Huscoke Holdings Limited - Proxy Solicitation & Information Statement 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Huscoke Resources Holdings Limited, you should at once hand this circular and the enclosed form of proxy to the purchaser(s) or the transferee(s), or to the bank, licensed securities dealer or registered institution or other agent through whom the sale or the transfer was effected for transmission to the purchaser(s) or the transferee(s).

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

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HUSCOKE RESOURCES HOLDINGS LIMITED 和嘉資源控股有限公司

(incorporated in Bermuda with limited liability)

(Stock code: 704)

website: http://www.huscoke.com

(i) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF COKE PROCESSING ASSETS AND

(ii) NOTICE OF SPECIAL GENERAL MEETING

A notice convening the special general meeting to be held at Vinson Room, Pacific Place Conference Centre, 5/F, One Pacific Place, 88 Queensway, Hong Kong at 10:30 a.m. on Monday, 22 February 2010 (or any adjournment thereof) is set out on pages SGM-1 to SGM-3 of this circular. Form of proxy for use in the special general meeting is enclosed. Whether or not you propose to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding of the special general meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting thereof, should you so desire.

29 January 2010

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I — Financial information on the Group. . . . . . . . . . . . . . . . . .	I – 1
Appendix II — Financial information on the acquired
plants and machineries. . . . . . . . . . . . . . . . . . . . . . . . . .	II – 1
Appendix III — Unaudited pro forma financial information
on the Enlarged Group. . . . . . . . . . . . . . . . . . . . . . . . . .	III – 1
Appendix IV — Valuation report on the Coke Processing Assets. . . . . . . .	IV – 1
Appendix V — Valuation report on the Enlarged Group. . . . . . . . . . . . . .	V – 1
Appendix VI — General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VI – 1
Notice of SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	SGM – 1

— i —

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms or expressions shall have the meanings set out below:

“18-Month Promissory Note” the promissory note to be issued at Completion by the Purchaser as part of the Acquisition Price with the maturity date falling on the expiry of 18 months after the day of issue of the note

“36-Month Promissory Note”	the promissory note to be issued at Completion by the
	Purchaser as part of the Acquisition Price with the
	maturity date falling on the expiry of 36 months after the
	day of issue of the note
“Acquisition”	the proposed acquisition of the Coke Processing Assets
	by the Purchaser from the Vendor pursuant to the Sale
	and Purchase Agreement
“Acquisition Price”	initially RMB639.13 million (equivalent to approximately
	HK$726.28 million) (subject to adjustment), being the
	consideration for the Coke Processing Assets under the
	Sale and Purchase Agreement
“Announcement”	the announcement of the Company dated 17 December
	2009 in relation to the Acquisition
“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors
“Business Day”	a day (other than Saturday and Sunday) on which
	licensed banks in Hong Kong are generally open for
	business throughout their normal business hours
“Closing Conditions”	the conditions precedent to Completion as set out in the
	Sale and Purchase Agreement
“Coke Processing Assets”	plant and machineries to be acquired by the Purchaser
	under the Sale and Purchase Agreement
“Company”	Huscoke Resources Holdings Limited和嘉資源控股有限
	公司, a company incorporated in Bermuda with limited
	liability, the Shares of which are listed on the Stock
	Exchange

— 1 —

	DEFINITIONS
“Completion”	the completion of the Acquisition
“connected person(s)”	has the meaning given to that term in the Listing Rules
“Director(s)”	director(s) of the Company
“Enlarged Group”	the Group as enlarged by the Acquisition
“Group”	the Company and its subsidiaries
“HK Valuers”	B.I. Appraisals Limited, an independent valuer appointed
	by the Company to compile the Valuation Reports
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC
“Independent Third Party	third party (parties) independent of the Company and its
(Parties)”	connected persons
“Latest Practicable Date”	27 January 2010, being the latest practicable date
	before the printing of this circular for the purpose of
	ascertaining certain information for inclusion in this
	circular
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Longstop Date”	31 March 2010 or such other date as the Vendor and the
	Purchaser may agree in writing
“PRC”	People’s Republic of China which, for the purpose of
	this circular, excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“Promissory Notes”	the 18-Month Promissory Note and the 36-Month
	Promissory Note

— 2 —

	DEFINITIONS
“Purchaser”	GRG Huscoke (Shan Xi) Ltd.（山西金岩和嘉能源有限
	公司）, an equity joint venture Company with limited
	liability incorporated in the PRC which is beneficially
	owned as to 90% by the Company, 9% by the Vendor and
	1% by an Independent Third Party
“Sale and Purchase	the conditional sale and purchase agreement dated 10
Agreement”	December 2009 entered into between the Vendor and the
	Purchaser in relation to the Acquisition
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“SGM”	the special general meeting to be convened by the
	Company for considering, and if thought fit, approving,
	among other things, the Sale and Purchase Agreement
	and the transactions contemplated thereby
“Share(s)”	ordinary shares of HK$0.10 each in the share capital of
	the Company
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Valuation Reports”	valuation reports dated 29 January 2010 in respect of
	the Coke Processing Assets and the Enlarged Group, the
	text of which are set out in Appendices IV and V to this
	circular, respectively
“Vendor”	孝義市金岩電力煤化工有限公司(Xiaoyi City Golden
	Rock Electricity Coal Chemical Company Limited*)
“Warranties”	the warranties and representations given by the Vendor
	under the Sale and Purchase Agreement
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

— 3 —

DEFINITIONS

“RMB”	Renminbi, the lawful currency of PRC
“%”	per cent.

For illustrative purpose, the conversion rate between HK$ and RMB is at HK$1.00 = RMB0.88.

the unofficial English translation for identification purpose only

— 4 —

LETTER FROM THE BOARD

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HUSCOKE RESOURCES HOLDINGS LIMITED 和嘉資源控股有限公司

(incorporated in Bermuda with limited liability)

(Stock code: 704)

website: http://www.huscoke.com

Executive Directors: Mr. Wu Jixian Mr. Li Baoqi (Acting Chairman) Mr. Chim Kim Lun, Ricky Mr. Cheung Ka Fai

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

Independent Non-executive Directors: Mr. Lam Hoy Lee, Laurie Mr. Wan Hon Keung Mr. To Wing Tim, Paddy

Principal Office in Hong Kong: Room 4205 Far East Finance Center 16 Harcourt Road Admiralty Hong Kong

29 January 2010

To the Shareholders

Dear Sir/Madam,

(i) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF COKE PROCESSING ASSETS AND (ii) NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

On 17 December 2009, the Board announced that on 10 December 2009, the Purchaser and the Vendor entered into the Sale and Purchase Agreement, pursuant to which the Purchaser agreed to acquire from the Vendor the Coke Processing Assets at an initial consideration

— 5 —

LETTER FROM THE BOARD

of approximately RMB639.13 million (equivalent to approximately HK$726.28 million) (subject to adjustment) in accordance with the terms and conditions as set out in the Sale and Purchase Agreement.

The purpose of this circular is to provide you with, amongst other things, (i) further details of the Acquisition and the Promissory Notes; (ii) information required under Chapter 14 of the Listing Rules; (iii) the valuation report of the Coke Processing Assets prepared by the HK Valuers as set out in Appendix IV to this circular; (iv) the valuation report on the Enlarged Group’s properties prepared by the HK Valuers as set out in Appendix V to this circular and (v) a notice of the SGM.

THE SALE AND PURCHASE AGREEMENT

Date: 10 December 2009 (after the trading hours)

Parties:

Vendor : 孝義市金岩電力煤化工有限公司 (Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited*)

Purchaser : GRG Huscoke (Shan Xi) Ltd.（山西金岩和嘉能源有限公司）

The Purchaser is incorporated in the PRC and an indirect 90%-owned subsidiary of the Company. The Vendor is a 9% equity holder of the Purchaser. Save for the above, the Directors confirm that, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Vendor and its ultimate beneficial owners are third parties independent of the Company and its connected persons.

The Vendor is a limited liability company established in the PRC in 1999 and is principally engaged in coal and coke manufacturing and trading and related businesses.

Assets to be acquired

Pursuant to the Sale and Purchase Agreement, the Vendor has agreed to sell and the Purchaser has agreed to purchase the Coke Processing Assets subject to the terms and conditions as set out in the Sale and Purchase Agreement.

The information regarding the Coke Processing Assets is set out in the paragraph headed “Information on the Coke Processing Assets” below.

— 6 —

LETTER FROM THE BOARD

Acquisition Price

Pursuant to the Sale and Purchase Agreement, the Acquisition Price is initially approximately RMB639.13 million (equivalent to approximately HK$726.28 million) and shall be satisfied in the following manner:

(i) 30% of the Acquisition Price by the Purchaser’s issue to the Vendor the 18-Month Promissory Note (i.e. based on the current initial Acquisition Price, the 18-Month Promissory Note will amount to approximately HK$217.9 million);
(ii) 30% of the Acquisition Price by the Purchaser’s issue to the Vendor the 36-Month Promissory Note (i.e. based on the current initial Acquisition Price, the 36-Month Promissory Note will amount to approximately HK$217.9 million); and
(iii) the remaining 40% of the Acquisition Price by way of cash payable within one year after the Completion (i.e. based on the current initial Acquisition Price, HK$290.5 million of cash will be paid to the Vendor).

The Acquisition Price was determined after arm’s length negotiation with reference to the fair value (substantially based on net asset value) of the Coke Processing Assets of approximately RMB620.23 million as at 31 July 2009 based on a valuation report (“ PRC Valuation Report ”) issued by a firm of PRC valuers on 20 October 2009 and other miscellaneous parts, accessories and work-in-progress materials of approximately RMB18.9 million. The PRC valuers were engaged by the Vendor.

The Company has engaged the HK Valuers to conduct an independent valuation on the fair value of the Coke Processing Assets. As stated in the Announcement, in the event that the difference between the fair value of the Coke Processing Assets assessed by the HK Valuer and that stated in the PRC Valuation Report is no more than 5%, the Acquisition Price shall not be adjusted. If the difference is more than 5%, the parties will enter into discussion with a view to adjusting the Acquisition Price to reflect the fair value of the Coke Processing Assets. As set out in the valuation report on the Coke Processing Assets in Appendix IV to this circular, the market value of the Coke Processing Assets as at 31 December 2009 was RMB644.1 million. As the difference between the market value of the Coke Processing Assets assessed by the HK Valuer is within 5% of the amount of the Coke Processing Assets stated in the PRC valuation Report, no adjustment will be made to the Acquisition Price.

Given that the Acquisition Price is determined (and, if necessary, adjusted) with reference to the fair value of the Coke Processing Assets, the Directors (including the independent non-executive Directors) consider that the Acquisition Price to be fair and reasonable and in the interests of the Company and the Shareholders as a whole.

— 7 —

LETTER FROM THE BOARD

Closing Conditions

Completion is subject to the following conditions being fulfilled and remaining satisfied at the Completion (or, where applicable, waived by the Purchaser pursuant to the Sale and Purchase Agreement):

(a) compliance by the Company of (or, as the case may be, obtaining of waiver from) requirements under the Listing Rules as may be applicable in connection with the Sale and Purchase Agreement and the transactions contemplated thereby;
(b) the passing by the Shareholders (or, as the case may be, the independent Shareholders) in general meeting of the necessary resolutions for approving the Sale and Purchase Agreement and the transactions contemplated thereby;
(c) (if required) all requisite waivers, consents and approvals from any relevant governmental or regulatory authorities or other relevant third parties in connection with the Acquisition contemplated by the Sale and Purchase Agreement having been obtained by the Purchaser, Vendor and the Company;
(d) the Purchaser being reasonably satisfied with the results of the due diligence exercise (whether legal, accounting, financial, operational or other aspects that the Purchaser, its agents or professional advisers consider necessary or relevant to conduct) on the Coke Processing Assets, its operation and legal status;
(e) the Purchaser being satisfied that, from the date of the Sale and Purchase Agreement and at any time before the Completion, the Warranties given by the Vendor under the Sale and Purchase Agreement remain true and accurate and not misleading nor being in breach in any material respect and that no events have suggested that there were any breaches of the Warranties or other provisions of the Sale and Purchase Agreement by the Vendor; and there are no improper operation, or any material adverse change or any undisclosed risk on the business or other transaction aspects or status (including assets, financial and legal status), operation and performance on Coke Processing Assets;
(f) fund-raising exercise or debt financing being effected by the Purchaser or its affiliated companies in the PRC (including Hong Kong) for the payment of the 40% of the Acquisition Price payable by way of cash within one year after the Completion (Note); and

— 8 —

LETTER FROM THE BOARD

(g) the delivery to the Purchaser of a PRC legal opinion (in form and substance satisfactory to the Purchaser) from a PRC legal adviser and such PRC legal opinion shall cover the legality of the Sale and Purchase Agreement and the transactions contemplated thereby under the PRC law; the validity of the legal titles of the Coke Processing Assets and the conduct of business in connection with the Coke Processing Assets having been approved and registered in the relevant authorities.

The Purchaser may at its absolute discretion at any time waive in writing any of the Closing Conditions referred to in (c), (d), (e), (f) and (g) above (to the extent it is capable of waiving) and such waiver may be made subject to such terms and conditions as are determined by the Purchaser. The Closing Conditions referred to in (a) and (b) above cannot be waived by the parties to the Sale and Purchase Agreement.

If the Closing Conditions are not wholly fulfilled (or, as the case may be, waived by the Purchaser save for conditions (a) or (b) which are not waivable) on the Longstop Date, the Sale and Purchase Agreement shall cease and terminate and none of the parties to the Sale and Purchase Agreement shall have any obligations and liabilities thereunder save for any antecedent breaches.

Note: As at the Latest Practicable Date, the Directors intend to finance such cash payment by debt financing methods (including but not limited to bank loans). In view of (i) the steady sources of income provided by the Group’s existing coke trading and coal related ancillary businesses; and (ii) the track record of the coke processing business (see the paragraph headed “Information on the Coke Processing Assets”), the Directors also intend to settle the Promissory Notes by the Group’s internal resources.

Completion

Subject to the satisfaction or (where applicable) waiver of the Closing Conditions, Completion shall take place at 10:00 a.m. (Hong Kong time) on the third Business Day following the date on which the last Closing Condition is fulfilled or (where applicable) waived (or at such other time and/or date as the Vendor and the Purchaser may agree).

PROMISSORY NOTES

The principal terms of the Promissory Notes are as follows:

Issuer: The Purchaser

Maturity: 30% of the Acquisition Price will be on the expiry of 18 months from the date of issue of the 18-Month Promissory Note (i.e. the date of Completion)

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LETTER FROM THE BOARD

30% of the Acquisition Price will be on the expiry of 36 months from the date of issue of the 36-Month Promissory Note (i.e. the date of Completion)

Transferability: The Promissory Notes are transferable Coupon rate: Zero Security: No security will be provided by the Purchaser (as issuer of the Promissory Notes) in respect of its obligations under the Promissory Notes

Repayment: At the sole discretion of the Purchaser, the Promissory Notes or such part thereof may be repaid prior to maturity. Otherwise, payment of principal amount of Promissory Notes shall be made upon their respective dates of maturity.

INFORMATION ON THE COKE PROCESSING ASSETS

The Coke Processing Assets, which include coke ovens and coking coal towers, are located in Xiaoyi City, Shangxi, the PRC. At present, the Coke Processing Assets are being operated by approximately 440 staff with an annual production capacity of 800,000 tons of coke.

Under the Sale and Purchase Agreement, it does not provide nor contemplate that the Vendor will transfer to the Purchaser any of its existing customers, suppliers and/or any staff or personnel relating the Coke Processing Assets or any contractual rights made with such existing customers, suppliers and/or staff or personnel. It is expected that a majority of the existing personnel of the coke processing business may be retained for the daily operation, and where appropriate, suitable new personnel will be recruited. The Company may also invite person(s) who has substantial experience in coke processing business to join the Board to participate in the management of the newly acquired business.

The Coke Processing Assets are stated at cost less accumulated depreciation and any accumulated impairment losses in accordance with accounting principles generally accepted in Hong Kong.

Depreciation is provided to write off the cost of the Coke Processing Assets over their estimated useful lives and after taking into account of their estimated residual value, using the straight line method.

— 10 —

LETTER FROM THE BOARD

Based on the unaudited financial information provided by the Vendor, the unaudited net profit before tax and extraordinary items attributable to the Coke Processing Assets for the year ended 31 December 2007 and 2008 were approximately RMB131 million and RMB248 million. For the year ended 31 December 2007 and 2008, the unaudited net profit after tax and extraordinary items attributable to the Coke Processing Assets were approximately RMB88 million and RMB186 million. The valuation of the Coke Processing Assets amounted to approximately RMB644.1 million as at 31 December 2009. The details of financial information on the Coke Processing Assets are set out in Appendix II to this circular.

According to the valuation report on the Coke Processing Assets set out in Appendix IV to this circular, the HK Valuers have not been provided by the Company with copies of title documents relating to the buildings and structures for the fixed assets held by the Vendor (“ Buildings ”). In the course of their valuation, they have relied on the advice given by the Vendor regarding the title to the Buildings and the legal opinion (“ PRC Legal Opinion ”) prepared by 山西晉義律師事務所 (Shanxi Jin Yi Law Firm), the Group’s legal advisor on PRC law, regarding the title to and the interest of the Vendor in the Buildings.

Major contents of the PRC Legal Opinion dated 25 January 2010 is summarized as follows:

(a) As the Buildings were built by the Vendor, the ownership of the Buildings is naturally vested in the Vendor and there is no dispute with other third party in such ownership.
(b) Though the Vendor has not yet registered the ownership of the Buildings, protection of its ownership under the PRC law is not prejudiced.
(c) The Buildings are free from any third party rights and are not distrained upon by any judicial and arbitration authorities nor being subject to administrative penalty from local government on such reason as illegal construction. There is no limitation in the right to use the Buildings.
(d) According to Article 68 of《中華人民共和國物權法》(Law on Property Rights of the PRC), which states that “Business enterprise enjoys, in accordance with the law and administrative regulations, the rights to occupy, use, make profit and dispose of its current and fixed assets”, the Vendor has the right to transfer to the Purchaser the Buildings.

— 11 —

LETTER FROM THE BOARD

Apart from the PRC Legal Opinion, to verify the legality for the ownership and transfer of the Building, the representatives of the Purchaser have visited the 孝義市國土資源局 (Xiaoyi City Land and Resources Bureau) (“ Bureau* ”) to discuss the legality for such transfer. The official of the Bureau stated clearly that it is the common practice for those Shanxi corporations to own the buildings on rented land. As the original builder of the Buildings, the Vendor has their legal right to use or sell the Buildings and their rights are protected by the PRC legislation.

Also, for the proposed Acquisition of the Coke Processing Assets, the Vendor has applied for the approval from the 山西省發展和改革委員會 (Shanxi Development and Reform Commission) (“ Commission ”). Pursuant to its approval document dated 23 November 2009, the transfer of the related asset from the Vendor to the Purchaser, including but not limited to the Buildings, has been approved by the Commission.

Taken into consideration (i) the oral confirmation made by the official of the Bureau; (ii) the approval document issued by the Commission and (iii) the PRC Legal Opinion, the Directors of the Company considered that the transfer of the ownership of the Buildings is legal and protected by the PRC laws.

REASONS FOR THE ACQUISITION

The Group is principally engaged in coke trading and coal related ancillary businesses.

In 2008, the Group completed the acquisitions of two businesses, i.e. the coke trading and the coal related ancillary businesses on 16 May 2008 and 31 October 2008 respectively. These two businesses accounted for the Group’s revenue for the financial year ended 31 December 2008 by approximately HK$676.3 million and HK$217.4 million, respectively.

On 13 May 2008, the Company announced the entering into of an agreement for the acquisition of a company which intended to own certain coke processing assets of 800,000 tons which was then proposed to be acquired from a connected person of the Company at a consideration of HK$2,400 million (“Previous Acquisition”). Such coke processing assets were substantially identical to those of the Coke Processing Assets. The consideration of the Previous Acquisition was determined based on, among other factors, the price earnings multiple of 8 times and the profit guarantee of HK$300 million given by such connected person of the Company. On 2 February 2009, the Company announced that the Previous Acquisition lapsed due to failure of satisfaction or waiver of some of the closing conditions (including the obtaining of the operating licenses by one of the previous target companies and the receipt of a legal opinion on the PRC laws) by the long stop date in respect of the Previous Acquisition. In view of the uncertainty on the economic downturn

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LETTER FROM THE BOARD

in early 2009 and the substantial amount of the consideration for the Previous Acquisition, the Board considered that the lapse of the Previous Acquisition was in the interest of the Company and its Shareholders as a whole.

The end product of the Group’s coal related ancillary business is the refined coal which is the raw material of the coke processing business. The end product of the coke processing business is coke. Therefore, the Board considers that the coke processing business, being the upstream of the Group’s coke trading business and downstream of the coal-related ancillary business, will enable the Group to complete its coal business operations. Besides, the vertical integration of the coke processing business will enable the Group to have synergy to the trading of coke business engaged by the Group. Based on the above reason and the Acquisition Price is determined based on the fair value of the Coke Processing Assets (currently based on substantially net asset value), the Board are of the view that the Acquisition is fair and reasonable and in the interests of the Company and its Shareholders as a whole.

FINANCIAL EFFECTS OF THE ACQUISITION ON THE GROUP

Loss

The Group recorded an audited consolidated loss attributable to the equity holders of the Company of approximately HK$1,858.2 million for the year ended 31 December 2008. According to the unaudited pro forma consolidated income statement of the Enlarged Group set out in Appendix III to this circular, the unaudited consolidated loss attributable to the equity holders of the Enlarged Group would be approximately HK$1,700.6 million after the completion of Acquisition.

Assets

As at 30 June 2009, the unaudited total assets of the Group were approximately HK$2,809.5 million. As set out in the unaudited pro forma consolidated statement of financial position of the Enlarged Group set out in Appendix III to this circular, the unaudited pro forma total assets of the Enlarged Group would be increased by approximately HK$679.8 million to approximately HK$3,489.3 million.

Liabilities

The Group recorded unaudited total liabilities of approximately HK$1,024.9 million as at 30 June 2009. As set out in the unaudited pro forma consolidated statement of financial position of the Enlarged Group set out in Appendix III to this circular, the unaudited pro forma total liabilities of the Enlarged Group would be increased by approximately HK$679.9 million to approximately HK$1,704.8 million. The increase is mainly attributable to the issuance of promissory notes and raising of a long-term bank loan. The

— 13 —

LETTER FROM THE BOARD

Directors are of the view that there would not be any material capital commitment nor contingent liability arising from Acquisition that will have material adverse impact on the financial position of the Group immediately after the completion of Acquisition.

FINANCIAL AND TRADING PROSPECTS

As the Group started engaging in trading of coke business and the coal-related ancillary business, the Directors consider that the coke processing business, being the upstream of the Group’s coke trading business and downstream of the coal-related ancillary business, will enable the Enlarged Group to complete its coal business operation. Besides, the vertical integration of the coke processing business will enable the Enlarged Group to have synergy to the trading of coke business recently engaged by the Group. With the existing clienteles as well as the existing revenue base of the Group, the Directors believe that the Enlarged Group will be able to widen its source of income by diversifying its business into prospective energy related business and improving the Enlarged Group’s profitability by broadening its business scope.

In view of the increase in demand for coal around the world, the Directors are optimistic about the performance of the Enlarged Group as the Group’s investment in the coal-related business is expected to improve the Enlarged Group’s profitability, sustain its growth momentum, and broaden the revenue stream of the Enlarged Group.

IMPLICATION FROM THE LISTING RULES

Since the applicable percentage ratios are more than 100%, the Acquisition constitutes a very substantial acquisition for the Company under Chapter 14 of the Listing Rules. As no Shareholders have any material interest in the Acquisition, no Shareholders are required to abstain from voting at the SGM on the resolution to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

WAIVER APPLICATION OF RULE 14.69(4)(b)(i) OF THE LISTING RULES

Pursuant to Rule 14.69(4)(b)(i) of the Listing Rules, the Company is required to include in this circular the financial information of the Coke Processing Assets (i.e. a profit and loss statement for the three preceding financial years under Rule 14.69(4)(b)(i) of the Listing Rules), for the relevant period comprising each of the three financial years immediately preceding the issue of this circular.

Set out in the Appendix II to the Circular are the financial information of the Coke Processing Assets covering the financial years ended 31 December 2006, 2007 and 2008 and the nine-month periods ended 30 September 2008 and 2009.

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LETTER FROM THE BOARD

To the best knowledge of the Directors, the financial information for the year ended 31 December 2009 of the Coke Processing Assets will only be ready by the end of March 2010. As such, there will be a delay in the issuance of this circular and, in turn, the completion of the Acquisition and the Directors consider that such delay is not in the interests of the Company and the Shareholders as a whole.

Based on the above reason, the Company has applied to the Stock Exchange for a waiver from the strict compliance with the requirements under Rule 14.69(4)(b)(i) of the Listing Rules and the Directors confirmed that they have performed suffiecnt due diligence on the Coke Processing Assets to ensure that, up to the Latest Practicable Date, there has been no material adverse change in the financial position or prospects since 30 September 2009 which would materially affect the information shown in this circular, including in particular the financial information presented on the Coke Processing Assets.

SGM

A notice convening the SGM is set out on pages SGM-1 to SGM-3 of this circular. The SGM will be convened and held at Vinson Room, Pacific Place Conference Centre, 5/F, One Pacific Place, 88 Queensway, Hong Kong at 10:30 a.m. on Monday, 22 February 2010 at which resolutions will be proposed to Shareholders to consider, if thought fit, to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

Form of proxy for use in the SGM is enclosed. Whether or not you propose to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding of the SGM or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting thereof, should you so desire.

RECOMMENDATION

The Directors consider that the terms of the Sale and Purchase Agreement is on normal commercial terms that are fair and reasonable so far as the Shareholders are concerned, and the Acquisition is in the interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant ordinary resolutions to be proposed at the SGM to approve the Acquisition and the transactions contemplated thereunder.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

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

Your faithfully,

By Order of the Board

Huscoke Resources Holdings Limited

Li Baoqi

Acting Chairman

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

1. SUMMARY OF FINANCIAL INFORMATION OF THE GROUP FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2009 AS EXTRACTED FROM INTERIM REPORTS OF THE COMPANY AND EACH OF THE THREE YEARS ENDED 31 DECEMBER 2006, 2007 AND 2008

The following is a summary of the financial information of the Group for the six months period ended 30 June 2009 as extracted from interim reports of the company and each of the three years ended 31 December 2006, 2007 and 2008 as extracted from the annual reports of the Company:

Results

For the six months

Revenue (Loss)/Profit before tax Taxation (charge) credit (Loss)/Profit for the year Attributable to: Equity holders of the Company Minority Interests Dividends	ended 2009 HK$’000 658,380 32,097 (7,755) 24,342 20,216 4,126 24,342 —	30 June 2008 HK$’000 448,770 (13,897) (2,310) (16,207) (16,207) — (16,207) —	Year 2008 HK$’000 1,371,078 (1,837,800) (14,988) (1,852,788) (1,858,198) 5,410 (1,852,788) —	ended 31 December 2007 2006 HK$’000 HK$’000 640,635 714,731 (42,487) 16,059 317 914 (42,170) 16,973 (42,170) 18,912 — (1,939) (42,170) 16,973 — —

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Assets, liabilities and minority interests

As at 30 June 2009 2008 HK$’000 HK$’000 (Unaudited) (Unaudited) Non-current assets Property, plant and equipment 510,112 65,728 Prepaid lease payments 67,773 58,555 Investment properties 26,658 67,300 Goodwill 399,262 1,099,777 Other intangible asset 821,242 — Available-for-sale investments 3,448 3,357 Retirement benefit scheme’s assets 3,825 4,077 Interests in associates — — 1,832,320 1,298,794 Current assets Inventories 37,305 30,978 Debtors, bills receivable and prepayments 574,238 424,659 Amount due from a minority shareholder of a subsidiary 275,774 — Prepaid lease payments 730 528 Investments held for trading 3,285 2,185 Short term bank deposits — — Short term pledged bank deposit — 2,954 Bank balances and cash 85,858 22,343 Tax recoverable — — 977,190 483,647 Total assets 2,809,510 1,782,441	Year ended 31 December 2008 2007 2006 HK$’000 HK$’000 HK$’000 532,618 64,968 114,945 80,115 7,919 22,019 26,658 — — 399,262 — — 842,998 — — 3,448 880 880 3,825 4,077 — — — 315 1,888,924 77,844 138,159 68,867 44,482 67,563 565,921 70,449 92,810 186,887 — — 730 222 627 3,243 — 8,630 13,569 63,688 39,505 936 2,910 2,840 54,451 21,402 41,919 — — 1,949 894,604 203,153 255,843 2,783,528 280,997 394,002	Year ended 31 December 2008 2007 2006 HK$’000 HK$’000 HK$’000 532,618 64,968 114,945 80,115 7,919 22,019 26,658 — — 399,262 — — 842,998 — — 3,448 880 880 3,825 4,077 — — — 315 1,888,924 77,844 138,159 68,867 44,482 67,563 565,921 70,449 92,810 186,887 — — 730 222 627 3,243 — 8,630 13,569 63,688 39,505 936 2,910 2,840 54,451 21,402 41,919 — — 1,949 894,604 203,153 255,843 2,783,528 280,997 394,002
		138,159
		67,563 92,810 — 627 8,630 39,505 2,840 41,919 1,949
		255,843
		394,002

— I-2 —

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

As at 30 June
2009
2008
HK$’000
HK$’000
(Unaudited)
(Unaudited)
Non-current liabilities
Deferred taxation
137,889
7,042
Bank borrowings
46,284
52,788
Convertible bonds
—
773,357
184,173
833,187
Current liabilites
Creditors, bills payable and
accrued charges
304,682
121,930
Amount due to a minotiry
shareholder of a subsidiary
—
—
Amount due to a director
39,585
—
Promissory notes
98,412
60,000
Tax payable
38,972
8,107
Bank borrowings — due
within one year
359,101
267,138
Amount due to an associate
—
—
840,752
457,175
Total libilities
1,024,925
1,290,362
Minority interests
63,004
—

Year ended 31 December
2008
2007
2006
HK$’000
HK$’000
HK$’000
143,887
2,302
4,686
49,518
—
—
—
—
—
193,405
2,302
4,686
248,770
65,493
96,751
18,955
—
—
12,000
—
—
96,032
—
—
56,663
118
—
397,460
36,322
70,029
—
—
294
829,880
101,933
167,074
1,023,285
104,235
171,760
58,878
—
—

None of the audited financial statements of the Group for the three years ended 31 December 2008 was qualified by the auditors.

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APPENDIX I FINANCIAL INFORMATION ON THE GROUP

2. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR EACH OF THE TWO YEARS ENDED 31 DECEMBER 2007 AND 2008

The following is extracted the text of the audited financial statements of the Group together with the accompanying notes contained on pages 28 to 105 of the annual report of the Company for the year ended 31 December 2008.

