Medlive Technology Co., Ltd. — Proxy Solicitation & Information Statement 2007

Jun 14, 2007

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

If you have sold or transferred all your shares in GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED , you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0921)

DISCLOSEABLE TRANSACTION

13 June 2007

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21

– i –

DEFINITIONS

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

“A Shares” Domestic ordinary Shares of the Company with a nominal value of RMB1.00 each and are listed on the Shenzhen Stock Exchange “Beach Warehouse Zone” A piece of land located at Nanchong Industrial Park, Nanjiang Village’s Committee, Daliang Street Office, Shunde District, the PRC “Board” The board of Directors

“Company” Guangdong Kelon Electrical Holdings Company Limited, a company incorporated in the PRC with limited liability and listed on the main board of the Stock Exchange and Shenzhen Stock Exchange

• “Directors” The current directors of the Company

• “Group” The Company and its Subsidiaries

• “H Shares” Overseas listed foreign shares of the Company with a nominal value of RMB1.00 each and are listed on the Stock Exchange

• “Home Appliance A piece of land located at No. 27 Rongqi Avenue, Company Zone” Desheng Residents’ Committee, Ronggui City Office, Shunde District, the PRC

• “Hong Kong” The Hong Kong Special Administrative Region of the PRC

• “Kelon Air-Conditioning” Guangdong Kelon Air-conditioning Company Limited, a company incorporated in the PRC and is a Subsidiary of the Company

“Land” The land located in Shunde District, Foshan City, the PRC, comprising six parcels of land set out in the section headed “INFORMATION OF THE LAND” in this circular

– 1 –

DEFINITIONS

• “Land Disposal”

• “Land Use Rights Transfer Agreement I”

• “Land Use Rights Transfer Agreement II”

• “Land Use Rights Transfer Agreement III”

• “Land Use Rights Transfer Agreement IV”

• “Land Use Rights Transfer Agreements”

• “Latest Practicable Date”

• “Listing Rules”

• “Marketing Building”

The disposal of the land use rights of the Land and the factories erected thereon from the Company to Purchaser I pursuant to the Land Use Rights Transfer Agreement I and the Supplemental Land Use Rights Transfer Agreement

The land use rights transfer agreement dated 13 May 2007 entered between the Company and Purchaser I to dispose of the land use rights of the Land and the factories erected thereon

The land use rights transfer Agreement II dated 13 May 2007 entered between the Company and Purchaser II to dispose of the land use rights of the Home Appliance Company Zone and the factories erected thereon

The land use rights transfer agreement III dated 14 May 2007 entered between Kelon Air-Conditioning and Purchaser III to dispose of the land use rights of the Beach Warehouse Zone

The land use rights transfer agreement III dated 14 May 2007 entered between the Company and Purchaser IV to dispose of the land use rights of Marketing Building and building thereon

Land Use Rights Transfer Agreement I, Supplemental Land Use Rights Transfer Agreement, Land Use Rights Transfer Agreement II, Land Use Rights Transfer Agreement III and Land Use Rights Transfer Agreement IV

• 11 June 2007, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

Rules Governing the Listing of Securities on the Stock Exchange

A piece of land located at No. 2 Fengye Road, Desheng Residents’ Committee, Ronggui City Office, Shunde District, the PRC

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DEFINITIONS

“Moving Fees” The moving fees in the sum of RMB50,000,000 paid/ payable by the Purchaser I to the Company in accordance with the Supplemental Land Use Rights Transfer Agreement “PRC” The People’s Republic of China “Purchaser I” (Foshan Shunde Xinzhenhua Property Investment Company), a company incorporated in the PRC “Purchaser II” (Hongke Investments Co., Ltd), a company incorporated in the PRC “Purchaser III” Two natural persons, comprising Zhou Dichang and Lv Zhihua or the registered company owned by them “Purchaser IV” (Haogang Business & Trade Co., Ltd, a company incorporated in the PRC “RMB” Renminbi yuan, the lawful currency of the PRC “Share(s)” Share(s) of RMB1.00 each in the capital of the Company, comprising the A Shares and the H Shares “Shareholder(s)” Holders of the Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subsidiary” or “Subsidiaries” Has the meaning defined in sections 2 and 2B of the Companies Ordinance (Cap. 32 of the Laws of Hong Kong) “Supplemental Land Use Rights The Supplemental Land Use Rights Transfer Agreement Transfer Agreement” dated 13 May 2007 entered between the Company and Purchaser I to dispose of the land use rights of the Land and the factories erected thereon “%” Per cent.

“%”

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LETTER FROM THE BOARD

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0921)

Executive Directors:

Mr. Tang Ye Guo Mr. Yang Yun Duo Mr. Wang Shi Lei Ms. Yu Shu Min Mr. Lin Lan Mr. Xiao Jian Lin

Registered office: No. 8 Ronggang Road Ronggui Street Shunde District Foshan City Guangdong Province China

Independent non-executive Directors:

Mr. Zhang Sheng Ping Mr. Lu Qing Mr. Cheung Yui Kai, Warren

Principal place of business in Hong Kong: Room 2502-2505 Harbour Centre 25 Harbour Road Wanchai Hong Kong

13 June 2007

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

INTRODUCTION

The Board is pleased to announce that on 13 May 2007, the Company entered into (i) the Land Use Rights Transfer Agreement I and the Supplemental Land Use Rights Transfer Agreement with Purchaser I to dispose of the land use rights of the Land and the factories erected thereon for a consideration of RMB91,200,000; and (ii) the Land Use Rights Transfer Agreement II with Purchaser II to dispose of the land use rights of the Home Appliance Company Zone and the factories erected thereon for a consideration of RMB29,000,000.

The Board is pleased to announce that on 14 May 2007, the Company or Kelon Air-Conditioning (as the case may be) entered into (iii) the Land Use Rights Transfer Agreement III with Purchaser III to dispose of the land use rights of the Beach Warehouse Zone for a consideration of RMB17,338,300; and (iv) the Land Use Rights Transfer Agreement IV with Purchaser IV to dispose of the land use rights of the Marketing Building and the building erected thereon for a consideration of RMB5,438,000.

