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(Incorporated in Bermuda with limited liability)

(Stock Code: 494)

ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011

HIGHLIGHTS (US$ million) 2011 2010 (Restated) 15,912 725 4.56% 680 +25% Change

Turnover Core Operating Profit As % of Turnover Cash Earnings# Profit attributable to shareholders of the Company Earnings per Share - Basic Dividend per Share - Final - Full year

20,030 882 4.40% 850

+26% +22%

681 8.43 US cents

548 7.17 US cents*

+24% +18%

34 HK cents 53 HK cents

26 HK cents* 45 HK cents*

+31% +18%

Robust Turnover increase of 26% to US$20,030 million Growth impetus came from all three Business Networks of Trading, Logistics and Distribution Core Operating Profit increased by 22% to US$882 million Cash Earnings increased by 25% to US$850 million Profit Attributable to Shareholders up 24% to US$681 million Asia has become an important growth platform for the Group's businesses and sourcing activities
# Profit for the year before non-cash interest, depreciation of property, plant and equipment, amortization of intangible assets other than brand licenses, share option expenses and share of profit from associated companies * Adjusted for the effect of Share Subdivision in May 2011

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We are pleased to announce the audited consolidated profit and loss account and audited consolidated statement of comprehensive income of the Company and its subsidiaries (the Group) for the year ended 31 December 2011 and the audited consolidated balance sheet of the Group as at 31 December 2011 together with the comparative figures in 2010. The annual results have been reviewed by the Company's audit committee and the Companys auditor. CONSOLIDATED PROFIT AND LOSS ACCOUNT
Note 2011 US$000 2010 US$000 (Restated) Note 1(c) 15,912,201 (13,746,389) 2,165,812 72,477 2,238,289 (418,214) (1,001,527) (93,410) 725,138 (45,820) 679,318 13,567 (19,272) (79,171) (98,443) 1,850 596,292 (47,525) 548,767 548,491 276 548,767

Turnover Cost of sales Gross profit Other income Total margin Selling and distribution expenses Merchandising expenses Administrative expenses Core operating profit Gain on disposal of businesses/subsidiary Gain on disposal of properties/property holding subsidiary Other non-core operating expenses Operating profit Interest income Interest expenses Non-cash interest expenses Cash interest expenses

20,030,271 (17,043,929) 2,986,342 87,862 3,074,204 (834,099) (1,247,993) (110,056)

882,056 50,994 13,666 (66,779) 879,937 19,490 (21,538) (107,056) (128,594)

Share of profits less losses of associated companies Profit before taxation Taxation Profit for the year Attributable to: Shareholders of the Company Non-controlling interests 4

1,231 772,064 (90,660) 681,404 681,229 175 681,404

Earnings per share for profit attributable to shareholders of the Company during the year - basic - diluted Dividends

5 8.43 US cents 8.39 US cents 6 551,971 7.17 US cents 7.09 US cents 455,050

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2011 US$000 2010 US$000 (Restated) Note 1(c) 548,767

Profit for the year Other comprehensive income/(expense): Currency translation differences Net fair value gain on available-for sale financial assets, net of tax Net fair value gain/(loss) on cash flow hedges, net of tax Net actuarial loss from post employment benefits recognized in reserve Other comprehensive income/(expense) for the year, net of tax Total comprehensive income for the year Attributable to: Shareholders of the Company Non-controlling interests Total comprehensive income for the year

681,404

(28,024)

(15,218)

188 10,226

2,142 (1,536)

(3,549)

(21,159) 660,245

(14,612) 534,155

660,291 (46) 660,245

533,836 319 534,155

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CONSOLIDATED BALANCE SHEET

As at 31 December 2011 2010 US$000 US$000 (Restated) Note 1(c) 6,525,999 325,432 3,144 7,015 70,574 12,537 24,148 6,968,849 Current assets Inventories Due from related companies Trade and bills receivable Other receivables, prepayments and deposits Derivative financial instruments Cash and bank balances Current liabilities Due to related companies Trade and bills payable Accrued charges and sundry payables Balance of purchase consideration payable for acquisitions to be settled by cash Balance of purchase consideration payable for acquisitions to be settled by shares issued and held by escrow agent Taxation Derivative financial instruments Bank advances for discounted bills Short term bank loans Bank overdrafts 1,035,788 16,948 2,004,542 454,310 13,743 426,240 3,951,571 8 12,675 2,336,991 734,213 323,712 1,764 103,006 40,298 111,936 225 3,664,820 Net current assets Total assets less current liabilities 286,751 7,255,600 4,882,166 309,186 3,814 6,140 84,330 10,200 20,195 5,316,031 768,687 13,163 2,079,012 348,396 968,530 4,177,788 6,531 2,208,404 581,980 248,314 16,646 94,238 1,892 41,905 89,154 28,298 3,317,362 860,426 6,176,457 As at 1 January 2010 US$000 (Restated) Note 1(c) 2,333,657 160,988 311 3,622 92,331 8,633 7,459 2,607,001 305,466 12,655 1,610,433 290,321 336 538,752 2,757,963 1,539,117 389,732 145,983 41,500 66,791 38,734 6,066 2,227,923 530,040 3,137,041

Note

Non-current assets Intangible assets Property, plant and equipment Prepaid premium for land leases Associated companies Available-for-sale financial assets Deposits Deferred tax assets

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CONSOLIDATED BALANCE SHEET (Continued)

As at 31 December 2011 2010 US$000 US$000 (Restated) Note 1(c) Financed by: Share capital Reserves Proposed dividend 12,987 3,566,195 354,611 3,920,806 Shareholders funds attributable to the Companys shareholders Non-controlling interests Total equity Non-current liabilities Long term notes Balance of purchase consideration payable for acquisitions settled by cash Balance of purchase consideration payable for acquisitions to be settled by shares issued and held by escrow agent Other long term liabilities Post-employment benefit obligations Deferred tax liabilities 3,933,793 4,813 3,938,606 1,256,007 1,646,664 348,351 13,096 52,876 3,316,994 7,255,600 12,899 3,343,896 269,234 3,613,130 3,626,029 6,049 3,632,078 1,256,552 920,428 329,713 8,311 29,375 2,544,379 6,176,457

...
As at 1 January 2010 US$000 (Restated) Note 1(c)

12,103 2,027,042 237,732 2,264,774 2,276,877 (4,289) 2,272,588 496,452 292,778 17,994 44,843 3,303 9,083 864,453 3,137,041

