JD Logistics, Inc. — M&A Activity 2007

Aug 1, 2007

This announcement is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities.

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

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(Stock Code: 1172)

MAJOR ACQUISITION, MAJOR DISPOSAL AND RESUMPTION OF TRADING IN SHARES

Financial adviser

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THE ACQUISITION

The Board would like to announce that on 1 August 2007, the Company entered into the Acquisition Agreement with the Vendor for the purchase of the Sale Shares (being 87.5% equity interest in Profitable Industries owned by the Vendor) and the Sale Loan (being the entire shareholder’s loan owing by Profitable Industries to the Vendor on the date of Completion). The sole asset of Profitable Industries is its 100% equity interest in the HK Company whose sole asset is its 92% equity interest in the PRC Company. The principal activities of the PRC Company are the development and operation of a cemetery in the Existing Area.

The Consideration of HK$350 million will be satisfied (i) as to HK$170 million by the transfer of the entire issued share capitals of, and the shareholders’ loans to, Sino Stream, Riverside Trinity and Far Hero to the Vendor; (ii) as to HK$130 million by the issue of the Convertible Note; and (iii) as to HK$50 million by the issue of the Loan Note. The sole assets of Sino Stream, Riverside Trinity and Far Hero are Property 1, Property 2 and Property 3 respectively.

* For identification purpose only

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Upon full conversion of the Convertible Note at the Conversion Price of HK$1.00 per Conversion Share (subject to adjustments), a total of 130 million Conversion Shares will be issued, representing approximately 24.3% of the existing issued share capital of the Company as at the date of this announcement and approximately 19.6% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares.

GENERAL

Under the Listing Rules, the Acquisition constitutes a major acquisition for the Company and the Transfer constitutes a major disposal for the Company. Pursuant to Rule 14.40 of the Listing Rules, the Acquisition and the Transfer are therefore conditional upon the approval of the Shareholders.

A circular containing, amongst others, (a) further information of the Acquisition and the Transfer; (b) the accountants’ report on Profitable Industries; (c) valuation reports on the Existing Area, Property 1, Property 2 and Property 3; and (d) a notice of the EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

RESUMPTION OF TRADING IN SHARES

At the request of the Company, trading in the Shares on the Stock Exchange has been suspended from 10:44 a.m. on 31 July 2007 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 2 August 2007.

THE ACQUISITION AGREEMENT

1. Date

1 August 2007

2. Vendor

Great Income Profits Limited

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Vendor and its ultimate beneficial owner are Independent Third Parties.

3. Purchaser

The Company

4. Assets to be acquired

The assets to be acquired by the Company comprise the Sale Shares (being 87.5% equity interest in Profitable Industries owned by the Vendor) and the Sale Loan (being the entire shareholder’s loan owing by Profitable Industries to the Vendor on the date of Completion).

The sole asset of Profitable Industries is its 100% equity interest in the HK Company whose sole asset is its 92% equity interest in the PRC Company. The principal activities of the PRC Company are the development and operation of a cemetery in the Existing Area.

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5. Consideration

The Consideration is HK$350 million which was determined after arm’s length negotiations between the Vendor and the Company.

The Consideration is approximately equal to the attributable interest (being 87.5% of 92%) of the difference between the value of the Existing Area of HK$586 million as valued by Grant Sherman as at 30 June 2007 on the assumption that all land use rights title of the Existing Area have been obtained and the following:

• (i) the estimated remaining amount of land premium of approximately RMB16.2 million (equivalent to approximately HK$16.8 million) payable to the relevant government authorities in the PRC in order to obtain the land use rights title of the Existing Area; and

• (ii) the estimated amount of deferred taxation liabilities of approximately HK$134 million arising as a result of the difference between the value of the Existing Area as valued by Grant Sherman and the carrying amounts of the Existing Area as included in the financial statements of the PRC Company as at 30 June 2007.

The Consideration will be satisfied as follows:

• (i) as to HK$170 million by the transfer of the entire issued share capitals of, and the shareholders’ loans to, Sino Stream, Riverside Trinity and Far Hero to the Vendor. The sole assets of Sino Stream, Riverside Trinity and Far Hero are Property 1, Property 2 and Property 3 respectively. The aggregate value of Property 1, Property 2 and Property 3 as valued by DTZ as at 30 June 2007 was RMB164 million (equivalent to approximately HK$170 million);

• (ii) as to HK$130 million by the issue of the Convertible Note; and

• (iii) as to HK$50 million by the issue of the Loan Note.

