(I) SUPPLEMENTAL DISPOSAL AGREEMENT; (II) CAPITAL REORGANISATION; AND (III) SUPPLEMENTAL SHARE TRANSFER AGREEMENT

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of Arnhold Holdings Limited. DELIGHT MAX LIMITED (Incorporated in British Virgin Islands with limited liability) ARNHOLD HOLDINGS LIMITED * (Incorporated in Bermuda with limited liability) (Stock Code: 102) (I) SUPPLEMENTAL DISPOSAL AGREEMENT; (II) CAPITAL REORGANISATION; AND (III) SUPPLEMENTAL SHARE TRANSFER AGREEMENT SUPPLEMENTAL DISPOSAL AGREEMENT On 21 January 2011, the Supplemental Disposal Agreement was entered into between the Company and Green Motherlode to provide for, among other things, with respect to the Business Contracts that could not be novated/assigned by the Disposal Group to the Remaining Group, where as agreed by the Company and Green Motherlode under the Supplemental Disposal Agreement, (i) the transfer of money received by the Disposal Group in respect of the Remaining Business (with no service fee) to the Remaining Group within 3 Business Days upon receipt of such monies, and (ii) the assumption and performance by the Remaining Group of all benefits, rights, obligations and liabilities under such Business Contracts of the Remaining Business as if the Remaining Group had been an original party to such Business Contracts, and including a deed of undertaking to be entered into between ACL and ATL on Disposal Completion. In addition, the Capital Reorganisation is now proposed to amend to transfer the entire amount of HK$98,426,610 standing to the credit of the share premium account of the Company as at 31 December 2010 to the Company s contributed surplus account. * For identification purpose only 1

2 SUPPLEMENTAL SHARE TRANSFER AGREEMENT In connection with the Supplemental Disposal Agreement, on 21 January 2011, the Supplemental Share Transfer Agreement was entered into between the Offeror and the Vendors to provide for, among other things, (i) the amendment of the references to the Disposal Agreement in the Share Transfer Agreement to include references to the Disposal Agreement as amended by the Supplemental Disposal Agreement; and (ii) the change of the release of the HSBC Guarantee from a Share Transfer Condition to a post-share Transfer Completion undertaking. The Supplemental Arrangements, being part of the Disposal, also constitute a special deal for the Company under Rule 25 of the Takeovers Code and require the consent of the Executive. Such consent, if granted will be subject to (i) the Independent Financial Adviser publicly stating that in its opinion the terms of the Disposal (including the Supplemental Arrangements) are fair and reasonable; and (ii) the approval of the Disposal (including the Supplemental Arrangements) by the SD Independent Shareholders by way of poll at the SGM. The Company has made an application to the Executive for consent under Rule 25 of the Takeovers Code in relation to the Disposal (including the Supplemental Arrangements) together with the Continuing Connected Transaction. The Disposal (including the Supplemental Arrangements) constitutes a major and connected transaction for the Company and is subject to reporting, announcement and independent shareholders approval requirements pursuant to the Listing Rules. Reference is made to the announcement jointly issued by Delight Max Limited and Arnhold Holdings Limited dated 28 December 2010 in relation to, among other things, the proposed disposal of Arnhold (BVI) Limited pursuant to a conditional agreement dated 20 December 2010 (the Joint Announcement ). Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as those defined in the Joint Announcement. SUPPLEMENTAL DISPOSAL AGREEMENT As mentioned in the Joint Announcement, in order to facilitate Share Transfer Completion and accordingly the Share Offer to the Shareholders, the Company proposes to carry out the Group Reorganisation, pursuant to which the Remaining Group will be principally engaged in tiles trading and engineering operations and the Disposal Group will carry on the Disposal Business, which refers to the rest of the existing business operations of the Group. 2

3 As part of the Group Reorganisation, all business contracts, including purchase orders, supply orders and distribution contracts, relating to the Remaining Business (the Business Contracts ) will be assigned or novated from the Disposal Group to the Remaining Group and effective upon such written consents having been obtained from the relevant parties (including the customers, suppliers and distributors). The management of the Group has used their best endeavours to negotiate with the relevant customers, suppliers and distributors in order to seek such consents but the Group anticipates that not all of such consents can be obtained before Disposal Completion given some of the Business Contracts were obtained from the Government of Hong Kong and other contractors through tender and whose consents are unlikely to be provided on the basis that (i) it is not a contractual obligation for the other parties to give consents; and (ii) assignment or novation is not an ordinary business practice for the government and the contractors. Since 17 December 2010, Arnhold Trading Limited ( ATL ), a member of the Remaining Group, has been receiving sales orders and placing purchase orders for the Remaining Business. As a result, on 21 January 2011, a supplemental agreement to the Disposal Agreement was entered into between the Company and Green Motherlode (the Supplemental Disposal Agreement ) to provide for, among other things, with respect to the Business Contracts that could not be novated/assigned by the Disposal Group to the Remaining Group, where as agreed by the Company and Green Motherlode under the Supplemental Disposal Agreement, (i) the transfer of money received by the Disposal Group in respect of the Remaining Business (with no service fee) to the Remaining Group within 3 Business Days upon receipt of such monies; and (ii) the assumption and performance by the Remaining Group of all benefits, rights, obligations and liabilities under such Business Contracts as if the Remaining Group had been an original party to such Business Contracts, and including a deed of undertaking to be entered into between Arnhold & Company Limited ( ACL ), which is a member of the Disposal Group, and ATL, which is a member of the Remaining Group, on Disposal Completion (the Supplemental Arrangements ). If there is any non-performance by the third party, ACL shall notify ATL within 3 Business Days when payment is due to be made by the third party to ACL, and ATL may require ACL to enforce the contract and take action against such third party as ATL considers appropriate and at the cost of ATL. Also, as ACL and ATL will enter into a deed of undertaking in relation to the arrangement between ACL and ATL in this regard, both ACL and ATL are bound by and are under an obligation to perform under the deed of undertaking. 3

