,631,385 22,605,178 928,710 (15,676,361) (1,448,726) (1,612,791) (1,348,795) (16,442,989) (17,020,528) (18,427,756) 25,324,811 9,603,864 (4,094,921) (343,140) (953,551) (1,209,899) 24,981,671 8,650,313 (5,304,820) – (1,030,872) (241,959) 24,981,671 7,619,441 (5,546,779) 24,981,671 7,619,441 (5,546,779) 5.35 cents 1.63 cents (1.19) cents 5.35 cents 1.63 cents (1.19) cents 28,013,160 4,668,860 9,337,720	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ 41,028,514 73,784,184 150,249,600 (31,265,511) (60,802,709) (133,522,994) 9,763,003 12,981,475 16,726,606 10,848,345 14,326,998 14,631,385 22,605,178 928,710 (15,676,361) (1,448,726) (1,612,791) (1,348,795) (16,442,989) (17,020,528) (18,427,756) 25,324,811 9,603,864 (4,094,921) (343,140) (953,551) (1,209,899) 24,981,671 8,650,313 (5,304,820) – (1,030,872) (241,959) 24,981,671 7,619,441 (5,546,779) 24,981,671 7,619,441 (5,546,779) 5.35 cents 1.63 cents (1.19) cents 5.35 cents 1.63 cents (1.19) cents 28,013,160 4,668,860 9,337,720
9,763,003 10,848,345 22,605,178 (1,448,726) (16,442,989) 25,324,811 (343,140) 24,981,671 –	12,981,475 14,326,998 928,710 (1,612,791) (17,020,528) 9,603,864 (953,551) 8,650,313 (1,030,872)	16,726,606 14,631,385 (15,676,361 (1,348,795 (18,427,756
		(4,094,921 (1,209,899
		(5,304,820 (241,959
24,981,671 24,981,671 5.35 cents 5.35 cents 28,013,160	7,619,441 7,619,441 1.63 cents 1.63 cents 4,668,860

– 54 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(d) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Attributable to equity holders of the Company Share capital Other reserves Retained earnings HK$ HK$ HK$ 46,688,600 290,937,064 57,549,565 – (13,573,141) – – (27,717,133) –	Attributable to equity holders of the Company Share capital Other reserves Retained earnings HK$ HK$ HK$ 46,688,600 290,937,064 57,549,565 – (13,573,141) – – (27,717,133) –	Attributable to equity holders of the Company Share capital Other reserves Retained earnings HK$ HK$ HK$ 46,688,600 290,937,064 57,549,565 – (13,573,141) – – (27,717,133) –	Total HK$ 395,175,229 (13,573,141 (27,717,133
– – – – –	(41,290,274) – (41,290,274) (51,357,460) (9,337,720)	– 24,981,671 24,981,671 – –	(41,290,274 24,981,671
			(16,308,603 (51,357,460 (9,337,720
– - - - - - - - - - - - - 46,688,600	(101,985,454) - - - - - - - - - - - - 188,951,610	24,981,671 - - - - - - - - - - - - 82,531,236	(77,003,783 - - - - - - - - - - - - 318,171,446

46,688,600 – – – – – –	188,951,610 15,707,011 15,707,011 – 15,707,011 – –	82,531,236 – – 7,619,441 7,619,441 (18,675,440) (4,668,860)	318,171,446 15,707,011
			15,707,011 7,619,441
			23,326,452 (18,675,440 (4,668,860
– - - - - - - - - - - - - 46,688,600	15,707,011 - - - - - - - - - - - - 204,658,621	(15,724,859) - - - - - - - - - - - - 66,806,377	(17,848 - - - - - - - - - - - - 318,153,598

– 55 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

Note Balance at 1 April 2007 Fair value losses on available-for-sale financial assets 10, 19 Net expenses recognised directly in equity Loss for the year Total recognised expenses for 2008 Dividends relating to 2007/08 29 Balance at 31 March 2008	Attributable to equity holders of the Company Share capital Other reserves Retained earnings HK$ HK$ HK$ 46,688,600 204,658,621 66,806,377 – (12,415,289) – – (12,415,289) – – – (5,546,779) – (12,415,289) (5,546,779) – – (9,337,720) – (12,415,289) (14,884,499) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 46,688,600 192,243,332 51,921,878	Total HK$ 318,153,598 (12,415,289)
		(12,415,289) (5,546,779)
		(17,962,068) (9,337,720)
		(27,299,788) - - - - - - - - - - - - 290,853,810

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(e) CONSOLIDATED CASH FLOW STATEMENTS

Note Cash flows from operating activities Cash (used in)/generated from operating activities 32(a) Interest paid Net cash (used in)/generated from operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of available-for-sale financial assets Proceeds from sale of property, plant and equipment 32(c) Net cash used in deregistration of a subsidiary 32(b) Proceeds from disposal of a subsidiary Proceeds from sale of available-for-sale financial assets Dividends received from available-for-sale financial assets Interest received Increase in pledged deposits (Increase)/decrease in long-term deposits (Increase)/decrease in short-term deposits Net cash used in investing activities	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ (10,187,608) (6,023,775) 18,960,540 (197,744) (712,631) (1,343,291) (10,385,352) (6,736,406) 17,617,249 --------------- --------------- --------------- (558,530) (752,320) (2,688,280) (34,386,006) (19,600,612) – 50,500 – 4,500 (3,370) (3,010) – – 100 – 32,369,684 – – 2,038,813 4,210,535 4,492,422 5,576,293 7,963,873 8,161,729 (30,345,758) (20,750,550) (17,583,886) (2,616,321) (18,260) 2,634,581 (6,400,000) 6,400,000 – (34,274,695) (22,550,244) (4,978,934) --------------- --------------- ---------------	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ (10,187,608) (6,023,775) 18,960,540 (197,744) (712,631) (1,343,291) (10,385,352) (6,736,406) 17,617,249 --------------- --------------- --------------- (558,530) (752,320) (2,688,280) (34,386,006) (19,600,612) – 50,500 – 4,500 (3,370) (3,010) – – 100 – 32,369,684 – – 2,038,813 4,210,535 4,492,422 5,576,293 7,963,873 8,161,729 (30,345,758) (20,750,550) (17,583,886) (2,616,321) (18,260) 2,634,581 (6,400,000) 6,400,000 – (34,274,695) (22,550,244) (4,978,934) --------------- --------------- ---------------	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ (10,187,608) (6,023,775) 18,960,540 (197,744) (712,631) (1,343,291) (10,385,352) (6,736,406) 17,617,249 --------------- --------------- --------------- (558,530) (752,320) (2,688,280) (34,386,006) (19,600,612) – 50,500 – 4,500 (3,370) (3,010) – – 100 – 32,369,684 – – 2,038,813 4,210,535 4,492,422 5,576,293 7,963,873 8,161,729 (30,345,758) (20,750,550) (17,583,886) (2,616,321) (18,260) 2,634,581 (6,400,000) 6,400,000 – (34,274,695) (22,550,244) (4,978,934) --------------- --------------- ---------------
	(10,385,352) --------------- (558,530) (34,386,006) 50,500 (3,370) – 32,369,684 2,038,813 5,576,293 (30,345,758) (2,616,321) (6,400,000)	(6,736,406) --------------- (752,320) (19,600,612) – (3,010) 100 – 4,210,535 7,963,873 (20,750,550) (18,260) 6,400,000	17,617,249 --------------- (2,688,280 – 4,500 – – – 4,492,422 8,161,729 (17,583,886 2,634,581 –
	(34,274,695) ---------------	(22,550,244) ---------------

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Note
Cash flows from financing
activities
New bank borrowings
Dividends paid
29
Net cash used in financing
activities
Net (decrease)/increase in cash
and cash equivalents
Cash and cash equivalents at
beginning of the year
Exchange gains /(losses) on cash
and cash equivalents
Cash and cash equivalents at
end of the year
17

Year ended 31 March
2006
2007
2008
HK$
HK$
HK$
32,446,755
17,480,361
–
(60,695,180)
(23,344,300)
(9,337,720)
(28,248,425)
(5,863,939)
(9,337,720)
---------------
-----------------------------
---------------
-----------------------------
---------------
-----------------------------
(72,908,472)
(35,150,589)
3,300,595
160,122,793
91,151,138
57,028,051
3,936,817
1,027,502
(591,895)
91,151,138
57,028,051
59,736,751

– 58 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

II NOTES TO THE FINANCIAL INFORMATION

1 General information

The Company is an investment holding company. The Group is principally engaged in providing financial information services, wireless applications development, securities trading system licensing, property and investment holdings.

The Company is incorporated in Bermuda with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited. The address of its registered office is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.

The ultimate holding company is H.C.B.C. Enterprises (BVI) Limited, a company incorporated in the British Virgin Islands.

The Financial Information is presented in Hong Kong Dollars unless otherwise stated.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of the Financial Information are set out below. These policies have been consistently applied to all the years presented.

2.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with HKFRS. They have been prepared under the historical cost convention, as modified by the revaluation of investment properties, buildings and available-for-sale financial assets.

The preparation of financial statements in conformity with HKFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the Financial Information are disclosed in Note 4.

(a) Adoption of new/revised standards and interpretations

For the year ended 31 March 2008

The following new/revised standards and revised interpretations are mandatory for the financial year ended 31 March 2008. The Group adopted those which are relevant to its operations.

HKAS 1 (Amendment) Capital disclosures HKFRS 7 Financial Instruments: Disclosures 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

These new/revised standards and interpretations above do not have material financial impact to the Group other than the disclosure impact on the consolidated financial statements.

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(b) New/revised standards and interpretations that are not yet effective and have not been early adopted by the Group

The following new/revised standards and interpretations have been published and are mandatory for the Group’s accounting periods beginning on or after 1 April 2008 or later periods, but the Group has not early adopted them:

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

HKAS 1 (Revised), “Presentation of Financial Statements” (effective from 1 January 2009). HKAS 1 (Revised) requires all owner changes in equity to be presented in a statement of changes in equity. All comprehensive income is presented in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). It requires presenting a statement of financial position as at the beginning of the earliest comparative period in a complete set of financial statements when there are retrospective adjustments or reclassification adjustments. However, it does not change the recognition, measurement or disclosure of specific transactions and other events required by other HKFRSs. The Group will apply HKAS 1 (Revised) from 1 January 2009.

HKAS 23 (Amendment), “Borrowing Costs” (effective from 1 January 2009). The amendment requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. The Group will apply HKAS 23 (Amendment) from 1 April 2009, but it is not expected to have any material impact on the Group’s financial statements.

HKAS 27 (Revised), “Consolidated and Separate Financial Statements” (effective from annual period beginning on or after 1 July 2009). The amendment requires non-controlling interests (i.e. minority interests) to be presented in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent. Total comprehensive income must be attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Changes in a parent’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within equity. When control of a subsidiary is lost, the assets and liabilities and related equity components of the former subsidiary are derecognised. Any gain or loss is recognised in profit or loss. Any investment retained in the former subsidiary is measured at its fair value at the date when control is lost. The Group will apply HKAS 27 (Revised) from 1 April 2010.

HKFRS 3 (Revised), “Business Combinations” (effective for business combinations with acquisition date on or after the beginning of the first annual reporting period beginning on or after 1 July 2009). The amendment may bring more transactions into acquisition accounting as combinations by contract alone and combinations of mutual entities are brought into the scope of the standard and the definition of a business has been amended slightly. It now states that the elements are ’capable of being conducted’ rather than ’are conducted and managed’. It requires considerations (including contingent consideration), each identifiable asset and liability to be measured at its acquisition-date fair value, except leases and insurance contracts, reacquired right, indemnification assets as well as some assets and liabilities required to be measured in accordance with other HKFRSs. They are income taxes, employee benefits, share-based payment and non current assets held for sale and discontinuing operations. Any

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

non-controlling interest in an acquiree is measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. The Group will apply HKFRS 3 (Revised) from 1 April 2010.

HKFRS 8 “Operating Segments”, (effective from 1 January 2009). HKFRS 8 replaces HKAS 14 and aligns segment reporting with the requirements of the US standard SFAS 131, ’Disclosures about segments of an enterprise and related information’. The new standard requires a ’management approach’, under which segment information is presented on the same basis as that used for internal reporting purposes. The Group will apply HKFRS 8 from 1 April 2009. The expected impact is still being assessed in detail by management.

HK(IFRIC)–Int 12, “Service Concession Arrangements” (effective from 1 January 2008). HK(IFRIC)–Int 12 applies to contractual arrangements whereby a private sector operator participates in the development, financing, operation and maintenance of infrastructure for public sector services. HK(IFRIC)–Int 12 is not relevant to the Group’s operations because none of the Group’s companies provides public sector services.

HK(IFRIC)–Int 13, “Customer Loyalty Programmes” (effective from 1 July 2008). HK(IFRIC)–Int 13 clarifies that where goods or services are sold together with a customer loyalty incentive (for example, loyalty points or free products), the arrangement is a multiple-element arrangement and the consideration receivable from the customer is allocated between the components of the arrangement using fair values. HK(IFRIC)–Int 13 is not relevant to the Group’s operations because none of the Group’s companies operates loyalty programmes.

HK(IFRIC)–Int 14, “HKAS 19–The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction” (effective from 1 January 2008). HK(IFRIC)–Int 14 provides guidance on assessing the limit in HKAS 19 on the amount of the surplus that can be recognised as an asset. It also explains how the pension asset or liability may be affected by a statutory or contractual minimum funding requirement. HK(IFRIC)–Int 14 is not relevant to the Group because the Group does not have any defined benefit plan.

HKAS 32 and HKAS 1 Amendments “Puttable Financial Instruments and Obligations Arising on Liquidation” (effective from 1 January 2009). The amendment requires some puttable financial instruments and some financial instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation to be classified as equity. The Group will apply HKAS 32 and HKAS 1 Amendments from 1 January 2009, but it is not expected to have any impact on the Group’s financial statements.

2.2 Consolidation

The Financial Information includes the financial statements of Company and all its subsidiaries made up to 31 March.

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured at 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. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated income statement.

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary in the consolidated financial statements to ensure consistency with the policies adopted by the Group.

In the Company’s balance sheet the investment in a subsidiary is stated at cost less provision for impairment losses (Note 2.7). The results of the subsidiaries are accounted for by the Company on the basis of dividend received and receivable.

2.3 Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.

2.4 Foreign currencies translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The Financial Information are presented in Hong Kong dollars, which is the Company’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

2.5 Property, plant and equipment

Building comprises mainly office. Building is shown at fair value, based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment are stated at historical cost less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are expensed in the income statement during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of building is credited to other reserves in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against other reserves directly in equity; all other decreases are expensed in the income statement.

Depreciation of property, plant and equipment is calculated using the straight-line method to allocate cost or revalued amounts to their residual values over their estimated useful lives as follows:

Building	25-40 years
Leasehold improvements	3-5 years
Computer equipment	3 years
Furniture and fixtures	5 years

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimate recoverable amount (Note 2.7).

