BBMG Corporation - Proxy Solicitation & Information Statement 2010

THE CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountants or other professional adviser.

If you have sold or transferred all your shares in the Company, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s) or to the bank, stockbroker, or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2009)

DISCLOSEABLE AND CONNECTED TRANSACTIONS

ACQUISITIONS OF EQUITY INTERESTS IN SIXTEEN ENTITIES AND ACQUISITIONS OF ASSETS OF TWO ENTITIES

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

China Everbright Capital Limited

The notice dated 11 June 2010 convening the EGM of the company to be held at Conference Room 6, 22nd Floor, Tower D, Global Trade Centre, No. 36, North Third Ring East Road, Dongcheng District, Beijing, the People’s Republic of China on Tuesday, 27 July 2010 at 2:30 p.m. are set out on pages 165 to 166 of this circular. Whether or not you intend to attend the meeting, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return the relevant form to the headquarters of the Company at Room 2220, 22nd Floor, Tower D, Global Trade Centre, No.36, North Third Ring East Road, Dongcheng District, Beijing 100013, the People’s Republic of China (for holders of Domestic Shares and unlisted foreign Shares), or the office of the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H Shares) as soon as possible and in any event not less than 24 hours before the time appointed for the holding of the meeting or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting at the meeting or any adjournment thereof (as the case may be) should you so wish.

11 June 2010

for identification purpose only

CONTENT

	Page
DEFINITIONS 1
LETTER FROM THE BOARD	11
1 INTRODUCTION	11
2 THE EQUITY ACQUISITIONS AND THE ASSET ACQUISITIONS 12
3 THE EGM 63
4 POLL AT GENERAL MEETING	63
5 INDEPENDENT BOARD COMMITTEE AND
INDEPENDENT FINANCIAL ADVISER	64
6 RECOMMENDATION	64
7 ADDITIONAL INFORMATION 64
LETTER FROM THE INDEPENDENT BOARD COMMITTEE	65
LETTER FROM CHINA EVERBRIGHT	67
APPENDIX I – PROPERTY VALUATION REPORT 93
APPENDIX II – GENERAL INFORMATION 159
NOTICE OF EGM	165

DEFINITION

In this circular, the following expressions shall have the following meanings, unless the context otherwise requires:

“Agreements”
the Equity Acquisition Agreements and the Asset Acquisition Agreements
“Acquired Assets”
the Beijing Pinggu Site and the properties and facilities built thereon together with the BBMG Landao Site and the BBMG Landao Building
“Acquired Subsidiaries” individually or collectively, Tianjin Jinzhu Concrete, Beijing Cement Plant, Beijing Eco-island, Beijing Yaxin, Beijing Longshuncheng, Crane Beijing, Beijing Yanshan Cement, Beijing Architectural Decoration, Badaling Travel, Beijing Zhongweisenhai, BBMG Dacheng, Beijing Ganlujiayuan, Beijing Yuandongjiemei, BBMG Hong Kong, BBMG Human Resources and BBMG Hongye
“Acquisition Agreements”
the Zhenxing Cement Acquisition Agreement, the Zhangjiakou Cement Acquisition Agreement, the Quyang Cement Acquisition Agreement, the Yongxing Cement Acquisition Agreement, the Dacheng Development Acquisition Agreement and the Shanghai Sanming Acquisition Agreement as disclosed in the announcement of the Company dated 17 January 2010 and the circular of the Company dated 11 February 2010
“AIC”
the State Administration for Industry and Commerce of the People’s Republic of China or its relevant local counterpart
“Asset Acquisition Agreements”
the Beijing Pinggu Acquisition Agreement and the BBMG Landao Building Acquisition Agreement
“Asset Acquisitions”
the Beijing Pinggu Acquisition and the BBMG Landao Building Acquisition
“Asset Valuation Report”
the asset valuation report(s) prepared by 北京六合正旭資產評估有限責任公司 (Beijing Liuhe Zhengxu Asset Valuation Co., Ltd.*) in respect of each of the Acquired Subsidiaries and the Acquired Assets
“Badaling Travel”
北京金隅八達嶺溫泉度假村有限責任公司 (BBMG Badaling Hotspring Resort Co., Ltd.*), a limited liability company established on 13 March 1997 under the laws of the PRC
“Badaling Travel Acquisition”
the acquisition by the Company from the Parent of a 100% equity interest in Badaling Travel
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DEFINITION

“Badaling Travel Acquisition Agreement”
“BBMG Assets Operation”
“BBMG Dacheng”
“BBMG Dacheng Acquisition”
“BBMG Dacheng Acquisition Agreement”
“BBMG Home”
“BBMG Hong Kong”
“BBMG Hong Kong Acquisition”
“BBMG Hong Kong Acquisition Agreement”
“BBMG Hongye”
“BBMG Hongye Acquisition”
“BBMG Hongye Acquisition Agreement”
the equity transfer agreement dated 31 May 2010 entered into between the Company and the Parent in respect of the Badaling Travel Acquisition
北京金隅資產經營管理有限公司 (BBMG Assets Operation and Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 13 November 2007
北京金隅大成物業管理有限公司 (BBMG Dacheng Property Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 1 September 1992
the acquisition by the Company from Dacheng Property of a 100% equity interest in BBMG Dacheng
the acquisition agreement dated 31 May 2010 entered into between the Company and Dacheng Property in respect of the BBMG Dacheng Acquisition
北京金隅家居有限公司 (BBMG Home Furnishing Co., Ltd.*), a limited liability company established under the laws of the PRC on 11 June 2007
BBMG Hong Kong Limited 金隅香港有限公司, a limited liability company established under the laws of Hong Kong on 21 February 1984
the acquisition by the Company from the Parent and Beijing Furniture of a 100% equity interest in BBMG Hong Kong
the equity transfer agreement dated 31 May 2010 entered into among the Company, the Parent and Beijing Furniture in respect of the BBMG Hong Kong Acquisition
北京金隅宏業生態科技有限責任公司 (BBMG Hongye Ecological Science and Technology Co., Ltd.*) a limited liability company established under the laws of the PRC on 30 September 2007

the acquisition by the Company from the Parent of a 100% equity interest in BBMG Hongye

the equity transfer agreement dated 31 May 2010 entered into between the Company and the Parent in respect of the BBMG Hongye Acquisition

DEFINITION

“BBMG Human Resources”
“BBMG Human Resources Acquisition”
“BBMG Human Resources Acquisition Agreement”
“BBMG Landao Building”
“BBMG Landao Building Acquisition”
“BBMG Landao Building Acquisition Agreement”
“BBMG Landao Site”
“BBMG Property Management”
“Beijing Architectural Decoration”
“Beijing Architectural Decoration Acquisition”
“Beijing Architectural Decoration Acquisition Agreement”
“Beijing Building Materials”

北京金隅人力資源管理有限公司 (BBMG Human Resources Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 15 May 2009

the acquisition by BBMG Property Management from the Parent of a 100% equity interest in BBMG Human Resources
the equity transfer agreement dated 31 May 2010 entered into between the BBMG Property Management and the Parent in respect of the BBMG Human Resources Acquisition

a building with an actual GFA of approximately 16,930.15 sq.m. located at the BBMG Landao Site

the acquisition by the Company from the Parent of the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon and all the interests and rights attached thereto

the asset transfer agreement dated 31 May 2010 entered into between the Company and the Parent in respect of the BBMG Landao Building Acquisition

the parcel of land located at No.1 Anningzhuang East Road, Qinghe, Haidian District, Beijing, PRC

北京金隅物業管理有限責任公司 (BBMG Property Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 8 October 1997
北京市建築裝飾設計工程有限公司 (Beijing Architectural Decoration, Design and Engineering Co., Ltd.*), a limited liability company established under the laws of the PRC on 1 March 1983

the acquisition by the Company from the Parent of a 100% equity interest in Beijing Architectural Decoration

the equity transfer agreement dated 31 May 2010 entered into between the Company and the Parent in respect of the Beijing Architectural Decoration Acquisition

北京市建築材料銷售中心 (Beijing Building Materials Sales Centre*), a state-owned enterprise established under the laws of the PRC on 28 May 1992

DEFINITION

“Beijing Building Materials Group” 北京建築材料集團總公司實業發展公司 (Beijing Building Materials Group Corporation Industrial & Commerce Development Co., Ltd.*), a collectively-owned enterprise established under the laws of the PRC on 8 December 1993
“Beijing Cement Plant”

北京水泥廠有限責任公司 (Beijing Cement Plant Co., Ltd.*), a limited liability company established on 31 May 2000 under the laws of the PRC

“Beijing Cement Plant Acquisition” the acquisition by the Company from the Parent of a 33.88% equity interest in Beijing Cement Plant
“Beijing Cement Plant Acquisition Agreement”

the equity transfer agreement dated 31 May 2010 entered into between the Company and the Parent in respect of the Beijing Cement Plant Acquisition

“Beijing Eco-island” 北京市生態島科技有限責任公司 (Beijing Eco-island Science and Technology Co., Ltd.*), a limited liability company established under the laws of the PRC on 17 April 2006

“Beijing Eco-island Acquisition” the acquisition by the Company from the Parent of a 100% equity interest in Beijing Eco-island
“Beijing Eco-island Acquisition Agreement”
the equity transfer agreement dated 31 May 2010 entered into between the Company and the Parent in respect of the Beijing Eco-island Acquisition
“Beijing Furniture”

北京市傢俱公司 (Beijing Furniture Co., Ltd.*), a limited liability company established under the laws of the PRC on 20 December 1986

“Beijing Ganlujiayuan”

北京甘露家園物業管理有限責任公司 (Beijing Ganlujiayuan Property Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 20 February 2001

“Beijing Ganlujiayuan Acquisition” the acquisition by Beijing Jinhaiyan from the Parent of a 100% equity interest in Beijing Ganlujiayuan
“Beijing Ganlujiayuan Acquisition the equity transfer agreement dated 31 May 2010 entered into Agreement” between Beijing Jinhaiyan and the Parent in respect of the Beijing Ganlujiayuan Acquisition
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DEFINITION

“Beijing Jianji”
“Beijing Jinhaiyan”
“Beijing Longshuncheng”
“Beijing Longshuncheng Acquisition”
“Beijing Longshuncheng Acquisition Agreement”
“Beijing Pinggu”
“Beijing Pinggu Acquisition”
“Beijing Pinggu Acquisition Agreement”
“Beijing Pinggu Site”
“Beijing SASAC”
“Beijing Yanshan Cement”
“Beijing Yanshan Cement Acquisition”

北京建機資產經營有限責任公司 (Beijing Jianji Assets Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 2 February 1957

北京金海燕物業管理有限公司 (Beijing Jinhaiyan Property Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 25 April 1996

北京市龍順成中式傢俱廠 (Beijing Longshuncheng Chinese Style Furniture Plant*), a state-owned enterprise established under the laws of the PRC on 31 December 1994

the acquisition by Tiantan Furniture from Beijing Building Materials of a 100% equity interest in Beijing Longshuncheng

the acquisition agreement dated 31 May 2010 entered into between Tiantan Furniture and Beijing Building Materials in respect of the Beijing Longshuncheng Acquisition
北京市平谷區水泥二廠有限公司 (Beijing Pinggu No.2 Cement Plant Co., Ltd.*), a limited liability company established under the laws of the PRC on 5 February 2007
the acquisition by the Company from Beijing Pinggu of the land use right of the Beijing Pinggu Site and the properties and facilities built thereon and all the interests and rights attached thereto
the asset transfer agreement dated 31 May 2010 entered into between the Company and Beijing Pinggu in respect of the Beijing Pinggu Acquisition
the parcel of land located at No.11, Tai Ping Road East, Mafang Town, Pinggu District, Beijing, PRC

the State-owed Assets Supervision and Administration Commission of People’s Government of Beijing Municipality

北京市燕山水泥有限公司 (Beijing Yanshan Cement Co., Ltd.*), a limited liability company established under the laws of the PRC on 1 May 1959

the acquisition by the Company from the Parent a 100% equity interest in Beijing Yanshan Cement

DEFINITION

“Beijing Yanshan Cement Acquisition Agreement”
“Beijing Yaxin”
“Beijing Yaxin Acquisition”
“Beijing Yaxin Acquisition Agreement”
“Beijing Yuandongjiemei”
“Beijing Yuandongjiemei Acquisition”
“Beijing Yuandongjiemei Acquisition Agreement”
“Beijing Zhongweisenhai”
“Beijing Zhongweisenhai Acquisition”
“Beijing Zhongweisenhai Acquisition Agreement”
“Board”
“BOC”

the equity transfer agreement dated 31 May 2010 entered into between the Company and the Parent in respect of the Beijing Yanshan Cement Acquisition

北京亞新特種建材有限責任公司 (Beijing Yaxin Special Building Materials Co., Ltd.*), a limited liability company established under the laws of the PRC on 1 October 1980

the acquisition by the Company from BBMG Assets Operation of a 100% equity interest of Beijing Yaxin

the equity transfer agreement dated 31 May 2010 entered into between the Company and BBMG Assets Operation in respect of the Beijing Yaxin Acquisition

北京遠東潔美服務公司 (Beijing Yuandongjiemei Services Company*), a state-owned enterprise established under the laws of the PRC on 26 September 1992

the acquisition by BBMG Property Management from Beijing Building Materials Group of a 100% equity interest of Beijing Yuandongjiemei

the equity transfer agreement dated 31 May 2010 entered into between BBMG Property Management and Beijing Building Materials Group in respect of the Beijing Yuandongjiemei Acquisition
北京中威森海物業管理有限公司 (Beijing Zhongweisenhai Property Management Co., Ltd.*), a limited liability company established under the laws of the PRC on 15 May 1981
the acquisition by Beijing Jianji from the Parent of a 100% equity interest of Beijing Zhongweisenhai
the equity transfer agreement dated 31 May 2010 entered into between Beijing Jianji and the Parent in respect of the Beijing Zhongweisenhai Acquisition

the board of Directors

Bank of China, Beijing Olympics Village Branch
6 -

DEFINITION

“China Everbright”
China Everbright Capital Limited, a corporation licensed to carry out type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the reasonableness and fairness of the terms of each of the Equity Acquisition Agreements and the Asset Acquisition Agreements and the transactions contemplated thereunder
“Company” 北京金隅股份有限公司 (BBMG Corporation*) (Stock Code: 2009), a joint stock company established under the laws of the PRC with limited liability on 22 December 2005, the H Shares of which are listed on the Main Board of the Stock Exchange
“Crane Beijing”
珂恩（北京）建材有限公司 (Crane (Beijing) Building Materials Co., Ltd.*), a limited liability company established under the laws of the PRC on 27 December 2007
“Crane Beijing Acquisition”
the acquisition by BBMG Home from Beijing Building Materials of a 67.5% equity interest in Crane Beijing
“Crane Beijing Acquisition Agreement”
the equity agreement dated 31 May 2010 entered into between Beijing Building Materials and BBMG Home in respect of the Crane Beijing Acquisition
“Dacheng Building”
a building with an actual GFA of approximately 42,753.65 sq.m. located at No.127, Xuanwumen West Main Street, Xicheng District, Beijing, PRC
“Dacheng Property” 北京大成房地產開發有限責任公司 (Beijing Dacheng Property Development Co., Ltd.*), a limited liability company established under the laws of the PRC on 21 November 1984
“Director(s)”
director(s) of the Company
“Domestic Shares”
ordinary domestic share(s) of nominal value of RMB1.00 each in the share capital of the Company which are subscribed for or credited as fully paid in RMB by PRC citizens and/or PRC incorporated entities
7 -

DEFINITION

“EGM”

the extraordinary general meeting of the Company to be convened at Conference Room 6, 22nd Floor, Tower D, Global Trade Centre, No. 36, North Third Ring East Road, Dongcheng District, Beijing, the People’s Republic of China on Tuesday, 27 July 2010 at 2:30 p.m., for the purpose of considering and, if though fit, approving the terms of the Agreements and the transactions contemplated thereunder

“Enlarged Group” the Group as enlarged by the Equity Acquisitions upon completion
“Equity Acquisition Agreements” the Tianjin Jinzhu Concrete Acquisition Agreement, the Beijing Cement Plant Acquisition Agreement, the Beijing Eco-island Acquisition Agreement, the Beijing Yaxin Acquisition Agreement, the Beijing Longshuncheng Acquisition Agreement, the Crane Beijing Acquisition Agreement, the Beijing Yanshan Cement Acquisition Agreement, the Beijing Architectural Decoration Acquisition Agreement, the Badaling Travel Acquisition Agreement, the Beijing Zhongweisenhai Acquisition Agreement, the BBMG Dacheng Acquisition Agreement, the Beijing Ganlujiayuan Acquisition Agreement, the Beijing Yuandongjiemei Acquisition Agreement, the BBMG Hong Kong Acquisition Agreement, the BBMG Human Resources Acquisition Agreement and the BBMG Hongye Acquisition Agreement
“Equity Acquisitions” the Tianjin Jinzhu Concrete Acquisition, the Beijing Cement Plant Acquisition, the Beijing Eco-island Acquisition, the Beijing Yaxin Acquisition, the Beijing Longshuncheng Acquisition, the Crane Beijing Acquisition, the Beijing Yanshan Cement Acquisition, the Beijing Architectural Decoration Acquisition, the Badaling Travel Acquisition, the Beijing Zhongweisenhai Acquisition, the BBMG Dacheng Acquisition, the Beijing Ganlujiayuan Acquisition, the Beijing Yuandongjiemei Acquisition, the BBMG Hong Kong Acquisition, the BBMG Human Resources Acquisition and the BBMG Hongye Acquisition
“GFA” gross floor area
“Group” the Company and its subsidiaries
“H Shares”
oversea listed foreign shares in the ordinary share capital of the Company with a nominal value of RMB1.00 each, listed on the Stock Exchange
“HKD” Hong Kong Dollar, the lawful currency of Hong Kong
8 -

DEFINITION

“HKFRS” Hong Kong Financial Reporting Standards
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“Independent Board Committee” the independent board committee of the Company formed by all the independent non-executive Directors to advise the Independent Shareholders in relation to the reasonableness and fairness of the terms of each of the Equity Acquisition Agreements and the Asset Acquisition Agreements and the transactions contemplated thereunder
“Independent Shareholders” Shareholders (other than the Parent Group and its associates) who are not required to abstain from voting at the EGM for the relevant resolution
“Latest Practicable Date” 9 June 2010, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular
“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“Parent” 北京金隅集團有限責任公司 (BBMG Group Company Limited*), a limited liability company established under the laws of the PRC on 6 December 1996, a wholly-owned subsidiary of the Beijing SASAC, being the controlling shareholder of the Company holding approximately 45.27% of the issued share capital of the Company as at the Latest Practicable Date
“Parent Group” the Parent and its subsidiaries, excluding the Company and its subsidiaries
“PRC” the People’s Republic of China
“PRC GAAP” the generally accepted accounting practice and principles in the PRC
“RMB” Renminbi, the lawful currency of the PRC
“Savills” Savills Valuation and Professional Services Limited (第一太平戴維斯估值及專業顧問有限公司)
“SFO” the Securities and Futures Ordinance, Chapter 571 of the laws of Hong Kong, as amended, supplemented or otherwise modified from time to time
9 -

DEFINITION

“Share(s)”
“Shareholder(s)”
“Stock Exchange”
“Supplemental Agreement”
“Tianjin Jinzhu Concrete”
“Tianjin Jinzhu Concrete Acquisition”
“Tianjin Jinzhu Concrete Acquisition Agreement”
“Tiantan Furniture”
“%”

ordinary share(s) in the capital of the Company with a nominal value of RMB1.00 each, comprising H Shares, domestic share and unlisted foreign shares

holder(s) of the Share(s)

The Stock Exchange of Hong Kong Limited

the supplemental agreement dated 9 June 2010 entered into among the Company, BBMG Property Management, BBMG Home, Beijing Jinhaiyan, Tiantan Furniture and Beijing Jianji as purchasers, and the Parent, Dacheng Property, BBMG Assets Operation, Beijing Furniture, Beijing Building Materials, Beijing Building Materials Group and Beijing Pinggu as vendors, to amend and supplement the terms of the Equity Acquisition Agreements and the Asset Acquisition Agreements

天津金築混凝土有限公司 (Tianjin Jinzhu Concrete Co., Ltd.*), a limited liability company established under the laws of the PRC on 31 October 2008

the acquisition by the Company from Dacheng Property of a 100% equity interest in Tianjin Jinzhu Concrete

the equity transfer agreement dated 31 May 2010 between the Company and Dacheng Property in respect of the Tianjin Jinzhu Concrete Acquisition

北京天壇股份有限公司 (Beijing Tiantan Corporation*), a joint stock company established under the laws of the PRC on 28 December 1999

per cent.

for identification purpose only
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LETTER FROM THE BOARD

==> picture [244 x 80] intentionally omitted <==

(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2009)

Executive Directors: Jiang Weiping Li Changli Jiang Deyi Shi Xijun Wang Hongjun Deng Guangjun

Non-executive Director:

Zhou Yuxian

Headquarters: Tower D, Global Trade Centre 36 North Third Ring East Road Dongcheng District, Beijing 100013 the PRC

Registered office and principal place of Business in the PRC: 36 North Third Ring East Road Dongcheng District, Beijing 100013 the PRC

Independent non-executive Directors:

Hu Zhaoguang Xu Yongmo Zhang Chengfu Yip Wai Ming

Principal place of business in Hong Kong: Room 904, Wah Ying Cheong Central Building 158 – 164 Queen’s Road Central, Hong Kong 11 June 2010

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTIONS

ACQUISITIONS OF EQUITY INTERESTS IN SIXTEEN ENTITIES AND ACQUISITIONS OF ASSETS OF TWO ENTITIES

1. INTRODUCTION

Reference is made to (i) the announcement of the Company dated 31 May 2010 in relation to the Equity Acquisitions and the Asset Acquisitions and (ii) the announcement of the Company dated 9 June 2010 in relation to the Supplemental Agreement regarding the Equity Acquisitions and the Asset Acquisitions.

for identification purpose only
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LETTER FROM THE BOARD

The purposes of this circular are (i) to provide you with further information on the Equity Acquisitions and the Asset Acquisitions, (ii) to set out the recommendations of the Independent Board Committee regarding the Equity Acquisitions and the Asset Acquisitions; (iii) to set out the letter from China Everbright, the independent financial adviser to the Independent Board Committee, in respect of the reasonableness and fairness of the terms and conditions of each of the Equity Acquisitions and the Asset Acquisitions; and (iv) to give you notice of the EGM.

2. THE EQUITY ACQUISITIONS AND THE ASSET ACQUISITIONS

(A) THE EQUITY ACQUISITIONS

The Company announced that on 31 May 2010, the Company or its subsidiaries (as purchaser) and the Parent or its subsidiaries (as vendor) entered into the following Equity Acquisition Agreements in respect of the sale and purchase of the equity interests in each of the Acquired Subsidiaries. The Company further announced that on 9 June 2010, the Company and its subsidiaries (as purchasers) and the Parent and its subsidiaries (as vendors) entered into the Supplemental Agreement to amend and supplement the terms of the Agreements in order to make the Agreements inter-conditional upon each other.

(1) Acquisition of 100% of the equity interest in Tianjin Jinzhu Concrete

On 31 May 2010, the Company entered into the Tianjin Jinzhu Concrete Acquisition Agreement with Dacheng Property, pursuant to which Dacheng Property has agreed to sell to the Company, and the Company has agreed to acquire from Dacheng Property, 100% of the equity interest in Tianjin Jinzhu Concrete for a total consideration of RMB16,554,100 subject to the conditions and in accordance with the terms of the Tianjin Jinzhu Concrete Acquisition Agreement. The principal terms of the Tianjin Jinzhu Concrete Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties

Vendor: Dacheng Property Purchaser: The Company

Dacheng Property is a wholly-owned subsidiary of the Parent, which in turn is the substantial shareholder of the Company. Dacheng Property is therefore a connected person of the Company for the purposes of the Listing Rules.

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LETTER FROM THE BOARD

3. Subject matter

Pursuant to the Tianjin Jinzhu Concrete Acquisition Agreement, Dacheng Property has agreed to sell to the Company, and the Company has agreed to acquire from Dacheng Property, the 100% equity interest in Tianjin Jinzhu Concrete and all the rights attached thereto for a total consideration of RMB16,554,100 subject to the conditions and in accordance with the terms of the Tianjin Jinzhu Concrete Acquisition Agreement.

4. Consideration and payment

The consideration for the Tianjin Jinzhu Concrete Acquisition is RMB16,554,100 which is payable by the Company to Dacheng Property in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Tianjin Jinzhu Concrete Acquisition.

The consideration for the Tianjin Jinzhu Concrete Acquisition was determined after an arm’s length negotiation between the Company and Dacheng Property with reference to, among other factors, the appraised value of the 100% equity interest in Tianjin Jinzhu Concrete determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Tianjin Jinzhu Concrete as at 31 March 2010 was approximately RMB16,554,100.

5. Conditions precedent

Completion of the Tianjin Jinzhu Concrete Acquisition is subject to the fulfillment of the following conditions:

(i) the Tianjin Jinzhu Concrete Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of Dacheng Property and the Company;
(ii) Dacheng Property and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Tianjin Jinzhu Concrete;
(iii) the approval from Beijing SASAC in respect of the Tianjin Jinzhu Concrete Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Tianjin Jinzhu Concrete having been approved by or filed to Beijing SASAC;
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LETTER FROM THE BOARD

(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in Tianjin Jinzhu Concrete and Tianjin Jinzhu Concrete to the satisfaction of the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Tianjin Jinzhu Concrete Acquisition Agreement and the Tianjin Jinzhu Concrete Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Tianjin Jinzhu Concrete Acquisition Agreement or any later date as agreed by the Company and Dacheng Property in writing, the Tianjin Jinzhu Concrete Acquisition Agreement will terminate automatically.

Completion

The registration of the transfer of equity interest in respect of the Tianjin Jinzhu Concrete Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Tianjin Jinzhu Concrete Acquisition. The completion date of the Tianjin Jinzhu Concrete Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by Dacheng Property to the Company on the 10th business day after the completion date.

(2) Acquisition of 33.88% of the equity interest in Beijing Cement Plant

On 31 May 2010, the Company entered into the Beijing Cement Plant Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, 33.88% of the equity interest in Beijing Cement Plant for a total consideration of RMB319,562,200 subject to the conditions and in accordance with the terms of the Beijing Cement Plant Acquisition Agreement. The principal terms of the Beijing Cement Plant Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties

Vendor: The Parent Purchaser: The Company

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LETTER FROM THE BOARD

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the Beijing Cement Plant Acquisition Agreement, the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, the 33.88% equity interest in Beijing Cement Plant and all the rights attached thereto for a total consideration of RMB319,562,200 subject to the conditions and in accordance with the terms of the Beijing Cement Plant Acquisition Agreement.

4. Consideration and payment

The consideration for the Beijing Cement Plant Acquisition is RMB319,562,200 which is payable by the Company to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Cement Plant Acquisition.

The consideration for the Beijing Cement Plant Acquisition was determined after an arm’s length negotiation between the Company and the Parent with reference to, among other factors, the appraised value of the 33.88% equity interest in Beijing Cement Plant determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Cement Plant as at 31 December 2009 was approximately RMB943,217,800.

5. Conditions precedent

Completion of the Beijing Cement Plant Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Cement Plant Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and the Company;
(ii) the Parent and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 33.88% of the equity interest in Beijing Cement Plant;
(iii) the approval from Beijing SASAC in respect of the Beijing Cement Plant Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 33.88% of the equity interest in Beijing Cement Plant having been approved by or filed to Beijing SASAC;
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(v) the lawyer of the Company having given legal opinion(s) in respect of the 33.88% of the equity interest in Beijing Cement Plant and Beijing Cement Plant to the satisfaction of the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Cement Plant Acquisition Agreement and the Beijing Cement Plant Acquisition;
(vii) the other equity holders of Beijing Cement Plant having waived the pre-emptive right in respect of the 33.88% of the equity interest in Beijing Cement Plant (if applicable); and
(viii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Cement Plant Acquisition Agreement or any later date as agreed by the Company and the Parent in writing, the Beijing Cement Plant Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the Beijing Cement Plant Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Cement Plant Acquisition. The completion date of the Beijing Cement Plant Acquisition shall be the date of completion of such registration.

(3) Acquisition of 100% of the equity interest in Beijing Eco-island

On 31 May 2010, the Company entered into the Beijing Eco-island Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, 100% of the equity interest in Beijing Eco-island for a total consideration of RMB1 subject to the conditions and in accordance with the terms of the Beijing Eco-island Acquisition Agreement. The principal terms of the Beijing Eco-island Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010
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Parties

Vendor: The Parent Purchaser: The Company

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the Beijing Eco-island Acquisition Agreement, the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, the 100% equity interest in Beijing Eco-island and all the rights attached thereto for a total consideration of RMB1 subject to the conditions and in accordance with the terms of the Beijing Eco-island Acquisition Agreement.

Consideration and payment

The consideration for the Beijing Eco-island Acquisition is RMB1 which is payable by the Company to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beiing Eco-island Acquisition.

The consideration for the Beijing Eco-island Acquisition was determined after an arm’s length negotiation between the Company and the Parent with reference to, among other factors, the appraised value of the 100% equity interest in Beijing Eco-island determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Eco-island as at 31 December 2009 was approximately negative RMB34,351,100.

5. Conditions precedent

Completion of the Beijing Eco-island Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Eco-island Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and the Company;
(ii) the Parent and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Eco-island;
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(iii) the approval from Beijing SASAC in respect of the Beijing Eco-island Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Beijing Eco-island having been approved by or filed to Beijing SASAC;
(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in Beijing Eco-island and Beijing Eco-island to the satisfaction of the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Eco-island Acquisition Agreement and the Beijing Eco-island Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Eco-island Acquisition Agreement or any later date as agreed by the Company and the Parent in writing, the Beijing Eco-island Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the Beijing Eco-island Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Eco-island Acquisition. The completion date of the Beijing Eco-island Acquisition shall be the date of completion of such registration.

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(4) Acquisition of 100% of the equity interest in Beijing Yaxin

On 31 May 2010, the Company entered into the Beijing Yaxin Acquisition Agreement with BBMG Assets Operation, pursuant to which BBMG Assets Operation has agreed to sell to the Company, and the Company has agreed to acquire from BBMG Assets Operation, 100% of the equity interest in Beijing Yaxin for a total consideration of RMB111,936,600 subject to the conditions and in accordance with the terms of the Beijing Yaxin Acquisition Agreement. The principal terms of the Beijing Yaxin Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010

Parties

Vendor: BBMG Assets Operation Purchaser: The Company

BBMG Assets Operation is a wholly-owned subsidiary of the Parent, which in turn is the substantial shareholder of the Company. BBMG Assets Operation is therefore a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the Beijing Yaxin Acquisition Agreement, BBMG Assets Operation has agreed to sell to the Company, and the Company has agreed to acquire from BBMG Assets Operation, the 100% equity interest in Beijing Yaxin and all the rights attached thereto for a total consideration of RMB111,936,600 subject to the conditions and in accordance with the terms of the Beijing Yaxin Acquisition Agreement.

4. Consideration and payment

The consideration for the Beijing Yaxin Acquisition is RMB111,936,600 which is payable by the Company to BBMG Assets Operation in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Yaxin Acquisition.

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The consideration for the Beijing Yaxin Acquisition was determined after an arm’s length negotiation between the Company and BBMG Assets Operation with reference to, among other factors, the appraised value of the 100% of the equity interest in Beijing Yaxin determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Yaxin as at 31 December 2009 was approximately RMB111,936,600.

5. Conditions precedent

Completion of the Beijing Yaxin Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Yaxin Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of BBMG Assets Operation and the Company;
(ii) BBMG Assets Operation and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Yaxin;
(iii) the approval from Beijing SASAC in respect of the Beijing Yaxin Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Beijing Yaxin having been approved by or filed to Beijing SASAC;
(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in Beijing Yaxin and Beijing Yaxin to the satisfaction of the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Yaxin Acquisition Agreement and the Beijing Yaxin Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Yaxin Acquisition Agreement or any later date as agreed by the Company and BBMG Assets Operation in writing, the Beijing Yaxin Acquisition Agreement will terminate automatically.

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6. Completion

The registration of the transfer of equity interest in respect of the Beijing Yaxin Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Yaxin Acquisition. The completion date of the Beijing Yaxin Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by BBMG Assets Operation to the Company on the 10th business day after the completion date.