In the event that the remaining land premium payable in order to obtain the entire land use rights title of the Existing Area exceeds approximately RMB16.2 million (equivalent to approximately HK$16.8 million), the Vendor undertakes to pay to the Company 87.5% of the amount of excess. Such undertaking is valid for a period of two years from the date of Completion. The Consideration is subject to minor adjustments based on the Profitable Completion Accounts and will be settled in cash upon Completion.

6. Conditions precedent

Completion is conditional on:

• (a) the passing of the necessary resolution(s) by the Shareholders (other than those (if any) who are required to abstain from voting under the Listing Rules) at a general meeting of the Company approving, authorising and ratifying the entering into of the Acquisition Agreement by the Company, the execution of the Deed of Undertaking and Guarantee, the execution of the Transfer and the performance of all transactions contemplated thereunder, including but not limited to the issue of the Convertible Note and the allotment of the Conversion Shares by the Company;

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• (b) the Listing Committee having granted (either unconditionally or subject only to conditions to which the Company does not reasonably object) approval for listing of, and permission to deal in, the Conversion Shares;

• (c) the Company having received a legal opinion addressed to the Company from a law firm practicing law in the PRC acceptable to the Company in respect of the due incorporation of the PRC Company, the title and the rights over the Existing Area, the validity and legality of the operation of a cemetery in the Existing Area and such other matters as the Company may require in such form and contents to the satisfaction of the Company;

• (d) the warranties given by the Vendor in respect of, inter alia, the Existing Area and the financial and operating positions of Profitable Industries, HK Company and PRC Company as contained in the Acquisition Agreement remaining true and accurate and not misleading in any material respect at Completion;

• (e) the warranties given by the Company in respect of, inter alia, Property 1, Property 2 and Property 3 and the financial and operating positions of Sino Stream, Riverside Trinity and Far Hero as contained in the Acquisition Agreement remaining true and accurate and not misleading in any material respect at Completion; and

• (f) all necessary statutory governmental and regulatory obligations having been complied with and all necessary regulatory, statutory, governmental and third party consents and waivers having been obtained and all filings have been made by each of the Vendor and the Company.

If any of the conditions precedent is not fulfilled (or waived as to (e) by the Vendor and as to (d) by the Company as appropriate) on or before 31 October 2007 (or such other date as the Vendor and the Company may agree), the rights and obligations of the parties under the Acquisition Agreement shall lapse and be of no further effect, in which event the parties shall be released from all further obligations thereunder without any liability save as to any antecedent breach.

7. Completion

Completion shall take place on the third business day after fulfillment (or waiver as appropriate) of the last of the conditions precedent set out above or such other date as may be agreed between the Vendor and the Company.

Upon Completion, Profitable Industries will become an 87.5% owned subsidiary of the Company whereas each of Sino Stream, Riverside Trinity and Far Hero will cease to be a subsidiary of the Company.

8. Principal terms of the Convertible Note

The terms of the Convertible Note were determined after arm’s length negotiations between the Vendor and the Company.

• (a) Principal amount

HK$130 million.

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(b) Maturity

The third anniversary from the date of issue of the Convertible Note.

(c) Interest

• 1.5% per annum payable annually in arrears.

(d) Conversion rights

The Noteholder shall have the right to convert, on any business day from the date of issue of the Convertible Note up to the fifth business day immediately prior to the Maturity Date, the whole (or part only in an integral multiple of HK$1,000,000) of the principal amount of the Convertible Note into Conversion Shares at the Conversion Price.

• (e) Conversion Price

The initial Conversion Price is HK$1.00 per Conversion Share, subject to adjustments in certain events such as share consolidation, share sub-division, reclassification, capitalisation issue, capital distribution, rights issue and other equity derivative issues.

• (f) Ranking of the Conversion Shares

The Conversion Shares shall rank pari passu in all respects with all other existing Shares in issue at the date on which a notice is given for the exercise of conversion rights and be entitled to all dividends and other distributions the record date of which falls on a date on or after the notice for the exercise of conversion rights is given.

• (g) Voting

The Noteholder shall not be entitled to receive notices of, attend or vote at any meetings of the Company by reason only of its capacity as a noteholder.

(h) Transferability

The Convertible Note may be transferred to any third party. Any transfer of the Convertible Note shall be in respect of the whole (or part only in an integral multiple of HK$1,000,000) of the outstanding principal amount of the Convertible Note. In the event of any transfer of the Convertible Note to a connected person of the Company (as defined in the Listing Rules), the Noteholder shall notify the Company in writing of such transfer, so that the Company will promptly notify the Stock Exchange of such transfer.