Gains or losses on disposal are determined by comparing the proceeds with carrying amount and are recognised within other gains/(losses) – net in the income statement. When revalued assets are sold, the amounts included in other reserves are transferred to retained earnings.

2.6 Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property.

Land held under operating leases are classified and accounted for as investment property when the rest of the definition of investment property is met. The operating lease is accounted for as if it was a finance lease. Investment property is measured initially at its cost, including related transaction costs.

After initial recognition, investment property is carried at fair value. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. These valuations are performed in accordance with the guidance issued by the International Valuation Standards Committee. These valuations are reviewed annually by external valuers.

The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions.

The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the property. Some of those outflows are recognised as a liability, including finance lease liabilities in respect of land classified as investment property; others, including contingent rent payments, are not recognised in the income statement.

Subsequent expenditure is charged to the asset as carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed in the income statement during the financial period in which they are incurred.

Changes in fair values are recognised in the income statement as part of “other gains/(losses) -net”.

If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, and its fair value at the date of reclassification becomes its cost for accounting purposes.

If an item of property, plant and equipment becomes an investment property because its use has changed, any difference resulting between the carrying amount and the fair value of this item at the date of transfer is recognised in equity as a revaluation of property, plant and equipment under HKAS 16. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in the income statement.

2.7 Impairment of investments in subsidiaries and non-financial assets

Assets that have an indefinite useful life are not subject to amortisation, which are at least tested annually for impairment. Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

– 63 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

2.8 Financial Assets

(a) Classification

The Group classified its financial assets as available-for-sale financial assets and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are classified as long-term pledged deposits, long-term deposits, trade receivables, other receivables, deposits and prepayments, short-term pledged deposits, short-term deposits and cash and cash equivalents (Note 2.9) in the balance sheet.

(b) Recognition and initial measurement

Regular purchases and sales of investments are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss.

(c) Derecognition

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

(d) Gains or losses on subsequent measurement and interest income

Available-for-sale financial assets

Available-for-sale financial assets are subsequently carried at fair value. Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale financial assets are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences in monetary securities are recognised in income statement; translation differences on non-monetary securities are recognised in equity. Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in equity.

When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement as gains and losses from investment securities. Interest on available-for-sale securities calculated using the effective interest method is recognised in the income statement as part of other income. Dividends on available-for-sale equity instruments are recognised in the income statements as part of other income when the Group’s right to receive payments is established.

The fair values of quoted investments are based on current bid prices. The Group’s investment in private companies is classified as available-for-sale financial assets. If the investment does not have a quoted market price in an active market and the fair value cannot be reliably measured, the

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

investment is recognised in the balance sheet at cost less impairment losses. If there is objective evidence that the investment has been impaired, such impairment would be recognised in the income statement.

Loans and receivables

Loans and receivables are carried at amortised cost using the effective interest method less provision for impairment.

(e) Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement. Impairment testing of trade receivables is described in Note 2.9.

2.9 Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade and other receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered as an indicator that the trade receivables are impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The carrying amount of the assets is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within other operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for accounts receivables. Subsequent recoveries of amounts previously written off are credited against other operating expenses in the income statement.

2.10 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.

2.11 Share capital

Ordinary shares are classified as equity.

2.12 Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.13 Borrowings and borrowing costs

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Borrowing costs are expensed as incurred.

2.14 Current and deferred income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situation in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income taxation is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income taxation is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

2.15 Employee benefits

(a) Employee entitlements for annual leave are recognised when they accrue to employees.

Employee entitlements for sick leave and maternity leave are not recognised until the time of leave.

(b) The Group operates two defined contribution schemes for all qualified employees as follows:

Occupational Retirement Contributions Scheme

The Group operates an occupational retirement scheme registered under the Hong Kong Occupational Retirement Scheme Ordinance (Cap. 426). This scheme has been granted exemption pursuant to Section 5 of the Hong Kong Mandatory Provident Fund Schemes Ordinance (Cap.485) (“the MPF Ordinance”). The employees are either not required to make contribution or required to contribute an amount equal to 5% of the basic monthly salary and the employer’s monthly contribution is at a range of 5% to 10% of employees’ basic monthly salary. The Group’s contributions to the scheme may be reduced by contributions forfeited by those employees who leave the scheme prior to vesting fully in the contributions.

Mandatory Provident Fund Scheme

The Group also joins a mandatory provident fund scheme (“the MPF Scheme”) under the MPF Ordinance. Where staff elects to join the MPF Scheme, both the Group and staff are required to contribute 5% of the employees’ relevant income (capped at HK$2,000 per month). Contributions from the employer are 100% vested in the employees as soon as they are paid to the relevant MPF Scheme but all benefits derived from the mandatory contributions must be preserved until the employee reaches the retirement age of 65 subject to certain exceptions. Staff may elect to contribute more than the minimum as a voluntary contribution.

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Contributions for the above schemes are charged to the income statement as they become payable in accordance with the rules of the schemes. The assets of the schemes are held separately from those of the Group and managed by independent professional fund manager.

2.16 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.17 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown as follows:

(i) Financial quotation subscription fee income is recognised on a straight-line basis over the subscription period.
(ii) Revenue from securities trading system licensing and wireless applications is recognised when services are rendered.
(iii) Dividend income is recognised when the Company’s right to receive payment is established.
(iv) Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.
(v) Rental income is recognised on a straight-line basis over the lease term.

2.18 Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are expensed in the income statement on a straight-line basis over the period of the lease.

2.19 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

3 Financial risk management

The Group’s investment policy is to prudently invest all funds of the Group in a manner which will satisfy liquidity requirements, safeguard financial assets, and manage risks while optimising return on investments.

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, fair value interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s performance.

– 67 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Investment is governed by investment policies and risk management guidelines approved by the Board. Investment restrictions and guidelines form an integral part of risk management.

3.1 Market risk

(a) Foreign exchange risk

Foreign exchange risk is the risk of loss due to adverse movements in foreign exchange rates mainly relating to investments and borrowings denominated in Japanese Yen and United States Dollars.

To manage the foreign exchange risk arising from the recognised assets and liabilities, the Group finances its Japanese denominated assets with the borrowings that are denominated in the same currency. For the United States Dollars, as it is linked with Hong Kong Dollars, the foreign exchange risk is minimal.

The following table details the change in the Group’s profit for the year in response to reasonably possible changes in foreign exchange rates in relation to the bank borrowings to which the Group has exposure at the balance sheet date and that all the other variables remain constant.

Japanese Yen against +10% Hong Kong Dollars -10%	2006 Increase/ (decrease) in profit for the year HK$ (7,117,898) 7,117,898	2007 Increase/ (decrease) in profit for the year HK$ (8,900,817) 8,900,817	2008 Increase/ (decrease) in profit for the year HK$ (10,441,034) 10,441,034

(b) Interest rate risk

The Group’s principal interest bearing assets are bank deposits and bank borrowings. The tenure of the bank deposits is usually less than one year. The Group actively manages cash balances and deposits by comparing quotations from banks, with a view to select for the terms that are most favourable to the Group.

The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at fixed rates expose the Group to fair value interest-rate risk. During the Relevant Periods, the Group’s borrowings are at fixed rate and denominated in Japanese Yen.

As at 31 March 2006, 2007 and 2008, it is estimated that a general increase/decrease of 10 basis points in interest rates, with all other variables held constant, would decrease/increase the Group’s profit of the Relevant Periods by approximately as follows:

	2006	2007	2008
	Increase/	Increase/	Increase/
	(decrease)	(decrease)	(decrease)
	in profit for	in profit for	in profit for
	the year	the year	the year
	HK$	HK$	HK$
+10 basis points	(88,156)	(94,300)	(24,729)
– 10 basis points	88,441	94,528	24,773

The sensitivity analysis above has been determined assuming that the change in interest rate had occurred at the balance sheet date and had been applied to the interest-bearing financial instruments in existence at that date. The 10 basis points increase/decrease represents management’s assessment of a reasonably possible change in interest rate over the period until the next annual balance sheet date.

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ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(c) Price risk

The Group is exposed to equity securities price risk because of investments held by the Group are classified on the consolidated balance sheet as available-for-sale financial assets. To manage its price risk, the Group diversifies its portfolio, and any investments made have to be approved by management.

The table below summarises the impact of increases/decreases of the Group’s listed securities on the Group’s equity. The impact of a hypothetical 10% increase/decrease in price of the listed securities, with all other variables held constant, on the Group’s total equity is set out below:

		2006	2007	2008
		Increase/	Increase/	Increase/
		(decrease)	(decrease)	(decrease)
		in equity	in equity	in equity
		HK$	HK$	HK$
Listed securities
–Equity securities in Hong Kong	+10%	64,600	68,628	62,320
	-10%	(64,600)	(68,628)	(62,320)
–Equity securities in Japan	+10%	11,126,451	9,685,961	8,909,697
	-10%	(11,126,451)	(9,685,961)	(8,909,697)

3.2 Credit risk

The Group is exposed to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers. The maximum exposures to credit risk at the reporting date are the carrying amounts of these assets. Impairment provisions are made for losses that have been incurred at the balance sheet date. The Group has policies in place to ensure that services are made to customers with appropriate credit history. The credit risk on bank balances is limited as all deposits are placed with banks with ratings at A– or above. Management does not expect any losses from non-performance by these counterparties.

3.3 Liquidity risk

Prudent liquidity risk management includes maintaining sufficient cash and marketable securities, the availability of funding from an adequate amount of committed credit facilities and the ability to close out market positions. Management maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.

– 69 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

		Group
		Between		Between
	Less than	1 and	2	2 and 5
	1 year	years		years
	HK$	HK$		HK$
At 31 March 2006
Bank borrowings	38,803,952	345,033		33,156,752
Trade and other payables	5,195,882		–	–
Customer deposits	542,354		–	–
At 31 March 2007
Bank borrowings	39,722,146	33,834,435		17,138,420
Trade and other payables	8,679,002		–	–
Customer deposits	508,500		–	–
At 31 March 2008
Bank borrowings	85,275,694	20,104,090		–
Trade and other payables	18,504,198		–	–
Customer deposits	473,000		–	–
		Company
		Between		Between
	Less than	1 and	2	2 and 5
	1 year	years		years
	HK$	HK$		HK$
At 31 March 2006
Other payables	484,896		–	–
Amounts due to subsidiaries	322,859		–	–
At 31 March 2007
Other payables	415,862		–	–
Amounts due to subsidiaries	292,887		–	–
At 31 March 2008
Other payables	463,094		–	–
Amounts due to subsidiaries	577,355		–	–

3.4 Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

Total capital is calculated as ’equity’, as shown in the consolidated balance sheet, plus net debt. Net debt is calculated as total borrowings (including current and non-current borrowings as shown in the consolidated balance sheet) less cash and cash equivalents.

The Group’s primary objective when managing capital is to safeguard the Group’s ability to continue its businesses as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

– 70 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The Group structures its capital with due consideration to risk. The Group manages and adjusts its capital structure in the light of the changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, repurchase shares of the Company from shareholders, return capital to shareholders, issue new shares, or increase or reduce borrowings.

As at 31 March 2006, 2007 and 2008, the Group’s debt-to-equity ratio was 0.22, 0.28 and 0.36 respectively. For the purpose of calculating the debt-to-equity ratio, the Group defines debt as total debt (which includes bank loans) and equity as all components of equity.

3.5 Fair value estimation

The fair value of financial instruments traded active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Valuation techniques are used to determine fair value for the financial instruments.

4 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The estimates and assumptions 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.

(a) Estimate of fair value of investment property

The investment property of the Group was stated at fair value in accordance with the accounting policy stated in Note 2.6. The fair value of the investment property is determined by the directors of the Group with reference to the property valuation performed by Vigers Appraisal & Consulting Limited, a firm of independently qualified professional valuers. The fair value of investment property at the balance sheet date is set out in Note 8. Such valuation was based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. In making the judgment, consideration has been given to assumptions that are mainly based on market conditions existing at the balance sheet date and appropriate capitalisation rates. These estimates are regularly compared to actual market data and actual transactions entered into by the Group.

(b) Estimate of fair value of available-for-sale financial assets

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at each balance sheet date. The Group uses valuation techniques including referencing to the pricing of recent arm’s length transactions, option pricing models and dividend yield model for various available-for-sale financial assets that were not traded in active markets.

The unlisted available-for-sale securities mainly consist of the equity securities in Japan (Note 10). As of 31 March 2006, the fair values of these unlisted equity securities were estimated based on the recent transaction price of 75,000 Japanese Yen per share. For 31 March 2007 and 2008, key assumptions used by the Company included:

	2006	2007	2008
Dividend yield	N/A	5%	5%
Cost of borrowing	N/A	4.2%	4.4%

– 71 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The carrying amount of unlisted available-for-sale securities would be an estimated HK$3,303,781 lower or HK$3,728,185 higher, and HK$3,558,890 lower or HK$3,991,961 higher if the cost of borrowing used in the calculation differ by 25 basis point from management’s estimates for 31 March 2007 and 2008 respectively.

(c) Impairment of available-for-sale financial assets

The Group follows the guidance of HKAS 39 on determining when an investment is other-than-temporarily impaired. This determination requires significant judgment. In making this judgment, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

5 Segment information

Primary reporting format – business segments

At 31 March 2006, 2007 and 2008, the Group is organised on a worldwide basis into two main business segments for financing reporting purpose:

Financial quotation and securities trading system licensing
Wireless applications

Revenue consists of financial quotation subscription fee, sales from securities trading system licensing and wireless applications.

The Group also carries out other business such as holding of corporate assets and liabilities under corporate activities and investment holdings.

The segment results for the year ended 31 March 2006 are as follows:

Financial quotation and securities trading system licensing HK$ 40,704,607	Wireless applications HK$ 323,907	Corporate activities and investment holdings HK$ –	Total HK$ 41,028,514 25,324,811 (343,140) 24,981,671 – 24,981,671
1,547,127	(1,958,346)	25,736,030	25,324,811 (343,140
			24,981,671 –

– 72 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The segment results for the year ended 31 March 2007 are as follows:

Financial quotation and securities trading system licensing HK$ 73,003,982	Wireless applications HK$ 780,202	Corporate activities and investment holdings HK$ –	Total HK$ 73,784,184 9,603,864 (953,551) 8,650,313 (1,030,872) 7,619,441
2,400,435	(1,074,812)	8,278,241	9,603,864 (953,551
			8,650,313 (1,030,872

The segment results for the year ended 31 March 2008 are as follows:

Financial quotation and securities trading system licensing HK$ 149,890,405	Wireless applications HK$ 359,195	Corporate activities and investment holdings HK$ –	Total HK$ 150,249,600 (4,094,921) (1,209,899) (5,304,820) (241,959) (5,546,779)
4,755,238	(1,001,111)	(7,849,048)	(4,094,921 (1,209,899
			(5,304,820 (241,959

– 73 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Other segment terms included in the consolidated income statements are as follows:

	Financial
	quotation
	and		Corporate
	securities		activities
	trading		and
	system	Wireless	investment
	licensing	applications	holdings	Total
	HK$	HK$	HK$	HK$
Depreciation
Year ended 31 March 2006	499,099	17,206	1,182,480	1,698,785
Year ended 31 March 2007	720,474	19,014	64,238	803,726
Year ended 31 March 2008	1,075,162	14,157	60,086	1,149,405
Impairment loss on available-for-sale
financial assets
Year ended 31 March 2006	–	–	4,052,819	4,052,819
Year ended 31 March 2007	–	–	–	–
Year ended 31 March 2008	–	–	–	–

Segment assets consist primarily of property, plant and equipment, trade and other receivables and cash and cash equivalents.