Consolidated Income Statement

For The Year Ended 31st December, 2008

NOTES Continuing operations Revenue 8 Cost of sales — Others — Amortisation of other intangible asset Gross profit Other income 9 Selling and distribution costs Administrative expenses Gain on fair value change of investments held for trading Loss on disposal/liquidation of subsidiaries 39(ii) Loss on fair value change of investment properties 19 Finance costs 10 Profit before taxation and impairment loss on goodwill Impairment loss on goodwill 20 (Loss) profit before taxation Taxation 11		2008 HK$’000 1,235,088 (1,074,887) (27,194) (1,102,081) 133,007 7,153 (7,503) (56,587) 396 — (13,575) (13,278) 49,613 (1,870,383) (1,820,770) (16,139)		2007 HK$’000
		1,235,088 (1,074,887) (27,194) (1,102,081)		262,387 (231,107) — (231,107)
				31,280 22,741 (7,828) (35,408) 2,454 (3,573) — (2,561) 7,105 — 7,105 (1,585)

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

NOTES (Loss) profit for the year from continuing operations Discontinued operation Loss for the year from discontinued operation 12 Loss for the year 13 Attributable to: Equity holders of the Company Minority interests Basic (loss) earnings per share 16 From continuing and discontinued operations From continuing operations	2008 HK$’000 (1,836,909) (15,879) (1,852,788) (1,858,198) 5,410 (1,852,788) (HK69.94 cents) (HK69.34 cents)	2007 HK$’000 5,520 (47,689) (42,169) (42,169) — (42,169) (HK8.82 cents) HK1.15 cents

— I-5 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Consolidated Balance Sheet

At 31st December, 2008

NOTES Non-current assets Property, plant and equipment 17 Prepaid lease payments 18 Investment properties 19 Goodwill 20 Other intangible asset 21 Available-for-sale investments 23 Retirement benefit scheme’s assets 24 Current assets Inventories 25 Debtors, bills receivable and prepayments 26 Amount due from a minority shareholder of a subsidiary 27 Prepaid lease payments 18 Investments held for trading 28 Short term bank deposits 29 Short term pledged bank deposit 29 Bank balances and cash 29 Current liabilities Creditors, bills payable and accrued charges 30 Amount due to a minority shareholder of a subsidiary 27 Amount due to a director 31 Promissory notes 32 Tax payable Bank borrowings — due within one year 33 Net current assets Total assets less current liabilities	2008 HK$’000 532,618 80,115 26,658 399,262 842,998 3,448 3,825 1,888,924 68,867 565,921 186,887 730 3,243 13,569 936 54,451 894,604 248,770 18,955 12,000 96,032 56,663 397,460 829,880 64,724 1,953,648	2007 HK$’000 64,968 7,919 — — — 880 4,077
		77,844
		44,482 70,449 — 222 — 63,688 2,910 21,402
		203,153
		65,493 — — — 118 36,322
		101,933
		101,220
		179,064

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

NOTES Capital and reserves Share capital 34 Reserves Equity attributable to equity holders of the Company Minority interests Total equity Non-current liabilities Deferred taxation 37 Bank borrowings 33	2008 HK$’000 181,293 1,520,072 1,701,365 58,878 1,760,243 143,887 49,518 193,405 1,953,648	2007 HK$’000 47,793 128,969
		176,762 —
		176,762
		2,302 —
		2,302
		179,064

— I-7 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Consolidated Statement of Changes in Equity

For The Year Ended 31st December, 2008

			Attributable to equity holders of th	Attributable to equity holders of th	e Company			Total HK$’000 222,242 1,796 (5,107) (42,169)
Share capital HK$’000 47,793 — — — — 47,793 — — — — 133,500 — 181,293	Share premium HK$’000 144,997 — — — — 144,997 — — — — — — 144,997	Contributed surplus HK$’000 (note i) — — — — — — — — — — 747,600 — 747,600	Special reserve HK$’000 (note ii) 18,236 — — — — 18,236 — — — — — — 18,236	Translation reserve HK$’000 3,601 1,796 (5,107) — (3,311) 290 301 — 301 — — — 591	Capital redemption reserve HK$’000 85 — — — — 85 — — — — — — 85	Convertible bonds reserve HK$’000 — — — — — — — — — 3,382,500 (881,100) — 2,501,400	Retained profits (accumulated losses) HK$’000 7,530 — — (42,169) (42,169) (34,639) — (1,858,198) (1,858,198) — — — (1,892,837)
								(45,480)
								176,762 323 (1,852,788)
								(1,852,465)
								3,382,500 — 53,446
								1,760,243

Notes:

(i) The contributed surplus represents the excess of fair value of convertible bonds issued as part of the consideration of acquisition of businesses over the nominal amount of the ordinary shares issued. Pursuant to section 40(1) of the Bermuda Companies Act, the excess of value of shares acquired over the nominal value of the shares being issued by the Company is credited to a contributed surplus account.
(ii) The special reserve represents the difference between the nominal value of the shares of the subsidiaries at the date when the shares were acquired by the Company and the nominal amount of the Company’s shares issued for the acquisition.

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Consolidated Cash Flow Statement

For The Year Ended 31st December, 2008

NOTES OPERATING ACTIVITIES Loss before taxation Adjustments for: Impairment loss on goodwill Allowances for bad and doubtful debts Loss (gain) on fair value change of investments held for trading Loss (gain) on fair value change of retirement benefit scheme’s assets Interest expense Interest income Depreciation of property, plant and equipment Release of prepaid lease payments Amortisation of other intangible asset Loss (gain) on disposal of property, plant and equipment Impairment loss on property, plant and equipment Loss on fair value change of investment properties Imputed interest expenses on promissory notes Loss on early redemption of promissory notes (Gain) loss on disposal of subsidiaries Operating cash flows before movements in working capital Decrease in inventories (Increase) decrease in debtors, bills receivable and prepayments Increase in amount due from a minority shareholder of a subsidiary Increase (decrease) in creditors, bills payable and accrued charges Increase in amount due to a minority shareholder of a subsidiary (Increase) decrease in investments held for trading Cash (used in) generated from operations Hong Kong Profits Tax paid NET CASH (USED IN) FROM OPERATING ACTIVITIES	2008 HK$’000 (1,837,800) 1,870,383 2,600 396 252 10,501 (2,257) 17,576 542 27,194 247 — 13,575 2,843 2,713 (8,375) 100,390 33,400 (99,828) (151,340) 25,838 18,955 (456) (73,041) (298) (73,339)	2007 HK$’000 (42,486) — — (2,454) (4,077) 4,369 (3,598) 15,813 222 — (18,749) 22,000 — — — 3,573 (25,387) 22,664 20,618 — (28,568) — 11,880 1,207 — 1,207

— I-9 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

NOTES INVESTING ACTIVITIES Purchase of property, plant and equipment Acquisition of businesses, net of cash and cash equivalent acquired 38 Decrease (increase) in pledged bank deposits Distribution from an associate Proceeds from disposal of property, plant and equipment Disposal of subsidiaries 39 Interest received NET CASH FROM INVESTING ACTIVITIES FINANCING ACTIVITIES New bank borrowings raised Repayment of bank borrowings Repayment of promissory notes Advance from a director Interest paid NET CASH FROM (USED IN) FINANCING ACTIVITIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR EFFECT OF FOREIGN CURRENCY RATE CHANGES CASH AND CASH EQUIVALENTS AT END OF THE YEAR ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS BEING: Short term bank deposits Bank balances and cash	2008 HK$’000 (1,788) (1,406) 1,974 — 5,237 31,569 2,257 37,843 448,502 (331,685) (100,000) 12,000 (10,501) 18,316 (17,180) 85,090 110 68,020 13,569 54,451 68,020	2007 HK$’000 (9,103) — (70) 20 39,589 6,149 3,598 40,183 289,983 (323,690) — — (4,369) (38,076) 3,314 81,423 353 85,090 63,688 21,402 85,090

— I-10 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Notes To The Consolidated Financial Statements

For The Year Ended 31st December, 2008

1. GENERAL

The Company was incorporated in Bermuda as an exempted company with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The address of the registered office and principal place of business is Room 4205, Far East Finance Centre, 16 Harcourt Road, Admiralty, Hong Kong.

The consolidated financial statements are presented in Hong Kong dollars, which is the same as the functional currency of the Company.

The Company is an investment holding company. Its subsidiaries are principally engaged in trading of coke, coal-related ancillary business and the design and sale of a diversified range of consumer home products.

2. CHANGE OF COMPANY’S NAME

Pursuant to a special resolution passed by the shareholders at a special general meeting of the Company held on 23rd July, 2008, the name of the Company was changed from Frankie Dominion International Limited to Huscoke Resources Holdings Limited, and 和嘉資源控股有限公司 has been adopted by the Company as its secondary name. The change of name took effect on 7th August, 2008.

3. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRS(s)”)

In the current year, the Group has applied the following amendments and interpretations (“New HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), which are or have become effective.

HKAS 39 & HKFRS 7 (Amendments) Reclassification of financial assets HK(IFRIC)— INT 11 HKFRS 2: Group and treasury share transactions HK(IFRIC)— INT 12 Service concession arrangements HK(IFRIC)— INT 14 HKAS 19 — The limit on a defined benefit asset, minimum funding requirements and their interaction

The adoption of these New HKFRSs had no material effect on how the results and financial position of the Group for the current or prior accounting periods have been prepared and presented. Accordingly, no prior period adjustment has been required.

The Group has not early applied the following new and revised standards, amendments or interpretations that have been issued but are not yet effective.

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

HKFRSs (Amendments) Improvements to HKFRSs1 HKAS 1 (Revised) Presentation of financial statements2 HKAS 23 (Revised) Borrowing costs2 HKAS 27 (Revised) Consolidated and separate financial statements3 HKAS 32 & HKAS 1 (Amendments) Puttable financial instruments and obligations arising on liquidation 2 HKAS 39 (Amendment) Eligible hedged items3 HKFRS 1 & HKAS 27 (Amendments) Cost of an investment in a subsidiary, jointly controlled entity or associate2 HKFRS 2 (Amendment) Vesting conditions and cancellations2 HKFRS 3 (Revised) Business combinations3 HKFRS 7 (Amendment) Improving disclosures about financial instruments2 HKFRS 8 Operating segments2 HK(IFRIC)— INT 9 & Embedded derivatives4 HKAS 39 (Amendments) HK(IFRIC)— INT 13 Customer loyalty programmes5 HK(IFRIC)— INT 15 Agreements for the construction of real estate2 HK(IFRIC)— INT 16 Hedges of a net investment in a foreign operation6 HK(IFRIC)— INT 17 Distributions of non-cash assets to owners3 HK(IFRIC)— INT 18 Transfers of assets from customers7

1 Effective for annual periods beginning on or after 1st January, 2009 except the amendments to HKFRS 5, effective for annual periods beginning on or after 1st July, 2009.
2 Effective for annual periods beginning on or after 1st January, 2009.
3 Effective for annual periods beginning on or after 1st July, 2009.
4 Effective for annual periods ending on or after 30th June, 2009.
5 Effective for annual periods beginning on or after 1st July, 2008.
6 Effective for annual periods beginning on or after 1st October, 2008. 7 Effective for transfers on or after 1st July, 2009.

The application of HKFRS 3 (Revised) may affect the Group’s accounting for business combination for which the acquisition date is on or after 1st January, 2010. HKAS 27 (Revised) will affect the accounting treatment for changes in the Group’s ownership interest in a subsidiary. HKAS 23 (Revised) will affect the accounting treatment for borrowing costs, which eliminates the option to expense borrowing costs in relation to acquisition of qualifying assets when incurred. The Group has commenced considering the potential impact of HKAS 23 (Revised) but is not yet in a position to determine whether HKAS 23 (Revised) would have a significant impact on how its results of operations and financial positions are prepared and presented. The directors of the Company anticipate that the application of the other new and revised standards, amendments or interpretations will have no material impact on the results and the financial position of the Group.

4. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared on the historical cost basis except for investment properties and certain financial instruments, which are measured at fair values, as explained in the accounting policies set out below.

The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA. In addition, the consolidated financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) and by the Hong Kong Companies Ordinance.

— I-12 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Minority interests in the net assets of subsidiaries are presented separately from the Group’s equity therein. Minority interests in the net assets consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

Business combinations

The acquisition of business is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under HKFRS 3 Business Combinations are recognised at their fair values at the acquisition date.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Goodwill

Goodwill arising on an acquisition of a business represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the relevant business at the date of acquisition. Such goodwill is carried at cost less any accumulated impairment losses.

Capitalised goodwill arising on an acquisition of a business is presented separately in the consolidated balance sheet.

— I-13 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

For the purposes of impairment testing, goodwill arising from an acquisition is allocated to each of the relevant cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the acquisition. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, and whenever there is an indication that the unit may be impaired. For goodwill arising on an acquisition in a financial year, the cashgenerating unit to which goodwill has been allocated is tested for impairment before the end of that financial year. When the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated to reduce the carrying amount of any goodwill allocated to the unit first, and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in the consolidated income statement. An impairment loss for goodwill is not reversed in subsequent periods.

On subsequent disposal of the relevant cash-generating unit, the attributable amount of goodwill capitalised is included in the determination of the amount of profit or loss on disposal.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods sold and services provided in the normal course of business, net of discounts.

Sales of goods are recognised when goods are delivered and title has passed.

Revenue from sales of electricity and heat are recognised when electricity and heat are consumed by the customers.

Service income are recognised when services are provided.

Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Property, plant and equipment

Property, plant and equipment including land and buildings held for use on the production or supply of goods and services, or for administrative purposes are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.

Depreciation is provided to write off the cost of items of property, plant and equipment other than construction in progress over their estimated useful lives and after taking into account of their estimated residual value.

— I-14 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The costs of buildings of the Group are depreciated over the term of the lease using straightline method. Other items of property, plant and equipment were depreciated by using the reducing balance method at 20% per annum. On 31st October, 2008, the Group completed the acquisition of Joy Wisdom International Limited and its subsidiaries (“Joy Wisdom Group”) and the directors of the Company reassessed the depreciation method of the items of property, plant and equipment and determined that the application of straight-line method would better reflect the pattern in which the future economic benefits of the property, plant and equipment are expected to be consumed by the Group. As a result, with effect from 1st November, 2008, the Group changed the depreciation method in respect of the other items of property, plant and equipment from reducing balance method to straight-line method. In view of the carrying amount of these assets, the directors of the Company considered the effect of the change in depreciation method on depreciation charge for the year and future periods are insignificant.

Construction in progress includes property, plant and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less any recognised impairment loss. Construction in progress is classified to the appropriate category of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the consolidated income statement in the year in which the item is derecognised.

Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation.

On initial recognition, investment properties are measured at cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured at fair value using the fair value model. Gains or losses arising from changes in the fair value of investment properties are included in profit or loss for the period in which they arise.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposals. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement in the year in which the item is derecognised.

If an investment property becomes an item of property, plant and equipment because its use has changed as evidenced by commencement of owner-occupation, any difference in fair value change of that investment property at the date of transfer is recognised in the consolidated income statement.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair values can be measured reliably. The costs of such intangible assets are their fair value at the acquisition date.

— I-15 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Subsequent to initial recognition, intangible assets with finite useful lives are carried at costs less accumulated amortisation and any accumulated impairment losses. Amortisation for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives (see the accounting policy in respect of impairment losses on tangible and intangible assets below).

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessor

Rental income from operating leases is recognised in the consolidated income statement on a straight-line basis over the term of the relevant lease.

The Group as lessee

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are recognised as a reduction of rental expense over the lease term on a straight-line basis.

Leasehold land and building

The land and building elements of a lease of land and building are considered separately for the purpose of lease classification, unless the lease payments cannot be allocated reliably between the land and building elements, in which case, the entire lease is generally treated as a finance lease and accounted for as property, plant and equipment. To the extent the allocation of the lease payments can be made reliably, leasehold interests in land are accounted for as operating leases except for those that are classified and accounted for as investment properties under the fair value model.

Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are recognised in profit or loss in the year in which they arise. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of nonmonetary items in respect of which gains and losses are recognised directly in equity, in which cases, the exchange differences are also recognised directly in equity.

— I-16 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into the presentation currency of the Group (i.e. Hong Kong dollars) at the rate of exchange prevailing at the balance sheet date, and their income and expenses are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the year, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognised as a separate component of equity (the translation reserve). Such exchange differences are recognised in profit or loss in the year in which the foreign operation is disposed of.

Retirement benefit costs

Payments to defined contribution retirement benefit plans, the Mandatory Provident Fund Scheme and the state-managed retirement benefit schemes, are charged as an expense when employees have rendered service entitling them to the contributions.

For defined benefit retirement benefit plan, the cost of providing benefits is determined using the projected unit credit method.

The amount recognised in the consolidated balance sheet represents the fair value of plan assets, reduced by the present value of the defined benefit obligation. Any asset resulting from this calculation is limited to the present value of available refunds.

Borrowing costs

All borrowing costs are recognised as and included in finance costs in the consolidated income statement in the period in which they are incurred.

Government grants

Government grants are recognised as income over the periods necessary to match them with the related costs. Grants related to expense items are recognised in the same period as those expenses are charged in the consolidated income statement and are reported separately as “other income”.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax base used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

— I-17 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is settled or the asset is realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method.

Financial instruments

Financial assets and financial liabilities are recognised on the consolidated balance sheet when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

The Group’s financial assets are classified into one of the three categories, including investments held for trading, loans and receivables and available-for-sale financial assets. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.

Income is recognised on an effective interest basis for debt instruments.

— I-18 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Investments held for trading

A financial asset is classified as held for trading if:

it has been acquired principally for the purpose of selling in the near future; or
it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.

At each balance sheet date subsequent to initial recognition, investments held for trading are measured at fair value, with changes in fair value recognised directly in profit or loss in the year in which they arise. The net gain or loss recognised in profit or loss excludes any dividend or interest earned on the financial assets.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. At each balance sheet date subsequent to initial recognition, loans and receivables (including debtors, bills receivable, amount due from a minority shareholder of a subsidiary, bank balances, cash and bank deposits) are carried at amortised cost using the effective interest method, less any identified impairment losses (see accounting policy on impairment loss on financial assets below).

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated or not classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments. At each balance sheet date subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Changes in fair value are recognised in equity, until the financial asset is disposed of or is determined to be impaired, at which time, the cumulative gain or loss previously recognised in equity is removed from equity and recognised in profit or loss (see accounting policy on impairment loss on financial assets below).

Impairment of financial assets

Financial assets, other than investments held for trading, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been impacted.

For all loans and receivables and available-for-sale debt investment, objective evidence of impairment could include:

significant financial difficulty of the issuer or counterparty; or
default or delinquency in interest or principal payments; or
it becoming probable that the borrower will enter bankruptcy or financial reorganisation.

— I-19 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

For certain categories of financial asset, such as debtors, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the credit period of 90 days, observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, an impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of debtors, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a debtor is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

For available-for-sale debt investments, impairment losses are subsequently reversed if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

Financial liabilities and equity

Financial liabilities and equity instruments issued by a group entity are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies adopted in respect of financial liabilities and equity instruments are set out below.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Interest expense is recognised on an effective interest basis.

Other financial liabilities

Other financial liabilities including creditors, bills payable, amounts due to a minority shareholder of a subsidiary and a director, promissory notes and bank borrowings are subsequently measured at amortised cost, using the effective interest method.

— I-20 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Group has transferred substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised directly in equity is recognised in profit or loss. If the Group retains substantially all the risks and rewards of ownership of a transferred asset, the Group continues to recognise the financial assets and recognise a collateralised borrowing for proceeds received.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Impairment losses on tangible and intangible assets other than goodwill (see the accounting policy in respect of goodwill above)

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

5. KEY SOURCES OF ESTIMATION UNCERTAINTY

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet dates, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Other intangible asset

The estimated useful life of other intangible asset, being export agency, acquired on acquisition of business as set out in note 38 is based on the management’s best estimate of the expected life of the agency agreement, according to their understanding of trading of coke business. In addition, the actual amount of export sales by the sole supplier to the Group is subject to actual amount of export quota obtained by the sole supplier and the amount of export quota granted by the Ministry of Commerce of China to the sole supplier semi-annually. If the actual amount of export sales by the sole supplier to the Group is different from estimated, indication of impairment of other intangible asset may arise.

— I-21 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Estimated impairment of goodwill and other intangible asset

Determining whether goodwill and other intangible asset are impaired requires an estimation of the value in use of the cash-generating unit (“CGU”) to which goodwill and other intangible asset have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate the present value. Cash flow projection, based on expected future cash flows of the CGU, has been performed and management is confident that the carrying amounts of the assets after impairment will be recovered in full. This situation will be closely monitored by the management. Any change in the business environment may lead to the change of expected future cash flows. If the future recoverable amounts fall below the carrying amounts of the CGUs, recognition of impairment is required. As at 31st December, 2008, the carrying amounts of goodwill and other intangible asset were approximately HK$399,262,000 and HK$842,998,000 (2007: nil and nil) respectively. During the year, an impairment loss of goodwill amounting to HK$1,870,383,000 was recognised in the consolidated income statements. Details of the recoverable amount calculation are disclosed in note 22.

Depreciation and amortisation

The Group depreciates its property, plant and equipment and amortises other intangible asset over the estimated useful life, commencing from the date the property, plant and equipment and other intangible asset are ready for their intended use. The estimated useful life reflects the directors’ estimate of the periods that the Group intends to derive future economic benefits from the use of the Group’s property, plant and equipment and other intangible asset. The depreciation and amortisation will be changed when the useful life is expected to be different from estimated.

6. CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the equity balance. The Group’s overall strategy remains unchanged from prior year.

The capital structure of the Group consists of net debt, which includes the advance from a director disclosed in note 31 and borrowings disclosed in note 33, net of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued share capital and reserves. The directors of the Company review the capital structure on a continuous basis. As part of this review, the directors consider the cost of capital and the risks associated with capital. Based on recommendations of the directors, the Group will balance its overall capital structure through the payment of dividends and issuance of new shares as well as raising new borrowings and repaying existing borrowings.

— I-22 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

7. FINANCIAL INSTRUMENTS

Categories of financial instruments

Financial assets Investments held for trading Loans and receivables (including cash and cash equivalents) Available-for-sale financial assets Financial liabilities Amortised cost	2008 HK$’000 3,243 331,723 3,448 338,414 707,227	2007 HK$’000 — 157,015 880
		157,895

		88,161

Financial risk management objectives and policies

The Group’s major financial instruments include debtors, bills receivable, amount due from a minority shareholder of a subsidiary, bank balances, deposits and cash, creditors, bills payable, amounts due to a minority shareholder of a subsidiary and a director, promissory notes and bank borrowings. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

There has been no significant change to the Group’s exposure to financial risks or the manner in which it manages and measures the risk.

Currency risk

The Group has foreign currency sales and purchases, denominated in currencies other than the functional currency of the respective group entities which exposed the Group to foreign currency risk. Approximately 79%, 77% and 36% (2007: 84%, 91% and 20%) of the Group’s sales, purchases and other cost of sales, respectively, are denominated in currencies other than the functional currency of the respective group entities. In addition, certain debtors, bills receivable, bank deposits, bank balances, creditors, bills payable, amount due to a minority shareholder of a subsidiary and bank borrowings are denominated in currencies other than the functional currency of the respective group entities. The Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.

— I-23 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

United States dollars (“US$”) Australian dollars (“AUD”) New Zealand dollars (“NZD”) Renminbi (“RMB”)	Assets 2008 2007 HK$’000 HK$’000 82,548 26,489 — 25,615 — 14,074 2,197 4,293 84,745 70,471	Liabilities 2008 2007 HK$’000 HK$’000 421,440 42,216 — — — — 4,580 2,159 426,020 44,375	Liabilities 2008 2007 HK$’000 HK$’000 421,440 42,216 — — — — 4,580 2,159 426,020 44,375
			44,375

Sensitivity analysis

The Group is mainly exposed to US$, AUD, NZD and RMB against Hong Kong dollars.

The following table details the Group’s sensitivity to a rate increase or decrease in Hong Kong dollars against foreign currency. A sensitivity of 0.5% would be used for analysis against US$, whereas 5% would be used against foreign currencies other than US$ (the “Sensitivity Rates”). The Sensitivity Rates used represent management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a rate change in foreign currency rates. A negative number below indicates an increase in post-tax loss for the year where Hong Kong dollars weaken by the Sensitivity Rates against the relevant currencies. There would be an equal and opposite impact on the loss for the year where Hong Kong dollars strengthen by the Sensitivity Rates against the relevant currencies.

(Increase) decrease in loss for the year US$ impact AUD impact NZD impact RMB impact *Interest rate risk*	2008 HK$’000 (1,695) — — (119)	2007 HK$’000 (79)

		1,281

		704

		107

The Group’s fair value interest rate risk relates primarily to short term pledged bank deposit. The Group is also exposed to cash flow interest rate risk through the impact of rate changes on deposits with banks and bank borrowings. It is the Group’s policy to keep its borrowings at floating rate of interests so as to minimise the fair value interest rate risk. The management monitors interest rate exposure and will consider hedging significant interest rate exposure should the need arise.

The Group’s concentration of cash flow interest rate risk is mainly on bank borrowings in relation to movements in the London InterBank Offered Rates and Hong Kong InterBank Offered Rates.

— I-24 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to interest rates for the non-derivative instruments at the balance sheet date. For variable-rate bank borrowings, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 200 basis point increase or decrease represent management’s assessments of the reasonably possible changes in interest rates of variable rate bank borrowings respectively.

For variable rate bank borrowings, if interest rates had been 200 basis points higher/lower and all other variables were held constant, the Group’s loss for the year would increase/decrease by HK$8,940,000 (2007: HK$1,816,000).

Other price risk

The Company’s directors considered the Group’s exposure to other price risk is limited because the carrying amounts of investments held for trading and available-for-sale investments as at 31st December, 2008 are insignificant.

Credit risk

The Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to the counterparties failure to perform their obligations as at 31st December, 2008 and 2007 in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the respective consolidated balance sheet. In order to minimise the credit risk, the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. The management closely monitors the subsequent settlement of the debts and does not grant long credit period to customers. In addition, the Group reviews the recoverable amount of each amount due from individual debtors and minority shareholder of a subsidiary at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group’s credit risk is significantly reduced.

Other than the concentration of credit risk on advance payments to a minority shareholder of a subsidiary and amount due from a minority shareholder of a subsidiary, the Group has no significant concentration of credit risk on other trade debtors, with exposure spread over a number of counterparties and customers.

The Group has concentration of credit risk on liquid funds deposited with a few major banks. However, the credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

Liquidity risk

In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. As at 31st December, 2008, the Group had available unutilised short-term bank loan facilities of approximately HK$204,750,000 (2007: HK$203,000,000). Details of the Group’s borrowings at 31st December, 2008 are set out in note 33.

— I-25 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The following table details the Group’s remaining contractual maturity for its financial liabilities. For non-derivative financial liabilities, the table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

Liquidity tables

Weighted average interest rate % per annum 2008 Non-derivative financial liabilities Trade and other creditors — Bills payable — Amount due to a minority shareholder of a subsidiary — Amount due to a director — Promissory notes 5.00% Bank borrowings 2.64% Weighted average interest rate % per annum 2007 Non-derivative financial liabilities Trade and other creditors — Bills payable — Bank borrowings 7.38%	Less than 1 month HK$’000 51,277 1,141 18,955 12,000 — 1,849 85,222 Less than 1 month HK$’000 28,920 1,374 18,623 48,917	1-3 months HK$’000 24,842 — — — — 7,222 32,064 1-3 months HK$’000 19,293 1,718 21,002 42,013	3-6 months HK$’000 56,002 — — — — 79,970 135,972 3-6 months HK$’000 534 — 128 662	6 months to 1 year HK$’000 — — — — 100,000 317,121 417,121 6 months to 1 year HK$’000 — — — —	1-5 years HK$’000 — — — — — 32,194 32,194 1-5 years HK$’000 — — — —	Over 5 years HK$’000 — — — — — 25,951 25,951 Over 5 years HK$’000 — — — —	Total undiscounted cash flows HK$’000 132,121 1,141 18,955 12,000 100,000 464,307 728,524 Total undiscounted cash flows HK$’000 48,747 3,092 39,753 91,592	Total carrying amounts at 31.12.2008 HK$’000 132,121 1,141 18,955 12,000 96,032 446,978
								707,227

								Total carrying amounts at 31.12.2007 HK$’000 48,747 3,092 36,322
								88,161

— I-26 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Fair value

The fair value of financial assets and financial liabilities are determined as follows:

the fair value of available-for-sale investments is determined by reference to the price quoted in an open market. The fair value of investments held for trading is determined with reference to market prices of listed equity securities in the portfolio underlying the mutual funds ; and
the fair value of other financial assets and financial liabilities are determined by using generally accepted pricing models based on discounted cash flow analysis using prices or rates from observable current market transactions as input.

The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements approximate their fair values.

8. REVENUE, BUSINESS AND GEOGRAPHICAL SEGMENTS

Revenue

Continuing operations Sale of goods — coke — coal — household products Revenue from sales of electricity and heat Rental income from investment properties Discontinued operation Sale of goods — other consumer products	2008 HK$’000 676,286 207,432 340,587 9,992 791 1,235,088 135,990 1,371,078	2007 HK$’000 — — 262,387 — —
		262,387
		378,248
		640,635

Business segments

For management purposes, the Group is currently organised into five operating divisions – (i) trading – coke; (ii) coal-related ancillary business; (iii) trading – others; (iv) manufacturing – household products; and (v) property investment. These divisions are the basis on which the Group reports its primary segment information. On 16th May, 2008 and 31st October, 2008, three new operating divisions, trading – coke, coal-related ancillary business and property investment, were acquired respectively as set out in note 38. On 31st October, 2008, the Group completed the discontinuation of an operating division, manufacturing – others, which engaged in manufacturing and sale of other consumer products as set out in note 39.

— I-27 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Principal activities are as follows:

Trading – coke	—	purchases and sales of coke
Coal-related ancillary business	—	washing of raw coal into refined coal for sales and
		sales of electricity and heat (generated as the by-
		products after washing of raw coal)
Trading – others	—	resale of household products
Manufacturing – household	—	manufacturing and sales of household products
products
Property investment	—	holding of investment properties

Inter-segment sales are charged at prices mutually agreed among the group entities.

Segment information about these businesses is presented below.

Income statement for the year ended 31st December, 2008

		Continuing	operations		Consolidated HK$’000 1,371,078 —
Trading – coke HK$’000 676,286 — 676,286 39,726 (27,194) (1,074,495) (1,061,963)	Coal – related ancillary business HK$’000 217,424 — 217,424 71,265 — (795,888) (724,623)	Trading – others HK$’000 298,428 — 298,428 20,094 — — 20,094	Manufacturing – household products HK$’000 42,159 — 42,159 4,225 — — 4,225	Property investment HK$’000 791 — 791 (13,042) — — (13,042)
					1,371,078
					96,918 (27,194) (1,870,383)
					(1,800,659) 4,062 (36,630) 396 8,375 (13,344)
					(1,837,800) (14,988)
					(1,852,788)

— I-28 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Assets and liabilities as at 31st December, 2008

ASSETS Segment assets Unallocated corporate assets Consolidated total assets LIABILITIES Segment liabilities Unallocated corporate liabilities Consolidated total liabilities	Continuing operations
	Coal – related Manufacturing – Trading – ancillary Trading – household Property coke business others products investment HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 1,320,428 1,132,054 65,734 53,424 26,742 98,119 126,210 28,169 10,844 314	Consolidated HK$’000 2,598,382 185,146
		2,783,528

		263,656 759,629
		1,023,285

Other information for the year ended 31st December, 2008

Capital additions Amortisation of other intangible assets Depreciation of property, plant and equipment Release of prepaid lease payments Loss on disposal of property, plant and equipment Loss on fair value change of investment properties Allowances for bad and doubtful debts	Continuing operations Coal – related Manufacturing – Trading – ancillary Trading – household Property coke business others products investment Unallocated Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 129 1,583 64 — — — 1,776 27,194 — — — — — 27,194 248 7,354 1,454 938 — 128 10,122 — — — 219 — 320 539 — — 55 — — — 55 — — — — 13,575 — 13,575 — — 2,600 — — — 2,600	Discontinued operation Manufacturing – others Consolidated HK$’000 HK$’000 12 1,788 — 27,194 7,454 17,576 3 542 192 247 — 13,575 — 2,600

— I-29 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Income statement for the year ended 31st December, 2007

Continuing operations Manufacturing – Trading – household others products Total HK$’000 HK$’000 HK$’000 165,769 96,618 262,387 — — — 165,769 96,618 262,387 9,518 21,341 30,859 11,747 (31,821) 2,454 (3,573) (2,561) 7,105 (1,585) 5,520	Continuing operations Manufacturing – Trading – household others products Total HK$’000 HK$’000 HK$’000 165,769 96,618 262,387 — — — 165,769 96,618 262,387 9,518 21,341 30,859 11,747 (31,821) 2,454 (3,573) (2,561) 7,105 (1,585) 5,520	Consolidated HK$’000 640,635 —
Trading – others HK$’000 165,769 — 165,769 9,518	Manufacturing – household products HK$’000 96,618 — 96,618 21,341
		640,635
		(17,350) 12,173 (31,821) 2,454 (3,573) (4,369)


		(42,486) 317
		(42,169)

Assets and liabilities as at 31st December, 2007

ASSETS Segment assets Unallocated corporate assets Consolidated total assets LIABILITIES Segment liabilities Unallocated corporate liabilities Consolidated total liabilities	Continuing operations Manufacturing – Trading – household others products Total HK$’000 HK$’000 HK$’000 45,432 41,386 86,818 9,638 9,183 18,821	Discontinued operation Manufacturing – others HK$’000 99,311 42,349	Consolidated HK$’000 186,129 94,868
			280,997

			61,170 43,065
			104,235

— I-30 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Other information for the year ended 31st December, 2007

Capital additions Depreciation of property, plant and equipment Release of prepaid lease payments Gain (loss) on disposal of property, plant and equipment Impairment loss on property, plant and equipment	Continuing operations Manufacturing – Trading – household others products Unallocated Total HK$’000 HK$’000 HK$’000 HK$’000 1,373 112 — 1,485 1,731 1,638 — 3,369 108 110 — 218 — 10,994 (60) 10,934 — — — —	Discontinued operation Manufacturing – others Consolidated HK$’000 HK$’000 7,618 9,103 12,444 15,813 4 222 7,815 18,749 22,000 22,000

Geographical segments

The following table provides an analysis of the Group’s revenue by geographical market based on geographical location of customers, irrespective of the origin of the goods.

