Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

MIDLAND HOLDINGS LIMITED

*

(Incorporated in Bermuda with limited liability)

(Stock Code: 1200) CONTINUING CONNECTED TRANSACTIONS

On 31 October 2012, Great Century and Universal Genius (both being indirect wholly- owned subsidiaries of the Company) and Crown Lucky (an indirect wholly-owned subsidiary of Midland IC&I) entered into three separate licences, which are Licence 1, Licence 2 and Licence 3, with Moral Winner. Moral Winner is indirectly wholly-owned by Mr. WONG, the Chairman, the Managing Director and an Executive Director of the Company. Accordingly, the Licences constitute continuing connected transactions for the Company under Rule 14A.14 of the Listing Rules.
The Licences and the Existing Leases aggregated together are subject to the reporting, annual review and announcement requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

A. PRINCIPAL TERMS OF THE LICENCES (a) Licence 1

The principal terms of Licence 1 entered into on 31 October 2012 are set out below:

1. Date

31 October 2012

2. Parties

(i) Great Century, an indirect wholly-owned subsidiary of the Company, as licensee; and

* For identification purpose only

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(ii) Moral Winner, a company indirectly wholly-owned by Mr. WONG, as licensor. The principal business of Moral Winner is property investment.

3. Nature of the Licence

Licence to install signage(s) to the external wall facing Argyle Street of the building known as "No. 33 Argyle" at Nos. 611-617 Shanghai Street and No. 33
Argyle Street, Kowloon

4. Term

One year from 1 November 2012 to 31 October 2013 (both days inclusive)

5. Licence fee

HK$65,000 per month (exclusive of government rent, government rates, management fees, electricity charges and all other relevant charges (if any)), payable in advance on the first day of each and every calendar month

(b) Licence 2

The principal terms of Licence 2 entered into on 31 October 2012 are set out below:

1. Date

31 October 2012

2. Parties

(i) Universal Genius, an indirect wholly-owned subsidiary of the Company, as licensee; and
(ii) Moral Winner, a company indirectly wholly-owned by Mr. WONG, as licensor. The principal business of Moral Winner is property investment.

3. Nature of the Licence

Licence to install signage(s) to the upper part of the external wall facing
Shanghai Street of the building known as "No. 33 Argyle" at Nos. 611-617
Shanghai Street and No. 33 Argyle Street, Kowloon

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4. Term

One year from 1 November 2012 to 31 October 2013 (both days inclusive)

5. Licence fee

HK$40,000 per month (exclusive of government rent, government rates, management fees, electricity charges and all other relevant charges (if any)), payable in advance on the first day of each and every calendar month

(c) Licence 3

The principal terms of Licence 3 entered into on 31 October 2012 are set out below:

1. Date

31 October 2012

2. Parties

(i) Crown Lucky, an indirect wholly-owned subsidiary of Midland IC&I, as licensee; and
(ii) Moral Winner, a company indirectly wholly-owned by Mr. WONG, as licensor. The principal business of Moral Winner is property investment.

3. Nature of the Licence

Licence to install signage(s) to the lower part of the external wall facing
Shanghai Street of the building known as "No. 33 Argyle" at Nos. 611-617
Shanghai Street and No. 33 Argyle Street, Kowloon

4. Term

One year from 1 November 2012 to 31 October 2013 (both days inclusive)

5. Licence fee

HK$68,000 per month (exclusive of government rent, government rates, management fees, electricity charges and all other relevant charges (if any)), payable in advance on the first day of each and every calendar month

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The Group had entered into the following Existing Leases prior to the Licences. The Existing Leases on their own are not subject to any reporting, annual review, announcement or independent shareholders' approval requirements. On the basis that the Existing Leases and the Licences would be aggregated together, these transactions collectively would be subject to the reporting, annual review and announcement requirements, but are exempt from the independent shareholders' approval requirement under Rule 14A.34 of the Listing Rules.

B. PRINCIPAL TERMS OF EXISTING LEASE 1

1. Date

15 October 2012

2. Parties

(i) Midland Corporate Services Limited, an indirect wholly-owned subsidiary of the
Company, as tenant; and
(ii) Moral Winner, a company indirectly wholly-owned by Mr. WONG, as landlord.
The principal business of Moral Winner is property investment.

