MB Haikui Seafood by liaoqinmei

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									Prospectus
Haikui Seafood AG
23 April 2012
                                 Offering of 1,500,000 ordinary bearer shares
             (and, additionally, 225,000 ordinary bearer shares from an over-allotment option)

This is an initial public offering of 1,500,000 new shares (the "New Shares") in Haikui Seafood AG (the "Company"
or "Haikui Seafood AG" and collectively with its direct and indirect subsidiaries, "Haikui" or the "Haikui Group")
(the "Offering").

In addition, BankM – representative office (Repräsentanz) of biw Bank für Investments und Wertpapiere AG ("biw AG
- BankM") may effect over-allotments as part of the Offering of up to 225,000 additional shares (the "Greenshoe
Shares" and, together with the New Shares, the "Offer Shares"). The Greenshoe Shares have been granted to biw
AG - BankM by Mega Bond International Limited and Palm Cove International Limited (the "Greenshoe
Shareholders") by means of a securities loan for a potential over-allotment. To repay the securities loan, the
Greenshoe Shareholders have granted biw AG - BankM an option exercisable within 30 calendar days after the
commencement of trading to purchase the Greenshoe Shares at the offer price.

The Company will receive the net proceeds from the sale of the New Shares but will not receive any proceeds from the
sale of the Greenshoe Shares.

The price range within which purchase offers may be submitted is between EUR 10.00 and EUR 13.00 per Offer Share.
The offer period commences on 24 April 2012 and is expected to end on 10 May 2012. The offer price and the actual
number of Offer Shares that will be allocated to investors, i.e. the placement volume, are expected to be published at
the earliest on 10 May 2012 by means of an ad-hoc notice on an electronic information system and on the Company’s
website (www.haikui-seafood.com).

Delivery of the shares is expected to take place on 16 May 2012 through the book-entry facilities of Clearstream
Banking AG, against payment for the shares in immediately available funds.

The Offering consists of public offerings in Germany and Luxembourg and private placements to institutional investors
outside Germany, Luxembourg and the United States. The shares have not been and will not be registered under the
U.S. Securities Act of 1933, as amended, and are only being offered and sold outside the United States in reliance on
Regulation S under the Securities Act.

             See: "Risk Factors" for factors that should be considered before purchasing shares.

This document constitutes a prospectus for the purposes of the public offerings in Germany and
Luxembourg and the admission to trading of the current share capital of the Company of 10,000,000
shares and up to 1,500,000 New Shares on the regulated market (Regulierter Markt) of the Frankfurt
Stock Exchange (the "Prospectus").

This Prospectus has been prepared in the English language with a German-language summary in accordance with the
Commission Regulation (EC) No 809/2004 of 29 April 2004 and conforms to the requirements of the German
Securities Prospectus Act (Wertpapierprospektgesetz). This Prospectus has been approved by the German Federal
Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht - "BaFin") after a review for
completeness of the Prospectus, including a review for coherence and comprehensibility of the presented information,
according to Section 13, paragraph 1 of the German Securities Prospectus Act, and notified to the Luxembourg
Commission for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier - "CSSF") in
accordance with Section 18, paragraph 1 of the German Securities Prospectus Act and the European passport
mechanism set out in the Prospectus Directive (No 2003/71/EC).

                                                Underwriters
     biw Bank für Investments und Wertpapiere AG                               Pareto Securities AS

                                     Joint Lead Managers and Bookrunners
      BankM – representative office of biw Bank für                    Pareto Securities AS
           Investments und Wertpapiere AG

                                                   Selling Agents
         Cortal Consors S.A.                        DAB bank AG                               flatex AG
            ING-DiBa AG                         S Broker AG & Co. KG                         ViTrade AG

                    International Securities Identification Number (ISIN): DE000A1JH3F9
                          German Securities Identification Number (WKN): A1J H3F
                                              Ticker Symbol: H8K

                                         Prospectus dated: 23 April 2012
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                                                         CONTENTS

CLAUSE                                                                                                                     PAGE

SUMMARY OF THE PROSPECTUS......................................................................................... 1
General Information on the Company and its Business ........................................................... 1
Strengths ....................................................................................................................... 2
Strategy ........................................................................................................................ 3
Further Material Information Concerning the Company and Haikui Group .................................. 4
Summary of the Offering .................................................................................................. 5
Selected Financial Information ..........................................................................................10
Summary of Risk Factors .................................................................................................12
ZUSAMMENFASSUNG DES PROSPEKTS...............................................................................16
Allgemeine Informationen zur Gesellschaft und ihrer Geschäftstätigkeit ...................................16
Stärken .......................................................................................................................17
Strategie.......................................................................................................................18
Weitere wesentliche Angaben betreffend die Gesellschaft und die Haikui Gruppe .......................18
Zusammenfassung des Angebots.......................................................................................20
Ausgewählte Finanzangaben .............................................................................................25
Zusammenfassung der Risikofaktoren ................................................................................27
RISK FACTORS...............................................................................................................31
Risks related to Haikui’s business ......................................................................................31
Risks related to the political, social and legal environment of the People’s Republic of China ........44
Risks related to the industry and statistical data ..................................................................49
Risks related to the Offering .............................................................................................50
GENERAL INFORMATION..................................................................................................52
Responsibility for the Content of the Prospectus...................................................................52
Subject matter of this Prospectus ......................................................................................52
Forward-looking statements .............................................................................................52
Information derived from third parties................................................................................53
Documents available for inspection ....................................................................................54
Notes regarding financial and currency data ........................................................................55
Auditors .......................................................................................................................56
THE OFFERING...............................................................................................................57
Subject matter of the Offering ..........................................................................................57
Timetable for the Offering ................................................................................................57
Price range, offer period, offer price, and allotment ..............................................................58
General allotment criteria.................................................................................................59
Delivery and settlement of the Offer Shares ........................................................................59
Stabilization measures, over-allotments and Greenshoe Option ..............................................60
Greenshoe Shareholders ..................................................................................................60
General and specific information on the shares ....................................................................61
Market protection agreement/selling restrictions (lock-up).....................................................61
Admission for trading and listing of shares ..........................................................................62
Designated sponsor.........................................................................................................62
Selling agents ................................................................................................................62
REASONS FOR THE OFFERING, USE OF PROCEEDS, COSTS AND INTERESTS OF THIRD PARTIES
         INVOLVED IN THE OFFERING ................................................................................64
Reasons for the Offering ..................................................................................................64
Use of Proceeds and Costs ...............................................................................................64
Interests of third parties involved in the Offering..................................................................64
DIVIDEND POLICY AND EARNINGS PER SHARE....................................................................66
Dividend Rights and Dividend Policy...................................................................................66
Earnings per Share .........................................................................................................66
CAPITALISATION AND INDEBTEDNESS...............................................................................68
Indirect or contingent liabilities .........................................................................................69
Working capital statement................................................................................................69
DILUTION......................................................................................................................70



                                                                I
SELECTED FINANCIAL INFORMATION.................................................................................71
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
          OPERATION .......................................................................................................73
Overview.......................................................................................................................73
Key factors affecting Haikui’s results of operations ...............................................................74
Results of operations.......................................................................................................79
Balance sheet data .........................................................................................................88
Liquidity .......................................................................................................................93
Future commitments .......................................................................................................95
Contingent liabilities........................................................................................................95
Off-balance sheet and other arrangements..........................................................................96
Critical accounting policies ...............................................................................................96
Additional information on the Consolidated AG Financial Statements........................................97
Additional information on the Individual AG Financial Statements............................................97
INDUSTRY OVERVIEW .....................................................................................................98
Overview of the Chinese economy .....................................................................................98
Global seafood industry ...................................................................................................99
Chinese seafood industry ............................................................................................... 100
Government policies and incentives ................................................................................. 106
Competition and competitors .......................................................................................... 107
BUSINESS ................................................................................................................... 109
Overview..................................................................................................................... 109
Strengths .................................................................................................................... 110
Strategy ..................................................................................................................... 112
Products ..................................................................................................................... 114
Processing................................................................................................................... 115
Research and development............................................................................................. 119
Sales and distribution, marketing .................................................................................... 119
Customers................................................................................................................... 122
Suppliers and procurement............................................................................................. 122
Intellectual property...................................................................................................... 125
Employees................................................................................................................... 126
Processing facilities ....................................................................................................... 128
Property, plant and equipment........................................................................................ 129
Insurance.................................................................................................................... 131
Investments ................................................................................................................ 131
Material agreements ..................................................................................................... 132
Certifications and accreditations ...................................................................................... 134
Awards ..................................................................................................................... 135
Legal proceedings ......................................................................................................... 136
REGULATORY ENVIRONMENT.......................................................................................... 137
Fishing regulations in the PRC......................................................................................... 137
Quality and safety of food products.................................................................................. 138
Export of food products ................................................................................................. 139
Regulatory requirements pertaining to the expansion of production capacity ........................... 139
Regulatory requirements pertaining to the discharge of waste .............................................. 140
PRC labour contract law ................................................................................................. 140
Laws and regulations relating to social welfare................................................................... 141
Trademarks and patents ................................................................................................ 142
The PRC land system..................................................................................................... 145
PRC Company Law ........................................................................................................ 146
Foreign investment law.................................................................................................. 147
PRC tax laws................................................................................................................ 152
SHAREHOLDER STRUCTURE (PRIOR TO THE OFFERING AND UPON COMPLETION OF THE
          OFFERING) ...................................................................................................... 155
GENERAL INFORMATION ON THE COMPANY ...................................................................... 156
History ..................................................................................................................... 156
Formation, business name, legal seat, financial year and term of the Company ....................... 156



                                                                II
Business purpose of the Company ................................................................................... 157
Notices, paying agent .................................................................................................... 157
Group structure and corporate developments .................................................................... 157
INFORMATION ON THE SHARE CAPITAL OF THE COMPANY AND APPLICABLE PROVISIONS ........ 161
Share capital and shares................................................................................................ 161
Authorized share capital................................................................................................. 161
Conditional share capital ................................................................................................ 162
Employee participation, stock option programme ............................................................... 162
General provisions relating to profit allocation and dividend payments ................................... 162
General provisions relating to a liquidation of the Company ................................................. 163
General provisions governing changes in share capital ........................................................ 163
General provisions relating to pre-emptive rights ............................................................... 163
Reporting and notification requirements in relation to share ownerships................................. 164
Public takeovers ........................................................................................................... 165
Squeeze-out of minority shareholders and integration......................................................... 165
CORPORATE BODIES AND MANAGEMENT.......................................................................... 166
Management Board ....................................................................................................... 167
Supervisory Board ........................................................................................................ 172
Certain information on the members of the Supervisory Board and the Management Board ....... 176
General shareholders’ meeting........................................................................................ 177
Corporate governance ................................................................................................... 178
RELATED PARTY TRANSACTIONS..................................................................................... 179
Summary of transactions with related parties .................................................................... 179
TAXATION IN GERMANY................................................................................................. 181
Taxation of the Company ............................................................................................... 181
Taxation of shareholders................................................................................................ 182
Taxation of dividends .................................................................................................... 182
Taxation of capital gains ................................................................................................ 184
Inheritance and gift tax ................................................................................................. 186
Other taxes ................................................................................................................. 187
TAXATION IN THE GRAND DUCHY OF LUXEMBOURG........................................................... 188
General ..................................................................................................................... 188
Withholding tax ............................................................................................................ 188
Taxation of the shareholders........................................................................................... 188
Net worth tax............................................................................................................... 190
Other taxes ................................................................................................................. 190
UNDERWRITING ........................................................................................................... 192
Underwriting agreement ................................................................................................ 192
Greenshoe Option and securities loan............................................................................... 192
Commissions ............................................................................................................... 192
Termination/indemnity .................................................................................................. 192
Other relationships ....................................................................................................... 193
Selling and transfer restrictions....................................................................................... 193
RECENT DEVELOPMENTS AND OUTLOOK .......................................................................... 196
FINANCIAL SECTION ..................................................................................................... F-1
GLOSSARY .................................................................................................................. G-1
SIGNATURES ............................................................................................................... S-1




                                                              III
                                 SUMMARY OF THE PROSPECTUS

The following summary is intended as an introduction to this Prospectus and should be read in
conjunction with the more detailed information contained elsewhere in this Prospectus. Investors
should base their decision on whether to invest in the Offer Shares on an examination of the entire
Prospectus.

Haikui Seafood AG, Hamburg, Germany (the "Company" or "Haikui Seafood AG", and
collectively with its direct and indirect subsidiaries "Haikui" or the "Haikui Group"), biw Bank für
Investments und Wertpapiere AG, Willich, Germany ("biw AG"), and Pareto Securities AS, Oslo,
Norway ("Pareto"), assume responsibility for this summary, including the German translation
thereof, pursuant to Section 5, paragraph 2, sentence 3, no. 4 of the German Securities
Prospectus Act (Wertpapierprospektgesetz). They can be held liable, however, only in the event
that the summary is misleading, incorrect or contradictory when read in conjunction with other
parts of the Prospectus.

If a claim is brought before a court by an investor on the basis of information contained in this
Prospectus, the investor appearing as plaintiff may, pursuant to the national legislation of the
Member States of the European Economic Area, be required to bear the cost of having the
Prospectus translated prior to the commencement of legal proceedings.

General Information on the Company and its Business

The Company was founded by way of notarized deed of formation (Gründungsurkunde) on
12 October 2010 and incorporated by registration in the commercial register of the local court
(Amtsgericht) of Hamburg on 24 February 2011.

The operational business of Haikui is exclusively carried out by Fujian Dongshan Haikui Aquatic
Products Group Co. Ltd. ("Fujian Haikui"), which is the indirectly wholly owned subsidiary of the
Company. All shares in Fujian Haikui are owned by China Haikui Pte. Ltd. ("Haikui Singapore"),
a company under Singaporean law, whose sole shareholder is Haikui Seafood AG.

In order to present the business, financial condition and results of operations of Haikui historically,
Haikui has prepared annual consolidated financial statements of Haikui Singapore as at and for the
years ended 31 December 2009, 31 December 2010, and 31 December 2011 under IFRS (the
"Historical Consolidated Financial Statements"), from which Haikui’s financial information
referred to in this section was extracted.

Haikui is an established seafood processing company with operating facilities in China. It produces
and sells processed frozen and canned seafood for the Chinese market and for international
markets. Haikui’s products are made of a broad range of raw seafood, including prawn, crab,
various types of fish, and other species such as shellfish, cephalopod and abalone. Haikui sells
seafood that has undergone primary processing, such as cleaning, cutting, and peeling, as well as
seafood that has undergone further processing, such as cooking, grilling, seasoning, drying and/or
coating. Haikui’s product portfolio consists of more than 100 different products of frozen and
canned seafood. The frozen seafood category accounted for 90.6% and 87.9%, and the canned
seafood category accounted for 9.4% and 12.1% of Haikui’s revenues in 2010 and 2011,
respectively.

The raw seafood to be processed is sourced from regional suppliers located close to Haikui’s
processing facilities in Dongshan Island, China. The raw seafood used in Haikui’s products
originates both from capture fishing and aquaculture. In 2010 and 2011, capture fishing
contributed 48.6% and 59.3% to Haikui’s overall revenues, and aquaculture contributed 51.4%
and 40.7% to Haikui’s overall revenues, respectively. During 2011, Haikui has sourced it raw
materials from 84 suppliers for raw seafood being aquaculture farms and operators of fishing
vessels. As at 31 December 2011, Haikui has entered into framework agreements for the supply of
raw seafood for Haikui’s products with 61 of those suppliers. These framework agreements provide



                                                  1
Haikui with a strong supply base, including priority rights regarding the purchase of the raw
seafood and price discounts.

As at 31 December 2011, Haikui’s processing facilities had an aggregate annual output processing
capacity of approximately 28,543 tonnes per year. Haikui’s processing facilities are located in
Dongshan Island, Zhangzhou, Fujian Province, PRC. Dongshan Island lies between the East China
Sea and South China Sea, two of the three key marine resource centres in the PRC, and provides
direct access to abundant, diverse and sustainable marine resources. The Dongshan region is also
in close proximity to Taiwan, one of Haikui’s main overseas markets. A special economic zone for
the fishing and seafood processing industry is currently under development at Dongshan in
proximity to Haikui’s processing facilities, the Dongshan National Seafood Economic Development
Zone (the "Dongshan Special Economic Zone" or the "Zone") which Haikui expects to become
fully operational by the end of 2013. Haikui expects the Dongshan Special Economic Zone to
provide it with several advantages of an expansion of infrastructure, including, inter alia, a new
harbour for international fishing vessels, which will also provide for an increased quantity and
variety of raw seafood available.

Haikui’s customers are distributors (including large processing companies) in the PRC and
overseas, whereby most of the overseas customers are based in Asia, Europe, and the United
States. Haikui’s products sold in the PRC are made under Haikui’s own "Haikui" brand or under
third party brands, while sales in overseas markets are principally made under third party brands.

Haikui has three distribution channels, namely (i) overseas distributors accounting for 68.4% and
68.1% of Haikui’s overall revenues in 2010 and 2011, respectively, (ii) domestic distributors
accounting for 31.4% and 31.7% of Haikui’s overall revenues in 2010 and 2011, respectively and
(iii) direct sales, accounting for 0.1% and 0.2% of Haikui’s overall revenues in 2010 and 2011,
respectively. In terms of domestic sales, Haikui receives most of its customer orders directly from
PRC distributors. In terms of international sales other than to Asian countries, Haikui receives most
of its customer orders through buying agents which receive orders directly from international
distributor customers seeking seafood products. An important pillar of Haikui’s growth strategy is
the expansion of its own brand sales in China.

Haikui has experienced significant revenue growth for the periods under review. Haikui’s revenues
increased from EUR 94,544 thousand in 2009 to EUR 126,219 thousand in 2010 and to
EUR 152,116 thousand in 2011, corresponding to a compounded annual growth rate of 26.8%
over this period. Haikui’s net profits increased from EUR 18,015 thousand in 2009 to EUR 23,357
thousand in 2010 and to EUR 28,333 thousand in 2011, corresponding to a compounded annual
growth rate of 25.4% over this period.

Haikui employed an average of 2,194 employees, including 1,589 temporary contract workers in
the financial year 2011.

Strengths

The Company believes that the following competitive strengths are the main drivers of its
sustainable future growth:

•     Established track record with strong market recognition as a manufacturer of high quality
      seafood products.

•     Strong financial performance and high profitability.

•     Sizeable processing capacities and facilities in strategic locations.

•     Close cooperation with raw seafood suppliers.

•     Broad product portfolio and product development skills.

•     Experienced and dedicated management team.

                                                   2
Strategy

Haikui is pursuing the following strategic objectives:

•     Expansion of the distribution network and strengthening of the market presence in the PRC
      and overseas.

•     Strengthening of brand image and recognition.

•     Expansion of processing capacity.

•     Expansion of supply base by contracting new suppliers and intensifying cooperation with
      existing suppliers.

•     Expansion of product range.

•     Continuation in emphasis on research and product development and strengthen Haikui’s
      expertise and technical know-how.




                                                  3
Further Material Information Concerning the Company and Haikui Group

The Company is a German stock corporation incorporated under the laws of Germany with its legal
seat (Satzungssitz) in Hamburg. The Company is registered with the commercial register of the
local court (Amtsgericht) of Hamburg under the registration number HRB 117277. The business
purpose of the Company is the processing and sale of foodstuffs for human and animal
consumption, in particular of fish and other seafood, by the Company itself or indirectly by its
subsidiaries and/or affiliated companies as well as all businesses and services in connection
therewith and services for its subsidiaries and affiliated companies. The Company holds 100% of
the shares in China Haikui Pte. Ltd. ("Haikui Singapore"), a company incorporated under
Singaporean law which acts as intermediate holding company and holds 100% of the equity
interests in Fujian Dongshan Haikui Aquatic Products Group Co. Ltd ("Fujian Haikui"), a company
incorporated in the PRC, which is the operational company of Haikui.

Management Board                        Mr. Chen Zhenkui, Mr. Huang Zhenping, Mr. Alan Gey

Supervisory Board                       Dr. Klaus Vieten, Dr. Rainer Simon, Mr. Chan Hock Eng

Share Capital (Prior to the             Euro ("EUR") 10,000,000 divided into 10,000,000 no par
Implementation of the                   value ordinary bearer shares (Inhaber-Stückaktien) each
Offering)                               having a notional amount of the share capital of EUR 1.00.

Auditors                                Crowe           Horwath          Deutschland                GmbH,
                                        Wirtschaftsprüfungsgesellschaft, Pariser Platz         7,   70173
                                        Stuttgart, Germany ("Crowe Horwath")

Existing Shareholders (Prior            The shareholders of Haikui Seafood AG immediately prior to
to the Implementation of the            the implementation of the Offering (the "Existing
Offering)                               Shareholders") are set out in the table below:



Existing Shareholder                                      Number of shares          Percentage of shares

Haida Holdings Pte. Ltd.(1)                                        5,656,588                        56.57%
Mega Bond International Limited(2)                                 3,542,918                        35.43%
Palm Cove International Limited(3)                                   300,247                         3.00%
Praise Ocean International Limited(4)                                300,247                         3.00%
Everswift Holdings Limited(5)                                        180,000                         1.80%
Alan Gey(6)                                                           20,000                         0.20%
Total(7)                                                         10,000,000                          100%



1)    Haida Holdings Pte. Ltd. ("Haida Holdings"): A company incorporated in Singapore, whose sole
      shareholder is the Company’s CEO, Mr. Chen Zhenkui.

2)    Mega Bond International Limited ("Mega Bond"): A company incorporated in the British Virgin Islands,
      whose shares are held by two investment funds being Zana China Fund L.P ("ZCF") and ASB CMIA
      China Growth I L.P. ("ACCG1"), and Pine Universe Investments Limited, whose sole shareholder is Ms.
      Sophy Hu, who is not a related party to Haikui.

3)    Palm Cove International Limited ("Palm Cove"): A company incorporated in Samoa, whose sole
      shareholder is Mr. Tang Hui.

4)    Praise Ocean International Limited ("Praise Ocean"): A company incorporated in the British Virgin
      Islands, whose sole shareholder is the Company’s COO, Mr. Huang Zhenping.

5)    Everswift Holdings Limited ("Everswift"): A company incorporated in the British Virgin Islands, whose
      shares are held by ZCF and ACCG1.

6)     Mr. Alan Gey ("Mr. Alan Gey"): The Company’s CFO, a Singapore national.


                                                    4
7)      By way of share purchase agreement dated 19 April 2012, Haida Holdings has agreed with Mr. She
        Dongpeng, a PRC citizen, to sell to Mr. She Dongpeng 300,000 shares in the Company, equivalent to 3%
        of the Company's current share capital. The share transfers will be made immediately following the
        registration of the execution of the IPO Capital Increase with the commercial register.

Registered     Office        and    The legal seat (Satzungssitz) of the Company is in Hamburg and
Financial Year                      the business address is Haikui Seafood AG, c/o Ashurst LLP,
                                    OpernTurm, Bockenheimer Landstraße 2-4, 60306 Frankfurt am
                                    Main, Germany. The financial year is the calendar year. The first
                                    financial year was a short financial year (Rumpfgeschäftsjahr).

Employees                           In the full financial year 2011, Haikui had an average number of
                                    2,194 employees, including an average of 1,589 temporary
                                    contract workers.* As of the date of this Prospectus, there has
                                    been no material change in the number of permanent employees.
                                    Next to its board members, the Company itself does not have any
                                    employees.

                                    * Based on the Historical Consolidated Financial Statements.




Summary of the Offering

Offering                            The Offering consists of a public offering in Germany and
                                    Luxembourg and private placements to institutional investors
                                    outside Germany, Luxembourg and the United States.

                                    The Offering consists of 1,725,000 no par value ordinary bearer
                                    shares (Inhaber-Stückaktien) of Haikui Seafood AG, each having a
                                    notional amount of the share capital of EUR 1.00 and each vested
                                    with full dividend rights for the financial year 2012 (the "Offer
                                    Shares"), consisting of

                                    (i) 1,500,000 no par value ordinary bearer shares from a capital
                                    increase against cash contributions resolved by an extraordinary
                                    general meeting of shareholders on 16 March 2012 (the "New
                                    Shares"), and (ii) 225,000 no par value ordinary bearer shares
                                    from the holdings of the Greenshoe Shareholders in connection
                                    with a potential over-allotment (the "Greenshoe Shares").

Greenshoe Shareholders              Mega Bond International Limited.

                                    Palm Cove International Limited.

Offer Period                        The offer period is begins on 24 April 2012 and is expected to end
                                    on 10 May 2012.

                                    Purchase orders are freely revocable until the end of the offer
                                    period.

                                    On the last day of the offer period, retail investors may submit
                                    offers to purchase Offer Shares until 12:00 noon (Central
                                    European Summer Time) and institutional investors until 4:00 pm
                                    (Central European Summer Time).

Price     Range     and    Offer    The price range within which purchase offers may be submitted is
Price                               between EUR 10.00 and EUR 13.00 per Offer Share.



                                                      5
                             The offer price per Offer Share will be collectively determined by
                             the Company and the Bookrunners using the order book prepared
                             during the bookbuilding process. Afterwards, the offer price and
                             the actual number of Offer Shares that will be allocated to
                             investors, i.e. the placement volume, will be published in the form
                             of an ad-hoc notice via an electronic information system and on
                             the Company’s website (www.haikui-seafood.com). Particularly in
                             the event that the placement volume proves insufficient to satisfy
                             all of the purchase orders submitted at the offer price, the
                             Bookrunners reserve the right not to accept purchase orders, in
                             whole or in part.

Amendments to the Terms      Together with the Bookrunners, the Company reserves the right
of the Offer                 to decrease the number of Offer Shares, to increase or decrease
                             the upper and/or lower limits of the price range, and/or to extend
                             or shorten the offer period. If any of the terms of the offer are
                             modified, the change will be published by means of an
                             announcement through an electronic information service such as
                             Reuters or Bloomberg and on the Company’s website
                             (www.haikui-seafood.com), and/or, to the extent required by the
                             German Securities Trading Act (Wertpapierhandelsgesetz) as an
                             ad-hoc notice, and/or to the extent required by the German
                             Securities Prospecuts Act (Wertpapierprospektgesetz) as a
                             supplement (Nachtrag) to the Prospectus. Investors who have
                             submitted purchase orders will not be notified individually.

Delivery and Settlement of   It is expected that the Offer Shares will be delivered one banking
Offer Shares                 day after commencement of trading of the shares against
                             payment of the offer price.

Over-Allotment/              In connection with the placement of the New Shares, over-
Stabilization                allotments may be made and stabilization measures aimed at
                             supporting the stock exchange or market price of the Company’s
                             shares may be undertaken to the extent permitted by applicable
                             law. Stabilization measures may be effected as of the date of the
                             commencement of trading of the Company’s shares and must be
                             completed no later than the 30th calendar day after such date.

Greenshoe Option             The Greenshoe Shareholders have granted biw AG – BankM
                             225,000 no par value ordinary bearer shares by means of a
                             securities loan for a potential over-allotment (the "Greenshoe
                             Shares").

                             To repay the securities loan, the Greenshoe Shareholders have
                             granted biw AG - BankM an option to purchase the Greenshoe
                             Shares at the offer price less any agreed commissions (the
                             "Greenshoe Option"). The Greenshoe Option expires 30
                             calendar days after commencement of trading of the shares.

General Allotment Criteria   The Company, the Greenshoe Shareholders and the Bookrunners
                             intend to comply with the "Principles for the Allotment of Share
                             Issues to Private Investors" (Grundsätze für die Zuteilung von
                             Aktienemissionen an Privatanleger), which were issued on 7 June
                             2000       by      the     Exchange       Expert     Commission
                             (Börsensachverständigenkommission) of the German Federal
                             Ministry of Finance (Bundesministerium der Finanzen).




                                             6
Underwriters               biw Bank für Investments und Wertpapiere AG, Hausbroicher
                           Str. 222, 47877 Willich, Germany ("biw AG")

                           Pareto Securities AS, Dronning Mauds gt. 3, P.A. Box 1411 Vika,
                           N-0115 Oslo, Norway ("Pareto")

Joint Lead Managers and    BankM – representative office of biw Bank für Investments und
Bookrunners                Wertpapiere AG, Mainzer Landstraße 61, 60329 Frankfurt am
                           Main, Germany ("biw AG - BankM"). biw AG - BankM is the
                           dependent investment banking arm of biw Bank für Investments
                           und Wertpapiere AG, however, is not a legal entity separate from
                           biw Bank für Investments und Wertpapiere AG.

                           Pareto Securities AS, Dronning Mauds gt. 3, P.A. Box 1411 Vika,
                           N-0115 Oslo, Norway ("Pareto")

Managers                   biw AG, biw AG – BankM, Pareto

Selling Agents             Cortal Consors S.A, DAB bank AG, flatex AG, ING-DiBa AG, S
                           Broker AG & Co. KG, ViTrade AG.


Admission to Trading and   An application for admission of all of the shares of the Company -
Listing                    including the New Shares - to trading on the regulated market
                           (Regulierter Markt) (Prime Standard) of the Frankfurt Stock
                           Exchange is expected to be filed on 30 April 2012 and admission
                           is expected to be granted one business day after the expiration of
                           the offer period at the earliest. Commencement of trading is
                           expected to take place on the first trading day following the day of
                           admission.

Early Termination of the   The underwriting agreement provides that the Managers may
Offering                   terminate     the    underwriting    agreement      under    certain
                           circumstances, even after the Offer Shares have been allocated
                           and listed, up to delivery and settlement of the Offer Shares.

                           If the underwriting agreement is terminated, the Offering will not
                           take place. In such case, allocations of Offer Shares to investors
                           will be invalidated, and investors will have no claim for delivery.
                           Claims relating to any subscription fees paid and costs incurred by
                           any investor in connection with the subscription are governed
                           solely by the legal relationship between the investor and the
                           institution to which the investor submitted its purchase order.


Market Protection          The Company has agreed with the Managers that, for the first six
Agreement/ Selling         months after the shares have been listed on the Frankfurt Stock
Restrictions (Lock-up)     Exchange, without the prior consent of the Managers it will not:

                               ·   announce or implement any capital           increase   from
                                   authorized capital (genehmigtes Kapital),

                               ·   propose a resolution for any capital increase at the
                                   General Shareholders’ Meeting (Hauptversammlung),

                               ·   (a) directly or indirectly issue, purchase, sell, offer,
                                   undertake to sell, promote, otherwise issue or announce
                                   an offer in relation to shares or other securities of the
                                   Company which are convertible or exchangeable into

                                           7
                                   shares of the Company or grant an option to purchase
                                   shares of the Company, (b) enter into or execute
                                   transactions (including derivatives transactions) that are
                                   economically equivalent to the purchase or sale of the
                                   shares of the Company, or (c) directly or indirectly cause
                                   or approve transactions within the meaning of the
                                   foregoing provisions (a) and/or (b).

                            Haida Holdings, Praise Ocean, and Mr. Alan Gey have agreed with
                            the Managers that, for the first twelve months after the listing of
                            the shares of the Company on the Frankfurt Stock Exchange they
                            will not:

                               ·   offer, pledge, allot, sell, contract or agree to sell or to
                                   transfer, sell any option or contract to purchase, purchase
                                   any option to sell, grant any option, right or warrant to
                                   purchase, or otherwise transfer or dispose of, directly or
                                   indirectly, any shares of the Company or any securities
                                   convertible into or exercisable or exchangeable for shares
                                   of the Company;

                               ·   enter into any swap or other arrangement that transfers
                                   to another, in whole or in part, the economic risk of
                                   ownership of shares of the Company, whether any such
                                   transaction described in the clauses above is to be settled
                                   by delivery of shares of the Company or such other
                                   securities, in cash or otherwise;

                               ·   make any demand for or exercise any right with respect
                                   to the registration under U.S. securities laws of any
                                   shares of the Company or any security convertible into or
                                   exercisable or exchangeable for shares of the Company;
                                   or

                               ·   propose any increase in the share capital of the Company,
                                   vote in favour of such a proposed increase or otherwise,
                                   support any capital increase proposed with respect to the
                                   Company without the consent of the Managers.

                            Mega Bond, Everswift, Palm Cove and Mr. She Dongpeng have for
                            the same period agreed with the Managers not to carry out any of
                            the aforementioned transactions without the Managers' prior
                            consent. Palm Cove and Mr. She Dongpeng will on a pro rata basis
                            be automatically released from their lock-up obligations for such
                            number of their shares if and to the extent that the New Shares
                            sold in the Offering would amount to less than 11% of the
                            Company's share capital after the Offering.

                            These restrictions do not apply to the sale of the Offer Shares,
                            and to shares purchased over the stock exchange after the
                            Offering.

Costs of the Offering for   As the costs of the Offering depend on the total number of Offer
the Company                 Shares placed and the offer price that determine the amount of
                            the commissions, the Company cannot reliably predict the
                            Offering costs at this time. Based on the price range, assuming
                            the placement of all Offer Shares and the full exercise of the over
                            allotment option, the Company estimates that the total costs of

                                            8
                               the Offering (including commissions for the Underwriters) will
                               amount to between EUR 1.8 million and EUR 2.1 million with
                               between EUR 1.7 million and EUR 2.0 million thereof being
                               incurred by the Company and the remaining costs to be incurred
                               by the Greenshoe Shareholders.

Use of Proceeds                Haikui plans to use the net proceeds that it will receive from the
                               sale of the New Shares

                                  ·   approx. 25% - 45% for general working capital purposes;
                                      and

                                  ·   approx. 55% - 75% to support certain investments, in
                                      particular, for the partial financing of its planned new
                                      factory close to its current business premises.

German            Securities   A1J H3F
Identification      Number
(WKN)

International     Securities   DE000A1JH3F9
Identification      Number
(ISIN)

Ticker Symbol                  H8K




                                               9
Selected Financial Information

The Company was founded by way of notarized deed of formation (Gründungsurkunde) on
12 October 2010 and incorporated by registration in the commercial register of the local court
(Amtsgericht) of Hamburg on 24 February 2011.

The operational business of Haikui is exclusively carried out by Fujian Dongshan Haikui Aquatic
Products Group Co. Ltd. ("Fujian Haikui"), which is the indirectly wholly owned subsidiary of the
Company. All shares in Fujian Haikui are owned by China Haikui Pte. Ltd. ("Haikui Singapore"),
a company under Singaporean law, whose sole shareholder is Haikui Seafood AG.

In order to present the business, financial condition and results of operations of Haikui historically,
Haikui has prepared annual consolidated financial statements of Haikui Singapore as at and for the
years ended 31 December 2009, 31 December 2010, and 31 December 2011 under IFRS (the
"Historical Consolidated Financial Statements"). The Historical Consolidated Financial
Statements have been prepared by Haikui for the purpose of this Offering. The purpose of these
financial statements is to put the investor in the position to better compare the development of the
business, financial condition and the results of operations of Haikui over the periods under review.

Beyond that, Haikui has prepared consolidated financial statements under IFRS of the Company for
the short financial year from 24 February 2011 until 31 December 2011 (the "Consolidated AG
Financial Statements") and financial statements under the German Commercial Code (HGB) of
the Company for the short financial year from 24 February 2011 until 31 December 2011 (the
"Individual AG Financial Statements").

The Historical Consolidated Financial Statements, the Consolidated AG Financial Statements, and
the Individual AG Financial Statements were audited by Crowe Horwath Deutschland GmbH,
Wirtschaftsprüfungsgesellschaft, Pariser Platz 7, 70173 Stuttgart, Germany ("Crowe Horwath").

Haikui’s selected financial information as at and for the years ended 31 December 2009,
31 December 2010, and 31 December 2011, which is reflected in this section, was extracted from
the audited Historical Consolidated Financial Statements, unless expressly stated otherwise.




                                                  10
The following figures were subject to rounding adjustments that were carried out according to
established commercial standards. As a result, the figures stated in the table may not exactly add
up to the total values that may also be stated in the table.


Selected Financial Data                        2009                     2010                   2011                   2011
                                                                                                                (24 Feb – 31 Dec)9
                                         EUR                     EUR                     EUR                      EUR
                                       thousand        %       thousand         %      thousand        %       thousand      %
Selected Income Statement Data                                                   (audited)
Revenue                                    94,544       100%       126,219       100%    152,116        100%     132,987    100.0%
Cost of sales                            (72,524)      76.7%      (96,360)      76.3% (114,203)        75.1%    (99,547)     74.9%
Gross Profit                              22,020      23.3%        29,859      23.6%      37,913      24.9%      33,440     25.1%
Other income                                  497       0.5%            617      0.5%         285       0.2%          272     0.2%
Distribution expenses                       (778)       0.8%          (983)      0.8%     (1,596)       1.0%      (1,439)     1.1%
Administrative expenses                   (1,773)       1.9%        (1,696)      1.3%     (2,582)       1.7%      (2,197)     1.7%
Other operating expenses                     (44)       0.0%           (41)      0.0%        (48)       0.0%      (1,518)     1.1%
Profit from operations                     19,922      21.1%         27,756     22.0%      33,972      22.3%       28,558    21.5%
Financial (expenses) /income, net             219       0.2%        (1,342)      1.1%     (1,613)       1.1%      (1,389)     1.0%
Profit before income tax                  20,141      21.3%        26,414      20.9%      32,359      21.3%      27,169     20.4%
Income tax                                (2,126)       2.2%        (3,057)      2.4%     (4,026)       2.6%      (3,570)     2.7%
Profit for the period                     18,015      19.1%        23,357      18.5%      28,333      18.6%      23,599     17.7%

Selected Balance Sheet Data1
Total assets                               57,330                  88,449                 124,916                123,366
Total liabilities                           6,899                   8,167                   8,644                  8,702
Total equity                               50,431                  80,282                 116,272                114,664

Selected Cash Flow Data
Cash flow from operating activities         7,281                   11,550                 10,487                  3,202
Cash flow from investing activities       (1,984)                 (11,605)                (1,274)                (1,250)
Cash flow from financing activities       (2,041)                  (1,685)                  (281)                  (279)

Cash at end of period                     14,918                  14,951                  25,587                 25,690




Other Selected Financial Data2                 2009                   2010                 2011                 2011
                                                                                                         (24 Feb – 31 Dec)9
                                         EUR thousand10          EUR thousand10      EUR thousand10        EUR thousand10
Gross profit margin                          23.3%                   23.6%               24.9%                 25.1%
EBITDA3                                      20,478                  28,449              35,423                29,770
EBITDA margin4                               21.7%                   22.5%               23.3%                 22.4%
EBIT5                                        19,922                  27,756              33,972                28,558
EBIT margin6                                 21.1%                   22.0%               22.3%                 21.5%
Net profit margin7                           19.1%                   18.5%               18.6%                 17.7%
Number of employees8                          1,804                   1,905               2,194                 2,311
_________

1)      Data as at the end of the respective period
2)      "Other Selected Financial Data" is unaudited and has been calculated based on information derived from the audited
        Historical Consolidated Financial Statements and Consolidated AG Financial Statements, respectively, and is taken
        from Haikui's internal management accounts. The number of employees is audited.
3)      EBITDA is calculated as net income less interest income plus interest expense plus tax payable less tax refund
        plus/less investment income plus depreciation and amortization
4)      EBITDA divided by revenues times 100
5)      EBIT is calculated as net income less interest income plus interest expense plus tax payable less tax refund plus/less
        investment income
6)      EBIT divided by revenues times 100
7)      Profit for the period divided by revenues times 100
8)      Average for the period, including permanent and temporary workers
9)      Extracted from or based on the Consolidated AG Financial Statements covering the short financial year
        (Rumpfgeschäftsjahr) 24 February 2011 until 31 December 2011
10)     Other than Gross profit margin, EBITDA margin, EBIT margin, number of employees




                                                            11
Summary of Risk Factors

Prior to making a decision on the purchase of the Offer Shares, investors should carefully consider
certain risks. If any of the events associated with these risks occur, individually or in connection
with other circumstances, the business of Haikui may be affected to a substantial degree, with a
material adverse effect on the net assets, financial condition and results of operations of Haikui.
The stock exchange price of the shares could decline as a result of an event associated with the
occurrence of any of these risks, and investors could lose some or all of the capital they have
invested. The following are risk factors:

Risks related to Haikui’s business

·     Haikui depends on the supply of fresh and quality raw seafood from suppliers for its
      processing and any disruptions or restrictions leading to a shortage in the supply or
      deterioration in the quality of raw seafood would materially adversely affect its business,
      financial condition and results of operations.

·     Governmental regulations and policies restricting capture fishing may adversely affect
      Haikui’s business, financial condition and results of operations.

·     Haikui’s profitability may be adversely affected by increases in the prices of raw seafood.

·     Disruptions or delays in the delivery of raw materials from its suppliers to Haikui or in the
      delivery by Haikui of its products to its customers could significantly increase its operating
      costs, thus adversely affecting its profitability.

·     The outbreak of diseases or widespread contamination affecting seafood used by Haikui
      could adversely affect its business, financial condition and results of operations.

·     The susceptibility of Haikui’s raw materials and finished products to deterioration during its
      processing and sales cycles may lead to a delay in processing or delivery of the products,
      lower revenues and higher costs.

·     Haikui’s operations are capital intensive and failure to maintain sufficient working capital
      may have an adverse impact on Haikui’s business.

·     Haikui’s revenues fluctuate due to seasonality in demand and shortages in the supply of
      seafood from capture fishing in certain periods due to governmental regulations.

·     Haikui’s expansion plans will depend on its ability to successfully expand its processing
      capacity.

·     Haikui may not be able to manage its growth successfully.

·     Haikui may not be able to secure adequate financing to fund its growth strategy.

·     Haikui may not be able to successfully implement its business strategy.

·     Haikui is exposed to fluctuations in foreign exchange rates.

·     Haikui may be affected by import policies of the countries to which its products are exported.

·     Haikui is subject to rules and regulations in countries to which its products are exported and
      may not always be able to comply with them.

·     Haikui generates the majority of its revenues from a limited number of major customers.

·     Haikui operates in a highly competitive environment. Increased competition or the entry of
      new competitors may result in lower margins or in a loss of Haikui’s market share.

                                                 12
·   Haikui depends on the renewal and/or maintenance of certain certifications for the sale of its
    products.

·   Any failure to meet health and hygiene standards will materially and adversely affect Haikui.

·   Changes in consumer preferences or consumer spending could adversely affect Haikui’s
    performance.

·   Negative publicity on PRC products may adversely affect Haikui’s business and profits.

·   Haikui may be affected by complaints and/or product liability claims and may be subject to
    significant liability, in particular if the consumption of any of Haikui’s products causes, or be
    alleged to cause, injury, illness or death.

·   Haikui may not be able to comply with applicable laws and regulations, in particular relating
    to food quality and safety, which could negatively impact Haikui’s business and/or lead to
    fines or other penalties.

·   The success of Haikui’s business depends on attracting and retaining key personnel and
    employees for its processing lines.

·   Haikui may face rising labour costs.

·   Haikui’s management and financial reporting systems may be inadequate to support its
    future growth and to ensure accurate consolidated financial reporting.

·   The Management Board of the Company is not experienced with German legal requirements
    for listed companies and Haikui currently does not have a comprehensive risk management
    system in place.

·   The Company’s Supervisory Board may have difficulties in adequately supervising the
    Management Board.

·   The Company’s CEO, Mr. Chen Zhenkui, will also after the Offering indirectly still hold a
    significant portion of the share capital of the Company which will enable him to exercise
    significant control over the Company and could subject him to conflicts of interest.

·   The Company is a holding company whose liquidity depends upon having access to the liquid
    funds of its operating subsidiary located in China.

·   Haikui does not have insurance coverage customary in more economically developed
    countries for a business of Haikui’s size.

·   Haikui has in the past enjoyed tax benefits in China which since 2012 do not apply anymore.

·   Changes in PRC tax laws may have an impact on Haikui's net profits.

·   The Company and Haikui Singapore may be treated as resident enterprises for PRC tax
    purposes under the new PRC enterprise income tax laws and therefore be subject to PRC
    taxation. In this case, the Company and/or Haikui Singapore might be subject to PRC
    enterprise income tax at the rate of 25% on their worldwide income, the Company might be
    obliged to withhold 10% PRC withholding tax on the gross amount of dividends paid to
    shareholders who are non-PRC tax residents, and gains realized on the transfer of shares by
    non-PRC resident investors might be subject to PRC withholding tax of between 10% to
    20%.




                                               13
Risks related to the political, social and legal environment of the People’s Republic of
China

·    Haikui is subject to general risks relating to business operations in China which are generally
     subject to greater economical, political, and legal risks than operations in more developed
     economies.

·    The Chinese "Provisions on the Acquisition of Domestic Enterprises by Foreign Investors"
     (the "M&A Provisions") may have a material adverse effect on Haikui. The M&A Provisions
     provide that offshore special purpose vehicles established by Chinese legal entities and/or
     individuals for indirect overseas listings and that directly or indirectly controls Chinese
     companies must obtain the approval of the CSRC prior to the listing. The responsible Chinese
     authorities might consider the various steps relating to Haikui’s corporate restructuring that
     took place since 2007 as one combined transaction which may have required approval. In
     this case, profits of Fujian Haikui may be prevented from being distributed and/or loans
     could be prevented from being granted by the Company to Fujian Haikui.

·    State Administration of Foreign Exchange (SAFE) regulations relating to offshore investments
     by PRC residents or passport holders may adversely affect Haikui’s business operations and
     financing alternatives. These regulations require PRC residents to register with and receive
     approval from the responsible Chinese authorities for investments in offshore special purpose
     vehicle companies. The failure or inability of any of the Company’s direct or indirect PRC
     shareholders to make any required registrations or obtain any required approvals could
     subject Haikui to fines and other legal sanctions, restrict the Company’s investments in PRC
     companies and/or limit Haikui’s ability to pay dividends.

·    PRC regulations pertaining to loans and direct capital investments by offshore parent
     companies to PRC entities may delay or prevent Haikui from using the proceeds of this
     Offering. Any loans or other capital contributions by an offshore parent company to a PRC
     subsidiary are subject to registration and/or approval requirements in the PRC. If Haikui fails
     to receive such registrations or approvals, Haikui's ability to use the proceeds from the
     Offering to fund and expand its operational business in China could be adversely affected.

·    Economic instability in China could adversely affect Haikui’s business.

·    A destabilization of the political system could threaten China’s economic liberalization.

·    Health epidemics and outbreaks of contagious diseases, including avian influenza, severe
     acute respiratory syndrome (SARS) or swine flu, could materially and adversely affect the
     Chinese economy.

·    The PRC legal system and national taxation laws contain inherent uncertainties and
     inconsistencies.

·    The judiciary’s lack of independence in PRC and limited experience and the difficulty of
     enforcing court decisions and governmental discretion in enforcing court orders could
     prevent Haikui from obtaining effective remedies in a court proceeding.

·    There are difficulties in seeking recognition and enforcement of foreign judgments in China.

·    Restrictions might be imposed on foreign investments in PRC companies.

·    Changes in labour law and policy in the PRC could affect the results of operations.

Risks related to the industry and statistical data

·    The accuracy of industry and statistical data included in the Prospectus may not be reliable.

Risks related to the Offering

                                                14
·   Public trading in the Company’s shares might not develop.

·   A volatile stock exchange price for the shares might develop.

·   The sale of shares by the Existing Shareholders could affect the share price.

·   There are risks for short sales before the delivery of the shares.

·   In particular, if the Offering is not implemented in full, the Offering will be relatively small
    and the Company's free float after the listing will be relatively low, which may have an
    adverse effect on the tradability of the shares and on the shareholder structure of the
    Company.

·   Negative publicity on listed PRC companies could have an adverse effect on the price of the
    Company's shares.




                                               15
                            ZUSAMMENFASSUNG DES PROSPEKTS

Die folgende Zusammenfassung ist als Einführung zu diesem Prospekt zu verstehen und sollte in
Verbindung mit den ausführlicheren Informationen gelesen werden, die sich an anderer Stelle in
diesem Prospekt finden. Anleger sollten jede Entscheidung zur Anlage in Angebotsaktien auf die
Prüfung des gesamten Prospekts stützen.

Die Haikui Seafood AG Hamburg, Deutschland (die "Gesellschaft" oder "Haikui Seafood AG"
und gemeinsam mit ihren unmittelbaren und mittelbaren Tochtergesellschaften "Haikui" oder
"Haikui Gruppe"), biw Bank für Investments und Wertpapiere AG, Willich, Deutschland ("biw
AG"), und Pareto Securities AS, Oslo, Norwegen ("Pareto"), übernehmen im Sinne von § 5 Abs. 2
Satz 3 Nr. 4 Wertpapierprospektgesetz die Verantwortung für diese Zusammenfassung,
einschließlich der deutschen Übersetzung. Sie können haftbar gemacht werden, jedoch nur für den
Fall, dass die Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie
zusammen mit anderen Teilen des Prospekts gelesen wird.

Für den Fall, dass vor einem Gericht Ansprüche aufgrund der in diesem Prospekt enthaltenen
Informationen geltend gemacht werden, könnte der als Kläger auftretende Anleger in Anwendung
einzelstaatlicher Rechtsvorschriften der Staaten des Europäischen Wirtschaftsraumes die Kosten
für die Übersetzung des Prospekts vor Prozessbeginn zu tragen haben.

Allgemeine Informationen zur Gesellschaft und ihrer Geschäftstätigkeit

Die Gesellschaft wurde durch notarielle Gründungsurkunde am 12. Oktober 2010 gegründet und
am 24. Februar 2011 beim Handelsregister des Amtsgericht Hamburg eingetragen.

Das operative Geschäft von Haikui wird ausschließlich von der Fujian Dongshan Haikui Aquatic
Products Group Co. Ltd ("Fuijian Haijui"), einer 100%-igen Tochtergesellschaft der Gesellschaft,
durchgeführt. Alle Anteile an der Fujian Haikui sind im Besitz der China Haikui Pte. Ltd. ("Haikui
Singapur"), einer Gesellschaft gegründet nach singapurischem Recht, deren einzige Aktionärin die
Haikui Seafood AG ist.

Um die Vermögens-, Finanz- und Ertragslage von Haikui historisch darzustellen, hat Haikui
konsolidierte Jahresabschlüsse der Haikui Singapur für die am 31. Dezember 2009, 31. Dezember
2010 und 31. Dezember 2011 endenden Geschäftsjahre nach IFRS (die "Historischen
Konsolidierten Abschlüsse") erstellt, denen Haikuis Finanzangaben, auf die in diesem Abschnitt
Bezug genommen wird, entnommen wurden.

Haikui ist ein etabliertes, Fische und Meeresfrüchte verarbeitendes Unternehmen. Es produziert
und verkauft verarbeitete und konservierte Fische und Meeresfrüchte für den chinesischen Markt
und für internationale Märkte. Haikuis Produkte werden aus einer großen Vielfalt an rohen Fischen
und Meeresfrüchten hergestellt, einschließlich Garnelen, Krebsen und verschiedenen Fischarten
sowie anderer Meeresfrüchte wie Schalentieren, Kopffüßer und Seeohren. Haikui verkauft Fische
und Meeresfrüchte, die eine erste Verarbeitung durchlaufen haben (Waschen, Zerteilen und
Schälen) als auch solche Fische und Meeresfrüchte, die einer weiteren Verarbeitung unterzogen
wurden, wie z. B. Kochen, Grillen, Würzen, Trocknen und/oder Panieren. Haikuis Produktportfolio
umfasst mehr als 100 verschiedene Produkte aus gefrorenen und konservierten Fischen und
Meeresfrüchten. In 2010 bzw. in 2011 betrug der Umsatzanteil von Produkten aus gefrorenen
Fischen und Meeresfrüchten 90,6% sowie 87,9% und der Umsatzanteil von Produkten aus
konservierten Fischen und Meeresfrüchten 9,4% sowie 12,1% des Gesamtumsatzes Haikuis.

Die rohen, zu verarbeitenden Fische und Meeresfrüchte werden von regionalen Zulieferern aus der
Nähe von Haikuis Verarbeitungsanlagen auf der Insel Dongshan in China bezogen. Die rohen
Fische und Meeresfrüchte, die für Haikuis Produkte verwendet werden, entstammen sowohl
Fischfang als auch Aquakulturen. Fischfang trug in 2010 mit 48,6% und in 2011 mit 59,3% zu
Haikuis Gesamtumsatz bei, Aquakulturen trugen mit 51,4% bzw. mit 40,7% zu Haikuis
Gesamtumsatz bei. Im Jahre 2011 konnte Haikui auf 84 Lieferanten von rohen Fischen und
Meeresfrüchten zurückgreifen, die Aquakulturfarmen oder Betreiber von Hochseefischereien waren.

                                               16
Zum 31. Dezember 2011 hat Haikui mit 61 der Lieferanten Rahmenvereinbarungen über die
Belieferung mit rohen Fischen und Meeresfrüchten für Haikuis Produkte abgeschlossen. Diese
Rahmenvereinbarungen schaffen für Haikui eine solide Belieferungsbasis, einschließlich
Vorzugsrechten hinsichtlich des Kaufs der rohen Fische und Meeresfrüchte und Preisabschlägen.

Zum 31. Dezember 2011 hatten Haikuis Verarbeitungsanlagen eine Gesamtverarbeitungskapazität
von ungefähr 28.543 Tonnen (Output) pro Jahr. Haikuis Verarbeitungsanlagen befinden sich auf
der Insel Dongshan, Zhangzhou, in der Fujian Provinz in China. Dongshan Island liegt zwischen
dem Ostchinesischen und dem Südchinesischen Meer, zwei der drei Hauptzentren für marine
Ressourcen in China, und ermöglicht einen direkten Zugang zu reichhaltigen und nachhaltigen
marinen Ressourcen. Die Region Dongshan liegt darüber hinaus in unmittelbarer Nähe zu Taiwan,
einer der ausländischen Hauptmärkte von Haikui. In der Nähe von Haikuis Verarbeitungsanlagen in
Dongshan befindet sich derzeit eine Sonderwirtschaftszone für die Fischfang- und Fische und
Meeresfrüchte verarbeitende Industrie im Aufbau, die Dongshan National Seafood Economic
Development Zone (die "Dongshan Sonderwirtschaftszone" oder "Zone"), von der Haikui
annimmt, dass sie bis Ende 2013 voll in Betrieb genommen wird. Haikui erwartet, dass die
Dongshan Sonderwirtschaftszone der Gesellschaft verschiedene Vorteile durch Erweiterung der
Infrastruktur verschaffen wird, unter anderem einen neuen Hafen für internationale
Fischfangschiffe, wodurch eine größere Menge und Vielfalt an rohen Fischen und Meeresfrüchten
verfügbar wird.

Haikuis Kunden sind Zwischenhändler (einschließlich großer Verarbeitungsunternehmen) in China
und im Ausland, von denen die meisten der internationalen Kunden in Asien, Europa und den
Vereinigten Staaten von Amerika ansässig sind. Die von Haikuis in China verkauften Produkte
werden unter Haikuis eigener Marke "Haikui" oder unter Drittmarken vertrieben, während Verkäufe
in internationalen Märkten grundsätzlich unter Drittmarken stattfinden.

Haikui verfügt über drei Distributionskanäle: (i) ausländische Zwischenhändler, deren Anteil an
Haikuis Gesamtumsatz in 2010 68,4% und in 2011 68,1% ausmachte, (ii) inländische
Zwischenhändler, deren Anteil an Haikuis Gesamtumsatz in 2010 31,4% und in 2011 31,7%
betrug und (iii) Direktverkäufe, deren Anteil an Haikuis Gesamtumsatz in 2010 0,1% und in 2011
0,2% ausmachte. Bezogen auf die Verkäufe in China erhält Haikui einen Großteil seiner
Kundenaufträge direkt von chinesischen Zwischenhändlern. Bezogen auf die internationalen
Verkäufe, unter Ausnahme anderer asiatischer Länder, erhält Haikui die meisten seiner
Kundenaufträge durch Einkaufsmakler, die wiederum ihre Kaufaufträge direkt von internationalen
Zwischenhändlern mit Bedarf an Produkten aus Fischen und Meeresfrüchten erhalten. Eine
wichtige Säule von Haikuis Wachstumsstrategie ist die Ausweitung der Verkäufe seiner Produkte
unter eigener Marke in China.

Haikui verzeichnete im Berichtszeitraum ein erhebliches Umsatzwachstum. Haikuis Gesamtumsatz
stieg von TEUR 94.544 im Jahr 2009 auf TEUR 126.219 im Jahr 2010 und auf TEUR 152.116 im
Jahr 2011, was einer durchschnittlichen jährlichen Wachstumsrate von 26,8% während dieses
Zeitraums entspricht. Haikuis Nettogewinn stieg von TEUR 18.015 im Jahr 2009 auf TEUR 23.357
im Jahr 2010 und auf TEUR 28.333 im Jahr 2011, was einer durchschnittlichen jährlichen
Wachstumsrate von 25,4% während dieses Zeitraums entspricht.

Haikui beschäftigte im Geschäftsjahr 2011 durchschnittlich 2.194 Arbeitnehmer einschließlich
1.589 Zeitarbeitern.

Stärken

Die Gesellschaft sieht die nachfolgend dargestellten Wettbewerbsstärken        als   wesentliche
Einflussfaktoren für ihr nachhaltiges künftiges Wachstum an:

·    Ausgewiesene Erfolgsbilanz und Anerkennung als Hersteller von qualitativ hochwertigen
     Produkten aus Fischen und Meeresfrüchten am Markt.

·    Große finanzielle Leistungskraft und hohe Profitabilität

                                                17
·     Große Verarbeitungskapazitäten sowie Verarbeitungsanlagen an strategisch wichtigen
      Standorten

·     Enge Kooperation mit Lieferanten für rohe Fische und Meeresfrüchte

·     Breites Produktportfolio und Fertigkeiten in der Produktentwicklung

·     Erfahrenes und engagiertes Managementteam.

Strategie

Haikui verfolgt die nachfolgend dargestellten strategischen Ziele:

·     Ausweitung des Vertriebsnetzes und Stärkung der Marktpräsenz in China und im Ausland

·     Steigerung des Markenimages und des Ansehens

·     Ausweitung der Verarbeitungskapazitäten

·     Ausweitung der Zuliefererbasis durch Gewinn neuer und Vertiefung der Zusammenarbeit mit
      bestehenden Lieferanten

·     Vergrößerung der Produktpalette

·     Weiterhin Fokussierung von Forschung und Produktentwicklungen sowie Ausweitung der
      Fachkenntnis von Haikui und des technischen Know-Hows.

Weitere wesentliche Angaben betreffend die Gesellschaft und die Haikui Gruppe

Die Gesellschaft ist eine nach deutschem Recht gegründete Aktiengesellschaft mit Satzungssitz in
Hamburg. Die Gesellschaft ist im Handelsregister des Amtsgerichts Hamburg unter HRB 117277
eingetragen. Unternehmensgegenstand der Gesellschaft ist die Verarbeitung und der Verkauf von
Nahrungsmitteln für Mensch und Tier, insbesondere von Fischen und anderen Meeresfrüchten,
durch die Gesellschaft selbst oder mittelbar durch Tochter- und/oder Beteiligungsunternehmen und
aller damit zusammenhängender Geschäfte sowie die Erbringung von Dienstleistungen für Tochter-
und/oder Beteiligungsunternehmen. Die Gesellschaft hält 100% der Anteile an der China Haikui
Pte. Ltd. ("Haikui Singapur"), einer Gesellschaft nach dem Recht Singapurs, welche als
Zwischenholding fungiert und 100% der Anteile an der Fujian Dongshan Haikui Aquatic Products
Group Co. Ltd ("Fujian Haikui") hält, einer Gesellschaft nach chinesischem Recht, welche die
operative Gesellschaft der Haikui Gruppe ist.

Vorstand                     Herr Chen Zhenkui, Herr Huang Zhenping, Herr Alan Gey

Aufsichtsrat                 Herr Dr. Klaus Vieten, Herr Dr. Rainer Simon, Herr Chan Hock Eng

Grundkapital (vor            Euro ("EUR") 10.000.000 unterteilt in 10.000.000 auf den Inhaber
Durchführung des             lautende Stammaktien ohne Nennbetrag (Inhaber-Stückaktien) mit
Angebots)                    einem anteiligen Betrag am Grundkapital von jeweils EUR 1,00.

Abschlussprüfer              Crowe Horwath Deutschland GmbH, Wirtschaftsprüfungsgesellschaft,
                             Pariser Platz 7, 70173 Stuttgart ("Crowe Horwath")

Altaktionäre (vor            Die Aktionäre der Haikui Seafood AG unmittelbar vor der
Durchführung des             Durchführung des Angebots (die "Altaktionäre") sind in der
Angebots)                    nachfolgenden Tabelle dargestellt:




                                                18
Altaktionär                                                Zahl der Aktien           Anteil am Grundkapital

Haida Holdings Pte. Ltd.(1)                                     5.656.588                               56,57%
Mega Bond International Limited(2)                              3.542.918                               35,43%
Palm Cove International Limited(3)                                300.247                                3,00%
Praise Ocean International Limited(4)                             300.247                                3,00%
Everswift Holdings Limited(5)                                     180.000                                1,80%
Alan Gey(6)                                                        20.000                                0,20%
Total(7)                                                      10.000.000                              100,00%



1)    Haida Holdings Pte. Ltd. ("Haida Holdings"): Eine Gesellschaft nach dem Recht Singapurs, deren
      Alleingesellschafter der CEO der Gesellschaft, Herr Chen Zhenkui ist.

2)    Mega Bond International Limited ("Mega Bond"): Eine Gesellschaft nach dem Recht der Britischen
      Jungferninseln, deren Anteile von zwei Investmentfonds, Zana China Fund L.P ("ZCF") und ASB CMIA
      China Growth I L.P. ("ACCG1"), sowie der Pine Universe Investments Limited, deren
      Alleingesellschafterin Frau Sophy Hu, einer nicht mit Haikui verbundene Person, gehalten werden.

3)    Palm Cove International Limited ("Palm Cove"): Eine Gesellschaft nach dem Recht Samoas, deren
      Alleingesellschafter Herr Tang Hui ist.

4)    Praise Ocean International Limited ("Praise Ocean"): Eine Gesellschaft nach dem Recht der Britischen
      Jungferninseln, deren Alleingesellschafter der COO der Gesellschaft, Herr Huang Zhenping, ist.

5)    Everswift Holdings Limited ("Everswift"): Eine Gesellschaft nach           dem    Recht   der   Britischen
      Jungferninseln, deren Anteile von ZCF and ACCG1 gehalten werden.

6)    Mr. Alan Gey ("Mr. Alan Gey"): Der Finanzvorstand der Gesellschaft, ein Staatsbürger Singapurs.

7)    Mit Anteilskaufvertrag vom 19. April 2012 hat sich Haida Holdings gegenüber Herrn She Dongpeng,
      einem Staatsbürger der Volksrepublik China, verpflichtet, Herrn She Dongpeng 300.000 Aktien an der
      Gesellschaft, entsprechend 3% des gegenwärtigen Grundkapitals, zu verkaufen. Die Übertragung der
      Aktien wird unmittelbar nach Eintragung der Kapitalerhöhung der Gesellschaft für den Börsengang im
      Handelsregister stattfinden.

Sitz und Geschäftsjahr           Der Satzungssitz der Gesellschaft ist Hamburg. Geschäftsanschrift ist
                                 Haikui Seafood AG, c/o Ashurst LLP, OpernTurm, Bockenheimer
                                 Landstraße 2-4, 60306 Frankfurt am Main. Geschäftsjahr ist das
                                 Kalenderjahr. Das erste Geschäftsjahr war ein Rumpfgeschäftsjahr.

Mitarbeiter                      Haikui beschäftigte über das gesamte Geschäftsjahr 2011 im
                                 Durchschnitt 2.194 Arbeitnehmer einschließlich durchschnittlich 1.589
                                 Zeitarbeitern.* Bis zum Datum dieses Prospektes hat sich die Zahl
                                 von festangestellten Mitarbeiter nicht wesentlich verändert. Die
                                 Gesellschaft selbst beschäftigt neben ihren Organen keine Mitarbeiter.

                                 * Basierend auf den Historischen Konsolidierten Abschlüssen.




                                                      19
Zusammenfassung des Angebots

Angebot               Das Angebot besteht aus einem öffentlichen Angebot in der
                      Bundesrepublik      Deutschland      und     Luxemburg     sowie
                      Privatplatzierungen an institutionelle Investoren außerhalb der
                      Bundesrepublik Deutschland, Luxemburg und den Vereinigten
                      Staaten.

                      Gegenstand des Angebots sind 1.725.000 auf den Inhaber lautende
                      Stammaktien ohne Nennbetrag (Inhaber-Stückaktien) der Haikui
                      Seafood AG mit einem anteiligen Betrag am Grundkapital von jeweils
                      EUR 1,00 und mit voller Dividendenberechtigung für das
                      Geschäftsjahr 2012 (die "Angebotsaktien"), einschließlich

                      (i) 1.500.000 auf den Inhaber lautende Stammaktien ohne
                      Nennbetrag (Inhaber-Stückaktien) aus einer am 16. März 2012 von
                      einer    außerordentlichen    Hauptversammlung     beschlossenen
                      Kapitalerhöhung gegen Bareinlagen ("Neue Aktien") und (ii)
                      225.000 auf den Inhaber lautende Stammaktien ohne Nennbetrag aus
                      dem Eigentum der Greenshoe Aktionäre im Hinblick auf eine
                      eventuelle Mehrzuteilung ("Greenshoe-Aktien").

Greenshoe Aktionäre   Mega Bond International Limited.

                      Palm Cove International Limited.

Angebotsfrist         Die Angebotsfrist beginnt am 24. April 2012 und endet voraussichtlich
                      am 10. Mai 2012.

                      Kaufangebote sind bis zum Ende der Angebotsfrist frei widerruflich.

                      Am letzten Tag der Angebotsfrist können Privatanleger Kaufangebote
                      bis 12:00 Uhr Mittags (MESZ) und institutionelle Anleger bis 16:00
                      Uhr (MESZ) abgeben.

Preisspanne und       Die Preisspanne, innerhalb derer Kaufangebote abgegeben werden
Platzierungspreis     können, beträgt EUR 10,00 bis EUR 13,00 je Angebotsaktie.

                      Der Platzierungspreis je Angebotsaktie wird von der Gesellschaft und
                      den Bookrunners anhand des im Bookbuilding-Verfahren erstellten
                      Orderbuchs gemeinsam festgelegt. Der Platzierungspreis und die
                      tatsächliche   Anzahl    der  an    die    Anleger   auszugebenden
                      Angebotsaktien, d.h. das Platzierungsvolumen, wird im Anschluss
                      hieran in Form einer Ad-hoc-Mitteilung über ein elektronisch
                      betriebenes Informationssystem und auf der Internetseite der
                      Gesellschaft (www.haikui-seafood.com) veröffentlicht. Insbesondere
                      für den Fall, dass das Platzierungsvolumen nicht ausreicht, um
                      sämtliche Kaufaufträge zum Platzierungspreis zu bedienen, behalten
                      sich die Bookrunners vor, Kaufangebote nicht oder nur teilweise
                      anzunehmen.




                                         20
Änderungen der        Die Gesellschaft behält sich gemeinsam mit den Bookrunners das
Angebotsbedingungen   Recht vor, die Anzahl der Angebotsaktien zu verringern, die obere
                      und/oder untere Begrenzung der Preisspanne zu ermäßigen oder zu
                      erhöhen und/oder den Angebotszeitraum zu verlängern oder zu
                      verkürzen. Im Falle einer Änderung der Angebotsbedingungen wird
                      die Änderung als Mitteilung über elektronische Medien wie Reuters
                      oder Bloomberg sowie auf der Internetseite der Gesellschaft
                      (www.haikui-seafood.com)       und,   soweit    dies   nach   dem
                      Wertpapierhandelsgesetz erforderlich ist, als Ad-hoc-Mitteilung
                      und/oder soweit dies nach dem Wertpapierprospektgesetz erforderlich
                      ist, als Nachtrag zu diesem Prospekt veröffentlicht werden. Eine
                      individuelle Unterrichtung der Anleger, die Kaufangebote abgegeben
                      haben, erfolgt nicht.

Lieferung und         Die Angebotsaktien werden voraussichtlich einen Bankarbeitstag nach
Abrechnung der        Börsennotierung der Aktien gegen Zahlung des Platzierungspreises
Angebotsaktien        geliefert.

Mehrzuteilung/        Im Zusammenhang mit der Platzierung der Neuen Aktien können im
Stabilisierung        rechtlich zulässigen Umfang Mehrzuteilungen und so genannte
                      Stabilisierungsmaßnahmen vorgenommen werden, um den Börsen-
                      oder den Marktpreis der Aktien der Gesellschaft zu unterstützen und
                      einen         bestehenden       Verkaufsdruck        auszugleichen.
                      Stabilisierungsmaßnahmen können mit dem Zeitpunkt der Aufnahme
                      der Börsennotierung der Aktien der Gesellschaft eingeleitet werden
                      und müssen spätestens am darauf folgenden 30. Kalendertag
                      abgeschlossen werden.

Greenshoe-Option      Die Greenshoe Aktionäre haben der biw AG – BankM 225.000 auf den
                      Inhaber lautende Stammaktien ohne Nennbetrag (die "Greenshoe
                      Aktien") im Rahmen einer so genannten Wertpapierleihe zur
                      Verfügung gestellt, um eine eventuelle Mehrzuteilung zu ermöglichen.

                      Im Hinblick auf die Rückführung dieser Wertpapierleihe haben die
                      Greenshoe Aktionäre der biw AG - BankM die Option eingeräumt, die
                      Greenshoe Aktien zum Platzierungspreis abzüglich vereinbarter
                      Provisionen zu erwerben (die "Greenshoe Option"). Diese
                      Greenshoe Option erlischt 30 Kalendertage nach Aufnahme der
                      Börsennotierung der Aktien.

Allgemeine            Die Gesellschaft, die Greenshoe Aktionäre und die Bookrunners
Zuteilungskriterien   werden die "Grundsätze für die Zuteilung von Aktienemissionen an
                      Privatanleger" beachten, die am 7. Juni 2000 von der
                      Börsensachverständigenkommission beim Bundesministerium der
                      Finanzen herausgegeben wurden.

Konsortialbanken      biw Bank für Investments und Wertpapiere AG, Hausbroicher Str.
                      222, 47877 Willich, Deutschland ("biw AG").

                      Pareto Securities AS, Dronning Mauds gt. 3, P.O. Box 1411 Vika, N-
                      0115 Oslo, Norwegen ("Pareto")

Joint Lead Managers   BankM – Repräsentanz der biw Bank für Investments und
und Bookrunners       Wertpapiere AG, Mainzer Landstraße 61, 60329 Frankfurt am Main,
                      Deutschland ("biw AG - BankM"). biw AG - BankM ist der
                      unselbständige Investmentbankingbereich der biw Bank für
                      Investments und Wertpapiere AG, ist allerdings keine von der biw
                      Bank für Investments und Wertpapiere AG separate juristische

                                        21
                         Person.

                         Pareto Securities AS, Dronning Mauds gt. 3, P.O. Box 1411 Vika, N-
                         0115 Oslo, Norwegen ("Pareto")

Manager                  biw AG, biw AG – BankM, Pareto

Selling Agents           Cortal Consors S.A, DAB bank AG, flatex AG, ING-DiBa AG, S Broker
                         AG & Co. KG, ViTrade AG.


Zulassung       zum      Ein Antrag auf Zulassung sämtlicher Aktien der Gesellschaft -
Börsenhandel und zur     einschließlich der Neuen Aktien - zum Regulierten Markt (Prime
Börsennotierung          Standard) an der Frankfurter Wertpapierbörse wird voraussichtlich am
                         30. April 2012 eingereicht, die Börsenzulassung wird voraussichtlich
                         frühestens einen Arbeitstag nach Ablauf der Angebotsfrist erfolgen.
                         Handelsbeginn wird voraussichtlich am ersten Börsenhandelstag nach
                         dem Tag der Zulassung sein.

Vorzeitige Beendigung    Der Übernahmevertrag sieht vor, dass die Manager den
des Angebots             Übernahmevertrag bei Vorliegen von bestimmten Umständen
                         kündigen können. Dies ist auch noch nach Zuteilung und Notierung
                         der Aktien bis zur Lieferung und Abrechnung der Angebotsaktien
                         möglich.

                         Im Falle einer Kündigung des Übernahmevertrags erfolgt kein
                         Angebot. In einem solchen Falle werden Zuteilungen von
                         Angebotsaktien an die Investoren für ungültig erklärt und die
                         Investoren haben keinen Lieferungsanspruch. Ansprüche aus
                         gezahlten     Zeichnungsgebühren    und   den    Investoren    im
                         Zusammenhang mit der Zeichnung entstandene Kosten werden
                         ausschließlich nach Maßgabe der rechtlichen Verhältnisse zwischen
                         dem jeweiligen Investor und der Institution, bei der dieser ein
                         Kaufangebot abgegeben hat, geregelt.

Marktschutzvereinba-     Die Gesellschaft hat sich gegenüber den Managern verpflichtet,
rung/Veräußerungsbe-     innerhalb der ersten sechs Monate nach Notierung der Aktien der
schränkungen    (Lock-   Gesellschaft an der Frankfurter Wertpapierbörse ohne die
up)                      Zustimmung der Manager:

                         ·    keine Kapitalerhöhung aus genehmigtem Kapital anzukündigen
                              oder durchzuführen,

                         ·    der    Hauptversammlung      keine      Kapitalerhöhung    zur
                              Beschlussfassung vorzuschlagen,

                         ·    weder (a) direkt noch indirekt Aktien oder andere Wertpapiere
                              der Gesellschaft, die in Aktien der Gesellschaft umgewandelt
                              werden können oder dafür eingetauscht werden können oder
                              ein Recht zum Erwerb von Aktien der Gesellschaft verkörpern,
                              auszugeben, zu kaufen, zu verkaufen, anzubieten, sich zu deren
                              Verkauf   zu    verpflichten,  zu   vermarkten,    anderweitig
                              auszugeben oder ein darauf bezogenes Angebot bekannt zu
                              machen, noch (b) Geschäfte (einschließlich Derivativgeschäfte)
                              abzuschließen oder durchzuführen, die wirtschaftlich dem Kauf
                              oder Verkauf von Aktien der Gesellschaft entsprechen, oder (c)
                              Geschäfte im Sinne der vorangehenden Bestimmungen (a)
                              und/oder (b) direkt oder indirekt zu veranlassen oder diesen

                                           22
                                zuzustimmen.

                           Haida Holdings, Praise Ocean und Hr. Alan Grey haben sich
                           gegenüber den Managern verpflichtet, innerhalb der ersten zwölf
                           Monate nach Notierung der Aktien der Gesellschaft an der Frankfurter
                           Wertpapierbörse:

                           ·    keine Aktien der Gesellschaft oder andere Wertpapiere, die in
                                Aktien der Gesellschaft umgewandelt, ausgeübt oder dafür
                                eingetauscht werden können, direkt oder indirekt anzubieten,
                                zu verpfänden, zuzuteilen, zu verkaufen, sich zu deren Verkauf
                                zu verpflichten oder sich hinsichtlich eines Verkaufs oder einer
                                Übertragung bereit zu erklären, eine Option zu deren Erwerb zu
                                verkaufen oder sich zu dem Verkauf der Option zu verpflichten,
                                eine Option zu deren Veräußerung zu kaufen, eine Option, ein
                                Recht oder die Befugnis zu deren Erwerb zu gewähren oder die
                                Wertpapiere in anderer Weise zu übereignen oder über diese in
                                anderer Weise zu verfügen,

                           ·    keine Swapgeschäfte oder andere Geschäfte abzuschließen, mit
                                denen das wirtschaftliche Risiko verbunden mit dem Besitz von
                                Aktien der Gesellschaft ganz oder teilweise auf einen Dritten
                                übertragen wird, unabhängig davon, ob die in den obigen
                                Klauseln beschriebenen Geschäfte durch die Lieferung von
                                Aktien der Gesellschaft, anderer Wertpapiere, Barzahlung oder
                                sonstiger Gegenleistung bedient werden,

                           ·    keine Registrierung von Rechten in Bezug auf Aktien der
                                Gesellschaft oder andere Wertpapiere, die in Aktien der
                                Gesellschaft umgewandelt, ausgeübt oder dafür eingetauscht
                                werden         können,       nach        US-amerikanischen
                                Wertpapierbestimmungen zu fordern oder durchzuführen, oder

                           ·    ohne der schriftlichen Zustimmung der Konsortialbanken und
                                der Joint-Lead-Manager keine Kapitalerhöhung der Gesellschaft
                                vorzuschlagen, zugunsten einer solchen vorgeschlagenen
                                Erhöhung zu stimmen oder andererseits eine vorgeschlagene
                                Kapitalerhöhung der Gesellschaft zu unterstützen.

                           Mega Bond, Everswift, Palm Cove und Herr She Dongpeng haben sich
                           für den gleichen Zeitraum verpflichtet, keine der oben genannten
                           Handlungen ohne vorherige Zustimmung der Manager vorzunehmen.
                           Palm Cove und Herr She Dongpeng sind pro rataisch automatisch für
                           eine solche Zahl ihrer Aktien von ihrer Lock-up Verpflichtung befreit,
                           falls und soweit die Neuen Aktien, die im Zuge des Angebots verkauft
                           wurden, nach dem Angebot weniger als 11% des gesamten
                           Aktienkapitals der Gesellschaft ausmachen würden.

                           Diese Beschränkungen gelten nicht für den Verkauf der
                           Angebotsaktien sowie für Aktien, die nach dem Angebot über die
                           Börse erworben werden.

Kosten               des   Da sich die Kosten des Börsengangs nach der gesamten Anzahl der
Börsengangs    für   die   platzierten Angebotsaktien und dem Platzierungspreis, auf deren
Gesellschaft               Grundlage der Provisionsbetrag bestimmt wird, richten, können die
                           Kosten des Börsengangs von der Gesellschaft zu diesem Zeitpunkt
                           nicht zuverlässig berechnet werden. Auf Basis der Preisspanne, unter
                           der Annahme, dass sämtliche Angebotsaktien platziert werden und

                                              23
                           dass die Greenshoe Option vollumfänglich ausgeübt wird, schätzt die
                           Gesellschaft, dass sich die gesamten Kosten des Angebots
                           (einschließlich der Provisionen für die Konsortialbanken) auf
                           insgesamt zwischen EUR 1,8 Mio. und EUR 2,1 Mio. belaufen werden,
                           wovon zwischen EUR 1,7 Mio. und EUR 2,0 Mio. von der Gesellschaft
                           zu tragen sind und der verbleibende Betrag von den Greenshoe
                           Aktionären zu tragen ist.

Verwendung          des    Haikui beabsichtigt, den ihr zufließenden Nettoemissionserlös aus
Emissionserlöses           dem Verkauf der Neuen Aktien:

                           ·     ca. 25% - 45% für allgemeine Betriebsmittelzwecke und

                           ·     ca. 55% - 75% zur Finanzierung bestimmter Investitionen,
                                 insbesondere der teilweisen Finanzierung einer geplanten neuen
                                 Fabrik in der Nähe der bestehenden Fabriken zu verwenden.

Wertpapier-                A1J H3F
Kennnummer (WKN)

International Securities   DE000A1JH3F9
Identification Number
(ISIN)

Ticker Symbol              H8K




                                             24
Ausgewählte Finanzangaben

Die Gesellschaft wurde durch notarielle Gründungsurkunde am 12. Oktober 2010 gegründet und
entstand durch Eintragung im Handelsregister des Amtsgerichts Hamburg am 24. Februar 2011.

Das operative Geschäft von Haikui wird ausschließlich von der Fujian Dongshan Haikui Aquatic
Products Group Co. Ltd. ("Fujian Haikui") ausgeführt, einer indirekten 100%-igen
Tochtergesellschaft der Gesellschaft. Alle Anteile an der Fujian Haikui werden von der China Haikui
Pte. Ltd. ("Haikui Singapur") gehalten, einer Gesellschaft nach singapurischem Recht, deren
Alleingesellschafterin die Haikui Seafood AG ist.

