CR Construction Group Holdings Limited — Proxy Solicitation & Information Statement 2005

Aug 24, 2005

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares and options in Chinese People Gas Holdings Company Limited (the “ Company ”), you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale 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, 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.

CHINESE PEOPLE GAS HOLDINGS COMPANY LIMITED 中民燃氣控股有限公司[*]

(incorporated in Bermuda with limited liability)

(stock code: 681)

DISCLOSEABLE TRANSACTIONS

1. ACQUISITION OF A 99% EQUITY INTEREST IN CHONGQING TONG NAN TONGFA GAS CO. LTD.

2. ACQUISITION OF A 70% EQUITY INTEREST IN FU PING NATURAL GAS CO. LTD.

A letter from the board of directors of the Company is set out on pages 3 to 8 of this circular.

24 August, 2005

* For identification only

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	The Chongqing Tong Nan Equity Transfer Contract . . . . . . . . . . . . . . . . . . . . . .	4
3.	The Fu Ping Equity Transfer Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4.	Reasons for the Chongqing Tong Nan Acquisition
	and the Fu Ping Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix	– General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

– i –

DEFINITIONS

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

• “Board”

the board of Directors or a duly authorised committee of the board of Directors

• “Chongqing Tong Nan”

• 重慶市潼南縣通發燃氣有限責任公司 (Chongqing Tong Nan Tongfa Gas Co. Ltd.), a limited liability company established in the PRC which, prior to the Chongqing Tong Nan Acquisition, was owned as to 99% by the Chongqing Tong Nan Vendor and 1% by a PRC party which is an Independent Third Party

• “Chongqing Tong Nan Acquisition”

• the acquisition by the Purchaser from the Chongqing Tong Nan Vendor of a 99% equity interest in Chongqing Tong Nan pursuant to the terms of the Chongqing Tong Nan Equity Transfer Contract

• “Chongqing Tong Nan Equity Transfer Contract”

• the equity transfer contract entered into between the Chongqing Tong Nan Vendor and the Purchaser dated 1 August, 2005 relating to the Chongqing Tong Nan Acquisition

• “Chongqing Tong Nan Vendor”

• Mao Jianping, a PRC citizen and an Independent Third Party

• “Company”

• Chinese People Gas Holdings Company Limited, an exempted company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

• “connected person(s)”

has the meaning ascribed to it under the Listing Rules

• “Directors”

• “Fu Ping”

the directors of the Company

• 富平縣天然氣有限責任公司 (Fu Ping Natural Gas Co. Ltd.), a limited liability company established in the PRC which, prior to the Fu Ping Acquisition, was owned as to 70% by the Fu Ping Vendor, 20% by a PRC party and 10% another PRC party, which are all PRC citizens and Independent Third Parties

• “Fu Ping Acquisition”

• the acquisition by the Purchaser from the Fu Ping Vendor of a 70% equity interest in Fu Ping pursuant to the terms of the Fu Ping Equity Transfer Agreement

• “Fu Ping Equity Transfer Agreement”

the equity transfer agreement entered into between the Fu Ping Vendor and the Purchaser dated 5 August, 2005 relating to the Fu Ping Acquisition

• “Fu Ping Vendor”

• Liu Xuanyu, a PRC citizen and an Independent Third Party

• “Group”

the Company and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China

– 1 –

DEFINITIONS

• “Hong Sen” Main Zhu City Hong Sen Natural Gas Co., Ltd. (綿竹市 紅森天然氣有限責任公司), a limited liability company established in the PRC which is owned as to 99% by the Purchaser and 1% by Yan Ting

• “Independent Third Party(ies)” third party(ies) independent of the Company or any connected person of the Company and are not connected person(s) of the Company

• “Latest Practicable Date” 22 August, 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information included in this circular

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time)

• “Long Teng” Mian Zhu City Long Teng Gas Installation Co. Ltd. (綿 竹市龍騰燃氣安裝有限責任公司 ), a limited liability company established in the PRC which is owned as to 99% by the Purchaser and 1% by Yan Ting

• “Option(s)” options granted under the share option scheme of the Company adopted on 4 April 1997

• “Optionholder(s)” holder(s) of Options

• “PRC” the People’s Republic of China (for the purpose of this circular excluding Hong Kong, the Macau Special Administrative Region and Taiwan)