Assets included under corporate activities and investment holdings consist primarily of property, plant and equipment, land use rights, investment property, available-for-sale financial assets, pledged deposit, other receivables, deposit, cash and cash equivalents and other unallocated assets.

Segment liabilities comprise operating liabilities.

Liabilities included under corporate activities and investment holdings comprise other payables and other unallocated liabilities.

Capital expenditure comprises additions to property, plant and equipment (Note 7).

The segment assets and liabilities at 31 March 2006 and capital expenditure for the year then ended are as follows:

Assets Liabilities Capital expenditure	Financial quotation and securities trading system licensing HK$ 8,201,397 7,524,155 538,946	Wireless applications HK$ 127,512 58,755 5,452	Corporate activities and investment holdings HK$ 388,818,273 71,392,826 14,132	Total HK$ 397,147,182

				78,975,736

				558,530

– 74 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

The segment assets and liabilities at 31 March 2007 and capital expenditure for the year then ended are as follows:

Assets Liabilities Capital expenditure	Financial quotation and securities trading system licensing HK$ 15,196,174 12,271,633 710,970	Wireless applications HK$ 504,113 125,290 23,741	Corporate activities and investment holdings HK$ 404,571,884 89,721,650 17,609	Total HK$ 420,272,171

				102,118,573

				752,320

The segment assets and liabilities at 31 March 2008 and capital expenditure for the year then ended are as follows:

Assets Liabilities Capital expenditure	Financial quotation and securities trading system licensing HK$ 29,086,622 21,081,417 2,667,330	Wireless applications HK$ 160,626 202,980 –	Corporate activities and investment holdings HK$ 389,840,656 106,949,697 20,950	Total HK$ 419,087,904

				128,234,094

				2,688,280

Secondary reporting format – geographical segments

The Group’s two business segments operated in Hong Kong.

Revenue is allocated based on the places/countries in which customers are located. All revenue of the Group was generated in Hong Kong.

– 75 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

Total assets

Hong Kong Asia – Japan – Others Canada and United States	2006 HK$ 235,422,300 143,711,263 931 18,012,688 397,147,182	2007 HK$ 223,279,980 168,919,295 896 28,072,000 420,272,171	2008 HK$ 234,447,782 154,886,339 1,036 29,752,747
			419,087,904

Total assets are allocated based on where the assets are located.

Capital expenditure

		2006	2007	2008
		HK$	HK$	HK$
Hong	Kong	558,530	752,320	2,688,280

Capital expenditure is allocated based on where the assets are located.

6 Land use rights

The Group’s interest in leasehold land represents prepaid operating lease payments and the net book value are analysed as follows:

	2006	2007	2008
	HK$	HK$	HK$
Lease of between 10 to 50 years and its net book value
at 31 March	17,695,935	16,766,631	16,187,881

None of the properties has been pledged as at 31 March 2006, 2007 and 2008.

The leasehold land is located at 2/F, Jade Mansion, 40 Waterloo Road, Yaumatei, Kowloon, Hong Kong.

– 76 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

7 Property, plant and equipment

Group

Building Leasehold improvements HK$ HK$ 2,583,478 979,694 – – (1,041,962) – (60,165) (968,935) 1,481,351 10,759	Building Leasehold improvements HK$ HK$ 2,583,478 979,694 – – (1,041,962) – (60,165) (968,935) 1,481,351 10,759	Computer equipment HK$ 1,038,602 535,354 (6,730) (506,922) 1,060,304	Furniture and fixtures HK$ 194,931 23,176 (4,287) (162,763) 51,057	Total HK$ 4,796,705 558,530 (1,052,979) (1,698,785) 2,603,471 25,102,658 (22,499,187) 2,603,471 Total HK$ 2,603,471 752,320 (803,726) 2,552,065 25,534,910 (22,982,845) 2,552,065
1,481,351 –	11,185,870 (11,175,111)	9,669,983 (8,609,679)	2,765,454 (2,714,397)	25,102,658 (22,499,187
1,481,351 10,759 Building Leasehold improvements HK$ HK$ 1,481,351 10,759 – – (42,324) (10,759) 1,439,027 –		1,060,304 Computer equipment HK$ 1,060,304 752,320 (733,068) 1,079,556	51,057 Furniture and fixtures HK$ 51,057 – (17,575) 33,482
1,439,027 –	11,067,548 (11,067,548)	10,262,881 (9,183,325)	2,765,454 (2,731,972)	25,534,910 (22,982,845
1,439,027	–	1,079,556	33,482

– 77 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

Building Leasehold improvements HK$ HK$ 1,439,027 – – – (42,324) – 1,396,703 –	Building Leasehold improvements HK$ HK$ 1,439,027 – – – (42,324) – 1,396,703 –	Computer equipment HK$ 1,079,556 2,668,339 (1,089,690) 2,658,205	Furniture and fixtures HK$ 33,482 19,941 (17,391) 36,032	Total HK$ 2,552,065 2,688,280 (1,149,405)
				4,090,940

1,439,027 (42,324)	11,067,548 (11,067,548)	12,278,689 (9,620,484)	2,748,594 (2,712,562)	27,533,858 (23,442,918)
1,396,703	–	2,658,205	36,032	4,090,940

(i) Depreciation expenses of HK$1,698,785, HK$803,726 and HK$1,149,405 for the years ended 31 March 2006, 2007 and 2008 respectively have been expensed in General and Administrative expenses. Building was revalued at 31 March 2006 and 2007 on the basis of its depreciated replacement cost estimated by Vigers Appraisal & Consulting Limited, an independent professional valuer, employed by the Group.
(ii) If the building was stated on the historical cost basis, the amounts would be as follows:

Cost Accumulated depreciation Net book amount	2006 HK$ 3,698,023 (1,134,060) 2,563,963	2007 HK$ 3,698,023 (1,208,020) 2,490,003	2008 HK$ 3,698,023 (1,281,980)
			2,416,043

(iii) None of the properties has been pledged as at 31 March 2006, 2007 and 2008.

(iv) The analysis of the cost or valuation at 31 March 2006 of the above assets is as follows:

At cost At valuation – 2006	Building Leasehold improvements HK$ HK$ – 11,185,870 1,481,351 – 1,481,351 11,185,870	Computer equipment HK$ 9,669,983 – 9,669,983	Furniture and fixtures HK$ 2,765,454 – 2,765,454	Total HK$ 23,621,307 1,481,351
				25,102,658

– 78 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

The analysis of the cost or valuation at 31 March 2007 of the above assets is as follows:

At cost At valuation – 2007	Building Leasehold improvements HK$ HK$ – 11,067,548 1,439,027 – 1,439,027 11,067,548	Computer equipment HK$ 10,262,881 – 10,262,881	Furniture and fixtures HK$ 2,765,454 – 2,765,454	Total HK$ 24,095,883 1,439,027
				25,534,910

The analysis of the cost or valuation at 31 March 2008 of the above assets is as follows:

Building Leasehold improvements HK$ HK$ At cost – 11,067,548 At valuation – 2007 1,439,027 – 1,439,027 11,067,548 Investment property Beginning of the year Fair value gain (included in other gains/(losses) – net) (Note 24) End of the year	Computer equipment HK$ 12,278,689 – 12,278,689 2006 HK$ 18,920,000 580,000 19,500,000	Furniture and fixtures HK$ 2,748,594 – 2,748,594 2007 HK$ 19,500,000 – 19,500,000	Total HK$ 26,094,831 1,439,027
			27,533,858

			2008 HK$ 19,500,000 150,000
			19,650,000

8 Investment property

Particulars of an investment property held by the Group:

Property	Type	Lease term
1/F, Jade Mansion,	Office space	Lease of 50 years
40 Waterloo Road,
Yaumatei, Kowloon,
Hong Kong

The cost of the investment property was HK$23,980,180 as at 31 March 2006, 2007 and 2008. The investment property was revalued at 31 March 2006, 2007 and 2008 on the basis of open market value by Vigers Appraisal & Consulting Limited, an independent professional valuer, employed by the Group.

In the consolidated income statements, direct operating expenses included HK$78,582, HK$78,942 and HK$18,697 relating to an investment property that was let for the years ended 31 March 2006, 2007 and 2008 respectively.

– 79 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

9 Interests in subsidiaries

Unlisted shares, at cost Less: Provision for impairment losses Amounts due from subsidiaries Less: Provision for impairment losses Amounts due to subsidiaries	2006 HK$ 253,304,023 (230,828,793) 22,475,230 - - - - - - - - - - - - 354,058,676 (198,027,232) 156,031,444 ------------ --------------------------------------------- 178,506,674 (322,859) 178,183,815	Company 2007 HK$ 253,304,014 (218,352,675) 34,951,339 - - - - - - - - - - - - 282,446,272 (140,822,107) 141,624,165 ------------ --------------------------------------------- 176,575,504 (292,887) 176,282,617	2008 HK$ 248,961,546 (222,082,671) 26,878,875 - - - - - - - - - - - - 264,137,599 (112,729,100) 151,408,499 ------------ --------------------------------------------- 178,287,374 (577,355) 177,710,019

Movement on the provision for impairment of amounts due from subsidiaries are as follows:

Beginning of the year Write-back for impairment of amounts due from subsidiaries Write-off of provisions relating to deregistration of subsidiaries End of the year	2006 HK$ 198,215,355 (188,123) – 198,027,232	2007 HK$ 198,027,232 (1,169,221) (56,035,904) 140,822,107	2008 HK$ 140,822,107 (7,087,687) (21,005,320) 112,729,100

The amounts due from/(to) subsidiaries are unsecured, interest-free and repayable on demand.

– 80 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

Particulars of the principal subsidiaries as at 31 March 2008 are as follows:

	Place of		Issued and
	incorporation/	Principal	paid up	Class of shares	Interest held
Name	operation	activities	capital	held	Directly Indirectly
ABC Communications	Hong Kong	Investment	HK$1,000	Ordinary	100%	–
Limited		holding		HK$23,300,000
				(non-voting
				deferred
				shares)
ABC Communications	Hong Kong	Investment	HK$2	Ordinary	–	100%
(Cellular) Limited		holding
ABC Communications	Hong Kong	Investment	HK$2	Ordinary	–	100%
(Investments) Limited		holding
ABC Financial	Hong Kong	Financial	HK$30	Ordinary	–	99.95%
Information Services		information
Limited		services
ABC Global Limited	British Virgin	Investment	US$1	Ordinary	100%	–
	Islands/Hong	holding
	Kong
ABC QuickSilver Limited	British Virgin	Wireless	US$25	Ordinary	–	99.95%
	Islands/Hong	applications
	Kong	development
Abccom Technology	British Virgin	Investment	US$1	Ordinary	100%	–
Limited	Islands/Hong	holding
	Kong
Choudary Limited	British Virgin	Investment	US$11,621	Ordinary	100%	–
	Islands/Hong	holding
	Kong
Gine Well Properties	Hong Kong	Property	HK$2	Ordinary	–	100%
Limited		investment
On Smart Enterprises	British Virgin	Investment	US$1	Ordinary	100%	–
Limited	Islands/Hong	holding
	Kong
QuotePower International	Hong Kong	Financial	HK$67,264,000	Ordinary	–	99.95%
Limited		information
		services and
		securities
		trading system
		licensing
White Iron Limited	British Virgin	Investment	US$2	Ordinary	100%	–
	Islands/Hong	holding
	Kong

– 81 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

10 Available-for-sale financial assets

Beginning of the year Additions Disposals Exchange differences transferred to equity (Note 19) Changes in fair value transferred to equity (Note 19) Impairment loss charged to income statement End of the year Available-for-sale financial assets include the following: Listed securities – Equity securities in Hong Kong (Note a) – Equity securities in Japan (Note b) Unlisted securities – Equity securities in Japan (Note c) – Internet fund in USA and Canada (Note d) Total Market value of listed securities	2006 HK$ 182,399,704 34,386,006 (36,789,798) (11,998,253) (1,574,888) (4,052,819) 162,369,952 2006 HK$ 646,000 111,264,509 32,446,755 18,012,688 162,369,952 111,910,509	2007 HK$ 162,369,952 19,600,612 – 1,746,100 13,960,911 – 197,677,575 2007 HK$ 686,280 96,859,604 72,059,691 28,072,000 197,677,575 97,545,884	2008 HK$ 197,677,575 – – 29,125,670 (41,540,959) –
			185,262,286

			2008 HK$ 623,200 89,096,969 65,789,370 29,752,747
			185,262,286

			89,720,169

The carrying amounts of the available-for-sale financial assets are denominated in the following currencies:

Japanese Yen US Dollar Hong Kong Dollar	2006 HK$ 143,711,264 18,012,688 646,000 162,369,952	2007 HK$ 168,919,295 28,072,000 686,280 197,677,575	2008 HK$ 154,886,339 29,752,747 623,200
			185,262,286

Notes:

(a) The investment represents the equity securities invested in Smartone Telecommunications Holdings Limited.
(b) The investment represents the equity securities invested in eAccess Limited (“eAccess”).
(c) The investment represents the equity securities invested in eMobile Limited (“eMobile”).
(d) The investment represents the equity securities invested in the Wireless Internet Fund. The future cost of investment committed by the Group is shown in Note 33.

– 82 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

11 Long-term pledged deposits

The effective interest rate of long-term pledged deposits is as follows:

			2006	2007	2008
			HK$	HK$	HK$
Long-term	pledged	deposits	4.79%	4.86%	3.94%

The deposits have an average original maturity of 997 days, 685 days and 424 days as at 31 March 2006, 2007 and 2008 respectively. Long-term pledged deposits bear interests at fixed interest rates or at interest rates which are re-priced every few months at the prevailing market rates.

The carrying amounts of the long-term pledged deposits are denominated in the following currency:

HK Dollar US Dollar	2006 HK$ – 36,673,380 36,673,380	2007 HK$ – 56,951,448 56,951,448	2008 HK$ 5,089,028 18,442,059
			23,531,087

Fixed deposits have been placed in banks as securities against the Group’s bank loans and certain guarantees provided by the bank. The carrying amount of these assets approximates their fair value.