Um die Vermögens-, Finanz- und Ertragslage von Haikui historisch darzustellen, hat Haikui
konsolidierte Jahresabschlüsse der Haikui Singapur für die am 31. Dezember 2009, 31. Dezember
2010 und 31. Dezember 2011 endenden Geschäftsjahre nach IFRS (die "Historischen
Konsolidierten Abschlüsse") erstellt. Die Historischen Konsolidierten Abschlüsse wurden von
Haikui für das Angebot erstellt. Der Zweck dieser Finanzangaben besteht darin, Investoren eine
bessere Vergleichbarkeit der Entwicklung der Vermögens-, Finanz- und Ertragslage von Haikui in
den letzten drei Jahren zu ermöglichen.

Darüber hinaus hat Haikui einen konsolidierten Jahresabschluss nach IFRS für die Gesellschaft für
das Rumpfgeschäftsjahr vom 24. Februar 2011 bis zum 31. Dezember 2011 (der "Konsolidierte
AG Abschluss"), sowie einen Jahresabschluss nach HGB für die Gesellschaft für das
Rumpfgeschäftsjahr vom 24. Februar 2011 bis zum 31. Dezember 2011 (der "AG
Einzelabschluss") erstellt.

Die Historischen Konsolidierten Abschlüsse, der Konsolidierte AG Abschluss sowie der AG
Einzelabschluss wurden von Crowe Horwarth Deutschland GmbH, Wirtschaftsprüfungsgesellschaft,
Pariser Platz 7, 70173 Stuttgart ("Crowe Horwath") geprüft.

Haikuis ausgewählte Finanzangaben für die am 31. Dezember 2009, 31. Dezember 2010 und
31. Dezember 2011 endenden Geschäftsjahre, die in diesem Abschnitt enthalten sind, wurden den
geprüften Historischen Konsolidierten Abschlüssen entnommen, soweit nicht ausdrücklich anders
angegeben.




                                                25
Die folgenden Zahlenangaben wurden nach anerkannten Grundsätzen gerundet. Additionen der
Zahlenangaben in einer Tabelle können daher zu anderen als den ebenfalls in der Tabelle
dargestellten Summen führen.

                                                  2009                   2010                   2011                  2011
                                                                                                                (24.Feb – 31.Dez)9
Ausgewählte Angaben                            EUR                    EUR                  EUR                    EUR
aus der Gewinn- und                          Tausend      %        Tausend       %       Tausend        %       Tausend      %
Verlustrechnung                                                          (geprüft)
Umsatzerlöse                                   94.544      100%      126.219     100%       152.116      100%    132.987    100,0%
Herstellungskosten                           (72.524)     76,7%     (96.360)    76,4%     (114.203)     75.0%   (99.547)     74,9%
Bruttoergebnis                                22.020     23,3%       29.859    23,6%        37,913     24,9%     33.440     25,1%
Sonstige Erträge                                  497      0,5%           617     0,5%           285     0,2%         272     0,2%
Aufwendungen für Vertrieb                       (778)      0,8%         (983)     0,8%       (1.596)     1,0%     (1.439)     1,1%
Verwaltungsaufwand                            (1.773)      1,9%       (1.696)     1,3%       (2.582)     1,7%     (2.197)     1,7%
Sonstige betriebliche Aufwendungen               (44)      0,0%          (41)     0,0%          (48)     0,0%     (1.518)     1,1%
Ergebnis aus Geschäftstätigkeit                19.922     21,1%        27.756   22,0%       33.972     22,3%     28.558      21,5%
Finanzielle   Aufwendungen      /Erträge,
netto                                             219      0,2%     (1.342)     1,1%        (1.613)      1.1%    (1.389)       1,0%
Ergebnis vor Ertragsteuer                     20.141     21,3%      26.414    20,9%         32.359     21,3%     27.169      20,4%
Ertragsteuern                                 (2.126)      2,2%     (3.057)     2,4%        (4.026)      2,6%    (3.570)       2,7%
Periodenüberschuss                            18.015     19,1%      23.357    18,5%         28.333     18,6%     23.599      17,7%

Ausgewählte Angaben           aus      der
Bilanz1
Summe Vermögenswerte                           57.330                88.449                124.916               123.336
Summe Verbindlichkeiten                         6.899                 8.167                  8.644                 8.702
Summe Eigenkapital                             50.431                80.282                116.272               114.664

Ausgewählte Angaben aus der
Kapitalflussrechnung
Cash flow aus Geschäftstätigkeit                7.281                11.550                  10.487                3.202
Cash flow aus Investitionstätigkeit           (1.984)              (11.605)                 (1.274)              (1.250)
Cash flow aus Finanzierungstätigkeit          (2.041)               (1.685)                   (281)                (279)

Zahlungsmittel zum Ende der Periode           14.918                14.951                  25.587               25.690




                                                                                                                   2011
                                                  2009                  2010                 2011           (24 Feb. – 31. Dez.)9
Weitere ausgewählte                           EUR Tausend10         EUR Tausend10        EUR Tausend10         EUR Tausend10
Finanzinformationen2
Bruttoergebnis-Marge                             23,3%                  23,6%                24,9%                 25,1%
EBITDA3                                          20.478                 28.449               35.423                29.770
EBITDA-Marge4                                    21,7%                  22,5%                23,3%                 22,4%
EBIT5                                            19.922                 27.735               33.972                28.558
EBIT-Marge6                                      21,1%                  22,0%                22,3%                 21,5%
Nettoergebnis-Marge7                             19,1%                  18,5%                18,6%                 17,7%
Zahl der Beschäftigten8                          1.804                  1.905                 2.194                2.311

1     Angaben zum Ende des jeweiligen Berichtszeitraums
2     "Weitere ausgewählte Finanzinformationen" sind nicht geprüft und wurden jeweils auf Grund von Informationen aus den
      geprüften Historischen Konsolidierten Abschlüssen und dem Konsolidierten AG Abschluss berechnet und entstammen
      Haikuis internen Geschäftsbüchern. Die Zahl der Beschäftigten ist geprüft.
3     EBITDA berechnet sich aus Periodenüberschuss abzüglich Zinserlöse zuzüglich Zinsaufwendung zuzüglich Steueraufwand
      abzüglich Steuervergütung zuzüglich/abzüglich Kapitalerträge zuzüglich Abschreibungen
4     EBITDA-Marge berechnet sich aus EBITDA dividiert durch Umsatzerlöse multipliziert mit 100
5     EBIT berechnet sich aus Periodenüberschuss abzüglich Zinserlöse zuzüglich Zinsaufwendungen zuzüglich Steueraufwand
      abzüglich Steuervergütung zuzüglich/abzüglich Kapitalerträge
6     EBIT geteilt durch Umsatzerlöse multipliziert mit 100
7     Periodenüberschuss geteilt durch Umsatzerlöse multipliziert mit 100
8     Durchschnittliche Beschäftigtenzahl für Berichtszeitraum, einschließlich Festangestellten und Zeitarbeitern
9     Entnommen bzw. basierend auf dem Konsolidierten AG Abschluss für das Rumpfgeschäftsjahr vom 24. Februar 2011 bis
      31. Dezember 2011
10    Außer Bruttoergebnis Marge, EBITDA Marge, EBIT Marge und Anzahl der Beschäftigten




                                                              26
Zusammenfassung der Risikofaktoren

Anleger sollten gewisse Risiken sorgfältig abwägen, bevor sie die Entscheidung zum Kauf der
Angebotsaktien der Gesellschaft treffen. Das Eintreten der mit diesen Risiken verbundenen
Ereignisse entweder einzeln oder zusammen mit anderen Umständen kann sich wesentlich
nachteilig auf die Geschäftstätigkeit von Haikui auswirken und die Vermögens-, Finanz- und
Ertragslage von Haikui erheblich beeinträchtigen. Es ist möglich, dass infolge eines mit dem
Eintreten dieser Risiken verbundenen Ereignisses der Börsenkurs der Aktien sinkt und Anleger ihr
investiertes Kapital ganz oder teilweise verlieren. Als Risikofaktoren gelten:

Risiken bezüglich der Geschäftstätigkeit von Haikui

·    Haikui ist von der fortlaufenden Belieferung mit frischen und qualitativ hochwertigen rohen
     Fischen und Meeresfrüchten durch seine Lieferanten abhängig und jede Lieferunterbrechung
     oder -einschränkung, die zu einem Engpass in der Belieferung oder zu Qualitätseinbußen der
     rohen Fische und Meeresfrüchte führt, würde die Vermögens-, Finanz- und Ertragslage
     erheblich nachteilig beeinflussen.

·    Behördliche Verordnungen und Vorschriften, die den Fischfang beschränken, könnten das
     Geschäft, die Vermögens-, Finanz- und Ertragslage von Haikui nachteilig beeinflussen.

·    Haikuis Profitabilität könnte durch Preissteigerungen bei rohen Fischen und Meeresfrüchten
     nachteilig beeinflusst werden.

·    Unterbrechungen oder Verzögerungen in der Belieferung mit Rohmaterialien durch
     Lieferanten an Haikui oder in der Lieferung der Produkte durch Haikui an seine Kunden
     können die Betriebskosten erheblich erhöhen und somit die Profitabilität nachteilig
     beeinflussen.

·    Der Ausbruch von Krankheiten oder Seuchen bei von Haikui verwendeten Fischen und
     Meeresfrüchten könnte das Geschäft sowie die Vermögens-, Finanz- und Ertragslage
     nachteilig beeinflussen.

·    Die Anfälligkeit von Haikuis Rohmaterialien und fertigen Produkten für Verderb oder
     Verschlechterung während des Verarbeitungs- oder Verkaufszyklusses könnte zu einer
     Verzögerung in der Verarbeitung oder Auslieferung der Produkte, niedrigeren Einnahmen und
     höheren Kosten führen.

·    Haikuis Geschäftstätigkeit ist kapitalintensiv und ein Fehlen notwendiger Betriebsmittel
     könnte einen nachteiligen Einfluss auf Haikuis Geschäftstätigkeit haben.

·    Haikuis Umsätze schwanken aufgrund der Saisonabhängigkeit der Nachfrage und Engpässen
     in bestimmten Zeitabschnitten aufgrund behördlicher Regelungen in der Belieferung mit
     Fisch und Meeresfrüchten aus Fischfang.

·    Haikuis Expansionspläne hängen von Haikuis Fähigkeit ab, die Verarbeitungskapazitäten
     erfolgreich auszuweiten.

·    Haikui könnte nicht in der Lage sein, sein Wachstum erfolgreich zu bewältigen.

·    Haikui könnte nicht in der Lage           sein,   eine   ausreichende   Finanzierung     seiner
     Wachstumsstrategie sicherzustellen.

·    Haikui könnte nicht in der Lage sein, seine Geschäftsstrategie erfolgreich umzusetzen.

·    Haikui ist Wechselkursschwankungen ausgesetzt.

·    Haikui könnte von Einfuhrpolitiken der Länder, in welche seine Produkte exportiert werden,
     beeinflusst werden.

                                               27
·   Haikui unterliegt den gesetzlichen Bestimmungen der Länder, in die seine Produkte
    exportiert werden und könnte nicht stets fähig sein, diesen zu entsprechen.

·   Haikui erzielt einen Großteil seiner Umsätze durch eine begrenzte Zahl an Hauptkunden.

·   Haikui agiert in einem wettbewerbsintensiven Marktumfeld. Zunehmender Wettbewerb oder
    der Markteintritt neuer Wettbewerber könnte für Haikui in niedrigeren Margen oder einem
    Verlust von Marktanteilen resultieren.

·   Haikui ist von der Erneuerung und/oder Beibehaltung von bestimmten Zertifizierungen für
    den Verkauf seiner Produkte abhängig.

·   Jegliches Misslingen, Gesundheits- und Hygienestandards         einzuhalten,   wird   Haikuis
    Geschäftstätigkeit erheblich nachteilig beinträchtigen.

·   Veränderungen in den Kundenpräferenzen oder ein verändertes Kaufverhalten der Kunden
    könnte Haikuis Geschäft und Erträge nachteilig beeinflussen.

·   Negative Berichterstattung über chinesische Produkte könnte Haikuis Geschäft und den
    Gewinn nachteilig beeinflussen.

·   Haikui könnte von Beschwerden und/oder Produkthaftungsansprüchen betroffen sein und
    erheblicher Haftung unterliegen, insbesondere soweit der Verzehr von Haikuis Produkten
    angeblich oder tatsächlich Verletzungen, Krankheit oder Tot zur Folge hat.

·   Haikui könnte nicht in der Lage sein, anwendbare Gesetze und Vorschriften einzuhalten,
    insbesondere bezüglich Lebensmittelqualität und -sicherheit, was sich negativ auf das
    Geschäft von Haikui auswirken und/oder Bußgelder oder andere Strafen nach sich ziehen
    könnte.

·   Der geschäftliche Erfolg hängt davon ab, dass es Haikui gelingt, Schlüsselpersonal zu
    rekrutieren und zu halten.

·   Haikui könnte steigenden Arbeitskosten gegenüberstehen.

·   Haikuis Management- und Finanzberichtssysteme könnten ungeeignet sein, um zukünftiges
    Wachstum zu fördern und präzise konsolidierte Finanzberichterstattung sicherzustellen.

·   Der Vorstand der Gesellschaft verfügt über keine Erfahrung im Hinblick auf die gesetzlichen
    Anforderungen für börsennotierte Unternehmen in Deutschland und Haikui hat derzeit kein
    adäquates Risikomanagementsystem eingerichtet.

·   Es könnte dem Aufsichtsrat der Gesellschaft schwer fallen, den Vorstand angemessen zu
    überwachen.

·   Der CEO der Gesellschaft, Herr Chen Zhenkui, wird auch nach dem öffentlichen Angebot
    indirekt einen erheblichen Anteil des Grundkapitals der Gesellschaft halten, wodurch er
    befähigt wird, erhebliche Kontrolle über die Gesellschaft auszuüben. Gleichzeitig könnte er
    damit Interessenkonflikten ausgesetzt sein.

·   Die Gesellschaft ist eine Holdinggesellschaft, deren Liquidität vom Zugriff auf die liquiden
    Mittel ihrer in China ansässigen operativen Tochtergesellschaften abhängig ist.

·   Haikui verfügt über keinen Versicherungsschutz, der üblicherweise in wirtschaftlich weiter
    entwickelten Ländern für Unternehmen von Haikuis Art und Größe besteht.

·   Haikui genoss in der Vergangenheit Steuervorteile in der Volksrepublik China, die seit 2012
    nicht mehr gelten.


                                             28
·    Veränderungen der Steuervorschriften in der Volksrepublik China könnten einen Einfluss auf
     Haikuis Nettogewinn haben.

·    Die Gesellschaft und Haikui Singapur könnten nach dem neuen chinesischem
     Unternehmenseinkommenssteuer-Recht als steueransässige Unternehmen angesehen
     werden und damit der chinesischen Besteuerung unterliegen. In diesem Fall könnten die
     Gesellschaft und/oder Haikui Singapur der chinesischen Unternehmenseinkommenssteuer in
     Höhe von 25% ihres weltweiten Einkommens unterliegen, die Gesellschaft könnte
     verpflichtet sein, auf Brutto-Dividendenausschüttungen an nicht in China ansässige Aktionäre
     10% chinesische Kapitalertragssteuer einzubehalten, und Gewinne aus dem Verkauf von
     Aktien durch nicht in China ansässige Aktionäre könnten ebenfalls dem chinesischen
     Kapitalertragssteuer-Einbehalt in Höhe von 10% bis 20% unterliegen.

Risiken bezüglich des politischen, sozialen und rechtlichen Umfelds der Volksrepublik
China

·    Haikui unterliegt allgemeinen Risiken bezüglich seiner Geschäftstätigkeit in China, die
     generell größeren wirtschaftlichen, politischen und rechtlichen Risiken unterworfen ist als
     Geschäftstätigkeiten in weiter entwickelten Volkswirtschaften.

·    Die chinesischen "Vorschriften zum Erwerb inländischer Unternehmen durch ausländische
     Investoren" (die "M&A-Vorschriften") könnten erhebliche negative Auswirkungen auf
     Haikui haben. Die M&A Vorschriften sehen vor, dass ausländische Zweckgesellschaften, die
     von chinesischen Unternehmen oder Personen zum Zwecke indirekter Börsengänge im
     Ausland gegründet werden, und die indirekt chinesische Gesellschaften kontrollieren, vor der
     Börseneinführung der Genehmigung durch die zuständigen chinesischen Behörden bedürfen.
     Die zuständigen chinesischen Behörden könnten die verschiedenen Schritte, die seit 2007 im
     Rahmen der Restrukturierung von Haikui vorgenommen wurden, als ein einheitliches
     Geschäft ansehen, welches der Zustimmung bedurfte. In diesem Fall könnte Fujian Haikui
     gehindert sein, Gewinne auszuschütten und/oder Darlehen der Gesellschaft könnten nicht an
     Fujian Haikui ausgereicht werden.

·    Die Rechtsvorschriften der State Administration of Foreign Exchange (SAFE) in Bezug auf
     Off-Shore-Investitionen, die von in China ansässigen Personen oder chinesischen
     Staatsbürgern    getätigt   werden,   könnten     die    geschäftlichen  Aktivitäten   und
     Finanzierungsalternativen von Haikui nachteilig beeinflussen. Diese Vorschriften sehen vor,
     dass in China ansässige Personen Investitionen in ausländische Zweckgesellschaften bei den
     zuständigen chinesischen Behörden registrieren und genehmigen lassen müssen. Sollte dies
     unterlassen worden sein, könnte Haikui Bußgeldern und anderen rechtlichen Sanktionen
     unterworfen sein, könnten Investitionen der Gesellschaft in chinesische Gesellschaften
     beschränkt werden, und/oder die Möglichkeit der Gesellschaft, Dividenden zu zahlen,
     eingeschränkt werden.

·    Die chinesischen regulatorischen Vorgaben in Bezug auf Darlehen bzw. Eigenkapital, das
     ausländische Muttergesellschaften chinesischen Tochtergesellschaften gewähren, könnten die
     Nutzung des Emissionserlöses durch Haikui verzögern oder verhindern. Alle Darlehen oder
     anderen Kapitaleinzahlungen einer ausländischen Muttergesellschaft an chinesische
     Tochtergesellschaften sind in China Eintragungs- und Genehmigungspflichten unterworfen.
     Sollte Haikui derartige Eintragungen oder Genehmigungen nicht erlangen, könnte die
     Möglichkeit, die Emissionserlöse zur Finanzierung und Ausweitung des operativen Geschäfts
     in China zu verwenden, beeinträchtigt sein.

·    Wirtschaftliche Instabilität in China könnte sich nachteilig auf die Geschäfte von Haikui
     auswirken.

·    Eine Destabilisierung des politischen Systems könnte die wirtschaftliche Liberalisierung
     Chinas gefährden.



                                              29
·    Gesundheitsgefährdende Epidemien und der Ausbruch von ansteckenden Krankheiten, wozu
     auch die Vogelgrippe, das akute respiratorische Syndrom (SARS) oder die Schweinegrippe
     zählen, könnten die chinesische Wirtschaft erheblich nachteilig beeinflussen.

·    Das Rechtssystem der Volksrepublik China und die nationalen steuerlichen Vorschriften
     beinhalten inhärente Unsicherheiten und Unstimmigkeiten.

·    Die mangelnde Unabhängigkeit und geringe Erfahrung des Gerichtswesens und die
     Schwierigkeiten bei der Vollstreckung von richterlichen Entscheidungen in China sowie der
     Ermessensspielraum der staatlichen Behörden bei der Durchsetzung gerichtlicher
     Anordnungen könnten Haikui daran hindern, effektive Rechtsmittel in einem
     Gerichtsverfahren zu erhalten.

·    Es bestehen Schwierigkeiten hinsichtlich        der    Anerkennung      und   Durchsetzung    von
     ausländischen Urteilen in China.

·    Ausländischen Investitionen in chinesische Unternehmen könnten Beschränkungen auferlegt
     werden.

·    Veränderungen des Arbeitsrecht        und      der    Arbeitspolitik   in   China   könnten   die
     Geschäftsergebnisse beeinflussen.

Risiken bezüglich industrieller und statistischer Daten

·    Die Genauigkeit industrieller und statistischer Daten, die in diesem Prospekt enthalten sind,
     könnte nicht zuverlässig sein.

Risiken bezüglich des Angebots

·    Ein liquider Handel mit Aktien der Gesellschaft könnte sich möglicherweise nicht entwickeln.

·    Der Aktienkurs könnte Kursschwankungen ausgesetzt sein.

·    Der Verkauf von Aktien durch die Altaktionäre könnte den Aktienkurs beeinträchtigen.

·    Das Eingehen von Leerverkäufen vor Lieferung ist mit Risiken behaftet.

·    Insbesondere, wenn das Angebot nicht vollständig durchgeführt wird, handelt es sich um ein
     relativ kleines Angebot, und der Streubesitz der Gesellschaft nach Börsenzulassung wird
     relativ gering sein, was sich nachteilig auf die Handelbarkeit der Aktien und auf die
     Aktionärsstruktur der Gesellschaft auswirken könnte.

·    Negative Berichterstattung über börsennotierte chinesische Gesellschaften könnte sich auf
     den Kurs der Aktien der Gesellschaft negativ auswirken.




                                               30
                                          RISK FACTORS

Investors should carefully read and consider the risks described below and other information
included in this Prospectus before deciding whether to purchase shares of the Company. The
occurrence of these risks, alone or in connection with other circumstances, may materially and
adversely affect the business of Haikui and have a material adverse effect on the business,
financial condition and results of operations of Haikui. The market price of the shares could decline
as a result of the occurrence of any of these risks, and investors may lose all or part of their
investment. Additional risks and uncertainties of which the Company is currently not aware could
also materially adversely affect the business of Haikui and could have material adverse effects on
the business, financial condition and results of operations of Haikui. Investors should pay particular
attention to the fact that the operating entity of Haikui is incorporated in China and subject to a
legal and regulatory environment which in various respects may differ from that of other countries.
The order in which the following risk factors are presented does not reflect the likelihood of their
occurrence, nor the extent or significance of the individual risks.

Risks related to Haikui’s business

Haikui depends on the supply of fresh and quality raw seafood from suppliers for its
processing and any disruptions or restrictions leading to a shortage in the supply or
deterioration in the quality of raw seafood would materially adversely affect its
business, financial condition and results of operations.

Haikui’s processing of frozen and canned seafood is dependent on the consistent supply of a
variety of raw seafood, in particular prawn, crab, various types of fish and other raw seafood such
as cephalopod and shellfish. Such seafood is sourced from external suppliers from both capture
fishing and aquaculture resources. Prawn is solely sourced from aquaculture resources and crab
solely from capture fishing.

During the financial year 2011, Haikui had 84 suppliers of raw seafood, with 61 of which, in
particular with acquaculture farms, it has entered into framework agreements which entitle Haikui
to purchase seafood on a priority basis, i.e. the suppliers may not sell any of their products to
other parties without Haikui’s prior approval. However, these supply agreements only have terms
of one year up to three years. In addition, these supply agreements may not be sufficient to
secure Haikui’s supply needs, as the supply and quality of seafood sourced from external suppliers
and the availability of a certain species may be disrupted or restricted by various factors such as
weather conditions, sea water conditions, in particular water pollution, which, for example could be
caused by unforeseen catastrophes like nuclear incidents, leakages at oil rigs, or the sinking of
transport ships carrying environmentally hazardous materials. Also restrictive policies and
regulations of the governments of the relevant territories where such capture fishing is carried out
or seafood from aquaculture resources is harvested may have a negative impact on Haiku's
seafood supplies. This is especially the case for prawns and crabs, where only one type of sourcing
(aquaculture resources or capture fishing, respectively) is available.

Any disruptions or restrictions leading to a shortage in the supply or deterioration in the quality of
raw seafood such as crab, fish, prawn and cephalopod would have a material adverse effect on
Haikui’s business, financial condition and results of operations.

Governmental regulations and policies restricting capture fishing may adversely affect
Haikui’s business, financial condition and results of operations.

In 2011, approximately 59.3% of Haikui’s sales were attributable to seafood resources from
capture fishing. Capture fishing activities in waters around the PRC are restricted in certain months
for certain fishing methods to ensure sustainable aquatic resources. For example, capture fishing is
almost entirely prohibited in the Fujian region around Dongshan between 16 May and 1 August of
each year and severly restricted in the first half of May. As a result, certain species of raw seafood
are not available or available only to a very limited extent, and Haikui cannot fully compensate for
this effect by keeping frozen raw seafood on stock for further processing. There is no assurance

                                                 31
that the PRC government may not impose further fishing regulations, including but not limited to
longer or more frequent periods of fishing restrictions. Any increase in fishing restrictions will have
an effect on the amount of capture seafood available for processing. Shortages in supply will lead
to increased costs of sales which may lower the margin of Haikui’s products. If certain species are
no longer available for capture fishing in the future, Haikui will be forced to offer substitute
products which it may not be able to timely procure. Prices for seafood from aquaculture resources
could rise at the same time. Also restrictions on global capture fishing in other regions of the
world, such as the United States of America or European Union, may lead to increased competition
for seafood resources from capture fishing in the PRC, and thus, may lead to an increase in
Haikui’s costs of sales. Any restrictions imposed on or shortages in the supply of fresh and raw
seafood from capture fishing could materially adversely affect Haikui’s business, financial condition
and results of operations.

Haikui’s profitability may be adversely affected by increases in the prices of raw
seafood.

The profitability of Haikui may be adversely affected by changes in production costs brought about
by fluctuations in raw material prices. Haikui’s major raw materials are various types of seafood,
accounting for 95.1%, 94.9%, and 94.3% of Haikui’s overall costs of sales in 2009, 2010 and
2011, respectively. The prices of raw seafood may fluctuate due to changes in supply and demand
conditions. Any shortage in the supply of or increase in the demand for raw seafood may lead to
an increase in prices of raw seafood. Any increase in prices of raw seafood sourced from third
parties which cannot be passed on to Haikui’s customers could reduce Haikui’s operating profit and
in turn materially adversely affect its business, financial condition and results of operations.

Disruptions or delays in the delivery of raw materials from its suppliers to Haikui or in
the delivery by Haikui of its products to its customers could significantly increase its
operating costs, thus adversely affecting its profitability.

Haikui sources the raw seafood used for its products from a variety of external suppliers located in
close proximity to Haikui’s processing facility. If there is any disruption or delay in the delivery of
raw materials to Haikui due to strikes, weather conditions or other reasons, Haikui may have to
seek alternative supplies from other locations at higher costs. As a large proportion of its
customers are based overseas (62.2% in 2009, 68.4% in 2010 and 68.1% in 2011, respectively,
of Haikui’s revenues were generated overseas), if raw materials are not timely delivered to Haikui,
Haikui may have to resort to other, more costly means of transportation to timely fulfil its
customers’ orders. This could significantly increase its operating costs and adversely affect its
profitability, or even lead to damage claims of customers against Haikui. In the event that there is
no other viable alternative and Haikui is unable to use other modes of delivery on acceptable
terms, the ability to fulfil its sales orders would be impaired and Haikui’s business, financial
condition and results of operations would in turn be materially adversely affected.

The outbreak of diseases or widespread contamination affecting seafood used by Haikui
could adversely affect its business, financial condition and results of operations.

Any outbreak of disease or widespread contamination in any of Haikui’s raw materials due to
fishing restrictions, pollution at the aquaculture farms, and/or capture fishing areas may have an
adverse impact on the supply of raw materials available for Haikui’s processing. Such
contamination may also be caused by unforeseen catastrophes like nuclear incidents, leakages at
oil rigs, or the sinking of transport ships carrying environmentally hazardous materials. Any
reduction in the supply of raw materials for Haikui’s products would result in Haikui having to seek
other, possibly more costly, supplies of raw materials which also may not readily be available. In
addition, any outbreak of disease or widespread contamination of Haikui’s raw materials may lead
to a loss in customer confidence and reduce the demand for Haikui’s products. The occurrence of
any of these factors could materially adversely affect Haikui’s business, financial condition and
results of operations.




                                                  32
The susceptibility of Haikui’s raw materials and finished products to deterioration during
its processing and sales cycles may lead to a delay in processing or delivery of the
products, lower revenues and higher costs.

The processing at Haikui’s processing facilities is dependent on a continuous supply of utilities such
as electricity and water. Any disruption to the supply of electricity and/or water or any outbreak of
fire or similar calamities at the processing facilities may result in the breakdown of the facilities,
such as the cold storage facilities, which would in turn lead to deterioration of the products.
Further, as most of the processing facilities are situated in the PRC, it is possible that PRC
authorities may, as a result of a shortage of power, reduce the supply of utilities, such as
electricity, and require the processing facilities to shut down periodically.

Haikui’s raw materials and finished products are also susceptible to deterioration during the sales
cycles as a result of their perishable nature. These raw materials and products may deteriorate
due to a number of reasons, including the malfunctioning of cold storage facilities or delays in
delivery. Such deteriorations may lead to a delay in processing or delivery of the products, a loss
in revenues, increased costs to purchase replacement raw materials and/or compensation
payments to Haikui’s customers.

The occurrence of any of these factors could materially adversely affect the business, financial
condition and results of operations of Haikui.

Haikui’s operations are capital intensive and failure to maintain sufficient working
capital may have an adverse impact on Haikui’s business.

Haikui’s operations are capital intensive as it requires a significant amount of working capital for its
business operations. At the beginning of a year, Haikui usually makes prepayments to each of its
suppliers the amount of which depends on the forecasted annual supplies from the respective
supplier. Therefore, Haikui needs a significant amount of cash to fund its raw material
procurement. Haikui also faces the risk that raw materials ordered will not be delivered despite the
advance payments made. On the other hand, Haikui’s customers usually have a grace period for
payment of between 60 and 90 days after delivery. If Haikui fails to maintain sufficient working
capital through its sales activities and timely collection of its account receivables or other means, it
may not have sufficient working capital for its operations which may have a material adverse effect
on Haikui’s business, financial condition and results of operations.

Haikui’s revenues fluctuate due to seasonality in demand and shortages in the supply of
seafood from capture fishing in certain periods due to governmental regulations.

Haikui’s revenues and results of operations have fluctuated in the past due to fluctuations in
demand based on seasonality and shortages in the supply of seafood from capture fishing in the
period in which fishing is restricted. In the second half of the year, substantially more consumers
buy processed seafood, e.g. for various festivities and holidays such as the Chinese Lunar New
Year or Christmas, which in turn has historically led to an increase in revenues in the second half
of the year. In addition, the supply of raw seafood from capture fishing in the Dongshan region is
restricted from 1 May to 1 August due to governmental regulations. These fishing restrictions may
affect Haikui’s supply of certain species of raw seafood to the extent such raw materials are not
kept in sufficient quantity as inventories and may also lead to fluctuations in the prices of certain
raw materials, which Haikui may not always be able to pass on to its customers in the form of
higher prices for its products, thus influencing the demand as well. Any failure by Haikui to
compensate for these fluctuations in higher prices of raw materials may therefore have an adverse
impact on Haikui’s business.

As a result, Haikui’s results of operations are subject to fluctuations and its interim results should
not be viewed as an indicator of Haikui’s performance for the year.




                                                  33
Haikui’s expansion plans will depend on its ability to successfully expand its processing
capacity.

A key element of Haikui’s internal organic growth strategy is to increase its processing capacity by
constructing a new seafood processing factory in proximity to its current processing facilities.
Haikui’s ability to manage the construction and integration of new processing facilities depends on
Haikui’s administrative, financial and operational controls and procedures. Haikui will continue to
need to improve its operational and managerial controls and procedures to maximize the value of
these expansion plans and it will require additional accounting, finance, and human resources
employees to ensure that these operations are fully integrated with its current business. Haikui’s
inability to implement its plans to increase its processing capacities as planned could have a
material adverse effect on Haikui’s business, financial condition and results of operations.

Haikui may not be able to manage its growth successfully.

Haikui plans to expand its processing sites, distribution channels, marketing, research and
development activities and increase the number of its staff in sales and marketing departments.
Haikui’s ability to manage this growth and integrate operations, technologies, products and
personnel depends on Haikui’s administrative, financial and operational controls and its ability to
create the infrastructure necessary to exploit market opportunities for its products and financial
capabilities. Haikui will need to continue to improve its operational and managerial controls and
procedures to keep pace with its expected growth and additional reporting requirements it will face
as a public company, and maintain close coordination with employees in each of its operating
divisions, as well as accounting, finance and marketing departments. The Company’s inability to
manage its growth and increasing reporting requirements could have a material adverse effect on
its business, financial condition and results of operations.

Further, even though Haikui currently has no specific acquisition plans, against the background of
Haikui's generel growth strategy, Haikui’s internal growth may be supplemented by strategic
external acquisitions. If Haikui makes any future acquisitions, the completion of acquisitions and
the successful integration of other companies into Haikui’s operations may be difficult for a variety
of reasons, including differing management styles, poor records or internal controls and difficulty
in establishing immediate control over cash flows. As a result, potential future acquisitions pose
significant risks to Haikui’s existing operations, including additional demands placed on Haikui’s
senior management, and increased overall operating complexity of Haikui’s business. Moreover,
when making acquisitions it may not be possible for Haikui to conduct a detailed investigation of
the nature of the assets being acquired due to, for example, time constraints and other factors.
Haikui may also become responsible for additional liabilities or obligations not foreseen at the time
of an acquisition. Beyond that, expected synergies and cost savings may not materialize, resulting
in lower than expected benefits to Haikui from such acquisitions.

The materialization of any of these risks could have a material adverse effect on Haikui’s business,
financial condition and results of operations

Haikui may not be able to secure adequate financing to fund its growth strategy.

In order to finance its growth strategy, Haikui may have to raise additional capital in the future
through debt or equity offerings. Taking into account the ongoing European debt crisis, the volatile
capital markets situation, and the rather deteriorating conditions under which banks may be willing
to grant loans to companies in the EU and possibly also in China, Haikui cannot be certain that
suitable financing will be available in the required amounts or on acceptable terms.

If additional equity or equity-linked securities are issued, this may result in the dilution of the
value of the shares held by existing shareholders. If additional debt is incurred, this would result in
debt service obligations which could have a negative impact on profitability and could expose
Haikui to general adverse economic and industry conditions. In addition, the terms of financing
agreements could limit Haikui’s ability to pay dividends or restrict Haikui’s flexibility in planning
for, or reacting to, changes in its business or industry.

                                                  34
The Company’s subsidiary in China is also subject to foreign exchange registration and approval if
it intends to borrow funds from entities outside of China. In addition, the Company’s PRC
subsidiary needs to obtain approval or registration from Chinese government agencies if it intends
to secure financing through equity contributions by Haikui Seafood AG. In the event that Haikui
cannot obtain necessary financing on reasonable terms, or at all, it may be forced to scale back its
plans for future business expansion.

Furthermore, the Company’s subsidiaries in China are subject to certain restrictions on the amount
of foreign debt they can borrow (see "Risk Factors - Risks Related to the Political, Social and Legal
Environment of the People’s Republic of China - PRC regulations pertaining to loans and direct
capital investments by offshore parent companies to PRC entities may delay or prevent Haikui
from using the proceeds of this Offering").

The occurrence of any of the aforementioned risks could have material adverse effects on the
business, financial condition and results of operations of Haikui.

Haikui may not be able to successfully implement its business strategy.

As part of its business strategy, Haikui aims to produce and sell larger volumes of seafood
products more efficiently than its competitors. Haikui aims to increase its brand awareness,
increase its processing capacity and capability, enhance operational efficiencies and strengthen its
relationships with key customers. Haikui’s ability to accomplish these objectives depends on a
number of factors, including, among others, Haikui’s ability to obtain financing, timely procure a
sufficient supply of raw materials, respond to changes in consumer preferences and successfully
implement new processing lines and technologies. If Haikui is unable to increase its processing
and/or sales volumes of seafood products and sustain or increase prices, it may not successfully
implement its business strategy, and Haikui’s business, financial condition, and results of
operations may be materially adversely affected.

Haikui is exposed to fluctuations in foreign exchange rates.

Haikui’s sales are mainly denominated in the Chinese currency Renminbi ("RMB") and the
currency of the United States of America ("USD"), while costs are primarily incurred in RMB.
Haikui is therefore exposed to adverse fluctuations in the exchange rates between the USD and
the RMB. In 2009, 2010 and 2011, 62.21%, 68.42% and 68.06%, respectively of Haikui’s
revenues were generated in USD. For the periods under review, the RMB has generally appreciated
against the USD. In addition, the PRC government is currently under political pressure from other
governments, in particular in the United States and European Union, to substantially appreciate
the RMB against the USD and the EUR. A further appreciation of the RMB against the USD may
have material adverse effects on Haikui’s business, financial condition and results of operations

The Historical Consolidated Financial Statements contained in this Prospectus for the periods under
review were prepared in EUR and Haikui’s future consolidated financial statements will be prepared
in EUR, while Haikui’s operating currency is RMB, which is currently not a freely convertible
currency. During the periods under review, the RMB has gradually appreciated against the EUR.
However, a devaluation of the RMB against the EUR would have an adverse currency translation
effect on the Company’s consolidated financial statements.

As the value of the RMB is controlled by PRC authorities, foreign exchange policies of the PRC
government also have a significant impact on currency exchange rates. Haikui Group currently
does not have a formal hedging policy with respect to the foreign exchange exposure. Therefore,
fluctuations in currency exchange rates could have material adverse effects on the business,
financial condition and results of operations of Haikui.




                                                 35
Haikui may be affected by import policies of the countries to which its products are
exported.

Haikui’s products are exported to different parts of the world including Asia, Europe, and the
United States of America. During the periods under review, the percentage of Haikui’s revenues
generated from international sales amounted to 62.2% in 2009, 68.4% in 2010, and 68.1% in
2011. Haikui is subject to the laws and regulations of the importing countries governing the import
of products from the PRC. Should such countries introduce any laws, regulations, or other
measures that prohibit or limit the import of its products, or increase the costs of the import of
products from the PRC, this could materially affect Haikui’s ability to export its products to such
countries. This is of particular relevance for the United States and the European Union which are
currently discussing the imposition of certain restrictions and possible additional import duties on
PRC products, especially in light of the current disputes with the PRC government over its
exchange rate and international trade policies. The implementation of any such measures could
materially adversely affect the ability of Haikui to sell its products in the United States and the
European Union.

Further, Haikui is currently not subject to export duties or restrictions in the PRC. However, there
can be no assurance that the PRC government will not levy such taxes in the future or place
restrictions on exports.

The occurrence of any of these risks could have a material adverse impact on Haikui’s business,
financial condition and results of operations.

Haikui is subject to rules and regulations in countries to which its products are exported
and may not always be able to comply with them.

Haikui is subject to rules and regulations of the various countries to which Haikui’s products are
exported. Any non-compliance by Haikui with these rules and regulations, or Haikui’s failure to
maintain necessary certifications or otherwise comply with such laws, may result in the rejection of
or ban on some or all of the products by the country to which exports are being made, or penalties
being imposed on Haikui. There can be no assurance that Haikui will in every instance comply with
prevailing import regulations of the countries to which Haikui exports and will be accepted into the
country of import, or that the aggregate loss in any one financial year arising from the occurrences
of such events will not be material. The occurrence of any of these events may therefore
materially adversely affect the business, financial condition and results of operations of Haikui.

Haikui generates the majority of its revenues from a limited number of major customers.

During the periods under review, Haikui sold large quantities of its products to a limited number of
major customers. The largest five customers of Haikui accounted for 64.7% of its revenues in
2009, 66.2% in 2010, and 59.9% in 2011.

As Haikui does generally not enter into any long-term supply agreements with its customers but
delivers its products based on purchase orders from its customers, there can be no assurance that
the major customers of Haikui will not change or that certain major customers will not cease
placing purchase orders in the future. In addition, in terms of export sales to countries outside of
Asia, Haikui mainly distributes its products through buying agents which contact Haikui after
receiving orders from international seafood distributors. In a typical transaction, a buying agent
contacts a number of seafood processing companies and fills the orders of its international
distributor customers based on price, availability and quality of products offered. Even though
Haikui delivers its products directly to these international seafood distributors, there is no
established customer relationship between Haikui and the international seafood distributors and
these distributors can choose from a range of potential seafood processing companies to purchase
the products they need.

As a result, Haikui’s relationship with its customers directly and with its international customers
through buying agents largely depends on its ability to constantly meet customer requirements,

                                                36
including in particular, price competitiveness, short turnaround times for product deliveries, and
consistent quality of its products. If Haikui is unable to meet such requirements in the future, even
for short periods of time, its customers and buying agents with which it cooperates could reduce
their purchases from Haikui or cease to purchase from Haikui completely. If Haikui is unable to
replace any or all of these sales, its business, financial condition and results of operations could be
materially adversely affected.

Haikui operates in a highly competitive environment. Increased competition or the entry
of new competitors may result in lower margins or in a loss of Haikui’s market share.

Competition in the Chinese and global markets for processed seafood is intense and Haikui expects
this competition to continue to increase and intensify in the future. Haikui’s current competitors
include domestic and international competitors, some of which are vertically integrated in the
production, processing and distribution of seafood. By comparison, Haikui receives and processes
seafood from its external suppliers and sells that fresh processed seafood to distributor customers.
If distributors of seafood also decide to become processors of seafood or were to acquire other
processing companies Haikui could face more competition in the seafood processing market from
vertically integrated distribution companies. In addition, Haikui’s access to fresh seafood could be
limited as suppliers of fresh seafood controlled or acquired by such vertically integrated
competitors would not be available as a cost-efficient source of seafood for Haikui.

In addition, barriers to entry for processed seafood in the PRC are relatively low for new
competitors with sufficient financial resources to make the necessary investments in machinery
and experienced personnel. New competitors could therefore enter the market at any time.
Existing and new competitors may have more recognized and well-established brands, a larger
customer base, more advanced processing facilities or greater financial resources, which would
allow them to compete aggressively in the PRC market, among other things, by lowering their
prices and/or expanding their processing capacity. To remain competitive, Haikui must continue to
invest significant resources in the ongoing development of new products and improvement of
existing products. In addition, it is difficult to differentiate between processed seafood products
other than in terms of branding and packaging. As a result, price competition in this market is
intense. There can be no assurance that Haikui will have sufficient resources to make these
investments or that such investments will improve Haikui’s position in the PRC market as
compared to its competitors.

Increased competition or the entry of new competitors could result in lower margins for Haikui’s
products or a loss of market share, all of which could adversely affect Haikui’s business, financial
condition and results of operations.

Haikui depends on the renewal and/or maintenance of certain certifications for the sale
of its products.

Haikui’s ability to export products to certain markets is subject to Haikui’s renewing and/or
maintaining the necessary certifications, such as the HACCP certification and the European Union
Registered Exporter of Seafood Products which are certifications for the export of fishery and
aquaculture products to the United States and to the European Union. The HACCP certification is
required to be renewed annually, compliance with the requirements for the certification as a
European Union Registered Exporter of Seafood Products will be randomly checked. Haikui’s
business is also dependent on the regular extensions of the ISO 9001:2000 certificate for quality
management, as any withdrawal of this certificate would have a negative effect on the reputation
of Haikui’s products with its customers. The renewal of these certifications is subject to the
approval of the accreditation organisations upon re-examination of Haikui’s qualifications. Any
failure to renew and/or maintain these certifications may result in a loss of customers as a result
of the inability of Haikui to sell products in certain jurisdictions and the decline in consumer
confidence in its products, thereby causing a material adverse effect on Haikui’s business, financial
condition and results of operations.




                                                  37
Any failure to meet health and hygiene standards will materially and adversely affect
Haikui.

Haikui’s products are subject to regular quality inspections carried out by the Authority for Entry-
Exit Inspection & Quarantine of the PRC ("CIQ") and the Administration of Quality Supervision,
Inspection and Quarantine of the PRC ("AQSIQ"). These inspections cover food preparation,
production and processing operations, as well as health checks of the employees. If Haikui fails to
meet the required health and hygiene standards set forth by the CIQ and the AQSIQ, it may be
required to take remedial measures to meet these standards. In extreme cases, it may have its
license(s) or accreditation(s) for conducting its business cancelled or revoked, which would have a
material adverse effect on its business, financial condition and results of operations. In addition,
the CIQ periodically inspects the products that Haikui exports. Any failure to meet the required
standards of hygiene may also affect the ability to export its products and meet customer
deadlines. Further, it may lead to restrictions on the ability to export the products, which would
also materially adversely affect its business, financial condition and results of operations.

Changes in consumer preferences or consumer spending could adversely affect Haikui’s
performance.

Haikui’s continuing growth and success depends in part on the popularity of Haikui’s products. A
failure of Haikui to adapt to market trends or changes in consumer preferences might quickly lead
to Haikui losing market share to competitors. In addition, the sale of processed seafood products
depends on the economic conditions, disposable income and consumer confidence in the countries
in which Haikui’s product are being sold, all of which can affect discretionary consumer spending in
these countries. If Haikui is unable to adapt its product portfolio to market demands, or if the
demand decreases due to general economic conditions, Haikui’s business, financial condition and
results of operations could be materially adversely affected.

Negative publicity on PRC products may adversely affect Haikui’s business and profits.

Negative publicity on the safety of products made in the PRC, such as the recent melamine
contamination of PRC milk products as well as allegations of PRC manufactured toys containing
high level of toxic lead paint may generally affect the demand for PRC goods. Any negative
publicity relating to PRC products may affect the customers’ sales in general, but the food sector is
particularly vulnerable to negative publicity. In addition, with increasing affluence among the PRC
population, end-consumers may also decide to purchase imported products as a general
precaution resulting from any negative publicity on PRC products. Any of these events may
materially adversely affect Haikui’s business, financial condition and results of operations.

Haikui may be affected by complaints and/or product liability claims and may be subject
to significant liability, in particular if the consumption of any of Haikui’s products
causes, or is alleged to cause, injury, illness or death.

The processing and sale of fish and seafood or related products made for human consumption
involves the risk of harm to consumers. Such harm may result from tampering by third parties, or
product contamination, disease or spoilage, including the presence of foreign objects, substances,
chemicals or other agents introduced or found during the growing, storage, handling, processing or
transportation phases of production. If the consumption of any of Haikui’s products causes, or is
alleged to have caused, illness, injury or death, Haikui may become subject to claims or lawsuits
or be required to conduct product recalls. In case such claims or lawsuits against Haikui succeed,
Haikui may be required to make substantial compensation payments, which may have a
substantial adverse effect on Haikui’s financial situation, which is aggravated by the fact that
Haikui currently does not have product liability insurance.

Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity
surrounding any assertion that Haikui’s products caused injury, illness or death could adversely
affect Haikui’s reputation with existing and potential customers and buying agents, and damage
Haikui’s brand image, as well as result in a loss of consumer confidence in Haikui’s products. Any

                                                 38
claims about Haikui’s products having caused damages to health or being of low quality - whether
successful or not - may lead to Haikui losing market share and revenues and making it more
difficult to enter new markets in the future. Haikui’s business, financial condition and results of
operations could be materially adversely affected, if such liability claims were made.

Haikui may not be able to comply with applicable laws and regulations, in particular
relating to food quality and safety, which could negatively impact Haikui’s business
and/or lead to fines or other penalties.

The conduct of the business and the manufacture of products at the processing facilities in the PRC
are subject to various laws and regulations. Any breach or non-compliance by Haikui with the laws
and regulations, in particular the laws and regulations relating to food quality and safety, which
Haikui is subject to, may lead to the termination, withdrawal or suspension of some or all of the
business activities or fines or other penalties being imposed on Haikui. The occurrence of any of
these events may have a material adverse effect on Haikui’s business, financial condition and
results of operations.

The success of Haikui’s business depends on attracting and retaining key personnel and
employees for its processing lines.

The success of Haikui’s business will depend largely on its ability to attract and retain its key
personnel, in particular the Company’s Management Board members and other qualified senior-
and mid-level management members. Haikui’s success to date has been largely attributable to the
efforts of the management team, in particular of Haikui’s CEO, Mr. Chen Zhenkui with more than
20 years’ experience in the seafood processing industry. The Company’s other Management Board
members, Haikui’s COO, Mr. Huang Zhenping, and Haikui’s CFO, Mr. Alan Gey, as well as Haikui’s
senior management are also of particular importance to Haikui’s business due to their know-how
and close relationships with customers and suppliers. Haikui cannot guarantee that it will be able
to attract or retain or recruit suitable replacements for its key personnel. These individuals might
move to competitors or form a competing company and compete with Haikui for customers,
business partners, and other key professionals at Haikui using their experience and expertise

Haikui’s future success will also depend upon its ability to attract and retain a sufficient number of
qualified production staff. Haikui’s processing is labour intensive and requires a large workforce,
with a certain degree of training and/or experience in the seafood processing industry. Competition
for such personnel is intense in the Dongshan region and may intensify in case of a further entry of
competitors into the Chinese market for processed seafood. In particular during peak production
times, in particular during August and September each year, Haikui employs temporary contract
workers based on employee secondment agreements with a labour agency which always only have
terms of one year and need to be annually renewed. There can be no guarantee that Haikui will be
able to get sufficient temporary employees under employee secondment agreements in the future,
or that the conditions under the employee secondment agreements will in the future be favourable
to Haikui.

The occurrence of any of these risks may have a material adverse effect on Haikui’s business,
financial condition and results of operations.

Haikui may face rising labour costs.

Haikui’s business is labour intensive. Haikui has observed an increase in labour costs in the PRC in
recent years as shortages of qualified employees have emerged and currently expects that labour
costs will continue to increase in the near future. To compete, Haikui may need to increase the
salaries of its employees to retain them. In the recent past, the scarcity of qualified personnel in
China has led to a substantial increase in wages for such personnel. Further increases could lead to
significantly higher costs for senior management, engineers, and qualified technical staff. There
can be no assurance, however, that Haikui will be able to obtain the services of the personnel
necessary for its growth and success, especially in light of the increasingly competitive labour
market. If Haikui is not able to offset such increase in labour costs against corresponding increase

                                                 39
in the prices of products, this could have a material adverse effect on Haikui’s business, financial
condition and results of operations.

Haikui’s management and financial reporting systems may be inadequate to support its
future growth and to ensure accurate consolidated financial reporting.

Haikui’s management information system and financial reporting system may be less developed
than those of companies that operate in more developed markets, and may not provide Haikui’s
management with as much or as accurate information as required, or not provide the required
information in time.

In particular, preparation of consolidated IFRS financial statements, which the Company will be
required to produce after the listing of its shares at the Frankfurt Stock Exchange, may pose
problems for Haikui’s current financial reporting system. The preparation of consolidated IFRS
financial statements is a labour-intensive process. Haikui may also not have an adequate number
of English speaking employees in its financial department sufficiently qualified to assist with the
preparation of the IFRS financial statements. Haikui may therefore need to hire additional staff for
its finance department with knowledge in IFRS accounting requirements and a sufficient command
of the English language. However, such personnel is hard to find in the PRC in general and in
Dongshan region in particular. There is an increasing demand within the PRC for the small number
of IFRS-experienced accounting personnel as more companies in the PRC begin to prepare
financial statements on the basis of IFRS. The general shortage of qualified staff and intense
competition for such staff may hinder Haikui’s efforts to hire and retain key accounting staff. An
insufficient number of qualified accounting staff would increase the difficulty of preparing Haikui’s
consolidated IFRS financial statements.

Haikui’s inability to maintain an adequate management information system and financial reporting
system, as well as an inability to hire further qualified personnel may hinder Haikui’s future growth
and ability to comply with future legal requirements to prepare its financial statements under IFRS.
This may have a material adverse effect on Haikui’s business, financial condition and results of
operations.

The Management Board of the Company is not experienced with German legal
requirements for listed companies and Haikui currently does not have a comprehensive
risk management system in place.

Haikui has no experience in complying with German legal requirements for listed companies. None
of the members of the Management Board of Haikui Seafood AG speaks German. Haikui currently
only has small legal, finance and accounting departments and is not used to dealing with increased
legal, accounting, transparency and administrative requirements imposed on a publicly listed
company in Germany. The obligation to comply with German corporate governance requirements
and post-admission obligations, in particular requirements relating to the publication of ad-hoc
information, quarterly reports as well as various other reporting, notification and publication
obligations resulting from the Company’s listing will put increased demands on Haikui’s
compliance, finance and accounting departments. Beyond that, Haikui does currently not operate a
formalized risk reporting system and risk management system as may be customary in European
or US listed companies, as such risk management systems are not standard in the PRC.

If Haikui fails to comply with such obligations, or if any risks materialize which could have been
prevented by a formalized risk management system, this could have material adverse effects on
the business, financial condition and results of operations of Haikui.

The Company’s Supervisory Board may have difficulties in adequately supervising the
Management Board.

Haikui’s assets are largely located in China and the members of the Company’s Management Board
reside in China and Singapore. The Company is a holding company without any operational
business of its own. The non-German member of the Supervisory Board of Haikui Seafood AG

                                                 40
("Supervisory Board") has no experience in fulfilling his obligations arising from the German
Stock Corporation Act (Aktiengesetz). The German members of the Supervisory Board residing
outside of China may have difficulties in fulfilling their statutory supervisory duties vis-à-vis the
members of the Management Board residing in China and Singapore as a result of the physical
distance between Germany and Asia and language barriers. Any lack of supervision by the
Company’s Supervisory Board may have material adverse effects on the business, financial
condition, and results of operations of Haikui.

The Company’s CEO, Mr. Chen Zhenkui, will also after the Offering indirectly still hold a
significant portion of the share capital of the Company which will enable him to exercise
significant control over the Company and could subject him to conflicts of interest.

Immediately upon the completion of the Offering, i.e. after the registration of the implementation
of the IPO Capital Increase in the commercial register and the placement of the Offer Shares
amongst investors, assuming placement of all Offer Shares, Haikui’s CEO, Mr. Chen Zhenkui, will
indirectly hold approximately 46.58% of the Company’s share capital and voting rights. Mega Bond
International Limited ("Mega Bond"), a private equity investor which is the second largest
shareholder, will immediately upon closing of the Offering, assuming placement of all Offer Shares,
indirectly hold approximately 29.00% of the Company’s share capital and voting rights (or
approximately 30.81% of the Company’s shares and voting rights if the Greenshoe Option is not
exercised). Through the shareholdings, Mr. Chen will individually and in particular, jointly with
Mega Bond, be in a position, irrespective of the voting behavior of other shareholders, to exercise
considerable influence at the General Shareholders’ Meetings, and consequently, over decisions
regarding measures which are presented for a vote at the General Shareholders’ Meetings
(including the election of the member of the Supervisory Board and the approval of important
capital measures). Mr. Chen’s interests as major shareholder could conflict with his duties as CEO
to act in the best interests of the Company and/or the interests of other shareholders and he could
exercise his influence over the Company to the detriment of the Company and/or other
shareholders, which could have material adverse effects on the business, financial condition, and
results of operations of Haikui.

The Company is a holding company whose liquidity depends upon having access to the
liquid funds of its operating subsidiary located in China.

The Company is a holding company without any operating business of its own. Haikui’s operations
are located in China. The Company’s liquidity therefore partly depends upon having access to
dividend distributions from its indirect PRC subsidiary through the Company’s direct subsidiary,
which is a Singaporean holding company. Current PRC regulations permit the payment of dividends
only out of accumulated profits determined in accordance with Chinese accounting standards and
regulations. In addition, the Company’s PRC subsidiary is required to set aside at least 10% of its
after-tax profits each year to fund a statutory reserve fund until such reserves in aggregate reach
50% of its registered capital and may be required to set aside a portion of its profits to fund an
employee welfare fund. These reserves are not distributable as cash dividends.

Under PRC foreign exchange rules and regulations, payments of current account items, including
profit distributions and operating-related expenditures, may generally be made in foreign
currencies without prior approval but are subject to procedural requirements. Strict foreign
exchange controls generally apply to capital account transactions. These transactions must be
approved by and/or registered with the State Administration of Foreign Exchange ("SAFE") or its
local counterparts, and repayment of loan principal, distribution of return on direct capital
investment and investments in negotiable instruments are also subject to restrictions.

There can be no assurance that Haikui will be able to meet all of its foreign currency obligations
under PRC laws or to remit profits out of China. Should the Company’s PRC subsidiary be, or
become, restricted and/or legally prohibited from and/or unable to pay dividends or other
distributions outside of China, this could have material adverse effects on Haikui’s business,
financial condition, and results of operations.


                                                 41
Haikui does not have insurance coverage customary in more economically developed
countries for a business of Haikui’s size.

Insurance companies in China do not offer insurance protection for businesses as extensive as
insurance companies in more developed economies. For example, Haikui does not maintain
product liability insurance and may therefore be unprotected if liability claims are successfully
made against Haikui due to any defects in or low quality of its products. Haikui also does not have
insurance coverage against business disruptions. A lack of insurance coverage could expose Haikui
to substantial financial risks for which Haikui may not be adequately compensated. Haikui does not
maintain separate funds or otherwise set aside reserves for these types of events. Any uninsured
occurrence of loss or damage, litigation or business disruption may result in Haikui’s incurring
substantial costs and the diversion of resources, which could have material adverse effects on
Haikui’s business, financial performance and results of operations.

Haikui has in the past enjoyed tax benefits in China which since 2012 do not apply
anymore.

Under the previous PRC tax regulations, the general enterprise income tax ("EIT") rate for
foreign-invested enterprises was 33% which comprised 30% national and 3% local income tax.
However, in some special zones and regions, different tax rates applied that were considerably
lower under certain conditions. Under the previous tax law certain foreign invested enterprises,
such as Fujian Haikui, were qualified for preferential tax treatment upon satisfaction of certain
criteria. Such preferential tax treatment under the previous PRC enterprise income tax regulations
included a tax holiday of two years full tax exemption followed by a three years term of 50% tax
exemption beginning the first profitable year after previous losses have been made up.

The new EIT Law (the "EIT Law"), which came into effect on 1 January 2008, provides for a
unified tax rate of 25% for both foreign-invested and domestically owned companies. Under the
EIT Law, tax holidays for foreign invested enterprises ("FIEs") gradually phased out over a
transition period from 2007 until 2011. Based on this, and according to a notice issued by the
Dongshan County State Tax Bureau on 9 July 2007, the statutory income tax rate applicable to
Fujian Haikui was 15% in 2007, 18% in 2008, 20% in 2009, 22% in 2010, 24% in 2011, and will
be 25% from 2012 and onwards.

In addition, Fujian Haikui was entitled to an exemption from the statutory income tax for the first
two profitable years of operations (i.e. 2007 and 2008) and thereafter a 50% reduction on its
regular statutory income tax rate for the following three financial years (i.e. 2009 to 2011). Based
on the above, Haikui was entitled not to pay income tax for 2007 and 2008 and was subject to a
reduced actual income tax rate of 10% in 2009 and 11% in 2010, and 12% in 2011. Since 2012
and onwards, no reduced income tax rates and exemptions from statutory income tax apply to
Fujian Haikui, which, thus, will be subject to the 25% statutory income tax rate. Being subject to
the full statutory income tax rate of 25% from 2012 onwards, as compared to an actual tax rate of
10% in 2009, 11% in 2010, and 12% in 2011, will have an adverse impact on the after-tax profits
of Haikui, which could have a material adverse effect on Haikui’s business, financial condition and
results of operations.

Changes in PRC tax laws may have an impact on Haikui’s net profits.

Current tax rules in the PRC and their interpretation, including the applicable tax rates and
exemptions, could be subject to adverse changes in the future. Any change in Haikui’s tax status
or in tax legislation or its interpretation could affect the value of the investments held by the
Company, its ability to pay dividends to shareholders and/or change the after-tax returns to
shareholders. Statements in this Prospectus concerning taxation of Haikui and the Company’s
investors are based on current tax laws and practices that are subject to change. In addition, the
taxation regime applicable in China could change again and could have an adverse impact on the
after-tax profits of Haikui. The occurrence of the above risks could have a material adverse effect
on Haikui’s business, financial condition and results of operations.



                                                42
The Company and Haikui Singapore may be treated as resident enterprises for PRC tax
purposes under the new PRC enterprise income tax laws and therefore be subject to PRC
taxation.

The EIT Law has introduced the concept of a tax resident enterprise ("TRE") defined as an
enterprise which is established in the PRC under the PRC laws and regulations, or which has its de
facto management body in the PRC. TREs are subject to PRC Enterprise Income Tax for their
worldwide income, including income received from their subsidiaries. According to Article 4 of the
Implementing Rules of the EIT Law (the "Implementing Rules"), "de facto management body"
refers to the management body that exercises essential management and control over the
enterprise. As a result, if a holding company located outside the PRC is actually managed by a
management body in China, the overseas company may be regarded as a TRE and subject to EIT
for its worldwide income. According to the interpretation of Article 4 of the Implementing Rules
given by the Chinese State Administration of Taxation ("SAT") on its website, the location of the
de facto management body shall be determined by a substance-over-style method. In particular,
mere off-shore board meetings shall not be sufficient for the de facto management body being
located outside of China. Dividends received by one TRE from another TRE (not listed in the
Chinese stock market) are exempted from EIT.

Most of the members of Haikui’s management are currently located in China and Haikui expects
them to continue to be located in China. However, due to a lack of clear guidance on the criteria
pursuant to which the PRC tax authorities will determine Haikui’s tax residency under the EIT Law,
it remains unclear whether the PRC tax authorities will treat the Company and Haikui Singapore as
PRC tax resident enterprises.

Currently, neither the Company nor Haikui Singapore has been notified by the PRC tax authorities
that they are currently treated as a "resident enterpise" for PRC tax purposes. However, if the
Company and Haikui Singapore are deemed to be PRC tax resident enterprises, the following PRC
tax implications may apply:

·    The Company and Haikui Singapore might both be subject to an enterprise income tax at the
     rate of 25% on their worldwide income, which could have an impact on Haikui’s effective tax
     rate and an adverse effect on Haikui’s net income and results of operations. However, the
     EIT Law provides that dividend income between qualified tax resident enterprises is
     exempted income, which the Implementation Rules have clarified to mean a dividend derived
     by a tax resident enterprise on equity interest it directly owns in another tax resident
     enterprise. It is possible, therefore, that dividends the Company receives through Haikui
     Singapore from Fujian Haikui would be exempted income under the EIT Law and its
     Implementation Rules. In this case, only the Company would be subject to an enterprise
     income tax in the PRC at the rate of 25% on its worldwide income except for dividends
     received from Haikui Singapore.

·    If the Company is deemed to be a PRC tax resident enterprise, the Company would then be
     obliged under the PRC EIT Law to withhold PRC withholding tax on the gross amount of
     dividends the Company pays to shareholders who are non-PRC tax residents. The
     withholding tax rate is 10%, unless otherwise provided under the applicable double taxation
     treaties between China and other countries. Under the double taxation treaty between China
     and Germany, the same withholding tax rate of 10% for dividends applies. Under the PRC
     EIT Law, such withholding tax on dividends is to be deducted by the tax resident enterprise
     from the gross dividends and paid to the competent PRC tax authority on behalf of the non-
     PRC tax resident shareholders. As the Company has issued bearer shares, and no practical
     guidance has been issued by the SAT about the treatment of dividends paid by foreign
     entities considered TREs, the Company may not be able to ascertain whether or not its
     shareholders are non-PRC tax residents, and may not be able to fully comply with the
     withholding requirement in case it is considered a TRE, which subjects it to additional
     uncertainty.




                                               43
·     Further, if the Company is deemed to be a PRC tax resident enterprise, any gain realized on
      the transfer of shares in the Company by non-PRC resident investors will also be subject to a
      10% (if the investor is a company) or 20% (if the investor is a natural person) PRC
      withholding tax, under the EIT Law or PRC Individual Income Tax Law, if such gain is then
      regarded as income derived from sources within China, unless the applicable double taxation
      treaty provides otherwise. In case the 10% or 20% PRC withholding tax, respectively is
      payable for the gains, under PRC tax law, the non-PRC resident enterprise investor or non-
      PRC tax resident individual investors are obliged to declare such tax by themselves with the
      competent PRC tax authority.

If any of the aforementioned risks materializes, the value of an investment in the shares of the
Company may be materially adversely affected.

Risks related to the political, social and legal environment of the People’s Republic of
China

Haikui is subject to general risks relating to business operations in China which are
generally subject to greater economical, political, and legal risks than operations in
more developed economies.

The entire operational business of Haikui is conducted and revenues are generated in China.
Accordingly, Haikui’s business, financial condition, results of operations and prospects are affected
significantly by the economic, political and legal environment and other developments in China.
Investors should thus be aware that Haikui’s operations are subject to greater risks than
operations in more developed markets, including significant legal, economic and political risks.
Moreover, emerging economies like China are subject to rapid change and the information set out
herein may therefore become outdated quickly. Investments in emerging markets or in companies
that operate in emerging markets are generally exposed to additional risks and are generally only
suitable for sophisticated investors who fully appreciate the significance of the risks involved.

The Chinese "Provisions on the Acquisition of Domestic Enterprises by Foreign
Investors" (the "M&A Provisions") may have a material adverse effect on Haikui.

On 8 August 2006, six Chinese regulatory agencies, including the Ministry of Commerce
("MOFCOM") and the China Securities and Regulatory Commission ("CSRC"), promulgated the
Provisions for the Acquisitions of Domestic Enterprises by Foreign Investors ("M&A Provisions"),
which came into effect on 8 September 2006 and were further amended by MOFCOM on 22 June
2009. The M&A Provisions provide, among others, that an offshore special purpose vehicle
("SPV") which is formed by Chinese legal entities and/or individuals for indirect overseas listings
and that directly or indirectly controls Chinese companies must obtain the approval of the CSRC
prior to the listing and trading of its shares on a foreign stock exchange. On 21 September 2006,
the CSRC published on its official website a notice specifying the documents and materials required
to be submitted to it by SPVs seeking CSRC approval of a foreign listing. A number of additional
requirements must be fulfilled in the course of an initial public offering, the violation of which may
lead to regulatory actions or other sanctions by the CSRC or other Chinese regulatory agencies. In
addition to the provisions relating to foreign indirect listings, the M&A Provisions also stipulate that
a Chinese natural person or legal person must obtain approval from MOFCOM before acquiring an
affiliated Chinese company via a foreign company established or controlled by such Chinese
natural or legal person.

Various transactions were concluded during Haikui’s restructuring that took place following the
effective date of the M&A Provisions prior to listing. In March 2007, Fujian Haikui became a foreign
invested enterprise from a Chinese domestic company as a result of Haikui Singapore, a Singapore
company, whose entire share capital was owned by an independent third party at that time,
acquiring 30% equity interests in Fujian Haikui from Mr. Chen Zhenkui. In April 2007, Mr. Chen
Zhenkui acquired a controlling interest in Haikui Singapore. Through a share increase in April 2007
and a share transfer in November 2007, Fujian Haikui became a foreign invested enterprise wholly
owned by Haikui Singapore.

                                                  44
The Company believes that the MOFCOM and CSRC approval requirements under the M&A
Provisions do not apply to the transfer of shares in Fujian Haikui to Haikui Singapore in March
2007 because Haikui Singapore was legally and beneficially owned by a non-PRC person not
affiliated with Mr. Chen Zhenkui at the time of such transfer. The Company further believes that
neither the subsequent increase and transfer of the shares in Fujian Haikui, in April 2007 and
November 2007, respectively, nor Fujian Haikui’s indirect transfer to the Company nor the Offering
are subject to such approval requirements under the M&A Provisions because Fujian Haikui
became a foreign invested enterprise in March 2007 and thereafter the M&A Provisions were not
applicable to it.

However, there can be no assurance that the MOFCOM or the CSRC will agree with this view. The
MOFCOM or the CSRC may consider the various steps relating to Haikui’s corporate restructuring
as one combined transaction which may require MOFCOM approval under the M&A Provisions. In
addition, the MOFCOM or the CSRC may hold the view that M&A Provisions are applicable to the
subsequent share increase and transfer of Fujian Haikui following it becoming a foreign invested
enterprise and require the share increase and transfer to be approved by the MOFCOM and the
listing of the Company’s shares to be approved by the CSRC. It cannot be ruled out that the
MOFCOM or the CSRC would ultimately refuse to grant such approval. If an approval is required
from the MOFCOM or the CSRC and as long as such approval has not been granted, profits of
Fujian Haikui could be prevented from being distributed to its parent company and to the Company
and/or loans could be prevented from being granted by the Company to Fujian Haikui. Any of
these consequences could have material adverse effects on the business, financial condition and
results of operations of Haikui.

State Administration of Foreign Exchange (SAFE) regulations relating to offshore
investments by PRC residents or passport holders may adversely affect Haikui’s
business operations and financing alternatives.

In October 2005, SAFE issued a regulation regarding offshore investments by PRC residents,
known as SAFE Notice 75. It requires PRC residents to register with and receive approval from
SAFE or its local counterparts in connection with investment activities regarding offshore special
purpose vehicle companies. In May 2007, SAFE issued Notice 106 and in May 2011 SAFE issued
Notice 19 which both provide additional guidance as to registration requirements under SAFE
Notice 75. Since some of the Company’s current direct or indirect shareholders are PRC residents,
Haikui is affected by the registration requirements imposed by SAFE Notice 75. Further, under
SAFE Notice 75, such shareholders will also be required to amend their SAFE registrations under
certain circumstances, including upon any further transfer of equity interests as well as any
material change in the capital of the offshore special purpose vehicle companies. In addition, each
of the Company’s direct or indirect PRC shareholders is required to make additional amendments
to its SAFE registration within 30 days of this Offering or if any other future changes in its holdings
of the Company’s shares are made. Mr. Chen Zhenkui, Mr. Huang Zhenping and Mr. Tang Hui, the
PRC-resident shareholders of the Company, have already made proper registrations with the
Fujian SAFE in respect of the setting up special purpose vehicle companies in Singapore and
Germany. Mr. She Dongpeng, who will become a shareholder of the Company upon the
registration of the implementation of the IPO Capital Increase in the commercial register, may be
required to make foreign exchange registrations under SAFE Notice 75 with the relevant SAFE
branch.

The failure or inability of any of the Company’s current or future direct or indirect shareholders,
whose actions the Company does not control, to obtain any required approvals or to make any
required registrations in a timely manner could subject the Company’s direct or indirect PRC
shareholders to future registration under SAFE Notice 75, subject Haikui to fines and legal
sanctions, restrict the Company’s intended investments in its PRC subsidiaries or limit Haikui’s
ability to make distributions or pay dividends and could thus have material adverse effects on the
business, financial condition and results of operations of Haikui.




                                                  45
PRC regulations pertaining to loans and direct capital investments by offshore parent
companies to PRC entities may delay or prevent Haikui from using the proceeds of this
Offering.

In utilizing the proceeds of this Offering to finance Haikui’s business, the Company, as a holding
company, or Haikui Singapore may make loans or additional capital contributions to Fujian Haikui,
the PRC subsidiary of the Company which qualifies as a FIE under PRC law. Any loans by an
offshore parent company to a FIE established by it are subject to approvals and/or registration
requirements and must be within the margin between the FIE’s total investment amount and
registered capital. Further, loans to FIEs have to be registered with SAFE or its local counterpart.
In addition, if the Company or Haikui Singapore finances the operating entities of Haikui in China
through additional capital contributions to Fujian Haikui, the amount of these capital contributions
must be approved by and registered with the competent government authorities. There can be no
assurance that Haikui will be able to obtain these government registrations or approvals on a
timely basis, if at all, with respect to future loans or capital contributions by the Company or
Haikui Singapore to Fujian Haikui in China. If Haikui fails to receive such registrations or approvals,
the ability to use the proceeds of this Offering and its ability to fund and expand the operational
business in China could be adversely affected, which could have material adverse effects on the
business, financial condition and results of operations of Haikui.

Economic instability in China could adversely affect Haikui’s business.

The Chinese economy differs from the economies of most developed countries in many respects,
including the amount of government involvement, the level of development, the growth rate, the
control of foreign exchange, and the allocation of resources. In the past, Chinese economic
reforms have in general led to increased economic growth. While the Chinese economy has thus
grown significantly in the past 30 years, the growth has been uneven geographically among
various sectors of the economy, and during different periods. There can be no assurance that the
Chinese economy will continue to grow, or that if there is growth, such growth will be steady and
uniform, or that if there is a slowdown, such slowdown will not have a negative effect on Haikui’s
business. Possible risks for the Chinese economy include, among others, significant declines in
gross domestic product, hyperinflation, an unstable currency, high government debt relative to
gross domestic product, a weak banking system providing limited liquidity to Chinese enterprises,
rising unemployment due to further privatization of state-owned enterprises and rising costs
triggered by environmental damages - notably air pollution, soil erosion, and the steady fall of the
water table. The occurrence of one or several of these risks could have material adverse effects on
the business, financial condition and results of operations of Haikui.

A destabilization of the political system could threaten China’s economic liberalization.

While the PRC economy has changed fundamentally from a centrally planned system to a more
market-oriented economy over the last three decades, the political system in China still operates
under communist control. Although political conditions in China seem to be generally stable,
changes may occur in its political system which might affect the ownership or operation of Haikui’s
interests, including, among others, changes in government as well as in legislative and regulatory
regimes.

A material change in China’s economic liberalization triggered by political disruptions or by other
means could impact the country’s economic growth in general and Haikui’s business in particular.
Social instability could increase public support for renewed centralized authority, and nationalism
or violence could lead to a tougher stance by the Chinese government on foreign investors
operating in China or on foreign investment in general. Any such developments could have
material adverse effects on the business, financial condition and results of operations of Haikui.




                                                  46
Health epidemics and outbreaks of contagious diseases, including avian influenza,
severe acute respiratory syndrome (SARS) or swine flu, could materially and adversely
affect the Chinese economy.

Haikui’s business could be adversely affected by the effects of avian flu, SARS or other epidemics
or outbreaks such as the swine flu. China reported a number of cases of SARS, a highly contagious
form of atypical pneumonia, in 2003, which resulted in the closure by the PRC government of
many businesses in May and June of 2003 to prevent the transmission of SARS. In recent years,
there have been reports of occurrences of avian flu in various parts of China, including a few
confirmed human cases and deaths. Any prolonged recurrence of avian flu, SARS or the prolonged
onset of swine flu or other adverse public health developments in China may have a material
adverse effect on Haikui’s business operations. These could include illness and loss of its
management and key employees, as well as temporary closure of its offices or adverse effects on
its distribution network. Such losses would severely disrupt the Company’s business operations.
Haikui has not adopted any written preventive measures or contingency plans to combat any
future outbreak of avian flu, swine flue, SARS or any other epidemic.

Since all of Haikui’s operations and the majority of its customers and suppliers are based in China,
an outbreak of swine flu, avian flu, SARS or other contagious diseases in China or in neighbouring
countries, or the perception that such an outbreak could occur, as well as the measures taken by
the governments of countries affected, could have material adverse effects on the business,
financial condition and results of operations of Haikui.

The PRC legal system and national taxation laws contain inherent uncertainties and
inconsistencies.

As most of Haikui’s business is conducted in China, the majority of its operations are governed by
PRC laws. China is still in the process of developing a comprehensive statutory framework, and its
legal system is still considered to be underdeveloped in comparison with legal systems in most
western countries. In particular, PRC foreign investment laws and company law as well as
provisions for the protection of shareholders’ rights and access to information are less developed
and confer less protection than those applicable to companies incorporated in Germany or other
member states of the European Economic Area ("EEA"). The following factors create uncertainty
with respect to Haikui’s business:

·     inconsistencies between and among the constitution, national law, government decrees as
      well as governmental, ministerial and local orders, decisions, resolutions and other acts;

·     conflicting local, regional and national rules and regulations;

·     inconsistent use of terms for different rules by different localities and government
      departments;

·     lack of judicial and administrative guidance on interpreting legislation, in particular, tax
      legislation;

·     absence of a solid system of checks and balances between the different parts of the
      government;

·     relative inexperience of judges and courts in interpreting legislation;

·     high degree of discretion on the part of governmental authorities, which can result in
      arbitrary actions such as suspension or termination of licenses or approvals, and relatively
      untested bankruptcy procedures that might be vulnerable to abuse; and

·     differences in the application of norms between different local authorities.

Furthermore, many laws, regulations and legal requirements have only slowly been adopted by the
central or local governments, and their implementation, interpretation and enforcement may

                                                  47
involve uncertainty due to the lack of established practices available for reference. Depending on
the government agency or how an application or a case is presented to such agency, Haikui may
receive less favourable interpretations of law than its competitors.

Also PRC tax laws contain uncertainties stemming from a variety of factors. In particular, it is
uncertain whether and to what extent Haikui's PRC subsidiary would be liable for any potential
income tax liabilties of its previous shareholders arising from dividend payments or share transfers
made in the past to the extent that the shareholders are unwilling or unable to pay such income
taxes.

In addition, any litigation in China may be protracted and result in substantial legal costs and
diversion of resources and management attention. Similarly, legal uncertainty in China may limit
the legal protection available to potential litigants. The occurrence of one or several of these risks
could have material adverse effects on the business, financial condition and results of operations of
Haikui.

The judiciary’s lack of independence in PRC and limited experience and the difficulty of
enforcing court decisions and governmental discretion in enforcing court orders could
prevent Haikui from obtaining effective remedies in a court proceeding.

China’s judicial system may not be as independent or immune to economic, political and
nationalistic influences as judicial systems in European jurisdictions. The court system in China is
largely understaffed and underfunded. Since courts in China are financially dependent on the
respective local governments, judges tend to favour the economic interests of the municipalities or
provinces and the enterprises located there. The independence of judges is further undermined by
the fact that Chinese judges are only appointed for a limited period of time and may be dismissed
during their term of office. Many older judges have not had any prior legal education. Courts in
China are often inexperienced in the area of business law. Not all PRC legislation and court
decisions are readily available to the public or organized in a manner that facilitates
understanding. Enforcement of court orders can, in practice, be very difficult in China. Additionally,
court decisions are often used in furtherance of political and commercial aims. Haikui might be
subjected to such claims by competitors or other parties and may not be able to receive a fair
hearing in the course of the respective trial or legal procedure. Judicial decisions in China can also
be unpredictable and may not provide effective remedies. These uncertainties also extend to
property rights. Expropriation or nationalization of the Company’s PRC subsidiary, its assets or
portions thereof, potentially without adequate compensation, could have material adverse effects
on the business, financial condition and results of operations of Haikui.

There are difficulties in seeking recognition and enforcement of foreign judgments in
China.

Haikui’s assets are largely located in China and most of its management personnel and directors
reside there. The Company is a holding company without any significant operational business of its
own. China has not entered into treaties or arrangements providing for the recognition and
enforcement of judgments made by the courts of Germany or most other jurisdictions, including
judgments obtained in relation to claims investors may make with regard to this Offering. As a
result, it will be difficult or impossible for investors to affect service of process or enforce
judgments from courts of other jurisdictions against Haikui or its assets, management personnel or
directors in China.

Restrictions might be imposed on foreign investments in PRC companies.

As part of China’s accession to the World Trade Organisation ("WTO") in 2001, China undertook
to eliminate certain trade-related investment measures and to open up specified industry sectors
that had previously been closed to foreign investment. Even though China has lived up to most of
its WTO commitments, foreign investors still encounter barriers in practice as some of the newly
enacted or modified laws and regulations are enforced in an inconsistent manner by different
authorities. In addition, there is no guarantee that the Chinese government will not tighten its

                                                 48
stance on foreign investors in other areas not covered by the WTO commitments and that control
over companies operating in certain sectors considered to be politically sensitive will not change.

The MOFCOM and the National Development and Reform Commission ("NDRC") have issued the
Foreign Investment Industry Guidance Catalogue (the "Catalogue") that divides certain
investment projects into three categories: encouraged, restricted and prohibited, with industries
and sectors that are not mentioned or listed deemed to be permitted. Based on the latest version
of the Catalogue (effective as of 31 January 2012), the processing of seafood is classified as
"encouraged". The Catalogue is, however, regularly revised. Should the processing of seafood be
subject to foreign investment restrictions or prohibitions imposed by any future amendments to
the Catalogue, this could have a material adverse effect on Haikui’s business, financial condition
and results of operations.

Changes in labour law and policy in the PRC could affect the results of operations.