(i) Redemption

To the extent not previously converted into Conversion Shares, the Company shall, on the Maturity Date, redeem the outstanding principal amount of the Convertible Note.

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In the event that the Convertible Note is converted in full at the Conversion Price of HK$1.00 per Conversion Share (subject to adjustments), a total of 130 million Conversion Shares will be issued, representing approximately 24.3% of the existing issued share capital of the Company as at the date of this announcement and approximately 19.6% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares.

The Conversion Price of HK$1.00 per Conversion Share represents:

• (i) a discount of approximately 6.5% to the closing price of HK$1.07 per Share as quoted on the Stock Exchange prior to the suspension of trading in the Shares on the Stock Exchange at 10:44 a.m. on 31 July 2007 pending the release of this announcement;

• (ii) a premium of approximately 4.6% over the average closing price of HK$0.956 per Share for the five consecutive trading days up to and including 31 July 2007 as quoted on the Stock Exchange;

• (iii) a premium of approximately 2.5% over the average closing price of HK$0.976 per Share for the 10 consecutive trading days up to and including 31 July 2007 as quoted on the Stock Exchange; and

• (iv) a premium of approximately 11.5% over the audited consolidated net assets value of the Group of approximately HK$0.897 per Share as at 31 December 2006.

9. Principal terms of the Loan Note

• (a) Principal amount

HK$50 million.

• (b) Maturity

The fifth anniversary from the date of issue of the Loan Note (the “Issue Date”).

(c) Interest

• 3% per annum payable annually on each and every anniversary date of the Loan Note.

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(d) Redemption

The Company may elect to redeem the whole or any part of the Loan Note (in an integral multiple of HK$1,000,000) then outstanding prior to the maturity date.

The redemption amount to be redeemed by the Company shall be subject to a discount at the following rates if a redemption notice is served by the Company upon the Vendor during the period specified below:

Service of the redemption notice	Rate of discount
On or before the 1st anniversary of the Issue Date	4%
After the 1st anniversary of the Issue Date and on or
before the 2nd anniversary of the Issue Date	3%
After the 2nd anniversary of the Issue Date and on or
before the 3rd anniversary of the Issue Date	2%
After the 3rd anniversary of the Issue Date and on or
before the 4th anniversary of the Issue Date	1%

10. Other terms relating to the Reserved Area

The Reserved Area

It is the intention of the Company to complete the development of the entire Existing Area within 3 to 5 years from Completion. It is expected that upon nearly full development of the Existing Area, the Company will commence the development of the Reserved Area. In deciding on commencing the development of the Reserved Area, the Directors will take into account that the Vendor is entitled to a share of revenue in the following manner according to the Deed of Undertaking and Guarantee:

• (a) Within six months after end of each year commencing from 1 January 2008, the Company shall procure the delivery to the Vendor a certificate (the “Certificate”) from and signed by the Auditor with reference to the immediately preceding year (the “Relevant Year”) containing the following statements:

• (i) whether there was any Revenue in the Relevant Year applicable to the development of the Reserved Area and, if so,

• (ii) the amount of the Revenue and the amount payable to the Vendor calculated based on 12.5% of 87.5% of 92% of the Revenue for the Relevant Year (the “Share of Revenue”).

• (b) Within fourteen business days of the issue of the Certificate, the Company shall pay to the Vendor or to its order the amount (if any) certified by the Auditor to be payable to the Vendor the Share of Revenue.

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• (c) Such right to the Share of Revenue will expire in the financial year ending 31 December 2052.

Disposal of interests in the Reserved Area

Pursuant to the Deed of Undertaking and Guarantee, the Company will undertake to the Vendor as follows:

• (a) In the event that the Company wishes to dispose of its interests in Profitable Industries, HK Company or PRC Company, or in the Reserved Area, to a third party (the “Third Party”) at a time when the Vendor is still entitled to the Share of Revenue, the Company shall procure the Third Party to give similar undertakings to and in favour of the Vendor in relation to its right to the Share of Revenue in terms reasonably acceptable to the Vendor, failing which, the Company shall pay to the Vendor, contemporaneously with such disposal, the Compensation.

• (b) “Compensation” means such amount as:

• (i) the Company and the Vendor may agree as the compensation for termination of the Vendor’s right to the Share of Revenue; or

• (ii) failing such agreement, the amount as may be determined by the Auditor or, if the Vendor shall object to such determination by the Auditor, by a firm of actuaries as the Company and the Vendor may appoint in agreement or, failing such agreement, by a firm of actuaries appointed by the Chairman for time being of the Actuarial Society of Hong Kong, as the appropriate compensation for termination of the Vendor’s right to the Share of Revenue.