The maximum exposure to credit risk at the reporting date is the carrying amount of the long-term pledged deposits mentioned above.

12 Long-term deposits

The effective interest rate of long-term deposits is as follows:

		2006	2007	2008
		HK$	HK$	HK$
Long-term	deposits	4.79%	4.79%	–

The deposits have an average maturity of 997 days and 632 days as at 31 March 2006 and 2007 and bear interest at fixed interest rate.

The carrying amounts of the long-term deposits are denominated in the following currency:

		2006	2007	2008
		HK$	HK$	HK$
US	Dollar	2,616,321	2,634,581	–

The carrying amounts of these assets approximate their fair values. The maximum exposure to credit risk at the reporting date is the carrying amount of long-term deposits mentioned above.

– 83 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

13 Trade receivables

Trade receivables Less: provision for impairment of receivables Trade receivables – net	2006 HK$ 5,012,317 (332) 5,011,985	2007 HK$ 13,831,572 – 13,831,572	2008 HK$ 10,965,850 –
			10,965,850

Trade receivables are due upon the respective dates of invoices. As at 31 March 2006, 2007 and 2008, trade receivables of HK$5,011,985, HK$13,831,572 and HK$10,965,850 respectively were past due but not impaired. These related to a number of independent customers from whom there is no recent history of default. The aging analysis of these trade receivables is as follows:

0 – 3 months 4 – 6 months Over 6 months	2006 HK$ 5,003,398 8,587 – 5,011,985	2007 HK$ 13,285,234 546,338 – 13,831,572	2008 HK$ 10,878,250 28,600 59,000
			10,965,850

The carrying amounts of trade receivables approximate their fair values and they are denominated in Hong Kong dollars. The maximum exposure to credit risk at the reporting date is the carrying amount of trade receivables mentioned above. The Group does not hold any collateral as security.

14 Other receivables, deposits and prepayments

The carrying amounts of the other receivables, deposits and prepayments are denominated in the following currencies:

Hong Kong Dollar New Taiwan Dollar Hong Kong Dollar	2006 HK$ 2,901,496 4,962,054 7,863,550 2006 HK$ 280,038	Group 2007 HK$ 2,677,039 4,919,277 7,596,316 Company 2007 HK$ 318,345	2008 HK$ 2,924,930 –
			2,924,930

			2008 HK$ 192,957

The carrying amounts of other receivables, deposits and prepayments approximate their fair values. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above.

– 84 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

15 Short-term pledged deposits

Short-term pledged deposits have been placed in banks as securities against the Group’s bank loans and certain guarantees provided by the banks. The carrying amounts of the short-term pledged deposit are denominated in the US dollars.

The effective interest rate of short-term pledged deposits is as follows:

			2006	2007	2008
			HK$	HK$	HK$
Short-term	pledged	deposits	4.54%	5.19%	3.44%

The short-term pledged deposits have an average maturity of 91 days, 97 days and 127 days as at 31 March 2006, 2007 and 2008 respectively.

The carrying amounts of the short-term pledged deposits are denominated in the following currency:

		2006	2007	2008
		HK$	HK$	HK$
US	Dollar	45,261,450	45,733,932	96,738,179

16 Short-term deposits

The effective interest rate of short-term deposits is as follows:

		2006	2007	2008
		HK$	HK$	HK$
Short-term	deposits	4.15%	–	–

The short-term deposits have an average maturity of 150 days as at 31 March 2006.

The carrying amounts of the short-term deposits are denominated in the following currency:

			Group	Company	Company
			2006	2007	2008
			HK$	HK$	HK$
Hong	Kong	Dollar	6,400,000	–	–

17 Cash and cash equivalents

Cash at bank and in hand Short-term bank deposits	2006 HK$ 23,166,365 67,984,773 91,151,138	Group 2007 HK$ 22,135,181 34,892,870 57,028,051	2008 HK$ 37,873,366 21,863,385
			59,736,751

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APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

Cash at bank and in hand Short-term bank deposits	2006 HK$ 21,337,323 20,400,000 41,737,323	Company 2007 HK$ 21,649,691 20,084,325 41,734,016	2008 HK$ 29,871,155 4,000,000
			33,871,155

The effective interest rate on short-term bank deposits was 4.39%, 4.48% and 1.86% for the years ended 31 March 2006, 2007 and 2008 respectively. These deposits have an average maturity of 60 days, 43 days and 21 days as at 31 March 2006, 2007 and 2008 respectively.

The carrying amounts of the cash and cash equivalents are denominated in the following currencies:

Hong Kong Dollar US dollar Others Hong Kong Dollar US dollar Others 18 Share capital Authorised: 600,000,000 ordinary shares of HK$0.1 each Issued and fully paid: 466,886,000 ordinary shares of HK$0.1 each Share options:	2006 HK$ 22,517,602 68,612,063 21,473 91,151,138 2006 HK$ 20,671,098 21,061,330 4,895 41,737,323 2006 HK$ 60,000,000 46,688,600	Group 2007 HK$ 20,225,581 36,798,831 3,639 57,028,051 Company 2007 HK$ 19,740,987 21,990,286 2,743 41,734,016 2007 HK$ 60,000,000 46,688,600	2008 HK$ 19,455,036 40,278,296 3,419
			59,736,751

			2008 HK$ 4,453,861 29,414,911 2,383
			33,871,155

			2008 HK$ 60,000,000

			46,688,600

(a) Expired Scheme

Under the share option scheme of the Company adopted on 12 September 1991 (the “Expired Scheme”), the Directors may, at their discretion, invite full-time employees of the Group, including executive directors, to take up options to subscribe for shares in the Company at a price equal to the higher of the nominal value of the shares or not less than 80% of the average of the closing prices of the shares of

– 86 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

the Company for the five trading days immediately preceding the date of offer of the option. The maximum number of shares in respect of which options may be granted may not exceed 10% of the issued share capital of the Company at the time of granting of the options.

The Expired Scheme expired on 11 September 2001 (“Expiration Date”) without prejudice to the rights and benefits of and attached to those options granted there under which are outstanding as at that date. No further grants were made after the Expiration Date. Following the expiration, the provisions of the Expired Scheme remain in force to the extent necessary to give effect to the exercise of any option granted prior to the Expiration Date.

The share options granted are not recognised in the financial statements as they are exempted under HKFRS 2 transitional arrangement. As at 31 March 2006, 2007 and 2008 the total number of shares which may be issued pursuant to exercise of options granted under the Expired Scheme was 2,500,000 shares, which represented approximately 0.5% of the total issued share capital of the Company as at 31 March 2006, 2007 and 2008 respectively.

Details of the share options outstanding at 31 March 2006, 2007 and 2008 which have been granted to and accepted by the directors under the Expired Scheme are as follows:

Name of director Date of share options granted Ms. Yeung Shuk Kwan, Patricia 23 February 2000 23 February 2000 Mr. George Joseph Ho 23 February 2000 23 February 2000	Outstanding options as at 31 March 2006, 2007 and 2008 Exercise price Exercise period HK$ 1,000,000 1.41 23 March 2000 to 22 February 2010 1,000,000 1.41 23 February 2001 to 22 February 2010 250,000 1.41 23 March 2000 to 22 February 2010 250,000 1.41 23 February 2001 to 22 February 2010 2,500,000

No options were exercised by the directors during the years ended 31 March 2006, 2007 and 2008.

The outstanding share options granted and being accepted by the directors under the Company’s share option scheme were as follows:

Date of share options granted	Outstanding number of options as at 31 March 2006, 2007 and 2008	Exercise price	Exercise period
23 February 2000 23 February 2000	1,250,000 1,250,000	HK$ 1.41 1.41	23 March 2000 to 22 February 2010 23 February 2001 to 22 February 2010
	2,500,000

– 87 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

No share options were granted or exercised during the years ended 31 March 2006, 2007 and 2008.

(b) Existing Scheme

Under the share options scheme (the “Existing Scheme”) approved by the shareholders at a Special General Meeting of the Company held on 27 March 2002 (“Adoption Date”), the Directors may, at their discretion, invite any participants to take up options to subscribe for fully paid ordinary shares (“Shares”) in the Company subject to the terms and conditions stipulated therein.

Details of the Existing Scheme are as follows:

(i) Purpose

The purpose of the Existing Scheme is to provide incentives or rewards to Participants thereunder for their contribution to the Group and/or to enable the Group to recruit and retain high-calibre employees and attract human resources that are valuable to the Group and any invested entity.

(ii) Participants

The Directors may, at their discretion, invite any Participant including any executive director, non-executive director or employee (whether full time or part time), shareholder, supplier, customers, consultant, adviser, other service provider or any joint venture partner, business or strategic alliance partner, in each case, of the Company, any subsidiary of the Company or any Invested Entity, to take up options to subscribe for Shares in the Company.

(iii) Maximum number of shares

(1) 30% Limit

The limit on the number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Existing Scheme and Expired Scheme of the Company must not exceed 30% of the Shares in issue from time to time (the “Scheme Limit”).

(2) 10% Limit

In addition to the Scheme Limit, and subject to the following, the total number of shares which may be issued upon exercise of all options granted under the Existing Scheme and Expired Scheme of the Company must not in aggregate exceed 10% of the Shares in issue as at the date of approval of the Scheme (excluding any options which have lapsed) (the “Scheme Mandate Limited”).

The Company may, from time to time, renew the Scheme Mandate Limit by obtaining the approval of its shareholders in general meeting. The Company may also seek separate approval by its shareholders in general meeting for granting options beyond the renewed Scheme Mandate Limit provided the options in excess of such limit are granted only to Participants specifically identified.

(iv) Maximum Entitlement of Each Participant

Unless approved by shareholders of the Company, the total number of securities issued and to be issued upon exercise of the options granted to each Participant (including both exercised and outstanding options) in any 12 month period must not exceed 1% of the Shares in issue. Where any further grant of options to a Participant would result in the Shares issued and to be issued upon exercise of all options granted and to be granted to such person (including exercised, cancelled and outstanding options) in the 12 month period up to and including the date of such further grant

– 88 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

representing in aggregate over 1% of the relevant class of securities in issue, such further grant must be separately approved by shareholders of the Company in general meeting with such Participant and his associates abstaining from voting.

(v) Price of Shares

The exercise price must be at least the higher of: (a) the nominal value of a Share at the date of grant; (b) the closing price of a Share as stated in the daily quotations sheet of the Stock Exchange on the date of grant, which must be a business day and (c) the average closing price of a Share as stated in the Stock Exchange’s daily quotations sheets for the five business days immediately preceding the date of grant.

(vi) Amount payable upon acceptance of the option

Acceptance of an offer of the grant of an option shall be by the delivery to and receipt by the Company at its registered office of the form of acceptance sent to the Participant duly completed and signed by the Participant together with a remittance of HK$10.

(vii) Time of Exercise of Option

An option shall be exercisable at such time(s) or during such period(s) and subject to such terms, as the Directors may, at their discretion specify, provided that no option shall be exercisable no earlier than one month after and no later than ten years after its date of grant. Unless otherwise determined by the Directors at their sole discretion, there is no requirement of a minimum period for which an option must be held or a performance target which must be achieved before an option can be exercised.

(viii) The remaining life of the Existing Scheme

The life of the Existing Scheme is 10 years commencing on the Adoption Date and will end on 26 March 2012.

(ix) Shares available for issue under the Existing Scheme

As at 31 March 2006, 2007 and 2008, the total number of shares available for issue under the Existing Scheme was 44,188,600 shares which represented approximately 9.5% of the total issued share capital of the Company as at 31 March 2006, 2007 and 2008 respectively.

The share options granted are not recognised in the financial statements as they are exempted under HKFRS 2 transitional arrangement.

– 89 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

19 Reserves

(a) Group

General reserve HK$ 2,000,000 – – – – –	Asset replacement reserve HK$ 5,150,000 – – – – –	Investment revaluation reserve HK$ 116,248,814 – – – (13,573,141) (27,717,133)	Contributed surplus HK$ 90,681,578 – (51,357,460) (9,337,720) – –	Share premium HK$ 76,470,297 – – – – –	Capital redemption reserve HK$ 176,000 – – – – –	Capital reserve HK$ 278,385 – – – – –	Exchange reserve HK$ (68,010) – – – – –	Retained profits HK$ 57,549,565 24,981,671 – – – –	Total HK$ 348,486,629 24,981,671 (51,357,460) (9,337,720) (13,573,141) (27,717,133)
2,000,000 – – – – 2,000,000 – – –	5,150,000 – – – – 5,150,000 – – –	74,958,540 – – – 15,707,011 90,665,551 – – (12,415,289)	29,986,398 – – – – 29,986,398 – – –	76,470,297 – – – – 76,470,297 – – –	176,000 – – – – 176,000 – – –	278,385 – – – – 278,385 – – –	(68,010) – – – – (68,010) – – –	82,531,236 7,619,441 (18,675,440) (4,668,860) – 66,806,377 (5,546,779) (9,337,720) –	271,482,846 7,619,441 (18,675,440) (4,668,860) 15,707,011
									271,464,998 (5,546,779) (9,337,720) (12,415,289)
2,000,000	5,150,000	78,250,262	29,986,398	76,470,297	176,000	278,385	(68,010)	51,921,878	244,165,210

(b) Company

Contributed surplus HK$ 140,737,413 – (51,357,460) (9,337,720)	Share premium HK$ 76,470,297 – – –	Capital redemption reserve HK$ 176,000 – – –	Retained profits HK$ 10,753,052 11,986,098 – –	Total HK$ 228,136,762 11,986,098 (51,357,460 (9,337,720
80,042,233 – – – 80,042,233 – –	76,470,297 – – – 76,470,297 – –	176,000 – – – 176,000 – –	22,739,150 15,080,280 (18,675,440) (4,668,860) 14,475,130 2,725,395 (9,337,720)	179,427,680 15,080,280 (18,675,440 (4,668,860
				171,163,660 2,725,395 (9,337,720
80,042,233	76,470,297	176,000	7,862,805	164,551,335

– 90 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

20 Bank borrowings, secured

Non-current Bank borrowings (Note (a)) Current Bank borrowings	2006 HK$ 32,811,719 38,367,264 71,178,983	2007 HK$ 50,190,764 38,817,407 89,008,171	2008 HK$ 19,934,777 84,475,560
			104,410,337

(a) The bank borrowings as at 31 March 2008 will mature on 29 May 2009 and bear interest at 1.68% per annum.

As at 31 March 2006, 2007 and 2008, the Group’s borrowings were repayable as follows:

Within 1 year Between 1 and 2 years Between 2 and 5 years Wholly repayable within 5 years	2006 HK$ 38,367,264 – 32,811,719 71,178,983	2007 HK$ 38,817,407 33,196,680 16,994,084 89,008,171	2008 HK$ 84,475,560 19,934,777 –
			104,410,337

The bank borrowings are secured by fixed deposits placed in the banks. The carrying amounts of the bank borrowings approximate their fair value. The fair value of current borrowings approximates to their carrying amount, as the impact of discounting is not significant.

