Cheuk Nang (Holdings) Limited — Proxy Solicitation & Information Statement 2003

Dec 15, 2003

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

If you have sold or transferred all your shares in Century Legend (Holdings) Limited, you should at once hand this circular to the purchaser or 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 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.

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CENTURY LEGEND (HOLDINGS) LIMITED 世紀建業（集團）有限公司*

( incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION

12th December, 2003

* For identification purpose only

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
— Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
— The Agreement dated 19th November, 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
— Implication of the Laws of Macau, Hong Kong and the Listing Rules . . . . . . . . . .	7
— Reasons for the Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
— General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix — General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

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DEFINITIONS

In this circular, unless the context otherwise requires, the words and expressions have the following meanings.

• “Acquisition” the acquisition of the Business Interests pursuant to the Agreement

• “Agreement” the sale and purchase agreement dated 19th November, 2003 in relation to the Acquisition

• “Board” the board of Directors “Business Interests” the Vendor’s 5% interests in each of the DH Syndicate and the DEH Syndicate

• “Company” Century Legend (Holdings) Limited, a company incorporated in Bermuda with limited liability, the Shares are listed on the Stock Exchange

• “Completion” completion of the Agreement in accordance with the terms thereof

• “DEH Syndicate” the syndicate comprising the Vendor and other business partners established to carry out the Operation at Diamond Entertainment Hall. For the avoidance of doubt, the DEH Syndicate is not a company incorporated with limited liability

• “DH Syndicate” the syndicate comprising the Vendor and other business partners established to carry out the Operation at Diamond Hall. For the avoidance of doubt, the DH Syndicate is not a company incorporated with limited liability

• “Diamond Entertainment Hall” the gaming facilities provided at the venue known as the Diamond Entertainment Hall located in the premises of the Holiday Inn Macau

“Diamond Hall” the gaming facilities provided at the venue known as the Diamond Hall located in the Lisboa Casino, Macau

• “Directors” the directors of the Company

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DEFINITIONS

“Group”	the Company and its subsidiaries
“Hong Kong”	Hong Kong Special Administrative Region of the
	People’s Republic of China
“Latest Practicable Date”	10th December, 2003 being the latest practicable date
	prior to the printing of this circular for the purpose of
	ascertaining certain information contained in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Macau”	Macau Special Administrative Region of the People’s
	Republic of China
“Model Code”	Model Code for Securities Transactions by Directors of
	Listed Companies contained in the Listing Rules
“Operation”	the junket operation carried out by the DH Syndicate
	and the DEH Syndicate at the Diamond Hall and
	Diamond Entertainment Hall respectively
“Purchaser”	Hong Kong Macau Junket Investments Limited, a
	company incorporated in the British Virgin Islands with
	limited liability
“Share(s)”	ordinary share(s) of HK$0.01 each in the capital of the
	Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$” and “cent(s)”	Hong Kong dollar(s) and Hong Kong cent(s) respectively
“US$”	lawful currency of the United States of America
“MOP”	lawful currency of Macau
“%”	per cent.

In this circular, the exchange rate of HK$7.8 to US$1 and HK$0.97 to MOP1 have been used for reference only.

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LETTER FROM THE BOARD

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CENTURY LEGEND (HOLDINGS) LIMITED 世紀建業（集團）有限公司*

( incorporated in Bermuda with limited liability)

Executive Directors: Tsang Chiu Ching Tsang Chiu Mo Samuel Chu Ming Tak Evans Tania

Independent non-executive Directors: Szeto King Pui Albert Yu Yun Kong Cheung Ka Wai

Registered office: Clarendon House Church Street Hamilton HM 11 Bermuda

Head office and principal place of business in Hong Kong: Room 2708-11, 27th Floor West Tower, Shun Tak Centre 168-200 Connaught Road Central Hong Kong

12th December, 2003

To the shareholders of the Company

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

INTRODUCTION

The Company announced on 24th November, 2003 that, on 19th November, 2003, Hong Kong Macau Junket Investments Limited, a wholly-owned subsidiary of the Company, entered into the Agreement with the Vendor to acquire from him a 5% interest in each of the DH Syndicate and the DEH Syndicate for an aggregate cash consideration of US$1.5 million (or approximately HK$11.7 million). Principal terms of the Agreement and further information as regards the Operation are set out below. The Acquisition constitutes a discloseable transaction of the Company under the Listing Rules.

The purpose of this circular is to provide you with, among other things, further information in relation to the Acquisition.