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to shareholders of the Company Share capital US$000 Balance at 1 January 2011 Comprehensive income Profit or loss Other comprehensive income Currency translation differences Net fair value gain on available-for-sale financial assets, net of tax Net fair value gain on cash flow hedges, net of tax Net actuarial loss from post employment benefit recognized in reserve Total other comprehensive income Total comprehensive income Transactions with owners Employee share option scheme: - value of employee services - proceeds from shares issued - transfer to share premium Release of shares held by escrow agent for settlement of acquisition consideration Transfer to capital reserve 2010 final dividend paid 2011 interim dividend paid Total transactions with owners Balance at 31 December 2011 12,899 Share premium US$000 3,015,794 Other reserves US$000 (22,868) Retained Earnings US$000 620,204 Noncontrolling Total interests US$000 US$000 3,626,029 6,049 Total equity US$000 3,632,078

681,229

681,229

175

681,404

(27,803) 188 10,226 (3,549) (20,938) (20,938)

681,229

(27,803) 188 10,226 (3,549) (20,938) 660,291

(221) (221) (46)

(28,024) 188 10,226 (3,549) (21,159) 660,245

88 88 12,987

80,808 17,495 98,303 3,114,097

18,906 (17,495) 14,882 74 16,367 (27,439)

(74) (269,851) (197,360) (467,285) 834,148

18,906 80,896 14,882 (269,851) (197,360) (352,527) 3,933,793

(1,190) (1,190) 4,813

18,906 80,896 14,882 (269,851) (198,550) (353,717) 3,938,606

Attributable to shareholders of the Company Share capital US$000 Balance at 1 January 2010 Restated (Note 1(c)) Comprehensive income Profit or loss Other comprehensive income Currency translation differences Net fair value gain on available-for-sale financial assets, net of tax Net fair value loss on cash flow hedges, net of tax Total other comprehensive income Total comprehensive income Transactions with owners Employee share option scheme: - value of employee services - proceeds from shares issued - transfer to share premium Release of shares held by escrow agent for settlement of acquisition consideration Transfer to capital reserve 2009 final dividend paid 2010 interim dividend paid Issue of shares for privatization of IDS Acquisition of businesses/subsidiaries Total transactions with owners Balance at 31 December 2010 Restated (Note 1(c)) Share premium US$000 Other reserves US$000 Retained earnings US$000 Noncontrolling Total interests US$000 US$000 Total equity US$000

12,103

1,818,277

(50,335)

496,832

2,276,877

(4,289)

2,272,588

548,491

548,491

276

548,767

(15,261) 2,142 (1,536) (14,655) (14,655)

548,491

(15,261) 2,142 (1,536) (14,655) 533,836

43 43 319

(15,218) 2,142 (1,536) (14,612) 534,155

169 627 796 12,899

143,287 27,330 1,026,900 1,197,517 3,015,794

33,281 (27,330) 36,109 62 42,122 (22,868)

(62) (239,241) (185,816) (425,119) 620,204

33,281 143,456 36,109 (239,241) (185,816) 1,027,527 815,316 3,626,029

(559) 10,578 10,019 6,049

33,281 143,456 36,109 (239,800) (185,816) 1,027,527 10,578 825,335 3,632,078

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Notes: 1 Basis of preparation and accounting policies The consolidated accounts of Li & Fung Limited have been prepared in accordance with Hong Kong Financial Reporting Standards (HKFRSs). They have been prepared under the historical cost convention, as modified by the inclusion of available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. The preparation of accounts in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise their judgment in the process of applying the Groups accounting policies. Changes in accounting policy and disclosures (a) Revised and amended standards and interpretations adopted by the Group The following revised and amended standards and interpretations of HKFRSs are mandatory for accounting periods beginning on or after 1 January 2011 but they are not relevant to the Groups operations: HKAS 24 (revised) HKAS 32 (amendment) HKFRS 1 (amendment) Related party disclosures Classification of rights issues Limited exemption from comparative HKFRS 7 disclosures for first-time adopters HK(IFRIC) - Int 14 (amendment) Prepayments of a minimum funding requirement HK(IFRIC) - Int 19 Extinguishing financial liabilities with equity instruments Third annual improvements Improvements to HKFRS published in May project (2010) 2010 (b) Standards and amendments to existing standards that have been issued but are not yet effective and have not been early adopted by the Group The following new standards and amendments to existing standards have been issued and are mandatory for the Groups accounting periods beginning on or after 1 January 2012 or later periods, but the Group has not early adopted them: Presentation of financial statements3 Deferred tax: recovery of underlying assets2 Employee benefits4 Severe hyperinflation and removal of fixed dates of first-time adopters1 HKFRS 7 (amendment) Disclosures Transfers of financial assets1 HKFRS 9 Financial instruments4 HKFRS 10 and HKAS 27 (2011) Consolidated financial statements and Separate financial statements4 HKFRS 11 and HKAS 28 (2011) Joint arrangements and Associates and joint ventures4 HKFRS 12 Disclosure of interests in other entities4 HKFRS 13 Fair value measurements4 HK(IFRIC) Int 20 Stripping costs in the production phase of a surface mine4 Notes: 1 Effective for annual periods beginning on or after 1 July 2011 2 Effective for annual periods beginning on or after 1 January 2012 3 Effective for annual periods beginning on or after 1 July 2012 4 Effective for annual periods beginning on or after 1 January 2013 HKAS 1 (amendment) HKAS 12 (amendment) HKAS 19 (amendment) HKFRS 1 (amendment)
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Notes: 1 Basis of preparation and accounting policies (Continued) (b) Standards and amendments to existing standards that have been issued but are not yet effective and have not been early adopted by the Group (Continued) The Group is in the process of making an assessment of the impact of these standards and amendments to existing standards upon initial application. So far, it has concluded that these new standards and amendments to existing standards are unlikely to have a significant impact on the Groups results of operations and financial position. (c) Changes in functional and presentation currencies Items included in the accounts of each of the Groups entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). In prior years, the Company regarded Hong Kong dollar (HK dollar) as its functional currency. However, as a result of the Groups continuous acquisitions in recent years, the Company and most of its major operating subsidiaries business transactions in terms of operating, investing and financing activities have increasingly placed greater reliance on US dollar. As such, effective from 1 January 2011, the Company and certain of its subsidiaries have changed their functional currencies from HK dollar to US dollar. US dollar has also been adopted as the presentation currency of the Groups consolidated accounts. The change in functional currency of the Company was applied prospectively from date of change in accordance with HKAS 21 The Effect of Changes in Foreign Exchange Rate. On the date of the change of functional currency, all assets, liabilities, issued capital and other components of equity and profit and loss account items were translated into US dollar at the exchange rate on that date. The change in presentation currency of the Group has been applied retrospectively in accordance with HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, and the comparative figures as at 1 January 2010 and 31 December 2010 and for the year ended 31 December 2010 have also been restated to US dollar accordingly. The changes in functional and presentation currencies have no significant impact on the financial positions of the Group as at 1 January 2010, 31 December 2010 and 2011, or the results and cash flows of the Group for the years ended 31 December 2010 and 2011.