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

Non-current Bank borrowings Current Bank borrowings	2006 1.05% 0.63%	2007 1.38% 1.08%	2008 1.71%

			1.23%

Bank borrowings are secured by long-term and short-term pledged deposits (Notes 11 and 15).

21 Trade and other payables

Amount due to the ultimate holding company (Note (a)) Trade payables (Note (b)) Other payables	2006 HK$ 253,045 3,627,065 1,315,772 5,195,882	Group 2007 HK$ – 7,453,100 1,553,620 9,006,720	2008 HK$ – 16,804,719 2,050,297
			18,855,016

– 91 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(a) Amount due to the ultimate holding company is unsecured, interest-free and repayable on demand.
(b) The aging of trade payables is within 3 months, 6 months and 3 months as at 31 March 2006, 2007 and 2008 respectively.
(c) The carrying amounts of trade and other payables approximate their fair values and all the payables are denominated in Hong Kong dollars.

22 Deferred income tax

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The offset amounts are as follows:

Deferred tax assets: – Deferred tax assets to be recovered after more than 12 months Deferred tax liabilities: – Deferred tax liabilities to be settled after more than 12 months	2006 HK$ (3,457,212) 3,457,212 –	Group 2007 HK$ (2,432,126) 3,462,998 1,030,872	2008 HK$ (2,230,279 3,503,110
			1,272,831

The gross movement on the deferred income tax account is as follows:

Beginning of the year Charged to income statement (Note 27) End of the year	2006 HK$ – – –	Group 2007 HK$ – 1,030,872 1,030,872	2008 HK$ 1,030,872 241,959
			1,272,831

The movement in deferred tax assets and liabilities during the Relevant Periods, without taking consideration the offsetting of balances within the same tax jurisdiction, is as follows:

Deferred tax liabilities:

At 1 April 2006 Charged to the income statement At 1 April 2007 Charged to the income statement At 31 March 2008	Accelerated tax depreciation HK$ – 161,394	Group Other HK$ – 3,301,604	Total HK$ – 3,462,998
	161,394 6,932	3,301,604 33,180	3,462,998 40,112
	168,326	3,334,784	3,503,110

– 92 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Deferred tax assets:

At 1 April 2006 Charged to the income statement At 1 April 2007 Charged to the income statement At 31 March 2008	Accelerated tax depreciation HK$ – (135,751)	Group Tax losses HK$ – (2,296,375)	Total HK$ – (2,432,126)
	(135,751) 19,370	(2,296,375) 182,477	(2,432,126) 201,847
	(116,381)	(2,113,898)	(2,230,279)

Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through the future taxable profits is probable. The Group did not recognise deferred income tax assets of HK$31,796,753, HK$32,281,516 and HK$29,026,520 in respect of losses amounting to HK$181,695,730, HK$184,465,804, HK$165,865,826 as at 31 March 2006, 2007 and 2008 that can be carried forward against future taxable income. The tax losses do not have an expiry date.

23 Other income

Interest income Rental income from investment property Dividend income from available-for-sale financial assets Others	2006 HK$ 7,061,758 1,747,774 2,038,813 – 10,848,345	2007 HK$ 8,274,161 1,804,200 4,210,535 38,102 14,326,998	2008 HK$ 7,984,223 2,104,744 4,492,422 49,996
			14,631,385

24 Other gains/(losses) – net

Exchange gains/(losses), net Gain on disposal of a subsidiary Losses on deregistration of subsidiaries (Losses)/gain on disposals of property, plant and equipment Fair value gain on revaluation of an investment property Gains on disposals of listed available-for-sale financial assets Impairment loss on available-for-sale financial assets Others	2006 HK$ 2,619,599 – (3,370) (565,979) 580,000 23,443,704 (4,052,819) 584,043 22,605,178	2007 HK$ 678,675 100 (3,010) – – – – 252,945 928,710	2008 HK$ (15,994,061) – – 4,500 150,000 – – 163,200
			(15,676,361)

– 93 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

25 Expenses by nature

Expenses included in cost of sales, selling and distribution costs and general and administrative expenses are analysed as follows:

Information and facility service charges Auditors’ remuneration Amortisation of land use rights Depreciation of property, plant and equipment Employee benefit expenses (Note 31) Other expenses Total cost of sales, selling and distribution costs and general and administrative expenses 26 Finance costs Interest on bank borrowings	2006 HK$ 31,265,511 490,210 168,667 1,698,785 12,285,847 3,248,206 49,157,226 2006 HK$ 343,140	2007 HK$ 60,802,709 453,721 929,304 803,726 12,848,727 3,597,841 79,436,028 2007 HK$ 953,551	2008 HK$ 133,522,994 567,496 578,750 1,149,405 13,158,552 4,322,348
			153,299,545

			2008 HK$ 1,209,899

27 Income tax expense

Hong Kong profits tax has not been provided as the Group has no estimated assessable profit for the years ended 31 March 2006, 2007 and 2008.

Current income tax Deferred income tax (Note 22)	2006 HK$ – – –	2007 HK$ – 1,030,872 1,030,872	2008 HK$ – 241,959
			241,959

– 94 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

The tax on the Group’s profit/(loss) before income tax differs from the theoretical amount that would arise using the tax rate of Hong Kong as follows:

Profit/(loss) before income tax Calculated at a tax rate of 17.5% Income not subject to tax Expenses not deductible for tax purposes Tax losses not recognised Utilisation of previously unrecognised tax losses Recognition of previously unrecognised temporary differences Others	2006 HK$ 24,981,671	2007 HK$ 8,650,313	2008 HK$ (5,304,820)
	4,371,792 (6,726,249) 1,464,453 890,004 – – –	1,513,805 (2,358,239) 356,783 1,109,201 (441,158) 876,367 (25,887)	(928,343) (2,148,031) 3,109,800 910,131 (403,519) – (298,079)
	–	1,030,872	241,959

28 Profit attributable to equity holders of the Company

The profit attributable to equity holders of the Company is dealt with in the financial statements of the Company to the extent of HK$11,986,098, HK$15,080,280 and HK$2,725,395 for the years ended 31 March 2006, 2007 and 2008 respectively.

29 Dividends

Interim, paid of HK¢2 (2006), HK¢1 (2007) and HK¢2 (2008) per ordinary share Final, paid of HK¢4 (2006) per ordinary share	2006 HK$ 9,337,720 18,675,440 28,013,160	2007 HK$ 4,668,860 – 4,668,860	2008 HK$ 9,337,720 –
			9,337,720

At meetings held on 4 July 2007 and 13 June 2008, the directors did not propose any final dividend for the years ended 31 March 2007 and 2008 respectively.

30 Earnings per share

Basic and diluted

Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by weighted average number of ordinary shares in issue during the year.

– 95 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has share options, for which, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company’s share) based on the monetary value of the subscription rights attached to outstanding share options. The share options have an anti-dilutive effect on the earnings per share. No option has been exercised during the year.

Profit/(loss) attributable to equity holders of the Company Weighted average number of ordinary shares in issue Basic and diluted earnings/(losses) per share (HK¢ per share) Employee benefit expenses Wages, salaries and other benefits Retirement benefit costs – defined contribution schemes (Note a ) – refund of forfeited contributions	2006 2007 2008 HK$24,981,671 HK$7,619,441 HK$(5,546,779) 466,886,000 466,886,000 466,886,000 5.35 1.63 (1.19) 2006 2007 2008 HK$ HK$ HK$ 11,830,261 12,461,231 12,664,542 622,406 546,098 539,286 (166,820) (158,602) (45,276) 12,285,847 12,848,727 13,158,552

31 Employee benefit expenses

(a) Retirement benefit costs – defined contribution plan

Forfeited contributions totaling HK$5,733, HK$26,124 and HK$27,544 were available as at 31 March 2006, 2007 and 2008 respectively to reduce future contributions.

Contributions totaling HK$67,628, HK$67,391 and HK$61,567 were payable to the funds as at 31 March 2006, 2007 and 2008 respectively.

– 96 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

(b) Directors’ and senior executives’ emoluments

The remuneration of every Director for the year ended 31 March 2006 is set out below:

Fees HK$ 30,000 30,000 30,000 30,000 30,000 30,000 30,000 210,000	Salary HK$ 384,000 – – – – – – 384,000	Employer’s contribution to provident fund HK$ – – – – – – – –	Other benefits HK$ – – – – – – – –	Total HK$ 414,000 30,000 30,000 30,000 30,000 30,000 30,000
				594,000

10,000 10,000 10,000	1,200,000 360,000 285,000	120,000 36,000 15,000	– – 100,000	1,330,000 406,000 410,000
30,000	1,845,000	171,000	100,000	2,146,000

– 97 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

The remuneration of every Director for the year ended 31 March 2007 is set out below:

Fees HK$ 30,000 30,000 30,000 30,000 30,000 30,000 180,000	Salary HK$ 384,000 – – – – – 384,000	Employer’s contribution to provident fund HK$ – – – – – – –	Other benefits HK$ – – – – – – –	Total HK$ 414,000 30,000 30,000 30,000 30,000 30,000
				564,000

10,000 10,000 10,000	1,200,000 360,000 325,200	120,000 36,000 16,260	– – 75,000	1,330,000 406,000 426,460
30,000	1,885,200	172,260	75,000	2,162,460

– 98 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The remuneration of every Director for the year ended 31 March 2008 is set out below:

Fees HK$ 30,000 30,000 30,000 30,000 30,000 30,000 180,000	Salary HK$ 384,000 – – – – – 384,000	Employer’s contribution to provident fund HK$ – – – – – – –	Other benefits HK$ – – – – – – –	Total HK$ 414,000 30,000 30,000 30,000 30,000 30,000
				564,000

10,000 10,000 10,000	1,200,000 360,000 400,800	120,000 36,000 20,040	– – –	1,330,000 406,000 430,840
30,000	1,960,800	176,040	–	2,166,840

Notes:

Deceased on 26 November 2006

Independent non-executive director

(c) Five highest paid individuals

The five individuals whose emoluments were the highest in the Group for the year ended 31 March 2006, 2007 and 2008 include one director whose emoluments are reflected in the analysis in Note (b) above respectively. The emoluments payable to the remaining four individuals during the year ended 31 March 2006, 2007 and 2008 are as follows:

Basic salaries, housing allowances, other allowances and benefits in kind Contributions to retirement schemes	2006 HK$ 2,498,707 66,713 2,565,420	2007 HK$ 2,712,915 71,126 2,784,041	2008 HK$ 2,640,325 48,000
			2,688,325

– 99 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

The emoluments fell within the following band:

	Number of individuals	Number of individuals
Emolument band	2006	2007	2008
HK$0 – HK$1,000,000	4	4	4

32 Cash (used in)/generated from operations

(a) Reconciliation of profit/(loss) for the year before taxation to cash (used in)/generated from operations:

Profit/(loss) for the year before taxation Adjustments for: Depreciation Amortisation of land use rights Dividend income from listed available-for-sale financial assets Interest expenses Interest income Loss/(gain) on disposals of property, plant and equipment Gain on disposal of a subsidiary Loss on deregistration of subsidiaries Fair value gain on revaluation of an investment property Exchange (gains)/losses, net Impairment loss on available-for-sale financial assets Gain on disposal of listed available-for-sale financial assets Changes in working capital Amount due to ultimate holding company Trade receivables Other receivables, deposits and prepayments Advance subscriptions and licence fees received Customer deposits Trade and other payables Cash (used in)/generated from operations	2006 HK$ 24,981,671 1,698,785 168,667 (2,038,813) 343,140 (7,061,758) 565,979 – 3,370 (580,000) (7,599,209) 4,052,819 (23,443,704)	2007 HK$ 8,650,313 803,726 929,304 (4,210,535) 953,552 (8,274,161) – (100) 3,010 – (678,675) – –	2008 HK$ (5,304,820) 1,149,405 578,750 (4,492,422) 1,209,899 (7,984,223) (4,500) – – (150,000) 15,994,061 – –
	(8,909,053) – (3,190,134) 84,361 27,328 (602,516) 2,402,406	(1,823,566) (253,045) (8,819,587) 577,522 505,793 (33,854) 3,822,962	996,150 – 2,865,722 4,493,880 658,600 (35,500) 9,981,688
	(10,187,608)	(6,023,775)	18,960,540

– 100 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

(b) Deregistration of subsidiaries

Net assets disposed of: Other receivables, deposits and prepayments Cash and bank balances Reserve realised Loss on deregistration	2006 HK$ 75,776 –	2007 HK$ 100 135	2008 HK$ – –
	75,776 (79,146) 3,370	235 (3,245) 3,010	– – –
	–	–	–

Analysis of net cash used in respect of deregistration of subsidiaries:

	2006	2007	2008
	HK$	HK$	HK$
Net cash used in respect of deregistration of
subsidiaries	(3,370)	(3,010)	–

Net book amount (Loss)/gain on sale of property, plant and equipment Proceeds from sale of property, plant and equipment	2006 HK$ 1,052,979 (565,979) 487,000	2007 HK$ – – –	2008 HK$ – 4,500
			4,500

As at 31 March 2006, cash of HK$50,500 had been received and the remaining balance of HK$436,500 was included under other receivables which was subsequently received after year end.

(d) Non-cash items

Exchange translation differences for bank loans amounted to HK$3,809,077, HK$348,827 and HK$15,402,166 for the years ended 31 March 2006, 2007 and 2008 respectively.

33 Other commitments

		Group
	2006	2007	2008
	HK$	HK$	HK$
Contracted but not provided for in respect of investment in
available-for-sale financial assets	3,868,500	1,772,546	1,765,948

The Group did not have any other commitment as at 31 March 2006, 2007 and 2008.

– 101 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

34 Operating leases

The Group had future aggregate minimum lease receivables under the non-cancellable operating leases in respect of the investment property as follows:

Not later than one year Later than one year and not later than five years	2006 HK$ 1,560,000 350,000 1,910,000	2007 HK$ 580,000 – 580,000	2008 HK$ 2,004,000 4,744,000
			6,748,000

The Group did not have any operating lease receivables as at 31 March 2006, 2007 and 2008.

35 Related-party transactions

	2006	2007	2008
	HK$	HK$	HK$
Key management compensation – salaries and other
short-term benefits	4,481,113	4,416,760	4,677,540

– 102 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

III SUBSEQUENT EVENTS

On 2 May 2008, the Company entered into a sale and purchase agreement (the “Disposal Agreement”) to dispose the entire issued share capital of ABC Global Limited, a wholly owned subsidiary of the Company, to H.C.B.C. Enterprises Limited, the ultimate controlling shareholder of the Company, at an aggregate cash consideration of HK$252,300,000, subject to adjustment.

Subject to completion of the Disposal Agreement, the Company will apply the proceeds under the Disposal Agreement and surplus cash of the Company for a special dividend (the “Special Dividend”) to be made to all existing shareholders of the Company. The Special Dividend amounts to HK$273,868,476, which is equivalent to approximately HK$0.5866 per share in the Company.