* For identification purpose only

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LETTER FROM THE BOARD

THE AGREEMENT DATED 19TH NOVEMBER, 2003

Parties to the Agreement

Purchaser:

Hong Kong Macau Junket Investments Limited, a company incorporated in the British Virgin Islands with limited liability and is a wholly-owned subsidiary of the Company. The Purchaser is a special purpose vehicle established for the sole purpose of the Acquisition. The Purchaser has not conducted any business prior to the date of the Agreement, save and except for entering into the Agreement and transactions incidental to the Agreement.

• Vendor: Mr. Ng Kwan

The Vendor, together with other business partners, formed the DH Syndicate and the DEH Syndicate to carry out the Operation at the Diamond Hall and Diamond Entertainment Hall respectively. The Vendor and his business partners are not connected persons of the Company (as defined under the Listing Rules).

Prior to 2nd September, 2003, the Vendor was an indirect substantial shareholder of the Company through his 45% interest in Century Legend Limited, the then controlling shareholder of the Company holding 42.05% of the then issued share capital of the Company. Mr. Tsang Chiu Ching and his brother, Mr. Tsang Chiu Mo Samuel, (both are Directors) each had a 5% interest in Century Legend Limited. On 2nd September, 2003, Century Legend Limited disposed of its entire shareholding in the Company to Barsmark Investments Limited (the “Share Disposal”), which is beneficially owned by Mr. Tsang Chiu Ching, Mr. Tsang Chiu Mo Samuel and their sister.

Neither Mr. Ng Kwan nor the shareholders of Barsmark Investments Limited contemplated the Acquisition at the time of the Share Disposal.

Business Interests acquired

The Vendor had contributed 5% capital to each of the DH Syndicate and the DEH Syndicate and in return he is entitled to share 5% of the profit or loss generated from the relevant Operation.

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LETTER FROM THE BOARD

The casino facilities at the Diamond Hall or the Diamond Entertainment Hall are owned and operated by an independent third party. The DH Syndicate and the DEH Syndicate each has a verbal agreement with the casino operator whereby:

1. the DH Syndicate or the DEH Syndicate (as the case may be) markets and organises trips for the purpose of introducing customers to participate in the gaming activities provided by the casino operator at the Diamond Hall or the Diamond Entertainment Hall (as the case may be) and provides related services in Macau, including food and beverage services, accommodation and traveling arrangements. The costs incurred in providing the above services are borne by the DH Syndicate and the DEH Syndicate;

2. the casino operator is responsible for providing casino facilities at the Diamond Hall or the Diamond Entertainment Hall (as the case may be) and all associated costs; and

3. the operating profit or loss generated from the gaming activities of the customers introduced by the DH Syndicate or the DEH Syndicate (as the case may be) will be shared between the respective casino operator and the DH Syndicate or the DEH Syndicate respectively at an agreed rate.

The Operation does not involve any other gaming related businesses in Hong Kong.

The Directors have reviewed the relevant books and records provided by the Vendor in respect of the Operation for the period from 1st January, 2001 to 31st October, 2003 (the “Relevant Period”) and are satisfied that the terms of the verbal agreement as described above have been practised consistently during the Relevant Period. There is no termination clause under the verbal agreement in respect of the Operation and the Directors at present are not aware of any circumstances which may result in the termination or amendments of the verbal agreement in the near future. Upon the implementation of the Gaming Intermediaries Regulation of Macau (for details please see below), a written agreement will be entered into between the DH Syndicate and the DEH Syndicate respectively with the casino operator in compliance with the requirements of the Gaming Intermediaries Regulation of Macau. It is currently not known when the Gaming Intermediaries Regulation of Macau will be implemented. The Directors are confident that upon the implementation of the relevant laws of Macau, the DH Syndicate and the DEH Syndicate will be able to enter into a respective written agreement with the casino operator with respect to the Operation.

Based on the information provided by the Vendor, the unaudited net profit after tax and extraordinary items attributable to the Business Interests (prepared in accordance with the accounting principles generally accepted in Macau) were approximately HK$1.4 million and HK$1.76 million for the years ended 31st December, 2001 and 2002 respectively. The unaudited net profit after tax and extraordinary items attributable to the Business Interests for the 10 months ended 31st October, 2003 amounted to approximately HK$751,000. No tax arising from the Operation was borne by the DH Syndicate or the DEH Syndicate.