Geographical market North America Holland United Kingdom Germany Hong Kong Belgium Other European countries Australia France PRC Others	Year ended 31.12.2008 HK$’000 801,738 103,354 89,876 35,421 6,543 68,158 12,329 9,721 2,296 222,270 19,372 1,371,078	Year ended 31.12.2007 HK$’000 220,249 186,111 93,506 43,402 21,713 1,421 33,675 17,220 5,026 10,355 7,957
		640,635

— I-31 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment, analysed by the geographical area in which the assets are located:

Carrying amount of segment assets At At 31.12.2008 31.12.2007 HK$’000 HK$’000 Hong Kong 1,436,267 140,350 PRC 1,162,115 45,779 2,598,382 186,129 9. OTHER INCOME Continuing operations Commission income Interest income on bank deposits Interest income on overdue trade debtors Amount received from insurance claim on damaged inventories Gain on disposal of property, plant and equipment Excess of scheme assets over defined benefit scheme obligations Subsidies from PRC government authorities_(note)_ Sundry income Discontinued operation Interest income on bank deposits Gain on disposal of property, plant and equipment Sundry income		Additions to property, plant and equipment Year ended Year ended 31.12.2008 31.12.2007 HK$’000 HK$’000 193 1,573 1,595 7,530 1,788 9,103 2008 2007 HK$’000 HK$’000 — 4,364 1,196 2,276 1,050 896 587 — — 10,934 — 4,077 2,841 — 1,479 194 7,153 22,741 11 426 — 7,815 128 38 139 8,279	Additions to property, plant and equipment Year ended Year ended 31.12.2008 31.12.2007 HK$’000 HK$’000 193 1,573 1,595 7,530 1,788 9,103 2008 2007 HK$’000 HK$’000 — 4,364 1,196 2,276 1,050 896 587 — — 10,934 — 4,077 2,841 — 1,479 194 7,153 22,741 11 426 — 7,815 128 38 139 8,279	Additions to property, plant and equipment Year ended Year ended 31.12.2008 31.12.2007 HK$’000 HK$’000 193 1,573 1,595 7,530 1,788 9,103 2008 2007 HK$’000 HK$’000 — 4,364 1,196 2,276 1,050 896 587 — — 10,934 — 4,077 2,841 — 1,479 194 7,153 22,741 11 426 — 7,815 128 38 139 8,279
				9,103

				2007 HK$’000 4,364 2,276 896 — 10,934 4,077 — 194
				22,741

				426 7,815 38
				8,279

Note: During the year ended 31st December, 2008, GRG Huscoke (Shan Xi) Ltd (“GRG Huscoke”) 山西金岩和嘉能源有限公司 (“金岩和嘉”), a subsidiary of the Company, received an one-off subsidy of approximately HK$6,818,000 (RMB6,000,000) from the government authority as a subsidy for the increase in cost of heat generation in respect of sales of heat for the period from November 2008 to March 2009. The subsidy is recognised in the consolidated financial statements on a straight line basis over the subsidy period.

— I-32 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

10. FINANCE COSTS

Continuing operations Interest on bank borrowings — wholly repayable within five years — not wholly repayable within five years Imputed interest expenses on promissory notes Discontinued operation Interest on bank borrowings wholly repayable within five years 11. TAXATION Continuing operations Current taxation Hong Kong Profits Tax PRC Enterprise Income Tax Overprovision of Hong Kong Profits Tax in prior years Deferred taxation_(note 37) Current year Attributable to a change in tax rate Discontinued operation Deferred taxation(note 37)_ Current year Attributable to a change in tax rate	2008 HK$’000 9,514 921 2,843 13,278 66 2008 HK$’000 6,671 17,273 23,944 (819) 23,125 (6,920) (66) (6,986) 16,139 (1,085) (66) (1,151)	2007 HK$’000 2,561 — — 2,561 1,808 2007 HK$’000 2,067 — 2,067 — 2,067 (482) — (482) 1,585 (1,902) — (1,902)

On 26th June, 2008, the Hong Kong Legislative Council passed the Revenue Bill 2008 which reduced corporate profits tax rate from 17.5% to 16.5% effective from the year of assessment 2008/2009. Therefore, Hong Kong Profits Tax is calculated at 16.5% (2007: 17.5%) of the estimated assessable profit for the year. The deferred tax balance has been adjusted to reflect the tax rate that is expected to apply to the respective periods when the asset is realised or the liability is settled.

— I-33 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

On 16th March, 2007, the PRC promulgated the Law of the PRC on Enterprise Income Tax (the “New Law”) by Order No. 63 of the President of the PRC. On 6th December, 2007, the State Council of the PRC issued Implementation Regulation of the New Law. Under the New Law and Implementation Regulation, the Enterprise Income Tax rate of the Group’s subsidiaries in the PRC was reduced from 33% to 25% from 1st January, 2008 onwards. Therefore, the PRC Enterprise Income Tax is calculated at a tax rate of 25% (2007: 33%), which is the prevailing tax rate in the PRC.

The taxation for the year can be reconciled to the (loss) profit before taxation per the consolidated income statement as follows:

(Loss) profit before taxation Continuing operations Discontinued operation Taxation at the Hong Kong Profits Tax rate of 16.5% (2007: 17.5%) Tax effect of expenses not deductible for tax purpose Tax effect of income not taxable for tax purpose Overprovision in prior years Tax effect of utilisation of tax losses previously not recognised Tax effect of tax losses not recognised Decrease in opening deferred tax liabilities resulting from a decrease in applicable tax rate Effect of different tax rates of subsidiaries operating in other jurisdictions Taxation for the year	2008 HK$’000 (1,820,770) (17,030) (1,837,800) (303,237) 310,721 (2,326) (819) — 4,908 (132) 5,873 14,988	2007 HK$’000 7,105 (49,591) (42,486) (7,435) 6,296 (3,438) — (141) 4,401 — — (317)

12. DISCONTINUED OPERATION

On 25th August, 2008, the Group entered into a sale agreement to dispose of a subsidiary, Big Field (B.V.I.) Limited and its subsidiary (collectively known as “Bigfield Group”) which carried out all of the Group’s operations related to manufacturing and sale of other consumer products. The disposal was effected in order to redeploy its resources in a more productive manner with the Group. The disposal resulted in a gain on disposal of HK$8,375,000 and was completed on 31st October, 2008, on which date control of Bigfield Group was passed to the acquirer.

— I-34 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The loss for the year from the discontinued operation is analysed as follows:

Loss of manufacturing and sale of other consumer products operation for the year Gain on disposal of manufacturing and sale of other consumer products operation_(see note 39)_	2008 HK$’000 (24,254) 8,375 (15,879)	2007 HK$’000 (47,689) — (47,689)

The results for the period from 1st January, 2008 to 31st October, 2008, which have been included in the consolidated income statement, were as follows:

Revenue Cost of sales Other income Selling and distribution costs Administrative expenses Impairment loss on property, plant and equipment Finance costs Loss before taxation Taxation credit_(note 11)_ Loss for the period/year	Ten months ended 31.10.2008 HK$’000 135,990 (154,850) 139 — (6,618) — (66) (25,405) 1,151 (24,254)	Year ended 31.12.2007 HK$’000 378,248 (384,802) 8,279 (10,441) (17,067) (22,000) (1,808) (49,591) 1,902 (47,689)

During the year, Bigfield Group used HK$33,681,000 in (2007: contributed HK$11,405,000 to) the Group’s net operating cash flows, contributed HK$5,224,000 (2007: HK$13,708,000) in respect of investing activities and paid HK$4,438,000 (2007: HK$21,453,000) in respect of financing activities.

The carrying amounts of the assets and liabilities of Bigfield Group at the date of disposal are disclosed in note 39.

— I-35 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

13. LOSS FOR THE YEAR

Loss for the year has been arrived at after charging (crediting): Allowance for bad and doubtful debts Auditor’s remuneration Cost of inventories recognised as an expense Depreciation of property, plant and equipment Release of prepaid lease payments Loss (gain) on disposal of property, plant and equipment Loss on early redemption of promissory notes Gross rental income from investment properties Less: direct operating expenses from investment properties that generated rental income during the year Net foreign exchange loss (gain) Operating lease payments in respect of rented properties Staff costs: Directors’ remuneration Other staff salaries and allowances and benefits Other staff retirement benefits scheme contributions Loss (gain) on fair value change of retirement benefit scheme’s assets	Continuing operations 2008 2007 HK$’000 HK$’000 2,600 — 1,396 781 1,074,887 231,107 10,122 3,369 539 218 55 (10,934) 2,713 — (791) — 258 — 418 917 891 133 9,435 6,149 18,064 18,748 510 469 28,009 25,366 252 (4,077)	Continuing operations 2008 2007 HK$’000 HK$’000 2,600 — 1,396 781 1,074,887 231,107 10,122 3,369 539 218 55 (10,934) 2,713 — (791) — 258 — 418 917 891 133 9,435 6,149 18,064 18,748 510 469 28,009 25,366 252 (4,077)	Discontinued 2008 HK$’000 — 278 154,850 7,454 3 192 — — — (89) 7,934	operation 2007 HK$’000 — 400 384,802 12,444 4 (7,815) — — — 2,574 13,228	Consolidated 2008 2007 HK$’000 HK$’000 2,600 — 1,674 1,181 1,229,737 615,909 17,576 15,813 542 222 247 (18,749) 2,713 — (791) — 258 — 329 3,491 8,825 13,361 9,435 7,159 55,044 100,246 661 3,493 65,140 110,898 252 (4,077)	Consolidated 2008 2007 HK$’000 HK$’000 2,600 — 1,674 1,181 1,229,737 615,909 17,576 15,813 542 222 247 (18,749) 2,713 — (791) — 258 — 329 3,491 8,825 13,361 9,435 7,159 55,044 100,246 661 3,493 65,140 110,898 252 (4,077)
	9,435 18,064 510	6,149 18,748 469	— 36,980 151	1,010 81,498 3,024	9,435 55,044 661	7,159 100,246 3,493
	28,009 252	25,366 (4,077)	37,131 —	85,532 —	65,140 252	110,898 (4,077)

— I-36 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

14. DIRECTORS’ EMOLUMENTS

For the year ended 31st December, 2008

Name of directors Li Baoqi (appointed on 1st June, 2008) Wu Jixian (appointed on 1st June, 2008) Chim Kim Lun, Ricky Cheng Kwok Hing, Andy Lam Po Kwai, Frankie (resigned on 12th January, 2009) Wong Yau Ching, Maria (resigned on 6th June, 2008) So Man Yee, Katherine (resigned on 6th June, 2008) Lee Yuen Bing, Nina (resigned on 1st September, 2008) Lam Hoy Lee, Laurie (appointed on 1st September, 2008) Wan Hon Keung (appointed on 16th April, 2008) Sun Tak Keung (appointed on 16th April, 2008) Au Son Yiu (resigned on 16th April, 2008) Tang Tin Sek (resigned on 16th April, 2008) Johnson Lee (resigned on 1st September, 2008) Total emoluments	Directors’ fees HK$’000 210 455 — 180 — — — 80 — — — 58 65 132 1,180	Performance Retirement Salaries related benefit and other incentive scheme benefits payment contributions HK$’000 HK$’000 HK$’000 (note) 438 — — 1,685 — 7 — — — — — — 2,400 1,558 12 1,618 127 12 390 — 8 — — — — — — — — — — — — — — — — — — — — — 6,531 1,685 39	Total 2008 HK$’000 648 2,147 — 180 3,970 1,757 398 80 — — — 58 65 132
			9,435

— I-37 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

For the year ended 31st December, 2007

Name of directors Lam Po Kwai, Frankie Wong Yau Ching, Maria So Man Yee, Katherine Chim Kim Lun, Ricky Cheng Kwok Hing, Andy Lee Yuen Bing, Nina Au Son Yiu Tang Tin Sek Johnson Lee Total emoluments	Directors’ fees HK$’000 — — — — — 30 198 222 198 648	Performance Retirement Salaries related benefit and other incentive scheme benefits payment contributions HK$’000 HK$’000 HK$’000 (note) 2,400 — 48 2,000 656 48 764 164 25 — — — — — — 387 — 19 — — — — — — — — — 5,551 820 140	Total 2007 HK$’000 2,448 2,704 953 — — 436 198 222 198
			7,159

Note: The performance related incentive payment is determined as a percentage of each profitable subsidiary of the Group for the respective year.

During both years, no emolument was paid by the Group to the directors as an inducement to join or upon joining the Group or as compensation for loss of office. None of the Directors has waived any remuneration during both years.

15. EMPLOYEES’ EMOLUMENTS

Of the five highest paid individuals of the Group, four (2007: three) are directors including two directors appointed or resigned during the year, details of whose emoluments as directors are set out in note 14 above. The emoluments of the remaining one (2007: two) highest paid employee, other than directors of the Company, were as follows:

Salaries and other benefits Retirement benefit scheme contributions	2008 HK$’000 755 12 767	2007 HK$’000 2,183 39
		2,222

— I-38 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Emoluments of this remaining one (2007: two) highest paid employee were within the following bands:

Nil — HK$1,000,000 HK$1,000,001 — HK$1,500,000	Number of employees 2008 2007 1 1 — 1 1 2	Number of employees 2008 2007 1 1 — 1 1 2
		2

16. (LOSS) EARNINGS PER SHARE

For continuing and discontinued operations

The calculation of the basic loss per share from continuing and discontinued operations attributable to the ordinary equity holders of the Company is based on the following data:

Loss for the purpose of basic loss per share Number of shares Weighted average number of shares for the purpose of basic loss per share	2008 2007 HK$’000 HK$’000 (1,858,198) (42,169) Number of shares 2008 2007 ’000 ’000 2,656,888 477,926	2007 HK$’000 (42,169)

From continuing operations

The calculation of the basic (loss) earnings per share from continuing operations attributable to the ordinary equity holders of the Company is based on the following data:

Loss for the year attributable to equity holders of the Company _Less:_Loss for the year from discontinued operation (Loss) profit for the purpose of basic earnings per share from continuing operations	2008 HK$’000 (1,858,198) 15,879 (1,842,319)	2007 HK$’000 (42,169) 47,689
		5,520

The denominators used are the same as those detailed above for basic loss per share from continuing and discontinued operations.

— I-39 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

From discontinued operation

The calculation of the basic loss per share from discontinued operation attributable to the ordinary equity holders of the Company is based on the following data:

		2008	2007
		HK$’000	HK$’000
Loss	for the year from discontinued operation	(15,879)	(47,689)
Loss	per share from discontinued operation attributable
to	equity holders of the Company	(HK0.60 cents)	(HK9.98 cents)

The denominators used are the same as those detailed above for basic loss per share from continuing and discontinued operations.

As disclosed in note 35, the convertible bonds shall be converted automatically into new share of the Company at date of maturity. Shares that are issuable solely after the passage of time are not contingently issuable shares and are included in the calculation of basic (loss) earnings per share.

Diluted (loss) earnings per share for both years are not shown as there are no potential ordinary shares subsist during both of the years presented.

— I-40 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

17. PROPERTY, PLANT AND EQUIPMENT

COST At 1st January, 2007 Exchange realignment Additions Disposals Disposal upon disposal of subsidiaries At 31st December, 2007 Exchange realignment Transfers from investment properties Additions Acquired on acquisition of businesses Disposals Disposal upon disposal of subsidiaries At 31st December, 2008 DEPRECIATION AND IMPAIRMENT At 1st January, 2007 Exchange realignment Provided for the year Impairment loss recognised in consolidated income statement Eliminated on disposals Eliminated on disposal of subsidiaries At 31st December, 2007 Provided for the year Eliminated on disposals Eliminated on disposal of subsidiaries At 31st December, 2008 CARRYING VALUES At 31st December, 2008 At 31st December, 2007	Buildings HK$’000 68,911 446 — (13,100) (8,920) 47,337 65 20,319 — 172,367 — (6,572) 233,516 22,696 156 1,579 1,980 (4,565) (3,237) 18,609 2,499 — (3,661) 17,447 216,069 28,728	Coal-related ancillary machinery HK$’000 — — — — — — 90 — — 221,201 — — 221,291 — — — — — — — 4,447 — — 4,447 216,844 —	Plant and machinery HK$’000 266,251 1,236 6,511 (3,199) (24,130) 246,669 — — — — (20,127) (193,151) 33,391 224,915 970 8,585 13,640 (2,210) (20,130) 225,770 4,680 (15,005) (182,054) 33,391 — 20,899	Computer equipment HK$’000 12,363 — 618 (54) (76) 12,851 16 — 333 37,601 — (9,056) 41,745 9,725 — 591 660 (16) (5) 10,955 1,708 — (8,103) 4,560 37,185 1,896	Furniture and fixtures HK$’000 110,712 77 1,436 (181) (3,396) 108,648 — — 190 531 (871) (79,819) 28,679 90,520 62 4,132 5,280 (128) (1,822) 98,044 2,810 (651) (74,239) 25,964 2,715 10,604	Motor vehicles HK$’000 10,205 39 538 (1,726) (1,269) 7,787 9 — — 22,560 (938) (1,995) 27,423 5,642 22 926 440 (1,539) (545) 4,946 1,432 (796) (1,785) 3,797 23,626 2,841	Construction in progress HK$’000 — — — — — — 14 — 1,265 34,900 — — 36,179 — — — — — — — — — — — 36,179 —	Total HK$’000 468,442 1,798 9,103 (18,260) (37,791)
								423,292 194 20,319 1,788 489,160 (21,936) (290,593)
								622,224
								353,498 1,210 15,813 22,000 (8,458) (25,739)
								358,324 17,576 (16,452) (269,842)
								89,606
								532,618

								64,968

As set out in note 3, items of property, plant and equipment except buildings and coal-related ancillary machinery were depreciated at 20% per annum using reducing balance method before 31st October, 2008.

— I-41 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The items of property, plant and equipment are depreciated at the following rates per annum:

Up to 31st October 2008 Buildings Straight-line method over the term of the lease Others Reducing balance method at 20% From 1st November, 2008 onwards Buildings Straight-line method over the term of the lease Coal-related ancillary machinery Straight-line method at 12.5% Others Straight-line method at 20%

The carrying value of properties shown above comprises:

Properties situated on leasehold interest in land: — In Hong Kong under long lease — Outside Hong Kong under medium-term lease	2008 HK$’000 35,515 180,554 216,069	2007 HK$’000 3,118 25,610
		28,728

At 31st December, 2007, due to the continuous losses incurred by a subsidiary, the directors conducted a review of the property, plant and equipment held by that subsidiary and recognised an impairment loss of HK$22,000,000 in the consolidated income statement. The recoverable amount of the relevant property, plant and equipment was determined on the basis of their value in use. The discount rate in measuring the amounts of value in use was 8%.

At 31st December, 2008, the Group pledged buildings having a carrying value of approximately HK$32,542,000 (2007: nil) to secure general banking facilities granted to the Group.

18. PREPAID LEASE PAYMENTS

The Group’s prepaid lease payments comprise: Leasehold interest in land: In Hong Kong under long lease Outside Hong Kong under medium-term lease Analysed for reporting purposes as: Current asset Non-current asset	2008 HK$’000 74,404 6,441 80,845 730 80,115 80,845	2007 HK$’000 1,516 6,625
		8,141

		222 7,919
		8,141

At 31st December, 2008, the Group pledged prepaid lease payments having a carrying value of approximately HK$73,077,000 (2007: nil) to secure general banking facilities granted to the Group.

— I-42 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

19. INVESTMENT PROPERTIES

FAIR VALUE At 1st January, 2007 and 2008 Acquired on acquisition of businesses_(note 38)_ Transfer to property, plant and equipment on 1st October, 2008 Loss on fair value change recognised in the consolidated income statement At 31st December, 2008 All investment properties are situated on land in Hong Kong under long lease.	HK$’000 — 60,552 (20,319) (13,575) 26,658

The fair values of the investment properties at 1st October, 2008 and 31st December, 2008 have been arrived at on the basis of a valuation carried out on these dates by Norton Appraisals Limited, an independent qualified professional valuers not connected with the Group. Norton Appraisals Limited, is a member of the Institute of Valuers, and have appropriate qualifications and recent experiences in the valuation of similar properties in the relevant locations. The valuation was arrived at by reference to comparable market transactions for similar properties in the same locations and conditions.

All of the Group’s property interests held under operating leases to earn rentals or for capital appreciation purposes are measured using the fair value model and are classified and accounted for as investment properties.

At 31st December, 2008, the Group’s investment properties with a carrying value of HK$26,658,000 (2007: nil) were pledged to secure general banking facilities granted to the Group.

20. GOODWILL

COST AND CARRYING AMOUNT At 1st January, 2007 and 2008 Acquisition of businesses_(note 38)_ Impairment loss recognised in the year At 31st December, 2008	HK$’000 — 2,269,645 (1,870,383) 399,262

Particulars regarding impairment testing on goodwill are disclosed in note 22.

— I-43 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

21. OTHER INTANGIBLE ASSET

COST At 1st January, 2007 and 2008 Acquisition of businesses_(note 38)_ At 31st December, 2008 AMORTISATION At 1st January, 2007 and 2008 Charge for the year At 31st December, 2008 CARRYING VALUE At 31st December, 2008 At 31st December, 2007	Export agency HK$’000 — 870,192
	870,192
	— 27,194
	27,194
	842,998
	—

The export agency intangible asset relates to export agency agreement entered into between a PRC coke supplier and a subsidiary of the Company incorporated in Hong Kong, which entitled the Group to have an exclusive right to handle the export business of coke from the supplier. The agreement is effective for 3 years from the agreement date of 1st January, 2007, and will continue to be effective if there is no change related to the contractual parties. The directors of the Company are of the opinion that the sole supplier would obtain the export quota in coming 20 years and have the ability to do so, and that the subsidiary of the Company will continue to handle the export business of coke from the sole supplier for the whole 20-year duration. Taking into consideration of market and competitive information, the management of the Group believes that there exist adequate support that the intangible asset has the estimated useful life of 20 years over which the sole entitlement of export sales by the sole supplier to the Group is expected to generate net cash flows for the Group. The discounted cash flow method, with cash flows projections covering 20 years, being the estimated period of the export agency agreement with the sole supplier, and a discount rate of 13.4%, had been used to estimate the fair value of the intangible asset at date of acquisition. The export agency intangible asset is amortised on a straight-line method over the estimated useful life of 20 years.

Particulars regarding impairment testing on other intangible assets are disclosed in note 22.

— I-44 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

22. IMPAIRMENT TESTING ON GOODWILL AND OTHER INTANGIBLE ASSET

For the purpose of impairment testing, goodwill and other intangible asset have been allocated to two individual CGUs, including one subsidiary in trading – coke segment and one subsidiary in coal-related ancillary business. The carrying amounts of goodwill and the export agency intangible asset as at 31st December, 2008 allocated to these units are as follows:

Huscoke International Group Limited (trading-coke segment) GRG Huscoke金岩和嘉 (coal-related ancillary business segment)	Goodwill 2008 HK$’000 10,718 388,544 399,262	Export agency 2008 HK$’000 842,998 —
		842,998

During the year ended 31st December, 2008, the Group recognised an impairment loss of approximately HK$1,074,495,000 and HK$795,888,000 in relation to goodwill allocated to Huscoke International Group Limited and GRG Huscoke 金岩和嘉 respectively.

This goodwill arising from the acquisition of Pride Eagle Group and Joy Wisdom Group amounted to HK$1,085,213,000 and HK$1,184,432,000 respectively, represented the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets and liabilities of Pride Eagle Group and Joy Wisdom Group. As part of the consideration of the acquisitions, Tranche 1 Bonds and Tranche 2 Bonds (as defined in note 35) were issued. In accordance with HKFRS 3 “Business combinations” issued by HKICPA, the fair value of Tranche 1 Bonds and Tranche 2 Bonds were determined by reference to the market value of the ordinary shares of the Company at the date of completion of the acquisitions of Pride Eagle Group and Joy Wisdom Group. With the unexpected increase in the market value of the ordinary shares of the Company between the date of Agreement (as defined in note 32) and the date of completion of the acquisitions, the goodwill arising from the acquisitions was greater than was expected by the management of the Group when the Agreement was entered into. The Group therefore recognised the excess of the carrying amounts of the CGUs (including goodwill) over the recoverable amounts of the CGUs, which were arrived based on value in use calculations as detailed below, as impairment loss on goodwill.

Huscoke International Group Limited

The recoverable amount of this CGU, representing operating division of trading-coke, has been determined based on value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rate using pre-tax rate that reflect current market assessments of the time value of money and the risks specific to the CGU. The growth rates are based on industry growth forecasts estimated by the management.

— I-45 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The Group prepares cash flows forecasts derived from the most recent financial budgets approved by management for the next 5 years, which is the general development period for the related business and extrapolates cash flows beyond the 5 years based on zero growth rate. The financial budgets and growth rates are estimated according to the stage of operation with reference to the development curve of the industry. The rate used to discount the forecast cash flows for CGU is 14.65%.

GRG Huscoke 金岩和嘉

As explained in note 38 to the consolidated financial statements, the Group is in the process of identifying any intangible assets of Joy Wisdom Group at date of acquisition, thus, the determination of the goodwill disclosed in note 20 to the consolidated financial statements is pending the finalisation of the valuation exercise on the identifiable intangible assets of Joy Wisdom Group. Based on preliminary information available, goodwill of HK$1,184,432,000 is allocated to the CGU at date of acquisition. The recoverable amount of this unallocated goodwill has been determined on the basis of a value in use calculation of this CGU. The recoverable amount is based on certain key assumptions. The Group prepares cash flows forecasts derived from the most recent financial budgets approved by the management for the next 5 years which is the general development period for the related business and extrapolates cash flows beyond the 5 years based on the steady growth rate of 5%. The rate used to discount the forecast cash flows for CGU is 14.65%.

23. AVAILABLE-FOR-SALE INVESTMENTS

	2008	2007
	HK$’000	HK$’000
Club debentures, at fair value	3,448	880

24. RETIREMENT BENEFIT SCHEME

Defined contribution scheme

Since 1st December, 2000, the Group has operated pension scheme under the rules and regulations of the Mandatory Provident Fund Schemes Ordinance (“MPF Scheme”) for all qualifying employees in Hong Kong. The assets of the MPF Scheme are held separately in an independently managed fund. The Group has followed the minimum statutory contribution requirements of 5% of eligible employees’ relevant income. The contributions are charged to the consolidated income statement as incurred.

The relevant PRC subsidiaries are required to make contributions to the state retirement schemes in the PRC based on 3% to 4% of the monthly salaries of their current employees to fund the schemes. The employees are entitled to retirement benefits calculated with reference to their basic salaries on retirement and their length of service in accordance with the relevant government regulations. The PRC government is responsible for the retirement benefits to these retired staff. Therefore, the obligation of the Group is the contributions paid or payable to the state retirement schemes.

The total cost charged to the consolidated income statement of HK$700,000 (2007: HK$3,633,000) represents contributions paid and payable to the schemes by the Group at rates specified in the rules of the schemes.

— I-46 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Defined benefit scheme

A subsidiary of the Company operated a funded defined benefit pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Group in funds under the control of the trustee. The scheme was frozen on 30th November, 2000 and all qualifying employees were transferred to the MPF Scheme. The defined benefit obligations of the scheme were fixed and the past service costs are fully vested. No further contribution was made by the Group since that date.

During the year ended 31st December, 2008, the remaining defined benefit obligations of the scheme with the equivalent value of the scheme’s assets have been transferred to the MPF Scheme as agreed with the relevant qualifying employees.

At 31st December, 2008, the fair value of the scheme’s assets is HK$3,825,000 (2007: HK$5,697,000) and the scheme’s obligations is nil (2007: HK$1,620,000). During the year, the Company recognised the loss on fair value change of the excess of the scheme’s assets over defined benefit scheme’s obligations of HK$252,000 (2007: gain of HK$4,077,000) in the consolidated financial statements.

25. INVENTORIES

Raw materials Work in progress Finished goods	2008 HK$’000 68,725 — 142 68,867	2007 HK$’000 27,754 4,503 12,225
		44,482

26. DEBTORS, BILLS RECEIVABLE AND PREPAYMENTS

Trade debtors and bills receivable _Less:_Allowances for bad and doubtful debts Other debtors and prepayments Advance payments to a minority shareholder of a subsidiary for purchases Advance payments to suppliers Amounts due from related companies	2008 HK$’000 76,015 (2,600) 73,415 3,108 465,000 24,377 21 565,921	2007 HK$’000 66,499 —
		66,499 3,950 — — —
		70,449

— I-47 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The following is an aged analysis of trade debtors and bills receivable net of allowance for doubtful debts at the reporting date:

0-60 days 61-90 days > 90 days	2008 HK$’000 51,740 4,857 16,818 73,415	2007 HK$’000 51,635 7,099 7,765
		66,499

Trade debtors and bills receivable of approximately HK$27,575,000 (2007: HK$22,398,000) and HK$1,297,000 (2007: nil) were denominated in US$ and RMB respectively, the currencies other than the functional currency of the respective group entities.

During the year, the Group discounted bills receivable of HK$3,484,000 (2007: HK$9,441,000) to banks. As part of the transfer, the Group provided the transferees with a credit guarantee over the expected losses of those receivables. Accordingly, the Group continues to recognise the full carrying amount of the receivables and has recognised the cash received on the transfer as a secured other bank loans (see note 33).

The Group allows a credit period of 90 days to its customers. As at 31st December, 2008, trade debtors of approximately HK$16,818,000 (2007: HK$7,765,000), were past due but not provided for as there has not been a significant change in credit quality. The Group does not hold any collateral over the aforesaid trade debtors. The average age of these debtors is 154 (2007: 155) days.

In the opinion of the directors, the Group has maintained long term relationship with existing customers who have a strong financial position. Advance deposits are required from certain customers. The directors consider that such relationship and arrangement enable the Group to limit its credit risk exposure. Before accepting any new customers, the Group will assess the potential customers’ credit quality by reference to the experience of the management and defines credit limit by customers. Such credit limit is reviewed by the management periodically.

Advance payments are requested by the minority shareholder of a subsidiary for purchases of coke for trading. The balances are unsecured, non-interest bearing and to be settled with future purchases.

Movement in the allowance for bad doubtful debts

Balance at beginning of the year Allowance for bad and doubtful debts for trade debtors Written off against trade debtors Balance at end of the year	2008 HK$’000 — 2,600 — 2,600	2007 HK$’000 2,599 — (2,599)
		—

At 31st December, 2008, allowance for bad and doubtful debts are individually impaired trade debtors with an aggregate balance of HK$2,600,000 (2007: nil) which had been in severe financial difficulties. The Group does not hold any collateral over these balances.

The amounts due from related companies are unsecured, non-interest bearing and repayable on demand.

— I-48 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

27. AMOUNTS DUE FROM AND TO A MINORITY SHAREHOLDER OF A SUBSIDIARY

The balances are trading in nature and are unsecured, non-interest bearing and repayable within the credit term. The credit period is 90 days and the balances are aged within 0-60 days.

At the balance sheet date, no amount due from a minority shareholder is past due for which the Group has not provided for impairment loss. The amount due from it is fully settled subsequent to the balance sheet date.

Amount due to a minority shareholder of a subsidiary is denominated in US$, the currency other than the functional currency of respective group entity.

28. INVESTMENTS HELD FOR TRADING

	2008	2007
	HK$’000	HK$’000
Mutual funds	3,243	—

At 31st December, 2008, the portfolio of mutual funds held by the Group includes equity securities listed in Hong Kong. The amount is denominated in US$, the currency other than the functional currency of respective group entity.

29. BANK DEPOSITS AND BANK BALANCES

The Group’s bank deposit of approximately HK$936,000 (2007: HK$2,910,000) has been pledged to secure banking facilities granted to a subsidiary. The pledged bank deposit carried fixed interest rate of 1.35% (2007: 3.76%) per annum.