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Notes: 2 Segment information The Company is domiciled in Bermuda. The Company is a limited liability company incorporated in Bermuda. The address of its registered office is Canons Court, 22 Victoria Street, Hamilton HM 12, Bermuda and its Hong Kong office is at 11/F, LiFung Tower, 888 Cheung Sha Wan Road, Kowloon, Hong Kong. The Group is principally engaged in managing the supply chain for retailers and brands worldwide from over 300 offices and distribution centers in more than 40 economies. Turnover represents revenue generated from sales and services rendered at invoiced value to customers outside the Group less discounts and returns. During the year, the Group has accomplished a major restructuring of its operations which resulted in three new operating segments. The Groups management (Chief Operating decision-maker) considers the business principally from the perspective of three global Networks, namely Trading Network, Logistics Network and Distribution Network. Trading Network is the operating segment that focuses on the global sourcing business. Logistics Network is the operating segment that runs both the Groups international and domestic logistics services networks globally. Distribution Network is the operating segment that operates the onshore distribution businesses in the US, Pan-European and Asian regions. Prior period comparative segment information has been restated accordingly. The Groups management assesses the performance of the operating segments based on a measure of operating profit, referred to as core operating profit. This measurement basis includes profit of the operating segments before share of results of associated companies, interest income, interest expenses and tax, but excludes material gain or loss which is of capital nature or non-recurring nature such as gain or loss on disposal or impairment provision on property, plant and equipment, investments, goodwill or other assets, or acquisition-related costs. Other information provided to the Groups management is measured in a manner consistent with that in the accounts.

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Notes: 2. Segment information (Continued)

Trading Network US$000 Year ended 31 December 2011 Turnover Total margin Operating costs Core operating profit Gain on disposal of businesses/subsidiary Gain on disposal of properties/property holding subsidiary Other non-core operating expenses Operating profit Interest income Interest expenses Non-cash interest expenses Cash interest expenses Share of profits less losses of associated companies Profit before taxation Taxation Profit for the year (21,538) (107,056) (128,594) 1,231 772,064 (90,660) 681,404 15,880,099 1,410,282 (845,121) 565,161 446,431 175,517 (162,573) 12,944 6,305,419 1,488,405 (1,184,454) 303,951 (2,601,678) 20,030,271 3,074,204 (2,192,148) 882,056 50,994 13,666 (66,779) 879,937 19,490 Logistics Network US$000 Distribution Network US$000

Elimination US$000

Total US$000

Depreciation & amortization

41,158

10,499

174,885

226,542

31 December 2011 Non-current assets (other than available-for-sale financial assets and deferred tax assets)

2,012,456

525,483

4,336,188

6,874,127

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Notes: 2. Segment information (Continued)

Trading Network US$000 Year ended 31 December 2010 Restated Turnover Total margin Operating costs Core operating profit/(loss) Other non-core operating expenses Operating profit Interest income Interest expenses Non-cash interest expenses Cash interest expenses (19,272) (79,171) (98,443) Share of profits less losses of associated companies Profit before taxation Taxation Profit for the year 13,741,995 1,176,844 (744,285) 432,559 73,198 27,344 (32,661) (5,317) 3,911,803 1,034,101 (736,205) 297,896 (1,814,795) 15,912,201 2,238,289 (1,513,151) 725,138 (45,820) 679,318 13,567 Logistics Network US$000 Distribution Network US$000

Elimination US$000

Total US$000

1,850 596,292 (47,525) 548,767

Depreciation & amortization

33,567

2,065

123,322

158,954

31 December 2010 - Restated Non-current assets (other than available-for-sale financial assets and deferred tax assets) 1 January 2010 - Restated Non-current assets (other than available-for-sale financial assets and deferred tax assets)

1,249,084

493,467

3,468,955

5,211,506

927,213

1,579,998

2,507,211

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Notes: 2. Segment information (Continued) The geographical analysis of turnover and non-current assets (other than available-for-sale financial assets and deferred tax assets) is as follows:
Non-current assets (other than available-for-sale financial and deferred tax assets) As at As at 31 December 1 January 2011 2010 2010 US$000 US$000 US$000 (Restated) (Restated) 4,255,844 1,324,471 436,051 624,440 111,368 60,770 45,072 16,111 6,874,127 3,156,844 910,028 465,484 550,375 57,073 40,566 21,948 9,188 5,211,506 1,930,783 466,278 7,705 8,444 34,154 29,539 17,190 13,118 2,507,211

Turnover 2011 2010 US$000 US$000 (Restated) United States of America Europe China Rest of Asia Canada Australasia Central and Latin America South Africa and Middle East 11,982,146 4,281,735 1,130,676 1,223,679 674,179 378,200 256,998 102,658 20,030,271 10,347,772 3,855,722 280,892 261,532 530,025 361,937 187,266 87,055 15,912,201

Turnover to external parties consists of sales of softgoods, hardgoods and logistics income is as follows: 2011 US$000 2010 US$000 (Restated) 11,028,821 4,817,035 66,345 15,912,201

Softgoods Hardgoods Logistics

12,911,434 6,719,740 399,097 20,030,271

For the year ended 31 December 2011, approximately 13.3% (2010: 14.5%) of the Groups turnover is derived from a single external customer, of which, 11.8% (2010: 13.0%) and 1.5% (2010:1.5%) are attributable to the Trading Network and Distribution Network segments respectively.

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Notes: 3 Operating profit Operating profit is stated after charging the following: 2011 US$000 2010 US$000 (Restated)

Charging Cost of inventories sold Amortization of computer software and system development costs Amortization of brand licenses Amortization of prepaid premium for land leases Depreciation of property, plant and equipment Loss on disposal of property, plant and equipment Provision for impaired receivables Staff costs including directors emoluments Business acquisition-related costs* Amortization of other intangible assets * * 4 Included in other non-core operating expenses

17,043,929 6,205 97,394 180 70,885 2,222 15,552 1,227,029 14,901 51,878

13,746,389 5,348 78,755 37 47,151 4,640 17,297 793,234 18,157 27,663

Taxation Hong Kong profits tax has been provided for at the rate of 16.5% (2010: 16.5%) on the estimated assessable profit for the year. Taxation on overseas profits has been calculated on the estimated assessable profit for the year at the rates of taxation prevailing in the countries in which the Group operates. The amount of taxation charged/(credited) to the consolidated profit and loss account represents: 2011 US$000 2010 US$000 (Restated)

Current taxation - Hong Kong profits tax - Overseas taxation Underprovision in prior years Deferred taxation