(5) Acquisition of 100% of the equity interest in Beijing Longshuncheng

On 31 May 2010, Tiantan Furniture entered into the Beijing Longshuncheng Acquisition Agreement with Beijing Building Materials, pursuant to which Beijing Building Materials has agreed to sell to Tiantan Furniture, and Tiantan Furniture has agreed to acquire from Beijing Building Materials, 100% of the equity interest in Beijing Longshuncheng for a total consideration of RMB63,775,900 subject to the conditions and in accordance with the terms of the Beijing Longshuncheng Acquisition Agreement. The principal terms of the Beijing Longshuncheng Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date
31 May 2010 and 9 June 2010
Parties

Vendor: Beijing Building Materials Purchaser: Tiantan Furniture

Beijing Building Materials is a wholly-owned subsidiary of the Parent, which in turn is the substantial shareholder of the Company. Beijing Building Materials is therefore a connected person of the Company for the purposes of the Listing Rules.

Tiantan Furniture is a subsidiary of the Company.

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3. Subject matter

Pursuant to the Beijing Longshuncheng Acquisition Agreement, Beijing Building Materials has agreed to sell to Tiantan Furniture, and Tiantan Furniture has agreed to acquire from Beijing Building Materials, the 100% equity interest in Beijing Longshuncheng and all the rights attached thereto for a total consideration of RMB63,775,900 subject to the conditions and in accordance with the terms of the Beijing Longshuncheng Acquisition Agreement.

4. Consideration and payment

The consideration for the Beijing Longshuncheng Acquisition is RMB63,775,900 which is payable by Tiantan Furniture to Beijing Building Materials in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Longshuncheng Acquisition.

The consideration for the Beijing Longshuncheng Acquisition was determined after an arm’s length negotiation between Tiantan Furniture and Beijing Building Materials with reference to, among other factors, the appraised value of the 100% of the equity interest in Beijing Longshuncheng determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Longshuncheng as at 31 December 2009 was approximately RMB63,775,900.

5. Conditions precedent

Completion of the Beijing Longshuncheng Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Longshuncheng Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of Beijing Building Materials and Tiantan Furniture;
(ii) Beijing Building Materials and Tiantan Furniture having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Longshuncheng;
(iii) the approval from Beijing SASAC in respect of the Beijing Longshuncheng Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Beijing Longshuncheng having been approved by or filed to Beijing SASAC;
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(v) the lawyer of Tiantan Furniture having given legal opinion(s) in respect of the 100% of the equity interest in Beijing Longshuncheng and Beijing Longshuncheng to the satisfaction of Tiantan Furniture;
(vi) the Company, being the actual controller of Tiantan Furniture, having complied with the disclosure requirements and obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Longshuncheng Acquisition Agreement and the Beijing Longshuncheng Acquisition;
(vii) the conversion of Beijing Longshuncheng into a limited liability company having been completed; and
(viii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Longshuncheng Acquisition Agreement or any later date as agreed by Tiantan Furniture and Beijing Building Materials in writing, the Beijing Longshuncheng Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the Beijing Longshuncheng Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Longshuncheng Acquisition. The completion date of the Beijing Longshuncheng Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by Beijing Building Materials to Tiantan Furniture on the 10th business day after the completion date.

(6) Acquisition of 67.5% of the equity interest in Crane Beijing

On 31 May 2010, BBMG Home entered into the Crane Beijing Acquisition Agreement with Beijing Building Materials, pursuant to which Beijing Building Materials has agreed to sell to BBMG Home, and BBMG Home has agreed to acquire from Beijing Building Materials, 67.5% of the equity interest in Crane Beijing for a total consideration of RMB2,563,400 subject to the conditions and in accordance with the terms of the Crane Beijing Acquisition Agreement. The principal terms of the Crane Beijing Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010
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2. Parties

Vendor: Beijing Building Materials Purchaser: BBMG Home

BBMG Home is a wholly-owned subsidiary of the Company.

3. Subject matter

Pursuant to the Crane Beijing Acquisition Agreement, Beijing Building Materials has agreed to sell to BBMG Home, and BBMG Home has agreed to acquire from Beijing Building Materials, the 67.5% equity interest in Crane Beijing and all the rights attached thereto for a total consideration of RMB2,563,400 subject to the conditions and in accordance with the terms of the Crane Beijing Acquisition Agreement.

4. Consideration and payment

The consideration for the Crane Beijing Acquisition is RMB2,563,400 which is payable by BBMG Home to Beijing Building Materials in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Crane Beijing Acquisition.

The consideration for the Crane Beijing Acquisition was determined after an arm’s length negotiation between BBMG Home and Beijing Building Materials with reference to, among other factors, the appraised value of the 67.5% of the equity interest determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Crane Beijing as at 31 December 2009 was approximately RMB3,797,700.

5. Conditions precedent

Completion of the Crane Beijing Acquisition is subject to the fulfillment of the following conditions:

(i) the Crane Beijing Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of Beijing Building Materials and BBMG Home;
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(ii) Beijing Building Materials and BBMG Home having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 67.5% of the equity interest in Crane Beijing;
(iii) the approval from Beijing SASAC and Ministry of Commerce in respect of the Crane Beijing Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 67.5% of the equity interest in Crane Beijing having been approved by or filed to Beijing SASAC;
(v) the lawyer of BBMG Home having given legal opinion(s) in respect of 67.5% of the equity interest in Crane Beijing and Crane Beijing to the satisfaction of BBMG Home;
(vi) the Company, being the actual controller of BBMG Home, having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Crane Beijing Acquisition Agreement and the Crane Beijing Acquisition;
(vii) the other equity holders of Crane Beijing having waived the pre-emptive right in respect of the 67.5% of the equity interest in Crane Beijing; and
(viii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Crane Beijing Acquisition Agreement or any later date as agreed by BBMG Home and Beijing Building Materials in writing, the Crane Beijing Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the Crane Beijing Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Crane Beijing Acquisition. The completion date of the Crane Beijing Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by the Beijing Building Materials to BBMG Home on the 10th business day after the completion date.

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(7) Acquisition of 100% of the equity interest in Beijing Yanshan Cement

On 31 May 2010, the Company entered into the Beijing Yanshan Cement Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, 100% of the equity interest in Beijing Yanshan Cement for a total consideration of RMB275,040,400 subject to the conditions and in accordance with the terms of the Beijing Yanshan Cement Acquisition Agreement. The principal terms of the Beijing Yanshan Cement Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010

Parties

Vendor: The Parent Purchaser: The Company

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the Beijing Yanshan Cement Acquisition Agreement, the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, the 100% equity interest in Beijing Yanshan Cement and all the rights attached thereto for a total consideration of RMB275,040,400 subject to the conditions and in accordance with the terms of the Beijing Yanshan Cement Acquisition Agreement.

4. Consideration and payment

The consideration for the Beijing Yanshan Cement Acquisition is RMB275,040,400 which is payable by the Company to the Parent in cash by one lump sum payment within 15 business days after the satisfaction of all conditions precedent to completion of the Beijing Yanshan Cement Acquisition.

The consideration for the Beijing Yanshan Cement Acquisition was determined after an arm’s length negotiation between the Company and the Parent with reference to, among other factors, the appraised value of the 100% of the equity interest in Beijing Yanshan Cement determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Yanshan Cement as at 31 December 2009 was approximately RMB275,040,400.

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Conditions precedent

Completion of the Beijing Yanshan Cement Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Yanshan Cement Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and the Company;
(ii) the Parent and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Yanshan Cement;
(iii) the approval from Beijing SASAC in respect of the Beijing Yanshan Cement Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Beijing Yanshan Cement having been approved by or filed to Beijing SASAC;
(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% equity interest in Beijing Yanshan Cement and Beijing Yanshan Cement which having been satisfied by the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Yanshan Cement Acquisition Agreement and the Beijing Yanshan Cement Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Yanshan Cement Acquisition Agreement or any later date as agreed by the Company and the Parent in writing, the Beijing Yanshan Cement Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the Beijing Yanshan Cement Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Yanshan Cement Acquisition. The completion date of the Beijing Yanshan Cement Acquisition shall be the date of completion of such registration.

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(8) Acquisition of 100% of the equity interest in Beijing Architectural Decoration

On 31 May 2010, the Company entered into the Beijing Architectural Decoration Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, 100% of the equity interest in Beijing Architectural Decoration for a total consideration of RMB42,080,900 subject to the conditions and in accordance with the terms of the Beijing Architectural Decoration Acquisition Agreement. The principal terms of the Beijing Architectural Decoration Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties

Vendor: The Parent Purchaser: The Company

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the Beijing Architectural Decoration Acquisition Agreement, the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, the 100% equity interest in Beijing Architectural Decoration and all the rights attached thereto for a total consideration of RMB42,080,900 subject to the conditions and in accordance with the terms of the Beijing Architectural Decoration Acquisition Agreement.

4. Consideration and payment

The consideration for the Beijing Architectural Decoration Acquisition is RMB42,080,900 which is payable by the Company to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Architectural Decoration Acquisition.

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The consideration for the Beijing Architectural Decoration Acquisition was determined after an arm’s length negotiation between the Company and the Parent with reference to, among other factors, the appraised value of the 100% of the equity interest in Beijing Architectural Decoration determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Architectural Decoration as at 31 December 2009 was approximately RMB42,080,900.

5. Conditions precedent

Completion of the Beijing Architectural Decoration Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Architectural Decoration Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and the Company;
(ii) the Parent and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Architectural Decoration;
(iii) the approval from Beijing SASAC in respect of the Beijing Architectural Decoration Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Beijing Architectural Decoration having been approved by or filed to Beijing SASAC;
(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in Beijing Architectural Decoration and Beijing Architectural Decoration which having been satisfied by the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Architectural Decoration Acquisition Agreement and the Beijing Architectural Decoration Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Architectural Decoration Acquisition Agreement or any later date as agreed by the Company and the Parent in writing, the Beijing Architectural Decoration Acquisition Agreement will terminate automatically.

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6. Completion

The registration of the transfer of equity interest in respect of the Beijing Architectural Decoration Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Architectural Decoration Acquisition. The completion date of the Beijing Architectural Decoration Acquisition shall be the date of completion of such registration.

(9) Acquisition of 100% of the equity interest in Badaling Travel

On 31 May 2010, the Company entered into the Badaling Travel Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, 100% of the equity interest in Badaling Travel for a total consideration of RMB122,562,300 subject to the conditions and in accordance with the terms of the Badaling Travel Acquisition Agreement. The principal terms of the Badaling Travel Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties

Vendor: The Parent Purchaser: The Company

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the Badaling Travel Acquisition Agreement, the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, the 100% equity interest in Badaling Travel and all the rights attached thereto for a total consideration of RMB122,562,300 subject to the conditions and in accordance with the terms of the Badaling Travel Acquisition Agreement.

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Consideration and payment

The consideration for the Badaling Travel Acquisition is RMB122,562,300 which is payable by the Company to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to the completion of the Badaling Travel Acquisition.

The consideration for the Badaling Travel Acquisition was determined after an arm’s length negotiation between the Company and the Parent with reference to, among other factors, the appraised value of the 100% of the equity interest in Badaling Travel determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Badaling Travel as at 31 December 2009 was approximately RMB122,562,300.

Conditions precedent

Completion of the Badaling Travel Acquisition is subject to the fulfillment of the following conditions:

(i) the Badaling Travel Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and the Company;
(ii) the Parent and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Badaling Travel;
(iii) the approval from Beijing SASAC in respect of the Badaling Travel Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Badaling Travel having been approved by or filed to Beijing SASAC;
(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in Badaling Travel and Badaling Travel to the satisfaction of the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Badaling Travel Acquisition Agreement and the Badaling Travel Acquisition;
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(vii) since the equity interest in Badaling Travel is subject to security, pledge, guarantee or other third party interests restricting equity transfer, the consent(s) from the relevant interest holder(s) having been obtained; and
(viii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Badaling Travel Acquisition Agreement or any later date as agreed by the Company and the Parent in writing, the Badaling Travel Acquisition Agreement will terminate automatically.

Completion

The registration of the transfer of equity interest in respect of the Badaling Travel Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Badaling Travel Acquisition. The completion date of the Badaling Travel Acquisition shall be the date of completion of such registration.

(10) Acquisition of 100% of the equity interest in Beijing Zhongweisenhai

On 31 May 2010, Beijing Jianji entered into the Beijing Zhongweisenhai Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to Beijing Jianji, and Beijing Jianji has agreed to acquire from the Parent, 100% of the equity interest in Beijing Zhongweisenhai for a total consideration of RMB550,234,000 subject to the conditions and in accordance with the terms of the Beijing Zhongweisenhai Acquisition Agreement. The principal terms of the Beijing Zhongweisenhai Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties Vendor: The Parent Purchaser: Beijing Jianji

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

Beijing Jianji is a wholly-owned subsidiary of the Company.

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3. Subject matter

Pursuant to the Beijing Zhongweisenhai Acquisition Agreement, the Parent has agreed to sell to Beijing Jianji, and Beijing Jianji has agreed to acquire from the Parent, the 100% equity interest in Beijing Zhongweisenhai and all the rights attached thereto for a total consideration of RMB550,234,000 subject to the conditions and in accordance with the terms of the Beijing Zhongweisenhai Acquisition Agreement.

4. Consideration and payment

The consideration for the Beijing Zhongweisenhai Acquisition is RMB550,234,000 which is payable to the Parent by Beijing Jianji in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Zhongweisenhai Acquisition.

The consideration for the Beijing Zhongweisenhai Acquisition was determined after an arm’s length negotiation between Beijing Jianji and the Parent with reference to, among other factors, the appraised value of the 100% of the equity interest in Beijing Zhongweisenhai determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Zhongweisenhai as at 31 December 2009 was approximately RMB550,234,000.

5. Conditions precedent

Completion of the Beijing Zhongweisenhai Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Zhongweisenhai Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parents and Beijing Jianji;
(ii) the Parent and Beijing Jianji having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Zhongweisenhai;
(iii) the approval from Beijing SASAC in respect of the Beijing Zhongweisenhai Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Beijing Zhongweisenhai having been approved by or filed to Beijing SASAC;
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(v) the lawyer of Beijing Jianji having given legal opinion(s) in respect of the 100% of the equity interest in Beijing Zhongweisenhai and Beijing Zhongweisenhai to the satisfaction of Beijing Jianji;
(vi) the Company, being the actual controller of Beijing Jianji, having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Zhongweisenhai Acquisition Agreement and the Beijing Zhongweisenhai Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Zhongweisenhai Acquisition Agreement or any later date as agreed by Beijing Jianji and the Parent in writing, the Beijing Zhongweisenhai Acquisition Agreement will terminate automatically.

Completion

The registration of the transfer of equity interest in respect of the Beijing Zhongweisenhai Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Zhongweisenhai Acquisition. The completion date of the Beijing Zhongweisenhai Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by the Parent to Beijing Jianji on the 10th business day after the completion date.

(11) Acquisition of 100% of the equity interest in BBMG Dacheng

On 31 May 2010, the Company entered into the BBMG Dacheng Acquisition Agreement with Dacheng Property, pursuant to which Dacheng Property has agreed to sell to the Company, and the Company has agreed to acquire from Dacheng Property, 100% of the equity interest in BBMG Dacheng for a total consideration of RMB11,860,800 subject to the conditions and in accordance with the terms of the BBMG Dacheng Acquisition Agreement. The principal terms of the BBMG Dacheng Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties

Vendor: Dacheng Property

Purchaser:

The Company

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3. Subject matter

Pursuant to the BBMG Dacheng Acquisition Agreement, Dacheng Property has agreed to sell to the Company, and the Company has agreed to acquire from Dacheng Property, the 100% equity interest in BBMG Dacheng and all the rights attached thereto for a total consideration of RMB11,860,800 subject to the conditions and in accordance with the terms of the BBMG Dacheng Acquisition Agreement.

4. Consideration and payment

The consideration for the BBMG Dacheng Acquisition is RMB11,860,800 which is payable by the Company to Dacheng Property in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the BBMG Dacheng Acquisition.

The consideration for the BBMG Dacheng Acquisition was determined after an arm’s length negotiation between the Company and Dacheng Property with reference to, among other factors, the appraised value of the 100% of the equity interest in BBMG Dacheng determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of BBMG Dacheng as at 31 December 2009 was approximately RMB11,860,800.

5. Conditions precedent

Completion of the BBMG Dacheng Acquisition is subject to the fulfillment of the following conditions:

(i) the BBMG Dacheng Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of Dacheng Property and the Company;
(ii) Dacheng Property and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in BBMG Dacheng;
(iii) the approval from Beijing SASAC in respect of the BBMG Dacheng Acquisition having been obtained;
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(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in BBMG Dacheng having been approved by or filed to Beijing SASAC;
(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in BBMG Dacheng and BBMG Dacheng to the satisfaction of the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the BBMG Dacheng Acquisition Agreement and the BBMG Dacheng Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the BBMG Dacheng Acquisition Agreement or any later date as agreed by the Company and Dacheng Property in writing, the BBMG Dacheng Acquisition Agreement will terminate automatically.

Completion

The registration of the transfer of equity interest in respect of the BBMG Dacheng Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the BBMG Dacheng Acquisition. The completion date of the BBMG Dacheng Acquisition shall be the date of completion of such registration.

(12) Acquisition of 100% of the equity interest in Beijing Ganlujiayuan

On 31 May 2010, Beijing Jinhaiyan entered into the Beijing Ganlujiayuan Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to Beijing Jinhaiyan, and Beijing Jinhaiyan has agreed to acquire from the Parent, 100% of the equity interest in Beijing Ganlujiayuan for a total consideration of RMB2,487,900 subject to the conditions and in accordance with the terms of the Beijing Ganlujiayuan Acquisition Agreement. The principal terms of the Beijing Ganlujiayuan Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date
31 May 2010 and 9 June 2010
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2. Parties

Vendor: The Parent Purchaser: Beijing Jinhaiyan

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

Beijing Jinhaiyan is a wholly-owned subsidiary of the Company.

3. Subject matter

Pursuant to the Beijing Ganlujiayuan Acquisition Agreement, the Parent has agreed to sell to Beijing Jinhaiyan, and Beijing Jinhaiyan has agreed to acquire from the Parent, the 100% equity interest in Beijing Ganlujiayuan and all the rights attached thereto for a total consideration of RMB2,487,900 subject to the conditions and in accordance with the terms of the Beijing Ganlujiayuan Acquisition Agreement.

4. Consideration and payment

The consideration for the Beijing Ganlujiayuan Acquisition is RMB2,487,900 which is payable by Beijing Jinhaiyan to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Ganlujiayuan Acquisition.

The consideration for the Beijing Ganlujiayuan Acquisition was determined after an arm’s length negotiation between Beijing Jinhaiyan and the Parent with reference to, among other factors, the appraised value of the 100% of the equity interest in Beijing Ganlujiayuan determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Ganlujiayuan as at 31 December 2009 was approximately RMB2,487,900.

5. Conditions precedent

Completion of the Beijing Ganlujiayuan Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Ganlujiayuan Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and Beijing Jinhaiyan;
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(ii) the Parent and Beijing Jinhaiyan having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Ganlujiayuan;
(iii) the approval from Beijing SASAC in respect of the Beijing Ganlujiayuan Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in Beijing Ganlujiayuan having been approved by or filed to Beijing SASAC;
(v) the lawyer of Beijing Jinhaiyan having given legal opinion(s) in respect of the 100% of the equity interest in Beijing Ganlujiayuan and Beijing Ganlujiayuan to the satisfaction Beijing Jinhaiyan;
(vi) the Company, being the actual controller of Beijing Jinhaiyan, having complied with the disclosure requirements and obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Ganlujiayuan Acquisition Agreement and the Beijing Ganlujiayuan Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Ganlujiayuan Acquisition Agreement or any later date as agreed by Beijing Jinhaiyan and the Parent in writing, the Beijing Ganlujiayuan Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the Beijing Ganlujiayuan Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Ganlujiayuan Acquisition. The completion date of the Beijing Ganlujiayuan Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by the Parent to Beijing Jinhaiyan on the 10th business day after the completion date.

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(13) Acquisition of 100% of the equity interest in Beijing Yuandongjiemei

On 31 May 2010, BBMG Property Management entered into the Beijing Yuandongjiemei Acquisition Agreement with Beijing Building Materials Group, pursuant to which Beijing Building Materials Group has agreed to sell to BBMG Property Management, and BBMG Property Management has agreed to acquire from Beijing Building Materials Group, 100% of the equity interest in Beijing Yuandongjiemei for a total consideration of RMB556,900 subject to the conditions and in accordance with the terms of the Beijing Yuandongjiemei Acquisition Agreement. The principal terms of the Beijing Yuandongjiemei Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010
Parties

Vendor: Beijing Building Materials Group Purchaser: BBMG Property Management

The Parent holds more than 50% voting power of Beijing Building Materials Group and the Parent is the substantial shareholder of the Company. Beijing Building Materials Group is therefore a connected person of the Company for the purposes of the Listing Rules.

BBMG Property Management is a wholly-owned subsidiary of the Company.

Subject matter

Pursuant to the Beijing Yuandongjiemei Acquisition Agreement, Beijing Building Materials Group has agreed to sell to BBMG Property Management, and BBMG Property Management has agreed to acquire from Beijing Building Materials Group, the 100% equity interest in Beijing Yuandongjiemei and all the rights attached thereto for a total consideration of RMB556,900 subject to the conditions and in accordance with the terms of the Beijing Yuandongjiemei Acquisition Agreement.

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4. Consideration and payment

The consideration for the Beijing Yuandongjiemei Acquisition is RMB556,900 which is payable by BBMG Property Management to Beijing Building Materials Group in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Yuandongjiemei Acquisition.

The consideration for the Beijing Yuandongjiemei Acquisition was determined after an arm’s length negotiation between BBMG Property Management and Beijing Building Materials Group with reference to, among other factors, the appraised value of the 100% of the equity interest in Beijing Yuandongjiemei determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of Beijing Yuandongjiemei as at 31 December 2009 was approximately RMB556,900.

Conditions precedent

Completion of the Beijing Yuandongjiemei Acquisition is subject to the fulfillment of the following conditions:

(i) the Beijing Yuandongjiemei Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of Beijing Building Materials Group and BBMG Property Management;
(ii) Beijing Building Materials Group and BBMG Property Management having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in Beijing Yuandongjiemei;
(iii) the approval from Beijing SASAC in respect of the Beijing Yuandongjiemei Acquisition having been obtained;
(iv) the lawyer of BBMG Property Management having given legal opinion(s) in respect of the 100% of the equity interest in Beijing Yuandongjiemei and Beijing Yuandongjiemei to the satisfaction of BBMG Property Management;
(v) the Company, being the actual controller of BBMG Property Management, having complied with the disclosure requirements and obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Yuandongjiemei Acquisition Agreement and the Beijing Yuandongjiemei Acquisition;
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(vi) the conversion of Beijing Yuandongjiemei into a limited liability company having been completed; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Yuandongjiemei Acquisition Agreement or any later date as agreed by BBMG Property Management and Beijing Building Materials Group in writing, the Beijing Yuandongjiemei Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the Beijing Yuandongjiemei Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the Beijing Yuandongjiemei Acquisition. The completion date of the Beijing Yuandongjiemei Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by Beijing Building Materials Group to BBMG Property Management on the 10th business day after the completion date.

(14) Acquisition of 100% of the equity interest in BBMG Hong Kong

On 31 May 2010, the Company entered into the BBMG Hong Kong Acquisition Agreement with the Parent and Beijing Furniture, pursuant to which the Parent and Beijing Furniture have agreed to sell to the Company, and the Company has agreed to acquire from the Parent and Beijing Furniture, 80% and 20% of the equity interest in BBMG Hong Kong, respectively, for a total consideration of RMB5,984,900 subject to the conditions and in accordance with the terms of the BBMG Hong Kong Acquisition Agreement. The principal terms BBMG Hong Kong of the Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010

Parties

Vendor: The Parent Beijing Furniture Purchaser: The Company

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Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

Beijing Furniture is a wholly-owned subsidiary of the Parent, which in turn is the substantial shareholder of the Company. Beijing Furniture is therefore a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the BBMG Hong Kong Acquisition Agreement, the Parent and Beijing Furniture have agreed to sell to the Company, and the Company has agreed to acquire from the Parent and Beijing Furniture, the 80% and 20% equity interest, respectively, in BBMG Hong Kong and all the rights attached thereto for a total consideration of RMB5,984,900 subject to the conditions and in accordance with the terms of the BBMG Hong Kong Acquisition Agreement.

4. Consideration and payment

The consideration for the BBMG Hong Kong Acquisition is RMB5,984,900. The Company has to pay RMB4,787,920 to the Parent and RMB1,196,980 to Beijing Furniture in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the BBMG Hong Kong Acquisition.

The consideration for the BBMG Hong Kong Acquisition was determined after an arm’s length negotiation between the Company, the Parent and Beijing Furniture with reference to, among other factors, the appraised value of 100% of the equity interest in BBMG Hong Kong determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of BBMG Hong Kong as at 31 October 2009 was approximately RMB5,984,900.

5. Conditions precedent

Completion of the BBMG Hong Kong Acquisition is subject to the fulfillment of the following conditions:

(i) the BBMG Hong Kong Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent, Beijing Furniture and the Company;
(ii) the Parent, Beijing Furniture and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in BBMG Hong Kong;
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(iii) the transfer of the 100% of the equity interest in BBMG Hong Kong having obtained the approval by relevant department of commence and the Company having obtained approval from relevant department of commence in respect of the offshore investment;
(iv) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in BBMG Hong Kong and BBMG Hong Kong to the satisfaction of the Company;
(v) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the BBMG Hong Kong Acquisition Agreement and the BBMG Hong Kong Acquisition; and
(vi) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the BBMG Hong Kong Acquisition Agreement or any later date as agreed by the Company, the Parent and Beijing Furniture in writing, the BBMG Hong Kong Acquisition Agreement will terminate automatically.

Completion

The completion date of the BBMG Hong Kong Acquisition shall be the 15th business day after satisfaction of all the conditions precedent to completion of the BBMG Hong Kong Acquisition.

Closing deliverables (including but not limited to the originals of the executed instrument of transfer and sold note, financial reports, legal documents, title documents and statutory book) are required to be delivered by the Parent and Beijing Furniture to the Company on the completion date.

(15) Acquisition of 100% of the equity interest in BBMG Human Resources

On 31 May 2010, BBMG Property Management entered into the BBMG Human Resources Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to BBMG Property Management, and BBMG Property Management has agreed to acquire from the Parent, 100% of the equity interest in BBMG Human Resources for a total consideration of RMB494,500 subject to the conditions and in accordance with the terms of the BBMG Human Resources Acquisition Agreement. The principal terms of the BBMG Human Resources Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010

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2. Parties

Vendor: The Parent Purchaser: BBMG Property Management

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

BBMG Property Management is a wholly-owned subsidiary of the Company.

3. Subject matter

Pursuant to the BBMG Human Resources Acquisition Agreement, the Parent has agreed to sell to BBMG Property Management, and BBMG Property Management has agreed to acquire from the Parent, the 100% equity interest in BBMG Human Resources and all the rights attached thereto for a total consideration of RMB494,500 subject to the conditions and in accordance with the terms of the BBMG Human Resources Acquisition Agreement.

4. Consideration and payment

The consideration for the BBMG Human Resources Acquisition is RMB494,500 which is payable by BBMG Property Management to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the BBMG Human Resources Acquisition.

The consideration for the BBMG Human Resources Acquisition was determined after an arm’s length negotiation between BBMG Property Management and the Parent with reference to, among other factors, the appraised value of 100% of the equity interest in BBMG Human Resources determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of BBMG Human Resources as at 31 December 2009 was approximately RMB494,500.

5. Conditions precedent

Completion of the BBMG Human Resources Acquisition is subject to the fulfillment of the following conditions:

(i) the BBMG Human Resources Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and BBMG Property Management;
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(ii) the Parent and BBMG Property Management having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in BBMG Human Resources;
(iii) the approval from Beijing SASAC in respect of the BBMG Human Resources Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in BBMG Human Resources having been approved by or filed to Beijing SASAC;
(v) the lawyer of BBMG Property Management having given legal opinion(s) in respect of the 100% of the equity interest in BBMG Human Resources and BBMG Human Resources to the satisfaction which having been satisfied by BBMG Property Management;
(vi) the Company, being the actual controller of BBMG Property Management, having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the BBMG Human Resources Acquisition Agreement and the BBMG Human Resources Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the BBMG Human Resources Acquisition Agreement or any later date as agreed by BBMG Property Management and the Parent in writing, the BBMG Human Resources Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the BBMG Human Resources Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the BBMG Human Resources Acquisition. The completion date of the BBMG Human Resources Acquisition shall be the date of completion of such registration.

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by the Parent to BBMG Property Management on the 10th business day after the completion date.

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(16) Acquisition of 100% of the equity interest in BBMG Hongye

On 31 May 2010, the Company entered into the BBMG Hongye Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, 100% of the equity interest in BBMG Hongye for a total consideration of RMB852,992,400 subject to the conditions and in accordance with the terms of the BBMG Hongye Acquisition Agreement. The principal terms of the BBMG Hongye Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties

Vendor: The Parent Purchaser: The Company

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the BBMG Hongye Acquisition Agreement, the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, the 100% equity interest in BBMG Hongye and all the rights attached thereto for a total consideration of RMB852,992,400 subject to the conditions and in accordance with the terms of the BBMG Hongye Acquisition Agreement.

4. Consideration and payment

The consideration for the BBMG Hongye Acquisition is RMB852,992,400 which is payable by the Company to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the BBMG Hongye Acquisition.

The consideration for the BBMG Hongye Acquisition was determined after an arm’s length negotiation between the Company and the Parent with reference to, among other factors, the appraised value of the 100% of the equity interest in BBMG Hongye determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of BBMG Hongye as at 31 December 2009 was approximately RMB852,992,400.

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Conditions precedent

Completion of the BBMG Hongye Acquisition is subject to the fulfillment of the following conditions:

(i) the BBMG Hongye Acquisition Agreement having been duly signed by the legal representatives or the authorized representatives of the Parent and the Company;
(ii) the Parent and the Company having completed the internal approval procedure and obtained relevant written approval documents in respect of the transfer of the 100% of the equity interest in BBMG Hongye;
(iii) the approval from Beijing SASAC in respect of the BBMG Hongye Acquisition having been obtained;
(iv) the Asset Valuation Report in respect of the transfer of the 100% of the equity interest in BBMG Hongye having been approved by or filed to Beijing SASAC;
(v) the lawyer of the Company having given legal opinion(s) in respect of the 100% of the equity interest in BBMG Hongye and BBMG Hongye to the satisfaction of the Company;
(vi) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the BBMG Hongye Acquisition Agreement and the BBMG Hongye Acquisition; and
(vii) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the BBMG Hongye Acquisition Agreement or any later date as agreed by the Company and the Parent in writing, the BBMG Hongye Acquisition Agreement will terminate automatically.

6. Completion

The registration of the transfer of equity interest in respect of the BBMG Hongye Acquisition is required to be completed with the AIC within 90 business days after satisfaction of all the conditions precedent to completion of the BBMG Hongye Acquisition. The completion date of the BBMG Hongye Acquisition shall be the date of completion of such registration.

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(B) THE ASSET ACQUISITIONS

The Company announced that on 31 May 2010, the Company (as purchaser) and the Parent or its subsidiaries (as vendor) entered into the following Asset Acquisition Agreements in respect of the sale and purchase of each of the Acquired Assets. The Company further announced that on 9 June 2010, the Company and its subsidiaries (as purchasers) and the Parent and its subsidiaries (as vendors) entered into the Supplemental Agreement to amend and supplement the terms of the Agreements in order to make the Agreements inter-conditional upon each other.

(1) Acquisition of the land use right of the Beijing Pinggu Site and the properties and facilities built thereon

On 31 May 2010, the Company entered into the Beijing Pinggu Acquisition Agreement with Beijing Pinggu, pursuant to which Beijing Pinggu has agreed to sell to the Company, and the Company has agreed to acquire (or procure a wholly-owned subsidiary designated by the Company, to acquire) from Beijing Pinggu, the land use right of the Beijing Pinggu Site and the properties and facilities built thereon and all the interests and rights attached thereto for a total consideration of RMB162,433,400 subject to the conditions and in accordance with the terms of the Beijing Pinggu Acquisition Agreement. The principal terms of the Beijing Pinggu Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

Date

31 May 2010 and 9 June 2010

Parties Vendor: Beijing Pinggu Purchaser: the Company

Beijing Pinggu is a wholly-owned subsidiary of the Parent, which in turn is the substantial shareholder of the Company, Beijing Pinggu is therefore a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the Beijing Pinggu Acquisition Agreement, Beijing Pinggu has agreed to sell to the Company (or a wholly-owned subsidiary designated by the Company), and the Company has agreed to acquire (or to procure a whollyowned subsidiary designated by the Company, to acquire) from Beijing Pinggu, the land use right of the Beijing Pinggu Site and the properties and facilities built thereon and all the interests and rights attached thereto for a total consideration of RMB162,433,400 subject to the conditions and in accordance with the terms of the Beijing Pinggu Acquisition Agreement.