APPLICATION FOR LISTING OF THE CONVERTIBLE NOTE

No application has been or will be made for listing of, or permission to deal in, the Convertible Note on the Stock Exchange or any other stock exchange. An application will be made to the Listing Committee for the listing of, and permission to deal in, the Conversion Shares to be issued as a result of the conversion of the Convertible Note.

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SHAREHOLDING STRUCTURE OF THE COMPANY

The simplified shareholding structure of the Company as at the date of this announcement and immediately after Completion and full conversion of the Convertible Note and assuming there is no change in the issued share capital of the Company from the date of this announcement are set out as follows:

CCIL A Director_(Note)_ Vendor Public Total	As at the date of this announcement Number % of total of Shares issued Shares 238,800,000 44.7 10,000 0.0 – – 295,480,068 55.3 534,290,068 100.0	Immediately after Completion and full conversion of the Convertible Note Number % of total of Shares issued Shares 238,800,000 35.9 10,000 0.0 130,000,000 19.6 295,480,068 44.5 664,290,068 100.0	Immediately after Completion and full conversion of the Convertible Note Number % of total of Shares issued Shares 238,800,000 35.9 10,000 0.0 130,000,000 19.6 295,480,068 44.5 664,290,068 100.0
			100.0

Note: Mr. Abraham Shek Lai Him, an independent non-executive Director, holds 10,000 Shares.

INFORMATION ON THE VENDOR, PROFITABLE INDUSTRIES, HK COMPANY AND PRC COMPANY

The Vendor

The Vendor is an investment holding company whose principal assets are the Sale Shares and the Sale Loan. The Vendor is wholly-owned by an Independent Third Party.

Profitable Industries

Profitable Industries is an investment holding company whose sole asset is the entire equity interest in the HK Company. Profitable Industries is owned as to 87.5% by the Vendor and 12.5% by CNT Group. Mr. Richard Hung Ting Ho, the chairman and an executive Director, is a non-executive director of CNT Group.

HK Company

The HK Company is wholly-owned by Profitable Industries and its sole asset is its 92% equity interest in the PRC Company.

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PRC Company

The PRC Company is owned as to 92% by the HK Company and 8% by the Local Partner.

The PRC Company has been approved by the Ministry of Civil Affairs of the PRC and the Department of Civil Affairs of Guangdong Province, the PRC to develop and operate a cemetery for the lease of burial places to the public in the PRC, to overseas Chinese, and to the residents of Hong Kong, Macau and Taiwan for profit purpose. It has also been authorised by the above government authorities to provide services such as the sale of tomb sets, headstones and stelas and the provision of management and burial related services. In addition, the PRC Company has been approved by the Minzhengju of the Municipality of Sihui to set up sales and marketing offices overseas.

At present, the principal activities of the PRC Company are the development and operation of a cemetery in the Existing Area now known as Fortune Wealth Memorial Park (四會聚福寶華僑陵園 ). According to the development plan of the PRC Company for the Existing Area, a total of approximately 232,000 burial places comprising approximately 18,000 Grave Plots and approximately 214,000 Niches will be provided upon completion of the development.

Recently, development work is completed on a site of 100 mu (equivalent to approximately 66,553 sq.m.) within the Existing Area for which the land use rights title has been obtained. An entrance square with a central fountain and encircled by waterways, a pond, a sales and administrative building, 4 graveyards on which 1,783 Grave Plots and a mausoleum which can accommodate 3,294 Niches have been built. Leases for burial rights for the remaining term of the leases of the Grave Plots are now priced within the range from RMB8,800 to RMB398,000 per Grave Plot and those for the Niches are set within the range from RMB2,800 to RMB8,800 per Niche and the entire lease payments for leasing of the Grave Plots or the Niches will be received upfront in one lump sum.

For the site of 418 mu (equivalent to approximately 278,609 sq.m.) within the Existing Area, the PRC Company is now in the process of obtaining the land use rights title for 98 mu (equivalent to approximately 65,334 sq.m.) while that for the remaining 320 mu (equivalent to approximately 213,275 sq.m.) will be applied for in due course for future development work. The PRC Company has scheduled to complete the development of the entire Existing Area within 3 to 5 years from Completion. The development costs (including land premium) for the site of 418 mu (equivalent to approximately 278,609 sq.m.) within the Existing Area are estimated to be approximately HK$140 million to HK$170 million which will be financed by internal resources and/or bank borrowings of the Group.

