31 July 2007
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a
licensed securities dealer or registered institutions in securities, bank manager, solicitor, professional accountant or
other professional adviser.
If you have sold or transferred all your shares in Emperor Entertainment Hotel Limited, you should at once
hand this circular to the purchaser or transferee or to the bank or licensed securities dealer or registered institutions
in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or
transferee.

Worthly Strong Investment Limited

(Incorporated in Bermuda with limited liability) (Incorporated in Hong Kong with limited liability)
(Stock Code: 296)
(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING
ACQUISITION OF 10% INTEREST IN NOVA STRATEGIC GROUP
AND
(2) WHITEWASH WAIVER
Financial adviser to the Company
Emperor Capital Limited
Independent financial adviser to the Independent Board Committee
and the Independent Shareholders
CSC Asia Limited
A letter from the Independent Board Committee to the Independent Shareholders is set out on page 20 of this
circular. A letter from CSC Asia Limited, the independent financial adviser to the Independent Board Committee
and the Independent Shareholders, containing its advice to the Independent Board Committee and the Independent
Shareholders in connection with the Acquisition and the Whitewash Waiver is set out on pages 21 to 41 of this
circular.
A notice convening a special general meeting of Emperor Entertainment Hotel Limited to be held at 11:30 a.m. on
Thursday, 16 August 2007 at 28th Floor, Emperor Group Centre, 288 Hennessy Road, Wanchai, Hong Kong is set
out on pages 108 to 109 of this circular. A form of proxy for use at the special general meeting is enclosed. If you
are unable to attend and vote at the special general meeting or any adjourned meeting in person, you are requested
to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it
to the principal office of Emperor Entertainment Hotel Limited at 28th Floor, Emperor Group Centre, 288 Hennessy
Road, Wanchai, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed
for holding the special general meeting or any adjourned meeting. Completion and return of the form of proxy will
not preclude you from attending and voting in person at the special general meeting or any adjourned meeting
should you so wish.
for identification purpose only

CONTENTS
i
Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM THE BOARD

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The First Sale and Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Second Sale and Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Information relating to Nova Strategic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Reasons for and benefits of the Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Financial effect on the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Intentions of Worthly Strong, its associates and
their respective concert parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Effect on shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Whitewash Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Special general meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . 20
LETTER FROM CSC ASIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

APPENDIX I – FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . . . . . . . . 42
APPENDIX II – VALUATION REPORT OF GRAND EMPEROR HOTEL . . . . . . . . . . . . . 84
APPENDIX III – VALUATION REPORT OF THE PROPERTIES
OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

APPENDIX IV – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

DEFINITIONS
1
In this circular, unless the context otherwise requires, the following expressions shall have the
following meanings:
“Acquisition” the acquisition of 10% interest in the Nova Strategic Group by
Courage Wisdom pursuant to the Second Sale and Purchase
Agreement
“Announcement” the joint announcement dated 12 June 2007 issued by the Company
and Emperor International in relation to, inter alia, the Agreements
and the Whitewash Waiver
“Agreements” the First Sale and Purchase Agreement and the Second Sale and
Purchase Agreement
“associates” has the same meaning as defined in the Listing Rules
“AY Trust” The Albert Yeung Discretionary Trust (of which Mr. Albert Yeung
is the founder), a deemed substantial shareholder of the Company,
the eligible beneficiaries of which are family members of Mr.
Albert Yeung
“Charron” Charron Holdings Limited, a company incorporated in the British
Virgin Island and wholly-owned by the AY Trust
“Company” Emperor Entertainment Hotel Limited, an exempted company
incorporated in Bermuda with limited liability, the shares of which
are listed on the Stock Exchange
“connected person(s)” has the meaning ascribed to it in the Listing Rules
“Consideration Shares” the 104,774,846 Shares to be issued by the Company to Courage
Wisdom pursuant to the Second Sale and Purchase Agreement
“Courage Wisdom” Courage Wisdom Investments Limited, a company incorporated
in the British Virgin Islands and a wholly-owned subsidiary of the
Company
“CSC Asia” CSC Asia Limited, a licensed corporation to engage in Type 6
(advising on corporate finance) regulated activity under the SFO,
being the independent financial adviser to the Independent Board
Committee and the Independent Shareholders in relation to the
Second Sale and Purchase Agreement and the Whitewash Waiver
“Directors” directors of the Company
“EIHL Consideration Shares” the 79,433,953 EIHL Shares to be issued by Emperor International
to Lion Empire pursuant to the First Sale and Purchase Agreement

DEFINITIONS
2
“EIHL Independent Shareholders” shareholders of Emperor International other than (i) Charron, its
associates and their respective concert parties and (ii) those who
are involved in or interested in the First Sale and Purchase
Agreement and the EIHL Whitewash Waiver
“EIHL Share(s)” ordinary share(s) of HK$0.01 each in the share capital of Emperor
International
“EIHL Whitewash Waiver” a waiver from the obligation on the part of Charron, Lion Empire,
their respective associates and their respective concert parties to
make a mandatory offer under Rule 26 of the Takeovers Code
pursuant to Note 1 on Dispensation from Rule 26 of the Takeovers
Code
“Emperor International” Emperor International Holdings Limited, an exempted company
incorporated in Bermuda with limited liability, the shares of which
are listed on the Stock Exchange
“Emperor International Group” Emperor International and its subsidiaries
“Executive” the Executive Director of the Corporate Finance Division of the
Securities and Futures Commission and any delegate of the
Executive Director
“First Sale and Purchase the sale and purchase agreement dated 12 June 2007 entered into
Agreement” between the Lion Empire and World Million in relation to the sale
and purchase of the Sale Shares and the Lion Empire Loan
“Great Assets” Great Assets Holdings Limited, a company incorporated in the
British Virgin Islands
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollars
“Hong Kong” the Hong Kong Special Administrative Region of the People’s
Republic of China
“Independent Board Committee” an independent board committee of the Board comprising the
independent non-executive Directors namely Ms. Chan Sim Ling,
Irene, Ms. Chan Wiling, Yvonne and Ms. Wan Chai Ha to advise
the Independent Shareholders on the Second Sale and Purchase
Agreement and the Whitewash Waiver

DEFINITIONS
3
“Independent Shareholders” shareholders of the Company other than (i) Worthly Strong, its
associates and their respective concert parties and (ii) those who
are involved in or interested in the Second Sale and Purchase
Agreement and the Whitewash Waiver
“Independent Third Parties” independent third parties which are not connected persons of the
Company within the meaning of the Listing Rules
“Latest Practicable Date” 27 July, 2007 being the latest practicable date prior to the printing
of this circular for the purpose of ascertaining certain information
contained in the circular
“Lion Empire” Lion Empire Investments Limited, a company incorporated in the
British Virgin Islands with limited liability and indirectly wholly-
owned by the AY Trust
“Lion Empire Loan” all outstanding loans due from Nova Strategic to Lion Empire as
at the date of completion of the First Sale and Purchase Agreement
“Listing Rules” the Rules Governing the Listing of Securities on the Stock
Exchange
“Macau” the Macau Special Administrative Region of the People’s Republic
of China
“Mr. Albert Yeung” Mr. Yeung Sau Shing, Albert, founder of the AY Trust and spouse
of Ms. Semon Luk
“Ms. Semon Luk” Ms. Luk Siu Man, Semon, a non-executive Director and
Chairperson of the Company
“Nova Strategic” Nova Strategic Limited, a company incorporated in the British
Virgin Islands with limited liability
“Nova Strategic Group” Nova Strategic and its subsidiaries
“Placing” the placing of 282,634,000 EIHL Shares pursuant to the Placing
Agreement
“Placing Agents” 3V Capital Limited and Emperor Securities Limited
“Placing Agreement” the placing agreement dated 12 June 2007 entered into between
Charron, 3V Capital Limited and Emperor Securities Limited in
relation to the placing of 282,634,000 EIHL Shares at a placing
price of HK$2.15 per EIHL Share

DEFINITIONS
4
“Placing Price” the placing price of HK$2.15 per EIHL Share
“Pro forma Completion Account” the unaudited pro forma consolidated balance sheet of the Nova
Strategic Group as at completion of the First Sale and Purchase
Agreement and the Second Sale and Purchase Agreement
“Sale Shares” the 10 shares of US$1.00 each in the share capital of Nova
Strategic, representing 10% of the entire issued share capital of
Nova Strategic
“Second Sale and Purchase the sale and purchase agreement dated 12 June 2007 entered into
Agreement” between the World Million and Courage Wisdom in relation to
the sale and purchase of the Sale Shares and the World Million
Loan
“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of
Hong Kong)
“SGM” the special general meeting of the Company to be held at 11:30
a.m. on 16 August 2007
“Share(s)” ordinary share(s) of HK$0.0001 each in the share capital of the
Company
“Subscription” the subscription of 282,634,000 new EIHL Shares by Charron
“Subscription Agreement” the subscription agreement dated 12 June 2007 entered into
between Charron and Emperor International for the subscription
of 282,634,000 new EIHL Shares by Charron
“Subscription Shares” the 282,634,000 new EIHL Shares to be subscribed by Charron
pursuant to the Subscription Agreement
“Stock Exchange”

6
LETTER FROM THE BOARD


(Incorporated in Bermuda with limited liability)
(Stock Code: 296)
Directors: Registered office:
Luk Siu Man, Semon
#
(Chairperson) Clarendon House,
Wong Chi Fai
+
Church Street,
Fan Man Seung, Vanessa
+
Hamilton HM 11,
Mok Fung Lin, Ivy
+
Bermuda
Chan Sim Ling, Irene
Chan Wiling, Yvonne Principal Office:
Wan Choi Ha 28th Floor,
Emperor Group Centre,
+
Executive Director 288 Hennessy Road,
#
Non-executive Director Wanchai,
Independent Non-executive Director Hong Kong
31 July 2007
To the Shareholders
Dear Sir/Madam,
(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING
ACQUISITION OF 10% INTEREST IN NOVA STRATEGIC GROUP
AND
(2) WHITEWASH WAIVER
INTRODUCTION

It was announced in the Announcement that:
(a) World Million (a wholly-owned subsidiary of Emperor International) entered into the First
Sale and Purchase Agreement on 12 June 2007 with Lion Empire (a company wholly-owned
by the AY Trust) for the acquisition of the Sale Shares and the Lion Empire Loan (which
together represents 10% interest in the Nova Strategic Group) from Lion Empire.
for identification purpose only

7
LETTER FROM THE BOARD

(b) World Million (a wholly-owned subsidiary of Emperor International) entered into the Second
Sale and Purchase Agreement on 12 June 2007 with Courage Wisdom (a wholly-owned
subsidiary of the Company) for the sale and purchase of the Sale Shares and the World
Million Loan (which together represent 10% interest in the Nova Strategic Group to be
owned by World Million as at completion of the First Sale and Purchase Agreement) from
World Million.
The purpose of this circular is to provide you with (i) further information regarding the details of
the First Sale and Purchase Agreement, the Second Sale and Purchase Agreement and the Whitewash
Waiver; (ii) the letter of advice from CSC Asia to the Independent Board Committee and the Independent
Shareholders in relation to the Second Sale and Purchase Agreement and the Whitewash Waiver; (iii) the
recommendation of the Independent Board Committee to the Independent Shareholders in relation to the
Second Sale and Purchase Agreement and the Whitewash Waiver and (iv) a notice convening the SGM at
which the necessary resolutions will be proposed to seek your approval for the above matters.
THE FIRST SALE AND PURCHASE AGREEMENT

Parties
Vendor : Lion Empire, a company incorporated in the British Virgin Islands,
which is principally engaged in investment holding and wholly-owned
by the AY Trust, and therefore a connected person of Emperor
International within the meaning of the Listing Rules
Purchaser : World Million, a company incorporated in the British Virgin Islands
and a wholly-owned subsidiary of Emperor International
Assets to be acquired
Sale Shares : 10 shares of US$1.00 each in the share capital of Nova Strategic,
representing 10% of the entire issued share capital of Nova Strategic.
The remaining 90% of the issued share capital of Nova Strategic is
owned by Courage Wisdom, a wholly-owned subsidiary of the
Company.
Lion Empire Loan : all the outstanding loans due from Nova Strategic to Lion Empire as
at the date of completion of the First Sale and Purchase Agreement.
Consideration and payment term
The consideration for the Sale Shares shall be 10% of the consolidated net asset value of the
Nova Strategic Group as at completion of the First Sale and Purchase Agreement as shown in the
Pro forma Completion Account after adjusting for:
(1) the valuation of the Grand Emperor Hotel to HK$2,060,000,000 (which is agreed by
the parties with reference to the valuation of the Grand Emperor Hotel by an
independent valuer);