Completion of the Disposal Agreement is conditional upon, inter alia, completion of a restructuring (the “Restructuring”), whereby ABC Global Limited will become the holding company of (a) the subsidiaries comprising the investment holding business of the Group which consists of certain non-operating assets including the investments in eAccess Limited, eMobile Limited, Argo II Funds, two office properties, and bank loans (collectively the “ABC Global Group”), and (b) 49% interest in Choudary Limited, a wholly owned subsidiary of the Company, and its subsidiaries (collectively the “Choudary Group”) comprising the financial quotation and securities trading system licensing business and the wireless application business of the Group.

The proposed structure of holding 49% equity interest in Choudary Group by ABC Global Limited does not satisfy the common control requirement under Hong Kong Accounting Guideline 5, Merger Accounting for Common Control Combinations. Accordingly, the combined financial information of the ABC Global Group and the consolidated financial information of Choudary Group is presented separately for the purpose of disclosure.

– 103 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(a) ABC Global Group

The following information represents the financial information of the assets and liabilities, results and cash flows of the ABC Global Group for the Relevant Periods, presented on the basis set out in Note 1 below.

(i) Combined balance sheets of the ABC Global Group

ASSETS Non-current assets Land use rights Property, plant and equipment Investment property Available-for-sale financial assets Long-term pledged deposits Long-term deposits Current assets Other receivables, deposits and prepayments Amount due from a related company Short-term pledged deposits Cash and cash equivalents Total assets	As at 31 March 2006 2007 HK$ HK$ 17,695,935 16,766,631 1,527,781 1,481,150 19,500,000 19,500,000 162,369,952 197,677,575 36,673,380 56,951,448 2,616,321 2,634,581	As at 31 March 2006 2007 HK$ HK$ 17,695,935 16,766,631 1,527,781 1,481,150 19,500,000 19,500,000 162,369,952 197,677,575 36,673,380 56,951,448 2,616,321 2,634,581	2008 HK$ 16,187,881 1,442,013 19,650,000 185,262,286 23,531,087 –
	240,383,369 --------------- 1,995,772 68,757 45,261,450 47,770,370	295,011,385 --------------- 1,921,236 378,823 45,733,932 14,936,686	246,073,267 --------------- 1,847,770 – 96,738,179 11,167,583
	95,096,349 --------------- ----------------------------- 335,479,718	62,970,677 --------------- ----------------------------- 357,982,062	109,753,532 --------------- ----------------------------- 355,826,799

– 104 –

APPENDIX I

ACCOUNTANT’S REPORT OF THE GROUP

As at 31 March 2006 2007 HK$ HK$ 8 8 60,691,924 80,135,149	As at 31 March 2006 2007 HK$ HK$ 8 8 60,691,924 80,135,149	2008 HK$ 8 50,913,176 50,913,184 --------------- 19,934,777 1,272,831 21,207,608 --------------- 198,490,988 84,475,560 739,459 283,706,007 --------------- ----------------------------- 304,913,615 --------------- ----------------------------- 355,826,799 (173,952,475) 72,120,792
60,691,932 --------------- 32,811,719 – 32,811,719 --------------- 203,104,575 38,367,264 504,228	80,135,157 --------------- 50,190,764 1,030,872 51,221,636 --------------- 187,066,282 38,817,407 741,580	50,913,184 --------------- 19,934,777 1,272,831
		21,207,608 --------------- 198,490,988 84,475,560 739,459
241,976,067 --------------- ----------------------------- 274,787,786 --------------- ----------------------------- 335,479,718 (146,879,718) 93,503,651	226,625,269 --------------- ----------------------------- 277,846,905 --------------- ----------------------------- 357,982,062 (163,654,592) 131,356,793

– 105 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(ii) Combined income statements of the ABC Global Group

Other income Other gains/(losses) – net General and administrative expenses Operating profit/(loss) Finance costs Profit/(loss) before income tax Income tax expense Profit/(loss) for the year Dividends	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ 8,716,306 12,268,483 12,775,817 19,774,556 (611,518) (26,548,186) (2,182,397) (1,936,332) (1,582,456) 26,308,465 9,720,633 (15,354,825) (343,140) (953,551) (1,209,899) 25,965,325 8,767,082 (16,564,724) – (1,030,872) (241,959) 25,965,325 7,736,210 (16,806,683) 10,000,000 4,000,000 –

– 106 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(iii) Combined cash flow statements of the ABC Global Group

Net cash used in operating
activities
Net cash used in investing
activities
Net cash (used in)/generated from
financing activities
Net decrease in cash and cash
equivalents
Cash and cash equivalents at
beginning of the year
Exchange (losses)/gains on cash
and cash equivalents
Cash and cash equivalents at end
of the year

Year ended 31 March
2006
2007
2008
HK$
HK$
HK$
(1,502,008)
(336,688)
(1,148,919)
---------------
---------------
---------------
(32,101,662)
(30,283,500)
(4,168,971)
---------------
---------------
---------------
(15,105,063)
(2,563,932)
1,614,892
---------------
-----------------------------
---------------
-----------------------------
---------------
-----------------------------
(48,708,733)
(33,184,120)
(3,702,998)
96,964,739
47,770,370
14,936,686
(485,636)
350,436
(66,105)
47,770,370
14,936,686
11,167,583

Note 1: The combined income statements and combined cash flow statements of the ABC Global Group for the Relevant Periods include the financial information of the companies comprising the ABC Global Group as a result of the Restructuring as if the group structure has been in existence throughout the Relevant Periods, or since their respective dates of incorporation or dates of acquisition, which is the shorter period.

The combined balance sheets of the ABC Global Group as at 31 March 2006, 2007 and 2008 have been prepared to present the assets and liabilities of the ABC Global Group as if the group structure after the Restructuring had been in existence as at these dates.

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

– 107 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(b) Choudary Group

The following information represents the financial information of the assets and liabilities, results and cash flows of the Choudary Group. The effects of all transactions and balances within the Choudary Group are eliminated.

(i) Consolidated balance sheets of the Choudary Group

ASSETS Non-current assets Property, plant and equipment Current assets Amounts due from a holding company Trade receivables Other receivables, deposits and prepayments Cash and cash equivalents Total assets	As at 31 March 2006 2007 HK$ HK$ 1,075,690 1,070,915 --------------- --------------- – – 5,011,985 13,831,572 616,341 437,477 1,623,339 352,987 7,251,665 14,622,036 --------------- ----------------------------- --------------- ----------------------------- 8,327,355 15,692,951	2008 HK$ 2,648,927 --------------- 34,377 10,965,850 884,183 14,698,013
		26,582,423 --------------- ----------------------------- 29,231,350

– 108 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

EQUITY Share capital Reserves Total equity LIABILITIES Non-current liabilities Amount due to a related company Current liabilities Amounts due to a holding company Advance subscriptions and licence fees received Customer deposits Trade and other payables Total liabilities Total equity and liabilities Net current liabilities Total assets less current liabilities	As at 31 March 2006 2007 HK$ HK$ 78,023 78,023 (86,153,532) (85,094,908)	As at 31 March 2006 2007 HK$ HK$ 78,023 78,023 (86,153,532) (85,094,908)	2008 HK$ 90,643 (57,774,407) (57,683,764) --------------- – --------------- 65,646,611 3,222,909 473,000 17,572,594 86,915,114 --------------- ----------------------------- 86,915,114 --------------- ----------------------------- 29,231,350 (60,332,691) (57,683,764)
	(86,075,509) --------------- 18,507,355 --------------- 69,374,319 2,058,517 542,354 3,920,319	(85,016,885) --------------- 19,999,958 --------------- 69,831,431 2,564,310 508,500 7,805,637	(57,683,764 --------------- – --------------- 65,646,611 3,222,909 473,000 17,572,594
	75,895,509 --------------- ----------------------------- 94,402,864 --------------- ----------------------------- 8,327,355 (68,643,844) (67,568,154)	80,709,878 --------------- ----------------------------- 100,709,836 --------------- ----------------------------- 15,692,951 (66,087,842) (65,016,927)

– 109 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

(ii) Consolidated income statements of the Choudary Group

Revenue Cost of sales Gross profit Other income Other gains/(losses) – net Selling and distribution costs General and administrative expenses (Loss)/profit for the year Dividend	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ 41,028,514 73,784,184 150,249,600 (31,265,511) (60,802,709) (133,522,944) 9,763,003 12,981,475 16,726,656 – – 37,795 569,804 (7,099) 20,747,914 (1,448,726) (1,612,791) (1,348,795) (9,300,863) (10,302,960) (11,830,255) (416,782) 1,058,625 24,333,315 – – –	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ 41,028,514 73,784,184 150,249,600 (31,265,511) (60,802,709) (133,522,944) 9,763,003 12,981,475 16,726,656 – – 37,795 569,804 (7,099) 20,747,914 (1,448,726) (1,612,791) (1,348,795) (9,300,863) (10,302,960) (11,830,255) (416,782) 1,058,625 24,333,315 – – –	Year ended 31 March 2006 2007 2008 HK$ HK$ HK$ 41,028,514 73,784,184 150,249,600 (31,265,511) (60,802,709) (133,522,944) 9,763,003 12,981,475 16,726,656 – – 37,795 569,804 (7,099) 20,747,914 (1,448,726) (1,612,791) (1,348,795) (9,300,863) (10,302,960) (11,830,255) (416,782) 1,058,625 24,333,315 – – –
	9,763,003 – 569,804 (1,448,726) (9,300,863)	12,981,475 – (7,099) (1,612,791) (10,302,960)	16,726,656 37,795 20,747,914 (1,348,795 (11,830,255
	(416,782) –	1,058,625 –

(iii) Consolidated cash flow statements of the Choudary Group

Net cash generated from/(used in)
operating activities
Net cash used in investing
activities
Net cash generated from/(used in)
financing activities
Net increase/(decrease) in cash and
cash equivalents
Cash and cash equivalents at
beginning of the year
Exchange losses on cash and cash
equivalents
Cash and cash equivalents at end
of the year

Year Ended 31 March
2006
2007
2008
HK$
HK$
HK$
285,004
(989,835)
18,160,137
---------------
---------------
---------------
(542,399)
(735,991)
(2,625,230)
---------------
---------------
---------------
908,639
457,112
(1,184,820)
---------------
-----------------------------
---------------
-----------------------------
---------------
-----------------------------
651,244
(1,268,714)
14,350,087
972,629
1,623,339
352,987
(534)
(1,638)
(5,061)
1,623,339
352,987
14,698,013

– 110 –

ACCOUNTANT’S REPORT OF THE GROUP

APPENDIX I

IV SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements of the Company or any of its subsidiaries have been prepared in respect of any periods subsequent to 31 March 2008 and up to the date of this report. Except as disclosed in this report, no dividends have been declared or paid by the Company or any of its subsidiaries in respect of any period subsequent to 31 March 2008.

Yours faithfully PricewaterhouseCoopers Certified Public Accountants Hong Kong

– 111 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

ACCOUNTANT’S REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is an illustrative financial information comprising the unaudited pro forma consolidated balance sheet, pro forma consolidated income statement and pro forma consolidated cash flow statement of the Remaining Group which has been prepared on the basis of the notes set below for the purpose of illustrating the effect of the proposed disposal of the Company’s interest in ABC Global Limited (the “Disposal Group”) (the proposed disposal referred as the “Disposal”) as if it had taken place on 31 March 2008 for the pro forma consolidated balance sheet and as if it had taken place on 1 April 2007 for the pro forma consolidated income statement and pro forma consolidated cash flow statement. This unaudited pro forma financial information has been prepared by the Directors of the Company for illustrative purpose only and because of its hypothetical nature, it may not give a true picture of the financial position, financial results and cash flows of the Remaining Group had the Disposal been completed as at 31 March 2008 or 1 April 2007 or at any future date.

I. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

ASSETS Non-current assets Land use rights Property, plant and equipment Investment property Available-for-sale financial assets Long-term pledged deposits Current assets Trade receivables Other receivables, deposits and prepayments Short-term pledged deposits Cash and cash equivalents Total assets	Audited consolidated balance sheet of the Company as of 31 March 2008 Pro forma adjustments HK$ HK$ HK$ HK$ HK$ Note 1 Note 2(a) Note 2(b) Note 2(c) Note 2(d) 16,187,881 (16,187,881) 4,090,940 (1,442,013) 19,650,000 (19,650,000) 185,262,286 (185,262,286) 23,531,087 (23,531,087)	Unaudited pro forma consolidated balance sheet of the Remaining Group HK$ – 2,648,927 – – –
	248,722,194 - - - - - - - - - - 10,965,850 2,924,930 (1,847,770) 96,738,179 (96,738,179) 59,736,751 (11,167,583) 252,300,000 (273,868,476)	2,648,927 - - - - - - - - - - 10,965,850 1,077,160 – 27,000,692
	170,365,710 - - - - - - - - - - --------------------------------------- 419,087,904	39,043,702 - - - - - - - - - - --------------------------------------- 41,692,629

– 112 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

EQUITY Capital and reserves attributable to the Company’s equity holders Share capital Reserves Minority interests Total equity LIABILITIES Non-current liabilities Bank borrowings, secured Deferred income tax liabilities Current liabilities Advance subscriptions and licence fees received Customer deposits Bank borrowings, secured Trade and other payables Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities	Audited consolidated balance sheet of the Company as of 31 March 2008 Pro forma adjustments HK$ HK$ HK$ HK$ HK$ Note 1 Note 2(a) Note 2(b) Note 2(c) Note 2(d) 46,688,600 (42,019,740) 244,165,210 (6,849,054) (231,848,736)	Unaudited pro forma consolidated balance sheet of the Remaining Group HK$ 4,668,860 5,467,420
	290,853,810 – 3,744,882 290,853,810 - - - - - - - - - - 19,934,777 (19,934,777) 1,272,831 (1,272,831) 21,207,608 - - - - - - - - - - 3,222,910 473,000 84,475,560 (84,475,560) 18,855,016 (739,459) 6,000,000	10,136,280 3,744,882
		13,881,162 - - - - - - - - - - – –
		– - - - - - - - - - - 3,222,910 473,000 – 24,115,557
	107,026,486 - - - - - - - - - - --------------------------------------- 128,234,094 - - - - - - - - - - --------------------------------------- 419,087,904 63,339,224 312,061,418	27,811,467 - - - - - - - - - - --------------------------------------- 27,811,467 - - - - - - - - - - --------------------------------------- 41,692,629

