Build King Holdings Limited — Proxy Solicitation & Information Statement 2005

Jul 19, 2005

THIS 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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Build King Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

BuildKing BUILD KING HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 240)

DISCLOSEABLE AND CONNECTED TRANSACTION

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 4 to 9 of this circular and a letter from the Independent Board Committee containing its recommendations to the Independent Shareholders in relation to the Agreement is set out on page 10 of this circular. A letter from AMS, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, containing its advice to the Independent Board Committee and the Independent Shareholders in relation to the Agreement is set out on pages 11 to 16 of this circular.

A notice convening the Special General Meeting to be held at Units 1001-1015, 10th Floor, Tower 1, Grand Central Plaza, 138 Shatin Rural Committee Road, Shatin, New Territories, Hong Kong on Monday, 8 August 2005 at 11:00 a.m. is set out on pages 25 to 26 of this circular. A form of proxy for use at the Special General Meeting is enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit with the Company’s branch share registrar, Progressive Registration Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Special General Meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjourned meeting should you so wish.

19 July 2005

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Letter from AMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25

– i –

DEFINITIONS

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

“Agreement”

the agreement dated 28 June 2005 between Sky Excel and Innocity in relation to the establishment of the Joint Venture

“AMS”

AMS Corporate Finance Limited, a licensed corporation to conduct types 4 (advising on securities), 6 (advising on corporate finance) and 9 (asset management) regulated activities under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Agreement

“associate(s)” has the meaning ascribed to it under the Listing Rules

“Board” the board of Directors

“Business Day”

• any day (excluding Saturday) that banks in Hong Kong are generally open for business

“Company”

Build King Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange

“Completion” completion of the subscription to Value Ahead as provided under the Agreement

• “connected person(s)” has the same meaning as ascribed to it under the Listing Rules

“Directors” the directors of the Company

• “Group” the Company and its subsidiaries

“Hong Kong” the Hong Kong Special Administrative Region of the PRC

“HK$” Hong Kong Dollar, the lawful currency of Hong Kong

“Independent Board Committee”

the independent committee of the Board, comprising the three independent non-executive Directors, namely Dr. Chow Ming Kuen, Joseph, Mr. Ng Chi Ming, James and Mr. Ho Tai Wai, David, for the purpose of advising the Independent Shareholders as to the terms of the Agreement are fair and reasonable as far as the Independent Shareholders are concerned

– 1 –

DEFINITIONS

• “Independent Shareholders” Shareholders other than Wai Kee and its associates “Innocity” Innocity International Limited, a company incorporated in Hong Kong with limited liability and is a wholly-owned subsidiary of the Company

• “Joint Venture” the wholly foreign-owned enterprise to be established by the parties through Value Ahead in the PRC pursuant to the Agreement

• “Latest Practicable Date” 14 July 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “PRC” the People’s Republic of China

• “RMB” Renminbi, the lawful currency of the PRC

• “Road King” Road King Infrastructure Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange

• “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)” ordinary share(s) of HK$0.10 each in the issued share capital of the Company

• “Shareholder(s)” holder(s) of the Share(s)

• “Shareholders’ Loans” the shareholder’s loan in the amount of US$1,812,300.60 to be provided by Sky Excel to Value Ahead and the shareholder’s loan in the amount of US$1,208,200.40 to be provided by Innocity to Value Ahead pursuant to the Agreement

• “Sky Excel” Sky Excel Investments Limited, a company incorporated in the British Virgin Islands with limited liability and is a wholly-owned subsidiary of Road King

“Special General Meeting” special general meeting of the Company to be held to consider the Agreement

“Stock Exchange” the Stock Exchange of Hong Kong Limited

– 2 –

DEFINITIONS

“US$” United States dollar, the lawful currency of the United States “Value Ahead” Value Ahead Limited, a company incorporated in the British Virgin Islands with limited liability on 12 April 2005 and as at the date of this circular has an issued share capital of US$1.00 and is wholly-owned by Sky Excel

• “Wai Kee” Wai Kee Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange and is a controlling shareholder of each of Road King and the Company

• “%” per cent.

For the purpose of this circular, the exchange rate for US$ into RMB is US$1.00 = RMB8.2765.

– 3 –

LETTER FROM THE BOARD

BuildKing BUILD KING HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 240)

Executive Directors: Zen Wei Peu, Derek (Chairman) Yu Sai Yen (Vice Chairman)

Non-executive Director: David Howard Gem Cheng Chi Pang, Leslie

Independent non-executive Directors: Chow Ming Kuen, Joseph Ng Chi Ming, James Ho Tai Wai, David

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal place of business in Hong Kong: Units 1001-1015, 10th Floor Tower 1, Grand Central Plaza 138 Shatin Rural Committee Road Shatin, New Territories Hong Kong

19 July 2005

To the Shareholders

Dear Sir/Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

On 28 June 2005, the Company announced that Sky Excel, a wholly-owned subsidiary of Road King, and Innocity, a wholly-owned subsidiary of the Company, have entered into the Agreement, pursuant to which, Sky Excel and Innocity have conditionally agreed to establish the Joint Venture, which would be wholly-owned by Value Ahead. Each of Sky Excel and Innocity will subscribe for 59 and 40 new shares, respectively, in Value Ahead for an aggregate cash consideration of US$99.00, payable at Completion.

Upon Completion, Sky Excel will be interested in 60% of the issued share capital of Value Ahead and Innocity will be interested in 40% of the issued share capital of Value Ahead.

As at the date of this circular, Wai Kee is interested as to approximately 46.8% in Road King and as to approximately 63.2% in the Company. Accordingly, the transaction contemplated under the Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting, announcement and independent shareholders’ approval requirements.

– 4 –

LETTER FROM THE BOARD

The Independent Board Committee has been formed to advise the Independent Shareholders of the Agreement.

