Build King Holdings Limited — Proxy Solicitation & Information Statement 2011

Oct 27, 2011

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

R14A.58(3)(b)

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

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.

BUILD KING HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

R14A.59(1)

App1B(1) R13.51A

(Stock Code: 00240)

DISCLOSEABLE AND CONNECTED TRANSACTION

ACQUISITION OF RKI NOTES

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

A letter from the Board is set out on pages 3 to 5 of this circular. A letter of advice from the Independent Financial Adviser (as defi ned herein) to the Independent Board Committee (as defi ned herein) and the Independent Shareholders (as defi ned herein) is set out on pages 8 to 14 of this circular. A letter of the Independent Board Committee is set out on pages 6 to 7 of this circular.

28 October 2011

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . .	6
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15

i

DEFINITIONS

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

• “Acquisition”

the acquisition of the RKI Notes

• “associates” the meaning ascribed to it under the Listing Rules

“Board” the board of Directors “Company” Build King Holdings Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on the main board of the Stock Exchange

“Directors” directors of the Company

• “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

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

“Independent Board Committee” the committee of the Company comprising all Independent Non-executive Directors, namely Dr. Chow Ming Kuen, Joseph, Mr. Ng Chi Ming, James and Mr. Ho Tai Wai, David, established to make recommendation to the Independent Shareholders in respect of the Acquisition

• “Independent Financial Adviser” Veda Capital Limited, a corporation licensed to carry out type or “Veda Capital” 6 (advising on corporate fi nance) regulated activities under the SFO and being the Independent Financial Adviser appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Acquisition

• “Independent Shareholders” Shareholders other than Wai Kee and its associates

• “Latest Practicable Date”

• 24 October 2011, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

“Leader Civil” Leader Civil Engineering Corporation Limited, a company incorporated in Hong Kong with limited liability and a wholly owned subsidiary of the Company

1

DEFINITIONS

“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China
“RKI”	RKI Finance (2010) Limited, a company incorporated in the British
	Virgin Islands with limited liability and a wholly owned subsidiary
	of Road King
“RKI Notes”	US$350 million 9.5% guaranteed senior notes due 2015 issued by
	RKI, and listed on the SGX
“Road King”	Road King Infrastructure Limited, a company incorporated in
	Bermuda with limited liability whose shares are listed on the main
	board of the Stock Exchange and an associate of Wai Kee
“SFO”	the Securities and Futures Ordinance (Cap 571 of the laws of Hong
	Kong)
“SGX”	the Singapore Stock Exchange
“Shares”	ordinary share(s) of HK$0.10 each in the issued share capital of the
	Company
“Shareholder(s)”	the shareholders of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“US$”	US dollars, the lawful currency of the United States of America
“Wai Kee”	Wai Kee Holdings Limited, a company incorporated in Bermuda
	with limited liability, the shares of which are listed on the main
	board of the Stock Exchange and which, as at the Latest Practicable
	Date, holds approximately 51.17% interest in the Company
“%”	per cent.

R2.17(1)

Unless otherwise specifi ed, in this circular, amounts donominated in US$ have been translated for the purpose of illustration only into HK$ at the rate of US$1.00: HK$7.80. No representation is made that any amounts can be or could have been converted at the relevant dates at the above rate or any other rates at all.

2

LETTER FROM THE BOARD

BUILD KING HOLDINGS LIMITED

App1B(1) R13.51A

(Incorporated in Bermuda with limited liability)

(Stock Code: 00240)

Executive Directors: Mr. Zen Wei Peu, Derek (Chairman) Mr. Chang Kam Chuen, Desmond

Non-executive Directors: Mr. David Howard Gem Dr. Cheng Chi Pang, Leslie Mr. Chan Chi Hung, Anthony

Independent Non-executive Directors: Dr. Chow Ming Kuen, Joseph Mr. Ng Chi Ming, James Mr. Ho Tai Wai, David

Registered Offi ce: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal Place of Business in Hong Kong: Units 601-605A, 6th Floor Tower B, Manulife Financial Centre 223 Wai Yip Street Kwun Tong, Kowloon Hong Kong

R2.14

28 October 2011

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

R14A.58 (1)(3)(a)

ACQUISITION OF RKI NOTES

INTRODUCTION

The Company announced that on 28 September 2011, Leader Civil, a wholly-owned subsidiary of the Company, acquired the RKI Notes on market.