11,689 55,889 4,196 18,886 90,660

12,678 38,371 2,464 (5,988) 47,525

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Notes: 5 Earnings per share The calculation of basic earnings per share is based on the Groups profit attributable to shareholders of US$681,229,000 (2010: US$548,491,000) and on the weighted average number of 8,079,799,000 (2010: 7,644,510,000) shares in issue during the year after taking into account the effect of the Share Subdivision in May 2011. Diluted earnings per share is calculated by adjusting the weighted average number of 8,079,799,000 (2010: 7,644,510,000) ordinary shares in issue by 35,476,000 (2010: 86,438,000), after taking into account the effect of the Share Subdivision in May 2011, to assume conversion or all dilutive potential ordinary shares granted under the Companys Option Scheme and release of all shares held by escrow agents for settlement of acquisition consideration. For the calculation of dilutive potential ordinary share granted under the Company, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Companys shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. 6 Dividends 2011 US$000 2010 US$000 (Restated)

Interim, paid, of US$0.024 (equivalent to HK$0.19) (2010: US$0.024 (equivalent to HK$0.19)) per ordinary share (Note) Final, proposed, of US$0.044 (equivalent to HK$0.34 (2010: US$0.033 (equivalent to HK$0.26)) per ordinary share (Note)

197,360

185,816

354,611 551,971

269,234 455,050

At a meeting held on 22 March 2012, the Directors proposed a final dividend of US$0.044 (equivalent to HK$0.34) per share. The proposed dividends are not reflected as a dividend payable in these accounts, but will be reflected as an appropriation of retained earnings for the year ending 31 December 2012. Note: Interim and final dividend per share of 2010 have been adjusted for the effect of Share Subdivision in May 2011.

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Notes: 7 Trade and bills receivable The ageing of trade and bills receivable based on invoice date is as follows: Current to 90 days US$000 Balance at 31 December 2011 Balance at 31 December 2010 - Restated Balance at 1 January 2010 - Restated 91 to 180 181 to 360 days days US$000 US$000 Over 360 days US$000 Total US$000

1,879,710

100,825

13,178

10,829

2,004,542

1,994,478

69,071

7,022

8,441

2,079,012

1,550,655

48,453

9,133

2,192

1,610,433

The fair values of the Groups trade and bills receivable were approximately the same as their carrying values as at 31 December 2011. A significant portion of the Groups business are on sight letter of credit, usance letter of credit up to a tenor of 120 days, documents against payment or customers letter of credit to suppliers. The balance of the business is on open account terms which is often covered by customers standby letters of credit, bank guarantees, credit insurance or under a backto-back payment arrangement with suppliers. There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of customers internationally dispersed. Certain subsidiaries of the Group transferred bills receivable balances amounting to US$40,298,000 (31 December 2010: US$41,905,000 and 1 January 2010: US$38,734,000) to banks in exchange for cash as at 31 December 2011. The transaction has been accounted for as collateralized bank advances. At 31 December 2011, trade receivables of US$8,820,000 (31 December 2010: US$14,752,000 and 1 January 2010: US$13,689,000) were pledged as security for the Groups bank overdrafts.

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Notes: 8 Trade and bills payable The ageing of trade and bills payable based on invoice date is as follows: Current to 90 days US$000 Balance at 31 December 2011 Balance at 31 December 2010 - Restated Balance at 1 January 2010 - Restated 91 to 180 days US$000 181 to 360 days US$000 Over 360 days US$000 Total US$000

2,254,085

56,542

7,474

18,890

2,336,991

2,107,054

77,836

7,476

16,038

2,208,404

1,505,764

14,012

5,753

13,588

1,539,117

The fair values of the Groups trade and bills payable were approximately the same as their carrying values as at 31 December 2011.

MANAGEMENT DISCUSSION & ANALYSIS RESULTS REVIEW The Group's turnover in 2011 increased by 26% to US$20,030 million (approximately HK$156 billion), reflecting continued market share gains by our business through organic growth and earlier acquisitions as well as the synergistic dynamics of the new structure of three Business Networks, notwithstanding global economic uncertainties. Asia has become an important growth platform for Li & Fungs businesses and sourcing activities, as brands and retailers around the world are increasingly focusing on the region. With the addition of the LF Asia platform in this fast-growing consumer market, Li & Fung completed its global Distribution Network in 2011, contributing to the expansion of its distribution business. LF Asia accounted for 26% of total Distribution Networks turnover in 2011. At the same time, sourcing volume from Asia reached US$14,713 million. Asia represented 92% of the Groups total sourcing activities, spanning 20 economies in the region, including China, Vietnam, Indonesia, India, Cambodia, Thailand and the Philippines, as the Group continues to expand its sourcing network. Core operating profit increased by 22% to US$882 million; core operating profit margin decreased from 4.6% to 4.4% Total margin increased by 37% to US$3,074 million, increasing as a percentage of turnover from 14.1% to 15.3% Profit attributable to shareholders reached US$681 million, representing an increase of 24% compared to 2010

Core operating profit increased due to positive contributions from all three Business Networks, namely Trading, Logistics and Distribution. Recent acquisitions and investment
- 16 -

in the new Three-Year Plan continued to contribute to high operating expenses for the year. Cash earnings increased by 25% to US$850 million. Cash earnings is defined as profit for the year before non-cash interest, depreciation of property, plant and equipment, amortization of intangible assets other than brand licenses, share option expenses and share profit from associated companies. Li & Fung has grown from one global business network to three, and the Group has started to see encouraging results from cross-selling amongst them, boosting confidence that cross-selling will be a key growth driver going forward. SEGMENTAL ANALYSIS Three Networks Segmentation The period under review marked the first year that we reported by the three Business Networks: Trading, Logistics and Distribution. The Trading Network represented 70% of total turnover, up 16% from the same period last year. This was attributed largely to continuous market share gains throughout the year despite an uncertain economic environment. The trading business delivered significant positive operating leverage as core operating profit grew 31% from last year. The Logistics Network accounted for 2% of total turnover. As the logistics business is a newly acquired business from the Integrated Distribution Services Group Limited (IDS) acquisition, there is no direct year-on-year comparison regarding growth of turnover and core operating profit. The Distribution Network represented 28% of total turnover, and it grew 61% compared to the same period last year. The growth was mainly due to contributions from acquisitions including IDS and Oxford Apparel. Core operating profit grew by only 2% from last year, mainly due to higher operating costs in the LF USA business, for which steps have been taken to reduce costs through measures including job offshoring. On the other hand, the LF Europe business delivered a solid contribution in 2011 despite difficult market conditions. LF Asia experienced a good start in 2011 with the LF Asia Food, Health, Beauty & Cosmetics business delivering steady growth, while LF Asia Hard & Soft Goods made a debut acquisition in 2011 as well as good progress in building an important platform for branded consumer products in Asia. Softgoods & Hardgoods Segmentation In 2011, softgoods and hardgoods accounted for 64% and 34% of turnover respectively. Logistics represented approximately 2%. Softgoods turnover grew 17%, which was largely due to the organic growth of some existing customers, together with contributions from acquisitions such as Oxford Apparel and Loyaltex Apparel. Turnover from the hardgoods business increased by 39%, which was attributed mainly to acquisitions like IDS and Jimlar Corporation.