An independent financial adviser, AMS, has been appointed to advise the Independent Board Committee and the Independent Shareholders as to whether or not the terms of the Agreement are fair and reasonable as far as the Independent Shareholders are concerned.

The purpose of this circular is:

• (i) to provide the Shareholders with details of the Agreement;

• (ii) to set out the opinion of the independent financial adviser in respect of the terms of the Agreement;

• (iii) to set out the recommendation of the Independent Board Committee in respect of the terms of the Agreement; and

• (iv) to give notice of the Special General Meeting to consider and, if thought fit, to approve the Agreement.

Your attention is hereby drawn to pages 25 to 26 of this circular where you will find a notice of the Special General Meeting to be held on 8 August 2005.

THE AGREEMENT

Date of the Agreement

28 June 2005

Parties to the Agreement

• (1) Sky Excel, a wholly-owned subsidiary of Road King; and

• (2) Innocity, a wholly-owned subsidiary of the Company.

Co-operation in the construction business

Pursuant to the Agreement, Sky Excel and Innocity agreed to establish the Joint Venture in the PRC to engage in the business of property construction.

Sky Excel will subscribe for 59 new shares in Value Ahead for a cash consideration of US$59.00, which together with the 1 share already owned by Sky Excel, will represent 60% of the issued share capital of Value Ahead at Completion. Innocity will subscribe for 40 new shares of Value Ahead for a cash consideration of US$40.00, representing 40% of the issued share capital of the Value Ahead, payable at Completion. Value Ahead currently has 1 share in issue and is wholly-owned by Sky Excel.

– 5 –

LETTER FROM THE BOARD

Shareholders’ Loans

Pursuant to the Agreement and simultaneously at Completion, Sky Excel shall provide a shareholder’s loan in the amount of US$1,812,300.60 to Value Ahead and Innocity shall provide a shareholder’s loan in the amount of US$1,208,200.40 to Value Ahead. Such Shareholders’ Loans will be provided by Sky Excel and Innocity to Value Ahead at Completion. The aggregate of the consideration for the subscription of the shares in Value Ahead and the provision of its share of the Shareholders’ Loans will be US$1,208,240.40 which will be satisfied by internal resources of the Company. The Board does not expect any further capital injection into Value Ahead.

The Shareholders’ Loans shall be provided by Sky Excel and Innocity on the following terms:

• (a) unsecured;

• (b) non-interest bearing; and

• (c) repayable by installments from time to time with the unanimous approval of the board of directors of Value Ahead.

The equity capital of Value Ahead and the Shareholders’ Loans will be used to fund the contribution to the registered capital of the Joint Venture. It is currently envisaged that the Joint Venture will have a registered capital of RMB25 million and will be funded by Value Ahead in accordance with the respective equity interests in Value Ahead by the parties. The total investment of the Joint Venture is currently envisaged to be RMB50 million. The shortfall between the amount of the total investment and the registered capital will be made up by loans from banks and other financial institutes to be secured by the assets of the Joint Venture.

As at the date of this circular, no negotiations or discussions have been held with any banks or financial institutes with regard to the provision of such loans, if guarantees are required to secure such loans, it is currently intended by the parties that such guarantees will be provided by the parties in accordance with their respective interests in the Joint Venture.

At Completion, Value Ahead will become a jointly controlled entity of Road King and the Company and the parties will share the profits or losses of Value Ahead in accordance with their respective equity interests in Value Ahead. Value Ahead was incorporated on 12 April 2005 and it has not conducted any business since its incorporation and no profit and loss accounts have been prepared. Upon Completion and the establishment of the Joint Venture, its only asset will be the Joint Venture.

Conditions

Completion is conditional upon:

• (1) Road King having obtained approval from its independent shareholders on the Agreement at the Special General Meeting convened in compliance with the Listing Rules; and

– 6 –

LETTER FROM THE BOARD

• (2) the Company having obtained approval from its independent shareholders on the Agreement at the Special General Meeting convened in compliance with the Listing Rules.

If the conditions above are not satisfied on or before 30 December 2005 or such later date as may be agreed between the parties, the Agreement shall be terminated automatically and, upon such termination, the Agreement shall cease to have effect as between the parties and none of them shall have any further liability under or pursuant to the provisions of the Agreement except in respect of any antecedent breach.

Completion

Pursuant to the Agreement, completion will take place on the first Business Day following the satisfaction of the conditions set out above.

Board Composition of Value Ahead

At Completion, the board of directors of Value Ahead shall comprise 5 directors, Sky Excel shall have the right to nominate 3 directors (including the chairman) and Innocity shall have the right to nominate 2 directors. All major business decisions shall only become effective upon agreement by all the directors of Value Ahead.

It is currently intended that the same board will make up the board of directors of the Joint Venture.

INFORMATION ON THE COMPANY AND ROAD KING

Road King is an investment holding company and its subsidiaries are principally engaged in the investment in, development, operation and management of toll roads and expressways in the PRC. Road King through its subsidiaries has also engaged in the property development business in the PRC since last year.

The Company is an investment holding company and is principally engaged in the undertaking of construction projects in Hong Kong, the PRC and Taiwan and is also engaged in environmental and waste management and marine engineering.

REASONS FOR THE CO-OPERATION

It is intended that the Joint Venture will be established in the PRC to engage in the business of property construction.

Since 1997, the property development market and the construction industry in Hong Kong have gone into a gradual decline whereas the property development market and the construction industry in the PRC have experienced rapid developments. Each of the Company and Road King recognises the importance of the PRC market to its future development and the co-operation is formed after arm’s length negotiation and on normal commercial terms for the purpose of utilising the respective strengths of the parties and the synergies between them in developing the important PRC market. The Directors believe the terms of the transaction are fair and reasonable and in the interests of the Shareholders as a whole. The transaction has no impact on earnings, assets and liabilities of the Company.

