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IMPORTANT

If you are in any doubt about this prospectus, you should obtain independent professional advice.

CONVOY FINANCIAL SERVICES HOLDINGS LIMITED

(incorporated in the Cayman Islands with limited liability)

LISTING ON THE MAIN BOARD OFTHE STOCK EXCHANGE OF HONG KONG LIMITED

BY WAY OFPLACING AND PUBLIC OFFER

Number of Offer Shares: 100,000,000 SharesNumber of Placing Shares: 90,000,000 Shares (subject to re-allocation)

Number of Public Offer Shares: 10,000,000 Shares (subject to re-allocation)Offer Price: Not more than HK$1.20 per Offer Share and expected to be

not less than HK$1.00 per Offer Share, plus brokerage of1%, SFC transaction levy of 0.004% and Stock Exchangetrading fee of 0.005% (payable in full on application inHong Kong dollars and subject to refund)

Nominal value: HK$0.10 per ShareStock code: 1019

SPONSOR JOINT LEAD MANAGERS BOOKRUNNER

QUAM CAPITALLIMITED

QUAM SECURITIESCOMPANY LIMITED

CONVOY INVESTMENTSERVICES LIMITED

QUAM SECURITIESCOMPANY LIMITED

CO-LEAD MANAGERS

Celestial Securities Limited China Merchants Securities (HK)Co., Limited

UOB Kay Hian (Hong Kong)Limited

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

A copy of this prospectus, having attached thereto the documents specified under the paragraph headed “Documents delivered to the Registrar ofCompanies in Hong Kong” in Appendix VI to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required bysection 342C of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and theRegistrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other documents referred to above.

The Offer Price is expected to be determined by agreement between the Joint Lead Managers (for themselves and on behalf of the Underwriters) andus on or before Tuesday, 6 July 2010 or such later date as may be agreed by the Joint Lead Managers (for themselves and on behalf of theUnderwriters) and us. The Offer Price will not be more than HK$1.20 per Offer Share and is currently expected to be not less than HK$1.00 per OfferShare unless otherwise announced. Investors applying for the Public Offer Shares must pay, on application, the indicative maximum offer price ofHK$1.20 per Offer Share together with brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005%, subject torefund.

The Joint Lead Managers (for themselves and on behalf of the Underwriters), with our consent, may reduce the indicative Offer Price range stated inthis prospectus and/or the number of Offer Shares being offered pursuant to the Share Offer at any time prior to the morning of the last day forlodging applications under the Public Offer. In such a case, a notice of the reduction of the indicative Offer Price range and/or the number of OfferShares will be published in The Standard (in English) and the Hong Kong Economic Times (in Chinese), and on our website at www.convoy.com.hkand the Stock Exchange’s website at www.hkexnews.hk, not later than the morning of the last day for lodging applications under the Public Offer. Ifapplications for the Public Offer Shares have been submitted prior to the day which is the last day for lodging applications under the Public Offer,then even if the Offer Price range and/or the number of Offer Shares is so reduced, such applications cannot subsequently be withdrawn.

If, for any reason, the Offer Price is not agreed between the Joint Lead Managers (for themselves and on behalf of the Underwriters) and us on orbefore Tuesday, 6 July 2010 or such later date as may be agreed by the Joint Lead Managers (for themselves and on behalf of the Underwriters) andus, the Share Offer will not proceed and will lapse.

Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, including therisk factors set out in the section headed “Risk factors” in this prospectus.

Prospective investors of the Offer Shares should note that the Underwriters are entitled to terminate their obligations under the UnderwritingAgreement by notice in writing to be given by the Joint Lead Managers (for themselves and on behalf of the Underwriters) upon the occurrence of anyof the events set forth under the paragraph headed “Grounds for termination” in the section headed “Underwriting” in this prospectus at any time priorto 8:00 a.m. (Hong Kong time) on the Listing Date. Further details of these termination provisions are set out under the paragraph headed “Grounds fortermination” in the section headed “Underwriting” in this prospectus. Prospective investors should carefully refer to that section for further details.

29 June 2010

EXPECTED TIMETABLE

We will publish an announcement in Hong Kong in The Standard (in English) and the HongKong Economic Times (in Chinese), and on our website at www.convoy.com.hk and the website of theStock Exchange at www.hkexnews.hk, if there is any change in the following expected timetable of thePublic Offer.

2010(1)

Application Lists open(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:45 a.m. on Monday, 5 July

Latest time for lodging white and yellow ApplicationForms(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Monday, 5 July

Application Lists close(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Monday, 5 July

Expected Price Determination Date(3) . . . . . . . . . . . . . . . . . . . . . . Tuesday, 6 July

Announcement of the final Offer Price, the level of indicationsof interest in the Placing, the level of applications in the PublicOffer, the basis of allotment of and results of allocations of thePublic Offer Shares under the Public Offer to be published (i)in The Standard (in English) and the Hong Kong EconomicTimes (in Chinese), and (ii) on our Company’s website atwww.convoy.com.hk and the Stock Exchange’s website atwww.hkexnews.hk on or before . . . . . . . . . . . . . . . . . . . . . . . . Monday, 12 July

Results of applications (with Hong Kong identity card/passport/Hong Kong business registration numbers of successfulapplicants) under the Public Offer to be available through avariety of channels as described under the paragraph headed“Publication of results” in the section headed “How to applyfor the Public Offer Shares” in this prospectus from . . . . . . . . Monday, 12 July

Despatch of share certificates of the Offer Shares in respect ofwholly or partially successful applications under the PublicOffer on or before(4) & (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 12 July

Despatch of refund cheques in respect of wholly successful (ifapplicable) and wholly or partially unsuccessful applicationsunder the Public Offer on or before(5) & (6) . . . . . . . . . . . . . . . . . Monday, 12 July

Dealings in the Shares on the Main Board to commence at9:30 a.m. on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 13 July

Notes:(1) Unless otherwise stated, all times and dates refer to Hong Kong local times and dates.

(2) If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above in force in Hong Kong at any timebetween 9:00 a.m. and 12:00 noon on Monday, 5 July 2010, the Application Lists will not open or close on that day. Please refer to theparagraph headed “Effect of bad weather on the opening of the Application Lists” in the section headed “How to apply for the PublicOffer Shares” in this prospectus. If the Application Lists do not open and close on Monday, 5 July 2010, the dates mentioned in thissection headed “Expected timetable” may be affected.

(3) The Price Determination Date, being the date on which the Offer Price is to be determined, is expected to be on or about Tuesday, 6 July2010 or such later date as may be agreed by the Joint Lead Managers (for themselves and on behalf of the Underwriters) and us. If, forany reason, the final Offer Price is not agreed between the Joint Lead Managers (for themselves and on behalf of the Underwriters) andus, the Share Offer (including the Public Offer) will not proceed and will lapse.

(4) Share certificates for the Offer Shares will only become valid certificates of title at 8:00 a.m. on Tuesday, 13 July 2010 provided that(i) the Share Offer has become unconditional in all respects; and (ii) the Underwriting Agreement has not been terminated in accordancewith its terms. If the Share Offer does not become unconditional or the Underwriting Agreement is terminated in accordance with itsterms, we will make an announcement as soon as possible.

i

EXPECTED TIMETABLE

(5) Refund cheques will be issued in respect of wholly or partially unsuccessful applications pursuant to the Public Offer and also in respectof wholly or partially successful applications in the event that the final Offer Price is less than the price payable per Offer Share onapplication. Part of the applicant’s Hong Kong identity card number or passport number, or, if the application is made by joint applicants,part of the Hong Kong identity card number or passport number of the first-named applicant, provided by the respective applicant(s) maybe printed on the refund cheque (where applicable). Such data would also be transferred to a third party for refund purpose. The bankerof an applicant may require verification of the applicant’s Hong Kong identity card number or passport number before cashing the refundcheque. Inaccurate completion of an applicant’s Hong Kong identity card number or passport number may lead to delay in encashment ofor may invalidate the refund cheque.

(6) Applicants who have applied on white Application Forms for 1,000,000 or more Public Offer Shares under the Public Offer and haveindicated in their Application Forms that they wish to collect any share certificate and/or refund cheque (where applicable) in person,may do so from our Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at 26th Floor, TesburyCentre, 28 Queen’s Road East, Wanchai, Hong Kong, between 9:00 a.m. to 1:00 p.m. on Monday, 12 July 2010 or on the date notifiedby our Company as the date of despatch of share certificates and refund cheques.

Applicants being individuals who opt for personal collection must not authorise any other person to make collection on their behalf.Applicants being corporations who opt for personal collection must attend by their authorised representatives bearing letters ofauthorisation from their corporations stamped with the corporation’s chop. Both individuals and authorised representatives ofcorporations, as the case may be, must produce, at the time of collection, identification and (where applicable) documents acceptable toour Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at the time of collection.

If an applicant has applied for less than 1,000,000 Public Offer Shares or has applied for 1,000,000 Public Offer Shares or more underthe Public Offer and has not indicated on the relevant Application Form that share certificate and/or refund cheque (where applicable)will be collected in person then the share certificate and/or refund cheque (where applicable) will be sent to the address as appeared onthe relevant Application Form on the date of despatch by ordinary post at the applicant’s own risk.

Applicants who have applied on yellow Application Forms for 1,000,000 or more Public Offer Shares under the Public Offer may collecttheir refund cheques (where applicable), in person but may not elect to collect their share certificates which will be deposited intoCCASS for credit to their designated CCASS Participants’ stock accounts or CCASS Investor Participant stock accounts, as appropriate.The procedures for collection of refund cheques for yellow Application Form applicants are the same as those for white ApplicationForm applicants. Uncollected share certificates (where applicable) and refund cheques (where applicable) will be despatched by ordinarypost at the applicants’ own risk to the addresses specified in the relevant Application Forms. Further information is set out under theparagraph headed “Despatch/collection of share certificates and refund of application money” in the section headed “How to apply forthe Public Offer Share” in this prospectus.

Particulars of the structure of the Share Offer, including the conditions thereto, are set out in thesection headed “Structure and conditions of the Share Offer” in this prospectus.

ii

CONTENTS

IMPORTANT NOTICE TO INVESTORS

This prospectus is issued by our Company solely in connection with the Public Offer anddoes not constitute an offer to sell or a solicitation of an offer to buy any security other than thePublic Offer Shares offered by this prospectus pursuant to the Public Offer. This prospectus maynot be used for the purpose of, and does not constitute, an offer or invitation in any otherjurisdiction or in any other circumstances. No action has been taken to permit a public offering ofthe Offer Shares or the distribution of this prospectus in any jurisdiction other than Hong Kong.

You should rely only on the information contained in this prospectus and the ApplicationForms to make your investment decision. Our Company has not authorised anyone to provide youwith information that is different from what is contained in this prospectus. Any information orrepresentation not made in this prospectus must not be relied on by you as having beenauthorised by our Company, the Sponsor, any of the Joint Lead Managers, any of theUnderwriters, any of their respective directors, or any other person involved in the Share Offer.

Page

Expected timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Glossary of technical terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Forward-looking statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Information about this prospectus and the Share Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Directors and parties involved in the Share Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Corporate information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Industry overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Regulatory framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Corporate history, development and Reorganisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Relationship with the Controlling Shareholders and connected transactions . . . . . . . . . . . . . . . . . . . . . 107

Directors, senior management and staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Interests discloseable under the SFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Future plans and use of proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

Structure and conditions of the Share Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Cornerstone investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

How to apply for the Public Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

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CONTENTS

Appendix I – Accountants’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Appendix II – Unaudited pro forma financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Appendix III – Property valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

Appendix IV – Summary of the constitution of our Company and Cayman Islands companylaw . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Appendix V – Statutory and general information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Appendix VI – Documents delivered to the Registrar of Companies in Hong Kong and availablefor inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

iv

SUMMARY

This summary aims to give you an overview of the information contained in thisprospectus. Since it is a summary, it does not contain all the information that may be important toyou. You should read this prospectus in its entirety before you decide to invest in the Offer Shares.

There are risks associated with any investment in companies listed on the Stock Exchange.Some of the particular risks in investing in the Offer Shares are set out in the section headed“Risk factors” in this prospectus. You should read that section carefully before you decide toinvest in the Offer Shares.

OVERVIEW

Our Group is principally engaged in the insurance and MPF schemes brokerage business. Wenegotiate and arrange contracts of insurance and MPF schemes in Hong Kong as the agent of ourcustomers, i.e. the policyholders, and advise on matters related to insurance. In pursuing the insurancebrokerage business, CFS commenced business in 1993, for carrying on long term (including linkedlong term) and general insurance business, and to provide independent advisory services in connectionwith insurance products. In October 1998, our Group started our brokerage business of Investment-linked Assurance Scheme (“ILAS”), an insurance policy of the “linked long term” class as defined inthe First Schedule, Part 2 of the ICO, through CFS. In December 1999, our Group commenced MPFschemes brokerage business to tap into the unexplored market of MPF which was launched inDecember 2000. CFS is a corporate member of PIBA and corporate intermediary of MPFA. We carryon our business under the Trademarks ( , , , and ) through a non-exclusivelicence granted by CTL, a wholly-owned subsidiary of CFG. Our Directors believe that the Listing willbe definitely conducive to the further enhancement of our Group’s image and our onward developmentin the insurance and MPF schemes brokerage market in the future.

REGULATORY FRAMEWORK

The self-regulatory system for insurance intermediaries, i.e., insurance agents and brokers, issupported by legislation which is contained in Part X of the ICO. Under section 65 of the ICO, aperson is prohibited from holding himself out as an insurance broker unless he is properly appointed orauthorised. A person intending to act as an insurance broker shall either seek authorisation from the IAor apply to become a member of a body of insurance brokers approved by the IA. The appointment ofany person as a consultant by an insurance broker is subject to the confirmation and registration of theIA or the relevant approved body of insurance brokers (as the case may be).

Under this self-regulatory system, CFS is approved as an insurance broker by PIBA, which is inturn approved by the IA as a body of insurance brokers and all of its Consultants have obtained theconfirmation and registration of PIBA before their appointment by CFS as the Consultants.

On the other hand, the SFC has clarified in the SFC Circular that, among others, as a generalrule, the SFC considers that insurance intermediaries who are promoting, offering or selling ILAS tothe public are neither obliged nor permitted to be licensed under the SFO. As a result, an insurancebroker may arrange with his/her customers to purchase authorised ILAS without the need forregistration as an investment adviser or an investment representative under the SFO. Therefore, CFS isnot required and in fact is not licensed by the SFC. Our Company is advised by its legal advisers as to

1

SUMMARY

Hong Kong law that their view are in line with the view of the SFC under the SFC Circular that, as ageneral rule, insurance intermediaries who are dealing solely in ILAS and other insurance products areneither obliged nor permitted to be licensed under the SFO.

OUR BUSINESS MODEL

The simplified diagram below illustrates our existing business model:

Consultants

commissions

and supportive

operational platform

introduction

of customersfinancial needs

analysis, advisory,

recommendation and

assistance in product

application provided

by the Consultants to

our customers

ILAS, MPF schemes

and general/conventional

insurance products

contributions

and payments

Note : The solid lines represent either payment of money or contractual relationship between the parties.

The dotted line represents provision of services.

brokerage commissions

and recurring fees

(in connection with the

amount of contribution/

payments made by our

customers)

Our

Group

Product Issuers

Our

customers

(policyholders)

CFS establishes business relationships with the Product Issuers by entering into the brokeragreements. Our customers are policyholders whom the Consultants provide services to. Our Groupdelivers our services to the customers through the Consultants. In conducting the business, theConsultants will (i) conduct financial needs analysis for customers who need long term insuranceproducts and schemes (including ILAS); and (ii) advise or make recommendations to the customersconcerning the selection by them of the underlying funds of ILAS. Our customers will paycontributions to the Product Issuers directly. The Product Issuers, which developed the insuranceproducts, would remunerate our Group on a commission and recurring fee basis for services providedby our Group to the customers.

The majority of our business is being generated from referrals, recurring business from existingcustomers and the remaining is from direct marketing. Referrals, recurring business from existingcustomers and direct marketing accounted for approximately 47.4%, 34.3% and 18.3% of the businessof our Group for the year ended 31 December 2009 respectively.

Being an independent insurance broker, our Group has certain competitive advantages inrespect of the services we provide as shown under the paragraph headed “Competitive advantages ofan independent insurance broker” in the section headed “Industry overview” and the paragraph headed“Our competitive advantages” in the section headed “Business” in this prospectus.

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SUMMARY

Our products

ILAS or Investment-linked Assurance Scheme is the major contracts of insurance on which ourGroup provides advisory services and from which over 99% of our Group’s revenue for the three yearsended 31 December 2007, 2008 and 2009 was generated. As a supplement, our Group also acts as anindependent broker for general and conventional insurance products and MPF schemes in the course ofproviding advisory services to the customers.

The following table sets out a breakdown of our revenue for the Track Record Period:

Year ended 31 December

2007 2008 2009

HK$’000 % HK$’000 % HK$’000 %

ILAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633,873 99.66 552,943 99.76 451,637 99.14Other insurance products . . . . . . . . . . . . . . . . . . . . . . . 1,743 0.27 410 0.07 3,391 0.74MPF schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 0.07 930 0.17 559 0.12

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 100.00 554,283 100.00 455,587 100.00

Our Directors believe that among all products and schemes we promote, ILAS is the mostpopular choice as it is believed to be one of the most effective insurance products to achieve ourcustomers’ objectives. A brief study of the popularity of ILAS in Hong Kong is set out under theparagraph headed “Development of ILAS in Hong Kong” in the section headed “Industry overview” inthis prospectus. Our Group is not involved in the underwriting of any product or scheme we promote.

Relationship with Consultants

The Consultants, except for licensed trainees, are not employed by CFS, but CFS has enteredinto contracts for services on the basis that they are providing exclusive insurance and MPF schemesbrokerage services in Hong Kong to CFS. Unlike insurance agents engaged by authorised insurers inHong Kong, the Consultants have no contractual relationship with and are independent of the ProductIssuers. Both the Consultants and our Group are responsible for the advisory services provided tocustomers and potential customers. The Consultants promote, arrange and negotiate contracts ofinsurance and MPF schemes with the customers independently in accordance with all applicablecodes, rules, laws and regulations of the relevant regulatory bodies and Government authorities inHong Kong and are remunerated on a commission basis by CFS for the insurance products and MPFschemes which they have successfully arranged.

All Consultants have contractually undertaken under their respective contracts for servicesentered into with CFS that they will only carry on their activities on behalf of our Group for which theyare licensed. All Consultants are registered with PIBA as technical representatives of CFS. There were1,023 Consultants and they represented the largest team licensed to market ILAS in Hong Kong as atthe Latest Practicable Date. There were 751 Consultants who were registered with both PIBA andMPFA as representatives of CFS as at the Latest Practicable Date, representing approximately 73.4%of the teams of Consultants.

In addition, although our Group may be subject to civil liabilities and/or disciplinary actions ofregulatory authorities (such as PIBA) if there is any misconduct by the Consultants in selling ILAS, theConsultants will indemnify our Group from and against all actions, claims, proceedings, costs,damages and expenses which may be levied, brought, incurred or made against our Group by anycustomer and potential customer in respect of or arising out of the provision of the services by the

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SUMMARY

Consultants pursuant to contracts for services between the Consultants and CFS. Details of theindemnity provided by the Consultants are set out under the paragraph headed “Our business model” inthe section headed “Business” in this prospectus.

Relationship with the Product Issuers

Our Group’s business relationships with various ILAS Issuers, who are independent of us, areformed on the basis of the terms of business and/or conditions issued by the ILAS Issuers to ourGroup. The broker agreements entered into between CFS and the ILAS Issuers have no expiry date andcan be terminated subject to one month’s advance notice and/or under certain circumstances. Throughprovision of relevant advices, our Group is entitled to receive brokerage commission income from theProduct Issuers for business referrals and introductions as a result of arrangement of insurance productsand/or MPF schemes to customers. Our Directors believe that it is the industry norm that commissionis paid by the Product Issuers to the brokers. Although Product Issuers are not treated as customers byour Group, we actually recorded accounts receivable and bear credit risk from the Product Issuersrather than the policyholders. For details of the broker agreements, please refer to the paragraph headed“Establishment of business relationships with Product Issuers” in the section headed “Business” in thisprospectus.

As at the Latest Practicable Date, our Group had built up a network with not less than 12 ILASIssuers and seven MPF Providers and certain other Product Issuers, and formed strategic partnershipsin promotion, marketing and sale of insurance products and MPF schemes.

The top five ILAS Issuers of our Group in terms of commission income, together accounted forapproximately 98.5%, 96.9% and 97.1% respectively of our Group’s revenue for the three years ended31 December 2007, 2008 and 2009. Each of our top five Product Issuers issues ILAS themselves. Fourof the top five ILAS Issuers of our Group are Zurich International Life Limited, Friends ProvidentInternational Limited, Standard Life (Asia) Limited and Generali International Limited. The largestILAS Issuer of our Group, in terms of commission income, accounted for approximately 50.9%, 48.2%and 43.7% respectively of our Group’s revenue for the three years ended 31 December 2007, 2008 and2009. For further details of our Group’s risk of concentration of ILAS Issuers for commission income,please refer to the paragraph headed “We rely on our top five ILAS Issuers for a significant portion ofour revenue, and we anticipate such dependence to continue in the near future” in the section headed“Risk factors” in this prospectus.

Relationship with our customers

Our customers are policyholders whom the Consultants provide services to. Our Directorsbelieve that it is the industry norm that the independent insurance brokers treat the policyholders astheir customers. Our Group primarily provides advices to our customers through the Consultants as tothe selection of suitable insurance products and/or MPF schemes which are provided by the ProductIssuers to assist the customers to achieve their needs, who in turn enter into policy contracts with theProduct Issuers. The policy contracts are issued by the Product Issuers. As an insurance broker, ourGroup is required under the ICO to act for the interest of policyholders and potential policyholders.Through provision of relevant advices, our Group is entitled to receive brokerage commission incomefrom the Product Issuers for business referrals and introductions as a result of arrangement of insuranceproducts and/or MPF schemes to customers. From another point of view, the customers pay such

4

SUMMARY

commission to our Group indirectly as all such costs would be eventually deducted from thecustomers’ contribution.

Although brokerage commission income and recurring fees are paid to us by the ProductIssuers, our Directors consider that such arrangement (as described in the diagram above in thissection) will not lead to conflicts despite commission income is paid by the Product Issuers because(i) our focus is to provide advices and information to our customers according to their objectives, needsand concerns; and (ii) our Group is dedicated to provide a comprehensive and quality choice of variousproducts to the customers through maintaining business relationships with various Product Issuers andperforming due diligence on their products, to enable the customers to make informed decision as totheir choice of product(s). Our Directors believe that the aforementioned relationships amongcustomers, authorised insurers, insurance brokers and consultants are common across the insurancebrokerage industry in Hong Kong.

In the event that inappropriate products are recommended and purchased by the customers, ourGroup will need to bear the liabilities, subject to the indemnity provided by the relevant Consultantsunder the contracts for services. The Product Issuers will bear the liabilities when the productsthemselves have defects or there are misrepresentations in the Product Issuers’ documentations for theproducts. Please refer to the paragraph headed “Our customers” in the section headed “Business” inthis prospectus for further details.

Internal control of our Group

With the aim of developing and strengthening our compliance and internal control mechanisms,our Group has established and implemented risk management and internal control systems, policiesand procedures, with reference to the requirements of the PIBA and the OCI. Our Group has engaged afirm of certified public accountants to perform an internal control review on our Group’s internalcontrol system. Details of the above are disclosed under the paragraph headed “Long established andcomprehensive internal control system” in the section headed “Business” in this prospectus.

OUR REVENUE MODEL

Our Group is entitled to receive one-off brokerage commission income and recurring feeincome from various Product Issuers for brokering the sale of their products. The following table setsout the amount of one-off brokerage commission income and recurring fee income for the TrackRecord Period:

2007 2008 2009

HK$’000Percentage

of total HK$’000Percentage

of total HK$’000Percentage

of total

One-off brokerage commission income . . . . . 625,615 98% 540,309 97% 439,582 96%Recurring fee income . . . . . . . . . . . . . . . . . . . 10,453 2% 13,974 3% 16,005 4%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 554,283 455,587

During the Track Record Period, most of our Group’s revenue was attributable to one-offbrokerage commission income derived from sale of (i) ILAS; (ii) general and conventional insuranceproducts; and (iii) MPF schemes. There was no significant fluctuation in the one-off brokeragecommission income and recurring fee income respectively as a percentage of total commission income

5

SUMMARY

of our Group during the Track Record Period. The one-off brokerage commission income andrecurring fee income receivable in respect of ILAS and general and conventional insurance productsare normally settled within 45 days upon receiving the commission statements. The income derivedfrom the MPF schemes includes up-front commission and recurring management fee which arereceivable upon the execution of the MPF schemes and periodically as agreed with the MPF Providerswith reference to the underlying asset value of the MPF schemes.

Our Group records accounts receivable due from the Product Issuers and our profit margindepends on, among others, the commission rates offered by the Product Issuers rather than thepolicyholders. Commission income is payable by the Product Issuers to our Group who may defaulttheir payment obligation to our Group even the customers paid the premiums to the Product Issuers.Accordingly, our Group is subject to the credit risk and bankruptcy risk from the Product Issuers.

(i) ILAS business

For each of the three years ended 31 December 2007, 2008 and 2009, the revenue of our Groupattributable to the one-off brokerage commission income and recurring fee income derived from thesale of ILAS amounted to approximately HK$633.9 million, HK$552.9 million and HK$451.6 million,representing approximately 99.7%, 99.8% and 99.1% of our Group’s total revenue respectively. Theone-off brokerage commission income and recurring fee income of ILAS are calculated generally as apercentage of the total premium of policy. The ILAS Issuers deliver their commission statements to ourGroup on a regular basis, such as weekly and monthly. Upon receiving the commission statements byour Group, the relevant ILAS Issuers would generally pay the one-off brokerage commission andrecurring fee income to our Group within 45 days. Our Group recognises the income on an accrualbasis upon receipt of the commission statements as confirmations from the ILAS Issuers.

Commission clawback

Pursuant to the terms of the broker agreements entered into between our Group and the ILASIssuers, the commission paid by the ILAS Issuers in relation to Regular-savings ILAS to our Group issubject to commission clawback, which applies solely to Regular-savings ILAS, by the ILAS Issuerson a pro-rata basis over an indemnified period. The indemnified period for commission clawback isgenerally from 6 months to 24 months. If a customer terminates his/her Regular-savings ILAS policy anumber of months after the date of execution of his/her insurance policy and such termination fallswithin the indemnified period, our Group is entitled to retain the commission for a portion of suchnumber of months over the relevant indemnified period and shall refund any excess of the commissionalready received to the Product Issuers. All commission clawback occurred in the same financial yearis immediately debited in our Group’s revenue. Pursuant to the contract for services entered intobetween each of the Consultants and CFS, the Consultants are required to bear part of the commissionclawback based on a ratio of the Consultants’ commission entitlement to our Group’s brokeragecommission income derived from the sale of Regular-savings ILAS. Our Group therefore has made anestimation of the expected cash outflows related to commission clawback for the business in theindemnified period which is subject to commission clawback with reference to a model which isestablished and developed by our Group (and which in our Directors’ opinion is objective andconsistent).

The amount of estimated commission clawback as at 31 December 2006, 2007 and 2008 wereapproximately HK$4.1 million, HK$5.1 million and HK$8.0 million, representing approximately

6

SUMMARY

1.1%, 0.8% and 1.4% of the revenue of our Group for each of the three years ended 31 December2008. These estimated sums were set aside at the end of each financial year to prepare for actualcommission clawback which may occur subsequently within the indemnified period. Thecorresponding actual clawback occurred and borne by our Group in 2007, 2008 and 2009 which relatesto revenue generated from the previous year, was approximately HK$3.3 million, HK$4.3 million andHK$6.7 million respectively. For further details, please refer to the paragraph headed “Commissionclawback” in the section headed “ Financial information” in this prospectus.

As at 31 December 2009, our Group had estimated commission clawback of approximatelyHK$5.9 million to account for the probable commission clawback in relation to the businessaccomplished and indemnified by our Group in the years prior to 31 December 2009.

Our Directors believe that our Group has objectively estimated the extent and the possibility ofoccurrence of commission clawback and the amount of estimated commission clawback has beenprudently, consistently and fairly reflected in the financial statements.

(ii) Conventional and general insurance business

For the three years ended 31 December 2007, 2008 and 2009, the revenue of our Groupattributable to one-off brokerage commission income and recurring fee income derived from the sale ofgeneral and conventional insurance products amounted to approximately HK$1.7 million, HK$0.4million and HK$3.4 million, representing approximately 0.27%, 0.07% and 0.74% of our Group’s totalrevenue respectively. The one-off brokerage commission income and recurring fee income arecalculated as a percentage of the premium of each policy and are usually receivable from the ProductIssuers on a monthly basis.

(iii) MPF schemes business

For the three years ended 31 December 2007, 2008 and 2009, the revenue of our Groupattributable to brokerage commission income and recurring fee income derived from the sale of MPFschemes amounted to HK$0.5 million, HK$0.9 million and HK$0.6 million, representingapproximately 0.07%, 0.17% and 0.12% of our Group’s total revenue respectively. The brokeragecommission income and recurring fee income are calculated as a percentage of the asset value of theMPF schemes and are usually receivable from the MPF Providers on a monthly basis. Our Grouprecognises the income upon the commencement of a MPF scheme.

OUR COMPETITIVE ADVANTAGES

We attribute our success to several principal competitive advantages which will enable us tomaintain our prominent position in the market and bolster our future prospects. These competitiveadvantages include:

Š The largest number of consultants licensed to market ILAS in Hong Kong

Š Quality, competence and independence of the Consultants

Š The Development Model

Š Young and experienced management

Š Stable senior members of the Consultants

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SUMMARY

Š Relationship with Product Issuers

Š Variety of ILAS, general and conventional insurance products and MPF schemes to satisfycustomers’ needs

Š Brand name recognition in insurance brokerage industry

Š Long established and comprehensive internal control system

For further details of our competitive advantages, please refer to the paragraph headed “Ourcompetitive advantages” in the section headed “Business” in this prospectus.

OUR BUSINESS STRATEGIES

The corporate mission of our Group is to establish the largest distribution network of insuranceproducts and MPF schemes with general recognition of being independent, professional and valueadding to the general public in Hong Kong.

Having considered the market potential of the insurance and MPF schemes brokerage industryand evaluated our Group’s existing market position and strengths, our Group intends to achieve ourbusiness objectives through implementing the following strategic plans:

Š Enhancement of quality of the Consultants

Š Expansion of the size of the teams of the Consultants

Š Expansion and promotion of ILAS, MPF schemes and other insurance business

Š Exploration of merger and acquisition opportunities and business collaboration with well-established companies

Š Addition and extension of further services and distribution channels

For further details of our strategies, please refer to the paragraph headed “Our businessstrategies” in the section headed “Business” in this prospectus.

8

SUMMARY

OUR TRADING RECORD

Summary of combined results of our Group

The following is a summary of our Group’s combined audited results for the Track RecordPeriod which has been extracted from the accountants’ report set out in Appendix I to this prospectus.The combined audited results were prepared on the assumption that the current structure of our Grouphad been in existence throughout the Track Record Period and in accordance with the basis set out inthe accountants’ report contained in Appendix I to this prospectus.

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 554,283 455,587Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,734 207 208Commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (362,850) (322,915) (253,538)Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,517) (63,569) (44,909)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,733) (16,484) (16,735)Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,217) (7,286) (4,651)Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (81,056) (106,638) (88,882)

PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,429 37,598 47,080Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,035) (6,088) (8,966)

PROFIT FOR THE YEAR AND TOTAL COMPREHENSIVE INCOMEFOR THE YEAR ATTRIBUTABLE TO THE OWNER OF OURCOMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,394 31,510 38,114

DIVIDEND PAID BY A SUBSIDIARY OF OUR COMPANY . . . . . . . . . . . 100,000 7,500 72,000

RISK FACTORS

Our Directors consider that the business and operations of our Group and the Share Offer aresubject to a number of risk factors, which can be categorised into (i) risks relating to our Group;(ii) risks relating to our industry; (iii) risks relating to the global economic downturn; (iv) risks relatingto the Share Offer; and (v) risks relating to statements made in this prospectus. These risks are set outin the section headed “Risk factors” in this prospectus, the headings of which are as follows:

(i) Risks relating to our business

Š We recorded a decreasing revenue during the Track Record Period and decreases innet profit and net profit margin in 2008 and 2009 as compared to 2007

Š We are highly concentrating on limited types of insurance products

Š A large portion of our revenue is originated from one-off commission income and therecurrence of sale from our existing customers is not guaranteed

Š The investment-linked business, which our Group’s business belongs to, is volatile

Š Our operating results may fluctuate due to market acceptance for our Group’sservices

Š We rely on business relationships with ILAS Issuers

Š We rely on our top five ILAS Issuers for a significant portion of our revenue, and weanticipate such dependence to continue in the near future

9

SUMMARY

Š We rely on our management team and teams of Consultants and their team leaders forcarrying on our operations

Š The Consultants may not have sufficient financial resources to provide indemnity toour Group against actions which may be brought against our Group by any customerand potential customer in respect of services provided by the Consultants

Š We may be exposed to risks on potential computer system failure and disruptions

Š We may be exposed to risks on probable commission clawback

Š We may be exposed to risks in relation to compliance standards

Š Failure to obtain registrations and/or licences from the relevant authorities couldadversely affect our operations

Š Misconduct of the Consultants is difficult to detect and deter

Š Possible mis-selling by the Consultants

Š We may not be able to implement our future plans successfully

Š Our historical dividends may not be indicative of our future dividends

(ii) Risks relating to our industry

Š Our business depends on the macro-economic situation of Hong Kong

Š We operate in a highly competitive industry

(iii) Risks relating to the global economic downturn

(iv) Risks relating to the Share Offer

Š There has been no prior public market for our Shares, and the liquidity, market priceand trading volume of our Shares may be volatile

Š The market price of our Shares may be volatile

Š Purchasers of our Shares will experience immediate dilution and may experiencefurther dilution if we issue additional Shares in the future

Š Future sales by our existing Shareholders of a substantial number of our Shares in thepublic market could materially and adversely affect the prevailing market price of ourShares

Š Impact of granting options under the Share Option Scheme

(v) Risks relating to statements made in this prospectus

Š Certain facts and other statistics in this prospectus are derived from various officialgovernment sources and may not be reliable

10

SUMMARY

STATISTICS OF THE SHARE OFFER

Based on an OfferPrice of HK$1.00

per Share

Based on an OfferPrice of HK$1.20

per Share

Market capitalisation of the Shares(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$400 million HK$480 millionPrice/earnings multiple(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5 times 12.6 timesUnaudited pro forma adjusted combined net tangible asset value per

Share(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK32.7 cents HK37.7 cents

Notes:(1) The market capitalisation is calculated on the basis of Offer Price and 400,000,000 Shares in issue and to be issued immediately

following the completion of the Share Offer, but takes no account of any Share which may be issued pursuant to the exercise of anyoption which may be granted under the Share Option Scheme, or any Shares which may fall to be allotted and issued or repurchased byour Company pursuant to the general mandates for the allotment and issue or repurchase of Shares referred to under the paragraphheaded “Written resolutions of the sole shareholder of our Company passed on 23 June 2010” in Appendix V to this prospectus.

(2) The calculation of the price/earnings multiple on a pro forma fully diluted basis is based on the earnings per Share for the year ended31 December 2009 at the respective Offer Prices of HK$1.00 per Share and HK$1.20 per Share and on the assumption that the ShareOffer has taken place since 1 January 2009 with a total number of 400,000,000 Shares in issue since 1 January 2009.

(3) The unaudited pro forma adjusted combined net tangible asset value per Share is arrived at after making the adjustments referred tounder the paragraph headed “Unaudited pro forma adjusted combined net tangible assets” in the section headed “Financial information”in this prospectus and the 400,000,000 Shares as referred in Note 1 above.

OUR DIVIDEND POLICY

Dividends may be paid out of our distributable profits as permitted under the relevant laws. Ourability to pay dividends will therefore depend on our ability to generate sufficient distributable profits.

During the three years ended 31 December 2007, 2008 and 2009, CFS declared a dividend of atotal sum of approximately HK$100.0 million, HK$7.5 million and HK$72.0 million, respectively, toits then sole shareholder, namely, CFG. There can be no assurance that in the future we will paydividends at a similar level to the past or at all, and potential investors should be aware that the amountof dividends we paid in the past should not be used as a reference or basis which future dividends aredetermined. The payment and the amount of dividends in the future will depend on various factors,including but not limited to, the results of operations, cash flows, financial position, statutory andregulatory restrictions on the payment of dividends by us and future prospects.

In addition, to the extent profits are distributed as dividends, such portion of profits will not beavailable to be reinvested in our operations and may therefore limit our future development. Therefore,there can be no assurance that we will declare dividends at all in the future. Future dividends, if any,will be at the discretion of our Board and will depend upon our future results of operations, capitalrequirements, general financial position, legal and contractual restrictions and other factors our Boardmay deem relevant.

11

SUMMARY

USE OF NET PROCEEDS FROM THE SHARE OFFER

Our Directors intend to apply the net proceeds from the Share Offer to finance our capitalexpenditure and business expansion, strengthen our capital base and improve our overall financialposition. Based on the Offer Price of HK$1.10 per Offer Share (being the mid-point of the indicativeOffer Price range between HK$1.00 and HK$1.20 per Offer Share), the net proceeds from the ShareOffer, after deducting underwriting commission and estimated expenses payable by us in connectionthereto, are estimated to be approximately HK$94 million. We presently intend to apply such netproceeds from the Share Offer as follows:

Š as to approximately HK$25 million or approximately 26.6% of the net proceeds from theShare Offer, will be used for enhancement of the quality of the Consultants throughoffering of (i) various external and internal continuous professional training programs; (ii)subsidies on recognised professional qualification courses; and (iii) incentives inrecruitment of Consultants from other professions and countries, and expansion of theteams of Consultants through (a) offering of incentives in speeding up the organic growthunder the Development Model; and (b) organising recruitment functions targetingindividuals from different market sectors and other countries;

Š as to approximately HK$25 million or approximately 26.6% of the net proceeds from theShare Offer, will be used for expansion and promotion of ILAS, MPF schemes and otherinsurance businesses by (i) increasing promotional and marketing spending in our ILAS,MPF schemes and other insurance businesses to the general public; and (ii) offering salesincentive and promotional events to the Consultants;

Š as to approximately HK$25 million or approximately 26.6% of the net proceeds from theShare Offer, will be used for exploration of merger and acquisition opportunities andbusiness collaboration with well-established companies, where no target or potentialbusiness collaboration with well-established companies had been identified as at the LatestPracticable Date;

Š as to approximately HK$15 million or approximately 16.0% of the net proceeds from theShare Offer, will be used for addition and extension of further services and distributionchannels by developing an on-line application system and a comprehensive informationmanagement system and expanding our distribution network to e-marketing and direct-marketing channels; and

Š as to approximately HK$4 million or approximately 4.2% of the net proceeds from theShare Offer, will be used for working capital and other general corporate purposes.

If the Offer Price is finally determined at the highest end of the indicative Offer Price rangebetween HK$1.00 and HK$1.20 per Offer Share, the net proceeds from the Share Offer will increaseby approximately HK$10 million to approximately HK$104 million. In such event, our Directorsintend to apply such additional net proceeds for the above usages on a pro-rata basis.

If the Offer Price is finally determined at the lowest end of the indicative Offer Price rangebetween HK$1.00 and HK$1.20 per Offer Share, the net proceeds from the Share Offer will reduce byapproximately HK$10 million to approximately HK$84 million. In such event, our Directors intend toreduce the intended use of proceeds for the above stated purposes on a pro-rata basis and we willfinance such shortfall by internal cash resources and/or additional bank borrowings, as and whenappropriate.

12

SUMMARY

To the extent that the net proceeds from the Share Offer are not immediately required for theabove purposes or if we are unable to effect any part of our future development plans as intended, wemay hold such funds in short-term deposits with licensed banks and/or authorised financial institutionsin Hong Kong for so long as it is in our best interest. We will also disclose the same in the relevantannual report.

13

DEFINITIONS

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

“Application Form(s)” white application form(s) and yellow application form(s),or where the context so requires, any one or both of them,relating to the Share Offer

“Application Lists” the application lists for the Public Offer

“Articles of Association” the articles of association of our Company adopted on23 June 2010 and as amended from time to time, asummary of which is set out in Appendix IV to thisprospectus

“associate(s)” has the meaning ascribed thereto under the Listing Rules

“Board” or “Board of Directors” the board of Directors as at the date of this prospectus

“Business Day” a day on which banks in Hong Kong are generally open forbusiness to the public and which is not a Saturday, Sundayor public holiday in Hong Kong

“BVI” the British Virgin Islands

“Call Option Deed” a call option deed dated 3 November 2008 whereby CFSwas granted call options to purchase shares of twoinsurance intermediary companies

“CAM” Convoy Asset Management Limited ( ),a company incorporated in Hong Kong with limitedliability on 24 November 1999, which is wholly-owned byCFG and is licensed by SFC to carry out type 1 (dealing insecurities), type 4 (advising on securities) and type 9 (assetmanagement) regulated activities under the SFO

“CCASS” the Central Clearing and Settlement System established andoperated by HKSCC

“CCASS Clearing Participant” a person admitted to participate in CCASS as a directclearing participant or general clearing participant

“CCASS Custodian Participant” a person admitted to participate in CCASS as a custodianparticipant

“CCASS Investor Participant” a person admitted to participate in CCASS as an investorparticipant who may be an individual or joint individuals ora corporation

“CCASS Participant” a CCASS Clearing Participant, a CCASS CustodianParticipant or a CCASS Investor Participant

“CFG” Convoy Financial Group Limited ( )(formally known as Advance All Enterprises Limited), a

14

DEFINITIONS

company incorporated in the BVI with limited liability on2 September 2002 and owned as to approximately 56.2%by Perfect Team and 43.8% by Convoy Inc

“CFG Group” CFG and its subsidiaries, save for our Group

“CFS” Convoy Financial Services Limited ( )(formerly known as Wardley Shipping Limited( ), Equitable Insurance ManagementLimited ( ), Convoy Insurance BrokersLimited ( ) and Convoy NPLFinancial Services Limited ( )), acompany incorporated in Hong Kong with limited liabilityon 12 March 1992, an indirect wholly-owned subsidiary ofour Company and a registered member of PIBA andcorporate intermediary of MPFA

“CIS” Convoy Investment Services Limited (), a company incorporated in Hong Kong with

limited liability on 23 February 2007 and is wholly-ownedby CFG, and is licensed by the SFC to carry out type 1(dealing in securities), type 2 (dealing in futures contracts)and type 4 (advising on securities) regulated activitiesunder the SFO, and one of the Joint Lead Managers

“Companies Law” the Companies Law, Chapter 22 (Law 3 of 1961, asconsolidated and revised) of the Cayman Islands

“Companies Ordinance” the Companies Ordinance (Chapter 32 of the Laws of HongKong)

“Company” or “our Company” Convoy Financial Services Holdings Limited( ), an exempted company incorporatedin the Cayman Islands on 12 March 2010 with limitedliability

“connected person(s)” has the meaning ascribed thereto under the Listing Rules

“Consultant(s)” individual(s) registered with PIBA as technicalrepresentative(s) and accredited to CFS, and engaged byCFS to provide services to customers and potentialcustomers in negotiating contracts of insurance and, insome cases, MPF schemes

“Controlling Shareholder(s)” any person who is or a group of persons who are togetherentitled to exercise or control the exercise of 30% (or suchother amount as may from time to time be specified in theTakeovers Code as being the level for triggering amandatory general offer) or more of the power at generalmeetings of our Company or who is or are in a position to

15

DEFINITIONS

control the composition of a majority of the Board, and, forthe purpose of this prospectus, refers to Convoy Inc,Perfect Team, CFG, and the respective individualshareholders of Convoy Inc, and Mr. Sin Kin Chung (thecousin of Mr. Shin Kin Man who is a shareholder ofConvoy Inc)

“Convoy Inc” Convoy Inc., a company incorporated in the BVI withlimited liability on 29 January 2001, which is owned byMr. Lee Kwok Yin, Denthur, Mr. Chan Chi Keung,Ms. Fong, Mr. Wong, Mr. Mak, Mr. Ng Ka Wai, Eric,Mr. Chan Tsz Kin, Ernest and Mr. Shin Kin Man as toapproximately 20.1%, 19.7%, 19.7%, 19.7%, 5.4%, 5.4%,5.1% and 4.9% respectively, and one of the ControllingShareholders

“CTL” Convoy (Trademarks) Limited ( ), acompany incorporated in the BVI with limited liability on30 October 2009 and a wholly-owned subsidiary of CFG

“Convoy”, “ ” and “ ” brand names adopted by our Group in engaging in ourbusiness

“Development Model” a development model for the Consultants, in which theConsultants and trainees are specially trained, monitoredand educated in accordance with our Group’s definedpolicies, details of which are described under the paragraphheaded “The Development Model” in the section headed“Business” in this prospectus

“Director(s)” the director(s) of our Company

“Group”, “we” or “us” our Company and our subsidiaries or any of them or, wherethe context so requires, in respect of the period before ourCompany became the holding company of our presentsubsidiaries, such subsidiaries as if they were thesubsidiaries of our Company at the time

“HK$” or “HK dollars” Hong Kong dollars, the lawful currency of Hong Kong

“HK cents” Hong Kong cents, the lawful currency of Hong Kong

“HKCIB” The Hong Kong Confederation of Insurance Brokers, abody of insurance brokers which is approved by the IAunder the Insurance Companies Ordinance

“HKFRSs” Hong Kong Financial Reporting Standards

“HKSCC” Hong Kong Securities Clearing Company Limited

“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary ofHKSCC

16

DEFINITIONS

“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the PRC

“IA” the public officer appointed as the Insurance Authoritypursuant to the Insurance Companies Ordinance

“IFPHK” Institute of Financial Planners of Hong Kong, a non-profit,self-regulatory organisation representing over 10,000financial services practitioner from the financial planningand wealth management industry in Hong Kong

“ILAS Issuer(s)” authorised insurer(s) that provide(s) Investment-linkedAssurance Scheme, an insurance policy of the “linked long-term” class as defined in the First Schedule, Part 2 of theICO, to our Group

“Independent Third Party(ies)” independent third party or parties who is/are not connectedwith any members of our Group, our Directors, the chiefexecutives and the substantial shareholders of ourCompany and our subsidiaries and/or any of theirrespective associates

“Insurance Companies Ordinance” or“ICO”

the Insurance Companies Ordinance (Chapter 41 of theLaws of Hong Kong), as amended and supplemented fromtime to time

“Joint Lead Managers” Quam Securities and CIS

“Latest Practicable Date” 22 June 2010, being the latest practicable date prior to theprinting of this prospectus for ascertaining certaininformation referred to in this prospectus

“Listing” the listing of our Shares on the Main Board

“Listing Date” the date on which dealings in our Shares first commence onthe Main Board, which is expected to be on or aroundTuesday, 13 July 2010

“Listing Rules” the Rules Governing the Listing of Securities on the StockExchange, as amended from time to time

“Main Board” the main board of the Stock Exchange

“Memorandum of Association” the memorandum of association of our Company

“MPF” Mandatory Provident Fund

“MPF Provider(s)” company(ies) that provide(s) MPF schemes to our Group

“MPFA” Mandatory Provident Fund Schemes Authority

17

DEFINITIONS

“Ms. Fong” Fong Sut Sam, an executive Director and one of theControlling Shareholders

“Mr. Mak” Mak Kwong Yiu, an executive Director and one of theControlling Shareholders

“Mr. Wong” Wong Lee Man, an executive Director and one of theControlling Shareholders

“OCI” the Office of the Commissioner of Insurance of theGovernment of Hong Kong, which is the office for the IA

“Offer Price” the final HK dollars offer price per Offer Share (excludingbrokerage fee of 1%, SFC transaction levy of 0.004% andStock Exchange trading fee of 0.005%) at which the OfferShares are to be subscribed, such price is expected to be notmore than HK$1.20 and not less than HK$1.00 and to bedetermined on or before Tuesday, 6 July 2010, or such laterdate as may be agreed between our Company and the JointLead Managers (for themselves and on behalf of theUnderwriters)

“Offer Share(s)” the Placing Share(s) and the Public Offer Share(s)

“Perfect Team” Perfect Team Group Limited, a company incorporated inthe BVI with limited liability on 2 September 2002 and oneof the Controlling Shareholders

“PIBA” Professional Insurance Brokers Association, a body ofinsurance brokers which is approved by the IA under theInsurance Companies Ordinance

“Placing” the conditional placing of initially 90,000,000 PlacingShares at the Offer Price on and subject to the terms andconditions described in this prospectus as further describedin the section headed “Structure and conditions of the ShareOffer” in this prospectus

“Placing Shares” the 90,000,000 new Shares being offered for subscriptionunder the Placing

“Placing Underwriters” the underwriters in respect of the Placing named under theparagraph headed “Placing Underwriters” in the sectionheaded “Underwriting” in this prospectus

“PRC” the People’s Republic of China which, for the purposes ofthis prospectus, excludes Hong Kong, the Macau SpecialAdministrative Region of the People’s Republic of Chinaand Taiwan

“Price Determination Date” the date on which the final Offer Price is determined by ourCompany and the Joint Lead Managers (for themselves andon behalf of the Underwriters), which is expected to be on

18

DEFINITIONS

or before Tuesday, 6 July 2010, or such later date as maybe agreed between our Company and the Joint LeadManagers (for themselves and on behalf of theUnderwriters)

“Product Issuer(s)” company(ies) that provide(s) insurance products (includingILAS) and/or MPF schemes to our Group

“Public Offer” the offer to the public in Hong Kong for subscription of thePublic Offer Shares at the Offer Price, on and subject to theterms and conditions stated in this prospectus and in theApplication Forms

“Public Offer Shares” the 10,000,000 new Shares initially being offered by ourCompany for subscription at the Offer Price under thePublic Offer

“Public Offer Underwriters” the underwriters in respect of the Public Offer named underthe paragraph headed “Public Offer Underwriters” in thesection headed “Underwriting” in this prospectus

“Quam Capital” or “Sponsor” Quam Capital Limited, a corporation licensed by the SFCto carry out type 6 (advising on corporate finance)regulated activity under the SFO

“Quam Securities” Quam Securities Company Limited, a corporation licensedby the SFC to carry out type 1 (dealing in securities), type 2(dealing in futures contracts), type 4 (advising onsecurities) and type 9 (asset management) regulatedactivities under the SFO, one of the Joint Lead Managers

“Reorganisation” the reorganisation of group of companies now comprisingour Group in preparation for the Listing completed on21 June 2010, details of which are set forth under theparagraph headed “History and development” in the sectionheaded “Corporate history, development andReorganisation” and under the paragraph headed“Corporate Reorganisation” in Appendix V to thisprospectus

“Securities Ordinance (repealed)” the Securities Ordinance (Chapter 333 of the Laws of HongKong), which was repealed with effect from 1 April 2003

“SFC” the Securities and Futures Commission of Hong Kong

“SFC Circular” the circular entitled “Circular Clarifying the LicensingRequirements arising out of the Promotion Offering or Saleof Investment-linked Assurance Schemes to the Public”dated 13 August 2009 published by the SFC

“SFO” the Securities and Futures Ordinance (Chapter 571 of thelaws of Hong Kong), as amended and supplemented fromtime to time

19

DEFINITIONS

“Share(s)” ordinary share(s) with a nominal value of HK$0.10 each inthe share capital of our Company

“Share Offer” the Placing and the Public Offer

“Share Option Scheme” the share option scheme conditionally adopted by ourCompany on 23 June 2010, the principal terms of whichhave been summarised under the paragraph headed “ShareOption Scheme” in Appendix V to this prospectus

“Shareholder(s)” holder(s) of the Share(s)

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Substantial Shareholder(s)” has the meaning ascribed to it under the Listing Rules

“Takeovers Code” The Hong Kong Code on Takeovers and Mergers

“Track Record Period” the period comprising the three years ended 31 December2007, 2008 and 2009

“Trademarks” , , , and , being trademarksowned by CTL

“Trademarks Agreement” a trademarks agreement entered into between CTL and ourCompany on 21 June 2010, details of which are disclosedunder the paragraph headed “Connected transactions” inthe section headed “Relationship with the ControllingShareholders and connected transactions” in thisprospectus;

“Underwriters” the Placing Underwriters and the Public Offer Underwriters

“Underwriting Agreement” the underwriting agreement dated 28 June 2010 enteredinto between, among others, our Company, the ControllingShareholders, the Sponsor, the Joint Lead Managers andthe Underwriters relating to the Share Offer, details ofwhich are set out in the section headed “Underwriting” inthis prospectus.

“United States” or “US” or “USA” the United States of America, its territories, its possessionsand all areas subject to its jurisdiction

“US$” or “US dollar(s)” United States dollar(s), the lawful currency of the UnitedStates

“%” per cent.

Certain amounts and percentage figures included in this prospectus have been subject torounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmeticaggregation of the figures preceding them.

20

GLOSSARY OF TECHNICAL TERMS

This glossary contains explanations and definitions of certain technical terms used in thisprospectus in connection with our Group and our business. The terms and their meanings may notcorrespond to standard industry meanings or usage of these terms.

“authorised insurer(s)” company(ies) that provides insurance products includinglong term insurance and general insurance productsschemes in Hong Kong

“CAGR” the acronym for compound annual growth rate, being theannual growth rate computed on a compound basis

“CFP” the acronym for CERTIFIED FINANCIAL PLANNERCM,a designation awarded by Certified Financial Planner Boardof Standards Inc., which is a professional regulatoryorganisation to foster professional standards in personalfinancial planning so that the public values, has access toand benefits from competent and ethical financial planning

“CPD” the acronym for Continuing Professional Development

“endowment” a policy that the payment of the face amount at the end of aspecific term or upon earlier death and if the insuredsurvive the term, the policy is said to mature

“GDP” the acronym for gross domestic product

“general insurance” insurance other than long term insurance

“IIQAS” the acronym for Insurance Intermediaries QualityAssurance Scheme

“ILAS” the acronym for Investment-linked Assurance Scheme, aninsurance policy of the “linked long term” class as definedin First Schedule, Part 2 of the ICO

“increasing death benefit” the death benefit which will be the value of the unitsaccumulated in the policyholder’s account, at the date ofdeath, plus the chosen death cover

“level death benefit” the death benefit which will be the higher of the value ofunits accumulated in the policyholder’s account, at the dateof death or chosen death cover

“linked long term” an insurance policy that effecting and carrying outcontracts of insurance on human life or contracts to payannuities on human life where the benefit are wholly orpartly to be determined by reference to the value of, or theincome from, property of any description (whether or notspecified in the contracts) or by reference to fluctuations in,in an index of, the value of property of any description(whether or not so specified)

21

GLOSSARY OF TECHNICAL TERMS

“long term insurance” one of the two major classes of insurance business as perthe ICO, and the dominant categories within this classconcern life insurance contracts which are normally notannual contracts, but last for a number of years

“Lump-sum ILAS” one type of ILAS, of which the premium is contributed byone lump sum at the beginning of the term of ILAS

“m2” square meters

“office premiums” in relation to a financial year of an insurer, means:

(i) for policies with single mode of payment, thepremiums paid by the policyholders during thefinancial year; or

(ii) for policies with regular mode of payment, theannualised premiums of the policies at the valuationdate or the flexible premium paid by the policyholdersduring the financial year.

“Regular-savings ILAS” one type of ILAS, of which the premium is contributed on aregular basis during the terms of ILAS

“sq.ft.” square feet

“whole-life” a policy designed to last the whole of one’s life and theface amount is paid on death (and not before), wheneverthat occurs

22

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that are based on various assumptionsregarding our present and future business strategy and the environment in which we will operate in thefuture. These forward-looking statements reflecting our current views with respect to future events arenot a guarantee of future performance and are, by their nature, subject to significant risks anduncertainties. These forward-looking statements include, without limitation, statements relating to:

Š our business strategies and plans of operation;

Š our capital expenditure plans;

Š the amount and nature of, and potential for, future development of our business;

Š our operations and business prospects;

Š our dividend policy;

Š projects under planning;

Š the regulatory environment of our industry in general; and

Š future development in our industry.

The words “anticipate”, “believe”, “could”, “expect”, “going forward”, “intend”, “may”,“plan”, “seek”, “will”, “would” and similar expressions, as they relate to us, are intended to identify anumber of these forward-looking statements. These forward-looking statements reflecting our currentviews with respect to future events are not a guarantee of future performance and are subject to certainrisks, uncertainties and assumptions, including the risk factors described in this prospectus. One ormore of these risks or uncertainties may materialise, or underlying assumptions may prove incorrect.

Subject to the requirements of the Listing Rules, our Company does not intend to publiclyupdate or otherwise revise the forward-looking statements in this prospectus, whether as a result ofnew information, future events or otherwise. As a result of these and other risks, uncertainties andassumptions, the forward-looking events and circumstances discussed in this prospectus might notoccur in the way our Company expects, or at all. Accordingly, you should not place undue reliance onany forward-looking information. All forward-looking statements in this prospectus are qualified byreference to this cautionary statement.

In this prospectus, unless otherwise stated, statements of or references to our intentions or thoseof any of our Directors are made as at the date of this prospectus. Any such intentions may change inlight of future developments.

23

RISK FACTORS

Potential investors should carefully consider all of the information set out in thisprospectus and, in particular, should consider and evaluate the following risks associated with aninvestment in our Company before making any investment decision in relation to our Company.

RISKS RELATING TO OUR BUSINESS

We recorded a decreasing revenue during the Track Record Period and decreases in net profit andnet profit margin in 2008 and 2009 as compared to 2007

We have been experiencing a decrease in our revenue during the Track Record Period anddecreases in net profit and net profit margin in 2008 and 2009 as compared to 2007. Our revenuedropped by 13% from the year ended 31 December 2007 to the year ended 31 December 2008, andfurther dropped by 18% from the year ended 31 December 2008 to the year ended 31 December 2009.Our net profit and net profit margin decreased by 69% and 10% respectively from the year ended 31December 2007 to the year ended 31 December 2008, and increased by 21% and 2% respectively fromthe year ended 31 December 2008 to the year ended 31 December 2009. Accordingly, our revenue, netprofit and net profit margin fluctuate significantly as a result of the change in the global economicenvironment and customer preference. There is no assurance that we will be able to improve ormaintain our revenue and net profit margin in the future. If we continue to have a decrease in therevenue and net profit margin in the future, our operating cash flow may be subject to constraint and itcould have a material adverse effect on our business, financial condition, results of operations andprospects. For further details of our revenue and net profit margin, please refer to the section headed“Financial information” in this prospectus.

We are highly concentrating on limited types of insurance products

A significant portion of our Group’s revenue is generated from the sale of ILAS. For each ofthe three years ended 31 December 2007, 2008 and 2009, income from the sale of ILAS accounted forapproximately 99.7%, 99.8% and 99.1% of our Group’s revenue respectively. The nature of ILASinvolves high risk and does not necessarily lead to high return due to the uncertainty of return, andtherefore, there is no assurance that ILAS will be continuously accepted in the Hong Kong market andwe will be able to maintain our revenue through arranging ILAS. Any significant deterioration in ourGroup’s ability to generate sufficient sustainable revenue from the sale of ILAS and any significantfluctuation in the market demand for ILAS may adversely affect the sale of such products and henceour Group’s profitability.

A large portion of our revenue is originated from one-off commission income and the recurrence ofsale from our existing customers is not guaranteed

Our revenue is derived from the commission in relation to our sale of ILAS, general andconventional insurance products and MPF schemes for the Product Issuers, which commission is, to asignificant extent, one-off in nature and is not dependent on the length of the relevant product schemesthat the customers have committed with the Product Issuers. One-off brokerage commission incomeconstituted approximately 96% of the revenue for the year ended 31 December 2009. In addition,although we have been maintaining business relationship with the customers and have successfullydeveloped different marketing channels to generate business from referrals, recurring business fromexisting customers and direct marketing, only 34.3% of our revenue for the year ended 31 December2009 is generated by recurring business from our existing customers, which represents existing

24

RISK FACTORS

customers purchasing new products through our Group. As such, there is no assurance that we are ableto generate increasing commission, or at all, from the recurring customers, or successfully arrangedinsurance and/or MPF schemes with new customers. Given the one-off nature of a large portion of ourcommission, if we are not able to maintain or enable a growth in our commission income, ouroperations and financial positions may be adversely affected and we may not be able to carry out ourfuture plans as scheduled.

The investment-linked business, which our Group’s business belongs to, is volatile

A majority of our revenue is derived from the business referral and introduction of ILAS. Ouroperating results therefore are very dependent on the demand for ILAS in Hong Kong. Our Directorsbelieve that the fundamental factor which affects the demand for ILAS in Hong Kong is the gain inprominence of the financial planning concept in Hong Kong influenced by the launch of the MPFsystem in Hong Kong since December 2000. Other major underlying factors that may affect thedemand for ILAS include investment market sentiment, economic conditions, consumer confidenceand change in disposable income of individuals. Whereas, supply of ILAS is mainly driven by itsdemand and by the profitability of issuing ILAS by the Product Issuers. According to the Hong KongInsurance Business Statistics published by the OCI, for the four years ended 31 December 2006, 2007,2008 and 2009, the annual growth rates in terms of office premiums for investment-linked businesswere 42.7%, 73.7%, -22.8% and 15.7% respectively, as compared with 5.0%, 7.4%, 9.2% and 10.7%for non-investment-linked business during the corresponding years in respect of individual life in-forcebusiness. Accordingly, the investment-linked business, which our Group’s business belongs to, isvolatile. There is no assurance that our Group will substantiate a growth in revenue from operating inthe investment-linked business regime.

Our operating results may fluctuate due to market acceptance for our Group’s services

Although various companies listed on the Stock Exchange may provide ILAS as an ancillaryservices and the business model of such companies may or may not be similar to the business model ofour Group, our Directors are not aware that there are any companies listed on the Stock Exchangewhose current principal business is acting as an independent insurance broker. The future of ourGroup’s business will depend on the continuing success in achieving market acceptance for ourexisting services and the introduction of new services in the markets. Although our Directors believethat our Group can continue to achieve market acceptance for our Group’s services, if our Group failsto achieve such market acceptance for our Group’s services, our Group’s operations and financialperformance may be adversely affected.

We rely on business relationships with ILAS Issuers

Our Directors believe that establishment of business relationships between our Group andmajor ILAS Issuers such as Friends Provident International Limited and Zurich International LifeLimited which facilitates our Group to provide a wide variety of products to satisfy customers’ needsand enables our Group to bargain with such ILAS Issuers for more favourable terms to benefit ourcustomers, is one of the factors contributing to our current success. Our Group has established businessrelationships with major ILAS Issuers ranging from five to nine years. Currently, our Group’s businessrelationships with various ILAS Issuers are formed on the basis of the terms of business and/orconditions issued by the ILAS Issuer(s) to our Group setting out the terms and conditions upon whichILAS Issuer(s) are prepared to accept business referred or introduced to them by our Group.

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RISK FACTORS

In general, the major terms of the broker agreements entered into between CFS and the ProductIssuers (such as ILAS Issuers) include, inter alia, the following:

(i) Our Group shall, in the capacity of an independent contractor, introduce business to theProduct Issuers and in return the Product Issuers shall pay commission to our Group at aspecified rate on a regular basis.

(ii) The Product Issuers reserve the rights not to accept the business introduced by our Group.

(iii) In the event of a Regular-savings ILAS being terminated by the relevant customer duringthe indemnified period for commission clawback which generally ranges from 6 months to24 months from the date of execution of the ILAS, our Group shall refund to the ProductIssuers the relevant commission which we have received on a pro-rata basis, i.e., if acustomer terminates his/her Regular-savings ILAS a number of months after the date ofexecution of his/her insurance policy and such termination falls within the indemnifiedperiod, our Group is entitled to retain the commission for a portion of such number ofmonths over the relevant indemnified period and shall refund any excess commissionalready received to the Product Issuers. For details of risks on commission clawback,please refer to the paragraph headed “We may be exposed to risks on probablecommission clawback” in this section.

(iv) The agreements have no expiry date and can be terminated subject to one month’s advancenotice and/or under certain circumstances, for example:

(a) winding up proceedings being instituted against our Group;

(b) our Group ceases trading;

(c) our Group committing any act of misconduct which, in the opinion of the ProductIssuer, is or likely to be prejudicial to its interest; or

(d) any breach of conditions under the broker agreements.

There is no assurance that our Group will succeed in maintaining existing and/or establishingnew, strategic relationships with the Product Issuers. If our Group cannot maintain and/or establishsuch relationships, our Group’s business, operations and financial position may be adversely affected.

We rely on our top five ILAS Issuers for a significant portion of our revenue, and we anticipate suchdependence to continue in the near future

We provide independent advisory services to our customers who then enter into insurancepolicies with the Product Issuers. In return, we receive brokerage commission income and recurring feeincome from various Product Issuers whom our customers purchase insurance policies from. We relyon a few international ILAS Issuers, who are independent of us, for a substantial portion of our totalrevenue. During the three years ended 31 December 2007, 2008 and 2009, the top five ILAS Issuers ofour Group, in terms of commission income and recurring fee income, accounted for approximately98.5%, 96.9% and 97.1% of our Group’s revenue respectively. The largest ILAS Issuer of our Group,in terms of commission income and recurring fee income, accounted for approximately 50.9%, 48.2%and 43.7% respectively of our Group’s revenue for the three years ended 31 December 2007, 2008 and2009. There is no assurance that our Group will secure continuing commission income and recurringfee income from these ILAS Issuers in the future, or secure comparable levels of commission incomeand recurring fee income, or at all, from other ILAS Issuers to offset any loss of revenue from losing

26

RISK FACTORS

any of these ILAS Issuers. If any of these ILAS Issuers materially reduces or delays payments, orterminates its business relationship with us, our cash flow and profitability may be adversely impacted.

We rely on our management team and teams of Consultants and their team leaders for carrying onour operations

Our Group’s success is, to a large extent, attributable to the continued commitment of ourDirectors and senior management and teams of Consultants. Our Directors and senior managementhave extensive experience in the insurance and MPF brokerage industry. They have been playing asignificant role in the development and daily operations of our Group. The loss of services of theexecutive Directors and the key personnel in the absence of any suitable replacements may have amaterial adverse effect on our Group’s operation and future profitability. As such, each of theexecutive Directors has signed a service contract with our Group for an initial fixed term of three yearscommencing from 13 July 2010. However, there can be no assurance that our Group will be able toretain the services of our executive Directors after the expiration of the initial fixed term or the servicesof our other key personnel. The loss of service of any of our Directors or senior management couldhave a material adverse effect on our Group’s management and operations.

Our Group has significantly relied on the Consultants to generate income by providing advisoryservices to our customers. The team leaders of the Consultants take part in the management,supervision and training of their team members and play an important role in controlling and managingthe Consultants to generate business and income for our Group. CFS has entered into contracts forservices with the Consultants on the basis that they are providing exclusive insurance and MPFbrokerage services to our Group in Hong Kong as opposed to employer-employee relationships. Eachparty under the contract for services is required to give the other party one month’s written notice toterminate such contract. Furthermore, the Consultants are prohibited by the contracts for servicesentered into between CFS and the Consultants to engage or be interested either directly or indirectly asprincipal, agent or employee in promoting any business similar to those of our Group without obtainingprior consent of our Group in writing during the continuance in force of the contracts for services andare prohibited to engage in or undertake the business similar to those of our Group in Hong Kong,including but not limited to the business of the provision of insurance and MPF schemes brokerageservices during the three months immediately following the termination of the contracts for services.

Competition for Consultants is intense and there can be no assurance that our Group will beable to attract, assimilate or retain such personnel. Accordingly, there is no assurance that our Groupwill succeed in maintaining continuous services of our quality team leaders and/or their team members.If our Group cannot maintain the relationship with team leaders and/or team members of Consultantsand our Group is unable to secure other team leaders and/or team members to replace them, ourGroup’s business, operations and financial position may be adversely affected.

The Consultants may not have sufficient financial resources to provide indemnity to our Groupagainst actions which may be brought against our Group by any customer and potential customer inrespect of services provided by the Consultants

The Consultants act as representatives for our Group so that they are responsible for solicitinginsurance and MPF schemes business in Hong Kong in the scope of independent insurance and MPFbrokerage in accordance with all applicable codes, rules, laws and regulations of the relevantregulatory bodies and Government authorities in Hong Kong. The Consultants will indemnify our

27

RISK FACTORS

Group from and against actions, claims, proceedings, costs, damages and expenses which may belevied, brought, incurred or made against our Group by any customer and/or potential customer inrespect of or arising out of the provision of the services by the Consultants. There is no assurance thatthe Consultants will have sufficient financial resource, or at all, to provide such indemnity to ourGroup. In the event that the Consultants fall short of financial resources, our Group may not be able tobe indemnified by the Consultants for any compensation paid to the customers and/or potentialcustomers, and it may have an adverse effect on the operation and financial conditions of our Group.

We may be exposed to risks on potential computer system failure and disruptions

Our Group’s success depends on an efficient and effective computer information system toprovide accurate and timely information to facilitate our provision of personalised advisory services tothe customers. To prevent the failure of the computer system, our Group continuously monitors,maintains and updates the computer system. However there is no assurance that there will not be anydisruptions to our Group’s computer system and, in such event, the delivery of our Group’s servicesmay be adversely affected.

We may be exposed to risks on probable commission clawback

Our Group receives brokerage commission income from various Product Issuers for businessreferral and introduction. The commission is calculated based on the regular contributions by the customersto the Product Issuers. Pursuant to the terms of the agreements entered into between our Group and theProduct Issuers, the commission paid by the Product Issuers to our Group is subject to commissionclawback, which applies solely to Regular-savings ILAS, by the Product Issuers on a pro-rata basis over anindemnified period. The indemnified period generally ranges from 6 months to 24 months. Our Directorsbelieve that the customers are reluctant to terminate the Regular-savings ILAS during the indemnifiedperiod because they will suffer significant charges or penalty by doing so. The amount of commissionclawback occurred in 2009 for the business preceding to the year ended 31 December 2009 borne by ourGroup was approximately HK$6.7 million and the estimated commission clawback for the year ended31 December 2009 was approximately HK$5.9 million. The table below sets forth our historical trend andactual commission clawback of Regular-savings ILAS:

Year ended 31 December

2007 2008 2009

Actual commission clawback borne by our Group in relation to the revenue fromRegular-savings ILAS during the year (HK$’ million)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 4.3 6.7

Note:(1) The actual commission clawback represents the actual commission clawback charged by the Product Issuers and borne by our Group

during the year which relates to revenue generated from previous years.

There is no assurance that there will not be any difference between the estimated commissionclawback and the actual amount of commission clawback and such estimated commission clawbackmay not be accurate and precise. As the actual amount of commission clawback may be in excess ofthe estimated commission clawback and accordingly, this would have a direct and adverse effect on theperformance of our Group in future. Also, our Group has requested the Consultants to acquire a goodunderstanding of customers’ financial positions and to explain clearly the terms, nature andcharacteristics of the products to the customers. This will help the customers to plan their ILAS as wellas to minimise the risks of commission clawback for our Group. In the event that there is a hugenumber of customers who pre-maturely terminate the Regular-savings ILAS in the indemnified period,

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RISK FACTORS

it may cause losses to our Group and have a material adverse effect on our Group’s business andfinancial conditions.

We may be exposed to risks in relation to compliance standards

Insurance and MPF schemes brokerage services to be provided by our Group are characterisedby and subject to regulations and regulatory approvals of government and regulatory bodies such asPIBA and MPFA. Compliance standards in relation to approvals or regulatory requirements may alsochange from time to time. New laws and regulations and/or changes in the interpretation of existinglaws and regulations may escalate the compliance costs for our Group or limit our Group’s ability toprovide these services such that our Group’s profitability in the provisions of insurance and MPFschemes brokerage services may be affected.

Failure to obtain registrations and/or licences from the relevant authorities could adversely affectour operations

Our Group and the Consultants are required to obtain registrations and/or licences from therelevant authorities (including IA or one of the two approved bodies of insurance brokers, namelyPIBA and HKCIB) to provide services to customers. These registration(s) and approval(s) are requiredto be renewed upon expiry. Details of the regulation regime of the relevant authorities are set out in thesection headed “Regulatory framework” in this prospectus. Since the incorporation of CFS, there hasbeen no occasion where the relevant authorities refuse to renew the registrations and/or licences of ourGroup and the Consultants upon expiry. However, if these registration(s) and/or approval(s) are notrenewed upon expiry, our Group may not be able to continue to provide services to the customers andour Group’s financial performance and business operation may be adversely affected. Further, if therelevant authorities enact additional regulations or make changes to the existing laws or regulations,our Group may be required to incur additional compliance costs, which could have an adverse impacton our Group’s financial condition.

Misconduct of the Consultants is difficult to detect and deter

Misconduct of the Consultants could result in violations of law by us, regulatory sanctions,litigation or serious reputational or financial harm. Misconduct could include:

(i) the use of methods of solicitation and advertising that are not compatible with the integrityand dignity of the profession of insurance broking;

(ii) the use of any illustration, circular or memorandum that misrepresents or is incomplete asregards the terms, benefits or advantages of any contract of insurance issued or to beissued to a prospective purchaser of insurance;

(iii) the use of any incomplete comparison of any policy or contract of insurance for thepurpose of inducing an insured to forfeit or replace a policy or contract of insurance;

(iv) the offer of any payment, allowance or gift as an inducement to any prospective insured toinsure through the offerer; and

(v) holding out to the public or advertising by means of advertisements, cards, circulars,letters, signs or other methods in an irresponsible or untruthful manner.

We cannot always deter misconduct of the Consultants, and the precautions we take to preventand detect these activities may not be effective in all cases. We cannot assure you that misconduct of

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RISK FACTORS

the Consultants will not lead to a material adverse effect on our business, results of operations orfinancial condition.

Possible mis-selling by the Consultants

Under our business model, the Product Issuers, which have developed the insurance productsand the MPF schemes that our Group promotes, will remunerate our Group on a commission andrecurring fee basis for services provided by our Group to the customers, and we would in turn paycommission to the Consultants for the insurance products developed by the Product Issuers and theMPF schemes offered by the MPF Providers which they have successfully arranged. The commissionoffered by the Product Issuers on different types of insurance products and/or MPF schemes varies. Assuch, there may be inherent conflict of interests as the Consultants may be tempted to sell productswith higher commission rather than those actually required by or suitable to the policyholders and/orpotential policyholders in the event those products required by the policyholders are of lowercommission rate. We cannot assure you that, under our current business model, the Consultants willalways promote those products that are actually required by or suitable to the policyholders and/orpotential policyholders, or at all.

In addition, apart from the contractual relationship with CFS, most of the Consultants are alsocontracted with CAM to conduct type 1 (dealing in securities) and/or type 4 (advising on securities)activities regulated by the SFC. Our Group has no direct control over the Consultants’ conduct whilethey carry on business on behalf of CAM. Our Group has entered into a non-exclusive licensingagreement for insurance and MPF schemes brokerage business in Hong Kong dated 21 June 2010 withCTL to use the Trademarks registered by CTL in Hong Kong. Such Trademarks are also used by CAMin carrying on CAM’s business as well as by the Consultants when they represent CAM. Given theclose relationship between our Group and CAM and the use of the Trademarks in carrying on therespective businesses, in the event there is any misconduct or mis-selling by the Consultants when theyare representing CAM, or any Consultant’s breaches of relevant rules and regulations in their capacityas representatives of CAM or using the Trademarks which are also used by our Group resulting in anysanction against the Consultants and/or CAM by the relevant regulatory authorities, our Group may beexposed to reputation risk for their misconduct, mis-selling and/or breaches of relevant rules andregulations. As a consequence, the corporate reputation and image of our Group, which are importantin the promotion of our Group and our products to the public, may be adversely affected.

We had been involved in litigation, examination and investigation regarding misconduct ormis-selling of the Consultants. For details of the claims or litigation against our Group, please refer tothe paragraph headed “Summary of investigation and compliance issues” in the section headed“Business” in this prospectus. Although no judgment, verdict nor any form of sanction has beenadversely entered or made against our Group by the relevant regulatory authorities, including PIBA,and courts regarding mis-selling of products or any other regulatory matters since CFS becoming acorporate member of the PIBA in 1995, we cannot predict the outcome of any future litigation,examination or investigation. Given the unpredictability nature of future litigation, examination andinvestigation, it is possible that an adverse outcome could have a material adverse effect on ouroperating results or cash flows.