Short term bank deposits and bank balances included short-term deposits with an original maturity of three months or less. Bank deposits received interest at prevailing market interest rate ranged from 0.05% to 6.87% (2007: 2.75% to 8.25%) per annum.

Bank balances and cash and short-term bank deposits of approximately HK$51,730,000 (2007: HK$4,091,000), nil (2007: HK$25,615,000), nil (2007: HK$14,074,000) and HK$900,000 (2007: HK$4,293,000) were denominated in US$, AUD, NZD and RMB respectively, the currencies other than the functional currency of the respective group entities.

30. CREDITORS, BILLS PAYABLE AND ACCRUED CHARGES

Trade creditors Bills payable Other creditors and accrued charges Advance received from a customer Amount due to a related company	2008 HK$’000 114,417 1,141 55,231 77,500 481 248,770	2007 HK$’000 47,852 3,092 14,549 — —
		65,493

— I-49 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The following is an aged analysis of trade creditors and bills payable as at the reporting date:

0-60 days 61-90 days > 90 days	2008 HK$’000 75,622 5,222 34,714 115,558	2007 HK$’000 39,163 8,889 2,892
		50,944

Trade creditors and bills payable of approximately HK$11,502,000 (2007: HK$7,822,000) and HK$4,580,000 (2007: HK$2,159,000) were denominated in US$ and RMB respectively, the currencies other than the functional currency of the respective group entities.

The amount due to a related company is unsecured, non-interest bearing and repayable on demand.

31. AMOUNT DUE TO A DIRECTOR

The balance is unsecured, non-interest bearing and repayable on demand.

32. PROMISSORY NOTES

Balance at 1st January, 2007 and 2008 Issued upon the acquisition of businesses at fair value_(note 38)_ Imputed interest expenses Repayment for the year Loss on early redemption Balance at 31st December, 2008	2008 HK$’000 — 190,476 2,843 (100,000) 2,713
	96,032

On 11th January, 2008, the Group and Mr. Wu Jixian, an executive director of the Company as appointed on 1st June, 2008, entered into a sale and purchase agreement (the “Agreement”) pursuant to which the Company issued the two promissory notes in the principal amount of HK$100 million each on 16th May, 2008 and 31st October, 2008 respectively with a maturity period of 12 months from the respective dates of issue to Mr. Wu Jixian for the partial settlement of the consideration for the acquisitions of Pride Eagle Group and Joy Wisdom Group respectively. The promissory notes are unsecured and non-interest bearing.

The fair value, represented the present value of the promissory notes, is arrived based on the maturity period of 12 months and an effective interest rate of 5% per annum.

— I-50 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

33. BANK BORROWINGS

Bank borrowings comprise the following: Trust receipt and import loans Export loans Mortgage loans Other bank loans Secured Unsecured Carrying amount repayable: On demand or within one year More than one year, but not exceeding two years More than two years but not more than five years More than five years _Less:_Amounts due within one year shown under current liabilities	2008 HK$’000 — 387,500 55,995 3,483 446,978 443,494 3,484 446,978 397,460 6,509 19,733 23,276 446,978 (397,460) 49,518	2007 HK$’000 26,881 — — 9,441 36,322 — 36,322 36,322 36,322 — — — 36,322 (36,322) —

Export loans represent the loans obtained by the Group to make advance payments to a minority shareholder of a subsidiary for purchases as set out in note 26. The export loan will be settled by receipts from future export sales of coke, or the maturity of the banking facilities granted by the bank in February 2010, whenever earlier.

Other bank loans represent the loans from discounted bills with recourse.

Bank borrowings of approximately HK$390,983,000 (2007: HK$34,394,000) were denominated in US$, the currency other than the functional currency of the respective group entities.

The above borrowings bear interests at floating rates, and thus expose to cash flow interest rate risk. The average effective interest rate is approximately 3.62% (2007: 6.82%) per annum.

— I-51 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

34. SHARE CAPITAL

Authorised: At beginning of the year Increase on 7th April, 2008 (note a) Increase on 23rd July, 2008 (note b) At end of the year Issued and fully paid: At beginning of the year Conversion of convertible bonds (note c) At end of the year	Number of ordinary shares of HK$0.10 each 2008 2007 ’000 ’000 1,000,000 1,000,000 9,000,000 — 10,000,000 — 20,000,000 1,000,000 477,926 477,926 1,335,000 — 1,812,926 477,926	Nominal 2008 HK$’000 100,000 900,000 1,000,000 2,000,000 47,793 133,500 181,293	value 2007 HK$’000 100,000 — —
			100,000

			47,793 —
			47,793

Notes:

(a) Pursuant to the resolutions passed at the special general meeting held on 7th April, 2008, the Company increased the authorised share capital from HK$100,000,000 to HK$1,000,000,000 by the creation of 9,000,000,000 new ordinary shares of HK$0.10 each in the capital of the Company.
(b) Pursuant to the resolutions passed at the special general meeting held on 23rd July, 2008, the Company increased the authorised share capital from HK$1,000,000,000 to HK$2,000,000,000 by the creation of 10,000,000,000 new ordinary shares of HK$0.10 each in the capital of the Company.
(c) During the year, the Company received notices of conversion from the holders of the Tranche 1 Bonds (as defined in note 35) exercising the right to convert the convertible bonds in the aggregate principal amount of HK$534,000,000 into 1,335,000,000 ordinary shares of HK$0.10 each in the Company at the conversion price of HK$0.40 per share. These shares rank pari passu in all aspect with other shares in issue.

35. CONVERTIBLE BONDS

Pursuant to the Agreement, the Company issued two tranches of zero coupon convertible bonds, each of which has principal amount of HK$1,100 million to Mr. Wu Jixian on 16th May, 2008 (“Tranche 1 Bonds”) and 31st October, 2008 (“Tranche 2 Bonds”) respectively, with maturity date on the fifth anniversary of the respective dates of issue for the partial settlement of the acquisitions of Pride Eagle Group and Joy Wisdom Group respectively.

The convertible bonds should accrue no interest and are freely transferable, provided that where the convertible bonds are intended to be transferred to a connected person (as defined in the Listing Rules) of the Group (other than the associates of the bondholder) such transfer shall comply with the requirements under the Listing Rules and/or requirements imposed by the Stock Exchange, if any.

— I-52 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The bondholder may at any time during the five years from the respective dates of issue convert the whole or part of the principal amount of the convertible bonds into new ordinary shares of the Company at the conversion price of HK$0.40 per share, provided that (i) no conversion rights attached to the convertible bonds may be exercised, to the extent that following such exercise, a holder of the convertible bonds and parties acting in concert with it, taken together, will directly or indirectly, control or be interested in 30% or more of the entire issued shares of the Company (or in such percentage of the issued share capital of the Company as may from time to time be specified in the Hong Kong Code on Takeovers and Mergers as being level for triggering a mandatory general offer); and (ii) no holder of the convertible bonds shall exercise the conversion right attached to the convertible bonds held by such holders if immediately after such conversion, the public float of the shares fall below the minimum public float requirement stipulated under Rule 8.08 of the Listing Rules as required by the Stock Exchange. The conversion price of HK$0.40 per share is subject to adjustment for consolidation, subdivision or re-classification of shares, capital reduction, rights issues and other events which have diluting effects on the issued share capital of the Company. Any convertible bonds which remain outstanding on the maturity date shall be converted automatically into the new share of the Company under the same terms as mentioned above.

The convertible bonds are equity instrument containing equity element only and are presented in equity heading “convertible bonds reserve”.

The total number of ordinary shares to be converted from the convertible bonds is 5,500 million of HK$0.10 each. The fair value of convertible bonds are determined by reference to the quoted market price of the ordinary shares of the Company, being HK$0.66 and HK$0.57 for each ordinary share, at respective issuance dates of Tranche 1 Bonds and Tranche 2 Bonds.

The movement of the amount of the convertible bonds during the year is set out below:

At 1st January, 2007 and 2008 Issued during the year, upon the acquisitions of businesses_(note 38)_ Converted during the year At 31st December, 2008	HK$’000 — 3,382,500 (881,100) 2,501,400

At the time when the convertible bonds are converted into ordinary shares of the Company, the nominal value of share capital issued upon conversion will be transferred from the convertible bonds reserve to the share capital account while the difference between the fair value of the convertible bonds at their issuance dates and the nominal value of share capital issued will be transferred from the convertible bonds reserve to the contributed surplus account. During the year, convertible bonds with aggregate carrying amount of HK$881,100,000 (principal amount of HK$534,000,000) were converted into 1,335,000,000 number of the Company’s shares. Accordingly, HK$133,500,000 was transferred to share capital account while HK$747,600,000 was transferred to contributed surplus account. If the remaining convertible bonds with an aggregate carrying amount of HK$2,501,400,000 are fully converted into ordinary shares of the Company subsequently, HK$416,500,000 will be transferred to the share capital account while the remaining HK$2,084,900,000 will be transferred to the contributed surplus account.

— I-53 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

36. SHARE OPTION SCHEME

The Company’s share option scheme (the “Scheme”), was adopted pursuant to a resolution passed on 31st May, 2002 for the primary purpose of providing incentives to director and eligible employees, and is effective for a period of 10 years commencing on the adoption date. Under the Scheme, the Board of Directors of the Company may grant options to eligible employees, including directors of the Company and its subsidiaries, to subscribe for shares in the Company.

Options granted must be taken up within 28 days of the date of grant, upon payment of HK$1 per option. Options may be exercised at any time from the date of grant of the share option to the expiration of the Scheme. The exercise price is determined by the directors of the Company, and will not be less than the higher of (i) the closing price of the Company’s shares on the date of grant, (ii) the average closing price of the shares for the five business days immediately preceding the date of grant; and (iii) the nominal value of the Company’s share.

No share options were granted or exercised since date of adoption and there was no outstanding share option at the balance sheet date.

37. DEFERRED TAXATION

The following are the major deferred tax liabilities and assets recognised and movements thereon during the current and prior reporting periods:

At 1st January, 2007 (Credit) charge to consolidated income statement for the year At 31st December, 2007 Acquisition of businesses (note 38) Credit to consolidated income statement for the year Effect of change in tax rate At 31st December, 2008	Accelerated tax depreciation HK$’000 4,854 (2,552) 2,302 151 (982) (132) 1,339	Tax losses HK$’000 (168) 168 — (231) (211) — (442)	Fair value of investment properties HK$’000 — — — 2,219 (2,325) — (106)	Fair value adjustments on business combination HK$’000 — — — 147,583 (4,487) — 143,096	Total HK$’000 4,686 (2,384)
					2,302 149,722 (8,005) (132)
					143,887

Starting from 1st January, 2008, the tax law of the PRC requires withholding tax upon the distribution of undistributed retained profits earned by the PRC subsidiaries to the foreign shareholders. Deferred tax has not been provided for in the consolidated financial statements in respect of the temporary differences attributable to such profits amounting to approximately HK$52,298,000 as the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

— I-54 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

At the balance sheet date, the Group has estimated unused tax losses of approximately HK$16,222,000 (2007: HK$38,433,000) available for offset against future profits. At 31st December, 2008, a deferred tax asset had been recognised in respect of approximately HK$2,675,000 (2007: nil), no deferred tax asset has been recognised in respect of the remaining HK$13,547,000 (2007: HK$38,433,000) due to the uncertainty of future profit streams. The losses may be carried forward indefinitely.

38. ACQUISITION OF BUSINESSES

(i) Acquisition of Pride Eagle Investments Limited and its subsidiaries (“Pride Eagle Group”)

On 16th May, 2008, the Group acquired the entire share capital of Pride Eagle Group for a total consideration of approximately HK$1,912 million. The total consideration has been settled by the issue of Tranche 1 Bonds and a promissory note with a principal amount of HK$1,100 million and HK$100 million, respectively. The transaction has been accounted for using the purchase method of accounting.

The net assets acquired in this acquisition are as follows:

Acquiree’s
carrying
amount
before
combination
Fair value
adjustments
HK$’000
HK$’000
Net assets acquired:
Property, plant and equipment
13,720
—
Prepaid lease payments
49,148
24,249
Other intangible assets_(note 21)
—
870,192
Investment properties
60,552
—
Available-for-sale investment
2,568
—
Debtors, bills receivable and
prepayments
351,384
—
Investments held for trading
3,183
—
Bank balances and cash
3,238
—
Creditors, bills payable and accrued
charges
(86,059)
—
Tax payable
(21,497)
—
Deferred taxation
(2,139)
(147,583)
Bank borrowings
(293,839)
—
80,259
746,858
Goodwill
Total consideration
Satisfied by:
Convertible bonds(note)
Promissory note(note)_
Directly attributable costs
Net cash inflow arising on acquisition:
Bank balances and cash acquired
Directly attributable costs paid

Fair value
HK$’000
13,720
73,397
870,192
60,552
2,568
351,384
3,183
3,238
(86,059)
(21,497)
(149,722)
(293,839)
827,117
1,085,213
1,912,330
1,815,000
95,238
2,092
1,912,330
3,238
(2,092)
1,146

— I-55 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Pride Eagle Group principally engages in the trading of coke and property investment. The goodwill arising on the acquisition of Pride Eagle Group is attributable to the anticipated profitability of the trading of coke business.

Pride Eagle Group contributed HK$677,077,000 to the revenue and a loss of HK$12,857,000 to the Group’s loss before tax for the period between the date of acquisition and 31st December, 2008.

If the acquisition had been completed on 1st January, 2008, total Group’s revenue for the year ended 31st December, 2008 would have been HK$1,931,446,000, and loss for the year ended 31st December, 2008 would have been HK$1,756,432,000. The pro forma information is for illustrative purposes only and is not necessarily an indication of revenue and profit for the year of the Group that actually would have been achieved had the acquisition been completed on 1st January, 2008, nor is it intended to be projection of future results.

(ii) Acquisition of Joy Wisdom Group

On 31st October, 2008, the Group acquired the entire share capital of Joy Wisdom Group for total agreed consideration of approximately HK$1,665 million. The total agreed consideration has been settled by the issue of Tranche 2 Bonds and a promissory note with a principal amount of HK$1,100 million and HK$100 million, respectively. The transaction has been accounted for using the purchase method of accounting.

— I-56 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The net assets acquired in the transaction are as follows:

	Acquiree’s carrying
	amount before
	combination and
	provisional fair value
	HK$’000
Net assets acquired:
Property, plant and equipment	475,440
Inventories	62,917
Debtors, bills receivable and prepayments	52,330
Amount due from a minority shareholder of a subsidiary	35,533
Bank balances and cash	144
Creditors, bills payable and accrued charges	(79,700)
Tax payable	(12,216)
	534,448
Minority interests	(53,446)
Goodwill	1,184,432
Total consideration	1,665,434
Satisfied by:
Convertible bonds_(note)_	1,567,500
Promissory note_(note)_	95,238
Directly attributable costs	2,696
	1,665,434
Net cash outflow arising on acquisition:
Bank balances and cash acquired	144
Directly attributable costs paid	(2,696)
	(2,552)

Joy Wisdom International Limited is an investment holding company which in turn holds 90% of the registered capital of GRG Huscoke 金岩和嘉. GRG Huscoke 金岩和嘉 principally engages in the coal-related ancillary businesses which include the businesses of coal washing service, electric power generation, transport services in respect of coal and other ancillary materials and generation of heat. The goodwill arising on the acquisition of Joy Wisdom Group is attributable to the anticipated profitability of its businesses.

Joy Wisdom Group contributed HK$217,424,000 to the revenue and a profit of HK$71,369,000 to the Group’s loss before tax for the period between the date of acquisition and the 31st December, 2008.

If the acquisition had been completed on 1st January, 2008, total Group’s revenue for the year ended 31st December, 2008 would have been HK$1,591,520,000, and loss for the year ended 31st December, 2008 would have been HK$1,815,999,000. The pro forma information is for illustrative purposes only and is not necessarily an indication of revenue and profit for the year of the Group that actually would have been achieved had the acquisition been completed on 1st January, 2008, nor is it intended to be projection of future results.

— I-57 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The Group is in the process of identifying any intangible assets of Joy Wisdom Group at date of completion of the acquisition, thus, the determination of the goodwill disclosed herein is preliminary and subject to revision once the Company completes its valuation exercise and upon the receipt of professional valuations.

Note: The determination of the fair value of the promissory notes and convertible bonds are set out in notes 32 and 35 respectively.

39. DISPOSAL OF SUBSIDIARIES

(i) As disclosed in note 12, on 31st October, 2008, the Group discontinued its manufacturing and sale of other consumer products operations by the disposal of its subsidiaries, Bigfield Group. The net assets of Bigfield Group at the date of disposal were as follows:

Property, plant and equipment Prepaid lease payments Inventories Debtors, bills receivable and prepayments Bank balances and cash Creditors, bills payable and accrued charges Gain on disposal of subsidiaries Total consideration settled by cash Net cash inflow arising on disposal of subsidiaries: Cash consideration Bank balances and cash disposed of	HK$’000 20,751 151 5,158 5,487 4,431 (8,353) 27,625 8,375 36,000 36,000 (4,431) 31,569

The impact of Bigfield Group on the Group’s results and cash flows in the current and prior periods is disclosed in note 12.

— I-58 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

(ii) During the year ended 31st December, 2007, the net assets of the subsidiaries at the date of disposal/liquidation were as follows:

Property, plant and equipment Prepaid lease payments Inventories Debtors, bills receivable and prepayments Bank balances and cash Creditors, bills payable and accrued charges Exchange gain realised Loss on disposal/liquidation of subsidiaries Total consideration settled by cash Net cash inflow arising on disposal/liquidation of subsidiaries: Cash consideration Bank balances and cash disposed of	HK$’000 12,052 3,332 463 1,888 2,131 (2,906)
	16,960 (5,107)
	11,853 (3,573)
	8,280

	8,280 (2,131)
	6,149

The subsidiaries disposed/liquidated during the year ended 31st December, 2007 had no significant contribution to the Group’s operating results and cash flows for the year ended 31st December, 2007.

40. PLEDGE OF ASSETS

At 31st December, 2008, other than the pledged bank deposit as disclosed in note 29, the Group pledged certain buildings, prepaid lease payments and investment properties which have an aggregate carrying value of approximately HK$32,542,000 (2007: nil), HK$73,077,000 (2007: nil) and HK$26,658,000 (2007: nil) respectively and the benefits of the leases and tenancies of the investment properties to secure general banking facilities granted to the Group.

41. CAPITAL COMMITMENTS

	2008	2007
	HK$’000	HK$’000
Capital expenditure in respect of acquisition of property,
plant and equipment contracted for but not provided in
the consolidated financial statements	66	184

In addition, at 31st December, 2008, the Group had the capital commitment in relation to a conditional sale and purchase agreement entered into on 21st April, 2008 for the acquisition of the entire issued share capital of Oden Group Limited (the “Oden’s Agreement”). The consideration of HK$2,400 million (subject to adjustment) shall be satisfied by the Company on completion of the acquisition by issue of convertible bonds. The acquisition has not yet been completed up to the balance sheet date.

— I-59 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

42. OPERATING LEASE COMMITMENTS

The Group as lessee

At the balance sheet date, the Group had commitments for future minimum payments under non-cancellable operating leases in respect of leasehold interest in land and rented properties which fall due as follows:

Within one year In the second to fifth year inclusive Over 5 years	2008 HK$’000 1,144 1,918 7,033 10,095	2007 HK$’000 8,246 7,401 —
		15,647

Leases are negotiated for a term of one to twenty years and rentals are fixed for the leased period.

The Group as lessor

Property rental income earned by the Group during the year was approximately HK$791,000 (2007: nil). The properties held have committed tenants for lease terms of 2 years.

At the balance sheet date, the Group had contracted with tenants for the following future minimum lease payments:

	2008	2007
	HK$’000	HK$’000
Within one year	151	—

43. RELATED PARTY TRANSACTIONS

(a) During the year, the Group entered into the following transaction with a related party:

	2008	2007
	HK$’000	HK$’000
Sales of refined coal and electricity to a minority
shareholder of a subsidiary	210,022	—
Purchases of coke from a minority shareholder of
a subsidiary	625,165	—
Rental expense to a related company	1,200	1,200
Management fee income from a related company	495	—

The related companies are companies in which certain directors of the Company have beneficial interests. Rental expense was for the provision of quarters to certain directors of the Company and has been included in directors’ emoluments.

Details of balances with related companies and a minority shareholder of a subsidiary are set out in the consolidated balance sheet and notes 26, 27, 30, 31 and 38 to the consolidated financial statements.

— I-60 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year was as follows:

Salaries and other short term employee benefits Retirement benefit costs	2008 HK$’000 10,649 55 10,704	2007 HK$’000 9,202 179
		9,381

The remuneration of directors and key executives is determined having regard to the performance of individuals and market trends.

44. MAJOR NON-CASH TRANSACTIONS

On 16th May, 2008 and 31st October, 2008, the Group acquired the entire issued share capital of Pride Eagle Group and Joy Wisdom Group respectively. The aggregate purchase consideration was HK$2,400 million each, which were satisfied by the issue of HK$2,200 million convertible bonds and HK$200 million promissory notes by the Company. Details of these are set out in note 38 (i) and (ii).

45. POST BALANCE SHEET EVENTS

The following events took place subsequent to the balance sheet date:

(a) On 31st January, 2009, the Oden’s Agreement was lapsed as agreed between the Group and the vendor, because some of the conditions for the acquisition had not been satisfied nor waived.
(b) On 27th February, 2009, the Company granted 5,500,000 options under the option scheme to certain directors of the Company and other employees with exercisable period from 27th February, 2009 to 26th February, 2014. Each share option shall entitle the holder of the share option to subscribe for one ordinary share of the Company at an exercise price of HK$0.50 per share.

— I-61 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

46. PARTICULARS OF SUBSIDIARIES OF THE COMPANY

				Proportion of	Proportion of
	Country/		Nominal value	nominal value of
	place of	Principal	of issued/	issued/registered
	incorporation	place of	registered	capital held
Name of company	or registration	operation	capital	by the Company		Principal activities
				2008	2007
Rich Key Enterprises	British Virgin	Hong Kong	Ordinary —	100%	—	Investment holding
Limited	Islands		US$1
Pride Eagle Investments	British Virgin	Hong Kong	Ordinary —	100%	—	Investment holding
Limited	Islands		US$1
Huscoke International	Hong Kong	Hong Kong	Ordinary —	100%	—	Trading of coke
Group Limited			HK$10,000
Ocean Signal Limited	Hong Kong	Hong Kong	Ordinary —	100%	—	Properties holding
			HK$10,000
Joy Wisdom	British Virgin	Hong Kong	Ordinary —	100%	—	Investment holding
International Limited	Islands		US$1
Huscoke International	Hong Kong	Hong Kong	Ordinary —	100%	—	Investment holding
Investment Limited			HK$10,000
GRG Huscoke	PRC	PRC	HK$500,000,000	90%	—	Coal-related ancillary businesses
金岩和嘉 (note i)						— coal washing and generation
						of electric power and heat
Big Field (B.V.I.)	British Virgin	Hong Kong	Ordinary —	—	100%	Investment holding
Limited_(note ii)_	Islands		US$600
Bigfield Goldenford	Hong Kong	Hong Kong	Ordinary —	—	100%	Manufacture of wooden and paper
Holdings Limited			HK$153,000			products
(note ii)			Deferred —
			HK$147,000
			(note iii)
Dominion Trading Ltd.	British Virgin	Hong Kong	Ordinary —	100%	100%	Investment holding, property and
	Islands		US$100			share investment
Frankie Dominion	British Virgin	Hong Kong	Ordinary —	100%	100%	Investment holding
(B.V.I.) Company	Islands		US$35,000
Limited

— I-62 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

				Proportion of	Proportion of
	Country/		Nominal value	nominal value of
	place of	Principal	of issued/	issued/registered
	incorporation	place of	registered	capital held
Name of company	or registration	operation	capital	by the Company		Principal activities
				2008	2007
Frankie Dominion	Hong Kong	Hong Kong	Ordinary —	100%	100%	Investment holding, property
(Holdings) Limited			HK$1,000			investment and design,
			Deferred —			manufacture and sale of a
			HK$35,000,000			diversified range of consumer
			(note iii)			home products
Frankie Trading	Hong Kong	Hong Kong	Ordinary —	100%	100%	Inactive
Company Limited			HK$5,000,000
Home Mart Store	Hong Kong	Hong Kong	Ordinary —	100%	100%	Inactive
Limited			HK$5,000,000
Michel Manufactory	Hong Kong	Hong Kong	Ordinary —	100%	100%	Inactive
Limited			HK$10,000
Frankie Dominion	PRC	PRC	HK$3,000,000	100%	100%	Net yet commence business
(Guangzhou) Trading
Limited (“Frankie
Dominion Trading”)
嘉利興（廣州）貿易有限
公司（“嘉利興”）(note iv)

Notes:

(i) GRG Huscoke 金岩和嘉 is a sino-foreign equity joint venture company established in the PRC. Under the joint venture agreement, the Group is responsible to contribute HK$450,000,000 to the registered capital, share 90% of the profits and losses and entitle to 90% voting rights of GRG Huscoke 金岩和嘉.
(ii) The companies were disposed of during the year ended 31st December, 2008.
(iii) The deferred shares, which are not held by the Group, carry minimal rights to dividends or to receive notice of or attend or vote at any general meeting of these companies. On a winding-up, the holders of the deferred shares are entitled to share out of the surplus assets of these companies only after a total of HK$100,000,000,000,000,000 has been distributed to the holders of the ordinary shares.
(iv) Frankie Dominion Trading 嘉利興 is a wholly owned foreign enterprise.

None of the subsidiaries had any debt securities subsisting at the end of the year or at any time during the year.

— I-63 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

3. INDEBTEDNESS STATEMENT

Borrowings

As at the close of business on 31 December 2009, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Enlarged Group had the following outstanding borrowings:

Bank borrowings — secured_(Note) Promissory note — unsecured _Note: Bank borrowings comprise the following: Export loans Mortgage loans	HK$’000 376,669 15,000
	391,669

	HK$’000 333,469 43,200
	376,669

Contingencies

The Enlarged Group did not have any material contingent liabilities or guarantees as at 31 December 2009.

Disclaimer

Save as aforesaid and apart from intra-group liabilities, as at the close of business on 31 December 2009, the Enlarged Group had no debt securities issued and outstanding, and authorised or otherwise created but unissued, term loans, distinguishing between guaranteed, unguaranteed, secured and unsecured, and guaranteed, unguaranteed, secured and unsecured bank borrowings including, bank loans and overdrafts or other similar indebtedness, liabilities under acceptances (other than normal trade bills) or acceptance credit, mortgage, charges, hire purchase or finance lease commitments, guarantees or other material contingent liabilities.

Save as aforesaid, the Directors confirm that there has been no material change to the indebtedness and contingent liabilities of the Enlarged Group since 31 December 2009 and up to the Latest Practicable Date.

— I-64 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

4. SUFFICIENCY OF WORKING CAPITAL

As at the Latest Practicable Date, after due and careful enquiry, the Directors are of the opinion that, in the absence of unforeseen circumstances and after taking into account the present internal financial resources of the Enlarged Group (including principally cash at bank and listed securities investment), the Enlarged Group will, immediately following the completion of the Acquisition, have sufficient working capital for at least 12 months from the date of this circular.

5. MATERIAL ADVERSE CHANGE

The Directors confirm that there is no material adverse changes in the financial or trading position of the Group since 31 December 2008, the date to which the latest audited consolidated financial statements of the Group were made.

6. MANAGEMENT DISCUSSION AND ANALYSIS

For the year ended 31 December 2008

Business Review

The Group’s turnover for continuing operations for the year ended 31st December, 2008 has been sharply increased by 370.71% to approximately HK$1,235.09 million compared to that of 2007 of approximately HK$262.39 million. The substantial increase in turnover was contributed by the new development of the coal related businesses acquired during the year. In 2008, the Group has completed the acquisitions of two businesses i.e. the coal trading and coal-related ancillary businesses on 16th May, 2008 and 31st October, 2008 respectively. These two new businesses contributed the Group’s revenue by HK$676.29 million and HK$217.42 million respectively. In 2008, the Group has engaged in the following five segments and their performances can be summarized as follows:

Trading — coke (newly acquired business)

The Group completed the acquisition of this new business on 16th May, 2008, which relates to the trading of PRC’s coke to overseas customers. From 16th May, 2008 to 31st December, 2008, this segment contributed additional revenue of HK$676.29 million to the Group. Excluding the amortisation of other intangible asset and impairment loss on goodwill amounting to HK$27.19 million and HK$1,074.50 million respectively, net profit for this segment was around HK$39.73 million for the period. The Group has an exclusive right to export coke from the minority shareholder of a subsidiary to overseas’ customers. In 2008, this supplier controls around 4.2% PRC export quotas for coke.

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FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Trading — others

This segment mainly related to the trading of variety range of household products. Turnover of this segment for the year increased greatly by 80.03% to approximately HK$298.43 million representing around 24.16% of the Group’s revenue for continuing operations. The amount of segment profits for the year has been increased by 111.12% to nearly HK$20.09 million. Such increase was mainly due to the reallocation of resources from the manufacturing sections to the trading section as the management believes that in economic downturn, trading business contributes more stable income than the manufacturing section.

Manufacturing of household products

This division mainly engaged in the manufacturing and sale of PVC bag, cushion, shower and window curtain, oven mitten and other household products. The division recorded a revenue of approximately HK$42.16 million for the year, representing 56.37% decrease compared to last year’s figures. Segment profit of this division was decreased by 80.20% to approximately HK$4.23 million.

Coal related ancillary businesses (newly acquired business)

To further expand and diversify the Group’s business, the Group has completed the acquisition of the coal-related ancillary business on 31st October, 2008. This business related to the business of coal washing, using the by-products in the washing process for electricity and heat generation and a transportation team. After the completion of this acquisition, coal prices have been greatly reduced due to the outbreak of the economic tsunami in late 2008 which has improved the profits margin for this segment. The new division contributed a turnover of HK$217.42 million and excluding an impairment loss on Goodwill amounting to HK$795.89 million, an operating net profit amounting HK$71.27 million was recorded.

Manufacturing of others (discontinued operations)

This division engaged in the manufacturing and sales of wooden and paper products and has recorded a turnover of approximately HK$135.99 million. This segment generated a segment loss of approximately HK$25.35 million to the Group. With the continuous loss generated in this segment, the Group has disposed all the interests of this segment based on the net assets value of this segment as at 30th June, 2008 and the disposal has been completed on 31st October, 2008.

— I-66 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Overall Gross Profits

With the contributions from the two newly acquired businesses and the disposal of the loss making business stated above, the Group overall operating gross profits ratio (before amortisation of other intangible asset) has been increased from 2007’s 3.9% to current year’s 10.3%.

Finance Costs

Interests expenses increased greatly from 2007’s HK$4.37 million to current year’s HK$13.34 million. The increase was mainly generated from the funding used for the trading of coke business acquired in 2008.

Impairment Loss on Goodwill

In 2008, the Group has carried out two very substantial acquisitions to develop the coal related businesses. To finance these acquisitions, the Group issued two tranches convertible bonds and promissory notes. The aggregate principal values of these convertible bonds at the agreement dates are HK$2,200 million. In applying the Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, these convertible bonds should be recorded at fair value at the dates of completions. With reference to the share prices at the dates of completions, i.e. 16th May, 2008 and 31st October, 2008, the aggregate fair values of these convertible bonds rise to HK$3,382.5 million. The increase in the value of convertible bonds increased the Goodwill arising from acquisitions by HK$1,182.5 million and ultimately has been fully impaired as at 31st December, 2008. Also, the newly acquired coal related businesses are expected to be affected by the economic tsunami happened in late 2008 which has increased the amount of impairment loss on Goodwill.

This great impairment loss on Goodwill will not affect the Group’s operations since it will not affect the financial and cashflow positions of the Group. It is one-off non operating loss recorded in the year 2008. For future distribution of dividend, the increase in fair value will create a large amount in convertible bonds reserve or after conversion, transfer to the contributed surplus account. Since both accounts can be distributed by nature, the Group future potential ability for dividend distribution will not be affected.

— I-67 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Charges over Assets

Around HK$32.54 million (2007: nil) of building, HK$73.08 million (2007: nil) of prepaid lease payments, HK$26.66 million (2007: nil) of investment properties and HK$0.94 million (2007: HK$2.91 million) of bank deposit have been charged to secure banking facilities granted to various subsidiaries. Save as disclosed above, no other property, plant and equipment with any carrying value is pledged to any bank to secure banking facilities granted to subsidiaries.

