09:58     PICO FAR EAST<00752> - Announcement (6)                             

    Company wishing to enter into the Management Agreement and the business   
    model underlying the Management Agreement. The IFA has also had           
    in-depth discussions with Castores Magi to understand and assess the      
    basis of Castores Magi's opinion.                                         
                                                                              
    The IFA has had detailed discussions with the Company concerning the      
    commercial rationale for the proposed duration of the Management          
    Agreement. Chongqing Nanping was established on 20 January 2005 to        
    undertake the management of the Centre and the IFA notes that the         
    Centre, being newly established, has no customer base and has to start    
    from zero in building up its business and track record. The IFA has       
    also had regard to the fact that the manager of the Centre will need to   
    expend considerable resources in promoting the Centre and establishing    
    a customer base in the face of competition from other exhibition halls    
    in the region and, in particular, in the PRC. In addition, the manager    
    of the Centre will need to expend time and money in setting up from       
    scratch the operational structure for the management of the Centre. The   
    IFA concurs with the view taken by the Company that this front-end        
    commitment of resources in the early years of the term of the             
    management contract only makes good business sense if the Company is in   
    a position to reap the rewards of its efforts in subsequent years. In a   
    situation like this, the hard work of ploughing the ground and planting   
    the seeds is carried out in the early years and the harvest is reaped     
    in the latter years. The IFA believes that the nature of the Management   
    Agreement requires that it be of a longer duration than 3 years in        
    order for it to be commercially viable for the manager.                   
                                                                              
    The IFA noted that the Management Agreement is for a term up to 31        
    December 2015. With regard to the IFA's evaluation of whether the         
    duration of the Management Agreement is in line with normal business      
    practice, the IFA has, in conjunction with the Company, Castores Magi     
    and EYCFL, carried out an extensive search to try to ascertain the        
    length of other contracts in respect of exhibition hall management. The   
    IFA has expended spent considerable time and effort in this regard. In    
    carrying out this research, the following are utilized: (1) information   
    provided by the Company; (2) highly regarded search engines on the        
    Internet; and (3) the internal knowledge database of Ernst & Young (via   
    EYCFL). In total, the IFA has identified 10 contracts and tenders in      
    respect of exhibition hall management, where the duration of the term     
    of the management agreement was stated. Such contracts and tenders are    
    shown in the table below.                                                 
                                                                              
    Exhibition hall  Business  Duration of management arrangement             
                                                                              
    Asia                                                                      
                                                                              
    The Hong Kong Convention and Exhibition Centre  Hall management  40       
    years                                                                     
                                                                              
    International Exhibition Centre   Hall management  25 years               
      at Chek Lap Kok, Hong Kong                                              
                                                                              
    Sri Lanka Exhibition and Convention   Hall management  25 years           
      Centre in Colombo (managed by the Group)                                
                                                                              
    The Hong Kong Convention and   Hall management  20 years                  
      Exhibition Centre Extension                                             
                                                                              
    Binhai International Convention & Exhibition   Hall management  15 years  
      Centre in Tianjin, the PRC                                              
                                                                              
    Ho Chi Minh City International   Hall management  12 years                
      Exhibition and Convention Centre                                        
      in Vietnam (managed by the Group)                                       
                                                                              
    The Golden Jubilee Convention Hall in Thailand  Hall management  10       
    years                                                                     
                                                                              
    USA                                                                       
                                                                              
    North Charleston Coliseum, Convention and   Hall management  From 2002    
    to 2011  Performing Arts Center in North Charleston,                      
      South Carolina                                                          
                                                                              
    Kansas Expocentre in Topeka, Kansas  Hall management  A 5-year contract   
    with two       3-year options to extend                                   
                                                                              
    Greater Columbus Convention Center   Hall management  A 3-year            
    extension of an existing   in Columbus, Ohio      contract with a         
    further 2-year       extension option exercisable at                      
          the discretion of the hall owner - the                              
          manager has been managing                                           
          the hall since 1997.