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(Incorporated in Bermuda with limited liability)

(Stock Code: 494) RE-ORGANIZATION TO EXPAND VENDOR SERVICES

After a solid finish to 2013 which is in line with our previous announcements of operating financial performance returning to 2011 levels, Li & Fung Limited ("the Company" or "Li & Fung") is currently focusing on finalizing the next Three-Year Plan ("3YP") (2014 - 2106) to be announced in March 2014. As one of the new initiatives in the next 3YP, the Company is establishing a dedicated Vendor Support Services business unit to enhance factory and worker safety, raise standards and improve operational efficiencies in its global supply chain.
The Vendor Support Services business, including vendor compliance, will be led by Group Chairman Dr. William Fung Kwok Lun, and this new initiative will be expanded as an integral part of Li & Fung's new 3YP.
The new unit will incorporate the Company's existing range of vendor support services to factories plus new offerings that include product testing, provision of logistics support to factories, and other practical input to enable factories to move up the value chain. Presently, the Company's vendor support services include safety and compliance training and audits, trade credit services as well as the handling of letters of credit, product liability insurance, fabric, trims and accessories procurement, product development and technical and operations support.
The Company will continue to ensure that the provision of such vendor support services
conforms with the agreements on provision of services to the Company's customers.
While revenue generated from Vendor Support Services is a small part of the Company's total revenue, the Company views this new initiative as a key ingredient of its enhanced business offering in its new 3YP.
After a solid finish to 2013 which is in line with our previous announcements of operating financial performance returning to 2011 levels, the Company is currently focusing on finalizing the next 3YP to be announced in March 2014. The Company announces that as one of the new initiatives in the next 3YP, it will be reorganizing its vendor support services to focus more intensely on factory compliance following recent tragedies in the garment industry, as well as the on-going needs for stronger oversight. The Company is establishing a dedicated Vendor Support Services business unit to enhance factory and worker safety, raise standards and improve operational efficiencies in its global supply chain.
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The Vendor Support Services business, including vendor compliance, will be led by Group Chairman Dr. William Fung Kwok Lun and this initiative will be expanded as an integral part of Li & Fung's new 3YP to be unveiled during the Company's annual results announcement in March 2014.
The new unit will incorporate the Company's existing range of vendor support services to factories plus new offerings that include product testing, provision of logistics support to factories, and other practical input to enable factories to move up the value chain. Presently, the Company's vendor support services include safety and compliance training and audits, trade credit services as well as the handling of letters of credit, product liability insurance, fabric, trims and accessories procurement, product development and technical and operations support.
The Company already provides services to about 15,000 factories in its vendor base to enhance their competitiveness, operational efficiency and ability to comply with ever-tougher health and safety requirements.
As the leading sourcing company in the world, the Company believes its responsibility is to play an even bigger role in bringing about and speeding up systematic, positive change among vendors.
Introduced against the backdrop of the tragedies in Bangladesh, the expanded services come at a time when more garment production is moving into emerging economies and when credit for factory owners is tighter than ever.
Many of the Company's vendors have told the Company that they welcome the Company's skills, expertise and services to help them tackle these challenges and upgrade their operations.
The Company will continue to ensure that the provision of such vendor support services conforms with the agreements on provision of services to the Company's customers. The Group's goal is to create deeper and more secure partnerships with both our customers and vendors to enhance the overall efficiency of the entire supply chain.

While revenue generated from Vendor Support Services is a small part of the Company's total revenue, the Company views this new initiative as a key ingredient of its enhanced business offering in its new 3YP and an important component of the Company's efforts to improve sustainability in the global garment industry.
By Order of the Board William FUNG Kwok Lun Group Chairman
Hong Kong, 6 January 2014
Websites: www.lifung.com www.irasia.com/listco/hk/lifung
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As at the date ofthis announcement, Executive Directors ofthe Company are William Fung Kwok Lun (Group Chairman), Bruce Philip Rockowitz (Group President & Chief Executive Officer) and Spencer Theodore Fung (Group Chief Operating Officer); Non-executive Directors are Vietar Fung Kwok King (Honorary Chairman) and Benedict Chang Yew Teck; lndependent Non-executive Directors are Pau! Edward Selway-Swift, Al/an Wong Chi Yun, Franklin Warren McFarlan, Martin Tang Yue Nien, Fu Yuning and Margaret Leung Ko May Yee.

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