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LETTER FROM THE BOARD

Taking into account the similarities of land use and that the disposals were all carried out in May 2007, the land disposals of the Company under the Land Use Rights Transfer Agreements are aggregated for the purpose of Rules 14.22 and 14.23 of the Listing Rules. Since the consideration ratio of the aggregated land disposals is more than 5% but less than 25% and each of the other applicable percentage ratios as defined in Chapter 14 of the Listing Rules is less than 25%, the land disposals constitute a discloseable transaction of the Company which is subject to the notification and announcement requirements under the Listing Rules.

The purpose of this circular is to provide you with details of the Land Use Rights Transfer Agreements and other information under the Listing Rules.

LAND USE RIGHTS TRANSFER AGREEMENT I

The Board is pleased to announce that on 13 May 2007, the Company entered into Land Use Rights Transfer Agreement I with Purchaser I to dispose of the land use rights of the Land and the factories erected thereon for a consideration of RMB91,200,000.

Date

13 May 2007

Parties

• (1) The Company, as the vendor; and

• (2) Purchaser I, as the purchaser.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Purchaser I and the ultimate beneficial owner of Purchaser I are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company.

Subject of Disposal

Pursuant to the Land Use Rights Transfer Agreement I, the Company has agreed to sell and Purchaser I has agreed to acquire the land use rights of the Land and the factories erected thereon.

Consideration

The consideration for the Land Disposal is RMB91,200,000 and was paid/is payable by Purchaser I in the following manners:

• (1) The sum of RMB9,120,000 was paid by Purchaser I to the Company on the date of signing the Land Use Rights Transfer Agreement I, i.e. 13 May 2007;

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LETTER FROM THE BOARD

• (2) The sum of RMB36,480,000 to be paid by Purchaser I to the Company within 30 days from the date of signing of the Land Use Rights Transfer Agreement I, i.e. on or before 11 June 2007;

• (3) The sum of RMB22,800,000 to be paid by Purchaser I to the Company within 3 days of the completion of the transfer procedures of the Land Disposal; and

• (4) The sum of RMB22,800,000 to be paid by Purchaser I to the Company on the date of the hand over of the Land and the factories erected thereon.

Apart from the sum of RMB9,120,000 paid by Purchaser I to the Company on the date of signing the Land Use Rights Transfer Agreement I on 13 May 2007, the Company has received the second payment in the sum of RMB36,480,000 from Purchaser I on 13 June 2007.

The Land Disposal was carried out by way of public auction conducted by the Company on 13 May 2007 at a floor price of RMB88,801,000, being the appraised value of the Land and the factories erected thereon as at 3 August 2006 appraised by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shungde District, Foshan City, which is a third party independent of the Company and its connected person as defined in the Listing Rules. Purchaser I was the highest bidder in the public auction.

A public auction was held by the Company with an intention to ensure that the Land Disposal was carried out in a fair manner and the land use rights of the Land and the factories thereon would be sold to the highest bidder.

As approved by the Board in November 2006 (please refer to the announcement of the Company dated 10 November 2006 for details), the Land Disposal will be made at a price not less than the appraised value of the Land and the factories erected thereon as at 3 August 2006. Therefore, the floor price for the public auction for the Land Disposal was set by the Company as RMB88,801,000.

Major Terms

• (1) In the event that Purchaser I fails to pay the consideration in accordance with the Land Use Rights Transfer Agreement I or propose to terminate the Land Use Rights Transfer Agreement I after the signing of the Land Use Rights Transfer Agreement I, the Company will treat the payments made by Purchaser I as compensation and will not return any payments already made by Purchaser I. In the event that the Company breaches any terms of the Land Use Rights Transfer Agreement I, it should give written notice to Purchaser I and shall repay to Purchaser I twice the amount of the payments already made by Purchaser I (excluding interests) within 10 days of the breach.

• (2) The hand over of the Land and the factories erected thereon shall be made by the Company to Purchaser I on or before 15 December 2007.

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LETTER FROM THE BOARD

SUPPLEMENTAL LAND USE RIGHTS TRANSFER AGREEMENT

Date

13 May 2007

Parties

• (1) The Company; and

• (2) Purchaser I.

Major Terms

• (1) The Supplemental Land Use Rights Transfer Agreement is supplemental to the Land Use Rights Transfer Agreement I.

• (2) Purchaser I agreed to pay the Moving Fees to the Company as moving fees for moving the machinery, equipment, tools, raw materials and stock in the factories erected on the Land to other areas. The Moving Fees was paid/payable by Purchaser I to the Company in the following manners:

• (i) The sum of RMB5,000,000 was paid by Purchaser I to the Company on the date of signing the Supplemental Land Use Rights Transfer Agreement, i.e. on 13 May 2007;

• (ii) The sum of RMB20,000,000 to be paid by Purchaser I to the Company within 3 days after the change of land use of the Land from industrial use to commercial and residential use; and

• (iii) The sum of RMB25,000,000 to be paid by Purchaser I to the Company on the date of the hand over of the Land and the factories erected thereon.

• (3) In the event that the government makes any compensation or payment to the Company to move the factories erected on the Land to other areas after payment of the Moving Fees by Purchaser I, the Company shall repay the Moving Fees to Purchaser I. If the compensation or payment made by the government to the Company is less than RMB50,000,000, the Company only have to repay the sum equivalent to the amount of the said compensation or payment to Purchaser I.

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LETTER FROM THE BOARD

LAND USE RIGHTS TRANSFER AGREEMENT II

The Board is pleased to announce that on 13 May 2007, the Company entered into the Land Use Rights Transfer Agreement II with Purchaser II to dispose of the land use rights of the Home Appliance Company Zone and the factories erected thereon for a consideration of RMB29,000,000.

