Long Investment Corp — Proxy Solicitation & Information Statement 2006

Jul 12, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

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

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(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

DISCLOSEABLE TRANSACTION

5 July 2006

* For identification purpose only

CONTENTS

			Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
**Letter from **	**the **	Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix	—	General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

— i —

DEFINITIONS

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

“Announcement”	the announcement dated 16 June 2006 issued by the Company
	in relation to the Completion Guarantee;
“Back-to-Back Guarantee	the back to back guarantee agreement in respect of the
Agreement”	Completion Guarantee dated 2 June 2006 entered into
	between the Company and the Investor;
“Bank”	the Beijing branch of a licensed bank under the Banking
	Ordinance (Chapter 155 of the Laws of Hong Kong) which is
	an independent third party not connected with the Company;
“Company”	Shui On Construction and Materials Limited, a company
	incorporated in Bermuda and listed on the main board of the
	Stock Exchange;
“Completion Guarantee”	the completion guarantee dated 2 June 2006 entered into
	between the Company, the Bank and the PRC Project
	Company;
“Directors”	the directors of the Company;
“Distressed Property”	a piece of land situate at the northwest corner of the Dongsi
	Shitiao Bridge, Dongcheng District, Beijing, PRC, being the
	site for the incomplete building structures named Huapu
	Building;
“Group”	the Company and its subsidiaries (as defined under the Listing
	Rules);
“Holdco”	holding company of PRC Project Company and a 50-50 joint
	venture of the Company and the Investor;
“Investor”	JP Morgan, an institutional investor, which is an independent
	third party not connected with the Company;
“Latest Practicable Date”	3 July 2006, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information in
	this circular;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“PRC”	the People’s Republic of China;

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DEFINITIONS

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|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|“PRC|Project|Company”|(Beijing|Zhongtian|Hongye|
|Real|Estate|Consulting|Company,|Ltd.),|a|wholly-foreign|
|owned|enterprise|in|the|PRC|which|is|owned|as|to|100%|by|
|a|50-50|joint|venture|company|established|by|the|Company|
|and|the|Investor;|
|“SFO”|the|Securities|and|Futures|Ordinance|(Chapter|571|of|the|
|Laws|of|Hong|Kong);|
|“Shareholders”|the|shareholders|of|the|Company|from|time|to|time;|
|“Shareholders’|Agreement”|the|agreement|dated|26|May|2006|entered|into|between|Jumbo|
|China|Investments|Limited,|a|wholly-owned|subsidiary|of|the|
|Company,|and|Silver|Summit|(Delaware)|Corporation,|a|
|wholly-owned|subsidiary|of|the|Investor|for|the|establishment|
|of|Holdco;|
|“Stock|Exchange”|The|Stock|Exchange|of|Hong|Kong|Limited;|
|“HK$”|Hong|Kong|dollars,|the|lawful|currency|of|Hong|Kong;|
|“RMB”|Renminbi,|the|lawful|currency|of|the|PRC;|and|
|“US$”|United|States|dollars,|the|lawful|currency|of|the|United|States|
|of|America.|

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For illustration purpose, conversion of RMB and US$ to HK$ is based on the following exchange rates respectively:

RMB1.03 = HK$1.00

US$1.00 = HK$7.8

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

Executive Directors:

Mr. Vincent Lo Hong Sui (Chairman)

Mr. Lawrence Choi Yuk Keung (Vice-chairman)

Mr. Frankie Wong Yuet Leung (Chief Executive Officer) Mr. Raymond Wong Fook Lam Mrs. Vivien Lowe Hoh Wai Wan

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Non-Executive Director:

Professor Michael John Enright

Independent Non-Executive Directors:

Mr. Anthony Griffiths Mr. Moses Cheng Mo Chi Professor K.C. Chan

Head Office and Principal Place of Business in Hong Kong: 34th Floor Shui On Centre 6-8 Harbour Road Hong Kong