• “Purchaser” Beijing Zhong Min Gas Co. Ltd. (北京中民燃氣有限 公司 ), a wholly-owned foreign enterprise established in the PRC and a wholly-owned subsidiary of the Company

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

• “Share(s)” share(s) of HK$0.07 each in the share capital of the Company

• “Share Optionholder(s)” holder(s) of the options granted by the Company to subscribe for the Shares in accordance with the terms and conditions of the option certificate, details of which are set out in the circular of the Company dated 31 March 2004

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

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Yan Ting” LongXin (YanTing) Natural Gas Co. Ltd. (鹽亭龍興燃 氣有限責任公司), a limited liability company established in the PRC which is owned as to 99% by the Purchaser

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

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

For the purpose of this circular, the following exchange rate has been used for the conversion of Renminbi into Hong Kong dollars for indication only:

RMB104 = HK$100

– 2 –

LETTER FROM THE BOARD

CHINESE PEOPLE GAS HOLDINGS COMPANY LIMITED 中民燃氣控股有限公司[*]

(incorporated in Bermuda with limited liability)

(stock code: 681)

Executive Directors: Mr. Xu Ruixin Mr. Liu Jing Mr. Mo Shikang Mr. Zhu Peifeng Mr. Zhang Hesheng Mr. Jin Song Mr. Yan Wing Cheung

Independent non-executive Directors: Mr. Liu Junmin Mr. Tan Qinglian Mr. Wong Shing Kay, Oliver

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Head office and principal place of business in Hong Kong: 11th Floor, Nanyang Plaza 57 Hung To Road Kwun Tong Kowloon Hong Kong 24 August, 2005

• To the Shareholders and, for information only, Optionholders and Share Optionholders

Dear Sirs

DISCLOSEABLE TRANSACTIONS

1. ACQUISITION OF A 99% EQUITY INTEREST IN CHONGQING TONG NAN TONGFA GAS CO. LTD. 2. ACQUISITION OF A 70% EQUITY INTEREST IN FU PING NATURAL GAS CO. LTD.

1. INTRODUCTION

It was announced that on 1 August, 2005, the Chongqing Tong Nan Vendor and the Purchaser entered into the Chongqing Tong Nan Equity Transfer Contract whereby the Purchaser agreed to acquire a 99% equity interest in Chongqing Tong Nan from the Chongqing Tong Nan Vendor at a consideration of RMB12,954,500 (approximately HK$12,456,250).

It was also announced that on 5 August, 2005, the Fu Ping Equity Transfer Agreement was entered into between the Fu Ping Vendor and the Purchaser pursuant to which the Purchaser agreed to acquire a 70% equity interest in Fu Ping from the Fu Ping Vendor at a consideration of RMB5,291,000 (approximately HK$5,087,500).

* For identification only

– 3 –

LETTER FROM THE BOARD

Each of the Chongqing Tong Nan Acquisition and the Fu Ping Acquisition constitutes a discloseable transaction for the Company under the Listing Rules.

The principal purpose of this circular is to provide you with further information relating to the Chongqing Tong Nan Acquisition and the Fu Ping Acquisition.

2. THE CHONGQING TONG NAN EQUITY TRANSFER CONTRACT

Date: 1 August, 2005

Parties:

• (i) the Chongqing Tong Nan Vendor (an Independent Third Party)

To the best of the Directors’ knowledge, information and belief having made all reasonable enquires, the Chongqing Tong Nan Vendor is a third party independent of the Company and any connected person of the Company, and not a connected person of the Company. He is also independent of and not connected with the Fu Ping Vendor and his associate(s).

• (ii) the Purchaser (a wholly-owned subsidiary of the Company)

Transfer of equity interests

Pursuant to the Chongqing Tong Nan Equity Transfer Contract, the Purchaser agreed to acquire a 99% equity interest in Chongqing Tong Nan from the Chongqing Tong Nan Vendor at the consideration of RMB12,954,500 (approximately HK$12,456,250).