Date

13 May 2007

Parties

• (1) The Company, as the vendor; and

• (2) Purchaser II, as the purchaser.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Purchaser II and the ultimate beneficial owner of Purchaser II are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company.

Subject of Disposal

Pursuant to the Land Use Rights Transfer Agreement II, the Company has agreed to sell and Purchaser II has agreed to acquire the land use rights of the Home Appliance Company Zone and the factories erected thereon.

Consideration

The consideration for the disposal under the Land Use Rights Transfer Agreement II is RMB29,000,000 and was paid/is payable by Purchaser II in the following manners:

• (1) The sum of RMB2,900,000 was paid by Purchaser II to the Company on the date of signing the Land Use Rights Transfer Agreement II, i.e. 13 May 2007;

• (2) The sum of RMB11,600,000 to be paid by Purchaser II to the Company within 30 days from the date of signing of the Land Use Rights Transfer Agreement II, i.e. on or before 11 June 2007; and

• (3) The sum of RMB14,500,000 to be paid by Purchaser II to the Company on the day of the completion of the transfer procedures of the land disposal.

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LETTER FROM THE BOARD

Apart from the sum of RMB2,900,000 paid by Purchaser II to the Company on the date of signing the Land Use Rights Transfer Agreement II on 13 May 2007, the Company has received the second payment in the sum of RMB11,600,000 from Purchaser II on 13 June 2007.

The land disposal was carried out by way of public auction conducted by the Company on 13 May 2007 at a floor price of RMB26,119,000, being the appraised value of the Home Appliance Company Zone and the factories erected thereon as at 11 May 2007 appraised by Guangdong Zhongguangxin Assets Appraisal Co., Ltd, which is a third party independent of the Company and its connected person as defined in the Listing Rules. The Company considers that such latest appraisal value represents the estimated fair market value of the land and therefore apply it as the floor price for the purpose of the auction. Purchaser II was the highest bidder in the public auction.

A public auction was held by the Company with an intention to ensure that the land disposal was carried out in a fair manner and the land use rights of the Home Appliance Company Zone and the factories thereon would be sold to the highest bidder.

Major Terms

• (1) In the event that Purchaser II fails to pay the consideration in accordance with the Land Use Rights Transfer Agreement II or propose to terminate the Land Use Rights Transfer Agreement II after the signing of the Land Use Rights Transfer Agreement II, the Company will treat the payments made by Purchaser II as compensation and will not return any payments already made by Purchaser II. In the event that the Company breaches any terms of the Land Use Rights Transfer Agreement II, it should give written notice to Purchaser II and shall repay to Purchaser II twice the amount of the payments already made by Purchaser II (excluding interests) within 10 days of the breach.

• (2) The Company has entered into tenancy agreements with a term from 18 December 2006 to 17 December 2011 for leasing part of the buildings on the Home Appliance Company Zone. After transferring the land use rights of Home Appliance Company Zone and the factories thereon, Purchaser II shall continue to perform such tenancy agreements. Before making full payment of the consideration by Purchaser II, the rental incomes under the tenancy agreements will be received and owned by the Company. Such rental incomes will be received and owned by Purchaser II after its full payment of the consideration. In the event that the Company has to compensate the existing tenants due to Purchaser II’s request to terminate the agreement, Purchaser II shall indemnify the Company in the same amount of its loss.

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LETTER FROM THE BOARD

• (3) The Company has maintained a chemical warehouse on the Home Appliance Company Zone with a site area of approximately 1,000 sq.m. and a gross floor area of approximately 898 sq.m.. The Company shall take sole full responsibility for the production safety and day-to-day management of the chemical warehouse as well as the compliance with the relevant requirements of the state environmental regulations of the PRC. Purchaser II shall not responsible for the safety and liability relating to chemical warehouse. The Company undertakes that, in the event of any liability issue occurring in the chemical warehouse, the Company shall solely be liable for all damages to the Company and Purchaser II shall take no responsibility.

LAND USE RIGHTS TRANSFER AGREEMENT III

The Board is pleased to announce that on 14 May 2007, Kelon Air-Conditioning entered into the Land Use Rights Transfer Agreement III with Purchaser III to dispose of the land use rights of the Beach Warehouse Zone for a consideration of RMB17,338,300.

Date

14 May 2007

Parties

• (1) Kelon Air-Conditioning, as the vendor; and

• (2) Purchaser III, as the purchaser.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Purchaser III and the ultimate beneficial owner of Purchaser III are third parties independent of Kelon Air-Conditioning and connected persons (as defined in the Listing Rules) of the Company.

Subject of Disposal

Pursuant to Land Use Rights Transfer Agreement III, Kelon Air-Conditioning has agreed to sell and Purchaser III has agreed to acquire the land use rights of the Beach Warehouse Zone.

Consideration

The consideration for the disposal under the Land Use Rights Transfer Agreement III is RMB17,338,300 and was paid/is payable by Purchaser III in the following manners:

• (1) The sum of RMB1,733,830 was paid by Purchaser III to Kelon Air-Conditioning on the date of signing the Land Use Rights Transfer Agreement III, i.e. 14 May 2007;

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LETTER FROM THE BOARD

• (2) The sum of RMB6,935,320 to be paid by Purchaser III to Kelon Air-Conditioning within 40 days from the date of signing of the Land Use Rights Transfer Agreement III, i.e. on or before 22 June 2007;

• (3) The sum of RMB4,334,575 to be paid by Purchaser III to Kelon Air-Conditioning within three days of the completion of the transfer procedures of the Beach Warehouse Zone; and

• (4) The sum of RMB4,334,575 to be paid by Purchaser III to Kelon Air-Conditioning on the date of the hand over of the Beach Warehouse Zone.