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4. Consideration and payment

The consideration for the land use right of the Beijing Pinggu Site and the properties and facilities built thereon is RMB162,433,400 which is payable by the Company to Beijing Pinggu in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the Beijing Pinggu Acquisition.

The consideration for the Beijing Pinggu Acquisition was determined after an arm’s length negotiation between the Company and Beijing Pinggu with reference to, among other factors, the appraised value of the land use right of the Beijing Pinggu Site and the properties and facilities built thereon determined by an independent valuer using cost method as stated in the Asset Valuation Report. The appraised value of the land use right of the Beijing Pinggu Site and the properties and facilities built thereon as at 30 April 2010 was approximately RMB162,433,400.

5. Conditions precedent

Completion of the Beijing Pinggu Acquisition is subject to the fulfillment of the following conditions:

(i) the lawyer of the Company having given legal opinion(s) in respect of the land use right of the Beijing Pinggu Site and the properties and facilities built thereon to the satisfaction of the Company;
(ii) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the Beijing Pinggu Acquisition Agreement and the Beijing Pinggu Acquisition;
(iii) the release registration of the security created over the Beijing Pinggu Site and/or the properties and facilities built thereon having been completed;
(iv) the Asset Valuation Report in respect of the transfer of the land use right of the Beijing Pinggu Site and the properties and facilities built thereon having been filed to and approved by Beijing SASAC;
(v) all the relevant permission, authorization, approval and filing in respect of the Beijing Pinggu Acquisition having been completed; and
(vi) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.

If the condition precedents have not been fulfilled within three months of the date of the Beijing Pinggu Acquisition Agreement or any later date as agreed by Beijing Pinggu and the Company in writing, the Beijing Pinggu Acquisition Agreement will terminate automatically.

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6. Completion

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by the Parent to the Company within 15 business days after satisfaction of all the conditions precedent to completion of the Beijing Pinggu Acquisition or on such later date as mutually agreed by the parties in writing.

(2) Acquisition of the land use right of BBMG Landao Site and the BBMG Landao Building built thereon

On 31 May 2010, the Company entered into the BBMG Landao Building Acquisition Agreement with the Parent, pursuant to which the Parent has agreed to sell to the Company, and the Company has agreed to acquired from the Parent, the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon and all the interests and rights attached thereto for a total consideration of RMB110,364,900 subject to the conditions and in accordance with the terms of the BBMG Landao Building Acquisition Agreement. The principal terms of the BBMG Landao Building Acquisition Agreement as supplemented by the Supplemental Agreement are set out below:

1. Date

31 May 2010 and 9 June 2010

Parties

Vendor: The Parent Purchaser: The Company

Since the Parent is the substantial shareholder of the Company, the Parent is a connected person of the Company for the purposes of the Listing Rules.

3. Subject matter

Pursuant to the BBMG Landao Building Acquisition Agreement, the Parent has agreed to sell to the Company, and the Company has agreed to acquire from the Parent, the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon and all the interests and rights attached thereto for a total consideration of RMB110,364,900 subject to the conditions and in accordance with the terms of the BBMG Landao Building Acquisition Agreement.

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4. Consideration and payment

The consideration for the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon is RMB110,364,900 which is payable by the Company to the Parent in cash by one lump sum payment within 15 business days after satisfaction of all conditions precedent to completion of the BBMG Landao Building Acquisition.

The consideration for the BBMG Landao Building Acquisition was determined after an arm’s length negotiation between the Company and the Parent with reference to, among other factors, the appraised value of the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon determined by an independent valuer using income method as stated in the Asset Valuation Report. The appraised value of the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon as at 31 December 2009 was approximately RMB110,364,900.

5. Conditions precedent

Completion of the BBMG Landao Building Acquisition is subject to the fulfillment of the following conditions:

(i) the lawyer of the Company having given legal opinion(s) in respect of the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon to the satisfaction of the Company;
(ii) the Company having complied with the disclosure requirements and having obtained the independent shareholders’ approval (if necessary) as required under the Listing Rules in respect of the BBMG Landao Building Acquisition Agreement and the BBMG Landao Building Acquisition;
(iii) if the BBMG Landao Site and/or the BBMG Landao Building built thereon are/is subject to security, pledge, guarantee or other third party interests which restrict any transfer of equity interest, consent(s) from the relevant interest holder(s) having been obtained (if applicable);
(iv) the Asset Valuation Report in respect of the transfer of the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon having been approved by or filed to Beijing SASAC;
(v) all relevant permissions, authorizations, approvals and filings in respect of the BBMG Landao Building Acquisition having been completed; and
(vi) all conditions precedent (save for this condition) of the other Agreements entered into between the parties thereof having completed.
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If the condition precedents have not been fulfilled within three months of the date of the BBMG Landao Building Acquisition Agreement or any later date as agreed by the Parent and the Company in writing, the BBMG Landao Building Acquisition Agreement will terminate automatically.

6. Completion

Closing deliverables (including but not limited to the relevant financial reports, legal documents and title documents) are required to be delivered by the Parent to the Company within 15 business days after satisfaction of all the conditions precedent to completion of the BBMG Landao Building Acquisition or on such later date as mutually agreed by the parties in writing.

INFORMATION ON THE ACQUIRED SUBSIDIARIES

(1) Tianjin Jinzhu Concrete

Tianjin Jinzhu Concrete is a company established under the laws of the PRC with limited liability on 31 October 2008. The registered capital of Tianjin Jinzhu Concrete of RMB20 million has been fully paid up as at the Latest Practicable Date. Tianjin Jinzhu Concrete has no operating business but holds 59.76% equity interest of 天津金隅混凝土有限公司 (Tianjin BBMG Concrete Co., Ltd.*) which owns 12 concrete production plants with an annual concrete production capacity of approximately 4,000,000 cubic meters, and the concrete produced are supplied to different areas including Wuqing, Xiqing, Jinnan, Dagang, Tanggu and Hangu.

The audited consolidated net asset value of Tianjin Jinzhu Concrete as at 31 December 2009 was RMB60,372,219. The audited consolidated accounts of Tianjin Jinzhu Concrete for the two year ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited consolidated profit (before taxation and extraordinary items) of RMB4,136,222 and RMB20,655,985, respectively, and an audited consolidated profit (after taxation and extraordinary items) of RMB4,139,912 and RMB16,607,942, respectively.

(2) Beijing Cement Plant

Beijing Cement Plant is a company established under the laws of the PRC with limited liability on 12 January 1995. The registered capital of Beijing Cement Plant of RMB963,462,800 has been fully paid up as at the Latest Practicable Date. Beijing Cement Plant is owned as to 66.12% by 中國信達資產管理公司 (China Cinda Asset Management Corporation) and as to 33.88% by the Parent. The Company has entered into an equity reorganization agreement with 中國信達資產管理公司 (China Cinda Asset Management Corporation) to acquire the 66.12% equity interest of Beijing Cement Plant as disclosed in the announcement of the Company dated 4 June 2010. Beijing Cement Plant is principally engaged in the manufacturing and sale of cement and clinker. Beijing Cement Plant holds 45% equity interest of 北京新北水水泥有限責任公司 (Beijing Xinbeishui Cement Co., Ltd.), which is 55% equity interest owned by 北京金隅紅樹林環保技術有限責任公司 (BBMG Mangrove Environmental Protection Technology Co., Ltd.), a wholly-owned subsidiary of the Company.

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The audited net asset value of Beijing Cement Plant as at 31 December 2009 was RMB961,024,434. The audited accounts of Beijing Cement Plant for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited profit (before taxation and extraordinary items) of RMB2,262,365 and RMB8,798,853, respectively, and an audited profit (after taxation and extraordinary items) of RMB8,619,052 and RMB7,427,203, respectively.

(3) Beijing Eco-island

Beijing Eco-island is a company established under the laws of the PRC with limited liability on 17 April 2006. The registered capital of Beijing Eco-island of RMB50,000,000 has been fully paid up as at the Latest Practicable Date. Beijing Eco-island is principally engaged in waste management, research and development on environmental protection and sales of building materials. Beijing Eco-island commenced its pilot operation of hazardous waste processing in January 2009 and its formal operation in 2010. Beijing Eco-island is the only large and modern institute which can incinerate, landfill and utilize hazardous waste in Beijing with an annual hazardous waste processing capacity of approximately 57,000 tonnes.

The audited net asset value of Beijing Eco-island as at 31 December 2009 was RMB48,813,520. The audited accounts of Beijing Eco-island for the year ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited loss (both before and after taxation and extraordinary items) of RMB1,186,480.

(4) Beijing Yaxin

Beijing Yaxin is a company established under the laws of the PRC with limited liability on 23 October 1980. The registered capital of Beijing Yaxin of RMB50,376,600 has been fully paid up as at the Latest Practicable Date. Beijing Yaxin is principally engaged in office rental. Beijing Yaxin owns a parcel of land with a site area of approximately 380,000 sq.m. and buildings with an aggregate GFA of approximately 6,698 sq.m. for office rental.

The audited net asset value of Beijing Yaxin as at 31 December 2009 was RMB55,627,780. The audited accounts of Beijing Yaxin for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited profit (before taxation and extraordinary items) of RMB4,124 and RMB4,986, respectively, and an audited profit and audited loss (after taxation and extraordinary items) of RMB3,299 and RMB3,489, respectively.

(5) Beijing Longshuncheng

Beijing Longshuncheng is a state-owned enterprise established under the laws of the PRC on 31 December 1994. The registered capital of Beijing Longshuncheng of RMB3,137,000 has been fully paid up as at the Latest Practicable Date. Beijing Longshuncheng is principally engaged in the sales of building materials and furniture and furniture consultancy services.

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The audited net asset value of Beijing Longshuncheng as at 31 December 2009 was RMB12,923,955. The audited accounts of Beijing Longshuncheng for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited profit (before taxation and extraordinary items) of RMB600,319 and RMB1,008,920, respectively, and an audited profit (after taxation and extraordinary items) of RMB486,608 and RMB738,613, respectively.

(6) Crane Beijing

Crane Beijing is a company established under the laws of the PRC with limited liability on 27 December 2007. The registered capital of Crane Beijing of RMB5,000,000 has been fully paid up as at the Latest Practicable Date. Crane Beijing is owned as to 67.5% by Beijing Building Materials and as to 32.5% by Crane Plumbing LLC, a third party independent of the Group and connected persons of the Group. Crane Beijing is principally engaged in the sales of building materials, sanitary and ceramic wares.

The audited net asset value of Crane Beijing as at 31 December 2009 was RMB3,742,397. The audited accounts of Crane Beijing for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited loss (both before and after taxation and extraordinary items) of RMB34,662 and RMB1,213,131, respectively.

(7) Beijing Yanshan Cement

Beijing Yanshan Cement is a company established under the laws of the PRC with limited liability on 1 May 1959. The registered capital of Beijing Yanshan Cement of RMB62,668,500 has been fully paid up as at the Latest Practicable Date. Beijing Yanshan Cement is principally engaged in manufacturing of cement. Beijing Yanshan Cement ceased its cement production in July 2008 and owns a parcel of industrial land with a site area of approximately 320,000 sq.m.

The audited net asset value of Beijing Yanshan Cement as at 31 December 2009 was RMB37,045,447. The audited accounts of Beijing Yanshan Cement for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited loss (both before and after taxation and extraordinary items) of RMB15,014,906 and RMB867,630, respectively.

(8) Beijing Architectural Decoration

Beijing Architectural Decoration is a company established under the laws of the PRC with limited liability on 1 March 1983. The registered capital of Beijing Architectural Decoration of RMB30,000,000 has been fully paid up as at the Latest Practicable Date. Beijing Architectural Decoration is principally engaged in architectural design, installation and decoration services. Beijing Architectural Decoration has been engaged in many high-end and large architectural design and decoration projects including banquet hall of People’s City Hall, VIP room of Terminal 3 of Beijing Capital Airport and new room of Beijing Capital Museum.

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The audited net asset value of Beijing Architectural Decoration as at 31 December 2009 was RMB33,141,753. The audited accounts of Beijing Building for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited profit (before taxation and extraordinary items) of RMB1,981,388 and RMB2,273,919, respectively, and an audited profit (after taxation and extraordinary items) of RMB1,442,942 and RMB1,624,000, respectively.

(9) Badaling Travel

Badaling Travel is a company established under the laws of the PRC with limited liability on 13 March 1997. The registered capital of Badaling Travel of RMB286,000,000 has been fully paid up as at the Latest Practicable Date. Badaling Travel is principally engaged in the tourism industry. Badaling Travel mainly operates the Badaling Hot Spring Resort (八達嶺溫泉度假村).

In February 2007, the Parent acquired the 100% equity interest in Badaling Travel at a total cost of RMB160,000,000 from two parties who are third parties independent of the Group and connected persons of the Group.

The audited net asset value of Badaling Travel as at 31 December 2009 was RMB146,112,479. The audited accounts of Badaling Travel for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited profit and audited loss (before taxation and extraordinary items) of RMB46,307 and RMB19,394,588, respectively, and an audited profit and audited loss (after taxation and extraordinary items) of RMB36,260 and RMB19,450,963, respectively.

(10) Beijing Zhongweisenhai

Beijing Zhongweisenhai is a company established under the laws of the PRC with limited liability on 15 May 1981. The registered capital of Beijing Zhongweisenhai of RMB2,132,600 has been fully paid up as at the Latest Practicable Date. Beijing Zhongweisenhai is principally engaged in the leasing of industrial properties. Beijing Zhongweisenhai owns parcels of land with a total site area of approximately 340,000 sq.m. and investment properties with an aggregate GFA of approximately 100,000 sq.m..

The audited consolidated net asset value of Beijing Zhongweisenhai as at 31 December 2009 was RMB12,099,044. The audited consolidated accounts of Beijing Zhongweisenhai for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited consolidated profit (before taxation and extraordinary items) of RMB26,197 and RMB962,250, respectively, and an audited consolidated profit (after taxation and extraordinary items) of RMB15,601 and RMB716,135, respectively.

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(11) BBMG Dacheng

BBMG Dacheng is a company established under the laws of the PRC with limited liability on 1 September 1992. The registered capital of BBMG Dacheng of RMB5,000,000 has been fully paid up as at the Latest Practicable Date. BBMG Dacheng is principally engaged in property management, repair and maintenance of equipments, gardening and horticulture and consultancy services. BBMG Dacheng manages several properties with an aggregate GFA of approximately 1,068,918 sq.m.

The audited consolidated net asset value of BBMG Dacheng as at 31 December 2009 was RMB6,568,103. The audited consolidated accounts of BBMG Dacheng for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited consolidated profit (before taxation and extraordinary items) of RMB926,314 and RMB1,292,540, respectively, and an audited consolidated profit (after taxation and extraordinary items) of RMB694,735 and RMB967,031, respectively.

(12) Beijing Ganlujiayuan

Beijing Ganlujiayuan is a company established under the laws of the PRC with limited liability on 20 February 2001. The registered capital of Beijing Ganlujiayuan of RMB500,000 has been fully paid up as at the Latest Practicable Date. Beijing Ganlujiayuan is principally engaged in the provision of property management service. Beijing Ganlujiayuan manages several properties with an aggregate GFA of approximately 970,000 sq.m.

The audited consolidated net asset value of Beijing Ganlujiayuan as at 31 December 2009 was RMB740,224. The audited consolidated accounts of Beijing Ganlujiayuan for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited consolidated profit (before taxation and extraordinary items) of RMB110,241 and RMB110,742, respectively, and an audited consolidated profit (after taxation and extraordinary items) of RMB87,208 and RMB87,818, respectively.

(13) Beijing Yuandongjiemei

Beijing Yuandongjiemei is a state-owned enterprise established under the laws of the PRC on 26 October 1992. The registered capital of Beijing Yuandongjiemei of RMB400,000 has been fully paid up as at the Latest Practicable Date. Beijing Yuandongjiemei is principally engaged in the provision of cleaning service, interior decoration services and sales of building materials and other commodities.

The audited net asset value of Beijing Yuandongjiemei as at 31 December 2009 was RMB656,653. The audited accounts of Beijing Yuandongjiemei for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited profit (before taxation and extraordinary items) of RMB60,395 and RMB60,223, respectively, and an audited profit (after taxation and extraordinary items) of RMB36,833 and RMB43,571, respectively.

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(14) BBMG Hong Kong

BBMG Hong Kong is a company established under the laws of the Hong Kong with limited liability on 21 February 1984. The authorized and issued share capital of BBMG Hong Kong is HKD1,000,000. BBMG Hong Kong is owned as to 80% by the Parent and as to 20% by Beijing Furniture. BBMG Hong Kong is principally engaged in property investment.

The audited net asset value of BBMG Hong Kong as at 31 December 2009 was RMB230,625. The audited accounts of BBMG Hong Kong for the two years ended 31 December 2009 prepared on a basis consistent with the HKFRS recorded an audited loss (both before and after taxation and extraordinary items) of RMB62,877 and RMB590,078, respectively.

(15) BBMG Human Resources

BBMG Human Resources is a company established under the laws of the PRC with limited liability on 15 May 2009. The registered capital of BBMG Human Resources of RMB500,000 has been fully paid up as at the Latest Practicable Date. BBMG Human Resources is principally engaged in labour services provision.

The audited net asset value of BBMG Human Resources as at 31 December 2009 was RMB494,535. The audited accounts of BBMG Human Resources for the year ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited loss (both before and after taxation and extraordinary items) of RMB5,465.

(16) BBMG Hongye

BBMG Hongye is a company established under the laws of the PRC with limited liability on 30 September 2007. The registered capital of BBMG Hongye of RMB2,000,000 has been fully paid up as at the Latest Practicable Date. BBMG Hongye is principally engaged in property investment, the research and development on environmental protection, provision of technical services and consultancy services. BBMG Hongye owns parcels of land with a total site area of approximately 33,000 sq.m. and offices and shops with an aggregate GFA of approximately 81,000 sq.m. for rental purposes.

BBMG Hongye will acquire the Dacheng Building pursuant to an asset allocation from the Parent at nil consideration before completion of the BBMG Hongye Acquisition. The Dacheng Building has been mortgaged in favour of BOC since 8 May 2009 in consideration for the provision of the guarantee by BOC for the corporate debenture in the principal amount of RMB800 million for a term of 10 years issued by the Parent on 24 May 2007. Upon completion of the BBMG Hongye Acquisition, the transaction contemplated under such mortgage would become a continuing connected transaction between the Enlarged Group and the Parent, and the Company would comply with further disclosure requirements as required by the Listing Rules in respect of such transaction.

The audited consolidated net asset value of BBMG Hongye as at 31 December 2009 was RMB449,655,272. The audited consolidated accounts of BBMG Hongye for the two years ended 31 December 2009 prepared on a basis consistent with the PRC GAAP recorded an audited consolidated loss and audited consolidated profit (before taxation and extraordinary items) of RMB468,135 and RMB2,665,741, respectively, and an audited consolidated loss and audited consolidated profit (after taxation and extraordinary items) of RMB468,135 and RMB794,790, respectively.

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INFORMATION ON THE ACQUIRED ASSETS

(1) The land use right of the Beijing Pinggu Site and the properties and facilities built thereon

The Beijing Pinggu Site is located at No.11, Tai Ping Road East, Mafang Town, Pinggu District, Beijing, PRC with a site area of approximately 132,296.58 sq.m. The Beijing Pinggu Site is a granted land for industrial use. The properties and facilities built on the Beijing Pinggu Site include a cement factory with a cement production line with an annual production capacity of 900,000 tones, a residual heat power generator under construction, office, storage and staff dormitory.

The net asset value of the land use right of the Beijing Pinggu Site and the properties and facilities built thereon as at 30 April 2010 was RMB131,089,900. For the two years ended 31 December 2009, the income generated from the cement factory of Beijing Pinggu was of approximately RMB182.51 million and RMB286.42 million, respectively.

(2) The land right of the BBMG Landao Site and the BBMG Landao Building built thereon building

The BBMG Landao Site is located at No.1 Anningzhuang East Road, Qinghe, Haidian District, Beijing, PRC with a site area of approximately 5,000 sq.m.. The BBMG Landao Site is an authorization land for industrial use. BBMG Landao Building, built in 2007, with an actual GFA of approximately 16,930.15 sq.m. is used for rental purpose, and its main tenant is Landao Jinyu Baihuo (藍島金隅百貨).

The net asset value of the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon as at 31 December 2009 was RMB109,857,600. For the two years ended 31 December 2009, the rental income generated from the BBMG Landao Building was of approximately RMB3.9 million and RMB4.4 million, respectively.

INFORMATION ON THE PARTIES TO THE EQUITY ACQUISITION AGREEMENTS AND THE ASSET ACQUISITION AGREEMENTS

The Parent is a limited liability company established under the laws of PRC on 6 December 1996 and is a wholly-owned subsidiary of the Beijing SASAC. The Parent is principally engaged in, among others, state owned assets management, building materials manufacturing, sale of building materials and real estate development.

Dacheng Property is a limited liability company established under the laws of PRC on 21 November 1984 and is a wholly-owned subsidiary of the Parent. Dacheng Property is principally engaged in property development, provision of property management services and sale of building materials.

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BBMG Assets Operation is a limited liability company established under the laws of PRC on 13 November 2007 and is a wholly-owned subsidiary of the Parent. BBMG Assets Operation is principally engaged in investment management and investment consultancy.

Beijing Furniture is a state-owned enterprise established under the laws of PRC on 20 December 1986 and is a wholly-owned subsidiary of the Parent. Beijing Furniture is principally engaged in sales of furniture, timer, metal materials, building materials and other materials.

Beijing Building Materials is a state-owned enterprise established under the laws of the PRC on 28 May 1992 and is a wholly-owned subsidiary of the Parent. Beijing Building Materials is principally engaged in sales of building materials, furniture, kitchen equipments, timer, cement and other materials.

Beijing Building Materials Group is a collectively-owned enterprise established under the laws of the PRC on 8 December 1993 and the Parent holds more than 50% voting power of Beijing Building Materials Group. Beijing Building Materials Group is principally engaged in metal and wood processing and sales of building materials, metal, metal materials and other materials.

Beijing Pinggu is a limited liability company established under the laws of the PRC with on 5 February 2007 and is a wholly-owned subsidiary of the Parent. Beijing Pinggu is principally engaged in the production of cement.

The Company is a joint stock company established under the laws of the PRC with limited liability, the H Shares of which are listed on the Main Board of the Stock Exchange. The Group is principally engaged in the manufacture and sale of cement and modern building materials, property development, property investment, and provision of property management services.

BBMG Property Management is a limited liability company established under the laws of PRC on 8 October 1997 and is a wholly-owned subsidiary of the Company. BBMG Property Management is principally engaged in property management, including office rental.

BBMG Home is a limited liability company established under the laws of PRC on 11 June 2007 and is a wholly-owned subsidiary of the Company. BBMG Home is principally engaged in sales of building materials.

Beijing Jinhaiyan is a limited liability company established under the laws of the PRC on 25 April 1996 and is an indirect wholly-owned subsidiary of the Company. Beijing Jinhaiyan is principally engaged in property management and public car parking service.

Tiantan Furniture is a joint stock company established on 28 December 1999 under the laws of the PRC and owned as to 93.055% by the Company. Tiantan Furniture is principally engaged in production and sale of furniture and decorative materials.

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Beijing Jianji is a limited liability company established under the laws of the PRC on 2 February 1957 and is a wholly-owned subsidiary of the Company. Beijing Jianji is principally engaged in property rental and property management.

FUNDING FOR THE ACQUISITIONS

The aggregate consideration of the Equity Acquisitions and the Asset Acquisitions of approximately RMB2,651 million will be funded by the Group’s internal resources.

REASONS FOR AND BENEFITS OF THE EQUITY ACQUISITIONS AND THE ASSET ACQUISITIONS

Cement Segment

As disclosed in the prospectus of the Company dated 17 July 2009, it is part of the future plans of the Company for the cement business segment to expand its market share in the greater Beijing-Bohai Gulf Region through acquisitions. The Board considers that the Tianjin Jinzhu Concrete Acquisition and the Beijing Pinggu Acquisition will provide the Group with greater access to the market in the Beijing and Tianjin vicinities and will enable the Group to expand its cement business in the greater Beijing-Bohai Gulf Region. The Board also considers that the Beijing Cement Plant Acquisition would streamline and consolidate the shareholding structure of the Company’s non wholly-owned subsidiary, 北京新北水水泥有限責任公司 (Beijing Xinbeishui Cement Co., Ltd.*), therefore enhancing the internal management of Beijing Cement Plant. In addition to the increase in annual production capacity for commercial concrete and cement bring to the Group and the enhancement of the Group’s overall profitability and the opportunity to increase the strategic resources reserve, the Board also considers the Tianjin Jinzhu Concrete Acquisition, the Beijing Cement Plant Acquisition and the Beijing Pinggu Acquisition a necessary measure to avoid business competition between the Parent Group and the Group in the cement industry.

Since Beijing Eco-island is the only large and modern institute which can incinerate, landfill and utilize hazardous waste in Beijing, the Board considers that the Beijing Eco-island Acquisition, Beijing Eco-island would co-operate with and supplement the business of 北京金隅紅樹林環保技術有限責任公司 (BBMG Mangrove Environmental Protection Technology Co., Ltd.*), a wholly-owned subsidiary of the Company, and enhance the Group’s competitiveness in the environmental protection business.

Modern Building Materials Segment

The Board intends to use the parcel of land with a site area of approximately 380,000 sq.m. owned by Beijing Yaxin for future development of BBMG modern building materials industrial park which would enhance the development of the Group’s modern building materials business.

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Beijing Longshuncheng produces Chinese style hardwood furniture with fine quality under the brand name of “龍順成” which is a very famous Chinese century-old furniture brand name. Crane Beijing is a sales agent of the brand of “Crane” sanitary wares and other ceramic wares. The Board considers that the acquisition of these entities could broaden and diversify the product types and enhance the sales range of ceramics products of the Group and thus enlarge its modern building materials business.

Property Development Segment

Although Beijing Yanshan Cement has ceased its cement production in July 2008, it owns a parcel of industrial land with a site area of approximately 320,000 sq.m. The Board considers that by way of the Beijing Yanshan Cement Acquisition, the land bank reserves of the Group would be increased for future potential property development use.

Beijing Architectural Decoration is the biggest architectural design firm in Beijing with first class qualification of building decoration engineering design (建築裝飾裝修工程設計與施工一級資質) and construction and first class qualification of mechanical and electrical equipment installation engineering contracting (機電設備安裝工程專門承包一級資質). The Board considers that the Beijing Architectural Decoration Acquisition would further extend and expand the business scope of the Group’s property development business and would reduce the potential continuing connected transaction amounts between the Parent Group and the Group.

Property Investment and Management Segment

Beijing Zhongweisenhai, BBMG Dacheng, Beijing Ganlujiayuan and BBMG Hongye own a number of investment properties and manage several properties in Beijing, the PRC. The Board considers that the acquisition of these entities provides an excellent opportunity for the Group to expand its property investment and management business in the PRC.

Beijing Yuandongjiemei has been providing cleaning services to BBMG Property Management and BBMG Human Resources has been paying the social security fund on behalf of the Group’s personnel, the Board considers that the Beijing Yuandongjiemei Acquisition and the BBMG Human Resources would reduce the potential continuing connected transaction amounts between the Parent Group and the Group.

BBMG Landao Building has a steady and stable rental income and the Board considers that the BBMG Landao Building Acquisition would further enhance the property investment business segment of the Group.

As disclosed in the prospectus of the Company dated 17 July 2009, the Company failed to include Badaling Travel into the Group upon listing was due to the transfer restriction arising from the equity pledge granted by the Parent in favour of Beijing Enterprises (Tourism) Limited. With the written consent granted by Beijing Enterprises (Tourisum) Limited, the Board considers it would be of benefit to the Shareholders as a whole to acquire Badaling Travel in light of the reputed Badaling Hot Spring Resort operated and managed by Badaling Travel.

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The Board intends to use BBMG Hong Kong as a platform to pursue offshore business opportunities in the future.

Furthermore, upon completion of the Equity Acquisitions, all Acquired Subsidiaries will become subsidiaries of the Company and their respective financials will be consolidated into the accounts of the Group.

The Directors (including the independent non-executive Directors) considers that the terms of the Equity Acquisition Agreements and Asset Acquisition Agreements were arrived at after arms’ length negotiations between the parties involved and the transitions under the Equity Acquisition Agreements and Assets Acquisition Agreements were entered into in the ordinary and usual course of business of the Group. The Directors (including the independent non-executive Directors) are of the view that the Equity Acquisitions and the Asset Acquisitions are on normal commercial terms, which are fair and reasonable and are in the best interest of the Group and the shareholders of the Company as a whole.

The executive Directors, Jiang Weiping and Li Changli, who are also the directors of the Parent, are materially interested in the transactions contemplated under the Equity Acquisition Agreements and the Asset Acquisition Agreements. Consequently, they had abstained from voting on the relevant Board resolutions approving the aforesaid transactions.

LISTING RULES IMPLICATIONS

The Parent is a substantial shareholder of the Company. Therefore, the Parent and its subsidiaries (including Dacheng Property, BBMG Assets Operation, Beijing Furniture, Beijing Building Materials, Beijing Building Materials Group and Beijing Pinggu) are connected persons of the Company for the purposes of the Listing Rules. Accordingly, the transactions contemplated under the Equity Acquisition Agreements and the Asset Acquisition Agreements constitute connected transactions for the Company under the Listing Rules.

As the transactions under the Equity Acquisition Agreements and the Asset Acquisition Agreements and the transaction under the Acquisition Agreements as approved by the Independent Shareholders at the Company’s extraordinary general meeting held on 30 March 2010 were entered into by the Company with party connected or otherwise associated with one another and all involve the acquisition of interests in a group of companies under the Parent Group, the connected transactions under the Equity Acquisition Agreements, the Asset Acquisition Agreements and the Acquisition Agreements are required to be aggregated under Rules 14A.26(1) or (2) of the Listing Rules. As all of the applicable percentage ratios in respect of the Equity Acquisitions, the Asset Acquisitions and the acquisitions under the Acquisition Agreements, on an aggregate basis, are more than 5% but are less than 25%, the Equity Acquisitions and the Asset Acquisitions also constitute discloseable transactions of the Company under the Listing Rules. The Equity Acquisitions and the Asset Acquisitions, being connected and discloseable transactions, are subject to the reporting, announcement and independent shareholders’ approval requirements under the Listing Rules.

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3. THE EGM

The EGM will be held for the purpose of considering and, if though fit, approving by the Independent Shareholders on the Agreements and the transactions contemplated thereunder.

In accordance with the Listing Rules, The Parent and its associates, being connected persons of the Company and having material interests (which are different from those of the Independent Shareholders) in the Equity Acquisitions and the Asset Acquisitions, will abstain from voting at the EGM for the relevant resolution. As at the Latest Practicable Date, the Parent and its associates held and controlled the voting rights of 1,753,647,866 Domestic Shares, representing approximately 45.27% of the issued share capital of the Company.

To the best of the Director’s knowledge, information and belief having made all reasonable enquiries, other than the Parent and its associates being connected persons of the Company, there is no connected person of the Company, any Shareholders or their respective associates with a material interest in the relevant transactions under the Equity Acquisition Agreements and the Asset Acquisition Agreements required to abstain from voting at the EGM.

A notice to convene the EGM is set out on pages 165 to 166 of this circular. The EGM will be held at Conference Room 6, 22nd Floor, Tower D, Global Trade Centre, No. 36, North Third Ring East Road, Dongcheng District, Beijing, the People’s Republic of China on Tuesday, 27 July 2010 at 2:30 p.m..

The form of proxy for use at the EGM is enclosed with this circular. Whether or not you intend to attend the meeting, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return them to the headquarters of the Company at Room 2220, 22nd Floor, Tower D, Global Trade Centre, No.36, North Third Ring East Road, Dongcheng District, Beijing 100013, the People’s Republic of China (for holders of Domestic Shares and unlisted Foreign Shares), or the office of the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H Shares) as soon as possible and in any event not less than 24 hours before the time for holding of the meeting or appointed time for voting. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting should you so wish.