The consideration for the Chongqing Tong Nan Acquisition was determined by commercial negotiations between the parties on an arm’s length basis having regard to the audited net asset value of Chongqing Tong Nan of approximately RMB10,616,000 (approximately HK$10,208,000) as at 31 December 2004 (based on the audited accounts of Chongqing Tong Nan prepared in accordance with the accounting principles generally accepted in the PRC). The consideration for the Chongqing Tong Nan Acquisition represents a premium of approximately 23.26% to the amount of approximately RMB10,510,000 (approximately HK$10,106,000), representing 99% (being the equity interest in Chongqing Tong Nan being acquired by the Purchaser under the Chongqing Tong Nan Acquisition) of the audited net asset value of Chongqing Tong Nan as at 31 December, 2004 (based on the audited accounts of Chongqing Tong Nan prepared in accordance with the accounting principles generally accepted in the PRC). Pursuant to the Chongqing Tong Nan Equity Transfer Contract, the consideration for the Chongqing Tong Nan Acquisition is payable in cash by the Purchaser within 30 days from the date of the Chongqing Tong Nan Equity Transfer Contract. There is no condition precedent and long stop date in relation to the Chongqing Tong Nan Acquisition. As at the Latest Practicable Date, the Chongqing Tong Nan Acquisition has not been completed. The Chongqing Tong Nan Acquisition will be completed upon the payment of the relevant consideration. The payment for the consideration will be funded by the Group partly out of existing internal cash resources and partly by bank borrowings and/or other means of financing to be arranged which the Group may consider to be appropriate for this purpose.

– 4 –

LETTER FROM THE BOARD

Following the Chongqing Tong Nan Acquisition, Chongqing Tong Nan will be accounted for in the Group’s financial results as a subsidiary of the Company.

Information on Chongqing Tong Nan

Chongqing Tong Nan was established in the PRC on 25 November 1994 as a PRC domestic company. The registered capital of Chongqing Tong Nan is RMB4,080,004 (approximately HK$3,923,000). The registered capital has been fully paid up. Prior to the Chongqing Tong Nan Acquisition, the equity interests in Chongqing Tong Nan was owned as to 99% by the Chongqing Tong Nan Vendor and 1% by a PRC party which is also an Independent Third Party. Such PRC party has agreed to waive its pre-emptive right with respect to the transfer of the relevant equity interests in Chongqing Tong Nan by the Chongqing Tong Nan Vendor. The Company has no current intention to acquire the remaining interest in Chongqing Tong Nan.

Chongqing Tong Nan is principally engaged in the supply and exploration of natural gas and installation of natural gas connection facilities in the PRC. Chongqing Tong Nan currently supplies piped natural gas to over 8,000 residential premises and 350 commercial and industrial premises in the city of Chongqing. It owns 5 natural gas distribution facilities in the city of Chongqing. The major assets of Chongqing Tong Nan comprise of piped connection network, cash receivables, trade and other receivables whilst the major liabilities of Chongqing Tong Nan are bank borrowings and trade and other payables. The table below sets out certain audited financial information on Chongqing Tong Nan (based on the audited accounts of Chongqing Tong Nan prepared in accordance with the accounting principles generally accepted in the PRC) for the two years ended 31 December, 2004:–

	Year ended	Year ended	Year ended	Year ended
	31 December, 2004		31 December, 2003
	RMB’000	HK$’000	RMB’000	HK$’000
Turnover	7,519	7,230	6,606	6,352
Profit before taxation
and extraordinary items	857	824	891	857
Taxation	(150)	(144)	(134)	(129)
Profit after taxation and
extraordinary items	707	680	757	728
Net asset value	10,616	10,208	10,510	10,106

– 5 –

LETTER FROM THE BOARD

3. THE FU PING EQUITY TRANSFER AGREEMENT

Date: 5 August, 2005

Parties:

• (i) the Fu Ping Vendor (an Independent Third Party)

To the best of the Directors’ knowledge, information and belief having made all reasonable enquires, the Fu Ping Vendor is a third party independent of the Company and any connected person of the Company and not a connected person of the Company. He is also independent of and not connected with the Chongqing Tong Nan Vendor and his associate(s).

• (ii) the Purchaser (a wholly-owned subsidiary of the Company)

Transfer of equity interests

Pursuant to the Fu Ping Equity Transfer Agreement, the Purchaser agreed to acquire a 70% equity interest in Fu Ping from the Fu Ping Vendor at the consideration of RMB5,291,000 (approximately HK$5,087,500).