On the sale and marketing aspects, the PRC Company has set up two sales offices, one in the Municipality of Sihui and one in Zhaoqing of Guangdong, the PRC. It has also appointed the HK Company to act as its overseas sales and marketing agent. In addition, the PRC Company has developed and operated an internet website which provides services such as the establishment of virtual memorial mausoleums, virtual and online broadcasting of ancestors’ memorial services and periodic reports on conditions of burial places.

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The management team of the PRC Company comprises an acting general manager, two assistant general managers and a team of 44 staff members with details as follows:

Function Administration Business development, sales and marketing Customer services Finance and accounting Information technology Project development Transportation	Number of employees 5 10 15 4 2 5 3
	44

Adjacent to the Existing Area is the Reserved Area with a site area of 4,482 mu (equivalent to approximately 2,988,000 sq.m.), which has been reserved by the Local Partner pursuant to the fulfillment of its obligation under a joint venture agreement with the HK Company in respect of the development of further phases of the cemetery. In the event that the PRC Company were to commence development of any part of the Reserved Area, land premium has to be paid by the PRC Company to the relevant government authorities in the PRC in order to obtain the land use rights title. At present, the PRC Company has no immediate development plan for the Reserved Area and it is expected that upon nearly full development of the Existing Area, the Company may, after taking into account the Share of Revenue by the Vendor as mentioned above, commence the development of the Reserved Area. When the PRC Company commences the development of the Reserved Area, the Company will comply with the relevant requirements under the Listing Rules, if applicable.

Financial information of Profitable Industries

Set out below is the financial highlights of Profitable Industries for the two years ended 31 December 2006 prepared in accordance with Hong Kong Financial Reporting Standards:

	For the	year
	ended 31 December
	2005	2006
	Unaudited	Unaudited
	(HK$’000)	(HK$’000)
Consolidated loss before taxation	(1,567)	(5,925)
Consolidated loss after taxation	(1,567)	(5,925)

The unaudited consolidated net assets value of Profitable Industries (before deduction of shareholders’ loans amounting to HK$43.5 million) as at 30 June 2007 was approximately HK$31.7 million.

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INFORMATION ON THE GROUP, SINO STREAM, RIVERSIDE TRINITY AND FAR HERO

The Group

The Group is principally engaged in books and paper products printing and property investment in the PRC.

Sino Stream

Sino Stream is principally engaged in property investment in the PRC and is a wholly-owned subsidiary of the Company. Property 1 is the sole asset of Sino Stream. Portion of Property 1 (with gross floor area of approximately 8,185.61 sq.m.) is leased to a wholly-owned subsidiary of Chuang’s China Investments Limited, a subsidiary of CCIL, on a monthly basis at HK$82,800 per month and the remaining portion of Property 1 is currently vacant. The market value of Property 1 as at 30 June 2007 as appraised by DTZ was RMB52 million (equivalent to approximately HK$53.9 million).

Set out below is the financial highlights of Sino Stream for the two years ended 31 December 2006 prepared in accordance with Hong Kong Financial Reporting Standards:

	For the	year
	ended 31 December
	2005	2006
	Audited	Audited
	(HK$’000)	(HK$’000)
Profit before taxation	1,573	970
Profit after taxation	854	304

The audited net assets value of Sino Stream (before deduction of shareholder’s loan owing to a whollyowned subsidiary of the Company of HK$33.9 million) as at 31 December 2006 was approximately HK$35.5 million.

Riverside Trinity

Riverside Trinity is principally engaged in property investment in the PRC and is a wholly-owned subsidiary of the Company. Property 2 is the sole asset of Riverside Trinity and is currently vacant. The market value of Property 2 as at 30 June 2007 as appraised by DTZ was RMB103 million (equivalent to approximately HK$106.7 million).

Set out below is the financial highlights of Riverside Trinity for the two years ended 31 December 2006 prepared in accordance with Hong Kong Financial Reporting Standards:

	For the	year
	ended 31 December
	2005	2006
	Audited	Audited
	(HK$’000)	(HK$’000)
Loss before taxation	(379)	(2,055)
Loss after taxation	(379)	(1,620)

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The audited net assets value of Riverside Trinity (before deduction of shareholder’s loan owing to a wholly-owned subsidiary of the Company of HK$76.6 million) as at 31 December 2006 was approximately HK$76.1 million.

Far Hero

Far Hero is principally engaged in property investment in the PRC and is a wholly-owned subsidiary of the Company. Property 3 is the sole asset of Far Hero and is currently vacant. The market value of Property 3 as at 30 June 2007 as appraised by DTZ was RMB9 million (equivalent to approximately HK$9.3 million).