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RISK FACTORS

We may not be able to implement our future plans successfully

Further expansion of our teams of the Consultants and our business operations is a key to oursuccess. Our planned expansion requires us to identify suitable personnel and markets. However, evenif we successfully identify the aforesaid, we may be unable to expand our business if we cannotcompete effectively in the market.

Our historical dividends may not be indicative of our future dividends

Dividends may be paid out of our distributable profits as permitted under the relevant laws. Ourability to pay dividends will therefore depend on our ability to generate sufficient distributable profits.

During the three years ended 31 December 2007, 2008 and 2009, CFS declared an interimdividend of a total sum of approximately HK$100.0 million, HK$7.5 million and HK$72.0 million,respectively, to its then sole shareholder, namely, CFG. There can be no assurance that in the future wewill pay dividends at a similar level to the past or at all, and potential investors should be aware thatthe amount of dividends we paid in the past should not be used as a reference or basis which futuredividends are determined. The payment and the amount of dividends in the future will depend onvarious factors, including but not limited to, the results of operations, cash flows, financial position,statutory and regulatory restrictions on the payment of dividends by us and future prospects.

In addition, to the extent profits are distributed as dividends, such portion of profits will not beavailable to be reinvested in our operations and may therefore limit our future development. Therefore,there can be no assurance that we will declare dividends at all in the future. Future dividends, if any,will be at the discretion of our Board and will depend upon our future results of operations, capitalrequirements, general financial position, legal and contractual restrictions and other factors our Boardmay deem relevant.

RISKS RELATING TO OUR INDUSTRY

Our business depends on the macro-economic situation of Hong Kong

Currently, all of our Group’s earnings are derived from Hong Kong. Our business and results ofoperations will be affected by the overall performance of the Hong Kong economy, which may in turnbe affected by many unpredictable factors including, inter alia, local and international economic andpolitical conditions, general market sentiment, changes in the regulatory environment and fluctuationsin the interest rates. Moreover, the future prospect of Hong Kong is linked to the economic, social andpolitical development of the PRC and any unfavourable disruption to such development could have acorresponding effect on the Hong Kong economy.

We operate in a highly competitive industry

Our Group faces competition from existing competitors, including banks and insurance andinsurance brokerage companies, which have developed and provided advisory services similar to thoseoffered by our Group. Competition in this industry is based on the quality and the scope of services,market reputation, business network and pricing.

Although there existed certain entry barriers in the independent brokerage industry that ourGroup is currently engaged in, the details of which are set out under the paragraph headed“Competition” in the section headed “Business” in this prospectus, there is no assurance that our

31

RISK FACTORS

Group will be able to maintain our competitive edge over our competitors, or to capture the perceivedor new market opportunities. Any increase in competition may result in price reduction, which erodesour Group’s market share and has an adverse impact on our Group’s operation and profitability.

RISKS RELATING TO THE GLOBAL ECONOMIC DOWNTURN

Recent financial difficulties and economic conditions in the United States, Europe and otherregions may materially and adversely impact our business, financial condition, results of operationsand prospects in a number of ways, including:

(i) economic difficulties in the United States, Europe and other regions may lead to aneconomic slowdown or recession in the Hong Kong market in which we operate;

(ii) an economic slowdown or recession, or even the risk of a potential economic slowdown orrecession may cause our customers to delay, defer or cancel their purchases through us,including decisions previously made;

(iii) under difficult economic conditions, consumers may seek to reduce discretionary spendingby forgoing purchases of ILAS and other insurance products;

(iv) financing and other sources of liquidity may not be available on reasonable terms or at all;and

(v) the trading price of our Shares may experience increased volatility.

These risks may be exacerbated in the event of a prolonged economic downturn or financialcrisis. Our revenue was adversely affected after the economic downturn.

RISKS RELATING TO THE SHARE OFFER

There has been no prior public market for our Shares, and the liquidity, market price and tradingvolume of our Shares may be volatile

Prior to the Share Offer, there was no public market for our Shares. The initial Offer Pricerange for our Shares was the result of negotiations among our Company and the Joint Lead Managerson behalf of the Underwriters, and the Offer Price may differ significantly from the market price forthe Shares following the Share Offer. We have applied to list and deal in our Shares on the StockExchange. However, even if approved, being listed on the Stock Exchange does not guarantee that anactive trading market for our Shares will develop following the Share Offer or that our Shares willalways be listed and traded on the Stock Exchange. We cannot assure you that an active trading marketwill develop or be maintained following the completion of the Share Offer, or that the market price ofour Shares will not decline below the Offer Price.

The price and trading volume of our Shares may be highly volatile. Factors such as variationsin our revenue, earnings and cash flows and announcements of new investments, strategic alliancesand/or acquisitions, fluctuations in market prices for our products and services or fluctuations inmarket prices for comparable companies could cause the market price of our Shares to changesubstantially. Any such developments may result in large and sudden changes in the volume and priceat which our Shares will trade.

32

RISK FACTORS

The market price of our Shares may be volatile

The trading price of the Shares could be subject to significant volatility in response to, amongother factors:

(i) investor perceptions of our Group and our future plans;

(ii) variations in our Group’s operating results;

(iii) changes in pricing made by us or our competitors;

(iv) technological innovations;

(v) changes to senior management;

(vi) the depth and liquidity of the market for the Shares; and

(vii) general economic and other factors.

Any material changes in the above factors could cause the market price of the Shares to changesubstantially.

Purchasers of our Shares will experience immediate dilution and may experience further dilution ifwe issue additional Shares in the future

The Offer Price is higher than the net tangible asset value per Share. Therefore, subscribers ofthe Offer Shares in the Share Offer will experience an immediate dilution in the pro forma net tangibleasset value of HK32.7 cents per Share and HK37.7 cents per Share based on the Offer Price ofHK$1.00 per Share and HK$1.20 per Share, respectively.

We may need to raise additional funds in the future to finance expansion of or newdevelopments relating to our existing operations or new acquisitions. If additional funds are raisedthrough the issuance of new equity or equity-linked securities of our Company other than on a pro-ratabasis to the existing Shareholders, the percentage ownership of such Shareholders in our Companymay be reduced or such new securities may confer rights and privileges that take priority over thoseconferred by the Offer Shares.

Future sales by our existing Shareholders of a substantial number of our Shares in the publicmarket could materially and adversely affect the prevailing market price of our Shares

We cannot assure you that our Substantial Shareholders or Controlling Shareholders will notdispose of the Shares held by them. We cannot predict the effect, if any, that any future sales of Sharesby any Substantial Shareholders or Controlling Shareholders, or the availability of Shares for sale byany Substantial Shareholders or Controlling Shareholders may have on the market price of our Shares.Sales or issuance of substantial amounts of Shares by any Substantial Shareholders or ControllingShareholders, or the market perception that such sales or issuance may occur, could materially andadversely affect the prevailing market price of the Shares.

Impact of granting options under the Share Option Scheme

We have adopted the Share Option Scheme pursuant to which we will in the future grant to ouremployees and business partners options to subscribe for Shares. No options had been granted pursuantto the Share Option Scheme as at the Latest Practicable Date.

33

RISK FACTORS

The fair value of the options at the date on which they are granted with reference to the valuer’svaluation will be charged as share-based compensation, which may materially and adversely affect ourresults of operations. Issuance of Shares for the purpose of satisfying any award made under the ShareOption Scheme will also increase the number of Shares in issue after such issuance and thus may resultin the dilution to the percentage of ownership of our Shareholders and the net asset value per Share.

Details of the Share Option Scheme are set out in the section headed “Share Option Scheme” inAppendix V to this prospectus.

RISKS RELATING TO STATEMENTS MADE IN THIS PROSPECTUS

Certain facts and other statistics in this prospectus are derived from various official governmentsources and may not be reliable

Certain facts, forecasts and other statistics in this prospectus including those relating to HongKong, the Hong Kong economy and the insurance and insurance brokerage industry have been derivedfrom various official government publications. We believe that the sources of such facts, forecasts andother statistics are appropriate sources for such facts, forecasts and other statistics and have takenreasonable care in extracting and reproducing such facts, forecasts and other statistics. We have noreason to believe that such facts, forecasts and other statistics is false or misleading or that any fact hasbeen omitted that would render such facts, forecasts and other statistics false or misleading. The facts,forecasts and other statistics have not been independently verified by us, the Sponsor, the Joint LeadManagers, the Underwriters or any of their respective affiliates or advisers or any other party involvedin the Share Offer and no representation is given as to their accuracy and completeness.

Therefore our Company makes no representation as to the accuracy of such facts, forecasts andstatistics, which may not be consistent with other information compiled within or outside Hong Kong.Due to possibly flawed or ineffective collection methods or discrepancies between publishedinformation and market practice and other problems, the statistics from official governmentpublications referred to or contained in this prospectus may be inaccurate or may not be comparable tostatistics produced for other economies and should not be relied upon. Furthermore, there is noassurance that they are stated or compiled on the same basis or with the same degree of accuracy asmay be the case elsewhere.

In all cases, investors should give consideration as to how much weight or importance theyshould attach to, or place on, such facts, forecasts or statistics.

34

INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS

This prospectus for which our Directors collectively and individually accept full responsibilityincludes particulars given in compliance with the Companies Ordinance, the Securities and Futures(Stock Market Listing) Rules (subsidiary legislation V of the SFO) and the Listing Rules for thepurposes of giving information with regard to our Group. Our Directors, having made all reasonableenquiries, confirm that to the best of their knowledge and belief:

(i) the information contained in this prospectus is accurate and complete in all materialrespects and not misleading or deceptive; and

(ii) there are no other matters the omission of which would make any statement in thisprospectus or this prospectus misleading.

The Public Offer Shares are offered solely on the basis of the information contained and therepresentations made in this prospectus and the Application Forms. So far as the Share Offer isconcerned, no person is authorised to give any information or to make any representation not containedin this prospectus and any information or representation not contained herein must not be relied uponas having been authorised by us, the Sponsor, the Joint Lead Managers, the Underwriters, any of theirrespective directors (where applicable) or any other parties involved in the Share Offer.

UNDERWRITING

This prospectus is published solely in connection with the Public Offer, which forms part of theShare Offer. For applicants under the Public Offer, this prospectus and the related Application Formscontain the terms and conditions of the Public Offer. The Share Offer comprises the Placing and thePublic Offer and are subject to, in each case, re-allocation described in the section headed “Structureand conditions of the Share Offer” in this prospectus.

The Listing is sponsored by the Sponsor and the Share Offer is lead managed by the Joint LeadManagers. Subject to the terms of the Underwriting Agreement (including the determination of theOffer Price by agreement between our Company and the Joint Lead Managers (for themselves and onbehalf of the Underwriters) on or before Tuesday, 6 July 2010, being the expected Price DeterminationDate or such later time as may be agreed by our Company and the Joint Lead Managers (forthemselves and on behalf of the Underwriters)), the Public Offer Shares are fully underwritten by thePublic Offer Underwriters and the Placing Shares are fully underwritten by the Placing Underwriters.For more information about the Underwriters and the underwriting arrangements, please refer to theparagraph headed “Underwriting arrangements and expenses” in the section headed “Underwriting” inthis prospectus.

DETERMINATION OF THE OFFER PRICE

The Offer Price is expected to be determined by agreement among the Joint Lead Managers(for themselves and on behalf of the Underwriters) and our Company on the Price Determination Date.The Price Determination Date is expected to be on or before Tuesday, 6 July 2010 or such later date asmay be agreed by the Joint Lead Managers (for themselves and on behalf of the Underwriters) and us.If, for whatever reason, our Company and the Joint Lead Managers (for themselves and on behalf ofthe Underwriters) are not able to agree on the Offer Price, the Share Offer will not proceed and willlapse.

35

INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

SELLING RESTRICTIONS

No action has been taken to permit a public offering of the Offer Shares or the generaldistribution of this prospectus and/or the Application Forms in any jurisdiction other than Hong Kong.Accordingly, this prospectus may not be used for the purpose of, and does not constitute, an offer orinvitation in any jurisdiction or in any circumstances in which such an offer or invitation is notauthorised or to any person to whom it is unlawful to make such an offer or invitation.

Each person acquiring the Offer Shares will be required to confirm and is deemed by his/her/itsacquisition of the Offer Shares to have confirmed that he/she/it is aware of the restrictions on offers ofthe Offer Shares described in this prospectus and that he is not acquiring, and has not been offered anyOffer Shares in circumstances that contravene any such restrictions.

Prospective applicants for the Offer Shares should consult their financial advisers and take legaladvice, as appropriate, to inform themselves of, and to observe, all applicable laws and regulations ofany relevant jurisdiction. Prospective applicants for the Offer Shares should inform themselves as tothe relevant legal requirements of applying for the Offer Shares and any applicable exchange controlregulations and applicable taxes in the countries of their respective citizenship, residence or domicile.

APPLICATION FOR LISTING ON THE STOCK EXCHANGE

Application has been made to the Listing Committee of the Stock Exchange for the listing of,and permission to deal in, our Shares in issue and to be issued pursuant to the Share Offer and asotherwise described in this prospectus on the Stock Exchange (including any Share to be issuedpursuant to the exercise of any option that may be granted under the Share Option Scheme).

No part of our Company’s share or loan capital is listed, traded or dealt in on any other stockexchange. At present, our Company is not seeking or proposing to seek listing of, or permission to dealin, our Company’s shares or loan capital on any other stock exchange.

PROFESSIONAL TAX ADVICE RECOMMENDED

Applicants for the Offer Shares are recommended to consult their professional advisers if theyare in any doubt as to the taxation implications of holding and dealing in our Shares. It is emphasisedthat none of our Company, the Joint Lead Managers, the Underwriters, the Sponsor, any of theirrespective directors, supervisors, agents or advisors or any other person involved in the Share Offeraccepts responsibility for any tax effects or liabilities of holders of our Shares resulting from thesubscription, purchase, holding or disposal of our Shares.

REGISTRATION AND STAMP DUTY

All Shares in issue must be registered in our Company’s branch register of members to bemaintained in Hong Kong by our branch share registrar and transfer office, Tricor Investor ServicesLimited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

Our Company’s principal register of members will be maintained by our principal shareregistrar and transfer office, Butterfield Fulcrum Group (Cayman) Limited at Butterfield House,68 Fort Street, P.O. Box 609, Grand Cayman KY1-1107, Cayman Islands.

36

INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

Only Shares registered in our Company’s Hong Kong branch register of members may betraded on the Stock Exchange. Dealings in Shares registered on the register of members kept by ourCompany’s Hong Kong branch share registrar and transfer office will be subject to Hong Kong stampduty.

Shares registered in our Company’s Hong Kong branch register of members constitute HongKong property.

Unless determined otherwise by our Company, dividends payable in HK dollars in respect ofour Shares will be paid to the Shareholders listed on our Company’s Hong Kong branch register ofmembers to be maintained in Hong Kong, by ordinary post, at the Shareholders’ risk, to the registeredaddress of each Shareholder or if joint Shareholders, to the first-named therein in accordance with theArticles of Association.

PROCEDURES FOR APPLICATION FOR THE PUBLIC OFFER SHARES

The procedures for applying for the Public Offer Shares are set out in the section headed “Howto apply for the Public Offer Shares” in this prospectus and in the relevant Applications Forms.

STRUCTURE OF THE SHARE OFFER

Details of the structure of the Share Offer, including its conditions, are set out in the sectionheaded “Structure and conditions of the Share Offer” in this prospectus.

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Subject to the granting of listing of, and permission to deal in, our Shares on the StockExchange and our Company’s compliance with the stock admission requirements of HKSCC, ourShares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement inCCASS with effect from the date of commencement of dealings in our Shares on the Stock Exchangeor any other date as HKSCC chooses. Settlement of transactions between participants of the StockExchange is required to take place in CCASS on the second Business Day after any trading day. Allactivities under CCASS are subject to the General Rules of CCASS and CCASS OperationalProcedures in effect from time to time. All necessary arrangements have been made for the Shares tobe admitted into CCASS.

DEALINGS AND SETTLEMENT

Dealings in the Shares on the Stock Exchange are expected to commence at 9:30 a.m. onTuesday, 13 July 2010. Shares will be traded in board lots of 2,000 Shares each.

The Stock Exchange stock code for the Shares is 1019. Dealings in the Shares on the StockExchange will be effected by participants of the Stock Exchange whose bid and offer quotations willbe available on the Stock Exchange’s teletext page information system. Delivery and payment forShares dealt on the Stock Exchange will be effected two trading days following the transaction date.Settlement of transactions between participants of the Stock Exchange is required to take place inCCASS on the second Business Day after any trading day. Only certificates for Shares registered onthe branch register of members of our Company will be valid for delivery in respect of transactionseffected on the Stock Exchange. If you are unsure about the procedures for dealings and settlementarrangement on the Stock Exchange on which the Shares are listed and how such arrangements willaffect your rights and interests, you should consult your stockbroker or other professional advisors.

37

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

DIRECTORS

Name Address Nationality

Executive Directors

Mr. Wong Lee Man Flat B1, 6th FloorBeverley Heights67 Beacon Hill RoadKowloon TongKowloonHong Kong

Chinese

Ms. Fong Sut Sam 138A Sai KengSai KungNew TerritoriesHong Kong

Portuguese

Mr. Mak Kwong Yiu Flat G, 41st FloorBlock 1, Bel Air Heights1 Lung Poon StreetDiamond HillKowloonHong Kong

Chinese

Independent non-executive Directors

Mrs. Fu Kwong Wing Ting,Francine

House 26CMan Uk Pin VillageShataukok RoadFanlingNew TerritoriesHong Kong

British

Dr. Wu Ka Chee, Davy Suite 1-3719Harbourview Horizon All-Suite Hotel12 Hung Lok RoadHung Hom BayKowloonHong Kong

Chinese

Mr. Ma Yiu Ho, Peter Flat C, 8th FloorTower 3, Sausalito1 Yuk Tai StreetMa On ShanNew TerritoriesHong Kong

Chinese

38

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

PARTIES INVOLVED IN THE SHARE OFFER

Sponsor Quam Capital LimitedRoom 3208Gloucester TowerThe Landmark11 Pedder StreetCentralHong Kong

Joint Lead Managers Quam Securities Company LimitedRoom 3208Gloucester TowerThe Landmark11 Pedder StreetCentralHong Kong

Convoy Investment Services Limited17/FCitiplaza ThreeTaikoo ShingIsland EastHong Kong

Bookrunner Quam Securities Company LimitedRoom 3208Gloucester TowerThe Landmark11 Pedder StreetCentralHong Kong

Public Offer Underwriters Quam Securities Company LimitedRoom 3208Gloucester TowerThe Landmark11 Pedder StreetCentralHong Kong

Convoy Investment Services Limited17/FCitiplaza ThreeTaikoo ShingIsland EastHong Kong

39

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

Celestial Securities Limited7/F, Low BlockGrand Millennium Plaza181 Queen’s Road CentralHong Kong

China Merchants Securities (HK) Co., Limited48/FOne Exchange SquareCentralHong Kong

UOB Kay Hian (Hong Kong) LimitedSuite 601Aon China Building29 Queen’s Road CentralHong Kong

Placing Underwriters Quam Securities Company LimitedRoom 3208Gloucester TowerThe Landmark11 Pedder StreetCentralHong Kong

Convoy Investment Services Limited17/FCitiplaza ThreeTaikoo ShingIsland EastHong Kong

Celestial Securities Limited7/F, Low BlockGrand Millennium Plaza181 Queen’s Road CentralHong Kong

China Merchants Securities (HK) Co., Limited48/FOne Exchange SquareCentralHong Kong

UOB Kay Hian (Hong Kong) LimitedSuite 601Aon China Building29 Queen’s Road CentralHong Kong

40

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

Legal advisers to our Company As to Hong Kong lawTsun & PartnersSuites 1002-3, 10th FloorAon China Building29 Queen’s Road CentralHong Kong

As to Cayman Islands lawConyers Dill & PearmanCricket SquareHutchins DriveP.O. Box 2681Grand CaymanKY1-1111Cayman Islands

Legal advisers to the Sponsor and theUnderwriters

As to Hong Kong lawK&L Gates44th FloorEdinburgh TowerThe Landmark15 Queen’s Road CentralHong Kong

Auditors and reporting accountants Ernst & YoungCertified Public Accountants18th FloorTwo International Finance Centre8 Finance StreetCentralHong Kong

Property valuer Grant Sherman Appraisal LimitedRoom 1701, 17th FloorJubilee Centre18 Fenwick StreetWanchaiHong Kong

Receiving banker of the Public Offer The Bank of East Asia, Limited10 Des Voeux RoadCentralHong Kong

41

CORPORATE INFORMATION

Registered office Cricket SquareHutchins DriveP.O. Box 2681Grand CaymanKY1-1111Cayman Islands

Headquarters and principal place ofbusiness

34th FloorOne Island East18 Westlands RoadIsland EastHong Kong

Our Company’s website address www.convoy.com.hk(information on the website does not form part of thisprospectus)

Members of audit committee Mr. Ma Yiu Ho, Peter (Chairman of the auditcommittee)Mrs. Fu Kwong Wing Ting, FrancineDr. Wu Ka Chee, Davy

Members of remuneration committee Mrs. Fu Kwong Wing Ting, Francine (Chairman of theremuneration committee)Dr. Wu Ka Chee, DavyMr. Wong Lee Man

Members of nomination committee Mrs. Fu Kwong Wing Ting, Francine (Chairman of thenomination committee)Dr. Wu Ka Chee, DavyMs. Fong Sut Sam

Members of compliance committee Dr. Wu Ka Chee, Davy (Chairman of the compliancecommittee)Mrs. Fu Kwong Wing Ting, FrancineMs. Fong Sut SamMr. Mak Kwong Yiu

Compliance officer Mr. Wang Pui Wang

Company secretary Mr. Chow Kim Hang

42

CORPORATE INFORMATION

Authorised representatives Mr. Mak Kwong YiuFlat G, 41st Floor

Block 1, Bel Air Heights1 Lung Poon StreetDiamond HillKowloonHong Kong

Mr. Chow Kim HangFlat E, 6/FTower 29, Parc OasisKowloon TongKowloonHong Kong

Principal share registrar and transferoffice

Butterfield Fulcrum Group (Cayman) LimitedButterfield House68 Fort StreetP.O. Box 609Grand CaymanKY1-1107Cayman Islands

Hong Kong branch share registrar andtransfer office

Tricor Investor Services Limited26th FloorTesbury Centre28 Queen’s Road EastWanchaiHong Kong

Compliance adviser Quam Capital LimitedRoom 3208Gloucester TowerThe Landmark11 Pedder StreetCentralHong Kong

Principal banker Standard Chartered Bank (Hong Kong) Limited13/F, Standard Chartered Bank Building4-4A Des Voeux RoadCentralHong Kong

43

INDUSTRY OVERVIEW

This section contains information and statistics relating to the industry in which weoperate. We have derived such information and data partly from publicly available governmentofficial sources which have not been independently verified by us, the Sponsor, the Joint LeadManagers, the Underwriters or any of their respective affiliates or advisers. Our Directors havetaken reasonable care in the reproduction of such information. We make no representation as tothe correctness or accuracy of such information and accordingly such information should not beunduly relied on. We have taken such care as we consider reasonable in the reproduction andextraction of such information.

INSURANCE INDUSTRY IN HONG KONG

The insurance industry is one of the key financial services in Hong Kong. According to a pressrelease published by the OCI dated 15 March 2010 and the website of the Census and StatisticsDepartment of Hong Kong, the total general and long term insurance premiums was HK$185.7 billionin 2009, representing approximately 11.4% of the GDP of Hong Kong.

The insurance industry consists of two sectors, namely long term insurance and generalinsurance. In 2009, the long term insurance sector accounted for about 84.6% of the total premiumincome, while the general insurance sector took up the remaining 15.4%.

The following chart illustrates the trends of (i) long term insurance office premiums; (ii)general insurance gross premiums; and (iii) general and long term insurance premiums as a percentageof GDP, between 1998 and 2009:

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20092008

180,000

HK

$ m

illio

n

13

%

12

11

10

9

8

7

6

5

4

3

2

1

0

170,000160,000150,000140,000130,000120,000110,000100,000

90,00080,00070,00060,00050,00040,00030,00020,00010,000

0

Long term insurance office premiums

General insurance gross premiums

General and long term insurance premiums as a percentage of GDP

Source: Hong Kong Insurance Business Statistics and annual and quarterly reports published by the OCI

44

INDUSTRY OVERVIEW

The above diagram demonstrates that general and long term insurance premiums as apercentage of GDP had grown gradually between 1998 and 2007 and was more than doubled in 2007as compared to 1998. In 2008, such percentage fell to approximately 11.3% from 12.2% in 2007 andthen rebounded slightly to 11.4% in 2009. While general insurance gross premiums had fluctuatedmoderately between 1998 and 2009, and save for 2008 and 2009, long term insurance office premiumshad generally been growing at an increasing rate during the same period.

Within the long term insurance business, there are basically four main sub-sectors, namelyindividual life business, group life business, retirement scheme and other business. Other businessincludes annuity, permanent health and capital redemption business. Individual life business wasattributable to 94.2% and 82.0% of the long term insurance business in terms of number of policies andoffice premiums respectively in 2009 as stated in a press release published by the OCI dated 15 March2010.

Individual life business consists of investment-linked business and non-investment-linkedbusiness, which accounted for approximately 29.2% and 70.8% of the total office premiums of individuallife in-force business in 2009 respectively, as stated in the Hong Kong Insurance Business Statistics 2009published by the OCI. ILAS is classified as one of the investment-linked businesses. For the four yearsended 31 December 2006, 2007, 2008 and 2009, the annual growth rates in terms of office premiums forinvestment-linked business were 42.7%, 73.7% and -22.8% and 15.7% respectively, as compared with5.0%, 7.4%, 9.2% and 10.7% for non-investment-linked business during the corresponding years inrespect of individual life in-force business.

Insurance products are developed by authorised insurers, which are authorised by the OCIunder the ICO. As at 31 December 2009, there are a total of 1,710 authorised insurers in Hong Kong.The following table set out the number of authorised insurers conducting business in Hong Kong as at31 December 2007, 2008 and 2009:

Authorised insurers as at 31 December 2007, 2008 and 2009

As at 31 December

2007 2008 2009

Long term insurance business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 231 231— Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 86 86— Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 145 145

General insurance business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,542 1,533 1,479— Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 909 911 900— Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633 622 579

Source: Website of the OCI (www.oci.gov.hk)

45

INDUSTRY OVERVIEW

As illustrated in the table above, the number of authorised insurers in the long term insurancebusiness had remained stable between 2007 and 2009 for both local and overseas insurers. The generalinsurance business had experienced gradual decline in the number of authorised insurers between 2007and 2009, which was mainly attributable to the falling number of overseas insurers during the saidperiod.

Insurance products developed by the authorised insurers can be marketed directly by itsmarketing arm or through insurance intermediaries such as insurance agents and brokers. An insuranceagent represents a person who holds himself out to advise on or arrange contracts of insurance in orfrom Hong Kong as an agent or sub-agent of one or more authorised insurers. An appointed insuranceagent shall not represent more than four insurers, of whom no more than two shall be long termbusiness insurers. As such, an insurance agent can only arrange contracts of insurance developed bylimited number of authorised insurers.

An insurance broker represents a person who carries on the business of negotiating or arrangingcontracts of insurance in or from Hong Kong as the agent of the policyholder or potential policyholderor advising on matters related to insurance. An insurance broker provides advice to the insuring publicand helps them analyse their insurance needs and chooses the suitable insurance products. Therefore,an insurance broker can arrange a variety of contracts of insurance.

The primary difference between insurance agents and insurance brokers is that insurance agentsrepresent Product Issuers to promote their insurance products to the customers, whereas insurancebrokers represent customers and provide them with advise on insurance products offered by one ormore Product Issuers.

Under the current operation of our Group and the Consultants, we negotiate and arrange avariety of contracts of insurance and MPF schemes in Hong Kong as the agent of the policyholders andpotential policyholders, and advise on matters related to insurance, and accordingly none of our Groupand the Consultants is the appointed insurance agent of the authorised insurers.

In respect of insurance brokers, they have been brought under the regulation of their ownprofessional bodies which are approved by the IA. A person can be authorised as an insurance broker ifhe is a fit and proper person and satisfies certain minimum requirements including (i) requirement oncapital and net assets; (ii) requirement on qualifications and experience; (iii) requirement forprofessional indemnity insurance; (iv) requirement to keep separate customer accounts; and(v) requirement to keep other proper books and records. The insurance broker can be either authorisedby the IA or registered with any one of the two approved bodies of insurance brokers, namely PIBAand HKCIB.

46

INDUSTRY OVERVIEW

Number of authorised insurance brokers, their chief executives and consultants as at 30 April2010

The following table sets out the number of authorised insurance brokers, their chief executivesand consultants in Hong Kong as at 30 April 2010:

Type of insurance business

Number of insurancebrokers by virtue of

their membership with

Numbers ofchief

executivesand

consultantsHKCIB PIBA

General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 25 175Long term (excluding linked long term) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 3

(including linked long term) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 25 440Both general and

long term (excluding linked long term) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 63 892(including linked long term)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 191 6,186

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 306 7,696

Source: Websites of HKCIB (www.hkcib.org) and PIBA (www.piba.org.hk)Note:(1) Our Group belongs to this category.

Competitive advantages of an independent insurance broker

(i) Independence

Being an independent insurance broker, he/she should act independently for the customers’ bestinterest and try to avoid conflicts of interest. Disconnection from authorised insurers may help anindependent insurance broker to advise his/her customers objectively and to assist the customers inselecting suitable products to achieve their financial needs.

(ii) Professionalism

An independent insurance broker may hold various licences with different regulatory bodies inHong Kong. An independent insurance broker is required to be registered as an insurance broker withthe IA or other self-regulatory bodies approved by the IA to give advice to policyholders or potentialpolicyholders on any class of insurance products. In addition, an independent broker may register as aMPF intermediary with the MPFA to give advice on MPF schemes. These licences to certain extentprovide an evidence of professionalism in the areas where an independent insurance broker offers his/her service. Furthermore, an independent broker is required to fulfill the annual continuous andprofessional training requirements to maintain his/her professional competence.

(iii) Tailor-made service

Customers’ financial needs are different and may be difficult for a standardised solution onproduct to satisfy all customers. As such, an independent insurance broker can access differentauthorised insurers for different products to fulfill customers’ needs with a customised solution whichtakes into consideration their risk and return requirements.

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INDUSTRY OVERVIEW

(iv) Variety of products

In order to satisfy a customer’s specific needs, an independent insurance broker shouldrecommend and explain various alternatives to his/her customer after analysing a variety of plans andproducts. Our Directors consider that the independent insurance broker is able to act with a high levelof independence as a result of his/her ability to access various authorised insurers which provide awide range of products for the customers. Intuitively, customers’ needs may better be served as a resultof the much wider variety of products available.

GENERAL OVERVIEW OF ILAS BUSINESS IN HONG KONG

Development of ILAS in Hong Kong

Life insurance started some 400 years ago. It was created to satisfy the need for financialsecurity. Over the years, existing insurance products were enhanced and new insurance products weredeveloped to satisfy the market’s evolving requirements.

ILAS is derived from traditional life insurance policy, and its value is generally linked to theperformance of its underlying investments. Generally, ILAS is issued by offshore financial institutions,usually insurance companies, for individuals’ tax and investment purposes.

ILAS gained popularity over the past few years because of the increasing demand of Hong Kongcustomers for higher returns on the insurance policies and the increasing familiarity of Hong Kongcustomers to investment funds especially with the introduction of the MPF scheme in 2000. However, inorder to protect policyholders or potential policyholders from assertive selling of life insuranceintermediaries, the Life Insurance Council under the Hong Kong Federation of Insurers launched ascheme which allows a policyholder or potential policyholder to withdraw the policy unconditionallywithin a cooling-off period, subject to a market value adjustment, with effect from July 1996. Cooling-offperiod means a time period which provides policyholders with the time to understand carefully all theinformation given in relation to a policy and a policyholder may serve a written notice to cancel thepolicy for a refund of the paid premium less any market value adjustment. With effect from 1 February2010, cooling-off period is 21 days after the delivery of the policy or issue of a “Notice” to thepolicyholder or the policyholder’s representative, whichever is earlier. (Note: the Notice should informthe policyholder of the availability of the policy and the expiry date of the cooling-off period. The Noticeshould remind the policyholder that he/she has the right to re-think his/her decision to purchase the lifeinsurance product and to obtain a refund of premium paid if the policy is cancelled within the cooling-offperiod. The Notice should also remind the policyholder to contact the customer service department of theinsurer directly (service hotline number should be provided) if he/she does not receive the policy contractwithin 9 days from the issue date of the Notice.) In practice, customers can choose to cancel a policywithin the cooling off period by serving the notice directly to the relevant insurance company or throughtheir insurance brokers. No revenue will be recognised by our Group if any customer withdraws his/herpolicy within the cooling-off period. Therefore, cooling-off applications will have no impact on ourGroup’s revenue. Given the lack of impact of withdrawal on our revenue, our Group does not gather anystatistics regarding withdrawal within the cooling-off period.

In Hong Kong, advertisements, invitations or other documents which contain an invitation tothe public to acquire an interest in or participate in, or offer to acquire an interest in or participate inILAS require SFC’s approval before they can be marketed or sold to the public in Hong Kong. Issuersof ILAS and intermediaries who sell ILAS are regulated by the IA or other self-regulatory bodiesapproved by the IA (such as PIBA and HKCIB) but are not required to be licensed by the SFC.

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INDUSTRY OVERVIEW

Types of ILAS

In general, ILAS can be categorised as either regular-savings or lump-sum savings, which aredifferentiated by its premium structure. Regular-savings ILAS are financed by regular premiumcontribution, the amount of which can be varied according to the customers’ needs. The contributionsmade by the customers would be invested in a wide range of investment funds which are managed byeither the insurance companies or other fund managers. The underlying portfolio of ILAS isconstructed, and can be adjusted, according to the specific needs and investment strategies of thecustomers. For Lump-sum ILAS, the terms and conditions are similar to Regular-savings ILAS, exceptfor the one-off contribution payment which is made by a whole lump-sum at the effective date of theLump-sum ILAS.

Independent insurance broker carrying on business in ILAS industry

The carrying on of insurance business (including the sale of ILAS) and insuranceintermediaries are regulated by the ICO. An independent insurance broker who carries on business inILAS industry is required to be either authorised by the IA or become a member of one of the twoapproved broker bodies, namely HKCIB and PIBA. Being an authorised insurance broker, theindependent insurance broker can liaise with authorised insurers in Hong Kong for adding theirproducts in its alternative portfolio. The independent insurance broker could then select suitableproducts from such portfolio which are considered to be in the customers’ best interests and inaccordance with the customers’ specific needs. The independent insurance broker is rewarded byreceiving commission income from the authorised insurers for sale of their products. Our Directorsbelieve that the independence of the independent insurance broker may be further enhanced when itestablishes more relationships with other authorised insurers.

Moreover, pursuant to the SFC Circular, as a general rule, the SFC considers that insuranceintermediaries who are promoting, offering or selling ILAS to the public (including giving advice topolicyholders concerning their selection of the underlying funds) are neither obliged nor permitted tobe licensed under the SFO. As a result, an insurance broker may arrange with his/her customers topurchase authorised ILAS without the need for registration as an investment adviser or an investmentrepresentative under the SFO. However, the advertisements, invitations or other documents whichcontain an invitation to the public to acquire an interest in or participate in, or offer to acquire aninterest in or participate in ILAS require SFC’s approval.

Popularity of ILAS in Hong Kong

Over the past decade, people have become more concerned about the maintenance of quality ofliving after retirement. The demand for ILAS has been increasing steadily since the Asian financialcrisis in 1997. According to statistics extracted from the Hong Kong Insurance Business Statistics for1998 and 2008 published by the OCI, notwithstanding the effects of the global financial crisis whichbrought the office premiums down by 41% in 2008 as shown in the table below, the office premiumsof new ILAS business grew from approximately HK$2.3 billion in 1998 to approximately HK$35.7billion in 2008, representing a CAGR of 31.8%.

Between 2004 and 2008, the office premiums of new ILAS business grew at a CAGR of 34.6%from approximately HK$18.2 billion in 2004 to approximately HK$35.7 billion in 2008. The office

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INDUSTRY OVERVIEW

premiums of the Lump-sum ILAS and Regular-savings ILAS in 2004 were approximately HK$14.5billion and HK$3.7 billion, and were HK$26.6 billion and HK$9.1 billion respectively in 2008. TheCAGRs in office premiums for Lump-sum ILAS and Regular-savings ILAS were 35.4% and 32.5%respectively during the period from 2004 to 2008. The following table sets out the trend of officepremiums of the Lump-sum ILAS and the Regular-savings ILAS in Hong Kong from 2004 to 2008:

Statistics of new ILAS business in Hong Kong from 2004 to 2008

Unit: HK$ million 2004 2005 2006 2007 2008 CAGR

Lump-sum ILAS 14,458.2 17,000.9 25,306.7 49,057.9 26,550.6 35.4%

Annual growth rate . . . . . . . . . . . . . . . . . . . not applicable 18% 49% 94% (46%)

Regular-savings ILAS 3,695.9 4,470.5 6,637.7 11,215.0 9,124.3 32.5%

Annual growth rate . . . . . . . . . . . . . . . . . . . not applicable 21% 48% 69% (19%)

Total 18,154.1 21,471.4 31,944.4 60,272.9 35,674.9 34.6%

Annual growth rate . . . . . . . . . . . . . . . . . . . not applicable 18% 49% 89% (41%)

Source: Hong Kong Insurance Business Statistics 2004-2008 published by the OCI (www.oci.gov.hk)

To the best knowledge of our Directors, it is estimated that the new ILAS business arranged byour Group on behalf of the Product Issuers accounted for approximately 7% of total new ILASbusiness in Hong Kong market in 2009 in terms of office premiums calculated from statistics publishedby OCI. Our Directors believe that ILAS has been gaining popularity in Hong Kong and is likely to beone of the fastest proliferating investment products in Hong Kong for the coming years.

The following are some of the factors that contribute to the continuous development of ILAS inHong Kong. ILAS is considered as a top-up of MPF, which gives extra protection to the retirees. Thesefactors are:

(i) the launch of MPF coupled with massive promotion and education activities from thegovernment to foster the awareness of financial planning;

(ii) possible failure of MPF to meet the retirement needs as explained under the paragraphheaded “MPF business” below; and

(iii) ILAS is more flexible than MPF, in terms of fund choices, time horizons and amount ofinvestments.

MPF BUSINESS

Development of MPF in Hong Kong

Before the implementation of the MPF system, only around one-third of the Hong Kongworkforce had some form of retirement protection which included statutory pensions and providentfunds for civil servants and school teachers, and retirement schemes set up by employers voluntarilyfor their employees. With the expectations of a rapidly ageing population in Hong Kong which theproportion of the population over the age of 65 rising from approximately 12% in 2004 to an expected27% by 2033, the need for a more adequate means of retirement protection was imminent. The MPFsystem was launched in Hong Kong in December 2000 and has become part of the lives of most HongKong residents.

According to the Census and Statistics Department and returns submitted by the trustees to theMPFA, more than 80% of each of employers, relevant employees and self employed persons in

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INDUSTRY OVERVIEW

Hong Kong has enrolled in MPF schemes by the first quarter of 2001. The enrollment rate ofemployers and relevant employees have gradually risen to close to 100% and remained so up to thefirst quarter of 2009, whereas the enrollment rate of self-employed persons fluctuated gently below80% in 2009. The trend of the enrollment in MPF schemes is set out in the chart below:

Enrolment in MPF schemes

0%

20%

40%

60%

80%

100%

3/2000 3/2001 3/2002 3/2003 3/2004 3/2005 3/2006 3/2007 3/2008 3/2009

Enr

olm

ent r

ate

Employer

Relevant employee

Self - employed persons

Source : Website of MPFA (www.mpfa.org.hk)

Pursuant to the Mandatory Provident Fund Schemes (Amendment) Ordinance 2009 gazetted on17 July 2009, it is proposed that employees will be allowed to transfer accrued benefits derived fromtheir employees’ mandatory contributions during their current employment from a contribution accountunder a registered scheme on a lump-sum basis to another MPF scheme of their own choice at leastonce per calendar year. We believe that when the new transfer policy comes into effect (which isexpected to be in or around 2011), a substantial percentage of MPF benefits will become portableduring trustees and thereby provides an opportunity for us to expand our presence in the MPF business.

The MPF market and product types

As extracted from the Mandatory Provident Fund Schemes Statistical Digest issued inDecember 2009 by the MPFA, the regulatory body of MPF, there were approximately 2.5 millionparticipating members of the MPF schemes as at 31 December 2009 and the total contributionsreceived in 2009 amounted to approximately HK$43,850 million. The total net asset value of approvedconstituent funds of MPF schemes increased to approximately HK$308,870 million as at 31 December2009 from approximately HK$202,407 million as at 31 December 2006, representing a CAGR growthof approximately 15.1%.

According to a Report on General Household Survey published by the Census and StatisticsDepartment of Hong Kong for the third quarter of 2009, up to 71% of the employed population ofHong Kong is covered under the MPF schemes and 16% are covered under other retirement schemes,such as Civil Service Pension Scheme, and MPF exempted Occupational Retirement SchemesOrdinance schemes. Whereas domestic employees and employees who are aged above 65 or below 18

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INDUSTRY OVERVIEW

are not required to join any local retirement scheme according to Hong Kong law. Only 2% of theemployed population in Hong Kong is required to join MPF schemes but have not done so.

As at 31 January 2010, according to the MPFA website (www.mpfa.org.hk), 38 MPF schemesin the market which provided an aggregate of 365 constituent funds which comprised 6 fund types,namely, mixed assets fund, equity fund, MPF conservative fund, guaranteed fund, bond fund andmoney market fund and others.

Independent insurance broker carrying on business in the MPF industry

As at 31 December 2009, there were 27,350 registered MPF intermediaries, comprising 469corporate intermediaries and 26,881 individual intermediaries, of which 20,662 individualintermediaries were permitted to advise on insurance policies or both insurance policies and securities.Approximately 68%, 30% and 2% of MPF individual intermediaries were from the insurance, bankingand securities industries respectively.

The regulatory requirements in relation to the sale of MPF as an MPF intermediary aresummarised in the section headed “Regulatory framework” in this prospectus. As an individual MPFbroker registered with the MPFA, the carrying on of business of MPF is similar to that of anindependent insurance broker in the ILAS industry. The individual MPF broker can liaise with MPFproviders authorised by the MPFA for adding their products in their alternative portfolio and thenselect suitable products from such portfolio according to the customers’ best interests and specificneeds. The MPF broker is rewarded by receiving commission income from the authorised MPFproviders for sale of their products.

Imperfection of MPF

Being launched in December 2000, the Hong Kong government and MPF participants, such asbanks, insurance companies, trustees and investment companies, have been promoting MPF to thegeneral public. With a few exceptions, MPF covers all the employees in Hong Kong who are betweenthe ages of 18 and 65. It is similar in nature to ILAS with an aim to give the retiree reasonable financialprotection after retirement. However, as illustrated in the following hypothetical example, MPF may bedeficient in terms of flexibility and coverage. Our Directors believe that in particular, MPF may beinsufficient to maintain the retirees’ living standards at current costs of living on retirement, as shownin the following hypothetical examples:

Assumptions:

(i) Employee annual contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$12,000

(ii) Employer annual contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$12,000

(iii) Estimated average inflation rate over 10 years . . . . . . . . . . . . . . . . . . 3% per annum

(iv) Expected nominal annual rate of return on investment . . . . . . . . . . . . 5% per annum

(v) Retirement age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At the beginning of age 60

(vi) Death age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At the end of age 80

(vii) Estimated annual amount required to maintainthe existing level of living standards at current costs . . . . . . . . . . . . . HK$120,000

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INDUSTRY OVERVIEW

Employees Case 1 Case 2 Case 3 Case 4

Current age as at 31 December 2009 . . . . . . . . . . . . . . . . . . . . . 25 30 35 40Year of retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2044 2039 2034 2029Nominal amount on retirement received from MPF (HK$) . . . . 2,167,687 1,594,532 1,145,450 793,583Estimated aggregated nominal amount on retirement required

to maintain the existing level of living standard for post-retirement living (HK$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,973,492 8,603,222 7,421,215 6,401,605

No. of years supported by MPF amount after retirement . . . . . . 6.6 5.6 4.6 3.6No. of years supported by non-MPF amount after retirement . . 13.4 14.4 15.4 16.4

The estimated aggregated nominal amount on retirement required to maintain the existing levelof living standard for post-retirement living represents the estimated amount required to support theindividual’s basic living standard after retirement and is calculated as follows:

[n=21

](1+3%)(60-current age) ∑ (120,000)(1+3%)i

i=1

Furthermore, as shown in the above formula, the estimated amount is negatively correlated withthe current age of the individual. Therefore, the younger the individual is, the larger the inflationmultiples and the larger the estimated amount.

Assuming the employee’s current costs of living is HK$10,000 per month, the amount receivedfrom MPF, as illustrated above, would support the retiree for as long as 6.6 years after retirement. Forthose above the age of 25, the number of years supported by MPF amount after retirement would beshorter. That means the shortage increases. Also, it should be reminded that the aggregate amountrequired to maintain the costs of living as illustrated above excludes medical costs and expenses.

However, the life expectancy in Hong Kong has increased from 78.0 for male and 83.9 forfemale in 2000 to 79.8 and 86.1 respectively in 2009, which is likely to be prolonged with, amongothers, the advancement in technologies and medicines. Thus, our Director believe that ILAS may becomplimentary to MPF as it is able to cover the financial shortfalls arising from the MPF’s inadequacyto cover his expected costs of living after retirement.

The above hypothetical examples have been prepared for illustrative purposes only. As thehypothetical examples are based on a number of subjective assumptions and are hypothetical in nature,it may not give a true picture of the results of the MPF scheme and the amount on retirement requiredto maintain the existing living standard for post-retirement living. Results of the MPF schemes and theamount on retirement required to maintain the existing living standard for post-retirement living maybe different from these hypothetical examples under different assumptions and conditions.

GENERAL AND CONVENTIONAL INSURANCE BUSINESS

The general insurance market in Hong Kong is one of the more developed markets in Asia, asat 28 February 2010 there were 900 local and 579 overseas authorised insurers in Hong Kong.Accident and health, motor vehicle, property damage, general liability and pecuniary loss are the majortypes of insurance policies covered under the general insurance business. Gross premium of the generalinsurance business had fluctuated moderately over the past decade but had shown moderate growthbetween 2006 and 2009 within a range from 2.9% to 12.5% year-on-year.

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INDUSTRY OVERVIEW

The conventional insurance business conducted by our Group includes, among others, non-investment-linked long term life insurance and term life insurance. Conventional insurance productsgenerally involve a fixed amount of lump-sum payment on death or at maturity which does not involveany underlying investment option. The office premiums for non-investment-linked long term life in-force insurance business has been growing for every year between 2006 and 2009 ranging from 5.0%to 11.3% year-on-year.

Authorised insurers and banks in Hong Kong have established distribution networks for generaland conventional insurance markets in Hong Kong which inevitably led to greater competition forintermediaries in this market. Despite the intense competition, our Directors are of the view thatpotential expansion opportunities remain in the general and conventional insurance markets given therecent moderate growth trends.

54

REGULATORY FRAMEWORK

Our Group, through CFS, principally carries on our business in the capacity as an insurancebroker in Hong Kong, which is regulated under a self-regulatory system.

The self-regulatory system for insurance intermediaries, i.e., insurance agents and brokers, issupported by legislation which is contained in Part X of the ICO. The regulations for insuranceintermediaries have been in operation since 30 June 1995. They define the distinct roles of insurancebrokers and require them to be appointed or authorised respectively in accordance with the relevantprovisions of the ICO.

Under section 65 of the ICO, a person is prohibited from holding himself out as an insurancebroker unless he is properly appointed or authorised. A person is also prohibited from holding himselfout as an appointed insurance agent and an authorised insurance broker at the same time. It is anoffence under the ICO for an insurer to effect a contract of insurance through, or accept insurancebusiness referred to it by, an insurance intermediary who has not been properly appointed orauthorised.

A person intending to act as an insurance broker shall either seek authorisation from the IA orapply to become a member of a body of insurance brokers approved by the IA. An insurance brokerwho is directly authorised by the IA or is a member of an approved body of insurance brokers issubject to the same statutory requirements. The appointment of any person as a consultant by aninsurance broker is subject to the confirmation and registration of the IA or the relevant approved bodyof insurance brokers (as the case may be). As specified by the IA, an insurance broker shall obtain theconfirmation of the IA or the relevant approved body of insurance brokers (as the case may be) beforeconfirming the appointment of any person as its consultant to act for it or on its behalf for providingadvice to a policyholder or potential policyholder on insurance matters, or negotiating or arrangingcontracts of insurance in or from Hong Kong for a policyholder or potential policyholder.

For an insurance broker who is a member of an approved body of insurance brokers, he is alsosubject to the membership regulation of his own professional body which is approved by the IA.

In order to be authorised as an insurance broker or be admitted as a member of an approvedbody of insurance brokers, a person, apart from being fit and proper to be an insurance broker, has tosatisfy the minimum requirements specified by the IA with regard to:

(i) qualifications and experience;

(ii) capital and net assets;

(iii) professional indemnity insurance;

(iv) keeping of separate customer accounts; and

(v) keeping of proper books and accounts.

Under the minimum requirements for insurance brokers specified by the IA, in consideringwhether the appointment of consultant by an insurance broker can be confirmed and registered by theIA or the relevant approved body of insurance brokers (as the case may be), the following factors shall,inter alia, be taken into account:

(i) whether the consultant is fit and proper to act as an insurance broker if he/she were toapply to be authorised as such;

55

REGULATORY FRAMEWORK

(ii) whether the consultant has passed the relevant papers of the qualifying examination asspecified by the IA;

(iii) whether the consultant has complied with the requirements of the continuing professionaldevelopment programme as specified by the IA; and

(iv) any other requirements as specified by the IA.

The IA is required to maintain a register of authorised insurance brokers as well as a register ofapproved bodies of insurance brokers. The registers are open for public inspection.

An approved body of insurance brokers is required to maintain a register of its members whichcontains information required by the IA in respect of each member for public inspection.

Under this self-regulatory system, CFS is approved as an insurance broker by PIBA, which is inturn approved by the IA as a body of insurance brokers and all of its consultants have obtained theconfirmation and registration of PIBA before their appointment by CFS as the Consultants.

PIBA has promulgated a set of rules and regulations to which CFS is required to comply. Theserules and regulations cover the following areas:

(i) Membership;

(ii) Nominated accounts;

(iii) Eligibility to membership;

(iv) Code of conduct;

(v) Monitoring compliance;

(vi) Misconduct;

(vii) Power of the membership committee; and

(viii) Disciplinary matters.

For the time being, major business of CFS in its capacity as an insurance broker is thenegotiating for ILAS as contracts of insurance.

The advertisements, invitations or other documents which contain an invitation to the public toacquire an interest in or participate in, or offer to acquire an interest in or participate in ILAS requireSFC’s approval, and all ILAS dealt with by CFS are listed as Authorised Investment Products by theSFC.

On the other hand, SFC has clarified in the SFC Circular that, among others, as a general rule,the SFC considers that insurance intermediaries who are promoting, offering or selling ILAS to thepublic are neither obliged nor permitted to be licensed under the SFO. As a result, an insurance brokermay arrange with his/her customers to purchase authorised ILAS without the need for registration as aninvestment adviser or an investment representative under the SFO. Therefore, CFS is not required andin fact is not licensed by SFC. Our Company is advised by its legal advisers as to Hong Kong law thattheir view are in line with the view of the SFC under the SFC Circular that, as a general rule, insuranceintermediaries who are dealing solely in ILAS and other insurance products are neither obliged norpermitted to be licensed under the SFO.

Our Group, through CFS, also carries on business in its capacity as a MPF intermediary. MPFis regulated by the MPFA.

56

REGULATORY FRAMEWORK

The MPFA, rather than licensing MPF intermediaries directly, relies on the existing regulatoryregimes, including, among others, the IA (including the self-regulated organisations (“SROs”e.g. PIBA)), as far as practicable for the licensing and supervision of MPF intermediaries, with theMPFA acting as the lead regulator and coordinator, under Mandatory Provident Fund SchemesOrdinance (Cap. 485).

To meet basic registration requirements, an applicant must be supervised by one or more of thethree financial regulatory regimes — the MPFA, the IA and/or the SFC. An individual applicant mustpass an MPF intermediaries examination recognised by the MPFA. In addition, the applicant mustsatisfy the MPFA that he/she is fit and proper to be registered as an MPF intermediary. The regulatoryregime of IA and PIBA (as one of the SROs) will be relevant for our Company.

Generally speaking, the MPFA, in registering MPF intermediaries, is not likely to be satisfiedthat an applicant is a fit and proper person, if the person (whether in Hong Kong or elsewhere): (i) hasbeen found by a court to have acted fraudulently or dishonestly, has been convicted of a criminaloffence, or is the subject of unresolved criminal charges which are of direct relevance to fitness andproperness; (ii) is an undischarged bankrupt, is currently subject to bankruptcy proceedings, or is abankrupt who has recently been discharged; (iii) has been denied membership/registration of anyprofessional/regulatory body due to reasons other than insufficient qualification/experience, ordisqualified/censured/disciplined by any professional/regulatory body due to serious misconduct; and(iv) has failed to comply with the CPD requirement during his period of registration as an MPFintermediary.

For MPF intermediaries (corporate and individual) intending to give advice on insurancepolicies, they or their employers would need to be registered or authorised under the IA regime.

Upon registration with the MPFA, MPF intermediaries are issued with MPF intermediarycertificates (“MPF certificates”). Prior to issuing MPF certificates, MPF intermediaries cards wouldbe issued.

MPF certificates will only be issued to MPF individual intermediaries who are sponsored byMPF corporate intermediaries.

A register bearing particulars of registered MPF intermediaries is available for inspection at theoffice of the MPFA. Enquiries can also be made through an enquiry hotline.

An MPF corporate intermediary should lodge with the MPFA an annual return within thestipulated timeframe.

Upon registration with the MPFA, all MPF intermediaries, whether corporate or individual, arerequired to fulfill the requirement in respect of CPD as stipulated in the Guide to ContinuingProfessional Development for MPF Intermediaries in order to remain fit and proper to be registered asMPF intermediaries.

All MPF intermediaries must be fit and proper to remain registered with the MPFA.

At present, our Group does not conduct or intend to conduct business in the PRC or anywhereoutside Hong Kong through any means. In this regard, the regulatory framework of jurisdictions otherthan Hong Kong is not relevant to our Group’s current business and/or application for Listing.

57

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

HISTORY AND DEVELOPMENT

Organisation development

The history of our Group can be traced back to 18 March 1993 when Mr. Chan Chi Keung, thefounder of our Group and one of the Controlling Shareholders, started his general insurance brokerbusiness through CFS.

In December 1994, Mr. Chan Tsz Kin, Ernest and an Independent Third Party each subscribedfor 15% of the issued share capital in CFS as enlarged by such subscription.

During 1998, Mr. Wong, Mr. Lee Kwok Yin, Denthur and Ms. Fong joined our Group as keymanagement staff.

Mr. Chan Chi Keung bought back from the said Independent Third Party all his 15%shareholding interests in CFS in October 2000.

In January 2001, Convoy Inc was established and held by Mr. Chan Chi Keung, Mr. Wong,Mr. Lee Kwok Yin, Denthur, Ms. Fong and Mr. Chan Tsz Kin, Ernest as to 23.125%, 23.125%,23.125%, 23.125% and 7.5% equity interests respectively. As at May 2001, Convoy Inc and Mr. ChanChi Keung held 99.999999% and 0.000001% equity interest in CFS respectively.

In August 2001, by reference to the audited net asset value of CFS as at 31 December 2000 ofHK$3,203,253.00, Convoy Inc transferred 25,000 shares (representing 2.5% of total issued shares ofCFS at the time of the said transfer), 50,000 shares (representing 5% of total issued shares of CFS atthe time of the said transfer) and 50,000 shares (representing 5% of total issued shares of CFS at thetime of the said transfer) in CFS to three senior management of the teams of Consultants, namelyMs. Chang Hung, Mr. Shin Kin Man and Mr. Ko Tsun Hung, Nelson at the consideration ofHK$162,600.00, HK$325,200.00 and HK$325,200.00 respectively. The then directors of CFSconsidered that this could serve as an incentive to the said transferees.

In April 2002, by reference to the audited net asset value of CFS as at 31 December 2001 ofHK$7,435,667.00, Convoy Inc transferred 29,411, 29,411, 29,411 and 26,470 shares in CFS to foursenior management of the teams of Consultants, namely Ms. Lai Wei Tak, Mr. Yuen Ka Kin, Ms. ChuSuk Yee and Mr. Chik Wing Keung at the consideration of HK$314,936.22, HK$314,936.22,HK$314,936.22 and HK$279,944.50 respectively. Directors of CFS considered that this could serve asan incentive to the said transferees. Also in April 2002, (i) Mr. Ko Tsun Hung, Nelson and Ms. ChangHung transferred 20,589 and 8,822 shares in CFS respectively to Ms. Ho Sin Yan, Winnie (a seniormanagement of the teams of Consultants), for the consideration of HK$244,965.86 andHK$104,963.28 respectively, due to their personal investment decision and arrangement; (ii) Mr. ShinKin Man transferred 14,706 shares in CFS to Ms. Poon Chung Chi, Rita (a senior management of theteams of Consultants) for the consideration of HK$174,970.52 due to his personal investment decisionand arrangement; and (iii) Ms. Chang Hung and Mr. Shin Kin Man transferred 1,473 and 5,883 sharesin CFS respectively to Convoy Inc for the consideration of HK$17,525.60 and HK$69,995.34respectively due to their personal investment decision and arrangement.

Perfect Team was incorporated in BVI on 2 September 2002. On 28 January 2003, PerfectTeam issued new shares to Convoy Inc, Mr. Chan Chi Keung, Mr. Shin Kin Man, Mr. Ko Tsun Hung,Nelson, Ms. Chang Hung, Mr. Yuen Ka Kin, Mr. Chik Wing Keung, Ms. Chu Suk Yee, Ms. Lai Wei

58

Tak, Ms. Poon Chung Chi, Rita and Ms. Ho Sin Yan, Winnie. After such issue, Convoy Inc becamethe beneficial owner as to approximately 80.27% and Mr. Chan Chi Keung, Mr. Shin Kin Man, Mr. KoTsun Hung, Nelson, Ms. Chang Hung, Mr. Yuen Ka Kin, Mr. Chik Wing Keung, Ms. Chu Suk Yee,Ms. Lai Wei Tak, Ms. Poon Chung Chi, Rita and Ms. Ho Sin Yan, Winnie collectively heldbeneficially approximately 19.73% of the equity interest in Perfect Team as at 28 January 2003.

CFG was incorporated in BVI on 2 September 2002. In January 2003, shareholders of CFSrestructured their respective shareholding. On 28 January 2003, CFG acquired from the thenshareholders of CFS (i.e. Ms. Chu Suk Yee, Convoy Inc, Mr. Chan Chi Keung, Ms. Lai Wei Tak,Mr. Yuen Ka Kin, Mr. Chik Wing Keung, Ms. Ho Sin Yan Winnie, Ms. Poon Chung Chi Rita,Ms. Chang Hang, Mr. Shin Kin Man and Mr. Ko Tsun Hung Nelson) the entire equity interests in CFSin consideration of and exchange for CFG allotting and issuing new shares as consideration of suchacquisition. As a result of such acquisition, CFS became the wholly-owned subsidiary of CFG (withone share in CFS being held in trust by Mr. Chan Chi Keung in favour of CFG) and CFG was then heldby Perfect Team and Winus Holdings Limited (a company incorporated in the BVI which is an indirectwholly-owned subsidiary of Hongkong Chinese Limited and the shares in Hongkong Chinese Limitedare listed on the Main Board) (“Lippo Group Investment Arm”), following by Lippo GroupInvestment Arm’s subscription of 1,177,777 new shares in CFG pursuant to a subscription agreementdated 30 January 2003 (the “Lippo Subscription Agreement”) for a consideration of HK$7 million byreference to the net asset value of CFG at the date of the Lippo Subscription Agreement. According tothe Lippo Subscription Agreement, (i) for a consideration of HK$1.00, Lippo Group Investment Armhas also subscribed for and CFG has granted an irrevocable option (the “Lippo Option”) to subscribefor up to a maximum number of shares in CFG which equals to 15% of the entire issue share capital inCFG as enlarged by the issue of such number of shares upon the exercise of the Lippo Option with thesubscription price being set by reference to the net asset value of CFG at the date of the LippoSubscription Agreement; (ii) conditionally upon, inter alia, the result of the growth rate (as defined inthe Lippo Subscription Agreement) of the forecasted profit of the group companies comprising CFGfor the year ending 31 December 2003 over the actual profit of group companies comprising CFG forthe financial year ended 31 December 2002, Perfect Team or Lippo Group Investment Arm (as thecase may be) may exercise its right (the “Purchase Right”) to purchase from Lippo Group InvestmentArm or Perfect Team (as the case may be) for a consideration of HK$1.00 the number of shares inCFG held by Lippo Group Investment Arm or Perfect Team (as the case may be) as calculated underthe formula set out in the Lippo Subscription Agreement provided that the maximum number of sharesin CFG to be transferred thereunder is 7.8% of 6,138,604 shares in CFG; and (iii) conditional upon thefinancial performance as particularly described in the Lippo Subscription Agreement, further newshares in CFG might be allotted to Lippo Group Investment Arm by way of capitalisation issue byCFG in accordance with terms of the Lippo Subscription Agreement (the “Capitalisation Issue”).After the said subscription of 1,177,777 shares in CFG, Perfect Team and Lippo Group InvestmentArm held approximately 80.00% and approximately 20.00% of the then entire issued share capital inCFG respectively.

In April 2003, Lippo Group Investment Arm increased its shareholdings in CFG fromapproximately 20.00% to approximately 23.25% by further subscription of 249,722 new shares in CFGthat were allotted and issued at par by way of capitalisation issue by CFG in accordance with theCapitalisation Issue. In October 2003, by reference to the then unaudited consolidated net asset valueof CFG as at 30 September 2003, Perfect Team transferred approximately 2.72% and 5.99% of thetotal issued share capital in CFG respectively to Holly Bright Limited and Global Rise DevelopmentLimited (collectively the “Independent Investors”) for the consideration of HK$2,247,048.25 and

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

59

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

HK$4,952,943.75 respectively. Holly Bright Limited is a company incorporated in the British VirginIslands with limited liability. Mr. Lo Kwok Keung ( ), the sole beneficial owner and the soledirector of Holly Bright Limited as at the date of the said transfer, is a Hong Kong merchant and anIndependent Third Party. Global Rise Development Limited is a company incorporated in the BritishVirgin Islands with limited liability. Ms. Yuen Fung Ting ( ), the sole beneficial owner and soledirector of Global Rise Development Limited as at the date of the said transfer, is a Hong Kongmerchant and an Independent Third Party. Mr. Lo Kwok Keung and Ms. Yuen Fung Ting got to knowCFG and its subsidiaries due to their friendship with some members of management of CFS and theymade their said respective investments in CFG after they understood from the said members ofmanagement of CFS that CFG would like to broaden its shareholders base at that time and after theirrespective arm’s length negotiations and discussions with Perfect Team.

In May 2004, as the aforesaid growth rate was favourable to Perfect Team, Perfect Teamexercised the Purchase Right to purchase 30,693 shares in CFG from Lippo Group Investment Arm fora consideration of HK$1.00 and on the same date, Lippo Group Investment Arm exercised the LippoOption to subscribe for 1,083,283 new shares in CFG for a consideration of HK$4,661,043.47 so thatimmediately after such two transactions, Lippo Group Investment Arm increased its shareholdings inCFG from approximately 23.25% to approximately 34.34%. In May 2007, with a view to consolidateits investments in CFG, Convoy Inc purchased from Lippo Group Investment Arm all their shares heldin CFG (representing 34.34% of the then entire issued share capital in CFG) for a consideration ofHK$85,000,000 by reference to unaudited consolidated net profit of CFG for the financial year ended31 December 2006.

In December 2007, with a view to consolidate its investments in CFG, Convoy Inc purchasedfrom the Independent Investors all their respective shares held in CFG (representing 2.31% and 5.10%of the then entire issued share capital in CFG respectively) for the consideration of HK$2,496,723.08and HK5,503,276.92 respectively by reference to unaudited consolidated net profit of CFG for thefinancial year ended 31 December 2006.

In preparation for the Listing, we underwent the Reorganisation whereby our Company becamethe ultimate holding company of all companies comprising our Group. Details of the Reorganisationare set out under the paragraph headed “Corporate Reorganisation” in Appendix V to this prospectus.As at the Latest Practicable Date, Convoy Inc and Perfect Team held 43.8% and 56.2% of the totalissued share capital in CFG, respectively.

Business development

In March 1993, CFS commenced its insurance brokerage business in Hong Kong. There wasonly a small number of staff at that time. CFS has been a member of the PIBA since 1995.

In the course of developing insurance brokerage business, our Group has, over the past years,established business relationship with various offshore international insurance companies authorisedby the IA whose ILAS policies have been registered with the SFC in Hong Kong. These offshoreinsurance companies include, among others, Friends Provident International Limited and ZurichInternational Life Limited.

In December 1999, CFS was registered as an MPF corporate intermediary.

60

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

The total number of staff and Consultants increased from 57 persons as at 1 January 2001 to1,263 persons as at 31 December 2009. As at the Latest Practicable Date, the total headcount of staffand Consultants is 1,268 persons, including 1,023 Consultants which accounted for approximately80.7% of the total headcount of our Group. Details of the staff are set out under the paragraph headed“Staff” in the section headed “Directors, senior management and staff” in this prospectus.

Given the rapid expansion and the large number of headcount of our Consultants, our Grouphas been continuously expanding the office space. Our Group took up the first and seventh floors of LiPo Chun Chambers, No. 189 Des Voeux Road Central, Hong Kong in May 2007 and July 2007,respectively, with a total gross floor area of approximately 19,551 sq.ft.. In September 2008, our Groupfurther expanded the office space by taking up the 33rd and 34th floors of One Island East,18 Westlands Road, Island East, Hong Kong, and subsequently the 32nd floor of One Island East, 18Westlands Road, Island East, Hong Kong in February 2009, with a total lettable area of approximately63,872 sq.ft., at which our headquarters have been situated.

Our revenue increased significantly after the outbreak of Severe Acute Respiratory Syndrome(SARS) in Hong Kong in 2003 with a CAGR of approximately 35% from 2003 to 2009. We sawsubstantial advancement in commission income from ILAS business, with an increase ofapproximately 603% to approximately HK$455.6 million from 2003 to 2009.

61

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

CORPORATE AND SHAREHOLDING STRUCTURE OF OUR GROUP

Set out below is the corporate and shareholding of our Group immediately after completion ofthe Reorganisation but before completion of the Share Offer (assuming that any option that may begranted under the Share Option Scheme is not exercised):

56.2%43.8%

85.4% 14.6%

Perfect Team

(incorporated in BVI)

Convoy Inc

(incorporated in BVI)10 individual shareholders (1)

CFS

(incorporated in

Hong Kong)

CFG

(incorporated in BVI)

Our Company

(incorporated in the

Cayman Islands)

100%

100%

100%

Convoy (BVI) Limited

(incorporated in BVI)

19.7% 5.4% 5.1%19.7%20.1% 5.4%

Mr. Lee

Kwok Yin,

Denthur

Mr. Wong

19.7%

Mr. Chan

Chi KeungMr. MakMs. Fong

Mr. Chan

Tsz Kin,

Ernest

Mr. Ng

Ka Wai, Eric

4.9%

Mr. Shin

Kin Man

62

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

Notes:(1) The 10 individual shareholders and their respective beneficial shareholdings were:

Individual shareholdersApproximate percentage

of ownership

Mr. Ko Tsun Hung, Nelson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8%Ms. Lai Wei Tak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8%Mr. Yuen Ka Kin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8%Mr. Chik Wing Keung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6%Ms. Poon Chung Chi, Rita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4%Ms. Chang Hung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0%Mr. Sin Kin Chung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4%Mr. Poon Wai Pong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4%Mr. Kwong Chung Ping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3%Mr. Keung Ka Hong, Kevin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1%

Mr. Sin Kin Chung is the cousin of Mr. Shin Kin Man (an executive director of CFS) and a Consultant. Mr. Ko Tsun Hung, Nelson,Ms. Lai Wei Tak, Mr. Yuen Ka Kin, Mr. Chik Wing Keung, Ms. Poon Chung Chi, Rita, Ms. Chang Hung, Mr. Poon Wai Pong,Mr. Kwong Chung Ping and Mr. Keung Ka Hong, Kevin are Consultants.

(2) Ms. Fong, Mr. Wong and Mr. Mak are Directors and Controlling Shareholders and are regarded as connected persons of our Company.Mr. Lee Kwok Yin, Denthur, Mr. Chan Chi Keung, Mr. Ng Kai Wai, Eric, Mr. Chan Tsz Kin, Ernest, Mr. Shin Kin Man and Mr. SinKin Chung are Controlling Shareholders. Mr. Chan Tsz Kin, Ernest and Mr. Shin Kin Man are regarded as connected persons of ourCompany because they are directors of CFS. Mr. Lee Kwok Yin, Denthur, Ms. Fong, Mr. Wong, Mr. Mak, Mr. Chan Chi Keung,Mr. Ng Kai Wai, Eric, Mr. Chan Tsz Kin, Ernest, Mr. Shin Kin Man and the 10 individual shareholders of Perfect Team as stated innote 1 above have confirmed that they are not parties acting in concert as defined under the Takeovers Code. Save for Mr. Sin KinChung, Mr. Lee Kwok Yin, Denthur, Mr. Chan Chi Keung, Ms. Fong, Mr. Wong, Mr. Mak, Mr. Ng Ka Wai, Eric, Mr. Chan Tsz Kin,Ernest and Mr. Shin Kin Man are not Consultants.

(3) Mr. Lee Kwok Yin, Denthur, a shareholder of Convoy Inc and the Controlling Shareholder, joined our Group as key management staff,details of which are set out under the paragraph headed “History and development” in this section. He does not act as a Director anddoes not hold any other positions with our Company or other members of our Group due to his intention to achieve his other personalgoal. Save as disclosed in this prospectus, he did not have any relationships with any Directors, senior management, substantial orcontrolling shareholders of our Company nor any interests in the shares in our Company within the meaning of Part XV of the SFO asat the Latest Practicable Date.

(4) Mr. Chan Chi Keung is the founder of our Group, a shareholder of Convoy Inc and the Controlling Shareholder, details of which are setout under the paragraph headed “History and development” in this section. He does not act as a Director and does not hold any otherpositions with our Company or other members of our Group. Save as disclosed in this prospectus, he did not have any relationshipswith any Directors, senior management, substantial or controlling shareholders of our Company nor any interests in the shares in ourCompany within the meaning of Part XV of the SFO as at the Latest Practicable Date.

(5) Mr. Ng Kai Wai, Eric, a shareholder of Convoy Inc (holding 5.4% of the entire issued share capital in Convoy Inc) and the ControllingShareholder, is a Hong Kong merchant and acquired such shares in Convoy Inc since 2007 due to his personal investment decision andarrangement. He does not act as a Director and does not hold any other positions with our Company or other members of our Group.Save as disclosed in this prospectus, he did not have any relationships with any Directors, senior management, substantial or controllingshareholders of our Company nor any interests in the shares in our Company within the meaning of Part XV of the SFO as at the LatestPracticable Date.

63

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

Set out below is the corporate and shareholding structure of our Group immediately after thecompletion of the Reorganisation and the Share Offer (assuming that any option that may be grantedunder the Share Option Scheme is not exercised):

56.2%43.8%

85.4% 14.6%

Convoy Inc(incorporated in BVI)

Mr. ShinKin Man

19.7% 5.4% 5.1% 4.9%19.7%19.7% 5.4%

Mr. MakMr. Chan

Chi Keung Mr. WongMs. FongMr. ChanTsz Kin,Ernest

Mr. NgKa Wai, Eric

20.1%

Mr. LeeKwok Yin,

Denthur

Perfect Team(incorporated in BVI)

75%

Our Company(incorporated in the

Cayman Islands)

100%

100%

CFS(incorporated in

Hong Kong)

PublicShareholders

25%

CFG(incorporated in BVI)

Convoy (BVI) Limited

(incorporated in BVI)

10 individual shareholders (1)

64

CORPORATE HISTORY, DEVELOPMENT AND REORGANISATION

Notes:(1) The 10 individual shareholders and their respective beneficial shareholdings were:

Individual shareholdersApproximate percentage

of ownership

Mr. Ko Tsun Hung, Nelson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8%Ms. Lai Wei Tak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8%Mr. Yuen Ka Kin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8%Mr. Chik Wing Keung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6%Ms. Poon Chung Chi, Rita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4%Ms. Chang Hung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0%Mr. Sin Kin Chung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4%Mr. Poon Wai Pong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4%Mr. Kwong Chung Ping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3%Mr. Keung Ka Hong, Kevin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1%

Mr. Sin Kin Chung is the cousin of Mr. Shin Kin Man (an executive director of CFS) and a Consultant. Mr. Ko Tsun Hung, Nelson,Ms. Lai Wei Tak, Mr. Yuen Ka Kin, Mr. Chik Wing Keung, Ms. Poon Chung Chi, Rita, Ms. Chang Hung, Mr. Poon Wai Pong,Mr. Kwong Chung Ping and Mr. Keung Ka Hong, Kevin are Consultants.

(2) Ms. Fong, Mr. Wong and Mr. Mak are Directors and Controlling Shareholders and are regarded as connected persons of our Company.Mr. Lee Kwok Yin, Denthur, Mr. Chan Chi Keung, Mr. Ng Kai Wai, Eric, Mr. Chan Tsz Kin, Ernest, Mr. Shin Kin Man and Mr. SinKin Chung are Controlling Shareholders. Mr. Chan Tsz Kin, Ernest and Mr. Shin Kin Man are regarded as connected persons of ourCompany because they are directors of CFS. Mr. Lee Kwok Yin, Denthur, Ms. Fong, Mr. Wong, Mr. Mak, Mr. Chan Chi Keung,Mr. Ng Kai Wai, Eric, Mr. Chan Tsz Kin, Ernest, Mr. Shin Kin Man and the 10 individual shareholders of Perfect Team as stated innote 1 above have confirmed that they are not parties acting in concert as defined under the Takeovers Code. Save for Mr. Sin KinChung, Mr. Lee Kwok Yin, Denthur, Mr. Chan Chi Keung, Ms. Fong, Mr. Wong, Mr. Mak, Mr. Ng Ka Wai, Eric, Mr. Chan Tsz Kin,Ernest and Mr. Shin Kin Man are not Consultants.

(3) Mr. Lee Kwok Yin, Denthur, a shareholder of Convoy Inc and the Controlling Shareholder, joined our Group as key management staff,details of which are set out under the paragraph headed “History and development” in this section. He does not act as a Director anddoes not hold any other positions with our Company or other members of our Group due to his intention to achieve his other personalgoal. Save as disclosed in this prospectus, he did not have any relationships with any Directors, senior management, substantial orcontrolling shareholders of our Company nor any interests in the shares in our Company within the meaning of Part XV of the SFO asat the Latest Practicable Date.

(4) Mr. Chan Chi Keung is the founder of our Group, a shareholder of Convoy Inc and the Controlling Shareholder, details of which are setout under the paragraph headed “History and development” in this section. He does not act as a Director and does not hold any otherpositions with our Company or other members of our Group. Save as disclosed in this prospectus, he did not have any relationshipswith any Directors, senior management, substantial or controlling shareholders of our Company nor any interests in the shares in ourCompany within the meaning of Part XV of the SFO as at the Latest Practicable Date.

(5) Mr. Ng Kai Wai, Eric, a shareholder of Convoy Inc (holding 5.4% of the entire issued share capital in Convoy Inc) and the ControllingShareholder, is a Hong Kong merchant and acquired such shares in Convoy Inc since 2007 due to his personal investment decision andarrangement. He does not act as a Director and does not hold any other positions with our Company or other members of our Group.Save as disclosed in this prospectus, he did not have any relationships with any Directors, senior management, substantial or controllingshareholders of our Company nor any interests in the shares in our Company within the meaning of Part XV of the SFO as at the LatestPracticable Date.