The consideration for the Fu Ping Acquisition was determined by commercial negotiations between the parties on an arm’s length basis having regard to the audited net asset value of Fu Ping of approximately RMB10,888,000 (approximately HK$10,469,000) as at 31 December, 2004 (based on the audited accounts of Fu Ping prepared in accordance with the accounting principles generally accepted in the PRC). The consideration for the Fu Ping Acquisition represents a discount of approximately 30.58% to the amount of approximately RMB7,621,600 (approximately HK$7,328,500), representing 70% (being the equity interest in Fu Ping being acquired by the Purchaser under the Fu Ping Acquisition) of the audited net asset value of Fu Ping as at 31 December, 2004 (based on the audited accounts of Fu Ping prepared in accordance with the accounting principles generally accepted in the PRC). Pursuant to the Fu Ping Equity Transfer Agreement, the consideration for the Fu Ping Acquisition is payable in cash by the Purchaser within 30 days from the date of the Fu Ping Equity Transfer Agreement. There is no condition precedent and long stop date in relation to the Fu Ping Acquisition. As at the Latest Practicable Date, the Fu Ping Acquisition has not been completed. The Fu Ping Acquisition will be completed upon the payment of the relevant consideration. The payment for the consideration will be funded by the Group partly out of existing internal cash resources and partly by bank borrowings and/or other means of financing to be arranged which the Group may consider to be appropriate for this purpose.

Following the Fu Ping Acquisition, Fu Ping will be accounted for in the Group’s financial results as a subsidiary of the Company.

– 6 –

LETTER FROM THE BOARD

Information on Fu Ping

Fu Ping was established in the PRC on 21 July, 2000 as a PRC domestic company. The registered capital of Fu Ping is RMB10,000,000 (approximately HK$9,615,000). The registered capital has been fully paid up. Prior to the Fu Ping Acquisition, the equity interests in Fu Ping were owned as to 70% by the Fu Ping Vendor, 20% by Wu Xuewen and 10% by Cao Xiaogang which are all PRC citizens and Independent Third Parties. Both PRC parties have agreed to waive their respective pre-emptive rights with respect to the transfer of the relevant equity interests in Fu Ping by the Fu Ping Vendor. Following the Fu Ping Acquisition, both of Wu Xuewen and Cao Xiaogang will become connected persons of the Company. The Company has no current intention to acquire the remaining interest in Fu Ping.

Fu Ping is principally engaged in the supply of natural gas and installation of natural gas connection facilities in the PRC. Fu Ping currently supplies piped natural gas to over 1,500 residential households in Shaanxi province. The major assets of Fu Ping comprise piped connection network, cash receivables, trade and other receivables whilst the major liabilities of Fu Ping are bank borrowings and trade and other payables. The table below sets out certain audited financial information on Fu Ping (based on the audited accounts of Fu Ping prepared in accordance with the accounting principles generally accepted in the PRC) for the two years ended 31 December, 2004:–

	Year ended	Year ended	Year ended	Year ended
	31 December, 2004		31 December, 2003
	RMB’000	HK$’000	RMB’000	HK$’000
Turnover	3,034	2,917	1,890	1,817
Loss before and after
taxation and
extraordinary items	(729)	(701)	(377)	(363)
Net asset value	10,888	10,469	9,982	9,598

4. REASONS FOR THE CHONGQING TONG NAN ACQUISITION AND THE FU PING ACQUISITION

The Group is principally engaged in the distribution, supply and installation of piped natural gas business, and the holding and leasing of properties in the PRC. As mentioned in the announcements of the Company dated 3 August, 2005 and 5 August, 2005, the Directors noted that the PRC had historically relied heavily on coal as its primary energy source but the PRC Government in recent years had strongly encouraged the use of other more environmental friendly forms of fuel such as natural gas to combat the pollution and environmental damage caused by coal combustion.