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Geographical Segmentation Geographically, while the US continued to be the Groups key export market, representing 60% of total turnover during the period under review, this share came down from 65% in 2010. The change was caused by increased shares from other markets, in particular China and rest of Asia, as a result of the acquisition of IDS. Year on year, turnover increased by 16%, reflecting growth in both the trading and distribution businesses. Europe accounted for 21% of turnover, compared to 24% in 2010. The overall drop in percentage of total turnover was attributed to the increase in share by the China market after the acquisition of IDS. Year on year, turnover increased by 11%, which was caused by the continued progress made in the European distribution business. Asia (including Japan) accounted for 12% of turnover, compared to not more than 4% during the same period last year, of which, China accounted for 6% of turnover, compared to 2% during the same period of last year. This was caused by the flow of business in LF Asia and LF Logistics after the acquisition of IDS at the end of 2010. Turnover in Canada, Central & Latin America, and Australasia accounted for 3%, 1% and 2% of the Groups total turnover respectively, representing annual increases of 27%, 37% and 4%. South Africa & the Middle East represented less than 1% of Groups turnover, an increase of 18% from last year.
Turnover by Export Markets
2011
21%

60% 12%

3% 2% 1% 1%
USA Asia Australasia S.Africa & Middle East Europe Canada Central & Latin America

ACQUISITIONS The Group has relied on sustained organic growth over the last 20 years, complementing it with an acquisition strategy that is especially relevant during times of uncertain economic conditions when excellent deals are available at attractive prices. During 2011, the Group signed 18 deals that included 12 acquisitions for the Groups Trading Network and 6 for its Distribution Network. Annualized turnover and core operating profit of the 19 newly acquired companies (including Oxford Apparel which was signed in 2010 but completed in 2011) were approximately US$2 billion and US$211 million respectively for 2011. All the acquired companies have been successfully integrated into the Group. Details of major deals signed during the year are listed as below.

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Trading Network The new additions to Li & Fungs Trading Network include the acquisitions of Modium, Celissa, Techno Source, Stone Sapphire/Gemstone Printing, Loyaltex Apparel, Collection 2000, Exim Designs, Union Rich, Lloyd Textile and True Innovations. Modium was acquired in January and is a virtual manufacturer of ladies' and men's woven apparel based in Istanbul, Turkey. Key competencies are its strong product development skills and short leadtimes. Celissa was acquired in March and is a trading company based in Istanbul, Turkey, supplying wovens and knits to customers in Europe. Key competencies are short leadtimes and access to key customers. In March, Li & Fung also acquired Techno Source USA, Inc., one of the fastest-growing toy companies and a toy innovator with a track record of successfully introducing electronic and non-electronic games. This acquisition provides a platform for Li & Fung to continue to build and expand its toy business globally. In the same month, Li & Fung acquired Stone Sapphire/Gemstone Printing, a company specializing in the supply of printed paper products and technical packaging. The acquisition provides Li & Fung with a platform to source specialty paper products and complex packaging solutions for our customers, and it further complements our expertise in the "Stationery and Supplies" category. In May, Li & Fung acquired Loyaltex Apparel Ltd. Loyaltex is a sourcing and development company specialized in knits, woven/denim and sweater. This acquisition will add a new portfolio of customers including Aeropostale, which sells casual clothing to 14-to-17-yearolds through over 900 stores in the United States, Canada and Puerto Rico; Sanmar, a major supplier of apparel to screen printers, embroiderers and promotional product distributors; and Alfred Dunner, the leading manufacturer of moderately priced ladies coordinated sportswear in the United States and Canada. This will further strengthen the Groups capabilities in global sourcing, as well as create significant synergies with its existing business. During the same month, Li & Fung acquired Collection 2000. It specializes in fashion color cosmetics products for the beauty industry in the UK, with a range of products available in the majority of the countrys leading mass color cosmetics retailers. This acquisition is expected to further category and customer base expansion in Li & Fungs Health, Beauty, and Cosmetics (HBC) business in the UK. In June, Li & Fung acquired Exim Designs Co., Ltd., a Thai-based furniture trading company that specializes in ready-to-assemble, flat-pack furniture. This acquisition will help strengthen Li & Fungs capabilities in the furniture business with mass-market and traditional furniture retailers and the Group expects additional synergies to be created with its existing customers in this product category. In July 2011, the Group acquired Union Rich USA, LLC., a leading product development company specializing in storage and organization products for home and travel. This acquisition further expands our reach to specialty home improvement retailers and further improves our knowledge of the home improvement industry.

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Li & Fung also acquired a design company Lloyd Textile Fashion Company Limited in July. The acquisition strengthens the Group's in-house design functions. The key managers from the acquisition will bring with them well-established relationships with customers and expert knowledge of mens product categories and markets which are important to the Group. In September, Li & Fung acquired True Innovations, LLC, one of the leading office and entertainment furniture trading companies servicing mass retailers. It designs, markets and distributes office chairs, desks and entertainment units under its proprietary brands, licensed brands as well as retailers private labels. This acquisition further expands Li & Fungs customer base in this product category as well as its licensing portfolio with wellknown US furniture brands. Distribution Network In addition, the Group has acquired Beyond Productions, TVMania, Hampshire Designers, Fishman & Tobin, Crimzon Rose and Midway Enterprises/Wonderful World for its Distribution Network. In January, Li & Fung acquired Beyond Productions, LLC, a leading designer and licensor of women's fashion apparel and accessories. The deal broadens the Group's range of offerings for the retail channel and further strengthens its position as an innovative, design-driven company. In May, Li & Fung acquired TVMania, the leading Pan-European supplier of character licensed and branded merchandize with the most comprehensive set of licenses across Europe. Its portfolio of character licenses include Hello Kitty, Mickey Mouse, Cars, Batman, Ben 10, Bakugan, Star Wars, Barbie, Pokmon, Bob the Builder, Sponge Bob, Spiderman Movies, Smurf, Dora the Explorer as well as the surf brand Gotcha. Major licensors include Sanrio, Disney, Marvel, MTV/Nickelodeon, Hit, Cartoon Network, Lucas Films and Mattel. The companys main product categories are casual, nightwear and underwear. This acquisition will help to further expand the Groups licensed apparel business alongside its private label apparel business across Europe. The acquisition of TVMania underlines the Groups strategy of creating synergies between its US and European distribution businesses. Together with Kids Headquarters, a US deal which was acquired in 2009, this acquisition will allow the Group to become the largest global player in licensed apparel trading, and hence a stronger and even more valuable partner to licensors and retailers. In May, Li & Fung acquired Hampshire Designers, Inc., the womens division of Hampshire Group Limited in the US. The acquisition includes Designers Originals, Mercer Street Studio and Hampshire Studio, and it is expected to further expand the Groups womens knitwear and woven product offerings and capabilities. In August, Li & Fung acquired Fishman & Tobin, a childrens apparel company and a key supplier to the boys dresswear market, specialized in boys dresswear, boys and girls school uniforms, boys sportswear and mens dresswear. This acquisition is a significant step in expanding the Groups licensed brands portfolio to dressier boys and girls apparel. Crimzon Rose International was also acquired in August and is one of the leading companies that designs, sources, markets and distributes costume jewelry and accessories under its own brands or licenses. Major brands include Crimzon, Erica
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Lyons, Daisy Fuentes, Elements, Lolita and Pure Expressions. This acquisition will add a jewelry platform to Li & Fungs Distribution business in the U.S. while strengthening its sourcing capability in this product category. In September, Li & Fung acquired Midway Enterprises (Guangzhou) Ltd., Wonderful World (HK) Ltd. and Wonderful World Overseas Limited from The Roly Group. They operate children apparel and toys businesses in Greater China. This marks Li & Fungs first acquisition for LF Asia since the expansion of its Distribution business to Asia in 2011. The acquisition dramatically strengthens LF Asias brands and licensing portfolio and enables LF Asia to expand its business into new markets and product categories, including the childrens marketplace in China. Licensing Deal In December, the Group signed master license agreement with USPA U.S. Polo Association. According to the agreement, LF Asia will take over the management of the USPA brand in China, Hong Kong and Macau including all hardgoods and softgoods for the trademark of USPA. Disposal of Properties Transactions) and Medical Equipment Businesses (Connected