65

BUSINESS

OVERVIEW

Our Group is principally engaged in the insurance and MPF schemes brokerage business. Wenegotiate and arrange contracts of insurance and MPF schemes in Hong Kong as the agent of ourcustomers, i.e. the policyholders, and advise on matters related to insurance. In pursuing the insurancebrokerage business, CFS commenced business in 1993, for carrying on long term (including linkedlong term) and general insurance business, and to provide independent advisory services in connectionwith insurance products. In October 1998, our Group started our brokerage business through CFS. InDecember 1999, our Group commenced MPF schemes brokerage business to tap into the unexploredmarket of MPF which was launched in December 2000. CFS is a corporate member of PIBA andcorporate intermediary of MPFA. We carry on our business under the Trademarks ( , ,

, and ) through a non-exclusive licence granted by CTL, a wholly-owned subsidiary ofCFG.

ILAS or Investment-linked Assurance Scheme is the major contracts of insurance on which ourGroup provides advisory services and from which over 99% of our Group’s revenue for the three yearsended 31 December 2007, 2008 and 2009 was generated. As a supplement, our Group also acts as anindependent broker for general and conventional insurance products and MPF schemes in the course ofproviding advisory services to the customers.

The following table sets out a breakdown of our revenue for the Track Record Period:

Year ended 31 December

2007 2008 2009

HK$’000 % HK$’000 % HK$’000 %

ILAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633,873 99.66 552,943 99.76 451,637 99.14Other insurance products . . . . . . . . . . . . . . . . . . . . . . . 1,743 0.27 410 0.07 3,391 0.74MPF schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 0.07 930 0.17 559 0.12

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 100.00 554,283 100.00 455,587 100.00

Our customers are policyholders whom the Consultants provide services to. Our Directorsbelieve that the Listing will be definitely conducive to the further enhancement of our Group’s imageand our onward development in the insurance and MPF schemes brokerage market in the future.

Our Directors believe that among all products and schemes we promote, ILAS is the mostpopular choice as it is believed to be one of the most effective insurance products to achieve ourcustomers’ objectives. A brief study of the popularity of ILAS in Hong Kong is set out under theparagraph headed “Development of ILAS in Hong Kong” in the section headed “Industry overview” inthis prospectus. Our Group is not involved in the underwriting of any product or scheme we promote.

Being an independent insurance broker, our Group has certain competitive advantages inrespect of the services we provide as shown under the paragraph headed “Competitive advantages ofan independent insurance broker” in the section headed “Industry overview” in this prospectus andunder the paragraph headed “Our competitive advantages” in this section.

66

BUSINESS

OUR BUSINESS MODEL

The simplified diagram below illustrates our existing business model:

Consultants

commissions

and supportive

operational platform

introduction

of customersfinancial needs

analysis, advisory,

recommendation and

assistance in product

application provided

by the Consultants to

our customers

ILAS, MPF schemes

and general/conventional

insurance products

contributions

and payments

Note : The solid lines represent either payment of money or contractual relationship between the parties.

The dotted line represents provision of services.

brokerage commissions

and recurring fees

(in connection with the

amount of contribution/

payments made by our

customers)

Our

Group

Product Issuers

Our

customers

(policyholders)

CFS establishes business relationships with the Product Issuers by entering into the brokeragreements. Our customers are policyholders whom the Consultants provide services to. Our Directorsbelieve that it is the industry norm that the independent insurance brokers treat the policyholders astheir customers. Our Group delivers our services to the customers through the Consultants. Inconducting the business, the Consultants will (i) conduct financial needs analysis for customers whoneed long term insurance products and schemes (including ILAS); and (ii) advise or makerecommendations to the customers concerning the selection by them of the underlying funds of ILAS.Our customers will pay contributions to the Product Issuers directly. The Product Issuers, whichdevelop the insurance products, would remunerate our Group on a commission and recurring fee basisfor services provided by our Group to the customers.

Although brokerage commission income and recurring fees are paid to us by the ProductIssuers, the policyholders are our customers whom the Consultants provide services to. Our Directorsconsider that the arrangement (as described in the above diagram) will not lead to conflicts despitecommission income is paid by the Product Issuers because (i) our focus is to provide advices andinformation to our customers according to their objectives, needs and concerns; and (ii) our Group isdedicated to provide a comprehensive and quality choice of various products to the customers throughmaintaining business relationships with various Product Issuers and performing due diligence on theirproducts, to enable the customers to make informed decision as to their choice of product(s). OurDirectors believe that the aforementioned relationships among customers, authorised insurers,insurance brokers and consultants are common across the insurance brokerage industry in Hong Kong.

Our customers entered into product purchase contracts with the Product Issuers for which ourGroup is not a party to the contracts. The written documents that the customers signed with our Group

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are, among others, Needs Analysis Form, Suitability Questionnaire and an Applicant’s Declaration toensure that the ILAS our customers purchased are suitable for them and consistent with theirrequirements and risk appetite. Our Directors confirm that no extra liabilities arise with our Group inaddition to usual liabilities which an insurance broker is subject to such as failure to comply with thecode of conduct of PIBA and/or MPFA, as a result of customers’ signing of the aforementioneddocuments.

In the event that inappropriate products are recommended by the Consultants to and purchased bythe customers, our Group will need to bear the liabilities, subject to the indemnity provided by the relevantConsultants under the contracts for services. The Product Issuers will bear the liabilities when the productsthemselves have defects or there are misrepresentations in the Product Issuers’ documentations for theproducts.

The top five ILAS Issuers of our Group in terms of commission income, together accounted forapproximately 98.5%, 96.9% and 97.1% respectively of our Group’s revenue for the three years ended31 December 2007, 2008 and 2009. Each of our top five Product Issuers issues ILAS themselves. Fourof the top five ILAS Issuers of our Group are Zurich International Life Limited, Friends ProvidentInternational Limited, Standard Life (Asia) Limited and Generali International Limited. The largestILAS Issuer of our Group, in terms of commission income, accounted for approximately 50.9%, 48.2%and 43.7% respectively of our Group’s revenue for the three years ended 31 December 2007, 2008 and2009. We therefore are reliant on a few ILAS Issuers, who are independent of us, for a substantialportion of our total revenue. Our Directors consider the concentration of ILAS Issuers for commissionincome is common across the insurance brokerage industry. For further details of our Group’s risk ofconcentration of ILAS Issuers for commission income, please refer to the paragraph headed “We relyon our top five ILAS Issuers for a significant portion of our revenue, and we anticipate suchdependence to continue in the near future” in the section headed “Risk factors” in this prospectus.

All Consultants are contracted under contracts for services with CFS and are registered withPIBA as technical representatives of CFS but do not have any contractual relationship with the ProductIssuers. There were 1,023 Consultants, and they represented the largest team of Consultants who werelicensed to market ILAS in Hong Kong as at the Latest Practicable Date. Details of the Consultantswere shown under the paragraph headed “Our competitive advantages” in this section. The majority ofour business is being generated from referrals recurring business from existing customers and theremaining is from direct marketing. Referrals, recurring business from existing customers and directmarketing accounted for approximately 47.4%, 34.3% and 18.3% of the business of our Group for theyear ended 31 December 2009 respectively.

There were 751 Consultants who were registered with both PIBA and MPFA as representativesof CFS as at the Latest Practicable Date, representing approximately 73.4% of the teams ofConsultants.

The Consultants act as representatives for our Group so that they are responsible for solicitinginsurance and MPF schemes brokerage business in Hong Kong in the scope of independent insuranceand MPF brokerage in accordance with all applicable codes, rules, laws and regulations of the relevantregulatory bodies and Government authorities in Hong Kong. As opposed to insurance agents engagedby authorised insurers in Hong Kong, the Consultants have no contractual relationship with and areindependent of the Product Issuers. Both the Consultants and our Group are responsible for theadvisory services provided to customers and potential customers. Although our Group may be subject

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to civil liabilities and/or disciplinary actions of regulatory authorities (such as PIBA) if there is anymisconduct by the Consultants in selling ILAS, the Consultants will indemnify our Group from andagainst all actions, claims, proceedings, costs, damages and expenses which may be levied, brought,incurred or made against our Group by any customer and potential customer in respect of or arising outof the provision of the services provided by the Consultants pursuant to contracts for services betweenthe Consultants and CFS. When the indemnity mechanism is invoked and the relevant Consultants failto indemnify our Group, our Group will need to compensate the customers for their losses arising fromthe provision of services by the Consultants before obtaining reimbursement from the Consultants.Naturally, these indemnities from the Consultants, depending on the personal financial situation of theConsultants, can be of limited value. Our Group manages the risk of misconduct by the Consultantsand hence the need to invoke such indemnity mechanism against the Consultants and our Directorsconsider that the risk of the need to invoke indemnity is minimised by the internal control mechanismsas disclosed under the paragraph headed “Long established and comprehensive internal controlsystem” in this section. Our Group is not aware of the availability of insurance to cover situation ofConsultants’ failure to honour indemnity. Our Directors consider that there was no occasion where weconsider it necessary to invoke indemnity provision against the Consultants for complaints fromcustomers or compliance issues arising out of services provided by the Consultants up to the LatestPracticable Date. There has been one occasion where CFS offered compensation without obtainingreimbursement from the relevant Consultant, details of which are disclosed under the paragraph headed“Summary of investigation and compliance issues” in this section.

CFS is also registered as an MPF corporate intermediary by the MPFA and therefore is eligibleto carry on the business of selling/advising on MPF schemes.

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RELATIONSHIP WITH CONSULTANTS

The Consultants, except for licensed trainees, are not employed by CFS, but CFS has enteredinto contracts for services with the Consultants on the basis that they are providing exclusive insuranceand MPF schemes brokerage services in Hong Kong to CFS. The Consultants promote, arrange andnegotiate contracts of insurance and MPF schemes with the customers independently in accordancewith all applicable codes, rules, laws and regulations of the relevant regulatory bodies and governmentauthorities in Hong Kong and are remunerated on a commission basis by CFS for the insuranceproducts and MPF schemes which they have successfully arranged. Each party under the aforesaidcontract for services is required to give the other party one month’s written notice to terminate suchcontract. Furthermore, the Consultants are prohibited by the contracts for services entered into betweenCFS and the Consultants to engage or be interested either directly or indirectly as principal, agent oremployee in promoting any business similar to those of our Group without obtaining prior consent ofour Group in writing during the continuance in force of the contracts for services and are prohibited toengage in or undertake the business similar to those of our Group in Hong Kong, including but notlimited to the business of the provision of insurance and MPF schemes brokerage services in HongKong during the three months immediately following the termination of the contracts for services. Thenumber of years of relationship we have established with the Consultants and trainees as recordedduring the Track Record Period is summarised as follows:

As at 31 December

2007 2008 2009

Years of relationshipLess than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431 485 373Between 1 to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 661 593More than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 119 178

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,026 1,265 1,144

When the Consultants accomplish new business and produce brokerage commission income forour Group through the sale of various insurance products and MPF schemes in the course of provisionof advisory services to customers who in turn enter into insurance policy contracts with the ProductIssuers (which contracts are issued by the Product Issuers), our Group pays commission to theConsultants in accordance with (i) the terms and conditions stipulated in the contracts for servicesentered into between the Consultants and CFS; (ii) the Consultants’ respective grading; and (iii) theconditions set by our Group being satisfied, such as relevant documents having been filed with ourGroup and relevant commission income having been received from the Product Issuers. The paymentof commission to the Consultants depends on the pattern of commission income and recurring feesreceived by our Group from the Product Issuers and varies with different types of products. ForRegular-savings ILAS, commission to the Consultants is generally paid in equal monthly installmentsover the period of not more than 10 months, depending on tenor and/or size of premium; whereas forLump-sum ILAS and other insurance products, commission to the Consultants is generally paid in alump-sum, upon receipt of the relevant commission income or recurring fees from the Product Issuers.For MPF schemes, the commission to the Consultants is generally paid in a lump-sum or in equalmonthly installments over the period of not more than 12 months, upon receipt of relevant incomefrom the MPF Providers. During the year ended 31 December 2009, commission payable to theConsultants in respect of ILAS brokerage commission income ranged from 43.5% to 78.2% of therelevant amount received from the ILAS Issuers.

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As at the Latest Practicable Date, 835 out of 1,023 Consultants were accredited to both CFSand CAM. A Consultant will receive commissions from CFS and/or CAM for products offered by CFSor CAM on the contract sum at the same rate no matter they are selling CFS products or CAMproducts. The commission arrangements for a Consultant when selling CAM’s products is similar tothat when selling CFS’s Lump-sum ILAS as described above in this section. Commission rates paid byProduct Issuers to CFS is generally higher than those to CAM for most of their products.

Investment funds are fundamentally different from ILAS with the result that it is the needs ofcustomers instead of difference in commission arrangement that will be the most relevant driving forcefor customers to choose investment funds or ILAS. By way of examples, investment funds with thefeatures of exit mechanism are suitable for customers who need to have higher liquidity, whilst ILASproducts are more suitable for customers who have medium to long term investment horizon givenILAS’s much longer maturity. Likewise, ILAS offers an opportunity for customers to gain exposure toa basket of funds through contributions made for a single policy, where such feature is not available forinvestment funds offered by CAM and therefore investment funds are not suitable for customers wholook for such an opportunity.

Our Group also allocates resources in maintaining and developing effective and supportiveoperation platform for the Consultants to carry on the business. Such resources include, among others,overheads for compliance and internal control, marketing, information technology systems, training,office spaces, continuous professional development programs, general administration and offering ofshort term loan facilities to the Consultants as financial assistance, etc. The Consultants need to bearpart of the training expenses and certain office expenses at cost basis.

Due to the global economic downturn outburst in the fourth quarter of 2008, the commissionincome from our Group and hence the livelihood of certain Consultants were severely affected. In thisregard, CFS offered a one-off short term loan program in January 2009 to those Consultants entitled asconsultant, senior consultant or principal consultant who earned less than an aggregate of HK$20,000in the latest three months (the “One-off Short Term Loans”). Eligible Consultants are required tosubmit an application and such application requires endorsement or guarantee by the direct recruiter ofthe Consultants and the respective immediate associate director. Subject to approval by CFS, aninstallment loan of six payments amounting to HK$8,000 per month will be provided to eachsuccessful Consultant as long as he/she being continuously contracted with CFS. During the aforesaidsix-month period, interest of 2% per annum will be applied to the outstanding loan and 50% ofcommission income of each successful Consultant will be deducted to offset the outstanding loan.After the six-month period, the outstanding loan plus interest will be automatically changed into a 12-month installment term loan with an interest rate of 8% per annum. Our Company is advised by itslegal advisers as to Hong Kong laws that CFS making the One-off Short Term Loans complies with therelevant laws in Hong Kong in that based on the fact that the One-off Short Term Loans were made byCFS (whose ordinary business does not primarily or mainly involve the lending of money) in theordinary course of its insurance and MPF schemes brokerage business for the purpose of facilitatingthe Consultants to carry out the same business, the One-off Short Term Loans should fall within theexempted loans under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong) andtherefore such arrangement of the One-off Short Term Loans should not be in breach of the MoneyLenders Ordinance (Chapter 163 of the Laws of Hong Kong).

As mentioned under the paragraph headed “The Development Model” in this section, someConsultants decide to pursue their career path to build their own teams of Consultants and recruit new

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trainees or new Consultants. These supervisory Consultants will firstly recommend candidates andwill then recommend whom they consider suitable to CFS. Interview records will then be reviewed byindependent staff of CFS. If CFS is satisfied with these candidates, CFS will engage them as newtrainees or new Consultants (if the candidates are readily and properly licensed by PIBA andaccredited to CFS, for example, current PIBA licensee accredited to other insurance intermediarycompanies). The trainees are entitled to a fixed salary and MPF contributions provided by our Groupduring training period of normally six months. At the expiration of the training period, CFS will onlyenter into the contracts for services with those who have performed to the satisfaction of CFS andwho will be generally remunerated on a commission basis as contractors to CFS and subject to termsand conditions under the contract for services. Only upon successful registration with PIBA will theseConsultants be allowed to represent CFS to offer services in negotiating contracts of insurance. OurDirectors believe, to the best of their knowledge, that the majority of new Consultants and newtrainees are introduced by the Consultants.

The supervisory Consultants are entitled to share overriding commission (being the differencebetween the higher commission rate of a supervisory Consultant for transactions and lowercommission rate of a new Consultant for the same transactions) for transactions successfully arrangedby the new Consultants. Our Directors believe that this practice is a norm across the insurance andMPF intermediary industry.

OUR REVENUE MODEL

Our Group is entitled to receive one-off brokerage commission income and recurring fee incomefrom various Product Issuers for brokering the sale of their products. The following table sets out theamount of one-off brokerage commission income and recurring fee income for the Track Record Period:

2007 2008 2009

HK$’000Percentage

of total HK$’000Percentage

of total HK$’000Percentage

of total

One-off brokerage commission income . . . . . 625,615 98% 540,309 97% 439,582 96%Recurring fee income . . . . . . . . . . . . . . . . . . . 10,453 2% 13,974 3% 16,005 4%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 554,283 455,587

During the Track Record Period, most of our Group’s revenue was attributable to one-offbrokerage commission income derived from sale of (i) ILAS; (ii) general and conventional insuranceproducts; and (iii) MPF schemes. There was no significant fluctuation in the one-off brokeragecommission income and recurring fee income respectively as a percentage of total commission income ofour Group during the Track Record Period. The one-off brokerage commission income and recurring feeincome receivable in respect of ILAS and general and conventional insurance products are normallysettled within 45 days upon receiving the commission statements. The income derived from the MPFschemes includes up-front commission and recurring management fee which are receivable upon theexecution of the MPF schemes and periodically as agreed with the MPF Providers with reference to theunderlying asset value of the MPF schemes.

Our Group records accounts receivable due from the Product Issuers and our profit margindepends on, among others, the commission rates offered by the Product Issuers rather than thepolicyholders. Commission income is payable by the Product Issuers who may default their paymentobligation to our Group even the customers paid the premiums to the Product Issuers. Accordingly, ourGroup is subject to the credit risk and bankruptcy risk from the Product Issuers.

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(i) ILAS business

Our Group’s business relationships with various ILAS Issuers, who are independent of us, areformed on the basis of the terms of business and/or conditions issued by the ILAS Issuer(s) to ourGroup. The broker agreements entered into between CFS and the ILAS Issuers have no expiry date andcan be terminated subject to one month’s advance notice and/or under certain circumstances. Fordetails of the broker agreements, please refer to the paragraph headed “Establishment of businessrelationships with Product Issuers” below in this section. For each of the three years ended31 December 2007, 2008 and 2009, the revenue of our Group attributable to the one-off brokeragecommission income and recurring fee income derived from the sale of ILAS amounted toapproximately HK$633.9 million, HK$552.9 million and HK$451.6 million, representingapproximately 99.7%, 99.8% and 99.1% of our Group’s total revenue respectively. The one-offbrokerage commission income and recurring fee income of ILAS are calculated generally as apercentage of the total premium of policy. The ILAS Issuers deliver their commission statements to ourGroup on a regular basis, such as weekly and monthly. Upon receiving the commission statements byour Group, the relevant ILAS Issuers would generally pay the one-off brokerage commission andrecurring fee income to our Group within 45 days. Our Group recognises the income on an accrualbasis upon receipt of the commission statements as confirmations from the ILAS Issuers.

Commission clawback

Pursuant to the terms of the broker agreements entered into between our Group and the ILASIssuers, the commission paid by the ILAS Issuers in relation to Regular-savings ILAS to our Group issubject to commission clawback, which applies solely to Regular-savings ILAS, by the ILAS Issuerson a pro-rata basis over an indemnified period. The indemnified period for commission clawback isgenerally from 6 months to 24 months. If a customer terminates his/her regular contributions in theindemnified period, the ILAS Issuers will recalculate the relevant commission that should be paid andclawback any excess already paid, i.e., if a customer terminates his/her Regular-savings ILAS policy anumber of months after the date of execution of his/her insurance policy and such termination fallswithin the indemnified period, our Group is entitled to retain the commission for a portion of suchnumber of months over the relevant indemnified period and shall refund any excess of the commissionalready received to the Product Issuers.

Our Group has made an estimation of the expected cash outflows related to commissionclawback for the business in the indemnified period which is subject to commission clawback withreference to a model which is established and developed by our Group (and which in our Directors’opinion is objective and consistent). Such commission clawback model is a function of the remainingnumber of the months of the indemnified period, and probability of occurrence of clawback with dataaccumulated from January 2000 after taking into account the sales volume, pattern of time oftermination, ratio of terminated business to sales volume, past experience of the levels of clawback,and our Directors’ best estimates of the expenditure required to settle the obligations in relation to theRegular-savings ILAS. The commission clawback is then prudently estimated to account for probablecommission clawback of the business being in the indemnified period at the end of that financial year.All commission clawback borne by our Group occurred in the same financial year is immediatelydebited in our Group’s revenue.

Pursuant to the contract for services entered into between each of the Consultants and CFS, theConsultants are required to bear part of the commission clawback based on a ratio of the Consultants’commission entitlement to our Group’s brokerage commission income derived from the sale of

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Regular-savings ILAS. The commission clawback borne by the Consultants is calculated based on thecommission paid by our Group to the Consultants on a same pro-rata basis as the commissionclawback by the product issuers as mentioned above.

The amount of estimated commission clawback as at 31 December 2006, 2007 and 2008 wereapproximately HK$4.1 million, HK$5.1 million and HK$8.0 million, representing approximately1.1%, 0.8% and 1.4% of the revenue of our Group for each of the three years ended 31 December2008. These estimated sums were set aside at the end of each financial year to prepare for actualcommission clawback which may occur subsequently within the indemnified period. Thecorresponding actual clawback occurred and borne by our Group in 2007, 2008 and 2009 which relatesto revenue generated from the previous year, was approximately HK$3.3 million, HK$4.3 million andHK$6.7 million respectively.

As at 31 December 2009, our Group had estimated commission clawback of approximatelyHK$5.9 million to account for the probable commission clawback in relation to the businessaccomplished and indemnified by our Group in the years prior to 31 December 2009.

The commission clawback for the four years ended 31 December 2006, 2007, 2008 and 2009 issummarised as below.

Year ended 31 December

2006 2007 2008 2009

Estimated clawback for a particular year relates to revenue generated fromprevious years:

Revenue from Regular-savings ILAS (HK$’ million) . . . . . . . . . . . . . . . . . . 377.7 633.9 552.9 451.6Estimated clawback at the end of financial year (HK$’ million) . . . . . . . . . . 4.1 5.1 8.0 5.9Estimated clawback-to-revenue ratio (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1% 0.8% 1.4% 1.3%

Actual clawback occurred in the next financial year:(1)

Actual clawback borne by our Group in relation to the revenue fromRegular-savings ILAS (HK$’ million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 4.3 6.7 N/A

Actual clawback borne by Consultants in relation to the revenue fromRegular-savings ILAS (HK$’ million)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 6.5 9.1 N/A

Notes:(1) The actual clawback for a particular year relates to revenue generated from previous years. Any difference between the estimated and

actual commission clawback would be adjusted in the estimation of commission clawback recognised to the statement of comprehensiveincome in the next year. The amounts in the above table represent actual clawback occurred in 2007, 2008 and 2009, which relates torevenue generated on or before 31 December 2006, 31 December 2007 and 31 December 2008, respectively.

(2) The actual clawback borne by the Consultants is calculated on a similar basis as the clawback charged by the Product Issuers asmentioned above. The actual clawback borne by the Consultants would not be accounted for as our Group’s expenses and would beoffset against the commission expense payable to the Consultants. In the event that the contractual relationship between CFS and theConsultants has been terminated, the commission clawback would be accounted for as a receivable from the Consultants by our Group.

Our Directors believe that our Group has objectively estimated the extent and the possibility ofoccurrence of commission clawback and the amount of estimated commission clawback has beenprudently, consistently and fairly reflected in the financial statements.

(ii) Conventional and general insurance business

For the three years ended 31 December 2007, 2008 and 2009, the revenue of our Groupattributable to one-off brokerage commission income and recurring fee income derived from the sale ofgeneral and conventional insurance products amounted to approximately HK$1.7 million, HK$0.4million and HK$3.4 million, representing approximately 0.27%, 0.07% and 0.74% of our Group’s totalrevenue respectively. The one-off brokerage commission income and recurring fee income are

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calculated as a percentage of the premium of each policy and are usually receivable from the ProductIssuers on a monthly basis.

(iii) MPF schemes business

For the three years ended 31 December 2007, 2008 and 2009, the revenue of our Groupattributable to brokerage commission income and recurring fee income derived from the sale of MPFschemes amounted to HK$0.5 million, HK$0.9 million and HK$0.6 million respectively, representingapproximately 0.07%, 0.17% and 0.12% of our Group’s total revenue respectively. The brokeragecommission income and recurring fee income are calculated as a percentage of the asset value of theMPF schemes and are usually receivable from the MPF Providers on a monthly basis. Our Grouprecognises the income upon the commencement of the respective MPF scheme.

OUR COMPETITIVE ADVANTAGES

The largest number of consultants licensed to market ILAS in Hong Kong

Since the Consultants are the major income contributor of our Group, our success relies to asignificant extent on the growth in the number of Consultants in the recent years, as shown below:

As at 31 December CAGR2004-2009

As at theLatest

PracticableDate2004 2005 2006 2007 2008 2009

Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 534 831 959 1,127 1,041 24.5% 1,023

As at 30 April 2010, being the latest practicable date for ascertaining the total number ofcompanies and consultants registered with HKCIB, there were 551 companies and 7,696 consultantsregistered with (i) IA or (ii) PIBA and/or HKCIB in Hong Kong. PIBA and HKCIB are two insurancebroker bodies approved by the IA. Among these companies and consultants, there were 382 companiesand 6,626 consultants who were registered with (i) IA or (ii) PIBA and/or HKCIB and allowed tomarket ILAS. As at the Latest Practicable Date, our Group had 1,023 Consultants. As at 30 April 2010,being the latest practicable date for ascertaining the total number of Consultants eligible to marketILAS in Hong Kong, our Group had 1,065 Consultants representing approximately 16.1% of the totalnumber of consultants eligible to market ILAS in Hong Kong. Our Group is ahead of the othercompetitors in terms of the number of consultants as shown below:

Number of consultants allowed to market ILAS in Hong Kong as at 30 April 2010 Number of companies

1-10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27511-20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5221-30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1631-40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1241-50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551-100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11101-200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7201-300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2301-400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1401-1,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0Over 1,000(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382

Note:(1) CFS was the only company in this category as at 30 April 2010.

Sources: PIBA and HKCIB

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Our large teams of Consultants would strengthen our sales and marketing channels and thevariety background of the Consultants would assist penetration and promotion of our insuranceproducts and MPF schemes to various target customers, which will improve public awareness andpopularity of ILAS and other insurance products and MPF schemes.

Our Directors confirm that the aggregate commission paid to the five highest-paid Consultantsfor the three years ended 31 December 2007, 2008 and 2009 does not exceed 30% of the totalcommission paid during the relevant years.

Quality, competence and independence of the Consultants

Our Directors believe that the trainings and development opportunities provided by our Groupfor the Consultants via the Development Model are instrumental for the Consultants to provide qualityservices to our customers.

The Consultants are well-educated with approximately 95.2% having tertiary education level orabove and approximately 9.4% with post-graduate level as at Latest Practicable Date. The followingtable shows the details of education level of the Consultants:

Number ofmembers withpost-graduatequalification

Number ofmembers

with tertiaryeducation

qualification Others Total

Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 878 49 1,023Percentage of the total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4% 85.8% 4.8% 100%

All Consultants are registered with regulatory bodies and obtained relevant licence to performtheir duties. They are registered as technical representatives with PIBA and a number of them are alsoregistered as MPF individual intermediaries with MPFA. As at the Latest Practicable Date, the numberof registrants with regulatory bodies are summarised below:

PIBAtechnical

representative

Both PIBAtechnical

representativeand MPFindividual

intermediaries

Total number of the Consultants in our Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,023 751Percentage to the total number of the Consultants in our Group . . . . . . . . . . . . . . . . . 100% 73.4%

Only Consultants properly registered as MPF individual intermediaries with MPFA arepermitted to conduct MPF brokerage business. Our Directors confirm that those Consultants whoengage in the MPF brokerage business are properly registered with MPFA and those Consultants whohave not registered with MPFA cannot and have not conducted any MPF schemes brokerage business.

The fact that the Consultants representing CFS have no contractual relationship with anyProduct Issuers distinguishes an independent role of the Consultants as compared to the insuranceagents. An insurance agent is engaged and commissioned directly by the authorised insurers to sell andmarket only products issued by those authorised insurers which the insurance agent is engaged with.Whereas, the Consultants’ independence from the Product Issuers allow them to negotiate and arrangea variety of contracts of insurance and MPF schemes issued by unrestricted number of Product Issuers,

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which in turn provides customers with a wider variety of products to choose from that better suit theirneeds.

The Development Model

The Development Model provides a means for the Consultants and trainees to gain technicalknowledge and improve customer management or interpersonal communication skills. In addition, thetraining and development enable the Consultants to further develop their career in insurance and MPFschemes brokerage industry.

The Development Model is a systematic training and development programme through whichthe Consultants and trainees are trained, monitored and educated in accordance with our Group’spolicies.

In addition, the Development Model educates the Consultants and trainees with the concept oforganic growth which as a result, provides a wide range of knowledge to the Consultants.

(i) Professional development and training

Our Directors believe that the success of advisory services depends on the ability andcompetence of the Consultants (a) to understand the financial needs of customers; (b) to exploreand identify the needs in various life stages of customers; (c) to give guidance in understandingthe customers’ objective; (d) to develop sound financial plans to satisfy customers’ objective;(e) to select and recommend suitable financial tools to match customers’ risks and returnsexpectations; (f) to implement the financial plans for the customers; and (g) to monitor andreview regularly the performance of plans to the satisfaction of the customers. As such, asuccessful independent insurance broker needs to undergo a series of development processes inboth technical knowledge and personal attitude.

In order to train up a successful independent insurance broker, our Group has developed acareer development model for every new trainee, starting from his/her first day of joining ourGroup until he/she becomes a Consultant.

In general, a new trainee receives basic training on a full time basis to enable him/her to bea licensed person to carry out the insurance brokerage business. Our Group provides varioustutorial classes and seminars and for different licensing examinations, in particular, IIQASexamination to be qualified as a registered PIBA technical representative of an insurance brokerunder the IA and the Mandatory Provident Fund Schemes Examination from the VocationalTraining Council to be qualified as a registered MPF intermediary under MPFA. Further to that,our Group holds an accredited CPD core credit training seminar which satisfies the licensingrequirements of the IA.

Our Group provides a series of training to enable the Consultants to serve the customers inan efficient way. Such series of training is divided into three levels, namely primary, secondaryand tertiary.

In the primary level, a new trainee is required to undergo seven and a half days full timein-class training course. During the training course, he/she learns the insurance and MPFbrokerage concepts, understands the operations of financial tools and enriches his/her inter-personal communication skills. In time, he/she will understand our Group’s culture, missionand objective. At the end of this training course, he/she is required to sit for and pass an

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examination. After a team is duly assigned, he/she will proceed to a practical training sessionconsisting of a mentoring guidance program and a team development program. In the practicaltraining session, the team leader as a mentor will frequently monitor the performance of thenew member and his/her attitude to co-operate with other team members. Our Directors believethat individual mentoring is effective for the new member’s future development as (a) thementor can provide a tailor-made training program to meet the new member’s character andtalent; and (b) the training is inter-active which the new member can share the expertise andexperience of the mentor.

To be qualified as a Consultant, the trainees are obligated to meet the prerequisites by(a) satisfying the training attendance requirement; (b) passing the internal training examinationand performance assessment; and (c) obtaining the relevant licence issued by PIBA. Uponcompletion of the probation and after becoming a Consultant, each Consultant has his/her solediscretion to progress his/her career within our Group by either focusing on (a) developingleadership and management skills in preparation for building his/her own team of Consultants;or (b) developing business and services knowledge and managing his/her own portfolio ofclients.

In the secondary level, our Group provides a series of self-development training andworkshops for the Consultants. The training emphasises different inter-personal communicationskills and various motivation methods, while the workshops focus on Emotional Quotient andAdversity Quotient developments to deal with pressures and adverse environment and crisismanagement. In addition, our Group has started to provide advanced training on insurance andMPF scheme brokerage related knowledge in order to enhance the knowledge and skills of theConsultants when dealing with customers.

Also, our Directors believe that ethic is important to the development of an independentinsurance broker in the long run. The training and workshops are also aimed to build up astrong attitude and ethical sense of the Consultants for their future career development.

In the tertiary level, our Group arranges a series of workshops to assist a Consultant tofurther develop his/her career either as a principal Consultant or as a team leader. For theprincipal Consultant, our Group provides training on re-packing his/her overall skills andknowledge, with a purpose to allow him/her to achieve an effective and efficient insurance andMPF brokerage technique. For the team leader, our Group provides training on recruitment andstaff selection techniques and human resources management. Special training will be on how tobecome a successful team leader, team management and coaching and counseling techniques.

In addition to the above in-house training, our Group also encourages all staff andConsultants to participate in professional training such as the CFP accreditation. For example,our Group has launched an educational sponsorship program which the staff/Consultant will bepartially reimbursed the course fees upon their successful completion of the course.

(ii) Mentoring efforts

Our Directors believe that mentoring is a well established tool used by forward-thinkinglearning organisations and managers and that, a mentor is an enabler who fosters independentthinking and development of problem-solving skills. The basic aim of mentoring is theestablishment of a quality and time-effective relationship that contributes to careerdevelopment. The mentor encourages the mentee to take a proactive role during his/her careerdevelopment. The mentor will provide support and assist with the planning of work and career

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development paths. The mentor helps the mentee to gain exposure and experience to the keywork tasks, skills and the relevant task outcome expected of an independent insurance broker inthe insurance and MPF brokerage business. Senior members of Consultants have been takingactive part in mentoring for junior members of Consultants.

(iii) Organic growth

In line with the progress of the Development Model, each team of the Consultantsbecomes self-sustained and works independently in a way similar to a profit centre. Each teamof the Consultants builds up its own team spirits and sub-cultures, and endeavours to contributeincome to our Group. When a team of the Consultants works for a period of time, a neworganic team of the Consultants may be built up. Our Directors believe that this organicstructure gives vitality to the Development Model.

The team leaders regularly meet and share the experience among themselves. Teams of theConsultants as a whole enhance our Group’s objectives and harmony. Therefore, each team ofthe Consultants added together would create a synergy effect to the benefits of our Group. OurDirectors believe that the success of the Development Model is crucial to the futuredevelopment of our Group.

Young and experienced management

The management team consists of our executive Directors and senior management. They areyoung (on average 39 years old), and dedicated. Most of the management are familiar in variousaspects of the insurance brokerage business, such as strategic formulation, sales and marketing, financeand accounting, legal and compliance, customer relationship handling and information technology,with over ten years’ experience. Ms. Fong, the chief executive officer, has received “Benchmark MostExtraordinary Women in Finance 2009” Award by the Benchmark magazine in May 2009.

Stable senior members of the Consultants

The turnover rates of the Consultants and trainees of our Group are summarised as below:

Year

2004 2005 2006 2007 2008 2009

Senior members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5% 0.0% 0.0% 0.0% 0.9% 4.5%Intermediary members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7% 3.2% 1.4% 3.7% 5.9% 13.3%Junior members (including trainees) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.1% 41.6% 35.3% 37.7% 40.2% 52.9%

As at the Latest Practicable Date, 136, 362 and 525 Consultants were classified as senior,intermediary and junior members respectively.

The increase in turnover rate of the Consultants in 2009 is mainly attributable to theunfavorable business performance in the teams of the Consultants as a result of the global economicdownturn occurred in the fourth quarter of 2008 and the aftermath in 2009. In bid to uphold its overallproductivity, our Group has implemented various measures to consolidate the teams of the Consultantsand our Group experienced a moderate drop by 7.6% in the total number of the Consultants as at 31December 2009 as compared with that as at 31 December 2008.

Senior members include deputy director, vice president, associate director and assistant vicepresident. Intermediary members include assistant associate directors, relationship manager, chief

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wealth management advisor and principal consultant. Junior members include senior consultant, seniorwealth management advisor, consultant, wealth management advisor and consultant trainee.

The turnover rate of junior members is relatively high. Our Directors consider that it isreasonable and normal due to the fact that our Group provided a series of training to the juniormembers and required them to satisfy various targets as a way of screening capable and stableConsultants. The turnover rate of senior members remained at a relatively low level for the six yearsended 31 December 2009. Our Directors believe that it is an important factor for the continuoussuccess of our Group and the result of stringent screening for the junior members and the consolidationof the intermediate members of the Consultants.

For the six years ended 31 December 2009, the turnover rate of senior members was consideredto be low. Only one senior member left in 2004, 2008 and in 2010 up to the Latest Practicable Date.No senior member left our Group in 2005 and 2007, and 6 left in 2009. Our Directors expected thatsuch low turnover rate will continue in the near future. The senior members, which comprised 136members as at the Latest Practicable Date, are those in the position of deputy directors, vice presidents,associate directors and assistant vice presidents. The senior members are not employees of our Group.

Relationship with Product Issuers

As at the Latest Practicable Date, our Group had built up a network with not less than 12 ILASIssuers and seven MPF Providers and certain other Product Issuers, and formed strategic partnershipsin promotion, marketing and sale of insurance products and MPF schemes. Our Group has co-operatedwith the top five Product Issuers for over five to nine years. Each of our top five Product Issuers issuesILAS themselves. Four of our top five Product Issuers are Zurich International Life Limited, FriendsProvident International Limited, Standard Life (Asia) Limited and Generali International Limited.

The top five ILAS Issuers of our Group, in terms of commission income, accounted forapproximately 98.5%, 96.9% and 97.1% respectively of our Group’s revenue for the three years ended31 December 2007, 2008 and 2009. To the best knowledge of our Directors, it is estimated that ourGroup accounted for as high as 30% of the ILAS business of the insurers among the major ILASIssuers of our Group in 2009 based on the total amount of annual premium of our major ILAS Issuerson new business in 2009 as disclosed in the website of OCI. The largest ILAS Issuer of our Group, interms of commission income, accounted for approximately 50.9%, 48.2% and 43.7% respectively ofour Group’s revenue for the three years ended 31 December 2007, 2008 and 2009. We therefore arereliant on a few international ILAS Issuers, who are independent of us, for a substantial portion of ourtotal revenue. Our Directors consider that the concentration of Product Issuers is common across theinsurance brokerage industry. For further details of our Group’s risk of concentration of ILAS Issuersfor commission income, please refer to the paragraph headed “We rely on our top five ILAS Issuers fora significant portion of our revenue, and we anticipate such dependence to continue in the near future”in the section headed “Risk factors” in this prospectus.

None of our Directors, their respective associates or any Shareholders holding more than 5% ofthe issued share capital of our Company held any interest in the five largest ILAS Issuers of our Groupduring the Track Record Period.

In order to improve communication with the Product Issuers, our Group has established abusiness processing department to monitor the application process of the insurance products by

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reviewing the relevant information and documents to be submitted to the Product Issuers with the aimof ensuring the accuracy and completeness of each application.

Because of the long established business relationship with various ILAS Issuers, our Directorsbelieve that our Group is in a competitive position to (i) provide a variety of choices to satisfycustomers’ needs; (ii) negotiate for the benefit of the customers regarding the pricing and quality ofservices provided by the insurance issuers; and (iii) timely obtain an update on the development ofILAS, conventional and general insurance and MPF market.

Variety of ILAS, general and conventional insurance products and MPF schemes to satisfycustomers’ needs

Unlike an insurance agent employed by an authorised insurer who can only negotiate andarrange insurance products developed by that particular authorised insurer, an insurance broker isauthorised to negotiate and arrange insurance products developed by any authorised insurer. As such,in general, an insurance broker can offer a wider range of products.

As at the Latest Practicable Date, our Group had business contracts with 12 ILAS Issuers andseven MPF Providers. Our Directors believe that with the large number of the Consultants, our Groupcan easily access different products to meet customers’ need if necessary and Product Issuers generallyare interested in offering various products to our Group. With a wide range of ILAS, insuranceproducts and MPF schemes with different characteristics in place, our Directors believe that most ofthe needs and concerns of our potential customers can be properly addressed and resolved.

Brand name recognition in insurance brokerage industry

Our Directors are of the view that a strong reputable brand name can facilitate the sale andmarketing of the products of our Group. Our Group proactively participates in charitable events and/orthrough advertisements in magazines to enhance the public awareness of our brand name. Our Groupwill also promote our expertise in the insurance and MPF schemes brokerage industry throughparticipating in trade exhibitions in Hong Kong as well as organising regular seminars and training forour customers.

Since our establishment, we have received numerous awards as a recognition of our pastachievement, including, among others, the “Hong Kong’s Best Company for Financial PlanningExcellence (Independent Financial Advisory industry sector)” by South China Morning Post IFPHKfor the years 2007 to 2009; “Best Employers in Hong Kong 2007” and “Best Employers in Hong Kong2009” by Hewitt Associates and the South China Morning Post and “Best Employers in Asia 2009” byHewitt Associates in partnership with The Wall Street Journal Asia.

Long established and comprehensive internal control system

With the aim of developing and strengthening our compliance and internal control mechanisms,our Group has established and implemented risk management and internal control systems, policiesand procedures, with reference to the requirements of the PIBA and the OCI, which include, amongothers, (i) compliance program to ensure suitability of advice rendered to customers and to developpolicies and procedures for guiding the Consultants in providing advices to customers, for relatededucation for the Consultants, for collection, retention and update of customer information includingfinancial situation, investment experience and investment objectives, and for analysis to be performed

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to support advice given to customers etc.; (ii) control and approval procedures for advertising andpromotional materials before release to the public; (iii) requirements and mechanisms for promptdelivery of insurance policies to customers; (iv) ensuring our Company’s compliance with allapplicable legal and regulatory requirements as well as with our Company’s own internal policies andprocedures by establishing an effective legal and compliance department; and (v) objectivelyexamining, evaluating and reporting on the accuracy, effectiveness and efficiency of our Company’sinternal control system by engaging independent external audit firms to perform internal auditfunctions on a regular basis. Based on the recommendations and findings from the internal auditexercise and occasional internal control review, our Group enhances the internal control systemcontinuously to ensure compliance with relevant legal and regulatory requirement.

Our Group has recruited an in-house qualified lawyer to supervise the legal and compliancedepartment to monitor internal control and legal and compliance issue. Our Directors confirm that nomaterial internal control or compliance discrepancies were noted and neither judgment, verdict nor anyform of sanction has been adversely entered or made against our Group by the relevant regulatoryauthorities and courts regarding mis-selling of products or any other regulatory matters sinceestablishment of CFS in March 1993.

Our Group has engaged a firm of certified public accountants, namely Messrs. C.W. Fan & Co.,to perform an internal control review on our Group’s internal control system for the purpose of theListing. According to the internal control review report prepared by the said firm of certified publicaccountants, the following measures are recommended to further enhance the effectiveness of internalcontrol of CFS: (i) to prepare for formal narrative procedure manual for each department of CFS tosupplement the flow charts currently approved and adopted by each department; (ii) to properlydocument the evidence of review and approval of certain accounting reports; (iii) to update theauthorised signatory list with the banks of CFS; (iv) to strengthen the reviewing procedure over bankreconciliation statements to avoid manual mistakes; (v) to well document and review the petty cashcount and the fixed asset count; (vi) to reconcile periodically the fixed assets registers of the financeand accounts department with the administrative department and information technology department;(vii) to review the status of the Product Issuers regularly; (viii) to appoint a compliance officer inrelation to the Listing and prepare for listing compliance manual; (ix) to ensure the adoptedprocurement policy to be properly executed; and (x) to properly document the salaries of certaindirectors of CFS. Messrs. C.W. Fan & Co. has been established since January 2006 and has performedinternal control review exercises for more than ten listed or non-listed companies in Hong Kong, ofwhich not less than five relate to listing exercises in Hong Kong. Furthermore, the officer-in-charge ofMessrs. C.W. Fan & Co., who is responsible for the abovementioned internal control review exerciseof our Group, is a practising Certified Public Accountant and has been in the accounting profession forabout ten years. Based on the above and the Sponsor’s interview and discussions with Messrs. C.W.Fan & Co. regarding, among others, (i) Messrs. C.W. Fan & Co. and its staff’s relevant experience ininternal control review and professional qualifications; and (ii) the methodology, guidelines/standardsand assumptions adopted for the purpose of our Group’s internal control review, the Sponsor considersthat Messrs. C.W. Fan & Co. is qualified and experienced to carry out the internal control review ofour Group in a professional manner.

As discussed in the said internal control review report, notwithstanding that the implementationof the above measures can further enhance the internal control of CFS, the said firm of certified publicaccountants did not identify any significant weakness that may indicate the control system of CFS tobe out of place or ineffective in providing reasonable assurance against material misstatement or loss

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and did not identify any reason to believe that the internal control system of the CFS is ineffective inensuring maintenance of proper accounting records, provision of reliable financial information orcompliance with relevant legislation and regulations.

Save for item (i), CFS has implemented all the remedies above. Our Group will pay acontinuous effort to update and review item (i) before and after the Listing as this remedy requiresmore time to be implemented.

Internal control measures consistent with the requirements of PIBA in relation to the Consultants

In addition to the long established and comprehensive internal control system as describedunder the paragraph above, our Group has implemented a series of internal control measures whichaims to ensure that the Consultants properly conduct the business on behalf of our Group, and detailsof which are summarised as follows (all these measures have been in place before the Track RecordPeriod and implemented throughout the Track Record Period and thereafter as at the Latest PracticableDate and would continue to be implemented thereafter except as otherwise indicated):

(i) Training and compliance support provided to the Consultants and the trainees

Through the Development Model, our Group provides trainees with a compulsory sevenand a half days full time in-class training course to enable them to acquire the necessaryknowledge for carrying out the insurance brokerage business, which focuses on, among others,the code of practice in conducting the business, in particular, the proper selling procedures andavoidance of mis-selling, the appropriate behaviour and restrictions when approaching thecustomers through telephone calls, objection handling techniques and after sales services, newbusiness engagement procedures and professional knowledge on our products anddocumentation methodology. Further details regarding the Development Model is set out underthe paragraph headed “The Development Model” in this section. As an ongoing support to theConsultants, CFS regularly provides training support in respect of arranging and providingCPD courses and general training. Such measures can equip the Consultants with necessaryknowledge, skills and support for acting properly on behalf of our Group.

(ii) Requirements for all Consultants to obtain relevant licence

As described under the paragraph headed “Quality, competence and independence of theConsultants” above in this section, all Consultants are required to be registered with regulatorybodies and obtained relevant licence to perform their duties. Our consultancy administrationdepartment has been established in April 2008 (the same task was performed by our legal andcompliance department and our human resources department prior to April 2008) to keep trackof the licensing details of the Consultants to ensure that the Consultants have the appropriatelicences when dealing with our customers. All Consultants have contractually undertaken undertheir respective contracts for services entered into with CFS that they will only carry on theiractivities on behalf of our Group for which they are licensed. There are also internal controlmechanisms in place whereby our back office staff, who are independent of the Consultants,will check the validity of the Consultants’ relevant licences while processing each productpurchase application before submitting the same to the Product Issuers through our Group, andensure that the Consultants have renewed their relevant licences upon expiry.

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(iii) Documentation to ensure suitability of products and conveyance of important information

CFS has designed a Needs Analysis Form to assist the Consultants in conducting thefinancial needs analysis on customers, understanding the financial needs of customers andgathering information regarding and making recommendations suitable for the needs of thecustomers. Every new application for ILAS must be accompanied by such Needs Analysis Form.From September 2007 onwards, CFS has enhanced a standardised work flow undertaken by everyConsultants to ensure that customers purchase ILAS which are suitable for them and consistentwith their requirements and risk appetite, which involves (a) the completion of the NeedsAnalysis Form by the Consultants in hand-written form as acknowledged by the customers toreflect suitability of ILAS in terms of the customers’ objectives, affordability and age, withindication of customers’ risk tolerance level to ensure the risk level of the products match with thecustomers’ risk profile; (b) where suitability may be in issue such as where a customer chooses toproceed with portfolios of underlying funds of risk levels inconsistent with the customer’s riskprofile or where the customer chooses ILAS with maturity beyond his/her expected retirementage etc., the requirement for customers’ instructions and explanations in hand-written formatcounter-signed by customers in the Needs Analysis Form for CFS to proceed with suchapplication; and (c) the execution of a form of applicant’s declaration to confirm the customers’understanding and acceptance of the highlighted features of the product. The documentationinvolved in the work flow is designed in accordance with the requirements which are availablefrom the relevant regulatory authorities and is required to be explained and completed together bythe Consultants and our customers at the time when sales is conducted. Details of the above workflow are set out under the paragraph headed “Our customers” in this section.

(iv) Proper new customer due diligence and acceptance procedures

For each new customer of CFS, the Consultants are required to perform “know yourcustomer” due diligence checking to understand the customers’ background information andassess his/her income and risk tolerance level. “Know your customer” due diligence involvesgathering customers’ information such as name, date of birth, identification document number,address, education level, occupation, name of employer and position. The Consultants will alsogo through with the customers a suitability questionnaire whereby the customers’ risk tolerancelevel will be analysed. Such information will be documented in the application documentationsincluding in the Needs Analysis Form and will be signed by the customers for confirmation.

(v) Follow-up verification performed by independent staff

The completed due diligence and application documentations are required to be checkedand approved by the business processing department of CFS before submission by us to theProduct Issuers for processing. Documents of the customers are kept for at least seven years.

The business processing department of CFS also reviews each Needs Analysis Form basedon a guideline designed by the legal and compliance department. Should there be suitabilityissues without client’s instructions to proceed as aforesaid, the application may be rejected.

In order to reduce the possibility of any mis-communication between potential customersand the Consultants or any mis-understanding by the potential customers, we seek to conduct afollow-up telephone check with all customers is performed after each new application for ILASis received and being processed. All follow-up telephone checks are recorded and undertaken

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under a standardised procedure designed by the legal and compliance department where weseek further confirmation from the customers regarding their understanding of certain importantfeatures of the products which they purchased.

For the avoidance of any possible misunderstanding from our customers’ perspective indistinguishing CFS from CAM, which certain Consultants also carry on business under theTrademarks, (i) CFS has issued a directive to remind the Consultants to inform the customers duringthe sales process (usually at the instance of about conducting the financial needs analysis on customerswhich is an early stage of the sales process) that they are representing CFS and using their licenceswhen arranging for products offered by CFS for customers; and (ii) during the follow-up telephonecheck with our customers as described above, the staff also reminds our customers that the transactioninvolved an insurance product arranged by CFS, which is an insurance intermediary licensed by PIBA.With the above internal control procedures in place, our Directors consider that the customers would beable to differentiate which company the particular Consultants are acting for. Our Directors understandthat CAM also has similar measures in place in relation to the directives and reminders to customers.

Both CFS and CAM have set out in the contract for services with their Consultants theobligation for them to obtain all licences necessary for the services that they provide. There existsstringent internal controls by CFS and CAM that only applications arranged by properly licensedConsultants will be accepted for further processing. Otherwise, the applications will be rejected.

Our Group also has a well-established complaint handling procedure which allows us tomonitor any possible improper conduct or acts by the Consultants, details of which are set out underthe paragraph headed “Complaint handling procedures of our Group” in this section.

Furthermore, our legal and compliance department regularly reviews applicationdocumentations submitted by the Consultants, general marketing materials prepared or processed byour corporate communications department and product-specific marketing materials prepared byvarious insurance companies.

Internal control measures in relation to the Consultants acting for CAM

Our Group has also implemented the following internal control measures to ensure that theConsultants acting for CAM properly conduct their respective businesses.

As disclosed in the section headed “Relationship with the Controlling Shareholders andconnected transactions” in this prospectus, most of the Consultants also act on behalf of CAM. Whenacting on behalf of CAM, the Consultants are required to carry out their activities under licencesgranted by the SFC. Those Consultants acting for CAM must be licensed by the SFC to carry out type1 (dealing in securities) and/or type 4 (advising on securities) regulated activities under the SFO,whereas the Consultants acting for CFS must be licensed by PIBA. CAM has confirmed to us that ithas similarly implemented stringent internal control procedures in line with the SFC’s requirementswhen dealing with customers regarding CAM’s products, which include but not limited to “know yourcustomer” due diligence, understanding of risk profiles and needs of customers, ensuring suitability ofproducts for customers, control of marketing materials, maintenance of complaints handlingprocedures, verification by independent staff and regular reviews by compliance professionals. Theaforementioned internal control procedures have been in place since CAM started its regulatedactivities under the SFO in 2003 and there has been continuous update and strengthening of its internal

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control procedures. Besides, those Consultants who also act for CAM have also undertaken throughtheir respective contracts for services entered into with CAM that they will only carry out their type 1(dealing in securities) and/or type 4 (advising on securities) regulated activities on behalf of CAM aftertheir relevant licences have been granted by the SFC. There are also internal control mechanisms inplace whereby CAM’s back office staff, who are independent from the Consultants, will check thevalidity of the Consultants’ SFC licence while processing each product purchase application receivedby CAM. When a customer requests for or needs products that a particular Consultant is not licensedfor, that particular Consultant will cease to serve that customer. CFS and CAM have set out in (i) thecontracts for services with their Consultants the scope of services and obligation to obtain all licencesnecessary for the services they can provide such that the Consultants will clearly understand their rolesbefore they commence the business; and (ii) the compliance manual and directives to require theirrespective Consultants to provide customers with adequate and appropriate information about theirbusiness; therefore, our Directors believe that the Consultants who are not licensed for a particularproduct will refer the customers to other Consultants with proper licences under the said internalcontrol measures. Moreover, commissions for products negotiated or arranged by the Consultantsacting on behalf of CAM and CFS are calculated, processed and paid by CAM and CFS themselvesrespectively.

Furthermore, if there is any misconduct by the Consultants when representing CAM, thereexists liaison mechanism whereby our Directors will seek to understand the situation by discussionwith the management of CAM, and to make announcements to the public as and when appropriate toclarify the situation in order to manage reputation risk. In the event that complaint cases arising fromConsultants’ misconducts when representing CAM are raised to CFS staff, CFS will refer such cases toCAM’s customer service staff for their further handling. In addition, the directors of CAM have agreedwith our Group to provide our Group its internal control review reports on a quarterly basis. CAM hasconducted such reviews for about three years. Such internal control review reports contain, amongothers, findings and recommendations on the CAM’s control procedures, which our managementincluding Mr. Wong, Ms. Fong and Mr. Mak have reviewed and will review in detail. During thequarterly reviews, our management will also review, among others, the compliance record (in respectof investigations and disciplinary actions against CAM and the Consultants acting on behalf of CAMby the regulators) and complaint logs of CAM and newspaper/media clippings of adverse comments orincidents in relation to CAM. CAM will also alert us on any exceptional incident reported in the mediawhich relates to CAM.

Our Directors have confirmed that there has been no occasion where any Consultants’ breachesof relevant rules and regulations in their capacity as representatives of CAM or using the Trademarksand corresponding sanctions against them by the relevant regulatory authorities have caused anymaterial adverse impacts on our Group’s and CAM’s business operation, financial position andreputation during the Track Record Period and up to the Latest Practicable Date. In addition, each ofCFG and CAM has jointly and severally agreed that it will indemnify and at all times keep all and eachof the members of our Group fully indemnified on demand against all losses, costs (including all legalcosts), expenses, penalties or other liabilities which any of the members of our Group may incur inconnection with or sustain from any complaints, claims or proceedings lodged by any person inrelation to the business undertaken or carried on by CFG and/or CAM. We will after the Listingdisclose in our annual reports any material adverse findings of the internal control reports, compliancerecords and breach of rules and regulations of our Group and the Consultants engaged by CAM andsuch other matter of the internal control reports that, in the opinion of our Board, needs to be broughtto the attention of our Shareholders.

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OUR BUSINESS STRATEGIES

The corporate mission of our Group is to establish the largest distribution network of insuranceproducts and MPF schemes with general recognition of being independent, professional and valueadding to general public in Hong Kong.

Having considered the market potential of the insurance and MPF schemes brokerage industryand evaluated our Group’s existing market position and strengths, our Group intends to achieve ourbusiness objectives and further growth through implementing the following strategic plans:

Enhancement of quality of the Consultants

Our Group is committed to enhance the professionalism of the Consultants and has beencontinuously strengthening the training department in order to upgrade and enhance the quality of theConsultants. The Consultants are required to participate in the in-house, tailor-made, job-related andcontinuous training under our Group’s Development Model and to attend other professional andcontinuous training as required by the IA and MPFA to fulfill their respective licences registrationrequirements. In addition, our Group strongly encourages and supports the Consultants to obtaininternationally recognised qualifications, such as CFP. Our Group also from time to time recruitsquality candidates to join the teams of Consultants.

Our Group has implemented the following to help enhance the quality of the Consultants:

(i) continuous professional training

Our Group provides basic training to enable a trainee to be a technical representative withPIBA to carry on the business. Also, our Group holds various accredited CPD core credittraining seminars which satisfy the licensing requirements of the IA and the MPFA. After thetrainee is duly registered with the regulatory bodies, our Group continues to provideprofessional training to develop the career of the Consultants in the insurance and MPFadvisory industry. Further details are set out under the paragraph headed “The DevelopmentModel” in this section.

(ii) subsidy on recognised professional qualification courses

In addition to the in-house continuing professional training, our Group recommends allstaff and Consultants to participate in various trainings, both academic and technical, offered byother professional institutions, in order to advance their knowledge in an international context.To support our staff and the Consultants continuous development function, our Group haslaunched an educational sponsorship program whereby our staff and the Consultants will bepartially reimbursed the costs or fees of course upon their successful completion of the course.

(iii) recruitment of Consultants from other professions and countries

Our Group aims to recruit the Consultants from other professions and locations. Otherprofessions may include investment advisers and those in accounting fields. Our Group recruitsConsultants from the PRC to conduct the business in Hong Kong. Our Directors believe that(a) these professionals have received specialised training in their respective professions andusually have basic knowledge on ILAS; and (b) the Consultants come from different locationscan enhance international exposure in the Consultants and then strengthen the advisory

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capability of the Consultants with stronger international insight. More importantly, theprofessions and Consultants from other locations may have their own customer base that ourGroup may contact which can enrich the customer mix and increase business opportunities ofour Group.

Expansion of the size of the teams of the Consultants

Our Group continues to leverage on the strengths to boost the growth of the teams ofConsultants through:

(i) organic growth using the Development Model;

(ii) recruitment of insurance brokers from different market sectors and other countries; and

(iii) growth by acquisition of other industry players.

Expansion and promotion of ILAS, MPF schemes and other insurance business

Our Directors are of the view that there is market potential for growth in the ILAS business.Therefore our Group will continue to source a variety of ILAS and to inject further resources toimprove our promotional efforts and to strengthen our relationship with ILAS Providers.

In view of the coming fundamental change in MPF transfer policy in Hong Kong expected tobe made by the government in or around 2011 as mentioned under the paragraph headed “MPFbusiness” in the section headed “Industry overview” in this prospectus, our Directors believe that ourGroup has a strong competitive advantage in MPF business with (i) our large teams of Consultantswhich can provide independent, professional and personalised services to general employees in HongKong; and (ii) our large individual customer base.

To procure successful expansion, our Group is encouraging the Consultants to obtain therelevant licences for MPF business and providing specific training courses. In the meantime, our Groupcontinues to source competitive MPF schemes and strengthen relationship with MPF Providers. OurGroup will input additional resources and supports to expand MPF business in near future.

Furthermore, our Directors consider that brokerage channels for distribution of other insuranceproducts would play more important role in Hong Kong in future and such insurance products havesustainable growth in Hong Kong. Details of its recent performance are set out in the section headed“Industry overview” in this prospectus. Being one of the largest insurance brokers in Hong Kong, ourGroup aims to encourage the Product Issuers to develop brokerage channels for distribution of otherinsurance products by specifically strengthen its business development effort in distribution of otherinsurance products. Our Group has established business relationship with various general and longterm Products Issuers. The Consultants have equipped with relevant insurance brokerage licences fordistribution and arrangement of relevant contracts of insurance in Hong Kong. Details of licensingsituation of the Consultants are set out in the section headed “Regulatory framework” in thisprospectus.

Our Group has no current plan to engage in any regulated activities under the SFO and directinvestment business.

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Exploration of merger and acquisition opportunities and business collaboration with well-established companies

We will pursue merger and acquisition opportunities continuously within the insurancebrokerage industry in Hong Kong in order to further expand our business. Our Directors consider thatthey maintain good relationships with other key players in the insurance and MPF schemes brokerageindustry and have had access to up-to-date information regarding potential targets. We will seek targetsthat have the potential to strengthen our teams of Consultants and complement our existing sales anddistribution network or our business model. We believe that successful acquisitions will bringsynergies to our Group and enhance our Company’s value to our Shareholders. There was no targetidentified and no definitive agreement had been entered into as at the Latest Practicable Date.

Our Directors believe that there are a lot of opportunities to boost the business of our Group byway of business collaboration with well-established companies. For instance, our Group has recentlyestablished business collaboration with a well-known mortgage referral service provider for mortgagereferral business. Given the similarity in the needs of customers of mortgage arrangement and ourproducts, our Directors consider that by collaboration for mortgage referral business, CFS is able toexplore a potential gateway to customers that will likely be interested in the insurance and MPFschemes brokerage services and represents a good opportunity for our Group to promote our businessand expand our customer base. For instance, customers who have recently purchased properties mayhave insurance needs to cover property-related risk, and some of them may have recently be married orgiven birth and may need to formulate financial plans through ILAS or other insurance products.Besides, existing customers may also be interested in mortgage-related matters. This will helpenhancing our relationship with existing clients and lead to opportunities for new clients. Our Directorshave confirmed that none of the connected persons is involved in the aforesaid business collaboration.

Our Directors also believe that such collaboration would increase visibility of the brand of ourGroup in other industries and enhance the confidence of our customers in our Group and possibilitiesof business solicitation.

Addition and extension of further services and distribution channels

(i) On-line services and value adding applications to the customers and the Consultants

Our Directors understand that on-line channel for the customers are increasingly importantand popular in enhancing the competitiveness of our Group in the market. Thus, our Group hasplanned to strengthen application of our Group’s website and develop a comprehensiveinformation management systems and platform in several stages in coming years on whichcustomers and the Consultants can perform various functions and applications.

Having this new system and more powerful website in place, our Directors believe that therelationship among customers, Consultants and our Group would be much closer and thusbusiness opportunities and services would increase to a great extent. In addition, the responseof our Group to market change would be much faster with such comprehensive systems tosupport numerous management decision, communicate closely and timely with customers, andexecute timely and accurately our Group’s decision.

(ii) E-marketing and direct-marketing

With the maturity of the overall systems and on-line applications, our Group aims toempower e-marketing and direct-marketing to enhance efficiency for distribution of standard

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and general insurance products and MPF schemes in addition to face-to-face marketing channelof the Consultants. Such auxiliary channel may be tailor-made to accept the Consultants’specific requirement in bid to provide personalised services to the Consultants and customers.

ORGANISATION STRUCTURE OF CFS

Internal

audit

function

Chief distribution officer

Consultancy

development

department

Consultancy

administration

department

Training

department

Chief commercial officer

Client

servicing

department

Information

technology

department

Chief operation officer

Administration

department

Corporate

communications

department

Product

department

Human

resources

department

Board of directors

Chief executive officer

Executive

management

office

Chief

strategic

officer

Chief financial officer

Customer

experience

department

Procurement

department

Legal and

compliance

department

Company

secretary

department

Finance and

accounts

department

Systemdevelopment

andmanagementdepartment

Business

processing

department

Businessintelligence

and reportingdepartment

Administration department

The administration department is primarily responsible for providing administrative supportand office management to our Group. As at the Latest Practicable Date, there were 14 staff in thisdepartment.

Business intelligence and reporting department

Business intelligence and reporting department supports our Group in the perspective ofproviding management reports, data mining and vendors management for system deliverable. As at theLatest Practicable Date, there were four staff in this department.

Business processing department

Business processing department supports our Group in the perspective of executing andprocessing new business applications. As at the Latest Practicable Date, there were seven staff in thisdepartment.

Client servicing department

Client servicing department is responsible for supporting our Group in the perspective ofservicing customers’ enquiries to both Consultants and our customers. As at the Latest PracticableDate, there were seven staff in this department. It is headed by a staff member of senior manager gradewho has obtained the degree of Master of Business Administration and has passed the Insurance

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Intermediaries Qualifying Examination (for principles and practice of insurance, long term insuranceand general insurance) as well as MPF Intermediaries Examination.

Company secretary department

The company secretary department is responsible for supporting our Group’s documentationand secretarial matters. As at the Latest Practicable Date, there was one staff in this department.

Consultancy administration department

The consultancy administration department supports our Group in the perspective of keepingtrack of licensing requirements and documentation and providing administrative support of humanresources services for our Consultants. As at the Latest Practicable Date, there were 40 staff in thisdepartment.

It is headed by a staff member of senior manager grade, who has obtained the degree of Masterof Science in Training and Human Resource Management, awarded the title of Life UnderwriterTraining Council Fellow by The American College and the Underwriters Association Hong Kong Ltd.and has completed Level 1 (Insurance fundamentals: life, annuities, and health) of Life OfficeManagement Association Financial Services Education. He has also passed the InsuranceIntermediaries Qualifying Examination (for investment-linked long term insurance and generalinsurance).

Consultancy development department

The consultancy development department supports our Group in the perspective ofcoordination of matters in relation to the Consultants and recruitment of and designing incentiveprograms for the Consultants. As at the Latest Practicable Date, there were three staff in thisdepartment.

Corporate communications department

Corporate communications department supports our Group in the perspective of promotingbrand, arranging marketing activities and communicating with mass media. As at the Latest PracticableDate, there were three staff in this department.

Customer experience department

The customer experience department is primarily responsible for facilitating good experience tocustomers when they lodge complaints with our Group and also investigating such complaints. As atthe Latest Practicable Date, there was one staff in this department.

Executive management office

The executive management office is primarily responsible for providing secretarial support toour Directors and senior management of our Group. As at the Latest Practicable Date, there were twostaff in this department.

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Finance and accounts department

The finance and accounts department supports our Group in the perspective of recordingaccounts, performing financial analysis, controlling budget, processing commission, arrangingcorporate finance and executing investment decisions. As at the Latest Practicable Date, there were 10staff in this department.

Human resources department

The human resources department is primarily responsible for providing the functions ofrecruitment and selection, performance management, compensation and benefits, training anddevelopment and employee relations for our internal staff. As at the Latest Practicable Date, there werefour staff in this department.

Information technology department

The information technology department is primarily responsible for the perspective of ITinfrastructure, network communication, system operation and server maintenance to our Group. As atthe Latest Practicable Date, there were eight staff in this department.

Legal and compliance department

The legal and compliance department supports our Group in the perspective of monitoring andimplementing compliance policies, overseeing legal and regulatory matters and monitoring internalmanagement procedures. As at the Latest Practicable Date, there were four staff in this department. Itis headed by a Hong Kong-qualified solicitor, who has obtained the degree of Bachelor of Laws inDecember 1997, and the Postgraduate Certificate in Laws in June 1999 and practised as a solicitor inHong Kong since September 2001. The staff members of the Department also include a manager whopreviously served as chief administrative executive of PIBA from February 2005 to July 2007,obtained a graduate diploma of insurance and is recognised as a Certified Insurance Professional andFellow by the Australian and New Zealand Institute of Insurance and Finance.

Procurement department

The procurement department supports and controls our Group in the perspective of purchasingoffice supplies, services and equipment. As at the Latest Practicable Date, there were two staff in thisdepartment.

Product department

The product department supports our Group in the perspective of controlling and sourcingproducts for distribution, evaluating product features, providing product knowledge support to theConsultants and liaising with the Product Issuers of our Group. As at the Latest Practicable Date, therewere four staff in this department.

System development and management department

The system development and management department is primarily responsible for providingsystem design and system development projects as well as providing program supports to our Group.As at the Latest Practicable Date, there were four staff in this department.

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Training department

The training department is primarily responsible for arranging and providing CPD and generaltraining to the Consultants. As at the Latest Practicable Date, there were three staff in this department.

CONSULTANTS

As at the Latest Practicable Date, the Consultants comprises 18 main teams and the heads ofeach team is responsible for managing his/her own team members, recruitment, team-basedpromotional events and team culture.

From CFS’s perspective, the chief distribution officer of CFS (“CDO”), Mr. Shin Kin Man, isresponsible for managing our relationships with the teams of Consultants, communicating the overallsales and marketing strategies of our Group to the Consultants and obtaining feedback from them. Thethree CFS departments managed by the CDO, namely, the consultancy administration department, theconsultancy development department and the training department, are responsible for various supportfunctions to the Consultants as described under the paragraph headed “Organisation structure of CFS”above in this section.

The legal and compliance department is responsible for managing and enforcing the regulatoryand compliance framework for the Consultants.

SALES AND MARKETING

Our Group had performed and organised the internal and external sales and marketing activitiesthrough the corporate communication department and the consultancy development department of ourGroup, an independent public relation firm and the Consultants. Our Directors believe that thecombination of internal and external parties will help our Group to perform and organise the sales andmarketing activities more effectively. Our internal marketing activities mainly represent sales incentiveand promotional events offered to the Consultants. Our external marketing activities mainly representcorporate marketing documents, advertising and corporate marketing campaigns such as talks,seminars, etc.

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Internal marketing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,736 5,552 7,289External marketing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,787 14,626 4,147

17,523 20,178 11,436

As at 31 December 2009, individual customers accounted for more than 99% of new generatedbusiness, while the corporate customers accounted for the remaining. In accordance with our Group’sinternal statistics, the percentage of new business sourced from direct marketing, referrals andrecurring of existing customers are summarised as below.

Year ended 31 December

2007 2008 2009

Direct marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.9% 19.4% 18.3%Referrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.9% 46.3% 47.4%Recurring of existing customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.2% 34.3% 34.3%

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As illustrated above, referrals and recurring of existing customers have been the maindistribution channels of our Group over the past three years, which our Directors believe is anindication of a strong loyalty of our customers, being one of the key competitive advantages of ourGroup.

Sales and distribution channels

The sales and marketing channels of the Consultants include seminars, exhibitions, andsurveys. The client servicing department of our Group provides follow-up and administrative work. Asat the Latest Practicable Date, there were 1,023 Consultants, including 13 deputy directors, one vicepresident, 117 associate directors, five assistant vice presidents, 130 assistant associate directors, 227chief wealth management advisors, five principal consultants, 31 senior consultants, 205 senior wealthmanagement advisors, 166 consultants, 98 wealth management advisors and 25 licensed trainees. TheConsultants are divided into teams. Each deputy director, associate director and assistant associatedirector has his/her own team and team management. Mr. Shin Kin Man, the chief distribution officerof CFS, is responsible for the overall management of the Consultants. Our Group intends to developthe Consultants into a professional, young, energetic, well-educated and well-trained marketing team.As at the Latest Practicable Date, more than 95.2% of the team members had received tertiaryeducation or above.

Since the Consultants are the major income provider of our Group, their productivity is crucialto the success of our Group. The productivity may be considered in terms of quality of serviceprovided and quantity of business volume generated. In order to continuously enhance the productivityof the Consultants, our Group has established the consultancy development department, theconsultancy administration department, the product department and the corporate operation divisionwhich are primarily responsible for the provision of full support to the Consultants, so as to allow theConsultants to carry out their duties more effectively and efficiently.

Promotion

Our Group conducts a lot of promotional activities from time to time, including participating inpublic seminars, advertising on television, magazines and newspapers and publishing a free quarterlymagazine “Independent Edge”.

In addition to the recurring promotional activities, our Directors promote our Group in variousoccasions, such as actively participating in the public or private events of various professionals andcharity organisations. These indirect types of promotion are particularly important for building ourcorporate image. Such promotions have been recognised by external parties with numerous awards.Details of awards and recognitions are listed under the paragraph headed “Major awards andrecognitions” in this section.

Furthermore, our Group is planning to establish alliances with organisations or companieswhose customers may become potential customers of our Group.

With the Listing, our Directors consider that it is another breakthrough in promoting our Groupto the general public. Our Directors also believe that the Listing will be definitely conducive to thefurther enhancement of our Group’s image and our onward development in the insurance and MPFschemes brokerage market in the future.

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Individual teams of the Consultants have their marketing events, such as joining exhibitions,road shows and launching seminars. In addition, individual team conducts its own activities to supportits marketing functions.

After-sale services

After-sale services are performed by the Consultants and the client servicing department of ourGroup.

After-sale services are important to our Group as firstly, in accordance with our internalstatistics, about 82% new business is generated or referred by the existing customers in 2009 andsecondly, the corporate image can be firmly established in the customers’ minds. Thus, after-saleservices play a significant role in the future development of our Group.

As such, our Group has installed and been continuously enhancing the customer relationshipmanagement (the “CRM”) system with a view to strengthening our relationship with customers.

Our CRM system keeps track of all customers information and their corresponding portfolioinformation as well as any service request launched by them. Through the web interface of our CRMsystem, Consultants and our customers can view their portfolios, valuation report and personal details.Consultants can also conveniently access the CRM system through our Group’s intranet portal toensure prompt response to our customers’ requests or enquiries.

We have also established a customer experience department to handle any enquiries orcomplaints from our customers via telephone calls or e-mails.

Product due diligence and product research

The product department of our Group conducts due diligence on new products arranged by ourGroup. They prepare due diligence reports and/or gather relevant information, and other relevantmaterials regarding products offered by the Product Issuers through our Group and the Consultants forproduct marketing and analysis. Further, product department also researches into features of differentproducts and issues reports on products comparison for the benefits of Consultants.

Our Directors consider that quality function of product due diligence and product researchenhances not only the business of our Group, but also the professional image of our Group to potentialcustomers as well as existing customers.

OUR CUSTOMERS

Our customers are policyholders whom the Consultants provide services to. Our Directorsbelieve that it is the industry norm that the independent insurance brokers treat the policyholders astheir customers. Our Group primarily provides advices to our customers through the Consultants as tothe selection of suitable insurance products and/or MPF schemes which are provided by the ProductIssuers to assist customers to achieve their needs. As an insurance broker, our Group is required underthe ICO to act for the interest of policyholders and potential policyholders. Through provision ofrelevant advices, our Group is entitled to receive brokerage commission income from Product Issuersfor business referrals and introductions as a result of arrangement of insurance products and/or MPFschemes to customers. Moreover, our Directors believe that it is the industry norm that commission is

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paid by the Product Issuers to the brokers. From another point of view, the customers pay suchcommission to our Group indirectly as all such costs would be eventually deducted from thecustomers’ contribution. Although Product Issuers are not treated as customers by our Group, weactually recorded accounts receivable and bear credit risk from the Product Issuers rather than thepolicyholders.

Our Directors have confirmed that, the five largest customers of our Group combined did notaccount for more than 2.5% of the total revenue of our Group in each of the three years ended31 December 2007, 2008 and 2009.

The majority of the locations of the customers of our Group are in Hong Kong, whichaccounted for approximately 98.2% of total number of customers as at 31 December 2009, while theremaining insignificant portions come from all over the world including, but not limited to, expatriatesworking in Hong Kong and customers travelling to Hong Kong. All contracts with our customers wereexecuted in Hong Kong.

Our Directors do not consider that the Hong Kong insurance market (especially for ILAS) andMPF market are saturated. Rather, such markets are considered to have potential in view of thefollowing: (i) that the office premiums for non-investment-linked business in Hong Kong maintainedcontinuous growth of approximately 5.0%, 7.4%, 9.2% and 10.7% for the four years ended 31December 2006, 2007, 2008 and 2009; (ii) that the office premiums for investment-linked businessgrew at about 15.7% for the year ended 31 December 2009, recovering from a decline of 22.8% for theyear ended 31 December 2008; (iii) that the new ILAS business in Hong Kong recorded a CAGR ofapproximately 34.6% from 2004 to 2008; (iv) that ILAS gained popularity over the past yearsconsidering the increasing demand of Hong Kong customers for higher returns on the insurancepolicies; and (v) increasing familiarity of Hong Kong customers to investment funds especially as morepeople become more concerned about maintenance of quality of living after retirement. For details,please refer to the section headed “Industry overview” in this prospectus. Details of our businessstrategies to achieve our business objectives and further growth are disclosed under the paragraphheaded “Our business strategies” in this section.