Currently, the Group includes Hong Sen, Long Teng and Yan Ting, which carry out similar types of businesses as Chongqing Tong Nan and Fu Ping. The Directors believe that the Chongqing Tong Nan Acquisition represents an invaluable opportunity for the Group to quicken the pace of its development of this business segment and to allow business synergy of its existing business with the business of Chongqing Tong Nan. The Fu Ping Acquisition

– 7 –

LETTER FROM THE BOARD

provides an opportunity for the Group to further expand its market share in the natural gas industry which the Directors believe has great growth potential in the future. The Group has also conducted due diligence on the financial and operational aspects of each of Chongqing Tong Nan and Fu Ping prior to the signing of the relevant acquisition agreements.

Based on the audited accounts of Chongqing Tong Nan prepared in accordance with the accounting principles generally accepted in PRC as at 31 December 2004 and the potential development of natural gas business in Fu Ping, which is the fourth largest county in Shaanxi, the Chongqing Tong Nan Acquisition and Fu Ping Acquisition will improve the operating performance of the Group. As at 31 March, 2005, the audited consolidated total assets and total liabilities of the Group amounted to approximately HK$260 million and HK$93 million, respectively. Following the the Chongqing Tong Nan Acquisition and the Fu Ping Acquisition, the unaudited total assets and liabilities of the Group would be increased. It is expected that the Chongqing Tong Nan Acquisition and the Fu Ping Acquisition will have positive effect on the earnings of the Group.

The Directors consider that the terms of the Chongqing Tong Nan Equity Transfer Contract and the Fu Ping Equity Transfer Agreement were concluded by the parties after arm’s length negotiations, are fair and reasonable and are on normal commercial terms and the Chongqing Tong Nan Equity Transfer Contract and the Fu Ping Equity Transfer Agreement are in the interests of the Company and its Shareholders as a whole.

Yours faithfully For and on behalf of the Board Mo Shikang

Managing Director and Executive Director

– 8 –

GENERAL INFORMATION

APPENDIX

A. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors 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 the omission of which would make any statement herein misleading.

B. DISCLOSURE OF INTERESTS

• (i) Save as disclosed below, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interest or short position in the Shares, underlying Shares or debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which will have to be notified to the Company and the Stock Exchange pursuant to the provisions under Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions which he would be deemed or taken to have under Sections 344 and 345 of the SFO) or the Model Code for Securities Transactions by Directors of Listed Companies, or which will have to be, pursuant to Section 352 of the SFO, entered in the register referred to herein:

Long positions in the Shares

			Approximate
			percentage of the
		Number	Company’s issued
Name	Capacity	of shares	share capital
Asian Allied Limited	Through a	1,336,798,538	51.13%
(“Asian Allied”)	controlled
(Note 1)	corporation
Super Win	Beneficial owner	1,336,798,538	51.13%
Development Limited
(“Super Win”)
Mr. Yuan Yakang	Beneficial owner	1,386,798,538	53.04%
(Note 2)	and through
	controlled
	corporations
Mr. Mo Shikang	Through controlled	1,336,798,538	51.13%
(Notes 1 and 3)	corporations

– 9 –

GENERAL INFORMATION

APPENDIX

Notes:

1. Asian Allied is interested in the same block of 1,336,798,538 Shares registered under the name of Super Win, its wholly-owned subsidiary.

2. Mr. Yuan Yakang is the beneficial owner of 34.86% of the issued share capital of Asian Allied and is a party acting in concert with it. Pursuant to Part XV of the SFO, Mr. Yuan Yakang is deemed to be interested in the same block of 1,336,798,538 Shares in which Asian Allied has an attributable interest. Mr. Yuan Yakang is the beneficial owner of 50,000,000 Shares in the Company.

3. Mr. Mo Shikang is the beneficial owner of 65.14% of the issued share capital of Asian Allied. Pursuant to the provisions of Part XV of the SFO, Mr. Mo Shikang is deemed to be interested in the same block of 1,336,798,538 Shares in which Asian Allied has an attributable interest.

Long positions in the underlying shares of the Company

		Number of
Name	Capacity	Options	Exercise period
Liu Jing	Beneficial owner	26,000,000	12 October 2005
			to 3 April 2007
Zhu Peifeng	Beneficial owner	2,600,000	12 October 2005
			to 3 April 2007
Zhang Heshang	Beneficial owner	2,600,000	12 October 2005
			to 3 April 2007
Mo Shikang	Beneficial owner	2,600,000	12 October 2005
			to 3 April 2007
Jin Song	Beneficial owner	26,000,000	12 October 2005
			to 3 April 2007

Notes: The exercise price of the Options is HK$0.365 per new share.