4 The management of the Group anticipates that the Supplemental Arrangements will remain effective until such Business Contracts are completed or terminated or expired. Regarding the obligation to transfer any monies received by the Disposal Group to the Remaining Group in respect of the Remaining Business, it is currently expected not to last for more than two years, estimated based on the preliminary delivery schedules provided by the customers and suppliers. The estimated amounts of the Business Contracts pending to be assigned and novated from the Disposal Group to the Remaining Group was approximately HK$48.3 million for sales orders and HK$22.1 million for purchase orders as at 31 December In addition, as mentioned in the Joint Announcement, the Board will put forward to the Shareholders a proposal of the Capital Reorganisation. Pursuant to the Supplemental Disposal Agreement, the Capital Reorganisation is now proposed to amend to transfer the entire amount of HK$98,426,610 standing to the credit of the share premium account of the Company as at 31 December 2010 (but not as at 30 June 2010 as set out in the Joint Announcement) to the Company s contributed surplus account. Save for the amendments as set out in the Supplemental Disposal Agreement, all other provisions of the Disposal Agreement remain in full force and effect. The Supplemental Arrangements, being part of the Disposal, also constitute a special deal for the Company under Rule 25 of the Takeovers Code and require the consent of the Executive. Such consent, if granted will be subject to (i) the Independent Financial Adviser publicly stating that in its opinion the terms of the Disposal (including the Supplemental Arrangements) are fair and reasonable; and (ii) the approval of the Disposal (including the Supplemental Arrangements) by the SD Independent Shareholders by way of poll at the SGM. The Company has made an application to the Executive for consent under Rule 25 of the Takeovers Code in relation to the Disposal (including the Supplemental Arrangements) together with the Continuing Connected Transaction. The Disposal (including the Supplemental Arrangements) constitutes a major and connected transaction for the Company and is subject to reporting, announcement and independent shareholders approval requirements pursuant to the Listing Rules. 4

5 SUPPLEMENTAL SHARE TRANSFER AGREEMENT In respect of the corporate guarantee dated 3 June 1997 given by the Company in favour of the Hongkong and Shanghai Banking Corporation Limited ( HSBC ) in relation to a banking facility of a limit up to HK$52,000,000 (the HSBC Guarantee ), HSBC has agreed to release the HSBC Guarantee upon satisfaction of certain conditions in relation to the new securities to be provided by Arnhold (BVI) Limited but will physically retain the document of the HSBC Guarantee for a retention period of 6 months according to HSBC s own internal guidelines. The conditions imposed by HSBC are expected to be satisfied before Disposal Completion. In contemplation of the amendment of the Disposal Agreement by the Supplemental Disposal Agreement and considering the retention of the HSBC Guarantee, on 21 January 2011, a supplemental agreement to the Share Transfer Agreement was entered into between the Offeror and the Vendors (the Supplemental Share Transfer Agreement ). Pursuant to the Supplemental Share Transfer Agreement, (i) the references to the Disposal Agreement in the Share Transfer Agreement will be amended by the Supplemental Share Transfer Agreement to include references to the Disposal Agreement as amended by the Supplemental Disposal Agreement; and (ii) instead of being a Share Transfer Condition, Messrs. Green will undertake to procure the release and discharge of the HSBC Guarantee on or before 31 December 2011, that is, the change of the release of the HSBC Guarantee from a Share Transfer Condition to a post-share Transfer Completion undertaking. Save for the amendments as set out in the Supplemental Share Transfer Agreement, all other provisions of the Share Transfer Agreement remain in full force and effect. By order of the board of directors of Delight Max Limited Wang John Peter Ben Director By order of the Board of Arnhold Holdings Limited Lai Ka Tak, Patrick Director Hong Kong, 21 January

6 The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement relating to the Group and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed by the Group in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading. The directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the Group) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this announcement (other than those expressed by the Group) have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading. As at the date of this announcement, the executive Directors are Messrs Michael John Green, Daniel George Green and Lai Ka Tak, Patrick; the non-executive Directors are Messrs Lim Ghee Keong and Christopher John David Clarke; the independent non-executive Directors are Messrs Owen Mark Lewellin Rhys, Thaddeus Thomas Beczak and Simon Murray. As at the date hereof, the directors of the Offeror are Mr. Ho Yau Lung, Lawrence, Mr. Wang John Peter Ben and Mr. Ko Chun Fung, Henry. 6