The purpose of this circular is to set out details of the Acquisition and to provide you with further information in relation to the Acquisition.

3

LETTER FROM THE BOARD

R14A.59(2)(b) R14A.59(14)

THE ACQUISITION OF RKI NOTES

Date: 28 September 2011 Purchaser: Leader Civil Seller(s): independent third parties trading on the market, as sellers Issuer: RKI Aggregate principal amount of US$2,000,000 (equivalent to approximately HK$15,600,000) RKI Notes acquired: Consideration: US$1,430,000 (equivalent to approximately HK$11,154,000), the whole sum of which was paid by cash on 3 October 2011 Maturity date of the RKI Notes: 21 September 2015 Interest rate: 9.5% per annum, payable semi-annually in arrears

The acquisition of the RKI Notes was funded by internal resources generated from the operations of the Group.

R14A.59(2)(a)

R14A.59(2)(c)

R14A.59(2)(c)

REASONS FOR THE ACQUISITION OF THE RKI NOTES

R14A.59(13)

As the RKI Notes acquired by Leader Civil offer a better return on cash of the Group when compared to the fi xed-term deposit interest rates offered by commercial banks in Hong Kong, the Directors consider that the acquisition of the RKI Notes is on normal commercial terms and the terms of the RKI Notes acquired by Leader Civil are fair and reasonable and are in the interests of the Company and its Shareholders as a whole.

LISTING RULES IMPLICATIONS

The RKI Notes were issued by RKI, a wholly-owned subsidiary of Road King. Both RKI and Road King are associates of a substantial shareholder of the Company, Wai Kee. RKI is therefore a connected person of the Company under Rule 14A.11(4) of the Listing Rules.

Although the RKI Notes were acquired on market from independent third parties, no part of the consideration was paid to or received by RKI or Road King, and neither RKI nor Road King were parties to the transaction or have entered into any agreement with the Company or its wholly-owned subsidiary that acquired the RKI Notes to vary the terms thereof, the Stock Exchange has nevertheless taken the view that the Acquisition constitutes fi nancial assistance to RKI under Rule 14A.13(2) of the Listing Rules.

R14A.59(2)(d)

R14A.59(2)(f)

4

LETTER FROM THE BOARD

As a result of such analysis, and as the applicable percentage ratio (as defi ned in the Listing Rules) in respect of the Acquisition exceeds 5% but is less than 25%, the Acquisition is a discloseable and connected transaction for the Company and is subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. The percentage ratio relating to the Acquisition requires that the Acquisition be subject to the approval of the Shareholders other than Wai Kee and its associates, which are required to abstain from voting on the transaction. However, as the Acquisition has already been effected and completed on market (and therefore cannot be reversed), the Company does not propose to convene a special general meeting to approve the Acquisition.

R14A.59(5) R2.17(a)

INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising Dr. Chow Ming Kuen, Joseph, Mr. Ng Chi Ming, James and Mr. Ho Tai Wai, David has been formed to advise the Independent Shareholders in respect of the Acquisition. Veda Capital has been appointed as the Independent Financial Adviser for the purpose of advising the Independent Board Committee and the Independent Shareholders in respect of the Acquisition.

GENERAL

The Company is an investment holding company and its group companies are principally engaged in the undertaking of construction projects in Hong Kong, the PRC and the Middle East, and is also engaged in environmental and waste management and marine engineering.

R14A.59(18)

None of the Directors have a material interest in the Acquisition.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendix to this circular.

RECOMMENDATION

As the Acquisition was made at market price from independent third parties, the Directors (including the Independent Non-executive Directors) consider that the Acquisition was fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and its shareholders as a whole.