8
LETTER FROM THE BOARD

(2) the difference between the contractual amount and the carrying value of the amounts
due to minority shareholders of a subsidiary which was arisen as a result of the
adoption of Hong Kong Accounting Standard 39; and
(3) deferred taxation relating to the fair value change recognized for the Grand Emperor
Hotel calculated in accordance with Hong Kong Standard Interpretations Committee
Interpretation 21.
The parties consider that net asset value would form a fair and objective base to determine
the consideration of the Sale Shares given that the operation of the Nova Strategic Group has only
a limited track record of operation i.e. since January 2006 when the Grand Emperor Hotel was first
opened. Other price determination methods such as earnings multiple or discount cashflow, etc
may be subject to a limitation that only information on a rather short track record period is being
available.
The consideration for the Lion Empire Loan shall be its face value as at completion of the
First Sale and Purchase Agreement. It is expected that the aggregate consideration for the Sale
Shares and the Lion Empire Loan as at completion of the First Sale and Purchase Agreement will
not be less than HK$170,783,000.
The consideration of the First Sale and Purchase Agreement will be satisfied by the allotment
and issue of 79,433,953 EIHL Consideration Shares by Emperor International to Lion Empire at an
issue price of HK$2.15 per EIHL Consideration Share, which is equivalent to the Placing Price
payable by the placees under the Placing Agreement. The issue price of HK$2.15 per EIHL
Consideration Share represents a discount of approximately 6.11% to the closing price of HK$2.29
per EIHL Share (“EIHL Last Closing Price”) as quoted on the Stock Exchange on 7 June 2007,
being the last trading day before the publication of the Announcement and a discount of
approximately 13.65% to the closing price of HK$2.49 per EIHL Share as quoted on the Stock
Exchange on the Latest Practicable Date. The 79,433,953 EIHL Consideration Shares to be issued
is based on the estimated consideration of HK$170.783 million (“Estimated Consideration”) and
represent approximately 5.62% of the existing issued share capital of Emperor International and
approximately 4.47% of the issued share capital of Emperor International enlarged by the
Subscription Shares and the EIHL Consideration Shares. Based on the EIHL Last Closing Price,
the aggregate market value of the EIHL Consideration Shares will be approximately
HK$181,903,752.37. If the final consideration as at completion of the First Sale and Purchase
Agreement is more/less than the Estimated Consideration, the difference will be settled by the
parties by way of cash payment.
Application has been made to the Stock Exchange for the listing of, and permission to deal
in, the EIHL Consideration Shares.

9
LETTER FROM THE BOARD

Conditions
The First Sale and Purchase Agreement is conditional upon, amongst others:
(a) the passing by the EIHL Independent Shareholders of resolution(s) at a special general
meeting to be convened to approve (i) the First Sale and Purchase Agreement and the
transactions contemplated thereunder including the allotment and issue of the
79,433,953 EIHL Consideration Shares and (ii) the EIHL Whitewash Waiver;
(b) the Stock Exchange having granted the listing of, and permission to deal in, the EIHL
Consideration Shares;
(c) the Executive having granted the EIHL Whitewash Waiver;
(d) the consideration of the First Sale and Purchase Agreement is less than
HK$819,829,000 (the amount of consideration which will result in the First Sale and
Purchase Agreement becoming a major transaction for Emperor International under
the Listing Rules); and
(e) the Second Sale and Purchase Agreement becoming unconditional save as regards
any condition requiring the First Sale and Purchase Agreement to become
unconditional.
If the conditions are not fulfilled or waived by World Million by 31 December 2007 or such
other date as may be agreed between the parties to the First Sale and Purchase Agreement, the
First Sale and Purchase Agreement will cease to be of any effect save for any antecedent breach.
Completion
Completion of the First Sale and Purchase Agreement will take place within seven days
after the satisfaction of the above conditions or the waiver thereof (as applicable).
THE SECOND SALE AND PURCHASE AGREEMENT

Parties
Vendor : World Million, a company incorporated in the British Virgin Islands,
which is principally engaged in investment holding and wholly-owned
by Emperor International. Emperor International Group is currently
interested in 34.82% shareholding interest in the Company. World
Million is therefore a connected person of the Company within the
meaning of the Listing Rules.
Purchaser : Courage Wisdom, a company incorporated in the British Virgin Islands
and a wholly-owned subsidiary of the Company.

10
LETTER FROM THE BOARD

Assets to be acquired
Sale Shares : 10 shares of US$1.00 each in the share capital of Nova Strategic,
representing 10% of the entire issued share capital of Nova Strategic.
World Million Loan : all the outstanding loans due from Nova Strategic to World Million as
at the date of completion of the Second Sale and Purchase Agreement.
Consideration and payment term
The consideration for the Sale Shares shall be 10% of the consolidated net asset value of
Nova Strategic Group as at completion of the Second Sale and Purchase Agreement as shown in
the Pro forma Completion Account after adjusting for:
(1) the valuation of the Grand Emperor Hotel to HK$2,060,000,000 (which is agreed by
the parties with reference to the valuation of the Grand Emperor Hotel by an
independent valuer).
(2) the difference between the contractual amount and the carrying value of the amount
due to minority shareholders of a subsidiary which was arisen as a result of the
adoption of Hong Kong Accounting Standard 39; and
(3) deferred taxation relating to the fair value change recognized for the Grand Emperor
Hotel calculated in accordance with Hong Kong Standard Interpretations Committee
Interpretation 21.
The consideration for the World Million Loan shall be its face value as at completion of the
Second Sale and Purchase Agreement. It is expected that the aggregate consideration for the Sale
Shares and the World Million Loan as at completion of the Second Sale and Purchase Agreement
will not be less than HK$170,783,000.
The consideration of the Second Sale and Purchase Agreement will be satisfied by the
allotment and issue of 104,774,846 Consideration Shares by the Company to World Million at an
issue price of HK$1.63 per Consideration Share, which is equivalent to the closing price of the
Shares as quoted on the Stock Exchange on 7 June 2007, being the last trading day before the
publication of the Announcement. The 104,774,846 Consideration Shares to be issued is based on
the Estimated Consideration of HK$170.783 million. If the final consideration as at completion of
the Second Sale and Purchase Agreement is more/less than the Estimated Consideration, the
difference will be settled by the parties by way of cash payment.
The latest available transacted price of the EIHL Shares was the Placing Price while the
latest available transacted price of the Shares was the last closing price of the Shares quoted on the
Stock Exchange on 7 June 2007 (“EEH Last Closing Price”). The parties agreed to determine the
issue prices of the EIHL Consideration Shares and the Consideration Shares at the respective latest
available transacted price of the EIHL Shares and the Shares. As such, the issue price of the EIHL
Consideration Shares was agreed at the Placing Price which was at 6.11% discount to EIHL Last

11
LETTER FROM THE BOARD

Closing Price while the issue price of the Consideration Shares was agreed at the EEH Last
Closing Price. Taking into account of the share price performance of the EIHL Shares and the
Shares during the last few months, the Directors consider the basis of the reference price for
determining the issue prices of the EIHL Consideration Shares and the Consideration Shares fair
and reasonable.
Application has been made to the Stock Exchange for the listing of, and permission to deal
in, the Consideration Shares.
Conditions
The Second Sale and Purchase Agreement is conditional upon, amongst others:
(a) the passing by Independent Shareholders of resolution(s) at a special general meeting
to be convened to approve (i) the Second Sale and Purchase Agreement and the
transactions contemplated thereunder including the allotment and issue of the
104,774,846 Consideration Shares and (ii) the Whitewash Waiver;
(b) the Stock Exchange having granted the listing of, and permission to deal in, the
Consideration Shares;
(c) the Executive having granted the Whitewash Waiver;
(d) the final consideration of the Second Sale and Purchase Agreement is less than
HK$396,120,000 (the amount of consideration which will result in the Second Sale
and Purchase Agreement becoming a major transaction for the Company under the
Listing Rules); and
(e) the First Sale and Purchase Agreement becoming unconditional save as regards any
condition requiring the Second Sale and Purchase Agreement to become unconditional.
If the conditions are not fulfilled or waived by Courage Wisdom by 31 December 2007 or
such other date as may be agreed between the parties to the Second Sale and Purchase Agreement,
the Second Sale and Purchase Agreement will cease to be of any effect save for any antecedent
breach.
Completion
Completion of the Second Sale and Purchase Agreement will take place within seven days
after the satisfaction of the above conditions or the waiver thereof (as applicable). The completion
of the Second Sale and Purchase Agreement and the issue of 104,774,846 Consideration Shares
will not result in any change of control of the Company.

12
LETTER FROM THE BOARD

Implication of the Listing Rules
As World Million is a connected person of the Company within the meaning of the Listing
Rules, the Second Sale and Purchase Agreement constitutes a discloseable and connected transaction
for the Company based on the percentage ratios calculations under the Listing Rules. As the
consideration for the Second Sale and Purchase Agreement is more than HK$10,000,000 and the
relevant percentage ratios are greater than 2.5%, the Second Sale and Purchase Agreement is
subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the
Listing Rules and the approval of the Independent Shareholders in accordance with Rule 14A.48
of the Listing Rules.
INFORMATION RELATING TO NOVA STRATEGIC

Nova Strategic is owned as to 90% by the Company and as to 10% by Lion Empire and it is an
investment holding company with its subsidiaries holding 50% interest in the Grand Emperor Hotel in
Macau and managing two VIP halls in the Grand Emperor Hotel. The Grand Emperor Hotel is a five-star
hotel located at the heart of Macau’s city centre with about 300 hotel rooms, comprehensive entertainment
and dining facilities, and casino operations with over 136,000 square feet of gaming space spreading over
seven floors.
The Group acquired 90% interest in Great Assets and certain of its subsidiaries in January 2005
with the remaining 10% interest owned by Lion Empire. Great Assets and its subsidiaries were then
interested in 50% interest in the Grand Emperor Hotel. Details of these transactions can be found in the
announcement dated 18 November 2004 and a circular dated 10 December 2004 respectively of the
Company. Subsequently through a corporate restructuring in January 2006, Nova Strategic became the
holding company of Great Assets and its subsidiaries.
The consolidated net asset value of the Nova Strategic Group before and after minority interests as
at 31 March 2007 extracted from the audited consolidated financial statements of the Company for the
year ended 31 March 2007 were approximately HK$826.0 million and HK$430.6 million respectively.
The consolidated profit (or loss) before and after taxation of the Nova Strategic Group for the three
financial years ended 31 March 2007 extracted from the audited consolidated financial statements of the
Company for the three financial years ended 31 March 2007 were as follows:
For the year ended
31 March
2005 2006 2007

HK$’000 HK$’000 HK$’000
Profit/(loss) before taxation (855) 392,404 424,554
Profit/(loss) after taxation but before
minority interests (855) 340,450 390,451
Profit/(loss) after taxation and
minority interests (432) 148,601 282,027

13
LETTER FROM THE BOARD

The above financial figures are extracted from the audited consolidated financial statements of the
Company which is prepared in accordance with the Hong Kong Financial Reporting Standards, Hong
Kong Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified Public
Accountants.
The shareholding structures of the Nova Strategic Group immediately before and after the completion
of the Agreements and the Placing and Subscription are set out below.
(i) Simplified structure of the existing shareholding of Nova Strategic.
AY Trust
Emperor
International
Charron
Worthly Strong World Million
Company
Courage Wisdom Lion Empire
100%
57.55%
100% 100%
34.82%
100%
90%
100%
10%
Nova Strategic
50% 100%
Grand Emperor Hotel
Management
of VIP halls