– 7 –

LETTER FROM THE BOARD

Road King is engaged in property development business in the PRC, in addition to its toll roads and expressways business. The Company has the necessary experience and expertise in civil engineering and construction works. It is envisaged that subject to compliance with the requirements for connected transactions under the Listing Rules, the Joint Venture will, on an initial basis, undertake construction works solely on Road King’s property development projects. Further announcement in respect of any such projects will be made in compliance with the requirements of the Listing Rules as and when required.

None of the Group or any of its jointly controlled entities currently engages in property development construction business in the PRC. The Directors do not expect to undertake property development construction business in the PRC except through the Joint Venture in the medium term. With the establishment of the Joint Venture, its potential in undertaking the construction business of Road King and further opportunities in exploring construction business in the PRC, it is expected that contribution from the PRC market to the Company will improve as a result of the co-operation.

GENERAL

As at the date of this circular, Wai Kee is interested as to approximately 46.8% in Road King and as to approximately 63.2% in the Company. Accordingly, the transaction contemplated under the Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and will be subject to the approval of the Independent Shareholders by poll at the Special General Meeting at which Wai Kee and its associates will abstain from voting.

SPECIAL GENERAL MEETING

Set out on pages 25 to 26 is a notice convening the Special General Meeting to be held at Units 1001-1015, 10th Floor, Tower 1, Grand Central Plaza, 138 Shatin Rural Committee Road, Shatin, New Territories, Hong Kong on 8 August 2005 at which ordinary resolution will be proposed to the Independent Shareholders to consider and, if thought fit, approve the Agreement.

The form of proxy for use at the Special General Meeting is enclosed with this circular. Whether or not you are able to attend the Special General Meeting in person, you are advised to read the notice and complete and return the form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar, Progressive Registration Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, as soon as possible but in any event not later than 48 hours before the time appointed for the holding of the Special General Meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjourned meeting thereof should you so wish.

Pursuant to bye-law 75 of the bye-laws of the Company, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by:

• (a) the chairman; or

– 8 –

LETTER FROM THE BOARD

• (b) at least three members present in person or by proxy or by representative for the time being entitled to vote at the meeting; or

• (c) any member or members present in person or by proxy or by representative and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

• (d) a member or members present in person or by proxy or by representative and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

RECOMMENDATIONS

Your attention is drawn to the letter from the Independent Board Committee set out on page 10 of this circular which contains its recommendations to the Independent Shareholders in respect of the Agreement, and the letter from AMS on pages 11 to 16 of this circular which contains its advice and the principal factors and reasons it has taken into consideration in arriving at its advice with regard to the Agreement.

The Independent Board Committee, having taken into account the advice from AMS, considers that the terms of the Agreement are fair and reasonable and in the interests of the Company and Shareholders as a whole, and therefore recommend the Independent Shareholders to vote in favor of the ordinary resolution to be proposed at the Special General Meeting to approve the Agreement. You are advised to read the letter from the Independent Board Committee and the letter from AMS mentioned above before deciding as to how to vote at the Special General Meeting.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendix to this circular and the notice of the Special General Meeting.

Yours faithfully,

By order of the Board of

Build King Holdings Limited Zen Wei Peu, Derek

Chairman

– 9 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

BuildKing BUILD KING HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 240)

19 July 2005

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

We have been appointed as members of the Independent Board Committee to advise you in connection with the Agreement, details of which are set out in the “Letter from the Board” in the circular dated 19 July 2005 (the “Circular”) of which this letter forms part. Defined terms used in this letter shall have the same meanings as given to them in the Circular unless the context otherwise requires.

We, being the independent non-executive Directors constituting the Independent Board Committee, are writing to you to set out our opinion in respect of the Agreement. The Independent Board Committee was set up to advise you whether in its view the terms of the Agreement are in the interests of the Company and the Independent Shareholders as a whole and are fair and reasonable so far as the Independent Shareholders are concerned.

AMS has been appointed by the Company to advise us and the Independent Shareholders as to whether the terms of the Agreement are fair and reasonable so far as the Independent Shareholders are concerned. Details of its advice, together with the principal factors taken into consideration in arriving at such advice, are set out on pages 11 to 16 of the Circular.

Your attention is also drawn to the “Letter from the Board” set out on pages 4 to 9 of the Circular and the additional information set out in the appendix to the Circular.

Having considered the terms of the Agreement and the advice of AMS, we consider that the terms of the Agreement are fair and reasonable as far as the Independent Shareholders are concerned and that they are in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution as set out in the notice of the Special General Meeting attached to the Circular to approve the Agreement.

Yours faithfully, For and on behalf of Independent Board Committee Chow Ming Kuen, Joseph Ng Chi Ming, James Independent non-executive Independent non-executive Director Director

Ho Tai Wai, David Independent non-executive Director

– 10 –

LETTER FROM AMS

The following is the full text of the letter of advice from AMS to the Independent Board Committee and the Independent Shareholders prepared for the purpose of incorporation in this circular.

20th Floor

Hong Kong Diamond Exchange Building 8-10 Duddell Street Central Hong Kong 19 July 2005

• To the Independent Board Committee and

the Independent Shareholders of Build King Holdings Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders of Build King Holdings Limited (the “Company”) in respect of the establishment of the Joint Venture, details of which are set out in the letter from the Board (the “Letter from the Board”) contained in the circular dated 19 July 2005 issued by the Company to the Shareholders (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

The Agreement was entered into between Innocity and Sky Excel on 28 June 2005 pursuant to which Innocity and Sky Excel have conditionally agreed to establish the Joint Venture through the subscription for 40 and 59 new shares at US$1.00 each in Value Ahead by Innocity and Sky Excel, respectively. Innocity is a wholly owned subsidiary of the Company and Sky Excel is a wholly owned subsidiary of Road King. Upon Completion, Innocity and Sky Excel will be interested in 40% and 60%, respectively, of the issued share capital of Value Ahead, which will be the holding company of the Joint Venture. In addition, pursuant to the Agreement, Innocity and Sky Excel shall each provide a shareholder’s loan in the amount of US$1,208,200.40 (equivalent to HK$9,423,963) and US$1,812,300.60 (equivalent to HK$14,135,945), respectively, to Value Ahead at Completion. The equity capital of Value Ahead and the Shareholders’ Loans will be used to fund the contribution to the registered capital of the Joint Venture, which will be established in the PRC to engage in the business of property construction, initially for Road King’s property development projects in the PRC. The details of the other terms of the Agreement have been stated in the Letter from the Board.