Yours faithfully, By Order of the Board Build King Holdings Limited Chang Kam Chuen, Desmond Company Secretary

5

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

R14A.58(3)(c) R14A.59(7)

The following is the text of a letter from the Independent Board Committee, which has been prepared for the purpose of incorporation into this circular, setting out its recommendation to the Independent Shareholders in relation to the Acquisition as set out in the Circular.

BUILD KING HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 00240)

DISCLOSEABLE AND CONNECTED TRANSACTION

ACQUISITION OF RKI NOTES

28 October 2011

To the Independent Shareholders

Dear Sir or Madam,

We refer to the circular issued by Company to the Shareholders dated 28 October 2011 (the “Circular”) of which this letter forms part. Terms defi ned in the Circular shall have the same meanings in this letter unless the context otherwise requires.

We have been appointed as the Independent Board Committee to consider and to advise you on the Acquisition as set out in the Circular, and as to the fairness and reasonableness of the Acquisition. Veda Capital has been appointed as the Independent Financial Adviser to advise you and us in this regard. Details of the independent advice of the Independent Financial Adviser, together with the principal factors and reasons the Independent Financial Adviser has taken into consideration, are set out on pages 8 to 14 of the Circular.

RECOMMENDATION

We wish to draw your attention to the letter from the Board and the letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders which contains its advice to us in relation to the Acquisition.

6

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account principal factors and reasons considered by and the opinion of the Independent Financial Adviser as stated in its letter of advice, we consider that the Acquisition, which constitutes a discloseable and connected transaction of the Company, as set out in the Circular, to be fair and reasonable so far as the interests of the Independent Shareholders are concerned and to be in the interests of the Company and the Shareholders as a whole.

Yours faithfully,

For and on behalf of Independent Board Committee of Build King Holdings Limited Chow Ming Kuen, Joseph Ng Chi Ming, James Ho Tai Wai, David Independent Non-executive Directors

7

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

R14A.58(3)(d) R14A.59(8) App1B 5(3)

The following is the full text of the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, which has been prepared for the purpose of incorporation into this circular, setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition.

Veda Capital Limited Suite 3214, 32/F., COSCO Tower 183 Queen’s Road Central, Hong Kong

28 October 2011

To the Independent Board Committee and the Independent Shareholders of Build King Holdings Limited

Dear Madam/Sir,

DISCLOSEABLE AND CONNECTED TRANSACTION

ACQUISITION OF RKI NOTES

INTRODUCTION

We refer to our appointment as the independent fi nancial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular (the “ Circular ”) dated 28 October 2011 issued by the Company, of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defi ned in the Circular unless the context requires otherwise.

On 28 September 2011, the Company, through its wholly owned subsidiary, acquired RKI Notes in the aggregate principal amount of US$2,000,000 (equivalent to approximately HK$15,600,000) at the consideration of US$1,430,000 (equivalent to approximately HK$11,154,000) (the “ Consideration ”) on the market.

The Acquisition constitutes fi nancial assistance to a connected person of the Company under Rule 14A.13(2) of the Listing Rules, therefore it constitutes a discloseable and connected transaction for the Company and is subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. However, as the Acquisition has already been effected and completed on market (and therefore cannot be reversed), the Company does not propose to convene a special general meeting to approve the Acquisition.

The Independent Board Committee (comprising all the independent non-executive Directors) has been established to advise the Independent Shareholders in respect of the Acquisition. Veda Capital has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders as to (i) whether the terms of the Acquisition are on normal commercial terms, and fair and reasonable so far as the Independent Shareholders are concerned; and (ii) whether the Acquisition is in the interests of the Company and the Independent Shareholders as a whole.

8

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR ADVICE

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained in the Circular and the information and representations provided to us by the Company, Directors and management of the Company. We have no reason to believe that any information and representations relied on by us in forming our opinion is untrue, inaccurate or misleading, nor are we aware of any material facts the omission of which would render the information provided and the representations made to us untrue, inaccurate or misleading. We have assumed that all information, representations and opinions contained or referred to in the Circular, which have been provided by the Company, Directors and management of the Company and for which they are solely and wholly responsible, were true and accurate at the time when they were made and continue to be true at the date of the Circular.