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LETTER FROM THE BOARD

Consideration

The Purchaser will pay US$1.5 million (or approximately HK$11.7 million) to the Vendor as the aggregate consideration for the Business Interests. The consideration was arrived at after arm’s length negotiations between the Vendor and the Purchaser and with reference to the net profit attributable to the Business Interests for the period from 1st January, 2001 to 31st October, 2003 and the capital contribution made by the Vendor to each of the DH Syndicate and the DEH Syndicate. The Operation has no asset other than the capital contribution made by each member of the DH Syndicate or the DEH Syndicate (as the case may be). The consideration represents approximately eight times of the average of the profit after taxation of the Operation for the 2 years ended 31st December, 2002 and the annualised profit for the 10 months ended 31st October, 2003. The Directors consider that the consideration for the Acquisition is fair and reasonable.

The consideration will be funded by cash reserves of the Group and will be settled in full upon Completion. The Board is of the view that the cash outlay in connection with the Acquisition will not have any adverse effect on the Group’s cashflow.

No financing is required to be provided by members of the DH Syndicate and the DEH Syndicate under the Operation. After Completion, the Company does not intend to provide any financing services to customers under the Operation.

Conditions

The Agreement is subject to the following conditions:

• (i) the Purchaser being satisfied with the result of a due diligence review carried out by it in respect of the assets, liabilities, business, prospect, financial and legal position of the Business Interests; and

• (ii) the Stock Exchange and relevant government authorities or agencies in Hong Kong and Macau not having raised any objection to the Acquisition.

The sale of the Business Interests by the Vendor to the Purchaser does not require the consent or approval of any other members of the DH Syndicate and the DEH Syndicate (as the case may be).

All the above conditions were duly fulfilled and Completion took place on 1st December, 2003.

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LETTER FROM THE BOARD

Other principal terms of the Agreement

It is agreed between the Vendor and the Purchaser that in the event the Purchaser is dissatisfied with any warranties given, and information provided by the Vendor in relation to the Operation, the Purchaser may, within 12 months from the date of Completion, require the Vendor to buy back the Business Interests at a consideration of US$1.5 million (approximately HK$11.7 million) within 14 days upon receipt of the written notice from the Purchaser.

IMPLICATION OF THE LAWS OF MACAU, HONG KONG AND THE LISTING RULES

The Operation is currently being carried out in Macau only. In accordance with the Macau legal opinion obtained by the Company, the DH Syndicate and the DEH Syndicate have the necessary authorisations for carrying out the Operation and those authorisations are valid, subsisting and have not been revoked. In accordance with the Hong Kong legal opinion obtained by the Company, neither the Acquisition nor the Operation in itself constitute an unlawful activity under the laws of Hong Kong, in particular, the Gambling Ordinance (Chapter 148 of the Laws of Hong Kong).

Under current laws of Macau, no license is required for the DH Syndicate and the DEH Syndicate to conduct the Operation. However, after implementation of the licensing process of the Gaming Intermediaries Regulation of Macau (which was enacted in March 2002 but has not been implemented as at the date of this circular), each of the DH Syndicate and the DEH Syndicate as a gaming promoter will be required to obtain a licence. The Company and members of each of the DH Syndicate and the DEH Syndicate are not subject to the licensing requirements under the Gaming Intermediaries Regulation of Macau. The Board is confident that the DH Syndicate and the DEH Syndicate will be qualified for the licensing requirements under the Gaming Intermediaries Regulation of Macau.

The Board confirms that the Purchaser will, and is confident that it can, comply with and will use its reasonable endeavour to procure the Operation to comply with all relevant laws and regulations of Hong Kong and Macau that are in effect from time to time. The Company does not intend to keep its investment in the Operation in the event that the Purchaser or the Operation is not able to comply with all relevant laws and regulations of Hong Kong or Macau that are in effect from time to time. Shareholders should be aware that under the guidelines issued by the Stock Exchange in relation to “gambling activities undertaken by the listing applicant”, should the Purchaser be in breach of any laws or regulations of Macau or Hong Kong, the Stock Exchange may suspend or cancel the listing of the Shares on the Stock Exchange.

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LETTER FROM THE BOARD

REASONS FOR THE ACQUISITION

The Group is principally engaged in, among others, the travel agency business with focus on Hong Kong-Macau ferry ticketing, hotel reservation and sale of customised holiday packages in Hong Kong and Macau. The Acquisition is synergistic to its existing business. It is also in line with the Group strategies to strengthen its core entertainment business by bringing in more value-added services to its customers.