– 11 –

LETTER FROM AMS

Since the aggregate of the total cash consideration for the proposed subscription for the 40% equity interest in Value Ahead and the provision of the relevant shareholder’s loan by Innocity amounts to US$1,208,240.40 (equivalent to approximately HK$9,424,275) and falls within 5% and 25% of the market capitalisation of the Company, the Agreement by Innocity constitutes a discloseable transaction for the Company under the Listing Rules. Furthermore, since Wai Kee, which is the controlling shareholder of the Company holding approximately 63.2% of the issued share capital of the Company, is also a substantial shareholder of Road King, the Agreement by Innocity also constitutes a connected transaction for the Company under the Listing Rules and is subject to the relevant reporting, announcement and independent shareholders’ approval requirements.

The Independent Board Committee, comprising all the independent non-executive Directors, has been established to advise the Independent Shareholders as to whether the Agreement is in the interests of the Company and the Shareholders as a whole and whether the terms of the Agreement are fair and reasonable so far as the Independent Shareholders are concerned. As the independent financial adviser to the Independent Board Committee and the Independent Shareholders, our role is to give an independent opinion to the Independent Board Committee and the Independent Shareholders as to i) whether or not the Agreement is in the interests of the Company and the Shareholders as a whole; ii) whether the terms of the Agreement are fair and reasonable so far as the Independent Shareholders are concerned; and iii) how the Independent Shareholders should vote in respect of the resolution to approve the Agreement at the Special General Meeting.

BASIS OF OUR OPINION

In formulating our opinion, we have relied on the information and representations contained or referred to in the Circular and the information and representations provided to us by the Company and the Directors. We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the Company and the Directors, for which they are solely and wholly responsible, were true and accurate at the time when they were made and continue to be so at the date hereof. The Directors have confirmed, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts or representations the omission of which would make any statement in the Circular, including this letter, misleading. We have no reason to doubt the truth, accuracy or completeness of the information provided to us by the Company and the Directors. We consider that we have reviewed sufficient information to reach an informed view. We have not, however, conducted any independent verification of the information provided, nor have we carried out any form of in-depth investigation into the business and affairs of the Group or the prospects of the market in which it operates.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion regarding the Agreement, we have taken into consideration the following principal factors and reasons:

Reasons for the Agreement

The Company is an investment holding company and its subsidiaries are principally engaged in civil engineering projects in Hong Kong, the PRC and Taiwan and environmental and waste management

– 12 –

LETTER FROM AMS

and marine engineering. As stated in the Letter from the Board, the Directors consider that the property development market and the construction industry in Hong Kong have gone into a gradual decline whereas the property development market and the construction industry in the PRC have experienced rapid developments. Both the Company and Road King recognise the importance of the PRC market to their future development. The terms of the Agreement were arrived at after arm’s length negotiation and on normal commercial terms and the Directors believe that the Joint Venture will be able to utilise the respective strengths of the Company and Road King in developing the PRC market. Furthermore, given the Company’s expertise in the civil engineering business and Road King’s experience in the property development business, the Directors consider that synergies exist between the Company and Road King in forming the Joint Venture. The Directors therefore consider that the Agreement is in the interests of the Company and the Shareholders as a whole and the terms of the Agreement are fair and reasonable.

As noted from the Company’s annual report for the year ended 31 December 2004 (the “Annual Report”), both the Group’s turnover and its share of the turnover from the jointly controlled entities declined substantially for the year ended 31 December 2004. In particular, the Group’s turnover dropped by over 40% from approximately HK$640.8 million to HK$368.7 million whereas the share of the turnover from the jointly controlled entities decreased by approximately 34% from approximately HK$566.5 million to HK$372.0 million. The Directors have explained in the Annual Report that the key factor attributable to the significant decrease of turnover was the continuously adverse construction market in Hong Kong as a result of the severe cuts in capital expenditures in both the public and private sectors in recent years. As stated in the Annual Report, the Company does not expect 2005 to be a recovery year for the construction industry in Hong Kong but prospects are reasonably optimistic for 2006.

As further noted from the Annual Report, in order to reduce its long term dependence on the local construction market, the Company had set a 5-year target in 2003 to realise at least one third of the Group’s turnover from outside of Hong Kong by the end of 2008. For the year ended 31 December 2004, Hong Kong remained as the largest geographic market segment of the Group as it accounted for approximately 85% of the aggregate of the Group’s turnover and share of the turnover of the jointly controlled entities. This strategy to diversify the Group’s business geographically will take considerable time and effort but the Group is confident in achieving such goal over a longer term.

In view of the Group’s business focus primarily on the Hong Kong market and the significant decrease in both the Group’s turnover and share of the turnover of the jointly controlled entities for the recent financial year, we consider it commercially sensible for the Group to explore business opportunities in market outside of Hong Kong. The Group’s existing business in the PRC mainly focuses on the environmental sector, particularly the sewage treatment works and civil engineering works, and such business represented less than 2% of the aggregate of the Group’s turnover and share of the turnover of the jointly controlled entities for the year ended 31 December 2004. In addition, the Group has 25% equity interest in China Railway Tenth Group Third Engineering Company Limited, which currently has First Class Main Contractor Licence of Municipal Works in the PRC. However, none of the Group or any of its jointly controlled entities currently engages in property construction business in the PRC. Through the Joint Venture, the Group will be able to participate in the property construction business in the PRC and, as a result, to further diversify its business geographically, which we consider to be in the interests of the Company and the Shareholders as a whole.