On 29 June 2007, the PRC Government promulgated a new labour law namely, the Labour
Contract Law of the PRC ("Labour Law"), which became effective on 1 January 2008. The new
Labour Law was introduced to enhance rights for mainland workers, including open-ended work
contracts and severance pay. The new Labour Law requires new actions to be taken by employers
to ensure the welfare of their employees are protected, by no means exhaustive, this includes,
employers to provide written contracts to their workers, restricts the use of temporary labourers
and makes it harder to lay off employees.

Under the "Interim Regulation on the Collection and Payment of Social Insurance Premiums",
"Regulation on Labour Injury Insurance" and some local regulations on the maternity insurance,
Haikui is required to make relevant contributions for the benefit of the employees. In the effort to
comply with theses regulations, Haikui has been practicing social insurance coverage for the
employees which includes basic pension insurance, unemployment insurance, medical care
insurance and industrial accident insurance.

However, there are no assurances that the PRC Government will not make any further
amendments to the Labour Law and the insurance coverage issues which may affect the financial
result. Further restrictions in the Labour Law and possible increases of social insurance systems
contributions could materially adversely affect Haikui’s business, financial condition and results of
operations.

Risks related to the industry and statistical data

The accuracy of industry and statistical data included in the Prospectus may not be
reliable.

Certain industry and statistical data included in this Prospectus has been derived from publicly
available sources the reliability of which may vary. Such statistical data as well as other statistical
and industry data used in this Prospectus and the source data on which such information is based
may not have been extracted or derived from a source in a manner analogous to that used in
other countries.

Selected information relating to the Chinese seafood processing industry and statements made
regarding Haikui’s position in the industry were derived from and extracted from "The Seafood
Processing Industry in China", Independent Market Research Report prepared by Infobusiness
Research & Consulting Sdn Bhd ("Infobusiness Research") dated 23 December 2010 and
updated on 28 February 2012 (the "Infobusiness Report"). Due to the limited availability of
public information about the seafood industry in China, Haikui specifically commissioned
Infobusiness Research to draft the Infobusiness Report for the purpose of extracting certain
information and statistics from that Infobusiness Report in this Prospectus. The Company has
accurately reproduced information derived from third parties, including the Infobusiness Report,
and, insofar as the Company is aware and is able to ascertain from information published by third
parties, has not made any omission which would render the reproduced information inaccurate or

                                                  49
misleading. Market studies are often based on information and assumptions that may not be
accurate or appropriate, and their methodology is inherently predictive and speculative. Neither
the Company nor the Underwriters have independently verified the figures, market data or other
information on which third parties, including Infobusiness Research, have based their studies.
Accordingly, the Company and the Underwriters assume no responsibility and make no
representation or warranty as to the accuracy of any information derived from information and
studies of third parties included in this Prospectus.

Therefore, neither Haikui nor any other party providing such information can give any assurance
that any such information is accurate or, in respect of projected data, that such projections have
been based on correct information and assumptions or that they will prove to be accurate. Any
such inaccuracies may provide investors with an incomplete overview of certain specific industry
and statistical information in the Prospectus.

Risks related to the Offering

Public trading in the Company’s shares might not develop.

Prior to the Offering, there was no public trading in the Company’s shares. The offer price for the
shares will not necessarily provide any indication of the stock exchange price at which the Offer
Shares will subsequently be traded on the Frankfurt Stock Exchange or any other exchange. Given
the relatively small size of the Offering, no assurance can be given that liquid trading in the shares
of the Company will develop after the Offering and that the stock exchange price will not fall below
the offer price. The Company cannot forecast to what extent investors’ interest in its shares will
foster trading, nor whether a liquid trading market will develop. The stock exchange price of the
Company’s shares could become subject to greater volatility and consequently buy and sell orders
might be executed less efficiently. Under certain circumstances, investors might not be able to sell
their shares at the purchase price fixed for the Offering or at a higher stock exchange price, or
might not be able to sell them at all.

A volatile stock exchange price for the shares might develop.

After the Offering, the stock exchange price of the Company’s shares could fluctuate considerably,
especially because of fluctuating actual or forecasted results, revised earnings outlooks, the failure
to meet analysts’ expectations, changed economic conditions in general, or other factors. The
general volatility of stock exchange prices could also exert pressure on the stock exchange price of
the Company’s shares without any direct connection with Haikui’s business, its financial condition
or earnings position, or its business prospects. As the shares are growth stocks and are likely to be
influenced by various developments in China, the Company’s shares are particularly susceptible to
fluctuations.

The sale of shares by the Existing Shareholders could affect the share price.

Immediately upon the completion of the Offering, i.e. after the registration of the implementation
of the IPO Capital Increase in the commercial register and the placement of the Offer Shares
amongst investors, assuming placement of all Offer Shares, the Existing Shareholders and Mr. She
Dongpeng will hold approximately 85.00% of the share capital (or approximately 86.96% if the
Greenshoe Option is not exercised) and an equivalent percentage of the Company’s voting rights.
Haida Holdings, Praise Ocean, and Mr. Alan Gey have agreed with the Managers that, for the first
twelve months after the listing of the shares of the Company on the Frankfurt Stock Exchange,
they will not dispose of shares of the Company other than the Greenshoe Shares and shares
purchased over the stock exchange after the Offering. Mega Bond, Everwift, Palm Cove and Mr.
She Dongpeng have for the same period agreed with the Managers not to carry out any of the
aformentioned transactions without the Managers' prior consent, whereas Palm Cove and Mr. She
Dongpeng will on a pro rata basis be automatically released from their lock-up obligations for such
number of their shares if and to the extent that the New Shares sold in the Offering would amount
to less than 11% ofthe Company's share capital after the Offering. The Company cannot, however,
give any assurance that the Existing Shareholders will always observe and comply with these

                                                 50
undertakings and/or that the Managers will be in the position to enforce that market protection
agreement. Any substantial sale of shares by the Existing Shareholders or by Mr. She Dongpeng
after the Offering could have a material adverse effect on the market price of the Company's
shares.

There are risks for short sales before the delivery of the shares.

The underwriting agreement provides that the Managers may terminate the underwriting
agreement under certain circumstances. If the underwriting agreement is terminated, the Offering
will not take place. Investors who have engaged in so-called "short sales" will bear the risk of
being unable to cover such short sales through the delivery of shares.

In particular, if the Offering is not implemented in full, the Offering will be relatively
small and the Company's free float after the listing will be relatively low, which may
have an adverse effect on the tradability of the shares and on the shareholder structure
of the Company.

The Offering consists of 1,725,000 no par value ordinary bearer shares (Inhaber-Stückaktien) of
the Company, including 1,500,000 New Shares, and 225,000 Greenshoe Shares. In case all of the
1,725,000 Offer Shares are allotted to investors, including a full exercise of the Greenshoe Option,
the Company’s free float will amount to approximately 15.00% of its total share capital. However,
the actual number of Offer Shares that will be allotted to investors, i.e. the placement volume, will
be jointly determined by the Company and the Bookrunners on or around 10 May 2012 based on
the orders received using the order book prepared during the bookbuilding process. There is no
guarantee that all of the Offer Shares will eventually be placed with investors. If the overall
placement volume is significantly lower than the number of Offer Shares which form the subject
matter of the Offering, the free float will be significantly lower than the percentage stated above.
Even if all Offer Shares are eventually placed with investors, the Company's free float will be
relatively low. This may have a material adverse effect on the tradability of the shares and on the
shareholder structure of the Company. The materialization of any of the above risks could have a
material adverse effect on the value of the shares of the Company.

Negative publicity on listed PRC companies could have an adverse effect on the price of
the Company's shares.

In 2010 and 2011, allegations and investigations were made about accounting fraud with respect
to certain Chinese companies listed on overseas stock exchanges, in particular in Canada and the
United States, which resulted in some of the companies concerned being officially delisted. This
has caused a substantial amount of negative publicity about accounting and corporate governance
related issues in Chinese companies listed on overseas stock exchanges. This led to considerable
decreases in the stock exchange prices of the concerned companies but also investors' perception
about Chinese issuers in general was negatively affected. Investor perception of Haikui and its
shares could be affected by such negative publicity even if there is no direct connection with
Haikui’s business, governance, financial condition or earnings position, or its business prospects.
This could have a material adverse effect on the price of the Company's shares.




                                                 51
                                    GENERAL INFORMATION

Responsibility for the Content of the Prospectus

Haikui Seafood AG, Hamburg, Germany, (the "Company" or "Haikui Seafood AG" and
collectively with its direct and indirect subsidiaries "Haikui" or "Haikui Group"), biw Bank für
Investments und Wertpapiere AG, Willich, Germany ("biw AG"), and Pareto Securities AS, Oslo,
Norway ("Pareto") assume responsibility for the contents of this prospectus (the "Prospectus")
pursuant to Section 5, paragraph 4 of the German Securities Prospectus Act
(Wertpapierprospektgesetz) and declare that the information contained therein is, to their
knowledge, correct and contains no material omission.

Subject matter of this Prospectus

For purposes of the Offering, this Prospectus relates to a total of 1,725,000 no par value ordinary
bearer shares (Inhaber-Stückaktien) consisting of:

·     1,500,000 no par value ordinary bearer shares from a capital increase against cash
      contributions resolved by an extraordinary general meeting of shareholders on 16 March
      2012 (the "New Shares"); and

·     225,000 no par value ordinary bearer shares from the holdings of the Greenshoe
      Shareholders in connection with a potential over-allotment (the "Greenshoe Shares", and
      together with the New Shares, the "Offer Shares").

The Company, the Greenshoe Shareholders and the Bookrunners reserve the right to reduce the
number of Offer Shares or to allocate a smaller number of shares to investors than the total
number of Offer Shares.

For purposes of admission to trading on the Regulated Market (Regulierter Markt) of the Frankfurt
Stock Exchange in the sub-sector of the regulated market with additional obligations arising from
the listing (Prime Standard), this Prospectus relates to a total of up to 11,500,000 no par value
ordinary bearer shares consisting of:

·     the current share capital of 10,000,000 no par value ordinary bearer shares (the "Existing
      Shares"); and

·     the New Shares.

The New Shares will be and the Greenshoe Shares have been created under, and are subject to,
German law. Each of the Company’s shares has a notional amount of the share capital of EUR 1.00
and is vested with full dividend rights for the financial year 2012.

Forward-looking statements

This Prospectus contains certain forward-looking statements, which relate to the business, the
financial development, and the results of operations of Haikui as well as the business divisions in
which Haikui operates. Forward-looking statements relate to future facts, events and other
circumstances which are not historical facts.

In particular, this applies to statements containing information on future financial results, plans,
and expectations regarding the business and management of Haikui, its growth and profitability,
and general economic and regulatory conditions, and other factors affecting Haikui.

Forward-looking statements are based on current estimates and assumptions made by the
Company to the best of its knowledge. Such forward-looking statements are based on assumptions
and are subject to risks, uncertainties and other factors that could cause the actual financial
condition and results of Haikui to differ materially from and fail to meet the expectations expressed
or implied by such forward-looking statements. The business of Haikui is subject to a number of

                                                 52
risks and uncertainties that could also cause a forward-looking statement, estimate or prediction to
become inaccurate. Accordingly, prospective investors are strongly advised to read the sections of
the Prospectus, "Summary" "Risk Factors", "Management’s Discussion and Analysis of Financial
Condition and Results of Operations", "Industry Overview", "Business", "Regulatory Environment",
and "Recent Developments and Outlook" which contain a detailed description of factors that have
an impact on the business of Haikui and the market in which Haikui operates.

In light of these risks, uncertainties and assumptions, it is possible that the future events
mentioned in this Prospectus may not occur, and that forward-looking estimates and forecasts
derived from third-party studies reproduced in this Prospectus may prove to be inaccurate (see:
"General Information - Information Derived from Third Parties"). Moreover, neither the Company
nor the Underwriters assume any obligations, except as required by law, to update any forward-
looking statements or to conform such forward-looking statements to future events or
developments.

Information derived from third parties

This Prospectus contains numerous references to data, statistical information, and studies
prepared by third parties. In the preparation of this Prospectus, the following sources have been
relied upon:

·     Infobusiness Research & Consulting Sdn Bhd, "The Seafood Processing Industry in China,
      Independent Market Research Report" prepared for China Haikui Ltd., dated
      23 December 2010 and updated on 28 February 2012 (the "Infobusiness Report");

·     Food and Agricultural Organization of the United Nations ("FAO"), "Recent Developments in
      Fish Trade", 2010, ("FAO Recent Developments 2010");

·     FAO, "Recent Developments in Fish Trade", October 2011, ("FAO Recent Developments
      2011");

·     FAO, Yearbook of Fishery and Aquaculture Statistics 2008, ("FAO Yearbook 2008");

·     FAO, Yearbook Fishery and Aquaculture Statistics 2009, ("FAO Yearbook 2009");

·     FAO, FAOSTAT, http://faostat.fao.org, ("FAOSTAT");

·     FAO, "The state of world fisheries and aquaculture 2010", ("FAO Fisheries and
      Aquaculture 2010");

·     Euromonitor International: "Canned/Preserved Food in China", October 2011 ("Euromonitor
      Canned/Preserved Food in China, 2011");

·     Euromonitor International: "Frozen Processed Food in China", October 2011 ("Euromonitor
      Frozen Processed Food in China, 2011");

·     International  Monetary     Fund,    World  Economic     Outlook, September  2011;
      http://www.imf.org/external/pubs/ft/weo/2011/02/index.htm ("International Monetary
      Fund, World Economic Outlook Database, September 2011");

·     International Monetary Fund, World Economic Outlook Update,                  January 2012;
      http://www.imf.org/external/pubs/ft/weo/2012/update/01/pdf/0112.pdf          ("International
      Monetary Fund, World Economic Outlook Update, January 2012");

·     PRC National Bureau of Statistics, Yearbook 2010; http://www.stats.gov.cn ("PRC National
      Bureau of Statistics, Yearbook 2010");

·     PRC National Bureau of Statistics, Press Release dated 30 January 2012;


                                                53
·    PRC National Bureau of Statistics, Press Release dated 20 January 2011;

·    Population Division of the Department of Economic and Social Affairs of the United Nations
     Secretariat,      "World     Population     Prospects:     The        2010       Revision",
     http://esa.un.org/wpp/index.htm, ("United Nations, World Population Prospects
     2010");

·    United States Department of Agriculture ("USDA"), Foreign Agricultural Service, Global
     Agricultural Network ("GAIN"), "Fishery Products Annual Report", dated 1 July 2009,
     ("USDA Foreign Agricultural Service 2009");

·    USDA, Foreign Agricultural Service, GAIN, "Fishery Products Annual Report", dated
     31 December 2010, ("USDA Foreign Agricultural Service 2010");

·    USDA, Foreign Agricultural Service, GAIN, "Fishery Products Annual Report", dated
     31 December 2011, ("USDA Foreign Agricultural Service 2011");

·    International Food Policy Research Institute and World Fish Centre, "Fish to 2020, Supply
     and Demand in Changing Global Markets", 2003 ("International Food Policy Research
     Institute").

·    PRC State Oceanic Administration, "Marine Environment Information Report no. 6",
     December 2011,
     http://www.soa.gov.cn/soa/workservice/download/webinfo/2011/12/1324787905864963.ht
     m ("Marine Environment Information Report no. 6")

·    Oanda Corporation for currency translations (www.oanda.com/currency/historical-rates/)
     ("Oanda").

The Company has accurately reproduced information derived from third parties and, insofar as the
Company is aware and is able to ascertain from information published by third parties, has not
made any omission which would render the reproduced information inaccurate or misleading.
Market studies are often based on information and assumptions that may not be accurate or
appropriate, and their methodology is inherently predictive and speculative. This Prospectus also
contains estimates made by the Company relating to market data of third parties that are based
on published market data or figures from publicly available sources. Neither the Company nor the
Underwriters have independently verified the figures, market data or other information on which
third parties have based their studies. Accordingly, the Company and the Underwriters assume no
responsibility and make no representation or warranty as to the accuracy of any information
derived from information and studies of third parties included in this Prospectus.

Documents available for inspection

For the duration of the validity of this Prospectus, copies of the following documents will be
available for inspection in printed form during regular business hours at the offices of the
Company:

·    the Company’s Articles of Association (Satzung);

·    the audited annual consolidated financial statements under IFRS of Haikui Singapore, for the
     financial years 2009, 2010, and 2011 (the "Historical Consolidated Financial
     Statements");

·    the audited consolidated financial statements under IFRS of the Company for the short
     financial year from 24 February 2011 until 31 December 2011 (the "Consolidated AG
     Financial Statements");




                                               54
·     the audited financial statements under the German Commercial Code (HGB) of the Company
      for the short financial year from 24 February 2011 until 31 December 2011 (the "Individual
      AG Financial Statements").

Future annual reports and interim reports of the Company will be available at the Company's
website.

Notes regarding financial and currency data

Certain numerical data (including certain percentage rates) are subject to rounding adjustments
that were carried out according to established commercial standards. As a result, the aggregate
amounts in this Prospectus may not correspond in all cases to the individual amounts contained in
the underlying sources. Figures stated in tables may not exactly add up to the total values that
may also be stated in these tables. Percentage rates quoted in the Prospectus were, however,
calculated on the basis of actual values rather than rounded values. Accordingly, percentages
quoted in the Prospectus may in some cases differ from percentage rates based on the rounded
values. Some figures (including percentages) in this Prospectus have been rounded to the nearest
whole number. As a result, figures in tables so rounded may in some cases not add up to the exact
totals shown in the tables. Percentages quoted in the text were, however, calculated on the basis
of actual values rather than the rounded values. Accordingly, percentages quoted in the text may
in some cases differ from percentages based on the rounded values.

The operating currency of Haikui is Renminbi ("RMB") whereas the Historical Consolidated
Financial Statements of Haikui Singapore and the Consolidated AG Financial Statements and the
Individual AG Financial Statements of the Company are in EUR. The RMB financial data has been
translated into EUR using the following exchange rates (Source: Oanda):

                                                        31 December

                                  2009                      2010                      2011

                               EUR per RMB 1.00          EUR per RMB 1.00         EUR per RMB 1.00

End of period                              0.1023                   0.1145                    0.1213

Average                                    0.1054                   0.1117                    0.1111




For financial data referring to the end of a period, such as balance sheet data, the rates for the
end of the respecive period have been used. For financial data referring to the whole period, such
as income statement data, average exchange rates for the respective periods have been used.
Accordingly, the presentation of the financial statements in Euro for the periods under review is
not fully comparable to each other because different RMB/EUR exchange rates were used for each
period under review.

All information with respect to currencies in this Prospectus, to the extent not otherwise indicated,
refers to EUR. For the translation of RMB amounts which are not related to the financial
statements of Haikui, the exchange rate of EUR 0.1213 per RMB 1.00 as at 31 December 2011 has
been used. For the translation of amounts denominated in other currencies, the applicable
exchange rate as at 31 December 2011 has been used.

Amounts used in industry reports may have been based on different exchange rates.

Amounts denominated in other currencies are expressly identified as such with the corresponding
currency designation or currency symbol.




                                                 55
Auditors

The Historical Consolidated Financial Statements of Haikui Singapore as at and for the years ended
31 December 2009, 31 December 2010, and 31 December 2011 under IFRS, the consolidated
financial statements of the Company for the short financial year from 24 February 2011 until
31 December 2011 under IFRS (the "Consolidated AG Financial Statements") and the financial
statements under the German Commercial Code (HGB) of the Company for the short financial year
from 24 February 2011 until 31 December 2011 (the "Individual AG Financial Statements")
have been audited by Crowe Horwath Deutschland GmbH, Wirtschaftsprüfungsgesellschaft, Pariser
Platz 7, 70173 Stuttgart, Germany ("Crowe Horwath"), independent accountants, as stated in
their reports appearing elsewhere herein and each are accompanied by an unqualified auditor’s
report, copies of which are included in this Prospectus. Crowe Horwath is a member of the German
Chamber of Public Accountants (Wirtschaftsprüferkammer).




                                               56
                                         THE OFFERING

Subject matter of the Offering

The Offering consists of a public offering in Germany and Luxembourg and private placements to
institutional investors outside Germany, Luxembourg, and the United States.

The Offering consists of 1,725,000 no par value ordinary bearer shares (Inhaber-Stückaktien) of
Haikui Seafood AG, each having a notional amount of the share capital of EUR 1.00 and each
vested with full dividend rights for the financial year 2012, consisting of:

·     1,500,000 no par value ordinary bearer shares from a capital increase against cash
      contributions resolved by an extraordinary general meeting of shareholders held on 16 March
      2012 (the "New Shares"); and

·     225,000 no par value ordinary bearer shares from the holdings of the Greenshoe
      Shareholders in connection with a potential over-allotment (the "Greenshoe Shares", and
      together with the New Shares, the "Offer Shares").

The Company, the Greenshoe Shareholders and the Bookrunners reserve the right to reduce the
number of Offer Shares or to allocate a smaller number of shares to investors than the total
number of Offer Shares.

The nominal value of the shares that are the subject of this Offering represents a total of EUR
1,725,000.00 of the share capital. Assuming placement of all New Shares, upon implementation
and registration of the capital increase for the issuance of the New Shares, the share capital will
amount to EUR 11,500,000.00. The New Shares will be and the Greenshoe Shares have been
created under, and are subject to, German law.

In connection with the Offering, assuming placement of all 1,725,000 Offer Shares (including
225,000 shares available for an over-allotment), 15% of the shares of the Company will be
offered, calculated based on the total number of shares of the Company after the Offering. The
actual number of Offer Shares that will be allotted to investors, i.e. the placement volume, is
expected to be published at the earliest on 10 May 2012 by means of an ad-hoc notice on an
electronic information system and on the Company’s website (www.haikui-seafood.com).

In connection with the Offering, the Company will receive the net proceeds from the sale of the
New Shares, the Greenshoe Shareholders will receive the net proceeds from the sale of the
Greenshoe Shares, if any.

BankM – representative office of biw Bank für Investments und Wertpapiere AG, Mainzer
Landstrasse 61, 60329 Frankfurt am Main, Germany ("biw AG - BankM"), and Pareto Securities
AS, Dronning Mauds gt. 3, P.O. Box 1411 Vika, N-0115 Oslo, Norway, are Joint Lead Managers and
Bookrunners. biw AG - BankM is the dependent investment banking arm of biw Bank für
Investments und Wertpapiere AG, however, is not a legal entity separate from biw Bank für
Investments und Wertpapiere AG.

Timetable for the Offering

The scheduled timetable for the Offering is as follows (dates refer to 2012):

23 April            Approval of the Prospectus by BaFin and notification of the Prospectus to the
                    CSSF

                    Publication of the Prospectus on the website of the Company (www.haikui-
                    seafood.com)

24 April            Commencement of the offer period


                                                 57
30 April            Application for admission to trading at the Prime Standard of the Regulated
                    Market of the Frankfurt Stock Exchange

10 May              End of the offer period for retail investors at 12:00 noon (Central European
                    Summer Time) and for institutional investors at 4:00 p.m. (Central European
                    Summer Time)

                    Determination of the offer price and allotment; publication of the offer price,
                    the placement volume and the allotment criteria by ad-hoc notice and on the
                    Company's website

14 May              Registration of the implementation of the IPO Capital Increase with the
                    commercial register

14 May              Admission to trading granted by the Frankfurt Stock Exchange

15 May              Commencement of trading of the shares

16 May              Book-entry delivery of Offer Shares against payment of the offer price




Price range, offer period, offer price, and allotment

The price range within which purchase offers may be submitted is between EUR 10.00 and EUR
13.00 per Offer Share.

The offer period, within which investors will have the possibility to place purchase orders for the
Offer Shares, commences on 24 April 2012 and is expected to end on 10 May 2012. During the
offer period, offers to purchase shares may be submitted by retail investors via their depositary
bank or broker to the Bookrunners. Institutional investors may also submit their orders directly to
the Bookrunners. Orders must be submitted for a minimum of 50 shares and may stipulate a price
limit within the price range wich is dennominated in even EUR amounts or even EUR cent figures of
50 cent.

On the last day of the offer period, retail investors will be able to submit offers to purchase Offer
Shares until 12:00 noon (Central European Summer Time) and institutional investors until 4:00
pm (Central European Summer Time).

The Company, together with the Bookrunners, reserves the right to decrease the number of Offer
Shares, to increase or decrease the upper limit and/or lower limit of the price range, and/or to
extend or shorten the offer period (the "Offer Terms"). If any of the Offer Terms are modified as
set out above, the change will be published by means of an announcement through electronic
information services such as Reuters or Bloomberg and on the Company’s website (www.haikui-
seafood.com), and, to the extent required under the German Securities Trading Act
(Wertpapierhandelsgesetz) as an ad-hoc notice, and, to the extent required under the German
Securities Prospectus Act (Wertpapierprospektgesetz) as a supplement (Nachtrag) to the
Prospectus. Next to this, the Offering may not be revoked or suspended and no revocation can
occur after the beginning of trading on the Frankfurt Stock Exchange. Investors who have
submitted purchase offers will not be notified individually. Any changes to Offer Terms will not
nullify purchase orders that have already been placed. Investors who have already placed
purchase orders prior to the publication of a supplement will have the right provided under the
German Securities Prospectus Act (Wertpapierprospektgesetz) to withdraw from these purchase
orders within two business days following publication of the supplement. Instead of withdrawing
their purchase orders, investors may also amend these purchase orders submitted prior to
publication of the supplement (Nachtrag) or place new limited or unlimited purchase orders within
two business days after publication of the supplement (Nachtrag).



                                                 58
Once the offer period has expired, it is expected that the Company and the Bookrunners will jointly
determine the offer price at the earliest on 10 May 2012 using the order book prepared during the
bookbuilding process. The basis for the bookbuilding process is the price range. The determination
of the offer price will depend on the purchase offers for the shares submitted by investors during
the offer period and collected in the above-mentioned order book. The placement price will be
determined on the basis of the purchase orders submitted by investors. These orders will be
assessed on the basis of the price per share offered by the investor and his expected investment
horizons. This method of determining the offer price primarily aims at maximizing the proceeds
from the Offering. Consideration will also be given to the geographic spread of orders received and
whether the offer price and the number of shares to be placed allow for the reasonable expectation
that, given the total demand for the Company's shares, the share price will demonstrate steady
performance in the aftermarket. Attention will therefore also be paid to the composition of the
group of shareholders in the Company that would result from setting the offer price at a certain
price, and the expected behavior of such group of investors after the implementation of the
Offering.

Purchase orders are freely revocable until the end of the offer period.

Once the offer price has been determined, the Offer Shares will be allotted to investors based on
the orders submitted. The offer price and the placement volume will be published at the earliest on
10 May 2012 by means of an ad-hoc notice on an electronic information system and on the
Company’s website (www.haikui-seafood.com). Investors who have submitted purchase orders
directly with the Bookrunners will be able to obtain information from the Bookrunners with respect
to the offer price and the number of shares allotted to them presumably no earlier than the
banking day following the determination of the offer price. Trading of the shares will not be
possible before that date. Multiple subscriptions are permissible. Book-entry delivery of the allotted
shares against payment of the offer price is expected to occur one banking day following the
commencement of trading of the Company’s shares. Particularly in the event that the placement
volume proves to be insufficient to satisfy all orders placed at the offer price, the Bookrunners
reserve the right not to accept purchase orders, in whole or in part.

General allotment criteria

No agreements exist between the Company, the Greenshoe Shareholders and the Underwriters or
the Bookrunners as to the allotment procedure prior to the commencement of the offer period. The
Company, the Greenshoe Shareholders and the Bookrunners intend to comply with the "Principles
for the Allotment of Share Issues to Private Investors" ("Grundsätze für die Zuteilung von
Aktienemissionen an Privatanleger"), which was issued on 7 June 2000 by the Exchange Expert
Commission (Börsensachverständigenkommission) of the German Federal Ministry of Finance
(Bundesministerium der Finanzen). After the offer period has ended, the Company, the Greenshoe
Shareholders and the Bookrunners will determine and publish the details of the allotment method
in accordance with the "Principles for the Allotment of Share Issues to Private Investors". The
Company, the Greenshoe Shareholders and the Bookrunners strive for a well balanced mix of
investors for the Company when determining the details of allotment. Other than set out above,
the allotment does not depend on the individual, firm or company by which a subscription offers
are made.

Delivery and settlement of the Offer Shares

Book-entry delivery of the allotted Offer Shares against payment of the offer price and the
customary securities commission is expected to take place one banking day following
commencement of trading of the shares. The shares will be made available to shareholders as co-
ownership interests in the respective global certificate.

Shares purchased pursuant to this Offering will be credited to a securities deposit account
maintained by a bank or broker at Clearstream Banking AG, Mergenthalerallee 61, 65760
Eschborn, Germany for the account of such investor.



                                                 59
Stabilization measures, over-allotments and Greenshoe Option

In connection with the placement of the New Shares, biw AG - BankM or persons acting on its
behalf will act as stabilization manager in connection with the Offering, and may, in accordance
with legal requirements, make over-allotments and take measures aimed at supporting the stock
exchange or market price of the Company’s shares in order to offset any sales pressure that may
exist (so-called stabilization measures).

A stabilization manager is under no obligation to take stabilization measures. Therefore, there is
no guarantee that any such stabilization measures will be effected. If stabilization measures are
taken, they may be terminated at any time without prior notice. Such measures may be taken
beginning as of the date of listing of the shares on the regulated market (Regulierter Markt) of the
Frankfurt Stock Exchange and must be completed no later than the 30th calendar day after such
date (so-called stabilization period).

Stabilization measures may lead to the stock exchange or market price of the Company’s shares
being higher than they would have been in the absence of such measures. In addition, such
measures may result in a stock exchange or market price at a level that is not sustainable.

With regard to potential stabilization measures, investors may be allotted up to 225,000 additional
shares of the Company in addition to the New Shares (so-called over-allotment) (the "Greenshoe
Shares"). The Greenshoe Shares will be made available to biw AG - BankM by the Greenshoe
Shareholders by way of a securities loan. Over allotments of an amount of Greenshoe Shares
equivalent to up to 15% of the New Shares placed in the Offering may also be made if not all New
Shares offered are placed amongst investors in the Offering. The Greenshoe Shareholders have
also granted biw AG - BankM the option to purchase the Greenshoe Shares at the offer price, less
agreed commissions (the "Greenshoe Option"). This option will expire 30 calendar days
following the date of commencement of trading of the shares.

Within one week after the end of the stabilization period, information will be announced in the
Frankfurter Allgemeine Zeitung and on the Company’s website at (www.haikui-seafood.com) as to
whether a stabilization measure was taken or not, the date on which such stabilization measure
was commenced, the date on which the last stabilization transaction was taken, and the price
range within which such stabilization was effected for each date on which a stabilization measure
was effected. The exercise of the Greenshoe Option, the date of such exercise and the number and
type of shares involved will also be published without delay (unverzüglich) in the manner described
above for the publication of information regarding the implementation of stabilization measures
following the end of the stabilization period.

Greenshoe Shareholders

The following overview sets forth the name of the Greenshoe Shareholders indicating the number
of Greenshoe Shares it may sell in the Offering.

Name                                            Business Address                 Number of
                                                                              Greenshoe Shares

Mega Bond International Limited           P.O. Box 957                                     207,422
                                          Offshore Incorporations Centre
                                          Road Town, Tortola,
                                          British Virgin Islands

Palm Cove International Limited           P.O. Box 3269                                     17,578
                                          Equity Trust Chambers
                                          Apia
                                          Samoa

TOTAL                                                                                      225,000


                                                60
General and specific information on the shares

Voting rights

Each share confers one vote at the General Shareholders’ Meeting (Hauptversammlung) of the
Company. There are no limitations to the voting rights. Existing Shareholders of the Company do
not have different voting rights.

Dividend entitlement

The shares are vested with full dividend rights for the financial year 2012.

Form and certification of shares

According to the Company’s Articles of Association (Satzung), all shares have been and will be
issued as no par value ordinary bearer shares (Inhaber-Stückaktien). The Existing Shares are
represented by one global share certificate without dividend coupons, which are deposited with
Clearstream Banking AG, Eschborn, Germany. The New Shares will be represented by an
additional global share certificate, which will also be deposited with Clearstream Banking AG. The
Company’s Articles of Association exclude the rights of shareholders to receive individual share
certificates for their shares to the extent permitted by law and unless required by the rules of
stock exchanges to which the shares are admitted. The Company may issue share certificates that
represent one share (so-called individual certificates) (Einzelurkunden) or several shares (so-called
global certificates) (Globalurkunden). The Offer Shares which are the subject of the Offering
provide holders thereof with the same rights as all other shares and do not entitle holders to any
rights or advantages in excess thereof.

German Securities Code (WKN)/Ticker Symbol/Common Code

German Securities Identification Number (WKN):                 A1J H3F

International Securities Identification Number (ISIN):         DE000A1JH3F9

Ticker Symbol:                                                 H8K




Transferability, lock-up

The shares are freely transferable in accordance with legal requirements for bearer shares. Except
for the restrictions set forth under "Market Protection Agreement/Selling Restrictions (Lock-Up)",
there are no prohibitions with respect to the disposal or the transferability of the shares.

Market protection agreement/selling restrictions (lock-up)

The Company has agreed with the Managers that, for the first six months after the shares have
been listed on the Frankfurt Stock Exchange, without the prior consent of the Mangers it will not

·     announce or implement any capital increase from authorized capital (genehmigtes Kapital),

·     propose a resolution for any capital increase at the General Shareholders’ Meeting
      (Hauptversammlung),

·     (a) directly or indirectly issue, purchase, sell, offer, undertake to sell, promote, otherwise
      issue or announce an offer in relation to shares or other securities of the Company which are
      convertible or exchangeable into shares of the Company or grant an option to purchase
      shares of the Company, (b) enter into or execute transactions (including derivatives

                                                 61
        transactions) that are economically equivalent to the purchase or sale of the shares of the
        Company, or (c) directly or indirectly cause or approve transactions within the meaning of
        the foregoing provisions (a) and/or (b).

Haida Holdings, Praise Ocean, and Mr. Alan Gey have agreed with the Managers that, for the first
twelve months after the listing of the shares of the Company on the Frankfurt Stock Exchange
they will not:

    ·    offer, pledge, allot, sell, contract or agree to sell or to transfer, sell any option or contract
         to purchase, purchase any option to sell, grant any option, right or warrant to purchase, or
         otherwise transfer or dispose of, directly or indirectly, any shares of the Company or any
         securities convertible into or exercisable or exchangeable for shares of the Company;

    ·    enter into any swap or other arrangement that transfers to another, in whole or in part,
         the economic risk of ownership of shares of the Company, whether any such transaction
         described in the clauses above is to be settled by delivery of shares of the Company or
         such other securities, in cash or otherwise;

    ·    make any demand for or exercise any right with respect to the registration under U.S.
         securities laws of any shares of the Company or any security convertible into or
         exercisable or exchangeable for shares of the Company; or

    ·    propose any increase in the share capital of the Company, vote in favour of such a
         proposed increase or otherwise, support any capital increase proposed with respect to the
         Company without the consent of the Managers.

Mega Bond, Everswift, Palm Cove and Mr. She Dongpeng have for the same period agreed with the
Managers not to carry out any of the aforementioned transactions without the Managers' prior
consent. Palm Cove and Mr. She Dongpeng will on a pro rata basis be automatically released from
their lock-up obligations for such number of their shares if and to the extent that the New Shares
sold in the Offering would amount to less than 11% of the Company's share capital after the
Offering.

These restrictions do not apply to the sale of the Offer Shares, and to shares purchased over the
stock exchange after the Offering.

Admission for trading and listing of shares

An application for admission of all of the shares of the Company - including the New Shares - to
trading on the regulated market (Regulierter Markt) (Prime Standard) of the Frankfurt Stock
Exchange is expected to be filed on 30 April 2012 and admission is expected to be granted one
business day after the expiration of the offer period at the earliest. Commencement of trading is
expected to take place on the first trading day following the day of admission.

Designated sponsor

biw AG - BankM will assume the function of designated sponsor of the Company’s shares traded on
the Frankfurt Stock Exchange. biw AG – BankM is entitled to designate an appropriately licensed
third party to perform its functions. Pursuant to the designated sponsor agreement between biw
AG – BankM and the Company, biw AG - BankM may, among other things, place limited buy or sell
orders for shares of the Company in the electronic trading system of the Frankfurt Stock Exchange
during daily trading hours. This is expected to improve liquidity of trading for the shares of the
Company. biw AG – BankM will receive an annual fee for its services as designated sponsor.

Selling agents

The following are the selling agents for the Offering:

Cortal Consors S.A, DAB bank AG, flatex AG, ING-DiBa AG, S Broker AG & Co. KG, ViTrade AG.

                                                   62
The selling agents support the Managers in selling the Offer Shares to investors. They may sell
Offer Shares to investors for the account of the Managers. A selling agent receives market
standard commissions from the Managers depending on the number of Offer Shares sold by the
selling agent.




                                              63
    REASONS FOR THE OFFERING, USE OF PROCEEDS, COSTS AND INTERESTS OF THIRD
                       PARTIES INVOLVED IN THE OFFERING

Reasons for the Offering

Haikui’s reasons for this Offering are to increase the awareness of its brand and to use the
proceeds from the capital increase to support its working capital, and to support certain
investments.

Use of Proceeds and Costs

Haikui will receive the net proceeds from the Offering of the New Shares, i.e., the gross proceeds
from the sale of the New Shares less fees and commissions paid by Haikui to the Managers and its
costs. As the gross proceeds as well as the costs of the Offering depend on the total number of the
Offer Shares placed and the offer price, Haikui cannot reliably predict the gross proceeds from the
Offering, the costs of the Offering or the net proceeds at this stage.

Subject to the uncertainty associated with the above estimate, based on the price range, Haikui
believes, assuming that all of the Offer Shares are placed (including the Greenshoe Shares), that
total gross proceeds from the Offering of between approximately EUR 17.3 million and
approximately EUR 22.4 million are attainable (between approximately EUR 15.0 million and
approximately EUR 19.5 million excluding the Greenshoe Shares).

Subject to the above uncertainties, the total fees and commissions payable to the Managers (see:
"Underwriting - Commissions") are expected to be between approximately EUR 1.1 million and
approximately EUR 1.3 million (excluding Greenshoe Shares) and between approximately EUR 1.2
million and approximately EUR 1.4 million (including Greenshoe Shares).

Subject to these uncertainties, Haikui believes that, assuming the placement of all Offer Shares,
the total costs of the Offering, including the fees for admission to trading on the Regulated Market
(Regulierter Markt) of the Frankfurt Stock Exchange, will amount to between EUR 1.8 million and
EUR 2.1 million (including Greenshoe Shares), of which between EUR 1.7 million and EUR 2.0
million are expected to be incurred by the Company and the remaining costs to be incurred by the
Greenshoe Shareholders.

Haikui believes that, assuming the placement of all Offer Shares, total net proceeds of the Offering
of between EUR 15.5 million to EUR 20.3 million are possible, of which between EUR 13.3 million
and EUR 17.5 million would be received by Haikui from the sale of the New Shares. The Greenshoe
Shareholders will receive all of the offer proceeds from the sale of the Greenshoe Shares (less
commissions and costs).

Haikui plans to use the net proceeds that it will receive from the sale of the New Shares

·     approx. 25% - 45% % for general working capital purposes; and

·     approx. 55% - 75% to support certain investments, in particular, for the partial financing of
      a new factory close to its current business premises.

Interests of third parties involved in the Offering

The Greenshoe Shareholders have an interest in the Offering because of the portion of the Offering
proceeds they may receive.

biw AG, biw AG – BankM, and Pareto have entered into contractual relationships with Haikui in
connection with the implementation of the Offering. biw AG and Pareto have been mandated as
Underwriters and biw AG – BankM and Pareto have been mandated as Joint Lead Managers and
Bookrunners and will advise Haikui in connection with the implementation of the Offering,
coordinate the structuring and execution of the Offering, and will purchase and sell the Offer
Shares on behalf of the Underwriters. The compensation of the Managers is incentive-based and

                                                64
depends, among other factors, on the amount of the offer proceeds so that the Managers and
Bookrunners have an interest in the successful implementation of the Offering.

In case of a successfull Offering and listing of the shares of the Company on the Prime Standard of
the Regulated Market of the Frankfurt Stock Exchange, biw AG – BankM will be mandated by the
Company as designated sponsor for its shares. This creates an additional interest of biw AG –
BankM in the Offering.

In connection with the Offering, the Managers and their affiliated companies will be able to acquire
Offer Shares for their own accounts and hold, purchase or sell for their own accounts and can also
offer or sell these Offer Shares outside of the Offering. The Underwriters, and the Joint Lead
Managers do not intend to disclose the scope of such investments or transactions to the extent
that this is not legally required.

Other as described above, there are no interests or conflicts of interests of third parties involved in
the Offering.




                                                  65
                        DIVIDEND POLICY AND EARNINGS PER SHARE

Dividend Rights and Dividend Policy

The shares of individual shareholders in the profit of the Company are determined in accordance
with the number of shares they hold in the registered capital (Section 60, paragraph 1 of the
German Stock Corporation Act). There are neither dividend restrictions nor different procedures for
non-resident holders of the Company’s shares as compared to resident holders.

The adoption of resolutions regarding the distribution of dividends on the Company’s shares for a
given financial year is the responsibility of the General Shareholders’ Meeting (Hauptversammlung)
held during the following financial year, which resolves on the utilisation of the Company’s
distributable profits on the basis of the non-binding proposal of the Management Board (Vorstand)
and the Supervisory Board (Aufsichtsrat). If the Existing Shareholders hold an effective or,
depending on their presence at the General Shareholders’ Meeting of the Company, a factual
majority of the voting rights present or represented at the General Shareholders’ Meeting, they
may exercise further influence on the utilisation of the Company’s profits and/or the dividends’
policy (see: "Risk Factors - Risks related to Haikui’s Business - The Company’s CEO, Mr. Chen
Zhenkui, will also after the Offering indirectly still hold a significant portion of the share capital of
the Company which will enable him to exercise significant control over the Company and could
subject him to conflicts of interest").

Under German law a resolution concerning dividends and the utilisation of distributable profits may
be adopted only on the basis of a balance sheet profit (Bilanzgewinn) shown in the Company’s
adopted annual individual financial statement (festgestellter Jahresabschluss) to be prepared in
accordance with generally accepted German accounting principles, i. e. the accounting provisions
of the German Commercial Code (Handelsgesetzbuch/HGB). In determining the balance sheet
profit available for distribution, the annual net income (Jahresüberschuss) or annual net loss
(Jahresfehlbetrag) of the respective year must be adjusted for profits and losses carried forward
from the previous year and for deposits into or withdrawals from reserves. Certain reserves are to
be created by law and must be deducted, where applicable, when calculating the balance sheet
profits available for distribution. In a resolution regarding the utilisation of balance sheet profits,
the General Shareholders’ Meeting (Hauptversammlung) can include further amounts in retained
earnings or carry them forward as profit.

Dividends resolved at the General Shareholder’s Meeting are payable on the first business day
after such meeting, unless the dividend resolution provides otherwise. Dividend claims are subject
to a three-year limitation period. Dividends which were not exercised by shareholders shall be
retained by the Company. Since its incorporation, the Company has not paid out any dividends to
its shareholders yet. The Company’s Management Board (Vorstand) and Supervisory Board
(Aufsichtsrat) do not intend to propose a distribution of profits as dividends for the financial year
2012. For financial year 2013 and following financial years, the Company’s Management Board
(Vorstand) and Supervisory Board (Aufsichtsrat) intend to propose a profit distribution of a
reasonable amount if the Company’s (individual) annual financial statements (Jahresabschluss)
show a respective balance sheet profit (Bilanzgewinn). Such distribution will only be made if and to
the extent it is covered by the annual net income (Jahresüberschuss) which is shown in the
respective Company’s (individual) annual financial statement in accordance with HGB
(Jahresabschluss). The expenditures and costs of this Offering will have a one-time impact that will
adversely affect the Company’s results of operations in 2012.

Dividend income is subject to German dividend withholding tax (Kapitalertragsteuer) (see:
"Taxation in Germany - Taxation of Shareholders - Taxation of Dividends").

Earnings per Share

The Company was incorporated by way of registration with the commercial register of the local
court (Amtsgericht) in Hamburg on 24 February 2011 and therefore does not have a three-year
financial history. On the basis of the audited Historical Consolidated Financial Statements under

                                                   66
IFRS of Haikui Singapore for the financial years 2009, 2010 and 2011, the following summary
shows the earnings of Haikui Singapore on a consolidated basis (rounded to two decimal points),
the earnings per share, each in accordance with IFRS and the distributed dividends as of and for
the years ended 31 December 2009, 31 December 2010 and 31 December 2011 on a consolidated
basis.

                                                          Financial year ended 31 December

                                                         2009                         2010                         2011

Profit for the year (in TEUR)                          18,015                       23,357                        28,333

Assumed/actual number of shares                  10,000,000                    10,000,000                 10,000,000
on 31 December(1)

Earnings per       share      in   EUR                    1.80                          2.33                        2.83
(undiluted)

Dividends for the year (in TEUR)                         2,517                        None.                       None.

Dividends per share in EUR                                0.25                        None.                       None.

_____________

1)    For a better comparability, the current number of the Company’s 10,000,000 Existing Shares has been used.




                                                          67
                                 CAPITALISATION AND INDEBTEDNESS

The data presented in the following table shows the capitalisation of Haikui as at 31 December
2011 and 29 February 2012, respectively, on a consolidated basis. The data as of 31 December
2011 is taken from the Consolidated AG Financial Statements. The data as of 29 February is
unaudited and has been prepared in accordance with International Financial Reporting Standards
as adopted by the European Union ("IFRS"). As a result of the net proceeds obtained in the
Offering, the capitalisation of Haikui on a consolidated basis will change following the Offering.

                                                                            As at                        As at
                                                                      31 December 2011                29 February
                                                                                                         20127
                                                                           (audited)                  (unaudited)
                                                                        (EUR thousand)              (EUR thousand)
Capitalisation
Total Current Liabilities                                                               6,419                      6,556
thereof secured8                                                                          286                        278
thereof guaranteed                                                                          -                          -
thereof unsecured/unguaranteed                                                          6,133                      6,278
Total Non Current Liabilities                                                           2,283                      2,222
thereof secured8                                                                        2,283                      2,222
thereof guaranteed                                                                          -                          -
thereof unsecured/unguaranteed                                                              -                          -
Total Equity                                                                          114,664                    116,027
thereof Share Capital1                                                                 10,000                     10,000
thereof Capital Reserves                                                                  388                        388
thereof Statutory Reserves                                                              5,830                      5,830
thereof Other Reserves                                                                    705                        705
thereof Currency Translation Reserves                                                  15,291                     12,412
thereof Retained Earnings                                                              82,450                     86,692

Indebtedness
Liquidity                                                                              25,690                     40,019
thereof Cash                                                                            25,690                     40,019
thereof Cash Equivalents                                                                     -                          -
thereof Trading Securities                                                                   -                          -
Current Financial Receivables2                                                         55,781                     43,749
Current Financial Liabilities3                                                           4,911                      5,174
thereof Current Bank Debt                                                                    -                          -
thereof Current portion of non-current debt                                              2,183                      2.124
thereof Other Current Financial Debt                                                     2,728                      3,050
Net Current Financial Indebtedness4                                                  (76,560)                   (78,594)
Non-Current Financial Liabilities5                                                       2,283                      2,222
thereof Non Current Bank Loans                                                               -                          -
thereof Bonds Issued                                                                         -                          -
thereof Other Non Current Loans                                                          2,283                      2,222
Net Financial Indebtedness6                                                          (74,277)                   (76,372)
1)   Share Capital represents issued capital (Grundkapital) of Haikui Seafood AG
2)   Current financial receivables are financial assets as defined in IAS 32.11 which are expected to be recovered or settled
     no more then twelve months after the balance sheet date (except for cash and cash equivalents disclosed under
     Liquidity)
3)   Current financial liabilities as defined in IAS 32.11 which are expected to be recovered or settled no more then twelve
     months after the balance sheet date
4)   Current Financial Liabilities minus Current Financial Receivables minus Liquidity
5)   Non-Current Financial Liabilities as defined in IAS 32.11 which are expected to be recovered or settled more than
     twelve months after the balance sheet date
6)   Net current financial indebtedness plus non-current financial liabilities.
7)   Taken from the Company's internal management accounts.
8)   Secured by mortgages on land use rights and buildings of Haikui.




                                                           68
Indirect or contingent liabilities

As at 29 February 2012, Haikui had no indirect or contingent liabilities.

Working capital statement

In the Company’s opinion, Haikui's working capital (not taking into account the proceeds from the
Offering) is sufficient for its present requirements that means sufficient to cover those payment
obligations which are due at the date of this Prospectus and those that will become due at least
within the next twelve months from the date of this Prospectus, and Haikui does not have any
further debt financing needs.




                                                 69
                                          DILUTION

The book value of the shareholders’ equity as reflected in the Company's Consolidated AG
Financial Statements in accordance with IFRS as at 31 December 2011 amounted to EUR 114,664
thousand. This is equivalent to approximately EUR 11.47 per share (calculated on the basis of
10,000,000 shares as of the date of this Prospectus).

Assuming that all New Shares are placed and that the offer price amounts to EUR 11.50 per share,
which corresponds to the midpoint of the price range, the Company would obtain net proceeds
from the placement of the New Shares of approximately EUR 15.4 million. If the Company had
obtained this amount already as at 31 December 2011, the book value of shareholders’ equity at
that time would have been about EUR 130 million or EUR 11.31 per share (based on the increased
number of 11,500,000 shares after the placement of all New Shares). Consequently, under the
abovementioned assumptions, the implementation of the Offering would lead to a direct decrease
in the book value of shareholders' equity of EUR 0.16, or 1.4% per share for the Existing
Shareholders and a direct dilution of EUR 0.19, or 1.7% per share for the purchasers of the Offer
Shares who acquire shares at the midpoint of the price range.




                                               70
                             SELECTED FINANCIAL INFORMATION

The Company was founded by way of notarized deed of formation (Gründungsurkunde) on
12 October 2010 and incorporated by registration in the commercial register of the local court
(Amtsgericht) of Hamburg on 24 February 2011.

The operational business of Haikui is exclusively carried out by Fujian Dongshan Haikui Aquatic
Products Group Co. Ltd. ("Fujian Haikui"), which is the indirectly wholly owned subsidiary of the
Company. All shares in Fujian Haikui are owned by China Haikui Pte. Ltd. ("Haikui Singapore"),
a company under Singaporean law, whose sole shareholder is Haikui Seafood AG.

In order to present the business, financial condition and results of operations of Haikui historically,
Haikui has prepared annual consolidated financial statements of Haikui Singapore as at and for the
years ended 31 December 2009, 31 December 2010, and 31 December 2011 under IFRS (the
"Historical Consolidated Financial Statements"). The Historical Consolidated Financial
Statements have been prepared by Haikui for the purpose of this Offering. The purpose of these
financial statements is to put the investor in the position to better compare the development of the
business, financial condition and the results of operations of Haikui over the periods under review.

Beyond that, Haikui has prepared consolidated financial statements under IFRS of the Company for
the short financial year from 24 February 2011 until 31 December 2011 (the "Consolidated AG
Financial Statements") and financial statements under the German Commercial Code (HGB) of
the Company for the short financial year from 24 February 2011 until 31 December 2011 (the
"Individual AG Financial Statements").

The Historical Consolidated Financial Statements, the Consolidated AG Financial Statements, and
the Individual AG Financial Statements were audited by Crowe Horwath Deutschland GmbH,
Wirtschaftsprüfungsgesellschaft, Pariser Platz 7, 70173 Stuttgart, Germany ("Crowe Horwath").

Haikui’s selected financial information as at and for the years ended 31 December 2009,
31 December 2010, and 31 December 2011, which is reflected in this section, was extracted from
the audited Historical Consolidated Financial Statements, unless expressly stated otherwise.




                                                  71
The following figures were subject to rounding adjustments that were carried out according to
established commercial standards. As a result, the figures stated in the table may not exactly add
up to the total values that may also be stated in the table.


Selected Financial Data                        2009                     2010                   2011                   2011
                                                                                                                (24 Feb – 31 Dec)9
                                         EUR                     EUR                     EUR                      EUR
                                       thousand        %       thousand         %      thousand        %       thousand      %
Selected Income Statement Data                                                   (audited)
Revenue                                    94,544       100%       126,219       100%    152,116        100%     132,987    100.0%
Cost of sales                            (72,524)      76.7%      (96,360)      76.3% (114,203)        75.1%    (99,547)     74.9%
Gross Profit                              22,020      23.3%        29,859      23.6%      37,913      24.9%      33,440     25.1%
Other income                                  497       0.5%            617      0.5%         285       0.2%          272     0.2%
Distribution expenses                       (778)       0.8%          (983)      0.8%     (1,596)       1.0%      (1,439)     1.1%
Administrative expenses                   (1,773)       1.9%        (1,696)      1.3%     (2,582)       1.7%      (2,197)     1.7%
Other operating expenses                     (44)       0.0%           (41)      0.0%        (48)       0.0%      (1,518)     1.1%
Profit from operations                     19,922      21.1%         27,756     22.0%      33,972      22.3%       28,558    21.5%
Financial (expenses) /income, net             219       0.2%        (1,342)      1.1%     (1,613)       1.1%      (1,389)     1.0%
Profit before income tax                  20,141      21.3%        26,414      20.9%      32,359      21.3%      27,169     20.4%
Income tax                                (2,126)       2.2%        (3,057)      2.4%     (4,026)       2.6%      (3,570)     2.7%
Profit for the period                     18,015      19.1%        23,357      18.5%      28,333      18.6%      23,599     17.7%

Selected Balance Sheet Data1
Total assets                               57,330                  88,449                 124,916                123,366
Total liabilities                           6,899                   8,167                   8,644                  8,702
Total equity                               50,431                  80,282                 116,272                114,664

Selected Cash Flow Data
Cash flow from operating activities         7,281                   11,550                 10,487                  3,202
Cash flow from investing activities       (1,984)                 (11,605)                (1,274)                (1,250)
Cash flow from financing activities       (2,041)                  (1,685)                  (281)                  (279)

Cash at end of period                     14,918                  14,951                  25,587                 25,690




Other Selected Financial Data2                 2009                   2010                 2011                 2011
                                                                                                         (24 Feb – 31 Dec)9
                                         EUR thousand10          EUR thousand10      EUR thousand10        EUR thousand10
Gross profit margin                          23.3%                   23.6%               24.9%                 25.1%
EBITDA3                                      20,478                  28,449              35,423                29,770
EBITDA margin4                               21.7%                   22.5%               23.3%                 22.4%
EBIT5                                        19,922                  27,756              33,972                28,558
EBIT margin6                                 21.1%                   22.0%               22.3%                 21.5%
Net profit margin7                           19.1%                   18.5%               18.6%                 17.7%
Number of employees8                          1,804                   1,905               2,194                 2,311
_________

1)      Data as at the end of the respective period
2)      "Other Selected Financial Data" is unaudited and has been calculated based on information derived from the audited
        Historical Consolidated Financial Statements and Consolidated AG Financial Statements, respectively, and is taken
        from Haikui's internal management accounts. The number of employees is audited.
3)      EBITDA is calculated as net income less interest income plus interest expense plus tax payable less tax refund
        plus/less investment income plus depreciation and amortization
4)      EBITDA divided by revenues times 100
5)      EBIT is calculated as net income less interest income plus interest expense plus tax payable less tax refund plus/less
        investment income
6)      EBIT divided by revenues times 100
7)      Profit for the period divided by revenues times 100
8)      Average for the period, including permanent and temporary workers
9)      Extracted from or based on the Consolidated AG Financial Statements covering the short financial year
        (Rumpfgeschäftsjahr) 24 February 2011 until 31 December 2011
10)     Other than Gross profit margin, EBITDA margin, EBIT margin, number of employees




                                                            72
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                             OF OPERATION

The following discussion and analysis of the financial condition and results of operations should be
read in conjunction with the other information in this Prospectus, including the financial
information and related notes thereto beginning on page F-1 and the section "Selected Financial
Information". Haikui’s selected financial information, which is reflected in this section, was
extracted from the audited Historical Consolidated Financial Statements, unless expressly stated
otherwise.

Overview

Haikui is an established seafood processing company with operating facilities in China. It produces
and sells processed frozen and canned seafood for the Chinese market and for international
markets. Haikui’s products are made of a broad range of raw seafood, including prawn, crab,
various types of fish, and other species such as shellfish, cephalopod and abalone. Haikui sells
seafood that has undergone primary processing, such as cleaning, cutting, and peeling, as well as
seafood that has undergone further processing, such as cooking, grilling, seasoning, drying and/or
coating. Haikui’s product portfolio consists of more than 100 different products of frozen and
canned seafood. The frozen seafood category accounted for 90.6% and 87.9%, and the canned
seafood category accounted for 9.4% and 12.1% of Haikui’s revenues in 2010 and 2011,
respectively.

The raw seafood to be processed is sourced from regional suppliers located close to Haikui’s
processing facilities in Dongshan Island, China. The raw seafood used in Haikui’s products
originates both from capture fishing and aquaculture. In 2010 and 2011, capture fishing
contributed 48.6% and 59.3% to Haikui’s overall revenues, and aquaculture contributed 51.4%
and 40.7% to Haikui’s overall revenues, respectively. During 2011, Haikui has sourced it raw
materials from 84 suppliers for raw seafood being aquaculture farms and operators of fishing
vessels. As at 31 December 2011, Haikui has entered into framework agreements for the supply of
raw seafood for Haikui’s products with 61 of those suppliers. These framework agreements provide
Haikui with a strong supply base, including priority rights regarding the purchase of the raw
seafood and price discounts.

As at 31 December 2011, Haikui’s processing facilities had an aggregate annual output processing
capacity of approximately 28,543 tonnes per year. Haikui’s processing facilities are located in
Dongshan Island, Zhangzhou, Fujian Province, PRC. Dongshan Island lies between the East China
Sea and South China Sea, two of the three key marine resource centres in the PRC, and provides
direct access to abundant, diverse and sustainable marine resources. The Dongshan region is also
in close proximity to Taiwan, one of Haikui’s main overseas markets. A special economic zone for
the fishing and seafood processing industry is currently under development at Dongshan in
proximity to Haikui’s processing facilities, the Dongshan National Seafood Economic Development
Zone (the "Dongshan Special Economic Zone" or the "Zone") which Haikui expects to become
fully operational by the end of 2013. Haikui expects the Dongshan Special Economic Zone to
provide it with several advantages of an expansion of infrastructure, including, inter alia, a new
harbour for international fishing vessels, which will also provide for an increased quantity and
variety of raw seafood available.

Haikui’s customers are distributors (including large processing companies) in the PRC and
overseas, whereby most of the overseas customers are based in Asia, Europe, and the United
States. Haikui’s products sold in the PRC are made under Haikui’s own "Haikui" brand or under
third party brands, while sales in overseas markets are principally made under third party brands.

Haikui has three distribution channels, namely (i) overseas distributors accounting for 68.4% and
68.1% of Haikui’s overall revenues in 2010 and 2011, respectively, (ii) domestic distributors
accounting for 31.4% and 31.7% of Haikui’s overall revenues in 2010 and 2011, respectively and
(iii) direct sales, accounting for 0.1% and 0.2% of Haikui’s overall revenues in 2010 and 2011,
respectively. In terms of domestic sales, Haikui receives most of its customer orders directly from

                                                73
PRC distributors. In terms of international sales other than to Asian countries, Haikui receives most
of its customer orders through buying agents which receive orders directly from international
distributor customers seeking seafood products. An important pillar of Haikui’s growth strategy is
the expansion of its own brand sales in China.

Haikui has experienced significant revenue growth for the periods under review. Haikui’s revenues
increased from EUR 94,544 thousand in 2009 to EUR 126,219 thousand in 2010 and to
EUR 152,116 thousand in 2011, corresponding to a compounded annual growth rate of 26.8%
over this period. Haikui’s net profits increased from EUR 18,015 thousand in 2009 to EUR 23,357
thousand in 2010 and to EUR 28,333 thousand in 2011, corresponding to an average annual
growth rate of 25.4% over this period.

Haikui employed an average of 2,194 employees, including 1,589 temporary contract workers in
the financial year 2011.

Key factors affecting Haikui’s results of operations

The Company believes that the following factors had and/or will continue to have a material effect
on its results of operations and financial conditions:

Demand for Haikui’s seafood products

The profitability of Haikui’s business depends on increasing demand for its seafood products. In
general, demand for Haikui’s seafood products is driven by a number of specific factors, including
the growing consumption of seafood products in the PRC, in particular the increased consumption
of seafood products by an increasingly affluent middle class in China, growing demand for seafood
products in overseas markets, growing business opportunities in Taiwan as a consequence of a
free trade agreement between the PRC and Taiwan, the rising awareness of the health benefits of
seafood, and growing confidence in the quality of Chinese seafood products.

Demand for Haikui’s products in the PRC market is crucial for Haikui’s business. In 2009, 2010 and
2011, revenues from sales of Haikui’s products in the PRC market accounted for 37.8%, 31.6%
and 31.9%, respectively, of Haikui’s overall revenues. China is currently the world’s principal
producer of seafood (China produced 47.5 million tonnes of seafood, of which 32.8 million tonnes
were derived from aquaculture resources, of the world’s total production of 143 million tonnes in
2008). World production of seafood also increased from 139.8 million tonnes in 2007 to 145.1
million tonnes in 2009, with the majority of the production increase attributed to China. The
increase in production has been matched by an increase in consumption. For example, per capita
consumption of seafood in the PRC market has grown significantly over the last few decades, to
25.8 kilogram ("kg") in 2007 as compared to less than 5 kg in 1970. (Source: Recent
Developments 2011, FAOSTAT, FAO Yearbook 2008) (see: "Industry Overview - Global Seafood
Industry")

The increase in the production and consumption of seafood in China has resulted from the rapid
economic development in China over the last decade (China had an annual GDP growth rate of
9.2% in 2009, 10.4% in 2010 and 9.2% in 2011 (Source: International Monetary Fund, World
Economic Outlook Database, September 2011, International Monetary Fund, World Economic
Outlook Update, January 2012) which in turn has led to higher disposable incomes of consumers
and the increasing affluence of the middle class in China in recent years. The per capita annual
disposable income of urban households has risen from RMB 6,860 in 2001 to RMB 21,810 in 2011,
and the per capita annual disposable income of rural households has risen from RMB 2,366 in 2001
to RMB 6,977 in 2011 (Source: PRC National Bureau of Statistics, Yearbook 2010, Press Releases
dated 20 January 2011 and 30 January 2012). (see: "Industry Overview - Overview of the Chinese
Economy"). Since the Chinese economy opened up more than three decades ago, the Chinese
middle class has been steadily growing, with an estimated 200 million people currently in that
category (Source: Infobusiness Report).




                                                 74
Another factor increasing the demand for seafood products is a rising awareness of the health
benefits of seafood. As a result of the increase in health awareness in the PRC, for example, many
consumers have begun to prefer white meat such as seafood and poultry over red meat and have
accordingly increased their purchases of seafood (Source: Infobusiness Report).

Demand for seafood products has also grown from customers in the inland provinces in China. As
raw seafood products are scarce due to transportation delays, underdeveloped cold storage and
distribution systems and unpredictable weather conditions, seafood products in processed form
have gained in popularity due to their longer shelf life (Source: Infobusiness Report).

Demand for Haikui’s products in overseas markets is also crucial for its business. In 2009, 2010
and 2011, revenues from overseas markets (all markets, including the Asian market but excluding
the PRC market) accounted for 62.2%, 68.4% and 68.1%, respectively, of Haikui’s overall
revenues. A large portion of the revenues from overseas markets is attributable to Taiwan. This is
not only due to the close proximity to Taiwan, but also to significant advantages in labour costs in
China compared to Taiwan and the recent signing of a free trade agreement between the PRC and
Taiwan. Global consumption of seafood has increasingly gained in popularity in recent years with a
global annual per capita consumption of fish and fish products increased from 10.9 kg in 1970 to
13.5 kg in 1990, 17.3 kg in 2009 and 17.6 kg in 2010. Estimates for 2011 show further increase in
the global seafood consumption to 17.8 kg per capita. Developed countries have a much higher
consumption of fish than developing countries with an annual per capita consumption of 24 kg in
developed and 14.4 kg in developing countries (Source: FAO Recent Developments 2011,
FAOSTAT). In addition, consumption of seafood has increased in developing countries due to urban
growth as urbanization has increased the availability of seafood (Source: FAO Fisheries and
Aquaculture 2010) (see: "Industry Overview - Global Seafood Industry - Global Consumption of
Seafood").

Improvements in the quality of food products imported from the PRC and the food safety
standards applied in its processing and production have also increased foreign customers’
confidence in and demand for Haikui’s products. In response to the recent negative publicity
associated with recent food scandals in the PRC, the Chinese government has taken certain
measures in order to enhance the quality of processed food, which has included a broadening of
governmental surveillance authority. This in turn has led to the closing of hundreds of Chinese
enterprises which did not comply with new governmental guidelines. The Company believes that
such efforts will have a positive impact on increasing the quality of PRC seafood exports to
overseas markets, thereby increasing the confidence of foreign customers to purchase PRC
seafood products. Toward this end, it is crucial that Haikui maintains international accreditations
such as HACCP and the status of a European Union Registered Exporter of Seafood Products and
complies with potential future comparable requirements necessary for the international distribution
of Haikui’s products.

An increase in demand for Haikui’s products driven by any of the above factors, especially an
increase in demand from the PRC market, will have a positive effect on Haikui’s business, financial
condition and results of operations. Alternatively, a decrease in demand for Haikui’s products will
adversely affect Haikui’s business, financial condition and results of operations.

Stability of the supply of raw seafood

Haikui sources its raw seafood from capture fishing in the local market in Dongshan Island and
from Chinese aquaculture farms. In 2009, 2010 and 2011, approximately 52.9%, 48.6% and
59.3%, respectively, of Haikui’s sales were attributable to marine resources from capture fishing.

The supply of raw seafood is facilitated because of Dongshan Island’s strategic location for capture
fishing and aquaculture farming in the PRC. From a regulatory perspective, the supply of raw
seafood from capture fishing is affected by two principal factors, namely government regulations
restricting the periods in which capture fishing can be conducted and government initiatives to
support the regional seafood industry in Dongshan.



                                                75
The PRC government has imposed a number of restrictions in certain months on certain methods
of capture fishing in the waters surrounding the PRC to ensure sustainable aquatic resources. For
example, from 16 May to 1 August of each year capture fishing is almost entirely prohibited (see:
"Regulatory Environment - Fishing Regulations in the PRC"). These restrictions severely limit
Haikui’s ability to source raw seafood from capture fishing during these periods, essentially
requiring Haikui to rely on supplies of raw seafood from aquaculture resources and inventory on
hand during these periods. There also can be no assurance that the PRC government will not
impose more stringent fishing regulations, including but not limited to more frequent or longer
periods of fishing restrictions, or to restrict the capture of certain species of raw seafood, which
may be important for Haikui’s products. Any increase in restrictions on capture fishing which
restrict or limit the supply of raw seafood for Haikui’s products would materially adversely affect
Haikui’s business, financial condition and results of operations.

A special economic zone for the fishing and seafood processing industry is currently under
development at Dongshan in proximity to Haikui’s processing facilities, the Dongshan National
Seafood Economic Development Zone (the "Dongshan Special Economic Zone" or the "Zone")
which Haikui expects to become fully operational by the end of 2013. The Dongshan Special
Economic Zone will comprise, inter alia, a newly built harbour for Chinese vessels, a bonded
logistics centre including large cold storage warehousing facilities, the conversion of an existing
harbour in the vicinity of the Zone into an international harbour allowing for international fishing
vessels to unload their catch to be transported to the bonded logistics centre, seafood processing
zones, a seafood trading centre, as well as equipment and maintenance facilities for shipping
vessels. The Zone will increase the variety of raw seafood available for processing in Dongshan
and allow the import duty free purchase of seafood supplied from international shipping vessels
provided that the imported goods will be sold to international markets after processing. The Zone
will also decrease supply side seasonality by allowing delivery of international seafood even at
times of fishing restrictions in PRC waters, and by providing large warehousing facilities.

Volatility in prices for raw seafood

The profitability of Haikui’s business is affected by the volatility in prices for various types of raw
seafood sourced from suppliers as raw materials. Costs of raw materials accounted for 95.1%,
94.9% and 94.3% of Haikui’s overall cost of sales in 2009, 2010 and 2011, respectively. The
prices of Haikui’s raw materials fluctuate significantly due to changes in supply and demand
conditions. Supply conditions affecting the price of raw materials include the quality and quantity
of raw seafood from capture fishing and/or aquaculture resources, weather and ecological
conditions (in particular, water pollution), the availability of certain species of raw seafood, and the
policies and regulations of the governments of the relevant territories where such capture fishing is
conducted and/or aquaculture resources are found. Demand conditions affecting the price of raw
materials include customer preferences, consumer trends, and general demand for seafood in the
PRC and in Haikui’s international markets. In addition, raw material prices are affected by factors
such as seasonality. For a more detailed discussion, see "Seasonality of both supply and sales" in
this section. Any shortage in supply or increase in demand for raw seafood may lead to an increase
in raw material prices.

Haikui typically sells its products based on single purchase orders. It is therefore in a position to fix
prices for its products to actual market conditions. The Company believes that it can often pass
increases in raw material prices on to its customers. In addition, Haikui sources its raw materials
both from aquaculture farms and from capture fishing suppliers in order to hedge against volatility
in raw material prices and ensure a stable supply at competitive prices. Haikui also maintains a
certain amount of raw seafood on stock in frozen form before processing it at a later stage to
ensure adequate supplies.

If and to the extent Haikui is not able to pass increases in raw material costs on to its customers
or to agree on certain price increases with its customers, its results of operations will be adversely
affected. Alternatively, if the costs of raw materials decrease and Haikui does not have to lower
the prices of its products accordingly, its results of operations will be positively affected. Any


                                                   76
significant volatility in prices for raw seafood will have a direct effect on the profitability of Haikui’s
business.

Competition in the Chinese market for processed seafood

Competition in the Chinese and global markets for processed seafood is particularly intense and
Haikui expects this competition to continue to increase and intensify in the future. Haikui’s current
competitors include Chinese and international competitors, some of which are vertically integrated
in the production, processing and distribution of seafood. By comparison, Haikui receives and
processes raw seafood from its external suppliers and sells that fresh processed seafood to
distributor customers, which on-sell the products under their own brand name or under the
"Haikui" brand to end customers. If suppliers of raw seafood also decide to become processors of
seafood or were to acquire other processing companies, Haikui could face more competition in the
seafood processing market from vertically integrated distribution companies. In addition, Haikui’s
access to raw seafood could be limited as suppliers of raw seafood controlled or acquired by such
vertically integrated competitors would not be available as a cost-efficient source of seafood for
Haikui.

Barriers to entry for processed seafood in the PRC are also relatively low for new competitors with
sufficient financial resources to make the necessary investments in machinery and experienced
personnel. New competitors could therefore enter the market at any time. Existing and new
competitors may have more recognized and well-established brands, a larger customer base, more
advanced processing facilities or greater financial resources, which would allow them to compete
aggressively in the PRC market, among other things, by lowering their prices and/or expanding
their processing capacity. To remain competitive, Haikui must continue to invest significant
resources in the ongoing development of new products and improvement of existing products. In
addition, it is difficult to differentiate between processed seafood products other than in terms of
branding and packaging. As a result, price competition in this market is intense. There can be no
assurance that Haikui will have sufficient resources to make these investments or that such
investments will improve Haiku’s position in the PRC market as compared to its competitors. If
Haikui can successfully compete in the PRC market as new competitors enter the market, it will
enhance its perception as a provider of high-quality seafood at competitive prices, which may
improve its business, financial condition and results of operations. Alternatively, increased
competition or the entry of new competitors could result in lower margins for Haikui’s products or
a loss of market share, all of which could materially adversely affect Haikui’s business, financial
condition and results of operations.

Seasonality of both supply and demand

Haikui’s business is affected by seasonal effects both in terms of supply of and demand for its
seafood products. For example, the supply of raw seafood is affected by fishing restrictions in the
Dongshan region between 1 May and 1 August (see "Regulatory Environment - Fishing Regulations
in the PRC") with the effect that Haikui is unable to a large extent to source its raw materials from
capture fishing during these periods. In addition, certain species of raw seafood are only available
at certain times of the year. During these periods Haikui relies on its inventories of raw seafood in
frozen form accumulated during periods of sufficient availability of raw seafood from capture
fishing and supplies from aquaculture resources. However, due to a lack of cold storage facilities
and certain working capital constraints in the past, Haikui was restricted in building up sufficient
amounts of inventory.

The demand for raw seafood is also affected by seasonality. For example, there is generally an
increased demand for seafood during the second half of the year as Chinese citizens consume
more fish at traditional Chinese festivals and holiday seasons celebrated at home with special
dinners. A similar effect can be seen in overseas markets during certain periods such as the
Christmas and New Year holidays.

The following table presents Haikui’s quarterly revenue development as a percentage of total
yearly revenues (measured in RMB) for the periods under review.

                                                    77
                                  2009                         2010                   2011
                          (% of annual revenue        (% of annual revenue   (% of annual revenue
                                in RMB)                      in RMB)                in RMB)
                              (unaudited)                 (unaudited)            (unaudited)
Quarter   1                       18.5                         17.1                   17.8
Quarter   2                       20.6                         17.8                   22.5
Quarter   3                       30.6                         28.8                   26.3
Quarter   4                       30.3                         36.3                   33.4


The effect of seasonality on the supply of and demand for raw seafood requires Haikui to adapt its
processing and sales planning accordingly.

Changes in applicable tax provisions

For the periods under review, the effective tax rate for Fujian Haikui for 2009 was 10%, for 2010 it
was 11 % and for 2011 it was 12%. Under the income tax law of the PRC currently in effect, the
general income tax rate is 25%. The general tax for Foreign Invested Enterprises ("FIE") such as
Haikui will gradually be adapted to the general tax rate so that for 2009, 2010, 2011 and 2012 the
general tax rate for FIEs is 20%, 22%, 24% and 25%, respectively. However, Haikui enjoys
certain additional tax rebates based on its status as a FIE, which provides for an exemption from
income tax in 2008 and a 50% reduction in the income tax rate from 2009 to 2011. Therefore,
based on current income tax laws, Fujian Haikui was effectively taxed 10% in 2009, 11% in 2010,
and 12% in 2011 and is effectively taxed 25% starting from 2012. Increasing income taxes,
especially from 2012 onward, will materially adversely affect Haikui’s profitability (see: "Risk
Factors - Haikui has in the past enjoyed tax benefits in China which since 2012 do not apply
anymore").

Effects of currency fluctuations

Haikui's financial statements for the periods under review were prepared in EUR and the
Company’s future annual consolidated financial statements will be prepared in EUR, while Haikui’s
operating currency is RMB, which is currently not a freely convertible currency. A devaluation of
the RMB versus the EUR would therefore have an adverse foreign currency translation effect on
Haikui’s consolidated financial statements. For example, balances in Haikui’s Historical
Consolidated Financial Statements were translated using historical exchange rates for the years
ended 31 December 2009, 2010 and 2011 of 0.1023 RMB per EUR, 0.1145 RMB per EUR and
0.1213 RMB per EUR, respectively. Measured in RMB, Haikui’s revenues increased by 26.0%
(compared to an increase of 33.5% in EUR) from 2009 to 2010 and by 21.2% (compared to an
increase of 20.5% in EUR) from 2010 to 2011.

Haikui’s sales are mainly denominated in RMB and USD, while costs are primarily incurred in RMB.
Haikui is therefore exposed to adverse fluctuations in the exchange rates between the USD and
the RMB. In 2009, 2010 and 2011, approximately 62.2%, 68.4% and 68.1%, respectively, of
Haikui’s revenues were incurred in USD. Currently there is a general trend of appreciation of the
RMB as compared to the USD. For the periods under review, the RMB has generally appreciated
against the USD.

The value of the RMB is controlled by PRC authorities. Therefore, exchange policies of the PRC
government also have a significant impact on currency exchange rates. The PRC government is
currently under political pressure from other governments, in particular in the United States and
European Union, to substantially appreciate the RMB against the USD and the EUR. Haikui Group
currently does not have a formal hedging policy with respect to the foreign exchange exposure.
However, as prices are determined for every single purchase order and payment terms are usually
not more than 90 days, the Company believes that hedging is not necessary.




                                                 78
Sufficient working capital

Haikui’s business operations are capital intensive and thus require a significant amount of working
capital. Haikui’s net current assets, i.e. working capital, increased from approximately EUR 46,202
thousand as at the end of 2009 to approximately EUR 64,230 thousand as at the end of 2010 and
subsequently to approximately EUR 100,552 thousand as at the end of 2011. The scale of Haikui’s
business operations increased significantly through the investment by Mega Bond of USD 11
million between March and September 2007. Proceeds from the Mega Bond investment were used
to increase processing capacities for frozen seafood and to establish a canned seafood processing
line that was commissioned in November 2007. From 2009 through 2011, substantial cash flows
from operating activities led to a strong working capital balance and allowed Haikui to increase its
procurement and processing scales and expand its sales activities.

By contrast, Haikui’s working capital balance was adversely affected during the periods under
review by long term prepayments to suppliers and grace periods for payments given to its
distributors. At the beginning of each year, Haikui usually makes prepayments to its suppliers the
amount of which depends on the forecasted annual supplies from the respective supplier. Total
advances extended to suppliers under the framework agreements accounted for approximately
10% of total purchases in the previous year. Haikui enters into framework agreements with the
majority of these suppliers under which Haikui exclusively receives raw materials from these
suppliers at prices which are below the prevailing market price at the time of making an order
(see: "Business - Material Agreements - Aquaculture Supply Agreements"). Therefore, Haikui is
required to spend a significant amount of working capital to fund its raw material procurement.
Haikui also faces the risk that raw materials ordered will not be delivered despite the advance
payments made. In addition, Haiku’s distributors usually have a grace period for payment to
Haikui of between 60 and 90 days after delivery of the finished products.

Results of operations

The following table presents Haikui Singapore’s consolidated income statement data for the years
ended 31 December 2009, 2010 and 2011, which was derived from the audited Historical
Consolidated Financial Statements.

The table also present results of operations as a percentage of revenues for the periods under
review.

                                                                31 December
                                           2009                     2010                2011
                                      EUR      % of           EUR        % of      EUR       % of
                                    thousand revenues      thousand revenues thousand revenues
                                                                  (audited)
Revenues                               94,544      100%     126,219         100% 152,116 100.0%
Cost of sales                         (72,524)     76.7%     (96,360)      76.3% (114,203)    75.1%
Gross Profit                           22,020     23.3%       29,859      23.7%    37,913    24.9%
Other income                               497      0.5%          617        0.5%      285     0.2%
Distribution costs                       (778)      0.8%        (983)        0.8%  (1,596)     1.0%
Administrative expenses                (1,773)      1.9%      (1,696)        1.3%  (2,582)     1.7%
Other operating expenses                  (44)      0.0%         (41)        0.0%     (48)     0.0%
Profit from operations                 19,922     21.1%       27,756      22.0%    33,972    22.3%
Finance (expenses)/income, net             219      0.2%      (1,342)        1.1%  (1,613)     1.1%
Profit before income tax               20,141     21.3%       26,414      20.9%    32,359    21.3%
Income tax                             (2,126)      2.2%      (3,057)        2.4%  (4,026)     2.6%
Profit for the period                  18,015     19.1%       23,357      18.5%    28,333    18.6%
Other comprehensive
income/(expenses) of the period
Exchange differences on foreign
currency translation                   (1,486)                6,494                 7,658
Total comprehensive income for
the period                             16,529                29,851               35,991




                                                 79
Revenues

The vast majority of revenues for the periods under review were generated from the sale of frozen
seafood and, to a lesser extent, canned seafood.

Revenues increased from EUR 94,544 thousand in 2009 by EUR 31,675 thousand, or 33.5%, to
EUR 126,219 thousand in 2010. Measured in RMB, revenues increased by 26.0% during this
period. This increase in revenues resulted primarily from an increase in sales in all regions, in
particular a strong increase in sales to the United States and Mexico, and a further increase in
sales to Taiwan.