5 July 2006

To the Shareholders

Dear Sir/Madam,

DISCLOSEABLE TRANSACTION COMPLETION GUARANTEE

INTRODUCTION

On 16 June 2006, the Company announced that on 2 June 2006 it entered into (a) the Completion Guarantee in favour of the Bank whereby the Company agreed to guarantee the PRC Project Company’s obligation to complete the construction work at the Distressed Property (including cost overrun and pre-completion expenses); and (b) the Back-to-Back Guarantee Agreement whereby the Company would be indemnified on a fully back to back basis for 50% of payments (if any) made by the Company under the Completion Guarantee.

The purpose of this circular is to provide you with further information of the Completion Guarantee and the Back-to-Back Guarantee Agreement and other information in compliance with the requirements of the Listing Rules.

* For identification purpose only

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LETTER FROM THE BOARD

THE COMPLETION GUARANTEE

Date of the Completion Guarantee

2 June 2006

Parties to the Completion Guarantee

• (1) the Company as the Guarantor;

• (2) the PRC Project Company as the Borrower; and

• (3) the Bank as the Lender.

Background

The PRC Project Company is a PRC company in which the Company has a 50% attributable interest. The other 50% attributable interest of the PRC Project Company is owned by the Investor, an institutional investor which is an independent third party not connected with the Company. The PRC Project Company is held under Holdco, which in turn is a 50-50 joint venture of the Company and the Investor. Each of the Company and the Investor has equal board seats in Holdco. Both Holdco and the PRC Project Company are accounted for as jointly controlled entities in the financial statements of the Company.

Pursuant to the Shareholders’ Agreement entered into between Jumbo China Investments Limited, a wholly-owned subsidiary of the Company, and Silver Summit (Delaware) Corporation, a wholly-owned subsidiary of the Investor for the establishment of Holdco as the 50-50 joint venture to own the PRC Project Company on 26 May 2006, the PRC Project Company shall finance its business operation with third party loans, shareholders’ capital injection and/or shareholders’ loan.

The total investment costs of the PRC Project Company is estimated to be about RMB1.217 billion (approximately HK$1.182 billion), which represent the Company’s budget for the acquisition costs of the Distressed Property as discussed below, improvement cost of the buildings and operating cost for the PRC Project Company.

The PRC Project Company has agreed to acquire the Distressed Property from an independent third party vendor for a consideration of approximately RMB1.11 billion (approximately HK$1.08 billion) (which includes the estimated costs of RMB550 million (approximately HK$533.98 million) to complete construction of the Distressed Property and subject to adjustment of such construction cost). The consideration of approximately RMB1.11 billion (approximately HK$1.08 billion) was made after commercial negotiation between the PRC Project Company and the vendor, with reference to an independent property valuation prepared by Savills Valuation and Professional Services Ltd., an independent property valuer, which valued the Distressed Property with a gross development value (being the aggregate market value for all saleable units when the construction is completed) of about RMB1.7 billion (approximately HK$1.65 billion) as of 30 November 2005.

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LETTER FROM THE BOARD

The PRC Project Company has sought bank financing from the Bank in the amount of RMB730 million (approximately HK$708.74 million) and intends to finance the remaining total investment costs of the PRC Project Company of about RMB487 million (approximately HK$472.82 million) (i.e. RMB1.217 billion (approximately HK$1.182 billion) minus RMB730 million (approximately HK$708.74 million)) through shareholders’ capital injection and/or shareholders’ loan which would be shared ultimately equally by the Company and the Investor under the term of the Shareholders’ Agreement. Pursuant to the terms of the Shareholders’ Agreement, each of the Investor and the Company has already extended a shareholder loan totalling US$13.5 million (approximately HK$105.3 million) as at the date of the Announcement to Holdco. Accordingly, additional funding may still be required from the Company and the Investor to fund the balance of the total investment costs of the PRC Project Company. No firm plan as to such additional capital injection and/or shareholder loan has been agreed between the Company and the Investor.