The land disposal was carried out by way of public auction conducted by Kelon Air-Conditioning on 14 May 2007 at a floor price of RMB14,610,000, being the appraised value of the Beach Warehouse Zone as at 11 May 2007 appraised by Guangdong Zhongguangxin Assets Appraisal Co., Ltd, which is a third party independent of Kelon Air-Conditioning and its connected person as defined in the Listing Rules. The Company considers that such latest appraisal value represents the estimated fair market value of the land and therefore apply it as the floor price for the purpose of the auction. Purchaser III was the highest bidder in the public auction.

A public auction was held by Kelon Air-Conditioning with an intention to ensure that the land disposal was carried out in a fair manner and the land use rights of the Beach Warehouse Zone would be sold to the highest bidder.

Major Term

In the event that Purchaser III fails to pay the consideration in accordance with the Land Use Rights Transfer Agreement III or propose to terminate the Land Use Rights Transfer Agreement III after the signing of the Land Use Rights Transfer Agreement III, Kelon Air-Conditioning will treat the payments made by Purchaser III as compensation and will not return any payments already made by Purchaser III. In the event that the Kelon AirConditioning breaches any terms of the Land Use Rights Transfer Agreement III, it should give written notice to Purchaser III and shall repay to Purchaser III twice the amount of the payments already made by Purchaser III (excluding interests) within 10 days of the breach.

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LETTER FROM THE BOARD

LAND USE RIGHTS TRANSFER AGREEMENT IV

The Board is pleased to announce that on 14 May 2007, the Company entered into the Land Use Rights Transfer Agreement IV with Purchaser IV to dispose of the land use rights of the Marketing Building and the buildings erected thereon for a consideration of RMB5,438,000.

Date

14 May 2007

Parties

• (1) The Company, as the vendor; and

• (2) Purchaser IV, as the purchaser.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Purchaser IV and the ultimate beneficial owner of Purchaser IV are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company.

Subject of Disposal

Pursuant to the Land Use Rights Transfer Agreement IV, the Company has agreed to sell and Purchaser IV has agreed to acquire the land use rights of the Marketing Building and the buildings erected thereon.

Consideration

The consideration for the disposal under the Land Use Rights Transfer Agreement IV is RMB5,438,000 and was paid/is payable by Purchaser IV in the following manners:

• (1) The sum of RMB538,800 was paid by Purchaser IV to the Company on the date of signing the Land Use Rights Transfer Agreement IV, i.e. 14 May 2007;

• (2) The sum of RMB2,744,000 was paid by Purchaser IV to the Company within 30 days from the date of signing of the Land Use Rights Transfer Agreement IV, i.e. on or before 12 June 2007; and

• (3) The sum of RMB2,155,200 to be paid by Purchaser IV to the Company on the day of the completion of the transfer procedures of the land disposal.

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LETTER FROM THE BOARD

The land disposal was carried out by way of public auction conducted by the Company on 14 May 2007 at a floor price of RMB5,407,000, being the appraised value of the Marketing Building and the buildings erected thereon as at 11 May 2007 appraised by Guangdong Zhongguangxin Assets Appraisal Co., Ltd, which is a third party independent of the Company and its connected person as defined in the Listing Rules. The Company considers that such latest appraisal value represents the estimated fair market value of the land and therefore apply it as the floor price for the purpose of the auction. Purchaser IV was the highest bidder in the public auction.

A public auction was held by the Company with an intention to ensure that the land disposal was carried out in a fair manner and the land use rights of the Marketing Building and the buildings thereon would be sold to the highest bidder.

Major Terms

• (1) In the event that Purchaser IV fails to pay the consideration in accordance with the Land Use Rights Transfer Agreement IV or propose to terminate the Land Use Rights Transfer Agreement IV after the signing of the Land Use Rights Transfer Agreement IV, the Company will treat the payments made by Purchaser IV as compensation and will not return any payments already made by Purchaser IV. In the event that the Company breaches any terms of the Land Use Rights Transfer Agreement IV, it should give written notice to Purchaser IV and shall repay to Purchaser IV twice the amount of the payments already made by Purchaser IV (excluding interests) within 10 days of the breach.

• (2) The Company has entered into 13 tenancy agreements with 13 parties for leasing part of the buildings on the Marketing Building. After transferring the land use rights of the Marketing Building and the buildings thereon, Purchaser IV shall continue to perform such tenancy agreements. Before making full payment of the consideration by Purchaser IV, the rental incomes under the tenancy agreements will be received and owned by the Company. Such rental incomes will be received and owned by Purchaser IV after its full payment of the consideration. In the event that the Company has to compensate the existing tenants due to Purchaser IV’s request to terminate the agreement, Purchaser IV shall indemnify the Company in the same amount of its loss.

• (3) The Company shall continue to use the outdoor billboard on the roof of the building on the Marketing Building until 31 December 2007. In the event that the Company intents to lease the same area from Party IV for outdoor advertisement, the Company shall be entitled to the preferential rights to lease such area at a favorable price not higher than 80% of the prevailing regular market price.

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LETTER FROM THE BOARD

INFORMATION OF THE LAND

The Land comprises six parcels of land located at Shunde District, Foshan City, the PRC, details of which are as follows:

				Area of
				the factory		Remaining
				erected		Term of
No.	Location	Document No.	Area	thereon	Use	Use
			(m2)	(m2)
1.	22 & 24, Rongxin Road,	Yue Fang Di	19,234.1	22,474.5	Industrial	37 years
	Zhenhua Residents’	Chan Zheng
	Committee,	Zi No.
	Ronggui Street Office,	C1570584
	Shunde District,
	Foshan City
2.	71 Zhenhua Road,	Yue Fang Di	25,760	13,198.6	Industrial	37 years
	Zhenhua Residents’	Chan Zheng
	Committee,	Zi No.
	Ronggui District,	C1150996
	Shunde City
3.	120 Ronggui Road North,	Yue Fang Di	11,419.1	29,157.6	Industrial	37 years
	Weihong Residents’	Chan Zheng
	Committee,	Zi No.
	Ronggui Street Office,	C1485751
	Shunde District,
	Foshan City
4.	6 Huanxin Road,	Yue Fang Di	2,713.7	6,807.6	Industrial	37 years
	Weihong Residents’	Chan Zheng
	Committee,	Zi No.
	Ronggui Street Office,	C1485750
	Shunde District,
	Foshan City
5.	129 Ronggui Road North,	Yue Fang Di	5,575.6	11,043.6	Industrial	37 years
	Weihong Residents’	Chan Zheng
	Committee,	Zi No.
	Ronggui Street Office,	C1159414
	Shunde District,
	Foshan City
6.	1 & 2 Huanxin Road,	Yue Fang Di	5,021.1	11,007.8	Industrial	37 years
	Chaoyang Residents’	Chan Zheng
	Committee,	Zi No.
	Ronggui District,	C1113583
	Shunde City