A reply slip for the purpose of informing the Company whether you will be attending (in person or in proxy) the EGM is also despatched to you with this circular. Shareholders who intend to attend the EGM are requested to complete and send the reply slip to the Company not later than 20 days before the date of the meeting in accordance with Article 57 of the Articles of Associations

4. POLL AT GENERAL MEETING

In according with the requirement of Rule 13.39 of the Listing Rules, all resolutions to be considered, and if thought fit, to be passed at the EGM, shall be passed by way of poll.

63 -

LETTER FROM THE BOARD

5. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee has been established to advise the Independent Shareholders as to whether the terms each of the Equity Acquisition Agreements and the Asset Acquisition Agreements and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole and to advise the Independent Shareholders on how to vote, taking into account the recommendation of the independent financial adviser.

China Everbright, the independent financial adviser, has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in the same regard.

6. RECOMMENDATION

The Board (including the independent non-executive Directors) considers that the terms of each of the Equity Acquisition Agreements and the Asset Acquisition Agreements and the transactions contemplated thereunder set out in the notice of EGM are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolution as set out in the notice of EGM at the EGM.

7. ADDITIONAL INFORMATION

Your attention is drawn to the letter from the Independent Board Committee, the letter from China Everbright and the additional information set out in the appendices to this circular.

By Order of the Board BBMG Corporation[*] Jiang Weiping Chairman

64 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter from the Independent Board Committee setting out in the recommendation to the Shareholders for inclusion in this circular.

==> picture [244 x 80] intentionally omitted <==

(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2009)

11 June 2010

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTIONS

ACQUISITIONS OF EQUITY INTERESTS IN SIXTEEN ENTITIES AND ACQUISITIONS OF ASSETS OF TWO ENTITIES

We refer to the circular of the Company dated 11 June 2010 (the “ Circular ”) of which this letter forms part. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings when used herein.

We have been appointed by the Board to form the Independent Board Committee to consider and advise the Independent Shareholder as to whether, in our opinion, the terms of each of the Equity Acquisition Agreements and the Asset Acquisition Agreements between the Company or its subsidiaries (as purchaser) and the Parent or its subsidiaries (as vendor) and the transaction contemplated thereunder, which are inter-conditional upon each other, details of which are set out in the letter from the Board contained in the Circular, are on normal commercial term, fair and reasonable and in the interests of the Company and the Shareholders as a whole and to advise the Independent Shareholders on how to vote, taking into account the recommendation of China Everbright, the independent financial adviser.

Having considered the advice from China Everbright and the principal factors and reasons which it reported having considered in arriving at its advice as set out on pages 67 to 92 of the Circular, we consider that the terms of each of the Equity Acquisition Agreements and the Asset Acquisition Agreements are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. We also consider that the transactions contemplated thereunder are in the usual and ordinary course of business of the Company.

for identification purpose only
65 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Agreements and transactions thereunder.

Yours faithfully,

For and on behalf of the Independent Board Committee Hu Zhaoguang Xu Yongmo Zhang Chengfu Yip Wai Ming Independent non-executive Directors

66 -

Letter from china everbright

The following is the text of the “Letter from China Everbright” to the Independent Board Committee and the Independent Shareholders prepared for the purpose of inclusion in this circular.

11 June 2010

To the Independent Board Committee and

the Independent Shareholders of BBMG Corporation

Dear Sirs,

DiScLoSeabLe anD connecteD tranSactionS[–] acQUiSitionS of eQUitY intereSt in SiXteen entitieS anD acQUiSitionS of aSSetS of tWo entitieS

introDUction

We refer to our appointment as the independent financial adviser to make recommendations to the Independent Board Committee and the Independent Shareholders as to whether the Equity Acquisition Agreements and the Asset Acquisition Agreements (as supplemented by the Supplemental Agreement) (collectively, the “ agreements ”) and the transactions contemplated thereunder (the “ acquisitions ”) are fair and reasonable and are in the interests of the Company and the Independent Shareholders as a whole. The details of the Acquisitions are set out in the letter from the Board (the “ Letter from the board ”) contained in the circular to the Shareholders dated 11 June 2010 (the “ circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

The Independent Board Committee, comprising all of the four independent non-executive Directors, namely Mr. Hu Zhaoguang, Mr. Xu Yongmo, Mr. Zhang Chengfu and Mr. Yip Wai Ming, has been formed to consider the fairness and reasonableness of the Acquisitions, and to make recommendations to the Independent Shareholders in respect thereof. We, China Everbright Capital Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

Our role as the independent financial adviser to the Independent Board Committee and the Independent Shareholders is to give our opinion as to whether the Acquisitions are: (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) are fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

67 -

Letter from china everbright

Apart from normal professional fees for our services to the Company in connection with the engagement described above, no arrangement exists whereby China Everbright will receive any fees and benefits from the Group, the Parent or any of their respective associates. China Everbright is independent from and not connected with the Group, the Parent Group or any of their respective substantial shareholders, directors or chief executive, or any of their respective associates pursuant to Rule 13.84 of the Listing Rules, and is accordingly qualified to give independent advice to the Independent Board Committee and the Independent Shareholders regarding the Acquisitions.

In formulating our advice and recommendation, we have relied on the information and facts supplied, and the opinions expressed, by the Directors and management (the “ management ”) of the Company and have assumed that such information, facts and opinions are true and accurate. We have also sought and received confirmation from the Directors that no material facts have been omitted from the information supplied and opinions expressed to us. However, we have not conducted any independent investigation into the business, operations or financial condition of the Group, the Parent Group, the Acquired Subsidiaries and the Acquired Assets. We have assumed that (i) all statement of intention of the Company, its Directors and management of the Company as set out in the Circular will be implemented; and (ii) all statements and presentations made or referred to in the Circular were accurate at the time when they were made and are true at the date of the Circular.

We consider we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation.

PrinciPaL factorS anD reaSonS taKen into accoUnt

In formulating our view on the Acquisitions, we have taken into consideration the principal factors and reasons as set out below. In reaching our conclusion, we have considered the results of the analysis in light of each other and ultimately reached our opinion based on the results of all analysis taken as a whole.

(a) background of and reasons for the acquisitions

(i) The Group and its future development strategies

The Group is one of the largest building materials manufacturers in the PRC and the largest in the Beijing-Bohai Gulf Region. It is also a large-scale property investment and management company and leading property developer in Beijing. The Group has a portfolio of over 100 subsidiaries grouped into four business segments, namely, cement, modern building materials, property development and property investment and management (collectively, “ core businesses ”).

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Letter from china everbright

According to the annual report of the Company for the year ended 2009 (“ 2009 annual report ”), the Group holds the following market positions for the Core Businesses:

(1) Cement

In 2009, the Group was the largest cement supplier in the area comprising Beijing, Tianjin and Hebei Province, according to the China Cement Association, with the Group alone supplying more than 40% of the market share in Beijing by sales volume, according to the Beijing Cement Industry Association.

(2) Modern building materials

In 2009, the Group was one of the largest modern building materials manufacturers in Beijing. The Group manufactures and distributes a broad spectrum of modern building materials, including furniture, mineral wool acoustic boards, wall body materials and refractory materials, and occupies a leading position in many of these markets.

(3) Property development

The Group is one of the largest property development companies in Beijing and has a long history of developing properties (having developed over five million square meters of GFA since 1987), with many of the properties developed or under development located at prime locations throughout Beijing, Hangzhou, Tianjin and Huhhot including office buildings, commodity housing and affordable housing. The Group was the largest developer of affordable housing in Beijing in terms of the number of projects, as certified by the Beijing Real Estate Association in 2008.

(4) Property investment and management

The Group is a large-scale investor and manager of mid-market to high-end properties in Beijing. The Group primarily invests in and manages self-developed property. The Group invests in offices, commercial spaces and parking spaces. As at 31 December 2009, the Group’s investment properties had an aggregate GFA of approximately 601,000 sq.m. The Group also managed over one million square meters of high-end investment properties and other types of properties in Beijing as at 31 December 2009.

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Letter from china everbright

As extracted from the 2009 Annual Report, the revenues from the Company’s business segments during the two years ended 31 December 2009 were as follows:

		Years ended 31 December	Years ended 31 December
	2008		2009
	Revenue	% of total	Revenue	% of total
	(audited)		(audited)
	(RMB in millions, except for percentages)
Cement	3,314.8	38.5%	4,608.3	39.2%
Modern building materials	2,701.7	31.4%	2,878.9	24.5%
Property development	1,968.3	22.8%	3,571.9	30.4%
Property investment and management	630.1	7.3%	699.6	5.9%
Eliminations	(64.3 )	–	(57.6 )	–
Total	8,550.6	100%	11,701.1	100%

As illustrated above, the Group’s audited revenue amounted to approximately RMB11.7 billion in 2009, up approximately 36.8% year-on-year. Of which, approximately 39.2%, 30.4%, 24.5% and 5.9% of the total revenue was contributed by cement business, property development business, modern building materials business and property investment and management business, respectively.

During the year ended 31 December 2009, the net profit for the year amounted to approximately RMB2,115.1 million, up approximately 52.6% year-on-year. Such increase in net profit was mainly attributed to the significant improvement in the Group’s cement segment and property development segment in 2009. According to the 2009 Annual Report, the gross profit of cement segment and the property development segment amounted to approximately RMB995.4 million and approximately RMB1,188 million, up approximately 89.2% and approximately 78.9% year-on-year, respective.

To maintain its leading market positions for the Core Businesses, the Group will seize opportunities arising from some favourable policies introduced by the State for “boosting domestic demand” (拉動內需), “subsidizing the purchase of building materials in rural areas” (建材下鄉) and “encouraging industry restructuring” (鼓勵行業重組) to maintain its continued rapid growth and achieve rapid growth in its overall performance.

As advised by the Management, the Group will use various opportunities to actively carry out business restructuring for the rapid expansion of the business size of the Core Businesses. In addition, the Group will further capitalize on the foundation role of market resource allocation and further improve the control on the strategic resources in Beijing, Tianjin and Hebei Province and other regions, laying a solid foundation for the sustainable development of the Core Businesses.

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Letter from china everbright

(ii) The vendors and their relationship with the Group

Set out below is the summary showing the names of the relevant vendor(s) (“ vendors under the Agreements and their respective relationship with the Group:

	name of the agreements	name of the vendor(s)	Notes
(1)	Tianjin Jinzhu Concrete Acquisition Agreement	Dacheng Property	1
(2)	Beijing Cement Plant Acquisition Agreement	The Parent	2
(3)	Beijing Eco-island Acquisition Agreement	The Parent	2
(4)	Beijing Yaxin Acquisition Agreement	BBMG Assets Operation	3
(5)	Beijing Longshuncheng Acquisition Agreement	Beijing Building Materials	4
(6)	Crane Beijing Acquisition Agreement	Beijing Building Materials	4
(7)	Beijing Yanshan Cement Acquisition Agreement	The Parent	2
(8)	Beijing Architectural Decoration	The Parent	2
	Acquisition Agreement
(9)	Badaling Travel Acquisition Agreement	The Parent	2
(10)	Beijing Zhongweisenhai Acquisition Agreement	The Parent	2
(11)	BBMG Dacheng Acquisition Agreement	Dacheng Property	1
(12)	Beijing Ganlujiayuan Acquisition Agreement	The Parent	2
(13)	Beijing Yuandongjiemei Acquisition Agreement	Beijing Building Materials Group	5
(14)	BBMG Hong Kong Acquisition Agreement	The Parent and Beijing Furniture	2 & 6
(15)	BBMG Human Resources Acquisition Agreement	The Parent	2
(16)	BBMG Hongye Acquisition Agreement	The Parent	2
(17)	Beijing Pinggu Acquisition Agreement	Beijing Pinggu	7
(18)	BBMG Landao Building Acquisition Agreement	The Parent	2

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Letter from china everbright

Notes:

Dacheng Property is a wholly-owned subsidiary of the Parent. Dacheng Property is principally engaged in property development, provision of property management services and sale of building materials.
The Parent is a wholly-owned subsidiary of the Beijing SASAC, being the controlling shareholder of the Company holding approximately 45.27% of the issued share capital of the Company as at the Latest Practicable Date. The Parent is principally engaged in, among others, state owned assets management, building materials manufacturing, sale of building materials and real estate development.
BBMG Assets Operation is a wholly-owned subsidiary of the Parent. BBMG Assets Operation is principally engaged in investment management and investment consultancy.
Beijing Building Materials is a wholly-owned subsidiary of the Parent. Beijing Building Materials is principally engaged in sales of building materials, furniture, kitchen equipments, timer, cement and other materials.
Beijing Building Materials Group is a collectively-owned enterprise established under the laws of the PRC on 8 December 1993 and the Parent holds more than 50% voting power of Beijing Building Materials Group. Beijing Building Materials Group is principally engaged in metal and wood processing and sales of building materials, metal, metal materials and other materials.
Beijing Furniture is a wholly-owned subsidiary of the Parent. Beijing Furniture is principally engaged in sales of furniture, timer, metal materials, building materials and other materials.
Beijing Pinggu is a wholly-owned subsidiary of the Parent. Beijing Pinggu is principally engaged in the production of cement.

According to the prospectus of the Company dated 17 July 2009 (“ Prospectus ”), in order to provide a clear delineation between the Group and the Parent, the Parent’s core businesses and assets relating to cement, modern building materials, property development and property investment and management were injected into the Group upon the completion of the reorganisation (“ reorganisation ”) conducted in preparation for the listing of the Group.

In addition, as disclosed in the Prospectus, the Company entered into a non-competition agreement (“ non-competition agreement “) with the Parent on 8 July 2009, under which the Parent agreed that it will not, and will procure that its subsidiaries (other than the Group) and its associate will not, compete with the Group in the Core Businesses. Pursuant to the Non-Competition Agreement, the Parent irrevocably granted the Company options to acquire the Parent’s interest in its retained businesses upon the completion of the Reorganisation, parcels of land and properties owned by the Parent and certain future new business, which includes any new business, project, product or technology competing, or likely to be in competition with, the Core Businesses at fair market price by giving written notice to the Parent.

(iii) The Acquired Subsidiaries and the Acquired Assets

As referred to in the Letter from the Board, the Company entered into the Agreements, which are inter-conditional upon each other, with the Vendors, whereby the Company has agreed to acquire the Acquired Subsidiaries and the Acquired Assets.

72 -

Letter from china everbright

Set out below is the summary of the Acquired Subsidiaries and their respective business background information:

			Percentage of
			shareholding
	name of the		to be acquired
	acquired		under the
	Subsidiaries	Principal business	agreements
1.	Tianjin Jinzhu	Tianjin Jinzhu Concrete has no operating	100%
	Concrete	business but holds 59.76% equity
		interest of天津金隅混凝土有限公司
		(Tianjin BBMG Concrete Co., Ltd.*).
		天津金隅混凝土有限公司(Tianjin
		BBMG Concrete Co., Ltd.*) owns 12
		concrete production plants with an
		annual concrete production capacity of
		approximately 4,000,000 cubic meters,
		and the concrete produced are supplied
		to different areas including Wuqing,
		Xiqing, Jinnan, Dagang, Tanggu and
		Hangu.
2.	Beijing Cement	As at the Latest Practicable Date, Beijing	33.88%
	Plant	Cement Plant was owned as to 66.12%	(Note 1)
		by the Group and as to 33.88% by
		the Parent. Beijing Cement Plant is
		principally engaged in the manufacturing
		and sale of cement and clinker. Beijing
		Cement Plant holds 45% equity interest
		of北京新北水水泥有限責任公司(Beijing
		Xinbeishui Cement Co., Ltd.*), which is
		55% equity interest owned by北京金隅
		紅樹林環保技術有限責任公司(BBMG
		Mangrove Environmental Protection
		Technology Co., Ltd.*), a wholly-owned
		subsidiary of the Company.

73 -

Letter from china everbright

			Percentage of
			shareholding
	name of the		to be acquired
	acquired		under the
	Subsidiaries	Principal business	agreements
3.	Beijing	Beijing Eco-island is principally engaged	100%
	Eco-island	in waste management, research and
		development on environmental protection
		and sales of building materials. Beijing
		Eco-island commenced its pilot
		operation of hazardous waste processing
		in January 2009 and its formal operation
		in 2010. Beijing Eco-island is the only
		large and modern institute which can
		incinerate, landfill and utilize hazardous
		waste in Beijing with an annual
		hazardous waste processing capacity of
		approximately 57,000 tonnes.
4.	Beijing Yaxin	Beijing Yaxin is principally engaged in	100%
		office rental. Beijing Yaxin owns parcels
		of land with a site area of approximately
		380,000 sq.m. and buildings with an
		aggregate GFA of approximately 6,698
		sq.m. for office rental.
5.	Beijing	Beijing Longshuncheng is principally	100%
	Longshuncheng	engaged in sales of modern building
		materials and furniture and furniture
		consultancy services.
6.	Crane Beijing	Crane Beijing is principally engaged in	67.50%
		sales of building materials, sanitary and	(Note 2)
		ceramic wares.
7.	Beijing Yanshan	Beijing Yanshan Cement is principally	100%
	Cement	engaged in manufacturing of cement.
		Beijing Yanshan Cement ceased its
		cement production in July 2008 and
		owns a parcel of industrial land with
		a site area of approximately 320,000
		sq.m..

74 -

Letter from china everbright

			Percentage of
			shareholding
	name of the		to be acquired
	acquired		under the
	Subsidiaries	Principal business	agreements
8.	Beijing	Beijing Architectural Decoration is	100%
	Architectural	principally engaged in architectural
	Decoration	design, installation and decoration
		service. Beijing Architectural Decoration
		has been engaged in many high-end
		and large projects including banquet
		hall of People’s City Hall, VIP room of
		Terminal 3 of Beijing Capital Airport
		and new room of Beijing Capital
		Museum.
9.	Badaling Travel	Badaling Travel is principally engaged in	100%
		the tourism industry. Badaling Travel
		mainly operates the Badaling Hot Spring
		Resort (八達嶺溫泉度假村).
10.	Beijing	Beijing Zhongweisenhai is principally	100%
	Zhongweisenhai	engaged in the leasing of industrial
		properties. Beijing Zhongweisenhai
		owns parcels of land with a total site
		area of approximately 340,000 sq.m. and
		investment properties with an aggregate
		GFA of approximately 100,000 sq.m..
11.	BBMG Dacheng	BBMG Dacheng is principally engaged	100%
		in property management, repair and
		maintenance of equipment, gardening
		and horticulture and consultancy
		services. BBMG Dacheng manages
		several properties with an aggregate
		GFA of approximately 1,068,918 sq.m..
12.	Beijing	Beijing Ganlujiayuan is principally	100%
	Ganlujiayuan	engaged in the provision of property
		management service. Beijing
		Ganlujiayuan manages several properties
		with an aggregate GFA of approximately
		970,000 sq.m..
13.	Beijing	Beijing Yuandongjiemei is principally	100%
	Yuandongjiamei	engaged in the provision of cleaning
		services, interior decoration services
		and sales of building materials and other
		commodities.

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Letter from china everbright

			Percentage of
			shareholding
	name of the		to be acquired
	acquired		under the
	Subsidiaries	Principal business	agreements
14.	BBMG Hong	BBMG Hong Kong is principally engaged	100%
	Kong	in property investment.
15.	BBMG Human	BBMG Human Resources is principally	100%
	Resources	engaged in labour services provision.
16.	BBMG Hongye	BBMG Hongye is principally engaged	100%
		in property investment, research
		and development on environmental
		protection, provision of technical
		services and consultancy services.
		BBMG Hongye owns parcels of land
		with a total site area of approximately
		33,000 sq.m. and offices and shops with
		an aggregate GFA of approximately
		81,000 sq.m. for rental purposes.
		BBMG Hongye will acquire the Dacheng
		Building pursuant to an asset allocation
		from the Parent at nil consideration
		before completion of the BBMG Hongye
		Acquisition. The Dacheng Building has
		been mortgaged in favour of BOC since
		8 May 2009 in consideration for the
		provision of the guarantee by BOC for
		the corporate debenture in the principal
		amount of RMB800 million for a term of
		10 years issued by the Parent on 24 May
		2007.

Notes:

As disclosed in the announcement of the Company dated 4 June 2010, the Company has entered into an equity reorganization agreement with China Cinda Asset Management Corporation (“ china cinda ”) to acquire the 66.12% equity interest in Beijing Cement Plant.
Upon completion of the Acquisitions, Crane Beijing will be owned as to 67.5% by the Group and as to 32.5% by Crane Plumbing LLC.
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Letter from china everbright

Set out below is the summary of the Acquired Assets to be acquired under the Asset Acquisition Agreements:

(1) The land use right of the Beijing Pinggu Site and the properties and facilities built thereon

The Beijing Pinggu Site is located at No.11, Tai Ping Road East, Mafang Town, Pinggu District, Beijing, PRC with a site area of approximately 132,296.58 sq.m.. The Beijing Pinggu Site is a granted land for industrial use. The properties and facilities built on the Beijing Pinggu Site include a cement factory with a cement production line with an annual production capacity of 900,000 tones, a residual heat power generator under construction, office, storage and staff dormitory.

The net asset value of the land use right of the Beijing Pinggu Site and the property and facilities erected thereon building as at 30 April 2010 was RMB131,089,900. For the two years ended 31 December 2009, the income generated from the cement factory of Beijing Pinggu was of approximately RMB182.51 million and RMB286.42 million.

(2) The land use right of the BBMG Landao Site and the BBMG Landao Building built thereon

The net asset value of the land use right of the BBMG Landao Site and the BBMG Landao Building built thereon as at 31 December 2009 was RMB109,857,600. For the two years ended 31 December 2009, the rental income generated from BBMG Landao Building was of approximately RMB3.9 million and RMB4.4 million.

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Letter from china everbright

Set out below is the summary of the key financial figures of the Acquired Subsidiaries during the two years ended 31 December 2009:

		audited profit/(loss)	audited profit/(loss)
		after taxation		audited
		and extraordinary		net asset
		items during the year		value as at
		ended 31 December		31 December
name	of the acquired Subsidiaries	2009	2008	2009
		RMB	RMB	RMB
1.	Tianjin Jinzhu Concrete	16,607,942	4,139,912	60,372,219
		(Note 1)	(Note 1)	(Note 1)
2.	Beijing Cement Plant	7,427,203	8,619,052	961,024,434
3.	Beijing Eco-island	(1,186,480 )	N/A	48,813,520
			(Note 2)
4.	Beijing Yaxin	(3,489 )	3,299	55,627,780
5.	Beijing Longshuncheng	738,613	486,608	12,923,955
6.	Crane Beijing	(1,213,131 )	(34,662 )	3,742,397
		(Note 3)	(Note 3)
7.	Beijing Yanshan Cement	(867,630 )	(15,014,906 )	37,045,447
8.	Beijing Architectural Decoration	1,624,000	1,442,942	33,141,753
9.	Badaling Travel	(19,450,963 )	36,260	146,112,479
10.	Beijing Zhongweisenhai	716,135	15,601	12,099,044
		(Note 1)	(Note 1)	(Note 1)
11.	BBMG Dacheng	967,031	694,735	6,568,103
		(Note 1)	(Note 1)	(Note 1)
12.	Beijing Ganlujiayuan	87,818	87,208	740,224
		(Note 1)	(Note 1)	(Note 1)
13.	Beijing Yuandongjiamei	43,571	36,833	656,653
14.	BBMG Hong Kong	(590,078 )	(62,877 )	230,625
15.	BBMG Human Resources	(5,465 )	N/A	494,535
			(Note 4)
16.	BBMG Hongye	794,790	(468,135 )	449,655,272
		(Note 1)	(Note 1)	(Note 1)

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Letter from china everbright

Notes:

It represents audited consolidated financial figures of the relevant companies.
Beijing Eco-island only commenced its pilot operation of hazardous waste processing business in January 2009.
As advised by the Management, Crane Beijing commenced its business operation in 2009.
BBMG Human Resources was established on 15 May 2009.

As illustrated above, the financial performance and position of each of (i) Tianjin Jinzhu Concrete; (ii) Beijing Longshuncheng; (iii) Beijing Yanshan Cement; (iv) Beijing Architectural Decoration; (v) Beijing Zhongweisenhai; (vi) BBMG Dacheng; (vii) Beijing Ganlujiayuan; (viii) Beijing Yuandongjiamei; and (ix) BBMG Hongye achieved improvements in 2009. Furthermore, the income of cement factory of Beijing Pinggu and rental income generated from BBMG Landao Building also achieved stable growth in 2009.

(iv) Reasons for, and benefit of, the Acquisitions

In assessing the reasonableness of the Acquisitions, we have discussed with the Management the reasons for, and benefit of, the Acquisitions. We are advised that the Group can be benefited from the Acquisitions in the following aspects:

Appropriate and reasonable measures to avoid possible business competition and potential continuing connected transactions between the Parent Group and the Group

As stated in the above paragraph headed “The vendors and their relationship with the Group” of this letter, the Company entered into the Non-Competition Agreement with the Parent, under which the Parent agreed that it will not, and will procure that its subsidiaries (other than the Group) and its associates will not, compete with the Group in the Core Businesses. In addition, the Parent irrevocably granted the Company options to acquire the Parent’s any new business, project, product or technology competing, or likely to be in competition with, the Core Businesses at fair market price by giving written notice to the Parent.

Taking into account of the locations and business activities of the Group and the Acquired Subsidiaries, we are of the view that the Acquisitions represent appropriate and reasonable measures to avoid possible business competition between the Parent Group and the Group.

In addition, Beijing Yuandongjiemei has been providing cleaning services to BBMG Property Management and BBMG Human Resources has been paying the social security fund on behalf of the Group’s personnel, the Board considers that the Beijing Yuandongjiemei Acquisition and the BBMG Human Resources Acquisition would reduce the potential continuing connected transaction amounts between the Parent Group and the Group.

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Excellent opportunity for the Group to expand its cement and ready-mixed concrete business in the Beijing-Bohai Gulf Region

Since 2009, the PRC government stepped up its control over the reorganisation and excess capacity of the cement industry. In order to alleviate economic risks and safeguard the healthy development of economy, the relevant authorities of the PRC has imposed stricter approval requirements in land usage, financial aid and environmental protection over new investments on cement industry. As advised by the Management, it is very difficult for the Group to obtain approval from relevant authorities in the PRC to establish new cement production facility in the Beijing-Bohai Gulf Region.

The cement and ready-mixed concrete manufacturers to be acquired under the Agreements are strategically situated with close proximity to Tianjin and Beijing, the Management considers that the Tianjin Jinzhu Concrete Acquisition and the Beijing Pinggu Acquisition will provide the Group with greater access to the market in the Beijing and Tianjin vicinities and will enable the Group to expand its cement business in the greater Beijing-Bohai Gulf Region. In addition to the increase in annual production capacity for commercial concrete and cement bring to the Group and enhancing the Group’s overall profitability and the opportunity for the Group to increase the strategic resources reserve, the Board also considers that the Beijing Cement Plant Acquisition would streamline and consolidate the shareholding structure of 北京新北水水泥有限責任公司 (Beijing Xinbeishui Cement Co., Ltd.*), therefore enhancing the internal management of Beijing Cement Plant.

In addition, through acquisition of Beijing Cement Plant, the Group will possess limestone reserves of approximately 404 million tonnes. As limestone is one of the key raw materials for cement production, the acquisition of Beijing Cement Plant will allow the Group securing stable supply of limestone which can lay a solid foundation for the sustainable development of the Group’s cement business.

Conducive to enhancing the operating efficiency of the Group through larger operation scale and sharing of resources within the Group after the Acquisitions

Cement is heavy and bulky product, and transportation cost is one of the major cost components of cement manufacturers. The cement manufacturers acquired under the Agreements are strategically situated with close proximity to Tianjin city and Hebei province which form the Beijing-Bohai Gulf Region, one of the PRC’s largest cement markets.

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Currently, the Company is one of the largest building materials manufacturers in the PRC and the largest in the Beijing-Bohai Gulf Region. Through the Acquisitions, it not only further strengthens the presence of the Group’s in the Beijing-Bohai Gulf Region, it also allows the Group to enhance its operating efficiency through larger operation scale and the sharing of resources within the Group after the Acquisitions. For example, the Group can benefit from close proximity to the Beijing-Bohai Gulf Region through reacting more quickly to customers’ needs and reducing transportation costs.

Excellent opportunity for the Group to expand its environmental protection business, property development and management business

Since Beijing Eco-island is the only large and modern institute which can incinerate, landfill and utilize hazardous waste in Beijing, the Board considers that after the Beijing Eco-island Acquisition, Beijing Eco-island would co-operate with and supplement the business of 北京金隅紅樹林環保技術有限責任公司 (BBMG Mangrove Environmental Protection Technology Co., Ltd.*), a wholly-owned subsidiary of the Company, and enhance the Group’s competitiveness in the environmental protection business.

According to the 2009 Annual Report, the Company plans to optimize the portfolio of property projects, and speed up construction, sales and recovery of capital to enhance profitability and cash flow with regarding the property development business.

In addition, given that (i) Beijing Zhongweisenhai, BBMG Dacheng, Beijing Ganlujiayuan and BBMG Hongye own a number of investment properties and manage several properties in Beijing, the PRC; and (ii) BBMG Landao Building has a steady and stable rental income, the Board considers that the acquisition of these entities provides an excellent opportunity for the Group to expand its property development and investment business in the PRC.

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Broaden the revenue bases of the Group

Beijing Longshuncheng produces Chinese style hardwood furniture with fine quality under the brand name of “龍順成” which is a very famous Chinese century-old furniture brand name. Crane Beijing is a sales agent of the brand of “Crane” sanitary ware and other ceramic wares. The Board considers that the acquisition of these entities could broaden and diversify the product types and enhance the sales range of ceramics products of the Group and thus enlarge its modern building materials business.

As disclosed in the Prospectus of the Company, the Company failed to include Badaling Travel into the Group upon listing was due to the transfer restriction arising from the equity pledge granted by the Parent in favour of Beijing Enterprises (Tourism) Limited. With the written consent granted by Beijing Enterprises (Tourism) Limited, the Board considers it would be of benefit to the Shareholders as a whole to acquire Badaling Travel in light of the reputed Badaling Hot Spring Resort operated and managed by Badaling Travel.

Having considered the above, in particular, (i) the business locations and activities of the Group and the Acquired Subsidiaries; (ii) the Non-Competition Agreement signed by the Parent and the Group; and (iii) the commercial benefits arising from the Acquisitions as discussed above, we are of the view that the Acquisitions are consistent with the overall corporate strategy of the Company and in the interests of the Company and the Independent Shareholders as a whole.

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(b) the cash considerations under the agreements

As stated in the Letter from the Board, the aggregate consideration of the Acquisitions amounted to approximately RMB2.65 billion which will be funded by the Group’s internal resources.