Revenues increased from EUR 126,219 thousand in 2010 by EUR 25,897 thousand, or 20.5%, to
EUR 152,116 thousand in 2011. Measured in RMB, revenues increased by 21.2% during this
period. This increase in revenues resulted primarily from a strong increase in sales to the United
States and Asia (excluding the PRC).

In the past, parts of the revenues were generated from seafood processed by a third party (2.2 %
of total revenues in 2008, 10.9 % in 2009, 9.3 % in 2010 and 0.7 % in 2011). This refers either to
semi-processed seafood which Haikui had to purchase on short notice due to insufficient supplies
or to dried seafood which Haikui began to offer in 2009 and was not able to produce itself by then.
In 2011 revenues from the sale of third party processed products decreased to an insignificant
share of total revenues.

Revenue breakdown by product category

The following table presents Haikui’s revenues broken down by the product categories "frozen
seafood" and "canned seafood" for each of the three years ended 31 December 2009, 2010 and
2011. The table also presents revenues by product category as a percentage of revenues for the
periods under review.

                                                          31 December
                                 2009                         2010                        2011
                         EUR              % of         EUR           % of        EUR               % of
                       thousand         revenue      thousand      revenue     thousand          revenue
                                                           (audited)
Frozen seafood              86,214          91.2%        114,306       90.6%       133,696               87.9
Canned seafood               8,330           8.8%         11,913        9.4%        18,420               12.1
Total                      94,544          100%          126,219      100%        152,116           100%




In 2009, 2010 and 2011, respectively, 91.2%, 90.6% and 87.9% of Haikui’s total revenues were
attributable to sales of frozen seafood and 8.8%, 9.4% and 12.1% of Haikui’s total revenues were
attributable to sales of canned seafood. The increase in revenues for canned seafood is largely
attributable to higher sales of canned fish-based seafood during the periods under review which
reflects Haikui’s increasing focus on this product category following the commissioning of the
canned seafood processing line in November 2007.

Revenues breakdown by product brand

Haikui’s products are sold under third party brands and its own "Haikui" brand.

The following table presents Haikui’s revenues broken down by product brand for each of the three
years ended 31 December 2009, 2010 and 2011.

The table also presents revenues by product brand as a percentage of revenues for the periods
under review.

                                                           31 December
                                  2009                         2010                       2011
                           EUR             % of          EUR         % of         EUR             % of


                                                    80
                         thousand         revenue          thousand      revenue      thousand         revenue
                                                                 (audited)
Haikui brand                   19,055         20.2%             26,951       21.4%         22,719          14.9%
Third party brands             75,489         79.9%             99,268       78.6%        129,397          85.1%
Total                         94,544          100%            126,219        100%        152,116           100%


In 2009, 2010 and 2011, respectively, 20.2%, 21.4% and 14.9% of Haikui’s total revenues were
attributable to sales of "Haikui" branded seafood and 79.9%, 78.6% and 85.1% of Haikui’s total
revenues were attributable to sales of third party branded seafood. Haikui branded products were
almost entirely distributed in the Chinese market. The shift in revenues from sales of third party
branded products to sales of Haikui branded products from 2009 to 2010 reflects Haikui’s strategic
decision to increase sales of "Haikui" branded products in the Chinese market in order to raise the
awareness of the Haikui brand with Chinese consumers. However, the decrease of revenues from
the sales of "Haikui" branded products in 2011 was mainly due to the decrease in sales of frozen
cuttlefish arising from raw material shortage as well as higher sales of crab- and fish-based
products to the United States and Asia (excluding the PRC) which are all under third party labels.

Revenue breakdown by type of raw seafood used

The following table presents a breakdown of total revenues by the type of raw seafood processed
for each of the three years ended 31 December 2009, 2010 and 2011.

The table also presents revenues by type of raw seafood processed as a percentage of total
revenues for the periods under review.

                                                           31 December
                               2009                           2010                              2011
                         EUR              % of          EUR           % of             EUR               % of
                       thousand         revenue       thousand      revenue          thousand          revenue
                                                             (audited)
Crab                        18,363         19.4%           27,186       21.5%             56,681           37.3%
Prawn                       41,302         43.7%           54,660       43.3%             36,003           23.7%
Fish                        14,228         15.1%           24,554       19.5%             43,768           28.7%
Other Seafood               20,651         21.8%           19,819       15.7%             15,664           10.3%
Total                      94,544          100%          126,219        100%            152,116            100%



Crab-based products

In 2009, 2010 and 2011, respectively, 19.4%, 21.5% and 37.3% of Haikui’s total revenues were
attributable to sales of crab-based products. The increase in the portion of revenues from crab-
based products to total revenues from 2009 to 2010 is mainly due to increasing demand from PRC
and Asian customers. The increase in the portion of revenues from crab-based products to total
revenues from 2010 to 2011 is mainly due to the bountiful harvest for crabs during 2011 which in
turn enabled higher production to meet strong demand from the United States.

Prawn-based products

In 2009, 2010 and 2011, respectively, 43.7%, 43.3% and 23.7% of Haikui’s total revenues were
attributable to sales of prawn-based products. The decrease in the percentage of revenues from
prawn-based products to total revenues from 2009 to 2010 resulted mainly from
disproportionately higher sales of fish-based and other products for the reasons explained below
and not because of any specific development in the category of prawn-based products. The
decrease in the percentage of revenues from prawn-based products in 2011 compared to 2010
was mainly due to smaller harvest as the cold weather conditions were less conducive to support
the growth of farmed prawns.

Fish-based products

In 2009, 2010 and 2011, respectively, 15.1%, 19.5% and 28.7% of Haikui’s total revenues were
attributable to sales of fish-based products. The portion of revenues from fish-based products to
total revenues increased significantly from 15.1% in 2009 to 19.5% in 2010 mainly because of a

                                                      81
strong increase in demand for canned fish-based seafood products as well as from sales of frozen
fish to Europe in 2010. The increase in the percentage of revenues from sales of fish-based
products in 2011 compared to 2010 was mainly due to higher demand for canned fish-based
seafood products and grilled fish products (frozen). The grilled fish products were first introduced
in December 2010 following the acquisition of a factory for grilled seafood products (see "Business
- Material Agreements - Agreements relating to the Purchase of a factory for grilled seafood").

Other seafood products

Other seafood products comprise mainly cephalopod (such as octopus, squid and cuttlefish) as well
as abalone, mussel, oyster, scallop and clam. Other seafood products are usually processed in
frozen or dried form.

In 2009, 2010, and 2011, respectively, 21.8%, 15.7%, and 10.3% of Haikui’s total revenues were
attributable to sales of other seafood products. The decrease in the percentage of revenues from
other seafood products to total revenues from 21.8% in 2009 to 15.7% in 2010 resulted mainly
from a decrease of sales in frozen cuttlefish to the PRC. The decrease in the percentage of
revenues from other seafood products to total revenues from 15.7% in 2010 to 10.3% in 2011
resulted from a decrease of sales in frozen cuttlefish to the PRC and decrease in sales of dried
scallops sold to Taiwan.

Development of quantities and average prices

In the period under review, revenues grew primarily because of increases in the quantity sold. The
average selling prices varied within the various categories. The following table presents Haikui’s
quantity sold and average selling prices by the type of raw seafood processed for each of the three
years ended 31 December 2009, 2010 and 2011. The numbers are unaudited.

                              2009                                  2010                                2011
                 Quantities sold       Average         Quantities sold       Average       Quantities sold       Average
                  (in tonnes)          product          (in tonnes)           product       (in tonnes)           product
                                     selling price                         selling price                       selling price
                                     (in EUR/kg)                           (in EUR/kg)                         (in EUR/kg)

Crab                      2,424                  7.6             4,073               6.7            6,069                9.3
Prawn                     6,890                  6.0             7,687               7.1            5,264                6.8
Fish                      4,654                  3.1             6,606               3.7            7,264                6.0
Other Seafood             4,576                  4.5             2,224               8.9            1,602                9.8
Total                    18,544                  5.1            20,590               6.1           20,199                7.5



Revenue breakdown by distribution channel

Haikui’s products are distributed through a customer network of distributors spanning the PRC,
Asia (excluding the PRC) and other parts of the global market, comprising three channels, namely
(i) overseas distributors; (ii) domestic distributors; and (iii) direct sales (see: "Business - Sales
and Distribution, Marketing").

The following table presents Haikui’s revenues broken down by distribution channel for each of the
three years ended 31 December 2009, 2010 and 2011.

The table also presents revenues by distribution channel as a percentage of total revenues for the
periods under review.

                                                                        31 December
                                            2009                            2010                         2011
                                    EUR                % of           EUR           % of           EUR          % of
                                  thousand           revenue        thousand      revenue        thousand     revenue
                                                                          (audited)
Overseas Distributors                   58,820          62.2%            86,353       68.4%          103,531          68.1%
Domestic Distributors                   35,582          37.6%            39,684       31.4%           48,333          31.8%
Direct Sales                               142           0.2%               182        0.1%              252           0.1%
Total                                  94,544           100%           126,219        100%          152,116           100%


                                                               82
Revenues from domestic distributors increased from EUR 35,582 in 2009 by EUR 4,102 thousand,
or 11.5%, to EUR 39,684 thousand in 2010 due to Haikui’s strategic decision to increase sales of
"Haikui" branded products in the Chinese market. While the total revenues increased from 2009
to 2010, the portion of revenues from domestic distributors as a percentage decreased from
37.6% in 2009 to 31.4% in 2010 due to a relatively higher increase in sales to overseas
distributors in 2010. Revenues from domestic distributors increased from EUR 39,684 thousand in
2010 by EUR 8,649 thousand, or 21.8%, to EUR 48,333 thousand in 2011. The portion of revenues
from domestic distributors as a percentage of total revenues increased from 31.4% in 2010 to
31.8% in 2011. This was mainly due to the sale of grilled seafood products introduced in
December 2010 which are mainly sold through domestic distributors.

Revenues from overseas distributors increased from EUR 58,820 thousand in 2009 by EUR 27,533
thousand, or 46.8%, to EUR 86.353 thousand in 2010 mainly due to the increase in sales to the
United States and Mexico, and a further increase in sales to Taiwan. Revenues from overseas
distributors as a percentage of total revenues increased from 62.2% in 2009 to 68.4% in 2010 due
to relatively higher increases in sales to overseas distributors in 2010 as compared to domestic
distributors in 2010. Revenues from overseas distributors increased from EUR 86.353 thousand in
2010 by EUR 17,178 thousand, or 19.9% to EUR 103,531 thousand in 2011 mainly due to the
increase in sales to the United States and Asia (excluding the PRC). However, the portion of
revenues from overseas distributors as a percentage of total revenues decreased from 68.4% in
2010 to 68.1% in 2011 due to proportionately higher growth in sales to domestic distributors as
compared to overseas distributors in 2011.

Revenues breakdown by geographical region

Revenues are allocated to certain geographical regions based on the location of the relevant
customer (i.e., except for direct sales, the location of the overseas and domestic distributors to
where the goods are shipped). Distributors may on-sell Haikui’s products to other countries or
regions than those in which they are located.

The following table presents Haikui’s revenues broken down by geographical region for each of the
three years ended 31 December 2009, 2010 and 2011. The table also presents revenues broken
down by geographical region as a percentage of total revenues for the periods under review.

                                                                      31 December
                                                2009                       2010                    2011
                                         EUR             % of       EUR           % of        EUR         % of
                                       thousand        revenue    thousand      revenue     thousand    revenue
                                                                        (audited)
Asia, excluding PRC                          38,020       40.2%        43,855       34.7%       55,313     36.4%
The PRC                                      35,725       37.8%        39,865       31.6%       48,585     31.9%
Europe                                       11,964       12.7%        13,037       10.3%       12,615      8.3%
United States of America                      7,330        7.8%        19,032       15.1%       30,903     20.3%
Others1                                       1,505        1.6%        10,430        8.3%        4,700      3.1%
Total                                       94,544        100%       126,219       100%       152,116      100%



1)     Mainly South Africa, Australia and Mexico.



In 2009, 2010, and 2011, respectively, 40.2%, 34.7% and 36.4% of Haikui’s total revenues were
attributable to sales to Asia (excluding the PRC), 37.8%, 31.6% and 31.9% of Haikui’s total
revenues were attributable to sales to the PRC, 12.7%, 10.3% and 8.3% of Haikui’s total revenues
were attributable to sales to Europe, 7.8%, 15.1% and 20.3% of Haikui’s total revenues were
attributable to sales to the United States of America, and 1.6%, 8.3% and 3.1% of Haikui’s total
revenues were attributable to other countries.

Except for sales of Haikui branded products in the Chinese market and sales to Taiwan, Haikui did
not focus on sales to any specific regions but accepted orders based on the competitiveness of


                                                           83
order terms (i.e. pricing, quality of produce needed, species of raw seafood, delivery terms (e.g.
free-on-board, credit period), lead time, size of packaging) that it receives.

Revenues generated in Asia (excluding the PRC) increased from EUR 38,020 thousand in 2009 by
EUR 5,835 thousand, or 15.3%, to EUR 43,855 thousand in 2010 mainly due to an increase in
sales to Taiwan. Revenues generated in Asia (excluding the PRC) increased from EUR 43,855
thousand in 2010 by EUR 11,458 thousand, or 26.1%, to EUR 55,313 thousand in 2011 mainly
due to higher sales to Hong Kong.

Revenues generated in the PRC increased from EUR 35,725 thousand in 2009 by EUR 4,140
thousand, or 11.6%, to EUR 39,865 thousand in 2010 due to Haikui’s continued emphasis to sell
own branded products which was partly offset by lower sales of frozen cuttlefish to a particular
distributor in the PRC. Revenues generated in the PRC increased from EUR 39,865 thousand in
2010 by EUR 8,720 thousand or 21.9% to EUR 48,585 thousand in 2011 mainly due to the sale of
grilled seafood products introduced in December 2010 which were mainly sold locally in China.

Revenues generated in Europe increased from EUR 11,964 thousand in 2009 by EUR 1,073
thousand, or 9.0%, to EUR 13,037 thousand in 2010 due to an increase in sales of fish-based
products (tilapia) as well as an increase in sales of canned seafood products. Revenues generated
in Europe decreased from EUR 13,037 thousand in 2010 by EUR 422 thousand, or 3.2%, to EUR
12,615 thousand in 2011 due to the decline in prawn products sold to Europe arising from smaller
prawn supply due to less conducive weather conditions.

Revenues generated in the United States of America significantly increased from EUR 7,330
thousand in 2009 by EUR 11,702 thousand, or 159.6% to EUR 19,032 thousand in 2010 mainly
due to an increase in sales of prawn-based products. Revenues generated in the United States of
America increased from EUR 19,032 thousand in 2010 by EUR 11,871 thousand, or 62.4%, to EUR
30,903 thousand in 2011 due to higher sales of crabmeat products to the United States.

Revenues generated in the other regions significantly increased from EUR 1,505 thousand in 2009
by EUR 8,925 thousand, or 593.0% to EUR 10,430 thousand in 2010 mainly due to increasing
sales, especially to a customer in Mexico. Revenues generated in other regions decreased from
EUR 10,430 thousand in 2010 by EUR 5,730 thousand, or 54.9%, to EUR 4,700 thousand in 2011
due to lower sales of prawn products to Mexico.

Costs of sales

Costs of sales consist of costs for the purchase of materials, direct labour costs and manufacturing
overheads. Direct labour costs include salaries and other staff-related costs of manufacturing.
Direct labour costs are dependent on the number of processing staff employed and wage levels
which, in turn, are influenced by the availability of labour in the market with the required skill sets.
Manufacturing overheads include mainly Value Added Tax ("VAT") (net, i.e. VAT paid minus
refunded VAT), utility charges, depreciation charges of property, plant and equipment,
consumables and supplies and other factory related costs.

Materials primarily include raw materials as well as semi-finished products and finished products
for which the processing was outsourced to third parties. Within the periods under review, costs of
raw materials and outsourced products comprised more than 94.3% of total costs of material with
the remainder comprising of packaging materials such as aluminium for canning, and processing
materials such as oil, sugar, salt and other seasonings which are required for the processing of
frozen and canned seafood products. The market price of raw materials varied in accordance with
changes in the demand and supply situation on the respective markets

The cost of sales in 2009 to 2011 were influenced by ad-hoc purchases of finished products from
other seafood processing companies in order to meet certain customer orders. In 2009, 2010 and
2011, approximately 14%, 16% and 9%, respectively, of total purchases were attributable to such
ad hoc purchases.



                                                  84
Costs of sales in percent of revenues were 76.7% in 2009 and 76.3 % in 2010. They have dropped
to 75.1 % of revenues in 2011.

The following table presents a breakdown of cost of sales for each of the three years ended
31 December 2009, 2010 and 2011.

The table also presents costs of sales as a percentage of total costs of sales for the periods under
review.

                                                                       31 December
                                           2009                            2010                           2011
                                    EUR      % of cost of          EUR        % of cost of       EUR        % of cost of
                                  thousand      sales            thousand        sales         thousand        sales
                                                                         (audited)
Materials                             68,946            95.0%        91,452          94.9%       107,681             94.3%
Direct labour                          2,200             3.0%         2,946            3.1%        3,730              3.3%
Manufacturing overheads                1,378             1.9%         1,962            2.0%        2,792              2.4%
Total                                72,524             100%        96,360           100%       114,203              100%


Costs of sales increased from EUR 72,524 thousand in 2009 by EUR 23,836 thousand, or 32.9%,
to EUR 96,360 thousand in 2010 in line with the increase in processing volume.

Costs of sales increased from EUR 96,360 thousand in 2010 by EUR 17,843 thousand, or 18.5%,
to EUR 114,203 thousand in 2011, which was in line with the increase in processing volume.

Costs of sales breakdown by product category

The following table presents Haikui’s costs of sales by product category for each of the three years
ended 31 December 2009, 2010 and 2011.

The table also presents costs of sales by product category as a percentage of total costs of sales
for the periods under review.

                                                                 31 December
                                 2009                               2010                               2011
                          EUR            % of cost of       EUR            % of cost of         EUR            % of cost of
                     thousand               sales         thousand             sales          thousand            sales

                                                                  (audited)
Frozen seafood
                                66,285         91.4%              87,583          90.9%            100,501           88.0%
Canned seafood
                                 6,239          8.6%               8,777           9.1%               13,702         12.0%
Total
                            72,524             100%               96,360         100%             114,203            100%



In 2009, 2010, and 2011, respectively, 91.4%, 90.9% and 88.0% of Haikui’s total cost of sales
were attributable to costs associated with the purchase of goods for the frozen seafood processing
and 8.6%, 9.1% and 12.0% of Haikui’s total cost of sales were attributable to costs associated
with the purchase of goods for the processing of canned seafood. The gradual increase in costs of
sales for the processing of canned seafood during the periods under review was consistent with the
increase in sales of canned seafood following the commissioning of the canned processing line in
November 2007.

Costs of sales breakdown by raw seafood processed

The following table presents Haikui’s total costs of sales by the type of raw seafood processed for
each of the three years ended 31 December 2009, 2010 and 2011. The table also presents costs of
sales by raw seafood processed as a percentage of total costs of sales for the periods under
review.

                                                                     31 December
                                           2009                          2010                             2011
                                  EUR        % of cost of         EUR      % of cost of         EUR         % of cost of

                                                            85
                         thousand       sales        thousand        sales        thousand     sales
                                                             (audited)
Crab                         13,400         18.5%        19,874          20.6%        40,943       35.9%
Prawn                        31,833         43.9%        41,917          43.5%        28,361       24.8%
Fish                         10,992         15.2%        18,700          19.4%        32,910       28.8%
Other seafood products       16,299         22.5%        15,869          16.5%        11.989       10.5%
Total                       72,524          100%        96,360           100%       114,203        100%


Costs of sales for crab-based products increased by 48.3% from 2009 to 2010 and increased by
106.0% from 2010 to 2011. Costs of sales for prawn-based products increased by 31.7% from
2009 to 2010 and decreased by 32.3% from 2010 to 2011. Costs of sales for fish-based products
increased by 70.1% from 2009 to 2010 and increased by 76.0% from 2010 to 2011. Costs of sales
for other seafood products decreased slightly by 2.6% from 2009 to 2010 and decreased by 24.5%
from 2010 to 2011.

Gross profit and gross profit margin

Haikui’s overall gross profit margin was approximately 23.3% in 2009, 23.7 % in 2010 and 24.9%
in 2011. The gross profit margin was affected by changes in the product mix and by changes in the
prices of raw materials and selling prices of Haikui’s products for the periods under review.

The following table presents the breakdown of Haikui's overall gross profit margin by the raw
seafood used for processing for each of the three years ended 31 December 2009, 2010 and 2011.

                                                                               31 December
                                                                 2009              2010        2011
                                                                  %                 %           %
                                                                                (audited)
Crab                                                                    27.0            26.9           27.8
Prawn                                                                   22.9            23.3           21.2
Fish                                                                    22.7            23.8           24.8
Other seafood products                                                  21.1            19.9           23.5
Overall                                                                 23.3            23.7           24.9



The gross profit margin earned on the sale of crab-based products remained relatively stable in
2010 when compared to 2009. The gross profit margin earned on the sale of crab-based products
increased to 27.8% in 2011 as compared to 26.9% in 2010 due to lower raw material prices
arising from the bountiful harvest.

The gross profit margin earned on the sale of prawn-based products slightly increased from 22.9%
in 2009 to 23.3% in 2010. The gross profit margin decreased from 23.3% in 2010 to 21.2% in
2011 mainly due to the lack of supply for prawns, leading to higher raw material prices.

The gross profit margin earned on the sale of fish-based products increased from 22.7% in 2009
to 23.8% in 2010 mainly due to adjustments that Haikui made in the sale prices which more than
offset the increase in cost of sales for fish-based products. The increase is also attributed to higher
sales of canned seafood which is made entirely of fish. The gross profit margin earned on the sale
of fish-based products increased from 23.8% in 2010 to 24.8% in 2011 mainly due to the sale of
grilled seafood products introduced in December 2010 and increase in sales of canned seafood
products which command higher margins compared to other frozen fish-based products.

The gross profit margin earned on the sale of other seafood products decreased from 21.1% in
2009 to 19.9% in 2010 mainly due to proportionately lesser sales of higher-valued products on
which Haikui earns higher margins and an increase in outsourced products with lower margins.
Such outsourced products include mainly dried seafood under the category others (e.g. dried
cephalopod), which have mainly been sold to Taiwan. The gross profit margin earned on the sale
of other seafood products increased from 19.9% in 2010 to 23.5% in 2011 due to the introduction
of abalone products which commanded higher margins and the decline in the sales of outsourced
dried seafood products which yielded lower margins.



                                                    86
Other income

Other income principally consists of government grants which are grants for the improvement in
food safety technology and subsidy for research development efforts and improvement in
production technology. In addition, other income also results from the sale of processing by-
products and raw seafood leftovers after processing has been completed.

In 2009, 2010, and 2011, other income amounted to EUR 497 thousand, EUR 617 thousand and
EUR 285 thousand respectively. Other income as a percentage of revenues was 0.5% in 2009,
0.5% in 2010 and 0.2% in 2011.

Distribution costs

Distribution costs comprise mainly freight charges, inspection expenses and other sales-related
expenses (sales taxes, advertising and promotion costs and wages).

Distribution costs increased from EUR 778 thousand in 2009 by EUR 205 thousand, or 26.3%, to
EUR 983 thousand in 2010. This increase is in line with the general increase in sales volume.

Distribution costs increased from EUR 983 thousand in 2010 by EUR 613 thousand, or 62.4%, to
EUR 1,596 thousand in 2011 mainly due to the increase in logistic and inspection expenses which
were in line with the increase in sales volume as well as the increase in sales taxes following the
implementation of a new sales tax in December 2010. This new tax duty relates to the “City
Maintenance and Construction Tax and Education Surcharge” which was previously levied only
upon domestically funded enterprises and domestic individuals. Starting from December 1, 2010,
based on a Tax Circular issued by the State Administration of Taxation dated 4 November 2010,
these two surcharges are also levied upon FIEs and foreign tax payers. In addition, the Ministry of
Finance issued a Circular dated 7 November 2010, which encourages local authorities to also start
levying an additional local education surcharge. Sales taxes amounted to approximately EUR 480
thousand for the period ending 31 December 2011 compared to EUR 35 thousand for the period
ending 31 December 2010.

Distribution costs as a percentage of revenues were approximately 0.8%, 0.8% and 1.0% for
2009, 2010, and 2011, respectively.

Administrative expenses

Administrative expenses comprise mainly salaries and other staff-related expenses relating to the
management, administrative and support personnel, expenses for research and development,
depreciation charges for property, plant and equipment, and other administrative expenses such
as non-sales related taxes, travelling and entertainment expenses incurred by management and
costs of office supplies.

Administrative expenses decreased slightly from EUR 1,773 thousand in 2009 by EUR 77
thousand, or 4.3%, to EUR 1,696 thousand in 2010. This decrease resulted primarily from the
absence of withholding taxes in 2010 which was partly offset by increased wages, and increased
depreciation primarily as a result of the acquisition of a factory for grilled seafood products (see
"Business - Material Agreements - Agreements relating to the Purchase of a factory for grilled
seafood").

Administrative expenses increased from EUR 1,696 thousand in 2010 by EUR 886 thousand, or
52.2%, to EUR 2,582 thousand in 2011. This increase resulted primarily from additional headcount
and depreciation expense charges arising from the acquisition of the grilled seafood assets in
December 2010.

Administrative expenses as a percentage of revenues were 1.9% in 2009, 1.3% in 2010 and 1.7%
in 2011, respectively.



                                                87
Other operating expenses

Other operating expenses comprise mainly the impairment of intellectual property rights,
donations, and forfeited rentals.

In 2009, 2010 and 2011, other operating expenses amounted to EUR 44 thousand,
EUR 41 thousand and EUR 48 thousand, respectively, which were negligible when expressed as a
percentage of revenues.

Finance (expenses)/income, net

Finance (expenses)/income is the net position of finance expenses and finance income. Finance
income comprises bank interest income, foreign exchange gains, and the amortisation of unearned
interest. Finance expenses comprise interest expenses for short term bank loans and other
borrowings (see "Balance Sheet Data - Financial Liabilities"), foreign exchange losses, bank
charges and amortisation of unearned interest.

Financial income decreased significantly from financial income of EUR 219 thousand in 2009 by
EUR 1,561 thousand, or 712.8% to financial expenses of EUR 1,342 thousand in 2010 due to
significant foreign exchange losses as a result of revenues earned in USD, which, during the
periods under review, decreased in value compared to the RMB, and to amortisation of unearned
interest in relation to the advance payments to raw seafood suppliers. Financial expenses
increased from EUR 1,342 thousand in 2010 by EUR 271 thousand, or 20.2% to EUR 1,613
thousand in 2011 due to foreign exchange losses as a result of revenues earned in USD, which,
during the periods under review, decreased in value compared to the RMB.

Taxation

For the periods under review, the effective tax rate for 2009 was 10%, for 2010 it was 11% and
for 2011 was 12%. Under the income tax law of the PRC currently in effect, the general income tax
rate is 25%. The general tax for FIEs such as Haikui will gradually be adapted to the general tax
rate so that for 2009, 2010, 2011 and 2012 the general tax rates for FIEs are 20%, 22%, 24%,
and 25%, respectively. However, Haikui enjoys certain additional tax rebates based on its status
as a FIE, which provides for an exemption from income tax in 2008 and a 50% reduction in income
tax rate from 2009 to 2011. Therefore, based on current income tax laws, Fujian Haikui was
effectively taxed at 10% in 2009, 11% in 2010 and 12% in 2011 and is effectively taxed at 25%
starting from 2012.

Balance sheet data

The following table presents the balance sheet data of Haikui Singapore as at 31 December 2009,
2010 and 2011 on a consolidated basis, which was derived from the audited Historical
Consolidated Financial Statements.

                                                                   31 December
                                                      2009            2010            2011
                                                      EUR              EUR            EUR
                                                    thousand        thousand        thousand
                                                                    (audited)
Assets
Non-current assets
Intangible assets                                           798            2,208             2,298
Property, plant and equipment                             5,358           14,755            14,371
Deferred tax assets                                           -              239               267
Other non-current assets                                  1,841            3,056             1,067
Total non-current assets                                  7,997          20,258            18,003
Current assets
Inventories                                               13,648          15,317           23,892
Trade and other receivables                               19,822          36,117           49,941
Cash and cash equivalents                                 14,918          14,951           25,587
Other current assets                                         945           1,806            7,493
Total current assets                                     49,333          68,191          106,913
Total assets                                             57,330          88,449          124,916

                                               88
                                                                     31 December
                                                       2009             2010             2011
                                                       EUR               EUR             EUR
                                                     thousand         thousand         thousand
                                                                      (audited)
Equity and liabilities
Equity
Share capital                                                7,870            7,870            7,870
Statutory reserves                                           5,830            5,830            5,830
Capital reserve                                                388              388              388
Other reserves                                               2,835            2,835            2,835
Currency translation reserve                                 1,106            7,600           15,258
Retained earnings                                           32,402           55,759           84,091
Total equity                                               50,431           80,282          116,272
Non-current liabilities
Financial liabilities                                       3,768            4,206            2,283
Total non current liabilities                               3,768            4,206            2,283
Current liabilities
Income tax liabilities                                        817            1,141            1,508
Financial liabilities                                         328              283            2,183
Trade payables                                                630            1,486            1,535
Other current liabilities                                   1,356            1,051            1,135
Total current liabilities                                   3,131            3,961            6,361
Total liabilities                                           6,899            8,167            8,644
Total equity and liabilities                               57,330           88,449          124,916



Non current assets

Intangible assets

Intangible assets relate to land use rights.

Intangible assets increased significantly from EUR 798 thousand as at 31 December 2009 by EUR
1,410 thousand, or 176.7% to EUR 2,208 thousand as at 31 December 2010 due to the acquisition
of a factory for grilled seafood and other types of frozen seafood in the fourth quarter 2010 which
carries significant values for land use rights and goodwill.

Intangible assets increased from EUR 2,208 thousand as at 31 December 2010 by EUR 90
thousand, or 4.1% to EUR 2,298 thousand as at 31 December 2011 due to RMB/EUR currency
translation effects.

Property, plant and equipment

Property, plant and equipment comprise leasehold buildings (including the processing facilities),
plant and machinery, office equipment, motor vehicles, furniture and fittings and construction in
progress.

Property, plant and equipment increased from EUR 5,358 thousand as at 31 December 2009 by
EUR 9,397 thousand, or 175.4% to EUR 14,755 thousand as at 31 December 2010. This increase
resulted primarily from the acquisition of a factory for grilled seafood and other types of frozen
seafood in the fourth quarter 2010.

Property, plant and equipment decreased from EUR 14,755 thousand as at 31 December 2010 by
EUR 384 thousand, or 2.6%, to EUR 14,371 thousand as at 31 December 2011. This decrease
resulted primarily from depreciation charges which were offset by RMB/EUR currency translation
effects and additions made during the year.

Deferred tax assets

Deferred tax assets are recognised on temporary differences between the carrying amounts of
assets and liabilities in the consolidated financial statements and the corresponding tax bases used
in the computation of taxable profit, and are accounted for using the liability method. Deferred tax


                                                89
assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised.

Deferred tax assets as at 31 December 2010 amounted to EUR 239 thousand and arose from the
acquisition of grilled seafood factory assets in December 2010. Deferred tax assets increased by
EUR 28 thousand or 11.7% to EUR 267 thousand as at 31 December 2011, which was due to the
increase in temporary differences between the carrying amounts of assets and the corresponding
tax bases used in the computation of taxable profit.

Other non-current assets

Other non-current assets reflect long-term advances paid to suppliers of raw seafood (e.g.
aquaculture farms) and to producers of processed seafood products not produced by Haikui itself
(e.g. dried seafood). Long-term advances were first made in 2009, with a value of EUR 1,841
thousand as at 31 December 2009, which increased by EUR 1,215 thousand, or 66.0%, to EUR
3,056 thousand as at 31 December 2010 and decreased by EUR 1,989 thousand or 65.1% to EUR
1,067 thousand as at 31 December 2011. Long term advances are recorded as other non-current
assets, whereas short term advances are recorded as other current assets. The increase in long-
term advances in 2010 was a result of the expansion in supplier base to cater for and secure raw
material supplies to meet the expected growth in revenues. The decrease in 2011 was due to the
reclassification of certain advances to current assets as the amount will be due in 2012.

Current assets

Inventories

Inventories comprise raw materials such as seafood supplies (i.e. raw seafood), processed seafood
(i.e. products held on stock), packaging materials (such as paper packaging, aluminium cans) and
other consumables (including seasoning ingredients such as tomatoes, oil, sugar and salt, as well
as items such as disposable gloves and mouth covers).

Inventories increased from EUR 13,648 thousand as at 31 December 2009 by EUR 1,669
thousand, or 12.2% to EUR 15,317 thousand as at 31 December 2010. This increase resulted
primarily from an increase of processed seafood held on stock due to the extension of Haikui’s
storage capacities in the fourth quarter of 2010 which was partially offset by a reduction of the
stock of seafood supplies.

Inventories increased from EUR 15,317 thousand as at 31 December 2010 by EUR 8,575
thousand, or 56.0% to EUR 23,892 thousand as at 31 December 2011 mainly due to the increase
in processed seafood held as stocks pending delivery and also in anticipation of the factory closure
during the Lunar New Year in January 2012.

Haikui’s average inventory turnover period for the periods under review was as set out below:

                                                                  2009           2010    2011
Inventory turnover1 period in days                                 63             58      66
1)    Inventory turnover = [(Average year-end inventory/cost of materials)] x 365 days
Trade and other receivables

Trade receivables comprise claims against customers for outstanding payments and other
receivables such as claims for VAT rebates.

Trade and other receivables increased from EUR 19,822 thousand as at 31 December 2009 by EUR
16,295 thousand, or 82.2%, to EUR 36,117 thousand as at 31 December 2010. This increase
resulted primarily from increasing sales and a higher proportion of sales being generated in the
fourth quarter 2010 as compared to 2009 and from an increase in VAT rebates. Trade and other
receivables increased from EUR 36,117 thousand as at 31 December 2010 by EUR 13,842
thousand, or 38.3% to EUR 49,941 thousand as at 31 December 2011 due to a higher proportion
of sales being generated in the fourth quarter 2011, in particular in December 2011 as compared

                                                          90
to 2010. The maximum credit period on sales of goods was 90 days during the periods under
review.

Haikui's average trade receivables turnover period for the periods under review was as set out in
the table below:

                                                                  2009           2010          2011
Trade receivables turnover1 period in days                         55             74            97
1)    Trade receivables turnover = [(Average year-end trade receivables/revenue)] x 365 days
Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and cash deposited in banks.

Cash and cash equivalents amounted to EUR 14,918 thousand as at 31 December 2009 and
remained relatively stable with an insignificant increase of EUR 33 thousand, or 0.2% to EUR
14,951 thousand as at 31 December 2010 as cash flow generated from operations was used to
finance the acquisition of grilled seafood factory assets in December 2010. Cash and cash
equivalents increased from EUR 14,951 thousand as at 31 December 2010 by EUR 10,636
thousand or 71.1% to EUR 25,587 thousand as at 31 December 2011. The increase was due to the
increase in profits, resulting in the increase in cash flow generated from operations.

For the main reasons for the changes in Haikui’s cash position please see the discussion of Haikui’s
liquidity in this section under "Liquidity" below.

Other current assets

Other current assets comprise current prepaid expenses, short term advances paid to suppliers
and other receivables. Current prepaid expenses result from prepayments of outstanding amounts
under the World Bank loans to the PRC authorities administering the World Bank loans, and to
prepaid expenses for this Offering. As these payments for the World Bank loans are not
immediately applied by the PRC authorities to reduce the amounts outstanding under the World
Bank loans, Haikui records receivables from the PRC authorities (see: "Business - Material
Agreements - World Bank Loan Agreements").

Other current assets increased from EUR 945 thousand as at 31 December 2009 by EUR 861
thousand, or 91.1%, to EUR 1,806 thousand as at 31 December 2010. This increase resulted
primarily from the increase in prepaid expenses arising from the prepaid expenses for a planned
initial public offering on the Frankfurt Stock Exchange in 2010/2011 which was partly offset by a
decrease in other receivables.

Other current assets increased from EUR 1,806 thousand as at 31 December 2010 by EUR 5,687
thousand, or 314.9% to EUR 7,493 thousand as at 31 December 2011. This increase resulted
primarily from reclassification of certain long term advances to current assets as the amounts will
be due in 2012.

Equity

Equity comprises share capital, statutory reserve, capital reserves, other reserves, foreign
currency translation reserve and retained earnings.

Statutory reserves relate to the statutory reserve required under PRC law (see "Regulatory
Environment - Foreign Investment Law - Dividend Distribution of Wholly Foreign-Owned
Enterprises") and 5% of net profits which Haikui appropriated to the statutory staff welfare reserve
fund on a voluntary basis. The statutory staff welfare reserve is designated to be used for the
collective welfare of the employees. Capital reserves relates to the difference between the carrying
amounts and the fair value of loans from directors/shareholders. Other reserves resulted from the
difference between the purchase consideration and the book value of the shares in Fujian Haikui
acquired by Haikui Singapore. Foreign currency translation reserves relate to currency translation
differences.

                                                          91
Equity increased from EUR 50,431 thousand as at 31 December 2009 by EUR 29,851 thousand, or
59.2%, to EUR 80,282 thousand, as at 31 December 2010. This increase resulted from a strong
increase in retained earnings as well as from an increase in currency translation reserves.

Equity increased from EUR 80,282 thousand as at 31 December 2010 by EUR 35,990 thousand, or
44.8%, to EUR 116,272 thousand as at 31 December 2011. This increase resulted from a strong
increase in retained earnings as well as from an increase in currency translation reserves.

Non-current liabilities

Financial liabilities

Financial liabilities comprise bank loans and other borrowings (i.e. the non-current portion of
borrowings from the World Bank which are administered by the local PRC government under the
World Bank’s programme to support aquaculture activities and loans (see: "Business-Material
Agreements - World Bank Loan Agreements") and loans from directors (i.e. from Mr. Chen Zhenkui
and Mr. Huang Zhenping) for working capital purposes. The loans from Mr. Chen Zhenkui and Mr.
Huang Zhenping are interest free and will have to be repaid in 2012 ("Related Party Transactions -
Summary of Transactions with related Parties - Loans and Advances from Directors and
Shareholders").

                                                                    As at 31 December
                                                           2009            2010         2011
                                                           EUR              EUR         EUR
                                                         thousand        thousand     thousand
Financial Liabilities (non-current)
Bank loans and other borrowings                                2,581          2,544          2,283
Loans from directors                                           1,187          1,662              -
                                                               3,768          4,206          2,283



Financial liabilities (non-current) increased from EUR 3,768 thousand as at 31 December 2009 by
EUR 438 thousand, or 11.6%, to EUR 4,206 thousand as at 31 December 2010. This increase is
mainly due to foreign exchange translation differences as the Euro has weakened against the
Chinese Renminbi as at 31 December 2010 as compared to 31 December 2009 and the increase in
financial liabilities for loans from directors due to fair value adjustments.

Financial liabilities (non-current) decreased from EUR 4,206 thousand as at 31 December 2010 by
EUR 1,923 thousand, or 45.7%, to EUR 2,283 thousand as at 31 December 2011. This decrease
resulted mainly from the reclassification of loans from directors from non-current to current as the
amount will be due in 2012 and annual repayments made for the World Bank loan.

Current liabilities

Income tax liabilities

Income tax liabilities relate to provisions for income taxes due in 2009 amounting to EUR 817
thousand as at 31 December 2009. Income tax liabilities increased from EUR 817 thousand in
2009, by EUR 324 thousand, or 39.7% to income tax liabilities of EUR 1,141 thousand in 2010.
This is due to an increased tax rate as well as to increased taxable income in 2010. Income tax
liabilities increased from EUR 1,141 thousand as at 31 December 2010 by EUR 367 thousand, or
32.2%, to EUR 1,508 thousand as at 31 December 2011 due to an increased tax rate as well as to
increased taxable income in 2011.

Financial liabilities

Financial liabilities comprise other borrowings (i.e. the current portion of the loans from the World
Bank programme mentioned above) and the loans from directors which have been reclassified
from non-current to current as the amount will be due in 2012.


                                                 92
                                                                                 As at 31 December
                                                                      2009              2010         2011
                                                                      EUR                EUR         EUR
                                                                    thousand          thousand     thousand
Financial Liabilities (current)
Loans from directors                                                           -                    -    1,897
Other borrowings                                                             328                  283      286
                                                                             328                  283    2,183



Financial liabilities (current) decreased from EUR 328 thousand as at 31 December 2009 by EUR
45 thousand, or 13.7%, to EUR 283 thousand as at 31 December 2010. This decrease resulted
mainly from the full repayment of unsecured borrowings in 2010.

Financial liabilities (current) increased from EUR 283 thousand as at 31 December 2010 by EUR
1,900 thousand, or 671.4%, to EUR 2,183 thousand as at 31 December 2011 due to the
reclassification of loan from directors from non-current to current as the amount will be due in
2012 and annual repayments to be made under the World Bank loan.

Trade payables

Trade payables comprise mainly outstanding amounts due to suppliers of raw materials and
outsourced products.

Trade payables increased from EUR 630 thousand as at 31 December 2009 by EUR 856 thousand,
or 135.9%, to EUR 1,486 thousand as at 31 December 2010. This is due to increased purchases of
outsourced products from third party seafood processors. Trade payables increased from EUR
1,486 thousand as at 31 December 2010 by EUR 49 thousand or 3.3% to EUR 1,535 thousand as
at 31 December 2011 due to higher purchases of outsourced products from third party processors.
(see: "Management's Discussion and Analysis of Financial Condition and Results of Operation – Key
Factors affecting Haikui’s results of operations - Seasonality of both supply and demand").

Haikui's average trade payable turnover period for the periods under review was as set out in the
table below:

                                                                  2009           2010             2011
Trade payable turnover1 period in days                              2              4                5
1)    Trade payable turnover = [(Average year-end trade payables/cost of materials)] x 365 days



Other current liabilities

Other current liabilities comprise dividends payable, accruals (including provisions for audit fees,
tax agent fees), other payables due to shareholders, directors and related parties (see: "Related
Party Transactions - Summary of Transactions with Related Parties - Loans and Advances from
Directors and Shareholders").

Other current liabilities decreased from EUR 1,356 thousand as at 31 December 2009 by EUR 305
thousand, or 22.5%, to EUR 1,051 thousand as at 31 December 2010. This decrease resulted
mainly from the fact that no dividends were paid in 2010 which was partly offset by an increase in
accruals. Other current liabilities increased from EUR 1,051 thousand as at 31 December 2010 by
EUR 84 thousand or 8.0% to EUR 1,135 thousand as at 31 December 2011 due to increase in
other payables.

Liquidity

The following table presents cash flow data of Haikui Singapore for the years ended 31 December
2009, 2010 and 2011 which was derived from the audited Historical Consolidated Financial
Statements.


                                                          93
                                                                         31 December
                                                            2009             2010          2011
                                                            EUR              EUR           EUR
                                                          thousand         thousand      thousand
                                                                          (audited)
Operating activities
Profit before income tax                                      20,141           26,414        32,359
Adjustments for non-cash expenses /(income)
Amortisation of intangible assets                                  20               28           38
Depreciation of property, plant and equipment                     536              665        1,413
Interest expense                                                   60              103           14
Interest income                                                  (52)             (74)         (95)
Other non-cash expenses /(income)                               (172)              376          464
Changes in working capital
Inventories                                                   (3,823)             (41)       (7,021)
Trade and other receivables                                   (9,106)         (13,590)      (10,697)
Other current assets                                              136            (591)       (2,215)
Trade payables                                                    650              762          (36)
Other current liabilities                                         176              336            28
Income taxes paid                                             (1,285)          (2,838)       (3,765)
Cash flow from operating activities                            7,281           11,550        10,487
Investing activities
Cash outflows for other non-current assets                    (1,898)            (929)       (1,111)
Cash outflows for acquisition of grilled seafood                    -         (10,305)             -
factory
Cash outflows for property, plant and equipment                 (138)            (445)         (258)
Interest income received                                           52               74            95
Cash flows from investing activities                         (1,984)         (11,605)       (1,274)
Financing activities
Cash outflows for bank loans and other borrowings                (299)           (656)         (267)
Dividends paid                                                (1,687)            (926)             -
Interest paid                                                     (52)           (103)          (14)
Other cash proceeds /(outflows)                                    (3)               -             -
Cash flows from financing activities                         (2,041)          (1,685)         (281)
Net Increase in cash and cash equivalents                       3,256         (1,740)         8,932
Cash and Cash Equivalents at the beginning of the              11,937          14,918        14,951
period
Effects on Cash and Cash Equivalents from currency              (275)           1,773         1,704
translations
Cash and Cash Equivalent at the end of the                    14,918          14,951         25,587
period



Changes in working capital in the cash flow statements cannot be calculated on the basis of the
differences of the relevant balance sheet positions due to currency translation effects.

Net cash (used in)/from operating activities

Net cash from operating activities increased from EUR 7,281 thousand in 2009 by EUR 4,269
thousand, or 58.6%, to EUR 11,550 thousand in 2010. This increase was mainly attributable to an
increase in profits before income tax, decrease in inventories, which was partly offset by an
increase in trade and other receivables ad increase in income taxes paid.

Net cash from operating activities decreased from EUR 11,550 thousand in 2010 by
EUR 1,063 thousand, or 9.2%, to EUR 10,487 thousand in 2011. This decrease was mainly
attributable to the increase in working capital requirements which was largely in line with the
business expansion.

Net cash (used in)/from investing activities

Net cash used in investing activities increased significantly from net cash used in investing
activities of EUR 1,984 thousand in 2009 by EUR 9,621 thousand, or 484.9%, to net cash used in


                                                     94
investing activities of EUR 11,605 thousand in 2010. The increase was mainly attributable to the
acquisition of a factory for grilled seafood in the fourth quarter 2010.

Net cash used in investing activities decreased from EUR 11,605 thousand in 2010 by EUR 10,331
thousand, or 89.0%, to net cash used in investing activities of EUR 1,274 thousand in 2011. This
decrease was mainly attributable to the one-off acquisition of a factory for grilled seafood in the
fourth quarter 2010.

Net cash from/(used in) financing activities

Net cash used in financing activities decreased from net cash used in financing activities of EUR
2,041 thousand in 2009 by EUR 356 thousand, or 17.4%, to net cash used in financing activities of
EUR 1,685 thousand in 2010. This decrease was mainly attributable to the fact that dividends paid
in 2010 (second tranche of dividends for financial year 2009) were significantly lower than in
2009. The decrease was partly offset by an increase in bank loans and other borrowings.

Net cash used in financing activities decreased from EUR 1,685 thousand in 2010 by EUR 1,404
thousand, or 83.3%, to net cash used in financing activities of EUR 281 thousand in 2011. The
decrease was due to mainly to dividends paid in 2010. No dividend was declared or paid for the
financial year 2011.

Future commitments

Haikui had the following future commitments:

Haikui leased certain office under non-cancellable operating lease agreements with varying terms.
In addition, other operating expenditure has been contracted for but not provided in the financial
statements.

The following table sets out Haikui’s future commitments for non-cancellable operating lease
commitments.

                                                                   As at 31 December
                                                          2009            2010         2011
                                                          EUR              EUR         EUR
                                                        thousand        thousand     thousand
Future minimum lease payments
- not later than 1 year                                            5            14            15




The following table sets out Haikui’s future commitments for capital and other financial
commitments.

                                                                   As at 31 December
                                                          2009            2010         2011
                                                          EUR              EUR         EUR
                                                        thousand        thousand     thousand
Contracted and not provided for in the financial
statements
- other operating expenditure                                   225            101             -
- capital expenditure                                             -              -           940



Contingent liabilities

As at 31 December 2011, Haikui did not have contingent liabilities.




                                                95
Off-balance sheet and other arrangements

The Company has not removed any obligations from its balance sheet or created off-balance sheet
obligations in off-balance sheet transactions. There are no other obligations and risks which were
not reflected in the financial statements of Haikui.

Critical accounting policies

The Company has identified the following critical accounting policies which require its management
to make assumptions about matters that were uncertain at the time those policies were applied
and with respect to which management could reasonably have made different assumptions in the
relevant period or with respect to which changes in the assumptions reasonably likely to occur
from period to period would have a material impact on the presentation of its financial condition,
changes in financial condition or results of operations. Investors should read the following
paragraphs in conjunction with the financial statements, including the related notes, set out on
page F-1 et seq.

Accounting for business combinations

For acquisition accounting purposes, all identifiable assets and liabilities acquired in a business
combination are recognised at fair value as of the date of acquisition. Significant estimates are
used to calculate the fair value of these assets and liabilities as of the date of acquisition.
Estimates are furthermore used to determine the useful life of the acquired assets.

Allowance for trade receivables

Trade receivables are recorded at the amounts invoiced to the customers. The allowance for
doubtful receivables is the Group’s best estimate of the amount of probable credit losses in the
Group’s existing accounts receivable. Management uses judgment to determine the allowance for
doubtful receivables which is supported by historical repayment records of the customers.
Management of the Group reviews its allowance for doubtful receivables at least on a monthly
basis. Only after all means of collection have been exhausted and the collection of the amounts is
deemed to be remote, account balances are charged off against the allowance. No allowance for
trade receivables has been recognized as of 31 December 2009, 2010 and 2011.

Depreciation of plant and machinery

The costs of plant and machinery used for the purpose of seafood processing is depreciated on a
straight-line basis over the estimated useful lives of the assets. The Company estimates the useful
lives of the processing lines to be 10 years. The carrying amount of Haikui’s plant and machinery
as at 31 December 2009, 2010 and 2011 was EUR 1,923 thousand, EUR 4,334 thousand and
EUR 3,938 thousand, respectively. Changes in the expected level of usage and technological
developments could impact the economic useful lives and residual values of these plants and
machinery. Therefore, future depreciation charges could be revised.

Depreciation of leasehold buildings

The costs of construction of buildings are depreciated on a straight-line basis over the estimated
useful life of 20 years. The carrying amount of the Group’s leasehold buildings at 31 December
2009, 2010 and 2011 was EUR 3,279 thousand, EUR 9,957 thousand and EUR 9,982 thousand,
respectively. Changes in the physical condition of the buildings could impact the economic useful
life and residual value of the asset. As at 31 December 2011, there are no indications that the
remaining economic useful life of the buildings is significantly lower than the remaining useful life.

Net realisable values of inventories

Net realisable values of inventories are the estimated selling price in the ordinary course of
business, less estimated costs of processing and selling expenses. These estimates are based on
current market condition and the historical experience of selling products of similar nature. It could

                                                 96
change significantly as a result of competitors’ actions in response to severe industry cycles.
Management reassesses the estimations at the end of each financial year. The carrying amounts of
inventories as at 31 December 2009, 2010 and 2011 were EUR 13,648 thousand, EUR 15,317
thousand, and EUR 23,892 thousand, respectively.




Additional information on the Consolidated AG Financial Statements

This Prospectus also contains consolidated financial statements under IFRS of the Company for the
short financial year from 24 February 2011 until 31 December 2011 (the "Consolidated AG
Financial Statements").

The Consolidated AG Financial Statements differ from the Historical Consolidated Financial
Statements as follows: (1) The Consolidated AG Financial Statements show a different equity
capital as they reflect the investment held by the Company in Haikui Singapore, (2) as the
Company was only incorporated on 24 February 2011, the reporting period of the Consolidated AG
Financial Statements only encompasses the period beginning on 24 February 2011 and ending on
31 December 2011, leading to, lower period-based numbers as compared to the Historical
Consolidated Financial Statements. For example, the total assets shown in the Consolidated AG
Financial Statements and the Historical Consolidated Financial Statements were EUR 123,366
thousand and EUR 124,916 respectively. The revenues shown in the Consolidated AG Financial
Statements and the Historical Consolidated Financial Statements were EUR 132,987 thousand and
EUR 152,116 respectively. The net cash flow shown in the Consolidated AG Financial Statements
and the Historical Consolidated Financial Statements were EUR 1,673 thousand and EUR 8,932
respectively.

Additional information on the Individual AG Financial Statements

This Prospectus also contains financial statements under the German Commercial Code (HGB) of
the Company for the short financial year from 24 February 2011 until 31 December 2011 (the
"Individual AG Financial Statements"). The Individual AG Financial Statements were prepared
in accordance with the requirements of HGB and the supplementary provisions of the German
Stock Corporation Act (Aktiengesetz).

According to the Individual AG Financial Statements, the Company had a total equity of EUR 8,392
thousand, total liabilities of EUR 1,711 thousand, and total assets of EUR 10,103 thousand,
respectively, as at 31 December 2011. As the Individual AG Financial Statements show no
revenues for the short financial year 2011, they show a net loss of approximately EUR 1,608
thousand for the financial year 2011, which was mainly caused by costs related to IPO
preparations. In accordance with the accounting provisions of the German Commercial Code
(HGB), no cash flow statement was prepared for the Individual AG Financial Statements.




                                               97
                                              INDUSTRY OVERVIEW

Selected macroeconomic, statistical and industry related information provided in this section has
been prepared on the basis of various external sources. In particular, selected information relating
to the Chinese seafood processing industry and Haikui’s position therein was extracted from a
market research report conducted by Infobusiness Research & Consulting Sdn Bhd
("Infobusiness Research") dated 23 December 2010 and updated on 28 February 2012 (the
"Infobusiness Report") and GAIN Reports on Global Agricultural Information Network dated 1
July 2009, 31 December 2010 and 31 December 2011 conducted by USDA Foreign Agricultural
Service (the "USDA Foreign Agricultural Service 2009", "USDA Foreign Agricultural
Service 2010" and "USDA Foreign Agricultural Service 2011", respectively). Due to the
limited availability of public information about the seafood industry in China, Haikui specifically
commissioned Infobusiness Research to draft the Infobusiness Report for the purpose of extracting
certain information and statistics from that Infobusiness Report in this Prospectus.

There is only a limited amount of market data available for the global economy and Chinese
economy, and, in particular, for the Chinese seafood industry. Market data for past years will often
be collected based on published and/or other information from and about market partipants for
such years, and, therefore, is usually only available with a significant delay after the end of such
year. This in particular applies to data about the Chinese economy in general and the Chinese
seafood industry in particular. For this reason, certain market data used in this Prospectus still only
refers to the year 2010 as the most recent year, and/or only provides data for the year 2011 in
the form of estimates.

Overview of the Chinese economy

The table below shows the development of the gross domestic product ("GDP") in the PRC, actual
and projected, including its growth rates for the years 2008 to 2015:

                                     2008      2009      2010       2011       2012e       2013e     2014e      2015e

GDP (current     prices,   billion   31,405    34,090    39,798     45,822e    51,518      57,949    65,080     72,999
RMB)

GDP (constant prices, billion        11,717    12,798    14,120     15,457e    16,855      18,454    20,199     22,114
RMB)

Annual GDP growth (constant          9.6%      9.2%      10.4%      9.2%1      8.2%1       8.8%1     9.5%       9.5%
prices), percent change

____________

Notes:
e: = estimate
GDP (constant prices): Base year 1990
1) Percent change according to International Monetary Fund, World Economic Outlook Update, January 2012; According to
International Monetary Fund, World Economic Outlook Database, September 2011 the estimated percent change for 2011,
2012 and 2013 was 9.6%, 9.5% and 9.5%, respectively.


Source: International Monetary Fund, World Economic Outlook Database, September 2011;
International Monetary Fund, World Economic Outlook Update, January 2012

GDP increased from RMB 34,090 billion in 2009 to RMB 39,798 billion in 2010. Despite being
affected by the worldwide financial crisis, China’s GDP was estimated to grow to RMB 45,822
billion in 2011, representing one of the highest GDP growth rates worldwide.

The table below shows the development of the per capita annual disposable income of urban and
rural households in the PRC for the years 2001-2011:

                  2001     2002      2003     2004    2005        2006     2007     2008      2009      2010       2011



                                                             98
RMB,     urban     6,860   7,703   8,472   9,422   10,493       11,760   13,786   15,781   17,175   19,109   21,810
households

RMB,       rural   2,366   2,476   2,622   2,936   3,255        3,587    4,140    4,761    5,153    5,919    6,977
households


____________

Source: PRC National Bureau of Statistics, Yearbook 2010, Press Releases dated 20 January 2011
and 30 January 2012

China’s continued historic growth was accompanied by rising disposable income levels, in
particular of urban residents. During the period from 2001 to 2011, the per capita annual
disposable income of Chinese urban residents increased from RMB 6,860 to RMB 21,810 (at a
CAGR of 12.3%). The per capita annual disposable income of Chinese rural residents increased
from RMB 2,366 in 2001 to RMB 6,977 in 2011 (at a CAGR of 11.4%) (Source: PRC National
Bureau of Statistics, Yearbook 2010, Press Releases dated 20 January 2011 and 30 January 2012),
leading to increased living standards. Continuing growth in disposable income is likely to lead to
increased middle-income consumer spending, especially in urban areas.

Global seafood industry

Global production of seafood

In 2009, 145.1 million tonnes of fresh seafood (including fish) for human and industrial
consumption were globally produced, or harvested, through both capture fishing and aquaculture
worldwide, as compared to 71.9 million tonnes in 1980, 97.7 million tonnes in 1990, 125.9 million
tonnes in 2000 and 136.4 million tonnes in 2005. Preliminary data for 2010 show an increase to
147 million tones and estimates for 2011 show a further increase to 152 million tonnes. In recent
years, global capture fishing production remained relatively stable, ranging from 84.7 million
tonnes in 1990 to 90.0 million tonnes in 2009. In 2010, capture fishing production dropped to 88
million tonnes due to El Niño, a climate pattern that occurs across tropical Pacific Ocean roughly
every five years causing extreme weather in many regions of the world, but estimates for 2011
show a recovery to 90 million tonnes. Since 1990, aquaculture began to grow substantially as a
percentage of global fish and seafood production. Specifically, aquaculture grew from
approximately 13.1 million tonnes (13.4% of global seafood production) in 1990 to approximately
55.1 million tonnes (38.0% of global seafood production) in 2009. Preliminary data for 2011
indicate further growth to 62 million tonnes (41.0% of the global seafood production). Aquaculture
can be considered a young food production sector from a global perspective, having risen from less
than 1 million tonnes produced worldwide in 1950 substantially over the last 50 years. This growth
rate has been growing at three times the growth rate of world meat production over the same
period. The value of the world aquaculture production (including the cultivation of aquatic plants
such as seaweed) was estimated at USD 106 billion in 2008. (Source: FAO Yearbook 2008; FAO
Fisheries and Aquaculture 2010; FAOSTAT; FAO Recent Developments 2011)

The ten largest fish and seafood producing countries accounted for approximately 57.7% and
87.4% of the global capture fishing production and the global aquaculture production, respectively,
in terms of quantity in 2008. China produced the most seafood in absolute terms in 2008 and in
2009, with 47.5 million tonnes produced in 2008, of which 32.8 million tonnes derived from
aquaculture resources and 50 million tonnes produced in 2009, of which 35 million tonnes derived
from aquaculture resources. (Source: FAO Yearbook 2008, FAO Recent Developments 2011)

Global consumption of seafood

The total quantity of global (human) consumption of seafood has increased by approximately
67.3%, or at a CAGR of 2.7%, from 70.4 million tonnes in 1990 to 117.8 million tonnes in 2009
(Source: FAO Fisheries and Aquaculture 2010). The growth in global seafood consumption has
been driven both by an increase in the global population from approximately 5.7 billion people in
1995 to approximately 6.9 billion people in 2010 (Source: United Nations, World Population

                                                           99
Prospects 2010) and an increase in the global seafood consumption per capita (from 10.9 kg in
1970 to 13.5 kg in 1990 to 17.1 kg in 2008, 17.3 kg in 2009 and 17.6 kg in 2010). Estimates for
2011 show further increase in the global seafood consumption to 17.8 kg per capita. World per
capita seafood consumption is projected to reach 17.9 kg in 2020. The global per capita
consumption of seafood derived from aquaculture increased from 0.7 kg in 1970 to 7.8 kg in 2008.
It is estimated that the contribution of aquaculture to the supply of fish and fishery products for
direct human consumption will reach 49% of the total in 2011. (Source: FAO Recent Developments
2010, FAO Recent Developments 2011; FAO Fisheries and Aquaculture 2010; FAOSTAT)

The following table shows the development of the per capita consumption of seafood in selected
countries from 1970 to 2007:

                           1970       1980       1990       2000       2005        2006      2007
China                        4.6        5.3       11.5       24.5       25.7        26.0      26.5
Japan                       62.3       64.6       70.9       66.7       60.8        60.8      60.8
North America               14.5       15.9       21.3       21.9       23.8        24.6      24.0
Central America              3.4        8.5       10.0        8.3        9.5         9.3       9.2
South America                7.2        8.7        8.4        8.3        8.3         8.6       8.9
Africa                       6.4        7.9        8.6        7.6        8.3         8.3       8.5
Asia                         9.1        9.7       12.5       17.3       18.0        18.2      18.3
Europe                      19.1       19.6       21.0       19.1       20.7        20.6      20.6
Oceania                     14.6       16.2       21.5       23.0       26.2        25.9      25.6
World                       10.9       11.5       13.5       15.7       16.5        16.6      16.7
____________

Source: FAOSTAT

Consumption volumes vary significantly by country. This is due to differences in urbanization and
different distribution channels for food, which allow for the availability of fish to the consumers.
Generally, consumption of seafood is significantly higher in developed countries than in developing
countries. In addition, economic and cultural factors strongly influence the level of seafood
consumption. (Source: FAO Recent Developments 2010, FAO Recent Developments 2011)

Chinese seafood industry

Overview

China has the highest number of fishers and fish farmers in the world. In 2008, 13.3 million people
were employed as fishers and fish farmers in China (Source: FAO Fisheries and Aquaculture 2010).
China is the largest producer of aquaculture seafood (Source: Infobusiness Report). Aquaculture
seafood production exceeds the capture fishing production with 32.8 million tonnes of aquaculture
production as compared to 14.8 million tonnes of captured fish in 2008 and 35 million tonnes of
aquaculture production as compared to 15 million tonnes of captured fish in 2009. (Source: FAO
Yearbook 2008; FAOSTAT; FAO Recent Developments 2011). In the southern part of China’s
coastal provinces and autonomous regions over 90 percent of the aquaculture farms belong to
individuals and private corporations. In the inland areas, over 90 percent of freshwater fish farms
are owned by individuals and run by families. (Source: Infobusiness Report)

China is the world’s largest seafood processor, due to low labour costs and economies of scale.
China is also the main seafood exporting country in the world, followed by Norway, Thailand and
Denmark (Source: FAO Yearbook 2008; Infobusiness Report). Seafood produced in the PRC as well
as imported seafood is filleted, de-boned and fried or frozen and turned into a growing variety of
value added products for export to many countries, including the United States of America, the
European Union, Japan, South Korea and Russia (Source: Infobusiness Report).

Seafood processing is one of North China’s major food processing industries, which is mostly
concentrated along the coastal cities of the Bohai and Yellow Seas, such as Qingdao and Dalian.
Shandong and Guangdong provinces in China process the highest amount of seafood in the
country, followed by Zhejiang and Fujian provinces. South China leads in the production and
processing of eels, prawns (also known as white shrimps) and tilapia. Fujian is the largest
                                               100
processor of eels in China. Shrimps are mostly farmed in Guangdong, Hainan and Guangxi
provinces, and tilapia mostly comes from Guangdong, Fujian, Guangxi and Hainan. Most fish
processing plants in the PRC are established as private enterprises owned by private investors,
including foreign companies. Apart from the large number of Hong Kong and Japanese joint
venture processing plants, companies from the United States of America, Taiwan and Canada have
also established fish processing facilities in China. (Source: Infobusiness Report)

China’s fishery export has increased remarkably since the early 1990s as a result of the growing
fishery production, as well as the expansion of the Chinese seafood processing industry. The
Chinese seafood processing industry is growing rapidly especially in port cities along China’s
eastern coast (Source: Infobusiness Report). The total number of seafood processing facilities
throughout China increased from 9,635 in 2009 to 9,762 in 2010. (Source: USDA Foreign
Agricultural Service 2010, USDA Foreign Agricultural Service 2011). Many of the export-oriented
seafood processing establishments are equipped with modern machineries and testing devices
(Source: Infobusiness Report).

Due to the high demand for processed seafood in the export market, Chinese processors import
raw products from the United States of America and other countries, including countries of the
European Union, Russia, Canada, Japan and South Korea. Most of the processed seafood is then
re-exported to markets outside of China. Frozen filleted and smoked seafood products are
especially popular in China’s export markets, and processors generally focus on these types of
products when producing for these markets. (Source: Infobusiness Report)

Although consumption of seafood in the PRC is gradually growing due to changing consumer
preferences, the processing industry is mainly export driven, as Chinese consumers generally
prefer to consume unprocessed, fresh or live fishery and seafood products (Source: Infobusiness
Report). Despite this export orientation of the processing industry, China also shows by far the
world’s largest consumption of seafood in absolute terms with 35.4 million tonnes consumed in
2007, as compared to Japan with 7.7 million tonnes and the USA with 7.4 million tonnes (Source:
FAOSTAT).

Seafood production and supply condition in China

China was the largest seafood producer in the world in absolute terms in 2008 and 2009 with 49.7
million tonnes produced in 2009, of which 34.8 million tonnes derived from aquaculture production
(Source: FAO Yearbook 2009; FAOSTAT; FAO Recent Developments 2011). According to USDA,
from 2006 to 2010, seafood production in China grew from 45.8 million tonnes to 53.7 million
tonnes, at a CAGR of around 4.1%. (Source: USDA Foreign Agricultural Service 2011).

The following table shows the development of the total production of seafood in the PRC as related
to the total world production in the years 2000-2009 (in million tonnes) according to FAO:

                           2000     2001     2002     2003     2004     2005     2006     2007     2008    2009
             Capture         14.6     14.2     14.2     14.3     14.5     14.6     14.6     14.7    14.8    14.9
China        fishing
             Aquaculture    21.5     22.7     24.1     25.1     26.6     28.1     29.9     31.4     32.7    34.8
             Total          36.1     36.9     38.3     39.4     41.1     42.7     44.5     46.1     47.5    49.7

             Capture         93.5     90.8     91.0     88.3     92.4     92.2     89.9     90.1    89.6    88.9
World        fishing
             Aquaculture    32.4     34.6     36.8     38.9     41.9     44.3     47.3     49.9     52.9    55.7
             Total         125.9    125.4    127.8    127.2    134.3    136.5    137.2    140.0    142.5   144.6
Share of                    28.7     29.4     30.0     31.0     30.6     31.3     32.4     32.9     33.3    34.4
China’s
total
production
in the
world’s
total
production
in %




                                                      101
____________

Source: FAO Yearbook 2009

Seafood production in China is forecasted to reach 54.6 million tonnes in 2011, a 1.7% increase
compared to 2010, and 55.3 million tonnes in 2012, a 1.3% increase compared to 2011 (Source:
USDA Foreign Agricultural Service 2011). Much of this production growth is due to the continued
expansion of aquaculture. Moreover, China’s rapid economic growth has resulted in increasing
disposable incomes, which has encouraged greater consumption among China’s consumers and
thereby triggered the growth of the production of seafood. In addition, the Chinese Government
engages in a modernization program to enhance product quality and safety while at the same time
aiming at the protection of water resources. The program resulted in an introduction of an
intensified monitoring and licensing system for export-oriented aquaculture farms (Source: USDA
Foreign Agricultural Service 2010, USDA Foreign Agricultural Service 2011 ).

The top eight seafood producing provinces of China accounted for 75.9% of the total production of
seafood in China in 2010. Shandong, Guangdong and Fujian provinces were considered the top
three seafood producing provinces due to their favourable coastal locations and freshwater
resources. Fujian province accounted for 18.3% of the national seawater seafood production and
for 2.9% of national freshwater seafood production in 2010. Taking into account both sources of
production, Fujian province had a share of 11.0%, ranking number three in the national hierarchy
in 2010. (Source: USDA Foreign Agricultural Service 2011)

The following table shows China’s top 8 seafood producing provinces in 2010 (thousand tonnes):

Province          Seawater production     Freshwater production      Total production      % Share

Shandong                         6,464                      1,374               7,838         14.6
Guangdong                        4,016                      3,274               7,290         13.6
Fujian                           5,127                        742               5,870         11.0
Jiangsu                          1,364                      3,240               4,604          8.6
Zhejiang                         3,813                        966               4,779          8.9
Liaoning                         3,497                        807               4,304          8.0
Hubei                                -                      3,351               3,351          6.2
Guangxi                          1,544                      1,211               2,755          5.1
Others                           2,150                     10,790              12,939         24.1
Total                           27,975                    25,755              53,730          100
____________

Source: USDA Foreign Agricultural Service 2011

From 2006 to 2010, the annual aquaculture seafood production in the PRC grew from approx.
31.2 million tonnes to approx. 38.3 million tonnes (at a CAGR of 5.3%). In particular, production
from freshwater culture experienced a strong growth over the period. A slightly slower growth of
aquaculture production is expected in the future.

Capture fishing production remained relatively stagnant from 2006 to 2010. It is expected that due
to limited freshwater and seawater natural resource availability, total catch is unlikely to increase
in the foreseeable future. In order to promote better use of resources and protect the
environment, the Chinese Government’s "Zero Growth" policy, i.e. a policy prohibiting further
growth, for capture fishing in China is expected to be maintained. (Source: USDA Foreign
Agricultural Service 2010, USDA Foreign Agricultural Service 2011)

The following table shows the development of the seafood production in China by capture fishing
and aquaculture, in the years 2006-2010 (%):

              Category                       2006        2007         2008         2009        2010
Aquaculture                                   68.0        69.1         69.7         70.8        71.3
Capture fishing                               32.0        30.9         30.3         29.2        28.7
__________

                                                102
Source: USDA Foreign Agricultural Service 2011; Infobusiness Report

Aquaculture comprises a significant portion of the raw materials used in seafood processing, due to
declining fish stocks in the seas. It is also supported by a strong fishmeal industry, which supplies
the feed ingredients to the fish. The aquaculture industry is more highly developed along the
eastern coastline of China, and these areas are focused on producing high-value, export-oriented
species. (Source: Infobusiness Report)

In the years 2006-2010, freshwater seafood production increased faster than seawater seafood
production. Specifically, freshwater aquaculture grew faster than freshwater catch during this
period. (Source: Infobusiness Report)

The following table shows the development of the seafood production in China, by seawater and
freshwater capture fishing and aquaculture, in the years 2006-2011 (thousand tonnes):

             Category                   2006       2007        2008       2009       2010     2011e
Total seafood production              45,836     47,475      48,956     51,164     53,729    54,570
Total      seawater      seafood      25,096     25,509      25,983     26,816     27,975    28,320
production
Seawater catch                         12,455     12,435      12,580     12,763     13,152    13,200
Seawater aquaculture                   12,642     13,073      13,403     14,052     14,823    15,120
Total     freshwater     seafood      20,740     21,966      22,973     24,348     25,754    26,250
production
Freshwater catch                       2,204       2,256      2,248       2,184      2,289     2,250
Freshwater aquaculture                18,536      19,710     20,725      22,165     23,465    24,000
____________

Note: e= estimate


Source: USDA Foreign Agricultural Service 2011

Further reasons for the growth of the seafood processing industry in China include low production
costs, high recovery rates, and high quality of finished products. Low labour costs contribute to low
production costs since labour is relatively cheap and abundant in China, especially when compared
to industrialised countries such as the United States of America. Most of the seafood processing
activities in China are done by hand which results in high recovery rates as compared to machine
processed seafood and in a higher quality finished product. (Source: Infobusiness Report)

In 2007, China produced 46.1 million tonnes of seafood, of which 6.8 million tonnes were used for
non-food purposes; imports amounted to 2.9 million tonnes and exports to 7.2 million tonnes.
(Source: FAO Yearbook 2008). Due to the relatively low labour costs, other countries such as the
United States of America, countries of the European Union, Russia, Canada, Japan and South
Korea export their fisheries to China for further processing. A substantial amount of the processed
seafood is then re-exported instead of being sold to the Chinese market. For example, it is
estimated that between 85% and 90% of the US seafood imported to China is either re-exported
back to the United States of America after being processed in China, or exported to other
countries. Less than 10% of the US seafood is kept in China for local consumption (Source:
Infobusiness Report).

There is no official data that can accurately distinguish the share of seafood imports destined for
China’s processing trade. It is estimated that between 60% and 75% of frozen seafood imported
to China is further processed and then re-exported. (Source: Infobusiness Report)

Impact of Japanese nuclear power plant incedents on Chinese seas

Following the incidents at the Japanese nuclear power plant at Fukushima in March 2011, the
Chinese authorities monitored the level of radioactivity in the atmosphere and sea water. The
latest marine and atmospheric radioactivity tests conducted in November 2011 showed no
abnormal radioactivity levels in the waters of Bohai Sea, Yellow Sea, East China Sea and the
northern South China Sea (Source: Marine Environment Information Report no. 6)

                                                103
Consumption of seafood in China

The per capita annual consumption of seafood in the PRC has been constantly rising from 4.6 kg in
1970 to 26.5 kg in 2007, whereas total consumption rose from 3.7 million tonnes in 1970 to 35.4
million tons in 2007 (Source: FAOSTAT). The seafood consumption is highest in coastal regions
and areas with high disposable income.

The following table shows the top provinces and municipalities in the PRC in terms of per capita
expenditure value on seafood products of urban residents in 2009 and 2010:

                                                      2009                                       2010
Province                           Disposable            Seafood product              Disposable         Seafood
                                     income                 expenditure                 income           product
                                      value                (RMB/capita)                  value         expenditure
                                  (RMB/capita)                                       (RMB/capita)     (RMB/capita)
Fujian                                19,577                      954                    21,781           1,000
Shanghai                              28,838                      728                    31,838            818
Zhejiang                              24,611                      623                    27,359            714
Guangdong                             21,575                      594                    23,898            658
Hainan                                13,751                      619                    15,581            670
Tianjin                               21,402                      395                    24,292            444
Jiangsu                               20,552                      382                    22,944            422
Liaoning                              15,761                      350                    17,713            364
Shandong                              17,811                      312                    19,946            322
Guangxi                               15,451                      276                    17,064            293
Hubei                                    -                         -                     16,566            267
Nationwide average                    17,175                      301                    19,109            327
____________

Source: USDA Foreign Agricultural Service 2010, USDA Foreign Agricultural Service 2011

Chinese consumers traditionally prefer live and fresh seafood instead of processed seafood.
Therefore, the seafood processing industry is rather export focused (Source: USDA Foreign
Agricultural Service 2010, USDA Foreign Agricultural Service 2011). However, the increasingly
modern lifestyles of many Chinese consumers have recently led to an increasing preference for
convenience products, easy to prepare and easy to cook. Furthermore, in much of inland China
such as the provinces of Inner Mongolia, Shaanxi, Shanxi, Henan, Xinjiang and Tibet fresh seafood
are scarce due to geographic isolation, underdeveloped distribution systems and transportation
bottlenecks. In these more isolated regions, seafood products in processed forms are more popular
because of their longer shelf life (Source: Infobusiness Report).

The following tables show the sales of processed seafood by value and volumes from 2006 to 2016
in China:

Fish/seafood         2006      2007       2008    2009     2010     2011    2012e     2013e    2014e      2015e   2016e
                                                        (in million tonnes)
Frozen processed     189.8     204.4      220.5   234.0    251.8    272.2    294.9    320.4    348.6      380.3   415.8
Canned/preserved      28.3      30.6       33.1    35.2     38.4      42.5    47.3     52.1     56.6       61.1    65.7
Total                218.1     235.0      253.6   269.2    290.2    314.7   342.2     372.5    405.2      441.4   481.5



Fish/seafood          2006       2007        2008      2009       2010     2011     2012e        2013e        2014e     2015e      2016e
                                                                      (in million RMB)

Frozen processed     4,563.3    4,966.7     5,499.3   5,809.7   6,269.0   7,021.5    7,634.0    8,312.4      9,076.2   9,930.3   10,891.1
Canned/preserved       806.4      878.2       984.2   1,058.4   1,177.5   1,357.1    1,526.3    1,695.7      1.848.4   2,005.7    2,166.5
Total                5,369.7    5,844.9     6,483.5   6,868.1   7,446.5   8,378.6    9,160.3   10,008.1     10,924.6    11,936   13,057.6
____________

Note: e = estimate


(Source: Euromonitor Canned/Preserved Food in China, 2011; Euromonitor Frozen Processed Food
in China, 2011)

                                                            104
In addition, seafood has also entered the fast food sector. Compared with the traditional meat and
poultry options, seafood items are becoming increasingly popular. One of the largest quick service
restaurants in China has focused on developing healthy menu offerings since 2007 using deep sea
cod and Wild Alaskan Salmon nuggets. (Source: USDA Foreign Agricultural Service 2009)

Market share analysis

The market for frozen processed seafood is very fragmented. Haikui sold 18,544 tonnes of seafood
in 2009 and 20,590 tonnes of seafood in 2010, of which, respectively 16,085 tonnes and 17,537
tonnes were frozen and 2,459 tonnes and 3,053 tonnes were canned seafood. Throughout the
PRC, the total processed aquatic product quantity amounted to 14.8 million tonnes in 2009 and
16.3 million tonnes in 2010, of which 9.4 million tonnes and 10 million tonnes, respectively, were
frozen or frozen processed goods (Source: USDA Foreign Agricultural Service 2010, USDA Foreign
Agricultural Service 2011). Based on Haikui’s portion of sales of frozen processed seafood in 2009
and 2010 (volume based) Haikui believes that its market share can be calculated as approximately
0.2% in 2009 and 2010, respectively, with the market being defined as all types of processed
seafood products from China, i.e. packaged or unpackaged, branded or unbranded, destined for
Chinese or export markets.

With regard to the Chinese market for processed, packaged and branded seafood, Haikui’s market
share is significantly higher. Haikui has recorded revenues for sales in the PRC of RMB 339.0
million, RMB 357.1 million and RMB 437.3 million in the years 2009, 2010 and 2011, respectively.
Total sales volumes in the PRC for frozen and canned seafood amounted to RMB 6,868.1 million,
RMB 7,446.5 million and RMB 8,378.6 million in 2009, 2010 and 2011, respectively (Source:
Euromonitor Canned/Preserved Food in China, 2011; Euromonitor Frozen Processed Food in China,
2011). This leads to an approximate market share of 4.9%, 4.8% and 5.2% in 2009, 2010 and
2011, respectively. It is to be noted, however, that this calculation does not take into
consideration that parts of Haikui’s revenues recorded as PRC sales are derived from primary
processed seafood and that sales to PRC distributors may be exported by the latter. In addition,
Haikui’s revenues are based on wholesale prices, whereas the above total sales volume for the PRC
market is calculated based on retail prices. Margins are therefore not included in the market share
calculations. Notwithstanding the foregoing, Haikui nevertheless believes that the above market
share figures for the years 2009-2011 are a reasonable indicator for its positioning in the PRC
market for processed seafood as the uncertainties are partly offsetting against each other.