– 13 –

LETTER FROM AMS

Background of Road King

Road King is an investment holding company and its subsidiaries and infrastructure joint ventures are principally engaged in the investment, development, operation and management of toll roads and expressways in the PRC. According to the annual report of Road King for the year ended 31 December 2004 (the “Road King Annual Report”), Road King had an infrastructure investment portfolio of over HK$6.0 billion, comprising 21 toll roads and bridges spanning approximately 1,100 kilometers with over 60 toll stations in eight provinces of the PRC. In addition, the Road King Group started property development business in the PRC in 2004 and as noted from the Road King Annual Report, the Road King Group had properties under development for sale in the amount of approximately HK$193.8 million.

We also noted that the toll road and expressway business of the Road King Group which was first started in 1994 and now covers eight provinces in the PRC (i.e. Hebei Province, Auhui Province, Guangdong Province, Hunan Province, Shanxi Province, Jiangsu Province, Guangxi Zhuang Autonomous Region and Henan Province). The Joint Venture will be able to utilise the local knowledge of Road King in developing its property construction business in the PRC. Accordingly, we concur with the Directors’ view that the Company will benefit from having Road King as its Joint Venture partner.

Business prospects of the Joint Venture

As stated in the Letter from the Board, subject to compliance with the requirements for connected transactions under the Listing Rules, the Joint Venture will initially undertake construction works solely on Road King’s property development projects. In addition, the Directors do not expect that, in the medium term, the Group will undertake similar property construction business in the PRC except through the Joint Venture. As mentioned above, none of the Group or any of its jointly controlled entities currently engages in property construction business in the PRC. Therefore, it is in the interests of the Company to enter into the Agreement so as to capture the PRC construction business opportunities through the Joint Venture. As noted from the Road King Annual Report, the Road King Group had acquired land-use rights of certain properties in Guangzhou, Guangdong Province and Changzhou, Jiangsu Province, and the property in Guangzhou is now under construction. Road King expects that the property business will start contributing profit in 2006. However, since Road King currently does not have any concrete plan as to which property projects may be undertaken by the Joint Venture, we are not in a position to comment on the contribution that may be derived from the Joint Venture.

Based on the 2003 China Statistical Yearbook, the total production value of the construction industry of the PRC grew from approximately RMB912.6 billion to RMB2,308.4 billion from 1997 till 2003, representing an average annual growth rate of approximately 16.7%. We also noted the recent measures by the PRC Government to slow the growth of the property market such as raising mortgage lending rates and the minimum down payment for mortgage loans and increasing sales tax on luxury homes in certain cities of the PRC. Such measures to curb property speculation and to stabilise the real estate prices may affect property prices in the immediate term but, nevertheless, may safeguard healthy growth of the PRC real estate market in the long run. Given the significant growth of the construction industry of the PRC in recent years as well as the general expectation for the PRC Government to promote a continuous and steady growth of the real estate market, we are optimistic about the future prospects of the PRC construction industry.

– 14 –

LETTER FROM AMS

Although the Joint Venture will initially undertake construction works on Road King’s property development projects, we believe that significant opportunities exist given the vastness of the PRC market. Taking into account the opportunity for the Group through the Joint Venture to expand its construction business into the PRC market which we consider to be prosperous in general, we are of the view that the Agreement is in the interests of the Company and the Shareholders as a whole.

Board composition of the Joint Venture

As stated in the Letter from the Board, the board of directors of Value Ahead (the “Value Ahead Board”) shall comprise five directors and Sky Excel shall have the right to nominate three directors (including the chairman) whereas Innocity shall have the right to nominate two directors. It is currently intended that the same board will make up the board of directors of the Joint Venture. We also noted from the Agreement that all major business decisions shall only become effective upon agreement by all the directors of Value Ahead.

Since the number of the directors on the Value Ahead Board to be nominated by Innocity is in proportion to its equity interest in Value Ahead, we consider such arrangement for the composition of the Value Ahead Board to be fair and reasonable. Furthermore, as all major business decisions of Value Ahead must be agreed by the Value Ahead Board unanimously, we are of the view that the Group will have reasonable influence on the operation of the Joint Venture.

Financial effects of the Agreement

As stated in the Letter from the Board, Value Ahead will become a jointly controlled entity of the Company upon Completion and the Company will have a 40% share of the profits or losses of Value Ahead in accordance with its equity interest in Value Ahead. Accordingly, the Group’s share of the profits or losses of Value Ahead will be included in the Company’s consolidated income statement in the future.

The aggregate of the total cash consideration for the proposed subscription for the 40% equity interest in Value Ahead and the provision of the relevant shareholder’s loan by Innocity amounts to US$1,208,240.40 (equivalent to approximately HK$9,424,275), and such total cash consideration will be satisfied by internal resources of the Group. The Company currently does not expect any further capital injection into Value Ahead. As stated in the Letter from the Board, the total investment of the Joint Venture is currently envisaged to be RMB50 million and the shortfall between the amount of the total investment and the registered capital will be made up by loans from banks and other financial institutions to be secured by the assets of the Joint Venture. In addition, if the Company and Road King are required to provide guarantees to any banks or other financial institutions for their financing to the Joint Venture, it is currently intended that such guarantees will be provided by them in accordance with their respective interests in the Joint Venture. We consider such intended arrangement to be fair and reasonable.