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LETTER FROM THE BOARD

The above six parcels of land had been mortgaged. The mortgagee of land nos. 4 and 6 was Shungde Ronggui Rural Credit Cooperative. The mortgagees of land nos. 1 to 3 and 5 were Bank of China Foshan Branch and Bank of China Foshan Shunde Ronggui Sub-branch. The Land Disposal is subject to the consent of the mortgagees of the Land. The Company is in the course of obtaining consent from the mortgagees. It is the current intention of the Company that the mortgage will be fully paid up by the Company by using its internal resources or the proceeds from the disposal or by charging other assets of the Company to the mortgagee on or before completion of the disposal, depending on the negotiations between the mortgagees and the Company.

The Land was used as factories and staff quarters by the Company. After the Land Disposal, the factories erected thereon will be relocated to other areas of the Company. Since the Company has made sufficient preparation before such relocation, such as choosing a suitable new location for the factories, it is therefore estimated by the Company that the relocation of the factories to other areas will not cause any material impact to the operation of the Company.

No net profit (both before and after taxation and extraordinary items) was attributable to the Land and the factories erected thereon in the 2005 and 2006 financial years.

The audited value of the Land and the factories erected thereon in the financial statements of the Group as at 31 December 2006 was RMB25,283,560.55. The net book value of the Land and the factories erected thereon as at 31 March 2007 was RMB24,179,728.49. When comparing the total consideration for the Land Disposal, i.e. RMB141,200,000, with the net book value of the Land and the factories erected thereon as at 31 December 2006, i.e. RMB25,283,560.55, there is a premium of value of RMB115,916,439.45.

After the payment of relevant taxes and expenses of the Land Disposal (including business tax, land appreciation tax and dyke levy) by the Company in the approximate total sum of RMB8,712,040, the Company is expected to obtain a gain for the Land Disposal in the approximate sum of RMB107,204,399.

FINANCIAL IMPACTS ON THE GROUP

Assets and Liabilities

The disposal of the Land and and the factories erected thereon under the Land Use Rights Transfer Agreement I and the Supplemental Land Use Rights Transfer Agreement will reduce the fixed assets of the Company by the amount of RMB25,283,560.55 (the audited net book value of the Land and the factories erected thereon as at 31 December 2006). Since all of the net sales proceeds in the sum of RMB132,487,960 will be used by the Company as repayment of bank loans, the liabilities of the Company will also decrease by RMB132,487,960.

Earnings

It is estimated by the Company that gain in the sum of RMB107,204,399 will be obtained by the Company as a result of the disposal and thus the earnings of the Group will increase by RMB107,204,399 as a result of the disposal.

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LETTER FROM THE BOARD

INFORMATION OF HOME APPLIANCE COMPANY ZONE, BEACH WAREHOUSE ZONE AND MARKETING BUILDING

	Home Appliance
	Company Zone	Beach Warehouse Zone	Marketing Building
Title document number	Yue Fang Di Zheng Zi	Yue Fang Di Zheng Zi	Yue Fang Di Zheng Zi
	No.C0232640	No.C0005412	No.C1150997
Expiry date of land use	9 September 2046	15 July 2047	22 September 2047
rights
Use	Industrial	Industrial	Industrial
Location	No.27 Rongqi Avenue,	Nanchong Industrial	No.2 Fengye Road,
	Desheng Residents’	Park, Nanjiang	Desheng Residents’
	Committee, Ronggui	Village’s Committee,	Committee, Ronggui
	Street Office, Shunde	Daliang Street Office,	Street Office, Shunde
	District	Shunde District	District
Mortgagee	Foshan City, Shunde	Foshan Branch and	Ronggui Agricultural
	branch of Industrial	Foshan Shunde	Cooperative
	and Commercial Bank	Ronggui Branch of	Community of Shunde
	of China Limited	Bank of China
Site area (square metre)	21,956.76	14,570	700.00
Floor area	24,335.58	8,496.7	5,013.00
(square metre)
Audited book value	23,725,487.00	6,948,784.9	3,828,685.39
(as at 31 December
2006) (RMB)
Net Profit before	Nil	Nil	Nil
taxation and
extraordinary items
for the year ended
31 December 2005
(RMB)

– 16 –

LETTER FROM THE BOARD

	Home Appliance
	Company Zone	Beach Warehouse Zone	Marketing Building
Net Profit before	Nil	Nil	43,420.03
taxation and
extraordinary items
for the year ended 31
December 2006
(RMB)
Net Profit after taxation	Nil	Nil	Nil
and extraordinary
items for the year
ended 31 December
2005 (RMB)
Net Profit after taxation	Nil	Nil	27,889.35
and extraordinary
items for the year
ended 31 December
2006 (RMB)
Premium of value of the	5,274,513 (when	10,389,515.1 (when	1,609,314.61 (when
disposal (RMB)	comparing the	comparing the	comparing the
	consideration, i.e.	consideration, i.e.	consideration, i.e.
	RMB29,000,000 with	RMB17,338,300 with	RMB5,438,000 with
	its audited book value	its audited book value	its audited book value
	as at 31 December	as at 31 December	as at 31 December
	2006, i.e. 23,725,487)	2006, i.e.	2006, i.e.
		6,948,784.9)	3,828,685.39)
Relevant taxes and	1,789,300	1,069,773	335,524.61
expenses of the
disposal (including
business tax, land
appreciation tax and
dyke levy) (RMB)
Gain for the disposal	3,485,213 (deducting	9,319,742 (deducting	1,273,790 (deducting
(RMB)	the relevant expenses	the relevant expenses	the relevant expenses
	and taxes, i.e.	and taxes, i.e.	and taxes, i.e.
	1,789,300, from the	1,069,773, from the	335,524.61, from the
	premium of value of	premium of value of	premium of value of
	the disposal, i.e.	the disposal, i.e.	the disposal, i.e.
	5,274,513)	10,389,515.1)	1,609,314.61)