Liquidity and Financial Resources

Net current assets and current ratio were approximately HK$64.72 million and 1.08:1 as at 31st December, 2008. At 31st December, 2007 the amount was HK$101.2 million and 1.99:1. The decrease in current ratio is largely due to the issuance of promissory notes amounting to HK$200 million to finance the acquisitions of both coal trading and coal-related ancillary business and the raising of bank loan for the advance payment required for the coke trading business.

The Group’s bank balances and cash equivalents amounted to approximately HK$68.02 million (31st December, 2007: approximately HK$85.1 million). Bank borrowings amounted to approximately HK$446.98 million. Around HK$387.50 million of the bank borrowings was the structured trade finance for the coke export business and around HK$55.99 million bank borrowings was the mortgaged loan for various properties located in Hong Kong.

Employees and Remuneration

As at 31st December, 2008, the Group had approximately 930 employees (31st December, 2007: approximately 2,700 employees). Less than 100 staffs are stationed in Hong Kong and the rest are PRC workers. The Group’s staff cost for continuing operations amounted to approximately HK$28.01 million for the year ended 31st December, 2008 and approximately HK$25.36 million was recorded in last corresponding period.

Employees are remunerated according to the nature of the job and market trends, with a built-in merit component incorporated in the annual increment and a yearend performance bonus to reward motivate individual performance. Up to the date of this report, there are 5,500,000 share options granted under the share option scheme.

— I-68 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Main Acquisitions and New Business Development

In 2008, as stated above, the Group has completed the acquisitions of the coke trading business and the coal-related ancillary business on 16th May, 2008 and 31st October, 2008 respectively. To finance both acquisitions, the Group has issued HK$100 million promissory notes and HK$1,100 million convertible bonds for each of the acquisitions. Both convertible bonds have the exercisable period of five years and are at zero coupon rates. For the fair value of these convertible bonds, please refer to the section “IMPAIRMENT LOSS ON GOODWILL” stated above.

With the continuous poor performance of the Manufacturing — Others segment in the previous two financial years ended 31st December, 2007 and the six months ended 30th June, 2008, the Group has disposed this segment at 31st October, 2008 at the consideration of HK$36 million. The consideration was determined after arm’s length negotiation with reference to the unaudited consolidated net assets value of this segment.

Prospects

After the above two acquisitions and the disposal stated above, the Group starts to engage in coal related businesses. Currently, the demand for PRC export coke has been greatly reduced due to both the economic tsunami and the increase in the PRC export tax. It is expected that in medium terms, in order to stimulate the economy, overseas governments will increase their spendings in infrastructure which will ultimately increase the demand for coke as the necessary resources in steel production. In the supply side, due to the PRC’s quota system on export coke, quantities for export coke are fixed and surely not adequate to meet with international demand. The price of PRC exported coke will surely be increased.

To further increase the profitability of the Group, management will continue to investigate the possibilities for expanding the Group’s capacity and for securing more coal as raw materials for coal washing. The Group may consider undertaking the coal mines nearby in order to purchase coal at discounted prices or to acquire a coke processing plant to become an integrated coke producer and exporter. Management considers that both moves can enlarge the profits margin of the Group.

With the expected increase in steel production in countries like USA, the PRC, Russia and Europe, demands for PRC’s coke will surely be increased in the coming years. It supports our management’s view and decision to engage in the coal related business. Overall, management believes the repositioning of the Group’s

— I-69 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

business by disposing the loss making business and acquiring profits generated coal related business is a successful move for the Group’s long term development and management is optimistic in the prospects of the Group.

For the year ended 31 December 2007

Business review

The Group’s turnover in the year ended 31st December, 2007 decreased by 10.37% to approximately HK$640,635,000 compared to the corresponding period in 2006 of approximately HK$714,731,000. The dominant markets in Europe constituted 56.68% of the turnover amounting to approximately HK$363,141,000 (2006: 56.53% amounting to HK$404,057,000). North American sales, as a percentage of turnover increased by 1.77% to 34.38% amounting to approximately HK$220,249,000 (2006: 32.61% amounting to HK$233,107,000). South American sales slightly increased to 0.64% amounting to approximately HK$4,143,000 (2006: 0.53% amounting to HK$3,811,000). Sales in other markets decreased to the amount of approximately HK$31,389,000 (2006: HK$36,819,000). Product sales in the Hong Kong market constituted 3.39% of the turnover amounting to approximately HK$21,713,000 (2006: 5.17% amounting to HK$36,937,000).

Gross Profit

The Group’s gross profit margin was 3.86% (2006: 9.69%), a decrease of 583 basis points from 2006. Management continues to work on margin improvement, mainly by offering meaningfully differentiated and high value-added products and reducing cost of goods through better sources and cost control.

Product Categories

Sales of the major products out of the Group’s turnover in 2007 were 25.60% for paper products (2006: 25.65%), 32.66% for wooden products (2006: 31.93%) and 41.74% for household items, home textiles products and tablemats (2006: 42.42%).

Finance Costs

Interest expenses decreased by 24.58% to approximately HK$4,369,000 in 2007 (2006: HK$5,793,000) as a result of decreasing bank borrowings during the year.

— I-70 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Charges over assets

Save for a bank deposit of approximately HK$2.9 million (2006: HK$2.8 million), no other property, plant and equipment with any carrying value is pledged to banks to secure banking facilities granted to subsidiaries.

Exposure to fluctuations in exchange rates and related hedges

All transactions of the Group are denominated in Hong Kong dollars, United States dollars and Renminbi. Transactions in foreign currency are translated at the rates prevailing on the dates of the transactions or at the contracted settlement rate. The exchange rates between these currencies were stable during the year under review, save in respect of the gradual appreciation of Renminbi against US dollars and Hong Kong dollars. No hedging for foreign exchange was used given the Group’s exposure to currency fluctuation was still relatively limited.

Liquidity and financial resources

Net current assets and current ratio were approximately HK$88,770,000 and 1.53:1 as at 31st December, 2006 and approximately HK$101,220,000 and 1.99:1 as at 31st December, 2007. The increase in net current assets is largely due to a decrease in bank borrowings and proceeds from disposal of properties. Raw material, workinprogress and finished goods decreased by 34.16% to approximately HK$44,482,000 (2006: HK$67,563,000).

As at 31st December, 2007, the Group’s bank balances and cash amounted to approximately HK$85,090,000 (2006: HK$81,424,000) and bank borrowings amounted to approximately HK$36,322,000 (2006: HK$70,029,000). Therefore, the calculation of net debt to equity ratio was not applicable because the Group had surplus cash of approximately HK$48,768,000 over bank borrowings (2006: HK$11,395,000).

The gearing ratio (defined as total liabilities over the total assets) of the Group as at 31st December, 2007 was approximately 37.09% (2006: 43.59%).

The Group generally finances its business with internally generated cash flows and revolving credit facilities provided by the Group’s principal bankers. With net current assets of approximately HK$101,220,000, the management believes that the Group has sufficient financial resources to discharge its debts and to finance its daily operations and capital expenditure.

— I-71 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Employees and remuneration

The approximate number of employees of the Group as at 31st December, 2007 and 31st December, 2006 were 2,700 and 4,500 respectively with a seasonal high figure of more than 3,600 during the third quarter of 2007. Fewer than 100 staff are stationed in Hong Kong and the rest are PRC workers.

Employees are remunerated according to the nature of the job and market trends, with a built-in merit component incorporated in the annual increment and a yearend performance bonus to reward and motivate individual performance. There was no share option granted to any employee during the year.

For the year ended 31 December 2006

Geographical Market

The Group’s turnover in the year ended 31 December 2006 decreased by 4.38% to approximately HK$714,731,000 compared to the corresponding period in 2005 of approximately HK$747,483,000. The dominant markets in Europe constituted 56.53% of the turnover amounting to approximately HK$404,056,000 (2005: 64.05% amounting to HK$478,751,000). North American sales, as a percentage of turnover increased by 7.42% to 32.61% amounting to approximately HK$233,107,000 (2005: 25.19% amounting to HK$188,270,000). South American sales slightly increased to 0.53% amounting to approximately HK$3,810,000 (2005: 0.47% amounting to HK$3,492,000). Sales in other markets increased to the amount of approximately HK$36,819,000 (2005: HK$33,814,000). Product sales in the Hong Kong market constituted 5.17% of the turnover amounting to approximately HK$36,937,000 (2005: 5.77% amounting to HK$43,153,000).

Gross Profit

The Group’s gross profit margin was 9.69% (2005: 9.68%), an increase of one basis point from 2005. Management continues to work on margin improvement, mainly by offering meaningfully differentiated and high value-added products and reducing cost of goods through better sources and cost control.

Product Categories

Sales of the major products out of the Group’s turnover in 2006 were 25.65% for paper products (2005: 33.92%), 31.93% for wooden products (2005: 26.74%) and 42.42% for household items, home textiles products and tablemats (2005: 39.34%).

— I-72 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Finance Costs

Interest expenses increased by 9.8% to approximately HK$5,793,000 in 2006 (2005: HK$5,276,000) as a result of increasing interest rates on bank borrowings during the year.

Charges over assets

Save for a bank deposit of approximately HK$2.8 million (2005: HK$2.7 million), no other property, plant and equipment with any carrying value is pledged to banks to secure banking facilities granted to subsidiaries.

Exposure to fluctuations in exchange rates and related hedges

The exchange rates between these currencies were stable during the year under review, save in respect of the gradual appreciation of Renminbi against US dollars and Hong Kong dollars. No hedging for foreign exchange was used given the Group’s exposure to currency fluctuation was still relatively limited.

Liquidity and financial resources

Net current assets and current ratio were approximately HK$80,311,000 and 1.46:1 as at 31 December 2005 and approximately HK$88,770,000 and 1.53:1 as at 31 December 2006. The increase in net current assets is largely due to a decrease in bank borrowings. Raw material, work-in-progress and finished goods increased by 0.88% to approximately HK$67,563,000 (2005: HK$66,976,000).

As at 31 December 2006, the Group’s bank balance and cash amounted to approximately HK$81,424,000 (2005: HK$105,061,000) and bank borrowings amounted to approximately HK$70,028,000 (2005: HK$82,316,000). Therefore, the calculation of net debt to equity ratio was not applicable because the Group had surplus cash of approximately HK$11,396,000 over bank borrowings (2005: HK$22,745,000).

The gearing ratio (defined as total liabilities over the total assets) of the Group as at 31 December 2006 was approximately 43.59% (2005: 42.44%).

— I-73 —

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The Group generally finances its business with internally generated cash flows and revolving credit facilities provided by the Group’s principal bankers. With net current assets of approximately HK$88,770,000, the management believes that the Group has sufficient financial resources to discharge its debts and to finance its daily operations and capital expenditure.

Employees and remuneration

The approximate number of employees of the Group as at 31 December 2006 and 31 December 2005 were 4,500 and 4,800 respectively with a seasonal high figure of more than 4,800 during the third quarter of 2006. Fewer than 100 staff are stationed in Hong Kong and the rest are PRC workers.

Employees are remunerated according to the nature of the job and market trends, with a built-in merit component incorporated in the annual increment and a yearend performance bonus to reward and motivate individual performance. There was no share option granted to any employee during the year.

— I-74 —

APPENDIX II FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

The following is the text of a report, prepared for the purpose of incorporation in this circular, received from the independent reporting accountants, HLB Hodgson Impey Cheng, Chartered Accountants, Certified Public Accountants, Hong Kong.

==> picture [226 x 86] intentionally omitted <==

31st Floor Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong

29 January 2010

The Board of Directors

Huscoke Resources Holdings Limited Room 4205, 42th Floor Far East Finance Center

16 Harcourt Road

Admiralty HONG KONG

Dear Sirs,

We set out below our report on the financial information (the “Financial Information”) regarding the Acquired Coke Processing Assets (as defined herein) for each of the three years ended 31 December 2006, 2007 and 2008 and the periods ended 30 September 2008 and 2009 (the “Relevant Periods”) prepared on the basis set out in Section 1 below, for inclusion in the circular of Huscoke Resources Holdings Limited (the “Company”) dated 29 January 2010 (the “Circular”) in relation to the acquisition of coke processing assets (the “Acquired Coke Processing Assets”), pursuant to a conditional sale and purchase agreement (the “Acquisition Agreement”) entered into between 山西金岩和嘉能源有限公司 (GRG Huscoke (Shan Xi) Ltd.) (the “Purchaser”), the Company hold 90% of equity interest in the Purchaser, and 孝義巿金岩電力煤化工有限公司 (Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited) (the “Vendor”) on 10 December 2009 (the “Acquisition”). Particulars of the Acquired Coke Processing Assets are set out in Section 3 below.

The Financial Information of the Acquired Coke Processing Assets has been prepared based on the management accounts of the Vendor, which have adopted 31 December as their financial year end date. The Vendor maintained their books and records in accordance with the relevant accounting principles and financial regulations applicable to the PRC enterprises (“PRC GAAP”).

— II-1 —

APPENDIX II FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

For the purpose of the Acquisition, the directors of the Vendor have prepared the Financial Information of the Acquired Coke Processing Assets in accordance with accounting policies which are in compliance with HK GAAP (as defined in Section 2 below) for the Relevant Periods. The accounting policies adopted in the preparation of the Financial Information of the Acquired Coke Processing Assets is the same as those used in the consolidated financial statements of the Company and its subsidiaries, where applicable.

For the purpose of this report, we have reviewed the Financial Information in accordance with the relevant requirements of Hong Kong Standard on Review Engagements 2400 “Engagements to Review Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Financial Information is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have agreed the Financial Information to the underlying books and records. In the opinion of the Directors, the Financial Information has been properly compiled and derived from the underlying books and records of the Acquired Coke Processing Assets. We have not performed an audit and, accordingly, we do not express an audit opinion.

The Directors of the Company are responsible for the preparation of the Financial Information. It is our responsibility to review the Financial Information and to report our review conclusion to you.

Based on our review, nothing has come to our attention that causes us to believe that the Financial Information is not properly prepared, in all material respects, in accordance with the basis of presentation as set out in Section 1.

1. BASIS OF PRESENTATION

Pursuant to the Acquisition Agreement, the Acquired Coke Processing Assets comprised of plant and machineries for the production of coke and the coalprocessing chemical by-products. The Acquired Coke Processing Assets are currently owned by the Vendor.

The Financial Information of the Acquired Coke Processing Assets is prepared based on the management accounts of the Vendor on a continuing basis as if the Acquired Coke Processing Assets have been under the same ownership with effect from 1 January 2006.

— II-2 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

For the purpose of inclusion in the Financial Information, the financial information on the operating results of the Acquired Coke Processing Assets has been extracted from the management accounts of the Vendor. The Financial Information only includes income and expenses which are directly attributable to the operation of the Acquired Coke Processing Assets, such as sales of products and operating costs for the Acquired Coke Processing Assets. Indirect income and expenses such as general and administrative expenses, finance costs for working capital and non-operating income and expenses, have not been included. Income tax has not been included as it is calculated and levied on an entity level. The Financial Information of the Acquired Coke Processing Assets has been adjusted to comply with the accounting policies as disclosed in Section 2 which are in compliance with HK GAAP.

The Financial Information does not necessarily reflect the results of operations of the Acquired Coke Processing Assets that would have been recorded had they been operated under a stand-alone entity during the Relevant Periods because they have historically been operated by the Vendor and indirect income and expenses and income tax have not been considered.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The Financial Information of the Acquired Coke Processing Assets has been prepared in accordance with accounting policies which are in compliance with accounting principles generally accepted in Hong Kong (“HK GAAP”). The Financial Information has been prepared under the historical cost convention.

Coke Processing Assets

Coke Processing Assets are stated at cost less accumulated depreciation and any accumulated impairment losses.

— II-3 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

An item of Coke Processing Assets is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the year/period in which the item is derecognised.

Impairment

At each end of the reporting period, the directors review, the carrying amounts of the plant and machineries to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalues amount under another standard, in which case the impairment loss is treated as a revaluation decrease under that standard.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount under another standard, in which case the impairment loss is treated as a revaluation increase under that standard.

Revenue recognition

Foreign currencies

In preparing the Financial Information of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At each end of the reporting period,

— II-4 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

monetary items denominated in foreign currencies are retranslated at the rates prevailing on the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in the statement of comprehensive income in the period in which they arise. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in statement of comprehensive income for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity, in which case, the exchange differences are also recognised directly in equity.

Provisions

Provisions are recognised when a present legal or constructive obligation has arisen as a result of past events, and it is probable that an outflow of resources will be required to settle the obligations, and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligations.

Key sources of estimation uncertainty

In the process of applying the accounting policies, management is required to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only the period, or in the period of the revision and future periods if the revision affects both current and future periods.

— II-5 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

(a) Impairment of assets

Impairment tests are carried out annually to determine whether the assets have suffered any impairment. The recoverable amount of an asset or a cash generating unit is determining based on value-in-use calculations which require the use of assumptions and estimates.

(b) Useful lives of the Acquired Coke Processing Assets

The useful lives of the Acquired Coke Processing Assets are estimated in order to determine the amount of depreciation expenses to be recorded. The useful lives are estimated at the time the asset is acquired based on historical experience, the expected usage, wear and tear of the assets, as well as technical obsolescence arising from changes in the market demands or service output of the assets. Annual reviews on whether the assumptions made on useful lives continue to be valid are performed.

3. PARTICULARS OF THE ACQUIRED COKE PROCESSING ASSETS

Particulars of the Acquired Coke Processing Assets are as follows:

Particulars of

Acquired Plants	Structure	Area(m 2)
Coal preparation room	Frame	30
Transformer substation	Frame	602
Crusher room	Frame	535.7
Compression plant, transformer substation	Frame	323.8
Fan room	Frame	105
Pump room	Frame	102.27
Trench pump room	Frame	249.51
Power supply room	Frame	257.46
Aerator room	Frame	541.91
Circulating pump room (power supply room)	Frame	440.78
Ammonia sulphate depot	Frame	1,301.36
High-voltage power supply room, transformer	Frame	928
substation
Boiler room	Frame	1,071.75
Small emission room	Frame	52.17

— II-6 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of

Particulars of
Acquired Plants	Structure	Area(m 2)
Chiller plant	Frame	404.6
Complex building	Frame	967.22
Pump room	Frame	401.5
GAS station office building	Frame	521
GAS station power supply room	Frame	261
GAS station fire pump room	Frame	142
GAS station compressor plant	Frame	333
GAS station control room	Frame	84
GAS station oil pump room No. 1	Frame	28
GAS station oil pump room No. 2	Frame	28
GAS station valve	Frame	25
Single apartment	—	3,910.95
Large restaurant	—	752.95
Small restaurant	—	400.81
Bathroom	—	366.25
Pump room	—	45.76
User station	—	133.3
Front door	—	88.17
Power supply room	—	122.23
Laboratory building	—	1,190.2
Storeroom No. 1	—	348.3
Storeroom No. 2	—	632.2
Machine repair workshop	—	760.9
Guest building	—	1,298
Coal receiving pit	Building structure	926.1
Coal belt conveyor corridor No. 1, 2, 3, 4	Building structure	302
Coal transfer station No. 2	Building structure	—
Coal transfer station No. 3	Building structure	—
Coal corridor No. 4	Building structure	—
Wall fence of plant	Building structure	400
Pipe support of coal preparation system	Building structure	—
Retaining wall of coal preparation system	Building structure	—
Coke transfer station No. 3	Building structure	—
Coke conveyor corridor No. 3	Building structure	72
Coke conveyor corridor No. 4	Building structure	110
Coke transfer station No. 1	Building structure	—

— II-7 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of Acquired Plants

Structure Area(m2)

Coke transfer station No. 2 Building structure — Coke conveyor corridor No. 2 Building structure 34 — Coke cooling wharf Building structure Sub flue No. 1 Building structure — Sub flue No. 2 Building structure — Chimney Building structure 75 — Quenching tower Building structure Settling tank Building structure 1,050 Coal tower Building structure — Tracks for coke barrier vehicles Building structure — Tracks for coal loaders Building structure — — Unloading trestle for washed coal storage plant Building structure — Support of trestle from main plant to washed Building structure coal storage plant South wall fence of coke carbonization plant Building structure 256 Tamping coke furnace dust removal ground Whole structure — station Storage cave Building structure 7 holes — Concrete underground pipe screen (valve well) Building structure — Feeding pipe, trench Pipe installation Coke furnace No. 1 Building structure TNDK-99 Coke furnace No. 2 Building structure TNDK-100 Settling tank Building structure 2,000m3 Plant formation and road hardening Building structure 110,000 Plant forestation — 40,000 Well-oxygenated tank, poor-oxygenated tank Building structure 3,548m3 Coagulated settling tank Building structure 251.2m3 Sludge tank No. 1, No. 2 Building structure 40m3 Sludge tank No. 3 Building structure 40m3 Deposit tank No. 1, No. 2 Building structure 931.28m3 Regulating tank Building structure 480m3 Oil-removing tank Building structure 325.36 — Front gate of coke carbonization plant Building structure Mix response tank Building structure 48m3 Sludge tank No. 4 Building structure 40m3 Sludge concentration tank Building structure 98.91m3 Water tank No. 1 Building structure 40m3

— II-8 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of
Acquired Plants	Structure	Area(m 2)
Water tank No. 2	Building structure	90
Water tank No. 3	Building structure	81
Unloader platform	Building structure	—
GAS station fire pool	Building structure	1,596
GAS station forestation	—	—
Outdoor heating works	—	—
Outdoor water feeder	—	—
Wall fence	—	—
Outdoor water pipe system	—	—
Office zone fountain and rockery	—	—
Office zone ground hardening works	—	—
Street lamps for金岩路(Jun Yan Road)	—	—
Gardening works for west garden of金岩公司	—	—
(Golden Rock Company)
Vegetable greenhouse	—	—
Basketball court in the accommodation area of	—	—
金岩公司(Golden Rock Company)
Automatic doors in the accommodation area	—	—
金岩(Golden Rock) cable television system	—	—
12M street lamps	—	—
Forestation in the accommodation area	—	—

Particulars of the Model Acquired Motor Vehicles Number

Manufacturer Quantity

晉(Jin) JBV501 奇瑞(Qi Rui) SQR7160T11 安徽(Anhui) 1 晉(Jin) JBV502 奇瑞(Qi Rui) SQR7160T12 安徽(Anhui) 1 晉(Jin) JBV503 奇瑞(Qi Rui) SQR7160T13 安徽(Anhui) 1 晉(Jin) JBV509 奇瑞(Qi Rui) SQR7160T14 安徽(Anhui) 1 晉(Jin) JBV601 奇瑞(Qi Rui) SQR7160T15 安徽(Anhui) 1 晉(Jin) JBV609 奇瑞(Qi Rui) SQR7160T17 安徽(Anhui) 1 晉(Jin) JBQ501 奇瑞(Qi Rui) SQR7160T18 安徽(Anhui) 1 晉(Jin) JBQ502 奇瑞(Qi Rui) SQR7160T19 安徽(Anhui) 1 晉(Jin) JBQ503 奇瑞(Qi Rui) SQR7160T20 安徽(Anhui) 1 晉(Jin) JBQ602 奇瑞(Qi Rui) SQR7160T21 安徽(Anhui) 1 晉(Jin) JBQ603 奇瑞(Qi Rui) SQR7160T22 安徽(Anhui) 1 Self unloading truck CA3257K2T1 — 5

— II-9 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
No. 5 coal belt conveyor	Width 800mm x 6	—	60
	ply standard
Feeder chute	Welding pieces	—	1
Permanent magnet (永磁)	RCY-L120	撫順凱宇機電設備有限公司	1
super iron remover		(Fushun Kaiyu Electronics
		& Machinery Equipment
		Co., Ltd)
No. 3 washed coal crusher	PFCK1212	揚州明泰機械有限公司	1
		(Yangzhou Mingtai
		Machinery Co. Ltd)
Hydraulic coupler	—	揚州明泰機械有限公司	1
		(Yangzhou Mingtai
		Machinery Co. Ltd)
High voltage electric	280kw	揚州明泰機械有限公司	1
motor		(Yangzhou Mingtai
		Machinery Co. Ltd)
No. 6 coal belt conveyor	Width 800mm x 6	—	72
	ply standard
Electric belt weigher	ICS-XF	山西萬立科技有限公司	5
(with feeder system)		(Shanxi Wan Li
		Technology Co. Ltd)
Belt mount for belt	DY-Ⅱ	—	5
weigher
Feeder chute	Welding pieces	—	5
Disk-type dry electro-	RCSB-10	濰坊泉鑫電磁設備有限公司	1
magnetic iron-remover		(Wei Fang Quanxin
		Electric-Magnetic
		Equipment Co., Ltd)
No. 1 coal belt conveyor	Width 1000mm x 6	台州市恒力橡膠有限公司	252.5
	ply standard	(Taizhou Henghi Plastic &
		Rubber Co., Ltd)

— II-10 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
No. 2 coal belt conveyor	Width 1000mm x 6	山西萬立科技有限公司	165
	ply standard	(Shanxi Wan Li
		Technology Co. Ltd)
No. 1/No. 2 washed coal	PFCH-1216	洛陽天信礦山機械製造有限	2
crusher		公司(Luoyang Tian
		Xin Mining Machinery
		Manufacturing Co., Ltd.)
PF216 crusher hydraulic	—	洛陽天信礦山機械製造有限	—
coupler		公司(Luoyang Tian
		Xin Mining Machinery
		Manufacturing Co., Ltd.)
High voltage electric motor	Y4506-6 450kw	—	2
Crusher	PFCK1616	揚州明泰機械有限公司	2
		(Yangzhou Mingtai
		Machinery Co. Ltd)
No. 3 coal belt conveyor	Width 1000mm x 6	山西萬立科技有限公司	258
	ply standard	(Shanxi Wan Li
		Technology Co. Ltd)
No. 4 coal belt conveyor	Width 1000mm x 6	—	130
	ply standard
Motor block	ZQ151-4 13kw	—	2
Swing feeder	Y132M2 5.5kw	—	18
Shake coal system	—	—	1
Eight-hammer tamper	JC/D43-1	大連精誠機電開發有限公司	4
		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
Six-hammer tamper	—	咸陽四環工業裝備有限公司	4
		(Xianyang Sihuan
		Industrial Equipment Co.
		Ltd.)
Coal loading and pushing	QU120軌(Gui)	大連精誠機電開發有限公司	1
truck (with tracks)		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)

— II-11 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Coal loading and pushing	—	大連精誠機電開發有限公司	1
truck		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
Coal loading and pushing	—	大連精誠機電開發有限公司	1
truck		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
Ammonia water pipe for coke	—	—	100
furnace
Compressed air pipe for coke	—	—	100
furnace
Steam pipe for coke furnace	—	—	100
Returning gas pipe for coke	—	—	95
furnace
Production water pipeline for	—	—	70
coke furnace
Fire water pipeline for coke	—	—	60
furnace
DCS system	—	—	1
Hydraulic exchanger	DLZ-000	榆次方盛液壓機電設備有限	2
		公司(Yuci Fangsheng
		Hydraulic Equipment Co.
		Ltd)
Coke barrier vehicle	—	大連精誠機電開發有限公司	1
		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
Smoke guiding truck	—	大連精誠機電開發有限公司	1
		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)

— II-12 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Smoke and dust removal	—	大連精誠機電開發有限公司	1
truck		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
Coke quenching vehicle	JC401	大連精誠機電開發有限公司	1
		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
Coke quenching vehicle	JC401	大連精誠機電開發有限公司	1
		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
Motor vehicle	—	大連精誠機電開發有限公司	1
		(Dalian Jingcheng
		Electrics Machinery
		Development Co., Ltd)
ZSZS-type centrifugal	ZS100-65-250	—	1
water pump
Coke quenching vehicle	14SH-19	—	2
Submersible pump	WQ15-25	—	1
Coal powder tub elevation	ZD141-4 0.5kw	—	2
and operation
Crane grab	D212 0.5 Cube	河南省鄉市礦山起重有限	1
		公司(Henan Xiang City
		Mining Lifting Equipment
		Co., Ltd)
Production water pipeline for	—	—	170
preparation screen
Steam pipeline for	—	—	640
preparation screen
No. 1 coke belt conveyor	Width 1000mm x 6	—	144
	ply heat-resistant
Submersible pump	WQ15-25	—	2

— II-13 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
No. 2 coke belt conveyor	Width 1000mm*	—	85
	x 6 ply heat-
	resistant
No. 3 coke belt conveyor	Width 1000mm*	—	156
	x 6 ply heat-
	resistant
No. 4 coke belt conveyor	Width 1000mm*	—	236
	x 6 ply heat-
	resistant
No. 4 coke powder	Welding pieces	—	1
receiving tub
Mechanical block bridge-type	LH lifting	河南省長城起重設備有限公司	4
crane	capacity: 40 tons	(Henan Changcheng Lifting
		Equipment Co., Ltd.)
Loader	廈裝(Sha Zhuang)	—	5
	ZL-50 656
Loader	常林(Chang Lin)	—	3
	ZL-50
Loader	龍泰(Long Tai)	—	1
	ZL-50
Loader	廈工(Sha Gong)	—	2
	ZL-50
Agricultural vehicle	南駿(Nan Jun) 2100	—	1
Agricultural vehicle	SF160T	—	1
Transformer	S9-630110	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Electric contact voltage		中國華通機電集團有限公司	1
controller		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Incoming unit	GCS-02-1A	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-14 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Conductor unit	GCS-34-2A	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Outgoing unit	GCS-11-3A	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Outgoing unit	GCS-11-4A	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Outgoing unit	GCS-11-5A	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Connection unit	GCS-11-6A	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage unit	1AD	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage unit	2AD	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage unit	3AD	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-15 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Transducer	SV150IS5-4N	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Transducer unit	GGD Control box	北京希望森蘭電氣有限公司	1
		(Beijing Xiwan Sen Lin
		Electrics Co., Ltd)
Self-coupling decompressor	JJB-30kw	中國華通機電集團有限公司	6
starter unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA5	中國華通機電集團有限公司	6
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
High lamp	—	—	1
Transformer	SQ-1000KVA	中國華通機電集團有限公司	2
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA1	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA2	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GD2/AA3	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-16 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage switch unit	GGD2/AA4	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA5	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA6	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA7	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA8	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA10	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA11	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage conductor unit	GGD2/AA12	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage conductor unit	GGD2/AAB	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-17 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage power supply	GGD2-1ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-2ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-3ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-4ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-5ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-6ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-7ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	JT9006	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Motor switch box	XL21-C	中國華通機電集團有限公司	3
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-18 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Socket box	P230	中國華通機電集團有限公司	2
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage unit	GGD2-8ALP	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Transformer	S+D9-25KVA10/0.4	中國華通機電集團有限公司	2
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage conductor unit	GGD2/AA1	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage conductor unit	GGD2/AA2	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA3	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA4	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA5	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA6	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-19 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage switch unit	GGD2/AA7	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA8	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA9	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA10	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA11	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA12	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA13	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage switch unit	GGD2/AA14	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Soft starter rack	1.32KW	中國華通機電集團有限公司	3
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-20 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage power supply	GGD2-21ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-22ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-23ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-24ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-25ALP	中國華通機電集團有限公司	1
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Low voltage power supply	GGD2-26ALP	中國華通機電集團有限公司	1
unit		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Soft starter	QCK-160KW	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3001	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-21 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage switch unit	GGD2-1AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-2AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-3AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-4AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-5AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-6AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-7AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-22 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage switch unit	GGD2-8AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-9AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-10AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-11AP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3004	中國華通機電集團有限公司	11
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	X-1	中國華通機電集團有限公司	3
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3004	中國華通機電集團有限公司	3
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-23 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Control box	JT9016	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Socket box	PZM30-61C8	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Soft starter	QCK-160KW	中國華通機電集團有限公司	3
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Electrical valve control panel	DFK2P-6-10	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-1ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-2ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage switch unit	GGD2-3ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-24 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage switch unit	GGD2-4ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control platform	JT5008	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3007	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3007	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Soft starter unit	132KW	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control unit	XL21-D-S1	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control unit	XL21-D-S2	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-25 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Control unit	XL21-D-S3	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	5XF3-3001	中國華通機電集團有限公司	4
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
1ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
2ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
3ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
4ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
5ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-26 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
1ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
2ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
3ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
1ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
2ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
3ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
4ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-27 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
5ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
6ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
7ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
IIAS control box	JXF3002	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
IAS signal box	JXF3003	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Soft starter unit	75KW	—	2
1ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
2ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-28 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
3ALP low voltage unit	GGD	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
1ACC control box	JXF3002	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Soft starter	55KW	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Motor unit 1APC	XL-31-08	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Motor unit 2APC	XL-31-08	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3030	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Soft starter	55KW	中國華通機電集團有限公司	3
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box 1ALP	GGD	—	1
Control box 2ALP	GGD	—	1