Based on the latest consolidated balance sheet of the Company as at 31 December 2004, the Group had bank balances and cash and net assets of approximately HK$51.8 million and HK$111.1 million, respectively. Based on the latest audited financial position of the Group, we are of the view that the

– 15 –

LETTER FROM AMS

Group will have sufficient financial resources to meet its obligations under the Agreement. Furthermore, the Agreement will not have any immediate impact on the net asset position of the Group unless and until such time the Group starts to share the profits or losses of the Joint Venture.

RECOMMENDATION

Having considered the factors and reasons stated above, we are of the opinion that the Agreement is in the interests of the Company and the Shareholders as a whole and the terms of the Agreement are fair and reasonable so far as the Independent Shareholders are concerned. Therefore, we would recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution to approve the Agreement at the Special General Meeting.

Yours faithfully,

For and on behalf of

AMS Corporate Finance Limited Alexander Tai Managing Director

– 16 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with respect to the Company. The information contained herein relating to the Company has been supplied by the Directors, who collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained in this circular the omission of which would make any statement herein misleading insofar as it relates to the Company.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short position

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company (including their respective spouses, infant children, related trusts and companies controlled by them) in the Shares, underlying Shares and debentures of the Company or any associated corporations (within the meaning of Part XV of 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 were taken or deemed to have under such provisions of the SFO) or were required to be entered in the register maintained by the Company pursuant to section 352 of the SFO or 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 were as follows:

The Company

		Number of	Shares held
	Capacity/	Long	Short	Percentage of
Name of Director	Nature of Interest	position	position	shareholding
				(%)
Zen Wei Peu, Derek	Personal	69,715,421	–	8.92
		(Note)
Yu Sai Yen	Personal	16,666,000	–	2.13
David Howard Gem	Personal	140,000	–	0.018
Cheng Chi Pang, Leslie	Personal	140,000	–	0.018

Note: The number of Shares taken to be interested or have a long position by Mr. Zen Wei Peu, Derek includes (i) 49,715,421 Shares and (ii) the purchasing right granted to him to purchase 20,000,000 Shares pursuant to the Staff Share Purchasing Scheme adopted by Wai Kee on 15 March 2004.

– 17 –

GENERAL INFORMATION

APPENDIX

Associated corporations

		Capacity/	Number of	Shares held	Shares held
Name of	Name of	Nature of	Long		Short	Percentage of
Director	Company	Interest	position	position		shareholding
						(%)
Zen Wei Peu,	Wai Kee	Personal	185,057,078		–	23.33
Derek			(Note 1)
	Wai Kee (Zens)	Personal	2,000,000		–	10.00
	Construction &		(Note 2)
	Transportation
	Company
	Limited
	(“WKC&T”)
	Wai Luen Stone	Personal	30,000		–	37.50
	Products Limited		(Note 3)
David Howard	Wai Kee	Personal	500,000		–	0.06
Gem			(Note 4)
	Kier Hong Kong	Corporate	75,000		–	1.50
	Limited		(Note 5)
Cheng Chi Pang,	Wai Kee	Personal	500,000		–	0.06
Leslie			(Note 6)

Notes:

1. The number of shares taken to be interested or have a long position by Mr. Zen Wei Peu, Derek is 185,057,078 ordinary shares of HK$0.10 each in the capital of Wai Kee.

2. The number of shares taken to be interested or have a long position by Mr. Zen Wei Peu, Derek is 2,000,000 non-voting deferred shares of HK$1.00 each in the capital of WKC&T, a wholly-owned subsidiary of the Company.

3. The number of shares taken to be interested or have a long position by Mr. Zen Wei Peu, Derek is 30,000 non-voting deferred shares of HK$10.00 each in the capital of Wai Luen Stone Products Limited, a wholly-owned subsidiary of Wai Kee.

4. The number of shares taken to be interested or have a long position by Mr. David Howard Gem is 500,000 ordinary shares of HK$0.10 each in the capital of Wai Kee.

5. The number of shares taken to be interested or have a long position by Mr. David Howard Gem is 75,000 ordinary shares of £l.00 each in the capital of Kier Hong Kong Limited through his 100% interest in Transoceanic Ventures Limited.

6. The number of shares taken to be interested or have a long position by Dr. Cheng Chi Pang, Leslie is 500,000 ordinary shares of HK$0.10 each in the capital of Wai Kee.

– 18 –

GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in any equity or debt securities of the Company or any associated corporations (within the meaning 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 or short positions in which any such Director or chief executive is taken or deemed to have under such provisions of the SFO) or which were required to be entered in the register kept by the Company pursuant to section 352 of the SFO, to be entered in the register referred to therein 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.

(b) Interests of substantial shareholders

The Company

As at the Latest Practicable Date, so far as was known to the Directors or the chief executive of the Company, the following person (other than a Director or chief executive of the Company) had an interest or short positions in the Shares or 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 as recorded in the register required to be kept by the Company under Section 336 of the SFO:

Name of	Capacity/	Number of Shares held in the Company	Number of Shares held in the Company	Number of Shares held in the Company	Number of Shares held in the Company
substantial	Nature of		and percentage of shareholding
Shareholder	interest	Long	position		Short position
		Number of			Number of
		Shares		%	Shares	%
Top Horizon Holdings	Personal/	592,421,270	75.81		71,600,000	9.16
Limited	Beneficiary	(Notes l and 2)			(Note 4)
(“Top Horizon”)
(Note 1(a))
Wai Kee (Zens) Holding	Personal/	5	0.00		–	–
Limited	Beneficiary
(“Wai Kee (Zens)”)
(Note 1(b))
	Corporate	592,421,270	75.81		71,600,000	9.16
		(Notes 1 and 3)			(Note 4)
Wai Kee_(Note 1(c))_	Corporate	592,421,275	75.81		71,600,000	9.16
		(Notes 1 and 3)			(Note 4)