Upon completion of acquisition of the Distressed Property, a building mortgage will be executed in favour of the Bank to secure the RMB730 million (approximately HK$708.74 million) bank financing, which is expected to be the only encumbrance on the Distressed Property after completion.

Other than the Completion Guarantee and the shareholder loan as described, as at the date of the Announcement, the Group has no other funding commitment in respect of the PRC Project Company or the development of the Distressed Property.

The Completion Guarantee

As mentioned, the PRC Project Company has obtained bank financing from the Bank in the amount of RMB730 million (approximately HK$708.74 million) to fund the acquisition and construction work at the Distressed Property. The Completion Guarantee was required by the Bank as a condition to its providing such bank financing to the PRC Project Company.

Under the Completion Guarantee, the Company has agreed with the Bank to guarantee, among other things, the PRC Project Company’s obligation to complete the construction work at the Distressed Property (including cost overrun and pre-completion expenses) on or before 31 December 2008. If the PRC Project Company fails to do so, the Company shall complete or cause to be completed all construction work at the Distressed Property on or before a date to be specified by the Bank. The Investor has executed the Back-to-Back Guarantee Agreement with the Company as described below.

The cost for completing the construction work at the Distressed Property, and therefore the exposure of the Company under the Completion Guarantee, is estimated by the PRC Project Company to be approximately RMB550 million (approximately HK$533.98 million). There is no prescribed maturity date for the Completion Guarantee, which will be discharged so long as the construction of the Distressed Property is completed on or before 31 December 2008.

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LETTER FROM THE BOARD

THE BACK-TO-BACK GUARANTEE AGREEMENT

Date of the Back-to-Back Guarantee Agreement

2 June 2006

Parties to the Back-to-Back Guarantee Agreement

• (1) the Company; and

• (2) JPMorgan Special Situations Asia Corporation.

In consideration of the Company providing the Completion Guarantee to the Bank, JPMorgan Special Situations Asia Corporation, a wholly-owned subsidiary of the Investor, has on 2 June 2006 entered into the Back-to-Back Guarantee Agreement with the Company whereby JPMorgan Special Situations Asia Corporation has agreed that it would:

• (i) pay a fixed fee equal to US$85,938 (approximately HK$670,316) to the Company within 10 working days after the first payment is made to the vendor;

• (ii) indemnify the Company, unconditionally, irrevocably and on a fully back to back basis, for 50% of all payments made by the Company (if any and including construction costs) under the Completion Guarantee; and

• (iii) pay an additional fee to the Company, at the same time as the indemnification payment is made by the Company under (ii) above, in an amount equal to 0.25% of such indemnification amount (if any) paid by the Company.

REASONS FOR ENTERING INTO THE COMPLETION GUARANTEE

The Distressed Property is a piece of land situate at the northwest corner of the Dongsi Shitiao Bridge, Dongcheng District, Beijing, PRC, being the site for the incomplete building structures named Huapu Building. Huapu Building is a commercial development, which was planned to comprise two 24-storey office buildings plus a 9-level retail podium with basement car parking spaces erected on the Distressed Property. At present, Huapu Building is an incomplete building with its office superstructure completed to storey 13 in the case of Tower 1 and storey 14 in the case of Tower 2. Construction of Huapu Building has been suspended since 2002 and the Company believes that the suspension was due to financial problems of the vendor.

The Directors believe that the acquisition and the development of the Distressed Property by the PRC Project Company will present an attractive investment opportunity for the Group (in particular having regard to the valuation of the Distressed Property set out above) while the PRC Project Company may benefit from the Company’s expertise in construction.