14
LETTER FROM THE BOARD

(ii) Simplified shareholding structure of Nova Strategic immediately after completion of the
Agreements and the Placing and the Subscription.
50.29% (Note 1)
41.43% (Note 2)
100%
100%
50% 100%
AY Trust
Emperor
International
Company
Courage Wisdom
Nova Strategic
Grand Emperor Hotel
Management
of VIP halls
Note:
(1) Aggregate shareholding interest of Charron and Lion Empire.
(2) Aggregate shareholding interest of Worthly Strong and World Million.
REASONS FOR AND BENEFITS OF THE AGREEMENTS

Emperor International is an investment holding company and its subsidiaries are principally engaged
in property investment and development as well as hotel operation. The Emperor International Group is
also interested in 34.82% shareholding interest in the Company.
The Company is an investment holding company and its subsidiaries are principally engaged in (i)
hotel operation and management of VIP halls in Macau and (ii) development of a commercial property in
Shanghai.
As stated in the annual report for the year ended 31 March 2007 of the Company, since the
commencement of business in January 2006, the Grand Emperor Hotel has quickly established its brand-
name in the gaming market in Macau. Despite intensifying industry competition with the arrival of
several new players in the market, the Nova Strategic Group recorded turnover of approximately HK$1.2
billion for the year ended 31 March 2007 as compared to HK$207.9 million for the year ended 31 March
2006, and its segment profit covering both hotel and gaming operations reached approximately HK$463.5
million for the year ended 31 March 2007 as compared to HK$386.5 million for the last corresponding
year. The Agreements allow the Company to further increase its investment in the Grand Emperor Hotel

15
LETTER FROM THE BOARD

and its related operations. The Agreements also allow Emperor International to increase its shareholding
interest in the Company as well as indirectly enjoying the benefit of the Company’s increase in the
investment in the Grand Emperor Hotel. The entering into the Agreements instead of disposing of Lion
Empire’s interest in the Nova Strategic Group directly to the Company enables the AY Trust to streamline
its investments in and the corporate structure of Emperor International and the Company. The Directors
see the great potential of the hotel operation as the Macau government has been boosting its tourist
industry during these years and consider the Agreements are in the interests of the Company and the
Shareholders as a whole.
FINANCIAL EFFECT ON THE GROUP

Net assets and Total equity
Upon completion of the Acquisition and based on the Estimated Consideration of HK$170.783
million, the net assets of the Group will increase by approximately HK$116.6 million and the minority
interests of the Group will reduce by approximately HK$54.2 million. The share capital and share
premium of the Company will increase by approximately HK$0.01 million and approximately HK$170.77
million respectively.
Earnings
After the Acquisition, the Group’s earnings will be adjusted by the results of the Nova Strategic
Group previously attributable to Lion Empire. For illustration, assuming the Acquisition has been completed
as of 1 April 2006 and with reference to the unaudited consolidated profits of approximately HK$282.0
million of the Nova Strategic Group for the year ended 31 March, 2007, the Group’s earnings will
increase by approximately HK$28.2 million representing 10% share of the unaudited consolidated profits
of the Nova Strategic Group for the year.
Cash flow
Pursuant to the Second Sale and Purchase Agreement, if the final consideration (“Final
Consideration”) as at the completion of the Acquisition is more/less than the Estimated Consideration,
the difference will be settled by the parties by way of cash payment. Therefore, the cash flow impact on
the Acquisition to the Group will be the difference between the Estimated Consideration and the Final
Consideration, if any.
Gearing ratio
Gearing ratio (expressed as percentage of total borrowings over total assets) of the Group
immediately after the Acquisition will improve due to the decrease in total borrowings and the increase
in total assets.
INTENTIONS OF WORTHLY STRONG, ITS ASSOCIATES AND THEIR RESPECTIVE CONCERT
PARTIES

Worthly Strong, its associates and their respective concert parties intend to continue the existing
business of the Group of hotel operations in Macau and development of the property in Shanghai.

16
LETTER FROM THE BOARD

Worthly Strong, its associates and their respective concert parties will continue to build on the
strength and expertise of the business and continue to identify suitable investment opportunities with a
view to further develop the Group’s business, strengthen its income and asset base and maximize
shareholders’ return. There is no intention to introduce any major change in the business, including any
redeployment of the fixed assets or the continue employment of the employees of the Group as a result of
the Acquisition.
EFFECT ON SHAREHOLDING

The shareholding structures of Emperor International before and after the Placing and Subscription
and the First Sale and Purchase Agreement are set out below.
Before the Placing, After the Placing After the Placing and
the Subscription but before the Subscription After the Placing and
and the First Sale Subscription and the but before the Subscription and the
and Purchase First Sale and First Sale and First Sale and
Agreement Purchase Agreement Purchase Agreement Purchase Agreement
No. of Shares % No. of Shares % No. of Shares % No. of Shares %
Charron 813,301,411 57.55 530,667,411 37.55 813,301,411 47.96 813,301,411 45.81
Lion Empire – – – – – – 79,433,953 4.47
Subtotal for the AY Trust
and its concert parties 813,301,411 57.55 530,667,411 37.55 813,301,411 47.96 892,735,364 50.29
Penta 254,524,000 18.01 254,524,000 18.01 254,524,000 15.01 254,524,000 14.34
Placees – – 282,634,000 20.00 282,634,000 16.67 282,634,000 15.92
Public 345,352,770 24.44 345,352,770 24.44 345,352,770 20.37 345,352,770 19.45
Total 1,413,178,181 100.00 1,413,178,181 100.00 1,695,812,181 100.00 1,775,246,134 100.00
The shareholding structures of the Company before and after the Second Sale and Purchase
Agreement are set out below.
After the Second
Sale and
Existing Purchase Agreement
No. of Shares % No. of Shares %
Worthly Strong 323,391,555 34.82 323,391,555 31.29
World Million – – 104,774,846 10.14
Subtotal for the AY Trust and
its concert parties 323,391,555 34.82 428,166,401 41.43
Public 605,380,425 65.18 605,380,425 58.57
Total 928,771,980 100.00 1,033,546,826 100.00

17
LETTER FROM THE BOARD

As at the Latest Practicable Date, the authorised share capital of the Company was HK$200,000,000
divided into 2,000,000,000,000 Shares among which 928,771,980 Shares have been issued and are fully
paid or credited as fully paid as at 31 March 2007, being the last financial year end date. The Company
has not issued any new Shares since 31 March 2007 and up to the Latest Practicable Date. Upon
completion of the Second Sale and Purchase Agreement, the total issued share capital of the Company
will be 1,033,546,826 Shares. All the existing issued Shares rank pari passu in all respects including all
rights as to dividends, voting and return on capital.
As at the Latest Practicable Date, save for the 10,000,000 options in aggregate granted to two
Directors, the Company had no share options, warrants or other convertible securities outstanding.
The Consideration Shares, when issued and fully paid, will rank pari passu in all respects (including
as to dividends, voting rights and return of capital) among themselves and with the shares of the Company
in issue at the time of issue and allotment of the Consideration Shares. The Consideration Shares are to
be issued cum dividend and other distribution which will be declared, made or paid on or after the date of
its allotment and issue. The Company has applied to the Listing Committee of the Stock Exchange for
the listing of and permission to deal in the Consideration Shares.
WHITEWASH WAIVER

Worthly Strong and World Million are indirect wholly-owned subsidiaries of Emperor International.
As at the Latest Practicable Date, Emperor International was owned as to 45.41% by Charron which was
in turn indirectly wholly-owned by the AY Trust. Worthly Strong, World Million, their respective associates
and their respective concert parties are beneficially interested in (i) 323,391,555 Shares, representing
approximately 34.82% of the issued share capital of the Company as at the Latest Practicable Date and
(ii) approximately 41.43% of the issued share capital of the Company upon completion of the Second
Sale and Purchase Agreement. Accordingly, Worthly Strong, World Million, their respective associates
and their respective concert parties would normally be required to make a mandatory general offer for the
Shares not owned by them under Rule 26 of the Takeovers Code.
Application has been made by Worthly Strong, World Million, their respective associates and their
respective concert parties to the Executive for the Whitewash Waiver pursuant to Note 1 on Dispensations
from Rule 26 of the Takeovers Code.
The Executive has indicated it will agree, subject to the approval by the Independent Shareholders
on a vote taken by way of a poll, to waive Worthly Strong and World Million, their associates and their
respective concert parties from any obligation to make a general offer which might result from the
allotment and issue of the Consideration Shares.
Save for the Second Sale and Purchase Agreement, none of Worthly Strong, World Million, their
respective associates and their respective concert parties has any dealings in the Shares during the six
months period prior to the date of the Announcement and up to the Latest Practicable Date. Save as the
aforesaid, none of the directors of the Company and their associates has any dealings in the Shares
during the six months period prior to the date of the Announcement and up to the Latest Practicable Date.

18
LETTER FROM THE BOARD
SPECIAL GENERAL MEETING

The SGM will be held at 28th Floor, Emperor Group Centre, 288 Hennessy Road, Wanchai, Hong
Kong at 11:30 a.m. on Thursday, 16 August, 2007. A notice convening the SGM is set out on pages 108
to 109 of this circular. Resolutions will be proposed at the SGM for the Independent Shareholders to
approve the Second Sale and Purchase Agreement and the Whitewash Waiver by way of poll. Worthly
Strong, its associates and parties acting in concert with it will abstain from voting on the resolutions to
approve the Second Sale and Purchase Agreement and the Whitewash Waiver. The results of the SGM
will be published after the SGM.
Enclosed is a form of proxy for use at the SGM. Whether or not you intend to attend and vote at
the SGM in person, you are requested to complete and return the enclosed form of proxy in accordance
with the instructions printed thereon and return it to the principal office of the Company at 28th Floor,
Emperor Group Centre, 288 Hennessy Road, Wanchai, Hong Kong as soon as possible, but in any event
not less than 48 hours before the time appointed for holding such meeting or any adjourned meeting.
Completion and return of the form of proxy will not preclude you from attending and voting in person at
the SGM or any adjourned meeting should you so wish.
RECOMMENDATION

An Independent Board Committee, comprising Ms. Chan Sim Ling, Irene, Ms. Chan Wiling,
Yvonne, Ms. Wan Choi Ha, all being independent non-executive Directors who are not interested in nor
involved in the Second Sale and Purchase Agreement and the Whitewash Waiver, has been formed to
advise the Independent Shareholders on the Second Sale and Purchase Agreement and the Whitewash
Waiver. Ms. Semon Luk, a non-executive Director, is the spouse of Mr. Albert Yeung who is the founder
of the AY Trust. Worthly Strong and World Million are indirect wholly-owned subsidiaries of Emperor
International. Emperor International is owned as to 45.41% by Charron as at the Latest Practicable Date.
Charron is in turn indirectly wholly-owned by the AY Trust. Ms. Semon Luk is therefore considered to be
interested in the Second and Purchase Agreement and the Whitewash Waiver by virtue of the indirect
interest of the AY Trust in Worthly Strong and World Million and hence is not included as a member of
the Independent Board Committee.
CSC Asia has been appointed as the independent financial adviser to advise the Independent Board
Committee and the Independent Shareholders with regard to the Second Sale and Purchase Agreement
and the Whitewash Waiver. The appointment of CSC Asia has been approved by the Independent Board
Committee. CSC Asia considers the terms of the Second Sale and Purchase Agreement and the Whitewash
Waiver to be fair and reasonable so far as the Independent Shareholders are concerned and are in the
interest of the Company and the Shareholders as a whole. The text of the letter of the advice from CSC
Asia containing its recommendation and the principal factors it has taken into account in arriving at its
recommendation are set out on pages 21 to 41 of this circular.
The Independent Board Committee, having taken into account the advice of CSC Asia, considers
the Second Sale and Purchase Agreement and the Whitewash Waiver fair and reasonable and are in the
interest of the Company and the Shareholders. Accordingly, the Independent Board Committee recommends
that the Independent Shareholders to vote in favour of the resolutions set out in the notice of the SGM to
approve the Second Sale and Purchase Agreement and the Whitewash Waiver. The full text of the letter
from the Independent Board Committee is set out on page 20 of this circular.