3. Premises let

Rooms 603-604 on 6th Floor of the building known as "No. 33 Argyle" at Nos. 611-
617 Shanghai Street and No. 33 Argyle Street, Kowloon

4. Term

Two years from 15 October 2012 to 14 October 2014 (both days inclusive)

5. Rental

HK$24,425 per month (exclusive of management fees, air-conditioning charges, government rent, government rates and other outgoings), payable in advance on the first day of each and every calendar month

6. Rent-free period

Seven days from 15 October 2012 to 21 October 2012 (both days inclusive)

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7. Option to renew

Nil

C. PRINCIPAL TERMS OF EXISTING LEASE 2

1. Date

18 October 2012

2. Parties

(i) World Up Limited, an indirect wholly-owned subsidiary of the Company, as tenant; and
(ii) Titan Speed, a company wholly-owned by Mr. WONG, as landlord. The principal business of Titan Speed is property investment.

3. Premises let

Office 910 on 9th Floor, Tower Two of Lippo Centre, No. 89 Queensway, Hong
Kong

4. Term

Two years from 18 October 2012 to 17 October 2014 (both days inclusive)

5. Rental

HK$106,386 per month (exclusive of management fees, air-conditioning charges, government rent, government rates and other outgoings), payable in advance on the first day of each and every calendar month

6. Rent-free period

Nil

7. Option to renew

Nil

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D. ANNUAL CAPS AND RENTS

In addition to the Licences and the Existing Leases, the Group is leasing other properties under the Previous Leases made with associates of Mr. WONG. Further details are set out in the announcements of the Company dated 31 March 2010, 6 January 2011, 31 August
2011 and 30 April 2012.
The total annual rental and/or licence fees (as the case may be) payable under the Licences, the Existing Leases and the Previous Leases taken together for each of the three years ending 31 December 2012, 2013 and 2014 is HK$9,381,451, HK$9,040,760 and HK$2,206,224 respectively. Based on the said total annual rental and/or licence fees (as the case may be) payable, the aggregate annual cap for all of these leases and licences for each of the three years ending 31 December 2012, 2013 and 2014 is HK$9,600,000, HK$9,300,000 and HK$2,500,000 respectively.

E. REASONS FOR ENTERING INTO THE CONTINUING CONNECTED TRANSACTIONS

The Group is principally engaged in the provision of property agency services in Hong
Kong, Macau and the PRC.
The premises are leased under the Existing Leases as back office of the Group and for the immigration consultancy business of the Group respectively. The signages to be installed pursuant to the Licences will be used for marketing and promotion of the estate agency business of the Group. The terms of the Existing Leases and the Licences are determined after arm's length negotiation between the parties with reference to comparable transactions and the prevailing market conditions. The Directors (including the independent non-executive Directors) are of the view that the Existing Leases and the Licences are entered into on normal commercial terms, in the ordinary and usual course of business of the Group and that their terms and the annual caps set out above are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

F. LISTING RULES IMPLICATIONS

Each of Moral Winner and Titan Speed is wholly-owned by Mr. WONG, the Chairman, the Managing Director and an Executive Director of the Company. The Licences accordingly constitute continuing connected transactions for the Company under Rule
14A.14 of the Listing Rules.
The Licences on their own are not subject to any reporting, annual review, announcement or independent shareholders' approval requirements as the highest of the applicable percentage ratios under Chapter 14A of the Listing Rules in respect of the annual licence fees payable under the Licences is less than 0.1%. On the basis that the Licences and the

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Existing Leases are aggregated together pursuant to Rule 14A.25 of the Listing Rules, the highest of the applicable percentage ratios in respect of the Annual Rental exceeds 0.1% but all of these ratios are less than 5%. Accordingly, the Existing Leases and the Licences collectively are subject to the reporting, annual review and announcement requirements only but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
Mr. WONG, Ms. TANG Mei Lai, Metty (Mr. WONG's spouse) and Ms. WONG Ching Yi, Angela (Mr. WONG's daughter) are considered to be interested in the Existing Leases and the Licences and all of them have abstained from voting on the relevant resolutions of the Board approving the same.