The Completion Guarantee and the Company’s shareholder loan to Holdco were made pursuant to the Shareholders’ Agreement. The Completion Guarantee was agreed after arm’s length negotiations

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LETTER FROM THE BOARD

and on a commercial basis (in particular having regard to the Company’s expertise in construction) between the Bank, the Company and the Investor, in order to facilitate the bank financing of the PRC Project Company. As the Company has expertise in construction and the Investor is a financial investor, the Bank has only requested a completion guarantee from the Company.

The Directors believe that the Company will only be liable to pay under the Completion Guarantee upon default of the PRC Project Company completing the construction work at the Distressed Property, and that the effective exposure of the Company under the Completion Guarantee is commensurate with its attributable interest in the PRC Project Company (i.e. 50%) as the Investor has provided a back-to-back guarantee to the Company under the Back-to-Back Guarantee Agreement.

As such, the Directors (including the independent non-executive Directors) consider that the Completion Guarantee and the Back-to-Back Guarantee Agreement have been made in the ordinary and usual course of business of the Group, and their terms are fair and reasonable and are in the interest of the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As mentioned above, the Company has extended a shareholder loan to Holdco, the 50-50 joint venture company established by the Company and the Investor. The amount of shareholder loan so extended by the Company as at the date of the Announcement was US$13.5 million (approximately HK$105.3 million), which was non-interest bearing, unsecured and repayable on demand. A shareholder loan in the same amount was also extended by the Investor to the Holdco on the same terms. The shareholder loan was advanced to Holdco for its general working capital.

The above shareholder loan made by the Company was financed by the Company using internal resources and available banking facilities.

Based on the estimated construction cost of RMB550 million (approximately HK$533.98 million), the exposure of the Company under the Completion Guarantee given by the Company together with the shareholder loan of US$13.5 million (approximately HK$105.3 million) exceeds 5% of the market capitalisation of the Company and the unaudited total assets of the Company as at 30 September 2005 respectively. As a result, the giving of the Completion Guarantee together with the said shareholder loan constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Company will monitor the amount of its total funding commitment in relation to the PRC Project Company from time to time and comply with any requirements under the Listing Rules (including Rule 14.15 of the Listing Rules) as and when necessary.

As the expected exposure of the Completion Guarantee together with the shareholder loan mentioned above exceeds 8% of the market capitalisation and the unaudited total assets of the Company as at 30 September 2005, the Company is also subject to the disclosure requirement of Rule 13.13 and Rule 13.16 of the Listing Rules.

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LETTER FROM THE BOARD

Other than the Completion Guarantee and the said shareholder loan, as at the date of the Announcement, the Group has no other funding commitment in respect of the PRC Project Company or the development of the Distressed Property. The Company will monitor the amount of its total funding commitment in relation to the PRC Project Company from time to time and comply with any requirements under the Listing Rules (including Rules 13.14 and 13.20 of the Listing Rules) as and when necessary.

FINANCIAL EFFECTS OF ENTERING INTO THE COMPLETION GUARANTEE AND THE BACK-TO-BACK GUARANTEE AGREEMENT

The payment of US$85,938 (approximately HK$670,316) pursuant to the Back-to-Back Guarantee Agreement would increase the Company’s revenues. As the Company’s obligations under the Completion Guarantee will be regarded as a contingent liability, the entering into of the Completion Guarantee and the Back-to-Back Guarantee Agreement do not have any immediate effect on the earnings, assets and liabilities of the Company.

GENERAL

The Group is engaged principally in cement operations in the PRC, construction and contracting, renovation and fitting-out in Hong Kong. The PRC Project Company is currently a single special-purpose vehicle for the acquisition and development of the Distressed Property. The Bank is the Beijing branch of a licensed bank in Hong Kong.

The Directors (including the independent non-executive Directors) confirm that, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Bank, the Investor and their respective ultimate beneficial owners are third parties independent of and not connected with any Director, chief executive or substantial shareholder of the Company or any of its subsidiaries or their respective associates.

ADDITIONAL INFORMATION

Your attention is drawn to the general information set out in the Appendix to this circular.