19
LETTER FROM THE BOARD
ADDITIONAL INFORMATION

Your attention is drawn to the letter from the Independent Board Committee, the letter of advice
from CSC Asia, and the information set out in the Appendices to this circular.
By Order of the Board
Emperor Entertainment Hotel Limited
Luk Siu Man, Semon
Chairperson

20
LETTER FROM THE INDEPENDENT BOARD COMMITTEE


(Incorporated in Bermuda with limited liability)
(Stock Code: 296)
31 July 2007
To the Independent Shareholders
Dear Sir or Madam,
(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING
ACQUISITION OF 10% INTEREST IN NOVA STRATEGIC GROUP
AND
(2) WHITEWASH WAIVER
We have been appointed as members of the Independent Board Committee to advise you in
connection with the Second Sale and Purchase Agreement and the Whitewash Waiver, details of which
are set out in the letter from the Board in the Company’s circular dated 31 July 2007 to the Shareholders
(the “Circular”), of which this letter forms a part. Terms used in this letter shall have the same meaning
as defined in the Circular unless the context otherwise requires.
Your attention is drawn to the “Letter from CSC Asia”, containing its advice to us and the
Independent Shareholders regarding the fairness and reasonableness of the terms and conditions of the
Second Sale and Purchase Agreement and the Whitewash Waiver as set out on pages 21 to 41 of the
Circular. Your attention is also drawn to the letter from the Board set out on pages 6 to 19 of the Circular
and the additional information set out in the Appendices to the Circular.
Having considered the advice and recommendation of CSC Asia, we consider the terms and
conditions of the Second Sale and Purchase Agreement and the Whitewash Waiver are fair and reasonable
so far as the Independent Shareholders are concerned and are in the interest of the Company and its
Shareholders as a whole. We, therefore, recommend the Independent Shareholders to vote in favour of
the relevant resolutions to be proposed at the SGM to approve the Second Sale and Purchase Agreement
and the Whitewash Waiver.
Yours faithfully
Emperor Entertainment Hotel Limited
Chan Sim Ling, Irene Chan Wiling, Yvonne Wan Choi Ha
Independent Board Committee
for identification purpose only

21
LETTER FROM CSC ASIA

The following is the text of a letter of advice from CSC Asia which has been prepared for the
purpose of incorporation into this circular, setting out its advice to the Independent Board Committee
and the Independent Shareholders in relation to the Second Sale and Purchase Agreement and the
Whitewash Waiver.
CSC Asia Limited
Units 3204-07, 32/F
Cosco Tower
183 Queen’s Road Central
Hong Kong
31 July 2007
To: The independent board committee and
the independent shareholders of Emperor Entertainment Hotel Limited
Dear Sirs,
(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING
ACQUISITION OF 10% INTEREST IN NOVA STRATEGIC GROUP
AND
(2) WHITEWASH WAIVER
INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board
Committee and the Independent Shareholders as to whether the Second Sale and Purchase Agreement and
the Whitewash Waiver are (i) on normal commercial terms; (ii) fair and reasonable; and (iii) in the
interests of the Company and the Shareholders as a whole, and whether or not the Independent Shareholders
should vote in favour of the resolutions to approve the Second Sale and Purchase Agreement and the
Whitewash Waiver at the SGM. Details of the Second Sale and Purchase Agreement and the Whitewash
Waiver are set out in the letter from the Board (the “Letter from the Board”) contained in the circular of
the Company to the Shareholders dated 31 July 2007 (the “Circular”), 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
otherwise requires.
On 12 June 2007, a wholly-owned subsidiary of the Company, Courage Wisdom, which is currently
holding 90% shareholding interest in Nova Strategic, entered into the Second Sale and Purchase Agreement
with World Million for the acquisition of the Sale Shares and the World Million Loan, which represent
10% interest in the Nova Strategic Group to be owned by World Million as at completion of the First
Sale and Purchase Agreement. Upon completion of the Second Sale and Purchase Agreement, via Courage
Wisdom, Nova Strategic will then become an indirectly wholly-owned subsidiary of the Company.

22
LETTER FROM CSC ASIA

Given that World Million is a connected person of the Company within the meaning of the Listing
Rules and the relevant percentage ratios calculated under the Listing Rules in respect of the Second Sale
and Purchase Agreement exceed 2.5%, the Second Sale and Purchase Agreement constitutes a discloseable
and connected transaction for Company under the Listing Rules and is therefore subject to approval of
the Independent Shareholders at the SGM.
Upon completion of the Second Sale and Purchase Agreement and issue of the Consideration
Shares, the aggregate beneficial shareholding interests of Worthly Strong, World Million, their respective
associates and their respective concert parties in the Company will increase from approximately 34.82%
to 41.43%. Accordingly, under Rule 26 of the Takeovers Code, Worthly Strong, World Million, their
respective associates and their respective concert parties will be required to make a mandatory general
offer for all the Shares other than those already owned by Worthly Strong, World Million, their respective
associates and their respective concert parties. An application has been made by Worthly Strong, its
associates and parties acting in concert with it to the Executive for the Whitewash Waiver pursuant to
Note 1 on Dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the
Executive, would be subject to, among other things, the approval of the Independent Shareholders at the
SGM by way of poll.
The Independent Board Committee comprising all the independent non-executive Directors, namely
Ms. Chan Sim Ling, Irene, Ms. Chan Wiling, Yvonne and Ms. Wan Choi Ha, all of whom have neither
involved in nor interested in the Second Sale and Purchase Agreement and the Whitewash Waiver, and
thus being independent, has been established to advise the Independent Shareholders in respect of the
Second Sale and Purchase Agreement and the Whitewash Waiver. Emperor International is owned as to
approximately 45.41% by Charron as at the Latest Practicable Date. Charron is in turn indirectly wholly-
owned by the AY Trust. Ms. Semon Luk, the non-executive Director and the Chairperson of the Company,
is a spouse of Mr. Albert Yeung who is the founder of the AY Trust, and is therefore deemed to be
interested in 323,391,555 Shares held by Worthly Strong by virtue of the AY Trust’s indirect interest in
Emperor International, an indirect holding company of Worthly Strong. Accordingly, Ms. Semon Luk is
not considered to be independent under Rule 2.8 of the Takeovers Code so far as the Whitewash Waiver is
concerned and is therefore excluded as the members of the Independent Board Committee.
We, CSC Asia Limited, have been appointed as the independent financial adviser to advise the
Independent Board Committee and the Independent Shareholders with respect to the Second Sale and
Purchase Agreement and the Whitewash Waiver.
CSC Asia Limited is independent from, and not connected with, the Company or any of its
substantial shareholders, directors or chief executive, or any of their respective associates, and is
accordingly qualified to give independent advice to the Independent Board Committee and the Independent
Shareholders.
BASIS OF OUR OPINION

In formulating our recommendations, we have relied on the information and facts supplied by the
Company and the representations of, the Directors and management of the Company, including those set
out in the Circular. We have assumed that all the information and representations so supplied by the
Company and/or the Directors and all information and representations referred to or contained in the

23
LETTER FROM CSC ASIA

Circular, for which the Company and the Directors are solely and wholly responsible, were true, accurate
and complete at the time they were made and continue to be so as the date hereof. No representation or
warranty, expressed or implied, is made by us on the accuracy of such information or representation. We
have no reason to suspect that any material facts or information have been withheld or to doubt the truth,
accuracy and completeness of the information and facts contained in the Circular, or the reasonableness
of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to
us. The Directors have confirmed, having made all reasonable enquiries, that to the best of their knowledge
and belief, there are no material facts the omission of which would make any statements in the Circular
misleading.
We have also reviewed the independent valuation report prepared by Savills Valuation and
Professional Services Limited (the “Valuer”) in respect of the Grand Emperor Hotel as set out in Appendix
II to the Circular (the “Valuation Report”) and have discussed with the Valuer regarding the valuation of
the Grand Emperor Hotel prepared by it.
We consider that we have reviewed sufficient information and documents to reach an informed
view to justify our reliance on the accuracy of the information contained in the Circular and to provide a
reasonable basis for our recommendations. We have no reason to doubt the truth, accuracy and completeness
of the statements, information, opinions and representations provided to us by the Directors and
management of the Company. We have not, however, conducted any independent investigation into the
businesses or affairs or assets and liabilities or future prospects of the Group, Worthly Strong, World
Million, and their respective associates, nor have we carried out any independent verification of the
information supplied to us.
PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion regarding the Second Sale and Purchase Agreement and the Whitewash
Waiver, we have taken the following principal factors and reasons into consideration:
(A) THE SECOND SALE AND PURCHASE AGREEMENT
1. Background of and reasons for the Acquisition
On 12 June 2007, Courage Wisdom, a wholly-owned subsidiary of the Company, which is
interested in 90% equity interest in Nova Strategic, had entered into the Second Sale and Purchase
Agreement with World Million for the acquisition of the Sale Shares and the World Million Loan,
which represent 10% interest in the Nova Strategic Group to be owned by World Million as at
completion of the First Sale and Purchase Agreement. The First Sale and Purchase Agreement was
entered into on the same date between World Million and Lion Empire. As at the Latest Practicable
date, Lion Empire has an effective 10% interest in Nova Strategic.
The Agreements are inter-conditional. Upon completion of the Second Sale and Purchase
Agreement, Nova Strategic will become an indirectly wholly-owned subsidiary of the Company.

24
LETTER FROM CSC ASIA

(i) Information of the Nova Strategic Group
Overview
As stated in the Letter from the Board, Nova Strategic is an investment holding
company, which is indirectly interested in 50% interest in the Grand Emperor Hotel, a
flagship project of the Group which came into operation in January 2006. The Nova Strategic
Group is also responsible for the management of two VIP halls in the Grand Emperor Hotel.
As at the Latest Practicable Date, Nova Strategic is owned as to 90% by the Company via
Courage Wisdom, and the remaining 10% is owned by Lion Empire. Upon completion of
the First Sale and Purchase Agreement, the remaining 10% of Nova Strategic will be owned
by World Million.
According to the management of the Company, the Grand Emperor Hotel is located at
the heart of the centre of Macau and of short distance from the main ferry terminal of
Macau and is the principal asset of Nova Strategic. As referred to the Valuation Report set
out in Appendix II to the Circular, the Grand Emperor Hotel is a casino/hotel and
accommodates 291 hotel rooms, casino, slotting machines, shops, restaurants and bars,
sauna nightclub as well as parking space with a total gross floor area of 654,835 square feet
(inclusive of car parking area). The market value of the Grand Emperor Hotel as appraised
by the Valuer, was HK$2,060,000,000 as at 31 May 2007.
Financial information
Set out below is the summary of the consolidated financial information of the Nova
Strategic Group extracted from the audited consolidated financial statements of the Company
for the three years ended 31 March 2007 and financial position of the Nova Strategic Group
extracted from the audited consolidated financial statements of the Company as at 31 March
2007 as provided by the Company:
For the year ended
31 March
2005 2006 2007

HK$’000 HK$’000 HK$’000
Profit/ (loss) before taxation (855) 392,404 424,554
Profit/ (loss) after taxation but before
minority interests (855) 340,450 390,451
Profit/(loss) after taxation and minority interests (432) 148,601 282,027
As at 31 March
2005 2006 2007

HK$’000 HK$’000 HK$’000
Net asset value/(liabilities) before minority interests (839) 415,380 825,952
Net asset value/(liabilities) after minority interests (432) 148,593 430,556