We have no reason to believe that any information and representations relied on by us in forming our opinion is untrue, inaccurate or misleading, nor are we aware of any material facts the omission of which would render the information provided and the representations made to us untrue, inaccurate or misleading. We have not, however, conducted any independent in-depth investigation into the business affairs, fi nancial position or future prospects of the Group, nor have we carried out any independent verifi cation of the information provided by the Directors and management of the Company.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendations to the Independent Board Committee and the Independent Shareholders, we have taken into consideration the following principal factors and reasons. Our conclusions are based on the results of all analyses taken as a whole.

A. HISTORICAL FINANCIAL PERFORMANCE OF THE GROUP

• (i) Financial year ended 31 December 2010

According to the annual report 2010 of the Company, for the year ended 31 December 2010, the Group recorded revenue, including the share of jointly controlled entities, of approximately HK$914.97 million, representing a decrease of approximately 11.61% from that for the year ended 31 December 2009 of approximately HK$1,035.14 million. As advised by the Company, the decrease in revenue was mainly attributable to the temporary reduction of marine projects available in the United Arab Emirates. The Group reported profi t attributable to Shareholders of approximately HK$29.15 million for the year ended 31 December 2010, representing a decrease in profi t of approximately 54.64% from that for the previous year of approximately HK$64.26 million. As advised by the Company, the decrease in profi t was mainly attributable to (i) the decrease in revenue; (ii) the new projects secured being generally of high contract value with longer contract periods but still at an early stage of construction during the year 2010 and therefore did not contribute meaningful profi ts; and (iii) the Group employing substantial overhead resources for tendering activities and in developing future business during the year 2010.

9

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

• (ii) Six months ended 30 June 2011

According to the interim report 2011 of the Company (“ IR 2011 ”), for the six months ended 30 June 2011, the Group recorded revenue, including the share of jointly controlled entities, of approximately HK$676.16 million, representing an increase of approximately 56.62% from that for the six months ended 30 June 2010 of approximately HK$431.72 million. As advised by the Company, the increase in revenue was mainly because the major projects awarded in 2010 had become more advanced and therefore contributed to the growth in turnover for the period of six months ended 30 June 2011. As set out in the IR 2011, the Group reported profi t attributable to Shareholders of approximately HK$16.70 million for the six months ended 30 June 2011, representing a decrease in profi t of approximately 31.25% from that for the six months ended 30 June 2010 of approximately HK$24.29 million. As advised by the Company, such decrease in profi t was mainly due to (i) decrease in other income; (ii) the Group recording an increase in fair value of held-for-trading investments of approximately HK$1.03 million for the six months ended 30 June 2010 whilst the Group recorded a decrease in fair value of held-for-trading investments of approximately HK$5.32 million for the six months ended 30 June 2011; and (iii) decrease in the share of results of jointly controlled entities in the United Arab Emirates.

B. REASONS FOR THE ACQUISITION

The Company is an investment holding company and its group companies are principally engaged in the undertaking of construction projects in Hong Kong, the PRC and the Middle East and is also engaged in environmental and waste management and marine engineering.

As set out in the Board Letter, as the RKI Notes acquired by Leader Civil offer a better return on cash of the Group when compared to the fi xed-term deposit interest rates offered by commercial banks in Hong Kong, the Directors consider that the acquisition of the RKI Notes is on normal commercial terms and the terms of the RKI Notes acquired by Leader Civil are fair and reasonable and are in the interests of the Company and Shareholders as a whole.

As noted from the IR 2011, the Group recorded bank balances and cash of approximately HK$50.70 million, bank loans due within one year of approximately HK$14.57 million and net current assets of approximately HK$92.59 million as at 30 June 2011. Also as set out in the IR 2011, the Group recorded current assets and current liabilities of approximately HK$463.94 million and approximately HK$371.36 million respectively as at 30 June 2011. On such basis, the current ratio (defi ned as current assets divided by current liabilities) of the Group was approximately 1.25.