Set out below are the summary of the cash considerations (“ considerations ”) under the Agreements:

	name of the		amount of the cash
	agreements	assets to be acquired	considerations
(1)	Tianjin Jinzhu Concrete	100% equity interest in	RMB16,554,100
	Acquisition Agreement	Tianjin Jinzhu Concrete
(2)	Beijing Cement Plant	33.88% equity interest in	RMB319,562,200
	Acquisition Agreement	Beijing Cement Plant
(3)	Beijing Eco-island	100% equity interest in	RMB1
	Acquisition Agreement	Beijing Eco-island
(4)	Beijing Yaxin	100% equity interest in	RMB111,936,600
	Acquisition Agreement	Beijing Yaxin
(5)	Beijing Longshuncheng	100% equity interest in	RMB63,775,900
	Acquisition Agreement	Beijing Longshuncheng
(6)	Crane Beijing	67.5% equity interest in	RMB2,563,400
	Acquisition Agreement	Crane Beijing
(7)	Beijing Yanshan Cement	100% equity interest	RMB275,040,400
	Acquisition Agreement	in Beijing Yanshan
		Cement
(8)	Beijing Architectural	100% equity interest in	RMB42,080,900
	Decoration Acquisition	Beijing Architectural
	Agreement	Decoration
(9)	Badaling Travel	100% equity interest in	RMB122,562,300
	Acquisition Agreement	Badaling Travel

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	name of the		amount of the cash
	agreements	assets to be acquired	considerations
(10)	Beijing Zhongweisenhai	100% equity interest in	RMB550,234,000
	Acquisition Agreement	Beijing Zhongweisenhai
(11)	BBMG Dacheng	100% equity interest in	RMB11,860,800
	Acquisition Agreement	BBMG Dacheng
(12)	Beijing Ganlujiayuan	100% equity interest in	RMB2,487,900
	Acquisition Agreement	Beijing Ganlujiayuan
(13)	Beijing Yuandongjiemei	100% equity	RMB556,900
	Acquisition Agreement	interest in Beijing
		Yuandongjiemei
(14)	BBMG Hong Kong	100% equity interest in	RMB5,984,900
	Acquisition Agreement	BBMG Hong Kong
(15)	BBMG Human Resources	100% equity interest	RMB494,500
	Acquisition Agreement	in BBMG Human
		Resources
(16)	BBMG Hongye	100% equity interest in	RMB852,992,400
	Acquisition Agreement	BBMG Hongye
(17)	Beijing Pinggu	the land use right of	RMB162,433,400
	Acquisition Agreement	the Beijing Pinggu
		Site and the property
		and facilities erected
		thereon
(18)	BBMG Landao Building	the land use right of the	RMB110,364,900
	Acquisition Agreement	BBMG Landao Site
		and BBMG Landao
		Building built thereon
		total:	rmb2,651,485,501

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(i) Basis of determination

As disclosed in the Letter from the Board, the Considerations were determined after an arm’s length negotiation between the Company and the Vendors with reference to, among other factors, the appraised value of the (i) equity interests of the Acquired Subsidiaries; and (ii) Acquired Assets determined by independent valuers as stated in the Asset Valuation Reports which has been approved and filed to Beijing SASAC.

Set out below are the appraised values of the Acquired Subsidiaries and the Acquired Assets:

		the appraised	the appraised
name of the		value of the entire	value of the equity
acquired	valuation	equity interest/	interest/assets to
Subsidiaries	methodology	assets	be acquired	Date of valuation
Tianjin Jinzhu	Cost method	RMB16,554,100	RMB16,554,100	31 March 2010
Concrete
Acquisition
Agreement
Beijing Cement	Cost method	RMB943,217,800	RMB319,562,200	31 December 2009
Plant Acquisition
Agreement
Beijing Eco-island	Cost method	(RMB34,351,100)	(RMB34,351,100)	31 December 2009
Acquisition
Agreement
Beijing Yaxin	Cost method	RMB111,936,600	RMB111,936,600	31 December 2009
Acquisition
Agreement
Beijing	Cost method	RMB63,775,900	RMB63,775,900	31 December 2009
Longshuncheng
Acquisition
Agreement
Crane Beijing	Cost method	RMB3,797,700	RMB2,563,400	31 December 2009
Acquisition
Agreement
Beijing Yanshan	Cost method	RMB275,040,400	RMB275,040,400	31 December 2009
Cement
Acquisition
Agreement
Beijing	Cost method	RMB42,080,900	RMB42,080,900	31 December 2009
Architectural
Decoration
Acquisition

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		the appraised	the appraised
name of the		value of the entire	value of the equity
acquired	valuation	equity interest/	interest/assets to
Subsidiaries	methodology	assets	be acquired	Date of valuation
Badaling Travel	Cost method	RMB122,562,300	RMB122,562,300	31 December 2009
Acquisition
Agreement
Beijing	Cost method	RMB550,234,000	RMB550,234,000	31 December 2009
Zhongweisenhai
Acquisition
Agreement
BBMG Dacheng	Cost method	RMB11,860,800	RMB11,860,800	31 December 2009
Acquisition
Agreement
Beijing	Cost method	RMB2,487,900	RMB2,487,900	31 December 2009
Ganlujiayuan
Acquisition
Agreement
Beijing	Cost method	RMB556,900	RMB556,900	31 December 2009
Yuandongjiemei
Acquisition
Agreement
BBMG Hong Kong	Cost method	RMB5,984,900	RMB5,984,900	31 October 2009
Acquisition
Agreement
BBMG Human	Cost method	RMB494,500	RMB494,500	31 December 2009
Resources
Acquisition
Agreement
BBMG Hongye	Cost method	RMB852,992,400	RMB852,992,400	31 December 2009
Acquisition
Agreement
Beijing Pinggu	Cost method	RMB162,433,400	RMB162,433,400	30 April 2010
Acquisition
Agreement
BBMG Landao	Income	RMB110,364,900	MB110,364,900	31 December 2009
Building	method
Acquisition
Agreement

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As illustrated above, the Considerations (except for the Beijing Eco-island Acquisition) are equivalent to the portion of the appraised value of the equity interest to be acquired by the Group. Since Beijing Eco-island recorded negative appraised value as at 31 December 2009, the Parent agreed to transfer its equity interest in Beijing Eco-island to the Group at nominal price of RMB1.

(ii) Valuation methodology

As mentioned above, the Considerations were determined after an arm’s length negotiation between the Company and the Vendors with reference to, among other factors, the appraised value of (i) the equity interest of the Acquired Subsidiaries; and (ii) the Acquired Assets determined by independent valuers (“ independent valuers ”) as stated in the Asset Valuation Reports.

In assessing the Considerations, we had discussed with the Independent Valuers on the methodology adopted and the assumptions used in arriving at the appraisal values of the Acquired Subsidiaries. Based on our discussion with the Independent Valuers, we have no reason to doubt the fairness and appropriateness of the methodologies adopted and assumptions adopted by them in carrying out the valuation of the Acquired Subsidiaries.

As advised by Independent Valuers, the appraisal valuations of the Acquired Subsidiaries and the Acquired Assets were conducted in accordance with the relevant rules and regulations regarding asset valuation in the PRC. Pursuant to 企業國有產權轉讓管理暫行辦法 (the Provisional Measures on the Management of Acquisition of the State-owned Property Rights of Enterprises) effective from 1 February 2004, the consideration for the acquisition of State-owned assets shall be based on the value appraised by a qualified valuer endorsed by or filed with the relevant PRC government regulatory bodies. In view of the above and as confirmed by the Management that the Independent Valuers are qualified valuers endorsed by or filed with the relevant PRC government regulatory bodies, we consider that the Considerations, which are based on the appraised value, are in line with our understanding of the above PRC regulation.

(iii) Comparable connected transactions

To assess the fairness and reasonableness of the Considerations, we have, to the best of our knowledge, information and belief, performed searches on the official website of the Stock Exchange and identified 31 connected transactions (“ comparable connected transactions ”) since 1 June 2009, being 12 months preceding the date of the Agreements, up to the Latest Practicable Date, involving all acquisitions of assets or businesses from connected parties by companies incorporated in the PRC and listed on the main board of the Stock Exchange and adopted the appraised values as the basis to determine the relevant considerations. We compared the premium/discount of the considerations over/to appraised values of the Comparable Connected Transactions. However, we have to point out that although the analysis of Comparable Connected Transactions can reflect transaction benchmark and provides a guideline for valuation, it does not include differences in industries, accounting policies and standards as well as differences in local regulations, operating environment, business model, taxation and other unique characteristics of

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Letter from china everbright

different target companies. However, we believe the following Comparable Connected Transactions analysis still provides a meaningful benchmark to assess the Considerations. The following table sets out the approximate considerations, appraised values and the premium/discount of the considerations over/to appraised values of the Comparable Connected Transactions:

				appraised value	(Discount)/
				of the	premium
Stock		Date of	consideration	target asset(s)	to/over the
code	Listed companies	agreement	(rmb million)	(rmb million)	appraised value
548	Shenzhen Expressway Company Limited	30 Jun 2009	1,156	1,168	(1.11% )
553	Nanjing Panda Electronics Company Limited	10 July 2009	2.64	2.64	0%
1171	Yanzhou Coal Mining Company Limited	24 July 2009	116.3	121.7	(4.5% )
1088	China Shenhua Energy Company Limited	31 July 2009	16.08	16.08	0%
553	Nanjing Panda Electronics Company Limited	10 August 2009	52.95	52	1.8%
2337	Shanghai Forte Land Co., Ltd.	13 August 2009	24.49	22.25	10.06%
386	China Petroleum & Chemical Corporation	21 August 2009	3,945.81	3,945.81	0%
1919	China COSCO Holdings Company Limited	27 August 2009	278.67	278.67	0%
857	PetroChina Company Limited	28 August 2009	2,813.33	2,813.33	0%
857	PetroChina Company Limited	27 – 28 August 2009	11,066.37	11,066.37	0%
811	Sichuan Xinhua Winshare Chainstore Co., Ltd.	7 September 2009	12.4	12.4	0%
1898	China Coal Energy Company Limited	10 September 2009	91.92	93.20	(1.4% )
8290	Tianjin Tianlian Public Utilities Company Limited	16 September 2009	620.74	624.9	(0.67% )
2600	Aluminum Corporation of China Limited	29 October 2009	30	30	0%
1072	Dongfang Electric Corporation Limited	13 November 2009	155.79	155.79	0%
2868	Beijing Capital Land Ltd.	20 November 2009	369.5	376.36	(1.86% )
161	CATIC Shenzhen Holdings Limited	18 November 2009	833.04	791	5.3%

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Letter from china everbright

				appraised value	(Discount)/
				of the	premium
Stock		Date of	consideration	target asset(s)	to/over the
code	Listed companies	agreement	(rmb million)	(rmb million)	appraised value
1108	Luoyang Glass Company Limited	16 December 2009	7.3	7.3	0%
857	PetroChina Company Limited	30 December 2009	1,088.06	1,088.06	0%
38	First Tractor Company Limited	29 December 2009	5	5	0%
2009	BBMG Corporation	31 December 2009	12.26	12.26	0%
2009	BBMG Corporation	15 January 2010	118.6	118.6	0%
1618	Metallurgical Corporation of China Ltd.	15 January 2010	387.39	395.06	(1.98% )
2009	BBMG Corporation	17 January 2010	1,496.39	1,496.39	0%
390	China Railway Group Limited	8 March 2010	408.64	408.64	0%
1053	Chongqing Iron & Steel Company Limited	18 March 2010	37.36	37.36	0%
1099	Sinopharm Group Co., Ltd.	23 March 2010	1,189.51	1,189.51	0%
763	ZTE Corporation	8 April 2010	152.9	152.9	0%
2880	Dalian Port (PDA) Company Limited	5 May 2010	25.72	25.72	0%
2357	AviChina Industry & Technology Company Limited	11 May 2010	908.24	908.66	0%
1138	China Shipping Development Company Limited	17 May 2010	144.46	144.46	0%
				Maximum:	10.06%
				Minimum:	(4.5% )
				Average:	0.18%
	The Acquisitions (Except for the Beijing Eco-island	Acquisition Agreement):			0%

Source: Relevant announcements published on the Stock Exchange’s website

Note: The premium/discount of the considerations over/to the appraised values is calculated by dividing the considerations by the PRC appraised values of the Comparable Connected Transactions.

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Letter from china everbright

As shown above, the premium over/(discount to) the appraised value of the Comparable Connected Transactions ranged from approximately (4.5)% to 10.06%. Given that the Considerations (except for the Beijing Eco-island Acquisition Agreement) are (i) equivalent to the appraised value of the equity interest to be acquired by the Group; and (ii) within the range of premium over/(discount to) the appraised value of the Comparable Connected Transactions, we are of the view that the Considerations are fair and reasonable to the Company and the Independent Shareholders as a whole.

(c) Possible financial effects

The following analysis is based on the audited consolidated financial statements of the Company for the year ended 31 December 2009. Upon completion of the Acquisitions (“ completion ”), the Acquired Subsidiaries will become subsidiaries of the Company and their respective financials will be consolidated into the accounts of the Group.

(i) Effects on net assets value

According to the 2009 Annual Report, the audited consolidated net assets value of the Company amounted to RMB16.48 billion as at 31 December 2009. As the Considerations of approximately RMB2.65 billion are equivalent to the appraised value of the equity interest (except for the Beijing Eco-island Acquisition Agreement) and Acquired Assets to be acquired by the Group. Therefore, we are of the view that the Acquisitions will have minimal effect on the consolidated net assets value of the Company.

(ii) Effects on earnings

Although certain companies to be acquired under the Agreements incurred net loss during the year ended 31 December 2009, As illustrated above, the financial performance and position of each of (i) Tianjin Jinzhu Concrete; (ii) Beijing Longshuncheng; (iii) Beijing Yanshan Cement; (iv) Beijing Architectural Decoration; (v) Beijing Zhongweisenhai; (vi) BBMG Dacheng; (vii) Beijing Ganlujiayuan; (viii) Beijing Yuandongjiamei; and (ix) BBMG Hongye achieved improvements in 2009. Furthermore, the income of cement factory of Beijing Pinggu and rental income generated from BBMG Landao Building also achieved stable growth in 2009.

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As advised by the Management, financial performance and position of the following loss-making companies are expected to be improved gradually:

(1) Badaling Travel
The business operation of Badaling Travel was adversely affected in 2009 as Badaling Hot Spring Resort was under large-scale decoration since 2007. As the decoration will be finished in the end of 2010, the business operation and financial performance of Badaling Travel is expected to recover gradually.
(2) Beijing Eco-island, Crane Beijing and BBMG Human Resources
- As Beijing Eco-island, Crane Beijing and BBMG Human Resources are newly established companies or commenced its business operation in 2009, the Management considers that their respective business operation and financial performance will be improved gradually.
(3) Beijing Yaxin and
Beijing Yanshan Cement
The Board intends to use the parcel of land with a site area of approximately 380,000 sq.m. owned by Beijing Yaxin for future development of BBMG modern building materials industrial park. Upon the completion of the BBMG modern building materials industrial park, the financial performance of Beijing Yaxin will be improved gradually.

Beijing Yanshan Cement has ceased its cement production in July 2008, and incurred net loss in 2008 and 2009. The Board intends to use a parcel of industrial land with a site area of approximately 320,000 sq.m. owned by Beijing Yanshan Cement for future property development. Upon the completion of the property development project(s), the financial performance of Beijing Yanshan Cement will be improved gradually.

In light of the above, and after considering the commercial benefits arising from the Acquisitions as discussed at the paragraph headed “Reasons for, and benefit of, the Acquisitions” above, the Management believes that the Acquisitions will further enhance the sustainable development of the Group’s Core Businesses and will have a long-term positive impact to the profitability of the Group.

(iii) Effects on working capital

As stated in the Letter from the Board, the Acquisitions will be financed by the Group’s internal resources.

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According to the 2009 Annual Report, the cash and cash equivalents of the Company amounted to approximately RMB5.5 billion as at 31 December 2009. Given that the cash consideration payable by the Group will be approximately RMB2.65 billion, we are of the view that the payment of cash consideration to the Vendors will not have material adverse impact on the Group’s working capital.

(D) recommendation

Based on the above principal factors and reasons, we are of the opinion that the Agreements and the transactions contemplated thereunder are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company and its shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant ordinary resolution to approve the Agreements and the transactions contemplated thereunder as detailed in the notice of EGM set out at the end of the Circular.

Yours faithfully, For and on behalf of

china everbright capital Limited alvin Kam Director

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PROPERTY VALUATION REPORT

APPENDIX I

The following is the text of a letter, summary of values and valuation certificate prepared for the purpose of incorporation in this circular received from Savills Valuation and Professional Services Limited, an independent property valuer, in connection with their opinion of values of the properties of the Acquired Subsidiaries and the Acquired Assets as at 30 April 2010.

==> picture [72 x 72] intentionally omitted <==

The Directors BBMG Corporation 36 North Third Ring East Road Dongcheng District Beijing 100013 The People’s Republic of China

Savills Valuation and Professional Services Limited 23/F Two Exchange Square Central, Hong Kong T: (852) 2801 6100 F: (852) 2530 0756

EA Licence: C-023750 savills.com

11 June 2010

Dear Sirs,

We refer to your instructions for us to value the properties (the “properties”) to be acquired by BBMG Corporation (the “Company”) and its subsidiaries (hereinafter referred to as the “Group”) in the People’s Republic of China (the “PRC”) and Hong Kong, we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for providing you with our opinion of values of the properties as at 30 April 2010 (the “Valuation Date”) for inclusion in a circular issued by the Company.

Our valuation of each of the properties is our opinion of its market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures, management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

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PROPERTY VALUATION REPORT

APPENDIX I

In valuing the properties in the PRC, unless otherwise stated, we have assumed that transferable land use rights in respect of the properties for specific terms at nominal land use fee have been granted and that all requisite land premium payable has been fully settled. We have also assumed that the owners of the properties have enforceable titles to the properties and have free and uninterrupted rights to use, occupy or assign the properties for the whole of the unexpired terms as granted.

In valuing the industrial properties in Group I which are mainly held for owner occupation in the PRC, due to the specific purpose for which the buildings of properties have been constructed, there are no readily available market comparables of the same kind of the properties and thus the buildings of these properties cannot be valued on the basis of direct comparison. They have been valued on the basis of the depreciated replacement cost (“DRC”). We would define “DRC” for these purposes to be our opinion of the land value in its existing use and an estimate of the new replacement costs of the buildings and structures, including fees and finance charges, from which deductions are then made to allow for age, physical, functional and environmental obsolescence. While in valuing the land, we have adopted the Direct Comparison Approach by making reference to the comparable market transactions as available in the relevant market assuming sales with vacant possession. For the remaining properties in Group I and the property in Group II which are held for owner occupation in Hong Kong, we have adopted the direct comparison approach by making reference to the comparable market transactions assuming sale with the benefit of vacant possession.

For the properties in Group III which are held for investment purpose in the PRC, we have made reference to the comparable market transactions as available in the market and where appropriate, on the basis of capitalization of net incomes as shown on the schedules handed to us with due allowance for reversionary income potential of the properties.

In valuing the properties in Group IV which are leased in the PRC, we have attributed no commercial value to these properties mainly due to the short-term nature, prohibitions against subletting/assignment or otherwise due to the lack of substantial profit rents.

We have not been provided with any title documents relating to the property in Hong Kong but we have caused searches to be made at the Land Registry. We have not, however, searched the original documents to verify ownership or to ascertain the existence of any amendment which does not appear on the copies handed to us. We do not accept a liability for any interpretation which we have placed on such information which is more properly the sphere of your legal advisers.

We have been provided with copies of extracts of title documents relating to the properties in the PRC. However, we have not inspected the original documents to ascertain the existence of any amendments which do not appear on the copies handed to us. We have relied to a very considerable extent on information given by the Group and its legal advisers, Guantao Law Firm, regarding the titles to the properties in the PRC.

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PROPERTY VALUATION REPORT

APPENDIX I

We have relied to a very considerable extent on information given by you and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, ownership, identification of the properties, site and floor areas and all other relevant matters. Dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us and are therefore only approximations. No on-site measurements have been made. We have had no reason to doubt the truth and accuracy of the information provided to us by you which is material to our valuation. We have also advised by you that no material facts have been omitted from the information provided.

We have inspected the exterior and where possible, the interior of the properties. During the course of our inspection, we did not note any serious defects. However, no structural survey has been made, we are therefore unable to report that the properties are free from rot, infestation or any other structural defects. No tests were carried out on any of the services.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on any property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

In valuing the properties, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by the Stock Exchange of Hong Kong Limited and Rule 11 of the Code on Takeovers and Mergers and Share Repurchase issued by the Securities and Futures Commission and the HKIS Valuation Standards on Properties (First Edition 2005) published by the Hong Kong Institute of Surveyors.

Unless otherwise stated, all money amounts stated are in Renminbi. The exchange rate adopted in our valuation is HK$1 = RMB0.8805, there has been no significant fluctuation in exchange rate between the date of valuation and the date of this letter.

Our summary of values and valuation certificate are attached.

Yours faithfully, For and on behalf of

Savills Valuation and Professional Services Limited

Charles C K Chan

MSc FRICS FHKIS MCIArb RPS(GP)

Managing Director

Note: Mr Charles C K Chan, chartered estate surveyor, MSc, FRICS, FHKIS, MCIArb, RPS(GP), has been a qualified valuer and has about 25 years’ experience in the valuation of properties in Hong Kong and has about 20 years’ experience in the valuation of properties in the PRC.

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APPENDIX I

SUMMARY OF VALUES

Group I – Properties mainly held for owner occupation in the PRC

Market value in existing state as at No. Property 30 April 2010 1. Land and a building located at No commercial value No. A3 Ganluyuan, Chaoyang District, Beijing, PRC 2. Unit No. 23-1-2 of Building No. 23 located at No commercial value District No. 1, South Lane, Ganluyuan, Chaoyang District, Beijing, PRC 3. Unit No. 502 of Block No. 1 located at RMB570,000 No. 60-1 Haifu Road, Haikou, Hainan Province, PRC 4. Land, various buildings and structures located at No commercial value No. 64 Yongdingmenwai Main Street, Chongwen District, Beijing, PRC 5. Land and a building located at No commercial value No. 42 Xisi North Main Street, Xicheng District, Beijing, PRC 6. Land, various buildings and structures located at No commercial value No. 33 Yaxin Road, Doudian Town, Fangshan District, Beijing, PRC

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No. Property

Land, various buildings and structures located at No. 29 Middle Road, Xisanqi Construction Material City, Haidian District, Beijing, PRC
Land, various buildings and structures located at New Lane No. 1 Yaxin Road, Doudian Town, Fangshan District, Beijing, PRC
Land, various buildings and structures located at No. 68 Jingyuan Road, Shijingshan District, Beijing, PRC
Land, various buildings and structures located at No. 11 Taiping East Road, Mafang Town, Pinggu District, Beijing, PRC
Land, various buildings and structures located at East of Sanlihe Village, Yanqing Town, Yanqing County, Beijing, PRC
A retail unit located at No. 1629 Baoshan Road, Tanggu District, Tianjin, PRC

Market value in existing state as at 30 April 2010

No commercial value

No commercial value No commercial value RMB225,300,000

RMB3,600,000

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APPENDIX I

No. Property 13. A retail unit located at No. 81 Suijiang Road, Hexi District, Tianjin, PRC
Retail units on Level 1 located at Nos. 116 and 117 West Lane, Huajiadi, Chaoyang District, Beijing, PRC
Various residential and retail units of Building Nos. 33 located at Zone 1, Ganluyuan South Lane, Chaoyang District, Beijing, PRC
Land and various buildings located at No. 12 South Main Street, Nankou, Changping District, Beijing, PRC
Land and various structures located at No. A1 Jiujingzhuang Road, Fengtai District, Beijing, PRC
Various office units of Dacheng Building, No. 127 Xuanwumen West Main Street, Xicheng District, Beijing, PRC

Market value in existing state as at 30 April 2010

RMB2,800,000 RMB16,500,000

No commercial value

RMB168,000,000 RMB90,500,000

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APPENDIX I

Market value in existing state as at 30 April 2010

		Market value in existing state as at
No.	Property	30 April 2010
19.	Land and various buildings located at Court No. 78,	No commercial value
	Dongsisitiao,
	Dongcheng District,
	Beijing,
	PRC
20.	Various commercial units of	RMB13,600,000
	Block Nos. A3 and A4,
	Shuanghuiyuan,
	Chaoyang District,
	Beijing,
	PRC
21.	Various commercial units of	No commercial value
	Building Nos. 8, 10, 15, 16 and 19,
	No.7 Qingta East Lane,
	Fengtai District,
	Beijing,
	PRC
22.	Land and various buildings located at	No commercial value
	No. 18 Dongtieying Shunsantiao,
	Fengtai District,
	Beijing,
	PRC
23.	A building located at	No commercial value
	No. 6 Tiyuguan West Road,
	Chongwen District,
	Beijing,
	PRC
24.	A building located at	No commercial value
	No. 826 Jinsong 8th Zone,
	Chaoyang District,
	Beijing,
	PRC
25.	Two buildings located at	No commercial value
	No. 2 Shunyuan Lane,
	Chaoyang District,
	Beijing,
	PRC

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		Market value
		in existing state as at
No.	Property	30 April 2010
26.	A building located at	No commercial value
	No. 245 Wangfujing Avenue,
	Dongcheng District,
	Beijing,
	PRC
27.	A building located at	No commercial value
	No. 72 West Avenue,
	Haidian District,
	Beijing,
	PRC
28.	A building located at	No commercial value
	No. 62 Dongsi North Avenue,
	Dongcheng District,
	Beijing,
	PRC
29.	A building located at	No commercial value
	No. 68 Dongsi North Avenue,
	Dongcheng District,
	Beijing,
	PRC
30.	Level 3 of Xisanqi Building Material Market,	No commercial value
	No. 6 Xisanqi Jiancaicheng Zhong Road,
	Haidian District,
	Beijing,
	PRC
31.	Land and various buildings and structures located	No commercial value
	at East of Xiaoying Village,
	Machikou Town,
	Changping District,
	Beijing,
	PRC
32.	Land and various buildings and structures located	No commercial value
	at East of Ming Tomb Reservoir,
	Changping District,
	Beijing,
	PRC

RMB520,870,000

Sub-total:

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APPENDIX I

Group II – Property held for owner occupation in Hong Kong

No. Property 33. Workshop Nos. 1 to 3 and 5 to 8, Good Harvest Industrial Building, No. 9 Tsun Wen Road, Tuen Mun, New Territories, Hong Kong Sub-total: Group III – Properties held for investment in the PRC No. Property 34. Landao Building, Block No. 45, Court No. 1, Anningzhuang East Road, Haidian District, Beijing, PRC 35. Jianjin Building, No. A1 Yongtaiyuan, Qinghe Town, Haidian District, Beijing, PRC 36. Four commercial units of Mudanyuan, No. 32 Huayuan East Road, Haidian District, Beijing, PRC	Market value in existing state as at 30 April 2010 RMB8,000,000
	RMB8,000,000 Market value in existing state as at 30 April 2010 No commercial value No commercial value RMB49,800,000

No.
Property
33.
Workshop Nos. 1 to 3 and 5 to 8,
Good Harvest Industrial Building,
No. 9 Tsun Wen Road,
Tuen Mun,
New Territories,
Hong Kong
Sub-total:
Group III – Properties held for investment in the PRC
No.
Property
34.
Landao Building,
Block No. 45,
Court No. 1,
Anningzhuang East Road,
Haidian District,
Beijing,
PRC
35.
Jianjin Building,
No. A1 Yongtaiyuan,
Qinghe Town,
Haidian District,
Beijing,
PRC
36.
Four commercial units of
Mudanyuan,
No. 32 Huayuan East Road,
Haidian District,
Beijing,
PRC

Market value
in existing state as at
30 April 2010
RMB8,000,000

RMB8,000,000
Market value
in existing state as at
30 April 2010
No commercial value
No commercial value
RMB49,800,000

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No. Property 37. Portion of Xisanqi Building Material Market, No. 6 Xisanqi Jiancaicheng Zhong Road, Haidian District, Beijing, PRC 38. Jinhuanyu Building, No. 15 Fengtai Road, Fengtai District, Beijing, PRC 39. Various commercial units of Building Nos. 11, 16 and 23, Zone 1, Ganluyuan South Lane, Chaoyang District, Beijing, PRC 40. Various commercial units of Building Nos. 1 and 7, Zone 1, Ganluyuan South Lane, Chaoyang District, Beijing, PRC 41. Various office units of Dacheng Building, No. 127 Xuanwumen West Main Street, Xicheng District, Beijing, PRC Sub-total:	Market value in existing state as at 30 April 2010 No commercial value No commercial value No commercial value No commercial value RMB511,700,000
	RMB561,500,000

No.
Property
37.
Portion of Xisanqi Building Material Market,
No. 6 Xisanqi Jiancaicheng Zhong Road,
Haidian District,
Beijing,
PRC
38.
Jinhuanyu Building,
No. 15 Fengtai Road,
Fengtai District,
Beijing,
PRC
39.
Various commercial units of
Building Nos. 11, 16 and 23,
Zone 1,
Ganluyuan South Lane,
Chaoyang District,
Beijing,
PRC
40.
Various commercial units of
Building Nos. 1 and 7,
Zone 1,
Ganluyuan South Lane,
Chaoyang District,
Beijing,
PRC
41.
Various office units of Dacheng Building,
No. 127 Xuanwumen West Main Street,
Xicheng District,
Beijing,
PRC
Sub-total:

Market value
in existing state as at
30 April 2010
No commercial value
No commercial value
No commercial value
No commercial value
RMB511,700,000

RMB561,500,000

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APPENDIX I

Group IV – Properties leased in the PRC

		Market value
		in existing state as at
No.	Property	30 April 2010
42.	Land and a building located at	No commercial value
	Dagang Station,
	Tianjin,
	PRC
43.	Land, various buildings and structures located at	No commercial value
	Heizhuhe Station,
	Tanggu District
	Tianjin,
	PRC
44.	Land, various buildings and structures located at	No commercial value
	Xiqing Stantion,
	Tianjin,
	PRC
45.	Land, various buildings and structures	No commercial value
	located in Construction Material Supply Company,
	Dongli District,
	Tianjin,
	PRC
46.	Land, a building and various structures	No commercial value
	located in Tiancaibeichen Station,
	Tianjin,
	PRC
47.	Land, various buildings and structures	No commercial value
	located in Jiaoban Station,
	Dongli District,
	Tianjin,
	PRC
48.	Land, various buildings and structures	No commercial value
	located in Jiaoban Station,
	Dongfeng Road,
	Hangu District,
	Tianjin,
	PRC

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No. Property 49. Land and a building located at Heizhuhe Station, Tanggu District, Tianjin, PRC 50. Land and a building located at Xiangluowan Station, Tanggu District, Tianjin, PRC 51. Various buildings located at Hangu Cement Plant, Hangu District, Tianjin, PRC 52. An office unit of an ancillary building located at Tianjin Construction Materials Company, Tianjin, PRC 53. Lands and various structures located at Wuxiongsi Village, Dasungezhuang Town, Shunyi District, Beijing, PRC 54. Lands and various structures located at Beishiqu Village, Mafang Town, Pinggu District, Beijing, PRC Sub-total: Grand total:	Market value in existing state as at 30 April 2010 No commercial value No commercial value No commercial value No commercial value No commercial value No commercial value
	Nil
	RMB1,090,370,000

No.
Property
49.
Land and a building located at
Heizhuhe Station,
Tanggu District,
Tianjin,
PRC
50.
Land and a building located at
Xiangluowan Station,
Tanggu District,
Tianjin,
PRC
51.
Various buildings located at
Hangu Cement Plant,
Hangu District,
Tianjin,
PRC
52.
An office unit of an ancillary
building located at Tianjin
Construction Materials Company,
Tianjin,
PRC
53.
Lands and various structures
located at Wuxiongsi Village,
Dasungezhuang Town,
Shunyi District,
Beijing,
PRC
54.
Lands and various structures
located at Beishiqu Village,
Mafang Town,
Pinggu District,
Beijing,
PRC
Sub-total:
Grand total:

Market value
in existing state as at
30 April 2010
No commercial value
No commercial value
No commercial value
No commercial value
No commercial value
No commercial value

Nil

RMB1,090,370,000

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APPENDIX I

VALUATION CERTIFICATE

Group I – Properties mainly held for owner-occupation purposes in the PRC

Market value in Particulars of existing state as No. Property Description and tenure occupancy at 30 April 2010 1. Land and a building The property comprises The property No commercial located at No. A3 a parcel of land with a is occupied for value Ganluyuan, site area of approximately office purpose. Chaoyang District, 1,979.47 sq.m. (21,307 sq. Beijing, ft.) on which constructed PRC with a building completed in 1992. The property comprises an office building with a gross floor area of approximately 4,166.00 sq.m. (44,843 sq. ft.). The land use rights of the property have been allocated for an unspecified term for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Chao Guo Yong (2008 Hua) Di 0233, the land use rights of a parcel of land with a site area of 1,979.47 sq.m. have been allocated to Beijing Architectural Decoration, Design and Engineering Co., Ltd. (“Beijing Architectural Decoration”) for an unspecified term for industrial use.
As the land use rights of the aforesaid parcel of land are not freely transferable, we do not attribute any commercial value to it.
Pursuant to the Building Ownership Certificate No. X Jing Fang Quan Zheng Chao Zi Di 653920, the building ownership rights with a gross floor area of approximately 4,166.00 sq.m. are vested in Beijing Architectural Decoration.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Architectural Decoration has obtained the land use rights and building ownership rights of the property; and
(ii) Beijing Architectural Decoration is in progress of applying the land grant procedure for the aforesaid land use rights.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB22,500,000.
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No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Unit No. 23-1-2 of The property comprises a Building No. 23 commercial unit on Level located at 1 of a composite building District No. 1, completed in 1999. South Lane, Ganluyuan, The gross floor area of the Chaoyang District, property is approximately Beijing, 183.76 sq.m. (1,978 sq. ft.). PRC

The property No commercial is currently value vacant.