Set out below is the financial highlights of Far Hero for the two years ended 31 March 2007 prepared in accordance with Hong Kong Financial Reporting Standards:

	For the year	For the year
	ended 31 March
	2006	2007
	Audited	Unaudited
	(HK$’000)	(HK$’000)
Loss before taxation	(2,500)	(207)
Loss after taxation	(2,500)	(207)

The unaudited net assets value of Far Hero as at 31 March 2007 (before deduction of shareholder’s loan owing to a wholly-owned subsidiary of the Company of HK$10.3 million) was approximately HK$2.3 million.

GROUP STRUCTURE

The following is the simplified group structure of the Company and the Vendor immediately before and after the completion of the Acquisition and the Transfer:

Immediately before Completion:

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----- Start of picture text -----

Company
100% 100% 100%
Riverside
Sino Stream Far Hero
Trinity
100% 100% 100%
Property 1 Property 2 Property 3
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----- Start of picture text -----

Vendor CNT Group
87.5% 12.5%
Profitable
Industries
100%
HK Company Local Partner
92% 8%
PRC
Company
----- End of picture text -----

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Immediately after Completion:

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----- Start of picture text -----

Company CNT Group
87.5% 12.5%
Profitable
Vendor
Industries
100% 100% 100% 100%
Riverside
Sino Stream Far Hero HK Company Local Partner
Trinity
92% 8%
100% 100% 100%
PRC
Property 1 Property 2 Property 3
Company
----- End of picture text -----

REASONS FOR THE ACQUISITION AND THE TRANSFER

As mentioned in the annual report of the Company for the year ended 31 December 2006, in view of the competitive trading environment of the Group’s printing business, the Group is looking for new business opportunities to broaden its income base. The Acquisition will enable the Group to diversify into a new business area, being the construction and operation of cemetery in the PRC, a niche business which the Directors consider to have long term growth potential and will bring long term stable income to the Group. Firstly, the operation of cemetery in the PRC is a controlled business which requires lengthy and specific approvals and licences from a number of government authorities. In this respect, the PRC Company has already obtained all necessary approvals and licences to operate such a business in the PRC. Accordingly, the Acquisition will allow the Group to immediately participate in an operative cemetery business in the PRC without going through all the hurdles of securing such approvals and licenses. Secondly, the Directors believe that with the aging population, the increase in disposable household income and the demolition of existing cemeteries located in or near major cities due to urban redevelopment, the demand for quality burial places and services in the PRC is strong. Thirdly, the PRC Company has management expertise in place which has proven record in completing the development of the cemetery comprising 100 mu (equivalent to approximately 66,553 sq.m.) of land within the Existing Area, and has commenced the business operation of the cemetery in full. The Directors believe that this would ensure that the development of further phase of the cemetery project can be executed smoothly. Fourthly, in addition to the development of the Existing Area, the project can be extended into the Reserved Area for future development. The site area of the Reserved Area is about 8 times of that of the Existing Area. The Directors believe that the future development potential of the project is enormous.

Under the Acquisition Agreement, the Company will transfer the entire issued share capitals of, and the shareholder’s loans to, Sino Stream, Riverside Trinity and Far Hero to the Vendor. The purpose of the Transfer is to reduce the amount of cash consideration payable for the Acquisition so as to allow the Group to retain more working capital for the ongoing development and expansion of its core business. Based on the respective net assets values of Sino Stream, Riverside Trinity and Far Hero as at 31 December 2006 and taking into account the fair values of Property 1, Property 2 and Property 3 as at 30 June 2007, it is estimated that the Group will record an unaudited aggregate gain of approximately HK$22 million as a result of the Transfer.

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Based on the above, the Directors believe that the terms of the Acquisition, the Deed of Undertaking and Guarantee and the Transfer are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

REQUIREMENTS UNDER THE LISTING RULES

Under the Listing Rules, the Acquisition constitutes a major acquisition for the Company and the Transfer constitutes a major disposal for the Company. Pursuant to Rule 14.40 of the Listing Rules, the Acquisition and the Transfer are therefore conditional upon the approval of the Shareholders.

A circular containing, amongst others, (a) further information of the Acquisition and the Transfer; (b) the accountants’ report on Profitable Industries; (c) valuation reports on the Existing Area, Property 1, Property 2 and Property 3; and (d) a notice of the EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

UNUSUAL PRICE AND VOLUME MOVEMENTS

The Directors have noted the recent increase in the price and trading volume of the Shares and wish to state that the Directors are not aware of any reasons for such increase other than those stated in this announcement. Save as disclosed in this announcement, the Directors also confirm that there are no negotiations or agreements relating to intended acquisitions or realisations which should be discloseable under Rule 13.23 of the Listing rules, neither is the Board aware of any matter to be discloseable under the general obligations imposed by Rule 13.09 of the Listing Rules, which is or may be of a price sensitive nature.