We have also noted from the website of The Hongkong and Shanghai Banking Corporation Limited that the US Dollar deposit rate for US$500,000 or above for a 12-month period was 0.20% as at the Latest Practicable Date.

10

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered that (i) the interest income generated from the RKI Notes will enhance the income of the Group; (ii) the interest rate of the RKI Notes is higher than the abovementioned US Dollar deposit rate as quoted by The Hongkong and Shanghai Banking Corporation Limited and hence the RKI Notes have a higher return as compared to the deposit rate in commercial banks in Hong Kong; and (iii) the Group acquired the RKI Notes on market from independent third parties, we consider the Acquisition is on normal commercial terms, fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

C. THE CONSIDERATION

The Group acquired the RKI Notes on market at the consideration of US$1,430,000 (equivalent to approximately HK$11,154,000) on 28 September 2011. According to Bloomberg, the RKI Notes has a yield to maturity (the “ YTM ”) of approximately 22.10% on 28 September 2011. We also noted from a weekly trading report of ING dated 3 October 2011, the RKI Notes were rated as BB- by both Standard & Poor’s (“ S&P ”) and Fitch Group (“ Fitch ”).

In order to assess the fairness and reasonableness of the YTM of RKI Notes, we have looked into the YTM on 28 September 2011 (or the latest available YTM before 28 September 2011) of listed bonds, which were issued by companies listed on the Stock Exchange during the year 2011 (i) with principal activities similar to those of Road King (which is principally engaged in investment in, development, operation and management of toll roads and expressways and operating property development business); and (ii) with ratings given by either S&P or Fitch which fall within the range from B- to BB+ (the “ Criteria ”). To the best of our knowledge, we have identifi ed 2 listed bonds issued by listed companies in Hong Kong which fulfi lled the above Criteria. Given the small sample size under the Criteria, we have also included listed bonds issued by companies listed in the Stock Exchange during the year 2011 with ratings given by either S&P or Fitch fall within the range from B- to BB+ (the “ Comparables ”). As the Comparables are either engaged in similar principal activities as Road King and/or have similar ratings as the RKI Notes, we consider the Comparables are fair and representative samples. Details of the Comparables are summarised in the following table:

Issuer		Exchange of		Maturity		S&P/Fitch
(stock code)	Principal business	listed bonds	Coupon	(years)	YTM	ratings
			(%)		(%)
CITIC Pacif c	Power generation,	Stock	6.625	10	8.78	BB+/NR
Limited	aviation, civil	Exchange
(267)	infrastructure and
	communications,
	manufacturing
	of special steel,
	property investment
	and development,
	and distribution of
	motor vehicles and
	consumer products

11

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Issuer		Exchange of		Maturity		S&P/Fitch
(stock code)	Principal business	listed bonds	Coupon	(years)	YTM	ratings
			(%)		(%)
China Power	Develop, construct,	Stock	2.250	5	3.82	NA/BBe
International	own, operate and	Exchange
Development	manage large power
Limited	plants in China, and
(2380)	engage in investment
	holdings
Intime Department	Operation and	Stock	4.650	3	5.78_(Note 1)_	BB-/BB
Store (Group)	management of	Exchange
Co. Limited	department stores in
(1833)	the PRC
China Shanshui	Produce clinker and	SGX	8.500	5	13.62	BB-/BB-
Cement Group	cement in China
Limited
(691)
Minimum			2.250	3	3.82
Maximum			8.500	10	13.62
Mean			5.506	5.75	8.00
RKI Notes		SGX	9.500	5_(Note 2_)	22.10	BB-/BB-
Source: Bloomberg
Notes:

1. The YTM of this Comparable was not available on 28 September 2011. As such the latest available YTM of this Comparable on 26 September 2011 was set out in the above table.