The land use rights of the property have been allocated for an unspecified term for commercial and residential uses.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Chao Guo Yong (1999 Hua) Zi Di 00092, the land use rights of a parcel of land with a site area of 12,515.15 sq.m. have been allocated to Beijing Building Materials Group Corporation Supply Co., Ltd. (北京建築材料集團總公司供銷公司) (“Building Materials Supply”) for commercial and residential uses.

As the land use rights of the aforesaid parcel of land are not freely transferable, we do not attribute any commercial value to it.

As adviced by the Group, Building Materials Supply is a wholly-owned subsidiary of Beijing Zhongweisenhai Property Management Co., Ltd.

Pursuant to the Building Ownership Certificate No. X Jing Fang Quan Zheng Chao Zi Di 697950, the building ownership rights with a gross floor area of approximately 183.76 sq.m. are vested in Beijing Architectural Decoration.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Building Materials Supply has obtained the land use rights and building ownership rights of the property; and
(ii) Building Materials Supply is in progress of applying the land grant procedure for the aforesaid land use rights.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB3,300,000.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Unit No. 502 of Block The property comprises No. 1 located at No. a residential unit of a 60-1 Haifu Road, domestic building completed Haikou, in 1991. Hainan Province, PRC

The gross floor area of the property is approximately 104.98 sq.m. (1,130 sq. ft.).

The property RMB570,000 is currently vacant.

Notes:

Pursuant to the Building Ownership Certificate No. 996, the building ownership rights with a gross floor area of 104.98 sq.m. are vested in Beijing Architectural Decoration, Design and Engineering Co., Ltd., Hainan Branch (北京市建築裝飾設計工程有限公司海南分公司) (“Beijing Architectural Decoration Hainan Branch”).

As advised by the Group, Beijing Architectural Decoration Hainan Branch is a wholly-owned subsidiary of Beijing Architectural Decoration, Design and Engineering Co., Ltd.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Architectural Decoration Hainan Branch has obtained the building ownership rights of the property.
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No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various The property comprises buildings and a parcel of land with a structures site area of approximately located at No. 64 11,283.23 sq.m. (121,453 Yongdingmenwai sq. ft.) on which constructed Main Street, with various buildings and Chongwen District, structures completed in Beijing, between 1970 and 2009. PRC

The buildings of the property mainly include workshops, office buildings and an ancillary building and have a total gross floor area of approximately 16,042.60 sq.m. (172,683 sq. ft.).

A portion of No commercial the property value is subject to various tenancies whilst the remaining portion is occupied for industrial, office and ancillary purposes.

The land use rights of the property have been allocated for an unspecified term for industrial and transportation uses.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Chong Guo Yong (2004) Di 0294, the land use rights of a parcel of land with a site area of 11,890.75 sq.m. have been allocated to Beijing Longshuncheng Chinese Style Furniture Plant (“Beijing Longshuncheng”) for industrial and transportation uses.
As advised by the Group, the property comprises portion of the land as stated in the aforesaid Land Use Rights Certificate with a site area of approximately 11,283.23 sq.m. As the land use rights of the aforesaid parcel of land are not freely transferable, we do not attribute any commercial value to it.
Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Chong Zi Di 01179, the building ownership rights with a gross floor area of approximately 17,397.00 sq.m. are vested in Beijing Longshuncheng.
As advised by the Group, the property comprises portion of the buildings as stated in the aforesaid Building Ownership Certificate with a total gross floor area of approximately 16,042.60 sq.m..
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Longshuncheng has obtained the aforesaid Land Use Rights Certificate by the mean of allocation;
(ii) Beijing Longshuncheng is in progress of applying the cadastral survey for the aforesaid land use rights. After the cadastral survey has been completed, Beijing Longshuncheng has to apply for the land grant procedure to obtain the Land Use Beijing Certificate in granted land status; and
(iii) Beijing Longshuncheng is not allowed to transfer, lease or mortgage the aforesaid land and buildings before the land grant procedure has been completed.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB55,200,000.
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No. Property Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Land and a building The property comprises located at No. 42 Xisi a parcel of land with a North Main Street, site area of approximately Xicheng District 116.90 sq.m. (1,258 sq. Beijing, ft.) on which constructed PRC with a commercial building completed in 1994.

The property No commercial is subject to a value tenancy.

The gross floor area of the property is approximately 116.90 sq.m. (1,258 sq. ft.).

Notes:

Pursuant to the Building Ownership Certificate No. Xi Quan Zi Di 12829, the building ownership rights of the property with a gross floor area of approximately 116.90 sq.m. are vested in Beijing Chinese Style Furniture Plant (北京市中式家具廠).

As advised, Beijing Chinese Style Furniture Plant is renamed as Beijing Longshuncheng Chinese style Furniture Plant (“Beijing Longshuncheng”).

As the aforesaid land and building are not freely transferable, we do not attribute any commercial value to them.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Longshuncheng has not obtained the Land Use Rights Certificate for the property;
(ii) Beijing Longshuncheng is in progress of applying the cadastral survey for the aforesaid building ownership rights. After the cadastral survey has been completed, Beijing Longshuncheng has to apply for the land grant procedure to obtain the Land Use Rights Certificate in granted land status; and
(iii) Beijing Longshuncheng is not allowed to transfer, lease or mortgage the aforesaid land and buildings before the land grant procedure has been completed.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB650,000.
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No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various buildings and structures located at No. 33 Yaxin Road, Doudian Town, Fangshan District, Beijing, PRC

The property comprises The property No commercial a parcel of land with a is occupied value site area of approximately for industrial, 194,633.35 sq.m. (2,095,033 office and sq. ft.) on which constructed ancillary with various buildings and purposes. structures completed in between 2007 and 2009.

The buildings of the property mainly include workshops, office buildings and ancillary buildings and have a total gross floor area of approximately 22,940.23 sq.m. (246,929 sq. ft.).

Notes:

Pursuant to the Construction Land Planning Permit No. 2006 Gui Di Zi 0142, BBMG Group Company Limited (the “Parent”) is permitted to develop on a parcel of land with a site area of approximately 194,633.354 sq.m..
Pursuant to the seven Construction Works Planning Permits Nos. 2006 Gui Jian Zi 0413, 2007 Gui Jian Zi 0006, 0203, 0227 and 0388 and 2008 Gui Jian Zi 0191 and 0123, the planned construction works of portion of the property with a total gross floor area of approximately 15,022.23 sq.m. have been approved for construction.
Pursuant to the seven Construction Works Commencement Permits Nos. [2007] Shi Jian Zi 0541, 1747 and 2178, [2008] Shi Jian Zi 0230, 0312 and 1776 and [2009] Shi Jian Zi 1061, the planned construction works of portion of the property with a total gross floor area of approximately 15,022.23 sq.m. have been permitted to commence.
Pursuant to the seven Construction Completion Certificates Nos. 2009 Gui Jun Zi 0351, 0353 to 0356, 0357 and 0358, the construction works of portion of the property have been certified as completed.
Pursuant to the Transfer Agreement entered into between Beijing Yaxin Special Building Materials Co., Ltd. (“Beijing Yaxin”) and Beijing Eco-island Science and Technology Co., Ltd. (“Beijing Eco-island”) on 6 October 2008, the land use right with a total site area of 194,633.354 sq.m. comprised in the three Land Use Rights Certificates Nos. Jing Fang Guo Yong (2003) Zi Di 361, 364 and 372 have been transferred to Beijing Eco-island for disposal of hazardous waste construction material use.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Eco-island has not obtained the Land Use Rights Certificate and Building Ownership Certificate for the property;
(ii) the property has conformed to the requirements set out in the Allocated Land Content (劃歸土地目錄)；
(iii) Beijing Eco-island is in progress of applying the land allocation procedure for the aforesaid land parcel； and
(iv) Beijing Eco-island is entitled to occupy or use the property after the land use rights and building ownership rights of the property have been obtained by the mean of allocation. However, Beijing Eco-island is not allowed to transfer, lease or mortgage the land and buildings before the land grant procedure has been approved and the land premium has been paid.
Had the valid Land Use Rights Certificate in granted land status and Building Ownership Certificate being obtained, the market value of the property would be in the sum of RMB196,400,000.
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Market value in
Particulars of existing state as
No. Property Description and tenure occupancy at 30 April 2010 7. Land, various The property comprises A portion of No commercial buildings and a parcel of land with a the property value structures located at site area of approximately is subject to a No. 29 Middle Road, 52,202.61 sq.m. (561,909 tenancy whilst Xisanqi Construction sq. ft.) on which constructed the remaining Material City, with various buildings and portion is Haidian District, structures completed in occupied for Beijing, between 1996 and 2007. industrial, PRC office and The building of the property ancillary mainly include workshops, purposes. office buildings and other ancillary buildings and have a total gross floor area of approximately 17,958.04 sq.m. (193,300 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Hai Guo Yong (2004 Hua) Zi Di No. 2801, the land use rights of a parcel of land with a site area of 124,600.25 sq.m. have been allocated to Beijing Xisanqi High Tech New Beilding Material City Management and Development Co., Ltd. (北京市西三旗高新建材城經營開發公司) (“Xisangi High-Tech Building Materials”) for an unspecified term for industrial use.
As advised by the Group, the property comprises portion of the land as stated in the aforesaid Land Use Rights Certificate with a site area of approximately 52,202.60 sq.m. and is operated by Beijing Xisanqi Heat Co., Ltd. (北京西三旗熱力有限公司) (“Xisanqi Heat”). Xisanqi Heat is a wholly-owned subsidiary of Beijing Zhongweisenhai Property Management Co., Ltd.
As the land use rights of the aforesaid parcel of land are not freely transferable, we do not attribute any commercial value to it.
Pursuant to the four Construction Works Planning Permits Nos. (93) Shi Gui Jian Zi 2269, (94) Shi Gui Jian Zi 2082, (1999) Hai Gui Jian 20 Zi 0299 and 0300, the construction works with a total gross floor area of approximately 20,135.15 sq.m. have been approved for construction.
As advised by the Group, the property comprises portion of the buildings as stated in the aforesaid Construction Works Planning Permits.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land use rights of the property are included in the aforesaid Land Use Rights Certificate;
(ii) Xisanqi Heat has not applied the Building Ownership Certificate for the buildings of the property;
(iii) Xisanqi Heat has not applied the Construction Works Planning Permits for the buildings of portion of the property;
(iv) Xisanqi Heat has to transfer the aforesaid land use rights from Xisanqi High-Tech Building Materials into its own account, which can be done only after the aforesaid land use rights have been changed from allocated land status to granted land status and the Building Ownership Certificate of the buildings have been obtained; and
(v) Xisanqi Heat is in progress of applying the cadastral survey and land grant procedure for the aforesaid land parcel.
Had the valid Land Use Rights Certificate in granted land status and Building Ownership Certificate being obtained, the market value of the property would be in the sum of RMB80,300,000.
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No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various The property comprises buildings and a parcel of land with a structures located site area of approximately at New Lane No. 1 372,990.21 sq.m. (4,014,867 Yaxin Road, sq. ft.) on which constructed Doudian Town, with various buildings and Fangshan District, structures completed in Beijing, between 1964 and 2002. PRC

The property No commercial is occupied value for industrial, office and ancillary purposes.

The building of the property mainly include workshops, office buildings and other ancillary buildings and have a total gross floor area of approximately 6,698.00 sq.m. (72,097 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for industrial use.

Notes:

Pursuant to the fourteen Land Use Rights Certificate Nos. Jing Fang Guo Yong (2003) Zi Di 360 to 373, the land use rights of fourteen parcels of land with a total site area of 2,006,390.21 sq.m. have been allocated to Beijing Yaxin Special Building Materials Company (北京市亞新特種建材公司) (“Yaxin Company”) (now named Beijing Yaxin Special Building Materials Co., Ltd. (“Beijing Yaxin”)) for industrial use.
As advised by the Group, the property comprises portion of the land parcels as stated in the aforesaid Land Use Rights Certificate with a total site area of approximately 372,990.21 sq.m.

As the land use rights of the aforesaid parcel of land are not freely transferable, we do not attribute any commercial value to them.

Pursuant to the four Building Ownership Certificates No. Fang Quan Zi Di 01743 to 01755 and 01895, the building ownership rights with a total gross floor area of approximately 11,695.00 sq.m. are vested in Yaxin Company (now named Beijing Yaxin).

As advised by the Group, the property comprises portion of the buildings as stated in the aforesaid Building Ownership Certificates with a total gross floor area of approximately 6,579.00 sq.m.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Yaxin has obtained the land use rights and building ownership rights of portion of the property;
(ii) Beijing Yaxin is in progress of applying the cadastral survey for the aforesaid land parcel. After the cadastral survey has been completed, Beijing Yaxin can apply for the land grant procedure; and
(iii) Beijing Yaxin is entitled to occupy or use but is not allowed to lease, mortgage or transfer the garage with a gross floor area of 119.00 sq.m. before the relevant Building Ownership Certificate has been obtained.
Had the valid Land Use Rights Certificate in granted land status and Building Ownership Certificate for the garage being obtained, the market value of the property would be in the sum of RMB134,900,000.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various buildings and structures located at No. 68 Jingyuan Road, Shijingshan District, Beijing, PRC

The property comprises a parcel of land with a site area of approximately 319,235.85 sq.m. (3,436,255 sq. ft.) on which constructed with various buildings and structures completed in between 1964 and 2009.

The building of the property mainly include workshops, office buildings and other ancillary buildings and have a total gross floor area of approximately 21,608.31 sq.m. (232,592 sq. ft.).

A portion of No commercial the property value is occupied for industrial, office and ancillary purposes whilst the remaining portion is currently vacant.

The land use rights of the property have been allocated for an unspecified term for industrial and storage uses.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Shi Guo Yong (2007 Hua) Di 0090, the land use rights of a parcel of land with a site area of 319,235.85 sq.m. have been allocated to Beijing Yanshan Cement Factory (北京市燕山水泥廠) (“Yanshan Factory”) (now named Beijing Yanshan Cement Co., Ltd. (“Beijing Yanshan Cement”)) for industrial and storage uses.

As the land use rights of the aforesaid parcel of land are not freely transferable, we do not attribute any commercial value to it.

Pursuant to the Building Ownership Certificate No. Shi Quan Zi 00242, the building ownership rights with a gross floor area of approximately 48,673.10 sq.m. are vested in Yashan Factory (now named Beijing Yanshan Cement).
As advised by the Group, the property comprises portion of the buildings as stated in the aforesaid Building Ownership Certificate with a total gross floor area of approximately 21,608.31 sq.m.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Yanshan Cement has obtained the land use rights and building ownership rights of the property;
(ii) Beijing Yanshan Cement should apply the modification and transfer procedures for portion of the buildings as stated in the aforesaid Building Ownership Certificate which have been transferred to another party; and
(iii) Beijing Yanshan Cement is in progress of applying the cadastral survey and the land grant procedure for the aforesaid land parcel.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB377,400,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various buildings and structures located at No. 11 Taiping East Road, Mafang Town, Pinggu District, Beijing, PRC

The property comprises two parcels of land with a total site area of approximately 132,296.58 sq.m. (1,424,040 sq. ft.) on which constructed with various buildings and structures completed in between 1994 and 2004.

The property No commercial is occupied value for industrial, office and ancillary purposes.

The buildings of the property mainly include workshops, office buildings and other ancillary buildings and have a total gross floor area of approximately 18,540.01 sq.m. (199,565 sq. ft.).

The land use rights of the property have been granted for a term expiring on 3 July 2053 for industrial use.

Notes:

Pursuant to the two Land Use Rights Certificate Nos. Jing Ping Guo Yong (2008 Chu) Di 00021 and 00022, the land use rights of two parcels of land with a total site area of 132,296.58 sq.m. have been granted to Beijing Pinggu No. 2 Cement Plant Co., Ltd. (“ Beijing Pinggu”) for industrial use.
Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Ping Gu Yi Zi Di 00198, the building ownership rights with a gross floor area of 9,073.23 sq.m. are vested in Beijing Pinggu.
As advised by the Group, the property comprises portion of the buildings as stated in the aforesaid Building Ownership Certificate with a total gross floor area of approximately 4,623.39 sq.m.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Pinggu has obtained the land use rights and portion of the building ownership rights of the property;
(ii) the property is subject to a mortgage and the release of the mortgage is under progress; and
(iii) Beijing Pinggu will be entitled to transfer the aforesaid land use rights after the relevant Building Ownership Certificate for the remaining buildings has been obtained.
In the course of our valuation, we have assigned no commercial value to the property as the land use rights of the property cannot be transferred unless the relevant Building Ownership Rights Certificate of the buildings with a total gross floor area of approximately 13,916.62 sq.m. of the property has been obtained. Had the relevant Building Ownership Certificate being obtained, the market value of the property would be RMB108,200,000.
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Description and tenure

No. Property

Land, various The property comprises six buildings and parcels of land with a total structures located at site area of approximately East of Sanlihe 174,279.33 sq.m. (1,875,943 Village, sq. ft.) on which constructed Yanqing Town, with various buildings and Yanqing County, structures completed in Beijing, between 1994 and 2007. PRC

The buildings of the property mainly include office buildings, recreation facilities and other ancillary buildings and have a total gross floor area of approximately 54,852.19 sq.m. (590,429 sq. ft.).

Market value in Particulars of existing state as at occupancy 30 April 2010 The property RMB225,300,000 is occupied for office, recreational and ancillary purposes.

The land use rights of the property have been granted for various unspecified terms for tourism and training uses.

Notes:

Pursuant to the five Land Use Rights Certificate Nos. Jing Yan Guo Yong (2004 Chu) Zi Di 158 to 161 and 287, the land use rights of five parcels of land with a total site area of 160,965.33 sq.m. have been granted to Beijing Badaling Travel Co., Ltd. (北京八達嶺旅遊股份有限公司) (“Beijing Badaling”) (now named as BBMG Badaling Hot-spring Resort Co., Ltd. (“Badaling Travel”)) for tourism use.
Pursuant to the Land Use Rights Certificate No. Yan Tu Guo Yong (95) Zi Di 16, the land use rights of a parcel of land with a site area of approximately 19.97 mu (13,314.00 sq.m.) have been granted to Yanqing County Planning Association Business Training Centre (延慶縣規劃學會業務培訓中心) (“Yanqing Training Centre”) for training use.
Pursuant to the Transfer Agreement entered into between Yanqing Training Centre and Beijing Badaling (now named Badaling Travel”) on 30 April 2000, the land use rights mentioned in Note 2 have been transferred to Badaling Travel.
Pursuant to the four Building Ownership Certificate Nos. Jing Fang Quan Zheng Yan Zhong Wai Zi Di 00005, 00010, 00148 and 00149, the building ownership rights with a total gross floor area of approximately 44,644.55 sq.m. are vested in Beijing Badaling (now named as Badaling Travel).
As advised by the Group, the property comprises portion of the the buildings as stated in aforesaid Building Ownership Certificates with a total gross floor area of approximately 43,733.65 sq.m.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Badaling Travel has obtained the land use rights of the five Land Use Rights Certificates Nos. Jing Yan Guo Yang (2004 Chu) Zi Di 158 to 161 and 287. But there is an outstanding land premium of approximately RMB11,210,000;
(ii) the recorded owners of the land use rights and building ownership rights are still Beijing Badaling. Badaling Travel has not applied for any modification procedures;
(iii) BBMG Badaling should pay up the outstanding land premium and apply the modification procedures for the title documents;
(iv) since the recorded owner of the land use rights mentioned in Note 2 is still Yanqing Training Centre and its nature of land is still agricultural, Badaling Travel has to transfer the aforesaid land use rights into its own account and apply the usage modification procedure for the agricultural land;
(v) the recorded owner of the land use rights mentioned in Note 2 is different with the Building Ownership Certificates of the buildings erected thereon; and
(vi) Badaling Travel is in progress of applying the usage modification procedure for the agricultural land. After the usage modification and land grant procedures have been completed and the land use rights have been transferred into its own account, Badaling Travel will be entitled to transfer, lease or mortgage the land use rights.
In the course of our valuation, we have assigned no commercial value to the land use rights with a site area of approximately 13,314.00 sq.m. and the buildings with a total gross floor area of approximately 11,118.54 sq.m. as the valid Land Use Rights Certificates and Building Ownership Certificates for such portion of the property have not been obtained. For reference purpose, the total market value of such portion is approximately RMB38,500,000.
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APPENDIX I

No. Property Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A retail unit located The property comprises a at No. 1629 Baoshan retail unit of a composite Road, building completed in 2006. Tanggu District, Tianjin, The gross floor area of the PRC property is approximately 421.47 sq.m. (4,537 sq. ft.).

The property is RMB3,600,000 vacant

The land use rights of the property have been granted for an unspecified term.

Notes:

Pursuant to the Building Ownership Certificate No. Fang Di Zheng Tang Gu Zi Di 070192003, the building ownership rights of the property with a gross floor area of approximately 421.47 sq.m. are vested in Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (now named Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)).

As advised by the Group, Tianjin BBMG Concrete is a wholly-owned subsidiary of Tianjin Jinzhu Concrete Co., Ltd.

Pursuant to the Asset Transfer Agreement entered into between Tianjin BBMG Concrete and Tianjin Gule Commodity Concrete Development Co., Ltd. (天津市固樂商品硂發展有限公司) (“Tianjin Gule”), the property has been agreed to be transferred to Tianjin Gule.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Tianjin BBMG Concrete will be entitled to transfer the property to Tianjin Gule after the recorded owner of the aforesaid Building Ownership Certificates has been changed to Tianjin BBMG Concrete.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A retail unit The property comprises a located at retail unit of a composite No. 81 Suijiang Road, building completed in 2006. Hexi District, Tianjin, The gross floor area of the PRC

The gross floor area of the property is approximately 134.07 sq.m. (1,443 sq. ft.).

The property is RMB2,800,000 vacant

Notes:

Pursuant to the Asset Transfer Agreement entered into between Wang Tielin (王鐵林) and Tianjin Haide Runzi Construction Materials Co., Ltd. (天津海得潤滋建材有限公司) (“Tianjin Haide”), the property has been agreed to be transferred to Tianjin Haide.

As advised by the Group, Wang Tielin is the former General Manager of Tianijn Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) and Tianjin BBMG Concrete is a wholly-owned subsidiary of Tianjin Jinzhu Concrete Co., Ltd.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Tianjin BBMG Concrete has not obtained the building ownership rights of the property and is not entitled to dispose of such property; and
(ii) according to the explanation from Tianjin BBMG Concrete, Wang Tielin has agreed to use the property to pay for the raw materials and Tianjin BBMG Concrete is entitled to transfer the property to Tianjin Haide.
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APPENDIX I

Description and tenure

No. Property

Retail units on Level The property comprises two 1 located at Nos. 116 retail units on Level 1 of and 117 West Lane, two composite buildings Huajiadi, completed in 2002. Chaoyang District, Beijing, The total gross floor PRC

The total gross floor area of the property is approximately 1,486.36 sq.m. (15,999 sq. ft.).

Market value in Particulars of existing state as occupancy at 30 April 2010 The property RMB16,500,000 is occupied for retail purpose.

Notes:

Pursuant to the two Building Ownership Certificates Nos. X Jing Fang Quan Zheng Chao Zi Di 837461 and Jing Fang Quan Zheng Chao Qi 08 Zi Di 002478, the building ownership rights with a gross floor area of approximately 2,003.70 sq.m. are vested in BBMG GEM Property Development Co., Ltd. (北京金隅嘉業房地產開發有限公司) (“Beijing GEM”).

As advised by the Group, the property comprises portion of the buildings as stated in the aforesaid Building Ownership Certificates with a total gross floor area of approximately 1,486.36 sq.m. The property has been transferred to Beijing Nanhu Business Co., Ltd. (北京南湖商務有限公司) (“Nanhu Business”) and Nanhu Business is a wholly-owned subsidiary of Beijing Zhongweisenhai Property Management Co., Ltd.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing GEM is the recorded owner of the aforesaid Building Ownership Certificates and has used the property to pay off the loan to Nanhu Business;
(ii) the property is currently occupied by Nanhu Business. But the building ownership rights have not been transferred to Nanhu Business; and
(iii) Beijing GEM is entitled to transfer the property to Nanhu Business. Under the condition of mutual consent with Beijing GEM, Beijing GEM is entitled to transfer the property to other third party.
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No. Property Description and tenure
Various residential and The property comprises retail units of Building various residential units of No. 33 located at a composite building Zone 1, completed in 2002. South Lane, Ganluyuan, The gross floor area of the Chaoyang District. property is approximately Beijing, 6,105.27 sq.m. (65,717 PRC sq.ft.).

Market value in Particulars of existing state as at occupancy 30 April 2010 The property No commercial is currently value vacant.

The land use rights have been allocated for an unspecified term.

Notes:

Pursuant to the Building Ownership Certificate No. X Jing Fang Quan Zheng Chao Zi Di No. 617219, the building ownership rights with a gross floor area of approximately 9,480.15 sq.m. are vested in Beijing Furunwu Construction Materials Supply Co., Ltd. (北京富潤屋建築材料供銷有限責任公司) (“Beijing Furunwu”).
As advised by the Group, Beijing Furunwu is a wholly-owned subsidiary of Beijing Zhongweisenhai Property Management Co., Ltd.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land use rights of the property is allocation in nature and Beijing Furunwu is in progress of applying the land grant procedure for the property; and
(ii) Beijing Furunwu can use the property but cannot transfer and mortgage the property before the land use rights in granted nature lane been obtained.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB54,200,000.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as at occupancy 30 April 2010

Land and various buildings located at No. 12 South Main Street, Nankou, Changping District, Beijing, PRC
The property comprises a The property No commercial parcel of land with a site area is occupied value of approximately 74,671.35 for office, sq.m. (803,762 sq. ft.) on industrial which constructed with and ancillary various buildings completed purposes. in between 1979 and 1991.
The buildings of the property mainly include workshops, office buildings and other ancillary buildings and have a total gross floor area of approximately 15,258.70 sq.m. (164,245 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for industrial and office uses.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Chang Guo Yong (2002 Hua) Di 13-01-1589, the land use rights of a parcel of land with a site area of 124,210.06 sq.m. have been allocated to Beijing Cement Machinery Plant (北京水泥機械總廠) (“Cement Machinery Plant”) (now named as Beijing Shuiji Kemao Co., Ltd. (北京水機科貿有限公司) (“Shuiji Kemao”)) for industrial and office uses.
As the land use rights of the aforesaid parcel of land are not transferable, we do not attribute any commercial value to it.

As advised by the Group, the property comprises portion of the land of the aforesaid land use rights with a total site area of approximately 74,671.35 sq.m.

Shuiji Kemao is a wholly-owned subsidiary of BBMG Zhongweisenhai Property Management Co., Ltd.

Pursuant to the Building Ownership Certificate No. Chang Quan Zi Di 00047, the building ownership rights of portion of the property with a gross floor area of approximately 50,438.40 sq.m. are vested in Cement Machinery Plant (now named as Shuiji Kemao).
As advised by the Group, the property comprises portion of the buildings of the aforesaid Building Ownership Certificate with a total gross floor area of approximately 13,098.70 sq.m.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Shuiji Kemao has obtained the land use rights and building ownership rights portion of the property;
(ii) the recorded owners of the aforesaid Land Use Rights Certificate and Building Ownership Certificate are still Beijing Cement Plant. Shuiji Kemao should apply the modification procedures for the aforesaid title documents;
(iii) Shuiji Kemao is entitled to occupy or use but is not allowed to lease, mortgage or transfer the workshop with a gross floor area of 2,160.00 sq.m. before the relevant Building Ownership Certificate has been obtained; and
(iv) Shuiji Kemao is in progress of applying the cadastral survey and the land grant procedure for the aforesaid land parcel.
Had the Group obtained the valid Land Use Rights Certificate in granted land status and the Building Ownership Certificate of the remaining portion of the property with a gross floor area of 2,160.00 sq.m., the market value of the property would be in the sum of RMB39,700,000.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as at occupancy 30 April 2010

Land and various The property comprises a structures located at parcel of land with a site area No. A1 Jiujingzhuang of approximately 162,793.88 Road, sq.m. (1,752,313 sq. ft.) on Fengtai District, which various structures were Beijing, erected in between 1989 and PRC 2005.
The property RMB168,000,000 is occupied for industrial
purpose.

The land use rights of the property have been granted for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Feng Guo Yong (2009 Chu) Di 00376, the land use rights of a parcel of land with a site area of 162,793.88 sq.m. have been granted to Beijing Auckland Construction Waterproof Materials Co., Ltd. (北京奧克蘭建築防水材料有限公司) (“Auckland Waterproof”) for industrial use.

As advised by the Group, Auckland Waterproof is a wholly owned subsidiary of BBMG Zhongweisenhai Property Management Co., Ltd.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Auckland Waterproof has obtained the land use rights of the property.
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APPENDIX I

Market value in
Particulars of existing state as at
No. Property Description and tenure occupancy 30 April 2010 18. Various office units of The development comprises a The property RMB90,500,000 Dacheng Building, parcel of land with a site area is occupied No. 127 Xuanwumen of approximately 1,732.13 for office and West Main Street, sq.m. (18,645 sq. ft.) on ancillary uses. Xicheng District, which constructed with a 23Beijing, storey commercial building PRC plus a 3-level basement completed in 2002.

The property has a total gross floor area of approximately 9,819.91 sq.m. (105,702 sq. ft.).

The land use rights of the property have been granted for a term expiring on 14 July 2052 for composite use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Xi Guo Yong (2003 Chu) Zi Di 20017, the land use rights of a parcel of land with a site area of 1,732.13 sq.m. have been granted to Beijing Dacheng Development Group Co., Ltd. (北京大成開發集團有限公司) (“Beijing Dacheng”) (now named as BBMG Dacheng Development Co., Ltd. (北京金隅大成開發有限公司) (“BBMG Dacheng Development”) for a term expiring on 14 July 2052 for composite use.
Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Xi Gu Zi Di 157604, the building ownership rights with a gross floor area of approximately 42,753.65 sq.m. are vested in Beijing Dacheng (now named BBMG Dacheng Development).

As advised by the Company, the property comprises portion of the buildings of the aforesaid Building Ownership Certificate with a gross floor area of approximately 9,819.91 sq.m.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Dacheng has obtained the property by the mean of land grant agreement;
(ii) the property has been transferred to BBMG Group Company Limited (the “Parent”) without any considerations but the relevant transfer procedure has not been applied. The Parent should transfer the aforesaid Land Use Rights Certificate and Building Ownership Certificates into its own account;
(iii) the recorded owner of the aforesaid Land Use Rights Certificate and Building Ownership Certificate is still Beijing Dacheng. BBMG Dacheng Dvelopment should apply the modification procedure for the aforesaid title documents before the property can be transferred. As advised by BBMG Dacheng Development, BBMG Dacheng Development is in progress of applying the modification procedure;
(iv) BBMG Dacheng Development will be entitled to apply the transfer procedure for the property after the modification procedure has been completed and the mortgage has been discharged; and
(v) the property is subject to a mortgage. BBMG Dacheng Development is entitled to occupy, use or derive profit from but is not allowed to freely transfer, mortgage or dispose of the property unless the consent from the mortgagee has been obtained.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as at occupancy 30 April 2010

Land and various The property comprises a buildings located at parcel of land with a site area Court No. 78, of approximately 1,130.00 Dongsisitiao, sq.m. (12,163 sq. ft.) on Dongcheng District, which constructed with six Beijing, single to 2-storey buildings PRC completed in 1978.

The property is No commercial owner-occupied value for dormitory purposes.

The buildings of the property mainly include dormitory buildings with a total gross floor area of approximately 1,408.45 sq.m. (15,161 sq. ft.).