Our Group does not engage and has no intention of engaging in any selling activities in thePRC. The Controlling Shareholders will establish the insurance brokerage business in the PRC, detailsof which are set out under the paragraph headed “Background of the Controlling Shareholders” in thesection headed “Relationship with the Controlling Shareholders and connected transactions” in thisprospectus. For the year ended 31 December 2009, only approximately 1.1% of customers of ourGroup came from the PRC. Considering the market potential in the insurance industry in Hong Kong,our Group considers customers from the PRC are only supplemental to our Group’s business and nospecific strategy is formulated to solicit new customers from the PRC. There exists stringent controlwhereby independent staff of CFS will ensure that there is documentary proof of entrance to HongKong by such PRC customers (such as entry records shown in such customers’ entry permits) beforeprocessing applications from them. Our Group does not engage in any unauthorised cross-border salesoperation.

Further, similar to other customers, our Group ensures compliance with all relevant laws andregulations in relation to these PRC customers by conducting “know your customer” due diligence andother measures mentioned under the paragraph headed “Long established and comprehensive internalcontrol system” in this section, and in relation to anti-money laundering, CFS requires that paymentsfor contribution by all customers including these PRC customers will only come through established

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banking system with accounts opened in the name of the customers with cheques, telegraph transfersor credit cards. Cash payments from our customers will not be accepted by our Group. These paymentsare paid to the relevant Product Issuers directly. Our Directors are aware of and confirm that our Groupcomplies with all relevant rules and regulations, including the anti-money laundering regulations.

The table below shows the information of our Group as at 31 December 2009 as regards thepercentage of the customers of our Group and their profile in terms of age and sex.

Age

% ofcustomers ofa particular

range ofages overthe totalnumber

of customers

% of maleof a

particularrange ofages overthe totalnumber

of customers

% of femaleof a

particularrange ofages overthe totalnumber

of customers

% ofcustomers ofa particular

range of agessubscribing

Regular-savings

ILAS overthe total

number ofcustomers of

thatparticular

range of ages

% ofcustomers ofa particular

range of agessubscribingLump-sum

savingsILAS overthe total

number ofcustomers of

thatparticular

range of ages

% ofcustomers ofa particular

range ofages

subscribingMPF

schemesover the

totalnumber of

customers ofthat

particularrange of

ages

% ofcustomers ofa particular

range of agessubscribing

otherinsuranceproductsover the

total numberof customers

of thatparticular

range of ages

Corporate client . . 1% 14% 0% 85% 1%20 to < 25 . . . . . . . 5% 56% 44% 87% 0% 9% 4%25 to < 30 . . . . . . . 21% 54% 46% 88% 1% 7% 4%30 to < 35 . . . . . . . 22% 52% 48% 87% 3% 7% 3%35 to < 40 . . . . . . . 17% 51% 49% 86% 6% 5% 3%40 to < 45 . . . . . . . 13% 52% 48% 85% 8% 5% 2%45 to < 50 . . . . . . . 10% 55% 45% 84% 10% 4% 2%50 to < 55 . . . . . . . 6% 54% 46% 82% 13% 4% 1%55 to < 60 . . . . . . . 3% 50% 50% 76% 18% 5% 1%60 or above . . . . . . 2% 53% 47% 60% 34% 3% 3%% of total number

of customers . . . 100% 53% 47% 85% 6% 6% 3%Total number of

customers . . . . . 46,358

Our Directors have confirmed that the work flow undertaken by each Consultant to ensure thatcustomers purchase ILAS which are suitable for them and consistent with their requirements and riskappetite includes the following typical steps:-

(i) Every new application must be accompanied by a Needs Analysis Form signed by thecustomer.

(ii) The “Financial Planning Analysis” in Needs Analysis Form must expressly containreasonable analysis by Consultants of the customer’s needs under these headings:“Objective”, “Affordability” and “Age”.

(iii) By going through the Suitability Questionnaire signed by the customer contained in theNeeds Analysis Form, the customer can understand his/her risk profile. Consultants mustensure that the risk level of the products match with the customer’s risk profile.

(iv) Should there be mis-match of customer’s choice and Consultants’ advice or mis-match ofrisk profile, there will need to be a declaration by the customer that the customer choosesnot to follow Consultants’ advice and/or to proceed with a mis-matched risk profile.

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(v) Further, every new customer must sign a form of Applicant’s Declarations to confirm theirunderstanding and acceptance of the highlighted features of the product.

Our Directors have confirmed that no extra liabilities arise with our Group in addition to theusual liabilities which an insurance broker is subject to such as failure to comply with the codes ofconduct of PIBA and/or MPFA, as a result of customers’ signing of the aforementioned forms.

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The following diagram illustrates the key steps in a typical selling process of CFS in respect ofILAS:

The Consultants are required to ensure the particular ILAS would suit the customer’s risk profile, objectives,

affordability and age features of the particular ILAS. The customer then sign the application documents.

Application documentations are

handed over to independent

staff for checking.

Consultants’ licence status is

checked by independent staff.

A customer has requested for or indicated an interest in ILAS.

When a customer requests for or is interested in ILAS, the Consultants will indicate that they act for CFS and they are

licensed with PIBA.

The Consultants are required to explain to the customer product features of ILAS, ensure the completion of collecting

customers’ information and “know your customer” process including completing the Needs Analysis Form, and help

the customer to complete application documents including suitability questionnaire and applicant’s declaration form.

Without inconsistency

Pass

Application to be processed.

(Note 1)

Product Issuers to issue

policy. (Note 1)

The Consultants are required to obtain

the customer’s written explanation and

confirmatory instructions that he/she

is aware of and understands such

inconsistencies and decides to

proceed with the application.

With inconsistency

Telephone service interview is

conducted by independent staff to

ensure the customer’s understanding

of key features of the ILAS.

The independent staff will also remind

the customer that CFS is arranging

for ILAS and CFS is a corporate

member of PIBA.

Confirmatory instructions obtained

Properly

licensedNo licence

Application

shall be rejected.

Pass

No confirmatory instructions

Application

shall be rejected.

Notes:(1) The customer has cooling-off rights to cancel the application. Please refer to the paragraph headed “Development of ILAS in Hong

Kong” in the section headed “Industry overview” in this prospectus.

(2) For other products such as those offered by CAM, when a customer requests for or needs products that a particular Consultant is notlicensed for, that particular Consultant will cease to serve that customer, and our Directors believe that such customer will be transferredand served by other Consultants with proper licences.

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MAJOR AWARDS AND RECOGNITIONS

Since our establishment, we and the Consultants have received a number of charity, industrialand professional awards as a recognition of our achievement and endeavour for great accomplishment.Some of our major awards include:

Year awarded Major awards

2009 “Best Employers in Hong Kong 2009” by Hewitt Associates in partnership with SouthChina Morning Post and “Best Employers in Asia 2009” by Hewitt Associates inpartnership with the Wall Street Journal Asia.

Ms. Fong, the chief executive officer of CFS was honored as “Benchmark MostExtraordinary Women in Finance 2009” by Benchmark magazine

“Hong Kong’s Best Company for Financial Planning Excellence (Independent FinancialAdvisory industry sector)” for the third consecutive year by South China Morning Postand IFPHK

2008 “Hong Kong’s Best Company for Financial Planning Excellence (Independent FinancialAdvisory industry sector)” for the second consecutive year by South China Morning Postand IFPHK

“Hong Kong’s Most Valuable Companies 2008” by Mediazone Limited

“Brand-with-a-Conscience Certificate with Merit” awarded by Hong Kong Institute ofMarketing

“5 Years Plus Caring Company Logo” by The Hong Kong Council of Social Service

2007 “Hong Kong’s Best Company for Financial Planning Excellence (Independent FinancialAdvisory industry sector)” by South China Morning Post IFPHK

“Best Employers in Hong Kong 2007” by Hewitt Associates in partnership with SouthChina Morning Post

“5 Consecutive Years Caring Company Logo” (2002-2007) by The Hong Kong Councilof Social Service

SUMMARY OF INVESTIGATION AND COMPLIANCE ISSUES

Complaint handling procedures of our Group

Complaints are generally classified by our Group as internal or external according to theirnature. A customer may lodge a compliant (i) by telephone; (ii) in person; (iii) by post or by e-mail; or(iv) through media (our Directors have confirmed that our Group has never received complaint throughthis channel). Our Group sets out various handling procedures for each of the respective means ofcomplaint.

For general complaints, which are defined under the complaint handling manual as complaintsnot consisting of any fraud, offence against the rules and laws of regulatory bodies and/or causing

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damages to the image of our Group, are handled by the customers experience officer. The customersexperience officer would conduct investigations and initiate follow-up work in accordance with themanual. Our Directors have confirmed that handling of the general complaints is usually completedwithin 14 working days from the date of receiving the complaint.

In the event that complaint cases arising from Consultants’ misconducts when representingCAM are raised to CFS staff, CFS will refer such cases to CAM’s customer service staff for theirfurther handling. CFS has also issued a directive to remind its staff the aforesaid referral procedure.Our Directors have confirmed that, to the best of their knowledge and belief, CAM’s complainthandling procedure is in line with the SFC’s Code of Conduct. In addition, each of CFG and CAM hasjointly and severally agreed that it will indemnify and at all times keep all and each of the members ofour Group fully indemnified on demand against all losses, costs (including all legal costs), expenses,penalties or other liabilities which any of the members of our Group may incur in connection with orsustain from any complaints, claims or proceedings lodged by any person in relation to the businessundertaken or carried on by CFG and/or CAM.

For serious complaints, which are defined under the complaint handling manual as complaintsother than general complaints, are handled by the compliance officer. The compliance officer wouldinvestigate and evaluate the impact of the complaints and make appropriate actions accordingly. OurGroup received 27, 21 and 16 such complaints against the Consultants for the three years ended 31December 2007, 2008 and 2009 respectively, which are mainly related to potential mis-selling andunsatisfactory service standards of the Consultants. There was only one complaint against our Group,which was received in the year ended 31 December 2007, during the Track Record Period. Thecomplaint is relating to possible errors occurring in switching of underlying funds of ILAS conductedby the relevant Product Issuer, regarding which CFS received no further enquiry after responding to thesame in April 2007. Our Directors have confirmed that there were no complaints that had resulted inthe payment of compensation by our Group to our customers during the Track Record Period (save thatin 2007 CFS offered HK$6,500 to one customer on a non-admission of liability basis in relation to thecustomer’s complaint where CFS had not obtained reimbursement from the Consultant given therelatively insignificant size of compensation) and there is no outstanding complaints that are expectedto have a material impact on our Group’s results, financial position and reputation.

Investigations and compliance issues

Our Group’s operations are subject to relevant laws, rules and regulations in Hong Kongconcerning insurance intermediaries. Such laws, rules or regulations are subject to changes from timeto time. Notwithstanding our Group’s formulation and implementation of compliance guidelines andinternal control measures, there may exist weaknesses in the acts of our Directors and/or staff, whichmay subject themselves and/or the relevant members of our Group to investigations by the relevantauthorities and/or disciplinary actions. The following, to the best knowledge of our Directors,summarises all the material investigations conducted by the relevant authorities against ourConsultants by the regulatory authorities up to the Latest Practicable Date. Our Directors believe thatactions taken by the SFC or PIBA as disclosed below would not adversely affect the financial position,business and operation of our Group.

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Suspected contravention of Section 50 and/or Section 74 of the Securities Ordinance (repealed)by persons purporting to market securities

The SFC issued a warning letter on 28 February 2003 to CFS ( the “Letter”) which states thatthe SFC had conducted investigations, during or around August 2002, into suspected contravention ofSection 50 and/or Section 74 of the Securities Ordinance (repealed) by persons purporting to marketsecurities and the SFC, and having considered all the circumstances of the case, decided to do no morethan issue the Letter.

As stated in the Letter, the investigations conducted by the SFC revealed, inter alia, that:

(i) a marketing staff of CFS had as a result of unsolicited telephone calls discussed in generalterms the possibility of investments in various instruments that could be categorised assecurities; and

(ii) CFS did not appear to have established a clear written policy stipulating that thetelemarketing staff can only market insurance products through unsolicited telephone callsor visits.

As stated in the Letter, CFS was warned by the SFC that, inter alia, it should establish writtenpolicies stipulating that all the staff, including both the Consultants and telemarketers, should notmarket securities and/or investment-related services through unsolicited calls or visits.

The SFC having considered the circumstances of the above cases, had decided to do no morethan to issue the Letter. Since this incident, our Group has taken stringent measures to monitor andsupervise the activities of the Consultants and to ensure that the Consultants observe our Group’swritten policies and/or SFC’s rules and regulations at all times.

Pursuant to the SFC Circular, units in ILAS are not securities; any advice that might be given toa policyholder concerning the selection of underlying funds of ILAS is not advice on securities; andpromoting, offering or selling ILAS does not constitute dealing in securities. Therefore, our Directorsconsider that our Group does not market any securities to our customers. Notwithstanding the above,our Group has since then established written policies stipulating that all the Consultants should notmarket securities and/or investment-related services through unsolicited calls or visits. The legal andcompliance department of our Group conducts random checkings to ensure compliance of such writtenpolicies by all the Consultants.

As our Group is regulated by the PIBA (for activities conducted by CFS), relevant complianceprocedures are implemented. Upon receiving the Letter, in order to avoid the happening of similarincidence in the future, our Group has seriously requested all staff and the Consultants to strictlyfollow the requirements as set out in the written policies through both notices by e-mails and meetings.

Litigation and claims brought against CFS and CAM

In relation to litigation and claims brought against CFS, there were one and four cases broughtagainst CFS in the Small Claim Tribunal in 2002 and 2007 respectively involving allegations of mis-selling of ILAS by Consultants. CFS won all these cases in the sense that the case in 2002 wasdismissed in the same year and the cases in 2007 were dismissed in 2008. Further, there was one casebrought against CFS in the Kwun Tong Magistrate’s Court in 2008 involving allegation of possiblebreach of Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) by CFS. CFS

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also won the case in the sense that it was also dismissed in 2008. As at the Latest Practicable Date,CFS was not subject to any liability or follow up action in relation to each of the aforementioned cases.CFS was not subject to other litigation and claims since incorporation and up to the Latest PracticableDate. CAM faced with no litigation or claim since incorporation and up to the Latest Practicable Date.Furthermore, there was no outstanding claim or litigation against CFS or CAM as at the LatestPracticable Date.

Internal and external disciplinary actions on the Consultants

Our Directors confirm that there were two cases of complaints (opened in May 2008 andDecember 2009 respectively) which resulted in CFS terminating the contractual relationship with twoConsultants during the Track Record Period. The complaints of these cases mainly related to thecomplainants’ allegations as to how the relevant Consultants handled their contributions to the ProductIssuers. Our Directors considered that the relevant Consultants failed to comply with CFS’s internalcode, rules and procedures and subsequently their contractual relationships with CFS were terminated.Our Directors have confirmed that these cases have not led to any disciplinary action from anyauthorities against the relevant Consultants involved and/or CFS.

Further, in 2009, a resigned Consultant was disciplined by PIBA because PIBA considered hissale method and acts relating to information for clients problematic. The resigned Consultant’ licencewith PIBA was suspended for three months. The Consultant did not lodge an appeal. Our Directorshave confirmed that this case has not led to any disciplinary action from any authorities against CFS.

In addition, the SFC issued a reprimand to each of two Consultants, and fined each of themHK$30,000 in April 2007. As announced by the SFC in its enforcement notices, the said Consultants,being licensed representatives to carry out type 4 (advising on securities) regulated activity under SFOand accredited to CAM and also being accredited to CFS which is not licensed with SFC, whilst actingfor CFS, failed to, inter alia, be conversant with risks associated with investment product, adequatelyexplain to clients all the material down side risks and sufficiently ensure suitability of investmentproduct. CAM and CFS imposed certain internal sanctions on the said Consultants as a result of thisincident but did not terminate their contracts for services with CAM or CFS. As at the LatestPracticable Date, the said Consultants remained Consultants and licensed by both SFC (accredited toCAM) and PIBA (accredited to CFS).

Save for aforesaid, our Directors have confirmed that up to and including the Latest PracticableDate, (i) our Group had not been subject to any investigation and had not received any disciplinaryaction including warning letters, from any of the relevant authorities of licensing against our Group;(ii) our Group complied with all relevant laws, rules and regulations in Hong Kong concerning theinsurance and MPF schemes brokerage business carried on by our Group in Hong Kong during theTrack Record Period; (iii) CFS and all the Consultants had been properly licensed by relevantregulatory bodies when conducting the business since incorporation of CFS; and (iv) neither ourGroup, each of our Directors, the key management personnel of our Group nor the Consultants hadbeen subject to any ongoing disciplinary action or investigation by PIBA, the SFC or other regulatoryauthorities, or refused registration or been censured, disciplined or disqualified by PIBA. We alsoundertake not to appoint as our Consultants any person who has been subject to relevant disciplinaryactions by relevant regulatory authorities and such relevant disciplinary action calls into question his/her fitness and properness and this is also in line with the licensing requirements of PIBA.

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INSURANCE

We maintain proper professional indemnity insurance in compliance with the minimumrequirements for insurance brokers as specified by the IA. In addition, insurance coverage for ourGroup’s operations is in place, which covers risks including loss of damage to property, employees’compensation and business travel loss and accidents. For each of the three years ended 31 December2007, 2008 and 2009, our total insurance expenditures amounted to approximately HK$430,000,HK$761,000 and HK$1.1 million, respectively. Based on the industry practice in Hong Kong and ourexperience in running our business, our Directors believe that amount of insurance coverage isadequate for our Group under our current size of operations and have confirmed that amount ofinsurance coverage meets the IA’s requirements.

INTELLECTUAL PROPERTY RIGHTS

Our Group does not register any intellectual property rights. Our Group entered into a non-exclusive licensing agreement for insurance and MPF business in Hong Kong dated 21 June 2010 withCTL to use the Trademarks registered by CTL, namely , , , and , in HongKong, details of which are set out in the section headed “Relationship with the ControllingShareholders and connected transactions” in this prospectus.

COMPETITION

Competitors

Our Directors are aware that there are competitors providing insurance brokerage services withdifferent scales of operation. Our Directors believe that our Group’s major competitors providinginsurance brokerage services in Hong Kong are private companies and no public information aboutthese competitors is available. However, according to the registration information extracted from theregisters of PIBA and HKCIB as at 30 April 2010, being the latest practicable date for ascertaining theregistration information from HKCIB, our Group was the largest in terms of the number of consultantslicensed to market ILAS. As at 30 April 2010, there were 11 companies (including our Group) havingmore than 100 consultants licensed to market ILAS and 371 companies (approximately 97.1% of thetotal number of companies) having not more than 100 consultants licensed to market ILAS. Statisticsabout the number of consultants licensed to market ILAS are disclosed under the paragraph headed“Our competitive advantages” above in this section. Certain banks and insurance companies may alsooffer ILAS to their customers and some of which are public companies. However, our Directors are notaware that they act as insurance brokers in so doing or they treat ILAS as their principal line ofbusiness. Therefore, they are not considered as direct competitors of our Group as other insurancebrokers.

Our Directors believe that our Group is one of a few companies in the insurance brokerageindustry that providing (i) full time professional training under the Development Model (for the detailsof the Development Model, please refer to the paragraph headed “Our competitive advantages” abovein this section) to the Consultants; and (ii) technical supports to the Consultants through the corporateoperation department, the legal and compliance department, the product department, the consultancydevelopment department and the consultancy administration department of our Group.

Our Directors further believe that our Group has a high brand name recognition in the marketand has an established business relationships with ILAS Issuers and customers, leveraging on whichthe competitive strengths of our Group in the insurance brokerage industry could be enhanced.

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Barrier to entry

It is a statutory requirement that a person intending to act as an insurance broker shall seekauthorization from IA or apply to become a member of a body of insurance brokers approved by IA.Our Directors consider that such a seemingly not too demanding authorisation requirement togetherwith the goodwill built-up by experienced independent insurance brokers over their history ofoperations would create an effective barrier for potential entrants to become a significant player in theinsurance brokerage industry.

Although the above barriers to entry discourage new entrants of insurance broker, our Groupfaces competition from existing banks and insurance companies. Our Group possesses competitivestrengths over its competitors, details of which are set out under the paragraph headed “Ourcompetitive advantages” above in this section.

Competition on qualified personnel

Having established our services as one of the independent insurance brokers providing qualityinsurance brokerage services in Hong Kong, our Group has developed various strategies to retainhuman talent, such as education subsidy and career development counselling.

Experienced management

Our key management, including all our executive Directors, senior management staff andsenior management of the Consultants, have extensive experience in the industry. Hence, they haveestablished and maintained good relationship with customers, ILAS Issuers, insurance companies andother participants in the insurance and MPF schemes brokerage industry.

Our Group has traditionally recorded a very low turnover rate for our senior management andthe Consultants. The simple organisational structure of our Group also facilitates quick response timeon the change of business environment.

Sales and marketing force

Our Group provides various trainings and career development to the Consultants, includingon-job training, mentoring under the Development Model and advice to career development. Also,some senior members of the Consultants hold indirect equity interests in our Group. As such, ourDirectors believe that the Consultants will be more dedicated and loyal to our Group.

Establishment of business relationship with the Product Issuers

Our Group has established good business relationship with the Product Issuers.

In general, the major terms of the broker agreements entered into between CFS and the ProductIssuers (such as ILAS Issuers) include, inter alia, the following:

(i) our Group shall, in the capacity of an independent contractor, introduce business to theProduct Issuers and in return the Product Issuers shall pay commission to our Group at aspecified rate on a regular basis;

(ii) the Product Issuers reserve the rights not to accept the business introduced by our Group;

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(iii) in the event of a Regular-savings ILAS insurance policy being terminated by the relevantcustomer during the indemnified period for commission clawback which generally rangesfrom 6 months to 24 months from the date of execution of the ILAS policy, our Groupshall refund to the Product Issuers the relevant commission which it has received on apro-rata basis, i.e., if a customer terminates his Regular-savings ILAS policy a number ofmonths after the date of execution of his insurance policy and such termination falls withinthe indemnified period, our Group is entitled to retain the commission for a portion of suchnumber of months over the relevant indemnified period and shall refund any excesscommission already received to the Product Issuers. For details of risks on commissionclawback, please refer to the paragraph headed “Commission clawback” above in thissection; and

(iv) the agreements have no expiry date and can be terminated subject to one month’s advancenotice and/or under certain circumstances, for examples:

(a) winding up proceedings being instituted against our Group;

(b) our Group ceases trading;

(c) our Group committing any act of misconduct which, in the opinion of the ProductIssuer, is or likely to be prejudicial to its interest; or

(d) any breach of conditions under the broker agreements.

DETAILS OF COMPETING INTERESTS OF OUR DIRECTORS AND SUBSTANTIALSHAREHOLDERS

Each of our Directors and the Controlling Shareholders has confirmed that he/she/it and his/her/its associates does not have any interests in a business apart from our Group’s business whichcompetes or is likely to compete with our Group upon Listing and after Listing.

Pursuant to the service agreement (the “Directors’ Service Agreement”) entered into betweenour Group and each of the executive Directors, each executive Director has undertaken to ourCompany that he/she will not (whether as a shareholders, director, employee, partner, agent, orotherwise, but excluding the holding by the executive Director of not exceeding 5% of the shares orwarranties in any company the shares of which are listed on a recognised stock exchange) either aloneor in conjunction with any other person directly or indirectly carry on or be engaged in any business oractivity which competes or is likely to compete with the business of any member of our Group in theterritories where any member of our Group carry on its business as long as he/she continues to be aDirector and 12 months after resignation or termination of his/her Director’s Service Agreement.

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CONTROLLING SHAREHOLDERS

Immediately after the completion of the Share Offer, the Controlling Shareholders will controlthe exercise of voting rights of 75% of the Shares eligible to vote in the general meeting of ourCompany. Save and except for their interest in our Company, the Controlling Shareholders did nothave any interest in any other companies as at the Latest Practicable Date which (i) had previously heldany interests in our business during the Track Record Period; and (ii) had ceased to hold such interestsafter the Reorganisation.

Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders hasundertaken to our Company and the Stock Exchange that, save as pursuant to the Share Offer, he/she/itwill not and will procure the relevant registered holders not to:

(i) in the period commencing from the date of this prospectus and ending on the date which issix months from the Listing Date (the “First Six-Month Period”), dispose of, or enter intoany agreement to dispose of or otherwise create any options, rights, interests orencumbrances in respect of, any of the Shares (or any interest therein) in respect of whichhe/she/it is shown in this prospectus to be the beneficial owner; and

(ii) in the period of six months commencing on the date falling the expiration of the First Six-Month Period, dispose of, or enter into any agreement to dispose of or otherwise createany options, rights, interests or encumbrances in respect of, the Shares (or any interesttherein) in respect of which he/she/it is shown in this prospectus to be the beneficial ownerif, immediately following such disposal or upon the exercise or enforcement of suchoptions, rights, interests or encumbrances, he/she/it would cease to be a controllingshareholder of our Company (as defined in the Listing Rules).

Each of the Controlling Shareholders has also undertaken to our Company and the StockExchange that, within the period commencing on the date of this prospectus and ending on the datewhich is 12 months from the Listing Date, he/she/it will:

(i) when he/she/it or the registered owner pledges or charges any securities or interests in thesecurities of our Company beneficially owned by him/her/it, whether directly or indirectly,in favour of an authorised institution pursuant to Note (2) to Rule 10.07(2) of the ListingRules, immediately inform our Company of such pledge or charge together with thenumber of securities so pledged or charged; and

(ii) when he/she/it receives indications, either verbal or written, from any pledgee or chargeethat any of the pledged or charged securities or interests in the securities of our Companywill be disposed of, immediately inform our Company of such indications.

Our Company will inform the Stock Exchange as soon as practicable after we have beeninformed of the matters referred to in (i) or (ii) above by any Controlling Shareholder and disclose suchmatters by way of an announcement in compliance with the Listing Rules.

BACKGROUND OF THE CONTROLLING SHAREHOLDERS

Immediately after completion of the Share Offer, the Controlling Shareholders will holddirectly and indirectly 75% of the total issued share capital in our Company.

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* for identification purpose only

Apart from our Group, the companies in which Convoy Inc and CFG are directly or indirectlyinterested (“Other Companies”) are principally engaged in provision of insurance brokerage servicesin the PRC, money lending and type 1 (dealing in securities), type 2 (dealing in futures contracts),type 4 (advising on securities) and type 9 (asset management) regulated activities under the SFO inHong Kong. Most of the Consultants are also engaged by CAM, a subsidiary of CFG, to carry outtype 1 (dealing in securities) and/or type 4 (advising on securities) regulated activities under the SFO inHong Kong.

Convoy China Financial Services Limited ( ) (“Convoy China”) is acompany incorporated in Hong Kong with limited liability on 4 November 2008 and is owned as to72.83% by Convoy Inc. It was still at the start-up stage with no business operation as at the LatestPracticable Date. It is proposed to engage in insurance brokerage business in the PRC. Opposed to ourGroup which operates solely in Hong Kong, Convoy China has no business operation in Hong Kong,and our Group is not and will not be involved nor participated in any proposed business operation ofConvoy China.

CAM is principally engaged in the sale of non-listed mutual funds. Its investment businesscommenced operation in 2002. Most of the Consultants are also engaged by CAM to carry out type 1(dealing in securities) and/or type 4 (advising on securities) regulated activities under the SFO in HongKong. Currently, CAM also offers discretionary management services but none of the Consultants areengaged by CAM to provide such discretionary management services. As at the Latest PracticableDate, CAM had 290 funds available to its customers and 23 internal staff, and 835 out of 1,023Consultants were also accredited to CAM, which also represent the total number of Consultants whohas also contracted with CAM. For the year ended 31 December 2009, the revenue of CAM amountedto approximately HK$5.7 million representing approximately 1.3% of revenue of CFS for the sameperiod.

CIS is principally engaged in the sale of listed securities such as stocks, futures and options.CIS conducts its business by its own employees and other independent contractors. No Consultant iscontracted with or involved in the business of CIS.

Convoy Collateral Limited ( ) (“CCL”) is a company incorporated in HongKong with limited liability on 2 June 2003 and is wholly-owned by CFG. It is a licensed money lenderin Hong Kong. As at the Latest Practicable Date, CCL was established with a view to providing itsservices mainly to staff of CFS and CAM and the Consultants.

(Shenzhen Sheng Hai Information and Consultation CompanyLimited*) (“Shenzhen Sheng Hai”) is a wholly foreign owned enterprise established in the PRC on29 May 2007 and is an indirect wholly-owned subsidiary of CFG. It is set up for the purpose ofproviding administrative services to the subsidiaries of CFG and therefore it is tantamount to a costcentre of CFG which has no other business but provides administrative services to the subsidiaries ofCFG. Pursuant to an agreement dated 31 December 2007 entered into between Shenzhen Sheng Haiand CCL, Shenzhen Sheng Hai agreed to provide administrative services to the subsidiaries of CFG,including CFS, details of which are set out under the paragraph headed “Connected transactions” inthis section.

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CTL is a wholly-owned subsidiary of CFG. It owns the Trademarks currently used by ourGroup. Pursuant to the Trademarks Agreement, CTL agreed to grant a non-exclusive and non-transferable license to our Group to use the Trademarks. Details of the trademarks agreement are setout under the paragraph headed “Connected transactions” in this section.

Convoy Management Services Limited ( ) is a company incorporated inHong Kong with limited liability on 15 January 2008 and is wholly-owned by CFG. It is set up for thepurpose of provision of management services to other subsidiaries of CFG incorporated outside HongKong except for our Group.

Convoy Investment Holdings Limited is a company incorporated in the British Virgin Islandswith limited liability on 2 January 2007 and is wholly-owned by CFG, which owns the proprietaryrights of the CFG Group.

(Convoy Wealth Investment Consultation (Beijing) CompanyLimited*) is a wholly foreign owned enterprise established in the PRC on 8 August 2005 and iswholly-owned by CFG. The intended goal in establishing this company is to provide consultancyservices in the PRC.

Integrated Wealth Technology Limited ( ) is a company incorporated in HongKong with limited liability on 3 December 2007, in which CFG indirectly owns 19% interest. It is setup with a view to providing information technology services.

Save as disclosed above, all other companies directly or indirectly held by Convoy Inc andCFG were investment holding companies and/or had no business operations, or represented minorityinterests of CFG as to the Latest Practicable Date.

Our Company believes that within the whole group of companies in which Convoy Inc and/orCFG are directly or indirectly interested, the insurance and MPF schemes brokerage businesses inHong Kong currently undertaken by CFS are the most mature businesses with good potential forfurther growth given the business performance, operation scale and experienced management of CFS.Therefore, our Directors consider listing only the distinctive business of insurance and MPF schemesbrokerage in Hong Kong.

Further, the business activities of the Other Companies are not relevant to insurance and MPFschemes brokerage businesses in Hong Kong and thus not consistent with the principal business of ourGroup. Therefore, the Other Companies are excluded from our Group.

NON-COMPETITION UNDERTAKING

Each of the Controlling Shareholders has entered into the deed of non-competition (the “Deedof Non-competition”) in favor of our Company (for ourselves and as trustee of our subsidiaries),pursuant to which each of the Controlling Shareholders undertakes and covenants with our Company(for ourselves and as trustee of our subsidiaries) that, for so long as the Controlling Shareholders and/or their respective associates, directly or indirectly, whether individually or taken together, remain the

* for identification purpose only

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Controlling Shareholders of our Company, he/she/it will not and will procure his/her/its respectiveassociates not to directly or indirectly (whether as an investor, shareholder, partner, agent or otherwiseor whether for profit, reward or otherwise) engage or otherwise be interested in any business includinginsurance and MPF schemes brokerage business which is or may be in competition with the businessof any members of our Group (the “Restricted Business”) from time to time.

Such non-competition undertaking does not apply to:

(i) the holding of shares or other securities issued by our Company or any of our subsidiariesfrom time to time;

(ii) the holding of shares or other securities in any company which has an involvement in theRestricted Business, provided that such shares or securities are listed on a recognised stockexchange and the aggregate interest of the Controlling Shareholders and their respectiveassociates (as “interest” is construed in accordance with the provisions contained inPart XV of the SFO) do not amount to more than 5% of the relevant share capital of thecompany in question;

(iii) the contracts and other agreements (including any business carried on and serviceprovided pursuant thereto and the transactions contemplated thereunder) entered intobetween members of our Group and the Controlling Shareholders and/or their respectiveassociates; and

(iv) the involvement or participation of the Controlling Shareholders in a Restricted Businessin relation to which our Company has agreed in writing to such involvement orparticipation, following a decision by the independent non-executive Directors to allowsuch involvement or participation subject to any conditions the independent non-executiveDirectors may require to be imposed.

The Deed of Non-competition will cease to have effect upon the earliest of the date after theListing on which (i) our Company becomes wholly-owned by the Controlling Shareholders and/or theirrespective associates (whether individually or collectively); or (ii) the securities of our Company ceaseto be listed on the Stock Exchange or any other stock exchange recognised under the SFO.

DIRECTORS

Each of our Directors confirms that he or she does not have any competing business with ourGroup. Moreover, pursuant to their service agreements, our executive Directors shall not at any timeduring his or her term of service with our Group and for a period of 12 months after the expiry ortermination of his or her employment with our Company, without the prior written consent of ourBoard, be or become a director of any company (other than our Company or any other member of ourGroup) which competes with or is a competitor of our Group or be engaged, concerned or interesteddirectly or indirectly in any other business, trade or occupation which competes with or is a competitorof our Group.

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CORPORATE GOVERNANCE MEASURES

Our Company will adopt the following measures to manage the conflict of interests arisingfrom the competing business and to safeguard the interests of the Shareholders:

(i) our independent non-executive Directors will review, on an annual basis, the compliancewith the non-competition undertaking by the Controlling Shareholders under the Deed ofNon-competition;

(ii) the Controlling Shareholders undertake to provide all information requested by ourCompany which is necessary for the annual review by our independent non-executiveDirectors and the enforcement of the Deed of Non-competition;

(iii) our Company will disclose decisions on matters reviewed by our independent non-executive Directors relating to compliance and enforcement of the non-competitionundertaking of the Controlling Shareholders under the Deed of Non-competition in theannual reports of our Company; and

(iv) the Controlling Shareholders will make an annual declaration on compliance with theirundertaking under the Deed of Non-competition in the annual reports of our Company.

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

Having considered the matters described above and the following factors, we believe that ourGroup is capable of carrying on our business independently of our Controlling Shareholders and theirrespective associates after the Share Offer.

Management independence

Our Board comprises three executive Directors and three independent non-executive Directors.All our executive Directors, namely Mr. Wong, Ms. Fong and Mr. Mak, are also our ControllingShareholders. Save as disclosed above, no other Controlling Shareholders hold any directorship in ourCompany.

Mr. Wong and Ms. Fong are non-executive directors of CFG. They currently spendapproximately 95% of their working time on the management of our Group and the remaining 5% oftheir working time on the management of the CFG Group. Apart from Mr. Wong and Ms. Fong, thereare teams of senior management within the CFG Group who are mainly responsible for the dailymanagement of the CFG Group.

Each of our Directors is aware of his or her fiduciary duties as a Director which require, amongothers, that he or she acts for the benefit and in the best interests of our Company and does not allowany conflict between his or her duties as a Director and his or her personal interest. Mr. Wong and Ms.Fong are expected to spend the necessary time and attention required as the chairman and executiveDirector respectively of our Company to formulate the corporate strategy and oversee the overalldevelopment of our Group. Further, Mr. Mak and all of our senior management are our full-timeemployees and do not have senior executive positions in the daily management and operation of any ofthe companies comprising the CFG Group. All major management decisions will be made by ourBoard as a whole, including our independent non-executive Directors who are independent with any ofthe Controlling Shareholders, and not merely at the sole decision of Mr. Wong or Ms. Fong. Our daily

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operations will be managed by our senior management team, all the members of which are independentfrom those of the CFG Group. Therefore, notwithstanding the fact that Mr. Wong and Ms. Fong willhold dual positions in our Company and CFG, our Directors are of the view that we will be able tooperate independently of the CFG Group. Save as disclosed in this section and the section headed“Directors, senior management and staff” in this prospectus, Mr. Wong, Ms. Fong and Mr. Mak andour senior management have no other material role in other companies of the CFG Group.

The following table illustrates our Directors’ directorship(s) held in (i) our Group; (ii) CAM;(iii) CFG; and (iv) the companies in which Convoy Inc and CFG are directly or indirectly interested in,apart from our Group and CAM (the “Other Convoy Companies”):

Name of Director Directorship(s) held in the GroupDirectorship(s)held in CAM

Directorship(s)held in CFG and

the Other ConvoyCompanies

Mr. Wong . . . . . . . . . . . . . . . . . . . . . . . . Executive Director None Non-executivedirector of CFG

Ms. Fong . . . . . . . . . . . . . . . . . . . . . . . . . Executive Director None Non-executivedirector of CFG

Mr. Mak . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Director None NoneMrs. Fu Kwong Wing Ting, Francine . . . Independent non-executive Director None NoneDr. Wu Ka Chee, Davy . . . . . . . . . . . . . . Independent non-executive Director None NoneMr. Ma Yiu Ho, Peter . . . . . . . . . . . . . . . Independent non-executive Director None None

The decision-making mechanism of our Board of Directors set out in our Articles ofAssociation also includes provisions to avoid conflicts of interest by providing, among others, that(i) each Director will be entitled to one vote at our meeting of Board of Directors and decisions of ourBoard of Directors shall be passed by majority vote; and (ii) in the event of a conflict of interest, therelevant Director(s) shall abstain from voting and shall not be present in the relevant Board meetingand be excluded from Board deliberations. Each of Mr. Wong and Ms. Fong has confirmed that, if aconflict of interest situation arises in respect of either of them, they will respectively abstain fromvoting, and refrain from attending the relevant Board meeting and therefore play no part in the decisionmaking process of the Board. Examples of circumstances under which Mr. Wong and Ms. Fong wouldbe considered to have a conflict of interest include service agreement and licensing agreement betweenthe CFG Group and our Group. Given the professional knowledge and experience of the remainingDirectors and senior management (please refer to the section headed “Directors, senior managementand staff” in this prospectus) in relation to decision making and the operation of the business of ourGroup, our Directors are of the view that the Board can function effectively in the event that Mr. Wongand Ms. Fong are unable to take part in the decision making process of the Board due to a conflict ofinterest as described above.

Our Company has adopted the Code of Corporate Governance Practices (the “Code”) inaccordance with Appendix 14 of the Listing Rules. The Code sets out principles of good corporategovernance in relation to, among others, Directors, the chairman and chief executive officer, Boardcomposition, the appointment, re-election and removal of Directors, their responsibilities andremuneration and communications with our Shareholders. Our Company will state in its interim andannual reports whether we have complied with the Code, and will provide details of, and reasons for,any deviations from it in the Corporate Governance Report which will be included in our annual report.Our Company is also required to comply with the Model Code for Securities Transactions by Directors

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of Listed Issuers which provides for, among others, prohibitions on Directors’ dealings in securitiesand protections of minority shareholders’ rights. Our Board of Directors is therefore satisfied thatsufficient corporate governance measures have been put in place to manage conflicts of interestbetween our Group and each of our Controlling Shareholders, and to protect minority Shareholders’rights after the Listing. Further, following the Listing, our Board of Directors will be required tocomply with provisions under the Listing Rules and certain matters, such as connected transactions, arerequired to be reviewed by our independent non-executive Directors. Our Directors are of the view thatthe significant proportion of independent non-executive Directors comprising our Board shouldenhance our overall corporate governance standards.

Having considered the above factors, our Directors are satisfied that they are able to performtheir roles in our Company independently, and our Directors are of the view that they are capable ofmanaging our business independently from the Controlling Shareholders after the Share Offer.

Operational independence

We have our independent management team and make our business decisions independently.We have established our own set of organisational structure made up of individual departments, eachwith specific areas of responsibilities. We have sufficient capital, information technology and staff tooperate our businesses independently. CFS has entered into contracts for services with theConsultants, on the basis that they are providing exclusive insurance and MPF schemes brokerageservices to our Group. Certain associates of Mr. Shin Kin Man, one of the Controlling Shareholdersand a director of CFS, are Consultants of CFS and we pay commission to them for their contractingservice. For the three years ended 31 December 2007, 2008 and 2009, our total commission paid tocertain associates of Mr. Shin Kin Man was approximately HK$14.5 million, HK$11.9 million andHK$6.0 million, respectively, which only represented 2.0%, 2.2% and 2.1% of our total commissionexpenses, respectively. For the three years ending 31 December 2010, 2011 and 2012, it is expectedthat our commission expenses payable to certain associates of Mr. Shin Kin Man will be not morethan HK$7.5 million, HK$7.9 million and HK$8.3 million, respectively, and will not account for asignificant amount of our total commission expenses. In addition, we have direct access to the ProductIssuers and have established the consultancy development department, consultancy administrationdepartment and the training department to monitor and manage the Consultants. We have alsoestablished a set of internal control procedures to facilitate the effective operation of our business.Our Directors therefore believe that we are operationally independent from the ControllingShareholders.

Financial independence

Our Group has an independent financial system and makes financial decisions according to ourGroup’s own business needs. Our Directors have confirmed that, as at the Latest Practicable Date, wedid not have any outstanding loans or guarantees provided by our Controlling Shareholders. Therefore,our Directors consider that there is no financial dependence on our Controlling Shareholders.

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CONNECTED TRANSACTIONS

Our Group has entered into certain agreements and arrangements with our connected persons inthe ordinary and usual course of business of our Group during the Track Record Period. Thesetransactions are expected to continue after the Listing. Details of these transactions are set out below.

Exempt continuing connected transactions

(i) Licensing of the Trademarks

Our Group is currently using the brand names “Convoy”, “ ” and “ ” as trade namesfor our businesses. Our Group is also using the Trademarks ( , , , and )for our businesses. The Trademarks are owned by CTL, a wholly-owned subsidiary of CFG andregistered under classes 35 and 36 of trade and service marks. The specifications of services of classes35 and 36 include, inter alia, insurance advisory, insurance brokerage and MPF intermediary advisoryservices. The details of the Trademarks are described under the paragraph headed “Intellectualproperty” in the section headed “Further information about our Company’s business” in Appendix V tothis prospectus.

In order to facilitate the use of the Trademarks by our Group for our businesses, CTL hasentered into the Trademarks Agreement with our Company on 21 June 2010, pursuant to which CTLhas agreed to grant a non-exclusive and non-transferable licence to our Group to use the Trademarks ata nominal consideration of HK$1 in connection with our Group’s businesses. Our Group has agreednot to grant any sub-licence for using the Trademarks without the prior written consent of CTL. CTL isobliged to maintain the validity and renew the registration of the Trademarks.

Despite having the benefit and prestige of conducting business under the Trademarks, ourGroup has established and controlled, among others, our own independent operational facilities, backoffice staff, relationships with the Product Issuers and customer base, which our Directors consider,allow our Group to operate effectively without placing undue reliance on the CFG Group for usage ofthe Trademarks. Our Directors are, however, confident that the Trademarks Agreement sufficientlyprotects our Group’s rights to use the Trademarks for the benefit of our Group.

CTL, a wholly-owned subsidiary of CFG, will become a connected person of our Companyunder Chapter 14A of the Listing Rules after the Listing and therefore the arrangement contemplatedunder the Trademarks Agreement will constitute a continuing connected transaction of our Companyunder Rule 14A.14 of the Listing Rules. As the consideration for the licence granted under theTrademarks Agreement is nominal, the Trademarks Agreement falls within the de minimus thresholdunder Rule 14A.33 of the Listing Rules and is exempt from the reporting, annual review,announcement and independent Shareholder’s approval requirements. Our Directors (including theindependent non-executive Directors) consider that the terms of the Trademarks Agreement are fairand reasonable and in the interests of our Company and the Shareholders as a whole.

(ii) Sharing of administrative services

Pursuant to an agreement dated 31 December 2007 entered into between Shenzhen Sheng Hai,an indirect wholly-owned subsidiary of CFG, and CCL, a wholly-owned subsidiary of CFG, ShenzhenSheng Hai agreed to provide back office administrative services to CCL for any administrative tasks

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assigned by CCL (the “Administrative Services”). Subsidiaries of CFG, including CFS, assignedcertain administrative tasks to CCL, which include, among others, documentation processing work forour customers and the Consultants and telephone customer services support.

CFS intends to continue engaging the Administrative Services upon the Listing and has enteredinto an administrative services agreement with CCL (the “Administrative Services Agreement”)pursuant to which CFS has agreed to pay to CCL the lower of (i) HK$950,000; and (ii) 80% of thecosts incurred by CCL with reference to (a) CFS’s historical utilisation of Administrative Services as aproportion to the total Administrative Services provided by Shenzhen Sheng Hai to all of its customersfor the previous two years; and (b) headcount of Shenzhen Sheng Hai’s staff who are responsible fortasks relating to CFS. The Administrative Services Agreement commenced on 1 January 2010 and willexpire on 31 December 2012.

The Administrative Services, as described above in this paragraph, involves administrativetasks that require low levels of skill and expertise which are replaceable. As such our Directors are ofthe view that our Group does not place undue reliance on the CFG Group for the usage of theAdministrative Services.

Upon the Listing, the transactions contemplated under the Administrative Services Agreementwill constitute continuing connected transactions of our Company under Chapter 14A of the ListingRules.

As each or all of the percentage ratios (other than the profit ratio) is/are on an annual basis lessthan 5% and the aggregate annual fee payable by our Group under the Administrative ServicesAgreement will be less than HK$1,000,000, such transactions fall within the de minimis thresholdunder Rule 14A.33 of the Listing Rules and are exempt from reporting, annual review, announcementand independent shareholder’s approval requirements.

Our Directors (including the independent non-executive Directors) consider that theAdministrative Services Agreement will be entered into in the ordinary and usual course of ourGroup’s business and on normal commercial terms, and that the terms of the Administrative ServicesAgreement are fair and reasonable and in the interests of our Company and our Shareholders as awhole.

Non-exempt continuing connected transaction

Service fees paid to connected persons

CFS, an indirect wholly-owned subsidiary of our Company has entered into contract forservices (the “Shin Family Service Contracts”) with three associates (as defined under the ListingRules) of Mr. Shin Kin Man (the “Shin Family”). Mr. Shin Kin Man is the executive director of CFSand one of the Controlling Shareholders. Under the Shin Family Service Contracts, our Companyagreed to pay commission or fee to the Shin Family for their acting as Consultants of CFS to providethe insurance and MPF schemes brokerage services in Hong Kong pursuant to the terms and conditionsof the Shin Family Service Contracts. Such commissions to be paid to the Shin Family representnormal commissions applicable to all other Consultants, and would not include payment of any kind towhich all other Consultants would not be entitled. The Shin Family Service Contracts would expire on31 December 2012.

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For each of the three years ended 31 December 2007, 2008 and 2009, the annual aggregateamounts of the commission or fee paid to the Shin Family were as follows:

Year ended 31 December

2007 2008 2009

HK$ HK$ HK$

Annual aggregate commission or fee paid to the Shin Family . . . . . . . . . . 14,500,452 11,930,428 6,035,930% to our Group’s total commission expenses or fee

paid to Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0% 3.7% 2.4%

In determining the annual caps for the transactions contemplated under the Shin Family ServiceContracts (the “Transactions”), our Directors have taken into consideration of the following principalfactors:

(i) the aggregate amount of commission or fee paid to the Shin Family as Consultants duringthe Track Record Period;

(ii) potential brokerage services which the Shin Family will provide as Consultants to ourGroup for the three years ending 31 December 2010, 2011 and 2012; and

(iii) the expected commission rate and fee payable to the Consultants who are IndependentThird Parties under normal commercial terms.

Based on the above factors and information, our Directors expect that the annual caps for theShin Family Service Contracts for each of the three years ending 31 December 2010, 2011 and 2012 tobe as follows:

Year ending 31 December

2010 2011 2012

HK$ HK$ HK$

The maximum annual aggregate value of the Transactions . . . . . . . . . . . . 7,500,000 7,900,000 8,300,000

Since the annual caps for the Transactions for each of the three years ending 31 December2010, 2011 and 2012 are less than HK$10,000,000 and the applicable percentage ratios as defined inRule 14A.10 of the Listing Rules calculated with reference to the annual caps under the Transactionsare less than 25%, under Rule 14A.34 of the Listing Rules, the Transactions will, upon the Listing,constitute non-exempt continuing connected transaction of our Company and will be subject to thereporting, annual review and announcement requirements set out in the Listing Rules.

Our Directors (including the independent non-executive Directors) and the Sponsor are of theview that the Transactions will continue in the ordinary and usual course of business of our Companyand on normal commercial terms (for the purpose of and as having the meaning as ascribed theretounder the Listing Rules), and the terms of the Transactions and the annual caps are fair and reasonableand in the interests of the Shareholders as a whole.

Application for waiver for non-exempt continuing connected transaction

Our Company has, pursuant to Rule 14A.42(3) of the Listing Rules, applied to the StockExchange for a waiver from strict compliance with announcement requirement set out in the ListingRules for the Transactions upon the Listing.

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The Stock Exchange has granted a waiver from strict compliance with the applicablerequirements set out in the Listing Rules as mentioned above and our Company should comply withRules 14A.35(1), 14A.35(2), 14A.36, 14A.37, 14A.38, 14A.39, 14A.40, 14A.45 and 14A.46 of theListing Rules, subject to the annual caps for the Transactions as set out above.

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DIRECTORS

Our Board is responsible and has general powers for the management and conduct of ourbusiness. The following table sets forth the information regarding members of the Board:

Name Age Position

Mr. Wong Lee Man ( ) 41 Chairman and executive DirectorMs. Fong Sut Sam ( ) 41 Executive Director and Chief Executive OfficerMr. Mak Kwong Yiu ( ) 35 Executive Director and Chief Financial OfficerMrs. Fu Kwong Wing Ting, Francine ( ) 41 Independent non-executive DirectorDr. Wu Ka Chee, Davy ( ) 41 Independent non-executive DirectorMr. Ma Yiu Ho, Peter ( ) 45 Independent non-executive Director

EXECUTIVE DIRECTORS

Mr. Wong Lee Man ( ), aged 41, was appointed as an executive Director andChairman of our Company on 12 March 2010. He is the chief executive and chief strategic officer ofCFS, non-executive director and chairman of CFG, and is responsible for the overall management andstrategic development of our Group. Mr. Wong joined our Group in November 1998. He graduatedfrom The Hong Kong Polytechnic University (formerly known as the Hong Kong Polytechnic) with ahigher diploma in Building Technology and Management in November 1990. He has joined thefinancial services industry for 20 years and has gained all-round experience through working for bothinternational and local financial companies in Hong Kong including The New Zealand Insurance Life(Bermuda) Ltd., Top Glory Insurance Company (Bermuda) Ltd. and National Panafund Ltd. He earnedthe designation of Fellow, Life Management Institute from the Life Office Management Association,Inc. in September 1995. Mr. Wong is the honorary secretary of the Independent Financial AdvisorsAssociation Limited in Hong Kong.

Ms. Fong Sut Sam ( ), aged 41, was appointed as an executive Director on 12 March2010. She has also been the chief executive officer, acting chief operating officer and an executivedirector of CFS and a non-executive director of CFG. She manages the overall strategic developmentand the operation of our Group. Ms. Fong joined our Group in November 1998 and has led variousfunctions, including the consultancy force, corporate communications, sales and marketing, trainingand operation. Her exceptional achievements in the financial industry and contribution to thecommunity earned her the title of “Benchmark Most Extraordinary Women in Finance 2009” from theBenchmark magazine. Ms. Fong graduated from the South Bank University in London in June 1992with a Bachelor of Science degree. In December 2002, she graduated with a Master’s Degree inBusiness Administration from the Chinese University of Hong Kong and was placed on the Dean’sList. Ms. Fong has also been appointed as a Member of the Appeal Board under the Betting DutyOrdinance (Chapter 108 of the Laws of Hong Kong) from 10 March 2010 to 31 March 2012 and as apanel member of the Appeal Board (Amusement Game Centres) under the Amusement Game CentresOrdinance (Chapter 435 of the Laws of Hong Kong) from 30 May 2010 to 29 May 2012.

Mr. Mak Kwong Yiu ( ), aged 35, was appointed as an executive Director on 16March 2010. He joined our Group in May 2002 as the chief financial officer and is responsible for theaccounting and finance functions of our Group. He is also an executive director of CFS. Mr. Makgraduated from the Hong Kong University of Science and Technology with a Bachelor of BusinessAdministration degree in Finance in November 1996 and a Master of Business Administration degreein November 2004. He earned the Chartered Financial Analyst designation in September 2000. He has

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been a Certified Public Accountant in the United States since May 2002 and a member of the HongKong Institute of Certified Public Accountants since May 2003. Mr. Mak is currently an executivedirector of Computech Holdings Limited, whose shares are listed on the Growth Enterprise Market ofthe Stock Exchange. He was appointed in March 2008 as an independent non-executive director ofAcrossAsia Limited, whose shares are listed on the Growth Enterprise Market of the Stock Exchangeand resigned in May 2010 due to his other business commitment.

Notwithstanding that Mr. Mak is the sole executive director of Computech Holdings Limited,given its relative small size of operations, Mr. Mak considers our Group’s business to be his principalfocus and has devoted more than 80% of his time to his duties as a director of CFS in the Track RecordPeriod and will continue to allocate a similar proportion of his time to our Group after the Listing.

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mrs. Fu Kwong Wing Ting, Francine ( ), aged 41, was appointed as anindependent non-executive Director on 16 March 2010. Mrs. Fu attained her master degree fromOxford University in the United Kingdom in Politics, Philosophy and Economics in June 1994 and hasbeen holding the CFP designation since October 2001. Mrs. Fu is the managing principal and owner ofa business consulting firm, Coram Advisory Services (HK) Limited, set up in 2008 to provide advisoryservice to business based in Hong Kong. Before setting up her own practice, she was the chiefmarketing officer of AXA China Region Insurance Company Limited, one of the top three long terminsurers in Hong Kong, from January 2006 to June 2008. She has been in the financial servicesindustry for over 15 years with various leading financial services companies and is currently thePresident of the IFPHK. She has previously been a member of the Advisory Committee on AppliedMathematics for the Hong Kong Polytechnic University, a full member of the committee onInvestment-Linked Assurance and Pooled Retirement Funds, an alternate member of the samecommittee, a member of the Investor Education Advisory Committee of the Hong Kong Securities andFutures Commission from April 2006 to March 2008 and a member of the Award Council of the HongKong Award for Young People from February 1994 to January 2002. Mrs. Fu is currently a boardmember of Li Po Chun United World College (Hong Kong), Limited (since 1991), United WorldColleges Hong Kong Committee Limited (since 2008), and a member of the Banking and FinanceIndustry Training Board of the Vocational Training Council of Hong Kong (since 2009).

Dr. Wu Ka Chee, Davy ( ), aged 41, was appointed as an independent non-executivedirector on 16 March 2010. Dr. Wu has been a senior lecturer of the Department of Accountancy andLaw at the Hong Kong Baptist University since September 2009. He attained a doctorate degree in lawin December 2003, a postgraduate certificate in law in June 1994 and a bachelor degree in law inNovember 1993, all from the University of Hong Kong. He was formerly a PC-Law examiner for thepractising certificate examinations of the Hong Kong Institute of Certified Public Accountants. He is aco-author of the Guide to Corporate Governance for Subvented Organisations, which was published bythe Hong Kong Government in May 2010. He is also a member of the Advisory Group on ShareCapital, Distribution of Profits and Assets and Charges Provisions for the rewrite of the CompaniesOrdinance.

Mr. Ma Yiu Ho, Peter ( ), aged 45, was appointed as an independent non-executiveDirector on 16 March 2010. Mr. Ma is currently the financial controller of The Hong Kong ParkviewGroup Ltd., shares of which are listed on the Main Board. He has been a member of the Hong KongInstitute of Certified Public Accountants since February 1990 and a fellow member of the Association

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of Chartered Certified Accountants (UK) since April 1994. Mr. Ma obtained a Master of BusinessAdministration Degree from the Hong Kong University of Science and Technology in November 1995.He has over 20 years’ experience in the finance and accounting field and worked as the financialcontroller, qualified accountant and authorised representative of VODone Limited, shares of which arelisted on the Main Board, chief financial officer of Superior Fastening Technology Limited, aSingapore listed company. Mr. Ma also worked for Standard Chartered Equitor Trustee HK Limitedfrom June 1988 to September 1992 with his last position being the assistant manager of theinstitutional trust department. He has been employed as an examiner for the Hong Kong government’saudit department from September 1986 to June 1988.

Details of our Directors’ emoluments (whether covered by service contracts or not), the basis ofdetermining our Directors’ emoluments and the proposed length of service as stated in servicecontracts are set out under the paragraph headed “Particulars of Directors’ service contracts” inAppendix V to this prospectus.

Save as disclosed in this prospectus, each of our Directors confirm that he/she (i) did not holdany directorships in the last three years prior to the Latest Practicable Date in public companies thesecurities of which are listed on any securities market in Hong Kong or overseas; (ii) does not hold anyother positions with our Company or other members of our Group; and (iii) does not have anyrelationships with any directors, senior management or substantial or controlling shareholders of ourCompany nor any interests in the Shares within the meaning of Part XV of the SFO.

Save as disclosed in this prospectus, each of our Directors is not aware of any other matters thatneed to be brought to the attention of the holders of securities of our Company nor is there anyinformation to be disclosed by our Company pursuant to any of the requirements under Rule 13.51(2)of the Listing Rules.

BOARD COMMITTEES

Audit committee

Our Company established an audit committee on 23 June 2010 with written terms of referencein compliance with Rules 3.21, 3.22 and 3.23 of the Listing Rules. The primary duties of the auditcommittee are mainly to make recommendation to the Board on the appointment and removal ofexternal auditor; review the financial statements and material advice in respect of financial reporting;and oversee internal control procedures of our Company. The audit committee consists of threemembers, namely Mrs. Fu Kwong Wing Ting, Francine, Dr. Wu Ka Chee, Davy and Mr. Ma Yiu Ho,Peter. Mr. Ma Yiu Ho, Peter is the chairman of the audit committee.

Remuneration committee

Our Company established a remuneration committee on 23 June 2010 with written terms ofreference in compliance with paragraph B1.1 of the Code on Corporate Governance Practices as set outin Appendix 14 to the Listing Rules. The primary duties of the remuneration committee are to makerecommendation to the Board on the overall remuneration policy and structure relating to all Directorsand senior management of our Group; review performance based remuneration; and ensure none of ourDirectors determine their own remuneration. The remuneration committee consists of three members,namely Mrs. Fu Kwong Wing Ting, Francine, Dr. Wu Ka Chee, Davy and Mr. Wong. Mrs. Fu KwongWing Ting, Francine is the chairman of the remuneration committee.

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Nomination committee

We established a nomination committee on 23 June 2010. Written terms of reference incompliance with paragraph A4.4 of the Code on Corporate Governance Practices as set out inAppendix 14 to the Listing Rules have been adopted. The primary function of the nominationcommittee is to make recommendations to the Board regarding candidates to fill vacancies on theBoard. The nomination committee consists of three members, namely Mrs. Fu Kwong Wing Ting,Francine, Dr. Wu Ka Chee, Davy and Ms. Fong. Mrs. Fu Kwong Wing Ting, Francine is the chairmanof the nomination committee.

Compliance committee

We established a compliance committee on 23 June 2010. The primary function of thecompliance committee is to make recommendations to the Board regarding regulatory and compliancematters relating to our Group. The compliance committee consists of four members, namely Mrs. FuKwong Wing Ting, Francine, Dr. Wu Ka Chee, Davy, Ms. Fong and Mr. Mak. Dr. Wu Ka Chee, Davyis the chairman of the compliance committee.

SENIOR MANAGEMENT

Mr. Chan Tsz Kin, Ernest, aged 45, is responsible for the product development and productresearch of our Group. He is an executive director and the chief commercial officer of CFS. Mr. Chanjoined our Group in 1992 and has about 18 years of experience in the banking and financial industry.Prior to joining our Group, he has been working in Standard Chartered Bank (Hong Kong) Limitedfrom August 1990 to November 1991 with his last position being a branch sales and service manager.He graduated with a Bachelor Degree in Arts from the York University in Canada in November 1987.

Mr. Shin Kin Man, aged 34, is an executive director and the chief distribution officer of CFSand responsible for developing the sales team and providing financial planning and wealthmanagement services to customers of our Group. Mr. Shin has been with our Group since February1999 and was one of the Consultants. He graduated with a Bachelor Degree of Social Sciences inChina Studies (Sociology) from the Hong Kong Baptist University in December 1998.

COMPLIANCE OFFICER

Mr. Wang Pui Wang, aged 35, is a solicitor admitted in Hong Kong since 2001. Mr. Wang isthe director of legal and compliance department of CFS who is responsible for advising on legalmatters and supervising compliance function of our Group. He obtained his Bachelor of Laws degreein December 1997 and Post-graduate Certificate in Laws in June 1999 from the University of HongKong. He has practised as a solicitor in Hong Kong since September 2001. Mr. Wang joined ourGroup in July 2007. Mr. Wang received training as a trainee solicitor at Messrs. Cheung, Tong &Rosa, solicitors during 1999 to 2001. After admission as a solicitor, he continued to serve as anassociate solicitor with the same firm from 2001 onwards and admitted to partnership of the same firmin 2003. During his time of private practice, apart from advising extensively on commercialtransactions and civil litigation matters, Mr. Wang advised clients of securities and insurance industryand dealt with cases involving commercial crime as well as investigations conducted by suchregulatory authorities involving SFC and Hong Kong Federation of Insurers. Mr. Wang also handledcases in the Insider Dealing Tribunal.

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STAFF AND CONSULTANTS

Overview of number of members of our Group

The number of staff (including the executive Directors and trainees) of our Group and theConsultants as at the Latest Practicable Date was as follows:

As at theLatest

PracticableDate

Administration department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Business intelligence and reporting department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Business processing department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Client servicing department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Company secretary department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Consultancy administration department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Consultancy development department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Corporate communications department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Customer experience department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Executive management office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Finance and accounts department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Human resources department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Information technology department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Legal and compliance department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Procurement department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Product department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4System development and management department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Trainee (unlicensed under PIBA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119Training department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Total number of staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245Total number of Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,023

Total number of staff and Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,268

Relationship with staff

Our Group recognises the importance of training to our staff. Apart from on-the-job training,our Group regularly provides external training for our staff to enhance technical or product knowledge.Our Group has not experienced any significant problems with our staff or disruption to our operationsdue to labour disputes nor has our Group experienced any difficulties in the recruitment and retentionof experienced staff. Our Directors believe that our Group has a good working relationship with ourstaff. Our Group also participates in the MPF as required under the relevant Hong Kong laws andregulations. In addition, our Group maintains medical and work related insurance schemes for ourstaff.

Relationship with the Consultants

We consider the highly skilled and experienced Consultants to be a key factor in our businesssuccess. Our future success will be dependent on our ability to attract, retain and motivate highlyskilled and experienced Consultants. The Consultants are contracted with CFS and our Group has notexperienced any significant problems with them or disruption to our operations due to disputesbetween our Group and the Consultants. Our Directors believe that our Group has developed a goodcooperation relationship and trust with the Consultants.

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DIRECTORS, SENIOR MANAGEMENT AND STAFF

COMPANY SECRETARY

Mr. Chow Kim Hang, aged 37, was appointed as the company secretary and the authorisedrepresentative of our Company under Rule 3.05 of the Listing Rules on 16 March 2010. Mr. Chow is apartner of Tsun & Partners, Solicitors, a corporate and commercial law firm in Hong Kong. He is apracticing solicitor in Hong Kong and a member of The Law Society of Hong Kong.

COMPLIANCE ADVISER

In accordance with Rule 3A.19 of the Listing Rules, our Company has appointed Quam Capitalas the compliance adviser, who will have access to all relevant records and information relating to ourCompany that it may reasonably require to properly perform its duties. The material terms of thecompliance adviser’s agreement entered into between our Company and the compliance adviser are asfollows:

(i) the compliance adviser’s appointment for a period commencing on the Listing Date and upto and including the date on which our Company complies with Rule 13.46 of the ListingRules in respect of the despatch of our annual report for the first full financial yearcommencing after the Listing Date, i.e. 31 December 2011, or until the agreement isterminated, whichever is earlier;

(ii) the compliance adviser shall provide our Company with guidance and advice as tocompliance with the Listing Rules and all other applicable laws, rules, codes andguidelines;

(iii) our Company agrees to indemnify and holds the compliance adviser (for itself and on trustfor the compliance adviser’s affiliates, its and their respective directors, officers, agentsand employees and each other person, if any, controlling the compliance adviser or any ofits affiliates) harmless from and against any and all losses, claims, damages or liabilities,incurred by the compliance adviser in relation with the services provided to our Company,save to the extent that any such loss, claim, damage or liability arises as a direct result ofthe wilful default or gross negligence of the compliance adviser; and

(iv) our Company shall have the right, subject to thirty (30) days’ written notice to terminatethe role of the compliance adviser under the agreement only if the compliance adviser’swork is of an unacceptable standard or if there is a material dispute (which cannot beresolved within thirty (30) days) over fees payable by our Company to the complianceadviser. The compliance advisor shall have the right to resign or terminate its appointmentas a compliance adviser under the agreement if our Company fails to perform ourresponsibilities as described in the agreement at any time by giving not less than thirty(30) days’ written notice to our Company.

123

INTERESTS DISCLOSEABLE UNDER THE SFO

INTERESTS DISCLOSEABLE UNDER THE SFO

Interests and/or short positions of our Directors and chief executives in the share capital of ourCompany and our associated corporations

So far as is known to our Directors, immediately following completion of the Share Offer(taking no account of any Shares which may be issued upon the exercise of the options that may begranted under the Share Option Scheme), the interests or short positions of our Directors in the shares,debentures or underlying shares of our Company or our associated corporations (within the meaning ofPart XV of the SFO) which will have to be notified to our Company and the Stock Exchange pursuantto Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she istaken or deemed to have under such provisions of the SFO) or which will be required, pursuant tosection 352 of the SFO, to be entered in the register referred to therein or which will be required,pursuant to the Model Code for Securities Transactions by Directors of Listed Companies of theListing Rules, to be notified to our Company and the Stock Exchange, once the Shares are listed are asfollows:

(i) Directors’ interests in the shares of associated corporations:

Name ofassociated corporation Name of Director Capacity

Long/Shortposition

No. of sharesin ConvoyInc held

Approximatepercentage of

the issuedshare capital

in ConvoyInc

Convoy Inc . . . . . . . . . . . . Mr. Wong Lee Man Beneficial owner Long position 14,074 19.7%Ms. Fong Sut Sam Beneficial owner Long position 14,034 19.7%Mr. Mak Kwong Yiu Beneficial owner Long position 3,911 5.4%

Interests and/or short positions of the substantial shareholders in the share capital of our Companywhich are discloseable under Divisions 2 and 3 of Part XV of the SFO

So far as is known to our Directors, immediately following completion of the Share Offer(taking no account of any Shares which may be issued upon the exercise of the options that may begranted under the Share Option Scheme), the following entities, not being a Director or chief executiveof our Company, will have an interest or short position in the Shares or underlying Shares which wouldfall to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of the SFO,or will be directly or indirectly interested in 10% or more of the nominal value of any class of sharecapital carrying rights to vote in all circumstances at general meetings of any other member of ourGroup:

Name of Shareholder CapacityLong/Short

positionNumber ofShares held

Approximatepercentage of

the issuedshare capital

Convoy Inc(1) . . . . . . . . . Interests of a controlled corporation Long position 300,000,000 75%Perfect Team(1) . . . . . . . Interests of a controlled corporation Long position 300,000,000 75%CFG . . . . . . . . . . . . . . . . Beneficial owner Long position 300,000,000 75%

Note:(1) The 300,000,000 Shares are held by CFG which is owned as to approximately 43.8% by Convoy Inc and 56.2% by Perfect Team. As a

result of such relationship as described in this paragraph, Convoy Inc and Perfect Team are deemed to be interested in 300,000,000Shares held by CFG. CFG is beneficially interested in 300,000,000 Shares.

RESTRICTIONS ON DISPOSAL OF SHARES

Immediately after the completion of the Share Offer, the Controlling Shareholders will controlthe exercise of voting rights of approximately 75% of the Shares eligible to vote in the general meeting

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INTERESTS DISCLOSEABLE UNDER THE SFO

of our Company. Save and except for their interest in our Company, the Controlling Shareholders didnot have any interest in any other companies as at the Latest Practicable Date which (i) had previouslyheld any interests in our business during the Track Record Period; and (ii) had ceased to hold suchinterests after the Reorganisation.

Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders hasundertaken to our Company and the Stock Exchange that, save as pursuant to the Share Offer, he/she/itwill not and will procure the relevant registered holders not to:

(i) in the period commencing from the date of this prospectus and ending on the date which issix months from the Listing Date (the “First Six-Month Period”), dispose of, or enter intoany agreement to dispose of or otherwise create any options, rights, interests orencumbrances in respect of, any of the Shares (or any interest therein) in respect of whichhe/she/it is shown in this prospectus to be the beneficial owner; and

(ii) in the period of six months commencing on the date falling the expiration of the First Six-Month Period, dispose of, or enter into any agreement to dispose of or otherwise createany options, rights, interests or encumbrances in respect of, the Shares (or any interesttherein) in respect of which he/she/it is shown in this prospectus to be the beneficial ownerif, immediately following such disposal or upon the exercise or enforcement of suchoptions, rights, interests or encumbrances, he/she/it would cease to be a controllingshareholder of our Company (as defined in the Listing Rules).

Each of the Controlling Shareholders has also undertaken to our Company and the StockExchange that, within the period commencing on the date of this prospectus and ending on the datewhich is 12 months from the Listing Date, he/she/it will:

(i) when he/she/it or the registered owner pledges or charges any securities or interests in thesecurities of our Company beneficially owned by him/her/it, whether directly or indirectly,in favour of an authorised institution pursuant to Note (2) to Rule 10.07(2) of the ListingRules, immediately inform our Company of such pledge or charge together with thenumber of securities so pledged or charged; and

(ii) when he/she/it receives indications, either verbal or written, from any pledgee or chargeethat any of the pledged or charged securities or interests in the securities of our Companywill be disposed of, immediately inform our Company of such indications.

Our Company will inform the Stock Exchange as soon as practicable after we have beeninformed of the matters referred to in (i) or (ii) above by any Controlling Shareholder and disclose suchmatters by way of an announcement in compliance with the Listing Rules.

125

SHARE CAPITAL

Without taking into account any Shares which may be issued pursuant to the exercise of optionswhich may be granted under the Share Option Scheme, or under the general mandate (see below“General mandate to issue Shares”), or which may be bought back by our Company (see below“General mandate to repurchase Shares”) and assuming that the Share Offer becomesunconditional, our Company’s issued share capital immediately following the Share Offer will be asfollows:

Authorised share capital: HK$

1,000,000,000 Shares 100,000,000

Issued and to be issued, fully paid or credited as fully paid upon completion of the Share Offer:

300,000,000 Shares in issue as at the date of this prospectus 30,000,000100,000,000 Shares to be issued pursuant to the Share Offer 10,000,000

400,000,000 Shares 40,000,000

Ranking

The Offer Shares are ordinary shares in the share capital of our Company and will rank equallyin all respects with all Shares in issue or to be issued as set out in the above table, and will qualify andrank equally for all dividends or other distributions declared, made or paid after the date of thisprospectus.

Share Option Scheme

We have conditionally adopted the Share Option Scheme. The principal terms of the ShareOption Scheme are summarised in the section headed “Share Option Scheme” in Appendix V to thisprospectus.

General mandate to issue Shares

Our Directors have been granted a general unconditional mandate to allot, issue and deal withthe Shares with an aggregate nominal value of not more than the sum of:

(i) 20% of the aggregate nominal amount of the share capital of our Company in issueimmediately following completion of the Share Offer; and

(ii) the aggregate nominal value of shares capital of our Company repurchased by ourCompany (if any) under the general mandate to repurchase Shares referred to under theparagraph headed “General mandate to repurchase Shares” below.

This mandate will expire at the earliest of:

(i) the conclusion of our Company’s next annual meeting;

(ii) the expiration of the period within which our Company is required by any applicable lawor the Articles of Association to hold our next annual general meeting; or

(iii) the time when such mandate is when varied or revoked by an ordinary resolution of ourShareholders in general meeting.

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SHARE CAPITAL

For further details of this general mandate, please refer the paragraph headed “Writtenresolutions of the sole Shareholder of our Company passed on 23 June 2010” in Appendix V to thisprospectus.

General mandate to repurchase Shares

Our Directors have been granted a general unconditional mandate to exercise all the powers ofour Company to repurchase such number of Shares with an aggregate nominal value of not exceeding10% of the aggregate nominal amount of the shares capital of our Company in issue immediatelyfollowing the completion of the Share Offer.

This mandate only relates to repurchases made on the Stock Exchange, or on any otherapproved stock exchange(s) on which the Shares are listed (and which are recognised by the SFC andthe Stock Exchange for this purpose), and which are made in accordance with all applicable laws and/or requirements of the Listing Rules. A summary of the relevant Listing Rules is set out under theparagraph headed “Repurchase by our Company of our own securities” in Appendix V to thisprospectus.

This mandate will expire at the earliest of:

(i) the conclusion of our Company’s next annual meeting; or

(ii) the expiration of the period within which our Company is required by any applicable lawor its Articles of Association to hold our next annual general meeting; or

(iii) the time when such mandate is when varied or revoked by an ordinary resolution of ourShareholders in general meeting.

For further details of this general mandate, please refer the paragraph headed “Writtenresolutions of the sole Shareholder of our Company passed on 23 June 2010” in Appendix V to thisprospectus.

Rule 10.08 of the Listing Rules

Our Company confirms that we will comply with the requirements of Rule 10.08 of the ListingRules upon Listing. Rule 10.08 of the Listing Rules provides that our Company may not issue anyfurther Shares or securities convertible into equity securities or form any agreement to make such anissue within six months from the date on which the Shares commence dealing on the Stock Exchange,subject to limited exceptions.

127

FINANCIAL INFORMATION

You should read the following discussion and analysis of our Group’s financial conditionand results of operations together with our combined financial statements as at and for each ofthe three years ended 31 December 2007, 2008 and 2009 and the accompanying notes included inthe accountants’ report set out in Appendix I to this prospectus. The accountants’ report has beenprepared in accordance with HKFRSs. Potential investors should read the whole of theaccountants’ report set out in Appendix I to this prospectus and not rely merely on theinformation contained in this section. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. For additional information regardingthese risks and uncertainties, please refer to the section headed “Risk factors” in this prospectus.

OVERVIEW

Our Group is principally engaged in the insurance and MPF schemes brokerage business. Wenegotiate and arrange contracts of insurance and MPF schemes in Hong Kong as the agent of ourcustomers, i.e. the policyholders, and advise on matters related to insurance. In pursuing the insurancebrokerage business, CFS commenced business in 1993, for carrying on long term (including linkedlong term) and general insurance business, and to provide independent advisory services in connectionwith insurance products. In October 1998, our Group started our brokerage business through CFS. InDecember 1999, our Group commenced MPF schemes brokerage business to tap into the unexploredmarket of MPF which was launched in December 2000. CFS is a corporate member of PIBA andcorporate intermediary of MPFA. We carry on our business under the Trademarks ( , ,

, and ) through a non-exclusive licence granted by CTL, a wholly-owned subsidiary ofCFG.

ILAS or Investment-linked Assurance Scheme is the major contracts of insurance on which ourGroup provides advisory services and from which over 99% of our Group’s revenue for the three yearsended 31 December 2007, 2008 and 2009 was generated. As a supplement, our Group also acts as anindependent broker for general and conventional insurance products and MPF schemes in the course ofproviding advisory services to the customers.

For the three years ended 31 December 2007, 2008 and 2009, we recorded revenue ofapproximately HK$636.1 million, HK$554.3 million and HK$455.6 million, respectively, and netprofit after tax of approximately HK$101.4 million, HK$31.5 million and HK$38.1 million,respectively.

Our customers are policyholders whom the Consultants provide services to. Our Directorsbelieve that the Listing will be definitely conducive to the further enhancement of our Group’s imageand our onward development in the insurance and MPF schemes brokerage market in the future.

BASIS OF PRESENTATION OF FINANCIAL INFORMATION

Our Group resulting from the Reorganisation is regarded as a continuing group. Accordingly,the combined statements of comprehensive income, combined statements of changes in equity andcombined statements of cash flows of our Group for the Track Record Period have been prepared andincluded the financial information of the companies now comprising our Group as if the current groupstructure had been in existence throughout the Track Record Period. The combined statements offinancial position of our Group as at 31 December 2007, 2008 and 2009 have been prepared to presentthe assets and liabilities of our Group as at those dates as if the current group structure had been inexistence at those dates.