RESUMPTION OF TRADING IN SHARES

At the request of the Company, trading in the Shares on the Stock Exchange has been suspended from 10:44 a.m. on 31 July 2007 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 2 August 2007.

DEFINITIONS

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

“Acquisition” the acquisition of the Sale Shares and the Sale Loan by the Company from the Vendor pursuant to the terms of the Acquisition Agreement “Acquisition Agreement” the agreement dated 1 August 2007 entered into, among others, between the Vendor and the Company in relation to the Acquisition “associate(s)” has the meaning ascribed to it under the Listing Rules

“Auditor”	the auditor for the time being of the Company but in the event of
	objection from the Vendor, the audit firm appointed by the parties to the
	Acquisition Agreement or, failing such agreement, appointed by the
	Chairman for the time being of the Hong Kong Institute of Certified
	Public Accountants

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“Board”	board of the Directors
“business day”	any day (excluding Saturday, Sunday, public holidays and any day on
	which a tropical cyclone warning No. 8 or above or a “black” rainstorm
	warning signal is hoisted or remains hoisted in Hong Kong at any time
	between 9:00 a.m. and 12:00 noon and is not lowered or discontinued at
	or before 12:00 noon) on which licensed banks are generally open for
	business in Hong Kong
“CCIL”	Chuang’s Consortium International Limited (Stock Code: 367), a
	company incorporated in Bermuda with limited liability whose issued
	shares are listed on the Stock Exchange
“CNT Group”	CNT Group Limited (Stock Code: 701), a company incorporated in
	Bermuda with limited liability whose issued shares are listed on the
	Stock Exchange and an Independent Third Party
“Company”	Midas International Holdings Limited (Stock Code: 1172), a company
	incorporated in the Cayman Islands with limited liability whose issued
	Shares are listed on the Stock Exchange and is owned as to approximately
	44.7% by CCIL as at the date of this announcement
“Completion”	completion of the Acquisition Agreement
“Consideration”	HK$350 million, being the purchase price for the Sale Shares and the
	Sale Loan
“Conversion Price”	the price of HK$1.00 per Conversion Share, subject to the adjustments
	which may be made pursuant to the terms of the Convertible Note
“Conversion Share(s)”	the new Share(s) to be issued by the Company upon the exercise of the
	conversion rights attached to the Convertible Note or otherwise pursuant
	to the terms and conditions of the Convertible Note
“Convertible Note”	1.5% Convertible Note due 2010 in the principal amount of HK$130
	million to be issued by the Company to the Vendor pursuant to the
	Acquisition Agreement
“Deed of Undertaking and	the deed of undertaking and guarantee to be executed by, inter alia, the
Guarantee”	Company in favour of the Vendor upon Completion
“Director(s)”	the director(s) of the Company

• “DTZ” DTZ Debenham Tie Leung Limited, an independent valuer for conducting valuation on Property 1, Property 2 and Property 3

• “EGM” the extraordinary general meeting of the Company to be convened to consider and, if thought fit, approve the Acquisition, the Transfer and the transactions contemplated under the Acquisition Agreement

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• “Existing Area” a piece of land having a site area of 518 mu (equivalent to approximately 345,162 sq.m.) located at Jiang Gu, Si Hui, Guangdong Province, the PRC, which is in the process of being developed into a cemetery now known as Fortune Wealth Memorial Park (四會聚福寶華僑陵園 )

• “Far Hero” Far Hero Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

• “Grant Sherman” Grant Sherman Appraisal Limited, an independent valuer for conducting valuation on the Existing Area

• “Grave Plots” plots for in-ground burials of bodies and urns for bones and cremated remains for single grave plots, companion plots, small family plots and family estate plots

• “Group” the Company and its subsidiaries “HK Company” Fortune Wealth Memorial Park Limited, a company incorporated in Hong Kong with limited liability and wholly-owned by Profitable Industries

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Independent Third Party(ies)” person(s) or company(ies) who/which is(are) (a) third party(ies) independent of the Company and connected person(s) of the Company (as defined under the Listing Rules)

• “Listing Committee” the listing sub-committee of the Stock Exchange “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Loan Note” 3% bond due 2012 in the principal amount of HK$50 million to be issued by the Company to the Vendor pursuant to the Acquisition Agreement