25
LETTER FROM CSC ASIA

(ii) Information of the Group
The Group is principally engaged in (i) hotel operation and management of VIP halls
in Macau and (ii) development of a commercial property in Shanghai. As at the Latest
Practicable Date, Nova Strategic is indirectly owned as to 90% by the Company.
Business review
According to the Company’s annual results for the year ended 31 March 2007 (the
“2007 Annual Results”), annual report for the year ended 31 March 2006 (the “2006 Annual
Report”) and interim report for the six months ended 30 September 2006 (the “2006 Interim
Report”), the flagship project of the Group, being the Grand Emperor Hotel, made a solid
debut and contributed cashflow following commencement of its operations in January 2006.
Moreover, with the opening of the Grand Emperor Hotel in January 2006, the Group has
repositioned itself as a full-scale entertainment and leisure conglomerate. The management
considered that the Grand Emperor Hotel had quickly established a significant presence in
Macau. In order to strengthen the Group’s foothold in the gaming market, the Company
would continue to enhance the Group’s entertainment facilities and provide attentive and
differentiated services to enlarge its pool of loyal customers.
Financial review
Set out below is the financial performance of the Group as extracted from the 2007
Annual Results, the 2006 Annual Report and the 2006 Interim Report:
Year ended Six months ended
31 March 30 September
2007 Growth 2006 Growth 2005 2006 2005 Growth
Audited rate Audited rate Audited Unaudited Unaudited rate
HK$’000 times HK$’000 times HK$’000 HK$’000 HK$’000 times
Hotel and gaming operations 1,186,689 4.71 207,901 N/A - 532,106 - N/A
Cruise and cruise-related
operations 123,318 (0.11) 137,895 6.56 18,236 61,183 67,565 (0.09)
Revenue 1,310,007 2.79 345,796 17.96 18,236 593,289 67,565 7.78
Profit before taxation 443,220 0.08 410,153 22.90 17,161 199,185 18,307 9.88
Profit after taxation 409,118 0.14 358,267 19.88 17,161 181,483 11,368 14.96
Profit attributable to
equity holders of
the Company 272,493 0.63 166,794 8.48 17,596 109,222 18,665 4.85

26
LETTER FROM CSC ASIA

As illustrated in the above table, the Group’s results recorded significant improvement
for the year ended 31 March 2006 and six months ended 30 September 2006 as compared
with their corresponding period in 2005. The primary reason for the improvement of the
Group’s operating results in the 2006 financial year was mainly attributable to the contribution
from the Grand Emperor Hotel since its opening in January 2006. The Group’s results for
the year ended 31 March 2007 was the first 12-month financial period in which the Group
had operated as a full-scale gaming and entertainment platform. As illustrated, hotel and
gaming operations continued to provide steady contributions. As advised by the Directors,
the contribution has been principally attributable to the operations of the Grand Emperor
Hotel.
Moreover, it is noted that the revenue generated from the hotel and gaming operations
of the Group recorded approximately HK$532.1 million, HK$207.9 million and HK$1,186.7
million, representing approximately 89.7%, 60.1% and 90.6% of the Group’s total revenue
of approximately HK$593.3 million, HK$345.8 million and HK$1,310.0 million for the six
months ended 30 September 2006 and the two years ended 31 March 2007 respectively.
Accordingly, the operations of the Grand Emperor Hotel have been the Group’s principal
revenue driver since commencement of the Grand Emperor Hotel’s business.
(iii) Reasons for and benefits of the Acquisition
As stated in the Letter from the Board, the Directors consider that the entering into of
the Second Sale and Purchase Agreement will allow the Company to further increase its
investment in the Grand Emperor Hotel and its related operations. The Grand Emperor
Hotel, being the principal asset of the Group, had marked a significant improvement to the
results of the Group since the commencement of the Grand Emperor Hotel’s operations in
January 2006. Since the opening of the Grand Emperor Hotel in January 2006, the Group’s
turnover and profit attributable to equity holders of the Company surged a total of
approximately 278.8% and 63.4% respectively for the year ended 31 March 2007 as compared
to 2006 and approximately 7.78 times and 4.85 times respectively for the six months ended
30 September 2006 as compared to the same period in 2005 indicating that the Grand
Emperor Hotel has been a revenue driver of the Group since commencement of its operations.
In addition, as referred to the 2007 Annual Results and the 2006 Interim Report, it is
the intention of the Company to strengthen the Group’s foothold in the hotel and gaming
operations. As stated in the 2007 Annual Results, the Group had disposed of its cruiser liner
and cruise operations and re-allocated its financial resources and management efforts and
focused on the operation of the Grand Emperor Hotel after the year under review. Accordingly,
the increase of the stake in the Grand Emperor Hotel by entering into of the Second Sale
and Purchase Agreement is line with the Group’s business strategy of strengthening its
foothold in such operations. Moreover, the entering into of the Second Sale and Purchase
Agreement will also enable the Group to enjoy more profit contribution from a revenue
driver, i.e. the operations of the Grand Emperor Hotel.

27
LETTER FROM CSC ASIA

According to the information published by Statistics and Census Service of Macau,
Macau’s gross domestic product (“GDP”) was approximately MOP 83.0 billion, MOP 93.0
billion and MOP 114.4 billion for the year 2004, 2005 and 2006 respectively with respective
growth rate of approximately 30.5%, 12.0% and 23.0%. For the first quarter in year 2007,
the GDP of Macau was approximately MOP 33.2 billion and recorded a growth rate of
approximately 32.9% from corresponding period in 2006.
Gaming revenue in Macau has increased at a five-year compound annual growth rate
(“CAGR”) from 2002 to 2006 of approximately 25.1% to MOP55.9 billion according to
Statistics and Census Service of Macau. For the first quarter of 2007, Macau generated
approximately MOP18.1 billion of gaming revenue, representing a year-on-year increase of
approximately 43.5%.
Regarding development of tourism of Macau, as shown in the statistics published by
Statistics and Census Service of Macau, visitation to Macau increased at a CAGR between
2001 and 2006 of approximately 16.4% to 22.0 million visitors and a growth rate of
approximately 21.5% from 8.8 million visitors for the first five months in 2007 to 10.7
million visitors comparing with the same period in 2006.
Macau’s hotel occupancy grows amidst a strong inbound tourism market. According
to the Statistics and Census Service of Macau, average hotel occupancy rate in 2006 was
72.3%, up by 1.3 percentage points over 2005, and in April 2007, an average hotel occupancy
rate of 79.2% was recorded, representing a year-on-year increase of 1.4 percentage points.
As depicted from the information from the Statistic and Census Service of Macau,
overall market of the tourism and gaming industry in Macau is growing. We have been
advised by the Directors that they are positive on the outlook of the hotel operation in
Macau in view of the boosting of the tourist industry during these years by the Macau
government. In view of the positive figures released by the Macau government, it is reasonable
to believe that the industry of which the Grand Emperor Hotel is operating under shows
promising potential.
Taking into consideration that (i) the Second Sale and Purchase Agreement provides
an opportunity for the Group to increase its investment in the Grand Emperor Hotel, a
revenue driver of the Group, and enjoy more profit contribution; (ii) the Acquisition is in
line with the Group’s business development of increasing its foothold in the hotel and
gaming operation; and (iii) the positive outlook of tourism and gaming industry in Macau of
which the Grand Emperor Hotel is operating under, we consider that the entering into of the
Second Sale and Purchase Agreement is in the interests of the Company and the Shareholders
taken as a whole.

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LETTER FROM CSC ASIA

2. Principal terms of the Second Sale and Purchase Agreement
(i) Consideration
Total consideration for the Second Sale and Purchase Agreement is comprised of the
consideration for (i) the Sale Shares; and (ii) the World Million Loan (the “Consideration”).
The final amount of the Consideration will be ascertained at completion of the Second Sale
and Purchase Agreement (the “Completion Date”) and expected not to be less than
HK$170,783,000 (the “Estimated Consideration”). The Estimated Consideration will be
satisfied by the allotment and issue of the Consideration Shares. In the event the final
consideration as at the Completion Date is more/less than the Estimated Consideration, the
difference will be satisfied by the parties of the Second Sale and Purchase Agreement by
way of cash payment. As advised by the Company, the World Million Loan as at 31 May
2007 amounted to approximately HK$79.6 million. Pursuant to the Second Sale and Purchase
Agreement, the consideration for the World Million Loan shall be its face value, accordingly,
based on the Estimated Consideration, the purchase price for the Sale Shares shall be
approximately HK$91.2 million.
Basis of consideration
As stated in the Letter from the Board, the basis of consideration for the Sale Shares
and the World Million Loan shall be as follows:
Sale Shares
The consideration for the Sale Shares (the “Sale Shares Consideration”) shall
be 10% of the consolidated net asset value of Nova Strategic Group as at the
Completion Date based on the Pro forma Completion Account after adjusting for the
following three adjustments:
• valuation of the Grand Emperor Hotel to HK$2,060,000,000 as prepared
by the Valuer (the “Valuation Adjustment”);
• difference between the contractual amount and carrying value of the
amount due to minority shareholders of a subsidiary arisen as a result of
the adoption of Hong Kong Accounting Standards 39 (the “MI Loan
Adjustment”); and
• deferred taxation relating to the fair value change recognized for the
Grand Emperor Hotel calculated in accordance with Hong Kong Standard
Interpretations Committee Interpretation 21 (the “Deferred Tax
Adjustment”).
World Million Loan
The consideration for the World Million Loan (the “Loan Consideration”) shall
be its face value as at the Completion Date.

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LETTER FROM CSC ASIA

Analysis of the Consideration
In considering whether the Consideration is fair and reasonable, we have considered
the factors set out below:
Sale Shares Consideration
The Sale Shares Consideration shall be 10% of the consolidated net asset value
of Nova Strategic Group as at the Completion Date based on the Pro forma Completion
Account after adjusting for (i) the Valuation Adjustment; (ii) the MI Loan Adjustment;
and (iii) the Deferred Tax Adjustment (collectively, the “Adjustments”).
The Directors are of the opinion that the consolidated net asset value would
form an objective base to determine the Sale Shares Consideration as the Grand
Emperor Hotel has only a limited track record of operation, i.e. since its opening in
January 2006. Having taking into account that the Grand Emperor Hotel is the principal
asset of the Nova Strategic Group, we consider that determining the Sale Shares
Consideration with reference to the consolidated net asset value of the Nova Strategic
Group to be a reasonable reference in evaluation of a company which is of asset-
based.
Based on our discussion with the Directors, we are given to understand that the
Nova Strategic Group has prepared its accounts in accordance with the accounting
standards which may not reflect the commercial value of the Nova Strategic Group.
We have been advised by the Directors that in order to set a fair basis for the Sale
Shares Consideration, the Adjustments have been made on the consolidated net asset
value of the Nova Strategic Group to better reflect the commercial value of the Sale
Shares. Accordingly, for the purpose of determining the commercial value of the Sale
Shares Consideration, the Adjustments have been made in order to arrive at a
commercially justifiable determination basis.
The Adjustments
a) Valuation Adjustment
One of the Adjustments was the valuation of the Grand Emperor
Hotel to HK$2,060,000,000 as at 31 May 2007, being the recent valuation
of the Grand Emperor Hotel, as set out in the Valuation Report in
Appendix II to the Circular. As discussed above, the Grand Emperor
Hotel is the principal asset of the Nova Strategic Group and the
Acquisition is in substance, an acquisition of the Grand Emperor Hotel.
Therefore, we consider that the market value of the Grand Emperor
Hotel should also be considered in the determination of the Consideration.
Hence, we are of the opinion that the adjustment based on the recent
valuation of the Grand Emperor Hotel is fair and reasonable.