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FINANCIAL INFORMATION

FACTORS AFFECTING OUR FINANCIAL CONDITIONS AND RESULTS OFOPERATIONS

Our financial conditions and results of operations have been and will continue to be affected bya number of factors, including those discussed below.

Demand for long term and general insurance products and MPF schemes in Hong Kong

We provide independent advisory services on long term and general insurance products andMPF schemes to our customers/potential customers. Our results of operations are therefore directlyaffected by the demand for those products in Hong Kong. The demand for the insurance products andMPF schemes, in particular, ILAS, is generally dependent upon, among others, the performance ofglobal securities market and the disposable income of the target customers. The larger the disposableincome of the target customers, the more money those customers are willing to be applied to ILAS andtherefore the higher demand for new ILAS. We believe that a key to our success is our ability toidentify suitable insurance products and MPF schemes which meet the customers’ needs.

Types of insurance products and MPF schemes arranged

Our operating results are affected by the types of insurance products and MPF schemesarranged. We offer a wide variety of insurance products to our customers, including ILAS,conventional and general insurance products and MPF schemes, which have different commission rate.As a significant portion of our Group’s revenue is generated from the sale of ILAS, our revenue, ingeneral, increases when more ILAS is arranged. Furthermore, the types of insurance products and MPFschemes being arranged also affect the commission expense payable to the Consultants.

Commission clawback

Our operating results are affected by the likeliness of clawback. Pursuant to the terms of theagreements entered into between our Group and the authorised insurers, the commission for Regular-savings ILAS paid by the authorised insurers to our Group is subject to the commission clawback bythe authorised insurers on a pro-rata basis. The indemnified period is generally from 6 months to 24months. If the actual amount of commission clawback is in excess of the estimated commissionclawback and accordingly, this would have a direct and adverse effect on the performance of ourGroup.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGEMENTS

The preparation of our combined financial statements requires management to make judgments,estimates and assumptions that effect the carrying amounts of revenues, expenses, assets and liabilitiesand the disclosure of contingent liabilities that are not readily apparent from other sources. Theestimates and associated assumptions are based on historical experience and other factors that areconsidered to be relevant. Actual results may differ from these estimates. The following sets out certaincritical accounting policies that our management considers to be critical in the portrayal of ourfinancial position and results of operations:

Revenue recognition

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

(i) investment brokerage commission income, on an accrual basis when brokerage servicesare rendered and in accordance with the terms of the underlying agreements with theProduct Issuers;

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FINANCIAL INFORMATION

(ii) insurance and pension scheme brokerage commission income, on an accrual basis basedon the commissioning of the respective insurance policy and pension scheme;

(iii) interest income, on an accrual basis using the effective interest method by applying therate that exactly discounts the estimated future cash receipts through the expected life ofthe financial instrument or a shorter period, when appropriate, to the net carrying amountof the financial asset; and

(iv) dividend income, when the shareholders’ right to receive payment has been established.

Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and anyimpairment losses. The cost of an item of property, plant and equipment comprises its purchase priceand any directly attributable costs of bringing the asset to its working condition and location for itsintended use. Expenditure incurred after items of property, plant and equipment have been put intooperation, such as repairs and maintenance, is normally charged to the statement of comprehensiveincome in the period in which it is incurred. In situations where the recognition criteria are satisfied,the expenditure for a major inspection is capitalised in the carrying amount of the asset as areplacement. Where significant parts of property, plant and equipment are required to be replaced atintervals, our Group recognises such parts as individual assets with specific useful lives anddepreciation.

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

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over the shorter of the lease terms and 25%Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 20%Computer equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30%Motor vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30%

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

Residual values, useful lives and the depreciation method are reviewed, and adjusted ifappropriate, at least at each financial year end.

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

In determining the useful life and residual value of an item of property, plant and equipment,our Group has to consider various factors, such as expected usage of the asset, expected physical wearand tear, the care and maintenance of the asset, and legal or similar limits on the use of the asset. Theestimation of the useful life of the asset is based on the experience of our Group with similar assets thatare used in a similar way. Additional or reduction depreciation is made if the estimated useful livesand/or the residual values of items of property, plant and equipment are different from the previousestimation. Useful lives and residual values are reviewed at the end of each year during the TrackRecord Period based on changes in circumstances.

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FINANCIAL INFORMATION

Income tax provisions

Determining income tax provisions involves judgement on the future tax treatment of certaintransactions. Our Group carefully evaluates the tax implications of transactions and tax provisions aremade accordingly. The tax treatment of such transactions is assessed periodically to take into accountall the changes in the tax legislations and practices.

Impairment of non-financial assets

Our Group assesses whether there are any indicators of impairment for all non-financial assetsat the end of each year during the Track Record Period. Definite life non-financial assets are tested forimpairment when there are indicators that the carrying amounts may not be recoverable. Animpairment exists when the carrying value of an asset or a cash-generating unit exceeds its recoverableamount, which is the higher of its fair value less costs to sell and its value in use. The calculation of thefair value less costs to sell is based on available data from binding sales transactions in an arm’s lengthtransaction of similar assets or observable market prices less incremental costs for disposing of theasset. When value in use calculations are undertaken, management must estimate the expected futurecash flows from the asset or cash-generating unit and choose a suitable discount rate in order tocalculate the present value of those cash flows.

Impairment of loans and receivables

Our Group assesses at the end of each year during the Track Record Period whether there is anyobjective evidence that a loan and receivable is impaired. To determine whether there is objectiveevidence of impairment, our Group considers factors such as the probability of insolvency orsignificant financial difficulties of the debtor and default or significant delay in payments. Where thereis objective evidence of impairment, the amount and timing of future cash flows are estimated based onhistorical loss experience for assets with similar credit risk characteristics.

Our Group maintains an allowance for estimated impairment of receivables arising from theinability of its debtors to make the required payments. Our Group makes its estimates based on theageing of its receivable balances, debtors’ creditworthiness, past repayment history and historicalwrite-off experience. If the financial condition of its debtors was to deteriorate so that the actualimpairment loss might be higher than expected, our Group would be required to revise the basis ofmaking the allowance.

Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, and carryforward ofunused tax credits and unused tax losses, to the extent that it is probable that taxable profit will beavailable against which the deductible temporary differences, and the carryforward of unused taxcredits and unused tax losses can be utilised. Significant management judgement is required todetermine the amount of deferred tax assets that can be recognised, based upon the likely timing andlevel of future taxable profits together with future tax planning strategies.

Estimation of commission clawback

Our Group reviews the carrying amount of commission clawback at the end of each year duringthe Track Record Period and estimates the expected cash outflows related to commission clawback.

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FINANCIAL INFORMATION

The estimation requires our Group to make estimates of the expected future occurrence of commissionclawback by the Product Issuers and the expenditure required to settle the obligations. Details of thecommission clawback are set out in note 22 to the accountants’ report set out in Appendix I to thisprospectus.

SUMMARY OF COMBINED RESULTS OF OUR GROUP

The following is a summary of our Group’s combined audited results for the Track RecordPeriod which have been extracted from the accountants’ report set out in Appendix I to this prospectus.The combined audited results were prepared on the assumption that the current structure of our Grouphad been in existence throughout the Track Record Period and in accordance with the basis set out inthe accountants’ report contained in Appendix I to this prospectus.

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 554,283 455,587Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,734 207 208Commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (362,850) (322,915) (253,538)Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,517) (63,569) (44,909)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,733) (16,484) (16,735)Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,217) (7,286) (4,651)Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (81,056) (106,638) (88,882)

PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,429 37,598 47,080Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,035) (6,088) (8,966)

PROFIT FOR THE YEAR AND TOTAL COMPREHENSIVE INCOMEFOR THE YEAR ATTRIBUTABLE TO THE OWNER OF OURCOMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,394 31,510 38,114

DIVIDEND PAID BY A SUBSIDIARY OF OUR COMPANY . . . . . . . . . . . 100,000 7,500 72,000

PRINCIPAL INCOME STATEMENT COMPONENTS

Revenue

Our revenue is mainly derived from the one-off brokerage commission income and recurringfee income receivable from various Product Issuers for business referral and introduction of insuranceproducts and MPF schemes to our customers. The following table sets out the amount of one-offbrokerage commission income and recurring fee income for the Track Record Period:

2007 2008 2009

HK$’000Percentage

of total HK$’000Percentage

of total HK$’000Percentage

of total

One-off brokerage commission income . . . . . 625,615 98% 540,309 97% 439,582 96%Recurring fee income . . . . . . . . . . . . . . . . . . . 10,453 2% 13,974 3% 16,005 4%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 554,283 455,587

During the Track Record Period, most of our Group’s revenue was attributable to one-offbrokerage commission income derived from sale of (i) investment-linked insurance products(comprising ILAS); (ii) conventional and general insurance products; and (iii) MPF schemes. Therewas no significant fluctuation in the one-off brokerage commission income and recurring fee incomerespectively as a percentage of total commission income of our Group during the Track Record Period.

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FINANCIAL INFORMATION

The one-off brokerage commission income and recurring fee income receivable in respect of ILAS andconventional and general insurance products are normally settled within 45 days upon receiving thecommission statements. The income derived from the MPF schemes includes upfront commission andrecurring management fee which is receivable upon the execution of the MPF schemes andperiodically as agreed with the MPF Providers with reference to the underlying asset value of the MPFschemes.

The following table sets out a breakdown of our revenue for the Track Record Period:

Year ended 31 December

2007 2008 2009

HK$’000 % HK$’000 % HK$’000 %

ILAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633,873 99.66 552,943 99.76 451,637 99.14Other insurance products . . . . . . . . . . . . . . . . . . . . . . . 1,743 0.27 410 0.07 3,391 0.74MPF schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 0.07 930 0.17 559 0.12

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636,068 100.00 554,283 100.00 455,587 100.00

There were 11,959, 10,867 and 9,156 customers purchasing new products through our Group in2007, 2008 and 2009 respectively. A majority of our revenue is derived from the business referral andintroduction of ILAS. Our operating results therefore are very dependent on the demand of ILAS inHong Kong.

Other income and gains, net

Other income and gains, net comprises mainly bank interest income and dividend income fromlisted investment totalling approximately HK$2.3 million, HK$366,000 and HK$99,000 for the threeyears ended 31 December 2007, 2008 and 2009 respectively.

Commission expenses

We are obliged to pay commission expense to the Consultants who accomplished new businessand produced brokerage commission income for our Group through the sale of various insuranceproducts and MPF schemes in the course of provision of advisory services to customers. Our Grouppays commission to the Consultants in accordance with (i) the terms and conditions stipulated in thecontract for services entered into between the Consultants and CFS; (ii) the Consultants’ respectivegrading; and (iii) the conditions set by our Group being satisfied, such as relevant commission incomereceived from the Product Issuers and relevant documents having been filed with our Group. Thepayment of commission to the Consultants depends on the pattern of commission income and recurringfees received by our Group from the Product Issuers and varies with different types of products. ForRegular-savings ILAS, commission to the Consultants is generally paid in equal monthly installmentsover the period of not more than 10 months, depending on tenor and/or size of premium; whereas forLump-sum ILAS and other insurance products, commission to the Consultants is generally paid in alump-sum, upon receipt of the relevant commission income or recurring fees from the Product Issuers.For MPF schemes, the commission to the Consultants is generally paid in a lump-sum or in equalmonthly installments over the period of not more than 12 months, upon receipt of relevant incomefrom the MPF Providers.

Commission expense represented approximately 57.0%, 58.3% and 55.7% of our revenue for thethree years ended 31 December 2007, 2008 and 2009 respectively, which remained at a fairly stable level

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in the Track Record Period. During the year ended 31 December 2009, commission payable to theConsultants in respect of ILAS brokerage commission income ranged from 43.5% to 78.2% of therelevant amount received from the ILAS Issuers.

Staff costs

Our staff costs mainly represented salaries, allowances, bonuses, pension scheme contributionsand other staff benefits to the staff and directors of our Group, excluding the commission payable tothe Consultants. Our staff costs represented approximately 8.1%, 11.5% and 9.9% of our revenue forthe three years ended 31 December 2007, 2008 and 2009 respectively.

Our Directors’ remuneration of our Group was approximately HK$7.9 million, HK$6.6 millionand HK$2.1 million for the years ended 31 December 2007, 2008 and 2009 respectively. The decreasein directors’ remuneration in 2009 was mainly due to salary cut of directors of CFS given that thefinancial performance of CFS was adversely affected as a result of the global economic downturn inthe fourth quarter of 2008. Regarding the future remuneration policy of our Group, it is our Group’sremuneration objective to, in consultation with the remuneration committee of our Company,remunerate directors of our Group fairly but not excessively for their efforts, time and contributionsmade to our Group and the remuneration of directors of our Group would be determined with referenceto various factors such as duties and level of responsibilities of each director, the available informationin respect of companies of comparable business or scale, the performance of each director and ourGroup’s performance for the financial year concerned and the prevailing market conditions.

Commission clawback

Pursuant to the terms of the broker agreements entered into between our Group and the ILASIssuers, the commission paid by the ILAS Issuers in relation to Regular-savings ILAS to our Group issubject to commission clawback by the ILAS Issuers on a pro-rata basis. Generally, our Group makesan estimation of the expected cash outflows related to commission clawback for the Regular-savingsILAS business being arranged in the indemnified period which is subject to commission clawback withreference to a model which is established and developed by our Group (and which in our Directors’opinion is objective and consistent) which is a function of the remaining number of the months of theindemnified period, and probability of occurrence of clawback with data accumulated from January2000 of sales volume, pattern of time of termination, ratio of terminated business to sales volume, pastexperience of the levels of clawback, and our Directors’ best estimates of the expenditure required tosettle the obligations in relation to the Regular-savings ILAS. The commission clawback is thenprudently assessed to account for probable commission clawback of the business being in theindemnified period at the end of that financial year. All commission clawback occurred in a financialyear are immediately debited in our Group’s revenue.

Pursuant to the contract for services entered into between each Consultants and CFS, theConsultants is required to bear part of the commission clawback based on a ratio of the Consultants’commission entitlement to our Group’s brokerage commission income derived from the sale ofRegular-savings ILAS. The commission clawback borne by the Consultants is calculated based on thecommission paid by our Group to the Consultants on a same pro-rata basis as the commissionclawback by the Product Issuers as mentioned above.

The amount of estimated commission clawback as at 31 December 2006, 2007 and 2008 wereapproximately HK$4.1 million, HK$5.1 million and HK$8.0 million, representing approximately

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1.1%, 0.8% and 1.4% of the revenue of our Group for each of the three years ended 31 December2008. These estimated sums were set aside at the end of each financial year to prepare for actualcommission clawback which may occur subsequently within the indemnified period. Thecorresponding actual clawback occurred and borne by our Group in 2007, 2008 and 2009 which relatesto revenue generated from the previous year, was approximately HK$3.3 million, HK$4.3 million andHK$6.7 million respectively.

As at 31 December 2009, our Group had estimated commission clawback of approximatelyHK$5.9 million to account for the probable commission clawback in relation to the businessaccomplished and indemnified by our Group in the years prior to 31 December 2009.

For the four months ended 30 April 2010, the actual commission clawback in relation to thebusiness accomplished and indemnified by our Group for the years prior to 2010 amounted toapproximately HK$3.1 million (the portion borne by our Group). Among the estimated commissionclawback of approximately HK$5.9 million made by our Group as at 31 December 2009 for theprobable commission clawback in 2010, approximately HK$3.0 million was made for the four monthsended 30 April 2010, which approximately covered the actual clawback commission of HK$3.1million for the four months ended 30 April 2010. Therefore, the estimated commission clawback as at31 December 2009 should be sufficient to account for the relevant commission clawback related to thebusiness accomplished and indemnified by our Group for the years prior to 2010.

The commission clawback for the four years ended 31 December 2006, 2007, 2008 and 2009 issummarised as below.

Year ended 31 December

2006 2007 2008 2009

Estimated clawback for a particular year relates to revenue generated fromprevious years:

Revenue from Regular-savings ILAS (HK$’ million) . . . . . . . . . . . . . . . . . . 377.7 633.9 552.9 451.6Estimated clawback at the end of financial year (HK$’ million) . . . . . . . . . . 4.1 5.1 8.0 5.9Estimated clawback-to-revenue ratio (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1% 0.8% 1.4% 1.3%

Actual clawback occurred in the next financial year:(1)

Actual clawback borne by our Group in relation to the revenue fromRegular-savings ILAS (HK$’ million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 4.3 6.7 N/A

Actual clawback borne by Consultants in relation to the revenue fromRegular-savings ILAS (HK$’ million)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 6.5 9.1 N/A

Notes:(1) The actual clawback for a particular year relates to revenue generated from previous years. Any difference between the estimated and

actual commission clawback would be adjusted in the estimation of commission clawback recognised to the statement of comprehensiveincome in the next year. The amounts in the above table represent actual clawback occurred in 2007, 2008 and 2009, which relates torevenue generated on or before 31 December 2006, 31 December 2007 and 31 December 2008, respectively.

(2) The actual clawback borne by the Consultants is calculated on a similar basis as the clawback charged by the Product Issuers asmentioned above. The actual clawback borne by the Consultants would not be accounted for as our Group’s expenses and would beoffset against the commission expense payable to the Consultants. In the event that the contractual relationship between CFS and theConsultants has been terminated, the commission clawback would be accounted for as a receivable from the Consultants by our Group.

Our Directors believe that our Group has objectively estimated the extent and the possibility ofoccurrence of commission clawback and the amount of estimated commission clawback has beenprudently, consistently and fairly reflected in the financial statements.

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Other expenses

Other expenses mainly include rental expenses, marketing expenses, welfare and benefits to theConsultants and professional fees.

The table below sets forth our other expenses for the Track Record Period.

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Rental expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,491 44,201 48,466Marketing expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,523 20,178 11,436Welfare and benefits to the Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,011 4,939 3,231Auditors’ remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 690 615 260Legal and professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,705 1,361 497Office expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,166 15,664 12,127Office removal expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3,340 2,428Travelling and entertainment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,046 3,686 840Administrative service fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,090 1,412Impairment of accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 161 —Impairment/(reversal of impairment) of other receivables, net . . . . . . . . . . . . . . . . 1,834 1,430 (592)Foreign exchange differences, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) 5 67Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,591 9,968 8,710

Total other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,056 106,638 88,882

Other expenses represented approximately 12.7%, 19.2% and 19.5% of our revenue for thethree years ended 31 December 2007, 2008 and 2009, respectively. Our other expenses as a percentageof our revenue increased from 12.7% in 2007 to 19.2% in 2008, which was mainly due to the increasein rental expenses and office removal expenses in 2008. These expenses mainly represented rental forour new office at One Island East, 18 Westlands Road, Island East, Hong Kong and reinstatement coston the old office at Pacific Place, Admiralty, Hong Kong upon the end of lease term. The ratio in 2009maintained at a relatively stable level as in 2008.

Income tax expense

Tax represents amounts of income tax paid/payable by us, at the applicable tax rates inaccordance with the relevant law and regulations in Hong Kong. We had no other tax payable in otherjurisdictions during the Track Record Period. The applicable income tax rates for CFS were 17.5%,16.5% and 16.5% for the three years ended 31 December 2007, 2008 and 2009, respectively.

Our effective income tax rates for the three years ended 31 December 2007, 2008 and 2009were 18.5%, 16.2% and 19.0%, respectively.

MANAGEMENT DISCUSSION AND ANALYSIS OF OUR GROUP’S RESULTS OFOPERATIONS

Year ended 31 December 2008 compared to year ended 31 December 2007

Revenue

Our revenue for the year ended 31 December 2008 was approximately HK$554.3 million,representing a decrease of approximately 12.9% compared with that for the year ended 31 December2007. The decrease was principally attributable to the decrease of approximately 9.1% in the number

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of customers purchasing new products through our Group in 2008, changes in consumer confidenceand the drop in disposable income of individuals as a result of the global economic downturn outburstin the fourth quarter of 2008. As our Group’s revenue is wholly derived from commission income,most of which is received in one-off lump-sum payment from the Product Issuers, the decrease innumber of customers purchasing new products led to the decrease in revenue. Our revenue derivedfrom ILAS decreased by approximately 12.8%, from approximately HK$633.9 million for the yearended 31 December 2007 to approximately HK$552.9 million for the year ended 31 December 2008.The proportion of the revenue derived from ILAS was stable and accounted for approximately 99.7%and 99.8% of our total revenue for the two years ended 31 December 2007 and 2008 respectively. Ourrevenue derived from other insurance products and MPF schemes was insignificant to the results of ourGroup and accounted for approximately 0.1% and 0.2% of our total revenue for the year ended31 December 2008.

Commission expenses

The commission expenses was approximately HK$322.9 million for the year ended31 December 2008, representing a decrease of approximately 11.0% from that for the year ended31 December 2007. The decrease was in line with the decrease of our revenue for the year ended 31December 2008. The ratios of commission expenses to revenue remained stable for the two yearsended 31 December 2007 and 2008 at approximately 57.0% and 58.3% respectively.

Staff costs

The staff cost was approximately HK$63.6 million for the year ended 31 December 2008,representing an increase of approximately 23.4% from that for the year ended 31 December 2007. Thenumber of supporting staff increased from 118 persons as at 31 December 2007 to 156 persons as at31 December 2008. Such increase was in line with expansion of the Consultants from 959 persons as at31 December 2007 to 1,127 persons as at 31 December 2008. Such increase was mainly due to theexpansion in the number of Consultants before the global economic downturn and our Group did notimplement any cost control measures thereafter in 2008.

Depreciation

Depreciation was approximately HK$16.5 million for the year ended 31 December 2008,representing an increase of approximately 11.9% from that for the year ended 31 December 2007. Suchincrease was in line with the increase in purchases of items of property, plant and equipment for theyear ended 31 December 2008.

Commission clawback

Commission clawback was approximately HK$7.3 million for the year ended 31 December2008, representing an increase of approximately 72.8% from that for the year ended 31 December2007. Such increase was mainly due to the expectation of increase in the commission clawback as at31 December 2008 following the global economic downturn outburst in the fourth quarter of 2008.

Other expenses

Other expenses were approximately HK$106.6 million for the year ended 31 December 2008,representing an increase of 31.6% compared with that for the year ended 31 December 2007. Suchincrease was mainly due to the expansion of office space, the Consultants and supporting staff in 2008.

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Income tax expense

Income tax was approximately HK$6.1 million, representing an effective tax rate ofapproximately 16.2% for the year ended 31 December 2008, which is slightly lower than the effectivetax rate of approximately 18.5% for the year ended 31 December 2007. The lower effective tax rate forthe year ended 31 December 2008 as compared to the year ended 31 December 2007 was mainly dueto the decrease in Hong Kong statutory tax rate from 17.5% in 2007 to 16.5% in 2008, and theinclusion of a tax credit of HK$263,000 in relation to the overprovision of tax in prior years in the2008 tax provision whereas a tax charge of HK$920,000 in relation to the underprovision of tax inprior years was included in the 2007 tax provision.

Profit for the year and net profit margin

The profit for the year was approximately HK$31.5 million for the year ended 31 December2008, representing a decrease of 68.9% compared with that for the year ended 31 December 2007. Thenet profit margin decreased from approximately 15.9% for the year ended 31 December 2007 toapproximately 5.7% for the year ended 31 December 2008, primarily as a result of (i) the decrease inrevenue of approximately HK$81.8 million due to the decrease of approximately 9.1% in the numberof customers purchasing new products through our Group in 2008 given that most of our revenue wasreceived in one-off lump-sum payment from the Product Issuers as a result of the global economicdownturn in the fourth quarter of 2008; (ii) the increase in staff costs of approximately HK$12.1million mainly due to the expansion in the number of Consultants before the global economicdownturn and our Group did not implement any cost control measures thereafter in 2008; (iii) theincrease in commission clawback of approximately HK$3.1 million mainly due to the expectation ofincrease in the commission clawback as at 31 December 2008 following the global economic downturnoutburst in the fourth quarter of 2008; and (iv) the increase in other expenses of approximatelyHK$25.6 million mainly due to the expansion of office space, the Consultants and supporting staff.

Year ended 31 December 2009 compared to year ended 31 December 2008

Revenue

Our revenue for the year ended 31 December 2009 was approximately HK$455.6 million,representing a decrease of approximately 17.8% compared with that for the year ended 31 December2008. The decrease was principally attributable to the decrease of approximately 15.7% in the numberof customers purchasing new products through our Group in 2009, changes in consumer confidenceand the drop in disposable income of individuals as a result of the global economic downturn outburstin 2008 and its aftermath in 2009. As our Group’s revenue is wholly derived from commission income,most of which is received in one-off lump-sum payment from the Product Issuers, the decrease innumber of customers purchasing new products led to the decrease in revenue. Our revenue derivedfrom ILAS decreased by approximately 13.6%, from approximately HK$522.9 million for the yearended 31 December 2008 to approximately HK$451.6 million for the year ended 31 December 2009.The proportion of the revenue derived from ILAS remained stable and accounted for approximately99.7% and 99.1% of our revenue for the two years ended 31 December 2008 and 2009 respectively.Our revenue derived from other insurance products and MPF schemes was insignificant to the resultsof our Group and accounted for approximately 0.7% and 0.1% of our total revenue for the year ended31 December 2009.

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Commission expenses

The commission expenses were approximately HK$253.5 million for the year ended31 December 2009, representing a decrease of approximately 21.5% from that for the year ended31 December 2008. The decrease was in line with the decrease of the revenue for the year ended31 December 2009. The ratios of commission expenses to revenue remained stable for the two yearsended 31 December 2008 and 2009 at approximately 58.3% and 55.7% respectively.

Staff costs

The staff cost was approximately HK$44.9 million for the year ended 31 December 2009,representing a decrease of approximately 29.3% from that for the year ended 31 December 2008. Thenumber of supporting staff decreased from 156 persons as at 31 December 2008 to 119 persons as at31 December 2009. Such decrease in staff costs was mainly due to salary cut of some seniormanagement of our Group and Directors and the reduction of the number of supporting staff of ourGroup, given that the financial performance of CFS was adversely affected as a result of the globaleconomic downturn in the fourth quarter of 2008.

Depreciation

Depreciation was approximately HK$16.7 million for the year ended 31 December 2009, whichwas comparable to the amount of approximately HK$16.5 million for the year ended 31 December2008.

Commission clawback

Commission clawback was approximately HK$4.7 million for the year ended 31 December2009, representing a decrease of approximately 36.2% from that for the year ended 31 December 2008.Such decrease was mainly due to the relatively high expectation on the commission clawback as at 31December 2008 following the global economic downturn outburst in the fourth quarter of 2008.

Other expenses

The other expenses were approximately HK$88.9 million for the year ended 31 December2009, representing a decrease of approximately 16.7% compared with that for the year ended 31December 2008. Such decrease was mainly due to cost cutting in response to the global economicdownturn as a result of the financial tsunami.

Income tax expense

Income tax was approximately HK$9.0 million, representing an effective tax rate ofapproximately 19.0% for the year ended 31 December 2009, which is higher than the effective tax rateof approximately 16.2% for the year ended 31 December 2008. The higher effective tax rate for theyear ended 31 December 2009 as compared to 2008 was because of the larger non-deductible expensesincurred for 2009 and the inclusion of a tax charge of HK$175,000 in relation to the underprovision oftax in prior years in the 2009 tax provision whereas a tax credit of HK$263,000 in relation to theoverprovision of tax in prior years was included in the 2008 tax provision.

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Profit for the year and net profit margin

The profit for the year was approximately HK$38.1 million for the year ended 31 December2009, representing an increase of 21.0% compared with that for the year ended 31 December 2008.The net profit margin increased from approximately 5.7% for the year ended 31 December 2008 toapproximately 8.4% for the year ended 31 December 2009, primarily as a result of (i) the decrease instaff costs of approximately HK$18.7 million for the year ended 31 December 2009 mainly due tosalary cut of some senior management of our Group and Directors and the reduction of the number ofsupporting staff of our Group, given that the financial performance of CFS was adversely affected as aresult of the global economic downturn in the fourth quarter of 2008, and (ii) the decrease in otherexpenses of approximately HK$17.8 million for the year ended 31 December 2009 mainly due to costcutting in response to the global economic downturn as a result of the financial tsunami.

LIQUIDITY AND CAPITAL RESOURCES

Our primary uses of cash are to satisfy our working capital needs and our capital expenditureneeds. Since our establishment, our working capital needs and capital expenditure requirements havebeen financed through a combination of shareholders’ equity and cash generated from operations.

The following table is a condensed summary of our combined statements of cash flows for theyears indicated:

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Net cash flows from/(used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . 78,006 (1,768) 157,326Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,914) (22,829) (8,700)Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96,002) (2,005) (86,743)

Net increase/(decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . (35,910) (26,602) 61,883Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,384 48,474 21,872

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,474 21,872 83,755

Cash flows from/(used in) operating activities

We derive our cash inflow from operations principally from the receipts for the brokeragecommission and recurring fee income from the Product Issuers. Our cash outflow from operations isprincipally for payments for commission to the Consultants, staff costs, rental expenses, marketingexpenses and other expenses.

For the year ended 31 December 2009, we recorded net cash flows from operating activities ofapproximately HK$157.3 million, which was primarily attributable to profit before tax ofapproximately HK$47.1 million, decrease in balances with related parties and increase in accountspayable. This was partially offset by the Hong Kong profits tax payment.

For the year ended 31 December 2008, we recorded net cash flows used in operating activitiesof approximately HK$1.8 million, which was primarily attributable to profit before tax ofapproximately HK$37.6 million and the decrease in accounts receivable. This was partially offset bythe increase in balances with related parties, the decrease in accounts payable and the Hong Kongprofits tax payment.

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FINANCIAL INFORMATION

For the year ended 31 December 2007, we recorded net cash flows from operating activities ofapproximately HK$78.0 million, which was mainly attributable to profit before tax of approximatelyHK$124.4 million and the increase in accounts payable. This was partially offset by the increase inbalances with related parties and increase in accounts receivable, prepayments, deposits and otherreceivables.

The change from net cash flows from operating activities for the year ended 31 December 2007to net cash flows used in operating activities for the year ended 31 December 2008 was mainly due tothe decrease in profit before tax for the year ended 31 December 2008, the decreases in accountsreceivable and accounts payable as at 31 December 2008 as a result of the decrease in commissionincome received from the Product Issuers following the global economic downturn outburst in the lastquarter of 2008, payment of Hong Kong profits tax in 2008 and transfer of excess funds to a fellowsubsidiary. There was no payment of Hong Kong profits tax in 2007 since the Hong Kong profits taxof our Group for the fiscal year 2005/2006 was paid in December 2006 while the Hong Kong profitstax for the fiscal year 2006/2007 was paid in March 2008.

The change from net cash flows used in operating activities for the year ended 31 December2008 to net cash flows from operating activities for the year ended 31 December 2009 was mainly dueto the increases in accounts receivable and accounts payable as at 31 December 2009 and receipt in fullof amounts due from related parties during 2009. The increase in accounts receivable and accountspayables was mainly due to the significant increase in revenue and commission expenses as a result ofthe strong performance by our Group in the last quarter of 2009.

Cash flows used in investing activities

We derive our cash inflow from investing activities primarily from interest income. Our cashoutflow from investing activities is primarily for the purchase of computer equipment, leaseholdimprovements and motor vehicles.

For the year ended 31 December 2009, we recorded net cash flows used in investing activitiesof approximately HK$8.7 million, which was primarily due to the purchase of computer equipment,leasehold improvements and motor vehicles during such year.

For the year ended 31 December 2008, we recorded net cash flows used in investing activitiesof approximately HK$22.8 million, which was primarily due to the purchase of computer equipment,leasehold improvements and motor vehicles during such year.

For the year ended 31 December 2007, we recorded net cash flows used in investing activitiesof approximately HK$17.9 million, which was primarily due to the purchase of computer equipment,leasehold improvements and motor vehicles during such year.

The increase in net cash flows used in investing activities for the year ended 31 December 2008was mainly due to the increase in capital expenditure on leasehold improvements of our offices at OneIsland East, 18 Westlands Road, Island East, Hong Kong in 2008 and reduction in interest received.

The decrease in net cash flows used in investing activities for the year ended 31 December2009 was mainly due to the decrease in capital expenditure in 2009 as the leasehold improvements forour offices at One Island East, 18 Westlands Road, Island East, Hong Kong have been substantiallycompleted in 2008.

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FINANCIAL INFORMATION

Cash flows used in financing activities

We derive our cash inflow from financing activities principally from advance from a relatedparty. Our cash outflow from financing activities is principally due to dividends paid and repayment toa related party.

For the year ended 31 December 2009, we recorded net cash flows used in financing activitiesof approximately HK$86.7 million, which was primarily due to dividend payment and repayment to arelated party during such year.

For the year ended 31 December 2008, we recorded net cash flows used in financing activitiesof approximately HK$2.0 million, which was mainly due to repayment to a related party during suchyear.

For the year ended 31 December 2007, we recorded net cash flows used in financing activitiesof approximately HK$96.0 million, which was mainly due to divided payment during such year.

Financial resources

Prior to completion of the Share Offer, our Group’s operations have been financed principallyby Shareholders’ fund and cash generated from our business operations. Our Directors believe that ourGroup will continue to fund our current working capital and capital expenditure requirements throughcash flow from operations, the net proceeds from the Share Offer and our cash and bank deposits. OurDirectors believe that on a long term basis, our Group’s liquidity will be funded from businessoperations and, if necessary, additional equity financing or bank borrowing.

Foreign currency risk

Since most of the revenue and the payment of expenditure are either made in Hong Kongdollars or US dollars, our Directors consider that our Group is not exposed to significant foreignexchange risk.

INDEBTEDNESS

Borrowings

As at the close of business on 30 April 2010, being the latest practicable date for the purpose ofascertaining the information contained in this indebtedness statement prior to the printing of thisprospectus, our Group did not have any outstanding borrowings.

Contingent liabilities

We did not have any outstanding loan capital issued and outstanding or agreed to be issued,term loans, bank overdrafts, other borrowings or other similar indebtedness, liabilities underacceptances (other than normal trade bills) or acceptance credits, debentures, mortgages, charges,finance leases or hire purchase commitments, guarantees or other material contingent liabilities as at30 April 2010.

Our Directors confirm that, up to the Latest Practicable Date, there have been no materialchanges in our indebtedness, capital commitments and contingent liabilities of our Group from30 April 2010.

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FINANCIAL INFORMATION

CAPITAL EXPENDITURES

Our Group’s capital expenditures have principally consisted of expenditures on computerequipment, leasehold improvements and office equipment. For the three years ended 31 December2007, 2008 and 2009, we incurred capital expenditures in the amounts of approximately HK$20.4million, HK$23.1 million and HK$8.7 million, respectively. The decrease in capital expenditure in2009 as compared with 2007 and 2008 is mainly due to the leasehold improvements of our offices atOne Island East, 18 Westlands Road, Island East, Hong Kong having been substantially completed in2008. We have funded our historical capital expenditures through internally generated cash and cashequivalent balances. The following table sets out our Group’s historical capital expenditures during theTrack Record Period:

Year ended 31 December

Historical capital expenditures 2007 2008 2009

HK$’000 HK$’000 HK$’000

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,827 13,164 3,256Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,145 3,388 2,322Computer equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,328 5,008 2,346Motor vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,078 1,560 793

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,378 23,120 8,717

The capital expenditure for the three years ended 31 December 2007, 2008 and 2009 wasprimarily related to the purchases of computer equipment and leasehold improvements for our businessoperations.

COMMITMENTS

Our Group’s contractual commitments are primarily related to the lease of our office premises,staff quarters and certain of our office equipment under operating lease arrangements.

Our Group’s operating lease commitments amounted to HK$88.2 million in the aggregate as at31 December 2009. The following table sets out the future minimum lease payments as at31 December 2009 under non-cancellable operating leases falling due as follows:

As at31 December 2009

HK$’000

Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,991In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,249

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,240

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FINANCIAL INFORMATION

NET CURRENT ASSETS

Details of our current assets and liabilities as at the end of each year during the Track RecordPeriod and as at 30 April 2010 are as follows:

As at 31 DecemberAs at

30 April

2007 2008 2009 2010

HK$’000 HK$’000 HK$’000 HK$’000(unaudited)

Current assetsAccounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,896 14,312 17,139 16,109Prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . 19,647 14,578 20,815 24,242Equity investment at fair value through profit or loss . . . . . . . . . . . . . 288 129 238 228Due from related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,540 88,483 — —Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,474 21,872 83,755 85,542

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174,845 139,374 121,947 126,121

Current liabilitiesAccounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,754 47,956 75,565 53,177Other payables and accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,998 17,938 19,583 14,573Due to a related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,248 14,743 — —Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,684 22,036 15,309 17,224Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,050 7,993 5,913 5,281

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,734 110,666 116,370 90,255

Net current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,111 28,708 5,577 35,866

The net current assets of our Group increased from approximately HK$21.1 million as at31 December 2007 to approximately HK$28.7 million as at 31 December 2008, which was mainly dueto the combined effect of decrease in accounts receivable, accounts payable and cash and cashequivalents balances and increase in amounts due from fellow subsidiaries in the financial year 2008.

The net current assets of our Group decreased from approximately HK$28.7 million as at31 December 2008 to approximately HK$5.6 million as at 31 December 2009. Such decrease wasmainly due to the settlement of amounts due from a related company, fellow subsidiaries and amountdue to the immediate holding company in the financial year 2009.

As at 30 April 2010, the net current assets of our Group increased from approximately HK$5.6million as at 31 December 2009 to approximately HK$35.9 million as at 30 April 2010. Such increasein the net current assets was mainly due to receipt of commission income during the period.

Accounts receivable

Our accounts receivable as at 31 December 2007, 2008 and 2009 were approximately HK$31.9million, HK$14.3 million and HK$17.1 million respectively. Our accounts receivable was primarilyrelated to the brokerage commission income receivable from the authorised insurers.

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FINANCIAL INFORMATION

The following table sets out the aging analysis of our accounts receivable that is not consideredas impaired as at the end of each year during the Track Record Period:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

AgeNeither past due nor impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,730 12,097 17,139Less than 1 month past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,215 —

Total accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,730 14,312 17,139

In general, the brokerage commission income receivable in respect of investment-linkedinsurance products and conventional and general insurance products is settled within 45 days uponreceipt of commission statements. Up to the Latest Practicable Date, all of our accounts receivable asat 31 December 2009 were subsequently settled. For the year ended 31 December 2008, we have madeprovision for impairment on accounts receivable amounting to approximately HK$161,000. Suchimpairment was mainly related to the portion of commission clawback borne by the Consultants, whohad terminated the contractual relationship with CFS prior to the occurrence of such events. There wasno provision for impairment on accounts receivables for the two year ended 31 December 2007 and2009.

The following table sets out our average accounts receivable turnover days for the TrackRecord Period:

Year ended 31 December

2007 2008 2009

Average accounts receivable turnover days (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 13

Note:(1) Average accounts receivable turnover days for the three years ended 31 December 2007, 2008 and 2009 are computed by the average of

the beginning and ending accounts receivable balances for the year, divided by the total revenue for the year and multiplied by 365.

Our average accounts receivable turnover days for the three years ended 31 December 2009remained steady ranging from about 13 days to 15 days.

Prepayments, deposits and other receivables

Prepayments, deposits and other receivables primarily consist of advances to and commissionclawback borne by the Consultants and rental deposits in the Track Record Period.

The following table sets out the details of our prepayments, deposits and other receivables atthe end of each of the reporting dates.

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,713 10,334 20,329Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,385) (4,815) (4,223)

3,328 5,519 16,106

Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,165 1,363 851Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,154 7,696 3,858

Total prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . 19,647 14,578 20,815

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FINANCIAL INFORMATION

The increase in other receivables as at 31 December 2008 was mainly due to the increase incommission clawback borne by the Consultants in the last quarter of 2008 following the globaleconomic downturn outburst and the loan of HK$2 million to the Independent Third Parties (the“Loan”) for an acquisition of the entire interest in two general insurance intermediary companies. Inconsideration of the provision of such financial resources, CFS entered into the Call Option Deed withthe Independent Third Parties and was granted call options to purchase shares of the two generalinsurance intermediary companies. Our Directors have confirmed that the Loan was fully settled inearly 2010. The Call Option Deed was terminated with effect from 1 June 2010 for the reason that ourDirectors cannot be satisfied as to whether the management style of the said two general insuranceintermediary companies could be compatible with that of our Group. The call options pursuant to theCall Option Deed have lapsed upon the termination of the Call Option Deed and up to the date of thesaid termination, such call options were not yet exercisable. Our Directors have further confirmed thatas at the Latest Practicable Date, CFS (i) had not exercised the call options in part or in full; and (ii)had no intention to invest in the relevant general insurance intermediary companies or exercise the calloptions (whether in part or in full).

The increase in other receivables as at 31 December 2009 was mainly due to the increase incommission clawback borne by the Consultants following the global economic downturn outburst inlast quarter of 2008 and the aftermath in 2009 and the short term loan facilities offered to theConsultants as financial assistance. Details of the loan facilities are set out under the paragraph headed“Relationship with Consultants” in the section headed “Business” of this prospectus.

The impairment of the other receivables mainly represented provision for portion ofcommission clawback borne by the Consultants who have terminated the contractual relationship withCFS.

The significant decrease in deposits as at 31 December 2008 was mainly due to theclassification of rental deposit to long term deposit starting from 2008 as our Group paid the rentaldeposit for CFS’s office at One Island East, 18 Westlands Road, Island East, Hong Kong in 2008which our Group expects to be refunded only until the end of the tenancy agreement.

The further decrease in deposits as at 31 December 2009 was mainly due to the refund of rentaldeposit in respect of Lee Garden upon the end of tenancy agreement on 30 April 2009.

Accounts payable

Our accounts payable as at 31 December 2007, 2008 and 2009 was approximately HK$92.8million, HK$48.0 million and HK$75.6 million respectively. Our accounts payable was primarilyrelated to the brokerage commission expenses payable to the Consultants.

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FINANCIAL INFORMATION

The following table sets out the aging analysis of our accounts payable as at the end of eachyear during the Track Record Period:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

AgeWithin 1 month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,187 13,850 25,4831 to 2 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,267 8,808 15,8572 to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,340 8,552 18,265Over 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,960 16,746 15,960

Total accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,754 47,956 75,565

The accounts payable is non-interest bearing and is normally settled within 30 to 120 days. Upto the Latest Practicable Date, over 87% of our accounts payable as at 31 December 2009 wassubsequently settled.

The following table sets out our average accounts payable turnover days for the Track RecordPeriod:

Year ended 31 December

2007 2008 2009

Average accounts payable turnover days(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 80 89

Note:(1) Average accounts payable turnover days for the three years ended 31 December 2007, 2008 and 2009 are computed by the average of the

beginning and ending accounts payable balances for the year, divided by the commission expenses for the year and multiplied by 365.

Our average accounts payable turnover days increased from approximately 73 days for the yearended 31 December 2007 to about 89 days for the year ended 31 December 2009.

Other payables and accruals

Other payables and accruals primarily consist of accruals for effective rent, incentives for theConsultants and other expenses in the Track Record Period.

The following table sets out the details of our other payables and accruals as at the end of eachyear during the Track Record Period:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,224 8,642 4,513Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,774 9,296 15,070

Total other payables and accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,998 17,938 19,583

The decrease in other payables as at 31 December 2009 was mainly due to cost cutting inresponse to the global economic downturn.

The increase in accruals as at 31 December 2009 was mainly due to the increase in incentivesfor the Consultants. The incentives for the Consultants are typically ad-hoc discretionary programannounced by the management of CFS in order to motivate the Consultants and stimulate growth in

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FINANCIAL INFORMATION

revenue. Since these incentive programs are discretionary in nature, they are not specified in theConsultants’ contract for services. There had not been any delays nor any complaints received inrespect of such incentive programs.

DISTRIBUTABLE RESERVES

Our Company was incorporated on 12 March 2010. As at 31 December 2009, our Companyhad no reserves available for distribution to our equity holders.

OUR DIVIDEND POLICY

During the year ended 31 December 2007, CFS declared a dividend in the sum of HK$100.0million.

During the year ended 31 December 2008, CFS declared a dividend in the sum of HK$7.5million.

During the year ended 31 December 2009, CFS declared a dividend in the sum of HK$72.0million.

The above dividends were fully settled as at the Latest Practicable Date. Save for the above, wedid not declare nor pay any dividends to the Shareholders or any of our subsidiaries during the TrackRecord Period.

The declaration, payment and amount of dividends are at the discretion of our Directors andwill be dependent upon our Company’s earnings, financial condition, cash requirements andavailability, the provision of relevant law, and such other factors as our Directors may from time totime consider to be relevant. Our Directors currently have no intended dividend payout ratio for theyear ending 31 December 2010.

Dividends may be paid only out of our distributable profits as permitted under the relevantlaws. To the extent profits are distributed as dividends, such portion of profits will not be available tobe reinvested in our operations. There can be no assurance that we will be able to declare or distributeany dividend in the amount set out in any plan of the Board or at all. The dividend distribution recordin the past may not be used as a reference or basis to determine the level of dividends that may bedeclared or paid by us in the future.

PROPERTY INTERESTS AND PROPERTY VALUATION

As at the Latest Practicable Date, our Group leased six premises in Hong Kong respectivelyfrom four Independent Third Parties as our offices and staff quarters. The details of which are set out inAppendix III to this prospectus.

Grant Sherman Appraisal Limited, an independent property valuer, has valued our propertyinterest as at 31 March 2010 and is of the opinion that the value of our property interests is of nocommercial value. The full text of the letter, summary of values and valuation certificates with regardto such property interests are set out in Appendix III to this prospectus.

148

FINANCIAL INFORMATION

UNAUDITED PRO FORMA ADJUSTED COMBINED NET TANGIBLE ASSETS

The following unaudited pro forma adjusted combined net tangible assets prepared on the basisof the notes set out below to illustrate the effect of the Share Offer on our net tangible assets as at31 December 2009 as if they had taken place on that date. The unaudited pro forma adjusted combinednet tangible assets of our Group have been prepared for illustrative purpose only and, because of theirhypothetical nature, they may not give a true picture of our net tangible assets had the Share Offer beencompleted as at 31 December 2009 or at any future date.

The unaudited pro forma adjusted combined net tangible assets are calculated based on ouraudited combined net tangible assets attributable to the owner of our Company as at 31 December2009, as shown in the unaudited pro forma financial information, the text of which is set out inAppendix II to this prospectus, and is adjusted as described below.

Audited combinednet tangible assetsof our Group asat 31 December

2009

Estimated netproceeds from

the ShareOffer

Unauditedpro forma

adjusted combinednet tangible assets

Unauditedpro formaadjustedcombined

net tangibleassets per

Share

HK$’000 HK$’000 HK$’000 (Note 2)(Note 1)

Based on the Offer Price of HK$1.00 perShare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,948 85,000 130,948 HK32.7 cents

Based on the Offer Price of HK$1.20 perShare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,948 105,000 150,948 HK37.7 cents

Notes:(1) The estimated net proceeds from the Share Offer of 100,000,000 new Offer Shares are based on the Offer Price of HK$1.00 and

HK$1.20 per Share, after deduction of the underwriting fees and other related expenses.

(2) The unaudited pro forma adjusted combined net tangible assets per Share is arrived at after the adjustment for the estimated net proceedsfrom the Share Offer payable to us as described in Note (1) above and on the basis that a total of 400,000,000 Shares were in issue(including Shares in issue as at the date of this prospectus and those Shares to be issued pursuant to the Share Offer).

QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISKS

Interest rate risk

Our Group is exposed to interest rate risk through the impact of rate changes on interest-bearingfinancial assets. Cash at banks earns interest at floating rates based on daily bank deposit rates.

Credit risk

Our Group conducts business only with recognised and creditworthy third parties. Receivablebalances are monitored on an ongoing basis and our Group’s exposure to bad debts is not significant.

The credit risk of our Group’s financial assets, which comprise accounts receivable, depositsand other receivables, amounts due from related companies and fellow subsidiaries and bank balances,arises from default of the counterparty, with a maximum exposure equal to the carrying amounts ofthese instruments.

Further quantitative data in respect of our Group’s exposure to credit risk arising from accountsreceivable and other receivables are disclosed in note 31 to the accountants’ report set out inAppendix I to this prospectus.

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FINANCIAL INFORMATION

Liquidity risk

In the management of liquidity risk, our Group monitors and maintains level of cash and cashequivalents deemed adequate by management to finance our Group’s operations and mitigate theeffects of fluctuations in cash flows. Our Group also maintains a balance between continuity of fundingand flexibility through the funding from a holding company.

WORKING CAPITAL

Our Directors believe that after taking into account the financial resources available to us,including internally generated funds and the estimated net proceeds from the Share Offer, we havesufficient working capital for our present working capital requirements for at least the next 12 monthsfrom the date of this prospectus.

NO MATERIAL ADVERSE CHANGE

Our Directors confirm that, up to the Latest Practicable Date, there has been no materialadverse change in the financial or trading position or prospects of us since 31 December 2009, beingthe date on which the latest financial information of our Group was reported in the accountants’ reportset out in Appendix I to this prospectus.

DISCLOSURE REQUIRED UNDER THE LISTING RULES

Our Directors confirm that, as at the Latest Practicable Date, there were no circumstances thatwould give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.

150

FUTURE PLANS AND USE OF PROCEEDS

FUTURE PLANS

Please refer to the paragraph headed “Our business strategies” in the section headed “Business”in this prospectus for further details of our future plans.

USE OF NET PROCEEDS

Our Directors intend to apply the net proceeds from the Share Offer to finance our capitalexpenditure and business expansion, strengthen our capital base and improve our overall financialposition. Based on the Offer Price of HK$1.10 per Offer Share (being the mid-point of the indicativeOffer Price range between HK$1.00 and HK$1.20 per Offer Share), the net proceeds from the ShareOffer, after deducting underwriting commission and estimated expenses payable by us in connectionthereto, are estimated to be approximately HK$94 million. We presently intend to apply such netproceeds from the Share Offer as follows:

Š as to approximately HK$25 million or approximately 26.6% of the net proceeds from theShare Offer, will be used for enhancement of the quality of the Consultants throughoffering of (i) various external and internal continuous professional training programs; (ii)subsidies on recognised professional qualification courses; and (iii) incentives inrecruitment of Consultants from other professions and countries, and expansion of theteams of Consultants through (a) offering of incentives in speeding up the organic growthunder the Development Model; and (b) organising recruitment functions targetingindividuals from different market sectors and other countries;

Š as to approximately HK$25 million or approximately 26.6% of the net proceeds from theShare Offer, will be used for expansion and promotion of ILAS, MPF schemes and otherinsurance businesses by (i) increasing promotional and marketing spending in our ILAS,MPF schemes and other insurance businesses to the general public; and (ii) offering salesincentive and promotional events to the Consultants;

Š as to approximately HK$25 million or approximately 26.6% of the net proceeds from theShare Offer, will be used for exploration of merger and acquisition opportunities andbusiness collaboration with well-established companies, where no target or potentialbusiness collaboration with well-established companies had been identified as at the LatestPracticable Date;

Š as to approximately HK$15 million or approximately 16.0% of the net proceeds from theShare Offer, will be used for addition and extension of further services and distributionchannels by developing an on-line application system and a comprehensive informationmanagement system and expanding our distribution network to e-marketing and direct-marketing channels; and

Š as to approximately HK$4 million or approximately 4.2% of the net proceeds from theShare Offer, will be used for working capital and other general corporate purposes.

If the Offer Price is finally determined at the highest end of the indicative Offer Price rangebetween HK$1.00 and HK$1.20 per Offer Share, the net proceeds from the Share Offer will increaseby approximately HK$10 million to approximately HK$104 million. In such event, our Directorsintend to apply such additional net proceeds for the above usages on a pro-rata basis.

If the Offer Price is finally determined at the lowest end of the indicative Offer Price rangebetween HK$1.00 and HK$1.20 per Offer Share, the net proceeds from the Share Offer will reduce

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FUTURE PLANS AND USE OF PROCEEDS

by approximately HK$10 million to approximately HK$84 million. In such event, our Directors intendto reduce the intended use of proceeds for the above stated purposes on a pro-rata basis and we willfinance such shortfall by internal cash resources and/or additional bank borrowings, as and whenappropriate.

To the extent that the net proceeds from the Share Offer are not immediately required for theabove purposes or if we are unable to effect any part of our future development plans as intended, wemay hold such funds in short-term deposits with licensed banks and/or authorised financial institutionsin Hong Kong for so long as it is in our best interest. We will also disclose the same in the relevantannual report.

152

UNDERWRITING

JOINT LEAD MANAGERSQuam Securities Company LimitedConvoy Investment Services Limited

BOOKRUNNERQuam Securities Company Limited

PUBLIC OFFER UNDERWRITERSQuam Securities Company LimitedConvoy Investment Services LimitedCelestial Securities LimitedChina Merchants Securities (HK) Co., LimitedUOB Kay Hian (Hong Kong) Limited

PLACING UNDERWRITERSQuam Securities Company LimitedConvoy Investment Services LimitedCelestial Securities LimitedChina Merchants Securities (HK) Co., LimitedUOB Kay Hian (Hong Kong) Limited

UNDERWRITING ARRANGEMENTS AND EXPENSES

Underwriting Agreement

Pursuant to the Underwriting Agreement, our Company is initially offering for subscription of10,000,000 Shares at the Offer Price under the Public Offer, subject to the terms and conditions setforth in this prospectus and the related Application Forms, and 90,000,000 Shares at the Offer Priceunder the Placing, subject to the terms and conditions set forth in this prospectus. The Public OfferUnderwriters have agreed severally (and not jointly or jointly and severally), subject to the terms andconditions in the Underwriting Agreement, to procure subscribers for, or failing which they shallsubscribe for, the Public Offer Shares. The Placing Underwriters have agreed severally (and not jointlyor jointly and severally), subject to the terms and conditions in the Underwriting Agreement, to procuresubscribers for, or failing which they shall subscribe for, the Placing Shares.

The Underwriting Agreement is subject to various conditions, which include, but withoutlimitation, (i) the Listing Committee of the Stock Exchange granting listing of, and permission to dealin, our Shares in issue and to be issued as mentioned in this prospectus; and (ii) the agreement of theOffer Price being entered into on the Price Determination Date.

153

UNDERWRITING

Grounds for termination

The obligations of the Underwriters to subscribe for, or procure subscribers to subscribe for, theOffer Shares are subject to termination. The Underwriters shall be entitled to terminate theirobligations under the Underwriting Agreement upon the occurrence of any of the following events bynotice in writing to our Company given by the Joint Lead Managers (for themselves and on behalf ofthe Underwriters) at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date (the“Termination Time”) if prior to the Termination Time,

(a) there comes to the notice of the Sponsor, any of the Joint Lead Managers or any of theUnderwriters:

(i) any matter or event showing any of the representations, warranties or undertakingscontained in the Underwriting Agreement to be untrue, inaccurate or misleading in anymaterial respect when given or repeated or there has been a breach of any of therepresentations, warranties or undertakings contained in the Underwriting Agreement orany other provisions of the Underwriting Agreement by any party thereto other than theSponsor, the Joint Lead Managers and the Underwriters which, in any such cases, isconsidered, in the sole opinion of the Joint Lead Managers, to be material in the context ofthe Share Offer;

(ii) any statement contained in this prospectus has become or been discovered to be untrue,incorrect or misleading in any material respect;

(iii) any event, series of events, matter or circumstances occurs or arises on or after the date ofthe Underwriting Agreement and before the Termination Time, being events, matters orcircumstances which, if it had occurred before the date of the Underwriting Agreement,would have rendered any of the representations, warranties or undertakings contained in theUnderwriting Agreement untrue, incorrect or misleading in any material respect, and whichis considered, in the sole opinion of the Joint Lead Managers, to be material in the contextof the Share Offer;

(iv) any matter which, had it arisen or been discovered immediately before the date of thisprospectus and not having been disclosed in this prospectus, would have constituted, in thesole opinion of the Joint Lead Managers, a material omission in the context of the ShareOffer;

(v) any event, act or omission which gives or is likely to give rise to any liability of ourCompany and any of the covenantors under the Underwriting Agreement arising out of orin connection with the breach of any of the representations, warranties or undertakingscontained in the Underwriting Agreement; or

(vi) any breach by any party to the Underwriting Agreement other than the Sponsor, the JointLead Managers and the Underwriters of any provision of the Underwriting Agreementwhich, in the sole opinion of the Joint Lead Managers, is material; or

(b) there shall have developed, occurred, existed, or come into effect any event or series of events,matters or circumstances whether occurring or continuing before, on and/or after the date of theUnderwriting Agreement and including an event or change in relation to or a development of anexisting state of affairs concerning or relating to any of the following:

(i) any new law or regulation or any change in existing laws or regulations or any change inthe interpretation or application thereof by any court or other competent authority in theBVI, the Cayman Islands, Hong Kong, the PRC, the US or any of the jurisdictions in which

154

UNDERWRITING

our Group operates or has or is deemed by any applicable law to have a presence (bywhatever name called) or any other jurisdiction relevant to the business of our Group whichis material to the conditions, business affairs, profits, losses or the financial or tradingposition of any member of our Group or otherwise material in the context of the ShareOffer;

(ii) any change in, or any event or series of events or development resulting or likely to result inany change in local, regional or international financial, currency, political, military,industrial, economic, stock market or other market conditions or prospects;

(iii) any change in the conditions of Hong Kong, the PRC, the US or international equitysecurities or other financial markets;

(iv) the imposition of any moratorium, suspension or restriction on trading in securitiesgenerally on any of the markets operated by the Stock Exchange due to exceptionalfinancial circumstances or otherwise;

(v) any change or development involving a prospective change in all forms of taxation orexchange control (or the implementation of any exchange control) in BVI, the CaymanIslands, Hong Kong or any of the jurisdictions in which our Group operates or has or isdeemed by any applicable law to have a presence (by whatever name called) or otherjurisdiction relevant to the business of our Group;

(vi) the imposition of economic sanction or withdrawal of trading privileges, in whatever form,by the US, the European Union (or any member thereof) or any of the jurisdictions in whichour Group conducts business on Hong Kong which is material to the conditions, businessaffairs, profits, losses or the financial or trading position of any member of our Group orotherwise material in the context of the Share Offer;

(vii) a general moratorium on commercial banking activities in Hong Kong declared by therelevant authorities; or

(viii) any event of force majeure including, without limiting the generality thereof, any act ofGod, military action, riot, public disorder, civil commotion, fire, flood, tsunami, explosion,epidemic, terrorism, strike or lock-out,

which, in the sole opinion of the Joint Lead Managers:

(i) is or will be, or is very likely to be, adverse, in any material respect, to the business,financial or other conditions or prospects of our Group;

(ii) has or will have or is very likely to have a material adverse effect on the success of theShare Offer or the level of the Offer Shares being applied for or accepted, the distribution ofthe Offer Shares or the demand for or the market price of our Shares following the Listing;or

(iii) for any other reason makes it impracticable, inadvisable or inexpedient for the Underwritersto proceed with the Share Offer as a whole.

For the above purpose:

(i) a change in the system under which the value of the Hong Kong currency is linked to thatof the currency of the US or a devaluation of the Renminbi against any foreign currenciesshall be taken as an event resulting in a change in currency conditions; and

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UNDERWRITING

(ii) any normal fluctuations in the Hong Kong, the US or international equity securities or otherfinancial markets shall not be construed as events or series of events affecting marketconditions referred to above.

Commission and expenses

The Underwriters will receive an underwriting commission of 3.0% of the aggregate OfferPrice payable for the Offer Shares in accordance with the terms of the Underwriting Agreement, out ofwhich the Underwriters may pay any sub-underwriting commission in connection with the Share Offer.The Sponsor will also receive a documentation fee. The aggregate fees, together with the underwritingcommission, listing fees, legal and other professional fees, printing, translation and other fees andexpenses relating to the Share Offer, are estimated to be approximately HK$16 million (based on theOffer Price of HK$1.10 per Offer Share, being the mid-point of the indicative range of the Offer Pricebetween HK$1.00 and HK$1.20), which will be payable by us.

Undertakings

Pursuant to the Underwriting Agreement, each of the Controlling Shareholders has undertakento and covenanted with our Company, the Sponsor, the Joint Lead Managers and the Underwriters that:

(i) he/she/it shall not, and shall procure that his/her/its associates or companies controlled byhim/it or any nominee or trustee holding in trust for him/her/it shall not, sell, transfer orotherwise dispose of (including without limitation the entering into agreement to disposeof or otherwise create any options, rights, interests or encumbrances in respect of but savepursuant to a pledge or charge as security in favour of an authorised institution (as definedin the Banking Ordinance) for a bona fide commercial loan) any of the Shares or securitiesof our Company owned by him/her/it or the relevant company, nominee or trustee(including any interest in any shares in any company controlled by him/her/it which isdirectly or indirectly the beneficial owner of any of the Shares or securities of ourCompany) immediately following completion of the Share Offer (the “RelevantSecurities”) within the period commencing on the Latest Practicable Date and ending sixmonths from the Listing Date (the “First Six-Month Period”);

(ii) he/she/it shall not, and shall procure that his/her/its associates or companies controlled byhim/her/it or any nominee or trustee holding in trust for him/her/it shall not, within theperiod of a further six months immediately after the expiry of the First Six-Month Period,sell, transfer or otherwise dispose of (including without limitation, the entering intoagreement to dispose of or otherwise create any options, rights, interests or encumbrancesin respect of but save pursuant to a pledge or charge as security in favour of an authorisedinstitution (as defined in the Banking Ordinance) for a bona fide commercial loan) any ofthe Relevant Securities, if immediately following such sale, transfer or disposal, theControlling Shareholders, taken as a whole, would cease to be a controlling shareholder(within the meaning in the Listing Rules) of our Company or hold directly or indirectly acontrolling interest (being an interest of over 30% or such other amount as may from timeto time be specified in the Takeover Code as being the level for triggering a mandatorygeneral offer) in our Company; and

(iii) in the event of any such sale, transfer or disposal of Shares or any such interest referred toin (i) and (ii) above, all reasonable steps shall be taken to ensure that such sale, transfer or

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UNDERWRITING

disposal shall be effected in such a manner so as not to create a disorderly or false marketfor the Shares.

Each of the Controlling Shareholders has also undertaken to our Company, the StockExchange, the Sponsor and the Joint Lead Managers (for themselves and on behalf the Underwriters)that, within the period commencing on the date of this prospectus and ending on the date which istwelve months from the Listing Date, he/she/it will:

(i) when he/she/it or the registered owner pledges or charges any securities or interests in thesecurities of our Company beneficially owned by him/her/it, whether directly or indirectly,in favour of an authorised institution pursuant to Note (2) to Rule 10.07(2) of the ListingRules immediately inform our Company, the Stock Exchange, the Sponsor and the JointLead Managers in writing of such pledge or charge together with the number of securitiesso pledged or charged; and

(ii) when he/she/it receives indications, either verbal or written, from any pledgee or chargeethat any of the pledged or charged securities or interests in the securities of our Companywill be sold, transferred or disposed of, immediately inform our Company, the StockExchange, the Sponsor and the Joint Lead Managers in writing of such indications.

Our Company will inform the Stock Exchange as soon as practicable after we have beeninformed of the matters referred to in (i) or (ii) above by any Controlling Shareholder and disclose suchmatters by way of an announcement in compliance with the Listing Rules.

Our Company has also undertaken to and covenanted with the Sponsor, the Joint LeadManagers and the Underwriters and each of the Controlling Shareholders has undertaken to theSponsor, the Joint Lead Managers and the Underwriters that no further Shares or securities convertibleinto equity securities of our Company (whether or not of a class already listed) may be issued or formthe subject of any agreement to such an issue within six months from the Listing Date (whether or notsuch issue of Shares or securities will be completed within six months from the Listing Date), exceptfor:

(i) the issue of Shares, the listing of which has been approved by the Stock Exchange,pursuant to the Share Option Scheme; and

(ii) any capitalisation issue, capital reduction or consolidation or sub-division of Shares.

SPONSOR’S, JOINT LEAD MANAGERS’ AND UNDERWRITERS’ INTEREST IN OURCOMPANY

The Sponsor will receive a documentation fee. The Joint Lead Managers including (CIS, awholly-owned subsidiary of CFG and therefore a connected person of our Company) and the otherUnderwriters will receive an underwriting commission. Particulars of these underwriting commissionand expenses are set forth under the paragraph headed “Commission and expenses” above in thissection.

We has appointed Quam Capital as our compliance adviser pursuant to Rule 3A.19 of theListing Rules for the period commencing on the Listing Date and ending on the date on which ourCompany complies with Rule 13.46 of the Listing Rules in respect of our financial results for the firstfull financial year commencing after the Listing Date.

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UNDERWRITING

Save as disclosed above, none of the Sponsor, the Joint Lead Managers and the Underwriters isinterested legally or beneficially in shares of any members of our Group or has any right or option(whether legally enforceable or not) to subscribe for or purchase or to nominate persons to subscribefor or purchase securities in any of our members nor any interest in the Share Offer.

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

THE STRUCTURE OF THE SHARE OFFER

The Share Offer consists of the Public Offer and the Placing.

Quam Securities Company Limited and Convoy Investment Services Limited are the Joint LeadManagers.

An aggregate of 10,000,000 Shares have been initially allocated to the Public Offer forsubscription, subject to re-allocation as mentioned below and under the Listing Rules. An aggregate of90,000,000 Shares are initially offered under the Placing for subscription, subject to re-allocation asmentioned below and under the Listing Rules.

Investors are free to select to apply for the Public Offer Shares or the Placing Shares, but theymay only receive Shares under the Public Offer OR the Placing but not both. Our Directors and theJoint Lead Managers will take all reasonable steps to identify any multiple applications under thePublic Offer and the Placing which are not allowed and are bound to be rejected.

PRICE PAYABLE UPON APPLICATION FOR THE PUBLIC OFFER SHARES

Investors of the Public Offer Shares will be required to pay the maximum indicative Offer Priceof HK$1.20 plus 1% brokerage, 0.004% transaction levy imposed by the SFC and 0.005% StockExchange trading fee, amounting to a total of HK$2,424.22 for each board lot of 2,000 Shares. If thefinal Offer Price is less than the maximum indicative Offer Price, arrangements will be made to refundany excess amount to the investors, WITHOUT INTEREST.

CONDITIONS OF THE SHARE OFFER

Acceptance of applications for the Public Offer Shares will be conditional upon:

Š the Listing Committee of the Stock Exchange granting the listing of, and permission todeal in, on the Stock Exchange, our Shares in issue, the Offer Shares and any Shareswhich may fall to be issued pursuant to any options that may be granted under the ShareOption Scheme;

Š the agreement on the Offer Price between our Company and the Joint Lead Managers (forthemselves and on behalf of the Underwriters) being entered into on the PriceDetermination Date; and

Š the obligations of the Underwriters under the Underwriting Agreement becomingunconditional (including, if relevant, as a result of a waiver of any condition(s)) and notbeing terminated in accordance with the terms and conditions of the UnderwritingAgreement,

in each case, on or before the dates and times specified in the Underwriting Agreement (unless and tothe extent such conditions are validly waived on or before such dates and times) and in any event notlater than the date which is 30 days after the date of this prospectus.

If any of the above conditions has not been fulfilled or waived prior to the time(s) anddate(s) specified, the Share Offer will lapse and the Stock Exchange will be notified immediately.Notice of lapse of the Share Offer will be caused to be published by our Company on the StockExchange’s website at www.hkexnews.hk and our Company’s website at www.convoy.com.hk the

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

next day following such lapse. In such event, all application money will be refunded, WITHOUTINTEREST. The terms on which the application money will be refunded are set forth under “Refundof your application money” on the Application Forms. In the meantime, all application money receivedfrom the Public Offer will be held in a separate bank account (or separate bank accounts).

THE PUBLIC OFFER

Our Company is initially offering 10,000,000 Shares under the Public Offer, at the Offer Price,representing 10% of the Offer Shares, for subscription by way of a public offer in Hong Kong, subjectto the re-allocation as mentioned below. The Public Offer is lead managed by the Joint Lead Managersand is fully underwritten by the Public Offer Underwriters (subject to our Company and the Joint LeadManagers agreeing to the final Offer Price). Applicants for the Public Offer Shares are required to payon application the maximum indicative Offer Price of HK$1.20 per Offer Share plus 1% brokerage,0.004% transaction levy imposed by the SFC and 0.005% Stock Exchange trading fee.

The Public Offer is open to all members of the public in Hong Kong. An applicant for thePublic Offer Shares will be required to give an undertaking and confirmation in the Application Formthat he or she or it has not taken up and will not indicate an interest to take up any Placing Shares norotherwise participated in the Placing. Applicants should note that if such undertaking and/orconfirmation given by the applicant is breached and/or is untrue (as the case may be), such applicant’sapplication under the Public Offer is bound to be rejected. The Public Offer will be subject to theconditions stated under the paragraph headed “Conditions of the Share Offer” above.

If the Public Offer is not fully subscribed for, the Joint Lead Managers (for themselves and onbehalf of the Public Offer Underwriters) have the authority to re-allocate all or any of the unsubscribedPublic Offer Shares originally included in the Public Offer to the Placing, in such number as it deemsappropriate to satisfy demand under the Placing.

The total number of the Public Offer Shares to be allotted and issued may change as a result ofthe re-allocation as mentioned below.

Basis of allocation of the Public Offer Shares

For allocation purpose only, the number of the Public Offer Shares (after taking into accountany re-allocation referred to below) will be divided equally into two pools: pool A and pool B. ThePublic Offer Shares available in pool A will be allocated on an equitable basis to applicants who haveapplied for the Public Offer Shares in the aggregate value of HK$5 million (excluding transaction levyimposed by the SFC, the Stock Exchange trading fee and the brokerage payable thereon) or less. ThePublic Offer Shares available in pool B will be allocated on an equitable basis to applicants who haveapplied for the Public Offer Shares in the aggregate value of more than HK$5 million (excludingtransaction levy imposed by the SFC, the Stock Exchange trading fee and the brokerage payablethereon) and up to the total initial value of pool B.

Investors should be aware that allocation ratios for applications in the two pools, as well as theallocation ratios for applications in the same pool, are likely to be different. Where one of the pools isunder-subscribed, the unsubscribed Public Offer Shares will be transferred to satisfy the demand in theother pool and be allocated accordingly. Applicants can only receive an allocation of Public OfferShares from any one pool but not from both pools. Any application made for more than 100% ofPublic Offer Shares initially available under pool A or pool B is bound to be rejected.

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

THE PLACING

Our Company is initially offering 90,000,000 Shares at the final Offer Price, representing 90%of the Offer Shares, for subscription by way of the Placing, subject to re-allocation as mentioned belowand under the Listing Rules.

Investors subscribing for the Placing Shares are also required to pay 1% brokerage, 0.004%transaction levy imposed by the SFC and 0.005% Stock Exchange trading fee.

All decisions concerning the allocation of the Placing Shares to prospective placees pursuant tothe Placing will be made on the basis of, and by reference to, a number of factors including the leveland timing of demand, the total size of the relevant investor’s invested assets or equity assets in therelevant sector and whether or not the relevant investor is expected or likely to buy further Shares, orhold or sell our Shares, after the Listing Date. Such allocation is intended to result in a distribution ofthe Placing Shares on a basis which would lead to the establishment of a solid shareholders base for thebenefit of our Company. In addition, our Company and the Joint Lead Managers will use their bestendeavours to observe the minimum public float requirement under the Listing Rules when makingallocations of the Placing Shares to investors who are anticipated to have a sizeable demand for suchShares.

The total number of the Placing Shares to be allotted and issued may change as a result ofre-allocation mentioned below and any re-allocation of the unsubscribed Public Offer Shares to thePlacing as mentioned under the paragraph headed “The Public Offer” in this section.

RE-ALLOCATION BETWEEN THE PLACING AND THE PUBLIC OFFER

The allocation of Offer Shares between the Public Offer and the Placing is subject toadjustment on the following basis:

(i) if the number of Shares validly applied for under the Public Offer represents 15 times ormore but less than 50 times the initial number of the Public Offer Shares, then the numberof Shares to be re-allocated to the Public Offer from the Placing will increase so that thetotal number of Shares available for subscription under the Public Offer will increase to30,000,000 Shares, representing 30% of the total number of the Offer Shares availableunder the Share Offer;

(ii) if the number of Shares validly applied for under the Public Offer represents 50 times ormore but less than 100 times the initial number of the Public Offer Shares, then thenumber of Shares to be re-allocated to the Public Offer from the Placing will increase sothat the total number of Shares available for subscription under the Public Offer willincrease to 40,000,000 Shares, representing 40% of total number of the Offer Sharesavailable under the Share Offer; and

(iii) if the number of Shares validly applied for under the Public Offer represents 100 times ormore the initial number of the Public Offer Shares, then the number of Shares to bere-allocated to the Public Offer from the Placing will increase so that the total number ofShares available for subscription under the Public Offer will increase to 50,000,000Shares, representing 50% of the total number of the Offer Shares available under the ShareOffer.

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STRUCTURE AND CONDITIONS OF THE SHARE OFFER

In each such case, the additional Shares re-allocated to the Public Offer will be allocatedequally between pool A and pool B and the number of the Placing Shares will be correspondinglyreduced.

Details of any re-allocation of Offer Shares between the Public Offer and the Placing will bedisclosed in the results announcement of the Share Offer, which is expected to be published onMonday, 12 July 2010.

LISTING DATE

Assuming that the Share Offer becomes unconditional, it is expected that dealings in our Shareson the Main Board will commence at 9:30 a.m. (Hong Kong time) on Tuesday, 13 July 2010.

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CORNERSTONE INVESTOR

THE CORPORATE PLACING

Our Company and the Joint Lead Managers have entered into a corporate investor agreement(the “Cornerstone Investor Agreement”) with Manulife International Holdings Limited (the“Cornerstone Investor”) who has agreed to subscribe for the maximum number of our Shares thatmay be purchased with HK$21,120,000 at the Offer Price (exclusive of brokerage, SFC transactionlevy and Stock Exchange trading fee), but subject to a maximum of such number of our Shares whichshall represent 4.8% (equivalent to 19.2 million Shares) of the enlarged total issued share capital of ourCompany upon the Listing, rounded down to the nearest board lot of our Shares (the “CorporatePlacing”).

Based on the Offer Price of HK$1.10 per Share, being the mid-point of the proposed OfferPrice range of HK$1.00 to HK$1.20 per Share, the Shares to be subscribed by the Cornerstone Investorwill be 19.2 million Shares, representing approximately 4.8% of the total issued share capital of ourCompany immediately after completion of the Share Offer and approximately 19.2% of the total OfferShares initially available under the Share Offer.

The Corporate Placing forms part of the Placing. The Cornerstone Investor will not subscribefor any Offer Shares under the Share Offer, other than pursuant to the Cornerstone InvestorAgreement. The Offer Shares to be subscribed by the Cornerstone Investor will rank pari passu in allrespects with the fully paid Shares in issue and will be counted towards the public float of ourCompany. Immediately following the completion of the Share Offer, the Cornerstone Investor will nothave representation on the Board, nor will it become a substantial Shareholder of our Company. TheOffer Shares to be subscribed by the Cornerstone Investor will not be affected by any re-allocation ofthe Offer Shares between the Placing and the Public Offer in the event of over-subscription under thePublic Offer as described under the paragraph headed “Re-allocation between the Placing and thePublic Offer” in the section headed “Structure and conditions of the Share Offer” in this prospectus.

INFORMATION ON THE CORNERSTONE INVESTOR

The Cornerstone Investor is a private company incorporated in Bermuda and is an indirectwholly-owned subsidiary of Manulife Financial Corporation whose shares are traded on the StockExchange with stock code “945”.

The Cornerstone Investor is the holding company of one of the Product Issuers.

CONDITIONS PRECEDENT

The Corporate Placing is conditional upon (i) the Underwriting Agreement having been enteredinto and having become unconditional by no later than the times and dates specified therein; (ii) theOffer Price having been agreed upon between our Company and the Joint Lead Managers (forthemselves and on behalf of the Underwriters); (iii) the Underwriting Agreement not having beenterminated; (iv) the Listing Committee of the Stock Exchange having granted the listing of, andpermission to deal in, the Shares in issue and to be issued pursuant to the Share Offer; and (v) nostatute, rule or regulation shall have been enacted or promulgated by any governmental authority ofany relevant jurisdiction which prohibits the consummation of the investment in the Shares by theCornerstone Investor and there shall be no order or injunction of a court of competent and relevantjurisdiction in effect precluding or prohibiting consummation of the investment in the Shares by theCornerstone Investor.