— II-29 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Motor box	800-800-500	中國華通機電集團有限公司	3
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	—	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Self-coupling decompressor	JJB-132KW	中國華通機電集團有限公司	1
starter unit		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Self-coupling decompressor	JJB-30KW	—	4
starter unit
Low voltage power supply	WS1-11 GGD.HLS	—	1
unit
Low voltage power supply	WS2-11 GGD.HLS	—	6
unit
Low voltage power supply	WS8-11 GGD.HLS	—	1
unit
Low voltage motor unit	XL-21-C/AP1	—	1
Low voltage motor unit	XL-21-C/AP2	—	1
Low voltage motor unit	XL-21-C/AP3	—	1
Anti-oxygen motor unit	—	—	1
Motor box	XL-30-08	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-30 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
High voltage switch unit	KYN28A-12-25	中國華通機電集團有限公司	1
	20AA	(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Soft starter	QCK-90KW	中國華通機電集團有限公司	3
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
High voltage switch unit	KYN28A-12-25	中國華通機電集團有限公司	2
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
High voltage switch unit	KYN28A-12-25	中國華通機電集團有限公司	29
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
High voltage switch unit	KYN28A-12-25	中國華通機電集團有限公司	3
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
High voltage switch unit	KYN28A-12-25	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Parent bridge for high voltage	10KV	中國華通機電集團有限公司	12.6
unit		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
High voltage conductor unit	GR-1-01	中國華通機電集團有限公司	2
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Micro surveillance protection	—	中國華通機電集團有限公司	1
system		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)

— II-31 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low current earth socket	PK-10	中國華通機電集團有限公司	1
select panel		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Semi-station panel	—	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Direct current panel	—	中國華通機電集團有限公司	1
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
High voltage control box	—	中國華通機電集團有限公司	10
		(China Huatong Electrics
		& Machinery Group Co.
		Ltd.)
Frequency reducer	—	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
High voltage individual	—	—	6
switch
Transformer	SQ-1250KVA	—	2
Low voltage switch unit	GGD2/AA1	—	1
Low voltage switch unit	GGD2/AA2	—	1
Low voltage switch unit	GGD2/AA3	—	1
Low voltage switch unit	GGD2/AA4	—	1
Low voltage switch unit	GGD2/AA5	—	1
Low voltage switch unit	GGD2/AA6	—	1
Low voltage switch unit	GGD2/AA7	—	1
Low voltage switch unit	GGD2/AA8	—	1
Low voltage switch unit	GGD2/AA10	—	1
Low voltage switch unit	GGD2/AA11	—	1
Low voltage switch unit	GGD2/AA12	—	1
Low voltage conductor unit	GGD2/AA13	—	1
Low voltage conductor unit	GGD2/AA14	—	1

— II-32 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Individual switch	GN19-10/400	中國華通機電集團有限公司	6
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Non-gate current controller	LQG-0.5600/5	中國華通機電集團有限公司	6
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-1ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-2ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-3ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-4ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-5ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-33 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Low voltage unit	GGS2-6ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-7ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-8ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-9ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Low voltage unit	GGS2-11ALP	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Motor power supply box	XL-2-07/11APC	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Motor power supply box	XL-21-07-12APC	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-34 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Motor power supply box	XL-21-08	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3003	中國華通機電集團有限公司	4
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF3001	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
4 large motor switch box	—	中國華通機電集團有限公司	14
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control unit	GGD1-M1	中國華通機電集團有限公司	2
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control unit	GGD1-D-M2	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control box	JXF2-3001	中國華通機電集團有限公司	7
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-35 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Control box	JXF3-3001	中國華通機電集團有限公司	6
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Control platform	D-M2	中國華通機電集團有限公司	1
		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Coke Oven Auto-control	8006002100	浙江中控技術股份有限公司	1
system		(Zhejiang Zhongkong
		Technology (Holdings) Co.
		Ltd)
Coke-oven Gas Main Pipe	MN2000-	太原市威爾泰自動化儀錶	2
measurement System	V15712HB1AC7	有限公司(Taiyuan Weiertai
	D/5C2/	Auto Measuring Instrument
	5C4/5A3/B	Co. Ltd.)
	3/395/376/205/22
	C 0-6KPa
Chemical Products Control	DELLP1130/21#	浙江中控技術股份有限公司	1
system		(Zhejiang Zhongkong
		Technology (Holdings) Co.
		Ltd)
Operating Table	SP071/FW071/	—	9
	0S071
Printer Station	SP071P	—	1
Chassis	—	—	9
Cabinet	—	—	9
Microcomputer Electronic	ICS-XFC	太原萬立科技有限公司	5
		(Shanxi Wan Li Belt
		Weigher Technology Co.
		Ltd)
Transformer Tank	FRENIC5000G11S	日本富士有限公司	5
		(Fuji Co. Ltd.)
Ammonia-sulfur	—	—	—
Measurement Control
System

— II-36 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Master Box	—	—	1
Weighing Sensor	—	山西萬立科技有限公司	5
		(Shanxi Wan Li
		Technology Co. Ltd)
Velocity Sensor	—	山西萬立科技有限公司	5
		(Shanxi Wan Li
		Technology Co. Ltd)
Automatic Electric Meter	—	重慶正興偉業儀錶有限公司	1
		(Chongqing Zhenying
		Weiye Measuring
		Instrument Co. Ltd.)
Autocontrol Outdoor Wiring	—	—	—
Dynamic System Electricity-	—	—	—
laying
10KV Switching Station	—	—	—
Electricity
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	有限公司山西分公司中國華通	1
Low-voltage Switch Box		機電集團(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-37 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)

— II-38 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station 1ALP	GGD	中國華通機電集團有限公司	1
Low-voltage Switch Box		山西分公司(China Huatong
		Electrics & Machinery
		Group Co. Ltd Shanxi
		Branch)
Gas Station Transformer	630KVA	—	2
Gas Station Power Network	—	—	—
Gas Station DCS System	—	—	—
Tar Separator	VN=95M3	鞍山市化工設備製造有限	1
		公司(Anshan Chemical
		Equipment Manufacturing
		Co., Ltd.)
Cross-pipe Primary Cooler	F=3000M2	無錫市焦化煤氣設備廠	3
		(Wuxi Coking & Gas
		Equipment Factory)
Mist Collector	¢1300*8	中化二建集團有限公司	1
		(China Chemical
		Engineering Second
		Construction Corporation)
Electro Tar Precipitator	—	鞍山市化工設備製造有限	2
		公司(Anshan Chemical
		Equipment Manufacturing
		Co., Ltd.)
Tar Pump	ZSR80-50-200A	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Manual Monorail	Q=5T	—	1

— II-39 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Chemical Dosing	S25*25-12.5	山西泓源達環境技術設備	8
Measurement Pump		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Accident Groove	DN5300	中化二建集團有限公司	1
	H=4151MM	孝義項目部(Sinochem
	VN90M3	No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Ammonia Vent	¢140045008	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Ammonia Tank	¢40020006	中化二建集團有限公司	2
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Water-seal Tank	¢40020006	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Liquid-seal Tank	¢4004006	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Emptying Groove	DN1200 L=3000	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Vehicle	—	—	1

— II-40 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Refrigeration Pump	12SH-9B	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Circulating Water Pump	12SH-9	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Upper Groove	DN2000	—	1
	L=120001MM
	VN35M3
Lower Groove	DN2000	—	1
	L=60001MM
	VN20M3
Frp Cooling Tower	112M2	河南沁陽市菲隆玻璃鋼	3
		建材廠(Henan Qinyang
		Feilong Glass Construction
		Material Co., Ltd)
Water Recycling Pump	80-50-200	—	1
Residual Ammonia Pump	ISR65-40-200	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Condensed fluid circulating	MCZ100-250	—	3
pump
Production pump	IS100-65-200	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Fire pump	IS150-125-400	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)

— II-41 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Tar oil loading pump	50-150B	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Auto filter	SQ60	—	3
Quantitative dosage system	DT2-Z Q=1400	宜興市鼎鑫環保有限公司	2
		(Yixing Dingxin
		Environment Protection
		Co.)
Self-priming cooling pump	Q=15-30M2/N	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Low temperature water pump	IS200-150-400	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Intermediate tar oil pump	50AY60B	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Low temperature water pump	¢140045008	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Lower condensed fluid pump	65AY60A	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Upper condensed fluid pump	80AY60	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)

— II-42 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Tar oil pump	80AY60	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Slurry pump	KH1006 55KW	唐山市科江流體機械開發	2
		有限公司(Tanshan
		Kejiang Floating Liquid
		Machinery Development
		Co. Ltd.)
Ammonia water cycle tank	12SH-9A	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Tar oil storage tank	DN5300 H=6965	—	2
	120T VN130
	square metre
Gas blower	D815	西安陝鼓動力股份有限公司	2
		(Shan’xi Shangu Powering
		Co. Ltd.)
Crane	SDXQ-2. G=2.0Z	天津起重機廠(Tianjin Crane	1
		Factory)
Seal water blower tank	Length: 2600mm	—	2
	Width: 1000mm
	Height:
	4000mm
Seal water tank	DN800 H-3000MM	—	10
Mechanical separating tank	VN300M3	鞍山市化工設備製造有限	2
		公司(Anshan Chemical
		Equipment Manufacturing
		Co., Ltd.)
Tar oil clarifying tank	VN95M3	—	1
Ammonia water cycle tank	DN5300	—	1
	H=4151MM
	VN90M3

— II-43 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Sampling cooler	—	宜興市鼎鑫環保有限公司	2
		(Yixing Dingxin
		Environment Protection
		Co.)
Ammonia water residual	DN6500	—	2
tank	H=8254MM
	VN250M3
Accident tank	DN7700	—	1
	H=9725MM
Axis protection blower	T35-4.5	上虞市專用機械廠(Shangyu	12
		Special Machinery
		Factory)
Submerged pump	CAY40-160C	丹東克隆集團有限責任公司	1
		(Dandong Kelong Group
		Co. Ltd)
Submerged pump	IHY65-50-160A	山東雙輪集團陝西銷售	4
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Underground emptying	DNW1800	—	2
groove	L=5500
	VW1300M3
Cooling tower	DN3200 H=18000	楊貴保(Yang Gui Bao)	1
Desulphurizing tower	DN5500	山西新東方機械有限公司	1
	H=30000MM	(Shanxi Xindongfang
		Machinery Co. Ltd)
Regeneration tower	DN3800	山西新東方機械有限公司	1
	H=43550MM	(Shanxi Xindongfang
		Machinery Co. Ltd)
Reaction tank	DN3600	中化二建集團有限公司	1
	L=13000MM	孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)

— II-44 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Desulfurizing liquid seal	DN3600	中化二建集團有限公司	1
tank	H=5300MM	孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Precooling liquid cycle pump	100-250B-C	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Precooling liquid heat	FN=50M2	無錫雪浪換熱器廠(Wuxi	3
exchanger		Xuelang Heat-exchanger
		Factory)
Desulfurizing liquid heat	FN-50M2	無錫雪浪換熱器廠(Wuxi	1
cooler		Xuelang Heat-exchanger
		Factory)
Sulphur melter	DN1200	三門峽市信德化工裝備	3
	H=4157.5MM	有限責任公司(SanMenxia
		Xinde Chemical
		Equipment Co., Ltd)
Desulfurizing liquid cycle	250-50B	—	2
pump
Bubble tank	DN2800H=5338M	—	2
Water recycling tank	10T	—	1
Desulfurizing liquid	8T	—	1
emptying groove
Blender	Y132S-4	—	2
Submerged pump	50-32-200	山東雙輪集團陝西銷售	1
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Bubble pump	40-200A	山東雙輪集團陝西銷售	4
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)

— II-45 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Ammonia water self-priming	G50WFB-B1	山東雙輪集團陝西銷售	2
pump		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Sulphur bubble pump	Q14M3/N	山東雙輪集團陝西銷售	2
	H=26M	有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Sealed self-priming pump	2G50-B	山東雙輪集團陝西銷售	1
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Manualcleaning separator	—	山西新東方機械有限公司	1
hoist		(Shanxi Xindongfang
		Machinery Co. Ltd)
Fluid-level adjustment device	—	山西新東方機械有限公司	1
		(Shanxi Xindongfang
		Machinery Co. Ltd)
Desulfuried residue tank	¢3000300010	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Ammonia water heat	FN=25M2	—	1
exchanger
Gas preheater	DN/300 H=3740	無錫雪浪換熱器廠(Wuxi	2
		Xuelang Heat-exchanger
		Factory)
Spraying saturator	DN3400/2400	無錫雪浪換熱器廠(Wuxi	2
		Xuelang Heat-exchanger
		Factory)
Sulphuric acid pump	MCZ40-160B	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)

— II-46 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Axial flow blower	T35-4.5	上虞市專用機械廠(Shangyu	5
		Special Machinery
		Factory)
Ammonia water heat	FN=25 square	無錫雪浪換熱器廠(Wuxi	2
Exchanger	meter	Xuelang Heat-exchanger
		Factory)
Nozzle of saturator	DN3400	鞍山市化工設備製造有限	2
		公司(Anshan Chemical
		Equipment Manufacturing
		Co., Ltd.)
Roof blower	DWT-I-4	上虞市專用風機廠(Shangyu	1
		Special Machinery
		Factory)
Mother liquor-emptying	IHY50-52-160-1445	山東雙輪集團陝西銷售	1
submerged pump		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Acid uploading tank	DN/400 H=7000	中化二建集團有限公司	1
	VN10M3	孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Alkaline uploading tank	DN1400 L=7000	中化二建集團有限公司	2
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Crystal tank	¢160026806	中化二建集團有限公司	2
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Dehydrator	¢3105005	中化二建集團有限公司	3
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)

— II-47 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Alkaline storage lees	DN4400 H=5585	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Preheated pressure flow lees	DN1600	中化二建集團有限公司	2
	H=4000MM	孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Sulphuric acid storage lees	H=5585 VN70M3	中化二建集團有限公司	2
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Air cooler	40-72	—	1
Sulphuric acid pump	MCZ40-160B	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Explosion-proof axial flow	BT35-11.5	上虞市專用風機廠(Shangyu	7
blower		Special Machinery
		Factory)
Air feeder	4-72-5A	—	1
Cyclonic separator	DN800	—	2
Compressed air dryer	CAD-10/0.8	太原實益氣體工程設備有限	2
		公司(Taiyuan Shiyi Air
		Project Equipment Co.
		Ltd)
Self-priming pump	2.3BXG50WFB-G	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)

— II-48 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Small mother liquor pump	MCZ32-160A	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Cyclonic pusher device	JZQ250	新鄉市薄東機械有限公司	1
		(Xinxiang Bodong
		Machinery Co. Ltd.)
Crystal pump	MCZ040-200C-D	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Centrifugation machine	NH-800	—	2
Heat device	F=200.13	—	1
	square meter
Dryer machine	TG229*602	—	1
Ammonia stripper	F-25m 2	無錫雪浪換熱器廠(Wuxi	1
		Xuelang Heat-exchanger
		Factory)
Ammonia still	DN1600 IF10419-2	三門峽市信德化工裝備有	1
		限責任公司(SanMenxia
		Xinde Chemical
		Equipment Co., Ltd)
Waste water condenser	FN=55	無錫雪浪換熱器廠(Wuxi	1
	square meter	Xuelang Heat-exchanger
		Factory)
Waste water pump	MCZ32-160A	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Manual mono rail hoist	Q=5T	—	1
Manual mono rail hoist	Q=5T	—	1
Waste water channel	DN2200 H=2125	中化二建集團有限公司	1
	VN7M3	孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)

— II-49 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Acid unloading pump	50-32-160	山東雙輪集團陝西銷售	1
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Underground emptying	¢1200 30006	中化二建集團有限公司	1
channel		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Lye circulation Pump	MCZ200/315	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Lye emptying channel	DN/400 H=4500	—	1
	VN6M3
Lye reserve channel	DN400 H=2019	—	2
Manual mono rail hoist/with	Q=1T Q=1T	—	1
chain hoist	H=40M
Vitriol upper tank	¢2000500010	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Waste water emptying pump	IHY50-32-20013	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Final cooler	—	—	1
Crude benzene refluxing	CMH40-32-200	—	2
pump
Naphthalene oil pump	ZHY80-50-160	—	2
Crude benzene product pump	CMA40-200A	—	2

— II-50 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Submerged pump	ZHYB80-50-200	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Automatic control system	—	—	1
Fat oil tank	DN4400 H=5585	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Regenerator	DN1600 H=9000	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Crude benzene oil water	DN1400 H=4500	中化二建集團有限公司	1
separation device		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Control separation device	DN1400 H=4500	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Water empty channel	¢140045008	中化二建集團有限公司	1
		孝義項目部(Sinochem No.
		2 Construction Group Co.,
		Ltd
Oil washing channel	DN4400 H=5585	中化二建集團有限公司	1
		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)

— II-51 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Ammonia condenser	FN=25 square	無錫雪浪換熱器廠(Wuxi	1
	meter	Xuelang Heat-exchanger
		Factory)
Residue oil solution channel	DN200 L=5500	中化二建集團有限公司	2
	VN20 square	孝義項目部(Sinochem
	meter	No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Crude benzene channel	DN2600 L=6500	中化二建集團有限公司	2
	VN30 square	孝義項目部(Sinochem
	meter	No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Crude benzene separate	¢180065008	中化二建集團有限公司	2
water channel		孝義項目部(Sinochem
		No. 2 Construction Group
		Co., Ltd Xiaoyi Project
		Department)
Oil washing unloading car	50-32-200B	山東雙輪集團陝西銷售	1
submerged pump		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Fixed cleaner oil pump	MCZ65-200D	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Crude benzene condenser	FN=285*2 square	—	2
cooler	meter
First stage lean condenser	FN=100 square	無錫雪浪換熱器廠(Wuxi	2
	meter	Xuelang Heat-exchanger
		Factory)
First stage lean condenser	23FHD1080	無錫雪浪換熱器廠(Wuxi	2
	F=100 square	Xuelang Heat-exchanger
	meter	Factory)

— II-52 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Lean and fat oil second stage	23FHD1074	無錫雪浪換熱器廠(Wuxi	3
heat exchanger	F=100 square	Xuelang Heat-exchanger
	meter	Factory)
Second stage lean oil	23FHD1081	無錫雪浪換熱器廠(Wuxi	3
condenser	F=120 square	Xuelang Heat-exchanger
	meter	Factory)
Self-priming pump	2BXG65WFB-B	山東雙輪集團陝西銷售	4
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
First stage oil heat exchanger	FN=100 square	無錫雪浪換熱器廠(Wuxi	3
	meter	Xuelang Heat-exchanger
		Factory)
Hot lean oil pump	SLZA50-315	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Second stage lean oil	FN=120 square	無錫雪浪換熱器廠(Wuxi	3
condenser	meter	Xuelang Heat-exchanger
		Factory)
Lean and fat oil first stage	23FHD1070 F=150	無錫雪浪換熱器廠(Wuxi	4
heat exchanger changed to	square meter	Xuelang Heat-exchanger
spiral plate		Factory)
Final cooler circulating pump	CZ100-250C	山東雙輪集團陝西銷售	3
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Washing naphthalene oil	CC32-250B	丹東克隆集團有限責任公司	4
pump		(Dandong Kelong Group
		Co. Ltd)
Oil-steam heat exchanger/	IFH01070	無錫雪浪換熱器廠(Wuxi	1
crude benzene condenser	FN=285*2 square	Xuelang Heat-exchanger
cooler	meter	Factory)
Benzole stripping column	DN600 L=3000	—	1
oil-water separator

— II-53 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Upper stage condensate	FN=130 square	無錫雪浪換熱器廠(Wuxi	2
cooler	meter	Xuelang Heat-exchanger
		Factory)
Lower stage condensate	FN=130 square	無錫雪浪換熱器廠(Wuxi	3
cooler	meter	Xuelang Heat-exchanger
		Factory)
Oil-steam heat exchanger	FN=285*2 square	無錫雪浪換熱器廠(Wuxi	1
	meter	Xuelang Heat-exchanger
		Factory)
Slurry pump	KH1006 45KW	唐山市科江流體機械開發	5
		有限公司(Tanshan Kejiang
		Floating Liquid Machinery
		Development Co. Ltd.)
Second stage oil heat	FN=100 square	無錫雪浪換熱器廠(Wuxi	4
exchanger	meter	Xuelang Heat-exchanger
		Factory)
Benzol scrubber	DN3600 H=32100	無錫雪浪換熱器廠(Wuxi	1
		Xuelang Heat-exchanger
		Factory)
Benzole stripping column	DN1600 IF6243-2	三門峽市信德化工裝備	1
		有限責任公司(SanMenxia
		Xinde Chemical
		Equipment Co., Ltd)
Tubular furnace	IF9395255-25-	無錫雪浪換熱器廠(Wuxi	1
	¢127¢89	Xuelang Heat-exchanger
		Factory)
Refluxing channel	DN600 H=400	—	1
Tar oil storage Tank	DN7700 H=11105	—	2
	500T VN450
	square meter
Crude benzene high tank	DN2800 H=4205	—	2
	VN22 stere
Tar oil high Tank	DN2800 H=4205	—	2
	VN22 stere

— II-54 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Crude benzene emptying	DN2000 H=5500	—	1
channel	VN16 stere
Oil washing unloading car	DN2200 H=5500	—	1
channel	VN16 stere
Oil depot water emtying	DN2000 H=5500	—	1
channel	VN16 stere
Submerged pump	CAY40-160C	丹東克隆集團有限責任公司	1
		(Dandong Kelong Group
		Co. Ltd)
Oil depot crude benzene	50-32-200	—	1
emptying pump
Oil water emptying pump	HY85-50-160	—	3
Crude Benzene Loading	CM050-160	—	2
Pump
Oil depot water emptying	IHY6550-160	山東雙輪集團陝西銷售	3
submerged pump		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Raw water filter	¢1800	宜興市鼎鑫環保有限公司	3
		(Yixing Dingxin
		Environment Protection
		Co.)
Fully-automated water	Fulaike	江蘇鼎鑫環境工程有限	2
control software		公司(Jiangsu Dingxin
		Environment Project Co.,
		Ltd)
Soft water pump	ISG (B)	山東雙輪集團陝西銷售	3
	65-160-4KW	有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Soft water tank	35 tonnes	—	2
Soft water implement	3900	宜興市鼎鑫環保有限公司	1
		(Yixing Dingxin
		Environment Protection
		Co.)
Air feeder	9-19-D	—	2

— II-55 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Deoxygenating pump	Y902-4	—	6
Dual band water supply	QBWS-1-15*4	山東雙輪集團陝西銷售	1
equipment		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Axial flow blower	T35-11-4.5	上虞市專用風機廠(Shanyu	15
		Special Blower Factory)
Gas-distributing cylinder	V1.35 cubic meters	江蘇雙良鍋爐有限公司	1
	P=1.0MPA	(Jiangsu Shuangliang
		Boiler Co. Ltd.)
Self suction pump for	Q15-30M3/N	山東雙輪集團陝西銷售	2
emptying lees		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Water emptying pump	IHY50-52MNR	山東雙輪集團陝西銷售	1
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Boiler	WNS-1.25-QJYC	江蘇雙良鍋爐有限公司	2
		(Jiangsu Shuangliang
		Boiler Co. Ltd.)
Deoxygenator	RDGN25-10	宜興市鼎鑫環保有限公司	2
		(Yixing Dingxin
		Environment Protection
		Co.)
Gas holder	C-0.6	太原實益氣體工程設備有限	2
		公司(Taiyuan Shiyi Air
		Project Equipment Co.
		Ltd)
Gas holder	C-1	太原實益氣體工程設備有限	2
		公司(Taiyuan Shiyi Air
		Project Equipment Co.
		Ltd)

— II-56 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Air saturator	—	山西泓源達環境技術設	1
		備有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Air compressor	SA-10W-8.5	太原實益氣體工程設備有限	2
		公司(Taiyuan Shiyi Air
		Project Equipment Co.
		Ltd)
Air compressor	SA120W	太原實益氣體工程設備有限	3
		公司(Taiyuan Shiyi Air
		Project Equipment Co.
		Ltd)
Preheater	—	—	1
Gas holder	C-2	太原實益氣體工程設備有限	3
		公司(Taiyuan Shiyi Air
		Project Equipment Co.
		Ltd)
1#lift pump for collecting	50FMG-22X	山西泓源達環境技術設備	2
well		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Submersible sewage pump	Q210M3/N H=10M	山東雙輪集團陝西銷售	1
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Drug addition and storage	—	山西泓源達環境技術設備	4
tank		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)

— II-57 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Drug addition and storage	—	山西泓源達環境技術設備	4
tank		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Explosion-proof motor	T35-11-4.5	大連市沙河口區上虞風機	1
		冷卻塔銷售中心(Dalian
		Shahekou Shangyu
		Cooling Tower Sales
		Centre)
Drug addition and dispensing	—	山西泓源達環境技術設備	4
tank		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
3#lift pump for collecting	100FMG-32	山西泓源達環境技術設備	3
well		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Thermal water pump	Q250M3/N H=50M	山東雙輪集團陝西銷售	2
		有限公司(Shandong
		Doublewheel Group
		Shan’xi Sales Co.)
Filter	JG-18F	—	3
Blower	D40-1.7	山西泓源達環境技術設備	3
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Sewage treatment control	—	—	1
system

— II-58 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Sludge thickening scraper	XLSP742-1655	山西泓源達環境技術設備	1
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Sludge scraper for	XLSPB842-34075	山西泓源達環境技術設備	1
coagulation and		有限公司(Shanxi
sedimentation pool		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
2#lift pump for collecting	200FMG-18	山西泓源達環境技術設備	2
well		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Lift pump for regulating pool	80FMG-22	山西泓源達環境技術設備	2
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Corrosion and explosion-	4-68-5	上虞市專用風機廠(Shanyu	2
proof centrifugal fan		Special Blower Factory)
Lift pump for residual sludge	50FMG-22	山西泓源達環境技術設備	2
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Single spiral screw pump	—	山西泓源達環境技術設備	1
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)

— II-59 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Regulating pool mixer	QJB22/8	山西泓源達環境技術設備	2
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Air-floating oil scraper	XLFD421	山西泓源達環境技術設備	1
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Air-floating water supply	MSG80-250	山西泓源達環境技術設備	2
pump		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Drugging mixer	LG.2	山西泓源達環境技術設備	4
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Anaerobic inner-circulating	ISG80-100	山西泓源達環境技術設備	4
pump		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Sludge reflux pump for	100FMG-24	山西泓源達環境技術設備	4
secondary sedimentation		有限公司(Shanxi
tank		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)

— II-60 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Filter	—	山西泓源達環境技術設備	2
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Sludge scraper for secondary	XLSDB42-34075	山西泓源達環境技術設備	2
sedimentation tank		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Pipe system for sewage	—	—	1
treatment
Heavy oil tank	¢1600,H=2800	山西泓源達環境技術設備	1
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Air floatation tank	—	山西泓源達環境技術設備	1
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Heavy oil pump for oil	2FFX-41	山西泓源達環境技術設備	6
separating tank		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Mixer for mixed reaction	XLFD42	山西泓源達環境技術設備	4
tank		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)

— II-61 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Anaerobium generator	—	山西泓源達環境技術設備	2
		有限公司(Shanxi
		Hongyuanda Environment
		Technology Equipment Co.
		Ltd.)
Air pipe	—	—	1
Corrosion-proof sulfur and	—	—	1
ammonium pipe
Low-temperature water pipe	—	—	1
Pipe system	—	—	—
Ammonia water pipe	—	—	1
Production water pipe	—	—	1
Gas pipe	—	—	1
Steam pipe	—	—	1
Electricity network	—	—	1
Fire protection pipe	—	—	1
Water circulation pipe	—	—	1
Tar pipe system	—	—	1
Four-baskets desulfurization	¢5000 H=7180	—	1
tower
New diesel storage lees	¢53400 L=4500	—	1
Used diesel storage lees	¢3400 H=2825	—	1
Light diesel storage lees	¢1400 L=4500	—	1
Underground emptying lees	¢1200 L=3000	—	1
Water sealing lees	¢500 H=3000	—	1
Oil sealing lees	¢500 H=3300	—	1
Naphthlene washing tower	—	—	1
for gas station
Gas station pipe	—	—	1
Desulfurization pipe for gas	—	—	1
station
Gas compressor	—	—	3
Cooler for gas station	—	—	3
Driving vehicles for gas	—	—	1
station

— II-62 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

Particulars of the Acquired	Model
Machineries	Number	Manufacturer	Quantity
Naphthlene removing pump	—	—	4
for gas station
Fire pump for gas station	—	—	4
Fire pump for gas station	—	—	2
Circulating oil pump for gas	—	—	2
station
Gas tank for gas station	—	—	1
Coke dust gathering station	—	—	1

4. COMBINED RESULTS

The following is a summary of the combined results of the Acquired Coke Processing Assets for the Relevant Periods, which have been prepared on the basis set out in Section 2.

	Period	ended 30
	September		Year	ended 31 December
	2009	2008	2008	2007	2006
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Revenue	970,856	942,625	1,523,501	804,767	—
Costs of goods
sold	(743,798)	(514,877)	(802,822)	(456,459)	—
Gross profit	227,058	427,748	720,679	348,308	—
Other expenses	(44,307)	(271,849)	(472,274)	(217,507)	(11,775)
Profit/(loss)
before tax	182,751	155,899	248,405	130,801	(11,775)

— II-63 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

a. Segment information

Segment information is presented by way of two segment formats: (i) on a primary segment reporting basis, by business segment; and (ii) on a secondary segment reporting basis, by geographical segment.

The businesses of the Acquired Coke Processing Assets are structured and managed separately, according to the nature of their operations and the products they produce. Each of the business segments represents a strategic business unit that offers products which are subject to risks and returns that are different from those of the other business segments. The business segments of the Acquired Coke Processing Assets are categorised as production of coal related products.

In determining the geographical segments of the Acquired Coke Processing Assets, revenues and results are attributed to the segments based on the location of the customers, i.e. sales in the PRC.

Business segments

For the Relevant Periods, the entire turnover of the Acquired Coke Processing Assets was derived from production of coal related products, no business segments were presented accordingly.

Geographical segments

As at 30 September 2009, 30 September 2008, 31 December 2008, 2007 and 2006, the whole amounts of the Acquired Coke Processing Assets are located at the PRC and no geographical segments were presented accordingly.

b. Revenue and other revenue

Revenue represents gross revenue arising from sales of coal related products. It is stated at net of value added tax of approximately RMB970,856,000, RMB942,625,000, RMB1,524,501,000 and RMB804,767,000 respectively for the periods ended 30 September 2009, 2008 and the years ended 31 December 2008, 2007.

— II-64 —

FINANCIAL INFORMATION ON THE ACQUIRED PLANTS AND MACHINERIES

APPENDIX II

c. Profit/(loss) before tax

The Acquired Coke Processing Assets’ profit/(loss) before tax is arrived at after charging:

	Period ended	Period ended	30
	September			Year ended 31 December
	2009		2008	2008	2007	2006
	RMB’000	RMB’000		RMB’000	RMB’000	RMB’000
	(Unaudited)	(Unaudited)		(Unaudited)	(Unaudited)	(Unaudited)
Cost of goods sold
— Raw materials	654,354	452,961		706,278	391,159	—
— Electricity	35,846		24,814	38,691	4,931	—
— Direct labour	10,170		7,074	11,030	9,635	—
— Factory
overhead	43,428		30,028	46,823	50,734	—
	743,798	514,877		802,822	456,459	—

Other expenses
— Staff costs	1,010		5,892	6,291	246	7,611
— Transportation
costs	37,179	102,360		203,143	137,490	—
— Office expenses	10		10	10	1,250	1,743
— Others tax	5,098	124,817		213,129	56,051	—
— Storage
expenses	—		27,283	38,214	18,136	—
— Others	1,010		11,487	11,487	4,334	2,421
	44,307	271,849		472,274	217,507	11,775

5. The valuation of the Acquired Coke Processing Assets as at 31 December 2009 was RMB644,100,000, which is based on the valuation report issued by B.I. Appraisals Limited, an independent property valuers.