30
LETTER FROM CSC ASIA

We have been advised by the management of the Company that
the Grand Emperor Hotel is re-valued every financial year. According to
the Hong Kong Accounting Standards, the self-used building and the
land portions of the Grand Emperor Hotel did not take into account any
revaluation, as they were stated at cost less accumulated depreciation
and accumulated impairment loss. As such, no increase in fair value has
been accounted for the self-used portions. As for the leased-out building
and land portions, they have been accounted as investment properties
and have been taken into account the annual revaluation. Accordingly,
in order to set a fair basis for the commercial valuation of the Grand
Emperor Hotel, the Directors have taken into account full revaluation of
the Grand Emperor Hotel including the self-used portions in the
determination of the Consideration.
In this connection, we have reviewed the Valuation Report and
discussed with the Valuer and reviewed the methodology, bases,
considerations and key assumptions employed in the valuation of the
Grand Emperor Hotel as contained in the Valuation Report.
According to the Valuation Report, the valuation of the Grand
Emperor Hotel was made on the market value basis applying the
comparison approach. We have been advised by the Valuer that by
adopting the comparison approach, it has valued the Grand Emperor
Hotel by making reference to comparable sales evidence or offerings
available in Macau, comparison based on market price levels of
comparable properties of similar size, character and locations is made
and weighted against all respective advantages and disadvantages of
each property so as to arrive at a fair comparison of capital value.
In view of the above discussion with the Valuer, we are of the
view that the valuation methodology adopted by the Valuer is generally
consistent with market practices and we are not aware of any reasons to
doubt the fairness and appropriateness of the bases, considerations and
key assumptions adopted by the Valuer in arriving at the Valuation
Given that the Grand Emperor Hotel is the principal asset of the
Nova Strategic Group, we concur with the Directors’ view of adjusting
the consolidated net assets value of the Nova Strategic Group with the
Valuation Adjustment to reflect the commercial value of the Nova
Strategic Group.
b) MI Loan Adjustment
As advised by the Directors, with the adoption of Hong Kong
Accounting Standards 39 by the Group, in relation to the amounts due to
minority shareholders of a subsidiary (the “MI Loan”), it has been

31
LETTER FROM CSC ASIA

recorded in the accounts of the Nova Strategic Group at amortised cost
using effective interest method as required by the accounting standard,
being the sum of estimated discounted future cashflow of the MI Loan
discounted at the market interest rate with reference to the prime rate as
at the dates of advances from the minority shareholders and a notional
interest calculated based on the amortised cost of the MI Loan using the
market interest rate which involves no cash outflow. In view of the
above, it results in a difference between the nominal amount and the
carrying amount of the MI Loan.
The Directors are of the view that given the aforesaid accounting
treatments for the MI Loan have no cashflow effect, as such, for
commercial consideration, they should be adjusted back in the net asset
value of the Nova Strategic Group when determining the Sale Shares
Consideration. In view of the above, we concur with the Directors’ view
of the MI Loan Adjustment.
c) Deferred Tax Adjustment
We are advised by the Directors that deferred taxation has been
recorded in the accounts of the Nova Strategic Group relating to the fair
value change recognized for the Grand Emperor Hotel in accordance
with Hong Kong Standard Interpretations Committee Interpretation 21.
The deferred tax calculation is made on the key assumption of disposal
of the Grand Emperor Hotel.
As advised by the Directors, the Nova Strategic Group has no
current intention of disposing the Grand Emperor Hotel, as such the
Directors considered that the liabilities arising from the deferred taxation
on the assumption of the disposal of the Grand Emperor Hotel should be
adjusted back. Based on the above, we concur with the view of the
Directors for the Deferred Tax Adjustment.
In view of our above analysis, we consider that the determination basis
for the Sale Shares Consideration with reference to adjusted consolidated net
asset value of the Nova Strategic Group after taking into account the Valuation
Adjustment, the MI Loan Adjustment and the Deferred Tax Adjustment to
reflect a commercial value of Nova Strategic Group to be fair and reasonable.
In addition, having considered that the Sale Shares represent 10% interest in
Nova Strategic and the Sale Shares Consideration represents its proportional
interest of 10% in the adjusted consolidated net assets value of the Nova
Strategic Group which reflects the commercial value of 10% of the Nova
Strategic Group, we consider that the Sale Shares Consideration to be fair and
reasonable.

32
LETTER FROM CSC ASIA

Comparables in similar industry
As discussed above, the Sale Shares Consideration was determined
principally based on the consolidated net asset value of the Nova Strategic
Group after making the Adjustments. In order to further assess the fairness and
reasonableness of the Sale Shares Consideration, we apply two commonly used
valuation approaches, i.e. price-earnings ratio (“PER”) and price-to-book ratio
(“P/B Ratio”) to analyse the Sale Shares Consideration with other Hong Kong
listed companies principally engaged in the same industry as the Nova Strategic
Group. In addition, we have used the purchase price for the Sale Shares of
approximately HK$91.2 million based on the difference between the World
Million Loan as at 31 May 2007 of approximately HK$79.6 million and the
Estimated Consideration as our basis for comparison.
To the best of our knowledge, we have identified five companies listed
on the Stock Exchange which involve both hotel and gaming businesses. We
note that the revenue contribution by hotel and gaming businesses by two out
of these five companies are more than 50%, i.e., principally engaged in the
hotel and gaming business, as such, they are considered relevant for comparison
purpose. In regards to the remaining three companies, revenue contributed by
the hotel and gaming businesses for one of them was less than 50%, while for
the other two companies, hotel and gaming businesses were recognised from
share of profits of associates. Hence, these three companies are not considered
to be principally engaged in the hotel and gaming businesses, and therefore,
are irrelevant for comparison purpose. Accordingly, the details of the two
companies listed on the Stock Exchange principally engaged in the hotel and
gaming business (the “Comparables”) are set out as below:
Audited net
profit for the
Market Latest financial year
capitalisation published ended on
Company Year end as at net the year P/B
(Stock code) date 7 June 2007 asset value end date PER Ratio
(HK$ million) (HK$ million) (HK$ million) (times) (times)
Galaxy Entertainment 31 Dec 06 26,462.0 13,632.8 (1,531.5) N/A 1.94
Group Limited (27)
Golden Resorts Group 31 Dec 06 5,512.2 2,589.7 120.3 45.82 2.13
Limited (1031)
Average 45.82 2.04
Proposed acquisition of 31 Mar 07 91.2 43.1 28.2 3.23 2.12
the Sale Shares (Note)
Source: www.hkex.com.hk
Note: The unaudited net asset value and net profit value of the Nova Strategic Group represented
in the table is based on the attributable acquisition interest of 10%. The calculation of the
PER and P/B Ratio are based on the Sale Shares Consideration of approximately HK$91.2
million.

33
LETTER FROM CSC ASIA

Based on the above table, the P/B Ratios of the Comparables ranged
from 1.94 to 2.13 times with an average of 2.04 times. As for the PER, Galaxy
Entertainment Group Limited recorded net loss, only reference was made to
Golden Resorts Group Limited of 45.82 times. The P/B Ratio and the PER
represented by the Sale Shares Consideration are 3.23 times and 2.12 times
respectively, which are comparable with the valuations of the Comparables.
However, given that the relevant portfolio of comparables is relatively small,
we consider the above comparison will only serve as a reference and provide
only an additional insight as to whether the Sale Shares Consideration was
valued at a comparable level with the valuations of other Hong Kong listed
companies with similar business.
Loan Consideration
Given that the consideration for the World Million Loan shall be equal to its
face value as at the Completion Date, as such the Loan Consideration is determined
on a dollar-for-dollar basis and is considered to be fair and reasonable.
In summary, we are of the view that the Consideration under the Second Sale and
Purchase Agreement for the Sale Shares and the World Million Loan is on normal commercial
terms and is fair and reasonable so far as the interest of the Independent Shareholders are
concerned.
(ii) Consideration Shares
As stated in the Letter from the Board, the Consideration will be satisfied by the
issue of 104,774,846 Consideration Shares by the Company to World Million at an issue
price of HK$1.63 per Consideration Share based on the Estimated Consideration of
HK$170,783,000.
The issue price of HK$1.63 per Consideration Share (the “Issue Price”) is equivalent
to the closing price of HK$1.63 per Share as quoted on the Stock Exchange on 7 June 2007,
being the last trading day before the publication of the Announcement (the “Last Trading
Day”) and represents;
(a) a discount of approximately 4.68% to the average closing price of HK$1.71
per Share as quoted on the Stock Exchange for the five consecutive trading
days up to and including the Last Trading Day;
(b) a discount of approximately 4.12% to the average closing price of HK$1.70
per Share as quoted on the Stock Exchange for the ten consecutive trading
days up to and including the Last Trading Day;
(c) a premium of approximately 3.16% over the average closing price of HK$1.58
per Share as quoted on the Stock Exchange for the 30 consecutive trading days
up to and including the Last Trading Day; and

34
LETTER FROM CSC ASIA

(d) a discount of approximately 20.87% to the closing price of HK$2.06 per Share
as quoted on the Stock Exchange for the Latest Practicable Date.
Review on share prices of the Company
To assess the reasonableness of the Issue Price, we consider it to be reasonable to
make reference to the prevailing market price of the Shares by reference to the share price
performance in a longer period, being the 12-month period commencing 13 June 2006
(being one year immediately preceding the date of the Announcement) and up to and including
the Latest Practicable Date (the “Review Period”).
The highest and lowest closing prices and the average daily closing price of the
Shares as quoted on the Stock Exchange in each month during the Review Period are shown
as follows:
Premium/
(Discount) of
the Issue Price
over/to the
Highest Lowest Average daily average daily
Month closing price closing price closing price closing price
(HK$) (HK$) (HK$) (%)
2006

June 1.92 1.64 1.73 (5.78)
July 1.97 1.70 1.82 (10.44)
August 1.89 1.78 1.83 (10.93)
September 1.83 1.46 1.66 (1.81)
October 1.55 1.39 1.47 10.88
November 1.48 1.37 1.42 14.79
December 1.82 1.43 1.56 4.49
2007

January 1.87 1.59 1.71 (4.68)
February 1.86 1.61 1.77 (7.91)
March 1.60 1.42 1.49 9.40
April 1.56 1.47 1.52 7.24
May (Note 1) 1.79 1.50 1.58 3.16
June (Note 2) 1.82 1.63 1.73 (5.78)
July (up to and including
the Latest Practicable
Date) 2.17 1.80 2.03 (19.70)
Review Period 2.17 1.37 1.66 (1.81)
Source: www.hkex.com.hk
Notes:
1. Trading in the Shares was suspended from 7 May 2007 to 9 May 2007.
2. Trading in the Shares was suspended from 8 June 2007 to 12 June 2007.

35
LETTER FROM CSC ASIA

Set out below is the chart indicating the historical closing prices of the Shares as
quoted on the Stock Exchange during the Review Period and the Issue Price.
Chart: Closing prices of the Shares during the Review Period and the Issue Price
Issue Price
Suspension of
trading
$1.000
$1.200
$1.400
$1.600
$1.800
$2.000
$2.200
$2.400
Jun-06
Jul-06
Aug-06 Sep-06
Oct-06 Nov-06 Dec-06 Jan-07 Feb-07
Mar-07
Apr-07
May-07
Jun-07
Jul-07
Month
HK$
Source: www.hkex.com.hk
As set out in the chart above, during the Review Period, out of a total of 274 trading
days during the Review Period, 152 trading days of the daily closing price of the Shares
were above the Issue Price and 119 trading days of the daily closing price of the Shares
were below the Issue Price.
During the Review Period, the closing price of the Shares were in the range of
HK$1.37 per Share (recorded on 13 November 2006) to HK$2.17 per Share (recorded on 26
July 2007) with average closing price of HK$1.66 per Share. The Issue Price of HK$1.63
represents a discount of approximately 24.88% to such highest closing price and a premium
of approximately 18.98% over such lowest closing price and it represents a discount of
approximately 1.81% to the average closing price during the Review Period.
Comparison with market comparables
We have also reviewed transactions announced during the period from 13 June 2006
(being one year immediately preceding the date of the Announcement) to the date of the
Announcement by companies listed in Hong Kong which involved issue of consideration
shares to satisfy all or part of the consideration for acquisition, with an issue size ranging
from HK$100 million to HK$200 million, which were comparable to the Consideration of
the Acquisition (the “Comparable Issues”).