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RESTRICTIONS ON DISPOSAL BY THE CORNERSTONE INVESTOR

The Cornerstone Investor undertakes and agrees that without the prior written consent of ourCompany and the Joint Lead Managers, it shall not, whether directly or indirectly, at any time duringthe period of six months following the Listing Date (the “Lock-up Period”), dispose of any of theShares acquired by the Corporate Investor pursuant to the Cornerstone Investor Agreement and anyshares or other securities of our Company which are derived therefrom pursuant to any rights issue,capitalisation issue or other form of capital reorganisation (the “Relevant Shares”) or any interest inany company or entity holding any of the Relevant Shares.

The parties to the Cornerstone Investor Agreement agree that, after the Lock-up Period, theCornerstone Investor shall be free to dispose of any Relevant Shares, provided that the CornerstoneInvestor shall use all reasonable endeavors to ensure that any such disposal is strictly in accordancewith all applicable laws and regulations including the Listing Rules and the SFO and does not create adisorderly or false market in the Shares. The Cornerstone Investor further agrees that, save with theprior written consent of our Company and the Joint Lead Managers, the aggregate holding (direct andindirect) of the Cornerstone Investor and its associates in the total issued share capital of our Companyshall be less than 10% of our Company’s entire issued share capital from time to time during the Lock-up Period.

The above restrictions shall not apply to transfers of all or part of the Relevant Shares from theCornerstone Investor to its holding company, its wholly-owned subsidiaries or any wholly-ownedsubsidiary of its holding company (collectively, the “Cornerstone Investor Affiliate”) during theLock-up Period. The Cornerstone Investor Affiliate will be subject to the restrictions on disposalimposed on the Cornerstone Investor pursuant to the Cornerstone Investor Agreement. If at any timeprior to expiration of the Lock-up Period, the Cornerstone Investor Affiliate ceases to be the holdingcompany or a wholly-owned subsidiary of the Cornerstone Investor or a wholly-owned subsidiary ofany holding company of the Cornerstone Investor, it shall transfer the Relevant Shares to theCornerstone Investor or another wholly-owned subsidiary of the Cornerstone Investor or of anyholding company of the Cornerstone Investor, which undertakes to strictly abide by the restrictions ondisposal imposed on the Cornerstone Investor pursuant to the Cornerstone Investor Agreement.

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HOW TO APPLY FOR THE PUBLIC OFFER SHARES

WHICH APPLICATION FORM YOU SHOULD USE

Use a white Application Form if you want the Public Offer Shares to be issued in your ownname.

Use a yellow Application form if you want the Public Offer Shares to be registered in the nameof HKSCC Nominees and deposited directly into CCASS for credit to your CCASS InvestorParticipant stock account or the stock account of your designated CCASS Participant.

WHO CAN APPLY

You, the applicant(s), and any person(s) for whose benefit you are applying, must be 18 yearsof age or older and must have a Hong Kong address.

If you are a firm, the application must be in the name(s) of the individual member(s), not in thename of the firm.

If you are a body corporate, the application must be stamped with the company chop (bearingthe company name) and signed by a duly authorised officer, who must state his or her representativecapacity.

Save under the circumstances permitted by the Listing Rules, you cannot apply for any PublicOffer Shares if you or any person(s) for whose benefit you are applying:

Š are/is an existing beneficial owner of the Shares in our Company or any of oursubsidiaries;

Š are/is the chief executive or a director of our Company or any of our subsidiaries;

Š are/is an associate (as defined in the Listing Rules) of any of the above;

Š are/is a connected person (as defined in the Listing Rules) of our Company or any of oursubsidiaries or a person who will become a connected person of our Companyimmediately upon completion of the Share Offer;

Š have been allocated or applied for or indicated an interest in any Placing Shares under thePlacing save under the circumstances permitted by the Listing Rules;

Š are/is within the United States or a United States person (within the meaning of RegulationS under the US Securities Act of 1933, as amended); or

Š do not have a Hong Kong address.

If you or any person(s) for whose benefit you are applying are/is within the United States or aUnited States person (within the meaning of Regulation S under the US Securities Act of 1933, asamended), no application for Public Offer Shares shall be made.

The total number of joint applicants may not exceed four.

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HOW TO APPLY FOR THE PUBLIC OFFER SHARES

WHERE TO COLLECT THE PROSPECTUSES AND THE APPLICATION FORMS

You can collect a white Application Form and this prospectus during normal business hoursfrom 9:00 a.m. on Tuesday, 29 June 2010 until 12:00 noon on Monday, 5 July 2010 from:

Any participant of the Stock Exchange

or

Quam Capital LimitedRoom 3208, Gloucester Tower

The Landmark11 Pedder Street

CentralHong Kong

or

Quam Securities Company Limited

Room 3208, Gloucester TowerThe Landmark

11 Pedder StreetCentral

Hong Kongor

Convoy Investment Services Limited17/F

Citiplaza ThreeTaikoo Shing

Island EastHong Kong

or

Celestial Securities Limited

7/F, Low BlockGrand Millennium Plaza

181 Queen’s Road CentralHong Kong

or

China Merchants Securities (HK) Co., Limited

48/FOne Exchange Square

CentralHong Kong

or

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HOW TO APPLY FOR THE PUBLIC OFFER SHARES

UOB Kay Hian (Hong Kong) Limited

Suite 601Aon China Building

29 Queen’s Road CentralHong Kong

or any of the following branches of The Bank of East Asia, Limited:

District Branch name Address

Hong Kong Island . . . . . . . . . . . . . . . Main Branch 10 Des Voeux Road, Central,Hong Kong

Queen’s Road Central Branch Shop A-C, G/F, Wah Ying CheongCentral Building, 158-164Queen’s Road Central

399 Hennessy Road Branch G/F, Eastern Commercial Centre,399 Hennessy Road, Wanchai

Shaukiwan Branch G/F, Ka Fook Building,289-293 Shau Kei Wan Road

Kowloon . . . . . . . . . . . . . . . . . . . . . . Mongkok Branch 638-640 Nathan Road

Millennium City 5 Branch Shop 1, G/F, Millennium City 5,418 Kwun Tong Road, KwunTong, Kowloon

East Tsim Sha Tsui Branch Shop G3-G5, G/F, East OceanCentre, 98 Granville Road, TsimSha Tsui

New Territories . . . . . . . . . . . . . . . . . Shatin Plaza Branch Shop 3-4, Level 1, Shatin Plaza

Tuen Mun Town Plaza Branch Shop 2-10, UG/F, Tuen Mun TownPlaza Phase II, 3 Tuen LungStreet, Tuen Mun

Ha Kwai Chung Branch 202 Hing Fong Road

You can collect a yellow Application Form and this prospectus during normal business hoursfrom 9:00 a.m. on Tuesday, 29 June 2010 until 12:00 noon on Monday, 5 July 2010 from theDepository Counter of HKSCC at 2nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, HongKong or your stockbrokers may also have the yellow Application Forms and this prospectus available.

HOW TO COMPLETE THE APPLICATION FORM

There are detailed instructions on each Application Form. You should read those instructionscarefully. If you do not follow the instructions your application may be rejected and returned to you (orthe first-named applicant in case of joint applicant(s)) by ordinary post together with the accompanyingcheques(s) or banker’s cashier order(s) at your own risk at the address stated in the relevantApplication Form.

If your application is made through a duly authorised attorney, our Company, the Sponsor, theJoint Lead Managers (for themselves and on behalf of the Underwriters) or their respective agents ornominees, each acting as an agent of our Company, may accept the application at their discretion, and

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HOW TO APPLY FOR THE PUBLIC OFFER SHARES

subject to any conditions they consider appropriate, including evidence of the authority of yourattorney. The Joint Lead Managers, acting as agents of our Company, shall have full discretion toreject or accept any application, in full or in part, without assigning any reason.

HOW MANY APPLICATIONS YOU MAY MAKE FOR THE PUBLIC OFFER SHARES

You may make more than one application for the Public Offer Shares if you are a nominee, inwhich case you may make an application by using a white or yellow Application Form, and lodgemore than one Application Form in your own name on behalf of different beneficial owners. In the boxon the relevant Application Form marked “For nominees” you must include:

Š an account number; or

Š some other identification code,

for each beneficial owner or, in the case of joint beneficial owners, for each such beneficial owner.

If you do not include this information, the application will be treated as being for your ownbenefit. Otherwise, multiple applications are not allowed.

It will be a term and condition of all applications that by completing and submitting anApplication Form, you:

Š if the application is made for your own benefit, warrant that this is the only applicationwhich will be made for your benefit on a white or yellow Application Form; or

Š if you are an agent for another person, warrant that reasonable enquiries have been madeof that other person that this is the only application which will be made for the benefit ofthat other person on a white or yellow Application Form, and that you are duly authorisedto sign the relevant Application Form as that other person’s agent.

Multiple applications or suspected multiple applications are liable to be rejected. All of yourapplications are liable to be rejected as multiple applications if you, or you and your joint applicant(s)together:

Š make more than one application (whether individually or jointly with others) on a white oryellow Application Form;

Š apply (whether individually or jointly with others) on one white Application Form and oneyellow Application Form;

Š apply (whether individually or jointly with others) on one white or yellow ApplicationForm for more than 50% of the Public Offer Shares initially available for subscriptionunder the Public Offer; or

Š have applied for or taken up, or indicated an interest for or have been or will be placedOffer Shares under the Placing and make application on white or yellow ApplicationForm.

All of your applications are also liable to be rejected as multiple applications if more than oneapplication is made for your benefit or you have applied for or taken up or otherwise indicated aninterest for Offer Shares under Placing.

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HOW TO APPLY FOR THE PUBLIC OFFER SHARES

If an application is made by an unlisted company and

Š the principal business of that company is dealing in securities; and

Š you exercise “statutory control” over that company,

then that application will be treated as being for your benefit.

“An unlisted company” means a company with no equity securities listed on the StockExchange.

“Statutory control” means you:

Š control the composition of the board of directors of that company; and/or

Š control more than half the voting power of that company; and/or

Š hold more than one-half of the issued share capital of that company (not counting any partof it which carries no right to participate beyond a specified amount in a distribution ofeither profits or capital).

OFFER PRICE

The maximum indicative Offer Price is HK$1.20 per Share. You must also pay the brokerageof 1%, the transaction levy of 0.004% imposed by the SFC and the Stock Exchange trading fee of0.005%. This means that for every 2,000 Public Offer Shares, you will need to pay HK$2,424.22. TheApplication Forms have tables showing the exact amount payable for certain multiples of the PublicOffer Shares up to 5,000,000 Public Offer Shares.

You must pay the maximum indicative Offer Price, the brokerage, the Stock Exchange tradingfee and the transaction levy in full when you apply for the Public Offer Shares. Your payment must bemade by one cheque or one banker’s cashier order crossed “Account Payee Only” and made payable to“The Bank of East Asia (Nominees) Limited — Convoy Public Offer”, and must comply with theterms of the Application Forms.

If your application is successful, the brokerage will be paid to participants of the StockExchange, the transaction levy will be paid to the SFC and the trading fee will be paid to the StockExchange.

If the Offer Price as finally determined is less than HK$1.20 per Share, appropriate refund(including the brokerage, the transaction levy and the Stock Exchange trading fee attributable to theexcessive application money) will be made to applicants, without interest. Particulars of the proceduresfor refund are set forth below under the paragraph headed “Despatch/collection of share certificatesand refund of application money” in this section below.

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HOW TO APPLY FOR THE PUBLIC OFFER SHARES

EFFECT OF COMPLETING AND SUBMITTING THE APPLICATION FORM

By completing the Application Form, you (and if you are joint applicants, each of you jointlyand severally) for yourself or as agent or nominee and on behalf of each person for whom you act asagent or nominee:

Š instruct and authorise our Company, the Sponsor, the Joint Lead Managers and/or thePublic Offer Underwriters (or their respective agents or nominees) to execute any transferforms, contract notes or other documents on your behalf and to do on your behalf all otherthings necessary to effect the registration of any Public Offer Shares allocated to you inyour name, as required by the Articles of Association and otherwise to give effect to thearrangements described in the prospectus and the relevant Application Form;

Š undertake to sign all documents and to do all things necessary to enable you to beregistered as the holder of the Public Offer Shares to be allocated to you, and as requiredby the Memorandum of Association and the Articles of Association;

Š confirm that you have received a copy of the prospectus and have only relied on theinformation and representations in the prospectus and the Application Form in makingyour application and will not rely on any other information and representations save as setout in any supplement to the prospectus;

Š agree that our Company, the Directors, the Sponsor, the Joint Lead Managers, the PublicOffer Underwriters and any of their respective directors, officers, employees, partners,agents, advisers and other parties involved in the Share Offer are or will be liable only forthe information and representations contained in the Application Form, the prospectus andany supplement thereto;

Š agree (without prejudice to any other rights which you may have) that once yourapplication has been accepted, you may not rescind it because of an innocentmisrepresentation and/or you may not revoke it other than as provided in the prospectus;

Š represent, warrant and undertake that you are not restricted by any applicable laws ofHong Kong or elsewhere from making the application, paying any application monies for,or being allotted or taking up any Public Offer Shares; and you understand that the Shareshave not been and will not be registered under the US Securities Act as amended and youare a non-US person outside the United States (as defined in Regulation S of the USSecurities Act 1933, as amended), and you are not a person to or by whom the allotment ofor application for the Public Offer Shares is made would require our Company to complywith any requirement under any law or regulation (whether or not having the force of law)of any territory outside Hong Kong;

Š confirm that you have read the terms and conditions and application procedures set out inthe prospectus and the Application Form and agree to be bound by them and are aware ofthe conditions of and restrictions on the Public Offer described in the prospectus;

Š agree with our Company, each of our Shareholders, Directors, and officers of ourCompany, and our Company acting for ourselves and for each Director and officer of ourCompany agrees with each of our Shareholders, to observe and comply with theCompanies Ordinance, Companies Law, the Memorandum of Association and the Articlesof Association;

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Š agree with our Company and each of our Shareholders that the Shares are freelytransferable by the holder thereof;

Š (if the application is made by an agent on your behalf) warrant that you have validly andirrevocably conferred on your agent all necessary power and authority to make theapplication;

Š (if you are an agent for another person) warrant that reasonable enquiries have been madeof that other person that it is the only application which will be made for the benefit of thatother person on a white or yellow Application Form, and that you are duly authorised tosign the Application Form (where relevant) as that other person’s agent;

Š (if the application is made for your own benefit) warrant that it is the only applicationwhich will be made for your benefit on a white or yellow Application Form;

Š warrant the truth and accuracy of the information contained in your application;

Š undertake and confirm that you (if the application is made for your benefit), or theperson(s) for whose benefit you have made the application, have not indicated an interestin and/or applied for or taken up and, or received or been placed or allocated (includingconditionally and/or provisionally) and will not indicate an interest in apply for or take up,or receive or be placed or allocated any of the Placing Shares, nor otherwise participate inthe Placing;

Š agree that your application, any acceptance of it and the resulting contract will begoverned by and construed in accordance with the laws of Hong Kong;

Š agree to disclose to our Company, our share registrars (the “registrars”), the Sponsor, thereceiving bankers, the Joint Lead Managers, the Public Offer Underwriters and theirrespective advisers and agents personal data and any information which they require aboutyou or the person(s) for whose benefit you have made the application;

Š authorise our Company to place your name(s) on the register of members of our Companyas the holder(s) of any Public Offer Shares allotted to you, and our Company and/or ouragents to send any share certificate(s) and/or any refund cheque(s) (where applicable) toyou or (in case of joint applicants) the first-named applicant in the Application Form byordinary post at your own risk to the address stated on your Application Form (except thatif you have applied for 1,000,000 Public Offer Shares or more and have indicated in yourApplication Form that you will collect your share certificate(s) and refund cheque(s)(where applicable) in person, you can collect your share certificate(s) and/or refundcheque(s) (where applicable) in person between 9:00 a.m. (Hong Kong time) and1:00 p.m. (Hong Kong time) on Monday, 12 July 2010 from our Company’s Hong Kongbranch share registrar and transfer office, Tricor Investor Services Limited, 26th Floor,Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong;

Š understand that these declarations and representations will be relied upon by ourCompany, the Directors, the Sponsor, the Joint Lead Managers and the Public OfferUnderwriters in deciding whether or not to allocate any Public Offer Shares in response toyour application and that you may be prosecuted for making a false declaration;

Š represent, warrant and undertake that the allotment of or application for the PublicOffer Shares to you or by you or for whose benefit the application is made would notrequire our Company, the Sponsor, the Joint Lead Managers and/or the Public Offer

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Underwriters to comply with any requirements under any law or regulation (whether ornot having the force of law) of any territory outside Hong Kong;

Š if the laws of any place outside Hong Kong are applicable to your application, agree andwarrant that you have complied with all such laws and none of our Company, theSponsor, the Joint Lead Managers, the Public Offer Underwriters, the other partiesinvolved in the Share Offer nor any of their respective directors, employees, partners,agents, officers or advisers will infringe any laws outside Hong Kong as a result of theacceptance of your offer to purchase, or any action arising from your rights andobligations under the terms and conditions contained in the prospectus;

Š agree that the processing of your application, including the despatch of refund cheques(where applicable), may be done by our Company’s receiving banker and is not restrictedto the bank at which your Application Form was lodged;

Š authorise our Company to enter into a contract on your behalf with each of our Directorsand officers of our Company whereby each such Director and officer undertakes toobserve and comply with his or her obligations to the Shareholders as stipulated in theMemorandum of Association and the Articles of Association; and

Š undertake and agree to accept the Public Offer Shares applied for, or any lesser numberallocated to you under the application.

Our Company, the Sponsor, the Joint Lead Managers, the Public Offer Underwriters, and theirrespective directors, officers, employees, partners, agents, advisers and any other parties involved inthe Share Offer are entitled to rely on any warranty, representation or declaration made by you in theapplication. In the event of the application being made by joint applicants, all the warranties,representations, declarations and obligations expressed to be made, given or assumed by or imposed onthe joint applicants shall be deemed to have been made, given and assumed by and imposed on theapplicants jointly and severally. You may be prosecuted if you make a false declaration.

You must complete the application in English, unless otherwise stated, and you must signthe application in writing (and not by way of personal chop), otherwise the application is liable tobe rejected.

PERSONAL DATA

The section of the Application Forms entitled “Personal Data” applies to any personal data heldby our Company and the share registrar about you in the same way as it applies to personal data aboutapplicants other than HKSCC Nominees.

TIME FOR APPLYING FOR THE PUBLIC OFFER SHARES

White or yellow Application Forms

Completed white or yellow Application Forms, with a cheque or banker’s cashier orderattached, must be lodged by 12:00 noon (Hong Kong time) on Monday, 5 July 2010, or, if theApplication Lists are not open on that day, then by 12:00 noon (Hong Kong time) on the day theApplication Lists are open.

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Your completed white or yellow Application Form, with payment attached, should bedeposited in the special collection boxes provided at any of the branches of The Bank of East Asia,Limited listed under the paragraph headed “Where to collect the prospectuses and the ApplicationForms” in this section at the following times:

Tuesday, 29 June 2010 — 9:00 a.m. to 5:00 p.m.Wednesday, 30 June 2010 — 9:00 a.m. to 5:00 p.m.

Friday, 2 July 2010 — 9:00 a.m. to 5:00 p.m.Saturday, 3 July 2010 — 9:00 a.m. to 1:00 p.m.Monday, 5 July 2010 — 9:00 a.m. to 12:00 noon

Application Lists

The Application Lists will be opened from 11:45 a.m. to 12:00 noon on Monday, 5 July 2010,except as provided under the paragraph headed “Effect of bad weather on the opening of theApplication Lists” below.

No proceedings will be taken on applications for the Public Offer Shares and no allocation ofany such Shares will be made until after the closing of the Application Lists. No allocation of any ofthe Public Offer Shares will be made 30 days after the close of the Application Lists.

EFFECT OF BAD WEATHER ON THE OPENING OF THE APPLICATION LISTS

The Application Lists will not be open in relation to the Public Offer if there is:

Š a tropical cyclone warning signal number 8 or above; or

Š a “black” rainstorm warning signal,

in force in Hong Kong at any time between 9:00 a.m. (Hong Kong time) and 12:00 noon (Hong Kongtime) on Monday, 5 July 2010. Instead, the Application Lists will be open between 11:45 a.m. (HongKong time) and 12:00 noon (Hong Kong time) on the next Business Day which does not have either ofthose warnings in force at any time between 9:00 a.m. (Hong Kong time) and 12:00 noon (Hong Kongtime).

If the Application Lists do not open and close on Monday, 5 July 2010, the dates mentioned inthe section headed “Expected timetable” in this prospectus and the Application Forms and other datesmentioned in this prospectus (including, without limitation, the latest time for the exercise oftermination rights under the Underwriting Agreement) may be affected. An announcement will bemade in such event on the Stock Exchange’s website at www.hkexnews.hk and the website of ourCompany at www.convoy.com.hk.

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CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOTTED THE PUBLIC OFFERSHARES

Full details of the circumstances in which you will not be allotted the Public Offer Shares areset forth in the related Application Forms, and you should read them carefully. You should note inparticular the following situations in which the Public Offer Shares will not be allotted to you:

If your application is revoked or withdrawn

By depositing an Application Form, you agree that your application cannot be revoked on orbefore the expiration of the fifth day after Monday, 5 July 2010 or such later date as the ApplicationLists may close as described under the paragraph headed “Effect of bad weather on the opening of theApplication Lists” in this section. This agreement will take effect as a collateral contract with us, andwill become binding when you lodge your Application Form. This collateral contract will be inconsideration of our Company agreeing that it will not offer any Public Offer Shares to any personuntil after the expiration of the fifth day after closing of the Application Lists except by means of oneof the procedures referred to in this prospectus.

If any supplement to this prospectus is issued, applicants who have already submitted anapplication may or may not (depending on the information contained in the supplement) be notifiedthat they can withdraw their applications. If applicants have not been so notified, or if applicants havebeen notified but have not withdrawn their applications in accordance with the procedure to benotified, all applications that have been submitted will remain valid and may be accepted. Subject tothe above, an application once made is irrevocable and applicants shall be deemed to have applied onthe basis of this prospectus as supplemented.

If your application has been accepted, it cannot be revoked or withdrawn. For this purpose,acceptance of applications which are not rejected will be constituted by notification in the press of theresults of allotment, and where such basis of allotment is subject to certain conditions or provides forallocation by ballot, such acceptance will be subject to the satisfaction of such conditions or results ofthe ballot, respectively, at our full discretion or the discretion of our agents. Our Company and ouragents have full discretion to reject or accept any application, or to accept only part of an application,and do not have to give any reason for any rejection or acceptance.

If your application is rejected

Your application will be rejected if:

Š it is a multiple application or a suspected multiple application; or

Š your Application Form is not completed correctly in accordance with the instructionsprinted thereon; or

Š your payment is not made correctly; or

Š you pay by cheque or banker’s cashier order and the cheque or banker’s cashier order isdishonoured on its first presentation; or

Š you or the person for whose benefit you are applying have applied for or taken up orindicated an interest for or have received or have been or will be placed or allocated(including conditionally and/or provisionally) the Placing Shares; or

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Š we believe that by accepting your application, we would violate the applicable laws, rulesor regulations of the jurisdiction in which your application is, or is suspected to have been,completed and/or signed or of any other jurisdiction; or

Š your application is for more than 100% of the Public Offer Shares initially offered forsubscription by the public in either pool A or pool B.

If your application is not accepted

Your application will not be accepted if either:

Š the Underwriting Agreement does not become unconditional; or

Š the Underwriting Agreement is terminated in accordance with its respective terms andconditions; or

Š no agreement has been reached on the Offer Price on the Price Determination Date.

If the allotment of the Public Offer Shares is void

The allotment of the Public Offer Shares to you or to HKSCC Nominees (if you apply by ayellow Application Form) will be void if the Listing Committee of the Stock Exchange does not grantpermission to list our Shares either:

Š within three weeks from the closing of the Applications Lists; or

Š within a longer period of up to six weeks if the Listing Committee of the Stock Exchangenotifies us of that longer period within three weeks of the closing of the Application Lists.

Refund of your application money

If you do not receive any Public Offer Shares for any of, but not limited to, the above reasons,our Company will refund your application monies (including brokerage of 1%, SFC transaction levy of0.004% and Stock Exchange trading fee of 0.005%) to you, without interest. If your application isaccepted only in part, our Company will refund the appropriate portion of your application monies,including the related brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading feeof 0.005%, without interest. If the final Offer Price is fixed at less than the maximum Offer Price(excluding brokerage of 1%, SFC transaction levy of 0.004% and the Stock Exchange trading fee of0.005%) paid by you, the surplus application monies (including brokerage of 1%, SFC transaction levyof 0.004% and Stock Exchange trading fee of 0.005% attributable to such surplus) will be refunded toyou, without interest. All such interest accrued on such monies prior to the date of despatch of refundcheques will be retained for our Company’s benefit. In a contingency situation involving a substantialover-subscription, at the discretion of our Company, the Sponsor and the Joint Lead Managers,cheques for applications for certain small denominations of the Public Offer Shares (apart fromsuccessful applications) may not be cleared.

All refunds (save for the circumstances described under the note in paragraph 3 in the sectionheaded “Circumstances in which you will not be allotted Public Offer Shares” in the ApplicationForm) will be made by a cheque crossed “Account Payee Only”, and made out to you, or, if you arejoint applicants, to the first-named applicant on your Application Form. If your application has beenrejected and the cheque(s) has not been presented for clearance, the cheque(s) will be returned to theaddress on your Application Form by ordinary post at your own risk. Part of your Hong Kong identity

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card number/passport number, or, if you are joint applicants, part of the Hong Kong identity cardnumber/passport number of the first-named applicant, provided by you may be printed on your refundcheque, if any. Such data would also be transferred to a third party for refund purpose. Your bankermay require verification of your Hong Kong identity card number/passport number before encashmentof your refund cheque. Inaccurate completion of your Hong Kong identity card number/passportnumber may lead to delay in encashment of or may invalidate your refund cheque.

If you have applied for 1,000,000 or more Public Offer Shares and have indicated in yourApplication Form that you wish to collect your refund cheque in person, you may collect it in personfrom:

Tricor Investor Services Limited26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong

between 9:00 a.m. (Hong Kong time) and 1:00 p.m. (Hong Kong time) on Monday, 12 July 2010 orany other date notified by our Company on the Stock Exchange’s website at www.hkexnews.hk andour Company’s website at www.convoy.com.hk as the date of despatch of refund cheque(s) (whereapplicable), after which your refund cheque(s) (where applicable) will be posted to you by ordinarypost and at your own risk to the address stated on the Application Form.

If you are an individual and opt for collection in person, you must not authorise any otherperson to make collection on your behalf. You must show your identification documents (which mustbe acceptable to Tricor Investor Services Limited) to collect your refund cheque(s) (where applicable).If you are a corporate applicant, you must attend by your authorised representative bearing a letter ofauthorisation from your corporation stamped with your company chop. Your authorised representativemust produce, at the time of collection, evidence of identity acceptable to Tricor Investor ServicesLimited.

If you have applied for less than 1,000,000 Public Offer Shares or if you have applied for1,000,000 or more Public Offer Shares but have not indicated on the Application Form that you wish tocollect your refund cheque(s) (if any) in person within the time specified for collection, then it isexpected that the refund cheque(s) (if any) will be sent to the address on your Application Form onMonday, 12 July 2010 by ordinary post and at your own risk.

If you do not collect your refund cheque(s) (where applicable) in person within the timespecified for collection, it/they will be despatched to you by ordinary post to the address on theApplication Form at your own risk.

It is intended that special efforts will be made to avoid any undue delay in refunding applicationmonies (where applicable). In the event that the final Offer Price is less than the price per Offer Sharepaid by you, the surplus application monies (including 1% brokerage, 0.004% SFC transaction levyand 0.005% Stock Exchange trading fee attributable to such surplus) will be refunded to you withoutinterest.

PUBLICATION OF RESULTS

Results of allocations in the Public Offer including (i) the level of indications of interest in thePlacing; (ii) the level of applications in the Public Offer; (iii) the basis of allotment of the Public Offer

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Shares; (iv) the number of Shares reallocated under the clawback adjustment, if any; (v) the HongKong identity card/passport/Hong Kong business registration certificate numbers of successfulapplicants and the number of the Public Offer Shares successfully applied for; and (vi) the final OfferPrice, will be made available at the times and dates and in the manner specified below:

Š on our Company’s website at www.convoy.com.hk and the Stock Exchange’s website atwww.hkexnews.hk from 9:00 a.m. (Hong Kong time) on Monday, 12 July 2010 onward;

Š on our Public Offer results of allocations website at www.tricor.com.hk/ipo/result on a24-hour basis from 8:00 a.m. (Hong Kong time) on Monday, 12 July 2010 to 12:00midnight (Hong Kong time) on Sunday, 18 July 2010. The user will be required to key inthe Hong Kong identity card/passport/Hong Kong business registration certificate numberprovided in his/her/its Application Form to search for his/her/its own allocation result;

Š from our Public Offer allocation results telephone enquiry line. Applicants may find outwhether or not their applications have been successful and the number of the Public OfferShares allocated to them, if any, by calling 3691-8488 between 9:00 a.m. (Hong Kongtime) and 6:00 p.m. (Hong Kong time) from Monday, 12 July 2010 to Thursday, 15 July2010; and

Š from special allocation results booklets which set out the results of allocations that will beavailable for inspection during opening hours of the designated branches of the receivingbanker of the Public Offer from Monday, 12 July 2010 to Wednesday, 14 July 2010 at theaddresses set forth under the paragraph headed “Where to collect the prospectuses and theApplication Forms” in this section above.

DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF APPLICATIONMONEY

No temporary documents of title will be issued in respect of the Offer Shares. No receiptwill be issued for sums paid on application. However, your cheque or banker’s cashier order willnot be presented for payment before 12:00 noon (Hong Kong time) on Monday, 5 July 2010. OurCompany will keep any interest accrued on your application monies.

Any certificate relating to the Offer Shares issued by our Company or deposited into CCASSprior to 8:00 a.m. (Hong Kong time) on the Listing Date will only become valid certificate of title ifthe Share Offer has become unconditional in all aspects and the Underwriting Agreement has not beenterminated in accordance with its terms on or before 8:00 a.m. (Hong Kong time) on the Listing Date.

Your application money, or an appropriate portion thereof, together with the related brokeragefee, Stock Exchange trading fee and the transaction levy, will be refunded, WITHOUT INTERESTif:

Š your application is rejected, not accepted or only accepted in part;

Š the Offer Price as finally determined is less than the maximum indicative Offer Price;

Š the conditions of the Share Offer are not fulfilled in accordance with the section headed“Structure and conditions of the Share Offer” in this prospectus;

Š any application is revoked or any allocation pursuant thereto has become void; or

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Š any of the reasons set forth under the paragraph headed “Circumstances in which you willnot be allotted the Public Offer Shares” in this section.

It is intended that special efforts will be made to avoid any undue delay in refunding applicationmoney where appropriate.

Subject to the provisions mentioned below, in due course there will be sent to you by ordinarypost, at your own risk to the address specified on your Application Form:

Š for applicants on white Application Forms: (i) share certificate for all the Public OfferShares applied for, if your application is wholly successful; or (ii) share certificate for thenumber of Public Offer Shares successfully applied for, if your application is partiallysuccessful; and/or

Š for applicants on white and yellow Application Forms, a refund cheques crossed “AccountPayee Only” in favour of the applicant (or, in the case of joint applicants, the first-namedapplicant) for: (i) the excessive application money for the Public Offer Sharesunsuccessfully applied for, if the application is partially unsuccessful; or (ii) all theapplication money, if the application is wholly unsuccessful; and/or (iii) the differencebetween the Offer Price as determined and the maximum indicative Offer Price, payableupon application, in the event that the Offer Price is lower than the maximum indicativeOffer Price, in each case including related brokerage of 1%, the transaction levy of0.004% imposed by the SFC and the Stock Exchange trading fee of 0.005%, WITHOUTINTEREST. Part of your Hong Kong identity card number/passport number, or, if you arejoint applicants, part of the Hong Kong identity card number/passport number of the first-named applicant, provided by you may be printed on the refund cheque, if any. Such datawould also be transferred to a third party for refund purpose. Your banker may requireverification of your Hong Kong identity card number/passport number before encashmentof the refund cheque. Inaccurate completion of your Hong Kong identity card number/passport number may lead to delay in encashment of or may invalidate your refundcheque.

In a contingency situation involving a very high level of over-subscription, at the discretion ofour Company and the Joint Lead Managers, applications for certain small denominations of the PublicOffer Shares may be eliminated in a pre-balloting. In such circumstances, the cheques or banker’scashier orders accompanying such applications on the Application Forms will not be presented forclearing.

Subject as mentioned below, refund cheques (where applicable) and share certificates forsuccessful applicants under white Application Forms are expected to be despatched on Monday,12 July 2010. We reserve the right to retain any share certificates and any excessive application moneypending clearance of cheque(s) or banker’s cashier order(s).

If you have applied for 1,000,000 Public Offer Shares or more on a white or yellowApplication Form and have indicated your intention on your Application Form to collect your refundcheque (where applicable) and/or (for applicants using white Application Forms) share certificate(where applicable) from our Company’s Hong Kong branch share registrar and transfer office, TricorInvestor Services Limited in person, and have provided all information required by your ApplicationForm, you may collect (where applicable) your refund cheque and/or (where applicable) share

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certificate from our Company’s Hong Kong branch share registrar and transfer office, Tricor InvestorServices Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong onMonday, 12 July 2010 from 9:00 a.m. (Hong Kong time) to 1:00 p.m. (Hong Kong time) or any otherdate notified by us as the date of despatch of share certificates/refund cheques.

If you are an individual who opts for collection in person, you must not authorise any otherperson to make collection on your behalf. If you are a corporate applicant which opts for collection inperson, the authorised representative bearing a letter of authorisation from the corporation stampedwith the corporation’s chop must be presented for collection. Both individuals and authorisedrepresentatives (where applicable) must produce, at the time of collection, evidence of identityacceptable to our Company’s Hong Kong branch share registrar and transfer office. If you do notcollect your share certificate and/or refund cheque, they will be despatched promptly to you byordinary post to the address as specified in your Application Form at your own risk.

If you have applied for less than 1,000,000 Public Offer Shares or if you have applied for1,000,000 Public Offer Shares or more on a white or yellow Application Form but have not indicatedin your Application Form that you wish to collect your share certificate (where applicable) and/orrefund cheque in person, the share certificate and/or refund cheque (where applicable) will be sent tothe address on your Application Form on Monday, 12 July 2010 or any other date notified by us as thedate of despatch of share certificates/refund cheques by ordinary post and at your own risk.

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

If the Stock Exchange grants the listing of, and permission to deal in, our Shares in issue and tobe issued as mentioned in this prospectus and our Company complies with the stock admissionrequirements of HKSCC, our Shares will be accepted as eligible securities by HKSCC for deposit,clearance and settlement in CCASS with effect from the date of commencement of dealing in ourShares on the Stock Exchange or any other date as determined by HKSCC. Settlement of transactionsbetween participants of the Stock Exchange is required to take place in CCASS on the second BusinessDay after any trading day. Investors should seek the advice of their stockbroker(s) or other professionaladviser(s) for details of those settlement arrangements as such arrangements will affect their rights andinterests.

All activities under CCASS are subject to the General Rules of CCASS and the CCASSOperational Procedures in effect from time to time.

All necessary arrangements have been made for our Shares to be admitted into CCASS.

DEPOSIT OF SHARE CERTIFICATES INTO CCASS

If you apply for the Public Offer Shares using a yellow Application Form, and your applicationis wholly or partially successful, your share certificate will be issued in the name of HKSCC Nomineesand deposited into CCASS for credit to your CCASS Investor Participant’s stock account or the stockaccount of your designated CCASS Participant as instructed by you at the close of business onMonday, 12 July 2010, or under contingent situation, on any other date as shall be determined byHKSCC or HKSCC Nominees.

We expect to publish the application results of CCASS Investor Participants using yellowApplication Forms on Monday, 12 July 2010. You should check the announcement published by us

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and report any discrepancies to HKSCC before 5:00 p.m. (Hong Kong time) on Monday, 12 July 2010or such other date as shall be determined by HKSCC or HKSCC Nominees.

If you are applying as a CCASS Investor Participant, you can check your new account balancevia the CCASS Phone System and CCASS Internet System (under the procedures contained inHKSCC’s “An Operating Guide for Investor Participants” in effect from time to time) immediatelyafter the credit of the Public Offer Shares to your stock account. HKSCC will also make available toyou an activity statement showing the number of Public Offer Shares credited to your stock account.

If you are applying through a designated CCASS participant (other than a CCASS InvestorParticipant), you can check the number of public offer shares allotted to you with that CCASSparticipant.

COMMENCEMENT OF DEALINGS IN THE SHARES

Dealings in the Shares on the Stock Exchange are expected to commence on Tuesday, 13 July2010. Shares will be traded on the Stock Exchange in board lots of 2,000 each. The Stock Exchangestock code for the Shares is 1019.

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APPENDIX I ACCOUNTANTS’ REPORT

The following is the text of a report, prepared for the purpose of incorporation in this prospectus,received from the reporting accountants of our Company, Ernst & Young, Certified PublicAccountants, Hong Kong.

18th FloorTwo International Finance Centre

8 Finance Street, CentralHong Kong

29 June 2010

The DirectorsConvoy Financial Services Holdings LimitedQuam Capital Limited

Dear Sirs,

We set out below our report on the financial information (the “Financial Information”) ofConvoy Financial Services Holdings Limited (the “Company”) and its subsidiaries (hereinaftercollectively referred to as the “Group”) for each of the three years ended 31 December 2007, 2008 and2009 (the “Track Record Period”), prepared on the basis set out in note 2 of Section II below, forinclusion in the prospectus of the Company dated 29 June 2010 (the “Prospectus”) in connection withthe listing of the shares of the Company on the Main Board of The Stock Exchange of Hong KongLimited (the “Stock Exchange”).

The Financial Information comprises the combined statements of financial position of theGroup as at 31 December 2007, 2008 and 2009, and the combined statements of comprehensiveincome, the combined statements of changes in equity and the combined statements of cash flows ofthe Group for the Track Record Period, and a summary of significant accounting policies and otherexplanatory notes.

The Company was incorporated in the Cayman Islands on 12 March 2010 as an exemptedcompany with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated andrevised) of the Cayman Islands, for the purpose of acting as a holding company of the companies nowcomprising the Group. The Company has not carried on any business since the date of itsincorporation, save for the transactions relating to a corporate reorganisation (the “Reorganisation”)as more fully explained in the section headed “Corporate Reorganisation” in Appendix V to theProspectus. Pursuant to the Reorganisation, the Company became the direct/indirect holding companyof the subsidiaries now comprising the Group. The Reorganisation became effective on 21 June 2010.The Group is principally engaged in the provision of financial planning and insurance brokerageservices.

I-1

APPENDIX I ACCOUNTANTS’ REPORT

As at the date of this report, the Company had direct or indirect interests in the followingsubsidiaries, all of which are private companies with limited liability (or, if incorporated outside HongKong, have characteristics substantially similar to a private company incorporated in Hong Kong).Particulars of the subsidiaries comprising the Group are set out below:

Company name

Place and date ofincorporation and

operations

Nominal value ofissued ordinary

share capital

Percentage ofequity interestsattributable tothe Company

Principal activitiesDirect Indirect

Convoy (BVI) Limited(i) . . . . . . . . . . British VirginIslands

9 March 2010

HK$10,000 100 — Investmentholding

Convoy Financial Services Limited(“CFS”)(ii) . . . . . . . . . . . . . . . . . . . . Hong Kong

12 March 1992HK$1,000,000 — 100 Provision of

financial planningand insurancebrokerage services

Notes:(i) Pursuant to the Reorganisation, Convoy (BVI) Limited acquired the entire issued capital of CFS on 21 June 2010. Convoy (BVI) Limited

has not carried on any business since the date of its incorporation, save for the transactions relating to the Reorganisation. As at the dateof this report, no statutory audited financial statements have been prepared since its date of incorporation as Convoy (BVI) Limited is notsubject to any statutory audit requirements under its jurisdiction of incorporation.

(ii) We have audited the statutory financial statements of CFS during the Track Record Period.

As at the date of this report, no audited financial statements have been prepared for theCompany since the date of its incorporation, as it was newly incorporated and has not been involved inany business transactions, other than the Reorganisation. For the purpose of this report, we have,however, performed our own independent review of all relevant transactions of the Company inrelation to the Reorganisation for the period since the date of its incorporation and carried out suchprocedures as we considered necessary for inclusion of the relevant information of the Company in thisreport.

All the companies now comprising the Group have adopted 31 December as their financial yearend date.

For the purpose of this report, the directors of the Company have prepared the combinedfinancial statements of the Group for the Track Record Period in accordance with Hong KongFinancial Reporting Standards (which include all Hong Kong Financial Reporting Standards, HongKong Accounting Standards and Interpretations) issued by the Hong Kong Institute of Certified PublicAccountants (the “HKICPA”) (the “Combined Financial Statements”). The Financial Informationhas been prepared, for the purposes of this report, based on the Combined Financial Statements and inaccordance with the basis set out in note 2 of Section II below.

Respective responsibilities of directors and reporting accountants

The directors of the Company are responsible for the preparation and the presentation of theFinancial Information for the Track Record Period in accordance with the basis set out in note 2 ofSection II below and the contents of the Prospectus in which this report is included. The directors ofthe respective companies now comprising the Group are responsible for the preparation and the trueand fair presentation of the respective audited financial statements and, where appropriate,

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APPENDIX I ACCOUNTANTS’ REPORT

management accounts in accordance with the relevant accounting principles and financial regulationsapplicable to these companies. This responsibility includes designing, implementing and maintaininginternal control relevant to the preparation and the presentation of the Financial Information that arefree from material misstatement, whether due to fraud or error; selecting and applying appropriateaccounting policies; and making accounting estimates that are reasonable in the circumstances. For thepurpose of this report, it is our responsibility to express an independent opinion on the FinancialInformation based on our audit and to report our opinion to you.

Procedures performed in respect of the Financial Information

For the purpose of this report, we have carried out an independent audit on the FinancialInformation for the Track Record Period in accordance with Hong Kong Standards on Auditing issuedby the HKICPA, this involves examining the audited financial statements or, where appropriate,management accounts of all the companies now comprising the Group for each of the Track RecordPeriod, and have carried out such additional procedures as we considered necessary in accordance withAuditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA. Noadjustments were deemed necessary to the Combined Financial Statements in preparing thisaccountants’ report for inclusion in the Prospectus.

Opinion in respect of the Financial Information

In our opinion, for the purpose of this report and presented on the basis set out in note 2 ofSection II below, the Financial Information gives a true and fair view of the state of affairs of theGroup as at 31 December 2007, 2008 and 2009 and of the combined results and combined cash flowsof the Group for each of the Track Record Period.

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APPENDIX I ACCOUNTANTS’ REPORT

I. FINANCIAL INFORMATION

The following is the Financial Information of the Group for the Track Record Period and as atthe end of each of the Track Record Period, prepared on the basis set out in note 2 of Section II below.

COMBINED STATEMENTS OF COMPREHENSIVE INCOME

Year ended 31 December

Notes 2007 2008 2009

HK$’000 HK$’000 HK$’000

REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 636,068 554,283 455,587Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2,734 207 208Commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (362,850) (322,915) (253,538)Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,517) (63,569) (44,909)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 (14,733) (16,484) (16,735)Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,217) (7,286) (4,651)Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (81,056) (106,638) (88,882)

PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 124,429 37,598 47,080Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (23,035) (6,088) (8,966)

PROFIT FOR THE YEAR AND TOTAL COMPREHENSIVEINCOME FOR THE YEAR ATTRIBUTABLE TO THE OWNEROF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,394 31,510 38,114

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APPENDIX I ACCOUNTANTS’ REPORT

COMBINED STATEMENTS OF FINANCIAL POSITION

As at 31 December

Notes 2007 2008 2009

HK$’000 HK$’000 HK$’000

NON-CURRENT ASSETSProperty, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 32,484 39,666 31,931Deposits paid for purchases of items of property, plant and equipment . . . 829 283 —Rental deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9,411 6,952Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 925 805Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 915 841 683

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,713 51,126 40,371

CURRENT ASSETSAccounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 31,896 14,312 17,139Prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . 16 19,647 14,578 20,815Equity investment at fair value through profit or loss . . . . . . . . . . . . . . . . . 17 288 129 238Due from related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 74,540 88,483 —Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 48,474 21,872 83,755

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174,845 139,374 121,947

CURRENT LIABILITIESAccounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 92,754 47,956 75,565Other payables and accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 18,998 17,938 19,583Due to a related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 9,248 14,743 —Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,684 22,036 15,309Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 5,050 7,993 5,913

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,734 110,666 116,370

NET CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,111 28,708 5,577

Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,824 79,834 45,948

EQUITYEquity attributable to the owner of the CompanyIssued capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 — — —Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000 1,000Retained profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,824 78,834 44,948

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,824 79,834 45,948

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APPENDIX I ACCOUNTANTS’ REPORT

COMBINED STATEMENTS OF CHANGES IN EQUITY

NoteIssuedcapital

Capitalreserves

Retainedprofits

Totalequity

HK$’000 HK$’000 HK$’000 HK$’000(Note (a))

At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,000 53,430 54,430Total comprehensive income for the year . . . . . . . . . . . . . . . . . — — 101,394 101,394Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 — — (100,000) (100,000)

At 31 December 2007 and 1 January 2008 . . . . . . . . . . . . . . . . . — 1,000 54,824 55,824Total comprehensive income for the year . . . . . . . . . . . . . . . . . — — 31,510 31,510Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 — — (7,500) (7,500)

At 31 December 2008 and 1 January 2009 . . . . . . . . . . . . . . . . . — 1,000 78,834 79,834Total comprehensive income for the year . . . . . . . . . . . . . . . . . — — 38,114 38,114Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 — — (72,000) (72,000)

At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,000 44,948 45,948

Note (a): Capital reserves represent the aggregate issued paid-up capital of the subsidiaries comprising the Group.

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APPENDIX I ACCOUNTANTS’ REPORT

COMBINED STATEMENTS OF CASH FLOWS

Year ended 31 December

Notes 2007 2008 2009

HK$’000 HK$’000 HK$’000

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,429 37,598 47,080Adjustments for:

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (2,045) (288) (16)Dividend income from a listed investment . . . . . . . . . . . . . . . . . . . . . 6 (1) (3) (1)Fair value loss/(gain) on an equity investment at fair value through

profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (140) 159 (109)Gain on disposal of items of property, plant and equipment . . . . . . . . 6 (296) — —Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 14,733 16,484 16,735Impairment/(reversal of impairment) of other receivables, net . . . . . . 7 1,834 1,430 (592)Impairment of accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 — 161 —Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,217 7,286 4,651

142,731 62,827 67,748Decrease/(increase) in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . (14,223) 17,423 (2,827)Increase in prepayments, deposits and other receivables . . . . . . . . . . . . . . (10,019) (6,212) (3,066)Decrease/(increase) in amounts due from related parties . . . . . . . . . . . . . . (67,381) (13,943) 88,483Increase/(decrease) in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,979 (44,798) 27,609Increase/(decrease) in other payables and accruals . . . . . . . . . . . . . . . . . . . (9,767) (1,060) 1,645Decrease in commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,314) (4,343) (6,731)

Cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,006 9,894 172,861Hong Kong profits tax paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (11,662) (15,535)

Net cash flows from/(used in) operating activities . . . . . . . . . . . . . . . . . . . 78,006 (1,768) 157,326

CASH FLOWS FROM INVESTING ACTIVITIESInterest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,045 288 16Dividend received from a listed investment . . . . . . . . . . . . . . . . . . . . . . . . 1 3 1Deposits paid for purchases of items of property, plant and equipment . . . (829) (283) —Purchases of items of property, plant and equipment . . . . . . . . . . . . . . . . . (19,549) (22,837) (8,717)Proceeds from disposal of items of property, plant and equipment . . . . . . 418 — —

Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . (17,914) (22,829) (8,700)

CASH FLOWS FROM FINANCING ACTIVITIESNew other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 5,000Repayment of other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (5,000)Advance from/(repayment to) a related party . . . . . . . . . . . . . . . . . . . . . . . 3,998 (2,005) (14,743)Dividends paid to the then shareholder of a subsidiary . . . . . . . . . . . . . . . . (100,000) — (72,000)

Net cash flows used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . (96,002) (2,005) (86,743)

NET INCREASE/(DECREASE) IN CASH AND CASHEQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35,910) (26,602) 61,883

Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . 84,384 48,474 21,872

CASH AND CASH EQUIVALENTS AT END OF YEAR . . . . . . . . . . 48,474 21,872 83,755

ANALYSIS OF BALANCES OF CASH AND CASHEQUIVALENTS

Cash and bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,474 21,872 83,755

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APPENDIX I ACCOUNTANTS’ REPORT

II. NOTES TO THE FINANCIAL INFORMATION

1. CORPORATE INFORMATION AND REORGANISATION

The Company is a limited liability company incorporated in the Cayman Islands on 12 March 2010. Theregistered office of the Company is located at the office of Codan Trust Company (Cayman) Limited,Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands. Particulars ofthe companies now comprising the Group have been set out in our report. The Company has not carried onany business since the date of its incorporation, save for the transactions relating to the Reorganisation.

The Group is principally engaged in the provision of financial planning and insurance brokerage services.

As a result of the Reorganisation but immediately before the proposed listing of the Company’s shares onthe Main Board of the Stock Exchange, 100% of the share capital of the Company was owned by ConvoyFinancial Group Limited (formerly known as “Advance All Enterprises Limited”) (“CFG”), a companyincorporated in the British Virgin Islands, and ultimately controlled by Convoy Inc, which is incorporated inthe British Virgin Islands.

In the opinion of the Company’s directors, the parent of the Company is CFG and the ultimate holdingcompany of the Company is Convoy Inc.

2. BASIS OF PRESENTATION OF THE FINANCIAL INFORMATION

Pursuant to the Reorganisation completed on 21 June 2010, the Company became the direct/indirect holdingcompany of the subsidiaries now comprising the Group. As the Reorganisation only involved inserting newholding entities at the top of an existing company and has not resulted in any change of economicsubstances, the Financial Information for the Track Record Period has been presented as a continuation ofthe existing company using the pooling of interest method.

Accordingly, the combined statements of comprehensive income, combined statements of changes in equityand combined statements of cash flows are prepared as if the current group structure had been in existencethroughout the Track Record Period. The combined statements of financial position as at 31 December2007, 2008 and 2009, present the assets and liabilities of the companies now comprising the Group, as if thecurrent group structure had been in existence at those dates.

All significant intragroup transactions and balances have been eliminated on combination.

3.1 BASIS OF PREPARATION

The Financial Information has been prepared in accordance with Hong Kong Financial Reporting Standards(“HKFRSs”) (which include all Hong Kong Financial Reporting Standards, Hong Kong AccountingStandards (“HKASs”) and Interpretations) issued by the HKICPA and accounting principles generallyaccepted in Hong Kong. The Financial Information has been prepared under the historical cost convention,except for equity investment, which has been measured at fair value. The Financial Information is presentedin Hong Kong dollars (“HK$”) and all values are rounded to the nearest thousand except when otherwiseindicated.

The HKICPA has issued a number of new and revised HKFRSs that are effective for the Group’s annualperiods beginning on or after 1 January 2007. For the purpose of preparing the Financial Information, theGroup has adopted all these new and revised HKFRSs consistently throughout the Track Record Period,except for those new and revised HKFRSs that are not yet effective for any of the Track Record Period asfurther explained in note 3.2 below.

A summary of the significant accounting policies adopted and consistently applied by the Group in thepreparation of the Financial Information is set out in note 3.3 to the Financial Information.

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APPENDIX I ACCOUNTANTS’ REPORT

3.2 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTINGSTANDARDS

The Group has not applied the following new and revised HKFRSs, that have been issued but are not yeteffective, in preparing the Financial Information.

HKFRS 1 (Revised) First-time Adoption of Hong Kong Financial Reporting Standards 1

HKFRS 1 Amendments Amendments to HKFRS 1 First-time Adoption of Hong Kong FinancialReporting Standards — Additional Exemptions for First-time Adopters 2

HKFRS 1 Amendment Amendment to HKFRS 1 First-time Adoption of Hong Kong FinancialReporting Standards — Limited Exemption from Comparative HKFRS 7Disclosures for First-time Adopters 4

HKFRS 2 Amendments Amendments to HKFRS 2 Share-based Payment — Group Cash-settledShare-based Payment Transactions 2

HKFRS 3 (Revised) Business Combinations 1

HKFRS 9 Financial Instruments 6

HKAS 24 (Revised) Related Party Disclosures 5

HKAS 27 (Revised) Consolidated and Separate Financial Statements 1

HKAS 32 Amendment Amendment to HKAS 32 Financial Instruments: Presentation —Classification of Rights Issues 3

HKAS 39 Amendment Amendment to HKAS 39 Financial Instruments: Recognition andMeasurement - Eligible Hedged Items 1

HK(IFRIC)-Int 14Amendments

Amendments to HK(IFRIC)-Int 14 Prepayments of a Minimum FundingRequirement 5

HK(IFRIC)-Int 17 Distributions of Non-cash Assets to Owners 1

HK(IFRIC)-Int 19 Extinguishing Financial Liabilities with Equity Instruments 4

Amendments to HKFRS 5included in Improvements toHKFRSs issued in October2008

Amendments to HKFRS 5 Non-current Assets Held for Sale andDiscontinued Operations — Plan to Sell the Controlling Interest in aSubsidiary 1

HK Interpretation 4 (Revisedin December 2009)

Leases — Determination of the Length of Lease Term in respect ofHong Kong Land Leases 2

Apart from the above, the HKICPA has issued Improvements to HKFRSs 2009 which sets out amendmentsto a number of HKFRSs primarily with a view to removing inconsistencies and clarifying wording. Theamendments to HKFRS 2, HKAS 38, HK(IFRIC)-Int 9 and HK(IFRIC)-Int 16 are effective for annualperiods beginning on or after 1 July 2009 while amendments to HKFRS 5, HKFRS 8, HKAS 1, HKAS 7,HKAS 17, HKAS 36 and HKAS 39 are effective for annual periods beginning on or after 1 January 2010although there are separate transitional provisions for each standard or interpretation.

1 Effective for annual periods beginning on or after 1 July 2009

2 Effective for annual periods beginning on or after 1 January 2010

3 Effective for annual periods beginning on or after 1 February 2010

4 Effective for annual periods beginning on or after 1 July 2010

5 Effective for annual periods beginning on or after 1 January 2011

6 Effective for annual periods beginning on or after 1 January 2013

The Group is in the process of making an assessment of the impact of these new and revised HKFRSs uponinitial application. So far, save as not yet in a position to assess the possible impact of the adoption of therecently issued HKFRS 9 and HKAS 24 (Revised), the directors of the Company preliminarily anticipatethat the adoption of the new and revised HKFRSs are unlikely to have a significant impact on the Group’sresults of operations and financial position.

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APPENDIX I ACCOUNTANTS’ REPORT

3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies adopted by the Group in arriving at the FinancialInformation set out in this report, which conforms with HKFRSs, are set out below:

These policies have been consistently applied to all the years presented.

Subsidiaries

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

Impairment of non-financial assets

Where an indication of impairment exists, or when annual impairment testing for an asset is required (otherthan financial assets and deferred tax assets), the asset’s recoverable amount is estimated. An asset’srecoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value lesscosts to sell, and is determined for an individual asset, unless the asset does not generate cash inflows thatare largely independent of those from other assets or groups of assets, in which case the recoverable amountis determined for the cash-generating unit to which the asset belongs.

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. Inassessing value in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risks specific to theasset. An impairment loss is charged to the statement of comprehensive income in the period in which itarises in those expense categories consistent with the function of the impaired asset.

An assessment is made at the end of each of the Track Record Period as to whether there is any indicationthat previously recognised impairment losses may no longer exist or may have decreased. If such anindication exists, the recoverable amount is estimated. A previously recognised impairment loss of an assetis reversed only if there has been a change in the estimates used to determine the recoverable amount of thatasset, but not to an amount higher than the carrying amount that would have been determined (net of anydepreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A reversal ofsuch an impairment loss is credited to the statement of comprehensive income in the period in which itarises.

Related parties

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

(a) the party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or isunder common control with, the Group; (ii) has an interest in the Group that gives it significantinfluence over the Group; or (iii) has joint control over the Group;

(b) the party is a member of the key management personnel of the Group or its parent;

(c) the party is a close member of the family of any individual referred to in (a) or (b);

(d) the party is an entity that is controlled, jointly controlled or significantly influenced by or for whichsignificant voting power in such entity resides with, directly or indirectly, any individual referred to in(b) or (c); or

(e) the party is a post-employment benefit plan for the benefit of the employees of the Group, or of anyentity that is a related party of the Group.

Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.The cost of an item of property, plant and equipment comprises its purchase price and any directly

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APPENDIX I ACCOUNTANTS’ REPORT

attributable costs of bringing the asset to its working condition and location for its intended use. Expenditureincurred after items of property, plant and equipment have been put into operation, such as repairs andmaintenance, is normally charged to the statement of comprehensive income in the period in which it isincurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection iscapitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plantand equipment are required to be replaced at intervals, the Group recognises such parts as individual assetswith specific useful lives and depreciation.

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

Leasehold improvements Over the shorter of the lease terms and 25%Furniture, fixtures and equipment 20%Computer equipment 30%Motor vehicles 30%

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

Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at leastat each financial year end.

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

Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor areaccounted for as operating leases. Rentals payable under operating leases are charged to the statement ofcomprehensive income on the straight-line basis over the lease terms.

Investments and other financial assets

Initial recognition and measurement

Financial assets within the scope of HKAS 39 are classified as financial assets at fair value through profit orloss and loans and receivables, as appropriate. The Group determines the classification of its financial assetsat initial recognition. When financial assets are recognised initially, they are measured at fair value, plus, inthe case of investments not at fair value through profit or loss, directly attributable transaction costs.

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

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading. Financialassets are classified as held for trading if they are acquired for the purpose of sale in the near term.

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APPENDIX I ACCOUNTANTS’ REPORT

Financial assets at fair value through profit or loss are carried in the statement of financial position atfair value with changes in fair value recognised in the statement of comprehensive income. These netfair value changes do not include any dividends on these financial assets, which are recognised inaccordance with the policy set out for “Revenue recognition” below.

The Group evaluates its financial assets at fair value through profit or loss (held for trading) to assesswhether the intent to sell them in the near term is still appropriate. When the Group is unable to tradethese financial assets due to inactive markets and management’s intent to sell them in the foreseeablefuture significantly changes, the Group may elect to reclassify these financial assets in rarecircumstances. The reclassification from financial assets at fair value through profit or loss to loans andreceivables, available-for-sale financial assets or held-to- maturity investments depends on the natureof the assets.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that arenot quoted in an active market. After initial measurement, such assets are subsequently measured atamortised cost using the effective interest rate method less any allowance for impairment. Amortisedcost is calculated taking into account any discount or premium on acquisition and includes fees or coststhat are an integral part of the effective interest rate. The effective interest rate amortisation is includedin other income in the statement of comprehensive income. The loss arising from impairment isrecognised in the statement of comprehensive income in other expenses.

Derecognition of financial assets

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

Š the rights to receive cash flows from the asset have expired; or

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

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of theasset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuinginvolvement in the asset. In that case, the Group also recognises an associated liability. The transferred assetand the associated liability are measured on a basis that reflects the rights and obligations that the Group hasretained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at thelower of the original carrying amount of the asset and the maximum amount of consideration that the Groupcould be required to repay.

Impairment of financial assets

The Group assesses at the end of each of the Track Record Period whether there is any objective evidencethat a financial asset or a group of financial assets is impaired. A financial asset or a group of financialassets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of oneor more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and thatloss event has an impact on the estimated future cash flows of the financial asset or the group of financialassets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a

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APPENDIX I ACCOUNTANTS’ REPORT

group of debtors is experiencing significant financial difficulty, default or delinquency in interest orprincipal payments, the probability that they will enter bankruptcy or other financial reorganisation andobservable data indicating that there is a measurable decrease in the estimated future cash flows, such aschanges in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses individually whether objectiveevidence of impairment exists for financial assets that are individually significant, or collectively forfinancial assets that are not individually significant. If the Group determines that no objective evidence ofimpairment exists for an individually assessed financial asset, whether significant or not, it includes theasset in a group of financial assets with similar credit risk characteristics and collectively assesses them forimpairment. Assets that are individually assessed for impairment and for which an impairment loss is, orcontinues to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measuredas the difference between the asset’s carrying amount and the present value of estimated future cash flows(excluding future credit losses that have not yet been incurred). The present value of the estimated futurecash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest ratecomputed at initial recognition). If a loan has a variable interest rate, the discount rate for measuring anyimpairment loss is the current effective interest rate.

The carrying amount of the asset is reduced either directly or through the use of an allowance account andthe amount of the loss is recognised in the statement of comprehensive income. Interest income continues tobe accrued as the reduced carrying amount and is accrued using the rate of interest used to discount thefuture cash flows for the purpose of measuring the impairment loss. Loans and receivables together with anyassociated allowance are written off when there is no realistic prospect of future recovery and all collateralhas been realised or has been transferred to the Group.

If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of anevent occurring after the impairment was recognised, the previously recognised impairment loss is increasedor reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery iscredited to the statement of comprehensive income.

Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of HKAS 39 are classified as loans and borrowings. The Groupdetermines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plusdirectly attributable transaction costs.

Subsequent measurement

After initial recognition, loans and borrowings are subsequently measured at amortised cost, using theeffective interest method unless the effect of discounting would be immaterial, in which case they are statedat cost. Gains and losses are recognised in the statement of comprehensive income when the liabilities arederecognised as well as through the effective interest rate method amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees orcosts that are an integral part of the effective interest rate. The effective interest rate amortisation is includedin the statement of comprehensive income.

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APPENDIX I ACCOUNTANTS’ REPORT

Derecognition of financial liabilities

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

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

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financialposition if, and only if, there is currently enforceable legal right to offset the recognised amounts and thereis an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Fair value of financial instruments

The fair value of financial instruments that are traded in active markets is determined by reference to quotedmarket prices or dealer price quotations (bid price for long positions and ask price for short positions),without any deduction for transactions costs.

Cash and cash equivalents

For the purpose of the combined statements of cash flows, cash and cash equivalents comprise cash on handand demand deposits, and short term highly liquid investments that are readily convertible into knownamounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity ofgenerally within three months when acquired, less bank overdrafts which are repayable on demand and forman integral part of the Group’s cash management.

For the purpose of the combined statements of financial position, cash and cash equivalents comprise cashon hand and at banks, including term deposits, which are not restricted as to use.

Provisions

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

When the effect of discounting is material, the amount recognised for a provision is the present value at theend of each of the Track Record Period of the future expenditures expected to be required to settle theobligation. The increase in the discounted present value amount arising from the passage of time is includedin finance costs in the statement of comprehensive income.

Income tax

Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or lossis recognised outside profit or loss, either in other comprehensive income or directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to berecovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enactedor substantively enacted by the end of each of the Track Record Period, taking into considerationinterpretations and practices prevailing in the countries where the Group operates.

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APPENDIX I ACCOUNTANTS’ REPORT

Deferred tax is provided, using the liability method, on all temporary differences at the end of each of theTrack Record Period between the tax bases of assets and liabilities and their carrying amounts for financialreporting purposes.

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

Š where the deferred tax liability arises from the initial recognition of an asset or liability in a transactionthat is not a business combination and, at the time of the transaction, affects neither the accountingprofit nor taxable profit or loss; and

Š in respect of taxable temporary differences associated with investments in subsidiaries, where thetiming of the reversal of the temporary differences can be controlled and it is probable that thetemporary differences will not reverse in the foreseeable future.

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

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

Š in respect of deductible temporary differences associated with investments in subsidiaries, deferred taxassets are only recognised to the extent that it is probable that the temporary differences will reverse inthe foreseeable future and taxable profit will be available against which the temporary differences canbe utilised.

The carrying amount of deferred tax assets is reviewed at the end of each of the Track Record Period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow allor part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end ofeach of the Track Record Period and are recognised to the extent it has become probable that sufficienttaxable profit will be available to allow all or part of the deferred tax assets to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period whenthe asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted orsubstantively enacted by the end of each of the Track Record Period.

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

Revenue recognition

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

(a) investment brokerage commission income, on an accrual basis when brokerage services are renderedand in accordance with the terms of the underlying agreements with the product issuers;

(b) insurance and pension scheme brokerage commission income, on an accrual basis based on thecommissioning of the respective insurance policy and pension scheme;

(c) interest income, on an accrual basis using the effective interest method by applying the rate thatexactly discounts the estimated future cash receipts through the expected life of the financialinstrument or a shorter period, when appropriate, to the net carrying amount of the financial asset; and

(d) dividend income, when the shareholders’ right to receive payment has been established.

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APPENDIX I ACCOUNTANTS’ REPORT

Employee benefits

Pension schemes

The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the “MPFScheme”) under the Mandatory Provident Fund Schemes Ordinance for those employees who are eligible toparticipate in the MPF Scheme. Contributions are made based on a percentage of the employees’ basicsalaries and are charged to the statement of comprehensive income as they become payable in accordancewith the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of theGroup in an independently administered fund. The Group’s employer contributions vest fully with theemployees when contributed into the MPF Scheme, except for the Group’s employer voluntarycontributions, which are refunded to the Group when the employee leaves employment prior to thecontributions vesting fully, in accordance with the rules of the MPF Scheme.

Paid leave carried forward

The Group provides paid annual leave to its employees under their employment contracts on a calendar yearbasis. Under certain circumstances, such leave which remains untaken as at the end of the Track RecordPeriod is permitted to be carried forward and utilised by the respective employees in the following year. Anaccrual is made at the end of each of the Track Record Period for the expected future cost of such paid leaveearned during the year by the employees and carried forward.

Dividends

Dividends are simultaneously proposed and declared. Consequently, dividends are recognised immediatelyas a liability when they are proposed and declared.

Foreign currencies

The Financial Information is presented in Hong Kong dollars, which is the Company’s functional andpresentation currency. Each entity in the Group determines its own functional currency and items includedin the financial statements of each entity are measured using that functional currency. Foreign currencytransactions recorded by the entities in the Group are initially recorded using their respective functionalcurrency rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreigncurrencies are retranslated at the functional currency rates of exchange ruling at the end of each of the TrackRecord Period. All differences are taken to the statement of comprehensive income. Non-monetary itemsthat are measured in terms of historical cost in a foreign currency are translated using the exchange rates atthe dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency aretranslated using the exchange rates at the date when the fair value was determined.

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Financial Information requires management to make judgments, estimates andassumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosureof contingent liabilities, at the end of each of the Track Record Period. However, uncertainty about theseassumptions and estimates could result in outcomes that could require a material adjustment to the carryingamounts of the assets or liabilities affected in the future.

Judgements

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

Income tax provisions

Determining income tax provisions involves judgement on the future tax treatment of certain transactions.The Group carefully evaluates the tax implications of transactions and tax provisions are made accordingly.

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APPENDIX I ACCOUNTANTS’ REPORT

The tax treatment of such transactions is assessed periodically to take into account all the changes in the taxlegislations and practices.

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end ofeach of the Track Record Period, that have a significant risk of causing a material adjustment to the carryingamounts of assets and liabilities within the next financial year, are discussed below.

Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at the end ofeach of the Track Record Period. Definite life non-financial assets are tested for impairment when there areindicators that the carrying amounts may not be recoverable. An impairment exists when the carrying valueof an asset or a cash-generating unit exceeds its recoverable amount, which is the higher of its fair value lesscosts to sell and its value in use. The calculation of the fair value less costs to sell is based on available datafrom binding sales transactions in an arm’s length transaction of similar assets or observable market pricesless incremental costs for disposing of the asset. When value in use calculations are undertaken,management must estimate the expected future cash flows from the asset or cash-generating unit and choosea suitable discount rate in order to calculate the present value of those cash flows.

Impairment of loans and receivables

The Group assesses at the end of each of the Track Record Period whether there is any objective evidencethat a loan and receivable is impaired. To determine whether there is objective evidence of impairment, theGroup considers factors such as the probability of insolvency or significant financial difficulties of thedebtor and default or significant delay in payments. Where there is objective evidence of impairment, theamount and timing of future cash flows are estimated based on historical loss experience for assets withsimilar credit risk characteristics.

The Group maintains an allowance for estimated impairment of receivables arising from the inability of itsdebtors to make the required payments. The Group makes its estimates based on the ageing of its receivablebalances, debtors’ creditworthiness, past repayment history and historical write-off experience. If thefinancial condition of its debtors was to deteriorate so that the actual impairment loss might be higher thanexpected, the Group would be required to revise the basis of making the allowance.

Useful lives and residual values of property, plant and equipment

In determining the useful life and residual value of an item of property, plant and equipment, the Group hasto consider various factors, such as expected usage of the asset, expected physical wear and tear, the careand maintenance of the asset, and legal or similar limits on the use of the asset. The estimation of the usefullife of the asset is based on the experience of the Group with similar assets that are used in a similar way.Additional or reduction depreciation is made if the estimated useful lives and/or the residual values of itemsof property, plant and equipment are different from the previous estimation. Useful lives and residual valuesare reviewed at the end of each of the Track Record Period based on changes in circumstances.

Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, and carryforward of unused taxcredits and unused tax losses, to the extent that it is probable that taxable profit will be available againstwhich the deductible temporary differences, and the carryforward of unused tax credits and unused taxlosses can be utilised. Significant management judgement is required to determine the amount of deferredtax assets that can be recognised, based upon the likely timing and level of future taxable profits togetherwith future tax planning strategies.

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APPENDIX I ACCOUNTANTS’ REPORT

Estimation of commission clawback

The Group reviews the carrying amount of commission clawback at the end of each of the Track RecordPeriod and estimates the expected cash outflows related to commission clawback. The estimation requiresthe Group to make estimates of the expected future occurrence of commission clawback by the productissuers and the expenditure required to settle the obligations. Details of the commission clawback are set outin note 22 to the Financial Information.

5. SEGMENT INFORMATION

During the Track Record Period, all of the Group’s revenue and operating profit are generated from theprovision of financial planning and insurance brokerage services in Hong Kong. Revenue representsbrokerage commission income earned from product issuers. Information reported to the Group’s chiefoperating decision maker, for the purpose of resources allocation and assessment performance, is focused onthe operating results of the Group as a whole as the Group’s resources are integrated and no discretefinancial information is available. Accordingly, no segment analysis is presented.

All of the Group’s revenue from external customers and non-current assets were generated from and locatedin Hong Kong during the Track Record Period.

Information about product issuers

Revenue from major product issuers, each of them amounted to 10% or more of the Group’s revenue, is setout below:

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Product issuer A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323,756 267,143 197,477Product issuer B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,172 207,923 187,481Product issuer C* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,254 — —

Note:* The revenue from product issuer C for the years ended 31 December 2008 and 2009 amounted to less than 10% of the Group's

revenue for the respective years.

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APPENDIX I ACCOUNTANTS’ REPORT

6. REVENUE, OTHER INCOME AND GAINS, NET

Revenue, which is also the Group’s turnover, represents the aggregate of investment brokerage commissionincome and insurance and pension scheme brokerage commission income earned during the Track RecordPeriod.

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

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

RevenueInvestment brokerage commission income . . . . . . . . . . . . . . . . . . . . . . . . . . . 633,873 552,943 451,637Insurance brokerage commission income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,743 410 3,391Pension scheme brokerage commission income . . . . . . . . . . . . . . . . . . . . . . . 452 930 559

636,068 554,283 455,587

Other income and gains, netInterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,045 288 16Dividend income from a listed investment . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3 1Gain on disposal of items of property, plant and equipment . . . . . . . . . . . . . . 296 — —Fair value gain/(loss) on an equity investment at fair value through profit or

loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 (159) 109Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 75 82

Total other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,734 207 208

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APPENDIX I ACCOUNTANTS’ REPORT

7. PROFIT BEFORE TAX

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

Year ended 31 December

Notes 2007 2008 2009

HK$’000 HK$’000 HK$’000

Employee benefit expenses (including directors’ remuneration —note 8):

Salaries, allowances, bonuses and benefits in kind . . . . . . . . . . . 49,050 60,578 42,733Pension scheme contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,467 2,991 2,176

51,517 63,569 44,909

Other expenses:Minimum lease payments under operating leases:

Land and buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,480 33,742 38,523Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 516 97

25,595 34,258 38,620

Rates and management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,896 9,943 9,846Marketing expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,523 20,178 11,436Welfare and benefits to the consultants . . . . . . . . . . . . . . . . . . . . . . 4,011 4,939 3,231Auditors’ remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 690 615 260Legal and professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,705 1,361 497Office expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,166 15,664 12,127Office removal expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3,340 2,428Travelling and entertainment expenses . . . . . . . . . . . . . . . . . . . . . . 2,046 3,686 840Administrative service fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28(a) — 1,090 1,412Impairment of accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . 15 — 161 —Impairment/(reversal of impairment) of other receivables, net . . . 16 1,834 1,430 (592)Foreign exchange differences, net . . . . . . . . . . . . . . . . . . . . . . . . . . (1) 5 67Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,591 9,968 8,710

Total other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,056 106,638 88,882

8. DIRECTORS’ REMUNERATION

No directors’ remuneration was paid by the Company during the Track Record Period. Details of directors’remuneration paid and payable to the directors of the Group’s operating subsidiary for the Track RecordPeriod are as follows:

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

Other emoluments:Salaries, allowances, and benefits in kind . . . . . . . . . . . . . . . . . . . . . . . . . 3,246 5,227 1,691Discretionary bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,027 877 345Pension scheme contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612 523 69

7,885 6,627 2,105

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,885 6,627 2,105

Included in the directors’ remuneration were rental benefits for accommodation provided to directors ofHK$799,000, HK$892,000 and HK$572,000 during the years ended 31 December 2007, 2008 and 2009,respectively.

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APPENDIX I ACCOUNTANTS’ REPORT

The remuneration of each of the directors of the Group’s operating subsidiary for the Track Record Period isset out below:

Fees

Salaries,allowances,and benefits

in kindDiscretionary

bonuses

Pensionscheme

contributions Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Year ended 31 December 2007

Executive directorsMr. Chan Chi Keung . . . . . . . . . . . . . . . . . . . . . — 674 870 162 1,706Mr. Chan Tsz Kin, Ernest . . . . . . . . . . . . . . . . . — 643 870 115 1,628Ms. Fong Sut Sum . . . . . . . . . . . . . . . . . . . . . . . — 702 924 89 1,715Mr. Lee Kwok Yin, Denthur . . . . . . . . . . . . . . . — 560 427 132 1,119Mr. Wong Lee Man . . . . . . . . . . . . . . . . . . . . . . — 667 936 114 1,717

— 3,246 4,027 612 7,885

Year ended 31 December 2008

Executive directorsMr. Chan Chi Keung . . . . . . . . . . . . . . . . . . . . . — 1,058 79 152 1,289Mr. Chan Tsz Kin, Ernest . . . . . . . . . . . . . . . . . — 1,117 327 12 1,456Ms. Fong Sut Sum . . . . . . . . . . . . . . . . . . . . . . . — 1,120 156 120 1,396Mr. Lee Kwok Yin, Denthur . . . . . . . . . . . . . . . — 905 126 119 1,150Mr. Wong Lee Man . . . . . . . . . . . . . . . . . . . . . . — 1,027 189 120 1,336

— 5,227 877 523 6,627

Year ended 31 December 2009

Executive directorsMr. Chan Chi Keung . . . . . . . . . . . . . . . . . . . . . — 202 — 15 217Mr. Chan Tsz Kin, Ernest . . . . . . . . . . . . . . . . . — 531 69 12 612Ms. Fong Sut Sum . . . . . . . . . . . . . . . . . . . . . . . — 109 69 10 188Mr. Lee Kwok Yin, Denthur . . . . . . . . . . . . . . . — 85 — 10 95Mr. Wong Lee Man . . . . . . . . . . . . . . . . . . . . . . — 198 — 10 208Mr. Ng Ka Wai, Eric* . . . . . . . . . . . . . . . . . . . . — 225 69 6 300Mr. Mak Kwong Yiu, Mark* . . . . . . . . . . . . . . — 340 69 6 415Mr. Shin Kin Man, Henry* . . . . . . . . . . . . . . . . — 1 69 — 70

— 1,691 345 69 2,105

Note:* Appointed as directors of the Company’s operating subsidiary on 1 July 2009.