Notes:

Pursuant to the valuation report issued by Beijing Shoujia Real Estate Appraisal Co., Ltd. (北京首佳房地產評估有限公司), the site area and the gross floor area of the property are approximately 1,130.00 sq.m. and 1,408.45 sq.m. respectively.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Industrial Cement Company (北京水泥工業公司) (“Bejing Industrial Cement”) and Beijing Dongcheng District Housing Administrative Bureau have agreed to exchange two parcels of land and Beijing Industrial Cement will get a parcel of land situated at No. 78 Dongsisitiao, Dongcheng District. However, Beijing Industrial Cement has not yet completed the procedure to acquire the land use right of the said parcel of land. As advised by BBMG Group Company Limited (the “Parent”), Beijing Industrial Cement has been reorganized and became a department of the Parent;
(ii) the Parent is in progress of applying for the relevant land use rights and building ownership rights of the property from the relevant authorities; and
(iii) the Parent can use the buildings and land of the property but cannot transfer or mortgage the property before the relevant Building Ownership Certificate and Land Use Rights Certificate have been obtained.
Had the valid Land Use Rights Certificate and Building Ownership Certificate being obtained, the market value of the property would be in the sum of RMB12,600,000.
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APPENDIX I

Description and tenure

No. Property

Various commercial The property comprises units of Building various commercial units on Nos. A3 and A4, Levels 1 and 2 of two 2- Shuanghuiyuan, storey commercial buildings Chaoyang District, completed in 2005. Beijing, PRC The property has a total gross floor area of approximately 2,087.68 sq.m. (22,472 sq. ft.).
Market value in
Particulars of existing state as at occupancy 30 April 2010 The property RMB13,600,000 is occupied for commercial purpose.

The land use rights of the property have been granted for a term expiring on 27 April 2043 for commercial ancillary use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Chao Guo Yong (2010 Chu) Di 00201, the land use rights of a parcel of land with a site area of 1,484.67 sq.m. have been granted to Beijing Zhongweisenhai Property Management Co., Ltd. (“Beijing Zhongweisenhai”) for a term expiring on 27 April 2043 for commercial ancillary use.
Pursuant to ten Building Ownership Certificates Nos. X Jing Fang Quan Zheng Chao Zi Di 748325, 748694, 748698, 748704, 748708, 748710, 748722, 748725, 748732 and 749924, the building ownership rights of the property with a total gross floor area of approximately 2,087.68 sq.m. are vested in Beijing Zhongweisenhai.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Zhongweisenhai is in progress of unifying the application of Land Use Rights Certificate for the aforesaid buildings.
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APPENDIX I

No. Property Description and tenure

Market value in Particulars of existing state as at occupancy 30 April 2010

Various commercial The property comprises units of Building Nos. various commercial units 8, 10, 15, 16 and 19, on Level 1 of five 6 to 22No.7 Qingta East Lane, storey commercial buildings Fengtai District, completed in between 1995 Beijing, and 2007. PRC

The property No commercial is occupied for value commercial use.

The property has a total gross floor area of approximately 4,869.20 sq.m. (52,412 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for office use.

Notes:

Pursuant to the Land Use Rights Certificate No. Feng Guo Yong (2003) Zi Di No.001733, the land use rights of a parcel of land with a site area of 3,234.95 sq.m. have been allocated to Bejing Marble Plant (北京市大理石廠) for an unspecified term for office use.
As advised by the Group, the aforesaid Land Use Rights Certificate have been transferred to Beijing Zhongweisenhai Property Management Co., Ltd. (“Beijing Zhongweisenhai”).
Pursuant to the Two Building Ownership Certificates Nos. X Jing Fang Quan Zheng Feng Gu Zi Di 026183 and 026184, the building ownership rights of the property with a total gross floor area of approximately 2,447.20 sq.m. are vested in Beijing Jinshi Huaxin Stone Business Co., Ltd. (北京京石華信石業有限公司) (“Jinshi Huaxin”).

As advised by the Group, the aforesaid Building Ownership Certificate has been transferred to Beijing Zhongweisenhai.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Zhongweisanhai has obtained the building ownership rights of the property. However, Beijing Zhongweisanhai should apply the modification procedure for the aforesaid Building Ownership Certificate;
(ii) Beijing Zhongweisenhai is in progress of applying the land grant and name changing procedures for the aforesaid Land Use Rights Certificate and Building Ownership Certificate; and
(iii) Beijing Zhongweisenhai is entitled to occupy or use but is not allowed to lease, mortgage or transfer the buildings having no Building Ownership Certificate.
Had the valid Land Use Rights Certificate in granted land status and Building Ownership Certificate being obtained, the market value of the property would be in the sum of RMB27,600,000.
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APPENDIX I

No. Property

Description and tenure

  - **Market value in**

  - **Particulars of existing state as at occupancy 30 April 2010**

Land and various The property comprises a The property No commercial buildings located at parcel of land with a site area is occupied value No. 18 Dongtieying of approximately 8,426.42 for industrial, Shunsantiao, sq.m. (90,702 sq. ft.) on office and Fengtai District, which constructed with nine ancillary Beijing, single to 4-storey buildings purposes. PRC completed in between 1979 and 2008.
The buildings of the property mainly include workshops office buildings and other ancillary buildings with a total gross floor area of approximately 12,247.79 sq.m. (131,835 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Feng Guo Yong (2002) Zi Di No.001432, the land use rights of a parcel of land with a site area of 8,426.42 sq.m. have been allocated to Beijing Woodworking Machinery Plant (北京木工機械廠) (“Woodworking Machinery”) for an unspecified term for industrial use.
As advised by the Group, the aforesaid Land Use Rights Certificate have been transferred to Beijing Zhongweisenhai Property Management Co., Ltd. (“Beijing Zhongweisenhai”).
Pursuant to two Building Ownership Certificates Nos. Feng Quan Zi Di 02128 and 07820, the building ownership rights with a gross floor area of 41,121.60 sq.m. are vested in Woodworking Machinery and Beijing Jinshi Huaxin Stone Business Co., Ltd. (北京京石華信石業有限公司) (“Jinshi Huaxin”).
As advised by the Group, the property comprises portion of the aforesaid Building Ownership Certificates with a total gross floor area of approximately 12,247.79 sq.m. and these Certificates have been transferred to Beijing Zhongweisenhai.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Zhongweisanhai has obtained the building ownership rights of the property. However, Beijing Zhongweisanhai should apply the modification procedure for the aforesaid Building Ownership Certificate;
(ii) Beijing Zhongweisenhai is in progress of applying the land grant procedure for the aforesaid Land Use Rights Certificate; and
(iii) Beijing Zhongweisenhai is entitled to occupy or use but is not allowed to lease, mortgage or transfer the buildings having no Building Ownership Certificate.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB25,200,000.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A building located at The property comprises a No. 6 Tiyuguan West parcel of land with a site Road, area of approximately 620.87 Chongwen District, sq.m. (6,683 sq. ft.) on Beijing, which constructed with a 3- PRC storey commercial building completed in 1997.

The property No commercial is occupied for value commercial purpose.

The property has a gross floor area of approximately 1,529.90 sq.m. (16,468 sq. ft.).

Notes:

Pursuant to the Building Ownership Certificate No. Chong Quan Zi Di 12301, the building ownership rights with a gross floor area of 1,529.90 sq.m. are vested in Beijing Furniture Co., Ltd (“Beijing Furniture”).
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture has obtained the Building Ownership Certificate for the property.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB9,100,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A building located at The property comprises a No. 826 Jinsong 8th parcel of land with a site Zone, area of approximately 679.58 Chaoyang District, sq.m. (7,315 sq. ft.) on which Beijing, constructed with a singlePRC storey commercial building completed in 1983.

The property No commercial is occupied for value commercial use.

The property has a gross floor area of approximately 529.60 sq.m. (5,701 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for commercial and finance uses.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Chao Guo Yong (2009 Hua) Zi Di No. 0424, the land use rights of a parcel of land with a site area of 679.58 sq.m. have been allocated to Beijing Furniture Co., Ltd. (“Beijing Furniture”) for an unspecified term for commercial and finance uses.
Pursuant to the Building Ownership Certificate No. Chong Quan Zi Di 00014, the building ownership rights with a gross floor area of 529.60 sq.m. are vested in Beijing Furniture.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture has obtained the land use rights of the property and is in progress of applying the land grant procedure for such Land Use Rights Certificate.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB4,200,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Two buildings The property comprises two located at parcels of land with a total No. 2 Shunyuan Lane, site area of approximately Chaoyang District, 650.60 sq.m. (7,003 sq. ft.) Beijing, on which constructed with PRC two single-storey commercial building completed in 1990.

The property No commercial is occupied for value commercial use.

The property has a total gross floor area of approximately 595.40 sq.m. (6,409 sq. ft.).

Notes:

Pursuant to two Building Ownership Certificates Nos. Chong Quan Zi Di 12578 and 12579, the building ownership rights of two buildings with a total gross floor area of 595.40 sq.m. are vested in Beijing Furniture Co., Ltd. (“Beijing Furniture”).
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture is in progress of applying the cadastral survey and land grant procedure for the aforesaid Land Use Rights Certificate.
Had the valid Land Use Rights Certificates being obtained, the market value of the property would be in the sum of RMB6,000,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A building located at The property comprises No. 245 Wangfujing a parcel of land with a Avenue, site area of approximately Dongcheng District, 63.20 sq.m. (680 sq. ft.) on Beijing, which constructed with a 3- PRC storey commercial building completed in 1981.

The property No commercial is occupied for value commercial use.

The property has a total gross floor area of approximately 686.90 sq.m. (7,394 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for commercial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Dong Quan Guo Yong (98) Zi Di No. 00453, the land use rights of a parcel of land with a site area of 63.20 sq.m. have been allocated to Beijing Furniture Co., Ltd. (“Beijing Furniture”) for an unspecified term for commercial use.
Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Dong Gou Zi Di 00038, the building ownership rights with a gross floor area of 686.90 sq.m. are vested in Beijing Furniture.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture has obtained the Land Use Rights Certificate and Building Ownership Certificate for the property.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB8,900,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A building located at The property comprises a No. 72 West Avenue, parcel of land with a site Haidian District, area of approximately 180.00 Beijing, sq.m. (1,938 sq. ft.) on PRC which constructed with a 2- storey commercial building completed in 1981.
The property No commercial is occupied for value commercial use.

The property has a total gross floor area of approximately 389.40 sq.m. (4,192 sq. ft.).

Notes:

Pursuant to the Building Ownership Certificate No. Hai Quan Zi Di 04080, the building ownership rights with a gross floor area of 389.40 sq.m. are vested in Beijing Furniture Co., Ltd. (“Beijing Furniture”).
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture has obtained the Building Ownership Certificate for the property.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB2,800,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A building located at The property comprises No. 62 Dongsi North a parcel of land with a Avenue, site area of approximately Dongcheng District, 176.20 sq.m. (1,897 sq. Beijing, ft.) on which constructed PRC with a commercial building completed in 1990’s.

The property No commercial is occupied for value commercial use.

The property has a total gross floor area of approximately 194.90 sq.m. (2,098 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for commercial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Dong Quan Guo Yong (97) Zi Di No. 00261, the land use rights of a parcel of land with a site area of 176.20 sq.m. have been allocated to Beijing Furniture Co., Ltd. (“Beijing Furniture”) for an unspecified term for commercial use.
Pursuant to the Building Ownership Certificate No. Dong Quan Zi Di 13566, the building ownership rights with a gross floor area of 194.90 sq.m. are vested in Beijing Furniture.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture has obtained the land use rights of the property and is in progress of applying the land grant procedure for such Land Use Rights Certificate.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB2,500,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

A building located at The property comprises No. 68 Dongsi North a parcel of land with a Avenue, site area of approximately Dongcheng District, 102.90 sq.m. (1,108 sq. Beijing, ft.) on which constructed PRC with a commercial building completed in 1990’s.

The property No commercial is occupied for value commercial use.

The property has a total gross floor area of approximately 91.20 sq.m. (982 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for commercial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Dong Quan Guo Yong (97) Zi Di No. 00260, the land use rights of a parcel of land with a site area of 102.90 sq.m. have been allocated to Beijing Furniture Co., Ltd. (“Beijing Furniture”) for an unspecified term for commercial use.
Pursuant to the Building Ownership Certificate No. Dong Quan Zi Di 13565, the building ownership rights with a gross floor area of 91.20 sq.m. are vested in Beijing Furniture.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture has obtained the land use rights of the property and is in progress of applying the land grant procedure for such Land Use Rights Certificate.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB1,200,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Level 3 of Xisanqi Xisanqi Building Material Building Material Market comprises a parcel Market, of land with a site area of No.6 Xisanqi approximately 31,993.46 Jiancaicheng Zhong sq.m. (344,378 sq. ft.) on Road, which constructed with a 3- Haidian District, storey commercial building Beijing, plus a single level basement PRC completed in 1997.

The property No commercial is occupied for value commercial use.

The property comprises Level 3 of the development with a gross floor area of approximately 1,271.65 sq.m. (13,688 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Hai Guo Yong (2004 Huai) Zi Di No. 3025, the land use rights of a parcel of land with a site area of 41,484.01 sq.m. have been allocated to Beijing Furniture Co., Ltd. (“Beijing Furniture”) for an unspecified term for industrial use.

As advised by the Group, the development comprises portion of the land parcel as stated in the aforesaid Land Use Rights Certificate with a site area of approximately 31,993.46 sq.m.

Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Hai Guo Zi Di 00776, the building ownership rights with a gross floor area of 14,156.22 sq.m. are vested in Beijing Furniture.

As advised by the Group, the property comprises portion of the building as stipulated in the aforesaid Building Ownership Certificate with a gross floor area of approximately 1,271.65 sq.m.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land use rights of the property is allocation in nature and the application for grant of land use rights is in progress; and
(ii) the district of the property has been zoned as commercial use by the relevant planning department in Beijing. Beijing Furniture should change the usage of the aforesaid land use rights from industrial to commercial when applying for the land grant procedure.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB7,600,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Land and various The property comprises buildings and a parcel of land with a structures located site area of approximately at East of Xiaoying 497,965.25 sq.m. (5,360,098 Village, sq.ft.) on which constructed Machikou Town, with various buildings and Changping District, structures completed in Beijing, between 1981 and 2004. PRC

The property No commercial is occupied for value industrial, office and ancillary purposes.

The buildings of the property mainly include workshops, office buildings and ancillary buildings and have a total gross floor area of approximately 54,321.88 sq.m. (584,721 sq ft).

The land use rights of the property have been authorized for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Chang Guo Yong (2008 Shou) Zi Di 012, the land use rights of a parcel of land with a site area of 497,965.251 sq.m. have been authorized to BBMG Group Company Limited (“Parent”).
As advised by the Group, the aforesaid land use rights are currently operated by Beijing Cement Plant Co., Ltd. (“Beijing Cement Plant”)
As the land use rights of the aforesaid parcel of land are not transferable, we do not attribute any commercial value to it.
Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Chang Guo Zi Di 30185, the building ownership rights of the property with a gross floor area of approximately 84,696.62 sq.m. are vested in Beijing Cement Factory (北京市水泥廠) (now named Beijing Cement Plant).

As advised by the Group, the property comprises portion of the aforesaid Building Ownership Certificate with a total gross floor area of approximately 31,366.88 sq m.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the Parent has obtained the land use rights of the property by the mean of authorization;
(ii) the Parent has transferred the aforesaid land use rights to Beijing Cement Plant by the mean of investment;
(iii) Beijing Cement Plant is in progress of applying the relevant Land Use Rights Certificate for the aforesaid land use rights; and
(iv) the recorded owner of the aforesaid Building Ownership Certificate is still Beijing Cement Factory and Beijing Cement Plant has not applied for its modification procedure.
Had the Group obtained the valid Land Use Rights Certificate in granted land status and the Building Ownership Certificate, the market value of the property would be in the sum of RMB204,900,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in
Particulars of existing state as occupancy at 30 April 2010
Land and various The property comprises four buildings and parcels of land with a total structures located at site area of approximately East of Ming Tomb 3,883,433.28 sq.m. Reservoir, (41,801,276 sq.ft.) on which Changping District, constructed with various Beijing, buildings and structures PRC completed in between 1983 and 2009.
The property No commercial is occupied by value the owner for industrial, office and ancillary purposes.

The buildings of the property mainly include workshops, office buildings and ancillary buildings and have a total gross floor area of approximately 2,456.00 sq.m. (26,436 sq.ft).

The land use rights of the property have been authorized for industrial use.

Notes:

Pursuant to the four Land Use Rights Certificate Nos. Jing Chang Guo Yong (2000 Shou) Zi Di 05-14-1108, 05-15-1107, 10-17-1105 and 19-11-1106, the land use rights of four parcels of land with a total site area of 3,883,433.28 sq m have been authorized to Beijing Building Materials Group Co., Ltd. (北京建築材料集團有限責任公司) (now named BBMG Group Company Limited (“Parent”)).

As advised by the Group, the aforesaid land use rights are currently operated by Beijing Cement Plant Co., Ltd. (“Beijing Cement Plant”)

As the land use rights of the said parcel of land are not transferable, we do not attribute any commercial value to them.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the Parent has obtained the land use rights of the property by the mean of authorization;
(ii) the Parent has transferred the aforesaid land use rights to Beijing Cement Plant by the mean of investment; and
(iii) Beijing Cement Plant is in progress of applying the relevant Land Use Rights Certificate for the aforesaid land use rights.
Had the Group obtained the valid Land Use Rights Certificate in granted land status and Building Ownership Certificate, the market value of the property would be in the sum of RMB633,700,000.
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PROPERTY VALUATION REPORT

APPENDIX I

Group II – Property held for owner-occupation in Hong Kong

Particulars of No. Property Description and tenure occupancy 33. Workshop Nos. 1 to 3 The property comprises seven The property and 5 to 8, workshop units of a 15-storey is occupied for Good Harvest industrial building completed industrial use. Industrial Building, in 1988. No. 9 Tsun Wen Road, Tuen Mun, The gross floor area of the New Territories, property is approximately Hong Kong 15,001 sq. ft. (1,393.63 sq.m.). 619/14331st share of and in Tuen Mun Town The property is held under Lot No. 232 New Grant No. 2534 for a term originally expired on 30 June 1997 and has been extended to 30 June 2047 by New Territories Leases (Extension) Ordinance. The annual government rent is equivalent to 3% of the rateable value for the time being of the property.

Market value in existing state as at 30 April 2010

RMB8,000,000

Notes:

The registered owner is BBMG Hong Kong Limited.
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PROPERTY VALUATION REPORT

APPENDIX I

Group III – Properties held for investment in the PRC

Market value in Particulars of existing state as No. Property Description and tenure occupancy at 30 April 2010 34. Landao Building, The property comprises The property is No commercial Block No. 45, a parcel of land with a subject to two value Court No. 1, site area of approximately tenancies with Anningzhuang East 5,000.00 sq.m. (53,820 sq. the latest term Road, ft.) on which constructed due to expiry in Haidian District, with a commercial building 2022 at a total PRC plus a single level basement monthly rental completed in 2007. of approximately RMB389,000. The property has a total gross floor area of approximately 16,930.15 sq.m. (182,236 sq. ft.).

The land use rights of the property have been authorized for a term expiring on 6 June 2050 for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Hai Guo Yong (2007 Shou) Di No. 4280, the land use rights of a parcel of land with a site area of 130,380.53 sq.m. have been authorized to BBMG Corporation (the “Company”) for a term expiring on 6 June 2050 for industrial use.
As advised by the Group, the property comprises portion of the aforesaid Land Use Rights Certificate with a site area of approximately 5,000.00 sq.m.
Pursuant to the Building Ownership Certificate No. X Jing Fang Quan Zheng Hai Zi Di 143645, the building ownership rights of the property with a gross floor area of 16,930.15 sq.m. are vested in the Company.
Pursuant to the Asset Transfer Agreement of Landao Jinyu Department Building entered into between BBMG Corporation, Beijing China Factory Co., Ltd. and BBMG Group Company Limited on 25 February 2009, BBMG Corporation will transfer the land use rights and building ownership rights of the property to BBMG Group Company Limited (the “Parent”). The Parent has already paid the consideration to the Company.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) according to the Asset Transfer Agreement as stated in note (3), the Company will process the transfer procedure of the property to the Parent but the relevant Land Use Rights Certificate and Building Ownership Certificate of the property are still held by the Company;
(ii) according to the relevant regulations, the land use rights of land held under the nature of authorized for operation and the buildings erected upon such kind of land should not be transferred, unless approval is acquired from relevant authorities. After acquired the approval from Beijing State Land Bureau, the Company can transfer the land of the property to the Parent;
(iii) as the current uses of the property is not complied with the authorized use of the land, as the Company is the existing land owner of the land, the Company may subject to a fine; and
(iv) the Company is applying to the relevant authorities for the change of the land use rights of the property to granted land and the change of the use of land from industrial to commercial uses.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB113,300,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Jianjin Building, No. A1 Yongtaiyuan, Qinghe Town, Haidian District, Beijing, PRC
The property comprises a parcel of land with a site area of approximately 10,804.62 sq.m. (116,301 sq. ft.) on which constructed with a 6- storey commercial building plus a single level basement completed in 2000.

The property is No commercial subject to various value tenancies with the latest term due to expiry in 2022 at a total monthly rental of approximately RMB544,000.

The property has a total gross floor area of approximately 17,057.48 sq.m. (183,607 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for industrial, office and residential uses.

Notes:

Pursuant to the Land Use Rights Certificate No. Hai Dian Qu Guo Yong (1998) Zi Di No. 0663, the land use rights of a parcel of land with a site area of 125,694.32 sq.m. have been allocated to Beijing Construction Ironmongery Decoration Material Industrial Co., Ltd. (北京市建築五金裝飾材料工業公司) (“Beijing Ironmongery”) for an unspecified term for industrial, office and residential uses.

As advised by the Group, the property comprises portion of the land as stated in the said Land Use Rights Certificate with a site area of approximately 10,804.62 sq.m. Beijing Ironmongery is a wholly-owned subsidiary of BBMG Hongye Ecological Science and Technology Co., Ltd.

Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Hai Guo Zi Di 0110274, the building ownership rights of the property with a gross floor area of 17,057.48 sq.m. are vested in Beijing Ironmongery.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land use rights of the property is allocation in nature and the application for grant of the land use rights is in progress; and
(ii) Beijing Ironmongery has obtained the land use rights and building ownership rights of the property.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB117,300,000.
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APPENDIX I

Market value in Particulars of existing state as at No. Property Description and tenure occupancy 30 April 2010 36. Four commercial units The property comprises four Portion of RMB49,800,000 of Mudanyuan, commercial units on Level 1 the property No.32 Huayuan East of 15-storey residential and with a total Road, commercial building plus a gross floor of Haidian District, two-level basement completed approximately Beijing, in 2007. 367.52 sq.m. is PRC subject to two The property has a total gross tenancies with floor area of approximately the latest term 1,566.25 sq.m. (16,859 sq. due to expiry ft.). in 2014 at a total monthly rental of approximately RMB69,000 whilst the remaining portion of the property is owner occupied.

Notes:

Pursuant to four Building Ownership Certificates Nos. X Jing Fang Quan Zheng Hai Zi Di 065470, 065599, 066016 and 066520, the building ownership rights of the property with a total gross floor area of 1,566.25 sq.m. have been vested in Beijing Furniture Co., Ltd (“Beijing Furniture”).
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Furniture has obtained the building ownership rights of the property but the relevant land use rights of the aforesaid buildings are still under the name of the developer of the property and Beijing Ironmongery is in progress of applying the valid Land Use Rights Certificate.
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APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Portion of Xisanqi Xisanqi Building Material Building Material Market comprises a parcel Market, of land with a site area of No.6 Xisanqi approximately 31,993.46 Jiancaicheng Zhong sq.m. (344,378 sq. ft.) on Road, which constructed with a 3- Haidian District, storey commercial building Beijing, plus a single level basement PRC completed in 1997.

The property No commercial is subject to a value tenancy with a term due to expiry in 2021 at a total monthly rental of approximately RMB258,000.

The property comprises the basement, Levels 1 and 2 of the development with a total gross floor area of approximately 12,884.57 sq.m. (138,690 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for industrial use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Hai Guo Yong (2004 Hua) Zi Di No. 3025, the land use rights of a parcel of land with a site area of 41,484.01 sq.m. have been allocated to Beijing Furniture Co., Ltd. (“Beijing Furniture”) for an unspecified term for industrial use.

As advised by the Group, the development comprises portion of the land as stipulated in the aforesaid Land Use Rights Certificate with a site area of approximately 31,993.46 sq.m.

Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Hai Guo Zi Di 00776, the building ownership rights of the development with a gross floor area of 14,156.22 sq.m. is vested in Beijing Furniture.
As advised by the Group, the property comprises portion of the building as stipulated in the aforesaid Building Ownership Certificate with a gross floor area of approximately 12,884.57 sq.m.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land use rights of the property is allocation in nature and the application for grant of land use rights is in progress; and
(ii) the district of the property has been zoned as commercial use by the relevant planning department in Beijing. Beijing Furniture should change the usage of the aforesaid land use rights from industrial to commercial when applying for the land grant procedure.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB113,400,000.
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PROPERTY VALUATION REPORT

APPENDIX I

No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Jinhuanyu Building, The property comprises a The property No commercial No.15 Fengtai Road, parcel of land with a site area is subject to a value Fengtai District, of approximately 20,000.00 tenancy with Beijing, sq.m. (215,280 sq. ft.) on a term due PRC which constructed with a 4- to expiry in storey commercial building 2017 at a total plus a single level basement monthly rental completed in 1997. of approximately RMB455,000.

The property has a total gross floor area of approximately 14,150.00 sq.m. (152,311 sq. ft.).

The land use rights of the property have been allocated for an unspecified term for residential and commercial uses.

Notes:

Pursuant to the Land Use Rights Certificate No. Feng Guo Yong (98) Zi Di 000681, the land use rights of a parcel of land with a site area of 44,767.20 sq.m. have been allocated to Beijing Construction Materials Trading BBMG Group Co., Ltd. (北京建築材料經貿金隅集團總公司) (“Construction Materials Trading”) for an unspecified term for residential and commercial uses.
As advised by the Group, the property comprises portion of lang as stipulated in the aforesaid Land Use Rights Certificate with a site area of approximately 20,000.00 sq.m. Construction Materials Trading is a wholly-owned subsidiary of BBMG Hongye Ecological Science and Technology Co., Ltd.
Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Feng Guo Zi Di 04253, the building ownership rights of various buildings with a total gross floor area of 23,843.70 sq.m. is vested in Construction Materials Trading.
As advised by the Group, the property comprises a building as stated in the said Building Ownership Certificate with a total gross floor area of approximately 14,150.00 sq.m.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land use rights of the property is allocation in nature and the application for grant of the land use rights is in progress; and
(ii) Construction Materials Trading has obtained the land use rights and building ownership of the property.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB113,100,000.
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No. Property

Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Various commercial The property comprises units of Building various commercial units Nos. 11, 16 and 23, on the Levels 1 and 2 of a Zone 1, 2-storey, a 6-storey and a Ganluyuan South Lane, 16-storey residential and Chaoyang District, commercial building all Beijing, completed in 1996. PRC

The property comprises The property is No commercial various commercial units subject to various value on the Levels 1 and 2 of a tenancies with 2-storey, a 6-storey and a the latest term 16-storey residential and due to expiry in commercial building all 2017 at a total completed in 1996. monthly rental of approximately The property has a total gross RMB260,000. floor area of approximately 2,525.26 sq.m. (27,182 sq. ft.).

Notes:

Pursuant to the Building Ownership Certificate No. X Jing Fang Quan Zheng Chao Zi Di 617210, the building ownership rights with a gross floor area of 288.16 sq.m. are vested in Beijing Furunwu Construction Materials Supply Co., Ltd. (北京富潤屋建築材料供銷有限責任公司) (“Furunwu Construction”).
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land use rights of the property is allocation in nature and the application for grant of the land use rights is in progress; and
(ii) Furunwu Construction has obtained the land use rights and building ownership of portion of the property.
Had the valid Land Use Rights Certificate in granted land status being obtained, the market value of the property would be in the sum of RMB46,680,000.
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No. Property Description and tenure

Market value in Particulars of existing state as occupancy at 30 April 2010

Various commercial The property comprises The property is No commercial units of Building various commercial units subject to various value Nos. 1 and 7, on the Levels 1 and 2 of tenancies with Zone 1, a 6-storey and a 16-storey the latest term Ganluyuan South Lane, residential and commercial due to expiry in Chaoyang District, building all completed in 2013 at a total Beijing, 1996. monthly rental PRC of approximately The property has a total gross RMB190,000. floor area of approximately 1,921.52 sq.m. (20,683 sq. ft.).

Notes:

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Building Materials Sales Centre (北京市建築材料銷售中心) (“Beijing Building Materials”) has not obtained the Land Use Rights Certificate and Building Ownership Certificate for the property;
(ii) BBMG Group Company Limted (the “Parent”) has agreed Beijing Building Materials to lease out the property;
(iii) Beijing Building Materials has not obtained the building ownership rights of the property and they will entitled to transfer, mortgage or dispose of the property after the relevant Building Ownership Certificate has been obtained; and
(iv) Beijing Building Materials is in progress of applying the relevant Building Ownership Certificate for the property.
Had the valid Land Use Rights Certificate in granted land status and Building Ownership Certificates being obtained, the market value of the property would be in the sum of RMB32,630,000.
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Market value in Particulars of existing state as at No. Property Description and tenure occupancy 30 April 2010 41. Various office units of The development comprises a Portion of the RMB511,700,000 Dacheng Building, parcel of land with a site area property with No.127 Xuanwumen of approximately 1,723.13 a total gross West Main Street, sq.m. (18,548 sq. ft.) on floor area of Xicheng District, which constructed with a 23approximately Beijing, storey commercial building 24,068.81 PRC plus a 3-level basement sq.m. is subject completed in 2002. to various tenancies with The property has a total gross the latest term floor area of approximately due to expiry 32,933.74 sq.m. (354,499 sq. in 2018 at a ft.). total monthly rental of The land use rights of the approximately property have been granted RMB2,334,000. for a term expiring on 14 July 2052 for composite use.

Notes:

Pursuant to the Land Use Rights Certificate No. Jing Xi Guo Yong (2003 Chu) Zi Di 20017, the land use rights of a parcel of land with a site area of 1,732.13 sq.m. have been granted to Beijing Dacheng Development Group Co., Ltd. (北京大成開發集團有限公司) (“Beijing Dacheng”) (now named as BBMG Dacheng Development Co., Ltd. (北京金隅大成開發有限公司) (“BBMG Dacheng Development”) for a term expiring on 14 July 2052 for composite use.
Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Xi Gu Zi Di 157604, the building ownership rights of a building with a gross floor area of 42,753.65 sq.m. are vested in Beijing Dacheng (now named as BBMG Dacheng Development).

As advised by the Group, the property comprises portion of the building as stipulated in the aforesaid Building Ownership Certificate with a gross floor area of approximately 32,933.74 sq.m.

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Beijing Dacheng has obtained the property by the mean of land grant agreement;
(ii) the property will be transferred to BBMG Group Company Limited (the “Parent”) without any considerations but the relevant transfer procedure has not been applied. The Parent should transfer the aforesaid Land Use Rights Certificate and Building Ownership Certificates into its own account;
(iii) the recorded owner of the aforesaid Land Use Rights Certificate and Building Ownership Certificate is still Beijing Dacheng. BBMG Dacheng Dvelopment should apply the modification procedure for the aforesaid title documents before the property can be transferred. As advised by BBMG Dacheng Development, BBMG Dacheng Development is in progress of applying the modification procedure;
(iv) BBMG Dacheng Development will be entitled to apply the transfer procedure for the property after the modification procedure has been completed and the mortgage has been discharged; and
(v) the property is subject to a mortgage. BBMG Dacheng Development is entitled to occupy, use or derive profit from but is not allowed to freely transfer, mortgage or dispose of the property unless the consent from the mortgagee has been obtained.
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APPENDIX I

Group IV – Properties leased in the PRC

Market value in existing state Particulars of as at 30 April occupancy 2010

Description and tenure Particulars of as at 30 April No. Property particulars occupancy 2010 42. Land and a building The property comprises a The property No commercial located at Dagang parcel of land with a site area is occupied for value Station, of approximately 33,333.50 ancillary purpose. Tianjin, sq. m. (358,802 sq. ft.) on PRC which constructed with a building.

The gross floor area of the property is approximately 693.00 sq. m. (7,459 sq. ft.). The property is leased to Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (“Tianjin Tiancai”) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) from Tianjin Kangan Industrial and Trading Co, Ltd. (天津市康安工貿有限公司) for a term commencing on 1 January 2010 and expiring on 31 December 2015.