Yours faithfully

HLB Hodgson Impey Cheng

Chartered Accountants

Certified Public Accountants Hong Kong

— II-65 —

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

==> picture [226 x 86] intentionally omitted <==

31/F, Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong

29 January 2010

The Board of Directors

Huscoke Resources Holdings Limited Room 4205, 42th Floor Far East Finance Center 16 Harcourt Road Admiralty HONG KONG

Dear Sirs,

We report on the unaudited pro forma financial information of Huscoke Resources Holdings Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) together with the acquisition of coke processing assets (the “Acquired Coke Processing Assets”) (together with the Group hereinafter referred to as the “Enlarged Group”) (the “Unaudited Pro Forma Financial Information”) which has been prepared by the directors of the Company for illustrative purpose only, to provide information about how the proposed acquisition of the Acquired Coke Processing Assets (the “Acquisition”), might have affected the financial information presented for inclusion in Appendix I of the circular of the Company dated 29 January 2010 (the “Circular”). The basis of preparation for the Unaudited Pro Forma Financial Information on the Enlarged Group is set out on page III-4 to the Circular.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS OF THE COMPANY AND REPORTING ACCOUNTANTS

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with Rule 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)

— III-1 —

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion as required by Rule 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information on the Enlarged Group and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information on the Enlarged Group beyond that owned to those to whom those reports were addressed by us at the dates of their issue.

BASIS OF OPINION

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements (“HKSIR”) 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. The engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to Rule 4.29(1) of the Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of:

the financial position of the Enlarged Group as at 30 June 2009 or any future date; or
the financial results of the Enlarged Group for the year ended 31 December 2008 or for any future period.

— III-2 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

OPINION

In our opinion:

the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
such basis is consistent with the accounting policies of the Group; and
the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to Rule 4.29(1) of the Listing Rules.

Yours faithfully

HLB Hodgson Impey Cheng

Chartered Accountants Certified Public Accountants Hong Kong

— III-3 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

1. Introduction

The Unaudited Pro Forma Financial Information on the Enlarged Group has been prepared to illustrate the effect of the Acquisition.

The Unaudited Pro Forma Financial Information on the Enlarged Group has been prepared in accordance with the Rule 4.29 of the Listing Rules for the purpose of illustrating the effect of the Acquisition as if the Acquisition took place on 30 June 2009 for the consolidated statement of financial position and on 1 January 2008 for the consolidated income statement.

The unaudited pro forma consolidated statement of financial position of the Enlarged Group is prepared based on the unaudited consolidated statement of financial position of the Group as at 30 June 2009, after making pro forma adjustments relating to the Acquisition that are (i) directly attributable to the transaction; and (ii) factually supportable.

The unaudited pro forma consolidated income statement is prepared based on the audited consolidated income statement of the Group for the year ended 31 December 2008 as set out in Appendix I to the Circular and the Financial Information of the Acquired Coke Processing Assets for the year ended 31 December 2008 as set out in Appendix II to the Circular after translation into Hong Kong dollars at exchange rate of RMB1 = HK$1.12248, after making pro forma adjustments relating to the Acquisition as if the Acquisition had been completed on 1 January 2008.

The accompanying Unaudited Pro Forma Financial Information on the Enlarged Group has been prepared by the directors of the Company for illustrative purpose only and is based on a number of assumptions, estimates and uncertainties. Accordingly, the Unaudited Pro Forma Financial Information on the Enlarged Group does not purport to describe the actual financial position of the Enlarged Group that would have been attained has the Acquisition been completed on 30 June 2009 and to describe the actual financial results of the Enlarged Group that would have been attained has the Acquisition been completed on 1 January 2008, nor purport to predict the Enlarged Group’s future financial position or results of operations.

— III-4 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

The Unaudited Pro Forma Financial Information on the Enlarged Group should be read in conjunction with the historical financial information on the Group as set out in Appendix I and other financial information included elsewhere in the Circular.

The Unaudited Pro Forma Financial Information on the Enlarged Group has been prepared by the directors of the Company for illustrative purposes only and because of its nature, it may not give a true picture of financial position of the Enlarged Group following completion of the Acquisition.

(I) Unaudited Pro Forma Consolidated Statement of Financial Position of the Enlarged Group

The following is the unaudited pro forma consolidated statement of financial position of the Enlarged Group, assuming that the Acquisition has been completed on 30 June 2009. The information is based on the unaudited consolidated financial statements of the Group as at 30 June 2009, after making pro forma adjustments relating to the Acquisition. Such information is adjusted to reflect the effect of the Acquisition.

As the unaudited pro forma consolidated statement of financial position of the Enlarged Group has been prepared for illustrative purpose only and because of its nature, it may not give a true picture of the financial position of the Enlarged Group as at the date to which it is made up to or at any future date.

— III-5 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

				Unaudited
				Pro Forma
	Unaudited			Consolidated
	Consolidated			Statement
	Statement			of Financial
	of Financial			Position of
	Position			the Enlarged
	of the Group			Group
	as at			as at
	30 June	Pro Forma		30 June
	2009	adjustments		2009
	HK$’000	HK$’000	Notes	HK$’000
Non-current assets
Property, plant and equipment	510,112	679,825	1	1,189,937
Prepaid lease payments	67,773			67,773
Investment properties	26,658			26,658
Available-for-sale investment	3,448			3,448
Goodwill	399,262			399,262
Retirement benefit scheme’s assets	3,825			3,825
Other intangible asset	821,242			821,242
	1,832,320			2,512,145
Current assets
Inventories	37,305			37,305
Debtors, bills receivable and
prepayments	574,238			574,238
Amount due from a minority shareholder
of a subsidiary	275,774			275,774
Prepaid lease payments	730			730
Bank balances and cash	85,858			85,858
Investments held for trading	3,285			3,285
	977,190			977,190

— III-6 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

				Unaudited
				Pro Forma
	Unaudited			Consolidated
	Consolidated			Statement of
	Statement			Financial
	of Financial			Position of
	Position			the Enlarged
	of the Group			Group
	as at			as at
	30 June	Pro Forma		30 June
	2009	adjustments		2009
	HK$’000	HK$’000	Notes	HK$’000
Current liabilities
Creditors, bills payable and
accrued charges	304,682			304,682
Promissory notes	98,412			98,412
Income tax payable	38,972			38,972
Bank borrowings — due within one year	359,101			359,101
Amount due to directors	39,585			39,585
	840,752			840,752
Net current assets	136,438			136,438
Total assets less current liabilities	1,968,758			2,648,583
Capital and reserves
Share capital	181,793			181,793
Reserves	1,539,788			1,539,788
Equity attributable to owners of
the Company	1,721,581			1,721,581
Minority interests	63,004			63,004
Total equity	1,784,585			1,784,585
Non-current liabilities
Bank borrowings	46,284			46,284
Deferred income tax liabilities	137,889			137,889
Long-term bank loan	—	290,319	2	290,319
Promissory notes	—	389,506	3	389,506
	184,173			863,998
	1,968,758			2,648,583

— III-7 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

(II) Unaudited Pro Forma Consolidated Income Statement of the Enlarged Group

The following is the unaudited pro forma consolidated income statement of the Enlarged Group, assuming that the Acquisition has been completed on 1 January 2008. The information is based on the audited consolidated financial statements of the Group for the year ended 31 December 2008 as set out in Appendix I to the Circular and the Financial Information of the Acquired Coke Processing Assets for the year ended 31 December 2008 as set out in Appendix II to the Circular after translation into Hong Kong dollars at an average exchange rate of RMB1 = HK$1.12248. Such information is adjusted to reflect the effect of the Acquisition.

As the unaudited pro forma consolidated income statement of the Enlarged Group has been prepared for illustrative purpose only and because of its nature, it may not give a true picture of results the Enlarged Group for the year ended to which it is made up to or for any future period.

		Unaudited
		financial				Unaudited
		information				Pro Forma
	Audited	of the				Consolidated
	Consolidated	Acquired				Income
	Income	Coke				Statement of
	Statement	Processing				the Enlarged
	of the Group	Assets				Group
	for the year	for the year				for the year
	ended	ended				ended
	31 December	31 December		Pro Forma		31 December
	2008	2008	Sub-total	adjustments		2008
	HK$’000	HK$’000	HK$’000	HK$’000	Note	HK$’000
Revenue	1,235,088	1,710,099	2,945,187	(835,187)	4	2,110,000
Cost of sales
— Others	(1,074,887)	(901,151)	(1,976,038)	835,187	4	(1,140,851)
— Amortisation of other
Intangible assets	(27,194)	—	(27,194)			(27,194)

— III-8 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

Audited Consolidated Income Statement of the Group for the year ended 31 December 2008 HK$’000 Gross profit 133,007 Other income 7,153 Distribution costs (7,503) Administrative expenses (56,587) Gain on fair value change of investments held for trading 396 Loss on fair value change of investment properties lease payment (13,575) Finance costs (13,278) Profit before taxation and impairment loss on goodwill 49,613 Impairment loss on goodwill (1,870,383) (Loss) profit before taxation (1,820,770) Taxation (16,139) (Loss) profit for the year from continuing operations (1,836,909) Discontinued operation Loss for the year from discontinued operation (15,879) (Loss) profit for the year (1,852,788)	Unaudited financial information of the Acquired Coke Processing Assets for the year ended 31 December 2008 HK$’000 808,948 — (530,118) — — — — 278,830 — 278,830 — 278,830 — 278,830	Pro Forma Sub-total adjustments HK$’000 HK$’000 Note 941,955 7,153 (537,621) (56,587) 396 (13,575) (13,278) (34,046) 5 328,443 (1,870,383) (1,541,940) (16,139) (69,707) 6 (1,558,079) (15,879) (1,573,958)	Unaudited Pro Forma Consolidated Income Statement of the Enlarged Group for the year ended 31 December 2008 HK$’000 941,955 7,153 (537,621) (56,587) 396 (13,575) (47,324)
			294,397 (1,870,383)
			(1,575,986) (85,846)
			(1,661,832) (15,879)
			(1,677,711)

— III-9 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

Attributable to: Equity holders of the Company Minority interests Basic loss per share From continuing and discontinued operations From continuing operations	Audited Consolidated Income Statement of the Group for the year ended 31 December 2008 HK$’000 (1,858,198) 5,410 (1,852,788) (HK69.94 cents) (HK69.34 cents)	Unaudited financial information of the Acquired Coke Processing Assets for the year ended 31 December 2008 HK$’000 278,830 — 278,830	Pro Forma Sub-total adjustments HK$’000 HK$’000 Note (1,579,368) 5,410 17,508 7 (1,573,958) 8	Unaudited Pro Forma Consolidated Income Statement of the Enlarged Group for the year ended 31 December 2008 HK$’000 (1,700,629) 22,918
				(1,677,711)

				(HK64.01 cents)

				(HK63.41 cents)

— III-10 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

(III) Notes to the Unaudited Pro Forma Financial Information

The Unaudited Pro Forma Financial Information is prepared in accordance with HKAS 16 Property, Plant and Equipment . Under HKAS 16, the cost of acquiring the Coke Processing Assets is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other HKFRSs.

The consideration for the Acquisition to be satisfied by the Group is RMB639,132,000. The consideration is to be satisfied by:

Cash 18-month promissory note_(Note i) 36-month promissory note(Note i) Exchange rate as at 30 June 2009 Total consideration _Note i: 18-month promissory note Principal amount Fair value Difference 36-month promissory note Principal amount Fair value Difference Total difference Exchange rate as at 30 June 2009 Total difference	RMB’000 255,652 191,740 191,740	RMB’000 255,652 191,740 191,740
	639,132

	1.1356 HK$725,798,000

		RMB’000 191,740 177,913
		13,827

		191,740 165,083
		26,657

		RMB40,484,000 1.1356 HK$45,974,000

— III-11 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

The total difference between the principal amounts and fair values of the promissory notes would be reflected to the property, plant and equipment.

Acquired Coke Processing Assets

Market value as per valuation report, in RMB _Less:_Differences between the principal amounts and fair values of the promissory notes Exchange rate as at 30 June 2009 Assumed cost of consideration	RMB639,132,000 (RMB40,484,000) RMB598,648,000 1.1356 HK$679,825,000

As described in Note 1, part of the consideration would be settled by cash of RMB255,652,000 (approximately HK$290,319,000). It is assumed that the Group is able to raise a long-term bank loan to finance the Acquisition.
The carrying amounts of the 18-month promissory note and 36-month promissory note of approximately HK$389,506,000 (collectively “the Promissory Notes”) represents its carrying values at the amortised cost and is calculated using the discounted cash flow method at an assumed effective interest rate of 5% p.a.
The pro forma adjustment represents the elimination of inter-company sales and respective cost of sales.
The pro forma adjustment of approximately HK$19,698,000 represents the imputed interest expenses for the Promissory Notes for the year ended 31 December 2008. The Company has taken the effective interest rate of 5% p.a. as at 1 January 2008 for the calculation of the imputed interest expenses based on the discount cash flow method.

The pro forma adjustment of approximately HK$14,348,000 represents the long-term bank loan interest expenses for the year (Note 2). It is assumed that the interest rate is 5% p.a.

The above two pro forma adjustments of HK$34,046,000 is reflected in finance costs for the year.

— III-12 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

APPENDIX III

The pro forma adjustment of approximately HK$69,707,000 represents the profit tax expenses in relation to the Acquired Coke Processing Assets. The amount is calculated at the tax rate of 25% applicable in the PRC for the year ended 31 December 2008 in relation to the profit before taxation of approximately HK$278,830,000.
The pro forma adjustment of approximately HK$18,943,000 represents the share of profit by the 10% minority interest of 山西金岩和嘉能源有限公司 (GRG Huscoke (Shan Xi) Ltd.) as calculated as follows:

Profit before taxation in relation to the Acquired Coke Processing Assets loss: Adjustment on finance costs_(Note 5) Adjustment on tax expenses(Note 6)_ Adjusted profit for the year in relation to the Acquired Coke Processing Assets Profit attributable to 10% minority interest	HK$’000 278,830 (34,046) (69,707) 175,077 17,508

(i) The calculation of pro forma basic loss per share from continuing and discontinued operations is based on the Enlarged Group’s pro forma net loss attributable to the equity holders of the Company of HK$1,700,629,000 and the weighted average number of ordinary shares of 2,656,888,000 of the Enlarged Group upon the completion of the Acquisition.
(ii) The calculation of pro forma basic loss per share from continuing operations is based on the Enlarged Group’s pro forma net loss attributable to the equity holders of the Company of HK$1,684,750,000 and the weighted average number of ordinary shares of 2,656,888,000 of the Enlarged Group upon the completion of the Acquisition.

No diluted loss per share has been presented as no diluting events existed during the year.

— III-13 —

VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

==> picture [61 x 44] intentionally omitted <==

==> picture [187 x 76] intentionally omitted <==

29 January 2010

The Directors

Huscoke Resources Holdings Limited Room 4205, Far East Finance Centre 16 Harcourt Road

Hong Kong

Dear Sirs,

Re: The fixed assets held by 孝義市金岩電力煤化工有限公司 (Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited, hereinafter referred to as “Golden Rock”) and/or its subsidiaries (hereinafter referred to as “Golden Rock Group”) in its coking plant located at Xiaowu Road, Xiaoyi City, Shanxi Province, the People’s Republic of China (the “PRC”)

In accordance with the instructions from Huscoke Resources Holdings Limited (hereinafter referred to as the “Company”) for us to assess the market value of the fixed assets (hereinafter referred to as the “Fixed Assets”) in Xiaoyi City, Shanxi Province, which include buildings and structures (hereinafter referred to as the “Buildings”) and machines and equipment (hereinafter referred to as the “Machinery”), and which are exhibited to us as those held by Golden Rock for the production of coke and the coalprocessing chemical by-products, we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the Fixed Assets as at 31 December 2009 (hereinafter referred to as the “Date of Valuation”).

It is our understanding that this valuation document is to be used for disclosure purpose in relation to the proposed acquisition of the Fixed Assets by the Company and/or its subsidiaries (hereinafter together referred to as the “Group”).

This letter, forming part of our valuation report, identifies the fixed assets being valued; explains the basis and methodology of our valuation; lists out the assumptions, the title investigation and the limiting conditions made in the course of our valuation; and states our opinion of value.

— IV-1 —

VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

BASIS OF VALUATION AND ASSUMPTIONS

The objective of our valuation is to provide an independent opinion of worth/investment value of the Fixed Assets as at the Date of Valuation on an ongoing basis.

According to the International Valuation Standard (8th Edition 2007), which is also adopted by Hong Kong Institute of Surveyors, there are two valuation bases, namely, market value basis and valuation bases other than market value. Our valuation of the Fixed Assets is on market value basis.

The term “Market Value” is define as “the estimated amount for which an asset should exchange on the Date of Valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

We assumed that, subject to the above definition, both the buyer and the seller contemplate the retention of the Fixed Assets at their existing state for the continuation of the current operations as a going concern business, and both seeking their maximum economic selfinterest in arriving at an arm’s-length transaction. The market value in continued existing use is further defined as the market value of an asset based on continuation of its existing use as part of an on-going business, assuming the asset could be sold in the open market for its existing use, and otherwise in keeping with the market value definition regardless of whether or not the existing use represents the highest and best use of the asset.

The opinion of the market value in continued existing use is not necessarily intended to represent the amount that might be realized from piecemeal disposal of the Fixed Assets or from some other alternate uses.

We have valued the Buildings and the Machinery on the basis that each of them is considered individually. Our valuation of the Fixed Assets is the aggregate value of the Buildings and the Machinery and we have not applied any bulk discount.

Having considered the general and inherent characteristics of the Buildings, we are of the opinion that the Buildings are of specialized nature and it is impracticable to ascertain the indication of values of the Buildings on market basis. Our valuation on the Buildings is on the basis of the depreciated replacement cost (DRC), the definition of which is that “DRC is based on an estimate of the Market Value for the existing use of the land, plus the current gross replacement (reproduction) costs of the improvements, less allowances for physical deterioration and all relevant forms of obsolescence and optimization.”

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

The DRC basis is considered as a surrogate for Market Value due to the absence of market based comparison and that the basis is a commonly accepted method in negotiating merger and acquisition in China.

The valuation on the Buildings is on the assumption that the Buildings are subject to the test of adequate potential profitability of the business having due regard to the values of the total assets employed and the nature of operation.

This investigation is concerned solely with the values of the Fixed Assets. Excluded from this investigation are land, supplies, inventories, materials on hand, spare parts and all other tangible assets of current nature and intangible assets that might exist. Our opinions of value are not related to the earning capacity of the business. It is assumed that prospective earnings are adequate to support the concluded value of the Fixed Assets plus the value of other assets not included in this valuation, and sufficient net working capital. This report does not attempt to arrive at the value of Golden Rock as a total business entity.

Our valuation on the market value of the Fixed Assets has been made on the assumption that the Fixed Assets are sold on the open market without the benefit of a deferred terms contract, leaseback, joint venture, management agreement or any similar arrangement that would serve to affect the value of the Fixed Assets. In addition, no account has been taken of any option or right of pre-emption concerning or effecting sales of the Fixed Assets and no forced sale situation in any manner is assumed in our valuation.

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

Other specific assumptions, if any, have been stated in the footnotes of the valuation certificate.

VALUATION METHODOLOGY & PROCEDURES

Having considered the general and inherent characteristics of the Buildings, we have adopted the depreciated replacement cost (“DRC”) method. The DRC method is an application of the Cost Approach in valuing specialized properties and is based on an estimate of the market value for the existing use of the land in the property, and the costs to reproduce or replace in new condition the buildings and structures being valued

— IV-3 —

VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

in accordance with current construction costs for similar buildings and structures in the locality, with allowance for accrued depreciation as evidenced by observed condition or obsolescence present, whether arising from physical, functional or economic causes. The DRC method generally furnishes the most reliable indication of value for property in the absence of a known market based on comparable sales.

In arriving at our opinion of the market value of the Machinery, we have considered the three generally accepted methods to value: the Depreciated Replacement Cost Method, Market Comparable Method and Income Capitalization Method. The theory of each of these methods is outlined as follows:

The Depreciated Replacement Cost Method establishes value based on the cost of reproducing or replacing in new condition the assets appraised in accordance with current market prices for similar assets, with allowance for accrued depreciation arising from condition, utility, age, wear and tear, or physical deterioration and obsolescence present (functional or economic) taking into account past and present maintenance policy and rebuilding history.

Reproduction Cost New is defined as the estimated current cost of reproducing a new replica of an asset with the same or closely similar materials.

Replacement Cost New is defined as the estimated current cost of the new asset having the nearest equivalent utility as the asset being appraised.

Physical Deterioration is the loss in value of an asset from wear and tear of asset in operation and exposure to various elements.

Functional Obsolescence is the loss in value due to factors inherent in the asset itself and changes in design, materials, or process that result in inadequacy, over capacity, excess construction, lack of functional utility or excess operating costs, etc.

Economic Obsolescence is an incurable loss in value caused by unfavorable external conditions.

When market transactions of comparable assets are not available, when data cannot be extrapolated from larger transactions, or when transactions are non-existent, under premise of continued use and assuming adequate earnings, the Depreciated Replacement Cost Method is the preferred appraisal procedure.

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

The Market Comparable Method involves the collection of market data pertaining to the subject assets being appraised. The primary intent of the Market Comparable Method is to determine the desirability of the assets through recent sales or offerings of similar assets currently on the market in order to arrive at an indication of the most probable selling price for the assets being appraised. If the comparable sales are not exactly similar to the asset being appraised, adjustments must be made to bring them as closely in line as possible with the subject asset.

Under the premise of continued use assuming adequate earnings, consideration is given to the cost to acquire similar equipment in the used-equipment market; an allowance then is made to reflect the costs for freight and installation.

The Income Capitalization Method considers value in relation to the present worth of future benefits derived from ownership and is usually measured through the capitalization of a specific level of income. This approach is most applicable to investment and general-use properties where there is an established and identifiable rental market.

In any valuation study, all three approaches to value must be considered, as one or more approaches may be applicable to value the subject machinery and equipment. In some situations, elements of two or three approaches may be combined to reach an opinion of value.

In assessing the Machinery, since there is no identified active used-equipment market in the PRC that provides information on recent transactions of comparable items, the Market Comparable Method was not applied. On the other hand, since no identifiable rental income can be attributed to a specific piece of equipment or a group of equipment, the Income Capitalization Method to value was not applied. Therefore, we conclude that the Depreciated Replacement Cost Method is deemed to be the most appropriate method of assessing the Machinery under premise of continued use.

For the assets of standard manufacture, we used current manufacturers’ price lists, price quotations and price catalogs to determine the cost of replacement new. Allowances for freight and installation were sometimes required.

For the assets of special design or fabrication, we used current market price for labor, current market price for materials, manufactured components, design fees, engineering fees and contractors’ overhead, profit and fee to determine the cost of replacement new. Allowances for freight and installation were sometimes required.

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

Also, we adopted the assets index factor to estimate the cost of reproduction new of special design or fabrication machinery and equipment. An index factor is applied to the historical cost of valued equipment in order to estimate the current cost of the assets being valued.

The deductions for physical deterioration, functional obsolescence, and economic obsolescence have reflected observed condition; past maintenance and rebuilding history, if any; current use; and planned future utilization.

TITLE INVESTIGATION

We have not been provided by the Company with copies of title documents relating to the Buildings. In the course of our valuation, we have relied on the advice given by the Group regarding the title to the Buildings and the legal opinion dated 25 January 2010 prepared by 山西晉義律師事務所 (Shanxi Jin Yi Law Firm), the Group’s legal advisor on PRC law, regarding the title to and the interest of the Group in the Buildings.

We are not able to verify the ownership of the Machinery but we have been provided with copies of receipts regarding some major items of the Machinery. We have assumed no responsibility for the title to the Machinery. Unless otherwise stated, it is assumed that individual items of the Machinery are free from encumbrances, restrictions and outgoings of an onerous nature that could affect their values. It is further assumed that there are no hidden or unapparent conditions of the Machinery that would render them more or less valuable.

LIMITING CONDITIONS

Our valuations have been carried out in accordance with The HKIS Valuation Standards on Properties (1st Edition 2005) issued by the Hong Kong Institute of Surveyors and under generally accepted valuation procedures and practices, which are in compliance with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited.

We have carried out inspections of the Fixed Assets in the period from 7 December to 8 December 2009. We have inspected the exterior and, where possible, the interior of the Buildings. However, no structural survey has been made nor have any tests been carried out on any of the building services provided in the Buildings. We are, therefore, not able to report that the Buildings is free from rot, infestation or any other structural defects. Yet, in the course of our inspection, we did not note any serious defects.

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

We have not conducted detailed on-site measurement to verify the correctness of the floor areas of the Buildings but have assumed that the areas shown on the documents made available to us are correct. Dimensions, measurements and areas included in the valuation certificate attached are based on information contained in the documents provided to us by the Group and are therefore approximations only.

We have relied to a considerable extent on the information and advices made available to us by Golden Rock Group on such matters as planning approvals, statutory notices, easements, tenure, particulars of occupancy, site and floor areas and all other relevant matters in the identification of the Buildings. We have not seen original planning consents and have assumed that the Buildings will be erected, occupied and used in accordance with such consents.

We have personally conducted an ocular physical inspection of the Machinery, investigated market condition, interviewed personnel, and examined documents and specifications provided to us before arriving at our opinion of defined value. At the time of our inspection, the Machinery were observed to be generally in good working condition and properly maintained. Hence, we have assumed that the Machinery can perform efficiently according to the purposes for which it was designed and built.

We have accepted the records of the Machinery furnished to us by Golden Rock Group as properly describing the Machinery, their costs and their acquisition dates. We have relied to a considerable extent on such records, listings, specifications and documents in arriving at our opinion of value.

Any deferred maintenance, physical wear and tear, operating malfunctions, lack of utility, or other observable conditions distinguishing the Machinery from assets of like kind in new condition were noted and made part of our judgment in arriving at the value.

We have not investigated any industrial safety, environmental and health-related regulations in association with this particular manufacturing process. It is assumed that all necessary licenses, procedures, and measures were implemented in accordance with the government legislation and guidance.

We have not investigated any financial data pertaining to the present or prospective earning capacity of the operation in which the Machinery is used. It was assumed that prospective earnings would provide a reasonable return on the fair market value of the Machinery, plus the value of any assets not included in this valuation, and adequate net working capital.

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

This valuation reflects facts and conditions existing at the Date of Valuation. Subsequent events have not been considered and we are not required to update our report for such events and conditions.

To the best of our knowledge, all data set forth in this report are true and accurate. The data, opinions, or estimates identified as being furnished by others which have been used in formulating this analysis are gathered from reliable sources, yet, no guarantee is made nor liability assumed for their accuracy.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Group and Golden Rock Group. We were also advised that no material facts have been omitted from the information provided. We consider that we have been provided with sufficient information to reach an informed view, and have no reason to suspect that any material information has been withheld.

REMARKS

Unless otherwise stated, all monetary amounts stated in the valuation certificate are in Renminbi (RMB).

We hereby confirm that we have neither present nor prospective interests in the Group, Golden Rock Group, the Fixed Assets, or the values reported herein.

Our valuation certificate is attached.

Yours faithfully, For and on behalf of

B.I. APPRAISALS LIMITED

William C. K. Sham

Registered Professional Surveyor (G.P.) China Real Estate Appraiser MRICS, MHKIS, MCIREA Executive Director

Note: Mr. William C. K. Sham is a qualified valuer on the approved List of Property Valuers for Undertaking Valuation for Incorporation or Reference in Listing Particulars and Circulars and Valuations in Connection with Takeovers and Mergers published by the Hong Kong Institute of Surveyors. Mr. Sham has over 25 years’ experience in the valuation of properties in Hong Kong and has over 10 years’ experience in asset valuation in the People’s Republic of China and the Asia Pacific regions.

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

VALUATION CERTIFICATE

Fixed Assets

The fixed assets held by Golden Rock Group in its coking plant located at No. 1 Jinyan Road, Wutong Industrial Coke Chemical Park, Xiaoyi City, Shanxi Province, the PRC

Description

The fixed assets comprise buildings and structures (the “Buildings”) together with the machines, equipment and vehicles (the “Machinery”) for the production of coke and the coal-processing chemical byproducts located within the coking plant of Golden Rock Group at Xiaoyi City, Shanxi Province.

The Buildings include 40 blocks of 1 to 4-storey major buildings for office, workshop, warehouse, pump house, electricity distributions uses and various blocks of ancillary structures in the coking plant within the industrial complex of Golden Rock Group. The Buildings were completed in the period between 2004 and 2008.

Market value in existing state as at 31 December 2009

Particulars of occupancy

The Fixed Assets RMB644,100,000 are currently (See Note 4 below) occupied by Golden Rock Group for the production of coke and coal-processing chemical byproducts.

The total gross floor area of the major buildings is approximately 19,787.05 sq.m. (212,988 sq.ft.).

The Machinery comprises machines, equipment and vehicles for coke and chemical by-products productions together with the ancillary equipment in the industrial complex.

Major items of the Machinery include coking furnaces (with production capacity of 800,000 ton per annual), coke pushers, coke-blocking cars, coke-cooling cars, coal gas recovery car, dust collecting car, coal feeders, crushers, tampers, conveyors, cooling towers, axial fans, de-sulfur towers, steaming ammonia tower, regeneration towers, diesel boilers, oxygen generators, dust collection systems, air fan, compressors, vibrators, humidification unloading machine, prespray system, town gas storage tank, conveyor belts, pumps, piping, electrical distribution system, office equipment, transportation equipment and trucks.

The various items of the Machinery were acquired in the period between 2004 and 2008, the origin of most of which are from the PRC.

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

VALUATION CERTIFICATE

Notes:

(1) We have not been provided with any title documents regarding the Building and have been confirmed by Golden Rock Group that the Buildings were built by Golden Rock Group on the subject site, which is leased from Xiaoyi City Hedi Villagers Committee.
(2) The legal opinion of Shanxi Jin Yi Law Firm dated 25 January 2010 is summarized as follows:
(a) As the Buildings were built by Golden Rock Group, the ownership of the Buildings is naturally vested in Golden Rock Group and there is no dispute with other third party in such ownership.
(b) Though Golden Rock Group has not yet registered the ownership of the Buildings; protection of its ownership under the PRC law is not prejudiced.
(c) The Buildings are free from any third party rights and are not distrained upon by any judicial and arbitration authorities nor being subject to administrative penalty from local government on such reason as illegal construction. There is no limitation in the right to use the Buildings.
(d) According to Article 68 of【中華人民共和國物權法】(Law on Property Rights of the PRC), which states that “business enterprise enjoys, in accordance with the law and administrative regulations, the rights to occupy, use, make profit and dispose of its current and fixed assets”, Golden Rock Group has the right to transfer to GRG Huscoke (Shan Xi) Ltd. the Buildings.
(3) We have relied on the information provided by the Company, Golden Rock Group and the aforesaid legal opinion and prepared our valuation on the following assumptions:
(a) Golden Rock is in possession of the proper legal title to the ownership of the buildings and structures being valued.
(b) The Buildings has been constructed, occupied and used in full compliance with, and without contravention of all ordinances, except only where otherwise stated.
(c) All consents, approvals, required licences, permits, certificates and authorizations have been obtained, except only where otherwise stated, for the use of the Buildings upon which our valuation is based.

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VALUATION REPORT ON THE COKE PROCESSING ASSETS

APPENDIX IV

VALUATION CERTIFICATE

(4) The breakdown of market value for the Buildings and the Machinery are RMB149,300,000 and RMB494,800,000 respectively, details of which are as follows:

Fixed Assets	Market value	Sub-total
	(RMB)	(RMB)
The Buildings		149,300,000
The Machinery		494,800,000
Coking furnaces	343,000,000
Other machinery and equipment for coke production	29,500,000
Machinery and equipment in Coke Dust Gathering Station	12,200,000
Chemical Plant	88,600,000
Electrical Equipment	18,900,000
Transport Equipment	2,600,000

(5) The status of title and grant of major approvals, consents or licences in accordance with the information provided by the Company and the aforesaid legal opinion are as fo1lows:

Certificates of State-owned Land Use	No
Certificate of Building Ownership	No

— IV-11 —

APPENDIX V VALUATION REPORT ON THE ENLARGED GROUP

The following is the text of a letter, summary of values and valuation certificates, prepared for the purpose of incorporation in this circular received from Jones Lang B.I. Appraisals Limited, an independent valuer, in connection with its valuations as at 31 December 2009 of the property interests of the Enlarged Group.