		11,232,235

		13,881,162

– 113 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

II. UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENT

Revenue Cost of sales Gross profit Other income Other (losses)/gains – net Selling and distribution costs General and administrative expenses Loss on the Disposal Gain realised from the release of investment revaluation upon the Disposal Operating (loss)/profit Finance costs (Loss)/profit before income tax Income tax expense (Loss)/profit for the year Minority interests Dividends	Audited consolidated income statement of the Company for the year ended 31 March 2008 Pro forma adjustments Unaudited pro forma consolidated income statement of the Remaining Group HK$ HK$ HK$ HK$ HK$ HK$ HK$ Note 1 Note 3(a) Note 3(b) Note 3(c) Note 3(d) Note 3(e) 150,249,600 150,249,600 (133,522,994) (133,522,994)	Audited consolidated income statement of the Company for the year ended 31 March 2008 Pro forma adjustments Unaudited pro forma consolidated income statement of the Remaining Group HK$ HK$ HK$ HK$ HK$ HK$ HK$ Note 1 Note 3(a) Note 3(b) Note 3(c) Note 3(d) Note 3(e) 150,249,600 150,249,600 (133,522,994) (133,522,994)
	16,726,606 16,726,606 14,631,385 (12,775,817) 1,855,568 (15,676,361) 25,584,046 20,585,276 30,492,961 (1,348,795) (1,348,795) (18,427,756) 1,582,456 (16,845,300) – (12,720,107) (12,720,107) – 90,665,551 90,665,551 (4,094,921) 108,826,484 (1,209,899) 1,209,899 – (5,304,820) 108,826,484 (241,959) 241,959 – (5,546,779) 108,826,484 – (11,923,324) (11,923,324)
	(5,546,779) 96,903,160 9,337,720 273,868,476 283,206,196	96,903,160

– 114 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

III. UNAUDITED PRO FORMA CONSOLIDATED CASH FLOW STATEMENT

Cash flows from operating activities Cash generated from operating activities Interest paid Net cash generated from operating activities Cash flows from investing activities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of a subsidiary Proceeds from the Disposal Dividends received from available-for-sale financial assets Interest received Increase in pledged deposits Decrease in long-term deposits Net cash (used in)/from investing activities Cash flows from financing activities Dividends paid Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Exchange losses on cash and cash equivalents Cash and cash equivalents at end of the year	Audited consolidated cash flow statement of the Company for the year ended 31 March 2008 Pro forma adjustments HK$ HK$ HK$ HK$ Note 1 Note 4(a) Note 4(b) Note 4(c) 18,960,540 (1,809,264) (1,343,291) 1,343,291	Unaudited pro forma consolidated cash flow statement of the Remaining Group HK$ 17,151,276 –
	17,617,249 - - - - - - - - - - - (2,688,280) 20,950 4,500 – (195) – 252,300,000 4,492,422 (4,492,422) 8,161,729 (6,308,667) (17,583,886) 17,583,886 2,634,581 (2,634,581) (4,978,934) - - - - - - - - - - - (9,337,720) (273,868,476) (9,337,720) - - - - - - - - - - ----------------------------------------- 3,300,595 57,028,051 (14,936,686) (591,895) 66,105	17,151,276 - - - - - - - - - - - (2,667,330) 4,500 (195) 252,300,000 – 1,853,062 – –
		251,490,037 - - - - - - - - - - - (283,206,196)
		(283,206,196) - - - - - - - - - - ----------------------------------------- (14,564,883) 42,091,365 (525,790)
	59,736,751	27,000,692

– 115 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

IV. NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

(1) The amounts are extracted from the accountant’s report of the Group as set out in Appendix I of this Circular.
(2) For the purpose of the unaudited pro forma consolidated balance sheet, the pro forma adjustments include the following:
(a) The adjustment reflects the de-consolidation of the assets and liabilities of ABC Global and its subsidiaries upon completion of the Restructuring (collectively the “ABC Global Group”) assuming that the Disposal took place on 31 March 2008. The amount of HK$198,490,988 due by ABC Global Group to the Company as of 31 March 2008 has been capitalised as part of the Restructuring assuming the Disposal took place on 31 March 2008.

The amounts are extracted from the combined balance sheet of ABC Global Group as at 31 March 2008 in the accountant’s report of the Group as set out in Appendix I of this Circular.

(b) The adjustment reflects the recognition of minority interests arising from the disposal of 49% interest in Choudary Group based on its net assets value of HK$7,642,615 after the Restructuring, assuming the Restructuring and the Disposal took place on 31 March 2008. The net assets value of HK$7,642,615 after the Restructuring is calculated based on the net liabilities of Choudary Group of HK$57,683,764 as of 31 March 2008 prior to the Restructuring, plus the capitalisation of an amount of HK$65,326,379 due by Choudary Limited to the Company as of 31 March 2008 as part of the Restructuring (the “Capitalised Balance”), assuming the Restructuring took place on 31 March 2008.

The total amount of HK$65,646,611, being the sum of the Capitalised Balance and an amount of HK$320,232 due from QuotePower, a subsidiary of Choudary Group, to the Company as of 31 March 2008 which was repaid as part of the Restructuring prior to the Disposal as if it took place on 31 March 2008, is extracted from the consolidated balance sheet of Choudary Group as of 31 March 2008 in the accountant’s report of the Group as set out in Appendix I of this Circular.

(c) The adjustment reflects (i) the net cash inflow amounting to HK$252,300,000 being the estimated consideration of the Disposal, (ii) an accrual for estimated professional costs of HK$6,000,000 in relating to the Disposal, and (iii) a net decrease in reserves of HK$6,849,054 related to the estimated loss on the Disposal of approximately HK$6,849,054 calculated based on the estimated consideration of HK$252,300,000 minus estimated professional costs of HK$6,000,000 and net assets value of the Disposal Group of HK$253,149,054 as of 31 March 2008, assuming the Disposal took place on 31 March 2008.

– 116 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

There is a release of investment revaluation reserve of HK$78,250,262 to the income statement upon the completion of the Disposal in relation to the available-for-sale securities held by ABC Global Group being disposed by the Company assuming the Disposal took place on 31 March 2008. However, this represents a transfer from the investment revaluation reserve to the income statement where there is no net impact to the reserve balance as of 31 March 2008.

(d) The adjustment reflects the distribution of the Special Dividend amounting to HK$273,868,476 following the Capital Reduction of the Company and the completion of the Disposal.
(3) For the purpose of the unaudited pro forma consolidated income statement, the pro forma adjustments include the following:
(a) The adjustment reflects the de-consolidation of the results of the ABC Global Group for the year ended 31 March 2008 assuming the Disposal took place on 1 April 2007. The amounts are extracted from the combined income statement of ABC Global Group for the year ended 31 March 2008 in the accountant’s report of the Group as set out in Appendix I of this Circular.

An impairment provision of HK$964,140 recorded by ABC Global Group in relation to the additional provision made against the amount due from Choudary Group during the year ended 31 March 2008 has been eliminated upon the Company’s consolidation and therefore not included in the consolidated income statement of the Company for the year ended 31 March 2008.

(b) The adjustment reflects a gain of HK$20,585,276 recorded by Choudary Group in relation to a waiver of an amount due by Choudary Group to ABC Global during the year ended 31 March 2008. Since this is a waiver between two subsidiaries of the Group, this gain has been eliminated upon the Company’s consolidation and not included in the consolidated income statement of the Company. Upon the Disposal, Choudary Group remains with the Group as a 51% owned subsidiary whereas ABC Global has been disposed by the Company and accordingly, ABC Global Group is deemed as a third party to the Remaining Group for the purpose of the unaudited pro forma consolidated income statement. Therefore, the gain of HK$20,585,276 of Choudary Group is added to the other gains in the unaudited pro forma consolidated income statement of the Remaining Group for the year ended 31 March 2008.
(c) The adjustment comprises (i) the estimated gain realized from the release of investment revaluation reserve of HK$90,665,551 in relation to the available-for-sale securities held by ABC Global Group being disposed by the Company assuming the Disposal took place on 1 April 2007, and (ii) the estimated loss from the Disposal of approximately HK$12,720,107 calculated based on the estimated consideration of HK$252,300,000 minus estimated

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

professional costs of HK$6,000,000 and net assets value of the Disposal Group of HK$259,020,107 as of 1 April 2007, assuming the Disposal took place on 1 April 2007.

(d) The adjustment reflects the minority interest’s share of 49% of the results of the Choudary Group for the year ended 31 March 2008, assuming the Disposal took place on 1 April 2007.
(e) The adjustment reflects the distribution of the Special Dividend amounting to HK$273,868,476 following the Capital Reduction of the Company and the completion of the Disposal.
(f) Adjustment 3(d) is expected to have a continuing effect on the Remaining Group. Other adjustments are not expected to have a continuing effect on the Remaining Group.
(4) For the purpose of the unaudited pro forma consolidated cash flow statement, the pro forma adjustments include the following:
(a) The adjustment reflects the exclusion of the cash flows of the ABC Global Group for the year ended 31 March 2008, assuming the Disposal took place on 1 April 2007.
(b) The adjustment reflects the net cash inflow amounting to HK$252,300,000, being the estimated consideration of the Disposal.
(c) The adjustment reflects the distribution of the Special Dividend amounting to HK$273,868,476 following the Capital Reduction of the Company and the completion of the Disposal.
(d) Adjustments 4(a) to 4(c) are not expected to have a continuing effect on the Remaining Group.
(5) The adjustments above are derived after taking into account the following assumptions and considerations:
(a) The final amounts of the consideration, assets and liabilities of the ABC Global Group and the gain arising from the Disposal may be different from those amounts as presented above.
(b) No adjustment has been made to reflect any trading results or other transactions of the Group entered into subsequent to 31 March 2008.

– 118 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

B. REPORT FROM THE REPORTING ACCOUNTANT

==> picture [102 x 38] intentionally omitted <==

ACCOUNTANT’S REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION TO THE DIRECTORS OF ABC COMMUNICATIONS (HOLDINGS) LIMITED

We report on the unaudited pro forma financial information set out on pages 112 to 118 under the heading of “Unaudited Pro Forma Financial Information” (the “Unaudited Pro Forma Financial Information”) in Appendix II of the circular dated 18 July 2008 (the “Circular”) of ABC Communications (Holdings) Limited (the “Company”) in connection with the proposed disposal of ABC Global Limited by the Company (the “Disposal”). 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 Disposal might have affected the relevant financial information of the Company and its subsidiaries (hereinafter collectively referred to as the “Group”). The basis of preparation of the Unaudited Pro Forma Financial Information is set out on pages 112 to 118 of the Circular.

Respective Responsibilities of Directors of the Company and the Reporting Accountant

It is the responsibility solely of the Directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with rule 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

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

Basis of Opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the audited consolidated balance sheet of the Company as at 31 March 2008, the audited consolidated income statement and the audited consolidated cash flow statement

– 119 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

for the year ended 31 March 2008 with the accountant’s report as set out in Appendix I of this Circular, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the Directors of the Company.

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 rule 4.29(1) of the Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgements and assumptions of the Directors of the Company, and because of its hypothetical nature, it 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 31 March 2008 or any future date, or
the results and cash flows of the Group for the year ended 31 March 2008 or any future periods.

Opinion

In our opinion:

a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors of the Company on the basis stated;
b) such basis is consistent with the accounting policies of the Group; and
c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to rule 4.29(1) of the Listing Rules.

PricewaterhouseCoopers Certified Public Accountants Hong Kong, 18 July 2008

– 120 –

ADDITIONAL FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

I. INDEBTEDNESS

At the close of business on 31 May 2008 (being the latest practicable date for the purpose of this indebtedness statement), the Group had outstanding bank borrowings of JPY1,340,484,496 (approximately HK$99,423,735). The bank borrowings were secured by fixed deposits of US$14,669,406 (approximately HK$114,157,315).

Save as aforesaid or as otherwise mentioned herein and apart from normal trade payable in the ordinary course of business and intra-group liabilities, at the close of business on 31 May 2008, the Group did not have any outstanding loan capital, bank overdrafts and liabilities under acceptances or other similar indebtedness, debentures, mortgages, charges, or loans or acceptance credits or hire purchase commitments, guarantees or other material contingent liabilities.

II. WORKING CAPITAL

On 15 July 2008, the Offeror and Mr. Sze (the “ Lenders ”) entered into a facility agreement with the Company pursuant to which, subject to Completion, the Lenders irrevocably undertook to grant to the Company a joint standby revolving facility of HK$20,000,000 (the “ Facility ”) for a period of 24 months after Completion. The purpose of the Facility is to strengthen the working capital position of the Company.

Taking into account the expected completion of the Disposal, the financial resources available to the Group, including the internally generated funds and the availability of the Facility, and the overhead projection provided by the Offeror, the Directors are of the opinion that the Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this circular in the absence of unforeseen material circumstances.

III. MATERIAL ADVERSE CHANGE

The Board is not aware of any material adverse change in the financial or trading position or outlook of the Group subsequent to 31 March 2008, the date to which the latest published audited consolidated financial statements of the Company were made up.

– 121 –

GENERAL INFORMATION

APPENDIX IV

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts not contained in this circular, the omission of which would make any statement in this circular misleading.

The information in relation to the Offeror and HCBC Communications was extracted from the Joint Announcement. The Directors jointly and severally accept full responsibility for the correctness and fairness of the reproduction or presentation of such information and confirm that such extraction is not misleading, and that, to the best of their knowledge, there are no other facts not contained in this circular, the omission of which would make any such extracted statement misleading.

2. DISCLOSURE OF INTERESTS

(a) DIRECTORS AND CHIEF EXECUTIVES

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company and any of its associated corporations (within the meaning of Part XV of the SFO) which (a) are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is taken or deemed to have under such provision of the SFO); or (b) are required to be entered in the register pursuant to Section 352 of the SFO; or (c) are required to be notified to the Company and the Stock Exchange pursuant to the Model Code of Securities Transactions by Directors of Listed Companies, were as follows:

(i) Long position in the Shares

		Number of Ordinary Shares	Number of Ordinary Shares	Number of Ordinary Shares
	Personal	Corporate	Family	Total
Name	interests	interests	interests	interests	Percentage
		(Note)
Mr. George Ho	7,530,000	265,331,600	–	272,861,600	58.44%
Mr. Michael Tse Chi Hung	8,868,006	–	–	8,868,006	1.90%
Ms. Patricia Yeung Shuk Kwan	6,450,400	–	–	6,450,400	1.38%
Mr. George Joseph Ho	3,500,000	–	–	3,500,000	0.75%
Mr. Leung Kwok Kit	906,600	–	–	906,600	0.19%
Mr. Aubrey Li Kwok Sing	186,000	–	–	186,000	0.04%

Note: HCBC Communications and its parent, HCBC Enterprises, together held 265,331,600 Shares. Mr. George Ho is deemed to have interests in the voting shares of HCBC Communications and HCBC Enterprises as a result of his holdings in HCBC BVI, the ultimate holding company of HCBC Enterprises.