Yours faithfully, By order of the Board

Shui On Construction and Materials Limited Frankie Wong

Chief Executive Officer

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors and chief executive

As at the Latest Practicable Date, the interests of the Directors and the Company’s chief executive in the shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests which they are taken or deemed to have under such provisions of the SFO), the Model Code for Securities Transactions by Directors of Listed Companies and which were required to be entered in the register required to be kept under section 352 of the SFO were as follows:

Interests in the Shares

	Number of ordinary shares	Number of ordinary shares	Number of ordinary shares
	in the Company
	Personal		Other
Name of Director	Interests	Interests
Lo Hong Sui, Vincent	—	183,183,000
Choi Yuk Keung, Lawrence	740,000		—
Wong Yuet Leung, Frankie	—		—
Wong Fook Lam, Raymond	160,000		—
Lowe Hoh Wai Wan, Vivien	340,000		—
Enright, Michael John	—		—
Griffiths, Anthony	—		—
Cheng Mo Chi, Moses	—		—
Chan, K.C.	—		—

Note: The 183,183,000 shares are held as to 166,148,000 shares and 17,035,000 shares by the ultimate holding company, Shui On Company Limited (“SOCL”) and Shui On Finance Company Limited respectively, which is an indirect wholly-owned subsidiary of SOCL. SOCL is owned by the Bosrich Unit Trust. The units of the Bosrich Unit Trust are the property of a discretionary trust of which Mr. Lo Hong Sui, Vincent is a discretionary beneficiary. Accordingly, Mr. Lo Hong Sui, Vincent is deemed to be interested in such shares.

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GENERAL INFORMATION

APPENDIX

(b) Share Options of the Company

As at the Latest Practicable Date, the following Directors have interests in right of options granted under the share option scheme of the Company:

				Number of
		Subscription	Period during which	ordinary
	Date of	price	options outstanding	shares subject
Name of Director	grant	per share	are exercisable	to the options
		HK$
Choi Yuk Keung,	27.8.2002	6.00	27.2.2003 to 26.8.2007	168,000
Lawrence	27.8.2002	6.00	27.8.2005 to 26.8.2010	2,175,000
Wong Yuet Leung,	27.8.2002	6.00	27.2.2003 to 26.8.2007	160,000
Frankie	27.8.2002	6.00	27.8.2005 to 26.8.2010	1,600,000
Wong Fook Lam,	27.8.2002	6.00	27.2.2003 to 26.8.2007	110,000
Raymond	27.8.2002	6.00	27.8.2005 to 26.8.2010	1,300,000
Lowe Hoh Wai Wan,	27.8.2002	6.00	27.2.2003 to 26.8.2007	66,000
Vivien	27.8.2002	6.00	27.8.2005 to 26.8.2010	900,000

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the Company’s chief executive, had, under Division 7 and 8 of Part XV of the SFO, nor were they taken to or deemed to have under such provisions of the SFO, any interests and short positions in the shares, underlying shares or debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) or any interests which are required to be entered in the register kept by the Company pursuant to section 352 of the SFO or any interests which are required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies in the Listing Rules.

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GENERAL INFORMATION

APPENDIX

(c) Interests of shareholders discloseable pursuant to the SFO

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

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|||||||
|---|---|---|---|---|---|
|Percentage|of|
|Number|of|the|issued|share|
|ordinary|shares|capital|of|the|
|Name|in|the|Company|Company|
|Cheah|Cheng|Hye|16,144,000|5.84|%|
|(Note|1)|
|John|Zwaanstra|16,991,000|6.15%|
|(Note|2)|

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Note:

• (1) These shares are held by Value Partners Limited which is controlled by Mr. Cheah Cheng Hye.

• (2) These shares are held by Penta Investment Advisers Limited which is wholly owned by Mr John Zwaanstra.

As at the Latest Practicable date, save as disclosed in this circular, none of the Directors had, or was aware of any person who had interests or short positions in the shares, underlying shares or debentures 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.