G. DEFINITIONS

The following expressions in this announcement have the meanings set out below unless the context requires otherwise:
"Annual Rental" the annual rental payable under the Existing Leases and the annual licence fees payable under the Licences
"associate" has the meaning ascribed thereto in the Listing Rules
"Board" the board of Directors
"Company" Midland Holdings Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Stock Exchange
"Crown Lucky" Crown Lucky Investment Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly- owned subsidiary of Midland IC&I
"Directors" the directors of the Company
"Existing Lease 1" the tenancy agreement dated 15 October 2012 entered into between Midland Corporate Services Limited as tenant and Moral Winner as landlord in respect of the leasing of an office in Rooms 603-604 on 6th Floor of the building known as "No. 33 Argyle" at Nos. 611-617 Shanghai Street and No.
33 Argyle Street, Kowloon

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"Existing Lease 2" the tenancy agreement dated 18 October 2012 entered into between World Up Limited as tenant and Titan Speed as landlord in respect of the leasing of an office in Office 910 on
9th Floor, Tower Two of Lippo Centre, No. 89 Queensway, Hong Kong
"Existing Leases" collectively the Existing Lease 1 and Existing Lease 2
"Great Century" Great Century (H.K.) Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly- owned subsidiary of the Company
"Group" the Company and its subsidiaries
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong" the Hong Kong Special Administrative Region of the PRC
"Licence 1" the licence agreement dated 31 October 2012 entered into between Great Century as licensee and Moral Winner as licensor in respect of the grant of licence to install signage(s) at the external wall facing Argyle Street of the building known as "No. 33 Argyle" at Nos. 611-617 Shanghai Street and No. 33 Argyle Street, Kowloon
"Licence 2" the licence agreement dated 31 October 2012 entered into between Universal Genius as licensee and Moral Winner as licensor in respect of the grant of licence to install signage(s) at the upper part of the external wall facing Shanghai Street of the building known as "No. 33 Argyle" at Nos. 611-617
Shanghai Street and No. 33 Argyle Street, Kowloon
"Licence 3" the licence agreement dated 31 October 2012 entered into between Crown Lucky as licensee and Moral Winner as licensor in respect of the grant of licence to install signage(s) at the lower part of the external wall facing Shanghai Street of the building known as "No. 33 Argyle" at Nos. 611-617
Shanghai Street and No. 33 Argyle Street, Kowloon
"Licences" collectively Licence 1, Licence 2 and Licence 3
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange

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"Macau" the Macau Special Administrative Region of the PRC
"Midland IC&I" Midland IC&I Limited, a company incorporated in the Cayman Islands with limited liability and a subsidiary of the Company, whose shares are listed on the Stock Exchange
"Moral Winner" Moral Winner Investment Limited, a company incorporated in Hong Kong with limited liability and indirectly wholly-owned by Mr. WONG
"Mr. WONG" Mr. WONG Kin Yip, Freddie, the Chairman, the Managing
Director and an Executive Director of the Company
"PRC" the People's Republic of China which, for the purpose of this announcement, excludes Hong Kong, Macau and Taiwan
"Previous Leases" collectively the leases as disclosed in the announcements of the Company dated 31 March 2010, 6 January 2011, 31
August 2011 and 30 April 2012 "Shareholder(s)" shareholder(s) of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Titan Speed" Titan Speed Limited, a company incorporated in the British Virgin Islands with limited liability and wholly-owned by Mr. WONG
"Universal Genius" Universal Genius Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company
By order of the Board

MOK Ka Fai

Company Secretary

Hong Kong, 31 October 2012

As at the date of this announcement, the Board comprises nine Directors, of which six are Executive Directors, namely Mr. WONG Kin Yip, Freddie, Ms. TANG Mei Lai, Metty, Ms. WONG Ching Yi, Angela, Mr. CHAN Kwan Hing, Ms. IP Kit Yee, Kitty and Mr. CHEUNG Kam Shing; and three are Independent Non-executive Directors, namely Mr. KOO Fook Sun, Louis, Mr. SUN Tak Chiu and Mr. WANG Ching Miao, Wilson.

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