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GENERAL INFORMATION

APPENDIX IV

(ii) Long position in underlying shares

Rights in respect of which options are held/exercisable under the Company’s Employee Share Option Scheme are as follows:

Name of Director	Outstanding Options	Exercise Price (HK$)	Exercise Period
Ms. Patricia Yeung Shuk Kwan	1,000,000	1.41	23 March 2000 to 22 February 2010
	1,000,000	1.41	23 February 2001 to 22 February 2010
Mr. George Joseph Ho	250,000	1.41	23 March 2000 to 22 February 2010
	250,000	1.41	23 February 2001 to 22 February 2010

(iii) Associated corporations

As at the Latest Practicable Date, the Directors’ interests in associated corporations of the Company (within the meaning of the SFO) were as follows:

(a) Mr. George Ho held 18,112 ‘B’ non-voting shares in HCBC Communications. HCBC Enterprises held all the issued 312,000 ‘A’ voting shares and 12,488 ‘B’ non-voting shares in HCBC Communications.
(b) Mr. George Ho was beneficially interested in 115,000 management shares and 946,975 ordinary shares in HCBC BVI. HCBC BVI held all 10 issued management shares of HCBC Enterprises.
(c) Those directors set out below were personally interested in the following numbers of non-voting deferred shares in the capital of ABC Communications Limited, a subsidiary of the Company:

Name	Number of Deferred Shares
Mr. George Ho (Note)	10,605
Mr. Michael Tse Chi Hung	11,642
Ms. Patricia Yeung Shuk Kwan	4,000
Mr. Leung Kwok Kit	5,900
Note: Mr. George Ho also held corporate interests through HCBC Enterprises in 190,690
non-voting deferred shares in the capital of ABC Communications Limited.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company had, any interests or short positions in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interest and short position which he/she was taken or deemed to have under such provision of the SFO) or are required to be entered in the register pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies.

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GENERAL INFORMATION

APPENDIX IV

(b) SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN THE COMPANY

As at the Latest Practicable Date, so far as was known to the Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company), were deemed or taken to have an interest or short position 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 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:–

Long position in the Shares

Name			Number	of	Shares held	Percentage
HCBC	BVI	(Note)			265,331,600	56.83%

Note: The above shareholding has been included in the shareholding stated against Mr. George Ho shown under paragraph 2(a) headed “Directors and Chief Executives”.

Save as disclosed above, as at the Latest Practicable Date, so far was known to the Directors, no other person (other than a Director or chief executive of the Company) had, or was deemed or taken to have an interest or short position in the Shares and 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 was, 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 members of the Group.

3. MATERIAL CONTRACTS

As at the Latest Practicable Date, save for the Disposal Agreement, the Group has not entered into any material contracts (not being contracts entered into in the ordinary course of business) within two years before the date of this circular which are or may be material.

4. MATERIAL LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries were engaged in any outstanding litigation of material importance and no litigation of material importance was known to the Directors to be pending or threatened by or against any member of the Group.

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has any existing or proposed service contract with any member of the Group which is not terminable by the employer within one year without payment of compensation other than statutory compensation.

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GENERAL INFORMATION

APPENDIX IV

6. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or chief executives of the Company or their respective associates has any beneficial interest in other businesses which compete or are likely to compete with the business of the Group.

7. INTEREST IN CONTRACTS AND ASSETS

As at the Latest Practicable Date, to the best of the knowledge of the Directors, none of the Directors or proposed directors of the Company or any expert named in this circular had any direct or indirect interest in any asset which had been, since 31 March 2008, being the date to which the latest published audited accounts of the Company were made up, acquired or disposed of, by or leased to any member of the Group or are proposed to be acquired or disposed of, by or leased to any member of the Group.

8. QUALIFICATION OF EXPERTS AND EXPERTS’ INTERESTS

The following are the qualifications of the experts who have given advice or opinions which are contained in this document:

Name Qualification Altus Capital Limited a licensed corporation to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO PricewaterhouseCoopers Certified Public Accountants

As at the Latest Practicable Date, to the best of the knowledge of the Directors, the Independent Financial Adviser and PricewaterhouseCoopers had no shareholding in any member of the Group nor any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

9. CONSENTS

The Independent Financial Adviser and PricewaterhouseCoopers have respectively given and have not withdrawn their respective written consents to the issue of this circular with the inclusion therein of their letter and the references to their names and letters in the form and context in which they respectively appear.

– 125 –

GENERAL INFORMATION

APPENDIX IV

10. GENERAL

(a) The registered office of the Company is situated at Clarendon House, 2 Church Street, Hamilton, HM 11 Bermuda.
(b) The principal place of business of the Company is situated at 2nd Floor, Jade Mansion, 40 Waterloo Road, Yaumatei, Kowloon, Hong Kong.
(c) The registered office of the Independent Financial Adviser is situated at 8th Floor, Hong Kong Diamond Exchange Building, 8 Duddell Street, Central, Hong Kong.
(d) The branch share registrar and transfer office of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited, with its address at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.
(e) The secretary of the Company is Ms. Patricia Yeung Shuk Kwan. She has been an executive director of the Group since March 1990 following 13 years’ association with ABC Communications Limited as a non-executive director. She is currently Managing Director of the Group and Company Secretary of the Company. She holds a Bachelor of Arts degree from the University of Hong Kong and is also a Chartered Secretary.
(f) The qualified accountant of the Company is Ms. Ho Sze Ngar. She is the Finance and Administration Manager of the Group. She graduated from Hong Kong University of Science & Technology with a bachelor’s degree (Honours) in Business Administration-Accounting. An associate of the Hong Kong Institute of Certified Public Accountants and a fellow of the Association of Chartered Certified Accountants, Ms. Ho has over 10 years’ experience in audit and finance. She joined the Group in April 2005 and is responsible for overseeing the accounting, finance and corporate functions of the Group.
(g) The English text of this circular and the forms of proxy shall prevail over the Chinese text.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the offices of Stephenson Harwood & Lo, 35th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong from 9:00 a.m. to 1:00 p.m. and from 2:00 p.m. to 5:00 p.m. on any weekday (Saturdays, Sundays and public holidays excepted) up to and including the date of the SGM:

(a) the memorandum of association and bye-laws of the Company;
(b) the letter from the Independent Board Committee, the text of which is set out on page 33 of this circular;

– 126 –

GENERAL INFORMATION

APPENDIX IV

(c) the letter from the Independent Financial Adviser, the text of which is set out on pages 34 to 48 of this circular;
(d) the material contract(s) referred to in paragraph 3 of this Appendix IV;
(e) the annual reports of the Company for each of the two financial years ended 31 March 2007;
(f) the accountant’s report of the Group, the text of which is set out in Appendix I of this circular;
(g) the report from the reporting accountant on unaudited pro forma financial information of the Remaining Group, the text of which is set out in Appendix II of this circular;
(h) the letters of consent given by the experts referred to in the section headed “Qualification of Experts and Experts’ Interests” of this Appendix IV; and
(i) each circular of the Company which has been issued since 31 March 2007.

– 127 –

NOTICE OF SGM

ABC COMMUNICATIONS (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 30)

NOTICE IS HEREBY GIVEN that a special general meeting of the Shareholders of ABC Communications (Holdings) Limited (the “ Company ”) will be held at Peking Room, The American Club Hong Kong, 48th Floor, Exchange Square Two, 8 Connaught Place, Central, Hong Kong on 11 August 2008 at 10:00 a.m. for the purposes of considering and, if thought fit, passing the following resolutions with or without modifications:

ORDINARY RESOLUTIONS

“ THAT :
(a) the terms and conditions of the agreement for sale and purchase of all the shares in ABC Global Limited between the Company as vendor and H.C.B.C. Enterprises Limited as purchaser dated 2 May 2008 (the “ Disposal Agreement ”, a copy of which has been produced to this meeting and marked “A” and initialled by the chairman of the meeting for the purpose of identification) and the transactions contemplated thereunder (details of which are set out in the circular dated 18 July 2008 despatched to the shareholders of the Company (the “ Circular ”), a copy of which has been produced to this meeting and marked “B” and initialled by the chairman of the meeting for the purpose of identification) be and are hereby approved and the execution of the Disposal Agreement by a director of the Company (a “ Director ”) be and is hereby approved, confirmed and ratified in all respects; and
(b) the Directors (or any one of them) be and are hereby authorised to do such acts or things and execute such documents which in their/his/her opinion may be necessary, desirable or expedient to carry out or to give effect to the transactions contemplated under the Disposal Agreement.”
“ THAT , subject to and contingent upon Resolutions 1 and 3 being passed and the completion of the sale under the Disposal Agreement:
(a) the payment of a special dividend of HK$0.5866 (the “ Special Dividend ”) for each ordinary share in the capital of the Company held by the shareholders of the Company as at the date of this Resolution payable at such time and date as the Directors may, in their absolute discretion, determine, amounting to an aggregate of up to approximately HK$273,868,476 be and is hereby approved; and

– 128 –

NOTICE OF SGM

(b) the Directors (or any one of them) be and are hereby authorised to take such steps, make such arrangements, do all such acts and things and exercise such discretion in connection with, relating to or arising from the matters contemplated herein, as they/he/she may from time to time consider necessary, desirable or expedient to give effect to such matters and this Resolution as they/he/she may deem fit.”

SPECIAL RESOLUTION

“ THAT , subject to the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the new shares of HK$0.01 each of the Company and with effect from 9:30 a.m. (Hong Kong time) on the next business day (not being a Saturday) after the date on which this resolution is passed:
(a) the issued share capital of the Company be reduced by cancelling the paid-up capital of the Company to the extent of HK$0.09 on each of the issued shares of the Company of HK$0.10 each so that each of such issued shares shall be treated as one fully paid share of HK$0.01 each and the credit arising from the capital reduction in the books of the Company be transferred to the contributed surplus account of the Company where it may be applied in accordance with the bye-laws of the Company and all applicable laws, including to eliminate the accumulated deficit of the Company (if any);
(b) the authorised but unissued share capital of the Company be sub-divided by sub-dividing each of the authorised but unissued Shares of HK$0.10 each in the capital of the Company into 10 new shares of HK$0.01 each in the capital of the Company; and
(c) the share premium account of the Company be reduced to zero by cancelling the entire amount standing to the credit of the share premium account (in the amount of HK$76,470,297 as at 31 March 2008) and the cancelled amount be transferred to the contributed surplus account of the Company, and the Directors be and are hereby authorised to apply the appropriate sums from such contributed surplus account in accordance with the bye-laws of the Company and all applicable laws, including to eliminate the accumulated deficit of the Company (if any).”

Yours faithfully,

For and on behalf of the board of

ABC Communications (Holdings) Limited Patricia Yeung Shuk Kwan Managing Director

Hong Kong, 18 July 2008

– 129 –

NOTICE OF SGM

Notes:

A member entitled to attend and vote at the meeting convened by the notice is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company.
To be valid, a form of proxy, together with the power of attorney or other authority, under which it is signed or a notarially certified copy of that power of attorney or authority, must be deposited at the Company’s Registrars, Computershare Hong Kong Investor Services Limited of Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.
The register of members will be closed from 7 August 2008 (Thursday) to 11 August 2008 (Monday), both dates inclusive, during which period no transfer of shares will be effected. In order to qualify for attending and voting at the Special General Meeting and to receive the Special Dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Registrars, Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong not later then 4:30 p.m. on 6 August 2008 (Wednesday).
Members are recommended to read the circular of the Company containing information concerning the resolutions proposed in this notice.

– 130 –

AI assistant

YNBY International Limited — Proxy Solicitation & Information Statement 2008

48886_rns_2008-07-17_666ac9a6-7672-4589-8653-b76d5e503a61.pdf

ABC COMMUNICATIONS (HOLDINGS) LIMITED

VERY SUBSTANTIAL DISPOSAL, CONNECTED TRANSACTION AND SPECIAL DEAL – DISPOSAL OF ABC GLOBAL LIMITED

TABLE OF CONTENTS

EXPECTED TIMETABLE

EXPECTED TIMETABLE

DEFINITIONS

DEFINITIONS

DEFINITIONS

“JPY”

DEFINITIONS

DEFINITIONS

ABC COMMUNICATIONS (HOLDINGS) LIMITED

VERY SUBSTANTIAL DISPOSAL, CONNECTED TRANSACTION AND SPECIAL DEAL – DISPOSAL OF ABC GLOBAL LIMITED

1. INTRODUCTION

LETTER FROM THE BOARD

2. SHARE PURCHASE AGREEMENT

2.1 Date

2.2 Parties

2.3 Subject matter

2.4 Consideration

2.5 Conditions precedent

2.6 Completion

2.7 Warranties as to remaining cash and adjustment to consideration under the Disposal Agreement

3. DISPOSAL AGREEMENT

3.1 Date

3.2 Parties

3.3 Subject matter

3.4 Restructuring

(a) The Continuing Business

3.5 Consideration

LETTER FROM THE BOARD

3.6 Conditions precedent

3.7 Completion

4. SPECIAL DIVIDEND

5. CAPITAL REORGANISATION

6. THE OFFER

7. REASONS FOR AND BENEFITS OF THE TRANSACTIONS

8. COMPLIANCE WITH RULES 13.24 AND 14.82

9. INFORMATION ON THE OFFEROR

10. INTENTION OF THE OFFEROR REGARDING THE REMAINING GROUP

11. FINANCIAL EFFECTS OF THE DISPOSAL AGREEMENT

LETTER FROM THE BOARD

12. MANAGEMENT DISCUSSION AND ANALYSIS ON THE REMAINING GROUP

12.1 Financial review

QuotePower

QuickSilver

12.2 Prospects

12.3 Gearing Ratio

12.4 Capital Structure

12.5 Significant Investment

12.6 Material Acquisitions and Disposals

12.7 Foreign Exchange Exposure

12.8 Charge on Group’s Assets

12.9 Contingent Liability

12.10 Employee Information and Remuneration Policies

13. PROPOSED CHANGE OF BOARD COMPOSITION OF THE COMPANY

14. LISTING RULES AND TAKEOVERS CODE IMPLICATIONS

14.1 Special deal

14.2 Connected transaction

14.3 Very substantial disposal

14.4 Abstaining from voting

15. CORPORATE STRUCTURE AND SHAREHOLDING OF THE COMPANY BEFORE AND AFTER COMPLETION

16. INFORMATION ON THE GROUP, THE ABC GLOBAL GROUP, THE CHOUDARY GROUP, HCBC COMMUNICATIONS, HCBC ENTERPRISES, HCBC BVI AND GODDARD

16.1 Information on the Group

16.2 Information on the ABC Global Group and the Choudary Group

LETTER FROM THE BOARD

16.3 Information on HCBC Communications

16.4 Information on HCBC Enterprises

16.5 Information on HCBC BVI

16.6 Information on Goddard

17. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

18. SGM

19. RIGHT FOR DEMANDING A POLL

20. GENERAL

ABC COMMUNICATIONS (HOLDINGS) LIMITED

VERY SUBSTANTIAL DISPOSAL, CONNECTED TRANSACTION AND SPECIAL DEAL – DISPOSAL OF ABC GLOBAL LIMITED

Adrian Fu Hau Chak

YNBY International Limited Proxy Solicitation & Information Statement 2008