(d) Substantial shareholding in other members of the Group

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, was directly or indirectly interested in 10 per cent or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

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|---|---|---|---|---|---|---|---|---|---|
|Effective|%|
|Name|of|owner|of|shares|or|equity|interest|equity|interest|
|(as|the|case|may|be)|Name|of|subsidiary|held|
|Panyu|Dynamic|Mark|Steel|&|20%|
|(Guangzhou|Panyu|Guanglu|Aluminum|Engineering|Co.|Ltd.|
|Industrial|Co.,|Ltd)|
|Eversound|Enterprise|Ltd.|Panyu|Dynamic|Mark|Steel|&|16%|
|Aluminum|Engineering|Co.|Ltd.|

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GENERAL INFORMATION

APPENDIX

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||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|Effective|%|
|Name|of|owner|of|shares|or|equity|interest|equity|interest|
|(as|the|case|may|be)|Name|of|subsidiary|held|
|Metro|Materials|Engineering|Lamma|Concrete|Products|Ltd.|40%|
|Company|Limited|
|Metro|Materials|Engineering|Guangdong|Lamma|Concrete|40%|
|Company|Limited|Products|Limited|
|Panyu|Shui|Fai|Metal|Works|22.5%|
|(Guangzhou|Panyu|Guanglu|Engineering|Company|Limited|
|Industrial|Co.,|Ltd)|
|Hip|Kwan|Engineering|Co.|Ltd.|Panyu|Shui|Fai|Metal|Works|22.5%|
|Engineering|Company|Limited|
|Eversound|Enterprise|Ltd.|Dynamic|Mark|Limited|20%|
|Hip|Kwan|Engineering|Co.|Ltd.|Shui|Fai|Metal|Works|Engineering|22.5%|
|Co.|Ltd.|
|Eversound|Enterprise|Ltd.|Shui|Fai|Metal|Works|Engineering|22.5%|
|Co.|Ltd.|
|Ecomat|(Hong|Kong)|Ltd|Pacific|Extend|Ltd.|18%*|
|Win|Media|Ltd|Pacific|Extend|Ltd.|10%|[#]|

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• The 18% equity interest held by Ecomat (Hong Kong) Ltd. carries voting right of 11.25%.

• The 10% equity interest held by Win Media Ltd. carries voting right of 6.25%.

(e) Material Interests

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which have since 31 March 2005 (being the date to which the latest published audited consolidated accounts of the Group were made up) been acquired or disposed of by or leased to the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to the Company or any of its subsidiaries.

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries, which was subsisting and was significant in relation to the business of the Group.

(f) Independence

As at the Latest Practicable Date, none of the Directors and their respective associates has any interest in a business apart from the Group’s business, which competes or is likely to compete, directly or indirectly, with the Group’s business and would require disclosure under Rule 8.10 of the Listing Rules.

— 12 —

GENERAL INFORMATION

APPENDIX

3. MATERIAL CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 March 2005, the date to which the latest published audited financial statements of the Company were made up.

4. LITIGATION

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

5. SERVICE CONTRACTS

There is no existing or proposed service contract between any of the Directors and the Company or any of its subsidiaries respectively, other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

6. GENERAL

• (a) The Qualified Accountant of the Company is Mr. Raymond Wong Fook Lam, a fellow of the Institute of Chartered Accountants in England and Wales and a fellow of the Hong Kong Institute of Certified Public Accountants.

• (b) The secretary of the Company is Mr. Edmond W S Chong, a qualified lawyer in Hong Kong and a member of CPA Australia.

• (c) The principal share registrar and the transfer office of the Company is the Bank of Bermuda Limited, 6 Front Street, Hamilton HM 11, Bermuda.

• (d) The Hong Kong branch share registrar and transfer office is Standard Registrars Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (e) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The head office and principal place of business of the Company is at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong.

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

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