• (ii) Save as disclosed below and Section (B)(i) above, the Directors or chief executive of the Company are not aware of any other person who, as at the Latest Practicable Date, had an interest or short position in the Shares or the underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3

– 10 –

GENERAL INFORMATION

APPENDIX

of Part XV of the SFO or who will be interested, directly or indirectly, 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 positions in the Shares or underlying Shares

			Percentage of the
	Capacity and	Number of	Company’s issued
Name of shareholder	nature of interest	share held	share capital
Super Win	Directly beneficially	1,336,798,538	51.13%
	owned_(Note 1)_
Asian Allied	Through a controlled	1,336,798,538	51.13%
	corporation_(Note 1)_
Deson Development	Security interest	1,336,724,256	51.12%
Holdings Limited	(Note 2)
Deson Development	Through a controlled	1,336,724,256	51.12%
International Holdings	corporation_(Note 3)_
Limited (“Deson”)
Sparta Assets Limited	Through controlled	1,336,724,256	51.12%
(“Sparta Assets”)	corporations_(Note 4)_
Mr. Tjia Boen Sien	Through controlled	1,336,724,256	51.12%
	corporations_(Note 5)_

1. Super Win holds 1,336,798,538 Shares of the Company. By virtue of Super Win being a whollyowned subsidiary of Asian Allied, Asian Allied is deemed to be interested in the 1,336,798,538 Shares held by Super Win.

2. By virtue of the provisions of Part XV of the SFO, Deson Development Holdings Limited is deemed to be interested in 1,336,724,256 Shares held by Super Win by virtue of a share mortgage in favour of it.

3. By virtue of the provisions of Part XV of the SFO, Deson, being the holding company of Deson Development Holdings Limited, is deemed to be interested in the same block of 1,336,724,256 Shares in which Deson Development Holdings Limited is interested.

4. Sparta Assets is interested in approximately 45.27% of the entire issued share capital of Deson and is therefore entitled to exercise or control the exercise of one third or more of the voting power at general meetings of Deson. By virtue of the provisions of Part XV of the SFO, Sparta Assets is deemed to be interested in the same block of 1,336,724,256 Shares in which Deson is interested.

5. Sparta Assets, a company incorporated in the British Virgin Islands, is wholly-owned by Mr. Tjia Boen Sien.

– 11 –

GENERAL INFORMATION

APPENDIX

C. COMPETING INTEREST

None of the Directors or their respective associates has, as at the Latest Practicable Date, any an interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

D. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or proposed Directors has entered into any existing or proposed service contracts with the Company or any other member of the Group save for those expiring or determinable by the relevant employer within one year without payment of compensation (other than statutory compensation).

E. MATERIAL LITIGATION

As at the Latest Practicable Date, no member of the Group is engaged in any litigation or claim of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against any member of the Group.

F. GENERAL

• (i) As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement subsisting which is significant to the business of the Group.

• (ii) As at the Latest Practicable Date, none of the Directors has any direct or indirect interests in any assets which had been acquired or disposed of by or leased to any member of the Group since 31 March 2005, being the date to which the latest published audited consolidated financial statements of the Company were made up or proposed to be so acquired, disposed of or leased.

• (iii) Mr. Ong Chi King is the secretary of the Company. Mr. Ong holds a bachelor degree in Business Administration from the Hong Kong University of Science and Technology. He is a fellow of the Association of Chartered Certified Accountants and a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants.

• (iv) Mr. Yan Wing Cheung is the qualified accountant of the Company. Mr. Yan is a qualified accountant and a fellow member of the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants and associate member of the Chartered Institute of Management Accountants.

• (v) The Company’s registered office is at Canon’s Court, 22 Victoria Street, Hamilton, HM12 Bermuda. The principal place of business of the Company in Hong Kong is at 11th Floor, Nanyang Plaza, 57 Hung To Road, Kwun Tong, Kowloon, Hong Kong. The branch share registrar and transfer office of the Company in Hong Kong is Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (vi) The English text of this circular shall prevail over the Chinese text.

– 12 –