36
LETTER FROM CSC ASIA

In this regards, we have identified, on a best effort basis, a total of 14 Comparable
Issues during the period under review. Set out below is a table of the key terms of the
Comparable Issues.
Table: Terms of the Comparable Issues
Premium/ Premium/
(discount) of (discount) of
issue price issue price
Premium/ over/(to) over/(to)
(discount) of closing price closing price
issue price for the for the last
over/(to) last 5 days 10 days
closing up to and up to and
price on the including the including the
last trading last trading last trading
day before day before day before
Date of Issuer Issue the respective respective respective
announcement (stock code) amount announcement announcement announcement
(HK$ million)
29 June 2006 Xinyu Hengdeli Holdings 180.0 (14.1)% (11.6)% (11.5)%
Limited (3389)
13 July 2006 Yanion International Holdings 176.4 (30.0)% (24.8)% (22.1)%
Limited (now known as
VODone Limited) (82)
23 November 2006 China Oil and Gas Group 106.0 4.4% 3.6% 1.4%
Limited (603)
21 December 2006 Premium Land Limited (164) 100.0 13.6% 15.2% 16.1%
3 January 2007 China Motion Telecom 120.0 (15.5)% (16.4)% (13.4)%
International Limited (989)
12 January 2007 China Energy Development 200.0 (5.7)% (1.0)% 7.5%
Holdings Limited (228)
17 January 2007 Oriental Investment 102.7 (34.2)% (24.0)% (25.2)%
Corporation Limited
(now known as China Power
New Energy Development
Company Limited) (735)
1 February 2007 Kiu Hung International 119.5 (60.7)% (55.4)% (53.9)%
Holdings Limited (381)
13 February 2007 Hi Sun Technology (China) 100.7 7.1% 4.0% 1.5%
Limited (818)
3 April 2007 Oriental Investment 149.8 (19.5)% (13.4)% (13.6)%
Corporation Limited
(now known as China Power
New Energy Development
Company Limited) (735)

37
LETTER FROM CSC ASIA

Premium/ Premium/
(discount) of (discount) of
issue price issue price
Premium/ over/(to) over/(to)
(discount) of closing price closing price
issue price for the for the last
over/(to) last 5 days 10 days
closing up to and up to and
price on the including the including the
last trading last trading last trading
day before day before day before
Date of Issuer Issue the respective respective respective
announcement (stock code) amount announcement announcement announcement
(HK$ million)
17 April 2007 Eagle Nice (International) 113.4 (39.8)% (33.6)% (30.1)%
Holdings Limited (2368)
19 April 2007 CASH Retail Management 144.4 (20.0)% (16.9)% (15.7)%
Group Limited (996)
18 May 2007 Wealthmark International 120.0 (33.9)% (34.4)% (31.0)%
(Holdings) Limited (39)
(Note)
18 May 2007 Wealthmark International 100.0 (33.9)% (34.4)% (31.0)%
(Holdings) Limited (39)
(Note)
Maximum 13.6% 15.2% 16.1%
Minimum (60.7)% (55.4)% (53.9)%
Average (20.2)% (17.4)% (15.8)%
The Consideration Shares 170.8 0.0% (4.7)% (4.1)%
Source: www.hkex.com.hk
Note: The consideration shares were issued to two different vendors pursuant to two separate acquisitions.
As illustrated in the above table, the issue prices of the Comparable Issues to their
respective share prices as at the last trading day immediately preceding the relevant
announcement dates ranged from a discount of approximately 60.7% to a premium of
approximately 13.6% (the “Comparable Range”) with mean discount of approximately 20.2%.
The Issue Price, being equivalent to the closing price of the Shares as quoted on the Stock
Exchange on the Last Trading Day, is within the Comparable Range.

38
LETTER FROM CSC ASIA

The discounts represented by the Issue Price to the 5-day average closing price and
the 10-day average closing price, up to and including the Last Trading Day (the “Discounts”),
were approximately 4.7% and 4.1% respectively. The Discounts are both within the range of
discount/ premium of the issue prices of the Comparable Issues to their respective 5-day
average closing prices (ranging from discount of approximately 55.4% to premium of
approximately 15.2%) and 10-day average closing prices (ranging from discount of
approximately 53.9% to premium of approximately 16.1%) to their respective last trading
days. In addition, the Discounts are less than the respective average discounts of the issue
prices of the Comparable Issues to their respective 5-day average closing prices (average
discount of approximately 17.4%) and 10-day average closing prices (average discount of
approximately 15.8%).
In view of the above analysis, we consider the Issue Price is fair and reasonable and
is in the interests of the Company and the Shareholders as a whole.
3. Potential dilution effect on shareholding of the Independent Shareholders
Upon completion of the Second Sale and Purchase Agreement based on the Estimated
Consideration of HK$170,783,000, 104,774,846 Consideration Shares will be issued and will
result in dilution of shareholding interest to the Independent Shareholders.
The shareholding interest of the existing Independent Shareholders will be diluted from
approximately 65.18% to approximately 58.57% upon issue of the Consideration Shares.
Although the shareholding interest of the Independent Shareholders will be diluted, given
that the Acquisition will allow the Company to further increase its investment in the Grand
Emperor Hotel, a revenue driver which is contributing substantially to the Group’s earnings and as
estimated by the Directors to have further growth potential, yet involves no material cash outlay,
we consider that the dilution on the Independent Shareholders’ interest in the Company is
commercially justifiable.
4. Financial effects of the Acquisition
(i) Earnings
The Group recorded an audited consolidated net profit attributable to equity holders
of the Company of approximately HK$272.5 million for the year ended 31 March 2007.
Upon completion of the Acquisition, the earnings of the Group, on a consolidated basis, will
be entitled to account for 100% of the Nova Strategic Group. For illustration purposes,
assuming the Acquisition has been completed as at 1 April 2006 and with reference to Nova
Strategic’s consolidated net profit of approximately HK$282.0 million for the year ended 31
March 2007 as extracted from the audited consolidated financial statements of the Company
for the year ended 31 March 2007, the Group’s earnings will increase by approximately
HK$28.2 million representing 10% interest of the Nova Strategic Group for the year under
review. The basic earnings per Share of the Company (defined as profit attributable to the

39
LETTER FROM CSC ASIA

equity holders of the Company of approximately HK$272.5 million divided by number of
issued Shares of 928,771,980) for the year ended 31 March 2007 was approximately HK$0.29.
Upon completion of the Acquisition, on a per share basis, the earnings of the Group for the
year ended 31 March 2007 will decrease slightly after taken into account the dilution effect
of 104,774,846 Consideration Shares to be issued upon completion of the Acquisition.
(ii) Net asset value
The audited consolidated net asset of the Group attributable to equity shareholders of
the Company and the net asset per Share as at 31 March 2007 were approximately HK$1,459.2
million and HK$1.57 (calculated based on consolidated net asset value divided by number
of issued Shares of 928,771,980 as at 31 March 2007) respectively. Upon completion of the
Acquisition based on the Estimated Consideration, the net assets of the Group attributable
to equity shareholders of the Company will increase by approximately HK$170.8 million.
Such increase is mainly attributable to the combined effect of the recognition of goodwill of
approximately HK$37.0 million attributable to the Acquisition and decrease in amounts due
to related companies of approximately HK$79.6 million (being the amount of the World
Million Loan as at 31 May 2007) and the minority interests of the Group of approximately
HK$54.2 million. Upon completion of the Acquisition, on a per share basis, the net assets of
the Group attributable to equity shareholders of the Company as at 31 March 2007 will
increase slightly after taken into account the dilution effect of 104,774,846 Consideration
Shares to be issued upon completion of the Acquisition.
(iii) Working capital
The Acquisition for the Estimated Consideration will be satisfied by the issuance of
the Consideration Shares and the difference between the final consideration for the Acquisition
and Estimated Consideration will be settled by way of cash. We have been advised by the
Directors that the Consideration shall not be substantially different to the Estimated
Consideration, accordingly, there shall not be immediate material cash outlay or in flow to
the Group upon completion of the Acquisition.
(iv) Gearing
The gearing ratio (being amount due to related companies, bank borrowings and
amounts due to minority shareholders of a subsidiary over total assets) of the Group as at
31 March 2007 was approximately 25.3%. Gearing ratio of the Group will improve
immediately following completion of the Acquisition due to the decrease in total borrowings
being the amount due to related companies of approximately HK$79.6 million and the
increase in total assets attributable to the abovementioned goodwill of approximately HK$37.0
million to be recognised as a result of the Acquisition.
Based on the above, the Acquisition would have an overall positive effect on the financial
position of the Group immediately following completion of the Acquisition. On such basis, we are
of the view that the Acquisition is in the interests of the Company and the Shareholders as a
whole.

40
LETTER FROM CSC ASIA

(B) THE WHITEWASH WAIVER
1. Background of the Whitewash Waiver
Worthly Strong and World Million are indirect wholly-owned subsidiaries of Emperor
International. As at the Latest Practicable Date, Emperor International was owned as to 45.41% by
Charron which was in turn wholly-owned by the AY Trust. Worthly Strong, World Million, their
respective associates and their respective concert parties are beneficially interested in 323,391,555
Shares, representing approximately 34.82% of the issued share capital of the Company as at the
Latest Practicable Date. Upon completion of the Second Sale and Purchase Agreement (assuming
that no further Shares, other than the Consideration Shares are issued by the Company between the
Latest Practicable Date and completion of the Second Sale and Purchase Agreement), the aggregate
beneficial shareholding of Worthly Strong, World Million, their respective associates and their
respective concert parties in the Company will increase to approximately 41.43%. Accordingly,
under Rule 26 of the Takeovers Code, Worthly Strong, World Million, their respective associates
and their respective concert parties will be obliged to make a mandatory general offer for all the
Shares not already owned or agreed to be acquired by them unless the Whitewash Waiver is
obtained from the Executive.
An application has been made by Worthly Strong, its associates and concert parties acting in
concert with it to the Executive for the Whitewash Waiver pursuant to Note 1 on Dispensations
from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the Executive, would
be subject to, among other things, the approval of the Independent Shareholders at the SGM by
way of poll.
2. The Whitewash Waiver as a condition of the Second Sale and Purchase Agreement
The Second Sale and Purchase Agreement, is conditional among other things, the granting
of the Whitewash Waiver by the Executive and the approval of the Whitewash Waiver by the
Independent Shareholders.
According to our analysis of the terms and conditions and reasons for and benefits of the
Acquisition as set out above, we consider that the Acquisition is in the interests of the Company
and the Shareholders taken as a whole. If the Whitewash Waiver is not granted by the Executive or
the Whitewash Waiver is not approved by the Independent Shareholders, the Second Sale and
Purchase Agreement will lapse, the Company will then lose all the expected benefits which is
envisaged to arise from the completion of the Second Sale and Purchase Agreement.
As one of the conditions for completion of the Second Sale and Purchase Agreement, we are
of the view that the approval of the Whitewash Waiver by the Independent Shareholders is in the
interests of the Company and the Shareholders taken as a whole and is fair and reasonable so far
as the Independent Shareholders are concerned.
RECOMMENDATION

Having considered the above principal factors and reasons in respect to the Second Sale and
Purchase Agreement and the Whitewash Waiver, in particular,

41
LETTER FROM CSC ASIA

• (i) the Acquisition provides an opportunity for the Group to increase its investment in the
Grand Emperor Hotel, a revenue driver of the Group and enjoy more profit contribution; (ii)
the Acquisition is in line with the Group’s business development of increasing its foothold
in the hotel and gaming operation; (iii) the positive outlook of tourism and gaming market
in Macau of which the Grand Emperor Hotel is operating under;
• the Sale Shares Consideration represents the proportional interest in the adjusted consolidated
net assets value of the Nova Strategic Group which reflects the commercial value of the
Nova Strategic Group;
• the Loan Consideration equals to the face value of the World Million Loan which is on a
dollar-for-dollar basis;
• the Issue Price is equivalent to the closing price of the Share as quoted on the Stock
Exchange on the Last Trading Day and slight discount to the average closing price during
the Review Period and is within the Comparable Range;
• dilution effect on the shareholding interest of the Independent Shareholders is considered to
be commercially justifiable after considering the potential future benefits to the Group from
its increase investment in the Nova Strategic Group;
• overall positive effect on the financial position of the Group immediately following
completion of the Second Sale and Purchase Agreement; and
• the Whitewash Waiver is a condition of the Second Sale and Purchase Agreement,
we are of the view that the terms of the Second Sale and Purchase Agreement are on normal commercial
terms, in the ordinary and usual course of business, are fair and reasonable so far as the Independent
Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. On the
basis that the grant of the Whitewash Waiver is a condition of the Second Sale and Purchase Agreement,
we also consider that the grant of the Whitewash Waiver is fair and reasonable so far as the Independent
Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole.
Accordingly, we would advise the Independent Shareholders, as well as recommend the Independent
Board Committee to advise the Independent Shareholders, to vote in favour of the resolutions to approve
the Second Sale and Purchase Agreement and the Whitewash Waiver at the SGM.
Yours faithfully,
For and on behalf of
CSC Asia Limited
Andrew Chiu Patra Lee
Managing Director Director

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
42
1. SUMMARY OF FINANCIAL INFORMATION

A summary of the published results and of the assets and liabilities of the Group for the last three
financial years, as extracted from the audited financial statements, is set out below.
RESULTS

Year ended 31 March
2007 2006 2005

HK$’000 HK$’000 HK$’000
Revenue 1,310,007 345,796 18,236
Profit before taxation 443,220 410,153 17,161
Taxation (34,102) (51,886) –
Profit for the year 409,118 358,267 17,161
Attributable to:
Equity holders of the Company 272,493 166,794 17,596
Minority interests 136,625 191,473 (435)
409,118 358,267 17,161

Dividends
– Interim paid 37,151 9,288 –
– Final proposed 74,302 18,575 –
111,453 27,863 –
Dividend per share HK$0.12 HK$0.03 N/A
Earnings per share (Note 1)
– Basic HK$0.29 HK$0.18 HK$0.05
– Diluted HK$0.29 HK$0.18 N/A
Notes:
(1) The calculation of basic earnings per share is based on the profit attributable to equity holders of the Company
for the financial year ended 31 March, 2007 of approximately HK$272,493,000 (2006: HK$166,794,000 and
2005: HK$17,596,000) and the 928,771,980 Shares (2006: 928,771,980 Shares and 2005: 367,647,583 Shares) in
issue during the year.
No effect of dilutive potential ordinary shares in respect of the share options is resulted in 2007 as the exercise
price of these potential ordinary shares is higher than the average market price of the Company’s shares during
the year. Hence, the calculation of diluted earnings per share for 2007 was based on the profit attributable to
equity holders of the Company of approximately HK$272,493,000 and the 928,771,980 Shares in issue during the
year.