Prospects and outlook

The fishing industry is an important component of the agriculture sector in China. In particular, the
Fujian provincial government intends to modernize the agriculture sector in order to achieve higher
food self-sufficiency. There are also efforts to strengthen cooperation in the agriculture sector
between the Fujian province and Taiwan. This includes the further opening of the Taiwanese
market for processed seafood from the Fujian province. In this context, supporting industries in
marine-related industries such as ship-building and ship-repairing will be further enhanced, along
with the construction of more fishing ports. At the same time, the cultivation of aquatic products
will be actively encouraged. (Source: Infobusiness Report)

The expansion of the aquaculture area in both coastal seawater and freshwater contributed greatly
to the seafood production growth while capture fishing is anticipated to decline gradually, due to
limited availability of resources. Yield increases triggered by technological advances are also
projected to enhance production. Seafood processing, which is mainly export-driven, is also
expected to expand further in the coming years. In the Chinese market, sustained high gross
domestic product and disposable income growth rates are expected to continue to increase
Chinese consumption of seafood products. However, seafood imports for China’s domestic
consumption are growing at a slow pace. (Source: Infobusiness Report)

The seafood processing industry in China is expected to grow further due to strong government
commitment and support of the industry. The demand for seafood products is growing, both within
China and internationally. Policy initiatives and investments in aquaculture are likely to promote

                                                105
the continued growth of the seafood processing industry and the supply of seafood products, not
only to meet the Chinese demand, but also to support the growing international export market.
(Source: Infobusiness Report) According to the International Food Policy Research Institute,
seafood consumption per capita in China will increase to 35.9 kg in 2020 (Source: International
Food Policy Research Institute).

For additional factors affecting the demand for Haikui’s products, see "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Key Factors affecting Haikui’s
Results of Operations - Demand for Haikui’s Seafood Products".

Government policies and incentives

Monitoring healthy aquaculture and safe seafood

In October 2011, China’s Ministry of Agriculture ("MOA") published its 12th Five Year (2011-2015)
Development Plan for Fishery. The aim of the plan is to continue to promote a more sustainable
development model with rational utilization of resources, protect environment, produce safe
products and increase farmers' income. Other measures include technology utilisation and more
stringent supervision of drug use. Major targets of the plan include: meeting the growing demand
for quality seafood products by domestic consumers, achieving balance between aquaculture
development and ecological protection, meeting certain safety and quality targets for seafood
products and reaching production of 60 million tonnes by 2015, with 75% from aquaculture (as
compared to estimated 72% in 2011). (Source: USDA Foreign Agricultural Service 2011)

According to MOA, the priority of the sector is to improve production efficiency, upgrade product
quality and ensure adequate supply of safe seafood. In order to promote "a healthy development
of the aquaculture industry", MOA aims at re-constructing and standardizing 1.3 million hectares of
fish ponds until 2015 to raise productivity. Additionally, it is intended to license 100% of
aquaculture production facilities by 2015. MOA has also established agricultural product quality
stations in many counties and plans to establish further stations nationwide. (Source: USDA
Foreign Agricultural Service 2011)

The "zero growth" policy, i.e. a policy prohibiting further growth, for Chinese wild seafood catch is
expected to be maintained although overseas catch is encouraged. In certain periods, there is a
fishing moratorium in China’s seawaters and a fishing ban in the Yangtze River. Additionally, MOA
enforced a two-month fishing ban in the Pearl River region in 2011. In Dongshan Island, in May
and June of each year fishing with nets affixed to the seabed and in June and July fishing by
trawling is prohibited (see: "Regulatory Environment - Fishing Regulations in the PRC"). In an
effort to protect and restore the ecological balance, the state and provincial fishery departments
conduct frequent releases of aquatic fingerlings to waters nationwide. Catches in other territorial
seas are encouraged but nevertheless the expected production will remain stable in general.
(Source: USDA Foreign Agricultural Service 2011; Infobusiness Report)

To ensure the quality of seafood, particularly goods for export, MOA and the General
Administration for Quality Supervision, Inspection and Quarantine ("AQSIQ") adopted a strict
licensing regime for all export-oriented farms and processing establishments. MOA and AQSIQ
conduct frequent field audits of export-oriented aquaculture farms. Seafood for export is subject to
mandatory inspection and must be accompanied by AQSIQ inspection certificates. (Source: USDA
Foreign Agricultural Service 2010, USDA Foreign Agricultural Service 2011)

Following the incidents at the Japanese nuclear power plant at Fukushima in March 2011, the
Chinese authorities monitored the level of radioactivity in the atmosphere and sea water. The
latest marine and atmospheric radioactivity tests conducted in November 2011 showed no
abnormal radioactivity levels in the waters of Bohai Sea, Yellow Sea, East China Sea and the
northern South China Sea (Source: Marine Environment Information Report no. 6).




                                                106
Government policies on import and export of seafood products

The Chinese government views seafood processing as a valuable industry due to its role in
generating new employment and producing by-products that can be used as feed ingredients for
the fishmeal industry. Basically, imports for the purpose of further processing are free of tariff and
value added tax ("VAT"). Processed products, however, must be re-exported. On the other hand,
imports destined for China’s domestic consumption are subject to both tariff and VAT. (Source:
USDA Foreign Agricultural Service 2011)

Government incentives

The Chinese government has provided additional incentives for manufacturers in the form of a
variety of special economic zones ("SEZ"). These SEZs, which provide a variety of preferential
policies, are designed to encourage industry growth. SEZs are considered to be outside of the PRC
customs territory. The bonded and duty-free features of SEZs provide processors, importers, and
exporters with opportunities to apply innovative solutions to the challenges associated with doing
business in China. Fiscal incentives such as tax holidays vary across zones, and are generally more
generous in export-oriented and high technology industries. (Source: Infobusiness Report)

The Dongshan Special Economic Zone was approved as a state-level development zone in January
1993. It has a national open port which is the nearest port from the Mainland China to Taiwan. The
zone encourages investments in high-tech and manufacturing projects, in particular building
materials, port warehousing, bonded warehouses, electronics, textiles, food processing, medical
devices, bio-engineering and light industries (see "Business - Strengths"). In addition, since
February 2001, China’s Fujian provincial government has been actively advocating the Taiwan
Strait West Coast Economic Zone which includes the coastal cities of Xiamen, Zhangzhou,
Quanzhou and Fuzhou along Fujian province. (Source: Infobusiness Report)

In March 2006, the proposal for the Dongshan National Seafood Economic Development Zone (the
"Dongshan Special Economic Zone" or the "Zone") was formally endorsed in the Eleventh Five
Year Plan (2006-2010) passed by the Chinese National People’s Congress. The most important
feature of the Zone proposal is to facilitate economic and political integration relationships between
Fujian and Taiwan across the Taiwan Straits. The Chinese national government attaches a great
deal of importance to this proposal for political and economic reasons. From a political perspective,
the Chinese national government would like to utilise Fujian’s geographic and cultural proximity
with Taiwan to reinforce people and economic exchange between Taiwan and Fujian. From a
historical perspective, culture, and language, around 70 percent of Taiwan population came from
Fujian, granting Fujian a special advantage in economic integration between Taiwan and China.
This was the reason why Fujian was chosen by the Chinese government as the first province to
engage in economic exchange with Taiwan in the late 1970s, with the establishment of the Xiamen
SEZ. (Source: Infobusiness Report)

The Twelfth Five Year Plan (2011-2015) aims at modernization of the aquaculture industry through
the use of new equipment, technology and production practices, education, and better planning
and regulations as well as optimizing the structure of the aquaculture industry in order to achieve
high yields and returns. The Twelfth Five Year Plan (2011-2015) also aims at developing the
marine fishing industry by upgrading the fishing equipment and changing fishing practices in order
to keep the seafood stocks in China from depletion. As regards seafood processors, it is envisaged
that they will be responsible for the upgrading of their processing facilities and practices. (Source:
Infobusiness Report)

Competition and competitors

The Chinese market for processed seafood is characterized by large processing capacities and a
very fragmented industry landscape. According to the MOA, there were 9,762 seafood processing
facilities in the PRC in 2010, with a capacity of 23.9 million tonnes. 67 % of these facilities were
located in Zheijang, Shandong, Fujian and Guangdong. (Source: USDA Foreign Agricultural Service
2011)

                                                107
According to confirmations issued by the Fujian Provincial Committee of Foreign Trade and
Economic Cooperation on 22 February 2010, 13 May 2011 and 20 February 2012, respectively,
Haikui was the top seafood exporting company in Fujian Province in terms of export volume in the
years 2009, 2010 and 2011.

The Company believes that there are approximately nine major seafood processors in China that
directly compete with Haikui in both the Chinese and overseas markets. They are involved in
processing of a wide spectrum of seafood products, although Haikui believes that its product range
is not entirely comparable to that of its competitors. Some of the seafood processors are involved
solely in the processing of canned seafood, while some are involved exclusively in the processing
of frozen seafood. The Company believes that some of its competitors have even increased their
business activities in the aquafarming business in order to provide a stable source of seafood for
further processing.

Brief profile of Haikui’s competitors in China

Publicly available data is not available for many of Haikui’s competitors, especially due to the fact
that not all of Haikui’s competitors are listed companies. Most of Haikui’s competitors do not
compete with Haikui on the whole range of Haikui’s portfolio of processed seafood.

Based on this, Haikui believes the following companies to be its major competitors:

Name of company, seat                                                    Principal activities

Dalian Zhangzidao Fishery                                                Processing   of   seafood
Shandong Oriental Ocean Sci-Tech                                         Processing   of   seafood
Dongshan County Dongya Aquatic Product, Fujian                           Processing   of   seafood
Dongshan Rongfeng Food, Fujian                                           Processing   of   seafood
China Marine Food Group, Fujian(1)                                       Processing   of   seafood
Longhai Gelin Seafoods, Fujian                                           Processing   of   seafood
Zhanjiang Guolian Aquatic Products, Guangdong(1)                         Processing   of   seafood
Guangdong Hengxing Group, Guangdong                                      Processing   of   seafood
HQ Sustainable Maritime Industries, Hainan(1)                            Processing   of   seafood
Ningbo Jinri Food, Hubei                                                 Processing   of   canned seafood
Dong Xing Aquatic Product Processing (Taiwan Chii Chwan Group), Fujian   Processing   of   canned seafood

____________

1)    listed companies




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                                            BUSINESS

Overview

Haikui is an established seafood processing company with operating facilities in China. It produces
and sells processed frozen and canned seafood for the Chinese market and for international
markets. Haikui’s products are made of a broad range of raw seafood, including prawn, crab,
various types of fish, and other species such as shellfish, cephalopod and abalone. Haikui sells
seafood that has undergone primary processing, such as cleaning, cutting, and peeling, as well as
seafood that has undergone further processing, such as cooking, grilling, seasoning, drying and/or
coating. Haikui’s product portfolio consists of more than 100 different products of frozen and
canned seafood. The frozen seafood category accounted for 90.6% and 87.9%, and the canned
seafood category accounted for 9.4% and 12.1% of Haikui’s revenues in 2010 and 2011,
respectively.

The raw seafood to be processed is sourced from regional suppliers located close to Haikui’s
processing facilities in Dongshan Island, China. The raw seafood used in Haikui’s products
originates both from capture fishing and aquaculture. In 2010 and 2011, capture fishing
contributed 48.6% and 59.3% to Haikui’s overall revenues, and aquaculture contributed 51.4%
and 40.7% to Haikui’s overall revenues, respectively. During 2011, Haikui has sourced it raw
materials from 84 suppliers for raw seafood being aquaculture farms and operators of fishing
vessels. As at 31 December 2011, Haikui has entered into framework agreements for the supply of
raw seafood for Haikui’s products with 61 of those suppliers. These framework agreements provide
Haikui with a strong supply base, including priority rights regarding the purchase of the raw
seafood and price discounts.

As at 31 December 2011, Haikui’s processing facilities had an aggregate annual output processing
capacity of approximately 28,543 tonnes per year. Haikui’s processing facilities are located in
Dongshan Island, Zhangzhou, Fujian Province, PRC. Dongshan Island lies between the East China
Sea and South China Sea, two of the three key marine resource centres in the PRC, and provides
direct access to abundant, diverse and sustainable marine resources. The Dongshan region is also
in close proximity to Taiwan, one of Haikui’s main overseas markets. A special economic zone for
the fishing and seafood processing industry is currently under development at Dongshan in
proximity to Haikui’s processing facilities, the Dongshan National Seafood Economic Development
Zone (the "Dongshan Special Economic Zone" or the "Zone") which Haikui expects to become
fully operational by the end of 2013. Haikui expects the Dongshan Special Economic Zone to
provide it with several advantages of an expansion of infrastructure, including, inter alia, a new
harbour for international fishing vessels, which will also provide for an increased quantity and
variety of raw seafood available.

Haikui’s customers are distributors (including large processing companies) in the PRC and
overseas, whereby most of the overseas customers are based in Asia, Europe, and the United
States. Haikui’s products sold in the PRC are made under Haikui’s own "Haikui" brand or under
third party brands, while sales in overseas markets are principally made under third party brands.

Haikui has three distribution channels, namely (i) overseas distributors accounting for 68.4% and
68.1% of Haikui’s overall revenues in 2010 and 2011, respectively, (ii) domestic distributors
accounting for 31.4% and 31.7% of Haikui’s overall revenues in 2010 and 2011, respectively and
(iii) direct sales, accounting for 0.1% and 0.2% of Haikui’s overall revenues in 2010 and 2011,
respectively. In terms of domestic sales, Haikui receives most of its customer orders directly from
PRC distributors. In terms of international sales other than to Asian countries, Haikui receives most
of its customer orders through buying agents which receive orders directly from international
distributor customers seeking seafood products. An important pillar of Haikui’s growth strategy is
the expansion of its own brand sales in China.

Haikui has experienced significant revenue growth for the periods under review. Haikui’s revenues
increased from EUR 94,544 thousand in 2009 to EUR 126,219 thousand in 2010 and to
EUR 152,116 thousand in 2011, corresponding to a compounded annual growth rate of 26.8%

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over this period. Haikui’s net profits increased from EUR 18,015 thousand in 2009 to EUR 23,357
thousand in 2010 and to EUR 28,333 thousand in 2011, corresponding to a compounded annual
growth rate of 25.4% over this period.

Haikui employed an average of 2,194 employees, including 1,589 temporary contract workers in
the full financial year 2011.

Strengths

The Company believes that the following competitive strengths are the main drivers of its
sustainable future growth:

•    Established track record with strong market recognition as a manufacturer of high quality
     seafood products: Haikui has an operating history of more than fifteen years and is an
     established seafood processor with a broad customer base in China and overseas. The
     Company believes that Haikui has achieved strong market recognition for its high quality
     seafood products. Haikui is committed to consistently delivering quality seafood products to
     customers and has implemented quality control procedures in all stages of its production
     processes to ensure that its seafood products are of high quality. Haikui’s product quality
     and quality assurance procedures have been recognized by various certifications and awards.
     For example, Haikui received the HACCP certification, which is a quality control certificate
     required for export of food to the United States and Europe, in 2000. In 2003, Haikui was
     certified to be in compliance with ISO 9001:2000 quality assurance standards. In 2005,
     Haikui also received the certificate as a European Union Registered Exporter of Seafood
     Products from the Fujian Entry-Exit Inspection and Quarantine Bureau. In 2010, Haikui was
     certified to be in compliance with ISO 14001:2004 environmental management standards
     and ISO 22000:2005 food safety management standards. All of these certificates have been
     maintained by the Company since they were first obtained. The Company believes that the
     international accreditations also serve as an important marketing tool for Haikui’s PRC
     market in the light of the rising health awareness of the increasingly affluent middle class in
     China.

     The Company believes that Haikui’s success in establishing its business reputation as a
     reliable producer of quality seafood products has also enabled Haikui to establish "Haikui" as
     a well-recognised consumer brand. The Company further believes that Haikui’s established
     business reputation has supported its growth by attracting new customers in the PRC and
     internationally.

•    Strong financial performance and high profitability: During the periods under review, Haikui’s
     revenues increased from EUR 94,544 thousand in 2009 to EUR 126,219 thousand in 2010
     and to EUR 152,116 thousand in 2011. At the same time, Haikui’s net profits increased from
     EUR 18,015 thousand in 2009 to EUR 23,357 thousand in 2010 and to EUR 28,333 thousand
     in 2011. In addition, Haikui had high gross profit margins in the periods under review, of
     23.3% in 2009, 23.6% in 2010, and 24.9% in 2011, as well as high positive cash flows from
     operating activities of EUR 7,281 thousand in 2009, EUR 11,550 thousand in 2010, and
     EUR 10,487 thousand in 2011. As a result, Haikui can generally fund its business operations
     out of its cash flows from operating activities without having to rely on external borrowings.

     Haikui’s strong financial position is also evidenced by its strong balance sheet and working
     capital. Haikui’s total equity amounted to EUR 50,431 thousand as at 31 December 2009, to
     EUR 80,282 thousand as at 31 December 2010 and to EUR 116,272 thousand as at
     31 December 2011, leading to a high equity ratio of 88.0% as at 31 December 2009, 90.8%
     as at 31 December 2010, and 93.1% as at 31 December 2011. Haikui’s net current assets
     (i.e. working capital) amounted to EUR 46,202 thousand as at 31 December 2009, to EUR
     64,230 thousand as at 31 December 2010, and to EUR 100,552 thousand as at
     31 December 2011.




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    The Company believes that Haikui’s financial performance allows it to compete more
    effectively with its PRC competitors, in particular smaller companies with limited financial
    resources and working capital, providing it with greater bargaining power, in particular when
    sourcing raw materials.

•   Sizeable processing capacities and facilities in strategic locations: Haikui is one of the largest
    seafood processing companies in Dongshan Island in the Fujian province of the PRC.
    According to a confirmation issued by the Fujian Seafood Processing Association, based on
    sales and export statistics, Haikui was the largest seafood processor in the Fujian Province in
    2011. As at 31 December 2011, Haikui had an annual output processing capacity of
    approximately 28,543 tonnes. This size allows Haikui to save costs through economies of
    scale in processing and in the sourcing of raw seafood.

    Haikui’s manufacturing facilities are located at Dongshan Island, the key marine port of
    Fujian Province with good access to Taiwan, Macau, Hong Kong and Southeast Asia.
    Dongshan is a principal location for capture fishing in the PRC as it is close to two of the
    three major marine resource areas in the PRC. As many suppliers of raw seafood from
    capture fishing and aquaculture farms are located at or near Dongshan Island, Haikui has
    access to a diversified supplier base. In addition, Dongshan is less than a two hours' drive
    away from the Xiamen port in Fujian Province, which services various international seafaring
    routes and thus allows for the timely and cost effective transportation of its finished products
    to its customers, which in turn helps to shorten the time-to-market of the products.

    A special economic zone for the fishing and seafood processing industry is currently under
    development at Dongshan in proximity to Haikui’s processing facilities, the Dongshan
    National Seafood Economic Development Zone (the "Dongshan Special Economic Zone"
    or the "Zone") which Haikui expects to become fully operational by the end of 2013. The
    Dongshan Special Economic Zone will comprise, inter alia, a new harbour for Chinese
    vessels, the conversion of an existing harbour near the Zone into an international harbour
    for fishing vessels, a bonded logistics centre including large cold storage warehousing
    facilities, seafood processing zones, a seafood trading centre, as well as equipment and
    maintenance facilities for shipping vessels. The Zone will increase the variety of raw seafood
    available for processing in Dongshan and allow the import duty free purchase of seafood
    supplied from international shipping vessels provided that the imported goods will be sold to
    international markets after processing. The Zone will also decrease supply side seasonality
    by allowing delivery of international seafood even at times of fishing restrictions in PRC
    waters, and by providing huge warehousing facilities.

•   Close cooperation with raw seafood suppliers: During 2011, Haikui had a supplier base
    including 84 pre-approved suppliers for both capture fishing and aquaculture resources, 61
    of which have entered into framework supply agreements based on Haikui’s standardized
    framework supply agreements with terms of one year up to three years. According to the
    framework supply agreements, Haikui makes prepayments to the respective supplier, and, in
    consideration, can purchase seafood at prices lower than the prevailing market price for the
    same sort of seafood. Total advances extended to suppliers under the framework
    agreements accounted for approximately 10% of total purchases in the previous year. The
    suppliers usually sell their raw seafood exclusively to Haikui, unless Haikui consents in
    writing to the sale to a competitor. With respect to aquaculture farmers, Haikui further
    provides advisory services and supervises the cultivation process by sending its supervisory
    staff to aquaculture farms on a regular basis. Haikui believes that its close cooperation with
    and supervision of its suppliers enables it to ensure stability of supply and that its supplies
    meet Haikui’s stringent quality requirements.

•   Broad product portfolio and product development skills: Haikui has a diversified product
    portfolio consisting of more than 100 different products of frozen and canned seafood from
    various marine species. The Company believes that it offers a broader and more attractive
    product range than most PRC seafood processing companies. Haikui recognises the
    importance of further enhancing its existing product portfolio and developing further

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      attractive products in order to maintain and even increase its market share. Haikui also
      emphasizes the development of new products and has a dedicated in-house product
      development department responsible for the development of new products. It has also
      entered into consultancy agreements regarding market research and product development
      with various institutes in the PRC, including the Fishery Research Institute of Fujian Province.
      Haikui aims to develop and market a number of new products each year. For example,
      recently it developed and marketed grilled fish (e.g. codfish, eel, and mackerel), filled fish
      balls, and abalone products. Haikui’s product development also includes market research
      activities in consumer trends and preferences. Its broad product offering enables Haikui to
      target different market segments. Haikui is one of few processors of seafood in the PRC
      which sells both frozen and canned seafood products.

•     Experienced and dedicated management team: Members of Haikui’s Management Board and
      other key operating personnel possess extensive operating and industry experience in
      Haikui’s business. Mr. Chen Zhenkui, Haikui’s CEO, has over 25 years of experience in the
      seafood processing industry coupled with a significant business network. He founded Haikui
      and has managed it since then. Mr. Chen Zhenkui is Vice-Chairman of the All-China
      Federation of Industry and Commerce - Aquatic Industry, Chairman of the Zhangzhou
      Aquatic Processing and Distributing Federation and a member of the Fujian Chamber of
      Commerce. Mr. Huang Zhenping, Haikui’s COO, is the brother of Mr. Chen Zhenkui and
      responsible for the corporate administration of Haikui. He joined Haikui in 1997. Mr. Huang
      Zhenping is Executive Member of the Dongshan County Chamber of Commerce, and Vice
      President of the Dongshan County Youth-Entrepreneur Association. The Company’s CFO, Mr.
      Alan Gey, joined Haikui in 2007 and has been responsible for the Haikui’s finance and
      accounting function since then. Mr. Alan Gey is a Singapore national, native both English and
      Chinese speaker, and has substantial experience in international accounting and financial
      reporting, as well as treasury, which he gained during his career at various international
      companies. Haikui believes that the experience of its key management team and its
      dedication in implementing Haikui’s business plans have in the past been instrumental in the
      growth and expansion of Haikui’s operations.

Strategy

Haikui is pursuing the following strategic objectives:

•     Expansion of the distribution network and strengthening of the market presence in the PRC
      and overseas: Haikui intends to expand its market presence in the PRC by strengthening its
      relationships with its existing distributors, expanding its distributor base and by expanding
      its distribution network. Haikui in particular intends to broaden its geographic market
      presence in the PRC by expanding its distribution network to China’s main business centres,
      such as Shanghai, Beijing, Chengdu and Chongqing, and to the PRC’s inner western regions
      with little access to fresh seafood, where it expects demand for conserved seafood to
      increase.

      In order to increase the brand awareness of Haikui’s products in the PRC, Haikui intends to
      also sell its products via flagship stores. Approximately six flagship stores in the main
      business centres in Haikui’s target regions in the PRC are intended to be opened within the
      next three years. Flagship stores will be approximately between 30 sqm and 50 sqm in size
      and will exclusively sell Haikui products. They will be operated by independent distributors.
      Haikui intends to subsidize the flagship stores by paying for their rent and outfitting.

      Haikui also intends to strengthen sales in its existing overseas markets. This, in particular,
      includes Taiwan, which Haikui believes to offer significant business potential to Haikui due to
      the close proximity to Dongshan Island and the signing of a free trade agreement between
      the PRC and Taiwan. In addition, Haikui intends to enter into new overseas markets and to
      target new customer groups. For example, Haikui's products are in conformity with Halal
      requirements which enables Haikui to target religious Muslim consumers. Haikui believes
      that the Halal certification is an important precondition for entering into consumer markets

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    with a large Muslim population, such as the Middle East, Indonesia, and certain parts of
    China.

    In order to strengthen its distribution network and its customer relations, Haikui intends to
    expand its sales and marketing department and its marketing activities.

•   Strengthening of brand image and recognition: Haikui believes that brand reputation and
    image are key factors to enhance its market presence in China. Haikui intends to invest in
    the branding, marketing and promotion of the "Haikui" brand to further develop the
    awareness of Haikui as a producer of quality seafood products in China. In addition to the
    planned opening of flagship stores, this includes the launching of various marketing
    activities, such as TV and newspaper advertisements, roadside billboards, and promotional
    events in supermarkets. By implementing such branding and marketing initiatives, coupled
    with its continued emphasis on the development of high quality and innovative products,
    Haikui believes that it can further enhance its brand reputation and achieve greater
    customer recognition and loyalty towards its brand and products.

•   Expansion of processing capacity: A key element of Haikui’s growth strategy is to increase its
    processing capacity and cold storage facilities. For this purpose, Haikui has currently one
    investment project in progress relating to the upgrading and installation of quick freezing
    facilities at its headquarter processing facilities in Dongshan. In addition, also other
    expansions and upgrades at its existing processing facilities are intended. This includes the
    the automation of the sealing of cans in its canned seafood processing lines to improve
    efficiency and increase overall output, and the construction of additional processing lines for
    abalone seafood products. Beyond that, Haikui also intends to construct a new factory for
    frozen and canned seafood close to its current business premises at Dongshan within the
    next three years. Haikui intends to at least double its processing capacity within the next
    three years.

•   Expansion of supply base by contracting new suppliers and intensifying cooperation with
    existing suppliers: In order to satisfy increasing market demand, Haikui believes that
    increasing its supplies of raw seafood will play a key role in Haikui’s future expansion. To
    achieve this goal, Haikui intends to win new suppliers, enter into framework agreements with
    additional suppliers, and to increase the order volumes from existing suppliers. In addition,
    Haikui intends to deepen the cooperation with aquaculture farms, in particular with regard to
    cultivation techniques, in order to increase the quality of raw seafood used for Haikui’s
    processing. Haikui also intends to work with new international suppliers, including fishing
    vessel operators, in particular from Taiwan, in connection with the full commencement of
    operations of the Dongshan Economic Zone.

•   Expansion of product range: Haikui intends to develop and market new products. For
    example, Haikui intends to expand its range of canned seafood products, which currently
    comprises only fish and abalone products. In the future, canned seafood products should
    also include crabs, prawns, and others.

•   Continuation in emphasis on research and product development and strengthen Haikui’s
    expertise and technical know-how: Haikui intends to further strengthen its product
    development capabilities in order to develop new products and further improve the quality of
    Haikui’s products, which Haikui believes is essential in order to adapt to changing consumer
    preferences. Haikui’s research and development activities will focus in particular on the
    development of new or improved aquaculture cultivation techniques, which Haikui intends to
    develop in cooperation with its aquaculture suppliers.

    Another focus will be the further improvement of techniques and introduction of new
    technologies to preserve the freshness and nutritional value of Haikui’s finished seafood
    products. Haikui generally intends to invest additional resources to improve Haikui’s
    expertise and technical know-how in relation to its product quality, processing techniques
    and efficiency. To achieve this, Haikui plans to purchase additional equipment and machinery

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       such as purifiers, testing equipment and sterilisation equipment to facilitate the product
       development activities. Haikui also intends to recruit more product development personnel
       as well as to conduct further joint research activities with external researchers.

Products

Overview

Haikui’s business is focused on the processing of two principal seafood product categories: frozen
and canned processed seafood. The main raw materials used in the processing of these two
product categories include crab, prawn, fish, and others (such as shellfish, abalone and
cephalopod). Haikui’s products are sold either under the "Haikui" brand or under a third party
brand.

Frozen seafood

Frozen seafood is the primary product category offered by Haikui. In 2009, 2010 and 2011,
revenues from the sale of frozen seafood accounted for 91.2%, 90.6% and 87.9%, respectively of
Haikui’s total revenues (revenues from frozen seafood to a limited extent also include revenues
derived from the sale of dried seafood).

The raw materials used to produce frozen seafood comprise fish, crabs, prawns, and others, and,
depending on the product, other additive ingredients, mainly spices. Frozen seafood may be sold
either after having undergone only primary processing, such as cleaning, cutting and peeling, or as
higher value processed seafood which has also undergone further processing steps such as
cooking, grilling, seasoning, drying, coating, etc. Sales of primary processed seafood may also be
made to customers who serve a higher value end of the value chain, and use Haikui’s products for
further processing before they re-sell them in the form of higher value seafood. Sales of seafood
that has been further processed as described above will usually be made to distributors who
directly re-sell the products, either under a third party brand, or under the Haikui brand.

Haikui’s frozen seafood category to a limited extent includes dried seafood, and pasteurized
seafood, mainly pasteurized crabs, which are not sold in frozen form but must be refrigerated
before they are used. The following are examples of the main types of seafood raw materials used
in and the main types of products from those raw materials in Haikui’s frozen seafood products
category:

   Type of marine resources                Examples of species               Examples of types of products

Crab (note: crabs are only sourced   Three-spot crab (portunus               Shelled crab meat, cut crab, whole
from capture fishing)                sanguinolentus), blue swimming          crab, crab cake, stuffed crab,
                                     crab (portunus haanii) and              pasteurised crab
                                     hairyback crab (charybdis natator)

Prawn (note: prawns are only         Whiteleg prawn (penaeus                 Shelled prawn meat, partially-
sourced from aquaculture farms)      vannamei) and red prawn                 shelled prawn, whole prawn, dried
                                     (solenocera crassicornis)               prawn, prawn ball, breaded prawn,
                                                                             shrimp rolls

Fish                                 Tuna, sardines, tilapia, mackerel,      Sliced fish meat, fish fillet, fish
                                     belt fish, catfish and eel              paste, fish balls, fish noodle, fish
                                                                             cake, breaded fish fillet, dried fish
                                                                             meat, whole fish, grilled eel

Other seafood products               Cephalopod (octopus, squid and          Dried     cuttlefish  and     squid,
                                     cuttlefish), mussel, oyster, scallop,   cuttlefish balls, seafood rolls,
                                     abalone, and clam                       breaded squid rings, sliced octopus
                                                                             and squid, squid fillet, whole
                                                                             octopus and squid, breaded oyster,
                                                                             mussel meat, oyster meat, scallop
                                                                             meat, abalone, clam meat



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Canned seafood

Canned seafood is the second product category offered by Haikui. In 2009, 2010 and 2011, sales
of canned seafood accounted for 8.8%, 9.4%, and 12.1%, respectively of Haikui’s total sales,
respectively. Haikui’s canned seafood is mostly distributed overseas under third party brands.

Currently, Haikui only uses fish and abalone to produce its canned seafood products. However,
Haikui intends to expand its range of canned seafood products in the future to also include crabs,
prawns, and others. Canned seafood is usually sold with seasoning and in sauces.

The following are examples of the main types of raw seafood used in and the main types of
products produced in Haikui’s canned seafood product category.

Type of marine            Examples of        Examples of types of products
resources                 species

Fish                      Sardines,          Tuna meat (in vegetable oil, tomato sauce or brined),
                          mackerel and       mackerel (in vegetable oil or tomato sauce) and sardines (in
                          tuna               vegetable oil or tomato sauce), spicy snapper, canned eel
Shellfish                 Abalone            Brined abalone



Processing

Haikui processes the majority of its frozen and canned seafood products in-house. The processing
of dried seafood products is outsourced to external processors, as Haikui currently does not have
processing facilities for dried seafood products. To a limited extent, Haikui has also outsourced the
processing of frozen seafood to external processors. This in particular applies to wild prawns
caught from capture fishing. Revenues derived from the sale of outsourced products amounted to
approximately EUR 10,261 thousand in 2009, EUR 16,551 thousand in 2010 and EUR 20,354
thousand in 2011.

Processing process

The steps involved in Haikui’s processing processes vary according to the type of marine resources
(such as crab, prawn, fish or others), product categories (frozen seafood or canned seafood), and
scope of processing (primary processing or further processing (higher value processing)).

Differences according to the type of marine resources relate to species specific processing steps
before the meat can be processed further, e.g. a crab has to be cracked and cut whereas a fish or
prawn has to be scaled or skinned.

The processing process of seafood typically consists of the following steps:




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Frozen seafood




Haikui inspects all of the raw seafood used in its products to ensure that they are in good condition
and meet the requisite quality standards (see: "Business - Processing - Quality Assurance"). Raw
seafood may either directly be processed or undergo quick freezing and warehousing before being
processed.

At the preparation stage, the raw seafood is cut to remove unwanted parts, scaled or shelled (as
appropriate) and thoroughly cleaned. Haikui limits its own activities to these steps when it
conducts only primary processing. Primary processing is primarily conducted for international
customers who are not mere distributors of seafood products but seafood processors serving a
higher value end of the processing chain.

However, Haikui also conducts further processing steps such as seasoning, cooking, grilling, and/or
coating the seafood with dough, for example in case of prawns coated in dough, before selling
them to its distributors. This in particular applies to products sold under the Haikui brand, but also
to products sold under third parties’ brands.

After undergoing processing, products will be sent for quick-freezing at -32°C to lower the
temperature of the final product to -18°C. The frozen product is packed into boxes and sealed.
After packing, the finished products are stored in cold storage facilities at a temperature of below
-20°C.

Instead of undergoing quick freezing, products sold in pasteurized form, in particular crabs, will
undergo pasteurization before packaging and refrigeration.




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Canned seafood

The following chart shows the processing steps for canned fish products:




Canned abalone products in principle undergo the same processing steps. In addition, for canned
abalone products, after the steaming and cooking, the abalone flesh is removed from the shell.

Raw seafood used for the processing of canned seafood will after delivery to Haikui’s processing
facilities either directly be processed or undergo quick freezing and warehousing before being
processed. Raw materials for canned seafood products are cut to remove unwanted parts, scaled
or shelled (as appropriate) and thoroughly cleaned. After steaming for 30 to 45 minutes at a
temperature of between 100°C to 105°C, they are left to cool down for between two to four hours
in order to be further processed by hand. At the next stage, they are scaled, cut and filled into
metal cans. Seasoning, liquids or sauces, such as spiced water, vegetable oils, tomato sauce or
other sauces will be added before the metal cans are sealed. After sealing, the canned products
will be heat-sterilized. After a cooling time between 30 to 60 minutes, labels are affixed to the
metal cans. Such labels will either bear the "Haikui" or a third party brand. The finished products
are then sent to Haikui’s warehouse before being dispatched to the customers.

Quality assurance

Haikui places strong emphasis on product quality as it considers the quality and reliability of the
products to be vital to Haikui’s success. Haikui therefore places great emphasis on quality
assurance.

Haikui’s quality control procedures are implemented throughout all stages of production from the
selection of the raw materials, to processing, to packaging, and to delivery. Haikui’s quality control
standards have received certificates of compliance from various international quality control
standards such as HACCP (certified since October 2000), European Union Registered Exporter of
Seafood Products (certified since June 2005) and ISO9001:2000 (2003), ISO 22000:2005 (2010),
and ISO 14001:2004 for quality management. All of these certificates have been maintained and,
to the extent applicable, regularly renewed by Haikui since they were first granted. Haikui believes
that it is one of only few processing companies in China that has met European and US food safety
standards since early on.

The HACCP accreditation requires the implementation of a quality assurance systems
incorporating, inter alia, monitoring, record-keeping, preventive measures, corrective steps and
hygiene and safety standards. The HACCP system is subject to regular inspection to ensure that

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the standards are maintained and the HACCP certificate must be renewed every year upon
successful completion of an annual inspection.

In order to attain the certification registration as a European Union Registered Exporter of Seafood
Products by the Fujian Entry-Exit Inspection and Quarantine Bureau a producer must meet specific
hygiene and safety standards. Compliance with these standards is audited on a random basis, and
all exports of all companies being certified as a European Union Registered Exporter of Seafood
Products are also subject to random inspection prior to export.

The following is a description of Haikui's quality control procedures carried out during the various
stages of production:

•     Incoming quality control: Haikui adheres to quality inspection procedures and internal
      controls to ensure quality of all raw materials and supplies delivered to its cold storage
      facilities and processing lines. All incoming raw materials are subject to laboratory testing
      (random sampling from each batch). If they are not required for immediate processing, raw
      materials will be put in the cold storage facilities, and, when taken out they will be visually
      checked again.

      Haikui's quality control begins with supplier approval and assessment procedures to select
      suitable suppliers of raw materials and to monitor their performance on a continuous basis.
      The suppliers are selected based on quality of the raw materials provided by them, timely
      delivery, customer service and competitive pricing. Suppliers will also be subject to regular
      quality assessment and on-site supervision. In addition, Haikui also conducts training of
      personnel at the aquaculture farms under contract to convey the quality requirements of
      Haikui’s customers as well as update them on potential improvements in respect of
      aquaculture farming.

•     In-progress quality control: Haikui’s staff must complete a training programme before
      working on Haikui’s processing lines. Haikui's quality assurance executive is responsible for
      supervising the processing for quality control purposes and the quality control personnel will
      separately monitor compliance with the internal and international quality control standards
      by carrying out random sampling of the products in every batch produced. This includes, e.g.
      random microbiological testing. Haikui has established in-process quality control at various
      stages of the processing lines to ensure quality and productivity.

•     Final quality control: All products undergo final quality inspections immediately after being
      produced, packaged and labelled to ensure that all processing steps, including the
      packaging, satisfy the internal quality criteria. This includes further random inspections of
      each batch. The finished frozen products are stored in the cold storage facilities while the
      canned seafood products are stored in warehouses at normal temperatures before being
      delivered to customers. The quality control staff monitors and checks that the products are
      properly handled and stored to prevent damage. Finally, checks are also made to ensure
      that the products are not damaged before they leave Haikui's premises.

•     Inspection of machinery: Regular maintenance and repairs of processing machinery and
      equipment are carried out both by Haikui’s maintenance engineers and by the suppliers of
      the various machines used in Haikui's factories. Machine downtime for major maintenance
      activities ranges from one to two days, and is conducted on a quarterly basis. Maintenance is
      typically carried out during low demand periods or at night to avoid any material impact on
      the operations. Haikui has not faced any material stoppages or disruptions in the processing
      as a result of machinery breakdown or malfunction.

There have been no material rejections of any of Haikui’s products by customers or any product
recalls during the periods under review.

Radiation level testing after nuclear incident in Japan



                                                 118
Haikui procures its raw seafood locally from capture fishing vessel operators operating in the East
China Sea, predominantly in the coastal waters around Dongshan Island, and from aquaculture
farms in the vicinity of Dongshan Island. It does not obtain any raw materials from fishing
operations conducted in or near Japan’s waters. After the incidents at the nuclear power plant in
Fukushima in Japan in spring 2011, Haikui conducted radiation level testing of both raw seafood
produce and the sea water around Dongshan as an added precautionary measure. No signs of
radioactive contamination were detected in Haikui's raw material supplies. As part of Haikui's
standard surveillance procedures, Haikui will remain vigilant to events occurring in its external
operating environment and also continue to work closely with the relevant authorities to carry out
continuous testing of products and raw materials.

Research and development

Haikui intends to continuously adapt to customer preferences and market trends to remain
competitive. It places strong emphasis on its product development activities.

Haikui’s product development activities focus on (i) formulating new seasoning and developing
new recipes; (ii) improving the quality of the seafood products, especially retaining the texture and
freshness and preserving the nutritional value of the products as long as possible; and (iii)
improving the cultivating technique and procedures of aquaculture produce by providing advisory
services to the farmers to ensure the quality of the raw materials for the processing.

Haikui develops and markets a number of new products each year. For example, recently it
developed and marketed grilled fish (e.g. codfish, eel, mackerel), filled fish balls, canned abalone
and frozen abalone products.

The product development team interacts regularly with the sales team to evaluate market
developments and consumer preferences and with the processing team to analyse the required
manufacturing process before new products are brought to the marketplace.

In developing a new product, Haikui regularly analyses (i) the general market trends and the
respective consumer segment that it is targeting, including demographics, taste and preferences
and spending power; (ii) the competing products that are currently available to this target
segment; (iii) the internal and external resources available for a new product; (iv) the required
manufacturing procedure for the new product; and (v) whether the proposed product offering
would fit into Haikui’s overall business strategy.

Haikui also entered into consultancy agreements with certain market research and product
development institutions in the PRC, including the Fishery Research Institute of Fujian Province.
The projects range from jointly conducting research in relation to breeding marine animals at
aquaculture farms, cultivating the animals by improved feeding, and improving the nutritional
value of the products.

Sales and distribution, marketing

Overview

Haikui principally sells its products to overseas and domestic distributors, which together
accounted for 99.8%, 99.9% and 99.8% of Haikui’s total revenues in 2009, 2010 and 2011,
respectively.

There are three primary customer categories: (i) overseas distributors; (ii) domestic distributors;
and (iii) direct sales in the PRC market. Below is an illustration of Haikui’s sales to its three
customer categories:




                                                119
Haikui usually does not enter into framework agreements with customers. Sales are usually made
based on orders received from the respective customers or buying agents, which will then be
executed by Haikui by delivering the products to the respective customer.

International sales

International sales are usually made to international distributors of processed seafood, which may
also include food processing companies which purchase primary processed seafood products from
Haikui and sell it after further processing. In 2009, 2010 and 2011, international sales accounted
for 62.2%, 68.4% and 68.1% of Haikui’s total sales, respectively.

Orders for sales to international distributors are usually one-time purchase orders which are, in
particular in case of sales to countries other than Taiwan, typically made by buying agents on
behalf of international distributors. The buying agents receive commission payments from the
international distributors. In a typical transaction, a buying agent contacts a number of seafood
processing companies such as Haikui and places orders for certain products on behalf of the
international distributors based on prices, availability and the quality of products offered. Even
though Haikui delivers its products directly to the international distributors, there is often no
established customer relationship between Haikui and the international distributors and the
international distributors can choose from a range of potential seafood companies to purchase the
products they need. Based on an order received through a buying agent, Haikui will produce and
dispatch the ordered goods to the distributor, which will also be responsible for paying Haikui’s
invoice directly to Haikui.

Sales to international distributors are mostly made FOB (free on board), i.e. Haikui is only
responsible for delivery to the shipping vessel. In rare cases, in particular for some first-time
customers, Haikui also sells its products to international distributors CIF (cost, insurance, freight),
i.e. Haikui pays for all costs for the transportation of the goods up to the named port of
destination, is obligated to insure the goods and is legally responsible for the goods up to the port
of destination. As a result of conducting most of its international sales other than to Asian
countries through buying agents, certain of Haikui’s major customers may fluctuate during the
periods under review (see: "Risk Factors - Risks related to Haikui’s Business - Haikui generates the
majority of its revenues from a limited number of major customers").




                                                 120
Sales on the international markets are almost exclusively made under third party brands, and only
to a small extent under the Haikui brand. End customers for Haikui’s overseas products are usually
restaurants, hotels, supermarkets, and grocery stores.

The main markets for Haikui’s international sales are Asia excluding the PRC (mainly Taiwan,
Malaysia, Hong Kong), the United States and Europe (see: "Management’s Discussion and Analysis
of Financial Condition and Results of Operations - Revenues - Revenues Broken down by
Geographical Region").

Domestic sales

Domestic sales are usually made to Chinese distributors which for the most part re-sell the
products under the Haikui brand, either directly to supermarkets, to other retail chains, or to other
distributors further down the distribution chain. In 2009, 2010 and 2011, domestic sales
accounted for 37.6%, 31.4% and 31.8% of Haikui’s total sales, respectively. Most of Haikui’s
Chinese distributors are based in the Fujian province. However, Haikui intends to broaden its
market presence in China by expanding its distribution network to other provinces, see "Business -
Strategy - Expanding its distribution network and strengthening its market presence in the PRC
and overseas".

End customers for Haikui’s domestic products are usually restaurants, hotels, supermarkets, and
grocery stores. Haikui’s domestic sales are made under the "Haikui" brand or under third party
brands. Supermarkets that offer Haikui branded products include international chains such as
Carrefour and Tesco, as well as Chinese supermarket chains, such as Trust-Mart and NHD-Mart.

Haikui usually uses third party shipping services providers for the distribution of its products to
Chinese customers, and, based on its distribution agreements with such Chinese distributors,
bears the responsibility for shipping its products to the distributor’s warehouse.

Direct sales

Haikui also makes direct sales to corporate entities in the PRC. These corporate customers
typically purchase its products as gifts for customers and employees during festive seasons such
as the Chinese New Year. In 2009, 2010 and 2011, 0.2%, 0.1% and 0.2%, respectively of Haikui’s
sales were made directly to corporate end customers.

Own brand sales/third party brand sales

Haikui sells its products under its own brand as well as under brands of third parties. Own brand
sales are mainly made on the Chinese market, and third party brand sales are mainly overseas
sales. In 2009, 2010 and 2011, 20.1%, 21.3% and 14.9% of Haikui’s sales derived from products
sold under the Haikui brand and in the same periods, 79.9%, 78.7 % and 85.1% were sold under
third party brands, respectively.

Sales and procurement department

Haikui’s sales and marketing activities are managed by the sales and procurement department,
which is supervised by Haikui’s CEO, Mr. Chen Zhenkui. In 2011, Haikui’s sales and procurement
department on average comprised 50 employees.

Haikui’s sales and procurement department plans and formulates its business development
strategies but also maintains close relationships with the customers. It is organised into two teams
covering the international market and the PRC market. Members of the sales and procurement
department obtain regular training on technical knowledge and competency to effectively market
the products to the customers.

Marketing

Generally, Haikui follows three principal marketing strategies:

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•    Participation in industry exhibitions and conferences: Haikui participates in major national
     and international industry exhibitions and conferences such as the European Seafood
     Exposition, International Boston Seafood Show, China Fishery and Seafood Expo Exhibition.
     Apart from expanding its distribution network and securing new orders, these large-scale
     exhibitions and conferences also provide Haikui with opportunities to gain insights into other
     new product offerings, for a better understanding of the market trends and demands, as well
     as to experience firsthand the latest seafood processing equipment and techniques.

•    Direct marketing to existing and potential customers: The sales and procurement
     department also conducts direct marketing to potential and existing customers. The sales
     and procurement department staff regularly visits Haikui’s domestic distributors in order to
     obtain feedback regarding its products and to introduce its new product offerings. Haikui also
     regularly invites existing and potential customers to visit its processing facilities to improve
     the customers’ understanding of the products, to assure customers of Haikui’s quality control
     standards, and to generally foster the business relationships with customers. Customer
     feedback is proactively obtained by Haikui and serves as important source to analyse the
     demand and supply for the products, and adjust the processing and sales strategies
     according to the changing market needs.

•    Joint promotion with domestic distributors: Haikui conducts joint promotional activities with
     its domestic distributors to increase the demand from end consumers in the PRC. This is in
     line with the Haikui’s strategy to strengthen Haikui’s domestic sales under its own brand.
     Such advertising campaigns mainly consist of product advertisements and product displays
     in retail supermarkets in the PRC. Haikui intends to further increase the advertising for its
     own brand on its Chinese market and for this purpose also wants to increase joint
     promotional activities, in particular with retail chains in the PRC.

Customers

Haikui has a diverse customer base. During 2011, Haikui distributed its products to 21 domestic
distributors, and 86 international distributors (including large processing companies). Haikui’s
domestic distributors are mainly based in Fujian Province, in particular in Xiamen. Haikui's
international distributors are mainly based in Europe, the US, Hong Kong, and Taiwan.

Haikui's top three customers in 2009, 2010 and 2011 were:

                             As a percentage of Haikui’s revenues (%)
Name of customer                                 2009               2010                       2011

Customer   1                                       22.6                 23.4                    18.3
Customer   2                                       15.4                 20.7                     9.8
Customer   3                                       11.2                  7.7                     0.2
Customer   4                                          -                 10.7                    13.2
Customer   5                                          -                    -                    11.7



Even though in 2009, 2010 and 2011, Haikui's top three customers accounted for 49.2%, 54.8%
and 43.2% of Haikui's sales, respectively, Haikui does not consider itself dependent on any single
major customer. Haikui's products are not specifically produced for its major customers, which
enables Haikui to offer them to a variety of customers.

Suppliers and procurement

Suppliers

Haikui procures its raw seafood locally from capture fishing vessel operators operating in the East
China Sea, predominantly in the coastal waters around Dongshan Island, and from aquaculture
farms in the vicinity of Dongshan Island. Purchases from the suppliers of raw seafood from
aquaculture farms and capture fishing accounted for approximately 96.74%, 96.92% and 96.87%

                                               122
of Haikui’s total supplies in 2009, 2010 and 2011, respectively. The remaining raw material costs
were mainly attributable to purchases from Chinese suppliers of other raw materials such as
vegetable oil, sugar, salt, bread crumbs and packaging materials.

Haikui procures its supplies from the suppliers directly without involving procurement agents for its
supplies. Suppliers are selected based on their quality, pricing, reliability of supply, delivery lead
time and customer service.

During 2011, Haikui sourced its raw materials from 84 suppliers for raw seafood being aquaculture
farms and operators of fishing vessels. As at 31 December 2011, Haikui entered into framework
agreements for the supply of raw seafood for Haikui’s products with 61 of those suppliers based on
Haikui’s standard form framework supply agreements with terms of one year up to three years.
According to these standard form supply framework agreements, the supplier usually sells its raw
seafood exclusively to Haikui, unless Haikui consents in writing to the sale to a competitor. With
respect to aquaculture farmers, Haikui further provides advisory services and supervises the
processing by sending its supervisory staff to aquaculture farms on a regular basis, approximately
once per month (with respect to Haikui’s framework supply agreements with aquaculture farmers,
see: "Business - Material Agreements - Aquaculture Supply Agreements").

Due to its location at the main fishery port Dongshan Island, the Company believes that Haikui has
a well-diversified supplier base and does not depend on any particular supplier. Haikui did not
have any supplier accounting for more than 10% of Haikui’s purchases in the years 2009 to 2011.
Haikui’s five largest suppliers in 2009, 2010 and 2011, together accounted for 18.89%, 21.64%
and 20.40% of Haikui’s total supplies for the respective periods.

Procurement process for raw materials

Haikui purchases raw seafood from capture fishing suppliers and aquaculture farmers. While
prawns are almost exclusively sourced from aquaculture farms and crabs solely from capture
fishing, other species come from both supply sources.

Haikui bases its procurement of raw seafood on non-binding order forecasts which it receives from
its major customers on an annual basis. Haikui maintains an inventory of frozen seafood taking
into account the expected demand patterns, supply of raw seafood, and lead-time for the delivery
of Haikui’s products to its customers (see: "Business - Suppliers and Procurement - Inventory
Management").

Haikui sets out below an illustration of the general procurement process and key process controls
in relation to procuring raw seafood produce for the processing needs:




                                                123
Inventory management

Raw seafood produce is generally purchased throughout the year to replenish Haikui’s inventories
based on planned processing needs. However, relatively larger quantities are typically purchased
during the period from August to December to take advantage of the relatively lower prices during

                                              124
the high capture fishery season after the capture fishery restrictions in the region have ended.
Raw seafood produce is stored at Haikui’s cold storage facilities. Inventories are in principle
managed on a first-in first-out basis. Haikui usually maintains a level of supply of inventories for
up to four months of expected sales requirements to enable Haikui to sustain long term processing
and to manage long term processing output and product prices. Haikui reviews its inventory
ageing quarterly to determine if it would be appropriate to make specific provision for any
inventory obsolescence. For the periods under review, Haikui has not experienced the need to
make significant specific allowances for inventory obsolescence or inventories written off.

Haikui’s average inventory turnover period for the periods under review was as set out below:

                                                                  2009           2010     2011
Inventory turnover1 period in days                                 63             58       66
1)    Inventory turnover = [(Average year-end inventory/cost of materials)] x 365 days



Intellectual property

Trademarks

Haikui has registered a trademark in China on its brand name "Haikui" and a logo with the
Trademark Office of the State Administration for Industry & Commerce of the PRC. The logo
consists of a graph and the Chinese characters for "Haikui"; the combination of both has been
registered. The term of a registered trademark is ten years from the date of the approval of the
registration and is renewable for another ten years upon application.

The trademark "Haikui" consists of the two syllables "hai" and "kui". The first, "Hai" means
"ocean", and the second "Kui" means "the first one" or "head". Beyond that, "kui" is also part of
the given name of the founder and CEO of the Company, Mr. Chen Zhenkui.

Haikui has registered the following trademarks:

Trademark                               Class1        Territory        Date of original approval/Date of expiry

                                        29            PRC              14 September 1994/13 September 2014




                                        29            PRC              21 January 2011/20 January 2021




(both the figure and word)

                                        30            PRC              28 November 2010/27 November 2020




(both the figure and word)

                                        31            PRC              21 January 2011/20 January 2021




(both the figure and word)

                                        35            PRC              14 January 2011/13 January 2021




(both the figure and word)

(Fengdongshi)                           29            PRC              21 January 1998/20 January 2018


                                                         125
(both figure and word)
Note:

1)      The class 29 of specification of goods and services in the PRC includes in particular crab, frozen prawn, shelled shrimp,
        sliced fish meat, jellyfish, seaweed, mussel, shellfish, oyster, seahorse and sea hedgehog.

        The class 30 of specification of goods and services in the PRC includes in particular coffee, tea, tea drink, candys,
        honey, snacks primarily made of grain, rice cakes, grain and flour products, prawn taste chips, eating gluten, lotus root
        starch, ice cream, condiment, soy sauce, edible baking soda, edible flavouring (exluding spices with ether and
        essential oil), and household tender flesh agents.

        The class 31 of specification of goods and services in the PRC includes in particular unprocessed wood, beans
        (unprocessed), seeds, crustaceans, fresh fruit and vegetables, mushroom breeding bacteria, algae, malt and products
        from animals' rests.

        The class 35 of specification of goods and services in the PRC includes in particular organization of business or
        advertising fairs and exhibitions, import and export agent activities, HR management consulting, business relocation
        services, rental of office equipment and vending machines, and accounting.


On 9 February 2009, the Hunan Zhuzhou Intermediate People’s Court issued a certificate stating
that the trademark with the word "Haikui" granted on 14 September 1994 is recognized as a well-
known trademark in the PRC (for an explanation of the "well-known trademark" concept see:
"Regulatory Environment – Trademarks and patents – Trademark law").

Patents

Haikui is the registered owner of various patents relating to certain production facilities for seafood
products.

Domain names

Next to various internet domains registered for Haikui in Chinese characters, Haikui has registered
the following internet domains:

•       www.haikui-seafood.com

•       www.haikui-seafood.de

•       www.haikui.de

•       www.haikui.com.cn

•       www.chinahaikui.de

Employees

Overview

In the full financial year 2011, Haikui employed a total of 2,194 employees on average, including
605 permanent employees and 1,589 temporary workers. No material change has occurred in the
number of employees in the period up to the date of this Prospectus.

Almost all of Haikui’s employees work at Haikui’s business premises in Dongshan. Haikui's CFO,
Mr. Alan Gey, and a finance manager split their work between Haikui's offices in Dongshan, PRC,
and Singapore.

The table below provides a breakdown of the average numbers of permanent employees and
temporary contract workers for the periods under review:

Category of employees1                                                      2009            2010            2011


Finance, accounts and administration                                           42              53             107

                                                              126
Sales and procurement                                                21            29             50
Research and development                                              7              6            11
Processing and quality assurance                                    296           342           437
Total permanent employees                                          366            430           605
Temporary  contract workers         in   the   processing
department                                                        1,438         1,475         1,589
Total employees and temporary contract workers                   1,804          1,905         2,194
__________
1)    The average number of employees in each year is computed using the employee headcount as at the end of each
      month in the respective period, divided by the number of months in the respective period.



Permanent employees

The majority of Haikui’s permanent workforce consists of employees working in Haikui’s processing
department, and at the delivery stages for raw and finished materials. Within the processing
department, permanent employees are predominantly responsible for quality assurance and
supervision of temporary workers who work on the processing lines. Haikui’s permanent workforce
has increased during the periods under review due to the continuous increase in Haikui’s
processing activities.

Temporary contract workers

Haikui hires temporary contract workers in its processing department throughout the year, in
particular during peak processing periods to prevent bottle-necks. Temporary contract workers are
predominantly employed at Haikui’s seafood processing lines. Most temporary contract workers are
employed during August and September of each year because this is the period after the end of
fishing restrictions in the Fujian fishing regions, which commences on 1 May and ends on 1 August
in each year. Hiring a relatively large number of temporary contract workers in its seafood
processing lines allows Haikui to adjust its workforce to the seasonality of the food processing
business, the processing output of which varies notably within the quarters of each financial year,
the third quarter usually being the quarter with strongest output, and the second quarter, which is
the time of fishing restrictions in the seas in the Fujian province, with lowest output. Temporary
contract workers are contracted by Haikui based on an agreement that it has entered into with a
labour agency (see: "Business - Material Agreements - Employee Secondment Agreements").

Working hours and salaries

Haikui’s processing lines are usually utilized on seven days per week. This also applies during the
periods of fishing restrictions between 1 May and 1 August of each year when raw materials from
Haikui’s warehouses and from aquaculture farms, which are not affected by fishing restrictions, will
be used for processing. However, during this period there is usually only one daily shift in Haikui’s
processing lines, whereas in other periods Haikui’s processing lines are utilized in two daily shifts.
Employees and temporary contract workers usually work 6 days per week.

Haikui pays wages at market rate. Haikui’s employees in the processing department receive a base
salary ranging from RMB 1300 to RMB 1500 per month plus overtime pay according to statutory
rules. Temporary contract workers are remunerated in relation to their processing output, with no
base salary. The average salary earned by temporary contract workers is between RMB 1300 and
RMB 1600 per month, and is purely based on the performance, i.e. the processing output, of the
respective contract worker.

Trade unions

Haikui's employees are unionised in the Trade Union of Fujian Haikui. There have not been any
incidents of work stoppages or labour disputes which have affected Haikui’s operations.




                                                      127
Processing facilities

Haikui's two current processing facilities are located in Dongshan Island, Fujian Province, PRC with
an aggregate land area of approximately 65,020 square metres ("sqm") and an aggregate
processing capacity of 28,543 tonnes per year.

Haikui operates the follwing production lines:

•     Basic processing line (cleaning, cutting and/or scaling);

•     Crab processing line;

•     Prawn processing line;

•     Shellfish processing line;

•     Fish processing lines (including sliced fish and fish paste);

•     Additional processing lines (such as seasoning and/or cooking or grilling); and

•     Canned food processing lines.

As at 31 December 2011, Haikui's cold storage capacities for raw seafood and finished seafood
products were approximately 15,000 tonnes.

In December 2010, Haikui acquired the assets of a seafood processing factory in proximity to its
existing processing facility and thereby increased its processing capacity from 23,203 tonnes by
5,340 tonnes to 28,543 tonnes. Haikui intends to significantly further expand its processing and
cold storage capacities (see: "Business -Strategy - Expansion of processing capacity ").

Haikui has four main types of quick freezing facilities for frozen seafood and one type of canning
facility as set out in the table below, which illustrates the maximum production capacity for each
type of the facilities in 2009, 2010 and 2011:

                                                                             Estimated annual maximum
                                                                                     processing
                                                                                  capacity (tonnes)1
Type of facility                              Products                          2009       2010      2011

Frozen seafood
Quick freezing rooms2                         Fish, prawn                      13,200     13,200      13,200
Quick freezing plate machinery 3, 4           Fish, others                      1,440      1,440       1,440
Crab quick freezing plate machinery           Crab                              1,008      1,008       1,008
Quick freezing roller machinery3, 4           Prawn, shellfish                  2,520      2,520       2,520
Crab quick freezing plate machinery4, 5       Crab                                  -        195       2,340
Quick freezing roller machinery4, 5           Fish                                  -        250       3,000
Sub-total                                                                     18,168     18,613      23,508
Canned seafood
Canning machinery                             All types of canned products     5,035      5,035       5,035
Total                                                                         23,203     23,648      28,543

The estimated average utilization rate for each type of the facilities in 2009, 2010 and 2011 is
shown in the following table:

                                                                      Estimated average utilisation rate (%)
Type of facility                          Products                           2009         2010          2011

Quick freezing rooms and machinery All types of frozen products              82.47       91.08        68.26
Canning machinery                  All types of canned products              50.10       66.76        88.10
Total                                                                        75.45       85.90        71.76
__________
Notes:

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1)    The annual processing capacity of the processing facilities is measured in terms of the number of unit products that can
      be processed by the respective facility in one year based on 300 operational days.

2)    The annual maximum processing capacity for the quick freezing rooms of 13,200 tonnes, 13,200 tonnes and 13,200
      tonnes in respect of 2009, 2010 and 2011, respectively, relate entirely to the processing of fish products. Due to the
      different product specifications between fish and prawn products, prawn products of the same tonnage require more
      space in the quick freezing rooms as compared to fish products of the same tonnage. Accordingly, in the event that the
      quick freezing rooms are entirely used for prawn products, the annual maximum processing capacities for the quick
      freezing rooms will be 11,550 tonnes, 11,550 tonnes and 11,550 tonnes for 2009, 2010 and 2011, respectively.

3)    The processing capacity of the quick freezing plate machinery is the same whether it is used for fish or other products
      (such as cephalopod). Likewise, the processing capacity of the quick freezing roller machinery is the same whether it is
      used for prawn or shellfish products.

4)    Based on weighted average utilisation rates.

5)    Pro-rated for one month in 2010 as Haikui only acquired the fixed assets in December 2010.


The aggregate net book value of Haikui’s plant and machineries as at 31 December 2011
amounted to approximately EUR 3,938 thousand.

Property, plant and equipment

Land use rights

Haikui has the following "Land Use Rights" which cover land plots with a total area of 65,023 sqm.
All numbers below are subject to rounding adjustments.

•     Land Use Right Certificate DongQuGuoYong (2003) Zi No. 037 issued on 9 July 2003 expiring
      8 July, 2053, located at Donghuan Road (east side), Dongshan Island with an area of 18,066
      sqm.

•     Land Use Right Certificate DongQuGuoYong (2003) Zi No. 038 issued on 9 July 2003 expiring
      July 8, 2053, located at Donghuan Road (east side), Dongshan Island with an area of 20,072
      sqm.

•     Land Use Right Certificate DongGuoYong (2010) No. 3258 issued on 19 November 2010
      expiring 18 April 2051, located at No. 6 Chuangye Road (Development Zone) with an area of
      17,399 sqm.

•     Land Use Right Certificate DongGuoYong (2010) No. 3259 issued on 19 November 2010
      expiring 18 April 2051, located at No. 6 Chuangye Road (Development Zone) with an area of
      5,617 sqm.

•     Land Use Right Certificate DongGuoYong (2010) No. 3260 issued on 19 November 2010
      expiring 21 April 2051, located at No. 6 Chuangye Road (Development Zone) with an area of
      3,869 sqm.

All land use rights are used for Haikui’s operating and processing facilities in Dongshan. The land
plot under the Land Use Right Certificate DongQuGuoYong (2003) Zi No. 037 is mortgaged to the
Financial Bureau of Dongshan County.

The land use right certificates with numbers 3258, 3259, and 3260 were purchased under Real
Estate Purchase Agreements dated 26 September 2010 relating to the acquisition of a factory with
processing lines for grilled seafood (see: "Business - Material Agreements - Agreements relating to
the purchase of a factory for grilled seafood"). The provisions in the Real Estate Transfer
Agreements stipulating the sizes of the transferred land use rights deviate from the sizes stated in
the respective land use certificates as the agreements are based on estimates made by the
parties, whereas the land use right certificates are issued only after a new measurement of the
land plots by the competent Chinese authorities.



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Buildings

Haikui owns buildings covering a total construction area of 31,770.9 sqm. The buildings are used
for Haikui's processing facilities and other operating facilities as well as for storage space and
office space.

The buildings are owned based on the Real Estate Ownership Certificates listed below:

•    Real Estate Ownership Certificate DongFangQuanZhengZi 019529 issued by the Dongshan
     County Building Administration on 23 June 2003. The certificate covers an office building
     with a construction area of 939.96 sqm located on the land plot covered by the Land Use
     Right Certificate DongQuGuoYong (2003) Zi No. 038.

•    Real Estate Ownership Certificate DongFangQuanZhengZi 019530 issued by the Dongshan
     County Building Administration on 23 June 2003. The certificate covers a workshop building
     with a construction area of 3,635.4 sqm located on the land plot covered by the Land Use
     Right Certificate DongQuGuoYong (2003) Zi No. 038.

•    Real Estate Ownership Certificate DongFangQuanZhengZi 019531 issued by the Dongshan
     County Building Administration on 23 June 2003. The certificate covers a freezing house with
     a construction area of 1,206.44 sqm located on the land plot covered by the Land Use Right
     Certificate DongQuGuoYong (2003) Zi No. 038.

•    Real Estate Ownership Certificate DongFangQuanZhengZi 022134 issued by the Dongshan
     County Building Administration on 10 October 2005. The certificate covers a warehouse with
     a construction area of 450.92 sqm located on the land plot covered by the Land Use Right
     Certificate DongQuGuoYong (2003) Zi No. 037.

•    Real Estate Ownership Certificate DongFangQuanZhengZi 022135 issued by the Dongshan
     County Building Administration on 10 October 2005. The certificate covers a workshop
     building with a construction area of 869.23 sqm located on the land plot covered by the Land
     Use Right Certificate DongQuGuoYong (2003) Zi No. 037.

•    Real Estate Ownership Certificate DongFangQuanZhengZi 022136 issued by the Dongshan
     County Building Administration on 10 October 2005. The certificate covers a dormitory
     building with a construction area of 386.18 sqm located on the land plot covered by the Land
     Use Right Certificate DongQuGuoYong (2003) Zi No. 037.

•    Real Estate Ownership Certificate DongFangQuanZhengZi 028055 issued by the Dongshan
     County Building Administration Bureau on 10 February 2009. The certificate covers a
     workshop building with a construction area of 7309.31 sqm located on the land plot covered
     by the Land Use Right Certificate DongQuGuoYong (2003) Zi No. 037.

•    Real Estate Ownership Certificate DongFangQuanZhengDongZi 031167 issued by the
     Dongshan County Building Administration Bureau on 22 December 2010. The certificate
     covers a workshop with a construction area of 1665.9 sqm located on the land plot covered
     by the Land Use Right Certificate DongGuoYong (2010) No. 3260.

•    Real Estate Ownership Certificate DongFangQuanZhengDongZi 031166 issued by the
     Dongshan County Building Administration Bureau on 22 December 2010. The certificate
     covers a workshop with a construction area of 5766.23 sqm located on the land plot covered
     by the Land Use Right Certificate DongGuoYong (2010) No. 3260.

•    Real Estate Ownership Certificate DongFangQuanZhengDongZi 031168 issued by the
     Dongshan County Building Administration Bureau on 22 December 2010. The certificate
     covers a workshop with a construction area of 6209.33 sqm located on the land plot covered
     by the Land Use Right Certificate DongGuoYong (2010) No. 3258.



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•     Real Estate Ownership Certificate DongFangQuanZhengDongZi 031169 issued by the
      Dongshan County Building Administration Bureau on 22 December 2010. The certificate
      covers a workshop with a construction area of 707.94 sqm located on the land plot covered
      by the Land Use Right Certificate DongGuoYong (2010) No. 3258.

•     Real Estate Ownership Certificate DongFangQuanZhengDongZi 031170 issued by the
      Dongshan County Building Administration Bureau on 22 December 2010. The certificate
      covers a workshop with a construction area of 1108.13 sqm located on the land plot covered
      by the Land Use Right Certificate DongQuGuoYong (2010) No. 3258.

•     Real Estate Ownership Certificate DongFangQuanZhengDongZi 031171 issued by the
      Dongshan County Building Administration Bureau on 22 December 2010. The certificate
      covers a workshop with a construction area of 1515.93 sqm located on the land plot covered
      by the Land Use Right Certificate DongGuoYong (2010) No. 3258.

The buildings stated in the Real Estate Ownership Certificates numbered 022134, 022135, 022136,
028055 have been mortgaged to the Financial Bureau of Dongshan County for the purpose of
securing two World Bank loans (see: "Business – Material Agreements – World Bank loan
agreements").

Equipment

Haikui owns various fixed assets such as processing equipment, office equipment, buildings and
vehicles. Processing equipment includes cold storage facilities, cleaning belts, steaming machines,
grill and seasoning rolls, sterilization machinery, sealing lines and quick freezing plates.

As at 31 December 2011, the net carrying value of these fixed assets and equipments amounted
to EUR 14,371 thousand. No fixed assets or equipment items have been leased to other parties or
rented from other parties.

Insurance

Haikui has insurance policies which cover the following risks:

•     Property insurance for the machinery, fixed assets and the inventory;

•     Motor vehicle insurance and motor vehicle liability insurance for the motor vehicles;

•     Social insurance coverage for the employees which includes basic pension insurance,
      unemployment insurance, medical care insurance and industrial accident insurance;

•     A directors' and officers liability insurance ("D&O insurance"). For the Management Board
      members, the D&O insurance contains deductibles (Selbstbehalte) as required by Section 93
      para. 2 sentence 3 of the German Stock Corporation Act. For the Supervisory Board
      members, the D&O insurance contains no deductibles.

The Company believes that it is not an industry practice in the PRC to procure business
interruption insurance, insurance for business liability and insurance for product liability.
Accordingly, Haikui does not presently have insurance coverage for business interruption and
product liability (see: "Risk Factors - Risks related to Haikui’s Business - Haikui does not have
insurance coverage customary in more economically developed countries for a business of Haikui’s
size"). The Company believes that the current insurance policies are in line with the general
practice in the seafood processing industry in the PRC.

Investments

During the periods under review, Haikui has made the following major investments:

·       2009: None.

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·       2010: On 26 September 2010, Haikui concluded various purchase agreements, including
        Machine and Equipment Transfer Agreements, as well as Real Estate Purchase
        Agreements relating to the acquisition of a factory with processing lines for grilled seafood
        products. The amount of investment (consideration paid) was EUR 10,306 thousand (see:
        "Business - Material Agreements - Agreements relating to the Purchase of a factory for
        grilled seafood").

·       2011: None.

Haikui has one investment project in progress relating to the upgrading and installation of quick
freezing facilities at its headquarter processing facilities in Dongshan. The total investment amount
for the project is approximately EUR 2,519 thousand (RMB 22,000 thousand). Haikui is using cash
generated from its operations to finance the project. The project is expected to be completed at
the end of the second quarter of 2012.

Haikui has not made any firm commitments to make material future investments.

Material agreements

Haikui has in the last two years prior to the date of this Prospectus entered into the following
agreements that are material to its business:

Agreements relating to the purchase of a factory for grilled seafood

On 26 September 2010, Haikui concluded various purchase agreements relating to the acquisition
of a factory with processing lines for grilled seafood products (together the "Asset Purchase
Agreements"). The Asset Purchase Agreements include the following agreements:

•     a Machine and Equipment Transfer Agreement between Haikui and Dongshan Huanong Food
      Co., Ltd., relating to the acquisition of machines, electric equipment, and vehicles by Haikui.
      The total purchase price was EUR 1,181,848 (RMB 9,743,185).

•     a Real Estate Purchase Agreement between Haikui and Dongshan Huanong Food Co., Ltd.,
      relating to the acquisition of inter alia, a land use right over 17,567 sqm of land, freezing
      warehousing facilities, workshops and office buildings, by Haikui. The total purchase price
      was EUR 4,252,028 (RMB 35,053,815).

•     a Machine and Equipment Transfer Agreement between Haikui and Fujian Huanong Equity
      Limited, relating to the acquisition of machines, electric equipment, and vehicles by Haikui.
      The total purchase price was EUR 760,364 (RMB 6,268,455).

•     a Real Estate Purchase Agreement between Haikui and Fujian Huanong Equity Limited,
      relating to the acquisition of inter alia, a land use right over 5,449 sqm of land, workshops
      and factory buildings by Haikui. The total purchase price was EUR 4,300,807
      (RMB 35,455,951).

•     a Real Estate Purchase Agreement between Haikui and Fujian Huanong Equity Limited
      relating to the acquisition of a land use right over 3,869 sqm of land and a sewage disposal
      system by Haikui. The total purchase price was EUR 421,998 (RMB 3,478,595).

As of the date of this Prospectus, all acquired assets have been transferred to Haikui and Haikui
has paid the purchase prices under the agreements. Haikui used funds resulting from its
operations for the payment of the purchase price.

World Bank loan agreements

Haikui has entered into two loan agreements with Dongshan Financial Bureau. Dongshan Financial
Bureau is responsible in Dongshan County for disbursing loans granted to companies in the PRC


                                                132
under the Coast Resource Sustainable Development Projects programme of the International Bank
for Reconstruction and Development, a sub-division of the World Bank.

One of the loan agreements is dated 14 July 1999 and relates to a credit facility of up to approx.
USD 1,703 thousand (EUR 1,316 thousand) granted by the Dongshan Financial Bureau to Haikui
with a term from 31 July 1998 until 30 July 2018. As at 31 December 2011, the amount
outstanding under the loan agreement was approx. USD 837 thousand (EUR 647 thousand).

The second loan agreement relates to a credit facility of up to USD 3,750 thousand (EUR 2,896
thousand) granted by the Dongshan Financial Bureau to Haikui with a term from 31 July 1998 until
30 July 2018. As at 31 December 2011, the amount outstanding under the loan agreement was
approx. USD 2,523 thousand (EUR 1,948 thousand).

Employee secondment agreements

Haikui procures its temporary contract workers based on an employee secondment agreement
with Dongshan County Labour Secondment Co., Ltd. ("Labour Agency"), which has most
recently been renewed on 1 January 2012 (the "Employee Secondment Agreement"). Based
on the Employee Secondment Agreement, the Labour Agency seconds temporary workers to work
in Haikui’s processing lines.

According to the Employee Secondment Agreement, the Labour Agency concludes employment
contracts with workers and seconds them to work for Haikui according to Haikui’s actual needs.
Under the Employee Secondment Agreement, the Labour Agency is obliged to ensure that Haikui’s
monthly demand of approximately 500 to 2500 temporary workers depending upon seasonality is
met. There is no direct contractual relationship between Haikui and the seconded workers.
According to the Employment Secondment Agreement, Haikui pays the salary directly to the
seconded employees. In addition, the Labour Agency pays social insurance premiums and is
responsible for handling the formalities for contribution of such social insurance premiums.

The aggregate amount payable per year by Haikui to the Labour Agency for the provision of its
services is RMB 60 thousand (EUR 7,278). The current Employment Secondment Agreement has a
term of one year from 1 January 2012 until 31 December 2012.

Aquaculture supply agreements

The contractual relationships between Haikui and most of its suppliers for aquaculture seafood
products are based on Haikui’s standard framework supply and cooperation agreements (the
"Aquaculture Supply Agreements"). The Aquaculture Supply Agreements usually have a term
of one year up to three years, usually starting on 1 January and ending on 31 December of a
respective year, and need to be renewed after the expiration of their respective term.

The Aquaculture Supply Agreements have the following main terms: The suppliers are obliged to
provide Haikui with sufficient supplies of raw seafood from aquaculture resources from their
respective aquaculture farms. Haiku has a right of first refusal relating to all seafood products from
the aquaculture suppliers, which are not allowed to provide any of their aquaculture products to
third parties without a written approval of Haikui. The purchase price is stipulated at all times to be
lower than the prevailing market price for the same sort of aquaculture seafood.

The Aquaculture Supply Agreements stipulate that the whole aquaculture procedure will be
monitored by a supervisor of Haikui. The supervisor has the right to inspect the aquaculture farms
of the suppliers at any time and the suppliers are obliged to follow the instructions of the
supervisor. The supervisor appointed by Haikui has the right to instruct the suppliers with respect
to all relevant aspects of the breeding and feeding of the aquaculture products, including
instructions on the use of medicine. Haikui is also responsible for the laboratory testing of the
products from the aquaculture base. The necessary equipments for the test and processing
monitoring will be provided by Haikui.



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At the beginning of each year, under the Aquaculture Supply Agreements, Haikui makes
prepayments to its suppliers the amount of which depends on the value of the previous year’s
supplies from the respective supplier. Total advances extended to suppliers under the framework
agreements accounted for approximately 10% of total purchases in the previous year. The
advance payments made under the agreements will be deducted from the order payments to be
made by Haikui during the term of the agreement.

Certifications and accreditations

In addition to Haikui’s general business licenses, tax and social insurance certificates and other
certifications and accreditations necessary to pursue its business in China, Haikui received the
following certifications and accreditations which are considered material by Haikui:

    Type of license or certificate           Name of issuing          Date of first          Expiry date
                                              organisation               grant

HACCP verification certificate               HACCP                  October 2000      2 November 2012

ISO 9001:2000 certification in respect       ISO                    July 2003         4 May 2014
of the processing of sea caught fishery
and crab meat and services provided
thereto

European Union Registered Exporter of        Fujian Entry-Exit      June 2005         no automatic expiry date
Seafood Products                             Inspection   and                         but   random  compliance
                                             Quarantine                               checks
                                             Bureau
ISO    22000:2005     certification  in      KCB Certification      8 October 2010    7 October 2013
respect of the the place and                 Ltd.
management activities related to the
production and service of frozen
aquatic products, canned aquatic
products and salted aquatic products

ISO            14001:2004             (No.   KCB    Certification   21 October 2010   20 October 2013
06910E10337R0M)         certification   in   Ltd.
respect of the place and management
activities related to the production and
service of frozen aquatic products,
canned aquatic products and salted
aquatic products

Organic    Product   Certificate for         Zejiang Gainshine      12 May 2011       11 May 2012
Processing, Labeling and Marketing,          Assessment Co.,                          (renewal only possible after
Management System                            Ltd.                                     expiry date)

Halal Certificate (No.: C2011-216)           Shandong Islamic       27 October 2011   26 October 2012
                                             Association
Certificate (No. 542) of compliance          CSI SpA                16 January 2012   15 January 2013
with the International Food Standard
(IFS)    Version  5,   August   2007,
Foundation Level for the production of
frozen tilapia products and canned
tuna     and   mackerel   in  tinplate
(excluding production of cooked or
frozen squid, shrimp, crab products,
frozen cooked crab meats)

Certificate   of  Registration (No.:         Moody                  1 February 2012   26 January 2013
051A1112002) regarding compliance            International
with the Global Standard for Food            Certification Ltd.
Safety for the production of frozen
tilapia fillets in both bulk and
consumer pack forms from live tilapia

                                                          134
and canned tuna and mackerel in tin



All of the certifications and accreditations mentioned above have been maintained by Haikui since
the date of their first grant and, to the extent applicable, Haikui has passed all relevant regular or
random checks and compliance tests carried out by national or international authorities or
accreditation bodies.

Awards

Haikui has received various business awards from PRC institutions, including the following:

Award                                   Awarding Body                                     Awarded in

Fujian Dragon Head Enterprise in        Fujian Provincial Ocean & Fishery Bureau and      September 2007 (first
industrialisation  of   seafood         Fujian Provincial Department of Finance           obtained in September
processing operations (2007 -           In recognition of enterprises which are           2005)
2008)                                   involved in agricultural operations and have
                                        contributed significantly to the economic
                                        development of the relevant city or province.

Grade1      Standards      Achieved     Fujian Provincial Research & Development          June 2006
Enterprise in Fujian Province           and Appraisal Centre, Fujian Provincial
                                        Geography Centre, and Fujian Provincial
                                        Enterprise       Appraisal        Association
                                        In recognition of the expertise and high
                                        standards in production operation

Role    model      enterprise    for    Ministry   of   Agriculture  of   the    PRC      December 2006
processing agricultural product and     Recognition as exemplary enterprise in
export business in the PRC              seafood processing and export operations

Most Trusted Brand for Mother and       National Maternal and Child Health Safe           January 2008
Child                                   Consumption Project Organising Committee

Best Green Product for Mother and       National Maternal and Child Health Safe           January 2008
Child                                   Consumption Project Organising Committee

Fujian Agriculture Enterprise Gold      The People’s Government of Fujian Province        November 2008
Medal

Top 10 Fishery Enterprise in the        China   Aquatic   Production Chamber  of          December 2008
PRC                                     Commerce
                                        Recognition of high standing in the PRC
                                        seafood production industry

National   Quality   &    Trustworthy   China Light    Products   Quality    Assurance    December 2009
Product                                 Centre

China Famous Brand                      Hunan Zhuzhou Intermediate People’s Court         2009

China      Agriculture       Products   PRC Ministry of Agriculture                       December 2010
Processing    Industry:      Business
Model Company

Fujian Dragon Head Enterprise –         The People's Government of Fujian Province        14 November 2011
Agriculture Industry

Trustworthy Chinese Enterprise –        PRC Association    of   Economic    and   Trade   January 2012
Role Model Company                      Promotion




                                                       135
Legal proceedings

During a period covering twelve months prior to the date of this Prospectus, there have not been
any governmental, legal or arbitration proceedings which may have, or have had in the recent
past, significant effects on the Company and/or Haikui Group's financial position or profitability. No
such proceedings are pending, and no such proceedings have been threatened.