2. The RKI Notes were issued on 21 September 2010 and were acquired by the Group on market on 28 September 2011.

As shown in the above table, the YTM of the RKI Notes is above the range of the Comparables. In light of the above and that the RKI Notes was acquired by the Group on market at the market price from independent third parties, we consider the Consideration is on normal and commercial terms, fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

12

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

D. THE RKI NOTES

As noted from the announcement dated 14 September 2010 of Road King (the “ RK Announcement ”), each of Road King and certain of its subsidiaries (details description of those subsidiaries has been set out in the RK Announcement) will jointly and severally guarantee the due and punctual payment obligations of the RKI Notes (the “ Guarantee ”). The initial guarantors will consist of Road King and certain of Road King’s subsidiaries other than its subsidiaries organised under the laws of the PRC and subsidiaries incorporated for fi nancing purposes. In addition, the guarantees to be provided by certain of Road King’s subsidiaries that hold interests in a signifi cant portion of its toll road business (including interests in certain Road King’s expressway projects), will be subordinated to, amongst other things, the guarantees provided by such subsidiaries under a syndicated term loan facility of Road King and its subsidiaries.

Also noted from the RK Announcement, at any time before 21 September 2013, RKI may redeem the RKI Notes, in whole and not in part, at redemption price equal to 100% of their principal amount plus an applicable premium and accrued and unpaid interest, if any, to the redemption date.

At any time and from time to time on or after 21 September 2013, RKI may redeem the RKI Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below, plus accrued and unpaid interest to the redemption date, if redeemed during the 12-month period beginning on 21 September of each of the years indicated below:

Period	Redemption Price
2013	104.750%
2014	102.375%

In addition, at any time prior to 21 September 2013, RKI may redeem up to 35.0% of the principal amount of the RKI Notes using proceeds from certain equity offerings at a redemption price of 109.5% of the principal amount of the RKI Notes plus accrued and unpaid interest, if any, to the redemption date.

As advised by the Company, RKI will be obliged to make an offer to repurchase all the RKI Notes then outstanding at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to (but not including) the date of repurchase in the occurrence of change of control of Road King and a rating decline of the RKI Notes.

Having considered that (i) the repayment obligation of the RKI Notes have been safeguarded by the Guarantee; (ii) the redemption price of the RKI Notes is 100% or above of the principal amount of the RKI Notes plus accrued and unpaid interest; and (iii) RKI will be obliged to make an offer to repurchase all the RKI Notes upon the occurrence of change of control of Road King and a rating decline of the RKI Notes, we consider the Acquisition is fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

13

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

E. POSSIBLE FINANCIAL EFFECTS

• (i) Net asset value

The unaudited consolidated net asset value of the Group was approximately HK$260.03 million as at 30 June 2011. As advised by the Company, there are no material changes to the net asset value of the Group upon completion of the Acquisition.

• (ii) Working capital

As advised by the Company, the working capital of the Group has been decreased by the amount of Consideration of approximately HK$11.15 million upon completion of the Acquisition.

Taking into account that (i) the interest income generated from the RKI Notes will enhance the income of the Group; and (ii) the YTM of RKI Notes is relatively high as compared with the Comparables, we are of the view that the advantages of the Acquisition outweigh such decrease in working capital of the Group given that the Group recorded bank balances and cash of approximately HK$50.70 million as at 30 June 2011, and consider the Acquisition is fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

RECOMMENDATION

Taking into consideration of the above mentioned principal factors and reasons, we consider that the Acquisition is on normal commercial terms and is fair and reasonable so far as the Company and the Independent Shareholders are concerned and the Acquisition is in the interests of the Company and the Independent Shareholders as a whole.

Yours faithfully, For and on behalf of Veda Capital Limited Hans Wong Julisa Fong Chairman Managing Director

14

GENERAL INFORMATION

APPENDIX

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 of giving information with regard to the Company. The Directors having made all reasonable enquiries, confi rm 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.