==> picture [61 x 44] intentionally omitted <==

==> picture [187 x 76] intentionally omitted <==

29 January 2010

The Directors

Huscoke Resources Holdings Limited Room 4205, 42nd Floor Far East Finance Centre 16 Harcourt Road Hong Kong

Dear Sirs,

Re: The properties held by Huscoke Resources Holdings Limited and/or its subsidiaries in Hong Kong and in the People’s Republic of China (the “PRC”)

In accordance with the instructions from Huscoke Resources Holdings Limited (hereinafter referred to as the “Company”) for us to value the captioned properties (hereinafter referred to as the “Properties”), which are held by the Company and/or its subsidiaries (hereinafter collectively referred to as the “Group”), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of value of each of the Properties as at 31 December 2009 (hereinafter referred to as the “Date of Valuation”).

It is our understanding that this valuation document is to be used by the Company for disclosure purpose.

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VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

This letter, forming part of our valuation report, identifies the properties being valued; explains the basis and methodology of our valuation; lists out the assumptions, the title investigation and the limiting conditions made in the course of our valuations; and states our opinion of values.

BASIS OF VALUATION AND ASSUMPTIONS

The objective of our valuations is to provide an independent opinion of value of each of the Properties as at the Date of Valuation.

The term “Market Value” is define as “the estimated amount for which a property should exchange on the Date of Valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

Our valuation on the market value of each of the Properties has been made on the assumption that the property is sold on the open market without the benefit of a deferred terms contract, leaseback, joint venture, management agreement or any similar arrangement that would serve to affect the value of such property. In addition, no account has been taken of any option or right of pre-emption concerning or effecting sales of the property and no forced sale situation in any manner is assumed in our valuation.

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

Other specific assumptions, if any, have been stated in the footnotes of the valuation certificate.

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VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

VALUATION METHODOLOGY

In arriving at our opinion of value of the property in Group I, which is held and occupied by the Group in Hong Kong, we have adopted the Direct Comparison Method assuming such property is capable of being sold in existing state with the benefit of immediate vacant possession. Comparison based on prices realized on actual sales of comparable properties is made. Comparable properties of similar size, character and location are analyzed and carefully weighted against all the respective advantages and disadvantages of the properties in order to arrive at a fair comparison of value.

In arriving at our opinion of value of the property in Group II, which is held for investment by the Group in Hong Kong, we have adopted the Investment Method, which is normally adopted for valuing leased property. The market value of such property is the aggregate amount of its term value, which is calculated by capitalizing the existing rent at the market-determined equivalent yield, and its reversionary value, which derives from the lease renewal/new letting based on market rent or from the disposal based on the current market price. As the main variables of the investment method are determined in the market, it is typical a comparison method and does not involve any profit forecast factors.

The properties in Group III and Group IV, the land use rights of which are obtained by leasehold arrangement, are considered to have no commercial value due mainly to the prohibition against assignment or sub-letting or otherwise due to the lack of substantial profit rents.

TITLE INVESTIGATION

We have caused land searches to be made at the Land Registry for the properties in located in Hong Kong. However, we have not scrutinized the original documents to ascertain ownership or to verify any amendments that may not appear on the copies handed to us. All documents and leases have been used for reference only.

Regarding the properties in Group III and Group IV, we have been provided with copies of documents related to its title and copies of the two legal opinions dated 31 October 2008 and 25 January 2010 prepared by 山西晉義律師事務所 (Shanxi Jin Yi Law Firm), the Group’s legal advisor on PRC law, regarding the title to and the interest of the Group in such properties. In the course of our valuations, we have relied on the advice given by the Group and its legal advisor. We assume no responsibility for matters legal in nature nor do we render any opinion as to the title to these properties that is assumed to be good and marketable.

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VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

LIMITING CONDITIONS

We have inspected the exterior and, where possible, the interior of the Properties. However, no structural survey has been made nor have any tests been carried out on any of the building services provided in the Properties. We are, therefore, not able to report that the Properties are free from rot, infestation or any other structural defects. Yet, in the course of our inspections, we did not note any serious defects.

We have not conducted detailed on-site measurement to verify the correctness of the site and floor areas of the Properties but have assumed that the areas shown on the documents made available to us are correct. Dimensions, measurements and areas included in the valuation certificates attached are based on information contained in the documents provided to us by the Group and are therefore approximations only.

We have relied to a considerable extent on the information and advices made available to us by the Group on such matters as planning approvals, statutory notices, easements, tenure, particulars of occupancy, site and floor areas and all other relevant matters. We have not seen original planning consents and have assumed that the Properties have be erected, occupied and used in accordance with such consents.

This valuation reflects facts and conditions existing at the Date of Valuation. Subsequent events have not been considered and we are not required to update our report for such events and conditions.

We have relied to a considerable extent on the information and advices made available to us by the Group in preparing this report. We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We were also advised that no material facts have been omitted from the information provided. We consider that we have been provided with sufficient information to reach an informed view, and have no reason to suspect that any material information has been withheld.

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VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

CURRENCY

Unless otherwise stated, all monetary amounts stated in the valuation certificates are in Hong Kong dollars (HK$).

REMARKS

We hereby confirm that we have neither present nor prospective interests in the Group, the Properties, or the values reported herein.

Our valuations are summarized below and the valuation certificates are attached.

Yours faithfully, For and on behalf of B.I. APPRAISALS LIMITED

William C. K. Sham

Registered Professional Surveyor (G.P.) China Real Estate Appraiser MRICS, MHKIS, MCIREA Executive Director

— V-5 —

APPENDIX V VALUATION REPORT ON THE ENLARGED GROUP

SUMMARY OF VALUES

Property

Market value in existing state as at 31 December 2009 (HK$)

Group I – Property held and occupied by the Group in Hong Kong

Portion of Units Nos. 4203-4 (currently re-designated as 85,000,000 Units 4203, 4205 and 4208) on 42nd Floor, Far East Finance Centre, No. 16 Harcourt Road, Hong Kong

Group II – Property held for investment by the Group in Hong Kong 2. The remaining portion of Units Nos. 4203-4 (currently re37,000,000 designated as Unit 4206) on 42nd Floor, Far East Finance Centre, No. 16 Harcourt Road, Hong Kong

Group III – Leasehold property occupied by the Group in the PRC 3. The coal washing, power and warming heat supply plants and No commercial the premises of transportation team of GRG Huscoke (Shan value Xi) Ltd. in an industrial complex located at No. 1 Jinyan Road, Wutong Industrial Coke Chemical Park, Xiaoyi City, Shanxi Province, the PRC

Group IV – Leasehold property to be acquired by the Enlarged Group in the PRC

4. The coking plant in an industrial complex located at No. 1 Jinyan Road, Wutong Industrial Coke Chemical Park, Xiaoyi City, Shanxi Province, the PRC Total:	No commercial value
	122,000,000

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VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

VALUATION CERTIFICATE

Group I – Property held and occupied by the Group in Hong Kong

			Market value in
		Particulars of	existing state as at
Property	Description and tenure	occupancy	31 December 2009
1. Portions of Units	Far East Finance Centre, completed	The property is	$85,000,000
Nos. 4203-4	in about 1982 comprises a 44-storey	occupied by Huscoke
(currently re-	commercial building erected over	Group for office use.
designated as	two levels of basement car park and
Units 4203, 4205,	is located on the southwestern side
4206 and the	of Harcourt Road at its junction with
corridor thereof)	Cotton Tree Drive. It falls within
on 42nd Floor,	a “Commercial” zone on Central
Far East Finance	Outline Zoning Plan No. S/H4/12
Centre, No. 16	dated 18 February 2003.
Harcourt Road,
Hong Kong	Units 4203-4 form approximately
	half of the 42nd Floor of the subject
Part of	building which has been subdivided
138/13200th equal	into four units re-designated as 4203,
and undivided	4205, 4206 and 4208 and a corridor.
parts or shares of	The property comprises 4203, 4205
and in Inland Lot	and 4208 together with the corridor.
No. 8466
	The saleable area of the property is
	approximately 299.70 sq.m. (3,226
	sq.ft.).
	Inland Lot No. 8466 is held from
	the Government under Conditions of
	Sales No. 11418 for a term of 75 years
	renewable for a further term of 75
	years commenced from 23 July 1980.

The Government Rent for the whole lot is $1,000 per annum.

Notes:

1) The registered owner of the property is Ocean Signal Limited via an assignment dated 7 December 2007, registered vide Memorial No. 08010401070015 at a consideration of $90,000,000.
2) The property is subject to the following encumbrances registered in The Land Registry:
a) Mortgage for a consideration of all moneys in favour of The Hongkong and Shanghai Banking Corporation Limited vide Memorial No. 08010401070022 dated 7 December 2007; and
b) Rental Assignment in favour of The Hongkong and Shanghai Banking Corporation Limited vide Memorial No. 08010401070037 dated 7 December 2007.

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VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

VALUATION CERTIFICATE

Group II – Property held for investment by the Group in Hong Kong

Property Description and tenure 2. The remaining Far East Finance Centre, completed portion of Units in about 1982 comprises a 44-storey Nos. 4203-4 commercial building erected over (currently retwo levels of basement car park and designated as is located on the southwestern side Units 4206) on of Harcourt Road at its junction with 42nd Floor, Far Cotton Tree Drive. It falls within East Finance a “Commercial” zone on Central Centre, No. 16 Outline Zoning Plan No. S/H4/12 Harcourt Road, dated 18 February 2003. Hong Kong Units 4203-4 form approximately
Part of half of the 42nd Floor of the subject 138/13200th equal building which has been subdivided and undivided into four units re-designated as 4203, parts or shares of 4205, 4206 and 4208 and a corridor. and in Inland Lot The property comprises 4206. No. 8466

Market value in Particulars of existing state as at occupancy 31 December 2009 The property is tenant$37,000,000 occupied and subject to a monthly tenancy at a monthly rent of $55,000 exclusive of air-conditioning and management fees.

The saleable area of the property is approximately 126.16 sq.m. (1,358 sq.ft.).

Inland Lot No. 8466 is held from the Government under Conditions of Sales No. 11418 for a term of 75 years renewable for a further term of 75 years commenced from 23 July 1980.

The Government Rent for the whole lot is $1,000 per annum.

Notes:

1) The registered owner of the property is Ocean Signal Limited via an assignment dated 7 December 2007, registered vide Memorial No. 08010401070015 at a consideration of $90,000,000.
2) The property is subject to the following encumbrances:
a) Mortgage for a consideration of all moneys in favour of The Hongkong and Shanghai Banking Corporation Limited dated 7 December 2007, registered vide Memorial No. 08010401070022; and
b) Rental Assignment in favour of The Hongkong and Shanghai Banking Corporation Limited dated 7 December 2007, registered vide Memorial No. 08010401070037.

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VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

VALUATION CERTIFICATE

Group III – Leasehold property occupied by the Group in the PRC

Property Description 3. The coal washing, The property comprises various power and blocks of buildings and structures warming heat erected over various plots of land supply plants and with an aggregate site area of the premises of approximately 98 mu or 65,333.66 transportation sq.m. (703,252 sq.ft.) for coal team of GRG washing, electricity and warming heat Huscoke (Shan supply and transportation services for Xi) Ltd. in coal and ancillary products located an industrial within an industrial complex in complex located Xiaoyi City, Shanxi Province. at No. 1 Jinyan Road, Wutong The property includes 17 blocks of 1 Industrial Coke to 7-storey major buildings for office, Chemical Parks, workshop, warehouse, pump house, Xiaoyi City, electricity distributions uses and Shanxi Province, various blocks of ancillary structures. the PRC The buildings and structures were completed in about 2007.

Market value in Particulars of existing state as at occupancy 31 December 2009 The property is No commercial currently occupied value by the GRG Huscoke (Shan Xi) Ltd. for coal (See Note 6 below) washing, electricity and warming heat supply and transportation services for coal and ancillary materials.

The total gross floor area of the major buildings is approximately 29,147.56 sq.m. (313,744 sq.ft.).

Notes:

1) Pursuant to the Contract for Lease of Land dated 30 April 2003 entered into between 梧桐鎮河底村民委員會 (Wutong Town Hedi Villagers Committee) and Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited, the land in the property was agreed to be leased to Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited for a term of 30 years from 1 May 2003 to 30 April 2033 at a rent of RMB1,000 per mu payable bi-annually.
2) Pursuant to a letter dated 9 November 2006 from the People’s Government of Xiaoyi City, approvals regarding the use of land from relevant authorities were granted to Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited for the construction of the subject coal washing, power and warming heat supply plants and the premises of transportation team on the existing site, and Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited could proceed with the land registration at the State-owned Land Use Bureau.
3) Pursuant to the Contract for Lease of Land dated 19 August 2008 entered into between Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited (the “Lessor”), and GRG Huscoke (Shan Xi) Ltd. (the “Lessee”), the land in the property is leased to the Lessee at an annual rent of RMB196,000, for a term of 20 years from 1 September 2008 to 30 August 2028.

— V-9 —

VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

4) We have been advised by the Company that GRG Huscoke (Shan Xi) Ltd. is a 90%-owned subsidiary of the Company.
5) The legal opinion of Shanxi Jin Yi Law Firm dated 31 October 2008 is summarized as follows:
a) GRG Huscoke (Shan Xi) Ltd. is in possession of the land use rights of land in the property and the ownership of the buildings and structures erected thereon.
b) GRG Huscoke (Shan Xi) Ltd. is not entitled to sub-let, transfer or mortgage the land use rights of land in the property.
c) GRG Huscoke (Shan Xi) Ltd. has not registered its land use rights nor obtained the land use certificates for the land. Yet its land use rights obtained by way of lease are protected under the PRC Laws.
d) GRG Huscoke (Shan Xi) Ltd. is entitled to the ownership of the buildings and structures in the property and its ownership is protected under the PRC Laws.
6) Due to the leasehold nature of the land, no commercial value has been ascribed to the property. For indication purpose only, the depreciated replacement cost of building improvements erected on the land as at the Date of Valuation was approximately RMB162,100,000.

— V-10 —

VALUATION REPORT ON THE ENLARGED GROUP

APPENDIX V

VALUATION CERTIFICATE

Group IV – Leasehold property to be acquired by the Enlarged Group in the PRC

Property Description 4. The coking plant The property comprises various in an industrial blocks of buildings and structures complex located erected over a parcel of land with at No. 1 Jinyan site area of approximately 235.4 mu Road, Wutong or 156,934.12 sq.m. (1,689,239 sq.ft.) Industrial Coke for coke processing and located Chemical Park, within an industrial complex at No. 1 Xiaoyi City, Jinyan Road, Wutong Industrial Coke Shanxi Province, Chemical Park, Xiaoyi City, Shanxi the PRC Province.

Market value in Particulars of existing state as at occupancy 31 December 2009 The property is No commercial currently occupied by value Xiaoyi City Golden Rock Electricity Coal (See Note 5 below) Chemical Company Limited for coke processing use. (See Note 3 below)

The coking plant includes 40 blocks of 1 to 4-storey major building for office, workshop, warehouse, pump house, electricity distributions uses and various blocks of ancillary structures. The buildings and structures were completed in the period between 2004 and 2008.

The total gross floor area of the major buildings is approximately 19,787.05 sq.m. (212,988 sq.ft.).

Notes:

1) Pursuant to the Contract for Lease of Land dated 1 July 2003 entered into between 東許辦事處河底村村民委員會 (Dong Xu Office Hedi Village Villagers Committee) and Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited, the land in the property was agreed to be leased to Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited for a term of 30 years from 1 July 2003 to 30 June 2033.
2) Pursuant to a letter dated 5 November 2006 from the People’s Government of Xiaoyi City, approvals regarding the use of land from relevant authorities were granted to Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited for the construction of the subject coking plant on the existing site, and Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited could proceed with the land registration at the State-owned Land Use Bureau.
3) We have been advised by the Company that upon completion of the acquisition of the Coke Processing Assets, GRG Huscoke (Shan Xi) Ltd., a 90%-owned subsidiary of the Company, will enter into a lease with Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited for leasing the land in the property. As the formal lease agreement has not yet been signed, we are not able to report further details on the terms and conditions thereof.
4) The legal opinion of Shanxi Jin Yi Law Firm dated 25 January 2010 is summarized as follows:
a) The land use rights of the property have been obtained by Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited by way of circulation of rural collective construction land（流轉農村集體建設用地）, which is in compliance with the land use policy of the PRC Government. Though Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited has not registered its ownership, the land use rights of the property is protected by the PRC laws.
b) Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited is entitled to transfer or lease the land use rights to GRG Huscoke (Shan Xi) Ltd.
5) Due to the leasehold nature of the land, no commercial value has been ascribed to the property. For indication purpose only, the depreciated replacement cost of building improvements erected on the land as at the Date of Valuation was approximately RMB149,300,000.

— V-11 —

GENERAL INFORMATION

APPENDIX VI

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 enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement contained in this circular misleading.

SHARE CAPITAL

As at the Latest Practicable Date, the authorised and issued share capital of the Company are as follows:

Authorised share capital

Shares HK$ 20,000,000,000 (as at the Latest Practicable Date) 2,000,000,000 Issued and fully paid up Shares HK$ 3,505,426,292 (as at the Latest Practicable Date) 350,542,629

DISCLOSURE OF INTERESTS

(a) Director’s and chief executive’s interests in the Company

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company

— VI-1 —

GENERAL INFORMATION

APPENDIX VI

and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, were as follows:

Long positions in the Shares

			Percentage of
			the Company’s
		Number of	existing issued
Name of Director	Note	Shares held	share capital (%)
Wu Jixian	(a)	450,000,000	12.84
To Wing Tim, Paddy	(b)	660,000	0.02

Long positions in the underlying Shares

			Percentage of
			the Company’s
		Number of	existing issued
Name of Director	Note	Shares held	share capital (%)
Wu Jixian	(a)	2,477,900,000	70.69
Li Baoqi	(c)	4,500,000	0.13
Cheung Ka Fai	(d)	3,600,000	0.10

Note:

(a) As at the Latest Practicable Date, Mr. Wu Jixian, an executive Director, beneficially owned 450,000,000 Shares, he was also interested in convertible bonds in the aggregate principal amount of HK$989,000,000, which were convertible into 2,472,500,000 Shares. Mr. Wu was also entitled to share options to subscribe for a maximum of 5,400,000 Shares upon exercise of the options in full.
(b) Among the 660,000 Shares held by Mr. To Wing Tim, Paddy, an independent non-executive Director, 100,000 Shares were held by Mr. To as beneficial owner and 560,000 Shares held by Ms. Leung Yuet Mei, the spouse of Mr. To. Accordingly, Mr. To was deemed to be interested in the said 660,000 Shares under Part XV of the SFO.

— VI-2 —

GENERAL INFORMATION

APPENDIX VI

(c) As at the Latest Practicable Date, Mr. Li Baoqi, an executive Director was entitled to share options to subscribe for a maximum of 4,500,000 Shares upon exercise of the options in full.
(d) As at the Latest Practicable Date, Mr. Cheung Ka Fai, an executive Director was entitled to share options to subscribe for a maximum of 3,600,000 Shares upon exercise of the options in full.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests and short positions in the shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules.

As at the Latest Practicable Date, none of the Director was a director or an employee of a company which has an interest or short in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

(b) Substantial shareholders

So far as is known to the Directors and the chief executive of the Company, as at the Latest Practicable Date, no persons (not being Directors or chief executive of the Company) had, or were deemed to have, interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company and the Stock Exchange 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 Enlarged Group.

— VI-3 —

GENERAL INFORMATION

APPENDIX VI

DIRECTORS’ SERVICE CONTRACTS

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

LITIGATION

As at the Latest Practicable Date, neither the Company nor any members of the Enlarged Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance are known to the Directors to be pending or threatened by or against the Company or any members of the Enlarged Group.

COMPETING BUSINESSES

As at the Latest Practicable Date, none of the Directors and his/her respective associates was considered to have an interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group other than the Group’s businesses and/or those businesses to which the Directors and his/her respective associates were appointed to represent the interests of the Company and/or the Group.

DIRECTORS’ INTEREST IN CONTRACTS

None of the Directors was materially interested in any contract or arrangement entered into by any member of the Enlarged Group subsisting at the Latest Practicable Date which was significant in relation to the business of the Enlarged Group.

— VI-4 —

GENERAL INFORMATION

APPENDIX VI

DIRECTORS’ INTEREST IN ASSETS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which had been acquired or disposed of by or leased to any member of the Enlarged Group or were proposed to be acquired or disposed of by or leased to any member of the Enlarged Group since 31 December 2008, being the date to which the latest published audited consolidated accounts of the Group were made up.

MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2008, being the date to which the latest published audited consolidated financial statements of the Group were made up.

MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) were entered into by the Enlarged Group within the two years immediately preceding the Latest Practicable Date and are or may be material:

(a) the Sale and Purchase Agreement;
(b) a sale and purchase agreement dated 19 August 2009 entered into between Frankie Dominion (B.V.I.) Company Limited, an indirect wholly-owned subsidiary of the Company, as vendor and Diamond Link Enterprises Limited, as purchaser in relation to the disposal of entire issued ordinary share capital of Frankie Dominion (Holdings) Limited at a consideration of HK$60,000,000;
(c) a sale and purchase agreement dated 18 June 2009 entered into between Huscoke International Group Limited as vendor and Leadstar Development Limited as purchaser in relation to the disposal of a property at Offices 1613 to 1615, Tower Two, Lippo Centre, 89 Queensway, Hong Kong by the Group at a consideration of HK$27,020,000 and the relevant deed of assignment dated 18 August 2009;

— VI-5 —

GENERAL INFORMATION

APPENDIX VI

(d) a deed of indemnity dated 31 October 2008 entered into by Mr. Wu Jixian (“ Mr. Wu ”) in favor of Rich Key Enterprises Limited (“ Rich Key ”), an indirect whollyowned subsidiary of the Company, and its subsidiaries in respect of, among other, taxation liabilities;
(e) a deed of assignment dated 31 October 2008 entered into among Mr. Wu as assignor, Joy Wisdom International Limited (“ Joy Wisdom ”), as borrower and Rich Key as assignee in relation to the assignment of the shareholder’s loan in the amount of HK$450 million;
(f) a supplemental agreement to the April 2008 Agreement (as defined below) dated 30 October 2008 and entered into between the parties to the April 2008 Agreement in relation to the extension of the long stop date under the said agreement to 31 January 2009;
(g) a supplemental agreement to an acquisition agreement dated 11 January 2008 (“ Jan 2008 Agreement ”) and made among Mr. Wu as vendor, Rich Key as purchaser and the Company as warrantor of the purchaser in relation to the acquisition of the entire issued share capital in, and certain shareholders loan to each of Pride Eagle Investments Limited and Joy Wisdom, by Rich Key from Mr. Wu at a consideration of HK$2,400,000,000. Such supplemental agreement was dated 29 September 2008 and entered into between the parties to the Jan 2008 Agreement in relation to the extension of the long stop date for the second acquisition as referred to and under the said agreement to 31 October 2008;
(h) the sale and purchase agreement dated 25 August 2008 entered into between Frankie Dominion (B.V.I.) Company Limited as vendor and Speedway International Investment Limited as purchaser in relation to the disposal of the entire issued share capital in Big Field (B.V.I.) Limited at a consideration of HK$36,000,000;
(i) a supplemental agreement to the Jan 2008 Agreement dated 30 July 2008 and entered into between the parties to the Jan 2008 Agreement in relation to the extension of the long stop date for the second acquisition as referred to and under the said agreement to 30 September 2008;
(j) a deed of indemnity dated 16 May 2008 entered into by Mr. Wu in favor of Rich Key and its subsidiaries in respect of, among other, taxation liabilities;
(k) a deed poll dated 16 May 2008 entered into by the Company constituting up to HK$2,200 million zero coupon convertible bonds;

— VI-6 —

GENERAL INFORMATION

APPENDIX VI

(l) an agreement dated 21 April 2008 (“ April 2008 Agreement ”) and made among Mr. Wu as vendor, Rich Key as purchaser, and the Company as warrantor of the purchaser in relation to the proposed acquisition of the entire issued share capital in, and certain shareholders loan to, Oden Group Limited, by Rich Key from Mr. Wu at a consideration of HK$2,400,000,000 (this agreement lapsed on 31 January 2009);
(m) an agreement dated 21 April 2008 and made between Mr. Wu and Huscoke Coal Chemical Group Limited in relation to the proposed formation of a company in the PRC and vesting of certain assets to such PRC company for the operation of certain coal processing business;
(n) a supplemental agreement to the Jan 2008 Agreement dated 30 May 2008 and entered into between the parties to the Jan 2008 Agreement in relation to the extension of the long stop date for the second acquisition as referred to and under the said agreement to 31 July 2008;

— VI-7 —

GENERAL INFORMATION

APPENDIX VI

QUALIFICATION AND CONSENT OF EXPERTS

The following is the qualification of the experts (“ Experts ”) who have given opinion or advice contained in this circular:

Name

Qualifications

HLB Hodgson Impey Cheng Chartered Accountants Certified Public Accountants

B.I. Appraisals Limited Registered Professional Sur veyors, Valuers & Property Consultants

Each of the Experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter/statements/certificates/report/opinion (as the case may be) and references to its name in the form and context in which it appears.

As at the Latest Practicable Date, each of the Experts has confirmed that it does not have any shareholding interest in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, each of the Experts has confirmed that it does not have any direct or indirect interests in any assets which have been, since 31 December 2008 (being the date to which the latest published audited consolidated accounts of the Group were made up), acquired or disposed of by or leased to any member of the Enlarged Group, or which are proposed to be acquired or disposed of by or leased to any member of the Enlarged Group.

MISCELLANEOUS

(a) The registered office of the Company is Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda.
(b) The head office and the principal office of the Company in Hong Kong is Room 4205, Far East Finance Center, 16 Harcourt Road, Admiralty, Hong Kong.

— VI-8 —

GENERAL INFORMATION

APPENDIX VI

(c) The company secretary of the Company is Mr. Cheung Ka Fai. He is a fellow of the Association of Chartered Certified Accountants, an associate of the Hong Kong Institute of Certified Public Accounts. Mr. Cheung obtained his Bachelor degree in accountancy from the Hong Kong Polytechnic University and his Master degree in business administration from the University of Bradford.
(d) The share registrar and transfer office of the Company is Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(e) The English text of this circular and the form of proxy shall prevail over the Chinese text for the purpose of interpretation.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m. (except Saturdays, Sundays and public holidays) at the principal office of the Company in Hong Kong at Room 4205, Far East Finance Center, 16 Harcourt Road, Admiralty, Hong Kong from the date of this circular up to and including the date of the SGM:

(a) the memorandum of association and the bye-laws of the Company;
(b) the annual reports of the Company for the two financial years ended 31 December 2007 and 31 December 2008;
(c) the comfort letter and the unaudited pro forma financial information on the Enlarged Group, the text of which are as set out in Appendix III to this circular;
(d) the Valuation Report on the Coke Processing Assets (including the letter and valuation certificate) prepared by the HK Valuers, the texts of which are set out in Appendix IV to this circular;
(e) the Valuation Report on the Enlarged Group (including the letter, summary of values and valuation certificates) prepared by the HK Valuers, the texts of which are set out in Appendix V to this circular;

— VI-9 —

GENERAL INFORMATION

APPENDIX VI

(f) the material contracts referred to in the section headed “Material Contracts” in this Appendix VI;
(g) the written consents referred to in the section headed “Qualification and Consent of Experts” in this Appendix VI; and
(h) this circular.

— VI-10 —

NOTICE OF SGM

==> picture [87 x 56] intentionally omitted <==

HUSCOKE RESOURCES HOLDINGS LIMITED 和嘉資源控股有限公司

(incorporated in Bermuda with limited liability)

(Stock code: 704)

website: http://www.huscoke.com

NOTICE OF SGM

NOTICE IS HEREBY GIVEN THAT a special general meeting of Husocke Resources Holdings Limited (the “ Company ”) will be held at 10:30 a.m. on Monday, 22 February 2010 at Vinson Room, Pacific Place Conference Centre, 5/F, One Pacific Place, 88 Queensway, Hong Kong for the purpose of considering and, if thought fit, passing (with or without modifications) the following resolution of the Company:

ORDINARY RESOLUTION

“ THAT the Sale and Purchase Agreement (as defined in the Company’s circular dated 29 January 2010 of which this notice of special general meeting forms part) relating to the Acquisition (as defined in the said circular) by GRG Huscoke (Shan Xi) Ltd. (山西金岩和嘉能源有限公司), an indirect 90%-owned subsidiary of the Company, of the Coke Processing Assets (as defined in the said circular) from 孝義市金岩電力煤化工有限公司 (Xiaoyi City Golden Rock Electricity Coal Chemical Company Limited), a copy of which has been produced to the meeting marked “A” and signed by the Chairman of the meeting for the purpose of identification, be and is hereby approved, confirmed and ratified; and that all the transactions contemplated under the Sale and Purchase Agreement, (the “ Acquisition Transactions ”) be and they are hereby approved and that any one director of the Company (“ Director* ”) be and he is hereby authorised to do or execute for and on behalf of the Company all such acts and things and such other documents by hand and, where required, under the common seal of the Company together with such other Director or person authorized by the board of Directors, which in his or their opinion may be necessary desirable or expedient to carry into effect or to give effect to the Sale and Purchase Agreement and/or the Acquisition Transactions, including such changes, amendment or

— SGM-1 —

NOTICE OF SGM

waiver thereto which are not fundamentally different from those as provided under the Sale and Purchase Agreement, as any one Director may consider necessary, desirable or expedient.”

On behalf of the Board Huscoke Resources Holdings Limited Li Baoqi Acting Chairman

Hong Kong, 29 January 2010

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

Principal place of business:

Room 4205, Far East Finance Center, 16 Harcourt Road, Admiralty, Hong Kong

Notes:

A proxy form to be used for the meeting is enclosed.
Any member entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member. In addition, a proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of an instrument of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such instrument of proxy on behalf of the corporation without further evidence of the facts.

— SGM-2 —

NOTICE OF SGM

The instrument appointing a proxy together with the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the Company’s share registrar and transfer office in Hong Kong, Tricor Secretaries Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than forty-eight (48) hours before the time appointed for holding the meeting. Delivery of the form of proxy shall not preclude a member from attending and voting in person at the meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
Where there are joint holders of any share any one of such joint holder may vote, either in person or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holders be present at any meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register in respect of the joint holding.

— SGM-3 —

AI assistant

Huscoke Holdings Limited — Proxy Solicitation & Information Statement 2010

49409_rns_2010-01-29_d78b0aef-d9b0-4c90-b3ee-afe8af1b8b2e.pdf

HUSCOKE RESOURCES HOLDINGS LIMITED 和嘉資源控股有限公司

(i) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF COKE PROCESSING ASSETS AND

(ii) NOTICE OF SPECIAL GENERAL MEETING

CONTENTS

DEFINITIONS

HUSCOKE RESOURCES HOLDINGS LIMITED 和嘉資源控股有限公司

(Stock code: 704)

(i) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF COKE PROCESSING ASSETS AND (ii) NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Parties:

Assets to be acquired

Acquisition Price

LETTER FROM THE BOARD

Closing Conditions

LETTER FROM THE BOARD

Completion

PROMISSORY NOTES

LETTER FROM THE BOARD

INFORMATION ON THE COKE PROCESSING ASSETS

LETTER FROM THE BOARD

LETTER FROM THE BOARD

REASONS FOR THE ACQUISITION

LETTER FROM THE BOARD

FINANCIAL EFFECTS OF THE ACQUISITION ON THE GROUP

Loss

Assets

Liabilities

LETTER FROM THE BOARD

FINANCIAL AND TRADING PROSPECTS

IMPLICATION FROM THE LISTING RULES

WAIVER APPLICATION OF RULE 14.69(4)(b)(i) OF THE LISTING RULES

LETTER FROM THE BOARD

SGM

RECOMMENDATION

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Huscoke Resources Holdings Limited

Li Baoqi

Results

For the six months

Assets, liabilities and minority interests

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Consolidated Income Statement

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes To The Consolidated Financial Statements

1. GENERAL

2. CHANGE OF COMPANY’S NAME

3. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRS(s)”)

4. SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

Business combinations

Goodwill

Revenue recognition

Property, plant and equipment

Investment properties

Intangible assets acquired in a business combination

Leasing

The Group as lessor

The Group as lessee

Leasehold land and building

Foreign currencies

Retirement benefit costs

Borrowing costs

Government grants

Taxation

Inventories

Financial instruments

Financial assets

Effective interest method

Investments held for trading

Loans and receivables

Available-for-sale financial assets

Huscoke Holdings Limited Proxy Solicitation & Information Statement 2010