There were no arrangements under which a director waived or agreed to waive any remuneration during theTrack Record Period.

9. FIVE HIGHEST PAID EMPLOYEES

The five highest paid employees included four, five and nil directors for each of the years ended31 December 2007, 2008 and 2009, respectively, details of whose remuneration are disclosed in note 8above. Details of the remuneration of the one, nil and five non-director, highest paid employees for the yearsended 31 December 2007, 2008 and 2009, respectively, are as follows:

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Salaries, allowances and bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,701 — 3,348Pension scheme contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 — 60

1,788 — 3,408

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APPENDIX I ACCOUNTANTS’ REPORT

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

Number of employees

2007 2008 2009

Nil to HK$1,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 5HK$1,500,001 to HK$2,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — —

1 — 5

10. INCOME TAXThe Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictionsin which members of the Group are domiciled and operate.

Pursuant to the rules and regulations of the Cayman Islands and the British Virgin Islands, the Group is notsubject to any income tax in the Cayman Islands and the British Virgin Islands.

Hong Kong profits tax has been provided at the rate of 17.5% for the year ended 31 December 2007 and16.5% for the years ended 31 December 2008 and 2009 on the estimated assessable profits arising in HongKong during the Track Record Period.

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Current — Hong KongCharge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,707 6,277 8,633Underprovision/(overprovision) in prior years . . . . . . . . . . . . . . . . . . . . . 920 (263) 175

Deferred (note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (592) 74 158

Total tax charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,035 6,088 8,966

A reconciliation of the tax charge applicable to profit before tax at the Hong Kong statutory rate (thestatutory tax rate for the jurisdiction in which the Group’s operating subsidiary is domiciled) to the taxcharge at the effective tax rate is as follows:

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,429 37,598 47,080

Hong Kong statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.5% 16.5% 16.5%

Tax charge at the statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,775 6,204 7,768Adjustments in respect of current tax of previous periods . . . . . . . . . . . . . . . . 920 (263) 175Effect on opening deferred tax of decrease in rates . . . . . . . . . . . . . . . . . . . . . — (52) —Income not subject to tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (358) (48) (12)Expenses not deductible for tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699 547 748Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (300) 287

Tax charge at the effective rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,035 6,088 8,966

11. DIVIDENDSNo dividend has been paid or declared by the Company since its date of incorporation.

The dividends paid by a subsidiary of the Company to its then shareholder during the Track Record Periodwere as follows:

Year ended 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 7,500 72,000

The rates of dividends and the number of shares ranking for dividends are not presented as such informationis not meaningful for the purpose of this report.

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APPENDIX I ACCOUNTANTS’ REPORT

12. EARNINGS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDEROF THE COMPANY

Earnings per share information is not presented as its inclusion, for the purpose of this report, is notconsidered meaningful due to the Reorganisation and the preparation of the results of the Group for theTrack Record Period on the combined basis as disclosed in note 2 above.

13. PROPERTY, PLANT AND EQUIPMENT

Leaseholdimprovements

Furniture,fixtures andequipment

Computerequipment

Motorvehicles Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

31 December 2007

At 1 January 2007:Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,985 8,095 22,046 951 54,077Accumulated depreciation . . . . . . . . . . . . . . . . (12,137) (3,184) (10,243) (723) (26,287)

Net carrying amount . . . . . . . . . . . . . . . . . . . . 10,848 4,911 11,803 228 27,790

At 1 January 2007, net of accumulateddepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,848 4,911 11,803 228 27,790

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,513 1,095 6,863 2,078 19,549Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (122) (122)Deprecation provided during the year . . . . . . . . . (6,481) (1,456) (6,415) (381) (14,733)

At 31 December 2007, net of accumulateddepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,880 4,550 12,251 1,803 32,484

At 31 December 2007:Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,498 9,190 28,909 2,078 72,675Accumulated depreciation . . . . . . . . . . . . . . . . (18,618) (4,640) (16,658) (275) (40,191)

Net carrying amount . . . . . . . . . . . . . . . . . . . . 13,880 4,550 12,251 1,803 32,484

31 December 2008

At 31 December 2007 and at 1 January 2008:Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,498 9,190 28,909 2,078 72,675Accumulated depreciation . . . . . . . . . . . . . . . . (18,618) (4,640) (16,658) (275) (40,191)

Net carrying amount . . . . . . . . . . . . . . . . . . . . 13,880 4,550 12,251 1,803 32,484

At 1 January 2008, net of accumulateddepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,880 4,550 12,251 1,803 32,484

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,311 3,422 5,373 1,560 23,666Deprecation provided during the year . . . . . . . . . (7,592) (1,670) (6,370) (852) (16,484)

At 31 December 2008, net of accumulateddepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,599 6,302 11,254 2,511 39,666

At 31 December 2008:Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,172 12,612 34,282 3,638 80,704Accumulated depreciation . . . . . . . . . . . . . . . . (10,573) (6,310) (23,028) (1,127) (41,038)

Net carrying amount . . . . . . . . . . . . . . . . . . . . 19,599 6,302 11,254 2,511 39,666

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APPENDIX I ACCOUNTANTS’ REPORT

Leaseholdimprovements

Furniture,fixtures andequipment

Computerequipment

Motorvehicles Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

31 December 2009At 31 December 2008 and at 1 January 2009:

Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,172 12,612 34,282 3,638 80,704Accumulated depreciation . . . . . . . . . . . . . . . . (10,573) (6,310) (23,028) (1,127) (41,038)

Net carrying amount . . . . . . . . . . . . . . . . . . . . 19,599 6,302 11,254 2,511 39,666

At 1 January 2009, net of accumulateddepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,599 6,302 11,254 2,511 39,666

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,424 2,338 2,445 793 9,000Deprecation provided during the year . . . . . . . . . (6,881) (2,566) (5,995) (1,293) (16,735)

At 31 December 2009, net of accumulateddepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,142 6,074 7,704 2,011 31,931

At 31 December 2009:Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,069 14,950 36,727 4,431 82,177Accumulated depreciation . . . . . . . . . . . . . . . . (9,927) (8,876) (29,023) (2,420) (50,246)

Net carrying amount . . . . . . . . . . . . . . . . . . . . 16,142 6,074 7,704 2,011 31,931

14. DEFERRED TAX

The movements in deferred tax liabilities and assets during the Track Record Period are as follows:

Depreciationallowance in

excess of relateddeprecation Others Total

HK$’000 HK$’000 HK$’000

Deferred tax assets/(liabilities) at 1 January 2007 . . . . . . . . . . . . . . . . . . (1,046) 1,369 323Deferred tax credited to the statement of comprehensive income during

the year (note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570 22 592

Deferred tax assets/(liabilities) at31 December 2007 and at 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . (476) 1,391 915

Deferred tax credited/(debited) to the statement of comprehensiveincome during the year (note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (797) 723 (74)

Deferred tax assets/(liabilities) at31 December 2008 and at 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . (1,273) 2,114 841

Deferred tax credited/(debited) to the statement of comprehensiveincome during the year (note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 (596) (158)

Deferred tax assets/(liabilities) at 31 December 2009 . . . . . . . . . . . . . . . (835) 1,518 683

For the purpose of the combined statements of financial position presentation, the deferred tax assets andliabilities that related to the same taxable entity and the same taxation authority have been offset. Thefollowing is an analysis of the deferred tax balances of the Group for financial reporting purposes:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Net deferred tax assets recognised in the combined statements of financialposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 915 841 683

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APPENDIX I ACCOUNTANTS’ REPORT

15. ACCOUNTS RECEIVABLEAs at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,232 14,809 17,139Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (336) (497) —

31,896 14,312 17,139

Accounts receivable represented brokerage commission receivable which is generally settled within 45 daysupon the execution of the insurance policies and/or receipt of statements from product issuers.

The Group seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overduebalances are reviewed regularly by senior management. Accounts receivable are non-interest-bearing.

An aged analysis of accounts receivable of the Group as at the end of each of the Track Record Period,based on the date of recognition of revenue and net of provisions, is as follows:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Within one month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,896 12,084 17,1391 to 2 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,228 —

31,896 14,312 17,139

The movements in the provision for impairment of accounts receivable are as follows:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

At 1 January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 336 497Impairment losses recognised (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 161 —Amount written off as uncollectible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (497)

At 31 December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 497 —

Included in the above provision for impairment of accounts receivable is a provision for individuallyimpaired accounts receivable of HK$336,000 and HK$497,000 as at 31 December 2007 and 2008,respectively, with carrying amounts before provision of HK$502,000 and HK$497,000 as at 31 December2007 and 2008, respectively. Such provision was determined after taking into account the ageing of therespective account receivable balances, the creditworthiness of the customers, their repayment history andtheir historical write-off experience. Such receivables are not expected to be fully recovered. The Groupdoes not hold any collateral or other credit enhancements over these balances.

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

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Neither past due nor impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,730 12,097 17,139Less than 1 month past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,215 —

31,730 14,312 17,139

Receivables that were neither past due nor impaired relate to a number of reputable customers for whomthere has been no recent history of default.

Receivables that were past due but not impaired relate to a number of independent customers that have agood track record with the Group. Based on past experience, the directors of the Group’s operating

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APPENDIX I ACCOUNTANTS’ REPORT

subsidiary company are of the opinion that no provision for impairment is necessary in respect of thesebalances as there has not been a significant change in credit quality and the balances are still consideredfully recoverable. The Group does not hold any collateral or other credit enhancements over these balances.

16. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,713 10,334 20,329Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,385) (4,815) (4,223)

3,328 5,519 16,106

Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,165 1,363 851Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,154 7,696 3,858

Total prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . 19,647 14,578 20,815

Apart from the other receivable balances of HK$801,000 as at 31 December 2009 which bore interest atrates ranging from 2% to 8% per annum and an other receivable balance of HK$2,000,000 as at 31December 2008 and 2009 which bore interest at 4% per annum, the remaining balances are non-interest-bearing.

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

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

At 1 January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,551 3,385 4,815Impairment losses recognised (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,834 1,430 2,443Impairment losses reversed (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (3,035)

At 31 December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,385 4,815 4,223

Included in the above provision for impairment of other receivables is a provision for individually impairedother receivables of HK$3,385,000, HK$4,815,000 and HK$4,223,000 as at 31 December 2007, 2008 and2009, respectively, with a carrying amount before provision of HK$4,744,000, HK$6,577,000 andHK$15,420,000 as at 31 December 2007, 2008 and 2009, respectively. Such provision was determined aftertaking into account the ageing of the respective receivable balances, the creditworthiness of the debtors,their repayment history and their historical write-off experience. Such receivables are not expected to befully recovered. The Group does not hold any collateral or other credit enhancements over these balances.

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

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Neither past due nor impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,355 3,236 2,826Less than 1 month past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 26 4441 month to 2 months past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 43 97Over 3 months past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 452 1,542

1,969 3,757 4,909

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

Receivables that were past due but not impaired relate to a number of independent debtors that have a goodtrack record with the Group. Based on past experience, the directors of the Group’s operating subsidiary areof the opinion that no provision for impairment is necessary in respect of these balances as there has not

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APPENDIX I ACCOUNTANTS’ REPORT

been a significant change in credit quality and the balances are still considered fully recoverable. The Groupdoes not hold any collateral or other credit enhancements over these balances, except for other receivablesas at 31 December 2009 amounting to HK$329,000 which were secured by personal guarantees and an otherreceivable as at 31 December 2008 and 2009 amounting to HK$2,000,000 which was secured by the entireshare capital of two private limited companies incorporated in Hong Kong.

17. EQUITY INVESTMENT AT FAIR VALUE THROUGH PROFIT OR LOSS

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Listed equity investment, at fair value:Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 129 238

The fair value of the listed equity investment is based on quoted market price.

18. BALANCES WITH RELATED PARTIES

As at 31 December

Notes 2007 2008 2009

HK$’000 HK$’000 HK$’000

Due from related parties:Convoy Asset Management Limited . . . . . . . . . . . . . . . . . . . . . . . (a) 12,860 — —Convoy Beijing Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) — 48 —Convoy Collateral Limited (“CCL”) . . . . . . . . . . . . . . . . . . . . . . . (a) 12,013 8,875 —Convoy Investment Holding Limited . . . . . . . . . . . . . . . . . . . . . . . (a) 44,216 74,119 —Kerberos (Nominee) Limited (“Kerberos”) . . . . . . . . . . . . . . . . . (b) 5,440 5,440 —Prosper Ocean Investments Limited . . . . . . . . . . . . . . . . . . . . . . . (a) 10 — —Winus Holdings Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) 1 1 —

74,540 88,483 —

Due to a related party:CFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,248 14,743 —

All balances with related parties are non-trade in nature, interest-free, unsecured and have no fixed terms ofrepayment.

Notes:(a) These companies are owned and controlled by CFG, the parent of the Company.

(b) Kerberos is a subsidiary of the ultimate holding company of the Company.

19. CASH AND CASH EQUIVALENTS

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Cash and bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,232 18,478 83,755Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 3,394 —

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,474 21,872 83,755

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits aremade for varying periods of between one day and three months depending on the immediate cashrequirements of the Group, and earn interest at the respective short term time deposit rates. The bankbalances and pledged deposits are deposited with creditworthy banks with no recent history of default.

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APPENDIX I ACCOUNTANTS’ REPORT

20. ACCOUNTS PAYABLE

Accounts payable represented commission payable for brokerage of investment schemes and insuranceproducts which are generally settled within 30 days to 120 days upon receipt of payments from productissuers by the Group.

An aged analysis of accounts payable as at the end of each of the Track Record Period is as follows:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Within 1 month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,187 13,850 25,4831 to 2 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,267 8,808 15,8572 to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,340 8,552 18,265Over 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,960 16,746 15,960

92,754 47,956 75,565

Accounts payable are non-interest-bearing. Included in the Group’s accounts payable as at 31 December2009 were commission payable to the spouse and cousins of a director of the Group’s operating subsidiarywho are consultants of the Group, totalling HK$1,356,000, which are payable on similar terms to otherconsultants of the Group.

21. OTHER PAYABLES AND ACCRUALS

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,224 8,642 4,513Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,774 9,296 15,070

18,998 17,938 19,583

22. COMMISSION CLAWBACK

The Group is entitled to receive investment brokerage commission income from various product issuers forbusiness referral and introduction. The commission is calculated based on pre-determined percentages of theregular contributions by the Group's customers to these product issuers. Pursuant to the terms of theagreements entered into between the Group and these product issuers, the commission paid by the productissuers to the Group is subject to a commission clawback by the product issuers on a pro-rata basis over anindemnified period. The indemnified period is generally from 6 months to 24 months. In the event that acustomer terminates the regular contribution within the indemnified period, the product issuers willclawback the relevant commission. The amount of the commission clawback represents expected cashoutflows which are estimated with reference to the sales volume, past experience of the levels of clawback,and the directors' best estimates of the expenditure required to settle the obligations. The estimation basis isreviewed on an ongoing basis and revised by the directors where appropriate.

23. ISSUED CAPITAL

The Company was incorporated in the Cayman Islands on 12 March 2010, with authorised share capital ofHK$100,000,000 divided into 1,000,000,000 ordinary shares of HK$0.10 each. Save for the aforesaid andthe Reorganisation, the Company has not conducted any business since the date of its incorporation.

24. CONTINGENT LIABILITIES

At the end of each of the Track Record Period, neither the Group nor the Company had any significantcontingent liabilities.

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APPENDIX I ACCOUNTANTS’ REPORT

25. NOTE TO THE COMBINED STATEMENTS OF CASH FLOWS

Major non-cash transaction

During the year ended 31 December 2008, dividends of HK$7,500,000 to CFG, the then shareholder of asubsidiary of the Company, were settled through the current account balance with CFG.

26. OPERATING LEASE ARRANGEMENTS

The Group leases its office properties, staff quarters and certain equipment under operating leasearrangements. Leases for properties, staff quarters and equipment are negotiated for terms ranging from twoto six years.

At the end of each of the Track Record Period, the Group had total future minimum lease payments undernon-cancellable operating leases falling due as follows:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,307 45,587 35,991In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,881 127,617 52,249After five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,392 —

60,188 174,596 88,240

27. CAPITAL COMMITMENT

The Group had the following capital commitment at the end of each of the Track Record Period.

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Contracted, but not provided for:Acquisition of items of office and computer equipment . . . . . . . . . . . . . . . . 29 — —

28. RELATED PARTY TRANSACTIONS

(a) In addition to the transactions detailed elsewhere in the Financial Information, the Group had thefollowing material transactions with related parties during the Track Record Period.

As at 31 December

Notes 2007 2008 2009

HK$’000 HK$’000 HK$’000

Recurring transactions:Commission expenses to:Spouse of a key management personnel/director* . . . . . . . . . . . . (i) — — 1,789Cousins of a key management personnel/director* . . . . . . . . . . . (i) — — 3,087Administrative services fees charged by CCL . . . . . . . . . . . . . . . (ii) — 1,090 1,412

* The key management personnel was appointed as a director of the Group’s operating subsidiary on 1 July 2009.

Notes:(i) They are consultants of the Group. The commission expenses were determined based on the volume of brokerage

transactions executed by them for the accounts of the Group. The commissions offered to them are substantially in line withthose offered to other consultants of the Group.

(ii) CCL is a subsidiary of CFG. The administrative services fees were charged by CCL based on terms agreed between thetwo parties.

I-29

APPENDIX I ACCOUNTANTS’ REPORT

(b) Compensation of key management personnel of the Group:

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Salaries, allowances, bonuses and benefits in kind . . . . . . . . . . . . . . . . . 9,201 7,219 2,665Pension scheme contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 707 657 91

9,908 7,876 2,756

Further details of directors’ emoluments are included in note 8 to the Financial Information.

29. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of the categories of financial instruments as at the end of each of the Track RecordPeriod are as follows:

Financial assets

Financial assets at fair valuethrough profit or loss — held

for trading Loans and receivables Total

2007 2008 2009 2007 2008 2009 2007 2008 2009

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Equity investmentat fair valuethrough profitor loss . . . . . . . 288 129 238 — — — 288 129 238

Accountsreceivable . . . . — — — 31,896 14,312 17,139 31,896 14,312 17,139

Financial assetsincluded inprepayments,deposits andotherreceivables . . . . — — — 18,482 22,626 26,915 18,482 22,626 26,915

Due from relatedparties . . . . . . . — — — 74,540 88,483 — 74,540 88,483 —

Cash and cashequivalents . . . . — — — 48,474 21,872 83,755 48,474 21,872 83,755

288 129 238 173,392 147,293 127,809 173,680 147,422 128,047

Financial liabilities

Financial liabilities atamortised cost

As at 31 December

2007 2008 2009

HK$’000 HK$’000 HK$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,754 47,956 75,565Financial liabilities included in other payables and accruals . . . . . . . . . . . . . . 16,616 12,265 18,914Due to a related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,248 14,743 —Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,050 7,993 5,913

123,668 82,957 100,392

I-30

APPENDIX I ACCOUNTANTS’ REPORT

30. FAIR VALUE HIERARCHY

The Group uses the following hierarchy for determining and disclosing the fair value of financialinstruments:

Level 1: fair values measured based on quoted prices (unadjusted) in active markets for identical assets orliabilities.

Level 2: fair values measured based on valuation techniques for which all inputs which have a significanteffect on the recorded fair value are observable, either directly or indirectly.

Level 3: fair values measured based on valuation techniques for which all inputs which have a significanteffect on the recorded fair value are not based on observable market data (unobservable inputs).

As at 31 December 2007, 2008 and 2009, the Group held the following financial asset measured at fairvalue:

Level 1 Level 1 Level 1

2007 2008 2009

HK$’000 HK$’000 HK$’000

Equity investment at fair value through profit or loss (note 17) . . . . . . . . . . . . 288 129 238

During the years ended 31 December 2007, 2008 and 2009, there were no transfers of fair valuemeasurements between Level 1 and Level 2 and no transfers into or out of Level 3.

31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial instruments comprise cash and cash equivalents and amounts due to relatedparties. The main purpose of these financial instruments is to raise finance for the Group’s operations. TheGroup has various other financial assets and liabilities such as accounts receivable, deposits and otherreceivables, balances with related parties, accounts and other payables, which arise directly from itsoperations.

The main risks arising from the Group's financial instruments are interest rate risk, credit risk and liquidityrisk. The board of directors reviews and agrees policies for managing each of these risks and they aresummarised below.

Interest rate risk

The Group is exposed to interest rate risk through the impact of rate changes on interest-bearing financialassets. Cash at banks earns interest at floating rates based on daily bank deposit rates.

Credit risk

The Group conducts business only with recognised and creditworthy third parties. Receivable balances aremonitored on an ongoing basis and the Group's exposure to bad debts is not significant.

The credit risk of the Group's financial assets, which comprise accounts receivable, deposits and otherreceivables, amounts due from related companies and fellow subsidiaries and bank balances, arises fromdefault of the counterparty, with a maximum exposure equal to the carrying amounts of these instruments.

As at 31 December 2007, 2008 and 2009, the Group had certain concentrations of credit risk as 38%, 62%and 53%, and 96%, 98% and 95% of the Group’s accounts receivable were due from the Group’s largestproduct issuers and the five largest product issuers, respectively.

Further quantitative data in respect of the Group's exposure to credit risk arising from accounts receivableand other receivables are disclosed in notes 15 and 16 to the Financial Information, respectively.

I-31

APPENDIX I ACCOUNTANTS’ REPORT

Liquidity risk

In the management of liquidity risk, the Group monitors and maintains level of cash and cash equivalentsdeemed adequate by management to finance the Group’s operations and mitigate the effects of fluctuationsin cash flows. The Group also maintains a balance between continuity of funding and flexibility through thefunding from a holding company.

The maturity profile of the Group’s financial liabilities as at the end of each of the Track Record Period,based on the contractual undiscounted payments, was as follows:

2007

No fixed termsof repayment/On demand

Less than3 months

3 to less than12 months Total

HK$’000 HK$’000 HK$’000 HK$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 80,501 12,253 92,754Financial liabilities included in other payables and

accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 16,616 — 16,616Due to a related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,248 — — 9,248Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,050 — — 5,050

14,298 97,117 12,253 123,668

2008

No fixed termsof repayment/On demand

Less than3 months

3 to less than12 months Total

HK$’000 HK$’000 HK$’000 HK$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 35,723 12,233 47,956Financial liabilities included in other payables and

accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 12,265 — 12,265Due to a related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,743 — — 14,743Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,993 — — 7,993

22,736 47,988 12,233 82,957

2009

No fixed termsof repayment/On demand

Less than3 months

3 to less than12 months Total

HK$’000 HK$’000 HK$’000 HK$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 65,325 10,240 75,565Financial liabilities included in other payables and

accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 18,914 — 18,914Commission clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,913 — — 5,913

5,913 84,239 10,240 100,392

Capital management

The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continueas a going concern and to maintain a healthy capital ratio in order to support its business and to enhance theshareholder’s value.

The Group manages its capital structure and makes adjustments to it in light of changes in economicconditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment toshareholders, return capital to shareholders or issue new shares. The Group is not subject to any externallyimposed capital requirements except for a subsidiary registered under the Insurance Companies Ordinanceof Hong Kong which is subject to the relevant minimum capital requirement. During the Track RecordPeriod, that subsidiary complied with such external imposed capital requirement at all times by maintaining

I-32

APPENDIX I ACCOUNTANTS’ REPORT

both minimum paid up share capital and minimum net assets of HK$100,000. No changes were made in theobjectives, policies or processes for managing capital during the Track Record Period.

Capital of the Group comprises all components of the shareholder’s equity.

III. SUBSEQUENT EVENTS

The companies now comprising the Group underwent and completed a Reorganisation on21 June 2010 in preparation for the listing of the shares of the Company on the Stock Exchange.Further details of the Reorganisation are set out in the section headed “Corporate reorganisation” in theAppendix V to the Prospectus. As a result of the Reorganisation, the Company became the holdingcompany of the subsidiaries now comprising the Group.

On 23 June 2010, written resolutions of the sole shareholder of the Company were passed toapprove the matters set out in the section headed “Written resolutions of the sole shareholder of ourCompany passed on 23 June 2010” in Appendix V to the Prospectus.

IV. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Group and the Company in respectof any period subsequent to 31 December 2009.

Yours faithfully,Ernst & Young

Certified Public AccountantsHong Kong

I-33

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

For illustrative purpose only, the unaudited pro forma financial information prepared in accordancewith Rule 4.29 of the Listing Rules is set out here to provide the prospective investors with furtherinformation about how the proposed listing might have affected the financial position of our Groupafter completion of the Share Offer.

Although reasonable care has been exercised in preparing the said information, prospective investorswho read the information should bear in mind that these figures are inherently subject to adjustmentsand may not give a complete picture of the actual financial performance of our Group and financialposition of our Group as at 31 December 2009 or at any future date.

UNAUDITED PRO FORMA ADJUSTED COMBINED NET TANGIBLE ASSETS

The following unaudited pro forma adjusted combined net tangible assets prepared on the basisof the notes set out below to illustrate the effect of the Share Offer on our net tangible assets as at31 December 2009 as if they had taken place on that date. The unaudited pro forma adjusted combinednet tangible assets of our Group have been prepared for illustrative purpose only and, because of theirhypothetical nature, they may not give a true picture of our net tangible assets had the Share Offer beencompleted as at 31 December 2009 or at any future date.

The unaudited pro forma adjusted combined net tangible assets are calculated based on ouraudited combined net tangible assets attributable to the owner of the Company as at 31 December 2009and is adjusted as described below.

Audited combinednet tangible assetsof our Group asat 31 December

2009

Estimated netproceeds from

the ShareOffer

Unauditedpro forma

adjusted combinednet tangible assets

Unauditedpro formaadjustedcombined

net tangibleassets per

Share

HK$’000 HK$’000 HK$’000 (Note 2)(Note 1)

Based on the Offer Price of HK$1.00 perShare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,948 85,000 130,948 HK32.7 cents

Based on the Offer Price of HK$1.20 perShare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,948 105,000 150,948 HK37.7 cents

This statement has been prepared for illustrative purposes only and because of its nature, it maynot give a true picture of financial position of our Group following the Share Offer.

Notes:(1) The estimated net proceeds from the Share Offer of 100,000,000 new Offer Shares are based on the Offer Price of HK$1.00 and

HK$1.20 per Share, after deduction of the underwriting fees and other related expenses.

(2) The unaudited pro forma adjusted combined net tangible assets per Share is arrived at after the adjustment for the estimated net proceedsfrom the Share Offer payable to us as described in Note (1) above and on the basis that a total of 400,000,000 Shares were in issue(including Shares in issue as at the date of this prospectus and those Shares to be issued pursuant to the Share Offer).

II-1

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report received from our Company’s reporting accountants, Ernst &Young, Certified Public Accountants, Hong Kong, prepared for the inclusion in this prospectus.

18th FloorTwo International Finance Centre

8 Finance Street, CentralHong Kong

29 June 2010

The DirectorsConvoy Financial Services Holdings LimitedQuam Capital Limited

Dear Sirs,

We report on the unaudited pro forma adjusted combined net tangible assets (the “UnauditedPro Forma Financial Information”) of Convoy Financial Services Holdings Limited (the“Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), which havebeen prepared by the directors of the Company (the “Directors”) for illustrative purposes only, toprovide information about how the public offer and placing of 100,000,000 shares of HK$0.10 each inthe capital of the Company might have affected the financial information presented, for inclusion inAppendix II to the prospectus of the Company dated 29 June 2010 (the “Prospectus”). The basis ofpreparation of the Unaudited Pro Forma Financial Information is set out in Appendix II to theProspectus.

Respective Responsibilities of the Directors and Reporting Accountants

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

It is our responsibility to form an opinion, as required by paragraph 4.29(7) of the ListingRules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do notaccept any responsibility for any reports previously given by us on any financial information used inthe compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whomthose reports were addressed by us at the dates of their issue.

Basis of Opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment CircularReporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in InvestmentCirculars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financialinformation with the source documents, considering the evidence supporting the adjustments, anddiscussing the Unaudited Pro Forma Financial Information with the Directors. This engagement did notinvolve independent examination of any of the underlying financial information.

II-2

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

Our work did not constitute an audit or a review made in accordance with Hong KongStandards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards onAssurance Engagements issued by the HKICPA, and accordingly, we do not express any such audit orreview assurance on the Unaudited Pro Forma Financial Information.

We planned and performed our work so as to obtain the information and explanations weconsidered necessary in order to provide us with sufficient evidence to give reasonable assurance thatthe Unaudited Pro Forma Financial Information has been properly compiled by the Directors on thebasis stated, that such basis is consistent with the accounting policies of the Group and that theadjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information asdisclosed pursuant to paragraph 4.29(1) of the Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on thejudgements and assumptions of the Directors, and, because of its hypothetical nature, does not provideany assurance or indication that any event will take place in the future and may not be indicative of thefinancial position of the Group as at 31 December 2009 or any future dates.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by theDirectors on the basis stated;

(b) such basis is consistent with the accounting policies of the Group; and

(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma FinancialInformation as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully,Ernst & Young

Certified Public AccountantsHong Kong

II-3

APPENDIX III PROPERTY VALUATION

The following is the text of a letter, summary of values and valuation certificate prepared for thepurpose of incorporation in this prospectus and received from Grant Sherman Appraisal Limited, anindependent valuer, in connection with their valuations as at 31 March 2010 of the properties of ourGroup.

Room 1701, 17/FJubilee Centre

18 Fenwick StreetWanchai

Hong Kong

29 June 2010

The DirectorsConvoy Financial Services Holdings Limited34/F., One Island East18 Westlands RoadIsland EastHong Kong

Dear Sirs,

In accordance with your instructions to value the property interests leased by Convoy FinancialServices Holdings Limited (the “Company”) and/or its subsidiaries (hereinafter together referred to asthe “Group”) in Hong Kong, we confirm that we have made relevant enquiries and obtained suchfurther information as we consider necessary for the purpose of providing you with our opinion of themarket value of the properties as at 31 March 2010.

Our valuation is our opinion of market value which we would define as intended to mean theestimated amount for which a property should exchange on the date of valuation between a willingbuyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties hadeach acted knowledgeably, prudently and without compulsion.

We have valued the property interests by comparison approach assuming sale in their existingstate with the benefit of vacant possession and by making reference to comparable sales evidences asavailable in the relevant market.

For the property interests which are leased by the Group in Hong Kong, we are of the opinionthat no commercial value attribute to the Group due mainly to the short term nature or the prohibitionagainst assignment or sub-letting or otherwise due to the lack of substantial profit rents.

In valuing the property interests, we have complied with all the requirements contained inChapter 5 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong KongLimited and The HKIS Valuation Standards on Properties (1st Edition 2005) published by The HongKong Institute of Surveyors.

Our valuations have been made on the assumption that the owner sells the property interests onthe market in their existing state without the benefit of a deferred terms contract, leaseback, jointventure, management agreement or any similar arrangement which would serve to affect the propertyvalues.

III-1

APPENDIX III PROPERTY VALUATION

No allowance has been made in our valuation for any charge, mortgage or amount owing on theproperty nor for any expenses or taxation which may be incurred in effecting a sale. It is assumed thatthe property is free from encumbrances, restrictions and outgoings of an onerous nature which couldaffect its values.

In valuing the property interests, we have assumed that the owner has free and uninterruptedrights to use the property for the whole of the unexpired term as granted and is entitled to transfer theproperty with the residual term without payment of any further premium to the government authoritiesor any third parties.

We have assumed that all consents, approvals and licenses from relevant governmentauthorities for the property have been granted without any onerous conditions or undue time delaywhich might affect its value. It is assumed that all applicable zoning and use regulations andrestrictions have been complied with unless nonconformity has been stated, defined, and considered inthe appraisal report.

We have caused land searches at the Urban Land Registry. However, we have not scrutinisedthe original title documents. In the course of our valuation, we have relied on a considerable extent oninformation provided by the Company on such matters as statutory notices, easements, tenure,occupation, floor areas, identification of the property and all other relevant matters. We have had noreason to doubt the truth and accuracy of the information provided to us by the Companies which ismaterial to the valuation. We were also advised by the Company that no material facts have beenomitted from the information supplied. All documents have been used as reference only. Alldimensions, measurements and areas are approximations only. No on-site measurements have beentaken.

We have inspected the exterior and, where possible, the interior of the properties in respect ofwhich we have been provided with such information as we have required for the purpose of ourvaluations. However, no structural survey has been carried out and it was not possible to inspect thewood work and other parts of the structures which were covered, unexposed or inaccessible. We aretherefore, unable to report that the property is free of rot, infestation or any structural defects. No testshave been carried out on any of the building services.

Unless otherwise specified, all amounts are denominated in Hong Kong Dollars.

We enclose herewith the summary of valuations and valuation certificates.

Respectfully submitted,For and on behalf of

GRANT SHERMAN APPRAISAL LIMITED

Peggy Y.Y. LaiMRICS MHKIS RPS(GP)

Associate DirectorReal Estate Group

Note:Ms. Peggy Y.Y. Lai is a member of the Royal Institution of Chartered Surveyors, a member of the Hong Kong Institute of Surveyors andRegistered Professional Surveyors in the General Practice Section, who has over 5 years experience in the valuation of properties in HongKong, the PRC and the Asian Region.

III-2

APPENDIX III PROPERTY VALUATION

SUMMARY OF VALUATION

Property interests leased by the Group in Hong Kong

Property

Market Value as at31 March 2010

(HK$)

1. 1st Floor (including the ground floor entrance and escalators E4 and E5)Li Po Chun ChambersNo. 189 Des Voeux Road CentralHong Kong

No commercial value

2. 7th Floor Li Po Chun ChambersNo. 189 Des Voeux Road CentralHong Kong

No commercial value

3. 32nd FloorOne Island EastNo. 18 Westlands RoadIsland EastHong Kong

No commercial value

4. 33rd and 34th FloorsOne Island East18 Westlands RoadIsland EastHong Kong

No commercial value

5. Unit No.05 on 12/FEastern CentreNo. 1065 King’s RoadHong Kong

No commercial value

6. G/F with Garden, 1st and 2nd Floors & RoofNo. 138A Sai KengTai PoNew Territories

No commercial value

7. Flat A on 8th FloorNew Wealth MansionNos. 68, 70 & 72 Wharf RoadHong Kong

No commercial value

Grand Total: No Commercial Value

III-3

APPENDIX III PROPERTY VALUATION

VALUATION CERTIFICATE

Property interests leased by the Group in Hong Kong

Property Description and Tenure Particulars of Occupancy

Market Value as at31 March 2010

(HK$)

1. 1st Floor (including theground floor entrance andescalators E4 and E5)Li Po Chun ChambersNo. 189 Des Voeux RoadCentralHong Kong

The property comprises whole of1st floor and portion of G/F of a26 -storey commercial buildingplus a basement level completedin about 1995.

The total gross floor area of theproperty is approximately929 sq.m. (10,000 sq.ft.)

The Remaining Portion ofMarine Lot Nos. 512 and 513are held under a GovernmentLease for a term of 999 yearscommencing from 22 May 1902.

The total government rentpayable the above lots isHK$302 per annum.

The property is leasedto the Group by anindependent third partyfor a term commencingfrom 1 May 2007 to30 April 2011 at amonthly rental ofHK$554,771(exclusive of rates, air-conditioning charges,management chargesand other outgoings)with an option torenewed for a furtherterm of 3 years.

The property isoccupied by the Groupfor shop and ancillaryaccommodation(financial business).

No commercialvalue

III-4

APPENDIX III PROPERTY VALUATION

VALUATION CERTIFICATE

Property Description and Tenure Particulars of Occupancy

Market Value as at31 March 2010

(HK$)

2. 7th Floor Li Po Chun ChambersNo. 189 Des Voeux RoadCentralHong Kong

The property compriseswhole of 7th floor of a26 -storey commercialbuilding plus a basementlevel completed in about1995.

The total gross floor area ofthe property isapproximately 887 sq.m.(9,551 sq.ft.)

The Remaining Portion ofMarine Lot Nos. 512 and513 are held under aGovernment Lease for aterm of 999 yearscommencing from 22 May1902.

The total government rentpayable for the above lots isHK$302 per annum.

The property is leasedto the Group by anindependent third partyfor a term commencingfrom 1 July 2007 to30 April 2011 at amonthly rental ofHK$321,869(exclusive of rates, air-conditioning charges,management chargesand other outgoings))with an option torenew for a furtherterm of 3 years.

The property isoccupied by the Groupfor office use.

No commercialvalue

III-5

APPENDIX III PROPERTY VALUATION

VALUATION CERTIFICATE

Property Description and Tenure Particulars of Occupancy

Market Value as at31 March 2010

(HK$)

3. 32nd FloorOne Island East18 Westlands RoadIsland EastHong Kong

The property compriseswhole of 32nd floor of a68-storey commercialbuilding plus 2 basementlevels. It was completed inabout 2008.

The lettable area of theproperty is approximately1,981 sq.m. (21,323 sq.ft.)

Sub-Sections 5 and 6 ofSection C of Quarry BayMarine Lot No. 1 andSection D of Quarry BayInland Lot No. 15 are heldunder a Government Leasefor a term of 999 yearscommencing from2 February 1882.

Sections F and G of QuarryBay Marine Lot No. 2 andthe Extension thereto areheld under a GovernmentLease for a term of 999years commencing from18 April 1900.

The total government rentpayable for the above lots isHK193 per annum.

The property is leasedto the Group by anindependent third partyfor a term commencingfrom 1 February 2009to 31 January 2013 at amonthly rental ofHK$637,132(exclusive of rates, air-conditioning charges,management chargesand other outgoings)and is subject to a rentreview for each periodof 36 months.

The property isoccupied by the Groupfor office use.

No commercialvalue

III-6

APPENDIX III PROPERTY VALUATION

VALUATION CERTIFICATE

Property Description and Tenure Particulars of Occupancy

Market Value as at31 March 2010

(HK$)

4. 33rd and 34th FloorsOne Island East18 Westlands RoadIsland EastHong Kong

The property compriseswhole of 33rd and 34th

floors of a 68-storeycommercial building plus 2basement levels. It wascompleted in about 2008.

The total lettable area of theproperty is approximately3,953 sq.m. (42,549 sq.ft.)

Sub-Sections 5 and 6 ofSection C of Quarry BayMarine Lot No. 1 andSection D of Quarry BayInland Lot No. 15 are heldunder a Government Leasefor a term of 999 yearscommencing from2 February 1882.

Sections F and G of QuarryBay Marine Lot No. 2 andthe Extension thereto areheld under a GovernmentLease for a term of 999years commencing from18 April 1900.

The total government rentpayable for the above lots isHK$193 per annum.

The property is leasedto the Group by anindependent third partyfor a term of 53 monthscommencing from1 September 2008 to31 January 2013 at amonthly rental ofHK$1,271,365(exclusive of rates, air-conditioning charges,management chargesand other outgoings)and is subject to a rentreview for each periodof 36 months.

The property isoccupied by the Groupfor office use.

No commercialvalue

III-7

APPENDIX III PROPERTY VALUATION

VALUATION CERTIFICATE

Property Description and Tenure Particulars of Occupancy

Market Value as at31 March 2010

(HK$)

5. Unit No.05 on 12/FEastern CentreNo. 1065 King’s RoadHong Kong

The property comprises aworkshop unit on 12th floorof a 22-storey industrialbuilding plus 2 basementlevels. It was completed inabout 1985.

The total gross floor area ofthe property isapproximately 244.9 sq.m.(2,636 sq.ft.)

Sub-Section 1 of Section Eof Quarry Bay Marine LotNo. 2 and the Extensionthereto is held under aGovernment Lease for aterm of 999 yearscommencing from 18 April1900.

Sub-Section 1 of Section Cof Quarry Bay Inland LotNo. 15 is held under aGovernment Lease for aterm 999 yearscommencing from2 February 1882.

The government rentpayable for the above lots isHK$180 per annum.

The property is leasedto the Group by anindependent third partyfor a term commencingfrom 1 November 2008to 31 October 2010 at amonthly rental ofHK$32,000 (inclusiveof government rent,rates and managementfees) with an option torenew for a furtherterm of 2 years.

The property isoccupied by the Groupfor storage purpose.

No commercialvalue

Notes:1. The property is subject to a legal charge (the “Legal Charge”) in favour of Hang Seng Bank Limited (the “Mortgagee”) by Memorial

No. UB6467118 on 31 October 1995. According to the information from the Company, it is uncertain as to whether the Mortgagee’sprior consent has been obtained before entering into the tenancy agreement made between Winstar Investment Limited and the Companydated 1 November 2008 (the “TA”). The Company understand that in the event that the Mortgagee’s prior consent has not been obtainedbefore entering into the TA, the TA is void as against the Mortgagee and its successors in title and the Mortgagee can treat ConvoyFinancial Services Limited (“CFS”), the tenant of the property and a subsidiary of the Company, as trespasser and exercise its right totake possession of the property.

2. The Company understands that the TA which has an option to renew has not been registered in the Land Registry and failure to registerthe option may, under Section 3(2) of the Land Registration Ordinance (Chapter 128, Laws of Hong Kong), prevent its operation asagainst any subsequent bona fide purchaser or mortgagee for valuable consideration of the property and CFS may lose the right toexercise the option to renew the term of the TA to such subsequent bona fide purchaser or mortgagee. However, CFS is not subject toany penalty or fine by any governmental authority due to the failure to register the TA.

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APPENDIX III PROPERTY VALUATION

VALUATION CERTIFICATE

Property Description and Tenure Particulars of Occupancy

Market Value as at31 March 2010

(HK$)

6. G/F with Garden, 1st and 2nd

Floors & RoofNo. 138A Sai KengTai PoNew Territories

The property compriseswhole block of a 3-storeyvillage type housecompleted in about 2007.

The total gross floor area ofthe property isapproximately 195 sq.m.(2,100 sq.ft.) with gardenarea of about 93 sq.m.(1,000 sq.ft.)

The Remaining Portion ofSection A of Lot No. 329 inD.D. 209 is held under aGovernment Lease for aterm of 75 years renewablefor 24 years commencingfrom 7 July 1898 andstatutorily extended to30 June, 2047.

The government rentpayable for Lot No. 329 inDD 209 is HK$0.33 perannum.

The property is leasedto the Group by threeindependent thirdparties for a termcommencing from10 December 2008 to9 December 2010 at amonthly rental ofHK$31,500 (exclusiveof other charges.)

The property isoccupied by the Groupfor residential use.

No commercialvalue

Note: The tenancy agreement made between Wong Ying Kit, Ng Geoffrey Chuk-Ho and Poon Kit Ling and Convoy Financial ServicesLimited (a subsidiary of the Company) dated 23 November 2008 in respect of the property was cancelled as from 23 June 2010.

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APPENDIX III PROPERTY VALUATION

VALUATION CERTIFICATE

Property Description and Tenure Particulars of Occupancy

Market Value as at31 March 2010

(HK$)

7. Flat A on 8th FloorNew Wealth MansionNos. 68, 70 & 72 Wharf RoadHong Kong

The property comprises aresidential unit on 8th floorof a 24-storey residentialbuilding with shops onground floor. The buildingwas completed in about1991.

The gross floor area of theproperty is approximately45.34 sq.m. (488 sq.ft.)

Inland Lot Nos. 6870, 6868and 6869 are held under aGovernment Lease for aterm of 75 years renewablefor 75 years commencingfrom 5 September 1921.

The government rentpayable is HK$2,880 perannum.

The property is leasedto the Group by anindependent third partyfor a term commencingfrom 15 September2009 to 14 September2011 at a monthlyrental of HK$8,200inclusive ofgovernment rent, ratesand management fees.

The property isoccupied by the Groupfor residential use.

No commercialvalue

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

Set out below is a summary of certain provisions of the Memorandum of Association and theArticles of Association of our Company and of certain aspects of Cayman company law.

Our Company was incorporated in the Cayman Islands as an exempted company with limitedliability on 12 March 2010 under the Companies Law. The Memorandum of Association and theArticles of Association comprise its constitution.

1. MEMORANDUM OF ASSOCIATION

(a) The Memorandum of Association states, inter alia, that the liability of members of our Companyis limited to the amount, if any, for the time being unpaid on the Shares respectively held by themand that the objects for which our Company is established are unrestricted (including acting as aninvestment company), and that our Company shall have and be capable of exercising all thefunctions of a natural person of full capacity irrespective of any question of corporate benefit, asprovided in section 27(2) of the Companies Law and in view of the fact that our Company is anexempted company that our Company will not trade in the Cayman Islands with any person, firmor corporation except in furtherance of the business of our Company carried on outside theCayman Islands.

(b) Our Company may by special resolution alter its Memorandum of Association with respect to anyobjects, powers or other matters specified therein.

2. ARTICLES OF ASSOCIATION

The Articles of Association were adopted on 23 June 2010. The following is a summary ofcertain provisions of the Articles of Association:

(a) Directors

(i) Power to allot and issue shares and warrants

Subject to the provisions of the Companies Law and the Memorandum of Association andArticles of Association and to any special rights conferred on the holders of any shares or classof shares, any share may be issued with or have attached thereto such rights, or suchrestrictions, whether with regard to dividend, voting, return of capital, or otherwise, as ourCompany may by ordinary resolution determine (or, in the absence of any such determinationor so far as the same may not make specific provision, as our board may determine). Subject tothe Companies Law, the rules of any Designated Stock Exchange (as defined in the Articles ofAssociation) and the Memorandum of Association and Articles of Association, any share maybe issued on terms that, at the option of our Company or the holder thereof, they are liable to beredeemed.

Our board may issue warrants conferring the right upon the holders thereof to subscribefor any class of shares or securities in the capital of our Company on such terms as it may fromtime to time determine.

Subject to the provisions of the Companies Law and the Articles of Association and,where applicable, the rules of any Designated Stock Exchange (as defined in the Articles ofAssociation) and without prejudice to any special rights or restrictions for the time beingattached to any shares or any class of shares, all unissued shares in our Company shall be at the

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

disposal of our board, which may offer, allot, grant options over or otherwise dispose of themto such persons, at such times, for such consideration and on such terms and conditions as it inits absolute discretion thinks fit, but so that no shares shall be issued at a discount.

Neither our Company nor our board shall be obliged, when making or granting anyallotment of, offer of, option over or disposal of shares, to make, or make available, any suchallotment, offer, option or shares to members or others with registered addresses in anyparticular territory or territories being a territory or territories where, in the absence of aregistration statement or other special formalities, this would or might, in the opinion of ourboard, be unlawful or impracticable. Members affected as a result of the foregoing sentenceshall not be, or be deemed to be, a separate class of members for any purpose whatsoever.

(ii) Power to dispose of the assets of our Company or any subsidiary

There are no specific provisions in the Articles of Association relating to the disposal ofthe assets of our Company or any of its subsidiaries. Our Directors may, however, exercise allpowers and do all acts and things which may be exercised or done or approved by ourCompany and which are not required by the Articles of Association or the Companies Law tobe exercised or done by our Company in general meeting.

(iii) Compensation or payments for loss of office

Pursuant to the Articles of Association, payments to any Director or past Director of anysum by way of compensation for loss of office or as consideration for or in connection with hisretirement from office (not being a payment to which the Director is contractually entitled)must be approved by our Company in general meeting.

(iv) Loans and provision of security for loans to Directors

There are provisions in the Articles of Association prohibiting the making of loans toDirectors.

(v) Disclosure of interests in contracts with our Company or any of its subsidiaries

A Director may hold any other office or place of profit with our Company (except that ofthe auditor of our Company) in conjunction with his office of Director for such period and,subject to the Articles of Association, upon such terms as our board may determine, and may bepaid such extra remuneration therefor (whether by way of salary, commission, participation inprofits or otherwise) in addition to any remuneration provided for by or pursuant to any otherArticles of Association. A Director may be or become a director or other officer of, orotherwise interested in, any company promoted by our Company or any other company inwhich our Company may be interested, and shall not be liable to account to our Company or themembers for any remuneration, profits or other benefits received by him as a director, officer ormember of, or from his interest in, such other company. Subject as otherwise provided by theArticles of Association, our board may also cause the voting power conferred by the shares inany other company held or owned by our Company to be exercised in such manner in allrespects as it thinks fit, including the exercise thereof in favour of any resolution appointing ourDirectors or any of them to be directors or officers of such other company, or voting orproviding for the payment of remuneration to the directors or officers of such other company.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

Subject to the Companies Law and the Articles of Association, no Director or proposed orintended Director shall be disqualified by his office from contracting with our Company, eitherwith regard to his tenure of any office or place of profit or as vendor, purchaser or in any othermanner whatsoever, nor shall any such contract or any other contract or arrangement in whichany Director is in any way interested be liable to be avoided, nor shall any Director socontracting or being so interested be liable to account to our Company or the members for anyremuneration, profit or other benefits realised by any such contract or arrangement by reason ofsuch Director holding that office or the fiduciary relationship thereby established. A Directorwho to his knowledge is in any way, whether directly or indirectly, interested in a contract orarrangement or proposed contract or arrangement with our Company shall declare the nature ofhis interest at the meeting of our board at which the question of entering into the contract orarrangement is first taken into consideration, if he knows his interest then exists, or in any othercase, at the first meeting of our board after he knows that he is or has become so interested.

A Director shall not vote (nor be counted in the quorum) on any resolution of our boardapproving any contract or arrangement or other proposal in which he or any of his associates ismaterially interested, but this prohibition shall not apply to any of the following matters,namely:

(aa) any contract or arrangement for giving to such Director or his associate(s) anysecurity or indemnity in respect of money lent by him or any of his associates orobligations incurred or undertaken by him or any of his associates at the request of orfor the benefit of our Company or any of its subsidiaries;

(bb) any contract or arrangement for the giving of any security or indemnity to a thirdparty in respect of a debt or obligation of our Company or any of its subsidiaries forwhich the Director or his associate(s) has himself/themselves assumed responsibilityin whole or in part whether alone or jointly under a guarantee or indemnity or by thegiving of security;

(cc) any contract or arrangement concerning an offer of shares or debentures or othersecurities of or by our Company or any other company which our Company maypromote or be interested in for subscription or purchase, where the Director or hisassociate(s) is/are or is/are to be interested as a participant in the underwriting orsub-underwriting of the offer;

(dd) any contract or arrangement in which the Director or his associate(s) is/are interestedin the same manner as other holders of shares or debentures or other securities of ourCompany by virtue only of his/their interest in shares or debentures or other securitiesof our Company;

(ee) any contract or arrangement concerning any other company in which the Director orhis associate(s) is/are interested only, whether directly or indirectly, as an officer orexecutive or a shareholder or in which the Director and any of his associates are notin aggregate beneficially interested in 5 percent. or more of the issued shares or of thevoting rights of any class of shares of such company (or of any third companythrough which his interest or that of any of his associates is derived); or

(ff) any proposal or arrangement concerning the adoption, modification or operation of ashare option scheme, a pension fund or retirement, death, or disability benefits

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

scheme or other arrangement which relates both to Directors, his associates andemployees of our Company or of any of its subsidiaries and does not provide inrespect of any Director, or his associate(s), as such any privilege or advantage notaccorded generally to the class of persons to which such scheme or fund relates.

(vi) Remuneration

The ordinary remuneration of our Directors shall from time to time be determined by ourCompany in general meeting, such sum (unless otherwise directed by the resolution by which itis voted) to be divided amongst our Directors in such proportions and in such manner as ourboard may agree or, failing agreement, equally, except that any Director holding office for partonly of the period in respect of which the remuneration is payable shall only rank in suchdivision in proportion to the time during such period for which he held office. Our Directorsshall also be entitled to be prepaid or repaid all travelling, hotel and incidental expensesreasonably expected to be incurred or incurred by them in attending any board meetings,committee meetings or general meetings or separate meetings of any class of shares or ofdebentures of our Company or otherwise in connection with the discharge of their duties asDirectors.

Any Director who, by request, goes or resides abroad for any purpose of our Company orwho performs services which in the opinion of our board go beyond the ordinary duties of aDirector may be paid such extra remuneration (whether by way of salary, commission,participation in profits or otherwise) as our board may determine and such extra remunerationshall be in addition to or in substitution for any ordinary remuneration as a Director. Anexecutive Director appointed to be a managing director, joint managing director, deputymanaging director or other executive officer shall receive such remuneration (whether by wayof salary, commission or participation in profits or otherwise or by all or any of those modes)and such other benefits (including pension and/or gratuity and/or other benefits on retirement)and allowances as our board may from time to time decide. Such remuneration may be either inaddition to or in lieu of his remuneration as a Director.

Our board may establish or concur or join with other companies (being subsidiarycompanies of our Company or companies with which it is associated in business) inestablishing and making contributions out of our Company’s monies to any schemes or fundsfor providing pensions, sickness or compassionate allowances, life assurance or other benefitsfor employees (which expression as used in this and the following paragraph shall include anyDirector or ex-Director who may hold or have held any executive office or any office of profitwith our Company or any of its subsidiaries) and ex-employees of our Company and theirdependents or any class or classes of such persons.

Our board may pay, enter into agreements to pay or make grants of revocable orirrevocable, and either subject or not subject to any terms or conditions, pensions or otherbenefits to employees and ex-employees and their dependents, or to any of such persons,including pensions or benefits additional to those, if any, to which such employees orex-employees or their dependents are or may become entitled under any such scheme or fund asis mentioned in the previous paragraph. Any such pension or benefit may, as our boardconsiders desirable, be granted to an employee either before and in anticipation of, or upon or atany time after, his actual retirement.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

(vii) Retirement, appointment and removal

At each annual general meeting, one third of our Directors for the time being (or if theirnumber is not a multiple of three, then the number nearest to but not less than one third) willretire from office by rotation provided that every Director shall be subject to retirement at anannual general meeting at least once every three years. Our Directors to retire in every year willbe those who have been longest in office since their last re-election or appointment but asbetween persons who became or were last re-elected Directors on the same day those to retirewill (unless they otherwise agree among themselves) be determined by lot. There are noprovisions relating to retirement of Directors upon reaching any age limit.

Our Directors shall have the power from time to time and at any time to appoint anyperson as a Director either to fill a casual vacancy on our board or as an addition to the existingboard. Any Director appointed to fill a casual vacancy shall hold office until the first generalmeeting of members after his appointment and be subject to re-election at such meeting and anyDirector appointed as an addition to the existing board shall hold office only until the nextfollowing annual general meeting of our Company and shall then be eligible for re-election.Neither a Director nor an alternate Director is required to hold any shares in our Company byway of qualification.

A Director may be removed by an ordinary resolution of our Company before theexpiration of his period of office (but without prejudice to any claim which such Director mayhave for damages for any breach of any contract between him and our Company) and may byordinary resolution appoint another in his place. Unless otherwise determined by our Companyin general meeting, the number of Directors shall not be less than two. There is no maximumnumber of Directors.

The office or director shall be vacated:

(aa) if he resigns his office by notice in writing delivered to our Company at the registeredoffice of our Company for the time being or tendered at a meeting of our board;

(bb) becomes of unsound mind or dies;

(cc) if, without special leave, he is absent from meetings of our board (unless an alternatedirector appointed by him attends) for six (6) consecutive months, and our boardresolves that his office is vacated;

(dd) if he becomes bankrupt or has a receiving order made against him or suspendspayment or compounds with his creditors;

(ee) if he is prohibited from being a director by law;

(ff) if he ceases to be a director by virtue of any provision of law or is removed fromoffice pursuant to the Articles of Association.

Our board may from time to time appoint one or more of its body to be managing director,joint managing director, or deputy managing director or to hold any other employment orexecutive office with our Company for such period and upon such terms as our board maydetermine and our board may revoke or terminate any of such appointments. Our board maydelegate any of its powers, authorities and discretions to committees consisting of such Directoror Directors and other persons as our board thinks fit, and it may from time to time revoke suchdelegation or revoke the appointment of and discharge any such committees either wholly or in

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

part, and either as to persons or purposes, but every committee so formed shall, in the exerciseof the powers, authorities and discretions so delegated, conform to any regulations that mayfrom time to time be imposed upon it by our board.

(viii) Borrowing powers

Our board may exercise all the powers of our Company to raise or borrow money, tomortgage or charge all or any part of the undertaking, property and assets (present and future)and uncalled capital of our Company and, subject to the Companies Law, to issue debentures,bonds and other securities of our Company, whether outright or as collateral security for anydebt, liability or obligation of our Company or of any third party.

Note: These provisions, in common with the Articles of Association in general, can bevaried with the sanction of a special resolution of our Company.

(ix) Proceedings of our board

Our board may meet for the despatch of business, adjourn and otherwise regulate theirmeetings as they think fit. Questions arising at any meeting shall be determined by a majorityof votes. In the case of an equality of votes, the chairman of the meeting shall have anadditional or casting vote.

(x) Register of Directors and Officers

The Companies Law and the Articles of Association provide that our Company is requiredto maintain at its registered office a register of directors and officers which is not available forinspection by the public. A copy of such register must be filed with the Registrar of Companiesin the Cayman Islands and any change must be notified to the Registrar within thirty (30) daysof any change in such directors or officers.

(b) Alterations to constitutional documents

The Articles of Association may be rescinded, altered or amended by our Company in generalmeeting by special resolution. The Articles of Association state that a special resolution shall berequired to alter the provisions of the Memorandum of Association, to amend the Articles ofAssociation or to change the name of our Company.

(c) Alteration of capital

Our Company may from time to time by ordinary resolution in accordance with the relevantprovisions of the Companies Law:

(i) increase its capital by such sum, to be divided into shares of such amounts as theresolution shall prescribe;

(ii) consolidate and divide all or any of its capital into shares of larger amount than its existingshares;

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

(iii) divide its shares into several classes and without prejudice to any special rights previouslyconferred on the holders of existing shares attach thereto respectively any preferential,deferred, qualified or special rights, privileges, conditions or restrictions as our Companyin general meeting or as our Directors may determine;

(iv) sub-divide its shares or any of them into shares of smaller amount than is fixed by theMemorandum of Association, subject nevertheless to the provisions of the CompaniesLaw, and so that the resolution whereby any share is sub-divided may determine that, asbetween the holders of the shares resulting from such sub-division, one or more of theshares may have any such preferred or other special rights, over, or may have suchdeferred rights or be subject to any such restrictions as compared with the others as ourCompany has power to attach to unissued or new shares; or

(v) cancel any shares which, at the date of passing of the resolution, have not been taken, oragreed to be taken, by any person, and diminish the amount of its capital by the amount ofthe shares so cancelled.

Our Company may subject to the provisions of the Companies Law reduce its share capital orany capital redemption reserve or other undistributable reserve in any way by special resolution.

(d) Variation of rights of existing shares or classes of shares

Subject to the Companies Law, all or any of the special rights attached to the shares or anyclass of shares may (unless otherwise provided for by the terms of issue of that class) be varied,modified or abrogated either with the consent in writing of the holders of not less than three-fourths innominal value of the issued shares of that class or with the sanction of a special resolution passed at aseparate general meeting of the holders of the shares of that class. To every such separate generalmeeting the provisions of the Articles of Association relating to general meetings will mutatis mutandisapply, but so that the necessary quorum (other than at an adjourned meeting) shall be two personsholding or representing by proxy not less than one-third in nominal value of the issued shares of thatclass and at any adjourned meeting two holders present in person or by proxy whatever the number ofshares held by them shall be a quorum. Every holder of shares of the class shall be entitled to one votefor every such share held by him.

The special rights conferred upon the holders of any shares or class of shares shall not, unlessotherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed tobe varied by the creation or issue of further shares ranking pari passu therewith.

(e) Special resolution-majority required

Pursuant to the Articles of Association, a special resolution of our Company must be passed bya majority of not less than three-fourths of the votes cast by such members as, being entitled so to do,vote in person or, in the case of such members as are corporations, by their duly authorisedrepresentatives or, where proxies are allowed, by proxy at a general meeting of which notice of not lessthan twenty-one (21) clear days and not less than ten (10) clear business days specifying the intentionto propose the resolution as a special resolution, has been duly given. Provided that if permitted by theDesignated Stock Exchange (as defined in the Articles of Association), except in the case of an annualgeneral meeting, if it is so agreed by a majority in number of the members having a right to attend andvote at such meeting, being a majority together holding not less than ninety-five per cent. (95%) in

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

nominal value of the shares giving that right and, in the case of an annual general meeting, if so agreedby all Members entitled to attend and vote thereat, a resolution may be proposed and passed as aspecial resolution at a meeting of which notice of less than twenty-one (21) clear days and less than ten(10) clear business days has been given.

A copy of any special resolution must be forwarded to the Registrar of Companies in theCayman Islands within fifteen (15) days of being passed.

An ordinary resolution is defined in the Articles of Association to mean a resolution passed bya simple majority of the votes of such members of our Company as, being entitled to do so, vote inperson or, in the case of corporations, by their duly authorised representatives or, where proxies areallowed, by proxy at a general meeting held in accordance with the Articles of Association.

(f) Voting rights

Subject to any special rights or restrictions as to voting for the time being attached to any sharesby or in accordance with the Articles of Association, at any general meeting on a poll every memberpresent in person or by proxy or, in the case of a member being a corporation, by its duly authorisedrepresentative shall have one vote for every fully paid share of which he is the holder but so that noamount paid up or credited as paid up on a share in advance of calls or installments is treated for theforegoing purposes as paid up on the share. A member entitled to more than one vote need not use allhis votes or cast all the votes he uses in the same way.

At any general meeting a resolution put to the vote of the meeting is to be decided by way of apoll.

If a recognised clearing house (or its nominee(s)) is a member of our Company it may authorisesuch person or persons as it thinks fit to act as its representative(s) at any meeting of our Company orat any meeting of any class of members of our Company provided that, if more than one person is soauthorised, the authorisation shall specify the number and class of shares in respect of which each suchperson is so authorised. A person authorised pursuant to this provision shall be deemed to have beenduly authorised without further evidence of the facts and be entitled to exercise the same powers onbehalf of the recognised clearing house (or its nominee(s)) as if such person was the registered holderof the shares of our Company held by that clearing house (or its nominee(s)).

Where our Company has any knowledge that any shareholder is, under the rules of theDesignated Stock Exchange (as defined in the Articles of Association), required to abstain from votingon any particular resolution of our Company or restricted to voting only for or only against anyparticular resolution of our Company, any votes cast by or on behalf of such shareholder incontravention of such requirement or restriction shall not be counted.

(g) Requirements for annual general meetings

An annual general meeting of our Company must be held in each year, other than the year ofadoption of the Articles of Association (within a period of not more than fifteen (15) months after theholding of the last preceding annual general meeting or a period of eighteen (18) months from the dateof adoption of the Articles of Association, unless a longer period would not infringe the rules of anyDesignated Stock Exchange (as defined in the Articles of Association)) at such time and place as maybe determined by our board.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

(h) Accounts and audit

Our board shall cause true accounts to be kept of the sums of money received and expended byour Company, and the matters in respect of which such receipt and expenditure take place, and of theproperty, assets, credits and liabilities of our Company and of all other matters required by theCompanies Law or necessary to give a true and fair view of our Company’s affairs and to explain itstransactions.

The accounting records shall be kept at the registered office or at such other place or places asour board decides and shall always be open to inspection by any Director. No member (other than aDirector) shall have any right to inspect any accounting record or book or document of our Companyexcept as conferred by law or authorised by our board or our Company in general meeting.

A copy of every balance sheet and profit and loss account (including every document requiredby law to be annexed thereto) which is to be laid before our Company at its general meeting, togetherwith a printed copy of our Directors’ report and a copy of the auditors’ report, shall not less thantwenty-one (21) days before the date of the meeting and at the same time as the notice of annualgeneral meeting be sent to every person entitled to receive notices of general meetings of our Companyunder the provisions the Articles of Association; however, subject to compliance with all applicablelaws, including the rules of the Designated Stock Exchange (as defined in the Articles of Association),our Company may send to such persons summarised financial statements derived from our Company’sannual accounts and our Directors’ report instead provided that any such person may by notice inwriting served on our Company, demand that our Company sends to him, in addition to summarisedfinancial statements, a complete printed copy of our Company’s annual financial statement and ourDirectors’ report thereon.

Auditors shall be appointed and the terms and tenure of such appointment and their duties at alltimes regulated in accordance with the provisions of the Articles of Association. The remuneration ofthe auditors shall be fixed by our Company in general meeting or in such manner as the members maydetermine.

The financial statements of our Company shall be audited by the auditor in accordance withgenerally accepted auditing standards. The auditor shall make a written report thereon in accordancewith generally accepted auditing standards and the report of the auditor shall be submitted to themembers in general meeting. The generally accepted auditing standards referred to herein may be thoseof a country or jurisdiction other than the Cayman Islands. If so, the financial statements and the reportof the auditor should disclose this fact and name such country or jurisdiction.

(i) Notices of meetings and business to be conducted thereat

An annual general meeting shall be called by notice of not less than twenty-one (21) clear daysand not less than twenty (20) clear business days and any extraordinary general meeting at which it isproposed to pass a special resolution shall (save as set out in sub-paragraph (e) above) be called bynotice of at least twenty-one (21) clear days and not less than ten (10) clear business days. All otherextraordinary general meetings shall be called by notice of at least fourteen (14) clear days and not lessthan ten (10) clear business days. The notice must specify the time and place of the meeting and, in thecase of special business, the general nature of that business. In addition notice of every general meetingshall be given to all members of our Company other than such as, under the provisions of the Articlesof Association or the terms of issue of the shares they hold, are not entitled to receive such noticesfrom our Company, and also to the auditors for the time being of our Company.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

Notwithstanding that a meeting of our Company is called by shorter notice than that mentionedabove if permitted by the rules of the Designated Stock Exchange, it shall be deemed to have been dulycalled if it is so agreed:

(aa) in the case of a meeting called as an annual general meeting, by all members of ourCompany entitled to attend and vote thereat; and

(bb) in the case of any other meeting, by a majority in number of the members having a rightto attend and vote at the meeting, being a majority together holding not less than ninety-five per cent (95%) in nominal value of the issued shares giving that right.

All business shall be deemed special that is transacted at an extraordinary general meeting andalso all business shall be deemed special that is transacted at an annual general meeting with theexception of the following, which shall be deemed ordinary business:

(aa) the declaration and sanctioning of dividends;

(bb) the consideration and adoption of the accounts and balance sheet and the reports of thedirectors and the auditors;

(cc) the election of directors in place of those retiring;

(dd) the appointment of auditors and other officers;

(ee) the fixing of the remuneration of the directors and of the auditors;

(ff) the granting of any mandate or authority to the directors to offer, allot, grant options overor otherwise dispose of the unissued shares of our Company representing not more thantwenty per cent (20%) in nominal value of its existing issued share capital; and

(gg) the granting of any mandate or authority to the directors to repurchase securities of ourCompany.

(j) Transfer of shares

All transfers of shares may be effected by an instrument of transfer in the usual or commonform or in a form prescribed by the Designated Stock Exchange (as defined in the Articles ofAssociation) or in such other form as our board may approve and which may be under hand or, if thetransferor or transferee is a clearing house or its nominee(s), by hand or by machine imprintedsignature or by such other manner of execution as our board may approve from time to time. Theinstrument of transfer shall be executed by or on behalf of the transferor and the transferee providedthat our board may dispense with the execution of the instrument of transfer by the transferee in anycase in which it thinks fit, in its discretion, to do so and the transferor shall be deemed to remain theholder of the share until the name of the transferee is entered in the register of members in respectthereof. Our board may also resolve either generally or in any particular case, upon request by eitherthe transferor or the transferee, to accept mechanically executed transfers.

Our board in so far as permitted by any applicable law may, in its absolute discretion, at anytime and from time to time transfer any share upon the principal register to any branch register or anyshare on any branch register to the principal register or any other branch register.

Unless our board otherwise agrees, no shares on the principal register shall be transferred toany branch register nor may shares on any branch register be transferred to the principal register or anyother branch register. All transfers and other documents of title shall be lodged for registration and

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

registered, in the case of shares on a branch register, at the relevant registration office and, in the caseof shares on the principal register, at the registered office in the Cayman Islands or such other place atwhich the principal register is kept in accordance with the Companies Law.

Our board may, in its absolute discretion, and without assigning any reason, refuse to register atransfer of any share (not being a fully paid up share) to a person of whom it does not approve or anyshare issued under any share incentive scheme for employees upon which a restriction on transferimposed thereby still subsists, and it may also refuse to register any transfer of any share to more thanfour joint holders or any transfer of any share (not being a fully paid up share) on which our Companyhas a lien.

Our board may decline to recognise any instrument of transfer unless a fee of such maximumsum as any Designated Stock Exchange (as defined in the Articles of Association) may determine to bepayable or such lesser sum as our Directors may from time to time require is paid to our Company inrespect thereof, the instrument of transfer, if applicable, is properly stamped, is in respect of only oneclass of share and is lodged at the relevant registration office or registered office or such other place atwhich the principal register is kept accompanied by the relevant share certificate(s) and such otherevidence as our board may reasonably require to show the right of the transferor to make the transfer(and if the instrument of transfer is executed by some other person on his behalf, the authority of thatperson so to do).

The registration of transfers may be suspended and the register closed on giving notice byadvertisement in a relevant newspaper and, where applicable, any other newspapers in accordance withthe requirements of any Designated Stock Exchange (as defined in the Articles of Association), at suchtimes and for such periods as our board may determine and either generally or in respect of any class ofshares. The register of members shall not be closed for periods exceeding in the whole thirty (30) daysin any year.

(k) Power for our Company to purchase its own shares

Our Company is empowered by the Companies Law and the Articles of Association topurchase its own Shares subject to certain restrictions and our board may only exercise this power onbehalf of our Company subject to any applicable requirements imposed from time to time by anyDesignated Stock Exchange (as defined in the Articles of Association).

(l) Power for any subsidiary of our Company to own shares in our Company and financialassistance to purchase shares of our Company

There are no provisions in the Articles of Association relating to ownership of shares in ourCompany by a subsidiary.

Subject to compliance with the rules and regulations of the Designated Stock Exchange (asdefined in the Articles of Association) and any other relevant regulatory authority, our Company maygive financial assistance for the purpose of or in connection with a purchase made or to be made byany person of any shares in our Company.

(m) Dividends and other methods of distribution

Subject to the Companies Law, our Company in general meeting may declare dividends in anycurrency to be paid to the members but no dividend shall be declared in excess of the amountrecommended by our board.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

The Articles of Association provide dividends may be declared and paid out of the profits ofour Company, realised or unrealised, or from any reserve set aside from profits which our Directorsdetermine is no longer needed. With the sanction of an ordinary resolution dividends may also bedeclared and paid out of share premium account or any other fund or account which can be authorisedfor this purpose in accordance with the Companies Law.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwiseprovide, (i) all dividends shall be declared and paid according to the amounts paid up on the shares inrespect whereof the dividend is paid but no amount paid up on a share in advance of calls shall for thispurpose be treated as paid up on the share and (ii) all dividends shall be apportioned and paid pro rataaccording to the amount paid up on the shares during any portion or portions of the period in respect ofwhich the dividend is paid. Our Directors may deduct from any dividend or other monies payable toany member or in respect of any shares all sums of money (if any) presently payable by him to ourCompany on account of calls or otherwise.

Whenever our board or our Company in general meeting has resolved that a dividend be paid ordeclared on the share capital of our Company, our board may further resolve either (a) that suchdividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up,provided that the shareholders entitled thereto will be entitled to elect to receive such dividend (or partthereof) in cash in lieu of such allotment, or (b) that shareholders entitled to such dividend will beentitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or suchpart of the dividend as our board may think fit. Our Company may also upon the recommendation ofour board by an ordinary resolution resolve in respect of any one particular dividend of our Companythat it may be satisfied wholly in the form of an allotment of shares credited as fully paid up withoutoffering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to the holder of shares may be paid bycheque or warrant sent through the post addressed to the holder at his registered address, or in the caseof joint holders, addressed to the holder whose name stands first in the register of our Company inrespect of the shares at his address as appearing in the register or addressed to such person and at suchaddresses as the holder or joint holders may in writing direct. Every such cheque or warrant shall,unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in thecase of joint holders, to the order of the holder whose name stands first on the register in respect ofsuch shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank onwhich it is drawn shall constitute a good discharge to our Company. Any one of two or more jointholders may give effectual receipts for any dividends or other moneys payable or property distributablein respect of the shares held by such joint holders.

Whenever our board or our Company in general meeting has resolved that a dividend be paid ordeclared our board may further resolve that such dividend be satisfied wholly or in part by thedistribution of specific assets of any kind.

All dividends or bonuses unclaimed for one year after having been declared may be invested orotherwise made use of by our board for the benefit of our Company until claimed and our Companyshall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six yearsafter having been declared may be forfeited by our board and shall revert to our Company.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

No dividend or other monies payable by our Company on or in respect of any share shall bearinterest against our Company.

(n) Proxies

Any member of our Company entitled to attend and vote at a meeting of our Company isentitled to appoint another person as his proxy to attend and vote instead of him. A member who is theholder of two or more shares may appoint more than one proxy to represent him and vote on his behalfat a general meeting of our Company or at a class meeting. A proxy need not be a member of ourCompany and shall be entitled to exercise the same powers on behalf of a member who is an individualand for whom he acts as proxy as such member could exercise. In addition, a proxy shall be entitled toexercise the same powers on behalf of a member which is a corporation and for which he acts as proxyas such member could exercise if it were an individual member. Votes may be given either personally(or, in the case of a member being a corporation, by its duly authorised representative) or by proxy.

(o) Call on shares and forfeiture of shares

Subject to the Articles of Association and to the terms of allotment, our board may from time totime make such calls upon the members in respect of any monies unpaid on the shares held by themrespectively (whether on account of the nominal value of the shares or by way of premium). A callmay be made payable either in one lump sum or by installments. If the sum payable in respect of anycall or instalment is not paid on or before the day appointed for payment thereof, the person or personsfrom whom the sum is due shall pay interest on the same at such rate not exceeding twenty per cent.(20%) per annum as our board may agree to accept from the day appointed for the payment thereof tothe time of actual payment, but our board may waive payment of such interest wholly or in part. Ourboard may, if it thinks fit, receive from any member willing to advance the same, either in money ormoney’s worth, all or any part of the monies uncalled and unpaid or installments payable upon anyshares held by him, and upon all or any of the monies so advanced our Company may pay interest atsuch rate (if any) as our board may decide.

If a member fails to pay any call on the day appointed for payment thereof, our board mayserve not less than fourteen (14) clear days’ notice on him requiring payment of so much of the call asis unpaid, together with any interest which may have accrued and which may still accrue up to the dateof actual payment and stating that, in the event of non-payment at or before the time appointed, theshares in respect of which the call was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of which thenotice has been given may at any time thereafter, before the payment required by the notice has beenmade, be forfeited by a resolution of our board to that effect. Such forfeiture will include all dividendsand bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member in respect of theforfeited shares but shall, notwithstanding, remain liable to pay to our Company all monies which, atthe date of forfeiture, were payable by him to our Company in respect of the shares, together with (ifour board shall in its discretion so require) interest thereon from the date of forfeiture until the date ofactual payment at such rate not exceeding twenty per cent. (20%) per annum as our board determines.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

(p) Inspection of register of members

Pursuant to the Articles of Association the register and branch register of members shall beopen to inspection for at least two (2) hours on every business day by members without charge, or byany other person upon a maximum payment of HK$2.50 or such lesser sum specified by our board, atthe registered office or such other place at which the register is kept in accordance with the CompaniesLaw or, upon a maximum payment of HK$1.00 or such lesser sum specified by our board, at theRegistration Office (as defined in the Articles of Association), unless the register is closed inaccordance with the Articles of Association.

(q) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when themeeting proceeds to business, but the absence of a quorum shall not preclude the appointment of achairman.

Save as otherwise provided by the Articles of Association the quorum for a general meetingshall be two members present in person (or, in the case of a member being a corporation, by its dulyauthorised representative) or by proxy and entitled to vote. In respect of a separate class meeting (otherthan an adjourned meeting) convened to sanction the modification of class rights the necessary quorumshall be two persons holding or representing by proxy not less than one-third in nominal value of theissued shares of that class.

A corporation being a member shall be deemed for the purpose of the Articles of Association tobe present in person if represented by its duly authorised representative being the person appointed byresolution of the directors or other governing body of such corporation to act as its representative at therelevant general meeting of our Company or at any relevant general meeting of any class of membersof our Company.