AppIB(2)

2. DISCLOSURE OF INTERESTS

(I) Directors’ Interests

R14A.59(4) AppIB 38

As at the Latest Practicable Date, the Directors and the chief executive of the Company and their respective associates had the following interests and short positions in the shares, underlying shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO) which were required to be notifi ed to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which any such Director or, chief executive of the Company was taken or deemed to have under such provisions of the SFO) or which were required, 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 Issuers contained in the Listing Rules, to be notifi ed to the Company and the Stock Exchange:

(A) The Company

Interests in Shares

	Capacity/Nature	Number of	Shares held	Percentage of
Name of Director	of interest	Long position	Short position	Shareholding
				(%)
Zen Wei Peu, Derek	Personal	122,675,228	–	9.88
		(Note)
Chang Kam Chuen,	Personal	1,000,000	–	0.08
Desmond		(Note)
David Howard Gem	Personal	500,000	–	0.04
		(Note)
Cheng Chi Pang, Leslie	Personal	1,170,000	–	0.09
		(Note)

Note:

Long position in the Shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds).

15

GENERAL INFORMATION

APPENDIX

(B) Associated corporations

Interests in shares

			Number of shares held	Number of shares held
		Capacity/Nature	Long	Short	Percentage of
Name of Director	Name of company	of interest	position	Position	shareholding
					(%)
Zen Wei Peu, Derek	Wai Kee	Personal	185,557,078	–	23.40
			(Note)
	Wai Kee (Zens) Construction	Personal	2,000,000	–	10.00
	& Transportation Company		(Note)
	Limited
	Wai Luen Stone Products	Personal	30,000	–	37.50
	Limited		(Note)

Note:

Long position in the shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds).

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the chief executive of the Company and their respective associates had any interests or short positions in the shares, underlying shares and/or debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO) which were required to be notifi ed to the Company and the Stock Exchange pursuant to the Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which any such Director or chief executive of the Company was taken or deemed to have under such provisions of the SFO) or which were required, 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 Issuers contained in the Listing Rules, to be notifi ed to the Company and the Stock Exchange.

16

GENERAL INFORMATION

APPENDIX

(II) Substantial Shareholders’ Interests

(A) Interests in the Company

As at the Latest Practicable Date, so far as was known to the Directors or chief executive of the Company, the following persons (“Substantial Shareholders”) (other than the Directors or the chief executive of the Company) 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 provision of Divisions 2 and 3 of Part XV of the SFO:

Name of	Capacity/Nature	Number of Shares held and	Number of Shares held and	percentage of shareholding	percentage of shareholding
Substantial Shareholder	of interest	Long Position		Short Position
		Number of		Number of
		Shares	%	Shares	%
Top Horizon Holdings Limited	Personal/Benef ciary	635,415,033	51.17	–	–
(“Top Horizon”)
(Note (a))
Wai Kee (Zens) Holding Limited	Corporate	635,415,033	51.17	–	–
(“Wai Kee (Zens)”)
(Note (b))
Wai Kee	Corporate	635,415,033	51.17	–	–
(Note (c))
Vast Earn Group Limited	Personal/Benef ciary	67,404,052	5.43	–	–
(Note (d))
NWS Service Management Limited	Corporate	67,404,052	5.43	–	–
(incorporated in the British Virgin
Islands)
(Note (e))
NWS Service Management Limited	Corporate	67,404,052	5.43	–	–
(incorporated in the Cayman Islands)
(Note (f))

17

GENERAL INFORMATION

APPENDIX

(A) Interests in the Company (Continued)

Name of	Capacity/Nature	Number of Shares held and	Number of Shares held and	percentage of shareholding	percentage of shareholding
Substantial Shareholder	of interest	Long Position		Short Position
		Number of		Number of
		Shares	%	Shares	%
NWS Holdings Limited	Corporate	67,404,052	5.43	–	–
(Note (g))
New World Development Company	Corporate	67,404,052	5.43	–	–
Limited
(Note (h))
Chow Tai Fook Enterprises Limited	Corporate	67,404,052	5.43	–	–
(Note (i))
Centennial Success Limited	Corporate	67,404,052	5.43	–	–
(Note (j))
Cheng Yu Tung Family	Corporate	67,404,052	5.43	–	–
(Holdings) Limited
(Note (k))

Notes:

• (a) Top Horizon was a direct wholly owned subsidiary of Wai Kee (Zens).

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

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

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

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

• (f) NWS Service Management Limited (incorporated in the Cayman Islands) was deemed to be interested in the Shares through its interests in its wholly owned subsidiary, namely NWS Service Management Limited (incorporated in the British Virgin Islands).