In June, the Group announced the disposal of IDS Groups medical equipment businesses to Li & Fung Distribution Limited, a wholly owned subsidiary of Li & Fung (1937) Limited, which is a substantial shareholder of the Group. The reason for disposal was that the medical equipment businesses, which involved the distribution of durable medical equipment and required provision of long-term maintenance services, were not consistent with the Groups overall consumer goods business strategy. This disposal generated a gain of approximately US$45 million for the Group. At the same time, the Group also announced the sale of two properties in Turkey and Taiwan as well as a property company in China, and a leaseback of the property in Turkey. The Group believes the disposal and leaseback allow the Group to achieve its asset light strategy while obtaining a long lease for the Groups use. The disposal resulted in a gain of approximately US$14 million. THE NEW THREE-YEAR PLAN 2011-2013 The period under review was the first year of the current Three-Year Plan (2011-2013). The targets of this new Three-Year Plan 2011-2013 are to achieve Core Operating Profit of US$1.5 billion by 2013, with Trading, Logistics and Distribution expected to contribute US$0.7 billion, US$0.1 billion and US$0.7 billion respectively. Our long-established market position across the supply chain network puts us in an unique position to optimize opportunities for remarkable growth in the future. Li & Fung will also continue to monitor market conditions to ensure the continuing strength of its franchise, and to meet its responsibilities to all stakeholders, including customers, employees, vendors and shareholders. Li & Fung has maintained strong credit ratings from Moodys and Standard & Poors, at A3 (stable) and A- (stable) respectively. The Group continues to enjoy healthy cash flow and has strong credit ratios. For details, please refer to the following Financial Position and Liquidity section.
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PEOPLE As of the end of 2011, the Group had a total workforce of 29,624, of whom 4,518 were based in Hong Kong and 25,106 were located overseas and in mainland China. At Li & Fung we recognized that our asset base resides in the talent, enterprise and creativity of our people. We believe that investing in our people is about investing in the future and our goal is to inspire people and build a culture and environment in which they can grow and succeed. Employee Engagement In September 2011, we launched our first Employee Engagement Survey with the objective of assessing our engagement with our employees and their customer orientation, and finding out more about our strengths and opportunities for improvement across our business units and countries. The survey, which was web-based and implemented through a third-party to safeguard the anonymity of the respondents, consisted of 56, close-ended questions and one, open-ended question. Out of the 14,490 employees who received the survey request, 11,237 completed the survey, representing a response rate of 78%. The survey helped management to understand the views of employees and to receive useful feedback. We have formed a Corporate Engagement Team in conjunction with business executives to communicate the survey results across the company and to identify follow-up actions. In addition, our business executives will champion improvement initiatives that focus on the three themes of Communication, Career and People Care. Well-Being, Occupational Health and Safety and Human Rights We aim to provide a safe, healthy and respectful workplace by adhering to our policies and codes, raising awareness, sharing tips and experiences, and providing training for our employees. The health and well-being of all of our people globally is at the top of our agenda. Our Useful Tips on health and well-being play a vital role in sharing knowledge to our employees through daily email messages and our internal e-platform. The tips cover issues relevant to occupational health (e.g. desk ergonomics, heavy-lifting postures and precautions, stretching exercises) and well-being (e.g. ways to stay positive, quick stress relievers at workplace). To support the ongoing promotion of health and safety in our workplaces, we launched a series of Environmental, Health and Safety (EHS) initiatives in our distribution centers worldwide. We also provide training to our employees globally and regularly conduct internal EHS audits to ensure compliance in our operations and to strive for continual improvement. In November 2011, we launched our human rights statement on our website and implemented an internal awareness-raising program. The statement reinforces that since the founding of Li & Fung, respect for human rights has always been at the core of our beliefs and embedded in the way we do business. We have formalized these principles into group policies and codes that foster a respect for human rights amongst our employees and business partners.
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Learning and Development Our learning and development programs aim to strengthen core functional and management capabilities of our people through a variety of structured training programs, peer-to-peer learning, mentoring, on-the-job training, e-learning modules, and others. In 2011, we had a record of over 36,000 employee visits to access our online learning tools and over 19,025 participants attended formal learning classes or took part in e-learning. Learning initiatives focused on strengthening core functional and management capabilities of our people. Additional talent development programs focused on key transition points in the careers of our employees. Community Engagement Contributing to our communities is important to our employees around the world. This year we supported a variety of initiatives, ranging from: donations to assist victims of the tsunami in Japan, flooding in Bangkok and India, typhoons in the Philippines, and cold weather in Bangladesh and India; to supporting children and elderly in need globally; and to cleaning beaches and/or planting trees in the Philippines, Cambodia and Hong Kong and to helping a community conserve water in Guatemala. In 2011, over 6,000 of our employees volunteered over 3,800 hours to support over 100 environmental and social initiatives around the world. Our global employees also raised over US$1.7 million to support communities, with the LF Foundation providing over US$1.4 million to further support some of these projects. Going forward, we will continue to expand our activities in our communities around the world and develop an approach for assessing the impacts of our engagement. Total manpower costs for 2011 were US$1,227 million, compared with US$793 million for 2010. CHANGE IN FUNCTIONAL AND PRESENTATION CURRENCIES In prior years, the Company regarded Hong Kong dollar (HK dollar) as its functional currency. However, as a result of the Groups continuous overseas acquisitions in recent years, the Company and most of its major operating subsidiaries business transactions in terms of operating, investing and financing activities have increasingly placed greater reliance on US dollar. As such, effective from 1 January 2011, the Company and certain subsidiaries have changed their functional currency from HK dollar to US dollar. US dollar has also been adopted as the presentation currency of the Groups announcement. The Groups businesses as well as interests of its stakeholders are becoming more globalized and the change in presentation currency to US dollar will result in a more appropriate presentation of the Groups financial position and performance. The comparative figures in this announcement are translated accordingly. The changes in functional and presentation currencies have no significant impact on the financial positions of the Group as at 1 January 2010, 31 December 2010 and 2011, or the results and cash flows of the Group for years ended 31 December 2010 and 2011. FINANCIAL POSITION AND LIQUIDITY The Group continued to be in a strong financial position for the year under review with cash and cash equivalents amounting to US$426 million as of the end of December 2011. Normal trading operations were well supported by more than US$2.5 billion in bank
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trading facilities. In addition, the Group had available bank loans and overdraft facilities of US$1,182 million, out of which US$484 million were committed facilities. As of 31 December 2011, only US$218 million of the Groups bank loan and overdraft facilities was drawn down, out of which utilization of committed facilities was US$145 million. At balance sheet date, the Groups gearing ratio was 21%, calculated as net debt divided by total capital. Net debt of US$1,047 million was calculated as total borrowings (i.e. the aggregate of long-term bonds and bank loans of US$1,473 million) less cash and cash equivalents of US$426 million. Total capital was calculated as total equity of US$3,939 million plus net debt. The current ratio was 1.1, based on current assets of US$3,952 million and current liabilities of US$3,665 million. CREDIT RISK MANAGEMENT Credit risk mainly arises from trade and other receivables. The Group has stringent policies in place to manage its credit risk with trade and other receivables, which include but are not limited to the measures set out below: (i) A significant portion of business is secured by back-to-back payment arrangement with vendors or covered by letters of credit, customers standby letters of credit, bank guarantees or credit insurance; Certain trade receivable balances on open account term are factored to external financial institutions without recourse;