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
43
The calculation of diluted earnings per share for 2006 was based on the profit attributable to equity holders of the
Company of approximately HK$166,794,000 and the weighted average number of 929,388,283 potential ordinary
shares during that year.
No diluted earnings per share was presented for 2005 as there was no dilutive potential ordinary share in issue in
that year.
(2) No extraordinary items or exceptional items were recorded for each of the three years ended 31 March 2007. No
qualified opinion had been issued by the Company’s auditor, Deloitte Touche Tohmatsu for each of the three
years ended 31 March 2007.
ASSETS AND LIABILITIES

At 31 March
2007 2006 2005

HK$’000 HK$’000 HK$’000
Total assets 3,205,039 2,702,696 1,274,202
Total liabilities (1,307,359) (1,193,603) (217,623)
Net assets 1,897,680 1,509,093 1,056,579
Attributable to:
Equity holders of the Company 1,459,223 1,227,445 1,057,030
Minority interests 438,457 281,648 (451)
1,897,680 1,509,093 1,056,579

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
44
2. SUMMARY OF AUDITED FINANCIAL STATEMENTS

Set out below is the audited consolidated income statement, consolidated balance sheet, consolidated
statement of changes in equity, consolidated cash flow statement and notes to the financial statements of
the Group as extracted from pages 25 to 70 of the annual report of the Company for the year ended 31
March 2007. References to page number in this appendix are to the page numbers of such annual report
of the Company.
CONSOLIDATED INCOME STATEMENT

For the year ended 31st March, 2007
2007 2006

NOTES HK$’000 HK$’000
Revenue 6 1,310,007 345,796
Cost of sales (38,393) (9,816)
Direct operating expenses (214,812) (83,911)
Gross profit 1,056,802 252,069
Fair value change in investment properties 171,100 392,368
Other income 10,674 9,882
Selling and marketing expenses (517,306) (119,923)
Administrative expenses (231,392) (113,159)
Finance costs 8 (46,658) (11,084)
Profit before taxation 9 443,220 410,153
Taxation 11 (34,102) (51,886)
Profit for the year 409,118 358,267
Attributable to:
Equity holders of the Company 272,493 166,794
Minority interests 136,625 191,473
409,118 358,267

Dividends 12
– Interim paid 37,151 9,288
– Final paid 18,575 –
55,726 9,288

– Final proposed 74,302 18,575
Earnings per share 13
– Basic HK$0.29 HK$0.18
– Diluted HK$0.29 HK$0.18

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
45
CONSOLIDATED BALANCE SHEET

At 31st March, 2007
2007 2006

NOTES HK$’000 HK$’000
Non-current assets
Investment properties 14 681,200 510,100
Property, plant and equipment 15 986,217 1,008,022
Prepaid lease payments 16 307,640 313,453
Property under development 17 485,671 326,699
Deposits made on acquisition of property,
plant and equipment 2,288 16,369
Goodwill 19 18,301 18,301
2,481,317 2,192,944

Current assets
Inventories, at cost 4,046 3,147
Trade and other receivables 20 494,647 323,784
Prepaid lease payments 16 7,619 7,571
Amount due from a related company 21 968 11,347
Bank balances and cash 22 216,442 163,903
723,722 509,752

Current liabilities
Trade and other payables 23 404,776 223,354
Amounts due to related companies 24 103,906 144,901
Amounts due to minority shareholders of
a subsidiary 25 125,720 –
Taxation payable 18,130 4,870
Secured bank borrowings – amounts due
within one year 26 39,845 37,046
692,377 410,171

Net current assets 31,345 99,581
Total assets less current liabilities 2,512,662 2,292,525
Non-current liabilities
Amounts due to minority shareholders of
a subsidiary 25 328,492 479,296
Secured bank borrowings – amounts due
after one year 26 213,031 251,519
Deferred taxation 27 73,459 52,617
614,982 783,432

Net assets 1,897,680 1,509,093

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
46
2007 2006

NOTES HK$’000 HK$’000
Capital and reserves
Share capital 28 93 93
Reserves 30 1,459,130 1,227,352
Equity attributable to equity holders of the Company 1,459,223 1,227,445
Minority interests 31 438,457 281,648
Total equity 1,897,680 1,509,093

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
47
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31st March, 2007
Attributable to equity holders of the Company
Capital Share Accumulated
Share Share redemption Contributed option Legal Translation (losses) Minority Total
capital premium reserve surplus reserve reserve reserve profits Total interests equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(note 30(a)) (note 30(b))
At 1st April, 2005 93 1,254,982 666 514,191 – – 6,175 (719,077) 1,057,030 20,626 1,077,656
Exchange difference arising
on translation of foreign
operations recognised
directly in equity – – – – – – 8,945 – 8,945 – 8,945
Profit for the year – – – – – – – 166,794 166,794 191,473 358,267
Total recognised income
for the year – – – – – – 8,945 166,794 175,739 191,473 367,212
Cancellation of share
premium account
(note 30(c)) – (1,254,982) – 543,432 – – – 711,550 – – –
Capital contribution
from minority shareholders
of a subsidiary – – – – – – – – – 31 31
Capital contribution arising
from fair value adjustment
on amounts due to minority
shareholders of a subsidiary – – – – – – – – – 69,525 69,525
Recognition of equity-settled
share-based payment – – – – 3,964 – – – 3,964 – 3,964
Arising on acquisition
of a subsidiary – – – – – – – – – (7) (7)
Transfer from accumulated
profits to legal reserve – – – – – 44 – (44) – – –
2006 interim dividend
paid in cash – – – (9,288) – – – – (9,288) – (9,288)
At 31st March, 2006 and
1st April, 2006 93 – 666 1,048,335 3,964 44 15,120 159,223 1,227,445 281,648 1,509,093
Exchange difference
arising on translation of
foreign operations
recognised directly
in equity – – – – – – 15,011 – 15,011 – 15,011
Profit for the year – – – – – – – 272,493 272,493 136,625 409,118

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
48
Attributable to equity holders of the Company
Capital Share Accumulated
Share Share redemption Contributed option Legal Translation (losses) Minority Total
capital premium reserve surplus reserve reserve reserve profits Total interests equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(note 30(a)) (note 30(b))
Total recognised income
for the year – – – – – – 15,011 272,493 287,504 136,625 424,129
Capital contribution
arising from changes
in cash flow estimates
on amounts due to
minority shareholders
of a subsidiary
(note 25) – – – – – – – – – 41,103 41,103
Adjustment to capital
contribution initially
recognised resulting from
change in terms (note 25) – – – – – – – – – (20,919) (20,919)
2006 final dividend
paid in cash – – – (18,575) – – – – (18,575) – (18,575)
2007 interim dividend
paid in cash – – – (37,151) – – – – (37,151) – (37,151)
At 31st March, 2007 93 – 666 992,609 3,964 44 30,131 431,716 1,459,223 438,457 1,897,680

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
49
CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31st March, 2007
2007 2006

NOTE HK$’000 HK$’000
Cash flows from operating activities
Profit before taxation 443,220 410,153
Adjustments for:
Interest income (5,401) (2,438)
Interest expenses 28,637 2,677
Imputed interest expense 18,021 8,407
Depreciation of property, plant and equipment 72,644 21,876
Allowance for bad and doubtful debts 9,578 –
Release of prepaid lease payments 6,465 1,616
Share option expense – 3,964
Write-off of property, plant and equipment – 20
Fair value change in investment properties (171,100) (392,368)
Gain on disposal of property, plant and
equipment (350) –
Negative goodwill credited to the consolidated
income statement – (63)
Operating cash flows before movements in
working capital 401,714 53,844
Increase in inventories (899) (1,908)
Increase in trade and other receivables (180,335) (318,814)
Decrease (increase) in amount due from
a related company 10,379 (10,201)
Increase in trade and other payables 55,250 208,742
(Decrease) increase in amounts due to
related companies (4,590) 6,581
Net cash generated from (used in) operations 281,519 (61,756)
PRC Enterprise Income Tax refunded – 68
Net cash generated from (used in) operating activities 281,519 (61,688)
Cash flows from investing activities
Interest received 5,401 2,438
Additions to property, plant and equipment (50,832) (1,048,340)
Additions to property under development (3,371) –
Deposits made for acquisition of property, plant
and equipment (2,288) (11,470)
Proceeds on disposal of property, plant and equipment 1,467 –
Acquisition of subsidiaries (net of cash and cash
equivalents acquired) 32 – 72
Additional costs incurred on other assets – (7,499)
Net cash used in investing activities (49,623) (1,064,799)

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
50
2007 2006

HK$’000 HK$’000
Cash flows from financing activities
Dividends paid (55,726) (9,288)
(Repayment to) advances from related companies (36,405) 120,301
Repayments of bank loans (35,689) (11,435)
Interest paid (27,477) (5,197)
(Repayment to) advances from minority shareholders
of a subsidiary (24,081) 370,000
Bank loans raised – 300,000
Capital contribution from minority shareholders of
a subsidiary – 31
Net cash (used in) generated from financing activities (179,378) 764,412
Net increase (decrease) in cash and cash equivalents 52,518 (362,075)
Cash and cash equivalents at beginning of the year 163,903 525,961
Effect of foreign exchange rate changes 21 17
Cash and cash equivalents at end of the year
Bank balances and cash 216,442 163,903

APPENDIX I FINANCIAL INFORMATION ON THE GROUP
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31st March, 2007
1. GENERAL

The Company is incorporated in Bermuda as an exempted company with limited liability and its shares are listed
on The Stock Exchange of Hong Kong Limited. The address of the registered office and principal place of
business of the Company are disclosed in the corporate information of the annual report.
The consolidated financial statements are presented in Hong Kong dollars which is the functional currency of the
Company. The Company is an investment holding company. The principal activities of its principal subsidiaries
are set out in note 37.
2. APPLICATION OF HONG KONG FINANCIAL REPORTING STANDARDS

In the current year, the Group has applied, for the first time, a number of new Hong Kong Financial Reporting
Standards (“HKFRS”s), Hong Kong Accounting Standards (“HKAS”) and Interpretation (“INT”) (hereinafter
collectively “new HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”),
which are effective for the Group’s financial year beginning on 1st April, 2006. The adoption of the new HKFRSs
had no material effect on how the results and financial position for the current or prior accounting periods have
been prepared and presented. Accordingly, no prior period adjustment has been required.
The Group has not early applied the following new and revised standards, amendment or interpretations that have
been issued but are not yet effective. The directors of the Company anticipate that the application of these
standards, amendment or interpretations will have no material impact on the results and the financial position of
the Group.
HKAS 1 (Amendment) Capital Disclosures
1
HKAS 23 (Revised) Borrowing Costs
2
HKFRS 7 Financial Instruments: Disclosures
1
HKFRS 8 Operating Segments
2
HK(IFRIC) – INT 8 Scope of HKFRS 2
3
HK(IFRIC) – INT 9 Reassessment of Embedded Derivatives
4
HK(IFRIC) – INT 10 Interim Financial Re