(r) Rights of the minorities in relation to fraud or oppression

There are no provisions in the Articles of Association relating to rights of minority shareholdersin relation to fraud or oppression. However, certain remedies are available to shareholders of ourCompany under Cayman law, as summarised in paragraph 3(f) of this Appendix.

(s) Procedures on liquidation

A resolution that our Company be wound up by the court or be wound up voluntarily shall be aspecial resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available surplusassets on liquidation for the time being attached to any class or classes of shares (i) if our Companyshall be wound up and the assets available for distribution amongst the members of our Company shallbe more than sufficient to repay the whole of the capital paid up at the commencement of the windingup, the excess shall be distributed pari passu amongst such members in proportion to the amount paidup on the shares held by them respectively and (ii) if our Company shall be wound up and the assetsavailable for distribution amongst the members as such shall be insufficient to repay the whole of thepaid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borneby the members in proportion to the capital paid up, or which ought to have been paid up, at thecommencement of the winding up on the shares held by them respectively.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

If our Company shall be wound up (whether the liquidation is voluntary or by the court) theliquidator may, with the authority of a special resolution and any other sanction required by theCompanies Law divide among the members in specie or kind the whole or any part of the assets of ourCompany whether the assets shall consist of property of one kind or shall consist of properties ofdifferent kinds and the liquidator may, for such purpose, set such value as he deems fair upon any oneor more class or classes of property to be divided as aforesaid and may determine how such divisionshall be carried out as between the members or different classes of members. The liquidator may, withthe like authority, vest any part of the assets in trustees upon such trusts for the benefit of members asthe liquidator, with the like authority, shall think fit, but so that no contributory shall be compelled toaccept any shares or other property in respect of which there is a liability.

(t) Untraceable members

Pursuant to the Articles of Association, our Company may sell any of the shares of a memberwho is untraceable if (i) all cheques or warrants in respect of dividends of the shares in question (beingnot less than three in total number) for any sum payable in cash to the holder of such shares haveremained uncashed for a period of 12 years; (ii) upon the expiry of the 12 year period, our Companyhas not during that time received any indication of the existence of the member; and (iii) our Companyhas caused an advertisement to be published in accordance with the rules of the Designated StockExchange (as defined in the Articles of Association) giving notice of its intention to sell such sharesand a period of three (3) months, or such shorter period as may be permitted by the Designated StockExchange (as defined in the Articles of Association), has elapsed since the date of such advertisementand the Designated Stock Exchange (as defined in the Articles of Association) has been notified ofsuch intention. The net proceeds of any such sale shall belong to our Company and upon receipt by ourCompany of such net proceeds, it shall become indebted to the former member of our Company for anamount equal to such net proceeds.

(u) Subscription rights reserve

The Articles of Association provide that to the extent that it is not prohibited by and is incompliance with the Companies Law, if warrants to subscribe for shares have been issued by ourCompany and our Company does any act or engages in any transaction which would result in thesubscription price of such warrants being reduced below the par value of a share, a subscription rightsreserve shall be established and applied in paying up the difference between the subscription price andthe par value of a share on any exercise of the warrants.

3. CAYMAN ISLANDS COMPANY LAW

Our Company is incorporated in the Cayman Islands subject to the Companies Law and,therefore, operates subject to Cayman law. Set out below is a summary of certain provisions ofCayman company law, although this does not purport to contain all applicable qualifications andexceptions or to be a complete review of all matters of Cayman company law and taxation, which maydiffer from equivalent provisions in jurisdictions with which interested parties may be more familiar:

(a) Operations

As an exempted company, our Company’s operations must be conducted mainly outside theCayman Islands. Our Company is required to file an annual return each year with the Registrar ofCompanies of the Cayman Islands and pay a fee which is based on the amount of its authorised sharecapital.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

(b) Share capital

The Companies Law provides that where a company issues shares at a premium, whether forcash or otherwise, a sum equal to the aggregate amount of the value of the premiums on those sharesshall be transferred to an account, to be called the “share premium account”. At the option of acompany, these provisions may not apply to premiums on shares of that company allotted pursuant toany arrangement in consideration of the acquisition or cancellation of shares in any other company andissued at a premium. The Companies Law provides that the share premium account may be applied bythe company subject to the provisions, if any, of its memorandum and articles of association in(a) paying distributions or dividends to members; (b) paying up unissued shares of the company to beissued to members as fully paid bonus shares; (c) the redemption and repurchase of shares (subject tothe provisions of section 37 of the Companies Law); (d) writing-off the preliminary expenses of thecompany; (e) writing-off the expenses of, or the commission paid or discount allowed on, any issue ofshares or debentures of the company; and (f) providing for the premium payable on redemption orpurchase of any shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unlessimmediately following the date on which the distribution or dividend is proposed to be paid, thecompany will be able to pay its debts as they fall due in the ordinary course business.

The Companies Law provides that, subject to confirmation by the Grand Court of the CaymanIslands (the “Court”), a company limited by shares or a company limited by guarantee and having ashare capital may, if so authorised by its articles of association, by special resolution reduce its sharecapital in any way.

The Articles of Association includes certain protections for holders of special classes of shares,requiring their consent to be obtained before their rights may be varied. The consent of the specifiedproportions of the holders of the issued shares of that class or the sanction of a resolution passed at aseparate meeting of the holders of those shares is required.

(c) Financial assistance to purchase shares of a company or its holding company

Subject to all applicable laws, the Company may give financial assistance to Directors andemployees of the Company, its subsidiaries, its holding company or any subsidiary of such holdingcompany in order that they may buy Shares in the Company or shares in any subsidiary or holdingcompany. Further, subject to all applicable laws, the Company may give financial assistance to atrustee for the acquisition of Shares in the Company or shares in any such subsidiary or holdingcompany to be held for the benefit of employees of the Company, its subsidiaries, any holdingcompany of the Company or any subsidiary of any such holding company (including salariedDirectors).

There is no statutory restriction in the Cayman Islands on the provision of financial assistanceby a company to another person for the purchase of, or subscription for, its own or its holdingcompany’s shares. Accordingly, a company may provide financial assistance if the directors of thecompany consider, in discharging their duties of care and acting in good faith, for a proper purpose andin the interests of the company, that such assistance can properly be given. Such assistance should beon an arm’s-length basis.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

(d) Purchase of shares and warrants by a company and its subsidiaries

Subject to the provisions of the Companies Law, a company limited by shares or a companylimited by guarantee and having a share capital may, if so authorised by its articles of association, issueshares which are to be redeemed or are liable to be redeemed at the option of the company or ashareholder. In addition, such a company may, if authorised to do so by its articles of association,purchase its own shares, including any redeemable shares. However, if the articles of association do notauthorise the manner or purchase, a company cannot purchase any of its own shares unless the manner ofpurchase has first been authorised by an ordinary resolution of the company. At no time may a companyredeem or purchase its shares unless they are fully paid. A company may not redeem or purchase any ofits shares if, as a result of the redemption or purchase, there would no longer be any member of thecompany holding shares. A payment out of capital by a company for the redemption or purchase of itsown shares is not lawful unless immediately following the date on which the payment is proposed to bemade, the company shall be able to pay its debts as they fall due in the ordinary course of business.

A company is not prohibited from purchasing and may purchase its own warrants subject to andin accordance with the terms and conditions of the relevant warrant instrument or certificate. There isno requirement under Cayman Islands law that a company’s memorandum or articles of associationcontain a specific provision enabling such purchases and the directors of a company may rely upon thegeneral power contained in its memorandum of association to buy and sell and deal in personalproperty of all kinds.

Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in certaincircumstances, may acquire such shares.

(e) Dividends and distributions

With the exception of section 34 of the Companies Law, there is no statutory provisionsrelating to the payment of dividends. Based upon English case law, which is regarded as persuasive inthe Cayman Islands, dividends may be paid only out of profits. In addition, section 34 of theCompanies Law permits, subject to a solvency test and the provisions, if any, of the company’smemorandum and articles of association, the payment of dividends and distributions out of the sharepremium account (see paragraph 2(m) above for further details).

(f) Protection of minorities

The Cayman Islands courts ordinarily would be expected to follow English case law precedentswhich permit a minority shareholder to commence a representative action against or derivative actionsin the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) anact which constitutes a fraud against the minority and the wrongdoers are themselves in control of thecompany, and (c) an irregularity in the passing of a resolution which requires a qualified (or special)majority.

In the case of a company (not being a bank) having a share capital divided into shares, theCourt may, on the application of members holding not less than one fifth of the shares of the companyin issue, appoint an inspector to examine into the affairs of the company and to report thereon in suchmanner as the Court shall direct.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

Any shareholder of a company may petition the Court which may make a winding up order ifthe Court is of the opinion that it is just and equitable that the company should be wound up or, as analternative to a winding up order, (a) an order regulating the conduct of the company’s affairs in thefuture, (b) an order requiring the company to refrain from doing or continuing an act complained of bythe shareholder petitioner or to do an act which the shareholder petitioner has complained it hasomitted to do, (c) an order authorising civil proceedings to be brought in the name and on behalf of thecompany by the shareholder petitioner on such terms as the Court may direct, or (d) an order providingfor the purchase of the shares of any shareholders of the company by other shareholders or by thecompany itself and, in the case of a purchase by the company itself, a reduction of the company’scapital accordingly.

Generally claims against a company by its shareholders must be based on the general laws ofcontract or tort applicable in the Cayman Islands or their individual rights as shareholders asestablished by the company’s memorandum and articles of association.

(g) Management

The Companies Law contains no specific restrictions on the power of directors to dispose ofassets of a company. However, as a matter of general law, every officer of a company, which includesa director, managing director and secretary, in exercising his powers and discharging his duties mustdo so honestly and in good faith with a view to the best interests of the company and exercise the care,diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(h) Accounting and auditing requirements

A company shall cause proper books of account to be kept with respect to (i) all sums of moneyreceived and expended by the company and the matters in respect of which the receipt and expendituretakes place; (ii) all sales and purchases of goods by the company; and (iii) the assets and liabilities ofthe company.

Proper books of account shall not be deemed to be kept if there are not kept such books as arenecessary to give a true and fair view of the state of the company’s affairs and to explain itstransactions.

(i) Exchange control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

(j) Taxation

Pursuant to section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, ourCompany has obtained an undertaking from the Governor-in-Cabinet:

(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied onprofits, income, gains or appreciation shall apply to our Company or its operations; and

(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not bepayable on or in respect of the shares, debentures or other obligations of our Company.

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

The undertaking for our Company is for a period of twenty years from 23 March, 2010.

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits,income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty.There are no other taxes likely to be material to our Company levied by the Government of theCayman Islands save certain stamp duties which may be applicable, from time to time, on certaininstruments executed in or brought within the jurisdiction of the Cayman Islands. The Cayman Islandsare not party to any double tax treaties.

(k) Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islandscompanies except those which hold interests in land in the Cayman Islands.

(l) Loans to directors

There is no express provision in the Companies Law prohibiting the making of loans by acompany to any of its directors.

(m) Inspection of corporate records

Members of our Company will have no general right under the Companies Law to inspect orobtain copies of the register of members or corporate records of our Company. They will, however,have such rights as may be set out in our Company’s Articles of Association.

An exempted company may, subject to the provisions of its articles of association, maintain itsprincipal register of members and any branch registers at such locations, whether within or without theCayman Islands, as the directors may, from time to time, think fit. There is no requirement under theCompanies Law for an exempted company to make any returns of members to the Registrar ofCompanies of the Cayman Islands. The names and addresses of the members are, accordingly, not amatter of public record and are not available for public inspection.

(n) Winding up

A company may be wound up compulsorily by order of the Court voluntarily; or, undersupervision of the Court. The Court has authority to order winding up in a number of specifiedcircumstances including where it is, in the opinion of the Court, just and equitable to do so.

A company may be wound up voluntarily when the members so resolve in general meeting byspecial resolution, or, in the case of a limited duration company, when the period fixed for the durationof the company by its memorandum or articles expires, or the event occurs on the occurrence of whichthe memorandum or articles provides that the company is to be dissolved, or, the company does notcommence business for a year from its incorporation (or suspends its business for a year), or, thecompany is unable to pay its debts. In the case of a voluntary winding up, such company is obliged tocease to carry on its business from the time of passing the resolution for voluntary winding up or uponthe expiry of the period or the occurrence of the event referred to above.

For the purpose of conducting the proceedings in winding up a company and assisting theCourt, there may be appointed one or more than one person to be called an official liquidator or official

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

liquidators; and the Court may appoint to such office such qualified person or persons, eitherprovisionally or otherwise, as it thinks fit, and if more persons than one are appointed to such office,the Court shall declare whether any act hereby required or authorised to be done by the officialliquidator is to be done by all or any one or more of such persons. The Court may also determinewhether any and what security is to be given by an official liquidator on his appointment; if no officialliquidator is appointed, or during any vacancy in such office, all the property of the company shall bein the custody of the Court. A person shall be qualified to accept an appointment as an officialliquidator if he is duly qualified in terms of the Insolvency Practitioners Regulations. A foreignpractitioner may be appointed to act jointly with a qualified insolvency practitioner.

In the case of a members’ voluntary winding up of a company, the company in general meetingmust appoint one or more liquidators for the purpose of winding up the affairs of the company anddistributing its assets. A declaration of solvency must be signed by all the directors of a company beingvoluntarily wound up within twenty-eight (28) days of the commencement of the liquidation, failingwhich, its liquidator must apply to Court for an order that the liquidation continue under thesupervision of the Court.

Upon the appointment of a liquidator, the responsibility for the company’s affairs rests entirelyin his hands and no future executive action may be carried out without his approval. A liquidator’sduties are to collect the assets of the company (including the amount (if any) due from thecontributories), settle the list of creditors and, subject to the rights of preferred and secured creditorsand to any subordination agreements or rights of set-off or netting of claims, discharge the company’sliability to them (pari passu if insufficient assets exist to discharge the liabilities in full) and to settlethe list of contributories (shareholders) and divide the surplus assets (if any) amongst them inaccordance with the rights attaching to the shares.

As soon as the affairs of the company are fully wound up, the liquidator must make up anaccount of the winding up, showing how the winding up has been conducted and the property of thecompany has been disposed of, and thereupon call a general meeting of the company for the purposesof laying before it the account and giving an explanation thereof. At least twenty-one (21) days beforethe final meeting, the liquidator shall send a notice specifying the time, place and object of the meetingto each contributory in any manner authorised by the company’s articles of association and publishedin the Gazette in the Cayman Islands.

(o) Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved bya majority in number representing seventy-five per cent. (75%) in value of shareholders or class ofshareholders or creditors, as the case may be, as are present at a meeting called for such purpose andthereafter sanctioned by the Court. Whilst a dissenting shareholder would have the right to express tothe Court his view that the transaction for which approval is sought would not provide the shareholderswith a fair value for their shares, the Court is unlikely to disapprove the transaction on that groundalone in the absence of evidence of fraud or bad faith on behalf of management.

(p) Compulsory acquisition

Where an offer is made by a company for the shares of another company and, within four(4) months of the offer, the holders of not less than ninety per cent. (90%) of the shares which are the

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APPENDIX IV SUMMARY OF THE CONSTITUTION OF OURCOMPANY AND CAYMAN ISLANDS COMPANY LAW

subject of the offer accept, the offeror may at any time within two (2) months after the expiration of thesaid four (4) months, by notice in the prescribed manner require the dissenting shareholders to transfertheir shares on the terms of the offer. A dissenting shareholder may apply to the Court within one(1) month of the notice objecting to the transfer. The burden is on the dissenting shareholder to showthat the Court should exercise its discretion, which it will be unlikely to do unless there is evidence offraud or bad faith or collusion as between the offeror and the holders of the shares who have acceptedthe offer as a means of unfairly forcing out minority shareholders.

(q) Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association mayprovide for indemnification of officers and directors, except to the extent any such provision may beheld by the court to be contrary to public policy (e.g. for purporting to provide indemnification againstthe consequences of committing a crime).

4. GENERAL

Conyers Dill & Pearman, our Company’s special legal counsel on Cayman Islands law, havesent to our Company a letter of advice summarising certain aspects of Cayman Islands company law.This letter, together with a copy of the Companies Law, is available for inspection as referred to underthe paragraph headed “Documents available for inspection” in Appendix VI to this prospectus. Anyperson wishing to have a detailed summary of Cayman Islands company law or advice on thedifferences between it and the laws of any jurisdiction with which he is more familiar is recommendedto seek independent legal advice.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

A. FURTHER INFORMATION ABOUT OUR COMPANY

1. Incorporation

Our Company was incorporated in the Cayman Islands under the Companies Law as anexempted company with limited liability on 12 March 2010. Our Company was registered in HongKong under Part XI of the Companies Ordinance as an overseas company on 21 April 2010. Mr. MakKwong Yiu has been appointed as the authorised representative of our Company for the acceptance ofservice of process and notices on behalf of our Company in Hong Kong. Our principal place ofbusiness in Hong Kong is located at 34th Floor, One Island East, 18 Westlands Road, Island East,Hong Kong.

Our Company was incorporated in the Cayman Islands and is subject to the Companies Lawand its constitution which comprises the Memorandum of Association and the Articles of Association.A summary of various parts of the constitution and relevant aspects of the Cayman Islands companylaw is set out in Appendix IV to this prospectus.

2. Changes in share capital of our Company

(a) As at the date of incorporation, the authorised share capital of our Company wasHK$100,000,000 divided into 1,000,000,000 shares of HK$0.10 each. On 12 March 2010,one Share was allotted and issued nil-paid to Codan Trust Company (Cayman) Limited asinitial subscriber and such one nil-paid Share held by Codan Trust Company (Cayman)Limited was transferred to CFG on the same date.

(b) On 21 June 2010, in consideration of the acquisition by our Company of the entire issuedshare capital of Convoy (BVI) Limited, a total of 299,999,999 new Shares were allottedand issued to CFG, all credited as fully paid, and the one nil-paid Share held by CFG wascredited as fully paid at par.

(c) Save as disclosed herein and under the paragraph headed “Written resolutions of the soleShareholder of our Company passed on 23 June 2010” below, there has been no alterationin the share capital of our Company since its incorporation.

3. Written resolutions of the sole Shareholder of our Company passed on 23 June 2010

On 23 June 2010, written resolutions of the sole Shareholder of our Company were passed,pursuant to which, inter alia:

(a) our Company approved and adopted the Articles of Association;

(b) conditional on the fulfillment of the same conditions as stated under the paragraph headed“Conditions of the Share Offer” in the section headed “Structure and conditions of theShare Offer”:

(i) the Share Offer was approved and our Directors were authorised to allot and issue thenew Shares pursuant thereto;

(ii) the rules of the Share Option Scheme, the principal terms of which are set out in thesection headed “Share Option Scheme” of this Appendix, were approved and adoptedand our Directors were authorised, among others, to grant options to subscribe forShares thereunder and to allot and issue Shares pursuant to the exercise ofsubscription rights under any options granted under the Share Option Scheme and todo all such acts and to enter into all such transactions, arrangements and agreementsas may be necessary or expedient in order to give full effect to the Share OptionScheme;

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APPENDIX V STATUTORY AND GENERAL INFORMATION

(iii) a general unconditional mandate was given to our Directors to exercise all the powers ofour Company to allot, issue and deal with (including the power to make or grant offers oragreements and options which would or might require Shares to be allotted and issued),otherwise than by way of Rights Issue (as defined below) or an issue of Shares upon theexercise of any subscription or conversion rights attached to any warrants of our Companyor the exercise of options which may be granted under the Share Option Scheme or anyother option scheme(s) or similar arrangement for the time being adopted for the grant orissue to directors and/or officers and/or employees of our Group or rights to acquire Sharesor pursuant to any scrip dividend schemes in accordance with the Articles of Associationor pursuant to the issue of Shares or pursuant to a specific authority granted by theShareholders in general meeting, the Shares with an aggregate nominal amount notexceeding 20% of the aggregate nominal amount of the share capital of our Company inissue immediately following completion of the Share Offer, such mandate to remain ineffect until whichever is the earliest of:

(a) the conclusion of the next annual general meeting of our Company;

(b) the expiration of the period within which the next annual general meeting of ourCompany is required by the Articles of Association or any applicable laws to be held;or

(c) the date on which such mandate is revoked or varied by an ordinary resolution of ourShareholders in general meeting of our Company.

For the purpose of this paragraph, “Rights Issue” means an offer of shares or issue ofoptions, warrants or other securities giving the right to subscribe for Shares open for aperiod fixed by our Directors to the holders of Shares (and, where appropriate, to holdersof other securities of our Company entitled to the offer) on the register on a fixed recorddate in proportion to their then holdings of such Shares (or, where appropriate such othersecurities) as at that date (subject to such exclusions or other arrangements as ourDirectors may deem necessary or expedient in relation to fractional entitlements or havingregard to any restrictions or obligations under the laws of, or the requirements of anyrecognised regulatory body or any stock exchange in, any territory applicable to ourCompany);

(iv) a general unconditional mandate was given to our Directors to exercise all powers of ourCompany to repurchase on the Stock Exchange, or on any other stock exchange on whichthe securities of our Company may be listed and which is recognized by the SFC and theStock Exchange for this purpose, such number of Shares with an aggregate nominal valuenot exceeding 10% of the aggregate nominal amount of the share capital of our Companyin issue immediately following completion of the Share Offer, such mandate to remain ineffect until whichever is the earliest of:

(a) the conclusion of the next annual general meeting of our Company;

(b) the expiration of the period within which the next annual general meeting of ourCompany is required by the Articles of Association or any applicable laws to be held;or

(c) the date on which such mandate is revoked or varied by an ordinary resolution of ourShareholders in general meeting of our Company.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

(v) the extension of the general mandate to allot, issue and deal with Shares as mentioned inparagraph (iii) above by the addition to the aggregate nominal value of the share capital ofour Company which may be allotted or agreed conditionally or unconditionally to beallotted by our Directors pursuant to such general mandate of an amount representing theaggregate nominal value of the share capital of our Company repurchased by ourCompany pursuant to paragraph (iv) above, provided that such extended amount shall notexceed 10% of the aggregate nominal amount of the share capital of our Company in issueimmediately following the Share Offer.

4. Corporate Reorganisation

The companies comprising our Group underwent a reorganisation in preparation for the listingof the Shares on the Stock Exchange. Following the Reorganisation, Convoy (BVI) Limited becamethe intermediate holding company of our Group and our Company became the ultimate holdingcompany of our Group. The Reorganisation involved the following:

(a) On 31 March 2010, one share of CFS, which was held in trust by Mr. Chan Chi Keung infavour of CFG, was transferred to CFG in accordance with the declaration of trust dated28 January 2003 and executed by Mr. Chan Chi Keung in favour of CFG. CFG thenbecame the sole shareholder of CFS.

(b) On 9 March 2010, Convoy (BVI) Limited was incorporated under the laws of the BVIwith limited liability. The authorised share capital of Convoy (BVI) Limited uponincorporation was HK$50,000 divided into 50,000 shares of HK$1.00 each. 1 share inConvoy (BVI) Limited was allotted and issued to CFG at par.

(c) On 12 March 2010, our Company was incorporated under the laws of the Cayman Islandsas an exempted company with an authorised share capital of HK$100,000,000 divided into1,000,000,000 shares of HK$0.10 each. One Share was allotted and issued nil-paid toCodan Trust Company (Cayman) Limited as initial subscriber. On the same date, such onenil-paid Share held by Codan Trust Company (Cayman) Limited was transferred to CFG.

(d) On 21 June 2010, Convoy (BVI) Limited acquired the entire issued share capital of CFSfrom CFG. The consideration for such acquisition was satisfied by the allotment and issueof 9,999 new shares in Convoy (BVI) Limited, credited as fully paid, to CFG.Accordingly, CFS was wholly-owned by Convoy (BVI) Limited, which in turn waswholly-owned by CFG.

(e) On 21 June 2010, in consideration of the acquisition by our Company of the entire issuedshare capital of Convoy (BVI) Limited, a total of 299,999,999 new Shares were allottedand issued to CFG, all credited as fully paid, and the one nil-paid Share held by CFG wascredited as fully paid at par.

5. Changes in share capital of subsidiaries

The subsidiaries of our Company are listed in the accountants’ report set out in Appendix I tothis prospectus. Save as disclosed herein and under the paragraph headed “Corporate Reorganisation”above, there has been no alteration in the share capital of any of the subsidiaries of our Companywithin the two years immediately preceding the date of this prospectus.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

6. Repurchase by our Company of its own securities

This section includes information required by the Stock Exchange to be included in thisprospectus concerning the repurchase by our Company of our own securities.

(a) Provisions of the Listing Rules

The Listing Rules permit companies with a primary listing on the Stock Exchange torepurchase their securities on the Stock Exchange subject to certain restrictions, the mostimportant of which are summarised below:

(i) Shareholders’ approval

All proposed repurchases of securities on the Stock Exchange by a company with aprimary listing on the Stock Exchange must be approved in advance by an ordinaryresolution of shareholders, either by way of general mandate or by specific approval of aparticular transaction.

Pursuant to the written resolutions passed by the sole shareholder of our Companypassed on 23 June 2010, a general unconditional mandate (the “Repurchase Mandate”) wasgranted to our Directors authorising the repurchase by our Company of Shares as describedabove in the section head “Written resolutions of the sole shareholder of our Companypassed on 23 June 2010”.

(ii) Source of funds

Repurchases must be funded out of funds legally available for the purpose inaccordance with the Memorandum of Association and the Articles of Association and thelaws of the Cayman Islands. A listed company may not repurchase its own securities on theStock Exchange for a consideration other than cash or for settlement otherwise than inaccordance with the trading rules of the Stock Exchange prevailing from time to time.

(b) Share Capital

On the basis of 400,000,000 Shares in issue immediately after the completion of the ShareOffer without taking into account any Shares which may be issued upon the exercise of theoptions that may be granted under the Share Option Scheme, our Company would be allowedunder the Repurchase Mandate to repurchase a maximum of 40,000,000 Shares (representing notmore than 10% of the aggregate nominal amount of the issued share capital of our Company as atthe date of granting the Repurchase Mandate).

(c) Reasons for repurchases

Our Directors believe that the Repurchase Mandate is in the best interest of our Companyand our Shareholders. Such repurchases may, depending on market conditions and fundingarrangements at the time, lead to an enhancement of the net asset value per Share and/or earningsper Share and will only be made when our Directors believe that such repurchases will benefit ourCompany and our Shareholders.

(d) Funding of repurchases

In repurchasing Shares, our Company may only apply funds legally available for suchpurpose in accordance with the Articles of Association, the Companies Law and any otherapplicable laws. Such funds legally available for repurchasing Shares include:

(i) such funds made out of profits of our Company or out of a fresh issue of Shares madefor the purpose of the repurchase or, subject to the Companies Law, out of capital; and

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APPENDIX V STATUTORY AND GENERAL INFORMATION

(ii) in the case of any premium payable on the repurchase, such funds made out of theprofits of our Company or from sums standing the credit of the share premium accountof our Company or, subject to the Companies Law, out of capital.

There might be a material adverse impact on the working capital or gearing position of ourCompany as compared with the position disclosed in this prospectus in the event that the power torepurchase Shares pursuant to the Repurchase Mandate was to be carried out in full at any timeduring the proposed repurchase period. However, our Directors do not propose to exercise theRepurchase Mandate to such extent as would, in the circumstances, have a material adverse effecton the working capital requirements of our Company or the gearing levels which in the opinion ofour Directors are from time to time appropriate for our Company.

(e) General

Our Directors have undertaken to the Stock Exchange that, so far as the same may beapplicable, they will exercise the powers of our Company to make repurchases pursuant to theRepurchase Mandate and in accordance with the Listing Rules and the applicable laws of CaymanIslands.

None of our Directors nor, to the best of their knowledge having made all reasonableenquiries, their associates, have any present intention to sell any Shares to our Company under theRepurchase Mandate if it is approved by the Shareholders.

No other connected persons (as defined in the Listing Rules) have notified our Company thatthey have a present intention to sell Shares to our Company or our subsidiaries, or haveundertaken not to do so, in the event that the Repurchase Mandate is approved by theShareholders.

If, as a result of a securities repurchase, a shareholder’s proportionate interest in the votingrights of our Company is increased, such increase will be treated as an acquisition for the purposeof the Takeovers Code. Accordingly, a shareholders or a group of shareholders acting in concertcould obtain or consolidate control of our Company and become obliged to make a mandatoryoffer in accordance with Rules 26 and 32 of the Takeovers Code. Save as aforesaid, our Directorsare not presently aware of any consequences which would arise under the Takeovers Code as aconsequence of any repurchases pursuant to the Repurchase Mandate immediately after theListing.

Our Directors will not exercise the Repurchase Mandate if the repurchase would result in thenumber of Shares held by the public being reduced to less than 25% of the total number of Sharesthen in issue (or such other percentage as may be prescribed as the minimum public shareholdingunder the Listing Rules).

B. FURTHER INFORMATION ABOUT OUR COMPANY’S BUSINESS

1. Summary of material contracts

The following contracts (not being contracts entered into in the ordinary course of business)have been entered into by members of our Group within the two years immediately preceding the dateof this prospectus and are or may be material in relation to the business of our Group taken as awhole:–

(a) the instrument of transfer together with the relevant bought and sold notes all dated21 June 2010 and executed by Convoy (BVI) Limited and CFG in relation to the

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APPENDIX V STATUTORY AND GENERAL INFORMATION

acquisition by Convoy (BVI) Limited of the entire issued share capital in CFS from CFGat a consideration being satisfied by the allotment and issue of 9,999 new shares inConvoy (BVI) Limited, credited as fully paid, to CFG;

(b) a deed of reorganisation dated 21 June 2010 made between, among others, CFG and ourCompany relating to the acquisition of the entire issued share capital of Convoy (BVI)Limited referred to in paragraph “Corporate Reorganisation” in this appendix;

(c) a deed of indemnity dated 22 June 2010 executed by the Controlling Shareholders, infavour of our Group containing indemnities referred to under the paragraph headed “Estateduty, tax and other indemnity” in the section headed “Other information” in this appendix;

(d) a deed of indemnity dated 22 June 2010 executed by CFG and CAM in favour of ourGroup containing indemnities referred to under the paragraph headed “Estate duty, tax andother indemnity” in the section headed “Other information” in this appendix;

(e) the Underwriting Agreement;

(f) the Cornerstone Investor Agreement, details of which are set out in the section headed“Cornerstone investor” in this prospectus;

(g) the deed of non-competition undertaking dated 22 June 2010 and executed by each of theControlling Shareholders in favour of our Company, the particulars of which are set outunder the paragraph headed “Non-competition undertaking” in the section headed“Relationship with the Controlling Shareholders and connected transactions” in thisprospectus;

(h) the Trademarks Agreement;

(i) a lump sum loan agreement dated 3 November 2008 entered into by CFS as lender andMelbourne International Holdings Co., Ltd., Ho Chi Keung, Danny and Wong Chi Hung,Johnny regarding a loan of HK$2,000,000 (which has been fully repaid to CFS as at theLatest Practicable Date); and

(j) the Call Option Deed.

2. Intellectual property

A. As at the Latest Practicable Date, our Group was granted a non-exclusive and non-transferablelicence, at nominal consideration, to use the Trademarks owned by CTL pursuant to theTrademarks Agreement, details of the Trademarks are as follows:

TrademarksPlace of

registration Class(es)Registration

dateTrademark

number

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hong Kong 35 and 36 18 August 2003 300064458

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hong Kong 35 and 36 18 August 2003 300064449

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hong Kong 35 and 36 18 August 2003 300064467. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hong Kong 35 and 36 18 August 2003 300064485

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hong Kong 35 and 36 23 November 2005 300534988

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APPENDIX V STATUTORY AND GENERAL INFORMATION

The following services in Hong Kong are covered by the respective classes of trade and servicemarks:

Class Specifications

35 . . . . . . . . . . . . . . . . . . . . . . consultancy and advisory services in respect of companies and business,provision of business information; provision of commercial information;provision of statistical business information; economic forecasting andanalysis; commercial analysis services; marketing research and marketingstudies.

36 . . . . . . . . . . . . . . . . . . . . . . financial planning services; investment advisory services; independentfinancial advisory services; corporate financing; corporate financingadvisory services; insurance advisory services; insurance brokerageservices; Mandatory Provident Fund intermediary advisory services;financial analysis services; provision of provident funds and retirementschemes services; payment services and fund transfer services; brokerageservices, investment services, investment advice and managementservices; provision of financial guarantees; news, information, research,and analysis in the fields of insurance, insurance products, insurancepolicies, provident funds, retirement schemes, investment, finance,financial planning, and economics relating to finance; research reportsand trading strategies in the fields of insurance, insurance products,insurance policies, provident funds, retirement schemes, securities,shares, stocks, bonds, mutual funds, money market funds, commodities,futures, options and indices of the aforesaid; capital, business andproperty investment agency services; financial lending; financial andfinancing services; debt financing; provision and financing of loans;money exchange services; management of funds, assets and trusts forothers; financial evaluations; fiscal assessment and evaluations;collection of financial data; provision of financial information; portfoliomanagement services and account information; securities and insuranceunderwriting; news, information, research and analysis in the fields ofinsurance, insurance products, insurance policies, provident funds,retirement schemes, investment, finance, financial planning, andeconomics relating to finance provided by means of electroniccommunication networks; investing of funds, financial services andprovision of financial services through electronic communicationnetworks; on line (computer) and automated telephone financialbrokerage and ordering services; electronic purchase payment andelectronic bill payment services; electronic accounts payable processingservices; electronic billing and electronic fund transfer; information andadvisory services of all of the aforesaid.

B. As at the Latest Practicable Date, the following domain name was owned by our Group:

Domain name Date of registration

www.convoy.com.hk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 April 1999

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APPENDIX V STATUTORY AND GENERAL INFORMATION

C. FURTHER INFORMATION ABOUT DIRECTORS, MANAGEMENT AND STAFF

1. Disclosure of interests

(a) Interests and/or short positions of our Directors and chief executives in the share capitalof our Company and its associated corporations following the Share Offer

So far as is known to our Directors, immediately following completion of the Share Offer(taking no account of any Shares which may be issued upon the exercise of the options thatmay be granted under the Share Option Scheme), the interests or short positions of ourDirectors in the shares, debentures or underlying shares of our Company or its associatedcorporations (within the meaning of Part XV of the SFO) which will have to be notified to ourCompany and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO(including interests and short positions which he/she is taken or deemed to have under suchprovisions of the SFO) or which will be required, pursuant to section 352 of the SFO, to beentered in the register referred to therein or which will be required, pursuant to the Model Codefor Securities Transactions by Directors of Listed Companies of the Listing Rules, to benotified to our Company and the Stock Exchange, once the Shares are listed are as follows:

(i) Directors’ interests in the shares of associated corporations:

Name ofassociated corporation Name of Director Capacity

Long/Shortposition

No. of sharesin ConvoyInc held

Approximatepercentage of

the issuedshare capital

in ConvoyInc

Convoy Inc . . . . . . . . . . . . Mr. Wong Lee Man Beneficial owner Long position 14,074 19.7%Ms. Fong Sut Sam Beneficial owner Long position 14,034 19.7%Mr. Mak Kwong Yiu Beneficial owner Long position 3,911 5.4%

(b) Interests and/or short positions of the substantial shareholders in the Shares which arediscloseable under Divisions 2 and 3 of Part XV of the SFO

So far as is known to the Directors, immediately following completion of the Share Offer(taking no account of any Shares which may be issued upon the exercise of the options thatmay be granted under the Share Option Scheme), the following, not being a Director or chiefexecutive of our Company, will have an interest or short position in the Shares or underlyingShares which would fall to be disclosed to our Company under the provisions of Divisions 2and 3 of Part XV of the SFO, or will be directly or indirectly interested in 10% or more of thenominal value of any class of share capital carrying rights to vote in all circumstances atgeneral meetings of any other member of the Group:

Name of shareholder Capacity Long/Short positionNumber ofShares held

Approximatepercentage

of the issuedshare capital

Convoy Inc(1) . . . . . . . Interests of a controlled corporation Long position 300,000,000 75%Perfect Team(1) . . . . . Interests of a controlled corporation Long position 300,000,000 75%CFG . . . . . . . . . . . . . . Beneficial Owner Long position 300,000,000 75%

Note:(1) The 300,000,000 Shares are held by CFG which is owned as to approximately 43.8% by Convoy Inc and 56.2% by Perfect Team

respectively. As a result of such relationship as described in this paragraph, Convoy Inc and Perfect Team are deemed to be interested in300,000,000 Shares held by CFG. CFG is beneficially interested in 300,000,000 Shares.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

(c) Negative statements regarding interests in securities

None of our Directors or chief executive will immediately following completion of theShare Offer have any disclosure interests (as referred to in (a) above), other than as disclosed at(a) above.

Taking no account of Shares which may be taken up under the Share Offer and Shareswhich may fall to be issued upon the exercise of options which may be granted under the ShareOption Scheme, none of our Directors are aware of any persons who will immediatelyfollowing completion of the Share Offer have a notifiable interest under the provisions underDivisions 2 and 3 of Part XV of the SFO or who (not being a member of our Group) willimmediately following the completion of the Share Offer be, directly or indirectly, interested in10% or more of the nominal value of any class of share capital in any member of our Groupcarrying rights to vote in all circumstances at general meetings of such member of our Group,other than as disclosed in (b) above.

2. Particulars of Directors’ service contracts

Each of the Directors has entered into a service contract with our Company for a term of threeyears commencing from the Listing Date and to continue thereafter until terminated by a three months’notice in writing served by either party on the other without payment of compensation.

Each of the Directors is entitled to the following respective amount of annual emolument foracting as the director of, committee member of and/or holding other positions with our Company orother members of the Group:

HK$Wong Lee Man . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,186,911Fong Sut Sam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,299,111Mak Kwong Yiu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,049,801Fu Kwong Wing Ting, Francine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000Ma Yiu Ho, Peter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000Wu Ka Chee, Davy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000

Each of the executive Directors shall also be entitled to a bonus for each financial year of ourCompany which is at the discretion of the Board and determined by reference to performance of eachDirector concerned and our Group’s performance for the financial year concerned and based on therecommendation from the remuneration committee of our Company.

Save as aforesaid, none of our Directors has or is proposed to have a service contract with ourCompany or any of its subsidiaries (other than contracts expiring or determinable by the employerwithin one year without payment of compensation (other than statutory compensation)).

Each of the above emoluments is in accordance with the remuneration policy of our Group thatit is our Group’s remuneration objective to, in consultation with the remuneration committee of ourCompany, remunerate directors of our Group fairly but not excessively for their efforts, time andcontributions made to our Group and the remuneration of directors of our Group would be determinedwith reference to various factors such as duties and level of responsibilities of each director, theavailable information in respect of companies of comparable business or scale, the performance ofeach director and our Group’s performance for the financial year concerned and the prevailing marketconditions.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

3. Remuneration of Directors

(a) Our Company’s policies concerning remuneration of executive Directors are determined withreference to various factors such as the relevant Director’s duties, experience, responsibility,workload and the time devoted to our Group, the available information in respect of companies ofcomparable business or scale, the performance of each director and our Group’s performance forthe financial year concerned and the prevailing market conditions. Non-cash benefits may beprovided to our Directors under their remuneration package and the executive Directors may begranted, at the discretion of the Board, options pursuant to our Company’s Share Option Scheme,as part of their remuneration package.

(b) The aggregate amount of fees, salaries, housing allowances, other allowances and benefits in kindpaid to our Directors by our Group during the three years ended 31 December 2007, 2008 and2009 were approximately HK$5.2 million, HK$3.8 million and HK$1.2 million respectively.Further information in respect of our Directors’ remuneration is set out in Appendix I to thisprospectus.

(c) Under the arrangement currently in force, the aggregate amount of emoluments payable by ourGroup to our Directors for the year ending 31 December 2010 will be approximatelyHK$3,915,823.

4. Personal guarantees

There are no banking facilities granted by any lenders to our Group and hence our Directorshave not provided any personal guarantees in favour of any lenders in connection therewith.

5. Related party transactions

During the two years immediately preceding the date of this prospectus, our Group hadengaged in related party transactions as described under the paragraph headed “Connectedtransactions” in the section headed “Relationship with the Controlling Shareholders and connectedtransactions” in this prospectus and note 28 to the accountants’ report, the text of which is set out inAppendix I to this prospectus.

6. Disclaimers

Save as disclosed in this prospectus:

(a) taking no account of Shares which may be taken up under the Share Offer and any optionsto be granted under the Share Option Scheme, our Directors are not aware of any personwho will, immediately following completion of the Share Offer, have an interest or shortposition in Shares or underlying shares of our Company which would fall to be disclosedto our Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or beinterested, directly or indirectly, in 10% or more of the nominal value of any class of sharecapital carrying rights to vote in all circumstances at general meetings of any othermember of our Group;

(b) none of our Directors or chief executive of our Company has any interests or shortpositions in the Shares, underlying Shares and debentures of our Company or any of ourassociated corporations (within the meaning of Part XV of the SFO) which are required tobe notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part

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APPENDIX V STATUTORY AND GENERAL INFORMATION

XV of the SFO (including interests or short positions which he is taken or deemed to haveunder such provisions of the SFO) or which will be required pursuant to section 352 of theSFO, to be entered in the register referred to therein or which will be required, pursuant tothe relevant rules of the Listing Rules relating to securities transactions by Directors to benotified to our Company and the Stock Exchange once the Shares are listed;

(c) save as disclosed under the paragraph headed “Corporate Reorganisation” in the sectionheaded “Further information about our Company” in this Appendix and the accountants’report set out in Appendix I to this prospectus, none of our Directors or the experts namedunder the paragraph headed “Qualification of experts” in the section headed “Otherinformation” in this Appendix has been interested in the promotion of, or has any direct orindirect interest in any assets acquired or disposed of by or leased to, any member of ourGroup within the two years immediately preceding the date of this prospectus, or whichare proposed to be acquired or disposed of by or leased to any member of our Group norwill any Director apply for Offer Shares either in his own name or in the name of anominee;

(d) Save as disclosed under the paragraph headed “Particulars of Directors’ service contracts”in the section headed “Further information about directors, management and staff” in thisAppendix, none of our Directors is materially interested in any contract or arrangementsubsisting at the date of this prospectus which is significant in relation to the business ofour Group taken as a whole;

(e) none of the experts named under the paragraph headed “Qualification of experts” in thesection headed “Other information” in this Appendix has any shareholding in anycompany in our Group or the right (whether legally enforceable or not) to subscribe for orto nominate persons to subscribe for securities in any company in our Group;

(f) none of our Directors nor any of the experts named under the paragraph headed“Qualification of experts” in the section headed “Other information” in this Appendix hasany direct or indirect interest in the promotion of our Company, or in any assets whichhave been, within the two years immediately preceding the date of this prospectus,acquired or disposed of by or leased to, any member of our Group, or are proposed to beacquired or disposed of by or leased to any member of our Group; and

(g) none of our Directors or their associates (as defined in the Listing Rules) or the existingShareholders (who, to the knowledge of our Directors, owns more than 5% of ourCompany’s issued share capital) has any interest in any of the five largest Product Issuersof our Group.

D. SHARE OPTION SCHEME

1. Summary of terms

(a) Who may join

The Board may at its absolute discretion, offer to grant option to any Employee, BusinessAssociate and the trustee of any trust (whether family, discretionary or otherwise) whosebeneficiaries or objects include any Employee or Business Associate of our Group (the“Participant(s)” or the “Grantee(s)”, as the case may be).

For the purpose of this section, Employee means (i) any full-time employee and director(including executive director, non-executive director and independent non-executive director or

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APPENDIX V STATUTORY AND GENERAL INFORMATION

proposed executive director, non-executive director and independent non-executive director) ofany member of our Group; and (ii) any part-time employee with weekly working hours of 10hours or above of our Group; and Business Associate means (a) any adviser, consultant oragent (in the areas of legal, technical, financial or corporate managerial) to our Group; (b) anyprovider of goods and/or services to our Group; or (c) any other person who, at the solediscretion of the Board, has contributed or may contribute to our Group (the assessmentcriterion of which are (i) such person’s contribution to the development and performance of ourGroup; (ii) the quality of work performed by such person for our Group; (iii) the initiative andcommitment of such person in performing his or her duties; and (iv) the length of service orcontribution of such person to our Group).

(b) Purpose of the Share Option Scheme

The purpose of the Share Option Scheme is to encourage the Participants to perform theirbest in achieving the goals of our Group and at the same time allow the Participants to enjoy theresults of our Company attained through their efforts and contributions and to provide theParticipants with incentives and help our Company in retaining its existing Employees andrecruiting additional Employees.

(c) Price for Shares

The subscription price in respect of any particular option shall be such price as determinedby the Board in its absolute discretion at the time of the grant of the relevant option but in anycase the subscription price shall not be less than the higher of (i) the closing price of the Sharesas stated in the Stock Exchange’s daily quotations sheet on the date of grant, which must be aday on which the Stock Exchange is open for the business of dealing in securities (“TradingDay”); (ii) the average closing price of the Shares as stated in the Stock Exchange’s dailyquotations sheets for the 5 Trading Days immediately preceding the date of grant; or (iii) thenominal value of a Share.

(d) Maximum number of Shares

(i) The maximum number of Shares in respect of which options may be granted underthe Share Option Scheme and any other schemes must not, in aggregate exceed40,000,000 Shares, being 10% of the total number of Shares in issue of our Companyas at the date of adoption of the Share Option Scheme (“Scheme Mandate”) unlessshareholders’ approval has been obtained pursuant to paragraphs (ii) or (iii) below.For the purpose of calculating the Scheme Mandate, option lapsed in accordance withthe terms of the relevant share option scheme shall not be counted.

(ii) Our Company may seek approval of the Shareholders in general meeting to refreshthe Scheme Mandate. However, the Scheme Mandate so refreshed must not exceed10% of total number of Shares in issue at the date of approval of the refreshing of theScheme Mandate; and

(iii) Our Company may seek separate Shareholders’ approval in general meeting to grantoptions beyond the Scheme Mandate provided that (i) the total number of Sharessubject to the Share Option Scheme and any other schemes of our Group does not inaggregate exceed 30% of the total number of Shares in issue and (ii) the options inexcess of the Scheme Mandate are granted only to Participants specifically identified

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before such approval is sought. A circular will be sent by our Company toShareholders in accordance with the Listing Rules as and when appropriate.

(e) Option Shares Entitled by Each Grantee

No Participant shall be granted an option if the total number of Shares issued and to beissued upon exercise of the options granted and to be granted (including both exercised andoutstanding options) in 12 month period up to and including the date of grant to suchParticipant would exceed 1 per cent. of the Shares for the time being in issue unless theproposed grant has been approved by the Shareholders in general meeting with the proposedGrantee and his associates (as defined in the Listing Rules) abstaining from voting. A circularmust be sent to the Shareholders disclosing the identity of the proposed Grantee, the numberand terms of the options granted and to be granted. The number and terms of options to begranted to such proposed Grantee must be fixed before the Shareholders’ approval and the dateof meeting of the Board for proposing such further grant should be taken as the date for thepurpose of calculating the subscription price.

(f) Restrictions on grant of options

(i) No option shall be granted after a price sensitive development or event has occurredor a price sensitive matter has been the subject matter of a decision, until such pricesensitive information has been announced pursuant to the relevant requirements ofthe Listing Rules. In particular, during the period commencing one monthimmediately preceding the earlier of (i) the date of the Board meeting (as such date isfirst notified to the Stock Exchange in accordance with the Listing Rules) for theapproval of our Company’s results for any year, half-year, quarterly or any otherinterim period (whether or not required under the Listing Rules; and (ii) the deadlinefor our Company to publish its announcement of its results for any year, half-year,quarterly or any other interim period (whether or not required under the ListingRules), and ending on the date of the results announcement; no option shall begranted until information has been announced pursuant to the relevant requirementsof the Listing Rules.

(ii) Any grant of option to a connected person of our Company (as defined in the ListingRules) must be approved by the independent non-executive Directors.

(iii) Where options are proposed to be granted to a substantial shareholder (as defined inthe Listing Rules) of our Company or an independent non-executive Director or anyof their respective associates (as defined in the Listing Rules), and the proposed grantof options, when aggregated will result in shares issued and to be issued uponexercise of all options already granted and to be granted (including options exercised,cancelled and outstanding) to such person in the 12-month period up to and includingthe date of grant, representing in aggregate over 0.1% of the Shares in issue; andhaving an aggregate value, based on the closing price of the Shares at the proposeddate of grant of the option, in excess of HK$5 million, the proposed grant must besubject to the approval of our Shareholders on a poll in general meeting. Theconnected person (as defined in the Listing Rules) involved and all other connectedpersons (as defined in the Listing Rules) of our Company must abstain from voting insuch general meeting (except where any connected person (as defined in the Listing

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Rules) intends to vote against the proposed grant of options). A Shareholder’scircular must be prepared by our Company explaining the proposed grant of options,disclosing the number and terms of the options to be granted and containing arecommendation from the independent non-executive Directors (excluding anyindependent non-executive Director who is the Grantee of the option) on whether ornot to vote in favour of the proposed grant of options.

(g) Time of exercise of option

An offer of the grant of an option shall be made to a Participant by letter in such form asthe Board may from time to time determine requiring the Participant to undertake to hold theoption on the terms on which it is to be granted and to be bound by the rules of the ShareOption Scheme. An offer of the grant of an option may be accepted by the Participantconcerned within the date as specified in the offer letter issued by our Company, being a datenot later than 21 days commencing from the date upon which the offer is made provided that nosuch offer shall be open for acceptance after the expiry of ten years after the date of adoption ofthe Share Option Scheme or after the Share Option Scheme has been terminated.

An option shall be deemed to have been granted and accepted when the duplicate lettercomprising acceptance of the option duly signed by the Grantee together with a remittance infavour of our Company of HK$1.00 by way of consideration for the grant thereof is received byour Company. An option may be exercised in accordance with the terms and conditions of theShare Option Scheme at any time during such period as the Board may in its absolute discretiondetermine, save that such period shall not be more than 10 years from the date of grant of theoption and the Board may provide restrictions on the exercise of an option during the period anoption may be exercised (the “Option Period”).

(h) Rights are personal to the Grantee

An option is personal to the Grantee and shall not be assignable and no Grantee shall sell,transfer, charge, mortgage, encumber or create any interest whatsoever in favour of any thirdparty over or in relation to any option.

(i) Rights on dismissal

If the Grantee ceases to be an Employee by reason of the termination of his/heremployment on any one or more of the grounds that he has been guilty of misconduct, or hascommitted an act of bankruptcy or has become insolvent or has made any arrangement orcomposition with his creditors generally, or has been convicted of any criminal offenceinvolving his integrity or honesty or (if so determined by the Board) on any other ground onwhich an employer would be entitled to terminate his employment at common law or pursuantto any applicable laws or under the Grantee’s service contract with the relevant member of theGroup before exercising his option in full, the option (to the extent not already exercised) willlapse on the date of cessation and will not be exercisable.

(j) Rights on death

In the case where the Grantee is an Employee or a Business Associate (in each case, beingan individual) dies before exercising the option in full and none of the events specified in

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APPENDIX V STATUTORY AND GENERAL INFORMATION

clauses 28.4 and 28.5 of the Share Option Scheme arises prior to his or her death, the legalpersonal representative(s) of the Grantee shall be entitled within a period of 12 months from thedate of death to exercise the option up to the entitlement of such Grantee as at the date of death(to the extent which has become exercisable and not already exercised), failing which theoption shall lapse.

In the case where the Grantee is a trustee and where the relevant beneficiary of the trust isan Employee or a Business Associate, and such Employee or Business Associate (in each case,being an individual) dies and none of the events specified in clauses 28.4 and 28.5 of the ShareOption Scheme arises prior to his or her death, the Grantee shall be entitled within a period of12 months from the date of death to exercise the option up to the entitlement of such Grantee asat the date of death (to the extent which has become exercisable and not already exercised),failing which the option shall lapse.

(k) Rights on ceasing employment

(i) In the event of the Grantee, being an Employee at the date of grant, ceasing to be anEmployee for any reason other than his death or the termination of his employmenton one or more of the grounds specified in the clause 28.4 of the Share OptionScheme, the Grantee may exercise the option up to his entitlement at the date ofcessation (to the extent which has become exercisable and not already exercised)within the period of one month following the date of such cessation, which date shallbe the last actual working day with the relevant member of our Group whether salaryis paid in lieu of notice or not or the last date of appointment as director of therelevant member of our Group (as the case may be) (provided that the retirement ofany director of our Group pursuant to the bye-laws or articles of association (as thecase may be) of the relevant member of our Group at an annual general meeting ofsuch member who is re- elected at the same annual general meeting shall not beregarded as ceasing employment for the purpose of this paragraph), failing which theoption shall lapse.

(ii) In the case where

(1) the Grantee is a Business Associate to our Group under a fixed term contract, ifthe Grantee ceases to be a Business Associate by reason of termination or expiryof the term of relevant fixed term contract without an extension or renewal byour Group for any reason other than (i) his or her death if the Business Associateis a natural person; or (ii) on one or more of the grounds specified in clause 28.5of the Share Option Scheme, the Grantee may exercise the option up to his orher or its entitlement at the date of cessation (to the extent which has becomeexercisable and not already exercised) within the period of one month followingthe date of such cessation, which date shall be the date of expiry of the relevantfixed term contract, failing which the option shall lapse.

(2) the Grantee is a Business Associate to our Group not under a fixed termcontract, if the Grantee ceases to be a Business Associate by reason of theGrantee ceasing to provide any further services or goods to our Group as may bedetermined by the Board and notified to such Business Associate in writing forany reason other than (i) his or her death if the Business Associate is a naturalperson; or (ii) on one or more of the grounds specified in clause 28.5 of the

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APPENDIX V STATUTORY AND GENERAL INFORMATION

Share Option Scheme, the Grantee may exercise the option up to his or her or itsentitlement at the date of cessation (to the extent which has become exercisableand not already exercised) within the period of one month following the date ofsuch cessation, which date shall be the date of the aforesaid written notificationto such Business Associate, failing which the option shall lapse.

(iii) In the case where the Grantee is a trustee and where

(1) the relevant beneficiary of the trust is an Employee, and such Employee ceasesto be an Employee for any reason other than his death or the termination of hisemployment on one or more of the grounds specified in clause 28.4 of the ShareOption Scheme, the Grantee may exercise the option up to his or her or itsentitlement at the date of such cessation (to the extent which has becomeexercisable and not already exercised) within the period of one month followingthe date of such cessation, which date shall be the last actual working day withthe relevant Group Member whether salary is paid in lieu of notice or not or thelast date of appointment as director of the relevant member of the Group (as thecase may be) (provided that the retirement of any Director of our Grouppursuant to the bye-laws or articles of association (as the case may be) of therelevant member of the Group at an annual general meeting of such memberwho is re-elected at the same annual general meeting shall not be regarded asceasing employment for the purpose of this paragraph), failing which the optionshall lapse.

(2) the relevant beneficiary of the trust is a Business Associate to our Group, andsuch Business Associate ceases to be a Business Associate in the manner asreferred to in the clause 25.3 of the Share Option Scheme, the Grantee mayexercise the option in accordance with the clause 25.3 of the Share OptionScheme, failing which the option shall lapse.

(l) Rights on a general offer

If a general offer (whether by takeover offer or scheme of arrangement or otherwise in likemanner) is made to all the holders of Shares and such offer becomes or is declaredunconditional prior to the expiry of the option, the Grantee (or, as the case may be, his legalpersonal representatives) shall be entitled to exercise the option in full (to the extent not alreadyexercised) at any time within 14 days after the date on which the offer becomes or is declaredunconditional even though the Option Period has not come into effect during the occurrence ofthe general offer.

(m) Rights on winding up

In the event a notice is given by our Company to its members to convene a generalmeeting for the purposes of considering, and if thought fit, approving a resolution to voluntarilywind up our Company, our Company shall on the same date as or soon after it dispatches suchnotice to each member of our Company give notice thereof to all Grantee and thereupon, eachGrantee (to his or her legal personal representatives) shall be entitled to exercise all or any ofhis/her options (to the extent not already exercised) at any time not later than seven (7)Business Days prior to the proposed general meeting of our Company by giving notice inwriting to our Company, accompanied by a remittance for the full amount of the aggregate

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APPENDIX V STATUTORY AND GENERAL INFORMATION

subscription price for the Shares in respect of which the notice is given, whereupon ourCompany shall as soon as possible and, in any event, no later than the Business Dayimmediately prior to the date of the proposed general meeting referred to above, allot therelevant Shares to the Grantee credited as fully paid.

(n) Rights on compromise or arrangement

If an application is made to the court in connection with a proposed compromise orarrangement between our Company and its creditors (or any class of them) or between ourCompany and its members (or any class of them), the Grantee may by notice in writing to ourCompany within 21 days after the date of such application, exercise the option in full (to theextent which has become exercisable and not already exercised) or to the extent specified insuch notice.

(o) Ranking of Shares

(i) Shares allotted upon the exercise of an option will be subject to all the provisions ofthe Articles of Association for the time being in force and will rank pari passu in allrespects with the fully paid Shares in issue on the date of the allotment (the “ExerciseDate”) and accordingly will entitle the holders thereof to participate in all dividendsor other distributions paid or made on or after the date of allotment other than anydividend or other distribution previously declared or recommended or resolved to bepaid or made with respect to a record date which shall be before the date of allotment.

(ii) Unless the context otherwise requires, references to “Shares” in this section D meansshares of HK$0.10 each (or of such other nominal amount as shall result from a sub-division, consolidation, re-classification or re-construction of such shares from timeto time) of our Company.

(p) Period of the Share Option Scheme

The Share Option Scheme shall be valid and effective for a period of 10 yearscommencing from the date on which the Share Option Scheme becomes unconditional, afterwhich period no further options will be granted but the provision of the Share Option Schemeshall remain in full force and effect in all other aspects.

Our Company may by resolution in general meeting or the Board at any time terminate theoperation of the Share Option Scheme and in such event no further options will be offered butthe provisions of the Share Option Scheme in relation to any outstanding options shall remainin full force and effect in all other aspects and options granted prior to such termination shallcontinue to be valid and exercisable in accordance with the provisions of the Share OptionScheme.

(q) Effect of alterations to capital

In the event of any alterations in the capital structure of our Company (other than an issueof Shares as consideration in respect of a transaction to which our Company is a party) pursuantto a capitalisation issue, rights issue, sub-division or consolidation of Shares or reduction ofcapital or otherwise howsoever in accordance with the legal requirements and the requirementsof the Listing Rules and the Stock Exchange whilst any option remains exercisable, such

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corresponding adjustments (if any) shall be made in the number of Shares subject to the optionso far as unexercised and/or the subscription price provided that any adjustment shall be madeon the basis that the proportion of the issued share capital of our Company to which a Granteeis entitled after such adjustment shall remain the same as that to which he was entitled beforesuch adjustment and that no such adjustment shall be made the effect of which would be toenable any Share to be issued at less than its nominal value and in case of any adjustmentsother than any made on a capitalisation issue, a written confirmation from an independentfinancial adviser or the auditors of our Company is required to confirm that the adjustment(s)satisfy the relevant requirements under the Listing Rules.

(r) Cancellation of options granted

Any cancellation of options granted but not exercised must be approved by the Boardprovided that where our Company cancels any options granted but not exercised in accordancewith clause 35 of the Share Option Scheme and issues any new option to the same Participant,the issue of such new options can only be made with available unissued options (excluding thecancelled options) within the limit as referred in paragraph 1(d) above.

(s) An option shall lapse automatically (to the extent not already exercised) on the earliestof:-

(i) the expiry of the period the Option Period;

(ii) the expiry of any of the periods referred to in clauses 25.1, 25.2, 25.3, 25.4, 25.5,25.6 or 25.7 of the Share Option Scheme (that is paragraphs (k), (l) and (m)above);

(iii) subject to clause 25.7 of the Share Option Scheme, the date of the commencementof the winding-up of our Company;

(iv) in the case the Grantee is an Employee at the date of grant, the date on which theGrantee ceases to be an Employee by reason of the termination of his/heremployment on any one or more of the grounds that he has been guilty ofmisconduct, or has committed an act of bankruptcy or has become insolvent or hasmade any arrangement or composition with his creditors generally, or has beenconvicted of any criminal offence involving his integrity or honesty or (if sodetermined by the Board) on any other ground on which an employer would beentitled to terminate his employment at common law or pursuant to any applicablelaws or under the Grantee’s service contract with the relevant Group Member;

(v) in the case the Grantee is a Business Associate to our Group at the date of grant,the date on which the Grantee ceases to be a Business Associate to our Group byreason of breach of contract on the part of the Business Associate or on any one ormore of the grounds that he or she or it appears to be unable to pay or have noreasonable prospect to be able to pay debts, or has become insolvent, or has madeany arrangements or composition with his or her or its creditors generally, orceases or threaten to cease to carry on his/her/its business, or is wound up, or hasan administrator or liquidator being appointed for the whole or any part of his/her/its undertakings or assets, or has been convicted of any criminal offence involvingintegrity or honesty;

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APPENDIX V STATUTORY AND GENERAL INFORMATION

(vi) where the Grantee is a trustee and where the relevant beneficiary of the trust is anEmployee or a Business Associate, the date on which the Grantee ceases to be anEmployee or a Business Associate (as the case may be) by the reason(s) orground(s) specified in clause 28.4 or clause 28.5 of the Share Option Scheme (thatis paragraphs(s)(iv) and (v) above) (as the case may be);

(vii) subject to the proposed compromise or arrangement becoming effective, the expiryof the period referred to in the clause 25.8 of the Share Option Scheme (that is theparagraph (n) above); and

(viii) the date on which the option is cancelled by he Board as provided in clause 23 ofthe Share Option Scheme.

(t) Performance Target

Unless otherwise determined by the Board, there is no performance target that must beachieved before the options can be exercised and there is no minimum period for which anoption must be held before it can be exercised.

(u) Others

(i) Subject to the Listing Rules, the Share Option Scheme may be altered from time totime in any respect by a resolution of our Directors except that the followingalterations shall require the prior sanction of an ordinary resolution of theshareholders of our Company in general meeting:

(aa) matters set out in Rule 17.03 of the Listing Rules to the advantage of theParticipants;

(bb) any change to the authority of the Board in relation to any alteration to the termsof the Share Option Scheme;

(cc) the terms and conditions of the Share Option Scheme which are of a materialnature; or

(dd) any change to the terms of options granted (except where such alterations takeeffect automatically under the existing terms of the Share Option Scheme).

(ii) The amended terms of the Share Option Scheme or the options must comply with therelevant requirements of the Listing Rules.

2. Present status of the Share Option Scheme

(i) Approval and adoption of the rules of the Share Option Scheme

The rules of the Share Option Scheme were approved and adopted by the sole Shareholder ofour Company on 23 June 2010.

(ii) Approval of the Listing Committee required

The Share Option Scheme is conditional, among others, on the Listing Committee of the StockExchange granting approval of listing of and permission to deal in the Shares to be issued pursuant tothe exercise of any options which may be granted under the Share Option Scheme.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

(iii) Application for approval

Application has been made to the Listing Committee of the Stock Exchange for the approval oflisting of and permission to deal in the Shares to be issued pursuant to the exercise of any optionswhich may be granted under the Share Option Scheme. The total number of new Shares in respect ofwhich options may be granted under the Share Option Scheme and any other share option schemes ofour Company shall not exceed 40,000,000 Shares, representing 10% of the total number of Shares inissue as at the date of the Listing unless our Company obtains a fresh approval from our Shareholdersto renew the said 10% limit under the Share Option Scheme provided that options lapsed in accordancewith the terms of the Share Option Scheme or any other share option schemes of our Company will notbe counted for the purpose of calculating the 10% limit above mentioned.

(iv) Grant of option

As at the date of this prospectus, no option have been granted or agreed to be granted under theShare Option Scheme.

(v) Value of options

Our Directors consider that it is inappropriate to state the value of options that can be grantedunder the Share Option Scheme as if they had been granted on the Latest Practicable Date. Any suchvaluation will have to be made on the basis of certain option pricing model or other methodology,which depends on various assumptions including the exercise price, the exercise period, interest rate,expected volatility and other variables. As no option have been granted, certain variables are notavailable for calculating the value of options. Accordingly, any valuation of the options based onvarious speculative assumptions would not be meaningful but would be misleading to the Shareholdersand investors.

E. OTHER INFORMATION

1. Estate duty, tax and other indemnity

(a) Estate duty and tax indemnities

Each of Mr. Wong, Ms. Fong, Mr. Chan Chi Keung, Mr. Lee Kwok Yin Denthur, Mr. ChanTsz Kin Ernest, Mr. Mak, Mr. Ng Ka Wai Eric, Mr. Sin Kin Chung and Mr. Shin Kin Man(collectively the “Indemnifiers”) has entered into a deed of indemnity with and in favour of ourCompany (for ourselves and as trustee for each of our present subsidiaries) (being the material contract(c) referred to under the paragraph headed “Summary of material contracts” in the section headed“Further information about our Company’s business” in this Appendix) to provide indemnities on ajoint and several basis in respect of, among others, any liability for Hong Kong estate duty whichmight be incurred by any member of our Group and/or our associated companies by reason of anytransfer of property (within the meaning of section 35 of the Estate Duty Ordinance (Chapter 111 ofthe Laws of Hong Kong)) to any member of our Group on or before the date on which the Share Offerbecomes unconditional.

Under the deed of indemnity, the Indemnifiers have also given indemnities to our Group inrelation to taxation which might be payable by any member of our Group in respect of any income,profits or gains earned, accrued or received on or before the date on which the Share Offer becomesunconditional.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

Our Directors have been advised that no material liability for estate duty is likely to fall on ourCompany or any of our subsidiaries in the Cayman Islands and BVI.

The deed of indemnity does not cover any claim and the Indemnifiers shall be under no liabilityunder the deed of indemnity in respect of any taxation:

(i) to the extent that provision, reserve or allowance has been made for such liability, taxationor taxation claim in the audited accounts (the “Accounts”) of our Company and oursubsidiaries for the three years ended 31 December 2007, 2008 and 2009 and provision,reserve or allowance for which will be made in the audited accounts of our Company andour subsidiaries covering the period from 1 January 2010 to the Listing Date on a basisconsistent with that made in the Accounts; or

(ii) to the extent that such taxation or liability for such taxation falling on any members of ourGroup in respect of their accounting periods or any accounting period commencing on orafter 1 January 2010 and ending on the Listing Date, where such taxation or liabilitywould not have arisen but for some act or omission of, or transaction voluntarily effectedby, our Group or any of its members (whether alone or in conjunction with some other act,omission or transaction, whenever occurring) without the prior written consent oragreement of the Indemnifiers other than any such act, omission or transaction:

(a) carried out or effected in the ordinary course of business or in the ordinary course ofacquiring and disposing of capital assets on or before the Listing Date;

(b) carried out, made or entered into pursuant to a legally binding commitment created onor before the Listing Date or pursuant to any statement of intention made in thisprospectus; or

(c) consisting of any of the members of our Group ceasing, or being deemed to cease, tobe a member of any group of companies or being associated with any other companyfor the purposes of any matter of taxation;

(iii) to the extent that such taxation claim arises or is incurred as a result of the imposition oftaxation as a consequence of any retrospective change in the law or the interpretation orpractice thereof by the Inland Revenue Department of Hong Kong or any other relevantauthority coming into force after the date of the deed of indemnity or to the extent suchtaxation claim arises or is increased by an increase in rates of taxation after the date of thedeed of indemnity with retrospective effect;

(iv) to the extent of any provisions or reserve made for taxation in the Accounts which isfinally established to be an over-provision or an excessive reserve in which case theIndemnifiers’ liability (if any) in respect of such taxation shall be reduced by an amountnot exceeding such provision or reserve, provided that the amount of any such provision orreserve applied pursuant to this item (iv) to reduce the Indemnifiers’ liability in respect oftaxation shall not be available in respect of any such liability arising thereafter; or

(v) to any incomes, profits or gains earned, accrued or received by any member of our Groupor any event occurred after the Listing Date.

(b) Other indemnities

Under the said deed of indemnity, the Indemnifiers have also undertaken to indemnify, on ajoint and several basis, our Group against any costs, expenses, claims, liabilities, penalties, losses and

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APPENDIX V STATUTORY AND GENERAL INFORMATION

damages (including, but not limited to, any relocation or destruction cost) incurred or suffered by ourCompany or any member of our Group arising from or in connection with any failure of our Company,any members of our Group or any parties from whom our Company or any member of our Grouppurchased, leased or obtained licence or permit to use any property interests owned, leased, licensed orotherwise used or occupied by our Company or any member of our Group (the “Relevant Property”),to obtain any property ownership certificate, certificate of title, approval, permit, consent orregistration in respect of the Relevant Property.

(c) Indemnities given by CFG and CAM

CFG and CAM have entered into a deed of indemnity with and in favour of our Company (forourselves and as trustee for each of our present subsidiaries) (being the material contract (d) referred tounder the paragraph headed “Summary of material contracts” in the section headed “Furtherinformation about our Company’s business” in this Appendix) to provide indemnities on a joint andseveral basis that they will indemnify and at all times keep all and each of the members of our Groupfully indemnified on demand against all losses, costs (including all legal costs), expenses, penalties orother liabilities which any of the members of our Group may incur in connection with or sustain fromany complaints, claims or proceedings lodged by any persons in relation to the business undertaken orcarried on by CFG and/or CAM.

2. Litigation

Save as disclosed in this prospectus, neither our Company nor any of our subsidiaries isengaged in any litigation or arbitration of material importance and no litigation or claim of materialimportance is known to our Directors to be pending or threatened by or against our Company or any ofour subsidiaries.

3. Sponsor

The Sponsor has made an application on behalf of our Company to the Listing Committee ofthe Stock Exchange for listing of, and permission to deal in, the Shares in issue and to be issued asmentioned herein and the Shares which may be issued pursuant to the exercise of the options whichmay be granted under the Share Option Scheme.

4. Compliance adviser

In accordance with the requirements of the Listing Rules, our Company has entered into acompliance adviser’s agreement with Quam Capital to appoint Quam Capital as our complianceadviser to provide advisory services to us to ensure compliance with the Listing Rules for a periodcommencing on the Listing Date and up to and including the date on which our Company complieswith Rule 13.46 of the Listing Rules in respect of the despatch of our annual report for the first fullfinancial year commencing after the Listing Date, or until the agreement is terminated, whichever isearlier.

5. Preliminary expenses

The estimated preliminary expenses relating to the incorporation of our Company areapproximately HK$42,000 and are payable by our Company.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

6. Promoter

There are no promoters of our Company. Save as disclosed in this prospectus, within the twoyears preceding the date of this prospectus, no cash, securities or other benefit has been paid, allottedor given or proposed to be paid, allotted or given to any promoter in connection with the Share Offer orthe related transactions described in this prospectus.

7. Qualifications of experts

The following are the respective qualifications of the experts who have given their opinion oradvice which is contained in this prospectus:

Name Qualification

Quam Capital Licensed under the SFO to carry out type 6 (advising on corporatefinance) regulated activity under the SFO

Ernst & Young Certified Public AccountantsConyers Dill & Pearman Cayman Islands attorneys-at-lawGrant Sherman Appraisal Limited Property valuer

8. Consents of experts

Each of the Sponsor, Ernst & Young, Conyers Dill & Pearman and Grant Sherman AppraisalLimited has given and has not withdrawn its written consent to the issue of this prospectus with theinclusion of their letters, reports, valuation certificate and/or opinion and/or references to its name (asthe case may be) in the form and context in which they respectively appear.

9. Binding effect

This prospectus shall have the effect, if an application is made in pursuance hereof, ofrendering all persons concerned bound by all of the provisions (other than the penal provisions) ofsections 44A and 44B of the Companies Ordinance so far as applicable.

10. Bilingual prospectus

The English language and Chinese language versions of this prospectus are being publishedseparately, in reliance upon the exemption provided by Section 4 of the Companies Ordinance(Exemption of Companies and Prospectus from Compliance with Provisions) Notice (Chapter 32L ofthe Laws of Hong Kong).

11. Taxation of holders of Shares

(a) Dealings in Shares will be subject to Hong Kong stamp duty. Intending holders of Sharesare recommended to consult their professional advisers if they are in any doubt as to thetaxation implications of subscribing for, purchasing, holding or disposing of or dealing inShares. It is emphasised that none of our Company, our Directors or the other partiesinvolved in the Share Offer can accept responsibility for any tax effect on, or liabilities of,holders of Shares resulting from their subscription for, purchase, holding or disposal of ordealing in Shares.

(b) The Shares are Hong Kong property for the purposes of the Estate Duty Ordinance(Chapter 111 of the Laws of Hong Kong) and, accordingly, Hong Kong estate duty may bepayable in respect thereof on the death of an owner of Shares.

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APPENDIX V STATUTORY AND GENERAL INFORMATION

(c) The sale, purchase and transfer of Shares are subject to Hong Kong stamp duty the currentrate of which is HK$2.00 for every HK$1,000 (or part thereof) of the consideration or, ifhigher, the fair value of the Shares being sold or transferred.

(d) Under present Cayman Islands law, transfers and other dispositions of Shares are exemptfrom the Cayman Islands stamp duty unless our Company holds an interest in land in theCayman Islands.

12. Miscellaneous

(a) Save as disclosed in this prospectus:

(i) within two years preceding the date of this prospectus:

(aa) no share or loan capital of our Company or of any of our subsidiaries has beenissued, agreed to be issued or is proposed to be issued fully or partly paid eitherfor cash or for a consideration other than cash;

(bb) no commissions, discounts, brokerages or other special terms have been grantedin connection with the issue or sale of any share or loan capital of our Companyor any of its subsidiaries and no commission (excluding sub-underwriters’commission) has been paid or payable for subscribing or agreeing to subscribeor procuring or agreeing to procure subscriptions for any shares.

(ii) no share or loan capital of our Company or any of our subsidiaries is under option oris agreed conditionally or unconditionally to be put under option; and

(iii) there has been no material adverse change in the financial position or prospects of ourGroup since 31 December 2009 (being the date to which the latest audited combinedfinancial statements of our Group were made up).

(b) Our Company has no founder shares, management shares or deferred shares.

(c) The register of members of our Company will be maintained in the Cayman Islands byButterfield Fulcrum Group (Cayman) Limited and a branch register of members of ourCompany will be maintained in Hong Kong by Tricor Investor Services Limited. Unlessour Directors otherwise agree, all transfers and other documents of title of Shares must belodged for registration with and registered by, our Company’s share registrar in HongKong and may not be lodged in the Cayman Islands.

(d) All necessary arrangements have been made to enable the Shares to be admitted intoCCASS.

(e) There has not been any interruption in the business of our Group which has had a materialadverse effect on the financial position of our Group in the 24 months proceeding the dateof this prospectus.

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APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OFCOMPANIES IN HONG KONG AND AVAILABLE FOR INSPECTION

DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG

The documents attached to the copy of this prospectus delivered to the Registrar of Companiesin Hong Kong for registration were copies of the white and yellow Application Forms, the writtenconsents referred to under the paragraph headed “Qualifications of experts” in Appendix V to thisprospectus and copies of the material contracts referred to under the paragraph headed “Summary ofmaterial contracts” in Appendix V to this prospectus.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of Tsun &Partners at Suites 1002-3, Aon China Building, 29 Queen’s Road Central, Hong Kong during normalbusiness hours from 9:00 a.m. to 5:00 p.m. up to and including the date which is 14 days from the dateof this prospectus:

(i) the Memorandum of Association and the Articles of Association;

(ii) the accountants’ report prepared by Ernst & Young, the text of which is set out inAppendix I to this prospectus;

(iii) the audited financial statements of CFS for each of the three years ended 31 December2007, 2008 and 2009;

(iv) the letter received from Ernst & Young on unaudited pro forma financial information, thetext of which is set out in Appendix II to this prospectus;

(v) the letter, summary of values and valuation certificates relating to the property interest ofour Group prepared by Grant Sherman Appraisal Limited, the text of which is set out inAppendix III to this prospectus;

(vi) the letter of advice prepared by Conyers Dill & Pearman summarising certain aspects ofthe Cayman Islands company law referred to in Appendix IV to this prospectus;

(vii) the material contracts referred to under the paragraph headed “Summary of materialcontracts” in Appendix V to this prospectus;

(viii) the service contracts with our Directors referred to under the paragraph headed“Particulars of Directors’ service contracts” in Appendix V to this prospectus;

(ix) the written consents referred to under the paragraph headed “Qualifications of experts” inAppendix V to this prospectus;

(x) the Companies Law; and

(xi) the rules of the Share Option Scheme.

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