– 17 –

LETTER FROM THE BOARD

The Board approved to put the Home Appliance Company Zone, Beach Warehouse and the Marketing Building and the buildings or factories thereon for public auction on 13 May 2007.

The disposal of the Home Appliance Company Zone, Beach Warehouse and the Marketing Building and the buildings or factories thereon is subject to the consent of their respective mortgagees. The Company is in the course of obtaining consent from such mortgagees. It is the current intention of the Company that the mortgage of the Home Appliance Company Zone, Beach Warehouse and the Marketing Building and the buildings or factories thereon will be fully paid up by the Company by using its internal resources or the proceeds from the disposal or by charging other assets of the Company to the mortgagees on or before completion of the disposal, depending on the negotiations between the mortgagees and the Company.

The Company is of the view that the disposal of the Home Appliance Company Zone, Beach Warehouse and the Marketing Building and the buildings or factories thereon will not have any material impact to the operation of the Company since such lands are non-core assets of the Company and the Company did not have much operation thereon. Furthermore, the purchasers have agreed to honour the tenancy agreements regarding such lands after the disposal.

FINANCIAL IMPACTS ON THE GROUP

Assets and Liabilities

The disposal of the Home Appliance Company Zone, Beach Warehouse and the Marketing Building and the buildings or factories erected thereon under Land Use Rights Transfer Agreement II, Land Use Rights Transfer Agreement III and Land Use Rights Transfer Agreement IV will reduce the fixed assets of the Company by the amount of RMB34,502,957.29 (audited net book value of the Home Appliance Company Zone, Beach Warehouse and the Marketing Building and the buildings or factories and the factories erected thereon as at 31 December 2006). Since all of the net sales proceeds in the sum of RMB48,581,702.39 will be used by the Company as repayment of bank loans, the liabilities of the Company will also decrease by RMB48,581,702.39.

Earnings

It is estimated by the Company that gain in the sum of RMB14,078,745 will be obtained by the Company as a result of the disposal and thus the earnings of the Group will increase by RMB14,078,745 as a result of the disposal.

– 18 –

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE LAND USE RIGHTS TRANSFER AGREEMENTS

The Company is principally engaged in the manufacture and sales of refrigerators and air-conditioners. The Land, the Home Appliance Company Zone, the Beach Warehouse Zone, the Marketing Building and the factories and buildings erected thereon are non-core assets of the Company. The disposals under the Land Use Rights Transfer Agreements are an initiative by the Company to dispose of its non-core assets so that the maintenance costs to be incurred by the Company in maintaining its non-core assets can be reduced and thus enhancing its assets structure, which will facilitate the optimal utilization of the assets of the Company.

All of the net proceeds from the disposals under the Land Use Rights Transfer Agreements are (after payment of the relevant taxes and expenses for the land disposals under the Land Use Rights Transfer Agreements), which is in the approximate total sum of RMB181,069,662.39, will be used for the repayment of part of the bank loans of the Company. This will help to lower the gearing ratio of the Company and further improve the operating conditions of the Company since the liabilities of the Company will be reduced. The credit and image of the Company will also be enhanced.

The Directors (including the independent non-executive Directors) consider that the disposals under the Land Transfer Rights Agreements are beneficial to the Company and the Shareholders as a whole and the terms and conditions in the Land Use Rights Transfer Agreements are fair and reasonable.

INFORMATION RELATING TO THE COMPANY

The Company is principally engaged in the manufacture and sales of refrigerators and air-conditioners.

INFORMATION RELATING TO PURCHASER I

Purchaser I was incorporated in the PRC on 23 December 2002 and is principally engaged in real estate management, leasing of properties and provision of environmental greening engineering services.

INFORMATION RELATING TO PURCHASER II

Purchaser II was incorporated on 14 July 2006 and is principally engaged in investment in industrial property industry and tourism development industry.

INFORMATION RELATING TO PURCHASER III

Purchaser III consists of two natural persons.

– 19 –

LETTER FROM THE BOARD

INFORMATION RELATING TO PURCHASER IV

Purchaser IV was incorporated on 9 August 2002 and is principally engaged in supply and marketing of goods and materials in the PRC (excluding restricted items and franchised, state controlled and monopolized merchandises), operating and acting as an agency of import and export business of various kinds of commodities and technologies (excluding commodities and technologies restricted by the PRC in operation or prohibited in import and export, and those involving licensing shall be operated under a valid license certificate).

DISCLOSEABLE AND CONNECTED TRANSACTIONS

Taking into account the similarities of land use and that the disposals were all carried out in May 2007, the land disposals of the Company under the Land Use Rights Transfer Agreements are aggregated for the purpose of Rules 14.22 and 14.23 of the Listing Rules. Since the consideration ratio of the aggregated land disposals is more than 5% but less than 25 % and each of the other applicable percentage ratios as defined in Chapter 14 of the Listing Rules is less than 25%, the land disposals constitute a discloseable transaction of the Company which is subject to the notification and announcement requirements under the Listing Rules.

SUSPENSION OF TRADING IN THE H SHARES

At the request of the Company, trading in the H Shares was suspended with effect from 10:00 a.m. on 16 June 2005 until further notice.