– 19 –

GENERAL INFORMATION

APPENDIX

Name of	Capacity/	Number of Shares held in the Company	Number of Shares held in the Company	Number of Shares held in the Company	Number of Shares held in the Company
substantial	Nature of		and percentage of shareholding
Shareholder	interest	Long	position		Short position
		Number of			Number of
		Shares		%	Shares	%
Vast Earn Group Limited	Personal/	59,883,040	7.66		–	–
(Note 1(d))	Beneficiary
NWS Service	Corporate	59,883,040	7.66		–	–
Management Limited		(Note 1)
(incorporated in the
British Virgin Islands)
(Note 1(e))
NWS Service	Corporate	59,883,040	7.66		–	–
Management Limited		(Note 1)
(incorporated in the
Cayman Islands)
(Note 1(f))
NWS Holdings Limited	Corporate	59,883,040	7.66		–	–
(Note 1(g))		(Note 1)
New World Development	Corporate	59,883,040	7.66		–	–
Company Limited		(Note 1)
(Note 1(h))
Chow Tai Fook Enterprises	Corporate	59,883,040	7.66		–	–
Limited		(Note 1)
(Note 1(i))

Notes:

1. Long position in the Shares

2. (a) Top Horizon is a direct wholly-owned subsidiary of Wai Kee (Zens).

3. (b) Wai Kee (Zens) is deemed to be interested in the Shares through its interests in Top Horizon.

4. (c) Wai Kee (Zens) is a direct wholly-owned subsidiary of Wai Kee. Accordingly, Wai Kee is deemed to be interested in the Shares through its interests in its wholly-owned subsidiaries, namely Wai Kee (Zens) and Top Horizon.

5. (d) Vast Earn Group Limited is a wholly-owned subsidiary of NWS Service Management Limited (incorporated in the British Virgin Islands).

6. (e) NWS Service Management Limited (incorporated in the British Virgin Islands) is deemed to be interested in the Shares through its interests in its wholly-owned subsidiary, namely Vast Earn Group Limited.

– 20 –

GENERAL INFORMATION

APPENDIX

• (f) NWS Service Management Limited (incorporated in the Cayman Islands) is deemed to be interested in the Shares through its interests in its wholly-owned subsidiaries, namely NWS Service Management Limited (incorporated in the British Virgin Islands) and Vast Earn Group Limited.

• (g) NWS Holdings Limited is deemed to be interested in the Shares through its interests in its wholly-owned subsidiaries, namely NWS Service Management Limited (incorporated in the Cayman Islands), NWS Service Management Limited (incorporated in the British Virgin Islands) and Vast Earn Group Limited.

• (h) New World Development Company Limited is deemed to be interested in the Shares through its interests in more than one-third of the issued share capital of NWS Holdings Limited.

• (i) Chow Tai Fook Enterprises Limited is deemed to be interested in the Shares through its interests in more than one-third of the issued share capital of New World Development Company Limited.

• The number of Shares taken to be interested or to have a long position by Top Horizon includes (i) 422,421,270 Shares; (ii) derivative of 1,500,000,000 convertible preference shares in the capital of the Company, which can be converted into 150,000,000 Shares pursuant to the terms of issue of convertible preference shares; and (iii) a creditor’s put option whereby the creditors of the Company and/or the scheme administrators may, at their sole direction, sell all or part of 20,000,000 Shares to Wai Kee at a price of HK$0.10 per Share exercisable within 90 days after the expiry of two years following completion of the Scheme of Arrangement (as defined in the circular dated 24 February 2004).

• The number of Shares taken to be interested or to have a long position by Wai Kee (Zens) and Wai Kee includes (i) 422,421,275 Shares; (ii) derivative of 1,500,000,000 convertible preference shares in the capital of the Company, which can be converted into 150,000,000 Shares pursuant to the terms of issue of convertible preference share; and (iii) a creditor’s put option whereby the creditors of the Company and/ or the scheme administrators may, at their sole discretion, sell all or part of 20,000,000 Shares to Wai Kee at a price of HK$0.10 per Share exercisable within 90 days after the expiry of two years following completion of the Scheme of Arrangement.

• The number of Shares taken to be interested or to have a short position by Top Horizon, Wai Kee (Zens) and Wai Kee is 71,600,000 Shares. Pursuant to the Staff Share Purchasing Scheme (the “Scheme”) adopted by Wai Kee on 15 March 2004, 71,600,000 purchasing rights granted to eligible participants as defined in the Scheme for acquisition of 71,600,000 Shares remained outstanding.

Other members of the Group

As at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company and save as disclosed in this circular, the persons (other than a Director or chief executive of the Company or a member of the Group) who were directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group were as follows:

Name of subsidiary	Name of shareholder	Percentage of interest held	Percentage of interest held
			(%)
Cheuk Wah Construction	Goldky Industries Limited		40
Engineering Limited
Eastar Construction	Fulight Engineering Limited		20
Engineering Limited
Huge Host Engineering	Downer Mining (Asia) Limited		30
Limited

– 21 –

GENERAL INFORMATION

APPENDIX

Save as disclosed above, so far as known to the Directors, the Directors and chief executive of the Company were not aware that there was any person (other than a Director or chief executive of the Company) who, at the Latest Practicable Date, had an interest or short position in the Shares and 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 who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any other member of the Group, or in any option, in respect of such capital.

3. MATERIAL ADVERSE CHANGES

The Directors are not aware of any material adverse changes in the financial and trading position of the Group since 31 December 2004, the date of which the latest audited financial statements of the Group were made up.

4. COMPETING INTERESTS

None of the Directors and their respective associates have any interests in a business, which competes or may compete with the business of the Group.

5. DIRECTORS’ INTEREST IN ASSETS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2004, the date to which the latest published audited financial statements of the Group were made up.