(ii)

(iii) The Groups credit control team makes an ongoing assessment of each counter party and determines the credit limits based on, among other factors, their trading and settlement history as well as their respective financial background. FOREIGN EXCHANGE RISK MANAGEMENT Most of the Groups cash balances were deposits in HK$ and US$ with major global financial institutions, and most of the Groups assets, liabilities, revenues and payments were held in either HK$ or US$. Therefore, we consider that the risk exposure to foreign exchange rate fluctuations is minimal. Foreign exchange risks arising from sales and purchases transacted in different currencies are managed by the Group treasury through the use of foreign exchange forward contracts. Pursuant to the Group policy in place, foreign exchange forward contracts, or any other financial derivatives, are entered into by the Group for hedging purposes. The Group has not entered into any financial derivatives for speculation. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES As of the date of this announcement, the Group has disputes with Hong Kong Inland Revenue (HKIR) involving additional tax assessments amounting to approximately US$247 million on both the non-taxable claim of certain non-Hong Kong sourced income (Offshore Claim) and the deduction claim of marketing expenses (Deduction Claim) for the years of assessment from1992/1993 to 2010/2011.

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The Commissioner of the HKIR issued a determination on 14 June 2004 to one of our subsidiaries, Li & Fung (Trading) Limited (LFT), confirming additional tax assessments totalling US$43 million relating to the years of assessment from 1992/93 to 2001/02. Based upon professional advice then obtained, the directors believed that the Group had meritorious defence to appeal against the Commissioners determination. Accordingly, LFT lodged a notice of appeal to the Board of Review on 13 July 2004. The appeal was heard before the Board of Review in January 2006. The Board of Review issued its decision on 12 June 2009 (the Board of Review Decision) and held partially in favour of LFT. It agreed that the Offshore Claim for the years of assessment from 1992/93 to 2001/02 is valid. In other words, the relevant assessments in respect of such Offshore Claim should be annulled. On the other hand, the Board of Review disagreed with the Deduction Claim for the years of assessment from 1992/93 to 2001/02. Therefore, the relevant assessments in respect of such Deduction Claim should be confirmed. The Group considered the reasoning of the Board of Review Decision and, having obtained professional advice, decided to lodge an appeal against the Board of Review Decision in respect of the Deduction Claim. On the other hand, the HKIR also lodged an appeal against the Board of Review Decision in respect of the Offshore Claim. On 19 March 2010, the Board of Review stated a case on questions of law in respect of both LFTs appeal on the Deduction Claim, and the HKIRs appeal on the Offshore Claim. On 1 April 2010, both LFT and the HKIR transmitted the stated case to the High Court for determination. The appeal by the HKIR in respect of the Board of Review Decision on the Offshore Claim was dismissed by the Court of First Instance on 18 April 2011, which upheld the Board of Review Decision. LFT was also awarded costs of the appeal. On 16 May 2011, the HKIR lodged an appeal against the judgment of the Court of First Instance to the Court of Appeal, which appeal was heard by the Court of Appeal on 14 and 15 February 2012. On 19 March 2012, the Court of Appeal has delivered its judgment. It has upheld the judgment of the Court of First Instance, and dismissed the HKIRs appeal. Any appeal against the judgment of the Court of Appeal to the Court of Final Appeal will require permission of the Court of Appeal or the Court of Final Appeal. The HKIR has until 16 April 2012 to apply for such permission to appeal. As regards LFTs appeal on the Deduction Claim, upon the consent of the parties, the Court of First Instance has remitted the case stated to the Board of Review and directed it to make further findings of fact and to determine certain issues. As of the date of this announcement, further directions/decisions from the Board of Review are awaited. The Group has also filed objections with the HKIR against the remaining additional tax assessments of US$204 million. The case before the Board of Review and now the Court of Appeal only applies to the additional tax assessments in respect of LFT for the years of assessment from 1992/93 to 2001/02. The Groups dispute with the HKIR regarding the remaining additional tax assessments in respect of certain other subsidiaries for the years of assessment from 1992/93 to 2001/02, and in respect of the Group for the period after the 2001/02 assessment years, is ongoing and has not yet been determined. It is therefore not yet before the Board of Review, and no hearing is currently scheduled.
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Based on the assessment of the Groups legal counsel on the merits of LFTs further appeal in respect of the Deduction Claim and the HKIRs further appeal in respect of the Offshore Claim (which has now been dismissed by the Court of Appeal), and having taken into account the impact and ramification that the Board of Review Decision has on the tax affairs of LFT, the directors consider that no material tax liabilities will finally crystallize and sufficient tax provision has been made in the accounts in this regard. On 11 June 2010, the Group also applied for a judicial review of the decision of the Commissioner of the HKIR rejecting LFTs application for an unconditional holdover of tax for the year of assessment 2008/09 pending the determination of the objection lodged with the HKIR. The Group purchased tax reserve certificates in respect of LFT for the year of assessment 2008/09 as directed by the Commissioner of the HKIR pending the decision of the judicial review application. As of the date of this announcement, the hearing date for the judicial review application is yet to be fixed. Other than the above, there are no material capital commitments, contingent liabilities or off-balance sheet obligations.