                                                136
                                  REGULATORY ENVIRONMENT

Fishing regulations in the PRC

The PRC Fisheries Law (the "Fisheries Law") pursues the aim of enhancing the protection,
increase, development and reasonable utilisation of fishery resources and developing artificial
cultivation. The Fisheries Law is applicable to all forms of fisheries, such as aquaculture, wild
catching or harvesting of aquatic animals and plants in the inland waters, tidal flats and territorial
waters of the PRC, or in other sea areas under the jurisdiction of the PRC. The Fishery Bureau
under the Ministry of Agriculture and its local counterparts shall be in charge of the administration
of fisheries.

For inland seas, territorial seas, exclusive economic zones and other jurisdictional seas of the PRC,
the PRC State Council determines the fishing quotas. Fishing quotas for state-level important
rivers and pools shall be determined by relevant provincial, autonomous regional, municipal
people’s governments or determined through consultation.

The Fishery Bureau under the Ministry of Agriculture may implement areas in which fishing is
totally prohibited, or prohibited during particular periods of the year. According to the
Announcement on Readjusting the Summer Moratorium System for Marine Fishing promulgated by
the Ministry of Agriculture on 27 February 2009, from the year of 2009 onwards, the respective
periods in which fishing is generally prohibited are as follows:

1.    sea north of north latitude 35 degree: 1 June to 1 September;

2.    sea south of north latitude 35 degree but north of north latitude 26.30 degree: 1 June to
      16 September;

3.    sea south of north latitude 26.30 degree but north of Fujian-Guangdong meeting-line:
      16 May to 1 August;

4.    sea south of Fujian-Guangdong meeting-line but north of north latitude 12 degree: 16 May
      to 12 August.

In addition, in the sea south of north latitude 35 degree but north of Fujian-Guangdong meeting-
line, two specific prohibition periods for (i) light-purse seining and (ii) beam trawl fishing and
fishing using baskets and pots, which are 1 May to 1 July and 1 June to 1 August, respectively,
have been provided under the above circular. Single drift gill netting and fishing with fishing
tackles are exempted from the prohibition.

Furthermore, the Circulation on Bringing Drift Net Fishing in Bo Sea, Yellow Sea and East Sea
Regions into Administration of Fishing Moratorium issued by the Ministry of Agriculture on
31 March 2011 provides for a specific period in which drift netting is prohibited and which shall
become effective from the year 2011. The drift netting is prohibited in the sea south of north
latitude 35 degree but north of north latitude 26.30 degree from 1 June to 16 September, and in
the sea south of north latitude 26.30 degree but north of Fujian-Guangdong meeting-line from
16 May to 1 August.

The sea near Dongshan County, Fujian Province is the part of the sea south of north latitude 26.30
degree but north of Fujian-Guangdong meeting-line. Therefore, in Dongshan, the prohibited period
for light-purse seining is 1 May to 1 July each year, for beam trawl fishing and fishing using
baskets and pots is 1 June to 1 August each year, for drift netting it is 16 May to 1 August and the
prohibited period for general fishing (except for fishing with fishing tackles) is 16 May to 1 August
of each year.

The PRC has implemented a system of fishing licenses to be issued by the Fishery Bureau.
Licensees must operate in accordance with the provisions in the fishing license on type of
operation, location, time limit, quantity of fishing facilities and fishing quota, and abide by relevant
regulations on the protection of fishery resources.
                                                 137
Quality and safety of food products

The Product Quality Law of the PRC (the "Product Quality Law"), which was promulgated on
22 February 1993 and amended on 8 July 2000, is applicable to all activities of production and sale
of any product within the territory of the PRC, and the producers and sellers shall be liable for
product quality in accordance with the Product Quality Law.

The PRC Food Safety Law, which was promulgated on 28 February 2009 and became effective on
1 June 2009 and its implementing regulations, which were promulgated and became effective on
20 July 2009 set out various aspects of safety standards of food and food addictive production
operation, food packaging and containers and the prescribed contents of food packaging labels, as
well as the safety requirements concerning premises, facilities and equipment for food production,
transportation and trading. For food processing in the PRC, a company shall obtain a food
production permit. In case of violation of the PRC Food Safety Law and its implementing
regulations, the concerned company may be subject to being warned, being ordered to rectify or
to stop production operation, confiscation of its illegal gain, fine, or being required to make
immediate announcement on recall of sold products. The food production permit may also be
forfeited, or the concerned company or its responsible person(s) may be held criminally liable
where it causes serious harms to body health.

According to the Regulations on Administration of Production Permit for Industrial Products that
were issued by the State Council on 9 July 2005 and became effective on 1 September 2005, for
production of certain products including, among others, processed foodstuffs that have a direct
connection with human health, a company shall obtain a production permit for industrial products
in advance.

On 1 September 2005, the General Administration of Quality Supervision, Inspection and
Quarantine ("AQSIQ") promulgated the Implementing Rules of Supervision and Administration of
Quality Safety of Food Manufacturing and Processing Enterprises (Trial), pursuant to which the
state implements the market admission system on food quality safety. The enterprises engaging in
production and processing of food shall satisfy the requisite production conditions that guarantee
the food quality safety and obtain the food production permit. The manufactured and processed
food products can only be sold when they have passed inspection and been affixed with the stamp
of food quality safety market admission symbols.

Particularly concerning the agricultural products, the PRC Law on Quality Safety of Agricultural
Products, which was promulgated on 29 April 2006 and became effective on 1 November 2006,
provides that the State establishes a mandatory quality safety standard for agricultural products
which refers to primary products sourced from agriculture, i.e. plants, animals, microbes and their
by-products from agricultural activities. The competent authorities for supervision and
administration of the quality safety of agricultural products are the agricultural bureaus at the
county level and above. The agricultural products can only be sold after they have been packed or
attached with labels in accordance with laws and regulations. The relevant packages or marks shall
indicate product name, place of origin, producer, date of production, quality warranty period,
product quality grade, name of the additive (if any). The materials used in package, preservation,
storage and transportation of agricultural products, such as preservatives, antiseptics and
addictives, etc. shall meet the relevant compulsory technical norms of the State.

With the aim of strengthening the supervision over food safety, preventing and reducing the
hazards of unsafe food, and protecting the health and safety of consumers, the AQSIQ issued the
Provisions on Administration of Food Recall on 27 August 2007, which apply to the recall of food
produced or sold within the territory of the PRC. The food for recall refers to the food against which
there is evidence proving that it has caused or may cause harm to human health, and includes (a)
the food that has led to food contamination or food-borne diseases, or caused harm to human
health, or even caused death; (b) the food that may generate food contamination or food-borne
diseases, or cause harm to human health; (c) the food containing the ingredients that may cause
harm to the health of specific groups of people but such ingredients and their harms have not been


                                                138
indicated completely and clearly on food labels and its written instructions; and (d) other unsafe
food as prescribed in any relevant law or regulation.

Food hygiene requirements and standards

On 30 October 1995, the Standing Committee of the National People’s Congress of the PRC issued
the Food Hygiene Law of the PRC (the "Food Hygiene Law"), pursuant to which all institutions
and individuals in the PRC engaged in food production and trade should comply with the Food
Hygiene Law, which stipulates the hygienic requirements and standards for food, the additives,
containers, wrappers of food as well as the sites, facilities and environmental conditions for food
production and trade. The Ministry of Health ("MOH") is responsible for the overall supervision
and control of public hygiene in China. Local bureaus of health in the PRC are responsible for
implementation of the MOH’s instructions, including but not limited to, examination of entities
engaged in food production and trade and issue of the relevant licences and certificates. All entities
should conduct food production and trade in the PRC in compliance with the hygienic requirements
and standards stipulated under the Food Hygiene Law. The sale and production of food which fail
to reach such hygienic standards and requirements will be prohibited in the PRC. All food
producers in the PRC are required to obtain a hygiene licence or a National Licence for
Manufacturing Industrial Products from the competent authority before they register with the
relevant administrative authorities for industry and commerce.

Export of food products

The Administrative Measures on Hygiene of Exported Food (Trial), which was issued on 20 October
1984 and came into effect on 1 January 1985, provide that the food production enterprises
engaging in export food shall register with the provincial level entry-exit inspection and quarantine
authority. Food can only be exported if it has passed the export inspection.

On 26 July 2007, the State Council promulgated the Special Regulations on Strengthening the
Supervision and Administration of Safety of Food and other Products, pursuant to which the
producers and the distributors of the food products must ensure that the exported food products
shall meet the standard of the importing countries (regions) or the contractual requirements.

Pursuant to the Provisions on Filing Administration of Export Food Production Enterprises issued by
the AQSIQ on 21 June 2011 and becoming effective on 1 October 2011, export food production
enterprises shall establish and implement the control system for food safety and hygiene focusing
on harmfulness analysis, prevention and control measures. Products made by the enterprises
which have not made compulsory registrations or are found unqualified during registration are not
allowed to be exported. An enterprise shall establish a record archive for the operation of the
control system for food safety and hygiene and for export food production, which shall be
preserved for not less than two years.

Regulatory requirements pertaining to the expansion of production capacity

Pursuant to the Tentative Measures for the Administration of the Verification of Foreign Invested
Projects (the "Verification Measures") issued by the National Development and Reform
Commission (the "NDRC") on 9 October 2004, foreign investment projects for the expansion of
production capacity are subject to an assessment and verification by the SDRC or, as the case may
be, its local counterparts. If the expansion of production capacity results in the increase of
registered capital and the so called "total amount of investment" by the applicant, such capital
increase is subject to the additional approval by the competent authority, that means the Ministry
of Commerce ("MOFCOM") or its local counterpart, and to the registration with the competent
Administration of Industry and Commerce under the relevant laws or regulations governing foreign
invested enterprises.

The expansion of production capacity also requires approval by the Ministry of Environmental
Protection (the "MEP") or its local counterpart under the Regulations on Administration of
Environmental Protection of Construction Projects. On the basis of an environmental impact study,

                                                139
MEP or its local counterpart shall assess the environmental impacts of the project and, based on
the results of this assessment, decide on its approval. The parts of the facility that serve the
purpose of environmental protection shall be designed, established and commissioned
simultaneously with the remaining part of the expansion project. The production can only
commence upon final inspection and acceptance of the environmental protection facilities by MEP
or its local counterpart.

In case the expansion of production capacity requires the acquisition of additional land and the
construction of new plants, such acquisition and construction has to be approved, in particular, by
the Chinese land authorities, planning authorities, construction authorities and real estate
authorities.

Regulatory requirements pertaining to the discharge of waste

In relation to the treatment of air pollutants and waste effluents created during the production
process, Haikui has to comply with the Environmental Protection Law of the PRC, the regulations of
the State Council issued thereunder, the Law of the PRC on the Prevention and Treatment of Water
Pollution, the Law of the PRC on the Prevention and Treatment of Air Pollution, the Law of the PRC
on the Prevention and Control of Environmental Pollution by Solid Wastes and the environmental
rules promulgated by the local government of Fujian Province where Haikui’s production facilities
are located. In China, MEP implements unified supervision and management of national
environmental protection. The environmental protection bureaus at or above the county level are
responsible for the environmental administration within their respective jurisdictions. According to
the national environmental laws, MEP sets national standards for pollutants emission and local
environmental protection bureaus may set stricter local standards. Enterprises are required to
comply with the stricter of the two standards.

Enterprises that cause pollution and other public hazards shall adopt environmental protection
measures and implement an environment protection system. Such enterprises shall also take
effective measures to prevent and control the pollution and harms caused to the environment by
waste gas, waste water, waste residues, dust, malodorous gases, radioactive substances, noise,
vibration and radiation generated in the course of production, construction or other activities.
Enterprises discharging pollutants shall apply for registration and for issuance of waste discharge
permits with the competent environment protection bureaus. Enterprises discharging pollutants in
excess of the nationally or locally prescribed standards will be fined according to state provisions.

The PRC government may, according to the circumstances and the extent of the pollution, impose
administrative penalties of different types and degrees on the violators (enterprises or individuals)
of the relevant national environmental laws. Such penalties include warnings, fines, orders to
make rectification within a specific period, orders to suspend production, orders to reinstall and put
to use pollution treatment facilities that have been dismantled or left idle without prior approval,
administrative sanctions on relevant responsible personnel and orders to close the business. The
PRC government may also impose fines together with any of the abovementioned administrative
penalties.

PRC labour contract law

The PRC Labour Contract Law (the "Labour Contract Law") came into effect on 1 January 2008
and partially replaced the PRC Labour Law which is in effect since 1995. The Labour Contract Law
has certain impact on all existing and future employment relationships under PRC law.

The Labour Contract Law emphasizes the conclusion of employment contracts in written form by
means of imposing more severe consequences for non-compliance. If the employer fails to
conclude a written employment contract with an employee for one month to one year after the
actual commencement of work, the employer must pay the employee double salary for the
relevant months. If the employer fails to conclude a written employment contract with an
employee for more than one year after the actual commencement of work, an open-ended
contract is deemed to have been concluded.

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The Labour Contract Law also provides that an employer and an employee may include in their
employment contract provisions on confidentiality concerning commercial secrets of the employer
and confidential issues relating to intellectual property. Also a non-competition obligation for up to
two years after termination or expiration of the contract may be included in the employment
contract or a confidentiality agreement, if the employee is senior manager, senior technician or is
subject to a confidentiality obligation and if the parties agree on a compensation. The employer
shall pay economic compensation to the employee on a monthly basis during the non-competition
obligation period.

Furthermore, additional reasons for the termination of employment contracts are introduced by the
PRC Labour Contract Law. For example, the employee may now terminate the employment if the
employer fails to pay social insurance premiums for the employee, if the rules and regulations for
the employee are in breach of laws and regulations, which damage the employee’s rights and
interests, or if the contract was concluded due to a deception by the employer. In addition, the
regulations on business-related dismissal have been concretized and, for the first time, social
criteria regarding the question as to which employees shall be dismissed are introduced by the PRC
Labour Contract Law.

In case of termination by mutual agreement, compensation must be paid only if the agreement
was proposed by the employer. In case of expiration of a fixed-term employment contract,
compensation must also be paid now under the PRC Labour Contract Law except for the case that
the employee does not agree to renew the contract even when the employer proposes to keep or
improve the conditions stipulated in the current contract. The amount of the compensation shall be
one month’s salary per year of employment with a maximum "monthly salary" of three times the
average monthly salary as determined by the competent local government and a maximum of
twelve years of employment. Before the effectiveness of the PRC Labour Contract Law, there was
no cap on the amount of "monthly salary" for the purpose of calculation of compensation.

The PRC Labour Contract Law also provides that if an employer terminates an employment
contract in violation of laws and an employee demands to continue to perform such a contract, the
employer shall continue to perform the employment contract. If the employee does not want to
continue to perform the employment contract or the performance of the employment contract has
become impossible, the employer shall pay the employee damages in the amount of twice the
severance payment.

Laws and regulations relating to social welfare

China has established a social security system providing people with social security services.
China’s social security system includes social insurance, social welfare, a special care and
placement system, social relief and housing services. The core of the social security system, the
social insurance, is composed of five parts: pension contribution, unemployment insurance, basic
medical insurance, work-related injury insurance and maternity insurance (details of which vary
with the legal requirements in different regions). In addition, the housing funds are also required
to be paid for all employees. Pension contribution, unemployment insurance and basic medical
insurance shall be borne by both the employer and the employee. Work-related injury insurance
and maternity insurance are solely the employer’s responsibility. The employer has to pay for his
own contributions and deduct the applicable contributions of the employees from their salaries and
remit them to the responsible institutions.

In recent years, China has improved the legal system of social security by promulgating a variety
of new laws and regulations, including the PRC Labour Law, PRC Labour Contract Law, Interim
Regulations on the Collection and Payment of Social Insurance Premiums, Regulations on Work
Injury Insurance, Regulations on Unemployment Insurance, Regulations on Basic Pension
Contribution, Measures for Maternity Insurance of the Staff and Workers in Enterprises,
Regulations on Housing Funds Administration, and Social Welfare Law, effective as of 1 July 2011.

Any employer who fails to pay its social insurance contributions and housing funds or withhold
payment of the employee’s portion may be ordered by the relevant PRC social insurance and/or

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housing funds administration authority to make the required payments within a designated period,
and may be liable for penalties. The employee may terminate the employment if the employer fails
to pay social insurance premiums or housing fund contribution, for the employee.

Trademarks and patents

Trademark law

The PRC Trademark Law was promulgated in 1982, followed by the PRC Trademark Implementing
Regulations in 1988, and was amended on 27 October 2001. The PRC is a signatory to the Madrid
Agreement, concerning the International Registration of Marks and the Madrid Protocol. These
agreements provide a mechanism whereby an international registration has the same effect as an
application for registration of the mark made in each of the countries designated by the applicant.

The PRC Trademark Office is responsible for the registration and administration of trademarks
throughout the country. The PRC has adopted a "first-to-file" principle with respect to trademarks.
The term of a registered trademark is ten years from the date of the approval of the registration
and is renewable for another ten years.

PRC law provides that the following acts constitute infringement of the exclusive right to use a
registered trademark:

•    use of a trademark that is identical with or similar to a registered trademark in respect of the
     same or similar commodities without the authorization of the trademark registrant;

•    sale of commodities infringing upon the exclusive right to use the trademark;

•    counterfeiting or making, without authorization, images of a registered trademark of another
     person, or sale of such images of a registered trademark as were counterfeited, or made
     without authorization;

•    changing a registered trademark and putting commodities on which the changed registered
     trademark is used on the market without the consent of the trademark registrant; and

•    otherwise infringing upon the exclusive right of another person to use a registered
     trademark.

In the PRC, a trademark owner who believes its trademark is being infringed has to provide its
trademark registration certificate and other relevant evidence to the State or Local Administration
for Industry and Commerce (the "AIC") which may, at its discretion, launch an investigation. The
AIC may take actions such as: ordering the infringing party to immediately cease the infringing
behaviour, seizing and destroying the images of the trademark in question and imposing a fine. If
the trademark owner is dissatisfied with the AIC’s decision, it may apply to have the decision
reconsidered.

The trademark owner may institute civil proceedings directly with the court. Civil redress for
trademark infringement includes:

•    injunctions;

•    requiring the infringing party to take steps to mitigate the damage (for example, print
     notices in newspapers);

•    damages (that means compensation for the economic loss and injury to reputation as a
     result of the trademark infringement suffered by the trademark holder). The amount of
     compensation is calculated based on either the gains acquired by the infringing party from
     the infringement or the loss suffered by the trademark owner, including expenses incurred
     for deterring such infringement. If it is difficult to determine the gains acquired by the
     infringing party from the infringement, or the loss suffered by the trademark owner, the

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      court may award compensation of no more than RMB 500 thousand (EUR 60,650 thousand);
      and

•     if the case is as serious as to constitute a crime, the trademark owner may lodge a complaint
      with the relevant judicial body.

The Chinese State Trademark Office can award the title "Well-Known Trademark" to trademarks
that are particularly well known in the PRC. A well-known trademark in the PRC can enjoy an
extensive protection under the PRC Trademark Law. According to Article 13 of the PRC Trademark
Law, the Company is entitled to challenge use and registration of any trademark which is the same
as or similar to the well-known trademark, even if the goods or services covered by the trademark
are not similar or same as those covered by the well-known trademark. According to the Article 22
of the Interpretation of the Supreme People's Court Concerning the Application of Laws in the Trial
of Cases of Civil Disputes Arising from Trademarks, in the hearing of disputes over trademarks, the
people's court may, according to the allegations of the parties concerned and the concrete
situations of the cases concerned, decide by law whether the registered trademark involved is a
well-known trademark or not.

Patent law

Overview

The PRC Patent Law was promulgated on 12 March 1984 and amended on 29 December 2008. The
New Amendment of the PRC Patent Law became effective on 1 October 2009. The responsible
authority is the State Intellectual Property Office ("SIPO") in Beijing. The Implementing Rules of
the PRC Patent Law were amended on 9 January 2010 and took effect on 1 February 2010
("Implementing Rules"). The PRC Patent Law provides for three types of patents: invention
patents, utility model patents, and design patents. Registered patents for industrial designs in the
PRC are valid for ten years from the date of the patent application.

Invention patents refer to new technical solutions relating to a product, a process or an
improvement thereof. They are required to be of novelty, creativity and practical applicability. An
invention patent is valid for 20 years from the date on which the patent application was filed.

Utility model patents refer to new technical solutions that are suitable for utilisation and that relate
to the shape or structure of a product or a combination thereof. Utility model patents are required
to be of novelty, creativity and practical applicability. A patent for a utility model is valid for ten
years from the initial date on which the patent application was filed.

Design patents refer to any new design of a product’s shape, pattern or a combination thereof, as
well as the combination of the colour and the shape or pattern of a product, which creates an
aesthetic feeling and is fit for industrial application. In order to be eligible for a design patent, the
design must not consist of a prior design. A design patent is valid for ten years from the initial date
on which the patent application was filed.

Patent filing

Patent applications must be filed to the SIPO in Beijing. The Chinese patent system adopts the
principle of priority of time. This means that if more than one person has filed a patent application
for the same invention, a patent will only be granted to the person who first filed the application.
In addition, the PRC requires absolute novelty in order for an invention to be patentable. Pursuant
to this requirement, any prior written or oral publication, demonstration or use within the territory
of the PRC and outside the PRC before filing the patent application prevents an invention from
being patented in the PRC.

For filing a patent application outside the PRC for an invention or utility model completed within
the territory of the PRC, the applicant will be required to apply to the SIPO for a confidential
review of the applied invention or utility model. If the aforesaid patent application has not been


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submitted for a confidential review before being filed in other countries, the SIPO will not grant the
patent when it is applied for patent in the PRC later.

Patent enforcement

A patent holder who believes its patent is being infringed may either file a civil lawsuit or file an
administrative complaint with a provincial or municipal office of SIPO. A PRC court may issue
preliminary injunctions upon the application of the patent holder or an interested party. Damages
for infringement are calculated as either the loss suffered by the patent holder arising from the
infringement or the benefit gained by the infringing party from the infringement. If it is difficult to
ascertain damages in this manner, if previously there has been a license agreement between the
claimant and the defendant, damages may be determined at a reasonable amount based on a
multiple of previously paid license fees. If damages cannot be determined, statutory damages may
be awarded ranging from RMB 10 thousand (EUR 1,213) to RMB 1 million (EUR 121,300). The
patent holder in the PRC has the burden of proving that the patent has been infringed. However, if
the holder of a patent relating to manufacturing alleges infringement of such patent, the alleged
infringing party has the burden of proving that there has been no infringement.

Patents issued in the PRC are not enforceable in Hong Kong, Taiwan or Macau, as each has
independent patent systems.

Compulsory license

Under the PRC Patent Law, where a person possesses the means to utilize a patented technology
but cannot obtain a license from the patent holder on reasonable terms within a reasonable period
of time, the SIPO may grant a compulsory license for the patented inventions and patented utility
models in the following circumstances:

•     where the patentee fails to exploit or fully exploit its patent within three years following the
      date of grant of the patent and within four years following the date of application for the
      patent;

•     where the patentee’s exercise of the patent is deemed by law to constitute monopoly
      behaviour;

•     where a national emergency or any extraordinary state of affairs occurs or where the public
      interest so requires; or

•     where public health so requires.

Exhaustion Doctrine

After the patented product has been sold by the patentee or its licensees, the patentee cannot
claim its patent rights of this patented product when it is re-sold, used, offered to sell, sold and
imported.

International patent treaties

The PRC is a signatory to all major intellectual property conventions, including the Paris
Convention for the Protection of Industrial Property, the Madrid Agreement on the International
Registration of Marks and Madrid Protocol, the Patent Co-operation Treaty ("PCT"), the Budapest
Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of
Patent Procedure and the Agreement on Trade-Related Aspects of Intellectual Property Rights
("TRIPS").

Although patent rights are national rights, there is a large degree of international co-operation
under the PCT. Under the PCT, applicants in one country can seek patent protection for an
invention simultaneously in a number of other member countries by filing a single international
patent application.

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The PRC land system

All land in the PRC is either state-owned or collectively owned, depending on the location of the
land. All land in urban areas of a city or town is state-owned, and all land in rural areas of a city or
town and all rural land is, unless otherwise specified by law, collectively owned. The state has the
right to reclaim land in accordance with law if required for the benefit of the public. Although all
land in the PRC is owned by the state or by collectives, private individuals and businesses and
other organizations are permitted to hold, lease and develop land for which they are granted land
use rights.

National legislation on land

In April 1988, the Constitution of the PRC was amended by the National People’s Congress to allow
for the transfer of land use rights for value. In December 1988, the Land Administration Law of the
PRC was amended to permit the transfer of land use rights for value.

Under the Interim Regulations of the People’s Republic of China on Grant and Transfer of the Right
to Use State-owned Urban Land ("Interim Regulations on Grant and Transfer") promulgated
in May 1990, local governments at or above county level have the power to grant land use rights
for specific purposes and for a definite period to a land user pursuant to a contract for the grant of
land use rights against payment of a grant premium.

Under the Interim Regulations on Grant and Transfer, all local and foreign enterprises are
permitted to acquire land use rights unless the law provides otherwise. The state may not reclaim
lawfully granted land use rights prior to expiration of the term of grant. If the public interest
requires repossession by the state of the land under special circumstances during the term of
grant, compensation will be paid by the state. A land grantee may lawfully transfer, mortgage or
lease its land use rights to a third party for the remainder of the term of grant.

Upon expiration of the term of grant, renewal is possible subject to the execution of a new contract
for the grant of land use rights and payment of a premium. If the term of the grant is not
renewed, the land use rights and ownership of any buildings erected on the land will revert to the
state without compensation.

Transfer and lease of state-owned land use rights

After land use rights relating to a particular area of land have been granted by the state, the party
to whom such land use rights have been granted may transfer, lease or mortgage such land use
rights, unless a restriction is imposed, for a term not exceeding the term which has been granted
by the state. The difference between a transfer and a lease is that a transfer involves the vesting
of the land use rights by the transferor in the transferee during the term for which such land use
rights are vested in the transferor. A lease, on the other hand, does not involve a transfer of such
rights by the lessor to the lessee. Furthermore, a lease, unlike a transfer, does not usually involve
the payment of a premium. Instead, rent is payable during the term of the lease. Land use rights
cannot be transferred, leased or mortgaged if the provisions of the land grant contract, with
respect to the prescribed period and conditions of investment, development and use of the land,
have not been complied with. In addition, different areas of the PRC have different conditions
which must have been fulfilled before the respective land use rights can be transferred, leased or
mortgaged.

All transfers, mortgages and leases of land use rights must be evidenced by a written contract
registered with the relevant local land bureau at municipality or county level. Upon a transfer of
land use rights, all rights and obligations contained in the contract pursuant to which the land use
rights were originally granted by the state are deemed to be incorporated as part of the terms and
conditions of such transfer, depending on the nature of the transaction.

Under Article 37 of the PRC Law on Administration of Urban Real Estate (the "Urban Real Estate
Law"), real property that has not been registered and a title certificate which has not been


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obtained in accordance with the law cannot be transferred. Under Article 38 of the Urban Real
Estate Law, if land use rights are acquired by means of grant, the following conditions must have
been met before the land use rights may be transferred: (i) the premium for the grant of land use
rights must have been paid in full in accordance with the land grant contract and a land use rights
certificate must have been obtained; (ii) investment or development must have been made or
carried out in accordance with terms of the land grant contract; (iii) more than 25% of the total
amount of investment or development must have been made or completed; and (iv) where the
investment or development involves a large tract of land, conditions for use of the land for
industrial or other construction purpose have been confirmed.

Regulation on collectively-owned land

According to the PRC Law on Land Administration, adopted by the National People’s Congress on
25 June 1986, and amended on 28 August 2004, land in rural and suburban areas, except if
stipulated by law as being owned by the State, is collectively owned by rural residents. Land
collectively owned by rural residents is contracted to and operated by members of the respective
collective economic entity for uses such as plantation, forestry, livestock husbandry or fishery
productions. Before any land collectively owned by rural residents is contracted to a unit or
individual not from the collective economic entity, it must be agreed by at least two-thirds of the
members of the villager committee meeting or at least two-thirds of the villager representatives,
and be submitted to the people’s government at the township level for approval. The land use
rights of collectively owned land must not be granted, assigned or leased to any party for any non-
agricultural uses.

PRC Company Law

On 27 October 2005, the Standing Committee of the PRC National People’s Congress adopted
amendments to the PRC Company Law. The amendments introduced substantial changes,
including enhanced corporate governance, greater protection of shareholders and an easing of
restriction on the management and operation of companies registered in the PRC. The new PRC
Company Law applies to all companies registered in the PRC, including foreign-invested
enterprises ("FIE"), unless otherwise provided in FIE Regulations (see below: "Regulatory
Environment – Foreign investment law").

There are two types of companies in the PRC: limited liability company and company limited by
shares. Haikui’s PRC subsidiary is a limited liability company.

Limited liability companies with two or more shareholders must have a minimum registered capital
of at least RMB 30 thousand. For single shareholder limited liability companies, the minimum
capital requirement is RMB 100 thousand.

The main governing bodies of a limited liability company are its shareholders’ meeting, the board
of directors, the legal representative, and the supervisor.

The shareholders’ meeting of a limited liability company, inter alia, has the following functions and
powers:

•     decisions on the business policy and investment plans;

•     election and replacement of directors and supervisors, and decision on matters relating to
      their remuneration;

•     approval of the company’s proposed annual financial budgets and final accounts;

•     approval of the company’s profit distribution plans and plans for making up losses;

•     resolving on the increase or reduction of the company’s registered capital;

•     resolving on the issuance of corporate bonds;

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•     resolving on important restructuring measures such as the merger, division, dissolution or
      liquidation of the company;

•     amendment of the articles of association.

The board of directors is responsible to the shareholders’ meeting and, inter alia, has the following
functions and powers:

•     convening of shareholders’ meetings and reporting to the shareholders’ meeting;

•     implementing of the resolutions of the shareholders’ meeting;

•     preparation of the business plans and investment plans;

•     preparation of the proposed annual financial budgets and final accounts;

•     preparation of the profit distribution plans and plans for making up losses;

•     preparation of plans for the increase or reduction of the registered capital or for the issue of
      corporate bonds;

•     preparation of plans for restructuring measures such as mergers, divisions, and dissolution
      of the company;

•     organizing of the company’s internal management organization;

•     engagement or dismissal of the manager, deputy manager, financial officer of the company
      and matters relating to their remuneration.

The legal representative of a company is the main principal of the company who holds a special
position therein and is the officer with the legal power to represent, and enter into binding
obligations on behalf of the company. A legal representative’s acts, when concluding a contract,
are binding on the company, even where made ultra vires (i.e. beyond the authorized scope),
unless the counterpart knew, or should have known, that the legal representative was exceeding
his or her powers when entering into the contract. A PRC company must have a "chop" which will
be, normally, in the custody of the legal representative. Many important corporate documents and
contracts will need the company to stick its chop and the legal representative to sigh thereon.

The supervisor of a company is responsible for examining the financial affairs of the company, and
for supervising the activities of the directors and senior managers, it may participate at board
meetings as non-voting participant and may institute legal proceedings against directors.

According to the PRC Company Law, directors and supervisors shall be loyal and diligent towards
the company. In the event that a director, supervisor or senior manager violates laws,
administrative regulations or the company’s Articles of Association in the course of performing its
duties, it shall be liable for damages. A shareholder may institute legal proceedings against the
unlawful acts of a director, supervisor, senior manager or third party that has harmed the interests
of the company or the shareholder.

Foreign investment law

In the PRC, the establishment of foreign-invested enterprises is subject to approval by the
MOFCOM or its local counterpart depending on the respective total amount of investment. For
certain industries, the approval of the ministry with responsibility for that industry is required as a
prerequisite to apply for the approval of the MOFCOM or its local counterpart. After the
establishment, any material corporate changes in the foreign-invested enterprise, such as capital
increase or reduction, change of business scope, share transfer, or other, are also subject to
approval by the MOFCOM or its local counterpart. In addition, the establishment of a foreign-
invested enterprise as well as all corporate changes must be registered with the competent

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registration authority, that means the State Administration of Industry and Commerce ("SAIC")
or its local counterpart, in order to be valid.

Provisions on the total amount of investment of foreign invested enterprises

For foreign invested enterprises, PRC foreign investment law distinguishes between registered
capital and the total amount of investment and stipulates a specific ratio between the two
depending on the total amount of investment. The concept of the total amount of investment of a
foreign invested enterprise refers to all capital that under PRC law may theoretically be invested in
a company, including equity capital and debt capital. When an investor intends to set up a foreign
invested enterprise, it has to forecast the required funds, i.e. the total amount of investment for
the project. Depending on the total amount of investment, the minimum registered capital that the
investor has to contribute will be determined. If the total amount of investment is USD 3 million or
under, the registered capital must amount to at least 70% of the total investment. If the total
amount of investment is between USD 3 million and USD 10 million, the registered capital must be
at least 50%. If the total amount of investment is between USD 10 million and USD 30 million, the
registered capital must be at least 40%. If the total amount of investment exceeds USD 30 million,
the registered capital must be at least 1/3 of the total amount of investment. By stipulating
minimum requirements for the percentage of registered capital depending on the total amount of
investment, PRC law thus limits the amount of loans that may be taken out by foreign invested
enterprises.

Regulations on overseas listings

On 8 August 2006, six PRC regulatory agencies, including the MOFCOM and the CSRC jointly
adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors,
or the "M&A Provisions", which became effective on 8 September 2006. The M&A Provisions, as
amended on 22 June 2009, among other things, purport to require an offshore special purpose
vehicle, or SPV, formed for the purpose of listing the SPV’s securities on an offshore securities
exchange and controlled directly or indirectly by PRC companies or individuals, to obtain the
approval of the CSRC prior to such offshore listing and trading. On 21 September 2006, the CSRC
published on its official website procedures, specifying documents and materials required to be
submitted to it by SPV’s seeking CSRC approval of their overseas listings. However, substantial
uncertainty remains regarding the scope and applicability of the M&A Provisions to overseas
listings of offshore SPVs.

Regulations on foreign exchange

Foreign currency exchange regulation in China is primarily governed by the following rules:

•     the Foreign Currency Administration Rules (1996), as amended (1997 and 2008), or the
      "Exchange Rules"; and

•     the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996),
      or the "Administration Rules".

Under the Exchange Rules, the Renminbi is convertible for current account items, including the
distribution of dividends, interest payments, trade and service-related foreign exchange
transactions. Conversion of Renminbi for capital account items, such as direct investment, loans,
investment for securities and repatriation of investment, however, is still subject to the approval of
the State Administration of Foreign Exchange ("SAFE") or its local counterparts.

Under the Administration Rules, foreign-invested enterprises in China, may only buy, sell and/or
remit foreign currencies at those banks authorized to conduct foreign exchange business after
providing valid commercial documents and, in the case of capital account items, transactions
require the approval from SAFE or its local counterparts. Capital investments outside of China by
foreign-invested enterprises in China are also subject to limitations, which include approvals by
SAFE and other relevant government authorities.


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SAFE regulations relating to offshore investment by PRC residents

On 21 October 2005, SAFE issued the Notice on Issues Relating to the Administration of Foreign
Exchange in Fund-raising and Reverse Investment Activities of Domestic Residents Conducted via
Offshore Special Purpose Companies, or "Notice No. 75" which became effective as of 1
November 2005. On 29 May 2007, SAFE issued the Implementation Rules Concerning the Notice
on Issues Relating to the Administration of Foreign Exchange in fund raising and Reverse
Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies,
or "Notice No. 106" which prescribes the detailed directives on the registration of a special
purpose vehicle ("SPV").

Pursuant to Notice No. 75, prior to establishing or assuming control of an offshore company for the
purpose of financing that offshore company with assets or equity interests in an onshore enterprise
in the PRC, each PRC resident or passport holder who has ultimate control, whether an individual
or a legal entity, must complete the overseas investment foreign exchange registration procedures
with the relevant local SAFE branch. An amendment to the registration with the local SAFE branch
is required to be filed by any PRC resident that directly or indirectly holds interests in that offshore
company upon either the injection of equity interests or assets of an onshore enterprise to the
offshore company, or the completion of any overseas fundraising by such offshore company. An
amendment to the registration with the local SAFE branch is also required to be filed by such PRC
resident when there is any material change involving a change in the capital of the offshore
company, such as (a) an increase or decrease in its capital, (b) a transfer or swap of shares, (c) a
merger or division, (d) a long-term equity or debt investment or (e) the provision of a guarantee
to third parties.

Under Notice No. 75, failure to comply with the registration procedures set forth in Notice No. 75
may result in restrictions being imposed on the foreign exchange activities of the relevant onshore
company, including the payment of dividends and other distributions to its offshore parent or
affiliate and the capital inflow from the offshore entity, and may also subject relevant PRC
residents to penalties under PRC foreign exchange administration regulations.

Mr. Chen Zhenkui, Mr. Huang Zhenping and Mr. Tang Hui, the PRC resident shareholders of the
Company, have already made proper registrations with the Fujian SAFE in respect of their setting
up special purpose vehicle companies in Singapore and Germany.

SAFE Notice No. 142 on conversion of foreign capital in foreign-invested enterprises

On 29 August 2008, SAFE issued the Circular on Issues Concerning Improvement of the
Administration of Payment and Settlement of Foreign Currency Capital of Foreign Invested
Enterprises, or "Notice No. 142", which restricts the use of the registered capital of foreign-
invested enterprises settled in Renminbi and converted from foreign currencies. Notice No. 142 is
one of a number of measures implemented by China’s regulators in recent years to prevent the
registered capital of foreign-invested enterprises from being used in China in businesses and
investments not within its approved business scope. Notice No. 142 may have significant impacts
for foreign investors because of its potential impact on acquisitions and investments in China
conducted through foreign-invested enterprises. A significant proportion of foreign-invested
enterprises in China denominates their registered capital in a foreign currency and will typically
convert their registered capital into Renminbi for use in developing their business in China.
According to Notice No. 142, the use of RMB converted from foreign capital to make equity
investments in Chinese companies is prohibited, unless such equity investment is within the
approved business scope of the foreign-invested enterprise, or "has been otherwise provided for".
Further, Notice No. 142 prohibits the purchase of Chinese real estate using RMB converted from
foreign capital other than for the foreign investment enterprise’s own use, unless the enterprise is
licensed as a real estate enterprise. In M&A transactions, settlement of the purchase consideration
denominated in foreign currency must be effected through an exclusive foreign currency account
approved by the local branch of SAFE. In addition, the use of such registered capital settled in RMB
may not be changed without SAFE’s approval, and may not in any case be used to repay Renminbi
loans if the proceeds of such loans have not been used.

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Dividend distribution of wholly foreign-owned enterprises

The principal regulations governing distribution of dividends paid by wholly foreign-owned
enterprises include:

•     the Wholly Foreign-Owned Enterprise Law (1986), as amended in 2000; and

•     the Wholly Foreign-Owned Enterprise Law Implementation Rules (1990), as amended in
      2001.

Under these regulations, foreign-invested enterprises in China may pay dividends only out of their
accumulated profits, if any, determined in accordance with PRC accounting standards and
regulations. In addition, wholly foreign-owned enterprises in China are required to set aside 10%
of the profit after tax as reported in its PRC statutory financial statements to the statutory
common reserve fund in each year, except where the fund has reached 50% of the Group’s
registered capital, and certain amounts out of their accumulated profits each year for bonus and
welfare funds. These funds are not distributable as cash dividends.

Under previous PRC tax regulation, dividend payments from foreign invested enterprises ("FIEs")
to their foreign shareholders were exempted from PRC withholding tax. However, pursuant to the
Enterprise Income Tax Law, which came into effect on 1 January 2008, such payment will be
subject to a 10% withholding tax unless the country where the foreign shareholder is incorporated
has concluded a tax treaty with China that provides for a lower withholding tax rate. According to
Article 10 Subsection 2 of the Sino-Singaporean Double Taxation Treaty, (the "DTT"), if the
beneficiary of dividends is a Singaporean tax resident company which holds directly at least 25%
equity interests in a tax resident enterprise in China, the dividends distributed by the tax resident
enterprise in the mainland to its Singaporean shareholder shall be subject to taxes in China at a
rate not higher than 5%. Therefore, the dividend distributed by Fujian Haikui to Haikui Singapore
may be subject to such DTT and therefore be subject to a withholding tax in China at a rate not
higher than 5%.

On 27 October 2009, the State Administration of Taxation issued the Tax Circular Guoshuihan
[2009] No. 601 to provide a better understanding of the term "beneficiary" for Double Taxation
Treaty purposes. According to the Circular, a "conduit company" shall not be regarded as a
"beneficiary". A "conduit company" is defined as a company set up solely for the purpose of
reducing tax and normally does not conduct any manufacturing, trading or management activities.
Therefore, there might be a risk that dividends distributed by Haikui Fujian to Haikui Singapore
may not be taxed at the lower withholding tax rate of 5% under the DTT but at a withholding tax
rate of 10% under the EIT law and its Implementing Rules.

Furthermore, among other things, the concept of tax resident enterprise ("TRE") introduced by
the EIT Law provides that any (offshore) enterprise whose de facto management body is located in
the PRC will be subject to income tax at a rate of 25% under the EIT Law on its worldwide income,
except that dividend income paid from one TRE to another due to direct investments is exempted
income under the EIT Law. According to the Implementing Rules of the EIT Law, "de facto
management body" refers to the body that exercises essential management and control over the
enterprise in terms of its operations, personnel, accounts and assets. In April 2009, the State
Administration of Tax specified certain criteria for determining the location of the "de facto
management body" of foreign companies controlled by PRC enterprises. However, there is no
comparable set of criteria for foreign companies not controlled by PRC enterprises. Therefore it
remains uncertain how the PRC tax authorities will treat foreign companies like Haikui Singapore
that are owned by other foreign companies and are ultimately controlled by PRC individuals.

Since Haikui Singapore’s management is mainly based in China and a substantial number of the
Company’s Management Board members reside in China, there is a risk that Haikui Singapore
and/or the Company are regarded as a TRE. Under the EIT Law, dividends distributed and received
by a TRE from another TRE (which is not listed in the Chinese stock market) due to direct
investment are exempted from EIT. Therefore, in case Haikui Singapore is regarded as a TRE, the

                                                150
dividends received by Haikui Singapore from Fujian Haikui are exempted from EIT/withholding tax.
If both Haikui Singapore and the Company are regarded as TREs, the dividends the Company
receives from Haikui Singapore shall also be exempted from EIT/withholding tax. In such case, the
withholding tax is triggered only when the Company distributes its dividends to its shareholders
(which are not Chinese tax residents). However, if only Haikui Singapore is regarded as TRE while
the Company is not, the dividends received by the Company from Haikui Singapore shall be
subject to withholding tax at 10% in China. However, should both, Haikui Singapore and the
Company be considered as TREs, then shareholders which are not TREs and which receive
dividends distributed by the Company for earnings derived since January 1, 2008 and sourced
within China would be subject to a PRC income tax at the rate of 10% in case of non-individuals
and 20% in case of individual investors applicable to such dividend and the Company would be
obliged under the EIT Law to withhold PRC income tax on dividends payable to such non TRE
shareholders. Investors (non-individuals) are not TREs so long as they were not established in the
PRC and do not have a de facto management body located in the PRC. Individual investors are not
PRC tax resident if they do not habitually reside in the PRC. A lower withholding tax rate may
apply if a non TRE investor (non-individual) or a non tax resident individual is from a jurisdiction
that has entered into an income tax treaty or agreement with China that allows a lower
withholding. Similarly, if both, Haikui Singapore and the Company are considered TREs, any gain
realized on the transfer of shares in the Company by non TRE investors or non tax resident
individuals may be also subject to a 10% (20% for individual investors) PRC income tax if such
gain is regarded as income derived from sources within China, unless the applicable income tax
treaty provides otherwise (see "Risk Factors - Risks related to Haikui’s Business - Shareholders
may be subject to taxation under PRC tax laws").

Singapore resident and non-resident corporate taxpayers are subject to Singapore income tax on:

•     income accruing in or derived from Singapore; and

•     foreign income received or deemed received in Singapore.

However, foreign income in the form of dividends received or deemed received in Singapore by a
resident corporate taxpayer shall be tax exempt provided the following conditions are met:

•     such income is subject to tax of a similar character to income tax under the law of the
      jurisdiction from which such income is received;

•     at the time the income is received in Singapore, the highest rate of tax of a similar character
      to income tax in the jurisdiction from which the income is received is at least 15%; and

•     the Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the
      recipient of the foreign income.

Singapore adopted the one-tier corporate tax system ("One-Tier System") which took effect
from 1 January 2003. Under the One-Tier System, the tax paid by companies on their corporate
profits is final and dividends paid by Singapore tax resident companies are exempt from Singapore
income tax. There will be no tax credits attached to such dividends. There is no withholding tax in
Singapore on dividend payments to non-resident shareholders (see: "Risk Factors - Risks related
to Haikui’s Business - Haikui currently enjoys tax benefits in China. Any change in PRC tax laws
which may result in a removal of such benefits will have an impact on Haikui’s net profit"). For
information on taxation in Germany for dividends distributed from Haikui Singapore to the
Company, see "Taxation in Germany - Taxation of the Company".




                                                151
PRC tax laws

Enterprise income tax law ("EIT Law")

General

Under the previous PRC tax regulations, the general enterprise income tax ("EIT") rate for
foreign-invested enterprises "FIEs" was 33% which comprised 30% national and 3% local income
tax. However, in some special zones and regions, the applicable tax rate might be as low as 15%
or 24%. Under the previous tax law, manufacturing FIEs, such as Fujian Haikui, with a term of
operation exceeding ten years were usually entitled to a tax holiday of two years full exemption
followed by a three years term of 50% tax exemption beginning the first profitable year after
previous losses have been made up. The new EIT law ("EIT Law"), which came into effect on 1
January 2008, provides for a unified tax rate of 25% for both foreign-invested and Chinese owned
companies. The EIT Law provides that the 15% tax rates in the special zones and regions under
previous regulations will gradually be increased to 25% in the next five years. According to the tax
Circular Guofa [2007] No. 39, for FIEs set up before 16 March 2007 originally enjoying a tax rate
of 15% based on laws and regulations issued by the central government, the transitional tax rates
for 2008 —2012 shall be, respectively, 18%, 20%, 22%, 24% and 25%.

For Haikui, the effective tax rates for 2009, 2010 and 2011 were 10%, 11%, and 12%,
respectively. On 12 March 2007, Fujian Haikui was converted into a Foreign Investment
Enterprise. In accordance with the EIT Law, the regular statutory income tax rate applicable to
Fujian Haikui was 20% in 2009, 22% in 2010, 24% in 2011 and will be 25% in 2012 and onwards.
Fujian Haikui was and is entitled to an exemption from income tax for the first two profitable years
of operations (i.e. 2007 and 2008) and thereafter a 50% reduction on its regular statutory income
tax rate for the following three financial years (i.e. 2009 to 2011). Accordingly, there were tax
expenses of 10% in 2009. Fujian Haikui is allowed to enjoy its tax benefits until 2011. According to
EIT Law, the actual tax rate for 2010 was 11%, for 2011 it was 12% and it will be 25% from 2012
onwards.

Under the EIT Law, enterprises engaged in the primary processing of agriculture products
(including primary processing of seafood) may be granted income tax exemptions upon approval
by the competent tax authority. However, if the enterprise is engaged in both primary processing
and further processing of agriculture products and other products, they must demarcate the
income received from primary processing of agriculture products from other incomes, otherwise
the income tax exemption is not available. As Fujian Haikui is engaged in both primary processing
and further processing of agriculture products, the competent tax authority has not approved
Haikui’s application for being granted an income tax exemption for the reason that they could not
distinguish the income from the primary processing of frozen seafood from other incomes.

Tax resident enterprises ("TREs")

The EIT Law has introduced the concept of tax resident enterprise defined as an enterprise which
is established in the PRC under the PRC laws and regulations, or which has its de facto
management body in the PRC. TREs will be subject to PRC Enterprise Income Tax for their
worldwide income, including income received from its subsidiaries. However, dividends received by
one TRE from another TRE (not listed in the Chinese stock market) are exempted from EIT.
According to Article 4 of the Implementing Rules of the EIT Law (the "Implementing Rules"),
"de facto management body" refers to the management body that exercises essential
management and control over the enterprise. As a result, if a holding company located outside the
PRC was actually managed by a management body in China, the overseas company would be
regarded as a TRE and subject to EIT for its worldwide income. According to the interpretation of
Article 4 of the Implementing Rules given by the Chinese State Administration of Taxation ("SAT")
on its website, the location of the de facto management body shall be determined by a substance-
over-style method. In particular, mere off-shore board meetings shall not be sufficient for the de
facto management body being located outside of China.



                                               152
According to Tax Circular [2009] No. 82 issued by the SAT, a company is considered a TRE if all of
the following conditions are met:

•     The senior management responsible for the Company’s day-to-day productions and business
      operations is mainly located in the PRC;

•     Strategic management over the Company’s finances and personnel is located in the PRC, or
      requires the approval from the establishments or individuals located in the PRC;

•     The Company’s major assets, accounting records, company seals and minutes of board of
      directors and shareholder meetings are located or maintained in the PRC; and

•     50% or more of the board members of the Company with voting rights or senior
      management habitually reside in the PRC.

In addition to the above conditions, SAT Tax Circular [2009] No. 82 further stipulates that the
principle of substance-over-style shall be adopted when determining the TRE status. However, the
above conditions apply to foreign companies controlled by PRC enterprises. There is no comparable
set of criteria for foreign companies not controlled by PRC enterprises. Therefore, it remains
uncertain how the PRC tax authorities will treat foreign companies like Haikui Singapore that are
owned by other foreign companies and are ultimately controlled by PRC individuals.

A foreign company controlled by PRC enterprises which based on the provisions of SAT Tax
Circular [2009] No. 82 qualifies as a TRE, can apply with the competent PRC tax authority to verify
its TRE status. So far, Haikui Singapore and the Company have not verified their TRE status.
Alternatively, if the Company does not approach the tax authority for the TRE status, the tax
authority is entitled to make a preliminary decision based on the information it has obtained and
report the case level by level to the SAT for a final decision.

Haikui Singapore has not applied for verification of its TRE status yet. Therefore, there might be a
risk that Haikui Singapore may be regarded as a TRE. As a consequence thereof, it would be
subject to enterprise income tax in China on their worldwide income, except for the dividends
received by Haikui Singapore from Fujian Haikui which are exempted from enterprise income tax in
China. Further, if Haikui Singapore and the Company are both regarded as TREs, dividends
received by the Company from Haikui Singapore are also exempted from enterprise income tax in
China. The PRC withholding tax on dividends will then only be levied if a TRE distributes dividends
to non-TRE shareholders. As a consequence thereof, taxation of shareholders may be adversely
affected, in particular, shareholders may be subject to Chinese taxation with regard to dividend
distributions (see: "Regulatory Environment - Dividend Distribution" and "Risk Factors - The
Company and Haikui Singapore may be treated as resident enterprises for PRC tax purposes under
the new PRC enterprise income tax laws and therefore be subject to PRC taxation").

Value added tax ("VAT")

Enterprises and individuals shall pay VAT when they sell goods, provide taxable services
(repairing, maintenance and processing) in the PRC or import goods into the PRC.

The VAT payable by a general taxpayer equals the balance between the output-VAT amount and
the input-VAT amount incurred. The standard VAT rate in the PRC is 17% and applies to most
products sold in the PRC, including primary processed seafood products. A special VAT rate of 13%
is only applicable to certain products, including certain further processed seafood products. Thus,
depending on whether primary processed seafood is sold or further processed seafood, Haikui’s
VAT rate in the PRC would be 17% or 13%. Input-VAT on purchases can be deducted from output-
VAT. With regard to goods they export, manufacturing enterprises are usually entitled to an
"exemption, credit and refund" of VAT ("ECR"); that means the export of goods is exempted from
VAT, the input-VAT can be used as credited against output-VAT (for PRC sales) and the negative
balance, if any, will be refunded to the enterprise or used to be credited against future output VAT.



                                                153
The VAT refund rates depend on the products which are exported and are frequently changed by
the PRC Government. The current VAT refunded rates for most seafood range from 13% to 15%.




                                            154
 SHAREHOLDER STRUCTURE (PRIOR TO THE OFFERING AND UPON COMPLETION OF THE
                               OFFERING)

The following table provides an overview of the shareholding structure and the participation of                           the
shareholders in the share capital of the Company prior to the Offering and upon completion of                             the
Offering, i.e. after the registration of the implementation of the IPO Capital Increase in                                the
commercial register and the placement of the Offer Shares amongst investors, assuming                                     the
placement of all of the Offer Shares.

                                                         Shareholdings

                                                           Following the completion of        Following the completion of
                                                              the Offering (without              the Offering (with full
                                                            exercise of the Greenshoe          exercise of the Greenshoe
                              Before the Offering                    Option)                            Option)

                             Ordinary                          Ordinary                           Ordinary
Name of shareholder        bearer shares         in %        bearer shares        in %          bearer shares            in %
Haida Holdings Pte.              5,656,588       56.57             5,356,588        46.58                5,356,588       46.58
Ltd.1
Mega Bond                        3,542,918       35.43             3,542,918        30.81                3,335,496       29.00
International Limited2
Palm Cove                          300,247        3.00               300,247         2.61                  282,669        2.46
International Limited3
Praise Ocean                       300,247        3.00               300,247         2.61                  300,247        2.61
International Limited4
Everswift Holdings                 180,000        1.80               180,000         1.57                  180,000        1.57
Limited5
Alan Gey6                          20,000        0.20                 20,000       0.17                     20,000       0.17
Mr. She Dongpeng7                    0.00        0.00                300,000       2.61                    300,000       2.61
Free Float                              0        0.00              1,500,000      13.04                  1,725,000      15.00
Total                         10,000,000       100.00            11,500,000      100.00                11,500,000      100.00



1)     Haida Holdings Pte. Ltd. ("Haida Holdings"): A company incorporated in Singapore, whose sole shareholder is the
       Company’s CEO, Mr. Chen Zhenkui. Haida Holdings' business address is at 16 Collyer Quay #10-00 Hitachi Tower,
       Singapore (049318).

2)     Mega Bond International Limited ("Mega Bond"): A company incorporated in the British Virgin Islands, whose shares
       are held by two investment funds being Zana China Fund L.P ("ZCF") and ASB CMIA China Growth I L.P. ("ACCG1")
       and Pine Universe Investments Limited, whose sole shareholder is Ms. Sophy Hu, who is not a related party to Haikui.
       Mega Bond’s business address is at P.O. Box 957 Offshore Incorporations Centre, Road Town, Tortola, British Virgin
       Islands.

3)     Palm Cove International Limited ("Palm Cove"): A company incorporated in Samoa, whose sole shareholder is
       Mr. Tang Hui. Mr. Tang Hui received his shares in Haikui from Haida Holdings in recognition of assistance rendered by
       Tang Hui’s father (Tang Fuming) when Mr. Chen Zhenkui established Fujian Haikui. Palm Cove’s business address is at
       Equity Trust Chambers, P.O. Box 3269, Apia, Samoa.

4)     Praise Ocean International Limited ("Praise Ocean"): A company incorporated in the British Virgin Islands, whose sole
       shareholder is the Company’s COO, Mr. Huang Zhenping. Praise Ocean’s business address is at Palm Grove House, P.O.
       Box 438, Road Town, Tortola, British Virgin Islands.

5)     Everswift Holdings Limited ("Everswift"): A company incorporated in the British Virgin Islands, whose shares are held
       by the same two investment funds that also hold shares in Mega Bond being ZCF and ACCG1. Everswift’s business
       address is at P.O. Box 957 Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

6)     Mr. Alan Gey ("Mr. Alan Gey"): The Company’s CFO, a Singapore national. Mr. Alan Gey’s business address is at 16
       Collyer Quay, #10-00, Hitachi Tower, Singapore (049318).

7)     Mr. She Dongpeng ("Mr. She Dongpeng"): By way of share purchase agreement dated 19 April 2012, Mr She
       Dongpeng has agreed with Haida Holdings to purchase 300,000 shares in the Company, equivalent to 3% of the
       Company's share capital as at the date of this Prospectus, from Haida Holdings, for a purchase price per share
       equivalent to the offer price per share attained in the Offering. The share transfers will be made immediately following
       the registration of the implementation of the IPO Capital Increase with the commercial register. Mr. She Dongpeng is a
       PRC national. Mr. She Dongpeng's business address is at No. 268 Gong Yuan Street, Tong Ling Town, Dongshan
       County, Fujian Province, PRC. Mr She Dongpeng is the owner and operator of a fleet of fishing vessels. Mr She
       Dongpeng is not a related party to Haikui or any of its shareholders within the meaning of International Accounting
       Standard (IAS) 24.



                                                             155
                         GENERAL INFORMATION ON THE COMPANY

History

Mr. Chen Zhenkui, the Company’s CEO, established Fujian Haikui in 1993 under the name Fujian
Dongshan Haikui Aquatic Products Co., Ltd, jointly with his brother, Mr. Chen Zhenchun to engage
in the business of producing seafood products for sale. Mr. Chen Zhenkui was then the legal
representative of, and held 98.18% equity in, Fujian Haikui while Mr. Chen Zhenchun held a
1.82% equity interest. Haikui began business operations in Dongshan Island of the Fujian Province
in the PRC with an annual production capacity of approximately 100 tonnes. The initial principal
activity was the processing of certain seafood (mainly fish, squid and seaweed). Haikui’s processed
products were mainly distributed under third party brands to overseas markets but were also sold
and distributed under the "Haikui" brand for the Chinese market. In 1996, Haikui expanded its
product range to include crabs and shellfish. In May 1999, Mr. Chen Zhenchun transferred his
entire interest in Fujian Haikui to his brother, Mr. Huang Zhenping.

In October 1999 Fujian Haikui moved to its current headquarters and was also granted an import
and export licence by the relevant PRC authority. Haikui further expanded its product range to
include prawn and mussel.

In October 2000, Haikui underwent and passed the HACCP certification process, which has since
then enabled Haikui to export its products to the United States of America. Haikui commenced
exporting its products to Southeast Asia in 2001. Between 2001 and 2002, Haikui increased its
production facilities and expanded its product range to include sliced fish and crab meat. In August
2004, Haikui completed the construction of its ice-making facility and added a new production
facility for pasteurised crab meat. Haikui has since 2005 been accredited by the PRC State
Supervision Administration of Verification and Inspection on behalf of the EU in respect of the
quality of seafood exported to the EU.

In September 2007, Mega Bond International Limited, a private equity investment company,
invested USD 11 million in Haikui. In the following years, Haikui expanded its production facilities
and, in particular, established its first own production lines for canned seafood products.

In September 2010, Haikui acquired a factory with processing lines for grilled seafood products
(see: "Business – Material Agreements – Agreements relating to the purchase of a factory for
grilled seafood").

In the same year, Haikui changed its group structure and set up a new top holding company in
Germany for the purpose of an initial public offering on the Frankfurt Stock Exchange. In June
2011, after advanced preparations, Haikui's management and shareholders decided to postpone
the envisaged initial public offering due to the upcoming worldwide crisis of the financial markets.

The General Meeting of Shareholders of the Company on 16 March 2012 resolved to change the
corporate name of the Company from "China Haikui AG" to "Haikui Seafood AG". The change
became legally effective by registration in the commercial register on 11 April 2011.

(For information on the corporate development of the Company and Haikui, please see: "General
Information on the Company – Formation, business name, legal seat, financial year and term of
the Company" and "General Information on the Company - Group Structure and Corporate
Developments")

Formation, business name, legal seat, financial year and term of the Company

The Company is a German stock corporation (Aktiengesellschaft) operating under German law. The
Company was founded under the corporate name (Firma) "China Haikui AG" by Haida Holdings,
Mega Bond, Palm Cove, Praise Ocean, Everswift and Mr. Alan Gey by means of a notarial deed of
formation (Gründungsurkunde), Roll of Deeds No. 3162/2010 of the notary Dr. Johannes Beil
dated 12 October 2010. Against contributions of their respective shareholdings in Haikui Singapore
under a share contribution agreement (Einbringungsvertrag), the Existing Shareholders subscribed
                                               156
for their respective current shareholding in the Company (see: "Shareholder Structure (Prior to the
Offering and Upon Completion of the Offering) - Shareholdings before the Offering"). The
completion (Durchführung) of the formation became legally effective by registration in the
commercial register of the local court of Hamburg on 24 February 2011. Following the
effectiveness of the Company’s formation, the Company’s shareholder structure was shown in the
column "Shareholdings - Before the Offering" in the section "Shareholder Structure (Prior to the
Offering and upon Completion of the Offering)".

The corporate name (Firma) of the Company is "Haikui Seafood AG". The legal seat (Satzungssitz)
of the Company is in Hamburg. The Company is registered with the commercial register
(Handelsregister) of the local Court (Amtsgericht) in Hamburg under registration number 117277.
The Company has its business address at Haikui Seafood AG, c/o Ashurst LLP, OpernTurm,
Bockenheimer Landstraße 2-4, 60306 Frankfurt am Main, Germany (telephone number: +49(0)40-
6091860). The Company’s financial year is the calendar year (that means 1 January through
31 December), the first financial year 2011 was a short financial year (Rumpfgeschäftsjahr). The
Company has been established for an unlimited period of time.

Business purpose of the Company

The Company’s business purpose (Unternehmensgegenstand) as set forth in § 2 of the Company’s
Articles of Association (Satzung) is the processing and sale of foodstuffs for human and animal
consumption, in particular of fish and other seafood, by the Company itself or indirectly by its
subsidiaries and/or affiliated companies as well as all businesses and services in connection
therewith and services for its subsidiaries and affiliated companies.

Notices, paying agent

In accordance with its Articles of Association (Satzung), notices of the Company will be made in
the electronic version of the German Federal Gazette (elektronischer Bundesanzeiger). Publications
required by stock exchange laws will be made in a national journal designated for such purposes
by the Frankfurt Stock Exchange.

Notices in connection with the approval of the Prospectus or regarding amendments to the
Prospectus will be made in accordance with the provisions of the German Securities Prospectus Act
(Wertpapierprospektgesetz) and will be published in the form intended for prospectuses, that
means on the internet website of Haikui Seafood AG (www.haikui-seafood.com).

The paying agent, which is responsible, e.g., for dividend payment transactions, is biw AG -
BankM.

Group structure and corporate developments

Overview

As at the date of this Prospectus, the Company holds 100% of the shares in China Haikui Pte. Ltd.
("Haikui Singapore"), a company incorporated under Singaporean law which acts as
intermediate holding company and holds 100% of the equity interests in Fujian Dongshan Haikui
Aquatic Products Group Co. Ltd ("Fujian Haikui"), a company incorporated in the PRC, which is
the operational company of Haikui.

The corporate structure of Haikui as at the date of this prospectus is shown in the chart below:




                                                157
Haikui Singapore

Haikui Singapore is a company incorporated under the laws of Singapore with business address at
16 Collier Quay #10-00 Hitachi Tower Singapore 049318. As at the date of this Prospectus, the
issued share capital of Haikui Singapore is 2,828 Singapore Dollar ("SGD") divided into
565,600,000 ordinary shares denominated in SGD (ordinary shares in Haikui Singapore
denominated in SGD hereinafter also referred to as "SGD Shares") and USD 11,000,000 divided
into 600,000 shares denominated in USD (ordinary shares in Haikui Singapore denominated in
USD hereinafter also referred to as "USD Shares"), and is fully paid-up. The directors of Haikui
Singapore are Mr. Chen Zhenkui, Mr. Huang Zhenping, and Mr. Alan Gey.

Haikui Singapore was incorporated in Singapore under the Singapore Companies Act on
8 December 2006 as a private limited company under the name of Haikui Pte. Ltd. with a share
capital of SGD 1,000 consisting of 1,000 SGD Shares held by a natural person domiciled in
Singapore.

On 21 February 2007, Mega Bond International Limited ("Mega Bond") acquired all 1,000 shares
in Haikui Singapore. Mega Bond is a company incorporated in the British Virgin Islands, whose
shares are held by two investment funds, ZCF and ACCG1, and Pine Universe Investments Limited.

On 25 April 2007, Haikui Singapore increased its capital from SGD 1,000 to SGD 2,828. Haida
Holdings Pte. Ltd. ("Haida Holdings"), a company incorporated in Singapore, whose sole
shareholder is the Company’s CEO, Mr. Chen Zhenkui, subscribed to all of the 1,828 newly issued
SGD shares in Haikui Singapore. Haida Holdings’ consideration for the issuance of new shares was
the transfer of certain intellectual property rights to Haikui Singapore. Haikui Singapore’s
shareholder structure after this capital increase was: Haida Holdings held 1,828 shares (64.64%),
and Mega Bond held 1,000 shares (35.36%).

Based on an Investment Agreement dated 27 September 2007, Mega Bond made an additional
investment in Haikui Singapore of an aggregate amount of USD 11,000,000 against the issuance
of three convertible notes, each convertible into one ordinary USD Share in Haikui Singapore.
Mega Bond converted the convertible notes on 22 October 2007 and Haikui Singapore issued three
new USD Shares to Mega Bond. A Shareholders Agreement dated 27 September 2007 relating to
the investment of Mega Bond in Haikui Singapore provides for certain rights to Mega Bond relating
to the corporate governance of Haikui Singapore, including the right to nominate one of three
directors of Haikui Singapore and the reservation of the resolution on certain matters to the
affirmative vote of Mega Bond.
                                              158
On 5 November 2007, Haida Holdings transferred 3% of the SGD Shares in Haikui Singapore to
Praise Ocean International Limited, a company incorporated in the British Virgin Islands, whose
sole shareholder is the Company’s COO, Mr. Huang Zhenping, and another 3% of the SGD Shares
in Haikui Singapore to Palm Cove International Limited, a company incorporated in Samoa, whose
sole shareholder is Mr. Tang Hui.

The shareholders of Haikui Singapore approved at the extraordinary general meeting held on 2
February 2009 to subdivide the 2.831 ordinary shares in Haikui Singapore’s share capital into
283,100,000 ordinary shares consisting of 282,800,000 SGD Shares and 300,000 USD Shares.

On 1 March 2009, Haida Holdings transferred 5,095,800 SGD Shares to Everswift Holdings, a
company incorporated in the British Virgin Islands whose shares are held by the same two
investment funds that also hold shares in Mega Bond, ZCF and ACCG1, for a consideration of
SGD 1.

On 25 August 2009, Haida Holdings transferred 566,200 shares to Alan Gey, the Company’s CFO,
for a consideration of SGD 185,995.

The shareholders of Haikui Singapore approved at the extraordinary general meeting held on
25 February 2010 to subdivide the 283,100,000 ordinary shares in the share capital of the
company into 566,200,000 ordinary shares consisting of 565,600,000 SGD Shares and 600,000
USD Shares.

The management of Haikui Singapore originally intended to carry out an initial public offering of
Haikui Singapore on the Malaysian Stock Exchange, and, for this purpose, on 20 August 2009,
Haikui Singapore was converted into a public limited company. However, after advanced
preparations, the management decided to postpone the envisaged initial public offer and to
conduct an initial public offering on the Frankfurt Stock Exchange.

Before the formation of the Company, the shareholder structure of Haikui Singapore was as set
out in the table below:

                                                                         Number of issued shares

                                                                        SGD                 USD

1. Haida Holdings Pte. Ltd.                                     320,276,000
2. Mega Bond International Limited                              200,000,000              600,000
3. Palm Cove International Limited                               17,000,000
4. Praise Ocean International Limited                            17,000,000
5. Everswift Holdings Limited                                    10,191,600
6. Mr. Alan Gey                                                   1,132,400
Total number of shares                                         565,600,000               600,000
Issued and paid-up capital                                            2,828           11,000,000
Value per share                                                   0.0000050           18.3333333




For the purpose of formation of the Company, all of the parties mentioned above contributed their
respective shareholdings in Haikui Singapore to the Company against issuance of new shares in
the Company to the respective shareholders as shown in the column "Shareholdings Before the
Offering" in the table in the section "Shareholder Structure (Prior to the Offering and Upon
Completion of the Offering)".

Haikui Singapore was re-converted into a private limited company by shareholders resolution
dated 8 February 2011, which became effective by approval by the Accounting and Corporate
Regulatory Authority on 11 February 2011.

By confirmation letter dated 8 March 2011, the parties to the Investment Agreement and
Shareholders Agreement confirmed that upon the transfer of all shares in Haikui Singapore to

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Haikui AG and the first day of trading of the Company’s shares at the Frankfurt Stock Exchange, all
rights of the parties of the Investment Agreement and Shareholders Agreement vis-á-vis Haikui
Singapore and vis-á-vis each other will be terminated.

Fujian Haikui

Fujian Haikui is a company incorporated under the laws of the PRC, domiciled at Dongshan
Economic & Technology Development Zone, with its current registered capital of RMB 50,635,000,
which is fully paid-up. The current total amount of investment (for a description of the term total
amount of investment under PRC law, see: "Regulatory Environment - Foreign Investment Law -
Provisions on the Total Amount of Investment") of Fujian Haikui is RMB 92,000,000. The directors
of Fujian Haikui are Mr. Chen Zhenkui (Chairman of the Board), Mr. Huang Zhenping, and
Mr. Huang Fuping. Mr. Chen Zhenkui is the legal representative of Fujian Haikui. The supervisor of
Fujian Haikui is Ms Chen Yanyan.

Fujian Haikui was established in Dongshan Island, Fujian Province, PRC on 7 October 1993 under
PRC laws as a limited liability company under the name of Fujian Dongshan Haikui Aquatic
Products Co. Ltd. The founders of Fujian Haikui were Mr. Chen Zhenkui and his brother, Mr. Chen
Zhenchun, holding equity stakes in Fujian Haikui of 98.18% and 1.82%, respectively. Various
share transfers between the brothers Chen Zhenkui, Chen Zhenchun, and Huang Zhenping, and
two investment development companies named Zhangzhou Resources Development Company and
Dongshan Resources Development Company took place between 1995 and 2000, after which as at
15 December 2006 the sole shareholders of Fujian Haikui were Mr. Chen Zhenkui holding 95.87%
of the shares and Mr. Huang Zhenping holding 4.13% of the shares.

On 15 December 2006, Mr. Chen Zhenkui, Mr. Huang Zhenping and Haikui Singapore entered into
an Equity Acquisition and Transfer Agreement, pursuant to which Mr. Chen Zhenkui transferred
shares amounting to 30% of the total share capital in Fujian Haikui to Haikui Singapore. The
transaction was approved by the responsible PRC authority at provincial level on 30 January 2007.
After the equity transfer, the shareholding structure of Fujian Haikui changed to the following: Mr.
Chen Zhenkui held 65.87%, Mr. Huang Zhenping held 4.13%, and Haikui Singapore held 30% in
Fujian Haikui. Fujian Haikui became a Sino-foreign joint venture enterprise, whose registered
capital and total investment was RMB 15,635,000 and RMB 22,000,000, respectively.

On 13 March 2007, Mr. Chen Zhenkui, Mr. Huang Zhenping and Haikui Singapore entered into a
Capital Increase Agreement pursuant to which the registered capital of Fujian Haikui was increased
from RMB 15,635,000 to RMB 50,635,000, and its total investment increased from
RMB 22,000,000 to RMB 92,000,000. All new shares resulting from the capital increase were
subscribed by Haikui Singapore, which by this became the major shareholder of Fujian Haikui. The
capital increase was approved by the responsible PRC authorities at provincial level on
31 April 2007. After the capital increase, the shareholding structure of Fujian Haikui was: Haikui
Singapore held 78.38%, Mr. Chen Zhenkui held 20.34%, and Mr. Huang Zhenping held 1.28% of
the share capital of Fujian Haikui.

On 3 September 2007, Mr. Chen Zhenkui and Mr. Huang Zhenping, entered into an Equity Transfer
Agreement to transfer their respective equity interest in the registered capital of Fujian Haikui
being an aggregate of approximately 21.62% to Haikui Singapore. Upon completion of such
transfer, Haikui Singapore became the sole shareholder of Fujian Haikui. The responsible PRC
authority at provincial level approved the transaction on 28 September 2007 and on 27 November
2007 changed its commercial registration information. Fujian Haikui by this transaction became a
wholly foreign-owned enterprise ("WFOE"). As of the date when Fujian Haikui was registered as a
WFOE, Fujian Haikui was, via their direct or indirect shareholdings in Haikui Singapore, indirectly
owned by Mr. Chen Zhenkui (58.57%), Mega Bond (35.43%), Mr. Tang Hui (3%), and Mr. Huang
Zhenping (3%).




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       INFORMATION ON THE SHARE CAPITAL OF THE COMPANY AND APPLICABLE
                                PROVISIONS

Share capital and shares

As at the date of this Prospectus, the registered share capital of the Company (gezeichnetes
Grundkapital) amounts to EUR 10,000,000.00 and is divided into 10,000,000 shares with a
notional amount of the share capital of EUR 1.00 each. The Company’s registered share capital is
fully paid up.

As part of the Offering, up to 1,500,000 New Shares will be issued based on a resolution of an
extraordinary general meeting of shareholders held on 16 March 2012 which resolved upon a
capital increase for the purpose of the Offering (the "IPO Capital Increase"). It is expected that
IPO Capital Increase will become legally effective upon the registration of its execution in the
commercial register of the local court of Hamburg at the latest on 14 May 2012. The share capital
of the Company after the Offering will amount to up to EUR 11,500,000.00 consisting of up to
11,500,000 no par value bearer shares with a notional amount of EUR 1.00 per share.

Each share carries one vote at the Company’s General Shareholders’ Meeting. There are no
restrictions on voting rights. The shares carry full dividend entitlement for the financial year 2012
and all subsequent financial years. In the event that the Company is dissolved, the Company’s
assets remaining after settlement of its liabilities will be distributed among the shareholders in
proportion to their share of the share capital.

The Management Board determines the form of the share certificates as well as the dividend
coupons and renewal coupons. Global share certificates may be issued.

The Company’s current share capital is represented by one global share certificate without
dividend coupons, which will be deposited with Clearstream Banking AG, Eschborn, Germany. The
New Shares will be represented by an additional global certificate which will also be deposited with
Clearstream Banking AG.

Authorized share capital

The authorized capital of the Company amounts to EUR 5,000,000.00 (the "Authorized Capital
2010"). Based on the Authorized Capital 2010, the Management Board is authorised to increase
the share capital of the Company with the consent of the Supervisory Board by up to EUR
5,000,000.00 by issue of up to 5,000,000.00 shares in consideration of contributions in cash or in
kind.

In case of a capital increase based on the Authorized Capital 2010, the Management Board is
further authorized, in each case with the consent of the Supervisory Board, to exclude pre-emptive
rights (Bezugsrechte) of the shareholders. An exclusion of the pre-emptive rights, however, is only
admitted in the following cases:

•     if the new shares are issued to acquire enterprises, shares in enterprises or parts of an
      enterprise;

•     for fractional amounts;

•     for granting shares to employees and members of the management of the Company or of a
      connected enterprise in connection with employees’ participation programs;

•     if the shares are issued in consideration of contributions in cash at an issue price which is not
      substantially below the stock exchange price and the exclusion of the pre-emptive rights is
      only applied to new shares that represent not more than 10% of the share capital; for the
      calculation of the 10% limitation any other exclusion of the pre-emptive rights according to
      Section 186, paragraph 3, sentence 4 of the Stock Cooperation Act (Aktiengesetz) has to be
      taken into account;

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•     to list shares of the Company or certificates representing shares of the Company on
      domestic or foreign stock exchanges where they are not listed yet;

•     to the extent necessary to grant holders of convertible bonds, convertible profit participation
      rights (Genussrechten), or stock options pre-emptive rights that they would have in case
      they became shareholders.

A capital increase where the pre-emptive rights are excluded may not exceed 10% of the share
capital existing at the time when this authorization is made use of, if such capital increase serves
for an employees’ participation programme.

The Management Board decides with the consent of the Supervisory Board on the rights to and the
conditions of issuance of new shares to be generated through the Authorized Capital 2010.

Conditional share capital

The Company has no conditional share capital (bedingtes Kapital).

Employee participation, stock option programme

The Company has not established an employee share participation scheme (Mitarbeiterbeteiligung)
or stock option programme (Aktienoptionsprogramm).

General provisions relating to profit allocation and dividend payments

Under German law, the participation of the Company’s shareholders in profits is determined on the
basis of their respective interests in the share capital, unless the Articles of Association (Satzung)
provide for another profit allocation.

The adoption of resolutions regarding the distribution of dividends on the Company’s shares for a
given financial year is the responsibility of the General Shareholders’ Meeting (Hauptversammlung)
held during the following financial year, which resolves on the utilisation of the Company’s
distributable profits on the basis of the non-binding proposal of the Management Board (Vorstand)
and the Supervisory Board (Aufsichtsrat). If the Existing Shareholders hold an effective or,
depending on their presence at the General Shareholders’ Meeting of the Company, a factual
majority of the voting rights present or represented at the General Shareholders’ Meeting, they
may exercise further influence on the utilisation of the Company’s profits and/or the dividends’
policy.

Under German law a resolution concerning dividends and the utilisation of distributable profits may
be adopted only on the basis of a balance sheet profits (Bilanzgewinn) shown in the Company’s
adopted annual individual financial statements (festgestellter Jahresabschluss) to be prepared in
accordance with generally accepted German accounting principles, i. e. the accounting provisions
of 146 the German Commercial Code (Handelsgesetzbuch/HGB). In determining the balance sheet
profits available for distribution, the annual net income (Jahresüberschuss) or annual net loss
(Jahresfehlbetrag) of the respective year must be adjusted for profits and losses carried forward
from the previous year and for deposits into or withdrawals from reserves. Certain reserves are to
be created by law and must be deducted, where applicable, when calculating the balance sheet
profits available for distribution. In a resolution regarding the utilisation of balance sheet profits,
the General Shareholders’ Meeting can include further amounts in retained earnings or carry them
forward as profit.

Dividends resolved by the Company’s General Shareholders’ Meeting are paid annually, shortly
after the General Shareholders’ Meeting, in compliance with the rules of the respective clearing
system. Dividend claims are subject to a three-year statute of limitations. Notifications concerning
the distribution and payment of dividends will be published in the electronic version of the Federal
Gazette (elektronischer Bundesanzeiger).



                                                 162
General provisions relating to a liquidation of the Company

Apart from liquidation as a result of insolvency proceedings and other reasons as set forth in the
German Stock Corporation Act (Aktiengesetz), the Company may be liquidated only upon
resolution of the General Shareholders’ Meeting (Hauptversammlung) to be adopted with a
majority of at least 75 % of the share capital represented at the General Shareholders’ Meeting at
which such resolution is adopted. In such a case, the assets remaining following fulfilment of all of
the Company’s liabilities will be distributed among the shareholders according to their respective
shares in the share capital and in accordance with the German Stock Corporation Act.

General provisions governing changes in share capital

Under the German Stock Corporation Act, the share capital of a German stock corporation may be
increased in return for contributions (Kapitalerhöhungen gegen Einlagen) on the basis of a
resolution by the General Shareholders’ Meeting passed with a majority of at least three-quarters
of the share capital represented at the time the resolution is adopted.