In 2001, there was approximately 10 million visitors to Macau. In the first half of 2002, there were approximately 5.5 million visitors recorded, a satisfactory growth of 9.32%, as compared to the same period in 2001. It is generally expected that the liberalisation of the gaming industry and the committed investment of approximately MOP17.5 billion (approximately HK$17 billion) within ten years by the three licensed casino operators is likely to further stimulate the growth in the tourism and gaming industries in Macau. The Board considers that the Acquisition will enable the Group to position itself to participate in the future growth of the tourism and gaming industry in Macau.

In view of the above, the Board believes that the Acquisition will bring profit contribution to the Group and will enable it to enter into the gaming and entertainment industry which the Board believes has promising prospect. It is also the intention of the Board to allocate more resources in this business sector in the future, should good investment opportunities arise.

GENERAL

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

Yours faithfully,

for and on behalf of the Board of directors of Century Legend (Holdings) Limited Tsang Chiu Mo Samuel

Executive Director

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquires, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date were as follows:

Authorised: HK$ 40,000,000,000 Shares 400,000,000 Issued and fully paid or credited as fully paid: 2,064,960,000 Shares 20,649,600

All the Shares in issue rank pari passu in all respects including all rights as to dividends, voting and return of capital. There has been no change to the authorised and issued share capital of the Company since 31st December, 2002, the date to which the latest published audited consolidated accounts of the Group were made up.

As at the Latest Practicable Date, there was no outstanding option, warrant, or any other securities of the Company convertible into Shares.

3. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) (a) 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 which the Directors or the chief executives were taken or deemed to have under such provisions of the SFO); or (b) which were required,

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GENERAL INFORMATION

APPENDIX

pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code contained in the Listing Rules were as follows:

			% of the issued
	Nature of	Number of	share capital
Name of Director	interests	Shares	(approximate)
Mr Tsang Chiu Ching	beneficial	960,000	0.1%
	corporate	1,078,383,900	52.2%
		(Note)
Mr Tsang Chiu Mo	corporate	1,078,383,900	52.2%
Samuel		(Note)

Note: These Shares are beneficially owned by Barsmark Investments Limited, the issued share capital of which is indirectly beneficially owned as to one-third by each of Mr. Tsang Chiu Mo Samuel, Mr. Tsang Chiu Ching and Ms. Tsang Chiu Yuen Sylvia .

Save as disclosed above, as at the Latest Practicable Date, to the knowledge of the Company, none of the Directors or the chief executives of the Company had or was deemed to have any interests or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) (a) 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 which the Directors and the chief executives were taken or deemed to have under the provisions of the SFO); or (b) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code contained in the Listing Rules.

(b) Interests of substantial Shareholders

As at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, other than a Director or chief executive of the Company, the following persons had interests or short position 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, or, who was, directly or indirectly,

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GENERAL INFORMATION

APPENDIX

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:

Long position

			Number of
Name	Name of company	Capacity	Shares held
Barsmark Investments Limited	The Company	beneficial	1,078,383,900
China Sky Investments	The Company	corporate	1,078,383,900
Limited_(Note)_
Conba Investments Ltd.(Note)	The Company	corporate	1,078,383,900
Sky Shore Limited_(Note)_	The Company	corporate	1,078,383,900
Fortune Ocean Limited_(Note)_	The Company	corporate	1,078,383,900
Ms. Tsang Chiu Yuen	The Company	corporate	1,078,383,900
Sylvia_(Note)_

Note: Barsmark Investments Limited is wholly and beneficially owned by China Sky Investments Limited, the issued share capital of which is beneficially owned as to one-third by each of (i) Conba Investments Ltd. (a company wholly and beneficially owned by Mr. Tsang Chiu Mo Samuel); (ii) Sky Shore Limited (a company wholly and beneficially owned by Ms. Tsang Chiu Yuen Sylvia); and (iii) Fortune Ocean Limited (a company wholly and beneficially owned by Mr. Tsang Chiu Ching).

Save as disclosed above, as at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, other than a Director or chief executive of the Company, no persons had interests or short position 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, 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 meetings of any other member of the Group.

4. LITIGATION

As at the Latest Practicable Date neither the Company nor any of its subsidiaries is engaged in any litigation on arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

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GENERAL INFORMATION

APPENDIX

5. GENERAL

• (i) The Company secretary of the Company is Mr. Szeto King Pui Albert, a partner of Chiu, Szeto & Cheng solicitors and a qualified solicitor in England and Wales and Hong Kong.

• (ii) The registered office of the Company is at Clarendon House, Church Street, Hamilton, HM 11, Bermuda.

• (iii) Hong Kong branch registrars and transfer office is Computershare Hong Kong Investor Services Limited, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (iv) In case of inconsistency, the English text of this circular shall prevail over the Chinese text.

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