6. DIRECTORS’ INTERESTS IN CONTRACTS

None of the Directors is materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which is significant in relation to the business of the Group.

7. DIRECTORS’ SERVICE CONTRACTS

Mr. Zen Wei Peu, Derek and Mr. Yu Sai Yen, both Directors, have entered into service contracts with the Company for a term of three years, commencing from 1 May 2004. Mr. Zen and Mr. Yu are entitled to an annual salary of HK$2.5 million and HK$2.04 million, respectively. Mr. Yu is also entitled to a discretionary bonus under the profit sharing scheme of the Company, life insurance benefit, and the Group’s medical insurance scheme and mandatory provident fund scheme.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group (excluding contracts expiring or determinable within one year without payment of compensation other than statutory compensation).

– 22 –

GENERAL INFORMATION

APPENDIX

8. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or claim of material importance and, so far as the Directors were aware, no litigation or claims of material importance were pending or threatened by or against any member of the Group.

9. EXPERT’S QUALIFICATION AND CONSENT

AMS has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

The following is the qualification of the expert who has given its opinion or advice which is contained in this circular:

Name Qualification AMS a licensed corporation to conduct types 4 (advising on securities), 6 (advising on corporate finance) and 9 (asset management) regulated activities under the SFO

10. EXPERT’S INTERESTS

As at the Latest Practicable Date, AMS did not have any direct or indirect interest in any asset which had been acquired, or dispose of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group, since 31 December 2004, the date to which the latest published audited financial statements of the Group were made up; and was not beneficially interested in the share capital of any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

11. GENERAL

• (a) The registered office of the Company is situated at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The head office and principal place of business of the Company is situated at Units 1001-1015, 10th Floor, Tower 1, Grand Central Plaza, 138 Shatin Rural Committee Road, Shatin, New Territories, Hong Kong.

• (b) The qualified accountant and company secretary of the Company are Mr. Chang Kam Chuen, Desmond. Mr. Chang is a fellow member of The Hong Kong Institute of Certified Public Accountants and The Association of Chartered Certified Accountants.

• (c) The branch share registrar and transfer office of the Company in Hong Kong is Progressive Registration Limited of Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

– 23 –

GENERAL INFORMATION

APPENDIX

• (d) The English text of this circular shall prevail over the Chinese text in case of any inconsistency.

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business of the Company in Hong Kong at Units 1001-1015, 10th Floor, Tower 1, Grand Central Plaza, 138 Shatin Rural Committee Road, Shatin, New Territories, Hong Kong during normal business hours from the date of this circular up to and including 2 August 2005:

• (a) the memorandum and bye-laws of the Company;

• (b) the service contracts of the Directors referred to in this Appendix;

• (c) the letter from the Independent Board Committee to the Independent Shareholders, the text of which is set out on page 10 of this circular;

• (d) the letter from AMS to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 11 to 16 of this circular;

• (e) the Agreement; and

• (f) the written consent from AMS referred to in the paragraph headed “Expert’s Qualification and Consent” in this Appendix.

– 24 –

NOTICE OF SPECIAL GENERAL MEETING

BuildKing BUILD KING HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 240)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the special general meeting of Build King Holdings Limited (the “ Company ”) will be held at Units 1001-1015, 10th Floor, Tower 1, Grand Central Plaza, 138 Shatin Rural Committee Road, Shatin, New Territories, Hong Kong on Monday, 8 August 2005 at 11:00 a.m. for the purpose of considering, and, if thought fit, pass the following resolution as Ordinary Resolution:

ORDINARY RESOLUTION

“ THAT the agreement dated 28 June 2005 (a copy of which has been produced to this meeting marked “A” and signed by the Chairman of this meeting for identification purpose) entered into between the Sky Excel Investments Limited, a wholly-owned subsidiary of Road King Infrastructure Limited, and Innocity International Limited, a wholly-owned subsidiary of the Company, in relation to the establishment of the joint venture through Value Ahead Limited in the People’s Republic of China (“Agreement”) be and is hereby approved, ratified and confirmed; and THAT any of the directors of the Company be and is hereby authorized to do on behalf of the Company whatever they may consider necessary, desirable or expedient for the purpose of, or in connection with, the implementation and completion of the Agreement and the transactions contemplated therein.”

By Order of the Board Chang Kam Chuen, Desmond Company Secretary

Hong Kong, 19 July 2005

Registered office:

Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal place of business in Hong Kong: Units 1001-1015, 10th Floor Tower 1, Grand Central Plaza 138 Shatin Rural Committee Road Shatin, New Territories Hong Kong

– 25 –

NOTICE OF SPECIAL GENERAL MEETING

Notes:

1. Any member of the Company entitled to attend and vote at the meeting by the above notice shall be entitled to appoint another person as his/her proxy to attend and vote instead of such member. A proxy need not be a member of the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorized in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorized to sign the same.

3. The instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority must be delivered to the office of Progressive Registration Limited, the Company’s branch share registrar in Hong Kong at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong or by way of notice to or in any document accompanying the notice convening the meeting not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposed to vote and in default the instrument of proxy shall not be treated as valid.

4. Delivery of an instrument appointing a proxy shall not preclude a member of the Company from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

5. In the case of joint holders of any share, if more than one of such joint holders be present at any meeting, the vote of the senior who tenders a vote, whether in person, or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register in respect of the joint holding.

6. As at the date of this Notice, the Board comprises Mr. Zen Wei Peu, Derek and Mr. Yu Sai Yen as the executive directors, Mr. David Howard Gem and Dr. Cheng Chi Pang, Leslie as the non-executive directors and Dr. Chow Ming Kuen, Joseph, Mr. Ng Chi Ming, James and Mr. Ho Tai Wai, David as the independent non-executive directors of the Company,

– 26 –