• “Local Partner” 四會市江谷鎮經濟實業發展總公司 (Jianggu Town SiHui City Economic Enterprise Development Head Company[#] ), a company incorporated in the PRC, which is an Independent Third Party and the owner of 8% equity interest in the PRC Company

• “Macau” the Macau Special Administrative Region of the PRC “Maturity Date” the date of maturity of the Convertible Note, being the third anniversary from the date of issue of the Convertible Note

• “Niches” niches for placement of urns for bones and cremated remains “Noteholder” the person who is for the time being the holder of the Convertible Note as shown in the register kept by the Company

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• “PRC” the People’s Republic of China “PRC Company” 四會聚福寶華僑陵園有限公司 (Si Hui Fortune Wealth Memorial Park Limited[#] ), a sino-foreign co-operative joint venture incorporated in the PRC with limited liability which is 92% held by the HK Company and 8% held by the Local Partner

• “Profitable Completion the unaudited consolidated accounts of Profitable Industries comprising Accounts” a consolidated profit and loss account for the period from 1 January 2007 to the date of Completion and a consolidated balance sheet as at the date of Completion

• “Profitable Industries” Profitable Industries Limited, a company incorporated in the British Virgin Islands with limited liability, which is 87.5% held by the Vendor and 12.5% indirectly held by CNT Group

• “Property 1” property comprises Lambda Building, Yuen Sang Building, and three residential blocks in Chuang’s New Town, Danshui, Huiyang, Guangdong Province, the PRC, which has a total gross floor area of 35,177.4 sq.m.

• “Property 2” property comprises 372 residential units in Block Nos. 1, 2, and 3, in Chuang’s Garden of Chuang’s New Town, Danshui, Huiyang, Guangdong Province, the PRC which has a total gross floor area of 28,547.21 sq.m.

• “Property 3” property comprises the commercial podium of Block Nos. 1, 2, 3 and Block Nos. 12 and 13 in Chuang’s Garden of Chuang’s New Town, Danshui, Huiyang, Guangdong Province, the PRC which has a total gross floor area of 3,256.76 sq.m.

• “Reserved Area” a piece of land having a site area of 4,482 mu (equivalent to approximately 2,988,000 sq.m.) located at Jiang Gu, Si Hui, Guangdong Province, the PRC, which has been reserved by the Local Partner for future development into cemetery by the PRC Company and is adjacent to the Existing Area

• “Revenue” all amounts (including but not limited to rents, fees, charges, premium and all other form of income and receipts, whether paid in advance or otherwise) received by the PRC Company for or in respect of leases or tenancies of, or licences to use, Grave Plots or Niches, situated, located or built on the Reserved Area, or for any other similar arrangements in relation to those Grave Plots or Niches

• “Riverside Trinity” Riverside Trinity Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

• “Sale Loan” the entire amount of the shareholder’s loan owing by Profitable Industries to the Vendor on the date of Completion, which as at the date of the Acquisition Agreement was approximately HK$42.4 million

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“Sale Shares” 8,750 ordinary shares of US$1 each in the share capital of Profitable Industries, representing 87.5% of the entire issued share capital of Profitable Industries “Shareholder(s)” holder(s) of the Shares “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company “Sino Stream” Sino Stream Limited is a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Transfer” the transfer and assignment, or the procurement of the transfer and assignment, of the entire issued share capitals of, and the shareholders’ loans to, Sino Stream, Riverside Trinity and Far Hero by the Company to the Vendor pursuant to the Acquisition Agreement “Vendor” Great Income Profits Limited, a company incorporated in the British Virgin Islands with limited liability and wholly-owned by an Independent Third Party “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “sq.m.” square meter(s) “%” per cent.

# For English translation only

For the purpose of illustration only, amounts denominated in RMB in this announcement have been translated into HK$ at the rate of HK$1 = RMB0.965. Such translation should not be construed as a representation that the amounts in question have been, could have been or could be converted at any particular rate or at all.

By order of the Board of MIDAS INTERNATIONAL HOLDINGS LIMITED Kwong Tin Lap Managing Director

Hong Kong, 1 August 2007

As at the date of this announcement, the Board comprises five executive Directors, being Mr. Richard Hung Ting Ho, Mr. Kwong Tin Lap, Mr. Kwok Chi Fai, Miss Ann Li Mee Sum and Mr. Wong Chi Sing, a non-executive Director, being Mr. Dominic Lai, and three independent non-executive Directors, being Mr. Abraham Shek Lai Him, Dr. Eddy Li Sau Hung and Mr. Yau Chi Ming.

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