Notes:

Pursuant to a tenancy agreement entered into between Tianjin Kangan Industrial and Trading Co,. Ltd. (the “Lessor”) and Tianjin Tiancai, the property has been leased to Tianjin Tiancai for a term commencing on 1 January 2010 and expiring on 31 December 2015 at an annual rental of approximately RMB3,000,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the relevant title information cannot be provided to identify whether the land parcel is a granted land or an allocated land; and
(ii) if the land parcel is an allocated land, it has contravened the requirements set out in the relevant regulations regarding the management of allocated land.
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APPENDIX I

Description and tenure No. Property particulars

Market value in existing state Particulars of as at 30 April occupancy 2010

Land, various buildings The property comprises The property No commercial and structures located at a parcel of land with a is occupied for value Heizhuhe Station, site area of approximately industrial, office Tanggu District, 46,667.00 sq. m. (502,324 and ancillary Tianjin, sq. ft.) on which constructed purposes. PRC with various buildings and structures.

The buildings of the property mainly include workshops, offices and other ancillary buildings and have a total gross floor area of approximately 1,295.00 sq. m. (13,939 sq. ft.).

The property is leased to Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (“Tianjin Tiancai”) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) from Tianjin Zhengyuan Cement Co., Ltd. (天津市政源混凝土有限責任公司) for a term commencing on 16 December 2009 and expiring on 15 December 2014.

Notes:

Pursuant to a tenancy agreement entered into between Tianjin Zhengyuan Cement Co., Ltd. (the “Lessor”) and Tianjin Tiancai, the property has been leased to Tianjin Tiancai for a term commencing on 16 December 2009 and expiring on 15 December 2014 at an annual rental of approximately RMB900,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the relevant title information cannot be provided to identify whether the land parcel is a granted land or an allocated land; and
(ii) if the land parcel is an allocated land, it has contravened the requirements set out in the relevant regulations regarding the management of allocated land.
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APPENDIX I

Description and tenure No. Property particulars

Market value in existing state Particulars of as at 30 April occupancy 2010

Land, various buildings The property comprises and structures located a parcel of land with a at Xiqing Station, site area of approximately Tianjin, 13,899.65 sq.m. (149,616 PRC sq.ft.) on which constructed with various buildings and structures.

The property No commercial is occupied for value industrial, office and ancillary purposes.

The buildings of the property mainly include workshops, office buildings and other ancillary buildings and have a total gross floor area of approximately 1,100.00 sq.m. (11,840 sq.ft.).

The property is leased to Tianjin Zhonghong Konggang Construction Materials Co., Ltd. (天津市中航空港建材有限公司) (“Tianjin Zhonghong”) (Tianjin Zhonghong was mergerd into Tianjin Tiancai Concrete Co., Ltd., which is renamed as Tianjin BBMG Concrete Co., Ltd.) from Tianjin Gule Commodity Concrete Development Co., Ltd. (天津市固樂商品硂發展有限公司) for a term commencing on 15 April 2009 and expiring on 31 December 2010.

Notes:

Pursuant to a tenancy agreement entered into between Tianjin Gule Commodity Concrete Development Co., Ltd. (the “Lessor”) and Tianjin Zhonghong, the property has been leased to Tianjin Zhonghong for a term commencing on 15 April 2009 and expiring on 31 December 2010 at an annual rental of approximately RMB3,950,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land parcel of the property is an collective-owned land. According to the requirements set out in the relevant regulations, the owner of collective-owned land is not allowed to grant, transfer or lease to non-agricultural construction. So the Lessor is subject to a risk of being fined.
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APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various buildings The property comprises and structures located a parcel of land with a in Construction site area of approximately Material Supply 30,000.00 sq.m. (322,920 Company, sq.ft.) on which constructed Dongli District, with various buildings and Tianjin, structures completed in PRC between 2004 and 2010.

The property No commercial is occupied for value industrial, office and ancillary purposes.

The building of the property mainly include workshops, office and other ancillary buildings and have a total gross floor area of approximately 2,578.45 sq.m. (27,754 sq.ft.).

The property is leased to Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”) from Tianjin Dongli Construction Materials Supply Co., Ltd. (天津市東麗建築材料供應公司) for a term commencing on 1 January 2010 and 31 December 2010.

Notes:

Pursuant to the tenancy agreement entered into between Tianjin Dongli Construction Materials Supply Co., Ltd. (“Lessor”) and Tianjin BBMG Concrete, the land parcel of the property has been leased to Tianjin BBMG Concrete for a term commencing on 1 January 2010 and 31 December 2010 at an annual rental of approximately RMB500,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Tianjin BBMG Concrete will move out from the land parcel of the property upon the aforesaid tenancy agreement has been expired.
As advised by Tianjin BBMG Concrete, the buildings of the property were constructed by Tianjin BBMG Concrete. In the course of our valuation, we have assigned no commercial value to the buildings and structures as the relevant Land Use Rights Certificate and Building Ownership Certificate for such portion of the property have not been obtained. For reference purpose, the total depreciated replacement cost for such portion is approximately RMB11,800,000.
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APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, a building The property comprises a and various parcel of land with a site area structures located in of approximately 15,333.41 Tiancaibeichen Station, sq.m. (165,049 sq.ft.) on Tianjin, which constructed with an PRC office building and various structures completed in between 2007 and 2009.

The property is No commercial occupied by the value Group for office and ancillary purposes.

The gross floor area of the property is approximately 1,600.00 sq.m. (17,222 sq.ft.).

The property is leased to Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (“Tianjin Tiancai”) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) from Tianjin Hebei Construction Materials Ancillary Contractor Co., Ltd. (天津市河北建材配套承包公司) for a term commencing on 1 July 2007 and 30 June 2016.

Notes:

Pursuant to the tenancy agreement entered into between Tianjin Hebei Construction Materials Ancillary Contractor Co., Ltd. (“Lessor”) and Tianjin Tiancai, the land parcel of the property has been leased to Tianjin Tiancai for a term commencing on 1 July 2007 and 30 June 2016 at an annual rental of approximately RMB1,380,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land parcel of the property is an collective-owned land. According to the requirements set out in the relevant regulations, the owner of collective-owned land is not allowed to grant, transfer or lease to non-agricultural construction. So the Lessor is subject to a risk of being fined.
As advised by Tianjin Tiancai, the buildings of the property were constructed by Tianjin Tiancai. In the course of our valuation, we have assigned no commercial value to the buildings and structures as the relevant Land Use Rights Certificate and Building Ownership Certificate for such portion of the property have not been obtained. For reference purpose, the total depreciated replacement cost for such portion is approximately RMB2,100,000.
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APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various buildings The property comprises The property No commercial and structures located a parcel of land with a is occupied value at Jiaoban Station, site area of approximately by the Group Dongli District, 24,000.12 sq.m. (258,337 for ancillary Tianjin, sq.ft.) on which constructed purpose. PRC with various buildings and structures completed in between 2007 and 2010.

The building of the property mainly include ancillary buildings and have a total gross floor area of approximately 4,953.00 sq.m. (53,314 sq.ft.). The property is leased to Tianjin Zhonghong Konggang Construction Materials Co., Ltd. (天津市中航空港建材有限公司) (“Tianjin Zhonghong”) (Tianjin Zhonghong was mergered into Tianjin Tiancai Concrete Co., Ltd., which is renamed as Tianjin BBMG Concrete Co., Ltd.) fromTianjin Binhai International Airport (天津濱海國際機場) for a term commencing on 1 August 2008 and 31 December 2020.

Notes:

Pursuant to the tenancy agreement entered into between from Tianjin Binhai International Airport (“Lessor”) and Tianjin Zhonghong, the land parcel of the property has been leased to Tianjin Tianjin Zhonghong for a term commencing on 1 August 2008 and 31 December 2020 at an annual rental of approximately RMB720,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the relevant title information cannot be provided to identify whether the land parcel is a granted land or an allocated land; and
(ii) if the land parcel is an allocated land, it has contravened the requirements set out in the relevant regulations regarding the management of allocated land.
In the course of our valuation, we have assigned no commercial value to the buildings and structures as the relevant Land Use Rights Certificate and Building Ownership Certificate for such portion of the property has not been obtained. For reference purpose, the total depreciated replacement cost of the buildings is approximately RMB18,200,000.
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APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Land, various buildings The property comprises and structures located a parcel of land with a in Jiaoban Station, site area of approximately Dongfeng Road, 16,300.00 sq.m. (175,453 Hangu District, sq.ft.) on which constructed Tianjin, with various buildings and PRC structures completed in between 2007 and 2009.

The property No commercial is occupied value by the Group for ancillary purpose.

The building of the property mainly include ancillary buildings and have a total gross floor area of approximately 251.24 sq.m. (2,704 sq.ft.).

The property is leased to Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (“Tianjin Tiancai”) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) from Tianjin Hangu Cement Plant (天津漢沽水泥廠) for a term commencing on 1 October 2007 and 30 September 2017.

Notes:

Pursuant to the tenancy agreement entered into between Tianjin Hangu Cement Plant (“Lessor”) and Tianjin Tiancai, the land parcel of the property has been leased to Tianjin Tiancai for a term commencing on 1 October 2007 and 30 September 2017 at an annual rental of approximately RMB400,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land parcel of the property is an allocated land. According to the requirements set out in the relevant regulations, the owner of allocated land has to apply the land grant procedure and pay off the relevant land premium before the land use rights can be transferred, leased or mortgaged.
As advised by Tianjin Tiancai, the buildings of the property were constructed by Tianjin Tiancai. In the course of our valuation, we have assigned no commercial value to the buildings and structures as the relevant Land Use Rights Certificate and Building Ownership Certificate for such portion of the property have not been obtained. For reference purpose, the total depreciated replacement cost of the buildings is approximately RMB6,500,000.
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APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Land and a building The property comprises a The property No commercial located at Heizhuhe parcel of land with a site area is under value Station, of approximately 6,666.70 construction. Tanggu District, sq.m. (71,760 sq.ft.) on Tianjin, which an ancillary building is PRC being constructed.

Upon completion, the gross floor area of the property is approximately 1,000.00 sq.m. (10,764 sq ft).

The property is leased to Tianjin Zhengyuan Cement Co., Ltd. (天津市政源混凝土有限責任公司) (“Tianjin Zhengyuan”) from Engineer Headquarter Tanggu Farm (總參謀部工程兵塘沽農場) for a term commencing on 1 January 2009 and 31 December 2011.

Notes:

Pursuant to the tenancy agreement entered into between Engineer Headquarter Tanggu Farm (“Lessor”) and Tianjin Zhengyuan, the land parcel of the property has been leased to Tianjin Zhengyuan for a term commencing on 1 January 2009 and 31 December 2011 at an annual rental of approximately RMB900,000.
As advised by the Group, Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”) has leased the land parcel of the property from Tianjin Zhengyuan.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the aforesaid tenancy agreement has not listed out the rights of sublease and the authorized letter has not been given from the Lessor to Tianjin Zhengyuan. Also the relevant tenancy agreement has not been signed between the Lessor and Tianjin BBMG Concrete. Tianjin BBMG Concrete has to move out from the property immediately if the Lessor requests to terminate the aforesaid tenancy agreement.
As advised by Tianjin BBMG Concrete, the proposed building of the property is being constructed by Tianjin BBMG Concrete. In the course of our valuation, we have assigned no commercial value to the building as the relevant Land Use Rights Certificate and other construction approvals for such portion of the property have not been obtained. For reference purpose, the depreciated replacement cost of the proposed building is approximately RMB8,000.
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APPENDIX I

Market value in Description and tenure Particulars of existing state as No. Property particulars occupancy at 30 April 2010 50. Land and a building The property comprises a The property No commercial located at Xiangluowan parcel of land with a site area is under value Station, of approximately 70,000.00 construction. Tanggu District, sq.m. (753,480 sq.ft.) on Tianjin, which an ancillary building is PRC being constructed.

Upon completion, the gross floor area of the property is approximately 2,000.00 sq.m. (21,528 sq ft). There is also a leased ancillary building with a gross floor area of approximately of 200.00 sq.m. (2,153 sq.ft.). The property is leased to Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (“Tianjin Tiancai”) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) from Dengshangu Village Committee (鄧善沽村村民委員會) for a term commencing on 1 December 2009 and 30 November 2014.

Notes:

Pursuant to the tenancy agreement entered into between Dengshangu Village Committee (“Lessor”) and Tianjin Tiancai, the land parcel and the completed ancillary building of the property has been leased to Tianjin Tiancai for a term commencing on 1 December 2009 and 30 November 2014 at an annual rental of approximately RMB1,050,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land parcel of the property is an collective-owned land. According to the requirements set out in the relevant regulations, the owner of collective-owned land is not allowed to grant, transfer or lease to non-agricultural construction. So the Lessor is subject to a risk of being fined.
As advised by Tianjin Tiancai the proposed ancillary building of the property is being constructed by Tianjin Tiancai. In the course of our valuation, we have assigned no commercial value to the proposed building as the relevant Land Use Rights Certificate and other construction approval for such portion of the property have not been obtained. For reference purpose, the depreciated replacement cost of the proposed building is approximately RMB8,300,000.
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APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Various buildings The property comprises located at Hangu various office and ancillary Cement Plant, buildings with a total gross Hangu District, floor area of approximately Tianjin, 563.00 sq.m. (6,060 sq.ft.). PRC

The property No commercial is occupied value for office and ancillary purposes.

The property is leased to Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (“Tianjin Tiancai”) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) from Tianjin Hangu Cement Plant (天津漢沽水泥廠) for a term commencing on 1 October 2009 and 30 September 2017.

Notes:

Pursuant to the tenancy agreement entered into between Tianjin Hanggu Cement Plant (“Lessor”) and Tianjin Tiancai, the property has been leased to Tianjin Tiancai for a term commencing on 1 October 2009 and 30 September 2017 at an annual rental of approximately RMB41,800.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) as there are no regulations in the PRC’s laws to prohibit the buildings erected on an allocated land from leasing out to other parties, the aforesaid tenancy agreement should be effective.
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Market value in Description and tenure Particulars of existing state as No. Property particulars occupancy at 30 April 2010

An office unit of an The property comprises an ancillary building office unit with a gross floor located at Tianjin area of approximately 400.00 Construction Materials sq.m. (4,306 sq.ft.). Company, Tianjin, The property is leased to PRC Tianjin Tiancai Concrete Co., Ltd. (天津市天材混凝土有限公司) (“Tianjin Tiancai”) (now named as Tianjin BBMG Concrete Co., Ltd. (“Tianjin BBMG Concrete”)) from Tianjin Construction Materials Co., Ltd. (天津市建材公司) for a term commencing on 1 January 2010 and 31 December 2010.
The property No commercial is occupied for value office purpose.

Notes:

Pursuant to the tenancy agreement entered into between Tianjin Construction Materials Co., Ltd. (“Lessor”) and Tianjin Tiancai, the property has been leased to Tianjin Tiancai for a term commencing on 1 January 2010 and 31 December 2010 at an annual rental of approximately RMB72,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) Tianjin BBMG Concrete has not provided the Building Ownership Certificate for the property. If the Lessor is the owner of the building ownership rights, the tenancy agreement is effective.
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APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Lands and various structures located at Wusongsi Village, Dasungezhuang Town, Shunyi District, Beijing, PRC
The property comprises various parcels of land with a total site area of approximately 218,867.00 sq.m. (2,355,884 sq.ft.) on which constructed with various structures.
The property No commercial is occupied for value office purpose.

The property is leased to Beijing Pinggu No.2 Cement Plant Co., Ltd. (“Beijing Pinggu”) from Wusongsi Village (順義區大孫各莊鎮吳雄寺村) for various terms (Please refer to note 1).

Notes:

Pursuant to the following tenancy agreements entered into between Wusongsi Village (“Lessor”) and Beijing Pinggu, the property has been leased to Beijing Pinggu for various terms. Details of which are said as follows:

No.	Site Area (mu)	Term	Annual Rental (RMB)
1.	50.9	From 1 January 1993 to 31 December 2007	30,540
		(Renewed from 1 January 2008 to 31 December 2023)
2.	28.76	From 1 October 2000 to 30 September 2010	57,520
3.	129.97	From 29 July 2001 to 28 July 2021	227,952
4.	85.45	From 29 July 2001 to 28 July 2021	136,720
5.	33.22	From 1 January 2003 to 31 December 2022	53,152

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land parcels of the property are collective-owned lands. According to the requirements set out in the relevant regulations, the owner of collective-owned land is not allowed to grant, transfer or lease to non-agricultural construction; and
(ii) Beijing Pinggu has to apply the land grant and agricultural land modification procedure (if any) and then obtain the Land Use Rights Certificate so that Beijing Pinggu can continue to occupy the land parcels for production and construction.
157 -

PROPERTY VALUATION REPORT

APPENDIX I

Description and tenure No. Property particulars

Market value in Particulars of existing state as occupancy at 30 April 2010

Lands and various The property comprises structures located at various parcels of land Beishiqu Village, with a total site area of Mafeng Town, approximately 133,820.00 Pinggu District, sq.m. (1,440,438 sq.ft.) Beijing, on which constructed with PRC various structures.

The property No commercial is occupied for value office purpose.

The property is leased to Beijing Pinggu No.2 Cement Plant Co., Ltd. (“Beijing Pinggu”) from Beishiqu Village (平谷區馬坊鎮北石渠村) for various terms (Please refer to note 1).

Notes:

Pursuant to the following tenancy agreements entered into between Beishiqu Village (“Lessor”) and Beijing Pinggu, the property has been leased to Beijing Pinggu for various terms. Details of which are said as follows:

No.	Site Area (mu)	Term	Annual Rental (RMB)
1.	30.29	From 21 May 2002 to 20 May 2032	20,000
2.	170.44	From 1 June 2003 to 31 May 2033	136,352

We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:
(i) the land parcels of the property are collective-owned lands. According to the requirements set out in the relevant regulations, the owner of collective-owned land is not allowed to grant, transfer or lease to non-agricultural construction; and
(ii) Beijing Pinggu has to apply the land grant and agricultural land modification procedure (if any) and then obtain the Land Use Rights Certificate so that Beijing Pinggu can continue to occupy the land parcels for production and construction.
158 -

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose giving information with regard to the Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS OF DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE

As at the Latest Practicable Date, none of the Directors, supervisors and chief executive has any interest or short position in the Shares, underlying shares or debentures of the Company or any of the associated corporation(s) (within the meaning of Part XV of the SFO), which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken or were deemed to have under such provisions of the SFO), or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange.

For this purpose, the relevant provisions of the SFO will be interpreted as if applied to the supervisors.

3. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, to the best knowledge of the Directors, shareholders who had interests or short positions in the Shares and underlying shares of the Company which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO were as follows:

Long positions:

				Percentage
				of such
				shareholding
				in the same	Percentage
		Capacity and		type of the	of total
Type of	Name of	nature of	Number of	issued share	issued share
shareholding	shareholder	interest	shares held	capital (%)	capital (%)
Domestic Shares	BBMG Group	Directly and	1,753,647,866	74.14	45.27
	Company Limited	Beneficially
		Owned
Domestic Shares	China National	Directly and	239,580,000	10.13	6.19
	Materials Co., Ltd	Beneficially
		Owned

159 -

GENERAL INFORMATION

APPENDIX II

				Percentage
				of such
				shareholding
				in the same	Percentage
		Capacity and		type of the	of total
Type of	Name of	nature of	Number of	issued share	issued share
shareholding	shareholder	interest	shares held	capital (%)	capital (%)
Unlisted foreign	Hopeson Holdings	Directly and	205,380,000	60.68	5.30
Shares	Limited	Beneficially
		Owned
H Shares	JPMorgan Chase	Directly and	120,782,082	10.33	3.12
	& Co.	Beneficially
		Owned
H Shares	China Life Insurance	Directly and	118,736,500	10.15	3.07
	(Group) Company	Beneficially
		Owned
H Shares	Bank of China	Directly and	60,736,500	5.19	1.57
		Beneficially
		Owned
Short position:
				Percentage
				of such
				shareholding
				in the same	Percentage
		Capacity and		type of the	of total
Type of	Name of	nature of	Number of	issued share	issued share
shareholding	shareholder	interest	shares held	capital (%)	capital (%)
Domestic Shares	BBMG Group	Directly and	92,120,474	3.89	2.38
	Company Limited	Beneficially
		Owned

Save as disclosed above, as at the Latest Practicable Date, to the best knowledge of the Directors, there were no person who had an interest or short position in the Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.

160 -

GENERAL INFORMATION

APPENDIX II

4. INTEREST OF DIRECTORS AND CHIEF EXECUTIVE IN SUBSTANTIAL SHAREHOLDERS OF THE COMPANY

As at the Latest Practicable Date, save as disclosed below, none of the Directors was a director or employee of a company which had an interest or short position in the Shares and underlying shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of company which had such discloseable Name of Director interest or short position Position within such company Jiang Weiping BBMG Group Company Limited Chairman of the board of directors Li Changli BBMG Group Company Limited Director and General Manager Zhou Yuxian China National Materials Co., Ltd Director and President

5. INTEREST OF DIRECTORS IN COMPETING BUSINESS

As at Latest Practicable Date, the Directors are not aware that any of them or any of their associates had interests in any business which competes or was likely to compete, either directly or indirectly, with the business of the Company which would fall to be discloseable under the Listing Rules.

6. DIRECTORS’ INTEREST IN ASSET

As at Latest Practicable Date, none of the Directors had: (i) any direct or indirect interests in any asset which have been since 31 December 2009 (being the date to which the latest published audited accounts of the Company were made up) acquired or disposed of by or leased to any member of the Enlarged Group, or were proposed to be acquired or disposed of by or lease to any member of the Enlarged Group; and (ii) any subsisting material interest in any contract or arrangement at the date of this circular which is significant in relation to the business of the Enlarged Group.

7. DIRECTORS’ SERVICE CONTRACTS

As at Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Enlarged Group which is not terminable within one year without payment of compensation (other than statutory compensation).

161 -

GENERAL INFORMATION

APPENDIX II

8. MATERIAL ADVERSE CHANGE

As at Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading positions of the Group since 31 December 2009, the date to which the latest published audited combined financial statements of the Group were made up.

9. EXPERTS AND CONSENTS

The following are the qualifications of the expert who has given opinion or advice for inclusion in this circular:

Name Qualification China Everbright Capital Limited A corporation licensed to carry out type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO Savills Valuation and Professional Independent property valers Services Limited

Each of China Everbright and Savills has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter(s) of advice or report and/or valuation certificate and/or opinion and/or references to its names in the form and context in which they appear.

As at Latest Practicable Date, none of China Everbright nor Savills have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at Latest Practicable Date, none of China Everbright nor Savills have any direct or indirect interests in any assets which had been acquired or disposed of by or leased to any member of the Group since 31 December 2009 (the date to which the latest published audited combined financial statements of the Company were made up) or proposed to be acquired, disposed of or leased to.

10. GENERAL

(a) The Company’s headquarters is at Tower D, Global Trade Centre, No.36, North Third Ring East Road, Dongcheng District, Beijing 100013, the PRC. The registered office and principal place of business of the Company in the PRC is at No.36, North Third Ring East Road, Dongcheng District, Beijing 100013, the PRC.
(b) The joint company secretaries of the Company are Wu Xiangyong and Lau Fai Lawrence.
162 -

GENERAL INFORMATION

APPENDIX II

(c) The H Share registrar of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(d) The English texts of this circular and the accompanying proxy form shall prevail over the Chinese texts.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the office of Paul, Hastings, Janofsky & Walker at 22/F, Bank of China Tower, 1 Garden Road, Central, Hong Kong from the date of this circular until 28 June 2010.

(a) the Tianjin Jinzhu Concrete Acquisition Agreement;
(b) the Beijing Cement Plant Acquisition Agreement;
(c) the Beijing Eco-island Acquisition Agreement;
(d) the Beijing Yaxin Acquisition Agreement;
(e) the Beijing Longshuncheng Acquisition Agreement;
(f) the Crane Beijing Acquisition Agreement;
(g) the Beijing Yanshan Cement Acquisition Agreement;
(h) the Beijing Architectural Decoration Acquisition Agreement;
(i) the Badaling Travel Acquisition Agreement;
(j) the Beijing Zhongweisenhai Acquisition Agreement;
(k) the BBMG Dacheng Acquisition Agreement;
(l) the Beijing Ganlujiayuan Acquisition Agreement;
(m) the Beijing Yuandongjiemei Acquisition Agreement;
(n) the BBMG Hong Kong Acquisition Agreement;
(o) the BBMG Human Resources Acquisition Agreement;
(p) the BBMG Hongye Acquisition Agreement
163 -

GENERAL INFORMATION

APPENDIX II

(q) the Beijing Pinggu Acquisition Agreement;
(r) the BBMG Landao Building Acquisition Agreement;
(s) the Supplemental Agreement;
(t) the letter from the Independent Board Committee, the text of which is set out in this circular;
(u) the letter from China Everbright, the text of which is set out in this circular;
(v) the valuation report of Savills; and
(w) the consent letters from China Everbright and Savills referred to in the paragraph headed “Experts and Consents” in this Appendix.
164 -

NOTICE OF EGM

==> picture [244 x 80] intentionally omitted <==

(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2009)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “EGM”) of BBMG Corporation* (the “Company”) will be held at Conference Room 6, 22nd Floor, Tower D, Global Trade Centre, No. 36, North Third Ring East Road, Dongcheng District, Beijing, the People’s Republic of China at 2:30 p.m. on Tuesday, 27 July 2010 to consider and, if thought fit, approve (with or without modifications) the following resolution:

ORDINARY RESOLUTION

“ THAT (a) the terms of each of the equity transfer agreements and the asset acquisition agreements all dated 31 May 2010 (the “Agreements”) entered into between the Company, 北京天壇股份有限公司 (Beijing Tiantan Corporation), 北京金隅家居有限公司 (BBMG Home Furnishing Co., Ltd.), 北京建機資產經營有限責任公司 (Beijing Jianji Assets Management Co., Ltd.), 北京金海燕物業管理有限公司 (Beijing Jinhaiyan Property Management Co., Ltd.) or 北京金隅物業管理有限責任公司 (BBMG Property Management Co., Ltd.) as purchaser (as the case may be) and 北京金隅集團有限責任公司 (BBMG Group Company Limited), 北京大成房地產開發有限公司 (Beijing Dacheng Property Development Co., Ltd.), 北京金隅資產經營管理有限公司 (BBMG Assets Operation and Management Co., Ltd.), 北京市建築材料銷售中心 (Beijing Building Materials Sales Centre), 北京建築材料集團總公司實業發展公司 (Beijing Building Materials Group Corporation Industrial & Commerce Development Co., Ltd.), 北京市傢俱公司 (Beijing Furniture Co., Ltd.) or 北京市平谷區水泥二廠有限公司 (Beijing Pinggu No.2 Cement Plant Co., Ltd.) as vendor (as the case may be), as supplemented by the supplemental agreement dated 9 June 2010 between all parties mentioned above (the “Supplemental Agreement”), in relation to each of the equity acquisitions and the asset acquisitions as set out in the circular of the Company dated 11 June 2010 and all other incidental transactions be and are hereby approved, ratified and confirmed; and (b) the execution of each of the Agreements and the Supplemental Agreement be and is hereby approved, ratified and confirmed and any director of the Company be and is hereby authorized to approve, sign or execute all such documents, instruments and agreements, and to take such steps, as he may consider necessary or appropriate to give effect to or in connection with each of the Agreements and the Supplemental Agreement.”

By order of the Board BBMG Corporation[*] Jiang Weiping Chairman

Beijing, the PRC, 11 June 2010

for identification purpose only
165 -

NOTICE OF EGM

Notes:

1 Pursuant to Rule 13.39(4) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, votes of the shareholders of the Company at the EGM shall be taken by poll.
2 Any shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint one or more than one proxy to attend and vote on his behalf. A proxy need not be a member of the Company.
3 To be valid, the form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such authority, must be deposited at the headquarters of the Company at Room 2220, 22nd Floor, Tower D, Global Trade Centre, No.36, North Third Ring East Road, Dongcheng District, Beijing 100013, the People’s Republic of China (for holders of domestic shares and unlisted foreign shares), or the office of the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H shares) as soon as possible and in any event not less than 24 hours before the time for holding of the meeting or appointed time for voting or any adjournment thereof.
4 Shareholders or their proxies shall present proofs of identities when attending the EGM.
5 As announced by the Company on 16 April 2010, the transfer books and register of members of the Company will be closed from 31 May 2010 to 29 June 2010, both days inclusive, for the purpose of determining entitlements of the shareholders of the Company to the proposed final dividend and the right to attend and vote at the forthcoming annual general meeting to be held on 29 June 2010. In order to determine the list of shareholders of the Company who are entitled to attend the EGM, the transfer books and register of members of the Company will be closed from 28 June 2010 to 27 July 2010, both days inclusive. Accordingly, shareholders of the Company whose name appears on the register of members of the Company at 4:30p.m. on 28 May 2010 (Friday) will be entitled to attend and vote at the EGM.
6 Shareholders entitled to attend the EGM are requested to deliver the reply slip for attendance to the headquarters of the Company at Room 2220, 22nd Floor, Tower D, Global Trade Centre, No.36, North Third Ring East Road, Dongcheng District, Beijing 100013, the People’s Republic of China, by hand, by post or by fax (the Company’s fax no.: (86) 10 6641 0889) not later than 20 days before the date of the EGM. i.e. no later than 7 July 2010 (Wednesday).
7 Shareholders or their proxies attending the EGM are responsible for their own transportation and accommodation expenses.
8 As at the date hereof, the executive directors are Jiang Weiping, Li Changli, Jiang Deyi, Shi Xijun, Wang Hongjun and Deng Guangjun; the non-executive director is Zhou Yuxian; and the independent non-executive directors are Hu Zhaoguang, Xu Yongmo, Zhang Chengfu and Yip Wai Ming.
166 -

AI assistant

BBMG Corporation — Proxy Solicitation & Information Statement 2010

50338_rns_2010-06-10_c9fcc4cf-2895-4aae-a954-f274dec00b95.pdf

DISCLOSEABLE AND CONNECTED TRANSACTIONS

ACQUISITIONS OF EQUITY INTERESTS IN SIXTEEN ENTITIES AND ACQUISITIONS OF ASSETS OF TWO ENTITIES

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

China Everbright Capital Limited

DEFINITION

DEFINITION

DEFINITION

DEFINITION

DEFINITION

DEFINITION

DEFINITION

DEFINITION

DEFINITION

DEFINITION

DISCLOSEABLE AND CONNECTED TRANSACTIONS

ACQUISITIONS OF EQUITY INTERESTS IN SIXTEEN ENTITIES AND ACQUISITIONS OF ASSETS OF TWO ENTITIES

1. INTRODUCTION

2. THE EQUITY ACQUISITIONS AND THE ASSET ACQUISITIONS

(A) THE EQUITY ACQUISITIONS

(1) Acquisition of 100% of the equity interest in Tianjin Jinzhu Concrete

3. Subject matter

4. Consideration and payment

5. Conditions precedent

(2) Acquisition of 33.88% of the equity interest in Beijing Cement Plant

3. Subject matter

4. Consideration and payment

5. Conditions precedent

6. Completion

(3) Acquisition of 100% of the equity interest in Beijing Eco-island

1. Date

3. Subject matter

5. Conditions precedent

6. Completion

(4) Acquisition of 100% of the equity interest in Beijing Yaxin

1. Date

3. Subject matter

4. Consideration and payment

LETTER FROM THE BOARD

5. Conditions precedent

6. Completion

(5) Acquisition of 100% of the equity interest in Beijing Longshuncheng

3. Subject matter

4. Consideration and payment

5. Conditions precedent

LETTER FROM THE BOARD

6. Completion

(6) Acquisition of 67.5% of the equity interest in Crane Beijing

1. Date

2. Parties

3. Subject matter

4. Consideration and payment

5. Conditions precedent

6. Completion

(7) Acquisition of 100% of the equity interest in Beijing Yanshan Cement

1. Date

3. Subject matter

4. Consideration and payment

6. Completion

(8) Acquisition of 100% of the equity interest in Beijing Architectural Decoration

3. Subject matter

4. Consideration and payment

LETTER FROM THE BOARD

5. Conditions precedent

6. Completion

(9) Acquisition of 100% of the equity interest in Badaling Travel

3. Subject matter

LETTER FROM THE BOARD

LETTER FROM THE BOARD

(10) Acquisition of 100% of the equity interest in Beijing Zhongweisenhai

3. Subject matter

4. Consideration and payment

5. Conditions precedent

(11) Acquisition of 100% of the equity interest in BBMG Dacheng

3. Subject matter

4. Consideration and payment

5. Conditions precedent

(12) Acquisition of 100% of the equity interest in Beijing Ganlujiayuan

BBMG Corporation Proxy Solicitation & Information Statement 2010