CORPORATE GOVERNANCE The Board of Directors and management are committed to principles of good corporate governance consistent with prudent management and enhancement of shareholder value. These principles emphasize transparency, accountability and independence. The role of the Group Chairman is separate from that of the Group Managing Director who was designated as Executive Deputy Chairman on 18 May 2011. This is to enhance their respective independence, accountability and responsibility. Their respective responsibilities are clearly established and defined in writing by the Board. The Board is responsible for setting up the overall strategy as well as reviewing the operation and financial performance of the Group. The Board has established the following committees (all chaired by Independent Non-executive Director or Nonexecutive Director) with defined terms of reference, which are on no less exacting terms than those set out in the Code on Corporate Governance Practices of the Listing Rules: Nomination Committee Audit Committee Risk Management and Sustainability Committee Remuneration Committee

Full details on the Companys corporate governance practices are set out in the Companys 2011 Annual Report.

AUDIT COMMITTEE The Audit Committee met four times in 2011 (with a 100% attendance rate) to review with management and the Companys internal and external auditors, the Groups significant internal controls and financial matters as set out in the Committees written terms of
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reference and make relevant recommendations to the Board. In 2011, the Committees review covers the audit plans and findings of internal and external auditors, external auditors independence and performance, the Groups accounting principles and practices, goodwill assessment, listing rules and statutory compliance, connected transactions, internal controls, risk management, treasury, financial reporting matters (including the interim and annual financial reports for the Boards approval) and the adequacy of resources, qualifications and experience of staff of the Companys accounting and financial reporting function as well as their training programmes and budget. The Audit Committee has reviewed the annual results for the year ended 31 December 2011.

RISK MANAGEMENT AND INTERNAL CONTROL The Board is responsible for maintaining a sound and effective system of risk management and internal controls for reviewing its effectiveness through the Audit Committee. Based on the respective assessments made by management and the Groups Corporate Governance Division and also taking into account the results of the work conducted by the external auditor for the purpose of their audit for 2011, the Audit Committee considered that for 2011:

the internal controls and accounting systems of the Group were in place and functioning effectively and were designed to provide reasonable assurance that material assets were protected, business risks attributable to the Group were identified and monitored, material transactions were executed in accordance with managements authorization and the accounts were reliable for publication. there was an ongoing process in place for identifying, evaluating and managing the significant risks faced by the Group. the resources, qualifications, experience, training programmes and budget of the staff of the Groups accounting and reporting function were adequate.

COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE PRACTICES OF THE LISTING RULES The Board has reviewed the Companys corporate governance practices and is satisfied that the Company has been in full compliance with all of the code provisions set out in the Code on Corporate Governance Practices contained in Appendix 14 of the Listing Rules throughout the year ended 31 December 2011.

COMPLIANCE WITH THE MODEL CODE OF THE LISTING RULES The Group has adopted stringent procedures governing Directors securities transactions in compliance with the Model Code as set out in Appendix 10 of the Listing Rules. Specific confirmation has been obtained from each Director to confirm compliance with the Model
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Code for 2011. Relevant employees who are likely to be in possession of unpublished price-sensitive information of the Group are also subject to compliance with written guidelines on no less exacting terms than the Model Code. No incident of non-compliance by Directors was noted by the Company in 2011. PURCHASE, SALE OR REDEMPTION OF THE COMPANYS LISTED SECURITIES The Company has not redeemed any of its listed securities during the year. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company's listed securities during the year.

FINAL DIVIDEND The Board of Directors recommended to pay to the shareholders a final dividend of 34 HK cents (2010: 26 HK cents, adjusted for the effect of Share Subdivision in May 2011) per Share for the year ended 31 December 2011 absorbing US$355 million (2010: US$269 million). An interim dividend of 19 HK cents (2010: 19 HK cents, adjusted for the effect of Share Subdivision in May 2011) per Share was paid by the Company on 7 September 2011.

ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held at Pheasant to Stork Room, 1st Floor, Mandarin Oriental, 5 Connaught Road Central, Hong Kong on 14 May 2012 at 11:30 a.m.. The Notice of Annual General Meeting will be published on the Companys website at www.lifung.com and HKExnews website at www.hkexnews.hk and despatched to the shareholders on or about 12 April 2012.

RECORD DATE AND CLOSURE OF REGISTER OF MEMBERS

For determining shareholders right to attend and vote at the Annual General Meeting Record Date: Latest time to lodge transfer documents with Share Registrar (Note i): For determining shareholders entitlement to the proposed final dividend Latest time to lodge transfer documents with Share Registrar Book Closure Date (Note ii): Expected despatch date of dividend warrants:
Notes: i.
(Note i)

Hong Kong Time 2012 11 May 4:30 p.m., 11 May

4:30 p.m., 17 May 18 to 21 May 25 May

The Companys Hong Kong branch share registrar is Tricor Abacus Limited, whose address is 26th Floor, Tesbury Centre, 28 Queens Road East, Wanchai, Hong Kong.

ii. No transfer of shares will be registered during the book closure date.

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PUBLICATION OF ANNUAL REPORT The 2011 annual report will be despatched to the shareholders and available on the Companys website at www.lifung.com and HKExnews website at www.hkexnews.hk on or about 12 April 2012.

BOARD OF DIRECTORS As at the date hereof, the Board of Directors of the Company comprises the following Directors:Non-Executive Directors: Victor Fung Kwok King (Chairman) Paul Edward Selway-Swift* Allan Wong Chi Yun* Franklin Warren McFarlan* Martin Tang Yue Nien* Benedict Chang Yew Teck Fu Yuning* *Independent Non-executive Directors Executive Directors: William Fung Kwok Lun (Deputy Chairman) Bruce Philip Rockowitz (Group President & Chief Executive Officer) Spencer Theodore Fung

By Order of the Board Victor FUNG Kwok King Chairman

Hong Kong, 22 March 2012 Websites: www.lifung.com www.irasia.com/listco/hk/lifung

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