ADDITIONAL INFORMATION

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

Yours faithfully,

By Order of the Board of Guangdong Kelon Electrical Holdings Company Limited Tang Ye Guo

Chairman

– 20 –

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 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 in this circular misleading.

2. DISCLOSURE OF INTERESTS

Directors, supervisors and chief executive of the Company

As at the Latest Practicable Date, none of the Directors, supervisors and chief executive of the Company had interests and short positions in the Shares, underlying Shares and/or debentures (as the case may be) of the Company or any its associated corporations (within the meaning 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 and short positions which any such Director or chief executive is taken or deemed to have under such provisions of the SFO) or which were required to be entered into the register required to be kept by the Company under section 352 of the SFO or which were otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules.

As at the Latest Practicable Date, none of the Directors or supervisors of the Company had any interest, direct or indirect, in any asset which have been since 31 December 2006, being the date to which the latest published audited financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors or supervisors of the Company was materially interested in any contract or arrangement entered into by any member of the Group since 31 December 2006, being the date to which the latest published audited financial statements of the Company were made up, and which was significant in relation to the business of the Group.

– 21 –

GENERAL INFORMATION

APPENDIX

Interests of Substantial Shareholders

Interests in the Company

As at the Latest Practicable Date, so far as the Directors are aware, each of the following persons, not being a Director, supervisor or chief executive of the Company, had an interest in the Shares which falls to be disclosed to the Company and the Stock Exchange under the provisions of Division 2 and 3 of Part XV of the SFO:

			Proportion
			to the
			relevant	Proportion
			class of	to the total
		Number of	issued share	issued share
		issued	capital of	capital of
		ordinary	the	the
Name	Class of Shares	shares held	Company	Company
Hisense Air-conditioning	Domestic legal	238,872,074	77.68%	24.08%
	person shares
Shunde Economic	Domestic legal	68,666,667	20.32%	6.92%
Consultancy Company	person shares
Shenyin Wanguo Securities	H Shares	55,091,000	11.97%	5.55%
(H.K.) Limited
The Hong Kong & Shanghai	H Shares	51,343,925	11.17%	5.18%
Banking Corporation
Limited
Bank of China (Hong Kong)	H Shares	49,062,000	10.68%	4.95%
Limited
Guotai Junan Securities	H Shares	40,920,000	8.90%	4.12%
(Hong Kong) Limited
HSBC Nominees (Hong	H Shares	40,106,904	8.73%	4.04%
Kong) Limited
First Shanghai Securities	H Shares	25,860,000	5.63%	2.61%
Limited

– 22 –

GENERAL INFORMATION

APPENDIX

Interests in other members of the Group

As at Latest Practicable Date, so far as the Directors are aware, the following persons, not being a Director, supervisor or chief executive of the Company, was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group:

		Percentage
		shareholding of
	Shareholders holding 10%	shareholders in
Other members of	or more in other members	other members of
the Group	of the Group	the Group
Guangdong Kelon Air-	Weishi Investments Company	40%
Conditioner Co., Ltd	Limited
Guangdong Kelon Mould Co.,	Hua Yi Compressor Company	30%
Ltd	Limited
Foshan Shunde Rongsheng	Hua Yi Compressor Company	30%
Plastic Products Co., Ltd	Limited
Guangdong Huaao Electrical	Foshan City Shunde District	30%
Electronics Co., Ltd.	Yun Long Enquiry Service
	Company Limited
Chengdu Kelon Refrigerator	Chengdu Generator Factory	30%
Co., Ltd.
Hisense Ronshen (Yingkou)	Yingkou Yingleng (Group)	14.74%
Refrigerator Co., Ltd.	Bankruptcy Liquidation
	Team
Hangzhou Kelon Electrical	Hangzhou Xiling Group	30%
Company Limited	Company Limited
Xi’an Kelon Cooling	Xi’an Gaoke (Group)	29.05%
Co., Ltd.	Company Limited
Jiangxi Kelon Combine	Jiangxi Fadasi Domestic	45%
Electrical Appliances Co.,	Electrical Appliances
Ltd.	Company Limited

– 23 –

GENERAL INFORMATION

APPENDIX

		Percentage
		shareholding of
	Shareholders holding 10%	shareholders in
Other members of	or more in other members	other members of
the Group	of the Group	the Group
Kaifeng Kelon Air-	Kaifeng Economic Technique	30%
Conditioner Co., Ltd.	Development (Group)
	Company
Hua Yi Compressor Company	Huayi Electrical Appliances	32.69%
Limited	Company Limited
	A-share public shareholders	49.04%
Chongqing Kelon Rongsheng	Chongqing Shang She Group	24%
Refrigerator Sales Co., Ltd.
	Chongqing Huaqing	24%
	Commerce Company
	Chongqing Department	24%
	Building
Guangzhou Antaida Logistic	Guangzhou Zhongyuan	30%
Co., Ltd.	International Freight
	Forwarding Company
	Limited
	China Far Ocean Network	25%
	Company Limited
	Wuxi Small Swan Holdings	20%
	Company Limited
Wuhu Yingjia Electrical	Heavenly King Incorporated	20%
Machinery Co., Ltd
Sichuan Rongsheng Kelon	Xu Wei Ru	24%
Refrigerator Sales
Co., Ltd.

– 24 –

GENERAL INFORMATION

APPENDIX

		Percentage
		shareholding of
	Shareholders holding 10%	shareholders in
Other members of	or more in other members	other members of
the Group	of the Group	the Group
Beijing Hengsheng Xin	Foshan City Shunde District	11%
Chuang Technology	Yun Long Enquiry Service
Company	Company Limited
Guangdong Kelon Weili	Zhongshan City Buisha	20%
Electrical Appliances	Province Shunzhun Limited
Company Limited	Company

Save as disclosed above, as at the Latest Practicable Date, there was no other person (other than a Director, supervisor or chief executive of the Company or a member of the Group), who had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

3. SERVICE AGREEMENTS

As at the Latest Practicable Date, none of the Directors, proposed directors, supervisors or proposed supervisors of the Company had any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable by the Company within one year without payment of compensation (other than statutory compensation).