18

GENERAL INFORMATION

App1B 34

APPENDIX

(A) Interests in the Company (Continued)

• (g) NWS Holdings Limited was deemed to be interested in the Shares through its interests in its wholly owned subsidiary, namely NWS Service Management Limited (incorporated in the Cayman Islands).

• (h) New World Development Company Limited was deemed to be interested in the Shares through its interests in its subsidiary, namely NWS Holdings Limited.

• (i) Chow Tai Fook Enterprises Limited was 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.

• (j) Centennial Success Limited was deemed to be interested in the Shares through its interests in its wholly owned subsidiary, namely Chow Tai Fook Enterprises Limited.

• (k) Cheng Yu Tung Family (Holdings) Limited was deemed to be interested in the Shares through its interests in its subsidiary, namely Centennial Success Limited.

Save as disclosed below, as at the Latest Practicable Date, none of the Directors was a director or employee of a company which had an interest or a 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 interest or Position within Name of Director short position such company Zen Wei Peu, Derek Top Horizon Director Wai Kee (Zens) Director Wai Kee Vice Chairman and Executive Director Cheng Chi Pang, Leslie Wai Kee Non-executive Director

19

GENERAL INFORMATION

APPENDIX

(B) Interests in other members of the Group

As at the Latest Practicable Date, so far as was 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:

		Percentage of
Name of subsidiary	Name of shareholder	interest held
		(%)
Champ Foundation Limited	Talent Ground Limited	49
Cheuk Wah Construction	Goldky Industries Limited	40
Engineering Limited
Eastar Construction Engineering	Fulight Engineering Limited	20
Limited
Huge Host Engineering Limited	Downer Mining (Asia) Limited	30
W K Aviation Engineering	Kencana Capital Ventures	30
Company Limited	Sdn. Bhd.

Save as disclosed above, as at the Latest Practicable Date, the Directors and chief executive of the Company are not aware of any other persons (other than a Director or chief executive of the Company) 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 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 or had any options in respect of such capital.

3. DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

R14A.59(11)

As at Latest Practicable Date, none of the Directors and their respective associates had any interests in a business, which competed or might compete with the business of the Group.

20

GENERAL INFORMATION

APPENDIX

App1B 40(1)

4. DIRECTORS’ SERVICE CONTRACTS

App1B 39

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

5. INTERESTS IN ASSETS AND/OR CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been, since 31 December 2010, 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 Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement which is signifi cant in relation to the business of the Group.

6. MATERIAL ADVERSE CHANGES

App1B 40(2)

App1B 32

The Directors are of the opinion that there has not been any material adverse change in the fi nancial or trading position of the Group since 31 December 2010, being the date to which the latest published audited accounts of the Group were made up.

7. EXPERT AND CONSENT

The following are the qualifi cations of the expert who has given opinions or advice which are contained in this circular:

Name Qualifi cation Veda Capital Limited Independent Financial Adviser. Veda Capital is a corporation licensed to carry out type 6 (advising on corporate fi nance) regulated activities under the SFO

App1B 5(1)(2)

The Independent Financial Adviser has given and has not withdrawn its written consent to the issue of this circular, with the inclusion of its letter as set out in this circular and references to its name in the form and context in which they appear respectively.

21

GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, the Independent Financial Adviser did not have any:

• (i) direct or indirect interest in any assets which have been, since 31 December 2010 (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 Group, or are proposed to be acquired or disposed of by or leased to any member of the Group; and

• (ii) benefi cial interest in the share capital of 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.

8. MISCELLANEOUS

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

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m. (other than Saturdays, Sundays and public holidays) at the principal place of business of the Company in Hong Kong for a period of 14 days from the date of this circular:

App1B 43

• (a) the letter from the Independent Financial Adviser, the text of which is set out on pages 8 to 14 of this circular;

• (b) the letter from the Independent Board Committee, the text of which is set out on pages 6 to 7 of this circular; and

• (c) a copy of this circular.

22