In addition to the capital increase against contributions, the shareholders may also create
authorized capital (genehmigtes Kapital) or conditional capital (bedingtes Kapital). In the case of
authorized capital, the Management Board is authorized upon the approval of the Supervisory
Board to increase the share capital one time or several times up to an amount of not more than
50% of the issued share capital at the time the authorization is granted against contributions in
cash by issuing new shares within a period of no more than five years. The shareholders’
resolution creating the authorized capital requires a majority of three-quarters of the share capital
represented at the time the resolution is adopted. The General Shareholders’ Meeting may also
create conditional capital for the purpose of issuing (i) shares to holders of convertible bonds or
other securities conferring subscription rights on company shares, (ii) shares that serve as
consideration in the event of a merger with another company, or (iii) shares offered to senior
managers and employees. The resolution of approval to be adopted by the General Shareholders’
Meeting requires a majority of three-quarters of the share capital represented at the time of the
resolution. The nominal amount of the conditional capital may not exceed 50% of the share capital
or, if the conditional capital is created for the purpose of issuing shares to senior managers and
employees, 10% of the existing share capital at the time the resolution is adopted.

A resolution to decrease the amount of the share capital requires a majority of three-quarters of
the share capital represented at the time of the resolution.

General provisions relating to pre-emptive rights

The German Stock Corporation Act provides that, in the case of a capital increase - with the
exception of a conditional capital increase - shareholders are, in principle, entitled by law to pre-
emptive rights regarding new shares to be issued in the course of a capital increase in accordance
with their current equity quota (gesetzliches Bezugsrecht). The same applies to the issuance of
convertible bonds, income bonds, profit participation rights or bonds with warrants as well as in
respect of the sale of treasury shares. Pre-emptive rights are freely transferable and the Company
may determine that the pre-emptive rights may be traded on a German stock exchange during a
fixed period prior to the expiry of the subscription period.

The General Shareholders’ Meeting may partially or completely exclude the pre-emptive rights by
means of a resolution passed with a majority of at least three-quarters of the share capital
represented at the time the resolution is adopted. The Management Board must present a written
report to the shareholders’ meeting justifying the exclusion of the pre-emptive rights. An exclusion
of pre-emptive rights is permissible if the Company’s interest in excluding the pre-emptive rights
outweighs the shareholders’ interest in the conferral of the pre-emptive rights. In the absence of
such justification, pre-emptive rights may only be excluded in the case of a capital increase if such
capital increase has been effected in return for cash contributions, the amount of the capital
increase does not exceed 10% of the existing share capital, and the issue price of the new shares



                                                163
is not substantially below the stock exchange price of the shares already trading on the stock
exchange.

Reporting and notification requirements in relation to share ownerships

Upon the admission of its shares to the regulated market of the Frankfurt Stock Exchange (see:
"The Offering - General and Specific Information on the Shares - Admission to Trading and Listing
of shares") the Company, as a publicly listed company, is subject to the provisions of the German
Securities Trading Act (Wertpapierhandelsgesetz) ("WpHG"), which contains various notification
requirements in connection with shareholdings in listed companies whose country of origin
(Herkunftsstaat) is Germany:

·       A shareholder who reaches, exceeds or falls below, through purchase, sale or any other
        manner, 3 %, 5 %, 10 %, 15 %, 20 %, 25 %, 30 %, 50 % or 75 % of the voting rights in
        a listed company must, without undue delay but within four trading days at the latest,
        submit written notifications to the relevant company and to the German Financial
        Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) stating that it has
        reached, exceeded, or fallen below the aforementioned thresholds and indicating its share
        of the voting rights. Upon receipt of a notification submitted in this manner, the listed
        company must publish this notification without undue delay, but within three trading days
        at the latest, in media for distribution in the European Union and inform BaFin of such
        notification.

·       A shareholder who reaches or exceeds 10 %, 15 %, 20 %, 25 %, 30 %, 50 % or 75 % of
        the voting rights in a listed company is obliged to inform the company within 20 stock
        exchange trading days about (i) the financing sources for such investment and (ii) its
        investment purposes, unless this obligation has been dispensed with in the articles of
        association of the company, which is not the case in the Company’s articles of association.

·       A person who directly or indirectly holds financial instruments or other instruments that
        grant the holder the unilateral right under a legally binding agreement to acquire
        previously issued voting shares of a listed company, is subject to a notification obligation
        if the sum of the shares they can so acquire, together with any voting right stakes they
        may already hold in the issuer or which are attributable to them, reaches, exceeds or falls
        below 5 %, 10 %, 15 %, 20 %, 25 %, 30 %, 50 % or 75 % of the voting rights in a listed
        company.

·       A person who directly or indirectly holds financial instruments or other instruments, which
        are not covered by the abovementioned reporting requirement and which due to their
        structure "make it possible" (ermöglichen) for their respective holder or a third party to
        acquire previously issued voting shares of a listed company, is also subject to a
        notification obligation if it reaches, exceeds or falls below the abovementioned thresholds.
        The WpHG provides for two non-exhaustive examples for the constituent element of
        "making it possible". According to the first example, the notification is required with
        respect to instruments in respect of which the respective counterparty of the holder can
        exlude or limit its risk from such instruments by holding shares. The second example
        covers financial instruments or other instruments which establish either a right or an
        obligation to acquire shares. The WpHG provides also for an aggregation of such
        hypothetical voting rights subject to reporting obligations and other holdings subject to
        reporting obligations.

In connection with these notification requirements, the WpHG contains various rules that aim to
ensure that share ownership is attributed to the party that actually controls the voting rights
attached to the shares. For example, shares belonging to a third company are attributed to
another company if the latter controls the former. Similarly, shares held by a company for the
account of another company or a company it controls are also attributed to that first company. If
the respective notification is not made, the shareholder is excluded from exercising all rights
related to the shares (including voting rights and the receipt of dividends) for the duration of the

                                               164
non-compliance. In addition, in the event of non-compliance with the notification obligation, a fine
may be imposed.

Public takeovers

Pursuant to the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und
Übernahmegesetz) (the "Takeover Act"), the Company as a stock corporation
(Aktiengesellschaft) listed on a regulated market within the meaning of Article 4, paragraph 1, No.
14 of the European Union Directive 2004/39/EC is considered a so-called target company
(Zielgesellschaft) in the event of a publicly launched offer for the acquisition of a part or all of the
Company’s shares ("Public Takeover Offer") (öffentliches Erwerbs - oder Übernahmeangebot).
In the event of a Public Takeover Offer launched in relation to the company’s shares, the
Management Board of the target company must not take any actions that could result in
frustrating the Public Takeover Offer. In addition, the Management Board and the Supervisory
Board of the target company are obliged to prepare and announce a detailed statement
(Stellungnahme) on the Public Takeover Offer.

According to the Takeover Act, any party whose share of the voting rights reaches or exceeds
30 % of the voting shares of a company after admission to trading is required to publish this fact,
including the percentage of the voting rights held, within seven calendar days via Internet and by
means of an electronic system for the dissemination of financial information, and subsequently,
unless an exemption from this requirement is granted, to submit a mandatory public takeover
offer to all shareholders of the company.

Squeeze-out of minority shareholders and integration

Pursuant to the German Stock Corporation Act, the shareholders’ meeting of a German stock
corporation can, at the request of a shareholder holding 95% of the share capital ("Principal
Shareholder"), resolve to transfer the shares of the remaining minority shareholders to the
Principal Shareholder in return for payment of a suitable cash settlement (so-called "squeeze-out"
of minority shareholders). The amount of the cash settlement to be paid to the minority
shareholders must reflect the company’s situation at the time the resolution is passed by the
shareholders’ meeting. The amount of the cash settlement is based on the full value of the
company, which is determined using the capitalized earnings value calculation. Upon registration
of the resolution of the general shareholders’ meeting on the squeeze-out with the commercial
register, the shares of the minority shareholders are automatically transferred to the Principal
Shareholder.

According to the Takeover Act, there is a further possibility of a squeeze-out of minority
shareholders after a Public Takeover Offer. According to the Takeover Act, a bidder that holds 95%
of the voting share capital of a target company after a public takeover offer may within a period of
three months following the expiration of the offer period file an application with the local court in
Frankfurt to issue a court order to transfer the remaining voting shares against an adequate
compensation. A resolution of the General Shareholders’ Meeting is not required. The consideration
offered has to correspond to the consideration offered in connection with the takeover or
mandatory bid and a cash consideration has to be offered alternatively. Shareholders also have the
right to request acquisition of their shares.

The general shareholders’ meeting of a stock corporation may resolve on the integration
(Eingliederung) of a corporation if at least 95% of the shares of the company to be integrated are
held by the future principal company. The former shareholders of the integrated company can
claim a suitable settlement that generally must be granted in the form of shares of the remaining
company. The amount of the settlement is calculated using a "merger value ratio" between the
two companies, i.e., the exchange ratio that would be deemed to be appropriate in the event of a
merger of the two companies.




                                                 165
                           CORPORATE BODIES AND MANAGEMENT

The corporate bodies of the Company are the Management Board (Vorstand), the Supervisory
Board (Aufsichtsrat) and the General Shareholders’ Meeting (Hauptversammlung). The powers of
these governing bodies are determined by the provisions of the German Stock Corporation Act
(Aktiengesetz), the Company’s articles of association (Satzung), and the respective rules of
procedure of the Management Board and the Supervisory Board (Geschäftsordnungen für den
Vorstand und den Aufsichtsrat).

The Management Board conducts the Company’s business in accordance with the relevant
statutes, the Company’s articles of association and the Management Board’s respective rules of
procedure. It represents the Company in dealings with third parties.

The Management Board is responsible for ensuring that appropriate risk management and risk
monitoring systems are in place to provide early warning of any developments that might
jeopardize the Company’s continuing existence. The Management Board also has an obligation to
report regularly on at least a quarterly basis to the Supervisory Board on the status of business, in
particular any developments affecting revenues, and on the situation of the Company and its
subsidiaries. In the last Supervisory Board meeting of each financial year, the Management Board
must report on business policy and other key issues relating to corporate planning and present the
budget for the following financial year, as well as present its mid-term strategy. The Management
Board is also required to report to the Supervisory Board in a timely fashion on any transactions
that may be significant with respect to the Company’s profitability or liquidity in order to give the
Supervisory Board the opportunity to express its opinion on such transactions prior to their
implementation. The Management Board must further report any important matters to the
Chairman of the Supervisory Board (Vorsitzender des Aufsichtsrats), including any matter
involving subsidiaries and/or affiliates that could have a material effect on the Company’s position.
In the case of stock corporations, under German law, no member of the Management Board may
serve concurrently on the Supervisory Board.

The Supervisory Board appoints the members of the Management Board and is entitled to dismiss
them for good cause. The Supervisory Board advises the Management Board on managing the
Company and supervises its management activities. Pursuant to the German Stock Corporation
Act, the Supervisory Board may not engage in management activities. However, under the articles
of association or the Management Board’s respective rules of procedure, the Management Board
must obtain the Supervisory Board’s approval for certain transactions, usually prior to the
implementation of such measures or transactions.

Members of the Management Board and Supervisory Board owe a duty of care and loyalty to the
Company. In all their actions, members of these governing bodies must consider a wide number of
interests, including those of the Company, its shareholders, its employees and its creditors. The
Management Board must also take into consideration the right of shareholders to equal treatment
and equal information. Should members of the management or Supervisory Boards breach these
duties, they are jointly and severally liable to the Company for compensation.

Under currently applicable German law, a shareholder has no possibility of taking direct action
against members of the Management Board or the Supervisory Board if it is of the opinion that
they have breached their fiduciary duties and that, as a result, the Company has suffered
damages. Under normal circumstances only the Company itself is entitled to claim compensatory
damages against the members of the Management Board or the Supervisory Board. The Company
will be represented by the Management Board in the case of claims against members of the
Supervisory Board and by the Supervisory Board in the case of claims against members of the
Management Board. Based on a decision by the German Supreme Court, the Supervisory Board is
obligated to pursue enforceable claims for compensatory damages expected to be enforceable
against the Management Board, unless significant reasons related to the Company’s welfare make
the enforcement of a claim unadvisable and these reasons outweigh or are at least on balance with
the reasons supporting the pursuit of a claim.


                                                166
If the respective governing body entitled to represent the Company decides not to pursue a claim,
the German Stock Corporation Act, requires that claims for compensatory damages of the
Company must be enforced against members of governing bodies if the General Shareholders’
Meeting so resolves with a simple majority. Shareholders whose aggregate shareholdings equal or
exceed 10% of the share capital or a notional value of the share capital of EUR 1 million may
request that a representative be appointed to enforce claims for compensatory damages.
Furthermore, shareholders whose aggregate shareholdings at the time of the request equal or
exceed 1% of the share capital or a notional value of the share capital of EUR 100 thousand may
request in their own name that a law suit be admitted before the Regional Court (Landgericht) at
the Company’s registered domicile for enforcement of claims for compensation brought by the
Company. Among other things, a prerequisite for admission of the action is that the shareholders
of the Company have unsuccessfully requested to bring an action, after setting an appropriate
deadline, and facts exist that justify the suspicion that the Company has incurred damages due to
impropriety or gross violation of the law or the Company’s articles of association (Satzung). The
Company is entitled at any time to enforce its claim for compensatory damages itself. The bringing
of an action by the Company makes a pending approval procedure or action by the shareholders
inadmissible.

The Company may not waive or settle any such claim until three years have elapsed since the
vesting of such claims, and then only if the General Shareholders’ Meeting so resolves by simple
majority, provided further that no minority of shareholders, holding in the aggregate 10% or more
of the registered share capital, raises a written objection in the minutes of the meeting.

Under German law, neither shareholders nor any other individual may attempt to influence
members of the Management Board or Supervisory Board to act in a manner that would harm the
Company. Shareholders who have a controlling influence may not use such influence to cause the
Company to act against its interest, unless the resulting damage is compensated for. Any person
who uses its influence to cause a member of the Management Board or Supervisory Board, a
commercial attorney in fact (Prokurist) or any person holding a commercial power of attorney to
act in a manner that harms the Company or its shareholders may be obliged to compensate the
Company and its shareholders for the resulting damage. In addition, the members of the
Management Board and Supervisory Board may be jointly and severally liable for breach of their
duties.

Management Board

General provisions on the Management Board

The Supervisory Board determines the size of the Management Board which, under the Company’s
Articles of Association, must have at least two members. The Supervisory Board may appoint one
Management Board member as chairman or spokesman and another member as deputy chairman
or spokesman. Furthermore, the Supervisory Board may appoint further members of the
Management Board.

Members of the Management Board are appointed by the Supervisory Board for a maximum term
of five years. Reappointment or extension of the term, for a maximum of five years in each case,
is permissible upon a resolution of the Supervisory Board that may be adopted not earlier than one
year prior to the expiration of the current term of office. The Supervisory Board may revoke the
appointment of a Management Board member prior to the expiration of its term for good cause,
such as for gross breach of fiduciary duties or if the General Shareholders’ Meeting adopts a no-
confidence resolution in relation to the Management Board member in question.

According to the Company’s Articles of Association, the members of the Management Board have
joint power of representation (Gesamtvertretungsbefugnis), unless the Supervisory Board grants
sole power of representation (Einzelvertretungsbefugnis) to one or more members of the
Management Board. The Supervisory Board may further exempt individual members or all
members of the Management Board from the prohibition of multiple representations (Section 181,
second alternative, German Civil Code), (Verbot der Mehrvertretung). The Supervisory Board has

                                               167
granted Mr. Chen Zhenkui sole power of representation and exemption from the prohibition of
multiple-representation by means of a resolution dated 8 December 2010.

The resolutions of the Management Board are adopted by a simple majority of its members unless
other majorities are prescribed by law, the Company’s Articles of Association or the Management
Board’s respective rules of procedure.

Rules of procedure for the Management Board

Rules of procedure for the Management Board (Geschäftsordnung für den Vorstand) were adopted
by the Supervisory Board on 14 March 2011. According to the rules of procedure, certain
transactions (for example, capital expenditure projects above a specific amount, the acquisition
and disposal of companies and of real property above a specific amount) require the prior consent
of the Supervisory Board.

Members of the Management Board

The Management Board of the Company currently comprises three members. The members of the
Management Board as at the date of this Prospectus are set out below:

      Name           Date of birth       Initially          Term of             Responsibility
                                       appointed on      Appointment in
                                                             years

Mr. Chen Zhenkui      16 May 1960     8 December 2010           3                    CEO
                                                                            (Vorstandsvorsitzender)
Mr. Huang Zhenping   19 March 1964    8 December 2010           3                    COO
Mr. Alan Gey          24 April 1972   8 December 2010           3                    CFO



Mr. Chen Zhenkui

Mr. Chen Zhenkui, citizen of the PRC, the Company’s CEO, is responsible for the overall
management and corporate development of Haikui. Since founding Haikui in 1993, Mr. Chen
Zhenkui has managed the expansion of Haikui. Mr. Chen Zhenkui started his career in the seafood
processing industry at a seafood processing company in Dongshan in 1984, and has been active in
this industry since then. Mr. Chen Zhenkui is the Vice Chairman of the All-China Federation of
Industry & Commerce - Aquatic Industry, Chairman of the Zhangzhou Aquatic Processing and
Distribution Federation and Chairman of Fujian Dongshan Chamber of Commerce. He was
appointed as a member of Fujian Province Ocean and Fishery Technology Economic Professional
Advisory Group by Fujian Provincial Ocean & Fishery Bureau in 2000. He is also a committee
member of Zhangzhou Municipal Committee of the Chinese People’s Political Consultative
Conference. In January 2012, Mr. Chen Zhenkui received a Special Contribution to China Economic
Development award from the PRC Association of Economic and Trade Promotion. Mr. Chen Zhenkui
obtained his Senior Economist Certificate from the Fujian Provincial Department of Personnel in
1996 and graduated from the National University of Defence Technology in 2001, with a Diploma
in Law. In 2009, Mr. Chen Zhenkui completed the Business Management and Strategic Investment
course for senior executives at Tsinghua University.

Mr. Chen Zhenkui received a total compensation of EUR 12.6 thousand        for his services from
Haikui in the last full financial year 2011.

Based on his service agreement concluded with Haikui Singapore on 13 April 2012, which will
become effective upon the commencement of trading of the Company’s shares at the Frankfurt
Stock Exchange (the "Commencement of Trading"), Mr. Chen Zhenkui is entitled to a monthly
basic salary of SGD 17,000 (EUR 10,103) for a period of 13 months a year plus a financial
performance bonus of 3.00% of Haikui’s profits before tax exceeding RMB 330,000,000 (EUR
40,029,000) in 2012 and RMB 420,000,000 (EUR 50,946,000) in 2013. The Supervisory Board
may make adjustments to the financial performance bonus taking into account the future

                                              168
prospects of Haikui and multi-year assessments of the performance of Haikui. Beyond that, the
Supervisory Board may in its lawful discretion decide to pay a personal performance bonus to Mr.
Chen Zhenkui based on the scope of responsibilities and personal performance of Mr. Chen
Zhenkui. Mr. Chen Zhenkui’s salary is subject to an annual review by the Company’s Supervisory
Board and the Board of Directors of Haikui Singapore. The agreement has a term of two years
after the Commencement of Trading and will be automatically extended for a further period of one
year after expiry of its initial term, however, only to the extent that Mr. Chen Zhenkui continues to
act as member of the Management Board of the Company during such additional term.

At any time in the previous five years, Mr. Chen Zhenkui has been a partner in the following
partnerships or a member of administrative, management or supervisory bodies of the following
companies1:

Current directorships2

•     Haida Holdings/ Director

•     FTZ Pte. Ltd./ Director

•     Fujian Dongshan Donghaian Public Bonded Warehouse Co., Ltd./ Director

•     Fujian Dongshan Donghaian Bonded Logistics Centre Co., Ltd./ Director

Past directorships

•     Dongshan County Kehai Aquatic Breeding Co., Ltd./Director

•     Dongshan County Haitong Commercial Development Co., Ltd./Director

•     Dongshan Fuda Fishery Co., Ltd./Director

•     Hai Chang Inc./Director

____________

1)     Director refers to a member of the board of directors. Board of directors is the body of companies which, unlike
       German Stock Corporations, which have a two-tier corporate governance structure consisting of two bodies, the
       management board and supervisory board, have a one-tier corporate governance system. Members of the board of
       directors jointly manage and oversee the activities of a company. Within a board of directors, there may directors,
       sometimes referred to as non-executive directors, who purely have a supervisory function, comparable to members of
       the Supervisory Board of a German stock corporation.

2)     At all companies listed under "Current Directorship", Mr. Chen Zhenkui receives no salary and is not employed.


Mr. Chen Zhenkui has not performed other principal activities outside of Haikui which were
significant with respect to Haikui.

Mr. Huang Zhenping

Mr. Huang Zhenping, citizen of the PRC, the Company’s COO, is responsible for all aspects of the
corporate administration of Haikui and supporting Haikui’s operations. Mr. Huang Zhenping started
his career at Dongshan County No. 1 Construction Company in 1985 as a project manager and
joined Haikui in 1997 as Deputy General Manager. Mr. Huang Zhenping is an Executive Member of
the Dongshan County Chamber of Commerce and the Vice President of the Dongshan County
Youth-Entrepreneur Association. He was awarded Top Ten Youth-Entrepreneur in Dongshan
County jointly by Dongshan Committee of Chinese Communist Youth League, Dongshan Economic
and Trade Bureau and Dongshan Foreign Trade and Economic Cooperation Bureau. He holds a
Diploma in Industrial and Civil Architecture from the Fujian Institute of Architecture and obtained
his Engineer Certificate from the Fujian Provincial Department of Personnel in 1998.



                                                          169
Mr. Huang Zhenping received a total compensation of EUR 8.9 thousand for his services from
Haikui in the last full financial year 2011.

Based on his service agreement concluded with Haikui Singapore on 13 April 2012, which will
become effective upon the Commencement of Trading, Mr. Huang Zhenping is entitled to a
monthly basic salary of SGD 10,000 (EUR 5,943) for a period of 13 months a year plus a financial
performance bonus of 1.20% of Haikui’s profits before tax exceeding RMB 330,000,000 (EUR
40,029,000) in 2012 and RMB 420,000,000 (EUR 50,946,000) in 2013. The Supervisory Board
may make adjustments to the financial performance bonus taking into account the future
prospects of Haikui and multi-year assessments of the performance of Haikui. Beyond that, the
Supervisory Board may in its lawful discretion decide to pay a personal performance bonus to Mr.
Huang Zhenping based on the scope of responsibilities and personal performance of Mr. Huang
Zhenping. Mr. Huang Zhenping’s salary is subject to an annual review by the Company’s
Supervisory Board and the Board of Directors of Haikui Singapore. The agreement has a term of
two years after the Commencement of Trading and will be automatically extended for a further
period of one year after expiry of its initial term, however, only to the extent that Mr. Huang
Zhenping continues to act as member of the Management Board of the Company during such
additional term.

Over the last five years, Mr. Huang Zhenping has been a partner in the following partnerships or a
member of administrative, management or supervisory bodies of the following companies:

Current directorships1

•     Praise Ocean International Ltd/Director

Past directorships

•     Dongshan County Haitong Commercial Development Co., Ltd./ Director

•     Fujian Zhongyang Canned Food Co., Ltd./Director

•     Fujian Dongshan Donghaian Public Bonded Warehouse Co., Ltd/ Director

•     Fujian Dongshan Donghaian Bonded Logistics Centre Co., Ltd/ Director

__________

1)    At all companies listed under "Current Directorship", Mr. Huang Zhenping receives no salary and is not employed.


Mr. Huang Zhenping has not performed other principal activities outside of Haikui which were
significant with respect to Haikui.

Mr. Alan Gey

Mr. Alan Gey, citizen of Singapore, the Company’s CFO, is responsible for accounting, financial
reporting, treasury, investor relations as well as corporate and financial compliance functions of
the Group. Prior to joining Haikui in 2007, he was the General Manager at Shanghai TREFFERT
Special Coatings Co., Ltd. from 2004 to 2007, in charge of its operational, financial and
administrative matters. Between 2001 and 2004, he was Senior Credit Analyst and later Vice
President at Standard Chartered Bank (Singapore) where he was responsible for structuring
corporate banking products, developing corporate client base and credit risk management.
Between 1999 and 2001, he joined DBS Thai Danu Bank as a Manager in its debt restructuring
department and eventually became a Senior Manager of the institutional banking group in 2000
that provided banking and business advisory services to companies operating in Thailand. Between
1996 and 1999, he was an Assistant Manager in DBS Bank where he extended banking products
and services to regional and international corporate clients. Mr. Alan Gey graduated from Nanyang
Technological University in 1996 with a Bachelor of Business (Honours), majoring in banking and
finance. He also holds a Master of Business Administration conferred by University of Melbourne.

                                                          170
Mr. Alan Gey is a member of the Association of Chartered Certified Accountants (ACCA) in the
United Kingdom.

Mr. Alan Gey received a total compensation of EUR 134.5 thousand for his services from Haikui in
the last full financial year 2011.

Based on his service agreement concluded with Haikui Singapore on 13 April 2012, which will
become effective upon the Commencement of Trading, Mr. Alan Gey is entitled to a monthly basic
salary of SGD 15,000 (EUR 8,915) for a period of 13 months a year plus a financial performance
bonus of 1.20% of Haikui’s profits before tax exceeding RMB 330,000,000 (EUR 40,029,000) in
2012 and RMB 420,000,000 (EUR 50,946,000) in 2013. The Supervisory Board may make
adjustments to the financial performance bonus taking into account the future prospects of Haikui
and multi-year assessments of the performance of Haikui. Beyond that, the Supervisory Board
may in its lawful discretion decide to pay a personal performance bonus to Mr. Alan Gey based on
the scope of responsibilities and personal performance of Mr. Alan Gey. Mr. Alan Gey’s salary is
subject to an annual review by the Company’s Supervisory Board and the Board of Directors of
Haikui Singapore. The agreement has a term of two years after the Commencement of Trading
and will be automatically extended for a further period of one year after expiry of its initial term,
however, only to the extent that Mr. Alan Gey continues to act as member of the Management
Board of the Company during such additional term.

At any time in the previous five years, Mr. Alan Gey has been a partner in the following
partnerships or a member of administrative, management or supervisory bodies of the following
companies:

Current directorships1

•     Haida Holdings/Director

•     FTZ Pte. Ltd./Director

__________

1)    At both companies listed Mr. Alan Gey receives no salary and is not employed.


Mr. Alan Gey has not performed other principal activities outside of Haikui which were significant
with respect to Haikui.

Shareholdings and options

As at the date of this Prospectus, Mr. Chen Zhenkui holds all shares in Haida Holdings and
therefore indirectly 56.57% of the shares in the Company.

As at the date of this Prospectus, Mr. Huang Zhenping holds all shares in Praise Ocean and
therefore indirectly 3.00% of the shares in the Company.

As at the date of this Prospectus, Mr. Alan Gey holds 0.20% of the shares in the Company.

Otherwise, the members of the Management Board do not hold any shares or options on shares in
the Company.

Conflicts of interest

Potential conflicts of interest may arise from the direct or indirect shareholdings of the
Management Board members in the Company (see: "Shareholder Structure" and "Corporate
Bodies and Management - Management Board - Shareholdings and Options") since they have
personal interests in the development of the value of their shares of the Company and their
respective stake. Further conflicts of interest may arise from the loans granted to Haikui by
Messrs. Chen Zhenkui and Huang Zhengping, of which, at 31 December 2011, amounted of EUR

                                                          171
1,818 thousand and EUR 78 thousand, respectively, were outstanding (see: "Related Party
Transactions – Summary of transactions with related parties – Loans and advances from directors
and shareholders"). The offering proceeds will, however, not be utilized for the repayment of these
loans. These interestes of the Management Board members may conflict with the interests of the
Company as well as their duties to the Company. Such duties include the duty to act in the best
interest of the Company and all its shareholders and other stakeholders, including employees.

Otherwise, there are no other conflicts or potential conflicts of interest between any of the duties
of the members of the Management Board to the Company and their private interests or other
duties.

Compensation in case of termination of office

The employment agreements of the members of the Management Board do not provide for any
specific payments in case of termination of office or employment. Therefore, no member of the
Management Board has a claim to any benefits upon termination of his office beyond the statutory
requirements in the PRC for termination of employment.

Supervisory Board

General provisions on the Supervisory Board

Pursuant to the Company’s Articles of Association the Supervisory Board is composed of three
members who are appointed by the General Shareholders’ Meeting. The term of a Supervisory
Board member may not exceed a period after annual General Shareholders’ Meeting that formally
approves the actions of the Supervisory Board members for the fourth financial year following the
commencement of the respective member’s term of office, not including the financial year in which
the respective term of office has commenced. Supervisory Board members may be re-elected.

Any Supervisory Board member may be removed by means of a resolution of the General
Shareholders’ Meeting (Hauptversammlung) with a simple majority of the votes cast by the
shareholders in the General Shareholders’ Meeting. In addition, according to the Articles of
Association (Satzung), any Supervisory Board member as well as any substitute member
(Ersatzmitglied) may resign for any reason by serving at least one month’s prior written notice to
the Chairman of the Supervisory Board and to the Management Board. With the consent of the
Chairman of the Supervisory Board, this notice period can be waived. The resignation may take
immediate effect if good cause is present.

When electing a member of the Supervisory Board, the General Shareholders’ Meeting may
simultaneously elect substitute members who become members of the Supervisory Board if the
appointed member resigns before the end of his or her term in office.

The Supervisory Board appoints a Chairman and a Deputy Chairman from among its members.
The Chairman or, if unable to attend, the Deputy Chairman, is obligated to convene and conduct
the meetings of the Supervisory Board.

According to the provisions of the Company’s Articles of Association, the Supervisory Board has a
quorum if half of its members, but at least three members, are present. Unless required otherwise
by law or by the Company’s Articles of Association, resolutions of the Supervisory Board are
passed by a simple majority of votes cast.

Rules of procedure for the Supervisory Board

On 14 March 2011, the Supervisory Board adopted rules of procedure for the Supervisory Board
(Geschäftsordnung für den Aufsichtsrat).

The members of the Supervisory Board

The current members of the Company’s Supervisory Board are set out below:

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     Name             Date of birth          Initially         Term expires in1                   Function
                                           Appointed on

Dr. Klaus Vieten     31 October 1947        31 May 2011               2015             Chairman of the Supervisory
                                                                                                 Board

Dr. Rainer Simon      7 March 1950          31 May 2011               2015                Deputy Chairman of the
                                                                                            Supervisory Board

Mr. Chan    Hock      5 March 1967         8 August 2010              2015              Member of the Supervisory
Eng                                                                                              Board
_____________

1)    Term of office expires after the General Shareholders’ Meeting that formally approves the actions of the members of
      the Supervisory Board of the financial year 2014 (Entlastung).


Dr. Klaus Vieten

Dr. Klaus Vieten, German, is currently legal advisor to a Canadian based oil and gas exploration
company, the CEP Central European Petroleum GmbH, Berlin, Germany. Prior to this, Dr. Vieten
was the Managing Director and shareholder of Pickenpack - Hussmann & Hahn Seafood GmbH
from 2003 to 2005, a company active in the business of deep frozen fish products such as fish
sticks, fillets of fish and fish menus. From 2000 to 2003, Dr. Vieten was the Managing Director and
shareholder of Hussmann & Hahn GmbH & Co., which was merged with Pickenpack
Tiefkühlgesesllschaft mbH in 2003. Before joining Hussmann & Hahn GmbH & Co. in 2000, Dr.
Vieten was member of the Executive Board of FROSTA AG, a producer of frozen foods (1993 -
1998). He was Chairman of the Board of Fisch Informationszentrum in Hamburg and Deputy
Chairman of Bundesverband der Deutschen Fischindustrie (the Federal Association of the Fish
Producing Industry in Germany). He graduated with a Second State Examination in law in Bavaria
in 1974 and Doctor of Laws in Wuerzburg in 1973.

At any time in the previous five years, Dr. Klaus Vieten has been a partner in the following
partnerships or a member of administrative, management or supervisory bodies of the following
companies:

Current directorships

•     CEP Central European Petroleum GmbH, Berlin, Germany/Supervisory Board Member

Past directorships

•     Pickenpack - Hussmann & Hahn Seafood GmbH/Managing Director

Dr. Klaus Vieten has not performed other principal activities outside of Haikui which were
significant with respect to Haikui.

Dr. Rainer Simon

Dr. Rainer Simon, German, studied Business Administration at the University of St. Gallen in
Switzerland and graduated in 1976 and obtained a doctorate degree from the University of St.
Gallen in 1979. He started his career at Continental AG, Hanover, Germany, where he served from
1979 until 1990, first as a Marketing Manager in Lyndhurst NJ. USA, later as Vice President
Marketing and Managing Director of Continental AG’s subsidiary, Vergölst GmbH. From 1991 until
1993, Dr. Simon was Managing Director of the Marketing and Sales division of Keiper-Recaro in
Kaiserslautern, Germany. In 1993, he returned to Continental AG, where he served as Senior Vice
President Europe Tires and Dealer ships until 1995. From 1995 until March 2002, Dr. Simon was
member of the Management Board of Friedrich Grohe AG, Hemer and from April 2002 until June
2004 Dr. Simon was member of Grohe AG’s Supervisory Board. From April 2002 until April 2005,
he was President and CEO of Sanitec International AG in Hamburg and Sanitec Corporation,


                                                         173
Helsinki, Finland. Since April 2005, Dr. Simon is the owner and Managing Director of BirchCourt
GmbH, a management and M&A consultancy.

At any time in the previous five years, Dr. Rainer Simon has been a partner in the following
partnerships or a member of administrative, management or supervisory bodies of the following
companies:

Current directorships

•     BirchCourt GmbH: Owner and member of the Management Board since 2005

•     Sara Holdings Ltd: Board member since 2008

•     Uponor OY: Board member since 2004

•     Joyou AG: Chairman of the Supervisory Board since 2010

•     Lecico Egypt S.A.E.: Board member since 2011

•     HSIL Limited: Board member since 2011

Dr. Rainer Simon has not performed other principal activities outside of Haikui which were
significant with respect to Haikui.

Mr. Chan Hock Eng

Mr. Chan Hock Eng, Singaporean, is currently the Managing Partner of Zana Capital Pte. Ltd.
("Zana Capital"), responsible for managing its investments in Asia. Zana Capital is a fund
management company, which manages, inter alia, Mega Bond, one of Haikui’s major shareholders
(see: "Shareholder Structure (Prior to the Offering and Upon Completion of the Offering)"). Mr.
Chan Hock Eng has more than 15 years of experience in business management and operations,
and in the implementation and management of joint ventures and direct investments. Prior to
Zana Capital, Mr. Chan Hock Eng was a Partner at CMIA. Before joining CMIA in December 2005,
he was the Executive Vice President of E-Smart Distribution Pte. Ltd. and later became the Chief
Operating Officer of Esmart Holdings Limited ("Esmart"), an electronics component company
listed on the Singapore Exchange ("SGX") in March 2003. He was responsible for the regional
operations of the Esmart group throughout the Asia-Pacific region, including their operations in
Shenzhen, Shanghai and Tianjin. Mr. Chan Hock Eng was part of the management team for
Esmart’s listing on the SGX in 2003. Prior to joining Esmart, Mr. Chan Hock Eng was the Area
Sales Manager in Zilog Inc. an American semiconductor company, from August 1995 to April 1997
and was responsible for its sales operations for South Asia. He graduated with a Bachelor of
Engineering (Electrical and Electronics) from the National University of Singapore in 1992.

At any time in the previous five years, Mr. Chan has been a partner in the following partnerships
or a member of administrative, management or supervisory bodies of the following companies:

Current directorships(1)

•     ARC Asia Offshore Fund Limited/Director

•     ARC Asia Opportunities Limited/Director

•     Asset Galaxy Limited/Director

•     Aurora Prime Pte. Ltd./Director

•     Dragon Point Limited/Director

•     Everswift Holdings Limited/Director

                                                174
•     Fast Track Resources Limited/Director

•     Greatdeal Holdings Limited/Director

•     Grand Entry Limited/Director

•     Haiyang Holdings Pte. Ltd./Director

•     Leap Forward Holdings Limited/Director

•     Mega Bond International Limited/Director

•     Right Treasure Limited/Director

•     Shengrui International Pte. Ltd./Director

•     Special Result Limited/Director

•     Stable International Limited/Director

•     Three Circles Pte. Ltd./Director

•     Top Mining Pte. Ltd./Director

•     Ying Li International Real Estate Limited/Director

•     Zana Asia Fund Limited (formerly Zana Asia Fund Pte. Ltd.)/Director

•     Zana Capital Pte. Ltd./Director

•     Zana Capital (Cayman) Limited/Director

•     Zana Capital (BVI) Limited/Director

•     Zana Capital (PRC) Limited (formerly: Code Sky Investments Limited)/Director

•     Zita Holdings Limited/Director

Past directorships

•     Angsana Advisor Inc/Director

•     China Haikui Pte. Ltd./Director

•     CMIA Capital Partners Pte. Ltd./Director

•     Donghaian Pte. Ltd. (Striking-Off)/Director

•     Haida Holdings Pte. Ltd./Director

•     Noble High Limited (dissolved)/Director

•     Sino Run Group Limited/Director

•     Success Point Holdings Limited/Director

•     Total Perfect Investments Ltd. (dissolved)/Director

•     FTZ Pte Ltd/Director


                                                  175
Mr. Chan Hock Eng has not performed other principal activities outside of Haikui which were
significant with respect to Haikui.

___________

(1)    Mr. Chan Hock Eng receives annual director's fees from Ying Li International Real Estate Limited. For all other
       companies listed, Mr. Chan Hock Eng only receives salary from Zana Capital Pte Ltd., which is the private equity fund
       management company that Mr. Chan Hock Eng is full time employed with. As regards the other companies listed, Mr.
       Chan Hock Eng acts as director but does not receive any salary from those companies.


Shareholdings and options of the Supervisory Board

None of the members of the Supervisory Board directly or indirectly holds shares or options on
shares in the Company.

Compensation of Supervisory Board members

The general shareholders' meeting of the Company on 11 April 2012 determined the remuneration
of the Supervisory Board members as follows:

                                  Function                                           Annual Remuneration in EUR

Chairman of the Supervisory Board                                                                  60,000
Deputy Chairman of the Supervisory Board                                                           45,000
Ordinary member of the Supervisory Board                                                           30,000



In addition to their annual remuneration, each member of the Company’s Supervisory Board
receives an attendance fee of EUR 1,500 per Supervisory Board meeting in the country of his
residence, and of EUR 4,000 per Supervisory Board meeting outside the country of his residence.

Every member of the Supervisory Board is entitled to reimbursement for expenses incurred for the
purpose of his office.

Conflicts of interest

Mr. Chan Hock Eng is Managing Partner of Zana Capital, a fund management company which
manages, inter alia, Mega Bond, one of Haikui’s major shareholders. Mr. Chan Hock Eng’s interests
to increase the value of Mega Bond’s investment in the Company may therefore conflict with
Mr. Chan Hock Eng’s duties as a Supervisory Board member of the Company, which oblige him to
always act in the best interest of the Company and all of its shareholders and other stakeholders,
including employees.

Otherwise, there are no other conflicts or potential conflicts of interest between any of the duties
of the members of the Supervisory Board to the Company and their private interests or other
duties.

Compensation in case of termination of office

No member of the Supervisory Board has a claim to any benefits upon termination of his office.

Certain information on the members of the Supervisory Board and the Management
Board

The Company’s CEO, Mr. Chen Zhenkui, and the Company’s COO, Mr. Huang Zhenping, are
brothers. Otherwise, there are no family relationships between the members of the Management
Board and Supervisory Board amongst each other.

Over the last five years, no member of the Company’s administrative, management or supervisory
bodies, in particular, no member of the Management Board and Supervisory Board:


                                                          176
•     was convicted in relation to fraudulent offences;

•     was associated with any bankruptcies, receiverships or liquidations in his or her capacity as a
      member of administrative, management, or supervisory bodies, or senior manager who is
      relevant to establishing that an issuer has the appropriate expertise and experience for the
      management of the issuer’s business; was publicly incriminated and/or sanctioned by
      statutory or regulatory authorities (including designated professional bodies);

•     has been disqualified by a court from acting as a member of the administrative,
      management or supervisory bodies of an issuer or from acting in the management or
      conduct of the affairs of any issuer.

At present, the Company has not granted sureties or loans to members of the Management Board
and the Supervisory Board nor has it assumed any guarantees for them.

The Company has entered into into a directors’ and officers’ insurance covering the members of
the Management Board and the members of the Supervisory Board in its own name (see:
"Business – Insurance").

Members of the Management Board and the Supervisory Board may be contacted at the
Company’s business address at Haikui Seafood AG, c/o Ashurst LLP, OpernTurm, Bockenheimer
Landstraße 2-4, 60306 Frankfurt am Main, Germany.

General shareholders’ meeting

General Shareholders’ Meetings, including the Annual General Meeting (Jahreshauptversammlung)
and Extraordinary Shareholders’ Meetings (außerordentliche Hauptversammlung), may be held at
the Company’s registered offices or at the seat of a German stock exchange. The General
Shareholders’ Meeting must be convened at least 30 days before the end of the day on which the
shareholders must register their attendance at the meeting. Shareholders of the Company who
have registered for the General Shareholders’ Meeting in due time and have proven their eligibility
to attend are entitled to attend and exercise their voting rights in the General Shareholders’
Meeting. Registration must be received by the Management Board at the Company’s registered
offices, or at another location announced in the convocation, in the form of a letter, telex, and fax
or by other electronic means to be specified by the Company in greater detail in the invitation, no
later than the seventh calendar day before the meeting. The shareholders document their
eligibility to participate in the General Shareholders’ Meeting by certification of their shareholding,
prepared in text format by the depository institution (Section 126b of the German Civil Code) in
German and referring to the start of the 21st day before the day of the General Shareholders’
Meeting. This certification must be received at the place announced in the invitation at the
Company’s registered offices by no later than seven days before the day of the annual General
Shareholders’ Meeting. Further details concerning registration, proof of eligibility for participation
and the issue of the admission tickets must be announced in the convocation. Each ordinary no par
value bearer share confers one vote at the General Shareholders’ Meeting. Voting rights may be
exercised by proxy.

Unless otherwise provided by the Company’s Articles of Association or law, the resolutions of the
General Shareholders Meeting are adopted by a simple majority of the votes cast and, insofar as
the law requires a majority of the share capital as well as a voting majority, by a simple majority
of the share capital represented at the time the resolution is adopted.

According to the German Stock Corporation Act, certain resolutions of fundamental importance
require a vote of no less than three-quarters of the registered capital represented at the meeting.
Such resolutions include:

•     amendments to the Company’s Articles of Association;

•     capital increases;


                                                 177
•    capital reductions;

•    the creation or amendment of authorized or conditional capital;

•    the    transfer  of  the   Company’s     entire   assets     (Übertragung   des    ganzen
     Gesellschaftsvermögens) and any reorganizations as set forth in the German Transformation
     Act (Umwandlungsgesetz) such as mergers (Verschmelzungen), spin-offs (Spaltungen),
     transfer of the company’s assets (Vermögensübertragungen) and type-changing
     transformations (Formwechsel);

•    the conclusion of agreements establishing contractual corporate groups (such as domination
     and profit-and-loss-transfer agreements); and

•    the dissolution of the Company.

The convening of General Shareholders’ Meetings may be initiated by the Management Board, the
Supervisory Board or, under certain circumstances, by shareholders holding an aggregate of 5% of
the registered share capital. The Supervisory Board must call a General Shareholders’ Meeting
whenever the interests of the Company require. The Annual General Shareholders’ Meeting must
be held during the first eight months of each financial year.

According to the Stock Corporations Act, the company must publish the invitation to the General
Shareholders’ Meeting at least 30 days before the day of the meeting or 30 days before notice of
attendance has to be given in the electronic version of the Federal Gazette (elektronischer
Bundesanzeiger). To participate in the General Shareholders’ Meetings, shareholders must give
due notice of their attendance. The deadline for giving the notice of attendance for the General
Shareholders’ Meeting is published with the invitation but must expire earlier than 7 days prior to
the General Shareholders’ Meeting.

Corporate governance

The German Corporate Governance Code in its current version of 26 May 2010 (the "Code")
contains recommendations and suggestions for managing and supervising German companies
listed on a stock exchange. The Code contains provisions relating to shareholders and the General
Shareholders' Meetings, the Management Board, the Supervisory Board, to transparency,
accounting policies and auditing. There is no obligation to comply with the recommendations and
suggestions of the Code. However, the German Stock Corporations Act in Section 161 requires the
Management Board and Supervisory Board of listed companies to make an annual declaration to
the effect whether the company follows the recommendations of the Code or which of the
recommendations were or will not be followed, and why they were or will not be followed
(Entsprechenserklärung, the "Declaration of Compliance"). The Declaration of Compliance must
be published on the company’s website.

The Company has not intentionally complied with the recommendations and suggestions contained
in the Code yet because it has so far not been listed on any stock exchange and therefore the
Code did not apply to the Company.

After the Offering and admission to trading of the Company’s shares on the Regulated Market of
the Frankfurt Stock Exchange, the Company will annually issue and publish a Declaration of
Compliance, and make it continuously available on its website. The Management Board and
Supervisory Board of the Company identify with the goals of the Code to foster responsible and
transparent corporate management and control, oriented to a sustained increase in company
value. The Management Board and Supervisory Board will be largely following the
recommendations and suggestions of the Code. Details will be agreed upon between the
Management Board and the Supervisory Board.




                                               178
                                 RELATED PARTY TRANSACTIONS

This section describes the material transactions between Haikui and related parties concluded in
the period between 1 January 2009 and the date of this Prospectus. Related parties to the
Company include members of the Management Board (Vorstand) and the Supervisory Board
(Aufsichtsrat), including their close family members and companies on which members of the
Management Board or Supervisory Board of the Company or their family members may exercise
considerable influence or in which they hold a substantial amount of the voting rights. In addition,
related parties include companies in which Haikui holds an investment that enables Haikui to
exercise considerable influence over the business policies of that company in which it holds such
investment. Finally, also the major shareholders of Haikui, including their affiliates are related
parties.

The following related parties have concluded material transactions with Haikui within the periods
under review:

Related Party (Natural Persons)                              Relation to Haikui

Mr. Chen Zhenkui                                             CEO

Mr. Huang Zhenping                                           COO and brother of Mr. Chen Zhenkui



Related Party (Legal Entities)       Business Area           Relation to Haikui

Mega Bond International    Limited   Investment holding      Shareholder holding 35.43% of the Company’s
("Mega Bond")                                                shares at the date of this Prospectus

Everswift     Holdings     Limited   Investment holding      Shareholder holding 1.80% of the Company’s
("Everswift")                                                shares at the date of this Prospectus

Praise Ocean International Limited   Investment holding      Shareholder holding 3.00% of the Company’s
("Praise Ocean")                                             shares at the date of this Prospectus; 100% of
                                                             the shares are held by Mr. Huang Zhenping

FTZ Pte. Ltd.                        Investment holding      97.00% of the shares are held by Haida
                                                             Holdings; 40.00% of the shares were held by
                                                             Everswift until February 2011



Summary of transactions with related parties

Loans and advances from directors and shareholders

The following loans/advances from directors/shareholders granted for working capital purposes
were outstanding as at 31 December 2009, 31 December 2010 and 31 December 2011,
respectively:

                                                                   31 December
                                            2009                       2010                 2011
                                            EUR                        EUR                  EUR
                                          thousand                   thousand             thousand
Advances from:
- Mega Bond                                            4.0                        -                      -
Loans from:
- Mr. Chen Zhenkui                                1,138.0                    1,593                   1,818
- Mr. Huang Zhenping                                 49.0                       69                      78



The advances granted by Mega Bond served for the purpose of setting up bank accounts (SGD and
USD) for Haikui Singapore. The advances are unsecured, interest free and repayable on demand.


                                                 179
The loans from Mr. Chen Zhenkui and Mr. Huang Zhenping were obtained by Haikui for working
capital purposes based on loan agreements dated 13 March 2007 and 27 September 2007,
respectively. These loans were interest-free and repayable falling five years from the date of the
respective loan agreements.

There have been no material changes with respect to the outstanding loans and advances
mentioned above up to the date of this Prospectus.




                                               180
                                     TAXATION IN GERMANY

The following section describes certain material German tax principles that may become relevant
when acquiring, holding or transferring shares. This section is not a comprehensive or complete
description of all German tax aspects that may be relevant for shareholders. It is based on the
German tax laws applicable as of the date of this Prospectus and on the provisions of double
taxation treaties entered into between Germany and other countries as of this date. In both areas
the law may change, possibly also with retroactive effect.

Potential purchasers of the Company’s shares should consult their tax advisors with respect to the
tax consequences of acquiring, holding and transferring shares and with respect to the procedure
to be complied with to obtain a refund of German withholding tax paid (Kapitalertragsteuer). The
specific tax situation of each shareholder can only be addressed adequately by means of individual
tax advice.

Taxation of the Company

In Germany, corporations are generally subject to corporate income tax at a rate of presently 15%
plus a 5.5% solidarity surcharge (Solidaritätszuschlag) thereon (in total 15.825%). In addition,
German corporations are subject to trade tax (Gewerbesteuer) with their income from permanent
establishments in Germany subject to certain adjustments for trade tax purposes, the trade
earnings (Gewerbeertrag). The trade tax rate depends on the municipalities in which the
corporation maintains permanent establishments. As a general rule, the effective trade tax rate
varies between 12% and 18% of the trade earnings depending in each case on the trade tax rate
of the relevant municipality.

Interest expenses are only deductible in the event the Company is in compliance with the so-called
interest barrier (Zinsschranke). The interest barrier restricts the deductibility of interest expenses
exceeding the interest income of the relevant financial year ("net interest expenses") to 30% of
the earnings before interest, taxes, depreciation and amortisation (EBITDA) determined for tax
purposes for corporate income tax and trade tax purposes. The non-deductible part of the interest
expenses can be carried forward to future financial years and might reduce the taxable profit of
the Company in the future if the interest expenses in such period are deductible under the interest
barrier. There is a risk that the non-deductible part of interest expenses might be forfeited, e.g. in
case of restructurings or in case of the termination of the business. The interest barrier will not
apply if the net interest expenses areless than EUR 3 million or in the event the Company complies
with the so-called "escape clause", provided there is no harmful shareholder debt financing. The
escape clause stipulates the complete deductibility of interest expense in the event that the
Company’s equity ratio is not lower than that of the group. For this purpose the equity ratios of the
financial statements at the end of the preceding business year end are relevant. Only in case that
there is no harmful shareholder debt financing, the escape clause will be applicable. A harmful
shareholder debt financing is existing if the shareholder (holding directly or indirectly more than
25% of the shares) or any related party hereto or any third party who has a right of recourse
against the shareholder or a related party hereto receives interest exceeding 10% of the negative
interest balance (difference between interest income and interest expenses) from the respective
corporation or from another affiliated company.

Dividend income that the Company receives from corporations is generally exempt from corporate
income tax. However, 5% of the tax exempt dividend income are deemed to be a non-deductible
business expense for corporate income tax purposes, and as a result are subject to corporate
income tax (plus solidarity surcharge).

Dividend income of the Company derived from its shares in Haikui Singapore will in principle be
subject to trade tax. However, such dividend income of the Company will be exempt from trade
tax but for 5%, if specific preconditions are fulfilled (Section 9 No. 7 of the Trade Tax Act):

In case of a foreign subsidiary, dividend income received from such subsidiary is exempt from
trade tax if (i) the Company owns a participation of at least 15% (or 10% in case of a participation

                                                181
to which the EU Parent/Subsidiary Directive (90/435/EEC of 23 July 1990, as amended) applies) in
such subsidiary continuously from the beginning of the assessment period for trade tax purposes
(Erhebungszeitraum) and the subsidiary exclusively or almost exclusively (1) generates its gross
profits from an active business or trade within the meaning of Sec. 8 (1) Nos. 1-6 Foreign Tax Act
("active activities") and/or (2) from the participation of at least 25% in a subsidiary (second-tier-
subsidiary) if such participation has been owned for at least 12 months prior to the relevant date
and the subsidiary proves that the second-tier-subsidiary either (a) has its effective place of
management and its corporate seat in the same jurisdiction as the subsidiary and generates its
gross profits from active activities or (b) the subsidiary holds the participation in the second-tier-
subsidiary in an economic context with own active activities and the second-tier subsidiary
generates its gross profits exclusively or almost exclusively from active activites. The same applies
with regard to dividend income which the Company indirectly receives from a foreign second-tier-
subsidiary if the Company indirectly holds a participation of at least 15% in such second-tier-
subsidiary, subject to further requirements.

Corporate income tax and trade tax losses incurred by the Company in one year may be carried
back to the immediately preceding assessment period up to an amount of EUR 511,500. Any
remaining losses may only be offset within certain restrictions against profits from future years. Up
to an amount of EUR 1 million taxable profits may be offset against existing tax loss carry forwards
without limitation. Taxable profits in excess of EUR 1 million may be offset against existing tax loss
carry forwards for corporate income and trade tax purposes only by 60% (so-called "minimum
taxation"). Unused tax loss carry forwards may in principle be carried forward indefinitely. Loss
carry forwards will, however, be forfeited in case of certain harmful share transfers.

Taxation of shareholders

Shareholders are subject to tax in particular in connection with the holding of shares (taxation of
dividends), the disposal of shares (taxation of capital gains) and the gratuitous transfer of shares
(inheritance and gift tax).

Taxation of dividends

Withholding tax

Generally, the Company must withhold tax on its dividend distributions at a rate of 25% plus a
5.5% solidarity surcharge thereon (in total, 26.37%) and is thus responsible for withholding
amounts corresponding to such taxation at source.

Such withholding tax is levied and withheld irrespective of whether and to what extent the
dividend distribution is taxable at the level of the shareholder and whether the shareholder resides
inside or outside Germany. Certain exceptions may apply to corporations in another EU Member
State to which the EU Parent/Subsidiary Directive (90/435/EEC of 23 July 1990, as amended)
applies. A partial exemption may also be available under a respective Double Taxation Treaty. In
these cases the restrictive preconditions according to Section 50d (3) Income Tax Act have to be
fulfilled. Application forms may be obtained from the German Federal Tax Office
(Bundeszentralamt für Steuern), An der Kuppe 1, 53225 Bonn, Germany (www.bzst.bund.de) as
well as from German embassies and consulates.

Dividends to a corporation domiciled outside of Germany are subject to a reduced withholding tax
(irrespective of any double taxation treaties) in the event the shares do not constitute an asset of
a permanent establishment in Germany nor an asset for which a permanent representative has
been appointed in Germany. In this case, 2/5 of the withholding tax will be refunded upon
application. The refund requires that the corporation fulfils the preconditions of Section 50 d (3)
Income Tax Act. Refund application forms may be obtained from the German Federal Tax Office,
An der Kuppe 1, 53225 Bonn, Germany (www.bzst.bund.de) as well as from German embassies
and consulates. A further reduction or refund under an applicable double taxation treaty is
possible.



                                                182
For shareholders resident in Germany (i.e., shareholders whose residence, habitual abode,
management, or domicile is located in Germany) holding their shares as business assets as well as
for shareholders residing outside Germany (foreign shareholders) holding their shares in a
permanent establishment or a fixed base in Germany, or as assets for which a permanent
representative has been appointed in Germany, the tax withheld is credited against the
shareholders’ personal income tax or corporate income tax liability. Any tax withheld in excess of
the shareholders’ personal tax liability is refunded. The same principles apply to the solidarity
surcharge.

Taxation of dividend income of investors resident in Germany holding their shares as
private assets

For individual shareholders resident in Germany holding their shares as private assets dividends
are subject to the final flat tax (Abgeltungsteuer). Under this regime dividend income of private
investors will be taxed at the principal final flat tax rate of 25% plus a 5.5% solidarity surcharge
thereon (aggregate tax burden: 26.375%) and church tax if applicable (which is not addressed
further in this summary). Except for an annual lump sum allowance (Sparerpauschbetrag) of up to
EUR 801 (up to EUR 1,602 for married couples filing jointly), private investors will not be entitled
to deduct expenses incurred in connection with the capital investments from their dividend income.
Inter alia, if the flat tax results in a higher tax burden as opposed to the private investor’s
individual tax rate the investor may opt for taxation at his individual tax rate. The withholding tax
will be credited against the income tax. Private investors are not entitled to deduct expenses
incurred in connection with the capital investments from their income except of the annual lump
sum allowance even if they opt for taxation at their individual tax rate. This option may be
exercised only for all capital income from capital investments received in the relevant assessment
period uniformly and married couples filing jointly may only jointly exercise the option.

Taxation of dividend income of investors resident in Germany holding their shares as
business assets

If shares are held as business assets of a shareholder, the taxation depends on whether the
shareholder is a corporation, a sole proprietor, or a partnership (Mitunternehmerschaft):

Corporations. Dividend distributions to corporate shareholders are generally exempt from
corporate income tax. However, 5% of the tax-exempt dividend income is deemed to be a non-
deductible business expense for tax purposes and is therefore subject to corporate income tax
(plus solidarity surcharge) and trade tax. Business expenses actually incurred in connection with
the shares are entirely tax deductible. 95% of dividend income must be added back when
determining the trade taxable income and is therefore subject to trade tax unless the investor
holds at least 15% of the share capital of the Company at the beginning of the relevant
assessment period.

Sole Proprietors. For sole proprietors holding their shares as business assets, generally 60% of
the dividend distributions are taxable. Correspondingly, 60% of the business expenses related to
the dividend income are deductible for tax purposes (subject to any other restrictions on
deductibility). In addition, dividends are entirely subject to trade tax if the shares are held as a
business asset of a permanent establishment in Germany and if the shareholder does not hold at
least 15% of the share capital of the Company at the beginning of the relevant assessment period.
The trade tax levied - depending on the municipal trade tax rate and the individual tax situation -
is partly or entirely credited against the shareholder’s personal income tax liability.

Partnerships. If shares are held by a partnership, personal income tax or corporate income tax is
levied only at the level of the partners. If a partner is subject to corporate income tax, dividends
are generally tax-exempt to 95% (see: "Taxation of Shareholders - Taxation of Dividend Income
by Investors Resident in Germany Holding their shares as Business Assets - Corporations"). If the
partner is subject to personal income tax, 60% of the dividends are taxable and 60% of the
business expenses related to dividend income are deductible (see: "Taxation of Shareholders -
Taxation of Dividend Income by Investors Resident in Germany Holding their shares as Business

                                                183
Assets - Sole Proprietors"). At the level of a partnership which is liable to trade tax, the entire
dividends are subject to trade tax if the partnership does not hold at least 15% of the share capital
of the Company at the beginning of the relevant assessment period. However, depending on the
applicable municipal trade tax rate and individual circumstances, the trade tax paid at the level of
a partnership may partly or entirely be credited against the personal income tax liability of the
partners if the partners are natural persons.

If the partnership holds 15% of the share capital of the Company at the beginning of the relevant
assessment period, only 5% of the dividends are subject to trade tax in the event the partners are
corporations or the dividends are trade tax exempt in the event the partners are individuals.

Taxation of dividend income of investors not resident in Germany

For foreign shareholders who do not hold their shares in a permanent establishment or a fixed
base in Germany, or as an asset for which a permanent representative has been appointed in
Germany, the German tax liability is, in principle, satisfied upon deduction of withholding tax
(possibly reduced by way of a refund under a double taxation treaty or EU Parent/Subsidiary
Directive (90/435/EEC of 23 July 1990, as amended) or 2/5 of the withholding tax may be
refunded in some cases.)

However, shareholders who hold their shares in a permanent establishment or a fixed base in
Germany, or as business assets for which a permanent representative has been appointed in
Germany, are subject to the same rules described above for shareholders resident in Germany.

Taxation of capital gains

Taxation of capital gains of investors resident in Germany holding their shares as private
assets

Any gains from the sale or redemption of the shares will be subject to a final flat tax
(Abgeltungsteuer) of 25% plus a solidarity surcharge of 5.5% thereon resulting in an aggregate
tax burden of 26.375%. Except for an annual lump sum allowance (Sparerpauschbetrag) of up to
EUR 801 (up to EUR 1,602 for married couples filing jointly) private investors will not be entitled to
deduct expenses incurred in connection with the capital investments from their capital gain. If the
flat tax results in a higher tax burden as opposed to the private investor’s individual tax rate the
investor may opt for taxation at his individual tax rate. Private investors are not entitled to deduct
expenses incurred in connection with the capital investments from their income except for the
annual lump sum allowance even if they opt for taxation at their individual tax rate. The option
may only be exercised for all capital gains and income from capital investments received in the
relevant assessment period uniformly and married couples filing jointly may only exercise the
option jointly.

Losses from the disposition of the shares may only be offset against other capital gains resulting
from the disposition of shares in the Company and in other stock corporations. Offsetting of overall
losses with other income (e.g. business or rental income) and other capital income is not possible.
Such losses are to be carried forward and to be offset against positive capital gains deriving from
the sale of shares in future years.

The general flat tax will not apply if the seller of the shares or, in case of gratuitous transfer, its
legal predecessor has held, directly or indirectly, at least 1% of the share capital of the Company
at any time during the five years prior to the disposal. 60% of the capital gains are taxed upon this
disposal. Correspondingly, only 60% of related expenses are deductible for tax purposes.

Capital gains are principally subject to withholding tax of 25% plus 5.5% solidarity surcharge
thereon (in total 26.375%) in the event a German credit or financial institution (including a
German branch of a foreign credit or financial institution) or a German securities trading company
or a German securities trading bank (all institutions mentioned before together "paying agent")
stores or administrates or carries out the sale of the shares and pays or credits the capital income.


                                                 184
If data related to the acquisition is not reported in connection with a transfer between depository
accounts (Depotwechsel), the withholding tax is calculated on the basis of 30% of the proceeds
from the disposal of the shares.

Taxation of capital gains of investors resident in Germany holding their shares as
business assets

If shares are held as business assets of a shareholder, the taxation of capital gains realized upon
disposal depends on whether the shareholder is a corporation, a sole proprietor, or a partnership:

Corporations. Capital gains realized by a corporate shareholder upon disposal of shares are
generally exempt from corporate income tax and trade tax. Capital gains for this purpose is the
amount by which the selling price or the equivalent value after deduction of selling costs exceeds
the tax base at the time of disposal. However, 5% of the capital gain is deemed to be a non-
deductible business expense and is therefore subject to corporate income and trade tax. Losses
incurred upon the disposal of shares or other impairments of the shares’ value are not tax
deductible. A reduction of profit is also defined as any losses incurred in connection with a loan or
security in the event the loan or the security is granted by a shareholder or by a related person
thereto or by a third person with the right of recourse against the before mentioned persons and
the shareholder holds directly or indirectly more than 25% of the share capital of the Company.

Sole Proprietors. If the shares are held by sole proprietors, 60% of the capital gains realized
upon disposal are subject to income tax and solidarity surcharge. Correspondingly, 60% of the
business expenses related to such capital gains and 60% of any losses incurred upon disposal of
shares are tax deductible. In addition, 60% of the capital gains are subject to trade tax if the sole
proprietor is subject to trade tax. However, trade tax is partly or entirely credited against the
shareholder’s personal income tax liability depending on the applicable municipal trade tax rate
and individual circumstances.

Partnerships. If the shareholder is a partnership, taxation depends on whether the partners are
subject to personal income tax or corporate income tax: If the partners are subject to corporate
income tax, any capital gains are generally tax exempt in amount of 95% (see: "Taxation of
Shareholders - Taxation of Capital Gains of Investors Resident in Germany Holding Their shares as
Business Assets - Corporations"). If the partners are subject to personal income tax, 60% of the
capital gains are taxable (see: "Taxation of Shareholders - Taxation of Capital Gains of Investors
Resident in Germany Holding Their shares as Business Assets - Sole Proprietors"). For information
on the deductibility of business expenses relating to capital gains and disposal losses for partners
who are subject to corporate income tax see also "Taxation of Shareholders - Taxation of Capital
Gains of Investors Resident in Germany Holding Their Shares as Business Assets - Corporations"
and see above "Taxation of Shareholders - Taxation of Capital Gains of Investors Resident in
Germany Holding Their Shares as Business Assets - Sole Proprietors" for information with respect
to partners who are subject to personal income tax. In addition, 60% of the capital gains are
subject to trade tax at the level of a partnership if the partnership is liable to trade tax and the
partners are individuals and 5% of the capital gains are subject to trade tax if partners are
corporations. However, the trade tax paid at the level of a partnership may partly or entirely be
credited - depending on the applicable municipal trade tax rate and individual circumstances -
against the personal income tax liability of the partners who are individuals.

Special rules for banks, financial services institutions, financial enterprises, life and health
insurance companies, and pension funds, are described below.

For capital gains of a corporation, no withholding tax is assessed. This applies also to capital gains
attributable to business assets of a domestic business if additional documentation requirements
are met.




                                                185
Taxation of capital gains of shareholders resident outside Germany

Capital gains realized upon disposal of shares by a shareholder resident outside Germany are only
subject to German income tax (plus solidarity surcharge) in the event (i) the shares are held in a
permanent establishment or through a fixed base in Germany, or held as assets for which a
permanent representative has been appointed in Germany or (ii) the Greenshoe Shareholders or,
in case of a gratuitous transfer, its legal predecessor has held, directly or indirectly, at least 1% of
the share capital of the Company at any time during the five year period prior to the disposal. In
this case:

•     5% of the capital gain is subject to corporate income tax and solidarity surcharge, if the
      shareholder is a corporation; and

•     60% of the capital gain is taxed in all other cases.

However, some of the German double taxation treaties provide for a complete exemption from
German taxation (except in case (i)) in such cases and assign the right to tax to the shareholder’s
State of residence. In this case, no withholding tax is assessed upon the sale provided sufficient
proof of the foreign tax status is given. Otherwise, withholding tax of 25% plus 5.5% solidarity
surcharge thereon (in total 26.375%) may be levied in the event a German credit or financial
institution (including a German branch of a foreign credit or financial institution) or a German
securities trading company or a German securities trading bank (all institutions mentioned before
together "paying agent") stores or administrates or carries out the sale of the shares and pays or
credits the capital income. In these cases, for foreign corporations, withholding tax may be
refunded by 2/5 if certain preconditions are met.

Capital gains realized upon disposal of shares held in a permanent establishment or through a
fixed base in Germany, or held as assets for which a permanent representative has been appointed
in Germany, are subject to the same rules as described above for shareholders resident in
Germany.

Special rules for banks, financial services institutions, financial institutions, life and
health insurance companies, and pension funds

To the extent banks and financial services institutions hold shares that are attributable to their
trading book pursuant to Section 1 a of the German Banking Act (Kreditwesengesetz) neither the
standard tax exemption for corporations nor the part-income system applies to dividend income
received or to capital gains or losses realized upon the disposal of shares, i.e. dividend income and
capital gains are fully subject to corporate income tax or personal income tax and, if applicable, to
trade tax. The same applies to shares that were acquired by financial institutions within the
meaning of the German Banking Act in order to realize short-term proprietary trading gains (this
also applies to banks, financial services institutions and financial institutions domiciled in another
Member State of the European Union or another contracting party to the EEA Agreement). The
standard tax exemption for corporations neither applies to dividends received nor to capital gains
or losses if the shares are attributable to the capital investments (Kapitalanlagen) of life and
health insurance companies or pension funds. The aforementioned exceptions do not apply to
dividends within the scope of the EU Parent/Subsidiary Directive (90/435/EEC of 23 July 1990, as
amended).

Inheritance and gift tax

The transfer of shares by way of gift or succession is, in principle, subject to German inheritance
and gift tax in particular if one of the following criteria is met:

(i)   The testator, donor, heir, donee, or any other beneficiary has his or her residence or habitual
      abode, registered domicile or place of management in Germany at the time of the transfer or
      is a German Citizen who has not stayed abroad for more than five years without having a
      residence in Germany;


                                                 186
(ii)    Irrespective of these personal circumstances, the shares are held as business assets for
        which a permanent establishment is maintained or a permanent representative is appointed
        in Germany; or

(iii)   At the time of succession or donation, the testator or donor held, either alone or with other
        closely related persons, directly or indirectly, at least 10% of the registered share capital of
        the Company.

The few double taxation treaties on inheritance and gift tax which Germany has entered into
generally provide that German inheritance or gift tax is levied only in case (i) and, with certain
restrictions, in case (ii). Special provisions apply to certain German expatriates and former
German citizens.

Other taxes

No German capital transfer tax,      value-added tax, stamp duty, or similar tax is levied on the
acquisition, sale, or other forms    of transferring shares. However, an entrepreneur may opt for
value-added tax being levied on      a transaction that is normally tax-exempt if the transaction is
executed for the enterprise of       another entrepreneur. Net wealth tax (Vermögenssteuer) is
currently not levied in Germany.




                                                  187
                     TAXATION IN THE GRAND DUCHY OF LUXEMBOURG

General

The following information is of a general nature only and is based on the Company’s understanding
of certain aspects of the laws and practice in force in Luxembourg as of the date of this
Prospectus. It does not purport to be a comprehensive description of all of the tax considerations
that might be relevant to an investment decision. It is included herein solely for preliminary
information purposes. It is not intended to be, nor should it be construed to be, legal or tax
advice. It is a description of the essential material Luxembourg tax consequences with respect to
the shares and may not include tax considerations that arise from rules of general application or
that are generally assumed to be known to shareholders. This summary is based on the laws in
force in Luxembourg on the date of this Prospectus and is subject to any change in law that may
take effect after such date. Prospective shareholders should consult their professional advisors
with respect to particular circumstances, the effects of state, local or foreign laws to which they
may be subject and as to their tax position.

Please be aware that the residence concept used under the respective headings applies for
Luxembourg income tax assessment purposes only. Any reference in the present section to a tax,
duty, levy impost or other charge or withholding of a similar nature refers to Luxembourg tax law
and/or concepts only. Also, please note that a reference to Luxembourg income tax encompasses
corporate income tax (impôt sur le revenu des collectivités), municipal business tax (impôt
commercial communal), a solidarity surcharge (contribution au fonds pour l’emploi), as well as
personal income tax (impôt sur le revenu) generally. Shareholders may further be subject to net
worth tax (impôt sur la fortune) as well as other duties, levies or taxes. Corporate income tax,
municipal business tax as well as the solidarity surcharge invariably apply to most corporate
taxpayers’ resident of Luxembourg for tax purposes. Individual taxpayers are generally subject to
personal income tax and the solidarity surcharge. Under certain circumstances, where an
individual taxpayer acts in the course of the management of a professional or business
undertaking, municipal business tax may apply as well.

Withholding tax

Dividend payments made to the shareholders by the Company, as well as liquidation proceeds and
capital gains derived by shareholders from the shares of the Company, are not subject to a
withholding tax in Luxembourg.

Taxation of the shareholders

Luxembourg tax residency of the shareholders

A shareholder will not become resident, nor be deemed to be resident, in Luxembourg by reason
only of the holding and/or disposing of the shares or the execution, performance or enforcement of
his/her rights thereunder.

Income tax

Luxembourg resident individuals

Dividends and other payments derived from the shares by resident individual shareholders, who
act in the course of the management of either their private wealth or their professional/business
activity, are subject to income tax at the ordinary progressive rates. A tax credit may generally be
granted for German withholding tax levied. Under current Luxembourg tax law, 50% of the gross
amount of dividends received by resident individual shareholders from the Company is exempt.

Capital gains realized on the disposal of the shares by resident individual shareholders, who act in
the course of the management of their private wealth, are not subject to income tax, unless said
capital gains qualify either as speculative gains or as gains on a substantial participation. Capital
gains are deemed to be speculative and are subject to income tax at ordinary rates if the shares
                                                188
are disposed of within 6 months after their acquisition or if their disposal precedes their
acquisition. A participation is deemed to be substantial where a resident individual shareholder
holds or has held, either alone or together with his spouse or partner and/or minor children,
directly or indirectly at any time within the 5 years preceding the disposal, more than 10% of the
share capital of the company whose shares are being disposed of. A shareholder is also deemed to
alienate a substantial participation if he acquired free of charge, within the 5 years preceding the
transfer, a participation that was constituting a substantial participation in the hands of the
alienator (or the alienators in case of successive transfers free of charge within the same 5-year
period). Capital gains realized on a substantial participation more than 6 months after the
acquisition thereof are taxed according to the half-global rate method, (i.e. the average rate
applicable to the total income is calculated according to progressive income tax rates and half of
the average rate is applied to the capital gains realized on the substantial participation). A disposal
may include a sale, an exchange, a contribution or any other kind of alienation of the participation.

Capital gains realized on the disposal of the shares by resident individual shareholders, who act in
the course of their professional/business activity, are subject to income tax at ordinary rates.
Taxable gains are determined as being the difference between the price for which the shares have
been disposed of and the lower of their cost or book value.

Luxembourg corporate residents

Dividends and other payments derived from the shares by Luxembourg resident fully-taxable
companies are subject to income taxes, unless the conditions of the participation exemption
regime, as described below, are satisfied. A tax credit may in some cases be granted for German
withholding tax levied. If the conditions of the participation exemption regime are not met, 50% of
the gross amount of dividends received by resident shareholders from the Company is exempt.

Under the participation exemption regime, dividends derived from the shares may be exempt from
income tax if (i) the shareholder is a Luxembourg resident fully-taxable company and (ii) at the
time the dividend is put at the shareholder’s disposal, the shareholder has held or commits itself to
hold for an uninterrupted period of at least 12 months shares representing a direct participation in
the Company of either (a) at least 10% of the share capital or (b) an acquisition price of at least
EUR 1.2 million ("Qualified Shareholding"). Shares held through a tax transparent entity are
considered as being a direct participation proportionally to the percentage held in the net assets of
the transparent entity.

Capital gains realized by a Luxembourg fully-taxable resident company on the shares are subject
to income tax at ordinary rates, unless the conditions of the participation exemption regime, as
described below, are satisfied. Under the participation exemption regime, capital gains realized on
the shares may be exempt from income tax at the level of the shareholder if (i) the shareholder is
a Luxembourg resident fully-taxable company and (ii) at the time the capital gain is realized, the
shareholder has held or commits itself to hold for an uninterrupted period of at least 12 months
shares representing a direct participation in the Company of either (a) at least 10% of the share
capital or (b) an acquisition price of at least EUR 6 million. Taxable gains are determined as being
the difference between the price for which the shares have been disposed of and the lower of their
cost or book value.

Luxembourg residents benefiting from a special tax regime

A shareholder who is either (i) an undertaking for collective investment governed by the law of 17
December 2010, (ii) a specialized investment fund governed by the amended law of 13 February
2007 or (iii) a family wealth management company governed by the amended law of 11 May 2007
is exempt from income tax in Luxembourg. Dividends derived from and capital gains realized on
the shares are thus not subject to income tax in their hands.




                                                 189
Taxation of Luxembourg non-resident shareholders

Non-resident shareholders, who have neither a permanent establishment nor a permanent
representative in Luxembourg to which or whom the shares are attributable, are not liable to any
Luxembourg income tax on income and gains derived from the shares.

Non-resident shareholders who have a permanent establishment or a permanent representative in
Luxembourg to which or whom the shares are attributable, must include any income received, as
well as any gain realized on the sale, disposal or redemption of shares, in their taxable income for
Luxembourg tax assessment purposes, unless the conditions of the participation exemption
regime, as described below, are satisfied. If the conditions of the participation exemption are not
fulfilled, 50% of the gross amount of dividends received from the Company is exempt. Taxable
gains are determined as being the difference between the price for which the shares have been
disposed of and the lower of their cost or book value.

Under the participation exemption regime, dividends derived from the shares may be exempt from
income tax if cumulatively (i) the shares are attributable to a qualified permanent establishment
("Qualified Permanent Establishment") and (ii) at the time the dividend is put at the disposal
of the Qualified Permanent Establishment, it has held or commits itself to hold for an uninterrupted
period of at least 12 months a Qualified Shareholding in the Company. A Qualified Permanent
Establishment means (a) a Luxembourg permanent establishment of a company covered by Article
2 of the European Union Parent-Subsidiary Directive, (b) a Luxembourg permanent establishment
of a company limited by share capital (société de capitaux) resident in a state having a tax treaty
with Luxembourg and (c) a Luxembourg permanent establishment of a company limited by share
capital (société de capitaux) or a cooperative society (société coopérative) resident in the
European Economic Area other than a European Union Member State. Shares held through a tax
transparent entity are considered as being a direct participation proportionally to the percentage
held in the net assets of the transparent entity.

Under the participation exemption regime, capital gains realized on the shares may be exempt
from income tax if cumulatively (i) the shares are attributable to a Qualified Permanent
Establishment and (ii) at the time the capital gain is realized, the Qualified Permanent
Establishment has held or commits itself to hold for an uninterrupted period of at least 12 months
shares representing a direct participation in the Company of either (a) at least 10% of the share
capital or (b) an acquisition price of at least EUR 6 million.

Net worth tax

Luxembourg resident shareholders, as well as non-resident shareholders who have a permanent
establishment or a permanent representative in Luxembourg to which the shares are attributable,
are subject to Luxembourg worth tax on such shares, except if the shareholder is (i) an individual,
(ii) an undertaking for collective investment subject to the law of 17 December 2010, (iii) a
securitization company governed by the amended law of 22 March 2004 on securitization, (iv) a
company governed by the amended law of 15 June 2004 on venture capital vehicles, (v) a
specialized investment fund governed by the amended law of 13 February 2007 or (vi) a family
wealth management company governed by the amended law of 11 May 2007.

Under the participation exemption, a Qualified Shareholding in the Company held by a
Luxembourg resident fully-taxable company or attributable to a Qualified Permanent Establishment
is exempt.

Other taxes

There is no Luxembourg registration tax, stamp duty or any other similar tax or duty payable in
Luxembourg by the shareholders as a consequence of the issuance or transfer of shares, unless
recorded in a notarial deed or otherwise registered in Luxembourg (which is generally not
mandatory).



                                               190
No estate or inheritance taxes are levied on the transfer of the shares upon death of a shareholder
in cases where the deceased was not a resident of Luxembourg for inheritance tax purposes.

Gift tax may be due on a gift or donation of the shares, if the gift is recorded in a deed passed in
front of a Luxembourg notary or otherwise registered in Luxembourg.




                                               191
                                        UNDERWRITING

Underwriting agreement

On 20 April 2012, the Company, certain Existing Shareholders, biw AG, biw AG – BankM, and
Pareto (biw AG and Pareto together the "Underwriters", and biw AG, biw AG – BankM, and
Pareto together the "Managers") executed an underwriting agreement (the "Underwriting
Agreement") with respect to the Offering.

In the Underwriting Agreement, subject to the fulfilment of certain terms and conditions, the
Company has agreed to offer for subscription New Shares at the issue price (Ausgabebetrag) of
EUR 1.00 per New Share to biw AG for the account of the Underwriters, and the Underwriters have
agreed to procure purchasers for the New Shares. After the Offering, biw AG will pay the difference
between the offer price for the New Shares and the issue price (less agreed commissions and
expenses) to the Company.

The following table shows the underwriting quotas of the Underwriters in connection with the
Offering in accordance with the Underwriting Agreement, and subject to the fulfilment of certain
conditions precedent:

          Underwriter                          Underwriting quota as a Percentage
                                             New Shares                  Greenshoe Shares
biw AG                                                         50                               50
Pareto                                                         50                               50



Greenshoe Option and securities loan

With regard to a potential over-allotment, 225,000 no par value ordinary bearer shares (Inhaber-
Stückaktien) have been granted to biw AG - BankM by the Greenshoe Shareholders by way of a
securities loan. The Greenshoe Shareholders have further granted biw AG - BankM an option to
acquire the Greenshoe Shares at the offer price less agreed commission. This option expires 30
calendar days after the commencement of trading of the shares.

Commissions

The Company and the Greenshoe Shareholders will pay the Managers a commission of 5% of the
gross proceeds from the Offering (including the proceeds from the exercise of the Greenshoe
Option). The gross proceeds from the Offering are calculated by multiplying the number of Offer
Shares actually sold by the offer price. (For an estimate of the total fees and commissions payable
to the Managers see: "Reasons for the Offering, Use of Proceeds, Costs and Interests of Thid
Parties Involved in the Offering – Use of Proceeds and Costs")

Termination/indemnity

The Underwriting Agreement provides that the Managers may terminate the Underwriting
Agreement under certain circumstances, even after the shares have been allocated and listed, up
to delivery and settlement. Such circumstances include in particular an adverse change or
prospective adverse change in the assets, financial condition or results of operations or an
impairment of the business of the Company or one of its subsidiaries, a material change in the
management structure of the Company, a complete or partial suspension of trading on the
Frankfurt, London or New York Stock Exchanges or an adverse change in the national or
international financial, political, industrial, economic or legal conditions or capital markets
conditions or currency exchange rates or an outbreak or escalation of hostilities or terrorist
activities.