4. MATERIAL CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2006, being the date to which the latest published audited financial statements of the Group were made up.

– 25 –

GENERAL INFORMATION

APPENDIX

5. COMPETING INTEREST

As at the Latest Practicable Date, the following directors of the Company or their respective associates have interests in the following businesses which are considered to compete or are likely to compete, either directly or indirectly, with the businesses of the Group other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or the Group pursuant to the Listing Rules:

		Description of
	Name of entity	business of the
	which business is	entity which is
	considered to	considered to
	compete or likely	compete or likely to	Nature of
	compete with the	compete with the	interest of the
	business of the	business of the	Director in the
Name of Director	Group	Group	entity
Mr. Tang Ye Guo	The Subsidiaries	Production of	Director
	of Hisense	air-conditioning/
	Group	electrical products
Ms. Yu Shu Min	The Subsidiaries	Production of	Director and/or
	of Hisense	air-conditioning/	senior
	Group	electrical products	management
Mr. Yang Yung Duo	Hisense Group	Production of	Senior
		air-conditioning/	Management
		electrical products
Mr. Wang Shi Lei	Hisense Group	Production of	Senior
		air-conditioning/	Management
		electrical products
Mr. Lin Lan	Hisense Group	Production of	Senior
		air-conditioning/	Management
		electrical products
Mr. Xiao Jian Lin	Hisense Group or	Production of	Director
	its Subsidiaries	air-conditioning/
		electrical products

As at the Latest Practicable Date, save as disclosed above, none of the directors of the Company or their respective associates has interests in the businesses which compete or are likely to compete, either directly or indirectly, with the businesses of the Group.

– 26 –

GENERAL INFORMATION

APPENDIX

6. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, the following litigation or claims of material importance are pending or threatened against the Company and its subsidiaries:

			Claim
No.	Name of case	Plaintiff	Amount	Particulars	Status
			(RMB)
1.	Claims against the	Zhejiang	19,853,000	The plaintiff alleged that it had	The Company is
	Company initiated	Hangxiao		undertaken the construction works	undergoing the
	by Zhejiang			of the Company’s plain	litigation process in
	Hangzhou Xiu			warehouse factories No. 1 and	the intermediate
	Ganggou Holdings			No. 2 pursuant to a construction	people’s court in
	Company Limited			contract with the Company and	Fosan City, the
	(“Zhejiang			the Company defaulted in	PRC.
	Hangxiao”) in			payment of RMB1,193,000 in
	relation to a			construction fees. The plaintiff
	construction			sued the Company for payment of
	contract			RMB1,193,000 in construction
				fees and RMB17,660,000 in
				default penalties and the cost of
				legal proceedings.
2.	Claims against	China	69,550,000	China Construction Bank	The higher people’s
	Jiangxi Kelon and	Construction		Corporation Nanchang Changbei	court in Jiangxi has
	the Company	Bank		Branch applied to the court for	adjourned to
	initiated by China	Corporation		pre-trial security order on the	proceed with the
	Construction Bank	Nanchang		basis of dispute over the loan	case.
	Corporation	Changbei		contract and guarantee contract.
	Nanchang Changbei	Branch		On 5 August, the High Court of
	Branch in relation			Jiangxi Province ordered to
	to the loan contract			freeze Jiangxi Kelon’s 80%
	and guarantee			shareholdings in Shangqiu Kelon.
	contract			During the freezing period, such
				shareholdings shall not be
				pledged or transferred without the
				court’s prior consent. After
				various negotiation between the
				parties, Jiangxi Kelon has repaid
				approximately RMB70,450,000 to
				the Plaintiff.

– 27 –

GENERAL INFORMATION

APPENDIX

Claim

			Claim
No.	Name of case	Plaintiff	Amount	Particulars	Status
			(RMB)
3.	Claims against	Henan	27,160,000.00	The plaintiff applied for a pre-	The intermediate
	Jiangxi Kelon and	Province		trial security order from the court	people’s court in
	Kaifeng Kelon Air-	Kaifeng		to seize properties worth of	Kaifeng, Henan has
	Conditioner Co.,	Economic		RMB18,000,000 of Jiangxi Kelon	adjourned to
	Ltd. (“Kaifeng	Technology		and Kaifeng Kelon. The	proceed with the
	Kelon”) by Kaifeng	Development		equipment, factory and the land	case.
	Economic	(Group)		use right of Kaifeng Kelon were
	Technology	Company		seized.
	Development
	(Group) Company
	in relation to joint
	venture contract
4.	Claims initiated by	Can	US$	The plaintiff alleged that it had	The district court in
	CNA/MC Appliance	International	13,750,719.19	entered into a contract with the	the States has
	Corporation against	Inc./MC		defendant on 29 December 2003	adjourned to
	the Company and	Appliance		to purchase 108,108 units of	proceed with the
	Kelon International	Corporation		MCBR1000W refrigerators, that	case.
	Incorporation			the defendant failed to perform
				its obligations as set out in the
				contract on a timely basis and
				that the goods delivered were
				defective.
5.	Claim initiated	Jilin	18,057,915.00	The plaintiff sued for repayment	The intermediate
	against the	Commercial		of principal of loan and interest.	people’s court in
	Company and Jilin	Bank (Jiangbei			Jilin has adjourned
	Kelon Electrical	Branch)			to proceed with the
	Company Limited				case.
	by Jilin Commercial
	Bank

7. MISCELLANEOUS

• (1) The company secretary and qualified accountant of the Company is Mr. Dai Zu Mian. Mr. Dai is a member of the Association of Chartered Certified Accountants in the United Kingdom and is a certified public accountant in the PRC.

• (2) The English text of this circular shall prevail over its Chinese text.

– 28 –