09:59 PICO FAR EAST<00752> - Announcement (7) In order to compile the largest possible pool of management agreement terms for comparison, the IFA has not restricted the research efforts to any particular geographic area. Whilst on first blush the pool of only 10 comparatives may seem small, it is, on reflection, not surprising that there has been public disclosure of the terms of only a limited number of such management arrangements. Contractual terms privately entered into are normally kept confidential between the parties (they may well be commercially sensitive) and in the normal course one would not expect details of the terms of such private commercial agreements to be publicly available. In fact, the IFA would expect that such agreements would typically contain confidentiality undertakings upon the parties. The IFA believes that the relatively small pool of 10 comparables identified is in no way an adverse reflection upon the amount of work carried out by the IFA in endeavouring to identify comparables, but rather is a reflection of the fact that public disclosure of the terms of exhibition hall management contracts should be expected to be the exception and not the norm. The IFA believes that it has used its best endeavours and has exercised due care in searching for and identifying the durations of other exhibition hall management contracts to use as comparisons when forming its opinion in respect of the Management Agreement. In formulating its opinion with regard to whether the term of the Management Agreement is in line with normal business practice, the IFA has had regard to the fact that all of the management arrangements in respect of exhibition halls identified as a result of its research are for periods longer than three years (with the caveat that one of the contracts identified is a 3 year extension (with a further 2 years option) of an earlier contract, the term of which earlier contract the IFA has been unable to ascertain; but the IFA has noted, however, that the manager appears to have been managing the relevant exhibition hall for a period of 5 years prior to the extension). The IFA has further noted that all the other management contracts identified are of significant duration and that one of the contracts is for a term of 40 years. The IFA has also had regard to the fact that the Group currently manages exhibition halls in Colombo and Ho Chi Minh City pursuant to management agreements with a life of 25 years and 12 years respectively. The IFA has reviewed the information available regarding the other commercial terms of the management contracts identified as a result of its research. The IFA has noted that some of these management contracts are on the basis of business models which are different from that underlying the Management Agreement and that others are on the basis of business models which share similarities with that underlying the Management Agreement. The IFA believes however (as does the Company), that all of the abovementioned agreements are valid comparatives for the purposes of assessing what is normal business practice in terms of the duration of management contracts in the hall management industry and support the view that the normal business practice is to have a management contract with a relatively long duration regardless of the particular business model underlying the contract. In particular, the IFA has noted, and had regard to the fact, that of the 10 management arrangements reviewed by it, the management contract pertaining to the HKCEC Extension shares many similarities with the Management Agreement. The major terms of the HKCEC Extension contract are summarised above under the heading "Duration of the Management Agreement". Moreover, save for the abovementioned 3 year extension (plus further 2 year option) of an existing contract, the IFA is unable to identify a single exhibition hall management contract which has a term of 3 years or less. The IFA believes that this is significant. If it were normal practice in the industry for exhibition hall management contracts to be for a term of 3 years or less, the IFA would expect that out of the pool of 10 examples found, at least one would have been for a term of 3 years or less. The proposed duration of the Management Agreement falls within the range of the durations of the pool of comparative exhibition hall management contracts identified and reviewed by the IFA. Having taken all of the above factors into account, the IFA believes that the duration of the Management Agreement (for a term expiring on 31 December 2015) is in line with normal business practice in the industry and is in the interests of the Company and its Shareholders as a whole. The IFA is firmly of the view that the work carried out by it and the information relied upon by it are sufficient for it to form its opinion that the duration of the Management Agreement is in line with normal business practice. DEFINITIONS