If the Underwriting Agreement is terminated, the Offering will not take place. In such case, New
Shares which have already been allocated to investors will be invalidated and investors will have
no claim for delivery. Claims relating to any subscription fees paid and costs incurred by any

                                               192
investor in connection with the subscription are governed solely by the legal relationship between
the investor and the institution to which the investor submitted its purchase order. Investors who
have engaged in short sales of shares will bear the risk of not being able to fulfil their delivery
obligations in connection with such sale.

The Company has agreed to indemnify and hold harmless the Managers and their directors,
officers, partners and employees, any affiliate of the Managers and each person who may be
deemed to control the Managers (each an "Indemnified Person") against any losses, claims,
damages, liabilities, charges, expenses or demands (or actions in respect thereof) ("Losses") to
which such Indemnified Person may become subject and which arise out of, or in relation to, or in
connection with (i) any breach by the Company of its representations and warranties pursuant to
the Underwriting Agreement or (ii) any untrue statement of a material fact contained in the
Prospectus or any omission to state therein a material fact required to be stated therein necessary
to make the statements therein not misleading, and (iii) any other Losses in connection with the
Offering for which the Managers are not liable. In each such case, the Company will in addition
reimburse each Indemnified Person for any properly documented legal or other expenses (together
with any amount equal to VAT, if applicable) incurred by such Indemnified Person in connection
with investigation or defending any such action or claim including with respect to an alleged
breach, alleged untrue statements, or an alleged omission as such expenses are incurred. The
Greenshoe Shareholders have also agreed in the Underwriting Agreement to indemnify and hold
harmless the Managers under certain circumstances.

Other relationships

The Managers or their affiliates may, from time to time, engage in transactions or perform services
for Haikui in the ordinary course of business.

Selling and transfer restrictions

General

The Offering consists of public Offerings in Germany and Luxembourg and private placements
outside Germany, Luxembourg and the United States to institutional investors. The shares have
not been and will not be registered under the U.S. Securities Act of 1933, as amended, and are
only being offered outside the United States in reliance on Regulation S under the Securities Act.
This Prospectus does not constitute an offer, solicitation or invitation to subscribe for shares in any
jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorized or to any
person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or
will be taken under the requirements of the legislation or regulations of, or of the legal or
regulatory authorities of, any jurisdiction, except for the filing and/or registration of this
Prospectus in Germany and Luxembourg in order to permit a public offering of the shares and the
public distribution of this Prospectus in Germany and Luxembourg. The distribution of this
Prospectus and the offering of the shares in certain jurisdictions may be restricted by the relevant
laws in such jurisdictions. Persons who may come into possession of this Prospectus are required
by the Company and the Managers to inform themselves about, and to observe and comply with,
any such restrictions at their own expense and without liability to the Company or the Managers.
Persons to whom a copy of this Prospectus has been issued shall not circulate the same to any
other person or reproduce or otherwise distribute this Prospectus or any information herein for any
purpose whatsoever nor permit or cause the same to occur.

European Economic Area

The Managers have represented and warranted to the Company that with respect to each member
state of the EEA that has implemented the Prospectus Directive (each a "Relevant Member
State") the shares which are the subject of the Offering described in this Prospectus have not
been and will not be publicly offered in such Relevant Member State other than in connection with
a public Offering in Germany and Luxembourg after the Prospectus has been approved by the
German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht,

                                                 193
"BaFin"), published in compliance with the German Securities Prospectus Act and notified to the
Luxembourg Commission for the Supervision of the Financial Sector. The Offer Shares may,
however, be publicly offered at any time in each Relevant Member State pursuant to the following
exceptions set forth in the Prospectus Directive, provided that these exceptions have been
implemented in the Relevant Member State:

•     offerings to qualified investors within the meaning of the Prospectus Directive;

•     offerings to fewer than 150 natural or legal persons per Member State (other than qualified
      investors within the meaning of the Prospectus Directive); or

•     in all other circumstances falling within Article 3(2) of the Prospectus Directive.

The foregoing exceptions apply only on the condition that such offer for the sale of shares does not
require the publication of a prospectus by the Company or the Managers pursuant to Article 3 of
the Prospectus Directive.

For purposes of this provision, the term "public offering" of the shares offered in any Relevant
Member State means a communication to the public in any form and by any means presenting
sufficient information on the terms and conditions of the Offering and the shares to be offered so
as to enable an investor to decide to purchase any shares. With respect to the interpretation of
this definition, the measures taken to implement the Prospectus Directive in the Member State in
which the Offer Shares are being offered shall prevail. "Prospectus Directive" means Directive
2003/71/EC including any relevant implementing measures in each Relevant Member State.

United Kingdom

In addition, the Managers have represented and warranted that (i) they have only communicated
or caused to be communicated and will only communicate or cause to be communicated invitations
or inducements to engage in investment activities within the meaning of Article 21 of the Financial
Services and Markets Act ("FSMA") in connection with the offer or sale of the Offer Shares under
circumstances in which Article 21 of the FSMA does not apply to the Company and (ii) they have
complied and will comply with all applicable provisions of the FSMA with respect to all of their
activities in connection with the Offer Shares in, from or otherwise involving, the United Kingdom.

Hong Kong

The Managers (i) have not offered or sold, and will not offer or sell, in Hong Kong, by means of
any document, any shares other than to persons whose ordinary business is to buy or sell shares
or debentures, whether as principal or agent, or in circumstances which do not constitute an offer
to the public within the meaning of the Companies Ordinance (Chapter 32) of Hong Kong, and (ii)
except as permitted under the securities laws of Hong Kong, have not issued, and will not issue, in
Hong Kong any document, invitation or advertisement relating to the shares other than with
respect to shares which are intended to be disposed of to persons outside Hong Kong or only to
persons whose business involves the acquisition, disposal or holding of securities, whether as
principal or agent.

Japan

The shares have not been and will not be registered under the Securities and Exchange Law of
Japan and may not be offered or sold, directly or indirectly, in Japan or to, or for the account or
benefit of, any resident of Japan (which term as used herein means any person resident in Japan,
including any corporation or other entity organized under the laws of Japan) or to, or for the
account or benefit of, any person for reoffering or resale, directly or indirectly, in Japan or to, or
for the account or benefit of, any resident of Japan, except (i) pursuant to an exemption from the
registration requirements of, or otherwise in compliance with, the Securities and Exchange Law of
Japan and (ii) in compliance with any other relevant laws and regulations of Japan.



                                                 194
Singapore

This Prospectus has not been registered as a prospectus or information memorandum with the
Monetary Authority of Singapore. Accordingly, no advertisement may be made with regard to the
Offering or calling attention to an offer or intended offer of the shares to the public in Singapore.
The Managers will not offer or sell shares, and will not make shares the subject of an invitation for
subscription or purchase, and will not circulate or distribute this Prospectus or any other document
or material in connection with the offer or sale, or invitation for subscription or purchase, of
shares, whether directly or indirectly, to the public or any member of the public in Singapore other
than:

•     to an institutional investor or other person specified in Section 274 of the Securities and
      Futures Act 2001 of Singapore;

•     to a sophisticated investor, and in accordance with the conditions, specified in Section 275 of
      the Securities and Futures Act; or

•     otherwise pursuant to, and in accordance with the conditions of, any other applicable
      provision of the Securities and Futures Act.

People’s Republic of China

The Managers have not circulated and will not circulate or distribute this Prospectus in the PRC and
the Managers have not offered or sold, and will not offer or sell to any person for re-offering or
resale, directly or indirectly, any shares to any resident of the PRC except pursuant to applicable
laws and regulations of the PRC.




                                                195
                           RECENT DEVELOPMENTS AND OUTLOOK

Since 31 December 2011, no material change of the financial condition and the trading and market
position of Haikui has occurred.

Haikui expects to continue its growth momentum in 2012. The increase in revenues in the first two
months of 2012 compared to revenues in the first two months of 2011 was in excess of the
increase in revenues for the first two months of 2011 compared to revenues in first two months in
2010.

As at 31 December 2011, Haikui has signed a total of 61 framework agreements with suppliers. To
further enlarge its supplier base and better secure supply to meet its raw material requirements,
Haikui has signed 3 additional three-year framework agreements with suppliers of raw seafood as
at 31 March 2012.

As in the previous years 2009 and 2010, Haikui has been confirmed to be the top seafood
exporting company in Fujian Province in terms of export volume in the calendar year 2011 by the
Fujian Provincial Committee of Foreign Trade and Economic Cooperation by confirmation issued on
20 February 2012. In January 2012, Haiuki received a certificate of compliance with the
International Food Standard for the production of frozen tilapia products and canned tuna and
mackerel in tinplate. In February 2012, Haikui received a Certificate of Registration regarding
compliance with the Global Standard for Food Safety for the production of frozen tilapia fillets in
both bulk and consumer pack forms from live tilapia and canned tuna and mackerel in tin. In
January 2012, Haiuiki was conferred a Trustworthy Chinese Enterprise – Role Model Company
award by the PRC Association of Economic and Trade Promotion.




                                               196
                                                        FINANCIAL SECTION

CHINA HAIKUI LTD., SINGAPORE AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CHINA
HAIKUI LTD. AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2009, 2010 AND 2011.............. F-1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .............................................................. F-2
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..................................................................... F-3
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY...................................................................... F-4
CONSOLIDATED STATEMENT CASH FLOWS ..................................................................................... F-5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................................. F-7
INDEPENDENT AUDITOR'S REPORT ................................................................................................ F-62

CONSOLIDATED FINANCIAL STATEMENTS OF CHINA HAIKUI AG FOR THE PERIOD FROM
24 FEBRUARY 2011 TO 31 DECEMBER 2011............................................................................... F-64
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .............................................................. F-65
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..................................................................... F-66
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY...................................................................... F-67
CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................ F-68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................................. F-69
AUDITOR'S REPORT ..................................................................................................................... F-110

INDIVIDUAL FINANCIAL STATEMENTS OF CHINA HAIKUI AG UNDER THE GERMAN COMMERCIAL
CODE (HGB) FOR THE PERIOD FROM 24 FEBRUARY 2011 TO 31 DECEMBER 2011...................... F-111
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .............................................................. F-112
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..................................................................... F-113
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................................. F-114
AUDITOR'S REPORT ..................................................................................................................... F-118
      CHINA HAIKUI PTE LTD.
            Singapore

      AUDITED CONSOLIDATED
FINANCIAL STATEMENTS (IN EURO) OF
       CHINA HAIKUI PTE. LTD.
  FOR THE FINANCIAL YEARS ENDED
  31 DECEMBER 2009, 2010 AND 2011




               F-1
Consolidated Statements of Comprehensive Income
(all amounts in thousands of Euro (“EUR'000”) unless otherwise stated)

                                                 Note          2009             2010*             2011
                                                              EUR’000          EUR’000           EUR’000

Revenue                                            5              94,544           126,219          152,116
Cost of sales                                      6            (72,524)           (96,360)       (114,203)

Gross profit                                       7             22,020                29,859       37,913

Other income                                       8                 497                   617          285
Distribution cost                                 9                (778)                 (983)      (1,596)
Administrative expenses                           10             (1,773)               (1,696)      (2,582)
Other operating expenses                          11                (44)                  (41)         (48)

Profit from operations                                           19,922                27,756       33,972
Finance (expenses) / income, net                  12                219                (1,342)      (1,613)

Profit before income tax                                         20,141                26,414       32,359
Income tax                                        15             (2,126)               (3,057)      (4,026)

Profit for the year                                              18,015                23,357       28,333

Other comprehensive income / (expenses)
 of the year:
Exchange differences on foreign currency
 translation                                                     (1,486)                6,494        7,658

Total comprehensive income for the year                          16,529                29,851       35,991


Profit for the year attributable to
- owners of the parent                                           18,015                23,357       28,333

Total comprehensive income for the year
  attributable to
- owners of the parent                                           16,529                29,851       35,991

Basic and diluted earnings per share (in Euro)    16               0.03                  0.04         0.05


The accompanying notes are an integral part of the consolidated financial statements
*
  adjusted according to IFRS 3.45 ff.




                                                        F-2
Consolidated Statements of Financial Position
(all amounts in thousands of Euro (“EUR'000”) unless otherwise stated)

                                                 Note         Dec 31, 2009   Dec 31, 2010*      Dec 31, 2011
                                                               EUR’000         EUR’000           EUR’000
Assets

Non-current assets
Intangible assets                                 17                   798           2,208             2,298
Property, plant and equipment                     18                 5,358          14,755            14,371
Deferred tax asset                                                      -              239               267
Other non-current assets                          19                 1,841           3,056             1,067

Total non-current assets                                             7,997          20,258            18,003


Current assets
Inventories                                       20                13,648          15,317            23,892
Trade and other receivables                       21                19,822          36,117            49,941
Other current assets                              22                   945           1,806             7,493
Cash and cash equivalents                         23                14,918          14,951            25,587

Total current assets                                                49,333          68,191           106,913



Total assets                                                        57,330          88,449           124,916

Equity and liabilities
Equity
Share capital                                     24                 7,870           7,870             7,870
Statutory reserves                                25                 5,830           5,830             5,830
Capital reserve                                   26                   388             388               388
Other reserves                                    27                 2,835           2,835             2,835
Currency translation reserve                      28                 1,106           7,600            15,258
Retained earnings                                                   32,402          55,759            84,091

Total equity                                                        50,431          80,282           116,272


Non-current liabilities
Financial liabilities                             30                 3,768              4,206          2,283

Current liabilities
Income tax liabilities                                                 817              1,141          1,508
Financial liabilities                             30                   328                283          2,183
Trade payables                                                         630              1,486          1,535
Other current liabilities                         31                 1,356              1,051          1,135

Total current liabilities                                            3,131              3,961          6,361

Total liabilities                                                    6,899              8,167          8,644

Total equity and liabilities                                        57,330          88,449           124,916


The accompanying notes are an integral part of the consolidated financial statements.
*
  adjusted according to IFRS 3.45 ff.



                                                        F-3
Consolidated Statements of Changes in Equity
(Amounts in thousands of Euro (‘EUR'000”) unless otherwise stated)

                                               Attributable to equity holders of the Parent
                                                                            Currency
                              Share      Statutory Capital        Other    translation Retained
                              capital    reserves    reserve    reserves     reserve    earnings      Total
                        Note EUR’000     EUR’000 EUR’000 EUR’000             EUR’000 EUR’000         EUR’000
Balance at 1
 January 2009                   7,870        3,048          388      2,835       2,592     19,708      36,441
Transfer to statutory    25
 reserves                            -       2,782            -          -             -   (2,782)           -
Dividends                29          -           -            -          -             -   (2,539)     (2,539)
Total comprehensive
 income / (expense)
 for the year            28          -           -            -          -      (1,486)    18,015      16,529

Balance at 31
 December 2009                  7,870        5,830          388      2,835       1,106     32,402      50,431


Balance at 1
 January 2010                   7,870        5,830          388      2,835       1,106     32,402      50,431
Total comprehensive
 income for the year     28          -           -            -          -       6,494     23,357      29,851

Balance as at 31
 December 2010*                 7,870        5,830          388      2,835       7,600     55,759      80,282


Balance at 1
 January 2011*                  7,870        5,830          388      2,835       7,600     55,759      80,282

Total comprehensive
 income for the year     28          -            -           -           -       7,658    28,332      35,990

Balance at 31
 December 2011                  7,870        5,830          388      2,835      15,258     84,091     116,272



The accompanying notes are an integral part of the consolidated financial statements
*
  adjusted according to IFRS 3.45 ff.




                                                      F-4
Consolidated Statements of Cash Flows
(all amounts in thousands of Euro (“EUR'000”) unless otherwise stated)



                                                Note          2009           2010*          2011
                                                             EUR’000        EUR’000        EUR’000

Operating activities
Profit before income tax                                         20,141         26,414        32,359
Adjustments for non-cash expenses /
  (income)
Amortisation of intangible assets                                    20             28             38
Depreciation of property, plant and equipment                       536           665          1,413
Interest expense                                                     60           103              14
Interest income                                                    (52)           (74)           (95)
Other non-cash expenses / (income)                                (172)           376            464
Changes in working capital
Inventories                                                     (3,823)           (41)        (7,021)
Trade and other receivables                                     (9,106)       (13,590)       (10,697)
Other current assets                                                136          (591)        (2,215)
Trade payables                                                      650            762           (36)
Other current liabilities                                           176            336             28
Income taxes paid                                               (1,285)        (2,838)        (3,765)

Cash flows from operating activities                              7,281         11,550        10,487



Investing activities
Cash outflows for other non-current assets                      (1,898)          (929)        (1,111)
Cash outflows for acquisition of assets under
  IFRS 3 ”Business Combinations”                 4                    -       (10,305)              -
Cash outflows for property, plant and                             (138)          (445)          (258)
  equipment
Interest income received                                               52             74             95

Cash outflows from investing activities                         (1,984)       (11,605)        (1,274)


*
    adjusted according to IFRS 3.45 ff.




                                                       F-5
Consolidated Statements of Cash Flows (cont’d)
(all amounts in thousands of Euro (“EUR'000”) unless otherwise stated)

                                               Note          2009               2010*            2011
                                                            EUR’000            EUR’000          EUR’000

Financing activities
Cash outflows for bank loans and other                            (299)                 (656)        (267)
   borrowings
Dividend paid                                                   (1,687)                 (926)            -
Interest paid                                                      (52)                 (103)         (14)
Other cash proceeds / (outflows)                                    (3)                     -            -

Cash outflows from financing activities                         (2,041)             (1,685)          (281)


Net increase / (decrease) in cash and                             3,256             (1,740)         8,932
  cash equivalents

Effects on cash and cash equivalents from                         (275)                 1,773       1,704
  currency translation

Cash and cash equivalents at the beginning                      11,937              14,918         14,951
  of the year

Cash and cash equivalents at the end of         22              14,918              14,951         25,587
  the year


The accompanying notes are an integral part of the consolidated financial statements.
*
  adjusted according to IFRS 3.45 ff.




                                                      F-6
Notes to the Consolidated Financial Statements of China Haikui Pte. Ltd. (formerly known as China
Haikui Ltd.)


1.     GENERAL INFORMATION

China Haikui Pte. Ltd. (formerly known as China Haikui Ltd., hereinafter referred to as “Company”) is a private
limited company domiciled and incorporated in Singapore. The registered office of the Company is located at 16
Collyer Quay, Hitachi Tower, #10-00, Singapore 049318. The principal place of business of its subsidiary, Fujian
Dongshan Haikui Aquatic Products Co., Ltd. ("Fujian Haikui" or "Subsidiary") is located at Dongshan County
Economic & Technology Development Area, Fujian Province, People’s Republic of China (“PRC”) 363400. The
Group’s principal operations are conducted in the PRC.

The immediate and ultimate holding company is Haida Holdings Pte. Ltd., a company incorporated in Singapore
that is wholly-owned by the Company’s Chairman and Chief Executive Officer (“CEO”), Chen Zhenkui. The
principal activity of the Company is that of investment holding. The principal activities of the Subsidiary are
disclosed in Note 2.

The consolidated financial statements comprise the financial statements of the Company and its subsidiary
("Group") for the periods ended 31 December 2009, 2010 and 2011.

These consolidated financial statements were approved and authorised for issue by the Board of Directors on
[Date].


2.     RESTRUCTURING EXERCISE

The Group was formed through a restructuring exercise (the “Restructuring Exercise”) to streamline and
rationalise the corporate structure and shareholding structure. Pursuant to the Restructuring Exercise, the
Company became the holding company of the Group.

The Restructuring Exercise involved the following steps:

(a)   Incorporation of the Company

On 8 December 2006, the Company was incorporated in Singapore with an initial issued and paid-up share
capital of S$ 1,000 comprising 1,000 ordinary shares held by Tan Chee Peng on trust for CMIA Capital Partners
Pte. Ltd. (“CMIA”), the fund manager of certain private equity funds. On 21 February 2007, at the direction of
CMIA, Tan Chee Peng transferred the 1,000 ordinary shares to Mega Bond International Limited (“Mega Bond”),
being the investment vehicle for the aforesaid funds managed by CMIA.


(b)   Investment by Mega Bond International Limited (“Mega Bond”)

Pursuant to a Subscription and Shareholders Agreement between Mega Bond, Chen Zhenkui, Huang Zhenping
and the Company dated 13 March 2007, Mega Bond agreed to invest a total sum of US$ 6 million in the
Company by way of subscription of ordinary shares of the Company.

On 27 September 2007, the respective parties of the said Subscription and Shareholders Agreement entered into
an Investment Agreement (which superseded the said Subscription and Shareholders Agreement) pursuant to
which Mega Bond had increased its investment in the Company to an aggregate sum of US$ 11 million through
the subscription of three convertible notes, each convertible to one ordinary share of the Company at any time
after the issue of the said convertible notes. On 22 October 2007, the three convertible notes were converted by
Mega Bond into three ordinary shares of the Company.




                                                       F-7
2.     RESTRUCTURING EXERCISE (cont’d)


(c)   Conversion of Fujian Dongshan Haikui Aquatic Products Group Co., Ltd. (“Fujian Haikui”) to a Sino-Foreign
      equity joint venture enterprise (“EJV”)

On 15 December 2006, the directors of the Company, Chen Zhenkui and Huang Zhenping, who were the original
shareholders of Fujian Haikui, entered into an Equity Transfer Agreement to sell 30% of the registered capital of
Fujian Haikui to the Company at the sale consideration of the US$ equivalent of Chinese Renminbi (“RMB”) 4.69
million, based on 30% of the paid-up registered capital of Fujian Haikui of RMB 15.635 million, as represented by
the proportion of the registered capital sold to the Company. In March 2007, the sale was completed after the
same was being approved by the Fujian Provincial Department of Foreign Trade and Economic Cooperation in
January 2007 and registered with Zhangzhou Administration for Industry and Commerce (“Zhangzhou AIC”) in
the PRC in March 2007, thereupon Fujian Haikui was converted to an EJV with the Company being the owner of
30% of its registered capital.


(d)   Increase in the registered capital of Fujian Haikui

Immediately prior to 13 March 2007, Fujian Haikui was existing as an EJV. On 13 March 2007, the Company
entered into an Equity Subscription Agreement to subscribe for and/or purchase the US$ equivalent of RMB 35
million in Fujian Haikui to provide additional working capital to fund its expansion plans. On 18 April 2007, the
total registered capital of Fujian Haikui was increased to the US$ equivalent of RMB 50,635,000 after the same
was approved by the Fujian Provincial Department of Foreign Trade and Economic Cooperation in April 2007 and
registered with Zhangzhou AIC in the PRC in April 2007, thereupon the Company increased its equity ownership
in Fujian Haikui to approximately 78.38% of its registered capital.


(e)   Sale of the balance equity interest in Fujian Haikui to the Company

On 3 September 2007, the directors of the Company, Chen Zhenkui and Huang Zhenping, who were the
shareholders of Fujian Haikui, entered into an Equity Transfer Agreement to sell their respective balance equity
interest in the registered capital of Fujian Haikui being an aggregate of approximately 21.62% to the Company at
the sale consideration of the US$ equivalent of RMB 10,945,000. The sale consideration was determined
according to the paid up registered capital of Fujian Haikui, as represented by the proportion of the registered
capital sold to the Company. In November 2007, the sale was completed after the same was approved by the
Fujian Provincial Department of Foreign Trade and Economic Cooperation in September and registered with
Zhangzhou AIC in the PRC in November, thereupon Fujian Haikui became the wholly-owned subsidiary of the
Company and was converted to a wholly foreign-owned enterprise (“WFOE”).


(f)   Acquisition of certain Intellectual Property Rights from Haida Holdings Pte. Ltd. (“Haida Holdings”)

On 25 April 2007, Haida Holdings transferred to the Company the intellectual property rights in relation to certain
know-how on crab and mussel production methods at a consideration of RMB 9,140, representing the
administrative costs Haida Holdings incurred to acquire the said intellectual property rights. The consideration
was satisfied by the allotment and issue of 1,828 ordinary shares by the Company to Haida Holdings on 25 April
2007, representing 64.64% of the enlarged share capital of the Company after the issue of the said 1,828
ordinary shares. On 27 September 2007, Haida Holdings and the Company entered into an Intellectual Property
Rights Transfer Agreement to record the terms and conditions upon which the transfer of the said intellectual
property rights was effected.




                                                            F-8
    2.       RESTRUCTURING EXERCISE (cont’d)


Upon the completion of the Restructuring Exercise and at the date of this report, the Company has the following
subsidiary:


                                 Date of         Registered    Percentage equity
                            establishment and    capital and      held by the
     Name of subsidiary     place of business     paid-up      Combined Group              Principal activities

Fujian Dongshan             7 October 1993 in    RMB 50.64            100%         Production and distribution of
Haikui Aquatic                    PRC             million                          frozen and canned seafood
Products Group Co.,                                                                products
Ltd. (福建省东山县海魁
水产集团有限公司)


3.         SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance and basis of preparation

The consolidated financial statements of the Group have been prepared (on a voluntary basis) in accordance with
International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB),
London, and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) as
endorsed by the European Union (EU) and in effect as at closing date ("IFRS").

The consolidated financial statements have been prepared on a historical cost basis, except as disclosed in the
accounting policies below.

For the purpose of inclusion in the prospectus for an initial public offering, these consolidated financial statements
have been drawn up in Euros (“EUR”). All values are rounded to the nearest thousands (“EUR’000” or "kEUR")
unless otherwise indicated.

The preparation of the consolidated financial statements in conformity with IFRS requires management to
exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of
accounting estimates and assumptions that affect the reported amounts of assets and liabilities and the reported
amounts of revenues and expenses during the relevant period. Critical accounting estimates and assumptions
used that are significant to the financial statements and areas involving a higher degree of judgement or
complexity are disclosed in this Note.


Adoption of new and revised standards and interpretations

The accounting policies adopted are consistent with those of the previous financial year, except for the following
new and amended IFRS and IFRIC interpretations effective as of 1 January 2011:

•        IAS 24 Related Party Disclosures (amendment) effective 1 January 2011
•        IAS 32 Financial Instruments: Presentation (amendment) effective 1 February 2010
•        IFRIC 14 Prepayments of a Minimum Funding Requirement (amendment) effective 1 January 2011
•        Improvements to IFRSs (May 2010)




                                                         F-9
3.     SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Adoption of new and revised standards and interpretations (cont’d)

The adoption of the standards or interpretations is described below:

IAS 24 Related Party Transactions (Amendment)
The IASB issued an amendment to IAS 24 that clarifies the definitions of a related party. The new definitions
emphasise a symmetrical view of related party relationships and clarifies the circumstances in which persons and
key management personnel affect related party relationships of an entity. In addition, the amendment introduces
an exemption from the general related party disclosure requirements for transactions with government and
entities that are controlled, jointly controlled or significantly influenced by the same government as the reporting
entity. The adoption of the amendment did not have any impact on the financial position or performance of the
Group.

IAS 32 Financial Instruments: Presentation (Amendment)
The IASB issued an amendment that alters the definition of a financial liability in IAS 32 to enable entities to
classify rights issues and certain options or warrants as equity instruments. The amendment is applicable if the
rights are given pro rata to all of the existing owners of the same class of an entity’s non-derivative equity
instruments, to acquire a fixed number of the entity’s own equity instruments for a fixed amount in any currency.
The amendment has had no effect on the financial position or performance of the Group because the Group does
not have these type of instruments.

IFRIC 14 Prepayments of a Minimum Funding Requirement (Amendment)
The amendment removes an unintended consequence when an entity is subject to minimum funding
requirements and makes an early payment of contributions to cover such requirements. The amendment permits
a prepayment of future service cost by the entity to be recognised as a pension asset. The Group is not subject to
minimum funding requirements in Euroland, therefore the amendment of the interpretation has no effect on the
financial position nor performance of the Group.

Improvements to IFRSs
In May 2010, the IASB issued its third omnibus of amendments to its standards, primarily with a view to removing
inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The adoption
of the following amendments resulted in changes to accounting policies, but no impact on the financial position or
performance of the Group.

•    IAS 1 Presentation of Financial Statements: The amendment clarifies that an entity may present an analysis
     of each component of other comprehensive income maybe either in the statement of changes in equity or in
     the notes to the financial statements. The Group provides this analysis in Note 28.

•    IFRS 3 Business Combinations: The measurement options available for non-controlling interest (NCI) were
     amended. Only components of NCI that constitute a present ownership interest that entitles their holder to a
     proportionate share of the entity’s net assets in the event of liquidation should be measured at either fair
     value or at the present ownership instruments’ proportionate share of the acquiree’s identifiable net assets.
     All other components are to be measured at their acquisition date fair value.

•    IFRS 7 Financial Instruments — Disclosures: The amendment was intended to simplify the disclosures
     provided by reducing the volume of disclosures around collateral held and improving disclosures by requiring
     qualitative information to put the quantitative information in context. The Group reflects the revised disclosure
     requirements in Note 28.




                                                        F-10
3.     SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Adoption of new and revised standards and interpretations (cont’d)

Other amendments resulting from Improvements to IFRSs to the following standards did not have any impact on
the accounting policies, financial position or performance of the Group:

•    IFRS 3 Business Combinations (Contingent consideration arising from business combination prior to
     adoption of IFRS 3 (as revised in 2008))
•    IFRS 3 Business Combinations (Un-replaced and voluntarily replaced share-based payment awards)
•    IAS 27 Consolidated and Separate Financial Statements
•    IAS 34 Interim Financial Statements

The following interpretation and amendments to interpretations did not have any impact on the accounting
policies, financial position or performance of the Group:

•    IFRIC 13 Customer Loyalty Programmes (determining the fair value of award credits)
•    IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments


Standards issued but not yet effective

Standards issued but not yet effective up to the date of issuance of the Group’s financial statements are listed
below. This listing of standards and interpretations issued are those that the Group reasonably expects to have
an impact on disclosures, financial position or performance when applied at a future date. The Group intends to
adopt these standards when they become effective.

IAS 1 Financial Statement Presentation – Presentation of Items of Other Comprehensive Income
The amendments to IAS 1 change the grouping of items presented in OCI. Items that could be reclassified (or
‘recycled’) to profit or loss at a future point in time (for example, upon derecognition or settlement) would be
presented separately from items that will never be reclassified. The amendment affects presentation only and has
there no impact on the Group’s financial position or performance. The amendment becomes effective for annual
periods beginning on or after 1 July 2012.

IAS 12 Income Taxes – Recovery of Underlying Assets
The amendment clarified the determination of deferred tax on investment property measured at fair value. The
amendment introduces a rebuttable presumption that deferred tax on investment property measured using the fair
value model in IAS 40 should be determined on the basis that its carrying amount will be recovered through sale.
Furthermore, it introduces the requirement that deferred tax on non-depreciable assets that are measured using
the revaluation model in IAS 16 always be measured on a sale basis of the asset. The amendment becomes
effective for annual periods beginning on or after 1 January 2012.

IAS 19 Employee Benefits (Amendment)
The IASB has issued numerous amendments to IAS 19. These range from fundamental changes such as
removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and
re-wording. The Group is currently assessing the full impact of the amendments, yet as the Group does not have
any defined benefit plans, it is expected that the amendments do not have any material impact on the Group’s
financial position or performance. The amendment becomes effective for annual periods beginning on or after 1
January 2013.

IAS 27 Separate Financial Statements (as revised in 2011)
As a consequence of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to accounting for
subsidiaries, jointly controlled entities, and associates in separate financial statements. The Group does not
present separate financial statements. The amendment becomes effective for annual periods beginning on or
after 1 January 2013.




                                                     F-11
3.     SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Standards issued but not yet effective (cont’d)

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)
As a consequence of the new IFRS 11 and IFRS 12. IAS 28 has been renamed IAS 28 Investments in
Associates and Joint Ventures, and describes the application of the equity method to investments in joint
ventures in addition to associates. The Group does not have any such investments. The amendment becomes
effective for annual periods beginning on or after 1 January 2013.

IFRS 7 Financial Instruments: Disclosures — Enhanced Derecognition Disclosure Requirements
The amendment requires additional disclosure about financial assets that have been transferred but not
derecognised to enable the user of the Group’s financial statements to understand the relationship with those
assets that have not been derecognised and their associated liabilities. In addition, the amendment requires
disclosures about continuing involvement in derecognised assets to enable the user to evaluate the nature of,
and risks associated with, the entity’s continuing involvement in those derecognised assets. The amendment
becomes effective for annual periods beginning on or after 1 July 2011. The amendment affects disclosure only
and has no impact on the Group’s financial position or performance.

IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9 as issued reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to
classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard is
effective for annual periods beginning on or after 1 January 2013. In subsequent phases, the IASB will address
hedge accounting and impairment of financial assets. The completion of this project is expected over the course
of 2011 or the first half of 2012. The adoption of the first phase of IFRS 9 will have an effect on the classification
and measurement of the Group’s financial assets, but will potentially have no impact on classification and
measurements of financial liabilities. The Group will quantify the effect in conjunction with the other phases, when
issued, to present a comprehensive picture.

IFRS 10 Consolidated Financial Statements
IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the
accounting for consolidated financial statements. It also includes the issues raised in SIC-12 Consolidation —
Special Purpose Entities. IFRS 10 establishes a single control model that applies to all entities including special
purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgement
to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared
with the requirements that were in IAS 27. This standard becomes effective for annual periods beginning on or
after 1 January 2013.

IFRS 11 Joint Arrangements
IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities — Non-monetary
Contributions by Venturers. IFRS 11 removes the option to account for jointly controlled entities (JCEs) using
proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using
the equity method. The Group does not have any such investments. This standard becomes effective for annual
periods beginning on or after 1 January 2013.

IFRS 12 Disclosure of Involvement with Other Entities
IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements,
as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to
an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. A number of new
disclosures are also required. This standard becomes effective for annual periods beginning on or after 1 January
2013.

IFRS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not
change when an entity is required to use fair value, but rather provides guidance on how to measure fair value
under IFRS when fair value is required or permitted. The Group is currently assessing the impact that this
standard will have on the financial position and performance. This standard becomes effective for annual periods
beginning on or after 1 January 2013.


                                                        F-12
3.     SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company and its subsidiary as at
the balance sheet date. The financial statements of the subsidiary are prepared for the same reporting period and
dates as the parent company. Consistent accounting policies are applied for like transactions and events in
similar circumstances. All intra-group balances, transactions, income and expenses and gains and losses
resulting from intra-group transactions and dividends are eliminated in full.

Transaction under common control

The Restructuring Exercise (see Note 2) carried out by the Group is a legal reorganisation of entities under
common control. A common control transaction is defined by the (then applicable) IFRS 3 (rev 2004) as a
business combination in which all of the combining entities or businesses are ultimately controlled by the same
party or parties both before and after the business combination, and that control is not transitory.

Under the guidelines of IFRS 3 (rev 2004) the accounting for common control transactions is outside the scope of
this standard. In the absence of an IFRS that specifically applies to a transaction, other event or condition, IAS
8.10 to 12 set out, that management shall use its judgement in developing and applying an appropriate
accounting policy that is reliable and relevant for the users. Under these circumstances, the predecessor
accounting method has been applied for the accounting of the Restructuring Exercise as described in Note 2.

Under this method, the Company has been treated as the holding company of its subsidiary for all the financial
periods presented rather than from the date of completion of the Restructuring Exercise. Accordingly, the results
of the Group for the financial period 2007 and the retained earnings thereafter include the results of the
subsidiaries for the entire year 2007.

Pursuant to this:
-     Assets and liabilities are combined at their existing carrying amounts;
-     Any difference between the consideration paid and the share capital of the “acquired entity” is reflected in
      the “Other reserves”; and
-     The paid-up capital of the subsidiary held directly by the Company is shown as the Group’s share capital
      for the financial period 2007 prior to the Restructuring Exercise.


Business combinations and Goodwill

Business combinations are accounted for using the acquisition method under IFRS 3 (revised 2008). The cost of
an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair
value and the amount of any non-controlling interest (if any) in the acquiree.

Acquisition costs incurred are expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.

Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If
this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is
recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.




                                                       F-13
3.      SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Foreign currency translation

Functional and presentation currency

The functional currencies of the Company and the subsidiary are those of Singapore dollars ("SGD") and Chinese
Renminbi Yuan ("RMB") respectively as the Singapore dollars and RMB reflect the economic substance of the
underlying events and circumstances relevant to the Company and the subsidiary respectively. Since the
Company is in the process of an initial public offering in Germany and Luxemburg, the consolidated financial
statements have been presented in Euros ("EUR").

The applied rates of exchange for the periods 2009 to 2011 are as outlined below:

                                  RMB/EUR                                              SGD/EUR
                   Closing Rate              Average Rate              Closing Rate                Average Rate
     2009             0.1023                    0.1054                    0.4966                      0.4944
     2010             0.1145                    0.1117                    0.5847                      0.5542
     2011             0.1213                    0.1111                    0.5943                      0.5716

Translation of the Company’s and its Subsidiary’s financial statements

For the purpose of presenting the consolidated financial statements of the Group, the results and financial
position of the Company and its Subsidiary are translated into Euro, being the presentation currency of the
consolidated financial statements, using the following procedures:

•    Assets and liabilities of the Company and its Subsidiary are translated at the closing rate at balance sheet
     date,
•    Income and expenses items of the Company and its Subsidiary are translated at average exchange rate,
     which approximates the exchange rates at the dates of transactions; and
•    Share capital and statutory, capital and other reserves of the Company and its Subsidiary are translated at
     historical rates.

All resulting exchange differences are recognised in separate component of equity as currency translation reserve.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying
amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign
operation and translated at the closing rate of exchange at the reporting date.

Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its
subsidiary and are recorded on initial recognition in the functional currencies at exchange rates approximating
those ruling at transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated
at the closing rate of exchange ruling at balance sheet date. Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using exchange rates as at the dates of the initial transactions.
Non-monetary items measured at fair value in foreign currencies are translated using the exchange rates at the
date when the fair value is determined.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are
included in profit and loss for the period. Exchange differences arising on the retranslation of non-monetary items
carried at fair value are included in profit and loss for the period except for differences arising on the retranslation
of non-monetary items in respects of which gains and losses are recognised directly in equity. For such non-
monetary items, any exchange component of that gain or loss is also recognised directly in equity.




                                                         F-14
3.   SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method of an intangible asset with a finite useful life are reviewed at least at each financial year-end.

Intangible assets with indefinite useful lives are tested for impairment annually or more frequently if the events or
changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-
generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite
life is reviewed annually to determine whether the useful life assessment continues to be supportable.
Throughout the periods presented, the Company does not hold any intangible assets with an indefinite useful life.

Consideration paid for land use rights are recorded as land use rights, under which the lessor has not transferred
all the risks and benefits of ownership to the lessee. Land use rights are stated at cost less accumulated
amortisation. Amortisation is charged to the statement of profit and loss on a straight-line basis over the terms of
the respective leases.


Research and development costs

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an
individual project is recognised only when the Group can demonstrate the technical feasibility of completing the
intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the
assets, how the asset will generate future economic benefits, the availability of resources to complete and the
ability to measure reliably the expenditure during the development.

The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-
generated intangible asset can be recognised, development expenditure is charged to profit and loss for the
period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use or
more frequently when an indication of impairment arises during the reporting year. No internally generated
intangible assets have been recognised in the consolidated financial statements as of 31 December 2009, 2010
and 2011.




                                                          F-15
3.   SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Property, plant and equipment and depreciation

All items of property, plant and equipment are initially recorded at cost. The cost of the asset comprises its
purchase price and any directly attributable cost of bringing the asset to its working condition and location for its
intended use. In addition, cost also includes borrowing costs for long-term construction projects, if the recognition
criteria are met. Subsequent costs are included in the asset’s carrying amount or recognised as separate asset,
as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. The cost of the day-to-day
servicing of property, plant and equipment are recognised in the profit or loss as incurred. Property, plant and
equipment acquired in a business combination are initially recorded at their fair values as at acquisition date.

After initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and any
accumulated impairment loss.

Construction in progress includes all costs of construction and other direct costs. No depreciation is provided on
construction in progress until such time as it is completed and ready for use. Construction in progress is
reclassified to the appropriate category of property, plant and equipment when complete and ready to use.

Property, plant and equipment are depreciated using the straight-line method, less estimated residual value over
their estimated useful lives. The estimated useful lives have been taken as follows:

                                                       Estimated
                                                     useful lives (Years)
Leasehold buildings                                         20
Plant and machinery                                       5 - 10
Office equipment                                             5
Motor vehicles                                               5
Furniture and fitting                                        5

Fully depreciated assets are retained in the financial statements until they are no longer in use.

The estimated useful life and depreciation method are reviewed and adjusted as appropriate, at each balance
sheet date to ensure that the amount, method and period of depreciation are consistent with the expected pattern
of economic benefits from items of property, plant and equipment.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amounts of the asset and is recognised in the profit or
loss.


Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU)
fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of assets. When the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset.




                                                        F-16
3.   SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Impairment of non-financial assets (cont’d)

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and
forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is
calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the income
statement in expense categories consistent with the function of the impaired asset, except for a property
previously revalued and the revaluation was taken to other comprehensive income. In this case, the impairment is
also recognised in other comprehensive income up to the amount of any previous revaluation.

For assets excluding goodwill, an assessment is made at each reporting date whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such indication exists,
the Group estimates the asset’s or CGUs recoverable amount. A previously recognised impairment loss is
reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount
since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised
in the income statement unless the asset is carried at a revalued amount, in which case, the reversal is treated as
a revaluation increase.

For the Group’s recognized Goodwill, the following specific characteristics for impairment testing apply:

Goodwill is tested for impairment annually (as at 31 December) and when circumstances indicate that the
carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of
each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less
than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be
reversed in future periods.


Financial assets

Financial assets within the scope of IAS 39 are recognised on the balance sheet when the Group becomes a
party to the contractual provisions of the instrument. Financial assets are initially recognised at fair value plus, in
the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

Financial assets are derecognised when the contractual rights to the cash flows from the financial assets have
expired or have been transferred. On derecognition of a financial asset in its entirety, the difference between the
carrying amount and the sum of the consideration received and any cumulative gain or loss that has been
recognised in other comprehensive income is recognised in profit and loss of the period.

All regular way purchases and sales of financial assets are recognised and derecognised on trade date basis
where the purchase or sale of financial assets are under a contract whose terms require delivery of the assets
within the timeframe established by the market concerned.

The Group classifies its investments in financial assets in the following categories: financial assets at fair value
through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets.
The classification depends on the purpose for which the assets were acquired. Management determines the
classification of its financial assets at initial recognition. As of 31 December 2009, 2010 and 2011, the Group did
not have any financial assets in the category financial assets at fair value through profit or loss, held-to-maturity
investments and available-for-sale financial assets.




                                                         F-17
3.   SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Financial assets (cont’d)

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor
with no intention of trading the receivable. They are included in current assets, except those maturing more than
12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are
presented as trade and other receivables, other current assets and cash and cash equivalents on the balance
sheet.

At subsequent reporting dates, loan and receivables are measured at amortised cost using the effective interest
rate method.


Impairment of financial assets

The Group assess at each balance sheet date whether there is any objective evidence that a financial asset or
group of financial assets is impaired and recognised the impairment loss when such evidence exists.

Financial assets carried at amortised cost

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and
is measured as the difference between the asset’s carrying amount and the present value of estimated future
cash flows discounted at the effective interest rate computed at initial recognition. The carrying amount of the
asset is reduced through the use of an allowance account.

Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can
be related objectively to an event occurring after the impairment was recognised to the extent that the carrying
amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is
recognised in profit and loss.


Inventories

Inventories are valued at the lower of cost and net realisable value. Raw materials comprise purchase cost
accounted for on a weighted average basis. Finished goods comprise cost of materials, direct labour and an
attributable proportion of manufacturing overheads.

Net realisable value is the estimated selling price, less estimated costs of processing and costs to be incurred for
selling and distribution.


Cash and cash equivalents

For the purpose of the consolidated cash flow statement, cash and cash equivalent comprises cash on hand and
in banks, excluding cash deposits pledged for period of more than three months. Cash and cash equivalents are
short term, highly liquid investments readily convertible to known amounts of cash and subjected to an
insignificant risk of changes in value and have a short maturity of generally within three months when acquired.




                                                       F-18
3.   SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction from the proceeds.


Financial liabilities

Financial liabilities within the scope of IAS 39 are recognised on the balance sheet when, and only when, the
Group becomes a party to the contractual provisions of the financial instrument.

Financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities not at fair value
through profit and loss, directly attributable transaction costs. Subsequent to initial recognition, derivatives are
measured at fair value. Other financial liabilities (except for financial guarantee) are measured at amortised cost
using the effective interest method.

For financial liabilities other than derivatives, gains and losses are recognised in profit or loss when the liabilities
are derecognised, and through the amortisation process. Any gains or losses arising from changes in fair value of
derivatives are recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the
original liability and the recognition of a new liability, and the difference in the respective carrying amounts is
recognised in the profit or loss.

Financial liabilities are classified as financial liabilities at fair value through profit or loss or other financial
liabilities. The Group determines the classification of its financial liabilities at initial recognition. As of 31
December 2009, 2010 and 2011, the Group did not have any financial liabilities in the category financial liabilities
at fair value through profit or loss.

Borrowings

Borrowings are initially recorded at fair value, net of transaction costs incurred and subsequently accounted for at
amortised costs using the effective interest method. Borrowings which are due to be settled within twelve months
after the balance sheet date are included in other current liabilities in the balance sheet even though the original
term was for a period longer than twelve months and an agreement to refinance, or to reschedule payments, on a
long-term basis is completed after the balance sheet date and before the financial statements are authorised for
issue. Other borrowings due to be settled more than twelve months after the balance sheet date are included in
non-current liabilities in the balance sheet.


Operating lease

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item
are classified as operating leases. Operating lease payments are recognised as an expense in the profit or loss
on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is
recognised as a reduction of rental expense over the lease term on a straight-line basis.




                                                          F-19
3.       SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Provisions

A provision is recognised when there is a present obligation, legal or constructive, as a result of a past event and
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed regularly at each
balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of
economic resources will be required to settle the obligation, the provision is reversed and recognised in profit and
loss of the period. Where the effect of the time value of money is material, the provision is discounted using a
current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognised as a financial cost.


Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the
revenue can be measured reliably. The following specific recognition criteria must be met before revenue is
recognised:

Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of ownership, which
generally coincides with the time when the goods are delivered to customers and title has passed. Revenue is not
recognised to the extent where there are significant uncertainties regarding recovery of the consideration due,
associated costs or the possible return of goods.

Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding
and the effective interest rates applicable.


Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be
received and all terms and conditions relating to the grants have been complied with. When the grant relates to an
expense item, it is recognised in the profit or loss over the periods necessary to match them on a systematic basis
to the costs, which it is intended to compensate. Government grants relating to the purchase of property, plant
and equipment are included in the balance sheet as deferred income and are credited to the profit or loss on a
straight line basis over the expected lives of the related assets.


Dividends

Dividends are recognised when the shareholder's right to receive the payment is established. Interim dividends
are recorded in the period in which they are declared payable. Final dividends are recorded in the period in which
the dividends are approved by the shareholders.


Borrowing costs

In accordance with the transitional provisions of IAS 23, borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset, for which the commencement date for capitalisation is
on or after 1 January 2009, are capitalized. The amount of borrowing cost capitalised on that asset is the actual
borrowing costs incurred during the period less any investment income on the temporary investment of those
borrowings. No borrowing costs have been capitalized in 2009, 2010 or 2011.

Other borrowing costs are expensed in the period in which they are incurred. Other borrowing costs are
recognised on a time-proportion basis in the income statement using the effective interest method.




                                                         F-20
3.   SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Employee benefits

Retirement benefits

The Group participates in the national schemes as defined by the laws of the countries in which it has operations.

Singapore

The Company makes contribution to the Central Provident Fund (CPF) Scheme in Singapore, a defined
contribution pension scheme.

People’s Republic of China (“PRC”)

The subsidiary, incorporated and operating in the PRC, is required to provide certain retirement plan contribution
to their employees under existing PRC regulations. Contributions are provided at rates stipulated by the PRC
regulations and are managed by government agencies, which are responsible for administering these amounts
for the subsidiary’s employees.

Obligations for contributions to defined contribution retirement plans are recognised as an expense in profit and
loss as and when they are incurred.


Current and Deferred Income tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in
the profit or loss because it excludes items of income or expense that are taxable or deductible in other years and
it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated
using tax rates and tax laws that have been enacted or substantively enacted in the countries where the entities
operate by the balance sheet date.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and
are accounted for using the liability method.

Deferred tax liabilities are recognised for all taxable temporary differences, except:
•   When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
    transaction that is not a business combination and, at the time of the transaction, affects neither the
    accounting profit nor taxable profit or loss
•   In respect of taxable temporary differences associated with investments in subsidiaries, associates and
    interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and
    it is probable that the temporary differences will not reverse in the foreseeable future

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except:
•   When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
    of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
    affects neither the accounting profit nor taxable profit or loss



                                                        F-21
3.       SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Current and Deferred Income tax (cont’d)

•    In respect of deductible temporary differences associated with investments in subsidiaries, associates and
     interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the
     temporary differences will reverse in the foreseeable future and taxable profit will be available against which
     the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply in the period when the
liability is settled or the asset realised based on tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to
items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.


Value-added-tax (“VAT”)

The Group’s sales of goods in the PRC are subject to VAT at the applicable tax rate of 17% for PRC domestic
sales. Input tax on purchases can be deducted from output VAT. The net amount of VAT recoverable from, or
payable to, the taxation authority is included as part of “Trade and other receivables” or “Trade payables” in the
balance sheet. The Group’s export sales are not subject to VAT.


Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or
exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered to be related if they are subject to common control or common significant influence. Related parties
may be individuals or corporate entities.


Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision makers of the Company regularly review the segment
results in order to allocate resources to the segments and to assess the segment performance.


Significant accounting estimates and judgements

Estimates and assumptions concerning the future are made in the preparation of the consolidated financial
statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities
and income and expenses, and disclosures made. They are assessed on an on-going basis and are based on
experience and relevant factors, including expectations of future events that are believed to be reasonable under
the circumstances

Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. Resulting
accounting estimates will, by definition, seldom equal the related actual results.




                                                          F-22
3.      SIGNIFICANT ACCOUNTING POLICIES (cont’d)


Significant accounting estimates and judgements (cont’d)

The key assumptions concerning the future and other key sources of estimation uncertainty that may have a
significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below:

(i)     Accounting for business combinations

        For acquisition accounting purposes, all identifiable assets and liabilities acquired in a business
        combination are recognised at fair value as of the date of acquisition. Significant estimates are used to
        calculate the fair value of these assets and liabilities as of the date of acquisition. Estimates are
        furthermore used to determine the useful life of the acquired assets.

(ii)    Allowance for trade receivables

        Trade receivables are recorded at the amounts invoiced to the customers. The allowance for doubtful
        receivables is the Group’s best estimate of the amount of probable credit losses in the Group’s existing
        accounts receivable. Management uses judgment to determine the allowance for doubtful receivables
        which is supported by historical repayment records of the customers. Management of the Group reviews
        its allowance for doubtful receivables at least on a quarterly basis. Only after all means of collection have
        been exhausted and the collection of the amounts is deemed to be remote, account balances are charged
        off against the allowance. Actual results may vary from the judgements made. No allowance for trade
        receivables has been recognized as of 31 December 2009, 2010 and 2011.

(iii)   Depreciation of plant and machinery

        The cost of plant and machinery used for the purpose of seafood processing is depreciated on a straight-
        line basis over the estimated useful lives of the assets. Management estimates the useful lives of the
        production lines to be between 5 to 10 years. The carrying amount of the Group’s plant and machinery at
        31 December 2009, 2010 and 2011 was kEUR 1,923, kEUR 4,334 and kEUR 3,938 respectively. Changes
        in the expected level of usage and technological developments could impact the economic useful lives and
        residual values of these plant and machinery. Therefore, future depreciation charges could be revised.

(iv)    Depreciation of leasehold buildings

        The cost of construction of buildings is depreciated on a straight-line basis over the estimated useful life of
        20 years. The carrying amount of the Group’s leasehold buildings at 31 December 2009, 2010 and 2011
        was kEUR 3,279, kEUR 9,957 and kEUR 9,982 respectively. Changes in the physical condition of the
        buildings could impact the economic useful life and residual value of the asset. As at 31 December 2011,
        there are no indications that the remaining economic useful life of the buildings is significantly lower than
        the remaining useful life.

(v)     Net realisable values of inventories

        Net realisable value of inventories is the estimated selling price in the ordinary course of business, less
        estimated costs of processing and selling expenses. These estimates are based on current market
        condition and the historical experience of selling products of similar nature. It could change significantly
        as a result of competitors’ actions in response to severe industry cycles. Management reassesses the
        estimations at end of each financial year. The carrying amounts of inventories as at 31 December 2009,
        2010 and 2011 were kEUR 13,648, kEUR 15,317and kEUR 23,892 respectively.




                                                         F-23
4.     BUSINESS COMBINATIONS IN 2010


Pursuant to a sale and purchase agreement dated 26 September 2010, on 1 December 2010 the Group acquired
from Fujian Huanong Stock Co., Ltd and Dongshan Huanong Foodstuff Co. Ltd, and a seafood processing factory
at a location near the Group's existing factory premises by way of an 'asset deal'. The acquiree is another -
mainly grilled - seafood processing company. As a result of this acquisition, the Group is expected to increase its
cold storage/ warehousing capacities and expand its product range.

Due to the complexity of the acquisition and the completion late in the Company's financial year, the initial
accounting for the business combination in the financial year 2010 was deemed to be incomplete in accordance
with IFRS 3.45. The accounting for the business combination and all amounts reported in these financial
statements were therefore provisionally.

After completion of the Purchase Price Allocation in the 4th quarter of 2011, the provisional amounts were
adjusted in accordance with IFRS 3.45. The comparative amounts for the Consolidated Statements of Financial
Position as of 31 December 2010, the Consolidated Statement of Comprehensive Income of 2010, the
Consolidated Statements of Cash Flow in 2010 and the Consolidated Statements of Changes in Equity as of 31
December 2010 were adjusted in accordance with IFRS 3.49 as if the Purchase Price Allocation would have been
finalized at the acquisition date.

The impact on the Statement of Comprehensive Income, Balance Sheet and Cash-Flow Statement are presented
as follows:

Statement of Comprehensive Income:
                                                                                 Adjusted
                                                               2010                2010               Impact
                                                              EUR’000            EUR’000             EUR’000

Revenue                                                         126,219              126,219                    -
Cost of sales                                                   (96,381)             (96,360)                  21

Gross profit                                                      29,838              29,859                   21

Other income                                                          617                 617                   -
Distribution cost                                                   (983)               (983)                   -
Administrative expenses                                           (1,696)             (1,696)                   -
Other operating expenses                                             (41)                (41)                   -

Profit from operations                                            27,735              27,756                   21
Finance (expenses) / income, net                                  (1,342)             (1,342)                   -

Profit before income tax                                          26,393              26,414                   21
Income tax                                                        (3,059)             (3,057)                   2

Profit for the year                                               23,334              23,357                   23

Other comprehensive income / (expenses)
 of the year:
Exchange differences on foreign currency
 translation                                                       6,494                6,494                   -

Total comprehensive income for the year                           29,828              29,851                   23




                                                       F-24
4.     BUSINESS COMBINATIONS IN 2010 (cont’d)


Extract of balance sheet:
                                                                                  Adjusted
                                                                2010                2010               Impact
                                                               EUR’000            EUR’000             EUR’000

Intangible assets                                                     2,419               2,208               (211)
Property, plant and equipment                                        14,760              14,755                  (5)
Deferred tax asset                                                        -                 239                 239
Retained earnings                                                  (55,736)            (55,759)                (23)

Extract of statement of changes in cash flow:
                                                                                  Adjusted
                                                                2010                2010               Impact
                                                               EUR’000            EUR’000             EUR’000

Profit before income tax                                            26,393              26,414                   21
Adjustments for non-cash expenses /
 (income)
Amortisation of intangible assets                                        54                  28                (26)
Depreciation of property, plant and equipment                           660                 665                   5

After the completion of the Purchase Price Allocation the fair values of the identifiable assets and liabilities as at
the date of acquisition were:

                                                                                         Fair values recognised on
                                                                                           acquisition (adjusted)
                                                                                                  EUR’000
Assets
Land use rights                                                                                                  614
Property, plant and equipment                                                                                  8,764
Deferred tax Assets                                                                                              230

Total net assets acquired                                                                                      9,608

Goodwill arising on acquisition                                                                                  697

Consideration paid in cash (net cash flow on acquisition)                                                     10,305


The goodwill of kEUR 697 comprises the value of expected synergies arising from the acquisition as well as
intangible assets that do not qualify for separate recognition such as employee knowhow. Goodwill is allocated
entirely to the ‘frozen products’ segment. None of the goodwill recognised is expected to be deductible for income
tax purposes.




                                                        F-25
4.      BUSINESS COMBINATIONS IN 2010 (cont’d)


The provisional fair values of the identifiable assets as at the date of acquisition previously recognized were as
follows:

                                                                                         Provisional fair values
                                                                                       recognised on acquisition
                                                                                                EUR’000
Assets
Unpatented technology                                                                                         927
Land use rights                                                                                               614
Property, plant and equipment                                                                               8,764

Total net assets at provisional fair value                                                                 10,305

Consideration paid in cash (net cash flow on acquisition)                                                  10,305


The identification and the valuation of identifiable intangible assets have been completed in 2011. Based on new
information about facts and circumstances that has been obtained in the course of finalizing the Purchase Price
Allocation in 2011 and that existed already at acquisition date, the Company came to the conclusion, that the
initially recognised unpatented technology asset did not meet the recognition criteria set out in IAS 38. Moreover,
at the date of acquisition, it was uncertain whether a deferred tax relevant situation was given.

No cash or cash equivalents or trade receivables have been acquired in the acquisition. No liabilities have been
assumed.

From the date of acquisition, the acquired business has contributed kEUR 535 of revenue and kEUR 96 to the net
profit before tax of the Group in 2010. If the combination had taken place at the beginning of the previous year,
revenue would have been kEUR 6,420 and the profit before income tax for the Group would have been kEUR
1,152.

Transaction costs of kEUR 14 have been expensed and are included in administrative expenses and disclosed in
the consolidated statement of cash flows in the cash flows from operating activities in 2010.


5.      REVENUE

Revenues can be broken down as follows:

a) By product category
                                        2009                         2010                         2011
                                 EUR '000        %            EUR '000        %            EUR '000         %
Frozen                             86,214        91.19         114,306        90.56         133,696         87.89
Canned                              8,330         8.81          11,913         9.44          18,420         12.11

Total                               94,544      100.00         126,219        100.00         152,116       100.00


b) By brand
                                        2009                         2010                         2011
                                 EUR '000        %            EUR '000        %            EUR '000         %
Haikui brand                       19,055        20.15          26,951        21.35          22,719         14.94
Third party brand                  75,489        79.85          99,268        78.65         129,397         85.06

Total                               94,544      100.00         126,219        100.00         152,116       100.00




                                                       F-26
5.       REVENUE (cont’d)

c) By marine species
                                      2009                        2010                    2011
                               EUR '000        %           EUR '000        %       EUR '000      %
Crab                             18,363        19.42         27,186        21.54     56,681      37.26
Prawn                            41,302        43.69         54,660        43.31     36,003      23.67
Fish                             14,228        15.05         24,554        19.45     43,768      28.77
Others                           20,651        21.84         19,819        15.70     15,664      10.30

Total                             94,544       100.00        126,219      100.00    152,116      100.00


d) By distribution channel
                                      2009                         2010                   2011
                               EUR '000        %           EUR '000        %       EUR '000      %
Overseas Distributors            58,820        62.21         86,353        68.42    103,531      68.06
Domestic Distributors            35,582        37.64         39,684        31.44     48,333      31.77
Direct Sales                        142         0.15             182        0.14        252       0.17

Total                             94,544       100.00        126,219      100.00    152,116      100.00



6.       COST OF SALES

Cost of sales can be broken down as follows:

a) By product category
                                      2009                        2010                    2011
                               EUR '000        %           EUR '000       %        EUR '000      %
Frozen                           66,285        91.40         87,583       90.89     100,501      88.00
Canned                            6,239         8.60          8,777        9.11      13,702      12.00

Total                            72,524        100.00        96,360       100.00    114,203      100.00


b) By marine species
                                      2009                        2010                    2011
                               EUR '000        %           EUR '000       %        EUR '000      %
Crab                             13,400        18.48         19,874       20.62      40,943      35.85
Prawn                            31,833        43.89         41,917       43.51      28,361      24.83
Fish                             10,992        15.16         18,700       19.41      32,910      28.82
Others                           16,299        22.47         15,869       16.46      11.989      10.50

Total                            72,524        100.00        96,360       100.00    114,203      100.00


c) By main components
                                     2009                         2010                    2011
                              EUR '000         %           EUR '000       %        EUR '000      %
Materials                       68,946         95.07         91,452       94.91     107,681      94.29
Direct Labour                    2,200          3.03          2,946        3.06       3,730       3.27
Manufacturing overheads          1,378          1.90          1,962        2.04       2,792       2.44

Total                             72,524       100.00        96,360       100.00    114,203      100.00




                                                    F-27
7.       GROSS PROFIT

Gross profit can be broken down as follows:

a) By product category
                                         2009                          2010                       2011
                                    EUR '000        %           EUR '000          %        EUR '000          %
Frozen                                19,929        90.50         26,723          89.49      33,195          87.56
Canned                                 2,091         9.50          3,136          10.51       4,718          12.44

Total                                  22,020      100.00           29,859       100.00         37,913      100.00


                                          2009                           2010                       2011
Gross margin (%)
Frozen                                    23.12                          23.38                      24.83
Canned                                    25.10                          26.32                      25.61

Overall                                   23.29                          23.66                      24.92


b) By marine species

                                         2009                           2010                       2011
                                    EUR '000         %           EUR '000         %         EUR '000     %
Crab                                   4,963         22.54          7,311        24.49        15,738    41.51
Prawn                                  9,469         43.01         12,743        42.67         7,642    20.16
Fish                                   3,236         14.69          5,854        19.61        10,858    28.64
Others                                 4,352         19.76          3,951        13.23         3,675     9.69

Total                                  22,020      100.00           29,859       100.00         37,913      100.00


                                          2009                          2010                        2011
Gross margin (%)
Crab                                      27.03                         26.89                      27.77
Prawn                                     22.93                         23.31                      21.23
Fish                                      22.74                         23.84                      24.81
Others                                    21.07                         19.93                      23.46

Overall                                   23.29                         23.66                      24.92



8.       OTHER INCOME

                                                                   Financial year ended 31 December
                                                               2009               2010             2011
                                                              EUR’000           EUR’000          EUR’000

Government grants                                                    359                  352                 172
Sale of scraps                                                       109                  261                 113
Others                                                                29                    4                   -

                                                                     497                  617                 285

Government grants received in 2011 were mainly for improvement in food safety technology and subsidy for
research and development efforts. Government grants received in 2010 were mainly incentives for improvement
in production technology and outstanding performance of the subsidiary, while those received in 2009 were
incentives for a subsidiary winning the 2008 Fujian Brand Company Prize.

There are no unfulfilled conditions or contingencies attached to these grants.




                                                       F-28
9.     DISTRIBUTION COST

                                                   Financial year ended 31 December
                                               2009               2010             2011
                                              EUR’000           EUR’000          EUR’000

Logistics                                           258               355              418
Inspection expenses                                 202               370              374
Sales taxes                                          19                35              480
Payroll                                              61                77              139
Advertising                                          60                93              109
Promotion expenses                                  135                 -                -
Other expenses                                       43                53               76

                                                    778               983            1,596


10.    ADMINISTRATIVE EXPENSES

                                                   Financial year ended 31 December
                                               2009               2010             2011
                                              EUR’000           EUR’000          EUR’000

Payroll                                             222               318              610
Staff welfare                                        98               111              185
Research and development expenses                   165               175              103
Entertainment expenses                               76                97              145
Depreciation                                         60               172              547
Audit fees                                           82               100              166
Office rental expenses and utilities                 42                17               17
IPO Expenses                                        249               202                -
Withholding tax                                     378                 -                -
Other expenses                                      320               392              596
Other taxes                                          81               112              213

                                                   1,773            1,696            2,582



11.    OTHER OPERATING EXPENSES

                                                   Financial year ended 31 December
                                               2009                2010            2011
                                              EUR’000           EUR’000          EUR’000

Donations                                             28               41                  39
Rental forfeited                                      15                -                   -
Others                                                 1                -                   9

                                                      44               41                  48




                                       F-29
12.    FINANCE (EXPENSES) / INCOME, NET

                                                                  Financial year ended 31 December
                                                              2009                2010            2011
                                                             EUR’000           EUR’000          EUR’000

Finance income
  Bank interest income                                               52                   74                     95
  Foreign exchange gains                                            226                    -                      -
  Amortisation of unearned interest                                  12                    -                      -

                                                                    290                   74                     95


Finance expenses
  Interest expenses – short term bank loans                         (17)                   -                    -
  Interest expenses – other borrowings                              (43)               (103)                 (14)
  Foreign exchange losses                                              -               (725)              (1,358)
  Bank charges                                                      (11)                (20)                (300)
  Amortisation of unearned interest                                    -               (568)                 (36)

                                                                    (71)              (1,416)             (1,708)
Finance income/ (expenses), net                                     219               (1,342)             (1,613)


Finance income relates to loans and receivables. Finance expenses relates to financial liabilities measured at
amortised cost


13.    ADDITIONAL DISCLOSURES ON THE NATURE OF EXPENSES

                                                                  Financial year ended 31 December
                                                              2009               2010             2011
                                                             EUR’000           EUR’000          EUR’000

Personnel expenses (see Note 14)                                  2,683                3,472                4,665
Depreciation of property, plant and equipment                       536                  665                1,413
Amortisation of intangibles                                          20                   28                   38
Operating lease expenses                                             41                   15                   17
Research and development expenses                                   165                  175                   52


14.    PERSONNEL EXPENSES

                                                                  Financial year ended 31 December
                                                              2009                2010            2011
                                                             EUR’000           EUR’000          EUR’000

Wages, salaries and bonuses*                                       2,545               3,303                4,310
Defined contribution pension plans                                    43                  58                  170
Other personnel expenses                                              95                 111                  185

                                                                   2,683               3,472                4,665


*This includes the amount shown as directors’ remuneration (see Note 33)




                                                      F-30
15.    INCOME TAX


Major components of income tax expenses for the financial years were:

                                                                Financial year ended 31 December
                                                            2009                2010            2011
                                                           EUR’000           EUR’000          EUR’000

Current income tax:
Current income tax charge                                        2,126                3,059         4,039

Deferred tax:
Relating to origination and reversal of temporary
 differences                                                            -               (2)           (13)

Income tax expense reported in the consolidated
  statements of comprehensive income                             2,126                3,057         4,026


No income taxes have been charged directly to the other comprehensive income.

Deferred tax relates to the following:

Consolidated Statements of Financial Position                               As at 31 December
                                                            2009                   2010          2011
                                                           EUR’000                EUR’000       EUR’000

Land use rights                                                         -               66             68
Property plant & equipment                                              -              173            199

Deferred tax assets reflected in the statement of
 financial position                                                     -              239            267


Consolidated Statements of Comprehensive
Income                                                          Financial year ended 31 December
                                                            2009                2010            2011
                                                           EUR’000           EUR’000          EUR’000

Land use rights                                                         -                 1              2
Property plant & equipment                                              -               (3)           (15)

Deferred tax income                                                     -              239            267


In the business combination in 2010 (see Note 4), deferred tax assets in the amount of kEUR 232 have been
recognised, relating to the following balance sheet items:

                                                                                                EUR’000

Land use rights                                                                                        65
Property plant & equipment                                                                            167

                                                                                                      232




                                                    F-31
15.    INCOME TAX (cont’d)



                                                                  Financial year ended 31 December
                                                              2009                2010            2011
                                                             EUR’000           EUR’000          EUR’000

Profit before income tax                                          20,141              26,393               32,359


Tax expenses based on the PRC tax rate of 24%
  (2010: 22%; 2009: 20%)                                           4,028               5,806                7,766
Effect of tax losses not carried forward                              46                  11                  147
Differences in the tax rates between PRC and
Singapore                                                              9                    4                   61
Other                                                                169                  295                   91
Tax concession of 50% reduction in tax rate                      (2,126)              (3,059)              (4,039)

Income tax expense reported in the consolidated
  statements of comprehensive income                               2,126               3,057                4,026


The effective tax rate in the years 2009, 2010 and 2011 amounted to 10.6%, 11.6% and 12.4%.

At 31 December 2011, there was no recognised deferred tax liability (2010: Nil, 2009: Nil) for taxes that would be
payable on the unremitted earnings of the Group’s subsidiary. There are no capital gains taxes imposed on China
Haikui Pte Ltd on gains realised from the disposal of investments under the Singapore tax regime.

No dividend has been declared for 2011. There are no income tax consequences attached to the payment of
dividends in either 2010 or 2009 by the Group to its shareholders.

The Company

The Company has no taxable income for the financial years ended 31 December 2009, 2010 and 2011. The
statutory income tax rate applicable to the Company was 17% (2010: 17%; 2009: 17%) for the periods ended 31
December 2009, 2010 and 2011.

The Singapore corporate tax rate was reduced to 17% for the year of assessment 2010 onward from 18% for the
year of assessment 2009.

The Group has tax losses which arose in Singapore of kEUR 33 (2010: kEUR 69, 2009: kEUR Nil). Due to the
change in the Company’s shareholdings in 2011, tax losses up to 31 December 2010 completely forfeited. Due to
the Company’s history of tax losses, no deferred tax assets have been recognized for the accumulated tax losses
subsequent to the change in shareholdings as of 31 December 2011. Pursuant to Singapore tax laws, these
accumulated tax losses do not expire, provided that there is no substantial change in the shareholdings and/or
there is no change in the principal activities of the Company. They may not be used to offset taxable income
elsewhere in the Group.

The Subsidiary

On 12 March 2007, the subsidiary, Fujian Haikui was converted into a foreign investment enterprise (“FIE”). From
this date, in accordance with the “Income Tax Law of the PRC applicable to Enterprises with Foreign Investment
and Foreign Enterprises”, the income tax on FIE engaged in production established in special economic zones
shall be levied at the reduced rate of 15% as compared to the statutory tax rate for PRC companies of 33%.

Fujian Haikui is further entitled to an exemption from Enterprise Income Tax (“EIT”) for the first two profitable
years of operation and thereafter a 50% reduction in EIT rate for the following three financial years (the “Tax
Holidays”).




                                                      F-32
15.    INCOME TAX (cont’d)

The first profitable year of the Fujian Haikui is the financial period ended 31 December 2007. Accordingly, there
was no tax payable for the financial year/period ended 31 December 2008 and 2007.

On 16 March 2007, the National People’s Congress of the PRC promulgated the “Enterprise Income Tax Law of
the PRC” (“EIT Law”) which has come into effect since 1 January 2008. The abovementioned “Income Tax Law of
the PRC for Enterprises with Foreign Investment and Foreign Enterprises” has been abolished by the newly
promulgated EIT Law. According to the transitional measures regulated by the EIT Law, Fujian Haikui is subject
to a progressive tax rate of 18%, 20%, 22% and 24% for periods 2008, 2009, 2010 and 2011 respectively.
Thereafter, with effect from fiscal year 2012, the applicable tax rate will be 25%. However, under the EIT Law,
Fujian Haikui may continue to enjoy total tax exemption for 2007 and 2008 and a 50% reduction in the new
applicable tax rate under the EIT Law in respect of 2009 to 2011.


16.    EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the company by the
weighted average number of ordinary shares in issue during the financial year.

                                                                          Financial year ended 31 December
                                                                      2009                2010            2011
                                                                     EUR’000           EUR’000          EUR’000

Profit for the financial year attributable to equity holder
  of the parent                                                          18,015           23,357             28,333


Weighted average number of issued and outstanding
 no par shares (in thousands)                                           566,200          566,200            566,200


Fully diluted earnings per share after stock split
 (in Euros)                                                                0.03             0.04                0.05

Pursuant to a resolution dated 25 February 2010, the directors of the Company approved the sub-division of
283,100,000 ordinary shares in the share capital of the Company into 566,200,000 ordinary shares. In
accordance with IAS 33.28, the number of shares outstanding before the event has been adjusted, as if the event
had occurred at the beginning of the earliest year presented.




                                                              F-33
17.    INTANGIBLE ASSETS

                                                          Land use rights         Goodwill             Total
                                                             EUR’000              EUR’000             EUR’000
Cost
As at 1 January 2009                                                 1,061                    -             1,061
Translation differences                                                (18)                   -               (18)

As at 31 December 2009/ 1 January 2010                               1,043                   -              1,043
Additions during the year                                              614                 696              1,310
Translation differences                                                140                  17                157

At 31 December 2010/ 1 January 2011                                  1,797                 713              2,510
Translation differences                                                107                  42                149

At 31 December 2011                                                  1,904                 755              2,659


Accumulated amortisation
As at 1 January 2009                                                 (228)                    -              (228)
Amortisation for the year                                             (20)                    -               (20)
Translation differences                                                  3                    -                  3

As at 31 December 2009/ 1 January 2010                               (245)                    -              (245)
Additions during the year                                             (28)                    -               (28)
Translation differences                                               (29)                    -               (29)

As at 31 December 2010/ 1 January 2011                               (302)                    -              (302)
Additions during the year                                             (38)                    -               (38)
Translation differences                                               (21)                    -               (21)

As at 31 December 2011                                               (361)                    -              (361)


Net carrying value
As at 31 December 2009                                                 798                    -               798


As at 31 December 2010                                               1,495                 713              2,208


As at 31 December 2011                                               1,543                 755              2,298


As at 31 December 2011, certain land use rights with a net carrying value of approximately kEUR 433 (2010:
kEUR 412; 2009: kEUR 378) have been pledged as security for the Group’s other borrowings as disclosed in
Note 30.

Land use rights are charged to the profit or loss on a straight-line basis over remaining lease period. Amortisation
of lease prepayments is included in “cost of sales”.




                                                       F-34
17.    INTANGIBLE ASSETS (cont’d)

In accordance with IAS 36 Impairment of Assets, the carrying values of the group’s goodwill on acquisition as at
31 December 2011 were assessed for impairment as of year end.

                                                                     Basis on
                                                                      which                           Pre-tax
                                                                   recoverable         Terminal       discoun
                                                 Goodwill           values are          growth         t rate
                                                 EUR’000           determined          rate (%)         (%)

Carrying value as at 31 December 2011               755            Value in use           3%            12.9%

Goodwill is allocated for impairment testing to the frozen seafood segment which is also the CGU. The value-in
use calculation applies a discounted cash flow model using cash flow projections based on financial budgets and
forecasts approved by management. The discount rate applied to the cash flow projections is derived from the
cost of capital plus a reasonable risk premium at the date of assessment of the respective CGU. The terminal
growth rate used does not exceed the long term average growth rate of the respective industry and country in
which the CGU operates.

A reasonable change to the assumptions used by the management to determine the impairment required,
particularly the discount rate and terminal growth rate, would not significantly affect the results.

No impairment loss was required for the financial period ended 31 December 2011 for the goodwill assessed as
their recoverable values were in excess of their carrying values.




                                                     F-35
       18.    PROPERTY, PLANT AND EQUIPMENT

                                                   Leasehold      Plant and                                            Furniture and
                                                   buildings      machinery      Office equipment    Motor vehicles       fittings        Total
                                                   EUR’000        EUR’000            EUR’000           EUR’000           EUR’000         EUR’000
       Cost
       As at 1 January 2009                              4,132          2,874                  63                45                47         7,161
       Additions                                              -             58                   8               62                 9           137
       Disposal                                               -              -                 (6)                 -                -            (6)
       Translation differences                             (71)           (51)                 (1)               (2)               (1)        (126)

       As at 31 December 2009 and 1 January 2010         4,061          2,881                  64              105                 55         7,166
       Additions                                         6,381          2,435                  36              356                  1         9,209
       Translation differences                             643            404                   8               22                  7         1,084

       As at 31 December 2010 and 1 January 2011        11,085          5,720               108                483                 63        17,459
       Additions                                            18            142                54                 42                  2           258
       Translation differences                             661            354                10                 32                  4         1,061
F-36




       As at 31 December 2011                           11,764          6,216               172                557                 69        18,778
       18.   PROPERTY, PLANT AND EQUIPMENT (cont’d)

                                                           Leasehold           Plant and                                                  Furniture and
                                                           buildings           machinery        Office equipment      Motor vehicles         fittings             Total
                                                            EUR’000             EUR’000              EUR’000             EUR’000            EUR’000             EUR’000
       Accumulated depreciation
       As at 1 January 2009                                        (588)               (686)                 (17)                (11)               (14)             (1,316)
       Depreciation charge                                         (209)               (293)                 (12)                (12)               (10)               (536)
       Disposal                                                        -                   -                    6                   -                  -                   6
       Translation differences                                        15                  21                    -                   1                  1                  38

       As at 31 December 2009/ 1 January 2010                      (782)               (958)                 (23)                (22)               (23)             (1,808)
       Depreciation charge                                         (248)               (305)                 (15)                (86)               (11)               (665)
       Translation differences                                      (98)               (123)                  (3)                 (4)                (3)               (231)

       As at 31 December 2010 and 1 January 2011                 (1,128)              (1,386)                (41)               (112)               (37)             (2,704)
       Depreciation charge                                         (538)                (742)                (23)                (99)               (11)             (1,413)
       Translation differences                                     (116)                (150)                 (4)                (17)                (3)               (290)
F-37




       As at 31 December 2011                                    (1,782)              (2,278)                (68)               (228)               (51)             (4,407)


       Net carrying value
       As at 31 December 2009                                      3,279               1,923                   41                  83                 32                  5,358


       As at 31 December 2010                                      9,957               4,334                   67                371                  26              14,755


       As at 31 December 2011                                      9,982               3,938                 104                 329                  18              14,371


       All property, plant and equipment held by the Group are located in the PRC.
       As at 31 December 2011, certain leasehold buildings with a net carrying value of approximately kEUR 345 (2010: kEUR 1,787; 2009: kEUR 2,187) has been pledged as
       security for the Group’s other borrowings (Note 30).
19.    OTHER NON-CURRENT ASSETS

Other non-current assets as of 31 December 2011 kEUR 1,067 (2010: kEUR 3,056; 2009: kEUR 1,841) reflects
long term advances paid to suppliers.


20.    INVENTORIES

                                                                          As at 31 December
                                                             2009                2010               2011
                                                            EUR’000            EUR’000             EUR’000

Seafood supplies                                                  8,261               6,109              3,019
Processed seafood                                                 5,322               9,140             20,680
Packaging materials and other consumables                            65                  68                193

                                                                 13,648             15,317              23,892


The cost of inventories recognised as expense and included in “cost of sales” amounted to kEUR 107,681 (2010:
kEUR 91,452; 2009: kEUR 68,946).


21.    TRADE AND OTHER RECEIVABLES

                                                                          As at 31 December
                                                             2009                2010               2011
                                                            EUR’000            EUR’000             EUR’000

Trade receivables                                                18,287             32,916              47,572
Value-added tax receivables                                       1,535              3,201               2,369

                                                                 19,822             36,117              49,941


The value-added tax receivables relate to value added tax refundable from the PRC taxation authority.


22.    OTHER CURRENT ASSETS

                                                                          As at 31 December
                                                             2009                2010              2011
                                                            EUR’000           EUR’000             EUR’000

Prepayments (current)                                               704             1,802                  981
Receivables due from holding company (non-trade)                      -                 -                1,653
Othe